10q10k10q10k.net

What changed in Transocean Ltd.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Transocean Ltd.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+394 added−381 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-18)

Top changes in Transocean Ltd.'s 2025 10-K

394 paragraphs added · 381 removed · 189 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+11 added−12 removed57 unchanged
Biggest changeGulf ​ Ocean Rig Apollo ​ Drillship ​ 2015 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Ocean Rig Athena ​ Drillship ​ 2014 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Deepwater Skyros ​ Drillship ​ 2013 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Angola ​ Ocean Rig Mylos ​ Drillship ​ 2013 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) (f) ​ Stacked ​ Discoverer India ​ Drillship ​ 2010 ​ 1,130 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Discoverer Americas ​ Drillship ​ 2009 ​ 1,130 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Discoverer Clear Leader ​ Drillship ​ 2009 ​ 1,130 ​ 12,000 ​ 40,000 ​ (a) (b) (f) ​ Stacked ​ Deepwater Corcovado ​ Drillship ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Deepwater Mykonos ​ Drillship ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Deepwater Orion ​ Drillship ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Deepwater Champion ​ Drillship ​ 2011 ​ 1,000 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Dhirubhai Deepwater KG2 ​ Drillship ​ 2010 ​ 1,000 ​ 12,000 ​ 35,000 ​ (a) ​ Brazil ​ Petrobras 10000 ​ Drillship ​ 2009 ​ 1,000 ​ 12,000 ​ 37,500 ​ (a) (b) ​ Brazil ​ Dhirubhai Deepwater KG1 ​ Drillship ​ 2009 ​ 1,000 ​ 12,000 ​ 35,000 ​ (a) ​ India ​ GSF Development Driller I ​ Semisubmersible ​ 2005 ​ 1,000 ​ 7,500 ​ 37,500 ​ (a) (b) (h) ​ Stacked ​ Discoverer Luanda ​ Drillship ​ 2010 ​ 750 ​ 7,500 ​ 40,000 ​ (a) (b) ​ Stacked ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Harsh environment floaters (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transocean Norge ​ Semisubmersible ​ 2019 ​ 1,000 ​ 10,000 ​ 40,000 ​ (a) (h) (i) ​ Norwegian N.
Biggest changeGulf ​ Ocean Rig Apollo ​ ​ ​ 2015 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Ocean Rig Athena ​ ​ ​ 2014 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Stacked ​ Deepwater Skyros ​ ​ ​ 2013 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) ​ Ivory Coast ​ Ocean Rig Mylos ​ ​ ​ 2013 ​ 1,250 ​ 12,000 ​ 40,000 ​ (a) (b) (g) ​ Stacked ​ Deepwater Corcovado ​ ​ ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Deepwater Mykonos ​ ​ ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Deepwater Orion ​ ​ ​ 2011 ​ 1,000 ​ 10,000 ​ 35,000 ​ (a) (b) ​ Brazil ​ Dhirubhai Deepwater KG2 ​ ​ ​ 2010 ​ 1,000 ​ 12,000 ​ 35,000 ​ (a) ​ Brazil ​ Petrobras 10000 ​ ​ ​ 2009 ​ 1,000 ​ 12,000 ​ 37,500 ​ (a) (b) ​ Brazil ​ Dhirubhai Deepwater KG1 ​ ​ ​ 2009 ​ 1,000 ​ 12,000 ​ 35,000 ​ (a) ​ India ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Harsh environment semisubmersibles (7) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transocean Norge ​ ​ ​ 2019 ​ 1,000 ​ 10,000 ​ 40,000 ​ (a) (f) (i) ​ Norwegian N.
Our fleet consists of ultra-deepwater drillships and semisubmersibles and harsh environment semisubmersibles that are designed with high-specification capabilities to operate in the technically demanding regions of the global offshore drilling business. Ultra-deepwater floaters are equipped with high-pressure mud pumps and are capable of drilling in water depths of 4,500 feet or greater.
Our fleet of floaters consists of ultra-deepwater drillships and harsh environment semisubmersibles that are designed with high-specification capabilities to operate in the technically demanding regions of the global offshore drilling business. Ultra-deepwater floaters are equipped with high-pressure mud pumps and are capable of drilling in water depths of 4,500 feet or greater.
Vayda started his professional career with Booz Allen Hamilton, Management Consultants. He earned a Master of Business Administration degree from the Fuqua School of Business at Duke University, Durham, North Carolina in May 1992, and a Bachelor of Science degree in Engineering from the Catholic University of America at Washington, D.C. in May 1985.
Vayda started his professional career with Booz Allen Hamilton, Management Consultants. He earned a Master of Business Administration degree from the Fuqua School of Business at Duke University, Durham, North Carolina in May 1992, and a Bachelor of Science degree in Engineering from the Catholic University of America at Washington, D.C. in May 1985. Jeremy D.
Mackenzie served previously as Senior Vice President, Marketing, Innovation and Industry Relations from August 2018 to February 2022; Vice President, Marketing and Contracts from February 2017 to August 2018; Managing Director, Business Development and Strategic Accounts from February 2016 to February 2017; and as a Marketing Director in the U.S., France, and Dubai from March 2012 to February 2016.
Mackenzie served as Senior Vice President, Marketing, Innovation and Industry Relations from August 2018 to February 2022; Vice President, Marketing and Contracts from February 2017 to August 2018; Managing Director, Business Development and Strategic Accounts from February 2016 to February 2017; and as a Marketing Director in the U.S., France, and Dubai from March 2012 to February 2016.
At December 31, 2024, among other equity investments, we held noncontrolling equity ownership interests in Global Sea Mineral Resources NV, an unconsolidated Belgian company and leading developer of nodule collection technology, which is engaged in the development and exploration of deep-sea polymetallic nodules that contain metals critical to the growing renewable energy market.
At December 31, 2025, among other equity investments, we held noncontrolling equity ownership interests in Global Sea Mineral Resources NV, an unconsolidated Belgian company and leading developer of nodule collection technology, which is engaged in the development and exploration of deep-sea polymetallic nodules that contain metals critical to the growing renewable energy market.
Drillships are floating vessels that are shaped like conventional ships, generally self-propelled and considered to be the most mobile of the major rig types. Drillships typically have greater deck load and storage capacity than semisubmersible rigs, which provides logistical and resupply efficiency benefits for customers.
Drillship features —Drillships are floating vessels that are shaped like conventional ships, generally self-propelled and considered to be the most mobile of the major rig types. Drillships typically have greater deck load and storage capacity than semisubmersible rigs, which provides logistical and resupply efficiency benefits for customers.
Semisubmersible floaters are capable of maintaining their position over a well either through dynamic positioning or the use of mooring systems. Although most semisubmersible rigs are relocated with the assistance of tugs, some units are self-propelled and move between locations under their own power when afloat on pontoons.
Semisubmersible floaters are capable of maintaining their position over a well either through dynamic positioning or the use of mooring systems. Although most semisubmersibles are relocated with the assistance of tugs, some units are self-propelled and move between locations under their own power when afloat on pontoons.
Semisubmersibles are floating vessels that can be partially submerged by means of a water ballast system such that the lower column sections and pontoons are below the water surface during drilling operations. Semisubmersibles are known for stability, making them well suited for operating in rough sea conditions.
Semisubmersible features —Semisubmersibles are floating vessels that can be partially submerged by means of a water ballast system such that the lower column sections and pontoons are below the water surface during drilling operations. Semisubmersibles are known for stability, making them well suited for operating in rough sea conditions.
Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements— Note 1—Business , Note 5—Revenues and Note 6—Long-Lived Assets .” Drilling Fleet Overview —We provide contract drilling services using our fleet of mobile offshore drilling units, including both drillships and semisubmersibles, broadly referred to as floaters.
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements— Note 1—Business , Note 5—Revenues and Note 6—Long-Lived Assets .” Drilling Fleet Overview —We provide contract drilling services using our fleet of mobile offshore drilling units, including both drillships and semisubmersibles, broadly referred to as floaters.
Adamson served in multiple executive positions with responsibilities spanning Engineering and Technical Services, Major Capital Projects, Human Resources, and more recently, Operations Integrity and HSE. Mr. Adamson started his career as a drilling engineer with BP Exploration in 1991 and joined Transocean in July 1995.
Since 2010, Mr. Adamson served in multiple executive positions with responsibilities spanning Engineering and Technical Services, Major Capital Projects, Human Resources, and more recently, Operations Integrity and HSE. Mr. Adamson started his career as a drilling engineer with BP Exploration in 1991 and joined Transocean in July 1995.
Risk Factors—Risks related to our business—Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations. ” Markets Our operations are geographically dispersed in oil and gas exploration and development areas throughout the world.
Risk Factors—Risks related to our business—Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations. ” Market Our operations are geographically dispersed in oil and gas exploration and development areas throughout the world.
To date, we have not incurred material costs to comply with such governmental regulations, and we do not expect to make any material capital expenditures to support our continued compliance in the year ending December 31, 2025, or any other period contemplated at this time.
To date, we have not incurred material costs to comply with such governmental regulations, and we do not expect to make any material capital expenditures to support our continued compliance in the year ending December 31, 2026, or any other period contemplated at this time.
We intend to satisfy the requirement under Item 5.05 of Form 8-K to disclose any amendments to our Code of Integrity and any waiver from any provision of our Code of Integrity by posting such information in the Governance page on our website at www.deepwater.com . - 8 - Table of Contents
We intend to satisfy the requirement under Item 5.05 of Form 8-K to disclose any amendments to our Code of Integrity and any waiver from any provision of our Code of Integrity by posting such information in the Governance page on our website at www.deepwater.com .
The actual cost to return to service, which in many instances could be significant and could fluctuate over time, depends upon various factors, including the availability and cost of shipyard facilities, the cost of - 2 - Table of Contents equipment and materials, the extent of repairs, maintenance and commercial upgrades that may ultimately be required, the length of time a rig has spent in stacking mode and the time and cost of assembling and training crew.
The actual cost to return to service, which in many instances could be significant and could fluctuate over time, depends upon various factors, including the availability and cost of shipyard facilities, the cost of equipment and materials, the extent of repairs, maintenance and commercial upgrades that may ultimately be required, the length of time a rig has spent in stacking mode and the time and cost of assembling and training crew.
We maintain a Code of Integrity and Human Rights Policy that applies to all board members, executives, employees and business partners, including contractors, suppliers, vendors, investees and joint venture partners. We demonstrate respect of human rights by aiming to maintain a healthy and safe work environment, observe fair employment practices and provide competitive employment terms.
We maintain a Code of Integrity and a Human Rights Policy Statement that apply to all board members, executives, employees and business partners, including contractors, suppliers, vendors, investees and joint venture partners. We demonstrate respect of human rights by aiming to maintain a healthy and safe work environment, observe fair employment practices and provide competitive employment terms.
We operate in a single, global offshore drilling market, as our drilling rigs are mobile assets and can be moved according to prevailing market conditions. We may mobilize our drilling rigs between regions for a variety of reasons, including to respond to customer contracting requirements or to capture observed market demand.
We operate in a single, global offshore drilling market, as our drilling rigs are mobile floating vessels and can be moved according to prevailing market conditions. We may mobilize our drilling rigs between regions for a variety of reasons, including to respond to customer contracting requirements or to capture observed market demand.
Risk Factors—Risks related to our business—Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts .” Under dayrate drilling contracts, consistent with standard industry practice, our customers, as the operators, generally assume, and grant indemnity for, subsurface and well control risks, and their consequential damages.
Risk Factors—Risks related to our business—Our drilling - 4 - Table of Contents contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts. ” Contractual indemnity —Under dayrate drilling contracts, consistent with standard industry practice, our customers, as the operators, generally assume, and grant indemnity for, subsurface and well control risks, and their consequential damages.
Practices such as modern slavery, child labor, forced or indentured servitude, and other human rights abuses are strictly prohibited. Labor rights —We respect the labor rights of all individuals in our workforce, including the right to collective bargaining.
Practices such as modern slavery, child labor, forced or indentured servitude, and other human rights abuses are strictly prohibited. - 5 - Table of Contents Labor rights —We respect the labor rights of all individuals in our workforce, including the right to collective bargaining.
We prioritize the protection of everyone aboard our rigs and in our facilities, the environment and our property at all work locations and during all operations. - 5 - Table of Contents We require compliance with local regulations, and our operations are governed by a comprehensive set of internal requirements.
We prioritize the protection of everyone aboard our rigs and in our facilities, the environment and our property at all work locations and during all operations. We require compliance with local regulations, and our operations are governed by a comprehensive set of internal requirements.
A stacked rig typically has reduced operating and maintenance costs, is staffed by a reduced crew or has no crew and is (a) preparing for an extended period of inactivity, (b) expected to continue to be inactive for an extended period or (c) completing a period of extended inactivity.
A stacked rig typically has - 2 - Table of Contents reduced operating and maintenance costs, is staffed by a reduced crew or has no crew and is (a) preparing for an extended period of inactivity, (b) expected to continue to be inactive for an extended period or (c) completing a period of extended inactivity.
Drilling units —The following table, presented as of February 12, 2025, provides certain specifications for our rigs, excluding rigs classified as held for sale. Unless otherwise noted, the stated location of each rig indicates either the current drilling location, if the rig is operating, or the next operating location, if the rig is in shipyard with a follow-on contract.
Drilling units —The following table, presented as of February 19, 2026, provides certain specifications for our rigs, excluding rigs classified as held for sale. Unless otherwise noted, the stated location of each rig indicates either the current drilling location, if the rig is operating, or the next operating location, if the rig is in shipyard with a follow-on contract.
The harsh environment market sector includes regions that are more challenged by lower temperatures, harsher weather conditions and water currents. - 4 - Table of Contents The market for offshore drilling rigs and related services reflects our customers’ demand for equipment for drilling exploration, appraisal and development wells and for performing maintenance on existing production wells.
The harsh environment market sector includes regions that are more challenged by lower temperatures, harsher weather conditions and water currents. The market for offshore drilling rigs and related services reflects our customers’ demand for equipment for drilling exploration, appraisal and development wells and for performing maintenance on existing production wells.
Gulf ​ Deepwater Pontus ​ Drillship ​ 2017 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S. Gulf ​ Deepwater Conqueror ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S.
Gulf ​ Deepwater Pontus ​ ​ ​ 2017 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (g) (h) ​ U.S. Gulf ​ Deepwater Conqueror ​ ​ ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) (h) ​ U.S.
As of December 31, 2024, approximately 43 percent of our total workforce, working primarily in Brazil and Norway, is represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiations.
As of December 31, 2025, approximately 45 percent of our total workforce, working primarily in Brazil and Norway, is represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiations.
Consequently, we cannot predict the future percentage of our revenues that will be derived from particular geographic areas. As of February 12, 2025, the drilling units in our fleet, including stacked and idle rigs, were located in the U.S.
Consequently, we cannot predict the future percentage of our revenues that will be derived from particular geographic areas. As of February 19, 2026, the drilling units in our fleet, including stacked and idle rigs, were located in the U.S.
As of February 12, 2025, we owned all of the drilling rigs in our fleet noted in the tables below, except for the ultra-deepwater floater Petrobras 10000 , which is subject to a finance lease through August 2029. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ​ Hook ​ Water ​ Drilling ​ ​ ​ Contracted ​ ​ ​ ​ ​ entered ​ load ​ depth ​ depth ​ ​ ​ location or ​ ​ ​ ​ ​ service / ​ capacity ​ capacity ​ capacity ​ ​ ​ standby ​ Rig category and name Type upgraded (short tons) (in feet) (in feet) Specifications status Ultra-deepwater floaters (26) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deepwater Titan ​ Drillship ​ 2023 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (c) ​ U.S.
As of February 19, 2026, we owned all the drilling rigs in our fleet noted in the tables below, except for the ultra-deepwater drillship Petrobras 10000 , which is subject to a finance lease through August 2029. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ​ Hook ​ Water ​ Drilling ​ ​ ​ Contracted ​ ​ ​ ​ ​ entered ​ load ​ depth ​ depth ​ ​ ​ location or ​ ​ ​ ​ ​ service / ​ capacity ​ capacity ​ capacity ​ ​ ​ standby ​ Rig category and name ​ ​ ​ ​ ​ ​ ​ upgraded ​ ​ ​ (short tons) ​ ​ ​ (in feet) ​ ​ ​ (in feet) ​ ​ ​ Specifications ​ ​ ​ status Ultra-deepwater drillships (20) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deepwater Titan ​ ​ ​ 2023 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (c) ​ U.S.
A - 3 - Table of Contents dayrate drilling contract generally extends over a period of time either covering the drilling of a single well or group of wells or covering a stated term.
A dayrate drilling contract generally extends over a period of time either covering the drilling of a single well or group of wells or covering a stated term.
Environmental Responsibility We strive to deliver services in a manner that minimizes the impact of our business on the environment. We continuously monitor our operations and seek innovative ways to enhance our ability to meet our objectives. We maintain a global Environmental Management System (“EMS”) standard, aligned to ISO 14001, that we apply to our rigs, offices and facilities.
Environmental Responsibility We strive to deliver services in a manner that minimizes the impact of our business on the environment. We continuously monitor our operations and seek innovative ways to enhance our ability to meet our objectives. We maintain a global Environmental Management System (“EMS”) standard that applies to all our rigs, offices and facilities.
Automated safety and monitoring tools —We developed and, on eight of our drilling units, deployed our patented HaloGuard ℠ system, which is designed to alarm, notify and, if required, halt equipment to avoid injury to personnel who move into danger zones.
Automated safety and monitoring tools —We employ the patented HaloGuard ℠ system on ten of our drilling units, which is designed to alarm, notify and, if required, halt equipment to avoid injury to personnel who move into danger zones.
Dual-activity technology employs structures, equipment and techniques using two drilling stations within a dual derrick to allow these drillships to perform simultaneous drilling tasks in a parallel, rather than a sequential manner, which reduces critical path activity and improves efficiency in both exploration and development drilling.
We have 18 drillships that are equipped with dual-activity technology that employs structures, equipment and techniques using two drilling stations within a dual derrick to allow these drillships to perform simultaneous drilling tasks in a parallel, rather than a sequential manner, which reduces critical path activity and improves efficiency in both exploration and development drilling.
At December 31, 2024, we held partial ownership interests in companies organized in Belgium, the Cayman Islands, the U.S., Norway and other countries.
At December 31, 2025, we held partial ownership interests in companies organized in Belgium, the Cayman Islands, the U.K., Norway and other countries.
Gulf ​ Deepwater Asgard ​ Drillship ​ 2014 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) ​ U.S. Gulf ​ Deepwater Invictus ​ Drillship ​ 2014 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) ​ U.S.
Gulf ​ Deepwater Invictus ​ ​ ​ 2014 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S.
Sea ​ Transocean Encourage ​ Semisubmersible ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (h) (i) ​ Norwegian N.
Sea ​ Transocean Encourage ​ ​ ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (f) (i) ​ Norwegian N.
In 2020, we launched our smart equipment analytics tool, which delivers real-time data feeds from equipment to monitor equipment health, inferred emissions and energy consumption while identifying performance trends that allow us to systematically optimize equipment maintenance and achieve higher levels of reliability, operational efficiency and sustainability.
We use our smart equipment analytics tool to deliver real-time data feeds from equipment across our fleet to monitor equipment health, inferred emissions and energy consumption while identifying performance trends that allow us to systematically optimize equipment maintenance and achieve higher levels of reliability, operational efficiency and sustainability.
In the year ended December 31, 2024, our TRIR was 0.15 and our LTIR was 0.00, the calculations for which were based on 11.7 million labor hours.
In the year ended December 31, 2025, our TRIR was 0.19 and our LTIR was 0.00, the calculations for which were based on 11.5 million labor hours.
Thigpen served as the Director of Business Development and Special Assistant to the Chairman for NOV Inc. Mr. Thigpen earned a Bachelor of Arts degree in Economics and Managerial Studies from Rice University in 1997, and he completed the Program for Management Development at Harvard Business School in 2001. Keelan Adamson is President and Chief Operating Officer of the Company.
