Transocean Ltd. Reports Third Quarter 2012 Results

Transocean Ltd. Reports Third Quarter 2012 Results 
ZUG, SWITZERLAND -- (Marketwire) -- 11/04/12 --  Transocean Ltd.
(NYSE: RIG) (SIX: RIGN) 


 
--  Third quarter 2012 revenues were $2.440 billion compared with $2.352
    billion in the second quarter 2012;
--  Operating and maintenance expenses for the third quarter were $1.338
    billion, compared with $1.381 billion for the second quarter 2012.
    Second quarter operating and maintenance expenses exclude $750 million
    for estimated loss contingencies associated with the Macondo well
    incident;
--  Third quarter 2012 net loss attributable to controlling interest was
    $381 million, which included $880 million of net unfavorable items
    primarily associated with the impairment of assets included in
    discontinued operations. This compares with the second quarter 2012
    net loss attributable to controlling interest of $304 million, which
    included $621 million of net unfavorable items;
--  Third quarter Annual Effective Tax Rate(3) from continuing operations
    was 15.2 percent compared with 28.2 percent in the second quarter
    2012;
--  Third quarter net loss attributable to controlling interest was $1.06
    per diluted share. After adjusting for net unfavorable items, adjusted
    earnings from continuing operations were $499 million, or $1.37 per
    diluted share;
--  Cash flows from operating activities were $786 million in the third
    quarter, compared with $459 million in the second quarter 2012;
--  Revenue efficiency(1) from continuing operations was 94.3 percent in
    the third quarter, compared with 92.1 percent in the second quarter
    2012. Third quarter 2012 Ultra-Deepwater revenue efficiency was 95.8
    percent, compared with 92.2 percent in the prior quarter. Fleet
    utilization(2) from continuing operations was 77 percent in the third
    quarter, compared with 72 percent in the second quarter 2012; and
--  New contracts associated with continuing operations totaling $10.2
    billion were secured in the Fleet Status Report periods July 18, 2012
    through October 17, 2012. Backlog from continuing operations was $29.7
    billion at October 17th, a net increase of $8.3 billion.

  
Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net loss 
attributable to controlling interest of $381 million, or $1.06 per
diluted share, for the three months ended September 30, 2012. Third
quarter 2012 results included net unfavorable items of $880 million,
or $2.43 per diluted share. The results compare with a net loss
attributable to controlling interest of $32 million, or $0.10 per
diluted share, for the three months ended September 30, 2011. Third
quarter 2011 results included net unfavorable items of $68 million,
or $0.21 per diluted share, primarily associated with the company's
acquisition of Aker Drilling. 
Net unfavorable items, after tax, impacting the third quarter of 2012
included the following: 


 
--  $878 million, or $2.43 per diluted share, loss on impairment of assets
    included in discontinued operations primarily associated with exiting
    the standard jackup market;
--  $48 million, or $0.13 per diluted share, net gain on the sale of two
    floaters, Discoverer 534 and Jim Cunningham;
--  $30 million, or $0.08 per diluted share, loss from discontinued
    operations. This includes $24 million, or $0.06 per diluted share
    associated with the standard jackups; the remainder is primarily
    associated with Challenger Minerals (North Sea) Limited; and
--  $20 million, or $0.05 per diluted share, loss due to discrete taxes
    and other items.

