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Transocean Ltd. Reports Third Quarter 2012 Results

ZUG, SWITZERLAND -- (Marketwire) -- 11/04/12 -- Transocean Ltd. (NYSE: RIG) (SIX: RIGN)

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

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

Net unfavorable items, after tax, impacting the third quarter of 2012 included the following:

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

After adjusting for these net unfavorable items, adjusted earnings from continuing operations were $499 million, or $1.37 per diluted share. A reconciliation of the non-GAAP adjusted net income and diluted earnings per share is attached.

Operations Quarterly Review

Revenues from continuing operations for the three months ended September 30, 2012 were $2.440 billion, compared with revenues of $2.352 billion during the three months ended June 30, 2012. Contract drilling revenues increased $136 million mainly due to higher revenue efficiency(1) primarily on Ultra-Deepwater floaters, and lower out of service time. Revenue efficiency(1) from continuing operations was 94.3 percent for the third quarter, compared with 92.1 percent in the second quarter 2012. Other revenues decreased $48 million to $130 million for the third quarter 2012, compared with $178 million in the prior quarter, primarily due to decreased levels of low-margin drilling management services activity.

Operating and maintenance expenses from continuing operations decreased $43 million to $1.338 billion for the third quarter of 2012. This compares with $1.381 billion for the second quarter of 2012, excluding $750 million for estimated loss contingencies associated with the Macondo well incident. Contract drilling expenses increased by $17 million due to annual pay raises, activity increases, professional fees, and various other items, partly offset by lower costs in the third quarter associated with rigs undergoing surveys, contract preparation or other shipyard projects. The delayed commencement of shipyard projects favorably impacted contract drilling expenses in the third quarter. Costs associated with the company's drilling management services reporting unit decreased $60 million mostly due to reduced activity.

General and administrative expenses were $69 million for the third quarter 2012, compared with $79 million in the previous quarter. The decrease was primarily due to transaction costs in the second quarter associated with the Quantum exchange of its 50 percent interest in Transocean Pacific Drilling Inc. for Transocean Ltd.'s shares.

Income Taxes

Transocean's third quarter Effective Tax Rate(4) from continuing operations was 16.5 percent, compared with 5.0 percent in the second quarter 2012. The increase in the Effective Tax Rate(4) was due to changes in estimates primarily for settlements of prior years' tax liabilities. Transocean's Annual Effective Tax Rate(3) from continuing operations for the third quarter 2012 was 15.2 percent. This compares with 28.2 percent for the prior quarter. The decrease was primarily due to changes in the blend of income that is taxed based on gross revenues versus pre-tax income and rig movements between taxing jurisdictions, among other things. Third quarter 2012 income tax expense included a favorable adjustment of $31 million, or $0.09 per diluted share, required to reflect a decrease in the Annual Effective Tax Rate(3) to 20.5 percent for the nine months ended September 30, 2012, from 24.6 percent for the first half of 2012.

Other Items

For the third quarter, interest expense, net of amounts capitalized, was $180 million, compared with $183 million in the second quarter 2012. Capitalized interest for the third quarter 2012 was $12 million, unchanged from the prior quarter. Interest income increased to $15 million in the third quarter, compared with $13 million in the second quarter 2012.

Cash flows from operating activities were $786 million for the third quarter, compared with $459 million for the second quarter 2012. Capital expenditures from total operations were $225 million for the third quarter, compared with $236 million in the second quarter of 2012.

Forward-Looking Statements

Statements included in this news release, including those regarding estimates of Transocean's goodwill or long-lived asset impairments and the 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, November 5, 2012. To participate, dial +1 719-325-4828 and refer to confirmation code 2448847 approximately five to 10 minutes prior to the scheduled start time of the call.

In addition, the conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto Transocean's website at www.deepwater.com and selecting "Investor Relations." A file containing four charts that may be discussed during the conference call, titled "3Q12 Charts," has been posted to Transocean's website and can also be found by selecting "Investor Relations/Quarterly Toolkit." The conference call may also be accessed via the Internet at www.CompanyBoardroom.com by typing in Transocean's New York Stock Exchange trading symbol, "RIG."

A telephonic replay of the conference call should be available after 1:00 p.m. EST, 7:00 p.m. CET, on November 5, 2012, and can be accessed by dialing +1 719-457-0820 or +1 888-203-1112 and referring to the confirmation code 2448847. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced internet addresses. Both replay options will be available for approximately 30 days.

