4 unchanged sentences
Oil and gas prices are extremely volatile and are affected by numerous factors, including the following:
−Removed: ◾ worldwide demand for oil and gas, including economic activity in the U.S., other large energy-consuming markets and in developing and emerging markets, which has been significantly impacted by the COVID-19 pandemic and the governmental, company and individual reactions thereto;
+Added: ◾ worldwide demand for oil and gas, including economic activity in the U.S., other large energy-consuming markets and in developing and emerging markets, which was significantly impacted by COVID-19 and the governmental, company and individual reactions thereto;
◾ the ability of the Organization of the Petroleum Exporting Countries (“OPEC”) to set and maintain production levels, productive spare capacity and pricing among its members;
29 unchanged sentences
During prior periods of high dayrates and rig utilization rates, we and other industry participants responded to increased customer demand by increasing the supply of rigs through ordering the construction of new units.
−Removed: The number of new units delivered without contracts, combined with an increased number of rigs in the global market completing contracts and becoming idle, has increased and may continue to intensify price competition.
+Added: The introduction of new units delivered without contracts, combined with an increased number of rigs in the global market completing contracts and becoming idle, would intensify price competition.
During periods of low oil and natural gas price levels, new construction has resulted in an oversupply of rigs and has caused a subsequent decline in dayrates and rig utilization rates, sometimes for extended periods of time.
3 unchanged sentences
As of February 9, 2023, we have 13 uncontracted rigs, of which five have been out of service for greater than five years, and these rigs may remain out of service for extended periods of time.
+Added: We also have a noncontrolling ownership interest in a company that has an uncontracted newbuild drillship under construction.
If we are unable to obtain drilling contracts for our uncontracted rigs, whether due to a prolonged offshore drilling market downturn, a delayed or muted recovery of such market or otherwise, it may have an adverse effect on our results of operations and cash flows.
1 unchanged sentence
The offshore drilling markets in which we compete experience fluctuations in the demand for drilling services.
−Removed: Our ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions at the time of expiration.
+Added: Our ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions.
As of February 9, 2023, we have 13 stacked or idle rigs.
−Removed: We also have 11 existing drilling contracts for our rigs that are currently operating, which are scheduled to expire before December 31, 2022.
+Added: We also have seven existing drilling contracts for our rigs that are currently operating, which are scheduled to expire before December 31, 2023.
We may be unable to obtain drilling contracts for our rigs that are currently operating upon the expiration or termination of such contracts, and there may be a gap in the operation of the rigs between the current contracts and subsequent contracts.
When oil and natural gas prices are low or it is expected that such prices will decrease in the future, we may be unable to obtain drilling contracts at attractive dayrates or at all.
−Removed: We may not be able to obtain new drilling contracts in direct continuation with existing contracts, or depending on prevailing market conditions, we may enter into drilling contracts at dayrates substantially below the existing dayrates or on terms otherwise less favorable compared to existing contract terms, which may have an adverse effect on our financial position, results of operations or cash flows.
+Added: We may not be able to obtain new drilling contracts with the terms or dayrates sufficient to support a reactivation of a cold stacked rig.
+Added: Likewise, we may not be able to obtain new drilling contracts in direct continuation with existing contracts, or depending on prevailing market conditions, we may enter into drilling contracts at dayrates substantially below the existing dayrates or on terms otherwise less favorable compared to existing contract terms, which may have an adverse effect on our financial position, results of operations or cash flows.
Our current backlog of contract drilling revenues may not be fully realized.
1 unchanged sentence
This amount represents the maximum contractual operating dayrate multiplied by the number of days remaining in the firm contract period, excluding revenues for mobilization, demobilization, contract preparation, other incentive provisions or reimbursement revenues, which are not expected to be significant to our contract drilling revenues.
−Removed: Our contract backlog includes amounts associated with our two contracted newbuild units that are currently under construction.
+Added: Our contract backlog includes amounts associated with our one contracted newbuild unit that is currently under construction.
The contractual operating dayrate may be higher than the actual dayrate we ultimately receive or an alternative contractual dayrate, such as waiting on weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances.
8 unchanged sentences
Our inability to realize the full amount of our contract backlog may have an adverse effect on our financial position, results of operations or cash flows.
−Removed: Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts.
−Removed: Certain of our drilling contracts with customers may be cancelable at the option of the customer upon payment of an early termination payment.
−Removed: Such payments may not, however, fully compensate us for the loss of the contract.
−Removed: Drilling contracts also customarily provide for either automatic termination or termination at the option of the customer, typically without the payment of any termination fee, under various circumstances such as non-performance, as a result of significant downtime or impaired performance caused by equipment or operational issues, or sustained periods of downtime due to force majeure events, many of which are beyond our control.
−Removed: Certain customers who seek to terminate our drilling contracts may attempt to defeat or circumvent our protections against certain liabilities.
−Removed: Our customers’ ability to perform their obligations under their drilling contracts, including their ability to fulfill their indemnity obligations to us, may also be negatively impacted by an economic downturn.
−Removed: Our customers, which include national energy companies, often have significant bargaining leverage over us.
−Removed: If our customers cancel some of our contracts, and we are unable to secure new contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a number of our contracts are renegotiated on terms that are not as favorable as current terms, it could adversely affect our financial position, results of operations or cash flows.
−Removed: During periods of depressed market conditions, such as we have recently experienced, we are subject to an increased counterparty risk, as our customers may seek to repudiate their contracts, including through claims of non-performance in order to reduce their capital expenditures.
−Removed: Our customers may no longer need a drilling rig that is currently under contract or may be able to obtain a comparable drilling rig at a lower dayrate.
−Removed: We have experienced, and are at continued risk of experiencing, early contract terminations when there is a weak commodity price environment.
−Removed: The ability of each of our counterparties to perform its obligations under a contract with us, including indemnity obligations, will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the offshore drilling industry, prevailing prices for oil and natural gas, the overall financial condition of the
−Removed: counterparty, the dayrates received and the level of expenditures necessary to maintain drilling activities.
−Removed: Should a counterparty fail to honor its obligations under an agreement with us, we could sustain losses, which could have an adverse effect on our business and on our financial position, results of operations or cash flows.
We must make substantial capital and operating expenditures to reactivate our stacked or idle fleet and to maintain our active fleet, and we may be required to make significant capital expenditures to maintain our competitiveness and to comply with laws and applicable regulations and standards of governmental authorities and organizations.
