Transocean Ltd. Reports Fourth Quarter and Full Year 2012 Results

Transocean Ltd. Reports Fourth Quarter and Full Year 2012 Results 
ZUG, SWITZERLAND -- (Marketwire) -- 03/01/13 --  Transocean Ltd.
(NYSE: RIG) (SIX: RIGN) 


 
--  Fourth quarter 2012 revenues were $2.326 billion, compared with $2.431
    billion in the third quarter 2012;
--  Operating and maintenance expenses for the fourth quarter were $1.438
    billion, compared with $1.321 billion in the third quarter 2012;
--  Fourth quarter 2012 net income attributable to controlling interest
    was $456 million, which included $126 million of net favorable items.
    This compares with the third quarter 2012 net loss attributable to
    controlling interest of $381 million, which included $887 million of
    net unfavorable items;
--  Fourth quarter Annual Effective Tax Rate(1) from continuing operations
    was 7.8 percent, compared with 15.2 percent in the third quarter 2012;
--  Fourth quarter net income attributable to controlling interest was
    $1.26 per diluted share. After adjusting for net favorable items,
    adjusted earnings from continuing operations were $330 million, or
    $0.91 per diluted share;
--  Cash flows from operating activities were $923 million in the fourth
    quarter, compared with $786 million in the third quarter 2012;
--  Revenue efficiency(2) from continuing operations was 94.7 percent in
    the fourth quarter, compared with 94.9 percent, in the third quarter
    2012. Ultra-Deepwater revenue efficiency was 95.5 percent, compared
    with 95.9 percent in the prior quarter. Total rig utilization(3) from
    continuing operations was 79 percent in the fourth quarter, compared
    with 80 percent in the third quarter 2012;
--  New contracts associated with continuing operations totaling $2.0
    billion were secured in the Fleet Status Report periods October 17,
    2012 through February 14, 2013. Backlog from continuing operations was
    $28.8 billion at February 14, 2013; and
--  During the fourth quarter of 2012, the company reclassified its
    drilling management services operations in the U.S. Gulf of Mexico to
    discontinued operations, reducing other revenues and operating and
    maintenance expenses in the period by $51 million and $50 million,
    respectively.

  
Transocean Ltd. (NYSE: RIG) (SIX: RIG
N) today reported net income
attributable to controlling interest of $456 million, or $1.26 per
diluted share, for the three months ended December 31, 2012. Fourth
quarter 2012 results included net favorable items of $126 million, or
$0.35 per diluted share. The results compare with a net loss
attributable to controlling interest of $6.2 billion, or $18.76 per
diluted share, for the three months ended December 31, 2011. Fourth
quarter 2011 results included net unfavorable items of $6.3 billion,
or $19.02 per diluted share. The net unfavorable items in 2011 were
primarily due to a loss on goodwill impairment of $5.2 billion, or
$15.83 per diluted share, related to the contract drilling services
reporting unit; and $1.0 billion, or $3.04 per diluted share, for
estimated loss contingencies associated with the Macondo well
incident. 
Fourth quarter 2012 net favorable items, after tax, included the
following: 


 
--  $101 million, or $0.28 per diluted share, associated with favorable
    discrete tax items, and
--  $25 million, or $0.07 per diluted share, of income from discontinued
    operations primarily associated with the sale of the shallow water
    rigs.