  
After adjusting for these net unfavorable items, adjusted earnings from
continuing operations were $499 million, or $1.37 per diluted share.
A reconciliation of the non-GAAP adjusted net income and diluted
earnings per share is attached. 
Operations Quarterly Review 
Revenues from continuing operations for the three months ended
September 30, 2012 were $2.440 billion, compared with revenues of
$2.352 billion during the three months ended June 30, 2012. Contract
drilling revenues increased $136 million mainly due to higher revenue
efficiency(1) primarily on Ultra-Deepwater floaters, and lower out of
service time. Revenue efficiency(1) from continuing operations was
94.3 percent for the third quarter, compared with 92.1 percent in the
second quarter 2012. Other revenues decreased $48 million to $130
million for the third quarter 2012, compared with $178 million in the
prior quarter, primarily due to decreased levels of low-margin
drilling management services activity. 
Operating and maintenance expenses from continuing operations
decreased $43 million to $1.338 billion for the third quarter of
2012. This compares with $1.381 billion for the second quarter of
2012, excluding $750 million for estimated loss contingencies
associated with the Macondo well incident. Contract drilling expenses
increased by $17 million due to annual pay raises, activity
increases, professional fees, and various other items, partly offset
by lower costs in the third quarter associated with rigs undergoing
surveys, contract preparation or other shipyard projects. The delayed
commencement of shipyard projects favorably impacted contract
drilling expenses in the third quarter. Costs associated with the
company's drilling management services reporting unit decreased $60
million mostly due to reduced activity. 
General and administrative expenses were $69 million for the third
quarter 2012, compared with $79 million in the previous quarter. The
decrease was primarily due to transaction costs in the second quarter
associated with the Quantum exchange of its 50 percent interest in
Transocean Pacific Drilling Inc. for Transocean Ltd.'s shares. 
Income Taxes 
Transocean's third quarter Effective Tax Rate(4) from continuing
operations was 16.5 percent, compared with 5.0 percent in the second
quarter 2012. The increase in the Effective Tax Rate(4) was due to
changes in estimates primarily for settlements of prior years' tax
liabilities. Transocean's Annual Effective Tax Rate(3) from
continuing operations for the third quarter 2012 was 15.2 percent.
This compares with 28.2 percent for the prior quarter. The decrease
was primarily due to changes in the blend of income that is taxed
based on gross revenues versus pre-tax income and rig movements
between taxing jurisdictions, among other things. Third quarter 2012
income tax expense included a favorable adjustment of $31 million, or
$0.09 per diluted share, required to reflect a decrease in the Annual
Effective Tax Rate(3) to 20.5 percent for the nine months ended
September 30, 2012, from 24.6 percent for the first half of 2012. 
Other Items 
For the third quarter, interest expense, net of amounts capitalized,
was $180 million, compared with $183 million in the second quarter
2012. Capitalized interest for the third quarter 2012 was $12
million, unchanged from the prior quarter. Interest income increased
to $15 million in the third quarter, compared with $13 million in the
second quarter 2012. 
Cash flows from operating activities were $786 million for the third
quarter, compared with $459 million for the second quarter 2012.
Capital expenditures from total operations were $225 million for the
third quarter, compared with $236 million in the second quarter of
2012.  
Forward-Looking Statements 
Statements included in this news release, including those regarding
estimates of Transocean's goodwill or long-lived asset impairments
and the estima
ted loss contingencies associated with the Macondo well
incident, are forward-looking statements that involve certain
assumptions. These statements are based on currently available
competitive, financial, and economic data along with our current
operating plans and involve risks and uncertainties including, but
not limited to, market conditions, Transocean's results of
operations, the effect and results of litigation, assessments and
contingencies, and other factors detailed in "Risk Factors" and
elsewhere in Transocean's filings with the Securities and Exchange
Commission. 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 outcomes may
vary materially from those forecasted or expected. Transocean
disclaims any intention or obligation to update publicly or revise
such statements, whether as a result of new information, future
events or otherwise. 
Conference Call Information 
Transocean will conduct a teleconference call at 10:00 a.m. EST, 4:00
p.m. CET, on Monday, November 5, 2012. To participate, dial +1
719-325-4828 and refer to confirmation code 2448847 approximately
five to 10 minutes prior to the scheduled start time of the call. 
In addition, the conference call will be simultaneously broadcast
over the Internet in a listen-only mode and can be accessed by
logging onto Transocean's website at www.deepwater.com and selecting
"Investor Relations." A file containing four charts that may be
discussed during the conference call, titled "3Q12 Charts," has been
posted to Transocean's website and can also be found by selecting
"Investor Relations/Quarterly Toolkit." The conference call may also
be accessed via the Internet at www.CompanyBoardroom.com by typing in
Transocean's New York Stock Exchange trading symbol, "RIG."  
A telephonic replay of the conference call should be available after
1:00 p.m. EST, 7:00 p.m. CET, on November 5, 2012, and can be
accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring
to the confirmation code 2448847. Also, a replay will be available
through the Internet and can be accessed by visiting either of the
above-referenced internet addresses. Both replay options will be
available for approximately 30 days. 
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 115 mobile offshore drilling units consisting of 48
High-Specification Floaters (Ultra-Deepwater, Deepwater and
Harsh-Environment drilling rigs), 25 Midwater Floaters, nine
High-Specification Jackups, 32 Standard Jackups and one swamp barge.
Included in the 115 drilling units, the company has 32 Standard
Jackups and one swamp barge classified as discontinued operations. In
addition, we have six Ultra-Deepwater Drillships and three
High-Specification Jackups under construction. 
For more information about Transocean, please visit the website at
www.deepwater.com. 
Notes 
(1) Revenue efficiency is defined as actual revenue divided by the
highest amount of total revenue which could have been earned during
the relevant period(s). See the accompanying schedule entitled
"Revenue Efficiency." 
(2) Utilization is defined as the total actual number of revenue
earning days in the period as a percentage of the total number of
calendar days in the period for all drilling rigs in the company's
fleet. See the accompanying schedule entitled "Utilization." 
(3) 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." 
(4) Effective Tax Rate is defined as income tax expense from
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     Nine months ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Operating revenues                                                          
  Contract drilling revenues     $   2,310  $   1,827  $   6,498  $   5,396 
  Other revenues                       130        164        420        576 
                                 ---------  ---------  ---------  --------- 
                                     2,440      1,991      6,918      5,972 
                                 ---------  ---------  ---------  --------- 
Costs and expenses                                                          
  Operating and maintenance          1,338      1,344      4,731      3,915 
  Depreciation and amortization        280        281        846        821 
  General and administrative            69         67        217        200 
                                 ---------  ---------  ---------  --------- 
                                     1,687      1,692      5,794      4,936 
                                 ---------  ---------  ---------  --------- 
Loss on impairment                       -          -       (210)         - 
Gain (loss) on disposal of                                                  
 assets, net                            50         (1)        40         (1)
                                 ---------  ---------  ---------  --------- 
Operating income                       803        298        954      1,035 
                                 ---------  ---------  ---------  --------- 
                                                                            
