Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FORM 10-K
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 001-38373
TRANSOCEAN LTD.
(Exact name of registrant as specified in its charter)
Switzerland
(State or other jurisdiction of incorporation or organization)
98-0599916
(I.R.S. Employer Identification No.)
Turmstrasse 30
Steinhausen, Switzerland
(Address of principal executive offices)
6312
(Zip Code)
Registrant’s telephone number, including area code: +41 (41) 749-0500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Shares, CHF 0.10 per share
Trading symbol
RIG
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of June 30, 2023, 766,655,180 shares were outstanding and the aggregate market value of shares held by non-affiliates was approximately $5.37 billion
(based on the reported closing market price of the shares of Transocean Ltd. on June 30, 2023 of $7.01 per share and assuming that all directors and executive
officers of the Company are “affiliates,” although the Company does not acknowledge that any such person is actually an “affiliate” within the meaning of the
federal securities laws). As of February 14, 2024, 809,030,846 shares were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement to be filed with the United States Securities and Exchange Commission within 120 days of
December 31, 2023, for its 2024 annual general meeting of shareholders, are incorporated by reference into Part III of this Form 10-K.
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2023
Item
Page
PART I
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Item 15.
Exhibits and Financial Statement Schedules
PART IV
2
8
21
21
22
22
23
25
27
27
38
39
72
72
72
73
73
73
73
73
73
73
FORWARD-LOOKING INFORMATION
The statements included in this annual report regarding future financial performance and results of operations and other
statements that are not historical facts are forward-looking statements within the meaning of Section 27A of the United States
(“U.S.”) Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Forward-looking statements in
this annual report include, but are not limited to, statements about the following subjects:
◾ the effect of any disputes and actions with respect to production levels by, among or between major oil and gas producing countries and any
expectations we may have with respect thereto;
◾ our results of operations, our cash flow from operations, our revenue efficiency and other performance indicators and optimization of rig-
based spending;
◾ the offshore drilling market, including the effects of variations in commodity prices, supply and demand, utilization rates, dayrates,
customer drilling programs, stacking and reactivation of rigs, effects of new rigs on the market, the impact of changes to regulations in
jurisdictions in which we operate and changes in the global economy or market outlook for our industry, our rig classes or the various
geographies in which we operate;
◾ customer drilling contracts, including contract backlog, force majeure provisions, contract awards, commencements, extensions,
cancellations, terminations, renegotiations, contract option exercises, contract revenues, early termination fees, indemnity provisions and
rig mobilizations;
◾ the addition of renewable or other energy alternatives to meet local, regional or global demand for energy, the commitment, by us or our
customers, to reduce greenhouse gas emissions or operating intensity thereof;
◾ liquidity, including availability under our bank credit agreement, and adequacy of cash flows for our obligations;
◾ debt levels, including interest rates, credit ratings and our evaluation or decisions with respect to any potential liability management
transactions or strategic alternatives intended to prudently manage our liquidity, debt maturities and other aspects of our capital structure
and any litigation, alleged defaults and discussions with creditors related thereto;
◾ newbuild, upgrade, shipyard, reactivations and other capital projects, including the level of expected capital expenditures and the timing
and cost of completing capital projects, delivery and operating commencement dates, relinquishment or abandonment, expected downtime
and lost revenues;
◾ the cost and timing of acquisitions, reactivations and the proceeds and timing of dispositions;
◾ tax matters, including our effective tax rate, uncertain tax positions, changes in tax laws, treaties and regulations, tax assessments, tax
incentive programs and liabilities for tax issues in the tax jurisdictions in which we operate or have a taxable presence;
◾ legal and regulatory matters, including results and effects of current or potential legal proceedings and governmental audits and
assessments, outcomes and effects of internal and governmental investigations, customs and environmental matters;
◾ insurance matters, risk tolerance and risk response, including adequacy of insurance, renewal of insurance, insurance proceeds and cash
investments of our wholly owned captive insurance company;
◾ effects of accounting changes and adoption of accounting policies; and
◾ investment in recruitment, retention and personnel development initiatives, the timing of, and other matters concerning, severance
payments, benefit payments and maintaining agreements with labor unions.
Forward-looking statements in this annual report are identifiable by use of the following words and other similar
expressions:
◾ anticipates ◾ budgets
◾ believes
◾ could
◾ estimates
◾ expects
◾ forecasts
◾ intends
◾ may
◾ might
◾ plans
◾ predicts
◾ projects
◾ scheduled
◾ should
Such statements are subject to numerous risks, uncertainties and assumptions, including, but not limited to:
◾ those described under “Item 1A. Risk Factors” in this annual report on Form 10-K;
◾ the effects of actions by, or disputes among or between, members of the Organization of Petroleum Exporting Countries and other oil and
natural gas producing countries with respect to production levels or other matters related to the prices of oil and natural gas;
◾ the adequacy of and access to our sources of liquidity;
◾ our inability to renew drilling contracts at comparable, or improved, dayrates and to obtain drilling contracts for our rigs that do not have
contracts;
◾ operational performance;
◾ the cancellation of drilling contracts currently included in our reported contract backlog;
◾ losses on impairment of long-lived assets;
◾ shipyard, construction and other delays;
◾ the results of meetings of our shareholders;
◾ changes in political, social and economic conditions;
◾ the effect and results of litigation, regulatory matters, settlements, audits, assessments and contingencies
◾ the effects of public health threats, pandemics and epidemics and the potential adverse impacts thereof; and
◾ other factors discussed in this annual report and in our other filings with the U.S. Securities and Exchange Commission (“SEC”), which are
available free of charge on the SEC website at www.sec.gov.
The foregoing risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and
uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to persons acting on
our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on
forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. We expressly
disclaim any obligations or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any
change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any
forward-looking statement is based, except as required by law.
Table of Contents
ITEM 1. BUSINESS
OVERVIEW
PART I
Transocean Ltd. (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,”
the “Company,” “we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas
wells. 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.
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. 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.
Transocean Ltd. is a Swiss corporation with its registered office in Steinhausen, Canton of Zug and with principal
executive offices located at Turmstrasse 30, 6312 Steinhausen, Switzerland. Our telephone number at that address is
+41 41 749-0500. Our shares are listed on the New York Stock Exchange under the ticker symbol “RIG.” For information
about the revenues, operating income, assets and other information related to our business and the geographic areas in which we
operate, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
“Part II. 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. Floaters are designed to operate in locations away from port for
extended periods of time and have living quarters for the crews, a helicopter landing deck and storage space for drill pipe, riser
and drilling supplies. Our drilling units and related equipment are suitable for both exploration and development, and we
engage in both types of activities.
Drillships are floating vessels that are shaped like conventional ships, generally self-propelled and considered to be the
most mobile of the major rig types. Drillships typically have greater deck load and storage capacity than semisubmersible rigs,
which provides logistical and resupply efficiency benefits for customers. Drillships are generally better suited to operations in
calmer sea conditions and typically do not operate in areas considered to be harsh environments. All of our high-specification
drillships are equipped with dynamic positioning thruster systems, which allows them to maintain position without anchors
through the use of onboard propulsion and station-keeping systems. 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. Dual-activity
technology employs structures, equipment and techniques using two drilling stations within a dual derrick to allow these
drillships to perform simultaneous drilling tasks in a parallel, rather than a sequential manner, which reduces critical path
activity and improves efficiency in both exploration and development drilling.
Semisubmersibles are floating vessels that can be partially submerged by means of a water ballast system such that the
lower column sections and pontoons are below the water surface during drilling operations. Semisubmersibles are known for
stability, making them well suited for operating in rough sea conditions. Semisubmersible floaters are capable of maintaining
their position over a well either through dynamic positioning or the use of mooring systems. Although most semisubmersible
rigs are relocated with the assistance of tugs, some units are self-propelled and move between locations under their own power
when afloat on pontoons. 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.
Our fleet consists of ultra-deepwater drillships and semisubmersibles and harsh environment semisubmersibles that are
designed with high-specification capabilities to operate in the technically demanding regions of the global offshore drilling
business. Ultra-deepwater floaters are equipped with high-pressure mud pumps and are capable of drilling in water depths of
4,500 feet or greater. Harsh environment floaters are capable of drilling in harsh environments in water depths between
1,500 and 10,000 feet and typically have greater displacement than other semisubmersibles, which offers larger variable load
capacity, more useable deck space and better motion characteristics.
Fleet status—Depending on market conditions, we may idle or stack our non-contracted rigs. An idle rig is between
drilling contracts, readily available for operations, and operating costs are typically at or near normal operating levels. A
stacked rig typically has reduced operating and maintenance costs, is staffed by a reduced crew or has no crew and is
(a) preparing for an extended period of inactivity, (b) expected to continue to be inactive for an extended period, or
(c) completing a period of extended inactivity. Stacked rigs will continue to incur operating costs at or above normal operating
levels for approximately 30 days following initiation of stacking. Some idle rigs and all stacked rigs require additional costs to
return to service. The actual cost to return to service, which in many instances could be significant and could fluctuate over
time, depends upon various factors, including the availability and cost of shipyard facilities, the cost of
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Table of Contents
equipment and materials, the extent of repairs, maintenance and commercial upgrades that may ultimately be required, the
length of time a rig has spent in stacking mode and the time and cost of assembling and training crew. 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.
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. 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”).
Rig category and name
Ultra-deepwater floaters (28)
Deepwater Titan
Deepwater Atlas
Deepwater Poseidon
Deepwater Pontus
Deepwater Conqueror
Deepwater Proteus
Deepwater Thalassa
Deepwater Asgard
Deepwater Invictus
Ocean Rig Apollo
Ocean Rig Athena
Deepwater Skyros
Ocean Rig Mylos
Discoverer Inspiration
Discoverer India
Discoverer Americas
Discoverer Clear Leader
Deepwater Corcovado
Deepwater Mykonos
Deepwater Orion
Deepwater Champion
Dhirubhai Deepwater KG2
Development Driller III
Petrobras 10000
Dhirubhai Deepwater KG1
GSF Development Driller I
Deepwater Nautilus
Discoverer Luanda
Harsh environment floaters (9)
Transocean Norge
Transocean Spitsbergen
Transocean Barents
Transocean Enabler
Transocean Encourage
Transocean Endurance
Transocean Equinox
Henry Goodrich
Paul B. Loyd, Jr.
Year
entered
service /
Hook
load
capacity
Type
upgraded (short tons)
Water
depth
capacity
(in feet) (in feet) Specifications
Drilling
depth
capacity
Contracted
location or
standby
status
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Drillship
Semisubmersible
Drillship
Drillship
Semisubmersible
Semisubmersible
Drillship
2023
2022
2018
2017
2016
2016
2016
2014
2014
2015
2014
2013
2013
2010
2010
2009
2009
2011
2011
2011
2011
2010
2009
2009
2009
2005
2000
2010
Semisubmersible
Semisubmersible
Semisubmersible
Semisubmersible
Semisubmersible
Semisubmersible
Semisubmersible
Semisubmersible 1985/2007
Semisubmersible
2019
2010
2009
2016
2016
2015
2015
1990
1,700
1,700
1,400
1,400
1,400
1,400
1,400
1,400
1,400
1,250
1,250
1,250
1,250
1,130
1,130
1,130
1,130
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
750
1,000
1,000
1,000
750
750
750
750
750
750
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
10,000
10,000
10,000
12,000
12,000
7,500
12,000
12,000
7,500
8,000
7,500
10,000
10,000
10,000
1,640
1,640
1,640
1,640
5,000
2,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
35,000
35,000
35,000
40,000
35,000
37,500
37,500
35,000
37,500
30,000
40,000
40,000
30,000
30,000
28,000
28,000
28,000
28,000
30,000
25,000
(a) (b) (c)
(a) (b) (d)
(a) (b) (e) (f)
(a) (b) (e) (f)
(a) (b) (e) (f)
(a) (b) (e) (f)
(a) (b) (e) (f)
(a) (b) (e)
(a) (b) (e)
(a) (b)
(a) (b)
(a) (b)
(a) (b) (e)
(a) (b) (e)
(a) (b)
(a) (b)
(a) (b) (e)
(a) (b)
(a) (b)
(a) (b)
(a) (b)
(a)
(a) (b) (g)
(a) (b)
(a)
(a) (b) (g)
(g)
(a) (b)
(a) (g) (h)
(a) (g) (h) (i)
(a) (g) (i)
(a) (g) (h)
(a) (g) (h)
(a) (g) (h)
(a) (g) (h)
(g)
(g) (j)
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
U.S. Gulf
Stacked
Stacked
Angola
Stacked
Idle
Stacked
Stacked
Stacked
Brazil
Brazil
Brazil
Stacked
Brazil
Idle
Brazil
India
Stacked
Stacked
Stacked
Norwegian N. Sea
Norwegian N. Sea
Romania
Norwegian N. Sea
Norwegian N. Sea
Australia
Australia
Stacked
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.
(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. Loyd, Jr. and related assets.
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Table of Contents
Rig category and name
Rigs under construction (1)
Ultra-deepwater floaters
Deepwater Aquila
Hook
load
capacity
Expected
Type
completion (short tons)
Water
depth
capacity
(feet)
Drilling
depth
capacity
(feet)
Specifications
Contracted
location
Drillship
2Q24
1,400
12,000
40,000
(a) (b) (c) (d)
Brazil
(a) To be dynamically positioned.
(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. We obtain
most of our drilling contracts through bidding processes in competition against other drilling services contractors and through
direct negotiations with operators. Drilling contracts generally provide for payment on a dayrate basis, typically with higher
rates for periods when drilling operations are optimized and, conversely, lower or zero rates for periods during which the
drilling unit is not mobilized or when drilling operations are interrupted or restricted, whether due to equipment breakdowns,
adverse environmental conditions, regulatory approvals or otherwise. 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. 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. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Performance and
Other Key Indicators.”
Certain of our drilling contracts may be cancelable for the convenience of the customer, typically with payment of an
early termination fee. Such payments, however, may not fully compensate us for the loss of the contract. Drilling contracts
also customarily provide for either automatic termination or termination at the option of the customer, typically without
payment of any termination fee, under various circumstances such as non-performance, in the event of extended downtime or
impaired performance due to equipment or operational issues or extended downtime due to force majeure events. Many of
these events are beyond our control. The contract term in some instances may be extended by the customer exercising options
for the drilling of additional wells or for additional periods of time. Our contracts also typically include a provision that allows
the customer to extend the contract to finish drilling a well-in-progress. During periods of depressed market conditions, our
customers may seek to renegotiate drilling contracts or options to reduce the term of their obligations or the average dayrate
through term extensions or may seek to early terminate or repudiate their contracts. Suspension of drilling contracts will result
in the reduction in or loss of dayrate for the period of the suspension. If customers cancel some of our contracts and we are
unable to secure new contracts on a timely basis and on substantially similar or more favorable terms, if some of our contracts
are suspended for an extended period of time or if a number of our contracts are renegotiated on less favorable terms, our
consolidated financial position, results of operations or cash flows may be adversely affected. See “Item 1A. Risk Factors—
Risks related to our business—Our drilling contracts may be terminated due to a number of events, and, during depressed
market conditions, our customers may seek to repudiate or renegotiate their contracts.”
Under dayrate drilling contracts, consistent with standard industry practice, our customers, as the operators, generally
assume, and grant indemnity for, subsurface and well control risks, and their consequential damages. Under all of our current
drilling contracts, our customers indemnify us for pollution damages in connection with reservoir fluids stemming from
operations under the contract, and we indemnify our customers for pollution that originates above the surface of the water from
the rig for substances in our control, such as diesel used or other fluids stored onboard the rig. Also, our customers indemnify
us for consequential damages they incur, damage to the well or reservoir, loss of subsurface oil and gas and costs to bring the
well under control. However, because our drilling contracts are individually negotiated, the degree of indemnification we
receive from our customers for such risks and related costs may vary from contract to contract based on market conditions,
customer requirements existing when the contract was negotiated or other factors. In some instances, we have contractually
agreed upon certain limits to our indemnification rights and can be responsible for certain damages up to a specified maximum
dollar amount. The nature of our liability and the prevailing market conditions, among other factors, can influence such
contractual terms. Notwithstanding a contractual indemnity from a customer, there can be no assurance that our customers will
be financially able to indemnify us or will otherwise honor their contractual indemnity obligations.
The interpretation and enforceability of a contractual indemnity depends upon the specific facts and circumstances
involved, as governed by applicable laws, and may ultimately need to be decided by a court or other proceeding, which would
need to consider the specific contract language, the facts and applicable laws. Applicable laws often consider contractual
indemnity for criminal fines and penalties to be against public policy. Many courts also restrict indemnification for criminal
fines and penalties. 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. 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.”
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MARKETS
Our operations are geographically dispersed in oil and gas exploration and development areas throughout the world.
We operate in a single, global offshore drilling market, as our drilling rigs are mobile assets and can be moved according to
prevailing market conditions. We may mobilize our drilling rigs between regions for a variety of reasons, including to respond
to customer contracting requirements or to capture observed market demand. 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. 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).
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 generally view the ultra-
deepwater and deepwater market sector as water depths beginning at 4,500 feet and extending to the maximum water depths in
which rigs are capable of drilling, which is currently up to 12,000 feet. The midwater market sector includes water depths from
approximately 300 feet to approximately 4,500 feet. 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. Activity levels of
energy companies, including integrated energy companies, independent energy companies and, to a lesser extent, national
energy companies are largely driven by the worldwide demand for energy, including crude oil and natural gas. Worldwide
energy supply and demand drives oil and natural gas prices, which, in turn, impact energy companies’ ability to fund
investments in exploration, development and production activities.
See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Outlook.”
CUSTOMERS
We provide our offshore drilling services to most of the leading integrated energy companies or their affiliates, as well
as for many government-owned or government-controlled energy companies and other independent energy companies. 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. No other customers accounted for 10 percent or more of
our consolidated operating revenues in the year ended December 31, 2023. 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. 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. 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.
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.
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 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.
Labor rights—We respect the labor rights of all individuals in our workforce, including the right to collective
bargaining. 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. 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. A failure to reach an agreement on certain key
issues could result in strikes, lockouts or other work stoppages.
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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 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
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. 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. 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. 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 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 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. 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. 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. 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. 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. 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. 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. 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.
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. 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.
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. 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. Five drillships in our existing fleet are designed to accept 20,000 psi blowout preventers in the future. 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.
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Seven of our harsh environment semisubmersibles are designed and constructed specifically to provide highly efficient
performance in harsh environments. 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. 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.
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. In 2022, we deployed the first unit of Enhanced Drilling’s EC-Monitor system to an offshore installation,
enabling highly accurate understanding of well fluid dynamics and improving the efficiency and accuracy of flow-checking and
detecting flow anomalies. Additionally, since 2021, we deployed on two of our ultra-deepwater drillships the first kinetic
blowout stopper, a step-changing technology that promotes operations integrity and enterprise risk reduction through unrivaled
shearing capability. Since 2022, we deployed an offshore robotic riser bolting tool on three of our ultra-deepwater drillships,
improving our ability to deliver safe and efficient operations to our customers.
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.
JOINT VENTURE, AGENCY AND SPONSORSHIP RELATIONSHIPS AND OTHER INVESTMENTS
In some areas of the world, local customs and practice or governmental requirements necessitate the formation of joint
ventures with local participation since local laws or customs in those areas effectively mandate the establishment of a
relationship with a local agent or sponsor. When appropriate in these areas, we may enter into agency or sponsorship
agreements. We also invest in certain companies for operational and strategic purposes. Some of these companies or joint
ventures in which we are an investor are involved in researching and developing technology to improve efficiency, reliability,
sustainability and safety for our drilling and other activities or are involved in businesses developed to support renewable or
other energy alternatives. We may or may not control these partially owned companies. 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, 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.
GOVERNMENTAL REGULATIONS
Our operations are subject to a variety of international, national, regional, state and local government regulations,
including environmental regulations. We monitor our compliance with such government regulations in each country of
operation and, notwithstanding increases in governmental regulations, particularly general environmental regulations, we have
made and will continue to make the required expenditures to comply with current and future government requirements. 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. We do not believe that our compliance with such requirements will have a material adverse effect on
our competitive position, consolidated results of operations or cash flows. We incorporate by reference herein the disclosures
on government regulations, including environmental regulations, contained in the following sections of this annual report on
Form 10-K:
◾ “Item 1A. 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. 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. Information contained on or accessible from our website is not
incorporated by reference into this annual report on Form 10-K and should not be considered a part of this report or any other
filing that we make with the SEC. Furthermore, references to our website URLs are intended to be inactive textual references
only. We make available on this website free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file those
materials with, or furnish those materials to, the SEC. 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
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registrants, including us. 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.
ITEM 1A.RISK FACTORS
RISKS RELATED TO OUR BUSINESS
OUR BUSINESS DEPENDS ON THE LEVEL OF ACTIVITY IN THE OFFSHORE OIL AND GAS INDUSTRY,
WHICH IS SIGNIFICANTLY AFFECTED BY VOLATILE OIL AND GAS PRICES AND OTHER FACTORS.
Our business depends on oil and gas exploration, development and production in offshore areas where we are capable
of operating. 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. 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.
Demand for our services is particularly sensitive to the level of exploration, development and production activity of,
and the corresponding capital spending by, energy companies, including national energy companies. Prolonged reductions in oil
and natural gas prices could depress the immediate levels of exploration, development and production activity. Perceptions of
longer-term lower oil and natural gas prices by energy companies, or a perception that the demand for hydrocarbons will
significantly decrease in the medium to long term, could similarly reduce or defer major expenditures given the long-term
nature of many large-scale development projects and capital reinvestment policies. Lower levels of activity result in a
corresponding decline in the demand for our services, which could have a material adverse effect on our revenue and
profitability. Oil and gas prices and market expectations of potential changes in these prices significantly affect this level of
activity. However, increases in near-term commodity prices do not necessarily translate into increased offshore drilling activity
since customers’ expectations of longer-term future commodity prices and expectations regarding future demand for
hydrocarbons typically have a greater impact on demand for our rigs. Consistent with this dynamic, customers may delay or
cancel many exploration and development programs, resulting in reduced demand for our services. Also, increased competition
for customers’ drilling budgets could come from, among other areas, land-based energy markets and renewable energy projects
worldwide. The availability of quality drilling prospects, exploration success, relative production costs, the stage of reservoir
development and political and regulatory environments also affect customers’ drilling campaigns. Worldwide military, political
and economic events have often contributed to oil and gas price volatility and are likely to do so in the future.
THE OFFSHORE DRILLING INDUSTRY IS HIGHLY COMPETITIVE AND CYCLICAL, WITH INTENSE PRICE
COMPETITION.
The offshore contract drilling industry is highly competitive with numerous industry participants, none of which has a
dominant market share. Drilling contracts are traditionally awarded on a competitive bid basis. Although rig availability,
service quality and technical capability are drivers of customer contract awards, bid pricing and intense price competition are
often key determinants for which a qualified contractor is awarded a job.
The offshore drilling industry is highly cyclical and is impacted by oil and natural gas price levels and volatility.
Periods of high customer demand, limited rig supply and high dayrates have been followed by periods of low customer
demand, excess rig supply and low dayrates. Changes in commodity prices can have a dramatic effect on rig demand, and
periods of excess rig supply may intensify competition in the industry and result in the idling of older and less technologically
advanced equipment. We have idled and stacked rigs, and may in the future idle or stack additional rigs or enter into lower
dayrate drilling contracts in response to market conditions. Idled or stacked rigs may remain out of service for extended periods
of time. During prior periods of high dayrates and rig utilization rates, we and other industry participants responded to
increased customer demand by increasing the supply of rigs through ordering the construction of new units. The introduction of
new units delivered without contracts, combined with an increased number of rigs in the global market completing contracts and
becoming idle, may intensify price competition. 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
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an oversupplied market, we may have limited bargaining power to negotiate on more favorable terms. Additionally, lower
market dayrates and intense price competition may drive customers to seek to renegotiate existing contracts to reduce dayrates
in exchange for longer contract terms. Lower dayrates and rig utilization rates could adversely affect our revenues and
profitability.
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. 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.
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. 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. We may be unable to obtain drilling
contracts for our rigs that are currently operating upon the expiration or termination of such contracts, and there may be a gap in
the operation of the rigs between the current contracts and subsequent contracts. When oil and natural gas prices are low or it is
expected that such prices will decrease in the future, we may be unable to obtain drilling contracts at attractive dayrates or at all.
We may not be able to obtain new drilling contracts with the terms or dayrates sufficient to support a reactivation of a cold-
stacked rig. Likewise, we may not be able to obtain new drilling contracts in direct continuation with existing contracts, or
depending on prevailing market conditions, we may enter into drilling contracts at dayrates substantially below the existing
dayrates or on terms otherwise less favorable compared to existing contract terms, which may have an adverse effect on our
financial position, results of operations or cash flows.
OUR CURRENT BACKLOG OF CONTRACT DRILLING REVENUES MAY NOT BE FULLY REALIZED.
At February 14, 2024, our contract backlog was approximately $9.01 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. 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 also be higher than
the actual dayrate we ultimately receive due to a number of factors, including rig downtime or suspension of operations.
Several factors could cause rig downtime or a suspension of operations, including: equipment breakdowns and other
unforeseen engineering problems, labor strikes and other work stoppages, shortages of material and skilled labor, surveys by
government and maritime authorities, periodic classification surveys, severe weather or harsh operating conditions, and force
majeure events.
In certain drilling contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period
of time. Our contract backlog includes only firm commitments, which are represented by signed drilling contracts or, in some
cases, other definitive agreements awaiting contract execution. 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. Liquidity issues and other market pressures could lead our customers to seek bankruptcy protection or to seek to
repudiate, cancel or renegotiate these agreements for various reasons (see “—Our drilling contracts may be terminated due to a
number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their
contracts”). Our inability to realize the full amount of our contract backlog may have an adverse effect on our financial
position, results of operations or cash flows.
WE MUST MAKE SUBSTANTIAL CAPITAL AND OPERATING EXPENDITURES TO REACTIVATE OUR
STACKED OR IDLE FLEET AND TO MAINTAIN OUR ACTIVE FLEET, AND WE MAY BE REQUIRED TO
MAKE SIGNIFICANT CAPITAL EXPENDITURES TO MAINTAIN OUR COMPETITIVENESS AND TO COMPLY
WITH LAWS AND APPLICABLE REGULATIONS AND STANDARDS OF GOVERNMENTAL AUTHORITIES
AND ORGANIZATIONS.
We must make substantial capital and operating expenditures to maintain our active fleet or to reactivate our stacked or
idle fleet. 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. 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 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. As a result of these factors, we may be required to take our rigs out of
service for extended periods of time, with corresponding losses of revenues, in order to make such alterations or to add such
equipment. 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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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. Our ability to access the capital markets
may be limited by our financial condition at the time, perceptions of us or our industry, by changes in laws and regulations or
interpretation thereof and by adverse market conditions resulting from, among other things, general economic conditions and
contingencies and uncertainties that are beyond our control. 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.
OUR OPERATING AND MAINTENANCE COSTS WILL NOT NECESSARILY FLUCTUATE IN PROPORTION TO
CHANGES IN OUR OPERATING REVENUES.
Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues
and are affected by many factors, including inflation. Costs for operating a rig are generally fixed or only semi-variable
regardless of the dayrate being earned. To the extent a drilling contract provides for escalations attributable to inflation in our
costs, those adjustments will lag the impact of inflationary pressures and may not reflect the full impact to us of any cost
inflation. As drilling contracts with such provisions expire or are terminated, there can be no assurance that future drilling
contracts will contain similar provisions, which may reduce our margins in inflationary environments. In addition, should our
rigs incur unplanned downtime while on contract or idle time between drilling contracts, we will not always reduce the staff on
those rigs because we could use the crew to prepare the rig for its next contract. During times of reduced activity, reductions in
costs may not be immediate because portions of the crew may be required to prepare rigs for stacking, after which time the crew
members may be reassigned to active rigs or released. 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. Equipment maintenance costs fluctuate depending upon the type of activity the unit is performing
and the age and condition of the equipment, and these costs could increase for short or extended periods as a result of regulatory
or customer requirements that raise maintenance standards above historical levels. The amount of contract preparation and
reactivation costs vary based on the scope and length of the contract preparation or reactivation project, and the recognition of
such costs varies depending on the duration of the firm contractual period and other contract terms.
Certain of our drilling contracts are partially payable in local currency. The amounts, if any, of local currency received
under these drilling contracts may exceed our local currency needs to pay local operating and maintenance costs, leading to an
accumulation of excess local currency balances, which, in certain instances, may be subject to either restrictions or other
difficulties in converting to U.S. dollars, our functional currency, or to other currencies of the locations where we operate.
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 among the public, regulators and non-governmental organizations concerning fossil fuels has
prompted efforts aimed in part at the investment community, including investment advisors, sovereign wealth funds, public
pension funds, universities and other groups, to discourage initial investments in and promote the divestment of shares of energy
companies, as well as to pressure lenders and other financial services companies to limit or curtail activities with certain energy
companies. If such efforts are successful, the market price of our shares and our ability to access capital markets may be
negatively impacted.
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. 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. 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.
As a result, our cost of capital may increase, the market price of our shares or of our publicly traded debt securities may be
negatively impacted and our reputation may also be negatively affected.
PUBLIC HEALTH THREATS HAVE HAD, AND MAY CONTINUE TO HAVE, SIGNIFICANT ADVERSE
CONSEQUENCES FOR GENERAL ECONOMIC, FINANCIAL AND BUSINESS CONDITIONS, AS WELL AS FOR
OUR BUSINESS AND OPERATIONS.
Public health threats, including pandemics and epidemics, severe influenza, coronaviruses and other highly
communicable viruses or diseases, have impacted and may continue to impact our operations directly or indirectly, including by
disrupting the operations of our business partners, suppliers and customers in ways that adversely impact our operations. 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;
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◾ 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.
As a result, we may experience significant adverse consequences in our ability to meet our commitments to customers,
including due to increased operating costs and increased risk of rig downtime or contract termination, which may result in
substantial adverse consequences for our business and results of operations. 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. Such conditions may result in, reductions to our customers’ drilling
and production expenditures and delays or cancellations of projects, which may cause a decrease in demand for our services and
an increase in the risk that our customers may seek to terminate or renegotiate pricing or other terms for our existing contracts
or that more of our rigs may become idle, stacked or retired from our fleet.
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.
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.
We engage in offshore drilling services for most of the leading integrated energy companies or their affiliates, as well
as for many government-owned or government-controlled energy companies and other independent energy companies. For the
year ended December 31, 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. 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. The loss of any of these customers or another significant customer, or a decline in payments under
any of our drilling contracts, could, at least in the short term, have an adverse effect on 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.
Our operations are subject to the usual hazards inherent in the drilling of oil and gas wells, such as, blowouts, reservoir
damage, loss of production, loss of well control, lost or stuck drill strings, equipment defects, craterings, fires, explosions and
pollution. Contract drilling requires the use of heavy equipment and exposure to hazardous conditions, which may subject us to
liability claims by employees, customers and other parties. These hazards can cause personal injury or loss of life, severe
damage to or destruction of property and equipment, pollution or environmental or natural resource damage, claims by third
parties or customers and suspension of operations. Our offshore fleet is also subject to hazards inherent in marine operations,
either while on site or during mobilization, such as capsizing, sinking, grounding, collision, piracy, damage from severe weather
and marine life infestations.
The U.S. Gulf of Mexico, the South China Sea and the Northwest Coast of Australia are areas subject to typhoons,
hurricanes or other extreme weather conditions on a relatively frequent basis, and our drilling rigs in these regions may be
exposed to damage or total loss by these storms, some of which may not be covered by insurance. The occurrence of these
events could result in the suspension of drilling operations, damage to or destruction of the equipment involved and injury to or
death of rig personnel. Some experts believe global climate change could increase the frequency and severity of these extreme
weather conditions. Operations may also be suspended because of machinery breakdowns, abnormal drilling conditions, failure
of subcontractors to perform or supply goods or services, or personnel shortages. We customarily provide contract indemnity to
our customers for certain claims that could be asserted by us relating to damage to or loss of our equipment, including rigs, and
claims that could be asserted by us or our employees relating to personal injury or loss of life.
Damage to the environment or natural resources could also result from our operations, particularly through spillage of
hydrocarbons, fuel, lubricants or other chemicals and substances used in drilling operations, or extensive uncontrolled fires. We
may also be subject to property damage, environmental indemnity and other claims by energy companies or other third parties.
Drilling involves certain risks associated with the loss of control of a well, such as blowout, cratering, the cost to regain control
of or redrill the well and remediation of associated pollution. Our customers may be unable or unwilling to indemnify us
against such risks. In addition, a court may decide that certain indemnities in our current or future drilling contracts are not
enforceable. The law generally considers contractual indemnity for criminal fines and penalties to be against public policy, and
the enforceability of an indemnity as to other matters may be limited.
Our insurance policies and drilling contracts contain rights to indemnity that may not adequately cover our losses, and
we do not have insurance coverage or rights to indemnity for all risks. We have two main types of insurance coverage: (1) hull
and machinery coverage for physical damage to our property and equipment and (2) excess liability coverage, which generally
covers offshore risks, such as personal injury, third-party property claims, and third-party non-crew claims, including wreck
removal and pollution. 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
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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. 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. 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. 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. 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.
OUR DRILLING CONTRACTS MAY BE TERMINATED DUE TO A NUMBER OF EVENTS, AND, DURING
DEPRESSED MARKET CONDITIONS, OUR CUSTOMERS MAY SEEK TO REPUDIATE OR RENEGOTIATE
THEIR CONTRACTS.
Certain of our drilling contracts with customers may be cancelable at the option of the customer upon payment of an
early termination payment. 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. The
termination payment associated with the drilling contract would not fully compensate us for the early termination of the
contract. Drilling contracts also customarily provide for either automatic termination or termination at the option of the
customer, typically without the payment of any termination fee, under various circumstances such as non-performance, as a
result of significant downtime or impaired performance caused by equipment or operational issues, or sustained periods of
downtime due to force majeure events, many of which are beyond our control. Certain customers who seek to terminate our
drilling contracts may attempt to defeat or circumvent our protections against certain liabilities. Our customers’ ability to
perform their obligations under their drilling contracts, including their ability to fulfill their indemnity obligations to us, may
also be negatively impacted by an economic downturn. Our customers, which include national energy companies, often have
significant bargaining leverage over us. If our customers cancel some of our contracts, and we are unable to secure new
contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a
number of our contracts are renegotiated on terms that are not as favorable as current terms, it could adversely affect our
financial position, results of operations or cash flows.
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. 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. 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. Should a counterparty fail to honor its obligations under an
agreement with us, we could sustain losses, which could have an adverse effect on our business and on our financial position,
results of operations or cash flows.
FAILURE TO RECRUIT AND RETAIN PERSONNEL COULD HURT OUR OPERATIONS.
We depend on the continuing efforts of key members of our management, as well as other highly skilled personnel, to
operate and provide technical services and support for our business worldwide. Historically, competition for the personnel
required for drilling operations has intensified as the number of rigs activated, added to worldwide fleets or under construction
increased, leading to shortages of qualified personnel in the industry and creating upward pressure on wages and higher
turnover. We may experience a reduction in the experience level of our personnel as a result of any increased turnover, which
could lead to higher downtime and more operating incidents, which in turn could decrease revenues and increase costs. If
increased competition for qualified personnel were to intensify in the future we may experience increases in costs or limits on
operations.
OUR LABOR COSTS AND THE OPERATING RESTRICTIONS UNDER WHICH WE OPERATE COULD
INCREASE AS A RESULT OF COLLECTIVE BARGAINING NEGOTIATIONS AND ADDITIONAL
UNIONIZATION EFFORTS.
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. 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 the union members. A failure to reach an agreement on certain key
issues could result in strikes, lockouts, or other work stoppages. 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. Additional
unionization efforts, if successful, new collective bargaining agreements or work stoppages could materially increase our labor
costs and operating restrictions.
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OUR SHIPYARD PROJECTS AND OPERATIONS ARE SUBJECT TO DELAYS AND COST OVERRUNS.
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. 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 factors may contribute to cost variations and delays in the delivery of rigs undergoing shipyard projects or any
future newbuild units. Cost variations may result in, among other things, disputes with the shipyards that construct or service
our drilling units. 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 the event of termination of any of
these drilling contracts, we may not be able to secure a replacement contract on as favorable terms, if at all.
Our operations rely on a significant supply of capital and consumable spare parts and equipment to maintain and repair
our fleet. 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. Certain parts and equipment that we use in our
operations may be available only from a small number of suppliers, manufacturers or service providers, or in some cases must
be sourced through a single supplier, manufacturer or service provider. Some parts and equipment require long lead times to
obtain, and an unplanned failure or other need to replace any such parts and equipment may result in a longer than usual time to
obtain them or require us to pay higher costs to obtain them on an expedited basis. 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.
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.
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. 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.
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.
FAILURE TO EFFECTIVELY AND TIMELY ADDRESS THE TRANSITION TO RENEWABLE OR OTHER
ALTERNATIVE ENERGY SOURCES, OR TO RESPOND TO OTHER CLIMATE RELATED BUSINESS TRENDS,
COULD ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND CASH FLOWS.
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
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natural gas and, ultimately, the demand for our services and products from our services. Addressing increased focus on the
development of additional alternative energy sources and other climate-related business trends has required and will further
require adapting certain parts of our operations to changing government requirements and customer preferences.
We continue to engage with existing and potential customers and suppliers to develop or implement solutions designed
to reduce or decarbonize oil and gas operations, or to advance renewable and other alternative energy sources. Nonetheless, as
it is not possible at this time to predict the timing, scope and effect of the development of and transition to renewable or other
alternative energy sources, any such developments, such as the declining cost of renewable energy generation technologies,
could adversely impact the long-term global demand for oil and natural gas and, ultimately, the demand for our services and
products from our services. If the transition to alternative energy sources or other climate-related trends change faster than
anticipated or develop in a manner that we do not anticipate, our business, results of operations and cash flows could be
adversely affected. 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.
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. 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. 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 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. 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. Similarly, our failure or perceived failure to pursue or fulfill our
sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or
expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all,
could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.
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. 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. 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.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and
Capital Resources—Sources and uses of liquidity.”
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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.
The ratings assigned to our debt securities by certain credit rating agencies (our “Debt Ratings”) are below investment
grade. Our Debt Ratings could have adverse consequences for our business and future prospects and could cause the following:
◾ limitations on our ability to access debt markets, including for the purpose of refinancing our existing debt and replacing or
extending our Secured Credit Facility;
◾ less favorable terms and conditions on any refinancing arrangements, debt issuances or bank credit agreements, some of which
could require collateral and restrict, among other things, our ability to pay distributions or repurchase shares;
◾ increases to certain fees under our Secured Credit Facility and interest rates under the indentures governing certain of our
senior notes;
◾ reduced willingness of current and prospective customers, suppliers and creditors to transact business with us;
◾ requirements from creditors, suppliers or customers for additional insurance, guarantees and collateral;
◾ limitations on our access to bank and third-party guarantees, surety bonds and letters of credit; and
◾ reductions to or eliminations of the level of credit suppliers and financial institutions may provide through payment terms or
intraday funding when dealing with us thereby increasing the need for higher levels of cash on hand, which would decrease
our ability to repay debt balances.
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.
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.
Worldwide financial and economic conditions could restrict our ability to access the capital markets at a time when we
would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and
business conditions. Worldwide economic conditions have in the past impacted, and could in the future impact, the lenders
participating in our credit facilities and our customers, causing them to fail to meet their obligations to us. 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. These potential developments, or market perceptions
concerning these and related issues, could adversely affect our financial position, results of operations or cash flows. In
addition, turmoil and hostilities in the Middle East, Eastern Europe, North Africa and other geographic areas and countries
present incremental risk. 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. 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.
RISKS RELATED TO LAWS, REGULATIONS AND GOVERNMENTAL COMPLIANCE
IMPACT OF INCREASINGLY STRINGENT ENVIRONMENTAL AND SAFETY LAWS AND OUR COMPLIANCE
WITH OR BREACH OF SUCH LAWS CAN BE COSTLY, EXPOSE US TO LIABILITY AND COULD LIMIT OUR
OPERATIONS.
