Note 9—Drilling Fleet

Construction work in progress—For the three months ended March 31, 2015 and 2014, the changes in our construction work in progress, including capital expenditures and capitalized interest, were as follows (in millions):

	Three months ended March 31,
	2015			2014
Construction work in progress, at beginning of period	$	2,451		$	2,710

Newbuild construction program
Deepwater Invictus (a) (b)	—			442
Deepwater Asgard (a) (b)	—			230
Deepwater Thalassa (c)	25			32
Deepwater Proteus (c)	9			6
Deepwater Conqueror (d)	18			80
Deepwater Pontus (c)	18			79
Deepwater Poseidon (c)	6			24
Ultra-Deepwater drillship TBN1 (e)	2			27
Transocean Cassiopeia (f)	1			1
Ultra-Deepwater drillship TBN2 (e)	—			27
Transocean Centaurus (f)	1			1
Transocean Cepheus (f)	1			1
Transocean Cetus (f)	1			1
Transocean Circinus (f)	1			1
Other construction projects and capital additions	118			179
Total capital expenditures	201			1,131
Changes in accrued capital expenditures	(22		)	(48		)

Property and equipment placed into service
Other property and equipment	(91		)	(178		)
Construction work in progress, at end of period	$	2,539		$	3,615

(a)

The accumulated construction costs of this rig are no longer included in construction work in progress, as the construction project had been completed as of March 31, 2015.

(b)

The Ultra-Deepwater drillships Deepwater Invictus and Deepwater Asgard, commenced operations in July 2014 and August 2014, respectively. The total carrying amount included capitalized costs of $272 million, representing the estimated fair value of construction in progress acquired in connection with our acquisition of Aker Drilling ASA in October 2011.

(c)

Deepwater Thalassa, Deepwater Proteus, Deepwater Pontus and Deepwater Poseidon, four newbuild Ultra-Deepwater drillships under construction at the Daewoo Shipbuilding & Marine Engineering Co. Ltd. shipyard in Korea, are expected to commence operations in the first quarter of 2016, the third quarter of 2016, the first quarter of 2017 and the second quarter of 2017, respectively.

(d)

Deepwater Conqueror, a newbuild Ultra-Deepwater drillship under construction at the Daewoo Shipbuilding & Marine Engineering Co. Ltd. shipyard in Korea, is expected to commence operations in the fourth quarter of 2016.

(e)

Our two unnamed dynamically positioned Ultra-Deepwater drillships under construction at the Jurong Shipyard PTE Ltd. in Singapore do not yet have drilling contracts and are expected to be delivered in the second quarter of 2017 and the first quarter of 2018, respectively.

(f)

Transocean Cassiopeia, Transocean Centaurus, Transocean Cepheus, Transocean Cetus and Transocean Circinus, five Keppel FELS Super B 400 Bigfoot class design newbuild High-Specification Jackups under construction at Keppel FELS’ shipyard in Singapore do not yet have drilling contracts and are expected to be delivered in the first quarter of 2018, the third quarter of 2018, the first quarter of 2019, the third quarter of 2019 and the first quarter of 2020, respectively. These delivery expectations reflect our decision to delay delivery in consideration of existing market conditions.

Dispositions—During the three months ended March 31, 2015, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the Deepwater Floater Discoverer Seven Seas and the Midwater Floater C. Kirk Rhein, Jr. along with related equipment, and in the three months ended March 31, 2015, we received aggregate net cash proceeds of $5 million. During the three months ended March 31, 2014, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the High-Specification Jackup GSF Monitor along with related equipment, and in the three months ended March 31, 2014, we received net cash proceeds of $83 million. In the three months ended March 31, 2015 and 2014, we received cash proceeds of $2 million and $8 million, respectively, and recognized an aggregate net loss of $9 million and $3 million, respectively, associated with the disposal of certain corporate assets and unrelated rig equipment.

During the three months ended March 31, 2015, we committed to a plan to sell the Ultra-Deepwater Floater Deepwater Expedition, the Deepwater Floaters Sedco 707 and Transocean Rather and the Midwater Floaters GSF Aleutian Key, GSF Arctic III and Transocean Legend, along with related equipment. At March 31, 2015, the aggregate carrying amount of our assets held for sale was $23 million, including the Ultra-Deepwater Floater Deepwater Expedition, the Deepwater Floaters Sedco 707, Sedco 710, Sovereign Explorer and Transocean Rather and the Midwater Floaters Falcon 100, GSF Aleutian Key, GSF Arctic I, GSF Arctic III, J.W. McLean, Sedco 601, Sedco 700, Sedneth 701 and Transocean Legend, along with related equipment. At December 31, 2014, the aggregate carrying amount of our assets held for sale was $25 million, including an aggregate carrying amount of $23 million for the Deepwater Floaters Discoverer Seven Seas, Sedco 710 and Sovereign Explorer and the Midwater Floaters C. Kirk Rhein, Jr., Falcon 100, GSF Arctic I, J.W. McLean, Sedco 601, Sedco 700 and Sedneth 701, along with related equipment, and an aggregate carrying amount of $2 million for the then remaining assets of our discontinued operations.

See Note 5—Impairments, Note 7—Discontinued Operations and Note 18—Subsequent Events.