Noble Corp plcNE

Noble Corp plc Income Taxes Disclosure

10-KFiled Feb 12, 20268 min read
Note 10 — Income Taxes
Noble is a tax resident in the UK and, as such, is subject to UK corporation tax on its taxable profits and gains. Noble Cayman was incorporated in the Cayman Islands and, therefore, not subject to tax in any jurisdiction. With respect to Noble, a UK tax exemption is available in respect of qualifying dividends income and capital gains related to the sale of qualifying participations. We operate in various countries throughout the world, including the United States. The income or loss of the non-UK subsidiaries of Noble is not subject to UK corporation tax.
Consequently, we have taken account of the above exemption and provided for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we, or our subsidiaries, have a taxable presence for income tax purposes.
The components of the net deferred taxes are as follows:
 December 31, 2025December 31, 2024
Deferred tax assets  
Net operating loss carry forwards$1,864,511 $1,748,897 
Excess of net tax basis over remaining book basis144,867 470,719 
Transition attribute1,036,319 959,985 
Other151,835 138,792 
Deferred tax assets3,197,532 3,318,393 
Less: valuation allowance(2,890,949)(2,964,740)
Net deferred tax assets$306,583 $353,653 
Deferred tax liabilities  
Other$(14,025)$(14,492)
Deferred tax liabilities(14,025)(14,492)
Net deferred tax assets (liabilities)$292,558 $339,161 
Income (loss) before income taxes consists of the following:
Year EndedYear EndedYear Ended
December 31, 2025December 31, 2024December 31, 2023
United States$100,404 $51,948 $17,619 
Non-United States172,698 440,386 494,624 
Total$273,102 $492,334 $512,243 
Income tax provision (benefit) consists of the following:
Year EndedYear EndedYear Ended
December 31, 2025December 31, 2024December 31, 2023
Current- United States$22,096 $9,061 $2,940 
Current- Non-United States(10,112)77,567 125,494 
Deferred- United States28,209 2,559 3,703 
Deferred- Non-United States16,192 (45,206)(101,796)
Total$56,385 $43,981 $30,341 
The following is a reconciliation of our reserve for uncertain tax positions, excluding interest and penalties:
Year EndedYear EndedYear Ended
 December 31, 2025December 31, 2024December 31, 2023
Gross balance at beginning of period$114,768 $134,934 $132,979 
Additions based on tax positions related to current year— 1,439 25,363 
Additions for tax positions of prior years14,241 41,961 10,087 
Reductions for tax positions of prior years(46,208)(20,960)(29,113)
Expiration of statutes— (310)— 
Tax settlements(12,067)(42,296)(4,382)
Gross balance at end of period70,734 114,768 134,934 
Related tax benefits(850)(3,705)(78)
Net reserve at end of period$69,884 $111,063 $134,856 
The liabilities related to our reserve for uncertain tax positions, included in “Other liabilities” on our Consolidated Balance Sheets, are comprised of the following:
 December 31, 2025December 31, 2024
Reserve for uncertain tax positions, excluding interest and penalties$69,884 $111,063 
Interest and penalties
49,330 86,804 
Reserve for uncertain tax positions, including interest and penalties$119,214 $197,867 
At December 31, 2025 and 2024, the reserves for uncertain tax positions totaled $119.2 million (net of related tax benefits of $0.9 million) and $197.9 million (net of related tax benefits of $3.7 million), respectively. If a portion or all of the December 31, 2025 and 2024, reserves listed above are not realized, the provision for income taxes could be reduced by up to $117.6 million and $196.0 million, respectively.
We include, as a component of our “Income tax benefit (provision)”, potential interest and penalties related to recognized tax contingencies within our global operations. Interest and penalties resulted in an income tax benefit of $26.4 million, tax expense of $5.9 million, and tax expense of $24.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.
During the year ended December 31, 2025, our tax provision included a net tax benefit of $134.0 million related to non-recurring releases of valuation allowances primarily in Luxembourg and Switzerland, and a net tax benefit of $60.2 million related to changes in uncertain tax positions. Such tax benefits were offset by various recurring annual accruals of $250.6 million primarily in Guyana, the United States, Switzerland, and Luxembourg.
During the year ended December 31, 2024, our tax provision included a net tax benefit of $123.6 million related to non-recurring releases of valuation allowances primarily in Luxembourg, and a net tax benefit of $20.2 million related to changes in uncertain tax positions. Such tax benefits were offset by various recurring quarterly accruals of $187.8 million primarily in Guyana, Nigeria, the United States, Switzerland, and Luxembourg.
During the year ended December 31, 2023, our tax provision included tax benefits of $187.2 million related to non-recurring releases of valuation allowances in Luxembourg, Guyana, Switzerland, and Norway, and a tax benefit of $6.8 million related to uncertain tax position releases. Such tax benefits were offset by tax expenses related to uncertain tax positions of $20.9 million in various countries, contract fair value amortization of $23.7 million, and various recurring quarterly accruals of $179.6 million primarily in Guyana, Switzerland, and Luxembourg.
Our gross deferred tax asset balance at year-end reflects the application of our income tax accounting policies and is based on management’s estimates, judgments, and assumptions regarding realizability. If it is more likely than not that a portion of the deferred tax assets will not be realized in a future period, the deferred tax assets will be reduced by a valuation allowance based on management’s estimates.
