Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 24, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Transocean Ltd. | |
Entity Central Index Key | 1,451,505 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 391,213,324 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating revenues | ||||
Contract drilling revenues | $ 699 | $ 886 | $ 2,142 | $ 2,912 |
Other revenues | 109 | 20 | 202 | 275 |
Total operating revenues | 808 | 906 | 2,344 | 3,187 |
Costs and expenses | ||||
Operating and maintenance | 323 | 409 | 999 | 1,561 |
Depreciation | 197 | 225 | 648 | 667 |
General and administrative | 39 | 41 | 113 | 125 |
Total costs and expenses | 559 | 675 | 1,760 | 2,353 |
Loss on impairment | (1,385) | (11) | (1,498) | (26) |
Gain (loss) on disposal of assets, net | (9) | 9 | (1,602) | 8 |
Operating income (loss) | (1,145) | 229 | (2,516) | 816 |
Other income (expense), net | ||||
Interest income | 21 | 5 | 34 | 15 |
Interest expense, net of amounts capitalized | (112) | (109) | (368) | (296) |
Gain (loss) on retirement of debt | (1) | 110 | (49) | 148 |
Other, net | 6 | 7 | 7 | 9 |
Total other income (expense), net | (86) | 13 | (376) | (124) |
Income (loss) before income tax expense | (1,231) | 242 | (2,892) | 692 |
Income tax expense | 180 | 6 | 103 | 122 |
Net income (loss) | (1,411) | 236 | (2,995) | 570 |
Net income attributable to noncontrolling interest | 6 | 18 | 21 | 35 |
Net income (loss) attributable to controlling interest | $ (1,417) | $ 218 | $ (3,016) | $ 535 |
Earnings (loss) per share | ||||
Earnings (loss) per share (in dollars per share) | $ (3.62) | $ 0.59 | $ (7.72) | $ 1.44 |
Earnings (loss) per share (in dollars per share) | $ (3.62) | $ 0.59 | $ (7.72) | $ 1.44 |
Weighted-average shares outstanding | ||||
Basic (in shares) | 391 | 365 | 391 | 365 |
Diluted (in shares) | 391 | 365 | 391 | 365 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ (1,411) | $ 236 | $ (2,995) | $ 570 |
Net income attributable to noncontrolling interest | 6 | 18 | 21 | 35 |
Net income (loss) attributable to controlling interest | (1,417) | 218 | (3,016) | 535 |
Components of net periodic benefit costs before reclassifications | 8 | (2) | 1 | |
Components of net periodic benefit costs reclassified to net income | 4 | 8 | 12 | 9 |
Other comprehensive income before income taxes | 4 | 16 | 10 | 10 |
Income taxes | (2) | (25) | (3) | |
Other comprehensive income (loss) | 2 | 16 | (15) | 7 |
Other comprehensive income (loss) attributable to controlling interest | 2 | 16 | (15) | 7 |
Total comprehensive income (loss) | (1,409) | 252 | (3,010) | 577 |
Total comprehensive income attributable to noncontrolling interest | 6 | 18 | 21 | 35 |
Total comprehensive income (loss) attributable to controlling interest | $ (1,415) | $ 234 | $ (3,031) | $ 542 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 2,717 | $ 3,052 |
Accounts receivable, net of allowance for doubtful accounts of less than $1 at September 30, 2017 and December 31, 2016 | 663 | 898 |
Materials and supplies, net of allowance for obsolescence of $154 and $153 at September 30, 2017 and December 31, 2016, respectively | 437 | 561 |
Restricted cash | 480 | 466 |
Other current assets | 154 | 121 |
Total current assets | 4,451 | 5,098 |
Property and equipment | 22,599 | 27,372 |
Less accumulated depreciation | (5,117) | (6,279) |
Property and equipment, net | 17,482 | 21,093 |
Deferred income taxes, net | 167 | 298 |
Other assets | 341 | 400 |
Total assets | 22,441 | 26,889 |
Liabilities and equity | ||
Accounts payable | 172 | 206 |
Accrued income taxes | 159 | 95 |
Debt due within one year | 799 | 724 |
Other current liabilities | 755 | 960 |
Total current liabilities | 1,885 | 1,985 |
Long-term debt | 6,501 | 7,740 |
Deferred income taxes, net | 106 | 178 |
Other long-term liabilities | 1,098 | 1,153 |
Total long-term liabilities | 7,705 | 9,071 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 48 | 28 |
Shares, CHF 0.10 par value, 417,060,033 authorized, 143,783,041 conditionally authorized and 394,801,990 issued at September 30, 2017 and December 31, 2016 and 391,211,739 and 389,366,241 outstanding at September 30, 2017 and December 31, 2016, respectively | 37 | 36 |
Additional paid-in capital | 11,020 | 10,993 |
Retained earnings | 2,040 | 5,056 |
Accumulated other comprehensive loss | (298) | (283) |
Total controlling interest shareholders' equity | 12,799 | 15,802 |
Noncontrolling interest | 4 | 3 |
Total equity | 12,803 | 15,805 |
Total liabilities and equity | $ 22,441 | $ 26,889 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Millions | Sep. 30, 2017USD ($)shares | Dec. 31, 2016USD ($)shares |
Materials and supplies, allowance for obsolescence | $ | $ 154 | $ 153 |
Shares, authorized | 417,060,033 | 417,060,033 |
Shares, conditionally authorized | 143,783,041 | 143,783,041 |
Shares, issued | 394,801,990 | 394,801,990 |
Shares, outstanding | 391,211,739 | 389,366,241 |
Maximum | ||
Allowance for doubtful accounts | $ | $ 1 | $ 1 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Millions, $ in Millions | Total controlling interest shareholders' equity | Shares | Additional paid-in capital | Treasury shares, at cost | Retained earnings | Accumulated other comprehensive loss | Noncontrolling interest | Total |
Balance at Dec. 31, 2015 | $ 14,690 | $ 5,193 | $ 5,736 | $ (240) | $ 4,278 | $ (277) | $ 310 | $ 15,000 |
Balance (in shares) at Dec. 31, 2015 | 364 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Share-based compensation | 31 | 31 | 31 | |||||
Reduction of par value | $ (5,159) | 5,159 | ||||||
Cancellation of shares held in treasury | (240) | $ 240 | ||||||
Issuance of shares under share-based compensation plans (in shares) | 1 | |||||||
Allocated capital for transactions with holders of noncontrolling interest | (7) | (7) | 7 | |||||
Net income (loss) attributable to controlling interest | 535 | 535 | ||||||
Other comprehensive income (loss) attributable to controlling interest | 7 | 7 | ||||||
Total comprehensive income attributable to noncontrolling interest | 19 | |||||||
Total comprehensive income (loss) attributable to controlling interest | 542 | 542 | ||||||
Total comprehensive income (loss) | 561 | |||||||
Acquisition of noncontrolling interest | (5) | (5) | ||||||
Distributions to holders of noncontrolling interest | (23) | (23) | ||||||
Other, net | 3 | 3 | 3 | |||||
Balance at Sep. 30, 2016 | 15,259 | $ 34 | 10,682 | 4,813 | (270) | 308 | 15,567 | |
Balance (in shares) at Sep. 30, 2016 | 365 | |||||||
Balance at Dec. 31, 2016 | 15,802 | $ 36 | 10,993 | 5,056 | (283) | 3 | 15,805 | |
Balance (in shares) at Dec. 31, 2016 | 389 | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Share-based compensation | 30 | 30 | 30 | |||||
Issuance of shares under share-based compensation plans | $ 1 | (1) | ||||||
Issuance of shares under share-based compensation plans (in shares) | 2 | |||||||
Net income (loss) attributable to controlling interest | (3,016) | (3,016) | ||||||
Other comprehensive income (loss) attributable to controlling interest | (15) | (15) | ||||||
Total comprehensive income attributable to noncontrolling interest | 1 | |||||||
Total comprehensive income (loss) attributable to controlling interest | (3,031) | (3,031) | ||||||
Total comprehensive income (loss) | (3,030) | |||||||
Other, net | (2) | (2) | (2) | |||||
Balance at Sep. 30, 2017 | $ 12,799 | $ 37 | $ 11,020 | $ 2,040 | $ (298) | $ 4 | $ 12,803 | |
Balance (in shares) at Sep. 30, 2017 | 391 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net income (loss) | $ (2,995) | $ 570 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation | 648 | 667 |
Share-based compensation expense | 30 | 31 |
Loss on impairment | 1,498 | 26 |
Gain (loss) on disposal of assets, net | 1,602 | (8) |
(Gain) loss on retirement of debt | 49 | (148) |
Deferred income tax expense | 32 | 44 |
Other, net | 29 | 11 |
Changes in deferred revenues, net | (109) | (30) |
Changes in deferred costs, net | 42 | 64 |
Changes in other operating assets and liabilities, net | 61 | 51 |
Net cash provided by operating activities | 887 | 1,278 |
Cash flows from investing activities | ||
Capital expenditures | (386) | (1,072) |
Proceeds from disposal of assets, net | 330 | 16 |
Other, net | 10 | |
Net cash used in investing activities | (46) | (1,056) |
Cash flows from financing activities | ||
Proceeds from issuance of debt, net of discounts and issue costs | 403 | 1,210 |
Repayments of debt | (1,629) | (1,316) |
Deposits to cash accounts restricted for financing activities | (78) | (24) |
Proceeds from cash accounts and investments restricted for financing activities | 131 | 124 |
Distribution to holders of noncontrolling interest | (23) | |
Other, net | (3) | 2 |
Net cash used in financing activities | (1,176) | (27) |
Net increase (decrease) in cash and cash equivalents | (335) | 195 |
Cash and cash equivalents at beginning of period | 3,052 | 2,339 |
Cash and cash equivalents at end of period | $ 2,717 | $ 2,534 |
Business
Business | 9 Months Ended |
Sep. 30, 2017 | |
Business | |
Business | Note 1—Business Transocean Ltd. (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,” “we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas wells. We specialize in technically demanding sectors of the offshore drilling business with a particular focus on deepwater and harsh environment drilling services. Our mobile offshore drilling fleet is considered one of the most versatile fleets in the world. We contract our drilling rigs, related equipment and work crews predominantly on a dayrate basis to drill oil and gas wells. At September 30, 2017, we owned or had partial ownership interests in and operated 38 mobile offshore drilling units, including 25 ultra‑deepwater floaters, seven harsh environment floaters, two deepwater floaters and four midwater floaters. At September 30, 2017, we also had four ultra‑deepwater drillships under construction or under contract to be constructed. On August 13, 2017, we entered into a transaction agreement (the “Transaction Agreement”) with Songa Offshore SE, a European public company limited by shares, or societas Europaea, existing under the laws of Cyprus (“Songa”), pursuant to which we will offer to acquire all of the issued and outstanding shares of Songa, subject to certain conditions, through a public voluntary exchange offer (the “Offer”). At September 30, 2017, Songa owned and operated seven mobile offshore drilling units, including four harsh environment floaters and three midwater floaters. See Note 4—Business Combination. On May 31, 2017, we completed the sale of 10 high‑specification jackups and novated the contracts relating to the construction of five high‑specification jackups, together with related assets. At September 30, 2017 we continued to operate two high‑specification jackups that were under contract when we sold the rigs, and we will continue to operate such rigs until completion or novation of the respective drilling contracts. See Note 6—Drilling Fleet. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 2—Significant Accounting Policies Presentation —We have prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S‑X of the U.S. Securities and Exchange Commission. Pursuant to such rules and regulations, these financial statements do not include all disclosures required by accounting principles generally accepted in the U.S. for complete financial statements. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. Such adjustments are considered to be of a normal recurring nature unless otherwise noted. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any future period. The accompanying condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto as of December 31, 2016 and 2015 and for each of the three years in the period ended December 31, 2016, included in our annual report on Form 10‑K filed on March 7, 2017. Accounting estimates —To prepare financial statements in accordance with accounting principles generally accepted in the U.S., we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions, including those related to our allowance for doubtful accounts, materials and supplies obsolescence, property and equipment, assets held for sale, income taxes, contingencies, share‑based compensation, defined benefit pension plans and other postretirement benefits. We base our estimates and assumptions on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from such estimates. Fair value measurements —We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuation techniques require inputs that we categorize using a three‑level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. Capitalized interest —We capitalize interest costs for qualifying construction and upgrade projects and only capitalize interest costs during periods in which progress for the construction projects continues to be underway. As of September 30, 2017, we had ceased capitalization of interest costs on our two uncontracted newbuilds due to a pause in construction progress. In the three and nine months ended September 30, 2017, we capitalized interest costs of $31 million and $91 million, respectively, for construction work in progress. In the three and nine months ended September 30, 2016, we capitalized interest costs of $41 million and $130 million, respectively, for construction work in progress. Reclassifications —We have made certain reclassifications to prior period amounts to conform with the current period’s presentation. Such reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 3—New Accounting Pronouncements Recently adopted accounting standards Stock compensation —Effective January 1, 2017, we adopted the accounting standards update that allows for simplification of the accounting for