SEADRILL LIMITED |
(Exact name of Registrant as specified in its charter) |
Bermuda |
(Jurisdiction of incorporation or organization) |
Par-la-Ville Place, 4th Floor, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda |
(Address of principal executive offices) |
Colleen Simmons Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM 08, Bermuda Tel: +1 (441) 295-9500, Fax: +1 (441) 295-3494 |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person |
Common stock, $0.10 par value | New York Stock Exchange | |||
Title of class | Name of exchange on which registered |
[_] Yes | [X] No |
[_] Yes | [X] No |
[X] Yes | [_] No |
[X] Yes | [_] No |
Large accelerated filer [_] | Accelerated filer [X] |
Non-accelerated filer [_] | Emerging growth company [_] |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_] |
Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing: |
[X] U.S. GAAP |
[_] International Financial Reporting Standards as issued by the International Accounting Standards Board |
[_] Other |
If ”Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow. |
[_] Item 17 |
[_] Item 18 |
[_] Yes | [X] No |
TABLE OF CONTENTS | ||
Page | ||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | ||
PART 1 | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3 | ||
ITEM 4. | ||
ITEM 4A | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 7. | ||
ITEM 8 | ||
ITEM 9. | ||
ITEM 10. | ||
ITEM 11. | ||
ITEM 12. | ||
PART II | ||
ITEM 13. | ||
ITEM 14. | ||
ITEM 15 | ||
ITEM 16. | ||
ITEM 16A. | ||
ITEM 16B. | ||
ITEM 16C. | ||
ITEM 16D. | ||
ITEM 16E. | ||
ITEM 16F. | ||
ITEM 16G. | ||
ITEM 16H. | ||
PART III | ||
ITEM 17. | ||
ITEM 18. | ||
ITEM 19. |
• | our ability to maintain relationships with suppliers, customers, employees and other third parties following our emergence from Chapter 11 proceedings; |
• | our ability to maintain and obtain adequate financing to support our business plans following our emergence from Chapter 11; |
• | factors related to the offshore drilling market, including changes in oil and gas prices and the state of the global economy on market outlook for our various geographical operating sectors and classes of rigs; |
• | supply and demand for drilling units and competitive pressure on utilization rates and dayrates; |
• | customer contracts, including contract backlog, contract commencements, contract terminations, contract option exercises, contract revenues, contract awards and rig mobilizations; |
• | the repudiation, nullification, modification or renegotiation of drilling contracts; |
• | delays in payments by, or disputes with, our customers under our drilling contracts; |
• | fluctuations in the market value of our drilling units and the amount of debt we can incur under certain covenants in our debt financing agreements; |
• | the liquidity and adequacy of cash flow for our obligations; |
• | our ability to successfully employ our drilling units; |
• | our ability to procure or have access to financing; |
• | our expected debt levels; |
• | our ability to satisfy our obligations, including certain covenants, under our debt financing agreements and if needed, to refinance our existing indebtedness; |
• | credit risks of our key customers; |
• | political and other uncertainties, including political unrest, risks of terrorist acts, war and civil disturbances, public health threats, piracy, corruption, significant governmental influence over many aspects of local economies, or the seizure, nationalization or expropriation of property or equipment; |
• | the concentration of our revenues in certain geographical jurisdictions; |
• | limitations on insurance coverage, such as war risk coverage, in certain regions; |
• | any inability to repatriate income or capital; |
• | the operation and maintenance of our drilling units, including complications associated with repairing and replacing equipment in remote locations and maintenance costs incurred while idle; |
• | newbuildings, upgrades, shipyard and other capital projects, including the completion, delivery and commencement of operation dates; |
• | import-export quotas; |
• | wage and price controls and the imposition of trade barriers; |
• | the recruitment and retention of personnel; |
• | regulatory or financial requirements to comply with foreign bureaucratic actions, including potential limitations on drilling activity, changing taxation policies and other forms of government regulation and economic conditions that are beyond our control; |
• | the level of expected capital expenditures, our expected financing of such capital expenditures, and the timing and cost of completion of capital projects; |
• | fluctuations in interest rates or exchange rates and currency devaluations relating to foreign or US monetary policy; |
• | tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, including those associated with our activities in Bermuda, Brazil, Norway, the United Kingdom and the United States; |
• | legal and regulatory matters, including the results and effects of legal proceedings, and the outcome and effects of internal and governmental investigations; |
• | hazards inherent in the drilling industry and marine operations causing personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by third parties or customers and the suspension of operations; |
• | customs and environmental matters; and |
• | other important factors described from time to time in the reports filed or furnished by us with the SEC. |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
• | “AOD” means Asia Offshore Drilling Limited, a company incorporated under the Laws of Bermuda with registration number 44712. |
• | “Bankruptcy Court” means the United States Bankruptcy Court for the District of South Texas Victoria Division; |
• | “Centerbridge” means Centerbridge Credit Partners L.P. and certain of its affiliates; |
• | “Chapter 11 Proceedings” means reorganization proceedings under Chapter 11 of Title 11 of the United States Code. |
• | “Commitment Parties” means each commitment party to the Investment Agreement; |
• | “Companies Act” means the Companies Act 1981 of Bermuda, as amended from time to time; |
• | “Debtors” means Seadrill Limited and certain of its subsidiaries which filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court on September 12, 2017; |
• | “Effective Date” means the date of the Debtors’ emergence from bankruptcy proceedings in accordance with the terms and conditions of the Plan; |
• | “Employee Incentive Plan” means the employee incentive plan that was implemented by Seadrill pursuant to the terms of the Plan which will, among other things, reserve an aggregate of 10 percent of the Common Shares, on a fully diluted, fully distributed basis, for grants made from time to time to employees of Seadrill and its subsidiaries and otherwise contain terms and conditions (including with respect to participants, allocation, structure, and timing of issuance) generally consistent with those prevailing in the market at the discretion of the board of directors of Seadrill; |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended; |
• | “Global Settlement” refers to the settlement announced by the Debtors on February 26, 2018 with an ad-hoc group of unsecured bond holders, the official committee of unsecured creditors and other major creditors. This is described under the heading “The Reorganization—Introduction”; |
• | “Hemen” means Hemen Holding Limited, a Cyprus holding company with registration number HE87804 and Hemen Investments Limited, a Cyprus holding company with registration number HE371665; |
• | “Investment Agreement” means the investment agreement described under the heading “The Reorganization—Introduction”; |
• | “New Secured Notes” means the $880.0 million aggregate principal amount of 12.0% Senior Secured Notes due 2025 issued by NSNCo in connection with the Reorganization; |
• | “NSNCo” means Seadrill New Finance Limited, a company incorporated under the Laws of Bermuda with registration number 53541, formed in connection with the Reorganization and the issuer of the New Secured Notes; |
• | “NYSE” means the New York Stock Exchange; |
• | “Old Seadrill Limited” or the “Predecessor Company” means Seadrill Limited, a company incorporated under the Laws of Bermuda with registration number 36832. Old Seadrill Limited was the parent company of Seadrill prior to its emergence from bankruptcy; |
• | “OSE” means the Oslo Stock Exchange; |
• | “Plan” means the Second Amended Joint Chapter 11 Plan (as modified) of Reorganization, what was filed with the Bankruptcy Court on February 26, 2018 and confirmed by the Bankruptcy Court on April 17, 2018; |
• | “Reorganization” means the transactions described under the heading “The Reorganization” and those transactions contemplated by the Plan; |
• | “RSA” means the restructuring support and lock-up agreement that the Debtors entered with a group of bank lenders, bondholders, certain other stakeholders and new investors on September 12, 2017. This is described under the heading “The Reorganization—Introduction”; |
• | “Sapura Energy” means Sapura Energy Berhad. We previously held an investment in Sapura Energy. Sapura Energy is also our joint venture partner for Seabras Sapura; |
• | “Seabras Sapura” refers to our joint venture with Sapura Energy. We refer to our investments in Seabras Sapura Participacoes SA and Seabras Sapura Holding GmbH together as “Seabras Sapura”; |
• | “Seadrill Limited” or the “Successor Company” means Seadrill Limited (formerly known as “New SDRL Limited”), a company incorporated under the Laws of Bermuda with registration number 53439. Seadrill Limited has been the parent company of Seadrill since its emergence from bankruptcy; |
• | “Seadrill Common Shares” or the "Shares” means common shares, par value $0.10 per share, of Seadrill Limited; |
• | “Seadrill Partners” means Seadrill Partners, LLC, a limited liability company formed under the Laws of the Republic of The Marshall Islands with registration number 962166; |
• | “SeaMex” means SeaMex Limited, a limited liability company formed under the Laws of Bermuda with registration number 48115. |
A. | SELECTED FINANCIAL DATA |
Successor | Predecessor | ||||||||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | Year ended December 31, 2015 | Year ended December 31, 2014 | ||||||||||||
(In millions of U.S. dollars except common share and per share data) | |||||||||||||||||
Statement of Operations Data: | |||||||||||||||||
Total operating revenues | 541 | 712 | 2,088 | 3,169 | 4,335 | 4,997 | |||||||||||
Net operating (loss)/ income | (175 | ) | (613 | ) | (728 | ) | 1,026 | 1,019 | 2,279 | ||||||||
Net (loss)/income | (605 | ) | (3,885 | ) | (3,102 | ) | (155 | ) | (635 | ) | 4,087 | ||||||
(Loss)/earnings per share, basic | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) | (1.29 | ) | 8.32 | ||||||
(Loss)/earnings per share, diluted | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) | (1.29 | ) | 8.30 |
Successor | Predecessor | |||||||||||||
As of December 31, | As of December 31, | |||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
(In millions of U.S. dollars except common share and per share data) | ||||||||||||||
Balance Sheet Data (at end of period): | ||||||||||||||
Cash and cash equivalents | 1,542 | 1,255 | 1,368 | 1,044 | 831 | |||||||||
Drilling units | 6,659 | 13,216 | 14,276 | 14,930 | 15,145 | |||||||||
Newbuildings | — | 248 | 1,531 | 1,479 | 2,030 | |||||||||
Investment in associated companies | 800 | 1,473 | 2,168 | 2,592 | 2,898 | |||||||||
Goodwill | — | — | — | — | 604 | |||||||||
Total assets | 10,848 | 17,982 | 21,666 | 23,439 | 26,297 | |||||||||
Long-term debt (including current portion) (1) | 6,914 | 8,699 | 9,514 | 10,543 | 12,475 | |||||||||
Common share capital | 10 | 1,008 | 1,008 | 985 | 985 | |||||||||
Total equity | 3,035 | 6,959 | 10,063 | 10,068 | 10,390 | |||||||||
Common shares outstanding (in millions) | 100.0 | 504.5 | 504.4 | 492.8 | 492.8 | |||||||||
Weighted average common shares outstanding (in millions) | 100.0 | 504.5 | 501.0 | 492.8 | 478.0 |
(1) | Includes $7,705 million of debt classified as liabilities subject to compromise in 2017. |
Successor | Predecessor | ||||||||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | Year ended December 31, 2015 | Year ended December 31, 2014 | ||||||||||||
(In millions of U.S. dollars except common share and per share data) | |||||||||||||||||
Statement of Cash Flows data: | |||||||||||||||||
Operating cash flows | (26 | ) | (213 | ) | 399 | 1,184 | 1,788 | 1,574 | |||||||||
Investing cash flows | 61 | 149 | 358 | 354 | (165 | ) | 197 | ||||||||||
Financing cash flows | (208 | ) | 887 | (846 | ) | (1,405 | ) | (1,370 | ) | (1,521 | ) | ||||||
Capital expenditure (2) | (98 | ) | (127 | ) | (150 | ) | (231 | ) | (1,041 | ) | (3,168 | ) |
B. | CAPITALIZATION AND INDEBTEDNESS |
C. | REASONS FOR THE OFFER AND USE OF PROCEEDS |
• | worldwide production of, and demand for, oil and gas and geographical dislocations in supply and demand; |
• | the cost of exploring for, developing, producing and delivering oil and gas; |
• | expectations regarding future energy prices and production; |
• | advances in exploration, development and production technology; |
• | the ability of the Organization of the Petroleum Exporting Countries or OPEC, to set and maintain levels of production and pricing; |
• | the level of production in non-OPEC countries; |
• | international sanctions on oil-producing countries, or the lifting of such sanctions; |
• | government regulations, including restrictions on offshore transportation of oil and natural gas; |
• | local and international political, economic and weather conditions; |
• | domestic and foreign tax policies; |
• | the development and exploitation of alternative fuels and unconventional hydrocarbon production, including shale; |
• | worldwide economic and financial problems and the corresponding decline in the demand for oil and gas and, consequently, our services; |
• | the policies of various governments regarding exploration and development of their oil and gas reserves, accidents, severe weather, natural disasters and other similar incidents relating to the oil and gas industry; and |
• | the worldwide political and military environment, including uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or other crises in the Middle East, Eastern Europe or other geographic areas or further acts of terrorism in the United States, Europe or elsewhere. |
• | the availability and quality of competing offshore drilling units; |
• | the availability of debt financing on reasonable terms; |
• | the level of costs for associated offshore oilfield and construction services; |
• | oil and gas transportation costs; |
• | the level of rig operating costs, including crew and maintenance; |
• | the discovery of new oil and gas reserves; |
• | the political and military environment of oil and gas reserve jurisdictions; and |
• | regulatory restrictions on offshore drilling. |
• | executing other financing arrangements; |
• | incurring additional indebtedness; |
• | creating or permitting liens on our assets; |
• | selling our drilling units or the shares of our subsidiaries; |
• | making investments; |
• | changing the general nature of our business; |
• | paying dividends to our shareholders; |
• | changing the management and/or ownership of the drilling units; and |
• | making capital expenditures. |
• | the general economic and market conditions affecting the offshore contract drilling industry, including competition from other offshore contract drilling companies; |
• | the types, sizes and ages of drilling units; |
• | the supply and demand for drilling units; |
• | the costs of newbuild drilling units; |
• | the prevailing level of drilling services contract dayrates; |
• | governmental or other regulations; and |
• | technological advances. |
• | terrorist acts, armed hostilities, war and civil disturbances; |
• | acts of piracy, which have historically affected ocean-going vessels; |
• | significant governmental influence over many aspects of local economies; |
• | the seizure, nationalization or expropriation of property or equipment; |
• | uncertainty of outcome in foreign court proceedings; |
• | the repudiation, nullification, modification or renegotiation of contracts; |
• | limitations on insurance coverage, such as war risk coverage, in certain areas; |
• | political unrest; |
• | foreign and U.S. monetary policy and foreign currency fluctuations and devaluations; |
• | the inability to repatriate income or capital; |
• | complications associated with repairing and replacing equipment in remote locations; |
• | import-export quotas, wage and price controls, and the imposition of trade barriers; |
• | U.S. and foreign sanctions or trade embargoes; |
• | compliance with various jurisdictional regulatory or financial requirements; |
• | compliance with and changes to taxation; |
• | other forms of government regulation and economic conditions that are beyond our control; and |
• | government corruption. |
• | the equipping and operation of drilling units; |
• | exchange rates or exchange controls; |
• | the repatriation of foreign earnings; |
• | oil and gas exploration and development; |
• | the taxation of offshore earnings and the earnings of expatriate personnel; and |
• | the use and compensation of local employees and suppliers by foreign contractors. |
• | announcements concerning the offshore drilling market, including changes in oil and gas prices and the state of the global economy on market outlook for our various geographical operating sectors and classes of rigs; |
• | fluctuations in the market value of our drilling units and the amount of debt we can incur under certain covenants in its current and future debt financing agreements; |
• | general and industry-specific economic conditions; |
• | changes in financial estimates or recommendations by securities analysts or failure to meet analysts' performance expectations; |
• | additions or departures of key members of management; |
• | any increased indebtedness we incur in the future; |
• | speculation or reports by the press or investment community with respect to Seadrill or the industry in general; |
• | announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; |
• | changes or proposed changes in laws or regulations affecting the oil and gas industry or enforcement of these laws and regulations, or announcements relating to these matters; and |
• | general market, political and economic conditions, including any such conditions and local conditions in the markets in which we operate. |
ITEM 4. | INFORMATION ON THE COMPANY |
A. | HISTORY AND DEVELOPMENT OF THE COMPANY |
i. | Introduction to the Reorganization |
ii. | Corporate Reorganization |
iii. | The Plan |
iv. | Rights offering |
v. | Issuance and distribution of the new shares under the Plan and Investment Agreement |
Percentage | ||||||||||||
Recipient of Common Shares | Number of shares | Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | Prior to dilution by the shares reserved under the Employee Incentive Plan | Fully diluted | ||||||||
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers | 23,750,000 | 25.00 | % | 23.75 | % | 21.38 | % | |||||
Recipients of New Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers) | 54,625,000 | 57.50 | % | 54.63 | % | 49.16 | % | |||||
Holders of General Unsecured Claims | 14,250,000 | 15.00 | % | 14.25 | % | 12.82 | % | |||||
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants | 1,900,000 | 2.00 | % | 1.90 | % | 1.71 | % | |||||
Fees to Select Commitment Parties | 475,000 | 0.50 | % | 0.47 | % | 0.43 | % | |||||
All creditors, excluding Primary Structuring Fee | 95,000,000 | 100.00 | % | 95.00 | % | 85.50 | % | |||||
Hemen (on account of Primary Structuring Fee) | 5,000,000 | - | 5.00 | % | 4.50 | % | ||||||
Total, prior to dilution by shares reserved under the Employee Incentive Plan | 100,000,000 | - | 100.00 | % | 90.00 | % | ||||||
Reserved for the Employee Incentive Plan | 11,111,111 | - | - | 10.00 | % | |||||||
Total, fully diluted | 111,111,111 | - | - | 100.00 | % |
vi. | New Secured Notes |
(In $ millions) | Successor | Predecessor | ||||||||||
Summary of capital expenditures | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||
Additions to newbuilding | — | (1 | ) | (33 | ) | (52 | ) | |||||
Additions to drilling units and equipment | (27 | ) | (48 | ) | (59 | ) | (84 | ) | ||||
Payments for long-term maintenance | (71 | ) | (78 | ) | (58 | ) | (95 | ) | ||||
Total capital expenditure | (98 | ) | (127 | ) | (150 | ) | (231 | ) |
B. | BUSINESS OVERVIEW |
i. | Drillships: |
ii. | Semi-submersible drilling rigs: |
i. | One of the largest offshore drilling contractors |
ii. | Commitment to safety and the environment |
iii. | Technologically advanced and young fleet |
iv. | Strong and diverse customer relationships |
i. | Best Operations |
ii. | Right rigs |
iii. | Strongest relationships |
iv. | Leading organization |
i. | Physical Damage Insurance |
ii. | Loss of Hire Insurance |
iii. | Protection and Indemnity Insurance |
iv. | Windstorm Insurance |
i. | Flag State Requirements |
ii. | International Maritime Regimes |
iii. | Environmental Laws and Regulations |
iv. | Safety Requirements |
v. | Navigation and Operating Permit Requirements |
vi. | Local Content Requirements |
vii. | Other Laws and Regulations |
C. | ORGANIZATIONAL STRUCTURE |
i. | Asia Offshore Drilling ("AOD") |
ii. | Ship Finance Variable Interest Entities |
iii. | Seadrill Nigeria Operations Limited |
i. | Seadrill Partners |
ii. | SeaMex |
iii. | Archer |
iv. | Seabras Sapura |
D. | PROPERTY, PLANT AND EQUIPMENT |
Unit | Year built | Water depth (feet) | Drilling depth (feet) | Area of location | Estimated month of rig availability | ||||
West Navigator | 2000 | 7,500 | 35,000 | Norway | available | ||||
West Gemini | 2010 | 10,000 | 35,000 | Angola | May 2019 | ||||
West Tellus | 2013 | 12,000 | 40,000 | Brazil | October 2019 | ||||
West Neptune | 2014 | 12,000 | 40,000 | USA | December 2019 | ||||
West Jupiter | 2014 | 12,000 | 40,000 | Nigeria | December 2019 | ||||
West Saturn | 2014 | 12,000 | 40,000 | Brazil | September 2019 | ||||
West Carina | 2015 | 12,000 | 40,000 | Malaysia | June 2019 |
Unit | Year built | Water depth (feet) | Drilling depth (feet) | Area of location | Estimated month of rig availability | ||||
West Alpha | 1986 | 2,000 | 23,000 | Norway | available | ||||
West Venture | 2000 | 2,600 | 30,000 | Norway | available | ||||
West Phoenix | 2008 | 10,000 | 30,000 | Norway | January 2021 | ||||
West Hercules (i) | 2008 | 10,000 | 35,000 | Norway | November 2019 | ||||
West Taurus (i) | 2008 | 10,000 | 35,000 | Spain | available | ||||
West Eminence | 2009 | 10,000 | 30,000 | Spain | available | ||||
West Orion | 2010 | 10,000 | 35,000 | Malaysia | available | ||||
West Pegasus | 2011 | 10,000 | 35,000 | Norway | available | ||||
West Eclipse | 2011 | 10,000 | 40,000 | Namibia | available | ||||
Sevan Driller | 2009 | 10,000 | 40,000 | Malaysia | available | ||||
Sevan Brasil | 2012 | 10,000 | 40,000 | Aruba | available | ||||
Sevan Louisiana | 2013 | 10,000 | 40,000 | USA | May 2019 |
Unit | Year built | Water depth (feet) | Drilling depth (feet) | Area of location | Estimated month of rig availability | ||||
Jack-up rigs | |||||||||
West Epsilon | 1993 | 400 | 30,000 | Norway | available | ||||
West Prospero | 2007 | 400 | 30,000 | Malaysia | available | ||||
West Vigilant | 2008 | 350 | 30,000 | Malaysia | available | ||||
West Ariel | 2008 | 400 | 30,000 | United Arab Emirates | available | ||||
West Freedom | 2009 | 350 | 30,000 | Colombia | available | ||||
West Cressida | 2009 | 375 | 30,000 | Thailand | January 2020 | ||||
West Callisto | 2010 | 400 | 30,000 | Saudi Arabia | June 2019 | ||||
West Leda | 2010 | 375 | 30,000 | Malaysia | available | ||||
West Elara | 2011 | 450 | 40,000 | Norway | September 2027 | ||||
West Castor | 2013 | 400 | 30,000 | Suriname | January 2020 | ||||
West Telesto | 2013 | 400 | 30,000 | India | March 2019 | ||||
West Tucana | 2013 | 400 | 30,000 | Qatar | December 2019 | ||||
AOD I (ii) | 2013 | 400 | 30,000 | Saudi Arabia | June 2019 | ||||
AOD II (ii) | 2013 | 400 | 30,000 | Saudi Arabia | July 2019 | ||||
AOD III (ii) | 2013 | 400 | 30,000 | Saudi Arabia | December 2019 | ||||
West Linus (i) | 2014 | 450 | 40,000 | Norway | December 2028 |
i. | The jack-up rig West Linus and the semi-submersible rigs West Hercules and West Taurus are owned by wholly-owned subsidiaries of Ship Finance and leased to us under capital leases. We consolidate the Ship Finance rig owning entities for these rigs under the variable interest model. Please see Note 35 to the Consolidated Financial Statements included in this report for further details of these arrangements. |
ii. | We own a 66.23% interest in the jack-up rigs AOD I, AOD II and AOD III. Please see ITEM 4C "Organizational Structure" for further details. |
Unit | Rig type | Water depth (feet) | Drilling depth (feet) | Area of location | Status | ||||
Sevan Developer | Semi-submersible | 10,000 | 40,000 | Cosco Shipyard (China) | Under construction |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW |
i. | Chapter 11 Reorganization |
ii. | Application of Fresh Start Accounting |
Successor | Predecessor | |||||
Operational drilling units | December 31, 2018 | December 31, 2017 | December 31, 2016 | |||
Drillships | 7 | 7 | 7 | |||
Semi-submersible rigs | 12 | 12 | 12 | |||
Total floaters | 19 | 19 | 19 | |||
Jack-up rigs | 16 | 16 | 19 | |||
Total operational units | 35 | 35 | 38 |
Successor | Predecessor | ||||||
Number of units | December 31, 2018 | December 31, 2017 | December 31, 2016 | ||||
Drillships | — | 4 | 4 | ||||
Semi-submersible rigs | 1 | 2 | 3 | ||||
Total floaters | 1 | 6 | 7 | ||||
Jack-up rigs | 2 | 8 | 8 | ||||
Total operational units | 3 | 14 | 15 |
(In $ millions) | Successor | Predecessor | |||||||
Contract backlog | February 28, 2019 | March 31, 2018 | February 24, 2017 | ||||||
Floaters | 565 | 802 | 1,752 | ||||||
Jack-ups | 1,362 | 1,628 | 785 | ||||||
Total | 1,927 | 2,430 | 2,537 |
(In $ millions) | For the years ending December 31, | ||||||||||||||
Contract backlog | Total | 2019 | 2020 | 2021 | Thereafter | ||||||||||
Floaters | 565 | 472 | 93 | — | — | ||||||||||
Jack-ups | 1,362 | 177 | 144 | 141 | 900 | ||||||||||
Total | 1,927 | 649 | 237 | 141 | 900 |
A. | RESULTS OF OPERATIONS |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Operating revenues | 541 | 712 | 2,088 | ||||||
Operating expenses | (737 | ) | (918 | ) | (1,902 | ) | |||
Other operating items | 21 | (407 | ) | (914 | ) | ||||
Operating loss | (175 | ) | (613 | ) | (728 | ) | |||
Interest expense | (261 | ) | (38 | ) | (285 | ) | |||
Reorganization items | (9 | ) | (3,365 | ) | (1,337 | ) | |||
Other income and expense | (152 | ) | 161 | (686 | ) | ||||
Loss before income taxes | (597 | ) | (3,855 | ) | (3,036 | ) | |||
Income tax expense | (8 | ) | (30 | ) | (66 | ) | |||
Net loss | (605 | ) | (3,885 | ) | (3,102 | ) |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Contract revenues | 469 | 619 | 1,888 | ||||||
Reimbursable revenues | 26 | 21 | 38 | ||||||
Other revenues | 46 | 72 | 162 | ||||||
Operating revenues | 541 | 712 | 2,088 |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Floaters | 307 | 437 | 1,283 | ||||||
Jack-ups | 162 | 182 | 605 | ||||||
Contract revenues | 469 | 619 | 1,888 |
i. | Average number of rigs on contract |
Successor | Predecessor | ||||||||
(Number) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Floaters | 7 | 10 | 8 | ||||||
Jack-ups | 8 | 8 | 11 | ||||||
Average number of rigs on contract | 15 | 18 | 19 |
ii. | Average contractual dayrates |
Successor | Predecessor | ||||||||
(In $ thousands) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Floaters | 231 | 279 | 395 | ||||||
Jack-ups | 106 | 131 | 150 |
iii. | Economic utilization for rigs on contract |
Successor | Predecessor | ||||||||
(Percentage) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Floaters | 95 | % | 95 | % | 97 | % | |||
Jack-ups | 99 | % | 98 | % | 98 | % |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Related party revenues (i) | 46 | 43 | 110 | ||||||
Amortization of unfavorable contracts (ii) | — | 21 | 43 | ||||||
Other (iii) | — | 8 | 9 | ||||||
Other revenues | 46 | 72 | 162 |
i. | Related party revenues |
ii. | Amortization of unfavorable contracts |
iii. | Other |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Vessel and rig operating expenses | (357 | ) | (407 | ) | (792 | ) | |||
Depreciation | (236 | ) | (391 | ) | (798 | ) | |||
Amortization of intangibles | (58 | ) | — | — | |||||
Reimbursable expenses | (24 | ) | (20 | ) | (35 | ) | |||
General and administrative expenses | (62 | ) | (100 | ) | (277 | ) | |||
Operating expenses | (737 | ) | (918 | ) | (1,902 | ) |
i. | Vessel and rig operating expenses |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Floaters | 223 | 239 | 480 | ||||||
Jack-ups | 119 | 158 | 286 | ||||||
Other | 15 | 10 | 26 | ||||||
Vessel and rig operating expenses | 357 | 407 | 792 |
ii. | Depreciation of drilling units and equipment |
iii. | Amortization of intangibles |
iv. | General and administrative expenses |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Loss on impairment of long-lived assets | — | (414 | ) | (696 | ) | ||||
Loss on sale of assets | — | — | (245 | ) | |||||
Other operating income | 21 | 7 | 27 | ||||||
Other operating items | 21 | (407 | ) | (914 | ) |
i. | Impairment of long-lived assets |
ii. | Loss on sale of assets |
iii. | Other income |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Cash and payment-in-kind interest on debt facilities | (237 | ) | (37 | ) | (286 | ) | |||
Unwind of discount on debt | (24 | ) | — | — | |||||
Loan fee amortization | — | (1 | ) | (27 | ) | ||||
Capitalized interest | — | — | 28 | ||||||
Interest expense | (261 | ) | (38 | ) | (285 | ) |
i. | Cash and payment-in-kind interest on debt facilities |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Senior credit facilities and unsecured bonds | (162 | ) | (116 | ) | (320 | ) | |||
Less: adequate protection payments | — | 104 | 81 | ||||||
New secured notes | (50 | ) | — | — | |||||
Debt of consolidated variable interest entities | (25 | ) | (25 | ) | (47 | ) | |||
Cash and payment-in-kind interest | (237 | ) | (37 | ) | (286 | ) |
ii. | Unwind of discount on debt |
iii. | Loan fee amortization |
iv. | Capitalized interest |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | ||||||
Professional and advisory fees | (9 | ) | (187 | ) | (66 | ) | |||
New investor commitment fees | — | — | (53 | ) | |||||
Gain on liabilities subject to compromise | — | 2,958 | — | ||||||
Fresh start valuation adjustments | — | (6,142 | ) | — | |||||
Loss on Newbuilding global settlement claim | — | — | (1,064 | ) | |||||
Loss on other pre-petition allowed claims | — | — | (3 | ) | |||||
Write-off of debt issuance costs | — | (66 | ) | ||||||
Reversal of credit risk on derivatives | — | — | (89 | ) | |||||
Interest income on surplus cash invested | — | 6 | 4 | ||||||
Total reorganization items, net | (9 | ) | (3,365 | ) | (1,337 | ) |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | ||||||
Interest income | 40 | 19 | 60 | ||||||
Share in results from associated companies | (90 | ) | 149 | 174 | |||||
Impairment of investments | — | — | (841 | ) | |||||
(Loss) / gain on derivative financial instruments | (31 | ) | (4 | ) | 11 | ||||
Gain on debt extinguishment | — | — | 19 | ||||||
Foreign exchange loss | (4 | ) | — | (65 | ) | ||||
Loss on marketable securities | (64 | ) | (3 | ) | — | ||||
Other financial items | (3 | ) | — | (44 | ) | ||||
Other income and expense | (152 | ) | 161 | (686 | ) |
i. | Interest Income |
ii. | Share of results in associated companies |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | ||||||
Seadrill Partners | (102 | ) | 99 | 104 | |||||
Seamex | (12 | ) | 4 | — | |||||
Seabras Sapura | 24 | 46 | 80 | ||||||
Archer | — | — | (10 | ) | |||||
Share of results from associated companies | (90 | ) | 149 | 174 |
iii. | Impairment of investments |
iv. | (Loss) gain on derivative financial instruments |
v. | Gain on debt extinguishment |
vi. | Foreign exchange loss |
vii. | Loss on marketable securities |
viii. | Other financial items |
Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||||||||||||||||
(In $ millions) | Floaters | Jack- up rigs | Other | Total | Floaters | Jack- up rigs | Other | Total | |||||||||||||||
Total operating revenues | 1,387 | 617 | 84 | 2,088 | 2,212 | 865 | 92 | 3,169 | |||||||||||||||
Loss on disposals | (79 | ) | (166 | ) | — | (245 | ) | — | — | — | — | ||||||||||||
Contingent consideration realized | 27 | — | — | 27 | 21 | — | — | 21 | |||||||||||||||
Total operating expenses (excluding impairment of long-lived assets) | (1,261 | ) | (563 | ) | (78 | ) | (1,902 | ) | (1,430 | ) | (598 | ) | (92 | ) | (2,120 | ) | |||||||
Loss on impairment of long-lived assets | (696 | ) | — | — | (696 | ) | (44 | ) | — | — | (44 | ) | |||||||||||
Operating (loss)/income | (622 | ) | (112 | ) | 6 | (728 | ) | 759 | 267 | — | 1,026 | ||||||||||||
Interest expense | (285 | ) | (412 | ) | |||||||||||||||||||
Impairment of investments | (841 | ) | (895 | ) | |||||||||||||||||||
Reorganization Items, net | (1,337 | ) | — | ||||||||||||||||||||
Other financial items | 155 | 325 | |||||||||||||||||||||
(Loss)/ income before taxes | (3,036 | ) | 44 | ||||||||||||||||||||
Income taxes | (66 | ) | (199 | ) | |||||||||||||||||||
Net loss | (3,102 | ) | (155 | ) |
(In $ millions) | 2017 | 2016 | Change | |||||
Floaters | 1,387 | 2,212 | (37 | )% | ||||
Jack-up rigs | 617 | 865 | (29 | )% | ||||
Other | 84 | 92 | (9 | )% | ||||
Total operating revenues | 2,088 | 3,169 | (34 | )% |
(In $ millions) | 2017 | 2016 | Change | |||||
Floaters | 1,261 | 1,430 | (12 | )% | ||||
Jack-up rigs | 563 | 598 | (6 | )% | ||||
Other | 78 | 92 | (15 | )% | ||||
Total operating expenses (excluding loss on impairment of long-lived assets) | 1,902 | 2,120 | (10 | )% |
(In $ millions) | 2017 | 2016 | |||
Interest income | 60 | 66 | |||
Share in results of associated companies (net of tax) | 174 | 283 | |||
Loss on impairment of investments | (841 | ) | (895 | ) | |
Gain/(loss) on derivative financial instruments | 11 | (74 | ) | ||
Net gain on debt extinguishment | 19 | 47 | |||
Foreign exchange (loss)/gain | (65 | ) | 18 | ||
Reorganization items, net | (1,337 | ) | — | ||
Other financial items and other (expense)/income, net | (44 | ) | (15 | ) | |
Total financial items and other (expense)/income, net | (2,023 | ) | (570 | ) |
B. | LIQUIDITY AND CAPITAL RESOURCES |
Successor | Predecessor | ||||||||
(In $ millions) | December 31, 2018 | July 1, 2018 | December 31, 2017 | ||||||
Unrestricted cash | 1,542 | 1,599 | 1,255 | ||||||
Restricted cash | 461 | 578 | 104 | ||||||
Cash and cash equivalents, including restricted | 2,003 | 2,177 | 1,359 |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Cash flows from operating activities | (26 | ) | (213 | ) | 399 | ||||
Cash flows from investing activities | 61 | 149 | 358 | ||||||
Cash flows from financing activities | (208 | ) | 887 | (846 | ) | ||||
Effect of exchange rate changes in cash and cash equivalents | (1 | ) | (5 | ) | 5 | ||||
Change in period | (174 | ) | 818 | (84 | ) |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Opening cash and cash equivalents, included restricted | 2,177 | 1,359 | 1,443 | ||||||
Change in period | (174 | ) | 818 | (84 | ) | ||||
Closing cash and cash equivalents, included restricted | 2,003 | 2,177 | 1,359 |
Successor | Predecessor | ||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | ||||||
Net loss | (605 | ) | (3,885 | ) | (3,102 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities (1) | 477 | 3,808 | 3,603 | ||||||
Net loss after adjustments | (128 | ) | (77 | ) | 501 | ||||
Payments for long-term maintenance | (71 | ) | (78 | ) | (58 | ) | |||
Distributions received from associated companies | 32 | 17 | 39 | ||||||
Changes in operating assets and liabilities | 141 | (75 | ) | (83 | ) | ||||
Cash flows from operating activities | (26 | ) | (213 | ) | 399 |
C. | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. |
D. | TREND INFORMATION |
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||
Average Brent oil price ($/bbl) | 99 | 54 | 45 | 55 | 71 |
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||
Contracted rigs | ||||||||||||||||
Harsh environment floater | 48 | 45 | 35 | 30 | 31 | |||||||||||
Benign environment floater | 232 | 196 | 139 | 120 | 116 | |||||||||||
Jack-up 1 | 190 | 180 | 152 | 154 | 168 | |||||||||||
Marketed utilization | ||||||||||||||||
Harsh environment floater | 99 | % | 93 | % | 81 | % | 83 | % | 85 | % | ||||||
Benign environment floater | 93 | % | 83 | % | 71 | % | 71 | % | 73 | % | ||||||
Jack-up 1 | 95 | % | 83 | % | 70 | % | 70 | % | 74 | % |
E. | OFF-BALANCE SHEET ARRANGEMENTS |
F. | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS |
Payment due by period | |||||||||||||||
Year Ended December 31, | |||||||||||||||
(In $ millions) | 2019 | 2020 - 2021 | 2022 - 2023 | Thereafter | Total | ||||||||||
Interest-bearing debt (1) (2) | 33 | 977 | 2,721 | 3,355 | 7,086 | ||||||||||
Related party interest-bearing debt | — | — | — | 314 | 314 | ||||||||||
Total debt repayments | 33 | 977 | 2,721 | 3,669 | 7,400 | ||||||||||
Pension obligations (3) | 2 | 4 | 6 | 13 | 25 | ||||||||||
Operating lease obligations | 11 | 18 | 8 | 1 | 38 | ||||||||||
Newbuilding commitments (4) | 368 | — | — | — | 368 | ||||||||||
Total contractual obligations | 414 | 999 | 2,735 | 3,683 | 7,831 |
(1) | Debt principal repayments, excluding cash and payment-in-kind interest. |
(2) | The above table assumes that we will make amortization payments on our secured credit facilities from 2020. Per the terms of our senior secured credit facilities, we can elect to defer up to $500m of such amortization payments until 2021 through the initiation of new loans. |
(3) | Pension obligations are the forecasted employer’s contributions to our defined benefit plans, expected to be made over the next ten years. |
(4) | Newbuilding commitments for two jack-up rigs totaling $0.4 billion (2017: $1.7 billion) with the Dalian shipyard. See "Capital Commitments" section within ITEM 5B - "Liquidity and Capital Resources" and Note 33 - Commitments and Contingencies for further details. |
G. | CRITICAL ACCOUNTING ESTIMATES |
Year ended December 31, 2017 | Year ended December 31, 2016 | |
Seadrill Partners direct ownership interest | 9.75% | 9.50% |
SeaMex equity interest | 10.25% | 11.00% |
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Impairments of marketable securities | |||||||||||
Seadrill Partners - Common units | — | — | — | 153 | |||||||
Total impairment of marketable securities investments (reclassification from OCI) | — | — | — | 153 | |||||||
Impairments of investment in associated companies | |||||||||||
Seadrill Partners - Total direct ownership investments | — | — | 723 | 400 | |||||||
Seadrill Partners - Subordinated units | — | — | 82 | 180 | |||||||
Seadrill Partners - Seadrill Member Interest and IDRs | — | — | — | 73 | |||||||
SeaMex | — | — | 36 | 76 | |||||||
Sete Brasil Participacoes SA | — | — | — | 13 | |||||||
Total impairment of investments in associated companies | — | — | 841 | 742 | |||||||
Total impairment of investments | — | — | 841 | 895 |
H. | SAFE HARBOR |
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. | DIRECTORS AND SENIOR MANAGEMENT |
Name | Position |
Birgitte Ringstad Vartdal | Director |
Eugene I. Davis | Director |
Harald Thorstein | Director |
John Fredriksen | Director and Chairman of the Board |
Kjell-Erik Østdahl | Director |
Peter J. Sharpe | Director |
Scott D. Vogel | Director |
Name | Age | Position |
Anton Dibowitz | 47 | Chief Executive Officer |
Mark Morris | 55 | Chief Financial Officer |
Leif Nelson | 44 | Chief Operating Officer |
Chris Edwards | 54 | General Counsel |
B. | COMPENSATION |
C. | BOARD PRACTICES |
i. | Audit committee |
ii. | Compensation committee |
iii. | Conflicts committee |
D. | EMPLOYEES |
Total employees (including contracted-in staff) | As at December 31, 2018 | As at December 31, 2017 | As at December 31, 2016 | |||||
Operating segments: | ||||||||
Floaters | 1,598 | 1,484 | 1,710 | |||||
Jack-up rigs | 974 | 938 | 1,230 | |||||
Other | 1,617 | 1,221 | 1,100 | |||||
Corporate | 699 | 685 | 740 | |||||
Total employees | 4,888 | 4,328 | 4,780 | |||||
Geographical location: | ||||||||
Norway | 737 | 510 | 600 | |||||
Rest of Europe | 390 | 235 | 210 | |||||
North America and Mexico | 1,493 | 1,095 | 1,100 | |||||
South America | 425 | 742 | 600 | |||||
Asia Pacific | 845 | 462 | 450 | |||||
Africa and Middle East | 998 | 1,284 | 1,820 | |||||
Total employees | 4,888 | 4,328 | 4,780 |
E. | SHARE OWNERSHIP |
Name | Position | Number of $0.10 shares | Number of unvested RSUs |
Birgitte Ringstad Vartdal | Director | — | 5,105 |
Eugene I. Davis | Director | — | 5,105 |
Harald Thorstein | Director | — | 5,105 |
John Fredriksen (1) | Director and Chairman | — | 5,105 |
Kjell-Erik Østdahl | Director | — | 5,105 |
Peter J. Sharpe | Director | — | 5,105 |
Scott D. Vogel | Director | — | 5,105 |
Anton Dibowitz | Management | — | 90,056 |
Mark Morris | Management | — | 42,605 |
Leif Nelson | Management | — | 50,124 |
Chris Edwards | Management | — | 20,049 |
(1) | Mr. Fredriksen disclaims beneficial ownership of the 30,193,826 shares held by Hemen, a company which is indirectly controlled by trusts established by Mr. Fredriksen for the benefit of his immediate family, except to the extent of his voting and dispositive interest in such shares of common stock. Mr. Fredriksen has no pecuniary interest in the shares held by Hemen. The address of Hemen is c/o Seatankers Management Co. Ltd., P.O. Box 53562, CY-3399 Limassol, Cyprus. |
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. | MAJOR SHAREHOLDERS |
Common Shares Held | |||||
Shareholder | Number | % | |||
Hemen Holding Ltd (1) | 30,193,826 | 30.2 | % | ||
King Street Capital Management LP | 7,856,039 | 7.9 | % | ||
Centerbridge Partners LP | 6,657,192 | 6.7 | % | ||
Aristeia Capital LLC | 5,037,657 | 5.0 | % |
(1) | For further information regarding Hemen, please see Item 6. "Directors, Senior Management and Employees – E. Share Ownership.” |
B. | RELATED PARTY TRANSACTIONS |
C. | INTERESTS OF EXPERTS AND COUNSEL |
ITEM 8. | FINANCIAL INFORMATION |
A. | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |
B. | SIGNIFICANT CHANGES |
ITEM 9. | THE OFFER AND LISTING |
A. | OFFER AND LISTING DETAILS |
B. | PLAN OF DISTRIBUTION |
C. | MARKETS |
D. | SELLING SHAREHOLDERS |
E. | DILUTION |
F. | EXPENSES OF THE ISSUE |
ITEM 10. | ADDITIONAL INFORMATION |
A. | SHARE CAPITAL |
B. | MEMORANDUM OF ASSOCIATION AND BYE-LAWS |
i. | Proceedings of the Board of Directors |
ii. | Election and removal of Directors |
a) | provided that Hemen's Percentage Interest is equal to or exceeds 10% (and has not previously fallen below 10%), Hemen shall have the right from the Plan Effective Date (as defined in the Bye-Laws) to: (a) appoint two persons as Hemen Directors (as defined in the Bye-Laws), of whom one shall be the Chairman; and (b) appoint two persons as Independent Nominees (as defined in the Bye-Laws), provided that the other Directors are given reasonable opportunity to meet and consult with Hemen and such Independent Nominees prior to their appointment to the Board of Directors; |
b) | provided that Hemen's Percentage Interest is equal to or exceeds 5% but is less than 10% (and has not previously fallen below 5%), Hemen shall have the right from the Plan Effective Date to: (a) appoint one person as a Hemen Director, who shall be the Chairman; and (b) appoint two persons as Independent Nominees, provided that the other Directors are given reasonable opportunity to meet and consult with Hemen and such Independent Nominees prior to their appointment to the Board of Directors; |
c) | provided that Centerbridge retains at least 50% of the Initial Centerbridge Investment (as defined in the Bye-Laws) (and has not previously held less than 50% of the Initial Centerbridge Investment), Centerbridge shall have the right from the Plan Effective Date to appoint one person as a Centerbridge Director (as defined in the Bye-Laws), including at the time of the first election of directors that follows the first anniversary of the Plan Effective Date (but not any subsequent election). From the second election of directors which takes place following the first anniversary of the Plan Effective Date (and subsequent elections thereafter), Centerbridge shall no longer have the right to appoint a Centerbridge Director; |
d) | provided that the Select Commitment Parties retain at least 50% of the Initial Select Commitment Parties' Investment (as defined in the Bye-Laws) (and have not previously held less than 50% of the Initial Select Commitment Parties' Investment), the Select Commitment Parties, acting by a majority shall have the right from the Plan Effective Date until immediately prior to the first annual general meeting after the Plan Effective Date to appoint Select Commitment Parties Director (as defined in the Bye-Laws); and |
e) | Hemen, Centerbridge and the Select Commitment Parties, acting by a majority of each of Hemen, Centerbridge and the Select Commitment Parties, shall have the right from the Plan Effective Date to appoint one Joint Designee Director (as defined in the Bye-Laws). The New Commitment Parties (as defined in the Bye-Laws) shall have the right to suggest up to three candidates for the position of Joint Designee Director, which candidates will be considered by Hemen, Centerbridge and the Select Commitment Parties when determining the identity of the Joint Designee Director, provided that the New Commitment Parties will provide the names of the suggested candidates to Hemen, Centerbridge and the Select Commitment Parties, not less than 10 Business Days (as defined in the Bye-Laws) in advance of the proposed date of appointment of the Joint Designee Director in accordance with the Bye-Laws. Prior to appointing the Joint Designee Director, Hemen, Centerbridge and the Select Commitment Parties will deliver written notice of the proposed identity of the Joint Designee Director to the Ad Hoc Group (with separate notice to the outside legal counsel of the Ad Hoc Group) and Barclays not less than three Business Days in advance of the proposed date of appointment of the Joint Designee Director, and shall take into consideration any objections raised by the New Commitment Parties as to the identity of the Joint Designee Director. Notwithstanding the foregoing, each of Hemen, Centerbridge and the Select Commitment Parties shall not unreasonably withhold its consent to any appointment of such Joint Designee Director. |
