EX-99.1 2 a1q2015earningspressrelease.htm EXHIBIT 99.1 1Q2015 Earnings Press Release


 

Transocean Ltd.
Investor Relations and Corporate Communications
 
 
 
 
News Release
Analyst Contacts:
Thad Vayda
 
 
+1 713-232-7551
 
 
 
 
 
 
 
 
 
Diane Vento
 
 
 
 
+1 713-232-8015
 
 
 
 
 
 
 
 
Media Contact:
Pam Easton
 
FOR RELEASE:
May 6, 2015
 
+1 713-232-7647
 
 
 


TRANSOCEAN LTD. REPORTS FIRST QUARTER 2015 RESULTS

Revenues were $2.043 billion, compared with $2.237 billion in the fourth quarter of 2014;

Operating and maintenance expenses were $1.084 billion, down from $1.310 billion in the prior period;

Adjusted net income was $398 million, or $1.10 per diluted share, which excludes net unfavorable items;

Net loss attributable to controlling interest was $483 million, or $1.33 per diluted share, including $881 million of net unfavorable items, versus the comparable fourth quarter net loss of $739 million, or $2.04 per diluted share, including $1.083 billion of net unfavorable items;

The Annual Effective Tax Rate(1) was 25.8 percent, down from 26.5 percent in the prior quarter;
Cash flows from operating activities were $526 million, down sequentially from $566 million;

Fleet revenue efficiency(2) was 95.9 percent, compared to 95.3 percent in the fourth quarter of 2014. Revenue efficiency on ultra-deepwater rigs was 97.2 percent, up from 95.4 percent in the prior quarter;

Fleet utilization(3) was 79 percent, up from 73 percent in the fourth quarter of 2014; and

Contract backlog was $19.9 billion as of the April 16, 2015, Fleet Status Report.

ZUG, SWITZERLAND-May 6, 2015-Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net loss attributable to controlling interest for the three months ended March 31, 2015 of $483 million, or $1.33 per diluted share. First quarter 2015 results included net unfavorable items of $881 million, $2.43 per diluted share, as follows:
$481 million, or $1.34 per diluted share, associated with an impairment of the Deepwater Floater asset group;






As previously announced, $393 million, or $1.07 per diluted share, in impairments of assets classified as held for sale;

$5 million, or $0.01 per diluted share, in costs related to one-time termination benefits; and

$2 million, or $0.01 per diluted share, primarily associated with discontinued operations and other items.
After consideration of these net unfavorable items, first quarter adjusted net income was $398 million, or $1.10 per diluted share.
For the three months ended March 31, 2014, the company reported net income attributable to controlling interest of $456 million, or $1.25 per diluted share, which included net unfavorable items of $64 million, or $0.18 per diluted share. After consideration of these net unfavorable items, adjusted net income was $520 million, or $1.43 per diluted share.
Revenues for the three months ended March 31, 2015 decreased $194 million sequentially to $2.043 billion due primarily to reduced activity associated with stacked and idle rigs, and asset disposals, partly offset by fewer out-of-service days.
Operating and maintenance expenses decreased $226 million sequentially to $1.084 billion. The decrease was mainly associated with the company’s onshore and offshore cost reduction initiatives including the optimization of maintenance and out-of-service costs, asset disposals, and stacking of rigs.
General and administrative expenses decreased $16 million from the prior quarter to $46 million due primarily to the company’s cost reduction initiatives and certain costs incurred in the fourth quarter of 2014 that were not repeated in the first quarter.
Due primarily to the asset impairments and favorable changes in estimates related to prior years’ tax liabilities, Transocean’s first quarter 2015 Effective Tax Rate(4) was (21.6) percent, compared with (1.3) percent in the fourth quarter of 2014. Transocean’s Annual Effective Tax Rate for the first quarter of 2015 was 25.8 percent, compared with the full year 2014 Annual Effective Tax Rate of 18.7 percent. The increase was due partly to the overall level of pre-tax income and to U.K. legislation associated with bareboat charter payments to affiliates. The Annual Effective Tax Rate excludes the effect of the impairments.
Interest expense, net of amounts capitalized, was $116 million in the first quarter of 2015, down from $123 million in the prior quarter. Interest income was $6 million, compared with $8 million in the fourth quarter of 2014. Capitalized interest was $26 million, compared with $24 million in the prior quarter.
Cash flows from operating activities decreased $40 million from the fourth quarter of 2014 to $526 million.
Capital expenditures decreased $117 million sequentially to $201 million due primarily to lower project costs on the existing fleet.
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, 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 9:30 a.m. EDT, 3:30 p.m. CEST, on Thursday, May 7, 2015, to discuss the results. To participate, dial +1 913-312-1376 and refer to confirmation code 3397826 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 12:30 p.m. EDT, 6:30 p.m. CEST, on May 7, 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 3397826. The replay will also be available by 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 65 mobile offshore drilling units consisting of 41 high-specification floaters (ultra-deepwater, deepwater and harsh environment drilling rigs), 14 midwater floaters 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
March 31,
 
