Transocean Proxy Statement and 2010 Annual Report

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Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. Our mobile offshore drilling fleet is considered one of the most modern and versatile fleets in the world. Specializing in technically demanding sectors of the offshore drilling business with a particular focus on deepwater and harsh environment drilling services, we contract our drilling rigs, related equipment and work crews predominantly on a dayrate basis to drill oil and gas wells. At December 31, 2010, we owned, had partial ownership interests in or operated 139 mobile offshore drilling units, consisting of 47 High-Specification Floaters (Ultra-Deepwater, Deepwater and Harsh Environment semisubmersibles and drillships), 25 Midwater Floaters, 10 High-Specification Jackups, 54 Standard Jackups and three Other Rigs. We also had one Ultra-Deepwater Floater and three High- Specification Jackups under construction (see Notes to the Consolidated Financial Statements—Note 9—Drilling Fleet on page AR-89 et seq. of this Annual Report). We also provide oil and gas drilling management services, drilling engineering and drilling project management services, and we participate in oil and gas exploration and production activities. Drilling management services are provided through Applied Drilling Technology Inc., our wholly owned subsidiary, and through ADT International, a division of one of our U.K. subsidiaries (together, “ADTI”). ADTI conducts drilling management services primarily on either a dayrate or a completed-project, fixedprice (or “turnkey”) basis. Oil and gas properties consist of exploration, development and production activities performed by Challenger Minerals Inc. and Challenger Minerals (North Sea) Limited (together, “CMI”), our oil and gas subsidiaries. 1.2 Significant Shareholders The table below sets forth the persons or entities known to the Company as of December 31, 2010 to be holding beneficially 2% or more of the Company's share capital registered in the commercial register. Each Share carries one vote at a general meeting of shareholders of the Company and, as such, the number of Shares held by each person or entity set forth below is equal to the number of voting rights held by such person or entity. The Swiss Federal Act on Stock Exchanges and Securities Trading (the “SESTA”) and the rules and regulations promulgated thereunder, to which the Company and beneficial owners of its shares are subject, requires persons who directly, indirectly or in concert with other parties acquire or dispose of Transocean shares or purchase or sale rights or obligations relating to Transocean shares, and, thereby, directly, indirectly or in concert with other parties reach, exceed or fall below a threshold of 3%, 5%, 10%, 15%, 20%, 25%, 33�%, 50% or 66�% of the Company's voting rights (whether exercisable or not) to notify the Company and the Disclosure Office of SIX of such acquisition or disposal in writing. Shareholder Purchase Positions Sale Positions % of Shares Registered (1) BlackRock Group (2) 12,450,671 Shares - 3.72% 17,902 (contract for difference with actual delivery) FMR LLC (3) 19,165,692 Shares CG-2 - 5.72% The Capital Group Companies, Inc. (4) 9,422,907 Shares 163,103 (1.625% Series A Convertible Senior Notes) - 2.86% Transocean Ltd. 16,154,620 Shares 4,314,017 (5)(6)(7) 6.11% (5)(6)(7) Marsico Capital Management, LLC (8) 8,607,055 Shares - 2.57% (1) The percentage indicated is based on the 335,235,298 shares issued and registered in the commercial register as of December 31, 2010. (2) The number of shares held by the BlackRock Group is based on a notification received by the Company on December 6, 2010 informing the Company that the ownership of the BlackRock Group has exceeded 3%. (3) The number of shares held by FMR LLC is based on a statement on Schedule 13G filed with the SEC on February 14, 2011, which was filed jointly by FMR LLC, Edward C. Johnson 3d, and Fidelity Management & Research Company. According to the filing, FMR LLC has sole voting power over 2,891,991 shares and sole dispositive power over 19,165,692 shares and shared voting or dispositive power
over no shares. Of the shares reported, 15,660,402 shares are beneficially owned by Fidelity Management & Research Company, an investment adviser and a wholly-owned subsidiary of FMR LLC, as a result of acting as investment advisor to various investment companies (collectively, the “Fidelity Funds”); with respect to these shares, FMR LLC, Mr. Edward C. Johnson 3d and each of the Fidelity Funds exercise sole dispositive power and the Fidelity Funds’ Board of Trustees exercise sole voting power. Based on a notification received by the Company on November 15, 2010 informing the Company that the ownership of FMR LLC, on behalf of funds managed by and clients of FMR LLC and its direct and indirect subsidiaries, has exceeded 5%, FMR LLC held 16,903,001 or 5.04 of the issued shares as of December 31, 2010. That notification was made on the basis of the reporting obligations of beneficial owners pursuant to the SESTA and the implementing ordinances thereof. (4) The number of shares held by Capital Group Companies, Inc., is based on a notification received by the Company on November 9, 2010 informing the Company that the ownership of the Capital Group Companies, Inc., on behalf of funds managed by and clients of Capital Group Companies, Inc. and its direct and indirect subsidiaries, has fallen below 3%. Note that as of December 31, 2010 substantially all of the 1.625% Series A Convertible Senior Notes, which Capital Group Companies, Inc. notified as a purchase position, were repurchased, subject to an amount of USD 11 million, which we called for redemption on January 31, 2011. For further information on our Convertible Senior Notes, please refer to the Notes to the Consolidated Financial