1 unchanged sentence
These expenditures could increase as a result of changes in the cost of labor and materials, requirements of customers, the size of our fleet, the cost of replacement parts for existing rigs, the geographic location of the rigs and the length of drilling contracts.
−Removed: Changes in offshore drilling technology, customer requirements for new or upgraded equipment and competition within our industry may require us to make significant capital expenditures in order to maintain our competitiveness and to achieve our commitment to reduce our greenhouse gas emission intensity.
+Added: Changes in offshore drilling technology, customer requirements for new or upgraded equipment and competition within our industry may require us to make significant capital expenditures in order to maintain our competitiveness and to achieve our intention to reduce our greenhouse gas emission intensity.
Changes in governmental regulations, including environmental requirements, and changes in safety or other equipment standards, as well as compliance with standards imposed by maritime self-regulatory organizations, may cause our capital expenditures to increase or require us to make additional unforeseen capital expenditures.
5 unchanged sentences
Our failure to obtain the funds for necessary future capital expenditures could have a material adverse effect on our business and on our financial position, results of operations and cash flows.
−Removed: Public health threats have had, and may continue to have, significant adverse consequences for general economic, financial and business conditions, as well as for our business and operations.
−Removed: Public health threats, pandemics and epidemics, such as the outbreak of COVID-19, including new variants therof, severe influenza, other coronaviruses and other highly communicable viruses or diseases, have impacted and may continue to impact our operations directly or indirectly, including by disrupting the operations of our business partners, suppliers and customers in ways that adversely impact our operations.
−Removed: For instance, the outbreak of COVID-19 and its development into a pandemic in March 2020 resulted in various actions by governmental authorities around the world designed to prevent or reduce the spread of COVID-19, such as imposing mandatory closures of all non-essential business facilities, seeking voluntary closures of such facilities and imposing restrictions on, or advisories with respect to, travel, business operations and public gatherings or interactions.
−Removed: In addition, companies and individuals seeking to curtail the spread of COVID-19 have taken certain cautionary measures, such as certain companies requiring employees to work remotely, suspending or curtailing all non-essential travel for employees, and discouraging employee attendance at in-person work-related meetings, as well as individuals voluntarily social distancing and self-quarantining.
−Removed: While many of the restrictions and measures initially implemented during 2020 have since been softened or lifted in varying degrees in different locations around the world, and the manufacture and distribution of COVID-19 vaccines during 2021 aided to initiate an economic recovery from the pandemic, the uncertainty regarding new potential virus variants and the success of any these vaccines may in the future adversely affect global economic activity or prompt the re-imposition of certain restrictions and measures.
−Removed: Increases in COVID-19 cases, such as recently developed as new variants emerged, may result in significantly reduced economic activity, even if not required by governmental authorities, particularly in affected areas, which could result in a sharp reduction in the demand for oil and a decline in oil prices as occurred during 2020.
−Removed: We continue to experience increased costs and inefficiencies as a result of the comprehensive precautionary measures we continue to take to help minimize the risk of COVID-19 impacts to our business, employees, customers, suppliers and the communities in which we operate, including testing employees for COVID-19 prior to transport offshore to a rig and quarantining any operational employee, where appropriate, who have shown signs of COVID-19, regardless of whether such employee has been confirmed to be infected, and we also have experienced increased costs as a result of increasing our pools of employees that are available to substitute for employees who are not able to travel to a rig.
−Removed: We cannot guarantee that any precautionary measures will be effective in preventing either an outbreak of COVID-19 on one or more of our rigs or other adverse effects related to COVID-19.
−Removed: To the extent an outbreak of COVID-19 develops on one or more of our rigs, we may have to temporarily shut down operations of such rig or rigs, which could result in significant downtime or contract termination and have substantial adverse consequences for our business and results of operations.
−Removed: In addition, most of our non-operational employees continue to work remotely a substantial majority of their time, which increases various operational risks.
−Removed: For instance, working remotely may increase the risk of security breaches or other cyber incidents or attacks, loss of data, fraud and other disruptions as a consequence of more employees accessing sensitive and critical information from remote locations.
−Removed: Many governmental authorities across the globe implemented at various times during the COVID-19 pandemic travel restrictions and mandatory quarantine measures to prevent or reduce the spread of COVID-19, and in complying with such governmental actions, we have experienced, and expect to continue to experience, increased difficulties, delays and costs in moving our personnel in and out of, and to work in, the various jurisdictions in which we operate.
−Removed: We may be unable to pass along these increased costs to our customers.
−Removed: Additionally, disruptions to or restrictions on the ability of our suppliers, manufacturers and service providers to supply parts, equipment or services in the jurisdictions in which we operate or to progress the construction of our newbuild projects, whether as a result of government actions, labor shortages, the inability to source parts or equipment from affected locations, or other effects related to the COVID-19 outbreak, may have significant adverse consequences on our ability to meet our commitments to customers, including by increasing our operating costs and increasing the risk of rig downtime and could result in contract terminations.
−Removed: Concerns over the prolonged negative effects of the COVID-19 outbreak on economic and business prospects across the world, including as a result of new variants of the virus, have also contributed to oil price volatility and uncertainty regarding the outlook for the global economy.
−Removed: Such conditions have resulted in, and may continue to result in, reductions to our customers’ drilling and production expenditures and delays or cancellations of projects, thus decreasing demand for our services, and an increased risk that our customers may seek price reductions or more favorable economic terms for our services, terminate our contracts or that we may be required to idle, stack or retire more of our rigs.
−Removed: Additionally, any early termination payment made in connection with an early contract termination may not fully compensate us for the loss of the contract.
−Removed: Accordingly, the actual amount of revenues earned may be substantially lower than the reported contract backlog.
−Removed: To the extent our suppliers experience a deterioration in financial condition or operational capability as a result of such depressed market and industry conditions or we or other suppliers incur delays in moving personnel to and from drilling rigs, we may experience disruptions in supply, which could increase our operating costs and increase rig downtime.
−Removed: The occurrence of any such events with respect to our customers, contracts or suppliers in certain cases has had, and may continue to have, significant adverse consequences for our business and financial position.
−Removed: The magnitude and duration of potential social, economic and labor instability resulting from the COVID-19 outbreak, including the speed at which national economies can recover, or whether any recovery will ultimately experience a reversal or other setbacks, are uncertain and cannot be estimated as such effects depend on future events that are largely out of our control.