iii. | Duties of Directors |
• | a duty to act in good faith in the best interest of the company; |
• | a duty not to make a personal profit from opportunities that arise from the officer of director; |
• | a duty to avoid conflicts of interest; and |
• | a duty to exercise powers for the purpose for which such powers were intended. |
i. | Variation of share rights |
ii. | Voting rights |
C. | MATERIAL CONTRACTS |
D. | EXCHANGE CONTROLS |
E. | TAXATION |
• | at least 75% of the corporation’s gross income for such taxable year consists of passive income (e.g. dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
• | at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income. |
• | the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the common stock; |
• | the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
• | the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is subject to United States Federal Income tax only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or |
• | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that he has failed to report all interest or dividends required to be shown on his United States federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
F. | DIVIDENDS AND PAYING AGENTS |
G. | STATEMENT BY EXPERTS |
H. | DOCUMENTS ON DISPLAY |
I. | SUBSIDIARY INFORMATION |
(In $ millions) | Principal outstanding | Hedging instruments - see below | Net exposure | Impact of 1% increase in rates | ||||||||
Senior Credit Facilities | 5,662 | 4,500 | 1,162 | 15 | ||||||||
Debt contained within VIEs | 655 | — | 655 | 6 | ||||||||
Total floating rate debt obligations | 6,317 | 4,500 | 1,817 | 21 | ||||||||
New Secured Notes | 769 | — | — | — | ||||||||
Less: Cash and Restricted Cash | (2,003 | ) | — | (2,003 | ) | (20 | ) | |||||
Net debt | 5,083 | 4,500 | (186 | ) | 1 |
(In $ millions) | Amount | Impact of 1% point increase in rates (before impact of interest rate cap) | Less: impact of LIBOR CAP | Impact of 1% point increase in rates (after impact of interest rate cap) | ||||||||
Senior Credit Facility debt - hedged | 4,500 | 45 | (42 | ) | 3 | |||||||
Senior Credit Facility debt - not hedged | 1,162 | 12 | — | 12 | ||||||||
Total Senior Credit Facility Debt | 5,662 | 57 | (42 | ) | 15 |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. | DEBT SECURITIES |
B. | WARRANTS AND RIGHTS |
C. | OTHER SECURITIES |
D. | AMERICAN DEPOSITARY SHARES |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and |
• | Provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. |
Successor | Predecessor | ||||||
(in $) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | ||||
Audit fees (1) | 4,035,949 | 1,484,600 | 5,036,510 | ||||
Audit-related fees (2) | 252,108 | — | 25,000 | ||||
Taxation fees (3) | — | — | 10,000 | ||||
All other fees (4) | — | — | — | ||||
Total | 4,288,057 | 1,484,600 | 5,071,510 |
(1) | Audit fees represent professional services rendered for the audit of our annual Consolidated Financial Statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements. |
(2) | Audit-related fees consist of assurance and related services rendered by the principal accountant related to the performance of the audit or review of our Consolidated Financial Statements which have not been reported under Audit fees above. |
(3) | Taxation fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning. |
(4) | All other fees include services other than audit fees, audit-related fees and taxation fees set forth above, primarily including information security and network penetration testing services. |
i. | Independence of Directors |
ii. | Executive Sessions |
iii. | Nominating/Corporate Governance Committee. |
iv. | Corporate Governance Guidelines. |
i. | Internal Control and Risk Management |
ii. | Board of Directors and Board Committees |
iii. | Appointment of Board Members |
iv. | Authorization to Acquire Treasury Shares |
Exhibit Number | Description |
1.1 | |
1.2 | |
1.3 | |
1.4 | |
2.1 | |
2.2 | |
2.3 | |
2.4 | |
2.5 | |
2.6 | |
4.1 | |
8.1 | |
11.1 | |
12.1 | |
12.2 | |
13.1 | |
13.2 | |
15.1 | |
15.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Schema Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
By: | ||
Name: | Anton Dibowitz | |
Title: | Chief Executive Officer of Seadrill Management Ltd (Principal Executive Officer of Seadrill Limited) |
/s/ Birgitte Ringstad Vartdal | Director |
/s/ Eugene I. Davis | Director |
/s/ Harald Thorstein | Director |
/s/ John Fredriksen | Director and Chairman of the Board |
/s/ Kjell-Erik Østdahl | Director |
/s/ Peter J. Sharpe | Director |
/s/ Scott D. Vogel | Director |
Consolidated Financial Statements of Seadrill Limited | |
Successor | Predecessor | |||||||||||
Notes | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Twelve Months Ended December 31, 2017 | Twelve Months Ended December 31, 2016 | ||||||||
Operating revenues | ||||||||||||
Contract revenues | 469 | 619 | 1,888 | 2,850 | ||||||||
Reimbursable revenues | 26 | 21 | 38 | 66 | ||||||||
Other revenues | 8 * | 46 | 72 | 162 | 253 | |||||||
Total operating revenues | 541 | 712 | 2,088 | 3,169 | ||||||||
Operating expenses | ||||||||||||
Vessel and rig operating expenses | * | (357 | ) | (407 | ) | (792 | ) | (1,015 | ) | |||
Reimbursable expenses | (24 | ) | (20 | ) | (35 | ) | (61 | ) | ||||
Depreciation | (236 | ) | (391 | ) | (798 | ) | (810 | ) | ||||
Amortization of intangibles | (58 | ) | — | — | — | |||||||
General and administrative expenses | * | (62 | ) | (100 | ) | (277 | ) | (234 | ) | |||
Total operating expenses | (737 | ) | (918 | ) | (1,902 | ) | (2,120 | ) | ||||
Other operating items | ||||||||||||
Impairment of long lived assets | — | (414 | ) | (696 | ) | (44 | ) | |||||
Loss on disposals | 9 * | — | — | (245 | ) | — | ||||||
Other operating income | * | 21 | 7 | 27 | 21 | |||||||
Total other operating items | 21 | (407 | ) | (914 | ) | (23 | ) | |||||
Operating (loss)/income | (175 | ) | (613 | ) | (728 | ) | 1,026 | |||||
Financial and other non-operating items | ||||||||||||
Interest income | * | 40 | 19 | 60 | 66 | |||||||
Interest expense | 10 * | (261 | ) | (38 | ) | (285 | ) | (412 | ) | |||
Loss on impairment of investments | 11 | — | — | (841 | ) | (895 | ) | |||||
Share in results from associated companies (net of tax) | 18 | (90 | ) | 149 | 174 | 283 | ||||||
(Loss)/gain on derivative financial instruments | 31 * | (31 | ) | (4 | ) | 11 | (74 | ) | ||||
Gain on debt extinguishment | — | — | 19 | 47 | ||||||||
Foreign exchange (loss)/gain | (4 | ) | — | (65 | ) | 18 | ||||||
Loss on marketable securities | 15 | (64 | ) | (3 | ) | — | — | |||||
Reorganization items, net | 4 | (9 | ) | (3,365 | ) | (1,337 | ) | — | ||||
Other financial and non-operating items | * | (3 | ) | — | (44 | ) | (15 | ) | ||||
Total financial and other non-operating items | (422 | ) | (3,242 | ) | (2,308 | ) | (982 | ) | ||||
(Loss)/income before income taxes | (597 | ) | (3,855 | ) | (3,036 | ) | 44 | |||||
Income tax expense | 12 | (8 | ) | (30 | ) | (66 | ) | (199 | ) | |||
Net loss | (605 | ) | (3,885 | ) | (3,102 | ) | (155 | ) | ||||
Net loss attributable to the parent | (602 | ) | (3,881 | ) | (2,973 | ) | (181 | ) | ||||
Net (loss)/gain attributable to the non-controlling interest | (2 | ) | (6 | ) | (129 | ) | 26 | |||||
Net (loss)/gain attributable to the redeemable non-controlling interest | (1 | ) | 2 | — | — | |||||||
Basic loss per share (U.S. dollar) | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) | ||||
Diluted loss per share (U.S. dollar) | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) |
Successor | Predecessor | ||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Twelve months ended December 31, 2017 | Twelve months ended December 31, 2016 | ||||||||
Net loss | (605 | ) | (3,885 | ) | (3,102 | ) | (155 | ) | |||
Other comprehensive income/(loss), net of tax: | |||||||||||
Unrealized gain on marketable securities | — | — | 14 | 17 | |||||||
Change in fair value of debt component of Archer convertible bond | (3 | ) | — | — | — | ||||||
Other than temporary impairment of marketable securities, reclassification to Statement of Operations | — | — | — | 153 | |||||||
Actuarial gain/(loss) relating to pensions | 1 | — | (3 | ) | 22 | ||||||
Unrealized gain on interest rate swaps in VIEs and subsidiaries | — | — | 2 | 1 | |||||||
Share of other comprehensive (loss)/income from associated companies | (5 | ) | — | (8 | ) | 10 | |||||
Other comprehensive (loss)/income: | (7 | ) | — | 5 | 203 | ||||||
Total comprehensive (loss)/income for the period | (612 | ) | (3,885 | ) | (3,097 | ) | 48 | ||||
Comprehensive (loss)/income attributable to the parent | (609 | ) | (3,881 | ) | (2,976 | ) | 14 | ||||
Comprehensive (loss)/income attributable to the non-controlling interest | (2 | ) | (6 | ) | (121 | ) | 34 | ||||
Comprehensive (loss)/income attributable to the redeemable non-controlling interest | (1 | ) | 2 | — | — |
Successor | Predecessor | |||||
Notes | 2018 | 2017 | ||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | 1,542 | 1,255 | ||||
Restricted cash | 14 | 461 | 104 | |||
Marketable securities | 15 | 57 | 124 | |||
Accounts receivables, net | 16 | 208 | 295 | |||
Amount due from related parties - current | 30 | 177 | 217 | |||
Other current assets | 17 | 322 | 257 | |||
Total current assets | 2,767 | 2,252 | ||||
Non-current assets | ||||||
Investment in associated companies | 18 | 800 | 1,473 | |||
Newbuildings | 19 | — | 248 | |||
Drilling units | 20 | 6,659 | 13,216 | |||
Deferred tax assets | 12 | 18 | 10 | |||
Equipment | 21 | 29 | 29 | |||
Amount due from related parties - non-current | 30 | 539 | 547 | |||
Assets held for sale | 36 | — | 126 | |||
Other non-current assets | 17 | 36 | 81 | |||
Total non-current assets | 8,081 | 15,730 | ||||
Total assets | 10,848 | 17,982 | ||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY | ||||||
Current liabilities | ||||||
Debt due within one year | 22 | 33 | 509 | |||
Trade accounts payable | 82 | 72 | ||||
Amounts due to related parties - current | 30 | 39 | 10 | |||
Other current liabilities | 23 | 310 | 268 | |||
Total current liabilities | 464 | 859 | ||||
Liabilities subject to compromise | 5 | — | 9,191 | |||
Non-current liabilities | ||||||
Long-term debt | 22 | 6,881 | 485 | |||
Long-term debt due to related parties | 30 | 222 | 314 | |||
Deferred tax liabilities | 12 | 87 | 107 | |||
Other non-current liabilities | 23 | 121 | 67 | |||
Total non-current liabilities | 7,311 | 973 | ||||
Commitments and contingencies (see note 32) | ||||||
Redeemable non-controlling interest | 26 | 38 | — | |||
Equity | ||||||
Common shares of par value US$0.10 per share: 111,000,000 shares authorized and 100,000,000 issued at December 31, 2018 (Successor) (Common shares of par value US$2.00 per share: 800,000,000 shares authorized and 504,518,940 issued at December 31, 2017 (Predecessor) | 24 | 10 | 1,008 | |||
Additional paid in capital | 3,491 | 3,313 | ||||
Contributed surplus | — | 1,956 | ||||
Accumulated other comprehensive (loss)/income | (7 | ) | 58 | |||
Retained (loss)/earnings | (611 | ) | 225 | |||
Total Shareholder's equity | 2,883 | 6,560 | ||||
Non-controlling interest | 25 | 152 | 399 | |||
Total equity | 3,035 | 6,959 | ||||
Total liabilities, redeemable non-controlling interest and equity | 10,848 | 17,982 |
Successor | Predecessor | ||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||
Cash Flows from Operating Activities | |||||||||||
Net loss | (605 | ) | (3,885 | ) | (3,102 | ) | (155 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation | 236 | 391 | 798 | 810 | |||||||
Amortization of deferred loan charges | — | — | 27 | 45 | |||||||
Amortization of unfavorable and favorable contracts | 58 | (21 | ) | (43 | ) | (65 | ) | ||||
Share of results from associated companies | 90 | (149 | ) | (174 | ) | (283 | ) | ||||
Share-based compensation expense | — | 3 | 7 | 8 | |||||||
Loss on disposals | — | — | 245 | — | |||||||
Contingent consideration realized | — | (7 | ) | (27 | ) | (21 | ) | ||||
Interest unwind on contingent consideration assets | (1 | ) | — | — | — | ||||||
Unrealized loss/(gain) related to derivative financial instruments | 31 | 4 | (76 | ) | (67 | ) | |||||
Loss on impairment of long-lived assets | — | 414 | 696 | 44 | |||||||
Loss on impairment of investments | — | — | 841 | 895 | |||||||
Deferred tax (benefit)/expense | (22 | ) | — | 7 | 73 | ||||||
Unrealized foreign exchange loss/(gain) on long-term debt | — | — | 59 | (5 | ) | ||||||
Amortization of discount on debt | 23 | — | — | — | |||||||
Gain on derecognition of investment in associated company | — | — | (10 | ) | — | ||||||
Gain on debt extinguishment | — | — | (19 | ) | (47 | ) | |||||
Unrealized loss on marketable securities | 64 | 3 | — | — | |||||||
Non-cash gain on liabilities subject to compromise | — | (2,977 | ) | — | — | ||||||
Fresh start valuation adjustments | — | 6,142 | — | — | |||||||
Other re-organization items | — | 6 | 1,274 | — | |||||||
Other | (2 | ) | (1 | ) | (2 | ) | (2 | ) | |||
Other cash movements in operating activities | |||||||||||
Distributions received from associated companies | 32 | 17 | 39 | 55 | |||||||
Payments for long-term maintenance | (71 | ) | (78 | ) | (58 | ) | (95 | ) | |||
Changes in operating assets and liabilities, net of effect of acquisitions and disposals | |||||||||||
Trade accounts receivable | 64 | 29 | 167 | 256 | |||||||
Trade accounts payable | (31 | ) | 4 | (9 | ) | (55 | ) | ||||
Prepaid expenses/accrued revenue | 12 | 42 | (66 | ) | 15 | ||||||
Deferred revenue | 21 | (23 | ) | (107 | ) | (168 | ) | ||||
Related party receivables | 7 | (13 | ) | (42 | ) | 2 | |||||
Related party payables | 54 | (42 | ) | (44 | ) | (35 | ) | ||||
Other assets | (20 | ) | (62 | ) | 93 | 55 | |||||
Other liabilities | 34 | (10 | ) | (75 | ) | (76 | ) | ||||
Net cash (used in)/provided by operating activities | (26 | ) | (213 | ) | 399 | 1,184 |
Successor | Predecessor | ||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||
Cash Flows from Investing Activities | |||||||||||
Additions to newbuildings | — | (1 | ) | (33 | ) | (52 | ) | ||||
Additions to drilling units and equipment | (27 | ) | (48 | ) | (59 | ) | (84 | ) | |||
Refund of yard installments | — | — | 25 | 53 | |||||||
Contingent consideration received | 65 | 48 | 95 | 95 | |||||||
Settlement of West Mira | — | — | 170 | — | |||||||
Sale of rigs and equipment | — | 126 | 122 | — | |||||||
Buyout of guarantee | — | — | (28 | ) | — | ||||||
Investment in associated companies | — | — | — | (16 | ) | ||||||
Payments received from loans granted to related parties | 23 | 24 | 66 | 283 | |||||||
Loans granted to related parties | — | — | — | (120 | ) | ||||||
Proceeds from disposal of marketable securities | — | — | — | 195 | |||||||
Net cash provided by investing activities | 61 | 149 | 358 | 354 | |||||||
Cash Flows from Financing Activities | |||||||||||
Proceeds from debt | — | 875 | — | — | |||||||
Repayments of debt | (83 | ) | (153 | ) | (754 | ) | (1,253 | ) | |||
Mandatory redemption of New Secured Notes | (121 | ) | — | — | — | ||||||
Debt fees paid | (4 | ) | (35 | ) | (53 | ) | (31 | ) | |||
Repayments of debt to related party | — | — | (39 | ) | (103 | ) | |||||
Dividends paid to non-controlling interests | — | — | — | (7 | ) | ||||||
Purchase of treasury shares | — | — | — | (10 | ) | ||||||
Cash settlement of restricted stock units | — | — | — | (1 | ) | ||||||
Proceeds from issuance of shares | — | 200 | — | — | |||||||
Net cash (used in)/provided by financing activities | (208 | ) | 887 | (846 | ) | (1,405 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (1 | ) | (5 | ) | 5 | 18 | |||||
Net (decrease)/increase in cash and cash equivalents, including restricted cash | (174 | ) | 818 | (84 | ) | 151 | |||||
Cash and cash equivalents, including restricted cash, at beginning of the year | 2,177 | 1,359 | 1,443 | 1,292 | |||||||
Cash and cash equivalents, including restricted cash, at the end of year | 2,003 | 2,177 | 1,359 | 1,443 | |||||||
Supplementary disclosure of cash flow information | |||||||||||
Interest paid, net of capitalized interest | (178 | ) | (38 | ) | (264 | ) | (400 | ) | |||
Taxes paid | (16 | ) | (22 | ) | (119 | ) | (123 | ) |
Common shares | Additional paid in capital | Contributed surplus | Accumulated other comprehensive income/(loss) | Retained Earnings | Total equity before NCI | Non-controlling interest | Total equity | |||||||||||||||||
Balance at December 31, 2015 (Predecessor) | 985 | 3,275 | 1,956 | (142 | ) | 3,379 | 9,453 | 615 | 10,068 | |||||||||||||||
Purchase of treasury shares | (8 | ) | (2 | ) | — | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Share-based compensation charge | — | 7 | — | — | — | 7 | — | 7 | ||||||||||||||||
Cash settlement of vested restricted stock units | — | (1 | ) | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Conversion of convertible bond | 31 | 27 | — | — | — | 58 | — | 58 | ||||||||||||||||
Recognition of non-controlling interest | — | — | — | — | — | — | 6 | 6 | ||||||||||||||||
Other comprehensive income | — | — | — | 195 | — | 195 | 8 | 203 | ||||||||||||||||
Distributions to Non-controlling interests | — | — | — | — | — | — | (113 | ) | (113 | ) | ||||||||||||||
Net loss | — | — | — | — | (181 | ) | (181 | ) | 26 | (155 | ) | |||||||||||||
Balance at December 31, 2016 (Predecessor) | 1,008 | 3,306 | 1,956 | 53 | 3,198 | 9,521 | 542 | 10,063 | ||||||||||||||||
Share-based compensation charge | — | 7 | — | — | — | 7 | — | 7 | ||||||||||||||||
Other comprehensive income | — | — | — | 5 | — | 5 | — | 5 | ||||||||||||||||
Distributions to non-controlling interests | — | — | — | — | — | — | (14 | ) | (14 | ) | ||||||||||||||
Net loss | — | — | — | — | (2,973 | ) | (2,973 | ) | (129 | ) | (3,102 | ) | ||||||||||||
Balance at December 31, 2017 (Predecessor) | 1,008 | 3,313 | 1,956 | 58 | 225 | 6,560 | 399 | 6,959 | ||||||||||||||||
ASU 2016-01 - Financial Instruments | — | — | — | (31 | ) | 31 | — | — | — | |||||||||||||||
ASU 2016-16 - Income Taxes | — | — | — | — | (59 | ) | (59 | ) | (25 | ) | (84 | ) | ||||||||||||
ASU 2016-09 - Revenue from contracts | — | — | — | — | 7 | 7 | — | 7 | ||||||||||||||||
Share-based compensation charge | — | 9 | — | — | — | 9 | — | 9 | ||||||||||||||||
Reclassification of non-controlling interest | — | — | — | — | (43 | ) | (43 | ) | 43 | — | ||||||||||||||
Revaluation of redeemable non-controlling interest | — | — | — | — | 127 | 127 | (150 | ) | (23 | ) | ||||||||||||||
Net loss | — | — | — | — | (3,881 | ) | (3,881 | ) | (6 | ) | (3,887 | ) | ||||||||||||
Balance at July 1, 2018 (Predecessor) | 1,008 | 3,322 | 1,956 | 27 | (3,593 | ) | 2,720 | 261 | 2,981 | |||||||||||||||
Cancellation of Predecessor equity | (1,008 | ) | (3,322 | ) | (1,956 | ) | (27 | ) | 3,593 | (2,720 | ) | (107 | ) | (2,827 | ) | |||||||||
Balance at July 1, 2018 (Predecessor) | — | — | — | — | — | — | 154 | 154 | ||||||||||||||||
Issuance of Successor common stock | 10 | 3,491 | — | — | — | 3,501 | — | 3,501 | ||||||||||||||||
Balance at July 2, 2018 (Successor) | 10 | 3,491 | — | — | — | 3,501 | 154 | 3,655 | ||||||||||||||||
Revaluation of redeemable non-controlling interest | — | — | — | — | (9 | ) | (9 | ) | — | (9 | ) | |||||||||||||
Net Loss | — | — | — | — | (602 | ) | (602 | ) | (2 | ) | (604 | ) | ||||||||||||
Other comprehensive loss | — | — | — | (7 | ) | — | (7 | ) | — | (7 | ) | |||||||||||||
Balance at December 31, 2018 (Successor) | 10 | 3,491 | — | (7 | ) | (611 | ) | 2,883 | 152 | 3,035 |
• | ASU 2016-15 Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments |
• | ASU 2017-01 Business Combinations (Topic 805)— Clarifying the Definition of a Business |
• | ASU 2017-03 Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323) |
• | ASU 2017-04 Intangibles (Topic 350)— Simplifying the Test for Goodwill Impairment |
• | ASU 2017-05 Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) |
• | ASU 2017-07 Compensation - Retirement Benefits (Topic 715) |
• | ASU 2017-09 Compensation - Stock Compensation (Topic 718) |
• | ASU 2018-03 Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10) |
• | ASU 2018-04 Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980) |
• | ASU 2018-05 Income Taxes (Topic 740) |
• | ASU 2018-06 Codification Improvements to (Topic 942) |
• | ASU 2018-19 Codification Improvements to (Topic 326) |
• | ASU 2016-02 Leases (Topic 842) (also 2018-01, 2018-10, 2018-11. 2018-20) |
• | ASU 2016-13 Financial Instruments — Credit Losses (Topic 326) |
• | ASU 2018-07 Compensation-Stock Compensation (Topic 718) |
• | ASU 2018-13 Fair Value Measurement (Topic 820) |
• | ASU 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans (Subtopic 715-20) |
• | ASU 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) |
• | ASU 2018-16 Derivatives and Hedging (Topic 815) |
• | ASU 2018-17 Consolidation (Topic 810) |
1. | We will not reassess whether any expired or existing contracts are or contain leases. |
2. | We will not reassess the lease classification for any expired or existing leases. |
3. | We will not reassess initial direct costs for any existing leases. |
4. | We will use hindsight in determining the lease term and in assessing impairment of the right-of-use assets. |
◦ | There was a corporate reorganization whereby Seadrill Limited became the ultimate parent holding company of Old Seadrill Limited's subsidiaries. |
◦ | The Commitment Parties and subscribers to an equity rights offering subscribed for a total 23,750,000 shares in Seadrill Limited for aggregate consideration of $200 million. |
◦ | The Commitment Parties and subscribers to a notes rights offering subscribers purchased a total $880 million principal amount of New Secured Notes and were issued 54,625,000 shares in Seadrill Limited for an aggregate consideration of $880 million. |
◦ | The holders of general unsecured claim were issued 14,250,000 shares in Seadrill Limited. |
◦ | The former holders of Old Seadrill Limited Equity and certain other claimants were issued 1,900,000 shares in Seadrill Limited. |
◦ | Certain Commitment Parties received a fee of 475,000 shares in Seadrill Limited and Hemen received a fee of 5,000,000 shares in Seadrill Limited. |
◦ | An employee incentive plan was implemented (the “Employee Incentive Plan”) which reserved an aggregate of 10% of the Seadrill Limited Shares, for grants to be made from time to time to Seadrill employees and other parties. |
Percentage | ||||||||||||
Recipient of Common Shares | Number of shares | Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | Prior to dilution by the shares reserved under the Employee Incentive Plan | Fully diluted | ||||||||
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers | 23,750,000 | 25.00 | % | 23.75 | % | 21.38 | % | |||||
Recipients of New Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers) | 54,625,000 | 57.50 | % | 54.63 | % | 49.16 | % | |||||
Holders of General Unsecured Claims | 14,250,000 | 15.00 | % | 14.25 | % | 12.82 | % | |||||
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants | 1,900,000 | 2.00 | % | 1.90 | % | 1.71 | % | |||||
Fees to Select Commitment Parties | 475,000 | 0.50 | % | 0.47 | % | 0.43 | % | |||||
All creditors, excluding Primary Structuring Fee | 95,000,000 | 100.00 | % | 95.00 | % | 85.50 | % | |||||
Hemen (on account of Primary Structuring Fee) | 5,000,000 | - | 5.00 | % | 4.50 | % | ||||||
Total, prior to dilution by shares reserved under the Employee Incentive Plan | 100,000,000 | - | 100.00 | % | 90.00 | % | ||||||
Reserved for the Employee Incentive Plan | 11,111,111 | - | - | 10.00 | % | |||||||
Total, fully diluted | 111,111,111 | - | - | 100.00 | % |
Successor | Predecessor | |||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | December 31, 2016 | ||||||||
Professional and advisory fees | (9 | ) | (187 | ) | (66 | ) | — | |||||
New investor commitment fees | — | — | (53 | ) | — | |||||||
Loss on Newbuilding global settlement claim | — | — | (1,064 | ) | — | |||||||
Loss on other pre-petition allowed claims | — | — | (3 | ) | ||||||||
Gain on liabilities subject to compromise | — | 2,958 | — | — | ||||||||
Fresh start valuation adjustments | — | (6,142 | ) | — | — | |||||||
Write-off of debt issuance costs | — | — | (66 | ) | — | |||||||
Reversal of credit risk on derivatives | — | — | (89 | ) | — | |||||||
Interest income on surplus cash invested | — | 6 | 4 | — | ||||||||
Total reorganization items, net | (9 | ) | (3,365 | ) | (1,337 | ) | — |
Investment | WACC | |
Seadrill Capricorn Holdings LLC | 11.4 | % |
Seadrill Operating LP | 12.0 | % |
Seadrill Deepwater Drillship Ltd | 12.0 | % |
Seabras Sapura Holding | 14.3 | % |
Seabras Sapura Participacoes | 13.7 | % |
SeaMex | 12.7 | % |
(In $ millions) | As at July 2, 2018 | |
Distributable value | 11,056 | |
Less: non-controlling interest | (154 | ) |
Less: fair value of debt | (7,301 | ) |
Less: fair value of other non-operating liabilities | (108 | ) |
Add: fair value of tax attributes | 8 | |
Fair value of Successor common stock issued upon emergence | 3,501 | |
Shares issued and outstanding on July 2, 2018 | 100.0 | |
Per share value | 35.01 |
(In $ millions) | As at July 2, 2018 | |
Distributable value | 11,056 | |
Add: other working capital liabilities | 478 | |
Add: other non-current operating liabilities | 57 | |
Add: fair value of tax attributes | 8 | |
Add: redeemable non-controlling interest | 30 | |
Total reorganization value | 11,629 |
As of July 1, 2018 | |||||||||||
(In $ millions) | Predecessor Company | Reorganization Adjustments | Fresh Start Adjustments | Successor Company | |||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | 809 | 790 | (a) | — | 1,599 | ||||||
Restricted cash | 409 | 169 | (a) | — | 578 | ||||||
Marketable securities | 121 | — | — | 121 | |||||||
Accounts receivable, net | 272 | — | — | 272 | |||||||
Amount due from related parties - current | 181 | — | 14 | (l) | 195 | ||||||
Other current assets | 247 | — | 181 | (m) | 428 | ||||||
Total current assets | 2,039 | 959 | 195 | 3,193 | |||||||
Investment in associated companies | 1,615 | — | (687 | ) | (n) | 928 | |||||
Newbuildings | 249 | — | (249 | ) | (o) | — | |||||
Drilling units | 12,531 | — | (5,734 | ) | (p) | 6,797 | |||||
Deferred tax assets | 8 | — | — | 8 | |||||||
Equipment | 35 | — | (6 | ) | (q) | 29 | |||||
Amount due from related parties - non-current | 565 | — | 11 | (r) | 576 |
As of July 1, 2018 | |||||||||||
(In $ millions) | Predecessor Company | Reorganization Adjustments | Fresh Start Adjustments | Successor Company | |||||||
Assets held for sale - non-current | — | — | — | — | |||||||
Other non-current assets | 3 | — | 95 | (s) | 98 | ||||||
Total assets | 17,045 | 959 | (6,375 | ) | 11,629 | ||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | |||||||||||
Debt due within one year | 90 | — | (33 | ) | (t) | 57 | |||||
Trade accounts payable | 96 | 17 | (b) | — | 113 | ||||||
Amounts due to related parties - current | 4 | 4 | (c) | — | 8 | ||||||
Other current liabilities | 229 | 100 | (d) | 32 | (u) | 361 | |||||
Total current liabilities | 419 | 121 | (1 | ) | 539 | ||||||
Liabilities subject to compromise | 9,050 | (9,050 | ) | (e) | — | — | |||||
Long-term debt | 856 | 6,292 | (f) | (104 | ) | (t) | 7,044 | ||||
Long-term debt due to related parties | 294 | — | (94 | ) | (v) | 200 | |||||
Deferred tax liabilities | 105 | — | (6 | ) | (w) | 99 | |||||
Other non-current liabilities | 57 | 3 | (b) | 2 | (x) | 62 | |||||
Total non-current liabilities | 1,312 | 6,295 | (202 | ) | 7,405 | ||||||
Redeemable non-controlling interest | 25 | — | 5 | (y) | 30 | ||||||
Equity | |||||||||||
Predecessor common shares | 1,008 | (1,008 | ) | (g) | — | — | |||||
Predecessor additional paid-in capital | 3,316 | (3,322 | ) | (g) | — | — | |||||
6 | (h) | ||||||||||
Predecessor contributed surplus | 1,956 | (1,956 | ) | (g) | — | — | |||||
Predecessor accumulated other comprehensive income | 41 | — | (41 | ) | (z) | — | |||||
Predecessor (loss)/retained earnings | (146 | ) | 7,110 | (i) | (6,964 | ) | (z) | — | |||
Successor common shares | — | 10 | (j) | — | 10 | ||||||
Successor contributed surplus | — | 2,860 | (j) | 631 | (aa) | 3,491 | |||||
Total Shareholders' equity | 6,175 | 3,700 | (6,374 | ) | 3,501 | ||||||
Non-controlling interest | 64 | (107 | ) | (k) | 197 | (bb) | 154 | ||||
Total equity | 6,239 | 3,593 | (6,177 | ) | 3,655 | ||||||
Total liabilities and equity | 17,045 | 959 | (6,375 | ) | 11,629 |
(a) | Adjustments to cash and cash equivalents including the following: |
Cash and Cash Equivalents | ||
(In $ millions) | ||
Proceeds from debt commitment (1) | 875 | |
Proceeds from equity commitment | 200 | |
Payment to newbuild counterparty members | (18 | ) |
Amendment consent fees to senior secured creditors | (26 | ) |
Funding of the escrow account for NSN collateral | (227 | ) |
Payment of closing fees for the debt commitment | (9 | ) |
Payment new commitment parties fee | (1 | ) |
Payment to the bank coordinating committee | (4 | ) |
Change in cash and cash equivalents | 790 |
Restricted Cash | ||
(In $ millions) | ||
Funding of the escrow account per terms of NSN | 227 | |
Payment of post confirmation accrued professional fees in connection with emergence | (31 | ) |
Payment of success fees incurred upon emergence | (22 | ) |
Distribution from the cash pool to general unsecured claims | (2 | ) |
Payment of unsecured creditor committee advisor fees | (3 | ) |
Change in restricted cash | 169 |
(b) | Reflects the reinstatement of trade accounts payable and other non-current liabilities included as part of liabilities subject to compromise |
(c) | Reflects the reinstatement of amounts due to related party included as part of liabilities subject to compromise. |
(d) | Reflects the adjustment to other current liabilities upon emergence: |
Other current liabilities upon emergence | ||
(In $ millions) | ||
Success fees accrued upon emergence | 28 | |
Undistributed cash pool balance for general unsecured claims on emergence | 35 | |
Cash payment made for post confirmation accrued professional fees in connection with emergence | (31 | ) |
Reinstatement of other current liabilities as part of liabilities subject to compromise | 64 | |
Amendment fees on SFL loans accrued upon emergence | 4 | |
Change in other liabilities | 100 |
Gain on liabilities subject to compromise | ||
(In $ millions) | ||
Senior undersecured or impaired external debt | 5,266 | |
Unsecured bonds | 2,334 | |
Newbuild claims | 1,064 | |
Accrued interest payable | 49 | |
Derivatives previously recorded at fair value | 249 | |
Accounts payable and other liabilities | 84 | |
Amount due to related party | 4 | |
Liabilities subject to compromise | 9,050 | |
Less: Distribution from cash pool to holders of general unsecured claims on emergence | (2 | ) |
Less: Undistributed cash pool balance for holders of general unsecured claims on emergence | (35 | ) |
Less: Payment to newbuild counterparty members | (17 | ) |
Less: Fair value of equity issued to holders of general unsecured claims | (498 | ) |
Less: Reinstatement of amount due to related party | (4 | ) |
Less: Reinstatement of trade accounts payable | (84 | ) |
Less: Reinstatement of senior undersecured or impaired external debt | (5,266 | ) |
Less: Recognition of adequate protection payments on senior undersecured or impaired external debt | (186 | ) |
Gain on settlement of liabilities subject to compromise | 2,958 |
(f) | Increase in long-term debt includes reinstatement of certain liabilities subject to compromise as well as the issuance of New Secured Notes. The net increase reflects the following: |
(In $ millions) | ||
Reinstated Senior undersecured or impaired external debt | 5,266 | |
Recognition of adequate protection payments | 186 | |
Lender consent fee | (26 | ) |
Total reinstated senior secured credit facilities | 5,426 | |
Issuance of New Secured Notes | 880 | |
Capitalized pre-issuance interest for New Secured Notes for 8% paid-in kind | 10 | |
Debt issuance cost in related to the issuance of the New Secured Notes | (9 | ) |
Discount on New Secured Notes for the pre-issuance interest paid upon emergence (4% cash interest of $5 million and 8% paid-in kind interest of $10 million) | (15 | ) |
Net increase in long-term debt | 6,292 |
(g) | Reflects the cancellation of Predecessor Company common stock, contributed surplus, and additional paid in capital to retained earnings |
(h) | Represents the unamortized stock compensation recognized upon cancellation of the Predecessor Company common stock, contributed surplus, and additional paid in capital. |
(i) | Reflects the change in predecessor retained (loss)/earnings |
(In $ millions) | ||
Gain on settlement of liabilities subject to compromise | 2,958 | |
Cancellation of predecessor common stock, contributed surplus, and additional paid in capital | 6,286 | |
Recognition of unamortized stock compensation expense upon cancellation of the Predecessor Company common stock, contributed surplus, and additional paid in capital | (6 | ) |
Fair value of Successor Common Shares issued upon emergence | (2,176 | ) |
Success fees incurred upon emergence | (51 | ) |
New Commitment Parties, bank coordinating committee, and unsecured creditor committee advisor fees | (8 | ) |
Elimination of NADL and Sevan non-controlling interest | 107 | |
Total change in predecessor retained (loss)/earnings | 7,110 |
(j) | Reflects the issuance of 24 million shares of common stock at a per share price of $8.42 in connection with the equity commitment, 55 million shares of common stock with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million shares of common stock issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million shares of common stock issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million shares of common stock issued for structuring fees to the select commitment parties and Hemen at an estimated fair value of $35.01 per share. |
(k) | As determined in the Plan, NADL and Sevan became wholly owned subsidiaries and the non-controlling interests of NADL and Sevan were eliminated. |
(l) | Adjustment to record the current portion of the contingent consideration receivable from Seadrill Partners related to the West Vela with the fair value of $14 million. |
(m) | Adjustment to write-off $9 million of current deferred mobilization costs to fair value, which is offset by recording the fair value of certain favorable drilling contracts of $190 million. The value was based on the contracted rates compared to the prevailing market rates. |
(n) | Adjustment to decrease the carrying value of the investments in associated companies to their estimated fair values determined using a discounted cash flow analysis utilizing the assumption noted above the Valuation of Equity Method Investments. |
(o) | Adjustment to record the newbuildings at fair value based on the value derived from an income approach compared to the current contractual obligations remaining to be paid. |
(q) | Adjustment to record equipment at fair value based on a cost approach. |
(r) | Adjustment to record the non-current portion of the contingent consideration receivable from Seadrill Partners related to the West Vela and West Polaris with the fair value of $17 million. This amount is offset with a $3 million reduction on the recoverability of the receivable due from Seabras Participacoes and $2 million adjustment to record the embedded conversion option component of the Archer convertible debt instrument at the emergence date fair value. |
(s) | Adjustment to write-off $2 million of deferred mobilization cost and $1 million of unamortized favorable contracts to fair value. These are offset by recording the fair value of certain favorable drilling and management service contracts of $98 million. The value was based on the contracted rates compared to the prevailing market rates. |
(t) | Fair value adjustment to record discount of $188 million on the senior secured credit facilities and Ship Finance loans. This reduction is offset by a $51 million write-off of discounts on the New Secured Notes, unamortized debt issuance cost and lender consent fees. |
(In $ millions) | ||||||||
As at July 2, 2018 | New Secured Notes | Senior Secured Credit Facilities | Ship Finance Loans | Total | ||||
Carrying value after reorganization adjustments | 866 | 5,636 | 736 | 7,238 | ||||
Adjustments to record debt at fair value: | — | |||||||
Write-off of unamortized debt issuance costs | 9 | 26 | 1 | 36 | ||||
Write-off of discounts for pre-issuance accrued interest settled upon issuance of NSNs (4% cash interest of $5 million and 8% paid-in kind interest of $10 million) | 15 | — | — | 15 | ||||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | — | (155 | ) | (33 | ) | (188 | ) | |
Estimated fair value of debt at emergence | 890 | 5,507 | 704 | 7,101 |
(u) | Adjustment to write-off $27 million, primarily related to deferred mobilization revenue, for which we have determined to have no future performance obligations. These are offset by recording the fair value of certain unfavorable drilling contracts of $59 million. The value was based on the contracted rates compared to the prevailing market rates. |
(v) | Adjustment to reflect a fair value discount on the loans due to related parties. The value was based on an income approach using level 2 inputs. |
(w) | Adjustments to the deferred tax liabilities as a result of applying fresh start accounting. |
(x) | Adjustment to write-off $7 million of deferred mobilization revenue, for which we have determined to have no future performance obligations, offset by the fair value of certain unfavorable drilling contracts of $9 million. The value was based on the contracted rates compared to prevailing market rates. |
(y) | Adjustment to record redeemable non-controlling interest to the emergence date fair value. |
(z) | Reflects the fresh start accounting adjustment to reset retained (loss) earnings and accumulated other comprehensive income. |
(aa) | Reflects the increase in fair value of the 24 million shares of common stock issued in connection with the equity commitment from $8.42 to $35.01 per share. |
(bb) | Adjustment to record the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited to fair value. |
1. | Floaters: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to semi-submersible rigs and drillships for harsh and benign environments in mid-, deep- and ultra-deep waters; |
2. | Jack-up rigs: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environments; and |
3. | Other: Operations including management services to third parties and related parties. Income and expenses from these management services are classified under this segment. |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Floaters | 322 | 482 | 1,387 | 2,212 | |||||||
Jack-up rigs | 167 | 193 | 617 | 865 | |||||||
Other | 52 | 37 | 84 | 92 | |||||||
Total | 541 | 712 | 2,088 | 3,169 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Floaters | 190 | 298 | 601 | 600 | |||||||
Jack-up rigs | 46 | 93 | 197 | 210 | |||||||
Total | 236 | 391 | 798 | 810 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Floaters | (161 | ) | (446 | ) | (622 | ) | 759 | ||||
Jack-up Rigs | (16 | ) | (167 | ) | (112 | ) | 267 | ||||
Other | 2 | — | 6 | — | |||||||
Operating (loss)/income | (175 | ) | (613 | ) | (728 | ) | 1,026 | ||||
Unallocated items: | |||||||||||
Total financial items and other | (422 | ) | (3,242 | ) | (2,308 | ) | (982 | ) | |||
(Loss)/income before income taxes | (597 | ) | (3,855 | ) | (3,036 | ) | 44 |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Floaters | 5,508 | 9,956 | |||
Jack-up Rigs | 1,151 | 3,508 | |||
Total Drilling Units and Newbuildings | 6,659 | 13,464 | |||
Assets held for sale | — | 126 | |||
Investments in Associated companies | 800 | 1,473 | |||
Marketable securities | 57 | 124 | |||
Cash and restricted cash | 2,003 | 1,359 | |||
Other assets | 1,329 | 1,436 | |||
Total | 10,848 | 17,982 |
Successor | Predecessor | ||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | December 31, 2016 | ||||||||
(In $ millions) | |||||||||||
Floaters | 74 | 93 | 128 | 192 | |||||||
Jack-up Rigs | 24 | 24 | 22 | 35 | |||||||
Total | 98 | 117 | 150 | 227 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Norway | 117 | 82 | 219 | 475 | |||||||
Nigeria | 108 | 105 | 193 | 431 | |||||||
Brazil | 91 | 188 | 358 | 491 | |||||||
Saudi Arabia | 78 | 79 | 159 | 200 | |||||||
United States | 34 | 30 | 291 | 370 | |||||||
Angola | 29 | 100 | 482 | 419 | |||||||
Others (1) | 84 | 128 | 386 | 783 | |||||||
Total Revenue | 541 | 712 | 2,088 | 3,169 |
(1) | Other countries represent countries in which we operate that individually had revenues representing less than 10% of total revenues earned for any of the periods presented. |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Norway | 1,326 | 2,258 | |||
Malaysia | 1,070 | 1,809 | |||
Spain | 875 | 2,016 | |||
Brazil | 688 | 1,816 | |||
USA | 658 | 1,266 | |||
Others (2) | 2,042 | 4,051 | |||
Total | 6,659 | 13,216 |
(1) | The fixed assets referred to in the table above exclude assets under construction. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. |
(2) | Other countries represent countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented. |
Successor | Predecessor | |||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||||
Total | 27 | % | 20 | % | 25 | % | 18 | % | ||||
Saudi Aramco | 17 | % | 12 | % | 8 | % | 7 | % | ||||
ConocoPhillips | 14 | % | 9 | % | 6 | % | 5 | % | ||||
Petrobras | 11 | % | 27 | % | 19 | % | 17 | % | ||||
Equinor | 12 | % | 6 | % | 4 | % | 10 | % | ||||
LLOG | 6 | % | 5 | % | 15 | % | 13 | % | ||||
ExxonMobil | — | % | 11 | % | 7 | % | 13 | % |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Accounts receivable, net | 208 | 295 | ||||
Current contract assets (1) | 1 | 7 | ||||
Non-current contract assets (1) | — | — | ||||
Current contract liabilities (deferred revenues) (1) | (12 | ) | (37 | ) | ||
Non-current contract liabilities (deferred revenues) (1) | (9 | ) | (18 | ) |
(In $ millions) | Net Contract Balances | ||
Contract assets at January 1, 2018 (Predecessor) | 7 | ||
Contract liabilities at January 1, 2018 (Predecessor) | (55 | ) | |
Net contract liability at January 1, 2018 (Predecessor) | (48 | ) | |
Decrease due to amortization of revenue that was included in the beginning contract liability balance | 25 | ||
Increase due to cash received, excluding amounts recognized as revenue | (9 | ) | |
Decrease due to recognized during the period but contingent on future performance | 9 | ||
Fresh start adjustment | 32 | ||
Net contract asset at July 1, 2018 (Predecessor) | 9 | ||
Contract assets at July 1, 2018 (Predecessor) | 9 | ||
Contract liabilities at July 1, 2018 (Predecessor) | — | ||
Contract assets at July 2, 2018 (Successor) | 9 | ||
Contract liabilities at July 2, 2018 (Successor) | — | ||
Net contract asset at July 2, 2018 (Successor) | 9 | ||
Decrease due to amortization of revenue that was included in the beginning contract liability balance | — | ||
Increase due to cash received against contract assets recognized at July 2, 2018 (Successor) | (9 | ) | |
Increase due to cash received, excluding amounts recognized as revenue | (21 | ) | |
Decrease due to recognized during the period but contingent on future performance | 1 | ||
Fresh start adjustment | — | ||
Net contract liability at December 31, 2018 (Successor) | (20 | ) | |
Contract assets at December 31, 2018 (Successor) | 1 | ||
Contract liabilities at December 31, 2018 (Successor) | (21 | ) |
(In $ millions) | Net deferred contract costs | ||
Opening deferred contract costs at January 1, 2018 (Predecessor) | 20 | ||
Additional deferred contract costs | 6 | ||
Amortization of deferred contract costs | (15 | ) | |
Fresh start adjustment (1) | (11 | ) | |
Closing deferred contract costs at July 1, 2018 (Predecessor) | — | ||
Additional deferred contract costs | 22 | ||
Amortization of deferred contract costs | (7 | ) | |
Closing deferred contract costs at December 31, 2018 (Successor) | 15 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Related party revenues | 46 | 43 | 110 | 100 | |||||||
Amortization of unfavorable contracts | — | 21 | 43 | 65 | |||||||
External management fees with third parties | — | — | 1 | 19 | |||||||
Early termination fees | — | 8 | 8 | 69 | |||||||
Total | 46 | 72 | 162 | 253 |
(In $ millions) | Net proceeds/recoverable amount | Book value on disposal | Loss | ||||||
Period from July 2, 2018 through December 31, 2018 (Successor): | |||||||||
Total for period ended December 31, 2018 | — | — | — | — | |||||
Period from January 1, 2018 through July 1, 2018 (Predecessor): | |||||||||
Total for period ended July 1, 2018 | — | — | — | ||||||
Year ended December 31, 2017 (Predecessor): | |||||||||
Sale of West Triton | 75 | 109 | (34 | ) | |||||
Sale of West Mischief | 75 | 146 | (71 | ) | |||||
Sale of West Resolute | 75 | 136 | (61 | ) | |||||
Disposal of Sevan Developer contract | — | 75 | (75 | ) | |||||
Sale of West Rigel | 126 | 128 | (2 | ) | |||||
Other | — | 2 | (2 | ) | |||||
Total for year ended December 31, 2017 | 351 | 596 | (245 | ) | |||||
Year ended December 31, 2016 (Predecessor): | |||||||||
Total for year ended December 31, 2016 | — | — | — |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Cash and payment-in-kind interest on debt facilities | (237 | ) | (37 | ) | (286 | ) | (408 | ) | |||
Unwind of discount debt | (24 | ) | — | — | — | ||||||
Loan fee amortization | — | (1 | ) | (27 | ) | (43 | ) | ||||
Capitalized interest | — | — | 28 | 39 | |||||||
Interest expense | (261 | ) | (38 | ) | (285 | ) | (412 | ) |
i. | Cash and payment-in-kind interest on debt facilities |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Senior credit facilities and unsecured bonds | (162 | ) | (116 | ) | (320 | ) | (360 | ) | |||
Less: adequate protection payments | — | 104 | 81 | — | |||||||
New secured notes | (50 | ) | — | — | — | ||||||
Debt of consolidated variable interest entities | (25 | ) | (25 | ) | (47 | ) | (48 | ) | |||
Cash and payment-in-kind interest | (237 | ) | (37 | ) | (286 | ) | (408 | ) |
ii. | Unwind of discount on debt |
iii. | Loan fee amortization |
iv. | Capitalized interest |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018* | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Impairments of Marketable securities (refer to Note 15) | |||||||||||
Seadrill Partners - Common Units | — | — | — | 153 | |||||||
Total impairment of marketable securities investments (reclassification from OCI) | — | — | — | 153 | |||||||
Impairments of Investment in associated companies and joint ventures (refer to Note 18) | |||||||||||
Seadrill Partners - Total direct ownership investments | — | — | 723 | 400 | |||||||
