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November 4, 2015 4:20 PM EST


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 4, 2015

 
TRANSOCEAN LTD.
(Exact name of registrant as specified in its charter)
 

Switzerland
 
000-53533
 
98-0599916
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 

10 Chemin de Blandonnet
1214 Vernier, Geneva
Switzerland
 
CH-1214
(Address of principal executive offices)
 
(zip code)
 
Registrant’s telephone number, including area code: +41 (22) 930-9000
 
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02.    Results of Operations and Financial Condition
Our press release dated November 4, 2015, concerning financial results for the third quarter 2015, furnished as Exhibit 99.1 to this report, is incorporated by reference herein.
 
Item 9.01.  Financial Statements and Exhibits
 
(d)  Exhibits.
 
The exhibit to this report furnished pursuant to item 7.01 is as follows:
 

Exhibit No.
 
Description
 
 
 
 
99.1
 
 
Press Release Reporting Third Quarter 2015 Financial Results












SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
TRANSOCEAN LTD.
 
 
 
 
 
 
Date: November 4, 2015
By
/s/ Jill S. Greene
 
 
Jill S. Greene
 
 
Authorized Person
 




Index to Exhibits

Exhibit
Number        Description

99.1        Press Release Reporting Third Quarter 2015 Financial Results






llllllllllllllllllllllllllllllll
Transocean Ltd.
Investor Relations and Corporate Communications

llllllllllllllllllllllllllllllllllllllllllllllllllllll

News Release

Analyst Contacts:    Bradley Alexander
+1 713-232-7515

Diane Vento
+1 713-232-8015

Media Contact:    Pam Easton
+1 713-232-7647


TRANSOCEAN LTD. REPORTS THIRD QUARTER 2015 RESULTS

•
Revenues were $1.61 billion, compared with $1.88 billion in the second quarter of 2015;

•
Operating and maintenance expenses were $880 million. This compares with $197 million in the prior period that included $788 million in net favorable items associated with Macondo-related settlement agreements, insurance recoveries and other items;

•
Adjusted net income was $316 million, $0.87 per diluted share, excluding net favorable items. This compares with $408 million, $1.11 per diluted share, in the second quarter of 2015, excluding net unfavorable items;

•
Net income attributable to controlling interest was $321 million, $0.88 per diluted share, including $5 million of net favorable items. This compares with second quarter net income of $342 million, $0.93 per diluted share, including $66 million of net unfavorable items;

•
The Annual Effective Tax Rate(1) was 7.5 percent, down from 16.9 percent in the prior quarter;

•
Cash flows from operating activities were $648 million, down sequentially from $1.31 billion due primarily to favorable Macondo-related insurance proceeds in the second quarter of 2015;

•
Fleet revenue efficiency(2) was 95.0 percent, compared with 97.2 percent in the second quarter of 2015;

•
Fleet utilization(3) was 70 percent, down from 75 percent in the prior quarter; and

•
Contract backlog was $16.9 billion as of the October 26, 2015, Fleet Status Report.





ZUG, SWITZERLAND-November 4, 2015-Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $321 million, $0.88 per diluted share, for the three months ended September 30, 2015. Third quarter 2015 results included net favorable items of $5 million, $0.01 per diluted share, as follows:
•
$8 million, $0.02 per diluted share, in discrete tax benefits;

•
$7 million, $0.02 per diluted share, in net gains on early debt retirements; and

•
$5 million associated with discontinued operations and asset disposal gains.

