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Transocean Ltd. Reports Fourth Quarter And Full Year 2015 Results

February 24, 2016
  • Revenues were $1.85 billion, up from $1.61 billion in the third quarter of 2015;
  • Operating and maintenance expenses were $794 million, down from $880 million in the prior period;
  • Adjusted net income was $615 million, $1.68 per diluted share, excluding $4 million of net unfavorable items. This compares with $316 million, $0.87 per diluted share, in the third quarter of 2015, excluding $5 million of net favorable items;
  • Net income attributable to controlling interests was $611 million, $1.66 per diluted share, compared with $321 million, $0.88 per diluted share, in the prior quarter;
  • The Annual Effective Tax Rate(1) was 13.1 percent, compared with 7.5 percent in the third quarter of 2015;
  • Cash flows from operating activities were $960 million, up sequentially from $648 million;
  • Revenue efficiency(2) was 95.9 percent, up from 95.0 percent in the third quarter of 2015;
  • Rig utilization(3) was 60 percent, compared with 70 percent in the prior quarter; and
  • Contract backlog was $15.5 billion as of the February 11, 2016, Fleet Status Report.
     

ZUG, SWITZERLAND-February 24, 2016-Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported net income attributable to controlling interest of $611 million, $1.66 per diluted share, for the three months ended December 31, 2015. Fourth quarter 2015 results included net unfavorable items of $4 million, $0.02 per diluted share, as follows:

  • $29 million, $0.08 per diluted share, related to loss on impairment of the GSF Grand Banks and Deepwater Navigator, which the company has classified as held for sale;
  • $22 million, $0.06 per diluted share, related to restructuring costs; and
  • $1 million in discontinued operations.
     

These net unfavorable items were partially offset by:

  • $27 million, $0.07 per diluted share, in favorable discrete tax benefits; and
  • $21 million, $0.05 per diluted share, in net gains on early debt retirements and asset disposals.
     

After consideration of these net unfavorable items, fourth quarter 2015 adjusted net income was $615 million, or $1.68 per diluted share.
 
For the three months ended December 31, 2014, the company reported a net loss attributable to controlling interest of $739 million, or $2.04 per diluted share. Fourth quarter 2014 included net unfavorable items of $1.08 billion, $2.99 per diluted share, mainly associated with the impairment of goodwill. Excluding the net unfavorable items, adjusted net income was $344 million, or $0.95 per diluted share.

Total revenues for the three months ended December 31, 2015, increased $243 million sequentially to $1.85 billion. Other revenues increased $356 million due to early contract terminations on the Polar Pioneer, Discoverer Americas, and Sedco 714. Contract drilling revenues decreased $113 million due to reduced activity and rig retirements partially offset by higher ultra-deepwater revenue efficiency and higher demobilization revenues.

Operating and maintenance expense decreased $86 million sequentially to $794 million.  The decrease was due primarily to lower activity and the impact of the company's actions to reduce onshore and offshore costs.

General and administrative expense was $58 million, compared with $45 million in the prior quarter. The increase was due largely to restructuring costs.

Depreciation expense was $213 million, compared with $210 million in the prior period.

The Effective Tax Rate(4) was 9.7 percent, up from 4.9 percent in the third quarter of 2015. The Annual Effective Tax Rate was 13.1 percent, up from 7.5 percent in the previous quarter. The increase was due largely to changes in adjusted pre-tax income, currency exchange rates, and the impact of jurisdictional and operational structure changes for certain rigs implemented in the third quarter of 2015.

Interest expense, net of amounts capitalized, decreased $22 million sequentially to $87 million, reflecting, in part, the company's early debt retirements. Capitalized interest was $49 million, compared with $36 million in the third quarter of 2015. Interest income was $5 million, unchanged from the prior quarter.

Cash flows from operating activities increased $312 million sequentially to $960 million due primarily to early contract terminations.

Capital expenditures totaled $665 million, down from $940 million in the prior quarter. The decrease was associated with the company's newbuild program. During the quarter, the company took delivery of the newbuild ultra-deepwater drillship Deepwater Proteus, and the floater is expected to be placed into service in the second quarter of 2016.

