Transocean Ltd. (RIG)

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Transocean Ltd. Reports Fourth Quarter and Full Year 2023 Results
February 19, 2024 17:21 ET
| Source: Transocean Ltd.

https://www.globenewswire.com/news-release/2024/02/19/2831452/0/en/Transocean-Ltd-Reports-Fourth-Quarter-and-Full-Year-2023-Results.html

STEINHAUSEN, Switzerland, Feb. 19, 2024 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $104 million, $0.13 per diluted share, for the three months ended December 31, 2023.

Fourth quarter results included net unfavorable items of $30 million, $0.04 per diluted share as follows:

$24 million, $0.03 per diluted share, loss on conversion of debt to equity;
$5 million, $0.01 per diluted share, loss on impairment of our investment in an unconsolidated affiliate; and
$3 million, discrete tax items, net.

These unfavorable items were partially offset by:

$1 million gain on early retirement of debt;
$1 million of other net favorable items.
After consideration of these net unfavorable items, fourth quarter 2023 adjusted net loss was $74 million, $0.09 per diluted share.

Contract drilling revenues for the three months ended December 31, 2023 increased sequentially by $28 million to $741 million due to increased average daily revenue and higher fleet revenue efficiency, as well as increased utilization on four rigs that were undergoing contract preparation and one rig that underwent a special periodic survey in the third quarter. This was partially offset by lower revenue generated by two rigs that were idle and two rigs that were undergoing contract preparation during the fourth quarter.

Contract intangible amortization represented a non-cash revenue reduction of $7 million, compared to $8 million in the prior quarter.

Operating and maintenance expense was $569 million, compared with $524 million in the prior quarter. The sequential increase was primarily due to rigs returning to work after undergoing contract preparation in the prior quarter and higher in-service maintenance costs across our fleet, partially offset by lower activity for two rigs that were idle in the fourth quarter.

After consideration of the fair value adjustment of the bifurcated exchange feature embedded in our 4.625% exchangeable bonds, which was favorable $145 million in the fourth quarter and unfavorable $93 million in the third quarter, interest expense net of amounts capitalized was $142 million, compared with $139 million in the prior period. Interest income was $10 million, compared with $12 million in the previous quarter.

The Effective Tax Rate(2) was (25.0)%, down from 16.3% in the prior quarter. The decrease was primarily due to reduced losses in the current quarter. The Effective Tax Rate excluding discrete items was (30.0)% compared to (8.7)% in the previous quarter.

Cash provided by operating activities was $98 million during the fourth quarter of 2023, representing an increase of $142 million compared to the prior quarter. The sequential increase was primarily due to timing of interest payments and increased collections from customers partially offset by decreased cash collected from, and increased payments to, our unconsolidated affiliates.

Fourth quarter 2023 capital expenditures of $220 million were primarily associated with the newbuild ultra-deepwater drillship Deepwater Aquila. This compares with $50 million in the prior quarter.

“We are very proud of our performance in 2023,” said Chief Executive Officer Jeremy Thigpen. “We added $3.2 billion of backlog in the calendar year, providing additional visibility to future cash flows. In addition to delivering standout personal and process safety results, we finished the year with a company-best 97.6% uptime performance. Notably, we generated these results in a year that included eight large-scale projects, including installation of the 20K BOP on the Deepwater Atlas, the industry’s first eighth-generation drillship, and the timely delivery and commissioning of the Deepwater Titan, our second eighth-generation drillship. Finally, we took delivery of our eighth 1,400 short ton drillship, the Deepwater Aquila.”

Thigpen concluded: “We remain encouraged by the continued tightness in the market and remain focused on delivering value to our shareholders as we progress through what we expect to be a multi-year upcycle.”

Full Year 2023

For the year ended December 31, 2023, net loss attributable to controlling interest totaled $954 million, $1.24 per diluted share. Full year results included $215 million, $0.28 per diluted share, net unfavorable items listed as follows:

$169 million, $0.22 per diluted share, loss on disposal of assets;
$57 million, $0.07 per diluted share, loss on impairment of assets;
$31 million, $0.04 per diluted share, loss on retirement of debt;
$27 million, $0.04 per diluted share, loss on conversion of debt to equity; and
$5 million, $0.01 per diluted share, loss on impairment of our investment in an unconsolidated affiliate; partially offset by,
$74 million, $0.10 per diluted share, related to favorable discrete tax items.
After consideration of these net unfavorable items, adjusted net loss for 2023 was $739 million, $0.96 per diluted share.