GlobeNewswire Inc | Feb 22, 2021 04:19PM EST

February 22, 2021

-- Total contract drilling revenues were $690million (total adjusted contract drilling revenues of $747million), compared with $773million in the thirdquarter of 2020 (total adjusted contract drilling revenues of $830million); -- Revenue efficiency(1) was 97.2%, compared with 96.6% in the prior quarter; -- Operating and maintenance expense was $465million, compared with $470million in the prior period; -- Net loss attributable to controlling interest was $37million, $0.06per diluted share, compared with net income attributable to controlling interest of $359million, $0.51per diluted share, in the thirdquarter of 2020; -- Adjusted net loss was $209million, $0.34per diluted share, excluding $172million of net favorable items. This compares with adjusted net loss of $69million, $0.11per diluted share, in the previous quarter; -- Adjusted EBITDA was $210million, compared with adjusted EBITDA of $338million in the prior quarter; and -- Contract backlog was $7.8billion as of the February2021 Fleet Status Report.

STEINHAUSEN, Switzerland, Feb. 22, 2021 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $37million, $0.06per diluted share, for the three months ended December31, 2020.

Fourth quarter 2020 results included net favorable items of $172million, or $0.28per diluted share, as follows:

-- $137million, $0.22per diluted share, gain on retirement of debt; and -- $37million, $0.06per diluted share, related to discrete tax items, partially offset by: -- $2million of other net unfavorable items.

After consideration of these net favorable items, fourthquarter 2020 adjusted net loss was $209million, $0.34per diluted share.

Contract drilling revenues for the three months ended December31, 2020, decreased sequentially by $83million to $690million, primarily due to reduced activities for two rigs that were idle, one rig that demobilized from Canada to Norway and two rigs undertaking out-of-service maintenance in Brazil.

A non-cash revenue reduction of $57million was recognized in both the fourth and third quarters as a result of contract intangible amortization associated with the Songa and Ocean Rig acquisitions.

Operating and maintenance expense was $465million, compared with $470million in the prior quarter. The sequential decrease was primarily the result of decreased activity partially offset by higher in-service maintenance costs, out-of-service costs for the two rigs in Brazil, and a $20million increase in our allowance for excess materials and supplies.

General and administrative expense was $50million, up from $45million in the third quarter of 2020. The increase was primarily due to legal, professional and advisory fees.

Interest expense, net of amounts capitalized, was $117million, reduced from $145million, primarily as a result of our debt exchanges in the third quarter and debt repurchases in the fourth quarter. Interest income was $2million, compared with $6million in the previous quarter.

The Effective Tax Rate(2) was(147.9)%, down from (7.0)% in the prior quarter. The decrease was primarily due to benefits derived from the CARES Act and favorable changes in tax rates for various jurisdictions, partially offset by lower earnings before taxes due to a gain on debt restructuring booked in the prior quarter. The Effective Tax Rate excluding discrete items was (39.9)% compared to (45.6)% in previous quarter.

Net cash provided by operating activities was $278million, compared to $81million in the prior quarter. The fourth quarter cash provided by operating activities increased primarily due to collections of certain receivables and decreased income tax payments, payments to suppliers and interest payments.

Fourth quarter 2020 capital expenditures of $47million were primarily related to our newbuild drillships under construction coupled with capital upgrades for certain rigs in our fleet. This compares with $65million in the previous quarter.

I would like to recognize and thank the entire Transocean team for once again producing solid operating and financial results in the fourth quarter, said President and Chief Executive Officer Jeremy Thigpen. In the face of unprecedented challenges, we generated revenue efficiency of 97%, clearly demonstrating our commitment to delivering reliable and efficient operations for our customers, while keeping personnel on our rigs healthy and safe.

