Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 25, 2016 | |
Entity Registrant Name | Transocean Partners LLC | |
Entity Central Index Key | 1,607,250 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Common units | ||
Entity Common Stock, Shares Outstanding | 40,914,962 | |
Subordinated units | ||
Entity Common Stock, Shares Outstanding | 27,586,207 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating revenues | ||||
Contract drilling revenues | $ 156 | $ 121 | $ 449 | $ 414 |
Other revenues | 4 | 4 | 10 | 12 |
Total operating revenues | 160 | 125 | 459 | 426 |
Costs and expenses | ||||
Operating and maintenance | 46 | 73 | 154 | 191 |
Depreciation | 17 | 17 | 51 | 51 |
General and administrative | 7 | 6 | 20 | 17 |
Total costs and expenses | 70 | 96 | 225 | 259 |
Loss on impairment | (289) | (356) | ||
Loss on disposal of assets | (1) | |||
Operating income (loss) | 90 | (260) | 234 | (190) |
Other income (loss) | ||||
Interest income | 1 | 2 | ||
Interest expense | (1) | (1) | ||
Income (loss) before income tax expense | 90 | (260) | 234 | (189) |
Income tax expense | 5 | 1 | 13 | 9 |
Net income (loss) | 85 | (261) | 221 | (198) |
Net income (loss) attributable to noncontrolling interest | 43 | (127) | 112 | (93) |
Net income (loss) attributable to controlling interest | $ 42 | $ (134) | 109 | (105) |
Common units | ||||
Other income (loss) | ||||
Net income (loss) attributable to controlling interest | $ 65 | $ (63) | ||
Earnings (loss) per unit—basic | ||||
Earnings (loss) per unit—basic | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) |
Earnings (loss) per unit—diluted | ||||
Earnings (loss) per unit—diluted | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) |
Weighted‑average units outstanding—basic | ||||
Weighted-average units outstanding—basic (in units) | 41 | 41 | 41 | 41 |
Weighted‑average units outstanding—diluted | ||||
Weighted-average units outstanding—diluted (in units) | 41 | 41 | 41 | 41 |
Subordinated units | ||||
Other income (loss) | ||||
Net income (loss) attributable to controlling interest | $ 44 | $ (42) | ||
Earnings (loss) per unit—basic | ||||
Earnings (loss) per unit—basic | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) |
Earnings (loss) per unit—diluted | ||||
Earnings (loss) per unit—diluted | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) |
Weighted‑average units outstanding—basic | ||||
Weighted-average units outstanding—basic (in units) | 28 | 28 | 28 | 28 |
Weighted‑average units outstanding—diluted | ||||
Weighted-average units outstanding—diluted (in units) | 28 | 28 | 28 | 28 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 221 | $ 159 |
Accounts receivable | 105 | 115 |
Accounts receivable from affiliates | 1 | 1 |
Materials and supplies, net of allowance for obsolescence of $7 and $6 at September 30, 2016 and December 31, 2015, respectively | 36 | 34 |
Prepaid assets | 11 | 7 |
Total current assets | 374 | 316 |
Property and equipment | 2,317 | 2,296 |
Less accumulated depreciation | (458) | (401) |
Property and equipment, net | 1,859 | 1,895 |
Deferred income taxes, net | 6 | 10 |
Other assets | 7 | 10 |
Total assets | 2,246 | 2,231 |
Liabilities and equity | ||
Accounts payable to affiliates | 45 | 51 |
Deferred revenues | 2 | 15 |
Other current liabilities | 2 | 2 |
Total current liabilities | 49 | 68 |
Long-term tax liability | 9 | 3 |
Drilling contract intangible liability | 3 | 14 |
Other long-term liabilities | 1 | |
Total long-term liabilities | 12 | 18 |
Commitments and contingencies | ||
Total members' equity | 1,302 | 1,262 |
Noncontrolling interest | 883 | 883 |
Total equity | 2,185 | 2,145 |
Total liabilities and equity | 2,246 | 2,231 |
Common units | ||
Liabilities and equity | ||
Common units, 40,914,962 and 41,287,810 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 780 | 757 |
Total equity | 780 | 757 |
Subordinated units | ||
Liabilities and equity | ||
Subordinated units, 27,586,207 issued and outstanding at September 30, 2016 and December 31, 2015 | 522 | 505 |
Total equity | $ 522 | $ 505 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for obsolescence on materials and supplies | $ 7 | $ 6 |
Common units | ||
Units issued | 40,914,962 | 41,287,810 |
Units outstanding | 40,914,962 | 41,287,810 |
Subordinated units | ||
Units issued | 27,586,207 | 27,586,207 |
Units outstanding | 27,586,207 | 27,586,207 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Millions, $ in Millions | Common units | Subordinated units | Total members' equity | Noncontrolling interest | Total |
Balance, beginning of period at Dec. 31, 2014 | $ 847 | $ 564 | $ 1,411 | $ 1,040 | $ 2,451 |
Balance, beginning of period (in shares) at Dec. 31, 2014 | 41.4 | 27.6 | |||
Increase (Decrease) in Partners' Capital | |||||
Net income (loss) attributable to controlling interest | $ (63) | $ (42) | (105) | (105) | |
Net income (loss) | (198) | ||||
Contributions for parent payment of patent royalties | 10 | 7 | 17 | 17 | |
Distributions of available cash to unitholders | (45) | (30) | (75) | (75) | |
Distributions to holder of noncontrolling interests | (76) | (76) | |||
Net income (loss) attributable to noncontrolling interest | (93) | 93 | |||
Balance, end of period at Sep. 30, 2015 | $ 749 | $ 499 | 1,248 | 871 | 2,119 |
Balance, end of period (in shares) at Sep. 30, 2015 | 41.4 | 27.6 | |||
Balance, beginning of period at Dec. 31, 2014 | $ 847 | $ 564 | 1,411 | 1,040 | 2,451 |
Balance, beginning of period (in shares) at Dec. 31, 2014 | 41.4 | 27.6 | |||
Balance, end of period at Dec. 31, 2015 | $ 757 | $ 505 | 1,262 | 883 | 2,145 |
Balance, end of period (in shares) at Dec. 31, 2015 | 41.3 | 27.6 | |||
