Good day and welcome to the Transocean fourth quarter 2015 earnings conference. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Brad Alexander. Please go ahead, sir.

Thank you, Eric. Welcome to Transocean's fourth quarter 2015 earnings conference call. A copy of the press release covering our financial results along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures, are posted on the company's website at deepwater.com. Joining me on this morning's call are: Jeremy Thigpen, President and Chief Executive Officer; Mark Mey, Executive Vice President and Chief Financial Officer; and Terry Bonno, Senior Vice President, Marketing. During the course of this call, participants may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts. Such statements are based upon the current expectations and certain assumptions of management, and are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our SEC filings for more information regarding our forward-looking statements, including the risks and uncertainties that could impact our future results. Also, please note that the company undertakes no duty to update or revise forward-looking statements. Finally, to give the participants an opportunity to speak on this call, when we get to our question-and-answer session, please limit your questions to one initial question and one follow-up question. Thank you very much. I'll now turn the call over to Jeremy Thigpen. Jeremy D. Thigpen - President & Chief Executive Officer: Thank you, Brad, and a warm welcome to our employees, customers, investors, and analysts participating in today's call. Our performance in the fourth quarter was strong across the board, as we reported adjusted net income of $615 million or $1.68 per diluted share on $1.9 billion in revenues. For the full year, our adjusted net income was $1.7 billion or $4.74 per diluted share on $7.4 billion in revenue. During the quarter, our strong revenue efficiency, our…

Thanks, Mark, and good day to everyone. To simply say the offshore drilling market continues to be challenging is an understatement. Yet in the fourth quarter, our teams onshore and offshore fired on all cylinders to deliver multiple contracts when opportunities were scarce. With oil prices recently falling as low as the mid-$20s and continuing to hover around $30 a barrel, contract terminations that began accelerating in December have continued. Fortunately, because of our strong contracts and relationships, we do not have other contracts in our backlog that permit uncompensated cancellation for convenience like the termination we recently announced related to the Global Santa Fe Development Driller I. I will reiterate what I said in our last earnings call. Although demand is limited, we continue to fight for every opportunity in this highly competitive market. As a testament to our safety and operational performance and the creativity and tenacity of our marketing teams, we've added $378 million of contract backlog since the last earnings call, bringing our total 2015 to $763 million. We have contracted to reactivate the Henry Goodrich in Canada for two years, secured contracts to return the Rig 140 in India and the M.G. Hulme to work. We have also extended the contract for the Jack Bates in Australia and were awarded over 80 days for the Cajun Express on the Ivory Coast, while signing new contracts for active rigs, the Sedco 704 in the UK and the Transocean Arctic in Norway. Our global footprint is vast and our ability to compete for work with our diverse fleet of rigs while capitalizing on our operational excellence is strong. As evidence of our competitive positioning, I am especially pleased to report that since issuing our fleet status report earlier this month, we were awarded a six-month contract for…

Thank you, Terry. Eric, we are now ready to open the line for questions. And as a reminder to the participants, please limit your comments to one question and one follow-up.

Thank you. We'll take our first question from Angie Sedita with UBS.

Thanks, good morning, guys. Appreciate all the details, Jeremy and Mark. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning, Angie.

Good morning. So this is for either one of you, Jeremy or Mark. I know you've talked in the past about your ability to potentially tap into secured financing for $1 billion or more on the four newbuilds with Shell. Any further color there on the feasibility of that avenue in this market? Mark L. Mey - Chief Financial Officer & Executive Vice President: Thanks, Angie. Look, as we discussed in the past, we are very fortunate to have four of the best contracts against four of the best ultra-deepwater drillships in the industry. So those are highly marketable assets to raise additional secured financing. We are evaluating options currently, as you can imagine, but it is a tough market out there. Not only is the energy market difficult, but the banks are also having a very tough time of it. So until we actually get something completed, we're not going to comment further on this. But you can be sure that we are focused on using those assets in the most effective way to be able to raise additional financing to be able to increase our buffer of liquidity as we navigate this downturn.

Okay, very, very helpful, and then one for Terry. Congrats, Terry, on getting a handful of contracts in this market, obviously very challenging but impressive. So on the Exxon contract, you mentioned no other contracts have cancellations for convenience without compensation. Could you talk a little bit about the Petrobras contracts and if there's anything unique on the contract as far as termination for convenience or cause?