Thigpen added: As a direct result of our strong performance in 2020, we generated over $1billion in EBITDA, which, when combined with the multiple financing transactions consummated throughout the year, further bolstered our liquidity position. This liquidity, coupled with our industry-leading $7.8 billion backlog, provides us the financial stability to continue to invest in our people, the maintenance of our assets, and the development and deployment of new technologies that will further differentiate us in the eyes of our customers and shareholders.

Looking forward, we are mindful of the various challenges facing us; however, we believe that improving longer-term market fundamentals, and the increasing list of opportunities on the horizon bode well for an improvement in contracting activity later this year and into next.

Full Year 2020

For the year ended December31, 2020, net loss attributable to controlling interest totaled $567million, or $0.92per diluted share. Full year results included $101million, or $0.16per diluted share, net unfavorable items listed as follows:

-- $597million, $0.97per diluted share, loss on impairment of assets, -- $62million, $0.10per diluted share, loss on impairment of investments in unconsolidated affiliates, -- $61million, $0.10per diluted share, loss on disposal of assets; and -- $5million, $0.01per diluted share, in restructuring costs, including severance.

These unfavorable items were partially offset by:

-- $533million, $0.87per diluted share, gain on restructuring and retirement of debt; and -- $91million, $0.15per diluted share, related to discrete tax items.

After consideration of these net unfavorable items, adjusted net loss for 2020 was $466million, $0.76per diluted share.

Non-GAAP Financial Measures

We present our operating results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). We believe certain financial measures, such as Adjusted Contract Drilling Revenues, EBITDA, Adjusted EBITDA and Adjusted Net Income, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under U.S. GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP.

All non-GAAP measure reconciliations to the most comparative U.S. GAAP measures are displayed in quantitative schedules on the companys website at: www.deepwater.com.

About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services and believes that it operates one of the most versatile offshore drilling fleets in the world.

Transocean owns or has partial ownership interests in and operates a fleet of 37mobile offshore drilling units consisting of 27ultra-deepwater floaters and 10harsh environment floaters. In addition, Transocean is constructing twoultra-deepwater drillships.

For more information about Transocean, please visit: www.deepwater.com.

Conference Call Information

Transocean will conduct a teleconference starting at 9a.m. EST, 3p.m. CET, on Tuesday, February23, 2021, to discuss the results. To participate, dial +1 323-794-2588 and refer to conference code3168985 approximately 10minutes prior to the scheduled start time.

The teleconference will be simulcast in a listen-only mode at: www.deepwater.com, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the teleconference will be available at: www.deepwater.com, by selecting Investors, Financial Reports.

A replay of the conference call will be available after 12p.m. EST, 6p.m. CET, on Tuesday, February23, 2021. The replay, which will be archived for approximately 30days, can be accessed at +1 719-457-0820, passcode3168985 and pin 2562. The replay will also be available on the companys website.

Forward-Looking Statements

The statements described herein that are not historical facts are forward-looking statements within the meaning of Section27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements could contain words such as "possible," "intend," "will," "if," "expect," or other similar expressions. Forward-looking statements are based on managements current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, estimated duration of customer contracts, contract dayrate amounts, future contract commencement dates and locations, planned shipyard projects and other out-of-service time, sales of drilling units, timing of the companys newbuild deliveries, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the fluctuation of current and future prices of oil and gas, the global and regional supply and demand for oil and gas, the intention to scrap certain drilling rigs, the success of our business following prior acquisitions, the effects of the spread of and mitigation efforts by governments, businesses and individuals related to contagious illnesses, such as COVID-19, and other factors, including those and other risks discussed in the company's most recent Annual Report on Form10-K for the year ended December31, 2019, and in the company's other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize (or the other consequences of such a development worsen), or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or expressed or implied by such forward-looking statements. All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law. All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the companys website at: www.deepwater.com.

This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of the Swiss Financial Services Act (FinSA) or advertising within the meaning of the FinSA. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.

