Transocean : 2Q21 10Q

TABLE OF CONTENTS

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 June 30, 2021

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

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	6312
Steinhausen, Switzerland
(Address of principal executive offices)	(Zip Code)

[phone]

(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 ☑ 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 ☑ 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 ☑ 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 ☑

As of July 27, 2021, 651,139,945 shares were outstanding.

TABLE OF CONTENTS

TRANSOCEAN LTD. AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2021

			Page
	PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Statements of Operations	1
		Condensed Consolidated Statements of Comprehensive Loss	2
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Equity	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4.	Controls and Procedures	27
	PART I	OTHER INFORMATION
	Item 1.	Legal Proceedings	27
	Item 1A.	Risk Factors	28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 6.	Exhibits	28

TABLE OF CONTENTS

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			Six months ended
				June 30,			June 30,
				2021			2020			2021			2020
Contract drilling revenues	$	656	$	930	$	1,309	$	1,689
Costs and expenses
	Operating and maintenance			434			525			869			1,065
	Depreciation and amortization			186			196			373			402
	General and administrative			39			45			78			88
				659			766			1,320			1,555
	Loss on impairment			-			(429)			-			(597)
	Gain (loss) on disposal of assets, net			1			1			(58)			-
	Operating loss			(2)			(264)			(69)			(463)
Other income (expense), net
	Interest income			4			4			7			13
	Interest expense, net of amounts capitalized			(115)			(153)			(230)			(313)
	Gain (loss) on retirement of debt			-			4			51			(53)
	Other, net			14			(56)			23			(44)
				(97)			(201)			(149)			(397)
	Loss before income tax expense			(99)			(465)			(218)			(860)
	Income tax expense (benefit)			4			32			(17)			28
Net loss			(103)			(497)			(201)			(888)
	Net income attributable to noncontrolling interest			-			-			1			1
	Net loss attributable to controlling interest	$	(103)	$	(497)	$	(202)	$	(889)
Loss per share, basic and diluted	$	(0.17)	$	(0.81)	$	(0.33)	$	(1.45)
	Weighted average shares, basic and diluted			621			615			619			615

See accompanying notes.

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TABLE OF CONTENTS

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions) (Unaudited)

				Three months			Six months ended
				ended
				June 30,			June 30,
				2021			2020			2021			2020
Net loss	$	(103)	$	(497)	$	(201)	$	(888)
	Net income attributable to noncontrolling interest			-			-			1			1
	Net loss attributable to controlling interest			(103)			(497)			(202)			(889)
Components of net periodic benefit costs before reclassifications			-			-			(5)			(9)
	Components of net periodic benefit costs reclassified to net loss			3			2			4			4
Other comprehensive income (loss) before income taxes			3			2			(1)			(5)
	Income taxes related to other comprehensive income (loss)			-			-			-			-
	Other comprehensive income (loss)			3			2			(1)			(5)
	Other comprehensive income attributable to noncontrolling interest			-			-			-			-
	Other comprehensive income (loss) attributable to controlling interest			3			2			(1)			(5)
Total comprehensive loss			(100)			(495)			(202)			(893)
	Total comprehensive income attributable to noncontrolling interest			-			-			1			1
	Total comprehensive loss attributable to controlling interest	$	(100)	$	(495)	$	(203)	$	(894)

See accompanying notes.

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TABLE OF CONTENTS

TRANSOCEAN LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)

				June 30,	December 31,
				2021			2020
Assets
	Cash and cash equivalents	$	988	$	1,154
	Accounts receivable, net of allowance of $2 at June 30, 2021 and December 31, 2020			539			583
	Materials and supplies, net of allowance of $145 and $143 at June 30, 2021 and December 31, 2020,
	respectively			433			434
	Restricted cash and cash equivalents			502			406
	Other current assets			156			163
	Total current assets			2,618			2,740
Property and equipment			23,054			23,040
	Less accumulated depreciation			(5,718)			(5,373)
	Property and equipment, net			17,336			17,667
	Contract intangible assets			280			393
	Deferred income taxes, net			8			9
	Other assets			956			995
	Total assets	$	21,198	$	21,804
Liabilities and equity
	Accounts payable	$	198	$	194
	Accrued income taxes			8			28
	Debt due within one year			536			505
	Other current liabilities			577			659
	Total current liabilities			1,319			1,386
Long-term debt			6,991			7,302
	Deferred income taxes, net			325			315
	Other long-term liabilities			1,251			1,366
	Total long-term liabilities			8,567			8,983
Commitments and contingencies
Shares, CHF 0.10 par value, 891,379,015 authorized, 142,363,647 conditionally authorized, 685,676,165 issued
	and 634,629,502 outstanding at June 30, 2021, and 824,650,660 authorized, 142,363,647 conditionally
	authorized, 639,676,165 issued and 615,140,276 outstanding at December 31, 2020			62			60
	Additional paid-in capital			13,578			13,501
	Accumulated deficit			(2,068)			(1,866)
	Accumulated other comprehensive loss			(264)			(263)
	Total controlling interest shareholders' equity			11,308			11,432
	Noncontrolling interest			4			3
	Total equity			11,312			11,435
	Total liabilities and equity	$	21,198	$	21,804

See accompanying notes.

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