TRANSOCEAN LTD. AND SUBSIDIARIES

INDEX TO ANNUAL REPORT ON FORM 10‑K

FOR THE YEAR ENDED DECEMBER 31, 20152018

Forward‑Looking Information

The statements included in this annual report regarding future financial performance and results of operations and other statements that are not historical facts are forward‑looking statements within the meaning of Section 27A of the United States (“U.S.”) Securities Act of 1933 as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).1934.  Forward‑looking statements in this annual report include, but are not limited to, statements about the following subjects:

Forward‑looking statements in this annual report are identifiable by use of the following words and other similar expressions:

Such statements are subject to numerous risks, uncertainties and assumptions, including, but not limited to:

The foregoing risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward‑looking statements.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.  All subsequent written and oral forward‑looking statements attributable to us 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.  We expressly disclaim any obligations or undertaking to release publicly any updates or revisions to any forward‑looking statement to reflect any change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any forward‑looking statement is based, except as required by law.

PART I

Item 1.Business1.Business

Overview

Transocean Ltd. (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,” the “Company,” “we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas wells.  As of February 11, 2016,2019, we owned or had partial ownership interests in and operated 61a fleet of 49 mobile offshore drilling units.units, consisting of 31 ultra‑deepwater floaters, 14 harsh environment floaters and four midwater floaters.  As of February 11, 2016, our fleet consisted of 28 ultra‑deepwater floaters, seven harsh environment floaters, five deepwater floaters,  11 midwater floaters and 10 high‑specification jackups.  At February 11, 2016,2019, we also had sixwere constructing (i) four additional ultra‑deepwater drillships and five high‑specification jackups under construction or under contract to be constructed.(ii) one additional harsh environment semisubmersible, in which we hold a partial ownership interest.

Our primary business is to contract our drilling rigs, related equipment and work crews predominantly on a dayrate basis to drill oil and gas wells.  We specialize in technically demanding regions of the global offshore drilling business with a particular focus on ultra‑deepwater and harsh environment drilling services.  We believe ourOur mobile offshore drilling fleet is one of the most versatile fleets in the world, consisting of floatersdrillship and high‑specification jackupssemisubmersible floaters used in support of offshore drilling activities and offshore support services on a worldwide basis.

Transocean Ltd. is a Swiss corporation with its registered office in Steinhausen, Canton of Zug and with principal executive offices located at Chemin de Blandonnet 10, 1214 Vernier,Turmstrasse 30, 6312 Zug, Switzerland.  Our telephone number at that address is +41 22 930‑9000.41 749‑0500.  Our shares are listed on the New York Stock Exchange (“NYSE”) under the symbol “RIG” and on the SIX Swiss Exchange (“SIX”) under the symbol “RIGN” (see “—Recent Developments”).“RIG.”  For information about the revenues, operating income, assets and other information related to our business, our segments and the geographic areas in which we operate, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 22—20—Operating Segments, GeographicalGeographic Analysis and Major Customers.”

Recent Developments

Business combinations—On November 23, 2015,January 30, 2018, we announcedacquired an approximate 97.7 percent ownership interest in Songa Offshore SE, a European public company limited by shares, or societas Europaea, existing under the laws of Cyprus (“Songa”).  On March 28, 2018, we acquired the remaining shares not owned by us through a compulsory acquisition under Cyprus law, and as a result, Songa became our intent to delist ourwholly owned subsidiary.  To complete these transactions, we issued 68.0 million shares fromand $863 million aggregate principal amount of 0.50% exchangeable senior bonds due January 30, 2023.  As a result of the SIX,acquisition, we acquired seven mobile offshore drilling units, including five harsh environment floaters and on December 17, 2015, we announced that the SIX listing authorities approved our application to delist our shares.  Such delisting is expected to become effective on March 31, 2016, with the last trading day scheduled to be March 30, 2016.  Our shares will continue to be listed and traded on the NYSE.two midwater floaters.

