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What changed in Transocean Ltd.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Transocean Ltd.'s 2023 and 2024 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 2024 report.

+407 added−420 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-21)

Top changes in Transocean Ltd.'s 2024 10-K

407 paragraphs added · 420 removed · 192 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

63 edited+35 added−11 removed44 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) (e) ​ Stacked ​ Discoverer Inspiration ​ Drillship ​ 2010 ​ 1,130 ​ 12,000 ​ 40,000 ​ (a) (b) (e) ​ Idle ​ 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) (e) ​ 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 ​ Development Driller III ​ Semisubmersible ​ 2009 ​ 1,000 ​ 7,500 ​ 37,500 ​ (a) (b) (g) ​ Idle ​ 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) (g) ​ Stacked ​ Deepwater Nautilus ​ Semisubmersible ​ 2000 ​ 1,000 ​ 8,000 ​ 30,000 ​ (g) ​ Stacked ​ Discoverer Luanda ​ Drillship ​ 2010 ​ 750 ​ 7,500 ​ 40,000 ​ (a) (b) ​ Stacked ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Harsh environment floaters (9) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transocean Norge ​ Semisubmersible ​ 2019 ​ 1,000 ​ 10,000 ​ 40,000 ​ (a) (g) (h) ​ Norwegian N.
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.
We measure our safety performance in terms of widely accepted ratios with the use of industry standards, including (a) the total recordable incident rate (“TRIR”), which represents the number of recordable work-related injuries or illnesses for every 200,000 hours worked, and (b) the lost time incident rate (“LTIR”), which measures the number of incidents that result in lost time due to work-related injuries or illnesses for every 200,000 hours worked.
We measure safety performance in terms of widely accepted ratios with the use of industry standards, including (a) the total recordable incident rate (“TRIR”), which represents the number of recordable work-related injuries or illnesses for every 200,000 hours worked, and (b) the lost time incident rate (“LTIR”), which measures the number of incidents that result in lost time due to work-related injuries or illnesses for every 200,000 hours worked.
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.
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.
The inability or other failure of our customers to fulfill their indemnification obligations, or the unenforceability of all of our contractual protections could have a material adverse effect on our consolidated financial position, results of operations or cash flows. See “ Item 1A.
The inability or other failure of our customers to fulfill their indemnification obligations, or the unenforceability of all of our contractual protections could have a material adverse effect on our financial position, results of operations or cash flows. See “ Item 1A.
FIRST Shared Values and corporate culture —Our FIRST Shared Values serve as the foundation for our corporate culture and guide us to act ethically and responsibly as we strive to deliver value for our stakeholders and to maintain a safe and respectful work environment for our people.
Corporate culture —Our FIRST Shared Values serve as the foundation for our corporate culture and guide us to act ethically and responsibly as we strive to deliver value and to maintain a safe and respectful work environment for our people.
In 2020, we deployed 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.
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.
Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements— Note 1—Business , Note 5—Revenues and Note 7—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.
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.
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, 2024, 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, 2025, 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 .
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
To optimize the competitive position of our business, we maintain a rigorous competency-based training program. Our internal training board maintains and regularly updates our training matrix to meet or exceed industry standards, and it oversees our competency assurance management system, which is accredited by the Offshore Petroleum Industry Training Organization.
To optimize the competitive position of our business, we maintain a rigorous competency-based training program. We maintain an internal training board that regularly updates our training matrix to meet or exceed industry standards, and it oversees our competency assurance management system, which is accredited by the Offshore Petroleum Industry Training Organization.
Risk Factors—Risks related to our laws, regulations and governmental compliance ;” ◾ “ Item 3. Legal Proceedings ;” ◾ “ Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Matters ;” ◾ “ Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 11—Income Taxes ;” and ◾ “ Part II.
Risk Factors—Risks related to our laws, regulations and governmental compliance ;” ◾ “ Item 3. Legal Proceedings ;” ◾ “ Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Matters ;” ◾ “Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 10—Income Taxes;” and ◾ “ Part II. Item 8.
You may also find on our website information related to our corporate governance, board committees and company code of business conduct and ethics. The SEC also maintains a website, www.sec.gov , which contains reports, proxy statements and other information regarding SEC - 7 - Table of Contents registrants, including us.
You may also find on our website information related to our corporate governance, board committees and company code of business conduct and ethics. The SEC also maintains a website, www.sec.gov , which contains reports, proxy statements and other information regarding SEC registrants, including us.
Our focus on the quality of our workforce is designed to maximize the quality of our work performance and ultimately, the value we deliver to our stakeholders. Training —We invest in our workers by providing them with the transferrable skill sets essential to advancing their professional development.
Our focus on the quality of our workforce is designed to maximize the quality of work performance and ultimately, the value we deliver to our customers and investors. Training —We invest in our workers by providing them with the transferrable skill sets essential to advancing their professional development.
Technological Innovation 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 and numerous water depth world records over the past several decades.
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.
Four of our 12 semisubmersibles are equipped with dual-activity technology and also have mooring capability. Two of these four 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.
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.
Sea ​ Transocean Barents ​ Semisubmersible ​ 2009 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (g) (i) ​ Romania ​ Transocean Enabler ​ Semisubmersible ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (g) (h) ​ Norwegian N.
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.
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.
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.
We provide various offshore training formats designed to encompass all learning styles through on-the-job, e-learning, customer-specific training, certifications, and leadership and licensing programs. Setting us apart from our competitors, we also offer unique simulation-based education, augmented by digital twin modeling, enabling our workforce to more accurately visualize equipment performance and target efficiencies.
We provide various offshore training formats designed to encompass all learning styles through on-the-job, e-learning, customer-specific training, certifications, and leadership and licensing programs. Distinguishing us from many of our competitors, we also offer unique simulation-based education augmented by digital twin modeling, enabling our workforce to visualize equipment performance and target efficiencies more accurately.
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. ” - 4 - Table of Contents 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. ” Markets Our operations are geographically dispersed in oil and gas exploration and development areas throughout the world.
We seek to maintain our competitive advantage while benefitting our local communities by offering regionally competitive compensation and benefits packages, a technically challenging work environment, global opportunities, and rotational development programs.
We seek to maintain a competitive advantage while benefitting local communities by offering regionally competitive compensation and benefits packages tailored to our workforce demographics, a technically challenging work environment, global opportunities, and rotational development programs.
With regular competency and effectiveness assessments, our highly trained crews are equipped to protect our operational integrity with the process-driven management of hazards to prevent and mitigate major accidents.
Regular competency and effectiveness assessments help to ensure that our highly trained crews are equipped to protect operational integrity with the process-driven management of hazards to prevent and mitigate major accidents.
Gulf ​ Deepwater Pontus ​ Drillship ​ 2017 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ U.S. Gulf ​ Deepwater Conqueror ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ U.S.
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 Proteus ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ U.S. Gulf ​ Deepwater Thalassa ​ Drillship ​ 2016 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ U.S.
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 Asgard ​ Drillship ​ 2014 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) ​ U.S. Gulf ​ Deepwater Invictus ​ Drillship ​ 2014 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) ​ U.S.
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.
Sea ​ Transocean Spitsbergen ​ Semisubmersible ​ 2010 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (g) (h) (i) ​ Norwegian N.
Sea ​ Transocean Spitsbergen ​ Semisubmersible ​ 2010 ​ 1,000 ​ 10,000 ​ 30,000 ​ (a) (h) (i) (j) ​ Norwegian N.
Sea ​ Transocean Encourage ​ Semisubmersible ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (g) (h) ​ Norwegian N.
Sea ​ Transocean Encourage ​ Semisubmersible ​ 2016 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (h) (i) ​ Norwegian N.
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 Worldwide workforce —As of December 31, 2023, we had a global workforce of approximately 5,800 individuals, including approximately 370 contractors, representing 53 nationalities.
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.
At December 31, 2023, we held partial ownership interests in companies organized in Belgium, the Cayman Islands, the U.S., Norway, Canada and other countries.
At December 31, 2024, we held partial ownership interests in companies organized in Belgium, the Cayman Islands, the U.S., Norway and other countries.
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.
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.
As of December 31, 2023, approximately 42 percent of our total workforce, working primarily in Norway and Brazil, 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, 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.
Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 13—Commitments and Contingencies .” Available Information Our website address is www.deepwater.com .
Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 12—Commitments and Contingencies .” Available Information Our website address is www.deepwater.com .
Gulf ​ Deepwater Atlas ​ Drillship ​ 2022 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (d) ​ U.S. Gulf ​ Deepwater Poseidon ​ Drillship ​ 2018 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (e) (f) ​ U.S.
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.
Consequently, we cannot predict the future percentage of our revenues that will be derived from particular geographic areas. As of February 14, 2024, the drilling units in our fleet, including stacked and idle rigs, but excluding rigs under construction, 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 12, 2025, the drilling units in our fleet, including stacked and idle rigs, were located in the U.S.
Twenty-three drillships and two semisubmersibles in our existing fleet are, and our drillship under construction will be, 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.
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 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, and one ultra-deepwater drillship under construction that will be, equipped with our patented dual-activity technology.
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.
Sea ​ Transocean Endurance ​ Semisubmersible ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (g) (h) ​ Australia ​ Transocean Equinox ​ Semisubmersible ​ 2015 ​ 750 ​ 1,640 ​ 28,000 ​ (a) (g) (h) ​ Australia ​ Henry Goodrich ​ Semisubmersible ​ 1985/2007 ​ 750 ​ 5,000 ​ 30,000 ​ (g) ​ Stacked ​ Paul B.
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.
At December 31, 2023, among other equity investments, we held noncontrolling equity ownership interests in (1) 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, and (2) Orion, an unconsolidated Cayman Islands exempted company that owns the harsh environment semisubmersible Transocean Norge .
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.
