Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

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, 2024		December 31, 2023
Deferred tax assets
United States:
Net operating loss carry forwards	$	65,686	$	2,338
Excess of net tax basis over remaining book basis	14,418		18,527
Disallowed interest deduction carryforwards	66,632		—
Tax credits carryover	2,606		—
Deferred pension plan amounts	1,065		356
Accrued expenses not currently deductible	21,208		6,613
Unfavorable contract value	936		—
Other	3,066		—
Non-United States:
Net operating loss carry forwards	1,683,210		1,407,964
Excess of net tax basis over remaining book basis	456,302		305,840
Tax credits carryover	341		15,274
Transition attribute	959,985		956,187
Disallowed interest deduction carryforwards	30,427		30,982
Unfavorable contract value	1,858		3,081
Accrued expenses not currently deductible	8,701		—
Other	1,952		1,669
Deferred tax assets	3,318,393		2,748,831
Less: valuation allowance	(2,964,740)		(2,512,571)
Net deferred tax assets	$	353,653	$	236,260
Deferred tax liabilities
United States:
Excess of net book basis over remaining tax basis	$	—	$	—
Favorable contract value	—		—
Deferred revenue	(7,218)		(11,423)
Other	(3,019)		(1,809)
Non-United States:
Excess of net book basis over remaining tax basis	—		(10,137)
Favorable contract value	—		(1,573)
Other	(4,255)		(4,495)
Deferred tax liabilities	(14,492)		(29,437)
Net deferred tax assets (liabilities)	$	339,161	$	206,823

Income (loss) before income taxes consists of the following:

	Year Ended		Year Ended		Year Ended
	December 31, 2024		December 31, 2023		December 31, 2022
United States	$	51,948	$	17,619	$	(43,381)
Non-United States	440,386		494,624		234,882
Total	$	492,334	$	512,243	$	191,501

Income tax provision (benefit) consists of the following:

	Year Ended		Year Ended		Year Ended
	December 31, 2024		December 31, 2023		December 31, 2022
Current- United States	$	9,061	$	2,940	$	1,058
Current- Non-United States	77,567		125,494		47,123
Deferred- United States	2,559		3,703		(2,886)
Deferred- Non-United States	(45,206)		(101,796)		(22,742)
Total	$	43,981	$	30,341	$	22,553

The following is a reconciliation of our reserve for uncertain tax positions, excluding interest and penalties:

	Year Ended		Year Ended		Year Ended
	December 31, 2024		December 31, 2023		December 31, 2022
Gross balance at beginning of period	$	134,934	$	132,979	$	63,443
Additions based on tax positions related to current year	1,439		25,363		1,296
Additions for tax positions of prior years	41,961		10,087		69,163
Reductions for tax positions of prior years	(20,960)		(29,113)		(687)
Expiration of statutes	(310)		—		(236)
Tax settlements	(42,296)		(4,382)		—
Gross balance at end of period	114,768		134,934		132,979
Related tax benefits	(3,705)		(78)		(384)
Net reserve at end of period	$	111,063	$	134,856	$	132,595

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, 2024		December 31, 2023
Reserve for uncertain tax positions, excluding interest and penalties	$	111,063	$	134,856
Interest and penalties	86,804		67,455
Reserve for uncertain tax positions, including interest and penalties	$	197,867	$	202,311

At December 31, 2024 and 2023, the reserves for uncertain tax positions totaled $197.9 million (net of related tax benefits of $3.7 million) and $202.3 million (net of related tax benefits of $0.1 million), respectively. If a portion or all of the December 31, 2024 and 2023, reserves listed above are not realized, the provision for income taxes could be reduced by up to $196.0 million and $188.0 million, respectively.

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 or the expiration of statutes of limitation.

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 expense of $5.9 million, $24.1 million, and $2.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

During the year ended December 31, 2024, our tax provision included a net tax benefit of $123.6 million related to 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 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.

During the year ended December 31, 2022, our tax provision included tax benefits of $42.1 million related to releases of valuation allowances in Guyana and Luxembourg, $1.3 million related primarily to other deferred tax adjustments, and $6.6 million related to a reduction in legacy Maersk tax contingencies primarily due to favorable foreign exchange movements. Such tax benefits were offset by tax expenses of $2.3 million related to the sale of the Remedy Rigs, $10.8 million related to contract fair value amortization, and various recurring items comprised of Guyana excess withholding tax on gross revenue of $34.7 million and annual current and deferred tax expense accruals of $24.9 million primarily in Luxembourg, Switzerland, US, Norway, and Ghana.

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 $123.6 million 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 2031. 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 Egypt, Ghana, Guyana, Mexico, and the United Kingdom. We are no longer subject to US Federal income tax examinations for years before 2021 and non-US income tax examinations for years before 2000.

In Denmark, prior to 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. 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 A.P. Møller Holding A/S 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 A.P. Møller Holding A/S or to any previous joint taxation group administration company of previously received joint taxation contributions. Since the Merger and through December 31, 2024, Noble has recognized a benefit for tax contribution payments of approximately $21.1 million from A.P. Møller Holding A/S and an expense for a tax contribution repayment of $4.0 million to A.P. Møller Holding A/S under this arrangement. For the years ended December 31, 2024 and 2023, 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 19%. 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 2024 is shown below:

	Year Ended		Year Ended		Year Ended
	December 31, 2024		December 31, 2023		December 31, 2022
Effect of:
Tax rates which are different than UK or Cayman rates	37.3	%	37.6	%	34.9	%
Tax impact of valuation allowance	(25.0)	%	(36.1)	%	(22.0)	%
Resolution of (reserve for) tax authority audits	(3.4)	%	4.4	%	(1.1)	%
Total	8.9	%	5.9	%	11.8	%

At December 31, 2024 and 2023, 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.