The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, as well as the Consolidated Financial Statements and related notes included in our 2025 10-K. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" in Part I, Item 1A. of our 2025 10-K and "Forward-Looking Statements" in this Quarterly Report on Form 10-Q. Our Business We are an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drilling rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities. As of June 30, 2026, we owned a total of 15 drilling rigs. In addition to our owned assets, as of June 30, 2026, we managed two 7th generation drillships owned by Sonangol EP. Significant Developments Refinancing of Senior Notes On June 30, 2026, Seadrill Finance issued $700 million in aggregate principal amount of 6.750% Senior Notes due 2034 in an offering conducted pursuant to Rule 144A and Regulation S under the Securities Act. The 2034 Notes are fully and unconditionally guaranteed, jointly and severally, by the Company and certain subsidiaries of the Company that are guarantors under the Credit Agreement, and in the future by certain subsidiaries of the Company that become borrowers or guarantors under the Credit Agreement or any other syndicated credit facility or capital markets debt in an aggregate principal amount in excess of a certain amount. On June 30, 2026, in connection with the issuance of the 2034 Notes, Seadrill Finance satisfied and discharged the 2030 Notes Indenture in accordance with its terms. Refer to "Liquidity and Capital Resources - Borrowing Activities" and Note 9 - "Debt" for additional information. Revolving Credit Facility Amendment On June 16, 2026, Seadrill Limited, along with its subsidiary, Seadrill Finance, entered into the Amendment to the Credit Agreement to, among other things, increase the commitments for revolving borrowings from $225 million to $300 million and extend the maturity date from 2028 to 2031. The Amendment became effective on June 30, 2026, and the commitments thereunder became effective and available to be borrowed, subject to customary borrowing conditions. Refer to "Liquidity and Capital Resources - Capital allocation framework and Share repurchase program" and Note 9 - "Debt" for additional information. Share Repurchase Program On June 22, 2026, the Company's Board of Directors authorized an extension of the Share repurchase program to run through December 31, 2026. During the three and six months ended June 30, 2026, the Company repurchased an aggregate of 511,078 Shares with a weighted average Share price of $38.66, amounting to approximately $20 million. Refer to "Liquidity and Capital Resources - Capital allocation framework and Share repurchase program" and Note 12 - "Common shares" for additional information about the Share repurchase program. Oil price volatility The price of oil has experienced increased volatility and has risen in response to the ongoing conflicts in the Middle East, including the current conflict in Iran, which started on February 28, 2026, and the unprecedented blockades of the Strait of Hormuz resulting therefrom. The Brent oil price was $71 per barrel on February 27, 2026 and increased to an average price of approximately $103 per barrel for the second quarter of 2026. We continue to evaluate and monitor the impacts of the recent oil price volatility and the ongoing conflicts in the Middle East on our business and operations; however, it is not possible to predict the long-term impact, if any, of the disruptions to commodity prices, global energy supplies, energy markets and economic conditions, on our business and operations. U.S. global trade policy changes Ongoing and recently proposed changes to U.S. global trade policy, along with potential international retaliatory measures, have continued to cause high volatility in global markets and uncertainty around short- and long-term economic impacts in the U.S., including concerns over inflation, recession and slowing growth. We continue to evaluate and monitor the potential impacts of these changes and measures, including the imposition of tariffs and ongoing legal challenges to such tariffs, on our business and operations; however, it is not possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our business and operations. 15 Contract Backlog Contract backlog includes all firm contracts at the contractual operating dayrate multiplied by the number of days remaining in the firm contract period. For contracts which include a market indexed rate mechanism, we utilize the current applicable dayrate multiplied by the number of days remaining in the firm contract period. Contract backlog includes management contract revenues and leasing revenues from bareboat charter arrangements, denoted as "other" in the tables below. Contract backlog excludes revenues for mobilization, demobilization and contract preparation or other incentive provisions and excludes backlog relating to non-consolidated entities. The contract backlog for our fleet was as follows as of the dates specified: (In $ millions) June 30, 2026 December 31, 2025 Drilling contracts 2,628 2,095 Other 306 285 Total contract backlog 2,934 2,380 Our contract backlog includes only firm commitments represented by signed drilling contracts. The full contractual operating dayrate may differ from the actual dayrate we ultimately receive. For example, an alternative contractual dayrate, such as a waiting‑on‑weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. The contractual operating dayrate may also differ from the actual dayrate we ultimately receive because of several other factors, including rig downtime or suspension of