 
2,015
 
2,014
Operating revenues
 
 
 
 
 
 
 
 
Contract drilling revenues
 
$
2,000

 
 
$
2,292

 
Other revenues
 
 
43

 
 
 
47

 
 
 
 
2,043

 
 
 
2,339

 
Costs and expenses
 
 
 
 
 
 
 
 
Operating and maintenance
 
 
1,084

 
 
 
1,269

 
Depreciation
 
 
291

 
 
 
273

 
General and administrative
 
 
46

 
 
 
57

 
 
 
 
1,421

 
 
 
1,599

 
Loss on impairment
 
 
(936
)
 
 
 
(65
)
 
Loss on disposal of assets, net
 
 
(7
)
 
 
 
(3
)
 
Operating income (loss)
 
 
(321
)
 
 
 
672

 
 
 
 
 
 
 
 
 
 
Other income (expense), net
 
 
 
 
 
 
 
 
Interest income
 
 
6

 
 
 
10

 
Interest expense, net of amounts capitalized
 
 
(116
)
 
 
 
(126
)
 
Other, net
 
 
47

 
 
 
(2
)
 
 
 
 
(63
)
 
 
 
(118
)
 
Income (loss) from continuing operations before income tax expense
 
 
(384
)
 
 
 
554

 
Income tax expense
 
 
83

 
 
 
80

 
Income (loss) from continuing operations
 
 
(467
)
 
 
 
474

 
Loss from discontinued operations, net of tax
 
 
(2
)
 
 
 
(8
)
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
(469
)
 
 
 
466

 
Net income attributable to noncontrolling interest
 
 
14

 
 
 
10

 
Net income (loss) attributable to controlling interest
 
$
(483
)
 
 
$
456

 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share‑basic
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
(1.32
)
 
 
$
1.27

 
Loss from discontinued operations
 
 
(0.01
)
 
 
 
(0.02
)
 
Earnings (loss) per share
 
$
(1.33
)
 
 
$
1.25

 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share‑diluted
 
 
 
 
 
 
 
 
Earnings (loss) from continuing operations
 
$
(1.32
)
 
 
$
1.27

 
Loss from discontinued operations
 
 
(0.01
)
 
 
 
(0.02
)
 
Earnings (loss) per share
 
$
(1.33
)
 
 
$
1.25

 
 
 
 
 
 
 
 
 
 
Weightedaverage shares outstanding
 
 
 
 
 
 
 
 
Basic
 
 
363

 
 
 
361

 
Diluted
 
 
363

 
 
 
361

 






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

 
 
March 31,
2015
 
December 31,
2014
 
 
 
 
 
Assets
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,682

 
 
$
2,635

 
Accounts receivable, net of allowance for doubtful accounts
of $14 at March 31, 2015 and December 31, 2014
 
 
1,964

 
 
 
2,120

 
Materials and supplies, net of allowance for obsolescence
of $112 and $109 at March 31, 2015 and December 31, 2014, respectively
 
 
807

 
 
 
818

 
Assets held for sale
 
 
23

 
 
 
25

 
Deferred income taxes, net
 
 
157

 
 
 
161

 
Other current assets
 
 
210

 
 
 
242

 
Total current assets
 
 
5,843

 
 
