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Transocean Ltd. Reports Third Quarter 2011 Results

November 2, 2011

ZUG, SWITZERLAND, Nov 02, 2011 (MARKETWIRE via COMTEX) --

Transocean Ltd. (NYSE: RIG) (SIX: RIGN)

--  Revenues decreased four percent to $2.242 billion compared to $2.334
    billion in the second quarter 2011
--  Third quarter 2011 net loss attributable to controlling interest was
    $71 million, which included $81 million of certain net unfavorable
    items, compared to net income attributable to controlling interest of
    $155 million in the second quarter 2011, which included $36 million of
    certain net unfavorable items
--  Revenue efficiency(1) was 89.5 percent, down from 92.1 percent in the
    second quarter 2011
--  Fleet utilization(2) was 58 percent, up from 55 percent in the second
    quarter 2011
--  Operating and maintenance expenses were $1.540 billion, up from $1.492
    billion in the second quarter 2011
--  Cash flows from operating activities were $492 million, up from $340
    million in the second quarter 2011
--  The Annual Effective Tax Rate(3) for 2011 has increased to 34.1
    percent from 22.6 percent in the second quarter 2011
--  New contracts totaling $1.4 billion were secured in the Fleet Status
    Report period July 13, 2011 through October 17, 2011
--  New contracts totaling $325 million have been secured since the
    October 17, 2011 Fleet Status Report
--  The acquisition of Aker Drilling was completed on October 4, 2011,
    further strengthening Transocean's industry leadership position as
    well as adding approximately $900 million in backlog

Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a net loss attributable to controlling interest of $71 million, or $0.22 per diluted share, for the three months ended September 30, 2011. The results compare to net income attributable to controlling interest of $368 million, or $1.15 per diluted share, for the three months ended September 30, 2010.

Third quarter 2011 results included the following items, after tax, that resulted in a net unfavorable impact of approximately $81 million, or $0.25 per diluted share:

--  $78 million loss resulting from a forward foreign exchange contract
    executed to address the potential exchange rate variability associated
    with the company's acquisition of Aker Drilling,
--  $11 million related to impairment charges, discontinued operations,
    and discrete tax items,
--  $5 million of Aker Drilling acquisition costs, and
--  $13 million gain related to the sale of our equity interest in
    Overseas Drilling Limited, which owns the research vessel Joides
    Resolution.

Third quarter 2011 results also included expenses associated with the Macondo well incident of approximately $9 million, $6 million after tax, or $0.02 per diluted share. These expenses were primarily related to legal costs and other professional fees that are not expected to be recoverable from insurance.

Operations Quarterly Review

Revenues for the three months ended September 30, 2011 were $2.242 billion, compared to revenues of $2.334 billion during the three months ended June 30, 2011. Third quarter contract drilling revenues were $2.061 billion compared to $2.086 billion in the second quarter. The company reported revenue efficiency of 89.5 percent compared to 92.1 percent in the second quarter. Consistent with recent trends, revenue efficiency and out-of-service time continue to be adversely impacted by the need to comply with new well control equipment recertification requirements, higher standards for equipment condition and capacity constraints affecting our vendors. Other revenues decreased $69 million to $169 million, primarily due to lower drilling management services activity. Operating and maintenance expenses totaled $1.540 billion for the third quarter 2011, up from $1.492 billion for the prior quarter. The increase was primarily due to higher costs and expenses associated with rigs undergoing shipyard, maintenance, repair and equipment certification projects.

Cash Flow and Capital Expenditures

Cash flows from operating activities increased to $492 million for the third quarter 2011 compared to $340 million for the second quarter 2011. The increase in cash flows from operations resulted primarily from a reduction in working capital during the third quarter. Capital expenditures decreased to $137 million for the third quarter compared to $293 million in the second quarter 2011. The lower expenditures were primarily due to the timing of shipyard milestone payments associated with our newbuild construction program.

