Company Overview - Helmerich & Payne (HP) has experienced a challenging year, with shares down 33%, underperforming the energy sector's 1.5% increase and the S&P 500's 11% growth, currently priced at $25.42, near its 52-week low of $23.80 [1] - HP is a leading player in land and offshore drilling, boasting the youngest and most efficient rig fleet, with advanced FlexRigs that enhance operational efficiency [2] Strengths - The company has a strong global presence, recently delivering eight FlexRigs to Saudi Arabia and acquiring KCA Deutag, which adds a $5.5 billion contract backlog [2] - HP maintains disciplined capital management, with $526 million in cash and an undrawn $950 million credit facility, alongside plans to repay a $400 million loan within 18 months [2] - The firm holds a 35% market share in the super-spec rig space, particularly in the Permian Basin, with industry-leading margins [2] Weaknesses - HP faces near-term challenges, particularly with the integration of KCA Deutag leading to higher costs, and expected international margins for the second quarter of fiscal 2025 ranging from a loss of $7 million to a loss of $3 million [3] - The North America Solutions segment, HP's largest, has seen revenues fall to $598 million in the first quarter of fiscal 2025, with further margin declines anticipated [3] - Increased debt from the KCA acquisition adds financial risk, with an additional $75 million in interest expenses this year, and HP remains vulnerable to oil price fluctuations and potential decreases in drilling demand due to industry consolidation [3] Industry Position - HP is part of the Zacks Oil and Gas – Drilling industry, which ranks in the bottom 9% of 247 industries, indicating potential underperformance [4] - The fiscal 2025 earnings per share estimate for HP has declined by 7% in the past 30 days, from $3.13 to $2.93 [4] - Despite solid assets and a strong balance sheet, near-term headwinds and industry pressures have led to a Zacks Rank 3 (Hold) for HP [4]

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Transocean is a leading international provider of offshore contract drilling services, operating a fleet of 34 mobile units for major energy companies, with a focus on ultra-deepwater and harsh environment operations [Company and Operations Overview](index=6&type=section&id=OVERVIEW) Transocean provides offshore contract drilling services for oil and gas wells globally, operating 34 mobile offshore drilling units with a focus on ultra-deepwater and harsh environments - Transocean is a leading international provider of offshore contract drilling services for oil and gas wells[13](index=13&type=chunk) - As of February 11, 2025, the company owned or had partial ownership interests in and operated **34 mobile offshore drilling units**, consisting of **26 ultra-deepwater floaters** and **eight harsh environment floaters**[13](index=13&type=chunk) - The company's primary business is contracting its mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells, with a focus on ultra-deepwater and harsh environment services[14](index=14&type=chunk) [Drilling Fleet Details](index=6&type=section&id=DRILLING%20FLEET) Details the composition and capabilities of Transocean's 34-unit drilling fleet, including dual-activity technology and uncontracted rigs Fleet Composition as of February 12, 2025 | Rig Category | Type | Count | | :--- | :--- | :--- | | **Ultra-deepwater floaters** | Drillship | 25 | | | Semisubmersible | 1 | | **Harsh environment floaters** | Semisubmersible | 8 | - The fleet includes drillships, which are highly mobile and suited for calmer seas, and semisubmersibles, known for stability in rough conditions[17](index=17&type=chunk)[18](index=18&type=chunk) - **23 ultra-deepwater drillships** are equipped with patented dual-activity technology, allowing for simultaneous drilling tasks to improve efficiency[17](index=17&type=chunk) - As of February 12, 2025, the company has **10 uncontracted rigs**, with seven of them having been out of service for over five years[71](index=71&type=chunk) [Drilling Contracts and Backlog](index=9&type=section&id=DRILLING%20CONTRACTS) Provides an overview of Transocean's drilling contracts and backlog, noting recent trends and general contract terms Contract Backlog Trend | Date | Contract Backlog (in billions) | | :--- | :--- | | Dec 31, 2024 | $8.74 | | Dec 31, 2023 | $9.25 | | Dec 31, 2022 | $8.34 | - Contract backlog decreased by **6% from 2023 to 2024** but increased by **5% compared to 2022**[28](index=28&type=chunk) - Drilling contracts are generally on a dayrate basis. They may be cancelable for customer convenience with an early termination fee, which may not fully compensate for the loss of the contract[28](index=28&type=chunk) [Major Customers](index=12&type=section&id=CUSTOMERS) Identifies Transocean's major customers and their revenue contributions, highlighting concentration risks Significant Customer Revenue Contribution (FY 2024) | Customer | % of