What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-03-01 · 443 added, 539 removed, 761 unchanged (56% of the section changed)

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(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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.

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 separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Description of the Matter

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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.

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;

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;

(ii) utilizing tax resources with appropriate knowledge of local jurisdictional laws and regulations;

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Description of the Matter

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.

As discussed in Notes 2 and 4, the Company recorded an impairment loss of $37 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.

At December 31, 2021, the aggregate carrying amount of the Company’s equity-method investment in Orion was $57 million.

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How We Addressed the Matter in Our Audit

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.

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.

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, including controls over management’s review of the significant assumptions described above as well as over the underlying data used in the fair value determination.

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.

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Income tax expense

Net loss attributable to noncontrolling interest

Net income (loss) attributable to noncontrolling interest

Net loss attributable to controlling interest

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Years ended December 31,

Net loss attributable to noncontrolling interest

Net income (loss) attributable to noncontrolling interest

Net loss attributable to controlling interest

Components of net periodic benefit income (costs) before reclassifications

Components of net periodic benefit costs reclassified to net income

Components of net periodic benefit costs reclassified to net loss

Other comprehensive income (loss) before income taxes

Income taxes related to other comprehensive loss

Income taxes related to other comprehensive income (loss)

Other comprehensive income (loss)

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Total comprehensive loss

Total comprehensive loss attributable to noncontrolling interest

Total comprehensive income (loss) attributable to noncontrolling interest

Total comprehensive loss attributable to controlling interest

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Contract intangible assets

Deferred income taxes, net

Deferred tax assets, net

Liabilities and equity

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Long-term debt

Deferred income taxes, net

Deferred tax liabilities, net

Other long-term liabilities

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Balance, beginning of period

Issuance of shares under share-based compensation plans

Issuance of shares in acquisition transactions

Issuance of shares

Balance, end of period

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Share-based compensation

Issuance of shares in acquisition transactions

Issuance of shares

Equity component of convertible debt instruments

Acquisition of redeemable noncontrolling interest

Reallocated capital for transactions with holders of noncontrolling interest

Balance, end of period

Retained earnings (accumulated deficit)

Accumulated deficit

Balance, beginning of period

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Share-based compensation

Issuance of shares in acquisition transactions

Issuance of shares

Equity component of convertible debt instruments

Acquisition of redeemable noncontrolling interest

Reallocated capital for transactions with holders of noncontrolling interest

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Balance, beginning of period

Total comprehensive loss attributable to noncontrolling interest

Recognition of noncontrolling interest in business combination

Total comprehensive income (loss) attributable to noncontrolling interest

Acquisition of noncontrolling interest

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Share-based compensation

Issuance of shares in acquisition transactions

Equity component of convertible debt instruments

Recognition of noncontrolling interest in business combination

Acquisition of redeemable noncontrolling interest

Acquisition of noncontrolling interest

Issuance of shares

Equity component of convertible debt instrument

Balance, end of period

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Gain on termination of construction contracts

Deferred income tax expense (benefit)

Deferred income tax expense

Changes in deferred revenues, net

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Capital expenditures

Proceeds from disposal of assets, net

Investment in loans to unconsolidated affiliate

Investments in unconsolidated affiliates

Cash paid in business combinations, net of cash acquired

Proceeds from disposal of assets, net

Proceeds from maturities of unrestricted and restricted investments

Deposits to unrestricted investments

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issuance of debt, net of discounts and issue costs

Repayments of debt

Proceeds from investments restricted for financing activities

Payments to terminate derivative instruments

Proceeds from issuance of shares, net of issue costs

Proceeds from issuance of debt, net of discounts and issue costs

Net cash used in financing activities

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(together with its subsidiaries and predecessors, unless the context requires otherwise, “Transocean,” “we,” “us” or “our”) is a leading international provider of offshore contract drilling services for oil and gas wells.

We specialize in technically demanding sectors of the offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services.

Our mobile offshore drilling fleet is considered one of the most versatile fleets in the world.

We contract our drilling rigs, related equipment and work crews predominantly on a dayrate basis to drill oil and gas wells.

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, 2021, we owned or had partial ownership interests in and operated a fleet of 37 mobile offshore drilling units, consisting of 27 ultra-deepwater floaters and 10 harsh environment floaters.

As of December 31, 2021, we were constructing two ultra-deepwater drillships.

We provide, as our primary business, contract drilling services in a single operating segment, which involves contracting our mobile offshore drilling rigs, related equipment and work crews to drill oil and gas wells.

We specialize in technically demanding regions of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services.

Our drilling fleet is one of the most versatile fleets in the world, consisting of drillships and semisubmersible floaters used in support of offshore drilling activities and offshore support services on a worldwide basis.

We perform contract drilling services by deploying our high-specification fleet in a single , global market that is geographically dispersed in oil and gas exploration and development areas throughout the world.

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.

Note 2—Significant Accounting Policies

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.

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.

Accounting estimates —To prepare financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”), we must make judgments by applying estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to our income taxes, property and equipment, equity investments, contingencies, allowance for excess materials and supplies, intangibles, allowance for credit losses, leases, postemployment benefit plans and share-based compensation.

We base our estimates and assumptions on historical experience and other factors that we believe are reasonable.

Actual results could differ from such estimates.

Fair value measurements —We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability.

Fair value measurements —We estimate fair value at an exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

Our valuation techniques require inputs that we categorize using a three-level hierarchy, from highest to lowest level of observable inputs, as follows:

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See Note 4—Unconsolidated Affiliates and Note 14—Equity .

Business combinations —We apply the acquisition method of accounting for business combinations, under which we record the acquired assets and assumed liabilities at fair value and recognize goodwill to the extent the consideration transferred exceeds the fair value of the net assets acquired.

To the extent the fair value of the net assets acquired exceeds the consideration transferred, we recognize a bargain purchase gain.

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.

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.

Revenues and related pre-operating costs —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.

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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.

Prior to performing drilling operations, we may receive pre-operating revenues, on either a fixed lump-sum or variable dayrate basis, for mobilization, contract preparation, customer-requested goods and services or capital upgrades, which we recognize on a straight-line basis over the estimated contract period.

Prior to performing drilling operations, we may receive pre-operating revenues, on either a fixed lump-sum or variable dayrate basis, for mobilization, contract preparation, customer-requested goods and services or capital upgrades, for which we record a contract liability and recognize as revenues on a straight-line basis over the estimated contract period.

We recognize losses for loss contracts as such losses are incurred.

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We recognize revenues from contract terminations as we fulfill our obligations and all contingencies have been resolved.

To obtain contracts with our customers, we incur costs to prepare a rig for contract and mobilize a rig to the drilling location.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

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.

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.

To obtain contracts with our customers, we incur pre-operating costs to prepare a rig for contract and mobilize a rig to the drilling location.

We defer such pre-operating contract preparation and mobilization costs for recognition in operating and maintenance costs over the estimated contract period on a straight-line basis, consistent with the general pace of activity.

See Note 5—Revenues .

Contract intangible assets —We recognize contract intangible assets related to acquired executory contracts, such as drilling contracts.

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.

We amortize the carrying amount of the drilling contract intangible assets using the straight-line method as a reduction of contract drilling revenues over the expected remaining contract period.

See Note 6—Contract Intangible Assets .

Share - based compensation —To measure the fair values of granted or modified service-based restricted share units, we use the market price of our shares on the grant date or modification date.

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To measure the fair values of granted or modified performance-based restricted share units subject to market factors, we use a Monte Carlo simulation model and, in addition to the assumptions applied for the Black-Scholes-Merton option-pricing model, we use a risk neutral approach and an average price at the performance start date.

To measure the fair values of granted or modified performance-based restricted share units that are subject to performance targets, we use the market price of our shares on the grant date or modification date adjusted for the projected performance rate expected to be achieved at the end of the measurement period.

We recognize share-based compensation expense in the same financial statement line item as cash compensation paid to the respective employees or non-employee directors.

We recognize such compensation expense on a straight-line basis over the service period through the date the employee or non-employee director is no longer required to provide service to earn the award.

See Note 15—Share-Based Compensation Plans.

See Note 15—Share-Based Compensation .

Capitalized interest —We capitalize interest costs for qualifying construction and upgrade projects and only capitalize interest costs during periods in which progress for the construction projects continues to be underway.

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We recognize currency exchange rate gains and losses in other, net.

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.

In the years ended December 31, 2021, 2020 and 2019, we recognized a net loss of $ 1 million, a net loss of $ 8 million and a net gain of $ 2 million, respectively, related to currency exchange rates.

Income taxes —We provide for income taxes based on expected taxable income, statutory rates, tax laws and tax planning opportunities available to us in the jurisdictions in which we operate or have a taxable presence.