On October 29, 2015, shareholders at our extraordinary general meeting approved the reduction of the par value of each of our shares to CHF 0.10 from the original par value of CHF 15.00.  The par value reduction became effective as of January 7, 2016 upon registration in the commercial register.

On AugustDecember 5, 2014,2018, we completed an initial public offering to sell a noncontrolling interest in Transocean Partners LLCacquired Ocean Rig UDW Inc. (“Transocean Partners”Ocean Rig”), a consolidated Marshall Islands limited liability company, which trades on the NYSE under the ticker symbol “RIGP”.  Through Transocean Partners Holdings Limited, a Cayman Islands exempted company with limited liability, in a merger transaction, and as a result, Ocean Rig became our wholly owned subsidiary,subsidiary.  To complete the acquisition, we hold the controlling interest with 21.3issued 147.7 million common unitsshares and 27.6 million subordinated units and allmade an aggregate cash payment of $1.2 billion.  As a result of the incentive distribution rights.  acquisition, we acquired (i) 11 mobile offshore drilling units, including nine ultra‑deepwater floaters and two harsh environment floaters, and (ii) the contracts relating to the construction of two ultra‑deepwater drillships.  In February 2019, we committed to plans to sell one ultra‑deepwater floater and one harsh environment floater acquired in the Ocean Rig acquisition.

See “Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 15—Noncontrolling Interest.4—Business Combinations.”

Drilling Fleet

Fleet overview—MostOur drilling fleet of our drilling equipment is suitable for both explorationfloaters consists of drillships and development drilling, and we normally engage in both types of drilling activity.  Likewise, all of our drilling rigssemisubmersibles, which are mobile and can be moved to new locations in response to customer demand.  AllOur drilling equipment is suitable for both exploration and development, and we engage in both types of ourdrilling activity.  Our mobile offshore drilling units are designed to operate in locations away from port for extended periods of time and have living quarters for the crews, a helicopter landing deck and storage space for drill pipe, riser and drilling supplies.  Our drilling fleet can be generally characterized as follows: (1) floaters, including drillships and semisubmersibles, and (2) jackups.

Drillships are generally self‑propelled vessels, shaped like conventional ships, and are the most mobile of the major rig types.  All of ourOur high‑specification drillships are equipped with a computer‑controlled dynamic positioning thruster system,systems, which allows them to maintain position without anchors through the use of their onboard propulsion and station‑keeping systems.  DrillshipsUltra‑deepwater drillships typically have greater deck load and storage capacity than early generation semisubmersible rigs, which provides logistical and resupply efficiency benefits for customers.  Drillships are generally better suited to operations in calmer sea conditions and typically do not operate in areas considered to be harsh environments.  We have 1325 ultra‑deepwater drillships in operation that are, and sixfour ultra‑deepwater drillships under construction that will be, equipped with our patented dual‑activity technology.  Dual‑activity technology employs structures, equipment and techniques using two drilling stations within a dual derrick to allow these drillships to perform simultaneous drilling tasks in a parallel, rather than a sequential manner, reducingwhich reduces critical path activity to improveand improves efficiency in both exploration and development drilling.  In addition to dynamic positioning thruster systems, dual‑activity technology and industry‑leading hoisting capacity, and a second blowout preventer system, fourone of our six newbuild drillships under construction, which was recently contracted, will be outfittedequipped with and another newbuild drillship will be equipped to accommodate a future upgrade to atwo 20,000 pounds per square inch (“psi”) blowout preventer.preventers.