Thanks, Angie. Our contracting relationship with Petrobras is much like our competitors. It's all the same contract. So they don't deviate or negotiate anything different with any of us. They're standard. So they can terminate for cause, but it is for cause. And we haven't seen anything else from them to suggest that that would be anything other than that. So we don't... Jeremy D. Thigpen - President & Chief Executive Officer: Our performance...

I'm sorry? Jeremy D. Thigpen - President & Chief Executive Officer: I was going to say, our performance with Petrobras has been outstanding.

Yes, absolutely. So we don't have anything there. So what we've said is we've gone through every contract. We do this all the time. Every contract is solid. I think a testament to that, look at the early termination we've gotten. Even though it's a sad thing to early terminate a rig because our crews go home and the rig doesn't operate, we've collected over $500 million in the last couple of months on these unfortunate early terminations, so that should demonstrate the strength of the contracting opportunities that we have left in our fleet.

Okay, that's helpful, and then one final one for Jeremy. I know you mentioned some thoughts in the past on industry consolidation and that your board was actually supportive of consolidation. Any further thoughts as we go along here in the cycle? Jeremy D. Thigpen - President & Chief Executive Officer: Sure. I would say that we remain committed to high-grading our fleet certainly, and we would certainly like to lead the consolidation of the market. However, we have three very important criteria that have to be met in that process. One is asset quality. Two would be near-term liquidity. And three would be a reasonable and realistic valuation. And so aligning those three is a bit challenging, but we're continuing to pursue opportunities, and still believe that ultimately we will lead this consolidation effort.

Great, thanks. I'll turn it over.

Thanks, Angie.

Next we'll hear from James West with Evercore ISI.

Good morning, guys. Jeremy D. Thigpen - President & Chief Executive Officer: Hi, James.

Jeremy, you mentioned in your prepared comments that Terry had worked on some new commercial solutions that was helpful in adding some backlog during this quarter. Could you maybe elaborate? Or, Terry, could you maybe elaborate further on what those new solutions were and how the market is accepting those solutions? Jeremy D. Thigpen - President & Chief Executive Officer: Thanks, James. I'll just speak generally. The primary tweak that we have introduced is really aligning with the expectations of our customers around performance. And so we've actually put a bit of skin in the game, if you will.

Okay. Jeremy D. Thigpen - President & Chief Executive Officer: And worked with them on the day rate, and then built our upside based on our performance. And to date, our customers have responded extremely well and our performance has been very solid. So overall, we're earning above market rate on most of these agreements. So for us, we think it's a win-win. It's better alignment with our customers around performance. And ultimately, their guaranteed day rate may be below market, but our overall day rate is actually above market. So all in, both parties seem to be very satisfied with the approach thus far.

Okay, that's what I figured it was. And then I'm assuming you canvassed your customer base, or I assume you're constantly doing that. But with this recent early termination, understanding that any other terminations would be paid for by the customer, you don't have any of those. There's no recourse to you. Are there a large number of rigs that are still up for or potentially could be early terminated here, or do you think we're now down to a steady-state working rig environment?

Hi, James. I think it's a little early to call that because I think it's dependent upon each of our customers' circumstances. But we do have such a strong customer base that, from our discussions, they're just trying get to the other side like we are, and they've got their programs planned on the majority of our rigs to continue on. But that doesn't mean things can't change. Some of these discussions surprise us too. But I would just say as of today we're very confident in the contracts. We don't have any other contracts that don't provide for compensation. And we're just fighting together to keep the rigs working.

Next, we'll move on to Kurt Hallead with RBC.

Hey, good morning. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning, Kurt.

That's good color so far. Terry, when you went through the market-by-market dynamic and mentioned the available work that's out there and the number of different operators that are bidding on this work, I remember in certain times in the past, there had been discussion that these operators don't want to take a cut rate and risk safety or performance around that. But now with so many different assets available to the market, has there been a change in the customer dynamic? Are they more focused on getting a lower price now irrespective of the prospective safety or operational dynamics?

