Transocean Ltd.

Sources and uses of cash

In the nine months ended September 30, 2026, our primary source of cash was net cash provided by operating activities and our primary uses of cash were debt repayments and capital expenditures.

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

Net cash used in investing activities increased primarily due to (a) deposits to short-term investments in the current-year period and (b) decreased proceeds from disposal of assets, primarily resulting from the completion of the sale of two ultra-deepwater floaters and one harsh environment semisubmersible in the current-year period compared to the sale of four ultra-deepwater floaters in the prior-year period, partially offset by (c) proceeds from disposal of investments in debt and equity of unconsolidated affiliates, primarily related to the disposal of an equity investment in Enhanced Well Technologies Group AS in the current-year period.

Net cash used in financing activities increased primarily due to (a) net proceeds from the issuance of Transocean Ltd. shares in a secondary offering in the earlier year and (b) increased cash used to repay debt, primarily resulting from the redemption of the outstanding $358 million aggregate principal amount of the 8.375% Senior Secured Notes in the current-year period.

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, 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 September 30, 2026, we had $499 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.

Under the Existing Credit Agreement, we have a Secured Credit Facility that provides us with a borrowing capacity of $510 million through its maturity in June 2028. Borrowings are guaranteed by Transocean Ltd. and certain subsidiaries and secured by, among other things, a lien on eight of our ultra-deepwater drillships and two of our harsh environment semisubmersibles. The Existing Credit Agreement also contains certain restrictive covenants, including a minimum guarantee coverage ratio of 3.0 to 1.0, a minimum collateral coverage ratio

• 21 -

of 2.1 to 1.0 and a minimum liquidity requirement of $200 million, among others. The Existing Credit Agreement 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.

On October 15, 2026, we entered into the Amended and Restated Credit Agreement, which, upon its effectiveness, will amend and restate the bank credit agreement that established our Secured Credit Facility to, among other things, (a) extend the scheduled maturity date to October 2031 from June 2028, (b) increase the total amount of revolving commitments thereunder to $750 million from $510 million and (c) modify certain covenants and other terms thereunder. Under the Amended and Restated Credit Agreement, borrowings will continue to be guaranteed by Transocean Ltd. and certain subsidiaries and secured by certain drilling rigs and related collateral. The effectiveness of the Amended and Restated Credit Agreement is subject to the closing of the Business Combination and the satisfaction or waiver of other conditions customary for a secured credit facility. We expect the Amended and Restated Credit Agreement to become effective upon the closing of the Business Combination or shortly thereafter; however, we can provide no assurance as to whether or when the Business Combination will close or whether the other conditions to effectiveness will be satisfied or waived. Until the Amended and Restated Credit Agreement becomes effective, our Existing Credit Agreement will remain in full force and effect on its current terms, as described above, and we expect to continue to have access to borrowings thereunder, subject to its terms. The lenders’ commitments under the Amended and Restated Credit Agreement will automatically terminate if the conditions to its effectiveness are not satisfied or waived by May 9, 2027, and, unless otherwise amended or refinanced, our Existing Credit Agreement would remain in effect in accordance with its terms, including its scheduled maturity in June 2028. For more information about our Secured Credit Facility, the Existing Credit Agreement, the Amended and Restated Credit Agreement and our outstanding debt instruments, see Notes to Condensed Consolidated Financial Statements—Note 7—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 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.

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 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 7—Debt and Note 12—Equity.

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 cause us to 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 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 Condensed Consolidated Financial Statements—Note 1—Business.

• 22 -

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, 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 market demand for required components and resources. 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.

From time to time, we may review the possible disposition of certain drilling assets. In the nine months ended September 30, 2026, we completed the disposal of two ultra-deepwater drillships and one harsh environment semisubmersible, together with related assets, in sales for recycling. Depending on market conditions and expectations, 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 6—Long-Lived Assets.

Contractual obligations and other commercial commitments—As of September 30, 2026, with exception to (a) our redemption and early retirement of the outstanding $358 million aggregate principal amount of the 8.375% Senior Secured Notes and (b) the termination of our U.S. qualified defined benefit plan, 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 7—Debt. For additional information about our benefit plan obligations, see Notes to Condensed Consolidated Financial Statements—Note 8—Benefit Plan.

Critical Accounting Policies and Estimates

As of September 30, 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.

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 Condensed Consolidated Financial Statements—Note 11—Contingencies.

Tax matters

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 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 9—Income Taxes.