These net favorable items were partially offset by:
•
$15 million, $0.03 per diluted share, related to a loss on impairment of GSF Rig 135, which the company intends to scrap; and severance costs.
After consideration of these net favorable items, third quarter 2015 adjusted net income was $316 million, or $0.87 per diluted share.
For the three months ended September 30, 2014, the company reported net loss attributable to controlling interest of $2.22 billion, $6.12 per diluted share, including net unfavorable items of $2.57 billion, $7.08 per diluted share, mainly associated with impairments of goodwill and the Deepwater Floater asset group. After consideration of these net unfavorable items, adjusted net income was $352 million, or $0.96 per diluted share.
Revenues for the three months ended September 30, 2015, decreased $276 million sequentially to $1.61 billion due primarily to lower fleet utilization and a decline in other revenues related to contract termination fees recognized in the second quarter of 2015. To a lesser extent, the decline was impacted by less favorable revenue efficiency.
Operating and maintenance expenses were $880 million during the period. This compares with $985 million in the prior quarter, which excluded $788 million in net favorable Macondo-related items. The decrease of $105 million was due primarily to reduced activity. The third quarter was also favorably impacted by the company’s actions to reduce costs.
General and administrative expenses were $45 million, compared with $44 million in the prior quarter.
Depreciation expense decreased $39 million sequentially to $210 million primarily the result of the impairment of the Midwater Floater asset group in the second quarter of 2015.
Transocean’s third quarter 2015 Effective Tax Rate(4) was 4.9 percent, compared with 10.3 percent in the previous quarter. The decrease was due mainly to jurisdictional and operational structure changes for certain rigs that impacted the company’s deferred tax assets, partially offset by changes in estimates, and the impact of foreign currency fluctuations. Transocean’s Annual Effective Tax Rate for the third quarter of 2015 was 7.5 percent, down from 16.9 percent in the prior quarter. Third quarter income tax expense also included a tax benefit of $18 million, $0.05 per diluted share, to reflect the decrease in the Annual Effective Tax Rate to 18.0 percent for the nine months ended September 30, 2015 from 21.6 percent for the six months ended June 30, 2015.
Interest expense, net of amounts capitalized, decreased $11 million sequentially to $109 million, reflecting, in part, the company’s early debt retirements. Capitalized interest was $36 million, compared




with $29 million in the second quarter of 2015. Interest income was $5 million, compared with $6 million in the prior quarter.
Cash flows from operating activities decreased $663 million sequentially to $648 million due primarily to the favorable Macondo-related insurance proceeds collected in the second quarter of 2015.
Capital expenditures were $940 million, compared with $195 million in the prior quarter. The increase of $745 million was largely associated with the company’s newbuild program and included the final shipyard payment for the Deepwater Thalassa.
“Our continued focus on equipment reliability, uptime, and cost management resulted in another strong quarter for Transocean,” said President and Chief Executive Officer, Jeremy Thigpen. “As we move forward in this challenging market, we will continue to identify opportunities to drive unnecessary cost out of our business, while simultaneously investing in opportunities that will enable us to continue to exceed the performance expectations of our customers.”
Non-GAAP Financial Measures

All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company’s website at www.deepwater.com.
Forward-Looking Statements

The statements described in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements contain words such as “possible,” “intend,” “will,” “if,” “expect” or other similar expressions. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in tax estimates, impairment of goodwill, asset impairments, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, fleet utilization, the future prices of oil and gas, capital markets and other factors, including those and other risks discussed in the company’s most recent Annual Report on Form 10-K for the year ended December 31, 2014, and in the company’s other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.
This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.
Conference Call Information





Transocean will conduct a teleconference starting at 9:00 a.m. EST, 3:00 p.m. CET, on Thursday, November 5, 2015, to discuss the results. To participate, dial +1 913-312-1444 and refer to confirmation code 9465171 approximately 10 minutes prior to the scheduled start time.
The teleconference will be simulcast in a listen-only mode over the Internet and can be accessed at Transocean’s website, www.deepwater.com, by selecting “Investor Relations/Overview.” Supplemental materials that may be referenced during the teleconference will be posted to Transocean’s website and can be found by selecting “Investor Relations/Financial Reports.”
A replay of the conference call will be available after 12:00 p.m. EST, 6:00 p.m. CET, on November 5, 2015. The replay, which will be archived for approximately 30 days, can be accessed by dialing +1 719-457-0820 and referring to the confirmation code 9465171. The replay will also be available on the company’s website.
About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.
Transocean owns or has partial ownership interests in, and operates a fleet of 62 mobile offshore drilling units consisting of 27 ultra-deepwater floaters, seven harsh-environment semisubmersibles, six deepwater floaters, 12 midwater semisubmersibles and 10 high-specification jackups. In addition, the company has seven ultra-deepwater drillships and five high-specification jackups under construction.
For more information about Transocean, please visit: www.deepwater.com.
Notes
(1) Annual Effective Tax Rate is defined as income tax expense from continuing operations excluding various discrete items (such as changes in estimates and tax on items excluded from income before income tax expense), divided by income from continuing operations before income tax expense excluding gains on sales and similar items pursuant to the accounting standards for income taxes. See the accompanying schedule entitled “Supplemental Effective Tax Rate Analysis.”
(2) Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions. See the accompanying schedule entitled “Revenue Efficiency.”
(3) Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage. See the accompanying schedule entitled “Utilization.”
(4) Effective Tax Rate is defined as income tax expense for continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled “Supplemental Effective Tax Rate Analysis.”





TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)



 
 
Three months ended September 30,
 
 
 
Nine months ended
September 30,
 
 
 
 
2015
 
 
2014
 
 
 
2015
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contract drilling revenues
 
$
1,569

 
 
$
2,215
 
 
 
$
5,346
 
 
$
6,785

 
Other revenues
 
 
39

 
 
 
55
 
 
 
 
189
 
 
 
152

 
 
 
 
1,608

 
 
 
2,270
 
 
 
 
5,535
 
 
 
6,937

 
Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and maintenance
 
 
880

 
 
 
1,318
 
 
 
 
2,161
 
 
 
3,800

 
Depreciation
 
 
210

 
 
 
288
 
 
 
 
750
 
 
 
849

 
General and administrative
 
 
45

 
 
 
52
 
 
 
 
135
 
 
 
172

 
 
 
 
1,135

 
 
 
1,658
 
 
 
 
3,046
 
 
 
4,821

 
Loss on impairment
 
 
(13)

 
 
 
(2,768)
 
 
 
 
(1,839)
 
 
 
(2,833)

 
Loss on disposal of assets, net
 
 
(15)

 
 
 
(12)
 
 
 
 
(20)
 
 
 
(14)

 
Operating income (loss)
 
 
445

 
 
 
(2,168)
 
 
 
 
630
 
 
 
(731)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense), net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
5

 
 
 
6
 
 
 
 
17
 
 
 
31

 
Interest expense, net of amounts capitalized
 
 
(109)

 
 
 
(122)
 
 
 
 
(345)
 
 
 
(360)

 
Other, net
 
 
3

 
 
 
6
 
 
 
 
45
 
 
 
12

 
 
 
 
(101)

 
 
 
(110)
 
 
 
 
(283)
 
 
 
(317)

 
Income (loss) from continuing operations before income tax expense
 
 
344

 
 
 
(2,278)
 
 
 
 
347
 
 
 
(1,048)

 
Income tax expense (benefit)
 
 
17

 
 
 
(16)
 
 
 
 
140
 
 
 
136

 
Income (loss) from continuing operations
 
 
327

 
 
 
(2,262)
 
 
 
 
207
 
 
 
(1,184
)
 
Income (loss) from discontinued operations, net of tax
 
 
3

 
 
 
(1)
 
 
 
 
2
 
 
 
(16)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
330

 
 
 
(2,263)
 
 
 
 
209
 
 
 
(1,200)

 
Net income (loss) attributable to noncontrolling interest
 
 
9

 
 
 
(46)
 
 
 
 
29
 
 
 
(26)

 
Net income (loss) attributable to controlling interest
 
$
321

 
 
$
(2,217)
 
 
 
$
180
 
 
$
(1,174)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share‑basic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
0.87

 
 
$
(6.12)
 
 
 
$
0.48
 
 
$
(3.20)

 
Earnings (loss) from discontinued operations
 
 
0.01

 
 
 
-
 
 
 
 
0.01
 
 
 
(0.04)

 
Earnings (loss) per share
 
$
0.88

 
 
$
(6.12)
 
 
 
$
0.49
 
 
$
(3.24)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share‑diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
0.87

 
 
$
(6.12)
 
 
 
$
0.48
 
 
$
(3.20)

 
Earnings (loss) from discontinued operations
 
 
0.01

 
 
 
-
 
 
 
