62 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Critical Audit Matters
+Added: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.
Description of the Matter
2 unchanged sentences
The Company recognizes tax benefits they believe are more likely than not to be sustained upon examination by the taxing authorities based on the technical merits of the position.
−Removed: Auditing management’s provision for income taxes and related deferred taxes is complex because of the Company’s multi-national operating structure.
+Added: Auditing management’s provision for income taxes and related deferred taxes was complex because of the Company’s multi-national operating structure.
In addition, a higher degree of auditor judgment was required to evaluate the Company’s deferred tax provision as a result of the Company’s interpretation of tax law in each jurisdiction across its multiple subsidiaries.
1 unchanged sentence
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s income tax provision process, including controls over management’s review of the identification and valuation of deferred income taxes and changes in tax laws and regulations that may impact the Company’s deferred income tax provision.
−Removed: Our audit procedures also included, among others, (i) obtaining an understanding of the Company’s overall tax structure, evaluating changes in the Company’s tax structure that occurred during the year as well as changes in tax law, and assessing the interpretation of those changes under the relevant jurisdiction’s tax law;
+Added: Our audit procedures also included, among others, (i) an understanding of the Company’s overall tax structure, evaluating changes in the Company’s tax structure that occurred during the year as well as changes in tax law, and assessing the interpretation of those changes under the relevant jurisdiction’s tax law;
(ii) utilizing tax resources with appropriate knowledge of local jurisdictional laws and regulations;
(iii) evaluating the completeness and accuracy of deferred income taxes, and (iv) assessing the reasonableness of the Company’s valuation allowance on deferred tax assets, including projections of taxable income from the future reversal of existing taxable temporary differences.
+Added: Equity-Method Investment in Orion Holdings (Cayman) Limited
+Added: Description of the Matter
+Added: As discussed in Note 4, the Company recorded an impairment loss of $59 million associated with its equity-method investment in Orion Holdings (Cayman) Limited (Orion) upon determination that the carrying amount of its investment exceeded the estimated fair value and that the impairment was other than temporary.
+Added: At December 31, 2020, the aggregate carrying amount of the Company’s equity-method investment in Orion was $104 million.
+Added: Auditing management’s equity-method investment valuation was complex and judgmental due to the estimation required in determining the fair value of the investment.
+Added: In particular, the fair value estimate of the equity method investment in Orion was sensitive to significant assumptions such as the discount rate, future demand and supply of harsh environment floaters, rig utilization, revenue efficiency and dayrates.
+Added: How We Addressed the Matter in Our Audit
+Added: We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the fair value of the investment in Orion.
+Added: For example, we tested management’s review controls over the significant assumptions described above as well as over the underlying data used in the fair value determination.
+Added: To test the estimated fair value of the Company’s equity-method investment in Orion, we performed audit procedures that included, among others, assessing the valuation methodologies utilized by management and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analysis.
+Added: We involved a valuation specialist to assist in our evaluation of the Company's model, valuation methodology and significant assumptions.
+Added: We reviewed for contrary evidence related to the determination of the fair value of the equity-method investment, including reviewing relevant market data and internal Company forecasts.
/s/ Ernst & Young LLP
8 unchanged sentences
Contract drilling revenues
−Removed: Other revenues
Costs and expenses
8 unchanged sentences
Interest expense, net of amounts capitalized
−Removed: Loss on retirement of debt
+Added: Gain (loss) on restructuring and retirement of debt
Loss before income tax expense
Income tax expense
−Removed: Net income (loss) attributable to noncontrolling interest
+Added: Net loss attributable to noncontrolling interest
Net loss attributable to controlling interest
−Removed: Loss per share
−Removed: Weighted-average shares outstanding
+Added: Loss per share, basic and diluted
+Added: Weighted average shares, basic and diluted
See accompanying notes.
4 unchanged sentences
Years ended December 31,
−Removed: Net income (loss) attributable to noncontrolling interest
+Added: Net loss attributable to noncontrolling interest
Net loss attributable to controlling interest
−Removed: Components of net periodic benefit costs before reclassifications
−Removed: Components of net periodic benefit costs reclassified to net loss
+Added: Components of net periodic benefit income (costs) before reclassifications
+Added: Components of net periodic benefit costs reclassified to net income
Other comprehensive income (loss) before income taxes
−Removed: Income taxes related to other comprehensive income
+Added: Income taxes related to other comprehensive loss
Other comprehensive income (loss)
2 unchanged sentences
Total comprehensive loss
−Removed: Total comprehensive income (loss) attributable to noncontrolling interest
+Added: Total comprehensive loss attributable to noncontrolling interest
Total comprehensive loss attributable to controlling interest
7 unchanged sentences
Materials and supplies, net
−Removed: Restricted cash accounts and investments
+Added: Restricted cash and cash equivalents
Other current assets
42 unchanged sentences
Acquisition of redeemable noncontrolling interest
−Removed: Allocated capital for transactions with holders of noncontrolling interest
+Added: Reallocated capital for transactions with holders of noncontrolling interest
Balance, end of period
16 unchanged sentences
Acquisition of redeemable noncontrolling interest
−Removed: Allocated capital for transactions with holders of noncontrolling interest
+Added: Reallocated capital for transactions with holders of noncontrolling interest
Balance, end of period
1 unchanged sentence
Balance, beginning of period
−Removed: Total comprehensive income (loss) attributable to noncontrolling interest
+Added: Total comprehensive loss attributable to noncontrolling interest
Recognition of noncontrolling interest in business combination
Acquisition of noncontrolling interest
−Removed: Allocated capital for transactions with holders of noncontrolling interest
+Added: Reallocated capital for transactions with holders of noncontrolling interest
Balance, end of period
20 unchanged sentences
Loss on impairment
+Added: Loss on impairment of investment in unconsolidated affiliates
Loss on disposal of assets, net
−Removed: Loss on retirement of debt
+Added: (Gain) loss on restructuring and retirement of debt
Gain on termination of construction contracts
31 unchanged sentences
We contract our drilling rigs, related equipment and work crews predominantly on a dayrate basis to drill oil and gas wells.
−Removed: As of December 31, 2019, we owned or had partial ownership interests in and operated a fleet of 45 mobile offshore drilling units, including 28 ultra-deepwater floaters, 14 harsh environment floaters and three midwater floaters.
+Added: As of December 31, 2020, we owned or had partial ownership interests in and operated a fleet of 38 mobile offshore drilling units, including 27 ultra-deepwater floaters and 11 harsh environment floaters.
As of December 31, 2020, we were constructing two ultra-deepwater drillships.
Note 2—Significant Accounting Policies
−Removed: Accounting estimates —To prepare financial statements in accordance with accounting principles generally accepted in the U.S., we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.
−Removed: On an ongoing basis, we evaluate our estimates and assumptions, including those related to our allowance for doubtful accounts, allowance for excess and obsolete materials and supplies, property and equipment, assets held for sale, goodwill, income taxes, contingencies, share-based compensation and postemployment benefit plans.
+Added: Accounting estimates —To prepare financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”), we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.
+Added: On an ongoing basis, we evaluate our estimates and assumptions, including those related to our income taxes, property and equipment, equity investments, contingencies, assets held for sale, intangibles, allowance for excess materials and supplies, allowance for credit losses, postemployment benefit plans, leases and share-based compensation.
We base our estimates and assumptions on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
6 unchanged sentences
We eliminate intercompany transactions and accounts in consolidation.
−Removed: We apply the equity method of accounting for an investment in an unconsolidated entity if we have the ability to exercise significant influence over the entity that (a) does not meet the variable interest entity criteria or (b) meets the variable interest entity criteria, but for which we are not deemed to be the primary beneficiary.
−Removed: We apply the cost method of accounting for an investment in an entity if we do not have the ability to exercise significant influence over the unconsolidated entity.
+Added: We apply the equity method of accounting for an equity investment in an unconsolidated entity if we have the ability to exercise significant influence over the entity that (a) does not meet the variable interest entity criteria or (b) meets the variable interest entity criteria, but for which we are not deemed to be the primary beneficiary.
+Added: We measure other equity investments at fair value if the investment has a fair value that is readily determinable;
+Added: otherwise, we measure the investment at cost, less any impairment.
We separately present within equity on our consolidated balance sheets the ownership interests attributable to parties with noncontrolling interests in our consolidated subsidiaries, and we separately present net income attributable to such parties on our consolidated statements of operations.
2 unchanged sentences
To the extent the fair value of the net assets acquired exceeds the consideration transferred, we recognize a bargain purchase gain.
−Removed: We estimate the fair values of the acquired assets and assumed liabilities as of the date of the acquisition, and our estimates are subject to adjustment through completion, which is in each case within one year of the acquisition date, based on our ongoing assessments of the fair values of property and equipment, intangible assets, other assets and liabilities and our evaluation of tax positions and contingencies.
+Added: We estimate the fair values of the acquired assets and assumed liabilities as of the date of the acquisition, and our estimates are subject to adjustment through completion, which is in each case within one year of the acquisition date, based on our assessments of the fair values of property and equipment, intangible assets, other assets and liabilities and our evaluation of tax positions and contingencies.
See Note 3—Business Combinations.
−Removed: Goodwill —We conduct impairment testing for our goodwill annually as of October 1 and more frequently, on an interim basis, when an event occurs or circumstances change that indicate that the fair value of our reporting unit may have declined below its carrying value.
−Removed: We test goodwill at the reporting unit level, which is defined as an operating segment or one level below an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management.
−Removed: We determined that we have a single reporting unit for this purpose.
−Removed: Before testing goodwill, we consider whether or not to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
−Removed: If, as the result of our qualitative assessment, we determine that an impairment test is required, or, alternatively, if we elect to forgo the qualitative assessment, we record an impairment to goodwill to the extent the carrying amount of the reporting unit, including goodwill, exceeds the fair value of the reporting unit.
−Removed: In the year ended December 31, 2018, as a result of an interim goodwill test, we recognized an aggregate loss of $ 462 million, which had no tax effect, associated with the impairment of our goodwill.
−Removed: See Note 4—Business Combinations and Note 8—Goodwill and Other Intangibles.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Contract intangibles —We recognize contract intangible assets and liabilities related to acquired executory contracts, such as drilling contracts and construction contracts.
−Removed: The drilling contract intangible assets represent the amount by which the fixed dayrates of the acquired contracts were above the market dayrates that were available or expected to be available during the term of the contract for similar contracts, measured as of the acquisition date.
−Removed: We amortize the carrying amount of the drilling contract intangible assets using the straight-line method over the expected remaining contract period as a reduction of contract drilling revenues.
−Removed: At December 31, 2019 and 2018, the aggregate carrying amount of our drilling contract intangible assets was $ 608 million and $ 795 million, respectively.
−Removed: The construction contract intangible liabilities represent the amount by which the remaining payments due under the acquired contracts were above market construction rates for similar drilling units, measured as of the acquisition date.
−Removed: Upon cancellation of the construction contracts, we eliminated the contract intangible liabilities with a corresponding adjustment to earnings.
−Removed: See Note 4—Business Combinations and Note 8—Goodwill and Other Intangibles.
−Removed: Derivative instruments —We record derivatives on our consolidated balance sheet, measured at fair value.
−Removed: We recognize the gains and losses associated with changes in the fair value of undesignated derivatives in current period earnings.
−Removed: See Note 11—Derivative Instruments.
Revenue recognition —We recognize revenues earned under our drilling contracts based on variable dayrates, which range from a full operating dayrate to lower rates or zero rates for periods when drilling operations are interrupted or restricted, based on the specific activities we perform during the contract on an hourly, or more frequent, basis.
Such dayrate consideration is attributed to the distinct time period to which it relates within the contract term, and therefore, is recognized as we perform the services.
−Removed: When the operating dayrate declines over the contract term, we recognize revenues on a straight-line basis over the full contract period.
+Added: When the operating dayrate declines over the contract term, we recognize revenues on a straight-line basis over the estimated contract period.
We recognize reimbursement revenues and the corresponding costs as we provide the customer-requested goods and services, when such reimbursable costs are incurred while performing drilling operations.
4 unchanged sentences
To obtain contracts with our customers, we incur costs to prepare a rig for contract and mobilize a rig to the drilling location.
−Removed: We defer pre-operating costs, such as contract preparation and mobilization costs, and recognize such costs on a straight-line basis, consistent with the general pace of activity, in operating and maintenance costs over the estimated contract period.
+Added: We defer pre-operating costs, such as contract preparation and mobilization costs, and recognize such costs on a straight-line basis, consistent with the general pace of activity, in
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: operating and maintenance costs over the estimated contract period.
We apply the optional exemption that permits us to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance obligation consisting of a series of distinct hourly, or more frequent, periods, the variability of which will be resolved at the time of the future services.
12 unchanged sentences
We recognize currency exchange rate gains and losses in other, net.
−Removed: In the years ended December 31, 2019, 2018 and 2017, we recognized a net gain of $ 2 million, a net loss of $ 38 million and a net loss of $ 6 million, respectively, related to currency exchange rates.
+Added: In the years ended December 31, 2020, 2019 and 2018, we recognized a net loss of $ 8 million, a net gain of $ 2 million and a net loss of $ 38 million, respectively, related to currency exchange rates.
Income taxes —We provide for income taxes based on the tax laws and rates in effect in the countries in which we operate and earn income.
1 unchanged sentence
We recognize potential global intangible low-taxed income inclusions as a period cost.
−Removed: There is little or no expected relationship between the provision for or benefit from income taxes and income or loss before income taxes because the countries in which we operate have taxation regimes that vary not only with respect to nominal rate, but also in terms of the availability of deductions, credits and other benefits.
+Added: There is little or no expected relationship between the provision for or benefit from income taxes and income or loss before income taxes because the countries in which we operate have taxation regimes that vary not only with respect to the nominal rate, but also in terms of the availability of deductions, credits and other benefits.
Variations also arise because income earned and taxed in any particular country or countries may fluctuate from year to year.
1 unchanged sentence
We record a valuation allowance for deferred tax assets when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.
−Removed: In evaluating our ability to realize deferred tax assets, we consider all
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: available positive and negative evidence, including projected future taxable income and the existence of cumulative losses in recent years.
+Added: In evaluating our ability to realize deferred tax assets, we consider all available positive and negative evidence, including projected future taxable income and the existence of cumulative losses in recent years.
We also record a valuation allowance for deferred tax assets resulting from net operating losses incurred during the year in certain jurisdictions and for other deferred tax assets where, in our opinion, it is more likely than not that the financial statement benefit of these losses will not be realized.
1 unchanged sentence
We maintain liabilities for estimated tax exposures in our jurisdictions of operation, and we recognize the provisions and benefits resulting from changes to those liabilities in our income tax expense or benefit along with related interest and penalties.
−Removed: Tax exposure items include potential challenges to permanent establishment positions, intercompany pricing, disposition transactions, and withholding tax rates and their applicability.
+Added: Income tax exposure items include potential challenges to permanent establishment positions, intercompany pricing, disposition transactions, and withholding tax rates and their applicability.
These tax exposures are resolved primarily through the settlement of audits within these tax jurisdictions or by judicial means, but can also be affected by changes in applicable tax law or other factors, which could cause us to revise past estimates.
4 unchanged sentences
Such management trusts invest exclusively in high-quality money market instruments.
−Removed: Short-term investments —We periodically deposit unrestricted excess funds in time deposits and commercial paper with original maturities beyond three months.
−Removed: Such short-term investments are with commercial banks with high credit ratings.
−Removed: Accounts receivable —We earn our revenues by providing our drilling services to integrated oil companies, government-owned or government-controlled oil companies and other independent oil companies.
−Removed: We evaluate the credit quality of our customers on an ongoing basis, and we may occasionally require collateral or other security to support customer receivables.
−Removed: We establish an allowance for doubtful accounts on a case-by-case basis, considering changes in the financial position of a customer, when we believe the required payment of specific amounts owed to us is unlikely to occur.
−Removed: See Note 3—Accounting Standards Updates.
−Removed: Materials and supplies —We record materials and supplies at their average cost less an allowance for excess and obsolete items.
−Removed: We estimate the allowance for excess and obsolete items based on historical experience and expectations for future use of the materials and supplies.
−Removed: At December 31, 2019 and 2018, our allowance for excess and obsolete items was $ 127 million and $ 134 million, respectively.
−Removed: Restricted cash accounts and investments —We maintain restricted cash accounts and investments that are either pledged for debt service under certain bond indentures, as required under certain bank credit arrangements, or held in accounts that are subject to restrictions due to legislation, regulation or court order.
−Removed: We classify such restricted cash accounts and investments in current assets if the restriction is expected to expire or otherwise be resolved within one year or if such funds are considered to offset liabilities that are properly classified as current liabilities.
−Removed: At December 31, 2019, the aggregate carrying amount of our restricted cash accounts and investments was $ 558 million, recorded in current assets.
−Removed: At December 31, 2018, the aggregate carrying amount of our restricted cash accounts and investments was $ 552 million, of which $ 551 million and $ 1 million was classified in current assets and other assets, respectively.
−Removed: See Note 10—Debt, Note 15—Commitments and Contingencies and Note 20—Financial Instruments.
+Added: Accounts receivable —We earn our revenues by providing our drilling services to three major categories of customers:
+Added: (a) integrated oil companies, (b) government-owned or government-controlled oil companies and (c) other independent oil companies.
+Added: Effective January 1, 2020, we adopted the accounting standards update that requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings without retrospective application.
+Added: Accordingly, we establish an allowance for credit losses based on the loss rate method, considering forecasted future conditions in addition to past events and current conditions for our customers in each of the major categories and on an individual basis when the risk characteristics of an account are no longer representative of the category to which it otherwise belongs.
+Added: At December 31, 2020, our allowance for credit losses was $ 2 million.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: Materials and supplies —We record materials and supplies at their average cost less an allowance for excess items.
+Added: We estimate the allowance for excess items based on historical experience and expectations for future use of the materials and supplies.
+Added: At December 31, 2020 and 2019, our allowance for excess items was $ 143 million and $ 127 million, respectively.