 
6,001

 
 
 
 
 
 
 
 
 
 
Property and equipment
 
 
26,740

 
 
 
28,516

 
Less accumulated depreciation
 
 
(6,174
)
 
 
 
(6,978
)
 
Property and equipment, net
 
 
20,566

 
 
 
21,538

 
Other assets
 
 
696

 
 
 
874

 
Total assets
 
$
27,105

 
 
$
28,413

 
 
 
 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
 
 
Accounts payable
 
$
619

 
 
$
784

 
Accrued income taxes
 
 
217

 
 
 
131

 
Debt due within one year
 
 
1,024

 
 
 
1,033

 
Other current liabilities
 
 
1,313

 
 
 
1,822

 
Total current liabilities
 
 
3,173

 
 
 
3,770

 
 
 
 
 
 
 
 
 
 
Longterm debt
 
 
8,996

 
 
 
9,059

 
Deferred income taxes, net
 
 
152

 
 
 
237

 
Other longterm liabilities
 
 
1,263

 
 
 
1,354

 
Total longterm liabilities
 
 
10,411

 
 
 
10,650

 
 
 
 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
Redeemable noncontrolling interest
 
 
11

 
 
 
11

 
 
 
 
 
 
 
 
 
 
Shares, CHF 15.00 par value, 396,260,487 authorized, 167,617,649 conditionally authorized, 373,830,649 issued at March 31, 2015 and December 31, 2014 and 363,346,369 and 362,279,530 outstanding at March 31, 2015 and December 31, 2014, respectively
 
 
5,183

 
 
 
5,169

 
Additional paidin capital
 
 
5,806

 
 
 
5,797

 
Treasury shares, at cost, 2,863,267 held at March 31, 2015 and December 31, 2014
 
 
(240
)
 
 
 
(240
)
 
Retained earnings
 
 
2,866

 
 
 
3,349

 
Accumulated other comprehensive loss
 
 
(414
)
 
 
 
(404
)
 
Total controlling interest shareholders’ equity
 
 
13,201

 
 
 
13,671

 
Noncontrolling interest
 
 
309

 
 
 
311

 
Total equity
 
 
13,510

 
 
 
13,982

 
Total liabilities and equity
 
$
27,105

 
 
$
28,413

 






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

 
 
Three months ended
March 31,
 
 
2,015
 
2,014
Cash flows from operating activities
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(469
)
 
 
$
466

 
Adjustments to reconcile to net cash provided by operating activities:
 
 
 
 
 
 
 
 
Amortization of drilling contract intangibles
 
 
(4
)
 
 
 
(4
)
 
Depreciation
 
 
291

 
 
 
273

 
Sharebased compensation expense
 
 
19

 
 
 
28

 
Loss on impairment
 
 
936

 
 
 
65

 
Loss on disposal of assets, net
 
 
7

 
 
 
3

 
Loss on disposal of assets in discontinued operations, net
 
 

 
 
 
10

 
Deferred income taxes
 
 
(98
)
 
 
 
(15
)
 
Other, net
 
 
12

 
 
 
12

 
Changes in deferred revenue, net
 
 
(39
)
 
 
 
(26
)
 
Changes in deferred costs, net
 
 
57

 
 
 
38

 
Changes in operating assets and liabilities
 
 
(186
)
 
 
 
(714
)
 
Net cash provided by operating activities
 
 
526

 
 
 
136

 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
Capital expenditures
 
 
(201
)
 
 
 
(1,131
)
 
Proceeds from disposal of assets, net
 
 
7

 
 
 
91

 
Proceeds from disposal of assets in discontinued operations, net
 
 
2

 
 
 
14

 
Other, net
 
 

 
 
 
(12
)
 
Net cash used in investing activities
 
 
(192
)
 
 
 
(1,038
)
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
Repayments of debt
 
 
(63
)
 
 
 
(237
)
 
Proceeds from restricted cash investments
 
 
57

 
 
 
107

 
Deposits to restricted cash investments
 
 

 
 
 
(20
)
 
Distribution of qualifying additional paid-in capital
 
 
(272
)
 
 
 
(202
)
 