Our business is affected by laws and regulations relating to the energy industry and the environment and safety,
including international conventions and treaties, and regional, national, state, and local laws and regulations. Our business also
depends on demand for services from the oil and gas exploration and production industry, and, accordingly, we are directly
affected by the adoption of laws and regulations that, for economic, environmental or other policy reasons, curtail, delay or
impose additional compliance costs and obligations related to the exploration and development drilling for oil and gas.
Offshore drilling in certain areas has been curtailed and, in certain cases, prohibited because of environmental or safety
concerns. In addition, compliance with environmental and safety laws, regulations and standards, where applicable, may
require us to make significant capital expenditures, such as the installation of costly equipment or implementation of operational
changes, and may affect the resale values or useful lives of our rigs. 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. 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. 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 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.
The oil and gas industry has adopted equipment and operating standards, such as the American Petroleum Institute
Standard 53, related to the installation and testing of well control equipment. A failure to comply with applicable laws and
regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our
operations. Additionally, our customers may elect to voluntarily comply with any non-mandatory laws, regulations or other
standards. 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,
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decrease dayrates, or reduce the area of operations for drilling rigs in the U.S. and non-U.S. offshore areas. Any such effects
could have an adverse effect on our financial position, results of operations or cash flows.
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. The operation of our drilling rigs will require certain governmental approvals, some of which may
involve public hearings and costly undertakings on our part. We may not obtain such approvals or such approvals may not be
obtained in a timely manner. If we fail to timely secure the necessary governmental approvals or permits, our customers may
have the right to terminate or seek to renegotiate their drilling contracts to our detriment. The amendment or modification of
existing laws and regulations or the adoption of new laws and regulations curtailing or further regulating exploratory or
development drilling or production of oil and gas and compliance with any such new or amended legislation or regulations
could have an adverse effect on our business or on our financial position, results of operations or cash flows.
As a contract driller with operations in certain offshore areas, we may be liable for damages and costs incurred in
connection with oil spills or disposal of wastes related to those operations, and we may also be subject to significant fines and
other liabilities in connection with spills. 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.
Additionally, we may not be able to obtain such indemnities in our future drilling contracts, and our customers may not have
the financial capability to fulfill their contractual obligations to us. Also, these indemnities may be held to be unenforceable in
certain jurisdictions, as a result of public policy or for other reasons. See “—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.”
Environmental and safety laws and regulations protecting the environment have become increasingly stringent and
may in some cases impose strict liability on facility or vessel owners or operators, rendering a person liable for environmental
damage without regard to negligence. These laws and regulations may expose us to liability for the conduct of, or conditions
caused by, others or for acts that were in compliance with all applicable laws at the time they were performed. The application
of these requirements or the adoption of new requirements or measures could have an adverse effect on our financial position,
results of operations or cash flows.
REGULATORY AND VARIOUS OTHER RISKS, INCLUDING LITIGATION, ASSOCIATED WITH GREENHOUSE
GAS EMISSIONS, OTHER EMISSIONS AND CLIMATE CHANGE COULD HAVE AN ADVERSE IMPACT ON
OUR BUSINESS AND DEMAND FOR OUR SERVICES.
Scientific studies have suggested that emissions of certain gases, including greenhouse gases, such as carbon dioxide
and methane, contribute to warming of the earth’s atmosphere and other climatic changes. In response to such studies, the issue
of climate change and the effect of greenhouse gas emissions, in particular emissions from the fossil fuel industry, has attracted
and continues to attract considerable political and social attention worldwide. The attention to climate change has led, and we
expect it to continue to lead, to additional regulations designed to reduce greenhouse gas emissions domestically and
internationally. 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. Additionally, at the United Nations
Climate Change Conference in the United Arab Emirates in December 2023, more than 190 governments reached a non-binding
agreement to transition away from fossil fuels and encourage the growth and expansion of renewable energy. Such attention
could also result in other adverse impacts for the oil and gas industry, including further restrictions or bans imposed by
lawmakers, lawsuits by governments or third-parties seeking recoveries for damages resulting from the combustion of fuels that
may contribute to climate change effects, decreased demand for goods and services that produce significant greenhouse gas
emissions, or reduced interest from investors if they elect in the future to shift some or all of their investments to non-fossil fuel
related sectors. To the extent financial markets view climate change and greenhouse emissions as a financial risk, this could
negatively impact our cost of or access to capital. Because our business depends on the level of activity in the oil and gas
industry, existing or future laws, regulations, treaties or international agreements related to greenhouse gases and climate
change, or related political, litigation or financial risks, including incentives to conserve energy or use alternative energy
sources, could have a negative impact on our business if such laws, regulations, treaties or international agreements reduce the
worldwide demand for oil and gas or limit drilling opportunities. In addition, such laws, regulations, treaties or international
agreements or related risks could result in increased compliance costs or additional operating restrictions, which may have an
adverse effect on our business. Further, some experts believe global climate change could increase the frequency and severity
of extreme weather conditions, the impacts of which could interfere with our operations, cause damage to our equipment as well
as cause other financial and operational impacts, including those that could result from any impact of such conditions on our
customers.
We could also face increased climate-related litigation with respect to our operations both in the U.S. and around the
world. Governmental and other entities in various U.S. states, such as California and New York, have filed lawsuits against
coal, gas oil and petroleum companies. These suits allege damages as a result of climate change, and the plaintiffs are seeking
unspecified damages and abatement under various tort theories. Similar lawsuits may be filed in other jurisdictions both in the
U.S. and globally. 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,
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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.
ANY RESTRICTIONS ON OIL AND NATURAL GAS OPERATIONS ON THE U.S. OUTER CONTINENTAL
SHELF (“OCS”) COULD HAVE AN ADVERSE IMPACT ON OUR BUSINESS AND DEMAND FOR OUR
SERVICES.
The U.S. Department of the Interior (“DOI”) administers the submerged lands, subsoil, and seabed, lying between the
seaward extent of the states’ jurisdiction and the seaward extent of federal jurisdiction, and the U.S. government has the power
to limit oil and gas activities on this area, known as the OCS. 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. 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. 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.
THE GLOBAL NATURE OF OUR OPERATIONS INVOLVES ADDITIONAL RISKS.
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.
Our non-U.S. contract drilling operations are subject to various laws and regulations related to economic and trade
sanctions in certain countries in which we operate, including laws and regulations relating to the import and export, equipment
and operation of drilling units, currency conversions and repatriation, oil and gas exploration and development, taxation and
social contributions of offshore earnings and earnings of expatriate personnel. We are also subject to the U.S. Treasury
Department’s Office of Foreign Assets Control (“OFAC”) and other U.S. and non-U.S. laws and regulations governing our
international operations. In addition, various state and municipal governments, universities and other investors have proposed
or adopted divestment and other initiatives regarding investments including, with respect to state governments, by state
retirement systems in companies that do business with countries that have been designated as state sponsors of terrorism by the
U.S. State Department. 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.
Governments in some countries have become increasingly active in regulating and controlling the ownership of
concessions and companies holding concessions, the exploration for oil and gas and other aspects of the oil and gas industries in
their countries, including local content requirements for participating in tenders for certain drilling contracts. 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. In some areas of the world, this
governmental activity has adversely affected the amount of exploration and development work by major energy companies and
may continue to do so.
The shipment of goods, services and technology across international borders subjects us to extensive trade laws and
regulations. 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. 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.
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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. Shipments can
be delayed and denied import or export for a variety of reasons, some of which are outside our control and some of which may
result from failure to comply with existing legal and regulatory regimes. Shipping delays or denials could cause unscheduled
operational downtime.
Our results are directly affected by the applicability of certain customs duties and importation tax relief programs
under customs regimes for the exportation and importation of goods and equipment, including rigs, related to the oil and gas
sector. Among other incentives, such programs grant full suspension of certain import taxes, resulting in reduced tax burdens
from operations. 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.
Our ability to operate worldwide depends on our ability to obtain the necessary visas and work permits for our
personnel to travel in and out of, and to work in, the jurisdictions in which we operate. Governmental actions in some of the
jurisdictions in which we operate may make it difficult for us to move our personnel in and out of these jurisdictions by
delaying or withholding the approval of these permits. If we are not able to obtain visas and work permits for the employees we
need to conduct our operations on a timely basis, we might not be able to perform our obligations under our drilling contracts,
which could allow our customers to cancel the contracts. If our customers cancel some of our drilling contracts, and we are
unable to secure new drilling contracts on a timely basis and on substantially similar terms, it could have a material adverse
effect on our business and on our financial position, results of operations or cash flows.
FAILURE TO COMPLY WITH ANTI-BRIBERY STATUTES, SUCH AS THE U.S. FOREIGN CORRUPT
PRACTICES ACT AND THE U.K. BRIBERY ACT 2010, COULD RESULT IN FINES, CRIMINAL PENALTIES,
DRILLING CONTRACT TERMINATIONS AND AN ADVERSE EFFECT ON OUR BUSINESS.
The U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010 (“Bribery Act”) and similar anti-bribery
laws in other jurisdictions, generally prohibit companies and their intermediaries from making improper payments for the
purpose of obtaining or retaining business. We operate in many parts of the world that have experienced corruption to some
degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. If
we are found to be liable for violations under the FCPA, the Bribery Act or other similar laws, either due to our acts or
omissions or due to the acts or omissions of others, including our partners in our various joint ventures and of the current or
former officers, directors or employees of any companies we have acquired, we could suffer from civil and criminal penalties or
other sanctions, which could have a material adverse effect on our business or our financial position, results of operations or
cash flows. In addition, investors could negatively view potential violations, inquiries or allegations of misconduct under the
FCPA, the Bribery Act or similar laws, which could adversely affect our reputation and the market for our shares.
We could also face fines, sanctions and other penalties from authorities in relevant jurisdictions, including prohibition
of our participating in or curtailment of business operations in those jurisdictions and the seizure of rigs or other assets.
Additionally, our business and results of operations could be adversely affected as a result of claims by customers, agents,
shareholders, debt holders, other interest holders, current or former employees or other constituents of our company who, in
connection with alleged or actual noncompliance with antibribery and related laws, may seek to impose penalties, seek
remedies, terminate drilling contracts or take other actions adverse to our interests. Our business and results of operations may
be adversely affected if we are required to dedicate significant time and resources to investigate and resolve allegations of
misconduct, regardless of the merit of such allegations. Further, disclosure of the subject matter of any investigation could
adversely affect our reputation and our ability to obtain new business with potential customers, to retain existing business with
our current customers, to attract and retain employees and to access the capital markets.
WE ARE SUBJECT TO INVESTIGATIONS AND LITIGATION THAT, IF NOT RESOLVED IN OUR FAVOR AND
NOT SUFFICIENTLY INSURED AGAINST, COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
We are subject to a variety of disputes, investigations and litigation. Certain of our subsidiaries are subject to and have
been involved in litigation with certain of our customers and other constituents. Certain of our subsidiaries are named as
defendants in numerous lawsuits alleging personal grievances or injury, including as a result of exposure to asbestos or toxic
fumes or resulting from other occupational diseases, such as silicosis, and various other medical issues that can remain
undiscovered for a considerable amount of time. Some of these subsidiaries that have been put on notice of potential liabilities
have no assets. Certain subsidiaries are subject to litigation relating to environmental damage. Our patent for dual-activity
technology has been successfully challenged in certain jurisdictions. We are also subject to a number of significant tax disputes.
We cannot predict the outcome of these investigations and cases or the potential costs to resolve them. Insurance may not be
applicable or sufficient in all cases, insurers may not remain solvent and policies may not be located. Suits against non-asset-
owning subsidiaries have and may in the future give rise to alter ego or successor-in-interest claims against us and our asset-
owning subsidiaries to the extent a subsidiary is unable to pay a claim or insurance is not available or sufficient to cover the
claims. 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.
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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. Our data protection measures and measures taken by our customers and vendors
may not prevent unauthorized access of information technology systems, and when such unauthorized access occurs, we, our
customers or vendors may not detect the incident in time to prevent harm or damage. 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. 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. In addition, breaches to our systems and systems of our
customers and vendors could go unnoticed for some period of time. 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. A breach could also originate from, or compromise, our
customers’ and vendors’ or other third-party networks outside of our control. A breach may also result in legal claims or
proceedings against us by our shareholders, employees, customers, vendors and governmental authorities, both U.S. and non-
U.S. If such a cyber-incident were to occur, it could have a material adverse effect on our business or on our financial position,
results of operations or cash flows.
In addition, data privacy and the unauthorized disclosure of personal data and confidential information pose
increasingly complex compliance challenges and have the potential to elevate our costs under various laws and regulations,
including privacy regulations that have been adopted or may in the future be adopted by, or be applicable from time to time to,
countries, states, and other jurisdictions or authorities. Any failure by us to comply with these laws and regulations, including
as a result of a security or privacy breach, could result in significant penalties, litigation and liabilities for us. Additionally, if
we acquire a company that has violated or is not in compliance with applicable data protection laws, we may incur significant
liabilities and penalties as a result.
ACTS OF TERRORISM, PIRACY AND POLITICAL AND SOCIAL UNREST COULD AFFECT THE MARKETS
FOR DRILLING SERVICES.
Acts of terrorism and social unrest, brought about by world political events or otherwise, have caused instability in the
world’s financial and insurance markets in the past and may occur in the future. Such acts could be directed against companies
such as ours. In addition, acts of terrorism, piracy and social unrest could lead to increased volatility in prices for crude oil and
natural gas and could affect the markets for drilling services. Insurance premiums could increase and coverage may be
unavailable in the future. Government regulations may effectively preclude us from engaging in business activities in certain
countries. These regulations could be amended to cover countries where we currently operate or where we may wish to operate
in the future. Our drilling contracts do not generally provide indemnification against loss of capital assets or loss of revenues
resulting from acts of terrorism, piracy or political or social unrest. We have limited insurance for our assets providing coverage
for physical damage losses resulting from certain risks, such as terrorist acts, piracy, vandalism, sabotage, civil unrest,
expropriation and acts of war, and we do not carry insurance for loss of revenues resulting from such risks.
RISKS RELATED TO TAXES
A CHANGE IN TAX LAWS, TREATIES OR REGULATIONS, OR THEIR INTERPRETATION, OF ANY COUNTRY
IN WHICH WE HAVE OPERATIONS, ARE INCORPORATED OR ARE RESIDENT COULD RESULT IN A
HIGHER EFFECTIVE TAX RATE ON OUR CONSOLIDATED EARNINGS AND INCREASE OUR CASH TAX
PAYMENTS.
We 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. 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. The application of these provisions is not always certain, and jurisdictions are still developing their rules and
interpretations with regard to same.
As such, any material change to tax laws, treaties, regulations or policies, their interpretation or application, or the
adoption of new interpretations of existing laws and rulings, in any of the jurisdictions in which we operate, are incorporated or
resident, could result in a higher effective tax rate on our worldwide earnings and such change could have a significant adverse
effect on our financial position, results of operations or cash flows.
A LOSS OF A MAJOR TAX DISPUTE OR A SUCCESSFUL TAX CHALLENGE TO OUR OPERATING
STRUCTURE, INTERCOMPANY PRICING POLICIES OR THE TAXABLE PRESENCE OF OUR KEY
SUBSIDIARIES IN CERTAIN COUNTRIES COULD RESULT IN A HIGHER EFFECTIVE TAX RATE ON OUR
CONSOLIDATED EARNINGS AND INCREASE OUR CASH TAX PAYMENTS.
We are subject to tax laws, treaties and regulations in the countries in which we operate and earn income. Our income
taxes are based on the applicable tax laws and tax rates in effect in the countries in which we operate and earn income as well as
upon our operating structures in these countries. 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. If any tax authority successfully challenges our operational structure, intercompany pricing
policies or the taxable presence of our key subsidiaries in certain
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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. For example, we believe that neither we nor
our non-U.S. subsidiaries, other than those that report a U.S. trade or business or a U.S. permanent establishment, were or are
engaged in a trade or business in the U.S. or, if applicable, maintained or maintain a permanent establishment in the U.S. The
determination of the aforementioned, among other things, involves considerable uncertainty. If the U.S. Internal Revenue
Service were to disagree, then we could be subject to additional U.S. corporate income and branch profits taxes on the portion
of our earnings effectively connected to such U.S. business or, if applicable, attributable to such U.S. permanent establishment
during the period in which this was considered to have occurred. 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.
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.
Under Swiss law, our shareholders may approve a general share capital authorization, referred to under Swiss law as a
capital band, that allows the board of directors to issue new shares without additional shareholder approval within a period of up
to five years and for up to a maximum of 50 percent of a company’s issued share capital. 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. 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. Further,
Swiss law does not provide as much flexibility in the various terms that can attach to different classes of shares as the laws of
some other jurisdictions. Swiss law also reserves for shareholder approval certain corporate actions, such as approval of
dividends, over which a board of directors would have authority in some other jurisdictions. These Swiss law requirements
relating to our capital management may limit our flexibility to swiftly implement certain initiatives or strategies, and situations
may arise where greater flexibility would have provided substantial benefits to our shareholders.
We are required, from time to time, to evaluate the carrying amount of our investments in affiliates, as presented on our
Swiss standalone balance sheet. If we determine that the carrying amount of any such investment exceeds its fair value, we may
conclude that such investment is impaired. Any recognized loss associated with such a non-cash impairment could result in our
net assets no longer covering our statutory share capital and statutory capital reserves. Under Swiss law, if our net assets cover
less than 50 percent of our statutory share capital and the non-distributable part of the statutory capital and profit reserves, the
board of directors must take appropriate measures or, to the extent such measures fall within the competence of the general
meeting of shareholders, convene a general meeting of shareholders, and propose measures to remedy such a capital loss.
Appropriate measures depend on the relevant circumstances and the magnitude of the recognized loss and may include seeking
shareholder approval for offsetting the aggregate loss, or a portion thereof, with our statutory capital reserves, including
qualifying additional paid-in capital otherwise available for distributions to shareholders, or raising new equity. Depending on
the circumstances, we may also need to use qualifying additional paid-in capital available for distributions in order to reduce
our accumulated net loss and such use might reduce our ability to make distributions without subjecting our shareholders to
Swiss withholding tax.
Distributions to shareholders in the form of a par value reduction and dividend distributions out of qualifying
additional paid-in capital are currently not subject to the 35 percent Swiss federal withholding tax. However, the Swiss
withholding tax rules could be changed in the future, and any such change may adversely affect us or our shareholders. In
addition, over the long term, the amount of par value available for us to use for par value reductions or the amount of qualifying
additional paid-in capital available for us to pay out as distributions is limited. If we are unable to make a distribution through a
reduction in par value, or out of qualifying additional paid-in capital as shown on Transocean Ltd.’s standalone Swiss statutory
financial statements, we may not be able to make distributions without subjecting our shareholders to Swiss withholding taxes.
Under Swiss tax law, repurchases of shares for the purposes 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. 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. If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase shares via a
“virtual second trading line” from market players, such as banks and institutional investors, who are generally entitled to receive
a full refund of the Swiss withholding tax. The use of such “virtual second trading line” with respect to share repurchase
programs is subject to the approval of the competent Swiss tax and other authorities. 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.
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WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS.
Our articles of association and Swiss law contain provisions that could prevent or delay an acquisition of the company
by means of a tender offer, a proxy contest or otherwise. 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. 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.
ITEM 1B.UNRESOLVED STAFF COMMENTS
None.
ITEM 1C.CYBERSECURITY
RISK MANAGEMENT AND STRATEGY
Our approach to managing cybersecurity risk and safeguarding information across our organization embeds data
protection and cybersecurity risk management throughout our enterprise and daily operations. We maintain processes for
identifying, assessing and managing material risks, including such risks from cybersecurity threats, and such processes are
integrated into our overall risk management system. Our enterprise risk register inventories significant risks to our company,
including significant cybersecurity risks, and we maintain a separate functional risk register, specifically focusing on potential
cybersecurity risks. Within these risk registers, we record each identified risk, describe its likelihood of occurrence and assess
its potential impact, including the materiality thereof. 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.
We undertake to align our cybersecurity program, which encompasses both enterprise security and operational security,
with the standards of the National Institute of Standards and Technology Cybersecurity Framework. We maintain continuous
cyber threat-detection systems and have established an incident response plan, which contains playbooks for addressing and
recovering from potential material cyberattacks and breaches of data security. 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.
As of the date of our filing of this report, we are not aware of any cybersecurity incident that has had or is reasonably
likely to have a material impact on our business operations. Given 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. 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.”
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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. Such status reports and executive sessions
cover cybersecurity matters, such as developments to our program, key risk indicators, emerging risks, and identified incidents.
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. Such
oversight includes (i) reviewing our enterprise risk register, (ii) maintaining adequate processes to manage the identified risks
under our cybersecurity program, (iii) regularly analyzing logs of cybersecurity threats and vulnerabilities and (iv) overseeing
prevention, detection, mitigation and remediation efforts in general, including the development and maintenance of the above-
mentioned incident response plan. 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. 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.
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. 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—Tax matters” in this annual report on Form 10-K. All such actions, claims, tax and other matters
disclosed therein are incorporated herein by reference.
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. We cannot predict with certainty the outcome or effect of any of the matters referred to above or of any such other
pending, threatened or possible litigation or legal proceedings. We can provide no assurance that our beliefs or expectations as
to the outcome or effect of any lawsuit or claim or dispute will prove correct, and the eventual outcome of these matters could
materially differ from management’s current estimates.
On December 17, 2021, Transocean Offshore Deepwater Drilling Inc. (“TODDI”), our wholly owned subsidiary,
received a letter from the U.S. Department of Justice (the “DOJ”) related to alleged violations by our subsidiary of its Clean
Water Act (“CWA”) National Pollutant Discharge Elimination System permit for the western Gulf of Mexico (“Permit”). The
alleged violations, involving seven of our drillships, were identified by the U.S. Environmental Protection Agency (“EPA”)
following an initial inspection in 2018 of our compliance with the Permit and the CWA and relate to deficiencies with respect to
administrative monitoring and reporting obligations. In connection with the initial EPA inspection, we initiated modifications to
our Permit and CWA compliance processes and maintained a dialogue with the EPA regarding the design and implementation of
enhancements to these processes. 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. Pursuant to the Consent Decree, we agreed to pay an immaterial monetary civil penalty, and we further
agreed (i) to take or continue to take certain corrective actions to ensure current and future Permit and CWA compliance,
including implementing certain procedures and submitting reports and other information, in each case according to the timelines
and as described in the Consent Decree, (ii) to appoint an independent auditor to review, audit and report on our compliance
with certain of our obligations thereunder, and (iii) to certain non-exclusive stipulated monetary penalties if we fail to comply
with applicable provisions of the Consent Decree. We may request termination of the Consent Decree after we have
(x) completed timely the civil penalty payment and any accrued stipulated penalty requirements of the Consent Decree, and
(y) maintained continuous satisfactory compliance with the Consent Decree for at least three years. 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.
In addition to the legal proceedings described above, we may from time to time identify other matters that we monitor
through our compliance program or in response to events arising generally within our industry and in the markets where we do
business. We evaluate
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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.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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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. 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.
Officer
Jeremy D. Thigpen
Keelan Adamson
Howard E. Davis
Brady K. Long
Mark L. Mey
David Tonnel
(a) Chief Executive Officer
(a)
President and Chief Operating Officer
Executive Vice President, Chief Administrative Officer and Chief Information Officer
Office
Executive Vice President and General Counsel
(a) Executive Vice President and Chief Financial Officer
Senior Vice President and Chief Accounting Officer
Age as of
February 14, 2024
49
54
65
51
60
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. 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. 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. 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.
Keelan Adamson is President and Chief Operating Officer of the Company. Before being named to his current position in
February 2022, Mr. Adamson served as Executive Vice President and Chief Operations Officer from August 2018 to February 2022, as
Senior Vice President, Operations from October 2017 to July 2018 and as Senior Vice President, Operations Integrity and HSE, from
June 2015 to October 2017. Since 2010, Mr. Adamson served 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. 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. 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. 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. 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. Long served as Senior Vice President and General Counsel from November 2015 to March 2018. From
2011 to November 2015, when Mr. Long joined the Company, he served as Vice President—General Counsel and Secretary of
Ensco plc, which acquired Pride International, Inc. where he had served as Vice President, General Counsel and Secretary since
August 2009. Mr. Long joined 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. 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. 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. 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. 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. 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. 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. 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. Tonnel earned a Master of Science degree in Management from HEC in Paris, France in 1991.
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PART II
ITEM 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.
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. Shareholders should consult their own tax advisors in respect of the tax
consequences related to receipt, ownership, purchase or sale or other disposition of our shares and the procedures for claiming a
refund of withholding tax.
Swiss income tax on dividends and similar distributions—A non-Swiss holder is not subject to Swiss income taxes
on dividend income and similar distributions in respect of our shares, unless the shares are attributable to a permanent
establishment or a fixed place of business maintained in Switzerland by such non-Swiss holder. However, dividends and similar
distributions are subject to Swiss withholding tax, subject to certain exceptions. See “—Swiss withholding tax on dividends
and similar distributions to shareholders.”
Swiss wealth tax—A non-Swiss holder is not subject to Swiss wealth taxes unless the holder’s shares are attributable
to a permanent establishment or a fixed place of business maintained in Switzerland by such non-Swiss holder.
Swiss capital gains tax upon disposal of shares—A non-Swiss holder is not subject to Swiss income taxes for capital
gains unless the holder’s shares are attributable to a permanent establishment or a fixed place of business maintained in
Switzerland by such non-Swiss holder. In such case, the non-Swiss holder is required to recognize capital gains or losses on the
sale of such shares, which are subject to cantonal, communal and federal income tax.
Swiss withholding tax on dividends and similar distributions to shareholders—A Swiss withholding tax of
35 percent is due on dividends and similar distributions to our shareholders from us, regardless of the place of residency of the
shareholder, subject to the exceptions discussed under “—Exemption” below. We will be required to withhold at such rate and
remit on a net basis any payments made to a holder of our shares and pay such withheld amounts to the Swiss federal tax
authorities.
Exemption—Distributions to shareholders in the form of a par value reduction or out of qualifying additional paid-in
capital for Swiss statutory purposes are exempt from Swiss withholding tax. 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. Consequently, we expect that a substantial amount of any potential future distributions may be exempt from
Swiss withholding tax.
Refund available to Swiss holders—A Swiss tax resident, corporate or individual, can recover the withholding tax in
full if such resident is the beneficial owner of our shares at the time the dividend or other distribution becomes due and provided
that such resident reports the gross distribution received on such resident’s income tax return, or in the case of an entity,
includes the taxable income in such resident’s income statement.
Refund available to non-Swiss holders—If the shareholder that receives a distribution from us is not a Swiss tax
resident, does not hold our shares in connection with a permanent establishment or a fixed place of business maintained in
Switzerland, and resides in a country that has concluded a treaty for the avoidance of double taxation with Switzerland for
which the conditions for the application and protection of and by the treaty are met, then the shareholder may be entitled to a
full or partial refund of the withholding tax described above. 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.
Refund available to U.S. residents—The Swiss-U.S. tax treaty provides that U.S. residents eligible for benefits under
the treaty can seek a refund of the Swiss withholding tax on dividends for the portion exceeding 15 percent, leading to a refund
of 20 percent, or a 100 percent refund in the case of qualified pension funds. As a general rule, the refund will be granted under
the treaty if the U.S. resident can show evidence of the following: (a) beneficial ownership, (b) U.S. residency and (c) meeting
the U.S.-Swiss tax treaty’s limitation on benefits requirements. The claim for refund must be filed with the Swiss federal tax
authorities (Eigerstrasse 65, 3003 Bern, Switzerland), not later than December 31 of the third year following the year in which
the dividend payments became due. The relevant Swiss tax form is Form 82C for companies, 82E for other entities and 82I for
individuals. These forms can be obtained from any Swiss Consulate General in the U.S. or from the Swiss federal tax
authorities at the above address or can be downloaded from the webpage of the Swiss federal tax administration. Each form
must be completed in triplicate, with each copy duly completed and signed before a notary public in the U.S. Evidence that the
withholding tax was withheld at the source must also be included.
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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. If a purchase or sale is not entered into through or with a Swiss bank or
other Swiss securities dealer, then no stamp tax will be due. The applicable stamp tax rate is 0.075 percent for each of the
two parties to a transaction and is calculated based on the purchase price or sale proceeds. If the transaction does not involve
cash consideration, the transfer stamp duty is computed on the basis of the market value of the consideration.
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. We would be required to remit on a net basis the purchase
price with the Swiss withholding tax deducted to a holder of our shares and pay the withholding tax to the Swiss federal tax
authorities. However, for such repurchased shares, the portions of the repurchase price that are attributable to the par value and
the qualifying additional paid-in capital for Swiss statutory reporting purposes are not subject to the Swiss withholding tax.
If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase our shares via a
"virtual second trading line" from market players, such as banks and institutional investors, who are generally entitled to receive
a full refund of the Swiss withholding tax. The use of such “virtual second trading line” with respect to share repurchase
programs is subject to approval of the competent Swiss tax and other authorities. 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. The repurchase of shares for purposes other than for cancellation, such as
to retain as treasury shares for use in connection with stock incentive plans, convertible debt or other instruments within certain
periods, are not generally subject to Swiss withholding tax. In addition, in December 2022, the U.S. 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.
A company may repurchase its shares to the extent it has freely distributable reserves as shown on its Swiss statutory balance
sheet in the amount of the purchase price and if the aggregate par value of all shares held by the company as treasury shares
does not exceed 10 percent of the company’s share capital recorded in the Swiss Commercial Register, whereby for purposes of
determining whether the 10 percent threshold has been reached, shares repurchased under a share repurchase program for
cancellation purposes authorized by the company’s shareholders are disregarded. As of February 14, 2024, Transocean Inc., our
wholly owned subsidiary, held as treasury shares 4.11 percent of our issued shares. Our board of directors could, to the extent
freely distributable reserves are available, authorize the repurchase of additional shares for purposes other than cancellation,
such as to retain treasury shares for use in satisfying our obligations in connection with incentive plans or other rights to acquire
our shares. 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. Although our board of directors has not approved
such a share repurchase program for the purpose of retaining repurchased shares as treasury shares, if it did so, any such shares
repurchased would be in addition to any shares repurchased under the currently approved program.
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. 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. The share repurchase program
could be suspended or discontinued by our board of directors or company management, as applicable, at any time. We may
decide, based on our ongoing capital requirements, the price of our shares, regulatory and tax considerations, cash flow
generation, the amount and duration of our contract backlog, general market conditions, debt rating considerations and other
factors, that we should retain cash, reduce debt, make capital investments or acquisitions or otherwise use cash for general
corporate purposes. Decisions regarding the amount, if any, and timing of any share repurchases will be made from time to
time based on these factors. Any repurchased shares under the share repurchase program would be held by us for cancellation
by the shareholders at a future general meeting of shareholders.
ISSUER PURCHASES OF EQUITY SECURITIES
Period
October 2023
November 2023
December 2023
Total
Total number
of shares
purchased
Average
price paid
per share
Total number of shares
purchased as part
of publicly announced
plans or programs (a)
Approximate dollar value
of shares that may yet
be purchased under the plans
or programs (in millions) (a)
— $
—
—
— $
—
—
—
—
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— $
—
—
— $
3,855
3,855
3,855
3,855
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ITEM 6. 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. 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.
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. 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.
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. 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. 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. 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. 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. 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.
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. (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. 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. 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.
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. 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. 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. 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. 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. See “—Liquidity and Capital
Resources—Sources and uses of liquidity.”
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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”). 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”.
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. 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. 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. 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.
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. 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.
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. 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.
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. 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. 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. 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.
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.
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. 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.
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.
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As of February 14, 2024, our contract backlog was $9.01 billion compared to $9.40 billion as of October 18, 2023.
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. 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. The uncommitted fleet rates exclude the effect of priced options.
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:
Uncommitted fleet rate
Ultra-deepwater floaters
Harsh environment floaters
2024 2025 2026 2027 2028
47 %
23 %
58 %
37 %
69 %
69 %
79 %
93 %
92 %
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. 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. 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. The contract backlog for our
fleet was as follows:
Contract backlog
Ultra-deepwater floaters
Harsh environment floaters
Total contract backlog
February 14,
2024
October 18,
2023
(in millions)
February 9,
2023
$
$
6,951 $
2,057
9,008 $
7,426 $
1,969
9,395 $
7,378
1,159
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. 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. 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. At February 14, 2024, the
contract backlog and average contractual dayrates for our fleet were as follows:
Contract backlog
Ultra-deepwater floaters
Harsh environment floaters
Total contract backlog
Average contractual dayrates
Ultra-deepwater floaters
Harsh environment floaters
Total fleet average
Total
2024
For the years ending December 31,
2027
2026
2025
(in millions, except average dayrates)
2028
Thereafter
$
$
6,951 $
2,057
9,008 $
1,984 $
762
2,746 $
1,965
791
2,756
$
$
1,486
415
1,901
$
$
1,031
89
1,120
$
$
381
—
381
$
$
104
—
104
$ 444,000 $ 428,000 $ 443,000
$ 408,000 $ 366,000 $ 428,000
$ 435,000 $ 409,000 $ 438,000
$ 453,000
$ 456,000
$ 454,000
$ 459,000
$ 429,000
$ 457,000
$ 464,000
$
$ 464,000
— $
$ 461,000
—
$ 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. 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.
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. 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. Risk Factors—Risks related to our
business—Our current backlog of contract drilling revenues may not be fully realized.”
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Average daily revenue—We believe average daily revenue provides a comparative measurement unit for our revenue-
earning performance. Average daily revenue is defined as operating revenues, excluding revenues for contract terminations,
reimbursements and contract intangible amortization, earned per operating day. The average daily revenue for our fleet was as
follows:
Years ended December 31,
2022
2021
2023
Average daily revenue
Ultra-deepwater floaters
Harsh environment floaters
Total fleet average daily revenue
$ 393,700 $ 329,100
$ 354,300
$ 380,000
$ 382,300 $ 345,500
$ 355,500
$ 386,200
$ 365,600
Our average daily revenue fluctuates relative to market conditions and our revenue efficiency. 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. 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. 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. 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.
The revenue efficiency rates for our fleet were as follows:
Years ended December 31,
2022
2021
2023
Revenue efficiency
Ultra-deepwater floaters
Harsh environment floaters
Total fleet average revenue efficiency
96.5 %
97.8 %
96.8 %
95.7 %
97.6 %
96.4 %
96.1 %
98.8 %
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. 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.
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. The rig utilization rates for our fleet were as follows:
Years ended December 31,
2022
2021
2023
Rig utilization
Ultra-deepwater floaters
Harsh environment floaters
Total fleet average rig utilization
49.4 %
59.1 %
51.9 %
50.1 %
64.9 %
54.1 %
49.3 %
64.4 %
53.4 %
Our rig utilization rate declines as a result of idle and stacked rigs and during shipyard, contract preparation and
mobilization periods. 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. Accordingly, our rig utilization can
increase when we remove idle or stacked units from our fleet.
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OPERATING RESULTS
Year ended December 31, 2023 compared to the year ended December 31, 2022
The following is an analysis of our operating results. See “—Performance and Other Key Indicators” for definitions of
operating days, average daily revenue, revenue efficiency and rig utilization.
Operating days
Average daily revenue
Revenue efficiency
Rig utilization
Contract drilling revenues
Operating and maintenance expense
Depreciation and amortization expense
General and administrative expense
Loss on impairment of assets
Loss on disposal of assets, net
Operating loss
Other income (expense), net
Interest income
Interest expense, net of amounts capitalized
Gain (loss) on retirement of debt
Other, net
Loss before income tax expense
Income tax expense
Net loss
“nm” means not meaningful.
Years ended December 31,
2023
2022
Change
% Change
(in millions, except day amounts and percentages)
7,045
$ 382,300
7,341
$ 345,500
(296)
$ 36,800
(4)%
11 %
96.8 %
51.9 %
96.4 %
54.1 %
$
2,832
$
2,575
$
257
(1,986)
(744)
(187)
(57)
(183)
(325)
52
(646)
(31)
9
(941)
(13)
(954)
$
(1,679)
(735)
(182)
—
(10)
(31)
27
(561)
8
(5)
(562)
(59)
(621)
$
(307)
(9)
(5)
(57)
(173)
(294)
25
(85)
(39)
14
(379)
46
(333)
$
10 %
(18)%
(1)%
(3)%
nm
nm
nm
93 %
(15)%
nm
nm
(67)%
78 %
(54)%
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. These
increases were partially offset by the following: (a) approximately $180 million resulting from reduced utilization, primarily for
our harsh environment floaters that were under mobilization or contract preparation for their next contract and
(b) approximately $25 million resulting from cold stacking Deepwater Nautilus.
Costs and expenses—Operating and maintenance costs and expenses increased for the year ended December 31,
2023, compared to the year ended December 31, 2022, primarily due to the following: (a) approximately $140 million resulting
from reactivation and contract preparation, (b) approximately $85 million resulting from our two newbuild ultra-deepwater
floaters placed into service, (c) approximately $55 million resulting from the effect of inflation on personnel and maintenance
costs, (d) approximately $40 million resulting from various litigation, customs duties and indirect taxes and (e) approximately
$25 million resulting from higher reimbursable costs. These increases were partially offset by the following: (a) approximately
$35 million resulting from cold stacking Deepwater Nautilus and (b) approximately $15 million resulting from the favorable
effect of currency exchange rates on personnel costs.
Depreciation and amortization expense increased for the year ended December 31, 2023, compared to the year ended
December 31, 2022, primarily due to (a) $48 million of increased depreciation associated with our newbuild ultra-deepwater
floaters and other property and equipment placed into service since December 2022, partially offset by (b) $23 million of
reduced depreciation resulting from the disposal of one rig and the classification of two rigs as held for sale and
(c) approximately $12 million of reduced depreciation resulting from assets that had reached the end of their useful lives or had
been retired.
General and administrative costs and expenses increased for the year ended December 31, 2023, compared to the year
ended December 31, 2022, primarily due to the following: (a) approximately $16 million resulting from increased personnel
costs, partially offset by (c) approximately $8 million resulting from reduced innovation costs and (d) approximately $4 million
resulting from reduced legal and professional fees.
Loss on impairment or disposal of assets—In the year ended December 31, 2023, we recognized a loss associated
with the impairment of two harsh environment floaters, which we determined were impaired at the time we classified them as
held for sale.
In the year ended December 31, 2023, we recognized a loss of $169 million associated with our non-cash contribution
of Ocean Rig Olympia and related assets in exchange for an equity ownership interest in GSR. In the years ended
December 31, 2023 and
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2022, we recognized an aggregate net loss of $14 million and $10 million, respectively, associated with the disposal of assets
unrelated to rig sales.
Other income and expense—Interest expense, net of amounts capitalized, increased in the year ended December 31,
2023, compared to the year ended December 31, 2022, primarily due to the following: (a) $189 million resulting from debt
issued in the two-year period ended December 31, 2023 and (b) $34 million resulting from reduced interest costs capitalized for
our newbuild construction program, partially offset by (c) $113 million resulting from debt repaid as scheduled or early retired
and (d) $30 million resulting from the fair value adjustment of the bifurcated compound exchange feature embedded in the
indenture governing the 4.625% Senior Guaranteed Exchangeable Bonds.
In the year ended December 31, 2023, we recognized a net loss on retirement of debt, primarily associated with the
early retirement of $1.38 billion aggregate principal amount of our debt securities. In the year ended December 31, 2022, we
recognized a net gain on the retirement of debt, primarily associated with the early retirement of $116 million aggregate
principal amount of our debt securities in connection with exchange and purchase agreements.
Other income net, increased in the year ended December 31, 2023, compared to the year ended December 31, 2022,
primarily due to the following: (a) an increased gain of $18 million resulting from net changes to currency exchange rates,
(b) increased income of $17 million associated with our dual-activity patent and (c) increased income of $8 million related to
the non-service components of net periodic benefit income, partially offset by (e) 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.
