Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in auditing and trading, having navigated significant market events such as the dotcom bubble and the subprime crisis [2] - The research provided aims to maintain high quality despite language barriers [2]

Core Viewpoint - Transocean Ltd. is a leading offshore drilling contractor with a strong position in the deepwater and ultra-deepwater drilling markets, supported by a sophisticated fleet and significant backlog, but faces challenges such as high debt and ongoing losses [1][4][14]. Group 1: Company Overview - Transocean operates one of the industry's most advanced fleets, including dynamically positioned drillships and semi-submersibles, serving key clients in the oil and gas sector [1]. - The company has a legacy of nearly a century and is headquartered in Steinhausen, Switzerland [1]. - Transocean plays a crucial role in unlocking vital oil and gas reserves, contributing to energy security and economic growth for fossil fuel-dependent nations [2]. Group 2: Stock Performance Factors - The stock has experienced volatility, leading investors to question the timing for investment [3]. - RIG operates a technically advanced ultra-deepwater fleet with nearly full utilization through mid-2026, indicating strong demand and competitive advantage [4]. - The company has a backlog of $8.3 billion, providing revenue visibility through long-term contracts, with high-specification rigs securing contracts above $500,000 per day [5]. - Technological innovations, such as automation and robotics, enhance operational efficiency and margins [5]. - A positive market outlook for deepwater capital expenditures is expected, with projections indicating more than double the spending in 2026 and 2027 [6]. Group 3: Financial Challenges - RIG has over $6 billion in debt, leading to high-interest expenses projected at $550-$555 million for 2025, impacting cash flow [7]. - The company reported a net loss of $512 million for 2024, including a $755 million asset impairment charge, raising concerns about long-term financial health [8]. - Operating and maintenance expenses reached $2.3 billion in 2024, with ongoing high costs expected due to the specialized fleet [9]. - RIG's share price has dropped 8.8% in the last three months, underperforming compared to the overall oil and gas sector, which increased by 4.4% [10]. Group 4: Conclusion - Transocean benefits from a strong competitive position, advanced fleet, and high utilization, ensuring demand through mid-2026 [14]. - The company's backlog and technological innovations enhance revenue visibility and operational efficiency [14]. - However, significant challenges such as heavy debt, ongoing losses, and recent underperformance compared to peers may pressure growth and stock performance [15].

Core Viewpoint - Transocean's shares have declined approximately 9.9% since the last earnings report, underperforming the S&P 500, raising questions about the potential for continued negative trends or a breakout before the next earnings release [1] Estimates Movement - Estimates for Transocean have trended downward over the past month, with a significant consensus estimate shift of -162.5% [2] VGM Scores - Transocean currently holds an average Growth Score of C, a Momentum Score of F, and a Value Score of B, resulting in an aggregate VGM Score of C, indicating a mixed performance across different investment strategies [3] Outlook - The overall trend of downward revisions suggests a negative outlook for Transocean, which currently holds a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4]

Core Insights - Transocean Ltd. has released its fleet status report and backlog additions, but the market reaction has been negative, with the stock price hovering near 52-week lows [1] Fleet Status Report - The fleet status report indicates the current operational status and backlog of Transocean's drilling rigs, which is crucial for assessing future revenue potential [1] Market Reaction - Despite the report, the market has not responded positively, suggesting investor skepticism regarding the company's future performance and operational efficiency [1]

Core Viewpoint - Rosen Law Firm is reminding investors who purchased Transocean Ltd. securities between May 1, 2023, and September 2, 2024, of the lead plaintiff deadline on February 24, 2025, for a class action lawsuit [1][2]. Group 1: Class Action Details - Investors who bought Transocean securities during the specified period may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [1]. - A class action lawsuit has already been filed, and interested parties must move the Court to serve as lead plaintiff by February 24, 2025 [2]. - The lawsuit alleges that Transocean made false and misleading statements regarding its asset valuations and business prospects, leading to investor damages when the truth was revealed [4]. Group 2: Rosen Law Firm's Credentials - Rosen Law Firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions, highlighting its own achievements in this area [3]. - The firm has secured significant settlements for investors, including over $438 million in 2019 alone, and has been consistently ranked among the top firms for securities class action settlements [3].