We recognize the effect of changes in tax laws as of the date of enactment.

We recognize potential global intangible low-taxed income inclusions as a period cost.

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.

We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

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.

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.

Additionally, we record a valuation allowance for foreign tax credit carryforwards to reflect the possible expiration of these benefits prior to their utilization.

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.

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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.

We measure deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the deferred tax assets and liabilities are expected to be recovered or paid.

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.

For example, we may record a valuation allowance for deferred tax assets resulting from net operating losses incurred during the year in certain jurisdictions for which the benefit of the losses will not be realized or for foreign tax credit carryforwards that may expire prior to their utilization.

See Note 11—Income Taxes .

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Such management trusts invest exclusively in high-quality money market instruments.

Accounts receivable —We earn our revenues by providing our drilling services to three major categories of customers:

(a) integrated oil companies, (b) government-owned or government-controlled oil companies and (c) other independent oil companies.

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.

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.

At December 31, 2020, our allowance for credit losses was $ 2 million.

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.

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.

See Note 9—Debt and Note 13—Commitments and Contingencies .

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We estimate the allowance for excess items based on historical experience and expectations for future use of the materials and supplies.

During the year ended December 31, 2021, we identified certain materials and supplies that were in excess of our expected future usage based on our current market outlook.

As a result of these items, we increased our allowance by $ 28 million ($ 0.04 per diluted share, net of tax).

At December 31, 2021 and 2020, our allowance for excess items was $ 183 million and $ 143 million, respectively.

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:

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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.

See Note 7—Long-Lived Assets .

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.

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To estimate the fair value of the investment, we apply valuation methods that rely primarily on the income and market approaches.

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.

In the years ended December 31, 2021 and 2020, we recognized a loss of $ 37 million and $ 62 million, respectively, associated with the other-than-temporary impairment of the carrying amount of our equity investments.

See Note 4—Unconsolidated Affiliates .

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.

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.

See Note 3—Business Combinations and Note 7—Goodwill and Other Intangibles.

Contract intangibles —We recognize contract intangible assets related to acquired executory contracts, such as drilling contracts.

We amortize the carrying amount of the drilling contract intangible assets using the straight-line method as a reduction of contract

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

drilling revenues over the expected remaining contract period.

At December 31, 2020 and 2019, the aggregate carrying amount of our drilling contract intangible assets was $ 393 million and $ 608 million, respectively.

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.

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For the long-term rate of return, we develop our assumptions regarding the expected rate of return on plan assets based on historical experience and projected long-term investment returns, and we weight the assumptions based on each plan’s asset allocation.

For the discount rate, we base our assumptions on a yield curve approach using Aa-rated corporate bonds and the expected timing of future benefit payments.

For the discount rate, we base our assumptions on a yield curve approach using Aa-rated corporate

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

bonds and the expected timing of future benefit payments.

At December 31, 2021 and 2020, our pension and other postemployment benefit plan obligations represented an aggregate liability of $ 132 million and $ 277 million, respectively, and an aggregate asset of $ 102 million and $ 37 million, respectively, representing the funded status of the plans.

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We establish liabilities for estimated loss contingencies when we believe a loss is probable and the amount of the probable loss can be reasonably estimated.

We recognize corresponding assets for those loss contingencies that we believe are probable of being recovered through insurance.

Once established, we adjust the carrying amount of a contingent liability upon the occurrence of a recognizable event when facts and circumstances change, altering our previous assumptions with respect to the likelihood or amount of loss.

We recognize corresponding assets for those loss contingencies that we believe are probable of being recovered through insurance.

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.

Note 3—Business Combinations

During the year ended December 31, 2018, we completed the acquisitions of Songa Offshore SE (“Songa”), a European public company limited by shares, or societas Europaea, existing under the laws of Cyprus, and Ocean Rig UDW Inc.

(“Ocean Rig”), a Cayman Islands exempted company with limited liability.

On January 30, 2018, we acquired an approximate 97.7 percent ownership interest in Songa.

On December 5, 2018, we acquired Ocean Rig in a merger transaction.

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.

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.

Ocean Rig UDW Inc.

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.

The fair value of net assets acquired, measured as of December 5, 2018, was $ 2.57 billion, comprised of:

(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.

In the years ended December 31, 2019 and 2018, we recognized a gain of $ 11 million and $ 10 million, respectively, recorded in other, net, for a cumulative gain of $ 21 million associated with the bargain purchase, primarily due to the decline in the market value of our shares between the announcement date and the closing date.

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.

We estimated the fair value

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

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.

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.

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.

In connection with the Ocean Rig acquisition, we acquired contracts with Samsung Heavy Industries Co., Ltd.

(“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.

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.

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.

Songa Offshore SE

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.

The fair value of net assets acquired, measured as of January 30, 2018, was $ 1.76 billion, comprised of:

(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.

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.

The goodwill resulting from the business combination was attributed to synergies and intangible assets that did not qualify for separate recognition.

Our estimates of fair value for these assets 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, dayrates and discount rates.

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.

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.

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.

In connection with the Songa acquisition, we acquired undesignated currency swaps and interest rate swaps that we subsequently settled and terminated.

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 3—Accounting Standards Update

Recently adopted accounting standards

Debt with conversion and other options —Effective January 1, 2021, we early adopted the accounting standards update that simplifies the accounting for convertible instruments, such as our exchangeable debt, by limiting the accounting models that result in separately recognizing embedded conversion features from the host contract.

The accounting standards update also enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings per share guidance.

Our adoption did not result in any accounting changes for the 0.50% exchangeable senior bonds due January 2023 (the “0.50% Exchangeable Senior Bonds”) or the 2.50% senior guaranteed exchangeable bonds due January 2027 (the “2.50% Senior Guaranteed Exchangeable Bonds”).

Under previous accounting guidance, for the 4.00% senior guaranteed exchangeable bonds due December 2025 (the “4.00% Senior Guaranteed Exchangeable Bonds”), we would have recorded the debt and exchange features separately and, consequently, we would have recognized in current and future periods greater amortization, as a component of interest expense.

See Note 9—Debt .

Note 4—Unconsolidated Affiliates

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.

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, reliability, sustainability and safety for drilling and other activities.

At December 31, 2021 and 2020, the aggregate carrying amount of our equity investments was $ 91 million and $ 138 million, respectively, recorded in other assets.

Our equity-method investment in Orion is the most significant of our equity investments.

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.

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.

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

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about the future performance of the investment, including future demand and supply for harsh environment floaters, rig utilization, revenue efficiency and dayrates.

At December 31, 2020 and 2019, the aggregate carrying amount of our investment in Orion was $ 104 million and $ 164 million, respectively.

In the years ended December 31, 2020 and 2019, we made an aggregate cash contribution of $ 8 million and $ 74 million, respectively, to Orion.

In the years ended December 31, 2021 and 2020, we recognized a loss of $ 37 million and $ 59 million, respectively, which had no tax effect, recorded in other, net, associated with the impairment of our equity investment in Orion upon determination that the carrying amount exceeded the estimated fair value and that the impairment was other than temporary.

We estimated the fair value of our investment by applying the income method using significant unobservable inputs, representative of Level 3 fair value measurements, including an assumed discount rate of 12 percent and assumptions about the future performance of the investment, such as future demand and supply for harsh environment floaters, rig utilization, revenue efficiency and dayrates.

At December 31, 2021 and 2020, the aggregate carrying amount of our equity investment in Orion was $ 57 million and $ 104 million, respectively.

Related party transactions —We engage in certain related party transactions with our unconsolidated affiliates, the most significant of which are under agreements with Orion.

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.

We also lease the rig under a short-term bareboat charter agreement, which is expected to expire in mid-2021.

We also leased the rig under a short-term bareboat charter agreement, which expired in June 2021.

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.

Additionally, we procure services and equipment from other unconsolidated affiliates for technological innovation.

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.

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.

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.

In the years ended December 31, 2021, 2020 and 2019, we received an aggregate cash payment of $ 16 million, $ 46 million and $ 96 million, respectively, under the shipyard care agreement with Orion, primarily related to the commissioning, preparation and mobilization of Transocean Norge .

In the years ended December 31, 2021, 2020 and 2019, we recognized rent expense of $ 12 million, $ 22 million and $ 9 million, respectively, recorded in operating and maintenance costs, and made an aggregate cash payment of $ 15 million, $ 22 million and $ 6 million, respectively, to charter the rig and rent other equipment from Orion.

In the years ended December 31, 2021, 2020 and 2019, we made an aggregate cash payment of $ 6 million, $ 15 million and $ 11 million, respectively, to other unconsolidated affiliates for research and development and for equipment to reduce emissions and improve reliability.