Semisubmersibles are floating vessels that can be partially submerged by means of a water ballast system such that the lower column sections and pontoons are below the water surface during drilling operations.  These rigsSemisubmersibles are known for stability, making them well suited for operating in rough sea conditions.  Semisubmersible floaters are capable of maintaining their position over a well either through dynamic positioning or the use of an anchoring system or a computer‑controlled dynamic positioning thruster system.mooring systems.  Although most semisubmersible rigs are relocated with the assistance of tugs, some units are self‑propelled and move between locations under their own power when afloat on pontoons.  Typically,Five of our 22 semisubmersibles are capableequipped with dual‑activity technology and also have mooring capability.  Two of operating in rougher sea conditions than drillships.  We have twothese five dual-activity units are custom‑designed, high‑high capacity dual‑activity semisubmersible drilling rigs, equipped for year‑round operations in harsh environments, including those of the Norwegian continental shelf and sub‑Arctic waters.  We have three semisubmersibles, which are designed for mild environments and are equipped with the unique tri‑act derrick.  The tri‑act derrick was designed to reduce overall well construction costs, as it allows offline tubular and riser handling operations to occur at two sides of the derrick while the center portion of the derrick is being used for normal drilling operations through the rotary table.  Additionally, five of our 30 semisubmersibles are equipped with our patented dual‑activity technology.

Jackup rigs are mobile self‑elevating drilling platforms equipped with legs that can be lowered to the ocean floor until a foundation is established to support the drilling platform.  Once a foundation is established, the drilling platform is then jacked further up the legs so that the platform is above the highest expected waves.  These rigs are generally suited for water depths of 400 feet or less.  We have five newbuild high‑specification jackups under construction that are expected to be capable of constructing wells up to 35,000 feet deep and feature advanced offshore drilling technology, including offline tubular handling features and simultaneous operations support.

Fleet categories—We further categorize the drilling units of our fleet as follows: (1) “ultra‑deepwater floaters,” (2) “harsh environment floaters,” (3) “deepwater floaters,” (4) “midwater floaters” and (5) “high‑specification jackups.”

(3) “midwater floaters”.  Ultra‑deepwater floaters are equipped with high‑pressure mud pumps and are capable of drilling in water depths of 7,5004,500 feet or greater.  Harsh environment floaters are capable of drilling in harsh environments in water depths between 1,500 and 10,000 feet and have greater displacement, which offers larger variable load capacity, more useable deck space and better motion characteristics.  Deepwater floaters are generally those other semisubmersible rigs and drillships capable of drilling in water depths between 4,500 and 7,500 feet.  Midwater floaters are generally comprised of those non‑high‑specification semisubmersibles that have a water depth capacity of less than 4,500 feet.  High‑specification jackups have high capacity derricks, drawworks, mud systems and storage and generally have a water depth capacity of between 350 and 400 feet.

As of February 11, 2016,2019, we owned and operated a fleet of 6149 rigs, excluding rigsfive newbuilds under construction, as follows:

Fleet status—Depending on market conditions, we may idle or stack non‑contracted rigs.  An idle rig is between drilling contracts, readily available for operations, and operating costs are typically at or near normal operating levels.  A stacked rig typically has reduced operating costs, is staffed by a reduced crew or has no crew and is (a) preparing for an extended period of inactivity, (b) expected to continue to be inactive for an extended period, or (c) completing a period of extended inactivity.  Stacked rigs will continue to incur operating costs at or above normal operating levels for approximately 30 to 60 days following initiation of stacking.  Some idle rigs and all stacked rigs require additional costs to return to service.  The actual cost to return to service, which in many instances could be significant and could fluctuate over time, depends upon various factors, including the availability and cost of shipyard facilities, the cost of equipment and materials and the extent of repairs and maintenance that may ultimately be required.  We consider these factors, together with market conditions, length of contract, dayrate and other contract terms, when deciding whether to return a stacked rig to service.  We may from time to time, consider marketing stacked rigs as accommodation units or for other alternative uses until drilling activity increases and we obtain drilling contracts for these units.  We may not return some stacked rigs to work for drilling services or for these alternative uses.services.