About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.

Transocean owns or has partial ownership interests in, and operates a fleet of 115 mobile offshore drilling units consisting of 48 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh-Environment drilling rigs), 25 Midwater Floaters, nine High-Specification Jackups, 32 Standard Jackups and one swamp barge. Included in the 115 drilling units, the company has 32 Standard Jackups and one swamp barge classified as discontinued operations. In addition, we have six Ultra-Deepwater Drillships and three High-Specification Jackups under construction.

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

Notes

(1) Revenue efficiency is defined as actual revenue divided by the highest amount of total revenue which could have been earned during the relevant period(s). See the accompanying schedule entitled "Revenue Efficiency."

(2) Utilization is defined as the total actual number of revenue earning days in the period as a percentage of the total number of calendar days in the period for all drilling rigs in the company's fleet. See the accompanying schedule entitled "Utilization."

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

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


                      TRANSOCEAN LTD. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                    (In millions, except per share data)
                                 (Unaudited)

                                  Three months ended     Nine months ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------
Operating revenues
  Contract drilling revenues     $   2,310  $   1,827  $   6,498  $   5,396
  Other revenues                       130        164        420        576
                                 ---------  ---------  ---------  ---------
                                     2,440      1,991      6,918      5,972
                                 ---------  ---------  ---------  ---------
Costs and expenses
  Operating and maintenance          1,338      1,344      4,731      3,915
  Depreciation and amortization        280        281        846        821
  General and administrative            69         67        217        200
                                 ---------  ---------  ---------  ---------
                                     1,687      1,692      5,794      4,936
                                 ---------  ---------  ---------  ---------
Loss on impairment                       -          -       (210)         -
Gain (loss) on disposal of
 assets, net                            50         (1)        40         (1)
                                 ---------  ---------  ---------  ---------
Operating income                       803        298        954      1,035
                                 ---------  ---------  ---------  ---------

Other income (expense), net
  Interest income                       15          7         43         27
  Interest expense, net of
   amounts capitalized                (180)      (151)      (543)      (443)
  Other, net                            (8)       (77)       (32)       (79)
                                 ---------  ---------  ---------  ---------
                                      (173)      (221)      (532)      (495)
                                 ---------  ---------  ---------  ---------
Income from continuing
 operations before income tax
 expense                               630         77        422        540
Income tax expense                     104         93         96        211
                                 ---------  ---------  ---------  ---------
Income (loss) from continuing
 operations                            526        (16)       326        329
Income (loss) from discontinued
 operations, net of tax               (909)        (5)      (994)       116
                                 ---------  ---------  ---------  ---------

Net income (loss)                     (383)       (21)      (668)       445
Net income (loss) attributable
 to noncontrolling interest             (2)        11          7         34
                                 ---------  ---------  ---------  ---------
Net income (loss) attributable
 to controlling interest         $    (381) $     (32) $    (675) $     411
                                 =========  =========  =========  =========

Earnings (loss) per share-basic
  Earnings (loss) from
   continuing operations         $    1.47  $   (0.08) $    0.90  $    0.92
  Earnings (loss) from
   discontinued operations           (2.53)     (0.02)     (2.80)      0.36
                                 ---------  ---------  ---------  ---------
  Earnings (loss) per share      $   (1.06) $   (0.10) $   (1.90) $    1.28
                                 =========  =========  =========  =========

Earnings (loss) per share-
 diluted
  Earnings (loss) from
   continuing operations         $    1.47  $   (0.08) $    0.90  $    0.92
  Earnings (loss) from
   discontinued operations           (2.53)     (0.02)     (2.80)      0.36
                                 ---------  ---------  ---------  ---------
  Earnings (loss) per share      $   (1.06) $   (0.10) $   (1.90) $    1.28
                                 =========  =========  =========  =========

Weighted-average shares
 outstanding
  Basic                                359        320        354        320
  Diluted                              359        320        354        320



                      TRANSOCEAN LTD. AND SUBSIDIARIES

                    CONDENSED CONSOLIDATED BALANCE SHEETS

                      (In millions, except share data)
                                 (Unaudited)