Other income (expense), net                                                 
  Interest income                       15          7         43         27 
  Interest expense, net of                                                  
   amounts capitalized                (180)      (151)    
  (543)      (443)
  Other, net                            (8)       (77)       (32)       (79)
                                 ---------  ---------  ---------  --------- 
                                      (173)      (221)      (532)      (495)
                                 ---------  ---------  ---------  --------- 
Income from continuing                                                      
 operations before income tax                                               
 expense                               630         77        422        540 
Income tax expense                     104         93         96        211 
                                 ---------  ---------  ---------  --------- 
Income (loss) from continuing                                               
 operations                            526        (16)       326        329 
Income (loss) from discontinued                                             
 operations, net of tax               (909)        (5)      (994)       116 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income (loss)                     (383)       (21)      (668)       445 
Net income (loss) attributable                                              
 to noncontrolling interest             (2)        11          7         34 
                                 ---------  ---------  ---------  --------- 
Net income (loss) attributable                                              
 to controlling interest         $    (381) $     (32) $    (675) $     411 
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share-basic                                             
  Earnings (loss) from                                                      
   continuing operations         $    1.47  $   (0.08) $    0.90  $    0.92 
  Earnings (loss) from                                                      
   discontinued operations           (2.53)     (0.02)     (2.80)      0.36 
                                 ---------  ---------  ---------  --------- 
  Earnings (loss) per share      $   (1.06) $   (0.10) $   (1.90) $    1.28 
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share-                                                  
 diluted                                                                    
  Earnings (loss) from                                                      
   continuing operations         $    1.47  $   (0.08) $    0.90  $    0.92 
  Earnings (loss) from                                                      
   discontinued operations           (2.53)     (0.02)     (2.80)      0.36 
                                 ---------  ---------  ---------  --------- 
  Earnings (loss) per share      $   (1.06) $   (0.10) $   (1.90) $    1.28 
                                 =========  =========  =========  ========= 
                                                                            
Weighted-average shares                                                     
 outstanding                                                                
  Basic                                359        320        354        320 
  Diluted                              359        320        354        320 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                                                                            
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                                                            
                      (In millions, except share data)                      
                                 (Unaudited)                                
                                                                            
                                               September 30,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
Assets                                                                      
Cash and cash equivalents                      $       6,001  $       4,017 
Accounts receivable, net of allowance for                                   
 doubtful accounts of $28 at September 30,                                  
 2012 and December 31, 2011                            2,163          2,176 
Materials and supplies, net of allowance for                                
 obsolescence of $71 and $59 at September 30,                               
 2012 and December 31, 2011, respectively                597            529 
Deferred income taxes, net                               169            142 
Assets held for sale                                     930             26 
Other current assets                                     444            646 
                                               -------------  ------------- 
    Total current assets                              10,304          7,536 
                                               -------------  ------------- 
                                                                            
Property and equipment                                26,567         24,833 
Property and equipment of consolidated                                      
 variable interest entities                              817          2,252 
Less accumulated depreciation                          6,925          6,297 
                                               -------------  ------------- 
  Property and equipment, net                         20,459         20,788 
                                               -------------  ------------- 
Goodwill                                               2,987          3,217 
Other assets                                           1,562          3,491 
                                               -------------  ------------- 
    Total assets                               $      35,312  $      35,032 
                                               =============  ============= 
                                                                            
Liabilities and equity                                                      
Accounts payable                               $         876  $         880 
Accrued income taxes                                     257             86 
Debt due within one year                               2,701          1,942 
Debt of consolidated variable interest                                      
 entities due within one year                             28            245 
Other current liabilities                              2,839          2,375 
                                               -------------  ------------- 
    Total current liabilities                          6,701          5,528 
                                               -------------  ------------- 
                                                                            