Seadrill Partners - Subordinated units | — | — | 82 | 180 | |||||||
Seadrill Partners - Seadrill member interest and IDRs | — | — | — | 73 | |||||||
SeaMex Limited | — | — | 36 | 76 | |||||||
Itaunas Drilling, Camburi Drilling, and Sahy Drilling | — | — | — | 13 | |||||||
Total impairment of investments in associated companies and joint ventures | — | — | 841 | 742 | |||||||
Total impairment of investments | — | — | 841 | 895 |
• | forecast dayrates for our drilling contracts; |
• | utilization rates; |
• | operating costs and overheads; |
• | estimated annual capital expenditure, cost of rig replacement and/or enhancement programs; |
• | estimated maintenance, inspections or other costs associated with a rig after completion/termination of the contract; |
• | remaining useful life of each rig; and |
• | estimated tax rates. |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Current tax expense: | |||||||||||
Bermuda | — | — | — | — | |||||||
Foreign | 30 | 34 | 56 | 151 | |||||||
Deferred tax expense: | |||||||||||
Bermuda | — | — | — | — | |||||||
Foreign | (22 | ) | (4 | ) | 10 | 48 | |||||
Total tax expense | 8 | 30 | 66 | 199 | |||||||
Effective tax rate | (1.3 | )% | (0.8 | )% | (2.2 | )% | 452.3 | % |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Loss on marketable securities | (64 | ) | (3 | ) | — | — | |||||
(Loss)/gain on derivative financial instruments | (31 | ) | (4 | ) | 11 | (74 | ) | ||||
Reorganization items, net | (9 | ) | (3,365 | ) | (1,337 | ) | — | ||||
Loss on impairment of investments | — | — | (841 | ) | (895 | ) | |||||
Loss on disposals | — | — | (245 | ) | — |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Income taxes at statutory rate | — | — | — | — | |||||||
Effect of change on uncertain tax positions relating to prior year | 49 | 12 | (5 | ) | 28 | ||||||
Effect of unremitted earnings of subsidiaries | (10 | ) | — | 3 | (4 | ) | |||||
Effect of taxable income in various countries | (31 | ) | 18 | 68 | 175 | ||||||
Total tax expense | 8 | 30 | 66 | 199 |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Pensions and stock options | 4 | 4 | |||
Provisions | 28 | 49 | |||
Net operating losses carried forward | 263 | 255 | |||
Other | — | — | |||
Gross deferred tax assets | 295 | 308 | |||
Valuation allowance | (254 | ) | (230 | ) | |
Deferred tax assets, net of valuation allowance | 41 | 78 |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Property, plant and equipment | 49 | 138 | |||
Unremitted Earnings of Subsidiaries | 27 | 37 | |||
Intangibles | 34 | — | |||
Gross deferred tax liabilities | 110 | 175 | |||
Net deferred tax (liability)/asset | (69 | ) | (97 | ) |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Balance at the beginning of the period | 61 | 55 | 44 | 9 | |||||||
Increases as a result of positions taken in prior periods | 69 | 7 | 23 | 35 | |||||||
Increases as a result of positions taken during the current period | 18 | 1 | — | 2 | |||||||
Decreases as a result of positions taken in prior periods | (9 | ) | (2 | ) | (9 | ) | (2 | ) | |||
Decreases as a result of positions taken in the current period | — | — | — | — | |||||||
Decreases due to settlements | (7 | ) | — | (3 | ) | — | |||||
Balance at the end of the period | 132 | 61 | 55 | 44 |
Jurisdiction | Earliest Open Year |
Angola | 2015 |
Nigeria | 2014 |
United States | 2015 |
Norway | 2015 |
Brazil | 2008 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Net loss attributable to the parent | (602 | ) | (3,881 | ) | (2,973 | ) | (181 | ) | |||
Less: Allocation to participating securities | — | — | — | — | |||||||
Net loss available to stockholders | (602 | ) | (3,881 | ) | (2,973 | ) | (181 | ) | |||
Effect of dilution | — | — | — | — | |||||||
Diluted net loss available to stockholders | (602 | ) | (3,881 | ) | (2,973 | ) | (181 | ) |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Basic earnings per share: | |||||||||||
Weighted average number of common shares outstanding | 100 | 504 | 505 | 501 | |||||||
Diluted earnings per share: | |||||||||||
Effect of dilution | — | — | — | — | |||||||
Weighted average number of common shares outstanding adjusted for the effects of dilution | 100 | 504 | 505 | 501 |
Successor | Predecessor | ||||||||||
(In $) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Basic loss per share | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) | |||
Diluted loss per share | (6.02 | ) | (7.71 | ) | (5.89 | ) | (0.36 | ) |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Funding Escrow for NSN (1) | 328 | — | |||
Cash pledged as collateral (2) | 101 | 76 | |||
Other | 32 | 28 | |||
Total restricted cash | 461 | 104 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Seadrill Partners - Common units | 45 | 96 | ||||
Archer | 12 | 28 | ||||
Total marketable securities | 57 | 124 |
Successor | Predecessor | |||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | ||||
Seadrill Partners - Common Units - unrealized loss on marketable securities | (45 | ) | (5 | ) | ||
Archer - unrealized (loss)/gain on marketable securities | (19 | ) | 2 | |||
Total unrealized loss on marketable securities | (64 | ) | (3 | ) |
Predecessor | Predecessor | |||||
(In $ millions) | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||
Seadrill Partners - Common Units - unrealized (loss) / gain on marketable securities | (14 | ) | 17 | |||
Archer - unrealized gain on marketable securities | 28 | — | ||||
Total unrealized gain on marketable securities | 14 | 17 |
Successor | Predecessor | ||||
(In $ millions) | As at December 31, 2018 | As at December 31, 2017 | |||
Favorable drilling and management service contracts to be amortized | 186 | — | |||
Taxes receivable | 50 | 24 | |||
Derivative asset - Interest rate cap (1) | 39 | — | |||
Prepaid Expenses | 32 | 87 | |||
Deferred mobilization cost | 15 | 20 | |||
Reimbursable amounts due from customers | 10 | 15 | |||
Deferred Consideration (2) | — | 80 | |||
Income tax effects of intercompany sales or transfers of assets (3) | — | 84 | |||
Other assets | 26 | 28 | |||
Total other assets | 358 | 338 |
Successor | Predecessor | ||||
(In $ millions) | As at December 31, 2018 | As at December 31, 2017 | |||
Other current assets | 322 | 257 | |||
Other non-current assets | 36 | 81 | |||
Total other assets | 358 | 338 |
Successor | Predecessor | |||||||||||||
As at December 31, 2018 | As at December 31, 2017 | |||||||||||||
(In $ millions) | Gross Carrying Amount | Accumulated amortization | Net carrying amount | Gross Carrying Amount | Accumulated amortization | Net carrying amount | ||||||||
Favorable contracts | ||||||||||||||
Balance at beginning of period | 287 | — | 287 | — | — | — | ||||||||
Amortization of favorable contracts | — | (101 | ) | (101 | ) | — | — | — | ||||||
Balance at end of period | 287 | (101 | ) | 186 | — | — | — |
Period ended December 31, | |||||||||||||
(In $ millions) | 2019 | 2020 | 2021 | 2022 | 2023 and after | Total | |||||||
Amortization of favorable contracts | 153 | 2 | 2 | 2 | 27 | 186 |
Successor | Predecessor | ||||
Ownership percentage | December 31, 2018 | December 31, 2017 | |||
Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b) | (a) | (a) | |||
Seabras Sapura (b) | 50.0 | % | 50.0 | % | |
SeaMex Ltd. ("SeaMex") (b) | 50.0 | % | 50.0 | % |
(a) | Refer to the Seadrill Partners subsidiaries paragraph below for additional information. |
(b) | For transactions with related parties refer to Note 30 - Related party transactions. |
i. | 42% in Seadrill Operating LP: Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. |
ii. | 49% Seadrill Capricorn Holdings LLC: Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. |
iii. | 39% in Seadrill Deepwater Drillship Ltd and 49% indirect interest in Seadrill Mobile Units (Nigeria) Ltd.: Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. |
Successor | Predecessor | |||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||
Seadrill Partners - Direct ownership interests | (82 | ) | 77 | 82 | 216 | |||
Seadrill Partners - Subordinated units | (20 | ) | 22 | 22 | 44 | |||
Seabras Sapura | 24 | 46 | 80 | 62 | ||||
SeaMex | (12 | ) | 4 | — | 20 | |||
Archer | — | — | (10 | ) | (59 | ) | ||
Total share in results from associated companies (net of tax) | (90 | ) | 149 | 174 | 283 |
SDLP | Successor | Predecessor | ||||||
(in $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||
Operating revenues | 426 | 612 | 1,128 | 1,600 | ||||
Net operating income | 100 | 257 | 464 | 818 | ||||
Net income | (127 | ) | 201 | 235 | 546 | |||
Net (loss)/income allocated to SDLP direct ownership interests | (59 | ) | 77 | 93 | 254 | |||
Amortization of basis differences | (23 | ) | — | (11 | ) | (38 | ) | |
Share in results of SDLP direct investments | (82 | ) | 77 | 82 | 216 | |||
Net (loss)/income allocated to SDLP subordinated units | (15 | ) | 22 | 24 | 49 | |||
Amortization of basis differences | (5 | ) | — | (2 | ) | (5 | ) | |
Share in results of SDLP subordinated units | (20 | ) | 22 | 22 | 44 |
Seabras Sapura | Successor | Predecessor | ||||||
(in $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||
Operating revenues | 232 | 241 | 487 | 389 | ||||
Net operating income | 124 | 125 | 244 | 201 | ||||
Net income | 88 | 92 | 160 | 124 | ||||
Seadrill ownership percentage | 50% | 50% | 50% | 50% | ||||
Share of net income | 44 | 46 | 80 | 62 | ||||
Amortization of basis differences | (20 | ) | — | — | — | |||
Total basis difference | (20 | ) | — | — | — | |||
Share in results from Seabras Sapura (net of tax) | 24 | 46 | 80 | 62 |
SeaMex | Successor | Predecessor | ||||||
(in $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||
Operating revenues | 118 | 121 | 239 | 280 | ||||
Net operating income | 40 | 40 | 80 | 119 | ||||
Net income | 4 | 7 | — | 40 | ||||
Seadrill ownership percentage | 50% | 50% | 50% | 50% | ||||
Share of net income | 2 | 4 | — | 20 | ||||
Amortization of basis differences | (14 | ) | — | — | — | |||
Total basis difference | (14 | ) | — | — | — | |||
Share in results from SeaMex (net of tax) | (12 | ) | 4 | — | 20 |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Seadrill Partners - Direct ownership interests | 479 | 857 | |||
Seadrill Partners subsidiaries - Subordinated units | 17 | 97 | |||
Seadrill Partners subsidiaries - IDRs | 54 | 64 | |||
Seabras Sapura | 209 | 353 | |||
SeaMex | 41 | 102 | |||
Total | 800 | 1,473 |
SDLP | Successor | Predecessor | |||
(in $ millions) | December 31, 2018 | December 31, 2017 | |||
Current assets | 1,110 | 1,214 | |||
Non-current assets | 5,076 | 5,317 | |||
Current liabilities | (433 | ) | (546 | ) | |
Non-current liabilities | (3,039 | ) | (3,284 | ) | |
Net Assets | 2,714 | 2,701 | |||
Seadrill share of book equity | 1,399 | 1,398 | |||
Basis difference allocated to rigs | (1,019 | ) | — | ||
Basis difference allocated to contracts | 99 | — | |||
Prior period impairments and other adjustments | — | (541 | ) | ||
SDLP book equity allocated to direct investments | 479 | 857 | |||
SDLP book equity allocated to subordinated units (1) | 17 | 97 |
Seabras Sapura | Successor | Predecessor | |||
(in $ millions) | December 31, 2018 | December 31, 2017 | |||
Current assets | 255 | 467 | |||
Non-current assets | 1,567 | 1,630 | |||
Current liabilities | (599 | ) | (673 | ) | |
Non-current liabilities | (637 | ) | (1,014 | ) | |
Net Assets | 586 | 410 | |||
Seadrill ownership percentage | 50 | % | 50 | % | |
Seadrill share of book equity | 293 | 205 | |||
Shareholder loans held as equity | 125 | 148 | |||
Basis difference allocated to rigs | (387 | ) | — | ||
Basis difference allocated to contracts | 178 | — | |||
Total adjustments | (84 | ) | 148 | ||
Book value of Seadrill investment | 209 | 353 |
SeaMex | Successor | Predecessor | |||
(in $ millions) | December 31, 2018 | December 31, 2017 | |||
Current assets | 253 | 294 | |||
Non-current assets | 977 | 1,036 | |||
Current liabilities | (149 | ) | (222 | ) | |
Non-current liabilities | (627 | ) | (666 | ) | |
Net Assets | 454 | 442 | |||
Seadrill ownership percentage | 50 | % | 50 | % | |
Seadrill share of book equity | 227 | 221 | |||
Prior period impairments and other adjustments | — | (119 | ) | ||
Basis difference allocated to rigs | (357 | ) | — | ||
Basis difference allocated to contracts | 171 | — | |||
Total adjustments | (186 | ) | (119 | ) | |
Book value of Seadrill investment | 41 | 102 |
(In $ millions) | |||
Opening balance as at January 1, 2017 (Predecessor) | 1,531 | ||
Additions | 5 | ||
Capitalized interest and loan related costs | 28 | ||
Disposals (1) | (620 | ) | |
Impairment (2) | (696 | ) | |
Closing balance as at December 31, 2017 (Predecessor) | 248 | ||
Additions | 1 | ||
Closing balance as at July 1, 2018 (Predecessor) | 249 | ||
Fresh Start adjustments (3) | (249 | ) | |
Opening balance as at July 2, 2018 (Successor) | — | ||
Additions | — | ||
Closing balance as at December 31, 2018 (Successor) | — |
(1) | In July 2017, Sevan Drilling and Cosco reached agreement to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset. The Newbuild asset and corresponding construction obligation were derecognized. Refer to Note 9 - Loss on disposals for further information. |
(2) | As part of the Chapter 11 proceedings, the Debtors negotiated and announced a global settlement with various creditors, including Samsung Heavy Industries ("Samsung") and Daewoo Shipbuilding & Marine Engineering ("DSME"). The global settlement included an agreement regarding the allowed claim of the newbuild shipyards Samsung and DSME, and the Debtors’ rejection and recognized termination of the newbuild contracts for the West Dorado, West Draco, West Aquila and the West Libra. As the Plan anticipated the rejection and termination of the newbuild contracts we recognized an impairment of the newbuild assets related to the West Dorado, West Draco, West Aquila and the West Libra, totaling $696 million, in the year ended December 31, 2017 (Predecessor). |
(3) | Adjustment to record the newbuildings at fair value based on the value derived from an income approach compared to the current contractual obligations remaining to be paid. Refer to Note 5 - Fresh Start Accounting for further information. |
(In $ millions) | Cost | Accumulated depreciation | Net book value | |||||||
Opening balance as at January 1, 2017 (Predecessor) | 17,753 | (3,477 | ) | 14,276 | ||||||
Additions | 110 | — | 110 | |||||||
Depreciation | — | (779 | ) | (779 | ) | |||||
Disposals | (528 | ) | 137 | (391 | ) | |||||
Closing balance as at December 31, 2017 (Predecessor) | 17,335 | (4,119 | ) | 13,216 | ||||||
Additions | 117 | — | 117 | |||||||
Depreciation | — | (388 | ) | (388 | ) | |||||
Impairment | (414 | ) | — | (414 | ) | |||||
Closing balance as at July 1, 2018 (Predecessor) | 17,038 | (4,507 | ) | 12,531 | ||||||
Fresh Start adjustments | (10,241 | ) | 4,507 | (5,734 | ) | |||||
Opening balance as at July 2, 2018 (Successor) | 6,797 | — | 6,797 | |||||||
Additions | 93 | — | 93 | |||||||
Depreciation | — | (231 | ) | (231 | ) | |||||
Closing balance as at December 31, 2018 (Successor) | 6,890 | (231 | ) | 6,659 |
(In $ millions) | Cost | Accumulated depreciation | Net book value | |||||||
Opening balance as at January 1, 2017 (Predecessor) | 77 | (36 | ) | 41 | ||||||
Additions | 7 | — | 7 | |||||||
Depreciation | — | (19 | ) | (19 | ) | |||||
Closing balance as at December 31, 2017 (Predecessor) | 84 | (55 | ) | 29 | ||||||
Additions | 9 | — | 9 | |||||||
Depreciation | — | (3 | ) | (3 | ) | |||||
Closing balance as at July 1, 2018 (Predecessor) | 93 | (58 | ) | 35 | ||||||
Fresh Start adjustments | (64 | ) | 58 | (6 | ) | |||||
Opening balance as at July 2, 2018 (Successor) | 29 | — | 29 | |||||||
Additions | 5 | — | 5 | |||||||
Depreciation | — | (5 | ) | (5 | ) | |||||
Closing balance as at December 31, 2018 (Successor) | 34 | (5 | ) | 29 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Secured credit facilities | 5,662 | 5,581 | ||||
New secured notes | 769 | — | ||||
Credit facilities contained within variable interest entities | 655 | 786 | ||||
Unsecured bonds | — | 2,334 | ||||
Total debt principal | 7,086 | 8,701 | ||||
Less: debt discount and fees | (172 | ) | (2 | ) | ||
Carrying value | 6,914 | 8,699 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Debt due within one year | 33 | 509 | ||||
Long-term debt | 6,881 | 485 | ||||
Liabilities subject to compromise | — | 7,705 | ||||
Total debt principal | 6,914 | 8,699 |
• | On filing for Chapter 11, we recorded an impairment of $66 million against unamortized issuance costs on our impaired secured credit facilities and unsecured bonds. This expense was classified within reorganization items (see Note 4 for further details). |
• | Whilst in Bankruptcy, we classified debt liabilities for our impaired secured credit facilities and unsecured bonds in our Consolidated Balance Sheet as liabilities subject to compromise. |
• | During Bankruptcy, we continued to make interest payments on our secured credit facilities. These were treated as adequate protection payments which we recognized as a reduction in the principal balance of secured credit facilities held within "Liabilities subject to compromise". On emergence we expensed the $185 million of adequate protection payments we made during Chapter 11. We classified this expense within reorganization items (see Note 4 for further details). |
• | On emergence from Chapter 11, we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount is unwound over the remaining terms of the debt facilities. For fair value considerations, refer to Note 32 - Fair values of financial instruments. |
• | Amortization payments were deferred until 2020; |
• | Maturities were extended to fall due between June 2022 and December 2024; |
• | There was a 1% increase in margin. |
Facility name | Maturity | Repayments before maturity ($m) | Final Repayment ($m) | Total ($m) | Margin on LIBOR floating interest | Collateral vessels | Book value of collateral vessels ($m) | Notes | ||||
$400 million facility | 4Q 2022 | 51 | 84 | 135 | 3.50% | West Cressida West Callisto West Leda | 157 | (1) | ||||
$2,000 million facility | 1Q 2023 | 268 | 640 | 908 | 3.00% | West Alpha West Venture West Phoenix West Navigator West Epsilon West Elara | 794 | |||||
$440 million facility | 3Q 2023 | 24 | 40 | 64 | 4.25% | West Telesto | 58 | (2) | ||||
$1,450 million facility | 4Q 2023 | 87 | 235 | 322 | 1.2% - 4.0% | West Tellus | 337 | (3) | ||||
$360 million facility | 4Q 2023 | 78 | 132 | 210 | 3.75% | AOD I AOD II AOD III | 201 | (4) | ||||
$300 million facility | 1Q 2024 | 48 | 96 | 144 | 4.00% | West Tucana West Castor | 111 | |||||
$1,750 million facility | 1Q 2024 | 316 | 559 | 875 | 2.5% - 2.9% | Sevan Driller Sevan Brasil Sevan Louisiana | 910 | |||||
$450 million facility | 4Q 2024 | 60 | 205 | 265 | 3.50% | West Eminence | 290 | |||||
$1,500 million facility | 4Q 2024 | 355 | 770 | 1,125 | 2.38% - 3.25% | West Saturn West Neptune West Jupiter | 1,051 | (5) | ||||
$1,350 million facility | 4Q 2024 | 351 | 594 | 945 | 3.00% | West Pegasus West Gemini West Orion | 917 | |||||
$950 million facility | 4Q 2024 | 207 | 359 | 566 | 2.12% - 3% | West Eclipse West Carina | 659 | (6) | ||||
$450 million facility (2015) | 4Q 2024 | 63 | 40 | 103 | 3.85% | West Freedom West Vigilant West Prospero West Ariel | 186 | |||||
Total secured credit facilities | 5,662 |
(1) | In May 2017, we completed the sale of the West Triton to Shelf Drilling. Shelf Drilling subsequently repaid the tranches related to the West Triton in full, amounting to $47 million. |
(2) | In August 2017, Seadrill Partners amended certain credit facilities to insulate itself from Seadrill. This resulted in a $109 million repayment in respect of this facility. Please refer to Note 30 "Related party transactions" for further information. |
(3) | In August 2017, Seadrill Partners completed amendments to this facility to insulate itself from Seadrill Limited and therefore Seadrill no longer provided an indemnity to Seadrill Partners for any payments or obligations related to this facility that are not related to the West Auriga and West Vela. |
(4) | The facility is held by AOD, by which we hold a 67% ownership. |
(5) | This facility has a CIRR fixed interest rate of 2.38% |
(6) | This facility has a CIRR fixed interest rate of 2.12% and guarantee fee to the export credit agency of 1.30%. |
Facility Name | Maturity | Repayments before maturity ($m) | Final Repayment ($m) | Total ($m) | Margin on LIBOR floating interest | Collateral vessels | Book value of collateral vessels ($m) | ||||
$390 million facility | 4Q 2022 | 60 | 144 | 204 | Margin not disclosed | West Taurus | 286 | ||||
$375 million facility | 2Q 2023 | 61 | 149 | 210 | Margin not disclosed | West Hercules | 343 | ||||
$475 million facility | 2Q 2023 | 62 | 179 | 241 | Margin not disclosed | West Linus | 194 | ||||
Total credit facilities within VIEs | 655 |
(In $ millions) | December 31, 2018 | ||
2019 | 33 | ||
2020 | 407 | ||
2021 | 570 | ||
2022 | 973 | ||
2023 | 1,748 | ||
2024 and thereafter | 3,355 | ||
Total debt principal | 7,086 |
• | Aggregated minimum liquidity requirement for the Group: In summary, and as more particularly set out in the credit facilities, to maintain cash and cash equivalents of at least $525 million within the Group at any time during the period from and including the Effective Date to and including 31 December 2018; and $400 million at any time during the period from and including 1 January 2019 to the final maturity date of the credit facilities; |
• | Net leverage ratio: to maintain a ratio of net debt to EBITDA as set out below (which will be tested on each financial quarter commencing with the financial quarter ending on March 31, 2022 until the final maturity date of the credit facilities): |
Twelve months ended | Net leverage ratio | |
March 31, 2022 | 4.5x | |
June 30, 2022 | 4.2x | |
September 30, 2022 | 3.9x | |
December 31, 2022 | 3.7x | |
March 31, 2023 | 3.4x | |
June 30, 2023 | 3.3x | |
September 30, 2023 | 3.1x | |
December 31, 2023 | 3.0x | |
March 31, 2024 | 2.8x | |
June 30, 2024 | 2.7x | |
September 30, 2024 | 2.4x | |
December 31, 2024 | 2.2x |
• | Debt service coverage ratio: in summary to maintain a ratio of EBIDTA to debt services (being all finance charges and principal, as more particularly set out in the credit facilities) equal to or greater than 1:1 (which will be tested on each financial quarter commencing with the financial quarter ending on March 31, 2022 until the final maturity date of the credit facilities). |
• | Debt service coverage ratio is less than 0.8:1 in respect of the applicable period; and/or |
• | Net leverage ratio is greater than: |
Twelve months ended | Net leverage ratio | |
March 31, 2021 | 7.3x | |
June 30, 2021 | 6.6x | |
September 30, 2021 | 6.2x | |
December 31, 2021 | 5.8x |
• | Pay dividends or make certain other restricted payments or investments; |
• | Incur additional indebtedness and issue disqualified shares; |
• | Create liens on assets; |
• | Amalgamate, merge, consolidate or sell substantially all our, NSNCo's, IHCo's, RigCo's and their respective subsidiaries and the guarantors' assets; |
• | Enter into certain transactions with affiliates; |
• | Create restrictions on dividends and other payments by our subsidiaries; and |
• | Guarantee indebtedness by our subsidiaries. |
Successor | Predecessor | ||||
(In $ millions) | As at December 31, 2018 | As at December 31, 2017 | |||
Accrued expenses | 107 | 103 | |||
Taxes Payable | 42 | 70 | |||
Accrued interest expense (1) | 61 | 3 | |||
Employee withheld taxes, social security and vacation payments | 40 | 15 | |||
Unfavorable contracts to be amortized | 27 | 23 | |||
Deferred mobilization revenue (2) | 19 | 55 | |||
Other liabilities | 135 | 66 | |||
Total Other Liabilities (3) | 431 | 335 |
Successor | Predecessor | ||||
(In $ millions) | As at December 31, 2018 | As at December 31, 2017 | |||
Other current liabilities | 310 | 268 | |||
Other non-current liabilities | 121 | 67 | |||
Total Other Liabilities | 431 | 335 |
Successor | Predecessor | |||||||||||||
December 31, 2018 | December 31, 2017 | |||||||||||||
(In $ millions) | Gross Carrying Amount | Accumulated amortization | Net carrying amount | Gross Carrying Amount | Accumulated amortization | Net carrying amount | ||||||||
Unfavorable contracts | — | |||||||||||||
Balance at beginning of period | (66 | ) | — | (66 | ) | (444 | ) | 378 | (66 | ) | ||||
Amortization of unfavorable contracts | — | 39 | 39 | — | 43 | 43 | ||||||||
Balance at end of period | (66 | ) | 39 | (27 | ) | (444 | ) | 421 | (23 | ) |
Period ended December 31, | |||||||||||||
(In $ millions) | 2019 | 2020 | 2021 | 2022 | 2023 and after | Total | |||||||
Amortization of unfavorable contracts | (19 | ) | (1 | ) | (1 | ) | (1 | ) | (5 | ) | (27 | ) |
Issued and fully paid share capital $0.10 par value each | Issued and fully paid share capital $2.00 par value each | Treasury shares held by the Company - $2.00 par value each | |||||||||||||||
Shares | $ millions | Shares | $ millions | Shares | $ millions | ||||||||||||
At January 1, 2016 (Predecessor) | — | — | 493,078,680 | 986 | (318,740 | ) | (1 | ) | |||||||||
Share for debt exchange | — | — | 15,684,340 | 31 | — | — | |||||||||||
Repurchase of shares | — | — | — | — | (4,000,000 | ) | (8 | ) | |||||||||
At December 31, 2016 (Predecessor) | — | — | 508,763,020 | 1,017 | (4,318,740 | ) | (9 | ) | |||||||||
Cancellation of shares | — | — | — | — | 74,660 | — | |||||||||||
At December 31, 2017 (Predecessor) | — | — | 508,763,020 | 1,017 | (4,244,080 | ) | (9 | ) | |||||||||
At July 1, 2018 (Predecessor) | — | — | 508,763,020 | 1,017 | (4,244,080 | ) | (9 | ) | |||||||||
Cancellation of Predecessor Company common stock | — | — | (508,763,020 | ) | (1,017 | ) | 4,244,080 | 9 | |||||||||
Successor Company share issuance | 100,000,000 | 10 | — | — | — | — | |||||||||||
At July 2, 2018 (Successor) | 100,000,000 | 10 | — | — | — | — | |||||||||||
At December 31, 2018 (Successor) | 100,000,000 | 10 | — | — | — | — |
(In $ millions) | North Atlantic Drilling Ltd | Sevan Drilling Limited | Asia Offshore Drilling Ltd | Ship Finance International Ltd VIEs | Seadrill Nigeria Operations Limited | Total | ||||||||||||
December 31, 2015 (Predecessor) | 179 | 282 | 140 | 14 | — | 615 | ||||||||||||
Changes in 2016 | 7 | — | — | (112 | ) | 6 | (99 | ) | ||||||||||
Net income attributable to non-controlling interest in 2016 | (21 | ) | 9 | 9 | 29 | — | 26 | |||||||||||
December 31, 2016 (Predecessor) | 165 | 291 | 149 | (69 | ) | 6 | 542 | |||||||||||
Changes in 2017 | — | — | — | (14 | ) | — | (14 | ) | ||||||||||
Net income attributable to non-controlling interest in 2017 | (89 | ) | (65 | ) | — | 24 | 1 | (129 | ) | |||||||||
December 31, 2017 | 76 | 226 | 149 | (59 | ) | 7 | 399 | |||||||||||
Adoption of new accounting standard ASU 2016-16 - Income Taxes | (25 | ) | — | — | — | — | (25 | ) | ||||||||||
Net income attributable to non-controlling interest in period from January 1, 2018 to July 1, 2018 | (160 | ) | (10 | ) | 1 | 7 | 2 | (160 | ) | |||||||||
Redeemable non-controlling interest | — | — | (150 | ) | — | — | (150 | ) | ||||||||||
July 1, 2018 (Predecessor) | (109 | ) | 216 | — | (52 | ) | 9 | 64 | ||||||||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | 109 | (216 | ) | — | — | — | (107 | ) | ||||||||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | — | — | — | 199 | (2 | ) | 197 | |||||||||||
July 2, 2018 (Successor) | — | — | — | 147 | 7 | 154 | ||||||||||||
Net income attributable to non-controlling interest in period from July 2, 2018 to December 31, 2018 | — | — | — | (2 | ) | — | (2 | ) | ||||||||||
December 31, 2018 | — | — | — | 145 | 7 | 152 |
(In $ millions) | Asia Offshore Drilling Ltd | |||
As at December 31, 2017 (Predecessor) | — | |||
Reclassification from non-controlling interest | 150 | |||
Fair value adjustment on initial recognition | (127 | ) | ||
Net income attributable to redeemable non-controlling interest | 2 | |||
Fresh start fair value adjustment | 5 | |||
As at July 1, 2018 (Predecessor) | 30 | |||
As at July 2, 2018 (Successor) | 30 | |||
Fair value adjustment | 9 | |||
Net loss attributable to redeemable non-controlling interest | (1 | ) | ||
As at December 31, 2018 (Successor) | 38 |
(In $ millions) | Unrealized gain on marketable securities | Unrealized gain on foreign exchange | Actuarial gain/(loss) relating to pension | Share in unrealized gains from associated companies | Change in unrealized gain on interest rate swaps in VIEs | Change in debt component on Archer facility | Total | |||||||||||||
Balance at December 31, 2015 (Predecessor) | (151 | ) | 36 | (38 | ) | 11 | — | — | (142 | ) | ||||||||||
Other comprehensive income before reclassifications | 168 | — | 15 | 12 | — | — | 195 | |||||||||||||
Balance as at December 31, 2016 (Predecessor) | 17 | 36 | (23 | ) | 23 | — | — | 53 | ||||||||||||
Other comprehensive income before reclassifications | 14 | — | (3 | ) | 2 | 2 | — | 15 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | — | — | (10 | ) | — | — | (10 | ) | |||||||||||
Balance as at December 31, 2017 (Predecessor) | 31 | 36 | (26 | ) | 15 | 2 | — | 58 | ||||||||||||
Adoption of accounting standard update | (31 | ) | — | — | — | — | — | (31 | ) | |||||||||||
Balance as at January 1, 2018 (Predecessor) | — | 36 | (26 | ) | 15 | 2 | — | 27 | ||||||||||||
Reset accumulated other comprehensive (loss)/income | — | (36 | ) | 26 | (15 | ) | (2 | ) | — | (27 | ) | |||||||||
Balance as at July 1, 2018 (Predecessor) | — | — | — | — | — | — | — | |||||||||||||
Other comprehensive income before reclassifications | — | — | 1 | (5 | ) | — | (3 | ) | (7 | ) | ||||||||||
Balance as at December 31, 2018 (Successor) | — | — | 1 | (5 | ) | — | (3 | ) | (7 | ) |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Accrued pension liabilities - Non-current liabilities | 4 | 6 | |||
Less: Deferred tax (Asset) | (1 | ) | (2 | ) | |
Shareholders' equity | 3 | 4 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Service cost | 2 | 1 | 2 | 7 | |||||||
Interest cost on prior years’ benefit obligation | 1 | — | 2 | 3 | |||||||
Gross pension cost for the year | 3 | 1 | 4 | 10 | |||||||
Expected return on plan assets | (1 | ) | — | (1 | ) | (4 | ) | ||||
Net pension cost for the year | 2 | 1 | 3 | 6 | |||||||
Social security cost | — | — | — | 1 | |||||||
Amortization of actuarial gains/losses | — | — | — | 1 | |||||||
Impact of settlement/curtailment funded status | — | — | (1 | ) | (1 | ) | |||||
Total net pension cost | 2 | 1 | 2 | 7 |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Projected benefit obligations at end of period | 37 | 38 | |||
Plan assets at market value | (33 | ) | (33 | ) | |
Accrued pension liability exclusive social security | 4 | 5 | |||
Social security related to pension obligations | — | 1 | |||
Accrued pension liabilities | 4 | 6 |
Successor | Predecessor | ||||||
(In $ millions) | December 31, 2018 | June 30, 2018 | December 31, 2017 | ||||
Projected benefit obligations at beginning of period | 36 | 38 | 60 | ||||
Interest cost | 1 | — | 2 | ||||
Service cost | 1 | 1 | 2 | ||||
Benefits paid | (1 | ) | (1 | ) | (2 | ) | |
Change in unrecognized actuarial gain | 2 | (2 | ) | (3 | ) | ||
Settlement | — | — | (24 | ) | |||
Foreign currency translations | (2 | ) | — | 3 | |||
Projected benefit obligations at end of period | 37 | 36 | 38 |
Successor | Predecessor | ||||||
(In $ millions) | December 31, 2018 | June 30, 2018 | December 31, 2017 | ||||
Fair value of plan assets at beginning of year | 33 | 33 | 58 | ||||
Estimated return | 1 | — | 1 | ||||
Contribution by employer | — | 2 | 1 | ||||
Administration charges | — | — | — | ||||
Benefits paid | (1 | ) | (1 | ) | (2 | ) | |
Actuarial gain | 2 | (1 | ) | (5 | ) | ||
Settlement | — | — | (23 | ) | |||
Foreign currency translations | (2 | ) | — | 3 | |||
Fair value of plan assets at end of year | 33 | 33 | 33 |
Successor | Predecessor | ||||||||||
Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | ||||||||
Rate of compensation increase at the end of year | 2.75 | % | 2.50 | % | 2.50 | % | 2.50 | % | |||
Discount rate at the end of year | 2.60 | % | 2.40 | % | 2.40 | % | 2.10 | % | |||
Prescribed pension index factor | 2.00 | % | 2.00 | % | 1.50 | % | 1.20 | % | |||
Expected return on plan assets for the year | 2.60 | % | 2.40 | % | 2.40 | % | 3.00 | % | |||
Employee turnover | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | |||
Expected increases in Social Security Base | 2.50 | % | 2.25 | % | 2.25 | % | 2.25 | % |
Successor | Predecessor | ||||
December 31, 2018 | December 31, 2017 | ||||
Equity securities | 12.7 | % | 10.6 | % | |
Debt securities | 70.0 | % | 66.1 | % | |
Real estate | 9.9 | % | 8.8 | % | |
Money market | 6.9 | % | 13.5 | % | |
Other | 0.5 | % | 1.0 | % | |
Total | 100.0 | % | 100.0 | % |
(In $ millions) | December 31, 2018 | |
2019 | 2 | |
2020 | 2 | |
2021 | 2 | |
2022 | 3 | |
2023 | 3 | |
2024-2028 | 13 | |
Total payments expected during the next 10 years | 25 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Management fee revenues (a) | 41 | 41 | 84 | 72 | |||||||
In country support services revenues (b) | — | 1 | 23 | 25 | |||||||
Related party inventory sales | 1 | 1 | — | 1 | |||||||
Other | 4 | — | 3 | 2 | |||||||
Total related party operating revenues (c) | 46 | 43 | 110 | 100 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
In country support services expenses (d) | — | 1 | 8 | 14 | |||||||
Related party inventory purchases | — | 3 | 3 | 1 | |||||||
Other related party operating expenses (e) | 1 | 3 | 3 | 5 | |||||||
Net bareboat charter arrangements (f) | — | — | (1 | ) | (7 | ) | |||||
Total related party operating expenses | 1 | 7 | 13 | 13 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Interest income (g) | 15 | 12 | 34 | 29 | |||||||
Gains on related party derivatives (h) | — | — | 1 | 1 | |||||||
Interest income recognized on deferred contingent consideration (i) | 1 | 2 | 3 | 4 | |||||||
Total related party financial items | 16 | 14 | 38 | 34 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Related party loans and interest (j) | 476 | 495 | ||||
Deferred consideration arrangements (k) | 59 | 52 | ||||
Convertible bond (l) | 43 | 53 | ||||
Trading balances (m) | 138 | 164 | ||||
Total related party receivables | 716 | 764 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
SeaMex seller's credit and loans receivable | 398 | 369 | ||||
Seabras loans receivable | 78 | 101 | ||||
Seadrill Partners - West Vencedor facility | — | 25 | ||||
Total related party loans and interest | 476 | 495 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
West Vela - Mobilization receivable | 31 | 44 | ||||
West Vela - Share of dayrate | 27 | 4 | ||||
West Polaris | 1 | 5 | ||||
Total deferred consideration receivable | 59 | 53 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | December 31, 2017 | December 31, 2016 | |||||||
West Polaris earn out realized | — | — | 13 | 8 | |||||||
West Vela earn out realized | — | 7 | 14 | 13 | |||||||
Total contingent consideration recognized | — | 7 | 27 | 21 |
Successor | Predecessor | |||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | |||||
Fair value (loss) / gain of Archer debt component | (3 | ) | 2 | 1 | ||||
Fair value (loss) / gain of Archer embedded conversion option | (9 | ) | 2 | (4 | ) |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Related party loans payable (n) | 222 | 314 | ||||
Trading balances (o) | 39 | 10 | ||||
Total related party liabilities | 261 | 324 |
Successor | Predecessor | |||||
(In $ millions) | December 31, 2018 | December 31, 2017 | ||||
Amount due from related parties - current | 177 | 217 | ||||
Amount due from related parties - non-current | 539 | 547 | ||||
Amounts due to related parties - current | (39 | ) | (10 | ) | ||
Long-term debt due to related parties | (222 | ) | (314 | ) | ||
Total net related party balances | 455 | 440 |
(In $ millions) | Principal outstanding | Hedging instruments - see below | Net exposure | Impact of 1% increase in rates | ||||||||
Senior Credit Facilities | 5,662 | 4,500 | 1,162 | 15 | ||||||||
Debt contained within VIEs | 655 | — | 655 | 6 | ||||||||
Total floating rate debt obligations | 6,317 | 4,500 | 1,817 | 21 | ||||||||
New Secured Notes | 769 | — | — | — | ||||||||
Less: Cash and Restricted Cash | (2,003 | ) | — | (2,003 | ) | (20 | ) | |||||
Net debt | 5,083 | 4,500 | (186 | ) | 1 |
(In $ millions) | Amount | Impact of 1% point increase in rates (before impact of interest rate cap) | Less: impact of LIBOR CAP | Impact of 1% point increase in rates (after impact of interest rate cap) | ||||||||
Senior Credit Facility debt - hedged | 4,500 | 45 | (42 | ) | 3 | |||||||
Senior Credit Facility debt - not hedged | 1,162 | 12 | — | 12 | ||||||||
Total Senior Credit Facility Debt | 5,662 | 57 | (42 | ) | 15 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
(Loss)/gain recognized in the Consolidated Statement of Operations relating to derivative financial instruments | |||||||||||
Interest rate cap agreement | (22 | ) | (6 | ) | — | — | |||||
Archer convertible debt instrument | (9 | ) | 2 | (4 | ) | — | |||||
Interest rate swaps not designated for hedge accounting | — | — | (31 | ) | (48 | ) | |||||
Cross currency swaps not designated for hedge accounting | — | — | 46 | (20 | ) | ||||||
Other | — | — | — | (6 | ) | ||||||
Loss/(gain) on derivative financial instruments | (31 | ) | (4 | ) | 11 | (74 | ) |
(In $ millions) | Maturity date | Applicable rate | Outstanding principal - December 31, 2018 | As at December 31, 2018 | As at December 31, 2017 | ||||
Interest rate cap | June 2023 | 2.87% LIBOR cap | 4,500 | 39 | — | ||||
Interest rate hedge agreement in the VIE | October 2018 - December 2018 | 1.77% - 2.01% | — | — | — | ||||
39 | — |
Successor | Predecessor | ||||||||||
December 31, 2018 | December 31, 2017 | ||||||||||
(In $ millions) | Fair value | Carrying value | Fair value | Carrying value | |||||||
Assets | |||||||||||
Related party loans receivable (1) (Level 2) | 476 | 476 | 470 | 470 | |||||||
Liabilities | |||||||||||
Secured credit facilities (Level 2) | 5,388 | 5,519 | N/A (2) | 5,581 | |||||||
Credit facilities contained within variable interest entities (Level 2) | 612 | 626 | N/A (2) | 786 | |||||||
New secured notes (Level 1) | 770 | 769 | — | — | |||||||
Unsecured bonds (Level 2) | — | — | N/A (2) | 2,334 | |||||||
Related party loans payable by the VIE (Level 2) | 222 | 226 | 218 | 314 |
Successor | Predecessor | ||||||||||
December 31, 2018 | December 31, 2017 | ||||||||||
(In $ millions) | Fair value | Carrying value | Fair value | Carrying value | |||||||
Assets | |||||||||||
Cash and cash equivalents (Level 1) | 1,542 | 1,542 | 1,255 | 1,255 | |||||||
Restricted cash (Level 1) | 461 | 461 | 104 | 104 | |||||||
Marketable securities (Level 1) | 57 | 57 | 124 | 124 | |||||||
Related party loans receivable - Archer convertible debt (Level 3) | 43 | 43 | 53 | 53 | |||||||
Interest rate cap (Level 2) | 39 | 39 | — | — | |||||||
Temporary equity | |||||||||||
Redeemable non-controlling interest (Level 3) | 38 | 38 | — | — |
Successor | Predecessor | ||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||
Guarantees in favor of customers 1, 2, 3 | 7 | 203 | |||
Guarantees in favor of banks 4 | 165 | 698 | |||
Guarantees in favor of suppliers 1, 3 | 1 | 11 | |||
Total | 173 | 912 |
(1) | Guarantees to Seadrill Partners - Within guarantees in favor of customers are guarantees provided on behalf of Seadrill Partners of $7 million (Predecessor 2017: $165 million). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of $1 million (Predecessor 2017: $1 million). Refer to Note 30 - Related party transactions for more information. |
(2) | Guarantees to SeaMex - Within guarantees in favor of customers are guarantees provided on behalf of SeaMex being nil for the Successor 2018 (Predecessor 2017: $30 million). Refer to Note 30 - Related party transactions for more information. |
(3) | Guarantees to Archer - Within guarantees provided to customers are guarantees provided on behalf of Archer being nil for the Successor 2018 (Predecessor 2017: $8 million). Guarantees in favor of suppliers include guarantees on behalf of Archer being nil for the Successor 2018 (Predecessor 2017: GBP 7 million ($10 million)). Refer to Note 30 - Related party transactions for more information. |
(4) | Guarantees to Seabras Sapura -Within guarantees in favor of banks are guarantees provided on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $165 million (Predecessor 2017: $698 million). Refer to Note 30 - Related party transactions for more information. |
Year | (In $ millions) | |
2019 | 11 | |
2020 | 9 | |
2021 | 9 | |
2022 | 5 | |
2023 | 3 | |
2024 and thereafter | 1 | |
Total | 38 |
Unit | Effective from | Sale value (In $ millions) | First repurchase option (In $ millions) | Month of first repurchase option | Last repurchase option (1) (In $ millions) | Month of last repurchase Option (1) | ||||||
West Taurus | Nov 2008 | 850 | 418 | Feb 2015 | 154 | Dec 2024 | ||||||
West Hercules | Oct 2008 | 850 | 580 | Aug 2011 | 138 | Dec 2024 | ||||||
West Linus | June 2013 | 600 | 370 | Jun 2018 | 170 | May 2029 |
(1) | Ship Finance has a right to require us to purchase the West Linus rig on the 15th anniversary for the price of $86 million if we don’t exercise the final repurchase option. |
(In $ thousands) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||
West Taurus | 112 | 102 | 101 | 96 | 96 | 179 | ||||||
West Hercules | 117 | 101 | 100 | 96 | 96 | 180 | ||||||
West Linus | 158 | 119 | 99 | 99 | 92 | 171 |
Successor | Predecessor | ||||||||||||||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||||||||||||||
SFL Deepwater Limited | SFL Hercules Limited | SFL Linus Limited | SFL Deepwater Limited | SFL Hercules Limited | SFL Linus Limited | ||||||||||||
Name of unit | West Taurus | West Hercules | West Linus | West Taurus | West Hercules | West Linus | |||||||||||
Investment in finance lease | 320 | 307 | 397 | 335 | 326 | 431 | |||||||||||
Amount due from related parties | — | — | — | 4 | 4 | — | |||||||||||
Other assets (1) | 2 | — | — | 6 | 6 | 8 | |||||||||||
Total assets | 322 | 307 | 397 | 345 | 336 | 439 | |||||||||||
Short-term interest-bearing debt | 16 | 8 | 9 | 226 | 27 | 48 | |||||||||||
Long-term interest-bearing debt | 179 | 193 | 221 | — | 224 | 261 | |||||||||||
Other liabilities | 2 | — | — | 3 | 2 | — | |||||||||||
Short-term trading balances due to related parties | — | 10 | 21 | — | — | 4 | |||||||||||
Long-term debt due to related parties (2) | 84 | 62 | 76 | 113 | 80 | 121 | |||||||||||
Total liabilities | 281 | 273 | 327 | 342 | 333 | 434 | |||||||||||
Equity | 41 | 34 | 70 | 3 | 3 | 5 |
(1) | Includes cash balance of $2 million as at December 31, 2018 (Successor) (December 31, 2017 (Predecessor): $17 million). These have been consolidated into the Consolidated Balance Sheet within "Cash and cash equivalents". |
(2) | We present balances due to/from Ship Finance on a net basis, due to the fact that there is a right to offset established in the long-term loan agreements, and the balances are intended to be settled on a net basis. |
Successor | Predecessor | ||||||||||||||||
(In $ millions) | December 31, 2018 | December 31, 2017 | |||||||||||||||
SFL Deepwater Limited | SFL Hercules Limited | SFL Linus Limited | SFL Deepwater Limited | SFL Hercules Limited | SFL Linus Limited | ||||||||||||
Debt principal outstanding | 113 | 80 | 121 | 113 | 80 | 121 | |||||||||||
Debt discount | (25 | ) | (18 | ) | (45 | ) | — | — | — | ||||||||
Trading asset positions held against long-term loan | (4 | ) | — | — | — | — | — | ||||||||||
Long-term loan due to related parties | 84 | 62 | 76 | 113 | 80 | 121 |
Successor | Predecessor | ||||||||||
(In $ millions) | Period from July 2, 2018 through December 31, 2018 | Period from January 1, 2018 through July 1, 2018 | Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||
Non-cash investing activities | |||||||||||
Sale of rigs and equipment (1) | — | — | 103 | — | |||||||
Increase of investment in Seadrill Mobile Units (Nigeria) Ltd (2) | — | — | — | (6 | ) | ||||||
Proceeds from repayment of short-term loan from related parties due to Seadrill Partners insulation from Seadrill Limited (3) | — | — | 109 | — | |||||||
Derecognition of Sevan Developer newbuild asset (4) | — | — | 620 | — | |||||||
Derecognition of Sevan Developer construction obligation (4) | — | — | (526 | ) | — | ||||||
Non-cash financing activities | |||||||||||
Repayment of debt following sale of rigs and equipment (1) | — | — | (103 | ) | — | ||||||
Increase in non-controlling interest in Seadrill Nigeria Operations Ltd (2) | — | — | — | 7 | |||||||
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited (3) | — | — | (109 | ) | — | ||||||
Conversion of convertible bond into shares, decrease in long term debt (5) | — | — | — | (105 | ) | ||||||
Conversion of convertible bond into shares, net increase in equity (5) | — | — | — | 58 | |||||||
Proceeds from long-term loans (6) | — | — | — | 150 | |||||||
Long term loans netted-down with related party balances (6) | — | — | — | (150 | ) | ||||||
Dividend to non-controlling interests in VIEs (7) | — | — | (14 | ) | (113 | ) |
(1) | During the year ended December 31, 2017 (Predecessor), we completed the sale of the West Triton, West Resolute and West Mischief to Shelf Drilling, receiving cash consideration of $122 million. This comprised sales value of $225 million offset by $103 million of debt repayments. Refer to Note 9 - Loss on disposals for further information. |
(2) | During the year ended December 31, 2016 (Predecessor), our wholly owned subsidiary Seadrill UK Ltd. acquired a 10% interest that an unrelated party, HH Global Alliance Investments Limited (“HHL”) held in Seadrill Mobile Units (Nigeria) Ltd, the service company for West Capella, for a notional value of $6 million. Simultaneously HHL acquired from Seadrill UK Ltd. a 49% interest in Seadrill Nigeria Operations Limited, the service company for West Jupiter for a notional value of $6 million. The impact of these transactions was to increase Seadrill’s direct ownership interest in Seadrill Partners by $6 million, and to recognize HHL’s non-controlling interest in Seadrill Nigeria Operations Ltd of $6 million. |
(3) | During the year ended December 31, 2017 (Predecessor), Seadrill Partners amended certain credit facilities to insulate itself from Seadrill Limited. This resulted in a $109 million repayment in respect to the $440 million secured debt facility. Refer to Note 30 - Related party transactions for further information on related party transactions. |
