Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 8 — Income Taxes At June 30, 2025, the Company had deferred tax assets of $297.5 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $5.5 million, inclusive of a valuation allowance of $15.6 million. During the three months ended June 30, 2025, the Company recognized additional discrete deferred tax benefits of $22.3 million related to releases and adjustments of valuation allowance for deferred tax benefits primarily in Luxembourg. During the six months ended June 30, 2025, the Company recognized additional discrete deferred tax benefits of $78.9 million related to releases and adjustments of valuation allowance for deferred tax benefits primarily in Luxembourg. At June 30, 2024, the Company had deferred tax assets of $248.8 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $7.8 million, inclusive of a valuation allowance of $18.5 million. During the three months ended June 30, 2024, the Company recognized additional discrete deferred tax benefits of $63.1 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana and Luxembourg. During the six months ended June 30, 2024, the Company recognized additional discrete deferred tax benefits of $81.6 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Nigeria, Switzerland, and Luxembourg. In deriving the above net deferred tax benefits, the Company relied on sources of income attributable to the projected taxable income for the period covered by the Company’s relevant existing drilling contracts based on the assumption that the relevant rigs will be owned by the relevant rig owners during the relevant existing drilling contract periods. Given the mobile nature of the Company’s assets, we are not able to reasonably forecast the jurisdictions in which taxable income from future drilling contracts may arise. We also have limited objective positive evidence in historical periods. Accordingly, in determining the amount of additional deferred tax assets to recognize, we did not consider projected book income beyond the conclusion of existing drilling contracts. As new drilling contracts are executed or as current contracts are extended, 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. At June 30, 2025, the reserves for uncertain tax positions totaled $196.5 million (net of related tax benefits of $12.5 million). At December 31, 2024, the reserves for uncertain tax positions totaled $197.9 million (net of related tax benefits of $3.7 million). It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits, the expiration of statutes of limitation, or favorable resolutions to ongoing tax litigation. During the three months ended June 30, 2025, our tax provision included tax benefits of $22.3 million related to releases of valuation allowance for deferred tax benefits primarily in Luxembourg. Such tax benefits are offset by tax expenses of $10.3 million related to uncertain tax position movements and recurring quarterly accruals of $69.1 million mostly in Guyana, Luxembourg, Switzerland, and the United States. During the six months ended June 30, 2025, our tax provision included tax benefits of $78.9 million related to releases of valuation allowance for deferred tax benefits primarily in Luxembourg. Such tax benefits are offset by tax expenses related to recurring quarterly accruals of $176.4 million mostly in Guyana, Luxembourg, Switzerland, and the United States. 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 Company is currently evaluating the impact of the OBBBA on its income tax provision, including the potential remeasurement of deferred tax assets and liabilities.
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