| Commitments and Contingencies | Note 14—Commitments and Contingencies
Lease obligations
We have operating lease obligations expiring at various dates, principally for real estate, office space and office equipment. In the years ended December 31, 2015, 2014 and 2013, our rental expense for all operating leases, including operating leases with terms of less than one year, was approximately $72 million, $95 million and $128 million, respectively.
We also have a capital lease obligation, which is due to expire in August 2029. In the years ended December 31, 2015, 2014 and 2013, depreciation expense associated with Petrobras 10000 , the asset held under capital lease, was $23 million, $21 million and $20 million, respectively.
At December 31, 2015 and 2014, the aggregate carrying amount of this asset held under capital lease was as follows (in millions):
December 31,
2015
2014
Property and equipment, cost
$
$
Accumulated depreciation
Property and equipment, net
$
$
At December 31, 2015, the aggregate future minimum rental payments related to our non-cancellable operating leases and the capital lease were as follows (in millions):
Capital
Operating
lease
leases
Years ending December 31,
2016
$
$
2017
2018
2019
2020
Thereafter
Total future minimum rental payment
$
Less amount representing imputed interest
Present value of future minimum rental payments under capital leases
Less current portion included in debt due within one year
Long-term capital lease obligation
$
Purchase obligations
At December 31, 2015, the aggregate future payments required under our purchase obligations, primarily related to our newbuild construction programs, were as follows (in millions):
Purchase
obligations
Years ending December 31,
2016
$
2017
2018
2019
Thereafter
Total
$
Macondo well incident commitments and contingencies
Overview — On April 22, 2010, the ultra ‑deepwater floater Deepwater Horizon sank after a blowout of the Macondo well caused a fire and explosion on the rig off the coast of Louisiana. At the time of the explosion, Deepwater Horizon was contracted to an affiliate of BP plc. (together with its affiliates, “BP”). Following the incident, we have been subject to civil and criminal claims, as well as causes of action, fines and penalties by local, state and federal governments. Litigation commenced shortly after the incident, and most claims against us were consolidated by the U.S. Judicial Panel on Multidistrict Litigation and transferred to the U.S. District Court for the Eastern District of Louisiana (the “MDL Court”). A significant portion of the contingencies arising from the Macondo well incident has now been resolved as a result of settlements with the U.S. Department of Justice (the “DOJ”), BP, the states of Alabama, Florida, Louisiana, Mississippi, and Texas (collectively, the “States”) and the Plaintiffs’ Steering Committee (the “PSC”).
During the year ended December 31, 2015, in connection with the settlements, as further described below, we adjusted our assets and liabilities associated with contingencies resulting from the Macondo well incident. In the year ended December 31, 2015, we recognized income of $788 million ( $735 million, or $2.02 per diluted share, net of tax) recorded as a net reduction to operating and maintenance costs and expenses, including $538 million associated with recoveries from insurance for our previously incurred losses, $125 million associated with partial reimbursement from BP for our previously incurred legal costs, and $125 million associated with a net reduction to certain related contingent liabilities, primarily associated with contingencies that have either been settled or otherwise resolved as a result of settlements with BP and the PSC. We made such adjustments with corresponding entries to increase accounts receivable by $663 million and decrease other current liabilities by $125 million. In the year ended December 31, 2015, we received cash proceeds of $663 million, including $125 million from BP and $538 million from insurance, associated with reimbursement for or recoveries of previously incurred losses.
We have recognized a liability for the remaining estimated loss contingencies associated with litigation resulting from the Macondo well incident that we believe are probable and for which a reasonable estimate can be made. At December 31, 2015 and 2014, the liability for estimated loss contingencies that we believe are probable and for which a reasonable estimate can be made was $250 million and $426 million, respectively, recorded in other current liabilities. We believe the remaining most notable claims against us arising from the Macondo well incident are the potential settlement class opt ‑outs from the PSC Settlement Agreement, as described below. The liability for estimated loss contingencies at December 31, 2015, included, among others, the amount we have agreed to pay as a result of our settlement with the PSC (see “—PSC Settlement Agreement” below), which is subject to approval by the MDL Court. The remaining litigation could result in certain loss contingencies that we believe are reasonably possible. Although we have not recognized a liability for such loss contingencies, these contingencies could result in liabilities that we ultimately recognize.