Notes

Revenue efficiency is defined as actual contract drilling revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the(1) measurement period, expressed as a percentage. Maximum revenue is defined as the greatest amount of contract drilling revenues, excluding revenues for contract terminations and reimbursements, the drilling unit could earn for the measurement period, excluding amounts related to incentive provisions. See the accompanying schedule entitled ?Revenue Efficiency.? Effective Tax Rate is defined as income tax expense divided by income(2) before income taxes. See the accompanying schedule entitled ?Supplemental Effective Tax Rate Analysis.?

Analyst Contact:Lexington May+1 832-587-6515

Media Contact:Pam Easton+1 713-232-7647

TRANSOCEAN LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Inmillions, except per share data)(Unaudited) Years ended December31, 2020 2019 2018 Contract drilling revenues $ 3,152 $ 3,088 $ 3,018 Costs and expenses Operating and maintenance 2,000 2,140 1,799 Depreciation and amortization 781 855 818 General and administrative 183 193 188 2,964 3,188 2,805 Loss on impairment (597 ) (609 ) (1,464 )Loss on disposal of assets, net (84 ) (12 ) ? Operating loss (493 ) (721 ) (1,251 ) Other income (expense), net Interest income 21 43 53 Interest expense, net of amounts (575 ) (660 ) (620 )capitalizedGain (loss) on restructuring and 533 (41 ) (3 )retirement of debtOther, net (27 ) 181 46 (48 ) (477 ) (524 )Loss before income tax expense (541 ) (1,198 ) (1,775 )Income tax expense 27 59 228 Net loss (568 ) (1,257 ) (2,003 )Net loss attributable to noncontrolling (1 ) (2 ) (7 )interestNet loss attributable to controlling $ (567 ) $ (1,255 ) $ (1,996 )interest Loss per share, basic and diluted $ (0.92 ) $ (2.05 ) $ (4.27 )Weighted average shares, basic and 615 612 468 diluted

TRANSOCEAN LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Inmillions, except share data)(Unaudited)

December31, 2020 2019 Assets Cash and cash equivalents $ 1,154 $ 1,790 Accounts receivable, net 583 654 Materials and supplies, net 434 479 Restricted cash and cash equivalents 406 558 Other current assets 163 159 Total current assets 2,740 3,640 Property and equipment 23,040 24,281 Less accumulated depreciation (5,373 ) (5,434 )Property and equipment, net 17,667 18,847 Contract intangible assets 393 608 Deferred income taxes, net 9 20 Other assets 995 990 Total assets $ 21,804 $ 24,105 Liabilities and equity Accounts payable $ 194 $ 311 Accrued income taxes 28 64 Debt due within oneyear 505 568 Other current liabilities 659 781 Total current liabilities 1,386 1,724 Long-term debt 7,302 8,693 Deferred income taxes, net 315 266 Other long-term liabilities 1,366 1,555 Total long-term liabilities 8,983 10,514 Commitments and contingencies Shares, CHF 0.10 par value, 824,650,660 authorized,142,363,647 conditionally authorized, 639,676,165 issuedand 615,140,276 outstanding at December 31, 2020,and 639,674,422 authorized, 142,365,398 conditionallyauthorized, 617,970,525 issued and 611,871,374 60 59 outstanding at December 31, 2019Additional paid-in capital 13,501 13,424 Accumulated deficit (1,866 ) (1,297 )Accumulated other comprehensive loss (263 ) (324 )Total controlling interest shareholders? equity 11,432 11,862 Noncontrolling interest 3 5 Total equity 11,435 11,867 Total liabilities and equity $ 21,804 $ 24,105

TRANSOCEAN LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Inmillions)(Unaudited)