Transocean (NYSE: RIG ) has a high spec fleet and long contract backlog to help it weather the cyclical downturn in the offshore drilling market. As the economic cycle in the oil industry continues to shift, RIG's fleet is wellI am a Licensed Professional Engineer who works in the Nuclear Power industry. I use my professional working knowledge of the power/energy industries to aid in evaluating potential equities worthy of long-term investment. I invest in income producing equities and rental real estate pr ...

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of Transocean Ltd. regarding a class action lawsuit due to alleged misleading statements and overvaluation of assets during a specified class period [1][2]. Group 1: Allegations - The complaint alleges that during the class period from May 1, 2023, to September 2, 2024, Transocean Ltd. made materially false and/or misleading statements [1]. - Specific allegations include that the oil rigs Discoverer Inspiration and Development Driller III were considered non-strategic assets and that the company's recorded asset valuations were overstated [1]. - It is claimed that if sold, the company would incur nearly double the vessels' sale price in impairment, leading to misleading positive statements about the company's business and prospects [1]. Group 2: Class Action Details - Shareholders who purchased shares of RIG during the class period are encouraged to register for the class action, with a deadline of February 24, 2025, to seek lead plaintiff status [2]. - Once registered, shareholders will be enrolled in a portfolio monitoring software to receive updates throughout the case lifecycle [2]. - Participation in the case incurs no cost or obligation for the shareholders [2]. Group 3: Law Firm Background - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting the rights of investors affected by deceit and illegal business practices [3]. - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions [3].

Core Insights - Transocean Ltd. reported a fourth-quarter 2024 adjusted net loss of 9 cents per share, missing the Zacks Consensus Estimate of a profit of 1 cent, attributed to higher costs and expenses year-over-year [1] - Total adjusted revenues were $952 million, falling short of the Zacks Consensus Estimate of $959 million, but representing a 27.3% increase from the prior-year figure of $748 million [2][4] Revenue Performance - Ultra-deepwater floaters contributed 71% to net contract drilling revenues, while harsh environment floaters accounted for 29% [3] - Revenues from ultra-deepwater floaters totaled $675 million, up from $536 million year-over-year, while harsh environment floaters generated $277 million, compared to $205 million a year ago [4] - Revenue efficiency was 93.5%, down from 94.5% in the previous quarter and 97% in the year-ago quarter [4] Day Rates and Utilization - Average day rates increased to $434,700 from $407,800 in the year-ago quarter, but missed the model prediction of $461,400 [5] - Average revenues per day from ultra-deepwater floaters decreased to $428,200 from $432,100 year-over-year, missing the model estimation of $453,400 [5] - Fleet utilization rate was 66.8%, up from 51.6% in the prior-year period [6] Costs and Financials - Total costs and expenses were $815 million, a 1.5% increase from $803 million in the year-ago quarter [7] - Operating and maintenance expenses rose to $579 million from $569 million, while general and administrative expenses increased to $56 million from $50 million [7] - Capital expenditures for the fourth quarter were $29 million, with cash used in operating activities amounting to $206 million [8] Guidance - For the first quarter, O&M expenses are expected to be between $610 million and $630 million, with G&A expenses ranging from $50 million to $55 million [10] - Full-year O&M expenses are anticipated to be between $2.3 billion and $2.4 billion, consistent with prior guidance [11]

Core Viewpoint - The Transocean class action lawsuit alleges that the company and certain executives made misleading statements regarding asset valuations and the status of specific drilling rigs, leading to significant financial losses for investors during the specified class period [1][3][4]. Group 1: Class Action Lawsuit Details - The lawsuit is titled Gábor v. Transocean Ltd., and it involves purchasers of Transocean securities from October 31, 2023, to September 2, 2024 [1]. - Investors have until February 24, 2025, to seek appointment as lead plaintiff in the class action lawsuit [1][5]. - The lawsuit claims that Transocean misrepresented the status of its Discoverer Inspiration and Development Driller III rigs, labeling them as "idle" while failing to disclose their non-strategic asset status [2][3]. Group 2: Allegations and Financial Impact - The complaint alleges that Transocean's asset valuations were overstated, and if the vessels were sold, the company would incur nearly double the sale price in impairment charges [3]. - On September 3, 2024, Transocean announced the sale of the Development Driller III and Discoverer Inspiration for $342 million, which would result in a non-cash charge of up to $645 million for asset impairment [4]. - Following this announcement, Transocean's stock price fell nearly 9%, reflecting the market's reaction to the impairment news [4]. Group 3: Legal Representation and Firm Background - Robbins Geller Rudman & Dowd LLP is representing investors in this class action lawsuit and has a strong track record in securities fraud cases, having recovered $6.6 billion for investors in related cases [6]. - The firm has been ranked 1 in securing monetary relief for investors in six out of the last ten years [6].