Drilling units—The following tables, presented as of February 11, 2016,2019, provide certain specifications for our rigs.  Unless otherwise noted, the stated location of each rig indicates either the current drilling location, if the rig is operating, or the next operating location, if the rig is in shipyard with a follow‑on contract.  The dates provided represent the expected time of completion, the year placed into service, and, if applicable, the year of the most recent upgrade.  As of February 11, 2016,2019, we owned all of the drilling rigs in our fleet noted in the tables below, except for the following: (1) those specifically described as beingthe harsh environment floater Transocean Norge, which is under construction and owned through our interests33.0 percent ownership interest in consolidated entities that were less than wholly ownedOrion Holdings (Cayman) Limited, and (2) the ultra‑deepwater floater Petrobras 10000, which is subject to a capital lease through August 2029.

(a)To be dynamically positioned.

(b)To be equipped with our patented dual activity.

(c)To be equipped with two blowout preventers.

(d)Designed to accommodate a future upgrade to 20,000 pounds psi blowout preventers.

(e)To be equipped with two 20,000 pounds psi blowout preventers.

(f)To be equipped with mooring equipment.

Rigs under construction (11)

“HSD” means high‑specification drillship.

Ultra‑deepwater floaters (28)

“HSD” means high‑specification drillship.

“HSS” means high‑specification semisubmersible.

Markets

Our operations are geographically dispersed in oil and gas exploration and development areas throughout the world.  We operate in a single, global offshore drilling market, as our drilling rigs are mobile assets and are able to be moved according to prevailing market conditions.  We may mobilize our drilling rigs between regions for a variety of reasons, including to respond to customer contracting requirements or to capture demand in another locale.  Consequently, we cannot predict the percentage of our revenues that will be derived from particular geographic or political areas in future periods.

As of February 11, 2016,2019, our drilling fleet, including stacked and idle rigs, but excluding rigs under construction, was located in the U.K.Norwegian North Sea (13(nine units), the United States (“U.S.”) Gulf of Mexico (10(seven units), Trinidad (seven(six units), NorwayGreece (five units), Brazil (fourUnited Kingdom (“U.K.”) North Sea (five units), Angola (three(two units), Thailand (threeCanada (two units), India (two units), Malaysia (two units), NigeriaSpain (two units), Australia (one unit), CanadaBrazil (one unit), GabonBrunei (one unit), China (one unit), Equatorial Guinea (one unit), Ivory Coast (one unit), MyanmarMalaysia (one unit), Romania (one unit), Singapore (one unit), South Africa (one unit), SpainMexican Gulf of Mexico (one unit) and United Arab EmiratesRomania (one unit).

We categorize the market sectors in which we operate as follows: (1) ultra-deepwater and deepwater, (2) deepwater,harsh environment and (3) midwater and (4) jackup.  The ultra‑deepwater, deepwater and midwatermidwater.  These market sectors, collectively known as the floater market, are serviced by our drillships and semisubmersibles, seven14 of which are suited to work in harsh environments.  We generally view the ultra-deepwater and deepwater market sector as water depths beginning at 7,5004,500 feet and extending to the maximum water depths in which rigs are capable of drilling, which is currently up to 12,000 feet.  The deepwater market sector services water depths beginning at approximately 4,500 feet to approximately 7,500 feet, and the midwater market sector services water depths from approximately 300 feet to approximately 4,500 feet.  The jackupharsh environment market sector begins at the outer limit of the transition zone, which is characterizedservices regions that are more challenged by coastallower temperatures, harsher weather conditions and state water areas, extending to water depths of approximately 400 feet.currents.

The market for offshore drilling rigs and associatedrelated services reflects oil companies’ demand for equipment for drilling exploration, appraisal and development wells and for performing maintenance on existing production wells.    Activity levels of exploration and production (“E&P”) companies and their associated capital expenditures are largely driven by the worldwide demand for energy, including crude oil and natural gas.  Worldwide energy supply and demand drives oil and natural gas prices, which, in turn, impact E&P companies’ ability to fund investments in exploration, development and production activities.