−Removed: The ultimate extent of the impact of COVID-19 and its variants on our business and financial position depend largely on future developments, including the duration, spread or containment of the outbreak, particularly within the geographic locations where we operate, and the related impact on overall economic activity, all of which are highly uncertain.
−Removed: We are unable to predict the timing or impact of any such restructurings, if completed, on the capital structure and competitive dynamics among offshore drilling companies.
−Removed: Public and investor sentiment towards climate change, fossil fuels and other esg matters could adversely affect our business, cost of capital and the price of our stock and other securities.
−Removed: Changing public sentiment concerning fossil fuels, aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, has prompted efforts to promote the divestment of shares of energy companies, as well as to pressure lenders and other financial services companies to limit or curtail activities with energy companies.
−Removed: These efforts have recently intensified, as demonstrated by the State of New York’s December 2020 announcement that it will be divesting the state’s Common Retirement Fund from fossil fuels.
−Removed: If this or similar divestment efforts are successful, our stock price and our ability to access capital markets may be negatively impacted.
−Removed: Members of the investment community are also increasing their focus on environmental, social and governance (“ESG”) practices and disclosures, including practices and disclosures related to greenhouse gases and climate change, in the energy industry in particular, and diversity and inclusion initiatives and governance standards among public companies more generally.
−Removed: As a result, we may face increasing pressure regarding our ESG disclosures and practices.
−Removed: Additionally, members of the investment community may screen companies such as ours for ESG sustainability performance before investing in our stock.
−Removed: Over the past few years there has also been an acceleration in investor demand for ESG investing opportunities, and many large institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG investments.
−Removed: As a result, there has been a proliferation of ESG focused investment funds seeking ESG oriented investment products.
−Removed: If we or our securities are unable to meet the sustainability ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us, our cost of capital may increase, our stock price and the price of our publicly traded debt securities may be negatively impacted and our reputation may also be negatively affected.
−Removed: We rely heavily on a relatively small number of customers and the loss of a significant customer or a dispute that leads to the loss of a customer could have an adverse effect on our business.
−Removed: We engage in offshore drilling services for most of the leading integrated energy companies or their affiliates, as well as for many government-owned or government-controlled energy companies and other independent energy companies.
−Removed: For the year ended December 31, 2021, our most significant customers were Shell and Equinor, representing approximately 31 percent and 30 percent, respectively, of our consolidated operating revenues.
−Removed: As of February 14, 2022, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Shell, Equinor and Chevron, representing approximately 54 percent, 16 percent and 15 percent, respectively, of our total contract backlog.
−Removed: The loss of any of these customers or another significant customer, or a decline in payments under any of our drilling contracts, could, at least in the short term, have an adverse effect on our business.
Our operating and maintenance costs will not necessarily fluctuate in proportion to changes in our operating revenues.
1 unchanged sentence
Costs for operating a rig are generally fixed or only semi-variable regardless of the dayrate being earned.
+Added: To the extent a drilling contract provides for escalations attributable to inflation in our costs, those adjustments will lag the impact of inflationary pressures and may not reflect the full impact to us of any cost inflation.
+Added: As drilling contracts with such provisions expire or are terminated, there can be no assurance that future drilling contracts will contain similar provisions, which may reduce our margins in inflationary environments.
In addition, should our rigs incur unplanned downtime while on contract or idle time between drilling contracts, we will not always reduce the staff on those rigs because we could use the crew to prepare the rig for its next contract.
8 unchanged sentences
Excess amounts of local currency may also be exposed to the risk of currency exchange losses.
+Added: Public and investor sentiment towards climate change, fossil fuels and other esg matters could adversely affect our business, cost of capital and the price of our stock and other securities.
+Added: Changing public sentiment concerning fossil fuels, aimed at the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, has prompted efforts to promote the divestment of shares of energy companies, as well as to pressure lenders and other financial services companies to limit or curtail activities with energy companies.
+Added: These efforts have recently intensified, as demonstrated by the State of New York’s December 2020 announcement that it will be divesting the state’s Common Retirement Fund from fossil fuels by 2040.
+Added: If this or similar divestment efforts are successful, our stock price and our ability to access capital markets may be negatively impacted.
+Added: Members of the investment community are also increasing their focus on environmental, social and governance (“ESG”) practices and disclosures, including practices and disclosures related to greenhouse gases and climate change, in the energy industry in particular, and diversity and inclusion initiatives and governance standards among public companies more generally.
+Added: As a result, we may face
+Added: increasing pressure regarding our ESG disclosures and practices.
+Added: Additionally, members of the investment community may screen companies such as ours for ESG sustainability performance before investing in our stock.
+Added: Over the past few years there has also been an acceleration in investor demand for ESG investing opportunities, and many large institutional investors have committed to increasing the percentage of their portfolios that are allocated towards ESG investments.
+Added: As a result, there has been a proliferation of ESG focused investment funds seeking ESG oriented investment products.
+Added: If we or our securities are unable to meet the sustainability ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us, our cost of capital may increase, our stock price may be negatively impacted, the cost of capital associated with our securities offerings may increase and our reputation may be negatively affected.
+Added: Public health threats have had, and may continue to have, significant adverse consequences for general economic, financial and business conditions, as well as for our business and operations.
+Added: Public health threats, including pandemics and epidemics, such as the outbreak of COVID-19, new variants thereof, severe influenza, other coronaviruses and other highly communicable viruses or diseases, have impacted and may continue to impact our operations directly or indirectly, including by disrupting the operations of our business partners, suppliers and customers in ways that adversely impact our operations.
+Added: Such impacts may include, among others:
+Added: ◾ causing a temporary shut-down of operations in case of an outbreak on one or more of our rigs;
+Added: ◾ disrupting or restricting the ability of our suppliers, manufacturers and service providers to supply parts, equipment labor or services in the jurisdictions in which we operate or conduct shipyard activities including newbuild construction;
+Added: ◾ causing us to incur increased costs, inefficiencies, and labor shortages as a result of precautionary measures taken to counteract a potential or actual outbreak, including testing and quarantining of offshore personnel;
+Added: ◾ being negatively affected by various actions by governmental authorities around the world designed to prevent or reduce the spread of an outbreak, such as imposing mandatory closures of all business facilities deemed to be non-essential, seeking voluntary closures of such facilities and imposing restrictions on, or issuing advisories with respect to, travel, business operations and public gatherings or interactions.
+Added: As a result, we may experience significant adverse consequences in our ability to meet our commitments to customers, including due to increased operating costs and increased risk of rig downtime or contract termination, which may result in substantial adverse consequences for our business and results of operations.