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Transocean is a leading international provider of offshore contract drilling services, operating a fleet of 34 mobile units for major energy companies, with a focus on ultra-deepwater and harsh environment operations [Company and Operations Overview](index=6&type=section&id=OVERVIEW) Transocean provides offshore contract drilling services for oil and gas wells globally, operating 34 mobile offshore drilling units with a focus on ultra-deepwater and harsh environments - Transocean is a leading international provider of offshore contract drilling services for oil and gas wells[13](index=13&type=chunk) - As of February 11, 2025, the company owned or had partial ownership interests in and operated **34 mobile offshore drilling units**, consisting of **26 ultra-deepwater floaters** and **eight harsh environment floaters**[13](index=13&type=chunk) - The company's primary business is contracting its mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells, with a focus on ultra-deepwater and harsh environment services[14](index=14&type=chunk) [Drilling Fleet Details](index=6&type=section&id=DRILLING%20FLEET) Details the composition and capabilities of Transocean's 34-unit drilling fleet, including dual-activity technology and uncontracted rigs Fleet Composition as of February 12, 2025 | Rig Category | Type | Count | | :--- | :--- | :--- | | **Ultra-deepwater floaters** | Drillship | 25 | | | Semisubmersible | 1 | | **Harsh environment floaters** | Semisubmersible | 8 | - The fleet includes drillships, which are highly mobile and suited for calmer seas, and semisubmersibles, known for stability in rough conditions[17](index=17&type=chunk)[18](index=18&type=chunk) - **23 ultra-deepwater drillships** are equipped with patented dual-activity technology, allowing for simultaneous drilling tasks to improve efficiency[17](index=17&type=chunk) - As of February 12, 2025, the company has **10 uncontracted rigs**, with seven of them having been out of service for over five years[71](index=71&type=chunk) [Drilling Contracts and Backlog](index=9&type=section&id=DRILLING%20CONTRACTS) Provides an overview of Transocean's drilling contracts and backlog, noting recent trends and general contract terms Contract Backlog Trend | Date | Contract Backlog (in billions) | | :--- | :--- | | Dec 31, 2024 | $8.74 | | Dec 31, 2023 | $9.25 | | Dec 31, 2022 | $8.34 | - Contract backlog decreased by **6% from 2023 to 2024** but increased by **5% compared to 2022**[28](index=28&type=chunk) - Drilling contracts are generally on a dayrate basis. They may be cancelable for customer convenience with an early termination fee, which may not fully compensate for the loss of the contract[28](index=28&type=chunk) [Major Customers](index=12&type=section&id=CUSTOMERS) Identifies Transocean's major customers and their revenue contributions, highlighting concentration risks Significant Customer Revenue Contribution (FY 2024) | Customer | % of Consolidated Operating Revenues | | :--- | :--- | | Shell plc | 27% | | Petróleo Brasileiro S.A. (Petrobras) | 21% | | Equinor ASA | 13% | - As of February 12, 2025, Petrobras and Shell represented **24%** and **17%** of the total contract backlog, respectively[35](index=35&type=chunk) [Human Capital Resources](index=12&type=section&id=HUMAN%20CAPITAL%20RESOURCES) Outlines Transocean's global workforce, collective bargaining agreements, and safety performance metrics - As of December 31, 2024, Transocean had a global workforce of approximately **5,800 individuals**, including about **330 contractors**, across **22 countries**[36](index=36&type=chunk) - Approximately **43% of the workforce**, primarily in Brazil and Norway, is represented by collective bargaining agreements[38](index=38&type=chunk) Safety Performance (FY 2024) | Metric | Rate | | :--- | :--- | | Total Recordable Incident Rate (TRIR) | 0.15 | | Lost Time Incident Rate (LTIR) | 0.00 | [Technological Innovation](index=16&type=section&id=TECHNOLOGICAL%20INNOVATION) Highlights Transocean's history of technological innovation, including dual-activity systems, advanced BOPs, and AI-driven automation - The company has a history of technological firsts, including the first dynamically positioned drillship and eighth-generation drillships[54](index=54&type=chunk) - Key technologies deployed include patented dual-activity systems on **24 floaters**, 20,000 psi blowout preventers on **two drillships**, and the HaloGuard℠ automated safety system on **eight units**[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - The company utilizes AI and data-driven approaches, such as the Inteliwell™ drilling automation platform and smart equipment analytics, to optimize processes and performance[57](index=57&type=chunk)[59](index=59&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) Transocean faces significant risks from industry cyclicality, volatile commodity prices, substantial debt, operational hazards, customer concentration, and evolving global regulations [Business and Operational Risks](index=20&type=section&id=RISKS%20RELATED%20TO%20OUR%20BUSINESS) Discusses risks inherent to the offshore drilling business, including commodity price volatility, industry competition, customer concentration, and operational hazards - Business is dependent on the offshore oil and gas industry, which is significantly affected by volatile commodity prices. Prolonged low prices can reduce demand for drilling services[65](index=65&type=chunk)[66](index=66&type=chunk) - The offshore drilling industry is highly competitive and cyclical. An oversupply of rigs, particularly during downturns, intensifies price competition and can lead to lower dayrates and utilization[67](index=67&type=chunk)[69](index=69&type=chunk) - The company relies heavily on a few major customers. In 2024, Shell, Petrobras, and Equinor accounted for **27%**, **21%**, and **13% of revenues**, respectively. The loss of a significant customer would adversely affect business[86](index=86&type=chunk) - Contract backlog of **$8.33 billion** (as of Feb 12, 2025) may not be fully realized due to factors like rig downtime, suspension of operations, or contract cancellations by customers[72](index=72&type=chunk)[73](index=73&type=chunk) - Operations involve numerous hazards (e.g., blowouts, fires, pollution). Insurance and customer indemnities may not be adequate to cover all potential losses[87](index=87&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) [Indebtedness Risks](index=32&type=section&id=RISKS%20RELATED%20TO%20OUR%20INDEBTEDNESS) Addresses risks associated with Transocean's substantial debt and its below-investment-grade credit rating - The company has a substantial amount of debt, totaling **$6.88 billion** at December 31, 2024, of which **$2.36 billion is secured**. This high leverage could limit financial flexibility and create competitive disadvantages[110](index=110&type=chunk) - Debt ratings are below investment grade, which could limit access to capital markets, increase borrowing costs, and lead to less favorable terms on financing[111](index=111&type=chunk)[113](index=113&type=chunk) [Legal, Regulatory, and Compliance Risks](index=34&type=section&id=RISKS%20RELATED%20TO%20LAWS%2C%20REGULATIONS%20AND%20GOVERNMENTAL%20COMPLIANCE) Covers risks from environmental and safety regulations, global political uncertainties, anti-bribery laws, and cybersecurity threats - Increasingly stringent environmental and safety laws can be costly, expose the company to liability, and limit operations. Compliance may require significant capital expenditures[116](index=116&type=chunk)[117](index=117&type=chunk) - The global nature of operations exposes the company to political and other uncertainties, including risks of expropriation, trade barriers, and changes in local laws and regulations[127](index=127&type=chunk)[128](index=128&type=chunk) - Failure to comply with anti-bribery laws like the FCPA and UK Bribery Act could result in significant fines, criminal penalties, and contract terminations[136](index=136&type=chunk) - The company is subject to cybersecurity risks and threats. A breach could disrupt operations, lead to loss of proprietary information, and result in legal claims[140](index=140&type=chunk)[141](index=141&type=chunk) [Tax-Related Risks](index=42&type=section&id=RISKS%20RELATED%20TO%20TAXES) Examines potential adverse impacts from changes in tax laws, treaties, or challenges to the company's operating structure - Changes in tax laws, treaties, or regulations in any country of operation could result in a higher effective tax rate and increased cash tax payments[144](index=144&type=chunk) - A successful tax challenge to the company's operating structure, intercompany pricing, or the loss of a major tax dispute could materially adversely affect earnings and cash flows[146](index=146&type=chunk)[147](index=147&type=chunk) [Risks Related to Swiss