  
After consideration of these net favorable items, adjusted earnings
from continuing operations were $330 million, or $0.91 per diluted
share. A reconciliation of the non-GAAP adjusted net income and
diluted earnings per share is included in the accompanying schedules. 
Revenues from continuing operations for the three months ended
December 31, 2012 were $2.326 billion, compared with revenues of
$2.431 billion during the preceding three month period. Contract
drilling revenues decreased $35 million primarily due to the expected
increase in out of service time, partly offset by higher average
dayrates. Revenue efficiency from continuing operations was 94.7
percent for the fourth quarter, compared with 94.9 percent in the
third quarter 2012. Other revenues decreased $70 million to $51
million for the fourth quarter 2012, compared with $121 million in
the prior quarter, primarily due to lower drilling management
services activity. 
As expected, operating and maintenance expenses from continuing
operations increased $117 million to $1.438 billion for the fourth
quarter of 2012, compared with $1.321 billion for the prior quarter.
Contract drilling expenses increased $173 million primarily due to
higher maintenance and shipyard costs associated with rigs undergoing
surveys and other projects. Costs associated primarily with the
company's drilling management services reporting unit decreased $56
million due to reduced activity.  
General and administrative expenses were $65 million for the fourth
quarter 2012, compared with $69 million in the previous quarter. 
Transocean's fourth quarter Effective Tax Rate(4) from continuing
operations was (20.7) percent, compared with 16.5 percent in the
third quarter 2012. The decrease in the Effective Tax Rate was due to
changes in estimates primarily related to settlements of prior years'
tax liabilities. Transocean's Annual Effective Tax Rate from
continuing operations for the fourth quarter 2012 was 7.8 percent.
This compares with 15.2 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, the foreign exchange
effect of the strengthened Norwegian krone versus the U.S. dollar,
and rig movements between jurisdictions. Fourth quarter 2012 income
tax expense included a favorable adjustment of $37 million, or $0.10
per diluted share, required to decrease the 2012 Annual Effective Tax
Rate to 17.8 percent from 20.5 percent for the nine months ended
September 30, 2012. 
Interest expense, net of amounts capitalized, was $180 million,
unchanged from the prior quarter. Capitalized interest for the fourth
quarter was $18 million, compared with $12 million in the third
quarter 2012. Interest income decreased to $13 million in the fourth
quarter, compared with $15 million in the third quarter 2012. 
Cash flows from operating activities were $923 million for the fourth
quarter, compared with $786 million for the third quarter 2012.
Capital expenditures from continuing operations were $657 million for
the fourth quarter, compared with $201 million in the third quarter
of 2012.  
Full Year 2012 
For the year ended December 31, 2012, net loss attributable to
controlling interest totaled $219 million, or $0.62 per diluted
share. Full year results included $1.638 billion, or $4.58 per
diluted share, of net unfavorable items as follows: 


 
--  $961 million, or $2.70 per diluted share, loss on impairment of assets
    included in discontinued operations;
--  $756 million, or $2.11 per diluted share, primarily for estimated loss
    contingencies associated with the Macondo well incident;
--  $135 million, or $0.38 per diluted share, additional charges
    associated with the estimated 2011 goodwill impairment of the contract
    drilling services reporting unit and the 2012 impairment of the
    intangible assets of ADTI;
--  $66 million, or $0.19 per diluted share, net loss from discontinued
    operations, offset by;
--  $232 million or $0.67 per diluted share, related to favorable discrete
 
    taxes and other items; and
--  $48 million, or $0.13 per diluted share, gain on the sale of two
    deepwater floaters.

  
After consideration of these net unfavorable items, adjusted earnings
from continuing operations for the full year 2012 were $1.419
billion, or $3.96 per diluted share. A reconciliation of the non-GAAP
adjusted net income and diluted earnings per share is included in the
accompanying schedules. 
During the fourth quarter of 2012, the company reclassified its
drilling management services operations in the U.S. Gulf of Mexico to
discontinued operations, reducing other revenues and operating and
maintenance expenses by $103 million and $112 million, respectively,
for the year ended December 31, 2012. 
Interest expense, net of amounts capitalized, was $723 million for
the full year 2012, compared with $621 million for the full year
2011. Capitalized interest for the full year 2012 was $54 million,
compared with $39 million in 2011. Interest income was $56 million
for the full year 2012, compared with $44 million in 2011. 
For the full year 2012, cash flow from operating activities totaled
$2.708 billion, compared with $1.825 billion for 2011. 
For the year ended December 31, 2011, net loss attributable to
controlling interest totaled $5.754 billion, or $17.88 per diluted
share, resulting primarily from the loss on the goodwill impairment
associated with the contract drilling services reporting unit of $5.2
billion, or $16.15 per diluted share; and the estimated loss
contingencies associated with the Macondo well incident of $1.0
billion, or $3.10 per diluted share. 
Full Year 2013 Guidance Summary 
The following table is a summary of the company's full year 2013
guidance for key income statement and balance sheet items. This
information is based on current expectations and certain management
assumptions, and is subject to change.  