Years ended December31, 2020 2019 2018 Cash flows from operating activities Net loss $ (568 ) $ (1,257 ) $ (2,003 )Adjustments to reconcile to net cash provided by operating activities:Contract intangible asset 215 187 112 amortizationDepreciation and amortization 781 855 818 Share-based compensation expense 31 37 45 Loss on impairment 597 609 1,464 Loss on impairment of investment in 62 ? ? unconsolidated affiliatesLoss on disposal of assets, net 84 12 ? (Gain) loss on restructuring and (533 ) 41 3 retirement of debtGain on termination of construction ? (132 ) ? contractsDeferred income tax expense 60 248 (16 )(benefit)Other, net 83 41 6 Changes in deferred revenues, net (73 ) 43 (139 )Changes in deferred costs, net 12 (33 ) 34 Changes in other operating assets (353 ) (311 ) 234 and liabilities, netNet cash provided by operating 398 340 558 activities Cash flows from investing activities Capital expenditures (265 ) (387 ) (184 )Proceeds from disposal of assets, 24 70 43 netInvestments in unconsolidated (19 ) (77 ) (107 )affiliatesCash paid in business combinations, ? ? (883 )net of cash acquiredProceeds from maturities ofunrestricted and restricted 5 123 507 investmentsDeposits to unrestricted investments ? ? (173 )Other, net (2 ) 3 ? Net cash used in investing (257 ) (268 ) (797 )activities Cash flows from financing activities Proceeds from issuance of debt, net 743 1,056 2,054 of discounts and issue costsRepayments of debt (1,637 ) (1,325 ) (2,105 )Proceeds from investments restricted ? ? 26 for financing activitiesPayments to terminate derivative ? ? (92 )instrumentsOther, net (36 ) (43 ) (30 )Net cash used in financing (930 ) (312 ) (147 )activities Net decrease in unrestricted and (789 ) (240 ) (386 )restricted cash and cash equivalentsUnrestricted and restricted cash andcash equivalents, beginning of 2,349 2,589 2,975 periodUnrestricted and restricted cash and $ 1,560 $ 2,349 $ 2,589 cash equivalents, end of period

TRANSOCEAN LTD. AND SUBSIDIARIESFLEET OPERATING STATISTICS Three months ended Years ended December31, September December31, December31, December31, 30,ContractDrilling 2020 2020 2019 2020 2019Revenues (inmillions)Contractdrilling revenuesUltra-deepwater $ 440 $ 490 $ 502 $ 2,094 $ 1,957floatersHarshenvironment 250 283 278 1,046 1,069floatersDeepwater ? ? ? ? 7floatersMidwater ? ? 12 12 55floatersTotal contractdrilling $ 690 $ 773 $ 792 $ 3,152 $ 3,088revenues

Three months ended Years ended December31, September December31, December31, December31, 30,Average Daily 2020 2020 2019 2020 2019Revenue ^(1)Ultra-deepwater $ 342,100 $ 329,300 $ 336,800 $ 324,500 $ 337,900floatersHarshenvironment 357,500 372,500 307,700 339,600 298,500floatersMidwater ? ? 119,400 111,400 118,400floatersTotal drilling $ 347,500 343,500 $ 317,700 $ 327,500 $ 313,400fleet

Three months ended Years ended December31, September December31, December31, December31, 30,Utilization ^ 2020 2020 2019 2020 2019(2)Ultra-deepwater 52 % 60 % 56 % 59 % 51 %floatersHarshenvironment 74 % 75 % 76 % 73 % 78 %floatersMidwater ? % ? % 33 % 37 % 37 %floatersTotal drilling 58 % 65 % 61 % 62 % 58 %fleet

Three months ended Years ended December31, September December31, December31, December31, 30,Revenue Efficiency ^ 2020 2020 2019 2020 2019(3)Ultra-deepwater 97 % 97 % 98 % 97 % 99 %floatersHarsh environment 98 % 96 % 94 % 95 % 95 %floatersMidwater floaters ? % ? % 91 % 86 % 99 %Total drilling fleet 97 % 97 % 96 % 96 % 97 % ^(1) Average daily revenue is defined as contract drilling revenues, excludingrevenues for contract terminations, reimbursements and contract intangibleamortization, earned per operating day. An operating day is defined as acalendar day during which a rig is contracted to earn a dayrate during the firmcontract period after commencement of operations. ^(2) Rig utilization is defined as the total number of operating days dividedby the total number of rig calendar days in the measurement period, expressedas a percentage. ^(3) Revenue efficiency is defined as actual contract drilling revenues,excluding revenues for contract terminations and reimbursements, for themeasurement period divided by the maximum revenue calculated for themeasurement period, expressed as a percentage. Maximum revenue is defined asthe greatest amount of contract drilling revenues, excluding revenues forcontract terminations and reimbursements, the drilling unit could earn for themeasurement period, excluding amounts related to incentive provisions.