share‑based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The update is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Our adoption did not have a material effect on our condensed consolidated statements of financial position, operations or cash flows or on the disclosures contained in our notes to condensed consolidated financial statements. Recently issued accounting standards Revenue from contracts with customers —Effective January 1, 2018, we will adopt the accounting standards update that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Given the interaction with the accounting standards update related to leases, we expect to adopt the updates concurrently, effective January 1, 2018. We expect to apply the full retrospective approach to our adoption, which is consistent with the approach we expect to elect under the lease accounting standards update. Our adoption, and the ultimate effect on our consolidated financial statements, will be based on an evaluation of the contract‑specific facts and circumstances. We have determined we have one revenue stream. Although we do not expect material changes to the timing of our revenue recognition relative to current accounting standards, we are still evaluating the allocation of lease and non‑lease components of our revenues and the disclosures that will be contained in our notes to condensed consolidated financial statements. We are continuing to evaluate the requirements and the other effects such requirements may have on our condensed consolidated statements of financial position, operations and cash flows and on the disclosures contained in our notes to condensed consolidated financial statements. Leases —Effective no later than January 1, 2019, we will adopt the accounting standards update that (a) requires lessees to recognize a right to use asset and a lease liability for virtually all leases, and (b) updates previous accounting standards for lessors to align certain requirements with the updates to lessee accounting standards and the revenue recognition accounting standards. The update, which permits early adoption, is effective for interim and annual periods beginning after December 15, 2018, including interim periods within those annual periods. Under the updated accounting standards, we have determined that our drilling contracts contain a lease component, and our adoption, therefore, will require that we separately recognize revenues associated with the lease and services components. Given the interaction with the accounting standards update related to revenue from contracts with customers, we expect to adopt the updates concurrently, effective January 1, 2018 . W e expect to apply the modified retrospective approach to our adoption, which is consistent with the approach we expect to elect under the revenue accounting standards update. Our adoption, and the ultimate effect on our condensed consolidated financial statements, will be based on an evaluation of the contract‑specific facts and circumstances. Although we do not expect material changes to the timing of our revenue recognition relative to current accounting standards, we are still evaluating the allocation of lease and non‑lease components of our revenues and the disclosures that will be contained in our notes to condensed consolidated financial statements. Additionally, based on the lease arrangements under which we are the lessee as of September 30, 2017, we expect to recognize an aggregate lease liability and a corresponding right‑to‑use asset of between $50 million and $70 million. We are continuing to evaluate the requirements with regard to arrangements under which we are the lessor and the other effects such requirements may have on our condensed consolidated statements of financial position, operations and cash flows and on the disclosures contained in our notes to condensed consolidated financial statements. Income taxes —Effective no later than January 1, 2018, we will adopt the accounting standards update that requires an entity to recognize the income tax consequences of an intra‑entity transfer of an asset other than inventory when the transaction occurs as opposed to deferring such recognition into future periods. The update, which permits early adoption, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. We do not expect that our adoption will have a material effect on our condensed consolidated statements of financial position, operations or cash flows or on the disclosures contained in our notes to condensed consolidated financial statements. Statement of cash flows —Effective no later than January 1, 2018, we will adopt the accounting standards update that requires amounts generally described as restricted cash or restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning and end of period total amounts presented on the statement of cash flows. The update, which permits early adoption, is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Aside from presenting the restricted cash and restricted cash equivalents as a component of the beginning and ending cash balances on our condensed consolidated statements of cash flows, we will remove the effect of proceeds from and deposits to restricted accounts from our cash flows provided by or used in operating and financing activities, as applicable. For the nine months ended September 30, 2017 and 2016, such changes would not have had a material effect on our condensed consolidated statements of cash flows. Retirement benefits —Effective no later than January 1, 2018, we will adopt the accounting standards update that requires an employer to disaggregate the service cost component from the other components of net benefit cost related to defined benefit retirement plans and other postemployment benefit plans. The update requires that the service cost component be presented in the same line item as other compensation costs for employees and the other components of net benefit cost in other income and expense on our condensed consolidated statements of operations. The update also allows only the service cost component of net benefit cost to be eligible for capitalization. The update, which permits early adoption, is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. We do not expect that our adoption will have a material effect on our condensed consolidated statements of cash flows or on the disclosures contained in our notes to condensed consolidated financial statements. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2017 | |
Business Combination | |
Business Combination | Note 4—Business Combination On August 13, 2017, we entered into the Transaction Agreement with Songa pursuant to which we will offer to acquire all of the issued and outstanding shares of Songa. As part of the Offer, we agreed to offer to exchange each of the issued and outstanding shares in Songa for consideration, based on a value of NOK 47.50 per Songa share, consisting of (i) 68.6 million newly issued shares of Transocean Ltd., par value CHF 0.10 per share, and (ii) approximately $575 million aggregate principal amount of 0.5% Senior Unsecured Exchangeable Bonds to be issued by Transocean Inc. (the “Exchangeable Bonds”) exchangeable into shares of Transocean Ltd. Additionally, each Songa shareholder may elect to receive a cash payment of NOK 47.50 per Songa share up to a maximum of NOK 125,000 per shareholder in lieu of some or all of the consideration such shareholder would otherwise be entitled to receive in the Offer. The consideration, as presented in the Offer, is based on an equity value of Songa on a fully diluted basis of approximately NOK 9.1 billion and an enterprise value of approximately NOK 26.4 billion, equivalent to approximately $1.2 billion and $3.4 billion, respectively, measured as of the date of the Offer using a currency exchange ratio of NOK 7.9239 to $1.00. We also expect to (i) acquire certain outstanding bonds issued by Songa in exchange for Exchangeable Bonds, and (ii) acquire a $50 million loan made to Songa by one of its shareholders in exchange for Exchangeable Bonds. The consummation of the Offer is subject to the satisfaction of customary closing conditions for transactions of this type. The Exchangeable Bonds will have an exchange ratio equal to 0.7145 times, determined as of the date of the Offer, based on the market price of $8.39 per Transocean Ltd. share and a currency exchange ratio of NOK 7.9239 to $1.00 . The Exchangeable Bonds will mature five years from the date of issuance. Interest is expected to be paid semiannually at 0.5% per annum. We expect to complete the transaction before December 31, 2017. If completed, we will account for the transaction using the acquisition method of accounting, pursuant to which we will record the consideration transferred, the assets acquired and the liabilities assumed at fair value, measured as of the acquisition date. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities | |
Variable Interest Entities | Note 5—Variable Interest Entities Angola Deepwater Drilling Company Limited (“ADDCL”), a consolidated Cayman Islands company, is a variable interest entity for which we are the primary beneficiary. The carrying amount of ADDCL, after eliminating the effect of intercompany transactions, was as follows (in millions): September 30, December 31, 2017 2016 Assets $ 764 $ 787 Liabilities 14 25 Net carrying amount $ 750 $ 762 |
Drilling Fleet
Drilling Fleet | 9 Months Ended |
Sep. 30, 2017 | |
Drilling Fleet | |
Drilling Fleet | Note 6—Drilling Fleet Construction work in progress —For the nine months ended September 30, 2017 and 2016, the changes in our construction work in progress, including capital expenditures and other capital additions, were as follows (in millions): Nine months ended September 30, 2017 2016 Construction work in progress, at beginning of period $ 2,171 $ 3,735 Capital expenditures Newbuild construction program 299 959 Other equipment and construction projects 87 113 Total capital expenditures 386 1,072 Changes in accrued capital additions (22) (90) Construction in progress sold (289) — Property and equipment placed into service Newbuild construction program — (1,672) Other property and equipment (66) (203) Construction work in progress, at end of period $ 2,180 $ 2,842 Impairments of assets held and used —During the three months ended June 30, 2017, we identified indicators that the asset groups in our contract drilling services reporting unit may not be recoverable. Such indicators included recent significant declines in commodity prices and the market value of our stock, a reduction of projected dayrates and a further extension of currently low utilization rates. As a result of our testing, we determined that the carrying amount of the midwater floater asset group was impaired. In the nine months ended September 30, 2017, we recognized a loss of $94 million ($95 million, after taxes, or $0.25 per diluted share), associated with the impairment of the midwater floater asset group. We measured the fair value of this asset group by applying a combination of income and market approaches, using projected discounted cash flows and estimates of the exchange price that would be received for the assets in the principal or most advantageous markets for the assets in an orderly transaction between participants as of the measurement date. Our estimate of fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of our contract drilling services reporting unit, such as future commodity prices, projected demand for our services, rig availability and dayrates. Impairments of assets held for sale —In the three months ended September 30, 2017, we recognized an aggregate loss of $1.4 billion ($3.54 per diluted share), which had no tax effect, associated with the impairment of the ultra‑deepwater floaters Cajun Express, Deepwater Pathfinder, GSF Jack Ryan, Sedco Energy and Sedco Express and the deepwater floater Transocean Mariana s, along with related assets, which were classified as held for sale at the time of impairment. In the nine months ended September 30, 2017, we recognized an aggregate loss of $1.4 billion ($3.60 per diluted share), which had no tax effect, associated with the impairment of the ultra‑deepwater floaters Cajun Express, Deepwater Pathfinder, GSF Jack Ryan, Sedco Energy and Sedco Express, the deepwater floater Transocean Marianas and the midwater floaters Transocean Prospect and Transocean Searcher , along with related assets, which were classified as held for sale at the time of impairment. In the three months ended September 30, 2016, we recognized an aggregate loss of $11 million ($0.03 per diluted share), which had no tax effect, associated with the impairment of the midwater floaters Transocean Driller and Transocean Winner, along with related assets, which were held for sale at the time of impairment. In the nine months ended September 30, 2016, we recognized an aggregate loss of $26 million ($25 million, net of tax, or $0.06 per diluted share) associated with the impairment of the deepwater floater Sedco 702 and the midwater floaters Transocean Driller , Transocean John Shaw and Transocean Winner , along with related assets, which were classified as held for sale at the time of impairment. We measured the impairment of the drilling units and related assets as the amount by which the carrying amount exceeded the estimated fair value less costs to sell. We estimated the fair value of the assets using significant other observable inputs, representative of Level 2 fair value measurements, including indicative market values for the drilling units and related assets to be sold for scrap value or alternative use. If we commit to plans to sell additional rigs for values below the respective carrying amounts or