 
                                                                            
                Item                                 Range                  
----------------------------------------------------------------------------
Other Revenues *                          $400 million - $420 million       
----------------------------------------------------------------------------
Fleet Average Revenue Efficiency            Approximately 93 percent        
----------------------------------------------------------------------------
Operating and Maintenance Expenses        $5.7 billion - $5.9 billion       
----------------------------------------------------------------------------
Depreciation and Amortization             $1.1 billion - $1.2 billion       
----------------------------------------------------------------------------
General and Administrative Expenses       $280 million - $300 million       
----------------------------------------------------------------------------
Net Interest Expense **                   $540 million - $550 million       
----------------------------------------------------------------------------
Annual Effective Tax Rate                     Between 18% and 22%           
----------------------------------------------------------------------------
Capital Expenditures                       Approximately $3.0 billion       
----------------------------------------------------------------------------
                                     Net loss of $15 million to $20 million 
Discontinued Operations                           per quarter               
----------------------------------------------------------------------------
                                                                            
* Other Revenues includes Drilling Management Services, recharge revenues,  
and other miscellaneous revenues.                                           
** Net Interest Expense is net of capitalized interest of approximately $90 
million and Interest Income of approximately $50 million.                   

 
Forward-Looking Statements 
Statements included in this news release including, but not limited
to, those regarding estimates of Transocean's full year 2013
guidance, goodwill or long-lived asset impairments, estimated 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, March 4, 2013. To participate, dial +1
913-312-0407 and refer to confirmation code 8254413 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 "4Q12 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
3:00 p.m. EST, 9:00 p.m. CET, on March 4, 2013, and can be accessed
by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the
confirmation code 8254413. 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, 82 mobile offshore drilling units consisting of 48
High-Specification Floaters (Ultra-Deepwater, Deepwater and
Harsh-Environment drilling rigs), 25 Midwater Floaters and nine
High-Specification Jackups. In addition, we have six Ultra-Deepwater
Drillships and three High-Specification Jackups under construction. 
For more information about Transocean, please visit the website
www.deepwater.com. 
Note
s 
(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 t
otal number of available 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 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                      
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                  Three months ended        Year ended      
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Operating revenues                                                          
  Contract drilling revenues     $   2,275  $   2,011  $   8,773  $   7,407 
  Other revenues                        51        122        423        620 
                                 ---------  ---------  ---------  --------- 
                                     2,326      2,133      9,196      8,027 
                                 ---------  ---------  ---------  --------- 
Costs and expenses                                                          
  Operating and maintenance          1,438      2,355      6,106      6,179 
  Depreciation and amortization        278        290      1,123      1,109 
  General and administrative            65         88        282        288 
                                 ---------  ---------  ---------  --------- 
                                     1,781      2,733      7,511      7,576 
                                 ---------  ---------  ---------  --------- 
Loss on impairment                      --     (5,201)      (140)    (5,201)
Gain (loss) on disposal of                                                  
 assets, net                            (4)       (10)        36        (12)
                                 ---------  ---------  ---------  --------- 
Operating income                       541     (5,811)     1,581     (4,762)
                                 ---------  ---------  ---------  --------- 
                                                                            
Other income (expense), net                                                 
  Interest income                       13         17         56         44 
  Interest expense, net of                                                  
   amounts capitalized                (180)      (178)      (723)      (621)
  Gain on retirement of debt            --         --          2         -- 
  Other, net                           (16)        (3)       (50)       (99)
                                 ---------  ---------  ---------  --------- 
                                      (183)      (164)      (715)      (676)
                                 ---------  ---------  ---------  --------- 
Income (loss) from continuing                                               
 operations before income tax                                               
 expense                               358     (5,975)       866     (5,438)
Income tax expense (benefit)           (74)       119         50        324 
                                 ---------  ---------  ---------  --------- 
Income (loss) from continuing                                               
 operations                            432     (6,094)       816     (5,762)
Income (loss) from discontinued                                             
 operations, net of tax                 25        (28)    (1,027)        85 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net income (loss)                      457     (6,122)      (211)    (5,677)
Net income attributable to                                                  
 noncontrolling interest                 1         43          8         77 
                                 ---------  ---------  ---------  --------- 
Net income (loss) attributable                                              
 to controlling interest         $     456  $  (6,165) $    (219) $  (5,754)
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share-basic                                             
  Earnings (loss) from                                                      
   continuing operations         $    1.19  $  (18.67) $    2.27  $  (18.14)
  Earnings (loss) from                                                      
   discontinued operations            0.07      (0.09)     (2.89)      0.26 
                                 ---------  ---------  ---------  --------- 
  Earnings (loss) per share      $    1.26  $  (18.76) $   (0.62) $  (17.88)
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share-                                                  
 diluted                                                                    
  Earnings (loss) from                                                      
   continuing operations         $    1.19  $  (18.67) $    2.27  $  (18.14)
  Earnings (loss) from                            
                          
   discontinued operations            0.07      (0.09)     (2.89)      0.26 
                                 ---------  ---------  ---------  --------- 
  Earnings (loss) per share      $    1.26  $  (18.76) $   (0.62) $  (17.88)
                                 =========  =========  =========  ========= 
                                                                            
