Supplemental Financial Information

Consolidated Balance Sheet Information

Accounts receivable, net, consisted of the following (in millions):



	September 30, 2016			December 31, 2015
Trade	$	355.7		$	595.0
Other	21.5			16.3
	377.2			611.3
Allowance for doubtful accounts	(25.1		)	(29.3		)
	$	352.1		$	582.0

Other current assets consisted of the following (in millions):



	September 30, 2016		December 31, 2015
Inventory	$	231.3	$	235.3
Prepaid taxes	51.2		73.5
Deferred costs	34.9		52.1
Prepaid expenses	11.7		20.5
Assets held-for-sale	2.4		5.5
Other	14.7		14.9
	$	346.2	$	401.8

Other assets, net, consisted of the following (in millions):



	September 30, 2016		December 31, 2015
Deferred tax assets	$	67.5	$	94.8
Deferred costs	38.9		55.8
Prepaid taxes on intercompany transfers of property	33.4		37.1
Supplemental executive retirement plan assets	28.3		33.1
Other	8.8		16.8
	$	176.9	$	237.6

Accrued liabilities and other consisted of the following (in millions):



	September 30, 2016		December 31, 2015
Deferred revenue	$	135.1	$	197.2
Personnel costs	116.1		161.6
Accrued interest	70.2		88.4
Taxes	65.0		70.8
Derivative liabilities	10.7		21.6
Other	11.0		11.3
	$	408.1	$	550.9

Other liabilities consisted of the following (in millions):



	September 30, 2016		December 31, 2015
Unrecognized tax benefits (inclusive of interest and penalties)	$	154.0	$	149.7
Deferred revenue	139.2		218.6
Supplemental executive retirement plan liabilities	29.4		34.4
Personnel costs	11.3		17.7
Deferred tax liabilities	9.3		4.4
Other	10.9		24.4
	$	354.1	$	449.2

Accumulated other comprehensive income consisted of the following (in millions):



	September 30, 2016			December 31, 2015
Derivative instruments	$	16.1		$	6.6
Currency translation adjustment	7.6			7.8
Other	(2.2		)	(1.9		)
	$	21.5		$	12.5

Concentration of Risk

We are exposed to credit risk relating to our receivables from customers, our cash and cash equivalents, our short-term investments and our use of derivatives in connection with the management of foreign currency exchange rate risk. We mitigate our credit risk relating to receivables from customers, which consist primarily of major international, government-owned and independent oil and gas companies, by performing ongoing credit evaluations. We also maintain reserves for potential credit losses, which generally have been within management's expectations. We mitigate our credit risk relating to cash and cash equivalents by focusing on diversification and quality of instruments. Cash equivalents consist of a portfolio of high-grade instruments. Custody of cash and cash equivalents is maintained at several well-capitalized financial institutions, and we monitor the financial condition of those financial institutions.

We mitigate our credit risk relating to derivative counterparties through a variety of techniques, including transacting with multiple, high-quality financial institutions, thereby limiting our exposure to individual counterparties and by entering into International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements, which include provisions for a legally enforceable master netting agreement, with our derivative counterparties. The terms of the ISDA agreements may also include credit support requirements, cross default provisions, termination events or set-off provisions. Legally enforceable master netting agreements reduce credit risk by providing protection in bankruptcy in certain circumstances and generally permitting the closeout and netting of transactions with the same counterparty upon the occurrence of certain events. See "Note 3 - Derivative Instruments" for additional information on our derivatives.

Consolidated revenues by customer for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Total⁽¹⁾	23	%	7	%	16	%	8	%
BP ⁽²⁾⁽³⁾	13	%	27	%	12	%	18	%
Petrobras⁽¹⁾	9	%	16	%	11	%	14	%
ConocoPhillips⁽⁴⁾	2	%	6	%	12	%	4	%
Other	53	%	44	%	49	%	56	%
	100	%	100	%	100	%	100	%


⁽¹⁾	During the three-month and nine-month periods ended September 30, 2016 and 2015, all revenues were attributable to our Floater segment.


⁽²⁾	During the three-month periods ended September 30, 2016 and 2015, 73% and 86% of the revenues provided by BP, respectively, were attributable to our Floaters segment. During the nine-month periods ended September 30, 2016 and 2015, 75% and 84% of the revenues provided by BP, respectively, were attributable to our Floaters segment.


⁽³⁾	During the three-month and nine-month periods ended September 30, 2015, excluding the impact of ENSCO DS-4 lump-sum termination payments of $110.6 million, revenues from BP represented 18% and 15%, respectively.

⁽⁴⁾

During the nine-month period ended September 30, 2016, excluding the impact of the ENSCO DS-9 lump-sum termination payment of $185.0 million, revenues from ConocoPhillips represented 3% of our consolidated revenues. During the three-month and nine-month period ended September 30, 2015, excluding the impact of a lump-sum payment of $18.4 million associated with the ENSCO DS-9 contract termination, revenues from ConocoPhillips represented 5% and 3%, respectively.

Consolidated revenues by region for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Angola⁽¹⁾	$	142.7	$	136.6	$	411.3	$	488.3
United Kingdom⁽²⁾	60.5		91.5		204.0		316.4
Brazil⁽³⁾	48.6		112.9		251.3		351.3
U.S. Gulf of Mexico⁽⁴⁾	33.6		363.0		498.3		972.8
Other	262.8		308.2		906.9		1,106.3
	$	548.2	$	1,012.2	$	2,271.8	$	3,235.1


⁽¹⁾	During the three-month periods ended September 30, 2016 and 2015, 87% of the revenues earned in Angola were attributable to our Floaters segment. During the nine-month period ended September 30, 2016 and 2015, 87% and 90% of the revenues earned in Angola, respectively, were attributable to our Floaters segment.


⁽²⁾	During the three-month and nine-month periods ended September 30, 2016 and 2015, all revenues were attributable to our Jackups segment.


⁽³⁾	During the three-month and nine-month periods ended September 30, 2016 and 2015, all revenues were attributable to our Floaters segment.

⁽⁴⁾

During the three-month periods ended September 30, 2016 and 2015, 41% and 90% of the revenues earned in the U.S. Gulf of Mexico, respectively, were attributable to our Floaters segment. During the nine-month periods ended September 30, 2016 and 2015, 86% of the revenues earned in the U.S. Gulf of Mexico were attributable to our Floaters segment. Revenue recognized during the nine-month period ended September 30, 2016 and three-month and nine-month periods ended September 30, 2015 included lump-sum payments totaling $205.0 million and $129.0 million, respectively, as discussed in "Note 1 - Unaudited Condensed Consolidated Financial Statements." ENSCO DS-9 termination revenues were attributed to the U.S. Gulf of Mexico as the related drilling contract was intended for operations in that region.