 
0.01
 
 
 
(0.04)

 
Earnings (loss) per share
 
$
0.88

 
 
$
(6.12)
 
 
 
$
0.49
 
 
$
(3.24)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted‑average shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
364

 
 
 
362
 
 
 
 
363
 
 
 
362

 
Diluted
 
 
364

 
 
 
362
 
 
 
 
363
 
 
 
362

 






TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)

 
 
September 30,
2015
 
December 31,
2014
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,234
 
 
$
2,635
 
Accounts receivable, net of allowance for doubtful accounts
of $15 and $14 at September 30, 2015 and December 31, 2014, respectively
 
 
1,482
 
 
 
2,120
 
Materials and supplies, net of allowance for obsolescence
of $139 and $109 at September 30, 2015 and December 31, 2014, respectively
 
 
696
 
 
 
818
 
Assets held for sale
 
 
9
 
 
 
25
 
Deferred income taxes, net
 
 
99
 
 
 
161
 
Other current assets
 
 
386
 
 
 
242
 
Total current assets
 
 
4,906
 
 
 
6,001
 
 
 
 
 
 
 
 
 
 
Property and equipment
 
 
25,612
 
 
 
28,516
 
Less accumulated depreciation
 
 
(5,260
)
 
 
(6,978
)
Property and equipment, net
 
 
20,352
 
 
 
21,538
 
Deferred income taxes, net
 
 
84
 
 
 
0
 
Other assets
 
 
493
 
 
 
874
 
Total assets
 
$
25,835
 
 
$
28,413
 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
Accounts payable
 
$
432
 
 
$
784
 
Accrued income taxes
 
 
82
 
 
 
131
 
Debt due within one year
 
 
123
 
 
 
1,033
 
Other current liabilities
 
 
1,193
 
 
 
1,822
 
Total current liabilities
 
 
1,830
 
 
 
3,770
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
 
8,630
 
 
 
9,059
 
Deferred income taxes, net
 
 
172
 
 
 
237
 
Other long-term liabilities
 
 
1,162
 
 
 
1,354
 
Total long-term liabilities
 
 
9,964
 
 
 
10,650
 
 
 
 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
Redeemable noncontrolling interest
 
 
15
 
 
 
11
 
 
 
 
 
 
 
 
 
 
Shares, CHF 15.00 par value, 396,260,487 authorized, 167,617,649 conditionally authorized, 373,830,649 issued at September 30, 2015 and December 31, 2014 and 363,719,800 and 362,279,530 outstanding at September 30, 2015 and December 31, 2014, respectively
 
 
5,189
 
 
 
5,169
 
Additional paid‑in capital
 
 
5,610
 
 
 
5,797
 
Treasury shares, at cost, 2,863,267 held at September 30, 2015 and December 31, 2014
 
 
(240)
 
 
 
(240)
 
Retained earnings
 
 
3,529
 
 
 
3,349
 
Accumulated other comprehensive loss
 
 
(368)
 
 
 
(404)
 
Total controlling interest shareholders’ equity
 
 
13,720
 
 
 
13,671
 
Noncontrolling interest
 
 
306
 
 
 
311
 
Total equity
 
 
14,026
 
 
 
13,982
 
Total liabilities and equity
 
$
25,835
 
 
$
28,413
 






TRANSOCEAN LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

 
 
Three months ended
September 30,
 
 
 
Nine months ended
September 30,
 
 
 
 
2015
 
 
2014
 
 
 
2015
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
330
 
 
$
(2,263)

 
 
 
$
209

 
 
$
(1,200)

 
Adjustments to reconcile to net cash provided by operating activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of drilling contract intangibles
 
 
(4)
 
 
 
(4)

 
 
 
 
(11)

 
 
 
(12)

 
Depreciation
 
 
210
 
 
 
288

 
 
 
 
750

 
 
 
849

 
Share-based compensation expense
 
 
14
 
 
 
24

 
 
 
 
47

 
 
 
75

 
Loss on impairment
 
 
13
 
 
 
2,768

 
 
 
 
1,839

 
 