Consolidated Operating Revenues | | :--- | :--- | | Shell plc | 27% | | Petróleo Brasileiro S.A. (Petrobras) | 21% | | Equinor ASA | 13% | - As of February 12, 2025, Petrobras and Shell represented **24%** and **17%** of the total contract backlog, respectively[35](index=35&type=chunk) [Human Capital Resources](index=12&type=section&id=HUMAN%20CAPITAL%20RESOURCES) Outlines Transocean's global workforce, collective bargaining agreements, and safety performance metrics - As of December 31, 2024, Transocean had a global workforce of approximately **5,800 individuals**, including about **330 contractors**, across **22 countries**[36](index=36&type=chunk) - Approximately **43% of the workforce**, primarily in Brazil and Norway, is represented by collective bargaining agreements[38](index=38&type=chunk) Safety Performance (FY 2024) | Metric | Rate | | :--- | :--- | | Total Recordable Incident Rate (TRIR) | 0.15 | | Lost Time Incident Rate (LTIR) | 0.00 | [Technological Innovation](index=16&type=section&id=TECHNOLOGICAL%20INNOVATION) Highlights Transocean's history of technological innovation, including dual-activity systems, advanced BOPs, and AI-driven automation - The company has a history of technological firsts, including the first dynamically positioned drillship and eighth-generation drillships[54](index=54&type=chunk) - Key technologies deployed include patented dual-activity systems on **24 floaters**, 20,000 psi blowout preventers on **two drillships**, and the HaloGuard℠ automated safety system on **eight units**[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - The company utilizes AI and data-driven approaches, such as the Inteliwell™ drilling automation platform and smart equipment analytics, to optimize processes and performance[57](index=57&type=chunk)[59](index=59&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) Transocean faces significant risks from industry cyclicality, volatile commodity prices, substantial debt, operational hazards, customer concentration, and evolving global regulations [Business and Operational Risks](index=20&type=section&id=RISKS%20RELATED%20TO%20OUR%20BUSINESS) Discusses risks inherent to the offshore drilling business, including commodity price volatility, industry competition, customer concentration, and operational hazards - Business is dependent on the offshore oil and gas industry, which is significantly affected by volatile commodity prices. Prolonged low prices can reduce demand for drilling services[65](index=65&type=chunk)[66](index=66&type=chunk) - The offshore drilling industry is highly competitive and cyclical. An oversupply of rigs, particularly during downturns, intensifies price competition and can lead to lower dayrates and utilization[67](index=67&type=chunk)[69](index=69&type=chunk) - The company relies heavily on a few major customers. In 2024, Shell, Petrobras, and Equinor accounted for **27%**, **21%**, and **13% of revenues**, respectively. The loss of a significant customer would adversely affect business[86](index=86&type=chunk) - Contract backlog of **$8.33 billion** (as of Feb 12, 2025) may not be fully realized due to factors like rig downtime, suspension of operations, or contract cancellations by customers[72](index=72&type=chunk)[73](index=73&type=chunk) - Operations involve numerous hazards (e.g., blowouts, fires, pollution). Insurance and customer indemnities may not be adequate to cover all potential losses[87](index=87&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) [Indebtedness Risks](index=32&type=section&id=RISKS%20RELATED%20TO%20OUR%20INDEBTEDNESS) Addresses risks associated with Transocean's substantial debt and its below-investment-grade credit rating - The company has a substantial amount of debt, totaling **$6.88 billion** at December 31, 2024, of which **$2.36 billion is secured**. This high leverage could limit financial flexibility and create competitive disadvantages[110](index=110&type=chunk) - Debt ratings are below investment grade, which could limit access to capital markets, increase borrowing costs, and lead to less favorable terms on financing[111](index=111&type=chunk)[113](index=113&type=chunk) [Legal, Regulatory, and Compliance Risks](index=34&type=section&id=RISKS%20RELATED%20TO%20LAWS%2C%20REGULATIONS%20AND%20GOVERNMENTAL%20COMPLIANCE) Covers risks from environmental and safety regulations, global political uncertainties, anti-bribery laws, and cybersecurity threats - Increasingly stringent environmental and safety laws can be costly, expose the company to liability, and limit operations. Compliance may require significant capital expenditures[116](index=116&type=chunk)[117](index=117&type=chunk) - The global nature of operations exposes the company to political and other uncertainties, including risks of expropriation, trade barriers, and changes in local laws and regulations[127](index=127&type=chunk)[128](index=128&type=chunk) - Failure to comply with anti-bribery laws like the FCPA and UK Bribery