Transocean Ltd.

Previous wording

◾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, or the various geographies in which we operate;

Current wording

◾the offshore drilling market, including the effects of variations in commodity prices, supply and demand, utilization rates, dayrates, customer drilling programs, customer strategy, stacking and reactivation of rigs, the impact of changes to regulations in jurisdictions in which we operate and changes in the global economy or market outlook for our industry, or the various geographies in which we operate;

Previous wording

◾those described under “Item 1A. Risk Factors” included in Part I of ourannual report on Form 10-K for the year ended December 31, 2024;

Current wording

◾those described under “Item 1A. Risk Factors” included in Part I of our annual report on Form 10-K for the year ended December 31, 2025;

Previous wording

◾the availability of borrowings under our Secured Credit Facility; and

Current wording

◾the availability of borrowings under our Secured Credit Facility, as well as the timing of any amendments thereto; and

Previous wording

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 October 23, 2025, we owned or had partial ownership interests in and operated 27 mobile offshore drilling units, consisting of 20 ultra-deepwater floaters and seven harsh environment floaters.

Current wording

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 April 28, 2026, we owned or had partial ownership interests in and operated 27 mobile offshore drilling units, consisting of 20 ultra-deepwater drillships and seven harsh environment semisubmersibles.

Previous wording

Our discussion and analysis of our financial condition, operating results and liquidity and capital resources are based upon, and should be read in conjunction with, our condensed consolidated financial statements and the notes thereto, included under “Item 1. Financial Statements” in this quarterly report on Form 10-Q and with “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in ourannual report on Form 10-K for the year ended December 31, 2024.

Current wording

Our discussion and analysis of our financial condition, operating results and liquidity and capital resources are based upon, and should be read in conjunction with, our condensed consolidated financial statements and the notes thereto, included under “Item 1. Financial Statements” in this quarterly report on Form 10-Q and with “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2025.

Previous wording

Disposal of assets—In the nine months ended September 30, 2025, we completed the sale of the ultra-deepwater floatersDevelopment Driller III, Discoverer Inspiration,Discoverer Luanda andGSF Development Driller I, together with related assets, for aggregate net cash proceeds of $34 million. See “—Liquidity and Capital Resources.”

Current wording

Disposal of assets—In the three months ended March 31, 2026, we completed the sale of the ultra-deepwater floatersDeepwater Championand* *Discoverer India, together with related assets, for aggregate net cash proceeds of $27 million, including $3 million received as a deposit in the year ended December 31, 2025. See “—Liquidity and Capital Resources.”

Previous wording

Debt redemption—In October 2025, we made an aggregate cash payment of $903 million, including related costs, to fully redeem $655 million aggregate principal amount of 8.00% senior notes due February 2027 and $248 million aggregate principal amount of 6.875% senior secured notes due February 2027. See “—Liquidity and Capital Resources.”

Current wording

Debt redemption—In March 2026, we made a cash payment of $365 million, including an early redemption premium, to retire the outstanding $358 million aggregate principal amount of the 8.375% senior secured notes due February 2028 (the “8.375% Senior Secured Notes”). See “—Liquidity and Capital Resources.”

Previous wording

Drilling market—Our industry outlook remains positive, informed by numerous long-term forecasts indicating that hydrocarbons will continue to be a critical source of energy for the foreseeable future. In response to persistent geopolitical instability, supply chain vulnerabilities, and the limitations of renewable energy sources, many governments and operators worldwide are revising their energy strategies. Rather than transitioning away from fossil fuels, many policy makers are working to increase energy security with more diversified and resilient supply portfolios. This shift reflects a distinct trend and a growing recognition of the need for accessible, reliable, cost-effective,

Current wording

Drilling market—Our industry outlook remains positive, supported by numerous long-term forecasts indicating that hydrocarbons will continue to be a critical source of energy for the foreseeable future. In response to supply chain constraints, limitations of renewable energy technologies, and persistent geopolitical instability, and most recently, the conflict in the Middle East, many governments and operators appear to be reassessing their energy strategies. Rather than accelerating a shift away from fossil fuels, many policy makers are prioritizing energy security, including from domestic sources, resulting in a diverse and resilient supply portfolio. This shift underscores the continued need for accessible, reliable, cost-effective, and transportable energy sources, with offshore oil and gas increasingly viewed as a strategic asset. We believe these dynamics will support sustained, long-term demand for oil and natural gas.

Previous wording

Maintaining current oil and natural gas production levels will require both the development of existing discovered resources and continued investment in exploration to uncover new reserves. We believe that oil and natural gas producers will invest a greater portion of their budgets in offshore drilling, and particularly in deepwater, where resource potential and production longevity are high, to achieve their production and reserve replacement targets.

Current wording

In the context of the natural depletion of existing fields, maintaining current oil and natural gas production levels will require both the development of existing resources and continued investment in exploration to identify new reserve opportunities. We believe that oil and natural gas producers will invest a greater portion of their budgets in offshore drilling, and particularly in deepwater, where resource potential, production longevity, and project economics are favorable, to achieve their production and reserve replacement targets.