Income tax expense—In the years ended December 31, 2023 and 2022, our effective tax rate was (1.4) percent and
(10.4) percent, respectively, based on loss before income tax expense. In the years ended December 31, 2023 and 2022, the
aggregate effect of discrete period tax items was a net tax benefit of $74 million and $19 million, respectively. In the year
ended December 31, 2023, such discrete items included settlements and expirations of various uncertain tax positions, changes
to valuation allowances and changes to deferred taxes due to new rig operations. In the year ended December 31, 2022, such
discrete items included settlement and expiration of various uncertain tax positions, changes to valuation allowances,
operational restructuring and gains due to exchange rate changes. In the years ended December 31, 2023 and 2022, our
effective tax rate, excluding discrete items, was (13.3) percent and (13.6) percent, respectively, based on loss before income tax
expense. In the year ended December 31, 2023 compared to the year ended December 31, 2022, our effective tax rate increased
primarily due to changes in the relative blend of income from operations in certain jurisdictions.
Due to our operating activities and organizational structure, our income tax expense does not change proportionally
with our income before income taxes. Significant decreases in our income before income taxes typically lead to higher effective
tax rates, while significant increases in income before income taxes can lead to lower effective tax rates, subject to the other
factors impacting income tax expense noted above. With respect to the effective tax rate calculation for the year ended
December 31, 2023, a significant portion of our income tax expense was generated in countries in which income taxes are
imposed or treated to be imposed on gross revenues, with the most significant of these countries being Angola and India.
Conversely, the countries in which we incurred the most significant income taxes during this period that were based on income
before income tax include the U.S., Hungary, Brazil, Cyprus, Australia, Norway and Switzerland. Our rig operating structures
further complicate our tax calculations, especially in instances where we have more than one operating structure for the taxing
jurisdiction and, thus, more than one method of calculating taxes depending on the operating structure utilized by the rig under
the contract.
LIQUIDITY AND CAPITAL RESOURCES
Sources and uses of cash
In the year ended December 31, 2023, our primary sources of cash were net cash proceeds from issuance of debt and
net cash provided by our operating activities. Our primary uses of cash were debt repayments and capital expenditures.
Cash flows from operating activities
Net loss
Non-cash items, net
Changes in operating assets and liabilities, net
Years ended December 31,
2023
2022
(in millions)
Change
$
$
(954) $
1,351
(233)
164 $
(621)
1,163
(94)
448
$
$
(333)
188
(139)
(284)
Net cash provided by operating activities decreased primarily due to (a) increased disbursements made in connection
with contract preparation and mobilization activities for rigs under new or upcoming contracts, (b) increased cash paid for
interest and (c) increased cash paid to employees, partially offset by (d) reduced cash paid for income taxes.
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Cash flows from investing activities
Capital expenditures
Investments in equity of unconsolidated affiliates
Investment in loans to unconsolidated affiliates
Proceeds from disposal of assets, net
Cash acquired in acquisition of unconsolidated affiliate
Years ended December 31,
2023
2022
(in millions)
Change
$
$
(427) $
(10)
(3)
10
7
(423) $
(717)
(42)
(5)
7
—
(757)
$
$
290
32
2
3
7
334
Net cash used in investing activities decreased primarily due to (a) reduced capital expenditures associated with our
newbuild construction program and (b) reduced cash invested in the equity and debt of our unconsolidated affiliates, partially
offset by (c) increased capital expenditures associated with maintenance, reactivation and contract preparation activities.
Cash flows from financing activities
Repayments of debt
Proceeds from issuance of debt, net of issue costs
Proceeds from issuance of shares, net of issue costs
Proceeds from issuance of warrants, net of issue costs
Other, net
Years ended December 31,
2023
2022
(in millions)
Change
$
$
(1,717) $
1,983
—
—
(3)
263 $
(554)
175
263
12
(8)
(112)
$
$
(1,163)
1,808
(263)
(12)
5
375
Net cash provided by financing activities increased primarily due to (a) net cash proceeds from the issuance of
$1.175 billion aggregate principal amount of 8.75% Senior Secured Notes, $525 million aggregate principal amount of
8.375% Senior Secured Notes and $325 million aggregate principal amount of 8.00% Senior Secured Notes in the year ended
December 31, 2023, and (b) decreased cash used to repay debt in scheduled installments, partially offset by (c) early repayments
of $1.38 billion aggregate principal amount of certain of our debt securities in the year ended December 31, 2023 compared to
early repayments of $77 million aggregate principal amount in the prior year.
Sources and uses of liquidity
Overview—We expect to use existing unrestricted cash balances, cash flows from operating activities, borrowings
under our Secured Credit Facility or proceeds from the disposal of assets or the issuance of debt or shares to fulfill anticipated
near-term obligations, which may include capital expenditures, working capital and other operational requirements, scheduled
debt maturities or other payments. At December 31, 2023, we had $762 million in unrestricted cash and cash equivalents and
$233 million in restricted cash and cash equivalents. We have generated positive cash flows from operating activities over
recent years and, although we cannot provide assurances, we expect that such cash flows will continue to be positive over the
next year. For example, among other factors, if we incur costs for reactivation or contract preparation of multiple rigs or to
otherwise assure the marketability of our fleet or general economic, financial, industry or business conditions deteriorate, our
cash flows from operations may be reduced or negative.
Additionally, we have a bank credit agreement for a credit facility, secured by, among other things, a lien on nine of
our ultra-deepwater floaters and two of our harsh environment floaters (as amended from time to time, the “Secured Credit
Facility”). Our Secured Credit Facility provides us with a borrowing capacity of $600 million through its scheduled maturity on
June 22, 2025, and contains restrictive covenants, including a minimum guarantee coverage ratio of 3.0 to 1.0, a minimum
collateral coverage ratio of 2.1 to 1.0 and a minimum liquidity requirement of $500 million, among others. For more
information about the restrictions in our Secured Credit Facility and maturity triggers thereof, as well as on our scheduled debt
maturities in 2024 and beyond, see Notes to Consolidated Financial Statements—Note 9—Debt.
Although we currently anticipate relying on these sources of liquidity, including cash flows from operating activities
and borrowings under our Secured Credit Facility, among others, we may in the future consider establishing additional
financing arrangements with banks or other capital providers, including shipyard loans, and subject to market conditions and
other factors, we may be required to provide collateral for any such future financing arrangements. Additionally, we have from
time to time relied on issuances of equity or equity-linked securities. For more information about our issuances of equity
securities, see Notes to Consolidated Financial Statements—Note 9—Debt and Notes to Consolidated Financial Statements—
Note 14—Equity.
Debt and equity markets—From time to time, we seek to access the capital markets, including with respect to
potential liability management transactions. For example, during the three-year period ended December 31, 2023, we
completed multiple debt and equity transactions, including the redemption, exchanges and retirement of existing debt, in
connection with our ongoing efforts to prudently manage our capital structure and improve our liquidity position. Subject to
then-existing market conditions and our expected liquidity needs, among other factors, we may use existing unrestricted cash
balances, our cash flows from operating activities, or proceeds from asset sales to pursue liability management transactions,
including among others, purchasing or exchanging any of our debt or equity-linked securities in
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the open market, in privately negotiated transactions, or through tender or exchange offers, or by redeeming any of our
outstanding debt securities pursuant to the terms of the applicable governing document, if applicable. Any future purchases,
exchanges or other transactions may be on the same terms or on terms that are more or less favorable to holders than the terms
of any prior transaction. We can provide no assurance as to which, if any, of these alternatives, or combinations thereof, we
may choose to pursue in the future, if at all, or as to the timing with respect to any future transactions. For more information
about our previous debt repayment, redemption and retirement transactions during the three-year period ended December 31,
2023, see Notes to Consolidated Financial Statements—Note 9—Debt.
Our ability and willingness to access the debt and equity markets is a function of a variety of factors, including, among
others, general economic, industry or market conditions, market perceptions of us and our industry and credit rating agencies’
views of our debt. General economic or market conditions could have an adverse effect on our business and financial position
and on the business and financial position of our customers, suppliers and lenders and could affect our ability to access the
capital markets on acceptable terms or at all and our future need or ability to borrow under our Secured Credit Facility. In
addition to our potential sources of funding, the effects of such global events could impact our liquidity or need to alter our
allocation or sources of capital, implement further cost reduction measures and change our financial strategy. Additionally, the
rating of our long-term debt is below investment grade, which is causing us to experience increased fees and interest rates under
our Secured Credit Facility and indentures governing certain of our senior notes. Future downgrades may further restrict our
ability to access the debt market for sources of capital and may negatively impact the cost of such capital at a time when we
would like, or need, to access such markets, which could have an impact on our flexibility to react to changing economic and
business conditions.
Drilling fleet—From time to time, we review possible acquisitions of businesses and drilling rigs, as well as
noncontrolling ownership interests in other companies, and we may make significant future capital commitments for such
purposes. We may also consider investments related to major rig upgrades, new rig construction, or the acquisition of a rig
under construction. Any such acquisition or investment could involve the payment by us of a substantial amount of cash or the
issuance of a substantial number of additional shares or other securities. Our failure to subsequently secure drilling contracts in
these instances, if not already secured, could have an adverse effect on our results of operations or cash flows.
In the years ended December 31, 2023 and 2022, we made capital expenditures of $427 million and $717 million,
respectively, including $331 million and $669 million, respectively, for our newbuild construction projects. The historical and
projected capital expenditures and non-cash capital additions for our ongoing newbuild construction projects were as follows:
Deepwater Aquila (a)
Deepwater Titan (b)
Deepwater Atlas (c)
Total
Total costs
through
December 31,
2023
Expected
costs for the
year ending
December 31,
2024
(in millions)
$
$
301 $
1,165
1,000
2,466 $
139 $
—
—
139 $
Total
440
1,165
1,000
2,605
(a)
(b)
(c)
In September 2023, we acquired Deepwater Aquila, an ultra-deepwater drillship under construction for Liquila, a previously
unconsolidated variable interest entity, by acquiring the outstanding ownership interests in Liquila. The seventh generation, high-
specification drillship is designed to be equipped with our patented dual activity, a 1,400 short-ton hookload, large deck space, high load
capacities and will be dual-stack ready. The rig is expected to commence operations under its drilling contract in mid-2024.
In May 2023, we completed construction of the ultra-deepwater drillship Deepwater Titan, and it commenced operations under its
drilling contract. Deepwater Titan is equipped with two 20,000 pounds per square inch blowout preventers and other equipment required
by our customer.
In October 2022, we completed construction of the ultra-deepwater drillship Deepwater Atlas, and it commenced the first of two phases
of operations using a 15,000 pounds per square inch blowout preventer. In October 2023, the rig completed installation of a
20,000 pounds per square inch blowout preventer and related equipment, and is expected to return to service in the first half of 2024.
The ultimate amount of our capital expenditures is partly dependent upon financial market conditions, the actual level
of operational and contracting activity, the costs associated with the current regulatory environment and customer requested
capital improvements and equipment for which the customer agrees to reimburse us. As with any major shipyard project that
takes place over an extended period of time, the actual costs, the timing of expenditures and the project completion date may
vary from estimates based on numerous factors, including actual contract terms, weather, exchange rates, shipyard labor
conditions, availability of suppliers to recertify equipment and the market demand for components and resources required for
drilling unit construction. We intend to fund the cash requirements for our projected capital expenditures by using available
cash balances, cash generated from operations and asset sales, borrowings under our Secured Credit Facility and financing
arrangements with banks or other capital providers. Economic conditions and other factors could impact the availability of
these sources of funding. See “—Sources and uses of liquidity.”
From time to time, we may also review the possible disposition of certain drilling assets. During the year ended
December 31, 2023, we made a non-cash contribution of an ultra-deepwater floater, together with related assets and a cash
contribution of $10 million, as consideration for an equity ownership interest in an unconsolidated affiliate. Additionally, on
February 15, 2024, we completed the sale of two harsh environment floaters. Considering market conditions, we have
previously committed to plans to sell certain lower specification
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drilling units for scrap value, and we may identify additional lower-specification drilling units to be sold for scrap, recycling or
alternative purposes. See Notes to Consolidated Financial Statements—Note 7—Long-Lived Assets.
Contractual obligations—We provide additional information about our cash requirements for known contractual and
other obligations on both a short-term and long-term basis in the notes to our consolidated financial statements as follows:
◾ For additional information regarding our operating and finance lease obligations, see Notes to Consolidated Financial
Statements—Note 8—Leases.
◾ For additional information regarding our debt obligations and scheduled maturities, see Notes to Consolidated Financial
Statements—Note 9—Debt.
◾ For additional information regarding the obligations to our employees under our various postemployment benefit plans, see
Notes to Consolidated Financial Statements—Note 10—Postemployment Benefit Plans.
◾ For additional information regarding our tax obligations, see Notes to Consolidated Financial Statements—Note 11—Income
Taxes.
◾ For additional information regarding our obligations under long-term purchase agreements and service agreements and our
material contingencies, see Notes to Consolidated Financial Statements—Note 13—Commitments and Contingencies.
Other commercial commitments—We have other commercial commitments, such as standby letters of credit and
surety bonds that guarantee our performance as it relates to our drilling contracts, insurance, customs, tax and other obligations
in various jurisdictions. The cash obligations of these commitments, which are primarily geographically concentrated in Brazil,
are not normally called because we typically comply with the underlying performance requirements. Standby letters of credit
are issued under various committed and uncommitted credit lines, some of which require cash collateral. For additional
information regarding our standby letters of credit and surety bond guarantees, see Notes to Consolidated Financial Statements
—Note 13—Commitments and Contingencies.
RELATED PARTY TRANSACTIONS
In April 2023, Perestroika AS (together with its subsidiaries, “Perestroika”), an entity affiliated with one of our
directors that beneficially owns approximately 11 percent of our shares, exchanged $213 million aggregate principal amount of
the 2.50% Senior Guaranteed Exchangeable Bonds under the terms of the governing indenture at the applicable exchange rate
of 162.1626 Transocean Ltd. shares per $1,000 note. As part of the transaction governing the exchange, we delivered
34.6 million Transocean Ltd. shares and additional immaterial cash consideration to such exchanging holder. The director’s
beneficial ownership of our shares resulting from these transactions did not change. See Notes to Consolidated Financial
Statements—Note 9—Debt.
In September 2023, we issued 11.9 million Transocean Ltd. shares with an aggregate value of $99 million, which
included 2.0 million Transocean Ltd. shares with an aggregate value of $16.4 million issued to Perestroika, to acquire the
outstanding ownership interests in Liquila, and as a result, Liquila became our wholly owned subsidiary. See Notes to
Consolidated Financial Statements—Note 4—Unconsolidated Affiliates.
We engage in certain related party transactions with our unconsolidated affiliates. Our most significant transactions
with our unconsolidated affiliates are under agreements with Orion Holdings (Cayman) Limited as follows: (a) we operate,
stack and maintain Transocean Norge under a management services agreement, (b) we market Transocean Norge under a
marketing services agreement and (c) during operations, we lease Transocean Norge under a bareboat charter agreement.
Additionally, we procure and provide services and equipment from and to other unconsolidated affiliates for technological
innovation and subsea minerals exploration. See Notes to Consolidated Financial Statements—Note 4—Unconsolidated
Affiliates.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Overview
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the
U.S., which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses and related
disclosures of contingent assets and liabilities. These estimates require significant judgments and assumptions. We evaluate our
estimates on an ongoing basis using historical experience and various other assumptions that we believe are reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
We consider the following to be our critical accounting policies and estimates since they are very important to the
portrayal of our financial condition and results and require our most subjective and complex judgments. We have discussed the
development, selection and disclosure of such policies and estimates with the audit committee of our board of directors. For
information about our significant accounting policies and accounting standards updates, see Notes to Consolidated Financial
Statements—Note 2—Significant Accounting Policies.
Income taxes
Overview—We provide for income taxes based on expected taxable income, statutory rates and tax laws in the
jurisdictions in which we operate or have a taxable presence. The relationship between our provision for or benefit from
income taxes and our income or loss before income taxes can vary significantly from period to period considering, among other
factors, (a) the overall level of income before income taxes, (b) changes in the blend of income that is taxed based on gross
revenues rather than income before taxes, (c) rig movements
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between taxing jurisdictions and (d) our rig operating structures. Consequently, our income tax expense does not change
proportionally with our income or loss before income taxes.
Uncertain tax positions—We apply significant judgment to evaluate our tax positions based on the interpretation of
tax laws in various jurisdictions and with the use of estimates and assumptions regarding significant future events, such as the
amount, timing and character of income, deductions and tax credits. Our tax liability in any given year could be affected by
changes in tax laws, regulations, agreements, and treaties, currency exchange restrictions or our level or profitability of
operations in each jurisdiction. The tax laws relating to the offshore drilling industry in certain jurisdictions in which we
operate are not well developed, requiring us to apply incremental judgment. Although we employ the best information available
at the time we prepare our annual tax provision, a number of years may elapse before the tax liabilities in the various
jurisdictions are ultimately determined.
We are undergoing examinations of our tax returns in a number of taxing jurisdictions for various years. We review
our liabilities on an ongoing basis and, to the extent audits or other events cause us to adjust the liabilities accrued in prior
periods, we recognize those adjustments in the period of the event. Our tax liabilities are dependent on numerous factors that
cannot be reasonably projected, including among others, the amount and nature of additional taxes potentially asserted by local
tax authorities; the willingness of local tax authorities to negotiate a fair settlement through an administrative process; the
impartiality of the local courts; and the potential for changes in the taxes paid to one country that either produce, or fail to
produce, offsetting tax changes in other countries. Consequently, we cannot reasonably estimate the future impact of changes to
the assumptions and estimates related to our annual tax provision.
Unrecognized tax benefits—We establish liabilities for estimated tax exposures, and the provisions and benefits
resulting from changes to those liabilities are included in our annual tax provision along with related interest and penalties.
Such tax exposures include potential challenges to intercompany pricing, disposition transactions, and withholding tax rates
and their applicability. These exposures may be affected by changes in applicable tax law or other factors, which could cause us
to revise our prior estimates, and are generally resolved through the settlement of audits within these tax jurisdictions or by
judicial means. At December 31, 2023 and 2022, we had unrecognized tax benefits of $458 million and $471 million,
respectively, including interest and penalties, against which we recorded net operating loss deferred tax assets of $411 million
and $383 million, respectively, resulting in net unrecognized tax benefits of $47 million and $88 million, respectively, including
interest and penalties, that upon reversal would favorably impact our effective tax rate.
Valuation allowance—We apply significant judgment to determine whether our deferred tax assets will be fully or
partially realized. Our evaluation requires us to consider all available positive and negative evidence, including projected future
taxable income and the existence of cumulative losses in recent years. We continually evaluate opportunities for the future
utilization of our deferred tax assets. When it is estimated to be more likely than not that all or some portion of certain deferred
tax assets, such as foreign tax credit carryovers or net operating loss carryforwards, will not be realized, we establish a valuation
allowance for the amount of the deferred tax assets that is considered to be unrealizable. During the years ended December 31,
2023 and 2022, in connection with our evaluation of the projected realizability of our deferred tax assets, we determined that
our consolidated cumulative loss incurred over the recent three-year period has limited our ability to consider other subjective
evidence, such as projected contract activity rather than contract backlog. See Notes to Consolidated Financial Statements—
Note 11—Income Taxes.
Property and equipment
Overview—We apply significant judgment to account for our property and equipment, consisting primarily of offshore
drilling rigs and related equipment, related to estimates and assumptions for cost capitalization, useful lives and salvage values.
At December 31, 2023 and 2022, the carrying amount of our property and equipment was $16.94 billion and $17.47 billion,
respectively, representing 84 percent and 85 percent, respectively, of our total assets.
Capitalized costs—We capitalize costs incurred to enhance, improve and extend the useful lives of our property and
equipment and expense costs incurred to repair and maintain the existing condition of our rigs. For newbuild construction
projects, we also capitalize the initial preparation, mobilization and commissioning costs incurred until the drilling unit is placed
into service. Cost capitalization affects our results of operations by reducing expenses in the period incurred and increasing
depreciation expense over the useful life of the asset.
Useful lives and salvage values—We depreciate our assets using the straight-line method over their estimated useful
lives after allowing for salvage values. We estimate useful lives and salvage values by applying judgments and assumptions
that reflect both historical experience and expectations regarding future operations, rig utilization and asset performance.
Useful lives and salvage values of rigs are difficult to estimate due to a variety of factors, including (a) technological advances
that impact the methods or cost of oil and gas exploration and development, (b) changes in market or economic conditions and
(c) changes in laws or regulations affecting the drilling industry. Applying different judgments and assumptions in establishing
the useful lives and salvage values would likely result in materially different net carrying amounts and depreciation expense for
our assets. We reevaluate the remaining useful lives and salvage values of our rigs when certain events occur that directly
impact the useful lives and salvage values of the rigs, including changes in operating condition, functional capability and market
and economic factors. We may also consider major capital upgrades required to perform certain contracts and the long-term
impact of those upgrades on future marketability. At December 31, 2023, a hypothetical one-year increase in the useful lives of
all of our rigs would cause a decrease in our annual depreciation expense of approximately $33 million and a hypothetical one-
year decrease would cause an increase in our annual depreciation expense of approximately $13 million.
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Long-lived asset impairment—We review our property and equipment for impairment when events or changes in
circumstances indicate that the carrying amounts of our assets held and used may not be recoverable. Potential impairment
indicators include rapid declines in commodity prices and related market conditions, declines in dayrates or utilization,
cancellations of contracts or credit concerns of multiple customers. During periods of oversupply, we may idle or stack rigs for
extended periods of time or we may elect to sell certain rigs for scrap, which could be an indication that an asset group may be
impaired since supply and demand are the key drivers of rig utilization and our ability to contract our rigs at economical rates.
Our rigs are mobile units, equipped to operate in geographic regions throughout the world and, consequently, we may mobilize
rigs from an oversupplied region to a more lucrative and undersupplied region when it is economical to do so. Many of our
contracts generally allow our customers to relocate our rigs from one geographic region to another, subject to certain conditions,
and our customers utilize this capability to meet their worldwide drilling requirements. Accordingly, our rigs are considered to
be interchangeable within classes or asset groups, and we evaluate impairment by asset group. We consider our asset groups to
be ultra-deepwater floaters and harsh environment floaters.
We assess recoverability of assets held and used by projecting undiscounted cash flows for the asset group being
evaluated. When the carrying amount of the asset group is determined to be unrecoverable, we recognize an impairment loss,
measured as the amount by which the carrying amount of the asset group exceeds its estimated fair value. To estimate the fair
value of each asset group, we apply a variety of valuation methods, incorporating income, market and cost approaches. We may
weigh the approaches, under certain circumstances, when relevant data is limited, when results are inconclusive or when results
deviate significantly. Our estimate of fair value generally requires us to use significant unobservable inputs, representative of
Level 3 fair value measurements, including assumptions related to the long-term future performance of our asset groups, such as
projected revenues and costs, dayrates, rig utilization and revenue efficiency. These projections involve uncertainties that rely
on assumptions about demand for our services, future market conditions and technological developments. Because our business
is cyclical in nature, the results of our impairment testing are expected to vary significantly depending on the timing of the
assessment relative to the business cycle. Altering either the timing of or the assumptions used to estimate fair value and
significant unanticipated changes to the assumptions could materially alter an outcome that could otherwise result in an
impairment loss. Given the nature of these evaluations and their application to specific asset groups and specific time periods, it
is not possible to reasonably quantify the impact of changes in these assumptions. See Notes to Consolidated Financial
Statements—Note 7—Long-Lived Assets.
OTHER MATTERS
Regulatory matters
We occasionally receive inquiries from governmental regulatory agencies regarding our operations around the world,
including inquiries with respect to various tax, environmental, regulatory and compliance matters. To the extent appropriate
under the circumstances, we investigate such matters, respond to such inquiries and cooperate with the regulatory agencies. See
Notes to Consolidated Financial Statements—Note 13—Commitments and Contingencies.
Tax matters
We conduct operations through our various subsidiaries in countries throughout the world. Each country has its own
tax regimes with varying statutory rates, deductions and tax attributes, which are subject to changes resulting from new
legislation, interpretation or guidance. From time to time, as a result of these changes, we may revise previously evaluated tax
positions, which could cause us to adjust our recorded tax assets and liabilities. Tax authorities in certain jurisdictions are
examining our tax returns and, in some cases, have issued assessments. We intend to defend our tax positions vigorously.
Although we can provide no assurance as to the outcome of the aforementioned changes, examinations or assessments, we do
not expect the ultimate liability to have a material adverse effect on our consolidated statement of financial position or results of
operations; however, it could have a material adverse effect on our consolidated statement of cash flows. See Notes to
Consolidated Financial Statements—Note 11—Income Taxes.
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ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Overview—We are exposed to interest rate risk, primarily associated with our long-term debt, including current
maturities. Additionally, we are exposed to equity price risk related to certain of our exchangeable bonds and currency
exchange rate risk related to our international operations.
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. 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):
2024
Years ended December 31,
2026
2025
2027
2028
Thereafter
Total
Fair value
Debt
Fixed rate (USD)
Average interest rate
$
391
5.89 %
$ 1,140
$ 1,182
$ 1,936
$
6.16 %
6.96 %
5.17 %
664
7.83 %
$ 1,970
$ 7,283
$ 7,308
7.41 %
At December 31, 2023 and 2022, the fair value of our outstanding debt was $7.31 billion and $6.41 billion,
respectively. During 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. 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.
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. 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, 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. 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. 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. The payment portion denominated in local currency is based on anticipated local currency requirements over the
contract term. 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. 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.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Management’s Report on Internal Control Over Financial Reporting
Management of Transocean Ltd. (the “Company,” “we” or “our”) is responsible for the integrity and objectivity of the
financial information included in this annual report. We have prepared our financial statements in accordance with accounting
principles generally accepted in the United States, which require us to apply our best judgement to make estimates and
assumptions for certain amounts. We are responsible for establishing and maintaining a system of internal controls and
procedures to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the
consolidated financial statements. Our internal control system is supported by a program of internal audits and appropriate
reviews by management, written policies and guidelines, careful selection of qualified personnel, and a written Code of
Integrity. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements
and, even when determined to be effective, can only provide reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of effectiveness in future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Management of the Company is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Management assessed the
effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, as
described in Internal Control-Integrated Framework, as published in 2013. Based on this assessment, management believes
that the Company maintained effective internal control over financial reporting as of December 31, 2023.
The Company’s independent auditors, Ernst & Young LLP, a registered public accounting firm, are appointed by the
audit committee of the Company’s board of directors, subject to ratification by our shareholders. Ernst & Young LLP has
audited and reported on the consolidated financial statements of Transocean Ltd. and subsidiaries, and the Company’s internal
control over financial reporting. The reports of the independent auditors are contained in this annual report.
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Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Transocean Ltd.
Opinion on Internal Control Over Financial Reporting
We have audited Transocean Ltd. and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Transocean Ltd. and subsidiaries (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated
statements of operations, comprehensive loss, equity and cash flows for each of the three years in the period ended
December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated
February 20, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Houston, Texas
February 20, 2024
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Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Transocean Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Transocean Ltd. and subsidiaries (the Company) as of
December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, equity and cash flows for
each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in
the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and
2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in
conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 20, 2024, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Description of the
Matter
Income Taxes
As discussed in Notes 2 and 11 to the consolidated financial statements, the Company operates in
multiple jurisdictions through a complex operating structure and is subject to applicable tax laws,
treaties or regulations in each jurisdiction where it operates. The Company’s provision for income
taxes is based on the tax laws and rates applicable in each jurisdiction. The Company recognizes tax
benefits they believe are more likely than not to be sustained upon examination by the taxing
authorities based on the technical merits of the position.
Auditing management’s provision for income taxes and related deferred taxes was complex because of
the Company’s multi-national operating structure. In addition, a higher degree of auditor judgment
was required to evaluate the Company’s deferred tax provision as a result of the Company’s
interpretation of tax law in certain jurisdictions across its multiple subsidiaries.
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Table of Contents
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
over the Company’s income tax provision process, including controls over management’s review of
the identification and valuation of deferred income taxes and changes in tax laws and regulations that
may impact the Company’s deferred income tax provision.
Our audit procedures also included, among others, (i) obtaining an understanding of the Company’s
overall tax structure, evaluating changes in the Company’s tax structure that occurred during the year
as well as changes in tax law, and assessing the interpretation of those changes under the relevant
jurisdiction’s tax law; (ii) utilizing tax resources with appropriate knowledge of local jurisdictional
laws and regulations; (iii) evaluating the completeness and accuracy of deferred income taxes, and
(iv) assessing the reasonableness of the Company’s valuation allowance on deferred tax assets,
including projections of taxable income from the future reversal of existing taxable temporary
differences.
Loss on Disposal of Ocean Rig Olympia
As discussed in Notes 4 and 7 to the consolidated financial statements, the Company made 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 a noncontrolling ownership interest in Global Sea Mineral
Resources NV. As a result, the Company recognized a loss of $169 million, associated with the
disposal of the rig and related assets for the year ended December 31, 2023.
Auditing management’s estimate of the fair value of Ocean Rig Olympia and related assets was
complex and judgmental due to the estimation required in determining the fair value of
Ocean Rig Olympia. In particular, the fair value estimate of Ocean Rig Olympia was sensitive to
significant assumptions such as the discount rate, rig utilization, revenue efficiency and dayrates.
Description of the
Matter
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
over the Company’s process to determine the fair value of the rig and related loss on disposal of assets
calculation, including controls over management’s review of the significant assumptions described
above as well as over the underlying data used in the fair value and related loss determination.
To test the estimated fair value of Ocean Rig Olympia we performed audit procedures that included,
among others, (i) assessing the valuation methodologies utilized by management; (ii) testing the
significant assumptions discussed above; (iii) testing the completeness and accuracy of the underlying
data used by the Company in its analysis; and (iv) testing the mathematical accuracy of the fair value
and related loss on disposal of assets calculations. We involved a valuation specialist to assist in our
evaluation of the Company's model, valuation methodology and significant assumptions. We
reviewed for contrary evidence related to the determination of the fair value of the rig and related loss
on disposal of assets, including reviewing relevant market data and internal Company forecasts.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1999.
Houston, Texas
February 20, 2024
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Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
Years ended December 31,
2022
2021
2023
Contract drilling revenues
Costs and expenses
Operating and maintenance
Depreciation and amortization
General and administrative
Loss on impairment of assets
Loss on disposal of assets, net
Operating loss
Other income (expense), net
Interest income
Interest expense, net of amounts capitalized
Gain (loss) on retirement of debt
Other, net
Loss before income tax expense
Income tax expense
Net loss
Net income attributable to noncontrolling interest
Net loss attributable to controlling interest
Loss per share, basic and diluted
Weighted-average shares, basic and diluted
See accompanying notes.
- 43 -
$ 2,832
$
2,575 $
2,556
1,986
744
187
2,917
(57)
(183)
(325)
52
(646)
(31)
9
(616)
(941)
13
1,679
735
182
2,596
—
(10)
(31)
27
(561)
8
(5)
(531)
(562)
59
(954)
—
(954) $
(621)
—
(621) $
1,697
742
167
2,606
—
(62)
(112)
15
(447)
51
23
(358)
(470)
121
(591)
1
(592)
(1.24) $
(0.89) $
768
699
(0.93)
637
$
$
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)
Years ended December 31,
2022
2023
2021
Net loss
Net income attributable to noncontrolling interest
Net loss attributable to controlling interest
Components of net periodic benefit costs before reclassifications
Components of net periodic benefit costs reclassified to net loss
Other comprehensive income (loss) before income taxes
Income taxes related to other comprehensive income (loss)
Other comprehensive income (loss)
Other comprehensive income attributable to noncontrolling interest
Other comprehensive income (loss) attributable to controlling interest
Total comprehensive loss
Total comprehensive income attributable to noncontrolling interest
Total comprehensive loss attributable to controlling interest
$
(954) $
—
(954)
(621) $
—
(621)
(591)
1
(592)
6
—
6
2
8
—
8
(109)
3
(106)
5
(101)
—
(101)
175
10
185
(6)
179
—
179
(946)
—
(946) $
(722)
—
(722) $
(412)
1
(413)
$
See accompanying notes.
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Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
Assets
Cash and cash equivalents
Accounts receivable, net
Materials and supplies, net
Restricted cash and cash equivalents
Other current assets
Total current assets
Property and equipment
Less accumulated depreciation
Property and equipment, net
Contract intangible assets
Deferred tax assets, net
Other assets
Total assets
Liabilities and equity
Accounts payable
Accrued income taxes
Debt due within one year
Other current liabilities
Total current liabilities
Long-term debt
Deferred tax liabilities, net
Other long-term liabilities
Total long-term liabilities
Commitments and contingencies
Shares, CHF 0.10 par value, 1,021,294,549 authorized, 142,362,093 conditionally authorized, 843,715,858
issued
and 809,030,846 outstanding at December 31, 2023, and 905,093,509 authorized, 142,362,675 conditionally
authorized, 797,244,753 issued and 721,888,427 outstanding at December 31, 2022
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss
Total controlling interest shareholders’ equity
Noncontrolling interest
Total equity
Total liabilities and equity
See accompanying notes.
- 45 -
December 31,
2023
2022
$
$
$
$
762
512
426
233
193
2,126
23,875
(6,934)
16,941
4
44
1,139
20,254
323
23
370
681
1,397
7,043
540
858
8,441
81
14,544
(4,033)
(177)
10,415
1
10,416
20,254
$
$
$
$
683
485
388
308
144
2,008
24,217
(6,748)
17,469
56
13
890
20,436
281
19
719
539
1,558
6,628
493
965
8,086
71
13,984
(3,079)
(185)
10,791
1
10,792
20,436
Table of Contents
Shares
Balance, beginning of period
Issuance of shares
Balance, end of period
Additional paid-in capital
Balance, beginning of period
Share-based compensation
Issuance of shares
Issuance of warrants
Balance, end of period
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions)
Years ended December 31,
2023 2022 2021
Quantity
Years ended December 31,
2022
2021
2023
Amount
722
87
809
655
67
722
615
40
655
$
$
71 $
10
81 $
64 $
7
71 $
60
4
64
$13,984 $13,683 $13,501
28
154
—
$14,544 $13,984 $13,683
29
256
16
40
520
—
Accumulated deficit
Balance, beginning of period
Net loss attributable to controlling interest
Balance, end of period
Accumulated other comprehensive loss
Balance, beginning of period
Other comprehensive income (loss) attributable to controlling interest
Balance, end of period
Total controlling interest shareholders’ equity
Balance, beginning of period
Total comprehensive loss attributable to controlling interest
Share-based compensation
Issuance of shares
Issuance of warrants
Balance, end of period
Noncontrolling interest
Balance, beginning of period
Total comprehensive income attributable to noncontrolling interest
Acquisition of noncontrolling interest
Balance, end of period
Total equity
Balance, beginning of period
Total comprehensive loss
Share-based compensation
Issuance of shares
Issuance of warrants
Acquisition of noncontrolling interest
Balance, end of period
See accompanying notes.
- 46 -
$ (3,079) $ (2,458) $ (1,866)
(592)
$ (4,033) $ (3,079) $ (2,458)
(954)
(621)
$ (185) $
8
(84) $ (263)
179
(101)
(84)
$ (177) $ (185) $
$10,791 $11,205 $11,432
(413)
28
158
—
$10,415 $10,791 $11,205
(946)
40
530
—
(722)
29
263
16
$
$
1 $
—
—
1 $
1 $
—
—
1 $
3
1
(3)
1
$10,792 $11,206 $11,435
(412)
28
158
—
(3)
$10,416 $10,792 $11,206
(722)
29
263
16
—
(946)
40
530
—
—
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Years ended December 31,
2022
2023
2021
Cash flows from operating activities
Net loss
Adjustments to reconcile to net cash provided by operating activities:
Amortization of contract intangible asset
Depreciation and amortization
Share-based compensation expense
Loss on impairment of assets
Loss on impairment of investment in unconsolidated affiliates
Loss on disposal of assets, net
Fair value adjustment to bifurcated compound exchange feature
Amortization of debt-related balances, net
(Gain) loss on retirement of debt
Deferred income tax expense
Other, net
Changes in deferred revenues, net
Changes in deferred costs, net
Changes in other operating assets and liabilities, net
Net cash provided by operating activities
Cash flows from investing activities
Capital expenditures
Investments in equity of unconsolidated affiliates
Investment in loans to unconsolidated affiliates
Proceeds from disposal of assets, net
Cash acquired in acquisition of unconsolidated affiliate
Net cash used in investing activities
Cash flows from financing activities
Repayments of debt
Proceeds from issuance of debt, net of issue costs
Proceeds from issuance of shares, net of issue costs
Proceeds from issuance of warrants, net of issue costs
Other, net
Net cash provided by (used in) financing activities
$
(954) $
(621) $
(591)
52
744
40
57
5
183
127
51
31
18
43
70
(190)
(113)
164
(427)
(10)
(3)
10
7
(423)
(1,717)
1,983
—
—
(3)
263
117
735
29
—
—
10
157
33
(8)
46
44
(20)
1
(75)
448
(717)
(42)
(5)
7
—
(757)
(554)
175
263
12
(8)
(112)
220
742
28
—
37
62
—
25
(51)
128
52
(108)
(6)
37
575
(208)
(1)
(33)
9
—
(233)
(606)
—
158
—
(42)
(490)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents
Unrestricted and restricted cash and cash equivalents, beginning of period
Unrestricted and restricted cash and cash equivalents, end of period
4
991
995
(421)
1,412
991
$
(148)
1,560
1,412
$
$
See accompanying notes.
- 47 -
Table of Contents
NOTE 1—BUSINESS
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Transocean Ltd. (together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,”
“we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas wells. As of
December 31, 2023, we owned or had partial ownership interests in and operated a fleet of 37 mobile offshore drilling units,
consisting of 28 ultra-deepwater floaters and nine harsh environment floaters. As of December 31, 2023, we were constructing
one ultra-deepwater drillship.
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. 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.
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. The location of our rigs and
the allocation of our resources to build or upgrade rigs are determined by the activities and needs of our customers.
NOTE 2—SIGNIFICANT ACCOUNTING POLICIES
Accounting estimates—To prepare financial statements in accordance with accounting principles generally accepted
in the United States (“U.S.”), we must make judgments by applying estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities. On an ongoing basis, we
evaluate our estimates and assumptions, including those related to our income taxes, property and equipment, equity
investments, contingencies, allowance for excess materials and supplies, assets held for sale, intangibles, postemployment
benefit plans and share-based compensation. We base our estimates and assumptions on historical experience and other factors
that we believe are reasonable. Actual results could differ from such estimates.
Fair value measurements—We estimate fair value at an exchange price that would be received to sell an asset or paid
to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants. Our valuation techniques require inputs that we categorize using a three-level hierarchy, from highest to
lowest level of observable inputs, as follows: (1) significant observable inputs, including unadjusted quoted prices for identical
assets or liabilities in active markets (“Level 1”), (2) significant other observable inputs, including direct or indirect market data
for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and
(3) significant unobservable inputs, including those that require considerable judgment for which there is little or no market data
(“Level 3”). When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the
lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are
more readily observable.
Consolidation—We consolidate entities in which we have a majority voting interest and entities that meet the criteria
for variable interest entities for which we are deemed to be the primary beneficiary for accounting purposes. We eliminate
intercompany transactions and accounts in consolidation. We apply the equity method of accounting for an equity investment in
an unconsolidated entity if we have the ability to exercise significant influence over the entity that (a) does not meet the variable
interest entity criteria or (b) meets the variable interest entity criteria, but for which we are not deemed to be the primary
beneficiary. We measure other equity investments at fair value if the investment has a fair value that is readily determinable;
otherwise, we measure the investment at cost, less any impairment. We separately present within equity on our consolidated
balance sheets the ownership interests attributable to parties with noncontrolling interests in our consolidated subsidiaries, and
we separately present net income attributable to such parties on our consolidated statements of operations. See Note 4—
Unconsolidated Affiliates and Note 14—Equity.
Functional currency—We consider the U.S. dollar to be the functional currency for all of our operations since the
majority of our revenues and expenditures are denominated in U.S. dollars, which limits our exposure to currency exchange rate
fluctuations. We recognize currency exchange rate gains and losses in other, net. In the years ended December 31, 2023, 2022
and 2021, we recognized a net gain of $10 million, a net loss of $8 million and a net loss of $1 million, respectively, related to
currency exchange rates.
Revenues and related pre-operating costs—We recognize revenues earned under our drilling contracts based on
variable dayrates, which range from a full operating dayrate to lower rates or zero rates for periods when drilling operations are
interrupted or restricted, based on the specific activities we perform during the contract on an hourly, or more frequent, basis.