+Added: In addition, public health threats may result in significantly reduced global or regional economic activity, which could result in a sharp reduction in the demand for oil and an associated decline in oil prices as occurred during 2020.
+Added: Such conditions may result in, reductions to our customers’ drilling and production expenditures and delays or cancellations of projects, which may cause a decrease in demand for our services and an increase in the risk that our customers may seek to terminate or renegotiate pricing or other terms for our existing contracts or that more of our rigs may become idle, stacked or retired from our fleet.
+Added: The magnitude and duration of potential social, economic and labor instability resulting from such public health threats, including the speed at which national economies can recover, or whether any recovery will ultimately experience a reversal or other setbacks, are uncertain and cannot be estimated as such effects depend on future events that would be largely out of our control.
+Added: We rely heavily on a relatively small number of customers and the loss of a significant customer or a dispute that leads to the loss of a customer could have an adverse effect on our business.
+Added: We engage in offshore drilling services for most of the leading integrated energy companies or their affiliates, as well as for many government-owned or government-controlled energy companies and other independent energy companies.
+Added: For the year ended December 31, 2022, our most significant customers were Shell, Equinor and Petrobras, representing approximately 33 percent, 25 percent and 11 percent, respectively, of our consolidated operating revenues.
+Added: As of February 9, 2023, the customers with the most significant aggregate amount of contract backlog associated with our drilling contracts were Shell, Petrobras and Chevron, representing approximately 33 percent, 31 percent, and 14 percent, respectively, of our total contract backlog.
+Added: The loss of any of these customers or another significant customer, or a decline in payments under any of our drilling contracts, could, at least in the short term, have an adverse effect on our business.
Our business involves numerous operating hazards, and our insurance and indemnities from our customers may not be adequate to cover potential losses from our operations.
3 unchanged sentences
Our offshore fleet is also subject to hazards inherent in marine operations, either while on site or during mobilization, such as capsizing, sinking, grounding, collision, piracy, damage from severe weather and marine life infestations.
−Removed: The South China Sea, the Northwest Coast of Australia and the U.S.
−Removed: Gulf of Mexico are areas subject to typhoons, hurricanes or other extreme weather conditions on a relatively frequent basis, and our drilling rigs in these regions may be exposed to damage or total loss by these storms, some of which may not be covered by insurance.
+Added: Gulf of Mexico, the South China Sea and the Northwest Coast of Australia are areas subject to typhoons, hurricanes or other extreme weather conditions on a relatively frequent basis, and our drilling rigs in these regions may be exposed to damage or total loss by these storms, some of which may not be covered by insurance.
The occurrence of these events could result in the suspension of drilling operations, damage to or destruction of the equipment involved and injury to or death of rig personnel.
−Removed: Some experts believe global climate change could increase the frequency and severity of these extreme weather conditions.
+Added: Some experts believe global climate
+Added: change could increase the frequency and severity of these extreme weather conditions.
Operations may also be suspended because of machinery breakdowns, abnormal drilling conditions, failure of subcontractors to perform or supply goods or services, or personnel shortages.
19 unchanged sentences
As a result, we generally retain the risk for any losses in excess of these limits.
−Removed: We generally do not carry insurance for loss of revenue, and
−Removed: certain other claims may also not be reimbursed by insurance carriers.
+Added: We generally do not carry insurance for loss of revenue, and certain other claims may also not be reimbursed by insurance carriers.
Any such lack of reimbursement may cause us to incur substantial costs.
1 unchanged sentence
Moreover, we may not be able to maintain adequate insurance in the future at rates that we consider reasonable or be able to obtain insurance against certain risks.
−Removed: Failure to recruit and retain key personnel could hurt our operations.
+Added: Our drilling contracts may be terminated due to a number of events, and, during depressed market conditions, our customers may seek to repudiate or renegotiate their contracts.
+Added: Certain of our drilling contracts with customers may be cancelable at the option of the customer upon payment of an early termination payment.
+Added: Such payments may not, however, fully compensate us for the loss of the contract.
+Added: For example, early in the fourth quarter of 2022, Transocean Equinox concluded the activities contemplated in its drilling contract prior to the end of the contract’s firm term that was previously expected late in the fourth quarter of 2022.
+Added: The termination payment associated with the drilling contract would not fully compensate us for the early termination of the contract.
+Added: Drilling contracts also customarily provide for either automatic termination or termination at the option of the customer, typically without the payment of any termination fee, under various circumstances such as non-performance, as a result of significant downtime or impaired performance caused by equipment or operational issues, or sustained periods of downtime due to force majeure events, many of which are beyond our control.
+Added: Certain customers who seek to terminate our drilling contracts may attempt to defeat or circumvent our protections against certain liabilities.
+Added: Our customers’ ability to perform their obligations under their drilling contracts, including their ability to fulfill their indemnity obligations to us, may also be negatively impacted by an economic downturn.
+Added: Our customers, which include national energy companies, often have significant bargaining leverage over us.
+Added: If our customers cancel some of our contracts, and we are unable to secure new contracts on a timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time or if a number of our contracts are renegotiated on terms that are not as favorable as current terms, it could adversely affect our financial position, results of operations or cash flows.
+Added: During periods of depressed market conditions, such as we have recently experienced, we are subject to an increased counterparty risk, as our customers may seek to repudiate their contracts, including through claims of non-performance in order to reduce their capital expenditures.
+Added: Our customers may no longer need a drilling rig that is currently under contract or may be able to obtain a comparable drilling rig at a lower dayrate.
+Added: We have experienced, and are at continued risk of experiencing, early contract terminations when there is a weak commodity price environment.
+Added: The ability of each of our counterparties to perform its obligations under a contract with us, including indemnity obligations, will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the offshore drilling industry, prevailing prices for oil and natural gas, the overall financial condition of the counterparty, the dayrates received and the level of expenditures necessary to maintain drilling activities.
+Added: Should a counterparty fail to honor its obligations under an agreement with us, we could sustain losses, which could have an adverse effect on our business and on our financial position, results of operations or cash flows.
+Added: Failure to recruit and retain personnel could hurt our operations.
We depend on the continuing efforts of key members of our management, as well as other highly skilled personnel, to operate and provide technical services and support for our business worldwide.
Historically, competition for the personnel required for drilling operations has intensified as the number of rigs activated, added to worldwide fleets or under construction increased, leading to shortages of qualified personnel in the industry and creating upward pressure on wages and higher turnover.