Increase (Decrease) in Partners' Capital | |||||
Net income (loss) attributable to controlling interest | $ 65 | $ 44 | 109 | 109 | |
Net income (loss) | 221 | ||||
Contributions for parent payment of patent royalties | 5 | 3 | 8 | 8 | |
Distributions of available cash to unitholders | (44) | (30) | (74) | (74) | |
Distributions to holder of noncontrolling interests | (112) | (112) | |||
Net income (loss) attributable to noncontrolling interest | 112 | (112) | |||
Cancellation of repurchased common units | $ (3) | (3) | (3) | ||
Cancellation of repurchased common units (in shares) | (0.4) | ||||
Balance, end of period at Sep. 30, 2016 | $ 780 | $ 522 | $ 1,302 | $ 883 | $ 2,185 |
Balance, end of period (in shares) at Sep. 30, 2016 | 40.9 | 27.6 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net income (loss) | $ 221 | $ (198) |
Adjustments to reconcile to net cash provided by operating activities | ||
Amortization of drilling contract intangible | (11) | (11) |
Depreciation | 51 | 51 |
Patent royalties expense | 8 | 17 |
Loss on impairment | 356 | |
Deferred income taxes | 3 | |
Other, net | 1 | 4 |
Changes in deferred revenues, net | (13) | (11) |
Changes in deferred costs, net | 3 | 1 |
Changes in operating assets and liabilities | 1 | 35 |
Net cash provided by operating activities | 264 | 244 |
Cash flows from investing activities | ||
Payments to affiliates for capital expenditures | (18) | (12) |
Proceeds from affiliates for disposal of assets, net | 5 | 6 |
Net cash used in investing activities | (13) | (6) |
Cash flows from financing activities | ||
Repayment of working capital note payable to affiliate | (43) | |
Distributions of available cash to unitholders | (74) | (75) |
Distributions to holder of noncontrolling interests | (112) | (76) |
Payments to repurchase common units | (3) | |
Contributions for parent indemnification of lost revenues | 10 | |
Net cash used in financing activities | (189) | (184) |
Net increase in cash and cash equivalents | 62 | 54 |
Cash and cash equivalents at beginning of period | 159 | 86 |
Cash and cash equivalents at end of period | $ 221 | $ 140 |
Business
Business | 9 Months Ended |
Sep. 30, 2016 | |
Business | |
Business | Note 1—Business Transocean Partners LLC (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean Partners”, “we”, “us”, or “our”), a Marshall Islands limited liability company, was formed on February 6, 2014 by Transocean Partners Holdings Limited, a Cayman Islands company (the “Transocean Member”) and a wholly owned subsidiary of Transocean Ltd. (together with its affiliates, unless the context requires otherwise, “Transocean”), to own, operate and acquire modern, technologically advanced offshore drilling rigs. At September 30, 2016, the drilling units in our fleet included the ultra‑deepwater drillships Discoverer Inspiration and Discoverer Clear Leader and the ultra‑deepwater semisubmersible Development Driller III , which are located in the United States (“U.S.”) Gulf of Mexico. We own a 51 percent interest in each of the entities that owns and operates the drilling units in our fleet (each individually, a “RigCo”, and collectively, the “RigCos”). The Transocean Member owns the remaining 49 percent noncontrolling interest in each of the RigCos. At September 30, 2016 and December 31, 2015, the Transocean Member held 21.3 million common units and 27.6 million subordinated units, which collectively represented a 71.3 percent and 70.9 percent, respectively, limited liability company interest in us, and all of our incentive distribution rights. See Note 8—Equity. On July 31, 2016, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Transocean and two wholly owned subsidiaries of Transocean. Upon the closing of the merger as contemplated by the Merger Agreement, we will merge with one of the Transocean subsidiaries, with Transocean Partners continuing as the surviving company as a wholly owned indirect subsidiary of Transocean Ltd. Each of our common units that is issued and outstanding immediately prior to the closing, other than units held by Transocean and its subsidiaries, will be converted into the right to receive 1.1427 Transocean Ltd. shares. If the transaction is completed, our common units will cease to be publicly traded on the New York Stock Exchange. The merger has been approved by our board of directors and our conflicts committee, by a special committee of the board of directors of Transocean Ltd., and by the boards of directors of the Transocean subsidiary companies that are parties to the Merger Agreement. Consummation of the merger is subject to various conditions, including approval of the Merger Agreement by our common unitholders and other customary closing conditions. Such unitholder approval requires at least 50.1 percent of the common units not held by Transocean. If approved, we expect the closing of the merger will take place in the fourth quarter of 2016. See Note 11—Subsequent Events. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