Long-term debt                                        11,211         10,756 
Long-term debt of consolidated variable                                     
 interest entities                                       177            593 
Deferred income taxes, net                               450            514 
Other long-term liabilities                            1,517          1,898 
                                               -------------  ------------- 
    Total long-term liabilities                       13,355
         13,761 
                                               -------------  ------------- 
                                                                            
Commitments and contingencies                                               
Redeemable noncontrolling interest                         -            116 
                                                                            
Shares, CHF 15.00 par value, 402,282,355                                    
 authorized, 167,617,649 conditionally                                      
 authorized, and 373,830,649 and 365,135,298                                
 issued at September 30, 2012 and December 31,                              
 2011, respectively; 359,418,883 and                                        
 349,805,793 outstanding at September 30, 2012                              
 and December 31, 2011, respectively                   5,129          4,982 
Additional paid-in capital                             7,496          7,211 
Treasury shares, at cost, 2,863,267 held at                                 
 September 30, 2012 and December 31, 2011               (240)          (240)
Retained earnings                                      3,399          4,180 
Accumulated other comprehensive loss                    (512)          (496)
                                               -------------  ------------- 
  Total controlling interest shareholders'                                  
   equity                                             15,272         15,637 
                                               -------------  ------------- 
  Noncontrolling interest                                (16)           (10)
                                               -------------  ------------- 
    Total equity                                      15,256         15,627 
                                               -------------  ------------- 
    Total liabilities and equity               $      35,312  $      35,032 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                                                                            
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS              
                                                                            
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                                  Three months ended     Nine months ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from operating                                                   
 activities                                                                 
  Net income (loss)              $    (383) $     (21) $    (668) $     445 
  Adjustments to reconcile to                                               
   net cash provided by                                                     
   operating activities                                                     
    Amortization of drilling                                                
     contract intangibles               (9)       (12)       (32)       (32)
    Depreciation and                                                        
     amortization                      280        281        846        821 
    Depreciation and                                                        
     amortization of assets in                                              
     discontinued operations            48         80        182        258 
    Share-based compensation                                                
     expense                            24         20         72         74 
    Loss on impairment                   -          -        210          - 
    Loss on impairment of assets                                            
     in discontinued operations        878          7        913         32 
    (Gain) loss on disposal of                                              
     assets, net                       (50)         1        (40)         1 
    (Gain) loss on disposal of                                              
     assets in discontinued                                                 
     operations, net                     1          1        (70)      (175)
    Amortization of debt issue                                              
     costs, discounts and                                                   
     premiums, net                      17         33         52         95 
    Deferred income taxes              (61)        (6)      (104)        30 
    Other, net                          12         79         47         85 
    Changes in deferred revenue,                                            
     net                               (64)       (36)       (69)         7 
    Changes in deferred                                                     
     expenses, net                      51         18         30        (66)
    Changes in operating assets                                             
     and liabilities                    42         47        416       (353)
                                 ---------  ---------  ---------  --------- 
Net cash provided by operating                                              
 activities                            786        492      1,785      1,222 
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from investing                                                   
 activities                                                                 
  Capital expenditures                (201)      (124)      (646)      (633)
  Capital expenditures for                                                  
   discontinued operations             (24)       (13)       (75)       (37)
  Investment in marketable                                                  
   security                              -       (199)         -       (199)
  Proceeds from disposal of                                                 
   assets, net                         178          4        189         12 
  Proceeds from disposal of                                                 
   assets in discontinued                                                   
   operations, net                       5         84        196        353 
  Payment for settlement of                                                 
   forward exchange contract             -        (78)         -        (78)
  Other, net                             7          6         32        (27)
                                 ---------  ---------  ---------  --------- 
Net cash used in investing                                                  
 activities                            (35)      (320)      (304)      (609)
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from financing                                                   
 activities                                                                 
  Changes in short-term                                       
              
   borrowings, net                       -          2       (260)        58 
  Proceeds from debt                 1,493          -      1,493          5 
  Repayments of debt                  (264)       (23)      (584)      (272)
  Proceeds from restricted cash                                             
   investments                         106          -        298          - 
  Deposits to restricted cash                                               
   investments                         (42)         -       (158)         - 
  Distribution of qualifying                                                
   additional paid-in capital            -       (254)      (278)      (508)
  Other, net                            (7)         -         (8)        (4)
                                 ---------  ---------  ---------  --------- 
Net cash provided by (used in)                                              
 financing activities                1,286       (275)       503       (721)
                                 ---------  ---------  ---------  --------- 
                                                                            