Distribution to holders of noncontrolling interest
 
 
(7
)
 
 
 

 
Other, net
 
 
(2
)
 
 
 
(2
)
 
Net cash used in financing activities
 
 
(287
)
 
 
 
(354
)
 
 
 
 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
 
47

 
 
 
(1,256
)
 
Cash and cash equivalents at beginning of period
 
 
2,635

 
 
 
3,243

 
Cash and cash equivalents at end of period
 
$
2,682

 
 
$
1,987

 








TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS

 
Operating Revenues (in millions)
 
Three months ended
 
March 31,
2015
 
 
December 31,
2014
 
 
March 31,
2014
Contract drilling revenues
 
 
 
 
 
 
 
 
 
 
High-Specification Floaters:
 
 
 
 
 
 
 
 
 
 
Ultra-Deepwater Floaters
$
932

 
 
 
997

 
 
 
1,197

Deepwater Floaters
 
219

 
 
 
277

 
 
 
259

Harsh Environment Floaters
 
261

 
 
 
312

 
 
 
286

Total High-Specification Floaters
 
1,412

 
 
 
1,586

 
 
 
1,742

            Midwater Floaters
 
429

 
 
 
428

 
 
 
411

High-Specification Jackups
 
155

 
 
 
149

 
 
 
135

Contract intangible revenue
 
4

 
 
 
4

 
 
 
4

Total contract drilling revenues
 
2,000

 
 
 
2,167

 
 
 
2,292

 
 
 
 
 
 
 
 
 
 
 
Other revenues
 
 
 
 
 
 
 
 
 
 
Client reimbursable revenues
 
42

 
 
 
40

 
 
 
44

Other
 
1

 
 
 
30

 
 
 
3

Total other revenues
 
43

 
 
 
70

 
 
 
47

Total revenues
 
2,043

 
 
 
2,237

 
 
 
2,339

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Daily Revenue (1)
 
Three months ended
 
March 31,
2015
 
 
December 31,
2014
 
 
March 31,
2014
High-Specification Floaters:
 
 
 
 
 
 
 
 
 
 
Ultra-Deepwater Floaters
$
535,100

 
 
$
544,800

 
 
$
547,000

Deepwater Floaters
 
342,100

 
 
 
391,100

 
 
 
392,000

Harsh Environment Floaters
 
531,300

 
 
 
484,000

 
 
 
454,700

Total High-Specification Floaters
 
491,500

 
 
 
498,300

 
 
 
500,900

Midwater Floaters
 
343,300

 
 
 
338,500

 
 
 
334,500

High-Specification Jackups
 
174,400

 
 
 
170,200

 
 
 
162,000

Total
 
398,300

 
 
 
406,400

 
 
 
413,100

 
 
 
 
 
 
 
 
 
 
 
(1) 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
 
March 31,
2015
 
 
December 31,
2014
 
 
March 31,
2014
High-Specification Floaters:
 
 
 
 
 
 
 
 
 
 
Ultra-Deepwater Floaters
68%
 
 
69%
 
 
90%
Deepwater Floaters
85%
 
 
64%
 
 
61%
Harsh Environment Floaters
78%
 
 
100%
 
 
100%
Total High-Specification Floaters
73%
 
 
72%
 
 
84%
Midwater Floaters
85%
 
 
65%
 
 
62%
High-Specification Jackups
99%
 
 
95%
 
 
84%
Total
79%
 
 
73%
 
 
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
 
 
 
 
 
 
 
 
 
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
FY 2014
FY 2013
Ultra-Deepwater
97.2%
95.4%
91.6%
94%
96.4%
94.3%
89.4%
Deepwater
95.9%
96.3%
93.3%
94.5%
100.5%
96.2%
91%
Harsh Environment Floaters
96.8%
96%
94.7%
95.7%
96.3%
95.7%
96.9%
Midwater Floaters
91.4%
93%
92.2%
97%
91.1%
93.3%
93.5%
High Specification Jackups
99.3%
99%
97%
97.3%
94.5%
97%
97.8%
Total
95.9%
95.3%
92.6%
95%
95.7%
94.7%
91.7%
 
 
 