For the year ended December 31, 2023, our most significant customers were Shell plc (together with its affiliates, “Shell”), Equinor ASA (together with its affiliates, “Equinor”), TotalEnergies SE (together with its affiliates, “TotalEnergies”) and Petróleo Brasileiro S.A. (together with its affiliates, “Petrobras”), representing approximately 27 percent, 16 percent, 12 percent and 11 percent, respectively, of our consolidated operating revenues.
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.
As of February 14, 2024, we owned all of the drilling rigs in our fleet noted in the tables below, except for the following: (1) the ultra-deepwater floater Petrobras 10000 , which is subject to a finance lease through August 2029 and (2) the harsh environment floater Transocean Norge , which is owned through our noncontrolling equity ownership interest in Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 (28) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deepwater Titan ​ Drillship ​ 2023 ​ 1,700 ​ 12,000 ​ 40,000 ​ (a) (b) (c) ​ 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.
At December 31, 2023, our global workforce was geographically distributed in 22 countries across six continents as follows: 38 percent in North America, 25 percent in Europe, 23 percent in South America, six percent in Asia, five percent in Africa and three percent in Australia.
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.
As a socially responsible company, 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 all local regulations and a comprehensive set of internal requirements that govern our operations.
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 consider these factors, together with market conditions, length of contract, dayrate and other contract terms, when deciding whether to return a stacked rig to service. We may not return some stacked rigs to work for drilling services. Drilling units —The following tables, presented as of February 14, 2024, provide certain specifications for our rigs.
We consider these factors, together with market conditions, length of contract, dayrate and other contract terms, when deciding whether to return a stacked rig to service. We may not return some stacked rigs to work for drilling services.
The EMS is aligned to ISO 14001 and provides a framework to ensure that our worldwide operations are managed consistently and continuously in an environmentally responsible manner. We regularly assess the environmental impact of operations, focusing on the reduction of greenhouse gas emissions, operational discharges, water use and waste.
The EMS provides a framework to consistently manage our worldwide operations in an environmentally responsible manner and monitor our performance. Within this framework, we regularly assess the environmental impact of operations, focusing on the reduction of greenhouse gas emissions, operational discharges, water use and waste.
Negotiations over annual salary or other labor matters could result in higher personnel or other costs or increased operational restrictions or disruptions. The outcome of any such negotiation generally affects the market for all offshore employees, not only union members.
Negotiations for annual salary or other labor matters could result in higher personnel or other costs or increased operational restrictions or disruptions. The outcome of any such negotiation generally affects the market for all offshore employees, not only union members. A failure to reach an agreement on certain key issues could result in strikes, lockouts or other work stoppages.
At December 31, 2023, our contract backlog was approximately $9.25 billion, representing an increase of 11 percent and 40 percent, respectively, compared to the contract backlog at December 31, 2022 and 2021, which was $8.34 billion and $6.60 billion, respectively. See “ Part II. Item 7.
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.
Driven by our continued focus on safety, we developed and, on eight of our drilling units, deployed our patented HaloGuard ℠ system, which alarms, notifies and, if required, halts equipment to avoid injury to personnel who move into danger zones.
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.
Code of Integrity and Human Rights —We maintain a Code of Integrity and Human Rights Policy that applies to all our board members, executives, employees and business partners, including contractors, suppliers, vendors, investees and joint venture partners.
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.
As of February 14, 2024, we owned or had partial ownership interests in and operated 37 mobile offshore drilling units, consisting of 28 ultra-deepwater floaters and nine harsh environment floaters. Additionally, as of February 14, 2024, we were constructing one ultra-deepwater drillship.
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.
We obtain most of our drilling contracts through bidding processes in competition against other drilling services contractors and through direct negotiations with operators.
(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.
A failure to reach an agreement on certain key issues could result in strikes, lockouts or other work stoppages. - 5 - Table of Contents Attraction, development and retention —We aim to strategically cultivate a best-in-class workforce to offer the innovation, local knowledge and experience required of the world’s premier offshore drilling contractor.
Attraction, development and retention —We aim to strategically cultivate a best-in-class workforce to offer the innovation, local knowledge and experience required of the world’s premier offshore drilling contractor.
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. We typically employ our ultra-deepwater floaters to service the ultra-deepwater and deepwater sector, and we employ our harsh environment floaters to service all three sectors.
We typically employ our ultra-deepwater floaters to service the ultra-deepwater and deepwater sector, and we employ our harsh environment floaters to service all three sectors.
Seven of our drillships and our drillship under construction include hybrid energy storage systems for enhanced drill floor equipment reliability, fuel and emissions savings as well as advanced generator protection for power plant reliability. Twelve drillships in our existing fleet are outfitted with dual blowout preventers and triple liquid mud systems.
Two of our drillships are equipped with 1,700 short ton hoisting capacity and 20,000 psi blowout preventers. Seven of our drillships include hybrid energy storage systems for enhanced drill floor equipment reliability, fuel and emissions savings as well as advanced generator protection for power plant reliability.
We clearly articulate to our workforce the certifications, skills and competencies needed for each role, and workers are required to successfully complete the relevant training and attain necessary certifications prior to taking on new roles. Wellness and benefits —We offer our workforce regionally competitive medical and financial benefits, tailored to our workforce demographics.
We articulate to our workforce the certifications, skills and competencies needed for each role, and workers are required to successfully complete the relevant training and attain necessary certifications prior to taking on new roles. Safety —Our safety vision is to conduct our operations in an incident-free workplace, all the time, everywhere.
We have installed automated drilling control systems on six harsh environment floaters, which materially improves our ability to safely and efficiently deliver wells to our customers. We utilize technology and employ a data-driven approach, augmented by the size of our fleet, to expand our knowledge framework for sustainable process optimization.
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.
We continually assess and adapt our offerings and our policies, based on evolving social and technological practices, to provide a modern work environment, which is essential to attract and retain top talent, and a respectful and inclusive work environment in which our global workforce can thrive.
We design our wellness and benefits strategy under four pillars consisting of physical well-being, financial well-being, emotional well-being and social well-being, including a globally available employee assistance program. We continually assess and adapt offerings and policies to provide a modern work environment based on evolving social and technological practices, which is essential to attract and retain top talent.
We demonstrate our respect of human rights by maintaining a healthy and safe work environment, observing fair employment practices and providing competitive employment terms. Practices such as modern slavery, child labor, forced or indentured servitude, and other human rights abuses are strictly prohibited.
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.
Additionally, as of February 14, 2024, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Petrobras, Shell and Chevron Corporation (together with its affiliates, “Chevron”), representing approximately 31 percent, 25 percent and 10 percent, respectively, of our total contract backlog. See “ Item 1A.
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.
(f) Designed to accommodate a future upgrade to 20,000 psi blowout preventer(s). (g) Moored. (h) Automated drilling control. (i) Dual activity. (j) On February 15, 2024, we completed the sale of Paul B.
(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.
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 dates provided represent the expected time of completion, the year placed into service, and, if applicable, the year of the most recent upgrade.
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.
In the year ended December 31, 2023, our TRIR was 0.23 and our LTIR was 0.02, both calculations of which were based on 11.3 million labor hours. Environmental Responsibility We strive to deliver services in a manner that both minimizes the impact our business has on the environment and supports the interests of our stakeholders.
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.
We continuously seek new ways to advance our commitment to safely performing operations while simultaneously safeguarding the environment. We maintain a global Environmental Management System (“EMS”) standard that is applied 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, aligned to ISO 14001, that we apply to our rigs, offices and facilities.
Gulf of Mexico (ten units), Greece (seven units), Brazil (five units), the Norwegian North Sea (four units), Malaysia (three units), Australia (two units), Angola (one unit), Aruba (one unit), Canada (one unit), Cyprus (one unit), India (one unit) and the United Kingdom (the “U.K.”) North Sea (one unit).
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.
We also continue to develop and invest in technologies designed to optimize our performance, deliver ever improving operational integrity and reduce our greenhouse gas emissions. - 6 - Table of Contents Seven of our harsh environment semisubmersibles are designed and constructed specifically to provide highly efficient performance in harsh environments.
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.
Removed
Loyd, Jr. ​ Semisubmersible ​ 1990 ​ 750 ​ 2,000 ​ 25,000 ​ (g) (j) ​ U.K. N. Sea ​ (a) Dynamically positioned. (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) Two 15,000 psi blowout preventers.
Added
The dates provided represent the year placed into service, and, if applicable, the year of the most recent upgrade.
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Loyd, Jr. and related assets. ​ - 3 - Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hook ​ Water ​ Drilling ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ load ​ depth ​ depth ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected ​ capacity ​ capacity ​ capacity ​ ​ ​ Contracted ​ Rig category and name Type completion (short tons) (feet) (feet) Specifications location Rigs under construction (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deepwater Aquila ​ Drillship ​ 2Q24 ​ 1,400 ​ 12,000 ​ 40,000 ​ (a) (b) (c) (d) ​ Brazil ​ (a) To be dynamically positioned.
Added
Executive Leadership We have included the following information, presented as of February 11, 2025, on our executive officers for purposes of U.S. securities laws in Part I of this report in reliance on General Instruction G(3) to Form 10-K. The board of directors elects the officers of the Company, generally on an annual basis.
Removed
(b) To be equipped with our patented dual activity. (c) To be equipped with main hoisting capacity of 1,400 short tons. (d) To be equipped with one 15,000 psi blowout preventer and designed to accommodate a future 20,000 psi blowout preventer. Drilling Contracts Our offshore drilling services contracts are individually negotiated and vary in their terms and conditions.
Added
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.
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No other customers accounted for 10 percent or more of our consolidated operating revenues in the year ended December 31, 2023.
Added
Long ​ Executive Vice President and Chief Legal Officer 52 ​ Roderick J. Mackenzie ​ ​ Executive Vice President and Chief Commercial Officer ​ 49 ​ R.
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Labor rights —We respect the labor rights of all individuals in our workforce, including the right to collective bargaining.