+Added: Restricted cash and cash equivalents —We maintain restricted cash and cash equivalents that are either pledged for debt service under certain bond indentures, as required under certain bank credit arrangements, or held in accounts that are subject to restrictions due to legislation, regulation or court order.
+Added: We classify such restricted cash and cash equivalents in current assets if the restriction is expected to expire or otherwise be resolved within one year or if such funds are considered to offset liabilities that are properly classified as current liabilities.
+Added: See Note 9—Debt and Note 13—Commitments and Contingencies.
Assets held for sale —We classify an asset as held for sale when the facts and circumstances meet the criteria for such classification, including the following:
(a) we have committed to a plan to sell the asset, (b) the asset is available for immediate sale, (c) we have initiated actions to complete the sale, including locating a buyer, (d) the sale is expected to be completed within one year, (e) the asset is being actively marketed at a price that is reasonable relative to its fair value, and (f) the plan to sell is unlikely to be subject to significant changes or termination.
−Removed: At December 31, 2019, we had no assets classified as held for sale.
−Removed: At December 31, 2018, the aggregate carrying amount of our assets held for sale, recorded in other current assets, was $ 25 million.
−Removed: See Note 7—Drilling Fleet.
−Removed: Property and equipment —The recognition of our property and equipment, consisting primarily of offshore drilling rigs and related equipment, requires us to apply judgment related to estimates and assumptions for cost capitalization, useful lives and salvage values of our rigs.
−Removed: These estimates and assumptions are based on both historical experience and expectations regarding future industry conditions and operations.
+Added: At December 31, 2020 and 2019, we had no assets classified as held for sale.
+Added: Property and equipment —We apply judgment to account for our property and equipment, consisting primarily of offshore drilling rigs and related equipment, related to estimates and assumptions for cost capitalization, useful lives and salvage values.
+Added: We base our estimates and assumptions on historical experience and expectations regarding future industry conditions and operations.
At December 31, 2020, the aggregate carrying amount of our property and equipment represented approximately 81 percent of our total assets.
3 unchanged sentences
We compute depreciation using the straight-line method after allowing for salvage values.
−Removed: The estimated original useful lives of our drilling units range from 30 to 35 years , our buildings and improvements range from two to 30 years and our machinery and equipment range from four to 20 years .
−Removed: We reevaluate the remaining useful lives and salvage values of our rigs when certain events occur that directly impact the useful lives and salvage values of the rigs, including changes in operating
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: condition, functional capability and market and economic factors.
+Added: The estimated original useful life of our drilling units is 35 years , our buildings and improvements range from two to 30 years and our machinery and equipment range from four to 20 years .
+Added: We reevaluate the remaining useful lives and salvage values of our rigs when certain events occur that directly impact the useful lives and salvage values of the rigs, including changes in operating condition, functional capability and market and economic factors.
When evaluating the remaining useful lives of rigs, we also consider major capital upgrades required to perform certain contracts and the long-term impact of those upgrades on future marketability.
1 unchanged sentence
For assets classified as held and used, we determine recoverability by evaluating the estimated undiscounted future net cash flows based on projected dayrates and utilization of the asset group under review.
−Removed: We consider our asset groups to be ultra-deepwater floaters, harsh environment floaters and midwater floaters.
+Added: We consider our asset groups to be ultra-deepwater floaters and harsh environment floaters.
When an impairment of one or more of our asset groups is indicated, we measure the impairment as the amount by which the asset group’s carrying amount exceeds its estimated fair value.
−Removed: We measure the fair values of our contract drilling asset groups by applying a variety of valuation methods, incorporating a combination of cost, income and market approaches, using projected discounted cash flows and estimates of the exchange price that would be received for the assets in the principal or most advantageous market for the assets in an orderly transaction between market participants as of the measurement date.
+Added: We measure the fair values of our asset groups by applying a variety of valuation methods, incorporating a combination of cost, income and market approaches, using projected discounted cash flows and estimates of the exchange price that would be received for the assets in the principal or most advantageous market for the assets in an orderly transaction between market participants as of the measurement date.
For an asset classified as held for sale, we consider the asset to be impaired to the extent its carrying amount exceeds its estimated fair value less cost to sell.
See Note 6—Drilling Fleet.
+Added: Equity investments and impairment —We review our equity-method investments, and other equity investments for which a readily determinable fair value is not available, for potential impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable in the near term.
+Added: If we determine that an impairment that is other than temporary exists, we recognize an impairment loss, measured as the amount by which the carrying amount of the investment exceeds its estimated fair value.
+Added: To estimate the fair value of the investment, we apply valuation methods that rely primarily on the income and market approaches.
+Added: In the year ended December 31, 2020, we recognized a loss of $ 62 million associated with the other-than-temporary impairment of the carrying amount of our equity investments.
+Added: See Note 4—Unconsolidated Affiliates.
+Added: Goodwill —We conduct impairment testing for goodwill annually as of October 1 and more frequently, on an interim basis, when an event occurs or circumstances change that indicate that the fair value of our reporting unit may have declined below its carrying amount.
+Added: In the year ended December 31, 2018, as a result of an interim goodwill test, we recognized an aggregate loss of $ 462 million, which had no tax effect, associated with the impairment of the full balance of our goodwill.
+Added: See Note 3—Business Combinations and Note 7—Goodwill and Other Intangibles.
+Added: Contract intangibles —We recognize contract intangible assets related to acquired executory contracts, such as drilling contracts.
+Added: The drilling contract intangible assets represent the amount by which the fixed dayrates of the acquired contracts were above the market dayrates that were available or expected to be available during the term of the contract for similar contracts, measured as of the acquisition date.
+Added: We amortize the carrying amount of the drilling contract intangible assets using the straight-line method as a reduction of contract
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: drilling revenues over the expected remaining contract period.
+Added: At December 31, 2020 and 2019, the aggregate carrying amount of our drilling contract intangible assets was $ 393 million and $ 608 million, respectively.
+Added: See Note 3—Business Combinations and Note 7—Goodwill and Other Intangibles.
Pension and other postemployment benefit plans —We use a measurement date of January 1 for determining net periodic benefit costs and December 31 for determining plan benefit obligations and the fair values of plan assets.
6 unchanged sentences
At December 31, 2020 and 2019, our pension and other postemployment benefit plan obligations represented an aggregate liability of $ 277 million and $ 351 million, respectively, and an aggregate asset of $ 37 million and $ 42 million, respectively, representing the funded status of the plans.
−Removed: In the years ended December 31, 2019, 2018 and 2017, aggregate net periodic benefit costs were income of $ 3 million, income of $ 9 million and costs of $ 5 million, respectively.
See Note 12—Postemployment Benefit Plans.
4 unchanged sentences
We recognize expense for legal costs as they are incurred, and we recognize a corresponding asset for such legal costs only if we expect such legal costs to be recovered through insurance.
−Removed: Note 3—Accounting Standards Updates
−Removed: Recently adopted accounting standards
−Removed: Leases —Effective January 1, 2019, we adopted the accounting standards update that requires lessees to recognize a right-of-use asset and lease liability for virtually all leases and updates previous accounting standards for lessors to align certain requirements with the updates to the revenue recognition accounting standards.
−Removed: We applied the transition method that required us to recognize right-of-use assets, recorded in other assets, and lease liabilities, recorded in other current liabilities and other long-term liabilities, as of the date of our adoption with no adjustment to prior periods.
−Removed: We applied the package of practical expedients that permitted us to carry forward historical lease classifications.
−Removed: For our drilling contracts, we recognize revenues based on the predominant component, which is the service component.
−Removed: As of January 1, 2019, for the finance leases under which we are the lessee, we reclassified to other assets $ 528 million, representing the unamortized right-of-use asset previously recorded in property and equipment, and we reclassified an aggregate remaining lease liability of $ 511 million, including $ 32 million and $ 479 million recorded in other current liabilities and other long-term liabilities, respectively, previously recorded in debt due within one year and debt.
−Removed: As of January 1, 2019, for operating leases under which we are the lessee, we recorded a non-cash adjustment to recognize an aggregate right-of-use asset of $ 95 million, recorded in other assets, and a corresponding aggregate remaining lease liability of $ 133 million, including $ 15 million and $ 118 million recorded in other current liabilities and other long-term liabilities, respectively.
−Removed: We have accounted for lease and non-lease components of our operating leases as a single component.
−Removed: We have not recognized right-of-use assets or lease liabilities for our short-term leases.
−Removed: Our adoption did not have and is not expected in the future to have a material effect on our consolidated statements of financial position, operations or cash flows.
−Removed: See Note 9—Leases.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Other comprehensive income —Effective January 1, 2019, we adopted the accounting standards update that allows for a reclassification from accumulated other comprehensive loss to accumulated deficit for stranded tax effects resulting from legislation commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”).
−Removed: As of January 1, 2019, as a result of our adoption, we recorded an increase of $ 24 million to accumulated deficit with a corresponding decrease to accumulated other comprehensive loss.
−Removed: Recently issued accounting standards
−Removed: Financial instruments – credit losses —Effective January 1, 2020, we will adopt the accounting standards update that requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings.
−Removed: The update is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods.
−Removed: We have established our approach to apply the requirements and do not expect our adoption to have a material effect on our consolidated statements of financial position, operations or cash flows or on the disclosures contained in our notes to consolidated financial statements.
Note 3—Business Combinations
3 unchanged sentences
On December 5, 2018, we acquired Ocean Rig in a merger transaction.
−Removed: We believe both acquisitions further strengthen our position as a leader in providing ultra-deepwater and harsh environment drilling services by adding additional high-value assets, and the Songa acquisition, supported by significant contract backlog, also strengthens our footprint in harsh environment operating areas.
−Removed: In the years ended December 31, 2018 and 2017, in connection with our acquisitions, we incurred acquisition costs of $ 24 million and $ 4 million, respectively, recorded in general and administrative costs and expenses.
+Added: We believe both acquisitions further strengthen our position as a leader in providing ultra-deepwater and harsh environment drilling services by adding additional high-value assets, and we believe the Songa acquisition, supported by significant contract backlog, also strengthens our footprint in harsh environment operating areas.
+Added: In the year ended December 31, 2018, in connection with these acquisitions, we incurred acquisition costs of $ 24 million, recorded in general and administrative costs and expenses.
We included the operating results of Songa and Ocean Rig in our consolidated results of operations, commencing on the acquisition date, January 30, 2018 and December 5, 2018, respectively.
In the year ended December 31, 2018, our consolidated statement of operations includes revenues of $ 497 million and net income of $ 87 million associated with the operations of Songa and revenues of $ 15 million and net loss of $ 8 million associated with the operations of Ocean Rig.
−Removed: Pro forma combined operating results, assuming the acquisitions were completed as of January 1, 2017, were as follows (in millions, except per share data):
−Removed: Years ended December 31,
−Removed: Contract drilling revenues
−Removed: Per share loss - basic and diluted
Ocean Rig UDW Inc.
−Removed: Consideration —To complete the acquisition, we issued 147.7 million shares with a per share market value of $ 9.32 , based on the market value of our shares on the acquisition date, and made an aggregate cash payment of $ 1.2 billion.
−Removed: The aggregate fair value of the consideration transferred in the business combination was as follows (in millions):
−Removed: Consideration transferred
−Removed: Aggregate fair value of shares issued as partial consideration for Ocean Rig shares
−Removed: Aggregate cash paid as partial consideration for Ocean Rig shares
−Removed: Total consideration transferred in business combination
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Assets and liabilities —The fair values of assets acquired and liabilities assumed, measured as of December 5, 2018, were as follows (in millions):
−Removed: Assets acquired
−Removed: Cash and cash equivalents
−Removed: Accounts receivable
−Removed: Property and equipment
−Removed: Drilling contract intangible assets
−Removed: Liabilities assumed
−Removed: Accounts payable and other current liabilities
−Removed: Construction contract intangible liabilities
−Removed: Other long-term liabilities
−Removed: Net assets acquired
+Added: To complete the acquisition, we transferred consideration with an aggregate fair value of $ 2.55 billion, including (a) 147.7 million shares issued at an aggregate fair value of $ 1.38 billion, equivalent to $ 9.32 per share, based on the market value of our shares on the acquisition date and (b) an aggregate cash payment of $ 1.17 billion.
+Added: The fair value of net assets acquired, measured as of December 5, 2018, was $ 2.57 billion, comprised of:
+Added: (a) total assets of $ 2.82 billion, including cash and cash equivalents of $ 152 million, property and equipment of $ 2.20 billion and other assets of $ 466 million, net of (b) liabilities assumed of $ 257 million.
In the year ended December 31, 2019, we completed our estimates of the fair values of the assets and liabilities.
1 unchanged sentence
We estimated the fair value of the rigs and related equipment by applying a combination of income and market approaches, using projected discounted cash flows and estimates of the exchange price that would be received for the assets in the principal or most advantageous markets for the assets in an orderly transaction between participants as of the acquisition date.
−Removed: We estimated the fair value of the drilling contracts by comparing the contractual dayrates over the remaining firm contract term and option periods relative to the projected market dayrates as of the acquisition date.
−Removed: We estimated the fair value of the construction contracts by comparing the contractual future payments and terms relative to the market payments and terms as of the acquisition date.
−Removed: Our estimates of fair value for the drilling units and contract intangibles required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the assets, such as future commodity prices, projected demand for our services, rig availability, rig utilization, dayrates, remaining useful lives of the rigs and discount rates.
−Removed: Songa Offshore SE
−Removed: Consideration —To complete the acquisition, we issued 66.9 million shares with a per share market value of $ 10.99 , based on the market value of our shares on the acquisition date.
−Removed: We also issued $ 854 million aggregate principal amount of 0.50 % exchangeable senior bonds due January 30, 2023 (the “Exchangeable Bonds”), comprised of $ 562 million aggregate principal amount as partial consideration to Songa shareholders and $ 292 million aggregate principal amount as settlement for certain Songa indebtedness.
−Removed: The aggregate fair value of the consideration transferred in the business combination was as follows (in millions):
−Removed: Consideration transferred
−Removed: Aggregate fair value of shares issued as partial consideration for Songa shares
−Removed: Aggregate fair value of Exchangeable Bonds issued as partial consideration for Songa shares
−Removed: Consideration transferred to Songa shareholders
−Removed: Aggregate fair value of Exchangeable Bonds issued for settlement of certain Songa indebtedness
−Removed: Total consideration transferred in business combination
+Added: We estimated the fair value
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Assets and liabilities —The fair values of assets acquired, liabilities assumed and noncontrolling interest, measured as of January 30, 2018, were as follows (in millions):
−Removed: Assets acquired
−Removed: Cash and cash equivalents
−Removed: Accounts receivable
−Removed: Other current assets
−Removed: Property and equipment
−Removed: Contract intangible assets
−Removed: Liabilities assumed
−Removed: Accounts payable and other current liabilities
−Removed: Other long-term liabilities
−Removed: Net assets acquired
−Removed: Noncontrolling interest in business combination
−Removed: Controlling interest acquired in business combination
+Added: of the drilling contracts by comparing the contractual dayrates over the remaining firm contract term and option periods relative to the projected market dayrates as of the acquisition date.
+Added: We estimated the fair value of the construction contracts by comparing the contractual future payments and terms relative to the market payments and terms as of the acquisition date.
+Added: Our estimates of fair value for the drilling units and contract intangibles required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the assets, such as future commodity prices, projected demand for our services, rig availability, rig utilization, dayrates, remaining useful lives of the rigs and discount rates.
+Added: In connection with the Ocean Rig acquisition, we acquired contracts with Samsung Heavy Industries Co., Ltd.
+Added: (“SHI”) for the construction of two ultra-deepwater drillships for which we recognized liabilities that represented the amount by which the remaining payments due under the acquired contracts were above market construction rates for similar drilling units, measured as of the acquisition date.
+Added: In October 2019, we agreed with SHI to cancel the construction contracts for the drillships in exchange for the parties terminating their respective obligations and liabilities under the construction contracts and our subsidiaries releasing to SHI their respective interests in the rigs.
+Added: As a result, in the three months ended December 31, 2019, we eliminated the construction contract liabilities and recognized income of $ 132 million, recorded in other income, net.
+Added: Songa Offshore SE
+Added: To complete the acquisition, we transferred consideration with an aggregate fair value of $ 1.76 billion, including (a) 66.9 million shares issued at an aggregate fair value of $ 735 million, equivalent to $ 10.99 per share, based on the market value of our shares on the acquisition date and (b) $ 854 million aggregate principal amount of 0.50 % exchangeable senior bonds due January 30, 2023 (the “Exchangeable Senior Bonds”) issued at an aggregate fair value of $ 1.03 billion as partial consideration to Songa shareholders and settlement for certain Songa indebtedness.
+Added: The fair value of net assets acquired, measured as of January 30, 2018, was $ 1.76 billion, comprised of:
+Added: (a) total assets of $ 3.82 billion, including cash and cash equivalents of $ 113 million, property and equipment of $ 2.41 billion, goodwill of $ 462 million, contract intangible assets of $ 632 million and other assets of $ 195 million, net of (b) total liabilities of $ 2.02 billion, including total debt of $ 1.77 billion and other liabilities of $ 254 million and (c) noncontrolling interest of $ 33 million.
In the year ended December 31, 2018, we completed our estimates of the fair values of the assets and liabilities.
4 unchanged sentences
We estimated the fair value of the debt using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments.
−Removed: Noncontrolling interest —On March 28, 2018, we acquired the remaining Songa shares not owned by us through a compulsory acquisition under Cyprus law, and as a result, Songa became our wholly owned subsidiary.
−Removed: As consideration for the remaining Songa shares, we issued 1.1 million shares and $ 9 million aggregate principal amount of Exchangeable Bonds and we made an aggregate cash payment of $ 8 million to Songa shareholders who elected to receive a cash payment or failed to make an election, for an aggregate fair value of $ 30 million.
+Added: On March 28, 2018, we acquired the remaining Songa shares not owned by us through a compulsory acquisition under Cyprus law, and as a result, Songa became our wholly owned subsidiary.
+Added: As consideration for the remaining Songa shares, we issued 1.1 million shares and $ 9 million aggregate principal amount of Exchangeable Senior Bonds and we made an aggregate cash payment of $ 8 million to Songa shareholders who elected to receive a cash payment or failed to make an election, for an aggregate fair value of $ 30 million.