"I would like to thank the Transocean team for delivering very solid operating and financial results throughout an extremely challenging year for our industry," said President and Chief Executive Officer Jeremy Thigpen. "While predicting the timing of an industry recovery is nearly impossible, we take comfort in knowing that our strong liquidity, combined with our market-leading backlog, will sustain us through this downturn. Until that time, we will continue to take the necessary steps to keep our employees safe, to drive performance improvements for our customers, to further streamline our business, and to enhance our financial position and returns."

Full Year 2015

For the year ended December 31, 2015, net income attributable to controlling interest totaled $791 million, or $2.16 per diluted share. Full year results included $946 million, $2.58 per diluted share, of net unfavorable items as follows:

  • $1.71 billion, $4.67 per diluted share, associated with the impairment of the Deepwater and Midwater Floater asset groups, and held for sale or scrapped rigs; and
  • $40 million, $0.11 per diluted share, related to restructuring costs.
     

These net unfavorable items were partially offset by:

  • $735 million, $2.02 per diluted share, associated with favorable settlement agreements and insurance recoveries related to Macondo; and
  • $72 million, $0.18 per diluted share, in net gains on early debt retirements and asset disposals, discrete tax benefits, and discontinued operations. 


After excluding the net unfavorable items, adjusted net income for 2015 was $1.74 billion, or $4.74 per diluted share.

For the year ended December 31, 2014, net loss attributable to controlling interest totaled $1.91 billion, $5.29 per diluted share, which included net unfavorable items of $3.71 billion, $10.23 per diluted share primarily associated with the impairment of goodwill. After consideration of the net unfavorable items, adjusted net income for 2014 was $1.80 billion, or $4.94 per diluted share.

Non-GAAP Financial Measures

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

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 61 mobile offshore drilling units consisting of 28 ultra-deepwater floaters, seven harsh-environment semisubmersibles, five deepwater semisubmersibles, 11 midwater semisubmersibles and 10 high-specification jackups. In addition, the company has six ultra-deepwater drillships and five high-specification jackups under construction or under contract to be constructed.

For more information about Transocean, please visit: www.deepwater.com.

Conference Call Information

Transocean will conduct a teleconference starting at 9 a.m. EST, 3 p.m. CET, on Thursday, February 25, 2016, to discuss the results. To participate, dial +1 719-325-2366 and refer to confirmation code 167123 approximately 10 minutes prior to the scheduled start time.

The teleconference will be simulcast in a listen-only mode over the Internet and can be accessed on Transocean's website, www.deepwater.com, by selecting "Investor Relations/Overview." Supplemental materials that may be referenced during the teleconference will be posted to Transocean's website and can be found by selecting "Investor Relations/Financial Reports."

A replay of the conference call will be available after 12 p.m. EST, 6 p.m. CET, on February 25, 2016. The replay, which will be archived for approximately 30 days, can be accessed by dialing +1 719-457-0820 and referring to the confirmation code 167123. The replay will also be available on the company's website.

Forward-Looking Statements

The statements described in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements contain words such as "possible," "intend," "will," "if," "expect" or other similar expressions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in tax estimates, impairment of goodwill, asset impairments, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, fleet utilization, the future prices of oil and gas, capital markets and other factors, including those and other risks discussed in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2014, and in the company's other filings with the SEC, which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.

This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.

Notes
 

(1) Annual Effective Tax Rate is defined as income tax expense from continuing operations excluding various discrete items (such as changes in estimates and tax on items excluded from income before income tax expense), divided by income from continuing operations before income tax expense excluding gains on sales and similar items pursuant to the accounting standards for income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."

(2) Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage.  Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions. See the accompanying schedule entitled "Revenue Efficiency."

(3) Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage. See the accompanying schedule entitled "Utilization."

(4) Effective Tax Rate is defined as income tax expense for continuing operations divided by income from continuing operations before income taxes. See the accompanying schedule entitled "Supplemental Effective Tax Rate Analysis."