Weighted-average shares                                                     
 outstanding                                                                
  Basic                                359        329        356        322 
  Diluted                              360        329        356        322 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                        CONSOLIDATED BALANCE SHEETS                         
                      (In millions, except share data)                      
                                (Unaudited)                                 
                                                                            
                                                        December 31,        
                                                 -------------------------- 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                                            
Assets                                                                      
Cash and cash equivalents                        $      5,134  $      4,017 
Accounts receivable, net                                                    
  Trade                                                 1,940         2,049 
  Other                                                   260           127 
Materials and supplies, net                               610           529 
Assets held for sale                                      179            26 
Deferred income taxes, net                                142           142 
Other current assets                                      382           646 
                                                 ------------  ------------ 
      Total current assets                              8,647         7,536 
                                                 ------------  ------------ 
                                                                            
Property and equipment                                 26,967        24,833 
Property and equipment of consolidated variable                             
 interest entities                                      1,092         2,252 
Less accumulated depreciation                           7,179         6,297 
                                                 ------------  ------------ 
    Property and equipment, net                        20,880        20,788 
                                                 ------------  ------------ 
Goodwill                                                2,987         3,217 
Other assets                                            1,741         3,491 
                                                 ------------  ------------ 
      Total assets                               $     34,255  $     35,032 
                                                 ============  ============ 
                                                                            
Liabilities and equity                                                      
Accounts payable                                 $      1,047  $        880 
Accrued income taxes                                      116            86 
Debt due within one year                                1,339         1,942 
Debt of consolidated variable interest entities                             
 due within one year                                       28           245 
Other current liabilities                               2,933         2,375 
                                                 ------------  ------------ 
      Total current liabilities                         5,463         5,528 
                                                 ------------  ------------ 
                                                                            
Long-term debt                                         10,929        10,756 
Long-term debt of consolidated variable interest                            
 entities                                                 163           593 
Deferred income taxes, net                                366           487 
Other long-term liabilities                             1,604         1,925 
                                                 ------------  ------------ 
      Total long-term liabilities                      13,062        13,761 
                                                 ------------  ------------ 
                                                                            
Commitments and contingencies                                               
Redeemable noncontrolling interest                         --           116 
                                                                            
Shares, CHF 15.00 par value, 402,282,355                                    
 authorized, 167,617,649 conditionally                                      
 authorized at December 31, 2012 and 2011;                                  
 373,830,649 and 365,135,298 issued at December                             
 31, 2012 and 2011, respectively; and                                       
 359,505,251 and 349,805,793 outstanding at                                 
 December 31, 2012 and 2011, respectively               5,130         4,982 
Additional paid-in capital                              7,521         7,211 
Treasury shares, at cost, 2,863,267 held at                                 
 December 31, 2012 and 2011                              (240)         (240)
Retained earnings                                       3,855         4,180 
Accumulated other comprehensive loss                     (521)         (496)
                                                 ------------  ------------ 
    Total controlling interest shareholders'                                
     equity                                            15,745        15,637 
                                                 ------------  ------------ 
    Noncontrolling interest                               (15)          (10)
                                                 ------------  ------------ 
      Total equity                                     15,730        15,627 
                                                 ------------  ------------ 
      Total liabilities and equity               $     34,255  $     35,032 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                               (In millions)                                
                                (Unaudited)                                 
                                                                            
                                  Three months ended    Twelve months ended 
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from operating                                                   
 activities                                                                 
  Net income (loss)              $     457  $  (6,122) $    (211) $  (5,677)
  Adjustments to reconcile to                                               
   net cash provided by                                                     
   operating activities                                                     
    Amortization of drilling                                                
     contract intangibles              (10)       (13)       (42)       (45)
    Depreciation and                                                        
     amortization                      278        290      1,123      1,109 
    Depreciation and                                          
              
