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Revenues

3 Months Ended

Mar. 31, 2020

Revenues

Revenues

Note 5—Revenues

Overview—The duration of our performance obligation varies by contract. As of March 31, 2020, the drilling contract with the longest expected remaining duration, excluding unexercised options, extends through February 2028. 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 defer such pre-operating costs and recognize the costs on a straight-line basis, consistent with the general pace of activity, in operating and maintenance costs over the estimated contract period. In the three months ended March 31, 2020 and 2019, we recognized pre-operating costs of $9 million and $2 million, respectively. At March 31, 2020 and December 31, 2019, the unrecognized pre-operating costs to obtain contracts was $44 million and $34 million, respectively, recorded in other assets. In the three months ended March 31, 2019, we recognized revenues of $10 million for performance obligations satisfied in previous periods, related to certain revenues recognized on a cash basis.

Disaggregation—We recognized revenues as follows (in millions):


		Three months ended March 31, 2020																Three months ended March 31, 2019
		U.S.			Norway			Brazil			Other			Total				U.S.			Norway			Brazil			Other			Total

Ultra-deepwater floaters		$	287		$	—		$	59		$	182		$	528			$	314		$	—		$	26		$	136		$	476
Harsh environment floaters			—			207			—			13			220				—			181			—			77			258
Deepwater floaters			—			—			—			—			—				—			—			6			—			6
Midwater floaters			—			—			—			11			11				—			—			—			14			14
Total revenues		$	287		$	207		$	59		$	206		$	759			$	314		$	181		$	32		$	227		$	754

Contract liabilities—We recognize contract liabilities, recorded in other current liabilities and other long-term liabilities, for mobilization, contract preparation, paid pre-operating standby time, capital upgrades and deferred revenues for declining dayrate contracts using the straight-line method over the remaining contract term. Contract liabilities for our contracts with customers were as follows (in millions):


		March 31,			December 31,
		2020			2019
Deferred contract revenues, recorded in other current liabilities		$	113		$	100
Deferred contract revenues, recorded in other long-term liabilities			421			429
Total contract liabilities		$	534		$	529

Significant changes in contract liabilities were as follows (in millions):


		Three months ended
		March 31,
		2020			2019
Total contract liabilities, beginning of period		$	529		$	486
Decrease due to recognition of revenues for goods and services			(41)			(37)
Increase due to goods and services transferred over time			46			38
Total contract liabilities, end of period		$	534		$	487