Transocean (RIG) risk factors, FY2024 10-K

Risks related to our business

1. 01Our business depends on the level of activity in the offshore oil and gas industry, which is significantly affected by volatile oil and gas prices and other factors
2. 02◾ the worldwide security and political environment, including uncertainty or instability resulting from an escalation or outbreak of armed hostilities, civil unrest, acts of terrorism, public health threats or other crises
3. 03The offshore drilling industry is highly competitive and cyclical, with intense price competition
4. 04Our current backlog of contract drilling revenues may not be fully realized
5. 05Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues
6. 06We may not be able to renew or obtain new drilling contracts for rigs whose contracts are expiring or obtain drilling contracts for our stacked and idle rigs
7. 07Changing sentiment towards climate change, fossil fuels and other esg matters could adversely affect our business, cost of capital and the price of our stock and other securities
8. 08Public health threats have had, and may continue to have, significant adverse consequences for general economic, financial and business conditions, as well as for our business and operations
9. 09We rely heavily on a relatively small number of customers and the loss of a significant customer or a dispute that leads to the loss of a customer could have an adverse effect on our business
10. 10Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations
11. 11Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts
12. 12Failure to recruit and retain personnel could hurt our operations
13. 13Our labor costs and the operating restrictions under which we operate could increase as a result of collective bargaining negotiations and additional unionization efforts
14. 14Our shipyard projects and operations are subject to delays and cost overruns
15. 15◾ difficulties in obtaining necessary permits or approvals or in completing necessary importation procedures
16. 16As part of our business strategies, We may pursue opportunities to strengthen, streamline or broaden our business that include acquisitions or dispositions of businesses or drilling rigs, mergers or joint ventures or other investments, and such transactions would present various risks and uncertainties
17. 17Failure to effectively and timely address the transition to renewable or other alternative energy sources, or to respond to other climate related business trends, could adversely affect our business, results of operations and cash flows
18. 18Our aspirations, goals, commitment targets and initiatives related to sustainability, including emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks

Risks related to our indebtedness

1. 19We have a substantial amount of debt, including secured debt, and we may lose the ability to obtain future financing and suffer competitive disadvantages
2. 20Credit rating agencies have rated our debt below investment grade, which could limit our access to capital and have an adverse effect on our business and financial condition
3. 21Worldwide financial, economic and political conditions could restrict our ability to access the capital markets, reduce our flexibility to react to changing economic and business conditions and reduce demand for our services

Risks related to laws, regulations and governmental compliance

1. 22Impact of increasingly stringent environmental and safety laws and our compliance with or breach of such laws can be costly, expose us to liability and could limit our operations
2. 23Regulatory and various other risks, including litigation, associated with greenhouse gas emissions, other emissions and climate change could have an adverse impact on our business and demand for our services
3. 24Any restrictions on oil and natural gas operations on the U.S. Outer Continental Shelf (“OCS”) could have an adverse impact on our business and demand for our services
4. 25The global nature of our operations involves additional risks
5. 26◾ currency exchange fluctuations and currency exchange restrictions, including exchange or similar controls that may limit our ability to convert local currency into U.S. dollars and transfer funds out of a local jurisdiction
6. 27interpretation or otherwise able to recover any amounts pursuant to the contractual provisions of the applicable drilling contract, then the amount of the applicable tariff, which would depend on many factors, could reasonably be expected to increase our operating costs
7. 28We are subject to investigations and litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us
8. 29We are subject to cybersecurity risks and threats as well as increasing regulation of data privacy and security
9. 30Acts of terrorism, piracy and political and social unrest could affect the markets for drilling services

Risks related to taxes

1. 31A change in tax laws, treaties or regulations, or their interpretation, of any country in which we have operations, are incorporated or are resident could result in a higher effective tax rate on our consolidated earnings and increase our cash tax payments
2. 32A loss of a major tax dispute or a successful tax challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries could result in a higher effective tax rate on our consolidated earnings and increase our cash tax payments

Risks related to our jurisdiction of organization and governing documents

1. 33As a Swiss corporation, our flexibility may be limited with respect to certain aspects of capital management AND swift implementation of certain initiatives or strategies
2. 34We are subject to anti-takeover provisions
3. 35◾ limit the ability of our shareholders to amend or repeal some provisions of our articles of association; and