example,
software-as-a-service
and cloud solutions), to conduct
day-to-day
operations, and we are placing greater reliance on information technology to help support our operations and increase efficiency in our business functions. We
are dependent upon our information technology and infrastructure, including operational and financial computer systems, to process the data necessary to conduct almost all aspects of our business. Computer, telecommunications and other business
facilities and systems could become unavailable or impaired from a variety of causes including, among others, storms and other natural disasters, terrorist attacks, utility outages, theft, design defects, human error or complications encountered as
existing systems are maintained, repaired, replaced or upgraded. In addition, it has been reported that known or unknown entities or groups have mounted
so-called
cyber attacks on businesses and
other organizations solely to disable or disrupt computer systems, disrupt operations and, in some cases, steal data. Cybersecurity risks and threats to such systems continue to grow and may be difficult to anticipate, prevent, discover or mitigate.
A breach or failure of our computer systems or networks, or those of our customers, vendors or others with whom we do business, could materially disrupt our business operations and our customers operations and could result in the alteration,
loss, theft or corruption of data or unauthorized release of confidential, proprietary or sensitive data concerning our company, business activities, employees, customers or vendors. Any such breach or failure could have a material adverse effect on
our operations, business or reputation.
Acts of terrorism, piracy and political and social unrest could affect the markets for drilling services,
which may have a material adverse effect on our results of operations.
Acts of terrorism and social unrest, brought about by world
political events or otherwise, have caused instability in the worlds financial and insurance markets in the past and may occur in the future. Such acts could be directed against companies such as ours. In addition, acts of terrorism, piracy
and social unrest could lead to increased volatility in prices for crude oil and natural gas and could adversely affect the market for offshore drilling services. Insurance premiums could increase and coverage may be unavailable in the future.
Government regulations may effectively preclude us from engaging in business activities in certain countries. These regulations could be amended to cover countries where we currently operate or where we may wish to operate in the future.
We rely on third-party suppliers, manufacturers and service providers to secure and service equipment, components and parts used in rig operations,
conversions, upgrades and construction.
Our reliance on third-party suppliers, manufacturers and service providers to provide
equipment and services exposes us to volatility in the quality, price and availability of such items. Certain components, parts and equipment that we use in our operations may be available only from a small number of suppliers, manufacturers or
service providers. The failure of one or more third-party suppliers, manufacturers or service providers to provide equipment, components, parts or services, whether due to capacity constraints, production or delivery disruptions, price increases,
quality control issues, recalls or other decreased availability of parts and equipment, is beyond our control and could materially disrupt our operations or result in the delay, renegotiation or cancellation of drilling contracts, thereby causing a
loss of contract drilling backlog and/or revenue to us, as well as an increase in operating costs and an increased risk of additional asset impairments.
Additionally, our suppliers, manufacturers and service providers could be negatively impacted by current industry conditions or global
economic conditions. If certain of our suppliers, manufacturers or service providers were to experience significant cash flow issues, become insolvent or otherwise curtail or discontinue their business as a result of such conditions, it could result
in a reduction or interruption in supplies, equipment or services available to us and/or a significant increase in the price of such supplies, equipment and services,.
Our debt levels may limit our liquidity and flexibility in obtaining additional financing and in pursuing other business opportunities.
Our business is highly capital intensive and dependent on having sufficient cash flow and/or available sources of financing in order to fund
our capital expenditure requirements. As of December 31, 2018, we had
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