In deriving the $49.7 million recurring and non-recurring change in valuation allowance, where applicable we relied on sources of income attributable to the reversal of taxable temporary differences in the same periods as the relevant tax attributes and projected taxable income for the period covered by our relevant existing drilling contracts based on the assumption that the relevant rigs will be owned by the current rig owners during the relevant existing drilling contract periods. Given the mobile nature of our assets, we are not able to reasonably forecast the jurisdiction of our taxable income from future drilling contracts. We also have limited objective positive evidence in historical periods. Accordingly, in determining the amount of deferred tax benefits to recognize, we did not consider projected book income beyond the conclusion of existing drilling contracts with the exception of interest income projected to be generated over a finite period beyond the conclusion of the relevant existing drilling contracts. As new drilling contracts are executed, we will reassess the amount of deferred tax assets that are realizable. Finally, once we have established sufficient objective positive evidence for historical periods, we may consider reliance on forecasted taxable income from future drilling contracts.
Our tax benefits related to transition attributes in Switzerland are scheduled to expire by 2036. Our net operating losses in Switzerland are scheduled to expire between 2027 and 2032. Our net operating losses in Luxembourg are scheduled to expire between 2033 and 2038; however, a portion of the tax losses has no expiration date.
We conduct business globally and, as a result, we file numerous income tax returns in the US and in non-US jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including, but not limited to, jurisdictions such as Guyana, Mexico, and the United Kingdom. We are no longer subject to US Federal income tax examinations for years before 2022 and non-US income tax examinations for years before 2000.
In Denmark, prior to becoming a wholly-owned subsidiary of Noble (the “Merger”), Maersk Drilling was subject to a mandatory joint taxation scheme with all other Danish entities under the common control of A.P. Møller Holding A/S (“APMH”). To the extent Maersk Drilling incurred tax losses in Denmark until the Merger, such losses may be utilized by other jointly taxed entities. Noble may be compensated through a joint taxation contribution when such losses are utilized. In the event that APMH or any jointly taxed entity is subject to audits for years and periods prior to and until the Merger and such audits result in adjustments to relevant tax returns, adjustments to the prior year joint tax contributions may be required. This could result in additional compensation to Noble or refunds payable by Noble to APMH or to any previous joint taxation group administration company of previously received joint taxation contributions. Since the Merger and through December 31, 2025, Noble has recognized a benefit for tax contribution payments of approximately $24.6 million from APMH and an expense for a tax contribution repayment of $4.0 million to APMH under this arrangement. For the years ended December 31, 2025, 2024, and 2023, net benefits of approximately $3.5 million, an expense of $4.0 million, and net benefits of approximately $19.1 million, respectively, are included in “Interest income and other, net” on our Consolidated Statements of Operations. Additionally, for the year ended December 31, 2023, approximately $2.0 million is recorded and included as a benefit in “Income tax benefit (provision)” on our Consolidated Statement of Operations.
UK earnings are taxable in the United Kingdom at the UK statutory rate of 25%. Noble Cayman was incorporated in the Cayman Islands and, therefore, not subject to tax in any jurisdiction. Following the Business Combination with Maersk Drilling, Noble is a public limited company incorporated under the laws of England and Wales. The income or loss of our non-UK subsidiaries is not subject to UK income tax. UK earnings are taxable in the United Kingdom at the UK statutory rate of 19% and 25% through March 31, 2023, and beginning on April 1, 2023, respectively.
A reconciliation of tax rates outside of the United Kingdom to our Noble effective rate for 2025 is shown below:
Year Ended
December 31, 2025
UK statutory income tax rate$68,275 25.0 %
Permanent differences8,438 3.1 %
Change in valuation allowance3,933 1.4 %
Foreign tax effects:
British Virgin Islands:
Rate differential7,230 2.7 %
Cayman Islands:
Rate differential11,490 4.2 %
Colombia:
Cross-Border taxes4,723 1.7 %
Guyana:
Change in valuation allowance4,901 1.8 %
Permanent differences4,404 1.6 %
Luxembourg:
Change in valuation allowance(42,929)(15.7)%
Nigeria:
Permanent differences(3,736)(1.4)%
Philippines:
Cross-Border taxes9,468 3.5 %
Saudi Arabia(4,312)(1.6)%
Switzerland:
Rate differential6,144 2.3 %
Change in valuation allowance(5,478)(2.0)%
United States:
Cross border taxes and other19,486 7.1 %
Nondeductible expenses12,605 4.6 %
Change in valuation allowance(6,774)(2.5)%
Other foreign jurisdictions17,487 6.4 %
Worldwide changes in unrecognized tax benefits(58,970)(21.6)%
Total$56,385 20.6 %
A reconciliation of tax rates outside of the United Kingdom to our Noble effective rate for 2024 and 2023 is shown below:
Year EndedYear Ended
December 31, 2024December 31, 2023
Effect of: 
Tax rates which are different than UK or Cayman rates37.3 %37.6 %
Tax impact of valuation allowance(25.0)%(36.1)%
Resolution of (reserve for) tax authority audits(3.4)%4.4 %
Total8.9 %5.9 %
Information about income taxes paid is as follows:
Year Ended
December 31, 2025
Colombia21,137 
Malaysia11,179 
Nigeria8,705 
Philippines6,590 
United States30,156 
Other43,362 
Total$121,129 
At December 31, 2025 and 2024, the Company asserts that its unremitted earnings and/or book/tax outside basis differences in certain of its subsidiaries are either permanently reinvested or are not expected to result in a material taxable event in the foreseeable future. Therefore, no material deferred taxes have been recorded related to such earnings and/or investments.
On July 4, 2025, the “One Big Beautiful Bill Act” (the “OBBBA”) was signed into law. The legislation includes significant changes to the US tax code affecting both current and deferred income taxes. Key provisions include the reinstatement of 100% bonus depreciation, modifications to the Section 163(j) interest deduction limitation, and other changes to US taxation of profits derived from foreign operations. The OBBBA does not have a material impact on Noble’s consolidated financial statements.

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 19, 2025
2023Feb 23, 2024
2022Mar 9, 2023

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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