Net increase (decrease) in cash                                             
 and cash equivalents                2,037       (103)     1,984       (108)
Cash and cash equivalents at                                                
 beginning of period                 3,964      3,349      4,017      3,354 
                                 ---------  ---------  ---------  --------- 
Cash and cash equivalents at end                                            
 of period                       $   6,001  $   3,246  $   6,001  $   3,246 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                         FLEET OPERATING STATISTICS                         
                                                                            
                               Operating Revenues (in millions) (1)         
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,  
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,                  
                           2012       2012        2011       2012     2011  
                      ------------- -------- ------------- -------- --------
Contract Drilling                                                           
 Revenues                                                                   
  High-Specification                                                        
   Floaters:                                                                
    Ultra Deepwater                                                         
     Floaters         $       1,213 $  1,141 $       1,030 $  3,446 $  2,878
    Deepwater                                                               
     Floaters                   306      327           185      876      716
    Harsh Environment                                                       
     Floaters                   247      264           190      766      522
                      ------------- -------- ------------- -------- --------
  Total High-                                                               
   Specification                                                            
   Floaters                   1,766    1,732         1,405    5,088    4,116
  Midwater Floaters             424      338           352    1,108    1,129
  High-Specification                                                        
   Jackups                      110       93            58      270      119
                      ------------- -------- ------------- -------- --------
Total Contract                                                              
 Drilling Revenues -                                                        
 continuing                                                                 
 operations                   2,300    2,163         1,815    6,466    5,364
                      ------------- -------- ------------- -------- --------
                                                                            
Contract Intangible                                                         
 Revenue                         10       11            12       32       32
Other Revenues                                                              
  Client Reimbursable                                                       
   Revenues                      46       34            39      123      107
  Integrated Services                                                       
   and Other                      -        6            13        6       42
  Drilling Management                                                       
   Services                      84      138           112      291      427
                      ------------- -------- ------------- -------- --------
Total Other Revenues            130      178           164      420      576
                      ------------- -------- ------------- -------- --------
Total Revenue from                                                          
 continuing                                                                 
 operations                   2,440    2,352         1,991    6,918    5,972
                      ------------- -------- ------------- -------- --------
                                                                            
Discontinued                                                                
 operations:                                                                
  Standard Jackups              245      209           237      654      710
  Other Rigs                      7        7             6       21       20
  Client Reimbursable                                                       
   Revenues                       6        7             5       18       15
                      ------------- -------- ------------- -------- --------
Total discontinued                                                          
 operations                     258      223           248      693      745
                      ------------- -------- ------------- -------- --------
                                                                            
                      ------------- -------- ------------- -------- --------
Total Company         $       2,698 $  2,575 $       2,239 $  7,611 $  6,717
                      ============= ======== ============= ======== ========
                                                                            
                                     Average Daily Revenue (1)              
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,  
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,                  
                           2012        2012       2011       2012     2011  
                      ------------- -------- ------------- -------- --------
Continuing                                                                  
 operations:                                                                
  High-Specification                                                        
   Floaters:                                                    
            
    Ultra Deepwater                                                         
     Floaters         $     539,300 $537,000 $     524,800 $537,100 $504,000
    Deepwater                                                               
     Floaters               372,600  379,200       343,500  370,800  382,400
    Harsh Environment                                                       
     Floaters               439,600  433,200       433,800  449,500  423,100
                      ------------- -------- ------------- -------- --------
  Total High-                                                               
   Specification                                                            
   Floaters                 486,200  481,600       478,000  485,400  466,800
  Midwater Floaters         284,800  295,800       287,400  285,100  310,600
  High-Specification                                                        
   Jackups                  156,700  141,500       115,000  139,900  112,500
                      ------------- -------- ------------- -------- --------
Total continuing                                                            
 operations:                395,100  401,000       388,800  396,700  397,200
                      ------------- -------- ------------- -------- --------
                                                                            
Discontinued                                                                
 operations                                                                 
  Standard Jackups           92,800   90,800       101,100   91,900  107,000
  Other Rigs                 75,000   77,800        73,800   75,400   74,500
                      ------------- -------- ------------- -------- --------
Total discontinued                                                          
 operations                  92,200   90,300       100,100   91,300  105,700
                      ------------- -------- ------------- -------- --------
                                                                            
                      ------------- -------- ------------- -------- --------
Total Drilling Fleet  $     298,300 $305,400 $     289,800 $301,500 $298,100
                      ============= ======== ============= ======== ========
                                                                            
(1) Average daily revenue is defined as contract drilling revenue earned per
 revenue earning day in the period. A revenue earning day is defined as a   
 day for which a rig earns dayrate after commencement of operations.        
                                                                            