Act could result in significant fines, criminal penalties, and contract terminations[136](index=136&type=chunk) - The company is subject to cybersecurity risks and threats. A breach could disrupt operations, lead to loss of proprietary information, and result in legal claims[140](index=140&type=chunk)[141](index=141&type=chunk) [Tax-Related Risks](index=42&type=section&id=RISKS%20RELATED%20TO%20TAXES) Examines potential adverse impacts from changes in tax laws, treaties, or challenges to the company's operating structure - Changes in tax laws, treaties, or regulations in any country of operation could result in a higher effective tax rate and increased cash tax payments[144](index=144&type=chunk) - A successful tax challenge to the company's operating structure, intercompany pricing, or the loss of a major tax dispute could materially adversely affect earnings and cash flows[146](index=146&type=chunk)[147](index=147&type=chunk) [Risks Related to Swiss Jurisdiction](index=44&type=section&id=RISKS%20RELATED%20TO%20OUR%20JURISDICTION%20OF%20ORGANIZATION%20AND%20GOVERNING%20DOCUMENTS) Details specific risks arising from Transocean's Swiss corporate structure, including capital management limitations and tax implications for distributions - As a Swiss corporation, flexibility regarding capital management is limited by Swiss law, which requires shareholder approval for certain actions (e.g., dividends, large share issuances) that boards in other jurisdictions might handle[149](index=149&type=chunk) - Distributions to shareholders, such as dividends, may be subject to a **35% Swiss federal withholding tax**, unless made as a par value reduction or from qualifying additional paid-in capital[151](index=151&type=chunk) - The company's articles of association and Swiss law contain anti-takeover provisions that could prevent or delay an acquisition, potentially affecting share prices[153](index=153&type=chunk)[154](index=154&type=chunk) [Cybersecurity](index=46&type=section&id=Item%201C.%20Cybersecurity) Transocean's cybersecurity program aligns with the NIST framework, with board oversight, continuous threat detection, and no material incidents reported to date - The company's cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework[158](index=158&type=chunk) - Oversight is provided by the board of directors, with the audit committee receiving regular status reports on cybersecurity matters[160](index=160&type=chunk) - As of the filing date, the company is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on business operations[159](index=159&type=chunk) [Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) Details Transocean's legal proceedings, including a Clean Water Act consent decree and ongoing asbestos litigation, with no material impact expected - Effective January 3, 2024, a subsidiary entered into a civil consent decree with the DOJ and EPA to resolve alleged violations of the Clean Water Act, agreeing to an immaterial monetary penalty and corrective actions[166](index=166&type=chunk) - The company and its subsidiaries are defendants in numerous asbestos-related lawsuits. Management does not expect the ultimate liability from these claims to have a material adverse effect[408](index=408&type=chunk)[409](index=409&type=chunk) Part II [Shareholder and Market Information](index=49&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Provides details on Transocean's NYSE listing, Swiss tax implications for shareholder distributions, and the status of its share repurchase program - The company's shares are listed on the New York Stock Exchange under the ticker symbol "RIG". As of February 11, 2025, there were **878,886,948 shares outstanding**[169](index=169&type=chunk) - Distributions to shareholders may be subject to a **35% Swiss withholding tax**. However, distributions from par value reduction or qualifying additional paid-in capital (totaling **$17.4 billion** at Dec 31, 2024) are exempt[173](index=173&type=chunk)[174](index=174&type=chunk) Share Repurchase Program Status (as of Dec 31, 2024) | Description | Value (in billions) | | :--- | :--- | | Total Authorization | CHF 3.50 | | Remaining Authorization | CHF 3.24 ($3.57) | - No shares were purchased under the publicly announced repurchase program in the fourth quarter of 2024[185](index=185&type=chunk) [Management's Discussion and Analysis (MD&A)](index=54&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Transocean's 2024 financial performance, market outlook, significant events, and liquidity, noting revenue growth despite a net loss and asset impairment [Significant Events in 2024](index=54&type=section&id=SIGNIFICANT%20EVENTS) Summarizes Transocean's key strategic and financial activities in 2024, including acquisitions, asset disposals, and debt management - **Acquisition:** Acquired the remaining **67% of Orion**, owner of the Transocean Norge, for noncash consideration valued at **$431 million**[191](index=191&type=chunk) - **Asset Disposals:** Sold