Effective Tax Rate

Transocean's third quarter Effective Tax Rate(4) was 212.8 percent compared to 33.5 percent in the second quarter. The company's third quarter Annual Effective Tax Rate(3) for 2011, which excludes various discrete items, was 82.6 percent compared to 25.6 percent in the second quarter. The increase in the Annual Effective Tax Rate was primarily due to reduced profitability in certain jurisdictions where activities are either taxed on a deemed profit basis or subject to lower tax rates. The third quarter amounts were also impacted by the catch-up adjustment required to reflect the change in the forecasted Annual Effective Tax Rate for the first and second quarter activities. The increase in the Effective Tax Rate was primarily due to the items noted above as well as the impact of the $78 million loss on the forward foreign exchange contact, which provides no tax benefit. Please see the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. ET, 3:00 p.m. CET, on November 3, 2011. To participate, dial +1 719-325-2223 and refer to confirmation code 8774614 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 to be discussed during the conference call, titled "3Q11 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. ET, 6:00 p.m. CET, on November 3, 2011, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 8774614. 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 the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide. With a fleet of 135 mobile offshore drilling units, excluding two Ultra-Deepwater Drillships and four High-Specification Jackups under construction, Transocean's fleet is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. Transocean owns or operates a contract drilling fleet of 50 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment semisubmersibles and drillships), 25 Midwater Floaters, nine High-Specification Jackups, 50 Standard Jackups and one swamp barge.

(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 our 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."

For more information about Transocean, please visit our website at www.deepwater.com.


                      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,
                             ----------------------  ----------------------
                                2011        2010        2011        2010
                             ----------  ----------  ----------  ----------
                                             (As                     (As
                                          adjusted)               adjusted)
Operating revenues
  Contract drilling revenues $    2,061  $    2,183  $    6,097  $    6,880
  Contract drilling
   intangible revenues               12          23          32          85
  Other revenues                    169          75         591         374
                             ----------  ----------  ----------  ----------
                                  2,242       2,281       6,720       7,339
                             ----------  ----------  ----------  ----------
Costs and expenses
  Operating and maintenance       1,540       1,202       4,391       3,735
  Depreciation and
   amortization                     362         388       1,075       1,155
  General and administrative         67          59         200         180
                             ----------  ----------  ----------  ----------
                                  1,969       1,649       5,666       5,070
                             ----------  ----------  ----------  ----------
Loss on impairment                   (3)         --         (28)         --
Gain (loss) on disposal of
 assets, net                         (2)          2           5         256
                             ----------  ----------  ----------  ----------
Operating income                    268         634       1,031       2,525
                             ----------  ----------  ----------  ----------

Other income (expense), net
  Interest income                     7           7          27          17
  Interest expense, net of
   amounts capitalized             (151)       (142)       (443)       (415)
  Other, net                        (77)        (13)        (79)         (1)
                             ----------  ----------  ----------  ----------
                                   (221)       (148)       (495)       (399)
                             ----------  ----------  ----------  ----------
Income from continuing
 operations before income
 tax expense                         47         486         536       2,126
Income tax expense                  100         123         263         368
                             ----------  ----------  ----------  ----------
Income (loss) from
 continuing operations              (53)        363         273       1,758
Income (loss) from
 discontinued operations,
 net of tax                          (7)         15         171          25
                             ----------  ----------  ----------  ----------

Net income (loss)                   (60)        378         444       1,783
Net income attributable to
 noncontrolling interest             11          10          50          23
                             ----------  ----------  ----------  ----------
Net income (loss)
 attributable to controlling
 interest                    $      (71) $      368  $      394  $    1,760
                             ==========  ==========  ==========  ==========

Earnings (loss) per share-
 basic
  Earnings (loss) from
   continuing operations     $    (0.20) $     1.10  $     0.69  $     5.39
  Earnings (loss) from
   discontinued operations        (0.02)       0.05        0.53        0.08
                             ----------  ----------  ----------  ----------
  Earnings (loss) per share  $    (0.22) $     1.15  $     1.22  $     5.47
                             ==========  ==========  ==========  ==========

Earnings (loss) per share-
 diluted
  Earnings (loss) from
   continuing operations     $    (0.20) $     1.10  $     0.69  $     5.39
  Earnings (loss) from
   discontinued operations        (0.02)       0.05        0.53        0.08
                             ----------  ----------  ----------  ----------
  Earnings (loss) per share  $    (0.22) $     1.15  $     1.22  $     5.47
                             ==========  ==========  ==========  ==========

