Transocean Ltd.

Three months ended September 30, 2025 compared to the three months ended September 30, 2024

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.

“nm” means not meaningful.

Contract drilling revenues—Contract drilling revenues increased for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (a) approximately $30 million resulting from improved revenue efficiency for the fleet, (b) approximately $25 million resulting from higher average daily revenues, (c) approximately $15 million resulting from increased utilization and (d) approximately $10 million resulting from increased reimbursement revenues.

Costs and expenses—Operating and maintenance costs and expenses increased for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (a) approximately $10 million resulting from increased activity for the operations of our active fleet, (b) approximately $10 million resulting from increased reimbursable costs and (c) approximately $10 million resulting from the effect of inflation on personnel and other operating costs. These increases were partially offset by non-cash income of $10 million for a provision released in the current-year period resulting from a favorable legal outcome.

Depreciation and amortization expense decreased for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to $28 million resulting from rigs sold or classified as held for sale.

Impairment of assets—In the three months ended September 30, 2025, we recognized a loss on impairment of the ultra-deepwater floatersDeepwater Champion, Discoverer Americas, Discoverer Clear Leaderand* Discoverer Indiaand the harsh environment floaterHenry Goodrich* together with related assets, which we determined were impaired at the time we classified them as held for sale. In the three months ended September 30, 2024, we recognized a loss on impairment ofDevelopment Driller III andDiscoverer Inspiration together with related assets, which we determined were impaired at the time we classified them as held for sale.

Other income and expense—Interest expense increased in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to the following: (a) $88 million increased interest resulting from changes to the fair value of the bifurcated compound exchange feature embedded in the indenture governing the 4.625% senior guaranteed exchangeable bonds due September 2029 (the “4.625% Exchangeable Bonds”), partially offset by (b) $11 million decreased interest resulting from debt repaid as scheduled or early retired.

In the three months ended September 30, 2024, we recognized a net gain associated with the redemption of $91 million aggregate principal amount of the 11.50% Senior Guaranteed Notes due January 2027.

Other expense, net, increased in the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a loss of $75 million associated with the issuance of, pursuant to the Exchange Agreements, additional Transocean Ltd. shares to certain holders of the 4.00% Exchangeable Bonds in the current-year period.

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Income tax expense or benefit—In the three months ended September 30, 2025 and 2024, our effective tax rate was (1.4) percent and 6.0 percent, respectively, based on loss before income tax expense or benefit. In the three months ended September 30, 2025 and 2024, the effect of various discrete period tax items was a net tax benefit of $6 million and $50 million, respectively. In the three months ended September 30, 2025, such discrete items included changes to various uncertain tax positions, valuation allowances, rig ownership changes and rig-basis changes related to impairments. In the three months ended September 30, 2024, such discrete items included changes to deferred taxes resulting from asset impairments and changes to valuation allowances. In the three months ended September 30, 2025 and 2024, our effective tax rate, excluding discrete items, was 34.8 percent and 22.5 percent, respectively, based on income before income tax expense.

Due to our operating activities and organizational structure, our income tax expense or benefit does not change proportionally with our income or loss before income taxes. We may have subsidiaries with tax expense on taxable earnings that exceeds the tax benefits in other jurisdictions, or vice versa, which sometimes results in a negative effective tax rate or unusually large effective tax rates relative to consolidated income or loss before income tax expense or benefit. Our earnings are unevenly distributed across jurisdictions and may experience variability in timing among interim periods throughout the year and such variability may influence the allocation of income tax expense or benefit to the respective interim period. The annual effective tax rate used to allocate income tax expense or benefit to interim periods may also be influenced by the removal of loss jurisdictions from the calculations. 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.

Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024

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.

“nm” means not meaningful.

Contract drilling revenues—Contract drilling revenues increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) approximately $105 million resulting from higher average daily revenues, (b) approximately $85 million resulting from increased utilization, (c) approximately $65 million resulting from increased activity for the operations of the newbuild ultra deepwater floaterDeepwater Aquila, (d) approximately $65 million resulting from increased revenue efficiency for the fleet and (e) approximately $40 million resulting from increased reimbursement revenues. These increases were partially offset by approximately $10 million resulting from one less calendar day in the nine months ended September 30, 2025.