TRANSOCEAN LTD. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES AND RECONCILIATIONSADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE(In millions, except per share data) YTD QTD YTD QTD YTD QTD YTD 12/31/20 12/31/20 09/30/20 09/30/20 06/30/20 06/30/20 03/31/20Adjusted Net LossNet income(loss)attributable $ (567 ) $ (37 ) $ (530 ) $ 359 $ (889 ) $ (497 ) $ (392 )to controllinginterest, asreportedRestructuring 5 (1 ) 6 5 1 1 ? costsLoss onimpairment of 597 ? 597 ? 597 430 167 assetsLoss ondisposal of 61 ? 61 61 ? ? ? assets, netLoss onimpairment ofinvestment in 62 3 59 ? 59 59 ? unconsolidatedaffiliates(Gain) loss onrestructuring (533 ) (137 ) (396 ) (449 ) 53 (4 ) 57 and retirementof debtDiscrete tax (91 ) (37 ) (54 ) (45 ) (9 ) 10 (19 )itemsNet loss, as $ (466 ) $ (209 ) $ (257 ) $ (69 ) $ (188 ) $ (1 ) $ (187 )adjusted AdjustedDiluted Loss Per Share:Dilutedearnings(loss) per $ (0.92 ) $ (0.06 ) $ (0.86 ) $ 0.51 $ (1.45 ) $ (0.81 ) $ (0.64 )share, asreportedRestructuring 0.01 ? 0.01 0.01 ? ? ? costsLoss onimpairment of 0.97 ? 0.97 ? 0.97 0.70 0.28 assetsLoss ondisposal of 0.10 ? 0.10 0.09 ? ? ? assets, netLoss onimpairment ofinvestment in 0.10 ? 0.10 ? 0.10 0.10 ? unconsolidatedaffiliates(Gain) loss onrestructuring (0.87 ) (0.22 ) (0.65 ) (0.65 ) 0.09 (0.01 ) 0.09 and retirementof debtDiscrete tax (0.15 ) (0.06 ) (0.09 ) (0.07 ) (0.02 ) 0.02 (0.03 )itemsDiluted lossper share, as $ (0.76 ) $ (0.34 ) $ (0.42 ) $ (0.11 ) $ (0.31 ) $ ? $ (0.30 )adjusted