+Added: In connection with the Songa acquisition, we acquired undesignated currency swaps and interest rate swaps that we subsequently settled and terminated.
+Added: In the year ended December 31, 2018, in connection with the settlement of the currency swaps and the interest rate swaps, we made an aggregate cash payment of $ 92 million and received aggregate cash proceeds of $ 18 million, respectively.
Note 4—Unconsolidated Affiliates
−Removed: Investments —We hold investments in various partially owned, unconsolidated companies.
−Removed: In the years ended December 31, 2019 and 2018, we made an aggregate cash contribution of $ 74 million and $ 91 million, respectively, to Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”), a Cayman Islands company that, through its wholly owned subsidiary, owns the harsh environment floater Transocean Norge .
−Removed: At December 31, 2019 and 2018, the aggregate carrying amount of our investment in Orion, representing a 33.0 percent ownership interest, was $ 164 million and $ 91 million, respectively, recorded in other assets using the equity method of accounting.
−Removed: We also invest in certain companies that are involved in researching and developing technology to improve efficiency and reliability and to increase automation, sustainability and safety in drilling and other activities.
−Removed: Related party transactions —We engage in certain related party transactions with Orion under a management services agreement for the operation and maintenance of the harsh environment floater Transocean Norge and a shipyard care agreement for the construction of the rig.
−Removed: In the year ended December 31, 2019, we received an aggregate cash payment of $ 96 million, primarily related to the commissioning, preparation and mobilization of Transocean Norge under the shipyard care agreement.
−Removed: We also lease the rig under a short-term bareboat charter agreement, which is now expected to expire in late 2020.
−Removed: In the year ended December 31, 2019, we recognized rent expense of $ 8 million, recorded in operating and maintenance costs, and made an aggregate cash payment of $ 6 million under the bareboat charter agreement.
−Removed: In the year ended December 31, 2019, we made an aggregate cash payment of $ 7 million to other unconsolidated affiliates, primarily capital expenditures for equipment to improve reliability and reduce emissions, and $ 4 million for research and development, recorded in general and administrative costs.
−Removed: At December 31, 2019, we had receivables of $ 26 million, recorded in other current assets, and payables of $ 9 million, recorded other current liabilities, due from or to all unconsolidated affiliates.
−Removed: At December 31, 2018, we had receivables of $ 7 million, recorded in other current assets, due from all unconsolidated affiliates.
+Added: Equity investments —We hold noncontrolling equity investments in various unconsolidated companies, including (a) our 33.0 percent ownership interest in Orion Holdings (Cayman) Limited (together with its subsidiary, “Orion”), a Cayman Islands company that, through its wholly owned subsidiary, owns the harsh environment floater Transocean Norge , and (b) our interests in certain companies that are involved in researching and developing technology to improve efficiency and reliability and to increase automation, sustainability and safety for drilling and other activities.
+Added: At December 31, 2020 and 2019, the aggregate carrying amount of our equity investments was $ 138 million and $ 191 million, respectively, recorded in other assets.
+Added: Our equity-method investment in Orion is the most significant of our equity investments.
+Added: In the years ended December 31, 2020, 2019 and 2018, we made an aggregate cash contribution of $ 8 million, $ 74 million and $ 91 million, respectively, to Orion, and we expect to make an additional $ 33 million cash contribution in the six months ending June 30, 2021.
+Added: In the year ended December 31, 2020, we recognized a loss of $ 59 million, which had no tax effect, recorded in other, net, associated with the impairment of our equity-method investment in Orion upon determination that the carrying amount exceeded the estimated fair value and that the impairment was other than temporary.
+Added: We estimated the fair value of our investment using the income method, which required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including applying an assumed discount rate of 12 percent and making assumptions
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: about the future performance of the investment, including future demand and supply for harsh environment floaters, rig utilization, revenue efficiency and dayrates.
+Added: At December 31, 2020 and 2019, the aggregate carrying amount of our investment in Orion was $ 104 million and $ 164 million, respectively.
+Added: Related party transactions —We engage in certain related party transactions with our unconsolidated affiliates, the most significant of which are under agreements with Orion.
+Added: We have a management services agreement for the operation and maintenance of the harsh environment floater Transocean Norge and a marketing services agreement for the marketing of the rig.
+Added: We also lease the rig under a short-term bareboat charter agreement, which is expected to expire in mid-2021.
+Added: Prior to the rig’s placement into service, we also engaged in certain related party transactions with Orion under a shipyard care agreement for the construction of the rig and other matters related to its completion and delivery.
+Added: Additionally, we procure services and equipment from other unconsolidated affiliates for technological innovation.
+Added: In the years ended December 31, 2020 and 2019, we received an aggregate cash payment of $ 46 million and $ 96 million, respectively, primarily related to the commissioning, preparation and mobilization of Transocean Norge under the shipyard care agreement with Orion.
+Added: In the years ended December 31, 2020 and 2019, we recognized rent expense of $ 22 million and $ 9 million, respectively, recorded in operating and maintenance costs, and made an aggregate cash payment of $ 22 million and $ 6 million, respectively, to charter the rig and other equipment from Orion.
+Added: In the years ended December 31, 2020 and 2019, we made an aggregate cash payment of $ 15 million and $ 11 million, respectively, to other unconsolidated affiliates for research and development and for equipment to reduce emissions and improve reliability.
Note 5—Revenues
1 unchanged sentence
(i) providing our drilling rig, work crews, related equipment and services necessary to operate the rig (ii) delivering the drilling rig by mobilizing to and demobilizing from the drill location, and (iii) performing certain pre-operating activities, including rig preparation activities or equipment modifications required for the contract.
−Removed: These services represent a single performance obligation under our drilling contracts with customers that is satisfied over time.
−Removed: The duration of our performance obligation varies by contract.
+Added: These services represent a single performance obligation under our drilling contracts with customers that is satisfied over time, the duration of which varies by contract.
At December 31, 2020, the drilling contract with the longest expected remaining duration, excluding unexercised options, extends through February 2028.
−Removed: In the year ended December 31, 2019, we recognized revenues of $ 10 million for performance obligations satisfied in previous periods due to certain revenues recognized on a cash basis.
−Removed: In the year ended December 31, 2018, we recognized revenues of $ 174 million for performance obligations satisfied in previous periods, primarily related to revenues for a customer’s contract termination and certain revenues recognized on a cash basis.
+Added: In June 2020, we entered into a settlement and mutual release agreement with a customer, which provided for the final settlement of disputes related to performance obligations satisfied in prior periods.
+Added: In connection with the settlement, among other things, our customer agreed to pay us $ 185 million in four equal installments through January 15, 2023.
+Added: In the year ended December 31, 2020, we recognized revenues of $ 177 million, representing the discounted value of the future payments, and recorded corresponding accounts receivable, net of imputed interest.
+Added: In the year ended December 31, 2020, we received an aggregate cash payment of $ 46 million in scheduled installments under the arrangement.
+Added: At December 31, 2020, the aggregate carrying amount of the related receivable was $ 133 million, net of imputed interest, including $ 45 million and $ 88 million recorded in accounts receivable and other assets, respectively.
+Added: In the year ended December 31, 2019, we recognized revenues of $ 10 million for other performance obligations satisfied in previous periods due to certain revenues recognized on a cash basis.
+Added: In the year ended December 31, 2018, we recognized revenues of $ 174 million for yet other performance obligations satisfied in previous periods, primarily related to revenues for a customer’s contract termination and certain revenues recognized on a cash basis.
To obtain contracts with our customers, we incur pre-operating costs to prepare a rig for contract and deliver or mobilize the rig to the drilling location.
−Removed: We defer such pre-operating costs and recognize the costs on a straight-line basis, consistent with the general pace of activity, in operating and maintenance costs over the estimated contract period.
+Added: We recognize such pre-operating costs in operating and maintenance costs on a straight-line basis, consistent with the general pace of activity, over the estimated contract period.
In the years ended December 31, 2020, 2019 and 2018, we recognized pre-operating costs of $ 60 million, $ 18 million and $ 45 million, respectively.
At December 31, 2020 and 2019, the unrecognized pre-operating costs to obtain contracts was $ 20 million and $ 34 million, respectively, recorded in other assets.
−Removed: Disaggregation —We recognized revenues as follows (in millions):
+Added: Disaggregation —Our contract drilling revenues, disaggregated by asset group and by country in which they were earned, were as follows (in millions):
Year ended December 31, 2020
−Removed: Ultra-deepwater floaters
−Removed: Harsh environment floaters
−Removed: Deepwater floaters
−Removed: Midwater floaters
−Removed: Total revenues
Year ended December 31, 2019
−Removed: Ultra-deepwater floaters
−Removed: Harsh environment floaters
−Removed: Deepwater floaters
−Removed: Midwater floaters
−Removed: High-specification jackups
−Removed: Total revenues
Year ended December 31, 2018
5 unchanged sentences
Total revenues
−Removed: Contract liabilities —We recognize contract liabilities, recorded in other current liabilities and other long-term liabilities, for mobilization, contract preparation, capital upgrades and deferred revenues for declining dayrate contracts using the straight-line method over the remaining contract term.
+Added: (a) Other represents the aggregate value for countries in which we operate that individually had attributable operating revenues representing less than 10 percent of consolidated operating revenues earned .
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: Contract liabilities —We recognize contract liabilities, recorded in other current liabilities and other long-term liabilities, for mobilization, contract preparation, capital upgrades and deferred revenues for declining dayrate contracts using the straight-line method over the estimated contract period.
Contract liabilities for our contracts with customers were as follows (in millions):
8 unchanged sentences
Total contract liabilities, end of period
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 6—Drilling Fleet
−Removed: Construction work in progress —The changes in our construction work in progress, including capital expenditures and other capital additions, were as follows (in millions):
+Added: Construction work in progress —The changes in our construction work in progress were as follows (in millions):
Years ended December 31,
7 unchanged sentences
Construction work in progress acquired in business combination
−Removed: Construction work in progress sold
Property and equipment placed into service
Newbuild construction program
−Removed: Other property and equipment
+Added: Other equipment and construction projects
Construction work in progress, end of period
−Removed: Impairments of assets held and used —During the year ended December 31, 2017, we identified indicators that the asset groups in our contract drilling services reporting unit may not be recoverable.
−Removed: In the year ended December 31, 2017, such indicators included a significant decline in commodity prices and the market value of our stock, a reduction of projected dayrates and a further extension of low utilization rates.
−Removed: In the year ended December 31, 2017, as a result of our testing, we recognized a loss of $ 94 million ($ 93 million, or $ 0.25 per diluted share, net of tax) associated with the impairment of the midwater floater asset group.
−Removed: We measured the fair value of the asset groups by applying a combination of income and market approaches, using projected discounted cash flows and estimates of the exchange price that would be received for the assets in the principal or most advantageous markets for the assets in an orderly transaction between participants as of the measurement date.
−Removed: Our estimate of fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of our contract drilling services reporting unit, such as future commodity prices, projected demand for our services, rig availability and dayrates.
−Removed: Impairments of assets held for sale —In the year ended December 31, 2019, we recognized an aggregate loss of $ 578 million ($ 0.94 per diluted share), which had no tax effect, associated with the impairment of the ultra-deepwater floaters Discoverer Deep Seas , Discoverer Enterprise and Discoverer Spirit , along with related assets, which we determined were impaired at the time we classified the assets as held for sale.
+Added: Impairments of assets held and used —During the year ended December 31, 2020, we identified indicators that the carrying amounts of our asset groups may not be recoverable.
+Added: Such indicators included significant declines in commodity prices and the market value of our stock, a reduction of expected demand for our drilling services as our customers announced reductions of capital investments in response to commodity prices and a reduction of projected dayrates.
+Added: As a result of our testing, we determined that the carrying amount of our midwater floater asset group was impaired.
+Added: In the year ended December 31, 2020, we recognized a loss of $ 31 million ($ 0.05 per diluted share), which had no tax effect, associated with the impairment of our midwater floater asset group.
+Added: We measured the fair value of the drilling unit and related assets in this asset group by applying the market approach, using estimates of the exchange price that would be received for the assets in the principal or most advantageous markets for the assets in an orderly transaction between participants as of the measurement date.
+Added: Our estimate of fair value required us to use significant other observable inputs, representative of Level 2 fair value measurements, including the marketability of the rig and prices of comparable rigs that may be sold for scrap value.
+Added: Impairments of assets held for sale —In the year ended December 31, 2020, we recognized an aggregate loss of $ 556 million ($ 0.90 per diluted share), which had no tax effect, associated with the impairment of the ultra-deepwater floater GSF Development Driller II , the harsh environment floaters Polar Pioneer and Songa Dee and the midwater floaters Sedco 711 , Sedco 714 and Transocean 712 , along with related assets, which we determined were impaired at the time that we classified the assets as held for sale.
+Added: In the year ended December 31, 2019, we recognized an aggregate loss of $ 578 million ($ 0.94 per diluted share), which had no tax effect, associated with the impairment of the ultra-deepwater floaters Discoverer Deep Seas , Discoverer Enterprise and Discoverer Spirit , along with related assets, which we determined were impaired at the time we classified the assets as held for sale.
In the year ended December 31, 2018, we recognized an aggregate loss of $ 999 million ($ 2.13 per diluted share), which had no tax effect, associated with the impairment of the ultra-deepwater floaters Deepwater Discovery , Deepwater Frontier , Deepwater Millennium and GSF C.R.
Luigs, the deepwater floaters Jack Bates and Transocean 706 and the midwater floaters Songa Delta and Songa Trym , along with related assets, which we determined were impaired at the time that we classified the assets as held for sale.
−Removed: In the year ended December 31, 2017, we recognized an aggregate loss of $ 1.4 billion ($ 3.59 per diluted share), which had no tax effect, associated with the impairment of the ultra-deepwater floaters Cajun Express, Deepwater Pathfinder, GSF Jack Ryan, Sedco Energy and Sedco Express, the deepwater floater Transocean Marianas and the midwater floaters Transocean Prospect and Transocean Searcher , along with related assets, which we determined were impaired at the time that we classified the assets as held for sale.
We measured the impairment of the drilling units and related assets as the amount by which the carrying amount exceeded the estimated fair value less costs to sell.
−Removed: We estimated the fair value of the assets using significant other observable inputs, representative of Level 2 fair value measurements, including indicative market values for the drilling units and related assets to be sold for scrap value or binding contracts to sell such assets for alternative purposes.
−Removed: If we commit to plans to sell additional rigs for values below the respective carrying amounts, we will be required to recognize additional losses in future periods associated with the impairment of such assets.
−Removed: Dispositions —During the year ended December 31, 2019, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the ultra-deepwater floaters Deepwater Frontier, Deepwater Millennium, Discoverer Deep Seas, Discoverer Enterprise, Discoverer Spirit and Ocean Rig Paros , the harsh environment floater Eirik Raude , the deepwater floaters Jack Bates and Transocean 706 and the midwater floaters Actinia and Songa Delta , along with related assets.
−Removed: In the year ended December 31, 2019, we received aggregate net cash proceeds of $ 64 million and recognized an aggregate net gain of $ 4 million, which had no tax effect, associated with the disposal of these assets.
−Removed: In the year ended December 31, 2019, we received aggregate net cash proceeds of $ 6 million and recognized an aggregate net loss of $ 16 million associated with the disposal of assets unrelated to rig sales.
−Removed: During the year ended December 31, 2018, we completed the sale of the ultra-deepwater floaters Cajun Express , Deepwater Discovery , Deepwater Pathfinder , GSF C.R.
−Removed: Luigs, Sedco Energy and Sedco Express , the deepwater floater
+Added: We estimated the fair value of the assets using significant other observable inputs, representative of
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Transocean Marianas and the midwater floater Songa Trym , along with related assets.
+Added: Level 2 fair value measurements, including indicative market values for the drilling units and related assets to be sold for scrap value or binding contracts to sell such assets for alternative purposes.
+Added: If we commit to plans to sell additional rigs for values below the respective carrying amounts, we will be required to recognize additional losses in future periods associated with the impairment of such assets.
+Added: Dispositions —During the year ended December 31, 2020, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the ultra-deepwater floater GSF Development Driller II , the harsh environment floaters Polar Pioneer, Songa Dee and Transocean Arctic and the midwater floaters Sedco 711 , Sedco 714 and Transocean 712 , along with related assets.
+Added: In the year ended December 31, 2020, we received aggregate net cash proceeds of $ 20 million and recognized an aggregate net loss of $ 61 million ($ 0.10 per diluted share), which had no tax effect, associated with the disposal of these assets.
+Added: In the year ended December 31, 2020, we received aggregate net cash proceeds of $ 4 million and recognized an aggregate net loss of $ 23 million associated with the disposal of assets unrelated to rig sales.
+Added: During the year ended December 31, 2019, we completed the sale of the ultra-deepwater floaters Deepwater Frontier, Deepwater Millennium, Discoverer Deep Seas, Discoverer Enterprise, Discoverer Spirit and Ocean Rig Paros , the harsh environment floater Eirik Raude , the deepwater floaters Jack Bates and Transocean 706 and the midwater floaters Actinia and Songa Delta , along with related assets.
In the year ended December 31, 2019, we received aggregate net cash proceeds of $ 64 million and recognized an aggregate net gain of $ 4 million ($ 0.01 per diluted share), which had no tax effect, associated with the disposal of these assets.
In the year ended December 31, 2019, we received aggregate net cash proceeds of $ 6 million and recognized an aggregate net loss of $ 16 million associated with the disposal of assets unrelated to rig sales.
−Removed: On May 31, 2017, we completed the sale of 10 high-specification jackups, including GSF Constellation I, GSF Constellation II, GSF Galaxy I, GSF Galaxy II, GSF Galaxy III, GSF Monarch, Transocean Andaman, Transocean Ao Thai, Transocean Honor and Transocean Siam Driller , along with related assets, and novated the contracts relating to the construction of five high-specification jackups, together with related assets.