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                   FLEET OPERATING STATISTICS (continued)                   
                                                                            
                                          Utilization (2)                   
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,  
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,                  
                           2012       2012        2011       2012     2011  
                      ------------- -------- ------------- -------- --------
Continuing                                                                  
 operations:                                                                
  High-Specification                                                        
   Floaters:                                                                
    Ultra Deepwater                                                         
     Floaters              91%         87%        79%         87%      79%  
    Deepwater                                                               
     Floaters              61%         59%        37%         55%      43%  
    Harsh Environment                                                       
     Floaters              87%         96%        95%         89%      90%  
                      ------------- -------- ------------- -------- --------
  Total High-                                                               
   Specification                                                            
   Floaters                81%         79%        67%         77%      68%  
  Midwater Floaters        65%         52%        55%         58%      56%  
  High-Specification                                                        
   Jackups                 84%         83%        66%         82%      50%  
                      ------------- -------- ------------- -------- --------
Total continuing                                                            
 operations                77%         72%        63%         72%      63%  
                      ------------- -------- ------------- -------- --------
                                                                            
Discontinued                                                                
 Operations:                                                                
  Standard Jackups         66%         56%        49%         57%      46%  
  Other Rigs               100%       100%        100%        99%      60%  
                      ------------- -------- ------------- -------- --------
Total discontinued                                                          
 operations                67%         57%        50%         58%      46%  
                      ------------- -------- ------------- -------- --------
                                                                            
                      ------------- -------- ------------- -------- --------
Total Drilling Fleet       73%         66%        58%         67%      56%  
                      ============= ======== ============= ======== ========
                                                                            
(2) Utilization is defined as the total actual number of revenue earning    
 days in the period as a percentage of the total number of calendar days in 
 the period for all drilling rigs in our fleet.                             
                                                                            
                                                                            
                                                                            
                                                                            
                                      Revenue Efficiency(3)                 
                            Trailing Five Quarters and Historical Data      
                     -------------------------------------------------------
                                                                            
                     3Q 2012 2Q 2012 1Q 2012 4Q 2011 3Q 2011 FY 2011 FY 2010
                     ------- ------- ------- ------- ------- ------- -------
                                                                            
Ultra Deepwater       95.8%   92.2%   89.4%   89.5%   86.4%   87.7%   88.6% 
Deepwater             93.5%   92.1%   83.2%   88.1%   87.7%   89.4%   90.3% 
Harsh Environment                                                           
 Floaters             95.5%   98.1%   97.8%   98.0%   94.4%   97.4%   96.0% 
Midwater Floaters     89.7%   87.4%   90.8%   94.2%   90.8%   92.6%   92.5% 
High Specification                                                          
 Jackups              97.3%   94.5%   92.5%   93.4%   96.8%   94.8
%   94.6% 
                     ------- ------- ------- ------- ------- ------- -------
Total continuing                                                            
 operations           94.3%   92.1%   89.9%   91.3%   88.5%   90.1%   90.8% 
                     ------- ------- ------- ------- ------- ------- -------
                                                                            
Standard Jackups      95.4%   97.4%   97.9%   96.6%   98.3%   97.8%   97.4% 
Others                99.1%   99.4%   97.3%   98.6%   99.5%   98.7%   98.4% 
                     ------- ------- ------- ------- ------- ------- -------
Total discontinued                                                          
 operations           95.5%   97.5%   97.9%   96.6%   98.3%   97.8%   97.4% 
                     ------- ------- ------- ------- ------- ------- -------
                                                                            
                     ------- ------- ------- ------- ------- ------- -------
Total Fleet           94.5%   92.5%   90.6%   91.9%   89.5%   90.9%   91.7% 
                     ======= ======= ======= ======= ======= ======= =======
                                                                            
(3) Revenue efficiency is defined as actual revenue divided by the highest  
 amount of total revenue which could have been earned during the relevant   
 period(s).                                                                 
                                                                            
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                  SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS                  
                   (In US$ millions, except percentages)                    
                                                                            
                                                                            
                                                                            
                           Three months ended           Nine months ended   
                     ------------------------------  ---------------------- 
                      September   June    September   September   September 
                         30,       30,       30,         30,         30,    
                        2012      2012      2011        2012        2011    
                     ----------  ------  ----------  ----------  ---------- 
                                                                            