Jurisdiction](index=44&type=section&id=RISKS%20RELATED%20TO%20OUR%20JURISDICTION%20OF%20ORGANIZATION%20AND%20GOVERNING%20DOCUMENTS) Details specific risks arising from Transocean's Swiss corporate structure, including capital management limitations and tax implications for distributions - As a Swiss corporation, flexibility regarding capital management is limited by Swiss law, which requires shareholder approval for certain actions (e.g., dividends, large share issuances) that boards in other jurisdictions might handle[149](index=149&type=chunk) - Distributions to shareholders, such as dividends, may be subject to a **35% Swiss federal withholding tax**, unless made as a par value reduction or from qualifying additional paid-in capital[151](index=151&type=chunk) - The company's articles of association and Swiss law contain anti-takeover provisions that could prevent or delay an acquisition, potentially affecting share prices[153](index=153&type=chunk)[154](index=154&type=chunk) [Cybersecurity](index=46&type=section&id=Item%201C.%20Cybersecurity) Transocean's cybersecurity program aligns with the NIST framework, with board oversight, continuous threat detection, and no material incidents reported to date - The company's cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework[158](index=158&type=chunk) - Oversight is provided by the board of directors, with the audit committee receiving regular status reports on cybersecurity matters[160](index=160&type=chunk) - As of the filing date, the company is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on business operations[159](index=159&type=chunk) [Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) Details Transocean's legal proceedings, including a Clean Water Act consent decree and ongoing asbestos litigation, with no material impact expected - Effective January 3, 2024, a subsidiary entered into a civil consent decree with the DOJ and EPA to resolve alleged violations of the Clean Water Act, agreeing to an immaterial monetary penalty and corrective actions[166](index=166&type=chunk) - The company and its subsidiaries are defendants in numerous asbestos-related lawsuits. Management does not expect the ultimate liability from these claims to have a material adverse effect[408](index=408&type=chunk)[409](index=409&type=chunk) Part II [Shareholder and Market Information](index=49&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Provides details on Transocean's NYSE listing, Swiss tax implications for shareholder distributions, and the status of its share repurchase program - The company's shares are listed on the New York Stock Exchange under the ticker symbol "RIG". As of February 11, 2025, there were **878,886,948 shares outstanding**[169](index=169&type=chunk) - Distributions to shareholders may be subject to a **35% Swiss withholding tax**. However, distributions from par value reduction or qualifying additional paid-in capital (totaling **$17.4 billion** at Dec 31, 2024) are exempt[173](index=173&type=chunk)[174](index=174&type=chunk) Share Repurchase Program Status (as of Dec 31, 2024) | Description | Value (in billions) | | :--- | :--- | | Total Authorization | CHF 3.50 | | Remaining Authorization | CHF 3.24 ($3.57) | - No shares were purchased under the publicly announced repurchase program in the fourth quarter of 2024[185](index=185&type=chunk) [Management's Discussion and Analysis (MD&A)](index=54&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Transocean's 2024 financial performance, market outlook, significant events, and liquidity, noting revenue growth despite a net loss and asset impairment [Significant Events in 2024](index=54&type=section&id=SIGNIFICANT%20EVENTS) Summarizes Transocean's key strategic and financial activities in 2024, including acquisitions, asset disposals, and debt management - **Acquisition:** Acquired the remaining **67% of Orion**, owner of the Transocean Norge, for noncash consideration valued at **$431 million**[191](index=191&type=chunk) - **Asset Disposals:** Sold three rigs (Paul B. Loyd, Jr., Transocean Leader, Deepwater Nautilus) for total net cash proceeds of **$102 million**[191](index=191&type=chunk)[348](index=348&type=chunk) - **Debt Management:** Issued **$1.8 billion** in new senior notes (8.25% due 2029 and 8.50% due 2031) and used proceeds to tender for or redeem approximately **$1.7 billion** of existing debt[193](index=193&type=chunk)[382](index=382&type=chunk) - **Credit Facility:** Amended and extended its Secured Credit Facility to