commit to plans to recycle additional rigs and sell them for scrap value, we may be required to recognize additional losses associated with the impairment of such assets. Such losses could be material. Dispositions —On May 31, 2017, in connection with our efforts to dispose of non‑strategic assets, we completed the sale of 10 high‑specification jackups, including GSF Constellation I, GSF Constellation II, GSF Galaxy I, GSF Galaxy II, GSF Galaxy III, GSF Monarch, Transocean Andaman, Transocean Ao Thai, Transocean Honor and Transocean Siam Driller , along with related assets, and novated the contracts relating to the construction of five high‑specification jackups, together with related assets. In the nine months ended September 30, 2017, we received aggregate net cash proceeds of $319 million and recognized an aggregate net loss of $1.6 billion ($4.08 per diluted share), which had no tax effect, associated with the disposal of these assets. Following the completion of the sale, we agreed to continue to operate three of these high‑specification jackups through completion or novation of the respective drilling contracts, one of which was completed as of September 30, 2017. In the three and nine months ended September 30, 2017, excluding our loss on the disposal of these assets, our operating results included income of $19 million and $46 million, respectively, before taxes, associated with the high‑specification jackup asset group. In the three and nine months ended September 30, 2016, our operating results included income of $25 million and $47 million, respectively, before taxes, associated with the high‑specification jackup asset group. During the nine months ended September 30, 2017, we also completed the sale of the midwater floater GSF Rig 140, along with related assets. In the nine months ended September 30, 2017, we received aggregate net cash proceeds of $3 million and recognized an aggregate net gain of $2 million associated with the disposal of these assets. In the three and nine months ended September 30, 2017, we received aggregate net cash proceeds of $1 million and $8 million, respectively, and recognized an aggregate net loss of $9 million and $8 million, respectively, associated with the disposal of assets unrelated to rig sales. During the nine months ended September 30, 2016, in connection with our efforts to dispose of non‑strategic assets, we completed the sale of the deepwater floater Deepwater Navigator and the midwater floaters Falcon 100, GSF Grand Banks, GSF Rig 135, Sedneth 701 and Transocean John Shaw , along with related assets. In the nine months ended September 30, 2016, we received aggregate net cash proceeds of $11 million, and in the three and nine months ended September 30, 2016, we recognized an aggregate net gain of $3 million and $8 million, respectively, associated with the disposal of these assets. In the three and nine months ended September 30, 2016, we received aggregate net cash proceeds of $1 million and $5 million, respectively, and recognized an aggregate net gain of $6 million and less than $1 million, respectively, associated with the disposal of assets unrelated to rig sales. Assets held for sale —At September 30, 2017, the aggregate carrying amount of our assets held for sale, including the ultra‑deepwater floaters Cajun Express, Deepwater Pathfinder, GSF Jack Ryan, Sedco Energy and Sedco Express, the deepwater floater Transocean Marianas and the midwater floaters Transocean Prospect and Transocean Searcher , along with related assets, was $39 million, recorded in other current assets. At December 31, 2016, the aggregate carrying amount of our assets held for sale, including the midwater floater GSF Rig 140 , along with related assets and certain corporate assets, was $6 million, recorded in other current assets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes | |
Income Taxes | Note 7—Income Taxes Tax provision and rate —Transocean Ltd., a holding company and Swiss resident, is exempt from cantonal and communal income tax in Switzerland, but is subject to Swiss federal income tax. Our provision for income taxes is based on the tax laws and rates applicable in the jurisdictions in which we operate and earn income. In the nine months ended September 30, 2017 and 2016, our estimated effective tax rate, excluding discrete items, was 64.2 percent and 25.9 percent, respectively, based on estimated annual income from continuing operations before income taxes. Our effective tax rate increased in the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, primarily due to (a) changes in the relative blend of income from operations in certain jurisdictions and (b) valuation allowances on deferred tax assets not expected to be realized. We consider the tax effect, if any, of the excluded items as well as settlements of prior year tax estimates to be discrete period tax expenses or benefits. In the nine months ended September 30, 2017 and 2016, the effect of the various discrete period tax items was a net tax benefit of $57 million and $24 million, respectively. In the nine months ended September 30, 2017, such discrete items were primarily related to tax benefit of changes in unrecognized tax benefit associated with tax positions taken in prior years, valuation allowances on deferred tax assets not expected to be realized, and deductions related to resolution of certain litigation matters related to the Macondo well incident. In the nine months ended September 30, 2016, such discrete items were primarily related to tax benefit of changes in unrecognized tax benefit associated with tax positions taken in prior years and valuation allowances on deferred tax assets for losses not expected to be realized. For the nine months ended September 30, 2017 and 2016, these discrete tax items, coupled with the excluded income and expense items noted above, resulted in an effective tax rate of (3.6) percent and 17.8 percent, respectively, based on income from continuing operations before income tax expense. In evaluating our ability to realize deferred tax assets, we consider all available positive and negative evidence, including projected future taxable income and the existence of cumulative losses in recent years. As of September 30, 2017, our consolidated cumulative loss incurred over the recent three‑year period, primarily due to losses on impairment and disposal of assets, represented significant objective negative evidence for our evaluation. Such evidence, together with potential organizational changes that could alter our ability to realize certain deferred tax assets, has limited our ability to consider other subjective evidence, such as projected future contract activity. As a result, we recorded a valuation allowance of $144 million to recognize only a portion of our U.S. deferred tax assets that are more likely than not to be recognized. If estimated future taxable income changes during the carryforward periods or if the cumulative loss is no longer present, we may adjust the amount of deferred tax assets that we expect to realize. Tax returns —We file federal and local tax returns in several jurisdictions throughout the world. With few exceptions, we are no longer subject to examinations of our U.S. and non‑U.S. tax matters for years prior to 2010. Our tax returns in the major jurisdictions in which we operate, other than Brazil, as mentioned below, are generally subject to examination for periods ranging from three to six years. We have agreed to extensions beyond the statute of limitations in two major jurisdictions for up to 20 years. Tax authorities in certain jurisdictions are examining our tax returns and in some cases have issued assessments. We are defending our tax positions in those jurisdictions. While we cannot predict or provide assurance as to the timing or the outcome of these proceedings, we do not expect the ultimate liability to have a material adverse effect on our condensed consolidated statement of financial position or results of operations, although it may have a material adverse effect on our condensed consolidated statement of cash flows. Brazil tax investigations —In December 2005, the Brazilian tax authorities issued a tax assessment with respect to our tax returns for the years 2000 through 2004, which is currently for an aggregate amount of BRL 846 million, equivalent to approximately $267 million, including penalties and interest. On January 25, 2008, we filed a protest letter with the Brazilian tax authorities for this tax assessment, and we are currently engaged in the appeals process. On May 19, 2014, the Brazilian tax authorities issued a tax assessment with respect to our Brazilian income tax returns for the years 2009 and 2010, which is currently for an aggregate amount of BRL 144 million, equivalent to approximately $46 million, including penalties and interest. On June 18, 2014, we filed a protest letter with the Brazilian tax authorities for this tax assessment. We believe our returns are materially correct as filed, and we are vigorously contesting these assessments. An unfavorable outcome on these proposed assessments could result in a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. Other tax matters —We conduct operations through our various subsidiaries in a number of countries throughout the world. Each country has its own tax regimes with varying nominal rates, deductions, employee contribution requirements and tax attributes. From time to time, we may identify changes to previously evaluated tax positions that could result in adjustments to our recorded assets and liabilities. Although we are unable to predict the outcome of these changes, we do not expect the effect, if any, resulting from these adjustments to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | Note 8—Earnings (Loss) Per Share The numerator and denominator used for the computation of basic and diluted per share earnings (loss) from continuing operations were as follows (in millions, except per share data): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Numerator for earnings (loss) per share Income (loss) from continuing operations attributable to controlling interest $ (1,417) $ (1,417) $ 218 $ 218 $ (3,016) $ (3,016) $ 535 $ 535 Undistributed earnings allocable to participating securities — — (3) (3) — — (8) (9) Income (loss) from continuing operations available to shareholders $ (1,417) $ (1,417) $ 215 $ 215 $ (3,016) $ (3,016) $ 527 $ 526 Denominator for earnings (loss) per share Weighted-average shares outstanding 391 391 365 365 391 391 365 365 Effect of stock options and other share-based awards — — — — — — — — Weighted-average shares for per share calculation 391 391 365 365 391 391 365 365 Per share earnings (loss) from continuing operations $ (3.62) $ (3.62) $ 0.59 $ 0.59 $ (7.72) $ (7.72) $ 1.44 $ 1.44 In the three and nine months ended September 30, 2017, we excluded from the calculation 5.6 million and 4.7 million share‑based awards, respectively, since the effect would have been anti‑dilutive. In the three and nine months ended September 30, 2016, we excluded from the calculation 3.6 million and 2.9 million share‑based awards, respectively, since the effect would have been anti‑dilutive. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt | Note 9—Debt Outstanding debt —The aggregate principal amounts and aggregate carrying amounts, net of debt‑related balances, including unamortized discounts, premiums and issue costs, of our debt were as follows (in millions): Principal amount Carrying amount September 30, December 31, September 30, December 31, 2017 2016 2017 2016 2.50% Senior Notes due October 2017 $ 152 $ 485 $ 152 $ 484 Eksportfinans Loans due January 2018 27 123 27 123 6.00% Senior Notes due March 2018 319 754 319 757 7.375% Senior Notes due April 2018 82 211 82 211 6.50% Senior Notes due November 2020 292 508 295 513 6.375% Senior Notes due December 2021 332 552 330 549 5.52% Senior Secured Notes due May 2022 381 — 375 — 3.80% Senior Notes due October 2022 506 539 501 534 9.00% Senior Notes due July 2023 1,250 1,250 1,215 1,211 7.75% Senior Secured Notes due October 2024 570 600 556 583 6.25% Senior Secured Notes due December 2024 594 625 580 609 7.45% Notes due April 2027 88 88 86 86 8.00% Debentures due April 2027 57 57 57 57 7.00% Notes due June 2028 300 300 307 308 Capital lease contract due August 2029 545 566 545 566 7.50% Notes due April 2031 588 588 585 585 6.80% Senior Notes due March 2038 1,000 1,000 991 991 7.35% Senior Notes due December 2041 300 300 297 297 Total debt 7,383 8,546 7,300 8,464 Less debt due within one year 2.50% Senior Notes due October 2017 152 485 152 484 Eksportfinans Loans due January 2018 27 98 27 98 6.00% Senior Notes due March 2018 319 — 319 — 7.375% Senior Notes due April 2018 82 — 82 — 5.52% Senior Secured Notes due May 2022 77 — 75 — 7.75% Senior Secured Notes due October 2024 60 60 57 57 6.25% Senior Secured Notes due December 2024 63 63 60 60 Capital lease contract due August 2029 27 25 27 25 Total debt due within one year 807 731 799 724 Total long-term debt $ 6,576 $ 7,815 $ 6,501 $ 7,740 Interest rate adjustments —The interest rates for certain of our notes are subject to adjustment from time to time upon a change to our credit rating of our non‑credit enhanced senior unsecured long‑term debt (“Debt Rating”). As of September 30, 2017, based on the Debt Rating in effect on that date, the interest rate in effect for the 2.50% Senior Notes due October 2017 and the 3.80% Senior Notes due October 2022 was 4.50 percent and 5.80 percent, respectively, and the interest rate in effect for the 6.375% Senior Notes due December 2021 and the 7.35% Senior Notes due December 2041 was 8.375 percent and 9.35 percent, respectively. Five‑Year Revolving