 
2,833

 
Loss on disposal of assets, net
 
 
15
 
 
 
12

 
 
 
 
20

 
 
 
14

 
Loss on disposal of assets in discontinued operations, net
 
 
-
 
 
 
-

 
 
 
 
-

 
 
 
10

 
Deferred income taxes
 
 
(14)
 
 
 
(94)

 
 
 
 
(104)

 
 
 
(134)

 
Other, net
 
 
31
 
 
 
10

 
 
 
 
59

 
 
 
27

 
Changes in deferred revenues, net
 
 
(11)
 
 
 
10

 
 
 
 
(118
)
 
 
 
80

 
Changes in deferred costs, net
 
 
26
 
 
 
(52
)
 
 
 
 
142

 
 
 
(32)

 
Changes in operating assets and liabilities
 
 
38
 
 
 
183

 
 
 
 
(348)

 
 
 
(856)

 
Net cash provided by operating activities
 
 
648
 
 
 
882

 
 
 
 
2,485

 
 
 
1,654

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
 
(940)
 
 
 
(365)

 
 
 
 
(1,336)

 
 
 
(1,847)

 
Proceeds from disposal of assets, net
 
 
3
 
 
 
102

 
 
 
 
33

 
 
 
203

 
Proceeds from disposal of assets in discontinued operations, net
 
 
-

 
 
 
(1)

 
 
 
 
3

 
 
 
35

 
Investment in loans receivable
 
 
-
 
 
 
-

 
 
 
 
-

 
 
 
(15)

 
Proceeds from repayment of loans and notes receivable
 
 
-
 
 
 
-

 
 
 
 
15

 
 
 
101

 
Net cash used in investing activities
 
 
(937)
 
 
 
(264)

 
 
 
 
(1,285)

 
 
 
(1,523)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of debt
 
 
(1,237)
 
 
 
(75)

 
 
 
 
(1,306)

 
 
 
(318)

 
Proceeds from restricted cash investments
 
 
53
 
 
 
69

 
 
 
 
110

 
 
 
176

 
Deposits to restricted cash investments
 
 
-
 
 
 
-

 
 
 
 
-

 
 
 
(20)

 
Proceeds from sale of noncontrolling interest
 
 
-
 
 
 
443

 
 
 
 
-

 
 
 
443

 
Distributions of qualifying additional paid‑in capital
 
 
(54)
 
 
 
(272)

 
 
 
 
(381)

 
 
 
(746
)
 
Distributions to holders of noncontrolling interest
 
 
(7)
 
 
 
-

 
 
 
 
(21)

 
 
 
-

 
Other, net
 
 
(1)
 
 
 
(27)

 
 
 
 
(3)

 
 
 
(36)

 
Net cash provided by (used in) financing activities
 
 
(1,246)
 
 
 
138

 
 
 
 
(1,601)

 
 
 
(501)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
 
(1,535)
 
 
 
756

 
 
 
 
(401)

 
 
 
(370)

 
Cash and cash equivalents at beginning of period
 
 
3,769
 
 
 
2,117

 
 
 
 
2,635

 
 
 
3,243

 
Cash and cash equivalents at end of period
 
$
2,234
 
 
$
2,873

 
 
 
$
2,234

 
 
$
2,873

 






TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS

 
Operating Revenues (in millions)
 
Three months ended
 
Nine months ended
September 30,
 
September 30,
2015
 
 
June 30,
2015
 
 
September 30,
2014
 
2015
 
 
2014
Contract drilling revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ultra-Deepwater Floaters
$
768
 
 
$
853
 
 
$
1,135
 
 
$
2,552
 
 
$
3,498
Harsh Environment Floaters
 
211
 
 
 
241
 
 
 
247
 
 
 
713
 
 
 
787
Deepwater Floaters
 
135
 
 
 
162
 
 
 
233
 
 
 
517
 
 
 
744
Midwater Floaters
 
327
 
 
 
381
 
 
 
442
 
 
 
1,137
 
 
 
1,295
High-Specification Jackups
 
124
 
 
 
136
 
 
 
154
 
 
 
416
 
 
 
449
Contract intangible revenue
 
4
 
 
 