−Removed: We may experience a reduction in the experience level of our personnel as a result of any increased turnover and ongoing staff reduction initiatives, which could lead to higher downtime and more operating incidents, which in turn could decrease revenues and increase costs.
+Added: We may experience a reduction in the experience level of our personnel as a result of any increased turnover, which could lead to higher downtime and more operating incidents, which in turn could decrease revenues and increase costs.
If increased competition for qualified personnel were to intensify in the future we may experience increases in costs or limits on operations.
Our labor costs and the operating restrictions under which we operate could increase as a result of collective bargaining negotiations and additional unionization efforts.
−Removed: Approximately 42 percent of our total workforce, working primarily in Norway, Brazil and the U.K., are represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiation.
+Added: As of December 31, 2022, approximately 43 percent of our total workforce, working primarily in Norway, Brazil and the U.K., are represented by, and some of our contracted labor work is subject to, collective bargaining agreements, substantially all of which are subject to annual salary negotiation.
Negotiations over annual salary or other labor matters could result in higher personnel or other costs or increased operational restrictions or disruptions.
5 unchanged sentences
Our shipyard projects and operations are subject to delays and cost overruns.
−Removed: As of February 14 2022, we had under construction two ultra-deepwater drillships.
−Removed: We also have a variety of other more limited shipyard projects at any given time.
+Added: We have a variety of shipyard projects underway for our existing rigs at any given time.
+Added: Additionally, as of February 14, 2023, we were constructing one ultra-deepwater drillship and held a noncontrolling ownership interest in a company that is constructing one ultra-deepwater drillship.
These shipyard projects are subject to the risks of delay or cost overruns inherent in any such construction project resulting from numerous factors, including the following:
−Removed: ◾ complications arising from pandemics and epidemics, such as COVID-19, severe influenza, other coronaviruses and other highly communicable viruses or diseases, and associated government orders in the country where the rigs are being constructed or serviced and elsewhere;
+Added: ◾ complications arising from pandemics and epidemics, such severe influenza, coronaviruses and other highly communicable viruses or diseases, and associated government orders in the country where the rigs are being constructed or serviced and elsewhere;
◾ shipyard availability, failures and difficulties;
12 unchanged sentences
◾ difficulty in obtaining necessary permits or approvals.
−Removed: These factors may contribute to cost variations and delays in the delivery of our newbuild units and other rigs undergoing shipyard projects.
+Added: These factors may contribute to cost variations and delays in the delivery of rigs undergoing shipyard projects or any future newbuild units.
Cost variations may result in, among other things, disputes with the shipyards that construct or service our drilling units.
5 unchanged sentences
Certain parts and equipment that we use in our operations may be available only from a small number of suppliers, manufacturers or service providers, or in some cases must be sourced through a single supplier, manufacturer or service provider.
−Removed: A disruption in the deliveries from our suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and equipment or ancillary services could adversely
−Removed: affect our ability to meet our commitments to customers, adversely impact our operations, increase our operating costs and result in increases in rig downtime and delays in the repair and maintenance of our fleet.
+Added: Some parts and equipment require long lead times to obtain, and an unplanned failure or other need to replace any such parts and equipment may result in a longer than usual time to obtain them or require us to pay higher costs to obtain them on an expedited basis.
+Added: A disruption in the deliveries from our suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and equipment or ancillary services could adversely affect our ability to meet our commitments to customers, adversely impact our operations, increase our operating costs and result in increases in rig downtime and delays in the repair and maintenance of our fleet.
As part of our business strategies, We may pursue opportunities to strengthen and broaden our business that include acquisitions of businesses or drilling rigs, mergers or joint ventures or other investments, and such transactions would present various risks and uncertainties.
2 unchanged sentences
These transactions involve various risks, including among others, (i) difficulties related to integrating or managing applicable parts of an acquired business or joint venture and unanticipated changes in customer and other third-party relationships subsequent to closing, (ii) diversion of management's attention from day-to-day operations, (iii) failure to realize anticipated benefits, such as cost savings, revenue enhancements or strengthening or broadening our business, (iv) potentially substantial transaction costs associated with acquisitions, joint ventures or investments if we or a transaction counterparty seeks to exit or terminate an interest in the joint venture or investment, and (v) potential accounting impairment or actual diminution or loss of value of our investment if future market, business or other conditions ultimately differ from our assumptions at the time of such transaction is consummated.
−Removed: Failure to effectively and timely address the transition to renewable or other alternative energy sources could adversely affect our business, results of operations and cash flows.
−Removed: Our long-term success depends on our ability to effectively address the transition to renewable and other alternative energy sources, which may require adapting certain parts or our operations to potentially changing government requirements, customer preferences and to a potentially changing and broader customer base, as well as engaging with existing and potential customers and suppliers to develop or implement solutions designed to reduce or decarbonize oil and gas operations, or to advance renewable and other alternative energy sources.
−Removed: If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our services could be adversely affected.
−Removed: Furthermore, if we fail or are perceived to not effectively implement an energy transition strategy, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.
+Added: Failure to effectively and timely address the transition to renewable or other alternative energy sources, or to respond to other climate related business trends, could adversely affect our business, results of operations and cash flows.
+Added: Our long-term success will be impacted by our ability to effectively address the transition to renewable and other alternative energy sources, and our ability to respond to other climate-related business trends that could adversely impact the long-term demand for oil and natural gas and, ultimately, the demand for our services and products from our services.
+Added: Addressing increased focus on the development of additional alternative energy sources and other climate-related business trends has required and will further require adapting certain parts of our operations to changing government requirements and customer preferences.
+Added: We continue to engage with existing and potential customers and suppliers to develop or implement solutions designed to reduce or decarbonize oil and gas operations, or to advance renewable and other alternative energy sources.
+Added: Nonetheless, as it is not possible at this time to predict the timing, scope and effect of the development of and transition to renewable or other alternative energy sources, any such developments, such as the declining cost of renewable energy generation technologies, could adversely impact the long-term global demand for oil and natural gas and, ultimately, the demand for our services and products from our services.
+Added: If the transition to alternative energy sources or other climate-related trends change faster than anticipated or develop in a manner that we do not anticipate, our business, results of operations and cash flows could be adversely affected.
+Added: If we do not or are perceived to not effectively implement a strategy that incorporates alternative energy sources, or if investors or financial institutions shift funding away from companies in fossil fuel-related industries, our access to capital or the market for our securities could be negatively impacted.