At present,In recent years, the industry is experiencinghas experienced a severe, prolonged cyclical downturn.  SustainedMultiple years of volatile and generally weak commodity pricing hasprices have resulted in our customers delaying offshore investment decisions and postponing exploration and production programs.  OilStructural efficiency gains implemented by industry participants in reaction to the downturn have given customers more flexibility to progress exploration and natural gasdevelopment plans in a lower commodity pricing environment, which resulted in increased customer project sanctioning in 2018.  We anticipate this trend of increased project sanctioning to continue in 2019 as our customers realize improved offshore economics, making them less sensitive to market volatility, and sharpening their focus on exploration and reserve replacement.  In markets requiring harsh environment floating drilling rigs, such as the Norwegian North Sea and eastern Canada, the limited supply of these specialized rigs has resulted in improved fleet utilization, which has caused increased dayrates on high‑specification rigs being tendered for new work over the past year.  Outside of harsh environment markets, however, persistent excess supply of ultra‑deepwater floaters relative to demand has delayed improvement of dayrates.  As the hydrocarbon supply‑demand balance improves, we expect sustained improvement of oil prices, do not currently support sustainedultimately resulting in greater demand for ultra‑deepwater drilling rigs across alland improvement of dayrates.

Our recent acquisitions of Songa and Ocean Rig have significantly enhanced our high‑specification asset classes and regions.  As a result of this reduced demand,portfolio.  The Songa acquisition improved our fleet profile with harsh environment units for which we have already seen a sharp declineimproved demand.  The Ocean Rig acquisition further improved our fleet profile by adding high‑specification ultra‑deepwater units that we expect to be in high demand as the execution of drilling contracts formarket improves and the global offshore drilling industry continues to prioritize the most modern and capable assets.  We have also made concerted efforts since the beginning of the downturn to high‑grade our fleet and an unprecedented levelthrough divestment of early drilling contract terminations.  We currently expect very few drilling contracts to be awarded in 2016, exacerbating the excess rig capacity and resulting in continued downward pressure on dayrates.  In this environment, older and less capable assets are more likely to be permanently retired, ultimately reducing the available supply of drilling rigs.lower‑specification assets.  During the years ended December 31, 20152018, 2017 and 2014,2016, we sold 17for scrap value eight, three and two11 drilling units, respectively, for scrap value, and at December 31, 2015,2018, we havehad five additional rigs classified as held for sale for scrap value.

Despite current market conditions,Longer term, our long‑term outlook for the offshore drilling sector remains positive, particularly for high‑specification assets.  Prior to the downturn, Brazil, the U.S. Gulf of Mexico, and West Africa emerged as key ultra‑deepwater market sectors, and licensing activity demonstrated an increased interest in deepwater fields as E&P companies looked to explore new prospects.  We expect deepwater oil and gas production will continue to be a part of the long‑term strategy for E&P companies as they strive to replace reserves to meet global demand for hydrocarbons replacing reserves.  A number of new deepwater and ultra‑deepwater development opportunities have been identified globally.  If commodity prices stabilize and rebound to sustainable levels,hydrocarbons.  As our customers implement the structural efficiency gains, we anticipate that many of theadditional projects will receive approval to move forward.  Many ofbe approved.  Typically, these projects are technically demanding due to factors such as water depth, complex well designs, deeper drilling depth, high pressure and temperature, sub‑salt, harsh environments, and heightened regulatory standards; therefore, they require sophisticated drilling units.  Generally, ultra‑deepwater rigs are the most modern, technologically advanced class of the offshore fleet and have capabilities that are attractive to exploration and productionE&P companies operating in deeper water depths, or other challenging environments or with complex well designs.

Financial Information about Geographic Areas

The following table presents the geographic areas in which  See “Item 1A. Risk Factors—Risks related to our operating revenues were earned (in millions):business.”

zero ratesrate for periods of mobilization or when drilling operations are interrupted or restricted by equipment breakdowns, adverse environmental conditions or other conditions beyond our control.