                                               September 30,   December 31,
                                                    2012           2011
                                               -------------  -------------
Assets
Cash and cash equivalents                      $       6,001  $       4,017
Accounts receivable, net of allowance for
 doubtful accounts of $28 at September 30,
 2012 and December 31, 2011                            2,163          2,176
Materials and supplies, net of allowance for
 obsolescence of $71 and $59 at September 30,
 2012 and December 31, 2011, respectively                597            529
Deferred income taxes, net                               169            142
Assets held for sale                                     930             26
Other current assets                                     444            646
                                               -------------  -------------
    Total current assets                              10,304          7,536
                                               -------------  -------------

Property and equipment                                26,567         24,833
Property and equipment of consolidated
 variable interest entities                              817          2,252
Less accumulated depreciation                          6,925          6,297
                                               -------------  -------------
  Property and equipment, net                         20,459         20,788
                                               -------------  -------------
Goodwill                                               2,987          3,217
Other assets                                           1,562          3,491
                                               -------------  -------------
    Total assets                               $      35,312  $      35,032
                                               =============  =============

Liabilities and equity
Accounts payable                               $         876  $         880
Accrued income taxes                                     257             86
Debt due within one year                               2,701          1,942
Debt of consolidated variable interest
 entities due within one year                             28            245
Other current liabilities                              2,839          2,375
                                               -------------  -------------
    Total current liabilities                          6,701          5,528
                                               -------------  -------------

Long-term debt                                        11,211         10,756
Long-term debt of consolidated variable
 interest entities                                       177            593
Deferred income taxes, net                               450            514
Other long-term liabilities                            1,517          1,898
                                               -------------  -------------
    Total long-term liabilities                       13,355         13,761
                                               -------------  -------------

Commitments and contingencies
Redeemable noncontrolling interest                         -            116

Shares, CHF 15.00 par value, 402,282,355
 authorized, 167,617,649 conditionally
 authorized, and 373,830,649 and 365,135,298
 issued at September 30, 2012 and December 31,
 2011, respectively; 359,418,883 and
 349,805,793 outstanding at September 30, 2012
 and December 31, 2011, respectively                   5,129          4,982
Additional paid-in capital                             7,496          7,211
Treasury shares, at cost, 2,863,267 held at
 September 30, 2012 and December 31, 2011               (240)          (240)
Retained earnings                                      3,399          4,180
Accumulated other comprehensive loss                    (512)          (496)
                                               -------------  -------------
  Total controlling interest shareholders'
   equity                                             15,272         15,637
                                               -------------  -------------
  Noncontrolling interest                                (16)           (10)
                                               -------------  -------------
    Total equity                                      15,256         15,627
                                               -------------  -------------
    Total liabilities and equity               $      35,312  $      35,032
                                               =============  =============



                      TRANSOCEAN LTD. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                (In millions)
                                 (Unaudited)

                                  Three months ended     Nine months ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------

Cash flows from operating
 activities
  Net income (loss)              $    (383) $     (21) $    (668) $     445
  Adjustments to reconcile to
   net cash provided by
   operating activities
    Amortization of drilling
     contract intangibles               (9)       (12)       (32)       (32)
    Depreciation and
     amortization                      280        281        846        821
    Depreciation and
     amortization of assets in
     discontinued operations            48         80        182        258
    Share-based compensation
     expense                            24         20         72         74
    Loss on impairment                   -          -        210          -
    Loss on impairment of assets
     in discontinued operations        878          7        913         32
    (Gain) loss on disposal of
     assets, net                       (50)         1        (40)         1
    (Gain) loss on disposal of
     assets in discontinued
     operations, net                     1          1        (70)      (175)
    Amortization of debt issue
     costs, discounts and
     premiums, net                      17         33         52         95
    Deferred income taxes              (61)        (6)      (104)        30
    Other, net                          12         79         47         85
    Changes in deferred revenue,
     net                               (64)       (36)       (69)         7
    Changes in deferred
     expenses, net                      51         18         30        (66)
    Changes in operating assets
     and liabilities                    42         47        416       (353)
                                 ---------  ---------  ---------  ---------
Net cash provided by operating
 activities                            786        492      1,785      1,222
                                 ---------  ---------  ---------  ---------