Weighted-average shares
 outstanding
  Basic                             320         319         320         320
  Diluted                           320         319         320         320


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

                                               September 30,   December 31,
                                                    2011           2010
                                               -------------  -------------
                                                              (As adjusted)
Assets
Cash and cash equivalents                      $       3,286  $       3,394
Accounts receivable, net of allowance for
 doubtful accounts of $28 and $38 at September
 30, 2011 and December 31, 2010, respectively          2,046          1,843
Materials and supplies, net of allowance for
 obsolescence of $76 and $70 at September 30,
 2011 and December 31, 2010, respectively                578            514
Deferred income taxes, net                               120            115
Assets held for sale                                     118             --
Other current assets                                     421            329
                                               -------------  -------------
    Total current assets                               6,569          6,195
                                               -------------  -------------

Property and equipment                                26,886         26,721
Property and equipment of consolidated
 variable interest entities                            2,248          2,214
Less accumulated depreciation                          8,413          7,616
                                               -------------  -------------
  Property and equipment, net                         20,721         21,319
                                               -------------  -------------
Goodwill                                               8,132          8,132
Other assets                                           1,223          1,165
                                               -------------  -------------
    Total assets                               $      36,645  $      36,811
                                               =============  =============

Liabilities and equity
Accounts payable                               $         755  $         832
Accrued income taxes                                      23            109
Debt due within one year                               1,830          1,917
Debt of consolidated variable interest
 entities due within one year                             96             95
Other current liabilities                              1,566            883
                                               -------------  -------------
    Total current liabilities                          4,270          3,836
                                               -------------  -------------

Long-term debt                                         8,402          8,354
Long-term debt of consolidated variable
 interest entities                                       772            855
Deferred income taxes, net                               588            575
Other long-term liabilities                            1,730          1,791
                                               -------------  -------------
    Total long-term liabilities                       11,492         11,575
                                               -------------  -------------

Commitments and contingencies
Redeemable noncontrolling interest                        71             25

Shares, CHF 15.00 par value, 335,235,298
 authorized, 167,617,649 conditionally
 authorized, 335,235,298 issued at September
 30, 2011 and December 31, 2010; 319,853,371
 and 319,080,678 outstanding at September 30,
 2011 and December 31, 2010, respectively              4,493          4,482
Additional paid-in capital                             6,545          7,504
Treasury shares, at cost, 2,863,267 held at
 September 30, 2011 and December 31, 2010               (240)          (240)
Retained earnings                                     10,363          9,969
Accumulated other comprehensive loss                    (338)          (332)
                                               -------------  -------------
  Total controlling interest shareholders'
   equity                                             20,823         21,383
                                               -------------  -------------
  Noncontrolling interest                                (11)            (8)
                                               -------------  -------------
    Total equity                                      20,812         21,375
                                               -------------  -------------
    Total liabilities and equity               $      36,645  $      36,811
                                               =============  =============


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

                                  Three months ended     Nine months ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2011       2010       2011       2010
                                 ---------  ---------  ---------  ---------

Cash flows from operating
 activities
Net income (loss)                $     (60) $     378  $     444  $   1,783
Adjustments to reconcile to net
 cash provided by operating
 activities
  Amortization of drilling
   contract intangibles                (12)       (23)       (32)       (85)
  Depreciation and amortization        362        388      1,075      1,155
  Share-based compensation
   expense                              20         26         74         79
  Loss on impairment                     3         --         28         --
  (Gain) loss on disposal of
   discontinued operations, net          4         --       (169)        --
  (Gain) loss on disposal of
   assets, net                           2         (2)        (5)      (256)
  Amortization of debt issue
   costs, discounts and
   premiums, net                        33         48         95        148
  Deferred income taxes                (14)       (40)         2        (74)
  Other, net                            82         30         93         62
  Changes in deferred revenue,
   net                                 (36)        47          7        205
  Changes in deferred expenses,
   net                                  18        (18)       (66)       (55)
  Changes in operating assets
   and liabilities                      90       (125)      (324)       188
                                 ---------  ---------  ---------  ---------
Net cash provided by operating
 activities                            492        709      1,222      3,150
                                 ---------  ---------  ---------  ---------