Our aspirations, goals, commitment targets and initiatives related to sustainability, including emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks.
−Removed: We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our commitment target to reduce our greenhouse gas emissions.
+Added: We have developed, and will continue to develop and set, goals, targets, and other objectives related to sustainability matters, including our commitment target to reduce greenhouse gas emissions intensity.
Statements related to these goals, commitment targets and objectives reflect our current intentions and do not constitute a guarantee that they will be achieved.
7 unchanged sentences
At December 31, 2022 and 2021, our total debt was $7.35 billion and $7.17 billion, respectively, of which $2.19 billion and $2.30 billion, respectively, was secured.
−Removed: We have a bank credit agreement, as amended, that established a $1.33 billion secured revolving credit facility (the “Secured Credit Facility”), which is currently undrawn, the borrowings under which would be secured.
+Added: We have a bank credit agreement (as amended, the “Secured Credit Facility”), which is currently undrawn, the borrowings under which would be secured.
This substantial level of debt and other obligations could have significant adverse consequences on our business and future prospects, including the following:
2 unchanged sentences
◾ we could become more vulnerable to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness, some of which bears interest at variable rates;
−Removed: ◾ we may be unable to meet financial ratios in the agreements governing certain of our debt and finance lease or satisfy certain other covenants and conditions included in our debt agreements, which could result in our inability to meet requirements for borrowings under our credit agreement or a default under these agreements, impose restrictions with respect to our access to certain of our capital, and trigger cross default provisions in our other debt instruments;
+Added: ◾ we may be unable to meet financial ratios in the agreements governing certain of our debt facilities and finance lease or satisfy certain other covenants and conditions included in our debt agreements, which could result in our inability to meet requirements for borrowings under our credit agreement or a default under these agreements, impose restrictions with respect to our access to certain of our capital, and trigger cross default provisions in our other debt instruments;
◾ if we default under the terms of our secured financing arrangements, the secured debtholders may, among other things, foreclose on the collateral securing the debt, including the applicable drilling units;
−Removed: ◾ we may be unable to obtain new investment or financing given recent environmental, social and governance influenced trends among many financial intermediaries, investors and other capital markets participants in reducing, or ceasing, lending to, or investing in, companies that operate in industries with higher perceived environmental exposure;
+Added: ◾ we may be unable to obtain new investment or financing given recent ESG-influenced trends among many financial intermediaries, investors and other capital markets participants in reducing, or ceasing, lending to, or investing in, companies that operate in industries with higher perceived environmental exposure;
◾ we may be less able to take advantage of significant business opportunities and to react to changes in market or industry conditions than our less levered competitors.
6 unchanged sentences
◾ less favorable terms and conditions on any refinancing arrangements, debt issuances or bank credit agreements, some of which could require collateral and restrict, among other things, our ability to pay distributions or repurchase shares;
−Removed: ◾ increases to certain fees under our Secured Credit Facility and interest rates under indentures governing certain of our senior notes, which in the case of the 3.80% senior notes due October 2022 and the 7.35% senior notes due December 2041, have reached the maximum rate increase of 2 percent pursuant to the related indentures due to the downgrades of certain credit rating agencies;
+Added: ◾ increases to certain fees under our Secured Credit Facility and the interest rate under the indenture governing the 7.35% senior notes due December 2041, which has reached the maximum rate increase of 2 percent pursuant to the indenture due to the downgrades of certain credit rating agencies;
◾ reduced willingness of current and prospective customers, suppliers and creditors to transact business with us;
9 unchanged sentences
These potential developments, or market perceptions concerning these and related issues, could adversely affect our financial position, results of operations or cash flows.
−Removed: In addition, turmoil and hostilities in the Middle East, North Africa and other geographic areas and countries present incremental risk.
+Added: In addition, turmoil and hostilities in the Middle East, Ukraine, North Africa and other geographic areas and countries present incremental risk.
An extended period of negative outlook for the world economy could further reduce the overall demand for oil and natural gas and for our services.
5 unchanged sentences
Offshore drilling in certain areas has been curtailed and, in certain cases, prohibited because of environmental or safety concerns.
−Removed: In addition, compliance with environmental and safety laws, regulations and standards, where applicable, may require us to make significant capital expenditures, such as the installation of costly equipment or
−Removed: implementation of operational changes, and may affect the resale values or useful lives of our rigs.
+Added: In addition, compliance with environmental and safety laws, regulations and standards, where applicable, may require us to make significant capital expenditures, such as the installation of costly equipment or implementation of operational changes, and may affect the resale values or useful lives of our rigs.
We may also incur additional costs in order to comply with other existing and future regulatory obligations or industry standards, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and maintenance of insurance coverage or other financial assurance of our ability to address pollution incidents.
1 unchanged sentence
federal agencies for drilling in the U.S.
−Removed: Gulf of Mexico that have caused, and may in the future cause, operators to have difficulties obtaining drilling permits in the U.S.
Gulf of Mexico.
+Added: These requirements have caused increased compliance costs and may in the future increase the risk of environmental or safety enforcement cases and litigation and cause operators to have difficulties obtaining drilling permits in the U.S.
+Added: Gulf of Mexico.
In addition, the oil and gas industry has adopted equipment and operating standards, such as the American Petroleum Institute Standard 53, related to the installation and testing of well control equipment.
16 unchanged sentences
The application of these requirements or the adoption of new requirements or measures could have an adverse effect on our financial position, results of operations or cash flows.
−Removed: Regulatory and various other risks, including litigation, associated with greenhouse gases and climate change could have an adverse impact on our business and demand for our services.
+Added: Regulatory and various other risks, including litigation, associated with greenhouse gases, other emissions and climate change could have an adverse impact on our business and demand for our services.
Scientific studies have suggested that emissions of certain gases, including greenhouse gases, such as carbon dioxide and methane, contribute to warming of the earth’s atmosphere and other climatic changes.
−Removed: In response to such studies, the issue of climate change and the effect of greenhouse gas emissions, in particular emissions from the fossil fuel industry, has attracted considerable attention worldwide.
+Added: In response to such studies, the issue of climate change and the effect of greenhouse gas emissions, in particular emissions from the fossil fuel industry, has attracted and continues to attract considerable political and social attention worldwide.
The attention to climate change has led, and we expect it to continue to lead, to additional regulations designed to reduce greenhouse gas emissions domestically and internationally.
