27 slides from Transocean Ltd (switzerland)'s proxy contest presentation, May 7, 2013
Slide 1: Transocean Ltd. Presentation to Shareholders
= == Transocean Ltd. Presentation to Shareholders May 2013 www.deepwater.com
Slide 2: Legal Disclaimer
Legal Disclaimer “Firansocean The statements described in this presentation that are not historical facts are forward-looking statements within the meaning of Section 2TAof the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which could be ma
Slide 3: Agenda
"| Transocean Page # |. Transocean’s Balanced Capital Allocation Approach Will Maximize Long-Term Value + Financial flexibility and investment grade rating have value pg. 6-7 + Our dividend proposalis the right proposal pg. 8-11 Il. Icahn'’s Claims Based on Overly Simplistic and Highly Flawed Analys
Slide 4: Board Recommends Shareholders Support Company's Proposals
Board Recommends Shareholders Support Company’s Proposals "| Transocean Capital Allocation + Transocean is focused on a balanced capital allocation strategy to maximize long-term shareholder value through financial flexibility, disciplined, high-return investments in the fleet and the goal of future
Slide 5: Transocean's Balanced Capital Allocation Approach Will Maximize Long-Term Value
|. Transocean's Balanced Capital Allocation Approach Will Maximize Long-Term Value www.deepwater.com
Slide 6: Transocean's Balanced Capital Allocation Approach
Transocean's Balanced Capital Allocation Approach We believe Transocean's balanced capital allocation approach will maximize long-term value creation + Financial Flexibility - Essentialina capitalintensive and cyclical industry Financial - Loss ofinvestment grade creditrating would Flexibility have
Slide 7: Importance of Investment Grade (IG) Rating
Importance of Investment a Grade (IG) Rating Transocean A downgrade would have real, adverse implications for Transocean + Access — non-IG market is subject to significant market dislocation in periods of instability + More restrictive covenants for non-IG bonds + We believe it takes approximately t
Slide 8: Board's Attractive Dividend Proposal
Board's Attractive Dividend Proposal "| Transocean Sustainable dividend proposal that provides for future increases in distributions + Operational and litigation successes permit reinstatement of dividend ~ Proposed dividend of $2.24 per share, or approximately $800 million + Responsible and robust
Slide 9: Dividend Proposal Among Highest in Industry
Dividend Proposal Among = Highest in Industry Transocean Transocean's recommended dividend ranks among the highest in the industry* + In our opinion, payout ratios significantly higher than this level will threaten the company’s operating flexibility and investment grade credit rating — putting its
Slide 10: Analysts Agree with Our Capital Allocation Strategy
Analysts Agree with Our Capital Allocation Strategy Significant equity research analyst support for Transocean's dividend proposal + Icahn provides only limited equity research support while utilizing reports published prior to Transocean dividend proposal (e.g. JPMorgan and Guggenheim) or “cherry-p
Slide 11: Transocean Board Focused on Long-Term Value Creation
Transocean Board Focused on TF; Long-Term Value Creation mon Transocean's balanced capital allocation approach is designed to maximize value- creation for shareholders + Transocean's Board is focused on a balanced capital allocation strategy and does not intend to take steps that will threaten the c
Slide 12: Icahn's Claims Based on Overly Simplistic and Highly Flawed Analysis
ll. lcahn's Claims Based on Overly Simplistic and Highly Flawed Analysis www.deepwater.com
Slide 13: 2011 Equity Raise Not Primarily Driven By Aker
2011 Equity Raise Not = Primarily Driven By Aker Transocean We believe Icahn's criticism of the Aker transaction is misleading + Whileapottion of the proceeds were usedto refinance Aker debt, the equity raise was primarily driven by factors unrelatedto the Aker acquisition Credit markets weaken ed s
Slide 14: Why Icahn Is Really Attacking the Equity Raise
Why Icahn Is Really Attacking the Equity Raise Icahn’s Misguided Views Investment Grade Credit Rating Doesn’t Matter Transocean Doesn't Need to Invest Significant Capital Back inthe Business Transocean Views * Inthe context of Macondo uncertainties and unexpected deterioration in operating performan