(4) | During the year ended December 31, 2017 (Predecessor), Sevan and Cosco agreed to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a contract termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset and therefore derecognized the newbuild asset, which was held at $620 million, construction obligation held at $526 million, and accrued interest and other liabilities held at $19 million, resulting in a net loss on disposal of $75 million. Refer to Note 9 – Loss on disposals for further information. |
(5) | In May 2016 (Predecessor), we entered into a privately negotiated exchange agreement with certain holders of our outstanding 5.625% (subsequently increased to 6.125%) Senior Notes due in 2017 (the "2017 Notes"), pursuant to which we agreed to issue a total of 8,184,340 new shares of our common stock, par value $2.00 per share, in exchange for $55 million principal amount of the 2017 Notes. Settlement occurred on May 20, 2016, upon which we had a total of 500,944,280 shares of our common stock issued and outstanding. |
(6) | During the year ended December 31, 2016 (Predecessor), the Ship Finance VIEs that we consolidate withdrew bank loans and made loans to the related party Ship Finance International. These balances are presented net in the Consolidated Statement of Cash Flows. Refer to Note 22 "Long-term debt" for further information. |
(7) | During the years ended December 31, 2017 and December 31, 2016, the Ship Finance VIEs declared dividends payable to Ship Finance. Refer to Note 35 - Variable interest entities for further information. |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and |
• | Provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. |
Note | 2018 | 2017 | 2016 | |||||||||||
Operating revenues | ||||||||||||||
Contract revenues | $ | 797.5 | $ | 1,007.7 | $ | 1,356.4 | ||||||||
Reimbursable revenues | 31.2 | 17.7 | 32.8 | |||||||||||
Other revenues | 7 | * | 209.5 | 103.0 | 211.1 | |||||||||
Total operating revenues | 1,038.2 | 1,128.4 | 1,600.3 | |||||||||||
Operating expenses | ||||||||||||||
Vessel and rig operating expenses | * | (278.2 | ) | (345.4 | ) | (373.9 | ) | |||||||
Depreciation | 11 | (280.3 | ) | (274.9 | ) | (266.3 | ) | |||||||
Amortization of favorable contracts | 10 | (45.1 | ) | (74.4 | ) | (70.6 | ) | |||||||
Reimbursable expenses | (28.6 | ) | (16.1 | ) | (30.2 | ) | ||||||||
General and administrative expenses | * | (45.8 | ) | (44.8 | ) | (41.2 | ) | |||||||
Total operating expenses | (678.0 | ) | (755.6 | ) | (782.2 | ) | ||||||||
Other operating items | ||||||||||||||
Loss on impairment of goodwill | (3.2 | ) | — | — | ||||||||||
Revaluation of contingent consideration | — | 89.9 | — | |||||||||||
Gain on sale of assets | — | 0.8 | — | |||||||||||
Total other operating items | 8 | (3.2 | ) | 90.7 | — | |||||||||
Operating income | 357.0 | 463.5 | 818.1 | |||||||||||
Financial items | ||||||||||||||
Interest income | 47.1 | 15.7 | 11.5 | |||||||||||
Interest expense | * | (263.7 | ) | (179.1 | ) | (180.0 | ) | |||||||
Gain/(loss) on derivative financial instruments | 15 | * | 24.9 | (13.9 | ) | (18.0 | ) | |||||||
Currency exchange gain | 0.2 | 0.9 | 0.6 | |||||||||||
Other financial expenses | (4.8 | ) | (11.5 | ) | — | |||||||||
Total financial items | (196.3 | ) | (187.9 | ) | (185.9 | ) | ||||||||
Income before income taxes | 160.7 | 275.6 | 632.2 | |||||||||||
Income tax expense | 6 | (86.7 | ) | (40.3 | ) | (86.5 | ) | |||||||
Net income | 74.0 | 235.3 | 545.7 | |||||||||||
Net income attributable to the non-controlling interest | 17.9 | 94.1 | 264.7 | |||||||||||
Net income attributable to Seadrill Partners LLC owners | 56.1 | 141.2 | 281.0 | |||||||||||
Earnings per unit (common and subordinated) | ||||||||||||||
Common unitholders | $ | 0.75 | $ | 1.88 | $ | 3.20 | ||||||||
Subordinated unitholders | $ | — | $ | — | $ | 2.28 |
Note | 2018 | 2017 | |||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 841.6 | $ | 848.6 | |||||
Accounts receivables, net | 9 | 150.9 | 254.1 | ||||||
Amount due from related party | 14 | 6.4 | 24.2 | ||||||
Other current assets | 10 | 110.6 | 86.8 | ||||||
Total current assets | 1,109.5 | 1,213.7 | |||||||
Non-current assets: | |||||||||
Drilling units | 11 | 5,005.6 | 5,170.9 | ||||||
Goodwill | 3 | — | 3.2 | ||||||
Deferred tax assets | 6 | 7.7 | 9.5 | ||||||
Other non-current assets | 10 | 62.6 | 133.5 | ||||||
Total non-current assets | 5,075.9 | 5,317.1 | |||||||
Total assets | $ | 6,185.4 | $ | 6,530.8 | |||||
LIABILITIES AND MEMBERS' CAPITAL | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt | 12 | $ | 162.9 | $ | 162.9 | ||||
Current portion of long-term related party debt | 14 | — | 24.7 | ||||||
Trade accounts payable and accruals | 25.7 | 37.4 | |||||||
Current portion of deferred and contingent consideration to related party | 14 | 37.5 | 41.7 | ||||||
Related party payable | 14 | 126.3 | 157.0 | ||||||
Other current liabilities | 13 | 80.2 | 121.8 | ||||||
Total current liabilities | 432.6 | 545.5 | |||||||
Non-current liabilities: | |||||||||
Long-term debt | 12 | 2,896.2 | 3,180.2 | ||||||
Deferred and contingent consideration to related party | 14 | 21.5 | 46.0 | ||||||
Deferred tax liability | 6 | 0.4 | 1.5 | ||||||
Other non-current liabilities | 13 | 120.5 | 55.8 | ||||||
Total non-current liabilities | 3,038.6 | 3,283.5 | |||||||
Commitments and contingencies (see Note 17) | |||||||||
Equity | |||||||||
Members' Capital: | |||||||||
Common unitholders (issued 75,278,250 units as at December 31, 2018 and December 31, 2017) | 1,224.8 | 1,208.9 | |||||||
Subordinated unitholders (issued 16,543,350 units as at December 31, 2018 and December 31, 2017) | 104.9 | 94.8 | |||||||
Total members' capital | 1,329.7 | 1,303.7 | |||||||
Non-controlling interest | 1,384.5 | 1,398.1 | |||||||
Total equity | 2,714.2 | 2,701.8 | |||||||
Total liabilities and equity | $ | 6,185.4 | $ | 6,530.8 |
2018 | 2017 | 2016 | ||||||||||
Cash Flows from Operating Activities | ||||||||||||
Net income | $ | 74.0 | $ | 235.3 | $ | 545.7 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation | 280.3 | 274.9 | 266.3 | |||||||||
Amortization of deferred loan charges | 12.4 | 12.6 | 11.4 | |||||||||
Amortization of favorable contracts | 45.1 | 74.4 | 70.6 | |||||||||
Gain on disposal of PPE | — | (0.8 | ) | — | ||||||||
Loss on impairment of goodwill | 3.2 | — | — | |||||||||
Unrealized gain related to derivative financial instruments | (38.9 | ) | (25.8 | ) | (32.2 | ) | ||||||
Unrealized foreign exchange loss/(gain) | 0.5 | (3.5 | ) | (9.4 | ) | |||||||
Payment for long term maintenance | (91.6 | ) | (54.9 | ) | (48.0 | ) | ||||||
Gain on revaluation of contingent consideration | — | (89.9 | ) | — | ||||||||
Deferred tax expense | 0.7 | 4.6 | 19.2 | |||||||||
Accretion of discount on deferred consideration | 5.3 | 13.2 | 17.3 | |||||||||
Changes in operating assets and liabilities, net of effect of acquisitions | ||||||||||||
Trade accounts receivable | 103.2 | (1.6 | ) | 38.7 | ||||||||
Prepaid expenses and accrued income | (3.6 | ) | (4.0 | ) | 8.6 | |||||||
Trade accounts payable | (11.7 | ) | 5.4 | 7.8 | ||||||||
Related party balances | (12.9 | ) | 16.1 | (64.3 | ) | |||||||
Other assets | 15.5 | 34.4 | 70.0 | |||||||||
Other liabilities | 56.5 | (4.9 | ) | (12.1 | ) | |||||||
Changes in deferred revenue | (3.4 | ) | (9.7 | ) | (17.0 | ) | ||||||
Other, net | (0.5 | ) | 0.4 | 1.2 | ||||||||
Net cash provided by operating activities | $ | 434.1 | $ | 476.2 | $ | 873.8 | ||||||
Cash Flows from Investing Activities | ||||||||||||
Additions to drilling units | (23.4 | ) | (66.7 | ) | (13.1 | ) | ||||||
Proceeds from sale of assets | — | 16.2 | — | |||||||||
Payment received from loans granted to related parties | — | 39.4 | 103.6 | |||||||||
Insurance refund | — | — | 7.1 | |||||||||
Net cash (used in) / provided by investing activities | $ | (23.4 | ) | $ | (11.1 | ) | $ | 97.6 |
2018 | 2017 | 2016 | ||||||||||
Cash Flows from Financing Activities | ||||||||||||
Repayments of long term debt | (296.4 | ) | (215.0 | ) | (105.3 | ) | ||||||
Debt fees paid | — | (3.8 | ) | (0.3 | ) | |||||||
Repayments of related party debt | (24.7 | ) | (66.0 | ) | (249.5 | ) | ||||||
Contingent consideration paid | (34.0 | ) | (40.0 | ) | (59.7 | ) | ||||||
Cash distributions | (55.4 | ) | (60.1 | ) | (107.3 | ) | ||||||
Repayment of shareholder loan | (6.2 | ) | — | — | ||||||||
Net cash (used in) / provided by financing activities | $ | (416.7 | ) | $ | (384.9 | ) | $ | (522.1 | ) | |||
Effect of exchange rate changes on cash | (1.0 | ) | 0.8 | (0.7 | ) | |||||||
Net (decrease) / increase in cash and cash equivalents | (7.0 | ) | 81.0 | 448.6 | ||||||||
Cash and cash equivalents at beginning of the year | 848.6 | 767.6 | 319.0 | |||||||||
Cash and cash equivalents at the end of year | $ | 841.6 | $ | 848.6 | $ | 767.6 | ||||||
Supplementary disclosure of cash flow information | ||||||||||||
Interest and other financial items paid | $ | 261.3 | $ | 200.3 | $ | 196.4 | ||||||
Taxes paid | 24.9 | 42.9 | 49.0 |
Members’ Capital | ||||||||||||||||||||
Common Units | Subordinated Units | Total Before Non- Controlling interest | Non- controlling Interest | Total Equity | ||||||||||||||||
Consolidated balance at December 31, 2015 | $ | 945.5 | $ | 18.8 | $ | 964.3 | $ | 1,133.1 | $ | 2,097.4 | ||||||||||
Net income | 230.4 | 50.6 | 281.0 | 264.7 | 545.7 | |||||||||||||||
Cash distributions | (52.7 | ) | — | (52.7 | ) | (54.6 | ) | (107.3 | ) | |||||||||||
Consolidated balance at December 31, 2016 | $ | 1,123.2 | $ | 69.4 | $ | 1,192.6 | $ | 1,343.2 | $ | 2,535.8 | ||||||||||
Net income | 115.8 | 25.4 | 141.2 | 94.1 | 235.3 | |||||||||||||||
Cash distributions | (30.1 | ) | — | (30.1 | ) | (30.0 | ) | (60.1 | ) | |||||||||||
Other distributions | — | — | — | (9.2 | ) | (9.2 | ) | |||||||||||||
Consolidated balance at December 31, 2017 | $ | 1,208.9 | $ | 94.8 | $ | 1,303.7 | $ | 1,398.1 | $ | 2,701.8 | ||||||||||
Net income | 46.0 | 10.1 | 56.1 | 17.9 | 74.0 | |||||||||||||||
Cash distributions | (30.1 | ) | — | (30.1 | ) | (25.3 | ) | (55.4 | ) | |||||||||||
Repayment of shareholder loan | — | — | — | (6.2 | ) | (6.2 | ) | |||||||||||||
Consolidated balance at December 31, 2018 | $ | 1,224.8 | $ | 104.9 | $ | 1,329.7 | $ | 1,384.5 | $ | 2,714.2 |
• | ASU 2016-01 Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities |
• | ASU 2016-15 Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments |
• | ASU 2016-16 Income Taxes - Income taxes intra-entity transfers of assets other than inventory |
• | ASU 2016-18 Statement of Cash Flows - Restricted Cash |
• | ASU 2017-01 Business Combinations (Topic 805)- Clarifying the Definition of a Business |
• | ASU 2018-03 Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10) |
• | ASU 2018-04 Investments-Debt Securities (Topic 320) and Regulated Operations (Topic 980) |
• | ASU 2018-05 Income Taxes (Topic 740) |
• | ASU 2018-06 Codification Improvements to (Topic 942) |
• | ASU 2018-09 Codification Improvements |
• | ASU 2018-19 Codification Improvements to (Topic 326) |
• | ASU 2016-02 Leases (Topic 842) (also 2018-01, 2018-10, 2018-11. 2018-20) |
• | ASU 2016-13 Financial Instruments - Credit Losses (Topic 326) |
• | ASU 2018-07 Compensation-Stock Compensation (Topic 718) |
• | ASU 2018-13 Fair Value Measurement (Topic 820) |
• | ASU 2018-14 Compensation-Retirement Benefits-Defined Benefit Plans (Subtopic 715-20) |
• | ASU 2018-15 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) |
• | ASU 2018-16 Derivatives and Hedging (Topic 815) |
• | ASU 2018-17 Consolidation (Topic 810) |
1. | We will not reassess whether any expired or existing contracts are or contain leases. |
2. | We will not reassess the lease classification for any expired or existing leases. |
3. | We will not reassess initial direct costs for any existing leases. |
4. | We will use hindsight in determining the lease term and in assessing impairment of the right-of-use assets. |
2018 | 2017 | 2016 | ||||||
BP | 68.0 | % | 56.8 | % | 42.0 | % | ||
Tullow | 19.8 | % | — | % | 13.0 | % | ||
Chevron | 8.5 | % | 7.9 | % | 5.4 | % | ||
ExxonMobil | 0.3 | % | 22.2 | % | 22.0 | % | ||
Hibernia | — | % | 6.4 | % | 15.1 | % | ||
Other | 3.4 | % | 6.7 | % | 2.5 | % | ||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
(In US$ millions) | 2018 | 2017 | 2016 | ||||||||
United States | $ | 618.1 | $ | 638.0 | $ | 672.2 | |||||
Ghana | 205.5 | — | 208.1 | ||||||||
Thailand | 88.7 | 89.2 | 86.3 | ||||||||
Canada | 85.3 | 87.1 | 241.5 | ||||||||
Indonesia | 8.9 | 37.3 | — | ||||||||
Angola | 1.3 | 152.5 | 175.9 | ||||||||
Equatorial Guinea | 0.9 | 48.1 | — | ||||||||
Nigeria | — | 39.5 | 185.2 | ||||||||
Other | 29.5 | 36.7 | 31.1 | ||||||||
Total | $ | 1,038.2 | $ | 1,128.4 | $ | 1,600.3 |
(In US$ millions) | 2018 | 2017 | |||||
United States | $ | 2,647.1 | $ | 2,729.6 | |||
Spain | 1,050.1 | 1,075.9 | |||||
Malaysia | 640.0 | — | |||||
Canada | 439.7 | 460.9 | |||||
Thailand | 228.7 | 234.6 | |||||
Gabon | — | 507.4 | |||||
Indonesia | — | 162.5 | |||||
Total | $ | 5,005.6 | $ | 5,170.9 |
(1) | The fixed assets referred to in the table above include the eleven drilling units at December 31, 2018 and December 31, 2017. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. |
(In US$ millions) | 2018 | 2017 | |||||
Accounts receivable, net | $ | 150.9 | $ | 254.1 | |||
Current contract liabilities (deferred revenues) (1) | 4.0 | 5.3 | |||||
Non-current contract liabilities (deferred revenues) (1) | 2.4 | 4.1 |
(In US$ millions) | Net Contract balances | |
Contract liabilities at December 31, 2017 | (9.4 | ) |
Decrease due to amortization of revenue that was included in the beginning contract liability balance | 4.6 | |
Increase due to cash received, excluding amounts recognized as revenue | (1.6 | ) |
Contract liabilities at December 31, 2018 | (6.4 | ) |
(In US$ millions) | Net Deferred Contract costs | |
Opening deferred contract costs at December 31, 2017 | 0.3 | |
Decrease due to amortization of costs that were included in the beginning balance | (2.3 | ) |
Increase due to contract costs incurred, excluding amounts recognized as operating expenses | 14.6 | |
Closing deferred contract costs at December 31, 2018 | 12.6 |
(In US$ millions) | 2018 | 2017 | 2016 | ||||||||
Current tax expense: | |||||||||||
U.K. | $ | (0.3 | ) | $ | (4.5 | ) | $ | (1.6 | ) | ||
Foreign | 86.3 | 40.4 | 110.2 | ||||||||
Total current tax expense | 86.0 | 35.9 | 108.6 | ||||||||
Deferred tax (benefit) / expense: | |||||||||||
U.K. | — | — | — | ||||||||
Foreign | 0.7 | 4.4 | (22.1 | ) | |||||||
Total income tax expense | $ | 86.7 | $ | 40.3 | $ | 86.5 |
2018 | 2017 | 2016 | ||||||
U.K. statutory income tax rate | 19.0 | % | 19.3 | % | 20.0 | % | ||
Non-U.K. taxes | 35.0 | % | (4.7 | )% | (6.3 | )% | ||
Effective income tax rate | 54.0 | % | 14.6 | % | 13.7 | % |
(In US$ millions) | 2018 | 2017 | |||||
Provisions | $ | 11.0 | $ | 0.5 | |||
Net operating losses carry forward | 64.4 | 33.3 | |||||
Interest carry forward | 16.7 | — | |||||
Other | 5.7 | 5.0 | |||||
Gross deferred tax assets | 97.8 | 38.8 | |||||
Valuation allowance | (90.1 | ) | (28.9 | ) | |||
Deferred tax asset, net of valuation allowance | $ | 7.7 | $ | 9.9 |
(In US$ millions) | 2018 | 2017 | |||||
Property, plant and equipment | $ | 0.1 | $ | 0.4 | |||
Unremitted earnings of subsidiaries | 0.3 | 1.5 | |||||
Gross deferred tax liabilities | 0.4 | 1.9 | |||||
Net deferred tax asset | 7.3 | 8.0 |
(In US$ millions) | 2018 | 2017 | |||||
Balance beginning of year | $ | 43.7 | $ | 40.0 | |||
Increases as a result of positions taken in prior years | 70.4 | — | |||||
Increases as a result of positions taken during the current year | 10.1 | 3.7 | |||||
Decreases as a result of positions taken in prior years | (22.6 | ) | — | ||||
Uncertain tax position | $ | 101.6 | $ | 43.7 |
Jurisdiction | Earliest Open Year |
United States | 2015 |
Nigeria | 2012 |
Ghana | 2013 |
(In US$ millions) | 2018 | 2017 | 2016 | ||||||||
Termination payments revenue | $ | 204.9 | $ | 95.9 | $ | 198.8 | |||||
Related party other revenues | 4.6 | 7.1 | 12.3 | ||||||||
Total | $ | 209.5 | $ | 103.0 | $ | 211.1 |
(In US$ millions) | 2018 | 2017 | 2016 | ||||||||
Loss on impairment of goodwill | $ | (3.2 | ) | $ | — | $ | — | ||||
Revaluation of contingent consideration | $ | — | $ | 89.9 | $ | — | |||||
Gain on sale of assets | — | 0.8 | — | ||||||||
Total | $ | (3.2 | ) | $ | 90.7 | $ | — |
(In US$ millions) | 2018 | 2017 | |||||
Reimbursable amounts due from customers | $ | 2.9 | $ | 3.6 | |||
Mobilization revenue receivables | 47.9 | 73.8 | |||||
Intangible asset - Favorable contracts to be amortized | 85.5 | 130.6 | |||||
Prepaid expenses | 12.1 | 8.5 | |||||
Deferred mobilization costs | 12.6 | 0.3 | |||||
Interest rate swap agreements | 9.9 | — | |||||
Other | 2.3 | 3.5 | |||||
Total other assets | $ | 173.2 | $ | 220.3 |
(In US$ millions) | 2018 | 2017 | |||||
Other current assets | 110.6 | 86.8 | |||||
Other non-current assets | 62.6 | 133.5 | |||||
Total other assets | $ | 173.2 | $ | 220.3 |
2018 | 2017 | ||||||||||||||||||||||
(In US$ millions) | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||
Intangible assets- Favorable contracts | |||||||||||||||||||||||
Balance at beginning of period | $ | 357.3 | $ | (226.7 | ) | $ | 130.6 | $ | 357.3 | $ | (152.3 | ) | $ | 205.0 | |||||||||
Amortization of favorable contracts | — | (45.1 | ) | (45.1 | ) | — | (74.4 | ) | (74.4 | ) | |||||||||||||
Balance at end of period | $ | 357.3 | $ | (271.8 | ) | $ | 85.5 | $ | 357.3 | $ | (226.7 | ) | $ | 130.6 |
Year ended December 31 | |||||||||||||||||||||||
(In US$ millions) | 2019 | 2020 | 2021 | 2022 | 2023 | Total | |||||||||||||||||
Amortization of favorable contracts | $ | 45.1 | $ | 40.4 | $ | — | $ | — | $ | — | $ | 85.5 |
(In US$ millions) | Cost | Accumulated depreciation | Net Book Value | ||||||||
Opening balance as at January 1, 2017 | $ | 6,494.1 | $ | (1,153.2 | ) | $ | 5,340.9 | ||||
Additions | 121.6 | — | 121.6 | ||||||||
Disposals | (16.7 | ) | — | (16.7 | ) | ||||||
Depreciation | — | (274.9 | ) | (274.9 | ) | ||||||
Closing balance as at December 31, 2017 | 6,599.0 | (1,428.1 | ) | 5,170.9 | |||||||
Additions | 115.0 | — | 115.0 | ||||||||
Disposals | — | — | — | ||||||||
Depreciation | — | (280.3 | ) | (280.3 | ) | ||||||
Closing balance as at December 31, 2018 | 6,714.0 | (1,708.4 | ) | 5,005.6 |
(In US$ millions) | 2018 | 2017 | |||||
External debt agreements | |||||||
Term Loan B | $ | 2,686.4 | $ | 2,836.9 | |||
West Vela Facility | 191.3 | 255.3 | |||||
West Polaris Facility | 150.8 | 205.6 | |||||
Tender Rig Facility | 56.2 | 83.3 | |||||
Sub-total external debt | 3,084.7 | 3,381.1 | |||||
Related party debt agreements | |||||||
West Vencedor Facility | — | 24.7 | |||||
Sub-total related party debt | — | 24.7 | |||||
Total external and related party debt | $ | 3,084.7 | $ | 3,405.8 |
(In US$ millions) | 2018 | ||
2019 | $ | 175.1 | |
2020 | 331.1 | ||
2021 | 2,578.5 | ||
2022 | — | ||
2023 | — | ||
2024 and thereafter | — | ||
Total external and related party debt | $ | 3,084.7 |
Outstanding debt as of December 31, 2018 | ||||||||||
(In $ millions) | Principal outstanding | Debt Issuance Costs | Total Debt | |||||||
Current portion of long-term external debt | $ | 175.1 | $ | (12.2 | ) | $ | 162.9 | |||
Long-term external debt | 2,909.6 | (13.4 | ) | 2,896.2 | ||||||
Total interest-bearing debt | $ | 3,084.7 | $ | (25.6 | ) | $ | 3,059.1 |
Outstanding debt as of December 31, 2017 | ||||||||||
(In $ millions) | Principal outstanding | Debt Issuance Costs | Total Debt | |||||||
Current portion of long-term external debt | $ | 175.1 | $ | (12.2 | ) | $ | 162.9 | |||
Long-term external debt | 3,206.0 | (25.8 | ) | 3,180.2 | ||||||
Total external debt | $ | 3,381.1 | $ | (38.0 | ) | $ | 3,343.1 | |||
Current portion of long term related party debt | $ | 24.7 | $ | — | $ | 24.7 | ||||
Total interest-bearing debt | $ | 3,405.8 | $ | (38.0 | ) | $ | 3,367.8 |
(In US$ millions) | 2018 | 2017 | |||||
Uncertain tax position | $ | 118.0 | $ | 51.7 | |||
Accrued expenses | 33.3 | 35.4 | |||||
Taxes payable | 31.3 | 36.5 | |||||
Employee and business withheld taxes, social security and vacation payment | 8.1 | 8.7 | |||||
Deferred mobilization/demobilization revenues | 6.4 | 9.4 | |||||
VAT payable | 3.6 | 6.5 | |||||
Interest rate swap agreements | — | 29.0 | |||||
Other liabilities | — | 0.4 | |||||
Total other liabilities | $ | 200.7 | $ | 177.6 |
(In US$ millions) | 2018 | 2017 | |||||
Other current liabilities | 80.2 | 121.8 | |||||
Other non-current liabilities | 120.5 | 55.8 | |||||
Total other liabilities | $ | 200.7 | $ | 177.6 |
(In US$ millions) | 2018 | 2017 | 2016 | |||||||||
Related party inventory sales (a) | $ | 3.2 | $ | 2.2 | $ | 1.4 | ||||||
Rig operating costs (b) | 1.4 | 4.9 | 10.9 | |||||||||
Total related party operating revenues | $ | 4.6 | $ | 7.1 | $ | 12.3 | ||||||
Management and technical support fees (c) (d) | $ | 70.6 | $ | 74.5 | $ | 62.8 | ||||||
Rig operating costs (e) | 0.8 | 22.9 | 24.9 | |||||||||
Bareboat charter arrangement (f) | — | 2.8 | 9.5 | |||||||||
Related party inventory purchases (a) | 0.7 | 1.0 | 2.0 | |||||||||
Total related party operating expenses | $ | 72.1 | $ | 101.2 | $ | 99.2 | ||||||
Interest expense recognized on deferred contingent consideration (k) | $ | (3.1 | ) | $ | (4.2 | ) | $ | (5.2 | ) | |||
Related party interest expense (g) | (1.4 | ) | (4.7 | ) | (10.1 | ) | ||||||
Losses on related party derivatives (h) | — | (1.3 | ) | (4.1 | ) | |||||||
Related party commitment fee (i) | — | (1.3 | ) | (2.0 | ) | |||||||
Total related party financial items | $ | (4.5 | ) | $ | (11.5 | ) | $ | (21.4 | ) |
(In US$ millions) | 2018 | 2017 | ||||||
Trading balances due from Seadrill and subsidiaries (j) | $ | 6.4 | $ | 24.2 | ||||
Total related party receivables | $ | 6.4 | $ | 24.2 |
(In US$ millions) | 2018 | 2017 | ||||||
Trading balances due to Seadrill and subsidiaries (j) | $ | (126.3 | ) | $ | (157.0 | ) | ||
Deferred and contingent consideration to related party - short term portion (k) | (37.5 | ) | (41.7 | ) | ||||
Deferred and contingent consideration to related party - long term portion (k) | (21.5 | ) | (46.0 | ) | ||||
West Vencedor Loan Agreement with Seadrill (l) | — | (24.7 | ) | |||||
Total related party payables | $ | (185.3 | ) | $ | (269.4 | ) |
(In US$ millions) | 2018 | 2017 | ||||||
West Vela | ||||||||
Mobilization due to Seadrill | $ | 31.2 | $ | 44.2 | ||||
Seadrill share of dayrate from BP contract | 27.0 | 38.6 | ||||||
58.2 | 82.8 | |||||||
West Polaris | ||||||||
Seadrill share of dayrate from ExxonMobil contract ("Earnout 1") | — | 4.2 | ||||||
Seadrill share of dayrate from subsequent contracts ("Earnout 2") | 0.8 | 0.7 | ||||||
0.8 | 4.9 | |||||||
Total | $ | 59.0 | $ | 87.7 |
(In US$ millions) | 2018 | 2017 | ||||||
Current portion of deferred and contingent consideration to related party | $ | 37.5 | $ | 41.7 | ||||
Non-current portion of deferred and contingent consideration to related party | 21.5 | 46.0 | ||||||
Total | $ | 59.0 | $ | 87.7 |
Maturity date | Outstanding principal as of December 31, 2018 | Receive rate | Pay rate | |||
(In US$ millions) | ||||||
February 21, 2021 | 2,764.9 | 3-month LIBOR | 2.45% to 2.52% | (1) (2) | ||
Total outstanding principal | $ | 2,764.9 |
• | the measurement of monetary assets and liabilities denominated in foreign currencies converted to US Dollars, with the resulting gain or loss recorded as "Foreign exchange gain/(loss)"; and |
• | the impact of fluctuations in exchange rates on the reported amounts of the Company's revenues and expenses which are denominated in foreign currencies. |
2018 | 2017 | ||||||||||||||
(In US$ millions) | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||
Assets | |||||||||||||||
Cash and cash equivalents | $ | 841.6 | $ | 841.6 | $ | 848.6 | $ | 848.6 | |||||||
Liabilities | |||||||||||||||
Term Loan B | 2,115.1 | 2,662.7 | 2,249.8 | 2,802.3 | |||||||||||
Other external debt facilities | 383.4 | 396.4 | 514.7 | 540.8 | |||||||||||
Long-term debt to related party | — | — | 23.8 | 24.7 |
Fair value measurements at reporting date using | |||||||||
Total fair value as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||
(In US$ millions) | (Level 1) | (Level 2) | (Level 3) | ||||||
Current assets: | |||||||||
Derivative instruments - Interest rate swap contracts | $ | 9.9 | — | 9.9 | — | ||||
Total assets | 9.9 | — | 9.9 | — | |||||
Current liabilities: | |||||||||
Related party deferred and contingent consideration | (59.0 | ) | — | (59.0 | ) | — | |||
Total liabilities | $ | (59.0 | ) | — | (59.0 | ) | — |
Fair value measurements at reporting date using | |||||||||
Total fair value as of December 31, 2017 | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||
(In US$ millions) | (Level 1) | (Level 2) | (Level 3) | ||||||
Current liabilities: | |||||||||
Derivative instruments - Interest rate swap contracts | (29.0 | ) | — | (29.0 | ) | — | |||
Related party deferred and contingent consideration | (87.7 | ) | — | (87.7 | ) | — | |||
Total liabilities | $ | (116.7 | ) | — | (116.7 | ) | — |
(in US $ millions, except per unit data) | 2018 | 2017 | 2016 | ||||||||
Net income attributable to: | |||||||||||
Common unitholders | $ | 56.1 | $ | 141.2 | $ | 240.7 | |||||
Subordinated unitholders | — | — | 37.8 | ||||||||
Seadrill member interest | — | — | 2.5 | ||||||||
Net income attributable to Seadrill Partners LLC owners | $ | 56.1 | $ | 141.2 | $ | 281 | |||||
Weighted average units outstanding (in thousands): | |||||||||||
Common unitholders | 75,278 | 75,278 | 75,278 | ||||||||
Subordinated unitholders | 16,543 | 16,543 | 16,543 | ||||||||
Earnings per unit: | |||||||||||
Common unitholders | $ | 0.75 | $ | 1.88 | $ | 3.20 | |||||
Subordinated unitholders | $ | — | $ | — | $ | 2.28 | |||||
Cash distributions declared and paid in the period per unit (1) (2) | $ | 0.4000 | $ | 0.4000 | $ | 0.7000 | |||||
Subsequent event: Cash distributions declared and paid relating to the period per unit (2) (3): | $ | 0.0100 | $ | 0.1000 | $ | 0.1000 |
• | First, to the common unitholders, pro-rata, until the Company distributes for each outstanding common unit an amount equal to the minimum quarterly distribution for that quarter; |
• | Second, to the common unitholders, pro-rata, until the Company distributes for each outstanding common an amount equal to any arrearages in payment of the minimum quarterly distribution on the common units for prior quarters during the subordination period; and |
• | Third, to the subordinated units, pro-rata, the Company distributes for each subordinated unit an amount equal to the minimum quarterly distribution for that quarter. |
• | The Company has distributed available cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and |
• | The Company has distributed available cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution. |
• | first, 100.0% to all unitholders, until each unitholder receives a total of $0.4456 per unit for that quarter (the "first target distribution"); |
• | second, 85% to all unitholders, pro rata, and 15.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.4844 per unit for that quarter (the "second target distribution"); |
• | third, 75.0% to all unitholders, pro rata, and 25.0% to the holders of the incentive distribution rights, pro rata, until each unitholder receives a total of $0.5813 per unit for that quarter (the "third target distribution"); and |
• | thereafter, 50.0% to all unitholders, and 50.0% to the holders of the incentive distribution rights, pro rata. |
• | distributions of available cash from operating surplus on each of the outstanding common units and subordinated units equaled or exceeded the minimum quarterly distribution for each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date; |
• | the "adjusted operating surplus" (as defined in the partnership agreement) generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date equaled or exceeded the sum of the minimum quarterly distributions on all of the outstanding common units and subordinated units during those periods on a fully diluted weighted average basis during those periods; and |
• | there are no outstanding arrearages in payment of the minimum quarterly distribution on the common units. |
(In US$ millions) | 2018 | 2017 | 2016 | |||||
Other distributions (1) | — | 9.2 | — |
SEADRILL PARTNERS LLC (Registrant) | |||
Date: March 28, 2019 | |||
By: | /s/ Mark Morris | ||
Name: | Mark Morris | ||
Title: | Chief Executive Officer of Seadrill Partners LLC (Principal Executive Officer of Seadrill Partners LLC) |
Name of company | Country of Incorporation | Principal activities | Percent owned |
Drilling unit owning companies | |||
Asia Offshore Rig 1 Ltd | Bermuda | Owner of AOD 1 | 66.24% |
Asia Offshore Rig 2 Ltd | Bermuda | Owner of AOD 2 | 66.24% |
Asia Offshore Rig 3 Ltd | Bermuda | Owner of AOD 3 | 66.24% |
Sevan Brasil Ltd | Bermuda | Owner of Sevan Brasil | 100.00% |
Sevan Drilling Rig VI Pte Ltd | Singapore | Owner of Sevan Developer | 100.00% |
Sevan Driller Ltd | Bermuda | Owner of Sevan Driller | 100.00% |
Sevan Louisiana Hungary KFT | Hungary | Owner of Sevan Louisiana | 100.00% |
North Atlantic Alpha Ltd | Bermuda | Owner of West Alpha | 100.00% |
Seadrill Ariel Ltd. | Liberia | Owner of West Ariel | 100.00% |
Seadrill Callisto Ltd | Bermuda | Owner of West Callisto | 100.00% |
Seadrill Carina Ltd | Bermuda | Owner of West Carina | 100.00% |
Seadrill Castor Ltd | Bermuda | Owner of West Castor | 100.00% |
Seadrill Cressida Ltd | Bermuda | Owner of West Cressida | 100.00% |
Seadrill Defender (S) Pte Ltd | Singapore | Owner of West Defender | 100.00% |
Seadrill Eclipse Ltd | Bermuda | Owner of West Eclipse | 100.00% |
North Atlantic Elara Ltd | Bermuda | Owner of West Elara | 100.00% |
Seadrill Eminence Ltd | Bermuda | Owner of West Eminence | 100.00% |
North Atlantic Epsilon Ltd | Bermuda | Owner of West Epsilon | 100.00% |
Seadrill Freedom Ltd | Bermuda | Owner of West Freedom | 100.00% |
Seadrill Gemini Ltd | Bermuda | Owner of West Gemini | 100.00% |
Seadrill Jupiter Ltd. | Bermuda | Owner of West Jupiter | 100.00% |
North Atlantic Navigator Ltd | Bermuda | Owner of West Navigator | 100.00% |
Seadrill Neptune Hungary KFT | Bermuda | Owner of West Neptune | 100.00% |
Seadrill Orion Ltd | Bermuda | Owner of West Orion | 100.00% |
Seadrill Pegasus Pte Ltd | Singapore | Owner of West Pegasus | 100.00% |
North Atlantic Phoenix Ltd | Bermuda | Owner of West Phoenix | 100.00% |
Seadrill Saturn Ltd | Bermuda | Owner of West Saturn | 100.00% |
Seadrill Telesto Ltd | Bermuda | Owner of West Telesto | 100.00% |
Seadrill Tellus Ltd | Bermuda | Owner of West Tellus | 100.00% |
Seadrill Tucana Ltd | Bermuda | Owner of West Tucana | 100.00% |
North Atlantic Venture Ltd | Bermuda | Owner of West Venture | 100.00% |
Scorpion Vigilant Ltd | Bermuda | Owner of West Vigilant | 100.00% |
Drilling units under sale leaseback | |||
SFL Deepwater Ltd* | Bermuda | Owner of West Taurus | —% |
SFL Hercules Ltd* | Bermuda | Owner of West Hercules | —% |
SFL Linus Ltd* | Bermuda | Owner of West Linus | —% |
Contracting and management companies | |||
Seadrill Offshore AS - Europe operations | Norway | Finance Lessee | 100.00% |
Eastern Drilling AS | Norway | Onshore Services | 100.00% |
Seadrill UK Operations Ltd | United Kingdom | Rig Operator | 100.00% |
Seadrill Management Ltd | United Kingdom | Onshore Services | 100.00% |
Seadrill Deepwater Charterer Ltd | Bermuda | Finance Lessee | 1 |
Seadrill Insurance Ltd | Bermuda | Onshore services | 1 |
Seadrill Angola Lta | Angola | Onshore Services | 1 |
Seadrill Gulf Operations Neptune LLC | USA | Rig Operator | 1 |
Seadrill SeaMex SC Holdco Ltd | Bermuda | Onshore Finance | 1 |
Seadrill Treasury UK Ltd | United Kingdom | Onshore Finance | 1 |
Seadrill SeaMex 2 de Mexico S de RL de CV | Mexico | Onshore Finance | 1 |
Seadrill International Resourcing DMCC | UAE | Onshore Services | 1 |
Seadrill Global Services Ltd | Bermuda | Onshore Services | 1 |
Seadrill Management (S) Pte Ltd | Singapore | Onshore Services | 1 |
Seadrill Nigeria Operations Ltd | Nigeria | Onshore Services | 1 |
Seadrill Deepwater Units Pte Ltd | Singapore | Onshore Services | 1 |
Seadrill (Dalian) Consulting Co Ltd | China | Onshore Services | 1 |
Seadrill Americas INC | USA | Onshore Services | 1 |
Seadrill Serviços de Petróleo Ltda | Brasil | Rig Operator | 1 |
Seadrill Operations de Mexico S. de R.L. de C.V | Mexico | Onshore Services | 1 |
Seadrill Offshore Malaysia Sdn Bhd | Malaysia | Rig Operator | 1 |
Scorpion Labuan Ltd | Labuan | Intra-charterer | 1 |
Seadrill Newfoundland Operations Ltd | Canada | Onshore Services | 1 |
Seadrill UK Support Services Ltd | United Kingdom | Onshore Services | 1 |
North Atlantic Linus Charterer Ltd | Bermuda | Finance Lessee | 1 |
Seadrill Norway Crew AS | Norway | Onshore Services | 1 |
North Atlantic Crewing Ltd | Bermuda | Onshore Services | 1 |
Seadrill Europe Management AS | Norway | Onshore Services | 1 |
Sevan Drilling North America LLC | USA | Rig Operator | 1 |
Seadrill Jack-ups Contracting Ltd | Suriname | Rig Operator | 1 |
Holding Companies | |||
Seadrill North Atlantic Holdings Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Common Holdings Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Deepwater Holdings Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Jack Up Holding Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Member LLC | Marshall Islands | Holding Company | 100.00% |
Seadrill Investment Holding Company Ltd | Bermuda | Holding Company | 100.00% |
Seadrill New Finance Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Norway Operations Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Rig Holding Company Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Ltd | Bermuda | Holding Company | 100.00% |
Seadrill UK Ltd | United Kingdom | Holding Company | 100.00% |
Seadrill Partners LLC Holdco Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Seabras UK Ltd | United Kingdom | Holding Company | 100.00% |
Seadrill Sevan Holdings Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Seabras SP UK Ltd | United Kingdom | Holding Company | 100.00% |
Seadrill Mobile Units UK Ltd | United Kingdom | Holding Company | 100.00% |
Seadrill Seadragon UK Ltd | United Kingdom | Holding Company | 100.00% |
Seadrill Holdings Singapore Pte Ltd | Singapore | Holding Company | 100.00% |
Asia Offshore Drilling Ltd | Bermuda | Holding Company | 100.00% |
Scorpion Deepwater Ltd | Bermuda | Holding Company | 100.00% |
Scorpion International Ltd | Bermuda | Holding Company | 100.00% |
Seadrill GCC Operations Ltd | Bermuda | Holding Company | 100.00% |
Scorpion Drilling Ltd | Bermuda | Holding Company | 100.00% |
Seadrill Far East Ltd | Hong Kong | Holding Company | 100.00% |
Sevan Investimentos do Brasil Ltda | Brasil | Holding Company | 100.00% |
Sevan Drilling Rig IX Pte Ltd | Singapore | Holding Company | 100.00% |
Sevan Drilling Rig VI AS | Norway | Holding Company | 100.00% |
Seabras Serviços de Petróleo S.A. | Brasil | Holding Company | 100.00% |
Seabras Holdings GmbH | Austria | Holding Company | 100.00% |
Seabras Rig Holdings GmbH | Austria | Holding Company | 100.00% |
Document and Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2018
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SEADRILL LTD |
Entity Central Index Key | 0001737706 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding (in shares) | 100,000,000 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Net loss | $ (605) | |||
Other comprehensive income/(loss), net of tax: | ||||
Unrealized gain on marketable securities | 0 | |||
Change in fair value of debt component of Archer convertible bond | (3) | |||
Other than temporary impairment of marketable securities, reclassification to Statement of Operations | 0 | |||
Actuarial gain/(loss) relating to pensions | 1 | |||
Unrealized gain on interest rate swaps in VIEs and subsidiaries | 0 | |||
Share of other comprehensive (loss)/income from associated companies | (5) | |||
Other comprehensive (loss)/income | (7) | |||
Total comprehensive (loss)/income for the period | (612) | |||
Comprehensive (loss)/income attributable to the parent | (609) | |||
Comprehensive (loss)/income attributable to the non-controlling interest | (2) | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Redeemable Noncontrolling Interest | $ (1) | |||
Predecessor | ||||
Net loss | $ (3,885) | $ (3,102) | $ (155) | |
Other comprehensive income/(loss), net of tax: | ||||
Unrealized gain on marketable securities | 0 | 14 | 17 | |
Change in fair value of debt component of Archer convertible bond | 0 | 0 | 0 | |
Other than temporary impairment of marketable securities, reclassification to Statement of Operations | 0 | 0 | 153 | |
Actuarial gain/(loss) relating to pensions | 0 | (3) | 22 | |
Unrealized gain on interest rate swaps in VIEs and subsidiaries | 0 | 2 | 1 | |
Share of other comprehensive (loss)/income from associated companies | 0 | (8) | 10 | |
Other comprehensive (loss)/income | 0 | 5 | 203 | |
Total comprehensive (loss)/income for the period | (3,885) | (3,097) | 48 | |
Comprehensive (loss)/income attributable to the parent | (3,881) | (2,976) | 14 | |
Comprehensive (loss)/income attributable to the non-controlling interest | (6) | (121) | 34 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Redeemable Noncontrolling Interest | $ 2 | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Current assets | ||
Cash and cash equivalents | $ 1,542 | |
Restricted cash | 461 | |
Marketable securities | 57 | |
Accounts receivables, net | 208 | |
Amount due from related parties - current | 177 | |
Other current assets | 322 | |
Total current assets | 2,767 | |
Non-current assets | ||
Investment in associated companies | 800 | |
Newbuildings | 0 | |
Drilling units | 6,659 | |
Deferred tax assets | 18 | |
Equipment | 29 | |
Amount due from related parties - non-current | 539 | |
Assets held for sale | 0 | |
Other non-current assets | 36 | |
Total non-current assets | 8,081 | |
Total assets | 10,848 | |
Current liabilities | ||
Debt due within one year | 33 | |
Trade accounts payable | 82 | |
Amounts due to related parties - current | 39 | |
Other current liabilities | 310 | |
Total current liabilities | 464 | |
Liabilities subject to compromise | 0 | |
Non-current liabilities | ||
Long-term debt | 6,881 | |
Long-term debt due to related parties | 222 | |
Deferred tax liabilities | 87 | |
Other non-current liabilities | 121 | |
Total non-current liabilities | 7,311 | |
Commitments and contingencies (see note 32) | ||
Redeemable non-controlling interest | 38 | |
Equity | ||
Common shares of par value US$0.10 per share: 111,000,000 shares authorized and 100,000,000 issued at December 31, 2018 (Successor) (Common shares of par value US$2.00 per share: 800,000,000 shares authorized and 504,518,940 issued at December 31, 2017 (Predecessor) | 10 | |
Additional paid in capital | 3,491 | |
Contributed surplus | 0 | |
Accumulated other comprehensive loss | (7) | |
Retained earnings | (611) | |
Total Shareholder’s equity | 2,883 | |
Non-controlling interest | 152 | |
Total equity | 3,035 | |
Total liabilities and equity | $ 10,848 | |
Predecessor | ||
Current assets | ||
Cash and cash equivalents | $ 1,255 | |
Restricted cash | 104 | |
Marketable securities | 124 | |
Accounts receivables, net | 295 | |
Amount due from related parties - current | 217 | |
Other current assets | 257 | |
Total current assets | 2,252 | |
Non-current assets | ||
Investment in associated companies | 1,473 | |
Newbuildings | 248 | |
Drilling units | 13,216 | |
Deferred tax assets | 10 | |
Equipment | 29 | |
Amount due from related parties - non-current | 547 | |
Assets held for sale | 126 | |
Other non-current assets | 81 | |
Total non-current assets | 15,730 | |
Total assets | 17,982 | |
Current liabilities | ||
Debt due within one year | 509 | |
Trade accounts payable | 72 | |
Amounts due to related parties - current | 10 | |
Other current liabilities | 268 | |
Total current liabilities | 859 | |
Liabilities subject to compromise | 9,191 | |
Non-current liabilities | ||
Long-term debt | 485 | |
Long-term debt due to related parties | 314 | |
Deferred tax liabilities | 107 | |
Other non-current liabilities | 67 | |
Total non-current liabilities | 973 | |
Commitments and contingencies (see note 32) | ||
Redeemable non-controlling interest | 0 | |
Equity | ||
Common shares of par value US$0.10 per share: 111,000,000 shares authorized and 100,000,000 issued at December 31, 2018 (Successor) (Common shares of par value US$2.00 per share: 800,000,000 shares authorized and 504,518,940 issued at December 31, 2017 (Predecessor) | 1,008 | |
Additional paid in capital | 3,313 | |
Contributed surplus | 1,956 | |
Accumulated other comprehensive loss | 58 | |
Retained earnings | 225 | |
Total Shareholder’s equity | 6,560 | |
Non-controlling interest | 399 | |
Total equity | 6,959 | |
Total liabilities and equity | $ 17,982 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Jul. 02, 2018 |
Dec. 31, 2017 |
Jun. 30, 2016 |
Jun. 13, 2016 |
May 31, 2016 |
May 20, 2016 |
May 10, 2005 |
---|---|---|---|---|---|---|---|---|
Equity | ||||||||
Common shares, par value (in dollars per share) | $ 0.1 | $ 2.00 | $ 2.00 | |||||
Common shares, shares authorized (in shares) | 111,111,111.000000 | 111,111,111 | ||||||
Common shares, shares outstanding (in shares) | 100,000,000 | 508,444,280 | 500,944,280 | |||||
Predecessor | ||||||||
Equity | ||||||||
Common shares, par value (in dollars per share) | $ 2.00 | $ 2 | ||||||
Common shares, shares authorized (in shares) | 800,000,000 | |||||||
Common shares, shares outstanding (in shares) | 504,518,940 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cash Flows from Operating Activities | |||||
Net loss | $ (605) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation | 236 | ||||
Amortization of deferred loan charges | 0 | ||||
Amortization of unfavorable and favorable contracts | 58 | ||||
Share of results from associated companies | 90 | ||||
Share-based compensation expense | 0 | ||||
Loss on disposals | 0 | ||||
Contingent consideration realized | 0 | ||||
Interest unwind on contingent consideration assets | (1) | ||||
Unrealized loss/(gain) related to derivative financial instruments | 31 | ||||
Loss on impairment of long-lived assets | 0 | ||||
Loss on impairment of investments | 0 | ||||
Deferred tax (benefit)/expense | (22) | ||||
Unrealized foreign exchange loss/(gain) on long-term debt | 0 | ||||
Amortization of discount on debt | 23 | ||||
Gain on derecognition of investment in associated company | 0 | ||||
Gain on debt extinguishment | 0 | ||||
Unrealized loss on marketable securities | 64 | ||||
Non-cash gain on liabilities subject to compromise | 0 | ||||
Fresh start valuation adjustments | 0 | ||||
Other re-organization items | 0 | ||||
Other | (2) | ||||
Distributions received from associated companies | 32 | ||||
Payments for long-term maintenance | (71) | ||||
Changes in operating assets and liabilities, net of effect of acquisitions and disposals | |||||
Trade accounts receivable | 64 | ||||
Trade accounts payable | (31) | ||||
Prepaid expenses/accrued revenue | 12 | ||||
Deferred revenue | 21 | ||||
Related party receivables | 7 | ||||
Related party payables | 54 | ||||
Other assets | (20) | ||||
Other liabilities | 34 | ||||
Net cash (used in)/provided by operating activities | (26) | ||||
Cash Flows from Investing Activities | |||||
Additions to newbuildings | 0 | ||||
Additions to drilling units and equipment | (27) | ||||
Refund of yard installments | 0 | ||||
Contingent consideration received | 65 | ||||
Settlement of West Mira | 0 | ||||
Sale of rigs and equipment | 0 | ||||
Buyout of guarantee | 0 | ||||
Investment in associated companies | 0 | ||||
Payments received from loans granted to related parties | 23 | ||||
Loans granted to related parties | 0 | ||||
Proceeds from disposal of marketable securities | 0 | ||||
Net cash provided by investing activities | 61 | ||||
Cash Flows from Financing Activities | |||||
Proceeds from debt | 0 | $ 228 | |||
Repayments of debt | (83) | ||||
Mandatory redemption of New Secured Notes | (121) | ||||
Debt fees paid | (4) | ||||
Repayments of debt to related party | 0 | ||||
Dividends paid to non-controlling interests | 0 | ||||
Purchase of treasury shares | 0 | ||||
Cash settlement of restricted stock units | 0 | ||||
Proceeds from issuance of shares | 0 | ||||
Net cash (used in)/provided by financing activities | (208) | ||||
Effect of exchange rate changes on cash and cash equivalents | (1) | ||||
Net (decrease)/increase in cash and cash equivalents, including restricted cash | (174) | ||||
Cash and cash equivalents, including restricted cash, at beginning of the year | 2,177 | ||||
Cash and cash equivalents, including restricted cash, at the end of year | 2,003 | $ 2,177 | 2,003 | ||
Supplementary disclosure of cash flow information | |||||
Interest paid, net of capitalized interest | (178) | ||||
Taxes paid | (16) | ||||
Predecessor | |||||
Cash Flows from Operating Activities | |||||
Net loss | (3,885) | $ (3,102) | $ (155) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation | 391 | 798 | 810 | ||
Amortization of deferred loan charges | 0 | 27 | 45 | ||
Amortization of unfavorable and favorable contracts | (21) | (43) | (65) | ||
Share of results from associated companies | (149) | (174) | (283) | ||
Share-based compensation expense | 3 | 7 | 8 | ||
Loss on disposals | 0 | 245 | 0 | ||
Contingent consideration realized | (7) | (27) | (21) | ||
Interest unwind on contingent consideration assets | 0 | 0 | 0 | ||
Unrealized loss/(gain) related to derivative financial instruments | 4 | (76) | (67) | ||
Loss on impairment of long-lived assets | 414 | 696 | 44 | ||
Loss on impairment of investments | 0 | 841 | 895 | ||
Deferred tax (benefit)/expense | 0 | 7 | 73 | ||
Unrealized foreign exchange loss/(gain) on long-term debt | 0 | 59 | (5) | ||
Amortization of discount on debt | 0 | 0 | 0 | ||
Gain on derecognition of investment in associated company | 0 | (10) | 0 | ||
Gain on debt extinguishment | 0 | (19) | (47) | ||
Unrealized loss on marketable securities | 3 | 0 | 0 | ||
Non-cash gain on liabilities subject to compromise | (2,977) | 0 | 0 | ||
Fresh start valuation adjustments | 6,142 | 0 | 0 | ||
Other re-organization items | 6 | 1,274 | 0 | ||
Other | (1) | (2) | (2) | ||
Distributions received from associated companies | 17 | 39 | 55 | ||
Payments for long-term maintenance | (78) | (58) | (95) | ||
Changes in operating assets and liabilities, net of effect of acquisitions and disposals | |||||
Trade accounts receivable | 29 | 167 | 256 | ||
Trade accounts payable | 4 | (9) | (55) | ||
Prepaid expenses/accrued revenue | 42 | (66) | 15 | ||
Deferred revenue | (23) | (107) | (168) | ||
Related party receivables | (13) | (42) | 2 | ||
Related party payables | (42) | (44) | (35) | ||
Other assets | (62) | 93 | 55 | ||