Additionally, in June 2021, Orion refinanced its shipyard loans under a financing arrangement for $ 100 million, in which we participated at a rate equivalent to our ownership interest in Orion.

Borrowings under the financing arrangement are secured by

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Transocean Norge .

The financing arrangement, which expires in June 2024, requires interest to be paid on outstanding borrowings at the London Interbank Offered Rate plus a margin of 6.50 percent per annum.

In the year ended December 31, 2021, we made a cash investment in loans of $ 33 million.

At December 31, 2021, the outstanding borrowings, including accrued and unpaid interest, due to us under the financing arrangement were $ 34 million, recorded in other assets.

Note 5—Revenues

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At December 31, 2021, the drilling contract with the longest expected remaining duration, excluding unexercised options, extends through February 2028.

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.

In connection with the settlement, among other things, our customer agreed to pay us $ 185 million in four equal installments through January 15, 2023.

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.

In the year ended December 31, 2020, we received an aggregate cash payment of $ 46 million in scheduled installments under the arrangement.

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.

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.

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.

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.

Disaggregation —Our contract drilling revenues, disaggregated by asset group and by country in which they were earned, were as follows (in millions):

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Midwater floaters

High-specification jackups

Total revenues

Total contract drilling revenues

(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 .

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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):

Major customers —For the year ended December 31, 2021, Shell plc (together with its affiliates, “Shell”) and Equinor ASA (together with its affiliates, “Equinor”) represented approximately 31 percent and 30 percent, respectively, of our consolidated operating revenues.

For the year ended December 31, 2020, Shell, Equinor and Chevron Corporation (together with its affiliates, “Chevron”) represented approximately 28 percent, 27 percent and 14 percent, respectively, of our consolidated operating revenues.

For the year ended December 31, 2019, Shell, Equinor and Chevron represented approximately 26 percent, 21 percent and 17 percent, respectively, of our consolidated operating revenues.

Contract liabilities —Contract liabilities for our contracts with customers were as follows (in millions):

Deferred contract revenues, recorded in other current liabilities

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Total contract liabilities, end of period

Note 6—Drilling Fleet

Performance obligations satisfied in prior periods —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.

In connection with the settlement, among other things, our customer agreed to pay us $ 185 million in four equal installments through January 15, 2023.

In the years ended December 31, 2021 and 2020, we received an aggregate cash payment of $ 46 million in scheduled installments under the arrangement.

At December 31, 2021 and 2020, the aggregate carrying amount of the related receivable was $ 90 million and $ 133 million, respectively, net of imputed interest, including $ 46 million and $ 45 million, respectively, recorded in accounts receivable, and $ 44 million and $ 88 million, respectively, recorded in other assets.

In the year ended December 31, 2019, we recognized revenues of $ 10 million for other performance obligations satisfied in prior periods due to certain revenues recognized on a cash basis.

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Pre-operating costs —In the years ended December 31, 2021, 2020 and 2019, we recognized pre-operating costs of $ 48 million, $ 60 million and $ 18 million, respectively, recorded in operating and maintenance costs.

At December 31, 2021 and 2020, the unrecognized pre-operating costs to obtain contracts was $ 21 million and $ 20 million, respectively, recorded in other assets.

Note 6—Contract Intangible Assets

The gross carrying amount and accumulated amortization of our drilling contract intangible assets were as follows (in millions):

Year ended December 31, 2021

Year ended December 31, 2020

Drilling contract intangible assets

Balance, beginning of period

Balance, end of period

As of December 31, 2021, the estimated future amortization over the expected remaining contract periods, the longest of which currently extends through March 2024, was as follows (in millions):

Years ending December 31,

Total carrying amount of contract intangible assets

Note 7—Long-Lived Assets

Disaggregation —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

Other countries (a)

Total long-lived assets

(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.

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.

Although we are organized under the laws of Switzerland, we have minimal assets located in Switzerland, and we do not conduct any operations or earn operating revenues in Switzerland.

Construction work in progress —The changes in our construction work in progress were as follows (in millions):

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Construction work in progress impaired

Construction work in progress acquired in business combination

Property and equipment placed into service

Newbuild construction program

Other equipment and construction projects

Construction work in progress, end of period

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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.

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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.

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.

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.

We estimated the fair value of the rig and related assets in this asset group by applying the market approach using 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.

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.

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.

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.

We estimated the fair value of the assets using significant other observable inputs, representative of

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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.

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.

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.

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.

Dispositions —During the year ended December 31, 2021, in connection with our efforts to dispose of non-strategic assets, we completed the sale of the harsh environment floater Leiv Eiriksson and related assets.

In the year ended December 31, 2021, we received aggregate net cash proceeds of $ 4 million and recognized an aggregate net loss of $ 57 million ($ 0.09 per diluted share), which had no tax effect, primarily associated with the disposal of these assets.

In the year ended December 31, 2021, we received aggregate net cash proceeds of $ 5 million and recognized an aggregate net loss of $ 5 million associated with the disposal of assets unrelated to rig sales.

During the year ended December 31, 2020, 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.

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.

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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.

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.

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.

Note 7—Goodwill and Other Intangibles

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

Year ended December 31, 2019

Drilling contract intangible assets

Balance, beginning of period

Balance, end of period

We amortize the drilling contract intangible assets over the remaining contract periods, the longest of which is currently expected to extend through March 2024.

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

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).

We identified the impairment of these assets as an indicator that our goodwill may be impaired.

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.

We estimated the fair value of the contract drilling services reporting unit using the income approach.

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.

Cancelled construction contracts —In the year ended December 31, 2019, we recognized income of $ 132 million, recorded in other income, net, associated with the cancellation of certain construction contracts acquired in December 2018 in connection with our acquisition of Ocean Rig UDW Inc., a Cayman Islands exempted company with limited liability, for the construction of two ultra-deepwater drillships.

Under the acquisition method of accounting for the business combination, the contract liabilities 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.

Note 8—Leases

Our operating leases are principally for office space, storage facilities, operating equipment and land.

Overview —Our operating leases are principally for office space, storage facilities, operating equipment and land.

At December 31, 2021, our operating leases had a weighted-average discount rate of 6.4 percent and a weighted-average remaining lease term of 13.5 years.

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.

We recognize expense for the amortization of the right-of-use asset in depreciation and amortization.

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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):

Lease costs —The components of our lease costs were as follows (in millions):

Years ended December 31,

Operating lease costs

Short-term lease costs

Operating lease costs

Finance lease costs, amortization of right-of-use asset

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Total lease costs

In the year ended December 31, 2019, we recognized a loss of $ 26 million, with no tax effect, associated with the impairment of right-of-use assets and leasehold improvements for certain office facilities that we had vacated or had committed to sublease.

Supplemental cash flow information for our leases was as follows (in millions):

Lease payments —Supplemental cash flow information for our leases was as follows (in millions):

Years ended December 31,

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Financing cash flows from finance lease

At December 31, 2020, the aggregate future minimum rental payments for our leases were as follows (in millions):

At December 31, 2021, the aggregate future minimum lease payments were as follows (in millions):

Years ending December 31,

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Present value of future minimum rental payments

Less current portion, recorded in other current liabilities

Current portion, recorded in other current liabilities

Long-term lease liabilities, recorded in other long-term liabilities

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

Outstanding debt —The aggregate principal amounts and aggregate carrying amounts, net of debt-related balances, including unamortized discounts, premiums, issue costs and fair value adjustments of our debt, were as follows (in millions):

Outstanding debt —The aggregate principal amounts and aggregate carrying amounts, including the contractual interest payments of debt restructured in the year ended December 31, 2020 and unamortized debt-related balances, such as discounts, premiums and issue costs, were as follows (in millions):

Principal amount

Carrying amount

6.50 % Senior Notes due November 2020

6.375 % Senior Notes due December 2021

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5.375 % Senior Secured Notes due May 2023

9.00 % Senior Notes due July 2023

5.875 % Senior Secured Notes due January 2024

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7.25 % Senior Notes due November 2025

4.00 % Senior Guaranteed Exchangeable Bonds due December 2025

7.50 % Senior Notes due January 2026

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Less debt due within one year

6.50% Senior Notes due November 2020

6.375 % Senior Notes due December 2021

5.52 % Senior Secured Notes due May 2022

3.80 % Senior Notes due October 2022

5.375 % Senior Secured Notes due May 2023

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11.50 % Senior Guaranteed Notes due January 2027

6.875 % Senior Secured Notes due February 2027

Total debt due within one year

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and Transocean Inc.

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”).

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,

Total installments of debt

Total debt-related balances, net

Total carrying amount of debt

are not subject to any significant restrictions on their ability to obtain funds from their consolidated subsidiaries by dividends, loans or capital distributions.

