(GLOBE NEWSWIRE) — Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $175 million, $0.26 per diluted share, for the three months ended March 31, 2022.
First quarter 2022 results included net favorable non-cash item of $8 million, or $0.02 per diluted share, related to discrete tax items. After consideration of this net favorable item, first quarter 2022 adjusted net loss was $183 million, $0.28 per diluted share, compared to $126 million, $0.19 per diluted share, in the fourth quarter of 2021.
Contract drilling revenues for the three months ended March 31, 2022 decreased sequentially by $35 million to $586 million, primarily due to decreased dayrate for two rigs and two fewer calendar days in the first quarter.
Contract intangible amortization represented a non-cash revenue reduction of $29 million, compared to $50 million in the fourth quarter of 2021.
Operating and maintenance expense was $412 million, compared with $430 million in the prior quarter. The sequential decrease was primarily the result of lower in-service maintenance costs and a $28 million increase in our allowance for certain excess materials and supplies in the fourth quarter that was not repeated in the first quarter, partially offset by increased activity.
General and administrative expense was $42 million, down from $49 million in the fourth quarter of 2021. The decrease was primarily due to reduced research and development costs and legal and professional fees.
Interest expense, net of amounts capitalized, was $102 million, compared with $107 million in the prior quarter. Interest income was $2 million, compared with $4 million, in the previous quarter.
The Effective Tax Rate(2) was (17.6)% in the current quarter and (74.0)% in the prior quarter. The change in the rate was primarily due to the tax impact of the transition to ordinary taxation in Switzerland recorded in the prior quarter and beneficial releases of uncertain tax positions in the current quarter. The Effective Tax Rate excluding discrete items was (22.8)% compared to (44.9)% in the previous quarter.
Cash flows used in operating activities were $1 million, compared to cash provided by operating activities of $185 million in the prior quarter. The first quarter net cash used in operating activities increased sequentially primarily due to reduced cash received from customers combined with increased payments for payroll-related costs.
First quarter 2022 capital expenditures of $106 million, compared to $71 million in the prior quarter, were primarily related to the company’s newbuild drillships under construction.
“The Transocean team continued to provide safe, reliable and efficient operations for our customers during the first quarter, resulting in approximately 98% uptime performance across our global fleet,” said Chief Executive Officer, Jeremy Thigpen. “With this consistently dependable performance, our industry-leading fleet of high-specification, ultra-deepwater and harsh-environment floaters and the continued deployment of new technologies, we are well-positioned to capitalize on the ongoing recovery in the offshore drilling market.”
Thigpen continued: “As hydrocarbon prices remain highly supportive, we remain optimistic about Transocean’s future, especially as governments worldwide recognize that oil and natural gas will, for the foreseeable future, continue to be important energy resources for security and economic growth as the world transitions to a lower carbon future.”
Non-GAAP Financial Measures
We present our operating results in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). We believe certain financial measures, such as Adjusted Contract Drilling Revenues, EBITDA, Adjusted EBITDA and Adjusted Net Income, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under U.S. GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP.
All non-GAAP measure reconciliations to the most comparative U.S. GAAP measures are displayed in quantitative schedules on the company’s website at: http://www.deepwater.com.