Income (loss) from                                                          
 continuing                                                                 
 operations before                                                          
 income taxes        $      630  $ (321) $       77  $      422  $      540 
  Add back                                                                  
   (subtract):                                                              
  Litigation matters          8     750           -         758           - 
  Acquisition costs           -       -           5           1           5 
  Gain on disposal                                                          
   of other assets,                                                         
   net                      (51)      -           -         (51)          - 
  Loss on impairment                                                        
   of goodwill and                                                          
   other assets               -       -           -         210           - 
  Loss on redeemed                                                          
   noncontrolling                                                           
   interest                   -      14           -          25           - 
  Loss on forward                                                           
   exchange contract          -       -          78           -          78 
  Gain on sale of                                                           
   equity method                                                            
   investment                 -       -         (13)          -         (13)
  Other, net                 (1)      -           -          (2)          6 
                     ----------  ------  ----------  ----------  ---------- 
Adjusted income from                                                        
 continuing                                                                 
 operations before                                                          
 income taxes               586     443         147       1,363         616 
                                                                            
Income tax (benefit)                                                        
 expense from                                                               
 continuing                                                                 
 operations                 104     (16)         93          96         211 
    Add back                                                                
     (subtract):                                                            
    Litigation                                                              
     matters                  2       -           -           2           - 
    Gain on disposal                                                        
     of other assets         (3)      -           -          (3)          - 
    Loss on                                                                 
     impairment               -       -           -          30           - 
    Changes in                                                              
     estimates (1)          (14)    141           7         154         (23)
    Other, net                -       -           -           -           2 
                     ----------  ------  ----------  ----------  ---------- 
Adjusted income tax                                                         
 expense from                                                               
 continuing                                                                 
 operations (2)      $       89  $  125  $      100  $      279  $      190 
                     ==========  ======  ==========  ==========  ========== 
                                                                            
Effective Tax Rate                                                          
 (3)                       16.5%    5.0%      120.8%       22.7%       39.1%
                                                                            
Annual Effective Tax                                                        
 Rate (4)                  15.2%   28.2%       68.0%       20.5%       30.8%
                                                                            
(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 allowances on deferred taxes and (c) other   
 tax liabilities.                                                           
(2) The three and nine months ended September 30, 2012 includes $(31)       
 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 divided by income before       
 income taxes.                                                              
(4) Annual Effective Tax Rate is income tax expense excluding various       
 discrete items (such as changes in estimates and tax on items exclu
ded     
 from income before income taxes) divided by income before income taxes     
 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 Diluted Earnings Per Share             
                  (in US$ millions, except per share data)                  
                                                                            
                              YTD       QTR       YTD       QTR       QTR   
Adjusted Net Income        09/30/12  09/30/12  06/30/12  06/30/12  03/31/12 
                           --------  --------  --------  --------  -------- 
Net income (loss)                                                           
 attributable to                                                            
 controlling interest, as                                                   
 reported                  $   (675) $   (381) $   (294) $   (304) $     10 
  Add back (subtract):                                                      
    Litigation matters          756         6       750       750         - 
    Loss on impairment of                                                   
     goodwill and other                                                     
     assets                     180         -       180         -       180 
    Gain on disposal of                                                     
     assets, net                (48)      (48)        -         -         - 
    Loss on redeemed                                                        
     noncontrolling                                                         
     interest                    25         -        25        14        11 
    Loss on impairment of                                                   
     discontinued                                                           
     operations                 911       878        33        12        21 
    (Gain) loss on sale of                                                  
     discontinued                                                           
     operations                 (70)        -       (70)      (72)        2 
    Loss from discontinued                                                  
     operations                 152        30       122        58        64 
    Discrete tax items and                                                  
     other, net                (154)       14      (168)     (141)      (27)
                           --------  --------  --------  --------  -------- 
Net income, as adjusted    $  1,077  $    499  $    578  $    317  $    261 
                           ========  ========  ========  ========  ======== 
                                                                            
Diluted Earnings Per Share                                                  
Diluted earnings (loss)                                                     
 per share, as reported    $  (1.90) $  (1.06) $  (0.83) $  (0.85) $   0.03 
  Add back (subtract):                                                      
    Litigation matters         2.12      0.02      2.12      2.09         - 
    Loss on impairment of                                                   
     goodwill and other                                                     
     assets                    0.50         -      0.51         -      0.51 
    Gain on disposal of                                                     
     assets, net              (0.13)    (0.13)        -         -         - 
    Loss on redeemed                                                        
     noncontrolling                                                         
     interest                  0.07         -      0.07      0.04      0.03 
    Loss on impairment of                                                   
     discontinued                                                           
     operations                2.56      2.43      0.09      0.03      0.06 
    (Gain) loss on sale of                                                  
     discontinued                                                           
     operations               (0.19)        -     (0.20)    (0.20)     0.01 
    Loss from discontinued                                                  
     operations                0.42      0.08      0.34      0.16      0.18 
    Discrete tax items and                                                  
     other, net               (0.44)     0.03     (0.47)    (0.39)    (0.08)
                           --------  --------  --------  --------  -------- 
Diluted earnings per                                                        
 share, as adjusted        $   3.01  $   1.37  $   1.63  $   0.88  $   0.74 
                           ========  ========  ========  ========  ======== 
                                                                            