Cash flows from investing
 activities
  Capital expenditures                (201)      (124)      (646)      (633)
  Capital expenditures for
   discontinued operations             (24)       (13)       (75)       (37)
  Investment in marketable
   security                              -       (199)         -       (199)
  Proceeds from disposal of
   assets, net                         178          4        189         12
  Proceeds from disposal of
   assets in discontinued
   operations, net                       5         84        196        353
  Payment for settlement of
   forward exchange contract             -        (78)         -        (78)
  Other, net                             7          6         32        (27)
                                 ---------  ---------  ---------  ---------
Net cash used in investing
 activities                            (35)      (320)      (304)      (609)
                                 ---------  ---------  ---------  ---------

Cash flows from financing
 activities
  Changes in short-term
   borrowings, net                       -          2       (260)        58
  Proceeds from debt                 1,493          -      1,493          5
  Repayments of debt                  (264)       (23)      (584)      (272)
  Proceeds from restricted cash
   investments                         106          -        298          -
  Deposits to restricted cash
   investments                         (42)         -       (158)         -
  Distribution of qualifying
   additional paid-in capital            -       (254)      (278)      (508)
  Other, net                            (7)         -         (8)        (4)
                                 ---------  ---------  ---------  ---------
Net cash provided by (used in)
 financing activities                1,286       (275)       503       (721)
                                 ---------  ---------  ---------  ---------

Net increase (decrease) in cash
 and cash equivalents                2,037       (103)     1,984       (108)
Cash and cash equivalents at
 beginning of period                 3,964      3,349      4,017      3,354
                                 ---------  ---------  ---------  ---------
Cash and cash equivalents at end
 of period                       $   6,001  $   3,246  $   6,001  $   3,246
                                 =========  =========  =========  =========



                      TRANSOCEAN LTD. AND SUBSIDIARIES
                         FLEET OPERATING STATISTICS

                               Operating Revenues (in millions) (1)
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,
                           2012       2012        2011       2012     2011
                      ------------- -------- ------------- -------- --------
Contract Drilling
 Revenues
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters         $       1,213 $  1,141 $       1,030 $  3,446 $  2,878
    Deepwater
     Floaters                   306      327           185      876      716
    Harsh Environment
     Floaters                   247      264           190      766      522
                      ------------- -------- ------------- -------- --------
  Total High-
   Specification
   Floaters                   1,766    1,732         1,405    5,088    4,116
  Midwater Floaters             424      338           352    1,108    1,129
  High-Specification
   Jackups                      110       93            58      270      119
                      ------------- -------- ------------- -------- --------
Total Contract
 Drilling Revenues -
 continuing
 operations                   2,300    2,163         1,815    6,466    5,364
                      ------------- -------- ------------- -------- --------

Contract Intangible
 Revenue                         10       11            12       32       32
Other Revenues
  Client Reimbursable
   Revenues                      46       34            39      123      107
  Integrated Services
   and Other                      -        6            13        6       42
  Drilling Management
   Services                      84      138           112      291      427
                      ------------- -------- ------------- -------- --------
Total Other Revenues            130      178           164      420      576
                      ------------- -------- ------------- -------- --------
Total Revenue from
 continuing
 operations                   2,440    2,352         1,991    6,918    5,972
                      ------------- -------- ------------- -------- --------

Discontinued
 operations:
  Standard Jackups              245      209           237      654      710
  Other Rigs                      7        7             6       21       20
  Client Reimbursable
   Revenues                       6        7             5       18       15
                      ------------- -------- ------------- -------- --------
Total discontinued
 operations                     258      223           248      693      745
                      ------------- -------- ------------- -------- --------

                      ------------- -------- ------------- -------- --------
Total Company         $       2,698 $  2,575 $       2,239 $  7,611 $  6,717
                      ============= ======== ============= ======== ========

                                     Average Daily Revenue (1)
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,
                           2012        2012       2011       2012     2011
                      ------------- -------- ------------- -------- --------
Continuing
 operations:
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters         $     539,300 $537,000 $     524,800 $537,100 $504,000
    Deepwater
     Floaters               372,600  379,200       343,500  370,800  382,400
    Harsh Environment
     Floaters               439,600  433,200       433,800  449,500  423,100
                      ------------- -------- ------------- -------- --------
  Total High-
   Specification
   Floaters                 486,200  481,600       478,000  485,400  466,800
  Midwater Floaters         284,800  295,800       287,400  285,100  310,600
  High-Specification
   Jackups                  156,700  141,500       115,000  139,900  112,500
                      ------------- -------- ------------- -------- --------
Total continuing
 operations:                395,100  401,000       388,800  396,700  397,200
                      ------------- -------- ------------- -------- --------