Costs and expenses—Operating and maintenance costs and expenses increased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) approximately $80 million resulting from increased activity for the operations of our active fleet, (b) approximately $40 million resulting from increased reimbursable costs (c) approximately $35 million resulting from the operations of our newbuildDeepwater Aquila, (d) approximately $30 million resulting from the effect of inflation on personnel and other operating costs and (e) a net non-cash loss of $24 million in the current-year period resulting from certain legal outcomes. These increases were partially offset by the following: (a) approximately $20 million resulting from rigs classified

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as held for sale or sold and (b) approximately $5 million resulting from costs associated with the early retirement of certain personnel in the nine months ended September 30, 2024.

Depreciation and amortization expense decreased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) $63 million resulting from rigs sold or classified as held for sale and (b) $7 million resulting from assets that were retired or had reached the end of their useful lives, partially offset by (c) $24 million resulting from one acquired harsh environment floater, one newbuild ultra-deepwater floater and other equipment placed into service.

General and administrative costs and expenses decreased for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) approximately $6 million resulting from decreased legal and professional fees, (b) approximately $4 million resulting from decreased personnel costs, primarily associated with the early retirement of certain personnel in the earlier year, and (c) approximately $4 million resulting from decreased technology costs.

Impairment or disposal of assets—In the nine months ended September 30, 2025, we recognized a loss on impairment ofDeepwater Champion,Discoverer Americas, Discoverer Clear Leader,* Discoverer India, Discoverer Luanda*,GSF Development Driller I* and Henry Goodrich** together with related assets, which we determined were impaired at the time we classified them as held for sale, andDevelopment Driller III* andDiscoverer Inspiration together with related assets, which we determined were further impaired. In the nine months ended September 30, 2024, we recognized a loss on impairment of the ultra-deepwater floatersDeepwater Nautilus,* Development Driller III* andDiscoverer Inspiration together with related assets, which we determined were impaired at the time we classified them as held for sale.

In the nine months ended September 30, 2025 and 2024, we recognized a gain and a loss, respectively, associated with disposal of assets unrelated to rig sales.

Other income and expense—Interest expense, net of amounts capitalized, increased in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) $102 million increased interest resulting from changes to the fair value of the bifurcated compound exchange feature embedded in the indenture governing the 4.625% Exchangeable Bonds, (b) $49 million increased interest resulting from debt issued in the earlier year and (c) $15 million increased interest resulting from interest costs capitalized for our newbuild construction program completed in the earlier year, partially offset by (d) $53 million decreased interest resulting from debt repaid as scheduled or early retired.

In the nine months ended September 30, 2024, we recognized a net gain on retirement of debt due to the following: (a) an aggregate net gain of $144 million resulting from retirement of $845 million aggregate principal amount of notes validly tendered in the tender offers completed in the period and (b) a net gain of $17 million associated with the redemption of $852 million aggregate principal amount of our debt securities.

Other expense, net, increased in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following: (a) a loss of $99 million associated with the issuance of, pursuant to the Exchange Agreements, additional Transocean Ltd. shares to certain holders of 4.00% Exchangeable Bonds in the current-year period, (b) a net increased loss of $22 million related to currency exchange rate changes and (c) decreased income of $15 million related to the non-service components of net periodic benefit income.

Income tax expense or benefit—In the nine months ended September 30, 2025 and 2024, our effective tax rate was 3.0 percent and 11.3 percent, respectively, based on loss before income tax benefit. In the nine months ended September 30, 2025 and 2024, the effect of various discrete period tax items was a net tax benefit of $195 million and $178 million, respectively. In the nine months ended September 30, 2025, such discrete items included changes to various uncertain tax positions, valuation allowances, rig ownership changes and rig-basis changes related to impairments. In the nine months ended September 30, 2024, such discrete items included changes to deferred taxes resulting from operational and structural changes related to rig movements and asset impairments, changes to valuation allowances and settlements of various uncertain tax positions. In the nine months ended September 30, 2025 and 2024, our effective tax rate, excluding discrete items, was 86.6 percent and 364.0 percent, respectively, based on income or loss before income tax expense.

Due to our operating activities and organizational structure, our income tax expense or benefit does not change proportionally with our income or loss before income taxes. We may have subsidiaries with tax expense on taxable earnings that exceeds the tax benefits in other jurisdictions, or vice versa, which sometimes results in a negative effective tax rate or unusually large effective tax rates relative to consolidated income or loss before income tax expense or benefit. Our earnings are unevenly distributed across jurisdictions and may experience variability in timing among interim periods throughout the year and such variability may influence the allocation of income tax expense or benefit to the respective interim period. The annual effective tax rate used to allocate income tax expense or benefit to interim periods may also be influenced by the removal of loss jurisdictions from the calculations. 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.

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