three rigs (Paul B. Loyd, Jr., Transocean Leader, Deepwater Nautilus) for total net cash proceeds of **$102 million**[191](index=191&type=chunk)[348](index=348&type=chunk) - **Debt Management:** Issued **$1.8 billion** in new senior notes (8.25% due 2029 and 8.50% due 2031) and used proceeds to tender for or redeem approximately **$1.7 billion** of existing debt[193](index=193&type=chunk)[382](index=382&type=chunk) - **Credit Facility:** Amended and extended its Secured Credit Facility to June 2028, with a current borrowing capacity of **$576 million**[192](index=192&type=chunk) [Market Outlook](index=56&type=section&id=OUTLOOK) Presents Transocean's positive outlook for the offshore drilling market, driven by energy demand and balanced rig supply - The industry outlook is positive, with forecasts indicating hydrocarbons will remain a critical energy source, driving demand for oil and gas[194](index=194&type=chunk) - The company expects continued investment in deepwater and harsh environment projects due to favorable economic returns and relatively lower carbon intensity[196](index=196&type=chunk) - Marketable supply and demand for high-specification rigs are becoming more balanced, leading customers to sign contracts with longer lead times and higher dayrates[197](index=197&type=chunk) [Performance and Other Key Indicators](index=58&type=section&id=PERFORMANCE%20AND%20OTHER%20KEY%20INDICATORS) Presents key performance metrics for Transocean's drilling fleet, including contract backlog, average daily revenue, and utilization rates Contract Backlog by Fleet (as of Feb 12, 2025) | Fleet | Contract Backlog (in millions) | | :--- | :--- | | Ultra-deepwater floaters | $6,363 | | Harsh environment floaters | $1,965 | | **Total** | **$8,328** | Key Performance Metrics (FY 2024 vs FY 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Fleet Avg. Daily Revenue | $430,100 | $382,300 | | Total Fleet Avg. Revenue Efficiency | 94.5% | 96.8% | | Total Fleet Avg. Rig Utilization | 60.5% | 51.9% | [Operating Results Analysis](index=61&type=section&id=OPERATING%20RESULTS) Provides a detailed analysis of Transocean's consolidated operating results, highlighting revenue growth, expense changes, and impairment losses Consolidated Operating Results Summary (in millions) | Line Item | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Contract drilling revenues | $3,524 | $2,832 | | Operating and maintenance expense | $(2,199) | $(1,986) | | Loss on impairment of assets | $(772) | $(57) | | Operating loss | $(417) | $(325) | | Net loss | $(512) | $(954) | - Contract drilling revenues increased by **$692 million (24%)** in 2024, primarily due to increased utilization, improved average daily revenues, and contributions from newbuild floaters[212](index=212&type=chunk) - Operating and maintenance expenses rose by **$213 million (11%)** due to increased operating activity, newbuild operations, and inflation, partially offset by cost savings from rig sales[213](index=213&type=chunk) - A significant loss on impairment of **$772 million** was recognized in 2024, related to the classification of three floaters as held for sale[216](index=216&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses Transocean's liquidity position, cash flow activities, and capital resources, including debt repayments and capital expenditures Summary of Cash Flows (in millions) | Cash Flow Category | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $447 | $164 | | Net cash used in investing activities | $(151) | $(423) | | Net cash (used in) provided by financing activities | $(350) | $263 | - At December 31, 2024, the company had **$560 million** in unrestricted cash and cash equivalents and **$569 million** of available borrowing capacity under its Secured Credit Facility[228](index=228&type=chunk)[365](index=365&type=chunk) - Primary uses of cash in 2024 were debt repayments (**$2.1 billion**) and capital expenditures (**$254 million**). Primary sources were debt issuance (**$1.77 billion**) and cash from operations (**$447 million**)[224](index=224&type=chunk)[227](index=227&type=chunk) [Critical Accounting Policies and Estimates](index=69&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Outlines Transocean's critical accounting policies and estimates, focusing on income taxes and property and equipment impairment assessments - **Income Taxes:** Significant judgment is applied to uncertain tax positions, with net unrecognized tax benefits of **$42 million** at year-end 2024. A valuation allowance of **$2.09 billion** is recorded against deferred tax assets due to uncertainty of realization[243](index=243&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - **Property and Equipment:** The carrying amount was **$15.83 billion** at year-end 2024. The company reviews its two asset groups (ultra-deepwater and harsh environment floaters) for impairment when indicators are present, using significant unobservable inputs (Level 3) for fair value