Thigpen served as the Director of Business Development and Special Assistant to the Chairman for NOV Inc. Mr. Thigpen earned a Bachelor of Arts degree in Economics and Managerial Studies from Rice University in 1997, and he completed the Program for Management Development at Harvard Business School in 2001. Brady K.
In addition, Mr. Mackenzie has previously served in various operational and project roles around the globe, starting his career at the Company as a rig-based engineer in 1997. Mr. Mackenzie currently serves as Vice President for Offshore Division of the International Association of Drilling Contractors and on various committees for the Offshore Energy Center. Mr.
In addition, Mr. Mackenzie has previously served in various operational and project roles around the globe, starting his career at the Company as a rig-based engineer in 1997. Mr. Mackenzie currently serves as Chair for the International Association of Drilling Contractors. Mr.
Sea ​ Transocean Barents ​ Semisubmersible ​ 2009 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (h) (j) ​ Romania ​ Transocean Enabler ​ Semisubmersible ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (h) (i) ​ Norwegian N.
Sea ​ Transocean Barents ​ ​ ​ 2009 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (b) (i) ​ Romania ​ Transocean Enabler ​ ​ ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (f) (i) ​ Norwegian N.
Jason Pack is Senior Vice President and Chief Accounting Officer of the Company. Before being named to his current position in August 2024, he served as Chief Audit Executive from August 2018 to July 2024. Mr. Pack previously served as Vice President, Internal Audit at NOV Inc., where he spent 16 years. At NOV Inc., Mr.
Before being named to his current position in August 2024, he served as Chief Audit Executive from August 2018 to July 2024. Mr. Pack previously served as Vice President, Internal Audit at NOV Inc., where he spent 16 years. At NOV Inc., Mr.
Gulf ​ Deepwater Proteus ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S. Gulf ​ Deepwater Thalassa ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S.
Gulf ​ Deepwater Proteus ​ ​ ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (g) (h) ​ U.S.
(i) Automated drilling control. (j) Dual activity. ​ Drilling Contracts Our offshore drilling services contracts are individually negotiated and vary in their terms and conditions. We obtain most of our drilling contracts through bidding processes in competition against other drilling services contractors and through direct negotiations with operators.
Drilling Contracts Overview —Our drilling services contracts are individually negotiated and vary in their terms and conditions. We obtain most of our drilling contracts through bidding processes in competition against other drilling services contractors and through direct negotiations with operators.
At December 31, 2024, our global workforce was geographically distributed in 22 countries across six continents as follows: 37 percent in North America, 26 percent in South America, 24 percent in Europe, six percent in Australia, four percent in Africa, and three percent in Asia.
At December 31, 2025, our global workforce was geographically distributed in 20 countries across six continents as follows: 38 percent in North America, 26 percent in South America, 23 percent in Europe, six percent in Australia, four percent in Africa, and three percent in Asia.
Some of these companies or joint ventures in which we are an investor are involved in researching and developing technology to improve efficiency, reliability, sustainability and safety for our drilling and other activities or are involved in businesses developed to support renewable or other energy alternatives. We may or may not control these partially owned companies.
Some of these companies or joint ventures in which we invest are involved in (a) businesses developed to support renewable or other energy alternatives or (b) research and development of technology to improve efficiency, reliability, sustainability and safety of our drilling and other activities. We may or may not control these partially owned companies.
Gulf of Mexico (nine units), Greece (seven units), Brazil (six units), the Norwegian North Sea (four units), Malaysia (two units), Australia (two units), Angola (one unit), Canada (one unit), India (one unit) and Romania (one unit). We categorize the sectors of the floater market in which we operate as follows: (1) ultra-deepwater and deepwater, (2) harsh environment and (3) midwater.
Gulf of America (eight units), Brazil (six units), the Norwegian North Sea (four units), Greece (three units), Australia (two units), India (one unit), Ivory Coast (one unit), Mexico (one unit) and Romania (one unit). We categorize the market sectors in which we operate as follows: (1) ultra-deepwater and deepwater, (2) harsh environment and (3) midwater.
Gulf ​ Deepwater Atlas ​ Drillship ​ 2022 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (d) ​ U.S. Gulf ​ Deepwater Aquila ​ Drillship ​ 2024 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) ​ Brazil ​ Deepwater Poseidon ​ Drillship ​ 2018 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) ​ U.S.
Gulf ​ Deepwater Aquila ​ ​ ​ 2024 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ Brazil ​ Deepwater Poseidon ​ ​ ​ 2018 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (f) (g) (h) ​ U.S.
Sea ​ Transocean Spitsbergen ​ Semisubmersible ​ 2010 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (h) (i) (j) ​ Norwegian N.
Sea ​ Transocean Spitsbergen ​ ​ ​ 2010 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (b) (i) ​ Norwegian N.
Before joining the Company in this position in April 2015, Mr. Thigpen served as Senior Vice President and Chief Financial Officer at NOV Inc. from December 2012 to April 2015. At NOV Inc., Mr.
Thigpen served as Senior Vice President and Chief Financial Officer at NOV Inc. from December 2012 to April 2015. At NOV Inc., Mr.
Mackenzie earned a bachelor's degree in Civil Engineering with Environmental Studies from the University of Strathclyde in 1997, and completed the Advanced Management Program at Harvard Business School in 2016. - 6 - Table of Contents R. Thaddeus Vayda is Executive Vice President and Chief Financial Officer of the Company.
Mackenzie earned a bachelor's degree in Civil Engineering with Environmental Studies from the University of Strathclyde in 1997, and completed the Advanced Management Program at Harvard Business School in 2016. Jason Pack is Senior Vice President and Chief Accounting Officer of the Company.
Adamson earned a bachelor's degree in Aeronautical Engineering from The Queens University of Belfast in 1991 and completed the Advanced Management program at Harvard Business School in 2016. Brady K. Long is Executive Vice President and Chief Legal Officer of the Company. Before being named to his current position in March 2018, Mr.
Adamson earned a bachelor's degree in Aeronautical Engineering from The Queens University of Belfast in 1991 and completed the Advanced Management program at Harvard Business School in 2016. - 6 - Table of Contents R. Thaddeus Vayda is Executive Vice President and Chief Financial Officer of the Company. Before being named to his current position in May 2024, Mr.
At December 31, 2024, our contract backlog was $8.74 billion, representing a decrease of six percent and an increase of five percent, respectively, compared to our contract backlog of $9.25 billion and $8.34 billion at December 31, 2023 and 2022, respectively. See “ Part II. Item 7.
At December 31, 2025, our contract backlog was $6.29 billion, representing a decrease of 28 percent and a decrease of 32 percent, compared to our contract backlog of $8.74 billion and $9.25 billion at December 31, 2024 and 2023, respectively. See “ Part II. Item 7.
(b) Patented dual activity. (c) Two 20,000 psi blowout preventers. (d) One 15,000 psi blowout preventer and one 20,000 psi blowout preventer. (e) One 15,000 psi blowout preventer and designed to accommodate a future 20,000 psi blowout preventer. (f) Two 15,000 psi blowout preventers. (g) Designed to accommodate a future upgrade to 20,000 psi blowout preventer(s). (h) Moored.
(d) One 15,000 psi blowout preventer and one 20,000 psi blowout preventer. (e) One 15,000 psi blowout preventer and designed to accommodate a future 20,000 psi blowout preventer. (f) Automated drilling control. (g) Two 15,000 psi blowout preventers. (h) Designed to accommodate a future upgrade to 20,000 psi blowout preventer(s). (i) Moored.
Harsh environment floaters are capable of drilling in harsh environments in water depths between 1,500 and 10,000 feet and typically have greater displacement than other semisubmersibles, which offers larger variable load capacity, more useable deck space and better motion characteristics. Fleet status —Depending on market conditions, we may idle or stack our non-contracted rigs.
Harsh environment floaters are capable of drilling in harsh environments in water depths between 1,500 and 10,000 feet and typically have greater displacement than other semisubmersibles, which offers larger variable load capacity, more useable deck space and better motion characteristics.
Drilling contracts generally provide for payment on a dayrate basis, typically with higher rates for periods when drilling operations are optimized and, conversely, lower or zero rates for periods during which the drilling unit is not mobilized or when drilling operations are interrupted or restricted, whether due to equipment breakdowns, adverse environmental conditions, regulatory approvals or otherwise.
Drilling contracts generally provide for payment on a dayrate basis, typically with higher rates for periods when drilling operations are optimized or as incentives to complete drilling operations on or ahead of an agreed schedule and, conversely, lower or zero rates for periods when the drilling unit is not mobilized or when drilling operations are interrupted or restricted, whether due to equipment breakdowns, adverse environmental conditions, regulatory approvals or otherwise, which in limited cases may include lower rates for periods when drilling operations are necessary to extend beyond an agreed schedule.
Our shares are listed on the New York Stock Exchange under the ticker symbol “RIG.” For information about the revenues, operating income, assets and other information related to our business and the geographic areas in which we operate, see “ Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “Part II.
For information about the revenues, operating income, assets and other information related to our business, our agreement to acquire of Valaris, and the geographic areas in which we operate, see “ Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “Part II. Item 8.
We have two ultra-deepwater drillships that are equipped with an industry-leading, 1,700 short ton hoisting capacity. We have 23 ultra-deepwater drillships that are equipped with our patented dual-activity technology.
We have two drillships that are equipped with an industry-leading, 1,700 short ton hoisting capacity.
Drilling equipment and well control —Twenty-three drillships and one semisubmersible in our existing fleet are equipped with our patented dual-activity technology, which allows our rigs to perform simultaneous drilling tasks in a parallel rather than sequential manner, reducing well construction critical path activities and, thereby, improving efficiency in both exploration and development drilling.
We have eighteen drillships and two harsh environment semisubmersibles that are equipped with dual-activity technology, which allows our rigs to perform simultaneous drilling tasks in a parallel rather than sequential manner, reducing well construction critical path activities and, thereby, improving efficiency in both exploration and development drilling.
Ongoing efforts —We believe our efforts to continuously improve, and effectively use, innovative technologies to meet or exceed our customers’ requirements is critical to maintaining our competitive position within the contract drilling services industry by ensuring the safety of our crews, drilling more efficient wells, building greater resilience into our critical operating systems and reducing fuel consumption and emissions.
Risk Factors—Risks related to laws, regulations and government compliance—We are subject to cybersecurity risks and threats as well as risks related to the use of artificial intelligence and the regulation of data privacy and security.” We believe our efforts to continuously improve, and effectively use, innovative technologies to meet or exceed our customers’ requirements is critical to maintaining our competitive position within the contract drilling services industry by ensuring the safety of our crews, drilling more efficient wells, building greater resilience into our critical operating systems and reducing fuel consumption and emissions.
Long served as Senior Vice President and General Counsel from November 2015 to March 2018. From 2011 to November 2015, when Mr. Long joined the Company, he served as Vice President–General Counsel and Secretary of Ensco plc, which acquired Pride International, Inc. where he had served as Vice President, General Counsel and Secretary since August 2009. Mr.
Long joined the Company, he served as Vice President–General Counsel and Secretary of Ensco plc, which acquired Pride International, Inc. where he had served as Vice President, General Counsel and Secretary since August 2009. Mr. Long joined Pride International, Inc. in June 2005 as Assistant General Counsel and served as Chief Compliance Officer from June 2006 to February 2009.
Three of our nine semisubmersibles are equipped with dual-activity technology and also have mooring capability. Two of these three dual-activity units are custom-designed, high-capacity semisubmersible drilling rigs, equipped for year-round operations in harsh environments, such as those of the Norwegian continental shelf and sub-Arctic waters.
All of our semisubmersibles have mooring capability and are equipped for year-round operations in harsh environments, such as those of the Norwegian continental shelf and sub-Arctic waters. Two of our seven semisubmersibles are custom-designed, high-capacity drilling rigs, equipped with dual-activity technology. Fleet status —Depending on market conditions, we may idle or stack our non-contracted rigs.
As of February 11, 2025, we owned or had partial ownership interests in and operated 34 mobile offshore drilling units, consisting of 26 ultra-deepwater floaters and eight harsh environment floaters.
As of February 17, 2026, we owned or had partial ownership interests in and operated 27 mobile offshore drilling units, consisting of 20 ultra-deepwater drillships and seven harsh environment semisubmersibles.
Before being named to his current position in February 2022, Mr. Adamson served as Executive Vice President and Chief Operations Officer from August 2018 to February 2022, as Senior Vice President, Operations from October 2017 to July 2018 and as Senior Vice President, Operations Integrity and HSE, from June 2015 to October 2017. Since 2010, Mr.
Adamson served as President and Chief Operating Officer of the Company from February 2022 to May 2025. Mr. Adamson served as Executive Vice President and Chief Operations Officer from August 2018 to February 2022, as Senior Vice President, Operations from October 2017 to July 2018 and as Senior Vice President, Operations Integrity and HSE, from June 2015 to October 2017.
Joint Venture, Agency and Sponsorship Relationships and Other Investments In some areas of the world, local customs and practice or governmental requirements necessitate the formation of joint ventures with local participation since local laws or customs in those areas effectively mandate the establishment of a relationship with a local agent or sponsor.
In addition, our EMS is ISO 14001 certified for the management of the operation of drilling services to the global offshore oil and gas industry. - 7 - Table of Contents Joint Venture, Agency and Sponsorship Relationships and Other Investments In some areas of the world, local customs and practice or governmental requirements necessitate the formation of joint ventures with local participation since local laws or customs in those areas effectively mandate the establishment of a relationship with a local agent or sponsor.
Long joined Pride International, Inc. in June 2005 as Assistant General Counsel and served as Chief Compliance Officer from June 2006 to February 2009. He was director of Transocean Partners LLC from May 2016 until December 2016. Mr. Long previously practiced corporate and securities law with the law firm of Bracewell LLP. Mr.
He was director of Transocean Partners LLC from May 2016 until December 2016. Mr. Long previously practiced corporate and securities law with the law firm of Bracewell LLP. Mr.
Technological Innovation Overview —We have a long history of technological innovation, including the first dynamically positioned drillship, the first rig to drill year-round in the North Sea, the first semisubmersible rig for year-round sub-Arctic operations, the first 10,000-ft. water depth rated ultra-deepwater drillship, the first eighth-generation drillships and numerous water depth world records over the past several decades.
Technology Overview —Celebrating 100 years of drilling, we have a long history of technological innovation, including the first dynamically positioned drillship, the first semisubmersible rig to drill year-round in the North Sea, the first 10,000-ft. water depth rated ultra-deepwater drillship, the first dual-activity drillship and the first eighth-generation drillships with 1,700-ton hoisting systems and 20,000-psi well-control systems.
This technology is currently deployed on two of our floaters and is being installed on a third floater. In 2024, we deployed the rotary multi-tool pipe cleaner and wellbore protector on one harsh environment floater with two additional systems in progress.
In 2021, we deployed the industry’s first kinetic blowout stopper, a step-changing technology for well control that delivers unrivaled shearing capability, and we have deployed this technology on two of our floaters. Since 2024, we installed the rotary multi-tool pipe cleaner and wellbore protector on three floaters with one additional system in progress.
Sea ​ Transocean Endurance ​ Semisubmersible ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (h) (i) ​ Australia ​ Transocean Equinox ​ Semisubmersible ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (h) (i) ​ Australia ​ Henry Goodrich ​ Semisubmersible ​ 1985/2007 ​ 750 ​ 5,000 ​ 30,000 ​ (h) ​ Stacked ​ (a) Dynamically positioned.
Sea ​ Transocean Endurance ​ ​ ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (f) (i) ​ Australia ​ Transocean Equinox ​ ​ ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (f) (i) ​ Australia ​ (a) Dynamically positioned. (b) Dual activity. (c) Two 20,000 psi blowout preventers.
Thaddeus Vayda « Executive Vice President and Chief Financial Officer 62 ​ Jason Pack ​ Senior Vice President and Chief Accounting Officer 50 ​ « Member of our executive management team for purposes of Swiss law. Jeremy D. Thigpen is Chief Executive Officer and a member of the Company’s board of directors.
Mackenzie ​ ​ Executive Vice President and Chief Commercial Officer ​ 50 ​ Jason Pack ​ Senior Vice President and Chief Accounting Officer 51 ​ « Member of our executive management team for purposes of Swiss law. Keelan Adamson is President and Chief Executive Officer of the Company. Before being named to his current position in May 2025, Mr.
Automated drilling platforms and robotics —We utilize technology, including artificial intelligence (“AI”) technologies, and employ a data-driven approach, augmented by the size of our fleet, to expand our knowledge framework for sustainable process optimization.
Automated drilling control and robotics —We utilize available technology and employ data-driven methods, augmented by the size of our fleet, to expand our knowledge framework for sustainable process optimization. Our automated fleet includes four ultra-deepwater drillships and five harsh environment semisubmersibles that are equipped with an automated drilling control system, and we have two more installations in progress.
Twelve drillships in our existing fleet are outfitted with dual blowout preventers and triple liquid mud systems. Six drillships in our existing fleet are designed to accept 20,000 psi blowout preventers in the future. In 2021, we deployed the industry’s first kinetic blowout stopper, a step-changing technology for well control that delivers unrivaled shearing capability.
Two of our drillships are equipped with 1,700 short ton hoisting capacity and 20,000 psi blowout preventers. Ten drillships in our fleet are outfitted with dual blowout preventers and triple liquid mud systems. Six drillships in our fleet are designed to accept 20,000 psi blowout preventers in the future.
We also have six harsh environment floaters and two ultra-deepwater floaters equipped with an automated drilling control system. Since 2022, we have deployed on three ultra-deepwater drillships an offshore robotics riser bolting system, which has handled over 3,000 riser joints without human intervention.
Additionally, since 2022, we have three ultra-deepwater drillships that are equipped with an offshore robotics riser system that handles riser joint bolting without human intervention, and we have one more installation in progress.
There is no family relationship between any of our executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Age as of ​ Officer ​ Office February 11, 2025 Jeremy D. Thigpen « Chief Executive Officer 50 ​ Keelan Adamson « ​ President and Chief Operating Officer ​ 55 ​ Brady K.
None of our executive officers has any family relationship with any director or other executive officer. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Age as of ​ Officer ​ ​ ​ ​ Office ​ ​ ​ February 17, 2026 Keelan Adamson « ​ President and Chief Executive Officer ​ 56 ​ R.
We develop and deploy industry-leading technology in the pursuit of delivering safer, more efficient and environmentally responsible drilling services to our customers. We also continue to develop and invest in technologies designed to differentiate our service offerings, including optimizing our performance, delivering ever - improving operational integrity and reducing our greenhouse gas emissions.
We develop, invest in and deploy industry-leading technology to differentiate our service offerings in the pursuit of delivering ever-improving operational integrity with safer, more efficient and environmentally responsible drilling services for our customers. - 3 - Table of Contents Although we do not currently use artificial intelligence (“AI”) in our offshore drilling operations, we have introduced AI tools to streamline certain high-volume office and administrative tasks and are exploring use cases to further improve productivity.
Long ​ Executive Vice President and Chief Legal Officer 52 ​ Roderick J. Mackenzie ​ ​ Executive Vice President and Chief Commercial Officer ​ 49 ​ R.
Thaddeus Vayda « Executive Vice President and Chief Financial Officer 63 ​ Jeremy D. Thigpen « ​ Executive Chair ​ 51 ​ Brady K. Long ​ Executive Vice President and Chief Legal Officer 53 ​ Roderick J.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook .” Customers We provide our offshore drilling services to most of the leading integrated energy companies or their affiliates, as well as for many government-owned or government-controlled energy companies and other independent energy companies.
Added
Our shares are listed on the New York Stock Exchange under the ticker symbol “RIG.” On February 9, 2026, we and Valaris entered into a Business Combination Agreement (the "Agreement") providing for the Business Combination.