Statements—Note 11—Debt—1.625% Series A, 1.50% Series B and 1.50% Series C Convertible Senior Notes on page AR-95 et seq. of this Annual Report (5) Since October 18, 2010, Pacific Drilling Limited (“Pacific Drilling”) has the right to exchange its 50%interest in the joint venture TPDI formed by Transocean Offshore International Ventures Limited (“TOIVL”) and Pacific Drilling to own and operate two ultra-deepwater drillships named Dhirubhai Deepwater KG1 and Dhirubhai Deepwater KG2 (collectively, the “Drillships”). Pacific Drilling may elect to exchange its interest in (a) registered shares of Transocean Ltd. (the “Exchange Right”) or (b) cash. To calculate the number of shares deliverable or issuable by Transocean Ltd. (if any), Pacific Drilling and TOIVL have contractually agreed to conduct upon exercise by Pacific Drilling of its Exchange Right an appraisal of the fair market value of Pacific Drilling's stake in TPDI, subject to various adjustments. As of the date hereof, it cannot be determined what number of registered shares of Transocean Ltd. (if any) will be issuable or deliverable upon exercise of the Exchange Right. At any rate, Transocean Ltd's obligation to issue or deliver registered shares would be capped at 15% of the then-issued and outstanding shares. Based on the fair value set forth in publicly available broker reports, taking into account the carrying amount of debt related to each Drillship, and using, the 30-day average closing price per Transocean share on the NYSE of USD 70.25 as of December 31, 2010, the percentage of voting rights conferred on Pacific Drilling would be approximately 2.68% of Transocean's share capital as currently registered in the commercial register. Note that the values indicated above are used for guidance only. The fair value of the Drillships and the Transocean reference share price at the date the Exchange Right is exercised may be materially different from the values disclosed in or used for purposes of this disclosure. (6) Transocean Ltd. is the sponsor of the stock options, deferred units and share appreciation rights (“SARs”) (collectively the “Awards”) outstanding under Transocean Ltd.'s share-based compensation plans (collectively the “Plans”). See the separate disclosure of outstanding Awards per Plan at http://phx.corporate-ir.net/phoenix.zhtml?c=113031&p=summary. Overall, the Plans relate to 4,314,017 shares and voting rights or 1.29% of Transocean's registered share capital. The underlying in relation to each Plan are registered shares of Transocean Ltd. (either out of conditional share capital, authorized share capital or by delivery of treasury shares). Transocean Ltd. will, in accordance with an exemption granted by the SIX Disclosure Office, update its disclosure regarding sale positions pertaining to its Plans once a year on the date of the release of its quarterly results for the period ending March 31 in the event that an updated disclosure is required because one of the thresholds set forth in Article 20 SESTA has been triggered. (7) Transocean Inc. has granted written conversion and share purchase rights in the form of convertible senior notes (USD 1.7 billion aggregate principal amount of 1.5% Series B Convertible Senior Notes due December 2037 and USD 1.7 billion aggregate principal amount of 1.5% Series C Convertible Senior Notes due December 2037 (collectively with the 1.625% Series A Convertible Senior Notes, the “Convertible Senior Notes”) – see item 2.7 of this Report, including information regarding the 1.625% Series A Convertible Senior Notes due December 2037, substantially all of which were repurchased as of December 31, 2010, subject to an amount of USD 11 million, which we called for redemption on January 31, 2011. CG-3
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Transocean Proxy Statement and 2010
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2010 LETTER TO THE SHAREHOLDERS We
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In addition to a focus on meeting o
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Agenda Items INVITATION TO ANNUAL G
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(9) Election of Three New Directors
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We may accept a proxy by any form o
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PROXY STATEMENT FOR ANNUAL GENERAL
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of the dividend reserve from capita
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You may revoke your proxy card at a
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AGENDA ITEM 2. Discharge of the Mem
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AGENDA ITEM 4. Reallocation of Free
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AGENDA ITEM 6. Conditional Agenda I
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Proposal of the Board of Directors
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AGENDA ITEM 8. Reduction of the Max
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Nominees for Director—Class III
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November 2007. Since August 2008, M
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The Board of Directors has conclude
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e disclosed and not whether a parti
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Submit nominations to our Corporate
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The Executive Compensation Committe
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Committee is ‘‘financially lite
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AUDIT COMMITTEE REPORT The Audit Co
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SECURITY OWNERSHIP OF DIRECTORS AND
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As a direct consequence of the Maco