Discontinued
 operations
  Standard Jackups           92,800   90,800       101,100   91,900  107,000
  Other Rigs                 75,000   77,800        73,800   75,400   74,500
                      ------------- -------- ------------- -------- --------
Total discontinued
 operations                  92,200   90,300       100,100   91,300  105,700
                      ------------- -------- ------------- -------- --------

                      ------------- -------- ------------- -------- --------
Total Drilling Fleet  $     298,300 $305,400 $     289,800 $301,500 $298,100
                      ============= ======== ============= ======== ========

(1) Average daily revenue is defined as contract drilling revenue earned per
 revenue earning day in the period. A revenue earning day is defined as a
 day for which a rig earns dayrate after commencement of operations.




                      TRANSOCEAN LTD. AND SUBSIDIARIES
                   FLEET OPERATING STATISTICS (continued)

                                          Utilization (2)
                      ------------------------------------------------------
                                                           Nine months ended
                               Three months ended            September 30,
                      ------------------------------------ -----------------
                      September 30, June 30, September 30,
                           2012       2012        2011       2012     2011
                      ------------- -------- ------------- -------- --------
Continuing
 operations:
  High-Specification
   Floaters:
    Ultra Deepwater
     Floaters              91%         87%        79%         87%      79%
    Deepwater
     Floaters              61%         59%        37%         55%      43%
    Harsh Environment
     Floaters              87%         96%        95%         89%      90%
                      ------------- -------- ------------- -------- --------
  Total High-
   Specification
   Floaters                81%         79%        67%         77%      68%
  Midwater Floaters        65%         52%        55%         58%      56%
  High-Specification
   Jackups                 84%         83%        66%         82%      50%
                      ------------- -------- ------------- -------- --------
Total continuing
 operations                77%         72%        63%         72%      63%
                      ------------- -------- ------------- -------- --------

Discontinued
 Operations:
  Standard Jackups         66%         56%        49%         57%      46%
  Other Rigs               100%       100%        100%        99%      60%
                      ------------- -------- ------------- -------- --------
Total discontinued
 operations                67%         57%        50%         58%      46%
                      ------------- -------- ------------- -------- --------

                      ------------- -------- ------------- -------- --------
Total Drilling Fleet       73%         66%        58%         67%      56%
                      ============= ======== ============= ======== ========

(2) Utilization is defined as the total actual number of revenue earning
 days in the period as a percentage of the total number of calendar days in
 the period for all drilling rigs in our fleet.




                                      Revenue Efficiency(3)
                            Trailing Five Quarters and Historical Data
                     -------------------------------------------------------

                     3Q 2012 2Q 2012 1Q 2012 4Q 2011 3Q 2011 FY 2011 FY 2010
                     ------- ------- ------- ------- ------- ------- -------

Ultra Deepwater       95.8%   92.2%   89.4%   89.5%   86.4%   87.7%   88.6%
Deepwater             93.5%   92.1%   83.2%   88.1%   87.7%   89.4%   90.3%
Harsh Environment
 Floaters             95.5%   98.1%   97.8%   98.0%   94.4%   97.4%   96.0%
Midwater Floaters     89.7%   87.4%   90.8%   94.2%   90.8%   92.6%   92.5%
High Specification
 Jackups              97.3%   94.5%   92.5%   93.4%   96.8%   94.8%   94.6%
                     ------- ------- ------- ------- ------- ------- -------
Total continuing
 operations           94.3%   92.1%   89.9%   91.3%   88.5%   90.1%   90.8%
                     ------- ------- ------- ------- ------- ------- -------

Standard Jackups      95.4%   97.4%   97.9%   96.6%   98.3%   97.8%   97.4%
Others                99.1%   99.4%   97.3%   98.6%   99.5%   98.7%   98.4%
                     ------- ------- ------- ------- ------- ------- -------
Total discontinued
 operations           95.5%   97.5%   97.9%   96.6%   98.3%   97.8%   97.4%
                     ------- ------- ------- ------- ------- ------- -------

                     ------- ------- ------- ------- ------- ------- -------
Total Fleet           94.5%   92.5%   90.6%   91.9%   89.5%   90.9%   91.7%
                     ======= ======= ======= ======= ======= ======= =======

(3) Revenue efficiency is defined as actual revenue divided by the highest
 amount of total revenue which could have been earned during the relevant
 period(s).