Removed
For the year ended December 31, 2024, our most significant customers were Shell plc (together with its affiliates, “Shell”), Petróleo Brasileiro S.A. (together with its affiliates, “Petrobras”) and Equinor ASA (together with its affiliates, “Equinor”), representing 27 percent, 21 percent and 13 percent, respectively, of our consolidated operating revenues.
Added
Pursuant to the Agreement, and on the terms and subject to the conditions thereof, we will acquire all of the issued and outstanding common shares, par value $0.01 each, of Valaris (the “Valaris Shares”) in exchange for Transocean Ltd. shares, par value $0.10 each, at an exchange ratio of 15.235 Transocean Ltd. shares for each Valaris Share.
Removed
No other customers accounted for 10 percent or more of our consolidated operating revenues in the year ended December 31, 2024. Additionally, as of February 12, 2025, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Petrobras and Shell, representing 24 percent and 17 percent, respectively, of our total contract backlog.
Added
Gulf ​ Deepwater Atlas ​ ​ ​ 2022 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (d) ​ U.S.
Removed
Risk Factors—Risks related to our business—We rely heavily on a relatively small number of customers and the loss of a significant customer or a dispute that leads to the loss of a customer could have an adverse effect on our business. ” Human Capital Resources Workforce —As of December 31, 2024, we had a global workforce of approximately 5,800 individuals, including approximately 330 contractors, representing 62 nationalities.

… 16 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+7 added−9 removed76 unchanged
Biggest changeSuch impacts may include, among others: ◾ causing a temporary shut-down of operations in case of an outbreak on one or more of our rigs; ◾ disrupting or restricting the ability of our suppliers, manufacturers and service providers to supply parts, equipment labor or services in the jurisdictions in which we operate or conduct shipyard activities including newbuild construction; ◾ causing us to incur increased costs, inefficiencies, and labor shortages as a result of precautionary measures taken to counteract a potential or actual outbreak, including testing and quarantining of offshore personnel; and ◾ being negatively affected by various actions by governmental authorities around the world designed to prevent or reduce the spread of an outbreak, such as imposing mandatory closures of all business facilities deemed to be non-essential, seeking voluntary closures of such facilities and imposing restrictions on, or issuing advisories with respect to, travel, business operations and public gatherings or interactions.
Biggest changeSuch impacts may include, among others, (a) causing a temporary interruption to operations in case of an outbreak on one or more of our rigs, (b) disrupting or restricting the ability of our suppliers, manufacturers and service providers to supply parts, equipment, labor or services for our operations, (c) causing us to incur increased costs, inefficiencies and labor shortages as a result of precautionary measures taken, either voluntarily or in response to actions by governmental authorities, to prevent or reduce the spread of an outbreak, such as imposing mandatory or seeking voluntary closures of business facilities and imposing restrictions on travel, business operations and public gatherings or interactions.
Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues. Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues and are affected by many factors, including inflation. Costs for operating a rig are generally fixed or only semi-variable regardless of the dayrate being earned.
Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues and are affected by many factors, including inflation. Costs for operating a rig are generally fixed or only semi-variable regardless of the dayrate being earned.
These transactions involve various risks, including among others, (i) difficulties related to integrating, separating or managing applicable parts of an acquired, or disposed of, business, assets or joint venture and unanticipated changes in customer and other third-party relationships subsequent to closing, (ii) diversion of management's attention from day-to-day operations, (iii) failure to realize anticipated benefits, such as cost savings, revenue enhancements or strengthening, streamlining or broadening our business, (iv) potentially substantial transaction costs associated with acquisitions, joint ventures or investments if we or a transaction counterparty seeks to exit or terminate an interest in the joint venture or investment, (v) applicable antitrust laws and other regulations that may limit our ability to acquire targets or require us to divest an acquired business or assets, (vi) potential accounting impairment or actual diminution or loss of value of our investment if future market, business or other conditions ultimately differ from our assumptions at the time of such transaction is consummated and (vii) potential accounting impairment upon the decision to reclassify assets as held for sale.
These transactions involve various risks, including among others, (i) difficulties related to integrating, separating or managing applicable parts of an acquired, or disposed of, business, assets or joint venture and unanticipated changes in customer and other third-party relationships subsequent to closing, (ii) diversion of management's attention from day-to-day operations, (iii) failure to realize anticipated benefits, such as cost savings, revenue enhancements or strengthening, streamlining or broadening our business, (iv) potentially substantial transaction costs associated with acquisitions, joint ventures or investments if we or a transaction counterparty seeks to exit or terminate an interest in the joint venture or investment, (v) applicable antitrust laws and other regulations that may limit our ability to acquire targets or require us to divest an acquired business or asset, (vi) potential accounting impairment or actual diminution or loss of value of our investment if future market, business or other conditions ultimately differ from our assumptions at the time of such transaction is consummated and (vii) potential accounting impairment upon the decision to reclassify assets as held for sale.
These shipyard projects are subject to the risks of delays or cost overruns inherent in any such complex projects resulting from numerous factors, including the following: ◾ shipyard availability, failures and difficulties; ◾ shortages of equipment, materials or skilled labor; ◾ failed or delayed deliveries of significant materials or equipment for various reasons, including due to supplier shortages, constraints, disruption or quality issues; ◾ design and engineering problems, including those relating to the commissioning of newly designed equipment; ◾ latent damages or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions; ◾ unanticipated actual or purported change orders; ◾ disputes with shipyards and suppliers; ◾ availability of suppliers to recertify equipment for enhanced regulations; ◾ strikes, labor disputes and work stoppages; ◾ customer acceptance delays or delays in providing customer-supplied engineering, approvals or equipment; ◾ adverse weather conditions, including damage caused by such conditions; ◾ terrorist acts, war, piracy and civil unrest; - 13 - Table of Contents ◾ complications arising from pandemics, epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases, and associated government orders in the country where the rigs are being constructed or serviced and elsewhere; ◾ unanticipated cost increases; and ◾ difficulties in obtaining necessary permits or approvals or in completing necessary importation procedures.
These shipyard projects are subject to the risks of delays or cost overruns inherent in any such complex projects resulting from numerous factors, including the following: ◾ shipyard availability, failures and difficulties; - 12 - Table of Contents ◾ shortages of equipment and materials and failed or delayed deliveries of significant materials or equipment for various reasons, including due to supplier shortages, constraints, disruption or quality issues; ◾ design and engineering problems, including those relating to the commissioning of newly designed equipment; ◾ latent damages or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions; ◾ unanticipated actual or purported change orders; ◾ disputes with shipyards and suppliers; ◾ availability of suppliers to recertify equipment for enhanced regulations; ◾ skilled labor shortages, strikes, labor disputes and work stoppages; ◾ customer acceptance delays or delays in providing customer-supplied engineering, approvals or equipment; ◾ adverse weather conditions, including damage caused by such conditions; ◾ terrorist acts, war, piracy and civil unrest; ◾ complications arising from pandemics, epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases, and associated government orders in the country where the rigs are being constructed or serviced and elsewhere; ◾ unanticipated cost increases; and ◾ difficulties in obtaining necessary permits or approvals or in completing necessary importation procedures.
Our efforts to research, establish, accomplish, and accurately report on these goals, commitment targets, and other objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, commitment target, or objective, is subject to numerous factors and conditions, many of which are outside of our control.
Our efforts to research, establish, accomplish, and accurately report on these goals, targets, and other objectives expose us to numerous operational, reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or other objective, is subject to numerous factors and conditions, many of which are outside of our control.
The contractual operating dayrate may be higher than the actual dayrate we ultimately receive or an alternative contractual dayrate, such as waiting on weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
The contractual operating dayrate may be higher than the actual dayrate we ultimately receive or an alternative contractual dayrate, such as waiting-on-weather rate, waiting-on-customer rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
Our business may face increased scrutiny from investors, business partners and others related to our sustainability activities, including the goals, commitment targets, and other objectives that we announce, and our methodologies and timelines for pursuing them.
Our business may face increased scrutiny from investors, business partners and others related to our sustainability activities, including the goals, targets, and other objectives that we announce, and our methodologies and timelines for pursuing them.
Oil and gas prices are extremely volatile and are affected by numerous factors, including the following: ◾ worldwide demand for oil and gas, including economic activity in the U.S., other large energy-consuming markets and in developing and emerging markets; ◾ the ability of the Organization of the Petroleum Exporting Countries (“OPEC”) to set and maintain, or to be influenced to set and maintain, production levels, productive spare capacity and pricing among its members, including the ability of OPEC to successfully coordinate and enforce production quotas; ◾ the level of production in non-OPEC countries; ◾ inventory levels, and the cost and availability of storage and transportation of oil, gas and their related products; ◾ the policies, laws and regulations of various governments regarding exploration and development of their oil and gas reserves and environmental matters, including those addressing alternative energy sources and the risks of global climate change; ◾ international sanctions on oil-producing countries, or the lifting of such sanctions; ◾ advances in exploration, development and production technology; ◾ the development, exploitation and market acceptance of alternative energy sources; ◾ the further development of shale technology to exploit oil and gas reserves; ◾ the discovery rate of new oil and gas reserves and the rate of decline of existing oil and gas reserves; ◾ accidents, adverse weather conditions, natural disasters and other similar incidents relating to the oil and gas industry; and ◾ the worldwide security and political environment, including uncertainty or instability resulting from an escalation or outbreak of armed hostilities, civil unrest, acts of terrorism, public health threats or other crises.
Oil and gas prices are extremely volatile and are affected by many factors, including the following: ◾ worldwide demand for oil and gas, including economic activity in the U.S., other large energy-consuming markets and in developing and emerging markets; ◾ the ability of the Organization of the Petroleum Exporting Countries (“OPEC”) to set and maintain, or to be influenced to set and maintain, production levels, productive spare capacity and pricing among its members, including the ability of OPEC to successfully coordinate and enforce production quotas; ◾ the level of production in non-OPEC countries; ◾ inventory levels, and the cost and availability of storage and transportation of oil, gas and their related products; - 8 - Table of Contents ◾ the policies, laws and regulations of various governments regarding exploration and development of their oil and gas reserves and environmental matters, including those addressing alternative energy sources and the risks of global climate change; ◾ international sanctions on oil-producing countries, or the lifting of such sanctions; ◾ advances in exploration, development and production technology; ◾ the development, exploitation and market acceptance of alternative energy sources; ◾ the further development of shale technology to exploit oil and gas reserves; ◾ the discovery rate of new oil and gas reserves and the rate of decline of existing oil and gas reserves; ◾ accidents, adverse weather conditions, natural disasters and other similar incidents relating to the oil and gas industry; and ◾ the worldwide security and political environment, including uncertainty or instability resulting from an escalation or outbreak of armed hostilities, civil unrest, acts of terrorism, public health threats or other crises.
This substantial level of debt and other obligations could have significant adverse consequences on our business and future prospects, including the following: ◾ we may be unable to obtain financing in the future to refinance our existing debt or for working capital, capital expenditures, acquisitions, debt service requirements, distributions, share repurchases, or other purposes; ◾ we may be unable to use operating cash flows in other areas of our business because we must dedicate a substantial portion of these funds to service the debt; ◾ we could become more vulnerable to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness, some of which bears interest at variable rates; ◾ we may be unable to meet financial ratios in the agreements governing certain of our debt facilities and finance lease or satisfy certain other covenants and conditions included in our debt agreements, which could result in our inability to meet requirements for borrowings under the Secured Credit Facility or a default under such agreements, impose restrictions with respect to our access to certain of our capital, and trigger cross default provisions in certain of our debt instruments; ◾ if we default under the terms of our secured financing arrangements, the secured debtholders may, among other things, foreclose on the collateral securing the debt, including the applicable drilling units; ◾ we may be unable to obtain new investment or financing based upon evolving ESG-influenced trends among many financial intermediaries, investors and other capital markets participants that have focused on reducing, or ceasing, lending to, or investing in, companies that operate in industries with higher perceived environmental exposure; and ◾ we may be less able to take advantage of significant business opportunities and to react to changes in market or industry conditions than our less levered competitors.
This substantial level of debt and other obligations could have significant adverse consequences on our business and future prospects, including the following: ◾ we may be unable to obtain financing in the future to refinance our existing debt or for working capital, capital expenditures, acquisitions, debt service requirements, distributions, share repurchases, or other purposes; - 14 - Table of Contents ◾ we may be unable to use operating cash flows in other areas of our business because we must dedicate a substantial portion of these funds to service the debt; ◾ we could become more vulnerable to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness, some of which bears interest at variable rates; ◾ we may be unable to meet financial ratios in the agreements governing certain of our debt facilities and finance lease or satisfy certain other covenants and conditions included in our debt agreements, which could result in our inability to meet requirements for borrowings under the Secured Credit Facility or a default under such agreements, impose restrictions with respect to our access to certain of our capital, and trigger cross default provisions in certain of our debt instruments; ◾ if we default under the terms of our secured financing arrangements, the secured debtholders may, among other things, foreclose on the collateral securing the debt, including the applicable drilling units; ◾ we may be unable to obtain new investment or financing based upon evolving trends among certain financial intermediaries, investors and other capital markets participants that have focused on reducing, or ceasing, lending to, or investing in, companies that operate in industries with higher perceived environmental exposure; and ◾ we may be less able to take advantage of significant business opportunities and to react to changes in market or industry conditions than our less levered competitors.
Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
Similarly, our failure or perceived failure to pursue or fulfill sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation and could expose us to government enforcement actions and private litigation.
Gulf of Mexico, the South China Sea and the Northwest Coast of Australia are areas subject to typhoons, hurricanes or other extreme weather conditions on a relatively frequent basis, and our drilling rigs in these regions may be exposed to damage or total loss by these storms, some of which may not be covered by insurance.
Gulf of America, the South China Sea and the Northwest Coast of Australia are areas subject to typhoons, hurricanes or other extreme weather conditions on a relatively frequent basis, and our drilling rigs in these regions may be exposed to damage or total loss by these storms, some of which may not be covered by insurance.
Damage to the environment or natural resources could also result from our operations, particularly through spillage of hydrocarbons, fuel, lubricants or other chemicals and substances used in drilling operations, or extensive uncontrolled fires. We may also be subject to property damage, environmental indemnity and other claims by energy companies or other third parties.
Damage to the environment or natural resources could also result from our operations, particularly through spillage of hydrocarbons, fuel, lubricants or other chemicals and substances used in drilling operations, or extensive uncontrolled fires. We may also be subject to property damage, environmental indemnity, well contamination and other claims by energy companies or other third parties.
Excess amounts of local currency may also be exposed to the risk of currency exchange losses. We may not be able to renew or obtain new drilling contracts for rigs whose contracts are expiring or obtain drilling contracts for our stacked and idle rigs. The offshore drilling markets in which we compete experience fluctuations in the demand for drilling services.
Excess amounts of local currency may also be exposed to the risk of currency exchange losses. We may not be able to renew or obtain new drilling contracts for rigs whose contracts are expiring or obtain drilling contracts for our stacked and idle rigs. The offshore drilling market in which we compete experience fluctuations in the demand for drilling services.
As a result, we may experience significant adverse consequences in our ability to meet our commitments to customers, including due to increased operating costs and increased risk of rig downtime or contract termination, which may result in substantial adverse consequences for our business and results of operations.
As a result, we may experience impediments to our ability to meet our commitments to customers, including due to increased operating costs and increased risk of rig downtime or contract termination, which may result in substantial adverse consequences for our business and results of operations.
Several factors could cause rig downtime or a suspension of operations, including: equipment breakdowns and other unforeseen engineering problems, labor strikes and other work stoppages, shortages of material and skilled labor, surveys by government and maritime authorities, periodic classification surveys, severe weather or harsh operating conditions, and force majeure events.
Several factors could cause rig downtime or a - 9 - Table of Contents suspension of operations, including: equipment breakdowns and other unforeseen engineering problems, labor strikes and other work stoppages, shortages of material and skilled labor, surveys by government and maritime authorities, periodic classification surveys, severe weather or harsh operating conditions, and force majeure events.
Our insurance coverage will not in all situations provide sufficient funds to protect us from all liabilities that could result from our drilling operations. Our coverage includes annual aggregate policy limits. As a result, we generally retain the risk for any losses in excess of these limits.
Our insurance coverage will not in all situations provide sufficient funds to protect us from all liabilities that could result from our drilling operations. Our coverage includes annual aggregate policy limits, and we generally retain the risk for any losses in excess of these limits.
Public health threats, including pandemics and epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases, have impacted and may continue to impact our operations directly or indirectly, including by disrupting the operations of our business partners, suppliers and customers in ways that adversely impact our operations.
Public health threats, including pandemics and epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases, have impacted and may in the future impact our operations directly or indirectly, including by disrupting the operations of our business partners, suppliers and customers in ways that adversely impact our operations.
Changing sentiment towards climate change, fossil fuels and other esg matters could adversely affect our business, cost of capital and the price of our stock and other securities.
Changing sentiment towards climate change, fossil fuels and related matters could adversely affect our business, cost of capital and the price of our stock and other securities.
Changes in governmental regulations, including environmental requirements, and changes in safety or other equipment standards, as well as compliance with standards imposed by maritime self-regulatory organizations, may cause our expenditures to increase or require us to make additional unforeseen expenditures.
Changes in governmental - 10 - Table of Contents regulations, including environmental requirements, and changes in safety or other equipment standards, as well as compliance with standards imposed by maritime self-regulatory organizations, may cause our expenditures to increase or require us to make additional unforeseen expenditures.
As of December 31, 2024, approximately 43 percent of our total workforce, working primarily in Brazil and Norway, are represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiation.
As of December 31, 2025, approximately 45 percent of our total workforce, working primarily in Brazil and Norway, are represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiation.
As our rigs are mobilized from one geographic location to another, the - 10 - Table of Contents labor and other operating and maintenance costs can vary significantly. In general, labor costs increase primarily due to higher salary levels and inflation.
As our rigs are mobilized from one geographic location to another, the labor and other operating and maintenance costs can vary significantly. In general, labor costs increase primarily due to higher salary levels and inflation.
If we or our securities are unable to meet the sustainability ESG standards or investment criteria set by any such funds invested in our securities, we may lose such investors or they may allocate a portion of their capital away from us.
If we or our securities are unable to meet the sustainability and corporate responsibility or other investment criteria set by any such funds invested in our securities, we may lose such investors or they may allocate a portion of their capital away from us.
Our ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions. As of February 12, 2025, we have 10 stacked rigs.
Our ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions. As of February 19, 2026, we have three stacked rigs.
Our insurance policies and drilling contracts contain rights to indemnity that may not adequately cover our losses, and we do not have insurance coverage or rights to indemnity for all risks.
Our insurance policies and drilling contracts contain rights to indemnity that may not adequately cover our losses, and we do not have insurance coverage or rights to indemnity for all risks. For example, pollution and environmental risks generally are not completely insurable.
During prior periods of high dayrates and rig utilization rates, we and other industry participants responded to increased customer demand by increasing the supply of rigs through ordering the construction of new units.
During periods of high dayrates and rig utilization rates, we and other industry participants have responded to actual or anticipated increases in customer demand by increasing the supply of rigs through ordering the construction of new units.
We have previously developed and set, goals, targets, and other objectives related to sustainability matters, including with respect to emissions reduction, and we may continue to develop and set such objectives from time to time. Statements related to these goals, commitment targets and objectives do not constitute a guarantee that they will be achieved.
We may periodically develop and set goals, targets, and other objectives related to sustainability matters, including with respect to emissions reduction. Statements related to these goals, targets and other objectives do not constitute a guarantee that they will be achieved.
Item 1A. Risk Factors Risks related to our business Our business depends on the level of activity in the offshore oil and gas industry, which is significantly affected by volatile oil and gas prices and other factors. Our business depends on oil and gas exploration, development and production in offshore areas where we are capable of operating.
Item 1A. Risk Factors Risks related to our business Our business depends on the level of activity in the offshore oil and gas industry, which is significantly affected by volatile oil and gas prices and other factors.