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Executive Compensation Program—Gu
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$100,000. Accordingly, neither Long
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Element Targeted Position Comments
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In February 2010, the Committee rev
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Safety Performance. Our business in
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Timing of the system roll out compr
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total target value for stock option
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Executive Compensation Program—He
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Perquisites and Other Personal Bene
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• a cash severance benefit equal
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Summary Compensation Table EXECUTIV
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(17) In 2010, Mr. Toma’s base pay
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Outstanding Equity Awards at Fiscal
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Option Exercises and Shares Vested
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offset to allow for the fact that h
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Contributions are based on a partic
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(3) The terms and conditions of the
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(1) Based on the target (100%) payo
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Mr. Newman Mr. Rosa Mr. Brown Mr. B
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AGENDA ITEM 10 Appointment of Ernst
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Proposal AGENDA ITEM 11. Advisory V
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OTHER MATTERS Compensation Committe
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Annexes P-81
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(2) Shareholders may, upon the term
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3 Der Verwaltungsrat ist ermächtig
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Annex C Amended Article 22 of the A
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TRANSOCEAN LTD. AND SUBSIDIARIES IN
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Item 1. Business PART I Overview Tr
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Jackup rigs are mobile self-elevati
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Midwater Floaters The following tab
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Markets Our operations are geograph
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Integrated Services From time to ti
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Item 1A. Risk Factors Risks related
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Our business depends on the level o
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events” above. Our inability to r
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The application of the Working Time
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We are subject to litigation that,
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these tests, “passive income” i
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Item 2. Properties The description
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LDEQ would not rescind the enforcem
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Patent litigation—In 2007, severa
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Executive Officers of the Registran
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PART II Item 5. Market for Registra
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the “virtual second trading line
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Item 6. Selected Financial Data The
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payment of $453 million. In connect
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Midwater Floaters—For our Midwate
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Fleet average daily revenue—The f
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services operations and (d) approxi
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Depreciation, depletion and amortiz
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AR-49 Years ended December 31, 2010
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During the year ended December 31,
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applicable margin, ranging from 3.1
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Contractual obligations—As of Dec
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Plan assets—We review our investm
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Ports and Waterways Safety Act, the
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such U.S. business. In November 200
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Related Party Transactions Pacific
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and the long-term impact of those u
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in partial exposure to foreign exch
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REPORT OF INDEPENDENT REGISTERED PU
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To the General Meeting of Transocea
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TRANSOCEAN LTD. AND SUBSIDIARIES CO
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TRANSOCEAN LTD. AND SUBSIDIARIES CO
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TRANSOCEAN LTD. AND SUBSIDIARIES NO
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Note 13—Postemployment Benefit Pl
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Transocean Proxy Statement and 2010 Annual Report

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