Such dayrate consideration is attributed to the distinct time period to which it relates within the contract term, and therefore, is
recognized as we perform the services. When the operating dayrate declines over the contract term, we recognize revenues on a
straight-line basis over the estimated contract period. We recognize reimbursement revenues and the corresponding costs as we
provide the customer-requested goods and services, when such reimbursable costs are incurred while performing drilling
operations. Prior to performing drilling operations, we may receive pre-operating revenues, on either a fixed lump-sum or
variable dayrate basis, for mobilization, contract preparation, customer-requested goods and services or capital upgrades, for
which we record a contract liability and recognize as revenues on a straight-line basis over the estimated contract period. We
recognize losses for loss contracts as such losses are incurred. We recognize revenues for demobilization
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Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
over the contract period unless otherwise constrained. We recognize revenues from contract terminations as we fulfill our
obligations and all contingencies have been resolved. We apply the optional exemption that permits us to exclude disclosure of
the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting
period, as our transaction price is typically based on a single performance obligation consisting of a series of distinct hourly, or
more frequent, periods, the variability of which will be resolved at the time of the future services.
To obtain contracts with our customers, we incur pre-operating costs to prepare a rig for contract and mobilize a rig to
the drilling location. We defer such pre-operating contract preparation and mobilization costs for recognition in operating and
maintenance costs over the estimated contract period on a straight-line basis, consistent with the general pace of activity. See
Note 5—Revenues.
Income taxes—We provide for income taxes based on expected taxable income, statutory rates and tax laws in the
jurisdictions in which we operate or have a taxable presence. We recognize the effect of changes in tax laws as of the date of
enactment. We recognize potential global intangible low-taxed income inclusions as a period cost.
We maintain liabilities for estimated tax exposures in our jurisdictions of operation, and we recognize the provisions
and benefits resulting from changes to those liabilities in our income tax expense or benefit along with related interest and
penalties. Income tax exposure items include potential challenges to permanent establishment positions, intercompany pricing,
disposition transactions, and withholding tax rates and their applicability. These tax exposures are resolved primarily through
the settlement of audits within these tax jurisdictions or by judicial means, but can also be affected by changes in applicable tax
law or other factors, which could cause us to revise past estimates.
We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the deferred
tax assets and liabilities are expected to be recovered or paid. In evaluating our ability to realize deferred tax assets, we
consider all available positive and negative evidence, including projected future taxable income and the existence of cumulative
losses in recent years. We record a valuation allowance for deferred tax assets when it is more likely than not that some or all of
the benefit from the deferred tax asset will not be realized. For example, we may record a valuation allowance for deferred tax
assets resulting from net operating losses incurred during the year in certain jurisdictions for which the benefit of the losses will
not be realized or for foreign tax credit carryforwards that may expire prior to their utilization. See Note 11—Income Taxes.
Cash and cash equivalents—We consider cash equivalents to include highly liquid debt instruments with original
maturities of three months or less, such as time deposits with commercial banks that have high credit ratings, U.S. Treasury and
government securities, Eurodollar time deposits, certificates of deposit and commercial paper. We may also invest excess funds
in no-load, open-ended, management investment trusts. Such management trusts invest exclusively in high-quality money
market instruments.
Restricted cash and cash equivalents—We maintain restricted cash and cash equivalents that are either pledged for
debt service under certain bond indentures, as required under certain bank credit arrangements, or held in accounts that are
subject to restrictions due to legislation, regulation or court order. We classify such restricted cash and cash equivalents in
current assets if the restriction is expected to expire or otherwise be resolved within one year or if such funds are considered to
offset liabilities that are properly classified as current liabilities. See Note 9—Debt.
Materials and supplies—We record materials and supplies at their average cost less an allowance for excess items.
We estimate the allowance for excess items based on historical experience and expectations for future use of the materials and
supplies. At December 31, 2023 and 2022, our allowance for excess items was $198 million and $199 million, respectively.
Property and equipment—We apply judgment to account for our property and equipment, consisting primarily of
offshore drilling rigs and related equipment, related to estimates and assumptions for cost capitalization, useful lives and
salvage values. We base our estimates and assumptions on historical experience and expectations regarding future industry
conditions and operations. At December 31, 2023, the aggregate carrying amount of our property and equipment represented
approximately 84 percent of our total assets.
We capitalize expenditures for newbuilds, renewals, replacements and improvements, including capitalized interest, if
applicable, and we recognize the expense for maintenance and repair costs as incurred. For newbuild construction projects, we
also capitalize the initial preparation, mobilization and commissioning costs incurred until the drilling unit is placed into
service. Upon sale or other disposition of an asset, we recognize a net gain or loss on disposal of the asset, which is measured
as the difference between the net carrying amount of the asset and the net proceeds received. We compute depreciation using
the straight-line method after allowing for salvage values.
The estimated original useful life of our drilling units is 35 years, our buildings and improvements range from three to
30 years and our machinery and equipment range from four to 20 years. We reevaluate the remaining useful lives and salvage
values of our rigs when certain events occur that directly impact the useful lives and salvage values of the rigs, including
changes in operating condition, functional capability and market and economic factors. When evaluating the remaining useful
lives of rigs, we also consider major capital upgrades required to perform certain contracts and the long-term impact of those
upgrades on future marketability.
Long-lived asset impairment—We review the carrying amounts of long-lived assets, including property and
equipment and right-of-use assets, for potential impairment when events occur or circumstances change that indicate that the
carrying amount of such assets may not be recoverable. For assets classified as held and used, we determine recoverability by
evaluating the estimated undiscounted future net cash flows based on projected dayrates and utilization of the asset group under
review. We consider our asset groups to be
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Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
ultra-deepwater floaters and harsh environment floaters. When an impairment of one or more of our asset groups is indicated,
we measure an impairment as the amount by which the carrying amount of the asset group exceeds its estimated fair value. We
measure the fair values of our asset groups by applying a variety of valuation methods, incorporating a combination of income,
market and cost approaches, using projected discounted cash flows and estimates of the exchange price that would be received
for the assets in the principal or most advantageous market for the assets in an orderly transaction between market participants
as of the measurement date. For an asset classified as held for sale, we consider the asset to be impaired to the extent its
carrying amount exceeds its estimated fair value less cost to sell. See Note 7—Long-Lived Assets.
Equity investments and impairment—We review our equity-method investments, and other equity investments for
which a readily determinable fair value is not available, for potential impairment when events or changes in circumstances
indicate that the carrying amount of the investment might not be recoverable in the near term. If we determine that an
impairment that is other than temporary exists, we recognize an impairment loss, measured as the amount by which the carrying
amount of the investment exceeds its estimated fair value. To estimate the fair value of the investment, we apply valuation
methods that rely primarily on the income and market approaches. In the years ended December 31, 2023 and 2021, we
recognized a loss of $5 million and $37 million, respectively, associated with the other-than-temporary impairment of the
carrying amount of our equity investments. We amortize the basis difference caused by such impairments using the straight-line
method over the estimated life of the asset. See Note 4—Unconsolidated Affiliates.
Pension and other postemployment benefit plans—We use a measurement date of January 1 for determining net
periodic benefit costs and December 31 for determining plan benefit obligations and the fair values of plan assets. We
determine our net periodic benefit costs based on a market-related value of assets that reduces year-to-year volatility by
including investment gains or losses subject to amortization over a five-year period from the year in which they occur. We
calculate investment gains or losses for this purpose as the difference between the expected return calculated using the market-
related value of assets and the actual return based on the market-related value of assets. If gains or losses exceed 10 percent of
the greater of plan assets or plan liabilities, we amortize such gains or losses over the average expected future service period of
the employee participants.
We measure the actuarially determined obligations and related costs for our defined benefit pension and other
postemployment benefit plans, retiree life insurance and medical benefits, by applying assumptions, the most significant of
which include long-term rate of return on plan assets, discount rates and mortality rates. For the long-term rate of return, we
develop our assumptions regarding the expected rate of return on plan assets based on historical experience and projected long-
term investment returns, and we weight the assumptions based on each plan’s asset allocation. For the discount rate, we base
our assumptions on a yield curve approach using Aa-rated corporate bonds and the expected timing of future benefit payments.
At December 31, 2023 and 2022, the funded status of our pension and other postemployment benefit plans represented an
aggregate liability of $125 million and $174 million, respectively, and an aggregate asset of $31 million and $44 million,
respectively. See Note 10—Postemployment Benefit Plans.
Share-based compensation—To measure the fair values of granted or modified service-based restricted share units,
we use the market price of our shares on the grant date or modification date. To measure the fair values of granted or modified
performance-based restricted share units subject to market factors, we use an average price at the performance start date and
project performance based on a Monte Carlo simulation model under a risk-neutral approach and apply assumptions for the
expected life, risk-free interest rate, expected volatility and dividend yield. To measure the fair values of granted or modified
performance-based restricted share units that are subject to performance targets, we use the market price of our shares on the
grant date or modification date and adjust the value for the projected performance rate expected to be achieved at the end of the
measurement period. We recognize share-based compensation expense in the same financial statement line item as cash
compensation paid to the respective employees or non-employee directors. We recognize such compensation expense on a
straight-line basis over the service period through the date the employee or non-employee director is no longer required to
provide service to earn the award. See Note 15—ShareBased Compensation.
Contingencies—We assess our contingencies on an ongoing basis to evaluate the appropriateness of our liabilities and
disclosures for such contingencies. We establish liabilities for estimated loss contingencies when we believe a loss is probable
and the amount of the probable loss can be reasonably estimated. Once established, we adjust the carrying amount of a
contingent liability upon the occurrence of a recognizable event when facts and circumstances change, altering our previous
assumptions with respect to the likelihood or amount of loss. We recognize corresponding assets for those loss contingencies
that we believe are probable of being recovered through insurance. We recognize expense for legal costs as they are incurred,
and we recognize a corresponding asset for such legal costs only if we expect such legal costs to be recovered through
insurance.
NOTE 3—ACCOUNTING STANDARDS UPDATE
Recently issued accounting standards updates not yet adopted
Segment reporting—Effective no later than January 1, 2024, we will adopt the accounting standards update that
requires incremental disclosures about a public entity’s reportable segments but does not change the definition or guidance for
determining reportable segments. The update, which explicitly applies to entities such as us with a single reportable segment,
requires disclosure of the significant expense categories and amounts that are regularly provided to the chief operating decision-
maker and included in the reported measure of segment profit or loss. Additionally, the update requires disclosures about the
individual or the group or committee identified as the chief
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Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
operating decision-maker. The update, which permits early adoption, is effective for annual periods beginning after
December 15, 2023 and must be applied retrospectively to all periods presented, unless impracticable. We continue to evaluate
the requirements and do not expect our adoption to have a material effect on our consolidated statements of financial position,
operations or cash flows or on the disclosures contained in our notes to consolidated financial statements.
Income taxes—Effective no later than January 1, 2025, we will adopt the accounting standards update that requires
significant additional disclosures intended to enhance the transparency and decision-usefulness of income tax disclosures,
particularly in the rate reconciliation table and disclosures about income taxes paid. The new guidance will be applied
prospectively and permits, but does not require, retrospective application. The update, which permits early adoption, is
effective for annual periods beginning after December 15, 2024. We continue to evaluate the requirements. Although we
expect our adoption will require us to augment certain disclosures in our notes to consolidated financial statements, we do not
expect our adoption to have a material effect on our consolidated statements of financial position, operations or cash flows.
NOTE 4—UNCONSOLIDATED AFFILIATES
Equity investments
Overview—At December 31, 2023, we hold equity investments in certain unconsolidated companies, including (a) our
16 percent ownership interest in Global Sea Mineral Resources NV (together with its subsidiaries, “GSR”), a 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, (b) our 33 percent ownership interest
in Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”), a Cayman Islands company that owns the harsh
environment floater Transocean Norge, (c) our 19 percent ownership interest in Ocean Minerals LLC (together with its
subsidiaries, “Ocean Minerals”), the parent company of Moana Minerals Ltd., a Cook Islands subsea resource development
company that intends to explore and collect polymetallic nodules, (d) our 22 percent ownership interest in Nauticus
Robotics, Inc., a publicly traded company that develops highly sophisticated, ultra-sustainable marine robots and intelligent
software to power them, and (e) our ownership interests in other companies involved in researching and developing technology
to improve efficiency, reliability, sustainability and safety for drilling and other activities.
In the years ended December 31, 2023, 2022 and 2021, we recognized a net loss of $14 million, $24 million and
$10 million, respectively, recorded in other income and expense, associated with equity in losses of our equity investments. At
December 31, 2023 and 2022, the aggregate carrying amount of our equity investments was $216 million and $113 million,
respectively, recorded in other assets.
Contributions—In February 2023, we made a cash contribution of $10 million and a non-cash contribution of the
ultra-deepwater floater Ocean Rig Olympia, which had been cold stacked, and related assets, with an estimated fair value of
$85 million (see Note 7—Long-Lived Assets), in exchange for an equity ownership interest in GSR. We estimated the fair
value of the rig using projected discounted cash flows, and our estimate required us to use significant unobservable inputs,
representative of Level 3 fair value measurements, including assumptions related to the future performance of the rig, projected
demand for its services, rig availability and dayrates. In the year ended December 31, 2022, we made an aggregate cash
contribution of $42 million for partial equity ownerships in various companies, including among others, our initial investments
in Liquila Ventures Ltd. (together with its subsidiaries, “Liquila”) and Ocean Minerals.
Impairments—In the years ended December 31, 2023 and 2021, we recognized a loss of $5 million and $37 million,
respectively, which had no tax effect, recorded in other, net, associated with the impairment of certain equity investments upon
determination that the carrying amount exceeded the estimated fair value and that the impairment was other than temporary.
For the impairment in the year ended December 31, 2021, we estimated the fair value of our investment by applying the
income method using significant unobservable inputs, representative of Level 3 fair value measurements, including an assumed
discount rate of 12 percent and assumptions about the future performance of the investment, such as future demand and supply
for harsh environment floaters, rig utilization, revenue efficiency and dayrates.
Related party transactions
Operating activities—We engage in certain related party transactions with our unconsolidated affiliates. Our most
significant transactions with our unconsolidated affiliates are under agreements with Orion as follows: (a) we operate, stack and
maintain Transocean Norge under a management services agreement, (b) we market Transocean Norge under a marketing
services agreement and (c) during operations, we lease Transocean Norge under a bareboat charter agreement. Additionally, we
procure and provide services and equipment from and to other unconsolidated affiliates for technological innovation and subsea
minerals exploration.
In the years ended December 31, 2023, 2022 and 2021, we incurred costs of approximately $55 million, $54 million
and $24 million, respectively, for Transocean Norge, primarily for contract preparation and upgrade shipyard costs, which are
reimbursable from Orion, the owner of the rig. In the years ended December 31, 2023, 2022 and 2021, we received an
aggregate cash payment of $49 million, $40 million and $16 million, respectively, for services and equipment provided to
Orion. Additionally, in the year ended December 31, 2023, we and Orion agreed to the non-cash net settlement of a balance of
$25 million of accounts receivable and payable. In the years ended December 31, 2023, 2022 and 2021, we recognized rent
expense of $26 million, $11 million and $12 million, respectively, recorded in
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
operating and maintenance costs, and made an aggregate cash payment of $27 million, $10 million and $15 million,
respectively, to charter the rig and rent other equipment from Orion.
In the years ended December 31, 2023, 2022 and 2021, we made an aggregate cash payment of $12 million, $7 million
and $6 million, respectively, to other unconsolidated affiliates for research and development and for equipment to reduce
emissions and improve reliability. At December 31, 2023 and 2022, our accounts receivable from affiliates was $14 million and
$32 million, respectively, recorded in other current assets, and our accounts payable to affiliates was $4 million and $2 million,
respectively, recorded in accounts payable.
Acquisition—In November 2022, we and Perestroika AS (together with its subsidiaries, “Perestroika”), an entity
affiliated with one of our directors that beneficially owns approximately 11 percent of our shares, each made a cash contribution
of $15 million and $10 million, respectively, to Liquila, a previously unconsolidated variable interest entity, that is constructing
the ultra-deepwater floater Deepwater Aquila. Together with a contribution from the holder of the remaining 67 percent
ownership interest, these contributions were used to make the initial payment to the shipyard to acquire the newbuild drillship
for a purchase price of approximately $200 million. At December 31, 2022, the aggregate carrying amount of our investment in
Liquila was $15 million, recorded in other assets. On September 15, 2023, we issued 11.9 million Transocean Ltd. shares with
an aggregate value of $99 million, which included 2.0 million Transocean Ltd. shares with an aggregate value of $16.4 million
issued to Perestroika, to acquire the outstanding ownership interests in Liquila, and as a result, Liquila became our wholly
owned subsidiary. See Note 7—Long Lived Assets and Note 14—Equity.
Debt investments—We occasionally invest in debt instruments of our unconsolidated affiliates. In June 2021, we
made a cash investment of $33 million in a $100 million financing arrangement for Orion to refinance its shipyard loans.
Borrowings under the financing arrangement were secured by Transocean Norge, and outstanding borrowings incurred interest
at the London Interbank Offered Rate plus a margin of 6.50 percent per annum. At December 31, 2022, the aggregate carrying
amount of our investment in the financing arrangement was $37 million, recorded in other assets. In September 2023, we
agreed to exchange the borrowings under the financing arrangement for an additional equity investment in Orion, and Orion
subsequently entered into a new credit facility with another lender. At December 31, 2023 and 2022, the aggregate principal
amount due to us under the various financing arrangements with our unconsolidated affiliates was $6 million and $41 million,
respectively, recorded in other assets.
NOTE 5—REVENUES
Overview—We earn revenues primarily by performing the following activities: (i) providing our drilling rig, work
crews, related equipment and services necessary to operate the rig (ii) delivering the drilling rig by mobilizing to and
demobilizing from the drill location, and (iii) performing certain pre-operating activities, including rig preparation activities or
equipment modifications required for the contract. These services represent a single performance obligation under most of our
drilling contracts with customers that is satisfied over time, the duration of which varies by contract. At December 31, 2023, the
drilling contract with the longest expected remaining duration, excluding unexercised options, extends through July 2029.
Disaggregation—Our contract drilling revenues, disaggregated by asset group and by country in which they were
earned, were as follows (in millions):
U.S.
Norway
Brazil
Other countries (a)
Total contract drilling revenues
Year ended December 31, 2023
Ultra-
Harsh
deepwater environment
floaters
floaters
Total
$ 1,433 $ — $ 1,433
603
603
298
—
157
498
760 $ 2,832
—
298
341
$ 2,072 $
Total
Year ended December 31, 2022
Harsh
Ultra-
environment
deepwater
floaters
floaters
$ 1,135 $ — $ 1,135
835
835
240
—
32
365
867 $ 2,575
—
240
333
$ 1,708 $
Year ended December 31, 2021
Harsh
Ultra-
environment
deepwater
floaters
floaters
Total
$ 1,096 $
—
237
387
$ 1,720 $
2 $ 1,098
790
790
237
—
44
431
836 $ 2,556
(a) The aggregate contract drilling revenues earned in other countries that individually represented less than 10 percent of total contract drilling revenues.
Major customers—For the year ended December 31, 2023, Shell plc (together with its affiliates, “Shell”),
Equinor ASA (together with its affiliates, “Equinor”), TotalEnergies SE and Petróleo Brasileiro S.A. (together with its affiliates,
“Petrobras”) represented approximately 27 percent, 16 percent, 12 percent and 11 percent, respectively, of our consolidated
operating revenues. For the year ended December 31, 2022, Shell, Equinor and Petrobras represented approximately
33 percent, 25 percent and 11 percent, respectively, of our consolidated operating revenues. For the year ended December 31,
2021, Shell and Equinor represented approximately 31 percent and 30 percent, respectively, of our consolidated operating
revenues.
- 52 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Contract liabilities—Contract liabilities for our contracts with customers were as follows (in millions):
Deferred contract revenues, recorded in other current liabilities
Deferred contract revenues, recorded in other long-term liabilities
Total contract liabilities
Significant changes in contract liabilities were as follows (in millions):
Total contract liabilities, beginning of period
Decrease due to recognition of revenues for goods and services
Increase due to goods and services transferred over time
Total contract liabilities, end of period
December 31, December 31,
2023
2022
$
$
165
233
398
$
$
124
204
328
Years ended
December 31,
2023
2022
$
$
328
(189)
259
398
$
$
348
(119)
99
328
Pre-operating costs—In the years ended December 31, 2023, 2022 and 2021, we recognized pre-operating costs of
$69 million, $47 million and $48 million, respectively, recorded in operating and maintenance costs. At December 31, 2023
and 2022, the unrecognized pre-operating costs to obtain contracts was $221 million and $26 million, respectively, recorded in
other assets, significantly increased as a result of six rigs mobilizing or preparing for contracts that commenced in the
three months ended December 31, 2023, or expected to commence in the three months ending March 31, 2024.
NOTE 6—CONTRACT INTANGIBLE ASSETS
The gross carrying amount and accumulated amortization of our drilling contract intangible assets were as follows
(in millions):
Year ended December 31, 2023
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Year ended December 31, 2022
Gross
carrying
amount
amortization amount
Net
carrying
Accumulated
Drilling contract intangible assets
Balance, beginning of period
Amortization
Balance, end of period
$
$
907 $
—
907 $
(851) $
(52)
(903) $
56
(52)
4
$
$
907
—
907
$
$
(734) $
(117)
(851) $
173
(117)
56
We expect to recognize the remaining $4 million balance in contract drilling revenues in the three months ending
March 31, 2024.
NOTE 7—LONG-LIVED ASSETS
Disaggregation—The aggregate carrying amount of our long-lived assets, including our property and equipment and
our right-of-use assets, disaggregated by country in which they were located, was as follows (in millions):
Long-lived assets
U.S.
Greece
Norway
Other countries (a)
Total long-lived assets
December 31,
2023
2022
$
7,472
2,652
2,103
5,200
$ 17,427
$
6,514
3,022
3,255
5,171
$ 17,962
(a) The aggregate carrying amount of long-lived assets located in other countries that individually represented less than 10 percent
of total long-lived assets.
Because the majority of our assets are mobile, the geographic locations of such assets at the end of the periods are not
necessarily indicative of the geographic distribution of the operating revenues generated by such assets during the periods
presented. Our international operations are subject to certain political and other uncertainties, including risks of war and civil
disturbances or other market disrupting events, expropriation of equipment, repatriation of income or capital, taxation policies,
and the general hazards associated with certain areas in which we operate. Although we are organized under the laws of
Switzerland, we have minimal assets located in Switzerland, and we do not conduct any operations or earn operating revenues
in Switzerland.
- 53 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Construction work in progress—The changes in our construction work in progress were as follows (in millions):
Construction work in progress, beginning of period
Capital expenditures
Newbuild construction program
Other equipment and construction projects
Total capital expenditures
Non-cash capital additions acquired in exchange for issuance of shares
Non-cash capital additions financed under Shipyard Loans
Changes in accrued capital additions
Property and equipment placed into service
Newbuild construction program
Other equipment and construction projects
Construction work in progress, end of period
Years ended December 31,
2023
$ 1,195
2022
$ 1,017
2021
$
828
331
96
427
126
—
5
669
48
717
—
382
3
174
34
208
—
—
13
(1,157)
(74)
522
$
(882)
(42)
$ 1,195
—
(32)
$ 1,017
In the years ended December 31, 2023, 2022 and 2021, we capitalized interest costs of $39 million, $73 million and
$50 million, respectively, for our construction work in progress.
Acquisition—In September 2023, we acquired $126 million of property and equipment associated with
Deepwater Aquila, an ultra-deepwater drillship under construction for Liquila, together with $7 million of cash and cash
equivalents, and we assumed $19 million of accounts payable. See Note 4—Unconsolidated Affiliates and Note 14—Equity.
Disposals—During the year ended December 31, 2023, in connection with our investment in a partial ownership
interest in GSR, we made a non-cash contribution of the cold-stacked ultra-deepwater floater Ocean Rig Olympia and related
assets. In the year ended December 31, 2023, we recognized a loss of $169 million ($0.22 per diluted share), which had no tax
effect, associated with the disposal of the rig and related assets (see Note 4—Unconsolidated Affiliates). During the year ended
December 31, 2021, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the harsh
environment floater Leiv Eiriksson and related assets. In the year ended December 31, 2021, we received net cash proceeds of
$4 million, and recognized an aggregate net loss of $57 million ($0.09 per diluted share), which had no tax effect, associated
with the disposal of the rig and related assets. In the years ended December 31, 2023, 2022 and 2021, we received aggregate
net cash proceeds of $4 million, $7 million and $5 million, respectively and recognized an aggregate net loss of $14 million,
$10 million and $5 million, respectively, associated with the disposal of assets unrelated to rig sales.
Impairment—In June 2023, we committed to the sale of the harsh environment floaters Paul B. Loyd, Jr. and
Transocean Leader and related assets for expected aggregate net cash proceeds of $49 million. In the year ended December 31,
2023, we recognized an aggregate loss of $57 million ($0.07 per diluted share), which had no tax effect, associated with the
impairment of the rigs and related assets, which we determined were impaired at the time that we classified the assets as held
for sale. We measured the impairment of the rigs and related assets as the amount by which the carrying amount exceeded the
estimated fair value less costs to sell. We estimated the fair value of the assets using significant other observable inputs,
representative of Level 2 fair value measurements, including a binding contract for the sale of the rigs and related assets.
Assets held for sale—At December 31, 2023, the aggregate carrying amount of our assets held for sale, including
Paul B. Loyd, Jr. and Transocean Leader and related assets, was $49 million, recorded in other current assets.
- 54 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
NOTE 8—LEASES
Overview—Our operating leases are principally for office space, storage facilities, operating equipment and land. At
December 31, 2023, our operating leases had a weighted-average discount rate of 6.7 percent and a weighted-average remaining
lease term of 10.7 years.
Our finance lease for the ultra-deepwater drillship Petrobras 10000 has an implicit interest rate of 7.8 percent and
requires scheduled monthly installments through the lease expiration in August 2029, after which we are obligated to acquire
the drillship from the lessor for one dollar. We recognize expense for the amortization of the right-of-use asset in depreciation
and amortization.
Lease costs—The components of our lease costs were as follows (in millions):
Lease costs
Short-term lease costs
Operating lease costs
Finance lease costs, amortization of right-of-use asset
Finance lease costs, interest on lease liability
Total lease costs
Years ended December 31,
2021
2022
2023
$
$
4 $
14
20
27
65 $
14 $
12
20
30
76 $
17
12
20
33
82
Lease payments—Supplemental cash flow information for our leases was as follows (in millions):
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Operating cash flows from finance lease
Financing cash flows from finance lease
Years ended December 31,
2021
2022
2023
$
17 $
—
—
14 $
8
3
13
37
33
At December 31, 2023, the aggregate future minimum lease payments were as follows (in millions):
Years ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total future minimum rental payment
Less amount representing imputed interest
Present value of future minimum rental payments
Current portion, recorded in other current liabilities
Long-term lease liabilities, recorded in other long-term liabilities
- 55 -
Operating Finance
leases
lease
$
$
19 $
19
18
15
13
89
173
(53)
120
12
108 $
65
70
71
70
71
47
394
(75)
319
43
276
Table of Contents
NOTE 9—DEBT
Overview
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Outstanding debt—The aggregate principal amounts and aggregate carrying amounts, including the contractual
interest payments of previously restructured debt, a bifurcated compound exchange feature, and unamortized debt-related
balances, such as discounts, premiums and issue costs, were as follows (in millions):
0.50% Exchangeable Senior Bonds due January 2023
5.375% Senior Secured Notes due May 2023
5.875% Senior Secured Notes due January 2024
7.75% Senior Secured Notes due October 2024
6.25% Senior Secured Notes due December 2024
6.125% Senior Secured Notes due August 2025
7.25% Senior Notes due November 2025
4.00% Senior Guaranteed Exchangeable Bonds due December 2025
7.50% Senior Notes due January 2026
2.50% Senior Guaranteed Exchangeable Bonds due January 2027
11.50% Senior Guaranteed Notes due January 2027
6.875% Senior Secured Notes due February 2027
8.00% Senior Notes due February 2027
7.45% Notes due April 2027
8.00% Debentures due April 2027
4.50% Shipyard Loans due September 2027
8.375% Senior Secured Notes due February 2028
7.00% Notes due June 2028
8.00% Senior Secured Notes due September 2028
4.625% Senior Guaranteed Exchangeable Bonds due September 2029
8.75% Senior Secured Notes due February 2030
7.50% Notes due April 2031
6.80% Senior Notes due March 2038
7.35% Senior Notes due December 2041
Total debt
Less debt due within one year
0.50% Exchangeable Senior Bonds due January 2023
5.375% Senior Secured Notes due May 2023
5.875% Senior Secured Notes due January 2024
7.75% Senior Secured Notes due October 2024
6.25% Senior Secured Notes due December 2024
6.125% Senior Secured Notes due August 2025
2.50% Senior Guaranteed Exchangeable Bonds due January 2027
11.50% Senior Guaranteed Notes due January 2027
6.875% Senior Secured Notes due February 2027
4.50% Shipyard Loans due September 2027
8.00% Senior Secured Notes due September 2028
8.75% Senior Secured Notes due February 2030
Total debt due within one year
Total long-term debt
Principal amount
Carrying amount
December 31, December 31, December 31, December 31,
2023
2022
2023
2022
(a)
(b)
(b)
(b)
(b)
(b)
(c)
(d)
(c)
(d)
(d)
(b)
(c)
(a)
(a)
(e)
(b)
(e)
(b)
(c)
(f)
(a)
(a)
(a)
(a)
(b)
(b)
(b)
(b)
(b)
(d)
(d)
(b)
(e)
(b)
(f)
$
$
— $
—
—
—
—
—
354
234
569
—
687
413
612
52
22
420
525
261
325
259
1,116
396
610
177
7,032
—
—
—
—
—
—
—
—
83
90
30
117
320
6,712
$
$
49
243
352
240
250
336
354
294
569
238
687
482
612
52
22
439
—
261
—
300
—
396
610
177
6,963
49
243
83
60
62
66
—
—
69
20
—
—
652
6,311 $
— $
—
—
—
—
—
352
221
567
—
938
409
609
52
22
384
518
264
321
486
1,094
395
605
176
7,413
—
—
—
—
—
—
—
71
81
75
30
113
370
7,043
$
49
242
350
238
248
332
351
271
566
265
1,008
477
608
52
22
389
—
264
—
440
—
394
605
176
7,347
49
242
81
59
61
64
6
70
67
20
—
—
719
6,628
(a) Transocean Inc., a wholly owned direct subsidiary of Transocean Ltd., is the issuer of the notes and debentures (the “Legacy Guaranteed Notes”).
The Legacy Guaranteed Notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd.
(b) Each subsidiary issuer of the respective unregistered notes is a wholly owned indirect subsidiary of Transocean Inc. The senior secured notes are
fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd., Transocean Inc. and, in each case, the owner of the respective
collateral rig or rigs.
(c) Transocean Inc. is the issuer of the unregistered notes (collectively, the “Priority Guaranteed Notes”). The guaranteed senior unsecured notes are
fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd. and certain wholly owned indirect subsidiaries of Transocean Inc.
and rank equal in right of payment of all our existing and future unsecured unsubordinated obligations. Such notes are structurally senior to the
Legacy Guaranteed Notes, the 4.50% shipyard loans due September 2027 (each, a “Shipyard Loan”, and together, the “Shipyard Loans”) and the
7.00% notes due June 2028 and structurally subordinate to the Senior Priority Guaranteed Notes, as defined below, to the extent of the value of
the assets of the subsidiaries guaranteeing the notes.
(d) Transocean Inc. is the issuer of the unregistered notes (together, the “Senior Priority Guaranteed Notes”). The priority guaranteed senior
unsecured notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd. and certain wholly owned indirect
subsidiaries of Transocean Inc. and rank equal in right of payment of all of our existing and future unsecured unsubordinated obligations. Such
notes are structurally senior to the Priority Guaranteed Notes to the extent of the value of the assets of the subsidiaries guaranteeing the notes.
(e) The subsidiary borrowers under the Shipyard Loans and the subsidiary issuer of the registered notes are wholly owned indirect subsidiaries of
Transocean Inc. The loans and notes are fully and unconditionally guaranteed by Transocean Inc.
- 56 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
(f) Transocean Inc. is the issuer of the unregistered notes. The senior secured notes are fully and unconditionally guaranteed on an unsecured basis
by Transocean Ltd. and on a limited senior secured basis by each of the wholly owned subsidiary owners of the collateral rigs.
Transocean Ltd. and Transocean Inc. are not subject to any significant restrictions on their ability to obtain funds from
their consolidated subsidiaries by dividends, loans or capital distributions.
Indentures—The indentures that govern our debt generally contain covenants that, among other things, limit our
ability to incur certain liens on our drilling units without equally and ratably securing the notes, to engage in certain sale and
lease back transactions covering any of our drilling units, to allow our subsidiaries to incur certain additional debt, or to engage
in certain merger, consolidation or reorganization transactions or to enter into a scheme of arrangement qualifying as an
amalgamation.
The indentures that govern 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”) require such bonds to be repurchased upon the occurrence of certain
fundamental changes and events, at specified prices depending on the particular fundamental change or event, which include
changes and events related to certain (i) change of control events applicable to Transocean Ltd. or Transocean Inc., (ii) the
failure of our shares to be listed or quoted on a national securities exchange and (iii) specified tax matters.
The indentures that govern the 6.875% senior secured notes due February 2027, the 8.375% senior secured notes due
February 2028 (the “8.375% Senior Secured Notes”) and the 8.75% senior secured notes due February 2030 (the “8.75% Senior
Secured Notes”) contain covenants that limit the ability of our subsidiaries that own or operate the collateral rigs to declare or
pay dividends to their affiliates.
The indentures that govern our senior secured notes contain certain lien requirements. At December 31, 2023, we had
restricted cash and cash equivalents of $198 million deposited in restricted accounts to satisfy debt service and reserve
requirements for the senior secured notes. At December 31, 2023, the rigs encumbered for the senior secured notes and our
Shipyard Loans, including Deepwater Aquila, which is under construction, Deepwater Atlas, Deepwater Pontus,
Deepwater Poseidon, Deepwater Proteus, Deepwater Thalassa, Deepwater Titan, Transocean Enabler
and
Transocean Encourage, had an aggregate carrying amount of $6.13 billion. We will be required to redeem the senior secured
notes at a price equal to 100 percent of the aggregate principal amount without a make-whole premium, upon the occurrence of
certain events related to the respective collateral rigs and related drilling contracts.
Interest rate adjustments—At December 31, 2023, the interest rate in effect for the 7.35% senior notes due
December 2041 was 9.35 percent, which is subject to adjustment from time to time upon a change to the credit rating of our
non-credit enhanced senior unsecured long-term debt.
Scheduled maturities—At December 31, 2023, the scheduled maturities of our debt, including other installments of
contractual interest payments for previously restructured debt, were as follows (in millions):
Principal
installments installments installments
Other
Total
Years ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total installments
Total unamortized debt-related balances, net
Bifurcated compound exchange feature, at estimated fair value
Total carrying amount of debt
$
$
320
1,068
1,110
1,900
664
1,970
7,032
$
$
71
72
72
36
—
—
251
$
$
391
1,140
1,182
1,936
664
1,970
7,283
(220)
350
7,413
Credit agreements
Secured Credit Facility—As of December 31, 2023, we have a secured revolving credit facility established under a
bank credit agreement (as amended from time to time, the “Secured Credit Facility”), which provides us with a borrowing
capacity of $600 million through its scheduled maturity on June 22, 2025. We may borrow under the Secured Credit Facility at
a forward looking term rate based on the secured overnight financing rate (“Term SOFR”) plus a margin (the “Secured Credit
Facility Margin”) and a Term SOFR spread adjustment of 0.10 percent. The Secured Credit Facility is subject to permitted
extensions and certain early maturity triggers, including if on any date the aggregate amount of scheduled principal repayments
of indebtedness, with certain exceptions, due within 91 days thereof is equal to or in excess of $200 million and available cash
is less than $250 million. The Secured Credit Facility permits us to increase the aggregate amount of commitments by up to
$250 million. The Secured Credit Facility is guaranteed by Transocean Ltd. and certain wholly owned subsidiaries. The
Secured Credit Facility is secured by, among other things, a lien on the ultra-deepwater floaters Deepwater Asgard,
Deepwater Corcovado, Deepwater
Skyros,
Development Driller III,
Invictus, Deepwater Mykonos, Deepwater Orion, Deepwater
- 57 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Dhirubhai Deepwater KG2 and Discoverer Inspiration and the harsh environment floaters Transocean Barents and
Transocean Spitsbergen, and at December 31, 2023, the aggregate carrying amount of which was $4.71 billion.
The Secured Credit Facility contains covenants that, among other things, include maintenance of a minimum guarantee
coverage ratio of 3.0 to 1.0, a minimum collateral coverage ratio of 2.1 to 1.0, a maximum debt to capitalization ratio of
0.60 to 1.00 and minimum liquidity of $500 million. The Secured Credit Facility also restricts the ability of Transocean Ltd.
and certain of our subsidiaries to, among other things, merge, consolidate or otherwise make changes to the corporate structure,
incur liens, incur additional indebtedness, enter into transactions with affiliates and pay dividends and other distributions. In
order to utilize the Secured Credit Facility, we must, at the time of the borrowing request, be in full compliance with the terms
and conditions of the Secured Credit Facility and make certain representations and warranties, including with respect to
compliance with laws and solvency, to the lenders. Repayment of borrowings under the Secured Credit Facility are subject to
acceleration upon the occurrence of an event of default. Under the agreements governing certain of our debt and finance lease,
we are also subject to various covenants, including restrictions on creating liens, engaging in sale/leaseback transactions and
engaging in certain merger, consolidation or reorganization transactions. A default under our public debt indentures, the
agreements governing our senior secured notes, our finance lease contract or any other debt owed to unaffiliated entities that
exceeds $125 million could trigger a default under the Secured Credit Facility and, if not waived by the lenders, could cause us
to lose access to the Secured Credit Facility. At December 31, 2023, based on the credit rating of the Secured Credit Facility on
that date, the Secured Credit Facility Margin was 2.875 percent and the facility fee was 0.625 percent. At December 31, 2023,
we had no borrowings outstanding, $13 million of letters of credit issued, and we had $587 million of available borrowing
capacity under the Secured Credit Facility.
Shipyard financing arrangement—We have credit agreements that established the Shipyard Loans to finance all or a
portion of the final payments owed to the shipyard upon delivery of the ultra-deepwater floaters Deepwater Atlas and
Deepwater Titan. Borrowings under the Shipyard Loan for Deepwater Atlas are secured by, among other security, a lien on the
rig, and borrowings under the Shipyard Loan for Deepwater Titan are unsecured. We have the right to prepay outstanding
borrowings, in full or in part, without penalty. The Shipyard Loans contain covenants that, among other things, limit the ability
of the subsidiary owners of the drilling rigs to incur certain types of additional indebtedness or make certain additional
commitments or investments. In June 2022, we borrowed $349 million under the Shipyard Loan for Deepwater Atlas and made
a cash payment of $46 million to satisfy the final milestone payment due upon delivery of the rig. In December 2022, we
borrowed $90 million under the Shipyard Loan for Deepwater Titan and made a cash payment of $325 million to satisfy the
final milestone payment due upon delivery of the rig. We recorded each Shipyard Loan, net of imputed interest, with an initial
carrying amount of $300 million and $82 million, respectively, and corresponding non-cash capital additions, recorded in
property and equipment. The carrying amount of each Shipyard Loan at inception represented its estimated fair value using
significant other observable inputs, representative of Level 2 fair value measurements, including the terms and credit spreads of
our debt, by applying an estimated discount rate of 9.4 percent and 7.6 percent, respectively.