operations. In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period. We estimate the June 30, 2026 contract backlog to be realized over the following periods: (In $ millions) Year ending December 31, Contract backlog Total 2026 (1) 2027 2028 Thereafter Drilling contracts 2,628 625 1,074 493 436 Other 306 138 106 62 — Total 2,934 763 1,180 555 436 (1) Remainder of 2026. The actual amount of revenues earned and the actual periods during which revenues are earned will differ from the amounts and periods shown in the tables above due to various factors, including shipyard and maintenance, surveys, upgrades and regulatory projects, unplanned downtime and other factors that result in a lower applicable dayrate than the full contractual operating dayrate. Additional factors that could affect the amount and timing of actual revenue to be recognized include customer liquidity issues and contract terminations, which are available to our customers under certain circumstances. Business Environment The table below shows the average oil price for the six months ended June 30, 2026 and year ended December 31, 2025. The Brent oil price as of August 6, 2026 was $82/bbl. June 30, 2026 December 31, 2025 Average Brent oil price ($/bbl) 88 70 Source: Bloomberg In recent years, oil prices have generally remained at levels that support offshore exploration and development activity, where global rig demand has been steady. This level of demand was sustained by the combination of commodity prices, heightened focus on energy security, and relative attractiveness of offshore plays with respect to both cost and carbon emissions. Recently, however, the ongoing conflict in Iran and the unprecedented closure of the Strait of Hormuz have caused significant disruption in the normal flow of oil, refined petroleum products, and related commodities, resulting in higher oil prices. The price of Brent oil averaged $88 per barrel during the six months ended June 30, 2026 up from an average of $70 per barrel in 2025, driven primarily by ongoing conflicts in the Middle East that disrupted global oil supply during the first half of 2026. Uncertainty persists in the market, particularly in light of concerns over global economic conditions (including the current conflict in Iran), government trade policies and output increases by the Organization of the Petroleum Exporting Countries and other major international producers. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs and the prices of goods and services required to reactivate or operate rigs. As global tendering activity accelerates, we see signs that point towards a market recovery in 2027. In addition, we believe oil majors are calling for renewed focus on large-scale exploration and investment, and there is also growing consensus that U.S. shale production is plateauing. As a result, with projections of growing oil and gas demand and the lagging energy transition, operators are pivoting back towards deepwater exploration in order to replace reserves and sustain production growth. 16 The table below shows the global number of rigs on contract and marketed utilization for the six months ended June 30, 2026 and year ended December 31, 2025: June 30, 2026 December 31, 2025 Contracted rigs Benign environment floater 107 108 Harsh environment floater 23 21 Harsh environment jackup 27 28 Marketed utilization Benign environment floater 87 % 87 % Harsh environment floater 95 % 90 % Harsh environment jackup 96 % 97 % Source: RigLogix Global benign-environment floaters Marketed utilization and the number of contracted rigs remained relatively consistent in the six months ended June 30, 2026 compared to the year ended December 31, 2025. Global harsh environment units Marketed utilization for harsh environment floaters improved in the six months ended June 30, 2026 compared to the year ended December 31, 2025, whereas utilization for harsh environment jackups remained relatively consistent over the same periods, reflecting continued demand for high-specification assets. 17 Results of operations Results for the three months ended June 30, 2026 and June 30, 2025 The tables included below set out financial information for the three months ended June 30, 2026 and June 30, 2025: Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Operating revenues 449 377 72 19 % Operating expenses (377) (371) (6) 2 % Operating profit 72 6 66 1100 % Interest expense (16) (15) (1) 7 % Financial and non-operating items (15) (4) (11) 275 % Profit/(loss) before income taxes 41 (13) 54 (415) % Income tax expense (12) (29) 17 (59) % Net income/(loss) 29 (42) 71 (169) % 1) Operating revenues Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues, leasing revenues and other revenues. Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Contract revenues (a) 355 288 67 23 % Reimbursable revenues (b) 19 16 3 19 % Management contract revenues 67 65 2 3 % Leasing revenues 8 8 — — % Total operating revenues 449 377 72 19 % a) Contract revenues Contract revenues represent the revenues we earn from contracting our drilling units to customers, primarily on a dayrate basis, and are predominately driven by the average number of rigs under contract during a period, the average dayrates earned and economic utilization achieved by those rigs under contract. We have set out movements in these key indicators of performance in the sections below. i.Average number of rigs on contract We calculate the average number of rigs on contract by dividing the aggregate days our rigs (excluding managed rigs) were on contract during the reporting period by the number of days in that reporting period. The average number of rigs on contract remained consistent at 10 in each of the