We recognize an asset associated with the portion of our estimated losses that we believe is probable of recovery from insurance and for which we had received from underwriters’ confirmation of expected payment. At December 31, 2014, the insurance recoverable asset was $10 million, recorded in other assets. Although we have available policy limits that could result in additional amounts recoverable from insurance, recovery of such additional amounts is not probable and we are not currently able to estimate such amounts (see “—Insurance coverage”). Our estimates involve a significant amount of judgment .
We believe we have agreements that will resolve substantially all outstanding claims against us arising from the Macondo well incident through a series of settlements with the following parties:
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U.S. Department of Justice— Guilty plea agreement (“Plea Agreement”) and civil consent decree (“Consent Decree”), entered into on January 3, 2013, provide for $1.4 billion in fines and penalties, payable in installments through February 2017, and require us to take a number of certain actions, including to enhance safety and environmental compliance when operating in U.S. waters, as further specified below.
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U.S. Environmental Protection Agency —Administrative agreement (the “EPA Agreement”), entered into on February 25, 2013, resolves all matters related to suspension, debarment and disqualification and requires us to comply with the Plea Agreement and Consent Decree and continue implementation of certain programs and undertake further actions as specified below. Pursuant to the EPA Agreement, we must refrain from engaging in business relationships with persons or entities that are restricted from conducting business in the U.S.
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BP— Settlement Agreement (“BP Settlement Agreement”), entered into on May 20, 2015, resolves all Macondo litigation and claims between BP and us, commits BP to pay us $125 million, to indemnify us for compensatory damages from oil pollution, and provides for the mutual release of all claims, including claims by BP to be an unlimited additional insured under our insurance policies.
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Plaintiff Steering Committee— Settlement agreement (the “PSC Settlement Agreement”) filed with the MDL Court on May 29, 2015 and subject to approval by the MDL Court, obligates us to pay $212 million to private plaintiffs, businesses and local governments, and up to an additional $25 million for reimbursement of plaintiff attorneys’ fees in exchange for a release of claims brought by the PSC against us.
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The States— Settlement Agreement (the “States Settlement Agreement”), effective October 13, 2015, obligates us to make a cash payment of $35 million to the States in exchange for release of all claims arising from the Macondo well incident.
Payments made pursuant to the Plea Agreement and Consent Decree are not deductible for tax purposes and may not be used as a basis for indemnity or reimbursement from BP or other defendants involved in the Macondo well incident litigation. Further detail regarding our settlement obligations and the restrictions that apply to us is provided below.
Plea Agreement —Pursuant to the Plea Agreement, one of our subsidiaries pled guilty to one misdemeanor count of negligently discharging oil into the U.S. Gulf of Mexico, in violation of the Clean Water Act (“CWA”) and agreed to be subject to probation through February 2018. The DOJ agreed, subject to the provisions of the Plea Agreement, not to further prosecute us for certain matters arising from the Macondo well incident. We remain subject to probation through February 2018.
We also agreed to make an aggregate cash payment of $ 400 million, including a criminal fine of $100 million and cash contributions of $150 million to the National Fish & Wildlife Foundation and $150 million to the National Academy of Sciences, payable in scheduled installments. In the years ended December 31, 2015, 2014 and 2013, we made an aggregate cash payment of $60 million, $60 million and $160 million, respectively, in satisfaction of amounts due under the Plea Agreement. At December 31, 2015 and 2014, the carrying amount of our liability for settlement obligations under the Plea Agreement was $120 million and $180 million, respectively. At December 31, 2015, the aggregate future payments required under our outstanding settlement obligations under the Plea Agreement were $60 million in each of the years ending December 31, 2016 and 2017 .
Consent Decree —Pursuant to the Consent Decree, we agreed to pay $1.0 billion in civil penalties, excluding interest. In the years ended December 31, 2015, 2014 and 2013 , we paid $204 million, $412 million and $404 million, respectively, including interest at a rate of 2.15 percent, in satisfaction of amounts due under the Consent Decree. As of December 31, 2015, we have satisfied our required payments due under the Consent Decree. At December 31, 2014, the amount due under the Consent Decree was $200 million, recorded in other current liabilities.
