10-Q 1 rig-20220331x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 001-38373

Graphic

Transocean Ltd.

(Exact name of registrant as specified in its charter)

Switzerland

98-0599916

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Turmstrasse 30

Steinhausen, Switzerland

6312

(Address of principal executive offices)

(Zip Code)

+41 (41) 749-0500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Shares, CHF 0.10 par value

RIG

New York Stock Exchange

0.50% Exchangeable Senior Bonds due 2023

RIG/23

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes þ   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes þ   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer  Non-accelerated filer  Smaller reporting company  Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No þ

As of April 25, 2022, 681,055,951 shares were outstanding.

TRANSOCEAN LTD. AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED March 31, 2022

Page

PART I.

FINANCIAL INFORMATION

1

2

3

4

5

6

14

22

22

23

23

23

24

PART I.  FINANCIAL INFORMATION

Item I.

Financial Statements

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)

Three months ended

March 31, 

   

2022

   

2021

 

Contract drilling revenues

$

586

$

653

Costs and expenses

Operating and maintenance

412

435

Depreciation and amortization

183

187

General and administrative

42

39

637

661

Gain (loss) on disposal of assets, net

1

(59)

Operating loss

(50)

(67)

Other income (expense), net

Interest income

2

3

Interest expense, net of amounts capitalized

(102)

(115)

Gain on retirement of debt

51

Other, net

1

9

(99)

(52)

Loss before income tax expense (benefit)

(149)

(119)

Income tax expense (benefit)

26

(21)

Net loss

(175)

(98)

Net income attributable to noncontrolling interest

1

Net loss attributable to controlling interest

$

(175)

$

(99)

Loss per share, basic and diluted

$

(0.26)

$

(0.16)

Weighted-average shares, basic and diluted

664

617

See accompanying notes.

- 1 -

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions)

(Unaudited)

Three months ended

March 31, 

   

2022

   

2021

   

Net loss

$

(175)

$

(98)

Net income attributable to noncontrolling interest

1

Net loss attributable to controlling interest

(175)

(99)

Components of net periodic benefit costs before reclassifications

(11)

(5)

Components of net periodic benefit costs reclassified to net loss

1

1

Other comprehensive loss before income taxes

(10)

(4)

Income taxes related to other comprehensive loss

Other comprehensive loss

(10)

(4)

Other comprehensive income attributable to noncontrolling interest

Other comprehensive loss attributable to controlling interest

(10)

(4)

Total comprehensive loss

(185)

(102)

Total comprehensive income attributable to noncontrolling interest

1

Total comprehensive loss attributable to controlling interest

$

(185)

$

(103)

See accompanying notes.

- 2 -

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

March 31,

December 31,

   

2022

   

2021

 

Assets

Cash and cash equivalents

 

$

911

$

976

Accounts receivable, net of allowance of $2 at March 31, 2022 and December 31, 2021

525

492

Materials and supplies, net of allowance of $188 and $183 at March 31, 2022 and December 31, 2021, respectively

386

392

Restricted cash and cash equivalents

315

436

Other current assets

142

148

Total current assets

2,279

2,444

Property and equipment

23,245

23,152

Less accumulated depreciation

(6,232)

(6,054)

Property and equipment, net

17,013

17,098

Contract intangible assets

144

173

Deferred tax assets, net

7

7

Other assets

920

959

Total assets

 

$

20,363

$

20,681

Liabilities and equity

Accounts payable

 

$

206

$

228

Accrued income taxes

19

17

Debt due within one year

636

513

Other current liabilities

491

545

Total current liabilities

1,352

1,303

Long-term debt

6,375

6,657

Deferred tax liabilities, net

470

447

Other long-term liabilities

1,035

1,068

Total long-term liabilities

7,880

8,172

Commitments and contingencies

Shares, CHF 0.10 par value, 891,379,306 authorized, 142,363,356 conditionally authorized, 754,244,072 issued

and 681,055,270 outstanding at March 31, 2022, and 891,379,306 authorized, 142,363,356 conditionally

authorized, 728,176,456 issued and 655,505,335 outstanding at December 31, 2021

67

64

Additional paid-in capital

13,790

13,683

Accumulated deficit

(2,633)

(2,458)

Accumulated other comprehensive loss

(94)

(84)

Total controlling interest shareholders’ equity

11,130

11,205

Noncontrolling interest

1

1

Total equity

11,131

11,206

Total liabilities and equity

 

$

20,363

$

20,681

See accompanying notes.