Credit Facility —In June 2014, we entered into an amended and restated bank credit agreement, which established a $3.0 billion unsecured five‑year revolving credit facility, which is scheduled to expire on June 28, 2019 (the “Five‑Year Revolving Credit Facility”). Among other things, the Five‑Year Revolving Credit Facility includes limitations on creating liens, incurring subsidiary debt, transactions with affiliates, sale/leaseback transactions, mergers and the sale of substantially all assets. The Five‑Year Revolving Credit Facility also includes a covenant imposing a maximum debt to tangible capitalization ratio of 0.6 to 1.0. Borrowings under the Five‑Year Revolving Credit Facility are subject to acceleration upon the occurrence of an event of default. Additionally, such borrowings are guaranteed by Transocean Ltd. and may be prepaid in whole or in part without premium or penalty. We may borrow under the Five‑Year Revolving Credit Facility at either (1) the adjusted London Interbank Offered Rate plus a margin (the “Five‑Year Revolving Credit Facility Margin”), which ranges from 1.125 percent to 2.0 percent based on the Debt Rating, or (2) the base rate specified in the credit agreement plus the Five‑Year Revolving Credit Facility Margin, less one percent per annum. Throughout the term of the Five‑Year Revolving Credit Facility, we pay a facility fee on the daily unused amount of the underlying commitment which ranges from 0.15 percent to 0.35 percent based on our Debt Rating. At September 30, 2017, based on our Debt Rating on that date, the Five‑Year Revolving Credit Facility Margin was 2.0 percent and the facility fee was 0.35 percent. At September 30, 2017, we had no borrowings outstanding or letters of credit issued, and we had $3.0 billion of available borrowing capacity under the Five‑Year Revolving Credit Facility. Issuance —On May 5, 2017, one of our wholly owned subsidiaries completed an offering of an aggregate principal amount of $410 million of 5.52% senior secured notes due May 2022 (the “5.52% Senior Secured Notes”), and our subsidiary received aggregate cash proceeds of $403 million, net of issue costs. On September 29, 2017, our subsidiary made the first of the required quarterly installments of principal and interest. The 5.52% Senior Secured Notes are secured by the assets and earnings associated with the ultra‑deepwater floater Deepwater Conqueror , the equity of the wholly owned subsidiaries that own and operate the collateral rig, and certain related assets. Additionally, our subsidiary is required to maintain certain balances in restricted cash accounts. At September 30, 2017, our subsidiary had $95 million deposited in cash accounts restricted for debt service and working capital requirements. Our subsidiary may redeem all or a portion of the 5.52% Senior Secured Notes at any time on or prior to December 31, 2021 at a price equal to 100 percent of the aggregate principal amount plus, subject to certain exceptions related to the drilling contract for Deepwater Conqueror , a make‑whole amount. Our subsidiary will be required to redeem or to offer to redeem the notes at a price equal to 100 percent of the aggregate principal amount, and, under certain circumstances, the payment of a make‑whole amount, upon the occurrence of certain events related to Deepwater Conqueror and the related drilling contract. See Note 14—Subsequent Events. Tender offers —On July 11, 2017, we completed cash tender offers to purchase up to $1.5 billion aggregate principal amount of certain notes (the “2017 Tendered Notes”). On August 1, 2016, we completed cash tender offers to purchase up to $1.0 billion aggregate principal amount of certain notes (the “2016 Tendered Notes”). During the nine months ended September 30, 2017 and 2016, we received valid tenders from holders of aggregate principal amounts of the 2017 Tendered Notes and 2016 Tendered Notes as follows (in millions): Nine months ended September 30, 2017 2016 2.50% Senior Notes due October 2017 $ 271 $ — 6.00% Senior Notes due March 2018 400 — 7.375% Senior Notes due April 2018 128 — 6.50% Senior Notes due November 2020 207 348 6.375% Senior Notes due December 2021 213 476 3.80% Senior Notes due October 2022 — 157 Aggregate principal amount retired $ 1,219 $ 981 Aggregate cash payment $ 1,269 $ 876 In the three and nine months ended September 30, 2017, we recognized an aggregate net loss of $1 million and $48 million, respectively, associated with the retirement of such validly tendered debt. In the three and nine months ended September 30, 2016, we recognized an aggregate net gain of $104 million associated with the retirement of such validly tendered debt. Repurchases —During the nine months ended September 30, 2017 and 2016, we repurchased in the open market debt securities with aggregate principal amounts as follows (in millions): Nine months ended September 30, 2017 2016 5.05% Senior Notes due December 2016 $ — $ 36 2.50% Senior Notes due October 2017 62 65 6.00% Senior Notes due March 2018 35 35 7.375% Senior Notes due April 2018 1 26 6.50% Senior Notes due November 2020 9 32 6.375% Senior Notes due December 2021 7 120 3.80% Senior Notes due October 2022 33 38 7.45% Notes due April 2027 — 8 7.50% Notes due April 2031 — 5 Aggregate principal amount retired $ 147 $ 365 Aggregate cash payment $ 147 $ 320 In the nine months ended September 30, 2017, we recognized an aggregate net loss of $1 million associated with the retirement of such repurchased debt. In the three and nine months ended September 30, 2016, we recognized an aggregate net gain of $6 million and $44 million, respectively, associated with the retirement of such repurchased debt. |
Postemployment Benefit Plans
Postemployment Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Postemployment Benefit Plans | |
Postemployment Benefit Plans | Note 10—Postemployment Benefit Plans The components of net periodic benefit costs, before tax, and funding contributions for our postemployment benefit plans were as follows (in millions): Three months ended September 30, 2017 Three months ended September 30, 2016 U.S. Non-U.S. OPEB U.S. Non-U.S. OPEB Plans Plans Plans Total Plans Plans Plans Total Net periodic benefit costs Service cost $ 1 $ 1 $ — $ 2 $ — $ 3 $ — $ 3 Interest cost 15 3 1 19 18 4 (1) 21 Expected return on plan assets (19) (4) — (23) (20) (6) — (26) Settlements and curtailments — 1 — 1 — (5) 2 (3) Actuarial loss, net 1 1 — 2 1 — — 1 Prior service cost, net — — (1) (1) — — (2) (2) Net periodic benefit costs $ (2) $ 2 $ — $ — $ (1) $ (4) $ (1) $ (6) Funding contributions $ — $ — $ 1 $ 1 $ 1 $ 1 $ — $ 2 Nine months ended September 30, 2017 Nine months ended September 30, 2016 U.S. Non-U.S. OPEB U.S. Non-U.S. OPEB Plans Plans Plans Total Plans Plans Plans Total Net periodic benefit costs Service cost $ 3 $ 2 $ — $ 5 $ 2 $ 11 $ — $ 13 Interest cost 48 8 1 57 52 12 — 64 Expected return on plan assets (56) (14) — (70) (60) (18) — (78) Settlements and curtailments — 6 — 6 1 (6) — (5) Actuarial loss, net 4 1 — 5 3 2 — 5 Prior service cost, net — — (2) (2) — — (4) (4) Net periodic benefit costs $ (1) $ 3 $ (1) $ 1 $ (2) $ 1 $ (4) $ (5) Funding contributions $ 1 $ 7 $ 2 $ 10 $ 3 $ 41 $ 1 $ 45 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 11—Commitments and Contingencies Macondo well incident commitments and contingencies Overview —On April 22, 2010, the ultra‑deepwater floater Deepwater Horizon sank after a blowout of the Macondo well caused a fire and explosion on the rig off the coast of Louisiana. At the time of the explosion, Deepwater Horizon was contracted to an affiliate of BP plc (together with its affiliates, “BP”). Following the incident, we have been subject to civil and criminal claims, as well as causes of action, fines and penalties by local, state and federal governments. Litigation commenced shortly after the incident, and most claims against us were consolidated by the U.S. Judicial Panel on Multidistrict Litigation and transferred to the U.S. District Court for the Eastern District of Louisiana (the “MDL Court”). A significant portion of the contingencies arising from the Macondo well incident has now been resolved as a result of settlements with the U.S. Department of Justice (the “DOJ”), BP and the states of Alabama, Florida, Louisiana, Mississippi, and Texas. Additionally, we and the Plaintiff Steering Committee (the “PSC”) entered into a settlement agreement (the “PSC Settlement Agreement”), which was approved by the MDL Court on February 15, 2017. We have recognized a liability for the remaining estimated loss contingencies associated with litigation resulting from the Macondo well incident that we believe are probable and for which a reasonable estimate can be made. At September 30, 2017 and December 31, 2016, the liability for estimated loss contingencies that we believe are probable and for which a reasonable estimate can be made was $244 million and $250 million, respectively, recorded in other current liabilities. The remaining litigation could result in certain loss contingencies that we believe are reasonably possible. Although we have not recognized a liability for such loss contingencies, these contingencies could result in liabilities that we ultimately recognize. We recognize an asset associated with the portion of our estimated losses that we believe is probable of recovery from insurance and for which we have received from underwriters’ confirmation of expected payment. Although we have available policy limits that could result in additional amounts recoverable from insurance, recovery of such additional amounts is not probable and we are not currently able to estimate such amounts (see “—Insurance coverage”). Our estimates involve a significant amount of judgment. Plea Agreement —Pursuant to the plea agreement (the “Plea Agreement”), one of our subsidiaries pled guilty to one misdemeanor count of negligently discharging oil into the U.S. Gulf of Mexico, in violation of the Clean Water Act and agreed to be subject to probation through February 2018. The DOJ agreed, subject to the provisions of the Plea Agreement, not to further prosecute us for certain matters arising from the Macondo well incident. We also agreed to make an aggregate cash payment of $ 400 million, including a criminal fine and cash contributions to the National Fish & Wildlife Foundation and the National Academy of Sciences. At December 31, 2016, the carrying amount of our liability for such settlement obligations was $60 million, recorded in other current liabilities. In the nine months ended September 30, 2017 and 2016, we made cash payments of $60 million in each period, representing the final installments for our obligations under the Plea Agreement. PSC Settlement Agreement —On May 29, 2015, together with the PSC, we filed the PSC Settlement Agreement with the MDL Court for approval. Through the PSC Settlement Agreement, we agreed to pay a total of $212 million, plus up to $25 million for partial reimbursement of attorneys’ fees, to be allocated between two classes of plaintiffs as follows: (1) private plaintiffs, businesses, and local governments who could have asserted punitive damages claims against us under general maritime law (the “Punitive Damages Class”); and (2) private plaintiffs who previously settled economic damages claims against BP and were assigned certain claims BP had made against us (the “Assigned Claims Class”). A court‑appointed neutral representative established the allocation of the settlement payment to be 72.8 percent paid to the Punitive Damages Class and 27.2 percent paid to the Assigned Claims Class. In exchange for these payments, each of the classes agreed to release all respective claims it has against us. Members of the Punitive Damages Class were given the opportunity to opt out, and 30 claimants have elected to opt out, of the PSC Settlement Agreement. In June 2016 and August 2015, we made a cash deposit of $25 million and $212 million, respectively, into escrow accounts pending approval of the settlement by the MDL Court. On February 15, 2017, the MDL Court entered a final order and judgement approving the PSC Settlement Agreement, which is no longer subject to appeal. At September 30, 2017 and December 31, 2016, the aggregate cash balance in escrow accounts was $237 million, recorded in restricted cash. Pending claims —As of September 30, 2017, numerous complaints remain pending against us, along with other unaffiliated defendants in the MDL Court. We believe our settlement with the PSC resolves many of these pending actions. As for any actions not resolved by these settlements, including any claims by individuals who opted out of the PSC Settlement Agreement, claims by the Mexican government under the Oil Pollution Act of 1990 and maritime law and federal securities law, we are vigorously defending those claims and pursuing any and all defenses available. See “—PSC Settlement Agreement.” Insurance coverage —At the time of the Macondo well incident, our excess liability insurance program offered aggregate insurance coverage of $950 million, excluding a $15 million deductible and a $50 million self-insured layer through our wholly owned captive insurance subsidiary. This excess liability insurance coverage consisted of a first and a second layer of $150 million each, a third and fourth layer of $200 million each and a fifth layer of $250 million. We recovered costs under the first four excess layers, the limits of which are now fully exhausted. We submitted claims to the $250 million fifth layer, which is comprised of four Bermuda market insurers (the “Bermuda Insurers”). In the nine months ended September 30, 2017 and the year ended December 31, 2016, we received cash proceeds of $10 million and $20 