Cash flows from investing
 activities
  Capital expenditures                (137)      (300)      (670)      (969)
  Investment in marketable
   security                           (199)        --       (199)        --
  Proceeds from disposal of
   assets, net                          88         --        106         51
  Proceeds from disposal of
   discontinued operations, net         --         --        259         --
  Proceeds from insurance
   recoveries for loss of
   drilling unit                        --         --         --        560
  Payment for settlement of
   forward exchange contract,
   net                                 (78)        --        (78)        --
  Other, net                             6          2        (27)        17
                                 ---------  ---------  ---------  ---------
Net cash used in investing
 activities                           (320)      (298)      (609)      (341)
                                 ---------  ---------  ---------  ---------

Cash flows from financing
 activities
  Change in short-term
   borrowings, net                       2         46         58       (131)
  Proceeds from debt                    --      2,000          5      2,054
  Repayments of debt                   (23)      (691)      (272)      (966)
  Distribution of qualifying
   additional paid-in capital         (254)        --       (508)        --
  Purchases of shares held in
   treasury                             --         --         --       (240)
  Other, net                            --        (18)        (4)       (20)
                                 ---------  ---------  ---------  ---------
Net cash provided by (used in)
 financing activities                 (275)     1,337       (721)       697
                                 ---------  ---------  ---------  ---------

Net increase (decrease) in cash
 and cash equivalents                 (103)     1,748       (108)     3,506
Cash and cash equivalents at
 beginning of period                 3,389      2,888      3,394      1,130
                                 ---------  ---------  ---------  ---------
Cash and cash equivalents at end
 of period                       $   3,286  $   4,636  $   3,286  $   4,636
                                 =========  =========  =========  =========


                      TRANSOCEAN LTD. AND SUBSIDIARIES
                         FLEET OPERATING STATISTICS

                                  Operating Revenues (in millions) (1)
                           -------------------------------------------------
                                                          Nine months ended
                                 Three months ended         September 30,
                           ----------------------------- -------------------
                           September  June 30, September
                            30, 2011    2011    30, 2010    2011      2010
                           --------- --------- --------- --------- ---------
Contract Drilling Revenues
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters              $   1,030 $   1,005 $     720 $   2,878 $   2,430
    Deepwater Floaters           187       238       350       716     1,122
    Harsh Environment
     Floaters                    190       181       178       522       520
                           --------- --------- --------- --------- ---------
  Total High-Specification
   Floaters                    1,407     1,424     1,248     4,116     4,072
  Midwater Floaters              352       376       572     1,129     1,616
  Jackups:
    High-Specification
     Jackups                      69        48        57       148       209
    Standard Jackups             226       230       298       685       963
                           --------- --------- --------- --------- ---------
  Total Jackups                  295       278       355       833     1,172
  Other Rigs                       7         8         8        20        20
                           --------- --------- --------- --------- ---------
Total Contract Drilling
 Revenues                      2,061     2,086     2,183     6,098     6,880
                           --------- --------- --------- --------- ---------
Contract Intangible
 Revenue                          12        10        23        32        85
Other Revenues
  Client Reimbursable
   Revenues                       43        40        40       121       118
  Integrated Services and
   Other                          14        15        11        42        52
  Drilling Management
   Services                      112       183        25       427       204
                           --------- --------- --------- --------- ---------
Total Other Revenues             169       238        76       590       374
                           --------- --------- --------- --------- ---------
Total Company              $   2,242 $   2,334 $   2,282 $   6,720 $   7,339
                           ========= ========= ========= ========= =========


                                       Average Daily Revenue (1)
                           -------------------------------------------------
                                                          Nine months ended
                                 Three months ended         September 30,
                           ----------------------------- -------------------
                           September  June 30, September
                            30, 2011    2011    30, 2010    2011      2010
                           --------- --------- --------- --------- ---------
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters              $ 524,800 $ 516,600 $ 422,800 $ 504,000 $ 464,200
    Deepwater Floaters       348,400   396,400   365,600   382,400   381,800
    Harsh Environment
     Floaters                433,800   430,100   414,100   423,100   413,600
  Total High-Specification
   Floaters                  478,900   479,900   403,900   466,800   431,800
  Midwater Floaters          287,400   333,000   328,400   310,600   326,300
  High-Specification
   Jackups                   115,600   110,300   120,800   111,800   140,500
  Standard Jackups           100,400   111,700   113,200   106,900   121,100
  Other Rigs                  73,800    76,400    72,900    74,500    72,600
                           --------- --------- --------- --------- ---------
Total Drilling Fleet       $ 290,200 $ 312,100 $ 271,700 $ 298,100 $ 285,500
                           ========= ========= ========= ========= =========