three months ended June 30, 2026 and 2025; however, there was an increase in the total days on contract resulting in higher contract revenues of $11 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by the West Capella and Sevan Louisiana, with contracts that started in March 2026 in Malaysia and the U.S. Gulf of America, respectively, compared to the three months ended June 30, 2025, during which the rigs were operating for less days. The increase was partially offset by the West Tellus operating for fewer days during the three months ended June 30, 2026, due to contract preparations for its new contract that started in June 2026 in Brazil, compared to being fully contracted during the three months ended June 30, 2025. ii.Average contractual dayrates We calculate the average contractual dayrate by dividing the aggregate contractual dayrates during a reporting period by the aggregate number of days for the reporting period. The average contractual dayrate earned during the three months ended June 30, 2026 was $360 thousand compared to $331 thousand during the three months ended June 30, 2025, resulting in a $24 million increase in contract revenues in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was driven by higher dayrates for the West Jupiter, West Tellus, West Auriga, and West Carina operating in Brazil, and the West Neptune operating in the U.S. Gulf of America during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. These impacts were partially offset by lower dayrates for the West Vela and Sevan Louisiana operating in the U.S. Gulf of America, and the West Polaris operating in Brazil during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. 18 iii.Economic utilization for rigs on contract We define economic utilization as dayrate revenue earned during the period, excluding bonuses, divided by the contractual operating dayrate multiplied by the number of days on contract in the period. If a drilling unit earns its full operating dayrate throughout a reporting period, its economic utilization would be 100%. However, there are many situations that give rise to a dayrate being earned that is less than the contractual operating rate, such as planned downtime for maintenance. In such situations, economic utilization reduces below 100%. The economic utilization for the three months ended June 30, 2026 was 96%, compared to 93% for the three months ended June 30, 2025, resulting in a $8 million increase in contract revenues in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to improved economic utilization on the West Polaris and West Elara during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This was partially offset by downtime on the West Saturn during the three months ended June 30, 2026. iv.Deferred mobilization revenues We receive fees for the mobilization of our rigs, where the associated revenue is recognized ratably over the expected term of the related drilling contract. As a result, we record a contract liability for mobilization fees received, which is amortized ratably to contract revenues as services are rendered over the initial term of the related drilling contract. The amortization of deferred mobilization revenues increased by $9 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily attributable to revenues related to the West Elara recognized during the three months ended June 30, 2026, along with mobilization fees related to West Jupiter and West Capella following the start of their contracts in March 2026. v.Other items Contract revenues include integrated and add-on services. There was an increase in contract revenues of $15 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily attributable to the West Capella, West Saturn, West Vela, West Neptune and Sevan Louisiana earning revenues from integrated and add-on services during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. b) Reimbursable revenues We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel and other services provided at their request in accordance with a drilling contract. We classify such revenues as reimbursable revenues. For the three months ended June 30, 2026 and the three months ended June 30, 2025, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long-term maintenance projects on the Libongos and Quenguela, along with reimbursable revenues related to services provided across various customers. The $3 million increase in the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to additional hired equipment on the Sevan Louisiana during the second quarter of 2026, compared to the second quarter of 2025. 2) Operating expenses Total operating expenses include vessel and rig operating expenses, reimbursable expenses, depreciation of drilling units and equipment, amortization of intangibles, management contract expenses, and selling, general and administrative expenses. Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Vessel and rig operating expenses (a) (215) (180) (35) 19 % Reimbursable expenses (19) (16) (3) 19 % Depreciation and amortization (b) (72) (56) (16) 29 % Management contract expenses (c) (42) (93) 51 (55) % Selling, general and administrative expenses (29) (26) (3) 12 % Total operating expenses (377) (371) (6) 2 % a) Vessel and rig operating expenses Vessel and rig operating expenses represent the costs we incur to operate a drilling unit that is either in operation or stacked. This includes the remuneration of offshore crews, rig supplies, expenses for repair and maintenance, onshore support costs, and the amortization of deferred mobilization costs. Vessel and rig operating expenses are mainly driven by rig activity. On average, we incur higher vessel and rig operating expenses when a rig is operating compared to when it is stacked. For stacked rigs, we incur higher vessel and rig expenses for warm stacked rigs compared to cold stacked rigs. We incur one-time costs for activities such as preservation and severance when we cold stack a rig. We also incur significant costs when re-activating a rig from cold stack, a proportion of which is expensed as incurred. 