- 3 -

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In millions)

(Unaudited)

Three months ended

March 31, 

   

2022

   

2021

   

Shares

Balance, beginning of period

 

$

64

$

60

Issuance of shares

3

Balance, end of period

67

$

60

Additional paid-in capital

Balance, beginning of period

$

13,683

$

13,501

Share-based compensation

7

7

Issuance of shares

100

Balance, end of period

$

13,790

$

13,508

Accumulated deficit

Balance, beginning of period

$

(2,458)

$

(1,866)

Net loss attributable to controlling interest

(175)

(99)

Balance, end of period

$

(2,633)

$

(1,965)

Accumulated other comprehensive loss

Balance, beginning of period

$

(84)

$

(263)

Other comprehensive loss attributable to controlling interest

(10)

(4)

Balance, end of period

$

(94)

$

(267)

Total controlling interest shareholders’ equity

Balance, beginning of period

$

11,205

$

11,432

Total comprehensive loss attributable to controlling interest

(185)

(103)

Share-based compensation

7

7

Issuance of shares

103

Balance, end of period

$

11,130

$

11,336

Noncontrolling interest

Balance, beginning of period

$

1

$

3

Total comprehensive income attributable to noncontrolling interest

1

Balance, end of period

$

1

$

4

Total equity

Balance, beginning of period

$

11,206

$

11,435

Total comprehensive loss

(185)

(102)

Share-based compensation

7

7

Issuance of shares

103

Balance, end of period

$

11,131

$

11,340

See accompanying notes.

- 4 -

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Three months ended

March 31, 

    

2022

    

2021

   

Cash flows from operating activities

Net loss

 

$

(175)

$

(98)

Adjustments to reconcile to net cash provided by (used in) operating activities:

Contract intangible asset amortization

29

56

Depreciation and amortization

183

187

Share-based compensation expense

7

7

(Gain) loss on disposal of assets, net

(1)

59

Gain on retirement of debt

(51)

Deferred income tax expense

23

2

Other, net

21

7

Changes in deferred revenues, net

(11)

(37)

Changes in deferred costs, net

(4)

3

Changes in other operating assets and liabilities, net

(73)

(39)

Net cash provided by (used in) operating activities

(1)

96

Cash flows from investing activities

Capital expenditures

(106)

(59)

Investments in unconsolidated affiliates

(15)

Proceeds from disposal of assets, net

1

6

Net cash used in investing activities

(120)

(53)

Cash flows from financing activities

Repayments of debt

(165)

(139)

Proceeds from issuance of shares, net of issue costs

103

Other, net

(3)

(10)

Net cash used in financing activities

(65)

(149)

Net decrease in unrestricted and restricted cash and cash equivalents

(186)

(106)

Unrestricted and restricted cash and cash equivalents, beginning of period

1,412

1,560

Unrestricted and restricted cash and cash equivalents, end of period

 

$

1,226

$

1,454

See accompanying notes.

- 5 -

Table of Contents

TRANSOCEAN LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Business

Transocean Ltd. (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,” “we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas wells.  As of March 31, 2022, we owned or had partial ownership interests in and operated a fleet of 37 mobile offshore drilling units, consisting of 27 ultra-deepwater floaters and 10 harsh environment floaters.  As of March 31, 2022, we were constructing two ultra-deepwater drillships.

Note 2—Significant Accounting Policies

Presentation—We prepared our accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission.  Pursuant to such rules and regulations, these financial statements do not include all disclosures required by accounting principles generally accepted in the U.S. for complete financial statements.  The condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods.  Such adjustments are considered to be of a normal recurring nature unless otherwise noted.  Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any future period.  The accompanying condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto as of December 31, 2021 and 2020, and for each of the three years in the period ended December 31, 2021, included in our annual report on Form 10-K filed on February 23, 2022.