Other liabilities | (10) | (75) | (76) | ||
Net cash (used in)/provided by operating activities | (213) | 399 | 1,184 | ||
Cash Flows from Investing Activities | |||||
Additions to newbuildings | (1) | (33) | (52) | ||
Additions to drilling units and equipment | (48) | (59) | (84) | ||
Refund of yard installments | 0 | 25 | 53 | ||
Contingent consideration received | 48 | 95 | 95 | ||
Settlement of West Mira | 0 | 170 | 0 | ||
Sale of rigs and equipment | 126 | 122 | 0 | ||
Buyout of guarantee | 0 | (28) | 0 | ||
Investment in associated companies | 0 | 0 | (16) | ||
Payments received from loans granted to related parties | 24 | 66 | 283 | ||
Loans granted to related parties | 0 | 0 | (120) | ||
Proceeds from disposal of marketable securities | 0 | 0 | 195 | ||
Net cash provided by investing activities | 149 | 358 | 354 | ||
Cash Flows from Financing Activities | |||||
Proceeds from debt | 875 | 0 | 0 | ||
Repayments of debt | (153) | (754) | (1,253) | ||
Mandatory redemption of New Secured Notes | 0 | 0 | 0 | ||
Debt fees paid | (35) | (53) | (31) | ||
Repayments of debt to related party | 0 | (39) | (103) | ||
Dividends paid to non-controlling interests | 0 | 0 | (7) | ||
Purchase of treasury shares | 0 | 0 | (10) | ||
Cash settlement of restricted stock units | 0 | 0 | (1) | ||
Proceeds from issuance of shares | 200 | 0 | 0 | ||
Net cash (used in)/provided by financing activities | 887 | (846) | (1,405) | ||
Effect of exchange rate changes on cash and cash equivalents | (5) | 5 | 18 | ||
Net (decrease)/increase in cash and cash equivalents, including restricted cash | 818 | (84) | 151 | ||
Cash and cash equivalents, including restricted cash, at beginning of the year | $ 2,177 | 1,359 | $ 1,359 | 1,443 | 1,292 |
Cash and cash equivalents, including restricted cash, at the end of year | 2,177 | 1,359 | 1,443 | ||
Supplementary disclosure of cash flow information | |||||
Interest paid, net of capitalized interest | (38) | (264) | (400) | ||
Taxes paid | $ (22) | $ (119) | $ (123) |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions |
Total |
Total equity before NCI |
Common shares |
Additional paid in capital |
Contributed surplus |
Accumulated other comprehensive income/(loss) |
Retained Earnings |
Non-controlling interest |
---|---|---|---|---|---|---|---|---|
Beginning Balance, shares (Predecessor) at Dec. 31, 2015 | 985,000,000 | |||||||
Beginning balance (Predecessor) at Dec. 31, 2015 | $ 10,068 | $ 9,453 | $ 3,275 | $ 1,956 | $ (142) | $ 3,379 | $ 615 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Purchase of treasury shares, shares | Predecessor | (8,000,000) | |||||||
Purchase of treasury shares | Predecessor | (10) | (10) | (2) | |||||
Share-based compensation charge | Predecessor | 7 | 7 | 7 | |||||
Cash settlement of vested restricted stock units | Predecessor | (1) | (1) | (1) | |||||
Conversion of convertible bond, shares | Predecessor | 31,000,000 | |||||||
Conversion of convertible bond | Predecessor | 58 | 58 | 27 | |||||
Recognition of non-controlling interest | Predecessor | 6 | 6 | ||||||
Other comprehensive income (loss) | Predecessor | 203 | 195 | 195 | 8 | ||||
Distributions to non-controlling interests | Predecessor | $ (113) | (113) | ||||||
Issuance of Successor common stock, shares | Predecessor | 15,684,340 | |||||||
Issuance of Successor common stock | Predecessor | $ 31 | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Excluding Redeemable Noncontrolling Interest | Predecessor | (155) | (181) | (181) | 26 | ||||
Net loss | Predecessor | (155) | |||||||
Ending Balance, Shares (Predecessor) at Dec. 31, 2016 | 1,008,000,000 | |||||||
Ending balance (Predecessor) at Dec. 31, 2016 | 10,063 | 9,521 | 3,306 | 1,956 | 53 | 3,198 | 542 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation charge | Predecessor | 7 | 7 | 7 | |||||
Cash settlement of vested restricted stock units | Predecessor | 0 | |||||||
Other comprehensive income (loss) | Predecessor | 5 | 5 | 5 | |||||
Distributions to non-controlling interests | Predecessor | $ (14) | (14) | ||||||
Issuance of Successor common stock, shares | 15,684,340 | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Excluding Redeemable Noncontrolling Interest | Predecessor | $ (3,102) | (2,973) | (2,973) | (129) | ||||
Net loss | Predecessor | $ (3,102) | |||||||
Ending Balance, Shares (Predecessor) at Dec. 31, 2017 | 504,518,940 | 1,008,000,000 | ||||||
Ending balance (Predecessor) at Dec. 31, 2017 | $ 6,959 | 6,560 | 3,313 | 1,956 | 58 | 225 | 399 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Effect of accounting standards update | Predecessor | ASU 2016-01 - Financial Instruments | 0 | (31) | 31 | |||||
Effect of accounting standards update | Predecessor | ASU 2016-16 - Income Taxes | (84) | (59) | (59) | (25) | ||||
Effect of accounting standards update | Predecessor | ASU 2016-09 - Revenue from contracts | 7 | 7 | 7 | |||||
Share-based compensation charge | Predecessor | 9 | 9 | 9 | |||||
Cash settlement of vested restricted stock units | Predecessor | 0 | |||||||
Other comprehensive income (loss) | Predecessor | 0 | |||||||
Distributions to non-controlling interests | Predecessor | 0 | (43) | (43) | 43 | ||||
Revaluation of redeemable non-controlling interest | Predecessor | (23) | 127 | 127 | (150) | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Excluding Redeemable Noncontrolling Interest | Predecessor | (3,887) | (3,881) | (3,881) | (6) | ||||
Net loss | Predecessor | (3,885) | |||||||
Ending balance, fresh-start adjusted, shares (Predecessor) at Jul. 01, 2018 | 0 | |||||||
Ending balance, fresh-start adjusted (Predecessor) at Jul. 01, 2018 | 154 | 0 | 0 | 0 | 0 | 0 | 154 | |
Ending Balance, Shares (Predecessor) at Jul. 01, 2018 | 1,008,000,000 | |||||||
Ending balance (Predecessor) at Jul. 01, 2018 | 2,981 | 2,720 | 3,322 | 1,956 | 27 | (3,593) | 261 | |
Ending balance at Jul. 01, 2018 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Successor common stock | 1,080 | |||||||
Ending Balance, Shares at Jul. 02, 2018 | 10,000,000 | |||||||
Ending balance at Jul. 02, 2018 | 3,655 | 3,501 | 3,491 | 0 | 0 | 0 | 154 | |
Beginning Balance, shares (Predecessor) at Jul. 01, 2018 | 1,008,000,000 | |||||||
Beginning balance (Predecessor) at Jul. 01, 2018 | 2,981 | 2,720 | 3,322 | 1,956 | 27 | (3,593) | 261 | |
Beginning balance at Jul. 01, 2018 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cash settlement of vested restricted stock units | 0 | |||||||
Other comprehensive income (loss) | (7) | (7) | (7) | |||||
Revaluation of redeemable non-controlling interest | (9) | (9) | (9) | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest, Excluding Redeemable Noncontrolling Interest | (604) | (602) | (602) | (2) | ||||
Net loss | $ (605) | |||||||
Ending Balance, Shares at Dec. 31, 2018 | 100,000,000 | 10,000,000 | ||||||
Ending balance at Dec. 31, 2018 | $ 3,035 | $ 2,883 | $ 3,491 | $ 0 | $ (7) | $ (611) | $ 152 |
General information |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General information | General information Seadrill Limited is incorporated in Bermuda and is a publicly listed company on the New York Stock Exchange and the Oslo Stock Exchange. We provide offshore drilling services to the oil and gas industry. As at December 31, 2018 we owned and operated 35 offshore drilling units and an option to acquire on semi-submersible rig. Our fleet consists of drillships, jack-up rigs and semi-submersible rigs for operations in shallow and deepwater areas, as well as benign and harsh environments. We also provide management services to our related parties Seadrill Partners, Northern Drilling and SeaMex. As used herein, the term "Predecessor" refers to the financial position and results of operations of Seadrill Limited prior to, and including, July 1, 2018. This is also applicable to terms "we", "our", "Group" or "Company" in context of events prior to, and including, July 1, 2018. As used herein, the term "Successor" refers to the financial position and results of operations of Seadrill Limited (previously "New Seadrill") after July 1, 2018. This is also applicable to terms "Seadrill Limited", "we", "our", "Group" or "Company" in context of events after July 1, 2018. The use herein of such terms as "Group", "organization", "we", "us", "our" and "its", or references to specific entities, is not intended to be a precise description of corporate relationships. Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar ("U.S. dollar" or "US$") rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which we control, or directly or indirectly holds more than 50% of the voting control are consolidated in the Consolidated Financial Statements, as well as certain variable interest entities of which we are deemed to be the primary beneficiary. Basis of consolidation The Consolidated Financial Statements include our assets and liabilities, our majority owned and controlled subsidiaries and certain variable interest entities, (“VIE”s) in which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic success, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. We have certain investments in the common stock or in-substance common stock of associated companies. Refer to Note 2 – Accounting policies for further information on our equity investments. Bankruptcy accounting As set out in Note 4 - Chapter 11 Proceedings, we operated as a debtor-in-possession from September 12, 2017 to July 2, 2018. During this period, we prepared our Consolidated Financial Statements under Accounting Standards Codification 852, Reorganizations ("ASC 852"). ASC 852 required that the financial statements distinguished transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings were recorded in “Reorganization items" on our Consolidated Statements of Operations. In addition, ASC 852 required changes in the accounting and presentation of significant items on the Consolidated Balance Sheets, particularly liabilities. Pre-petition obligations that may have been impacted by the Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". Fresh Start Reporting Upon emergence from bankruptcy on July 2, 2018 (the "Effective Date"), in accordance with ASC 852 related to fresh start reporting, Seadrill Limited became a new entity for financial reporting purposes. Upon adoption of fresh start reporting, our assets and liabilities were recorded at their fair values. We elected to apply fresh start reporting effective July 2, 2018 (the “Convenience Date”) to coincide with the timing of our normal third quarter reporting period. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and use of an accounting convenience date was appropriate. The fair values of our assets and liabilities differed materially from the recorded values of our assets and liabilities as reflected in the Predecessor historical Consolidated Balance Sheets. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related predominantly deferred tax effects through "Income tax expense", during the period from January 1, 2018 through July 1, 2018. Accordingly, our Consolidated Financial Statements subsequent to July 2, 2018 are not and will not be comparable to the Predecessor Consolidated Financial Statements prior to the Convenience Date. Our Consolidated Financial Statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented on July 2, 2018 and dates prior. Our financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material. Going concern In our Form 20-F covering our annual report for the fiscal year ended December 31, 2017, issued on April 12, 2018, we reported that uncertainties linked to our Chapter 11 Re-organization gave rise to a substantial doubt over our ability to continue as a going concern for a period of at least twelve months after the date the financial statements were issued. As set out in Note 4 - Chapter 11 Proceedings, we emerged from the Chapter 11 and completed our plan of reorganization on July 2, 2018. This addressed our liquidity concerns as it provided for $1.08 billion of new capital, extinguished approximately $2.4 billion in unsecured bond obligations and approximately $250 million in unsecured interest rate and currency swaps, eliminated near-term amortization obligations and extended maturities on debt. We emerged from Chapter 11 with $2.2 billion of post emergence cash and $7.6 billion of outstanding debt principal. We believe that cash on hand, liquid investments, contract and other revenues will generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next twelve months. Therefore, there is no longer a substantial doubt over our ability to continue as a going concern for at least the twelve months after the date the financial statements are issued. Out of period adjustment The financial statements for the period from January 1, 2018 through July 1, 2018 (Predecessor) include an income tax expense of $18 million due to an adjustment in the income tax charge for a subsidiary related to prior years. We considered the effect of this prior period correction not to be material in the context of the overall results for the period from January 1, 2018 through July 1, 2018 (Predecessor), the year ended December 31, 2017 (Predecessor), or to any previously reported quarterly or annual financial statements. |
Accounting policies |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting policies | Accounting policies The accounting policies set out below have been applied consistently to all periods in these Consolidated Financial Statements, unless otherwise noted. Use of estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign currencies The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby the Statement of Operations are translated using the average exchange rate for the year and the assets and liabilities are translated using the year-end exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders' equity. Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. Refer to Note 30 – Related Party Transactions. Revenue from contracts with customers The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments. We recognize consideration for activities that correspond to a distinct time increment within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment, ratably over the estimated contract term. We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess these estimates each reporting period as required. Refer to Note 7 - Revenue from Contracts with Customers. Dayrate Drilling Revenue - Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term, and therefore, recognized in line with the contractual rate billed for the services provided for any given hour. Mobilization Revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract. Demobilization Revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions. Revenues Related to Reimbursable Expenses - We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations. Contract Balances - Accounts receivable is recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Contract asset balances consist primarily of demobilization revenues which have been recognized during the period but are contingent on future demobilization activities. Contract liabilities include payments received for mobilization as well as rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. Local Taxes - In some countries, the local government or taxing authority may assess taxes on our revenues. Such taxes may include sales taxes, use taxes, value-added taxes, gross receipts taxes and excise taxes. We generally record tax-assessed revenue transactions on a net basis. Deferred Contract Costs - Certain direct and incremental costs incurred for upfront preparation, initial mobilization and modifications of contracted rigs represent costs of fulfilling a contract as they relate directly to a contract, enhance resources that will be used in satisfying our performance obligations in the future and are expected to be recovered. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Other revenues Other revenues consist of related party revenues, external management fees, and early termination fees. Refer to Note 8 – Other revenues. Related party revenues - Related party revenues relate to management support and administrative services provided to Seadrill Partners, Northern Drilling and SeaMex. External management fees relate to the operational, administrative and support services provided to third parties. External management fees - External management fees relate to the operational, administrative and support services that we previously provided to Sapura Energy as part of the agreement that we entered into when we sold majority of the tender rig business. Early termination fees - Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved. Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked and include the remuneration of offshore crews and related costs, rig supplies, insurance costs, expenses for repairs and maintenance and costs for onshore support personnel. We expense such costs as incurred. On emergence, we classified certain costs as "vessel and rig operating expenses" that are directly attributable to rig activities and had previously been classified as "general and administrative expenses" in our Consolidated Statements of Operations. Mobilization and demobilization expenses We incur costs to prepare a drilling unit for a new customer contract and to move the rig to a new contract location. We capitalize the mobilization and preparation costs for a rig's first contract as a part of the rig value and recognize them as depreciation expense over the expected useful life of the rig (i.e. 30 years). For subsequent contracts, we defer these costs over the expected contract term (see deferred contract costs above), unless we don't expect the costs to be recoverable, in which case we expense them as incurred. We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized and amortized over the anticipated period between overhauls, which is generally five years. Related costs are primarily yard costs and the cost of employees directly involved in the work. We include amortization costs for periodic overhauls in depreciation expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. Income taxes Seadrill is a Bermuda company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – Taxation. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authorities widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. Earnings per share Basic earnings per share (“EPS”) is calculated based on the income/(loss) for the period available to common stockholders divided by the weighted average number of shares outstanding for basic EPS for the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments such as our restricted stock units. The determination of dilutive earnings per share may require us to make adjustments to net income and the weighted average shares outstanding. Refer to Note 13 – Loss per share. Current and non-current classification Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments whose fair value is a net liability as current. Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal and we classify any derivatives financial instruments whose fair value is a net asset as non-current. Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less. Restricted cash Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets. Refer to Note 14 – Restricted cash. Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. We establish reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, we consider the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. Interest income on receivables is recognized as earned. Refer to Note 16 – Accounts receivable. Equity investments Investments in common stock are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are also considered. We classify our other equity investments either as "Marketable Securities" or "Investments in Associated Companies" depending on their nature. We classify our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". We record gains or losses on investments held fair value as "Gains / (losses) on Marketable Securities". Refer to Note 15 – Marketable securities and Note 18 – Investment in associated companies. We analyze our equity method investments for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. All other equity investments, which consist of investments that do not gives us the ability to exercise significant influence as well as investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. If we can’t readily ascertain the fair value, we record the investment at cost less impairment. We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that indicates that the investment's is impaired. If an event or change in circumstances has occurred in that period that indicates that the investment's is impaired, then we record an impairment charge for the difference between the estimated fair value of the investment and its carrying amount. For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date. Refer to Note 11 - Impairment loss on marketable securities and investments in associated companies for details. Newbuildings Generally, the carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components usually include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. During construction, capitalized interest of newbuildings is based on accumulated expenditures for the applicable project at our current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying the interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period. We don't capitalize amounts beyond the actual interest expense incurred in the period. We ceased capitalization of interest on newbuildings when we operated as a debtor-in-possession as interest payments made during bankruptcy proceedings were treated as adequate protection payments. On emergence from Chapter 11, the Newbuildings carrying value was adjusted to a fair value of nil. In addition, we have not capitalized interest since emergence as work on our Newbuild projects had substantially ceased. Refer to Note 5 – Fresh Start Accounting and Note 19 – Newbuildings. Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jack-up rigs, when new, is 30 years. Significant investments are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Refer to Note 20 – Drilling units. Drilling units recognized through a business combination or through the application of fresh start accounting are measured at fair value as of the date of acquisition or the date of emergence, respectively. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. Assets held for sale Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. On emergence from Chapter 11, we no longer had any assets classified as held for sale. Refer to Note 36 – Assets held for sale. Equipment Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between 3 and 5 years depending on the type of asset. Refer to Note 21 – Equipment. Impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. We first assess recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to result from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, will be the amount which the carrying value of the asset exceeds the discounted future net cash flows. Refer to Note 20 – Drilling units. Other intangible assets and liabilities Intangible assets and liabilities were recorded at fair value on the date of emergence less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. For periods after emergence we have applied a new accounting policy to classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 17 – Other assets. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 23 – Other liabilities. Prior to emergence, we classified the amortization of these intangible assets or liabilities within other revenues. Derivative financial instruments and hedging activities On emergence from Chapter 11, we have an interest-rate cap financial instrument that has not been formally designated as a hedge and is recorded at fair value. Changes in the fair value are recorded as a gain or loss as a separate line item within "financial items" in the Consolidated Statements of Operations. Refer to Note 31 – Financial instruments and risk management and Note 32 - Fair values of financial instruments. Trade payables Trade payables are recorded in the balance sheet to recognize a liability to a supplier for a good or service they have provided us. Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan and the amortization is included in interest expense. On emergence from Chapter 11, our loan costs were reduced to nil and we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount will be unwound over the remaining terms of the debt facilities. Refer to Note 5 – Fresh Start Accounting and Note 10 – Interest expense. Debt We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we will incur a liability for the principal to be repaid. On emergence from Chapter 11, we issued new debt instruments and the carrying values of our third-party debt liabilities were adjusted to fair value. Refer to Note 5 – Fresh start accounting and Note 22 – Debt for more information on our debt instruments. Pension benefits We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We record the service cost, as “Vessel and rig operating expenses” or as "General and administrative expenses" in our Consolidated Statements of Operations depending on the whether or not the related employee's role is directly attributable to rig activities. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Refer to Note 29 - Pension benefits for more information on the accounting for these pension benefits / pension expense. Loss contingencies We recognize a loss contingency in the Consolidated Balance Sheet where we have a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Refer to Note 33 – Commitments and contingencies. Treasury shares Treasury shares are recognized at cost as a component of equity. We record the nominal value of treasury shares purchased as a reduction in share capital. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. On emergence from Chapter 11, we no longer have any treasury shares. Share-based compensation On emergence from Chapter 11, we had one Restricted Stock Unit (“RSU”) plan where the holder of an award is entitled to receive shares if still employed at the end of the three-year vesting period. There is no requirement for the holder to pay for the share on grant or vesting of the award. The fair value of the RSU award is calculated as the market share price on grant date. The fair value of the awards expected to vest is recognized as compensation cost straight-line over the vesting period. We have made the election to account for forfeitures on an actual basis as they occur. Refer to Note 28 – Share Based Compensation. |
Recent Accounting Standards |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Standards | Recent Accounting Standards We adopted the following accounting standard updates ("ASUs") in the year: ASU 2014-09 - Revenue from contracts with customers In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. We adopted ASU 2014-09 and its related amendments, or collectively Topic 606, effective January 1, 2018 using the modified retrospective method. Accordingly, we have applied the five-step method outlined in Topic 606 for determining when and how revenue is recognized to all contracts that were not completed as of the date of adoption. Revenues for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported under the previous revenue recognition guidance. For contracts that were modified before the effective date, we have considered the modification guidance within the new standard and determined that the revenue recognized and contract balances recorded prior to adoption for such contracts were not impacted. While Topic 606 requires additional disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, its adoption has not had a material impact on the measurement or recognition of our revenues. As we have transitioned to the new standard under the modified retrospective method, we have recorded the cumulative impact of applying the new guidance as an adjustment to opening retained earnings on January 1, 2018. The total adjustment was $7 million which represented the earned portion of demobilization revenue expected to be received for contracts not completed as of December 31, 2017, which was not previously recognized until demobilization occurred. See Note 7 - Revenue from contracts for further information. ASU 2016-01 Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which made targeted improvements to the recognition and measurement of financial assets and financial liabilities. The update changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. The standard does not change the guidance for classifying and measuring investments in debt securities. After adopting ASU 2016-01 we continue to record equity investments that do not result in consolidation and are not accounted for under the equity method at fair value (unless the fair value is not readily ascertainable). However, we will record changes in fair value directly to net income whereas previously we recorded such changes to other comprehensive income until realized. We have made the election available under ASC 321-10-35-2 to record equity investments with no readily ascertainable fair value at cost less impairment. We transitioned to the new standard using the modified retrospective approach. Accordingly, we recorded the cumulative effect of adopting the update at the date of adoption. We reclassified $31 million of previously recognized fair value gains from accumulated other comprehensive income to retained earnings on January 1, 2018. ASU 2016-16 Income Taxes - Income taxes intra-entity transfers of assets other than inventory In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Income taxes Intra-Entity Transfers of Assets other than Inventory, which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period that the sale or transfer occurs. The exception to recognizing the income tax effects of intercompany sales or transfers of assets remains in place for intercompany inventory sales and transfers, i.e. companies will still be required to defer the income tax effects of intercompany inventory transactions. We adopted the new standard effective January 1, 2018 under the modified retrospective approach. As a result of the modified retrospective application, “Other Assets” was reduced in our Condensed Consolidated Balance Sheet with a cumulative adjustment to retained earnings of $59 million and non-controlling interests of $25 million. ASU 2016-18 Statement of Cash Flows - Restricted Cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, to address classification of activity related to restricted cash and restricted cash equivalents in the cash flows. The standard eliminates the presentation of transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents and restricted cash equivalents are presented in more than one line item on the balance sheet, a reconciliation of the totals in the cash flows to the related captions in the balance sheet are required, either on the face of the cash flow or in the notes to the Consolidated Financial Statements. Additional disclosures are required for the nature of the restricted cash and restricted cash equivalents. The standard is effective for fiscal years beginning after 15 December 2017. We have adopted the new standard effective January 1, 2018 under the retrospective approach. The result of this adoption was a classification adjustment on our Consolidated Statement of Cash Flows for each of the years presented. Other ASUs We adopted the following ASUs in the year, none of which had any impact on our Consolidated Financial Statements and related disclosures:
ASU 2018-02 Income Statement—Reporting Comprehensive Income (Topic 220)
Recently Issued Accounting Standards The FASB have issued the following ASUs that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods.
ASU 2016-02 - Leases (also 2018-01, 2018-10, 2018-11. 2018-20) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update required an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offered specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal year, using a modified retrospective application. Effective January 1, 2019, we will adopt Topic 842 using the modified retrospective application through a cumulative-effect adjustment to retained earnings at January 1, 2019. We have elected the following transition practical expedients, which will be applied consistently to all leases that commenced before January 1, 2019:
We have determined that our drilling contracts contain a lease component, however, we have elected not to separate the drilling contract lease and non-lease components. We have determined that the non-lease component in our drilling contracts is the predominant component. As such, we will continue to account for our drilling contracts under the guidance in Topic 606. We do not expect our pattern of revenue recognition to change significantly compared to current accounting standards. We have determined that adoption of this standard will result in increased disclosure of our leasing arrangements. Additionally, we will recognize lease liabilities and corresponding right-of-use assets for leasing arrangements where we are a lessee. We expect to recognize an aggregate lease liability of between $20 million to $40 million on adoption. We have provided a summary of our commitments under operating leases at December 31, 2018 in Note 34 - Operating leases. ASU 2016-13 - Financial Instruments - Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted only from January 1, 2019. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as at the beginning of the first reporting period in which the guidance is adopted. We are in the early stage of evaluating the impact of this standard update. Our customers are international oil companies, national oil companies and large independent oil companies. Our financial assets are primarily held with counter parties with high credit standing and we have historically had a low incidence of bad debt expense. Therefore, we do not currently expect this guidance to significantly affect our Consolidated Financial Statements and related disclosures when we adopt it. ASU 2018-07 Compensation - Stock Compensation In June 2018, the FASB issued ASU 2018-07, Stock Compensation (Topic 718): Improvements to non-employee share-based payment accounting, which intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-13 Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity’s financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans- General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity’s financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-15 Intangibles In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). The update is intended to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-16 Derivatives and Hedging In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The update is intended to permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the direct Treasury obligations of the U.S. government, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association Municipal Swap Rate. The guidance will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted if an entity has already adopted ASU 2017-12. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-17 Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The update is intended to improve general purpose financial reporting by considering indirect interests held through related parties in common control arrangements on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we will adopt ASU 2018-17 on a prospective basis and apply the amendments in the update to qualifying new or redesignated hedging relationships entered into on or after January 1, 2019. We do not expect this to have a material impact on our Consolidated Financial Statements and related disclosures. Other accounting standard updates issued by the FASB As of March 28, 2019, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods. |
Chapter 11 Proceedings |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chapter 11 Proceedings | Chapter 11 Proceedings In this note we have provided an overview of our Chapter 11 Reorganization and related transactions. Overview Prior to the filing of Chapter 11 Proceedings (as defined below), we were engaged in extensive discussions with our secured lenders, certain holders of our unsecured bonds and potential new money investors regarding the terms of a comprehensive restructuring. The objectives of the restructuring were to build a bridge to a recovery and achieve a sustainable capital structure. To achieve this, we had proposed an extension to our bank maturities, reduced debt amortization payments, amendments to financial covenants and raising of new capital. On September 12, 2017, Old Seadrill Limited, certain of its subsidiaries (together "the Company Parties") and certain Ship Finance companies entered into a restructuring support and lock-up agreement ("RSA") with a group of bank lenders, bondholders, certain other stakeholders, and new-money providers. In connection with the RSA, the Company Parties entered into an "Investment Agreement" under which Hemen Investments Limited, an affiliate of Old Seadrill Limited's largest shareholder Hemen Holding Ltd. and certain other commitment parties, committed to provide $1.06 billion in new cash commitments, subject to certain terms and conditions (the "Capital Commitment"). On September 12, 2017, to implement the transactions contemplated by the RSA and Investment Agreement, Old Seadrill Limited and certain of its subsidiaries (the "Debtors") commenced prearranged reorganization proceedings (the "Chapter 11 Proceedings") under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas Victoria Division. During the bankruptcy proceedings, the Debtors continued to operate the business as debtors in possession. After September 12, 2017, the Debtors negotiated with their various creditors and on February 26, 2018 announced a "Global Settlement", following which there were amendments to the RSA and Investment Agreement. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.08 billion, increased recoveries for general unsecured creditors under the Plan and an agreement regarding allowed claims from certain newbuild shipyards. On February 26, 2018, the Debtors filed a proposed Second Amended Joint Chapter 11 Plan of Reorganization (the "Plan") with the Bankruptcy Court. The Plan was confirmed by the Bankruptcy Court on April 17, 2018. The Plan became effective and the Debtors emerged from Chapter 11 Proceedings on July 2, 2018 (the "Effective Date"). The Plan extinguished approximately $2.4 billion in unsecured bond obligations, more than $1.0 billion in contingent newbuild obligations, substantial unliquidated guarantee obligations, and approximately $250 million in unsecured interest rate and currency swap claims, while extending near term debt maturities, providing Seadrill with over $1.0 billion in new capital and leaving employee, customer and ordinary trade claims largely unimpaired. Key terms of the Plan of Reorganization As set out above, the Plan was confirmed by the Bankruptcy Court on April 17, 2018 and became effective when the Debtors emerged from Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that:
This is summarized in the below table:
Reorganization items Expenses and income directly associated with the Chapter 11 cases are reported separately in the Consolidated Statement of Operations as "Reorganization items" as required by ASC 852, Reorganizations. This category was used to reflect the net expenses and gains and losses that are the result of the reorganization of the business. The following table summarizes the components included within reorganization items:
Advisory and professional fees - Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 filing. New investor commitment fees - Commitment fee of 5% of the committed funds agreed under the terms of the investment agreement. Loss on Newbuilding global settlement claim - Under the Bankruptcy Code, the Debtors had the right to reject certain contracts, subject to the approval of the Bankruptcy Court and certain other conditions. Subject to certain exceptions, this rejection relieves the debtor from performing its future obligations under the contract but entitles the counterparty to assert a pre-petition general unsecured claim for damages. As part of the Global Settlement Agreement, it was agreed that the Debtors would reject and terminate the newbuild contracts for the drillships West Dorado, West Libra, West Aquila and West Libra. In return the newbuild shipyards Samsung and DSME received an allowed claim for $1,064 million. In addition to the re-organization expense shown above, we also recorded a non-cash impairment charge against these Newbuild assets of $696 million at December 31, 2017. Refer to Note 19 - Newbuildings for further details. Gain on liabilities subject to compromise - On emergence from Chapter 11 we settled our liabilities subject to compromise in accordance with the Plan. This includes settlement on our unsecured bonds, Newbuild global settlement claim (see above) and interest rate and cross-currency interest rate swaps. Refer to Note 5 – Fresh Start Accounting for further information. Fresh start valuation adjustments - On emergence from Chapter 11, our assets and liabilities were recorded at fair value in accordance with ASC 852 related to fresh start reporting. The effects of the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – Fresh Start Accounting for further information. Write-off of debt issuance costs - On filing for Chapter 11, $66 million of unamortized debt issuance costs on the impaired secured credit facilities and unsecured bonds were expensed. Reversal of credit risk on derivatives - The filing for Chapter 11 triggered an event of default under our derivative agreements, and therefore our interest rate and cross-currency interest rate swaps were held at a terminated value. As such, any credit risk adjustment on these arrangements was taken to the Consolidated Statement of Operations. Interest income on surplus cash invested - Interest income recognized on cash held within entities that had filed for Chapter 11. Fresh Start Accounting Fresh Start Accounting Upon emergence from bankruptcy, we applied fresh start accounting to our financial statements in accordance with the provision set forth in ASC852 as (i) the holders of existing voting shares of the Company prior to emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims. We elected to apply fresh start accounting effective July 2, 2018 (the "Convenience Date"), to coincide with the timing of the normal third quarter reporting period, which resulted in Seadrill becoming a new entity for financial reporting purposes. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and that the use of an accounting Convenience Date of July 1, 2018 was appropriate. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items" during the period from January 1, 2018 through July 1, 2018. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Consolidated Financial Statements for the period after July 2, 2018 (the “Successor”) will not be comparable with the Consolidated Financial Statements prior to that date. Reorganization Value Reorganization value represents the fair value of the Successor Company’s total assets and is intended to approximate to the amount a willing buyer would pay for the assets immediately after restructuring. Under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values. The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of between $10.2 billion and $11.8 billion. We derived the reorganization value based on the mid-point of this range of estimated distributable values. This was approximately $11.0 billion. Fair values are inherently subject to significant uncertainties and contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, and financial projections will be realized, and actual results could vary materially. Valuation of Drilling Units Our principal assets comprise our fleet of drilling units. With the assistance of valuation experts, we determined a fair value of these drilling units based primarily on an income approach utilizing a discounted cash flow analysis. We established an estimate of future cash flows for the period ranging from emergence to the end of life for each rig and discounted the estimated future cash flows to present value. The expected cash flows used in the discounted cash flows were derived from earnings forecasts and assumptions regarding growth and margin projections. A discount rate of 11.4% was estimated based on an after-tax weighted average cost of capital ("WACC") reflecting the rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the overall uncertainty of the financial projects used to estimate future cash flows. We used a replacement cost approach to value capital spares and other property plant, and equipment. Valuation of Equity Method Investments The fair value of equity method investments was derived using an income approach, which discounts future free cash flows. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
The discounted cash flow model derived an enterprise value of the investments, after which associated net debt was subtracted to provide equity values. The implied valuation of the direct ownership interests in Seadrill Partners derived from the discounted cash flow model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is an implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered. Valuation of debt We recorded third party and related party debt obligations at a fair value of $7.3 billion which we determined using an income approach. We are amortizing the difference between the $7.6 billion face amount and the fair value recorded in fresh start accounting over the life of the debt. We estimated the fair value of the debt using Level 2 inputs. Reconciliation of distributable value to fair value of Successor common stock The following table reconciles the distributable value to the estimated fair value of Successor common stock as at the Effective Date:
Reorganization value and distributable value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumption will be realized. The following table reconciles the distributable value to the estimated reorganization value as at the Effective Date:
Consolidated Balance Sheet The adjustments included in the following Consolidated Balance Sheet reflect the effects of the consummation of the transactions contemplated by the Reorganization Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs.