Previous wording

While geopolitical events, economic policy shifts and short-term production uncertainties all have an effect on hydrocarbon prices, we expect the economics of deepwater offshore drilling projects to remain favorable and supportive of investment. Deepwater and harsh environment fields also continue to afford strong returns and lower carbon intensity relative to other hydrocarbon sources, making them increasingly attractive targets for capital allocation.

Current wording

Although hydrocarbon prices remain sensitive to geopolitical events, macroeconomic policy decisions, and short-term supply fluctuations, we expect the overall economics of deepwater projects to remain attractive. Deepwater and harsh-environment fields continue to generate competitive economic returns and are of generally lower carbon intensity compared to many other hydrocarbon sources, making them consistently compelling for capital deployment.

Previous wording

We anticipate that demand for harsh environment rigs will continue to remain strong through the end of the decade, driven by both activity in Norway – the largest market for such rigs – and emerging opportunities in other geographies where harsh environment-capable rigs are suited. Several high-specification semisubmersible rigs that previously departed the region to work in other harsh environment markets, such as Namibia, Black Sea and Australia, may ultimately return depending upon regional and project-specific requirements.

Current wording

We expect demand for harsh-environment rigs to remain strong through the end of the decade, driven primarily by activity in Norway – the largest market for such units – and by emerging opportunities in new geographies suited for harsh-environment capable rigs. Several high-specification semisubmersible rigs that previously mobilized to other harsh-environment regions, such as Namibia, the Black Sea, and Australia, may ultimately return to the Norwegian North Sea depending on project requirements and market conditions.

Previous wording

Contract backlog—We believe our industry-leading contract backlog distinguishes us 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 material 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:

Current wording

Contract backlog—We believe our contract backlog provides an indicator 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, including certain performance-based provisions for which achievement is probable, and excluding provisions for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be material to our contract drilling revenues. The contract backlog represents the maximum contract drilling revenues that can be earned considering the reported operating dayrate in effect during the firm contract period. The contract backlog for our fleet was as follows:

Previous wording

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.

Current wording

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, or 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.

Previous wording

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:

Current wording

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

Previous wording

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.

Current wording

Contract drilling revenues—Contract drilling revenues increased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the following: (a) approximately $80 million resulting from increased utilization, (b) approximately $65 million resulting from higher average daily revenues, (c) approximately $15 million resulting from increased reimbursement revenues, and (d) approximately $15 million resulting from increased revenue efficiency for the active fleet.

Previous wording

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.

Current wording

Depreciation and amortization expense decreased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to $34 million resulting from rigs sold or classified as held for sale.

Previous wording

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.

Current wording

Other income and expense—Interest expense increased in the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the following: (a) $189 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 and (b) $10 million increased interest resulting from debt issued in the earlier year, partially offset by (c) $34 million decreased interest resulting from debt repaid as scheduled or early retired.

Previous wording

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.

Current wording

Income tax expense or benefit—In the three months ended March 31, 2026 and 2025, our effective tax rate was (335.3)% percent and (95.8) percent, respectively, based on income or loss before income taxes. In the three months ended March 31, 2026 and 2025, the effect of various discrete period tax items was a net tax benefit of $113 million and a net tax expense of $14 million, respectively. In the three months ended March 31, 2026, such discrete items included changes to operating structures, various uncertain tax positions and valuation allowances. In the three months ended March 31, 2025, such discrete items included changes to various uncertain tax positions and valuation allowances. In the three months ended March 31, 2026 and 2025, our effective tax rate, excluding discrete items, was 192.0 percent and (62.3) percent, respectively, based on income or loss before income taxes.

Previous wording

In the nine months ended September 30, 2025, our primary source of cash was net cash provided by operating activities. Our primary uses of cash were debt repayments and capital expenditures.

Current wording

In the three months ended March 31, 2026, our primary source of cash was net cash provided by operating activities. Our primary uses of cash were debt repayments and capital expenditures.

Previous wording

Net cash provided by operating activities increased primarily due to (a) increased cash received from customers and (b) decreased cash paid to suppliers, partially offset by (c) increased cash paid for personnel-related costs.

Current wording

Net cash provided by operating activities increased primarily due to (a) increased cash received from customers and (b) reduced cash paid for interest.

Previous wording

Overview—We expect to use existing unrestricted cash balances, cash flows from operating activities, borrowings under our Secured Credit Facility, proceeds from the disposal of assets or proceeds from 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 debt-related deposits or reservations of unrestricted cash. At September 30, 2025, we had $833 million in unrestricted cash and cash equivalents and $417 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.

Current wording

Overview—We expect to use existing unrestricted cash balances, cash flows from operating activities, borrowings under our Secured Credit Facility, proceeds from the disposal of assets or proceeds from 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 installments and maturities or other debt-related deposits or reservations of unrestricted cash. At March 31, 2026, we had $330 million in unrestricted cash and cash equivalents and $285 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.