     amortization of assets in                                              
     discontinued operations            --         82        183        342 
    Share-based compensation                                                
     expense                            25         21         97         95 
    Loss on impairment                  --      5,201        140      5,201 
    Loss on impairment of assets                                            
     in discontinued operations          3          6        986         38 
    (Gain) loss on disposal of                                              
     assets, net                         4         11        (36)        12 
    Gain on disposal of assets                                              
     in discontinued operations,                                            
     net                               (12)        (8)       (82)      (183)
    Amortization of debt issue                                              
     costs, discounts and                                                   
     premiums, net                      16         30         68        125 
    Deferred income taxes              (29)       (92)      (133)       (62)
    Other, net                          25         59         72        144 
    Changes in deferred revenue,                                            
     net                                15        (23)       (54)       (16)
    Changes in deferred                                                     
     expenses, net                      55          5         85        (61)
    Changes in operating assets                                             
     and liabilities                    96      1,156        512        803 
                                 ---------  ---------  ---------  --------- 
Net cash provided by operating                                              
 activities                            923        603      2,708      1,825 
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from investing                                                   
 activities                                                                 
  Capital expenditures                (657)      (341)    (1,303)      (974)
  Capital expenditures for                                                  
   discontinued operations             (31)        (9)      (106)       (46)
  Investment in business                                                    
   combination, net of cash                                                 
   acquired                             --     (1,047)        --     (1,246)
  Proceeds from disposal of                                                 
   assets, net                           2          2        191         14 
  Proceeds from disposal of                                                 
   assets in discontinued                                                   
   operations, net                     593         94        789        447 
  Payment for settlement of                                                 
   forward exchange contract            --         --         --        (78)
  Other, net                             8         14         40        (13)
                                 ---------  ---------  ---------  --------- 
Net cash used in investing                                                  
 activities                            (85)    (1,287)      (389)    (1,896)
                                 ---------  ---------  ---------  --------- 
                                                                            
Cash flows from financing                                                   
 activities                                                                 
  Changes in short-term                                                     
   borrowings, net                      --       (146)      (260)       (88)
  Proceeds from debt                    --      2,934      1,493      2,939 
  Repayments of debt                (1,698)    (2,137)    (2,282)    (2,409)
  Proceeds from restricted cash                                             
   investments                          13        479        311        479 
  Deposits to restricted cash                                               
   investments                          (9)      (523)      (167)      (523)
  Proceeds from share issuance,                                             
   net                                  --      1,211         --      1,211 
  Distribution of qualifying                                                
   additional paid-in capital           --       (255)      (278)      (763)
  Other, net                           (11)      (108)       (19)      (112)
                                 ---------  ---------  ---------  --------- 
Net cash provided by (used in)                                              
 financing activities               (1,705)     1,455     (1,202)       734 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net increase (decrease) in cash                                             
 and cash equivalents                 (867)       771      1,117        663 
Cash and cash equivalents at                                                
 beginning of period                 6,001      3,246      4,017      3,354 
                                 ---------  ---------  ---------  --------- 
Cash and cash equivalents at end                                            
 of period                       $   5,134  $   4,017  $   5,134  $   4,017 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                         FLEET OPERATING STATISTICS                         
                                                                            
                                 Operating Revenues (in millions)           
                      ------------------------------------------------------
                                                            Years ended     
                             Three months ended             December 31,    
                      -------------------------------- ---------------------
                       December   September  December                       
                       31, 2012    30, 2012   31, 2011    2012       2011   
                      ---------- ---------- ---------- ---------- ----------
Contract Drilling                                                           
 Revenues                                                                   
  High-Specification                                                        
   Floaters:                                                                
    Ultra Deepwater                                                         
     Floaters         $    1,198 $    1,213 $    1,066 $    4,643 $    3,945
    Deepwater                                                               
     Floaters                275        306        256      1,152        969
    Harsh Environment                                                       
     Floaters                220        247        285        985        806
                      ---------- ---------- ---------- ---------- ----------
  Total High-                                                               
   Specification                                                            
   Floaters                1,693      1,766      1,607      6,78
0      5,720
  Midwater Floaters          464        424        333      1,573      1,462
  High-Specification                                                        
   Jackups                   108        110         58        378        176
                      ---------- ---------- ---------- ---------- ----------
Total Contract                                                              
 Drilling Revenues -                                                        
 continuing                                                                 
 operations                2,265      2,300      1,998      8,731      7,358
                      ---------- ---------- ---------- ---------- ----------
                                                                            
Contract Intangible                                                         
 Revenue                      10         10         13         42         45
Other Revenues                                                              
  Client Reimbursable                                                       
   Revenues                   40         46         36        162        142
  Integrated Services                                                       
   and Other                   3          -         13         10         53
  Drilling Management                                                       
   Services                    8         75         73        251        429
                      ---------- ---------- ---------- ---------- ----------
Total Other Revenues          51        121        122        423        624
                      ---------- ---------- ---------- ---------- ----------
Total Revenue from                                                          
 continuing                                                                 
 operations           $    2,326 $    2,431 $    2,133 $    9,196 $    8,027
                      ========== ========== ========== ========== ==========
                                                                            