A dayrate drilling contract generally extends over a period of time covering either the drilling of a single well or group of wells or covering a stated term.  At December 31, 2015, the2018, our contract backlog was approximately $16.0$12.5 billion, representing a decreasean increase of 2932 percent and 43seven percent, respectively, compared to the contract backlog at December 31, 20142017 and 2013,2016, which was $22.5$9.5 billion and $28.2$11.7 billion, respectively.  See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Drilling market” and “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Performance and Other Key Indicators.”

Certain of our drilling contracts with customers may be cancelable for the convenience of the customer upon payment of an early termination payment.  Such payments, however, may not fully compensate us for the loss of the contract.  Contracts also customarily provide for either automatic termination or termination at the option of the customer, typically without the payment of any termination fee, under various circumstances such as non‑performance, in the event of extended downtime or impaired performance caused by equipment or operational issues, or periods of extended downtime due to force majeure events.  Many of these events are beyond our control.  The contract term in some instances may be extended by the customer exercising options for the drilling of additional wells or for an additional term.  Our contracts also typically include a provision that allows the customer to extend the contract to finish drilling a well‑in‑progress.  During periods of depressed market conditions, our customers may seek to renegotiate firm drilling contracts to reduce the term of their obligations or the average dayrate through term extensions, or may seek to repudiate their contracts.  Suspension of drilling contracts will result in the reduction in or loss of dayrate for the period of the suspension.  If our customers cancel some of our contracts and we are unable to secure new contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a number of our contracts are renegotiated, it could adversely affect our consolidated financial position, results of operations or cash flows.  See “Item 1A. Risk Factors—Risks related to our business—Our drilling contracts may be terminated due to a number of events.events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts.”

ConsistentUnder dayrate drilling contracts, consistent with standard industry practice, our customers, as the operators, generally assume, and indemnify us against,grant indemnity for, subsurface and well control risks, and subsurface risks under dayrate drilling contracts.their consequential damages.  Under all of our current drilling contracts, our customers, as the operators, indemnify us for pollution damages in connection with reservoir fluids stemming from operations under the contract, and we indemnify the operatorour customers for pollution that originates above the surface of the water from the rig from substances in our control, that originate from the rig, such as diesel used onboard the rig or other fluids stored onboard the rig and above the water surface.rig.  Also, under all of our current drilling contracts, the operator indemnifiescustomers indemnify us againstfor consequential damages they incur, damage to the well or reservoir, and loss of subsurface oil and gas and the cost of bringing the well under control.  However, our drilling contracts are individually negotiated, and the degree of indemnification we receive from our customers for the operator against the liabilitiesrisks discussed above canmay vary from contract to contract, based on market conditions and customer requirements existing when the contract was negotiated.  In some instances, we have contractually agreed upon certain limits to our indemnification rights and can be responsible for damages up to a specified maximum dollar amount, which is, in any case, immaterial to us.amount.  The nature of our liability and the prevailing market conditions, among other factors, can influence such contractual terms.  In most instances in which we are indemnified for damages to the well, we have the responsibility to redrill the well at a reduced dayrate.  Notwithstanding a contractual indemnity from a customer, there can be no assurance that our customers will be financially able to indemnify us or will otherwise honor their contractual indemnity obligations.  See “Item 1A. Risk Factors—Risks related to our business—Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations.”

The interpretation and enforceability of a contractual indemnity depends upon the specific facts and circumstances involved, as governed by applicable laws, and may ultimately need to be decided by a court or other proceeding, which will need to consider the specific contract language, the facts and applicable laws.  The law generally considers contractual indemnity for criminal fines and penalties to be against public policy.  Courts also restrict indemnification for criminal fines and penalties.  The inability or other failure of our customers to fulfill their indemnification obligations, or unenforceability of our contractual protections could have a material adverse effect on our

and Australia and Brazil are represented by, and some of our contracted labor work under,is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiation.  These negotiations could result in higher personnel expenses, other increased costs or increased operational restrictions, as the outcome of such negotiations apply toaffect the market for all offshore employees not just the union members.  Additionally, failure to reach agreement on certain key issues may result in strikes, lockouts or other work stoppages that may materially impact our operations.