million, respectively, associated with settlements with two of the Bermuda Insurers. We are in the early stages of arbitration with one of the Bermuda Insurers. We cannot provide assurance that we will successfully recover additional proceeds under the policy limits with the Bermuda Insurers. Other legal proceedings Asbestos litigation —In 2004, several of our subsidiaries were named, along with numerous other unaffiliated defendants, in 21 complaints filed on behalf of 769 plaintiffs in the Circuit Courts of the State of Mississippi, and in 2014, a group of similar complaints were filed in Louisiana. The plaintiffs, former employees of some of the defendants, generally allege that the defendants used or manufactured asbestos containing drilling mud additives for use in connection with drilling operations, claiming negligence, products liability, strict liability and claims allowed under the Jones Act and general maritime law. The plaintiffs generally seek awards of unspecified compensatory and punitive damages, but the court‑appointed special master has ruled that a Jones Act employer defendant, such as us, cannot be sued for punitive damages. At September 30, 2017, 15 plaintiffs have claims pending in Mississippi and eight plaintiffs have claims pending in Louisiana in which we have or may have an interest. We intend to defend these lawsuits vigorously, although we can provide no assurance as to the outcome. We historically have maintained broad liability insurance, although we are not certain whether insurance will cover the liabilities, if any, arising out of these claims. Based on our evaluation of the exposure to date, we do not expect the liability, if any, resulting from these claims to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. One of our subsidiaries has been named as a defendant, along with numerous other companies, in lawsuits arising out of the subsidiary’s manufacture and sale of heat exchangers, and involvement in the construction and refurbishment of major industrial complexes alleging bodily injury or personal injury as a result of exposure to asbestos. As of September 30, 2017, the subsidiary was a defendant in approximately 123 lawsuits with a corresponding number of plaintiffs. For many of these lawsuits, we have not been provided with sufficient information from the plaintiffs to determine whether all or some of the plaintiffs have claims against the subsidiary, the basis of any such claims, or the nature of their alleged injuries. The operating assets of the subsidiary were sold and its operations were discontinued in 1989, and the subsidiary has no remaining assets other than insurance policies, rights and proceeds, including (i) certain policies subject to litigation and (ii) certain rights and proceeds held directly or indirectly through a qualified settlement fund. The subsidiary has in excess of $1.0 billion in insurance limits potentially available to the subsidiary. Although not all of the policies may be fully available due to the insolvency of certain insurers, we believe that the subsidiary will have sufficient funding directly or indirectly, including from settlements and payments from insurers, assigned rights from insurers and coverage‑in‑place settlement agreements with insurers to respond to these claims. While we cannot predict or provide assurance as to the outcome of these matters, we do not expect the ultimate liability, if any, resulting from these claims to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. Rio de Janeiro tax assessment —In the year ended December 31, 2006, the state tax authorities of Rio de Janeiro in Brazil issued to one of our subsidiaries tax assessments on equipment imported into the state in connection with our operations, resulting from a preliminary finding by these authorities that our record keeping practices were deficient. At September 30, 2017, the aggregate tax assessment was for BRL 525 million, equivalent to approximately $166 million, including interest and penalties. In September 2006, we filed an initial response refuting these tax assessments, and, in September 2007, the state tax authorities confirmed that they believe the tax assessments are valid. On September 27, 2007, we filed an appeal with the state Taxpayer’s Council contesting the assessments. While we cannot predict or provide assurance as to the final outcome of these proceedings, we do not expect it to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. Nigerian Cabotage Act litigation —In October 2007, three of our subsidiaries were each served a Notice and Demand from the Nigeria Maritime Administration and Safety Agency, imposing a two percent surcharge on the value of all contracts performed by us in Nigeria pursuant to the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”). Our subsidiaries each filed an originating summons in the Federal High Court in Lagos challenging the imposition of this surcharge on the basis that the Cabotage Act and associated levy is not applicable to drilling rigs. The respondents challenged the competence of the suits on several procedural grounds. The court upheld the objections and dismissed the suits. In December 2010, our subsidiaries filed a new joint Cabotage Act suit. While we cannot predict or provide assurance as to the outcome of these proceedings, we do not expect the proceedings to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. Other matters —We are involved in various tax matters, various regulatory matters, and a number of claims and lawsuits, asserted and unasserted, all of which have arisen in the ordinary course of our business. We do not expect the liability, if any, resulting from these other matters to have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. We cannot predict with certainty the outcome or effect of any of the litigation matters specifically described above or of any such other pending, threatened, or possible litigation or liability. We can provide no assurance that our beliefs or expectations as to the outcome or effect of any tax, regulatory, lawsuit or other litigation matter will prove correct and the eventual outcome of these matters could materially differ from management’s current estimates. Other environmental matters Hazardous waste disposal sites —We have certain potential liabilities under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and similar state acts regulating cleanup of various hazardous waste disposal sites, including those described below. CERCLA is intended to expedite the remediation of hazardous substances without regard to fault. Potentially responsible parties (“PRPs”) for each site include present and former owners and operators of, transporters to and generators of the substances at the site. Liability is strict and can be joint and several. We have been named as a PRP in connection with a site located in Santa Fe Springs, California, known as the Waste Disposal, Inc. site. We and other PRPs have agreed with the Environmental Protection Agency (the “EPA”) and the DOJ to settle our potential liabilities for this site by agreeing to perform the remaining remediation required by the EPA. The parties to the settlement have entered into a participation agreement, which makes us liable for approximately eight percent of the remediation and related costs. The remediation is complete, and we believe our share of the future operation and maintenance costs of the site is not material. There are additional potential liabilities related to the site, but these cannot be quantified, and we have no reason at this time to believe that they will be material. One of our subsidiaries has been ordered by the California Regional Water Quality Control Board (“CRWQCB”) to develop a testing plan for a site known as Campus 1000 Fremont in Alhambra, California, which is now a part of the San Gabriel Valley, Area 3, Superfund site. We were also advised that one or more of our subsidiaries that formerly owned and operated the site would likely be named by the EPA as PRPs. The current property owner, an unrelated party, performed the required testing and detected no contaminants. In discussions with CRWQCB staff, we were advised of their intent to issue us a “no further action” letter, but it has not yet been received. Based on the test results, we would contest any potential liability. We have no knowledge at this time of the potential cost of any remediation, who else will be named as PRPs, and whether in fact any of our subsidiaries is a responsible party. The subsidiaries in question do not own any operating assets and have limited ability to respond to any liabilities. Resolutions of other claims by the EPA, the involved state agency or PRPs are at various stages of investigation. These investigations involve determinations of (a) the actual responsibility attributed to us and the other PRPs at the site, (b) appropriate investigatory or remedial actions and (c) allocation of the costs of such activities among the PRPs and other site users. Our ultimate financial responsibility in connection with those sites may depend on many factors, including (i) the volume and nature of material, if any, contributed to the site for which we are responsible, (ii) the number of other PRPs and their financial viability and (iii) the remediation methods and technology to be used. It is difficult to quantify with certainty the potential cost of these environmental matters, particularly in respect of remediation obligations. Nevertheless, based upon the information currently available, we believe that our ultimate liability arising from all environmental matters, including the liability for all other related pending legal proceedings, asserted legal claims and known potential legal claims that are likely to be asserted, is adequately accrued and should not have a material effect on our condensed consolidated statement of financial position or results of operations. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Shareholders' Equity | |
Shareholders' Equity | Note 12—Shareholders’ Equity Par value reduction —On October 29, 2015, at our extraordinary general meeting, our shareholders 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 reduction of par value became effective as of January 7, 2016, upon registration in the commercial register. Shares held in treasury —In May 2009, at our annual general meeting, our shareholders approved and authorized our board of directors, at its discretion, to repurchase an amount of our shares for cancellation with an aggregate purchase price of up to CHF 3.5 billion, equivalent to approximately $3.6 billion. On February 12, 2010, our board of directors authorized our management to implement the share repurchase program. During the nine months ended September 30, 2017 and 2016, we did not purchase any shares under our share repurchase program. On October 29, 2015, at our extraordinary general meeting, our shareholders approved the cancellation of the 2.9 million shares previously purchased under the share repurchase program and held in treasury. The cancellation of such shares became effective as of January 7, 2016, upon registration in the commercial register. Shares held by subsidiaries —Two of our subsidiaries hold our shares for future use to satisfy our obligations to deliver shares in connection with awards granted under our incentive plans or other rights to acquire our shares. At September 30, 2017 and December 31, 2016, our subsidiaries held 3.6 million shares and 5.4 million shares, respectively. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments | |
Financial Instruments | Note 13—Financial Instruments The carrying amounts and fair values of our financial instruments were as follows (in millions): September 30, 2017 December 31, 2016 Carrying Fair Carrying Fair amount value amount value Cash and cash equivalents $ 2,717 $ 2,717 $ 3,052 $ 3,052 Restricted cash accounts and investments 503 503 510 511 Long-term debt, including current maturities 7,300 7,415 8,464 8,218 We estimated the fair value of each class of financial instruments, for which estimating fair value is practicable, by applying the following methods and assumptions: Cash and cash equivalents —The carrying amount of cash and cash equivalents represents the historical cost, plus accrued interest, which approximates fair value because of the short maturities of those instruments. We measured the estimated fair value of our cash equivalents using significant other observable inputs, representative of a Level 2 fair value measurement, including the net asset values of the investments. At September 30, 2017 and December 31, 2016, the aggregate carrying amount of our cash equivalents was $2.2 billion and $2.6 billion, respectively. Restricted cash accounts and investments —The carrying amount of the cash and cash equivalents that are subject to restrictions due to collateral requirements, legislation, regulation or court order approximates fair value due to the short term nature of the instruments in which the restricted cash balances are held. At September 30, 2017, the aggregate carrying amount of such restricted cash and cash equivalents was $476 million, including $453 million and $23 million recorded in current assets and other long‑term assets, respectively. At December 31, 2016, the aggregate carrying amount of such restricted cash and cash equivalents was $387 million, including $368 million and $19 million recorded in current assets and other long‑term assets, respectively. The carrying amount of the restricted cash investments pledged for debt service of the Eksportfinans Loans due January 2018 and for security of certain other credit arrangements represents the amortized historical cost of the investment. We measured