Added
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.
Removed
We design our wellness and benefits strategy under four pillars consisting of physical well-being, financial well-being, emotional well-being and social well-being, including our globally available employee assistance program. Safety —Our safety vision is to conduct our operations in an incident-free workplace, all the time, everywhere.
Added
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.
Removed
Accordingly, we intend to reduce our greenhouse gas operating emissions intensity by 40 percent from 2019 levels by 2030. Achieving these targets will require investments over time that result in the development and implementation of new technologies, reduced fuel consumption and other initiatives that enable us to optimize power management capabilities.
Added
Thigpen also served as President, Downhole and Pumping Solutions from August 2007 to December 2012, as President of the Downhole Tools Group from May 2003 to August 2007 and as manager of the Downhole Tools Group from April 2002 to May 2003. From 2000 to 2002, Mr.
Removed
We develop and deploy industry-leading technology in the pursuit of delivering safer, more efficient and environmentally responsible drilling services. Two of our drillships are equipped with 1,700 short ton hoisting capacity and 20,000 psi blowout preventers.
Added
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.
Removed
Five drillships in our existing fleet are designed to accept 20,000 psi blowout preventers in the future.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+3 added−7 removed78 unchanged
Biggest changeOur 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.
Biggest changeMoreover, 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.
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 future events that would be largely out of our control.
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.
A disruption in the deliveries from our suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and equipment or ancillary services could adversely affect our ability to meet our commitments to customers, adversely impact our operations, increase our operating costs and result in increases in rig downtime and delays in the repair and maintenance of our fleet.
A disruption in the deliveries from our suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and equipment, ancillary services or subcontracted services could adversely affect our ability to meet our commitments to customers, adversely impact our operations, increase our operating costs and result in increases in rig downtime and delays in the repair and maintenance of our fleet.
If we raise funds by issuing equity securities or other securities that are convertible into equity securities, existing shareholders may experience dilution. Our failure to obtain the funds for necessary future capital expenditures could have a material adverse effect on our business and on our financial position, results of operations and cash flows.
If we raise funds by issuing equity securities or other securities that are convertible into equity securities, existing shareholders may experience dilution. Our failure to obtain the funds for necessary future capital and operating expenditures could have a material adverse effect on our business and on our financial position, results of operations and cash flows.
In addition, delayed delivery of our newbuild units or other rigs undergoing shipyard projects would impact contract commencement, resulting in a loss of revenues we could earn, and may also cause customers to terminate or shorten the term of the drilling contract for the rig pursuant to applicable late delivery clauses.
In addition, delayed delivery of newbuild units or other rigs undergoing shipyard projects would impact contract commencement, resulting in a loss of revenues we could earn, and may also cause customers to terminate or shorten the term of the drilling contract for the rig pursuant to applicable late delivery clauses.
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 capital expenditures to increase or require us to make additional unforeseen capital expenditures.
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.
Such impacts may include, among others: ◾ causing a temporary shut-down of operations in case of an outbreak on one or more of our rigs; - 10 - Table of Contents ◾ 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.
Such 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.
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 our other 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 given recent ESG-influenced trends among many financial intermediaries, investors and other capital markets participants in 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; ◾ 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.
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; ◾ failure 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; ◾ complications arising from pandemics and epidemics, such 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; ◾ 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.
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 production levels, productive spare capacity and pricing among its members; ◾ 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 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.
We may not be able to realize the full amount of our contract backlog due to events beyond our control. In addition, some of our customers have experienced liquidity issues in the past, including some recently, and these liquidity issues could be experienced again if commodity prices decline for an extended period of time.
We may not be able to realize the full amount of our contract backlog due to events beyond our control. In addition, some of our customers have experienced liquidity issues in the past, and these liquidity issues could be experienced again if commodity prices decline for an extended period of time.
As part of our business strategies, We may pursue opportunities to strengthen and broaden our business that include acquisitions of businesses or drilling rigs, mergers or joint ventures or other investments, and such transactions would present various risks and uncertainties.
As part of our business strategies, We may pursue opportunities to strengthen, streamline or broaden our business that include acquisitions or dispositions of businesses or drilling rigs, mergers or joint ventures or other investments, and such transactions would present various risks and uncertainties.
During periods of low oil and natural gas price levels, new construction has resulted in an oversupply of rigs and has caused a subsequent decline in dayrates and rig utilization rates, sometimes for extended periods of time. In - 8 - Table of Contents an oversupplied market, we may have limited bargaining power to negotiate on more favorable terms.
During periods of low oil and natural gas price levels, new construction has resulted in an oversupply of rigs and has caused a subsequent decline in dayrates and rig utilization rates, sometimes for extended periods of time. In an oversupplied market, we may have limited bargaining power to negotiate on more favorable terms.
We may pursue transactions that involve the acquisition of businesses or assets, mergers or joint ventures or other investments that we believe will enable us to further strengthen or broaden our business.
We may pursue transactions that involve the acquisition or disposition of businesses or assets, mergers or joint ventures or other investments that we believe will enable us to further strengthen, streamline or broaden our business.
If our sustainability assumptions or practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively affected.
If our sustainability assumptions or practices do not meet investor, regulatory or other relevant expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively affected.
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 when there is a weak commodity price environment.
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.
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 - 13 - Table of Contents natural gas and, ultimately, the demand for our services and products from our services.
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 business may face increased scrutiny from investors and other stakeholders 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, commitment targets, and other objectives that we announce, and our methodologies and timelines for pursuing them.
Any such transaction would be evaluated on a case-by-case basis, and the consummation thereof would be dependent upon several factors, including identifying suitable companies, businesses or assets that align with our business strategies, reaching agreement with the potential counterparties on acceptable terms, the receipt of any applicable regulatory and other approvals, and other conditions.
Any such transaction would be evaluated on a case-by-case basis, and the consummation thereof would be dependent upon several factors, including identifying suitable companies, businesses or assets that align, or no longer align, with our business strategies, reaching agreement with the potential counterparties on acceptable terms, the receipt of any applicable regulatory and other approvals, counterparties fulfilling contractual obligations and other conditions.
As of December 31, 2023, approximately 42 percent of our total workforce, working primarily in Norway and Brazil, 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, 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.
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 during 2020.
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.
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.
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.
We also rely on the supply of ancillary services, including supply boats and helicopters. Our reliance on our suppliers, manufacturers and service providers to secure equipment, parts, components and sub-systems used in our operations exposes us to volatility in the quality, prices and availability of such items.
We also rely on the supply of ancillary services, including supply boats and helicopters and subcontracted services, including casing and managed pressure drilling services. Our reliance on our suppliers, manufacturers and service providers to secure equipment, parts, components and sub-systems used in our operations exposes us to volatility in the quality, prices and availability of such items.
These expenditures could increase as a result of changes in the cost of labor and materials, requirements of customers, the size of our fleet, the cost of replacement parts for existing rigs, the geographic location of the rigs and the length of drilling contracts.
These expenditures could increase because of changes in the cost of labor and materials, requirements of customers, the cost of replacement parts for existing rigs, the size of our fleet, the geographic location of the rigs and the length of drilling contracts.
Demand for our services depends on these activities and related expenditure levels that are directly affected by trends in oil and, to a lesser extent, natural gas prices.
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.
The ability of each of our counterparties to perform its obligations under a contract with us, including indemnity obligations, will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the offshore drilling industry, prevailing prices for oil and natural gas, the overall financial condition of the counterparty, the dayrates received and the level of expenditures necessary to maintain drilling activities.
The ability of each of our counterparties to perform its obligations under a contract with us, including indemnity obligations, depends on a number of factors that are beyond our control and may include, among other things, conditions of the economy in general or of the offshore drilling industry in particular, prevailing prices for oil and natural gas, the overall financial condition of the counterparty, the dayrates received and the level of expenditures necessary to maintain drilling activities.
During periods of depressed market conditions, such as we have recently experienced, we are subject to an 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 in order to reduce their capital expenditures.
If we are unable to obtain drilling contracts for our uncontracted rigs, whether due to a prolonged offshore drilling market downturn, a delayed or muted recovery of such market or otherwise, it may have an adverse effect on our results of operations and cash flows.
If we are unable to obtain drilling contracts for our uncontracted rigs, whether due to a prolonged offshore drilling market downturn, a delayed or muted recovery of such market or otherwise, it may have an adverse effect on our results of operations and cash flows. Our current backlog of contract drilling revenues may not be fully realized.
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.
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.
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, 2023, our total debt was $7.41 billion, of which $2.34 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, 2024, our total debt was $6.88 billion, of which $2.36 billion was secured.
These transactions involve various risks, including among others, (i) difficulties related to integrating or managing applicable parts of an acquired business 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 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, and (v) 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.
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.
Changes in offshore drilling technology, customer requirements for new or upgraded equipment and competition within our industry may require us to make significant capital expenditures in order to maintain our competitiveness and to achieve our intention to reduce our greenhouse gas emission intensity.
Changes in offshore drilling technology, customer requirements for new or upgraded equipment and competition within our industry may require us to make significant expenditures in order to maintain our competitiveness and fund efforts to reduce our greenhouse gas emissions.
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 markets in which we compete experience fluctuations in the demand for drilling services.
We have a bank credit agreement (as amended, the “Secured Credit Facility”), which is currently undrawn, the borrowings under which would be secured and guaranteed by certain of our subsidiaries.
We have a Secured Credit Facility, which is currently undrawn, the borrowings under which would be secured and guaranteed by certain of our subsidiaries.
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.
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.
For the year ended December 31, 2023, our most significant customers were Shell, Equinor, TotalEnergies and Petrobras, representing approximately 27 percent, 16 percent, 12 percent and 11 percent, respectively, of our consolidated operating revenues.
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.
As a result, we generally retain the risk for any losses in excess of these limits. 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.
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.