YTD QTD YTD QTD YTD QTD YTD 12/31/19 12/31/19 09/30/19 09/30/19 06/30/19 06/30/19 03/31/19AdjustedNet LossNet lossattributableto $ (1,255 ) $ (51 ) $ (1,204 ) $ (825 ) $ (379 ) $ (208 ) $ (171 )controllinginterest, asreportedRestructuring 6 5 1 ? 1 1 ? costsGain onbargain (11 ) ? (11 ) ? (11 ) (9 ) (2 )purchaseLoss onimpairment of 609 25 584 583 1 1 ? assets(Gain) losson disposal 5 (2 ) 7 6 1 2 (1 )of assets,netGain onterminated (132 ) (132 ) ? ? ? ? ? constructioncontractsLoss onretirement of 41 2 39 12 27 9 18 debtDiscrete taxitems and (150 ) (110 ) (40 ) (10 ) (30 ) (5 ) (25 )other, netNet loss, as $ (887 ) $ (263 ) $ (624 ) $ (234 ) $ (390 ) $ (209 ) $ (181 )adjusted AdjustedDiluted Loss Per Share:Diluted lossper share, as $ (2.05 ) $ (0.08 ) $ (1.97 ) $ (1.35 ) $ (0.62 ) $ (0.34 ) $ (0.28 )reportedRestructuring 0.01 0.01 ? ? ? ? ? costsGain onbargain (0.02 ) ? (0.02 ) ? (0.02 ) (0.01 ) ? purchaseLoss onimpairment of 0.99 0.04 0.97 0.96 ? ? ? assets(Gain) losson disposal 0.01 ? 0.01 0.01 ? ? ? of assets,netGain onterminated (0.22 ) (0.22 ) ? ? ? ? ? constructioncontractsLoss onretirement of 0.07 ? 0.06 0.02 0.05 0.01 0.03 debtDiscrete taxitems and (0.24 ) (0.18 ) (0.07 ) (0.02 ) (0.05 ) ? (0.05 )other, netDiluted lossper share, as $ (1.45 ) $ (0.43 ) $ (1.02 ) $ (0.38 ) $ (0.64 ) $ (0.34 ) $ (0.30 )adjusted

TRANSOCEAN LTD. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES AND RECONCILIATIONSADJUSTED CONTRACT DRILLING REVENUESEARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION AND RELATEDMARGINS(In millions, except percentages) YTD QTD YTD QTD YTD QTD YTD 12/31/20 12/31/20 09/30/20 09/30/20 06/30/20 06/30/20 03/31/20 Contractdrilling $ 3,152 $ 690 $ 2,462 $ 773 $ 1,689 $ 930 $ 759 revenuesContractintangible 215 57 158 57 101 53 48 amortizationAdjustedContract $ 3,367 $ 747 $ 2,620 $ 830 $ 1,790 $ 983 $ 807 DrillingRevenues Net income $ (568 ) $ (39 ) $ (529 ) $ 359 $ (888 ) $ (497 ) $ (391 ) (loss)Interestexpense, net 554 115 439 139 300 149 151 of interestincomeIncome taxexpense 27 23 4 (24 ) 28 32 (4 ) (benefit)Depreciationand 781 189 592 190 402 196 206 amortizationContractintangible 215 57 158 57 101 53 48 amortizationEBITDA 1,009 345 664 721 (57 ) (67 ) 10 Restructuring 5 (1 ) 6 5 1 1 ? costsLoss onimpairment of 597 ? 597 ? 597 429 168 assetsLoss ondisposal of 61 ? 61 61 ? ? ? assets, net(Gain) loss onrestructuring (533 ) (137 ) (396 ) (449 ) 53 (4 ) 57 and retirementof debtLoss onimpairment ofinvestment in 62 3 59 ? 59 59 ? unconsolidatedaffiliatesAdjusted $ 1,201 $ 210 $ 991 $ 338 $ 653 $ 418 $ 235 EBITDA EBITDA margin 30 % 46 % 25 % 87 % (3 ) % (7 ) % 1 %Adjusted 36 % 28 % 38 % 41 % 36 % 43 % 29 %EBITDA margin