Previous wording

coverage ratio of 2.1 to 1.0 and a minimum liquidity requirement of $200 million, among others. 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 permits, subject to certain conditions, us to pay dividends and repurchase our shares. For more information about our Secured Credit Facility and our outstanding debt instruments, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt.

Current wording

We have a Secured Credit Facility that provides us with a borrowing capacity of $510 million through its maturity on June 22, 2028. Our Secured Credit Facility, which is secured by, among other things, a lien on eight of our ultra-deepwater drillships and two of our harsh environment semisubmersibles, contains certain 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 $200 million, among others. 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 permits, subject to certain conditions, us to pay dividends and repurchase our shares. For more information about our Secured Credit Facility and our outstanding debt instruments, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt.

Previous wording

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, and subject to market conditions and other factors, we may be required to provide collateral for any such future financing arrangements. Our secured indentures include collateral rig leverage ratios, and during periods, such as in the three months ended March 31, 2025, when certain of these rigs have experienced reduced levels of operating efficiency or utilization, we have deposited unrestricted cash into the applicable debt service reserve account to maintain compliance with the applicable covenant. We may in the future deposit a portion of our unrestricted cash or, in lieu thereof, take other actions, including seeking covenant relief or other consents of holders of certain of our secured debt, as applicable.

Current wording

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 and subject to market conditions and other factors, we may be required to provide collateral for any such future financing arrangements. Our secured indentures include collateral rig leverage ratios. During periods where collateral rigs have experienced reduced levels of operating efficiency or utilization, we have in the past deposited cash into the applicable debt service reserve account and taken other actions, including obtaining consents of holders of certain of our secured debt, as applicable, in order to satisfy the applicable collateral rig leverage ratio, and we may in the future take such actions from time to time, as necessary.

Previous wording

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, we have completed multiple debt and equity transactions, including tender offers, redemptions, 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, 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, equity or equity-linked securities in 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 debt and equity transactions, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt and Note 10—Equity.

Current wording

Debt and equity markets—From time to time, we seek to access the capital markets in connection with our ongoing efforts to prudently manage our capital structure and improve our liquidity position. For example, we have completed multiple debt and equity transactions, including tender offers, redemptions, exchanges and retirement of existing debt. Subject to then-existing market conditions and our expected liquidity needs, among other factors, we may also use existing unrestricted cash balances, cash flows from operating activities, or proceeds from asset sales to manage our capital structure, including by purchasing or exchanging any of our debt or equity securities in 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

Previous wording

From time to time, we may review the possible disposition of certain drilling assets. In the nine months ended September 30, 2025, we completed the disposal of four ultra-deepwater floaters, together with related assets, in sales for recycling. Additionally, as of September 30, 2025, we have classified as held for sale four ultra-deepwater floaters and one harsh environment floater, together with related assets, and we have committed to sell these drilling units for recycling. Considering market conditions, we may identify additional drilling units to be sold for scrap, recycling or alternative purposes. See Notes to Condensed Consolidated Financial Statements—Note 5—Long-Lived Assets.

Current wording

From time to time, we may review the possible disposition of certain drilling assets. In the three months ended March 31, 2026, we completed the disposal of two ultra-deepwater drillships, together with related assets, in sales for recycling. Additionally, as of March 31, 2026, we have classified as held for sale one harsh environment semisubmersible and related assets, and we have committed to sell this drilling unit for recycling. Considering market conditions, we may identify additional lower-specification drilling units to be sold for scrap, recycling or alternative purposes. See Notes to Condensed Consolidated Financial Statements—Note 5—Long-Lived Assets.

Previous wording

Contractual obligations and other commercial commitments—As of September 30, 2025, there have been no material changes to our contractual obligations or other commercial commitments as previously disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in ourannual report on Form 10-K for the year ended December 31, 2024. For additional information about our debt obligations and scheduled maturities, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt.

Current wording

Contractual obligations and other commercial commitments—As of March 31, 2026, there have been no material changes to our contractual obligations or other commercial commitments as previously disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2025. For additional information about our debt obligations and scheduled maturities, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt.

Previous wording

As of September 30, 2025, there have been no material changes to the critical accounting policies and estimates that we use as a basis for applying judgments, assumptions and estimates to prepare our condensed consolidated financial statements, as previously disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in ourannual report on Form 10-K for the year ended December 31, 2024.

Current wording

As of March 31, 2026, there have been no material changes to the critical accounting policies and estimates that we use as a basis for applying judgments, assumptions and estimates to prepare our condensed consolidated financial statements, as previously disclosed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our annual report on Form 10-K for the year ended December 31, 2025.

Previous wording

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 condensed consolidated statement of financial position or results of operations; however, it could have a material adverse effect on our condensed consolidated statement of cash flows. See Notes to Condensed Consolidated Financial Statements—Note 7—Income Taxes.

Current wording

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