Transocean Ltd. (RIG) Cash Flow Statement

The persistent gap between net income and operating cash flow suggests large swings in reported earnings are driven by impairments, tax items, or other accounting charges rather than underlying operations. Operating cash flow has remained positive in every quarter shown, which points to a drilling asset base that continues to generate cash even when accounting profit collapses. Investors should monitor whether this cash resilience persists, since the ratio distortions make net income a poor standalone guide to earnings quality.

Free cash flow has been positive in nine of ten quarters, but the margin band is wide enough to suggest sensitivity to contract timing and day-rate cycles. The 2025Q4 peak was materially lifted by an $81.0M working capital inflow, so the underlying run-rate is likely lower than that quarter suggests. Current margins warrant further investigation to determine how much of the recent recovery is durable versus timing-driven.

Capex intensity has declined from the 2024 period where it reached 9.8% of revenue, suggesting management has prioritized spending restraint. Depreciation and amortization of roughly $143.0M to $190.0M per quarter consistently exceeds capex, which may indicate the fleet is being run down unless upgrade spending resumes. This gap warrants further investigation into whether current capital spending is sufficient to sustain the asset base.

The magnitude of these swings relative to free cash flow suggests reported operating cash is sensitive to receivable collection timing and contract milestone billing. The 2026Q1 outflow largely offset operating cash generation, which reinforces that quarterly cash figures may overstate or understate the underlying trend. Investors may find trailing multi-quarter averages more representative than any single period.

Summing the period suggests that reported losses reflect substantial non-cash charges rather than cash erosion, a pattern common in capital-intensive drilling companies after asset writedowns. This divergence suggests equity holders have borne accounting losses without a commensurate loss of cash generation. The gap warrants further investigation into the nature and recurrence of the charges that drive the net income line.