19 Vessel and rig operating expenses increased by $35 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. There was a $43 million increase in vessel and rig operating expenses primarily related to the West Capella commencing operations in Malaysia in March 2026, along with higher integrated services, repair and maintenance and personnel costs during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This was partially offset by an $8 million decrease in vessel and rig operating expenses during the three months ended June 30, 2026, attributable to the West Tellus preparing for its contract that started in June 2026 in Brazil, compared to operating throughout the three months ended June 30, 2025. b) Depreciation and amortization The $16 million increase in depreciation and amortization for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 is mainly related to long-term maintenance and capital projects across the fleet, and unfavorable contracts recorded as liabilities being fully amortized during 2025. Depreciation of drilling units and equipment Depreciation increased by $12 million in the three months ended June 30, 2026 compared to the three months ended June 30, 2025, mainly attributable to long-term maintenance and capital projects across the fleet, primarily related to the West Neptune, West Vela, West Gemini, West Capella and Sevan Louisiana. Amortization of intangibles Amortization increased by $4 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, mainly attributable to unfavorable contracts recorded as liabilities being fully amortized during 2025 related to the West Tellus, West Jupiter and West Carina. c) Management contract expenses Management contract expenses include costs related to Sonadrill's rigs, Quenguela and Libongos, and the Seadrill rig leased to Sonadrill, the West Gemini. Management contract expenses decreased by $51 million during the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily attributable to estimated damages recognized following the unfavorable court judgment related to fees for arranging the Sonadrill joint venture in the three months ended June 30, 2025, not recurring in the three months ended June 30, 2026. Refer to Note 13 - "Commitments and contingencies - Legal Proceedings - Sonadrill fees claim" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, for additional details. 3) Interest expense Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Interest on debt facilities (a) (14) (13) (1) 8 % Other (2) (2) — — % Total interest expense (16) (15) (1) 7 % a) Interest on debt facilities We incurred interest on our debt facilities as summarized below: Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % $575 million secured bond (12) (12) — — % Unsecured senior convertible bond (2) (1) (1) 100 % Total interest on debt facilities (14) (13) (1) 8 % 4) Financial and non-operating items Three months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Interest income 4 3 1 33 % Equity in earnings of equity method investment (net of tax) 4 6 (2) (33) % Other financial and non-operating items (a) (23) (13) (10) 77 % Total financial and non-operating items (15) (4) (11) 275 % 20 a) Other financial and non-operating items Other financial and non-operating items increased by $10 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to a loss on debt extinguishment of the 2030 Notes, partially offset by a recovery of costs during the three months ended June 30, 2026 and the recognition of value-added tax ("VAT") liabilities during the three months ended June 30, 2025, not recurring in the three months ended June 30, 2026. 5) Income tax expense Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities related to our ownership and operation of drilling units and may vary significantly depending on jurisdictions and contractual arrangements. In most cases, the calculation of taxes is based on net income or deemed income, the latter generally being a function of gross revenue. The $17 million decrease in tax expense during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions and changes in the valuation allowance established for Switzerland in the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Results for the six months ended June 30, 2026 and June 30, 2025 The tables included below set out financial information for the six months ended June 30, 2026 and June 30, 2025: Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Operating revenues 807 712 95 13 % Operating expenses (711) (688) (23) 3 % Operating profit 96 24 72 300 % Interest expense (31) (30) (1) 3 % Financial and non-operating items (8) (6) (2) 33 % Profit/(loss) before income taxes 57 (12) 69 (575) % Income tax expense (35) (44) 9 (20) % Net income/(loss) 22 (56) 78 (139) % 1) Operating revenues Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Contract revenues (a) 632 536 96 18 % Reimbursable revenues 29 31 (2) (6) % Management contract revenues (b) 130 126 4 3 % Leasing revenues 16 16 — — % Other revenues — 3 (3) (100) % Total operating revenues 807 712 95 13 % a) Contract revenues i.Average number of rigs on contract The average number of rigs on contract decreased from 10 in the six months ended June 30, 2025 to nine in the six months ended June 30, 2026. The decrease in total days on