Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 7 — Income Taxes During the three months ended September 30, 2026, the Company recognized discrete net deferred tax expenses of $15.8 million related to releases and adjustments of valuation allowance for deferred tax benefits primarily in Switzerland and Nigeria. During the nine months ended September 30, 2026, the Company recognized additional net discrete deferred tax benefits of $23.9 million primarily related to releases and adjustments of valuation allowance for deferred tax benefits primarily in Nigeria. During the three months ended September 30, 2025, the Company recognized additional discrete deferred tax benefits of $6.1 million related to releases and adjustments of valuation allowance for deferred tax benefits in Luxembourg. During the nine months ended September 30, 2025, the Company recognized additional discrete deferred tax benefits of $85.1 million related to releases and adjustments of valuation allowance for deferred tax benefits in Luxembourg. In deriving the above net deferred tax benefits or expenses, 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 September 30, 2026, the reserves for uncertain tax positions totaled $118.7 million (net of related tax benefits of $1.0 million). At December 31, 2025, the reserves for uncertain tax positions totaled $119.2 million (net of related tax benefits of $0.9 million). During the three months ended September 30, 2026, our tax provision included tax expenses of $15.8 million related to adjustments to valuation allowance for deferred tax expenses primarily in Switzerland and recurring quarterly accruals of $117.3 million mostly in Ghana, Guyana, Luxembourg, Switzerland, and the United States. During the nine months ended September 30, 2026, our tax provision included tax benefits of $23.9 million primarily related to adjustments to valuation allowance for deferred tax benefits primarily in Nigeria. Such tax benefits were offset by tax effects of $23.5 million related to the gain on sale of operating assets and recurring quarterly accruals of $222.7 million mostly in Ghana, Guyana, Luxembourg, Switzerland, and the United States.
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