Under the Consent Decree, we also agreed to undertake certain actions, including enhanced safety and compliance actions when operating in U.S. waters. The Consent Decree also requires us to submit certain plans, reports and submissions and also requires us to make such submittals available publicly. One of the required plans is a performance plan (the “Performance Plan”) that contains, among other things, interim milestones for actions in specified areas and schedules for reports required under the Consent Decree. On January 2, 2014, the DOJ approved our proposed Performance Plan. Additionally, in compliance with the requirements of the Consent Decree and upon approval by the DOJ, we have retained an independent auditor to review and report to the DOJ our compliance with the Consent Decree and an independent process safety consultant to review report and assist with the process safety requirements of the Consent Decree.
Under the terms of the Consent Decree, the U.S. agreed not to sue Transocean Ltd. and certain of its subsidiaries for civil or administrative penalties for the Macondo well incident under specified provisions of the CWA, the Outer Continental Shelf Lands Act (“OCSLA”), the Endangered Species Act, the Marine Mammal Protection Act, the National Marine Sanctuaries Act, the federal Oil and Gas Royalty Management Act, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Emergency Planning and Community Right ‑to ‑Know Act (“EPCRA”) and the Clean Air Act. In addition, the Consent Decree resolved our appeal of the incidents of noncompliance under the OCSLA issued by the Bureau of Safety and Environmental Enforcement without any admission of liability by us.
We may request termination of the Consent Decree after January 2, 2019, provided we meet certain conditions set forth in the Consent Decree. The Consent Decree resolved the claim by the U.S. for civil penalties under the Clean Water Act. The Consent Decree did not resolve United States’ claim under the Oil Pollution Act (“OPA”) for natural resource damages (“NRD”) or for removal costs. However, BP has agreed to indemnify us for NRD and most removal costs as further discussed under “ — BP Settlement Agreement” below.
EPA Agreement —On February 25, 2013, we and the EPA entered into the EPA Agreement, which has a five ‑year term. Subject to our compliance with the terms of the EPA Agreement, the EPA agreed that it will not suspend, debar or statutorily disqualify us and will lift any existing suspension, debarment or statutory disqualification. In the EPA Agreement, we agreed to comply with our obligations under the Plea Agreement and the Consent Decree and continue the implementation of certain programs and systems designed to enhance our environmental management systems and improve our environmental performance. We also agreed to other specified actions, including the (i) scheduled revision of our environmental management system and maintenance of certain compliance and ethics programs; (ii) compliance with certain employment and contracting procedures; (iii) engagement of an independent compliance auditor to, among other things, assess and report to the EPA on our compliance with the terms of the Plea Agreement, the Consent Decree and the EPA Agreement and (iv) provision of reports and notices with respect to various matters, including those related to compliance, misconduct, legal proceedings, audit reports, the EPA Agreement, the Consent Decree and the Plea Agreement. The EPA Agreement prohibits us from entering into, extending or engaging in certain business relationships with individuals or entities that are debarred, suspended, proposed for debarment or similarly restricted.
BP Settlement Agreement — On May 20, 2015, we entered into a settlement agreement with BP (the “BP Settlement Agreement”). We believe the BP Settlement Agreement resolves all Macondo well-related litigation between BP and us, and the indemnity BP has committed to provide will generally address claims by third parties, including claims for economic and property damages, economic loss and NRD. However, the indemnity obligations do not extend to fines, penalties, or punitive damages. The BP Settlement Agreement requires that:
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BP pay us $125 million, and we received such payment in July 2015, as partial reimbursement of the legal costs we have incurred in connection with the Macondo well incident;
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BP indemnify us for compensatory damages, including all natural resource damages and all cleanup and removal costs for oil or pollutants originating from the Macondo well;
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We indemnify BP for personal and bodily injury claims of our employees and for any future costs for the cleanup or removal of pollutants stored on the Deepwater Horizon vessel;
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BP cease efforts to recover as an unlimited additional insured under our insurance policies, and be bound to the insurance reimbursement rulings related to the Macondo well incident;
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BP and we each release and withdraw all claims we have against each other arising from the Macondo well litigation; and
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Neither BP nor we make statements regarding gross negligence in the Macondo well incident.
BP settlement with the U.S. and the States —On July 2, 2015, BP announced it had reached an agreement in principle to settle claims with the U.S.; the States and local governments in the U.S. Gulf region. On October 5, 2015, BP, the U.S. and the States filed a proposed consent decree that is subject to approval by the MDL Court. If approved, the agreement will resolve the claims of the U.S. and the States for NRD under OPA. This agreement, together with the NRD indemnity obligations by BP pursuant to the BP Settlement Agreement, largely eliminates potential liability we may have arising from NRD claims. Accordingly, we believe that our likelihood of loss resulting from any NRD claims is remote.