the estimated fair value of such restricted cash investments using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads of the instruments. At September 30, 2017 and December 31, 2016, the aggregate carrying amount of the restricted cash investments was $27 million and $123 million, respectively. At September 30, 2017 and December 31, 2016, the estimated fair value of such restricted cash investments was $27 million and $124 million, respectively. Debt —We measured the estimated fair value of our debt, all of which was fixed‑rate debt, using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | Note 14—Subsequent events Debt issuance —On October 17, 2017, we completed an offering of an aggregate principal amount of $750 million of 7.50% senior unsecured notes due January 15, 2026 (the “7.50% Senior Notes”), and we received aggregate cash proceeds of $742 million, net of issue costs. We intend to use the majority of the net proceeds from the debt offering to repay or redeem certain maturing debt. The 7.50% Senior Notes are fully and unconditionally guaranteed by Transocean Ltd. and certain wholly owned subsidiaries of Transocean Inc. Such notes rank equal in right of payment to all of our existing and future unsecured unsubordinated obligations and rank structurally senior to the extent of the value of the assets of the subsidiaries guaranteeing the notes. We will pay interest on the 7.50% Senior Notes semiannually on January 15 and July 15 of each year, beginning on July 15, 2018. We may redeem all or a portion of the 7.50% Senior Notes at any time prior to January 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make‑whole provision, and on or after January 15, 2021, at specified redemption prices. The indenture that governs the 7.50% Senior Notes contains covenants that, among other things, limit our ability to incur certain liens on our drilling units without equally and ratably securing the notes, engage in certain sale and lease‑back transactions covering any of our drilling units, allow our subsidiaries to incur certain additional debt, and consolidate, merge or enter into a scheme of arrangement qualifying as an amalgamation. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Significant Accounting Policies | |
Presentation | Presentation —We have prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S‑X of the U.S. Securities and Exchange Commission. Pursuant to such rules and regulations, these financial statements do not include all disclosures required by accounting principles generally accepted in the U.S. for complete financial statements. The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. Such adjustments are considered to be of a normal recurring nature unless otherwise noted. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any future period. The accompanying condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto as of December 31, 2016 and 2015 and for each of the three years in the period ended December 31, 2016, included in our annual report on Form 10‑K filed on March 7, 2017. |
Accounting estimates | Accounting estimates —To prepare financial statements in accordance with accounting principles generally accepted in the U.S., we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions, including those related to our allowance for doubtful accounts, materials and supplies obsolescence, property and equipment, assets held for sale, income taxes, contingencies, share‑based compensation, defined benefit pension plans and other postretirement benefits. We base our estimates and assumptions on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from such estimates. |
Fair value measurements | Fair value measurements —We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuation techniques require inputs that we categorize using a three‑level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. |
Capitalized interest | Capitalized interest —We capitalize interest costs for qualifying construction and upgrade projects and only capitalize interest costs during periods in which progress for the construction projects continues to be underway. As of September 30, 2017, we had ceased capitalization of interest costs on our two uncontracted newbuilds due to a pause in construction progress. In the three and nine months ended September 30, 2017, we capitalized interest costs of $31 million and $91 million, respectively, for construction work in progress. In the three and nine months ended September 30, 2016, we capitalized interest costs of $41 million and $130 million, respectively, for construction work in progress. |
Reclassifications | Reclassifications —We have made certain reclassifications to prior period amounts to conform with the current period’s presentation. Such reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities | |
Carrying Amounts of Variable Interest Entities | The carrying amount of ADDCL, after eliminating the effect of intercompany transactions, was as follows (in millions): September 30, December 31, 2017 2016 Assets $ 764 $ 787 Liabilities 14 25 Net carrying amount $ 750 $ 762 |
Drilling Fleet (Tables)
Drilling Fleet (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Drilling Fleet | |
Changes in our construction work in progress, including capital expenditures and capitalized interest | For the nine months ended September 30, 2017 and 2016, the changes in our construction work in progress, including capital expenditures and other capital additions, were as follows (in millions): Nine months ended September 30, 2017 2016 Construction work in progress, at beginning of period $ 2,171 $ 3,735 Capital expenditures Newbuild construction program 299 959 Other equipment and construction projects 87 113 Total capital expenditures 386 1,072 Changes in accrued capital additions (22) (90) Construction in progress sold (289) — Property and equipment placed into service Newbuild construction program — (1,672) Other property and equipment (66) (203) Construction work in progress, at end of period $ 2,180 $ 2,842 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | The numerator and denominator used for the computation of basic and diluted per share earnings (loss) from continuing operations were as follows (in millions, except per share data): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Numerator for earnings (loss) per share Income (loss) from continuing operations attributable to controlling interest $ (1,417) $ (1,417) $ 218 $ 218 $ (3,016) $ (3,016) $ 535 $ 535 Undistributed earnings allocable to participating securities — — (3) (3) — — (8) (9) Income (loss) from continuing operations available to shareholders $ (1,417) $ (1,417) $ 215 $ 215 $ (3,016) $ (3,016) $ 527 $ 526 Denominator for earnings (loss) per share Weighted-average shares outstanding 391 391 365 365 391 391 365 365 Effect of stock options and other share-based awards — — — — — — — — Weighted-average shares for per share calculation 391 391 365 365 391 391 365 365 Per share earnings (loss) from continuing operations $ (3.62) $ (3.62) $ 0.59 $ 0.59 $ (7.72) $ (7.72) $ 1.44 $ 1.44 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt, net of unamortized discounts, premiums and fair value adjustments | he aggregate principal amounts and aggregate carrying amounts, net of debt‑related balances, including unamortized discounts, premiums and issue costs, of our debt were as follows (in millions): Principal amount Carrying amount September 30, December 31, September 30, December 31, 2017 2016 2017 2016 2.50% Senior Notes due October 2017 $ 152 $ 485 $ 152 $ 484 Eksportfinans Loans due January 2018 27 123 27 123 6.00% Senior Notes due March 2018 319 754 319 757 7.375% Senior Notes due April 2018 82 211 82 211 6.50% Senior Notes due November 2020 292 508 295 513 6.375% Senior Notes due December 2021 332 552 330 549 5.52% Senior Secured Notes due May 2022 381 — 375 — 3.80% Senior Notes due October 2022 506 539 501 534 9.00% Senior Notes due July 2023 1,250 1,250 1,215 1,211 7.75% Senior Secured Notes due October 2024 570 600 556 583 6.25% Senior Secured Notes due December 2024 594 625 580 609 7.45% Notes due April 2027 88 88 86 86 8.00% Debentures due April 2027 57 57 57 57 7.00% Notes due June 2028 300 300 307 308 Capital lease contract due August 2029 545 566 545 566 7.50% Notes due April 2031 588 588 585 585 6.80% Senior Notes due March 2038 1,000 1,000 991 991 7.35% Senior Notes due December 2041 300 300 297 297 Total debt 7,383 8,546 7,300 8,464 Less debt due within one year 2.50% Senior Notes due October 2017 152 485 152 484 Eksportfinans Loans due January 2018 27 98 27 98 6.00% Senior Notes due March 2018 319 — 319 — 7.375% Senior Notes due April 2018 82 — 82 — 5.52% Senior Secured Notes due May 2022 77 — 75 — 7.75% Senior Secured Notes due October 2024 60 60 57 57 6.25% Senior Secured Notes due December 2024 63 63 60 60 Capital lease contract due August 2029 27 25 27 25 Total debt due within one year 807 731 799 724 Total long-term debt $ 6,576 $ 7,815 $ 6,501 $ 7,740 |
Schedule of tender offers | On August 1, 2016, we completed cash tender offers to purchase up to $1.0 billion aggregate principal amount of certain notes (the “2016 Tendered Notes”). During the nine months ended September 30, 2017 and 2016, we received valid tenders from holders of aggregate principal amounts of the 2017 Tendered Notes and 2016 Tendered Notes as follows (in millions): Nine months ended September 30, 2017 2016 2.50% Senior Notes due October 2017 $ 271 $ — 6.00% Senior Notes due March 2018 400 — 7.375% Senior Notes due April 2018 128 — 6.50% Senior Notes due November 2020 207 348 6.375% Senior Notes due December 2021 213 476 3.80% Senior Notes due October 2022 — 157 Aggregate principal amount retired $ 1,219 $ 981 Aggregate cash payment $ 1,269 $ 876 |
Schedule of debt repurchases and redemptions | During the nine months ended September 30, 2017 and 2016, we repurchased in the open market debt securities with aggregate principal amounts as follows (in millions): Nine months ended September 30, 2017 2016 5.05% Senior Notes due December 2016 $ — $ 36 2.50% Senior Notes due October 2017 62 65 6.00% Senior Notes due March 2018 35 35 7.375% Senior Notes due April 2018 1 26 6.50% Senior Notes due November 2020 9 32 6.375% Senior Notes due December 2021 7 120 3.80% Senior Notes due October 2022 33 38 7.45% Notes due April 2027 — 8 7.50% Notes due April 2031 — 5 Aggregate principal amount retired $ 147 $ 365 Aggregate cash payment $ 147 $ 320 |
Postemployment Benefit Plans (T
Postemployment Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Postemployment Benefit Plans | |
Schedule of Net Periodic Benefit Costs Before Tax | The components of net periodic benefit costs, before tax, and funding contributions for our postemployment benefit plans were as follows (in millions): Three months ended September 30, 2017 Three months ended September 30, 2016 U.S. Non-U.S. OPEB U.S. Non-U.S. OPEB Plans Plans Plans Total Plans Plans Plans Total Net periodic benefit costs Service cost $ 1 $ 1 $ — $ 2 $ — $ 3 $ — $ 3 Interest cost 15 3 1 19 18 4 (1) 21 Expected return on plan assets (19) (4) — (23) (20) (6) — (26) Settlements and curtailments — 1 — 1 — (5) 2 (3) Actuarial loss, net 1 1 — 2 1 — — 1 Prior service cost, net — — (1) (1) — — (2) (2) Net periodic benefit costs $ (2) $ 2 $ — $ — $ (1) $ (4) $ (1) $ (6) Funding contributions $ — $ — $ 1 $ 1 $ 1 $ 1 $ — $ 2 Nine months ended September 30, 2017 Nine months ended September 30, 2016 U.S. Non-U.S. OPEB U.S. Non-U.S. OPEB Plans Plans Plans Total Plans Plans Plans Total Net periodic benefit costs Service cost $ 3 $ 2 $ — $ 5 $ 2 $ 11 $ — $ 13 Interest cost 48 8 1 57 52 12 — 64 Expected return on plan assets (56) (14) — (70) (60) (18) — (78) Settlements and curtailments — 6 — 6 1 (6) — (5) Actuarial loss, net 4 1 — 5 3 2 — 5 Prior service cost, net — — (2) (2) — — (4) (4) Net periodic benefit costs $ (1) $ 3 $ (1) $ 1 $ (2) $ 1 $ (4) $ (5) Funding contributions $ 1 $ 7 $ 2 $ 10 $ 3 $ 41 $ 1 $ 45 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments | |
Carrying amounts and fair values of the financial instruments | September 30, 2017 December 31, 2016 Carrying Fair Carrying Fair amount value amount value Cash and cash equivalents $ 2,717 $ 2,717 $ 3,052 $ 3,052 Restricted cash accounts and investments 503 503 510 511 Long-term debt, including current maturities 7,300 7,415 8,464 8,218 |
Business (Details)
Business (Details) - item | May 31, 2017 | Sep. 30, 2017 |
Songa | ||
Number of mobile offshore drilling units | 7 | |
Number of Harsh Environment Floaters | 4 | |
Number of Midwater Floaters (in drilling units) | 3 | |
Continuing operations | ||
Number of mobile offshore drilling units | 38 | |
Number of Ultra-Deepwater Floaters | 25 | |
Number of Harsh Environment Floaters | 7 | |
Number of Deepwater Floaters | 2 | |
Number of Midwater Floaters (in drilling units) | 4 | |
Number of Ultra-Deepwater drillships under construction (in drilling units) | 4 | |
Sell of Standard Jackup and swamp barge market sectors | Assets sold, not discontinued operations | ||
Number of high specification jackups operated through contract completion or novation | 3 | |
Number of High-Specification Jackups (in drilling units) | 10 | |
Number of High-Specification Jackup under construction (in drilling units) | 5 | |
Sell of Standard Jackup and swamp barge market sectors | Assets sold, not discontinued operations | Continuing operations | ||
Number of high specification jackups operated through contract completion or novation | 2 |
Significant Accounting Polici30
Significant Accounting Policies (Condensed) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | |
Capitalized interest | ||||
Number of newbuilds ceased to capitalize interest | item | 2 | |||