                                                                            
                                     Average Daily Revenue (1)              
                      ------------------------------------------------------
                                                            Years ended     
                             Three months ended             December 31,    
                      -------------------------------- ---------------------
                       December  September   December                       
                        31, 2012  30, 2012   31, 2011     2012       2011   
                      ---------- ---------- ---------- ---------- ----------
Continuing                                                                  
 operations:                                                                
  High-Specification                                                        
   Floaters:                                                                
    Ultra Deepwater                                                         
     Floaters         $  514,300 $  515,000 $  490,200 $  500,300 $  461,000
    Deepwater                                                               
     Floaters            337,100    356,300    315,200    338,200    340,000
    Harsh Environment                                                       
     Floaters            476,400    421,000    463,000    444,500    428,400
                      ---------- ---------- ---------- ---------- ----------
  Total High-                                                               
   Specification                                                            
   Floaters              469,300    464,600    446,100    455,000    430,400
  Midwater Floaters      280,300    264,500    264,800    262,200    286,400
  High-Specification                                                        
   Jackups               162,400    154,600    107,300    141,300    108,500
                      ---------- ---------- ---------- ---------- ----------
Total Drilling Fleet: $  382,000 $  376,200 $  369,900 $  370,300 $  367,600
                      ========== ========== ========== ========== ==========
                                                                            
(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)                    
                      ----------------------------------------------------- 
                                                            Years ended     
                             Three months ended            December 31,     
                      -------------------------------  -------------------- 
                      December   September   December                       
                       31, 2012   30, 2012   31, 2011     2012       2011   
                      ---------  ---------  ---------  ---------  --------- 
Continuing                                                                  
 operations:                                                                
  High-Specification                                                        
   Floaters:                                                                
    Ultra Deepwater                                                         
     Floaters                94%        95%        88%        94%        88%
    Deepwater                                                               
     Floaters                64%        63%        55%        61%        49%
    Harsh Environment                                                       
     Floaters                72%        91%        96%        87%        94%
                      ---------  ---------  ---------  ---------  --------- 
  Total High-                                                               
   Specification                                                            
   Floaters                  82%        85%        78%        83%        76%
  Midwater Floaters          72%        70%        57%        66%        59%
  High-Specification                                                        
   Jackups                   81%        86%        74%        84%        57%
                      ---------  ---------  ---------  ---------  --------- 
Total Drilling Fleet         79%        80%        72%        78%        69%
                      =========  =========  =========  =========  ========= 
                                                                            
(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     
                     ------------------------------------------------------ 
                                                                  
          
                                                                            
                       4Q     3Q     2Q     1Q     4Q     FY     FY     FY  
                      2012   2012   2012   2012   2011   2012   2011   2010 
                     -----  -----  -----  -----  -----  -----  -----  ----- 
Ultra Deepwater       95.5%  95.9%  92.4%  89.0%  89.6%  93.2%  87.9%  89.0%
Deepwater             90.9%  96.1%  94.5%  83.1%  89.7%  91.4%  90.7%  91.5%
Harsh Environment                                                           
 Floaters             97.3%  95.4%  97.9%  97.8%  98.0%  97.1%  97.4%  96.0%
Midwater Floaters     93.9%  90.4%  88.2%  90.6%  95.4%  90.9%  93.4%  92.8%
High Specification                                                          
 Jackups              95.2%  97.2%  94.3%  92.1%  93.4%  95.0%  94.8%  94.7%
                     -----  -----  -----  -----  -----  -----  -----  ----- 
Total Fleet           94.7%  94.9%  92.7%  89.6%  91.8%  93.0%  90.5%  91.2%
                     =====  =====  =====  =====  =====  =====  =====  ===== 
                                                                            
(3) Revenue efficiency is defined as actual contract drilling revenues for  
    the measurement period divided by the maximum revenue calculation for   
    the measurement period, expressed as a percentage. Maximum revenue is   
    defined as the greatest amount of contract drilling revenues the        
    drilling unit could earn for the measurement period, excluding amounts  
    related to incentive provisions.                                        
                                                                            
                                                                            
                                                                            
                      TRANSOCEAN LTD. AND SUBSIDIARIES                      
                  SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS                  
                   (In US$ millions, except percentages)                    
                                                                            