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 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 (“SEC”). 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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 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, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 included in our annual report on Form 10‑K filed on February 25, 2016. 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 allocated costs and related party transactions, materials and supplies obsolescence, property and equipment, drilling contract intangible liability, income taxes and equity‑based compensation. 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. 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. Subsequent events —We evaluate subsequent events through the time of our filing on the date we issue our financial statements. See Note 11—Subsequent Events. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 3—New Accounting Pronouncements Recently issued accounting standards Presentation of financial statements —Effective with our annual report for the year ending December 31, 2016, we will adopt the accounting standards update that requires us to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. The update is effective for the annual period ending after December 15, 2016 and for interim and annual periods thereafter. We do not expect that our adoption will have a material effect on the disclosures contained in our notes to condensed consolidated financial statements. Stock compensation —Effective no later than January 1, 2017, we will adopt 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, which permits early adoption, is effective for annual periods beginning after December 15, 2016 and 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. 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, which permits early adoption, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We are evaluating the requirements to determine the effect 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. We are evaluating the requirements to determine the effect 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. |
Goodwill Impairment
Goodwill Impairment | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill Impairment | |
Goodwill Impairment | Note 4—Goodwill Impairment During the year ended December 31, 2015, we noted impairment indicators that the fair value of our goodwill could have fallen below its carrying amount. Such impairment indicators included further reduction in the market value of our publicly traded common units and oil and natural gas prices as well as projected reductions in dayrates and utilization. As a result, we performed interim goodwill impairment tests as of March 31 and September 30, 2015 and determined that the goodwill associated with our reporting unit was fully impaired. In the three and nine months ended September 30, 2015, we recognized a loss of $289 million and $356 million, respectively, associated with the impairment of our then remaining goodwill, which had no tax effect, and of which $148 million and $182 million, respectively, was attributable to controlling interest ($2.13 per diluted unit and $2.63 per diluted unit) and $141 million and $174 million, respectively, was attributable to noncontrolling interest. We estimated the implied fair value of the goodwill using a variety of valuation methods, including the income and market approaches. 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 reporting unit, such as future oil and natural gas prices, projected demand for our services, rig availability and dayrates. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 5—Income Taxes We are organized as a limited liability company under the laws of The Republic of the Marshall Islands and are a resident in the United Kingdom (the “U.K.”) for taxation purposes. We calculate our provision for income taxes based on the laws and rates applicable in the jurisdictions in which we operate and earn income. For the nine months ended September 30, 2016 and 2015, our estimated effective tax rate was 5.4 percent and 6.1 percent, respectively, based on estimated income before income taxes, after excluding the loss on impairment. |
Earnings (loss) per unit
Earnings (loss) per unit | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (loss) per unit | |
Earnings (loss) per unit | Note 6—Earnings (Loss) Per Unit The numerator and denominator used for the computation of basic and diluted per unit earnings, were as follows (in millions, except per unit data): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Numerator for earnings (loss) per unit Net income (loss) attributable to controlling interest $ $ $ $ $ $ $ $ Undistributed earnings allocable to participating securities — — — — — — — — Net income (loss) available to unitholders $ $ $ $ $ $ $ $ Net income (loss) available to common unitholders $ $ $ $ $ $ $ $ Net income (loss) available to subordinated unitholders $ $ $ $ $ $ $ $ Denominator for earnings (loss) per unit – common units Weighted-average common units outstanding Effect of equity-based awards — — — — — — — — Weighted-average common units for per unit calculation Denominator for earnings (loss) per unit – subordinated units Weighted-average subordinated units outstanding Effect of equity-based awards — — — — — — — — Weighted-average subordinated units for per unit calculation Earnings (loss) per unit Earnings (loss) per common unit $ $ $ $ $ $ $ $ Earnings (loss) per subordinated unit $ $ $ $ $ $ $ $ Cash distributions declared and paid per unit Common units $ $ $ $ $ $ $ $ Subordinated units $ $ $ $ $ $ $ $ In the three and nine months ended September 30, 2016, we excluded from the calculation 26,189 equity-based awards since the effect would have been anti-dilutive. In the three and nine months ended September 30, 2015, we did not exclude any equity‑based awards from the calculation. See Note 8—Equity and Note 11—Subsequent Events. |
Credit Agreement
Credit Agreement | 9 Months Ended |
Sep. 30, 2016 | |
Credit Agreement | |