Adjusted Net    YTD      QTR      YTD      QTR      YTD       QTR     QTR   
 Income       12/31/11 12/31/11 09/30/11 09/30/11 06/30/11 06/30/11 03/31/11
              -------- -------- -------- -------- -------- -------- --------
Net income                                                                  
 (loss)                                                                     
 attributable                                                               
 to                                                                         
 controlling                                                                
 interest, as                                                               
 reported     $(5,754) $(6,165) $   411  $   (32) $   443  $    124 $   319 
 Add back                                                                   
  (subtract):                                                               
  Litigation                                                                
   matters      1,000    1,000        -        -        -         -       - 
  Acquisition                                                               
   costs           22       17        5        5        -         -       - 
  Loss on                                                                   
   impairment                                                               
   of                                                                       
   goodwill                                                                 
   and other                                                                
   assets       5,201    5,201        -        -        -         -       - 
  Gain on                                                                   
   disposal                                                                 
   of assets,                                                               
   net            (13)       -      (13)     (13)       -         -       - 
  Loss on                                                                   
   marketable                                                               
   security        13       13        -        -        -         -       - 
  Loss on                                                                   
   forward                                                                  
   exchange                                                                 
   contract        78        -       78       78        -         -   
    - 
  Loss on                                                                   
   impairment                                                               
   of                                                                       
   discontinued                                                               
   operations      34        4       30        5       25        25       - 
  (Gain) loss                                                               
   on sale of                                                               
   discontinued                                                               
   operations    (201)     (24)    (177)       -     (177)        1    (178)
  Loss from                                                                 
   discontinued                                                               
   operations      86       55       31        -       31        11      20 
  Discrete                                                                  
   tax items                                                                
   and other,                                                               
   net             16      (10)      26       (7)      33        14      19 
              -------  -------  -------  -------  -------  -------- ------- 
Net income,                                                                 
 as adjusted  $   482  $    91  $   391  $    36  $   355  $    175 $   180 
              =======  =======  =======  =======  =======  ======== ======= 
                                                                            
Diluted                                                                     
 Earnings Per                                                               
 Share                                                                      
Diluted                                                                     
 earnings                                                                   
 (loss) per                                                                 
 share, as                                                                  
 reported     $(17.88) $(18.76) $  1.28  $ (0.10) $  1.38  $   0.38 $  0.99 
 Add back                                                                   
  (subtract):                                                               
  Litigation                                                                
   matters       3.11     3.04        -        -        -         -       - 
  Acquisition                                                               
   costs         0.07     0.05     0.02     0.02        -         -       - 
  Loss on                                                                   
   impairment                                                               
   of                                                                       
   goodwill                                                                 
   and other                                                                
   assets       16.15    15.83        -        -        -         -       - 
  Gain on                                                                   
   disposal                                                                 
   of assets,                                                               
   net          (0.04)       -    (0.04)   (0.04)       -         -       - 
  Loss on                                                                   
   marketable                                                               
   security      0.04     0.04        -        -        -         -       - 
  Loss on                                                                   
   forward                                                                  
   exchange                                                                 
   contract      0.24        -     0.24     0.24        -         -       - 
  Loss on                                                                   
   impairment                                                               
   of                                                                       
   discontinued                                                               
   operations    0.11     0.01     0.09     0.02     0.08      0.08       - 
  (Gain) loss                                                               
   on sale of                                                               
   discontinued                                                               
   operations   (0.62)   (0.07)   (0.53)       -    (0.54)        -   (0.55)
  Loss from                                                                 
   discontinued                                                               
   operations    0.27     0.17     0.09        -     0.10      0.04    0.06 
  Discrete                                                                  
   tax items                                                                
   and other,                                                               
   net           0.04    (0.03)    0.07    (0.03)    0.09      0.05    0.06 
              -------  -------  -------  -------  -------  -------- ------- 
Diluted                                                                     
 earnings per                                                               
 share, as                                                                  
 adjusted     $  1.49  $  0.28  $  1.22  $  0.11  $  1.11  $   0.55 $  0.56 
              =======  =======  =======  =======  =======  ======== ======= 
                                                                            
Note: 2010 has been removed pending restatement for discontinued            
 operations.                                                                

  
Analyst Contacts:
Thad Vayda
+1 713-232-7551 
Diane Vento
+1 713-232-8015 
Media Contact:
Guy A. Cantwell 
+1 713-232-7647