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.

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.

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.

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 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 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.

The indentures that govern the 4.00% Senior Guaranteed Exchangeable Bonds, the 2.50% Senior Guaranteed Exchangeable Bonds and the 0.50% 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.

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.

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.

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.

At December 31, 2021, the interest rate in effect for the 3.80% senior notes due October 2022 and the 7.35% senior notes due December 2041 was 5.80 percent and 9.35 percent, respectively.

Scheduled maturities —At December 31, 2021, the scheduled maturities of our debt, including the principal installments and other installments, representing the contractual interest payments of previously restructured debt, were as follows (in millions):

Years ending December 31,

Total installments of debt

Total unamortized debt-related balances, net

Total carrying amount of debt

Credit agreements

Secured Credit Facility —As of December 31, 2021, we have a $ 1.33 billion secured revolving credit facility established under a bank credit agreement (as amended from time to time, 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.

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.

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 , and at December 31, 2021, the aggregate carrying amount of which was $ 5.07 billion.

The maximum borrowing capacity will be reduced to $ 1.00 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.

The Secured Credit Facility contains covenants that, among other things, include maintenance of a minimum guarantee coverage ratio of 3.0 to 1.0, a minimum collateral coverage ratio of 2.1 to 1.0, a maximum debt to capitalization ratio of 0.60 to 1.00 and minimum liquidity of $ 500 million.

The Secured Credit Facility also restricts the ability of Transocean Ltd.

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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.

Throughout the term of the Secured Credit Facility, we pay a facility fee on the amount of the underlying commitment which ranges from

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.

At December 31, 2021, based on the credit rating of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

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.

the Secured Credit Facility on that date, the Secured Credit Facility Margin was 3.375 percent and the facility fee was 0.875 percent.

At December 31, 2021, we had no borrowings outstanding, $ 17 million of letters of credit issued, and we had $ 1.32 billion of available borrowing capacity under the Secured Credit Facility.

Debt issuances

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.

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.

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.

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.

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”).

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”).

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.

We may also use the net cash proceeds of certain equity offerings by Transocean Ltd.

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.

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”).

Shipyard financing arrangement —In June 2021, Transocean Offshore Deepwater Holdings Limited, a Cayman Islands company and our wholly owned indirect subsidiary, entered into credit agreements with Jurong Shipyard Pte Ltd.

establishing facilities (the “Shipyard Loans”) to finance all or a portion of the final payments expected to be owed to the shipyard upon delivery of the ultra-deepwater floaters Deepwater Atlas and Deepwater Titan .

The Shipyard Loans are guaranteed by Transocean Inc.

Borrowings under the Shipyard Loan for Deepwater Atlas will be secured by, among other security, a lien on the rig.

In certain circumstances, borrowings under the Shipyard Loan for Deepwater Titan may also be secured by, among other security, a lien on the rig.

We will repay the borrowings, together with interest of 4.5 percent per annum, according to the selected installment schedule over a maximum of a six-year period following delivery of the drilling rigs.

We have the right to prepay any outstanding borrowings, in full or in part, without penalty.

The Shipyard Loans contain covenants that, among other things, limit the ability of the subsidiary owners of the drilling rigs to incur certain types of additional indebtedness or make certain additional commitments or investments.

At December 31, 2021, we had no borrowings outstanding under the Shipyard Loans.

Exchangeable bonds

Exchange terms —At December 31, 2021, the (a) current exchange rates, expressed as the number of Transocean Ltd.

shares per $1,000 note, (b) implied exchange prices per Transocean Ltd.

share and (c) aggregate shares, expressed in millions, issuable upon exchange of our exchangeable bonds were as follows:

0.50% Exchangeable Senior Bonds due January 2023

4.00% Senior Guaranteed Exchangeable Bonds due December 2025

2.50% Senior Guaranteed Exchangeable Bonds due January 2027

The exchange rates of our exchangeable bonds, identified above, are subject to adjustment upon the occurrence of certain events.

The 0.50% Exchangeable Senior Bonds may be exchanged by holders into Transocean Ltd.

shares at any time prior to the close of business on the business day immediately preceding the maturity date.

The 2.50% Senior Guaranteed Exchangeable Bonds may be exchanged by holders into Transocean Ltd.

shares at any time prior to the close of business on the second business day immediately preceding the maturity date or redemption date.

The 4.00% Senior Guaranteed Exchangeable Bonds may be exchanged by holders at any time prior to the close of business on the second business day immediately preceding the maturity date and, at our election, such exchange may be settled by delivering cash, Transocean Ltd.

shares or a combination of cash and shares.

Effective interest rates and fair values —At December 31, 2021, the effective interest rates and estimated fair values of our exchangeable bonds were as follows (in millions, except effective interest rates):

interest rate

0.50% Exchangeable Senior Bonds due January 2023

4.00% Senior Guaranteed Exchangeable Bonds due December 2025

2.50% Senior Guaranteed Exchangeable Bonds due January 2027

We estimated the fair values of the exchangeable debt instruments, including the exchange features, by employing a binomial lattice model using significant other observable inputs, representative of Level 2 fair value measurements, including the terms and credit spreads of our debt and the expected volatility of the market price for our shares.

Related balances —At December 31, 2021 and 2020, the premium associated with the original issuance of the 0.50% Exchangeable Senior Bonds had a carrying amount of $ 172 million, recorded in equity as a component of additional paid-in capital.

Debt issuance

Senior guaranteed exchangeable bonds —On February 26, 2021, we issued $ 294 million aggregate principal amount of the 4.00% Senior Guaranteed Exchangeable Bonds and made an aggregate cash payment of $ 11 million in private exchanges (collectively, the “2021 Private Exchange”) for $ 323 million aggregate principal amount of the 0.50% Exchangeable Senior Bonds.

In the year ended December 31, 2021, as a result of the 2021 Private Exchange, we recognized a gain of $ 51 million ($ 0.08 per diluted share), with no tax effect, associated with the retirement of debt (see “— Debt restructuring, repayment and retirement ”).

The initial carrying amount of the 4.00% Senior Guaranteed Exchangeable Bonds, measured at the estimated fair value on the date of issuance, was $ 260 million.

We estimated the fair value of the exchangeable debt instrument, including the exchange feature, by employing a binomial lattice model using significant other observable inputs, representative of Level 2 fair value measurements, including the terms and credit spreads of our debt and expected volatility of the market price for our shares.

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On August 14, 2020, we issued $ 238 million aggregate principal amount of 2.50% Senior Guaranteed Exchangeable Bonds in non-cash private exchanges (collectively, the “2020 Private Exchange”) for $ 397 million aggregate principal amount of the 0.50% Exchangeable Senior Bonds.

In the year ended December 31, 2020, as a result of the 2020 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 ”).

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.

shares per $1,000 note, which implies a conversion price of $ 6.17 per share, subject to adjustment upon the occurrence of certain events.

We may redeem all or a portion of the 2.50% 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.

We recorded the conversion feature of the 2.50% Senior Guaranteed Exchangeable Bonds, measured at its estimated fair value of $ 46 million, to additional paid-in capital.

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.

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.

We estimated the fair value by employing a binomial lattice model using significant other observable inputs, representative of Level 2 fair value measurements, including the expected volatility of the market price for our shares.

Related party transactions —In August 2020, 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 0.50% Exchangeable Senior Bonds for $ 213 million aggregate principal amount of 2.50% Senior Guaranteed Exchangeable Bonds.

Perestroika AS has certain registration rights related to its shares and shares that may be issued in connection with any exchange of its 2.50% Senior Guaranteed Exchangeable Bonds.

At December 31, 2020, Perestroika AS held $ 213 million aggregate principal amount of the Senior Guaranteed Exchangeable Bonds.

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.

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.

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.

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.

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.

See Note 21—Subsequent Event.

At December 31, 2021 and 2020, Perestroika AS held $ 213 million aggregate principal amount of the 2.50% Senior Guaranteed Exchangeable Bonds.

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% Senior Notes”), and we received aggregate cash proceeds of $ 743 million, net of issue costs.

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 premium, and subsequently, at specified redemption prices.

In the year ended December 31, 2020, as a result of the 2020 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 ”).

We may also use the net cash proceeds of certain equity offerings by Transocean Ltd.

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.

The 6.875% Senior Secured Notes are

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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.

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.

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.

We are required to pay semiannual installments of principal and interest.

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.

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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.

The 5.875% Senior Secured Notes are secured by the assets and earnings associated with the harsh environment floaters Transocean Enabler and Transocean Encourage and the equity of the wholly owned subsidiaries that own or operate the collateral rigs.

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.

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.

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.

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.

