Transocean Ltd.

Previous wording

◾debt, 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, potential or alleged defaults and discussions with creditors related thereto;

Current wording

◾debt, 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;

Previous 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.”

Current wording

Disposal of assets—In the six months ended June 30, 2026, we completed the sale of the ultra-deepwater drillshipsDeepwater 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. In July 2026, we completed the sale of the harsh environment semisubmersibleHenry Goodrich, together with related assets, for net cash proceeds of $3 million. See “—Liquidity and Capital Resources.”

Previous wording

Exercised warrants—In April 2026, we issued 9.7 million Transocean Ltd. shares as net settlement of 22.2 million warrants exercised by holders to purchase Transocean Ltd. shares. See “—Liquidity and Capital Resources.”

Current wording

Exercised warrants—In April 2026, we issued 9.7 million Transocean Ltd. shares as net settlement of 22.2 million warrants exercised by holders to purchase our shares. See “—Liquidity and Capital Resources.”

Previous 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.

Current wording

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

Previous 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.

Current wording

Similarly, 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 these units – and by opportunities emerging 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, have or are expected to return to the Norwegian North Sea as project requirements and market conditions continue to improve.

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

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 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:

Previous 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.

Current wording

Depreciation and amortization expense decreased for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to a $30 million reduction resulting from rigs sold or classified as held for sale.

Previous 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.

Current wording

Other income and expense—Interest expense decreased in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to the following: (a) $105 million decreased 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”) and (b) $36 million decreased interest resulting from debt repaid as scheduled or early retired, partially offset by (c) $10 million increased interest resulting from debt issued in the earlier year.

Previous 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.

Current wording

Contract drilling revenues—Contract drilling revenues increased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to the following: (a) approximately $80 million resulting from higher average daily revenues, (b) approximately $30 million resulting from increased utilization, (c) approximately $25 million resulting from increased reimbursement revenues, and (d) approximately $20 million resulting from improved revenue efficiency for the active fleet.

Previous wording

Costs and expenses—Operating and maintenance costs and expenses decreased for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the following: (a) a non-cash loss of $34 million in the earlier year resulting from an unfavorable legal outcome, (b) approximately $5 million resulting from rigs sold, and (c) approximately $5 million resulting from lower in-service costs related to additional services. These decreases were partially offset by the following increases: (a) approximately $15 million resulting from reimbursable costs, (b) approximately $10 million resulting from increased personnel costs, (c) approximately $5 million resulting from increased utilization, and (d) approximately $5 million resulting from severance costs.

Current wording

Costs and expenses—Operating and maintenance costs and expenses decreased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to the following: (a) a non-cash loss of $34 million in the earlier year resulting from an unfavorable legal outcome, (b) approximately $10 million resulting from rigs sold, and (c) approximately $10 million resulting from lower asset maintenance costs. These decreases were partially offset by the following increases: (a) approximately $25 million resulting from reimbursable costs and (b) approximately $25 million resulting from personnel costs.

Previous wording

In the three months ended March 31, 2026, we recognized a loss on retirement of debt associated with the retirement of the 8.375% Senior Secured Notes.

Current wording

In the six months ended June 30, 2026, we recognized a loss on retirement of the 8.375% Senior Secured Notes.

Previous 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.

Current wording

Income tax expense or benefit—In the six months ended June 30, 2026 and 2025, our effective tax rate was (19.8) percent and 10.3 percent, respectively, based on income or loss before income taxes. In the six months ended June 30, 2026 and 2025, the effect of various discrete period tax items was a net tax benefit of $137 million and $189 million, respectively. In the six months ended June 30, 2026, such discrete items included changes to operating structures and valuation allowances. In the six months ended June 30, 2025, such discrete items included changes to various uncertain tax positions, valuation allowances and rig basis changes related to impairment. In the six months ended June 30, 2026 and 2025, our effective tax rate, excluding discrete items, was 42.8 percent and 268.9 percent, respectively, based on income or loss before income taxes.

Previous 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.

Current wording

In the six months ended June 30, 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 investing activities increased primarily due to (a) decreased capital expenditures, (b) increased proceeds from disposal of assets, primarily resulting from the completion of the sale of two ultra-deepwater floaters in the current-year period, and (c) proceeds from disposal of an investment in a note receivable from an unconsolidated affiliate.

Current wording

Net cash used in investing activities decreased primarily due to (a) decreased capital expenditures, (b) increased proceeds from disposal of assets, primarily resulting from the completion of the sale of two ultra-deepwater floaters in the current-year period, and (c) proceeds from disposal of an investment in a note receivable from an unconsolidated affiliate in the current-year period relative to proceeds from disposal of an investment in equity of an unconsolidated affiliate in the earlier year.

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 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.

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 June 30, 2026, we had $509 million in unrestricted cash and cash equivalents and $286 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

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 has involved, and in the future 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.

Current wording

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 has involved, and in the future 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. For information about our Agreement to acquire Valaris, see Notes to Consolidated Financial Statements—Note 1—Business.

Previous 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.

Current wording

From time to time, we may review the possible disposition of certain drilling assets. In the six months ended June 30, 2026, we completed the disposal of two ultra-deepwater drillships, together with related assets, in sales for recycling. In July 2026, we completed the sale of one harsh environment semisubmersible and related assets in a sale 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 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.

Current wording

Contractual obligations and other commercial commitments—As of June 30, 2026, with exception to our redemption and early retirement of the outstanding $358 million aggregate principal amount of the 8.375% Senior Secured Notes, 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, including scheduled maturities and early retirement, see Notes to Condensed Consolidated Financial Statements—Note 6—Debt.

Previous 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

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.

Previous wording

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

Current wording

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