4
 
 
 
4
 
 
 
11
 
 
 
12
Total contract drilling revenues
 
1,569
 
 
 
1,777
 
 
 
2,215
 
 
 
5,346
 
 
 
6,785
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Client reimbursable revenues
 
34
 
 
 
34
 
 
 
46
 
 
 
109
 
 
 
133
Integrated services and other
 
5
 
 
 
73
 
 
 
9
 
 
 
80
 
 
 
19
Total other revenues
 
39
 
 
 
107
 
 
 
55
 
 
 
189
 
 
 
152
Total revenues
 
1,608
 
 
 
1,884
 
 
 
2,270
 
 
 
5,535
 
 
 
6,937
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Daily Revenue (1)
 
Three months ended
 
 
Nine months ended
September 30,
 
September 30,
2015
 
 
June 30, 2015
 
 
September 30,
2014
 
 
2015
 
 
2014
Ultra-Deepwater Floaters
$
475,800
 
 
$
531,400
 
 
$
524,100
 
 
$
514,300
 
 
$
536,600
Harsh Environment Floaters
 
493,400
 
 
 
513,300
 
 
 
493,800
 
 
 
513,600
 
 
 
465,300
Deepwater Floaters
 
368,600
 
 
 
364,000
 
 
 
357,700
 
 
 
355,600
 
 
 
373,700
Midwater Floaters
 
350,000
 
 
 
338,800
 
 
 
353,000
 
 
 
343,700
 
 
 
339,200
High-Specification Jackups
 
172,700
 
 
 
172,100
 
 
 
167,800
 
 
 
173,100
 
 
 
167,900
Total
$
385,300
 
 
 
399,700
 
 
$
403,100
 
 
$
394,800
 
 
$
405,800
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average daily revenue is defined as contract drilling revenues earned per operating day. An operating day is defined as a calendar day during which a rig is contracted to earn a dayrate during the firm contract period after commencement of operations.


























TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS (continued)

 
Utilization (2)
 
Three months ended
 
Nine months ended
September 30,
 
September 30,
2015
 
 
June 30,
2015
 
 
September 30,
2014
 
2015
 
2014
Ultra-Deepwater Floaters
65%
 
 
65%
 
 
84%
 
 
66%
 
 
87%
Harsh Environment Floaters
66%
 
 
74%
 
 
77%
 
 
73%
 
 
89%
Deepwater Floaters
67%
 
 
71%
 
 
59%
 
 
75%
 
 
61%
Midwater Floaters
78%
 
 
89%
 
 
65%
 
 
84%
 
 
66%
High-Specification Jackups
78%
 
 
87%
 
 
99%
 
 
88%
 
 
93%
Total Drilling Fleet
70%
 
 
75%
 
 
76%
 
 
75%
 
 
78%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) Rig utilization is defined as the total number of operating days divided by the total number of available rig calendar days in the measurement period, expressed as a percentage.


Revenue Efficiency(3)
Trailing Five Quarters and Historical Data
 
 
 
 
 
 
 
3Q 2015
2Q 2015
1Q 2015
4Q 2014
3Q 2014
FY 2014
FY 2013
Ultra-Deepwater Floaters
91.5%
97.0%
97.2%
95.4%
91.6%
94.3%
89.4%
Harsh Environment Floaters
98.6%
98.4%
96.8%
96.0%
94.7%
95.7%
96.9%
Deepwater Floaters
98.9%
100.3%
95.9%
96.3%
93.3%
96.2%
91.0%
Midwater Floaters
98.2%
95.3%
91.4%
93.0%
92.2%
93.3%
93.5%
High-Specification Jackups
99.3%
98.6%
99.3%
99.0%
97.0%
97.0%
97.8%
Total
95.0%
97.2%
95.9%
95.3%
92.6%
94.7%
91.7%
 
 
 
 
 
 
 
 
(3) Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculation for the measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions.







