INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2023
| Item | | Page |
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| PART I |
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| Item 1. | Business | 2 |
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| Item 1A. | Risk Factors | 8 |
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| Item 1B. | Unresolved Staff Comments | 21 |
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| Item 1C. | Cybersecurity | 21 |
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| Item 2. | Properties | 22 |
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| Item 3. | Legal Proceedings | 22 |
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| Item 4. | Mine Safety Disclosures | 23 |
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| | | |
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| PART II |
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| Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 25 |
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| Item 6. | Reserved | 27 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 38 |
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| Item 8. | Financial Statements and Supplementary Data | 39 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 72 |
|---|
| Item 9A. | Controls and Procedures | 72 |
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| Item 9B. | Other Information | 72 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 73 |
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| | | |
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| PART III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 73 |
|---|
| Item 11. | Executive Compensation | 73 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | 73 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 73 |
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| Item 14. | Principal Accountant Fees and Services | 73 |
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| | | |
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| PART IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 73 |
|---|
| | | |
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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 | ◾ | estimates | ◾ | forecasts | ◾ | may | ◾ | plans | ◾ | projects | ◾ | should |
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| ◾ | believes | ◾ | could | ◾ | expects | ◾ | intends | ◾ | might | ◾ | predicts | ◾ | scheduled | | |
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Such statements are subject to numerous risks, uncertainties and assumptions, including, but not limited to:
| ◾ | 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.