                      TRANSOCEAN LTD. AND SUBSIDIARIES
                  SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS
                   (In US$ millions, except percentages)



                           Three months ended           Nine months ended
                     ------------------------------  ----------------------
                      September   June    September   September   September
                         30,       30,       30,         30,         30,
                        2012      2012      2011        2012        2011
                     ----------  ------  ----------  ----------  ----------

Income (loss) from
 continuing
 operations before
 income taxes        $      630  $ (321) $       77  $      422  $      540
  Add back
   (subtract):
  Litigation matters          8     750           -         758           -
  Acquisition costs           -       -           5           1           5
  Gain on disposal
   of other assets,
   net                      (51)      -           -         (51)          -
  Loss on impairment
   of goodwill and
   other assets               -       -           -         210           -
  Loss on redeemed
   noncontrolling
   interest                   -      14           -          25           -
  Loss on forward
   exchange contract          -       -          78           -          78
  Gain on sale of
   equity method
   investment                 -       -         (13)          -         (13)
  Other, net                 (1)      -           -          (2)          6
                     ----------  ------  ----------  ----------  ----------
Adjusted income from
 continuing
 operations before
 income taxes               586     443         147       1,363         616

Income tax (benefit)
 expense from
 continuing
 operations                 104     (16)         93          96         211
    Add back
     (subtract):
    Litigation
     matters                  2       -           -           2           -
    Gain on disposal
     of other assets         (3)      -           -          (3)          -
    Loss on
     impairment               -       -           -          30           -
    Changes in
     estimates (1)          (14)    141           7         154         (23)
    Other, net                -       -           -           -           2
                     ----------  ------  ----------  ----------  ----------
Adjusted income tax
 expense from
 continuing
 operations (2)      $       89  $  125  $      100  $      279  $      190
                     ==========  ======  ==========  ==========  ==========

Effective Tax Rate
 (3)                       16.5%    5.0%      120.8%       22.7%       39.1%

Annual Effective Tax
 Rate (4)                  15.2%   28.2%       68.0%       20.5%       30.8%

(1) Our estimates change as we file tax returns, settle disputes with tax
 authorities or become aware of other events and include changes in (a)
 deferred taxes, (b) valuation allowances on deferred taxes and (c) other
 tax liabilities.
(2) The three and nine months ended September 30, 2012 includes $(31)
 million of additional tax expense (benefit) reflecting the catch-up effect
 of an increase (decrease) in the annual effective tax rate from the
 previous quarter estimate.
(3) Effective Tax Rate is income tax expense divided by income before
 income taxes.
(4) Annual Effective Tax Rate is income tax expense excluding various
 discrete items (such as changes in estimates and tax on items 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       QTR       YTD       QTR       QTR
Adjusted Net Income        09/30/12  09/30/12  06/30/12  06/30/12  03/31/12
                           --------  --------  --------  --------  --------
Net income (loss)
 attributable to
 controlling interest, as
 reported                  $   (675) $   (381) $   (294) $   (304) $     10
  Add back (subtract):
    Litigation matters          756         6       750       750         -
    Loss on impairment of
     goodwill and other
     assets                     180         -       180         -       180
    Gain on disposal of
     assets, net                (48)      (48)        -         -         -
    Loss on redeemed
     noncontrolling
     interest                    25         -        25        14        11
    Loss on impairment of
     discontinued
     operations                 911       878        33        12        21
    (Gain) loss on sale of
     discontinued
     operations                 (70)        -       (70)      (72)        2
    Loss from discontinued
     operations                 152        30       122        58        64
    Discrete tax items and
     other, net                (154)       14      (168)     (141)      (27)
                           --------  --------  --------  --------  --------
Net income, as adjusted    $  1,077  $    499  $    578  $    317  $    261
                           ========  ========  ========  ========  ========

