Transocean (RIG) risk factors, FY2025 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 realized62% rewritten
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 rigs70% rewritten
7. 07We 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 business54% rewritten
8. 08Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations34% rewritten
9. 09$10 million for various third-party liabilities, and we self-insure up to $75 million of the $750 million excess liability coverage through our wholly owned captive insurance company. We also retain the risk for any liability that exceeds our excess liability coverageNew
10. 10Our 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
11. 11Failure to recruit and retain personnel could hurt our operations
12. 12Our labor costs and the operating restrictions under which we operate could increase as a result of collective bargaining negotiations and additional unionization efforts
13. 13Our shipyard projects and operations are subject to delays and cost overruns
14. 14◾ difficulties in obtaining necessary permits or approvals or in completing necessary importation procedures
15. 15As 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
16. 16Changing sentiment towards climate change, fossil fuels and related matters could adversely affect our business, cost of capital and the price of our stock and other securities34% rewritten
17. 17Public health threats could have significant adverse consequences for our business and operations53% rewritten
18. 18Increased transition to renewable or other alternative energy sources could adversely affect our business, results of operations and cash flowsNew
19. 19Our aspirations, goals, targets and initiatives related to sustainability, including emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks32% rewritten

Risks related to our indebtedness

1. 20We have a substantial amount of debt, including secured debt, and we may lose the ability to obtain future financing and suffer competitive disadvantages
2. 21Credit 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. 22Worldwide financial, economic and political conditions could restrict our ability to access capital markets, reduce our flexibility to react to changing economic and business conditions and reduce demand for our services

Risks related to our proposed combination with Valaris

1. 23Our proposed Business combination may be delayed or not occur at all for a variety of reasons, some of which are outside our controlNew
2. 24Efforts to complete the business combination could disrupt our relationships with third parties and employees, divert management’s attention, or result in legal proceedings, any of which could negatively impact our operating results and ongoing businessNew
3. 25The Agreement contains provisions that impose restrictions on Transocean’s business prior to the effective time of the business combinationNew
4. 26The failure to integrate the business and operations of transocean and valaris successfully in the expected time frame may adversely affect the combined business’s future results and may result in the combined business failing to realize the anticipated benefits of the business combinationNew

Risks related to laws, regulations and governmental compliance

1. 27Impact 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. 28Regulatory 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 services21% rewritten
3. 29Any restrictions on oil and natural gas operations on the U.S. Outer Continental Shelf could have an adverse impact on our business and demand for our services25% rewritten
4. 30The global nature of our operations involves additional risks69% rewritten
5. 31◾ public health threats, including pandemics, epidemics, severe influenza, coronaviruses and other highly communicable viruses or diseasesNew
6. 32We 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
7. 33We are subject to cybersecurity risks and threats as well as risks related to the use of artificial intelligence and the regulation of data privacy and security
8. 34Acts of terrorism, piracy and political and social unrest could affect the market for drilling services

Risks related to taxes

1. 35A 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. 36A 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. 37As a Swiss corporation, our flexibility may be limited with respect to certain aspects of capital management AND swift implementation of certain initiatives or strategies20% rewritten
2. 38We are subject to anti-takeover provisions44% rewritten
3. 39◾ limit the ability of our shareholders to amend or repeal some provisions of our articles of association; and