As of February 14, 2024, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Petrobras, Shell and Chevron, representing approximately 31 percent, 25 percent and 10 percent, respectively, of our total contract backlog.
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.
Our contract backlog includes amounts associated with our one contracted newbuild unit that is currently under construction. 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, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
Excess amounts of local currency may also be exposed to the risk of currency exchange losses. 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 other esg matters could adversely affect our business, cost of capital and the price of our stock and other securities.
In the future, market conditions may not justify these expenditures or enable us to operate our older rigs profitably during the remainder of their economic lives. - 9 - Table of Contents If we are unable to fund capital expenditures with our cash flows from operations or proceeds from sales of non-strategic assets, we may be required to either incur additional borrowings or raise capital through the sale of debt or equity securities, or additional financing arrangements with banks or other capital providers.
If we are unable to fund such expenditures with our cash flows from operations or proceeds from sales of non-strategic assets, we may be required to either incur additional borrowings or raise capital through the sale of debt or equity securities, or additional financing arrangements with banks or other capital providers.
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.
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.
As a result, there has been a proliferation of ESG focused investment funds seeking ESG oriented investment products. If we or our securities are unable to meet the sustainability ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us.
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.
However, pollution and environmental risks generally are not completely insurable. If a significant accident or other event occurs that is not fully covered by our insurance or by an enforceable or recoverable indemnity, the occurrence could adversely affect our financial position, results of operations or cash flows.
If a significant accident or other event occurs that is not fully covered by our insurance or by an enforceable or recoverable indemnity, the occurrence could adversely affect our financial position, results of operations or cash flows. The amount of our insurance may also be less than the related impact on enterprise value after a loss.
We maintain per occurrence deductibles - 11 - Table of Contents that generally range up to $10 million for various third-party liabilities, and we self-insure $50 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.
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.
The amount of our insurance may also be less than the related impact on enterprise value after a loss. 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.
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 ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions. As of February 14, 2024, we have 13 stacked or idle rigs. We also have three existing drilling contracts for our rigs that are currently operating, which are scheduled to expire before December 31, 2024.
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.
As of February 14, 2024, we have 13 uncontracted rigs, of which six have been out of service for greater than five years, and these rigs may remain out of service for extended periods of time.
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.
We have a variety of shipyard projects underway, at any given time, for our existing rigs at any given time, and as of February 14, 2024, we were constructing one ultra-deepwater drillship.
Our shipyard projects and operations are subject to delays and cost overruns. At any given time, we have a variety of shipyard projects underway for our existing rigs.
Legislation has been introduced in the U.S. Congress that could encourage additional unionization efforts in the U.S., as well as increase the chances that such efforts succeed.
Legislation has from time to time been, and may continue to be, introduced in the U.S. Congress that could encourage additional unionization efforts in the U.S., as well as increase the chances that such efforts succeed. Additional unionization efforts, if successful, new collective bargaining agreements or work stoppages could materially increase our labor costs and operating restrictions.
Our ability to achieve any stated goal, commitment target, or objective, including with respect to emissions intensity reduction, 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, 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.
Members of the investment community are also increasing their focus on environmental, social and governance (“ESG”) practices and disclosures, including those related to greenhouse gas emissions and climate change, in the energy industry in particular, and diversity and inclusion among public companies more generally.
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.
The termination payment associated with the drilling contract would not fully compensate us for the early termination of the contract.
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.
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. We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our commitment target to reduce greenhouse gas emissions operating intensity.
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.
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Our current backlog of contract drilling revenues may not be fully realized. At February 14, 2024, our contract backlog was approximately $9.01 billion.
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In the future, market conditions may not justify these expenditures or enable us to operate our older rigs profitably during the remainder of their economic lives.
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We may be subject in the future to additional reporting requirements that are developing in response to such increased focus and, as a result, we may face increasing pressure regarding our ESG disclosures and practices. Additionally, members of the investment community may screen companies such as ours for ESG sustainability performance before investing in our stock.
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Additionally, ESG-focused investment funds seeking ESG-oriented investment products screen companies such as ours for ESG sustainability performance before investing.
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We generally have no hull and machinery insurance coverage for damages caused by named storms in the U.S. Gulf of Mexico.
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We also retain the risk for any liability that exceeds our excess liability coverage. However, pollution and environmental risks generally are not completely insurable.
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In addition, we could decide to retain more risk in the future, resulting in higher risk of losses, which could be material. 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.
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Such payments may not, however, fully compensate us for the loss of the contract. In the third quarter of 2023, as the most recent example, Development Driller III concluded the activities contemplated in its drilling contract prior to the end of the contract’s firm term that was previously expected early in the fourth quarter of 2023.
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Additional unionization efforts, if successful, new collective bargaining agreements or work stoppages could materially increase our labor costs and operating restrictions. - 12 - Table of Contents Our shipyard projects and operations are subject to delays and cost overruns.
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Statements related to these goals, commitment targets and objectives reflect our current intentions and do not constitute a guarantee that they will be achieved. 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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeGiven the rapid evolution of cyber-related attack techniques, cybersecurity risks associated with our information technology systems and the systems of our customers and vendors continue to grow. Notwithstanding our cybersecurity management processes, a future cybersecurity incident could have a material adverse effect on our business or on our financial position, results of operations or cash flows. See “Item 1A.
Biggest changeNotwithstanding our cybersecurity management processes, a future cybersecurity incident could have a material adverse effect on our business or on our financial position, results of operations or cash flows. See “ Item 1A.
Risk 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 .” - 21 - Table of Contents Governance We involve multiple levels of oversight as a part of our approach to cybersecurity risk management.
Risk 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.
Our board of directors oversees our enterprise risk register and cybersecurity program, including related policies and procedures. As part of this oversight, the audit committee of our board of directors receives regular status reports and updates from our management team and conducts periodic executive sessions with our Chief Information Officer.
Our board of directors oversees our enterprise risk register and cybersecurity program, including related policies and procedures. As part of this oversight, the audit committee of our board of directors receives regular status reports and updates from our management team and conducts periodic executive sessions with our Vice President, Information Technology.
In addition, our Chief Information Officer, who has more than 40 years of industry experience and over 20 years of experience with the development, training and controls of effective global enterprise cybersecurity programs, oversees the implementation and compliance of our cybersecurity program and mitigation of information security related risks.
In addition, our Vice President, Information Technology, who has more than 20 years of industry experience and over 25 years of experience with the development, training and controls of effective global enterprise cybersecurity programs, oversees the implementation and compliance of our cybersecurity program and mitigation of information security related risks.
Additionally, we maintain an experienced information technology team at the employee level that supports our Chief Information Officer 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 ” 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. - 22 - Table of Contents Item 2. Properties The description of our property included under “ Item 1. Business —Drilling Fleet” is incorporated by reference herein.
We maintain offices, land bases and other facilities worldwide, most of which we lease, including principal executive offices in Steinhausen, Switzerland, and corporate offices in Houston, Texas, and the Cayman Islands. We maintain additional offices and bases in various countries in North America, Europe, South America, Asia, Africa and Australia.
We maintain office spaces, land bases and other facilities worldwide, most of which we rent or lease, including principal executive offices in Steinhausen, Switzerland, and corporate offices in Houston, Texas, and Bermuda. We maintain additional facilities in various countries in North America, Europe, South America, Asia, Africa and Australia.
In addition to security measures for third-party vendors, we require onboarding orientation and periodic training covering cybersecurity and information management for all employees and board members and conduct regular cybersecurity awareness campaigns.
In addition to establishing security measures for vendors, we require onboarding orientation and periodic training for all employees and board members that focuses on cybersecurity and information management, and we conduct regular cybersecurity awareness campaigns.
As part of this exercise, mitigating measures are planned and implemented into action as necessary. As an additional feature of our cybersecurity risk management process, we have engaged an external third-party service provider to support our cybersecurity team and perform certain periodic external evaluations in addition to the assessments and network penetration tests we perform internally.
As part of this exercise, mitigating measures are planned and implemented into action as necessary. As an additional feature of our cybersecurity risk management process, we have engaged an external service provider to support our cybersecurity team by performing penetration tests and periodic external security evaluations.
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Given the rapid evolution of cyber-related attack techniques, including through the use of AI, cybersecurity risks associated with our information technology systems and the systems of our customers and vendors continue to grow.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThrough the process of monitoring and proactive investigation, we strive to ensure no violation of our policies, Code of Integrity or law has occurred, or will occur; however, we can provide no assurance as to the outcome of these matters.
Biggest changeWe evaluate matters on a case-by-case basis, investigate allegations in accordance with our policies and cooperate with applicable governmental authorities. Through the process of monitoring and proactive investigation, we strive to ensure no violation of our policies, Code of Integrity or law has occurred, or will occur; however, we can provide no assurance as to the outcome of these matters.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Matters—Regulatory Matters ” in our annual report on Form 10-K. We are also involved in various tax matters as described in “ Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 11—Income Taxes ” and in “ Part II. Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Matters—Regulatory Matters ” in our annual report on Form 10-K. We are also involved in various tax matters as described in “ Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 10—Income Taxes ” and in “ Part II. Item 7.
We do not believe that the enforcement of the Consent Decree would have a material adverse effect on our consolidated financial position, results of operations or cash flows.
We do not believe that the enforcement of the Consent Decree would have a material adverse effect on our financial position, results of operations or cash flows.
At the DOJ’s invitation, in an effort to resolve the matter, we initiated settlement discussions with the DOJ, which concluded with the execution of a civil consent decree by and between the DOJ, EPA, and TODDI, effective January 6, 2024 (the “Consent Decree”), that resolved the claims of the DOJ based upon the alleged violations of our Permit and the CWA.
At the DOJ’s invitation, in an effort to resolve the matter, we initiated settlement discussions with the DOJ, which concluded with the execution of a civil consent decree by and between the DOJ, EPA, and TODDI, effective January 3, 2024 (the “Consent Decree”), that resolved the claims of the DOJ based upon the alleged violations of our Permit and the CWA.