                             Three months ended             Years ended     
                      -------------------------------  -------------------- 
                       December  September   December   December   December 
                       31, 2012   30, 2012   31, 2011   31, 2012   31, 2011 
                      ---------  ---------  ---------  ---------  --------- 
                                                                            
Income (loss) from                                                          
 continuing                                                                 
 operations before                                                          
 income taxes         $     358  $     638  $  (5,975) $     866  $  (5,438)
  Add back                                                                  
   (subtract):                                                              
  Litigation matters         --          8      1,000        758      1,000 
  Acquisition costs          --         --         17          1         22 
  Gain on disposal of                                                       
   other assets, net         --        (51)        --        (51)        -- 
  Loss on impairment                                                        
   of goodwill and                                                          
   other assets              --         --      5,201        140      5,201 
  Loss on redeemed                                                          
   noncontrolling                                                           
   interest                  --         --         --         25         -- 
  Loss on forward                                                           
   exchange contract         --         --         --         --         78 
  Loss on marketable        
                                                
   security                  --         --         13         --         13 
  Gain on retirement                                                        
   of debt                   --         (2)        --         (2)        -- 
  Other, net                 --         --         --         --          6 
                      ---------  ---------  ---------  ---------  --------- 
Adjusted income from                                                        
 continuing                                                                 
 operations before                                                          
 income taxes               358        593        256      1,737        882 
                                                                            
Income tax (benefit)                                                        
 expense from                                                               
 continuing                                                                 
 operations                 (74)       105        119         50        324 
    Add back                                                                
     (subtract):                                                            
    Litigation                                                              
     matters                 --          2         --          2         -- 
    Gain on disposal                                                        
     of other assets,                                                       
     net                     --         (3)        --         (3)        -- 
    Loss on                                                                 
     impairment of                                                          
     goodwill and                                                           
     other assets            --         --         --          5         -- 
    Changes in                                                              
     estimates (1)          102        (14)         7        256        (14)
    Other, net               --         --         --         --          2 
                      ---------  ---------  ---------  ---------  --------- 
Adjusted income tax                                                         
 expense from                                                               
 continuing                                                                 
 operations (2)       $      28  $      90  $     126  $     310  $     312 
                      =========  =========  =========  =========  ========= 
                                                                            
Effective Tax Rate                                                          
 (3)                      -20.7%      16.5%      -2.0%       5.8%      -6.0%
                                                                            
Annual Effective Tax                                                        
 Rate (4)                   7.8%      15.2%      49.2%      17.8%      35.4%
                                                                            
(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 months and year ended December 31, 2012 includes $(37) 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 variou
s       
    discrete items (such as changes in estimates and tax on items excluded  
    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      QTD      YTD     QTD     YTD     QTD     QTD  
                    12/31/   12/31/  09/30/  09/30/  06/30/  06/30/  03/31/ 
                      12       12      12      12      12      12      12   
                   -------  -------  ------  ------  ------  ------  ------ 
Adjusted Net Income                                                         
Net income (loss)                                                           
 attributable to                                                            
 controlling                                                                
 interest, as                                                               
 reported          $  (219) $   456  $ (675) $ (381) $ (294) $ (304) $   10 
  Add back                                                                  
   (subtract):                                                              
    Litigation                                                              
     matters           756        -     756       6     750     750       - 
    Loss on                                                                 
     impairment of                                                          
     goodwill and                                                           
     other assets      135        -     135       -     135       -     135 
    Gain on                                                                 
     disposal of                                                            
     assets, net       (48)       -     (48)    (48)      -       -       - 
    Gain on                                                                 
     retirement of                                                          
     debt               (2)       -      (2)     (2)      -       -       - 
    Loss on                                                                 
     redeemed                                                               
     noncontrolling                                                         
     interest           25        -      25       -      25      14      11 
    Loss on                                                                 
     impairment of                                                          
     discontinued                                                           
     operations        961        2     959     881      78      12      66 
    (Gain) loss on                                                          
     sale of                                                                
     discontinued                                                           
     operations        (69)      (1)    (68)      2     (70)    (72)      2 
    (Gain) loss                                                             
     from                                                                   
     discontinued                                                           
     operations        135      (26)    161      33     128      59      69 
    Discrete tax                                                            
     items and                                                              
     other, net       (255)    (101)   (154)     15    (169)   (141)    (28)
                   -------  -------  ------  ------  ------  ------  ------ 
    Net income, as                                                          
     adjusted      $ 1,419  $   330  $1,089  $  506  $  583  $  318  $  265 
                   =======  =======  ======  ======  ======  ======  ====== 
                                                                            