I don't think any customer would ever sacrifice safety or any operational dynamic. They have to trust who they're going to work with. But certainly, in order to get their project off the launch pad, they're going to fight for the lowest price, and they're getting it, as you say, because, Kurt, the availability is there. There are good operators that can certainly do this work. But I think the dynamic that's changed is they're looking for contract drillers who are going to be viable because from their perspective they can't sacrifice the safety. And if they're going to contract with someone that may be cutting their maintenance or something like that, not that I'm saying they would, then I think they've got to question it, and I think they're taking that into consideration. So I think that's the difference.

Okay, great. And my follow-up question for Jeremy, you mentioned the consolidation and the different criteria around the prospects for doing any kind of deal and the discipline around that. It's always hardest for the teams in this business to get deals done at the very trough of the market like we're in right now. And then it becomes even more difficult to go through your discounted cash flow analysis because somebody you want to consolidate with might have a view that their rig is going to work 90% of the time and you may have a different view on that. So do you see that there's been a narrowing at all of the gap on the outlook to the bid/ask or any other dynamic that might lead to consolidation in the industry? Jeremy D. Thigpen - President & Chief Executive Officer: I don't know that there has been a narrowing necessarily, Kurt, and I appreciate your comment about the trough. I'm not sure that anybody knows if we're at that point yet. I would say that people are definitely becoming more sober about the current reality. As we've stated and I think our competitors have stated, I don't think anybody expects 2016 to get any better, and most don't believe that 2017 is going be real pretty. And so I think as we continue to work through the rest of 2016, you could see that bid and ask come together, and you could see more opportunities out there for some consolidation.

Next we'll move on to Sean Meakim with JPMorgan.

Hey, good morning. Jeremy D. Thigpen - President & Chief Executive Officer: Good morning, Sean.

Mark, I just wanted to drill in a little more on the cost guidance that you offered. You noted 20% of the savings coming from SG&A. How much flex is in that guidance related to lower activity? You noted 70% of the costs are coming from lower activity. If activity were to undershoot your expectations, would there be an impact to SG&A where you could cut that further? How do you think of the flexibility of that SG&A guide? Mark L. Mey - Chief Financial Officer & Executive Vice President: Thanks, Sean. You're thinking about it correctly. Obviously, our costs are very flexible as it relates to both the operational costs and the SG&A costs. So we discussed, both Jeremy and I, some of the structural changes that we're implementing at the company. That's going to continue through the first two quarters. In addition to that, we've taken a view on activity for 2016. As that activity either increases or decreases, our costs will increase or decrease accordingly. So you can rest assured that we look at this on a monthly basis, and we'll update you on a go-forward basis as we see our activity and our rigs going back to work or coming off in the form of cancellations.

Thank you, that's helpful. And then just, Jeremy, one of your competitors recently announced a deal with a BOP OEM for a sale/leaseback of some of the newer-gen dual-BOP stacks in the Gulf of Mexico. So I'm just curious if you have any thoughts on the prospects of that type of arrangement since you have some newer rigs with a similar profile. Jeremy D. Thigpen - President & Chief Executive Officer: There has been a bit of publicity around that, I've noticed. I will say we have obviously been in conversations with various equipment providers. And I don't know if it's the same model that Diamond and GE have entered into, but my guess is they're probably fairly similar. For us, we see some positives and some negatives. On the positive side, there's obviously an impact to near-term liquidity for the drilling contractor, which is good. And we also think it's positive to align critical equipment providers with drilling contractors with ultimately the operators to improve uptime performance. So those are two good things and things we've certainly considered. For us though, there appear to be two challenges. One is while we recognize the benefit of near-term liquidity when you sell the BOP and the associated spares, the ongoing cost from the equipment providers, the healthcare contract if you will, is a bit prohibitive. And so that's a concern for us. And the other piece of it is – if you think about that cost of the contract, it really increases your total cost of ownership. So while you get the benefit near term, the total cost of ownership longer term becomes a bit of a challenge for us. The other thing for us is we have been unbelievably successful in improving our uptime performance for all subsea-related equipment. And so when you look at the incremental cost associated with the service agreements plus we don't see a lot of incremental opportunity of improvement that this could potentially bring, for us we're not quite sure that the model works as we understand it today. Having said that, we are working with our equipment providers to look at other ways to align different models that may make more sense for us and also improve our uptime performance on our equipment. So it's something that we're pursuing. We're talking to equipment providers. My guess is the model will be different than what was announced by Diamond, but it's something that we're looking at.