contract resulted in lower contract revenues of $3 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by fewer operating days on the West Jupiter and the West Tellus, which were undergoing contract preparation activities during the six months ended June 30, 2026, for contracts that started in March 2026 and June 2026, respectively, compared to being fully contracted during the six months ended June 30, 2025. The decrease was partially offset by the West Neptune and West Polaris, operating throughout the six months ended June 30, 2026 compared to being partially contracted during the six months ended June 30, 2025, along with the West Capella starting its contract in March 2026 compared to the six months ended June 30, 2025, during which the rig was operating for less days. ii.Average contractual dayrates The average contractual dayrate earned during the six months ended June 30, 2026 was $352 thousand compared to $327 thousand during the six months ended June 30, 2025, resulting in a $38 million increase in contract revenues in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was driven by higher dayrates for the West Jupiter, West Auriga, West Tellus and West Carina operating in Brazil, the West Neptune operating in the U.S. Gulf of America, and the West Elara operating in Norway during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These impacts were partially offset by lower dayrates for the West Vela and Sevan Louisiana operating in the U.S. Gulf of America, and the West Capella during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. 21 iii.Economic utilization for rigs on contract The economic utilization for the six months ended June 30, 2026 was 95%, compared to 89% for the six months ended June 30, 2025, resulting in a $38 million increase in contract revenues in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to improved economic utilization on the West Tellus, West Polaris, West Auriga and Sevan Louisiana during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This was partially offset by the impact of lower economic utilization due to increased downtime on the West Saturn and West Carina during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. iv.Deferred mobilization revenues The amortization of deferred mobilization revenues increased by $8 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to revenues related to the West Elara recognized during the six months ended June 30, 2026, along with mobilization fees related to West Jupiter and West Capella following the start of their contracts in March 2026. v.Other items There was an increase in contract revenues of $15 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily attributable to the West Capella, West Saturn, West Vela, West Neptune and Sevan Louisiana earning increased revenues from integrated and add-on services during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. b) Management contract revenues Management contract revenues include revenues related to contracts where we provide management, operational and technical support services and are comprised of revenues from our joint venture, Sonadrill, relating to the Libongos, Quenguela and West Gemini. Management contract revenues increased by $4 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by higher management fees on the Libongos, Quenguela and the West Gemini. Refer to Note 10 - "Related party transactions" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, for additional details. 2) Operating expenses Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Vessel and rig operating expenses (a) (396) (359) (37) 10 % Reimbursable expenses (29) (31) 2 (6) % Depreciation and amortization (b) (143) (111) (32) 29 % Management contract expenses (c) (88) (138) 50 (36) % Selling, general and administrative expenses (54) (49) (5) 10 % Merger and integration related expenses (1) — (1) 100 % Total operating expenses (711) (688) (23) 3 % a) Vessel and rig operating expenses Vessel and rig operating expenses increased by $37 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. There was a $52 million increase primarily related to the West Capella commencing operations in Malaysia in March 2026 and the West Polaris commencing operations in Brazil in February 2025, along with higher integrated services, repair and maintenance and personnel costs during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This was partially offset by a $15 million decrease in vessel and rig operating expenses during the six months ended June 30, 2026, attributable to the West Jupiter and West Tellus preparing for contracts that started in March and June 2026, respectively, compared to operating throughout the six months ended June 30, 2025, along with lower deferred mobilization costs for contracts in Brazil completed during the first quarter of 2026. 22 b) Depreciation and amortization The $32 million increase in depreciation and amortization for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was mainly attributable to capital projects on the West Auriga and West Polaris and unfavorable contracts recorded as liabilities being fully amortized during 2025. Depreciation of drilling units and equipment Depreciation increased by $23 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, mainly attributable to long-term maintenance and capital projects across the fleet, primarily related to the West Neptune, West Vela, West Gemini, West Capella and Sevan Louisiana. Amortization of intangibles Amortization expense increased by $9 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, mainly attributable to unfavorable contracts recorded as liabilities being fully amortized during 2025 related to the West Tellus, West Jupiter and West Carina. c) Management contract expenses Management contract expenses decreased by $50 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily attributable to estimated damages recognized following the unfavorable court judgment related to fees for arranging the Sonadrill joint venture during the six months ended June 30, 2025, not recurring in the six months ended June 30, 2026. Refer to Note 13 - "Commitments and contingencies - Legal Proceedings - Sonadrill fees claim" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, for additional details. 