Risks related to our indebtedness We have a substantial amount of debt, including secured debt, and we may lose the ability to obtain future financing and suffer competitive disadvantages. At December 31, 2024, our total debt was $6.88 billion, of which $2.36 billion was secured.
Risks related to our indebtedness We have a substantial amount of debt, including secured debt, and we may lose the ability to obtain future financing and suffer competitive disadvantages. At December 31, 2025, our total debt was $5.66 billion, of which $1.68 billion was secured.
In addition, public health threats may result in significantly reduced global or regional economic activity, which could result in a sharp reduction in the demand for oil and an associated decline in oil prices, as occurred - 11 - Table of Contents during 2020.
Additionally, public health threats may result in significantly reduced global or regional economic activity, which could result in a sharp reduction in the demand for oil and an associated decline in oil prices.
Additionally, lower market dayrates and intense price competition may drive customers to seek to renegotiate existing contracts to reduce dayrates in exchange for longer contract terms.
Additionally, lower market dayrates and intense price competition may drive customers to seek to renegotiate existing contracts to reduce dayrates in exchange for longer contract terms. Lower dayrates and rig utilization rates could adversely affect our revenues and profitability.
The amount of contract preparation and reactivation costs vary based on the scope and length of the contract preparation or reactivation project, and the recognition of such costs varies depending on the duration of the firm contractual period and other contract terms. Certain of our drilling contracts are partially payable in local currency.
The amount of contract preparation and reactivation costs vary based on the scope and length of the contract preparation or reactivation project, and the recognition of such costs varies depending on the duration of the firm contractual period and other contract terms.
At February 12, 2025, our contract backlog was $8.33 billion. This amount represents the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, excluding revenues for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be significant to our contract drilling revenues.
This amount represents the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, including certain performance-based provisions for which achievement is probable, excluding provisions for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be significant to our contract drilling revenues.
Our long-term success will be impacted by our ability to effectively address the transition to renewable and other alternative energy sources, and our ability to respond to other climate-related business trends that could adversely impact the long-term demand for oil and natural gas and, ultimately, the demand for our services and products from our services.
Our long-term success will be impacted in part by the ability of global energy markets to effectively address the transition to renewable and other alternative energy sources, since increased transition to such alternative sources could adversely impact the long-term demand for oil and natural gas and, ultimately, the demand for our services and products from our services.
As a result, our cost of capital may increase, the market price of our shares or of our publicly traded debt securities may be negatively impacted and our reputation may also be negatively affected.
As a result, our cost of capital may increase, the market price of our shares or of our publicly traded debt securities may be negatively impacted and our reputation may also be negatively affected. Public health threats could have significant adverse consequences for our business and operations.
We generally do not carry insurance for loss of revenue, and certain other claims may also not be reimbursed by insurance carriers. Any such lack of reimbursement may cause us to incur substantial costs. In addition, we could decide to retain more risk in the future, resulting in higher risk of losses, which could be material.
We generally do not carry insurance for loss of revenue, and certain other claims may also not be reimbursed by insurance carriers. Any such lack of reimbursement may cause us to incur substantial costs.
Demand for our services depends on these activities and related expenditure levels that are directly affected by trends in the price of oil and, to a lesser extent, natural gas.
Our business, and demand for our services, depends on oil and gas exploration, development and production in offshore areas where we are capable of operating. Our customers’ expenditure levels for these activities are directly affected by trends in the price of oil and, to a lesser extent, natural gas.
Our inability to realize the full amount of our contract backlog may have an adverse effect on our financial position, results of operations or cash flows.
Our inability to realize the full amount of our contract backlog may have an adverse effect on our financial position, results of operations or cash flows. Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues.
Failure to effectively and timely address the transition to renewable or other alternative energy sources, or to respond to other climate related business trends, could adversely affect our business, results of operations and cash flows.
Increased transition to renewable or other alternative energy sources could adversely affect our business, results of operations and cash flows.
We engage in offshore drilling services for most of the leading integrated energy companies or their affiliates, as well as for many government-owned or government-controlled energy companies and other independent energy companies.
We engage in offshore drilling services for most of the leading integrated energy companies or their affiliates, as well as for many government-owned or government-controlled energy companies and other independent energy companies. For the year ended December 31, 2025, our most significant customers were Petróleo Brasileiro S.A.
We generally have no hull and machinery insurance coverage for damages caused by named storms in the U.S. Gulf of Mexico. We maintain per occurrence deductibles that generally range up to $10 million for various third-party liabilities, and we self-insure up to $75 million of the $750 million excess liability coverage through our wholly owned captive insurance company.
We maintain per occurrence deductibles that generally range up to - 11 - Table of Contents $10 million for various third-party liabilities, and we self-insure up to $75 million of the $750 million excess liability coverage through our wholly owned captive insurance company. We also retain the risk for any liability that exceeds our excess liability coverage.
During periods of depressed market conditions, we are subject to increased counterparty risk, as our customers may seek to repudiate their contracts, including through claims of non-performance in order to reduce their capital expenditures.
During periods of depressed market conditions, we are subject to increased counterparty risk, as our customers may seek to repudiate their contracts, including through claims of non-performance to reduce their capital expenditures. Our customers may no longer need a drilling rig that is currently under contract or may be able to obtain a comparable drilling rig at a lower dayrate.
As of February 12, 2025, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Petrobras and Shell, representing 24 percent and 17 percent, respectively, of our total contract backlog.
As of February 19, 2026, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Petrobras, Equinor, BP p.l.c., Shell, Chevron Corporation and Woodside Energy Group Ltd., representing 20 percent, 16 percent, 16 percent, 12 percent, 11 percent and 10 percent, respectively, of our total contract backlog.
Lower dayrates and rig utilization rates could adversely affect our revenues and profitability. - 9 - Table of Contents As of February 12, 2025, we have 10 uncontracted rigs, of which seven have been out of service for greater than five years, and these rigs may remain out of service for extended periods of time.
As of February 19, 2026, we have three uncontracted rigs which have been out of service for greater than five years, and these rigs may remain out of service for extended periods of time.
The amounts, if any, of local currency received under these drilling contracts may exceed our local currency needs to pay local operating and maintenance costs, leading to an accumulation of excess local currency balances, which, in certain instances, may be subject to either restrictions or other difficulties in converting to U.S. dollars, our functional currency, or to other currencies of the locations where we operate.
Certain of our drilling contracts are partially receivable in local currency, and certain costs for labor, goods and services are payable by us in local currency. The amounts, if any, of local currency received under these drilling contracts may exceed our local currency needs to pay local operating and maintenance costs, leading to an accumulation of excess local currency balances.
Our customers may no longer need a drilling rig that is currently under contract or may be able to obtain a comparable drilling rig at a lower dayrate. We have experienced, and are at continued risk of experiencing, early contract terminations during periods of a weak commodity price environment.
We have experienced, and are at continued risk of experiencing, early contract terminations during periods of a weak commodity price environment.
Moreover, we may not be able to maintain adequate insurance in the future at rates that we consider reasonable or be able to obtain insurance against certain risks. - 12 - Table of Contents Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts.
Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts. Certain of our drilling contracts with customers may be cancelable at the option of the customer upon payment of an early termination payment.
Certain of our drilling contracts with customers may be cancelable at the option of the customer upon payment of an early termination payment. Such payments may not, however, fully compensate us for the loss of the contract.
Such payments may not, however, fully compensate us for the loss of the contract.
Certain regulators and members of the investment community have heightened awareness of environmental, social and governance (“ESG”) practices and disclosures, including those related to diversity and inclusion and, particularly in the energy industry, those related to greenhouse gas emissions and climate change. We may be subject in the future to additional reporting requirements that develop in response to such awareness.
If such efforts are successful, the market price of our shares and our ability to access capital markets may be negatively impacted. - 13 - Table of Contents Certain regulators and members of the investment community have heightened awareness of sustainability and corporate responsibility and disclosures, including those related to an inclusive workplace culture and, particularly in the energy industry, those related to greenhouse gas emissions and climate change.
If we do not or are perceived to not effectively implement a strategy that incorporates alternative energy sources, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted. - 14 - Table of Contents Our aspirations, goals, commitment targets and initiatives related to sustainability, including emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
Such shifts, if any, in the global energy markets could adversely affect our business, results of operations and cash flows. Our aspirations, goals, targets and initiatives related to sustainability, including emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
Additionally, ESG-focused investment funds seeking ESG-oriented investment products screen companies such as ours for ESG sustainability performance before investing.
We may be subject in the future to additional reporting requirements that develop in response to such awareness. Additionally, certain investment funds seeking investment products focused on green economy, sustainability and corporate responsibility may screen companies such as ours before investing.
Removed
If such efforts are successful, the market price of our shares and our ability to access capital markets may be negatively impacted.
Added
At February 19, 2026, our contract backlog was $6.06 billion.
Removed
Public health threats have had, and may continue to have, significant adverse consequences for general economic, financial and business conditions, as well as for our business and operations.
Added
We may receive a lower contractual operating dayrate during periods when drilling operations are necessary to extend beyond an agreed schedule, even if we are not the cause of the delay in completing drilling operations.
Removed
The magnitude and duration of potential social, economic and labor instability resulting from such public health threats, including the speed at which national economies can recover, or whether any recovery will ultimately experience a reversal or other setbacks, are uncertain and cannot be estimated as such effects depend on events that would be largely out of our control.
Added
Any local currency surplus may be subject to restrictions or other difficulties in converting to U.S. dollars, our functional currency, or to other currencies of the locations where we operate, including disruptions that may occur in the currency exchange markets, whether as a result of economic policies of governments, central banks or otherwise.
Removed
For the year ended December 31, 2024, our most significant customers were Shell, Petrobras and Equinor, representing 27 percent, 21 percent and 13 percent, respectively, of our consolidated operating revenues.
Added
(together with its affiliates, “Petrobras”), Shell plc (together with its affiliates, “Shell”) and Equinor ASA (together with its affiliates, “Equinor”), representing 22 percent, 22 percent and 12 percent, respectively, of our consolidated operating revenues.
Removed
We also retain the risk for any liability that exceeds our excess liability coverage. However, pollution and environmental risks generally are not completely insurable.
Added
We generally have no hull and machinery insurance coverage for damages caused by named storms in the U.S. Gulf of America.
Removed
Addressing increased focus on the development of additional alternative energy sources and other climate-related business trends has required and will further require adapting certain parts of our operations to changing government requirements and customer preferences.
Added
Additionally, we may not be able to maintain adequate insurance in the future at rates that we consider reasonable or be able to obtain insurance against certain risks, and we could decide to retain more risk in the future, resulting in higher risk of losses, which could be material.
Removed
We continue to engage with existing and potential customers and suppliers to develop or implement solutions designed to reduce or decarbonize oil and gas operations, or to advance renewable and other alternative energy sources.
Added
An increase in the demand for alternative energy sources, including as a result of new and more efficient technologies or increased government subsidies and intervention, could further increase the market share of alternative energy sources as compared to oil and gas.
Removed
Nonetheless, as it is not possible at this time to predict the timing, scope and effect of the development of and transition to renewable or other alternative energy sources, any such developments, such as the declining cost of renewable energy generation technologies, could adversely impact the long-term global demand for oil and natural gas and, ultimately, the demand for our services and products from our services.
Removed
If the transition to alternative energy sources or other climate-related trends change faster than anticipated or develop in a manner that we do not anticipate, our business, results of operations and cash flows could be adversely affected.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed12 unchanged
Biggest changeRisk Factors—Risks related to laws, regulation, and governmental compliance—We are subject to cybersecurity risks and threats as well as increasing regulation of data privacy and security. ” Governance We involve multiple levels of oversight as a part of our approach to cybersecurity risk management.
Biggest changeRisk Factors—Risks related to laws, regulation, and governmental compliance—We are subject to cybersecurity risks and threats as well as risks related to the use of artificial intelligence and the regulation of data privacy and security. ” Governance We involve multiple levels of oversight as a part of our approach to cybersecurity risk management.
Additionally, we maintain an experienced information technology team at the employee level that supports our Vice President, Information Technology in implementing our cybersecurity program and internal reporting, security and mitigation functions. - 22 - Table of Contents Item 2. Properties The description of our property included under “ Item 1. Business —Drilling Fleet” is incorporated by reference herein.
Additionally, we maintain an experienced information technology team at the employee level that supports our Vice President, Information Technology in implementing our cybersecurity program and internal reporting, security and mitigation functions. Item 2. Properties The description of our property included under “ Item 1. Business —Drilling Fleet” is incorporated by reference herein.
Our enterprise risk register inventories significant risks to our company, including significant cybersecurity risks, and we maintain a separate functional risk register, specifically focusing on potential cybersecurity risks. Within these risk registers, we record each identified risk, describe its likelihood of occurrence and assess its potential impact, including the materiality thereof.
Our enterprise risk register inventories significant risks to our company, including significant cybersecurity risks, and we maintain a separate functional risk register, specifically focusing on potential cybersecurity risks. Within these risk registers, we record each identified - 22 - Table of Contents risk, describe its likelihood of occurrence and assess its potential impact, including the materiality thereof.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed14 unchanged
Biggest changeDepartment of Justice (the “DOJ”) related to alleged violations by our subsidiary of its Clean Water Act (“CWA”) National Pollutant Discharge Elimination System permit for the western Gulf of Mexico (“Permit”). The alleged violations, involving seven of our drillships, were identified by the U.S.
Biggest changeDepartment of Justice (the “DOJ”) related to alleged violations by our subsidiary of its Clean Water Act (“CWA”) National - 23 - Table of Contents Pollutant Discharge Elimination System permit for the western U.S. Gulf of America (“Permit”). The alleged violations, involving seven of our drillships, were identified by the U.S.
As of December 31, 2024, we were involved in a number of other lawsuits, regulatory matters, disputes and claims, asserted and unasserted, all of which constitute ordinary routine litigation incidental to our business and for which we do not expect the liability, if any, to have a material adverse effect on our financial position, results of operations or cash flows.
As of December 31, 2025, we were involved in a number of other lawsuits, regulatory matters, disputes and claims, asserted and unasserted, all of which constitute ordinary routine litigation incidental to our business and for which we do not expect the liability, if any, to have a material adverse effect on our financial position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+162 added−1 removed28 unchanged
Biggest changeMarket for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market for Shares of Our Common Equity Our shares are listed on the New York Stock Exchange under the ticker symbol “RIG.” On February 11, 2025, we had 878,886,948 shares outstanding and 4,454 holders of record of our shares. - 23 - Table of Contents Shareholder Matters Swiss tax consequences to our shareholders Overview —The tax consequences discussed below are not a complete analysis or listing of all the possible tax consequences that may be relevant to our shareholders.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market for Shares of Our Common Equity Our shares are listed on the New York Stock Exchange under the ticker symbol “RIG.” On February 17, 2026, we had 1,102,848,748 shares outstanding and 4,246 holders of record of our shares.
Our board of directors could, to the extent freely distributable reserves are available, authorize the repurchase of additional shares for purposes other than cancellation, such as to retain treasury shares for use in satisfying our obligations in connection with incentive plans or other rights to acquire our shares.
Our board of directors could, to the extent freely distributable reserves are available, authorize the repurchase of additional shares - 25 - Table of Contents for purposes other than cancellation, such as to retain treasury shares for use in satisfying our obligations in connection with incentive plans or other rights to acquire our shares.
The repurchase of shares for purposes other than for cancellation, such as to retain as treasury shares for use in connection with stock incentive plans, convertible debt or other instruments within certain periods, are not generally subject to Swiss withholding tax. In addition, in December 2022, the U.S.
The repurchase of shares for purposes other than for cancellation, such as to retain as treasury shares for use in connection with stock incentive plans, convertible debt or other instruments within certain periods, are not generally subject to Swiss withholding tax. In addition, in November 2025, the U.S.
At December 31, 2024, the authorization remaining under the share repurchase program was for the repurchase of our outstanding shares for an aggregate purchase price of up to CHF 3.24 billion, equivalent to $3.57 billion. We intend to fund any repurchases using available cash balances and cash from operating activities.
At December 31, 2025, the authorization remaining under the share repurchase program was for the repurchase of our outstanding shares for an aggregate purchase price of up to CHF 3.24 billion, equivalent to $4.09 billion. We intend to fund any repurchases using available cash balances and cash from operating activities.
Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Approximate dollar value ​ ​ ​ Total number ​ Average ​ purchased as part ​ of shares that may yet ​ ​ ​ of shares ​ price paid ​ of publicly announced ​ be purchased under the plans ​ Period purchased per share plans or programs or programs (in millions ) (a) October 2024 ​ — ​ $ — ​ — $ 3,574 ​ November 2024 ​ — ​ ​ — ​ — ​ ​ 3,574 ​ December 2024 ​ — ​ ​ — ​ — ​ ​ 3,574 ​ Total ​ — ​ $ — ​ — $ 3,574 ​ ​ ​
Issuer Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total number of shares ​ Approximate dollar value ​ ​ ​ Total number ​ Average ​ purchased as part ​ of shares that may yet ​ ​ ​ of shares ​ price paid ​ of publicly announced ​ be purchased under the plans ​ Period ​ ​ ​ purchased ​ ​ ​ per share ​ ​ ​ plans or programs ​ ​ ​ or programs (in millions ) (a) October 2025 ​ — ​ $ — ​ — $ 4,091 ​ November 2025 ​ — ​ ​ — ​ — ​ ​ 4,091 ​ December 2025 ​ — ​ ​ — ​ — ​ ​ 4,091 ​ Total ​ — ​ $ — ​ — $ 4,091 ​ ​ ​ Item 6.
On December 31, 2024, the aggregate amount of par value of our outstanding shares was $87.6 million, and the aggregate amount of qualifying additional paid-in capital of our outstanding shares was $17.4 billion. Consequently, we expect that a substantial amount of any potential future distributions may be exempt from Swiss withholding tax.
On December 31, 2025, the aggregate amount of par value of our outstanding shares was $110.2 million, and the aggregate amount of qualifying additional paid-in capital of our outstanding shares was $18.1 billion. Consequently, we expect that a substantial amount of any potential future distributions may be exempt from Swiss withholding tax.
If the transaction does not involve cash consideration, the transfer stamp duty is computed on the basis of the market value of the consideration. - 24 - Table of Contents Share repurchases Overview —Shares repurchased for the purpose of capital reduction are treated as a partial liquidation subject to a 35 percent Swiss withholding tax based on the difference between the repurchase price and the related amount of par value and the related amount of qualifying additional paid-in capital, if any.
Share repurchases Overview —Shares repurchased for the purpose of capital reduction are treated as a partial liquidation subject to a 35 percent Swiss withholding tax based on the difference between the repurchase price and the related amount of par value and the related amount of qualifying additional paid-in capital, if any.
Based on the number of shares held as treasury shares as of February 11, 2025, 3.42 percent of our issued shares could be repurchased for purposes of retention as additional treasury shares.
Based on the number of shares held as treasury shares as of February 17, 2026, 1.6 percent of our issued shares could be repurchased for purposes of retention as additional treasury shares.
As of February 11, 2025, together, Transocean Ltd. and Transocean International Limited, a Bermuda exempted company and our wholly owned subsidiary (formerly known as Transocean Inc., a Cayman Islands exempted company), held as treasury shares 6.58 percent of our issued shares.
As of February 17, 2026, together, Transocean Ltd. and Transocean International Limited, a Bermuda exempted company and our wholly owned subsidiary, held as treasury shares 8.4 percent of our issued shares.
Department of the Treasury released proposed regulations under the Inflation Reduction Act of 2022, whereby an excise tax of one percent would be imposed on stock repurchases in the event one of our U.S. subsidiaries funds the stock repurchase. Under Swiss corporate law, the right of a company and its subsidiaries to repurchase and hold its own shares is limited.
Department of the Treasury adopted final regulations under the Inflation Reduction Act of 2022, whereby an excise tax of one percent would be imposed on stock repurchases in the event one of our U.S. subsidiaries funds the stock repurchase.