Transocean Ltd. and Subsidiaries
 
 
Supplemental Effective Tax Rate Analysis
 
 
(In US$ millions, except tax rates )
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
 
Nine months ended
 
 
 
September 30,
 
 
June 30,
 
 
September 30,
 
 
September 30,
 
 
September 30,
 
 
2015
 
 
2015
 
 
2014
 
 
2015
 
 
2014
 
Income from continuing operations before income taxes
$
344

 
 
$
387

 
 
$
(2,278)
 
 
 
$
347
 
 
 
$
(1,048)
 
 
     Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
          Litigation matters
 
-

 
 
 
(788)

 
 
 
(21)
 
 
 
 
(788)
 
 
 
 
(18)
 
 
          One-time termination benefits
 
3

 
 
 
12

 
 
 
4
 
 
 
 
20
 
 
 
 
9
 
 
Loss on impairment of goodwill and other assets
 
13

 
 
 
890

 
 
 
2,768
 
 
 
 
1,839
 
 
 
 
2,833
 
 
          Loss (gain) on disposal of other assets, net
 
(1)

 
 
 
(3)

 
 
 
3
 
 
 
 
(6)
 
 
 
 
2
 
 
          Loss (gain) on retirement of debt
 
(7)

 
 
 
-

 
 
 
-
 
 
 
 
(7)
 
 
 
 
5
 
 
Adjusted income from continuing operations before income taxes
 
352

 
 
 
498

 
 
 
476
 
 
 
 
1,405
 
 
 
 
1,783
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense from continuing operations
 
17

 
 
 
40

 
 
 
(16)
 
 
 
 
140
 
 
 
 
136
 
 
     Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
          Litigation matters
 
-

 
 
 
(53)

 
 
 
(7)
 
 
 
 
(53)
 
 
 
 
(6
)
 
          One-time termination benefits
 
1

 
 
 
1

 
 
 
1
 
 
 
 
2
 
 
 
 
 
 
Loss on impairment of goodwill and other assets
 
-

 
 
 
93

 
 
 
95
 
 
 
 
155
 
 
 
 
95
 
 
          Loss on disposal of other assets, net
 
-

 
 
 
2

 
 
 
-
 
 
 
 
1
 
 
 
 
-
 
 
          Changes in estimates (1)
 
9

 
 
 
1

 
 
 
45
 
 
 
 
9
 
 
 
 
72
 
 
Adjusted income tax expense from continuing operations (2)
$
27

 
 
$
84

 
 
$
118
 
 
 
$
254
 
 
 
$
298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate (3)
 
4.9
%
 
 
 
10.3
%
 
 
 
0.7
%
 
 
 
40.3
%
 
 
 
13
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Effective Tax Rate (4)
 
7.5
%
 
 
 
16.9
%
 
 
 
24.8
%
 
 
 
18
%
 
 
 
16.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our estimates change as we file tax returns, settle disputes with tax authorities or become aware of other events and include changes in (a) deferred taxes, (b) valuation of allowances on deferred taxes and (c) other tax liabilities.
 
The three months and nine months ended September 30, 2015 includes $(18) million of additional tax expense (benefit) reflecting the catch-up effect of an increase (decrease) in the annual effective tax rate from the previous quarter estimate.
 
Effective Tax Rate is income tax expense for continuing operations, divided by income from continuing operations before income taxes.
 
Annual Effective Tax Rate is income tax expense for continuing operations, excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes) divided by income from continuing operations before income tax expense excluding gains and losses on sales and similar items pursuant to the accounting standards for income taxes and estimating the annual effective tax rate.
 







Transocean Ltd. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Adjusted Net Income and Adjusted Diluted Earnings Per Share
(in US$ millions, except per share data)
 
 
 
 
 
 
 
 
 
YTD
QTD
YTD
QTD
QTD
 
 
 
09/30/15
09/30/15
06/30/15
06/30/15
03/31/15
 
 
Adjusted Net Income
 
 
 
 
 
 
 
Net income (loss) attributable to controlling interest, as reported
$180
$321
$(141)
$342
$(483)
 
 
Add back (subtract):
 
 
 
 
 
 
 
Litigation matters
(735)
-
(735)
(735)
0
 
 
One-time termination benefits
18
2
16
11
5
 
 
Loss on impairment of assets
1,684
13
1,671
797
874
 
 
Gain on disposal of assets, net
(7)
(1)
(6)
(5)
(1)
 