As of December 31, 2023, 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 consolidated financial position, results of operations or cash flows.
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.
Item 3. Legal Proceedings We have certain actions, claims and other matters pending as discussed and reported in “ Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 13—Commitments and Contingencies ” and “ Part II. Item 7.
Item 3. Legal Proceedings We have certain actions, claims and other matters pending as discussed and reported in “ Part II. Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 12—Commitments and Contingencies ” and “ Part II. Item 7.
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We evaluate - 22 - Table of Contents matters on a case-by-case basis, investigate allegations in accordance with our policies and cooperate with applicable governmental authorities.
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Item 4. Mine Safety Disclosures Not applicable. ​ PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures Not applicable. - 23 - Table of Contents Information About Our Executive Officers We have included the following information, presented as of February 14, 2024, on our executive officers for purposes of U.S. securities laws in Part I of this report in reliance on General Instruction G(3) to Form 10-K.
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Item 4. Mine Safety Disclosures 23 ​ ​ ​ PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 23 Item 6. Reserved 25 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.
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The board of directors elects the officers of the Company, generally on an annual basis. There is no family relationship between any of our executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Age as of ​ Officer ​ Office February 14, 2024 Jeremy D.
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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. Other Information 70
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Thigpen (a) Chief Executive Officer 49 ​ Keelan Adamson (a) ​ President and Chief Operating Officer ​ 54 ​ Howard E. Davis ​ ​ Executive Vice President, Chief Administrative Officer and Chief Information Officer ​ 65 ​ Brady K. Long ​ Executive Vice President and General Counsel 51 ​ Mark L.
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Mey (a) Executive Vice President and Chief Financial Officer 60 ​ David Tonnel ​ Senior Vice President and Chief Accounting Officer 54 ​ (a) 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.
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Before joining the Company in this position in April 2015, Mr. Thigpen served as Senior Vice President and Chief Financial Officer at National Oilwell Varco, Inc. from December 2012 to April 2015. At National Oilwell Varco, Inc., Mr.
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Thigpen also served as President, Downhole and Pumping Solutions from August 2007 to December 2012, as President of the Downhole Tools Group from May 2003 to August 2007 and as manager of the Downhole Tools Group from April 2002 to May 2003. From 2000 to 2002, Mr.
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Thigpen served as the Director of Business Development and Special Assistant to the Chairman for National Oilwell Varco, 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.
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Keelan Adamson is President and Chief Operating Officer of the Company. Before being named to his current position in February 2022, Mr.
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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.
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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.
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In addition to several management assignments in the U.K., Asia, and Africa, he also held leadership roles in Sales and Marketing, Well Construction and Technology, and as Managing Director for operations in North America, Canada and Trinidad. Mr.
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Adamson earned a bachelor's degree in Aeronautical Engineering from The Queens University of Belfast and completed the Advanced Management program at Harvard Business School in 2016. Howard E. Davis is Executive Vice President, Chief Administrative Officer and Chief Information Officer of the Company. Before joining the Company in this position in August 2015, Mr.
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Davis served as Senior Vice President, Chief Administrative Officer and Chief Information Officer of National Oilwell Varco, Inc. from March 2005 to April 2015 and as Vice President, Chief Administrative Officer and Chief Information Officer from August 2002 to March 2005. Mr.
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Davis earned a bachelor’s degree from University of Kentucky in 1980, and he completed the Advanced Management Program at Harvard Business School in 2005. Brady K. Long is Executive Vice President and General Counsel of the Company. Before being named to his current position in March 2018, Mr.
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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.
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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.
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Long earned a Bachelor of Arts degree from Brigham Young University in 1996, a Juris Doctorate degree from the University of Texas School of Law in 1999 and an Executive LLM in Taxation from New York University in 2019. Mark L. Mey is Executive Vice President and Chief Financial Officer of the Company.
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Before joining the Company in this position in May 2015, Mr. Mey served as Executive Vice President and Chief Financial Officer of Atwood Oceanics, Inc. from January 2015 to May 2015, prior to which he served as Senior Vice President and Chief Financial Officer from August 2010. Mr.
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Mey was director of Transocean Partners LLC from June 2015 until December 2016. He served as Director, Senior Vice President and Chief Financial Officer of Scorpion Offshore Ltd. from August 2005 to July 2010. Prior to 2005, Mr. Mey held various senior financial and other roles in the drilling and financial services industries, including 12 years with Noble Corporation.
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He earned an Advanced Diploma in Accounting and a Bachelor of Commerce degree from the University of Port Elizabeth in South Africa in 1985, and he is a chartered accountant. Additionally, Mr. Mey completed the Harvard Business School Executive Advanced Management Program in 1998. David Tonnel is Senior Vice President and Chief Accounting Officer.
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Before being named to his current position in April 2017, he served as Senior Vice President, Supply Chain and Corporate Controller from October 2015 to April 2017, as Senior Vice President, Finance and Controller from March 2012 to October 2015 and as Senior Vice President of the Europe and Africa Unit from June 2009 to March 2012. Mr.
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Tonnel served as Vice President of Global Supply Chain from November 2008 to June 2009, as Vice President of Integration and Process Improvement from November 2007 to November 2008, and as Vice President and Controller from February 2005 to November 2007.
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Prior to February 2005, he served in various financial roles, including Assistant Controller; Finance Manager, Asia Australia Region; and Controller, Nigeria. Mr. Tonnel joined the Company in 1996 after working for Ernst & Young in France as Senior Auditor. Mr.
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Tonnel earned a Master of Science degree in Management from HEC in Paris, France in 1991. - 24 - Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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 14, 2024, we had 809,030,846 shares outstanding and 4,694 holders of record of our shares.
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.
Share repurchase program —In May 2009, at our annual general meeting, our shareholders approved and authorized our board of directors, at its discretion, to repurchase for cancellation any amount of our shares for an aggregate purchase price of up to CHF 3.50 billion. On February 12, 2010, our board of directors authorized our management to implement the share repurchase program.
Share repurchase program —In May 2009, at our annual general meeting, shareholders approved and authorized our board of directors, at its discretion, to repurchase for cancellation any amount of our shares for an aggregate purchase price of up to CHF 3.50 billion. On February 12, 2010, our board of directors authorized our management to implement the share repurchase program.
Department of the Treasury released proposed regulations under the Inflation Reduction Act, 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 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.
At December 31, 2023, 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 $3.85 billion. We intend to fund any repurchases using available cash balances and cash from operating activities.
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.
Switzerland has entered into bilateral treaties for the avoidance of double taxation with respect to income taxes with numerous countries, including the United States (“U.S.”), whereby under certain circumstances all or part of the withholding tax may be refunded. The procedures for claiming treaty refunds, and the time frame required for obtaining a refund, may differ from country to country.
Switzerland has entered into bilateral treaties for the avoidance of double taxation with respect to income taxes with numerous countries, including the U.S., whereby under certain circumstances all or part of the withholding tax may be refunded. The procedures for claiming treaty refunds, and the time frame required for obtaining a refund, may differ from country to country.
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 (a) or programs (in millions ) (a) October 2023 ​ — ​ $ — ​ — $ 3,855 ​ November 2023 ​ — ​ ​ — ​ — ​ ​ 3,855 ​ December 2023 ​ — ​ ​ — ​ — ​ ​ 3,855 ​ Total ​ — ​ $ — ​ — $ 3,855 ​ ​ - 26 - Table of Contents Item 6.
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 ​ ​ ​
Evidence that the withholding tax was withheld at the source must also be included. - 25 - Table of Contents Stamp duties in relation to the transfer of shares —The purchase or sale of our shares may be subject to Swiss federal stamp taxes on the transfer of securities irrespective of the place of residency of the purchaser or seller if the transaction takes place through or with a Swiss bank or other Swiss securities dealer, as those terms are defined in the Swiss Federal Stamp Tax Act and no exemption applies in the specific case.
Stamp duties in relation to the transfer of shares —The purchase or sale of our shares may be subject to Swiss federal stamp taxes on the transfer of securities irrespective of the place of residency of the purchaser or seller if the transaction takes place through or with a Swiss bank or other Swiss securities dealer, as those terms are defined in the Swiss Federal Stamp Tax Act and no exemption applies in the specific case.
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.
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.
Based on the number of shares held as treasury shares as of February 14, 2024, 5.89 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 11, 2025, 3.42 percent of our issued shares could be repurchased for purposes of retention as additional treasury shares.
Consequently, we expect that a substantial amount of any potential future distributions may be exempt from Swiss withholding tax.
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.
As of February 14, 2024, Transocean Inc., our wholly owned subsidiary, held as treasury shares 4.11 percent of our issued 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.
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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.
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Evidence that the withholding tax was withheld at the source must also be included.
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On December 31, 2023, the aggregate amount of par value of our outstanding shares was CHF 80.9 million, equivalent to approximately $96.2 million, and the aggregate amount of qualifying additional paid-in capital of our outstanding shares was CHF 14.4 billion, equivalent to approximately $17.1 billion.
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If the transaction does not involve cash consideration, the transfer stamp duty is computed on the basis of the market value of the consideration.
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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.
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As of February 14, 2024, we owned or had partial ownership interests in and operated 37 mobile offshore drilling units, consisting of 28 ultra-deepwater floaters and nine harsh environment floaters. Additionally, as of February 14, 2024, we were constructing one ultra-deepwater drillship.
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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.
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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.
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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.
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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.
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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.
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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, 2023 and 2022.
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For a discussion, including comparisons, of our results of operations and liquidity and capital resources for the years ended December 31, 2022 and 2021, see “Part II. Item 7.
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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, 2022 , filed with the United States (“U.S.”) Securities and Exchange Commission on February 23, 2023.