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.

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.

Encumbered assets —At December 31, 2021, we had restricted cash and cash equivalents of $ 409 million deposited in restricted accounts to satisfy debt service and reserve requirements for the senior secured notes.

At December 31, 2021, 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 $ 5.93 billion.

Debt restructuring, repayment and retirement

Restructuring and early retirement —During the years ended December 31, 2021, 2020 and 2019, we restructured or retired certain notes as a result of exchange offers, private exchanges, redemption, tender offers and open market repurchases.

We recorded the Exchange Transactions completed in August 2020 and September 2020 under ASC 470-60, Troubled Debt Restructuring by Debtors.

We recorded the

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2020 Exchange Transactions completed in August 2020 and September 2020 under ASC 470-60, Troubled Debt Restructuring by Debtors.

The aggregate principal amounts, cash payments and recognized gain or loss for such transactions were as follows (in millions):

Years ended December 31,

Year ended December 31, 2021

Year ended December 31, 2020

Year ended December 31, 2019

6.50 % Senior Notes due November 2020

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9.00 % Senior Notes due July 2023

5.875 % Senior Secured Notes due January 2024

7.25 % Senior Notes due November 2025

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Aggregate net gain (loss)

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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.

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.

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.

Scheduled maturities and installments —On the scheduled maturity date of December 15, 2021, we made a cash payment of $ 38 million to repay an equivalent aggregate principal amount of the outstanding 6.375% senior notes due December 2021.

On the scheduled maturity date of November 16, 2020, we made a cash payment of $ 153 million to repay an equivalent aggregate principal amount of the outstanding 6.50% senior notes due November 2020.

In the years ended December 31, 2021, 2020 and 2019, we made an aggregate cash payment of $ 478 million, $ 375 million and $ 354 million, respectively, to repay other indebtedness in scheduled installments.

Note 10—Income Taxes

Overview —Transocean Ltd., a holding company and Swiss resident, is exempt from cantonal and communal income tax in Switzerland, but is subject to Swiss federal income tax.

For Swiss federal income taxes, qualifying net dividend income and net capital gains on the sale of qualifying investments in subsidiaries are exempt.

Consequently, there is not a direct relationship between our Swiss earnings before income taxes and our Swiss income tax expense.

Tax provision and rate —Our provision for income taxes is based on the tax laws and rates applicable in the jurisdictions in which we operate and earn income.

In the years ended December 31, 2020, 2019 and 2018, our effective tax rate was ( 5.1 ) percent, ( 4.9 ) percent and ( 12.8 ) percent, respectively, based on loss before income tax expense.

The relationship between our provision for or benefit from income taxes and our income or loss before income taxes can vary significantly from period to period considering, among other factors, (a) the overall level of income before income taxes, (b) changes in the blend of income that is taxed based on gross revenues rather than income before taxes, (c) rig movements between taxing jurisdictions and (d) our rig operating structures.

The components of our income tax provision (benefit) were as follows (in millions):

Years ended December 31,

Current tax expense (benefit)

Deferred tax expense (benefit)

Income tax expense

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,

Income tax benefit at Swiss federal statutory rate

Earnings subject to rates different than the Swiss federal statutory rate

Losses on impairment

Deemed profits taxes

Withholding taxes

Base erosion and anti-abuse tax

Benefit from foreign tax credits

Currency revaluation

Changes in unrecognized tax benefits, net

Effect of U.S.

Changes in valuation allowance

Effect of operating structural changes

Effect of U.S.

Income tax expense

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), enacted in March 2020, included certain changes to U.S.

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.

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.

In the year ended December 31, 2017, the U.S.

introduced certain changes to tax law (“U.S.

tax reform”), such as, among others, a transition tax and a base erosion and anti-abuse tax.

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.

subsidiaries that owned by U.S.

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.

In the years ended December 31, 2019 and 2018, we

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recognized income tax expense of $ 21 million and $ 33 million, respectively, related to the bareboat charter structure of our U.S.

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):

Deferred tax assets

Net operating loss carryforwards

Interest expense limitation

Accrued payroll costs not currently deductible

United Kingdom charter limitation

Tax credit carryforwards

Accrued expenses

Deferred income

Loss contingencies

Valuation allowance

Total deferred tax assets

Deferred tax liabilities

Contract intangible amortization

Total deferred tax liabilities

Deferred tax assets (liabilities), net

At December 31, 2020 and 2019, our deferred tax assets included U.S.

foreign tax credit carryforwards of $ 21 million and $ 22 million, respectively, which will expire between 2024 and 2030.

Deferred tax assets related to our net operating losses were generated in various worldwide tax jurisdictions.

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.

Although such evidence has limited our ability to consider other subjective evidence, we evaluate each jurisdiction separately.

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.

Our deferred tax liabilities include taxes related to the earnings of certain subsidiaries that are not indefinitely reinvested.

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.

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.

However, it is not practicable to estimate the amount of tax that would ultimately be due if remitted.

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):

Years ended December 31,

Balance, beginning of period

Additions for current year tax positions

Additions for prior year tax positions

Reductions related to statute of limitation expirations and changes in law

Reductions for prior year tax positions

Reductions due to settlements

Balance, end of period

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Our unrecognized tax benefits, including related interest and penalties that we recognize as a component of income tax expense, were as follows (in millions):

Unrecognized tax benefits, excluding interest and penalties

Interest and penalties

Unrecognized tax benefits, including interest and penalties

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.

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.

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.

Tax returns —We file federal and local tax returns in several jurisdictions throughout the world.

With few exceptions, we are no longer subject to examinations of our U.S.

tax matters for years prior to 2014.

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.

We are defending our tax positions in those jurisdictions.

While we cannot predict or provide assurance as to the timing or the outcome of these proceedings, we do not expect the ultimate liability to have a material adverse effect on our consolidated statement of financial position or results of operations, although it may have a material adverse effect on our consolidated statement of cash flows.

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.

In May 19, 2014, the Brazilian tax authorities issued an additional tax assessment for the years 2009 and 2010.

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.

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.

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.

Each country has its own tax regimes with varying nominal rates, deductions and tax attributes.

From time to time, we may identify changes to previously evaluated tax positions that could result in adjustments to our recorded assets and liabilities.

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.

Note 11—Loss Per Share

The computation of basic and diluted loss per share was as follows (in millions, except per share data):

Years ended December 31,

Numerator for loss per share, basic and diluted

Net loss attributable to controlling interest

Denominator for loss per share, basic and diluted

Weighted-average shares outstanding

Effect of share-based awards

Weighted-average shares for per share calculation

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.

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.

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Note 10—Postemployment Benefit Plans

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We sponsor defined contribution plans for our employees in most markets in which we operate worldwide, the most significant of which were as follows:

and Norway and (4) a qualified savings plan covering certain eligible employees working in the U.K.

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.

(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 United Kingdom (“U.K.”) and Norway and (4) a qualified savings plan covering certain eligible employees working in the U.K.

In the years ended December 31, 2021, 2020 and 2019, we recognized expense of $ 52 million, $ 56 million and $ 52 million, respectively, related to our defined contribution plans, recorded in the same financial statement line item as cash compensation paid to the respective employees.

Defined benefit pension and other postemployment benefit plans

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.

in the U.K., we had one funded defined benefit plan (the “U.K.

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.

Overview —As of December 31, 2021, we had defined benefit plans in the U.S., including three funded and three unfunded defined benefit plans (the “U.S.

Plans”), and in the U.K., we had one funded defined benefit plan (the “U.K.

During the year ended December 31, 2021, as required by local authorities, we terminated our two remaining plans in Norway (together with the U.K.

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.

We also 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.

We maintain the benefit obligations under our plans until they are fully satisfied.

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“na” means not applicable.

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Net periodic benefit costs recognized included the following components (in millions):

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Expected return on plan assets

Special termination benefits

Settlements and curtailments

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“na” means not applicable.

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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):

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Projected benefit obligation, beginning of period

Actuarial (gains) losses, net

Actuarial losses (gains), net

Interest cost

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Accumulated benefit obligation, end of period

The aggregate projected benefit obligation and fair value of plan assets for plans with a projected benefit obligation in excess of plan assets were as follows (in millions):

Certain amounts related to plans with a projected benefit obligation in excess of plan assets were as follows (in millions):

December 31, 2021

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Fair value of plan assets

The aggregate accumulated benefit obligation and fair value of plan assets for plans with an accumulated benefit obligation in excess of plan assets were as follows (in millions):

Certain amounts related to plans with an accumulated benefit obligation in excess of plan assets were as follows (in millions):

December 31, 2021

2 unchanged sentences

Fair value of plan assets

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The amounts in accumulated other comprehensive loss (income) that have not been recognized were as follows (in millions):

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Other investments

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We periodically review our investment policies, plan assets and asset allocation strategies to evaluate performance relative to specified objectives.