 
Gain on retirement of debt
(7)
(7)
-
-
-
 
 
Gain on disposal of assets in discontinued operations
(1)
(1)
-
-
-
 
 
(Income) loss from discontinued operations
(2)
(3)
1
(1)
2
 
 
Discrete tax items and other, net
(8)
(8)
-
(1)
1
 
 
Net income, as adjusted
$1,122
$316
$806
$408
$398
 
 
 
 
 
 
 
 
 
 
Adjusted Diluted Earnings Per Share:
 
 
 
 
 
 
 
Diluted earnings (loss) per share, as reported
$0.49
$0.88
$(0.39)
$0.93
$(1.33)
 
 
Add back (subtract):
 
 
 
 
 
 
 
Litigation matters
(2.02)
-
(2.02)
(2.02)
-
 
 
One-time termination benefits
0.04
-
0.04
0.03
0.01
 
 
Loss on impairment of assets
4.61
0.03
4.60
2.18
2.41
 
 
Gain on disposal of assets, net
(0.02)
-
(0.02)
(0.01)
-
 
 
Gain on retirement of debt
(0.02)
(0.02)
-
-
-
 
 
Gain on disposal of assets in discontinued operations
-
-
-
-
-
 
 
(Income) loss from discontinued operations
-
-
-
-
0.01
 
 
Discrete tax items and other, net
(0.02)
(0.02)
-
-
-
 
 
Diluted earnings per share, as adjusted
$3.06
$0.87
$2.21
$1.11
$1.10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
YTD
QTD
YTD
QTD
YTD
QTD
QTD
 
12/31/14
12/31/14
09/30/14
09/30/14
06/30/14
06/30/14
03/31/14
Adjusted Net Income
 
 
 
 
 
 
 
Net income (loss) attributable to controlling interest, as reported
$(1,913)
$(739)
$(1,174)
$(2,217)
$1,043
$587
$456
Add back (subtract):
 
 
 
 
 
 
 
Litigation matters
(12)
-
(12)
(14)
2
-
2
One-time termination benefits
9
1
8
3
5
4
1
Loss on impairment of goodwill and other assets
3,826
1,140
2,686
2,621
65
-
65
(Gain) loss on disposal of assets, net
(2)
(4)
2
3
(1)
(1)
-




Loss on retirement of debt
13
8
5
0
5
4
1
Loss on disposal of assets in discontinued operations
10
-
10
-
10
-
10
Loss (income) from discontinued operations
10
4
6
1
5
7
(2)
Discrete tax items and other, net
(138)
(66)
(72)
(45)
(27)
(14)
(13)
Net income, as adjusted
$1,803
$344
$1,459
$352
$1,107
$587
$520
 
 
 
 
 
 
 
 
Adjusted Diluted Earnings Per Share:
 
 
 
 
 
 
 
Diluted earnings (loss) per share, as reported
$(5.29)
$(2.04)
$(3.24)
$(6.12)
$2.86
$1.61
$1.25
Add back (subtract):
 
 
 
 
 
 
 
Litigation matters
(0.03)
-
(0.03)
(0.04)
0.01
-
0.01
One-time termination benefits
0.02
-
0.02
0.01
0.01
0.01
-
Loss on impairment of goodwill and other assets
10.53
3.15
7.39
7.22
0.19
-
0.19
(Gain) loss on disposal of assets, net
(0.01)
(0.01)
0.01
0.01
-
-
-
Loss on retirement of debt
0.04
0.02
0.01
-
0.01
0.01
-
Loss on disposal of assets in discontinued operations
0.03
-
0.03
-
0.03
-
0.03
Loss (income) from discontinued operations
0.03
0.01
0.02
-
0.01
0.02
(0.01)
Discrete tax items and other, net
(0.38)
(0.18)
(0.21)
(0.12)
(0.08)
(0.04)
(0.04)
Diluted earnings per share, as adjusted
$4.94
$0.95
$4.00
$0.96
$3.04
$1.61
$1.43
 
 
 
 
 
 
 
 







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