Diluted Earnings Per Share
Diluted earnings (loss)
 per share, as reported    $  (1.90) $  (1.06) $  (0.83) $  (0.85) $   0.03
  Add back (subtract):
    Litigation matters         2.12      0.02      2.12      2.09         -
    Loss on impairment of
     goodwill and other
     assets                    0.50         -      0.51         -      0.51
    Gain on disposal of
     assets, net              (0.13)    (0.13)        -         -         -
    Loss on redeemed
     noncontrolling
     interest                  0.07         -      0.07      0.04      0.03
    Loss on impairment of
     discontinued
     operations                2.56      2.43      0.09      0.03      0.06
    (Gain) loss on sale of
     discontinued
     operations               (0.19)        -     (0.20)    (0.20)     0.01
    Loss from discontinued
     operations                0.42      0.08      0.34      0.16      0.18
    Discrete tax items and
     other, net               (0.44)     0.03     (0.47)    (0.39)    (0.08)
                           --------  --------  --------  --------  --------
Diluted earnings per
 share, as adjusted        $   3.01  $   1.37  $   1.63  $   0.88  $   0.74
                           ========  ========  ========  ========  ========

Adjusted Net    YTD      QTR      YTD      QTR      YTD       QTR     QTR
 Income       12/31/11 12/31/11 09/30/11 09/30/11 06/30/11 06/30/11 03/31/11
              -------- -------- -------- -------- -------- -------- --------
Net income
 (loss)
 attributable
 to
 controlling
 interest, as
 reported     $(5,754) $(6,165) $   411  $   (32) $   443  $    124 $   319
 Add back
  (subtract):
  Litigation
   matters      1,000    1,000        -        -        -         -       -
  Acquisition
   costs           22       17        5        5        -         -       -
  Loss on
   impairment
   of
   goodwill
   and other
   assets       5,201    5,201        -        -        -         -       -
  Gain on
   disposal
   of assets,
   net            (13)       -      (13)     (13)       -         -       -
  Loss on
   marketable
   security        13       13        -        -        -         -       -
  Loss on
   forward
   exchange
   contract        78        -       78       78        -         -       -
  Loss on
   impairment
   of
   discontinued
   operations      34        4       30        5       25        25       -
  (Gain) loss
   on sale of
   discontinued
   operations    (201)     (24)    (177)       -     (177)        1    (178)
  Loss from
   discontinued
   operations      86       55       31        -       31        11      20
  Discrete
   tax items
   and other,
   net             16      (10)      26       (7)      33        14      19
              -------  -------  -------  -------  -------  -------- -------
Net income,
 as adjusted  $   482  $    91  $   391  $    36  $   355  $    175 $   180
              =======  =======  =======  =======  =======  ======== =======

Diluted
 Earnings Per
 Share
Diluted
 earnings
 (loss) per
 share, as
 reported     $(17.88) $(18.76) $  1.28  $ (0.10) $  1.38  $   0.38 $  0.99
 Add back
  (subtract):
  Litigation
   matters       3.11     3.04        -        -        -         -       -
  Acquisition
   costs         0.07     0.05     0.02     0.02        -         -       -
  Loss on
   impairment
   of
   goodwill
   and other
   assets       16.15    15.83        -        -        -         -       -
  Gain on
   disposal
   of assets,
   net          (0.04)       -    (0.04)   (0.04)       -         -       -
  Loss on
   marketable
   security      0.04     0.04        -        -        -         -       -
  Loss on
   forward
   exchange
   contract      0.24        -     0.24     0.24        -         -       -
  Loss on
   impairment
   of
   discontinued
   operations    0.11     0.01     0.09     0.02     0.08      0.08       -
  (Gain) loss
   on sale of
   discontinued
   operations   (0.62)   (0.07)   (0.53)       -    (0.54)        -   (0.55)
  Loss from
   discontinued
   operations    0.27     0.17     0.09        -     0.10      0.04    0.06
  Discrete
   tax items
   and other,
   net           0.04    (0.03)    0.07    (0.03)    0.09      0.05    0.06
              -------  -------  -------  -------  -------  -------- -------
Diluted
 earnings per
 share, as
 adjusted     $  1.49  $  0.28  $  1.22  $  0.11  $  1.11  $   0.55 $  0.56
              =======  =======  =======  =======  =======  ======== =======

Note: 2010 has been removed pending restatement for discontinued
 operations.

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