estimates[249](index=249&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Market Risk Disclosures](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discloses Transocean's primary market risks, including interest rate, equity price, and currency exchange rate risks, and how they are managed - The company is exposed to interest rate risk, primarily on its **$6.94 billion** of fixed-rate long-term debt[257](index=257&type=chunk)[258](index=258&type=chunk) - Equity price risk exists due to the bifurcated compound exchange feature in the 4.625% Senior Guaranteed Exchangeable Bonds. A hypothetical **10% change in share price** would result in an **$18 million to $22 million** change in the feature's carrying amount[260](index=260&type=chunk) - Currency exchange rate risk is managed primarily by structuring customer contracts to provide payment in both U.S. dollars and local currency to match anticipated local currency requirements[261](index=261&type=chunk)[262](index=262&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Presents Transocean's audited consolidated financial statements for FY 2024, including key financial data and selected notes, with an unqualified auditor's opinion [Consolidated Financial Statements](index=81&type=section&id=Financial%20Statements) Provides a summary of Transocean's key consolidated financial data from the statement of operations, balance sheet, and cash flow statement Key Financial Data (FY 2024) | Metric | Amount (in millions) | | :--- | :--- | | **Statement of Operations** | | | Contract Drilling Revenues | $3,524 | | Operating Loss | $(417) | | Net Loss | $(512) | | Diluted Loss Per Share | $(0.76) | | **Balance Sheet (at Dec 31)** | | | Total Assets | $19,371 | | Total Liabilities | $9,086 | | Total Equity | $10,285 | | **Cash Flow Statement** | | | Net Cash from Operations | $447 | [Selected Notes to Financial Statements](index=86&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Highlights key information from selected notes to Transocean's consolidated financial statements, covering revenues, assets, debt, taxes, and commitments - **Note 5 (Revenues):** Major customers in 2024 were Shell (**27%**), Petrobras (**21%**), and Equinor (**13%**)[340](index=340&type=chunk) - **Note 6 (Long-Lived Assets):** Recognized a **$772 million impairment loss** in 2024 related to three floaters classified as held for sale[347](index=347&type=chunk) - **Note 8 (Debt):** Total debt principal at year-end was **$6.94 billion**. In 2024, the company issued **$1.8 billion** in new notes and retired **$1.7 billion** of existing notes through tenders and redemptions[354](index=354&type=chunk)[382](index=382&type=chunk) - **Note 10 (Income Taxes):** Reported an income tax benefit of **$11 million** on a pre-tax loss of **$523 million**, resulting in an effective tax rate of **2.2%**. A valuation allowance of **$2.09 billion** exists against deferred tax assets[393](index=393&type=chunk)[398](index=398&type=chunk) - **Note 12 (Commitments):** Has long-term service agreement obligations totaling **$610 million**[406](index=406&type=chunk) [Controls and Procedures](index=130&type=section&id=Item%209A.%20Controls%20and%20Procedures) States management's conclusion on the effectiveness of Transocean's disclosure controls and procedures as of December 31, 2024, with no material changes reported - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[444](index=444&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2024[445](index=445&type=chunk) Part III [Directors, Compensation, and Corporate Governance](index=130&type=section&id=Items%2010-14) Notes that information for directors, executive compensation, and corporate governance is incorporated by reference from the forthcoming 2025 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2025 proxy statement[449](index=449&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=131&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) Provides an index to the financial statements, schedules, and exhibits filed with the 10-K report, including details on valuation and qualifying accounts Schedule II - Valuation and Qualifying Accounts (in millions) | Description | Balance at 1/1/2024 | Additions | Deductions | Balance at 12/31/2024 | | :--- | :--- | :--- | :--- | :--- | | Allowance for credit losses | $2 | $0 | $0 | $2 | | Allowance for excess materials | $198 | $7 | $(27) | $178 | | Valuation allowance on deferred tax assets | $1,884 | $208 | $(3) | $2,089 |

Transocean Ltd. (NYSE:RIG) Q4 2024 Earnings Conference Call February 18, 2025 9:00 AM ET Company Participants Alison Johnson - Director of Investor Relations Jeremy Thigpen - Chief Executive Officer Keelan Adamson - President and Chief Operating Officer Thaddeus Vayda - Executive Vice President and Chief Financial Officer Roddie Mackenzie - Executive Vice President and Chief Commercial Officer Conference Call Participants Eddie Kim - Barclays Kurt Hallead - Benchmark Fredrik Stene - Clarksons Securities Aru ...