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

Diane Vento
+1 713-232-8015

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


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

    Three months ended December 31,       Years ended
December 31,
 
    2015     2014       2015     2014  
                           
Operating revenues                                  
Contract drilling revenues   $ 1,456     $ 2,167       $ 6,802     $ 8,952  
Other revenues     395       70         584       222  
      1,851       2,237         7,386       9,174  
Costs and expenses                                  
Operating and maintenance     794       1,310         2,955       5,110  
Depreciation     213       290         963       1,139  
General and administrative     58       62         193       234  
      1,065       1,662         4,111       6,483  
Loss on impairment     (28 )     (1,210 )       (1,867 )     (4,043 )
Loss on disposal of assets, net     (8 )     (12 )       (28 )     (26 )
Operating income (loss)     750       (647 )       1,380       (1,378 )
                                   
Other income (expense), net                                  
Interest income     5       8         22       39  
Interest expense, net of amounts capitalized     (87 )     (123 )       (432 )     (483 )
Other, net     15       10         60       22  
      (67 )     (105 )       (350 )     (422 )
Income (loss) from continuing operations before income tax expense     683       (752 )       1,030       (1,800 )
Income tax expense (benefit)     66       10         206       146  
Income (loss) from continuing operations     617       (762 )       824       (1,946 )
Income (loss) from discontinued operations, net of tax     -       (4 )       2       (20 )
                                   
Net income (loss)     617       (766 )       826       (1,966 )
Net income (loss) attributable to noncontrolling interest     6       (27 )       35       (53 )
Net income (loss) attributable to controlling interest   $ 611     $ (739 )     $ 791     $ (1,913 )
                                   
Earnings (loss) per share-basic                                  
Earnings (loss) from continuing operations   $ 1.66     $ (2.03 )     $ 2.16     $ (5.23 )
Earnings (loss) from discontinued operations     -       (0.01 )       -       (0.06 )
Earnings (loss) per share   $ 1.66     $ (2.04 )     $ 2.16     $ (5.29 )
                                   
Earnings (loss) per share-diluted                                  
Earnings (loss) from continuing operations   $ 1.66     $ (2.03 )     $ 2.16     $ (5.23 )
Earnings (loss) from discontinued operations     -       (0.01 )       -       (0.06 )
Earnings (loss) per share   $ 1.66     $ (2.04 )     $ 2.16     $ (5.29 )
                                   
Weighted-average shares outstanding                                  
Basic     364       362         363       362  
Diluted     364       362         363       362  




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

               
    December 31,   
    2015   2014  
               
Assets              
Cash and cash equivalents   $  2,339   $ 2,635  
Accounts receivable, net              
Trade      1,343     2,084  
Other      36     36  
Materials and supplies, net      635     818  
Assets held for sale      8     25  
Restricted cash      340     114  
Other current assets      84     128  
Total current assets      4,785     5,840  
               
Property and equipment      26,274     28,516  
Less accumulated depreciation      (5,456)     (6,978)  
Property and equipment, net      20,818     21,538  
Deferred income taxes, net      316      360  
Other assets      410     833  
Total assets   $  26,329   $  28,571  
               
Liabilities and equity              
Accounts payable   $  448   $ 784  
Accrued income taxes      82     131  
Debt due within one year      1,093     1,032  
Other current liabilities      1,046     1,822  
Total current liabilities      2,669     3,769  
               
Long-term debt      7,397     9,019  
Deferred income taxes, net      339      436  
Other long-term liabilities      1,108     1,354  
Total long-term liabilities      8,844      10,809  
               
Commitments and contingencies              
Redeemable noncontrolling interest      8     11  
               
Shares, CHF 15.00 par value, 396,260,487 authorized, 167,617,649 conditionally authorized, 373,830,649 issued at December 31, 2015 and 2014 and 364,035,397 and 362,279,530 outstanding at December 31, 2015 and 2014, respectively.      5,193     5,169  
Additional paid-in capital      5,739     5,797  
Treasury shares, at cost, 2,863,267 held at December 31, 2015 and 2014      (240)     (240)  
Retained earnings      4,140     3,349  
Accumulated other comprehensive loss      (334)     (404)  
Total controlling interest shareholders' equity      14,498     13,671  
Noncontrolling interest      310     311  
Total equity      14,808     13,982  
Total liabilities and equity   $  26,329   $  28,571  