−Removed: In the year ended December 31, 2017, we received aggregate net cash proceeds of $ 319 million and recognized an aggregate net loss of $ 1.6 billion ($ 4.08 per diluted share), which had no tax effect, associated with the disposal of these assets.
−Removed: Following the completion of the sale, we continued to operate three of these high-specification jackups through completion of the drilling contracts, the last of which was completed in October 2018.
−Removed: In the years ended December 31, 2018 and 2017, excluding our loss on the disposal of these assets, our operating results included income of $ 44 million and $ 65 million, respectively, before taxes, associated with the high-specification jackup asset group.
−Removed: During the year ended December 31, 2017, we also completed the sale of the ultra-deepwater floater GSF Jack Ryan and the midwater floaters GSF Rig 140 , Transocean Prospect and Transocean Searcher, along with related assets.
+Added: During the year ended December 31, 2018, we completed the sale of the ultra-deepwater floaters Cajun Express , Deepwater Discovery , Deepwater Pathfinder , GSF C.R.
+Added: Luigs, Sedco Energy and Sedco Express , the deepwater floater Transocean Marianas and the midwater floater Songa Trym , along with related assets.
In the year ended December 31, 2018, we received aggregate net cash proceeds of $ 36 million and recognized an aggregate net gain of $ 7 million ($ 0.01 per diluted share), which had no tax effect, associated with the disposal of these assets.
In the year ended December 31, 2018, we received aggregate net cash proceeds of $ 7 million and recognized an aggregate net loss of $ 7 million associated with the disposal of assets unrelated to rig sales.
−Removed: Assets held for sale —At December 31, 2018, the aggregate carrying amount of our assets held for sale, including the ultra-deepwater floaters Deepwater Frontier and Deepwater Millennium, the deepwater floaters Jack Bates and Transocean 706 and the midwater floater Songa Delta , along with related assets, was $ 25 million, recorded in other current assets.
Note 7—Goodwill and Other Intangibles
−Removed: Goodwill —During the three months ended June 30, 2018, we classified as held for sale and impaired three ultra-deepwater floaters (see Note 7—Drilling Fleet).
−Removed: We identified the impairment of these assets as an indicator that our goodwill may be impaired.
−Removed: In the year ended December 31, 2018, as a result of our interim goodwill impairment test, we recognized a loss of $ 462 million ($ 0.99 per diluted share), which had no tax effect, associated with the impairment of the full balance of our goodwill.
−Removed: We estimated the fair value of the contract drilling services reporting unit using the income approach.
−Removed: Our estimate of fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the reporting unit, such as future commodity prices, projected demand for our services, rig availability and dayrates.
−Removed: Finite-lived intangible assets and liabilities —The gross carrying amount and accumulated amortization of our drilling contract intangible assets were as follows (in millions):
+Added: Finite-lived intangible assets —The gross carrying amount and accumulated amortization of our drilling contract intangible assets were as follows (in millions):
Year ended December 31, 2020
3 unchanged sentences
Balance, end of period
−Removed: We recognized drilling contract intangible amortization as a reduction of contract drilling revenues.
−Removed: We expect to amortize the carrying amounts over the remaining contract periods, through March 2024.
−Removed: As of December 31, 2019, the estimated future amortization of contract intangible assets was as follows (in millions):
+Added: We amortize the drilling contract intangible assets over the remaining contract periods, the longest of which is currently expected to extend through March 2024.
+Added: As of December 31, 2020, the estimated future amortization was as follows (in millions):
Years ending December 31,
Total carrying amount of contract intangible assets
−Removed: In connection with our acquisition of Ocean Rig, we acquired contracts related to the construction of two ultra-deepwater drillships Ocean Rig Santorini and Ocean Rig Crete .
−Removed: At December 31, 2018, the gross carrying amount of our construction contract liabilities was $ 132 million.
−Removed: In October 2019, we agreed with Samsung Heavy Industries Co., Ltd.
−Removed: (“SHI”) to cancel the construction contracts for the
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: drillships in exchange for the parties terminating their respective obligations and liabilities under the construction contracts and our subsidiaries releasing to SHI their respective interests in the rigs.
−Removed: As a result, in the three months ended December 31, 2019, we eliminated the construction contract intangible liabilities and recognized income of $ 132 million, recorded in other income, net.
+Added: Goodwill —During the three months ended June 30, 2018, we classified as held for sale and impaired three ultra-deepwater floaters (see Note 6—Drilling Fleet).
+Added: We identified the impairment of these assets as an indicator that our goodwill may be impaired.
+Added: In the year ended December 31, 2018, as a result of our interim goodwill impairment test, we recognized a loss of $ 462 million ($ 0.99 per diluted share), which had no tax effect, associated with the impairment of the full balance of our goodwill.
+Added: We estimated the fair value of the contract drilling services reporting unit using the income approach.
+Added: Our estimate of fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the reporting unit, such as future commodity prices, projected demand for our services, rig availability and dayrates.
Note 8—Leases
1 unchanged sentence
At December 31, 2020, our operating leases had a weighted-average discount rate of 6.4 percent and a weighted-average remaining lease term of 14.0 years.
−Removed: Our finance lease for the ultra-deepwater drillship Petrobras 10000 , which is scheduled to expire in August 2029, has an implicit interest rate of 7.8 percent and requires scheduled payments of $ 6 million monthly through expiration, after which we have the right and obligation to acquire the drillship from the lessor for one dollar.
−Removed: In the year ended December 31, 2019, we recognized expense of $ 21 million, recorded in depreciation and amortization, associated with the amortization of the right of use asset.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: Our finance lease for the ultra-deepwater drillship Petrobras 10000 has an implicit interest rate of 7.8 percent and requires scheduled monthly installments through the lease expiration in August 2029, after which we are obligated to acquire the drillship from the lessor for one dollar.
+Added: We recognize expense for the amortization of the right-of-use asset in depreciation and amortization.
The components of our lease costs were as follows (in millions):
+Added: Years ended December 31,
Operating lease costs
Short-term lease costs
−Removed: Finance lease costs, amortization of right-of-use assets
−Removed: Finance lease costs, interest on lease liabilities
+Added: Finance lease costs, amortization of right-of-use asset
+Added: Finance lease costs, interest on lease liability
Total lease costs
1 unchanged sentence
Supplemental cash flow information for our leases was as follows (in millions):
+Added: Years ended December 31,
Cash paid for amounts included in the measurement of lease liabilities:
15 unchanged sentences
Carrying amount
−Removed: 6.50 % Senior Notes due November 2020 (a)
−Removed: 6.375 % Senior Notes due December 2021 (a)
−Removed: 5.52 % Senior Secured Notes due May 2022 (b)
−Removed: 3.80 % Senior Notes due October 2022 (a)
−Removed: 0.50 % Exchangeable Bonds due January 2023 (a)
−Removed: 5.375 % Senior Secured Notes due May 2023 (d)
−Removed: 9.00 % Senior Notes due July 2023 (c)
−Removed: 5.875 % Senior Secured Notes due January 2024 (d)
−Removed: 7.75 % Senior Secured Notes due October 2024 (d)
−Removed: 6.25 % Senior Secured Notes due December 2024 (d)
−Removed: 6.125 % Senior Secured Notes due August 2025 (d)
−Removed: 7.25 % Senior Notes due November 2025 (c)
−Removed: 7.50 % Senior Notes due January 2026 (c)
−Removed: 6.875 % Senior Secured Notes due February 2027 (d)
−Removed: 7.45 % Notes due April 2027 (a)
−Removed: 8.00 % Debentures due April 2027 (a)
−Removed: 7.00 % Notes due June 2028 (e)
−Removed: Finance lease contract due August 2029
−Removed: 7.50 % Notes due April 2031 (a)
−Removed: 6.80 % Senior Notes due March 2038 (a)
−Removed: 7.35 % Senior Notes due December 2041 (a)
+Added: 6.50 % Senior Notes due November 2020
+Added: 6.375 % Senior Notes due December 2021
+Added: 5.52 % Senior Secured Notes due May 2022
+Added: 3.80 % Senior Notes due October 2022
+Added: 0.50 % Exchangeable Senior Bonds due January 2023
+Added: 5.375 % Senior Secured Notes due May 2023
+Added: 9.00 % Senior Notes due July 2023
+Added: 5.875 % Senior Secured Notes due January 2024
+Added: 7.75 % Senior Secured Notes due October 2024
+Added: 6.25 % Senior Secured Notes due December 2024
+Added: 6.125 % Senior Secured Notes due August 2025
+Added: 7.25 % Senior Notes due November 2025
+Added: 7.50 % Senior Notes due January 2026
+Added: 2.50 % Senior Guaranteed Exchangeable Bonds due January 2027
+Added: 11.50 % Senior Guaranteed Notes due January 2027
+Added: 6.875 % Senior Secured Notes due February 2027
+Added: 8.00 % Senior Notes due February 2027
+Added: 7.45 % Notes due April 2027
+Added: 8.00 % Debentures due April 2027
+Added: 7.00 % Notes due June 2028
+Added: 7.50 % Notes due April 2031
+Added: 6.80 % Senior Notes due March 2038
+Added: 7.35 % Senior Notes due December 2041
Less debt due within one year
−Removed: 6.50% Senior Notes due November 2020 (a)
−Removed: 5.52% Senior Secured Notes due May 2022 (b)
−Removed: 5.375% Senior Secured Notes due May 2023 (d)
−Removed: 5.875% Senior Secured Notes due January 2024 (d)
−Removed: 7.75% Senior Secured Notes due October 2024 (d)
−Removed: 6.25% Senior Secured Notes due December 2024 (d)
−Removed: 6.125% Senior Secured Notes due August 2025 (d)
−Removed: Finance lease contract due August 2029
+Added: 6.50% Senior Notes due November 2020
+Added: 6.375% Senior Notes due December 2021
+Added: 5.52% Senior Secured Notes due May 2022
+Added: 5.375% Senior Secured Notes due May 2023
+Added: 5.875% Senior Secured Notes due January 2024
+Added: 7.75% Senior Secured Notes due October 2024
+Added: 6.25% Senior Secured Notes due December 2024
+Added: 6.125% Senior Secured Notes due August 2025
+Added: 2.50% Senior Guaranteed Exchangeable Bonds due January 2027
+Added: 11.50% Senior Guaranteed Notes due January 2027
Total debt due within one year
Total long-term debt
−Removed: (a) Transocean Inc., a 100 percent owned direct subsidiary of Transocean Ltd., is the issuer of the notes and debentures.
−Removed: Transocean Ltd.
−Removed: has provided a full and unconditional guarantee of the notes and debentures.
−Removed: Transocean Ltd.
−Removed: has no independent assets or operations, and its other subsidiaries not owned indirectly through Transocean Inc.
−Removed: Transocean Inc.
−Removed: has no independent assets and operations, other than those related to its investments in non-guarantor operating companies and balances primarily pertaining to its cash and cash equivalents and debt.
−Removed: Except as discussed under “Indentures,” Transocean Ltd.
−Removed: and Transocean Inc.
−Removed: are not subject to any significant restrictions on their ability to obtain funds from their consolidated subsidiaries by dividends, loans or capital distributions.
+Added: (a) Transocean Inc., a 100 percent owned direct subsidiary of Transocean Ltd., is the issuer of the notes and debentures (the “Legacy Guaranteed Notes”).
+Added: The Legacy Guaranteed Notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd.
(b) The subsidiary issuer of the unregistered senior secured notes is a wholly owned indirect subsidiary of Transocean Inc.
The senior secured notes are fully and unconditionally guaranteed by the owner of the collateral rig.
−Removed: See “—Debt issuances—Senior secured notes.”
−Removed: (c) Transocean Inc.
−Removed: is the issuer of the unregistered notes.
−Removed: The priority guaranteed senior unsecured notes, which rank equal in right of payment of all of our existing and future unsecured unsubordinated obligations and rank structurally senior to the extent of the value of the assets of the subsidiaries guaranteeing the notes, are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd.
−Removed: and certain wholly owned subsidiaries of Transocean Inc.
−Removed: See “—Debt issuances—Priority guaranteed senior unsecured notes.”
−Removed: (d) Each subsidiary issuer of the respective unregistered senior secured notes is a wholly owned indirect subsidiary of Transocean Inc.
+Added: (c) Each subsidiary issuer of the respective unregistered senior secured notes is a wholly owned indirect subsidiary of Transocean Inc.
The senior secured notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd., Transocean Inc.
and, in each case, the owner of the respective collateral rig or rigs.
−Removed: See “—Debt issuances—Senior secured notes.”
−Removed: (e) The subsidiary issuer of the registered notes is a wholly owned indirect subsidiary of Transocean Inc.
−Removed: Transocean Inc.
−Removed: has provided a full and unconditional guarantee of the notes and debentures.
−Removed: See Note 23—Subsequent Events.
+Added: (d) Transocean Inc.
+Added: is the issuer of the unregistered notes (collectively, the “Priority Guaranteed Notes”).
+Added: The guaranteed senior unsecured notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd.
+Added: and certain wholly owned indirect subsidiaries of Transocean Inc.
+Added: and rank equal in right of payment of all of our existing and future unsecured unsubordinated obligations.
+Added: Such notes are structurally senior to the Legacy Guaranteed Notes and the 7.00% notes due June 2028 and are structurally subordinate to the Senior Priority Guaranteed Notes, as defined below, to the extent of the value of the assets of the subsidiaries guaranteeing the notes.
+Added: (e) Transocean Inc.
+Added: is the issuer of the unregistered notes (together, the “Senior Priority Guaranteed Notes”).
+Added: The priority guaranteed senior unsecured notes are fully and unconditionally, jointly and severally, guaranteed by Transocean Ltd.
+Added: and certain wholly owned indirect subsidiaries of Transocean Inc.
+Added: and rank equal in right of payment of all of our existing and future unsecured unsubordinated obligations.
+Added: Such notes are structurally senior to the Priority Guaranteed Notes to the extent of the value of the assets of the subsidiaries guaranteeing the notes.
+Added: (f) The subsidiary issuer of the registered notes is a wholly owned indirect subsidiary of Transocean Inc.
+Added: The notes are fully and unconditionally guaranteed by Transocean Inc.
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Scheduled maturities —At December 31, 2019, the scheduled maturities of our debt were as follows (in millions):
+Added: Transocean Ltd.
+Added: has no independent assets or operations, and its other subsidiaries not owned indirectly through Transocean Inc.
+Added: Transocean Inc.
+Added: has no independent assets and operations, other than those related to its investments in non-guarantor operating companies and balances primarily pertaining to its cash and cash equivalents and debt.
+Added: Transocean Ltd.
+Added: and Transocean Inc.
+Added: are not subject to any significant restrictions on their ability to obtain funds from their consolidated subsidiaries by dividends, loans or capital distributions (see “—Indentures”).
+Added: Scheduled maturities —At December 31, 2020, the scheduled maturities of our debt, including the principal installments and other installments, representing the undiscounted projected interest payments of debt exchanged, were as follows (in millions):
Years ending December 31,
−Removed: Total principal amount of debt
+Added: Total installments of debt
Total debt-related balances, net
1 unchanged sentence
Indentures —The indentures that govern our debt generally contain covenants that, among other things, limit our ability to incur certain liens on our drilling units without equally and ratably securing the notes, to engage in certain sale and lease back transactions covering any of our drilling units, to allow our subsidiaries to incur certain additional debt, or to engage in certain merger, consolidation or reorganization transactions or to enter into a scheme of arrangement qualifying as an amalgamation.
−Removed: Additionally, the indentures that govern the 5.52% senior secured notes due May 2022 (the “5.52% Senior Secured Notes”), the 5.375% Senior Secured Notes due May 2023 (the “5.375% Senior Secured Notes”), the 5.875% senior secured notes due January 2024 (the “5.875% Senior Secured Notes”), the 7.75% senior secured notes due October 2024, the 6.25% senior secured notes due December 2024, the 6.125% senior secured notes due August 2025 (the “6.125% Senior Secured Notes”) and the 6.875% senior secured notes due February 2027 (the “6.875% Senior Secured Notes”) contain covenants that limit the ability of our subsidiaries that own or operate the collateral rigs to declare or pay dividends to their affiliates.
+Added: Additionally, the indentures that govern the 5.52% senior secured notes due May 2022, the 5.375% Senior Secured Notes due May 2023 (the “5.375% Senior Secured Notes”), the 5.875% senior secured notes due January 2024 (the “5.875% Senior Secured Notes”), the 7.75% senior secured notes due October 2024, the 6.25% senior secured notes due December 2024, the 6.125% senior secured notes due August 2025 (the “6.125% Senior Secured Notes”) and the 6.875% senior secured notes due February 2027 (the “6.875% Senior Secured Notes”) contain covenants that limit the ability of our subsidiaries that own or operate the collateral rigs to declare or pay dividends to their affiliates.
+Added: The indentures that govern the 2.50% senior guaranteed exchangeable bonds due January 2027 (the “Senior Guaranteed Exchangeable Bonds”) and the Exchangeable Senior Bonds require such bonds to be repurchased upon the occurrence of certain fundamental changes and events, at specified prices depending on the particular fundamental change or event, which include changes and events related to certain (i) change of control events applicable to Transocean Ltd.
+Added: or Transocean Inc., (ii) the failure of our shares to be listed or quoted on a national securities exchange and (iii) specified tax matters.
Interest rate adjustments —The interest rates for certain of our notes are subject to adjustment from time to time upon a change to the credit rating of our non-credit enhanced senior unsecured long-term debt.
−Removed: At December 31, 2019, the interest rate in effect for the 6.375% senior notes due December 2021, the 3.80% senior notes due October 2022 and the 7.35% senior notes due December 2041 was 8.375 percent, 5.80 percent and 9.35 percent, respectively.
−Removed: Secured Credit Facility —In June 2018, we entered into a bank credit agreement, which established a $ 1.0 billion secured revolving credit facility (the “Secured Credit Facility”), and in May, July, September and December 2019, we amended the terms of the Secured Credit Facility to, among other changes, increase the borrowing capacity to $ 1.3 billion and add to and clarify the lender parties and their respective commitments under the facility.