3) Interest expense Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Interest on debt facilities (a) (28) (27) (1) 4 % Other (3) (3) — — % Total interest expense (31) (30) (1) 3 % a) Interest on debt facilities We incurred interest on our debt facilities as summarized below: Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % $575 million secured bond (25) (24) (1) 4 % Unsecured senior convertible bond (3) (3) — — % Total interest on debt facilities (28) (27) (1) 4 % 4) Financial and non-operating items Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Interest income 6 7 (1) (14) % Equity in earnings of equity method investment (net of tax) (a) 8 14 (6) (43) % Other financial and non-operating items (b) (22) (27) 5 (19) % Total financial and non-operating items (8) (6) (2) 33 % a) Equity in earnings of equity method investment (net of tax) The equity in earnings of equity method investment relates to Seadrill's proportion of earnings from Sonadrill. The decrease in earnings of $6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by lower operating dayrates for Libongos and West Gemini, along with the impact of higher management fees for the West Gemini, Libongos and Quenguela in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This was partially offset by an increased dayrate for Quenguela operating in Angola during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. b) Other financial and non-operating items Other financial and non-operating items improved by $5 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, driven by a recovery of costs during the six months ended June 30, 2026, along with the recognition of VAT liabilities and a provision for assets sold during the six months ended June 30, 2025, which did not recur during the six months ended June 30, 2026. This was partially offset by a loss on debt extinguishment of the 2030 Notes recognized during the six months ended June 30, 2026. 23 5) Income tax expense The $9 million decrease in tax expense during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions and changes in valuation allowances established for Switzerland and Brazil. Liquidity and Capital Resources 1) Capital allocation framework and Share repurchase program In July 2023, in connection with the issuance of the 2030 Notes, Seadrill announced capital allocation principles designed to prioritize a conservative capital structure and liquidity position, focused capital investment in its fleet, and returns to shareholders. Within this framework, Seadrill intends to maintain a net leverage target of less than 1.0x under current market conditions, with a maximum through-cycle net leverage target of less than 2.0x. Seadrill also intends to maintain a strong liquidity position to provide resilience even in a downturn scenario by establishing a target minimum cash-on-hand of $250 million. Further, Seadrill intends to evaluate the potential for accretive additions in core asset categories. So long as Seadrill is able to meet its net leverage and liquidity targets on a forward-looking basis, as well as comply with its Revolving Credit Facility covenant requirements, Seadrill would seek to provide a return to our shareholders of at least 50% of Free Cash Flow (defined as cash flows from operating activities minus additions to drilling units and equipment) in the form of Share repurchases or dividends. Seadrill will consider additional returns to shareholders from the proceeds of any asset sales in the absence of identified, accretive opportunities. Dividends and Share repurchases will be authorized and determined by the Board of Directors in its sole discretion and depend upon a number of factors, including those described above, its future prospects, market trend evaluation and such other factors as the Board of Directors may deem relevant. Please see Item 1A. "Risk Factors - Financial and Tax Risks - We may be unable to meet our capital allocation framework goal of returning at least 50% of Free Cash Flow to shareholders through dividends and share repurchases, which could decrease expected returns on an investment in our Shares" in Part I of our 2025 10-K. During the second quarter of 2024, the Company's Board of Directors authorized a $500 million Share repurchase program that would initially run for a period of two years from June 25, 2024, the date of completion for the programs initiated in 2023 ("Share repurchase program"). On June 22, 2026, the Company's Board of Directors authorized an extension of the Share repurchase program to run through December 31, 2026. During the three and six months ended June 30, 2026, the Company repurchased an aggregate of 511,078 Shares with a weighted average Share price of $38.66, amounting to approximately $20 million. During the three and six months ended June 30, 2025, the Company did not repurchase Shares. From commencement of the Share repurchase program through June 30, 2026, the Company repurchased an aggregate of 7,225,330 Shares with a weighted average Share price of $43.18, amounting to approximately $312 