Credit Agreement | Note 7—Credit Agreement Five‑Year Revolving Credit Facility —On August 5, 2014, we entered into a credit agreement, which is scheduled to expire on August 5, 2019, with a Transocean affiliate to establish a committed $300 million five‑year revolving credit facility that allows for uncommitted increases in amounts agreed to by the Transocean affiliate and us (the “Five‑Year Revolving Credit Facility”). We may borrow under the Five‑Year Revolving Credit Facility at either (1) the adjusted London Interbank Offered Rate plus a margin (the “revolving credit facility margin”), which ranges from 1.625 percent to 2.250 percent based on our leverage ratio, as defined, or (2) the base rate specified in the credit agreement plus the revolving credit facility margin, less one percent per annum. Throughout the term of the Five‑Year Revolving Credit Facility, we are required to pay a commitment fee on the daily unused amount of the underlying commitment, which ranges from 0.225 percent to 0.325 percent based on our leverage ratio, as defined. 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 of our assets. The Five‑Year Revolving Credit Facility also includes a covenant imposing a maximum debt ratio, as defined in the credit agreement. Borrowings under the Five‑Year Revolving Credit Facility are subject to acceleration upon the occurrence of an event of default. At September 30, 2016, based on our leverage ratio on that date, the revolving credit facility margin was 1.625 percent. At September 30, 2016 and December 31, 2015, we had no borrowings outstanding and $300 million available borrowing capacity under the Five‑Year Revolving Credit Facility. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity | |
Equity | Note 8—Equity Cash distributions to unitholders —On February 9, May 5 and August 2, 2016, our board of directors approved distributions of $0.3625 per unit to our unitholders. In the three and nine months ended September 30, 2016, we made an aggregate cash distribution of $24 million and $74 million, respectively, to our unitholders of record as of February 22, May 17 and August 15, 2016, including an aggregate cash distribution of $17 million and $53 million, respectively, to the Transocean Member. See Note 11—Subsequent Events. On February 9, May 4 and July 30, 2015, our board of directors approved distributions of $0.3625 per unit to our unitholders. In the three and nine months ended September 30, 2015, we made an aggregate cash distribution of $25 million and $75 million, respectively, to our unitholders of record as of February 20, May 15 and August 12, 2015, including an aggregate cash distribution of $17 million and $53 million, respectively, to the Transocean Member. Cash distributions to holder of noncontrolling interests —In the nine months ended September 30, 2016, the RigCos made an aggregate cash distribution of $228 million, of which $112 million was paid to Transocean as holder of the 49 percent noncontrolling interests in the RigCos. In the nine months ended September 30, 2015, the RigCos made an aggregate cash distribution of $154 million, of which $76 million was paid to Transocean as holder of the 49 percent noncontrolling interests in the RigCos. See Note 11—Subsequent Events. Unit repurchase program —On November 4, 2015, we announced that our board of directors approved a unit repurchase program authorizing us to repurchase up to $40 million of our publicly held common units for cancellation. Subject to market conditions, we may repurchase units from time to time in the open market or in privately negotiated transactions. We may suspend or discontinue the program at any time. The Merger Agreement restricts our ability to repurchase our common units without the consent of Transocean, and we have not made any such repurchases since we entered into the agreement. In the nine months ended September 30, 2016, under the unit repurchase program, we repurchased 386,876 of our publicly held common units at an average market price of $8.23 per unit for an aggregate purchase price of $3 million, and such common units were cancelled. In the year ended December 31, 2015, we repurchased 91,500 of our publicly held common units at an average market price of $9.20 per unit for an aggregate purchase price of $1 million, and such common units were cancelled. At September 30, 2016, the authorization remaining under the unit repurchase program was for the repurchase of up to $36 million of our publicly held common units. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions | |
Related Party Transactions | Note 9—Related Party Transactions Master services and support agreements Secondment agreements —On August 5, 2014, we entered into secondment agreements with certain Transocean affiliates to provide the services of our chief executive officer, rig crews and other personnel. In the three and nine months ended September 30, 2016, we recognized costs of $22 million and $67 million, respectively, recorded in operating and maintenance costs and expenses, and $1 million and $3 million, respectively, recorded in general and administrative costs and expenses, for personnel costs under the secondment agreements. In the three and nine months ended September 30, 2015, we recognized costs of $22 million and $69 million, respectively, recorded in operating and maintenance costs and expenses, and $1 million and $3 million, respectively, recorded in general and administrative costs and expenses, for personnel costs under the secondment agreements. Master services agreements —On August 5, 2014, we entered into master services agreements, which have initial terms of five years, with certain Transocean affiliates, pursuant to which Transocean affiliates provide certain administrative, technical and non‑executive management services to us. We agreed to reimburse