Consolidated Joint Ventures

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

Consolidated Joint Ventures

Note 3— Consolidated Joint Ventures

We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the two Bully-class drillships. We have determined that we are the primary beneficiary of the joint ventures. Accordingly, we consolidate the entities in our condensed consolidated financial statements after eliminating intercompany transactions. Shell’s equity interests are presented as noncontrolling interests on our Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2019, the Bully joint ventures approved and paid dividends totaling $15.1 million and $50.2 million, respectively. During the three and nine months ended September 30, 2018, the Bully joint ventures approved dividends totaling $20.7 million and $46.1 million, respectively, and paid dividends of zero and $25.4 million, respectively. Of these amounts, 50 percent was paid to our joint venture partner.

The combined carrying amount of the Bully-class drillships at September 30, 2019 and December 31, 2018 totaled $104.0 million and $0.7 billion, respectively. These assets were primarily funded through partner equity contributions. We are in discussions with Shell with respect to an agreement pursuant to which Shell would buy out the remaining term of the Noble Bully II drilling contract with the Bully II joint venture and we would acquire Shell’s interest in the Bully II and Bully I joint ventures. During the three and nine months ended September 30, 2019, we recognized a $595.5 million impairment charge on the Noble Bully II, of which $265.0 million is attributable to our joint venture partner. During the nine months ended September 30, 2018, we recognized a $550.3 million impairment charge on the Noble Bully I, of which $250.3 million is attributable to our joint venture partner. See “Note 10— Loss on Impairment” and “Note 17— Subsequent Events” for additional information. Cash held by the Bully joint ventures totaled approximately $35.7 million at September 30, 2019 as compared to approximately $45.2 million at December 31, 2018.