PSC Settlement Agreement — On May 29, 2015, together with the PSC, we filed a settlement agreement (the “PSC Settlement Agreement”) with the MDL Court for approval. Through the PSC Settlement Agreement, we agreed to pay a total of $212 million, plus up to $25 million for partial reimbursement of attorneys’ fees, to be allocated between two classes of plaintiffs as follows: (1) private plaintiffs, businesses, and local governments who could have asserted punitive damages claims against us under general maritime law (the “Punitive Damages Class”); and (2) private plaintiffs who previously settled economic damages claims against BP and were assigned certain claims BP had made against us (the “Assigned Claims Class”). A court ‑appointed neutral representative established the allocation of the settlement payment to be 72.8 percent paid to the Punitive Damages Class and 27.2 percent paid to the Assigned Claims Class. In exchange for these payments, each of the classes agreed to release all respective claims it has against us. Members of the Punitive Damages Class may opt out of the PSC Settlement Agreement and pursue punitive damages claims against us, but we may terminate the PSC Settlement Agreement if the number of opt outs exceeds a specified threshold amount. In August 2015, we made a cash deposit of $212 million into an escrow account pending approval of the settlement by the MDL Court. At December 31, 2015, the balance of the escrow account was $212 million, recorded in other current assets.
States settlement agreement —Effective October 13, 2015, we finalized a settlement agreement with the States, pursuant to which the States agreed to release all of their claims against us arising from the Macondo well incident. On October 22, 2015, we made an aggregate cash payment of $35 million to the States.
Multidistrict litigation proceeding — Most Macondo well-related claims against us have been resolved under various settlements, described above. There are, however, still pending claims by potential opt ‑outs from the settlement with the PSC and a number of other parties. As of December 31, 2015, the MDL Court has completed the liability phase trial, and additional litigation and appeals continue .
The Phase One trial in 2013 addressed fault for the Macondo blowout and resulting oil spill. The MDL Court’s September 2014 Phase One ruling concluded that BP was grossly negligent and reckless and 67 percent at fault for the blowout, explosion, and spill; that we were negligent and 30 percent at fault; and that Halliburton Company (“Halliburton”) was negligent and three percent at fault . The finding that we were negligent, but not grossly negligent, meant that, subject to a successful appeal, we would not be held liable for punitive damages and that BP was required to honor its contractual agreements to indemnify us for compensatory damages and release its claims against us. Our settlements with BP and the PSC finally resolve the indemnity and release issues (see “—BP Settlement Agreement” and “—PSC Settlement Agreement”) and, upon court approval of such settlements, largely eliminate our risk should these determinations be reversed through the appeal process . The MDL Court also concluded that we were an “operator” of the Macondo well for purposes of 33 U.S.C. § 2704(c)(3), a provision of OPA that permits government entities to recover removal costs by owners and operators of a facility or vessel that caused a discharge. The MDL Court, however, found that “Transocean’s liability to government entities for removal costs is ultimately shifted to BP by virtue of contractual indemnity,” and BP has agreed to indemnify removal costs through the BP Settlement Agreement (see “—BP Settlement Agreement”) .
The Phase One ruling did not quantify damages or result in a final monetary judgment. However, because it is a determination of liability under maritime law, the Phase One ruling is appealable, and we, along with BP, the PSC, Halliburton and the State of Alabama have each appealed or cross-appealed aspects of the ruling. These appeals have been stayed pending the finalization and court approval of BP’s settlement with the U.S. and the States. As a result of our settlements, we do not expect any party to challenge the ruling with respect to Transocean when the appeals resume, and we expect that any remaining issues in the appeal would be addressed to the other parties.
We can provide no assurances as to the outcome of these appeals, as to the timing of any further rulings, or that we will not enter into additional settlements as to some or all of the matters related to the Macondo well incident, including those to be determined at a trial, or the timing or terms of any such settlements.