June 2028, with a current borrowing capacity of **$576 million**[192](index=192&type=chunk) [Market Outlook](index=56&type=section&id=OUTLOOK) Presents Transocean's positive outlook for the offshore drilling market, driven by energy demand and balanced rig supply - The industry outlook is positive, with forecasts indicating hydrocarbons will remain a critical energy source, driving demand for oil and gas[194](index=194&type=chunk) - The company expects continued investment in deepwater and harsh environment projects due to favorable economic returns and relatively lower carbon intensity[196](index=196&type=chunk) - Marketable supply and demand for high-specification rigs are becoming more balanced, leading customers to sign contracts with longer lead times and higher dayrates[197](index=197&type=chunk) [Performance and Other Key Indicators](index=58&type=section&id=PERFORMANCE%20AND%20OTHER%20KEY%20INDICATORS) Presents key performance metrics for Transocean's drilling fleet, including contract backlog, average daily revenue, and utilization rates Contract Backlog by Fleet (as of Feb 12, 2025) | Fleet | Contract Backlog (in millions) | | :--- | :--- | | Ultra-deepwater floaters | $6,363 | | Harsh environment floaters | $1,965 | | **Total** | **$8,328** | Key Performance Metrics (FY 2024 vs FY 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Fleet Avg. Daily Revenue | $430,100 | $382,300 | | Total Fleet Avg. Revenue Efficiency | 94.5% | 96.8% | | Total Fleet Avg. Rig Utilization | 60.5% | 51.9% | [Operating Results Analysis](index=61&type=section&id=OPERATING%20RESULTS) Provides a detailed analysis of Transocean's consolidated operating results, highlighting revenue growth, expense changes, and impairment losses Consolidated Operating Results Summary (in millions) | Line Item | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Contract drilling revenues | $3,524 | $2,832 | | Operating and maintenance expense | $(2,199) | $(1,986) | | Loss on impairment of assets | $(772) | $(57) | | Operating loss | $(417) | $(325) | | Net loss | $(512) | $(954) | - Contract drilling revenues increased by **$692 million (24%)** in 2024, primarily due to increased utilization, improved average daily revenues, and contributions from newbuild floaters[212](index=212&type=chunk) - Operating and maintenance expenses rose by **$213 million (11%)** due to increased operating activity, newbuild operations, and inflation, partially offset by cost savings from rig sales[213](index=213&type=chunk) - A significant loss on impairment of **$772 million** was recognized in 2024, related to the classification of three floaters as held for sale[216](index=216&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses Transocean's liquidity position, cash flow activities, and capital resources, including debt repayments and capital expenditures Summary of Cash Flows (in millions) | Cash Flow Category | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $447 | $164 | | Net cash used in investing activities | $(151) | $(423) | | Net cash (used in) provided by financing activities | $(350) | $263 | - At December 31, 2024, the company had **$560 million** in unrestricted cash and cash equivalents and **$569 million** of available borrowing capacity under its Secured Credit Facility[228](index=228&type=chunk)[365](index=365&type=chunk) - Primary uses of cash in 2024 were debt repayments (**$2.1 billion**) and capital expenditures (**$254 million**). Primary sources were debt issuance (**$1.77 billion**) and cash from operations (**$447 million**)[224](index=224&type=chunk)[227](index=227&type=chunk) [Critical Accounting Policies and Estimates](index=69&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Outlines Transocean's critical accounting policies and estimates, focusing on income taxes and property and equipment impairment assessments - **Income Taxes:** Significant judgment is applied to uncertain tax positions, with net unrecognized tax benefits of **$42 million** at year-end 2024. A valuation allowance of **$2.09 billion** is recorded against deferred tax assets due to uncertainty of realization[243](index=243&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - **Property and Equipment:** The carrying amount was **$15.83 billion** at year-end 2024. The company reviews its two asset groups (ultra-deepwater and harsh environment floaters) for impairment when indicators are present, using significant unobservable inputs (Level 3) for fair value