Reorganization Adjustments:
(1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of New Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest.
(e) Liabilities subject to compromise were settled as follows in accordance with the Plan:
Fresh Start Adjustments
(p) Adjustment to the drilling units to record the fair value of the rigs and capital spares utilizing a combination of income-based and market-based approaches. The discount rate of 11.4% was used for the discounted cash flow analysis under the income-based approach. A cost-based approach was utilized to determine the fair value for the capital spares.
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fresh Start Accounting | Chapter 11 Proceedings In this note we have provided an overview of our Chapter 11 Reorganization and related transactions. Overview Prior to the filing of Chapter 11 Proceedings (as defined below), we were engaged in extensive discussions with our secured lenders, certain holders of our unsecured bonds and potential new money investors regarding the terms of a comprehensive restructuring. The objectives of the restructuring were to build a bridge to a recovery and achieve a sustainable capital structure. To achieve this, we had proposed an extension to our bank maturities, reduced debt amortization payments, amendments to financial covenants and raising of new capital. On September 12, 2017, Old Seadrill Limited, certain of its subsidiaries (together "the Company Parties") and certain Ship Finance companies entered into a restructuring support and lock-up agreement ("RSA") with a group of bank lenders, bondholders, certain other stakeholders, and new-money providers. In connection with the RSA, the Company Parties entered into an "Investment Agreement" under which Hemen Investments Limited, an affiliate of Old Seadrill Limited's largest shareholder Hemen Holding Ltd. and certain other commitment parties, committed to provide $1.06 billion in new cash commitments, subject to certain terms and conditions (the "Capital Commitment"). On September 12, 2017, to implement the transactions contemplated by the RSA and Investment Agreement, Old Seadrill Limited and certain of its subsidiaries (the "Debtors") commenced prearranged reorganization proceedings (the "Chapter 11 Proceedings") under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas Victoria Division. During the bankruptcy proceedings, the Debtors continued to operate the business as debtors in possession. After September 12, 2017, the Debtors negotiated with their various creditors and on February 26, 2018 announced a "Global Settlement", following which there were amendments to the RSA and Investment Agreement. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.08 billion, increased recoveries for general unsecured creditors under the Plan and an agreement regarding allowed claims from certain newbuild shipyards. On February 26, 2018, the Debtors filed a proposed Second Amended Joint Chapter 11 Plan of Reorganization (the "Plan") with the Bankruptcy Court. The Plan was confirmed by the Bankruptcy Court on April 17, 2018. The Plan became effective and the Debtors emerged from Chapter 11 Proceedings on July 2, 2018 (the "Effective Date"). The Plan extinguished approximately $2.4 billion in unsecured bond obligations, more than $1.0 billion in contingent newbuild obligations, substantial unliquidated guarantee obligations, and approximately $250 million in unsecured interest rate and currency swap claims, while extending near term debt maturities, providing Seadrill with over $1.0 billion in new capital and leaving employee, customer and ordinary trade claims largely unimpaired. Key terms of the Plan of Reorganization As set out above, the Plan was confirmed by the Bankruptcy Court on April 17, 2018 and became effective when the Debtors emerged from Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that:
This is summarized in the below table:
Reorganization items Expenses and income directly associated with the Chapter 11 cases are reported separately in the Consolidated Statement of Operations as "Reorganization items" as required by ASC 852, Reorganizations. This category was used to reflect the net expenses and gains and losses that are the result of the reorganization of the business. The following table summarizes the components included within reorganization items:
Advisory and professional fees - Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 filing. New investor commitment fees - Commitment fee of 5% of the committed funds agreed under the terms of the investment agreement. Loss on Newbuilding global settlement claim - Under the Bankruptcy Code, the Debtors had the right to reject certain contracts, subject to the approval of the Bankruptcy Court and certain other conditions. Subject to certain exceptions, this rejection relieves the debtor from performing its future obligations under the contract but entitles the counterparty to assert a pre-petition general unsecured claim for damages. As part of the Global Settlement Agreement, it was agreed that the Debtors would reject and terminate the newbuild contracts for the drillships West Dorado, West Libra, West Aquila and West Libra. In return the newbuild shipyards Samsung and DSME received an allowed claim for $1,064 million. In addition to the re-organization expense shown above, we also recorded a non-cash impairment charge against these Newbuild assets of $696 million at December 31, 2017. Refer to Note 19 - Newbuildings for further details. Gain on liabilities subject to compromise - On emergence from Chapter 11 we settled our liabilities subject to compromise in accordance with the Plan. This includes settlement on our unsecured bonds, Newbuild global settlement claim (see above) and interest rate and cross-currency interest rate swaps. Refer to Note 5 – Fresh Start Accounting for further information. Fresh start valuation adjustments - On emergence from Chapter 11, our assets and liabilities were recorded at fair value in accordance with ASC 852 related to fresh start reporting. The effects of the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – Fresh Start Accounting for further information. Write-off of debt issuance costs - On filing for Chapter 11, $66 million of unamortized debt issuance costs on the impaired secured credit facilities and unsecured bonds were expensed. Reversal of credit risk on derivatives - The filing for Chapter 11 triggered an event of default under our derivative agreements, and therefore our interest rate and cross-currency interest rate swaps were held at a terminated value. As such, any credit risk adjustment on these arrangements was taken to the Consolidated Statement of Operations. Interest income on surplus cash invested - Interest income recognized on cash held within entities that had filed for Chapter 11. Fresh Start Accounting Fresh Start Accounting Upon emergence from bankruptcy, we applied fresh start accounting to our financial statements in accordance with the provision set forth in ASC852 as (i) the holders of existing voting shares of the Company prior to emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims. We elected to apply fresh start accounting effective July 2, 2018 (the "Convenience Date"), to coincide with the timing of the normal third quarter reporting period, which resulted in Seadrill becoming a new entity for financial reporting purposes. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and that the use of an accounting Convenience Date of July 1, 2018 was appropriate. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items" during the period from January 1, 2018 through July 1, 2018. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Consolidated Financial Statements for the period after July 2, 2018 (the “Successor”) will not be comparable with the Consolidated Financial Statements prior to that date. Reorganization Value Reorganization value represents the fair value of the Successor Company’s total assets and is intended to approximate to the amount a willing buyer would pay for the assets immediately after restructuring. Under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values. The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of between $10.2 billion and $11.8 billion. We derived the reorganization value based on the mid-point of this range of estimated distributable values. This was approximately $11.0 billion. Fair values are inherently subject to significant uncertainties and contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, and financial projections will be realized, and actual results could vary materially. Valuation of Drilling Units Our principal assets comprise our fleet of drilling units. With the assistance of valuation experts, we determined a fair value of these drilling units based primarily on an income approach utilizing a discounted cash flow analysis. We established an estimate of future cash flows for the period ranging from emergence to the end of life for each rig and discounted the estimated future cash flows to present value. The expected cash flows used in the discounted cash flows were derived from earnings forecasts and assumptions regarding growth and margin projections. A discount rate of 11.4% was estimated based on an after-tax weighted average cost of capital ("WACC") reflecting the rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the overall uncertainty of the financial projects used to estimate future cash flows. We used a replacement cost approach to value capital spares and other property plant, and equipment. Valuation of Equity Method Investments The fair value of equity method investments was derived using an income approach, which discounts future free cash flows. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
The discounted cash flow model derived an enterprise value of the investments, after which associated net debt was subtracted to provide equity values. The implied valuation of the direct ownership interests in Seadrill Partners derived from the discounted cash flow model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is an implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered. Valuation of debt We recorded third party and related party debt obligations at a fair value of $7.3 billion which we determined using an income approach. We are amortizing the difference between the $7.6 billion face amount and the fair value recorded in fresh start accounting over the life of the debt. We estimated the fair value of the debt using Level 2 inputs. Reconciliation of distributable value to fair value of Successor common stock The following table reconciles the distributable value to the estimated fair value of Successor common stock as at the Effective Date:
Reorganization value and distributable value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumption will be realized. The following table reconciles the distributable value to the estimated reorganization value as at the Effective Date:
Consolidated Balance Sheet The adjustments included in the following Consolidated Balance Sheet reflect the effects of the consummation of the transactions contemplated by the Reorganization Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs.
Reorganization Adjustments:
(1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of New Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest.
(e) Liabilities subject to compromise were settled as follows in accordance with the Plan:
Fresh Start Adjustments
(p) Adjustment to the drilling units to record the fair value of the rigs and capital spares utilizing a combination of income-based and market-based approaches. The discount rate of 11.4% was used for the discounted cash flow analysis under the income-based approach. A cost-based approach was utilized to determine the fair value for the capital spares.
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Segment information | Segment information Operating segments We provide drilling and related services to the offshore oil and gas industry. We have been organized into three operating segments:
Segment results are evaluated on the basis of operating income and the information given below is based on information used for internal management reporting. Revenues Operating revenues by operating segment are as follows:
Depreciation and amortization Depreciation and amortization by operating segment are as follows:
Operating (loss)/income - net (loss)/income Operating (loss)/income and (loss)/income by operating segment is as follows:
Total assets Total assets by operating segment are as follows:
Capital expenditures – fixed assets 1 Capital expenditure by operating segment are as follows:
1 The successor period includes additions to equipment Geographic segment data Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area: Revenues Revenues by geographic area are as follows:
Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area are as follows:
Major customers In the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the years ended December 31, 2017 (Predecessor) and 2016 (Predecessor), we had the following customers with contract revenues greater than 10% in any of the years presented:
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table provides information about receivables, contract assets and contract liabilities from our contracts with customers:
(1) Current contract assets and liabilities balances are included in “Other current assets” and “Other current liabilities,” respectively in our Consolidated Balance Sheets as of December 31, 2018 (Successor). Significant changes in the contract assets and the contract liabilities balances during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
Certain direct and incremental costs that are expected to be recovered, relate directly to a contract, and enhance resources that will be used in satisfying our performance obligations in the future. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Deferred contract costs during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
(1) Refer to Note 5 – Fresh Start Accounting for further information. Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilization process. Costs incurred for rig modifications or upgrades required for a contract, which are considered to be capital improvements, are capitalized as drilling and other property and equipment and depreciated over the estimated useful life of the improvement. Refer to Note 20 – Drilling units for more information. Deferred revenue - The deferred revenue balance of $12 million reported in "Other current liabilities" at December 31, 2018 (Successor) is expected to be realized within the next twelve months and $9 million reported in "Other non-current liabilities" is expected to be realized within the following next twelve months. The deferred revenue included above consists primarily of mobilization and upgrade revenue for both wholly and partially unsatisfied performance obligations as well as expected variable mobilization and upgrade revenue for partially unsatisfied performance obligations, which has been estimated for purposes of allocating across the entire corresponding performance obligations. The amounts are derived from the specific terms within drilling contracts that contain such provisions, and the expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract based on information known at December 31, 2018. The actual timing of recognition of such amounts may vary due to factors outside of our control. Practical expedient - We have applied the disclosure practical expedient in ASC 606-10-50-14A(b) and have not included estimated variable consideration related to wholly unsatisfied performance obligations or to distinct future time increments within our contracts, including dayrate revenue. The duration of our performance obligations varies by contract. Impact of Topic 606 on Financial Statement Line Items - Adopting Topic 606 did not have a material effect on the Consolidated Statement of Operations, or Consolidated Statement of Cash Flows for the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) or the Consolidated Balance Sheets as of December 31, 2018 (Successor). Refer to Note 2 – Accounting policies for more information on the recently adopted accounting pronouncements. |
Other revenues |
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Other revenues | Other revenues Other revenues consist of the following:
Related party revenues - Related party revenue relate to management support and administrative services provided during the year to Seadrill Partners, SeaMex and Northern Drilling. Refer to Note 30 - Related party transactions for more information. Amortization of unfavorable contracts - We recognize an intangible asset or liability if we acquire a drilling contract in a business combination and the contract had a dayrate that was above or below market rates at the time of the business combination. For the periods before emergence from Chapter 11 and the application of fresh start accounting, we classified the amortization of these intangible assets or liabilities within other revenues. For the periods after emergence from Chapter 11 and the application of fresh start accounting, we have applied a new accounting policy, which is to classify amortization of these intangible assets and liabilities within operating expenses. The unfavorable contract values in the Predecessor periods arose from our acquisition of Sevan Drilling Limited. External management fees - External management fees relate to the operational, administrative and support services that we provide to Sapura Energy as part of the agreement that Seadrill entered into when we sold majority of the tender rig business. As the associated rigs were not operational from April 2017 no further management fees were recognized after this date. Early termination fees - Other revenues for the period from January 1, 2018 through July 1, 2018 and the year ended December 31, 2017 and December 31, 2016 included early termination fee revenue. The termination fee revenue in the period from January 1, 2018 through July 1, 2018 relates to the fees recognized for the West Pegasus, the termination revenue in 2017 relates to the West Hercules and in 2016 to the West Hercules and West Epsilon. The total termination fee for the West Hercules was $66 million, with $58 million of revenue recognized in 2016 and remaining $8 million recognized in 2017. |
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Loss on disposals | Loss on disposals We have recognized the following loss on disposals:
Loss on disposals in 2017 (Predecessor) Sale of West Triton, West Mischief and West Resolute On April 29, 2017 we reached an agreement with Shelf Drilling to sell the West Triton, West Mischief and West Resolute for a total consideration of $225 million. The West Triton and West Resolute were delivered in May 2017, whilst the West Mischief was delivered in September 2017. The sale resulted in a loss on disposal of $166 million. Disposal of Sevan Developer contract In October 2014, Sevan entered an agreement with Cosco to defer the delivery date of the Sevan Developer for twelve months with four subsequent options to extend the date for further periods of six months, until October 2017. On October 30, 2015, April 15, 2016 and October 15, 2016 three of the options were enacted, with $26.3 million, or 5% of the contract price, plus associated costs, refunded to Sevan on each occasion. On April 27, 2017, the final delivery deferral agreement for the Sevan Developer was deferred to May 31, 2017 to finalize negotiations. As an agreement was not reached, the remaining installment of $26.3 million was refunded to Sevan, taking the delivery installment back to the $526.0 million contract price. In July 2017, Sevan and Cosco agreed to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a contract termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset and therefore derecognized the newbuild asset, which was held at $620 million, construction obligation held at $526 million, and accrued interest and other liabilities held at $19 million, resulting in a net loss on disposal of $75 million. West Rigel settlement agreement On April 5, 2018, we entered into a settlement and release agreement, subject to Bankruptcy Court approval, with Jurong in respect of the West Rigel whereby we agreed that the share of sale proceeds from the sale of the West Rigel by Jurong would be $126 million. We recognized a $2 million loss on disposal in the year ended December 31, 2017, reflecting the share of sales proceeds as the value of the asset held for sale. On May 9, 2018 the West Rigel was sold by Jurong and we received a share of proceeds totaling $126 million. |
Interest expense |
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Interest expense | Interest expense Interest expense consists of the following:
We incur cash and payment-in-kind interest on our debt facilities. This is summarized in the table below.
We are charged interest on our senior credit facilities at LIBOR plus a margin. This margin increased by one percentage point when we emerged from Chapter 11, under the terms of the Plan. There has also been an increase in LIBOR rates over the second half of 2018. Both factors increased the effective interest rate on our senior credit facilities. During the period we were in Chapter 11 (September 12, 2017 to July 1, 2018), we recorded contractual interest payments against debt held as subject to compromise ("adequate protection payments") as a reduction to debt in the Consolidated Balance Sheet and not as an expense to the Consolidated Statement of Operations. We then expensed the adequate protection payments on emergence from Chapter 11 (classified under reorganization items - see section 5 below). On emergence from Chapter 11 we issued $880 million of New Secured Notes. We incur 4% cash interest and 8% payment-in-kind interest on these notes. Our Consolidated Balance Sheet includes approximately $1 billion of debt facilities held by subsidiaries of Ship Finance that we consolidate as variable interest entities. Our interest expense includes the interest incurred by these entities on those facilities.
On emergence from Chapter 11 and application of fresh start accounting, we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount is unwound over the remaining terms of the debt facilities.
We amortize loan issuance costs over the expected term of the associated debt facility. We expensed capitalized loan issuance costs for debt subject to compromise when we filed for Chapter 11 on September 12, 2017. Loan fee amortization expense is therefore not comparable between these periods.
We capitalize the interest cost incurred to finance Newbuilds. We ceased capitalization of interest on Newbuilds when we filed for Chapter 11 on September 12, 2017. |
Impairment loss on marketable securities and investments in associated companies |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment loss on marketable securities and investments in associated companies (restated) | Impairment loss on marketable securities and investments in associated companies We have recognized the following impairments on our marketable securities and investments in associated companies:
*On emergence from Chapter 11, the carrying value of our investments in associated companies and joint ventures were adjusted to fair value resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items" for the period from January 1, 2018 through July 1, 2018 (Predecessor). For further information, refer to Note 5 - Fresh start accounting. Impairment loss recognized for the year ended December 31, 2017 (Predecessor) Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment Whilst the investments in Seadrill Partners held under the equity method are not publicly traded, the value of the publicly traded units remained lower than the carrying value ascribed to the equity method investments using managements assumptions for a sustained period. We determined this to be representative of an indicator of other than temporary impairment and performed a test of impairment at December 31, 2017. As at December 31, 2017, the carrying value of the subordinated units was found to exceed the fair value by $82 million, and the carrying value of the direct ownership interests was found to exceed the fair value by $723 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. The fair value of these investments were derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investments are primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 9.75%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The implied valuation of Seadrill Partners derived from the DCF model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is in implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered. The assumptions used in the DCF model were derived from significant unobservable inputs (representative of Level 3 inputs for Fair Value Measurement) and are based on management’s judgments and assumptions available at the time of performing the impairment test. We employ significant judgment in developing these estimates and assumptions including the following:
The underlying assumptions and assigned probabilities of occurrence for utilization and dayrate scenarios were developed using a methodology that examines historical data for each rig, which considers the rig’s age, rated water depth and other attributes and then assesses its future marketability in light of the current and projected market environment at the time of assessment. Other assumptions, such as operating, maintenance and inspection costs, are estimated using historical data adjusted for known developments and future events that are anticipated by management at the time of the assessment. Management’s assumptions are necessarily subjective and are an inherent part of our asset impairment evaluation, and the use of different assumptions could produce results that differ from those reported. Management’s assumptions involve uncertainties about future demand for our services, dayrates, expenses and other future events, and management’s expectations may not be indicative of future outcomes. Significant unanticipated changes to these assumptions could materially alter our analysis in testing an asset for potential impairment. SeaMex Limited - Impairment of investment in Joint Venture The deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates is considered to be an indicator of impairment. We determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment in SeaMex as at December 31, 2017. The fair value was derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 10.25%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $36 million. We have recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. The assumptions used in the DCF model were derived from unobservable inputs (level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. The use of different assumptions, particularly with regard to the most sensitive assumptions concerning estimated future dayrates and utilization and the assumed market participant discount rate, would have a material impact on the impairment charge recognized and our Consolidated Statement of Operations. In addition, if actual events differ from management’s estimates, or to the extent that these estimates are adjusted in the future, our financial condition and results of operations could be affected in the period of any such change of estimate. Impairment loss recognized for the year ended December 31, 2016 (Predecessor) Seadrill Partners - Common Units - Impairment of marketable securities During the period between September 30, 2015 and September 30, 2016, Seadrill Partners’ unit price fell by approximately 62%, on both a spot price and trailing three-month average basis. Management determined that the investment in Seadrill Partners’ common units was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result, we impaired the investment, recognizing an impairment charge of $153 million within "Loss on impairment of investments". This impairment charge includes a reclassification of losses previously recognized within Other Comprehensive Income. Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment As at September 30, 2016, the carrying value of the subordinated units was found to exceed the fair value by $180 million, and the carrying value of the direct ownership interests was found to exceed the fair value by $400 million. We recognized this impairment of the investments within “Loss on impairment of Investments” in the Consolidated Statement of Operations. In the period from September 30, 2016 to December 31, 2016 no additional impairment was recognized due to the increase in the value of the traded units. The assumptions used in the DCF model were derived from unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. Seadrill Partners - Member interest - Impairment of Cost method investments As at September 30, 2016, the reduction in value of the Seadrill Partners common units was determined to be an indicator of impairment of the Seadrill member interest. The fair value was determined using the Monte Carlo model, updated for applicable assumptions as at September 30, 2016. The carrying value of the investment was found to exceed the fair value by $73 million. We recognized this impairment within “Loss on impairment of Investments” in the Consolidated Statement of Operations. The assumptions used in the Monte Carlo model were derived from both observable and unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. SeaMex Limited - Impairment of investment in Joint Venture As at September 30, 2016, the deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates is considered to be an indicator of impairment. We have determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment. The fair value was derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 11%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $76 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. Itaunas Drilling, Camburi Drilling, and Sahy Drilling - Impairment of investment in Joint Venture Itaunas Drilling BV, Camburi Drilling BV and Sahy Drilling BV are joint ventures which each have a contract to construct one drillship. The joint ventures are owned 70% by Sete International (a subsidiary of Sete Brasil Participacoes SA) and 30% by us. During the year ended December 31, 2016, due to the deteriorating market conditions in the offshore drilling industry, the uncertainty around the financial condition of Sete Brasil Participacoes SA, and the uncertainty around the recoverability of the investments, we recognized an other than temporary impairment of $13 million to write down the value of these investments to nil. We recognized this impairment within “Loss on impairment of investments” in the Consolidated Statement of Operations. Investment in associated companies We have the following investments in associated companies:
SDLP investments SDLP investments consist of the following: (a) Subordinated units - Our holdings of subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners. Upon the expiration of the subordination period, the subordinated units will convert into Common Units. Our holding in the subordinated units represents 18% of the limited partner interests in Seadrill Partners. (b) Direct ownership interests - All of our direct ownership interests in subsidiaries of Seadrill Partners are accounted for under the equity method. We deem these investments to represent significant influence over the investees through their voting rights and by virtue of Seadrill’s representation on the Board of Seadrill Partners. We hold ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2018:
(c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill member interest and Incentive Distribution Rights (“IDR’s”) on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost less impairment. Seabras Sapura Seabras Sapura is 50% owned by Sapura Energy, and 50% owned by Seadrill. We account for our 50% investment in Seabras Sapura under the equity method. SeaMex We own a 50% equity interest in SeaMex. The remaining 50% is owned by Fintech. We account for our 50% investment in the joint venture under the equity method. Share in results from associated companies Our share in results of our associated companies (net of tax) were as follows:
Summary of Consolidated Statements of Operations for our equity method investees On emergence from bankruptcy, our equity method investments were measured at fair value which resulted in a different basis from the underlying carrying values of the investees' net assets at the date of emergence. The basis differences comprise of (i) drilling unit basis differences which are depreciated over the remaining useful life of the associated asset and (ii) contract basis differences which are amortized over the remaining term of the contract. The unwinding of the basis difference is recognized as a "Share in results from associated companies" in the Consolidated Statement of Operations. The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
The results of the Seabras Sapura companies and our share in those results (net of tax) were as follows:
The results of the SeaMex companies and our share in those results (net of tax) were as follows:
Book value of our investments in associated companies At the year end, the book values of our investments in our associated companies were as follows:
Quoted market prices for all of our other equity investments are not available because, other than Seadrill Partners Common Units, these companies are not publicly traded. Seadrill Partners subordinated units are not traded as we own 100% of them and hence have no quoted market price. Summarized Consolidated Balance sheets for our equity method investees The summarized balance sheets of the directly owned SDLP companies at the year and our share of recorded equity in those companies was as follows:
(1) Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. The summarized balance sheets of the Seabras Sapura companies at the year and our share of recorded equity in those companies was as follows:
The summarized balance sheets of the SeaMex companies at the year and our share of recorded equity in those companies was as follows:
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxation | Taxation Income taxes consist of the following:
The effective tax rate for the period from July 2, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through July 1, 2018 (Predecessor) was (1.3)% and (0.8)% respectively. For the years ended December 31, 2017 (Predecessor) and December 31, 2016 (Predecessor) the rate was (2.2)% and 452.3%. The rate reflects no tax relief on the majority of the following items within the Statement of Operations, due to these items largely falling within the zero tax rate Bermudan companies:
There was additionally no tax relief on the $696 million impairment of newbuildings recognized within 'Impairment of long lived assets' on the Statement of Operations in the year ended December 31, 2017 (Predecessor). We are incorporated in Bermuda, where a tax exemption has been granted until 2035. Other jurisdictions in which we and our subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, we may pay tax within some jurisdictions even though it might have losses in others. The income taxes for the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the years ended December 31, 2017 (Predecessor) and 2016 (Predecessor) differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows:
During the year ended December 31, 2015, we reviewed our assertion of indefinite reinvestment of unremitted earnings of subsidiaries and determined that we no longer consider such earnings to be indefinitely reinvested. As at December 31, 2018 (Successor) we have recognized a deferred tax liability balance of $27 million (December 31, 2017 (Predecessor): $37 million). Deferred income taxes Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets/(liabilities) consist of the following: Deferred tax assets:
Deferred tax liabilities:
As at December 31, 2018 (Successor), deferred tax assets related to net operating loss (“NOL”) carry forwards was $263 million (December 31, 2017 (Predecessor): $255 million), which can be used to offset future taxable income. NOL carry forwards which were generated in various jurisdictions, include $257 million (December 31, 2017 (Predecessor): $248 million) that will not expire and $6 million (December 31, 2017 (Predecessor): $7 million) that will expire between 2018 and 2037 if unutilized. As at December 31, 2018 (Successor), deferred tax liability related to intangibles from the application of fresh start accounting was $34 million (December 31, 2017: nil). We establish a valuation allowance for deferred tax assets when it is more likely than not that the benefit from the deferred tax asset will not be realized. The amount of deferred tax assets considered realizable could increase or decrease in the near-term if our estimates of future taxable income change. Our valuation allowance consists of $242 million on NOL carry forwards as at December 31, 2018 (Successor) (December 31, 2017 (Predecessor): $216 million). Uncertain tax positions As at December 31, 2018 (Successor), we had uncertain tax positions of $132 million excluding interest and penalties of $26 million, of which $1 million was included in other current liabilities and $73 million was included in other non-current liabilities, and $58 million was presented as a reduction of deferred tax assets. The changes to our uncertain tax positions were as follows:
Accrued interest and penalties totalled $26 million and $12 million as of December 31, 2018 (Successor) and December 31, 2017 (Predecessor) respectively and were included in "Other liabilities" on our Consolidated Balance Sheet. We recognized expenses of $11 million and $3 million during the period from July 2, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through July 1, 2018 (Predecessor), respectively ($10 million expense recognized in the year ended December 31, 2017 (Predecessor) and $2 million in the year ended December 31, 2016 (Predecessor)), related to interest and penalties for unrecognized tax benefits on the income tax expense line in the accompanying Consolidated Statement of Operations. As of December 31, 2018 (Successor) has recognized liabilities for uncertain tax positions including interest and penalties of $100 million. In the event that these issues are resolved for amounts less than provided, there would be a favorable impact on the effective tax rate. The increase in our uncertain tax position was largely due to US taxes following a recently identified interpretation of the US tax code that appears to be an unintended consequence of the US tax reform. We understand that the US Department of Treasury is aware of this issue and that it could potentially be remediated with additional guidance in the future. However, in the meanwhile, the Company is considering its approach for future filings which may result in a mitigation of a portion of the liability that has been recorded. At this stage, no cash payment is expected as a result of this uncertain tax position. Tax returns and open years We are subject to taxation in various jurisdictions. Tax authorities in certain jurisdictions examine our tax returns and some have issued assessments. We are defending our tax positions in those jurisdictions. The Brazilian tax authorities have issued a series of assessments with respect to our returns for certain years up to 2012 for an aggregate amount equivalent to $161 million including interest and penalties. The relevant group companies are robustly contesting these assessments including filing relevant appeals. An adverse outcome on these proposed assessments could result in a material adverse impact on our Consolidated Balance Sheets, Statements of Operations or Cash Flows. In order to continue the appeal against certain years, it will be necessary to post collateral with a financial institution in an amount totaling approximately $70 million, which is expected to be required in the second calendar quarter of 2019. The Nigerian tax authorities have issued a series of claims and assessments both directly and lodged through the Chapter 11 process with respect to returns for subsidiaries for certain years up to 2016 for an aggregate amount equivalent to $171 million. The relevant group companies are robustly contesting these assessments including filing relevant appeals in Nigeria and it is also intended that one or more formal objections against these claims for distribution purposes will be filed in the US court. An adverse outcome on these proposed assessments could result in a material adverse impact on our Consolidated Balance Sheets, Statements of Operations or Cash Flows. The following table summarizes the earliest tax years that remain subject to examination by other major taxable jurisdictions in which we operate.
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Loss per share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss per share | Loss per share The computation of basic (loss)/earnings per share (“EPS”) is based on the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments. The components of the numerator for the calculation of basic and diluted EPS are as follows:
The components of the denominator for the calculation of basic and diluted EPS are as follows:
The basic and diluted loss per share are as follows:
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Restricted cash | Note 14 – Restricted cash Restricted cash consists of the following:
(1) Restricted cash at December 31, 2018 included cash held as collateral against the New Secured Notes. This included (i) $228 million of the initial proceeds from issuing the notes, (ii) $55 million deferred consideration payment from Sapura Energy and (iii) $43 million shareholder loan repayment from Seabras Sapura. (2) Cash held as collateral against guarantees and other linked facilities we have with Danske Bank. |
Marketable securities |
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Marketable securities | Marketable securities Effective January 1, 2018, we adopted ASU 2016-01, which applies to equity investments that are neither (i) accounted for under the equity method or (ii) result in consolidation. Under ASU 2016-01 we record such investments at fair value and recognize any changes directly in net income, unless there is no readily ascertainable fair value, in which case we record the investment at cost less impairment. We hold investments in certain marketable securities which we account for at fair value through profit and loss per this guidance. We use quoted market prices to determine the fair value of our marketable securities and categorize them as level 1 on the fair value hierarchy. For fiscal periods beginning prior to January 1, 2018, marketable securities not accounted for under the equity method were classified as available-for-sale. Unrealized gains and losses on equity securities classified as available-for-sale were recognized in other comprehensive income. When we adopted ASU 2016-01 for the first time at January 1, 2018, we reclassified $31 million of previously recognized fair value gains from accumulated other comprehensive income to retained earnings on January 1, 2018. The below table shows the carrying value of our investments in marketable securities for periods presented in this report.
The below table shows the gain and losses recognized through net income for the periods presented in this report since the adoption of ASU 2016-01.
The below table shows the gain and losses recognized through other comprehensive income for the periods presented in this report before the adoption of ASU 2016-01.
Until April 2017, we accounted for our investment in Archer under the equity method. However, as part of a financial restructuring, Archer completed two share issuances in March and April 2017, which diluted our ownership interest to 15.7%. Also, as part of this restructuring, we agreed with Archer to convert total outstanding subordinated loans, fees and interest provided to Archer, with a carrying value of $37 million, into a $45 million loan. The fair value of the new loan receivable at the date of conversion was $56 million resulting in a gain of $19 million on debt extinguishment, which is presented within “Gain on debt extinguishment” in our Predecessor Consolidated Statement of Operations. As a result of these activities, we concluded that we no longer had significant influence over Archer's financial and operating decisions, primarily as a result of the reduction in our shareholding and the significant reduction in our interests in related debt and guarantees. We reclassified our equity method investment in Archer, which had a carrying value of nil, to an investment in marketable security, also with a carrying value of nil. We then revalued the investment in marketable security to fair value based on Archer's share price. We recognized the gain through other comprehensive income. For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date. Please see Note 11 - Impairment loss on marketable securities and investments in associated companies for details. |
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Accounts Receivable, Net, Current [Abstract] | |
Accounts receivable | Accounts receivable Accounts receivables are held at their nominal amount less an allowance for doubtful accounts. Doubtful accounts are recognized when it is unlikely that required payments of specific amounts will occur as a result of the financial condition of the customer. As at December 31, 2018 (Successor) we had no allowances for doubtful accounts netted against our accounts receivable (December 31, 2017 (Predecessor): nil; December 31, 2016 (Predecessor): nil). We recognized no bad debt expense in the period from July 2, 2018 through December 31, 2018 (Successor) and $48 million in the period from January 1, 2018 through July 1, 2018. We did not recognize any bad debt expense in 2017, or 2016, but have instead reduced contract revenue for any disputed amounts. |
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Other assets | Other assets
(1) On May 11, 2018, Seadrill Limited bought an interest rate cap from Citigroup for $68 million. The interest rate mitigates our exposure to future increases in LIBOR rates. We have an exposure to LIBOR rates because we hold floating rate debt. For the period from January 1, 2018 through to July 1, 2018 and from July 2, 2018 through to December 31, 2018 there had been a net fair value adjustment on the interest rate cap of $6 million and $22 million respectively to bring the asset value to $39 million. (2) On April 30, 2013, we completed the disposal of the tender rig business to Sapura Energy. The total consideration consisted of a non-contingent deferred consideration of $145 million, bearing interest at LIBOR plus 5%, which was due in April 30, 2016. During the year ended December 31, 2016, Sapura Energy repaid $10 million of the principal and paid $25 million of interest. On August 28, 2017, this was converted into a formalized loan agreement whereby $5 million is repaid each month. During the year ended December 31, 2018, the full amount was repaid. (3) Income tax effects following the sale of assets on divestment of North Atlantic Drilling Limited. The asset was expensed on January 1, 2018 following adoption of ASU 2016-16 - for further information refer to Note 3 - Recent accounting standards. Other assets are presented in our Consolidated Balance Sheet as follows:
Intangible assets - Favorable Drilling Contracts and Management Services Contracts On emergence from Chapter 11, we recognized favorable drilling and management service contracts at fair value, which will be amortized over their remaining contract period. The amounts recognized represent the net present value of the existing contracts at the time of emergence compared to the current market rates at that time, discounted at the weighted average cost of capital. The gross carrying amounts and accumulated amortization included in 'Other current assets' and 'Other non-current assets' for favorable contracts in the Consolidated Balance Sheet are as follows:
The amortization is recognized in the Consolidated Statements of Operations under "Amortization of favorable and unfavorable contracts". The weighted average remaining amortization period for the favorable contracts is 4 years 3 months. The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods:
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Investment in associated companies | Impairment loss on marketable securities and investments in associated companies We have recognized the following impairments on our marketable securities and investments in associated companies:
*On emergence from Chapter 11, the carrying value of our investments in associated companies and joint ventures were adjusted to fair value resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items" for the period from January 1, 2018 through July 1, 2018 (Predecessor). For further information, refer to Note 5 - Fresh start accounting. Impairment loss recognized for the year ended December 31, 2017 (Predecessor) Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment Whilst the investments in Seadrill Partners held under the equity method are not publicly traded, the value of the publicly traded units remained lower than the carrying value ascribed to the equity method investments using managements assumptions for a sustained period. We determined this to be representative of an indicator of other than temporary impairment and performed a test of impairment at December 31, 2017. As at December 31, 2017, the carrying value of the subordinated units was found to exceed the fair value by $82 million, and the carrying value of the direct ownership interests was found to exceed the fair value by $723 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. The fair value of these investments were derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investments are primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 9.75%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The implied valuation of Seadrill Partners derived from the DCF model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is in implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered. The assumptions used in the DCF model were derived from significant unobservable inputs (representative of Level 3 inputs for Fair Value Measurement) and are based on management’s judgments and assumptions available at the time of performing the impairment test. We employ significant judgment in developing these estimates and assumptions including the following:
The underlying assumptions and assigned probabilities of occurrence for utilization and dayrate scenarios were developed using a methodology that examines historical data for each rig, which considers the rig’s age, rated water depth and other attributes and then assesses its future marketability in light of the current and projected market environment at the time of assessment. Other assumptions, such as operating, maintenance and inspection costs, are estimated using historical data adjusted for known developments and future events that are anticipated by management at the time of the assessment. Management’s assumptions are necessarily subjective and are an inherent part of our asset impairment evaluation, and the use of different assumptions could produce results that differ from those reported. Management’s assumptions involve uncertainties about future demand for our services, dayrates, expenses and other future events, and management’s expectations may not be indicative of future outcomes. Significant unanticipated changes to these assumptions could materially alter our analysis in testing an asset for potential impairment. SeaMex Limited - Impairment of investment in Joint Venture The deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates is considered to be an indicator of impairment. We determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment in SeaMex as at December 31, 2017. The fair value was derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 10.25%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $36 million. We have recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. The assumptions used in the DCF model were derived from unobservable inputs (level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. The use of different assumptions, particularly with regard to the most sensitive assumptions concerning estimated future dayrates and utilization and the assumed market participant discount rate, would have a material impact on the impairment charge recognized and our Consolidated Statement of Operations. In addition, if actual events differ from management’s estimates, or to the extent that these estimates are adjusted in the future, our financial condition and results of operations could be affected in the period of any such change of estimate. Impairment loss recognized for the year ended December 31, 2016 (Predecessor) Seadrill Partners - Common Units - Impairment of marketable securities During the period between September 30, 2015 and September 30, 2016, Seadrill Partners’ unit price fell by approximately 62%, on both a spot price and trailing three-month average basis. Management determined that the investment in Seadrill Partners’ common units was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result, we impaired the investment, recognizing an impairment charge of $153 million within "Loss on impairment of investments". This impairment charge includes a reclassification of losses previously recognized within Other Comprehensive Income. Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment As at September 30, 2016, the carrying value of the subordinated units was found to exceed the fair value by $180 million, and the carrying value of the direct ownership interests was found to exceed the fair value by $400 million. We recognized this impairment of the investments within “Loss on impairment of Investments” in the Consolidated Statement of Operations. In the period from September 30, 2016 to December 31, 2016 no additional impairment was recognized due to the increase in the value of the traded units. The assumptions used in the DCF model were derived from unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. Seadrill Partners - Member interest - Impairment of Cost method investments As at September 30, 2016, the reduction in value of the Seadrill Partners common units was determined to be an indicator of impairment of the Seadrill member interest. The fair value was determined using the Monte Carlo model, updated for applicable assumptions as at September 30, 2016. The carrying value of the investment was found to exceed the fair value by $73 million. We recognized this impairment within “Loss on impairment of Investments” in the Consolidated Statement of Operations. The assumptions used in the Monte Carlo model were derived from both observable and unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. SeaMex Limited - Impairment of investment in Joint Venture As at September 30, 2016, the deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates is considered to be an indicator of impairment. We have determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment. The fair value was derived using an income approach, which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 11%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $76 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations. Itaunas Drilling, Camburi Drilling, and Sahy Drilling - Impairment of investment in Joint Venture Itaunas Drilling BV, Camburi Drilling BV and Sahy Drilling BV are joint ventures which each have a contract to construct one drillship. The joint ventures are owned 70% by Sete International (a subsidiary of Sete Brasil Participacoes SA) and 30% by us. During the year ended December 31, 2016, due to the deteriorating market conditions in the offshore drilling industry, the uncertainty around the financial condition of Sete Brasil Participacoes SA, and the uncertainty around the recoverability of the investments, we recognized an other than temporary impairment of $13 million to write down the value of these investments to nil. We recognized this impairment within “Loss on impairment of investments” in the Consolidated Statement of Operations. Investment in associated companies We have the following investments in associated companies:
SDLP investments SDLP investments consist of the following: (a) Subordinated units - Our holdings of subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners. Upon the expiration of the subordination period, the subordinated units will convert into Common Units. Our holding in the subordinated units represents 18% of the limited partner interests in Seadrill Partners. (b) Direct ownership interests - All of our direct ownership interests in subsidiaries of Seadrill Partners are accounted for under the equity method. We deem these investments to represent significant influence over the investees through their voting rights and by virtue of Seadrill’s representation on the Board of Seadrill Partners. We hold ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2018:
(c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill member interest and Incentive Distribution Rights (“IDR’s”) on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost less impairment. Seabras Sapura Seabras Sapura is 50% owned by Sapura Energy, and 50% owned by Seadrill. We account for our 50% investment in Seabras Sapura under the equity method. SeaMex We own a 50% equity interest in SeaMex. The remaining 50% is owned by Fintech. We account for our 50% investment in the joint venture under the equity method. Share in results from associated companies Our share in results of our associated companies (net of tax) were as follows:
Summary of Consolidated Statements of Operations for our equity method investees On emergence from bankruptcy, our equity method investments were measured at fair value which resulted in a different basis from the underlying carrying values of the investees' net assets at the date of emergence. The basis differences comprise of (i) drilling unit basis differences which are depreciated over the remaining useful life of the associated asset and (ii) contract basis differences which are amortized over the remaining term of the contract. The unwinding of the basis difference is recognized as a "Share in results from associated companies" in the Consolidated Statement of Operations. The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
The results of the Seabras Sapura companies and our share in those results (net of tax) were as follows:
The results of the SeaMex companies and our share in those results (net of tax) were as follows:
Book value of our investments in associated companies At the year end, the book values of our investments in our associated companies were as follows:
Quoted market prices for all of our other equity investments are not available because, other than Seadrill Partners Common Units, these companies are not publicly traded. Seadrill Partners subordinated units are not traded as we own 100% of them and hence have no quoted market price. Summarized Consolidated Balance sheets for our equity method investees The summarized balance sheets of the directly owned SDLP companies at the year and our share of recorded equity in those companies was as follows:
(1) Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. The summarized balance sheets of the Seabras Sapura companies at the year and our share of recorded equity in those companies was as follows:
The summarized balance sheets of the SeaMex companies at the year and our share of recorded equity in those companies was as follows:
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Newbuildings |
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Newbuildings | Newbuildings Newbuildings consist of the following:
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Drilling units | Drilling units
On emergence from Chapter 11, the carrying value of our drilling units were adjusted to fair value, through a combination of income-based and market-based approaches, with accumulated depreciation being reset to nil. The total net fair value adjustment to our drilling units was $5,734 million, resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items". Impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. In our reported period ended July 1, 2018 (Predecessor), we observed contracted dayrates to be below forecasted levels assumed, which was deemed an indicator of potential impairment. On assessment of asset recoverability through an estimated undiscounted future net cash flow we calculated the value to be lower than the carrying value, resulting in an impairment expense of $414 million which was classified within "Loss on impairment of long-lived assets" on our Consolidated Statement of Operations for the period from January 1, 2018 through July 1, 2018 (Predecessor). We derived the fair value of the rigs using an income approach based on updated projections of future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives. The cash flows were estimated over the remaining useful economic lives of the assets and discounted using an estimated market participant weighted average cost of capital of 11.4%. To estimate these fair values, we were required to use various unobservable inputs including assumptions related to the future performance of our rigs as explained above. We based all estimates on information available at the time of performing the impairment test. |
Equipment |
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Equipment | Equipment Equipment consists of office equipment, software, furniture and fittings.
On emergence from Chapter 11, the carrying value of our equipment was adjusted to fair value based on a cost-based approach, with accumulated depreciation being reset to nil. Refer to Note 5 - Fresh start accounting for further information. The total net fair value adjustment to our drilling units was $6 million, resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items". |
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Debt | Debt As at December 31, 2018 (Successor) and 2017 (Predecessor), we had the following liabilities for third party debt agreements:
This was presented in our Consolidated Balance Sheet as follows.