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Significant Events Fleet expansion —In May 2023, we completed the construction of and placed into service the ultra-deepwater floater Deepwater Titan , the first drillship equipped with two 20,000 psi blowout preventers. Additionally, in September 2023, we issued 11.9 million Transocean Ltd. shares with an aggregate value of $99 million to acquire the outstanding ownership interests of Liquila Ventures Ltd.
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(together with its subsidiaries, “Liquila”), a previously unconsolidated variable interest entity that is constructing the ultra-deepwater drillship Deepwater Aquila , and as a result, Liquila became our wholly owned subsidiary.
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See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Secured debt issuance —In January 2023, we issued $525 million aggregate principal amount of 8.375% senior secured notes due February 2028 (the “8.375% Senior Secured Notes”), and we received $516 million aggregate cash proceeds, net of issue costs.
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In January 2023, we issued $1.175 billion aggregate principal amount of 8.75% senior secured notes due February 2030 (the “8.75% Senior Secured Notes”), and we received $1.148 billion aggregate cash proceeds, net of issue costs.
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In October 2023, we issued $325 million aggregate principal amount of 8.00% senior secured notes due September 2028 (the “8.00% Senior Secured Notes”), and we received $319 million aggregate cash proceeds, net of issue costs.
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See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Early debt retirement —In January 2023, in connection with the issuance of the 8.75% Senior Secured Notes, we made an aggregate cash payment of $1.159 billion, including a make-whole premium, to redeem the remaining outstanding $311 million, $240 million, $250 million, and $336 million aggregate principal amount of the 5.875% senior secured notes due January 2024, the 7.75% senior secured notes due October 2024, the 6.25% senior secured notes due December 2024 and the 6.125% senior secured notes due August 2025, respectively.
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In the year ended December 31, 2023, we made a cash payment of $243 million to redeem an equivalent aggregate principal amount of the outstanding 5.375% senior secured notes due May 2023.
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See “— Liquidity and Capital Resources—Sources and uses of liquidity .” Exchanged bonds —In the year ended December 31, 2023, holders of the outstanding $238 million aggregate principal amount of the 2.50% senior guaranteed exchangeable bonds due January 2027 (the “2.50% Senior Guaranteed Exchangeable Bonds”) exchanged such bonds under the terms of the governing indenture, and as part of the transactions, we delivered 38.6 million Transocean Ltd. shares.
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In October 2023, our wholly owned subsidiary, Transocean Inc., entered into individually negotiated agreements with holders of $60 million and $41 million aggregate principal amount of the 4.00% senior guaranteed exchangeable bonds due December 2025 (the “4.00% Senior Guaranteed Exchangeable Bonds”) and the 4.625% senior guaranteed exchangeable bonds due September 2029 (the “4.625% Senior Guaranteed Exchangeable Bonds”), respectively and, as part of the transactions, we delivered 26.5 million Transocean Ltd. shares to such holders.
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See “— Liquidity and Capital Resources—Sources and uses of liquidity .” - 27 - Table of Contents Asset disposal and investment in unconsolidated affiliate —In February 2023, we made a cash contribution of $10 million and a non-cash contribution of the ultra-deepwater floater Ocean Rig Olympia , and related assets, with an estimated fair value of $85 million, in exchange for an equity ownership interest in Global Sea Mineral Resources NV (together with its subsidiaries, “GSR”).
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In the year ended December 31, 2023, we recognized a loss of $169 million, which had no tax effect, associated with the disposal of the rig and related assets. See “— Operating Results ,” “— Liquidity and Capital Resources—Sources and uses of liquidity ”.
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Impairment and disposal of assets held for sale —In the year ended December 31, 2023, we recognized an aggregate loss of $57 million, which had no tax effect, associated with the impairment of the harsh environment floaters Paul B.
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Loyd, Jr. and Transocean Leader and related assets, which we determined were impaired at the time that we classified the assets as held for sale. On February 15, 2024, we completed the sale of Paul B. Loyd, Jr. and Transocean Leader and related assets.
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See “— Operating Results ” and “— 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, which remain less economical versus hydrocarbons.
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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.
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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.
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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.
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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.
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Although the price for oil may continue to exhibit volatility in response to several 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 are robustly supportive of investment in deepwater and harsh environment exploration and development projects.
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Significantly reduced offshore contracting activity during the previous downcycle has also resulted in a much 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.
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In recent quarters, marketable supply and demand for deepwater and harsh environment rigs has become more balanced. Customers are now 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.
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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 ultra-deepwater geographic sector.
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Several new exploration and development programs have commenced as our customers return their focus to reserve replacement. Consequently, tendering activity improved meaningfully during 2023 and several multi-year tenders and direct negotiations for work in Brazil, West Africa, North America and Australia were awarded. Many tenders remain active and are expected to be awarded in the first half of 2024.
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South America, the Gulf of Mexico and, increasingly, Africa are key ultra-deepwater market sectors. In the last two years, we observed sustained increases in dayrates for projects in the U.S. Gulf of Mexico and Brazil. We continue to see these trends expand to other deepwater sectors.
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In Norway, the largest market for harsh environment rigs, we anticipate demand will accelerate and extend through at least 2027, primarily due to previously enacted Norwegian tax incentive programs. Several rigs have departed the region to work in other emerging harsh environment regions that require high-specification, high-efficiency semisubmersibles.
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Contract durations, including subsequent extensions, on most of these units could make them unavailable to relocate for the foreseeable future. We believe that these and other factors affecting supply and demand for drilling rigs are likely to have a favorable influence on dayrates and contracting terms as competition increases for high-specification, high-efficiency semisubmersibles.
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As we project that this increased demand for both our asset groups will be sustained in the coming years, and as there are now fewer high-specification offshore drilling rigs capable of operating in these markets, we believe this demand may prompt the reactivation of cold-stacked rigs and the delivery of remaining stranded newbuild assets. - 28 - Table of Contents As of February 14, 2024, our contract backlog was $9.01 billion compared to $9.40 billion as of October 18, 2023.
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The risks of drilling project delays, contract renegotiations and contract terminations and cancellations remain low as oil prices have stayed at levels that are supportive of investment in deepwater and harsh environment projects. Fleet status —We refer to the availability of our rigs in terms of the uncommitted fleet rate.
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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.
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The uncommitted fleet rates exclude the effect of priced options.
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As of February 14, 2024, our uncommitted fleet rates for each of the five years in the period ending December 31, 2028 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 Uncommitted fleet rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 47 % ​ 58 % ​ 69 % ​ 79 % ​ 92 % ​ Harsh environment floaters ​ 23 % ​ 37 % ​ 69 % ​ 93 % ​ 100 % ​ Performance and Other Key Indicators Contract backlog —We believe our industry leading contract backlog sets us apart from the competition and provides indicators of our future revenue-earning opportunities.
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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 significant to our contract drilling revenues.
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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.
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The contract backlog for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ February 14, ​ October 18, ​ February 9, ​ 2024 2023 2023 ​ ​ (in millions) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 6,951 $ 7,426 $ 7,378 ​ Harsh environment floaters ​ ​ 2,057 ​ ​ 1,969 ​ ​ 1,159 ​ Total contract backlog $ 9,008 $ 9,395 $ 8,537 ​ Our contract backlog includes only firm commitments, including amounts associated with our contracted newbuild units under construction, which are represented by signed drilling contracts or, in some cases, by other definitive agreements awaiting contract execution.
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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.
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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.
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At February 14, 2024, the contract backlog and average contractual dayrates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ending December 31, ​ ​ ​ ​ Total 2024 2025 2026 2027 2028 Thereafter ​ ​ (in millions, except average dayrates) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 6,951 $ 1,984 $ 1,965 ​ $ 1,486 ​ $ 1,031 ​ $ 381 ​ $ 104 ​ Harsh environment floaters ​ ​ 2,057 ​ ​ 762 ​ ​ 791 ​ ​ 415 ​ ​ 89 ​ ​ — ​ ​ — ​ Total contract backlog $ 9,008 $ 2,746 $ 2,756 ​ $ 1,901 ​ $ 1,120 ​ $ 381 ​ $ 104 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average contractual dayrates ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters $ 444,000 $ 428,000 $ 443,000 ​ $ 453,000 ​ $ 459,000 ​ $ 464,000 ​ $ 461,000 ​ Harsh environment floaters ​ $ 408,000 $ 366,000 $ 428,000 ​ $ 456,000 ​ $ 429,000 ​ $ — ​ $ — ​ Total fleet average ​ $ 435,000 $ 409,000 $ 438,000 ​ $ 454,000 ​ $ 457,000 ​ $ 464,000 ​ $ 461,000 ​ 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.
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Additional factors that could affect the amount and timing of actual revenues to be recognized include customer liquidity issues and contract terminations that may be available to our customers under certain circumstances.
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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.
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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.
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Risk Factors—Risks related to our business—Our current backlog of contract drilling revenues may not be fully realized .” - 29 - Table of Contents Average daily revenue —We believe average daily revenue provides a comparative measurement unit for our revenue-earning performance.
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Average daily revenue is defined as operating revenues, excluding revenues for contract terminations, reimbursements and contract intangible amortization, earned per operating day.
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The average daily revenue for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 2022 2021 Average daily revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 393,700 $ 329,100 ​ $ 355,500 ​ Harsh environment floaters ​ $ 354,300 ​ $ 380,000 ​ $ 386,200 ​ Total fleet average daily revenue ​ $ 382,300 $ 345,500 ​ $ 365,600 ​ Our average daily revenue fluctuates relative to market conditions and our revenue efficiency.
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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.
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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.
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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.
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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.
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The revenue efficiency rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2023 2022 2021 Revenue efficiency ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 96.5 % 95.7 % 96.1 % Harsh environment floaters ​ 97.8 % 97.6 % 98.8 % Total fleet average revenue efficiency ​ 96.8 % 96.4 % 97.0 % 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.
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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.
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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.