Pending claims — As of December 31, 2015, approximately 1,376 actions or claims are pending against us, along with other unaffiliated defendants arising from individual complaints as well as putative class-action complaints that were filed in the federal and state courts in Louisiana, Texas, Mississippi, Alabama, Georgia, Kentucky, South Carolina, Tennessee, Florida and other courts. These claims were originally filed in various state and federal courts, and most have been consolidated in the MDL Court. We believe our settlement with the PSC, if approved by the MDL Court, will resolve many of these pending actions. As for any actions not resolved by these settlements, including any claims by individuals who opt ‑out of the PSC Settlement Agreement, claims by private environmental groups, and securities actions, we are vigorously defending those claims and pursuing any and all defenses available.
State and other government claims —Claims have been filed against us by o ver 200 state, local and foreign governments, including the Mexican States of Veracruz, Quintana Roo, Tamaulipas and Yucatan; the federal government of Mexico and other local governments by and on behalf of multiple towns and parishes .
The OPA claims of the Mexican States of Veracruz, Quintana Roo, Tamaulipas and Yucatan were dismissed for failure to demonstrate that recovery under OPA was authorized by treaty or executive agreement. The MDL Court subsequently granted summary judgment and the Fifth Circuit upheld the decision on the Mexican States’ general maritime law claims on the ground that the federal government of Mexico, rather than the Mexican States, had the proprietary interest in the claims, and the U.S. Supreme Court denied review.
Federal securities claims —On September 30, 2010, a proposed federal securities class action was filed against us in the U.S. District Court for the Southern District of New York. In the action, a former shareholder of the acquired company alleged that the joint proxy statement related to our shareholder meeting in connection with the merger with the acquired company violated various securities laws and that the acquired company’s shareholders received inadequate consideration for their shares as a result of the alleged violations and sought compensatory and rescissory damages and attorneys’ fees. On March 11, 2014, the District Court for the Southern District of New York dismissed the claims as time-barred. Plaintiffs appealed to the U.S. Court of Appeals for the Second Circuit, which heard oral argument on August 18, 2015. The court has not yet issued a ruling.
Wreck removal —In December 2010, the U.S. Coast Guard requested that we formulate and submit a comprehensive oil removal plan to remove any diesel fuel that could be recovered from the Deepwater Horizon vessel. The U.S. Coast Guard has not requested that we remove the rig wreckage from the sea floor. However, in February 2013, the U.S. Coast Guard submitted a request seeking analysis of the rig’s riser and cofferdam, which are resting on the seafloor, and recommendations for remediation or removal. Although we have insurance coverage for wreck removal, such coverage may be less than the total costs required to remove the wreckage from the sea floor. Under the BP Settlement Agreement, we have agreed to indemnify BP for any costs associated with wreck removal, if requested.
Insurance coverage —At the time of the Macondo well incident, our excess liability insurance program offered aggregate insurance coverage of $950 million, excluding a $15 million deductible and a $50 million self-insured layer through our wholly owned captive insurance subsidiary. This excess liability insurance coverage consisted of a first and a second layer of $150 million each, a third and fourth layer of $200 million each and a fifth layer of $250 million. We have recovered costs under the first four excess layers, the limits of which are now fully exhausted. We have submitted claims to the $250 million fifth layer, which if paid, will exhaust such coverage. This layer is comprised of Bermuda market insurers (the “Bermuda Insurers”). The Bermuda Insurers have asserted various coverage defenses to our claims, and we have issued arbitration notices to the Bermuda Insurers.