As set out in Note 4 - Chapter 11 Proceedings, we filed for Bankruptcy and operated as a debtor-in-possession from September 12, 2017 to July 2, 2018. The Chapter 11 reorganization had several impacts on our debt as set out in the sections below. Further, whilst we were in Chapter 11 we prepared our Consolidated Financial Statements under ASC 852 "Reorganizations". This caused us to make the following accounting adjustments for our debt obligations:
In the next sections we cover key terms of our debt facilities at December 31, 2018, including any changes that resulted from the Chapter 11 Reorganization. Secured Credit Facilities The terms of our secured credit facilities were amended either through our Chapter 11 reorganization or, in the case of the $360 million facility, through a separate restructuring agreement. The main changes to the terms of our facilities that applied on emergence from Chapter 11 were as follows:
Our credit facilities are secured by, among other things, liens on our drilling units. Our credit facility agreements contain cross-default provisions, meaning that if we defaulted and amounts became due and payable under one of our credit agreements, this would trigger a cross-default in our other facilities so that amounts outstanding under our other credit facility agreements become due and payable and capable of being accelerated. We have summarized the key terms of our secured credit facilities as at December 31, 2018 in the table below:
New Secured Notes On July 2, 2018, we raised $880 million of aggregate principle amount of 12.00% senior secured notes due in 2025. The notes bear interest at the annual rate of 4.00% payable in cash plus 8.00% payment-in-kind. The principal borrowed on the notes included the initial $880 million principal value of the notes plus $10 million of payment-in-kind interest that was compounded into the principal on emergence from Chapter 11. Per the terms of the New Secured Notes, we were required to redeem a proportion of the principal and interest outstanding on the notes using our share of the West Rigel sale proceeds. We received $126 million proceeds from the sale of the West Rigel on May 9, 2018 and used this to make a mandatory redemption of $121 million of principal and $5 million of accrued interest on November 1, 2018. We were also required to make an offer to repurchase a proportion of the New Secured Notes using proceeds from a deferred consideration arrangement relating to the sale of our tender rig business to Sapura Energy in 2013. We made an offer to purchase up to $56 million of the New Secured Notes on October 10, 2018. On expiry of the offer, $0.1 million in aggregate principal amount of the notes were validly tendered. We accepted and made payment for the tendered notes on November 14, 2018. After the two redemptions there was a remaining $769 million principal outstanding on the notes. The New Secured Notes are secured by, among other things, our investments in Seadrill Partners, SeaMex and Seabras Sapura. Refer to Note 18 - Investment in associated companies for further information. Credit facilities contained within variable interest entities We consolidate three legal subsidiaries of Ship Finance that own the West Taurus, West Hercules and West Linus. Please refer to Note 35 for further details of this arrangement. These facilities were also amended during the period to conform with the charter payment schedules which were amended as part of the RSA linked to our reorganization. The terms of these facilities are set out in the below table:
Unsecured Bonds We ceased recording interest on unsecured bond facilities when we filed for Chapter 11 on September 12, 2017. The unsecured bonds were extinguished when we emerged from Chapter 11. Refer to Note 5 - Fresh start accounting for further information. Debt maturities The outstanding debt as at December 31, 2018 is repayable as follows:
Covenants and restrictions contained in our debt facilities We have provided a summary of the main debt covenants contained within our debt facilities below: The below financial covenants contained in our credit facilities post emergence are measured at the RigCo group level. Details of the levels which are required to be maintained under the credit facilities are as follows:
In addition, for the periods ended March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 a margin increase will be enacted if:
The covenants included in the New Secured Notes agreements limit our ability to:
The above covenants are subject to important exceptions and qualifications. |
Other liabilities |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | Other liabilities
(1) Interest was settled monthly during the filing period. (2) Residual deferred mobilization revenue was recognized in the predecessor on fresh start. (3) Balances held as at December 31, 2017 exclude liabilities that were subject to compromise, which were reclassified to a separate line within the Consolidated Balance Sheet. This represents our estimate at 31 December, 2017 of known or potential pre-petition claims to be resolved in connection with the Chapter 11 proceedings. Refer to Note 1 - General information. Other liabilities are presented in our Consolidated Balance Sheet as follows:
Unfavorable contracts On emergence from Chapter 11 and application of fresh start accounting, we recognized intangible assets and liabilities for favorable and unfavorable drilling contracts at fair value. The amounts recognized represent the net present value of the existing contracts at the time of emergence compared to the current market rates at the time of acquisition, discounted at the weighted average cost of capital. We amortize these assets and liabilities over the remaining contract period and classify the amortization under operating expenses. For periods before emergence from Chapter 11 and application of fresh start accounting we recognized intangible assets or liabilities only where we acquired a drilling contract in a business combination. The accounting policy we applied in the Predecessor was to classify amortization expense for such contracts within other revenues. The gross carrying amounts and accumulated amortization included in 'Other current liabilities' and 'Other non-current liabilities' for unfavorable contracts in the Consolidated Balance Sheets as follows:
The amortization is recognized in the Consolidated Statement of Operations under "Amortization of favorable and unfavorable contracts". For periods before emergence from Chapter 11 and application of fresh start accounting we recognized intangible liabilities only where we acquired a drilling contract in a business combination. We classified amortization expense for such contracts within other revenues in the Predecessor. The weighted average remaining amortization period for the unfavorable contracts is 2 years 11 months. The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods:
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Common shares |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares | Common shares
Common share transactions after July 2, 2018 (Successor) As at December 31, 2018 (Successor) our shares were listed on the Oslo Stock Exchange and the New York Stock Exchange. On emergence, our authorized share capital was $11 million consisting of 111,111,111 common shares each with a par value of $0.10, of which 100,000,000 common shares are currently in issue. The Board of Directors has reserved the remaining 11,111,111 common shares for issuance under our employee incentive plan in accordance with the Plan. All our issued and outstanding common shares are and will be fully paid. Subject to the Bye-Laws, the Board of Directors is authorized to issue any of the authorized but unissued common shares. There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote in the Company's shares. Holders of common shares have no pre-emptive, redemption, conversion or sinking fund rights. Holders of common shares are entitled to one vote per common share on all matters submitted to a vote of holders of common shares. Unless a different majority is required by law or the Bye-Laws, resolutions to be approved by holders of common shares require the approval by an ordinary resolution (being a resolution approved by a simple majority of votes cast at a general meeting at which a quorum is present). Under the Bye-Laws, each common share is entitled to dividends if, as and when dividends are declared by the Board of Directors, subject to any preferred dividend right of the holders of any preference shares. In the event of liquidation, dissolution or winding up of the Company, the holders of common shares are entitled to share equally and ratably in the Company's assets, if any, remaining after the payment of all its debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares. Common share transactions prior to July 2, 2018 (Predecessor) Our predecessor Company was incorporated on May 10, 2005 and 6,000 ordinary shares of par value $2.00 each were issued. From incorporation to July 2, 2018 when the plan was confirmed by the Bankruptcy Court, the number of shares issues from our Predecessor company increased from 6,000 to 508,763,020 of par value $2.00 each. A share repurchase program for our Predecessor shares was approved by the Board in 2007 giving us the authorization to buy back shares. Shares bought back under the authorization could be cancelled or held as treasury shares. Treasury shares may be held to meet our obligations relating to the share option plans. This share repurchase program was cancelled on July 2, 2018 when the plan was confirmed by the Bankruptcy Court. As at December 31, 2017 (Predecessor) we held 4,244,080 Treasury shares. During the year ended December 31, 2016, as a result of the share-for-debt exchange the number of our predecessor common shares outstanding increased by 15,684,340 shares. On September 5, 2016 we repurchased 4,000,000 shares in settlement of our total return swap agreements. This was completed at a strike price of NOK20.3. |
Non-controlling interest |
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Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling interest | Non-controlling interest Changes in non-controlling interest for the years ended December 31, 2018 (Successor), 2017 (Predecessor) and 2016 (Predecessor) are as follows:
On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 - Fresh Start Accounting for further information. North Atlantic Drilling Ltd and Sevan Drilling Limited In the predecessor company we held a 70.36% interest in NADL and 50.11% interest in Sevan. The amount of shareholders' equity not attributable to us was included in non-controlling interests. As determined in the plan of reorganization, both companies became wholly owned subsidiaries of Seadrill and the non-controlling interests were eliminated prior to emergence on July 2, 2018. Asia Offshore Drilling Ltd In the predecessor company we held a 66.24% interest in Asia Offshore Drilling Ltd. The amount of shareholders' equity not attributable to us was included in non-controlling interests. Subsequent to filing bankruptcy petitions, the predecessor executed a Transaction Support Agreement on April 4, 2018, which included a put option to the holders of the non-controlling interest shares. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to 'Redeemable non-controlling interest' within the Consolidated Balance Sheet. Refer to Note 26 - Redeemable non-controlling interest for further information. Ship Finance International Ltd VIEs In 2007 and 2008 we entered into sale and leaseback arrangements for drilling units with Ship Finance International Ltd, who incorporated subsidiary companies for the sole purpose of owning and leasing the drilling units. We had recognized these subsidiary companies as VIEs and concluded that we are their primary beneficiary. Accordingly, these subsidiary companies are included in our Consolidated Financial Statements, with the Ship Finance International Ltd equity in these companies included in non-controlling interest. Refer to Note 35 – Variable Interest Entities for more information. During the predecessor years ended December 31, 2017 and 2016 dividends, of $14 million and $113 million were declared by VIEs to Ship Finance and was settled against related party balances with Ship Finance. On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 – Fresh Start Accounting for further information. Seadrill Nigeria Operations Limited On December 5, 2016 (Predecessor), our wholly owned subsidiary, Seadrill UK Ltd., acquired a 10% interest that an unrelated party, HH Global Alliance Investments Limited (“HHL”) held in Seadrill Mobile Units (Nigeria) Ltd, the service company for West Capella, for a fair value of $6 million. Following the completion of this transaction Seadrill UK Ltd. owns 49% of Seadrill Mobile Units Nigeria Limited, with the remaining 51% being owned by subsidiaries of Seadrill Partners. Simultaneously HHL acquired from Seadrill UK Ltd. a 49% interest in Seadrill Nigeria Operations Limited, the service company for West Jupiter for a fair value of $6 million. The impact of these transactions was to increase Seadrill’s direct ownership interest in Seadrill Partners by $6 million, and to recognize HHL’s non-controlling interest in Seadrill Nigeria Operations Ltd of $6 million. During the year ended December 31, 2017 (Predecessor), HHL acquired a further 2% interest in Seadrill Nigeria Operations Ltd for total consideration of $0.3 million. Redeemable non-controlling interest Changes in redeemable non-controlling interest for the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
Subsequent to filing bankruptcy petitions, the Predecessor executed a Transaction Support Agreement (“TSA”) on April 4, 2018 with a minority shareholder of one of Seadrill Limited's subsidiaries, Asia Offshore Drilling Limited (“AOD”). The purpose of the TSA was to provide a framework for a monetization event for the minority shareholder of AOD as well as obtain unanimous approval of the AOD board of directors (which included the minority shareholder) in order for AOD to become a party to the RSA and participate in Seadrill’s broader debt restructuring under its Chapter 11 reorganization. The TSA executed between the parties provided a put option to the holders of non-controlling interest shares. The put option gave the holders the right (with no obligation) to sell the shares it owns to Seadrill subject to a price ceiling. After the end of the effective period of the put option, if the right remains unexercised, Seadrill gets the right (with no obligation) to purchase the non-controlling interest in AOD at a price subject to the floor price (“Call Option”). While the call option provides for a redemption mechanism, the redemption option is made by Seadrill. The put option, however, generates a redemption feature for the non-controlling interest holder that is outside the control of Seadrill. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to "Redeemable non-controlling interest" within the Consolidated Balance Sheets. Any fair value adjustments to generate an expected redemption value have been recognized through retained earnings. In the period from January 1, 2018 through July 1, 2018 (Predecessor), we reclassified $150 million of non-controlling interest from equity to redeemable non-controlling interest on the date of the TSA (April 4, 2018) and recorded a fair value adjustment of $127 million on initial recognition. We attributed $2 million of net income to the redeemable non-controlling interest covering the period April 2018 to July 1, 2018, and a fair value adjustment on initial recognition of $5 million, resulting in the redeemable non-controlling interest having a fair value on July 1, 2018 (Predecessor) of $30 million. Subsequent changes in fair value are recognised in retained earnings. In the period from July 2, 2018 through December 31, 2018 (Successor), we recognized a net loss attributable to redeemable non-controlling interest of $1 million and a fair value adjustment of $9 million, resulting in the redeemable non-controlling interest having a fair value on December 31, 2018 (Successor) of $38 million. |
Redeemable non-controlling interest |
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Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable non-controlling interest | Non-controlling interest Changes in non-controlling interest for the years ended December 31, 2018 (Successor), 2017 (Predecessor) and 2016 (Predecessor) are as follows:
On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 - Fresh Start Accounting for further information. North Atlantic Drilling Ltd and Sevan Drilling Limited In the predecessor company we held a 70.36% interest in NADL and 50.11% interest in Sevan. The amount of shareholders' equity not attributable to us was included in non-controlling interests. As determined in the plan of reorganization, both companies became wholly owned subsidiaries of Seadrill and the non-controlling interests were eliminated prior to emergence on July 2, 2018. Asia Offshore Drilling Ltd In the predecessor company we held a 66.24% interest in Asia Offshore Drilling Ltd. The amount of shareholders' equity not attributable to us was included in non-controlling interests. Subsequent to filing bankruptcy petitions, the predecessor executed a Transaction Support Agreement on April 4, 2018, which included a put option to the holders of the non-controlling interest shares. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to 'Redeemable non-controlling interest' within the Consolidated Balance Sheet. Refer to Note 26 - Redeemable non-controlling interest for further information. Ship Finance International Ltd VIEs In 2007 and 2008 we entered into sale and leaseback arrangements for drilling units with Ship Finance International Ltd, who incorporated subsidiary companies for the sole purpose of owning and leasing the drilling units. We had recognized these subsidiary companies as VIEs and concluded that we are their primary beneficiary. Accordingly, these subsidiary companies are included in our Consolidated Financial Statements, with the Ship Finance International Ltd equity in these companies included in non-controlling interest. Refer to Note 35 – Variable Interest Entities for more information. During the predecessor years ended December 31, 2017 and 2016 dividends, of $14 million and $113 million were declared by VIEs to Ship Finance and was settled against related party balances with Ship Finance. On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 – Fresh Start Accounting for further information. Seadrill Nigeria Operations Limited On December 5, 2016 (Predecessor), our wholly owned subsidiary, Seadrill UK Ltd., acquired a 10% interest that an unrelated party, HH Global Alliance Investments Limited (“HHL”) held in Seadrill Mobile Units (Nigeria) Ltd, the service company for West Capella, for a fair value of $6 million. Following the completion of this transaction Seadrill UK Ltd. owns 49% of Seadrill Mobile Units Nigeria Limited, with the remaining 51% being owned by subsidiaries of Seadrill Partners. Simultaneously HHL acquired from Seadrill UK Ltd. a 49% interest in Seadrill Nigeria Operations Limited, the service company for West Jupiter for a fair value of $6 million. The impact of these transactions was to increase Seadrill’s direct ownership interest in Seadrill Partners by $6 million, and to recognize HHL’s non-controlling interest in Seadrill Nigeria Operations Ltd of $6 million. During the year ended December 31, 2017 (Predecessor), HHL acquired a further 2% interest in Seadrill Nigeria Operations Ltd for total consideration of $0.3 million. Redeemable non-controlling interest Changes in redeemable non-controlling interest for the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
Subsequent to filing bankruptcy petitions, the Predecessor executed a Transaction Support Agreement (“TSA”) on April 4, 2018 with a minority shareholder of one of Seadrill Limited's subsidiaries, Asia Offshore Drilling Limited (“AOD”). The purpose of the TSA was to provide a framework for a monetization event for the minority shareholder of AOD as well as obtain unanimous approval of the AOD board of directors (which included the minority shareholder) in order for AOD to become a party to the RSA and participate in Seadrill’s broader debt restructuring under its Chapter 11 reorganization. The TSA executed between the parties provided a put option to the holders of non-controlling interest shares. The put option gave the holders the right (with no obligation) to sell the shares it owns to Seadrill subject to a price ceiling. After the end of the effective period of the put option, if the right remains unexercised, Seadrill gets the right (with no obligation) to purchase the non-controlling interest in AOD at a price subject to the floor price (“Call Option”). While the call option provides for a redemption mechanism, the redemption option is made by Seadrill. The put option, however, generates a redemption feature for the non-controlling interest holder that is outside the control of Seadrill. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to "Redeemable non-controlling interest" within the Consolidated Balance Sheets. Any fair value adjustments to generate an expected redemption value have been recognized through retained earnings. In the period from January 1, 2018 through July 1, 2018 (Predecessor), we reclassified $150 million of non-controlling interest from equity to redeemable non-controlling interest on the date of the TSA (April 4, 2018) and recorded a fair value adjustment of $127 million on initial recognition. We attributed $2 million of net income to the redeemable non-controlling interest covering the period April 2018 to July 1, 2018, and a fair value adjustment on initial recognition of $5 million, resulting in the redeemable non-controlling interest having a fair value on July 1, 2018 (Predecessor) of $30 million. Subsequent changes in fair value are recognised in retained earnings. In the period from July 2, 2018 through December 31, 2018 (Successor), we recognized a net loss attributable to redeemable non-controlling interest of $1 million and a fair value adjustment of $9 million, resulting in the redeemable non-controlling interest having a fair value on December 31, 2018 (Successor) of $38 million. |
Accumulated other comprehensive income/(loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income/(loss) | Accumulated other comprehensive income/(loss) Accumulated other comprehensive income consists of the following:
In January 2016, the FASB issued ASU 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities" to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016-01 became effective for fiscal years and interim periods beginning after December 15, 2017. We adopted ASU 2016-01 starting from January 1, 2018 on a modified retrospective basis, with no changes recognized in the prior year comparatives and a cumulative catch up adjustment recognized in the Predecessor opening retained earnings. Upon adoption of ASU 2016-01, we reclassified $31 million of unrealized gains related to our marketable securities from accumulated other comprehensive income to retained earnings in the Predecessor. As a result of the adoption of this guidance we are required to recognize the movement in the fair value of our marketable securities in the Consolidated Statement of Operations. Refer to Note 15 "Marketable securities" for further information. On emergence from Chapter 11, the accumulated other comprehensive income of the Predecessor was reset to nil. For further information refer to Note 5 - Fresh start accounting. The applicable amount of income taxes associated with each component of other comprehensive income in the Successor is nil, other than on the actuarial loss on pension, due to the fact that the items relate to companies domiciled in non-taxable jurisdictions. For actuarial loss related to pension, the accumulated applicable amount of income taxes is nil for the period from July 2, 2018 to December 31, 2018 ($1 million for the period from January 1, 2018 to July 1, 2018 and $1 million for the year ended December 31, 2017 (Predecessor)) as this item is related to companies domiciled in Norway where the tax rate is 23% (December 31, 2017 (Predecessor): 24%). |
Share based compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share based compensation | hare based compensation The share-based compensation expense for our Predecessor share options and Restricted Stock Unit plans in the Consolidated Statement of Operations for the period from January 1, 2018 through July 1, 2018 and years ended December 31, 2017 and 2016 was $9 million, $7 million, and $7 million respectively. The $9 million expense for the period from January 1, 2018 through July 1, 2018 included a charge of $6 million for schemes cancelled on emergence from Chapter 11. This was classified within reorganization items. On August 16, 2018, we established an employee incentive plan with a limit of 11.1 million shares in Seadrill Limited. On September 4, 2018 we made a grant of 0.5 million Restricted Stock Units. The share-based compensation expense recognized in the Consolidated Statement of Operations for the period from July 2, 2018 through December 31, 2018 (Successor) was nil. The compensation cost for non-vested awards not yet recognized as at December 31, 2018 is $9 million, with a weighted average vesting period of 2 years and 9 months. |
Pension benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension benefits | Note 29 - Pension benefits Defined benefit plans We have several defined benefit pension plans covering a number of our Norwegian employees. All the plans are administered by a life insurance company. Our net obligation is calculated separately for each plan by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to present value, from which the aggregated fair value of plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations. Actuarial gains and losses are recognized in the Consolidated Statement of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. On retirement, or when an employee leaves the company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting, the portion of the net unrealized actuarial gains/losses corresponding to the relative value of the obligation reduction is recognized through the Consolidated Statement of Operations. However, settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. We deem the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case, the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the Consolidated Statement of Operations. For onshore employees in Norway, who are participants in the defined benefit plans, the primary benefits are a retirement pension of approximately 66 percent of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66 percent of the total of 12 times the Norwegian Social Security Base. Most employees in this group may choose to retire at 62 years of age on a pre-retirement pension. Consolidated Balance Sheet position
Annual pension cost We record pension costs in the period during which the services are rendered by the employees.
The funded status of the defined benefit plan
Change in projected benefit obligations
Change in pension plan assets
The accumulated benefit obligation for all defined benefit pension plans was $33 million and $33 million at December 31, 2018 (Successor) and 2017 (Predecessor), respectively. Pension obligations are actuarially determined and are critically affected by the assumptions used, including the expected return on plan assets, discount rates, compensation increases and employee turnover rates. We periodically review the assumptions used and adjust them and the recorded liabilities as necessary. During the year ended December 31, 2017, a number of employees left and as a result, the defined benefit scheme transferred the pension liability for these employees to the life insurance company administering the scheme. The difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company has been recognized within “Other comprehensive income.” The settlement is not deemed to be significant in the context of the overall scheme and as such net unrecognized actuarial losses have not been recycled as a result of the settlement. The expected rate of return on plan assets and the discount rate applied to projected benefits are particularly important factors in calculating our pension expense and liabilities. We evaluate assumptions regarding the estimated rate of return on plan assets based on historical experience and future expectations on investment returns, utilizing the asset allocation classes held by the plan’s portfolios. The discount rate is based on the covered bond rate in Norway. Changes in these and other assumptions used in the actuarial computations could impact the projected benefit obligations, pension liabilities, pension expense and other comprehensive income. Assumptions used in calculation of pension obligations
The weighted-average asset allocation of funds related to our defined benefit plan at December 31, was as follows: Pension benefit plan assets
The investment policies and strategies for the pension benefit plan funds do not use target allocations for the individual asset categories. The investment objectives are to maximize returns subject to specific risk management policies. We diversify our allocation of plan assets by investing in both domestic and international fixed income securities and domestic and international equity securities. These investments are readily marketable and can be sold to fund benefit payment obligations as they become payable. Cash flows - Contributions expected to be paid The table below shows our expected annual pension plans contributions under defined benefit plans for the years ending December 31, 2019-2028. The expected payments are based on the assumptions used to measure our obligations at December 31, 2018 and include estimated future employee services.
Defined contribution and other plans We made contributions to personal defined contribution pension and other plans totaling $9 million for the period from July 2, 2018 through December 31, 2018 (Successor) and $10 million for the period from January 1, 2018 through July 1, 2018 (Predecessor). For the year to December 31, 2017 (Predecessor) and December 31, 2016 (Predecessor) the charge was $17 million and $26 million, respectively. These were charged as operational expenses as they became payable. |
Related party transactions |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party transactions | Related party transactions Our main related parties include (i) affiliated companies over which we hold significant influence and (ii) companies who are either controlled by or whose operating policies may be significantly influenced by our major shareholder, Hemen. Companies in which we hold significant influence include (i) Seadrill Partners, (ii) SeaMex and (iii) Seabras Sapura. Companies that are controlled by or whose operating policies may be significantly influenced by Hemen include (i) Ship Finance, (ii) Archer, (iii) Frontline, (iv) Seatankers and (v) Northern Drilling. In the following sections we provide an analysis of (i) transactions with related parties and (ii) balances outstanding with related parties. Related party revenue The below table provides an analysis of related party revenues for periods presented in this report.
(a) We provide management and administrative services to Seadrill Partners and SeaMex and operation and technical support services to Seadrill Partners, SeaMex and Northern Drilling. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We previously provided in country support services to the Seadrill Partners rig West Polaris when it operated in Angola. The West Polaris's contract ended in December 31, 2018, so we no longer earn revenues under this arrangement. (c) In addition to the amounts shown above, we recognized reimbursable revenues of $10 million in the period from July 2, 2018 through December 31, 2018 for work performed to mobilize the Northern Drilling rig West Mira for its first drilling contract, which we expect to commence in 2019. Related party operating expenses The below table provides an analysis of related party operating expenses for periods presented in this report.
(d) Seadrill Partners previously provided us with in-country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us with in-county support services for the West Pegasus and West Freedom when those rigs operated in Mexico and Venezuela. (e) We received services from certain other related parties. These included management and administrative services from Frontline, warehouse rental from Seabras Sapura and other services from Archer and Seatankers. (f) We previously acted as an intermediate charterer for the Seadrill Partners rig West Aquarius, during its contract with Hibernia in Canada, which ended in April 2017. We also acted as an intermediate charterer for the Seadrill Partners rigs T-15 and T-16 until December 2016. Related party financial items The below table provides an analysis of related party financial income for periods presented in this report.
(g) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). We also previously earned interest income on our related party loans to Seadrill Partners. (h) We previously held interest rate swap agreements with Seadrill Partners. These were canceled when we filed for Chapter 11 in September 2017. (i) We record interest income on deferred consideration receivables from Seadrill Partners (see item (k) below). Related party receivable balances The below table provides an analysis of related party receivable balances for periods presented in this report.
(j) We have loan receivables outstanding from SeaMex and Seabras Sapura. We previously had loan receivables from Seadrill Partners, which have been repaid. We have summarized the amounts outstanding in the table below:
SeaMex loans include (i) $250 million "sellers credit" provided to SeaMex in March 2015 which matures in December 2019 (ii) $45 million working capital loan advanced in November 2016 and (iii) $103 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% and are subordinated to SeaMex's external debt facility. Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $78 million balance shown in the table above includes (i) $70 million of loan principal and (ii) $8 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility. We received repayments against these related party loans of $23 million during 2018. In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 18 - "Investments in Associated Companies" for further details. We received repayments against these shareholder loans of $20 million during 2018. The outstanding balance of the West Vencedor facility was repaid by Seadrill Partners in May 2018. (k) Deferred consideration arrangements include receivables due to us from Seadrill Partners from the sale of the West Vela and the West Polaris to Seadrill Partners in November 2014 and June 2015 respectively. We have summarized amounts due for each period in the table below:
On adoption of fresh start accounting, we recorded receivables for West Vela share of dayrate and West Polaris earnout. These amounts were previously accounted for as gain contingencies so were only recognized when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items. We recorded the following gains in other operating income for these arrangements.
(l) On April 26, 2017, we converted $146 million, including accrued interest and fees, in subordinated loans provided to Archer into a $45 million convertible loan. The subordinated convertible loan bears interest of 5.5%, matures in December 2021 and has a conversion right into equity of Archer Limited in 2021. At inception, the fair value of the convertible bond was $56 million whereas the previous loan had a carrying value of $37 million. We therefore recognized a gain on debt extinguishment of $19 million in 2017 because of this transaction. The loan receivable is a convertible debt instrument comprised of a debt instrument and a conversion option, classed as an embedded derivative. Both elements are measured at fair value at each reporting date. As at December 31, 2018 (Successor), the fair value of the convertible debt instrument was $43 million of which the split between debt and embedded derivative option was $43 million and nil respectively. The fair value gain/(loss) on the convertible bond for periods presented is summarized below:
(m) Trading balances primarily comprise receivables from Seadrill Partners and SeaMex for related party management fees. In addition, certain receivables and payables arise when we pay an invoice on behalf of Seadrill Partners or SeaMex and vice versa. Receivables and payables are generally settled quarterly in arrears. Related party payable balances The below table provides an analysis of related party receivable balances for periods presented in this report.
(n) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 35 - Variable Interest Entities for further details). The carrying amount of the loans was $222 million at December 31, 2018 (2017: $314 million). The principal outstanding on the loans was $314 million at December 31, 2018, (2017: $314 million). There is a right of offset of trading balance assets against the loans, the net position is disclosed within “Long-term debt due to related parties” on the Consolidated Balance Sheets. As at December 31, 2018 (Successor) the trading position was a net asset position of $4 million. The loans bear interest at a fixed rate of 4.5% per annum and mature between 2023 and 2029. The total interest expense incurred for the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million, the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 million (year ended December 31, 2017 (Predecessor): $15 million). (o) Trading balances primarily include related party payables due from our Ship Finance variable interest entities to Ship Finance and trading balances due from us to SeaMex and Seadrill Partners. Related party assets and liabilities are presented in our Consolidated Balance Sheet as follows:
Other related party transactions Seabras Sapura guarantees - In November 2012, a subsidiary of Seabras Sapura Participações S.A. entered into a $179 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Esmeralda pipe-laying support vessel, with a maturity in 2032. During 2013 an additional facility of $36 million was entered into, with a maturity in 2020. As a condition to the lenders making the loan available, we provided a sponsor guarantee, on a joint and several basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrower. The total amount guaranteed by the joint venture partners as at December 31, 2018 (Successor) was $165 million (December 31, 2017 (Predecessor): $184 million). In December 2013 certain subsidiaries of Seabras Sapura Holding GmbH entered into a $543 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Diamante, and Sapura Topazio pipe-laying support vessels ("PLSV 1 facility"). As a condition to the lenders making the loan available to each of the borrowers, we provided a sponsor guarantee, on a 50:50 basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrowers during certain defined time periods, the release of such guarantees being subject to the satisfaction of certain defined conditions. The guarantees covered obligations and liabilities of the borrowers under the facility agreement which arose during the period between the expiry of a contract and extension or renewal of that contract and following a guarantee extension relating to early termination of a contract. During these periods, the guarantees could only be called if the facility was in default. The guarantee was automatically discharged on emergence from Chapter 11 and any related potential claims from lenders were waived as part of a deal reached on October 31, 2018. The total amount guaranteed by the Predecessor as at December 31, 2017 was $186 million. In April 2015, certain subsidiaries of Seabras Sapura Holding GmbH entered into a $780 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Onix, Sapura Jade and Sapura Rubi pipe-laying support vessels ("PLSV 2 facility"). As a condition to the lenders making the loan available to each of the borrowers, we provided a sponsor guarantee, on a 50:50 basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrowers during certain defined time periods, the release of such guarantees being subject to the satisfaction of certain defined conditions. The guarantees covered obligations and liabilities of the borrowers under the facility agreement which arose during the period between the expiry of a contract and extension or renewal of that contract and following a guarantee extension relating to early termination of a contract. During these periods, the guarantees can only be called if the facility is in default. The guarantee was automatically discharged on emergence from Chapter 11 and any related potential claims from lenders were waived as part of a deal reached on October 31, 2018. The amount guaranteed by the Predecessor as at December 31, 2017 was $328 million. On October 31, 2018, we completed a transaction that fully extinguished the sponsor guarantees given by Seadrill and Sapura Energy for the benefit of the lenders of the PLSV 1 and PLSV 2 facilities. Our guarantee obligations were previously released, discharged and terminated as part of the Chapter 11 proceedings and under the terms of the October 31 transaction, the lenders confirmed that they had no outstanding claims against Seadrill in respect of our guarantees and also released and discharged Sapura Energy's guarantees. In return for the release and discharge of both sponsors’ guarantees, the lenders under the debt facilities have received, amongst other things, cross-collateralisation of the debt facilities, a prepayment from the joint venture, an increase in margin and a consent fee. We have not recognized a liability for any of the above guarantees as we did not consider it to be probable that the guarantees would be called. Other guarantees - In addition, we have made certain guarantees over the performance of Seadrill Partners, SeaMex and Archer on behalf of customers and suppliers. Please refer to Note 33- "Commitments and contingencies" for details. Omnibus agreement - In 2012 we entered into an Omnibus Agreement with Seadrill Partners. The agreement outlines the following provisions: (i) a non-competition agreement with Seadrill Partners for any drilling rig operating under a contract for five or more years; (ii) rights of first offer on any proposed sale, transfer or other disposition of drilling rigs; (iii) rights of first offer on any proposed transfer, assignment, sale or other disposition of any equity interest in Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Partners Operating LLC (the "OPCO"); and indemnification – Old Seadrill Limited agreed to indemnify Seadrill Partners against certain environmental and toxic tort liabilities with respect to the assets contributed or sold to Seadrill Partners, and also certain tax liabilities. Refer to exhibit 4.4. |
Financial instruments and risk management |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments and risk management | Financial instruments and risk management We are exposed to several market risks, including credit risk, foreign currency risk and interest rate risk. Our policy is to reduce our exposure to these risks, where possible, within boundaries deemed appropriate by our management team. This may include the use of derivative instruments. Credit risk We have financial assets, including cash and cash equivalents, marketable securities, other receivables and certain amounts receivable on derivative instruments. These assets expose us to credit risk arising from possible default by the counterparty. Most of the counterparties are creditworthy financial institutions or large oil and gas companies. We do not expect any significant loss to result from non-performance by such counterparties. We do not demand collateral in the normal course of business. The credit exposure of interest rate swap agreements, currency option contracts and foreign currency contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements, adjusted for counterparty non-performance credit risk assumptions. It is our policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give us the legal right to discharge all or a portion of amounts owed to a counterparty by offsetting them against amounts that the counterparty owes to us. Concentration of risk There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with Citibank, Nordea Bank Finland Plc, Danske Bank A/S, BNP Paribas and ING Bank N.V. We consider these risks to be remote. For details on the customers with greater than 10% of contract revenues, refer to Note 6 - Segment information. Foreign exchange risk As is customary in the oil and gas industry, a majority of our revenues and expenses are denominated in U.S. dollars, which is the functional currency of most of our subsidiaries and equity method investees. However, a portion of the revenues and expenses of certain of our subsidiaries and equity method investees are denominated in other currencies. We are therefore exposed to foreign exchange gains and losses that may arise on the revaluation or settlement of monetary balances denominated in foreign currencies. Before we entered Chapter 11, we had unsecured bonds denominated in Norwegian Krone and Swedish Krona. These bonds were extinguished on emergence from Chapter 11. Our remaining foreign exchange exposures primarily relate to foreign denominated cash and working capital balances. We do not expect these remaining exposures to cause a significant amount of fluctuation in net income and therefore do not currently hedge them. Further, the effect of fluctuations in currency exchange rates caused by our international operations generally has not had a material impact on our overall operating results. Interest rate risk Our exposure to interest rate risk relates mainly to our floating rate debt and balances of surplus funds placed with financial institutions. We manage this risk through the use of derivative arrangements. We have set out our exposure to interest rate risk on our net debt obligations at December 31, 2018 (Successor) in the below table.
At December 31, 2017 we were in Chapter 11 and did not make interest payments on our Senior Credit Facilities. Our exposure to interest rate risk was therefore limited to loans contained within VIEs. The net exposure on those debt obligations was not materially different to the amount shown in the above table. On May 11, 2018, we purchased an interest rate cap for $68 million to mitigate our exposure to future increases in LIBOR on our Senior Credit Facility debt. The interest rate cap is not designated as a hedge and therefore does not apply hedge accounting. The capped rate against the 3-month US LIBOR is 2.87% and covers the period from June 15, 2018 to June 15, 2023. The LIBOR rate applied on our debt at December 31, 2018 was 2.81%. Therefore, the interest cap would mitigate the impact of 94% of a theoretical 1% point increase in the LIBOR rate. This is set out in the below table.
One of the Ship Finance subsidiaries that we consolidate as a VIE (refer to Note 35 "Variable Interest Entities") previously entered into interest rate swaps to mitigate its exposure to variability in cash flows for future interest payments on the loans taken out to finance the acquisition of the West Linus. These interest rate swaps matured on December 31, 2018. Gains and losses on derivatives reported in consolidated statement of operations Gains and losses on derivatives reported in our consolidated statement of operations included the following:
Interest rate cap - This represents changes in fair value on our interest rate cap agreement referred above. Archer convertible debt instrument - This represents gains and losses on the conversion option included within a $45 million convertible bond issued to us by Archer. Please see Note 30 - Related party transactions for further details. Interest rate swaps and cross currency swaps - Prior to filing for Chapter 11 (Predecessor), we used interest rate swaps and cross currency swaps to mitigate the impact of currency and interest rate fluctuations on our debt. When we filed for Chapter 11 we triggered a default under these agreements and our counterparties terminated the contracts and received an allowed claim for damages suffered. We reversed the liabilities for these instruments and recorded liabilities equal to the expected value of the allowed claims received by our counterparties. The allowed claim values were higher than the previous fair values, which factored in a discount for our own credit risk, so this led to an expense of $89 million. We classified the expense within reorganization items (see note 4 for further details). Derivative financial instruments included in our Consolidated Balance Sheet Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
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Fair value of financial instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | Note 32 - Fair values of financial instruments Fair value of financial instruments measured at amortized cost The carrying value and estimated fair value of our financial instruments that are measured at amortized cost at December 31, 2018 (Successor) and December 31, 2017 (Predecessor) are as follows:
(1) Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis (2) During the period we were in Chapter 11 Bankruptcy, the fair value for these financial instruments was not reasonably determinable. Level 1 The fair value of the secured notes are derived using market traded value. We have categorized this at level 1 on the fair value measurement hierarchy. Refer to Note 22 – Debt for further information. Level 2 Upon the adoption of fresh start accounting, the related party loans receivable from Seadrill Partners, SeaMex and Seabras Sapura were recorded at fair value. We estimate that the fair value continues to be equal to the carrying value as at December 31, 2018 as the debt is not freely tradable and cannot be recalled by us at prices other than specified in the loan note agreements and the loans were entered into at market rates. They are categorized as level 2 on the fair value measurement hierarchy. Other trading balances with related parties are not shown in the table above and are covered under Note 30 - Related party transactions. The fair value of other trading balances with related parties are also assumed to be equal to their carrying value. The fair value of the secured credit facilities and Ship Finance loans are derived using the discounted cash flow model, using a cost of debt of 7%. The fair value of the loans provided by Ship Finance to our VIE's are derived using the discounted cash flow model, using a cost of debt of 11%. We have categorized this at level 2 on the fair value measurement hierarchy. Refer to Note 30 - Related party transactions for further information. Financial instruments measured at fair value on a recurring basis The carrying value and estimated fair value of our financial instruments that are measured at fair value on a recurring basis at December 31, 2018 (Successor) and December 31, 2017 (Predecessor) are as follows:
Level 1 The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, is a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy. Quoted market prices are used to estimate the fair value of marketable securities, which are valued at fair value on a recurring basis. Level 2 The fair value of the interest rate cap as at December 31, 2018 is calculated using well-established independence valuation techniques and counterparty non-performance credit risk assumptions. The calculation of the credit risk in the swap values is subject to a number of assumptions including an assumed credit default swap rate based on our traded debt, and recovery rate, which assumes the proportion of value recovered, given an event of default. We have categorized these transactions as level 2 on the fair value measurement hierarchy. Level 3 The Archer convertible debt instrument is bifurcated into two elements. The fair value of the embedded derivative option is calculated using a modified version of the Black-Scholes formula for a currency translated option. Assumptions include Archer's share price in NOK, NOK/ USD FX volatility and dividend yield. The fair value of the debt component is derived using the discounted cash flow model including assumptions relating to cost of debt and credit risk associated to the instrument. The redeemable non-controlling interest in AOD is calculated by applying a fair value to the three AOD rigs and debt facility using a discounted cash flow model. The rig values are determined using an income approach based on projected future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives, discounted using a weighted average cost of capital of 11%. The fair value of the debt is derived using the discounted cash flow model, using a cost of debt of 8%. Fair value considerations on one-time transactions Fresh start valuations The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of which a reorganization value was derived based on the mid-point of this range of estimated distributable values. The reorganization value represents the fair value of the Successor Company’s total assets and, under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values. For further information, refer to Note 5 - Fresh Start Accounting. Drilling unit impairment In our reported Predecessor period ended July 2, 2018 (Predecessor), we recorded an impairment expense of $414 million against our drilling units, derived from a fair value using an income approach based on updated projections of future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives. For further information, refer to Note 20 - Drilling units. Impairment of marketable securities and investments in associated companies and joint ventures In the years ended December 31, 2017 and 2016 we recognized impairments on our investments in marketable securities, associated companies and joint ventures following deteriorating conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector. For further information and fair value considerations, refer to Note 11 - Impairment loss on marketable securities and investments in associated companies. |
Commitments and contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | Commitments and contingencies Legal Proceedings From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities. We believe that the resolution of such claims will not have a material impact individually or in the aggregate on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our Consolidated Financial Statements as at December 31, 2018. Sevan Drilling On June 29, 2015, Sevan Drilling disclosed that it had initiated an internal investigation into activities with an agent under certain drilling contracts with Petrobras in Brazil, which were entered prior to the separation from the Sevan Marine Group. On October 16, 2015, Sevan Drilling further disclosed that Sevan Drilling ASA, previously the parent company of Sevan Drilling, had been accused of breaches of Sections 276a and 276b of the Norwegian Criminal Code in respect of payments made in connection with the performance during 2012 to 2015 of drilling contracts originally awarded by Petrobras to Sevan Marine ASA in the period between 2005–2008. On May 4, 2018, Sevan Drilling disclosed that Norway's anti-corruption agency, Økokrim, had completed its investigation and that the charges had been dismissed. Accordingly, no loss contingency has been recognized in Seadrill’s Consolidated Financial Statements. Seabras Sapura joint venture The Sapura Esmeralda, operates under a temporary Brazilian flag which expires on July 29, 2019. Seabras Sapura is currently in the process of applying for a registration with Brazilian authorities which will entitle the vessel to permanently fly the Brazilian flag. There is a risk that if no permanent right to fly the Brazilian flag is obtained, or that the temporary flag is revoked and Seabras Sapura is unsuccessful in any appeals or in pursuing other available remedies, this could affect the operations of the Sapura Esmeralda and potentially impact its commercial agreements and related financing. Patent infringement In January 2015, a subsidiary of Transocean Ltd. filed suit (“the Suit”) against certain of our subsidiaries for patent infringement. The Suit alleged that one of our drilling rigs operating in the U.S. Gulf of Mexico, along with two rigs owned by Seadrill Partners, violated Transocean patents relating to dual-activity. In the same year, we challenged the validity of the patents via the Inter Parties Review process within the U.S. Patent and Trademark Office. The IPR board held in March 2017 that the patents were valid. In May 2017 we appealed to the U.S. Federal Circuit Court of Appeal and in June 2018 the court affirmed the IPR decision. The Suit passed through the Chapter 11 bankruptcy proceedings unimpaired and was reinstated. In December 2018, Seadrill and Seadrill Partners reached an amicable agreement with Transocean over alleged patent infringement of the Transocean dual activity patent. Under the terms of the settlement, Seadrill and Seadrill Partners have entered into a global license agreement with Transocean of the dual activity drilling method on our rigs covering alleged past infringements and future use. Dalian Newbuilds At December 31, 2018, we had contractual commitments under two (2017: eight) newbuilding contracts with Dalian totaling $0.4 billion (2017: $1.7 billion). In January 2019, Dalian appointed an administrator to restructure its liabilities. Contracts for the newbuild jack-up rigs West Titan, West Proteus, West Rhea, West Hyperion, West Tethys and West Umbriel were terminated as of December 31, 2018. Further, in February 2019, the Seadrill contracting party terminated the contract to acquire the jack-up rig West Dione due to: (i) delays to delivery of the rig, and (ii) Dalian being subject to bankruptcy proceedings. In March 2019, Dalian purported to terminate the eighth newbuilding contract for the West Mimas. The Seadrill contracting party rejected Dalian’s termination of the contract as wrongful and reserved all its rights. The Seadrill contracting party will obtain a right to terminate the contract for the West Mimas for delay and claim a refund of the pre-delivery installments plus interest in early April 2019, and it intends to enforce all its rights under the contract as they arise. In March 2019, the Seadrill contracting parties commenced arbitration proceedings in the UK for all eight rigs and will claim for the return of the paid installments plus interest and further damages for losses. They will also file claims for these amounts as part of the Dalian insolvency. Dalian has maintained it has a damages claim in respect of each of the rigs. The contracts are all with limited liability subsidiaries of Seadrill. There are no parent company guarantees. Apart from the Seadrill contracting parties’ claims for repayment of the paid installments plus interest, no quantification of claims has been made by either party. Guarantees We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee:
As of the Consolidated Balance Sheet date we have not recognized any liabilities for the above guarantees, as we do not consider it is probable for the guarantees to be called. |
Operating leases |
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Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||
Operating leases | Operating leases We have operating leases relating to our premises, the most significant being our offices in London, Liverpool, Oslo, Stavanger, Singapore, Houston, Rio de Janeiro and Dubai. In the period from July 2, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through July 1, 2018 (Predecessor) rental expenses amounted to $7 million and $9 million. Rental expenses for the years ended December 31, 2017 (Predecessor) and 2016 (Predecessor) amounted to $19 million and $17 million, respectively. Future minimum rental payments are as follows:
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Variable Interest Entities |
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Variable Interest Entity, Measure of Activity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities As at December 31, 2018 (Successor), we have two semi-submersible rigs and a jack-up rig from VIEs under capital leases. Each of the units had been sold by us to single purpose subsidiaries of Ship Finance and simultaneously leased back by us on bareboat charter contracts for a term of 15 years. We have several options to repurchase the units during the charter periods, and obligations to purchase the assets at the end of the 15 years lease period. The following table gives a summary of the sale and leaseback arrangements and repurchase options from VIEs, as at December 31, 2018:
We have determined that the Ship Finance subsidiaries, which own the units, are VIEs, and that we are the primary beneficiary of the risks and rewards connected with the ownership of the units and the charter contracts. Accordingly, these VIEs are fully consolidated in our Consolidated Financial Statements. The equity attributable to Ship Finance in the VIEs is included in non-controlling interests in our Consolidated Financial Statements. At December 31, 2018 (Successor) and at December 31, 2017 (Predecessor) the units are reported within drilling units in our balance sheet. We did not record any gains from the sale of the units, as they continued to be reported as assets at their original cost in our Consolidated Balance Sheet at the time of each transaction. The investment in capital lease amounts are eliminated on consolidation against the corresponding capital lease liability held within Seadrill entities. The remainder of assets and liabilities of the VIEs are fully reflected within the Consolidated Financial Statements. The bareboat charter rates are set on the basis of a Base LIBOR Interest Rate for each bareboat charter contract, and thereafter are adjusted for differences between the LIBOR fixing each month and the Base LIBOR Interest Rate for each contract. A summary of the average bareboat charter rates per day for each unit is given below for the respective years.
The assets and liabilities in the statutory accounts of the VIEs as at December 31, 2018 (Successor) and as at December 31, 2017 (Predecessor) are as follows:
In the period ended December 31, 2018 (Successor), the VIEs declared and paid no dividends (December 31, 2017 (Predecessor): $14 million). |
Assets held for sale |
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Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets held for sale | Assets held for sale West Rigel On December 2, 2015 (Predecessor), we signed an amendment with Jurong Shipyard (“Jurong”) for the deferral of the delivery of the semi-submersible drilling unit, the West Rigel (the “Unit”). The deferral period originally lasted until June 2, 2016 (Predecessor), but this was subsequently extended to July 6, 2018. In the event no employment was secured for the Unit, no alternative action is completed and following completion of the deferral period, we agreed with Jurong that we would form a Joint Asset Holding Company for joint ownership of the Unit, of which 23% was to be owned by us and 77% by Jurong. On December 26, 2017 (Predecessor), Jurong announced that a sale agreement, subject to conditions had been signed for the West Rigel. As the agreement is pursuant to conditions being met, we continued to hold the asset within "Non-current assets held for sale" in the year ended December 31, 2017 (Predecessor). On April 5 (Predecessor), 2018, we entered into a settlement and release agreement, subject to Bankruptcy Court approval, with Jurong whereby we agreed that our share of the sale proceeds from the sale of the West Rigel by Jurong would be $126 million. To reflect this as the asset held for sale value at December 31, 2017 (Predecessor), a further $2 million loss on disposal was recognized in the Consolidated Statement of Operations for the year ended December 31, 2017 (Predecessor). On May 9, 2018 the West Rigel was sold by Jurong and we received a share of proceeds totaling $126 million. |
Supplementary cash flow information |
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Supplementary cash flow information | Supplementary cash flow information The table below summarizes the non-cash investing and financing activities relating to the periods presented:
In June 2016 (Predecessor), we entered into another privately negotiated exchange agreement with certain holders of our outstanding 5.625% (subsequently increased to 6.125%) Senior Notes due 2017 (the "2017 Notes"), pursuant to which we agreed to issue a total of 7,500,000 new shares of our common stock, par value $2.00 per share, in exchange for $50 million principal amount of the 2017 Notes. We had a total of 508,444,280 shares of our common stock issued and outstanding, post settlement on June 13, 2016.