−Removed: Such attention could also result in other adverse impacts for the oil and gas industry, including further restrictions or bans imposed by lawmakers, lawsuits by governments or third-parties seeking recoveries for damages resulting from the combustion of fuels that may contribute to climate change effects, or reduced interest from investors if they elect in the future to shift some or all of their investments to non-fossil fuel related sectors.
+Added: In August 2022, for example, the U.S.
+Added: enacted the Inflation Reduction Act of 2022, which contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
+Added: Such attention could also result in other adverse impacts for the oil and gas industry, including further restrictions or bans
+Added: imposed by lawmakers, lawsuits by governments or third-parties seeking recoveries for damages resulting from the combustion of fuels that may contribute to climate change effects, decreased demand for goods or services that produce significant greenhouse gas emissions, or reduced interest from investors if they elect in the future to shift some or all of their investments to non-fossil fuel related sectors.
To the extent financial markets view climate change and greenhouse emissions as a financial risk, this could negatively impact our cost of or access to capital.
5 unchanged sentences
Governmental and other entities in various U.S.
−Removed: states, such as California and New York, have filed lawsuits against coal, gas oil and
−Removed: petroleum companies.
+Added: states, such as California and New York, have filed lawsuits against coal, gas oil and petroleum companies.
These suits allege damages as a result of climate change, and the plaintiffs are seeking unspecified damages and abatement under various tort theories.
2 unchanged sentences
Though we are not currently a party to any such lawsuit, these suits present a high degree of uncertainty regarding the extent to which energy companies, including offshore drillers, face an increased risk of liability stemming from climate change, which risk would also adversely impact the oil and gas industry and impact demand for our services.
+Added: Any restrictions on oil and natural gas operations on the U.S.
+Added: Outer Continental Shelf (“OCS”) could have an adverse impact on our business and demand for our services.
+Added: Department of the Interior (“DOI”) administers the submerged lands, subsoil, and seabed, lying between the seaward extent of the states’ jurisdiction and the seaward extent of federal jurisdiction, and the U.S.
+Added: government has the power to limit oil and gas activities on this area, known as the OCS.
+Added: Under the Outer Continental Shelf Lands Act, as amended, the U.S.
+Added: Bureau of Ocean Energy management (“BOEM”) within the DOI must prepare and maintain forward-looking five-year plans—referred to as national programs or five-year programs—to schedule proposed oil and gas lease sales on the OCS.
+Added: On July 1, 2022, BOEM announced the availability of the Proposed Program for the 2023-2028 timeframe for public comments.
+Added: The Proposed Program includes no more than ten potential lease sales in the U.S.
+Added: Gulf of Mexico.
+Added: Inclusion of an area in the Proposed Program is not a final indication that it will be included in the approved 2023-2028 National OCS Program or offered in a lease sale.
+Added: In addition, the U.S.
+Added: previously placed a moratorium on new oil and natural gas leases on federal lands and waters, including the federal OCS.
+Added: Future actions taken by the U.S.
+Added: to limit the availability of new oil and gas leases on the OSC would adversely impact the offshore oil and gas industry and impact demand for our services.
The global nature of our operations involves additional risks.
14 unchanged sentences
dollars and transfer funds out of a local jurisdiction.
−Removed: contract drilling operations are subject to various laws and regulations in certain countries in which we operate, including laws and regulations relating to the import and export, equipment and operation of drilling units, currency conversions and repatriation, oil and gas exploration and development, taxation and social contributions of offshore earnings and earnings of expatriate personnel.
+Added: contract drilling operations are subject to various laws and regulations related to economic and trade sanctions in certain countries in which we operate, including laws and regulations relating to the import and export, equipment and operation of drilling units, currency conversions and repatriation, oil and gas exploration and development, taxation and social contributions of offshore earnings and earnings of expatriate personnel.
We are also subject to the U.S.
10 unchanged sentences
The shipment of goods, services and technology across international borders subjects us to extensive trade laws and regulations.
−Removed: Our import and export activities are governed by unique customs laws and regulations in each of the countries where we operate.
+Added: Our import and export activities are governed by unique customs and export control laws and regulations in each of the countries where we operate.
Moreover, many countries, including the U.S., control the import and export of certain goods, services and technology and impose related import and export recordkeeping and reporting obligations.
Governments also may impose economic sanctions against certain countries, persons and other entities that may restrict or prohibit transactions involving such countries, persons and entities, and we are also subject to the U.S.
−Removed: anti-boycott law.
+Added: anti-boycott laws.
The laws and regulations concerning import and export activity, recordkeeping and reporting, import and export control and economic sanctions are complex and constantly changing.
27 unchanged sentences
We are also subject to a number of significant tax disputes.
−Removed: We cannot predict the outcome of these investigations and cases or the potential costs to resolve them.
+Added: We cannot predict the outcome of these investigations and cases or the potential costs
+Added: to resolve them.
Insurance may not be applicable or sufficient in all cases, insurers may not remain solvent and policies may not be located.
17 unchanged sentences
If such a cyber-incident were to occur, it could have a material adverse effect on our business or on our financial position, results of operations or cash flows.
−Removed: In addition, laws and regulations governing data privacy and the unauthorized disclosure of personal data and confidential information, including the European Union General Data Protection Regulation, the Data Protection Law, as revised, of the Cayman Islands, the General Data Protection Law of Brazil and the California Consumer Privacy Act, pose increasingly complex compliance challenges and potential to elevate our costs.
−Removed: Any failure by us to comply with these laws and regulations, including as a result of a security or privacy
−Removed: breach, could result in significant penalties, litigation and liabilities for us.
+Added: In addition, governing data privacy and the unauthorized disclosure of personal data and confidential information pose increasingly complex compliance challenges and potential to elevate our costs under various laws and regulations, including (a) the European Union General Data Protection Regulation, the Data Protection Act, as revised, of the Cayman Islands, (b) the General Data Protection Law of Brazil and (c) the California Consumer Privacy Act, as well as (d) the amended Swiss Data Protection Act, which will enter into force in September 2023,.
+Added: Any failure by us to comply with these laws and regulations, including as a result of a security or privacy breach, could result in significant penalties, litigation and liabilities for us.
Additionally, if we acquire a company that has violated or is not in compliance with applicable data protection laws, we may incur significant liabilities and penalties as a result.
14 unchanged sentences
Respective countries, including Switzerland, have adopted various measures into their own tax laws.
−Removed: In addition, the EU has issued Anti-Tax Avoidance Directives and proposed directives that required or require member states to adopt specific tax reform measures, some of which relate to a 15 percent minimum tax.