Transocean for the cost of all direct labor, materials and expenses incurred in connection with the provision of such services, plus an allocated portion of Transocean’s shared and pooled direct costs, indirect costs and general and administrative costs as determined by Transocean’s internal accounting procedures, and a markup fee under certain circumstances. In the three and nine months ended September 30, 2016, we recognized costs of $23 million and $75 million, respectively, recorded in operating and maintenance costs and expenses, and $6 million and $17 million, respectively, recorded in general and administrative costs and expenses, for services under the master services agreements. In the three and nine months ended September 30, 2015, we recognized costs of $44 million and $101 million, respectively, recorded in operating and maintenance costs and expenses, and $4 million and $13 million, respectively, recorded in general and administrative costs and expenses, for services under the master services agreements. In the three and nine months ended September 30, 2016, we acquired $4 million and $21 million, respectively, of materials and supplies and $6 million and $18 million, respectively, of capital equipment transferred to us by Transocean or purchased through Transocean’s procurement services. In the three and nine months ended September 30, 2015, we acquired $5 million and $20 million, respectively, of materials and supplies and $2 million and $12 million, respectively, of capital equipment transferred to us by Transocean or purchased through Transocean’s procurement services. Other agreements Omnibus agreement —On August 5, 2014, we entered into an omnibus agreement with Transocean and certain of its affiliates (the “Omnibus Agreement”). Under the Omnibus Agreement, Transocean granted us a right of first offer for its remaining ownership interests in each of the RigCos should Transocean decide to sell such interests. Transocean also agreed to offer us within five years of the effective date of the Omnibus Agreement, the opportunity to purchase, subject to requisite government and other third‑party consents, not less than a 51 percent interest in any four of the following six ultra‑deepwater drillships: Deepwater Invictus , Deepwater Thalassa , Deepwater Proteus , Deepwater Pontus , Deepwater Poseidon and Deepwater Conqueror . The purchase price for each drillship will be equal to the greater of the fair market value, taking into account the anticipated cash flows under the associated drilling contracts, or the all‑in construction cost, plus transaction costs. Transocean will select which of these drillships it will offer to us, the timing of the offers and whether it will offer us the opportunity to purchase a greater than 51 percent interest in any offered drillship. In addition, Transocean agreed not to acquire, own or operate any new drilling rig or contract for any drilling rig, in each case that was constructed in 2009 or later and is operating under a contract for five or more years (each, a “Five‑Year Drilling Rig”), subject to certain exceptions, without offering us the opportunity to purchase such rig. We also agreed not to acquire, own, operate, or contract for any drilling rig that is not a Five‑Year Drilling Rig, subject to certain exceptions, without first offering the contract to Transocean. Among other things, Transocean also agreed to indemnify us for any lost revenue, up to $100 million, arising out of the failure to receive an operating dayrate from our customer for Discoverer Clear Leader , for the period commencing on the closing date of our initial public offering through the completion of the rig’s 2014 special periodic survey, which occurred during the three months ended December 31, 2014. In the nine months ended September 30, 2015, we received a cash payment of $10 million for such indemnification claims submitted in the year ended December 31, 2014. Dual‑activity license agreements —All three of our drilling units are equipped with Transocean’s patented dual‑activity technology. Dual‑activity technology employs structures, equipment and techniques using two drilling stations within a dual derrick to perform drilling tasks. Dual‑activity technology allows our rigs to perform simultaneous drilling tasks in a parallel rather than a sequential manner and reduces critical path activity, improving efficiency in both exploration and development drilling. Under our license agreements with Transocean, which expired in May 2016, we were required to pay quarterly patent royalties of between 3 percent and 5 percent of revenues. The Transocean Member agreed to retain and pay the obligation for the quarterly patent royalties. As a result, we recognized non‑cash operating expense for patent royalties, recorded in operating and maintenance costs and expenses, representing the patent royalties paid by the Transocean Member on our behalf, with corresponding entries to members’ equity. In the nine months ended September 30, 2016, we recognized patent royalties expense of $8 million. In the three and nine months ended September 30, 2015, we recognized patent royalties expense of $5 million and $17 million, respectively. Credit agreement —On August 5, 2014, we entered into the Five‑Year Revolving Credit Facility with a Transocean affiliate. See Note 7—Credit Agreement. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments | |
Financial Instruments | Note 10—Financial Instruments The carrying amounts and fair values of our financial instruments were as follows (in millions): September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair amount value amount value 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, 2016 and December 31, 2015, the aggregate carrying amount of our cash equivalents was $174 million and $153 million, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events. | |
Subsequent Events | Note 11—Subsequent Events Cash distribution to unitholders —On November 3, 2016, our board of directors approved a distribution of $0.3625 per unit to our unitholders. We expect to pay the aggregate cash distribution of $25 million on November 22, 2016 to our unitholders of record as of November 14, 2016, including an aggregate cash payment of $18 million to the Transocean Member. Cash distribution to holder of noncontrolling interests —Subsequent to September 30, 2016, the RigCos made an aggregate cash distribution of $52 million, of which $25 million was paid to Transocean as holder of the 49 percent noncontrolling interests in the RigCos. Merger —On October 4, 2016, we announced that we would convene a special meeting of our common unitholders to approve the Merger Agreement with Transocean. The meeting, which will be open to unitholders of record as of September 22, 2016, will be held on November 11, 2016. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Significant Accounting Policies | |
Presentation | Presentation —We have prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the 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 (“SEC”). 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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 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, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 included in our annual report on Form 10‑K filed on February 25, 2016. |
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 allocated costs and related party transactions, materials and supplies obsolescence, property and equipment, drilling contract intangible liability, income taxes and equity‑based compensation. 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. |
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. |
Subsequent events | Subsequent events —We evaluate subsequent events through the time of our filing on the date we issue our financial statements. See Note 11—Subsequent Events. |
Earnings Per Unit (Tables)
Earnings Per Unit (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (loss) per unit | |
Schedule of numerator and denominator used for the computation of basic and diluted per unit earnings | The numerator and denominator used for the computation of basic and diluted per unit earnings, were as follows (in millions, except per unit data): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Numerator for earnings (loss) per unit Net income (loss) attributable to controlling interest $ $ $ $ $ $ $ $ Undistributed earnings allocable to participating securities — — — — — — — — Net income (loss) available to unitholders $ $ $ $ $ $ $ $ Net income (loss) available to common unitholders $ $ $ $ $ $ $ $ Net income (loss) available to subordinated unitholders $ $ $ $ $ $ $ $ Denominator for earnings (loss) per unit – common units Weighted-average common units outstanding Effect of equity-based awards — — — — — — — — Weighted-average common units for per unit calculation Denominator for earnings (loss) per unit – subordinated units Weighted-average subordinated units outstanding Effect of equity-based awards — — — — — — — — Weighted-average subordinated units for per unit calculation Earnings (loss) per unit Earnings (loss) per common unit $ $ $ $ $ $ $ $ Earnings (loss) per subordinated unit $ $ $ $ $ $ $ $ Cash distributions declared and paid per unit Common units $ $ $ $ $ $ $ $ Subordinated units $ $ $ $ $ $ $ $ |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments | |
Schedule of carrying amounts and fair values of our financial instruments | The carrying amounts and fair values of our financial instruments were as follows (in millions): September 30, 2016 December 31, 2015 Carrying Fair Carrying Fair amount value amount value Cash and cash equivalents $ $ $ $ |
Business (Details)
Business (Details) | Jul. 31, 2016itemshares | Sep. 30, 2016shares | Dec. 31, 2015shares | Sep. 30, 2015 |
Transocean | ||||
Ownership percentage | 49.00% | 49.00% | ||
Common units held by parent | 21,300,000 | 21,300,000 | ||
Subordinated units held by parent | 27,600,000 | 27,600,000 | ||
Percentage of limited liability company interest held by parent | 71.30% | 70.90% | ||
Rig Cos and subsidiaries | ||||
Ownership percentage | 51.00% | |||
Rig Cos and subsidiaries | Transocean | ||||
Ownership percentage | 49.00% | |||
Merger Agreement | Transocean | ||||
Number of subsidiaries party to agreement | item | 2 | |||
Number of subsidiaries merging | item | 1 | |||
Number of securities to be issued for each unit | 1.1427 | |||
Unitholders excluding Transocean required to complete the merger (as a percent) | 50.1 |
Goodwill Impairment (Details)
Goodwill Impairment (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Goodwill Impairment | ||
Loss on impairment of goodwill | $ 289 | $ 356 |
Loss on impairment of goodwill, tax effect | 0 | 0 |
Loss on impairment of goodwill attributable to controlling interest | $ 148 | $ 182 |
Loss on impairment of goodwill per diluted share | $ 2.13 | $ 2.63 |
Loss on impairment of goodwill attributable to noncontrolling interest | $ 141 | $ 174 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Tax rate | ||
Annual effective tax rate (as a percent) | 5.40% | 6.10% |
Earnings Per Unit (Details)
Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 02, 2016 | May 05, 2016 | Feb. 09, 2016 | Jul. 30, 2015 | May 04, 2015 | Feb. 09, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Numerator for earnings (loss) per unit, basic | ||||||||||