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The rig utilization rates for our fleet were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2023 2022 2021 Rig utilization ​ ​ ​ ​ Ultra-deepwater floaters ​ 49.4 % 50.1 % 49.3 % Harsh environment floaters ​ 59.1 % 64.9 % 64.4 % Total fleet average rig utilization ​ 51.9 % 54.1 % 53.4 % Our rig utilization rate declines as a result of idle and stacked rigs and during shipyard, contract preparation and mobilization periods.
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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.
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Accordingly, our rig utilization can increase when we remove idle or stacked units from our fleet. - 30 - Table of Contents Operating Results Year ended December 31, 2023 compared to the year ended December 31, 2022 The following is an analysis of our operating results.
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See “— Performance and Other Key Indicators ” for definitions of operating days, average daily revenue, revenue efficiency and rig utilization. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change % Change ​ ​ ​ (in millions, except day amounts and percentages) ​ Operating days ​ ​ 7,045 ​ ​ 7,341 ​ ​ ​ (296) ​ (4) % Average daily revenue ​ $ 382,300 ​ ​ $ 345,500 ​ ​ $ 36,800 ​ 11 % Revenue efficiency ​ ​ 96.8 % ​ ​ 96.4 % ​ ​ ​ ​ ​ ​ Rig utilization ​ ​ 51.9 % ​ ​ 54.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract drilling revenues ​ $ 2,832 ​ ​ $ 2,575 ​ ​ $ 257 ​ 10 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and maintenance expense ​ ​ (1,986) ​ ​ ​ (1,679) ​ ​ ​ (307) ​ (18) % Depreciation and amortization expense ​ ​ (744) ​ ​ ​ (735) ​ ​ ​ (9) ​ (1) % General and administrative expense ​ ​ (187) ​ ​ ​ (182) ​ ​ ​ (5) ​ (3) % Loss on impairment of assets ​ ​ (57) ​ ​ ​ — ​ ​ ​ (57) ​ nm ​ Loss on disposal of assets, net ​ ​ (183) ​ ​ ​ (10) ​ ​ ​ (173) ​ nm ​ Operating loss ​ ​ (325) ​ ​ ​ (31) ​ ​ ​ (294) ​ nm ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 52 ​ ​ ​ 27 ​ ​ ​ 25 ​ 93 % Interest expense, net of amounts capitalized ​ ​ (646) ​ ​ ​ (561) ​ ​ ​ (85) ​ (15) % Gain (loss) on retirement of debt ​ ​ (31) ​ ​ ​ 8 ​ ​ ​ (39) ​ nm ​ Other, net ​ ​ 9 ​ ​ ​ (5) ​ ​ ​ 14 ​ nm ​ Loss before income tax expense ​ ​ (941) ​ ​ ​ (562) ​ ​ ​ (379) ​ (67) % Income tax expense ​ ​ (13) ​ ​ ​ (59) ​ ​ ​ 46 ​ 78 % Net loss ​ $ (954) ​ ​ $ (621) ​ ​ $ (333) ​ (54) % “nm” means not meaningful.
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Contract drilling revenues —Contract drilling revenues increased for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the following: (a) approximately $210 million resulting from higher average daily revenues, (b) approximately $190 million resulting from the operations of our newbuild ultra-deepwater floaters Deepwater Atlas and Deepwater Titan placed into service in the two-year period ended December 31, 2023, (c) approximately $25 million resulting from slightly improved efficiency for the fleet, (d) approximately $25 million resulting from higher reimbursement revenues and (e) approximately $10 million resulting from increased early termination revenues.

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Item 6. [Reserved]

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

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Item 6. Reserved 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38 Item 8. Financial Statements and Supplementary Data 39 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 72 Item 9A. Controls and Procedures 72 Item 9B.
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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.
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Other Information 72 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 73 ​ ​ ​ PART III
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
Added
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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
Added
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.
Added
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.
Added
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.
Added
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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
Added
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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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 .” - 28 - Table of Contents Average daily revenue —We believe average daily revenue provides a comparative measurement unit for our revenue-earning performance.
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Average daily revenue is defined as operating revenues, excluding revenues for contract terminations, reimbursements and contract intangible amortization, earned per operating day.
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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.
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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.
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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.
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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.
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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.
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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, ​ ​ ​ 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.
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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, 2024 compared to the year ended December 31, 2023 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, ​ ​ ​ ​ ​ ​ ​ ​ 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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.

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Item 7. Management's Discussion & Analysis

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

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Biggest changeThreats to our information technology systems, and the systems of our customers and vendors, associated with cybersecurity risks and cyber-incidents or attacks continue to grow. Such threats may derive from human error, fraud or malice, social engineering on the part of employees or third parties, or may result from accidental technological failure.
Biggest changeSuch threats may derive from human error, fraud or malice, social engineering on the part of employees or third parties, or may result from accidental technological failure. In addition, breaches to our systems and systems of our customers and vendors could go unnoticed for some period of time.
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.
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.
At our 2009 annual general meeting, our shareholders approved the repurchase of up to CHF 3.50 billion of our shares for cancellation under the share repurchase program.
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.
We 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 equipment 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 and 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.
We 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.
To the extent new laws are enacted, existing laws are changed or other governmental actions are taken that prohibit or restrict offshore drilling or impose additional environmental protection and safety requirements that result in increased costs to the oil and gas industry, in general, or the offshore drilling industry, in particular, our business or prospects could be materially and adversely affected.
To the extent new laws are enacted, existing laws are changed or other governmental or judicial actions are taken that prohibit or restrict offshore drilling or impose additional environmental protection and safety requirements that result in increased costs to the oil and gas industry, in general, or the offshore drilling industry, in particular, our business or prospects could be materially and adversely affected.
We are subject to changes in applicable tax laws, treaties or regulations in the jurisdictions in which we operate and earn income, and such changes could include laws or policies directed toward companies organized in jurisdictions with low tax rates with the intent to increase the tax burden.
We are subject to changes in applicable tax laws, treaties or regulations in the jurisdictions in which we operate and earn income, and such changes could include laws or policies directed toward companies organized in jurisdictions with low tax rates with the intent to increase their tax burden.
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 provision 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 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.
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.
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.
Accordingly, shareholders at our annual general meeting in May 2024 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.
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.
If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain - 19 - Table of Contents countries; or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure; or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.
If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries; or if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure; or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase substantially and our earnings and cash flows from operations could be materially adversely affected.
We may also 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, 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 implementation of emergency procedures and maintenance of insurance coverage or other financial assurance of our ability to address pollution incidents.
Though we are not currently a party to any such lawsuit, these suits present a high degree of uncertainty regarding the extent to which energy companies, - 16 - Table of Contents including offshore drillers, face an increased risk of liability stemming from climate change, which risk would also adversely impact the oil and gas industry and impact demand for our services.
Though we are not currently a party to any such lawsuit, these suits present a high degree of uncertainty regarding the extent to which energy companies, including offshore drillers, face an increased risk of liability stemming from climate change, which risk would also adversely impact the oil and gas industry and impact demand for our services.
Pursuant to the terms of the current general share capital authorization, the board’s authority to issue new shares expires on May 11, 2024, 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 approximately 16.9 percent of the share capital registered in the commercial register as of February 14, 2024 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.
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.
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.
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.
Any such safety, environmental and other regulatory restrictions or standards, including voluntary customer compliance with respect thereto, could decrease, disrupt or delay operations, decrease demand for offshore drilling services, increase operating costs and compliance costs or penalties, increase out-of-service time, - 15 - Table of Contents decrease dayrates, or reduce the area of operations for drilling rigs in the U.S. and non-U.S. offshore areas.
Any such safety, environmental and other regulatory restrictions or standards, including voluntary customer compliance with respect thereto, could decrease, disrupt or delay operations, decrease demand for offshore drilling services, increase operating costs and compliance costs or penalties, increase out-of-service time, decrease dayrates, or reduce the area of operations for drilling rigs in the U.S. and non-U.S. offshore areas.
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.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Sources and uses of liquidity .” - 14 - Table of Contents Credit rating agencies have rated our debt below investment grade, which could limit our access to capital and have an adverse effect on our business and financial condition.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Sources and uses of liquidity .” Credit rating agencies have rated our debt below investment grade, which could limit our access to capital and have an adverse effect on our business and financial condition.
In the last decade, enhanced governmental safety and environmental requirements applicable to our operations were adopted by U.S. federal agencies 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 Mexico.
In August 2022, for example, the U.S. enacted the Inflation Reduction Act of 2022, which contains 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.
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.
We may not be able to repurchase as many shares as we would like to repurchase for purposes of capital reduction on the “virtual second trading line” without subjecting the selling shareholders to Swiss withholding taxes. - 20 - Table of Contents We are subject to anti-takeover provisions.
We may not be able to repurchase as many shares as we would like to repurchase for purposes of capital reduction on the “virtual second trading line” without subjecting the selling shareholders to Swiss withholding taxes. We are subject to anti-takeover provisions.
Our import and export activities are governed by unique customs and export control laws and regulations in each of the countries where we operate. Moreover, many countries, including the U.S., control the import and export of certain goods, services and technology and impose related import and export recordkeeping and reporting obligations.
Our import and export activities are governed by unique customs and export control laws and regulations in each country in which we operate. Moreover, many countries, including the U.S., control the import and export of certain goods, services and technology and impose related import and export recordkeeping and reporting obligations.
Governments also may impose economic sanctions against certain countries, persons and other entities that may restrict or prohibit transactions involving such countries, persons and entities, and we are also subject to the U.S. anti-boycott laws. - 17 - Table of Contents The laws and regulations concerning import and export activity, recordkeeping and reporting, import and export control and economic sanctions are complex and constantly changing.
Governments may also impose economic sanctions against certain countries, persons and other entities that may restrict or prohibit transactions involving such countries, persons and entities, and we are also subject to the U.S. anti-boycott laws. The laws and regulations concerning import and export activity, recordkeeping and reporting, import and export control and economic sanctions are complex and constantly changing.