(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  June 30, September
                            30, 2011    2011    30, 2010    2011      2010
                           --------- --------- --------- --------- ---------
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters                 79%       80%       77%       79%       80%
    Deepwater Floaters        37%       41%       65%       43%       67%
    Harsh Environment
     Floaters                 95%       93%       93%       90%       92%
  Total High-Specification
   Floaters                   67%       69%       75%       68%       77%
  Midwater Floaters           55%       54%       73%       56%       70%
  High-Specification
   Jackups                    69%       56%       57%       56%       61%
  Standard Jackups            48%       43%       52%       45%       53%
  Other Rigs                  100%      50%       50%       60%       50%
                           --------- --------- --------- --------- ---------
Total Drilling Fleet          58%       55%       64%       56%       64%

(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 2011   2Q 2011   1Q 2011   4Q 2010   3Q 2010   FY 2010
                 --------- --------- --------- --------- --------- ---------
                                                  (As       (As       (As
                                               adjusted) adjusted) adjusted)

Ultra Deepwater    86.4%     89.3%     85.3%     86.1%     86.5%     88.6%
Deepwater          87.7%     93.9%     88.2%     88.6%     90.1%     90.3%
Harsh
 Environment
 Floaters          94.4%     98.4%     99.2%     96.1%     96.4%     96.0%
Midwater
 Floaters          90.8%     91.9%     93.6%     85.0%     96.2%     92.5%
High-
 Specification
 Jackups           97.3%     95.6%     95.1%     97.7%     93.3%     95.3%
Standard Jackups   98.2%     98.4%     97.7%     98.9%     96.4%     97.3%
Others             99.5%     97.6%     99.0%     96.1%     99.6%     98.4%

                 --------- --------- --------- --------- --------- ---------
Total Fleet        89.5%     92.1%     90.0%     88.7%     91.8%     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 30,  September  September  September
                       30, 2011     2011     30, 2010   30, 2011   30, 2010
                      ---------  ---------  ---------  ---------  ---------
                                               (As                   (As
                                            adjusted)             adjusted)


Income from
 continuing
 operations before
 income taxes         $      47  $     244  $     486  $     536  $   2,126
  Add back
   (subtract):
  Litigation matters         --         --         14          8         26
  Acquisition costs           5         --         --          5         --
  Loss on impairment
   of assets                  3         25         --         28         --
  (Gain) loss on
   disposal of other
   assets, net               --         --          1         (9)        14
  Loss on forward
   exchange contract         78         --         --         78         --
  Gain on loss of
   Deepwater Horizon         --         --         --         --       (267)
  Gain on sale of
   interest in
   Overseas Drilling
   Limited                  (13)        --         --        (13)        --
  Gain on retirement
   of debt                   --         --         21         --         20
  Other, net                  1         --         --          6          5
                      ---------  ---------  ---------  ---------  ---------
Adjusted income from
 continuing
 operations before
 income taxes               121        269        522        639      1,924
                      ---------  ---------  ---------  ---------  ---------

Income tax expense
 from continuing
 operations                 100         82        123        263        368
  Add back
   (subtract):
  Changes in
   estimates (1)             --        (13)       (12)       (48)       (29)
  Other, net                 --         --         (2)         2         (1)
                      ---------  ---------  ---------  ---------  ---------
Adjusted income tax
 expense from
 continuing
 operations (2)       $     100  $      69  $     109  $     217  $     338
                      ---------  ---------  ---------  ---------  ---------

Effective Tax Rate
 (3)                      212.8%      33.5%      25.3%      49.1%      17.3%

Annual Effective Tax
 Rate (4)                  82.6%      25.6%      21.0%      34.1%      17.6%

(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, 2011 include $60 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 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.

SOURCE: Transocean Ltd.