Capitalized interest costs on construction work in progress | $ | $ 31 | $ 41 | $ 91 | $ 130 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)item | |
Recently issued accounting standards | |
Number of revenue streams | item | 1 |
Minimum | Forecast Adjustment | ASU-Leases | |
Recently issued accounting standards | |
Aggregate lease liability | $ 50 |
Right-to-use asset | 50 |
Maximum | Forecast Adjustment | ASU-Leases | |
Recently issued accounting standards | |
Aggregate lease liability | 70 |
Right-to-use asset | $ 70 |
Business Combination (Details)
Business Combination (Details) NOK / shares in Units, $ / shares in Units, $ in Millions | Aug. 13, 2017NOKshares | Aug. 13, 2017USD ($)shares | Sep. 30, 2017SFr / shares | Aug. 13, 2017SFr / shares | Aug. 13, 2017NOKNOK / shares | Aug. 13, 2017USD ($)$ / shares | Dec. 31, 2016SFr / shares | Oct. 29, 2015SFr / shares |
Business Combination | ||||||||
Shares, CHF par value (in Swiss francs per share) | SFr / shares | SFr 0.10 | SFr 0.10 | SFr 15 | |||||
Songa | ||||||||
Business Combination | ||||||||
Newly issued shares (in shares) | shares | 68.6 | 68.6 | ||||||
Shares, CHF par value (in Swiss francs per share) | SFr / shares | SFr 0.10 | |||||||
Business combination consideration (per share) | NOK / shares | NOK 47.50 | |||||||
Maximum cash consideration per shareholder | NOK | NOK 125,000 | |||||||
Equity value of acquisition | NOK 9,100,000,000 | $ 1,200 | ||||||
Enterprise value of acquisition | NOK 26,400,000,000 | $ 3,400 | ||||||
Aggregate consideration | ||||||||
Debt conversion ratio | 0.7145 | 0.7145 | ||||||
Market price (in dollars per share) | $ / shares | $ 8.39 | |||||||
Currency exchange rate | 7.9239 | 7.9239 | ||||||
Songa | Exchangeable Bonds | ||||||||
Business Combination | ||||||||
Debt instrument face value | $ | $ 575 | |||||||
Debt instrument interest rate stated percentage | 0.50% | 0.50% | ||||||
Aggregate consideration | ||||||||
Debt term | 5 years | 5 years | ||||||
Songa | Acquiree Shareholder Loan | ||||||||
Aggregate consideration | ||||||||
Debt assumed | $ | $ 50 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - ADDCL - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying amounts associated with consolidated variable interest entities | ||
Assets | $ 764 | $ 787 |
Liabilities | 14 | 25 |
Net carrying amount | $ 750 | $ 762 |
Drilling Fleet (Details)
Drilling Fleet (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in construction work in progress, including capital expenditures and other capital additions, such as capitalized interest | ||
Construction work in progress, at beginning of period | $ 2,171 | $ 3,735 |
Total capital expenditures | 386 | 1,072 |
Changes in accrued capital additions | (22) | (90) |
Construction in progress sold | (289) | |
Construction work in progress, at end of period | 2,180 | 2,842 |
New builds | ||
Changes in construction work in progress, including capital expenditures and other capital additions, such as capitalized interest | ||
Total capital expenditures | 299 | 959 |
Property and equipment placed into service | (1,672) | |
Other construction projects and capital additions | ||
Changes in construction work in progress, including capital expenditures and other capital additions, such as capitalized interest | ||
Total capital expenditures | 87 | 113 |
Other property and equipment | ||
Changes in construction work in progress, including capital expenditures and other capital additions, such as capitalized interest | ||
Property and equipment placed into service | $ (66) | $ (203) |
Drilling Fleet (Disposal) (Deta
Drilling Fleet (Disposal) (Details) $ / shares in Units, $ in Millions | May 31, 2017item | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Dec. 31, 2016USD ($) |
Assets held and used | ||||||
Loss associated with impairment | $ 94 | |||||
Loss associated with impairment per diluted share | $ / shares | $ 0.25 | |||||
Loss associated with impairment, net of tax | $ 95 | |||||
Dispositions | ||||||
Net cash proceeds from sale of assets | 330 | $ 16 | ||||
Gain (loss) on the sale of assets | $ (9) | $ 9 | (1,602) | 8 | ||
Assets held for sale | ||||||
Dispositions | ||||||
Assets held for sale, included in other current assets | 39 | 39 | $ 6 | |||
Assets held for sale | Rig sales | ||||||
Dispositions | ||||||
Aggregate loss on impairment of assets held for sale | $ 1,400 | $ 11 | $ 1,400 | 26 | ||
Aggregate loss on impairment of assets held for sale, net of tax | $ 25 | |||||
Aggregate loss on impairment of assets per diluted share | $ / shares | $ 3.54 | $ 0.03 | $ 3.60 | $ 0.06 | ||
Aggregate loss on impairment of assets held for sale, tax effect | $ 0 | $ 0 | $ 0 | |||
Assets sold, not discontinued operations | Rig sales | ||||||
Dispositions | ||||||
Net cash proceeds from sale of assets | 3 | $ 11 | ||||
Gain (loss) on the sale of assets | 3 | 2 | 8 | |||
Assets sold, not discontinued operations | Sell of Standard Jackup and swamp barge market sectors | ||||||
Dispositions | ||||||
Number of High-Specification Jackups (in drilling units) | item | 10 | |||||
Number of High-Specification Jackup under construction (in drilling units) | item | 5 | |||||
Number of high specification jackups operated through contract completion or novation | item | 3 | |||||
Number of high specification jackups no longer operated | item | 1 | |||||
Net cash proceeds from sale of assets | 319 | |||||
Gain (loss) on the sale of assets | $ (1,600) | |||||
Gain (loss) on the sale of assets per diluted share | $ / shares | $ (4.08) | |||||
Gain (loss) on disposal of assets, tax effect | $ 0 | |||||
Disposal group operating income | 19 | 25 | 46 | 47 | ||
Assets sold, not discontinued operations | Sale of other assets | ||||||
Dispositions | ||||||
Net cash proceeds from sale of assets | 1 | 1 | 8 | 5 | ||
Gain (loss) on the sale of assets | $ (9) | $ 6 | $ (8) | |||
Assets sold, not discontinued operations | Maximum | Sale of other assets | ||||||
Dispositions | ||||||
Gain (loss) on the sale of assets | $ 1 |
Income Taxes (TaxReturns) (Deta
Income Taxes (TaxReturns) (Details) BRL in Millions, $ in Millions | 9 Months Ended | |||
Sep. 30, 2017USD ($)jurisdiction | Sep. 30, 2016USD ($) | May 19, 2014BRL | Dec. 31, 2005BRL | |
Income Tax Examination | ||||
Annual effective tax rate excluding discrete items (as a percent) | 64.20% | 25.90% | ||
Various discrete tax items | $ 57 | $ 24 | ||
Annual effective tax rate (as a percent) | (3.60%) | 17.80% | ||
Valuation allowance | $ 144 | |||
Income Tax Examination | ||||
Number of jurisdictions with extensions beyond statute of limitations | jurisdiction | 2 | |||
Maximum number of years agreed to extensions beyond the statute of limitations | 20 years | |||
Brazil tax assessment for income tax returns | $ 267 | BRL 846 | ||
Minimum | ||||
Income Tax Examination | ||||
Range of tax returns are subject to examination | 3 years | |||
Maximum | ||||
Income Tax Examination | ||||
Range of tax returns are subject to examination | 6 years | |||
Brazil Tax Assessments 2009 And 2010 | ||||
Income Tax Examination | ||||
Brazil tax assessment for income tax returns | $ 46 | BRL 144 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator for earnings (loss) per share, basic | ||||
Income (loss) from continuing operations attributable to controlling interest | $ (1,417) | $ 218 | $ (3,016) | $ 535 |
Undistributed earnings allocable to participating securities | (3) | (8) | ||
Income (loss) from continuing operations available to shareholders | $ (1,417) | $ 215 | $ (3,016) | $ 527 |
Denominator for earnings (loss) per share, basic | ||||
Weighted-average shares outstanding | 391 | 365 | 391 | 365 |
Weighted-average shares for per share calculation, basic | 391 | 365 | 391 | 365 |
Per share earnings (loss) from continuing operations, basic | $ (3.62) | $ 0.59 | $ (7.72) | $ 1.44 |
Numerator for earnings (loss) per share, diluted | ||||
Income (loss) from continuing operations attributable to controlling interest | $ (1,417) | $ 218 | $ (3,016) | $ 535 |
Undistributed earnings allocable to participating securities | (3) | (9) | ||
Income (loss) from continuing operations available to shareholders | $ (1,417) | $ 215 | $ (3,016) | $ 526 |
Denominator for earnings (loss) per share, diluted | ||||
Weighted-average shares outstanding | 391 | 365 | 391 | 365 |
Weighted-average shares for per share calculation, diluted | 391 | 365 | 391 | 365 |
Per share earnings (loss) from continuing operations, diluted | $ (3.62) | $ 0.59 | $ (7.72) | $ 1.44 |
Share-based awards | ||||
Anti-dilutive securities | ||||
Share-based awards excluded from earnings per share calculation (in shares) | 5.6 | 3.6 | 4.7 | 2.9 |
Debt (Details)
Debt (Details) $ in Millions | May 05, 2017USD ($) | Jun. 30, 2014USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jul. 11, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 01, 2016USD ($) |
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 7,383 | $ 7,383 | $ 8,546 | ||||||
Debt due within one year | 807 | 807 | 731 | ||||||
Long-term debt | 6,576 | 6,576 | 7,815 | ||||||
Carrying amount | |||||||||
Total debt | 7,300 | 7,300 | 8,464 | ||||||
Debt due within one year | 799 | 799 | 724 | ||||||
Long-term debt | 6,501 | 6,501 | 7,740 | ||||||
Proceeds from issuance of debt | 403 | $ 1,210 | |||||||
Gain (loss) on retirement of debt | (1) | $ 110 | $ (49) | $ 148 | |||||
Five-Year Revolving Credit Facility | |||||||||
Carrying amount | |||||||||
Borrowing capacity, maximum | $ 3,000 | ||||||||
Credit facility term | 5 years | ||||||||
Debt to tangible capitalization ratio | 0.6 | ||||||||
Commitment fee percentage at period end | 0.35% | ||||||||
Credit facility amount outstanding | 0 | $ 0 | |||||||
Letters of credit issued and outstanding | 0 | 0 | |||||||
Credit facility available borrowing capacity | 3,000 | $ 3,000 | |||||||
Five-Year Revolving Credit Facility | Adjusted LIBOR | |||||||||
Carrying amount | |||||||||
Spread on variable rate basis (as a percent) | 2.00% | ||||||||
Percentage reduction to the calculated variable rate | 1.00% | ||||||||
Five-Year Revolving Credit Facility | Minimum | |||||||||
Carrying amount | |||||||||
Commitment fee percentage at period end | 0.15% | ||||||||
Five-Year Revolving Credit Facility | Minimum | Adjusted LIBOR | |||||||||
Carrying amount | |||||||||
Spread on variable rate basis (as a percent) | 1.125% | ||||||||
Five-Year Revolving Credit Facility | Maximum | |||||||||
Carrying amount | |||||||||
Commitment fee percentage at period end | 0.35% | ||||||||
Five-Year Revolving Credit Facility | Maximum | Adjusted LIBOR | |||||||||
Carrying amount | |||||||||
Spread on variable rate basis (as a percent) | 2.00% | ||||||||
5.05% Senior Notes due December 2016 | |||||||||
Carrying amount | |||||||||
Debt instrument interest rate stated percentage | 5.05% | 5.05% | |||||||
Aggregate principal amount repaid | $ 36 | ||||||||
2.5% Senior Notes due October 2017 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 152 | $ 152 | 485 | ||||||
Debt due within one year | 152 | 152 | 485 | ||||||
Carrying amount | |||||||||
Total debt | 152 | 152 | 484 | ||||||
Debt due within one year | $ 152 | $ 152 | 484 | ||||||
Debt instrument interest rate stated percentage | 2.50% | 2.50% | |||||||
Interest rate, as adjusted (as a percent) | 4.50% | ||||||||
Aggregate principal amount repaid | $ 62 | 65 | |||||||
Aggregate debt repurchase | $ 271 | 271 | |||||||
Eksportfinans Loans due January 2018 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 27 | 27 | 123 | ||||||
Debt due within one year | 27 | 27 | 98 | ||||||
Carrying amount | |||||||||
Total debt | 27 | 27 | 123 | ||||||
Debt due within one year | 27 | 27 | 98 | ||||||
6.00% Senior Notes due March 2018 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 319 | 319 | 754 | ||||||
Debt due within one year | 319 | 319 | |||||||
Carrying amount | |||||||||
Total debt | 319 | 319 | 757 | ||||||
Debt due within one year | $ 319 | $ 319 | |||||||
Debt instrument interest rate stated percentage | 6.00% | 6.00% | |||||||
Aggregate principal amount repaid | $ 35 | 35 | |||||||
Aggregate debt repurchase | $ 400 | 400 | |||||||
7.375% Senior Notes due April 2018 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 82 | 82 | 211 | ||||||
Debt due within one year | 82 | 82 | |||||||
Carrying amount | |||||||||
Total debt | 82 | 82 | 211 | ||||||
Debt due within one year | $ 82 | $ 82 | |||||||
Debt instrument interest rate stated percentage | 7.375% | 7.375% | |||||||
Aggregate principal amount repaid | $ 1 | 26 | |||||||
Aggregate debt repurchase | $ 128 | 128 | |||||||
6.50% Senior Notes due November 2020 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 292 | 292 | 508 | ||||||
Carrying amount | |||||||||
Total debt | $ 295 | $ 295 | 513 | ||||||
Debt instrument interest rate stated percentage | 6.50% | 6.50% | |||||||
Aggregate principal amount repaid | $ 9 | 32 | |||||||
Aggregate debt repurchase | $ 207 | $ 348 | 207 | 348 | |||||
6.375% Senior Notes due December 2021 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 332 | 332 | 552 | ||||||
Carrying amount | |||||||||
Total debt | $ 330 | $ 330 | 549 | ||||||
Debt instrument interest rate stated percentage | 6.375% | 6.375% | |||||||
Interest rate, as adjusted (as a percent) | 8.375% | ||||||||
Aggregate principal amount repaid | $ 7 | 120 | |||||||
Aggregate debt repurchase | $ 213 | 476 | 213 | 476 | |||||
5.52% Senior Notes due May 2022 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 381 | 381 | |||||||
Debt due within one year | 77 | 77 | |||||||
Carrying amount | |||||||||
Total debt | 375 | 375 | |||||||
Debt due within one year | $ 75 | $ 75 | |||||||
Debt instrument interest rate stated percentage | 5.52% | 5.52% | 5.52% | ||||||