Exchangeable bonds
Exchange terms—At December 31, 2023, the (a) current exchange rates, expressed as the number of Transocean Ltd.
shares per $1,000 note, (b) implied exchange prices per Transocean Ltd. share and (c) aggregate shares, expressed in millions,
issuable upon exchange of our exchangeable bonds were as follows:
4.00% Senior Guaranteed Exchangeable Bonds due December 2025
4.625% Senior Guaranteed Exchangeable Bonds due September 2029
Exchange
rate
190.4762 $
290.6618 $
Implied
exchange
price
Shares
issuable
5.25
3.44
44.5
75.3
The exchange rates, identified above, are subject to adjustment upon the occurrence of certain events. The
4.00% Senior Guaranteed Exchangeable Bonds may be exchanged by holders at any time prior to the close of business on the
second business day immediately preceding the maturity date and, at our election, such exchange may be settled by delivering
cash, Transocean Ltd. shares or a combination of cash and shares. The 4.625% Senior Guaranteed Exchangeable Bonds may be
exchanged by holders at any time prior to the close of business on the second business day immediately preceding the maturity
date or redemption date and, at our election, such exchange may be settled by delivering cash, Transocean Ltd. shares or a
combination of cash and shares.
Effective interest rates and fair values—At December 31, 2023, the effective interest rates and estimated fair values
of our exchangeable bonds were as follows (in millions, except effective interest rates):
4.00% Senior Guaranteed Exchangeable Bonds due December 2025
4.625% Senior Guaranteed Exchangeable Bonds due September 2029
Effective
interest rate
Fair
value
6.9% $
18.3% $
341
567
We estimated the fair values of the exchangeable debt instruments, including the exchange features, by employing a
binomial lattice model using significant other observable inputs, representative of Level 2 fair value measurements, including
the terms and credit spreads of our debt and the expected volatility of the market price for our shares.
- 58 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Interest expense—We recognized interest expense for our exchangeable bonds as follows (in millions):
Years ended December 31,
2022
2021
2023
Contractual interest
Amortization
Bifurcated compound exchange feature
Total
$
$
24 $
19
127
170 $
16 $
9
157
182 $
11
5
—
16
The 4.625% Senior Guaranteed Exchangeable Bonds contain a compound exchange feature that, in addition to the
exchange terms outlined above, requires us to pay holders a make whole premium of future interest through March 30, 2028, for
exchanges exercised during a redemption notice period. Such compound exchange feature must be bifurcated from the host
debt instrument since it is not considered indexed to our stock. Accordingly, we recognize changes to the liability for the
estimated fair value of the bifurcated compound exchange feature with a corresponding adjustment to interest expense. At
December 31, 2023 and 2022, the carrying amount of the bifurcated compound exchange feature, recorded as a component of
the carrying amount of debt, was $350 million and $295 million, respectively.
Exchanges—In April 2023, Perestroika exchanged $213 million aggregate principal amount of the 2.50% senior
guaranteed exchangeable bonds due January 2027 (the “2.50% Senior Guaranteed Exchangeable Bonds”) under the terms of the
governing indenture at the applicable exchange rate of 162.1626 Transocean Ltd. shares per $1,000 note. As part of the
transaction governing the exchange, we delivered 34.6 million Transocean Ltd. shares and additional immaterial cash
consideration to such exchanging holder. The director’s beneficial ownership of our shares resulting from these transactions did
not change.
In July 2023, the holders of the remaining outstanding $25 million aggregate principal amount of 2.50% Senior
Guaranteed Exchangeable Bonds exchanged such bonds under the terms of the governing indenture at the applicable exchange
rate of 162.1626 Transocean Ltd. shares per $1,000 note. As part of the transaction, we delivered 4.0 million Transocean Ltd.
shares.
In October 2023, holders of $60 million and $41 million aggregate principal amount of the 4.00% Senior Guaranteed
Exchangeable Bonds and the 4.625% Senior Guaranteed Exchangeable Bonds, respectively, exchanged such bonds under the
terms of the governing indenture at the applicable exchange rate of 190.4762 and 290.6618 Transocean Ltd. shares,
respectively, per $1,000 note. As part of the transactions, we delivered an aggregate 26.5 million Transocean Ltd. shares,
including an aggregate 3.1 million additional shares to such holders.
Debt issuance
Senior secured notes—In January 2023, we issued $525 million aggregate principal amount of 8.375% Senior
Secured Notes, and we received $516 million aggregate cash proceeds, net of issue costs. The 8.375% Senior Secured Notes
are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Titan and the equity of the wholly
owned subsidiary that owns or operates the collateral rig. Additionally, we are required to maintain certain balances in a
restricted cash account to satisfy debt service requirements. We may redeem all or a portion of the 8.375% Senior Secured
Notes on or prior to February 1, 2025 at a price equal to 100 percent of the aggregate principal amount plus a make-whole
premium, and subsequently, at specified redemption prices.
In January 2023, we issued $1.175 billion aggregate principal amount of 8.75% Senior Secured Notes, and we received
$1.148 billion aggregate cash proceeds, net of issue costs. The 8.75% Senior Secured Notes are secured by a lien on the ultra-
deepwater floaters Deepwater Pontus, Deepwater Proteus and Deepwater Thalassa and the harsh environment floaters
Transocean Enabler and Transocean Encourage, together with certain related assets. Additionally, we are required to maintain
certain balances in a restricted cash account to satisfy debt service requirements. We may redeem all or a portion of the
8.75% Senior Secured Notes on or prior to February 15, 2026 at a price equal to 100 percent of the aggregate principal amount
plus a make-whole premium, and subsequently, at specified redemption prices.
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.
The 8.00% Senior Secured Notes are secured by the assets and certain earnings associated with the ultra-deepwater floater
Deepwater Aquila as well as the equity of certain of the wholly owned subsidiaries that own or operate the collateral rig.
Additionally, we are required to maintain certain balances in a restricted cash account to satisfy debt service requirements. We
may redeem all or a portion of the 8.00% Senior Secured Notes on or prior to September 30, 2025 at a price equal to
100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
Senior guaranteed exchangeable bonds—In September 2022, we issued $300 million aggregate principal amount of
4.625% Senior Guaranteed Exchangeable Bonds in connection with exchange and purchase agreements. Pursuant to the
exchange and purchase agreements, we exchanged (the “2022 Private Exchange”) (a) $73 million aggregate principal amount of
the 0.50% exchangeable senior bonds due January 2023 (the “0.50% Exchangeable Senior Bonds”) for (i) $73 million aggregate
principal amount of 4.625% Senior Guaranteed Exchangeable Bonds and (ii) 6.7 million warrants to purchase Transocean Ltd.
shares, and (b) $43 million aggregate principal amount of the 7.25% senior notes due November 2025 for $39 million aggregate
principal amount of the 4.625% Senior Guaranteed
- 59 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Exchangeable Bonds. In the year ended December 31, 2022, as a result of the 2022 Private Exchange, we recognized a gain of
$6 million ($0.01 per diluted share), with no tax effect, associated with the retirement of debt. Additionally, we sold
$188 million aggregate principal amount of the 4.625% Senior Guaranteed Exchangeable Bonds and issued 15.5 million
warrants to purchase Transocean Ltd. shares for aggregate net cash proceeds of $188 million. On or after March 30, 2026, we
may redeem for cash all or a portion of the 4.625% Senior Guaranteed Exchangeable Bonds at a price equivalent to the
aggregate principal amount to be redeemed if the closing price of our shares has been greater than 115 percent of the exchange
price for a period of at least 20 trading days. The initial carrying amount of the 4.625% Senior Guaranteed Exchangeable
Bonds, measured at the estimated fair value on the date of issuance, was $281 million. We estimated the fair value of the
exchangeable debt instrument, including the exchange feature, by employing a binomial lattice model and by using significant
other observable inputs, representative of Level 2 fair value measurements, including the terms and credit spreads of our debt
and expected volatility of the market price for our shares. See Note 14—Equity.
In February 2021, we issued $294 million aggregate principal amount of the 4.00% Senior Guaranteed Exchangeable
Bonds and made an aggregate cash payment of $11 million in private exchanges (the “2021 Private Exchange”) for
$323 million aggregate principal amount of the 0.50% Exchangeable Senior Bonds. In the year ended December 31, 2021, as a
result of the 2021 Private Exchange, we recognized a gain of $51 million ($0.08 per diluted share), with no tax effect,
associated with the retirement of debt. The initial carrying amount of the 4.00% Senior Guaranteed Exchangeable Bonds,
measured at the estimated fair value on the date of issuance, was $260 million. We estimated the fair value of the exchangeable
debt instrument, including the exchange feature, by employing a binomial lattice model using significant other observable
inputs, representative of Level 2 fair value measurements, including the terms and credit spreads of our debt and expected
volatility of the market price for our shares.
Debt repayment, redemption, and retirement
Early retirement—During the three years ended December 31, 2023, we retired certain notes as a result of
redemptions or private exchanges. The aggregate principal amounts, cash payments and recognized gain or loss for such
transactions were as follows (in millions):
Years ended December 31,
2022
2021
5.52% Senior Secured Notes due May 2022
3.80% Senior Notes due October 2022
0.50% Exchangeable Senior Bonds due January 2023
5.375% Senior Secured Notes due May 2023
5.875% Senior Secured Notes due January 2024
7.75% Senior Secured Notes due October 2024
6.25% Senior Secured Notes due December 2024
6.125% Senior Secured Notes due August 2025
7.25% Senior Notes due November 2025
Aggregate principal amount of debt retired
2023
Redeemed
$
— $
—
—
243
311
240
250
336
—
$ 1,380
$
Redeemed Exchanged
18 $
27
18
—
—
—
—
—
14
77 $
— $
—
73
—
—
—
—
—
43
116 $
Total
18
27
91
—
—
—
—
—
57
193
Aggregate cash payment
Aggregate principal amount of debt issued in exchanges
Aggregate fair value of warrants issued in exchanges
Aggregate net gain (loss)
$ 1,402
$
$
$
$
— $
— $
$
(32)
75 $
— $
— $
2 $
— $
112 $
5 $
6 $
75
112
5
8
Redeemed Exchanged Total
$
$
$
$
$
$
— $
—
—
11
68
—
—
—
—
79 $
79 $
— $
— $
— $
— $ —
—
—
323
323
11
—
68
—
—
—
—
—
—
—
—
—
402
323 $
90
11 $
294 $
294
— $ —
51
51 $
Additionally, in the year ended December 31, 2023, we recognized a net gain of $1 million associated with the
retirement of $41 million aggregate principal amount of the 4.625% Senior Guaranteed Exchangeable Bonds exchanged by
holders in October 2023.
Scheduled maturities and installments—On the scheduled maturity date of January 30, 2023, we made a cash
payment of $49 million to repay an equivalent aggregate principal amount of the outstanding 0.50% Exchangeable Senior
Bonds. On the scheduled maturity date of December 15, 2021, we made a cash payment of $38 million to repay an equivalent
aggregate principal amount of the outstanding 6.375% senior notes due December 2021. In the years ended December 31,
2023, 2022 and 2021, we made an aggregate cash payment of $262 million, $479 million and $478 million, respectively, to
repay other indebtedness in scheduled installments.
NOTE 10—POSTEMPLOYMENT BENEFIT PLANS
Defined contribution plans
We sponsor defined contribution plans for our employees in most markets in which we operate worldwide, the most
significant of which were as follows: (1) a qualified savings plan covering certain eligible employees working in the U.S.,
(2) various savings plans covering eligible employees working in Norway, (3) a non-qualified savings plan covering certain
eligible employees working outside the U.S., the United Kingdom (“U.K.”) and Norway and (4) a qualified savings plan
covering certain eligible employees working in the U.K. In the years ended December 31, 2023, 2022 and 2021, we recognized
expense of $58 million, $61 million and $52 million, respectively, recorded in the same financial statement line item as cash
compensation paid to the respective employees, related to our defined contribution plans.
- 60 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Defined benefit pension and other postemployment benefit plans
Overview—As of December 31, 2023, we had defined benefit plans in the U.S., including three funded and
three unfunded defined benefit plans (the “U.S. Plans”), and in the U.K., we had one funded defined benefit plan (the
“U.K. Plan”). During the year ended December 31, 2021, as required by local authorities, we terminated our remaining plans in
Norway (together with the U.K. Plan, the “Non-U.S. Plans”). We also maintain certain unfunded other postemployment benefit
plans (collectively, the “OPEB Plans”), under which benefits to eligible participants diminish during a phase-out period ending
December 31, 2025. We maintain the benefit obligations under our defined benefit plans until they are fully satisfied.
Net periodic benefit costs—We estimated our net periodic benefit costs using the following weighted average
assumptions:
Discount rate
Expected rate of return
“na” means not applicable.
U.S.
Plans
Year ended December 31, 2023
OPEB
U.K.
Plan
Plans
4.80 %
5.00 %
5.06 %
6.41 %
4.92 %
na
U.S.
Plans
Year ended December 31, 2022
OPEB
U.K.
Plan
Plans
1.90 %
2.00 %
2.92 %
4.81 %
1.83 %
na
Year ended December 31, 2021
OPEB
Non-U.S.
Plans
Plans
U.S.
Plans
2.60 %
5.51 %
1.50 %
3.20 %
1.21 %
na
The components of net periodic benefit costs, recognized in other income and expense, were as follows (in millions):
Year ended December 31, 2023
Year ended December 31, 2022
Year ended December 31, 2021
U.S.
Plans
U.K.
Plan
OPEB
Plans
Total
U.S.
Plans
U.K.
Plan
OPEB
Plans
Total
U.S.
Plans
Non-U.S.
Plans
OPEB
Plans
Total
Net periodic benefit costs
Interest cost
Expected return on plan assets
Settlements and curtailments
Actuarial loss, net
Prior service gain, net
Net periodic benefit costs
(income)
$
$
65
(84)
—
—
—
9
(11)
—
2
—
$ — $
—
—
—
(2)
74
(95)
—
2
(2)
$
$
50
(65)
—
5
—
$
6
(7)
—
—
—
$ — $
—
—
—
(2)
56
(72)
—
5
(2)
$
47
(66)
—
11
—
6
(13)
(2)
1
—
$ — $
—
—
—
(2)
53
(79)
(2)
12
(2)
$
(19) $ — $
(2) $
(21)
$
(10) $
(1) $
(2) $
(13)
$
(8) $
(8) $
(2) $
(18)
Funded status—We estimated our benefit obligations using the following weighted-average assumptions:
Discount rate
Expected long-term rate of return
“na” means not applicable.
U.S.
Plans
December 31, 2023
U.K.
Plan
4.50 %
4.88 %
6.80 % 5.10 %
OPEB
Plans
4.80 %
na
U.S.
Plans
December 31, 2022
U.K.
Plan
4.80 %
5.06 %
6.41 % 5.00 %
OPEB
Plans
4.92 %
na
The changes in funded status, balance sheet classifications and accumulated benefit obligations were as follows
(in millions):
Change in projected benefit obligation
Projected benefit obligation, beginning of period
Actuarial (gain) loss, net
Interest cost
Currency exchange rate (gain) loss
Benefits paid
Projected benefit obligation, end of period
Change in plan assets
Fair value of plan assets, beginning of period
Actual return (loss) on plan assets
Currency exchange rate gain (loss)
Employer contributions
Benefits paid
Fair value of plan assets, end of period
Year ended December 31, 2023
Year ended December 31, 2022
U.S.
Plans
U.K.
Plan
OPEB
Plans
Total
U.S.
Plans
U.K.
Plan
OPEB
Plans
Total
$
$ 1,307
32
65
—
(76)
1,328
1,143
138
—
6
(76)
1,211
$
188
11
9
11
(11)
208
232
6
12
—
(11)
239
10
—
—
—
(2)
8
—
—
—
2
(2)
—
$
$ 1,505
43
74
11
(89)
1,544
$ 1,724
(391)
50
—
(76)
1,307
1,375
144
12
8
(89)
1,450
1,621
(403)
—
1
(76)
1,143
$
348
(119)
6
(37)
(10)
188
434
(147)
(45)
—
(10)
232
13
(1)
—
—
(2)
10
—
—
—
2
(2)
—
$ 2,085
(511)
56
(37)
(88)
1,505
2,055
(550)
(45)
3
(88)
1,375
Funded status asset (liability), end of period
$
(117) $
31
$
(8) $
(94) $
(164) $
44
$
(10) $
(130)
Balance sheet classification, end of period:
Pension asset, non-current
Pension liability, current
Pension liability, non-current
Accumulated other comprehensive loss (income), before taxes
Accumulated benefit obligation, end of period
$ — $
(1)
(116)
144
31
—
—
90
$ — $
(3)
(5)
(6)
31
(4)
(121)
228
$ — $
(1)
(163)
166
$
44
—
—
76
— $
(3)
(7)
(8)
44
(4)
(170)
234
$ 1,328
$
- 61 -
208
$
8
$ 1,544
$ 1,307
$
188
$
10
$ 1,505
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Because our defined benefit plans no longer accrue benefits for participants, the projected benefit obligation is
equivalent to the accumulated benefit obligation. Certain amounts related to plans with a projected benefit obligation and
accumulated benefit obligation in excess of plan assets were as follows (in millions):
Projected benefit obligation / accumulated benefit obligation
Fair value of plan assets
U.S.
Plans
$ 1,328
1,211
December 31, 2023
OPEB
Plans
U.K.
Plan
$ — $
—
8
—
Total
$ 1,336
1,211
U.S.
Plans
$ 1,307
1,143
December 31, 2022
OPEB
U.K.
Plans
Plan
$ — $
—
10
—
Total
$ 1,317
1,143
The amounts in accumulated other comprehensive loss (income) that have not been recognized were as follows
(in millions):
Actuarial (gain) loss, net
Prior service cost (credit), net
Accumulated other comprehensive loss (income), before taxes
U.S.
Plans
$
$
144
—
144
$
$
December 31, 2023
OPEB
Plans
U.K.
Plan
Total
U.S.
Plans
December 31, 2022
OPEB
U.K.
Plans
Plan
88
2
90
$
$
(1) $
(5)
(6) $
231
(3)
228
$
$
166
—
166
$
$
74
2
76
$
$
(1) $
(7)
(8) $
Total
239
(5)
234
Plan assets—The weighted-average target and actual allocations of assets for the funded defined benefit plans were as
follows:
December 31, 2023
December 31, 2022
Target allocation
U.K.
U.S.
Plans
Plan
Actual allocation
U.K.
U.S.
Plans
Plan
Target allocation
U.K.
U.S.
Plans
Plan
Actual allocation
U.S.
Plans
U.K.
Plan
Equity securities
Fixed income securities
Other investments
Total
24 %
21 %
38 %
74 %
72 %
62 %
— %
2 %
7 % —
100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %
38 %
61 %
1
20 %
73 %
7 %
20 %
80 %
— %
37 %
62 %
1 %
38 %
62 %
We periodically review our investment policies, plan assets and asset allocation strategies to evaluate performance
relative to specified objectives. In determining our asset allocation strategies for the U.S. Plans, we review the results of
regression models to assess the most appropriate target allocation for each plan, given the plan’s status, demographics and
duration. For the U.K. Plan, the plan trustees establish the asset allocation strategies consistent with the regulations of the U.K.
pension regulators and in consultation with financial advisors and company representatives. Investment managers for the
U.S. Plans and the U.K. Plan are given established ranges within which the investments may deviate from the target allocations.
The investments for the funded defined benefit plans were categorized as follows (in millions):
Significant observable inputs
U.K.
Plan
U.S.
Plans
Total
December 31, 2023
Significant other observable inputs
U.K.
Plan
U.S.
Plans
Total
U.S.
Plans
Total
U.K.
Plan
Total
Mutual funds
U.S. equity funds
Non-U.S. equity funds
Bond funds
Total mutual funds
Other investments
Cash and money market funds
Synthetic leveraged credit fund
Total other investments
$
316 $ — $
139
746
1,201
316
139
—
—
746
— 1,201
$
— $
—
4
4
— $
51
171
222
— $
51
175
226
316 $ — $
139
750
1,205
51
171
222
316
190
921
1,427
6
—
6
1
—
1
7
—
7
—
—
—
—
16
16
—
16
16
6
—
6
1
16
17
7
16
23
Total investments
$ 1,207 $
1 $ 1,208
$
4
$
238
$
242
$ 1,211 $
239 $ 1,450
Significant observable inputs
U.K.
Plan
U.S.
Plans
Total
December 31, 2022
Significant other observable inputs
U.K.
Plan
U.S.
Plans
Total
U.S.
Plans
Total
U.K.
Plan
Total
Mutual funds
U.S. equity funds
Non-U.S. equity funds
Bond funds
Total mutual funds
Other investments
Cash and money market funds
$
301 $ — $
132
698
1,131
301
132
—
—
698
— 1,131
$
— $
4
2
6
— $
57
171
228
— $
61
173
234
301 $ — $
136
700
1,137
57
171
228
301
193
871
1,365
6
4
10
—
—
—
6
4
10
Total investments
$ 1,137 $
4 $ 1,141
$
6
$
228
$
234
$ 1,143 $
232 $ 1,375
- 62 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
We estimated the fair values of the plan assets by applying the market approach, as categorized above, using either
(i) significant observable inputs, representative of Level 1 fair value measurements, including market prices of actively traded
funds, or (ii) significant other observable inputs, representative of Level 2 fair value measurements, including market prices of
the underlying securities in the trust funds. The U.S. Plans and the U.K. Plan invest in passively and actively managed funds
that are referenced to or benchmarked against market indices. The plan investment managers have discretion to select securities
within each asset category. Given this discretion, the plans may occasionally hold either long or short positions in our debt or
equity securities. Since plan investment managers are required to maintain well diversified portfolios, the actual investment in
our securities would be immaterial relative to asset categories and the overall plan assets.
Funding contributions and benefit payments—In the years ended December 31, 2023, 2022 and 2021, we made an
aggregate contribution of $8 million, $3 million and $10 million, respectively, to the defined benefit pension plans and the
OPEB Plans using our cash flows from operations. In the year ending December 31, 2024, we expect to make an aggregate
contribution of $4 million, including $1 million and $3 million to the defined benefit pension plans and the OPEB Plans,
respectively.
The projected benefits payments were as follows (in millions):
Years ending December 31,
2024
2025
2026
2027
2028
2029 - 2033
NOTE 11—INCOME TAXES
U.S.
Plans
U.K.
Plan
OPEB
Plans
Total
$
$
84
84
84
85
85
427
$
6
7
8
8
9
58
$
3
3
1
—
—
1
93
94
93
93
94
486
Overview—Transocean Ltd., a holding company and Swiss resident, is subject to Swiss federal, cantonal and
communal income tax. For Swiss income taxes, however, qualifying net dividend income and net capital gains on the sale of
qualifying investments in subsidiaries are exempt from taxation. Consequently, there is not a direct relationship between our
Swiss earnings before income taxes and our Swiss income tax expense.
Tax provision and rate—The components of our income tax provision (benefit) were as follows (in millions):
Current tax expense (benefit)
Deferred tax expense
Income tax expense
Years ended December 31,
2023 2022 2021
$
$
(5) $
18
13
$
13
46
59
(7)
128
121
$
$
In the years ended December 31, 2023, 2022 and 2021, our effective tax rate was (1.4) percent, (10.4) percent and
(25.7) percent, respectively, based on loss before income tax expense. The relationship between our provision for or benefit
from income taxes and our income or loss before income taxes can vary significantly from period to period considering, among
other factors, (a) the overall level of income before income taxes, (b) changes in the blend of income that is taxed based on
gross revenues rather than income before taxes, (c) rig movements between taxing jurisdictions and (d) our rig operating
structures.
A reconciliation of the income tax benefit computed at the Swiss holding company federal statutory rate of 7.83% and
our reported consolidated income tax expense was as follows (in millions):
Income tax benefit at Swiss federal statutory rate
Earnings subject to rates different than the Swiss federal statutory rate
Deemed profits taxes
Withholding taxes
Changes in valuation allowance
Changes in unrecognized tax benefits, net
Swiss Federal Act on Tax Reform and AHV Financing
Audit settlement
Changes due to organizational restructuring
Losses on impairment
Other, net
Income tax expense
$
Years ended December 31,
2021
2023 2022
$
(74) $
129
11
5
(23)
(37)
—
—
—
—
2
13
$
(44) $
52
10
12
79
2
96
12
(162)
—
2
59
$
(36)
78
17
10
1,167
(43)
(1,095)
—
16
5
2
121
In January 2020, Switzerland made effective the Federal Act on Tax Reform and AHV Financing (“TRAF”). In
March 2020, we entered into discussions with the Swiss tax authorities regarding the manner by which the TRAF applies to
certain Swiss subsidiaries, which
- 63 -
Table of Contents
TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
allows us to access historic depreciation and costs related to financing assets not previously deducted on Swiss tax returns,
which can be apportioned to offset taxable income based on the remaining useful lives of the rigs and financing assets. In the
three months ended December 31, 2021, we reached an agreement with the Swiss Tax authorities regarding the TRAF
treatment. At December 31, 2023 and 2022, we had a deferred tax liability of $264 million and $226 million, respectively, and
a deferred tax asset of $1.21 billion and $1.23 billion, respectively, offset with a valuation allowance of $1.10 billion, associated
with TRAF.
Deferred taxes—The significant components of our deferred tax assets and liabilities were as follows (in millions):
Deferred tax assets
Swiss historic depreciation and financing asset costs
Net operating loss carryforwards
Interest expense limitation
United Kingdom charter limitation
Accrued expenses
Tax credits
Deferred income
Accrued payroll costs not currently deductible
Loss contingencies
Other
Valuation allowance
Total deferred tax assets, net of allowance
Deferred tax liabilities
Depreciation
Other
Total deferred tax liabilities
December 31,
2023
2022
$
$
1,210
1,264
87
53
47
4
—
16
4
54
(1,884)
855
(1,342)
(9)
(1,351)
1,226
1,115
77
53
36
11
7
18
4
43
(1,910)
680
(1,150)
(10)
(1,160)
Deferred tax assets (liabilities), net
$
(496) $
(480)
We include taxes related to the earnings of all of our subsidiaries since we do not consider the earnings of any of our
subsidiaries to be indefinitely reinvested.
At December 31, 2023 and 2022, our deferred tax assets included U.S. tax credits of $4 million and $11 million,
respectively, which will expire between 2024 and 2026. Deferred tax assets related to our net operating losses were generated
in various worldwide tax jurisdictions. At December 31, 2023, our net deferred tax assets related to our net operating loss
carryforwards included $585 million, which do not expire, and $855 million, which will expire between 2024 and 2041.
As of December 31, 2023, our consolidated cumulative loss incurred over the recent three-year period represented
significant objective negative evidence for the evaluation of the realizability of our deferred tax assets. Because such evidence
has limited our ability to consider other subjective evidence, we evaluate each jurisdiction separately. We consider objective
evidence, such as contract backlog activity, in jurisdictions in which we have profitable contracts, and the ability to carryback
losses or utilize losses against potential exposures. If estimated future taxable income changes during the carryforward periods
or if the cumulative loss is no longer present, we may adjust the amount of deferred tax assets that we expect to realize. At
December 31, 2023 and 2022, due to uncertainty of realization, we had a valuation allowance of $1.88 billion and $1.91 billion,
respectively, on net operating losses and other deferred tax assets due to the uncertainty of realization.
Unrecognized tax benefits—The changes to unrecognized tax benefits, excluding interest and penalties that we
recognize as a component of income tax expense, were as follows (in millions):
Years ended December 31,
2023
2022
Balance, beginning of period
Additions for current year tax positions
Additions for prior year tax positions
Reductions related to statute of limitation expirations and changes in law
Reductions due to settlements
Reductions for prior year tax positions
Balance, end of period
$
$
444 $
45
5
(14)
(5)
(26)
449 $
402 $
28
62
(13)
(5)
(30)
444 $
- 64 -
2021
378
28
46
(19)
(31)
—
402
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Our unrecognized tax benefits, including related interest and penalties that we recognize as a component of income tax
expense, were as follows (in millions):
Unrecognized tax benefits, excluding interest and penalties
Interest and penalties
Unrecognized tax benefits, including interest and penalties
December 31,
2023
2022
449
9
458
$
$
444
27
471
$
$
In the years ended December 31, 2023, 2022 and 2021, we recognized, as a component of our income tax provision,
benefit of $18 million, expense of $6 million and expense of $8 million, respectively, related to interest and penalties associated
with our unrecognized tax benefits. As of December 31, 2023, we have unrecognized benefits of $458 million, including
interest and penalties, against which we have recorded net operating loss deferred tax assets of $411 million, resulting in net
unrecognized tax benefits of $47 million, including interest and penalties, that upon reversal would favorably impact our
effective tax rate. During the year ending December 31, 2024, it is reasonably possible that our existing liabilities for
unrecognized tax benefits may increase or decrease, primarily due to the progression of open audits and the expiration of
statutes of limitation. However, we cannot reasonably estimate a range of potential changes in our existing liabilities for
unrecognized tax benefits due to various uncertainties, such as the unresolved nature of various audits.
Tax positions and returns—We conduct operations through our various subsidiaries in countries throughout the
world. Each country has its own tax regimes with varying nominal rates, deductions and tax attributes that are subject to
changes resulting from new legislation, interpretation or guidance. From time to time, as a result of these changes, we may
revise previously evaluated tax positions, which could cause us to adjust our recorded tax assets and liabilities. Tax authorities
in certain jurisdictions are examining our tax returns and, in some cases, have issued assessments. We intend to defend our tax
positions vigorously. Although we can provide no assurance as to the outcome of the aforementioned changes, examinations or
assessments, we do not expect the ultimate liability to have a material adverse effect on our consolidated statement of financial
position or results of operations; however, it could have a material adverse effect on our consolidated statement of cash flows.
Brazil tax investigations—In December 2005, the Brazilian tax authorities began issuing tax assessments with respect
to our tax returns for the years 2000 through 2004. In May 2014, the Brazilian tax authorities issued an additional tax
assessment for the years 2009 and 2010. We filed protests with the Brazilian tax authorities for the assessments and are
engaged in the appeals process, and a portion of two cases were favorably closed. As of December 31, 2023, the remaining
aggregate tax assessment, including interest and penalties, was for corporate income tax of BRL 698 million, equivalent to
approximately $144 million, and indirect tax of BRL 90 million, equivalent to $19 million. We believe our returns are
materially correct as filed, and we are vigorously contesting these assessments. An unfavorable outcome on these proposed
assessments could have a material adverse effect on our consolidated statement of financial position, results of operations or
cash flows.
NOTE 12—LOSS PER SHARE
The computation of basic and diluted loss per share was as follows (in millions, except per share data):
Numerator for loss per share, basic and diluted
Net loss attributable to controlling interest
Denominator for loss per share, basic and diluted
Weighted-average shares for per share calculation
Loss per share, basic and diluted
Years ended December 31,
2021
2022
2023
$ (954) $
(621) $
(592)
768
699
637
$ (1.24) $ (0.89) $ (0.93)
We excluded from the computations certain shares issuable as follows because the effect would have been antidilutive
(in millions):
Exchangeable bonds
Share-based awards
Warrants
Years ended December 31,
2021
2022
2023
104.4
128.1
150.8
12.6
15.5
18.6
—
—
10.2
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
NOTE 13—COMMITMENTS AND CONTINGENCIES
Purchase and service agreement obligations
We have purchase obligations with shipyards and other contractors primarily related to our newbuild construction
program for Deepwater Aquila. We also have long-term service agreements with original equipment manufacturers to provide
services and parts, primarily related to our pressure control systems and drilling systems. The commitments for our service
agreements were estimated based on projected operating activity, and actual operating activity could differ from such estimates.
At December 31, 2023, the aggregate future payments required under our purchase obligations and our service agreement
obligations were as follows (in millions):
Years ending December 31,
2024
2025
2026
2027
2028
Thereafter
Total
Purchase
obligations
Service
agreement
obligations
$
$
19
2
—
—
—
—
21
$
$
131
145
149
121
73
109
728
Letters of credit and surety bonds
At December 31, 2023 and 2022, we had outstanding letters of credit totaling $16 million and $8 million, respectively,
issued under various committed and uncommitted credit lines provided by banks to guarantee various contract bidding,
performance activities and customs obligations. At December 31, 2023 and 2022, we also had outstanding surety bonds totaling
$198 million and $161 million, respectively, to secure customs obligations related to the importation of our rigs and certain
performance and other obligations. At December 31, 2023 and 2022, the aggregate cash collateral held by institutions to secure
our letters of credit and surety bonds was $7 million.
Legal proceedings
Asbestos litigation—In 2014, several of our subsidiaries were named, along with numerous other unaffiliated
defendants, in complaints filed in Louisiana. The plaintiffs, former employees of some of the defendants, generally allege that
the defendants used or manufactured asbestos-containing drilling mud additives for use in connection with drilling operations,
claiming negligence, products liability, strict liability and claims allowed under the Jones Act and general maritime law. One of
our subsidiaries has been named in similar complaints filed in Illinois, Missouri and California. At December 31, 2023,
seven plaintiffs have claims pending in Louisiana and 15 plaintiffs in the aggregate have claims pending in either Illinois,
Missouri, or California, in which we have or may have an interest. We intend to defend these lawsuits vigorously, although we
can provide no assurance as to the outcome. We historically have maintained broad liability insurance, although we can provide
no assurance as to whether insurance will cover the liabilities, if any, arising out of these claims. Based on our evaluation of the
exposure to date, we do not expect the liability, if any, resulting from these claims to have a material adverse effect on our
consolidated statement of financial position, results of operations or cash flows.
One of our subsidiaries was named as a defendant, along with numerous other companies, in lawsuits arising out of the
subsidiary’s manufacture and sale of heat exchangers, and involvement in the construction and refurbishment of major industrial
complexes alleging bodily injury or personal injury as a result of exposure to asbestos. As of December 31, 2023, the
subsidiary was a defendant in approximately 257 lawsuits with a corresponding number of plaintiffs. For many of these
lawsuits, we have not been provided sufficient information from the plaintiffs to determine whether all or some of the plaintiffs
have claims against the subsidiary, the basis of any such claims, or the nature of their alleged injuries. The operating assets of
the subsidiary were sold in 1989. In December 2021, the subsidiary and certain insurers agreed to a settlement of outstanding
disputes that provide the subsidiary with cash. An earlier settlement, achieved in September 2018, provided the subsidiary with
cash and an annuity that begins making payments in 2024. Together with a coverage-in-place agreement with certain insurers
and additional coverage issued by other insurers, we believe the subsidiary has sufficient resources to respond to both the
current lawsuits as well as future lawsuits of a similar nature. While we cannot predict or provide assurance as to the outcome
of these matters, we do not expect the ultimate liability, if any, resulting from these claims to have a material adverse effect on
our consolidated statement of financial position, results of operations or cash flows.
Other matters—We are involved in various regulatory matters and a number of claims and lawsuits, asserted and
unasserted, all of which have arisen in the ordinary course of our business. We do not expect the liability, if any, resulting from
these other matters to have a material adverse effect on our consolidated statement of financial position, results of operations or
cash flows. We cannot predict with certainty the outcome or effect of any of the litigation matters specifically described above
or of any such other pending, threatened, or possible litigation or liability. We can provide no assurance that our beliefs or
expectations as to the outcome or effect of any tax, regulatory, lawsuit or other litigation matter will prove correct and the
eventual outcome of these matters could materially differ from management’s current estimates.
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Environmental matters
We have certain potential liabilities under the Comprehensive Environmental Response, Compensation, and Liability
Act (“CERCLA”) and similar state acts regulating cleanup of hazardous substances at various waste disposal sites, including
those described below. CERCLA is intended to expedite the remediation of hazardous substances without regard to fault.
Potentially responsible parties (“PRPs”) for each site include present and former owners and operators of, transporters to and
generators of the substances at the site. It is difficult to quantify the potential cost of environmental matters and remediation
obligations. Liability is strict and can be joint and several.
One of our subsidiaries was named as a PRP in connection with a site located in Santa Fe Springs, California, known
as the Waste Disposal, Inc. site. We and other PRPs agreed, under a participation agreement with the U.S. Environmental
Protection Agency (the “EPA”) and the U.S. Department of Justice, to settle our potential liabilities by remediating the site. The
remedial action for the site was completed in 2006. Our share of the ongoing operating and maintenance costs has been
insignificant, and we do not expect any additional potential liabilities to be material. Resolutions of other claims by the EPA,
the involved state agency or PRPs are at various stages of investigation. Nevertheless, based on available information with
respect to all environmental matters, including all related pending legal proceedings, asserted legal claims and known potential
legal claims that are likely to be asserted, we do not expect the ultimate liability, if any, resulting from such matters, to have a
material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
NOTE 14—EQUITY
Share issuance—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 (see Note 4—Unconsolidated Affiliates and Note 7—
Long-Lived Assets). In the year ended December 31, 2023, we issued 65.1 million shares to certain holders that elected to
exchange exchangeable bonds under terms of the governing indentures (see Note 9—Debt).
We maintain an at-the-market equity offering program (the “ATM Program”). We intend to use the net proceeds from
our ongoing ATM Program for general corporate purposes, which may include, among other things, the repayment or
refinancing of indebtedness and the funding of working capital, capital expenditures, investments and additional balance sheet
liquidity. In June 2021, we entered into an equity distribution agreement with a sales agent for the offer and sale of our shares,
with a maximum aggregate net offering price of up to $400 million, under the ATM Program. In August 2022, we entered into
an equity distribution agreement with a sales agent for the offer and sale of our shares, with a maximum aggregate net offering
price of up to $435 million, under the ATM Program. In the year ended December 31, 2023, we did not issue any shares under
the ATM Program. In the years ended December 31, 2022 and 2021, we received aggregate cash proceeds of $263 million and
$158 million, respectively, net of issue costs, for the aggregate sale of 61.0 million shares and 36.1 million shares, respectively,
under the ATM Program.
Warrants—In September 2022, we issued 22.2 million warrants to purchase Transocean Ltd. shares. The warrants
may be exercised by holders at any time prior to the close of business on March 13, 2026 at an exercise price equal to $3.71 per
share, subject to certain anti-dilutive adjustments, and at our election, such exercise may be settled by delivering cash,
Transocean Ltd. shares or a combination of cash and shares. If at any time prior to expiration, the closing price of
Transocean Ltd. shares equals or exceeds $10.00 per share, subject to adjustment upon the occurrence of certain events, for a
period of five consecutive trading days, we will have the right to effect an exercise of all, but not less than all, of the warrants
upon notice to holders. The initial carrying amount of the warrants, recorded in additional paid-in capital and measured at the
estimated fair value on the date of issuance, was $16 million, net of issue costs. We estimated the fair value of the warrants by
employing a binomial lattice model and by using significant other observable inputs, representative of Level 2 fair value
measurements, including the expected volatility of the market price for our shares.
Shares held by subsidiaries—One of our subsidiaries holds our shares for future use to deliver shares in connection
with sales under the ATM Program and in connection with awards granted under our incentive plans or other rights to acquire
our shares. At December 31, 2023 and 2022, our subsidiary held 34.7 million and 75.4 million shares, respectively.
NOTE 15—SHARE-BASED COMPENSATION
Overview
We have a long-term incentive plan (the “Long-Term Incentive Plan”) for executives, key employees and non-
employee directors under which awards can be granted in the form of restricted share units, restricted shares, stock options,
stock appreciation rights and cash performance awards. Awards may be granted as service awards that are earned over a defined
service period or as performance awards that are earned based on the achievement of certain market factors or performance
targets or a combination of market factors and performance targets. The compensation committee of our board of directors
determines the terms and conditions of the awards granted under the Long-Term Incentive Plan. At December 31, 2023, we had
115.7 million shares authorized and 31.2 million shares available to be granted under the Long-Term Incentive Plan. At
December 31, 2023, the total unrecognized compensation cost related to our unvested share-based awards was $42 million,
which we expect to recognize over a weighted-average period of 1.72 years.
Service awards typically vest either in three equal annual installments beginning on the first anniversary date of the
grant or in an aggregate installment at the end of the stated vesting period. Service-based stock options, once fully vested, are
typically exercisable during
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
a seven-year period. Performance awards are typically subject to a three-year measurement period and typically vest in
one aggregate installment following the ultimate determination date.