estimates[249](index=249&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Market Risk Disclosures](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discloses Transocean's primary market risks, including interest rate, equity price, and currency exchange rate risks, and how they are managed - The company is exposed to interest rate risk, primarily on its **$6.94 billion** of fixed-rate long-term debt[257](index=257&type=chunk)[258](index=258&type=chunk) - Equity price risk exists due to the bifurcated compound exchange feature in the 4.625% Senior Guaranteed Exchangeable Bonds. A hypothetical **10% change in share price** would result in an **$18 million to $22 million** change in the feature's carrying amount[260](index=260&type=chunk) - Currency exchange rate risk is managed primarily by structuring customer contracts to provide payment in both U.S. dollars and local currency to match anticipated local currency requirements[261](index=261&type=chunk)[262](index=262&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Presents Transocean's audited consolidated financial statements for FY 2024, including key financial data and selected notes, with an unqualified auditor's opinion [Consolidated Financial Statements](index=81&type=section&id=Financial%20Statements) Provides a summary of Transocean's key consolidated financial data from the statement of operations, balance sheet, and cash flow statement Key Financial Data (FY 2024) | Metric | Amount (in millions) | | :--- | :--- | | **Statement of Operations** | | | Contract Drilling Revenues | $3,524 | | Operating Loss | $(417) | | Net Loss | $(512) | | Diluted Loss Per Share | $(0.76) | | **Balance Sheet (at Dec 31)** | | | Total Assets | $19,371 | | Total Liabilities | $9,086 | | Total Equity | $10,285 | | **Cash Flow Statement** | | | Net Cash from Operations | $447 | [Selected Notes to Financial Statements](index=86&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Highlights key information from selected notes to Transocean's consolidated financial statements, covering revenues, assets, debt, taxes, and commitments - **Note 5 (Revenues):** Major customers in 2024 were Shell (**27%**), Petrobras (**21%**), and Equinor (**13%**)[340](index=340&type=chunk) - **Note 6 (Long-Lived Assets):** Recognized a **$772 million impairment loss** in 2024 related to three floaters classified as held for sale[347](index=347&type=chunk) - **Note 8 (Debt):** Total debt principal at year-end was **$6.94 billion**. In 2024, the company issued **$1.8 billion** in new notes and retired **$1.7 billion** of existing notes through tenders and redemptions[354](index=354&type=chunk)[382](index=382&type=chunk) - **Note 10 (Income Taxes):** Reported an income tax benefit of **$11 million** on a pre-tax loss of **$523 million**, resulting in an effective tax rate of **2.2%**. A valuation allowance of **$2.09 billion** exists against deferred tax assets[393](index=393&type=chunk)[398](index=398&type=chunk) - **Note 12 (Commitments):** Has long-term service agreement obligations totaling **$610 million**[406](index=406&type=chunk) [Controls and Procedures](index=130&type=section&id=Item%209A.%20Controls%20and%20Procedures) States management's conclusion on the effectiveness of Transocean's disclosure controls and procedures as of December 31, 2024, with no material changes reported - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[444](index=444&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2024[445](index=445&type=chunk) Part III [Directors, Compensation, and Corporate Governance](index=130&type=section&id=Items%2010-14) Notes that information for directors, executive compensation, and corporate governance is incorporated by reference from the forthcoming 2025 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2025 proxy statement[449](index=449&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=131&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) Provides an index to the financial statements, schedules, and exhibits filed with the 10-K report, including details on valuation and qualifying accounts Schedule II - Valuation and Qualifying Accounts (in millions) | Description | Balance at 1/1/2024 | Additions | Deductions | Balance at 12/31/2024 | | :--- | :--- | :--- | :--- | :--- | | Allowance for credit losses | $2 | $0 | $0 | $2 | | Allowance for excess materials | $198 | $7 | $(27) | $178 | | Valuation allowance on deferred tax assets | $1,884 | $208 | $(3) | $2,089 |