Financial Performance - Contract drilling revenues for Q4 2024 were $952 million, a sequential increase of $4 million from Q3 2024 and a year-over-year increase of $211 million from Q4 2023[3]. - Adjusted net income for Q4 2024 was $27 million, or a loss of $0.09 per diluted share, compared to a net loss of $494 million in Q3 2024[2][9]. - Full year 2024 net loss attributable to controlling interest totaled $512 million, or $0.76 per diluted share, with adjusted net loss of $54 million, or $0.26 per diluted share[9]. - Net loss for 2024 was $512 million, an improvement from a net loss of $954 million in 2023[28]. - The company reported a net income (loss) of $7 million for the quarter ending December 31, 2024, compared to a net loss of $104 million for the same quarter in 2023[34]. Revenue and Utilization - Total contract drilling revenues increased from $2,832 million in 2023 to $3,524 million in 2024, representing a growth of 24.4%[30]. - Average daily revenue for the total fleet rose from $382,300 in 2023 to $430,100 in 2024, an increase of 12.5%[30]. - Total fleet average rig utilization improved from 51.9% in 2023 to 66.8% in 2024, reflecting a significant increase of 28.5%[30]. - Contract drilling revenues for the quarter ending December 31, 2024, were $952 million, up from $741 million in the same quarter of 2023, representing a growth of approximately 28.5%[36]. - Adjusted Contract Drilling Revenues for YTD December 31, 2024, were $3,528 million, an increase from $2,884 million in the same period of 2023, reflecting a growth of approximately 22.4%[36]. Cash Flow and Expenses - Cash provided by operating activities in Q4 2024 was $206 million, an increase of $12 million compared to Q3 2024[7]. - Cash flows from operating activities provided $447 million in 2024, compared to $164 million in 2023[28]. - Free Cash Flow for the year-to-date (YTD) 2024 was $193 million, compared to a negative Free Cash Flow of $263 million in YTD 2023[42]. - Cash provided by operating activities for Q4 2024 was $206 million, up from $98 million in Q4 2023[42]. - Levered Free Cash Flow for Q4 2024 was $147 million, compared to a negative $132 million in Q4 2023[42]. Expenses and Debt - Operating and maintenance expenses for Q4 2024 were $579 million, up from $563 million in Q3 2024, driven by higher in-service maintenance costs[4]. - Interest expense net of capitalized amounts was $152 million in Q4 2024, compared to $154 million in Q3 2024[5]. - Long-term debt decreased from $7,043 million in 2023 to $6,195 million in 2024, a decline of 12.1%[26]. - Debt repayments for YTD 2024 amounted to $2.1 billion, with $30 million in Q4 2024[42]. Tax and Impairment - The effective tax rate for Q4 2024 was 89.0%, significantly up from 6.0% in the prior quarter, primarily due to higher income and increases in valuation allowance[6]. - Income before income taxes for Q4 2024 was $62 million, a significant improvement from a loss of $525 million in Q3 2024 and a loss of $941 million in Q4 2023[38]. - The company incurred a loss on impairment of assets totaling $772 million for the YTD ending December 31, 2024, compared to $57 million for the same period in 2023[36]. - The company reported a loss on impairment of assets of $629 million in Q3 2024, with no such loss reported in Q4 2024[38]. Operational Metrics - The company operates a fleet of 34 mobile offshore drilling units, including 26 ultra-deepwater floaters and eight harsh environment floaters[13]. - Average daily revenue for ultra-deepwater floaters increased from $393,700 in 2023 to $428,000 in 2024, a rise of 8.7%[30]. - Revenue efficiency for the total fleet averaged 94.5% in 2024, compared to 96.8% in 2023, indicating a slight decrease[30]. - Adjusted EBITDA for Q4 2024 was $323 million, with an adjusted EBITDA margin of 33.9%[1]. - The company reported an EBITDA of $532 million for the YTD ending December 31, 2024, compared to $449 million for the same period in 2023, indicating an increase of approximately 18.5%[36].

Acquisitions and Sales - In June 2024, Transocean acquired a 67.0% ownership interest in Orion Holdings for noncash consideration valued at $431 million, including $130 million in senior notes and 55.5 million shares[62]. - In February 2024, Transocean sold two harsh environment floaters for net cash proceeds of $49 million, and in July 2024, sold an ultra-deepwater floater for $53 million[62]. - In September 2024, Transocean executed agreements for the sale of two ultra-deepwater floaters with expected net cash proceeds of $345 million, recognizing a loss of $629 million associated with their impairment[62]. - During the nine months ended September 30, 2024, the company completed the sale of one ultra-deepwater floater and two harsh environment floaters, with plans to sell two additional ultra-deepwater floaters[86]. Financial Performance - A loss of $143 million was recognized in the nine months ended September 30, 2024, due to impairment of rig and related assets classified as held for sale[62]. - The company reported contract drilling revenues of $948 million for the three months ended September 30, 2024, a 33% increase from $713 million in the same period last year[74]. - Contract drilling revenues for Q3 2024 increased by approximately $481 million (23%) to $2,572 million compared to Q3 2023[78]. - For the nine months ended September 30, 2024, contract drilling revenues increased by approximately $305 million due to higher utilization[79]. - The company reported a net loss of $519 million for the nine months ended September 30, 2024, an improvement from a net loss of $850 million in the same period of 2023, reflecting a change of $331 million[82]. Debt Management - Transocean issued $900 million in senior notes due May 2029 and $900 million in senior