We will be required to withhold at such rate and remit on a net basis any payments made to a holder of our shares and pay such withheld amounts to the Swiss federal tax authorities.
We will be required to withhold at such rate and remit on a net basis any payments made to a holder of our shares and pay such withheld amounts to the Swiss federal tax authorities. - 24 - Table of Contents Exemption —Distributions to shareholders in the form of a par value reduction or out of qualifying additional paid-in capital for Swiss statutory purposes are exempt from Swiss withholding tax.
Removed
Exemption —Distributions to shareholders in the form of a par value reduction or out of qualifying additional paid-in capital for Swiss statutory purposes are exempt from Swiss withholding tax.
Added
Shareholder Matters Swiss tax consequences to our shareholders Overview —The tax consequences discussed below are not a complete analysis or listing of all the possible tax consequences that may be relevant to our shareholders.
Added
If the transaction does not involve cash consideration, the transfer stamp duty is computed on the basis of the market value of the consideration.
Added
Own share limitation —Under Swiss corporate law, the right of a company and its subsidiaries to repurchase and hold its own shares is limited.
Added
RESERVED ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction 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.
Added
As of February 17, 2026, we owned or had partial ownership interests in and operated 27 mobile offshore drilling units, consisting of 20 ultra-deepwater drillships and seven harsh environment semisubmersibles.
Added
We provide, as our primary business, contract drilling services in a single operating segment, which involves contracting our mobile offshore drilling rigs, related equipment and work crews to drill oil and gas wells. We specialize in technically demanding regions of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services.
Added
Our drilling fleet is one of the most versatile fleets in the world, consisting of drillships and semisubmersible floaters used in support of offshore drilling activities and offshore support services on a worldwide basis.
Added
We perform contract drilling services by deploying our high-specification fleet in a single, global market that is geographically dispersed in oil and gas exploration and development areas throughout the world.
Added
Although rigs can be moved from one region to another, the cost of moving rigs and the availability of rig-moving vessels may cause the supply and demand balance to fluctuate somewhat between regions. Still, significant variations between regions do not tend to persist long term because of rig mobility.
Added
The location of our rigs and the allocation of resources to operate, build or upgrade our rigs are determined by the activities and needs of our customers. The information contained in this section should be read in conjunction with the information contained in “ Part I. Item 1. Business ,” “ Part I. Item 1A.
Added
Risk Factors ” and the audited consolidated financial statements and the notes thereto included under “ Item 8. Financial Statements and Supplementary Data ” elsewhere in this annual report on Form 10-K. The following discussion of our results of operations and liquidity and capital resources includes comparisons for the years ended December 31, 2025 and 2024.
Added
For a discussion, including comparisons, of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023, see “Part II. Item 7.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024 , filed with the United States (“U.S.”) Securities and Exchange Commission on February 18, 2025. - 26 - Table of Contents Significant Events Agreement to acquire Valaris —On February 9, 2026, we and Valaris Limited, an exempted company limited by shares incorporated under the laws of Bermuda ("Valaris"), entered into a Business Combination Agreement (the "Agreement") providing for the combination of Transocean and Valaris (the "Business Combination").
Added
Pursuant to the Agreement, and on the terms and subject to the conditions thereof, we will acquire all of the issued and outstanding common shares, par value $0.01 each, of Valaris (the “Valaris Shares”) in exchange for Transocean Ltd. shares, par value $0.10 each, at an exchange ratio of 15.235 Transocean Ltd. shares for each Valaris Share.
Added
See Notes to Consolidated Financial Statements— Note 1—Business .
Added
Held-for-sale asset impairments —In the year ended December 31, 2025, we recognized an aggregate loss of $3.05 billion ($3.04 billion, or $3.16 per diluted share, net of tax), associated with the impairment of six ultra-deepwater floaters and one harsh environment floater, together with related assets, which we determined were impaired at the time we classified the assets as held for sale, and two ultra-deepwater floaters, together with related assets, which we previously classified as held for sale and determined the assets were further impaired.
Added
See “ —Operating Results .” Disposal of assets —In the year ended December 31, 2025, we completed the sale of the ultra-deepwater floaters Development Driller III, Discoverer Americas , Discoverer Clear Leader , Discoverer Inspiration , Discoverer Luanda and GSF Development Driller I , together with related assets, for aggregate net cash proceeds of $71 million.
Added
In January 2026, we completed the sale of the ultra-deepwater drillship Discoverer India , together with related assets, for aggregate net cash proceeds of $14 million, including $1 million received as a deposit in the year ended December 31, 2025.
Added
See “ —Liquidity and Capital Resources—Sources and uses of liquidity .” Share issuance —In September 2025, we issued 143.8 million Transocean Ltd. shares and received $421 million aggregate cash proceeds, net of issue costs.
Added
See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Debt issuance —In October 2025, we issued $500 million aggregate principal amount of 7.875% senior guaranteed notes due October 2032 (the “7.875% Senior Guaranteed Notes”) and received $492 million aggregate cash proceeds, net of issue costs.
Added
See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Debt redemption —In October 2025, we made an aggregate cash payment of $903 million, including related costs, to fully redeem $655 million aggregate principal amount of 8.00% senior notes due February 2027 and $248 million aggregate principal amount of 6.875% senior secured notes due February 2027.
Added
See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Debt exchanges —In the year ended December 31, 2025, we entered into separate, individually negotiated agreements (as amended, the “Exchange Agreements”) with certain holders of the 4.00% senior guaranteed exchangeable bonds due December 2025 (the “4.00% Exchangeable Bonds”).
Added
In the year ended December 31, 2025, the holders exchanged $196 million aggregate principal amount of 4.00% Exchangeable Bonds under the terms of the Exchange Agreements and received an aggregate 73.3 million Transocean Ltd. shares.
Added
See “ —Operating Results ” and “— Liquidity and Capital Resources—Sources and uses of liquidity .” Debt tender offers —In October 2025, we made an aggregate cash payment of $100 million, including related costs, to complete cash tender offers for $89 million aggregate principal amount of the validly tendered 7.35% senior notes due December 2041 (the “7.35% Senior Notes”) and $16 million aggregate principal amount of the validly tendered 7.00% notes due June 2028.
Added
See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Debt repurchases —In the year ended December 31, 2025, we made an aggregate cash payment of $36 million, including related costs, to complete open market repurchases of $36 million aggregate principal amount of the 7.00% notes due June 2028 and $1 million aggregate principal amount of the 7.35% Senior Notes.
Added
See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Outlook Drilling market —Our industry outlook remains positive, informed by numerous long-term forecasts indicating that hydrocarbons will continue to be a critical source of energy for the foreseeable future.
Added
In response to persistent geopolitical instability, supply chain constraints, and the limitations of renewable energy technologies, many governments and operators are reassessing their energy strategies. Rather than accelerating a shift away from fossil fuels, many policy makers are prioritizing energy security, resulting in a diverse and resilient supply portfolio.
Added
This shift underscores the continued need for accessible, reliable, cost-effective, and transportable energy sources, with offshore oil and gas increasingly viewed as a strategic asset. We believe these dynamics will support sustained, long-term demand for oil and natural gas.
Added
In the context of the natural depletion of existing fields, maintaining current oil and natural gas production levels will require both the development of existing resources and continued investment in exploration to identify new reserve opportunities.
Added
We believe that oil and natural gas producers will invest a greater portion of their budgets in offshore drilling, and particularly in deepwater, where resource potential, production longevity, and project economics are favorable, to achieve their production and reserve replacement targets.
Added
Although hydrocarbon prices remain sensitive to geopolitical events, macroeconomic policy decisions, and short-term supply fluctuations, we expect the overall economics of deepwater projects to remain attractive.
Added
Deepwater and harsh-environment fields continue - 27 - Table of Contents to generate competitive economic returns and are of generally lower carbon intensity compared to many other hydrocarbon sources, making them consistently compelling for capital deployment.
Added
While the long-term outlook for offshore drilling activity remains positive across all major deepwater sectors, we expect our customers to continue to be disciplined in capital spending. Consistent with our prior expectations, tendering activity and contract awards increased during the latter part of 2025.
Added
Additional contracting opportunities are anticipated through the first half of 2026 for projects commencing in 2027 and 2028. In the near term, continued pressure on utilization may result in the retirement of uncompetitive rigs.
Added
We expect demand for harsh-environment rigs to remain strong through the end of the decade, driven primarily by activity in Norway—the largest market for such units—and by emerging opportunities in new geographies suited for harsh-environment capable rigs.
Added
Several high-specification semisubmersible rigs that previously mobilized to other harsh-environment markets such as Namibia, the Black Sea, and Australia may ultimately return to the region depending on project requirements and market conditions. Fleet status —We refer to the availability of our rigs in terms of the uncommitted fleet rate.
Added
The uncommitted fleet rate is defined as the number of uncommitted days divided by the total number of rig calendar days in the measurement period, expressed as a percentage. An uncommitted day is defined as a calendar day during which a rig is idle or stacked, is not contracted to a customer and is not committed to a shipyard.
Added
The uncommitted fleet rates exclude the effect of priced options.
Added
As of February 19, 2026, our uncommitted fleet rates for each of the five years in the period ending December 31, 2030 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 Uncommitted fleet rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 36 % ​ 52 % ​ 82 % ​ 91 % ​ 98 % ​ Harsh environment floaters ​ 5 % ​ 45 % ​ 97 % ​ 100 % ​ 100 % ​ Performance and Other Key Indicators Contract backlog —We believe our contract backlog provides an indicator of our future revenue-earning opportunities.
Added
Contract backlog is defined as the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, including certain performance-based provisions for which achievement is probable, excluding provisions for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be material to our contract drilling revenues.
Added
The contract backlog represents the maximum contract drilling revenues that can be earned considering the reported operating dayrate in effect during the firm contract period.
Added
The contract backlog for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ February 19, ​ October 15, ​ February 12, ​ ​ ​ 2026 ​ ​ 2025 ​ ​ 2025 ​ ​ (in millions) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 4,477 $ 5,105 $ 6,363 ​ Harsh environment floaters ​ ​ 1,587 ​ ​ 1,623 ​ ​ 1,965 ​ Total contract backlog $ 6,064 $ 6,728 $ 8,328 ​ Our contract backlog includes only firm commitments which are represented by signed drilling contracts or, in some cases, by other definitive agreements awaiting contract execution.
Added
It does not include conditional agreements and options to extend firm commitments. The average contractual dayrate relative to our contract backlog is defined as the average maximum contractual operating dayrate to be earned per operating day and certain performance-based provisions expected to be achieved in the measurement period.
Added
An operating day is defined as a day for which a rig is contracted to earn a dayrate during the firm contract period after operations commence.
Added
At February 19, 2026, the contract backlog and average contractual dayrates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ending December 31, ​ ​ ​ ​ Total ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ (in millions, except average dayrates) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 4,477 $ 1,819 $ 1,576 ​ $ 627 ​ $ 359 ​ $ 96 ​ Harsh environment floaters ​ ​ 1,587 ​ ​ 922 ​ ​ 632 ​ ​ 33 ​ ​ — ​ ​ — ​ Total contract backlog $ 6,064 $ 2,741 $ 2,208 ​ $ 660 ​ $ 359 ​ $ 96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average contractual dayrates ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 470,000 $ 461,000 $ 450,000 ​ $ 488,000 ​ $ 557,000 ​ $ 635,000 ​ Harsh environment floaters ​ $ 449,000 $ 447,000 $ 454,000 ​ $ 424,000 ​ $ — ​ $ — ​ Total fleet average ​ $ 464,000 $ 456,000 $ 451,000 ​ $ 484,000 ​ $ 557,000 ​ $ 635,000 ​ The actual amount of revenues earned and the actual periods in which revenues are earned will differ from the amounts and periods shown in the tables above due to various factors, including shipyard and maintenance projects, unplanned downtime and other factors that result in lower applicable dayrates than the full contractual operating dayrate.
Added
Additional factors that could affect the amount and - 28 - Table of Contents timing of actual revenues to be recognized include customer liquidity issues and contract suspension or termination that may be available to our customers under certain circumstances.
Added
The contractual operating dayrate may be higher than the actual dayrate we ultimately receive because an alternative contractual dayrate, such as a waiting-on-weather rate, waiting-on-customer rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
Added
The contractual operating dayrate may also be higher than the actual dayrate we ultimately receive because of a number of factors, including rig downtime or suspension of operations. In certain contracts, the actual dayrate may be reduced to zero if, for example, repairs extend beyond a stated period of time. See “ Part I. Item 1A.
Added
Risk Factors—Risks related to our business—Our current backlog of contract drilling revenues may not be fully realized .” Average daily revenue —We believe average daily revenue provides a comparative measurement unit for our revenue-earning performance. Average daily revenue is defined as operating revenues, excluding revenues for contract terminations, reimbursements and contract intangible amortization, earned per operating day.
Added
The average daily revenue for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Average daily revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 456,900 $ 428,000 ​ $ 393,700 ​ Harsh environment floaters ​ $ 456,200 ​ $ 435,900 ​ $ 354,300 ​ Total fleet average daily revenue ​ $ 456,700 $ 430,100 ​ $ 382,300 ​ Our average daily revenue fluctuates relative to market conditions and our revenue efficiency.
Added
The average daily revenue may be affected by incentive performance bonuses or penalties or demobilization fee revenues. Revenues for a newbuild unit are included in the calculation when the rig commences operations upon acceptance by the customer.
Added
We remove a rig from the calculation upon disposal or classification as held for sale, unless we continue to operate the rig, in which case we remove the rig upon completion or novation of the contract. Revenue efficiency —We believe revenue efficiency measures our ability to ultimately convert our contract backlog into revenues.
Added
Revenue efficiency is defined as actual operating revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage.
Added
Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding revenues for incentive provisions, reimbursements and contract terminations.
Added
The revenue efficiency rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ 2023 Revenue efficiency ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 95.7 % ​ 93.4 % ​ 96.5 % Harsh environment floaters ​ 98.4 % ​ 97.5 % ​ 97.8 % Total fleet average revenue efficiency ​ 96.5 % ​ 94.5 % ​ 96.8 % Our revenue efficiency rate varies due to revenues earned under alternative contractual dayrates, such as a waiting-on-weather rate, waiting-on-customer rate, repair rate, standby rate, force majeure rate or zero rate, that may apply under certain circumstances.
Added
Our revenue efficiency rate is also affected by incentive performance bonuses or penalties. We include newbuilds in the calculation when the rigs commence operations upon acceptance by the customer. We exclude rigs that are not operating under contract, such as those that are stacked.
Added
Rig utilization —We present our rig utilization as an indicator of our ability to secure work for our fleet. Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage.
Added
The rig utilization rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Rig utilization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 69.1 % ​ 57.3 % ​ 49.4 % Harsh environment floaters ​ 82.6 % ​ 71.1 % ​ 59.1 % Total fleet average rig utilization ​ 72.4 % ​ 60.5 % ​ 51.9 % Our rig utilization rate declines as a result of idle and stacked rigs and during shipyard, contract preparation and mobilization periods.
Added
We include newbuilds in the calculation when the rigs commence operations upon acceptance by the customer. We remove a rig from the calculation upon disposal or classification as held for sale, unless we continue to operate the rig, in which case we remove the rig upon completion or novation of the contract.
Added
Accordingly, our rig utilization can increase when we remove idle or stacked units from our fleet. - 29 - Table of Contents Operating Results Year ended December 31, 2025 compared to the year ended December 31, 2024 The following is an analysis of our operating results.
Added
See “— Performance and Other Key Indicators ” for definitions of operating days, average daily revenue, revenue efficiency and rig utilization. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ ​ 2024 ​ ​ ​ ​ Change ​ ​ ​ % Change ​ ​ ​ (in millions, except day amounts and percentages) ​ Operating days ​ ​ 8,220 ​ ​ 7,848 ​ ​ ​ 372 ​ 5 % Average daily revenue $ 456,700 ​ ​ $ 430,100 ​ ​ $ 26,600 ​ 6 % Revenue efficiency ​ ​ 96.5 % ​ ​ 94.5 % ​ ​ ​ ​ ​ ​ Rig utilization ​ ​ 72.4 % ​ ​ 60.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract drilling revenues $ 3,965 ​ ​ $ 3,524 ​ ​ $ 441 ​ 13 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and maintenance expense ​ ​ (2,406) ​ ​ ​ (2,199) ​ ​ ​ (207) ​ (9) % Depreciation and amortization expense ​ ​ (659) ​ ​ ​ (739) ​ ​ ​ 80 ​ 11 % General and administrative expense ​ ​ (195) ​ ​ ​ (214) ​ ​ ​ 19 ​ 9 % Loss on impairment of assets ​ ​ (3,049) ​ ​ ​ (772) ​ ​ ​ (2,277) ​ nm ​ Gain (loss) on disposal of assets, net ​ ​ 7 ​ ​ ​ (17) ​ ​ ​ 24 ​ nm ​ Operating loss ​ ​ (2,337) ​ ​ ​ (417) ​ ​ ​ (1,920) ​ nm ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 40 ​ ​ ​ 50 ​ ​ ​ (10) ​ (20) % Interest expense ​ ​ (555) ​ ​ ​ (362) ​ ​ ​ (193) ​ (53) % Gain on retirement of debt ​ ​ 3 ​ ​ ​ 161 ​ ​ ​ (158) ​ (98) % Other, net ​ ​ (99) ​ ​ ​ 45 ​ ​ ​ (144) ​ nm ​ Loss before income taxes ​ ​ (2,948) ​ ​ ​ (523) ​ ​ ​ (2,425) ​ nm ​ Income tax benefit ​ ​ 33 ​ ​ ​ 11 ​ ​ ​ 22 ​ nm ​ Net loss $ (2,915) ​ ​ $ (512) ​ ​ $ (2,403) ​ nm ​ “nm” means not meaningful.
Added
Contract drilling revenues —Contract drilling revenues increased for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (a) approximately $140 million resulting from higher average daily revenues, (b) approximately $110 million resulting from increased utilization, (c) approximately $80 million resulting from increased revenue efficiency for the fleet, (d) approximately $70 million resulting from increased activity for the operations of our newbuild ultra-deepwater drillship Deepwater Aquila and (e) approximately $50 million resulting from increased reimbursement revenues.
Added
These increases were partially offset by approximately $10 million resulting from one less calendar day in the year ended December 31, 2025.
Added
Costs and expenses —Operating and maintenance costs and expenses increased for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (a) approximately $85 million resulting from increased activity for the operations of our active fleet, (b) approximately $50 million resulting from increased reimbursable costs, (c) a net increased loss of approximately $45 million associated with certain legal outcomes that resulted in a net non-cash loss of $20 million in the current year compared to a net gain of $25 million from favorable settlements in the earlier year, (d) approximately $35 million resulting from the operations of our newbuild Deepwater Aquila and (e) approximately $35 million resulting from the estimated effect of inflation on personnel and other operating costs.
Added
These increases were partially offset by the following: (a) approximately $25 million resulting from rigs classified as held for sale or sold, (b) approximately $15 million resulting from lower supply chain costs and (c) approximately $5 million resulting from costs associated with the early retirement of certain personnel in the earlier year.
Added
Depreciation and amortization expense decreased for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (a) $97 million resulting from rigs sold or classified as held for sale and (b) $9 million resulting from assets that were retired or had reached the end of their useful lives, partially offset by (c) $27 million resulting from one acquired harsh environment semisubmersible, one newbuild ultra-deepwater drillship and other property and equipment placed into service in the earlier year.
Added
General and administrative costs and expenses decreased for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: (a) $8 million resulting from decreased legal and professional fees, (b) $5 million resulting from decreased personnel costs, primarily associated with the early retirement of certain personnel in the earlier year, and (c) approximately $4 million resulting from decreased technology costs.