YTD QTD YTD QTD YTD QTD YTD 12/31/19 12/31/19 09/30/19 09/30/19 06/30/19 06/30/19 03/31/19 Contractdrilling $ 3,088 $ 792 $ 2,296 $ 784 $ 1,512 $ 758 $ 754 revenuesContractintangible 187 47 140 48 92 47 45 amortizationAdjustedContract $ 3,275 $ 839 $ 2,436 $ 832 $ 1,604 $ 805 $ 799 DrillingRevenues Net loss $ (1,257 ) $ (55 ) $ (1,202 ) $ (825 ) $ (377 ) $ (206 ) $ (171 ) Interestexpense, net 617 150 467 155 312 156 156 of interestincomeIncome taxexpense 59 (24 ) 83 54 29 37 (8 ) (benefit)Depreciationand 855 207 648 212 436 219 217 amortizationContractintangible 187 47 140 48 92 47 45 amortizationEBITDA 461 325 136 (356 ) 492 253 239 Restructuring 6 5 1 ? 1 1 ? costsLoss onimpairment of 609 25 584 583 1 1 ? assets(Gain) losson disposal 5 (2 ) 7 6 1 2 (1 ) of assets,netGain onbargain (11 ) ? (11 ) ? (11 ) (9 ) (2 ) purchaseLoss onretirement of 41 2 39 12 27 9 18 debtGain onterminationof (132 ) (132 ) ? ? ? ? ? constructioncontractsAdjusted $ 979 $ 223 $ 756 $ 245 $ 511 $ 257 $ 254 EBITDA EBITDA margin 14 % 39 % 6 % (43 ) % 31 % 31 % 30 %Adjusted 30 % 27 % 31 % 29 % 32 % 32 % 32 %EBITDA margin

TRANSOCEAN LTD. AND SUBSIDIARIES SUPPLEMENTAL EFFECTIVE TAX RATE ANALYSIS (In millions, except tax rates) Three months ended Years ended December31, September December31, December31, December31, 30, 2020 2020 2019 2020 2019 Income (loss)before income $ (16 ) $ 335 $ (79 ) $ (541 ) $ (1,198 ) taxesRestructuring (1 ) 5 5 5 6 costsGain onbargain ? ? ? ? (11 ) purchaseLoss onimpairment of ? ? 25 597 609 assets(Gain) loss ondisposal of ? 61 (2 ) 61 5 assets, netLoss onimpairment ofinvestment in 3 ? ? 62 ? unconsolidatedaffiliatesGain onterminated ? ? (132 ) ? (132 ) constructioncontracts(Gain) loss onrestructuring (137 ) (449 ) 2 (533 ) 41 and retirementof debtAdjusted lossbefore income $ (151 ) $ (48 ) $ (181 ) $ (349 ) $ (680 ) taxes Revenuesrecognized for (157 ) the settlementof disputesAdjusted lossbefore incometaxes for (506 ) determiningeffective taxrate Income taxexpense $ 23 $ (24 ) $ (24 ) $ 27 $ 59 (benefit)Restructuring ? ? ? ? ? costsGain onbargain ? ? ? ? ? purchaseLoss onimpairment of ? ? ? ? ? assets(Gain) loss ondisposal of ? ? ? ? ? assets, netLoss onimpairment ofinvestment in ? ? ? ? ? unconsolidatedaffiliatesGain onterminated ? ? ? ? ? constructioncontracts(Gain) loss onrestructuring ? ? ? ? ? and retirementof debtChanges in 41 43 110 95 150 estimates (1)Revenuesrecognized for (4 ) 2 ? (4 ) ? the settlementof disputesAdjustedincome tax $ 60 $ 21 $ 86 $ 118 $ 209 expense (2) Effective Tax (147.9 ) % (7.0 ) % 30.3 % (5.1 ) % (4.9 ) %Rate (3) Effective TaxRate,excluding (39.9 ) % (45.6 ) % (47.2 ) % (23.4 ) % (30.7 ) %discrete items(4) (1) Our estimates change as we file tax returns, settle disputes with taxauthorities, or become aware of changes in laws and other events that have an effect on our (a) deferred taxes, (b) valuation allowances on deferred taxesand (c) other tax liabilities. (2) The three months ended December 31, 2020 included $25 million of additionaltax expense, reflecting the cumulative effect of an increase in the annual effective tax rate from the previous quarter estimate. (3) Our effective tax rate is calculated as income tax expense divided by income before income taxes. (4) Our effective tax rate, excluding discrete items, is calculated as incometax expense, excluding various discrete items (such as changes in estimates andtax on items excluded from income before income taxes), divided by income before income tax expense, excluding gains and losses on sales and similaritems pursuant to the accounting standards for income taxes related toestimating the annual effective tax rate.