notes due May 2031, receiving $1.77 billion in cash proceeds[63]. - The company used $2,073 million for debt repayments, an increase of $366 million from $1,707 million in the previous year[84]. - The fair value of the company's outstanding debt was $7.03 billion as of September 30, 2024, and $7.31 billion as of December 31, 2023[94]. - The company is actively managing its debt portfolio through retirements and new issuances to optimize its capital structure[94]. Operational Metrics - As of October 24, 2024, Transocean operated 34 mobile offshore drilling units, including 26 ultra-deepwater floaters and eight harsh environment floaters[61]. - Rig utilization for ultra-deepwater floaters improved to 60.7% for the three months ended September 30, 2024, compared to 45.0% in the same period of 2023[73]. - Average daily revenue for ultra-deepwater floaters was $426,700 for the three months ended September 30, 2024, compared to $406,500 for the same period in 2023, reflecting a 4.3% increase[71]. - The total fleet average daily revenue rose to $436,800 for the three months ended September 30, 2024, up from $391,300 in the same period last year, marking a 11.6% increase[72]. Future Outlook - The company expects robust demand for oil and gas due to population growth and improved living standards in non-OECD countries, contributing to increased energy demand[66]. - The contract backlog for ultra-deepwater floaters increased to $7,144 million as of October 24, 2024, up from $6,666 million in July 2024[70]. - The company anticipates demand for harsh environment floaters to accelerate through at least 2028, with contract durations likely to favorably influence dayrates[66]. - The uncommitted fleet rate for ultra-deepwater floaters is projected to be 37% in 2024, increasing to 87% by 2028[68]. Expenses and Cash Flow - Operating and maintenance expenses increased by $203 million (14%) to $1,620 million in Q3 2024 compared to Q3 2023[78]. - Net cash provided by operating activities increased to $241 million, up from $66 million in the prior year, primarily due to increased cash collected from customers[82]. - Capital expenditures for the nine months ended September 30, 2024, were $225 million, compared to $207 million in 2023, indicating an increase of $18 million[83]. - The company expects to utilize existing cash balances and cash flows from operating activities to meet anticipated near-term obligations, including capital expenditures and scheduled debt maturities[85].

Financial Data and Key Metrics Changes - For Q3 2024, Transocean reported adjusted EBITDA of $342 million on contract drilling revenues of $948 million, resulting in an adjusted EBITDA margin of approximately 36% [8][41] - The company experienced a net loss attributable to controlling interest of $494 million, equating to a net loss of $0.58 per diluted share [41] - Total liquidity at the end of Q3 2024 was approximately $1.4 billion, including $435 million in unrestricted cash and cash equivalents [44] Business Line Data and Key Metrics Changes - Contract drilling revenues were slightly above guidance due to extended operations of the Deepwater Invictus and shorter out-of-service durations for other rigs [42] - Operating and maintenance expenses were $563 million, below guidance due to delays in non-critical maintenance activities [43] - The average daily revenue for contract drilling was approximately $437,000 [42] Market Data and Key Metrics Changes - The active fleet utilization for 2025 exceeds 97% and remains at roughly 86% through the first half of 2026 [15] - The company secured $1.3 billion in recent contract awards, increasing total backlog to $9.3 billion, a 7.5% sequential increase [21] - Global upstream CapEx is forecasted to remain flat at just under $500 billion per year, with deepwater investment expected to grow from 12% in 2024 to 15% in 2026 [25] Company Strategy and Development Direction - The company aims to convert its $9.3 billion backlog to revenue and cash, focusing on financial stability and potential shareholder distributions by late 2026 [37][51] - Transocean emphasizes the importance of owning and operating a high-specification rig fleet, which has proven to be a successful strategy through market cycles [17][22] - The company is actively engaged in discussions for projects beginning in 2026 and beyond, indicating a focus on long-term growth [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the longevity of the current upcycle, supported by market studies and customer discussions [24] - The company noted that the breakeven cost for deepwater projects is around $40 per barrel, allowing customers to remain profitable even with lower oil prices [105] - Management highlighted that premium assets attract premium day rates, and the company is well-positioned to capitalize on this trend [22][23] Other Important Information - The company has implemented Critical Operations Authorization Centers to improve operational reliability, achieving a 20% improvement in operational reliability since their establishment [32][33] - There have been some reliability issues related to new 20,000-psi blowout preventers, but management is confident in resolving these challenges [34][75] Q&A Session Summary Question: Expectations on day rates trajectory for next year - Management indicated that their average fixture for 1,400-ton class rigs has been around $520,000, suggesting stability in day rates despite potential soft spots in the market [55][60] Question: Thoughts on industry consolidation - Management believes consolidation is healthy for the industry and sees room for more, emphasizing the benefits of combining assets for operational efficiency [70][72] Question: Clarification on BOP reliability issues - Management acknowledged the reliability challenges as part of the commissioning process for new technology, but expressed confidence in resolving these issues quickly [74][75] Question: Underlying cost inflation in 2025 guidance - Management noted an average inflation rate of 3% for 2025, with higher inflation observed in specific jurisdictions and activities [79][81] Question: Incremental demand in Namibia - Management indicated that both drillships and semisubmersibles are being discussed for projects in Namibia, depending on environmental conditions [82][84] Question: Decision process for stacking rigs - Management highlighted their historical approach to reducing excess capacity and emphasized the importance of asset quality in making decisions about rig utilization [87][91]