Added
Impairment of assets —In the year ended December 31, 2025, we recognized a loss associated with the impairment of the ultra-deepwater floaters Deepwater Champion , Discoverer Americas, Discoverer Clear Leader , Discoverer India , Discoverer Luanda , GSF Development Driller I and the harsh environment semisubmersible Henry Goodrich together with related assets, which we determined were impaired at the time we classified them as held for sale, and Development Driller III and Discoverer Inspiration together with related - 30 - Table of Contents assets, which were previously classified as held for sale and we determined were further impaired.

… 94 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

0 edited+1 added−164 removed0 unchanged
Removed
Item 6. RESERVED ​ - 25 - Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Introduction 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.
Added
Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8. Financial Statements and Supplementary Data 37 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 70 Item 9A. Controls and Procedures 70 Item 9B.
Removed
As of February 11, 2025, we owned or had partial ownership interests in and operated 34 mobile offshore drilling units, consisting of 26 ultra-deepwater floaters and eight harsh environment floaters.
Removed
We provide, as our primary business, contract drilling services in a single operating segment, which involves contracting our mobile offshore drilling rigs, related equipment and work crews to drill oil and gas wells. We specialize in technically demanding regions of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services.
Removed
Our drilling fleet is one of the most versatile fleets in the world, consisting of drillships and semisubmersible floaters used in support of offshore drilling activities and offshore support services on a worldwide basis.
Removed
We perform contract drilling services by deploying our high-specification fleet in a single, global market that is geographically dispersed in oil and gas exploration and development areas throughout the world.
Removed
Although rigs can be moved from one region to another, the cost of moving rigs and the availability of rig-moving vessels may cause the supply and demand balance to fluctuate somewhat between regions. Still, significant variations between regions do not tend to persist long term because of rig mobility.
Removed
The location of our rigs and the allocation of resources to operate, build or upgrade our rigs are determined by the activities and needs of our customers. The information contained in this section should be read in conjunction with the information contained in “ Part I. Item 1. Business ,” “ Part I. Item 1A.
Removed
Risk Factors ” and the audited consolidated financial statements and the notes thereto included under “ Item 8. Financial Statements and Supplementary Data ” elsewhere in this annual report on Form 10-K. The following discussion of our results of operations and liquidity and capital resources includes comparisons for the years ended December 31, 2024 and 2023.
Removed
For a discussion, including comparisons, of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022, see “Part II. Item 7.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2023 , filed with the United States (“U.S.”) Securities and Exchange Commission on February 21, 2024.
Removed
Significant Events Acquisition —In June 2024, we transferred noncash consideration with an aggregate fair value of $431 million, including 55.5 million Transocean Ltd. shares and $130 million aggregate principal amount of 8.00% senior notes due February 2027 (the “8.00% Senior Notes”), to acquire the outstanding 67.0 percent ownership interest in Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”), the Cayman Islands company that owned the harsh environment floater Transocean Norge , and as a result, Orion became our wholly owned subsidiary.
Removed
See “— Operating Results” and “ —Liquidity and Capital Resources—Sources and uses of liquidity . ” Disposal of assets —In February 2024, we completed the sale of the harsh environment floaters Paul B.
Removed
Loyd, Jr. and Transocean Leader , together with related assets, for aggregate net cash proceeds of $49 million, including $6 million received as a deposit in the year ended December 31, 2023.
Removed
See “— Operating Results” and “ —Liquidity and Capital Resources—Sources and uses of liquidity . ” In July 2024, we completed the sale of the ultra-deepwater floater Deepwater Nautilus and related assets for aggregate net cash proceeds of $53 million.
Removed
In the year ended December 31, 2024, we recognized a loss of $143 million ($138 million or $0.15 per diluted share, net of tax) associated with the impairment of the rig and related assets, which we determined were impaired at the time that we classified the assets as held for sale.
Removed
See “— Operating Results, ” “ —Liquidity and Capital Resources—Sources and uses of liquidity. ” In September 2024, we executed purchase and sale agreements for the sale of the ultra-deepwater floaters Development Driller III and Discoverer Inspiration, together with related assets, for aggregate expected net cash proceeds of $343 million, and we recognized a loss of $629 million ($617 million or $0.67 per diluted share, net of tax), associated with the impairment of such assets, which we determined were impaired at the time that we classified the assets as held for sale.
Removed
The transactions contemplated by the binding purchase and sale agreements, executed in September 2024, for these rigs and related assets were subject to customary closing conditions, including the buyers’ ability to secure financing for the purchases.
Removed
In January 2025, after extending the originally agreed closing dates, we canceled the purchase and sale agreements as a result of the buyers’ failure to deliver the proceeds.
Removed
See “— Operating Results, ” “ —Liquidity and Capital Resources—Sources and uses of liquidity. ” Secured credit facility —In April 2024, we amended the credit agreement that established our secured credit facility (as amended from time to time, the “Secured Credit Facility”) to, among other things, (a) extend the maturity date from June 22, 2025 to June 22, 2028 and (b) reduce the borrowing capacity from $600 million to $576 million through June 22, 2025, and thereafter reduce the borrowing capacity to $510 million through June 22, 2028.
Removed
See “ —Liquidity and Capital Resources—Sources and uses of liquidity .” - 26 - Table of Contents Debt issuance —In April 2024, we issued $900 million aggregate principal amount of 8.25% senior notes due May 2029 (the “8.25% Senior Notes”) and $900 million aggregate principal amount of 8.50% senior notes due May 2031 (the “8.50% Senior Notes”), and we received $1.77 billion aggregate cash proceeds, net of issue costs.
Removed
See “ —Liquidity and Capital Resources—Sources and uses of liquidity .” Debt tender offers —In April 2024, we made an aggregate cash payment of $886 million, including related costs, to complete tender offers (the “Tender Offers”) for $596 million and $249 million aggregate principal amount of the validly tendered 11.50% senior guaranteed notes due January 2027 (the “11.50% Senior Guaranteed Notes”) and 7.25% senior notes due November 2025 (the “7.25% Senior Notes”), respectively.
Removed
See “ —Liquidity and Capital Resources—Sources and uses of liquidity .” Debt redemption —In April 2024, we made an aggregate cash payment of $658 million, including related costs, to fully redeem $569 million aggregate principal amount of 7.50% senior notes due January 2026 and partially redeem $87 million aggregate principal amount of 8.00% Senior Notes.
Removed
In the year ended December 31, 2024, we made an aggregate cash payment of $204 million to redeem the remaining $105 million aggregate principal amount of 7.25% Senior Notes and $91 million aggregate principal amount of 11.50% Senior Guaranteed Notes outstanding following the completion of the Tender Offers.
Removed
See “ —Liquidity and Capital Resources—Sources and uses of liquidity .” Outlook Drilling market —Our industry outlook is positive based upon underlying economic factors, including numerous long-term forecasts that indicate hydrocarbons will continue to be a critical source of energy for the foreseeable future, despite significant relative growth in alternative energy technologies.
Removed
Economic forecasts indicate that countries that are not members of the Organization for Economic Co-operation and Development will continue to experience population growth and improvement in living standards, which will compound the increase in energy demand for the foreseeable future. We believe that these factors will contribute to robust demand for oil and gas.
Removed
The existing supply of oil and gas is depleting and requires replenishment. The replacement of reserves remains critically important given the significant underinvestment during the last several years and the challenges to new exploration and production investments imposed on many industry participants by investors and the governments of oil and gas producing nations.
Removed
Additionally, energy security will remain an important geopolitical factor across Europe, the U.S. and elsewhere with the growing understanding that hydrocarbons are not easily displaced by alternatives for much of the world’s energy needs.
Removed
With deepwater and harsh environment fields generating favorable economic returns and relatively lower carbon intensity than other hydrocarbon sources, we expect a significant portion of the required spending in fossil fuel development will continue to be allocated to deepwater and harsh environment projects.
Removed
Although the price for oil may continue to exhibit volatility in response to factors outside of our control, including uncertainty about future output from the major oil and gas producing countries, interest rate changes, geopolitical events and global economic growth, we nevertheless expect prices to remain at levels that continue to be supportive of investment in deepwater and harsh environment exploration and development projects.
Removed
Significantly reduced offshore contracting activity during the previous downcycle has also resulted in a smaller marketable global fleet of floating rigs available to meet the current upcycle in expected customer demands, specifically with respect to the highest specification drilling units preferred by many of our customers for their projects.
Removed
Marketable supply and demand for ultra-deepwater and harsh environment rigs has become more balanced relative to prior periods. We do, however, expect some increased pressure on utilization into 2026, as several of our competitors’ rigs have yet to obtain new commitments.
Removed
Our customers are planning further into the future to ensure availability of rigs for their drilling programs and are signing contracts with longer lead times and durations, as well as higher dayrates.
Removed
Our customers continue to pursue offshore projects in deepwater and harsh environments where rates of return and production volumes are anticipated to be very attractive, which is reflected in the resumption of postponed projects, commencement of new drilling and exploration campaigns and extensions of current drilling campaigns. Offshore drilling activity remains robust in every major deepwater geographic sector.
Removed
Several new exploration and development programs have commenced, and our customers continue to be disciplined in their investment of capital and remain focused on project execution. Tendering activity improved during 2024 in the golden triangle area, which comprises North America, South America and West Africa.
Removed
In Norway, the largest region for harsh environment rigs, we anticipate demand will accelerate and extend through the end of the decade. Several of the high-specification semisubmersible rigs that departed the region to work in other emerging harsh environment regions may ultimately return to fulfill the anticipated increase in demand in Norway.
Removed
Contract durations, including subsequent extensions, on most of these units along with other factors affecting supply and demand for drilling rigs are likely to continue to have a favorable influence on dayrates and contracting terms as competition increases for high-specification semisubmersibles. Fleet status —We refer to the availability of our rigs in terms of the uncommitted fleet rate.
Removed
The uncommitted fleet rate is defined as the number of uncommitted days divided by the total number of rig calendar days in the measurement period, expressed as a percentage.
Removed
An uncommitted day is defined as a calendar day during which a rig is idle or stacked, is not contracted to a customer and is not committed - 27 - Table of Contents to a shipyard. The uncommitted fleet rates exclude the effect of priced options.
Removed
As of February 12, 2025, our uncommitted fleet rates for each of the five years in the period ending December 31, 2029 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Uncommitted fleet rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 40 % ​ 52 % ​ 69 % ​ 87 % ​ 95 % ​ Harsh environment floaters ​ 20 % ​ 36 % ​ 82 % ​ 94 % ​ 100 % ​ Performance and Other Key Indicators Contract backlog —We believe our industry leading contract backlog distinguishes us from the competition and provides indicators of our future revenue-earning opportunities.
Removed
Contract backlog is defined as the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, excluding revenues for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be material to our contract drilling revenues.
Removed
The contract backlog represents the maximum contract drilling revenues that can be earned considering the contractual operating dayrate in effect during the firm contract period.
Removed
The contract backlog for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ February 12, ​ October 24, ​ February 14, ​ 2025 2024 2024 ​ ​ (in millions) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 6,363 $ 7,144 $ 6,951 ​ Harsh environment floaters ​ ​ 1,965 ​ ​ 2,144 ​ ​ 2,057 ​ Total contract backlog $ 8,328 $ 9,288 $ 9,008 ​ Our contract backlog includes only firm commitments which are represented by signed drilling contracts or, in some cases, by other definitive agreements awaiting contract execution.
Removed
It does not include conditional agreements and options to extend firm commitments. The average contractual dayrate relative to our contract backlog is defined as the average maximum contractual operating dayrate to be earned per operating day in the measurement period.
Removed
An operating day is defined as a day for which a rig is contracted to earn a dayrate during the firm contract period after operations commence.
Removed
At February 12, 2025, the contract backlog and average contractual dayrates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ending December 31, ​ Total 2025 2026 2027 2028 2029 ​ ​ (in millions, except average dayrates) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 6,363 $ 2,230 $ 2,007 ​ $ 1,319 ​ $ 584 ​ $ 223 ​ Harsh environment floaters ​ ​ 1,965 ​ ​ 842 ​ ​ 811 ​ ​ 226 ​ ​ 86 ​ ​ — ​ Total contract backlog $ 8,328 $ 3,072 $ 2,818 ​ $ 1,545 ​ $ 670 ​ $ 223 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average contractual dayrates ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 435,000 $ 443,000 $ 457,000 ​ $ 452,000 ​ $ 489,000 ​ $ 509,000 ​ Harsh environment floaters ​ $ 404,000 $ 404,000 $ 438,000 ​ $ 437,000 ​ $ 508,000 ​ $ — ​ Total fleet average ​ $ 427,000 $ 432,000 $ 452,000 ​ $ 449,000 ​ $ 491,000 ​ $ 509,000 ​ The actual amount of revenues earned and the actual periods in which revenues are earned will differ from the amounts and periods shown in the tables above due to various factors, including shipyard and maintenance projects, unplanned downtime and other factors that result in lower applicable dayrates than the full contractual operating dayrate.
Removed
Additional factors that could affect the amount and timing of actual revenues to be recognized include customer liquidity issues and contract suspension or termination that may be available to our customers under certain circumstances.
Removed
The contractual operating dayrate may be higher than the actual dayrate we ultimately receive because an alternative contractual dayrate, such as a waiting-on-weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
Removed
The contractual operating dayrate may also be higher than the actual dayrate we ultimately receive because of a number of factors, including rig downtime or suspension of operations. In certain contracts, the actual dayrate may be reduced to zero if, for example, repairs extend beyond a stated period of time. See “ Part I. Item 1A.
Removed
Risk Factors—Risks related to our business—Our current backlog of contract drilling revenues may not be fully realized .” - 28 - Table of Contents Average daily revenue —We believe average daily revenue provides a comparative measurement unit for our revenue-earning performance.
Removed
Average daily revenue is defined as operating revenues, excluding revenues for contract terminations, reimbursements and contract intangible amortization, earned per operating day.
Removed
The average daily revenue for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 2022 Average daily revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 428,000 $ 393,700 ​ $ 329,100 ​ Harsh environment floaters ​ $ 435,900 ​ $ 354,300 ​ $ 380,000 ​ Total fleet average daily revenue ​ $ 430,100 $ 382,300 ​ $ 345,500 ​ Our average daily revenue fluctuates relative to market conditions and our revenue efficiency.
Removed
The average daily revenue may be affected by incentive performance bonuses or penalties or demobilization fee revenues. Revenues for a newbuild unit are included in the calculation when the rig commences operations upon acceptance by the customer.
Removed
We remove a rig from the calculation upon disposal or classification as held for sale, unless we continue to operate the rig, in which case we remove the rig upon completion or novation of the contract. Revenue efficiency —We believe revenue efficiency measures our ability to ultimately convert our contract backlog into revenues.
Removed
Revenue efficiency is defined as actual operating revenues, excluding revenues for contract terminations and reimbursements, for the measurement period divided by the maximum revenue calculated for the measurement period, expressed as a percentage.
Removed
Maximum revenue is defined as the greatest amount of contract drilling revenues the drilling unit could earn for the measurement period, excluding revenues for incentive provisions, reimbursements and contract terminations.
Removed
The revenue efficiency rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2024 ​ 2023 ​ 2022 Revenue efficiency ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 93.4 % ​ 96.5 % ​ 95.7 % Harsh environment floaters ​ 97.5 % ​ 97.8 % ​ 97.6 % Total fleet average revenue efficiency ​ 94.5 % ​ 96.8 % ​ 96.4 % Our revenue efficiency rate varies due to revenues earned under alternative contractual dayrates, such as a waiting-on-weather rate, repair rate, standby rate, force majeure rate or zero rate, that may apply under certain circumstances.
Removed
Our revenue efficiency rate is also affected by incentive performance bonuses or penalties. We include newbuilds in the calculation when the rigs commence operations upon acceptance by the customer. We exclude rigs that are not operating under contract, such as those that are stacked.
Removed
Rig utilization —We present our rig utilization as an indicator of our ability to secure work for our fleet. Rig utilization is defined as the total number of operating days divided by the total number of rig calendar days in the measurement period, expressed as a percentage.
Removed
The rig utilization rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2024 ​ 2023 ​ 2022 Rig utilization ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 57.3 % ​ 49.4 % ​ 50.1 % Harsh environment floaters ​ 71.1 % ​ 59.1 % ​ 64.9 % Total fleet average rig utilization ​ 60.5 % ​ 51.9 % ​ 54.1 % Our rig utilization rate declines as a result of idle and stacked rigs and during shipyard, contract preparation and mobilization periods.
Removed
We include newbuilds in the calculation when the rigs commence operations upon acceptance by the customer. We remove a rig from the calculation upon disposal or classification as held for sale, unless we continue to operate the rig, in which case we remove the rig upon completion or novation of the contract.
Removed
Accordingly, our rig utilization can increase when we remove idle or stacked units from our fleet. - 29 - Table of Contents Operating Results Year ended December 31, 2024 compared to the year ended December 31, 2023 The following is an analysis of our operating results.
Removed
See “— Performance and Other Key Indicators ” for definitions of operating days, average daily revenue, revenue efficiency and rig utilization. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ Change % Change ​ ​ ​ (in millions, except day amounts and percentages) ​ Operating days ​ ​ 7,848 ​ ​ 7,045 ​ ​ ​ 803 ​ 11 % Average daily revenue ​ $ 430,100 ​ ​ $ 382,300 ​ ​ $ 47,800 ​ 13 % Revenue efficiency ​ ​ 94.5 % ​ ​ 96.8 % ​ ​ ​ ​ ​ ​ Rig utilization ​ ​ 60.5 % ​ ​ 51.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract drilling revenues ​ $ 3,524 ​ ​ $ 2,832 ​ ​ $ 692 ​ 24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and maintenance expense ​ ​ (2,199) ​ ​ ​ (1,986) ​ ​ ​ (213) ​ (11) % Depreciation and amortization expense ​ ​ (739) ​ ​ ​ (744) ​ ​ ​ 5 ​ 1 % General and administrative expense ​ ​ (214) ​ ​ ​ (187) ​ ​ ​ (27) ​ (14) % Loss on impairment of assets ​ ​ (772) ​ ​ ​ (57) ​ ​ ​ (715) ​ nm ​ Loss on disposal of assets, net ​ ​ (17) ​ ​ ​ (183) ​ ​ ​ 166 ​ 91 % Operating loss ​ ​ (417) ​ ​ ​ (325) ​ ​ ​ (92) ​ (28) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 50 ​ ​ ​ 52 ​ ​ ​ (2) ​ (4) % Interest expense, net of amounts capitalized ​ ​ (362) ​ ​ ​ (646) ​ ​ ​ 284 ​ 44 % Gain (loss) on retirement of debt ​ ​ 161 ​ ​ ​ (31) ​ ​ ​ 192 ​ nm ​ Other, net ​ ​ 45 ​ ​ ​ 9 ​ ​ ​ 36 ​ nm ​ Loss before income tax (expense) benefit ​ ​ (523) ​ ​ ​ (941) ​ ​ ​ 418 ​ 44 % Income tax (expense) benefit ​ ​ 11 ​ ​ ​ (13) ​ ​ ​ 24 ​ nm ​ Net loss ​ $ (512) ​ ​ $ (954) ​ ​ $ 442 ​ 46 % “nm” means not meaningful.
Removed
Contract drilling revenues —Contract drilling revenues increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (a) approximately $470 million resulting from increased utilization, (b) approximately $275 million resulting from improved average daily revenues, (c) approximately $140 million resulting from the operations of our newbuild ultra-deepwater floaters Deepwater Titan and Deepwater Aquila , (d) approximately $70 million resulting from increased activity for the operations of Transocean Norge and (e) $48 million resulting from decreased amortization of contract intangible assets.
Removed
These increases were partially offset by the following: (a) approximately $200 million resulting from rigs sold or classified as held for sale, (b) approximately $50 million resulting from decreased revenue efficiency for the comparable active fleet and (c) approximately $35 million resulting from early termination fees in the year ended December 31, 2023 with no comparable activity in the current-year period and (d) approximately $20 million resulting from unfavorable currency exchange rates.