 
 
 
 
 
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
 
 
March 31,
 
 
December 31,
 
 
March 31,
 
 
2,014
 
 
2,014
 
 
2,014
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
$
(384
)
 
 
$
(752
)
 
 
$
554

 
     Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
          Litigation matters
 

 
 
 

 
 
 
3

 
          One-time termination benefits
 
5

 
 
 
1

 
 
 
1

 
          Loss on impairment of goodwill and other assets
 
936

 
 
 
1,210

 
 
 
65

 
          Gain on disposal of assets, net
 
(2
)
 
 
 
(6
)
 
 
 

 
          Loss on retirement of debt
 

 
 
 
8

 
 
 
1

 
Adjusted income from continuing operations before income taxes
 
555

 
 
 
461

 
 
 
624

 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit) from continuing operations
 
83

 
 
 
10

 
 
 
80

 
     Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
          Litigation matters
 

 
 
 

 
 
 
1

 
          Loss on impairment of goodwill and other assets
 
62

 
 
 
48

 
 
 

 
          Gain on disposal of assets, net
 
(1
)
 
 
 
(2
)
 
 
 

 
          Changes in estimates (1)
 
(1
)
 
 
 
66

 
 
 
13

 
Adjusted income tax expense from continuing operations (2)
$
143

 
 
$
122

 
 
$
94

 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate (3)
 
(21.6
)%
 
 
 
(1.3
)%
 
 
 
14.4

%
 
 
 
 
 
 
 
 
 
 
 
 
Annual Effective Tax Rate (4)
 
25.8
 %
 
 
 
26.5
 %
 
 
 
15.1

%
 
 
 
 
 
 
 
 
 
 
 
 
(1) 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.
(2) The three months ended December 31, 2014 includes $36 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.
(3) Effective Tax Rate is income tax expense for continuing operations, divided by income from continuing operations before income taxes.
(4) 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QTD
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
03/31/15
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Net Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to controlling interest, as reported
 
 $(483)
 
 
 
 
 
 
 
 
 
 
 
 
 
Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-time termination benefits
 
 5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on impairment of assets
 
 874
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on disposal of assets, net
 
 (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinued operations
 
 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discrete tax items and other, net
 
 1
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, as adjusted
 
 $398
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Diluted Earnings Per Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share, as reported
 
 $(1.33)
 
 
 
 
 
 
 
 
 
 
 
 
 
Add back (subtract):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-time termination benefits
 
 0.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on impairment of assets
 
 2.41
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on disposal of assets, net
 
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from discontinued operations
 
 0.01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discrete tax items and other, net
 
0
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share, as adjusted
 
 $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)
 
0
 
 (12)
 
 (14)
 
 2
 
0
 
 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
 
0
 
 65
 
 
(Gain) loss on disposal of assets, net
 
 (2)
 
 (4)
 
 2
 
 3
 
 (1)
 
 (1)
 
0
 
 
Loss on retirement of debt
 
 13
 
 8
 
 5
 
0
 
 5
 
 4
 
 1
 
 
Loss on disposal of assets in discontinued operations
 
 10
 
0
 
 10
 
0
 
 10
 
0
 
 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
 
 (0.03)
 
 (0.04)
 
 0.01
 
0
 
 0.01
 
 
One-time termination benefits
 
 0.02
 
0
 
 0.02
 
 0.01
 
 0.01
 
 0.01
 
0
 
 
Loss on impairment of goodwill and other assets
 
 10.53
 
 3.15
 
 7.39
 
 7.22
 
 0.19
 
0
 
 0.19
 
 
(Gain) loss on disposal of assets, net
 
 (0.01)
 
 (0.01)
 
 0.01
 
 0.01
 
0
 
0
 
0





 
 
Loss on retirement of debt
 
 0.04
 
 0.02
 
 0.01
 
0
 
 0.01
 
 0.01
 
0
 
 
Loss on disposal of assets in discontinued operations
 
 0.03
 
0
 
 0.03
 
0
 
 0.03
 
 
 
 0.03
 
 
Loss (income) from discontinued operations
 
 0.03
 
 0.01
 
 0.02
 
0
 
 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