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Plan are given established ranges within which the investments may deviate from the target allocations.

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.

The investments for the funded defined benefit plans were categorized as follows (in millions):

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Cash and money market funds

Property collective trusts

Investment contracts

Total other investments

Total investments

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Cash and money market funds

Property collective trusts

Investment contracts

1 unchanged sentence

Total investments

We estimated the fair values of the plan assets by applying the market approach, as categorized above, using either (i) significant observable inputs, representative of Level 1 fair value measurements, including market prices of actively traded funds, or (ii) significant other observable inputs, representative of Level 2 fair value measurements, including market prices of the underlying securities in the collective trust funds.

Plans and the U.K.

Plan invest primarily in passively managed funds that reference market indices.

The funded Norway Plan is subject to contractual terms under selected insurance programs.

Plan invest in passively and actively managed funds that are referenced to or benchmarked against market indices.

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.

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.

Since 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.

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Funding contributions and benefit payments —In the years ended December 31, 2021, 2020 and 2019, we made an aggregate contribution of $ 10 million, $ 14 million and $ 22 million, respectively, to the defined benefit pension plans and the OPEB Plans using our cash flows from operations.

In the year ending December 31, 2022, we expect to make an aggregate contribution of $ 4 million, including $ 1 million and $ 3 million to the defined benefit pension plans and the OPEB Plans, respectively.

Benefit payments —The projected benefits payments were as follows (in millions):

The projected benefits payments were as follows (in millions):

Years ending December 31,

Note 11—Income Taxes

Overview —Transocean Ltd., a holding company and Swiss resident, is subject to Swiss federal, cantonal and communal income tax.

For Swiss income taxes, however, qualifying net dividend income and net capital gains on the sale of qualifying investments in subsidiaries are exempt from taxation.

Consequently, there is not a direct relationship between our Swiss earnings before income taxes and our Swiss income tax expense.

Tax provision and rate —In the years ended December 31, 2021, 2020 and 2019, our effective tax rate was ( 25.7 ) percent, ( 5.1 ) percent and ( 4.9 ) percent, respectively, based on loss before income tax expense.

The components of our income tax provision (benefit) were as follows (in millions):

Years ended December 31,

Current tax benefit

Deferred tax expense

Income tax expense

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,

Income tax benefit at Swiss federal statutory rate

Changes in valuation allowance

Earnings subject to rates different than the Swiss federal statutory rate

Deemed profits taxes

Jurisdictional ownership changes of certain assets

Withholding taxes

Losses on impairment

Changes in unrecognized tax benefits, net

Swiss Federal Act on Tax Reform and AHV Financing

Base erosion and anti-abuse tax

Coronavirus Aid, Relief, and Economic Security Act

Operating structural changes

Income tax expense

In January 2020, Switzerland made effective the Federal Act on Tax Reform and AHV Financing (“TRAF”), which will subject us to ordinary taxation, effective January 1, 2022, following the expiration of our transition rulings.

In November 2021, we reached an agreement with the Swiss tax authorities regarding the manner by which TRAF will apply to certain Swiss subsidiaries, which will allow us to access historic depreciation and costs related to financing assets not previously deducted on Swiss tax returns, which can be apportioned to offset taxable income based on the remaining useful lives of the rigs and financing assets.

In the year ended December 31, 2021, we recorded a deferred tax liability of $ 238 million and a deferred tax asset of $ 1.33 billion, offset with a valuation allowance of $ 1.17 billion.

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The Coronavirus Aid, Relief, and Economic Security Act, enacted in March 2020, made certain changes to U.S.

tax law, including, among others, extending up to five years the carryback period for net operating losses generated between December 31, 2017 and January 1, 2021.

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.

In the year ended December 31, 2019, as a result of the U.S.

base erosion and anti-abuse tax, we recognized income tax expense of $ 21 million related to the bareboat charter structure of our U.S.

operations, a significant portion of which was contractually reimbursed by our customers under a change-in-law provision in our drilling contracts.

Deferred taxes —The significant components of our deferred tax assets and liabilities were as follows (in millions):

Deferred tax assets

Swiss historic depreciation and financing asset costs

Net operating loss carryforwards

Interest expense limitation

United Kingdom charter limitation

Accrued expenses

Deferred income

Accrued payroll costs not currently deductible

Loss contingencies

Valuation allowance

Total deferred tax assets

Deferred tax liabilities

Contract intangible amortization

Total deferred tax liabilities

Deferred tax assets (liabilities), net

As of December 31, 2021, we include taxes related to the earnings of all of our subsidiaries since we no longer consider the earnings of any of our subsidiaries to be indefinitely reinvested.

At December 31, 2021 and 2020, our deferred tax assets included U.S.

foreign tax credits of $ 19 million and $ 21 million, respectively, which will expire between 2024 and 2031.

Deferred tax assets related to our net operating losses were generated in various worldwide tax jurisdictions.

At December 31, 2021, our net deferred tax assets related to our net operating loss carryforwards included $ 668 million, which do not expire, and $ 247 million, which will expire between 2022 and 2038.

As of December 31, 2021, 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.

Although such evidence has limited our ability to consider other subjective evidence, we evaluate each jurisdiction separately.

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, 2021 and 2020, due to uncertainty of realization, we had a valuation allowance of $ 1.82 billion and $ 685 million, respectively, on net operating losses and other deferred tax assets due to the uncertainty of realization.

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):

Years ended December 31,

Balance, beginning of period

Additions for current year tax positions

Additions for prior year tax positions

Reductions related to statute of limitation expirations and changes in law

Reductions due to settlements

Reductions for prior year tax positions

Balance, end of period

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Our unrecognized tax benefits, including related interest and penalties that we recognize as a component of income tax expense, were as follows (in millions):

Unrecognized tax benefits, excluding interest and penalties

Interest and penalties

Unrecognized tax benefits, including interest and penalties

In the years ended December 31, 2021, 2020 and 2019, we recognized, as a component of our income tax provision, expense of $ 8 million, expense of $ 7 million and benefit of $ 72 million, respectively, related to interest and penalties associated with our unrecognized tax benefits.

As of December 31, 2021, we have unrecognized benefits of $ 435 million, including interest and penalties, against which we have recorded net operating loss deferred tax assets of $ 320 million, resulting in net unrecognized tax benefits of $ 115 million, including interest and penalties, that upon reversal would favorably impact our effective tax rate.

During the year ending December 31, 2022, 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.

Tax positions and returns —We conduct operations through our various subsidiaries in countries throughout the world.

Each country has its own tax regimes with varying nominal rates, deductions and tax attributes that are subject to changes resulting from new legislation, interpretation or guidance.

From time to time, as a result of these changes, we may revise previously evaluated tax positions, which could cause us to adjust our recorded tax assets and liabilities.

Tax authorities in certain jurisdictions are examining our tax returns and, in some cases, have issued assessments.

We intend to defend our tax positions vigorously.

Although we can provide no assurance as to the outcome of the aforementioned changes, examinations or assessments, we do not expect the ultimate liability to have a material adverse effect on our condensed consolidated statement of financial position or results of operations;

however, it could have a material adverse effect on our condensed consolidated statement of cash flows.

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.

In May 2014, the Brazilian tax authorities issued an additional tax assessment for the years 2009 and 2010.

We filed protests with the Brazilian tax authorities for the assessments and are engaged in the appeals process, and a portion of two cases were favorably closed.

As of December 31, 2021, the remaining aggregate tax assessment, including interest and penalties, was for corporate income tax of BRL 638 million, equivalent to approximately $ 115 million, and indirect tax of BRL 110 million, equivalent to $ 20 million.

We believe our returns are materially correct as filed, and we are vigorously contesting these assessments.

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.

Note 12—Loss Per Share

The computation of basic and diluted loss per share was as follows (in millions, except per share data):

Years ended December 31,

Numerator for loss per share, basic and diluted

Net loss attributable to controlling interest

Denominator for loss per share, basic and diluted

Weighted-average shares outstanding

Effect of share-based awards

Weighted-average shares for per share calculation

Loss per share, basic and diluted

In the years ended December 31, 2021, 2020 and 2019, we excluded from the calculation 12.6 million, 10.8 million and 12.0 million share-based awards, respectively, since the effect would have been anti-dilutive.

In the years ended December 31, 2021, 2020 and 2019, we excluded from the calculation 104.4 million, 84.0 million and 84.0 million shares, respectively, issuable upon conversion of the 0.50 % Exchangeable Senior Bonds, the 2.50 % Senior Guaranteed Exchangeable Bonds and the 4.00 % Senior Guaranteed Exchangeable Bonds since the effect would have been anti-dilutive.