These laws and regulations may be enacted, amended, enforced or interpreted in a manner materially impacting our operations. Ongoing economic challenges may increase some governments’ efforts to enact, enforce, amend or interpret laws and regulations as a method to increase revenue.
These laws and regulations may be enacted, amended, enforced or interpreted in a manner materially impacting our operations. Ongoing economic challenges and the current geopolitical environment may increase some governments’ efforts to enact, enforce, amend or interpret laws and regulations as a method to increase revenue.
Our income tax returns are subject to review and examination in these jurisdictions, and we do not recognize the benefit of income tax positions we believe are more likely than not to be disallowed upon challenge by a tax authority.
Our income tax returns are subject to review and examination in these jurisdictions, and we do not recognize the benefit of income tax positions that are not more likely than not to be respected upon challenge by a tax authority.
The determination of the aforementioned, among other things, involves considerable uncertainty. If the U.S.
The determination of the aforementioned, among other things, involves considerable judgment. If the U.S.
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 general share capital authorization as of February 14, 2024 is approximately 17.5 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 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.
The general share capital authorization approved by our shareholders at the May 2023 annual general meeting will expire on May 11, 2024. Our currently available authority under this general share capital authorization is equivalent to approximately 17.5 percent of our issued share capital as of February 14, 2024.
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.
If economic conditions preclude or limit financing from banking institutions participating in our credit facilities, we may not be able to obtain similar financing from other institutions. A slowdown in economic activity could reduce worldwide demand for energy and reverse or worsen the recovery from low oil and natural gas prices.
If economic conditions preclude or limit financing from banking institutions participating in our credit facilities, we may not be able to obtain similar financing from other institutions. A slowdown in economic activity could reduce worldwide demand for energy.
The Bureau of Ocean Energy Management (the “BOEM”) has also proposed 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, if finalized, increase bonding requirements for some of our customers.
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.
A further decline in oil and natural gas prices or an extension of the current low oil and natural gas prices could reduce demand for our drilling services and have an adverse effect on our financial position, results of operations or cash flows.
An extended period of negative outlook for the world economy could reduce the overall demand for oil and natural gas and for our services. A decline in oil and natural gas prices could reduce demand for our drilling services and have an adverse effect on our financial position, results of operations or cash flows.
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. On July 1, 2022, BOEM announced the availability of the Proposed Program for the 2023-2028 timeframe for public comments.
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.
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. - 18 - Table of Contents We are subject to cybersecurity risks and threats as well as increasing regulation of data privacy and security.
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.
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 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.
Failure to comply with applicable laws and regulations, including those relating to sanctions and export restrictions, may subject us to criminal sanctions or civil remedies, including fines, denial of export privileges, injunctions or seizures of assets. Investors could view any potential violations of OFAC regulations negatively, which could adversely affect our reputation and the market for our shares.
Failure to comply with applicable laws and regulations, including those relating to sanctions, tariffs and other trade, import or export restrictions, may subject us to criminal sanctions or civil remedies, including fines, denial of export privileges, injunctions or seizures of assets.
In addition, the U.S. previously placed a moratorium on new oil and natural gas leases on federal lands and waters, including the federal OCS. 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.
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.
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.
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.
Our Debt Ratings have caused some of the effects listed above, and any further downgrades may cause or exacerbate, any of the effects listed above and could have an adverse effect on our business and financial condition.
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.
Many governments 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. In addition, government action, including initiatives by OPEC, may continue to cause oil or gas price volatility.
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.
Removed
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.
Added
The number of lease sales and areas available for lease provided in a five-year program may differ from program to program.
Removed
An extended period of negative outlook for the world economy could further reduce the overall demand for oil and natural gas and for our services.
Added
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.
Removed
The Proposed Program includes no more than ten potential lease sales in the U.S. Gulf of Mexico. Inclusion of an area in the Proposed Program is not a final indication that it will be included in the approved 2023-2028 National OCS Program or offered in a lease sale.
Added
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.
Removed
The global nature of our operations involves additional risks.
Added
Investors could view any potential violations of OFAC regulations negatively, which could adversely affect our reputation and the market for our shares.
Removed
In addition, breaches to our systems and systems of our customers and vendors could go unnoticed for some period of time.
Added
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.
Removed
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
Changes to foreign trade policies of the U.S. and other countries could lead to the imposition of additional trade barriers and tariffs in jurisdictions in which we operate or from which we or our suppliers procure materials and equipment.
Added
We cannot predict what changes to trade policies will be made, including whether existing tariff policies will be maintained or modified or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such potential changes would have on our business.
Added
Threats to our information technology systems, and the systems of our customers and vendors, associated with cybersecurity risks and cyber-incidents or attacks continue to grow and may pose new or unknown cybersecurity risks and challenges, including as a result of the use of emerging technologies, such as AI, machine learning, generative AI and large language models.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+0 added−0 removed1 unchanged
Biggest changeDuring the year ended December 31, 2023, the fair value of our debt increased by $896 million due to the following: (a) an increase of $2.05 billion due to the issuance of the 8.375% senior secured notes due February 2028, 8.00% senior secured notes due September 2028 and the 8.75% senior secured notes due February 2030, (b) a net increase of $817 million resulting from changes in the market prices of our outstanding debt, partially offset by (c) a decrease of $1.36 billion due to early retirement of certain notes, (d) a decrease of $380 million due to the exchange of the 2.50% senior guaranteed exchangeable bonds due January 2027 and partial exchanges of the 4.00% senior guaranteed exchangeable bonds due December 2025 and the 4.625% senior guaranteed exchangeable bonds due September 2029 (the “4.625% Senior Guaranteed Exchangeable Bonds”) and (e) a decrease of $225 million due to scheduled installments.
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.
See Notes to Consolidated Financial Statements— Note 9—Debt and Notes to Consolidated Financial Statements— Note 19—Risk Concentration . Currency exchange rate risk —We are exposed to currency exchange rate risk primarily related to contract drilling revenues, employee compensation costs and purchasing costs that are denominated in currencies other than our functional currency, the U.S. dollar.
See Notes to Consolidated Financial Statements— Note 8—Debt and Notes to Consolidated Financial Statements— Note 19—Risk Concentration . Currency exchange rate risk —We are exposed to currency exchange rate risk primarily related to contract drilling revenues, employee compensation costs and purchasing costs that are denominated in currencies other than our functional currency, the U.S. dollar.
Due to various factors, including customer acceptance, local banking laws, national content requirements, other statutory requirements, local currency convertibility, local inflation and revenue efficiency, actual local currency needs may vary from those realized in the customer contracts, resulting in partial exposure to currency exchange rate risk.
Due to various factors, including customer acceptance, local banking laws, national content requirements, other statutory requirements, currency liquidity, local inflation and revenue efficiency, actual local currency needs may vary from those realized in the customer contracts, resulting in partial exposure to currency exchange rate risk.
See Notes to Consolidated Financial Statements— Note 9—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.
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.
The currency exchange effect resulting from our international operations generally has not had a material impact on our operating results. See Notes to Consolidated Financial Statements— Note 19—Risk Concentration . - 38 - Table of Contents
The currency exchange effect resulting from our international operations generally has not had a material impact on our operating results. See Notes to Consolidated Financial Statements— Note 19—Risk Concentration . - 36 - Table of Contents
At December 31, 2023, a 10 percent hypothetical increase or decrease to the market price of our shares would result in a $43 million increase or decrease in the carrying amount of the exchange feature, recorded as a component of our debt, and a corresponding adjustment to interest expense.
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.
Interest rate risk —The following table presents the scheduled installment amounts and related weighted-average interest rates of our long-term debt instruments by contractual maturity date. The expected maturity amounts, presented below, include both principal and other installments.
Interest rate risk —The following table presents the scheduled installment amounts and related weighted-average interest rates of our long-term debt instruments by contractual maturity date.
The following table presents information as of December 31, 2023, for each of the five years in the period ending December 31, 2028 and thereafter (in millions, except interest rate percentages): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2025 ​ 2026 ​ 2027 ​ 2028 ​ Thereafter ​ Total Fair value Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed rate (USD) $ 391 ​ $ 1,140 ​ $ 1,182 ​ $ 1,936 ​ $ 664 ​ $ 1,970 ​ $ 7,283 ​ $ 7,308 ​ Average interest rate ​ ​ 5.89 % ​ 6.16 % ​ 6.96 % ​ 5.17 % ​ 7.83 % ​ 7.41 % ​ ​ ​ ​ ​ ​ At December 31, 2023 and 2022, the fair value of our outstanding debt was $7.31 billion and $6.41 billion, respectively.
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.
We use a variety of techniques to minimize the exposure to currency exchange rate risk, including the structuring of customer contract payment terms and occasional use of forward exchange contracts. Our primary tool to manage currency exchange rate risk involves structuring customer contracts to provide for payment in both U.S. dollars and local currency.
We use a variety of techniques to minimize the exposure to currency exchange rate risk, including structuring customer payment terms and occasionally entering into forward exchange contracts.
The market price of our shares is the primary driver of the fair value of the exchange feature. At December 31, 2023, the fair value of the bifurcated compound exchange feature was $350 million.
At December 31, 2024, the fair value of the bifurcated compound exchange feature was $136 million.
Equity price risk —We are exposed to equity price risk primarily related to the bifurcated compound exchange feature contained within the 4.625% Senior Guaranteed Exchangeable Bonds. The compound exchange feature must be bifurcated from the host debt instrument since it is not considered indexed to our stock.
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 payment portion denominated in local currency is based on anticipated local currency requirements over the contract term.
We structure customer contracts, as our primary tool to manage currency exchange rate risk, to provide for payment in both U.S. dollars and local currency where the local currency portion is based on our anticipated local currency requirements over the contract term.

Other RIG 10-K year-over-year comparisons