Financial Performance - Contract drilling revenues for Q3 2024 increased to $948 million, up $87 million sequentially and $235 million year-over-year[3]. - Adjusted net income for Q3 2024 was $64 million, a significant improvement from a net loss of $123 million in the previous quarter[2]. - The company reported a net loss attributable to controlling interest of $494 million, or $0.58 per diluted share, for Q3 2024[1]. - Adjusted EBITDA for Q3 2024 was $342 million, reflecting a $58 million increase from the previous quarter[1]. - Net loss for the nine months ended September 30, 2024, was $519 million, compared to a net loss of $850 million for the same period in 2023, representing a 39% improvement[29]. - The net loss for the quarter ended September 30, 2024, was $(519) million, compared to a net loss of $(25) million for the same quarter in 2023, reflecting a significant increase in losses[36]. - Adjusted Contract Drilling Revenues for the quarter ended September 30, 2024, were $2,884 million, compared to $2,136 million for the same quarter in 2023, marking a 35% increase[36]. Expenses and Liabilities - Operating and maintenance expenses rose to $563 million, compared to $534 million in Q2 2024, primarily due to increased fleet activity[4]. - Total liabilities decreased to $9,282 million as of September 30, 2024, from $9,838 million as of December 31, 2023, a decrease of 5.6%[26]. - The company reported capital expenditures of $225 million for the nine months ended September 30, 2024, compared to $207 million for the same period in 2023, reflecting a 8.7% increase[28]. - The company experienced a loss on impairment of assets totaling $772 million for the nine months ended September 30, 2024[37]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $194 million, an increase of $61 million compared to the prior quarter[8]. - Free Cash Flow for YTD 09/30/24 is $241 million, with QTD 09/30/24 at $194 million[40]. - The company reported a Free Cash Flow of $164 million for the period, with debt repayments totaling $(1,717) million[40]. - Operating activities provided cash of $448 million for the period, with capital expenditures of $(717) million[40]. Tax and Effective Tax Rate - The effective tax rate decreased to 6.0% from 474.5% in the prior quarter, primarily due to rig impairments and sales[7]. - The effective tax rate for the three months ended September 30, 2024, was 6.0%, while the effective tax rate excluding discrete items was 22.5%[37]. Fleet and Backlog - The backlog as of October 2024 was approximately $9.3 billion, indicating strong future demand for the company's services[10]. - More than 97% of Transocean's active fleet is contracted for 2025, demonstrating strong customer demand for its high specification rigs[10]. - The average fleet utilization rate improved to 63.9% for the three months ended September 30, 2024, compared to 49.4% for the same period in 2023, an increase of 29%[31]. Asset Management - Total current assets decreased to $2,343 million as of September 30, 2024, from $2,126 million as of December 31, 2023, a decline of 10%[25]. - Total assets decreased to $19,510 million as of September 30, 2024, down from $20,254 million as of December 31, 2023, a reduction of 3.7%[27]. - The total equity attributable to controlling interest decreased to $10,227 million as of September 30, 2024, from $10,415 million as of December 31, 2023, a decline of 1.8%[27]. Earnings Per Share - Diluted earnings per share, as reported, is $(0.65) for the year-to-date as of September 30, 2024, compared to $(0.03) for the previous quarter[35]. - Adjusted Diluted Loss Per Share is $(0.96) for the year-to-date as of September 30, 2024, compared to $(0.36) for the previous quarter[35].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 TABLE OF CONTENTS (Mark one) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 FORM 10-Q OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 001-38373 Transocean Ltd. (Exact name of registrant as specified in its charter) Switzerland 98-0599916 ...

Transocean Ltd. (NYSE:RIG) Q2 2024 Earnings Conference Call August 1, 2024 11:00 AM ET Company Participants Alison Johnson - Director, IR Jeremy Thigpen - CEO Keelan Adamson - President and COO Thad Vayda - EVP and CFO Roddie Mackenzie - EVP and CCO Conference Call Participants Eddie Kim - Barclays Greg Lewis - BTIG David Smith - Pickering Energy Partners Kurt Hallead - Benchmark Doug Becker - Capital One Josh Jayne - Daniel Energy Partners Operator Good day, everyone, and welcome to today's Second Quarter ...

EXHIBIT 99.1 TRANSOCEAN LTD. REPORTS SECOND QUARTER 2024 RESULTS | | | Three months ended | | | | Three months ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | March 31, | | sequential | | June 30, | year-over-year | | | | 2024 | 2024 | change | | | 2023 | change | | | (In millions, except per share amounts, percentages and backlog) | | | | | | | | | | Contract drilling revenues | $ 861 | $ 763 | $ 98 | | $ | 729 | $ | 132 | | Adjusted contract drilling revenues | $ 861 | $ ...