−Removed: Other tax jurisdictions in which we operate may consider implementing similar measures.
+Added: In addition, the European Union has issued Anti-Tax Avoidance Directives and proposed directives that required or require member states to adopt specific tax reform measures, some of which relate to a 15 percent minimum tax.
+Added: Other tax jurisdictions in which we operate have expressed an intent to implement similar measures.
Any material change to tax laws, treaties, regulations or policies, their interpretation or application, or the adoption of new interpretations of existing laws and rulings, in any of the jurisdictions in which we operate, are incorporated or resident, could result in a higher effective tax rate on our worldwide earnings and such change could have a significant adverse effect on our financial position, results of operations or cash flows.
12 unchanged sentences
The determination of the aforementioned, among other things, involves considerable uncertainty.
−Removed: Internal Revenue Service (the “IRS”) were to disagree, then we could be subject to additional U.S.
+Added: Internal Revenue Service were to disagree, then we could be subject to additional U.S.
corporate income and branch profits taxes on the portion of our earnings effectively connected to such U.S.
2 unchanged sentences
If this occurs, our effective tax rate on worldwide earnings for that period could increase substantially, we could be subject to assessments in previously filed returns that remain open to audit and our earnings and cash flows from operations for that period could be adversely affected.
−Removed: tax authorities could treat us as a passive foreign investment company, which would have adverse U.S.
−Removed: federal income tax consequences to U.S.
−Removed: shareholders.
−Removed: A foreign corporation will be treated as a passive foreign investment company (“PFIC”) for U.S.
−Removed: federal income tax purposes if either (1) at least 75 percent of its gross income for any taxable year consists of certain types of passive income or (2) at least 50 percent of the average value of the corporation's assets produce or are held for the production of those types of passive income.
−Removed: For purposes of these tests, passive income includes dividends, interest and gains from the sale or exchange of investment property and certain rents and royalties, but does not include income derived from performing services.
−Removed: We believe that we have not been and will not be a PFIC with respect to any taxable year.
−Removed: Our income from offshore contract drilling services should be treated as services income for purposes of determining whether
−Removed: we are a PFIC.
−Removed: Accordingly, we believe that our income from our offshore contract drilling services should not constitute passive income, and the assets that we own and operate in connection with the production of that income should not constitute passive assets.
−Removed: There is significant legal authority supporting this position, including statutory provisions, legislative history, case law and IRS pronouncements concerning the characterization, for other tax purposes, of income derived from services where a substantial component of such income is attributable to the value of the property or equipment used in connection with providing such services.
−Removed: However, a prior case and an IRS pronouncement that relies on such case characterize income from time chartering of vessels as rental income rather than services income for other tax purposes.
−Removed: The IRS has subsequently formally announced that it does not agree with the decision in that case.
−Removed: Moreover, we believe that the terms of the time charters in the prior case differ in material respects from the terms of our drilling contracts with customers.
−Removed: However, no assurance can be given that the IRS or a court will accept our position, and there is a risk that the IRS or a court could determine that we are a PFIC.
−Removed: If we were treated as a PFIC for any taxable year, our U.S.
−Removed: shareholders would face adverse U.S.
−Removed: tax consequences.
−Removed: Under the PFIC rules, unless a shareholder makes certain elections available under the Internal Revenue Code of 1986, as amended, which elections could themselves have adverse consequences for the shareholder, the shareholder could be required to pay U.S.
−Removed: federal income tax at the highest applicable income tax rates on ordinary income upon the receipt of excess distributions, as defined for U.S.
−Removed: tax purposes, and upon any gain from the disposition of our shares, plus interest on such amounts, as if such excess distribution or gain had been recognized ratably over the shareholder’s holding period of our shares.
−Removed: Additionally, under applicable statutory provisions, the preferential tax rate on qualified dividend income, which applies to dividends paid to non-corporate shareholders, does not apply to dividends paid by a foreign corporation if the foreign corporation is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year.
Risks related to our jurisdiction of organization and governing documents
2 unchanged sentences
The authorized share capital approved by our shareholders at the May 2022 annual general meeting will expire on May 12, 2024.
−Removed: Our currently available authorized share capital is limited to approximately 22 percent of our issued share capital as of February 14, 2022.
+Added: Our currently available authorized share capital is approximately 13.5 percent of our issued share capital as of February 14, 2023.
Accordingly, shareholders at our annual general meeting in May 2023 may be requested to approve a renewal and an increase in authorized share capital.
6 unchanged sentences
Any recognized loss associated with such a non-cash impairment could result in our net assets no longer covering our statutory share capital and statutory capital reserves.
−Removed: Under Swiss law, if our net assets cover less than 50 percent of our statutory share capital and statutory capital reserves, the board of directors must convene a general meeting of shareholders and propose measures to remedy such a capital loss.
+Added: Under Swiss law, if our net assets cover less than 50 percent of our statutory share capital and the non-distributable part of the statutory capital and profit reserves, the board of directors must take appropriate measures or, to the extent such measures fall within the competence of the general meeting of shareholders, convene a general meeting of shareholders, and propose measures to remedy such a capital loss.
Appropriate measures depend on the relevant circumstances and the magnitude of the recognized loss and may include seeking shareholder approval for offsetting the aggregate loss, or a portion thereof, with our statutory capital reserves, including qualifying additional paid-in capital otherwise available for distributions to shareholders, or raising new equity.
6 unchanged sentences
At our 2009 annual general meeting, our shareholders approved the repurchase of up to CHF 3.50 billion of our shares for cancellation under the share repurchase program.
−Removed: If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase shares via a “virtual second trading line” from market players, such as banks and institutional investors, who are generally entitled to receive a full refund of the Swiss withholding tax.
+Added: If we repurchase shares, we expect to use an alternative procedure pursuant to which we repurchase shares via a “virtual second trading line” from market players, such as banks and
+Added: institutional investors, who are generally entitled to receive a full refund of the Swiss withholding tax.
The use of such “virtual second trading line” with respect to share repurchase programs is subject to the approval of the competent Swiss tax and other authorities.
−Removed: We may not be
−Removed: able to repurchase as many shares as we would like to repurchase for purposes of capital reduction on the “virtual second trading line” without subjecting the selling shareholders to Swiss withholding taxes.
+Added: We may not be able to repurchase as many shares as we would like to repurchase for purposes of capital reduction on the “virtual second trading line” without subjecting the selling shareholders to Swiss withholding taxes.
We are subject to anti-takeover provisions.
13 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.