Accounting estimates—To prepare financial statements in accordance with accounting principles generally accepted in the U.S., we must make judgments by applying estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates and assumptions, including those related to our income taxes, property and equipment, equity investments, contingencies, allowance for excess materials and supplies, intangibles, postemployment benefit plans and share-based compensation.  We base our estimates and assumptions on historical experience and other factors that we believe are reasonable.  Actual results could differ from such estimates.

Fair value measurements—We estimate fair value at an exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  Our valuation techniques require inputs that we categorize using a three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) significant unobservable inputs, including those that require considerable judgment for which there is little or no market data (“Level 3”).  When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable.

Note 3—Unconsolidated Affiliates

Equity investments—We hold noncontrolling equity investments in various unconsolidated companies, including (a) our 33.0 percent ownership interest in Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”), a Cayman Islands company that, through its wholly owned subsidiary, owns the harsh environment floater Transocean Norge, (b) our interests in certain companies that are involved in researching and developing technology to improve efficiency, reliability, sustainability and safety for drilling and other activities and (c) our interest in Ocean Minerals LLC, the parent company of Moana Minerals Ltd., a Cook Islands subsea resource development company that was recently awarded an exploration license by the Cook Islands Seabed Minerals Authority, granting it exploration rights to a large subsea geographic area with substantial quantities of polymetallic nodules.  In the three months ended March 31, 2022, we made an aggregate cash contribution of $15 million to our equity investments.  At March 31, 2022 and December 31, 2021, the aggregate carrying amount of our equity investments was $98 million and $91 million, respectively, recorded in other assets, of which the aggregate carrying amount of our equity investment in Orion was $54 million and $57 million, respectively.

Related party transactions—We engage in certain related party transactions with our unconsolidated affiliates, the most significant of which are under agreements with Orion.  We operate, stack and maintain Transocean Norge under a management services agreement, and we market Transocean Norge under a marketing services agreement.  We lease Transocean Norge under a short-term bareboat charter agreement, which is scheduled to expire in October 2022.  Additionally, we procure and provide services and equipment from and to other unconsolidated affiliates for technological innovation and subsea minerals exploration.

In June 2021, Orion refinanced its shipyard loans under a financing arrangement for $100 million, in which we participated at a rate equivalent to our ownership interest in Orion.  At March 31, 2022 and December 31, 2021, the principal amount of outstanding borrowings due to us under the financing arrangement was $34 million, recorded in other assets.

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TRANSOCEAN LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS─continued

(Unaudited)

Note 4—Revenues

Overview—Our drilling services represent a single performance obligation under our drilling contracts with customers that is satisfied over time, the duration of which varies by contract.  As of March 31, 2022, the drilling contract with the longest expected remaining duration, excluding unexercised options, extends through February 2028.

Disaggregation—Our contract drilling revenues, disaggregated by asset group and by country in which they were earned, were as follows (in millions):

Three months ended March 31, 2022

Three months ended March 31, 2021

  

U.S.

  

Norway

  

Other (a)

  

Total

 

  

U.S.

  

Norway

  

Other (a)

  

Total

 

Ultra-deepwater floaters

 

$

268

$

$

122

$

390

 

 

$

266

$

$

170

$

436

 

Harsh environment floaters

193

3

196

4

202

11

217

Total contract drilling revenues

 

$

268

$

193

$

125

$

586

 

 

$

270

$

202

$

181

$

653

 

(a)Other represents the aggregate value for countries in which we operate that individually had attributable operating revenues representing less than 10 percent of consolidated operating revenues earned.

Contract liabilities—Contract liabilities for our contracts with customers were as follows (in millions):

March 31, 

December 31,

    

2022

    

2021

 

Deferred contract revenues, recorded in other current liabilities

 

$

86

$

83

Deferred contract revenues, recorded in other long-term liabilities

251

265

Total contract liabilities

 

$

337

$

348

Significant changes in contract liabilities were as follows (in millions):

Three months ended

March 31, 

    

2022

    

2021

 

Total contract liabilities, beginning of period

$

348

$

456

Decrease due to recognition of revenues for goods and services

(26)

(44)

Increase due to goods and services transferred over time

15

7

Total contract liabilities, end of period

$

337

$

419

Pre-operating costs—In the three months ended March 31, 2022 and 2021, we recognized pre-operating costs of $12 million and $14 million, respectively, recorded in operating and maintenance costs.  At March 31, 2022 and December 31, 2021, the carrying amount of our unrecognized pre-operating costs to obtain contracts was $27 million and $21 million, respectively, recorded in other assets.