Legislation has been introduced in the U.S. Congress that could encourage additional unionization efforts in the U.S., as well as increase the chances that such efforts succeed. Additional unionization efforts, if successful, new collective bargaining agreements or work stoppages could materially increase our labor costs and operating restrictions.

Joint Venture, Agency and Sponsorship Relationships and Other Investments

As of December 31, 2015, we held a 70.9 percent limited liability company interest in Transocean Partners.  On August 5, 2014, we completed the initial public offering of 20.1 million common units of Transocean Partners, which trades on the NYSE under the ticker symbol “RIGP.”  During the year ended December 31, 2015, Transocean Partners repurchased 91,500 common units under its unit repurchase program, and at December 31, 2015, 20.0 million publicly traded common units remained outstanding.  We hold the remaining 21.3 million common units and 27.6 million subordinated units of Transocean Partners and all of its incentive distribution rights.

Additionally, inIn some areas of the world, local customs and practice or governmental requirements necessitate the formation of joint ventures with local participation.  We may or may not control these joint ventures.  We are an active participant in several joint venture drilling companies, principally in Angola, Indonesia, Malaysia and Nigeria.  Localparticipation since local laws or customs in somethose areas of the world also effectively mandate the establishment of a relationship with a local agent or sponsor.  When appropriate in these areas, we enter into agency or sponsorship agreements.  Some of theWe may also enter into joint ventures for operational or investment purposes.  We may or may not control these joint ventures.  We participate in several joint venture companies, principally in the Cayman Islands, Angola, Indonesia, Malaysia and Nigeria.  At December 31, 2018, we held interests in certain joint venture companies in the Cayman Islands, Angola, Indonesia, Malaysia, Nigeria and other countries, the most significant of which we participate arewere as follows:

We hold a 6533.0 percent ownership interest in ADDCL, a consolidatedOrion Holdings (Cayman) Limited, an unconsolidated Cayman Islands joint ventureexempted company formed to construct and own the newbuild harsh environment semisubmersible Discoverer LuandaTransocean Norge, which operates in Angola..  Our local partner, Angco Cayman Limited, a Cayman Islands company, holdspartners, certain affiliates of Hayfin Capital Management LLP, own the remaining 3567.0 percent ownership interest in ADDCL.  Beginning January 31, 2016, Angco Cayman Limited will have the right to exchange its interest in the joint venture for cash at an amount based on an appraisal of the fair value of the drillship, subject to certain adjustments.

We hold a 70 percent interest in TDSOI, a consolidated British Virgin Islands joint venture company formed to own Transocean Honor, which operates in Angola.  Our local partner, Angco II, a Cayman Islands company, holds the remaining 30 percent interest in TDSOI.  Under certain circumstances, Angco II will have the right to exchange its interest in the joint venture for cash at an amount based on an appraisal of the fair value of the jackup, subject to certain adjustments.not owned by us.

We hold a 24 percent direct interest and a 36 percent indirect interest in Indigo Drilling Limited (“Indigo”), a consolidated Nigerian joint venture company formed to engage in drilling operations offshore Nigeria.  Our local partners, Mr. Fidelis Oditah and Mr. Chima Ibeneche, each hold a 12.5 percent direct interest, and our other partners, Mr. Joseph Obi and Mr. Ben Osuno, together own a 15 percent indirect interest in Indigo.

Additionally, we hold interests in certain joint venture companies in Angola, Indonesia, Malaysia and Nigeria that have been formed to perform certain management services and other onshore support services for our operations.