Next we'll hear from Dan Boyd with BMO Capital Markets.

Hi, thanks. You mentioned that no other contracts can be canceled without penalty. Is it fair to say that if a rig were canceled at this point, you'd be made whole from an operating cash flow perspective?

Hi, Dan. We really don't go into the type of detail on individual contracts as to what the negotiated position is. So I really can't give you a lot of color on that.

Okay. And then lastly, just as I look at your newbuilds and those that are contracted and you look at the ones with Shell, they were already delayed. Are you in current negotiations to further delay those newbuilds, or are all those looking pretty solid from a scheduling standpoint? Jeremy D. Thigpen - President & Chief Executive Officer: I would say that we will continue to look at all options as this market unfolds. We've already announced the delays of the final two Shell newbuilds. We've announced delays on the five uncontracted jackups. We've announced delays on the two uncontracted drillships. But as this market continues to unfold, if it continues to look bleak, we obviously could go back to our shipyards, where we have great relationships, and talk to them about further delays. Mark L. Mey - Chief Financial Officer & Executive Vice President: But, Dan, let's be specific. As it relates to the two Shell rigs, those were delayed a year each at the request of Shell. At the moment, there's no discussions ongoing with regard to delaying those rigs any further. We understand from Shell that they have programs for those rigs when they come out in 2017 and 2018, so there's no further discussions on that. What Jeremy is referring to is the uncontracted rigs.

And next we'll move on to Darren Gacicia with KLR Group.

Hey, good morning. Thanks for taking my question. Just with regard to lowering costs on a support base, especially when I think of it in regards to other costs as you guys report it, when you talk about closing bases, how many were originally open? What is that number at now? What are we thinking of moving to? And what are some of the other moving parts both in terms of process and in terms of just straight up how you cut those costs? I'd love to get a little more granular on some of those points. Jeremy D. Thigpen - President & Chief Executive Officer: Sorry, Darren, I know you'd like to get a little more granular, but that's a lot of detail. And I think you should probably just stick with Mark's guidance that looks like a 40% year-over-year reduction in costs, and all of those fall into that.

Sure. Does it generate from consolidating different, separately operating companies that were acquired in the past and how that consolidates, or how does that – there's some commentary to be had about what's going on internally. Jeremy D. Thigpen - President & Chief Executive Officer: I think internally it's just around business simplification. This is an organization that had multiple acquisitions over the years. Maybe not all of them were fully integrated. And we've been in a market where everything's been up and to the right for a number of years. And in a market like that, sometimes you build in infrastructure, you build in processes that maybe you don't necessarily need, and especially as you're shrinking to a much smaller business than you were a few years ago. And so we're just taking a fresh look at our entire infrastructure, all of our positions, all of our roles, all of our processes to try to simplify and drive waste and cost out of the business. And so it's full scale across the board.

Got you. If I could just take one more in a different direction. I think you had mentioned in the prepared comments about debt repurchases further out into the maturity range. How are you weighing those versus liquidity and keeping cash and liquidity available on hand because clearly there's some value in buying discounted debt? How do you weigh the benefit of that and how lenders may look at that as well versus holding cash on hand? What's the balance of the logic there? Mark L. Mey - Chief Financial Officer & Executive Vice President: Darren, I think it's pretty obvious that liquidity over the near term, near term being the next three to five years, is of the utmost important to us. If you look at what we have done to date, about 10% of the funds we've used to repurchase debt has been focused on debt outside of that near-term liquidity window. So obviously, that indicates to you that our most important focus is on maintaining and increasing liquidity. But we will opportunistically take a look at buying some of the heavily discounted debt securities that we feel are vastly mispriced in the market.