Net income (loss) attributable to controlling interest | $ 42 | $ (134) | $ 109 | $ (105) | ||||||
Net income (loss) available to unitholders | 42 | (134) | 109 | (105) | ||||||
Denominator for earnings (loss) per unit, basic | ||||||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | ||||
Numerator for earnings (loss) per unit, diluted | ||||||||||
Net income (loss) attributable to controlling interest | 42 | (134) | 109 | (105) | ||||||
Net income (loss) available to unitholders | $ 42 | $ (134) | $ 109 | $ (105) | ||||||
Denominator for earnings (loss) per unit, diluted | ||||||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | ||||
Share-based awards | ||||||||||
Denominator for earnings (loss) per unit, diluted | ||||||||||
Share-based awards excluded from earnings per unit calculation (in shares) | 26,189 | 0 | 26,189 | 0 | ||||||
Common units | ||||||||||
Numerator for earnings (loss) per unit, basic | ||||||||||
Net income (loss) attributable to controlling interest | $ 65 | $ (63) | ||||||||
Net income (loss) available to common unitholders | $ 25 | $ (80) | $ 65 | $ (63) | ||||||
Denominator for earnings (loss) per unit, basic | ||||||||||
Weighted average units outstanding (in units) | 41,000,000 | 41,000,000 | 41,000,000 | 41,000,000 | ||||||
Weighted-average common units for per unit calculation (in units) | 41,000,000 | 41,000,000 | 41,000,000 | 41,000,000 | ||||||
Earnings (loss) per unit—basic | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) | ||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 1.0875 | $ 1.0875 | ||||||
Numerator for earnings (loss) per unit, diluted | ||||||||||
Net income (loss) attributable to controlling interest | $ 65 | $ (63) | ||||||||
Net income (loss) available to common unitholders | $ 25 | $ (80) | $ 65 | $ (63) | ||||||
Denominator for earnings (loss) per unit, diluted | ||||||||||
Weighted average units outstanding - diluted (in units) | 41,000,000 | 41,000,000 | 41,000,000 | 41,000,000 | ||||||
Weighted-average common units for per unit calculation (in units) | 41,000,000 | 41,000,000 | 41,000,000 | 41,000,000 | ||||||
Earnings (loss) per unit—diluted | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) | ||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 1.0875 | $ 1.0875 | ||||||
Subordinated units | ||||||||||
Numerator for earnings (loss) per unit, basic | ||||||||||
Net income (loss) attributable to controlling interest | $ 44 | $ (42) | ||||||||
Net income (loss) available to subordinated unitholders | $ 17 | $ (54) | $ 44 | $ (42) | ||||||
Denominator for earnings (loss) per unit, basic | ||||||||||
Weighted average units outstanding (in units) | 28,000,000 | 28,000,000 | 28,000,000 | 28,000,000 | ||||||
Weighted-average common units for per unit calculation (in units) | 28,000,000 | 28,000,000 | 28,000,000 | 28,000,000 | ||||||
Earnings (loss) per unit—basic | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) | ||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 1.0875 | $ 1.0875 | ||||||
Numerator for earnings (loss) per unit, diluted | ||||||||||
Net income (loss) attributable to controlling interest | $ 44 | $ (42) | ||||||||
Net income (loss) available to subordinated unitholders | $ 17 | $ (54) | $ 44 | $ (42) | ||||||
Denominator for earnings (loss) per unit, diluted | ||||||||||
Weighted average units outstanding - diluted (in units) | 28,000,000 | 28,000,000 | 28,000,000 | 28,000,000 | ||||||
Weighted-average common units for per unit calculation (in units) | 28,000,000 | 28,000,000 | 28,000,000 | 28,000,000 | ||||||
Earnings (loss) per unit—diluted | $ 0.61 | $ (1.94) | $ 1.58 | $ (1.52) | ||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 1.0875 | $ 1.0875 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) $ in Millions | Aug. 05, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Credit Agreements | ||||
Repayment of working capital note payable | $ 43 | |||
Five Year Revolving Credit Facility | ||||
Credit Agreements | ||||
Aggregate borrowing capacity | $ 300 | |||
Credit facility term | 5 years | |||
Basis spread on variable rate (as a percent) | 1.625% | |||
Credit facility amount outstanding | $ 0 | $ 0 | ||
Available borrowing capacity | $ 300 | $ 300 | ||
Five Year Revolving Credit Facility | Minimum | ||||
Credit Agreements | ||||
Percentage of commitment fees | 0.225% | |||
Five Year Revolving Credit Facility | Maximum | ||||
Credit Agreements | ||||
Percentage of commitment fees | 0.325% | |||
Five Year Revolving Credit Facility | LIBOR | Minimum | ||||
Credit Agreements | ||||
Basis spread on variable rate (as a percent) | 1.625% | |||
Five Year Revolving Credit Facility | LIBOR | Maximum | ||||
Credit Agreements | ||||
Basis spread on variable rate (as a percent) | 2.25% | |||
Five Year Revolving Credit Facility | Base rate | ||||
Credit Agreements | ||||
Percentage reduction to the calculated variable rate | 1.00% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 02, 2016 | May 05, 2016 | Feb. 09, 2016 | Jul. 30, 2015 | May 04, 2015 | Feb. 09, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Nov. 04, 2015 |
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | ||||||
Distribution to unitholders | $ 24 | $ 25 | $ 74 | $ 75 | ||||||||
Distributions to holder of noncontrolling interests | 112 | 76 | ||||||||||
Cancellation of repurchased common units | 3 | |||||||||||
Transocean | ||||||||||||
Distribution to unitholders | $ 17 | $ 17 | 53 | 53 | ||||||||
Distributions to holder of noncontrolling interests | $ 112 | $ 76 | ||||||||||