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

                     
    Years ended December 31,   
    2015   2014   2013  
                     
Cash flows from operating activities                    
Net income (loss)   $  826    $  (1,966)   $  1,407   
Adjustments to reconcile to net cash provided by operating activities:                    
Amortization of drilling contract intangibles      (15)      (15)      (15)  
Depreciation      963       1,139       1,109   
Share-based compensation expense      67       98       113   
Loss on impairment      1,867       4,043       81   
Loss on impairment of assets in discontinued operations      -      -      14   
(Gain) loss on disposal of assets, net      28       26       (7)  
(Gain) loss on disposal of assets in discontinued operations, net      (1)      10       (54)  
Deferred income tax benefit      (78)      (142)      (9)  
Other, net      66       52       99   
Changes in deferred revenue, net      (90)      106       (78)  
Changes in deferred expenses, net      176       (48)      74   
Changes in operating assets and liabilities      (364)      (1,083)      (816)  
Net cash provided by operating activities      3,445       2,220       1,918   
                     
Cash flows from investing activities                    
Capital expenditures      (2,001)      (2,165)      (2,238)  
Proceeds from disposal of assets, net      51       215       174   
Proceeds from disposal of assets in discontinued operations, net      3       35       204   
Proceeds from sale of preference shares      -      -      185   
Proceeds from repayment of notes and loans receivable      15       101       17   
Investment in loans receivable      -      (15)      -  
Other, net      -      1       -  
Net cash used in investing activities      (1,932)      (1,828)      (1,658)  
                     
Cash flows from financing activities                    
Repayments of debt      (1,506)      (539)      (1,692)  
Proceeds from restricted cash investments      110       176       298   
Deposits to restricted cash investments      -      (20)      (119)  
Proceeds from sale of noncontrolling interest      -      443       -  
Issue costs for sale of noncontrolling interest      -      (26)      -  
Distributions of qualifying additional paid-in capital      (381)      (1,018)      (606)  
Distributions to holders of noncontrolling interest      (29)      (5)      -  
Other, net      (3)      (11)      (32)  
Net cash used in financing activities      (1,809)      (1,000)      (2,151)  
                     
Net increase (decrease) in cash and cash equivalents      (296)      (608)      (1,891)  
Cash and cash equivalents at beginning of period      2,635       3,243       5,134   
Cash and cash equivalents at end of period   $  2,339    $  2,635    $  3,243   

TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS

  Operating Revenues (in millions)
  Three months ended     Years ended
  December 31,
2015
    September 30,
2015
    December 31,
2014
    December 31,
2015
    December 31,
2014
Contract drilling revenues                                    
  Ultra-deepwater floaters $ 813     $ 768   $   997     $ 3,365     $ 4,495
  Harsh environment floaters   178       211       312       890       1,099
  Deepwater floaters   128       135       277       646       1,021
  Midwater floaters   222       327       428       1,359       1,723
  High-specification jackups   111       124       149       527       598
Contract intangible revenues   4       4       4       15       16
Total contract drilling revenues   1,456       1,569       2,167       6,802       8,952
                                     
Other revenues                                    
  Customer early termination fees   367       -       -       433       -
  Customer reimbursement revenues and other   28       39       70       151       222
Total other revenues   395       39       70       584       222
Total revenues $ 1,851     $ 1,608     $ 2,237     $ 7,386     $ 9,174
                                     
                                     
  Average Daily Revenue (1)
  Three months ended     Years ended
  December 31,
2015
    September 30,
 2015
    December 31,
2014
    December 31,
2015
    December 31,
2014
  Ultra-deepwater floaters $ 512,600     $ 475,800     $ 544,800     $ 513,900     $ 538,400
  Harsh environment floaters   702,200       493,400       484,000       542,600       470,500
  Deepwater floaters   349,700       368,600       391,100       354,400       378,300
  Midwater floaters   380,800       350,000       338,500       349,200       347,200
  High-specification jackups   172,100       172,700       170,200       172,900       168,500
Total $ 422,800     $ 385,300     $ 406,400     $ 400,500     $ 408,200
                                     
  1. Average daily revenue is defined as contract drilling revenues earned per operating day.  An operating day is defined as a calendar day during which a rig is contracted to earn a dayrate during the firm contract period after commencement of operations.