Diluted Earnings                                                            
 Per Share:                                                                 
Diluted earnings                                                            
 (loss) per share,                                                          
 as reported       $ (0.62) $  1.26  $(1.90) $(1.06) $(0.84) $(0.86) $ 0.03 
  Add back                                                                  
   (subtract):                                                              
    Litigation                                                              
     matters          2.11        -    2.12    0.02    2.12    2.11       - 
    Loss on                                                                 
     impairment of                                                          
     goodwill and                                                           
     other assets     0.38        -    0.38       -    0.38       -    0.38 
    Gain on                                                                 
     disposal of                                                            
     assets, net     (0.13)       -   (0.13)  (0.13)      -       -       - 
    Gain on                                                                 
     retirement of                                                          
     debt            (0.01)       -   (0.01)  (0.01)      -       -       - 
    Loss on                                                                 
     redeemed                                                               
     noncontrolling                                                         
     interest         0.07        -    0.07       -    0.07    0.04    0.03 
    Loss on                                                                 
     impairment of                                                          
     discontinued                                                           
     operations       2.70        -    2.70    2.45    0.23    0.03    0.19 
    (Gain) loss on                                                          
     sale of                                                                
     discontinued                                                           
     operations      (0.19)       -   (0.19)   0.01   (0.20)  (0.20)   0.01 
    (Gain) loss                                                             
     from                                                                   
     discontinued                                                           
     operations       0.38    (0.07)   0.45    0.09    0.36    0.17    0.19 
    Discrete tax                                                            
     items and                                                              
     other, net      (0.73)   (0.28)  (0.44)   0.03   (0.48)  (0.40)  (0.08)
                   -------  -------  ------  ------  ------  ------  ------ 
Diluted earnings                                                            
 per share, as                                                              
 adjusted          $  3.96  $  0.91  $ 3.05  $ 1.40  $ 1.64  $ 0.89  $ 0.75 
                   =======  =======  ======  ======  ======  ======  ====== 
                                                                      
      
                                                                            
                     YTD      QTD      YTD     QTD     YTD     QTD     QTD  
                    12/31/   12/31/  09/30/  09/30/  06/30/  06/30/  03/31/ 
                      11       11      11      11      11      11      11   
                   -------  -------  ------  ------  ------  ------  ------ 
Adjusted Net Income                                                         
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       -       -       -       -       - 
    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       (214)     (24)   (190)    (14)   (176)      2    (178)
    Loss from                                                               
     discontinued                                                           
     operations         95       48      47      11      36      10      26 
    Discrete tax                                                            
     items and                                                              
     other, net         19       (8)     27      (6)     33      13      20 
                   -------  -------  ------  ------  ------  ------  ------ 
    Net income, as                                                          
     adjusted      $   494  $    86  $  408  $   47  $  361  $  174  $  187 
                   =======  =======  ======  ======  ======  ======  ====== 
                                                                            
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          3.10     3.04       -       -       -       -       - 
    Acquisition                                                             
     costs            0.07     0.05    0.02    0.02       -       -       - 
    Loss on                                                                 
     impairment of                                                          
     goodwill and                                                           
     other assets    16.15    15.83       -       -       -       -       - 
    Loss on                                                                 
     marketable                                                             
     security         0.04     0.04       -       -       -       -       - 
    Loss on forward                                                         
     exchange                                                               
     contract         0.24        -    0.26    0.25       -       -       - 
    Loss on                                                                 
     impairment of                                                          
     discontinued                                                           
     operations       0.11     0.01    0.11    0.02    0.09    0.08       - 
    (Gain) loss on                                                          
     sale of                                                                
     discontinued                                                           
     operations      (0.66)   (0.07)  (0.62)  (0.04)  (0.56)   0.01   (0.56)
    Loss from                                                               
     discontinued                                                           
     operations       0.29     0.15    0.16    0.03    0.11    0.03    0.08 
    Discrete tax                                                            
     items and                                                              
     other, net       0.06    (0.03)   0.06   (0.03)   0.10    0.04    0.07 
                   -------  -------  ------  ------  ------  ------  ------ 
Diluted earnings                                                            
 per share, as                                                              
 adjusted          $  1.52  $  0.26  $ 1.27  $ 0.15  $ 1.12  $ 0.54  $ 0.58 
                   =======  =======  ======  ======  ======  ======  ====== 

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