Available Information

Our website address is www.deepwater.com.  Information contained on or accessible from our website is not incorporated by reference into this annual report on Form 10‑K and should not be considered a part of this report or any other filing that we make with the U.S. Securities and Exchange Commission (the “SEC”(“SEC”).  We make available on this website free of charge, our annual reports on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials to, the SEC.  You may also find on our website information related to our corporate governance, board committees and company code of business conduct and ethics.  The SEC also maintains a website, www.sec.gov, which contains reports, proxy statements and other information regarding SEC registrants, including us.

We intend to satisfy the requirement under Item 5.05 of Form 8‑K to disclose any amendments to our Code of Integrity and any waiver from any provision of our Code of Integrity by posting such information in the Governance section ofpage on our website at www.deepwater.com.

and may in the future idle or stack additional rigs or enter into lower dayrate drilling contracts in response to market conditions.  We cannot predict when or if any idledIdled or stacked rigs will return to service.

may remain out of service for extended periods of time.  During prior periods of high dayrates and rig utilization rates, we and other industry participants have responded to increased customer demand by increasing the supply of rigs through ordering the construction of new units.  The number of new units expected to be delivered without contracts, combined with the expected increase in the number of rigs in the global market completing contracts and becoming idle, has intensified and may further intensify price competition.  In periods of low oil and natural gas price

customarily provide for either automatic termination or termination at the option of the customer, typically without the payment of any termination fee, under various circumstances such as non‑performance, as a result of significant downtime or impaired performance caused by equipment or operational issues, or sustained periods of downtime due to force majeure events.  Many of these events are beyond our control.  During periods of depressed market conditions, we are subject to an increased risk of our customers seeking to repudiate their contracts, including through claims of non‑performance.  We are at continued risk of experiencing early contract terminations in the currenta weak commodity price environment as operators look to reduce their capital expenditures.  During the yearyears ended December 31, 2015,2017 and 2016, our customers early terminated or cancelled contracts for Discoverer Americas,  Polar Pioneer,  Sedco 714,  SedcoEnergyone and Transocean Spitsbergen, and theseeight of our rigs, currently remain idle.  Subsequent to December 31, 2015, we received notices of early termination or cancellation of drilling contracts for Deepwater Champion,  Deepwater Millennium, Discoverer Deep Seas, GSF Constellation II,  GSF Development Driller I and Transocean John Shaw.respectively.  Our customers’ ability to perform their obligations under their drilling contracts, including their ability to fulfill their indemnity obligations to us, may also be negatively impacted by an economic downturn.  Our customers, which include national oil companies, often have significant bargaining leverage over us.  If our customers cancel some of our contracts, and we are unable to secure new contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a number of our contracts are renegotiated, it could adversely affect our consolidated statement of financial position, results of operations or cash flows.  See “Item 1. Business—Contract Drilling Services.”

At February 11, 2016, the contract backlog associated with our continuing operations was approximately $15.5 billion.  This amount represents the firm term of the drilling contract multiplied by the contractual operating rate, which may be higher than the actual dayrate we receive or we may receive other dayrates included in the contract such as waiting on weather rate, repair rate, standby rate or force majeure rate.  The contractual operating dayrate may also be higher than the actual dayrate we receive because of a number of factors, including rig downtime or suspension of operations.

Several factors could cause rig downtime or a suspension of operations, including:

In certain drilling contracts, the dayrate may be reduced to zero or result in customer credit against future dayrate if, for example, repairs extend beyond a stated period of time.  Our contract backlog includes signed drilling contracts and, in some cases, other definitive agreements awaiting contract execution.  We may not be able to realize the full amount of our contract backlog due to events beyond our control.  In addition, some of our customers have experienced liquidity issues in the past and these liquidity issues could be experienced again if commodity prices decline to lower levels for an extended period of time.  Liquidity issues and other market pressures could lead our customers to go into bankruptcy or could encourage our customers to seek to repudiate, cancel or renegotiate these agreements for various reasons (see “—Our drilling contracts may be terminated due to a number of events”).  Our inability to realize the full amount of our contract backlog may have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.