Service awards
Restricted share units—A restricted share unit subject to service requirements is a notional unit that is equal to
one share but has no voting rights until the underlying share is issued. The following table summarizes unvested activity during
the year ended December 31, 2023 for service-based units granted under our incentive plan:
Unvested at January 1, 2023
Granted
Vested
Forfeited
Unvested at December 31, 2023
Number
of
units
Weighted-average
grant-date fair value
per unit
12,047,500 $
3,744,049
(6,200,155)
(31,386)
9,560,008 $
3.25
7.23
2.94
3.56
5.01
In the year ended December 31, 2023, the service-based units that vested had an aggregate grant-date fair value of
$18 million. In the years ended December 31, 2022 and 2021, we granted 6,768,943 and 6,148,361 service-based units,
respectively, with a per unit weighted-average grant-date fair value of $3.60 and $3.56, respectively. In the years ended
December 31, 2022 and 2021, we had 5,075,374 and 4,368,749 service-based units, respectively, that vested with an aggregate
grant-date fair value of $18 million and $16 million, respectively.
Stock options—The following table summarizes activity during the year ended December 31, 2023 for vested and
unvested service-based stock options outstanding under our incentive plan:
Outstanding at January 1, 2023
Forfeited
Expired
Outstanding at December 31, 2023
Number
of shares
under option
4,175,520 $
(25,017)
(66,574)
4,083,929 $
Weighted-average
exercise price
per share
10.63
59.30
59.30
9.54
Vested and exercisable at December 31, 2023
4,083,929 $
9.54
Weighted-average
remaining
contractual term
(years)
Aggregate
intrinsic value
(in millions)
4.82 $
3.92 $
3.92 $
—
—
—
In the years ended December 31, 2022 and 2021, the stock options that vested had an aggregate grant-date fair value of
$4 million and $9 million, respectively. At December 31, 2023 and 2022, there were no outstanding unvested stock options to
purchase our shares.
Performance awards
Restricted share units—A restricted share unit subject to performance requirements is a notional unit for which the
awarded number of shares to be issued per unit remains uncertain until quantified as of the ultimate determination date
following completion of the performance period. The following table summarizes unvested activity during the year ended
December 31, 2023 for performance-based units under our incentive plan:
Unvested at January 1, 2023
Granted
Vested
Unvested at December 31, 2023
Number
of
units
Weighted-average
grant-date fair value
per unit
6,545,369 $
1,912,292
(3,025,512)
5,432,149 $
3.81
6.74
3.70
4.91
In the years ended December 31, 2023, 2022 and 2021, the performance-based units that vested had an aggregate
grant-date fair value of $11 million, $5 million and $11 million, respectively. In the years ended December 31, 2022 and 2021,
we granted 3,519,857 and 3,025,512 performance-based units, respectively, with a per unit weighted-average grant-date fair
value of $3.91 and $3.70, respectively.
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
NOTE 16—SUPPLEMENTAL BALANCE SHEET INFORMATION
Other current liabilities were comprised of the following (in millions):
Other current liabilities
Accrued employee benefits and payroll-related liabilities
Accrued interest
Accrued taxes, other than income
Finance lease liability
Operating lease liabilities
Deferred revenues
Contingent liabilities
Other
Total other current liabilities
Other long-term liabilities were comprised of the following (in millions):
Other long-term liabilities
Postemployment benefit plan obligations
Finance lease liability
Operating lease liabilities
Income taxes payable
Deferred revenues
Other
Total other long-term liabilities
December 31,
2023
2022
145
146
47
43
12
165
116
7
681
$
$
156
113
41
40
7
124
58
—
539
December 31,
2023
2022
121
276
108
80
233
40
858
$
$
170
323
100
129
204
39
965
$
$
$
$
NOTE 17—SUPPLEMENTAL CASH FLOW INFORMATION
The reconciling adjustments of our net cash provided by operating activities that were attributable to the net change in
other operating assets and liabilities were as follows (in millions):
Years ended December 31,
2022
2021
2023
Changes in other operating assets and liabilities
(Increase) decrease in accounts receivable
Increase in other assets
Increase (decrease) in accounts payable and other current liabilities
Decrease in other long-term liabilities
Change in income taxes receivable / payable, net
Change in receivables from / payables to affiliates, net
$
$
(99) $
(98)
135
(7)
(36)
(8)
(113) $
(15) $
(12)
8
(2)
(42)
(12)
(75) $
137
(13)
(52)
(3)
(17)
(15)
37
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Additional cash flow information was as follows (in millions):
Years ended December 31,
2022
2021
2023
Certain cash operating activities
Cash payments for interest
Cash payments for income taxes
Non-cash investing and financing activities
Capital additions accrued at end of period
Capital additions acquired in exchange for debt
Acquisition of outstanding ownership interests in exchange for
shares
Debt investment exchanged for equity ownership interests
Finance lease installments settled with credits issued to customer
Shares issued in exchanges of exchangeable bonds
Debt and warrants issued in exchange transactions
$
(a) $
(b)
(c)
(d)
(e)
(f)
(g)
$
$
408
41
36
—
99
37
44
434
—
$
$
355
66
31
382
—
—
41
—
110
429
57
28
—
—
—
—
—
260
(a) Additions to property and equipment for which we had accrued a corresponding liability in accounts payable at
(b)
(c)
(d)
(e)
(f)
the end of the period. See Note 7—Long-Lived Assets.
In the year ended December 31, 2022, we borrowed an aggregate principal amount of $439 million under the
Shipyard Loans to satisfy a portion of the final milestone payments due upon delivery of Deepwater Atlas and
Deepwater Titan and recorded the initial carrying amount, net of imputed interest, with a corresponding entry to
construction in progress, recorded in property and equipment. See Note 7—Long-Lived Assets and Note 9—
Debt.
In September 2023, we issued 11.9 million Transocean Ltd. shares to acquire the outstanding ownership interests
in Liquila. See Note 4—Unconsolidated Affiliates, Note 7—Long-Lived Assets and Note 14—Equity.
In September 2023, we agreed to exchange borrowings due to us under a financing arrangement with Orion for
additional equity ownership interests in Orion. See Note 4—Unconsolidated Affiliates.
In the years ended December 31, 2023 and 2022, we agreed to settle installments due to the lessor under our
finance lease by issuing corresponding credits to our customer for amounts due to us under the drilling contract.
See Note 8—Leases.
In the year ended December 31, 2023, we issued 65.1 million Transocean Ltd. shares to certain holders that
elected to exchange the 2.50% Senior Guaranteed Exchangeable Bonds, the 4.00% Senior Guaranteed
Exchangeable Bonds and the 4.625% Senior Guaranteed Exchangeable Bonds. See Note 9—Debt and Note 14
—Equity.
(g) In the year ended December 31, 2022, in connection with the 2022 Private Exchange, we issued $112 million
aggregate principal amount of the 4.625% Senior Guaranteed Exchangeable Bonds with an estimated fair value
of $105 million and 6.7 million warrants to purchase Transocean Ltd. shares with an estimated fair value of
$5 million. In the year ended December 31, 2021, in connection with the 2021 Private Exchange, we issued
$294 million aggregate principal amount of the 4.00% Senior Guaranteed Exchangeable Bonds with an
estimated fair value of $260 million. See Note 9—Debt and Note 14—Equity.
NOTE 18—FINANCIAL INSTRUMENTS
Overview—The carrying amounts and fair values of our financial instruments were as follows (in millions):
Cash and cash equivalents
Restricted cash and cash equivalents
Long-term loans receivable from unconsolidated affiliates
Total debt
Fair
value
December 31, 2023
Carrying
amount
762
$
233
6
7,413
762
233
6
7,308
$
$
Fair
value
December 31, 2022
Carrying
amount
683
308
41
7,347
683
308
43
6,412
$
Cash and cash equivalents—Our cash and cash equivalents are primarily invested in demand deposits, short-term
time deposits and money market funds. The carrying amount of our cash and cash equivalents represents the historical cost,
plus accrued interest, which approximates fair value because of the short maturities of the instruments.
Restricted cash and cash equivalents—Our restricted cash and cash equivalents, which are subject to restrictions due
to collateral requirements, legislation, regulation or court order, are primarily invested in demand deposits and money market
funds. The carrying amount of our restricted cash and cash equivalents represents the historical cost, plus accrued interest,
which approximates fair value because of the short maturities of the instruments.
Long-term loans receivable from unconsolidated affiliates—The carrying amount of our long-term loans receivable
from unconsolidated affiliates, recorded in other assets, represents the principal amount of the cash investment. We estimated
the fair value of our long-term loans receivable from unconsolidated affiliates using significant unobservable inputs,
representative of Level 3 fair value measurements, including the terms and credit spreads for the instruments.
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TRANSOCEAN LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Total debt—The carrying amount of our total debt represents the principal amount, contractual interest payments of
previously restructured debt and unamortized discounts, premiums and issue costs. The carrying amount and fair value of our
total debt includes amounts related to certain exchangeable debt instruments (see Note 9—Debt). We estimated the fair value of
our total debt using significant other observable inputs, representative of Level 2 fair value measurements, including the terms
and credit spreads for the instruments and, with respect to the exchangeable debt instruments, the expected volatility of the
market price for our shares.
NOTE 19—RISK CONCENTRATION
Interest rate risk—We are exposed to the interest rate risk related to our fixed-rate debt when we refinance maturing
debt with new debt or when we early retire debt in open market repurchases, exchanges or other market transactions. We are
also exposed to interest rate risk related to our restricted and unrestricted cash equivalents, as the interest income earned on
these investments is based on variable or short-term interest rates, which change with market interest rates.
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 market price of our shares is the primary driver of
the fair value of the exchange feature. An increase to the market price of our shares yields an increase to the carrying amount of
the exchange feature, recorded as a component of our debt, and a corresponding increase to interest expense.
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. 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. The payment portion denominated in local currency is based on anticipated local currency requirements over the
contract term. 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. The currency
exchange effect resulting from our international operations generally has not had a material impact on our operating results.
Credit risk—We are exposed to concentrations of credit risk primarily related to our restricted and unrestricted cash
and cash equivalents and customer receivables, both current and long-term. We generally maintain our restricted and
unrestricted cash and cash equivalents in time deposits at commercial banks with high credit ratings or mutual funds, which
invest exclusively in high-quality money market instruments, and because we limit the amount of exposure to any
one institution, we do not believe we are exposed to any significant credit risk. Our customer receivables, which are dispersed
in various countries, are due from integrated energy companies, government-owned or government-controlled energy
companies and other independent energy companies. For such receivables, we establish an allowance for credit losses by
applying an expected loss rate based on current and forecasted future and historical experience. Although we have encountered
only isolated credit concerns related to independent energy companies, we occasionally require collateral or other security to
support customer receivables. In certain infrequent instances, when we determine that collection is not reasonably assured, we
may offer extended payment terms and recognize revenues associated with the contract on a cash basis.
Labor agreements—At December 31, 2023, we had a global workforce of approximately 5,800 individuals, including
approximately 370 contractors. 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. 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. A failure to reach an agreement on certain key issues could result
in strikes, lockouts or other work stoppages.
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Table of Contents
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We have not had a change in or disagreement with our accountants within 24 months prior to the date of our most
recent financial statements or in any period subsequent to such date.
ITEM 9A.CONTROLS AND PROCEDURES
Disclosure controls and procedures—Our disclosure controls and procedures are designed to provide reasonable
assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is (1) accumulated
and communicated to our management, including our Chief Executive Officer, who is our principal executive officer, and our
Chief Financial Officer, who is our principal financial officer, to allow timely decisions regarding required disclosure and
(2) recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange
Commission’s rules and forms. Under the supervision and with the participation of management, including our Chief Executive
Officer and Chief Financial Officer, we performed an evaluation of the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.
Internal control over financial reporting—There were no changes to our internal control over financial reporting
during the quarter ended December 31, 2023 that have materially affected or are reasonably likely to materially affect our
internal control over financial reporting. See “Management’s Report on Internal Control Over Financial Reporting” and
“Report of Independent Registered Public Accounting Firm,” included in Item 8 of this annual report.
ITEM 9B.OTHER INFORMATION
On December 19, 2023, Keelan Adamson, President and Chief Operating Officer of the Company, adopted a
Rule 10b5-1 trading arrangement (as such term is defined under Item 408(a) of Regulation S-K) that is intended to satisfy the
affirmative defense of Rule 10b5-1(c) for the sale of up to 211,308 shares of Transocean Ltd. (the “Plan”). Sales may not
commence under the Plan until March 26, 2024 at the earliest and, for certain of the shares, only at specified market prices.
Unless earlier terminated in accordance with the terms and conditions of the Plan, the Plan expires on December 19, 2024.
As part of Transocean’s continued focus on a succession planning strategy to support the Company’s long-term
growth, on February 20, 2024, Transocean announced a transition of the role of Chief Financial Officer from Mr. Mark Mey to
Mr. Thad Vayda. Mr. Mey will continue to serve as Chief Financial Officer of Transocean until the effective date of
Mr. Vayda’s appointment, which will be determined at a later date and is expected to occur during the second quarter of 2024.
Mr. Vayda, age 61, has served as Senior Vice President of Corporate Finance and Treasurer of Transocean since
February 2023. Prior to this role, he served as Vice President, Corporate Finance and Treasurer from August 2015 until
February 2023, as Vice President, Investor Relations and Treasurer from July 2014 to August 2015, as Vice President, Investor
Relations and Communications from March 2012 to June 2014 and as Vice President, Investor Relations from July 2011 to
February 2012. Mr. Vayda initially joined Transocean in August 1995, working with the company until April 2000 in positions
that included Director of Corporate Planning and Operational Division Engineer.
Between May 2000 and June 2011, Mr. Vayda worked primarily in energy-related equity capital markets roles,
including at RBC Capital Markets and as Managing Director, Equity Research at Stifel, Nicolaus & Company where, as an
equity analyst, he published strategic and financial assessments and opinions on energy and oilfield services and equipment
companies. Earlier in his career, Mr. Vayda held various leadership positions at Northwest Airlines where he was responsible
for managing financial yield in certain markets served by the airline and, separately, determining the company’s fleet asset
strategy. Mr. Vayda started his professional career with Booz Allen Hamilton, Management Consultants.
Mr. Vayda earned a Masters in Business Administration from The Fuqua School of Business at Duke University,
Durham, North Carolina in May 1992, and a Bachelor of Science degree in Engineering from The Catholic University of
America at Washington, D.C. in May 1985.
The future appointment of Mr. Vayda is not pursuant to any agreement between him and any other person. There is no
family relationship between Mr. Vayda and any director or executive officer of Transocean, and there are no transactions
between Mr. Vayda and Transocean that are required to be reported under Item 404(a) of Regulation S-K. At this time, there are
no changes to Mr. Vayda’s compensation arrangements with Transocean, and if any such changes are made in connection with
his future appointment to the position of Chief Financial Officer, Transocean will describe such changes in a future current or
periodic report, as applicable.
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Table of Contents
ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.EXECUTIVE COMPENSATION
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
ITEM 13.CERTAIN
RELATIONSHIPS,
RELATED
TRANSACTIONS,
AND
DIRECTOR
INDEPENDENCE
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by Items 10, 11, 12, 13 and 14 is incorporated herein by reference to our definitive proxy
statement for our 2024 annual general meeting of shareholders, which will be filed with the U.S. Securities and Exchange
Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 within 120 days of December 31, 2023.
Certain information with respect to our executive officers is set forth at the end of Part I of this annual report under the caption
“Information About our Executive Officers.”
ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
INDEX TO FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
(A)
EXHIBITS
PART IV
(1) Index to Financial Statements
Included in Part II of this report:
Management’s Report on Internal Control Over Financial Reporting
Reports of Independent Registered Public Accounting Firm (PCAOB ID 00042)
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Loss
Consolidated Balance Sheets
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Page
39
40
43
44
45
46
47
48
Financial statements of unconsolidated subsidiaries are not presented herein because such subsidiaries do not meet the
significance test.
- 73 -
Table of Contents
(2) Financial Statement Schedules
TRANSOCEAN LTD. AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(in millions)
Allowance for credit losses
Balance, beginning of period
Additions: charged to cost and expenses
Additions: charged to other accounts
Deductions
Balance, end of period
Allowance for excess materials and supplies
Balance, beginning of period
Additions: charged to cost and expenses
Additions: charged to other accounts
Deductions
Balance, end of period
Valuation allowance on deferred tax assets
Balance, beginning of period
Additions: charged to cost and expenses
Additions: charged to other accounts
Deductions
Balance, end of period
Years ended December 31,
2023
2022
2021
$
$
$
$
2
—
—
—
2
199
6
—
(7)
198
$
$
$
$
2
—
—
—
2
183
16
—
—
199
$
$
$
$
2
—
—
—
2
143
43
—
(3)
183
$ 1,910
—
—
(26)
$ 1,884
$ 1,820
79
11
—
$ 1,910
$
685
1,167
—
(32)
$ 1,820
(a)
(b)
(b)
(a) Amount related to materials and supplies on rigs and related assets sold or classified as held for sale.
(b) Amount related to adjustments to other deferred tax assets with valuation allowances.
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Table of Contents
(3) Exhibits
The following exhibits are filed or furnished herewith, as indicated, or incorporated by reference to the location indicated:
NUMBER DESCRIPTION
3.1
Articles of Association of Transocean Ltd.
3.2
4.1
4.2
4.3
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
4.3.6
4.4
4.4.1
4.4.2
4.4.3
Organizational Regulations of Transocean Ltd., amended effective
as of May 12, 2023
Description of Securities Registered Pursuant to Section 12 of the
Securities Exchange Act of 1934
Indenture, dated as of February 26, 2021, by and among
Transocean Inc., the guarantors and Wells Fargo Bank, National
Association
Credit Agreement, dated June 22, 2018, among Transocean Inc., the
lenders parties thereto and Citibank, N.A., as administrative agent
and collateral agent
Increase of Commitments and First Amendment
to Credit
Agreement, dated May 13, 2019, among Transocean Inc., the
lenders and issuing banks parties thereto, Citibank, N.A., as
administrative agent, and for the limited purposes set forth therein,
Transocean Ltd. and certain of its subsidiaries
Increase of Commitments, Second Amendment to Credit Agreement
and First Amendment to Guaranties, dated July 15, 2019, among
Transocean Inc., the lenders and issuing banks parties thereto,
Citibank, N.A., as administrative agent, and for the limited purposes
set forth therein, Transocean Ltd. and certain of its subsidiaries
Curative Agreement, dated September 24, 2019, between
Transocean Inc. and Citibank, N.A., as administrative agent for the
lenders under the Credit Agreement dated June 22, 2018, as
amended
Increase of Commitments and Third Amendment
to Credit
Agreement, dated December 23, 2019, among Transocean Inc., the
lenders and issuing banks parties thereto, Citibank, N.A., as
administrative agent, and for the limited purposes set forth therein,
Transocean Ltd. and certain of its subsidiaries
Fourth Amendment to Credit Agreement, dated November 30, 2020,
among Transocean Inc., the lenders and issuing banks parties
thereto, Citibank, N.A., as administrative agent, and for the limited
purposes set forth therein, certain of Transocean Inc.’s subsidiaries
Fifth Amendment to Credit Agreement, dated July 27, 2022, among
Transocean Inc., the lenders and issuing banks parties thereto,
Citibank, N.A., as administrative agent, and for the limited purposes
set forth therein, Transocean Ltd. and certain of Transocean Inc.’s
subsidiaries
Indenture, dated as of April 15, 1997, between Transocean
Offshore Inc. and Texas Commerce Bank National Association, as
trustee
First Supplemental Indenture, dated as of April 15, 1997, between
Transocean Offshore
and Texas Commerce Bank
National Association, as trustee, supplementing the Indenture dated
as of April 15, 1997
Second Supplemental Indenture, dated as of May 14, 1999, between
Transocean Offshore (Texas) Inc., Transocean Offshore Inc. and
Chase Bank of Texas, National Association, as trustee
Fifth Supplemental Indenture, dated as of December 18, 2008,
among Transocean Ltd., Transocean Inc. and The Bank of New
York Mellon Trust Company, N.A., as trustee
Inc.
- 75 -
LOCATION
Exhibit 3.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
September 14, 2023
Exhibit 3.2 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
May 16, 2023
Filed herewith
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
February 26, 2021
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
June 27, 2018
Exhibit 10.1 to Transocean Ltd.’ s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
May 13, 2019
Exhibit 10.1 to Transocean Ltd.’ s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
July 15, 2019
Exhibit 10.2 to Transocean Ltd.’ s Quarterly Report on
Form 10-Q (Commission File No. 001-38373) for the
quarter ended September 30, 2019
Exhibit 4.6 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 001-38373) filed on
February 18, 2020
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
December 1, 2020
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
August 1, 2022
Exhibit 4.1 to Transocean Offshore Inc.’s Current Report
on Form 8-K (Commission File No. 001-07746) filed on
April 30, 1997
Exhibit 4.2 to Transocean Offshore Inc.’s Current Report
on Form 8-K (Commission File No. 001-07746) filed on
April 30, 1997
Exhibit 4.5 to Transocean Offshore Inc.’s Post-Effective
Amendment No. 1 to Registration Statement on Form S-3
(Registration No. 333-59001-99) filed on June 29, 1999
Exhibit 4.4 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
December 19, 2008
Table of Contents
NUMBER DESCRIPTION
4.4.4
Form of 7.45% Notes due April 15, 2027
4.4.5
Form of 8.00% Debentures due April 15, 2027
4.4.6
4.4.7
4.5
4.5.1
4.5.2
4.5.3
4.5.4
Officers’ Certificate establishing the terms of the 7.50% Notes due
April 15, 2031
Officers’ Certificate establishing the terms of the 7.375% Notes due
April 15, 2018
Indenture, dated as of September 1, 1997, between Global
Marine Inc. and Wilmington Trust Company, as Trustee, relating to
Debt Securities of Global Marine Inc.
First Supplemental Indenture, dated as of June 23, 2000, between
Global Marine Inc. and Wilmington Trust Company, as Trustee,
relating to Debt Securities of Global Marine Inc.
Second Supplemental Indenture, dated as of November 20, 2001,
between Global Marine Inc. and Wilmington Trust Company, as
Trustee, relating to Debt Securities of Global Marine Inc.
Third Supplemental Indenture, dated as of July 29, 2019, among
Global Marine
and Wilmington
Trust Company, as trustee, relating to Debt Securities of Global
Marine Inc.
Form of 7% Note Due 2028
Inc, Transocean
Inc.
4.5.5
Terms of 7% Notes Due 2028
4.6
4.6.1
4.6.2
4.6.3
4.6.4
4.6.5
4.7
4.8
4.8.1
Indenture, dated as of December 11, 2007, between Transocean Inc.
and Wells Fargo Bank, National Association
Inc.
Fargo
Transocean
and Wells
First Supplemental Indenture, dated as of December 11, 2007,
between
Bank,
National Association
Third Supplemental Indenture, dated as of December 18, 2008,
among Transocean Ltd., Transocean Inc. and Wells Fargo Bank,
National Association, as trustee
Fourth Supplemental Indenture, dated as of September 21, 2010,
among Transocean Ltd., Transocean Inc. and Wells Fargo Bank,
National Association, as trustee
Fifth Supplemental Indenture, dated as of December 5, 2011, among
Transocean Ltd., Transocean Inc. and Wells Fargo Bank, National
Association, as trustee
Sixth Supplemental Indenture, dated as of September 13, 2012,
among Transocean Inc., Transocean Ltd. and Wells Fargo Bank,
National Association, as trustee
Indenture, dated as of October 17, 2017, by and among
Transocean Inc., the guarantors party thereto and Wells Fargo Bank,
National Association
Registration Rights Agreement, dated as of January 30, 2018,
among Transocean Ltd., Transocean Inc., and the security holders
named therein
Amendment
to Registration Rights Agreement, dated as of
August 14, 2020, by and among Transocean Ltd., Transocean Inc.
and Perestroika (Cyprus) Ltd.
- 76 -
LOCATION
Exhibit 4.3 to Transocean Offshore Inc.’s Current Report
on Form 8-K (Commission File No. 001-07746) filed on
April 30, 1997
Exhibit 4.4 to Transocean Offshore Inc.’s Current Report
on Form 8-K (Commission File No. 001-07746) filed on
April 30, 1997
Exhibit 4.3 to Transocean Sedco Forex Inc.’s Current
Report on Form 8-K (Commission File No. 333-75899)
filed on April 9, 2001
Exhibit 4.14 to Transocean Sedco Forex Inc.’s Annual
Report on Form 10-K (Commission File No. 333-75899)
for the fiscal year ended December 31, 2001
Exhibit 4.1 of Global Marine Inc.’s Registration Statement
on Form S-4 (No. 333-39033) filed on October 30, 1997
Exhibit 4.2 of Global Marine Inc.’s Quarterly Report on
Form 10-Q (Commission File No. 001-05471) for the
quarter ended June 30, 2000
Exhibit 4.2
to GlobalSantaFe Corporation’s Annual
Report on Form 10-K (Commission File No. 001-14634)
for the year ended December 31, 2004
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
July 29, 2019
Exhibit 4.2 of Global Marine Inc.’s Current Report on
Form 8-K (Commission File No. 001-05471) filed on
May 22, 1998
Exhibit 4.1 of Global Marine Inc.’s Current Report on
Form 8-K (Commission File No. 001-05471) filed on
May 22, 1998
Exhibit 4.36 to Transocean Inc.’s Annual Report on
Form 10-K (Commission File No. 333-75899) for the year
ended December 31, 2007
Exhibit 4.37 to Transocean Inc.’s Annual Report on
Form 10-K (Commission File No. 333-75899) for the year
ended December 31, 2007
Exhibit 4.3 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
December 19, 2008
Exhibit 4.1 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended September 30, 2010
Exhibit 4.3 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
December 5, 2011
Exhibit 4.3 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
September 13, 2012
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
October 17, 2017
Exhibit 4.3 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
January 30, 2018
Exhibit 4.2 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
August 14, 2020
Table of Contents
NUMBER DESCRIPTION
4.9
4.10
4.11
4.12
4.12.1
4.13
4.14
4.15
4.16
4.16.1
4.17
10.1
10.2
* 10.3
1,
by
and
2019,
dated February
Indenture, dated October 25, 2018, among Transocean Inc., the
guarantors party
thereto and Wells Fargo Bank, National
Association, as trustee
Indenture,
among
Transocean Poseidon Limited, the Guarantors and Wells Fargo
Bank, National Association, as trustee and collateral agent
Indenture, dated January 17, 2020, by and among Transocean Inc.,
the guarantors party thereto and Wells Fargo Bank, National
Association
Indenture, dated as of September 11, 2020, by and among
Transocean Inc., the guarantors party thereto and Wells Fargo Bank,
National Association
Supplemental Indenture, dated November 30, 2020, by and among
Transocean Inc., Transocean Ltd., certain of Transocean Inc.’s
subsidiaries, and Wells Fargo Bank, National Association, as
trustee, supplementing the Indenture dated as of September 11, 2020
Indenture, dated as of September 30, 2022, by and among
Transocean Inc., the Guarantors and Truist Bank, as trustee
Warrant Agreement, dated as of September 30, 2022, by and among
Transocean Inc., Transocean Ltd. and Computershare Inc. and
Computershare Trust Company, N.A., as warrant agent
Indenture, dated as of January 17, 2023, among Transocean Titan
Financing Limited, the Guarantors and Truist Bank, as trustee and
collateral agent
Indenture, dated as of January 31, 2023, among Transocean Inc., the
Guarantors named therein and Truist Bank, as trustee and collateral
agent
First Supplemental Indenture, dated as of January 26, 2024, by and
among Transocean Inc., the Additional Guarantors, the Note Parties
and Truist Bank, as trustee and collateral agent, supplementing the
Indenture dated as of January 31, 2023
Indenture, dated as of October 11, 2023, among Transocean
Aquila Limited, the Guarantors and Truist Bank, as trustee and
collateral agent
Shipyard Credit Agreement for Deepwater Atlas, dated as of June 5,
2021, by and between Jurong Shipyard Pte. Ltd. and Transocean
Offshore Deepwater Holdings Limited
Shipyard Credit Agreement for Deepwater Titan, dated as of June 5,
2021, by and between Jurong Shipyard Pte. Ltd. and Transocean
Offshore Deepwater Holdings Limited
Amended and Restated 2015 Transocean Ltd. Long-Term Incentive
Plan
* 10.4
Long-Term Incentive Plan of Transocean Ltd. (as amended and
restated as of February 12, 2009)
* 10.5
First Amendment to Long-Term Incentive Plan of Transocean Ltd.
(as amended and restated as of February 12, 2009)
* 10.6
Deferred Compensation Plan of Transocean Offshore Inc., as
amended and restated effective January 1, 2000
* 10.7
effective
GlobalSantaFe Corporation Key Employee Deferred Compensation
Plan
to
GlobalSantaFe Corporation Key Employee Deferred Compensation
Plan effective November 20, 2001
and Amendment
January
2001
1,
- 77 -
LOCATION
Exhibit 4.32 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 001-38373) filed on
February 19, 2019
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
February 1, 2019
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
January 17, 2020
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
September 11, 2020
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
December 1, 2020
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
September 30, 2022
Exhibit 4.2 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-3873) filed on
September 30, 2022
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
January 17, 2023
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
January 31, 2023
Filed herewith
Exhibit 4.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
October 11, 2023
Exhibit 10.2 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 001-38373) for the
quarter ended June 30, 2021 filed on August 3, 2021
Exhibit 10.3 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 001-38373) for the
quarter ended June 30, 2021 filed on August 3, 2021
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission No. 001-38373) filed on May 16,
2023
Exhibit 10.5 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2008
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
May 22, 2013
Exhibit 10.10 to Transocean Sedco Forex Inc.’s Annual
Report on Form 10-K (Commission File No. 333-75899)
for the year ended December 31, 1999
Exhibit 10.33 to the GlobalSantaFe Corporation Annual
Report on Form 10-K (Commission File No. 001-14634)
for the year ended December 31, 2004
Table of Contents
NUMBER DESCRIPTION
* 10.8
Amendment to Transocean Inc. Deferred Compensation Plan
* 10.9
Form of 2004 Performance Based Nonqualified Share Option
Award Letter
* 10.10
Form of 2008 Director Deferred Unit Award
* 10.11
Form of 2009 Director Deferred Unit Award
* 10.12
Terms and Conditions of 2013 Director Deferred Unit Award
* 10.13
Terms and Conditions of 2014 Director Deferred Unit Award
* 10.14
Terms and Conditions of 2015 Director Restricted Share Unit
Award
* 10.15
Terms and Conditions of 2014 Executive Equity Award
* 10.16
Terms and Conditions of 2015 Executive Equity Award
10.17
Terms and Conditions of the July 2008 Nonqualified Share Option
Award
* 10.18
Terms and Conditions of the February 2009 Nonqualified Share
Option Award
* 10.19
Terms and Conditions of the February 2012 Long Term Incentive
Plan Award
10.20
Form of Novation Agreement dated as of November 27, 2007 by
and among GlobalSantaFe Corporation, Transocean Offshore
Deepwater Drilling Inc. and certain executives
LOCATION
Exhibit 10.1 to Transocean Inc.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
December 29, 2005
Exhibit 10.2 to Transocean Inc.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
February 15, 2005
Exhibit 10.20 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2008
Exhibit 10.19 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2009
Exhibit 10.14 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2015
Exhibit 10.15 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2015
Exhibit 10.16 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2015
Exhibit 10.19 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2015
Exhibit 10.20 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2015
Exhibit 10.2 to Transocean Inc.’s Quarterly Report on
Form 10-Q (Commission File No. 333-75899) for the
quarter ended June 30, 2008
Exhibit 10.30 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000 53533) for the year
ended December 31, 2008
Exhibit 10.28 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2011
Exhibit 10.1 to Transocean Inc.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
December 3, 2007
* 10.23
* 10.22
First Amendment to Global Marine Inc. 1990 Non-Employee
Director Stock Option Plan
Second Amendment to Global Marine Inc. 1990 Non-Employee
Director Stock Option Plan
* 10.21 Global Marine Inc. 1990 Non-Employee Director Stock Option Plan Exhibit 10.18 of Global Marine Inc.’s Annual Report on
Form 10-K (Commission File No. 001-05471) for the year
ended December 31, 1991
Exhibit 10.1 of Global Marine Inc.’s Quarterly Report on
Form 10-Q (Commission File No. 001-05471) for the
quarter ended June 30, 1995
Exhibit 10.37 of Global Marine Inc.’s Annual Report on
Form 10-K (Commission File No. 001-05471) for the year
ended December 31, 1996
GlobalSantaFe Corporation’s Registration Statement on
Form S-8 (No. 333-7070) filed June 13, 1997
Exhibit 10.25 of GlobalSantaFe Corporation’s Annual
Report on Form 20-F (Commission File No. 001-14634)
for the year ended December 31, 1998
Exhibit 10.33 of GlobalSantaFe Corporation’s Annual
Report on Form 20-F (Commission File No. 001-14634)
for the year ended December 31, 1999
* 10.26 Amendment to 1997 Long Term Incentive Plan, dated December 1,
* 10.25 Amendment to 1997 Long Term Incentive Compensation Plan
1997 Long-Term Incentive Plan
* 10.24
1999
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Table of Contents
NUMBER DESCRIPTION
* 10.27 GlobalSantaFe Corporation 1998 Stock Option and Incentive Plan
* 10.28
First Amendment to GlobalSantaFe Corporation 1998 Stock Option
and Incentive Plan
* 10.29 GlobalSantaFe Corporation 2001 Non-Employee Director Stock
Option and Incentive Plan
* 10.30 GlobalSantaFe Corporation 2001 Long-Term Incentive Plan
* 10.31 GlobalSantaFe 2003 Long-Term Incentive Plan (as Amended and
Restated Effective June 7, 2005)
* 10.32
Transocean Ltd. Pension Equalization Plan, as amended and
restated, effective January 1, 2009
* 10.33
Transocean U.S. Supplemental Retirement Benefit Plan, as
amended and restated, effective as of November 27, 2007
* 10.34 GlobalSantaFe Corporation Supplemental Executive Retirement
Plan
* 10.35
Transocean U.S. Supplemental Savings Plan, as amended and
restated, effective as of January 1, 2009
10.36
Form of
Indemnification Agreement entered
Transocean Ltd. and each of its Directors and Executive Officers
into between
* 10.37
Form of Assignment Memorandum for Executive Officers
10.38 Drilling Contract between Vastar Resources, Inc. and R&B Falcon
to
Drilling Co. dated December 9, 1998 with
Deepwater Horizon, as amended
respect
* 10.39 Amended and Restated Executive Severance Benefit Policy
10.40
10.41
10.42
* 10.43
Term Sheet Agreement for a Transocean and PSC/DHEPDS
Settlement, dated May 20, 2015,
among Triton Asset
Leasing GmbH, Transocean Deepwater Inc., Transocean Offshore
Deepwater Drilling Inc., Transocean Holdings LLC, the Plaintiffs
Steering Committee in MDL 2179, and the Deepwater Horizon
Economic and Property Damages Settlement Class
Confidential Settlement Agreement, Mutual Releases and
Agreement to Indemnify, dated May 20, 2015, among Transocean
Offshore Deepwater Drilling Inc., Transocean Deepwater Inc.,
Transocean Holdings LLC, Triton Asset Leasing GmbH, BP
Exploration and Production Inc. and BP America Production Co.
Transocean Punitive Damages and Assigned Claims Settlement
Agreement, dated May 29, 2015, among Transocean Offshore
Deepwater Drilling Inc., Transocean Deepwater Inc., Transocean
Holdings LLC, Triton Asset Leasing GmbH, the Plaintiffs Steering
Committee in MDL 2179, and the Deepwater Horizon Economic
and Property Damages Settlement Class
Employment Agreement with Jeremy D. Thigpen effective
September 1, 2016
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LOCATION
Exhibit 10.1 of Global Marine Inc.’s Quarterly Report on
Form 10-Q (Commission File No. 001-05471) for the
quarter ended March 31, 1998
Exhibit 10.2 of Global Marine Inc.’s Quarterly Report on
Form 10-Q (Commission File No. 001-05471) for the
quarter ended June 30, 2000
Exhibit 4.8 of GlobalSantaFe Corporation’s Registration
Statement on Form S-8 (No. 333-73878) filed on
November 21, 2001
Exhibit A to GlobalSantaFe Corporation’s definitive proxy
statement (Commission File No. 001-14634) filed on
March 21, 2001
Exhibit 10.4 to GlobalSantaFe Corporation’s Quarterly
Report on Form 10-Q (Commission File No. 001-14634)
for the quarter ended June 30, 2005
Exhibit 10.41 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2008
Exhibit 10.11 to Transocean Inc.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
December 3, 2007
Exhibit 10.1 to the GlobalSantaFe Corporation Quarterly
Report on Form 10-Q (Commission File No. 001-14634)
for the quarter ended September 30, 2002
Exhibit 10.44 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 000-53533) for the year
ended December 31, 2008
Exhibit 10.1 to Transocean Inc.’s Current Report on
Form 8-K (Commission File No. 333-75899) filed on
October 10, 2008
Exhibit 10.6 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000 53533) filed on
December 19, 2008
Exhibit 10.1 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended June 30, 2010
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 000-53533) filed on
November 22, 2023
Exhibit 10.3 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended June 30, 2015
Exhibit 10.6 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended June 30, 2015
Exhibit 10.7 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended June 30, 2015
Exhibit 10.1 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended September 30, 2016
Table of Contents
NUMBER DESCRIPTION
* 10.44
Employment Agreement with Mark L. Mey effective September 1,
2016
* 10.45 Amended and Restated Performance Award and Cash Bonus Plan of
Transocean Ltd.
* 10.46
Terms and Conditions of 2020 Executive Equity Awards
* 10.47
Terms and Conditions of 2020 Director Restricted Share Unit
Award
* 10.48
Terms and Conditions of 2023 Executive Equity Awards
* 10.49
Employment Agreement with Keelan Adamson
February 16, 2022
effective
21
23
24
31.1
31.2
32.1
32.2
97
101
104
Subsidiaries of Transocean Ltd.
Consent of Ernst & Young LLP
Powers of Attorney
Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
Transocean Ltd Executive Officer Incentive-Based Compensation
Recoupment Policy
Interactive data files pursuant to Rule 405 of Regulation S-T
formatted in Inline Extensible Business Reporting Language: (i) our
consolidated balance sheets as of December 31, 2023 and
December 31, 2022; (ii) our consolidated statements of operations
for the years ended December 31, 2023, 2022 and 2021; (iii) our
consolidated statements of comprehensive loss for the years ended
December 31, 2023, 2022 and 2021; (iv) our consolidated
statements of equity for the years ended December 31, 2023, 2022
and 2021; (v) our consolidated statements of cash flows for the
years ended December 31, 2023, 2022 and 2021; and (vi) the notes
to consolidated financial statements
The cover page from our annual report on Form 10-K for the year
ended December 31, 2023, formatted in Inline Extensible Business
Reporting Language
*
Compensatory plan or arrangement
LOCATION
Exhibit 10.2 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 000-53533) for the
quarter ended September 30, 2016
Exhibit 10.48 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 001-38373) for the year
ended December 31, 2020
Exhibit 10.2 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 001-38373) for the
quarter ended June 30, 2020
Exhibit 10.3 to Transocean Ltd.’s Quarterly Report on
Form 10-Q (Commission File No. 001-38373) for the
quarter ended June 30, 2020
Exhibit 10.50 to Transocean Ltd.’s Annual Report on
Form 10-K (Commission File No. 001-38373) for the year
ended December 31, 2022 filed on February 23, 2023
Exhibit 10.1 to Transocean Ltd.’s Current Report on
Form 8-K (Commission File No. 001-38373) filed on
February 17, 2022
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Furnished herewith
Furnished herewith
Filed herewith
Filed herewith
Filed herewith
Exhibits listed above as previously having been filed with the U.S. Securities and Exchange Commission are
incorporated herein by reference pursuant to Rule 12b-32 under the Securities Exchange Act of 1934 and made a part hereof
with the same effect as if filed herewith.
Certain instruments relating to our long-term debt and our subsidiaries have not been filed as exhibits since the total
amount of securities authorized under any such instrument does not exceed 10 percent of our total assets and our subsidiaries on
a consolidated basis. We agree to furnish a copy of each such instrument to the SEC upon request.
Certain agreements filed as exhibits to this Report may contain representations and warranties by the parties to such
agreements. These representations and warranties have been made solely for the benefit of the parties to such agreements and
(1) may be intended not
- 80 -
Table of Contents
as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate,
(2) may have been qualified by certain disclosures that were made to other parties in connection with the negotiation of such
agreements, which disclosures are not reflected in such agreements, and (3) may apply standards of materiality in a way that is
different from what may be viewed as material to investors.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned; thereunto duly authorized, on February 20, 2024.
