Transocean Ltd. Revenue Disclosure
Note 5—Revenues
Overview—We earn revenues primarily by performing the following activities: (i) providing our drilling rig, together with the work crews, related equipment and services necessary to operate the rig, (ii) providing certain pre-operating activities, including rig preparation and equipment modifications required for the contract, and (iii) delivering the drilling rig by mobilizing to and demobilizing from the drill location. For most of our contracts with customers, our drilling services represent a single performance obligation that is satisfied over time, the duration of which varies by contract. As of December 31, 2025, the drilling contract with the longest expected remaining duration, excluding unexercised options, extends through May 2030.
Disaggregation—Our contract drilling revenues, disaggregated by asset group and by country in which they were earned, were as follows (in millions):
Year ended December 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | ||||||||||||||||||||||||||
Ultra- | | Harsh | Ultra- | | Harsh | Ultra- | | Harsh | ||||||||||||||||||||
deepwater | | environment | deepwater | | environment | deepwater | | environment | ||||||||||||||||||||
floaters | | floaters | Total | floaters | | floaters | Total | floaters | | floaters | Total | |||||||||||||||||
U.S. |
| $ | 1,635 | $ | — | $ | 1,635 | $ | 1,566 | $ | — | $ | 1,566 | $ | 1,433 | $ | — | $ | 1,433 | |||||||||
Brazil | 872 | — | 872 | 727 | — | 727 | 298 | — | 298 | |||||||||||||||||||
Norway | — | 639 | 639 | — | 654 | 654 | — | 603 | 603 | |||||||||||||||||||
Other countries (a) | 270 | 549 | 819 | 225 | 352 | 577 | 341 | 157 | 498 | |||||||||||||||||||
Total contract drilling revenues |
| $ | 2,777 | $ | 1,188 | $ | 3,965 | $ | 2,518 | $ | 1,006 | $ | 3,524 | $ | 2,072 | $ | 760 | $ | 2,832 | |||||||||
| (a) | The aggregate contract drilling revenues earned in other countries that individually represented less than 10 percent of total contract drilling revenues. |
Major customers—For the year ended December 31, 2025, Petróleo Brasileiro S.A. (together with its affiliates, “Petrobras”), Shell plc (together with its affiliates, “Shell”), and Equinor ASA (together with its affiliates, “Equinor”) represented 22 percent, 22 percent and 12 percent, respectively, of our consolidated operating revenues. For the year ended December 31, 2024, Shell, Petrobras and Equinor represented 27 percent, 21 percent and 13 percent, respectively, of our consolidated operating revenues. For the year ended December 31, 2023, Shell, Equinor, TotalEnergies SE and Petrobras represented 27 percent, 16 percent, 12 percent and 11 percent, respectively, of our consolidated operating revenues.
Contract liabilities—Contract liabilities for our contracts with customers were as follows (in millions):
December 31, | |||||||
| 2025 | | 2024 |
| |||
Deferred contract revenues, recorded in other current liabilities |
| $ | 181 | $ | 231 | ||
Deferred contract revenues, recorded in other long-term liabilities | 92 | 212 | |||||
Total contract liabilities |
| $ | 273 | $ | 443 | ||
Significant changes in contract liabilities were as follows (in millions):
Years ended December 31, | |||||||
| 2025 | | 2024 |
| |||
Total contract liabilities, beginning of period | $ | 443 | $ | 398 | |||
Decrease due to recognition of revenues for goods and services | (260) | (243) | |||||
Increase due to goods and services transferred over time | 90 | 288 | |||||
Total contract liabilities, end of period | $ | 273 | $ | 443 | |||
Pre-operating costs—In the years ended December 31, 2025, 2024 and 2023, we recognized pre-operating costs of $158 million, $138 million and $69 million, respectively, recorded in operating and maintenance costs. Recognition increased in each of the two years in the period ended December 31, 2025, primarily as a result of the commencement of operations for one rig that mobilized to Brazil, two rigs that mobilized to Australia, one rig that mobilized to Romania and one rig that we reactivated for a contract in Brazil in the years ended December 31, 2024 and 2023. At December 31, 2025 and 2024, the carrying amount of our unrecognized pre-operating costs to obtain contracts was $136 million and $224 million, respectively, recorded in other assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.