Note 13—Commitments and Contingencies

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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.

We also have long-term service agreements with original equipment manufacturers to provide services and parts, primarily related to our pressure

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control systems and drilling systems.

The future payments required under our service agreements were estimated based on our projected operating activity and may vary subject to actual operating activity.

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At December 31, 2021 and 2020, we also had outstanding surety bonds totaling $ 146 million and $ 153 million, respectively, to secure customs obligations related to the importation of our rigs and certain performance and other obligations.

At December 31, 2020 and 2019, the aggregate cash collateral held by institutions to secure our letters of credit and surety bonds was $ 8 million and $ 10 million, respectively.

At December 31, 2021 and 2020, the aggregate cash collateral held by institutions to secure our letters of credit and surety bonds was $ 8 million.

Legal proceedings

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In September 2020, funds managed by, or affiliated with, Whitebox Advisors LLC (“Whitebox”) as holders of certain series of our notes subject to the 2020 Exchange Offers, filed a claim (the “Claim”) in the U.S.

District Court for the Southern District of New York (the “Court”) related to such certain internal reorganization transactions and the Exchange Offers.

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.

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.

District Court for the Southern District of New York (the “Trial Court”) related to such certain internal reorganization transactions and the 2020 Exchange Offers.

On September 23, 2020, we filed an answer to the Claim with the Trial 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% Senior Notes.

Concurrently, with our answer and counterclaims, we also submitted a motion for summary judgment seeking an expedited judgment on our request for declaratory judgment.

Whitebox subsequently submitted a cross-motion for summary judgment seeking dismissal of our counterclaims.

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.

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.

Whitebox has appealed the Court’s ruling.

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.

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.

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.

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.

District Court for

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the Eastern District of Louisiana (the “MDL Court”), the court in which most claims against us were consolidated by the U.S.

Judicial Panel on Multidistrict Litigation.

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.

At December 31, 2019, the remaining cash balance in the escrow account was $ 125 million, recorded in restricted cash accounts and investments.

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.

On November 30, 2020, while awaiting the Trial 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.

On December 17, 2020, the Trial 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% Senior Notes.

Whitebox has appealed the Trial Court’s ruling.

The facts alleged in the purported notice of default under the 8.00% Senior Notes were the same as the facts underlying the Claim and the purported notice of default under the 7.25% Senior Notes.

Accordingly, following the amendment and internal reorganization transactions on November 30, 2020, and the subsequent ruling from the Trial 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.

See Note 20—Subsequent Event .

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.

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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.

At December 31, 2020, eight plaintiffs have claims pending in Louisiana, in which we have or may have an interest.

One of our subsidiaries was named in additional complaints filed in Illinois and Missouri, where the plaintiffs similarly allege that the defendants manufactured asbestos containing products or used asbestos-containing drilling mud additives in connection with land-based drilling operations.

At December 31, 2021, 11 plaintiffs have claims pending in Louisiana and 9 plaintiffs have claims pending in Illinois and Missouri, 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.

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Based on our evaluation of the exposure to date, we do not expect the 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.

One of our subsidiaries has been named as a defendant, along with numerous other companies, in lawsuits arising out of the subsidiary’s manufacture and sale of heat exchangers, and involvement in the construction and refurbishment of major industrial complexes alleging bodily injury or personal injury as a result of exposure to asbestos.

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One of our subsidiaries was named as a defendant, along with numerous other companies, in lawsuits arising out of the subsidiary’s manufacture and sale of heat exchangers, and involvement in the construction and refurbishment of major industrial complexes alleging bodily injury or personal injury as a result of exposure to asbestos.

As of December 31, 2021, the subsidiary was a defendant in approximately 250 lawsuits with a corresponding number of plaintiffs.

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The operating assets of the subsidiary were sold in 1989.

In September 2018, the subsidiary and certain insurers agreed to a settlement of outstanding disputes that provided the subsidiary with cash and an annuity.

In December 2021, the subsidiary and certain insurers agreed to a settlement of outstanding disputes that provide the subsidiary with cash.

An earlier settlement, achieved in September 2018, provided the subsidiary with cash and an annuity that begins making payments in 2024.

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.

Other matters —We are involved in various tax matters, various regulatory matters, and a number of claims and lawsuits, asserted and unasserted, all of which have arisen in the ordinary course of our business.

Macondo well incident —In June 2020, the U.S.

District Court for the Eastern District of Louisiana (the “MDL Court”) released the then-remaining $125 million of assets held in the escrow account established to satisfy our remaining obligations under the settlement agreement that we and the Plaintiff Steering Committee filed in May 2015 with the MDL Court, in which most claims against us for damages related to the blowout of the Macondo well in April 2010 were consolidated by the U.S.

Judicial Panel on Multidistrict Litigation.

Following the release of assets, all significant litigation, including civil and criminal claims, resulting from the Macondo well incident had been resolved.

Other matters —We are involved in various regulatory matters and a number of claims and lawsuits, asserted and unasserted, all of which have arisen in the ordinary course of our business.

We do not expect the liability, if any, resulting from these other matters to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.

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Resolutions of other claims by the EPA, the involved state agency or PRPs are at various stages of investigation.

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.

Nevertheless, based on available information with respect to all environmental matters, including all related pending legal proceedings, asserted legal claims and known potential legal claims that are likely to be asserted, we do not expect the ultimate liability, if any, resulting from such matters, to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.

Note 14—Equity

Shares held by subsidiaries — One of our subsidiaries holds our shares for future use to satisfy our obligations to deliver shares in connection with awards granted under our incentive plans or other rights to acquire our shares.

Share issuance —In June 2021, we commenced an at the market equity offering program (the “ATM Program”) with no expected expiration.

On June 14, 2021, we entered into an equity distribution agreement with a sales agent for the offer and sale of our shares, with up to a maximum aggregate net offering price of $ 400 million, under the ATM Program.

We intend to use the net proceeds from the ATM Program for general corporate purposes, which may include, among other things the repayment or refinancing of indebtedness and the funding of working capital, capital expenditures, investments and additional balance sheet liquidity.

In the year ended December 31, 2021, we received aggregate cash proceeds of $ 158 million, net of issue costs, for the aggregate sale of 36.1 million shares, under the ATM Program.

Shares held by subsidiaries — One of our subsidiaries holds our shares for future use to deliver shares in connection with sales under the ATM Program and in connection with awards granted under our incentive plans or other rights to acquire our shares.

At December 31, 2021 and 2020, our subsidiary held 72.7 million and 24.5 million shares, respectively.

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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):

Years ended December 31,

Balance, beginning of period

Other comprehensive income (loss) before reclassifications

Reclassifications to net loss

Other comprehensive income (loss), net

Effect of adopting accounting standards update

Balance, end of period

Redeemable noncontrolling interest —Until June 11, 2018, we owned a 65 percent interest in Angola Deepwater Drilling Company Ltd.

(“ADDCL”), a Cayman Islands company and variable interest entity for which we concluded that we were the primary beneficiary.

Angco Cayman Limited (“Angco Cayman”) owned the remaining a 35 percent interest in ADDCL.

Under the terms of ADDCL’s governing documents, Angco Cayman had the right to require us to purchase its interest in ADDCL for cash, and accordingly, we presented the carrying amount of Angco Cayman’s ownership interest as redeemable noncontrolling interest on our consolidated balance sheets.

We also had the right under ADDCL’s governing documents to require Angco Cayman to sell us its interest, and we exercised that right.

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.

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

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Awards may be granted as service awards that are earned over a defined service period or as performance awards that are earned based on the achievement of certain market factors or performance targets or a combination of market factors and performance targets.

Our compensation committee of our board of directors determines the terms and conditions of the awards granted under the Long-Term Incentive Plan.

The compensation committee of our board of directors determines the terms and conditions of the awards granted under the Long-Term Incentive Plan.

At December 31, 2021, we had 85.7 million shares authorized and 30.0 million shares available to be granted under the Long-Term Incentive Plan.

At December 31, 2020, the total unrecognized compensation cost related to our unvested share-based awards was $ 24 million, which is expected to be recognized over a weighted-average period of 1.4 years.

At December 31, 2021, the total unrecognized compensation cost related to our unvested share-based awards was $ 29 million, which we expect to recognize over a weighted-average period of 1.8 years.

Service awards typically vest either in three equal annual installments beginning on the first anniversary date of the grant or in an aggregate installment at the end of the stated vesting period.

Performance awards typically are subject to a three-year measurement period during which the number of options or shares to be issued remains uncertain until the end of the measurement period, at which time the awarded number of options or shares to be issued is determined.

