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On May 6, Transocean (NYSE: RIG) had a conference call for shareholders. During the call, CFO Ricardo Rosa stated some superficial facts about the accounting for the lost Deepwater Horizon rig from the BP (NYSE: BP) oil spill:
In the current quarter we expect to receive approximately $560 million in insurance proceeds and the code and accounting gain of approximately $270 million for the total loss of the rig. Of the $560 million in expected insurance proceeds we have already received $481 million including amounts received today.
There has been lots of press about whether Transocean has profited from the loss of the rig. So, I contacted investor relations to request a more detailed explanation of the numbers above.
Given the simple question and importance of the answer, I expected a short breakdown so the public could have accurate facts about this issue. However, at first the Director of Corporate Communications outsourced the question to Financial Dynamics — a financial communications consultancy.
That was funny. When I contact investor relations, I always get directed more internally to someone who can answer my questions. In this case, I ended up on an email string with a bunch of guys who spin for a living and as their website says, “enhance and protect” the “reputations” of their clients.
I finally called the PR agent and repeated my question. His curt attitude would have made you think I was the one who built the rig which exploded in the Gulf. After re-explaining my simple question, he took a few moments pause and said he had nothing to add to what was said during the conference call. I wanted to respond, “That makes sense since you are in PR and not in Transocean accounting,” but I thanked him and moved on.
I touched based with the Director of Corporate Communications at Transocean to make sure the company — not the over paid, outsourced PR firm — definitely wanted to decline comment on what seems something a company would want to explain in order to protect their shareholders from malicious claims which hurt the stock. The Director said he was going with what the PR company said.
The lesson here is corporations are as equally bureaucratic and clumsy as government entities. I imagine no one at Transocean wants to say anything, so they’ve hired a firm they can blame if the communications strategy fails (as did the one BP outsourced to a similar “specialty” PR shop).
On a deeper level, although Transocean operates in publicly traded markets, benefits from permits to do business in the global commons, and is now related to the worst environmental disaster in US history, the company feels it does not need to offer transparency to the people who live in North America. Since there is apparently something to hide, it’s time to ask your Congressperson to drag these schmucks to DC to answer some simple accounting questions.
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