Ownership percentage | 49.00% | 49.00% | 49.00% | 49.00% | ||||||||
Common units | ||||||||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 1.0875 | $ 1.0875 | ||||||||
Cancellation of repurchased common units (in units) | 400,000 | |||||||||||
Cancellation of repurchased common units | $ 3 | |||||||||||
Unit repurchase program | Common units | ||||||||||||
Cancellation of repurchased common units (in units) | 386,876 | 91,500 | ||||||||||
Units repurchased amount (in dollars per unit) | $ 8.23 | $ 9.20 | ||||||||||
Cancellation of repurchased common units | $ 3 | $ 1 | ||||||||||
Authorized remaining repurchase amount | $ 36 | 36 | ||||||||||
Unit repurchase program | Common units | Maximum | ||||||||||||
Authorized repurchase amount | $ 40 | |||||||||||
Rig Cos and subsidiaries | ||||||||||||
Distributions to holder of controlling interests | $ 228 | $ 154 | ||||||||||
Ownership percentage | 51.00% | 51.00% | ||||||||||
Rig Cos and subsidiaries | Transocean | ||||||||||||
Ownership percentage | 49.00% | 49.00% |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | Aug. 05, 2014USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Related Party Transactions | ||||||
Payments to affiliates for capital expenditures | $ 18 | $ 12 | ||||
Contributions for parent indemnification of lost revenues | 10 | |||||
Accounts receivable from affiliates | $ 1 | $ 1 | $ 1 | |||
Number of drilling units equipped with patented dual activity technology | item | 3 | |||||
Number of drilling stations to employ structures, equipment and techniques of dual-activity technology | item | 2 | |||||
Five Year Revolving Credit Facility | ||||||
Related Party Transactions | ||||||
Credit facility term | 5 years | |||||
Omnibus Agreement | ||||||
Related Party Transactions | ||||||
Term of agreement | 5 years | |||||
Minimum percentage of interest to be offered for purchase of drillships | 51.00% | |||||
Number of ultra deepwater drillships in which interest is required to be offered | item | 4 | |||||
Number of ultra deepwater drillships available for offer to purchase interest | item | 6 | |||||
Personnel costs | Secondment agreements | Operating and maintenance costs and expenses | ||||||
Related Party Transactions | ||||||
Costs and expenses | 22 | $ 22 | $ 67 | 69 | ||
Personnel costs | Secondment agreements | General and administrative costs and expenses | ||||||
Related Party Transactions | ||||||
Costs and expenses | 1 | 1 | 3 | 3 | ||
Administrative, technical and non-executive management services | Master services agreements | Operating and maintenance costs and expenses | ||||||
Related Party Transactions | ||||||
Costs and expenses | 23 | 44 | 75 | 101 | ||
Administrative, technical and non-executive management services | Master services agreements | General and administrative costs and expenses | ||||||
Related Party Transactions | ||||||
Costs and expenses | 6 | 4 | 17 | 13 | ||
Payment for materials and supplies settled through net investment | Master services agreements | ||||||
Related Party Transactions | ||||||
Costs and expenses | 4 | 5 | 21 | 20 | ||
Capital expenditures | Master services agreements | ||||||
Related Party Transactions | ||||||
Payments to affiliates for capital expenditures | $ 6 | 2 | $ 18 | 12 | ||
TODDI | License agreements | Minimum | ||||||
Related Party Transactions | ||||||
Percentage of quarterly royalty fees paid under license agreement | 3.00% | |||||
TODDI | License agreements | Maximum | ||||||
Related Party Transactions | ||||||
Percentage of quarterly royalty fees paid under license agreement | 5.00% | |||||
TODDI | Royalty fees | Operating and maintenance costs and expenses | ||||||
Related Party Transactions | ||||||
Costs and expenses | $ 5 | $ 8 | 17 | |||
Transocean | Omnibus Agreement | ||||||
Related Party Transactions | ||||||
Maximum amount of lost revenue arising out of the failure to receive an operating dayrate from Chevron for Discoverer Clear Leader | $ 100 | |||||
Contributions for parent indemnification of lost revenues | $ 10 | |||||
Transocean affiliate | Five Year Revolving Credit Facility | ||||||
Related Party Transactions | ||||||
Credit facility term | 5 years | |||||
Transocean affiliate | Master services agreements | ||||||
Related Party Transactions | ||||||
Term of agreement | 5 years |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Financial Instruments | ||
Carrying amount of cash equivalents | $ 174 | $ 153 |
Carrying amount | ||
Financial Instruments | ||
Cash and cash equivalents | 221 | 159 |
Fair value | ||
Financial Instruments | ||
Cash and cash equivalents | $ 221 | $ 159 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 03, 2016 | Aug. 02, 2016 | May 05, 2016 | Feb. 09, 2016 | Jul. 30, 2015 | May 04, 2015 | Feb. 09, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Subsequent Events | ||||||||||||
Distribution (in dollars per unit) | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | $ 0.3625 | ||||||
Distribution to unitholders | $ 24 | $ 25 | $ 74 | $ 75 | ||||||||
Subsequent Events | ||||||||||||
Subsequent Events | ||||||||||||
Distribution (in dollars per unit) | $ 0.3625 | |||||||||||
Approved distribution to unitholders | $ 25 | |||||||||||
Distribution to unitholders | $ 52 | |||||||||||
Transocean | ||||||||||||
Subsequent Events | ||||||||||||
Distribution to unitholders | $ 17 | $ 17 | $ 53 | $ 53 | ||||||||
Ownership percentage | 49.00% | 49.00% | 49.00% | 49.00% | ||||||||
Transocean | Subsequent Events | ||||||||||||
Subsequent Events | ||||||||||||
Approved distribution to unitholders | $ 18 | |||||||||||
Distribution to unitholders | $ 25 | |||||||||||
Ownership percentage | 49.00% |