The performance awards typically vest in one aggregate installment following the determination date.

Stock options are subject to a stated vesting period and, once vested, typically have a seven-year term during which they are exercisable.

Service-based stock options, once fully vested, are typically exercisable during a seven-year period.

Performance awards typically vest in one aggregate installment following the ultimate determination date.

Performance awards are typically subject to a three-year measurement period during which the number of shares to be issued remains uncertain until the end of the performance period, at which time the awarded number of shares to be issued is determined.

Service awards

Restricted share units —A restricted share unit is a notional unit that is equal to one share but has no voting rights until the underlying share is issued.

The following table summarizes unvested activity for service-based units granted under our incentive plans during the year ended December 31, 2020:

The following table summarizes unvested activity during the year ended December 31, 2021 for service-based units granted under our incentive plan:

Weighted-average

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During the years ended December 31, 2020 and 2019, we had 2,817,155 and 2,224,030 service-based units, respectively, that vested with an aggregate grant-date fair value of $ 24 million and $ 23 million, respectively.

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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:

Stock options —The following table summarizes activity during the year ended December 31, 2021 for vested and unvested service-based stock options outstanding under our incentive plan:

Weighted-average

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At December 31, 2021 and 2020, there were outstanding unvested stock options to purchase 482,688 and 1,355,448 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.

During the year ended December 31, 2019, we granted stock options to purchase 1,594,528 shares with a per option weighted-average grant-date fair value of $ 8.35 .

Performance awards

Restricted share units —We grant performance awards in the form of restricted share units that can be earned depending on the achievement of market factors.

The number of shares ultimately earned per unit is quantified upon completion of the specified period at the determination date.

The following table summarizes unvested activity for performance-based units under our incentive plans during the year ended December 31, 2020:

Restricted share units —We grant performance awards in the form of restricted share units that can be earned depending on the achievement of market factors and performance targets.

The number of shares ultimately earned per unit is quantified upon completion of

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the specified period at the ultimate determination date.

The following table summarizes unvested activity during the year ended December 31, 2021 for performance-based units under our incentive plan:

Weighted-average

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Unvested at January 1, 2021

( 1,030,424 )

Unvested at December 31, 2021

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Other current liabilities

Accrued payroll and employee benefits

Accrued employee benefits and payroll-related liabilities

Accrued interest

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Total other current liabilities

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Other long-term liabilities were comprised of the following (in millions):

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Decrease in accounts receivable

(Increase) decrease in other assets

Increase in other assets

Decrease in accounts payable and other current liabilities

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Change in receivables from / payables to affiliates, net

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Additional cash flow information was as follows (in millions):

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Non-cash investing and financing activities

Capital additions, accrued at end of period (a)

Issuance of debt in exchange transactions (b)

Equity component of exchangeable debt (c)

Issuance of shares in business combinations (d)

Issuance of debt in business combination (e)

Capital additions, accrued at end of period

Issuance of debt in exchange transactions

Equity component of exchangeable debt

(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.

(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.

See Note 7—Long-Lived Assets .

(b) In the year ended December 31, 2021, in connection with the 2021 Private Exchange, we issued $ 294 million aggregate principal amount of the 4.00% Senior Guaranteed Exchangeable Bonds.

In the year ended December 31, 2020, in connection with the 2020 Exchange Transactions, we issued $ 687 million and $ 238 million aggregate principal amount of the 11.50% Senior Guaranteed Notes and the 2.50% Senior Guaranteed Exchangeable Bonds, respectively.

See Note 9—Debt .

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See Note 9—Debt .

(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.

(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.

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Note 18—Financial Instruments

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Restricted cash and cash equivalents

Long-term debt, including current maturities

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:

Long-term loans receivable from unconsolidated affiliates

Cash and cash equivalents —Our cash and cash equivalents are primarily invested in demand deposits, short-term time deposits and money market funds.

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.

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.

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.

Long-term loans receivable from unconsolidated affiliates —The carrying amount of our long-term loans receivable from unconsolidated affiliates, recorded in other assets, represents the principal amount of the cash investment.

We estimated the fair value of our long-term loans receivable from unconsolidated affiliates using significant unobservable inputs, representative of Level 3 fair value measurements, including the terms and credit spreads for the instruments.

Total debt —The carrying amount of our total debt represents the principal amount, contractual interest payments of previously restructured debt and unamortized discounts, premiums and issue costs.

The carrying amount and fair value of our total debt includes amounts related to certain exchangeable debt instruments (see Note 9—Debt ).

We estimated the fair value of our total debt using significant other observable inputs, representative of Level 2 fair value measurements, including the terms and credit spreads for the instruments and, with respect to the exchangeable debt instruments, the expected volatility of the market price for our shares.

Note 19—Risk Concentration

Interest rate risk —Financial instruments that potentially subject us to concentrations of interest rate risk include our restricted and unrestricted cash equivalents and debt.

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.

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.

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.

suppliers, which are denominated in currencies other than the U.S.

Interest rate risk —We are exposed to the interest rate risk related to our fixed-rate debt when we refinance maturing debt with new debt or when we early retire debt in open market repurchases, exchanges or other market transactions.

We are also 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.

Currency exchange rate risk —We are exposed to currency exchange rate risk primarily related to employee compensation costs and purchasing costs that are denominated in currencies other than our functional currency, the U.S.

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.

Our primary strategy for currency exchange rate risk management involves structuring customer contracts to provide for payment in both U.S.

Our primary tool to manage currency exchange rate risk involves structuring customer contracts to provide

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

for payment in both U.S.

dollars and local currency.

The payment portion denominated in local currency is based on anticipated local currency requirements over the contract term.

Due to various factors, including customer acceptance, local banking laws, national content requirements, other statutory requirements, local currency convertibility and the impact of inflation on local costs, actual local currency needs may vary from those anticipated in the customer contracts, resulting in partial exposure to currency exchange rate risk.

Due to various factors, including customer acceptance, local banking laws, national content requirements, other statutory requirements, local currency convertibility, local inflation and revenue efficiency, actual local currency needs may vary from those realized in the customer contracts, resulting in partial exposure to currency exchange rate risk.

The currency exchange effect resulting from our international operations generally has not had a material impact on our operating results.

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.

We limit the amount of exposure to any one institution and do not believe we are exposed to any significant credit risk.

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.

Our receivables are dispersed in various countries.

Credit risk —We are exposed to concentrations of credit risk primarily related to our restricted and unrestricted cash and cash equivalents and customer receivables, both current and long-term.

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, and we limit the amount of exposure to any one institution and do not believe we are exposed to any significant credit risk.

Regarding our customer receivables, which are dispersed in various countries, we earn our revenues by providing our drilling services to integrated energy companies, government-owned or government-controlled energy companies and other independent energy companies.

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.

Although we have encountered only isolated credit concerns related to independent energy 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.

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Negotiations over annual salary or other labor matters could result in higher personnel or other costs or increased operational restrictions or disruptions.

The outcome of any such negotiation generally affects the market for all offshore employees,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued

not only union members.

Furthermore, a failure to reach an agreement on certain key issues could result in strikes, lockouts or other work stoppages.

Note 20—Operating Segments, Geographic Analysis and Major Customers

Operating segments —We operate in a single , global market for the provision of contract drilling services to our customers.

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.

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

Other countries (a)

Total long-lived assets

For a geographic disaggregation of our contract drilling revenues, see Note 5—Revenues.

Although we are organized under the laws of Switzerland, we have minimal assets in Switzerland, and we do not conduct any operations or have operating revenues in Switzerland.

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.

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.

The outcome of any such negotiation generally affects the market for all offshore employees, not only union members.

A failure to reach an agreement on certain key issues could result in strikes, lockouts or other work stoppages.

Note 20—Subsequent Event

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.

The New Senior Guaranteed Exchangeable Bonds are guaranteed by Transocean Ltd.

and the same subsidiaries of Transocean Inc.

that guarantee the Senior Guaranteed Exchangeable Bonds and 11.50 % Senior Guaranteed Notes.

In addition, the New Senior Guaranteed Exchangeable Bonds have an initial exchange rate of 190.4762 Transocean Ltd.

shares per $1,000 note, which implies a conversion price of $ 5.25 per share, subject to adjustment upon the occurrence of certain events.

Debt exchange litigation and purported notice of default —On February 1, 2022, the U.S.

Court of Appeals for the Second Circuit dismissed as moot the appeal filed by funds managed by, or affiliated with, Whitebox following the ruling by the Trial Court on December 17, 2020, which among other matters, granted our motion for summary judgment in connection with the previously disclosed lawsuit filed against us in September 2020 by Whitebox.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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What changed 10-K

Item 8. Financial Statements and Supplementary Data