Note 5—Long-Lived Assets

Construction work in progress—The changes in our construction work in progress were as follows (in millions):

Three months ended

March 31, 

    

2022

    

2021

 

Construction work in progress, beginning of period

 

$

1,017

$

828

Capital expenditures

Newbuild construction program

92

45

Other equipment and construction projects

14

14

Total capital expenditures

106

59

Changes in accrued capital additions

(12)

(7)

Property and equipment placed into service

(12)

(14)

Construction work in progress, end of period

 

$

1,099

$

866

Dispositions—During the three months ended March 31, 2021, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the harsh environment floater Leiv Eiriksson and related assets.  In the three months ended March 31, 2021, we received aggregate net cash proceeds of $4 million and recognized an aggregate net loss of $60 million ($0.10 per diluted share), which had no tax effect, associated with the disposal of these assets.

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TRANSOCEAN LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS─continued

(Unaudited)

Note 6—Debt

Overview

Outstanding debt—The aggregate principal amounts and aggregate carrying amounts, including the contractual interest payments of previously restructured debt and unamortized debt-related balances, such as discounts, premiums and issue costs, were as follows (in millions):

Principal amount

Carrying amount

 

March 31, 

December 31,

 

March 31, 

December 31,

 

2022

    

2021

  

 

2022

    

2021

  

5.52% Senior Secured Notes due May 2022

$

$

18

$

$

18

3.80% Senior Notes due October 2022

27

27

27

27

0.50% Exchangeable Senior Bonds due January 2023

140

140

140

140

5.375% Senior Secured Notes due May 2023

306

306

304

304

5.875% Senior Secured Notes due January 2024

393

435

389

430

7.75% Senior Secured Notes due October 2024

300

300

296

296

6.25% Senior Secured Notes due December 2024

313

313

309

309

6.125% Senior Secured Notes due August 2025

369

402

364

397

7.25% Senior Notes due November 2025

411

411

407

406

4.00% Senior Guaranteed Exchangeable Bonds due December 2025

294

294

266

264

7.50% Senior Notes due January 2026

569

569

566

565

2.50% Senior Guaranteed Exchangeable Bonds due January 2027

238

238

268

271

11.50% Senior Guaranteed Notes due January 2027

687

687

1,043

1,078

6.875% Senior Secured Notes due February 2027

516

550

510

544

8.00% Senior Notes due February 2027

612

612

608

607

7.45% Notes due April 2027

52

52

52

52

8.00% Debentures due April 2027

22

22

22

22

7.00% Notes due June 2028

261

261

265

265

7.50% Notes due April 2031

396

396

394

394

6.80% Senior Notes due March 2038

610

610

605

605

7.35% Senior Notes due December 2041

177

177

176

176

Total debt

6,693

6,820

7,011

7,170

Less debt due within one year

5.52% Senior Secured Notes due May 2022

18

18

3.80% Senior Notes due October 2022

27

27

27

27

0.50% Exchangeable Senior Bonds due January 2023

140

140

5.375% Senior Secured Notes due May 2023

63

63

62

62

5.875% Senior Secured Notes due January 2024

83

83

81

80

7.75% Senior Secured Notes due October 2024

60

60

58

58

6.25% Senior Secured Notes due December 2024

62

62

61

61

6.125% Senior Secured Notes due August 2025

66

66

64

64

2.50% Senior Guaranteed Exchangeable Bonds due January 2027

6

6

11.50% Senior Guaranteed Notes due January 2027

70

70

6.875% Senior Secured Notes due February 2027

69

69

67

67

Total debt due within one year

570

448

636

513

Total long-term debt

$

6,123

$

6,372

 