−Removed: The Secured Credit Facility is scheduled to expire on the earlier of (i) June 22, 2023 and (ii) if greater than $ 300 million aggregate principal amount of our 9.00% senior notes due July 2023 (the “9.00% Senior Notes”) remain outstanding in April 2023, such date.
+Added: At December 31, 2020, the interest rate in effect for the 6.375 % senior notes due December 2021, 3.80 % senior notes due October 2022 and the 7.35 % senior notes due December 2041 was 8.375 percent, 5.80 percent and 9.35 percent, respectively.
+Added: Secured Credit Facility —As of December 31, 2020, we have a bank credit agreement, as amended from time to time, that established a $ 1.3 billion secured revolving credit facility (the “Secured Credit Facility”), which is scheduled to expire on June 22, 2023.
The Secured Credit Facility is guaranteed by Transocean Ltd.
and certain wholly owned subsidiaries.
−Removed: The Secured Credit Facility is secured by, among other things, a lien on the ultra-deepwater floaters Deepwater Asgard, Deepwater Invictus , Deepwater Orion , Deepwater Skyros , Dhirubhai Deepwater KG2 and Discoverer Inspiration and the harsh environment floaters Transocean Barents and Transocean Spitsbergen , the aggregate carrying amount of which was $ 4.4 billion at December 31, 2019.
+Added: The Secured Credit Facility is secured by, among other things, a lien on the ultra-deepwater floaters Deepwater Asgard , Deepwater Corcovado , Deepwater Invictus , Deepwater Mykonos , Deepwater Orion , Deepwater Skyros , Development Driller III , Dhirubhai Deepwater KG2 and Discoverer Inspiration and the harsh environment floaters Transocean Barents and Transocean Spitsbergen , the aggregate carrying amount of which was $ 5.2 billion at December 31, 2020.
+Added: The maximum borrowing capacity will be reduced to $ 1.0 billion if, and so long as, our leverage ratio, measured as the aggregate principal amount of debt outstanding to earnings before interest, taxes, depreciation and amortization, exceeds 10.00 to 1.00.
The Secured Credit Facility contains covenants that, among other things, include maintenance of certain guarantee and collateral coverage ratios, a maximum debt to capitalization ratio of 0.60 to 1.00 and minimum liquidity of $ 500 million.
2 unchanged sentences
We may borrow under the Secured Credit Facility at either (1) the reserve adjusted London interbank offered rate plus a margin (the “Secured Credit Facility Margin”), which ranges from 2.625 percent to 3.375 percent based on the credit rating of the Secured Credit Facility, or (2) the base rate specified in the credit agreement plus the Secured Credit Facility Margin, minus one percent per annum.
−Removed: Throughout the term of the Secured Credit Facility, we pay a facility fee on the amount of the underlying commitment which ranges from 0.375 percent to 1.00 percent based on the credit rating of the Secured Credit Facility.
+Added: Throughout the term of the Secured Credit Facility, we pay a facility fee on the amount of the underlying commitment which ranges from
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: 0.375 percent to 1.00 percent based on the credit rating of the Secured Credit Facility.
At December 31, 2020, based on the credit rating of the Secured Credit Facility on that date, the Secured Credit Facility Margin was 3.375 percent and the facility fee was 0.875 percent.
1 unchanged sentence
Debt issuances
−Removed: Priority guaranteed senior unsecured notes —On October 25, 2018, we issued $ 750 million aggregate principal amount of 7.25 % senior unsecured notes due November 2025 (the “7.25% Senior Notes”), and we received aggregate cash proceeds of $ 735 million, net of issue costs.
−Removed: We may redeem all or a portion of the 7.25% Senior Notes on or prior to November 1, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
−Removed: On October 17, 2017, we completed an offering of an aggregate principal amount of $ 750 million of 7.50 % senior unsecured notes due January 15, 2026 (the “7.50% Senior Notes”), and we received aggregate cash proceeds of $ 742 million, net of issue costs.
+Added: Guaranteed senior unsecured notes— On January 17, 2020, we issued $ 750 million aggregate principal amount of 8.00 % senior notes due February 2027 (the “8.00% Guaranteed Notes”), and we received aggregate cash proceeds of $ 743 million, net of issue costs.
+Added: We may redeem all or a portion of the 8.00% Guaranteed Notes on or prior to February 1, 2023 at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
+Added: On October 25, 2018, we issued $ 750 million aggregate principal amount of 7.25 % senior notes due November 2025 (the “7.25% Guaranteed Notes”), and we received aggregate cash proceeds of $ 735 million, net of issue costs.
+Added: We may redeem all or a portion of the 7.25% Guaranteed Notes on or prior to November 1, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
+Added: Priority guaranteed senior unsecured notes —On September 11, 2020, we issued $ 687 million aggregate principal amount of 11.50 % senior guaranteed notes due January 2027 (the “11.50% Senior Guaranteed Notes”) in non-cash exchange offers, pursuant to an exchange offer memorandum, dated August 10, 2020, as supplemented, for an aggregate principal amount of $ 1.5 billion of several series of our existing debt securities that were validly tendered and accepted for purchase (the “Exchange Offers”).
+Added: In the year ended December 31, 2020, as a result of the Exchange Offers, we recognized a gain of $ 355 million ($ 0.58 per diluted share), with no tax effect, associated with the restructuring of debt (see “—Debt restructuring, repayment and retirement”).
+Added: We may redeem all or a portion of the 11.50% Senior Guaranteed Notes prior to July 30, 2023 at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
+Added: We may also use the net cash proceeds of certain equity offerings by Transocean Ltd.
+Added: to redeem, on one or more occasions prior to July 30, 2023, up to a maximum of 40 percent of the original aggregate principal amount of the 11.50% Senior Guaranteed Notes, subject to certain adjustments, at a redemption price equal to 111.50 percent of the aggregate principal amount.
+Added: Senior guaranteed exchangeable bonds —On August 14, 2020, we issued $ 238 million aggregate principal amount of Senior Guaranteed Exchangeable Bonds in non-cash private exchanges for $ 397 million aggregate principal amount of the Exchangeable Senior Bonds (collectively, the “Private Exchange” and, together with the Exchange Offers, the “Exchange Transactions”).
+Added: In the year ended December 31, 2020, as a result of the Private Exchange, we recognized a gain of $ 72 million ($ 0.12 per diluted share), with no tax effect, associated with the restructuring of debt (see “—Debt restructuring, repayment and retirement”).
+Added: The Senior Guaranteed Exchangeable Bonds may be converted at any time prior to the close of business on the second business day immediately preceding the maturity date or redemption date at the current exchange rate of 162.1626 Transocean Ltd.
+Added: shares per $1,000 note, which implies a conversion price of $ 6.17 per share, subject to adjustment upon the occurrence of certain events.
+Added: We may redeem all or a portion of the Senior Guaranteed Exchangeable Bonds (i) on or after August 14, 2022, if certain conditions related to the price of our shares have been satisfied, at a price equal to 100 percent of the aggregate principal amount and (ii) on or after August 14, 2023, at specified redemption prices.
+Added: We recorded the conversion feature of the Senior Guaranteed Exchangeable Bonds, measured at its estimated fair value of $ 46 million, to additional paid-in capital.
+Added: We estimated the fair value by employing a binomial lattice model and by using significant other observable inputs, representative of a Level 2 fair value measurement, including the expected volatility of the market price for our shares.
+Added: Perestroika AS, an entity affiliated with one of our directors that beneficially owns approximately 10 percent of our shares, exchanged $ 356 million aggregate principal amount of the Exchangeable Senior Bonds for $ 213 million aggregate principal amount of Senior Guaranteed Exchangeable Bonds.
+Added: Perestroika AS has certain registration rights related to its shares and shares that may be issued in connection with any exchange of its Senior Guaranteed Exchangeable Bonds.
+Added: At December 31, 2020, Perestroika AS held $ 213 million aggregate principal amount of the Senior Guaranteed Exchangeable Bonds.
+Added: Exchangeable senior bonds —In the year ended December 31, 2018, in connection with the Songa acquisition transactions, we issued $ 863 million aggregate principal amount of Exchangeable Senior Bonds, as partial consideration for the Songa shares and as consideration for refinancing certain Songa indebtedness.
+Added: The Exchangeable Senior Bonds may be converted at any time prior to the close of business on the business day immediately preceding the maturity date at the current exchange rate of 97.29756 shares per $1,000 note, which implies a conversion price of $ 10.28 per share, subject to adjustment upon the occurrence of certain events.
+Added: We estimated the aggregate fair value of the Exchangeable Senior Bonds, measured as of the issuance date, to be $ 1.0 billion, which represented a substantial premium of $ 172 million above par, and we recorded such premium to additional paid-in capital.
+Added: We estimated the fair value using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments.
+Added: At December 31, 2019, Perestroika AS held $ 356 million aggregate principal amount of the Exchangeable Senior Bonds, which were exchanged for $ 213 million aggregate principal amount of Senior Guaranteed Exchangeable Bonds.
+Added: See Note 21—Subsequent Event.
+Added: Senior secured notes —On February 1, 2019, we issued $ 550 million aggregate principal amount of 6.875 % Senior Secured Notes, and we received $ 539 million aggregate cash proceeds, net of discount and issue costs.
+Added: The 6.875% Senior Secured Notes are
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: redeem all or a portion of the 7.50% Senior Notes on or prior to January 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
−Removed: Senior secured notes —On February 1, 2019, we issued $ 550 million aggregate principal amount of 6.875 % Senior Secured Notes, and we received approximately $ 539 million aggregate cash proceeds, net of discount and issue costs.
−Removed: The 6.875% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Poseidon and the equity of the wholly owned subsidiaries that own or operate the collateral rig.
−Removed: Additionally, we were required to deposit $ 19 million in restricted cash accounts to satisfy debt service requirements.
+Added: secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Poseidon and the equity of the wholly owned subsidiaries that own or operate the collateral rig.
+Added: Additionally, we are required to maintain certain balances in restricted cash accounts to satisfy debt service requirements.
We are required to pay semiannual installments of (a) interest only through August 2021 and (b) principal and interest thereafter.
−Removed: We may redeem all or a portion of the 6.875% Senior Secured Notes on or prior to February 1, 2022 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
−Removed: On May 24, 2019, we issued $ 525 million aggregate principal amount of 5.375 % Senior Secured Notes, and we received approximately $ 517 million aggregate cash proceeds, net of discount and issue costs.
+Added: We may redeem all or a portion of the 6.875% Senior Secured Notes on or prior to February 1, 2022 at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
+Added: On May 24, 2019, we issued $ 525 million aggregate principal amount of 5.375 % Senior Secured Notes, and we received $ 517 million aggregate cash proceeds, net of discount and issue costs.
The 5.375% Senior Secured Notes are secured by the assets and earnings associated with the harsh environment floaters Transocean Endurance and Transocean Equinox and the equity of the wholly owned subsidiaries that own or operate the collateral rigs.
−Removed: Additionally, we were required to deposit $ 14 million in restricted cash accounts to satisfy debt service requirements.
−Removed: We are required to pay semiannual installments of (a) interest only through May 2020 and (b) principal and interest thereafter.
−Removed: We may redeem all or a portion of the 5.375% Senior Secured Notes on or prior to May 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
+Added: Additionally, we are required to maintain certain balances in restricted cash accounts to satisfy debt service requirements.
+Added: We are required to pay semiannual installments of principal and interest.
+Added: We may redeem all or a portion of the 5.375% Senior Secured Notes on or prior to May 15, 2021 at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
In July 2018, we issued $ 750 million aggregate principal amount of 5.875 % Senior Secured Notes and $ 600 million aggregate principal amount of 6.125 % Senior Secured Notes, and we received aggregate cash proceeds of $ 733 million and $ 586 million, respectively, net of discount and issue costs.
1 unchanged sentence
The 6.125% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Pontus and the equity of the wholly owned subsidiaries that own or operate the collateral rig.
−Removed: Additionally, we were required to deposit $ 63 million with respect to the 5.875% Senior Secured Notes, and $ 51 million with respect to the 6.125% Senior Secured Notes, in restricted cash accounts to satisfy debt service and reserve requirements.
+Added: Additionally, we are required to maintain certain balances in restricted cash accounts to satisfy debt service and reserve requirements.
We are required to pay semiannual installments of principal and interest.
−Removed: We may redeem all or a portion of the 5.875% Senior Secured Notes or the 6.125% Senior Secured Notes on or prior to July 15, 2021 or August 1, 2021, respectively, at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
−Removed: On May 5, 2017, we issued $ 410 million aggregate principal amount of 5.52 % Senior Secured Notes, and we received aggregate cash proceeds of $ 403 million, net of issue costs.
−Removed: The 5.52% Senior Secured Notes are secured by the assets and earnings associated with the ultra-deepwater floater Deepwater Conqueror , the equity of the wholly owned subsidiaries that own and operate the collateral rig, and certain related assets.
−Removed: We are required to pay quarterly installments of principal and interest on the 5.52% Senior Secured Notes.
−Removed: We may redeem all or a portion of the 5.52% Senior Secured Notes on or prior to December 31, 2021 at a price equal to 100 percent of the aggregate principal amount plus, subject to certain exceptions, a make-whole amount.
−Removed: At December 31, 2019 and 2018, we had an aggregate amount of $ 386 million and $ 347 million, respectively, deposited in restricted cash accounts to satisfy debt service and working capital requirements for the senior secured notes.
−Removed: At December 31, 2019, the aggregate carrying amount of rigs encumbered for the senior secured notes, including Deepwater Conqueror, Deepwater Pontus , Deepwater Proteus , Deepwater Thalassa , Deepwater Poseidon , Transocean Enabler , Transocean Encourage , Transocean Endurance and Transocean Equinox , was $ 6.3 billion.
−Removed: At December 31, 2018, the aggregate carrying amount of rigs encumbered for the senior secured notes, including Deepwater Conqueror, Deepwater Pontus , Deepwater Proteus , Deepwater Thalassa , Transocean Enabler and Transocean Encourage , was $ 4.4 billion.
−Removed: We will be required to redeem the senior secured notes at a price equal to 100 percent of the aggregate principal amount without a make-whole provision, upon the occurrence of certain events related to the respective collateral rigs and the related drilling contracts.
−Removed: Exchangeable bonds —In connection with the Songa acquisition transactions, we issued $ 863 million aggregate principal amount of Exchangeable Bonds, as partial consideration for the Songa shares and as consideration for refinancing certain Songa indebtedness.
−Removed: The Exchangeable Bonds may be converted at any time prior to the maturity date at an exchange rate of 97.29756 shares per $1,000 note, equivalent to a conversion price of $ 10.28 per share, subject to adjustment upon the occurrence of certain events.
−Removed: Holders of Exchangeable Bonds may require us to repurchase all or a portion of such holder’s Exchangeable Bonds upon the occurrence of certain events.
−Removed: The aggregate fair value of the Exchangeable Bonds, measured as of the issuance date, was $ 1.0 billion, which represented a substantial premium of $ 172 million above par, and we recorded such premium to additional paid-in capital.
−Removed: We estimated the fair value using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments.
−Removed: Debt assumptions and repayments
−Removed: In connection with the Songa acquisition, we assumed the rights and obligations under certain credit agreements, a subscription agreement and bond loan agreements.
−Removed: In the year ended December 31, 2018, we made an aggregate cash payment equivalent to $ 1.65 billion to repay the debt obligations outstanding under these agreements, and we terminated the underlying agreements.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Debt retirements
−Removed: Repurchases and repayments —During the three years ended December 31, 2019, we repurchased in the open market debt securities with aggregate principal amounts as follows (in millions):
+Added: We may redeem all or a portion of the 5.875% Senior Secured Notes or the 6.125% Senior Secured Notes on or prior to July 15, 2021 or August 1, 2021, respectively, at a price equal to 100 percent of the aggregate principal amount plus a make-whole premium, and subsequently, at specified redemption prices.
+Added: Encumbered assets —At December 31, 2020 and 2019, we had restricted cash and cash equivalents of $ 365 million and $ 386 million, respectively, deposited in restricted accounts to satisfy debt service and reserve requirements for the senior secured notes.
+Added: At December 31, 2020 and 2019, the rigs encumbered for the senior secured notes, including Deepwater Conqueror, Deepwater Pontus , Deepwater Proteus , Deepwater Thalassa , Deepwater Poseidon , Transocean Enabler , Transocean Encourage , Transocean Endurance and Transocean Equinox , had an aggregate carrying amount of $ 6.1 billion and $ 6.3 billion, respectively.
+Added: We will be required to redeem the senior secured notes at a price equal to 100 percent of the aggregate principal amount without a make-whole premium, upon the occurrence of certain events related to the respective collateral rigs and the related drilling contracts.
+Added: Debt restructuring, repayment and retirement
+Added: Restructuring and early retirement —During the years ended December 31, 2020, 2019 and 2018, we restructured or retired certain notes as a result of exchange offers, private exchanges, redemption, tender offers and open market repurchases.
+Added: We recorded the Exchange Transactions completed in August 2020 and September 2020 under ASC 470-60, Troubled Debt Restructuring by Debtors.
+Added: The aggregate principal amounts, cash payments and recognized gain or loss for such transactions were as follows (in millions):
Years ended December 31,
−Removed: 2.50% Senior Notes due October 2017
−Removed: 6.00% Senior Notes due March 2018
−Removed: 7.375% Senior Notes due April 2018
6.50% Senior Notes due November 2020
1 unchanged sentence
3.80% Senior Notes due October 2022
+Added: 0.50% Exchangeable Senior Bonds due January 2023
+Added: 5.375% Senior Secured Notes due May 2023
9.00% Senior Notes due July 2023
−Removed: Aggregate principal amount retired
−Removed: Aggregate cash payment
−Removed: Aggregate net loss
−Removed: Tender offers —On February 5, 2019, we completed cash tender offers to purchase up to $ 700 million aggregate principal amount of certain notes (the “2019 Tendered Notes”).
−Removed: On July 11, 2017, we completed cash tender offers to purchase up to $ 1.5 billion aggregate principal amount of certain notes (the “2017 Tendered Notes”).