Removed
Costs and expenses —Operating and maintenance costs and expenses increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (a) approximately $310 million resulting from increased operating activity, (b) approximately $70 million resulting from the operations of Deepwater Titan and Deepwater Aquila , (c) approximately $65 million resulting from incremental in-service costs related to additional subcontracted services, (d) approximately $60 million resulting from the effect of inflation on personnel and other operating costs, (e) approximately $30 million resulting from the operations of Transocean Norge , and (f) approximately $15 million resulting from increased out-of-service costs.
Removed
These increases were partially offset by the following: (a) approximately $180 million resulting from rigs sold or classified as held for sale, (b) approximately $100 million resulting from lower costs incurred during contract preparation, (c) approximately $25 million resulting from increased favorable settlements of various litigation and contingencies and (d) approximately $20 million resulting from favorable currency exchange rates.
Removed
Depreciation and amortization expense decreased for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to (a) $33 million resulting from rigs sold, contributed or classified as held for sale and (b) $12 million resulting from assets that had reached the end of their useful lives or had been retired, partially offset by an increase of (c) $40 million resulting from three newbuild ultra-deepwater floaters, one acquired harsh environment floater and other property and equipment placed into service.
Removed
General and administrative costs and expenses increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (a) $17 million resulting from increased personnel costs, primarily resulting from costs associated with the early retirement of certain personnel, and (b) $13 million resulting from increased legal and professional fees.
Removed
Loss on impairment or disposal of assets —In the year ended December 31, 2024, we recognized a loss of $772 million associated with the impairment of Deepwater Nautilus , Development Driller III and Discoverer Inspiration , together with related assets.
Removed
In - 30 - Table of Contents the year ended December 31, 2023, we recognized a loss of $57 million associated with the impairment of Paul B. Loyd, Jr . and Transocean Leader , together with related assets.
Removed
In the year ended December 31, 2023, we recognized a loss of $169 million associated with our non-cash contribution of ultra-deepwater floater Ocean Rig Olympia and related assets in exchange for an equity ownership interest in Global Sea Mineral Resources NV.
Removed
In the years ended December 31, 2024 and 2023, we recognized an aggregate net loss of $16 million and $14 million, respectively, associated with the disposal of assets unrelated to rig sales.
Removed
Other income and expense —Interest expense, net of amounts capitalized, decreased in the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (a) $342 million decreased interest resulting from the fair value adjustment of the bifurcated compound exchange feature embedded in the indenture governing the 4.625% senior guaranteed exchangeable bonds due September 2029 (the “4.625% Senior Guaranteed Exchangeable Bonds”) and (b) $75 million decreased interest resulting from debt repaid as scheduled or early retired, partially offset by, (c) $133 million increased interest resulting from debt issued and (d) $24 million increased interest resulting from reduced interest costs capitalized for our recently completed newbuild construction program.
Removed
In the year ended December 31, 2024, we recognized a net gain on retirement of debt as follows: (a) a net gain of $144 million resulting from retirement of notes validly tendered in the Tender Offers and (b) a net gain of $17 million resulting from the redemption of $852 million aggregate principal amount of our debt securities.
Removed
In the year ended December 31, 2023, we recognized a net loss primarily resulting from the redemption of $1.38 billion aggregate principal amount of our debt securities.
Removed
Other income net, increased in the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the following: (a) a loss of $27 million associated with a payment of cash or the issuance of additional shares to certain holders that elected to exercise their exchanges rights for the 4.00% Senior Guaranteed Exchangeable Bonds and the 4.625% Senior Guaranteed Exchangeable Bonds in the year ended December 31, 2023 with no comparable activity in the current year, b) decreased losses of $19 million related to our equity investments in unconsolidated affiliates and (c) an increased gain of $6 million related to net changes to currency exchange rates, partially offset by (d) decreased income of $19 million related to our dual-activity patent.
Removed
Income tax expense —In the years ended December 31, 2024 and 2023, our effective tax rate was 2.2 percent and (1.4) percent, respectively, based on loss before income tax expense or benefit.
Removed
In the years ended December 31, 2024 and 2023, the aggregate effect of discrete period tax items was a net tax benefit of $158 million and $74 million, respectively.
Removed
In the year ended December 31, 2024, discrete items included changes to deferred taxes resulting from operational and structural changes related to rig movements and asset impairments, changes to valuation allowances and settlements and expirations of various uncertain tax positions.

… 85 more changes not shown on this page.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+23 added−5 removed86 unchanged
Biggest changeWe operate in various regions throughout the world, which may expose us to political and other uncertainties, including risks of: ◾ terrorist acts, war, piracy and civil unrest; ◾ seizure, expropriation or nationalization of our assets or of our customers’ property; ◾ customs delays or disputes; ◾ repudiation or nationalization of contracts; ◾ imposition of trade or immigration barriers; ◾ import-export quotas; ◾ wage and price controls; ◾ changes in law and regulatory requirements, including changes in interpretation and enforcement; ◾ involvement in judicial proceedings in unfavorable jurisdictions; ◾ damage to our equipment or violence directed at our employees, including kidnappings; ◾ complications associated with supplying, repairing and replacing equipment in remote locations; ◾ public health threats, including pandemics, epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases; ◾ the inability to move income or capital; and ◾ currency exchange fluctuations and currency exchange restrictions, including exchange or similar controls that may limit our ability to convert local currency into U.S. dollars and transfer funds out of a local jurisdiction.
Biggest changeWe operate in various regions throughout the world, which may expose us to political and other uncertainties, including risks of: ◾ customs delays or disputes, import-export quotas, and imposition of trade or immigration barriers; ◾ wage and price controls; ◾ complications associated with supplying, repairing and replacing equipment in remote locations; ◾ changes in law and regulatory requirements, including changes in interpretation and enforcement; ◾ the inability to move income or capital; ◾ currency exchange fluctuations and currency exchange restrictions, including exchange or similar controls that may limit our ability to convert local currency into U.S. dollars and transfer funds out of a local jurisdiction. ◾ involvement in judicial proceedings in unfavorable jurisdictions; ◾ repudiation or nationalization of contracts; ◾ damage to our equipment or violence directed at our employees, including kidnappings; ◾ terrorist acts, war, piracy and civil unrest; ◾ seizure, expropriation or nationalization of our assets or of our customers’ property; and ◾ public health threats, including pandemics, epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseases.
As such, any material change to tax laws, treaties, regulations or policies, their interpretation or application, or the adoption of new interpretations of existing laws and rulings, in any of the jurisdictions in which we operate, are incorporated or resident, could result in a higher effective tax rate on our worldwide earnings and such change could have a significant adverse effect on our financial position, results of operations or cash flows.
Any material change to tax laws, treaties, regulations or policies, their interpretation or application, or the adoption of new interpretations of existing laws and rulings, in any of the jurisdictions in which we operate, are incorporated or resident, could result in a higher effective tax rate on our worldwide earnings and such change could have a significant adverse effect on our financial position, results of operations or cash flows.
Bureau of Ocean Energy Management (the “BOEM”) implemented changes regarding when oil, gas and sulfur lessees and certain other parties operating in the offshore Outer Continental Shelf must post additional bonds or other supplemental financial assurance, which could increase bonding requirements and operating expenditures for some of our customers, and as a result, increase price competition for our services.
Bureau of Ocean Energy Management (the “BOEM”) implemented changes regarding when oil, gas and sulfur lessees and certain other parties operating in the offshore Outer Continental Shelf (“OCS”) must post additional bonds or other supplemental financial assurance, which could increase bonding requirements and operating expenditures for some of our customers, and as a result, increase price competition for our services.
Acts of terrorism, piracy and political and social unrest could affect the markets for drilling services. Acts of terrorism and social unrest, brought about by world political events or otherwise, have caused instability in the world’s financial and insurance markets in the past and may occur in the future. Such acts could be directed against companies such as ours.
Acts of terrorism, piracy and political and social unrest could affect the market for drilling services. Acts of terrorism and social unrest, brought about by world political events or otherwise, have caused instability in the world’s financial and insurance markets in the past and may occur in the future. Such acts could be directed against companies such as ours.
Suits against non-asset-owning subsidiaries have and may in the future give rise to alter ego or successor-in-interest claims against us and our asset-owning subsidiaries to the extent a subsidiary is unable to pay a claim or insurance is not available or sufficient to cover the claims.
Suits against non-asset-owning subsidiaries have given and may in the future give rise to alter ego or successor-in-interest claims against us and our asset-owning subsidiaries to the extent a subsidiary is unable to pay a claim or insurance is not available or sufficient to cover the claims.
Under the Outer Continental Shelf Lands Act, as amended, the BOEM within the DOI must prepare and maintain forward-looking five-year plans – referred to as national programs or five-year programs – to schedule proposed oil and gas lease sales on the OCS.
Under the Outer Continental Shelf Lands Act, as amended (the “OCSLA”), the BOEM within the DOI must prepare and maintain forward-looking five-year plans – referred to as national programs or five-year programs – to schedule proposed oil and gas lease sales on the OCS.
If we are not able to obtain visas and work permits for the employees we need to conduct our operations on a timely basis, we might not be able to perform our obligations under our drilling contracts, which could allow our customers to cancel the contracts.
If we are unable to obtain visas and work permits for the employees we need to conduct our operations on a timely basis, we might not be able to perform our obligations under our drilling contracts, which could allow our customers to cancel the contracts.
Depending on the circumstances, we may also need to use qualifying additional paid-in capital available for distributions in order to reduce our accumulated net loss and such use might reduce our ability to make distributions without subjecting our shareholders to Swiss withholding tax.
Depending on the circumstances, we may also need to use qualifying additional paid-in capital available for distributions to reduce our accumulated net loss and such use might reduce our ability to make distributions without subjecting our shareholders to Swiss withholding tax.
Worldwide financial and economic conditions could restrict our ability to access the capital markets at a time when we would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and business conditions.
Worldwide financial and economic conditions could restrict our ability to access capital markets at a time when we would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and business conditions.
Any restrictions on oil and natural gas operations on the U.S. Outer Continental Shelf (“OCS”) could have an adverse impact on our business and demand for our services. The U.S.
Any restrictions on oil and natural gas operations on the U.S. Outer Continental Shelf could have an adverse impact on our business and demand for our services. The U.S.
In addition, acts of terrorism, piracy and social unrest could lead to increased volatility in prices for crude oil and natural gas and could affect the markets for drilling services. Insurance premiums could increase and coverage may be unavailable in the future. Government regulations may effectively preclude us from engaging in business activities in certain countries.
In addition, acts of terrorism, piracy and social unrest could lead to increased volatility in prices for crude oil and natural gas and could affect the market for drilling services. Insurance premiums could increase and coverage may be unavailable in the future. Government regulations may effectively preclude us from engaging in business activities in certain countries.
If unprecedented interpretations are applied by the customs and tax authorities governing such programs and regimes, including those that would deny us the use of such incentives granted historically in the ordinary course, and assuming we are unable to successfully challenge such - 18 - Table of Contents interpretation or otherwise able to recover any amounts pursuant to the contractual provisions of the applicable drilling contract, then the amount of the applicable tariff, which would depend on many factors, could reasonably be expected to increase our operating costs.
If unprecedented interpretations are applied by the customs and tax authorities governing such programs and regimes, including those that would deny us the use of such incentives granted historically in the ordinary course, and assuming we are unable to successfully challenge such interpretation or otherwise able to recover any amounts pursuant to the contractual provisions of the applicable drilling contract, then the amount of the applicable tariff, which would depend on many factors, could reasonably be expected to increase our operating costs.
These potential developments, or market perceptions concerning these and related issues, could adversely affect our financial position, results of operations or cash flows. In addition, turmoil and hostilities in the Middle East, Eastern Europe, North Africa and other geographic areas and countries present incremental risk.
These potential developments, or market perceptions concerning these and related issues, could adversely affect our financial position, results of operations or cash flows. In addition, turmoil and hostilities in the Middle East, Eastern Europe, North Africa, South America and other geographic areas and countries present incremental risk.
To the extent that the number of lease sales and areas available for lease with the current five-year program – or in any future five-year program – are not sufficient to meet our customers’ planned or expected offshore drilling programs, demand for our drilling services on the OCS may be impacted.
To the extent that the number of lease sales and areas available for lease within the current five-year program, or in any future five-year program, are not sufficient to meet our customers’ planned or expected offshore drilling programs, demand for our drilling services on the OCS may be impacted.
We may incur additional costs in order to comply with other existing and future regulatory obligations or industry standards, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballast waters, hull cleaning, maintenance and inspection, development and implementation of emergency procedures and maintenance of insurance coverage or other financial assurance of our ability to address pollution incidents.
We may incur additional costs in order to comply with other existing and future regulatory obligations or industry standards, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballast waters, hull cleaning, maintenance and inspection, development and - 16 - Table of Contents implementation of emergency procedures and maintenance of insurance coverage or other financial assurance of our ability to address pollution incidents.
These requirements have caused increased compliance costs and may in the future increase the risk of environmental or safety enforcement cases and litigation and cause operators to have difficulties obtaining drilling permits in the U.S. Gulf of Mexico. The U.S.
These requirements have caused increased compliance costs and may in the future increase the risk of environmental or safety enforcement cases and litigation and cause operators to have difficulties obtaining drilling permits in the U.S. Gulf of America. The U.S.
Risks associated with these threats include disruptions of certain systems on our rigs; other impairments of our ability to conduct our operations; loss or ransom of intellectual property, proprietary information, personal identifiable - 19 - Table of Contents information or customer and vendor data; disruption of our customers’ and vendors’ operations; misappropriation of assets; loss or damage to our customer and vendor data delivery systems; and increased costs to prevent, respond to or mitigate cybersecurity events.
Risks associated with these threats include disruptions of certain systems on our rigs; other impairments of our ability to conduct our operations; loss or ransom of intellectual property, proprietary information, personal identifiable information or customer and vendor data; disruption of our customers’ and vendors’ operations; misappropriation of assets; loss or damage to our customer and vendor data delivery systems; and increased costs to prevent, respond to or mitigate cybersecurity events.
In response to such studies, the issue of climate change and the effect of greenhouse gas emissions, in particular emissions from the fossil fuel industry, has attracted and continues to attract considerable political and social attention worldwide.
In response to such studies, the issue of climate change and the effect of greenhouse gas emissions, in particular emissions from the fossil fuel industry, has attracted considerable political and social attention worldwide.
For example, an oil spill could result in significant liability, including fines, penalties and criminal liability and remediation, restoration or compensation costs for environmental or natural resource damages, as well as third-party damages, to the extent that the contractual indemnification provisions in our drilling contracts are not enforceable or otherwise sufficient, or if our customers are unwilling or - 16 - Table of Contents unable to contractually indemnify us against these risks.
For example, an oil spill could result in significant liability, including fines, penalties and criminal liability and remediation, restoration or compensation costs for environmental or natural resource damages, as well as third-party damages, to the extent that the contractual indemnification provisions in our drilling contracts are not enforceable or otherwise sufficient, or if our customers are unwilling or unable to contractually indemnify us against these risks.
To the extent that one or more pending or future investigations or litigation matters is not resolved in our favor and is not covered by insurance, which could have a material adverse effect on our financial position, results of operations or cash flows.
To the extent that one or more pending or future investigations or litigation matters is not resolved in our favor and is not covered by insurance, such matter or matters could have a material adverse effect on our financial position, results of operations or cash flows.
In the last decade, U.S. federal agencies adopted enhanced governmental safety and environmental requirements applicable to our operations for drilling in the U.S. Gulf of Mexico.
In the last decade, U.S. federal agencies adopted enhanced governmental safety and environmental requirements applicable to our operations for drilling in the U.S. Gulf of America.
Future actions taken by the U.S. to limit the availability of new oil and gas leases on the OSC would adversely impact the offshore oil and gas industry and impact demand for our services. - 17 - Table of Contents The global nature of our operations involves additional risks.
Future actions taken by the U.S. to limit the availability of new oil and gas leases on the OSC would adversely impact the offshore oil and gas industry and impact demand for our services. The global nature of our operations involves additional risks.
Several jurisdictions have implemented or are expected to implement in the future, the Organization for Economic Co-operation and Development Pillar 2 or other tax related provisions that are aimed at preventing base erosion and profit shifting, ensuring income is subject to a minimum level of taxation and preventing treaty misuse.
Several jurisdictions have implemented and continue to implement the Organization for Economic Co-operation and Development Pillar 2 or other tax related provisions that are aimed at preventing base erosion and profit shifting, ensuring income is subject to a minimum level of taxation and preventing treaty misuse.
Appropriate measures depend on the relevant circumstances and the magnitude of the recognized loss and may include seeking shareholder approval for offsetting the aggregate loss, or a portion thereof, with our statutory capital reserves, including qualifying additional paid-in capital otherwise available for distributions to shareholders, or raising new equity.
Appropriate measures depend on the circumstances and the magnitude of the recognized loss and may include seeking shareholder approval for offsetting the aggregate loss, or a portion thereof, with our statutory - 21 - Table of Contents capital reserves, including qualifying additional paid-in capital otherwise available for distributions to shareholders, or raising new equity.
Additionally, we may not be able to obtain such indemnities in our future drilling contracts, and our customers may not have the financial capability to fulfill their contractual obligations to us. Also, these indemnities may be held to be unenforceable in certain jurisdictions, as a result of public policy or for other reasons.
Additionally, we may not be able to obtain such indemnities in our future drilling contracts, and our customers may not have the financial capability to fulfill their contractual obligations to us. Also, these indemnities may be held to be unenforceable in certain jurisdictions, because of public policy or for other reasons.
We cannot predict whether any changes to laws, regulations or interpretations thereof would result in modifications to our operations nor whether any such modifications would have a material impact to our business. In addition, government action, including initiatives by OPEC, may continue to cause oil or gas price volatility.
We cannot predict whether any changes to laws, regulations or interpretations thereof would result in modifications to our operations nor whether any such modifications would have a material - 18 - Table of Contents impact to our business. In addition, government action, including initiatives by OPEC, may continue to cause oil or gas price volatility.
In addition, such laws, regulations, treaties or international agreements or related risks could result in increased compliance costs or additional operating restrictions, which may have an adverse effect on our business.
In addition, such laws, regulations, treaties or international - 17 - Table of Contents agreements or related risks could result in increased compliance costs or additional operating restrictions, which may have an adverse effect on our business.
We are subject to cybersecurity risks and threats as well as increasing regulation of data privacy and security. We depend on data and digital technologies to conduct our offshore and onshore operations, to collect payments from customers and to pay vendors and employees.
We are subject to cybersecurity risks and threats as well as risks related to the use of artificial intelligence and the regulation of data privacy and security. We depend on data and digital technologies to conduct our offshore and onshore operations, to collect payments from customers and to pay vendors and employees.
Pursuant to the terms of the current general share capital authorization, the board’s authority to issue new shares expires on May 29, 2025, subject to shareholders approving a renewal or increase of this authorization in accordance with the current company practice; ◾ provide for a conditional share capital that authorizes the issuance of additional shares up to a maximum amount of 15.0 percent of the share capital registered in the commercial register as of February 11, 2025 without obtaining additional shareholder approval through: (1) the exercise of conversion, exchange, option, warrant or similar rights for the subscription of shares granted in connection with bonds, options, warrants or other securities newly or already issued in national or international capital markets or new or already existing contractual obligations by or of any of our subsidiaries; or (2) in connection with the issuance of shares, options or other share-based awards; - 21 - Table of Contents ◾ provide that any shareholder who wishes to propose any business or to nominate a person or persons for election as director at any annual meeting may only do so if we are given advance notice; ◾ provide that directors can be removed from office only by the affirmative vote of the holders of at least 66 2/3 percent of the shares entitled to vote; ◾ provide that a merger or demerger transaction requires the affirmative vote of the holders of at least 66 2/3 percent of the shares represented at the meeting and provide for the possibility of a so-called cash-out or squeeze-out merger if the acquirer controls 90 percent of the outstanding shares entitled to vote at the meeting; ◾ provide that any action required or permitted to be taken by the holders of shares must be taken at a duly called annual or extraordinary general meeting of shareholders; ◾ limit the ability of our shareholders to amend or repeal some provisions of our articles of association; and ◾ limit transactions between us and an “interested shareholder,” which is generally defined as a shareholder that, together with its affiliates and associates, beneficially, directly or indirectly, owns 15 percent or more of our shares entitled to vote at a general meeting.