TRANSOCEAN LTD.
By:
/s/ Mark L. Mey
Mark L. Mey
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
By:
/s/ David Tonnel
David Tonnel
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
- 81 -
Table of Contents
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant in the capacities indicated on February 20, 2024.
Signature
*
Chadwick C. Deaton
/s/ Jeremy D. Thigpen
Jeremy D. Thigpen
/s/ Mark L. Mey
Mark L. Mey
/s/ David Tonnel
David Tonnel
*
Glyn A. Barker
*
Vanessa C.L. Chang
*
Frederico F. Curado
*
Domenic J. Dell’Osso, Jr.
*
Vincent J. Intrieri
*
Samuel J. Merksamer
*
Frederik W. Mohn
*
Edward R. Muller
*
Margareth Øvrum
By: /s/ David Tonnel
(Attorney-in-Fact)
Title
Chair
of the Board of Directors
Chief Executive Officer
and Director
(Principal Executive Officer)
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Senior Vice President and
Chief Accounting Officer
(Principal Accounting
Officer)
Director
Director
Director
Director
Director
Director
Director
Director
Director
- 82 -
Table of Contents
- 83 -
DESCRIPTION OF TRANSOCEAN LTD.’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Exhibit 4.1
As of December 31, 2023, Transocean Ltd. had one class of securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended: registered shares, par value CHF 0.10 per share (“shares”).
Description of the Shares
The following description of the share capital of Transocean Ltd. is a summary and is subject to the complete
text of our Articles of Association, filed as Exhibit 3.1 to our Current Report on Form 8-K (Commission File No. 001-
38373) filed on September 14, 2023 (the “Articles of Association”). We encourage you to read the Articles of
Association carefully. In this description, references to “Transocean,” “we,” “our” and “us” mean Transocean Ltd.
Unless otherwise provided herein, the following description of shares is as of February 14, 2024.
General
Issued Share Capital. As of February 14, 2024, the share capital of Transocean registered shares in the
Commercial Register of the Canton of Zug (the “commercial register”), which reflects our total issued share capital,
excluding shares issued out of our conditional share capital not yet registered with the commercial register, was
84,371,527.60 Swiss francs, divided into 843,715,276 registered shares, par value 0.10 Swiss francs per share. The
total issued share capital of Transocean, including shares issued out of our conditional share capital not yet registered
with the commercial register, was 84,371,585.80 Swiss francs, divided into 843,715, 858 registered shares, par value
0.10 Swiss francs per share. The issued shares are fully paid, non-assessable, and rank pari passu with each other.
Capital Authorization (Capital Band). Article 5 of our Articles of Association provides for a share
authorization within a capital band, ranging from 83,184,490.00 Swiss francs (lower limit) to 102,129,396.70 Swiss
francs (upper limit), which allows our board of directors to issue new shares for general purposes and pursuant to
benefit and incentive plans.
General Authorization. Within the capital authorization described above, Article 5 of our Articles of
Association authorizes our board of directors to issue up to 159,449,067 new fully paid-in shares for general corporate
purposes at any time until May 11, 2024, and thereby increase the stated share capital from time to time. A capital
increase may further be affected within the range of the capital band by way of an increase of the par value of the
shares (but in any event at a maximum of 15,944,906.70 Swiss francs). Article 5 of our Articles of Association does
not currently reflect the previous issuance of 11,870,376 shares from our general share authorization to one of our
wholly owned subsidiaries, which shares were delivered as consideration for the purchase of the outstanding equity
interests of Liquila Ventures Ltd. Accordingly, the remaining authority to issue shares from our general capital band is
limited to a maximum of 147,578,691 shares.
Our board of directors determines the time of the issuance, the issue price, the manner in which the new
shares have to be paid in, the date from which the new shares carry the right to dividends and, subject to the provisions
of our Articles of Association, the conditions for the exercise of the preemptive rights with respect to the issuance and
the allotment of preemptive rights that are not exercised. The board of directors may allow preemptive rights that are
not exercised to expire, or it may place such rights or shares, the preemptive rights in respect of which have not been
exercised, at market conditions or use them otherwise in our interest. For further information on preemptive rights with
respect to our capital authorization for general purposes, see “—Preemptive Rights and Advance Subscription Rights”
below.
An increase of the share capital by means of an offering underwritten by a financial institution, a syndicate of
financial institutions or another third party or third parties, followed by an offer to the then-existing shareholders of
Transocean is permissible.
The shares will be subject to the limitations for registration in the share register pursuant to Articles 7 and 9
of our Articles of Association.
Specific Authorization. Within the capital authorization described above, Article 5 of our Articles of
Association authorizes our board of directors to issue, directly or indirectly, up to 30,000,000 new fully paid-in shares
under our benefit or incentive plans to members of our board of directors, members of our executive management
team, officers, employees, contractors, consultants or other persons providing services to us or our subsidiaries at any
time until May 11, 2028, and thereby increase the stated share capital from time to time. For such purposes, the
preemptive rights of existing shareholders are excluded. Our board of directors determines the time of the issuance, the
issue price (which may be lower than the current market price), the manner in which the new shares have to be paid
and the date from which the new shares carry the right to dividends.
Conditional Share Capital. Article 6 of our Articles of Association provides for a conditional share capital that
allows Transocean to issue up to 142,362,675 shares and thus an increase of the stated share capital by a maximum
amount of 14,236,267.50 Swiss francs. Consistent with applicable Swiss law, Article 6 of our Articles of Association
does not currently reflect the previous issuance of 582 shares out of conditional share capital following and in
connection with the exchange of certain of our exchangeable bonds. Accordingly, the remaining authority to issue
shares out of conditional share capital is limited to a maximum of 142,362,093 shares. These shares may be issued
through:
● the exercise of conversion, exchange, option, warrant or similar rights for the subscription of shares granted
to third parties or shareholders 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 us or any of our group companies or any of our respective predecessors; or
● in connection with the issuance of shares, options or other share-based awards to members of the board of
directors, members of our executive management team, officers, employees, contractors, consultants or other
persons providing services to us or our subsidiaries.
For information on preemptive rights with respect to our conditional share capital, see “—Preemptive Rights
and Advance Subscription Rights” below.
Other Classes or Series of Shares / Non-Voting Stock. The board of directors may not create shares with
increased voting powers (Stimmrechtsaktien) without the affirmative vote of shareholders holding at least two-thirds of
the voting rights and an absolute majority of the par value of the shares, each as represented (in person or by proxy) at
a general meeting of the shareholders. The board of directors may create preferred stock (Vorzugsaktien) with the vote
of a relative majority of the votes cast at a general meeting of our shareholders (not counting broker non-votes,
abstentions and blank or invalid ballots). We have not issued any non-voting stock to date (Partizipationsscheine,
Genussscheine).
Preemptive Rights and Advance Subscription Rights
Under the Swiss Code of Obligations (the “Swiss Code”), the prior approval of a general meeting of
shareholders is generally required to authorize, for later issuance, the issuance of shares, or rights to subscribe for, or
convert into, shares (which rights may be connected to debt instruments or other obligations). In addition, the existing
shareholders will have preemptive rights in relation to such shares or rights in proportion to the respective par values
of their holdings (Bezugsrechte). The shareholders may, with the affirmative vote of shareholders holding two-thirds of
the votes and the absolute majority of the par value of the shares represented at the general meeting, withdraw or limit
the preemptive rights for valid reasons (such as a merger, an acquisition or any of the reasons authorizing the board of
directors to withdraw or limit the preemptive rights of shareholders in the context of an authorized capital increase as
described below).
If the general meeting of shareholders has approved the creation of a capital band or conditional capital, it
may withdraw or restrict preemptive and advance subscription rights for valid reasons or delegate such decision to the
board of directors. If delegated, the valid reasons justifying the exclusion of the preemptive right must be stated in the
articles of association. Our Articles of Association provide for this delegation and state the valid reasons with respect
to our capital band and conditional share capital in the circumstances described below under “—Capital Band (Capital
Authorization)” and “—Conditional Share Capital.”
2
Capital Authorization (Capital Band). At any time until May 11, 2024, and pursuant to Article 5 of our
Articles of Association, our board of directors is authorized to withdraw or restrict the preemptive rights of the
shareholders with respect to a maximum of 159,449,067 shares issued for general purposes and to allot them to
individual shareholders, third parties, Transocean or any of its group companies with respect to the issuance of shares
within the capital band if:
● the issue price of the new shares is determined by reference to the market price;
● the shares are issued for raising equity capital in a fast and flexible manner, which would not be possible, or
would only be possible with great difficulty or at significantly less favorable conditions, without the
withdrawal of the preemptive rights of existing shareholders;
● the shares are issued in connection with the acquisition of companies, part(s) of companies or participations,
for the acquisition of products, intellectual property or licenses by or for investment projects of the
Transocean or any of its group companies, or the financing or refinancing of any such transactions through a
placement of shares;
● the shares are issued in connection with the intended broadening of the shareholder constituency of
Transocean in certain financial or investor markets, for the purposes of the participation of strategic partners,
including financial investors, or in connection with the listing of the shares on domestic or foreign stock
exchanges; or
● in connection with a placement or sale of shares, the grant of an over-allotment option of up to 20% of the
total number of shares to the initial purchaser(s) or underwriter(s) thereof.
Pursuant to Article 5 of our Articles of Association, the preemptive rights of existing shareholders are
excluded with respect to up to 30,000,000 shares that our board of directors is authorized to issue, directly or
indirectly, within the capital band under our benefit or incentive compensation plans to members of our board of
directors, members of our executive management team, employees, contractors, consultants and other persons
performing services to us or of any of our subsidiaries.
Conditional Share Capital. In connection with the issuance of bonds, notes, options, warrants or other
securities or contractual obligations convertible into or exercisable or exchangeable for our shares, the preemptive
rights of shareholders are excluded and the board of directors is authorized to withdraw or limit the advance
subscription rights (Vorwegzeichnungsrecht) of shareholders in connection with the issuance of bonds, notes, options,
warrants or other securities or contractual obligations convertible into or exercisable or exchangeable for our shares if
the issuance is for purposes of financing or refinancing the acquisition of an enterprise or business, parts of an
enterprise, participations or investments, or if the issuance occurs in national or international capital markets or
through a private placement.
If the advance subscription rights are withdrawn or limited:
● such securities or contractual obligations will be issued or entered into at market conditions;
● the conversion, exchange or exercise price, if any, for such securities or contractual obligations will be set
with reference to the market conditions prevailing at the date on which such securities or obligations are
issued or entered into; and
● such securities or contractual obligations may be converted, exercised or exchanged during a maximum
period of 30 years.
The preemptive rights and the advance subscription rights of shareholders are excluded with respect to shares,
bonds, notes, options, warrants or other securities or contractual obligations issued from our conditional share capital
under our incentive compensation plans to members of our board of directors, members of our executive management
team, employees, contractors, consultants or other persons providing services to us or any of our subsidiaries.
3
Dividends and Other Distributions
Under the Swiss Code, dividends (including interim dividends) may be paid out only if we have sufficient
distributable profits from the previous fiscal year or the current fiscal year, or if we have freely distributable reserves
(including statutory capital contribution reserves, which are also referred to as additional paid-in capital), each as will
be presented on our audited annual stand-alone statutory balance sheet and an audited interim stand-alone statutory
balance sheet, respectively. The affirmative vote of shareholders holding a relative majority of the votes cast at a
general meeting of shareholders (not counting broker non-votes, abstentions and blank or invalid ballots) must approve
the distribution of dividends. The board of directors may propose to shareholders that a dividend or other distribution
be paid but cannot itself authorize the distribution.
Payments out of our share capital (in other words, the aggregate par value of our registered share capital) in
the form of dividends are not allowed; however, payments out of registered share capital may be made by way of a par
value reduction. Such a par value reduction requires the approval of shareholders holding a relative majority of the
votes cast at the general meeting of shareholders (not counting broker non-votes, abstentions and blank or invalid
ballots). A special audit report must confirm that claims of our creditors remain fully covered despite the reduction in
the share capital recorded in the commercial register. A licensed audit expert must prepare the audit report and be
present at the general meeting of shareholders that adopts the resolution. The board of directors must further give
public notice of the par value reduction resolution in the Swiss Official Gazette of Commerce and notify creditors that
they may request, within one month of the public notice, satisfaction of or security for their claims. The notification
may be given before or after the general meeting of shareholders at which resolutions regarding the par value reduction
were passed.
Under the Swiss Code, if our statutory profit reserves (gesetzliche Gewinnreserve) together with our statutory
capital reserves (gesetzliche Kapitalreserve) amount to less than 20% of our share capital recorded in the commercial
register (i.e., 20% of the aggregate par value of our registered capital), then at least 5% of our annual profit must be
allocated to the statutory profit reserves. The Swiss Code and our Articles of Association permit us to accrue additional
general reserves. In addition, if we acquire our own shares, we are required to account for these shares, if acquired by
our parent company Transocean Ltd., as a negative item in our shareholders’ equity or, if these shares are acquired by
one of our subsidiaries, to create a special reserve, in each case on our audited annual or interim stand-alone statutory
balance sheet in the amount of the purchase price of the shares repurchased by our parent or our subsidiary. The
negative item in our shareholders’ equity or the reserve amount would effectively reduce our capacity to declare
dividends or effect subsequent repurchases of our shares.
Swiss companies generally must maintain a separate company, stand-alone “statutory” balance sheet for the
purpose of, among other things, determining the amounts available for the return of capital to shareholders, including
by way of a distribution of dividends. Our auditor must confirm that a proposal made by our board of directors to
shareholders regarding the appropriation of our available earnings or the distribution of freely distributable reserves
conforms to the requirements of the Swiss Code and our Articles of Association. Dividends are usually due and
payable shortly after the shareholders have passed a resolution approving the payment, but shareholders may also
resolve at the annual or extraordinary general meeting of shareholders to pay dividends in quarterly or other
installments. Our Articles of Association provide that dividends that have not been claimed within five years after the
payment date become our property and are allocated to the general statutory reserves. Dividends paid out of
distributable profits or distributable general reserves are subject to Swiss withholding tax, all or part of which can
potentially be reclaimed under the relevant tax rules in Switzerland or double taxation treaties concluded between
Switzerland and foreign countries. Distributions to shareholders in the form of a par value reduction and distributions
out of statutory capital contribution reserves are not subject to the Swiss federal withholding tax.
Dividends, if declared by us, are expected to be declared, subject to applicable limitations under Swiss law, in
U.S. dollars, or in Swiss francs, and shareholders may be given the right to elect to be paid any such dividends in U.S.
dollars or Swiss francs. Distribution through a reduction in the par value of the shares must be declared in Swiss
francs; however, shareholders may be provided with the option to elect to be paid in U.S. dollars or Swiss francs.
Repurchases of Shares
The Swiss Code limits our ability to hold or repurchase our own shares. We and our subsidiaries may only
repurchase shares if and to the extent that sufficient freely distributable equity capital is available, as described above
4
under “—Dividends and Other Distributions.” The aggregate par value of all of our shares held by us and our
subsidiaries may not exceed 10% of the registered share capital. However, we may repurchase our own shares beyond
the statutory limit of 10% if the shareholders have authorized our board of directors at a general meeting of
shareholders to repurchase shares in an amount in excess of 10% and the repurchased shares are dedicated for
cancellation. Any shares repurchased pursuant to such an authorization will then be cancelled based on a resolution of
shareholders adopted at a general meeting of shareholders subject to the approval of shareholders holding a relative
majority of the votes cast or, if shareholders have adopted a capital band authorizing our board of directors to reduce
the share capital by way of a cancellation of shares, based on a resolution of the board of directors. Repurchased shares
held by us or our subsidiaries do not carry any rights to vote at a general meeting of shareholders but are, unless
otherwise resolved by our shareholders at a general meeting, entitled to the economic benefits generally associated
with the shares.
General Meetings of Shareholders
The general meeting of shareholders is our supreme corporate body. Ordinary and extraordinary general
meetings of shareholders may be held. Among other things, the following powers will be vested exclusively in the
general meeting of shareholders:
● adoption and amendment of our Articles of Association;
● the annual election of the chairman of the board of directors, the members of the board of directors, the
members of the compensation committee of the board of directors, the auditor and the independent proxy;
● approval of the annual management report, the stand-alone statutory financial statements and the consolidated
financial statements;
● appropriation of the annual profit shown on our annual stand-alone statutory balance sheet, in particular the
distribution of any dividends;
● the determination of interim dividends and the approval of interim stand-alone statutory financial statements
required for such purposes;
● the resolution regarding the repayment of the statutory capital reserves;
● the combination of shares (“reverse stock split”);
● discharge of the members of the board of directors and the executive management team from liability for
business conduct during the previous fiscal year(s) to the extent such conduct is known to the shareholders;
● ratification of the maximum aggregate amounts of compensation of the board of directors and the executive
management team;
● subject to certain exceptions, the approval of a business combination with an interested shareholder (as such
terms are defined in our Articles of Association);
● the delisting of our shares from a stock exchange;
● the approval of the report on non-financial matters pursuant to article 964c of the Swiss Code; and
● any other resolutions that are submitted to a general meeting of shareholders pursuant to law, our Articles of
Association or by voluntary submission by the board of directors (unless a matter is within the exclusive
competence of the board of directors pursuant to the Swiss Code).
Notice and Proxy Statements
Under the Swiss Code and our Articles of Association, we must hold an annual, ordinary general meeting of
shareholders within six months after the end of our fiscal year for the purpose, among other things, of approving the
5
annual financial statements and the annual management report, the annual election of the chairperson of our board of
directors, the members of our board of directors, the members of the compensation committee of our board of
directors, our auditor and our independent proxy, and the ratification of the maximum aggregate amounts of
compensation of the board of directors and the executive management team. The invitation to general meetings must
be published in the Swiss Official Gazette of Commerce at least 20 calendar days prior to the date of the relevant
general meeting of shareholders. The notice of a meeting must state the items on the agenda and the proposals of the
board of directors and of the shareholders who requested that a shareholders meeting be held or that an item be
included on the agenda and, in case of elections, the names of the nominated candidates. The notice must also include
a short explanation of the items and proposals on the agenda of the general meeting. No resolutions may be passed at a
general meeting of shareholders concerning agenda items for which proper notice was not given. This does not apply,
however, to proposals made during a general meeting of shareholders to convene an extraordinary general meeting of
shareholders, to initiate a special investigation or to elect the statutory auditor. No previous notification will be
required for proposals concerning items included on the agenda or for debates as to which no vote is taken.
Annual general meetings of shareholders are convened by the board of directors or, under certain
circumstances required by law, by the auditor. A general meeting of shareholders can be held anywhere in Switzerland.
A special authorizing provision in the articles of association is required to hold a general meeting outside of
Switzerland. Our current articles of association do not include such an authorization. General meetings that are held
only virtually require a special authorization in the articles of association. Our current Articles of Association do not
include such an authorization.
We expect to set the record date for each general meeting of shareholders on a date not more than 20 calendar
days prior to the date of each general meeting and announce the date of the general meeting of shareholders prior to the
record date.
Extraordinary General Meetings of Shareholders
An extraordinary general meeting may be called upon the resolution of the board of directors or, under certain
circumstances required by law, by the auditor. In addition, the board of directors is required to convene an
extraordinary general meeting of shareholders if so resolved by the general meeting of shareholders, or if so requested
by shareholders who, in the aggregate, represent at least 5% of the share capital or votes recorded in the commercial
register, specifying the items to be included on the agenda and their proposals. Upon such a shareholder request, the
board of directors must publish the necessary notice to convene a general meeting within 60 calendar days.
If it appears from the annual stand-alone statutory balance sheet that half of the sum of our share capital, the
non-distributable statutory capital reserves and the statutory profit reserves are not covered by our assets
(Kapitalverlust), the board of directors is required to take measures to remedy the capital loss situation of the company,
where necessary take further measures to effect a financial restructuring of the company or request the general meeting
of shareholders to approve such measures as are within its authority.
Agenda Requests
Under our Articles of Association, any shareholder may request that an item or a proposal relating to an
agenda item be included on the agenda of a general meeting of shareholders. Such shareholder may also nominate one
or more directors for election. A request for inclusion of an item on the agenda or a proposal relating to an agenda item
must be made in writing at least 30 calendar days prior to the anniversary date of the proxy statement in connection
with our last annual general meeting of shareholders; provided, however, that if the date of the general meeting of
shareholders is more than 30 calendar days before or after the anniversary date of the last annual general meeting of
shareholders, such request must instead be made by the tenth calendar day following the date on which we have made
public disclosure of the date of the general meeting of shareholders. The request must specify in writing the relevant
agenda items and proposals, together with evidence of the required shares recorded in the share register, as well as any
other information as would be required to be included in a proxy statement pursuant to the rules of the U.S. Securities
and Exchange Commission.
Under the Swiss Code, a general meeting of shareholders for which a notice of meeting has been duly
published may not be adjourned without publishing a new notice of meeting.
6
Our annual report, our stand-alone and consolidated financial statements, the auditors’ reports thereon, our
compensation report pursuant to Swiss law and the auditor’s reports thereon, and our report on non-financial matters
pursuant to article 964c of the Swiss Code (to the extent required by applicable law) must be made available to our
shareholders no later than 20 calendar days prior to the annual general meeting of shareholders. If these documents are
not accessible electronically, each shareholder may request that these documents be promptly sent to it in due course,
free of charge.
Voting
Each of our shares carries one vote at a general meeting of shareholders. Voting rights may be exercised by
shareholders registered in our share register or by a duly appointed proxy of a registered shareholder (including the
independent proxy), which proxy need not be a shareholder. Our Articles of Association do not limit the number of
shares that may be voted by a single shareholder. Shareholders wishing to exercise their voting rights who hold their
shares through a bank, broker or other nominee should follow the instructions provided by such bank, broker or other
nominee or, absent instructions, contact such bank, broker or other nominee for instructions. Shareholders holding
their shares through a bank, broker or other nominee will not automatically be registered in our share register. If any
such shareholder wishes to be registered in our share register, such shareholder should contact the bank, broker or
other nominee through which it holds our shares.
Treasury shares, whether owned by us or one of our majority-owned subsidiaries, will not be entitled to vote
at general meetings of shareholders.
Our Articles of Association do not provide for cumulative voting for the election of directors.
Pursuant to our Articles of Association, the shareholders generally pass resolutions by the affirmative vote of
a relative majority of the votes cast at the general meeting of shareholders (broker non-votes, abstentions and blank
and invalid ballots will be disregarded), unless otherwise provided by law or our Articles of Association. However, our
Articles of Association provide that directors may be elected at a general meeting of shareholders by a plurality of the
votes cast by the shareholders present in person or by proxy at the meeting. Our Corporate Governance Guidelines
have a majority vote policy that provides that the board may nominate only those candidates for director who have
submitted an irrevocable letter of resignation which would be effective upon and only in the event that (1) such
nominee fails to receive a sufficient number of votes from shareholders in an uncontested election and (2) the board
accepts the resignation following such failure. If a nominee who has submitted such a letter of resignation does not
receive more votes cast “for” than “against” the nominee’s election, the corporate governance committee must
promptly review the letter of resignation and recommend to the board of directors whether to accept the tendered
resignation or reject it. The board of directors must then act on the corporate governance committee’s recommendation
within 90 days following the shareholder vote. The board of directors must promptly disclose its decision regarding
whether or not to accept the nominee’s resignation letter.
The acting chair may direct that resolutions and elections be held by use of an electronic voting system.
Electronic resolutions and elections are considered equal to resolutions and elections taken by way of a written ballot.
The Swiss Code and/or our Articles of Association require the affirmative vote of at least two-thirds of the
voting rights and the absolute majority of the par value of the shares, each as represented at a general meeting to
approve, among other things, the following matters:
● the amendment to or the modification of the purpose clause in our Articles of Association;
● a reverse stock split;
● the creation or cancellation of shares with privileged voting rights;
● the restriction on the transferability of shares or cancellation thereof;
● the restriction on the exercise of the right to vote or the cancellation thereof;
● the introduction of or the amendment to a capital band or conditional share capital;
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● the change of currency of our share capital;
● the delisting of our shares from a stock exchange;
● an increase in the share capital through (1) the conversion of capital surplus, (2) a contribution in kind, or for
purposes of an acquisition of assets, or (3) a grant of special privileges;
● the limitation on or withdrawal of preemptive rights;
● a change in our registered office;
● the conversion of registered shares into bearer shares and vice versa;
● the introduction of an arbitration agreement in our Articles of Association; and
● our dissolution.
The same qualified voting requirements apply to resolutions in relation to transactions among corporations
based on Switzerland’s Federal Act on Mergers, Demergers, Transformations and the Transfer of Assets and Liabilities
(the “Merger Act”), including a merger, demerger or conversion of a corporation (other than a cash-out or certain
squeeze-out mergers, in which minority shareholders of the company being acquired may be compensated in a form
other than through shares of the acquiring company, for instance, through cash or securities of a parent company of the
acquiring company or of another company—in such a merger, an affirmative vote of 90% of the outstanding shares is
required). Swiss law may also impose this qualified voting requirement in connection with the sale of “all or
substantially all of our assets” by us. See “—Compulsory Acquisitions; Appraisal Rights” below.
Our Articles of Association require the affirmative vote of at least two-thirds of the shares entitled to vote at a
general meeting to approve the following matters:
● the removal of a serving member of the board of directors;
● any changes to Article 14, paragraph 1 specifying advance notice of proposal requirements;
● any changes to Article 18 specifying vote requirements for resolutions and elections;
● any changes to Article 20, paragraph 2 specifying qualified vote requirements;
● any changes to Article 21 specifying quorum requirements;
● any changes to Article 22 specifying the number of members of the board of directors;
● any changes to Article 23 specifying the term of the board of directors; and
● any changes to Article 24 specifying the organization of the board of directors and the indemnification
provisions for directors and officers.
Our Articles of Association require the affirmative vote of holders of the number of our shares at least equal
to the sum of (A) two-thirds of the number of all shares outstanding and entitled to vote at a general meeting, plus (B)
a number of shares outstanding and entitled to vote at the general meeting that is equal to one-third of the number of
shares held by an interested shareholder, for us to engage in any business combination with an interested shareholder
(as those terms are defined in our Articles of Association) and for the amendment of the provisions in our Articles of
Association relating to this shareholder approval requirement.
Quorum for General Meetings
The presence of shareholders, in person or by proxy, holding at least a majority of the shares entitled to vote
at the time when the general meeting proceeds to business is generally the required presence for a quorum for the
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transaction of business at a general meeting of shareholders. However, the presence of shareholders, in person or by
proxy, holding at least two-thirds of the share capital recorded in the commercial register at the time when the general
meeting proceeds to business is the required presence for a quorum to adopt a resolution to amend, vary, suspend the
operation of or cause any of the following provisions of our Articles of Association to cease to apply:
● Article 18—which relates to proceedings and procedures at general meetings;
● Article 19(j)—which relates to business combinations with interested shareholders;
● Article 20—which sets forth the level of shareholder approval required for certain matters;
● Article 21—which sets forth the quorum at a general meeting required for certain matters, including the
removal of a serving member of the board of directors; and
● Articles 22, 23 and 24—which relate to the size and the organization of the board of directors, the term of
directors and the indemnification provisions for directors and officers.
Additionally, shareholders present, in person or by proxy, holding at least two-thirds of the share capital
recorded in the commercial register at the time when the general meeting proceeds to business constitute the required
presence for a quorum at a general meeting to adopt a resolution to remove a serving director.
Under the Swiss Code, the board of directors has no authority to waive quorum requirements stipulated in the
articles of association.
Inspection of Books and Records
Under the Swiss Code, a shareholder has a right to inspect the share register with regard to his, her or its own
shares and otherwise to the extent necessary to exercise his, her or its shareholder rights. No other person has a right to
inspect the share register. Shareholders who hold, alone or together, shares representing at least 5% of the share capital
or the votes may request to inspect our books and records. Subject to safeguarding business secrets or other of our
material interests, our board of directors may authorize such inspection to the extent necessary to exercise shareholder
rights within four months following receipt of such requests. At a general meeting of shareholders, any shareholder is
entitled to request information from the board of directors concerning the affairs of the company. Shareholders may
also ask the auditor questions regarding its audit of the company. The board of directors and the auditor must answer
shareholders’ questions to the extent necessary for the exercise of shareholder rights and subject to safeguarding
business secrets or other of our material interests.
Special Investigation
If the shareholders’ inspection and information rights as outlined above prove to be insufficient, any
shareholder may propose to the general meeting of shareholders that a special independent commissioner investigate
specific facts in a special investigation. If the general meeting of shareholders approves the proposal, we or any
shareholder may, within 30 calendar days after the general meeting of shareholders, request the court at our registered
office to appoint a special independent commissioner. If the general meeting of shareholders rejects the request, one or
more shareholders representing at least 5% of the share capital or the votes may request, within three months after the
general meeting, the court to appoint a special independent commissioner. The court will issue such an order if the
petitioners can demonstrate prima facie that the board of directors, any member of our board of directors or one of our
officers infringed the law or our Articles of Association and such infringements are capable of causing damage the
company or the shareholders. The costs of the investigation would generally be allocated to us and only in exceptional
cases to the petitioners.
Compulsory Acquisitions; Appraisal Rights
Swiss companies that undertake business combinations and other transactions that are binding on all
shareholders are governed by the Merger Act. A statutory merger or demerger requires that at least two-thirds of the
votes and the absolute majority of the par value of the shares, each as represented at the general meeting of
shareholders, vote in favor of the transaction. Under the Merger Act, a “demerger” may take two forms:
9
● a legal entity may divide all of its assets and transfer such assets to other legal entities, with the shareholders
of the transferring entity receiving equity securities in the acquiring entities and the transferring entity
dissolving upon deregistration in the commercial register; or
● a legal entity may transfer all or a portion of its assets to other legal entities, with the shareholders of the
transferring entity receiving equity securities in the acquiring entities.
If a transaction under the Merger Act receives all of the necessary consents, all shareholders would be
compelled to participate in the transaction. See “—Voting” above.
Swiss companies may be acquired by an acquirer through the direct acquisition of the share capital of the
Swiss company. With respect to corporations limited by shares, such as Transocean, the Merger Act provides for the
possibility of a so-called “cash-out” or “squeeze-out” merger if the acquirer controls 90% of the outstanding shares. In
these limited circumstances, minority shareholders of the company being acquired may be compensated in a form
other than through shares of the acquiring company (for instance, through cash or securities of a parent company of the
acquiring company or of another company). For business combinations effected in the form of a statutory merger or
demerger and subject to Swiss law, the Merger Act provides that if the equity rights have not been adequately
preserved or compensation payments in the transaction are unreasonable, a shareholder may request the competent
court to determine a reasonable amount of compensation.
In addition, under Swiss law, the sale of “all or substantially all of our assets” by us may require a resolution
of the general meeting of shareholders passed by holders of at least two-thirds of the votes and the absolute majority of
the par value of the shares, each as represented at the general meeting of shareholders. Whether or not a shareholder
resolution is required depends on the particular transaction, including whether the following test is satisfied:
● the company sells a core part of its business, without which it is economically impracticable or unreasonable
to continue to operate the remaining business;
● the company’s assets, after the divestment, are not invested in accordance with the company’s statutory
business purpose; and
● the proceeds of the divestment are not earmarked for reinvestment in accordance with the company’s business
purpose but, instead, are intended for distribution to shareholders or for financial investments unrelated to the
company’s business.
If all of the foregoing apply, a shareholder resolution would likely be required.
Legal Name; Formation; Fiscal Year; Registered Office
Transocean Ltd. was initially formed on August 18, 2008. It is incorporated and domiciled in Steinhausen,
Canton of Zug, Switzerland, and operates under the Swiss Code as a stock corporation (Aktiengesellschaft).
Transocean Ltd. is recorded in the Commercial Register of the Canton of Zug with the registration number CHE-
114.461.224. Transocean’s fiscal year is the calendar year.
The address of Transocean’s registered office is Transocean Ltd., Turmstrasse 30, 6312 Steinhausen,
Switzerland, and the telephone number at that address is +41 (41) 749 0500.
Corporate Purpose
Transocean Ltd. is the parent holding company of the Transocean group. Pursuant to its Articles of
Association, its business purpose is to acquire, hold, manage, exploit and sell, whether directly or indirectly,
participations in businesses in Switzerland and elsewhere, in particular in businesses that are involved in offshore
contract drilling services for oil and gas wells, oil and gas drilling management services, drilling engineering services
and drilling project management services and oil and gas exploration and production activities, and to provide
financing for this purpose. Transocean Ltd. may acquire, hold, manage, mortgage and sell real estate and intellectual
property rights in Switzerland and elsewhere.
10
Duration and Liquidation
Our Articles of Association do not limit our duration. Under Swiss law, we may be dissolved at any time by a
resolution adopted at a general meeting of shareholders, which must be passed by the affirmative vote of holders of at
least two thirds of votes and the absolute majority of the par value of the shares, each as represented (in person or by
proxy) at the general meeting. Dissolution and liquidation by court order is possible if (1) we become bankrupt or (2)
shareholders holding at least 10% of our share capital so request for valid reasons. Under Swiss law, any surplus
arising out of liquidation (after the settlement of all claims of all creditors) is distributed in proportion to the paid-up
par value of shares held. The amount exceeding the par value of the share is subject to Swiss withholding tax of 35%.
Our shares carry no privilege with respect to such liquidation surplus.
Uncertificated Shares
Our shares have been issued in uncertificated form in accordance with article 973c of the Swiss Code as
uncertificated securities, which have been registered with Computershare, and constitute intermediated securities
within the meaning of the Swiss Federal Act on Intermediated Securities. In accordance with article 973c of the Code,
Transocean Ltd. maintains a register of uncertificated securities (Wertrechtebuch).
Stock Exchange Listing
Our shares are listed and trade on the New York Stock Exchange under the symbol “RIG.”
No Sinking Fund
The shares have no sinking fund provisions.
No Liability for Further Calls or Assessments
The shares that have been issued to date are duly and validly issued, fully paid and non-assessable.
No Redemption and Conversion
The shares are not convertible into shares of any other class or series or subject to redemption either by us or
the holder of the shares.
Transfer and Registration of Shares
We have not imposed any restrictions applicable to the transfer of our shares, other than the requirement that
an acquirer of shares expressly declares to have acquired the shares in its own name and for its own account. Our share
register is maintained by Computershare, which acts as transfer agent and registrar. The share register reflects only
record owners of our shares. Swiss law does not recognize fractional share interests.
11
EXHIBIT 4.16.1
FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE, dated as of January 26, 2024 (this
“Supplemental Indenture”) is among Transocean Inc., a Cayman Islands exempted company (the
“Company”), Transocean Enabler Rigco Limited, a Cayman Islands exempted company (“Enabler
Rigco”), Transocean Encourage Rigco Limited, a Cayman Islands exempted company
(“Encourage Rigco” and together with Enabler Rigco, each an “Additional Guarantor” and
collectively, the “Additional Guarantors”), which are subsidiaries of Transocean Ltd., each of the
other existing Note Parties (as defined in the Indenture referred to below) and Truist Bank, as
Trustee and Collateral Agent.
RECITALS
WHEREAS, the Company, the other Note Parties, the Trustee and the Collateral Agent
entered into an Indenture, dated as of January 31, 2023 (as heretofore amended, supplemented or
otherwise modified, the “Indenture”), providing for the issuance of the Company’s 8.75% Senior
Secured Notes due 2030 (the “Securities”);
WHEREAS, Enabler Rigco is a Wholly-Owned Subsidiary of Enabler OwnCo and
Encourage Rigco is a Wholly-Owned Subsidiary of Encourage OwnCo;
WHEREAS, Enabler OwnCo intends to contribute intercompany receivables related to the
Collateral Rig known as “TRANSOCEAN ENABLER” to Enabler Rigco;
WHEREAS, Encourage OwnCo intends to contribute intercompany receivables related to
the Collateral Rig known as “TRANSOCEAN ENCOURAGE” to Encourage Rigco;
WHEREAS, Section 10.01(d) of the Indenture provides that the Company, the other Note
Parties, the Trustee and the Collateral Agent may amend or supplement the Indenture in order to
add any additional Guarantor with respect to the Securities, without notice to or consent of the
Holders of the Securities; and
WHEREAS, Section 10.01(a) of the Indenture provides that the Company, the other Note
Parties, the Trustee and the Collateral Agent may amend or supplement the Indenture in order to
make other provisions with respect to matters or questions arising under the Indenture or the other
Note Documents, provided such action shall not adversely affect the interests of the Holders of the
Securities in any material respect;
NOW, THEREFORE, in consideration of the above premises, the Company, the Additional
Guarantors, the other Note Parties, the Trustee and the Collateral Agent covenant and agree for the
equal and proportionate benefit of the respective Holders of the Securities as follows:
Section 1. Capitalized Terms. Capitalized terms used herein without definition shall have
the meanings ascribed to them in the Indenture.
Section 2. Relation to Indenture. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be construed in connection
with and as part of, the Indenture for any and all purposes.
Section 3. Effectiveness of Supplemental Indenture. This Supplemental Indenture shall
become effective immediately upon its execution and delivery by each of the Company, the
Additional Guarantors, the other Note Parties, the Trustee and the Collateral Agent.
Section 4. Agreement to Guarantee. Each Additional Guarantor hereby agrees to, and by its
execution of this Supplemental Indenture hereby does, become a party to the Indenture as a
Guarantor and as such shall have all of the rights and is bound by the provisions of the Indenture
applicable to Guarantors to the extent provided for and subject to the limitations therein, including
Article 11 thereof. Each Additional Guarantor hereby unconditionally and irrevocably guarantees,
jointly and severally, on a senior secured basis to each Holder and to the Trustee and the Collateral
Agent and their successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the Indenture with respect to
the Securities and (b) the full and punctual performance within applicable grace periods of all other
obligations of the Company under the Indenture with respect to the Securities.
Section 5. Amendments to the Indenture. The Indenture is hereby amended as follows:
(a)
Section 1.01 is hereby amended by inserting the following new definition in the
appropriate alphabetical order:
““Collateral Rig Receivables Pledgor” means any Wholly-Owned Subsidiary of a
Collateral Rig Owner or Collateral Rig Operator, provided that (i) such Wholly-Owned
Subsidiary owns (or intends to own) intercompany receivables related to the Collateral Rig
owned and/or operated by its parent company and (ii) all of the Equity Interests of such
Wholly-Owned Subsidiary are indirectly pledged (via the pledge of its parent company’s
Equity Interests) to the Collateral Agent to secure the Notes Obligations.”
(b)
The definition of “Account and Receivables Pledge Agreement” is hereby amended
and restated in its entirety as follows:
““Account and Receivables Pledge Agreement” means each account and
receivables pledge agreement pursuant to which a Collateral Rig Owner or Collateral Rig
Receivables Pledgor grants a security interest to the Collateral Agent in, to the extent
applicable, (a) the applicable Bareboat Account, (b) all receivables owing to the Collateral
Rig Owner under the Bareboat Charter or due from the Collateral Rig Operator and (c) all
intercompany receivables owing to such Collateral Rig Owner or such Collateral Rig
Receivables Pledgor, forms of which are to be executed on or about the Issue Date, or such
later date as may be applicable, with such changes to such forms as are necessary or
advisable to account for local law requirements or the granting of security interests in (a)
and (b) only, (c) only or (a) – (c) inclusive (as applicable) in the same document.”