−Removed: During the years ended December 31, 2019 and 2017, we received valid tenders from holders of aggregate principal amounts of the 2019 Tendered Notes and 2017 Tendered Notes as follows (in millions):
−Removed: Years ended December 31,
−Removed: 2.50% Senior Notes due October 2017
−Removed: 6.00% Senior Notes due March 2018
−Removed: 7.375% Senior Notes due April 2018
7.25% Senior Notes due November 2025
+Added: 7.50% Senior Notes due January 2026
+Added: 8.00% Senior Notes due February 2027
+Added: 7.45% Notes due April 2027
+Added: 8.00% Debentures due April 2027
+Added: 7.00% Notes due June 2028
+Added: 7.50% Notes due April 2031
+Added: 6.80% Senior Notes due March 2038
7.35% Senior Notes due December 2041
−Removed: 3.80% Senior Notes due October 2022
−Removed: 9.00% Senior Notes due July 2023
−Removed: Aggregate principal amount retired
+Added: Aggregate principal amount restructured or retired
Aggregate cash payment
−Removed: Aggregate net loss
−Removed: Scheduled maturities and installments —In the years ended December 31, 2019, 2018 and 2017, we made cash payments of $ 354 million, $ 257 million and $ 299 million to repay other indebtedness in scheduled installments.
−Removed: On the scheduled maturity date of October 16, 2017, we made a cash payment of $ 152 million to repay the outstanding 2.50 % senior notes due October 2017, at a price equal to the aggregate principal amount.
−Removed: Note 11—Derivative Instruments
−Removed: Forward exchange contracts —At December 31, 2019, we held undesignated forward exchange contracts, extending through March 2020, with an aggregate notional payment amount of $ 46 million and an aggregate notional receive amount of NOK 405 million, representing a weighted average exchange rate of NOK 8.90 to $1.
−Removed: At December 31, 2018, we held undesignated forward exchange contracts, extending through June 2019, with an aggregate notional payment amount of $ 76 million and an aggregate notional receive amount of NOK 600 million, representing a weighted average exchange rate of NOK 7.94 to $1.
−Removed: In the years ended December 31, 2019 and 2018, we recognized a loss of $ 3 million and $ 10 million, respectively, recorded in other, net, associated with undesignated forward exchange contracts.
−Removed: At December 31, 2019 and 2018, the undesignated forward exchange contracts represented an asset of $ 1 million and a liability of $ 6 million, respectively, recorded in other current assets and other current liabilities, respectively.
−Removed: Currency swaps —In connection with the Songa acquisition, we acquired undesignated currency swaps to receive Norwegian kroner in exchange for paying U.S.
−Removed: dollars at a fixed exchange rate.
−Removed: On the acquisition date, the aggregate fair value of the currency swaps represented a liability of $ 81 million.
−Removed: In the year ended December 31, 2018, we made an aggregate cash payment of $ 92 million in connection with the settlement and termination of the currency swaps, and we recognized a loss of $ 11 million, recorded in other, net.
−Removed: Interest rate swaps —In connection with the Songa acquisition, we acquired undesignated interest rate swaps, which we repaid in the year ended December 31, 2018.
−Removed: On the acquisition date, the aggregate fair value of the interest rate swaps represented an asset of $ 14 million.
−Removed: In the year ended December 31, 2018, we received aggregate cash proceeds of $ 18 million in connection with the settlement and termination of the interest rate swaps, and we recognized a gain of $ 4 million, recorded in other, net.
+Added: Aggregate principal amount of debt issued in exchanges
+Added: Aggregate net gain (loss)
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: Debt assumption and repayment —In connection with the Songa acquisition, we assumed the rights and obligations under certain credit agreements, a subscription agreement and bond loan agreements.
+Added: In the year ended December 31, 2018, we made an aggregate cash payment equivalent to $ 1.65 billion to repay the outstanding debt obligations and terminate these agreements, and as a result, we recognized a loss of $ 3 million associated with the repayment of debt.
+Added: Scheduled maturities and installments —On the scheduled maturity date of November 16, 2020, we made a cash payment of $ 153 million to repay the outstanding 6.50 % senior notes due November 2020, at a price equal to the aggregate principal amount.
+Added: In the years ended December 31, 2020, 2019 and 2018, we made an aggregate cash payment of $ 375 million, $ 354 million and $ 257 million, respectively, to repay other indebtedness in scheduled installments.
Note 10—Income Taxes
10 unchanged sentences
Income tax expense
−Removed: The following is a reconciliation of the income tax expense (benefit) computed at the Swiss holding company federal statutory rate of 7.83 % and our reported provision for income taxes (in millions):
+Added: A reconciliation of the income tax benefit computed at the Swiss holding company federal statutory rate of 7.83 % and our reported consolidated income tax expense was as follows (in millions):
Years ended December 31,
1 unchanged sentence
Earnings subject to rates different than the Swiss federal statutory rate
−Removed: Effect of operating structural changes in the U.S.
−Removed: Changes in valuation allowance
Losses on impairment
Deemed profits taxes
−Removed: Base erosion and anti-abuse tax
Withholding taxes
−Removed: Currency revaluation of Norwegian assets
−Removed: Effect of U.S.
−Removed: Litigation matters, primarily related to the Macondo well incident
+Added: Base erosion and anti-abuse tax
Benefit from foreign tax credits
+Added: Currency revaluation
Changes in unrecognized tax benefits, net
+Added: Effect of U.S.
+Added: Changes in valuation allowance
+Added: Effect of operating structural changes
+Added: Effect of U.S.
Income tax expense
+Added: The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted in March 2020, included certain changes to U.S.
+Added: tax law, including, among others, extending up to five years the carryback period for net operating losses generated in tax years between December 31, 2017 and January 1, 2021.
+Added: In the year ended December 31, 2020, we recognized an income tax benefit of $ 28 million related to the carryback of our net operating losses under this provision.
+Added: In the year ended December 31, 2017, the U.S.
+Added: introduced certain changes to tax law (“U.S.
+Added: tax reform”), such as, among others, a transition tax and a base erosion and anti-abuse tax.
+Added: In the year ended December 31, 2018, to calculate the one-time transition tax, we completed the evaluation of our unremitted earnings and profits of certain of our non-U.S.
+Added: subsidiaries that owned by U.S.
+Added: subsidiaries for which the necessary information was not previously available, and we recorded income tax expense of $ 120 million for transition taxes, partially offset by $ 16 million for the utilization of estimated foreign tax credits.
+Added: In the years ended December 31, 2019 and 2018, we
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
+Added: recognized income tax expense of $ 21 million and $ 33 million, respectively, related to the bareboat charter structure of our U.S.
+Added: operations, a significant portion of which is contractually reimbursable by our customers due to a change-in-law provision in certain drilling contracts.
Deferred taxes —The significant components of our deferred tax assets and liabilities were as follows (in millions):
2 unchanged sentences
Interest expense limitation
−Removed: Accrued payroll expenses not currently deductible
−Removed: Deferred income
−Removed: Loss contingencies
+Added: Accrued payroll costs not currently deductible
United Kingdom charter limitation
1 unchanged sentence
Accrued expenses
+Added: Deferred income
+Added: Loss contingencies
Valuation allowance
6 unchanged sentences
foreign tax credit carryforwards of $ 21 million and $ 22 million, respectively, which will expire between 2024 and 2030.
−Removed: The deferred tax assets related to our net operating losses were generated in various worldwide tax jurisdictions.
−Removed: At December 31, 2019, our net deferred tax assets related to our net operating loss carryforwards included $ 354 million, which do not expire and $ 217 million, which will expire beginning between 2020 and 2037.
−Removed: At December 31, 2018, our net deferred tax assets related to our net operating loss carryforwards included $ 307 million, which do not expire and $ 172 million, which will expire beginning between 2021 and 2038.
−Removed: In the year ended December 31, 2019, our deferred tax liabilities for depreciation increased primarily as a result of certain operating structural changes that we made in the U.S.
+Added: Deferred tax assets related to our net operating losses were generated in various worldwide tax jurisdictions.
+Added: At December 31, 2020, our net deferred tax assets related to our net operating loss carryforwards included $ 572 million, which do not expire, and $ 237 million, which will expire between 2021 and 2037.
As of December 31, 2020, our consolidated cumulative loss incurred over the recent three-year period represented significant objective negative evidence for the evaluation of the realizability of our deferred tax assets.
−Removed: Although such evidence has limited our ability to consider other subjective evidence, we analyze each jurisdiction separately.
−Removed: We consider objective evidence, such as contract backlog activity, in jurisdictions in which we have profitable contracts.
+Added: Although such evidence has limited our ability to consider other subjective evidence, we evaluate each jurisdiction separately.
+Added: We consider objective evidence, such as contract backlog activity, in jurisdictions in which we have profitable contracts, and the ability to carryback losses or utilize losses against potential exposures.
If estimated future taxable income changes during the carryforward periods or if the cumulative loss is no longer present, we may adjust the amount of deferred tax assets that we expect to realize.
At December 31, 2020 and 2019, due to uncertainty of realization, we had a valuation allowance of $ 685 million and $ 716 million, respectively, on net operating losses and other deferred tax assets.
−Removed: Our other deferred tax liabilities include taxes related to the earnings of certain subsidiaries, which are not indefinitely reinvested or that will not be indefinitely reinvested in the future.
−Removed: At December 31, 2019, we had $ 254 million of unremitted earnings which we consider to be indefinitely reinvested.
−Removed: If we were to make a distribution from the unremitted earnings of these subsidiaries, we would be subject to taxes payable of $ 13 million.
−Removed: If our expectations were to change regarding future tax consequences, we may be required to record additional deferred taxes that could have a material effect on our consolidated statement of financial position, results of operations or cash flows.
+Added: Our deferred tax liabilities include taxes related to the earnings of certain subsidiaries that are not indefinitely reinvested.
+Added: As of December 31, 2020, we consider the earnings of certain of our subsidiaries to be indefinitely reinvested, and we have not provided for deferred taxes on earnings of such subsidiaries.
+Added: If we were to make a distribution from the unremitted earnings of subsidiaries with indefinitely reinvested earnings, we may be subject to taxes payable to various jurisdictions.
+Added: However, it is not practicable to estimate the amount of tax that would ultimately be due if remitted.
+Added: If we were to change our expectations about distributing earnings of these subsidiaries, we may be required to record additional deferred taxes that could have a material effect on our consolidated statement of financial position, results of operations or cash flows.
Unrecognized tax benefits —The changes to unrecognized tax benefits, excluding interest and penalties that we recognize as a component of income tax expense, were as follows (in millions):
1 unchanged sentence
Balance, beginning of period
−Removed: Additions for prior year tax positions
Additions for current year tax positions
+Added: Additions for prior year tax positions
Reductions related to statute of limitation expirations and changes in law
9 unchanged sentences
Unrecognized tax benefits, including interest and penalties
−Removed: In the years ended December 31, 2019, 2018 and 2017, we recognized, as a component of our income tax provision, income of $ 72 million, expense of $ 13 million and income of $ 9 million, respectively, related to interest and penalties associated with our unrecognized tax benefits.
−Removed: As of December 31, 2019, if recognized, $ 175 million of our unrecognized tax benefits, including interest and penalties, would favorably impact our effective tax rate.
−Removed: It is reasonably possible that our existing liabilities for unrecognized tax benefits may increase or decrease in the year ending December 31, 2020, primarily due to the progression of open audits and the expiration of statutes of limitation.
+Added: In the years ended December 31, 2020, 2019 and 2018, we recognized, as a component of our income tax provision, expense of $ 7 million, benefit of $ 72 million and expense of $ 13 million, respectively, related to interest and penalties associated with our unrecognized tax benefits.
+Added: As of December 31, 2020, we have unrecognized benefits of $ 419 million, including interest and penalties, of which $ 261 million are netted against net operating loss deferred tax assets resulting in net unrecognized tax benefits of $ 158 million, including interest and penalties, that upon reversal would favorably impact our effective tax rate.
+Added: During the year ending December 31, 2021, it is reasonably possible that our existing liabilities for unrecognized tax benefits may increase or decrease, primarily due to the progression of open audits and the expiration of statutes of limitation.
However, we cannot reasonably estimate a range of potential changes in our existing liabilities for unrecognized tax benefits due to various uncertainties, such as the unresolved nature of various audits.
−Removed: tax reform —In December 2017, the U.S.
−Removed: enacted the 2017 Tax Act, which introduced changes to U.S.
−Removed: tax law, such as, among others, a transition tax, a federal income tax rate reduction and a base erosion and anti-abuse tax.
−Removed: We recognized the income tax effect of the 2017 Tax Act in accordance with Staff Accounting Bulletin No.
−Removed: 118, which provides guidance for the application of accounting standards for income taxes in the reporting period in which the 2017 Tax Act was enacted.
−Removed: The one-time transition tax applied to certain unremitted earnings and profits of our non-U.S.
−Removed: subsidiaries that are owned by U.S.
−Removed: subsidiaries.
−Removed: In the year ended December 31, 2018, we completed the evaluation of our unremitted earnings and profits for which the necessary information was not previously available, and we recorded income tax expense of $ 120 million for estimated transition taxes and $ 16 million for the utilization of estimated foreign tax credits.
−Removed: In the years ended December 31, 2019 and 2018, we recognized income tax expense of $ 21 million and $ 33 million, respectively, related to the bareboat charter structure of our U.S.
−Removed: operations, a significant portion of which is contractually reimbursable by our customers due to a change-in-law provision in certain drilling contracts.
−Removed: In the year ended December 31, 2017, we recognized income tax expense of $ 66 million with a corresponding decrease to our net deferred tax assets to reflect the reduced federal income tax rate.
Tax returns —We file federal and local tax returns in several jurisdictions throughout the world.
1 unchanged sentence
tax matters for years prior to 2014.
−Removed: Our tax returns in the major jurisdictions in which we operate, other than Brazil, as mentioned below, are generally subject to examination for periods ranging from three to six years .
−Removed: We have agreed to extensions beyond the statute of limitations in two major jurisdictions for up to 20 years .
+Added: Our tax returns in the significant jurisdictions in which we operate, other than Brazil, as mentioned below, are generally subject to examination for periods ranging from three to six years .
Tax authorities in certain jurisdictions are examining our tax returns and, in some cases, have issued assessments.
2 unchanged sentences
Brazil tax investigations —In December 2005, the Brazilian tax authorities began issuing tax assessments with respect to our tax returns for the years 2000 through 2004.
−Removed: In January 25, 2008, we filed a protest letter with the Brazilian tax authorities for these tax assessments, and we are currently engaged in the appeals process.
−Removed: In May 19, 2014, the Brazilian tax authorities issued an additional tax assessment for the years 2009 and 2010, and in June 18, 2014, we filed protests with the Brazilian tax authorities for these tax assessments.
+Added: In May 19, 2014, the Brazilian tax authorities issued an additional tax assessment for the years 2009 and 2010.
+Added: We filed protests with the Brazilian tax authorities for the assessments and are currently engaged in the appeals process.
During the years ended December 31, 2018 and 2019, a portion of two cases were favorably closed.
−Removed: As of December 31, 2019, the remaining aggregate tax assessment was for BRL 676 million, equivalent to approximately $ 168 million, including penalties and interest.
+Added: As of December 31, 2020, the remaining aggregate tax assessment, including interest and penalties, was for corporate income tax of BRL 640 million, equivalent to approximately $ 123 million, and indirect tax of BRL 95 million, equivalent to $ 18 million.
We believe our returns are materially correct as filed, and we are vigorously contesting these assessments.
−Removed: An unfavorable outcome on these proposed assessments could result in a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
+Added: An unfavorable outcome on these proposed assessments could have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
Other tax matters —We conduct operations through our various subsidiaries in countries throughout the world.
2 unchanged sentences
Although we are unable to predict the outcome of these changes, we do not expect the effect, if any, resulting from these adjustments to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 11—Loss Per Share
1 unchanged sentence
Years ended December 31,
−Removed: Numerator for loss per share
+Added: Numerator for loss per share, basic and diluted
Net loss attributable to controlling interest
−Removed: Denominator for loss per share
+Added: Denominator for loss per share, basic and diluted
Weighted-average shares outstanding
−Removed: Effect of share-based awards and other equity instruments
+Added: Effect of share-based awards
Weighted-average shares for per share calculation
−Removed: Loss per share
+Added: Loss per share, basic and diluted
In the years ended December 31, 2020, 2019 and 2018, we excluded from the calculation 10.8 million, 12.0 million and 10.6 million share-based awards, respectively, since the effect would have been anti-dilutive.
−Removed: In the years ended December 31, 2019 and 2018, we excluded from the calculation 84.0 million and 77.2 million shares, respectively, issuable upon conversion of the Exchangeable Bonds since the effect would have been anti-dilutive.
+Added: In the years ended December 31, 2020, 2019 and 2018, we excluded from the calculation 84.0 million, 84.0 million and 77.2 million shares, respectively, issuable upon conversion of the Senior Guaranteed Exchangeable Bonds and the Exchangeable Senior Bonds since the effect would have been anti-dilutive.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 12—Postemployment Benefit Plans
+Added: Defined contribution plans
+Added: We sponsor defined contribution plans for our employees in most markets in which we operate worldwide, the most significant of which were as follows:
+Added: (1) a qualified savings plan covering certain eligible employees working in the U.S., (2) various savings plans covering eligible employees working in Norway, (3) a non-qualified savings plan covering certain eligible employees working outside the U.S., the U.K.
+Added: and Norway and (4) a qualified savings plan covering certain eligible employees working in the U.K.
+Added: In the years ended December 31, 2020, 2019 and 2018, we recognized expense of $ 56 million, $ 52 million and $ 50 million, respectively, related to our defined contribution plans globally.
Defined benefit pension and other postemployment benefit plans
−Removed: Overview —As of December 31, 2019 we had defined benefit plans in the U.S., the United Kingdom (“U.K.”), and Norway.
+Added: Overview —As of December 31, 2020, we had defined benefit plans in the U.S., the United Kingdom (“U.K.”), and Norway, all of which have ceased accruing benefits.
As of December 31, 2020, in the U.S., we had three funded and three unfunded defined benefit plans (the “U.S.
−Removed: As of December 31, 2019, in the U.K., we had one funded defined benefit plan (the “U.K.