Upon any such reduction of share capital, the board’s authority to issue new shares would again become available, up to the limits provided in the Articles of Association and subject to the expiry of the capital band on May 30, 2026, unless renewed or amended by the shareholders in accordance with the company’s practice; ◾ provide for a conditional share capital that authorizes the issuance of additional shares up to a maximum amount of 11.7 percent of the share capital registered in the commercial register as of February 17, 2026 without obtaining additional shareholder approval through: (1) the exercise of conversion, exchange, option, warrant or similar rights for the subscription of shares granted in connection with bonds, options, warrants or other securities newly or already issued in national or international capital markets or new or already existing contractual obligations by or of any of our subsidiaries; or (2) in connection with the issuance of shares, options or other share-based awards; ◾ provide that any shareholder who wishes to propose any business or to nominate a person or persons for election as director at any annual meeting may only do so if we are given advance notice; ◾ provide that directors can be removed from office only by the affirmative vote of the holders of at least 66 2/3 percent of the shares entitled to vote; ◾ provide that a merger or demerger transaction requires the affirmative vote of the holders of at least 66 2/3 percent of the shares represented at the meeting and provide for the possibility of a so-called cash-out or squeeze-out merger if the acquirer controls 90 percent of the outstanding shares entitled to vote at the meeting; ◾ provide that any action required or permitted to be taken by the holders of shares must be taken at a duly called annual or extraordinary general meeting of shareholders; ◾ limit the ability of our shareholders to amend or repeal some provisions of our articles of association; and ◾ limit transactions between us and an “interested shareholder,” which is generally defined as a shareholder that, together with its affiliates and associates, beneficially, directly or indirectly, owns 15 percent or more of our shares entitled to vote at a general meeting.
Many governments currently favor or effectively require – or based upon changes to laws, regulations or interpretations thereof, may in the future favor or effectively require – the awarding of drilling contracts to local contractors or require nonlocal contractors to employ citizens of, or purchase supplies from, a particular jurisdiction or require use of a local agent.
Many governments currently favor or effectively, or may in the future favor or effectively require, the awarding of drilling contracts to local contractors or require nonlocal contractors to employ citizens of, or purchase supplies from, a particular jurisdiction or require use of a local agent.
If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase shares via a “virtual second trading line” from market players, such as banks and institutional investors, who are generally entitled to receive a full refund of the Swiss withholding tax.
At our 2009 annual general meeting, shareholders approved a share repurchase program. If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase shares via a “virtual second trading line” from market players, such as banks and institutional investors, who are generally entitled to receive a full refund of the Swiss withholding tax.
The attention to climate change has led, and we expect it to continue to lead, to additional regulations designed to reduce greenhouse gas emissions domestically and internationally.
The attention to climate change has led, and we expect it to continue to lead, to additional regulations designed to reduce greenhouse gas emissions and other emissions in various jurisdictions in which we operate.
If such a cyber-incident were to occur, it could have a material adverse effect on our business or on our financial position, results of operations or cash flows.
If such a cyber-incident were to occur, it could have a material adverse effect on our business or on our financial position, results of operations or cash flows. Our business has introduced and continues to incorporate AI to improve our processes and to further improve productivity.
We are subject to investigations and litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us. We are subject to a variety of disputes, investigations and litigation. Certain of our subsidiaries are subject to and have been involved in litigation with certain of our customers and other constituents.
We are subject to a variety of disputes, investigations and litigation. Certain of our subsidiaries are subject to and have been involved in litigation with certain of our customers and other constituents.
Further, Swiss law does not provide as much flexibility in the various terms that can attach to different classes of shares as the laws of some other jurisdictions. Swiss law also reserves for shareholder approval certain corporate actions, such as approval of dividends, over which a board of directors would have authority in some other jurisdictions.
Swiss law also reserves for shareholder approval certain corporate actions, such as approval of dividends, over which a board of directors would have authority in some other jurisdictions.
Some of these subsidiaries that have been put on notice of potential liabilities have no assets. Certain subsidiaries are subject to litigation relating to environmental damage. Our patent for dual-activity technology has been successfully challenged in certain jurisdictions. We are also subject to a number of significant tax disputes.
Some of these subsidiaries that have been put on notice of potential liabilities have no assets. Certain subsidiaries are subject to litigation relating to environmental damage. We are also subject to a number of significant tax disputes. We cannot predict the outcome of these investigations and cases or the potential costs to resolve them.
Further, disclosure of the subject matter of any investigation could adversely affect our reputation and our ability to obtain new business with potential customers, to retain existing business with our current customers, to attract and retain employees and to access the capital markets.
Further, disclosure of the subject matter of any investigation could adversely affect our reputation and our ability to obtain new business with potential customers, to retain existing business with our current customers, to attract and retain employees and to access the capital markets. - 19 - Table of Contents We are subject to investigations and litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.
Our Debt Ratings have caused some of the effects listed above, and any downgrades may cause or exacerbate, any of the effects listed above and could have an adverse effect on our business and financial condition. - 15 - Table of Contents Worldwide financial, economic and political conditions could restrict our ability to access the capital markets, reduce our flexibility to react to changing economic and business conditions and reduce demand for our services.
Our Debt Ratings have caused some of the effects listed above, and any downgrades may cause or exacerbate, any of the effects listed above and could have an adverse effect on our business and financial condition.
If this occurs, our effective tax rate on worldwide earnings for that period could increase substantially, we could be subject to assessments in previously filed returns that remain open to audit and our earnings and cash flows from operations for that period could be adversely affected. - 20 - Table of Contents Risks related to our jurisdiction of organization and governing documents As a Swiss corporation, our flexibility may be limited with respect to certain aspects of capital management AND swift implementation of certain initiatives or strategies.
If this occurs, our effective tax rate on worldwide earnings for that period could increase substantially, we could be subject to assessments in previously filed returns that remain open to audit and our earnings and cash flows from operations for that period could be adversely affected.
We cannot predict the outcome of these investigations and cases or the potential costs to resolve them. Insurance may not be applicable or sufficient in all cases, insurers may not remain solvent and policies may not be located.
Insurance may not be applicable or sufficient in all cases and insurers may not remain solvent and policies may not be located.
Risks related to taxes A change in tax laws, treaties or regulations, or their interpretation, of any country in which we have operations, are incorporated or are resident could result in a higher effective tax rate on our consolidated earnings and increase our cash tax payments.
We have limited insurance for our assets providing coverage for physical damage losses resulting from certain risks, such as terrorist acts, piracy, vandalism, sabotage, civil unrest, expropriation and acts of war, and we do not carry insurance for loss of revenues resulting from such risks. - 20 - Table of Contents Risks related to taxes A change in tax laws, treaties or regulations, or their interpretation, of any country in which we have operations, are incorporated or are resident could result in a higher effective tax rate on our consolidated earnings and increase our cash tax payments.
Actions taken under such provisions may adversely affect prevailing market prices for our shares, and could, among other things: ◾ provide that the board of directors is authorized to issue a specified number of shares, which under our current and remaining general share capital authorization as of February 11, 2025 is 12.44 percent of the share capital registered in the commercial register, and to limit or withdraw the preemptive rights of existing shareholders in various circumstances.
Actions taken under such provisions may adversely affect prevailing market prices for our shares, and could, among other things: ◾ provide that the board of directors is authorized, within the limits set forth in the Articles of Association, to issue a specified number of shares.
In addition, executive, legislative and judicial actions in the U.S. from time to time have restricted certain oil and gas activities on the OCS.
Executive, legislative and judicial actions in the U.S. from time to time have restricted certain oil and gas activities on the OCS. For example, litigation is ongoing in U.S. federal courts regarding the potential reversal of a previously ordered withdrawal of acreage from future oil and gas leasing under the OCSLA.
Accordingly, shareholders at our annual general meeting in May 2025 may be requested to approve a renewal and increase of our general share capital authorization for an additional term. Subject to certain exceptions, Swiss law also grants preemptive rights to existing shareholders to subscribe for new issuances of shares.
Our board of directors has made full use of the general share issuance authorization under Article 5, Section A of our Articles of Association by issuing 188,165,780 shares into Transocean’s treasury. Accordingly, shareholders at our annual general meeting in May 2026 may be requested to approve a renewal and increase of our general share capital authorization for an additional term.
Removed
In August 2022, for example, the U.S. enacted the Inflation Reduction Act of 2022, which made available hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
Added
Worldwide financial, economic and political conditions could restrict our ability to access capital markets, reduce our flexibility to react to changing economic and business conditions and reduce demand for our services.
Removed
Additionally, at the United Nations Climate Change Conference in the United Arab Emirates in December 2023, more than 190 governments reached a non-binding agreement to transition away from fossil fuels and encourage the growth and expansion of renewable energy.
Added
Risks related to our proposed combination with Valaris Our proposed Business combination may be delayed or not occur at all for a variety of reasons, some of which are outside our control. On February 9, 2026, Transocean and Valaris entered into the Agreement providing for the combination of Transocean and Valaris.
Removed
We have limited insurance for our assets providing coverage for physical damage losses resulting from certain risks, such as terrorist acts, piracy, vandalism, sabotage, civil unrest, expropriation and acts of war, and we do not carry insurance for loss of revenues resulting from such risks.
Added
Pursuant to the Agreement, and on the terms and subject to the conditions thereof, Transocean will acquire all of the issued and outstanding Valaris Shares in exchange for Transocean Ltd. shares at an exchange ratio of 15.235 Transocean Ltd. shares for each Valaris Share.
Removed
The general share capital authorization approved by shareholders at the May 2024 annual general meeting will expire on May 29, 2025. Our currently available authority under this general share capital authorization is equivalent to 12.44 percent of our issued share capital as of February 11, 2025.
Added
Pursuant to the Agreement, and on the terms and subject to the conditions thereof, at the time on which the order of the Supreme Court of Bermuda providing for its sanction of the Scheme of Arrangement is filed with the Registrar of Companies of Bermuda, the Business Combination will become effective and Valaris will become our wholly owned subsidiary.
Removed
At our 2009 annual general meeting, shareholders approved the repurchase of up to CHF 3.50 billion of our shares for cancellation under the share repurchase program.
Added
The board of directors of Transocean and Valaris each unanimously approved and declared advisable the Agreement and the transactions contemplated thereby, including the Business Combination. - 15 - Table of Contents Completion of the Business Combination is subject to the satisfaction or waiver of certain customary conditions set forth in the Agreement, including, but not limited to: (i) the receipt of the requisite approvals of the Valaris shareholders and the Transocean shareholders, (ii) the granting of the sanction order on terms consistent with the Agreement, (iii) the Transocean Ltd. shares issued pursuant to the Agreement having been approved for listing on the New York Stock Exchange, (iv) certain regulatory approvals having been obtained or any applicable waiting period having expired or been terminated, (v) no governmental authority within applicable jurisdictions having enacted or issued any law or order preventing or prohibiting the consummation of the Business Combination and (vi) the absence of a Transocean Material Adverse Effect or a Valaris Material Adverse Effect, each as defined in the Agreement.
Added
Therefore, the Business Combination may not be completed or may not be completed as timely as expected.
Added
Furthermore, failure to complete the Business Combination could adversely affect our business and the market price of our common shares in a number of ways, including to the extent that the current market price of Transocean Ltd. shares reflects an assumption that the Business Combination will be consummated.
Added
We may also be required to pay a termination fee in certain circumstances, as further described in the Agreement. Additionally, if the Agreement is terminated and we seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Business Combination.
Added
Efforts to complete the business combination could disrupt our relationships with third parties and employees, divert management’s attention, or result in legal proceedings, any of which could negatively impact our operating results and ongoing business.
Added
We have expended, and continue to expend, significant management time and resources in an effort to complete the Business Combination, which may have a negative impact on our ongoing business and operations. Uncertainty regarding the outcome of the Business Combination and our future could disrupt our business relationships with our existing and potential customers, suppliers and other business partners.
Added
Uncertainty regarding the outcome of the Business Combination could also adversely affect our ability to recruit and retain key personnel and other employees. The pendency of the Business Combination may lead to litigation against the parties or their directors and officers which could be distracting to management and may, in the future, require us to incur significant costs.
Added
The Agreement contains provisions that impose restrictions on Transocean’s business prior to the effective time of the business combination.
Added
The Agreement subjects Transocean and Valaris to restrictions on their respective business activities prior to the effective time, including covenants obligating each such party to continue to conduct their respective businesses in the ordinary course, to cooperate in seeking regulatory approvals and not to engage in certain specified transactions or activities without the prior consent of the other party to the Agreement.
Added
Such restrictions could prevent Transocean from pursuing certain business opportunities that arise prior to the effective time and are outside the ordinary course of business.
Added
The failure to integrate the business and operations of transocean and valaris successfully in the expected time frame may adversely affect the combined business’s future results and may result in the combined business failing to realize the anticipated benefits of the business combination.
Added
Transocean and Valaris have operated and, until the completion of the Business Combination, will continue to operate independently. Following consummation, their respective businesses may not be integrated successfully.
Added
Specifically, the combined business may not be able to achieve the cost savings and operating synergies that Transocean anticipates as a result of the Business Combination, and may face difficulty integrating personnel from the two companies, minimizing the loss of key employees, identifying and eliminating redundant functions and assets, harmonizing the companies’ operating practices, employee development and compensation programs, internal controls, and other policies, procedures and processes.
Added
If the combined company is not able to achieve these objectives and realize the anticipated benefits and synergies expected, then the combined company’s business, financial condition and operating results may be adversely affected, the combined company’s earnings per share may be diluted, the accretive effect of the Business Combination may decrease or be delayed and the share price of the combined company may be negatively impacted.
Added
Issues in the development and use of AI, combined with an uncertain regulatory environment, may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, reputational harm, liability or other adverse consequences to our business operations, all of which could adversely affect our business, financial condition and results of operations.
Added
Risks related to our jurisdiction of organization and governing documents As a Swiss corporation, our flexibility may be limited with respect to certain aspects of capital management AND swift implementation of certain initiatives or strategies.
Added
The general share capital authorization approved by shareholders at the May 2025 annual general meeting provides for a capital band that authorizes our board of directors to issue up to 188,165,780 new fully paid-in shares for general corporate purposes at any time until May 30, 2026.
Added
Subject to certain exceptions, Swiss law also grants preemptive rights to existing shareholders to subscribe for new issuances of shares. Further, Swiss law does not provide as much flexibility in the various terms that can attach to different classes of shares as the laws of some other jurisdictions.
Added
As of February 17, 2026, the board’s issuance authority under the capital band has been fully utilized and no further shares may currently be issued. However, the board’s authority to reduce the share capital within the capital band, remains in effect.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−1 removed6 unchanged
Biggest changeDuring the year ended December 31, 2024, the fair value of our debt decreased by $420 million due to the following: (a) a decrease of $1.69 billion resulting from debt retired in tender offers and redemptions, (b) a decrease of $351 million resulting from debt repaid in scheduled installments and (c) a net decrease of $275 million resulting from changes in the market prices of our outstanding debt, including the fair value adjustment to the bifurcated compound exchange feature contained in the indenture governing the 4.625% Senior Guaranteed Exchangeable Bonds, partially offset by (d) an increase of $1.77 billion resulting from the issuance of the 8.25% Senior Notes and the 8.50% Senior Notes and (e) an increase of $130 million resulting from the issuance of the 8.00% Senior Notes as partial consideration to acquire the outstanding ownership interests of Orion.
Biggest changeDuring the year ended December 31, 2025, the fair value of our debt decreased by $1.13 billion due to the following: (a) a decrease of $1.07 billion resulting from debt retired in tender offers, redemptions and repurchases, (b) a decrease of $484 million resulting from scheduled repayments and (c) a decrease of $207 million due to principal reduction of the 4.00% Exchangeable Bonds pursuant to the Exchange Agreements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Overview —We are exposed to interest rate risk, primarily associated with our long-term debt, including current maturities. Additionally, we are exposed to equity price risk related to certain of our exchangeable bonds and currency exchange rate risk related to our international operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Overview —We are exposed to interest rate risk, primarily associated with our long-term debt, including current maturities. Additionally, we are exposed to equity price risk related to our exchangeable bonds and currency exchange rate risk related to our international operations.
At December 31, 2024, a 10 percent hypothetical increase or decrease to the market price of our shares would result in a $22 million increase or $18 million decrease, respectively, to the carrying amount of the exchange feature, recorded as a component of our debt, and a corresponding adjustment to interest expense.
At December 31, 2025, a 10 percent hypothetical increase or decrease to the market price of our shares would result in a $30 million increase or $21 million decrease, respectively, to the carrying amount of the exchange feature, recorded as a component of our debt, and a corresponding adjustment to interest expense.
The following table presents information as of December 31, 2024, for each of the five years in the period ending December 31, 2029 and thereafter (in millions, except interest rate percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2026 ​ 2027 ​ 2028 ​ 2029 ​ Thereafter ​ Total Fair value Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed rate (USD) $ 714 ​ $ 541 ​ $ 1,255 ​ $ 664 ​ $ 1,276 ​ $ 2,494 ​ $ 6,944 ​ $ 6,888 ​ Average interest rate ​ ​ 6.15 % ​ 7.21 % ​ 7.74 % ​ 7.83 % ​ 7.56 % ​ 8.03 % ​ ​ ​ ​ ​ ​ At December 31, 2024 and 2023, the fair value of our outstanding debt was $6.89 billion and $7.31 billion, respectively.
The following table presents information as of December 31, 2025, for each of the five years in the period ending December 31, 2030 and thereafter (in millions, except interest rate percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ending December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ 2027 ​ 2028 ​ 2029 ​ 2030 ​ Thereafter ​ Total ​ ​ ​ Fair value Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed rate (USD) $ 458 ​ $ 435 ​ $ 612 ​ $ 1,277 ​ $ 411 ​ $ 2,493 ​ $ 5,686 ​ $ 5,755 ​ Average interest rate ​ ​ 7.26 % ​ 7.66 % ​ 7.90 % ​ 7.56 % ​ 8.75 % ​ 7.83 % ​ ​ ​ ​ ​ ​ At December 31, 2025 and 2024, the fair value of our outstanding debt was $5.76 billion and $6.89 billion, respectively.
At December 31, 2024, the fair value of the bifurcated compound exchange feature was $136 million.
The market price of our shares is the primary driver of the fair value of the exchange feature. At December 31, 2025, the fair value of the bifurcated compound exchange feature was $126 million.
Equity price risk —We are exposed to equity price risk primarily related to the bifurcated compound exchange feature contained within the indenture governing the 4.625% Senior Guaranteed Exchangeable Bonds. The market price of our shares is the primary driver of the fair value of the exchange feature.
The majority of our cash equivalents is subject to variable interest rates or short-term interest rates and such cash equivalents earn commensurately higher rates of return when interest rates increase. Equity price risk —We are exposed to equity price risk primarily related to the bifurcated compound exchange feature contained within the indenture governing the 4.625% Exchangeable Bonds.
Removed
See Notes to Consolidated Financial Statements— Note 8—Debt and Notes to Consolidated Financial Statements— Note 19—Risk Concentration . The majority of our cash equivalents is subject to variable interest rates or short-term interest rates and such cash equivalents earn commensurately higher rates of return when interest rates increase.
Added
These decreases were partially offset by the following: (a) an increase of $522 million resulting from the issuance of 7.875% Senior Guaranteed Notes and (b) a net increase of $108 million resulting from changes in the market prices of our outstanding debt. See Notes to Consolidated Financial Statements— Note 8—Debt and Notes to Consolidated Financial Statements— Note 19—Risk Concentration .

Other RIG 10-K year-over-year comparisons