Slide 15: The Facts on GlobalSantaFe
The Facts on GlobalSantaFe "| Transocean We believe Icahn’s characterization of the GlobalSantaFe transaction is simplistic and misleading + Even with the benefit of hindsight for a transaction that occurred six years ago, Icahn chooses to ignore important facts — Transocean outperformed peers one y
Slide 16: The Facts on GlobalSantaFe (Cont'd)
The Facts on GlobalSantaFe TF; (Cont'd) Transocean Benefits realized over time since transaction close have been ignored by Icahn + The GlobalSantaFe merger combined the two most capable fleets in the industry, increased Transocean’s leadership in high-specification assets, and permitted the distrib
Slide 17: Icahn Mistaken on Valuation
Icahn Mistaken on Valuation “We believe Icahn’s flawed analysis overstates the valuation gap "| Transocean Icahn copied offshore driller valuation multiples from just one equity research report dated 4/1/13 instead of using consensus estimates. Icahn selectively excluded legitimate peer Hercules, ov
Slide 18: Icahn's Flawed Newbuild Assertions
Icahn's Flawed Newbuild Assertions Icahn’s views on newbuilds and a flexible balance sheet are flawed and contradictory, in our view Newbuilds: "{Cjombination of higher construction costs and lower dayrates makes it almost impossible that Transocean will generate a Positive NPV versus building and l
Slide 19: Icahn's Flawed Newbuild Comparison
Icahn's Flawed Newbuild + Comparison Traneocesn We view Icahn’s comparison of Transocean’s and Noble’s newbuild programs as inappropriate and misleading Icahn argues that Transocean's competitors build same quality at lower costs, but: "Icahn compares the Shell deal at a rig cost of $750 + Transocea
Slide 20: Icahn's Flawed NAV Assertions
Icahn's Flawed NAV Assertions Tenaocsan We believe Icahn incorrectly uses Net Asset Value (NAV) to support his capital allocation plan * Icahn believes that since the company is trading at a discount to NAV, cash should be returned to shareholders, preventing reinvestment for the long term — Atthe s
Slide 21: Icahn's Debt Claims Are Inaccurate
Icahn's Debt Claims Are Inaccurate Truth About Transocean Cost of Debt Truth About Debt Prepayment Penalties Notes No material impacton cost of debt or broader implications from a credit ratin gs down grade Even if the company is down graded from BBB- to BB+ debt cost will likely stay below 4% after
Slide 22: Icahn's Board Nominees Are Captive To His Misguided Agenda
Ill. lcahn's Board Nominees Are Captive To His Misguided Agenda www.deepwater.com
Slide 23: Handpicked Nominees Beholden to Icahn's Misguided Agenda
Handpicked Nominees Beholden 5 = to Icahn's Misguided Agenda Tansee Icahn's nominees have a long history of serving...lcahn + We fail to see any strategy or plan other than the extraction of an unsustainable dividend that the company believes would be detrimental to value creation, and which leading
Slide 24: Icahn's Distortion of His Nominees' Resumes
Icahn's Distortion of His Nominees' Resumes "| Transocean Icahn states his nominees have "deep energy and international business experience,” which we believe is unfounded What energy experience? — Mr. Alapont and Mr. Merksamer have no apparent energy experience — Mr. Lipinski leads a U.S.-based ref
Slide 25: Icahn's Nominees Bring No Value
Icahn's Nominees Bring No Val ue FTransocean + Samuel Merksamer - Overboarded - Currently on five public hoards and one non public board — and has a full time position with Icahn Capital ~ Inexperienced - Icahn believes Mr. Merksamer ‘would be helpful building management teams" — how is that possibl
Slide 26: ISS Doesn't Make the Rules, Our Shareholders Do
ISS Doesn't Make the Rules, a Our Shareholders Do Transocean We strongly disagree with: + ISS’ decision to reject only one of Icahn's three nominees, particularly due to the nominees’ lack of relevant experience and their affiliations with Icahn + The notion that Icahn or his nominees have offered a
Slide 27: Transocean's Board is Highly Qualified, Diverse and Experienced
Transocean's Board is Highly Qualified, Diverse and Experienced * Our Board members have been successful: - They have worked closely with current managementto develop andimplementthe strategic initiatives againstwhich the company is successfully executing - They have exhibited leading corporate gove