$

6,375

$

6,657

Scheduled maturities—At March 31, 2022, scheduled maturities of our debt, including the principal installments and other installments, representing the contractual interest payments of previously restructured debt, were as follows  (in millions):

    

Principal

    

Other

    

 

    

installments

    

installments

    

Total

 

Twelve months ending March 31,

2023

$

570

$

76

$

646

2024

818

77

895

2025

516

77

593

2026

1,528

78

1,606

2027

1,743

78

1,821

Thereafter

1,518

1,518

Total installments of debt

$

6,693

$

386

7,079

Total unamortized debt-related balances, net

(68)

Total carrying amount of debt

$

7,011

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TRANSOCEAN LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS─continued

(Unaudited)

Credit agreements

Secured Credit Facility—As of March 31, 2022, we have a $1.33 billion secured revolving credit facility established under a bank credit agreement (as amended from time to time, the “Secured Credit Facility”), which is scheduled to mature on June 22, 2023.  The Secured Credit Facility is guaranteed by Transocean Ltd. and certain wholly owned subsidiaries.  We may borrow under the Secured Credit Facility at either (1) the reserve adjusted London Interbank Offered Rate plus a margin (the “Secured Credit Facility Margin”), which ranges from 2.625 percent to 3.375 percent based on the credit rating of the Secured Credit Facility, or (2) the base rate specified in the credit agreement plus the Secured Credit Facility Margin, minus one percent per annum.  Throughout the term of the Secured Credit Facility, we pay a facility fee on the amount of the underlying commitment, which ranges from 0.375 percent to 1.00 percent based on the credit rating of the Secured Credit Facility.  At March 31, 2022, based on the credit rating of the Secured Credit Facility on that date, the Secured Credit Facility Margin was 3.375 percent and the facility fee was 0.875 percent.  At March 31, 2022, we had no borrowings outstanding, $14 million of letters of credit issued, and we had $1.32 billion of available borrowing capacity under the Secured Credit Facility.

Shipyard financing arrangement—In June 2021, one of our wholly owned subsidiaries entered into credit agreements with Jurong Shipyard Pte Ltd. establishing facilities (the “Shipyard Loans”) to finance all or a portion of the final payments expected to be owed to the shipyard upon delivery of the ultra-deepwater floaters Deepwater Atlas and Deepwater Titan.  The Shipyard Loans are guaranteed by Transocean Inc.  Borrowings under the Shipyard Loan for Deepwater Atlas will be secured by, among other security, a lien on the rig.  In certain circumstances, borrowings under the Shipyard Loan for Deepwater Titan may also be secured by, among other security, a lien on the rig.  We will repay the borrowings, together with interest of 4.5 percent per annum, according to the selected installment schedule over a maximum of a six-year period following delivery of the drilling rigs.  We have the right to prepay any outstanding borrowings, in full or in part, without penalty.  The Shipyard Loans contain covenants that, among other things, limit the ability of the subsidiary owners of the drilling rigs to incur certain types of additional indebtedness or make certain additional commitments or investments.  At March 31, 2022, we had no borrowings outstanding under the Shipyard Loans.

Exchangeable bonds

Exchange terms—At March 31, 2022, the (a) current exchange rates, expressed as the number of Transocean Ltd. shares per $1,000 note, (b) implied exchange prices per Transocean Ltd. share and (c) aggregate shares, expressed in millions, issuable upon exchange of our exchangeable bonds were as follows:

Implied

    

Exchange

    

exchange

    

Shares

    

    

rate

    

price

    

issuable

    

0.50% Exchangeable Senior Bonds due January 2023

97.29756

$

10.28

13.6

4.00% Senior Guaranteed Exchangeable Bonds due December 2025

190.47620

5.25

56.0

2.50% Senior Guaranteed Exchangeable Bonds due January 2027

162.16260

6.17

38.6

The exchange rates of our exchangeable bonds, identified above, are subject to adjustment upon the occurrence of certain events.  The 0.50% exchangeable senior bonds due January 2023 (the “0.50% Exchangeable Senior Bonds”) may be exchanged by holders into Transocean Ltd. shares at an