Other legal proceedings
Asbestos litigation —In 2004, several of our subsidiaries were named, along with numerous other unaffiliated defendants, in 21 complaints filed on behalf of 769 plaintiffs in the Circuit Courts of the State of Mississippi and which claimed injuries arising out of exposure to asbestos allegedly contained in drilling mud during these plaintiffs’ employment in drilling activities between 1965 and 1986. The complaints generally allege that the defendants used or manufactured asbestos containing drilling mud additives for use in connection with drilling operations and have included allegations of negligence, products liability, strict liability and claims allowed under the Jones Act and general maritime law. In each of these cases, the complaints have named other unaffiliated defendant companies, including companies that allegedly manufactured the drilling ‑ related products that contained asbestos. 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. After ten years of litigation, this group of cases has been winnowed to the point where now only 15 plaintiffs’ individual claims remain pending in Mississippi in which we have or may have an interest. During the year ended December 31, 2014, a group of lawsuits premised on the same allegations as those in Mississippi were filed in Louisiana. As of December 31, 2015, eight plaintiffs have claims pending against one or more of our subsidiaries in four different lawsuits filed in Louisiana . We intend to defend these lawsuits vigorously, although we can provide no assurance as to the outcome. We historically have maintained broad liability insurance, although we are not certain whether insurance will cover the liabilities, if any, arising out of these claims. 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 was involved in lawsuits arising out of the subsidiary’s involvement in the design, construction and refurbishment of major industrial complexes. The operating assets of the subsidiary were sold and its operations were discontinued in 1989, and the subsidiary has no remaining assets other than the insurance policies involved in its litigation, with its insurers and, either directly or indirectly through a qualified settlement fund. The subsidiary has been named as a defendant, along with numerous other companies, in lawsuits alleging bodily injury or personal injury as a result of exposure to asbestos. As of December 31, 2015, the subsidiary was a defendant in approximately 291 lawsuits, some of which include multiple plaintiffs, and we estimate that there are approximately 324 plaintiffs in these lawsuits. For many of these lawsuits, we have not been provided with sufficient information from the plaintiffs to determine whether all or some of the plaintiffs have claims against the subsidiary, the basis of any such claims, or the nature of their alleged injuries. The first of the asbestos ‑related lawsuits was filed against the subsidiary in 1990. Through December 31, 2015, the costs incurred to resolve claims, including both defense fees and expenses and settlement costs, have not been material, all known deductibles have been satisfied or are inapplicable, and the subsidiary’s defense fees and expenses and settlement costs have been met by insurance made available to the subsidiary. The subsidiary continues to be named as a defendant in additional lawsuits, and we cannot predict the number of additional cases in which it may be named a defendant nor can we predict the potential costs to resolve such additional cases or to resolve the pending cases. However, the subsidiary has in excess of $1.0 billion in insurance limits potentially available to the subsidiary. Although not all of the policies may be fully available due to the insolvency of certain insurers, we believe that the subsidiary will have sufficient funding directly or indirectly from settlements and claims payments from insurers, assigned rights from insurers and coverage ‑in ‑place settlement agreements with insurers to respond to these claims. While we cannot predict or provide assurance as to the outcome of these matters, we do not believe that the ultimate liability, if any, arising from these claims will have a material impact on our consolidated statement of financial position, results of operations or cash flows.
Rio de Janeiro tax assessment —In the third quarter of 2006, we received tax assessments of BRL 450 million, equivalent to approximately $114 million, including interest and penalties, from the state tax authorities of Rio de Janeiro in Brazil against one of our Brazilian subsidiaries for taxes on equipment imported into the state in connection with our operations. The assessments resulted from a preliminary finding by these authorities that our record keeping practices were deficient. We currently believe that the substantial majority of these assessments are without merit. We filed an initial response with the Rio de Janeiro tax authorities on September 9, 2006 refuting these additional tax assessments. In September 2007, we received confirmation from the state tax authorities that they believe the additional tax assessments are valid, and as a result, we filed an appeal on September 27, 2007 to the state Taxpayer’s Council contesting these assessments. While we cannot predict or provide assurance as to the final outcome of these proceedings, we do not expect it to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
Brazilian import license assessment —In the fourth quarter of 2010, we received an assessment from the Brazilian federal tax authorities in Rio de Janeiro of BRL 575 million, equivalent to approximately $145 million, including interest and penalties, based upon the alleged failure to timely apply for import licenses for certain equipment and for allegedly providing improper information on import license applications. We believe that a substantial majority of the assessment is without merit and are vigorously pursuing legal remedies. The case was decided partially in favor of our Brazilian subsidiary in the lower administrative court level. The decision cancelled the majority of the assessment, reducing the total assessment to BRL 38 million, equivalent to approximately $10 million. On July 14, 2011, we filed an appeal to eliminate the assessment. On May 23, 2013, a ruling was issued that eliminated all assessment amounts. A further appeal by the taxing authorities was filed in November 2014 and accepted for review in April 2015. While we cannot predict or provide assurance as to the outcome of these proceedings, we do not expect it to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows.
Nigerian Cabotage Act litigation —In October 2007, three of our subsidiaries were each served a Notice and Demand from the Nigeria Maritime Administration and Safety Agency, imposing a two percent surcharge on the value of all contracts performed by us in Nigeria pursuant to the Coastal and Inland Shipping (Cabota |