million. As of June 30, 2026, approximately $188 million of the $500 million authorized amount remained available under the Share repurchase program. On September 30, 2024 and December 16, 2024, the Company canceled 4,213,349 and 2,500,903 treasury Shares, respectively, repurchased under this program. While the Share repurchase program has a fixed expiration, it may be modified, suspended or discontinued at any time. Shares may be repurchased at any time and from time to time under the program in open market purchases, privately negotiated purchases, block trades, tender offers, accelerated share repurchase transactions or other derivative transactions, through the purchase of call options or the sale of put options, or otherwise, or by any combination of the foregoing. The Company is under no obligation to purchase any Shares in respect of the repurchase program. The manner, timing, pricing and amount of any repurchases may be based upon a number of factors, including market conditions, the Company’s financial position and capital requirements, financial conditions, competing uses for cash, statutory solvency requirements, the restrictions in the Company’s debt agreements and other factors. The Company may continue Share repurchases pursuant to the Share repurchase program at the Board’s discretion. 2) Liquidity Our level of liquidity fluctuates depending on a number of factors. These include, among others, our drilling units being on contract, economic utilization achieved, average contract dayrates, timing of accounts receivable collection, capital expenditures for rig upgrades and reactivation projects and timing of payments for operating costs and other obligations. As of June 30, 2026, Seadrill had available liquidity of $585 million, which consisted of unrestricted cash of $337 million and available borrowings under our Revolving Credit Facility of $248 million. Our cash on hand, available borrowings under the Revolving Credit Facility, and contract and other revenues are expected to generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next 12 months. The table below shows total available liquidity, which consists of unrestricted cash and undrawn Revolving Credit Facility borrowings, as of each date presented. (In $ millions) June 30, 2026 December 31, 2025 Unrestricted cash 337 339 Undrawn Revolving Credit Facility 248 185 Total available liquidity 585 524 24 We have shown our sources and uses of cash by category of cash flows in the table below: Six months ended June 30, (In $ millions, except percentages) 2026 2025 Change Change % Net cash used in operating activities (a) (40) (16) (24) 150 % Net cash used in investing activities (b) (38) (72) 34 (47) % Net cash provided by financing activities (c) 73 — 73 100 % Effect of exchange rate changes on cash — 2 (2) (100) % Change in period (5) (86) 81 (94) % a) Net cash used in operating activities Cash flows from operating activities includes cash receipts from customers, cash paid to employees and suppliers (except for additions to drilling units and equipment), interest and dividends received (except for returns of capital), interest paid, income taxes paid and other operating cash payments and receipts. Net cash used in operating activities during the six months ended June 30, 2026 was $40 million compared to $16 million for the six months ended June 30, 2025. The $24 million increase in net cash used in operating activities in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was mainly driven by the timing of receipts from customers and our related party, Sonadrill, and increased mobilization costs incurred primarily related to the West Tellus, West Jupiter and West Capella. These were partially offset by the impact of improved operating results and reduced disbursements to suppliers. b) Net cash used in investing activities Net cash used in investing activities during the six months ended June 30, 2026 was $38 million compared to $72 million during the six months ended June 30, 2025. The net cash used in investing activities during the six months ended June 30, 2026 represented capital expenditures primarily on the West Tellus, West Jupiter and West Capella and the acquisition of capital spares, compared to capital expenditures mainly on the West Neptune, West Elara and West Auriga and the acquisition of capital spares during the six months ended June 30, 2025. c) Net cash provided by financing activities Net cash provided by financing activities of $73 million during the six months ended June 30, 2026 primarily consisted of proceeds from the issuance of the $700 million aggregate principal amount of the 2034 Notes, partially offset by the redemption of the $575 million aggregate principal amount of the 2030 Notes, the payment of a make-whole premium of $25 million in connection with the redemption of the 2030 Notes, debt issuance cost payments of $8 million and Shares repurchases of $17 million. 