TRANSOCEAN LTD. AND SUBSIDIARIES
FLEET OPERATING STATISTICS (continued)

  Utilization (2)
  Three months ended     Years ended
  December 31,
2015
    September 30,
2015
    December 31,
2014
    December 31,
2015
    December 31,
2014
  Ultra-deepwater floaters 64%     65%     69%     65%     82%
  Harsh environment floaters 39%     66%     100%     64%     91%
  Deepwater floaters 67%     67%     64%     73%     62%
  Midwater floaters 53%     78%     65%     77%     64%
  High-specification jackups 70%     78%     95%     83%     93%
Total drilling fleet 60%     70%     73%     71%     76%
                                     
  1. 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)
    Three months ended     Years ended  
    December 31,
2015
    September 30,
2015
    December 31,
2014
    December 31,
2015
    December 31,
2014
 
    Ultra-deepwater floaters 94.1%     91.5%     95.4%     95.1%     94.3%  
    Harsh environment floaters 99.0%     98.6%     96.0%     98.1%     95.7%  
    Deepwater floaters 95.1%     98.9%     96.3%     97.4%     96.2%  
    Midwater floaters 98.7%     98.2%     93.0%     95.2%     93.3%  
    High-specification jackups 99.8%     99.3%     99.0%     99.2%     97.0%  
  Total drilling fleet 95.9%     95.0%     95.3%     96.0%     94.7%  
  1. Revenue efficiency is defined as actual contract drilling revenues for the measurement period divided by the maximum revenue calculation for the measurement period, expressed as a percentage.  Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions.


Transocean Ltd. and Subsidiaries  
Supplemental Effective Tax Rate Analysis  
(In US$ millions, except tax rates)  
   
                 
                 
  Three months ended     Years ended  
  December 31,     September 30,     December 31,     December 31,     December 31,  
  2015     2015     2014     2015     2014  
Income from continuing operations before income taxes $ 683     $ 344     $ (752 )   $ 1,030     $ (1,800 )
  Add back (subtract):                                      
  Litigation matters   -       -       -       (788 )     (18 )
  Restructuring charges   27       3       1       47       10  
  Loss on impairment of goodwill and other assets   28       13       1,210       1,867       4,043  
  Gain on disposal of other assets, net   (7 )     (1 )     (6 )     (13 )     (4 )
  Loss (gain) on retirement of debt   (16 )     (7 )     8       (23 )     13  
Adjusted income from continuing operations before income taxes   715       352       461       2,120       2,244  
                                       
Income tax expense (benefit) from continuing operations   66       17       10       206       146  
  Add back (subtract):                                      
  Litigation matters   -       -       -       (53 )     (6 )
  Restructuring charges   5       1       -       7       1  
  Loss (gain) on impairment of goodwill and other assets   (1 )     -       48       154       143  
  Gain on disposal of other assets, net   (2 )     -       (2 )     (1 )     (2 )
  Changes in estimates (1)   26       9       66       35       138  
Adjusted income tax expense from continuing operations (2) $ 94     $ 27     $ 122     $ 348     $ 420  
                                       
Effective Tax Rate (3)   9.7 %     4.9 %     (1.3) %     20.0 %     (8.1) %
                                       
Annual Effective Tax Rate (4)   13.1 %     7.5 %     26.5 %     16.4 %     18.7 %
                                       
  1. Our estimates change as we file tax returns, settle disputes with tax authorities or become aware of other events and include changes in  (a) deferred taxes, (b) valuation of allowances on deferred taxes and (c) other tax liabilities.
  1. The three months and year ended December 31, 2015 includes $(6) 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.
  1. Effective Tax Rate is income tax expense for continuing operations, divided by income from continuing operations before income taxes.
  1. Annual Effective Tax Rate is income tax expense for continuing operations, excluding various discrete items (such as changes in estimates and tax on items excluded from income before income taxes) divided by income from continuing operations before income tax expense excluding gains and losses on sales and similar items pursuant to the accounting standards for income taxes and estimating the annual effective tax rate.