−Removed: As of December 31, 2019, in Norway, we had four funded and two unfunded defined benefit plans (the “Norway Plans”), all of which were group pension schemes with life insurance companies.
−Removed: We refer to the U.K.
−Removed: Plan and the Norway Plans, collectively, as the “Non-U.S.
−Removed: Plans.” We refer to the U.S.
−Removed: Plans and the Non-U.S.
−Removed: Plans, collectively, as the “Transocean Plans”.
+Added: in the U.K., we had one funded defined benefit plan (the “U.K.
+Added: and after terminating the majority of our plans in Norway as required by local authorities, we had two remaining defined benefit plans, one funded and one unfunded (the “Norway Plans” and, together with the U.K.
+Added: Plan, the “Non-U.S.
Additionally, we maintain certain unfunded other postemployment benefit plans (collectively, the “OPEB Plans”), under which benefits to eligible participants diminish during a phase-out period ending December 31, 2025.
−Removed: Benefits under the U.S.
−Removed: Plans and the U.K.
−Removed: Plan have ceased accruing.
−Removed: We maintain the respective pension obligations under such plans until they have been fully satisfied.
−Removed: Assumptions —We estimated our benefit obligations using the following weighted-average assumptions:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: Discount rate
−Removed: Compensation trend rate
−Removed: We estimated our net periodic benefit costs using the following weighted-average assumptions:
+Added: We maintain the benefit obligations under our plans until they are fully satisfied.
+Added: Net periodic benefit costs —We estimated our net periodic benefit costs using the following weighted-average assumptions:
Year ended December 31, 2020
3 unchanged sentences
Expected rate of return
−Removed: Compensation trend rate
“na” means not applicable.
−Removed: Net periodic benefit costs —Net periodic benefit costs recognized included the following components (in millions):
+Added: Net periodic benefit costs recognized included the following components (in millions):
Year ended December 31, 2020
9 unchanged sentences
Net periodic benefit costs (income)
+Added: Funded status —We estimated our benefit obligations using the following weighted-average assumptions:
+Added: December 31, 2020
+Added: December 31, 2019
+Added: Discount rate
+Added: Expected long-term rate of return
+Added: “na” means not applicable.
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Funded status —The changes in projected benefit obligation, plan assets and funded status and the amounts recognized on our consolidated balance sheets were as follows (in millions):
+Added: The changes in projected benefit obligation, plan assets and funded status and the amounts recognized on our consolidated balance sheets were as follows (in millions):
Year ended December 31, 2020
2 unchanged sentences
Projected benefit obligation, beginning of period
−Removed: Assumed projected benefit obligation
Actuarial (gains) losses, net
3 unchanged sentences
Plan amendment
−Removed: Special termination benefit
Projected benefit obligation, end of period
1 unchanged sentence
Fair value of plan assets, beginning of period
−Removed: Fair value of acquired plan assets
Actual return on plan assets
26 unchanged sentences
Accumulated other comprehensive loss (income), before taxes
−Removed: The amounts in accumulated other comprehensive loss (income) expected to be recognized as components of net periodic benefit costs are as follows (in millions):
−Removed: Year ending December 31, 2020
−Removed: Actuarial loss, net
−Removed: Prior service cost, net
−Removed: Total amount expected to be recognized
+Added: Plan assets —The weighted-average target and actual allocations of assets for the funded defined benefit plans were as follows:
+Added: December 31, 2020
+Added: December 31, 2019
+Added: Target allocation
+Added: Actual allocation
+Added: Target allocation
+Added: Actual allocation
+Added: Equity securities
+Added: Fixed income securities
+Added: Other investments
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Plan assets —We periodically review our investment policies, plan assets and asset allocation strategies to evaluate performance relative to specified objectives.
+Added: We periodically review our investment policies, plan assets and asset allocation strategies to evaluate performance relative to specified objectives.
In determining our asset allocation strategies for the U.S.
5 unchanged sentences
Plan are given established ranges within which the investments may deviate from the target allocations.
−Removed: For the Norway Plans, we establish minimum rates of return under the terms of investment contracts with insurance companies.
−Removed: The weighted-average target and actual allocations of the investments for the funded Transocean Plans were as follows:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: Target allocation
−Removed: Actual allocation
−Removed: Target allocation
−Removed: Actual allocation
−Removed: Equity securities
−Removed: Fixed income securities
−Removed: Other investments
−Removed: The investments for the funded Transocean Plans were categorized as follows (in millions):
+Added: For the Norway Plans, which are group pension schemes with life insurance companies, we establish minimum rates of return under the terms of the investment contracts.
+Added: The investments for the funded defined benefit plans were categorized as follows (in millions):
December 31, 2020
20 unchanged sentences
Plan invest primarily in passively managed funds that reference market indices.
−Removed: The funded Norway Plans are subject to contractual terms under selected insurance programs.
−Removed: Each plan’s investment managers have discretion to select the securities held within each asset category.
+Added: The funded Norway Plan is subject to contractual terms under selected insurance programs.
+Added: The plan investment managers have discretion to select the securities held within each asset category.
Given this discretion, the managers may occasionally invest in our debt or equity securities and may hold either long or short positions in such securities.
As the plan investment managers are required to maintain well diversified portfolios, the actual investment in our securities would be immaterial relative to asset categories and the overall plan assets.
−Removed: Funding contributions —In the years ended December 31, 2019, 2018 and 2017, we made an aggregate contribution of $ 22 million, $ 17 million and $ 15 million, respectively, to the Transocean Plans and the OPEB Plans using our cash flows from operations.
−Removed: In the year ending December 31, 2020, we expect to contribute $ 18 million to the Transocean Plans, and we expect to fund benefit payments of approximately $ 3 million for the OPEB Plans as costs are incurred.
+Added: Funding contributions —In the years ended December 31, 2020, 2019 and 2018, we made an aggregate contribution of $ 14 million, $ 22 million and $ 17 million, respectively, to the defined benefit pension plans and the OPEB Plans using our cash flows from operations.
+Added: In the year ending December 31, 2021, we expect to make an aggregate contribution of $ 11 million, including $ 8 million and $ 3 million to the defined benefit pension plans and the OPEB Plans, respectively.
+Added: Benefit payments —The projected benefits payments were as follows (in millions):
+Added: Years ending December 31,
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Benefit payments —The projected benefits payments were as follows (in millions):
−Removed: Years ending December 31,
−Removed: Defined contribution plans
−Removed: We sponsor defined contribution plans, for our employees, the most significant of which were as follows:
−Removed: (1) a qualified savings plan covering certain employees working in the U.S., (2) a non-qualified supplemental plan covering certain eligible employees working in the U.S., (3) a qualified savings plan covering certain eligible U.K.
−Removed: employees, (4) a non-qualified savings plan covering certain employees working outside the U.S.
−Removed: and (5) various savings plans covering eligible employees working in Norway.
−Removed: In the years ended December 31, 2019, 2018 and 2017, we recognized expense of $ 52 million, $ 50 million and $ 43 million, respectively, related to our defined contribution plans.
Note 13—Commitments and Contingencies
Purchase and service agreement obligations
−Removed: We have purchase obligations with shipyards and other contractors related to our newbuild construction programs.
+Added: We have purchase obligations with shipyards and other contractors primarily related to our newbuild construction programs.
We also have long-term service agreements with original equipment manufacturers to provide services and parts, primarily related to our pressure control systems.
7 unchanged sentences
Legal proceedings
−Removed: Macondo well incident —On April 22, 2010, the ultra-deepwater floater Deepwater Horizon sank after a blowout of the Macondo well caused a fire and explosion on the rig off the coast of Louisiana.
−Removed: At the time of the explosion, Deepwater Horizon was contracted to an affiliate of BP plc.
−Removed: Litigation, including civil and criminal claims, commenced shortly after the incident, and most claims against us were consolidated by the U.S.
−Removed: Judicial Panel on Multidistrict Litigation and transferred to the U.S.
−Removed: District Court for the Eastern District of Louisiana (the “MDL Court”), a significant portion of which has now been resolved or is pending release of funds from escrow.
−Removed: We will vigorously defend against any actions not resolved by our previous settlements and pursue any and all defenses available.
−Removed: At December 31, 2019 and 2018, the remaining liability for estimated loss contingencies that we believe are probable and for which a reasonable estimate can be made was $ 124 million and $ 158 million, respectively, recorded in other current liabilities, the majority of which is related to the settlement agreement that we and the Plaintiff Steering Committee filed with the MDL Court in May 2015 (the “PSC Settlement Agreement”).
−Removed: On February 15, 2017, the MDL Court entered a final order and judgment approving the PSC Settlement Agreement.
−Removed: Through the PSC Settlement Agreement, we agreed to pay a total of $ 212 million to be allocated between two classes of
+Added: Debt exchange litigation and purported notice of default— Prior to the consummation of the Exchange Transactions (see Note 9—Debt), we completed certain internal reorganization transactions (the “Internal Reorganization”).
+Added: In September 2020, funds managed by, or affiliated with, Whitebox Advisors LLC (“Whitebox”) as holders of certain series of our notes subject to the Exchange Offers, filed a claim (the “Claim”) in the U.S.
+Added: District Court for the Southern District of New York (the “Court”) related to such certain internal reorganization transactions and the Exchange Offers.
+Added: Additionally, in September and October 2020, Whitebox and funds managed by, or affiliated with, Pacific Investment Management Company LLC, as debtholders, together with certain other advisors and debtholders, provided purported notices of alleged default with respect to the indentures governing, respectively, the 8.00% Guaranteed Notes and the 7.25% Guaranteed Notes.
+Added: On September 23, 2020, we filed an answer to the Claim with the Court and asserted counterclaims seeking a declaratory judgment that, among other matters, the Internal Reorganization did not cause a default under the indenture governing the 8.00% Guaranteed Notes.
+Added: Concurrently, with our answer and counterclaims, we also submitted a motion for summary judgment seeking an expedited judgment on our request for declaratory judgment.
+Added: Whitebox subsequently submitted a cross-motion for summary judgment seeking dismissal of our counterclaims.
+Added: On November 30, 2020, while awaiting the Court’s ruling on our motion for summary judgment, we amended certain of our financing documents and implemented certain internal reorganization transactions, which resolved the allegations contained in the purported notices of default.
+Added: On December 17, 2020, the Court issued its ruling granting our motion for summary judgment and denying the plaintiff’s cross-motion for summary judgment, holding, among other matters, that the allegations contained in the purported notice of default did not constitute a default under the indenture governing the 8.00% Guaranteed Notes.
+Added: Whitebox has appealed the Court’s ruling.
+Added: The facts alleged in the purported notice of default under the 8.00% Guaranteed Notes were the same as the facts underlying the Claim and the purported notice of default under the 7.25% Guaranteed Notes.
+Added: Accordingly, following the amendment and internal reorganization transactions on November 30, 2020, and the subsequent ruling from the Court granting our motion for summary judgment, we do not expect the liability, if any, resulting from these matters to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
+Added: Macondo well incident —As of December 31, 2020, all significant litigation, including civil and criminal claims, resulting from the blowout of the Macondo well that caused a fire and explosion on the ultra-deepwater floater Deepwater Horizon off the coast of Louisiana had been resolved.
+Added: At December 31, 2019, the remaining liability for estimated loss contingencies that were probable and for which a reasonable estimate could be made was $ 124 million, recorded in other current liabilities, the majority of which was related to the settlement agreement that we and the Plaintiff Steering Committee filed in May 2015 (the “PSC Settlement Agreement”) with the U.S.
+Added: District Court for
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: plaintiffs in exchange for a release of all respective claims each class has against us.
−Removed: As required under the PSC Settlement Agreement, we deposited the settlement amount into an escrow account established by the MDL Court.
−Removed: In August 2019 and November 2018, the MDL Court released $ 33 million and $ 58 million, respectively, from the escrow account to make payments to the plaintiffs.
−Removed: At December 31, 2019 and 2018, the remaining cash balance in the escrow account was $ 125 million and $ 156 million, respectively, recorded in restricted cash accounts and investments.
−Removed: Nigerian Cabotage Act litigation —In October 2007, three of our subsidiaries were each served a Notice and Demand from the Nigeria Maritime Administration and Safety Agency (“NIMASA”), imposing a two percent surcharge on the value of all contracts performed by us in Nigeria pursuant to the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”).
−Removed: Our subsidiaries each filed an originating summons in the Federal High Court in Lagos challenging the imposition of this surcharge on the basis that the Cabotage Act and associated levy is not applicable to drilling rigs.
−Removed: The respondents challenged the competence of the suits on several procedural grounds.
−Removed: The court upheld the objections and dismissed the suits.
−Removed: In December 2010, our subsidiaries filed a new joint Cabotage Act suit.
−Removed: In June 2019, the Court of Appeal of Nigeria ruled the suits had been properly dismissed, confirming that offshore drilling rigs are not subject to the surcharges of the Cabotage Act.
−Removed: NIMASA has not appealed this ruling, and the deadline for appeal has passed.
−Removed: While we cannot provide assurance that NIMASA will not attempt to challenge the ruling in the future, we do not expect the proceedings to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
+Added: the Eastern District of Louisiana (the “MDL Court”), the court in which most claims against us were consolidated by the U.S.
+Added: Judicial Panel on Multidistrict Litigation.
+Added: In the years ended December 31, 2019 and 2018, the MDL Court released $ 33 million and $ 58 million, respectively, from and escrow account established by the MDL Court to satisfy our obligations under the PSC Settlement Agreement.
+Added: At December 31, 2019, the remaining cash balance in the escrow account was $ 125 million, recorded in restricted cash accounts and investments.
+Added: In June 2020, the MDL Court released the remaining assets held in the escrow account to satisfy our remaining obligations under the PSC Settlement Agreement.
Asbestos litigation —In 2004, several of our subsidiaries were named, along with numerous other unaffiliated defendants, in complaints filed in the Circuit Courts of the State of Mississippi, and in 2014, a group of similar complaints were filed in Louisiana.
1 unchanged sentence
The plaintiffs generally seek awards of unspecified compensatory and punitive damages, but the court-appointed special master has ruled that a Jones Act employer defendant, such as us, cannot be sued for punitive damages.
−Removed: At December 31, 2019, nine plaintiffs have claims pending in Louisiana, in which we have or may have an interest.
+Added: At December 31, 2020, eight plaintiffs have claims pending in Louisiana, in which we have or may have an interest.
We intend to defend these lawsuits vigorously, although we can provide no assurance as to the outcome.
5 unchanged sentences
The operating assets of the subsidiary were sold in 1989.
−Removed: In September 2018, the subsidiary and certain insurers agreed to a settlement of outstanding disputes that leaves the subsidiary with funding, including cash, annuities and coverage in place settlement, that we believe will be sufficient to respond to both the current lawsuits as well as future lawsuits of a similar nature.
+Added: In September 2018, the subsidiary and certain insurers agreed to a settlement of outstanding disputes that provided the subsidiary with cash and an annuity.
+Added: Together with a coverage-in-place agreement with certain insurers and additional coverage issued by other insurers, we believe the subsidiary has sufficient resources to respond to both the current lawsuits as well as future lawsuits of a similar nature.
While we cannot predict or provide assurance as to the outcome of these matters, we do not expect the ultimate liability, if any, resulting from these claims to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
16 unchanged sentences
Resolutions of other claims by the EPA, the involved state agency or PRPs are at various stages of investigation.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Nevertheless, based on available information, we do not expect the ultimate liability, if any, resulting from all environmental matters, including the liability for all related pending legal proceedings, asserted legal claims, the potential claims in Alhambra, California, for which tests detected no contaminants, and known potential legal claims that are likely to be asserted, to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
2 unchanged sentences
At December 31, 2020 and 2019, our subsidiary held 24.5 million and 6.1 million shares, respectively.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Accumulated other comprehensive loss —The changes in accumulated other comprehensive loss, presented net of tax, for our defined benefit pension plans were as follows (in millions):
12 unchanged sentences
On June 11, 2018, pursuant to a settlement requiring no cash payment, we acquired the interests in ADDCL not previously owned by us, and ADDCL became our wholly owned subsidiary.
−Removed: In connection with the acquisition, we reclassified the $ 53 million aggregate carrying amount of the redeemable noncontrolling interest to additional paid-in capital.
+Added: In connection with the acquisition, we reallocated the $ 53 million aggregate carrying amount of the redeemable noncontrolling interest to additional paid-in capital.
Note 15—Share-Based Compensation
8 unchanged sentences
Stock options are subject to a stated vesting period and, once vested, typically have a seven-year term during which they are exercisable.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Service awards
6 unchanged sentences
Unvested at December 31, 2020
−Removed: During the year ended December 31, 2019, the vested restricted share units had an aggregate grant-date fair value of $ 23 million.
+Added: In the year ended December 31, 2020, the vested service-based units had an aggregate grant-date fair value of $ 24 million.
During the years ended December 31, 2019 and 2018, we granted 3,044,494 and 2,521,939 service-based units, respectively, with a per unit weighted-average grant-date fair value of $ 8.33 and $ 9.67 , respectively.
During the years ended December 31, 2019 and 2018, we had 2,224,030 and 2,087,141 service-based units, respectively, that vested with an aggregate grant-date fair value of $ 23 million and $ 27 million, respectively.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Stock options —The following table summarizes activity for vested and unvested service-based stock options outstanding under our incentive plans during the year ended December 31, 2020:
8 unchanged sentences
Vested and exercisable at December 31, 2020
−Removed: During the year ended December 31, 2019, the granted stock options had a per option weighted-average grant-date fair value of $ 4.09 .
−Removed: During the year ended December 31, 2019, the vested stock options had an aggregate grant-date fair value of $ 10 million.
+Added: In the years ended December 31, 2020, 2019 and 2018, the vested stock options had an aggregate grant-date fair value of $ 12 million, $ 10 million and $ 6 million, respectively.
At December 31, 2020 and 2019, there were outstanding unvested stock options to purchase 1,355,448 and 2,651,514 shares, respectively.
During the years ended December 31, 2019 and 2018, we granted stock options to purchase 1,594,528 and 1,249,266 shares, respectively, with a per option weighted-average grant-date fair value of $ 8.35 and $ 9.18 , respectively.