3) Borrowing Activities An overview of our debt as of June 30, 2026 is presented in the table below: (In $ millions) Principal Value Debt Issuance Costs Carrying Value Maturity Date Unsecured $700 million senior bond 700 (13) 687 July 2034 Senior convertible bond 50 — 50 August 2028 Total debt 750 (13) 737 Revolving Credit Facility In July 2023, Seadrill Limited, along with its subsidiary, Seadrill Finance, entered into the Credit Agreement which established the Revolving Credit Facility. Seadrill Finance is the borrower under the Credit Agreement, and the facility is secured by liens on substantially all of the Company's rigs and related assets, other than non-core assets. Seadrill Limited, and certain of its subsidiaries that own collateral or are otherwise material, guarantee the obligations under the Credit Agreement. On April 3, 2026, Seadrill Limited, along with its subsidiary, Seadrill Finance, entered into Amendment No. 1 to Senior Secured Revolving Credit Agreement to increase the letter of credit sub-limit from $50 million to $100 million. On June 16, 2026, Seadrill Limited, along with its subsidiary, Seadrill Finance, entered into the Amendment. The Amendment, among other things, (i) increased the commitments for revolving borrowings from $225 million to $300 million, (ii) extended the stated maturity date from 2028 to 2031, (iii) removed certain immaterial subsidiaries and stacked vessels as guarantors and collateral, respectively, under the Credit Agreement, in accordance with the terms of the Amendment, (iv) modified the commitment fees payable under the Credit Agreement, (v) amended certain restrictive covenants to provide more operational and financial flexibility for the Company and its subsidiaries and (vi) provided for the resignation of JPMorgan SE as predecessor administrative agent and for the appointment of JPMorgan Chase Bank, N.A. as successor administrative agent. The Amendment became effective on June 30, 2026, and the commitments thereunder became effective and available to be borrowed, subject to customary borrowing conditions. The Revolving Credit Facility, at Seadrill Finance’s option, bears interest at a rate of either (i) the applicable Term Secured Overnight Financing Rate (“SOFR”) Rate (as defined in the Credit Agreement) or (ii) the Daily Simple SOFR (as defined in the Credit Agreement), in each case plus an applicable margin. For both the Term SOFR Rate and Daily Simple SOFR, the applicable margin ranges from 2.50% to 3.50% per annum based on Seadrill's credit ratings. As of June 30, 2026, the applicable margin was 2.50% per annum. The Revolving Credit Facility also incurs a commitment fee on undrawn amounts at a rate of 0.50% per annum. No funded borrowings have been made under the Revolving Credit Facility to date. 25 During the third quarter of 2025, the Company issued a NOK403 million guarantee ($41 million as of June 30, 2026) under the Revolving Credit Facility related to the SFL Hercules Ltd. claim. As of June 30, 2026, outstanding letters of credit and bank guarantees under the Revolving Credit Facility totaled approximately $52 million, which reduced the Company’s available capacity under the Revolving Credit Facility to $248 million. For further details, please refer to Note 9 - "Debt" and Note 13 – "Commitments and contingencies" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q. Senior Notes On June 30, 2026, Seadrill Finance issued $700 million in aggregate principal amount of 6.750% Senior Notes due 2034 in an offering conducted pursuant to Rule 144A and Regulation S under the Securities Act. The 2034 Notes are fully and unconditionally guaranteed, jointly and severally, by the Company and certain subsidiaries of the Company that are guarantors under the Credit Agreement, and in the future by certain subsidiaries of the Company that become borrowers or guarantors under the Credit Agreement or any other syndicated credit facility or capital markets debt in an aggregate principal amount in excess of a certain amount. On June 30, 2026, in connection with the issuance of the 2034 Notes, Seadrill Finance satisfied and discharged the 2030 Notes Indenture in accordance with its terms. Bilateral Facility Seadrill Rig Holding Company Limited, a subsidiary of Seadrill, has an uncommitted bilateral facility with DNB Bank ASA (the “Bilateral Facility”), which permits the issuance of letters of credit and bank guarantees for our account. The Bilateral Facility provides up to $25 million of capacity, where reimbursement obligations under the Bilateral Facility are secured on a pari passu basis with the collateral that secures the Credit Agreement. We pay a fee of 1% on outstanding letters of credit and bank guarantees issued under the Bilateral Facility. As of June 30, 2026, we had approximately $25 million of outstanding letters of credit and bank guarantees issued under the Bilateral Facility. For further details on these facilities, please refer to Note 9 – "Debt" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q. Financial covenants The Credit Agreement obligates Seadrill and its restricted subsidiaries to comply with the following financial covenants: •as of the last day of each fiscal quarter, the Interest Coverage Ratio (as defined in the Credit Agreement) is not permitted to be less than 2.50 to 1.00; and •as of the last day of each fiscal quarter, the Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) is not permitted to be greater than 3.00 to 1.00. As of June 30, 2026, Seadrill was in compliance with these financial covenants. Critical Accounting Estimates The preparation of our unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures about contingent assets and liabilities. We base these estimates and assumptions on historical experience and on various other information and assumptions that we believe to be reasonable. Critical accounting estimates are important to the portrayal of both our financial position and results of operations and require us to make subjective or complex assumptions or estimates about matters that are uncertain. Actual results may differ from these estimates. For a discussion of our critical accounting estimates, see Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in our 2025 10-K. As of June 30, 2026, there have been no material changes to the judgments, assumptions and estimates upon which our critical accounting policies and estimates are based.