Transocean Ltd. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
Adjusted Net Income and Adjusted Diluted Earnings Per Share
(in US$ millions, except per share data)
  YTD QTD YTD QTD YTD QTD QTD
  12/31/15 12/31/15 09/30/15 09/30/15 06/30/15 06/30/15 03/31/15
Adjusted Net Income        
Net income (loss) attributable to controlling interest, as reported $791 $611 $180 $321 $(141) $342 $(483)
Add back (subtract):        
Litigation matters (735) - (735) - (735) (735) -
Restructuring charges 40 22 18 2 16 11 5
Loss on impairment of assets 1,713 29 1,684 13 1,671 797 874
Gain on disposal of assets, net (12) (5) (7) (1) (6) (5) (1)
Gain on retirement of debt (23) (16) (7) (7) - - -
Gain on disposal of assets in discontinued operations (1) - (1) (1) - - -
(Income) loss from discontinued operations (1) 1 (2) (3) 1 (1) 2
Discrete tax items and other, net (35) (27) (8) (8) - (1) 1
Net income, as adjusted $1,737 $615 $1,122 $316 $806 $408 $398
        
Adjusted Diluted Earnings Per Share:        
Diluted earnings (loss) per share, as reported $2.16 $1.66 $0.49 $0.88 $(0.39) $0.93 $(1.33)
Add back (subtract):        
Litigation matters (2.02) - (2.02) - (2.02) (2.02) -
Restructuring charges 0.11 0.06 0.04 - 0.04 0.03 0.01
Loss on impairment of assets 4.67 0.08 4.61 0.03 4.60 2.18 2.41
Gain on disposal of assets, net (0.02) (0.01) (0.02) - (0.02) (0.01) -
Gain on retirement of debt (0.06) (0.04) (0.02) (0.02) - - -
Gain on disposal of assets in discontinued operations - - - - - - -
(Income) loss from discontinued operations - - - - - - 0.01
Discrete tax items and other, net (0.10) (0.07) (0.02) (0.02) - - -
Diluted earnings per share, as adjusted  $4.74  $1.68  $3.06  $0.87  $2.21  $1.11 $1.10

  YTD QTD YTD QTD YTD QTD QTD
  12/31/14 12/31/14 09/30/14 09/30/14 06/30/14 06/30/14 03/31/14
Adjusted Net Income        
Net income (loss) attributable to controlling interest, as reported $(1,913) $(739) $(1,174) $(2,217) $1,043 $587 $456
Add back (subtract):        
Litigation matters (12) - (12) (14) 2 - 2
Restructuring charges 9 1 8 3 5 4 1
Loss on impairment of goodwill and other assets 3,826 1,140 2,686 2,621 65 - 65
(Gain) loss on disposal of assets, net (2) (4) 2 3 (1) (1) -
Loss on retirement of debt 13 8 5 - 5 4 1
Loss on disposal of assets in discontinued operations 10 - 10 - 10 - 10
Loss (income) from discontinued operations 10 4 6 1 5 7 (2)
Discrete tax items and other, net (138) (66) (72) (45) (27) (14) (13)
Net income, as adjusted $1,803 $344 $1,459 $352 $1,107 $587 $520
        
Adjusted Diluted Earnings Per Share:        
Diluted earnings (loss) per share, as reported $(5.29) $(2.04) $(3.24) $(6.12) $2.86 $1.61 $1.25
Add back (subtract):        
Litigation matters (0.03) - (0.03) (0.04) 0.01 - 0.01
Restructuring charges 0.02 - 0.02 0.01 0.01 0.01 -
Loss on impairment of goodwill and other assets 10.53 3.15 7.39 7.22 0.19 - 0.19
(Gain) loss on disposal of assets, net (0.01) (0.01) 0.01 0.01 - - -
Loss on retirement of debt 0.04 0.02 0.01 - 0.01 0.01 -
Loss on disposal of assets in discontinued operations 0.03 - 0.03 - 0.03 - 0.03
Loss (income) from discontinued operations 0.03 0.01 0.02 - 0.01 0.02 (0.01)
Discrete tax items and other, net (0.38) (0.18) (0.21) (0.12) (0.08) (0.04) (0.04)
Diluted earnings per share, as adjusted $4.94 $0.95 $4.00 $0.96 $3.04 $1.61 $1.43

HUG#1989170