−Removed: During the years ended December 31, 2018 and 2017, the vested stock options had an aggregate grant-date fair value of $ 6 million and $ 2 million, respectively.
−Removed: During the years ended December 31, 2017 and 2016, no stock options were exercised.
Performance awards
6 unchanged sentences
Unvested at December 31, 2020
−Removed: During the year ended December 31, 2019, the vested performance-based units had an aggregate grant-date fair value of $ 11 million.
+Added: In each of the years ended December 31, 2020, 2019 and 2018, the vested performance-based units had an aggregate grant-date fair value of $ 11 million.
During the years ended December 31, 2019 and 2018, we granted 1,067,316 and 1,074,054 performance-based units, respectively, with a per unit weighted-average grant-date fair value of $ 10.77 and $ 10.79 , respectively.
−Removed: During the years ended December 31, 2018 and 2017, the vested performance-based units had an aggregate grant-date fair value of $ 11 million and $ 7 million, respectively.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 16—Supplemental Balance Sheet Information
9 unchanged sentences
Total other current liabilities
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Other long-term liabilities were comprised of the following (in millions):
5 unchanged sentences
Deferred revenues
−Removed: Construction contract intangible liability
Total other long-term liabilities
Note 17—Supplemental Cash Flow Information
−Removed: Net cash provided by operating activities attributable to the net change in other operating assets and liabilities was comprised of the following (in millions):
+Added: The reconciling adjustments of our net cash provided by operating activities that were attributable to the net change in other operating assets and liabilities were as follows (in millions):
Years ended December 31,
3 unchanged sentences
Decrease in accounts payable and other current liabilities
−Removed: (Decrease) increase in other long-term liabilities
+Added: Increase (decrease) in other long-term liabilities
Change in income taxes receivable / payable, net
Change in receivables from / payables to affiliates, net
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Additional cash flow information was as follows (in millions):
5 unchanged sentences
Capital additions, accrued at end of period (a)
−Removed: Issuance of shares in business combinations (b)
−Removed: Issuance of debt in business combination (c)
+Added: Issuance of debt in exchange transactions (b)
+Added: Equity component of exchangeable debt (c)
+Added: Issuance of shares in business combinations (d)
+Added: Issuance of debt in business combination (e)
(a) Additions to property and equipment for which we had accrued a corresponding liability in accounts payable at the end of the period.
See Note 6—Drilling Fleet.
−Removed: (b) In connection with our acquisition of Songa and Ocean Rig, we issued 66.9 million and 147.7 million shares, respectively, with an aggregate fair value of $ 735 million and $ 1.4 billion, respectively.
+Added: (b) In connection with the Exchange Transactions, we issued $ 687 million and $ 238 million aggregate principal amount of the 11.50 % Senior Guaranteed Notes and the Senior Guaranteed Exchangeable Bonds, respectively.
+Added: See Note 9—Debt.
+Added: (c) In connection with the issuance of the Senior Guaranteed Exchangeable Bonds, we recorded the conversion feature, measured at its estimated fair value, to additional paid-in capital.
+Added: See Note 9—Debt.
+Added: (d) In connection with our acquisition of Songa and Ocean Rig, we issued 66.9 million and 147.7 million shares, respectively, with an aggregate fair value of $ 735 million and $ 1.4 billion, respectively.
See Note 3—Business Combinations.
−Removed: (c) In connection with our acquisition of Songa, we issued $ 854 million aggregate principal amount of Exchangeable Bonds as partial consideration to Songa shareholders and settlement for certain Songa indebtedness.
+Added: (e) In connection with our acquisition of Songa, we issued $ 854 million aggregate principal amount of Exchangeable Senior Bonds as partial consideration to Songa shareholders and settlement for certain Songa indebtedness.
See Note 3—Business Combinations.
+Added: TRANSOCEAN LTD.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 18—Financial Instruments
4 unchanged sentences
Restricted cash and cash equivalents
−Removed: Restricted investments
Long-term debt, including current maturities
−Removed: Derivative instruments, assets
−Removed: Derivative instruments, liabilities
We estimated the fair value of each class of financial instruments, for which estimating fair value is practicable, by applying the following methods and assumptions:
−Removed: Cash and cash equivalents —The carrying amount of our cash and cash equivalents represents the historical cost, plus accrued interest.
−Removed: Our cash equivalents are primarily invested in short-term time deposits and money market funds.
−Removed: The carrying amount of our cash and cash equivalents approximates fair value because of the near-term maturities of the instruments.
−Removed: Restricted cash and cash equivalents —The carrying amount of our restricted cash and cash equivalents, which are subject to restrictions due to collateral requirements, legislation, regulation or court order approximates fair value due to the near-term maturities of the instruments in which the restricted balances are held.
−Removed: At December 31, 2019, the aggregate carrying amount of such restricted cash and cash equivalents was $ 558 million, recorded in current assets.
−Removed: At December 31, 2018, the aggregate carrying amount of such restricted cash and cash equivalents was $ 429 million, including $ 428 million and $ 1 million, recorded in current assets and other assets, respectively.
−Removed: Restricted investments —The carrying amount of our restricted investments, which are subject to restrictions due to court order or pledged for security of certain credit arrangements, approximates fair value because of the near-term maturities of the instruments.
−Removed: At December 31, 2018, the aggregate carrying amount of the restricted investments was $ 123 million, recorded in current assets.
+Added: Cash and cash equivalents —Our cash and cash equivalents are primarily invested in demand deposits, short-term time deposits and money market funds.
+Added: The carrying amount of our cash and cash equivalents represents the historical cost, plus accrued interest, which approximates fair value because of the short maturities of the instruments.
+Added: Restricted cash and cash equivalents —Our restricted cash and cash equivalents, which are subject to restrictions due to collateral requirements, legislation, regulation or court order, are primarily invested in demand deposits, short-term time deposits and money market funds.
+Added: The carrying amount of our restricted cash and cash equivalents represents the historical cost, plus accrued interest, which approximates fair value because of the short maturities of the instruments.
Debt —The carrying amount of our debt represents the principal amount, net of unamortized discounts, premiums, debt issue costs and fair value adjustments.
We measured the estimated fair value of our debt using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments.
−Removed: Derivative instruments —The carrying amount of our derivative instruments represents the estimated fair value of such instruments.
−Removed: We measured the estimated fair value of our derivative instruments using significant other observable inputs, representative of a Level 2 fair value measurement, including the terms and credit spreads for the instruments.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Note 19—Risk Concentration
−Removed: Interest rate risk —Financial instruments that potentially subject us to concentrations of interest rate risk include our cash equivalents, short-term investments, restricted cash investments and debt.
−Removed: We are exposed to interest rate risk related to our cash equivalents and short-term investments, as the interest income earned on these investments is based on variable or short-term interest rates, which change with market interest rates.
−Removed: We are also exposed to the interest rate risk related to our fixed-rate debt when we refinance maturing debt with new debt or when we repurchase debt in open market repurchases.
−Removed: Currency exchange rate risk —Our international operations expose us to currency exchange rate risk.
+Added: Interest rate risk —Financial instruments that potentially subject us to concentrations of interest rate risk include our restricted and unrestricted cash equivalents and debt.
+Added: We are exposed to interest rate risk related to our restricted and unrestricted cash equivalents, as the interest income earned on these investments is based on variable or short-term interest rates, which change with market interest rates.
+Added: We are also exposed to the interest rate risk related to our fixed-rate debt when we refinance maturing debt with new debt or when we repurchase or retire debt in open market repurchases or other market transactions.
+Added: Currency exchange rate risk —We are exposed to currency exchange rate risk related to our international operations.
This risk is primarily associated with compensation costs of our employees and purchasing costs from non-U.S.
1 unchanged sentence
We use a variety of techniques to minimize the exposure to currency exchange rate risk, including the structuring of customer contract payment terms and occasional use of forward exchange contracts.
−Removed: Our primary currency exchange rate risk management strategy involves structuring customer contracts to provide for payment in both U.S.
+Added: Our primary strategy for currency exchange rate risk management involves structuring customer contracts to provide for payment in both U.S.
dollars and local currency.
2 unchanged sentences
The currency exchange effect resulting from our international operations generally has not had a material impact on our operating results.
−Removed: Credit risk —Financial instruments that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents, short-term investments and trade receivables, both current and long-term.
−Removed: We generally maintain our cash, cash equivalents and short-term investments in time deposits at commercial banks with high credit ratings or mutual funds, which invest exclusively in high-quality money market instruments.
+Added: Credit risk —Financial instruments that potentially subject us to concentrations of credit risk are primarily restricted and unrestricted cash and cash equivalents and trade receivables, both current and long-term.
+Added: We generally maintain our restricted and unrestricted cash and cash equivalents in time deposits at commercial banks with high credit ratings or mutual funds, which invest exclusively in high-quality money market instruments.
We limit the amount of exposure to any one institution and do not believe we are exposed to any significant credit risk.
1 unchanged sentence
Our receivables are dispersed in various countries.
−Removed: We establish an allowance for doubtful accounts on a case-by-case basis, considering changes in the financial position of a customer, when we believe the required payment of specific amounts owed to us is unlikely to occur.
+Added: We establish an allowance for credit losses by applying an expected loss rate based on current and forecasted future and historical experience.
Although we have encountered only isolated credit concerns related to independent oil companies, we occasionally require collateral or other security to support customer receivables.
In certain instances, when we determine that collection is not reasonably assured, we may occasionally offer extended payment terms and recognize revenues associated with the contract on a cash basis.
−Removed: Labor agreements —We require highly skilled personnel to operate our drilling units.
−Removed: We conduct extensive personnel recruiting, training and safety programs.
−Removed: At December 31, 2019, we had approximately 6,600 employees, including approximately 700 persons engaged through contract labor providers.
−Removed: Approximately 47 percent of our total workforce, working primarily in Norway, Brazil, the U.K., Angola and Australia 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.
−Removed: These negotiations sometimes result in strikes and could result in higher personnel expenses, other increased costs or increased operational restrictions, as the outcome of such negotiations affect the market for all offshore employees, not just the union members.
−Removed: Note 22—Operating Segments, Geographic Analysis and Major Customers
−Removed: Operating segments —We operate in a single , global market for the provision of contract drilling services to our customers.
−Removed: The location of our rigs and the allocation of our resources to build or upgrade rigs are determined by the activities and needs of our customers.
−Removed: Geographic analysis —Operating revenues, presented by country in which they were earned, were as follows (in millions):
−Removed: Years ended December 31,
−Removed: Operating revenues
−Removed: Other countries (a)
−Removed: Total operating revenues
−Removed: (a) Other countries represents the aggregate value for countries in which we operate that individually had operating revenues representing less than 10 percent of consolidated operating revenues earned.
+Added: Labor agreements —At December 31, 2020, we had a global workforce of approximately 5,350 individuals, including approximately 530 contractors.
+Added: 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.
+Added: Negotiations over annual salary or other labor matters could result in higher personnel or other costs or increased operational restrictions or disruptions.
+Added: The outcome of any such negotiation generally affects the market for all offshore employees,
TRANSOCEAN LTD.
1 unchanged sentence
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Long-lived assets, presented by country in which they were located, were as follows (in millions):
+Added: not only union members.
+Added: Furthermore, a failure to reach an agreement on certain key issues could result in strikes, lockouts or other work stoppages.
+Added: Note 20—Operating Segments, Geographic Analysis and Major Customers
+Added: Operating segments —We operate in a single , global market for the provision of contract drilling services to our customers.
+Added: The location of our rigs and the allocation of our resources to build or upgrade rigs are determined by the activities and needs of our customers.
+Added: Geographic analysis —The aggregate carrying amount of our long-lived assets, including our property and equipment and our right-of-use assets, disaggregated by country in which they were located, was as follows (in millions):
Long-lived assets
−Removed: Other countries (b)
+Added: Other countries (a)
Total long-lived assets
−Removed: (a) The aggregate carrying amount includes the combined total of our property and equipment and our right-of-use assets.
−Removed: (b) Other countries represents the aggregate value for countries in which we operate that individually had long-lived assets representing less than 10 percent of consolidated long-lived assets.
−Removed: Since the majority of our assets are mobile, the geographic locations of such assets at the end of the periods are not necessarily indicative of the geographic distribution of the operating revenues generated by such assets during the periods presented.
+Added: (a) Other countries represents the aggregate value for countries in which we operate that individually had attributable long-lived assets representing less than 10 percent of consolidated long-lived assets.
+Added: For a geographic disaggregation of our contract drilling revenues, see Note 5—Revenues.
+Added: Because the majority of our assets are mobile, the geographic locations of such assets at the end of the periods are not necessarily indicative of the geographic distribution of the operating revenues generated by such assets during the periods presented.
Our international operations are subject to certain political and other uncertainties, including risks of war and civil disturbances or other market disrupting events, expropriation of equipment, repatriation of income or capital, taxation policies, and the general hazards associated with certain areas in which we operate.
1 unchanged sentence
Major customers —For the year ended December 31, 2020, Royal Dutch Shell plc (together with its affiliates, “Shell”), Equinor ASA (together with its affiliates, “Equinor”) and Chevron Corporation (together with its affiliates, “Chevron”) accounted for approximately 28 percent, 27 percent and 14 percent, respectively, of our consolidated operating revenues.
+Added: For the year ended December 31, 2019, Shell, Equinor and Chevron accounted for approximately 26 percent, 21 percent and 17 percent, respectively, of our consolidated operating revenues.
For the year ended December 31, 2018, Shell, Chevron and Equinor accounted for approximately 26 percent, 21 percent and 18 percent, respectively, of our consolidated operating revenues.
−Removed: For the year ended December 31, 2017, Chevron, Shell and Petróleo Brasileiro S.A.
−Removed: accounted for approximately 29 percent, 17 percent and 14 percent, respectively, of our consolidated operating revenues.
−Removed: TRANSOCEAN LTD.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
−Removed: Note 23—Subsequent Events
−Removed: Priority guaranteed senior unsecured notes —On January 17, 2020, we issued $ 750 million aggregate principal amount of 8.00 % senior unsecured notes due February 2027 (the “8.00% Senior Notes”), and we received aggregate cash proceeds of $ 743 million, net of issue costs.
−Removed: The 8.00% Senior Notes are fully and unconditionally guaranteed by Transocean Ltd.
−Removed: and certain wholly owned subsidiaries of Transocean Inc.
−Removed: Such notes rank equal in right of payment to all of our existing and future unsecured unsubordinated obligations and rank structurally senior to the extent of the value of the assets of the subsidiaries guaranteeing the notes.
−Removed: We may redeem all or a portion of the 8.00% Senior Notes on or prior to February 1, 2023 at a price equal to 100 percent of the aggregate principal amount plus a make-whole provision, and subsequently, at specified redemption prices.
−Removed: The indenture that governs the 8.00% Senior Notes contains covenants that, among other things, limit our ability to incur certain liens on our drilling units without equally and ratably securing the notes, engage in certain sale and lease-back transactions covering any of our drilling units, allow our subsidiaries to incur certain additional debt, and consolidate, merge or enter into a scheme of arrangement qualifying as an amalgamation.
−Removed: Debt redemption —On January 17, 2020, we provided a notice to redeem in full our outstanding 9.00 % Senior Notes.
−Removed: On February 18, 2020, we made a payment of $ 767 million, including the make-whole provision, to redeem the 9.00% Senior Notes, and in the three months ending March 31, 2020, we expect to recognize a loss of approximately $ 66 million associated with the retirement of debt.
−Removed: Note 24—Quarterly Results (Unaudited)
−Removed: Three months ended
−Removed: September 30,
−Removed: (In millions, except per share data)
−Removed: Operating revenues
−Removed: Operating loss (a)
−Removed: Net loss attributable to controlling interest (a)
−Removed: Per share loss
−Removed: Weighted-average shares outstanding
−Removed: Operating revenues
−Removed: Operating loss (b)
−Removed: Net loss attributable to controlling interest (b)
−Removed: Per share loss
−Removed: Weighted-average shares outstanding
−Removed: (a) Third quarter included an aggregate loss of $ 583 million, primarily associated with the impairment of certain drilling units and other equipment classified as assets held for sale and $ 26 million associated with the impairment of certain right-of-use assets and leasehold improvements related to our leases.
−Removed: First quarter, second quarter, third quarter and fourth quarter included an aggregate loss of $ 41 million associated with the retirement of debt.
−Removed: First quarter and second quarter included a bargain purchase gain of $ 11 million associated with the Ocean Rig acquisition.
−Removed: Fourth quarter included a gain of $ 132 million associated with the termination of construction contracts for two ultra-deepwater drillships.
−Removed: First quarter, third quarter and fourth quarter included an aggregate loss of $ 24 million associated with Songa and Ocean Rig acquisition costs.
−Removed: Fourth quarter included a bargain purchase gain of $ 10 million associated with the Ocean Rig acquisition.
−Removed: Second quarter included a loss of $ 462 million associated with the impairment of our goodwill.
−Removed: Second quarter, third quarter and fourth quarter included an aggregate loss of $ 999 million associated with the impairment of certain drilling units classified as assets held for sale.
+Added: Note 21—Subsequent Event
+Added: Private exchanges— On February 26, 2021, we completed privately negotiated transactions to exchange $ 323 million aggregate principal amount of outstanding Exchangeable Senior Bonds for $ 294 million aggregate principal amount of new 4.00 % Senior Guaranteed Exchangeable Bonds due 2025 (the “New Senior Guaranteed Exchangeable Bonds”) and an aggregate cash payment of $ 11 million.
+Added: The New Senior Guaranteed Exchangeable Bonds are guaranteed by Transocean Ltd.
+Added: and the same subsidiaries of Transocean Inc.
+Added: that guarantee the Senior Guaranteed Exchangeable Bonds and 11.50 % Senior Guaranteed Notes.
+Added: In addition, the New Senior Guaranteed Exchangeable Bonds have an initial exchange rate of 190.4762 Transocean Ltd.
+Added: shares per $1,000 note, which implies a conversion price of $ 5.25 per share, subject to adjustment upon the occurrence of certain events.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
1 unchanged sentence
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.