(c)
Clause (8) of the definition of “Collateral and Guaranty Requirements” is hereby
amended by inserting the following text after “each Collateral Rig Owner”:
“and each Collateral Rig Receivables Pledgor (with respect to the intercompany
receivables owing to such Collateral Rig Receivables Pledgor), if any,”
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(d)
Clause (8) of the definition of “Collateral and Guaranty Requirements” is hereby
further amended by inserting the following text after “intercompany receivables owing to such
Collateral Rig Owner”:
“or such Collateral Rig Receivables Pledgor, if any,”
(e)
Clause (10) of the definition of “Collateral and Guaranty Requirements” is hereby
amended by inserting the following text after “each Collateral Rig Owner”:
“and each Collateral Rig Receivables Pledgor (with respect to the intercompany
receivables owing to such Collateral Rig Receivables Pledgor), if any,”
(f)
Clause (13) of the definition of “Collateral and Guaranty Requirements” is hereby
amended by inserting the following text after “Fundamental Change”:
“, initial contribution of intercompany receivables to a Collateral Rig Receivables
Pledgor,”
(g)
Clause (y) of the definition of Collateral Grantor is hereby amended by inserting the
following text after “Collateral Rig Operators”:
“, the Collateral Rig Receivables Pledgors”
(h)
The definition of Collateral Rig Guarantor Family is hereby amended by inserting
the following text immediately before the period at the end thereof:
“, together, within each Collateral Rig Family, with any Collateral Rig Receivables
Pledgor that owns receivables related to the Collateral Rig(s) of such Collateral Rig
Family”
(i)
Clause (b) of Section 4.04 is hereby amended by inserting the following text after
“Collateral Rig Operators”:
“, the Collateral Rig Receivables Pledgors”
(j)
Clause (c) of Section 4.04 is hereby amended by inserting the following text after
“Collateral Rig Owners”:
“, the Collateral Rig Receivables Pledgors”
(k)
Clause (b) of Section 4.05 is hereby amended by replacing the text “Each Collateral
Rig Owner shall not Incur” with the following:
“Each Collateral Rig Owner and each Collateral Rig Receivables Pledgor shall not
Incur”
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(l)
The proviso at the end of Section 4.06(a) is hereby amended by inserting the
following text after “a Collateral Rig Owner”:
“, a Collateral Rig Receivables Pledgor”
(m)
Clause (a)(3) of Section 4.09 is hereby amended by inserting the following text after
“Collateral Rig Owners”:
“, the Collateral Rig Receivables Pledgors”
(n)
Clause (a)(4) of Section 4.09 is hereby amended by inserting the following text after
“Collateral Rig Owners”:
“, the Collateral Rig Receivables Pledgors”
(o)
Section 4.10 is hereby amended by inserting the following text after each reference
to “Existing Collateral Rig Issuers,”:
“the Collateral Rig Receivables Pledgors,”
(p)
The introduction sentence of Clause (b) of Section 4.13 is hereby amended and
restated in its entirety to read as follows:
“Each Collateral Rig Owner and each Collateral Rig Receivables Pledgor will not,
in any transaction or series of transactions, consummate a Fundamental Change,
unless:”
(q)
as follows:
Clause (b)(1) of Section 4.13 is hereby amended and restated in its entirety to read
“either (x) such Collateral Rig Owner or Collateral Rig Receivables Pledgor, as
applicable, immediately prior to consummation of such Fundamental Change shall
be the continuing Person or (y) the Person (if other than such Collateral Rig Owner
or such Collateral Rig Receivables Pledgor, as applicable, immediately prior to
consummation of such Fundamental Change) formed by such consolidation or into
which such Collateral Rig Owner or such Collateral Rig Receivables Pledgor, as
applicable, immediately prior to consummation of such Fundamental Change is
merged or amalgamated, or to which such sale, lease, conveyance, transfer or other
disposition is made (the “Successor Collateral Rig Owner” or the “Successor
Collateral Rig Receivables Pledgor”, as applicable) (i) is a Subsidiary of Holdings
and the Company (or their respective successors) that is in compliance with Section
4.11(b) (with respect to the Successor Collateral Rig Owner) and Section 4.26, (ii)
is organized under the laws of a Permitted Jurisdiction, (iii) shall become a
Collateral Rig Owner or Collateral Rig Receivables Pledgor, as applicable, a
Guarantor and a Collateral Grantor hereunder and assume by supplemental
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indenture, assumption agreement or otherwise, in each case in form and
substance reasonably satisfactory to the Trustee, all obligations of a Collateral Rig
Owner or a Collateral Rig Receivables Pledgor, as applicable, under the applicable
Note Documents and (iv) the Collateral and Guaranty Requirements in respect of
each Collateral Rig remain satisfied immediately after giving effect to such
Fundamental Change;”
(r)
Clause (b) of Section 4.19 is hereby amended and restated in its entirety to read as
follows:
“Each Collateral Rig Owner and Collateral Rig Receivables Pledgor (if any) shall
document all transfers of funds received by it under (or, with respect to any Collateral Rig
Receivables Pledgor, any proceeds of) an applicable Bareboat Charter to any of its
Affiliates (other than (i) ordinary course intercompany billings and payments of amounts
due to a Collateral Rig Operator under such Bareboat Charter, (ii) distributions to the
Company permitted under Section 4.18(a) and (iii) contributions to the Collateral Rig
Receivables Pledgors (if any) so long as the Collateral and Guaranty Requirements are
satisfied with respect to such Collateral Rig Receivables Pledgor(s)) as intercompany
loans.”
(s)
Clause (c) of Section 4.19 is hereby amended by inserting the following text after
the reference to “owed to a Collateral Rig Owner”:
“or a Collateral Rig Receivables Pledgor”
(t)
Section 4.22 is hereby amended by inserting the following text after the reference to
“Collateral Rig Owners”:
“, the Collateral Rig Receivables Pledgors”
(u)
Section 4.23 is hereby amended by inserting the following text after each reference
to “Collateral Rig Owners”:
“, the Collateral Rig Receivables Pledgors”
(v)
Clause (a) of Section 4.24 is hereby amended by inserting the following text after
the reference to “each Collateral Rig Owner”:
“and each Collateral Rig Receivables Pledgor”
(w)
Section 4.26 is hereby amended by inserting the following text to the end thereof:
“No Collateral Rig Owner shall contribute any intercompany receivables owned by
it to any Person, other than (i) to a Collateral Rig Receivables Pledgor and (ii) subject to the
satisfaction of the above-listed conditions that would otherwise be applicable to the
5
Collateral Rig Owner, but solely to the extent applicable to its contribution of intercompany
receivables.”
(x)
as follows:
Clause (a)(3) of Section 11.06 is hereby amended and restated in its entirety to read
“(3)
(i) in the case of a Collateral Rig Owner, upon the replacement of such
Collateral Rig Owner in connection with a transfer of the applicable Collateral Rig in
accordance with Section 4.26 pursuant to which another Wholly-Owned Subsidiary of
Holdings shall become a Collateral Rig Owner and a Guarantor hereunder or (ii) in the case
of a Collateral Rig Receivables Pledgor, upon such Wholly-Owned Subsidiary ceasing to
own any intercompany receivables related to the Collateral Rig owned and/or operated by
its parent company (other than as a result of a transfer of such intercompany receivables in
violation of a Note Document).”
(y)
Clause (d) of Section 12.02 is hereby amended and restated in its entirety to read as
follows:
“(d)
in part, (i) upon the transfer of a Collateral Rig, the transfer of a Drilling
Contract or a Flag Jurisdiction Transfer, in each case, in accordance with Section 4.24 and
4.26, if applicable, and (ii) with respect to the Collateral owned by a Collateral Rig
Receivables Pledgor, upon such Collateral Rig Receivables Pledgor ceasing to own any
intercompany receivables related to the Collateral Rig owned and/or operated by its parent
company (other than as a result of a transfer of such intercompany receivables in violation
of a Note Document).”
Section 6. Ratification of Obligations. Except as specifically modified herein, the Indenture
and the Securities are in all respects ratified and confirmed (mutatis mutandis) and shall remain in
full force and effect in accordance with their terms.
Section 7. The Trustee and Collateral Agent. Except as otherwise expressly provided
herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by
the Trustee or the Collateral Agent by reason of this Supplemental Indenture. This Supplemental
Indenture is executed and accepted by the Trustee and the Collateral Agent subject to all the terms
and conditions set forth in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee and the Collateral
Agent with respect hereto. The Trustee and the Collateral Agent make no representation as to the
validity or sufficiency of this Supplemental Indenture.
Section 8. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
Section 9. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of such executed copies together shall
represent the same agreement. Signature of the parties hereto transmitted by facsimile or PDF shall
be deemed to be their original signatures for all purposes.
6
[Signatures on following pages]
7
COMPANY:
TRANSOCEAN INC.
By:
/s/William Flance
Name: William Flance
Title: President
ADDITIONAL GUARANTORS:
TRANSOCEAN ENABLER RIGCO
LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
TRANSOCEAN ENCOURAGE
RIGCO LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
EXISTING NOTE PARTIES:
TRANSOCEAN LTD.
By:
/s/Sandro Thoma
Name: Sandro Thoma
Title: Chief Counsel & Corporate
Secretary
TRANSOCEAN PHOENIX 2 LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
[Signature Page to First Supplemental Indenture]
TRITON CAPITAL II GMBH
By:
/s/Roger Antenen
Name: Roger Antenen
Title: Managing Director
TRANSOCEAN PROTEUS LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
TRITON CAPITAL I GMBH
By:
/s/Roger Antenen
Name: Roger Antenen
Title: Managing Director
TRANSOCEAN GUARDIAN LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
TRANSOCEAN ENABLER LIMITED
By:
/s/Máté Földessy
Name: Máté Földessy
Title: Vice President
[Signature Page to First Supplemental Indenture]
TRANSOCEAN ENCOURAGE LIMITED
By:
/s/Máté Földessy
Name: Máté Földessy
Title: Vice President
TRANSOCEAN PONTUS LIMITED
By:
/s/William Flance
Name: William Flance
Title: President
TRITON GEMINI GMBH
By:
/s/Roger Antenen
Name: Roger Antenen
Title: Managing Director
TRUSTEE AND COLLATERAL AGENT:
TRUIST BANK, as Trustee and
Collateral Agent
By:
/s/Patrick Giordano
Name: Patrick Giordano
Title: Vice President
[Signature Page to First Supplemental Indenture]
Exhibit 21
SUBSIDIARIES OF TRANSOCEAN LTD.
(as of December 31, 2023)
Entity
Jurisdiction
15375 Memorial Corporation
Agon Shipping Inc.
Aguas Profundas, Limitada
Angola Deepwater Drilling Company (Offshore
Services) Ltd
AngoSantaFe - Prestacao de Servicos Petroliferos,
Limitada
Arcade Drilling AS
Asie Sonat Offshore Sdn. Bhd.
Blegra Financing Limited
Challenger Minerals Inc.
Covent Garden - Serviços e Marketing, Sociedade
Unipessoal Lda
Deepwater Drilling (Transocean Ghana) LTD
Deepwater Drilling North Africa LLC - Free Zone
Deepwater Pacific 1 Inc.
Deepwater Supply Inc.
Drillship Alonissos Owners Inc.
Drillship Hydra Owners Inc.
Drillship Paros Owners Inc.
Drillship Skopelos Owners Inc.
Drillship Skyros Owners Inc.
Eastern Med Consultants Inc.
Entities Holdings, Inc.
Global Marine Inc.
Global Offshore Drilling Limited
GlobalSantaFe B.V.
GlobalSantaFe Denmark Holdings ApS
GlobalSantaFe Drilling (N.A.) N.V.
GlobalSantaFe Drilling Company
GlobalSantaFe Drilling Mexico, S. de R.L. de C.V.
GlobalSantaFe Drilling Operations Inc.
GlobalSantaFe Drilling Trinidad LLC
GlobalSantaFe Drilling Venezuela, C.A.
GlobalSantaFe Financial Services (Luxembourg) S.a.r.l.
GlobalSantaFe Group Financing Limited Liability
Company
GlobalSantaFe Hungary Services Limited Liability
Company
GlobalSantaFe International Drilling Corporation
GlobalSantaFe International Drilling Inc.
GlobalSantaFe International Services Inc.
GlobalSantaFe Nederland B.V.
Delaware
Marshall Islands
Angola
Cayman Islands
Angola
Norway
Malaysia
Cyprus
California
Portugal
Ghana
Egypt
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Marshall Islands
Delaware
Delaware
Nigeria
Netherlands
Denmark
Netherlands Antilles
Delaware
Mexico
Cayman Islands
Delaware
Venezuela
Luxembourg
Hungary
Hungary
Bahamas
Cayman Islands
Cayman Islands
Netherlands
1
Entity
Jurisdiction
Exhibit 21
GlobalSantaFe Offshore Services Inc.
GlobalSantaFe Operations (Mexico) LLC
GlobalSantaFe Saudi Arabia Ltd.
GlobalSantaFe Services (BVI) Inc.
GlobalSantaFe Services Netherlands B.V.
GlobalSantaFe Servicios de Venezuela, C.A.
GlobalSantaFe South America LLC
GlobalSantaFe Tampico, S. de R.L. de C.V.
GlobalSantaFe U.S. Holdings Inc.
GSF Leasing Services GmbH
Indigo Drilling Limited
Inteliwell Limited
Kalambo Operations Inc.
Liquila DWA LLC
Liquila Ventures Ltd.
Ocean Rig 2 Inc.
Ocean Rig Canada Inc.
Ocean Rig Cubango Operations Inc.
Ocean Rig Investments Inc.
Ocean Rig Management Inc.
Ocean Rig Operations Inc.
Ocean Rig UDW Inc.
Ocean Rig UDW LLC
OCR Falklands Drilling Inc.
Offshore Ghana Transocean LTD
Olympia Rig Angola Holding, S.A.
Olympia Rig Angola, Limitada
OR Norge Operations Inc.
Orion Holdings (Cayman) Limited
Orion RigCo (Cayman) Limited
Platform Capital N.V.
Platform Financial N.V.
Primelead Limited
PT SantaFe Subsea Indonesia
PT Transocean Indonesia
R&B Falcon (A) Pty Ltd
R&B Falcon (Caledonia) Limited
R&B Falcon (M) Sdn. Bhd.
R&B Falcon (U.K.) Limited
R&B Falcon Exploration Co., LLC
Ranger Insurance Limited
RBF Rig Corporation, LLC
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Netherlands
Venezuela
Delaware
Mexico
Delaware
Switzerland
Nigeria
England & Wales
Marshall Islands
Hungary
Cayman Islands
Marshall Islands
Nova Scotia
Cayman Islands
Marshall Islands
Marshall Islands
Cayman Islands
Cayman Islands
Delaware
Marshall Islands
Ghana
Angola
Angola
Marshall Islands
Cayman Islands
Cayman Islands
Netherlands Antilles
Netherlands Antilles
Cyprus
Indonesia
Indonesia
Western Australia
England & Wales
Malaysia
England & Wales
Oklahoma
Cayman Islands
Delaware
2
Exhibit 21
Jurisdiction
Entity
Reading & Bates Coal Co., LLC
Safemal Drilling Sdn. Bhd.
Santa Fe Braun Inc.
Santa Fe Construction Company
Santa Fe Drilling Company of Venezuela, C.A.
Saudi Drilling Company Limited
Sedco Forex International, Inc.
Services Petroliers Transocean
Servicios Petroleros Santa Fe, S.A.
Ship Investment Ocean Holdings Inc.
Songa Offshore Delta Limited
Songa Offshore Drilling Limited
Songa Offshore Enabler Limited
Songa Offshore Encourage Limited
Songa Offshore Endurance Limited
Songa Offshore Equinox Limited
Songa Offshore Malaysia Sdn. Bhd.
Songa Offshore Management Limited
Songa Offshore Pte. Ltd.
Songa Offshore Rig 2 AS
Songa Offshore Rig 3 AS
Songa Offshore Saturn Limited
Songa Offshore SE
Songa Offshore T & P Cyprus Limited
Sub-Saharan Drilling Inc.
T. I. International Mexico, S. de R.L. de C.V.
TILAM Holdings Limited
Transocean Africa Drilling Limited
Transocean Aquila Limited
Transocean Asia Services Sdn Bhd
Transocean Asset Holdings 1 Limited
Transocean Asset Holdings 2 Limited
Transocean Asset Holdings 3 Limited
Transocean Atlas Limited
Transocean Barents ASA
Transocean Brasil Ltda.
Transocean Britannia Limited
Transocean Canada Drilling Services Ltd.
Transocean Conqueror Limited
Transocean Conqueror Opco LLC
Transocean Corporate Services Limited
Transocean Cyprus Capital Management Public Limited
Nevada
Malaysia
Delaware
Delaware
California
Saudi Arabia
Cayman Islands
France
Venezuela
Marshall Islands
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Malaysia
Cyprus
Singapore
Norway
Norway
Cyprus
Cyprus
Cyprus
Marshall Islands
Mexico
Cayman Islands
Cayman Islands
Cayman Islands
Malaysia
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Norway
Brazil
Cayman Islands
Nova Scotia
Cayman Islands
Delaware
Cayman Islands
Cyprus
3
Entity
Jurisdiction
Exhibit 21
Transocean Deepwater Drilling Services Limited
Transocean Deepwater Holdings Limited
Transocean Deepwater Inc.
Transocean Deepwater Mauritius
Transocean Deepwater Nautilus Limited
Transocean Deepwater Seafarer Services Limited
Transocean Discoverer 534 LLC
Transocean Drilling Enterprises S.a r.l.
Transocean Drilling Israel Ltd.
Transocean Drilling Namibia Inc.
Transocean Drilling Offshore S.a r.l.
Transocean Drilling Sdn. Bhd.
Transocean Drilling Services (India) Private Limited
Transocean Drilling U.K. Limited
Transocean DWA Limited
Transocean DWL Limited
Transocean Eastern Pte. Ltd.
Transocean Employee Support Fund
Transocean Enabler Limited
Transocean Enabler Rigco Limited
Transocean Encourage Limited
Transocean Encourage Rigco Limited
Transocean Endurance Limited
Transocean Endurance Rigco Limited
Transocean Entities Holdings GmbH
Transocean Equinox Limited
Transocean Equinox Rigco Limited
Transocean Finance Limited
Transocean Financing (Cayman) Limited
Transocean Financing GmbH
Transocean Guardian Limited
Transocean Holdings 1 Limited
Transocean Holdings 2 Limited
Transocean Holdings 3 Limited
Transocean Holdings LLC
Transocean Hungary Holdings LLC
Transocean Hungary Ventures LLC
Transocean Inc.
Transocean Innovation Labs Ltd.
Transocean International Holdings Limited
Transocean International Resources, Limited
Transocean Investimentos Ltda.
Cayman Islands
Cayman Islands
Delaware
Mauritius
Cayman Islands
Cayman Islands
Delaware
Luxembourg
Cayman Islands
Cayman Islands
Luxembourg
Malaysia
India
Scotland
Cayman Islands
Cayman Islands
Singapore
Texas
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Switzerland
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Switzerland
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Hungary
Hungary
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Brazil
4
Entity
Jurisdiction
Exhibit 21
Transocean Investments Holdings LLC
Transocean Investments S.a r.l.
Transocean Ltd.
Transocean Management Services GmbH
Transocean Minerals Holdings Limited
Transocean Nautilus Limited
Transocean North Sea Limited
Transocean Norway Operations AS
Transocean Offshore (North Sea) Ltd.
Transocean Offshore Deepwater Drilling Inc.
Transocean Offshore Deepwater Holdings Limited
Transocean Offshore Gulf of Guinea II Limited
Transocean Offshore Gulf of Guinea VII Limited
Transocean Offshore Gulf of Guinea XIII Limited
Transocean Offshore International Limited
Transocean Offshore International Ventures Limited
Transocean Offshore Limited
Transocean Offshore PR Limited
Transocean Offshore USA Inc.
Transocean Onshore Support Services Limited
Transocean Orion Limited
Transocean Phoenix 2 Limited
Transocean Phoenix 2 Opco LLC
Transocean Pontus Limited
Transocean Pontus Opco, Inc.
Transocean Poseidon Limited
Transocean Poseidon Opco, Inc.
Transocean Proteus Limited
Transocean Proteus Opco LLC
Transocean Quantum Holdings Limited
Transocean Quantum Management Limited
Transocean Quantum Rig Holdings Limited
Transocean Quantum Sentry Holdings Limited
Transocean Rig 140 Limited
Transocean Rig Ventures Limited
Transocean Sedco Forex Ventures Limited
Transocean Sentry Limited
Transocean Services (India) Private Limited
Transocean Services AS
Transocean Skyros Limited
Transocean Spitsbergen ASA
Transocean SPSF Holdings Limited
Delaware
Luxembourg
Switzerland
Switzerland
Cayman Islands
Cayman Islands
Bahamas
Norway
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Delaware
Scotland
Cayman Islands
Cayman Islands
Delaware
Cayman Islands
Delaware
Cayman Islands
Delaware
Cayman Islands
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
India
Norway
Cayman Islands
Norway
Cayman Islands
5
Entity
Jurisdiction
Exhibit 21
Transocean Sub Asset Holdings 1 Limited
Transocean Sub Asset Holdings 2 Limited
Transocean Sub Asset Holdings 3 Limited
Transocean Support Services Limited
Transocean Support Services Nigeria Limited
Transocean Support Services Private Limited
Transocean Technical Services Egypt LLC
Transocean Titan Financing Limited
Transocean U.S. Holdings LLC
Transocean UK Limited
Transocean Voyager 1 Limited
Transocean Voyager 2 Limited
Transocean Worldwide Inc.
Triton Aquila GmbH
Triton Asset Leasing GmbH
Triton Atlas GmbH
Triton Capital I GmbH
Triton Capital II GmbH
Triton Capital Mexico GmbH
Triton Conqueror GmbH
Triton Corcovado LLC
Triton Financing LLC
Triton Gemini GmbH
Triton Holdings Limited
Triton Hungary Asset Management LLC
Triton Hungary Investments 1 Limited Liability
Company
Triton Industries, Inc.
Triton KG2 GmbH
Triton Management Services LLC
Triton Mykonos LLC
Triton Nautilus Asset Leasing GmbH
Triton Nautilus Asset Management LLC
Triton Poseidon GmbH
Triton Quantum I GmbH
Triton Quantum II GmbH
Triton Quantum Rig Holdings GmbH
Triton Titan GmbH
Triton Voyager Asset Leasing GmbH
TRM Holdings Limited
TSSA - Servicos de Apoio, Lda.
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Nigeria
India
Egypt
Cayman Islands
Delaware
England & Wales
Cayman Islands
Cayman Islands
Cayman Islands
Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
Hungary
Hungary
Switzerland
British Virgin Islands
Hungary
Hungary
Cayman Islands
Switzerland
Hungary
Hungary
Switzerland
Hungary
Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
Cayman Islands
Angola
6
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements of Transocean Ltd. and subsidiaries:
(1) Registration Statement (Form S-4 No. 333-46374-99) as amended by Post-Effective Amendments on Form S-8 and Form S-3,
(2) Registration Statement (Form S-4 No. 333-54668-99) as amended by Post-Effective Amendments on Form S-8 and Form S-3,
(3) Registration Statement (Form S-8 No. 033-64776-99) as amended by Post-Effective Amendments on Form S-8,
(4) Registration Statement (Form S-8 No. 333-12475-99) as amended by Post-Effective Amendments on Form S-8,
(5) Registration Statement (Form S-8 No. 333-58211-99) as amended by Post-Effective Amendments on Form S-8,
(6) Registration Statement (Form S-8 No. 333-58203-99) as amended by Post-Effective Amendments on Form S-8,
(7) Registration Statement (Form S-8 No. 333-94543-99) as amended by Post-Effective Amendment on Form S-8,
(8) Registration Statement (Form S-8 No. 333-94569-99) as amended by Post-Effective Amendment on Form S-8,
(9) Registration Statement (Form S-8 No. 333-94551-99) as amended by Post-Effective Amendment on Form S-8,
(10) Registration Statement (Form S-8 No. 333-75532-99) as amended by Post-Effective Amendment on Form S-8,
(11) Registration Statement (Form S-8 No. 333-75540-99) as amended by Post-Effective Amendment on Form S-8,
(12) Registration Statement (Form S-8 No. 333-106026-99) as amended by Post-Effective Amendment on Form S-8,
(13) Registration Statement (Form S-8 No. 333-115456-99) as amended by Post-Effective Amendment on Form S-8,
(14) Registration Statement (Form S-8 No. 333-130282-99) as amended by Post-Effective Amendment on Form S-8,
(15) Registration Statement (Form S-8 No. 333-147669-99) as amended by Post-Effective Amendment on Form S-8,
(16) Registration Statement (Form S-8 No. 333-163320),
(17) Registration Statement (Form S-8 No. 333-204359),
(18) Registration Statement (Form S-4 No. 333-213146) as supplemented by Registration Statement (Form S-4 No. 333-214768),
(19) Registration Statement (Form S-4 No. 333-220791),
(20) Registration Statement (Form S-4 No. 333-222894),
(21) Registration Statement (Form S-3 No. 333-222895),
(22) Registration Statement (Form S-3 No. 333-222896),
(23) Registration Statement (Form S-4 No. 333-227487),
(24) Registration Statement (Form S-8 No. 333-227750),
(25) Registration Statement (Form S-8 No. 333-238091),
(26) Registration Statement (Form S-3 No. 333-248616),
(27) Registration Statement (Form S-3 No. 333-257093),
(28) Registration Statement (Form S-8 No. 333-257804),
(29) Registration Statement (Form S-8 No. 333-272734),
(30) Registration Statement (Form S-3 No. 333-274320), and
(31) Registration Statement (Form S-3 No. 333-274790),
of our reports dated February 20, 2024, with respect to the consolidated financial statements of Transocean Ltd. and subsidiaries and
the effectiveness of internal control over financial reporting of Transocean Ltd. and subsidiaries included in this Annual Report (Form
10-K) of Transocean Ltd. for the year ended December 31, 2023.
Exhibit 23
/s/ Ernst & Young LLP
Houston, Texas
February 20, 2024
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Chadwick C. Deaton
Name: Chadwick C. Deaton
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Domenic J. “Nick” Dell’Osso, Jr.
Name: Domenic J. “Nick” Dell’Osso, Jr.
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Edward R. Muller
Name: Edward R. Muller
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Frederico F. Curado
Name: Frederico F. Curado
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Frederik W. Mohn
Name: Frederik W. Mohn
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Glyn A. Barker
Name: Glyn A. Barker
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Mark L. Mey, Brady K. Long, Sandro Thoma,
David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and lawful attorney or
attorneys with power to act with or without the other, and with full power of substitution and
resubstitution, to execute in his name, place and stead, in his capacity as director, officer or both, as
the case may be, of the Company, the Form 10-K and any and all amendments thereto, including
any and all exhibits and other instruments and documents said attorney or attorneys shall deem
necessary, appropriate or advisable in connection therewith, and to file the same with the
Commission and to appear before the Commission in connection with any matter relating
thereto. Each of said attorneys shall have the full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary
or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned
might or could do in person, the undersigned hereby ratifying and approving the acts that said
attorneys and each of them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Jeremy D. Thigpen
Name: Jeremy D. Thigpen
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in her capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, her true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in her name, place and stead, in her capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Margareth Øvrum
Name: Margareth Øvrum
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Samuel J. Merksamer
Name: Samuel J. Merksamer
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in her capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, her true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in her name, place and stead, in her capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Vanessa C. L. Chang
Name: Vanessa C. L. Chang
Exhibit 24
TRANSOCEAN LTD.
Power of Attorney
WHEREAS, TRANSOCEAN LTD., a Swiss company (the “Company”), intends to file with the
Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, an
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 of the Company,
together with any and all exhibits, documents and other instruments and documents necessary,
advisable or appropriate in connection therewith, including any amendments thereto (the “Form
10-K”);
NOW, THEREFORE, the undersigned, in his capacity as a director or officer or both, as the case
may be, of the Company, does hereby appoint Jeremy D. Thigpen, Mark L. Mey, Brady K. Long,
Sandro Thoma, David Tonnel, and Daniel Ro-Trock, and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and with full power of
substitution and resubstitution, to execute in his name, place and stead, in his capacity as director,
officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments
thereto, including any and all exhibits and other instruments and documents said attorney or
attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the
same with the Commission and to appear before the Commission in connection with any matter
relating thereto. Each of said attorneys shall have the full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, the undersigned hereby ratifying and approving the acts
that said attorneys and each of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney to be effective as
of the 20th day of February 2024.
By:
/s/ Vincent J. Intrieri
Name: Vincent J. Intrieri
CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.1
I, Jeremy D. Thigpen, certify that:
1.
2.
3.
4.
I have reviewed this report on Form 10-K of Transocean Ltd.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent functions):
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Dated: February 20, 2024
/s/ Jeremy D. Thigpen
Jeremy D. Thigpen
Chief Executive Officer
CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.2
I, Mark L. Mey, certify that:
1.
2.
3.
4.
I have reviewed this report on Form 10-K of Transocean Ltd.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent functions):
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Dated: February 20, 2024
/s/ Mark L. Mey
Mark L. Mey
Executive Vice President and Chief Financial Officer
CERTIFICATION PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (a) AND (b)
OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)
Exhibit 32.1
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63
of Title 18, United States Code), I, Jeremy D. Thigpen, Chief Executive Officer of Transocean Ltd., a Swiss corporation
(the “Company”), hereby certify, to my knowledge, that:
(1)
(2)
the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Dated: February 20, 2024
/s/ Jeremy D. Thigpen
Jeremy D. Thigpen
Chief Executive Officer
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the
Report or as a separate disclosure document.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained
by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.
CERTIFICATION PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (a) AND (b)
OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)
Exhibit 32.2
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63
of Title 18, United States Code), I, Mark L. Mey, Executive Vice President and Chief Financial Officer of Transocean Ltd.,
a Swiss corporation (the “Company”), hereby certify, to my knowledge, that:
(1)
(2)
the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Dated: February 20, 2024
/s/ Mark L. Mey
Mark L. Mey
Executive Vice President and Chief Financial Officer
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the
Report or as a separate disclosure document.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained
by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.
Exhibit 97
TRANSOCEAN LTD.
EXECUTIVE OFFICER INCENTIVE-BASED COMPENSATION RECOUPMENT
POLICY
1. Purpose. The purpose of this Policy is to describe circumstances in which the
Company will recover Erroneously Awarded Compensation and the process for that
recovery. This Policy is intended to comply with (a) Section 954 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the
Exchange Act, and implemented by Rule 10D-1 thereunder adopted by the Commission
and (b) Section 303A.14 of the NYSE Listed Company Manual.
2. Administration. This Policy shall be administered by the Administrator. Any
determinations made by the Administrator shall be final and binding on all affected
individuals.
3. Definitions. For purposes of this Policy, the following capitalized terms shall have
the meanings set forth below.
a. “Administrator” means the Compensation Committee of the Board.
b. “Board” means the Board of Directors of the Company, and shall include the
Audit Committee of the Board of Directors acting on behalf of the Board of
Directors pursuant to its charter.
c. “Commission” means the Securities and Exchange Commission.
d. “Company” means Transocean Ltd., a Swiss corporation.
e. “Compensation Eligible for Recovery” means Incentive-based Compensation
received on or after the Effective Date by an individual:
i. after beginning service as an Executive Officer,
ii. who served as an Executive Officer at any time during the
performance
Incentive-based
the
Compensation (regardless of whether such individual is serving as
an Executive Officer at the time the Erroneously Awarded
Compensation is required to be repaid to the Company),
applicable
period
for
iii. while the Company had a class of securities listed on a national
securities exchange or a national securities association, and
iv. during the applicable Recovery Period.
f. “Effective Date” means October 2, 2023.
g. “Erroneously Awarded Compensation” means the Compensation Eligible for
Recovery less the amount of such compensation as it would have been
Active 104939170.2.DOCX
determined based on the restated amounts, computed without regard to any taxes
paid.
h. “Exchange Act” means the Securities Exchange Act of 1934, as amended.
i. “Executive Officer” means the Company’s president, principal financial
officer, principal accounting officer (or if there is no such accounting officer, the
controller), any vice-president of the Company in charge of a principal business
unit, division, or function (such as sales, administration or finance) and any other
officer who performs a significant policy-making function, and any other person
who performs similar policy-making functions for the Company. For purposes of
this Policy, Executive Officers will include, at a minimum, executive officers
identified pursuant to Item 401(b) of Regulation S-K in the Company’s annual
report on Form 10-K.
j. “Financial Reporting Measure” means measures that are determined and
presented in accordance with the accounting principles used in preparing the
Company’s financial statements, and any measures that are derived wholly or in
part from such measures. Stock price and total shareholder return are considered
Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting
Measure need not be presented within the financial statements or included in a
filing with the Commission.
k. “Incentive-based Compensation” means any compensation that is granted,
earned, or vested based wholly or in part upon the attainment of a Financial
Reporting Measure.
l. “NYSE” means the New York Stock Exchange LLC.
m. “Policy” means this Executive Officer Incentive-Based Compensation
Recoupment Policy, as the same may be amended or amended and restated from
time to time.
n. “Recovery Period” means the three completed fiscal years immediately
preceding the Restatement Date and any transition period (that results from a
change in the Company’s fiscal year) of less than nine months within or
immediately following those three completed fiscal years.
o. “Restatement” means an accounting restatement:
i. due to material noncompliance of the Company with any financial
reporting requirement under the securities laws, including any
required accounting restatement to correct an error in previously
issued financial statements that is material to the previously issued
financial statements, or
2
ii.
that would result in a material misstatement if the error were
corrected in the current period or left uncorrected in the current
period.
p. “Restatement Date” means the earlier of:
i.
ii.
the date the Board concludes, or reasonably should have concluded,
that the Company is required to prepare a Restatement, or
the date a court, regulator, or other legally authorized body directs
the Company to prepare a Restatement.
4. Recovery of Erroneously Awarded Compensation.
a. The Chief Financial Officer of the Company shall promptly report to the
Board any instance in which the Company is required to prepare a Restatement.
b. Upon learning of a required Restatement, the Board shall determine the
Restatement Date.
c. The Chief Financial Officer (or another appropriate officer or third party
designated by the Administrator) shall promptly calculate the Erroneously Awarded
Compensation for each affected individual, which calculation shall be subject to
approval by the Administrator. For purposes of calculating Erroneously Awarded
Compensation:
i.
Incentive-based Compensation shall be deemed received in the
Company’s fiscal period during which the Financial Reporting
Measure specified in the Incentive-based Compensation award is
attained, even if the payment or grant of the Incentive-based
Compensation occurs after the end of that period (but shall not
include grants or payments made prior to the Effective Date).
ii. For Incentive-based Compensation based on (or derived from) stock
price or total shareholder return, where the amount of Erroneously
Awarded Compensation is not subject to mathematical recalculation
directly from the information in a Restatement, it shall be based on a
reasonable estimate of the effect of the Restatement on the stock
price or total shareholder return upon which the Incentive-based
Compensation was
received. The Company shall maintain
documentation of the determination of that reasonable estimate and
provide such documentation to the NYSE.
d. Promptly following the Administrator’s approval of the Erroneously Awarded
Compensation, the Administrator shall notify in writing each individual who
received Erroneously Awarded Compensation and shall demand payment or return,
as applicable, of such Erroneously Award Compensation.
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e. The Company shall demand recovery and recover Erroneously Awarded
Compensation in compliance with this Policy except to the extent that the
Administrator determines that recovery would be impracticable, and one of the
following conditions applies:
i.
ii.
the direct expense paid to a third party to assist in enforcing this
Policy would exceed the amount to be recovered; provided,
however, that before concluding that it would be impracticable to
recover any amount of Erroneously Awarded Compensation based
on expense of enforcement, the Company must make a reasonable
attempt to recover such Erroneously Awarded Compensation,
document such reasonable attempt(s) to recover, and provide that
documentation to the NYSE;
recovery would violate home country law where that law was
adopted prior to November 28, 2022; provided, however, that before
concluding that it would be impracticable to recover any amount of
Erroneously Awarded Compensation based on violation of home
country law, the Company must obtain an opinion of home country
counsel, acceptable to the NYSE, that recovery would result in such
a violation, and must provide such opinion to the NYSE; or
iii.
recovery would likely cause an otherwise tax-qualified retirement
plan, under which benefits are broadly available to employees of the
Company, to fail to meet the requirements of Sections 401(a)(13) or
411(a) of the Internal Revenue Code of 1986, as amended, and
regulations thereunder.
f. Except as provided in Section 4(e)(i), Section 4(e)(ii) or Section 4(e)(iii), in
no event may the Company accept final repayment from the affected individual of
less than the full amount of the Erroneously Awarded Compensation received by
such individual.
g. The Administrator shall determine, in its sole discretion, the method of
recovering any Erroneously Awarded Compensation pursuant to this Policy, taking
into account all facts and circumstances (including the time value of money and the
cost to shareholders of delayed recovery), so long as such method complies with the
terms of Section 303A.14 of the NYSE Listed Company Manual. If the
Administrator determines that an appropriate method of recovery is one other than
the prompt repayment by the affected individual in cash or property, the Company
may offer to enter into a repayment agreement with the affected individual (in a
form and with terms reasonably acceptable to the Administrator). The Company
may offset, or cause to be offset, any amounts that the affected individual is
required to repay to the Company pursuant to this Policy against any amounts
otherwise owed by the Company or any of its subsidiaries to the affected individual.
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h. If the affected individual fails to repay to the Company when due the full
amount of the Erroneously Awarded Compensation received by such affected
individual, the Company shall take all actions reasonable and appropriate to recover
the full amount of the Erroneously Awarded Compensation from the affected
individual.
5. Disclosure. The Company shall file all disclosures with respect to this Policy in
accordance with the requirements of the securities laws, including the disclosure required
by the applicable Commission filings.
6. No Indemnification. The Company shall not indemnify any current or former
Executive Officer against the loss of Erroneously Awarded Compensation, and shall not
pay, or reimburse any current or former Executive Officers for, premiums for any insurance
policy to fund such Executive Officer’s potential recovery obligations.
7. Effective Date. This Policy shall be effective as of the Effective Date.
8. Amendment and Interpretation. The Board may amend this Policy from time to time
in its discretion and shall amend this Policy as it deems necessary or advisable to reflect the
regulations adopted by the Commission and to comply with any rules or standards adopted
by the NYSE. The Board may at any time in its sole discretion, supplement, amend or
terminate any provision of this Policy in any respect as the Board determines to be
necessary or appropriate. The Administrator shall interpret and construe this Policy and
make all determinations necessary or advisable for the administration of this Policy. It is
intended that this Policy be interpreted in a manner that is consistent with the requirements
of Section 10D of the Exchange Act and Rule 10D-1 thereunder and Section 303A.14 of
the NYSE Listed Company Manual and any other applicable rules adopted by the
Commission.
9. Other Recoupment Rights. The Board intends that this Policy will be applied to the
fullest extent of the law. Any employment agreement, equity award agreement or similar
agreement entered into on or after the Effective Date may, as a condition to the grant of any
benefit thereunder, require the party thereto to agree to abide by the terms of this Policy or
implement arrangements designed to facilitate the administration hereof. Although not a
prerequisite to enforcement of this Policy, each Executive Officer shall be required to sign
and return to the Company the Acknowledgment Form attached hereto as Exhibit A
pursuant to which such Executive Officer will agree to be bound by the terms and comply
with this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of,
any other remedies or rights of recovery that may be available to the Company pursuant to
the terms of any employment agreement, equity award agreement, or similar agreement
and any other legal remedies available to the Company.
10. Successors. This Policy shall be binding and enforceable against all current and
former Executive Officers and their beneficiaries, heirs, executors, administrators or other
legal representatives.
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EXHIBIT A
TRANSOCEAN LTD. EXECUTIVE OFFICER INCENTIVE-BASED
COMPENSATION RECOUPMENT POLICY
ACKNOWLEDGEMENT FORM
By signing below, the undersigned acknowledges and confirms the undersigned has
received and reviewed a copy of the Executive Officer Incentive-Based Compensation
Recoupment Policy (the “Policy”). Capitalized terms used but not otherwise defined in
this Acknowledgement Form shall have the meanings ascribed to such terms in the Policy.
By signing this Acknowledgement Form, the undersigned acknowledges and agrees that
the undersigned is and will continue to be subject to the Policy and that the Policy will
apply both during and after the undersigned’s employment with the Company. Further, by
signing below, the undersigned agrees to abide by the terms of the Policy, including,
without limitation, by returning any Erroneously Awarded Compensation (as defined in the
Policy) to the Company to the extent required by, and in a manner permitted by, the Policy.
For the avoidance of doubt, any recovery affected under the Policy shall not, in itself,
constitute grounds to terminate the undersigned’s employment for “Good Reason” (or any
term of similar meaning) under any employment or compensation arrangements,
agreements, plans or programs.
____________________________________
Signed
____________________________________
Name (Printed)
____________________________________
Date
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