Debt instrument face value | $ 410 | ||||||||
Proceeds from issuance of debt | $ 403 | ||||||||
Redemption price of debt instrument (as a percent) | 100.00% | ||||||||
Percentage of principal amount that the holder of the note may require the entity to repurchase upon the occurrence of certain events | 100.00% | ||||||||
Aggregate carrying amount assets pledged | $ 95 | ||||||||
3.80% Senior Notes due October 2022 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 506 | $ 506 | 539 | ||||||
Carrying amount | |||||||||
Total debt | $ 501 | $ 501 | 534 | ||||||
Debt instrument interest rate stated percentage | 3.80% | 3.80% | |||||||
Interest rate, as adjusted (as a percent) | 5.80% | ||||||||
Aggregate principal amount repaid | $ 33 | 38 | |||||||
Aggregate debt repurchase | 157 | 157 | |||||||
9.00% Senior Notes due July 2023 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 1,250 | 1,250 | 1,250 | ||||||
Carrying amount | |||||||||
Total debt | $ 1,215 | $ 1,215 | 1,211 | ||||||
Debt instrument interest rate stated percentage | 9.00% | 9.00% | |||||||
7.75% Senior Secured Notes due October 2024 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 570 | $ 570 | 600 | ||||||
Debt due within one year | 60 | 60 | 60 | ||||||
Carrying amount | |||||||||
Total debt | 556 | 556 | 583 | ||||||
Debt due within one year | $ 57 | $ 57 | 57 | ||||||
Debt instrument interest rate stated percentage | 7.75% | 7.75% | |||||||
6.25% Senior Notes due December 2024 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 594 | $ 594 | 625 | ||||||
Debt due within one year | 63 | 63 | 63 | ||||||
Carrying amount | |||||||||
Total debt | 580 | 580 | 609 | ||||||
Debt due within one year | $ 60 | $ 60 | 60 | ||||||
Debt instrument interest rate stated percentage | 6.25% | 6.25% | |||||||
7.45% Notes due April 2027 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 88 | $ 88 | 88 | ||||||
Carrying amount | |||||||||
Total debt | $ 86 | $ 86 | 86 | ||||||
Debt instrument interest rate stated percentage | 7.45% | 7.45% | |||||||
Aggregate principal amount repaid | 8 | ||||||||
8% Debentures due April 2027 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 57 | $ 57 | 57 | ||||||
Carrying amount | |||||||||
Total debt | $ 57 | $ 57 | 57 | ||||||
Debt instrument interest rate stated percentage | 8.00% | 8.00% | |||||||
7.00% Notes due June 2028 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 300 | $ 300 | 300 | ||||||
Carrying amount | |||||||||
Total debt | $ 307 | $ 307 | 308 | ||||||
Debt instrument interest rate stated percentage | 7.00% | 7.00% | |||||||
Capital lease contract due August 2029 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 545 | $ 545 | 566 | ||||||
Debt due within one year | 27 | 27 | 25 | ||||||
Carrying amount | |||||||||
Total debt | 545 | 545 | 566 | ||||||
Debt due within one year | 27 | 27 | 25 | ||||||
7.5% Notes due April 2031 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | 588 | 588 | 588 | ||||||
Carrying amount | |||||||||
Total debt | $ 585 | $ 585 | 585 | ||||||
Debt instrument interest rate stated percentage | 7.50% | 7.50% | |||||||
Aggregate principal amount repaid | 5 | ||||||||
6.80% Senior Notes due March 2038 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 1,000 | $ 1,000 | 1,000 | ||||||
Carrying amount | |||||||||
Total debt | $ 991 | $ 991 | 991 | ||||||
Debt instrument interest rate stated percentage | 6.80% | 6.80% | |||||||
7.35% Senior Notes due December 2041 | |||||||||
Principal amount | |||||||||
Total debt, excluding debt-related balances | $ 300 | $ 300 | 300 | ||||||
Carrying amount | |||||||||
Total debt | $ 297 | $ 297 | $ 297 | ||||||
Debt instrument interest rate stated percentage | 7.35% | 7.35% | |||||||
Interest rate, as adjusted (as a percent) | 9.35% | ||||||||
Tendered Notes | |||||||||
Carrying amount | |||||||||
Tender Offer Principal Amount | $ 1,500 | $ 1,000 | |||||||
Aggregate cash payment made for debt redemption | $ 1,269 | 876 | |||||||
Gain (loss) on retirement of debt | $ (1) | 104 | (48) | 104 | |||||
Aggregate debt repurchase | $ 1,219 | 981 | 1,219 | 981 | |||||
Debt Redeemed | |||||||||
Carrying amount | |||||||||
Aggregate principal amount repaid | 147 | 365 | |||||||
Aggregate cash payment made for debt redemption | 147 | 320 | |||||||
Gain (loss) on retirement of debt | $ 6 | $ (1) | $ 44 |
Postemployment Benefit Plans (C
Postemployment Benefit Plans (Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net periodic benefit costs, before tax | ||||
Service cost | $ 2 | $ 3 | $ 5 | $ 13 |
Interest cost | 19 | 21 | 57 | 64 |
Expected return on plan assets | (23) | (26) | (70) | (78) |
Settlements and curtailments | 1 | (3) | 6 | (5) |
Actuarial loss, net | 2 | 1 | 5 | 5 |
Prior service cost, net | (1) | (2) | (2) | (4) |
Net periodic benefit costs | (6) | 1 | (5) | |
Funding contributions | 1 | 2 | 10 | 45 |
OPEB Plans | ||||
Net periodic benefit costs, before tax | ||||
Interest cost | 1 | 1 | ||
Interest benefit | (1) | |||
Settlements and curtailments | 2 | |||
Prior service cost, net | (1) | (2) | (2) | (4) |
Net periodic benefit costs | (1) | (1) | (4) | |
Funding contributions | 1 | 2 | 1 | |
U.S. | Transocean Plans | ||||
Net periodic benefit costs, before tax | ||||
Service cost | 1 | 3 | 2 | |
Interest cost | 15 | 18 | 48 | 52 |
Expected return on plan assets | (19) | (20) | (56) | (60) |
Settlements and curtailments | 1 | |||
Actuarial loss, net | 1 | 1 | 4 | 3 |
Net periodic benefit costs | (2) | (1) | (1) | (2) |
Funding contributions | 1 | 1 | 3 | |
Non-U.S. Plans | Transocean Plans | ||||
Net periodic benefit costs, before tax | ||||
Service cost | 1 | 3 | 2 | 11 |
Interest cost | 3 | 4 | 8 | 12 |
Expected return on plan assets | (4) | (6) | (14) | (18) |
Settlements and curtailments | 1 | (5) | 6 | (6) |
Actuarial loss, net | 1 | 1 | 2 | |
Net periodic benefit costs | $ 2 | (4) | 3 | 1 |
Funding contributions | $ 1 | $ 7 | $ 41 |
Commitments and Contingencies (
Commitments and Contingencies (Cont) (Details) BRL in Millions, $ in Millions | May 29, 2015USD ($)item | Jan. 03, 2013USD ($)item | Jun. 30, 2016USD ($) | Aug. 31, 2015USD ($) | Oct. 31, 2007subsidiary | Sep. 30, 2017USD ($)claimitem | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2004plaintifflawsuit | Sep. 30, 2017BRLclaimplaintifflawsuitsubsidiaryitem | Sep. 30, 2017USD ($)claimplaintifflawsuitsubsidiaryitem | Apr. 22, 2010USD ($)item | Dec. 31, 2006subsidiary |
Macondo well incident | |||||||||||||
Contingencies | |||||||||||||
Amount of fines, recoveries and civil penalties | $ 250 | $ 244 | |||||||||||
Macondo well incident | Insurance coverage | |||||||||||||
Contingencies | |||||||||||||
Insured status under excess liability insurance program | $ 950 | ||||||||||||
Amount covered by first layer of excess liability insurance program | 150 | ||||||||||||
Amount covered by second layer of excess liability insurance program | 150 | ||||||||||||
Amount covered by third layer of excess liability insurance program | 200 | ||||||||||||
Amount covered by fourth layer of excess liability insurance program | 200 | ||||||||||||
Amount covered by fifth layer of excess liability insurance program | 250 | ||||||||||||
Deductible amount under excess liability insurance program | 15 | ||||||||||||
Amount covered by self insured layer of excess liability insurance program | $ 50 | ||||||||||||
Number of excess liability insurance coverage layers | item | 4 | ||||||||||||
Number of Bermuda Market Insurers | item | 4 | ||||||||||||
Insurance proceeds received | $ 10 | 20 | |||||||||||
Number of claims settled | claim | 2 | ||||||||||||
Number of claims remaining | claim | 1 | 1 | |||||||||||
Macondo well incident | Plea Agreement | |||||||||||||
Contingencies | |||||||||||||
Number of subsidiaries that pled guilty to charges | item | 1 | ||||||||||||
Number of misdemeanor count of negligently discharging oil | item | 1 | ||||||||||||
Amount outstanding under the Plea Agreement | 60 | ||||||||||||
Amount paid for obligations under the Plea Agreement and Consent Decree including interest | $ 400 | $ 60 | $ 60 | ||||||||||
PSC Settlement Agreement | |||||||||||||
Contingencies | |||||||||||||
Settlement agreement subject to court approval | $ 212 | ||||||||||||
Settlement, legal fees | $ 25 | ||||||||||||
Number of classes of plaintiffs | item | 2 | ||||||||||||
Settlement allocated to Punitive Damage Class (as a percent) | 72.80% | ||||||||||||
Settlement allocated to Assigned Claims Class (as a percent) | 27.20% | ||||||||||||
Number of claimants opted out of settlement agreement | item | 30 | ||||||||||||
Cash payment into an escrow account pending approval by MDL Court | $ 25 | $ 212 | |||||||||||
Escrow Deposit | $ 237 | $ 237 | |||||||||||
Asbestos litigation | MS | |||||||||||||
Other legal proceedings | |||||||||||||
Number of actions or claims that were pending | lawsuit | 21 | ||||||||||||
Number of claimants | plaintiff | 769 | ||||||||||||
Number of pending separate lawsuits remained, each with a single plaintiff | item | 15 | 15 | |||||||||||
Asbestos litigation | LA | |||||||||||||
Other legal proceedings | |||||||||||||
Number of pending separate lawsuits remained, each with a single plaintiff | plaintiff | 8 | 8 | |||||||||||
Asbestos litigation | Wrongful death and personal injury | |||||||||||||
Other legal proceedings | |||||||||||||
Number of subsidiaries involved in lawsuits arising from design, construction and refurbishment of major industrial complexes | subsidiary | 1 | 1 | |||||||||||
Number of lawsuits alleging personal injury from asbestos exposure for subsidiary involved in design, construction and refurbishment of major industrial complexes | lawsuit | 123 | 123 | |||||||||||
Insurance limits potentially available for damages in lawsuits regarding personal injury from asbestos exposure for subsidiary involved in design, construction and refurbishment of major industrial | $ 1,000 | ||||||||||||
Rio de Janeiro tax assessment | |||||||||||||
Other legal proceedings | |||||||||||||
Tax assessment from state tax authorities | BRL 525 | $ 166 | |||||||||||
Number of subsidiaries involved in tax assessment relating to import license | subsidiary | 1 | ||||||||||||
Nigerian Cabotage Act litigation | |||||||||||||
Other legal proceedings | |||||||||||||
Number of subsidiaries that were served a Notice and Demand from the Nigeria Maritime Administration and Safety Agency (NIMASA) | subsidiary | 3 | ||||||||||||
Percentage of surcharge on the value of contracts performed in Nigeria pursuant to the Coastal and Inland Shipping (Cabotage) Act 2003 (the Cabotage Act) | 2.00% | ||||||||||||
Hazardous waste disposal sites | |||||||||||||
Other legal proceedings | |||||||||||||
Percentage of liability for remediation and related costs | 8.00% | 8.00% | |||||||||||
Number of subsidiaries ordered by California Regional Water Quality Control Board to develop testing plan for Alhambra, California site | subsidiary | 1 | 1 | |||||||||||
Hazardous waste disposal sites | Minimum | |||||||||||||
Other legal proceedings | |||||||||||||
Minimum number of subsidiaries likely to be named potentially responsible party by US Environmental Protection Agency for superfund site (in counts) | subsidiary | 1 | 1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) SFr / shares in Units, shares in Millions, SFr in Billions, $ in Billions | Jan. 07, 2016shares | May 31, 2009CHF (SFr) | May 31, 2009USD ($) | Sep. 30, 2017subsidiarySFr / sharesshares | Dec. 31, 2016SFr / sharesshares | Oct. 29, 2015SFr / shares |
Par value reduction | ||||||
Approved par value of common stock (in Swiss francs per share) | SFr / shares | SFr 0.10 | |||||
Par value of common stock (in Swiss francs per share) | SFr / shares | SFr 0.10 | SFr 0.10 | SFr 15 | |||
Shares held in treasury | ||||||
Authorized amount for repurchase of shares | SFr 3.5 | $ 3.6 | ||||
Shares repurchased and cancelled (in shares) | shares | 2.9 | |||||
Shares held by subsidiary | ||||||
Number of subsidiaries to whom shares were issued | subsidiary | 2 | |||||
Number of shares held by subsidiary | shares | 3.6 | 5.4 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Financial instruments | ||
Restricted cash accounts and investments | $ 476 | $ 387 |
Carrying amount of cash equivalents | 2,200 | 2,600 |
Carrying amount | ||
Financial instruments | ||
Cash and cash equivalents | 2,717 | 3,052 |
Restricted cash accounts and investments | 503 | 510 |
Long-term debt, including current maturities | 7,300 | 8,464 |
Fair value | ||
Financial instruments | ||
Cash and cash equivalents | 2,717 | 3,052 |
Restricted cash accounts and investments | 503 | 511 |
Long-term debt, including current maturities | 7,415 | 8,218 |
Other current assets | ||
Financial instruments | ||
Restricted cash accounts and investments | 453 | 368 |
Other assets | ||
Financial instruments | ||
Restricted cash accounts and investments | 23 | 19 |
Eksportfinans Loans due January 2018 | Carrying amount | ||
Financial instruments | ||
Restricted cash accounts and investments | 27 | 123 |
Significant other observable inputs | Eksportfinans Loans due January 2018 | Fair value | ||
Financial instruments | ||
Restricted cash accounts and investments | $ 27 | $ 124 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Oct. 17, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent events | |||
Proceeds from issuance of debt | $ 403 | $ 1,210 | |
Subsequent Event | 7.50% Senior Notes due January 2026 | |||
Subsequent events | |||
Debt instrument face value | $ 750 | ||
Debt instrument interest rate stated percentage | 7.50% | ||
Proceeds from issuance of debt | $ 742 | ||
Percentage of principal amount that the holder of the note may require the entity to repurchase upon the occurrence of certain events | 100.00% |