Next we'll hear from Ian Macpherson with Simmons. Ian Macpherson - Simmons & Company International: Hey, good morning, just one for me, please. Mark, did you already impart or would you mind imparting the working capital reduction expectation specifically for this year? Mark L. Mey - Chief Financial Officer & Executive Vice President: Again, what I did indicate in my prepared comments was that it would be $600 million over the next two years. That's 2016 and 2017. And it's roughly equal, so a little more this year. I would say somewhere in that $350 million/$250 million split would not be too far off. Ian Macpherson - Simmons & Company International: Okay, good. That's all I have, thanks a lot. Jeremy D. Thigpen - President & Chief Executive Officer: Thanks, Ian.

And next we'll hear from Robin Shoemaker with Citibank Capital Markets.

Okay, thank you. So, Mark, I would like to ask about the revolver. On a lot of these calls we're hearing about restructured revolvers in some cases being reduced in size in exchange for more generous covenants, which is what prompts my question. But can you describe what covenants or restrictions might apply to your ability to access the revolver in the next year, two years? Mark L. Mey - Chief Financial Officer & Executive Vice President: Thanks, Robin. Yes, I'll even go further than that. I'll give it to you through the middle of 2019 as well.

Okay. Mark L. Mey - Chief Financial Officer & Executive Vice President: As you probably read in our 10-K, we have one financial covenant in our revolver, and that's a debt-to-cap covenant of 60%. We're currently sub-40% on that, and we have to incur significant additional reductions in our capital base or increases in our debt to get close to that level. So we have unfettered access to that revolver through the middle of 2019 when it matures, and specifically focused on our internal projections and models. So we don't have the three or four different financial covenants you would typically find in these revolvers because this was negotiated during a time when the company was still investment-grade.

Right, right. Understood, okay. My other question is more strategic. But in the downturn, drilling contractors always weighed this issue of length of term versus day rate. And in past downturns, the strategy is always keep the term short if the day rates are very weak and under pressure. But as you continuously take a fresh look at the market and the opportunities that may be out there, I just wonder if it's any different this time where there are some advantages to term even if the rate is just slightly cash positive, or maybe if you could share some thoughts on that. Jeremy D. Thigpen - President & Chief Executive Officer: Thanks, Robin. I would say there aren't a lot of opportunities that are out there, and those that are out there we're chasing aggressively. As long as it's a good solid professional customer that is creditworthy and we know they're going to pay their bills, we're getting aggressive. And I think as Terry said in her prepared remarks, a lot of these new opportunities are at or near cash breakeven. So I don't know that there's a lot of term be had out there. Those that are out there I think we secured in Q4, so we are just aggressively pursuing what's available.

Our final question comes from Waqar Syed with Goldman Sachs. Waqar Syed - Goldman Sachs & Co.: Terry, my question relates to stabilization of demand or what price level would be required to maybe stabilize demand. It's been just falling for the last several quarters now. So what do you think the price level would be?

Hi, Waqar. I think what the customers are saying, they just need to see some stability. I think that that would be the most positive thing that can happen. And in the conversations we're having with our customers, the majority are saying they believe that there will be some stability toward the end of 2016. Does that immediately translate into demand? It's not going to immediately, but at least it gives them a basis to have some more time to have thoughtful consideration of the type of programs that they would like to push out there. You can read and see and certainly in our conversations that they're going take a pause until they get some comfort. But again, we just need to have some stability and get that price moving in a positive direction. Waqar Syed - Goldman Sachs & Co.: And that stability, do you need that at a $50 or $60 level or higher or even at a lower level? And then recently do you see any differences where it could stabilize first or maybe grow first as well?

I think you need to look at what our customers are telling us, and a lot of the things we're seeing now is that they are resetting their cost basis. I think that there was a report that came out about Norway. And they were saying they had to take significant costs out of their structures. And now that $35 a barrel in Norway, if you can imagine, doesn't look so bad. So I think it's case by case, customer by customer, and area by area. And it's a really difficult thing to nail exactly what is the rate because it's so dependent on the area of operation and all the constraints involved with that. But again, I think it's just confidence and some stability.

That does conclude our question-and-answer session for today. At this time, I'd like to turn things back over to Brad Alexander for any additional or closing remarks.

Thank you, Eric, and thank you to everyone for your participation and questions today. If you have any further questions, please feel free to contact me. We will look forward to talking to you again when we report our first quarter 2016 results. Have a good day.

That does conclude today's conference. Thanks for your participation.