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Subsequent Events |
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Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Sonangol We entered into an agreement to establish a 50:50 joint venture with Sonangol called Sonadrill. The joint venture will operate four drillships, focusing on opportunities in Angolan waters. Each of the joint venture parties will bareboat two drillships into Sonadrill and we will manage and operate all the units. Receipt of overdue receivable In January 2019, we received $26 million for an overdue receivable which was fully provided in the Predecessor company. This will be recognized as other operating income in our first quarter 2019 results. Tender offer of New Secured Notes In February 2019, we launched a consent solicitation for proposed amendments to our Senior Secured Notes due in 2025 where we planned to launch a tender offer for the Senior Secured Notes. The required majority of Note holders representing greater than 50% of the principal amount outstanding agreed to consent to the proposed amendments and to participate in the tender offer. In March 2019, we launched a c.$311 million tender offer at an offer price of 107. Following completion of the tender offer, the outstanding Senior Secured Notes held by third parties is expected to reduce from $769 million to $458 million. Dalian Newbuilds The Newbuild contract for the jack-up rig West Dione was terminated in February 2019. In March 2019, the Seadrill contracting parties commenced arbitration proceedings on all eight Dalian rigs and will claim for repayment of yard installments plus interest and damages. |
Accounting policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar ("U.S. dollar" or "US$") rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which we control, or directly or indirectly holds more than 50% of the voting control are consolidated in the Consolidated Financial Statements, as well as certain variable interest entities of which we are deemed to be the primary beneficiary. |
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Basis of consolidation | Basis of consolidation The Consolidated Financial Statements include our assets and liabilities, our majority owned and controlled subsidiaries and certain variable interest entities, (“VIE”s) in which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic success, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. We have certain investments in the common stock or in-substance common stock of associated companies. Refer to Note 2 – Accounting policies for further information on our equity investments. |
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Bankruptcy accounting | Bankruptcy accounting As set out in Note 4 - Chapter 11 Proceedings, we operated as a debtor-in-possession from September 12, 2017 to July 2, 2018. During this period, we prepared our Consolidated Financial Statements under Accounting Standards Codification 852, Reorganizations ("ASC 852"). ASC 852 required that the financial statements distinguished transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings were recorded in “Reorganization items" on our Consolidated Statements of Operations. In addition, ASC 852 required changes in the accounting and presentation of significant items on the Consolidated Balance Sheets, particularly liabilities. Pre-petition obligations that may have been impacted by the Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". |
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Fresh Start Reporting | Fresh Start Reporting Upon emergence from bankruptcy on July 2, 2018 (the "Effective Date"), in accordance with ASC 852 related to fresh start reporting, Seadrill Limited became a new entity for financial reporting purposes. Upon adoption of fresh start reporting, our assets and liabilities were recorded at their fair values. We elected to apply fresh start reporting effective July 2, 2018 (the “Convenience Date”) to coincide with the timing of our normal third quarter reporting period. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and use of an accounting convenience date was appropriate. The fair values of our assets and liabilities differed materially from the recorded values of our assets and liabilities as reflected in the Predecessor historical Consolidated Balance Sheets. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related predominantly deferred tax effects through "Income tax expense", during the period from January 1, 2018 through July 1, 2018. Accordingly, our Consolidated Financial Statements subsequent to July 2, 2018 are not and will not be comparable to the Predecessor Consolidated Financial Statements prior to the Convenience Date. Our Consolidated Financial Statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented on July 2, 2018 and dates prior. Our financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material. |
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Going concern | Going concern In our Form 20-F covering our annual report for the fiscal year ended December 31, 2017, issued on April 12, 2018, we reported that uncertainties linked to our Chapter 11 Re-organization gave rise to a substantial doubt over our ability to continue as a going concern for a period of at least twelve months after the date the financial statements were issued. As set out in Note 4 - Chapter 11 Proceedings, we emerged from the Chapter 11 and completed our plan of reorganization on July 2, 2018. This addressed our liquidity concerns as it provided for $1.08 billion of new capital, extinguished approximately $2.4 billion in unsecured bond obligations and approximately $250 million in unsecured interest rate and currency swaps, eliminated near-term amortization obligations and extended maturities on debt. We emerged from Chapter 11 with $2.2 billion of post emergence cash and $7.6 billion of outstanding debt principal. We believe that cash on hand, liquid investments, contract and other revenues will generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next twelve months. Therefore, there is no longer a substantial doubt over our ability to continue as a going concern for at least the twelve months after the date the financial statements are issued. |
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Out of period adjustment | Out of period adjustment The financial statements for the period from January 1, 2018 through July 1, 2018 (Predecessor) include an income tax expense of $18 million due to an adjustment in the income tax charge for a subsidiary related to prior years. |
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Use of estimates | Use of estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Foreign currencies | Foreign currencies The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby the Statement of Operations are translated using the average exchange rate for the year and the assets and liabilities are translated using the year-end exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders' equity. Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. |
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Related parties | Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. Refer to Note 30 – Related Party Transactions. |
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Revenue from contracts with customers | Revenue from contracts with customers The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments. We recognize consideration for activities that correspond to a distinct time increment within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment, ratably over the estimated contract term. We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess these estimates each reporting period as required. Refer to Note 7 - Revenue from Contracts with Customers. Dayrate Drilling Revenue - Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term, and therefore, recognized in line with the contractual rate billed for the services provided for any given hour. Mobilization Revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract. Demobilization Revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions. Revenues Related to Reimbursable Expenses - We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations. Contract Balances - Accounts receivable is recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Contract asset balances consist primarily of demobilization revenues which have been recognized during the period but are contingent on future demobilization activities. Contract liabilities include payments received for mobilization as well as rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. Local Taxes - In some countries, the local government or taxing authority may assess taxes on our revenues. Such taxes may include sales taxes, use taxes, value-added taxes, gross receipts taxes and excise taxes. We generally record tax-assessed revenue transactions on a net basis. Deferred Contract Costs - Certain direct and incremental costs incurred for upfront preparation, initial mobilization and modifications of contracted rigs represent costs of fulfilling a contract as they relate directly to a contract, enhance resources that will be used in satisfying our performance obligations in the future and are expected to be recovered. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. |
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Other revenues | Other revenues Other revenues consist of related party revenues, external management fees, and early termination fees. Refer to Note 8 – Other revenues. Related party revenues - Related party revenues relate to management support and administrative services provided to Seadrill Partners, Northern Drilling and SeaMex. External management fees relate to the operational, administrative and support services provided to third parties. External management fees - External management fees relate to the operational, administrative and support services that we previously provided to Sapura Energy as part of the agreement that we entered into when we sold majority of the tender rig business. Early termination fees - Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved. |
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Vessel and Rig Operating Expenses | Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked and include the remuneration of offshore crews and related costs, rig supplies, insurance costs, expenses for repairs and maintenance and costs for onshore support personnel. We expense such costs as incurred. On emergence, we classified certain costs as "vessel and rig operating expenses" that are directly attributable to rig activities and had previously been classified as "general and administrative expenses" in our Consolidated Statements of Operations. |
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Mobilization and demobilization expenses | Mobilization and demobilization expenses We incur costs to prepare a drilling unit for a new customer contract and to move the rig to a new contract location. We capitalize the mobilization and preparation costs for a rig's first contract as a part of the rig value and recognize them as depreciation expense over the expected useful life of the rig (i.e. 30 years). For subsequent contracts, we defer these costs over the expected contract term (see deferred contract costs above), unless we don't expect the costs to be recoverable, in which case we expense them as incurred. We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. |
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Repairs, maintenance and periodic surveys | Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized and amortized over the anticipated period between overhauls, which is generally five years. Related costs are primarily yard costs and the cost of employees directly involved in the work. We include amortization costs for periodic overhauls in depreciation expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. |
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Income taxes | Income taxes Seadrill is a Bermuda company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – Taxation. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authorities widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. |
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Earnings per share | Earnings per share Basic earnings per share (“EPS”) is calculated based on the income/(loss) for the period available to common stockholders divided by the weighted average number of shares outstanding for basic EPS for the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments such as our restricted stock units. The determination of dilutive earnings per share may require us to make adjustments to net income and the weighted average shares outstanding. Refer to Note 13 – Loss per share. |
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Current and non-current classification | Current and non-current classification Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments whose fair value is a net liability as current. Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal and we classify any derivatives financial instruments whose fair value is a net asset as non-current. |
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Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less. |
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Restricted cash | Restricted cash Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets. Refer to Note 14 – Restricted cash. |
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Receivables | Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. We establish reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, we consider the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. Interest income on receivables is recognized as earned. Refer to Note 16 – Accounts receivable. |
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Equity investments | Equity investments Investments in common stock are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are also considered. We classify our other equity investments either as "Marketable Securities" or "Investments in Associated Companies" depending on their nature. We classify our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". We record gains or losses on investments held fair value as "Gains / (losses) on Marketable Securities". Refer to Note 15 – Marketable securities and Note 18 – Investment in associated companies. We analyze our equity method investments for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. All other equity investments, which consist of investments that do not gives us the ability to exercise significant influence as well as investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. If we can’t readily ascertain the fair value, we record the investment at cost less impairment. We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that indicates that the investment's is impaired. If an event or change in circumstances has occurred in that period that indicates that the investment's is impaired, then we record an impairment charge for the difference between the estimated fair value of the investment and its carrying amount. For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date. Refer to Note 11 - Impairment loss on marketable securities and investments in associated companies for details. |
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Newbuildings | Newbuildings Generally, the carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components usually include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. During construction, capitalized interest of newbuildings is based on accumulated expenditures for the applicable project at our current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying the interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period. |
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Capitalized interest | We don't capitalize amounts beyond the actual interest expense incurred in the period. We ceased capitalization of interest on newbuildings when we operated as a debtor-in-possession as interest payments made during bankruptcy proceedings were treated as adequate protection payments. |
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Drilling units | Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jack-up rigs, when new, is 30 years. Significant investments are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Refer to Note 20 – Drilling units. Drilling units recognized through a business combination or through the application of fresh start accounting are measured at fair value as of the date of acquisition or the date of emergence, respectively. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. |
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Assets held for sale | Assets held for sale Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. On emergence from Chapter 11, we no longer had any assets classified as held for sale. Refer to Note 36 – Assets held for sale. |
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Equipment | Equipment Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between 3 and 5 years depending on the type of asset. Refer to Note 21 – Equipment. |
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Impairment of long-lived assets | Impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. We first assess recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to result from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, will be the amount which the carrying value of the asset exceeds the discounted future net cash flows. Refer to Note 20 – Drilling units. |
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Other intangible assets and liabilities | Other intangible assets and liabilities Intangible assets and liabilities were recorded at fair value on the date of emergence less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. For periods after emergence we have applied a new accounting policy to classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 17 – Other assets. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 23 – Other liabilities. |
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Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activities On emergence from Chapter 11, we have an interest-rate cap financial instrument that has not been formally designated as a hedge and is recorded at fair value. Changes in the fair value are recorded as a gain or loss as a separate line item within "financial items" in the Consolidated Statements of Operations. Refer to Note 31 – Financial instruments and risk management and Note 32 - Fair values of financial instruments. |
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Trade payables | Trade payables Trade payables are recorded in the balance sheet to recognize a liability to a supplier for a good or service they have provided us. |
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Deferred charges | Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan and the amortization is included in interest expense. On emergence from Chapter 11, our loan costs were reduced to nil and we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount will be unwound over the remaining terms of the debt facilities. Refer to Note 5 – Fresh Start Accounting and Note 10 – Interest expense. |
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Debt | Debt We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we will incur a liability for the principal to be repaid. On emergence from Chapter 11, we issued new debt instruments and the carrying values of our third-party debt liabilities were adjusted to fair value. |
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Pension benefits | Pension benefits We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We record the service cost, as “Vessel and rig operating expenses” or as "General and administrative expenses" in our Consolidated Statements of Operations depending on the whether or not the related employee's role is directly attributable to rig activities. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Refer to Note 29 - Pension benefits for more information on the accounting for these pension benefits / pension expense. |
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Loss contingencies | Loss contingencies We recognize a loss contingency in the Consolidated Balance Sheet where we have a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Refer to Note 33 – Commitments and contingencies. |
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Treasury shares | Treasury shares Treasury shares are recognized at cost as a component of equity. We record the nominal value of treasury shares purchased as a reduction in share capital. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. On emergence from Chapter 11, we no longer have any treasury shares. |
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Share-based compensation | Share-based compensation On emergence from Chapter 11, we had one Restricted Stock Unit (“RSU”) plan where the holder of an award is entitled to receive shares if still employed at the end of the three-year vesting period. There is no requirement for the holder to pay for the share on grant or vesting of the award. The fair value of the RSU award is calculated as the market share price on grant date. The fair value of the awards expected to vest is recognized as compensation cost straight-line over the vesting period. We have made the election to account for forfeitures on an actual basis as they occur. Refer to Note 28 – Share Based Compensation. |
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Recently Adopted Accounting Standards | Recent Accounting Standards We adopted the following accounting standard updates ("ASUs") in the year: ASU 2014-09 - Revenue from contracts with customers In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09, which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. We adopted ASU 2014-09 and its related amendments, or collectively Topic 606, effective January 1, 2018 using the modified retrospective method. Accordingly, we have applied the five-step method outlined in Topic 606 for determining when and how revenue is recognized to all contracts that were not completed as of the date of adoption. Revenues for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported under the previous revenue recognition guidance. For contracts that were modified before the effective date, we have considered the modification guidance within the new standard and determined that the revenue recognized and contract balances recorded prior to adoption for such contracts were not impacted. While Topic 606 requires additional disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, its adoption has not had a material impact on the measurement or recognition of our revenues. As we have transitioned to the new standard under the modified retrospective method, we have recorded the cumulative impact of applying the new guidance as an adjustment to opening retained earnings on January 1, 2018. The total adjustment was $7 million which represented the earned portion of demobilization revenue expected to be received for contracts not completed as of December 31, 2017, which was not previously recognized until demobilization occurred. See Note 7 - Revenue from contracts for further information. ASU 2016-01 Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which made targeted improvements to the recognition and measurement of financial assets and financial liabilities. The update changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. The standard does not change the guidance for classifying and measuring investments in debt securities. After adopting ASU 2016-01 we continue to record equity investments that do not result in consolidation and are not accounted for under the equity method at fair value (unless the fair value is not readily ascertainable). However, we will record changes in fair value directly to net income whereas previously we recorded such changes to other comprehensive income until realized. We have made the election available under ASC 321-10-35-2 to record equity investments with no readily ascertainable fair value at cost less impairment. We transitioned to the new standard using the modified retrospective approach. Accordingly, we recorded the cumulative effect of adopting the update at the date of adoption. We reclassified $31 million of previously recognized fair value gains from accumulated other comprehensive income to retained earnings on January 1, 2018. ASU 2016-16 Income Taxes - Income taxes intra-entity transfers of assets other than inventory In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Income taxes Intra-Entity Transfers of Assets other than Inventory, which requires companies to recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period that the sale or transfer occurs. The exception to recognizing the income tax effects of intercompany sales or transfers of assets remains in place for intercompany inventory sales and transfers, i.e. companies will still be required to defer the income tax effects of intercompany inventory transactions. We adopted the new standard effective January 1, 2018 under the modified retrospective approach. As a result of the modified retrospective application, “Other Assets” was reduced in our Condensed Consolidated Balance Sheet with a cumulative adjustment to retained earnings of $59 million and non-controlling interests of $25 million. ASU 2016-18 Statement of Cash Flows - Restricted Cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, to address classification of activity related to restricted cash and restricted cash equivalents in the cash flows. The standard eliminates the presentation of transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents and restricted cash equivalents are presented in more than one line item on the balance sheet, a reconciliation of the totals in the cash flows to the related captions in the balance sheet are required, either on the face of the cash flow or in the notes to the Consolidated Financial Statements. Additional disclosures are required for the nature of the restricted cash and restricted cash equivalents. The standard is effective for fiscal years beginning after 15 December 2017. We have adopted the new standard effective January 1, 2018 under the retrospective approach. The result of this adoption was a classification adjustment on our Consolidated Statement of Cash Flows for each of the years presented. Other ASUs We adopted the following ASUs in the year, none of which had any impact on our Consolidated Financial Statements and related disclosures:
ASU 2018-02 Income Statement—Reporting Comprehensive Income (Topic 220)
Recently Issued Accounting Standards The FASB have issued the following ASUs that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods.
ASU 2016-02 - Leases (also 2018-01, 2018-10, 2018-11. 2018-20) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update required an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offered specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal year, using a modified retrospective application. Effective January 1, 2019, we will adopt Topic 842 using the modified retrospective application through a cumulative-effect adjustment to retained earnings at January 1, 2019. We have elected the following transition practical expedients, which will be applied consistently to all leases that commenced before January 1, 2019:
We have determined that our drilling contracts contain a lease component, however, we have elected not to separate the drilling contract lease and non-lease components. We have determined that the non-lease component in our drilling contracts is the predominant component. As such, we will continue to account for our drilling contracts under the guidance in Topic 606. We do not expect our pattern of revenue recognition to change significantly compared to current accounting standards. We have determined that adoption of this standard will result in increased disclosure of our leasing arrangements. Additionally, we will recognize lease liabilities and corresponding right-of-use assets for leasing arrangements where we are a lessee. We expect to recognize an aggregate lease liability of between $20 million to $40 million on adoption. We have provided a summary of our commitments under operating leases at December 31, 2018 in Note 34 - Operating leases. ASU 2016-13 - Financial Instruments - Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted only from January 1, 2019. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as at the beginning of the first reporting period in which the guidance is adopted. We are in the early stage of evaluating the impact of this standard update. Our customers are international oil companies, national oil companies and large independent oil companies. Our financial assets are primarily held with counter parties with high credit standing and we have historically had a low incidence of bad debt expense. Therefore, we do not currently expect this guidance to significantly affect our Consolidated Financial Statements and related disclosures when we adopt it. ASU 2018-07 Compensation - Stock Compensation In June 2018, the FASB issued ASU 2018-07, Stock Compensation (Topic 718): Improvements to non-employee share-based payment accounting, which intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-13 Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity’s financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans- General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity’s financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-15 Intangibles In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). The update is intended to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-16 Derivatives and Hedging In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The update is intended to permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the direct Treasury obligations of the U.S. government, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association Municipal Swap Rate. The guidance will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted if an entity has already adopted ASU 2017-12. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures. ASU 2018-17 Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The update is intended to improve general purpose financial reporting by considering indirect interests held through related parties in common control arrangements on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we will adopt ASU 2018-17 on a prospective basis and apply the amendments in the update to qualifying new or redesignated hedging relationships entered into on or after January 1, 2019. We do not expect this to have a material impact on our Consolidated Financial Statements and related disclosures. Other accounting standard updates issued by the FASB As of March 28, 2019, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods. |
Chapter 11 Proceedings (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restructuring shares | This is summarized in the below table:
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Schedule of Reorganization Items | The following table summarizes the components included within reorganization items:
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Fresh Start Accounting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Cost of Capital | The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
We have the following investments in associated companies:
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Reconciliation of the distributable value to the estimated fair value | The following table reconciles the distributable value to the estimated fair value of Successor common stock as at the Effective Date:
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Reconciliation of the distributable value to the estimated reorganization value | The following table reconciles the distributable value to the estimated reorganization value as at the Effective Date:
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Schedule of Fresh-Start Adjustments | The adjustments included in the following Consolidated Balance Sheet reflect the effects of the consummation of the transactions contemplated by the Reorganization Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs.
Reorganization Adjustments:
(1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of New Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest.
(e) Liabilities subject to compromise were settled as follows in accordance with the Plan:
Fresh Start Adjustments
(p) Adjustment to the drilling units to record the fair value of the rigs and capital spares utilizing a combination of income-based and market-based approaches. The discount rate of 11.4% was used for the discounted cash flow analysis under the income-based approach. A cost-based approach was utilized to determine the fair value for the capital spares.
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Segment information (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment results | Revenues Operating revenues by operating segment are as follows:
Depreciation and amortization Depreciation and amortization by operating segment are as follows:
Operating (loss)/income - net (loss)/income Operating (loss)/income and (loss)/income by operating segment is as follows:
Total assets Total assets by operating segment are as follows:
Capital expenditures – fixed assets 1 Capital expenditure by operating segment are as follows:
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Schedule of revenues and fixed assets by geographic area | Geographic segment data Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area: Revenues Revenues by geographic area are as follows:
Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area are as follows:
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Schedule of customer with contract revenues by major customers | In the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the years ended December 31, 2017 (Predecessor) and 2016 (Predecessor), we had the following customers with contract revenues greater than 10% in any of the years presented:
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Revenue from Contracts with Customers (Tables) |
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of contract assets and contract liabilities from contracts with customers | The following table provides information about receivables, contract assets and contract liabilities from our contracts with customers:
(1) Current contract assets and liabilities balances are included in “Other current assets” and “Other current liabilities,” respectively in our Consolidated Balance Sheets as of December 31, 2018 (Successor). Significant changes in the contract assets and the contract liabilities balances during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
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Schedule of deferred contract costs | Deferred contract costs during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
(1) Refer to Note 5 – Fresh Start Accounting for further information. |
Other revenues (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other revenues | Other revenues consist of the following:
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Loss on disposals (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Sale of Productive Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disposals | We have recognized the following loss on disposals:
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Interest expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest expense | Interest expense consists of the following:
We incur cash and payment-in-kind interest on our debt facilities. This is summarized in the table below.
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Impairment loss on marketable securities and investments in associated companies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of impairment on marketable securities and investments | We have recognized the following impairments on our marketable securities and investments in associated companies:
*On emergence from Chapter 11, the carrying value of our investments in associated companies and joint ventures were adjusted to fair value resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items" for the period from January 1, 2018 through July 1, 2018 (Predecessor). For further information, refer to Note 5 - Fresh start accounting. Our share in results of our associated companies (net of tax) were as follows:
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Taxation (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income taxes | Income taxes consist of the following:
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Schedule of items within the Statement of Operations which received no tax relief | The rate reflects no tax relief on the majority of the following items within the Statement of Operations, due to these items largely falling within the zero tax rate Bermudan companies:
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Schedule of income tax reconciliation | The income taxes for the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the years ended December 31, 2017 (Predecessor) and 2016 (Predecessor) differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows:
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Schedule of deferred income taxes | Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets/(liabilities) consist of the following: Deferred tax assets:
Deferred tax liabilities:
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Schedule of changes in uncertain tax positions | The changes to our uncertain tax positions were as follows:
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Summary of tax years that remain subject to examination | The following table summarizes the earliest tax years that remain subject to examination by other major taxable jurisdictions in which we operate.
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Loss per share (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of calculation of basic and diluted EPS | The components of the numerator for the calculation of basic and diluted EPS are as follows:
The components of the denominator for the calculation of basic and diluted EPS are as follows:
The basic and diluted loss per share are as follows:
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Restricted cash (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Cash and Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted cash | Restricted cash consists of the following:
(1) Restricted cash at December 31, 2018 included cash held as collateral against the New Secured Notes. This included (i) $228 million of the initial proceeds from issuing the notes, (ii) $55 million deferred consideration payment from Sapura Energy and (iii) $43 million shareholder loan repayment from Seabras Sapura. (2) Cash held as collateral against guarantees and other linked facilities we have with Danske Bank. |
Marketable securities (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities Held | The below table shows the carrying value of our investments in marketable securities for periods presented in this report.
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Gross Realized Gains and Losses Related to Marketable Securities | The below table shows the gain and losses recognized through net income for the periods presented in this report since the adoption of ASU 2016-01.
The below table shows the gain and losses recognized through other comprehensive income for the periods presented in this report before the adoption of ASU 2016-01.
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Other assets (Tables) |
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Other Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other assets |
(1) On May 11, 2018, Seadrill Limited bought an interest rate cap from Citigroup for $68 million. The interest rate mitigates our exposure to future increases in LIBOR rates. We have an exposure to LIBOR rates because we hold floating rate debt. For the period from January 1, 2018 through to July 1, 2018 and from July 2, 2018 through to December 31, 2018 there had been a net fair value adjustment on the interest rate cap of $6 million and $22 million respectively to bring the asset value to $39 million. (2) On April 30, 2013, we completed the disposal of the tender rig business to Sapura Energy. The total consideration consisted of a non-contingent deferred consideration of $145 million, bearing interest at LIBOR plus 5%, which was due in April 30, 2016. During the year ended December 31, 2016, Sapura Energy repaid $10 million of the principal and paid $25 million of interest. On August 28, 2017, this was converted into a formalized loan agreement whereby $5 million is repaid each month. During the year ended December 31, 2018, the full amount was repaid. (3) Income tax effects following the sale of assets on divestment of North Atlantic Drilling Limited. The asset was expensed on January 1, 2018 following adoption of ASU 2016-16 - for further information refer to Note 3 - Recent accounting standards. Other assets are presented in our Consolidated Balance Sheet as follows:
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Schedule of carrying amounts and accumulated amortization of favorable contracts | The gross carrying amounts and accumulated amortization included in 'Other current assets' and 'Other non-current assets' for favorable contracts in the Consolidated Balance Sheet are as follows:
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Schedule of future amortization of favorable contracts | The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods:
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Investment in associated companies (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of ownership percentages in associated companies | The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
We have the following investments in associated companies:
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Share in results from associated companies | We have recognized the following impairments on our marketable securities and investments in associated companies:
*On emergence from Chapter 11, the carrying value of our investments in associated companies and joint ventures were adjusted to fair value resulting in a loss recognized in the Consolidated Statement of Operations in "Reorganization items" for the period from January 1, 2018 through July 1, 2018 (Predecessor). For further information, refer to Note 5 - Fresh start accounting. Our share in results of our associated companies (net of tax) were as follows:
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Summary of Consolidated Statements of Operations for our equity method investees | The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
The results of the Seabras Sapura companies and our share in those results (net of tax) were as follows:
The results of the SeaMex companies and our share in those results (net of tax) were as follows:
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Summarized Consolidated Balance sheets for our equity method investees | The summarized balance sheets of the directly owned SDLP companies at the year and our share of recorded equity in those companies was as follows:
(1) Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. The summarized balance sheets of the Seabras Sapura companies at the year and our share of recorded equity in those companies was as follows:
The summarized balance sheets of the SeaMex companies at the year and our share of recorded equity in those companies was as follows:
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Newbuildings (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Newbuildings | Newbuildings consist of the following:
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Drilling units (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of drilling units | Newbuildings consist of the following:
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Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment | Equipment consists of office equipment, software, furniture and fittings.
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Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | As at December 31, 2018 (Successor) and 2017 (Predecessor), we had the following liabilities for third party debt agreements:
Net leverage ratio: to maintain a ratio of net debt to EBITDA as set out below (which will be tested on each financial quarter commencing with the financial quarter ending on March 31, 2022 until the final maturity date of the credit facilities):
We have summarized the key terms of our secured credit facilities as at December 31, 2018 in the table below:
Net leverage ratio is greater than:
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Schedule of Credit Facilities | The terms of these facilities are set out in the below table:
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Schedule of Debt Issuance Costs Against Current and Long-Term Debt | This was presented in our Consolidated Balance Sheet as follows.
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Outstanding Debt | The outstanding debt as at December 31, 2018 is repayable as follows:
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Other liabilities (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
(1) Interest was settled monthly during the filing period. (2) Residual deferred mobilization revenue was recognized in the predecessor on fresh start. (3) Balances held as at December 31, 2017 exclude liabilities that were subject to compromise, which were reclassified to a separate line within the Consolidated Balance Sheet. This represents our estimate at 31 December, 2017 of known or potential pre-petition claims to be resolved in connection with the Chapter 11 proceedings. Refer to Note 1 - General information. Other liabilities are presented in our Consolidated Balance Sheet as follows:
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Schedule of gross carrying amounts and accumulated amortization of intangible liabilities | The gross carrying amounts and accumulated amortization included in 'Other current liabilities' and 'Other non-current liabilities' for unfavorable contracts in the Consolidated Balance Sheets as follows:
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Schedule of future amortization of unfavorable contracts | The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods:
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Common shares (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Capital |
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Non-controlling interest (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in non-controlling interest | Changes in non-controlling interest for the years ended December 31, 2018 (Successor), 2017 (Predecessor) and 2016 (Predecessor) are as follows:
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Redeemable non-controlling interest (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in redeemable non-controlling interest | Changes in redeemable non-controlling interest for the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
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Accumulated other comprehensive income/(loss) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income | Accumulated other comprehensive income consists of the following:
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Pension benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of consolidated balance sheet position | Consolidated Balance Sheet position
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Schedule of annual pension cost | Annual pension cost We record pension costs in the period during which the services are rendered by the employees.
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Schedule of funded status of the defined benefit plan | The funded status of the defined benefit plan
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Change in projected benefit obligations | Change in projected benefit obligations
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Change in pension plan assets | Change in pension plan assets
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Schedule of assumptions used in calculation of pension obligations | Assumptions used in calculation of pension obligations
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Schedule of weighted-average asset allocation of funds related to defined benefit plan | The weighted-average asset allocation of funds related to our defined benefit plan at December 31, was as follows: Pension benefit plan assets
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Schedule of expected annual pension plan contributions | The table below shows our expected annual pension plans contributions under defined benefit plans for the years ending December 31, 2019-2028. The expected payments are based on the assumptions used to measure our obligations at December 31, 2018 and include estimated future employee services.
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Related party transactions (Tables) |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The below table provides an analysis of related party receivable balances for periods presented in this report.
(n) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 35 - Variable Interest Entities for further details). The carrying amount of the loans was $222 million at December 31, 2018 (2017: $314 million). The principal outstanding on the loans was $314 million at December 31, 2018, (2017: $314 million). There is a right of offset of trading balance assets against the loans, the net position is disclosed within “Long-term debt due to related parties” on the Consolidated Balance Sheets. As at December 31, 2018 (Successor) the trading position was a net asset position of $4 million. The loans bear interest at a fixed rate of 4.5% per annum and mature between 2023 and 2029. The total interest expense incurred for the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million, the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 million (year ended December 31, 2017 (Predecessor): $15 million). (o) Trading balances primarily include related party payables due from our Ship Finance variable interest entities to Ship Finance and trading balances due from us to SeaMex and Seadrill Partners. The below table provides an analysis of related party revenues for periods presented in this report.
(a) We provide management and administrative services to Seadrill Partners and SeaMex and operation and technical support services to Seadrill Partners, SeaMex and Northern Drilling. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We previously provided in country support services to the Seadrill Partners rig West Polaris when it operated in Angola. The West Polaris's contract ended in December 31, 2018, so we no longer earn revenues under this arrangement. (c) In addition to the amounts shown above, we recognized reimbursable revenues of $10 million in the period from July 2, 2018 through December 31, 2018 for work performed to mobilize the Northern Drilling rig West Mira for its first drilling contract, which we expect to commence in 2019. The below table provides an analysis of related party financial income for periods presented in this report.
(g) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). We also previously earned interest income on our related party loans to Seadrill Partners. (h) We previously held interest rate swap agreements with Seadrill Partners. These were canceled when we filed for Chapter 11 in September 2017. (i) We record interest income on deferred consideration receivables from Seadrill Partners (see item (k) below). Related party assets and liabilities are presented in our Consolidated Balance Sheet as follows:
The below table provides an analysis of related party receivable balances for periods presented in this report.
(j) We have loan receivables outstanding from SeaMex and Seabras Sapura. We previously had loan receivables from Seadrill Partners, which have been repaid. We have summarized the amounts outstanding in the table below:
SeaMex loans include (i) $250 million "sellers credit" provided to SeaMex in March 2015 which matures in December 2019 (ii) $45 million working capital loan advanced in November 2016 and (iii) $103 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% and are subordinated to SeaMex's external debt facility. Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $78 million balance shown in the table above includes (i) $70 million of loan principal and (ii) $8 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility. We received repayments against these related party loans of $23 million during 2018. In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 18 - "Investments in Associated Companies" for further details. We received repayments against these shareholder loans of $20 million during 2018. The outstanding balance of the West Vencedor facility was repaid by Seadrill Partners in May 2018. (k) Deferred consideration arrangements include receivables due to us from Seadrill Partners from the sale of the West Vela and the West Polaris to Seadrill Partners in November 2014 and June 2015 respectively. We have summarized amounts due for each period in the table below:
On adoption of fresh start accounting, we recorded receivables for West Vela share of dayrate and West Polaris earnout. These amounts were previously accounted for as gain contingencies so were only recognized when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items. We recorded the following gains in other operating income for these arrangements.
(l) On April 26, 2017, we converted $146 million, including accrued interest and fees, in subordinated loans provided to Archer into a $45 million convertible loan. The subordinated convertible loan bears interest of 5.5%, matures in December 2021 and has a conversion right into equity of Archer Limited in 2021. At inception, the fair value of the convertible bond was $56 million whereas the previous loan had a carrying value of $37 million. We therefore recognized a gain on debt extinguishment of $19 million in 2017 because of this transaction. The loan receivable is a convertible debt instrument comprised of a debt instrument and a conversion option, classed as an embedded derivative. Both elements are measured at fair value at each reporting date. As at December 31, 2018 (Successor), the fair value of the convertible debt instrument was $43 million of which the split between debt and embedded derivative option was $43 million and nil respectively. The fair value gain/(loss) on the convertible bond for periods presented is summarized below:
(m) Trading balances primarily comprise receivables from Seadrill Partners and SeaMex for related party management fees. In addition, certain receivables and payables arise when we pay an invoice on behalf of Seadrill Partners or SeaMex and vice versa. Receivables and payables are generally settled quarterly in arrears. The below table provides an analysis of related party operating expenses for periods presented in this report.
(d) Seadrill Partners previously provided us with in-country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us with in-county support services for the West Pegasus and West Freedom when those rigs operated in Mexico and Venezuela. (e) We received services from certain other related parties. These included management and administrative services from Frontline, warehouse rental from Seabras Sapura and other services from Archer and Seatankers. (f) We previously acted as an intermediate charterer for the Seadrill Partners rig West Aquarius, during its contract with Hibernia in Canada, which ended in April 2017. We also acted as an intermediate charterer for the Seadrill Partners rigs T-15 and T-16 until December 2016. |
Financial instruments and risk management (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Risk | We have set out our exposure to interest rate risk on our net debt obligations at December 31, 2018 (Successor) in the below table.
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Schedule of Sensitivity Analysis | The LIBOR rate applied on our debt at December 31, 2018 was 2.81%. Therefore, the interest cap would mitigate the impact of 94% of a theoretical 1% point increase in the LIBOR rate. This is set out in the below table.
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Schedule of Realized and Unrealized Gains and Losses | Gains and losses on derivatives reported in our consolidated statement of operations included the following:
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Schedule of Derivative Financial Instruments | Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
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Fair value of financial instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of financial instruments measured at amortized cost | The carrying value and estimated fair value of our financial instruments that are measured at amortized cost at December 31, 2018 (Successor) and December 31, 2017 (Predecessor) are as follows:
(1) Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis (2) During the period we were in Chapter 11 Bankruptcy, the fair value for these financial instruments was not reasonably determinable. |
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Schedule of financial instruments measured at fair value on a recurring basis | The carrying value and estimated fair value of our financial instruments that are measured at fair value on a recurring basis at December 31, 2018 (Successor) and December 31, 2017 (Predecessor) are as follows:
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Commitments and contingencies (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of guarantees in favor of third parties | We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee:
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Operating leases (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||
Leases, Operating [Abstract] | |||||||||||||||||||||||||||||||
Future minimum rental payments | Future minimum rental payments are as follows:
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Variable Interest Entities (Tables) |
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Variable Interest Entity, Measure of Activity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of sale and leaseback arrangements and repurchase of options | The following table gives a summary of the sale and leaseback arrangements and repurchase options from VIEs, as at December 31, 2018:
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Summary of average bareboat charter rates | A summary of the average bareboat charter rates per day for each unit is given below for the respective years.
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Schedule of assets and liabilities in statutory accounts of the VIEs | The assets and liabilities in the statutory accounts of the VIEs as at December 31, 2018 (Successor) and as at December 31, 2017 (Predecessor) are as follows:
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Supplementary cash flow information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of non-cash investing and financing activities | The table below summarizes the non-cash investing and financing activities relating to the periods presented:
In June 2016 (Predecessor), we entered into another privately negotiated exchange agreement with certain holders of our outstanding 5.625% (subsequently increased to 6.125%) Senior Notes due 2017 (the "2017 Notes"), pursuant to which we agreed to issue a total of 7,500,000 new shares of our common stock, par value $2.00 per share, in exchange for $50 million principal amount of the 2017 Notes. We had a total of 508,444,280 shares of our common stock issued and outstanding, post settlement on June 13, 2016.
|
General information (Details) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 02, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
drilling_unit
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2018
drilling_unit
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Number of offshore drilling units owned by the Company | drilling_unit | 35 | 35 | |||||
Percentage of voting control for certain variable interest entities (in hundredths) | 50.00% | ||||||
New capital | $ 1,080 | $ 3,501 | |||||
Extinguishment of unsecured bond obligations | 2,400 | ||||||
Extinguishment of unsecured interest rate and currency swaps | 250 | ||||||
Post emergence cash | 2,200 | ||||||
Outstanding debt principle | $ 7,600 | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Income tax expense | $ 8 | ||||||
Predecessor | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
New capital | $ 31 | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Income tax expense | $ 30 | $ 66 | $ 199 | ||||
Predecessor | Adjustment for change in the contractual dayrate | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Income tax expense | $ 18 |
Accounting policies (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |
Threshold percentage for recognizing actuarial gains and losses (in hundredths) | 10.00% |
Vesting period | 2 years 9 months |
Overhauls of drilling units | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Drilling units | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 30 years |
Period within which management is actively committed to a probable sale of assets classified as held for sale | 1 year |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Restricted Stock Units (RSUs) | |
Property, Plant and Equipment [Line Items] | |
Vesting period | 3 years |
Recent Accounting Standards (Details) - USD ($) $ in Millions |
Jan. 01, 2018 |
Jan. 01, 2019 |
---|---|---|
ASU 2016-01 - Financial Instruments | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Previously recognized fair value gains reclassified | $ (31) | |
Retained earnings | ASU 2014-09 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adoption of accounting standard update | 7 | |
Retained earnings | ASU 2016-16 - Income Taxes | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adoption of accounting standard update | 59 | |
Non-controlling interest | ASU 2016-16 - Income Taxes | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adoption of accounting standard update | $ 25 | |
Subsequent Event | Minimum | ASU 2016-02 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Aggregate lease liability expected to be recognized | $ 20 | |
Subsequent Event | Maximum | ASU 2016-02 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Aggregate lease liability expected to be recognized | $ 40 |
Chapter 11 Proceedings (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2018 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Feb. 26, 2018 |
Sep. 12, 2017 |
Jun. 13, 2016 |
May 20, 2016 |
Dec. 31, 2015 |
May 10, 2005 |
|
Fresh-Start Adjustment [Line Items] | ||||||||||||
Amount of new cash commitments in the form of new notes and equity | $ 1,000,000,000 | $ 1,080,000,000 | $ 1,060,000,000 | |||||||||
Number of shares | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 | ||||||
Common shares | $ 10,000,000 | $ 10,000,000 | ||||||||||
Fully diluted, reserved for Employee Incentive Plan | 10.00% | |||||||||||
New investor commitment fee | 5.00% | |||||||||||
Loss on Newbuilding global settlement claim | 0 | |||||||||||
Loss on impairment of long-lived assets | 0 | |||||||||||
Unamortized debt issuance costs | $ 0 | $ 66,000,000 | ||||||||||
Predecessor | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 508,763,020 | 508,763,020 | 508,763,020 | 493,078,680 | 6,000 | |||||||
Common shares | $ 1,008,000,000 | |||||||||||
Loss on Newbuilding global settlement claim | $ 0 | (1,064,000,000) | $ 0 | |||||||||
Loss on impairment of long-lived assets | 414,000,000 | 696,000,000 | 44,000,000 | |||||||||
Unamortized debt issuance costs | $ 0 | 66,000,000 | $ 0 | |||||||||
West Dorado, West Draco, West Aquila and West Libra | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Loss on impairment of long-lived assets | $ 696,000,000 | |||||||||||
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 23,750,000 | |||||||||||
Common shares | $ 200,000,000 | |||||||||||
Recipients of New Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers) | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 54,625,000 | |||||||||||
Holders of General Unsecured Claims | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 14,250,000 | |||||||||||
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 1,900,000 | |||||||||||
Fees to Select Commitment Parties | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 475,000 | |||||||||||
Hemen (on account of Primary Structuring Fee) | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Number of shares | 5,000,000 | |||||||||||
Secured Debt | New Secured Notes | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Debt, face amount | $ 880,000,000 | |||||||||||
Unamortized debt issuance costs | 9 | |||||||||||
Financial guarantee | Unsecured bonds | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Extinguished financial guarantees | 2,400,000,000 | |||||||||||
Financial guarantee | Newbuild obligation | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Extinguished financial guarantees | 1,000,000,000 | |||||||||||
Financial guarantee | Unsecured interest rate and currency swaps | ||||||||||||
Fresh-Start Adjustment [Line Items] | ||||||||||||
Extinguished financial guarantees | $ 250,000,000 |
Chapter 11 Proceedings - Key terms of the Plan of Reorganization (Details) - shares |
Dec. 31, 2018 |
Jul. 02, 2018 |
Jul. 01, 2018 |
Jun. 13, 2016 |
May 20, 2016 |
---|---|---|---|---|---|
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 |
Reserved for the Employee Incentive Plan (in shares) | 11,111,111 | ||||
Total, fully diluted (in shares) | 111,111,111.000000 | 111,111,111 | |||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 100.00% | ||||
Fully diluted | 90.00% | ||||
Fully diluted, reserved for Employee Incentive Plan | 10.00% | ||||
Total fully diluted | 100.00% | ||||
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 23,750,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 25.00% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 23.75% | ||||
Fully diluted | 21.38% | ||||
Recipients of New Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers) | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 54,625,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 57.50% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 54.63% | ||||
Fully diluted | 49.16% | ||||
Holders of General Unsecured Claims | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 14,250,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 15.00% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 14.25% | ||||
Fully diluted | 12.82% | ||||
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 1,900,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 2.00% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 1.90% | ||||
Fully diluted | 1.71% | ||||
Fees to Select Commitment Parties | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 475,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 0.50% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 0.47% | ||||
Fully diluted | 0.43% | ||||
All creditors, excluding Primary Structuring Fee | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 95,000,000 | ||||
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan | 100.00% | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 95.00% | ||||
Fully diluted | 85.50% | ||||
Hemen (on account of Primary Structuring Fee) | |||||
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 5,000,000 | ||||
Prior to dilution by the shares reserved under the Employee Incentive Plan | 5.00% | ||||
Fully diluted | 4.50% |
Chapter 11 Proceedings - Schedule of Reorganization Items (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fresh-Start Adjustment [Line Items] | |||||
Professional and advisory fees | $ (9) | ||||
New investor commitment fees | 0 | ||||
Loss on Newbuilding global settlement claim | 0 | ||||
Loss on other pre-petition allowed claims | 0 | ||||
Gain on liabilities subject to compromise | 0 | ||||
Fresh start valuation adjustments | 0 | ||||
Write-off of debt issuance costs | 0 | $ (66) | |||
Reversal of credit risk on derivatives | 0 | ||||
Interest income on surplus cash invested | 0 | ||||
Reorganization items, net | $ (9) | ||||
Predecessor | |||||
Fresh-Start Adjustment [Line Items] | |||||
Professional and advisory fees | $ (187) | $ (66) | $ 0 | ||
New investor commitment fees | 0 | (53) | 0 | ||
Loss on Newbuilding global settlement claim | 0 | (1,064) | 0 | ||
Loss on other pre-petition allowed claims | 0 | (3) | |||
Gain on liabilities subject to compromise | 2,958 | 0 | 0 | ||
Fresh start valuation adjustments | (6,142) | 0 | 0 | ||
Write-off of debt issuance costs | 0 | (66) | 0 | ||
Reversal of credit risk on derivatives | 0 | (89) | 0 | ||
Interest income on surplus cash invested | 6 | 4 | 0 | ||
Reorganization items, net | $ (3,365) | $ (1,337) | $ 0 |
Fresh Start Accounting (Details) - USD ($) |
6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2018 |
Apr. 17, 2018 |
Feb. 26, 2018 |
Dec. 31, 2017 |
Jun. 13, 2016 |
May 20, 2016 |
|
Fresh-Start Adjustment [Line Items] | |||||||||
Distributable value | $ 11,056,000,000 | $ 11,000,000,000 | |||||||
WACC | 11.00% | ||||||||
Debt, fair value | (7,301,000,000) | ||||||||
Debt, book value | $ 7,600,000,000 | ||||||||
Common stock, shares issued (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 | |||
Per share value (in dollars per share) | $ 35.01 | ||||||||
Deferred mobilization cost, current | $ 15,000,000 | $ 15,000,000 | |||||||
Write-off of unamortized debt issuance costs | 0 | 66,000,000 | |||||||
Short term portion of deferred mobilization revenues | 19,000,000 | 19,000,000 | $ 55,000,000 | ||||||
Unfavorable contracts to be amortized | $ 27,000,000 | $ 27,000,000 | $ 23,000,000 | ||||||
Minimum | Plan | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Distributable value | $ 10,200,000,000 | ||||||||
Maximum | Plan | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Distributable value | $ 11,800,000,000 | ||||||||
New Secured Notes | Secured Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt, fair value | $ 890 | ||||||||
Proceeds from issuance | 875,000,000 | ||||||||
Interest accrual | 5,000,000 | ||||||||
Write-off of unamortized debt issuance costs | $ 9 | ||||||||
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Common stock, shares issued (in shares) | 23,750,000 | ||||||||
Common stock, price per share (in dollars per share) | $ 8.42 | ||||||||
Recipients of New Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers) | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Common stock, shares issued (in shares) | 54,625,000 | ||||||||
Holders of General Unsecured Claims | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Common stock, shares issued (in shares) | 14,250,000 | ||||||||
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Common stock, shares issued (in shares) | 1,900,000 | ||||||||
Hemen (on account of Primary Structuring Fee) | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Common stock, shares issued (in shares) | 5,000,000 | ||||||||
Seadrill Capricorn Holdings LLC | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
WACC | 11.40% | ||||||||
Fresh Start Adjustments | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, increase (decrease), Amount due from related parties - current | $ 14,000,000 | ||||||||
Deferred mobilization cost, current | 9,000,000 | ||||||||
Favorable drilling contracts, current | 190,000,000 | ||||||||
Adjustments, increase (decrease), Amount due from related parties - non-current | 11,000,000 | ||||||||
Embedded derivative | 2,000,000 | ||||||||
Deferred mobilization, noncurrent | 2,000,000 | ||||||||
Favorable contracts, unamortized | 1,000,000 | ||||||||
Favorable drilling and management service, noncurrent | 98,000,000 | ||||||||
Short term portion of deferred mobilization revenues | 27,000,000 | ||||||||
Unfavorable contracts to be amortized | 59,000,000 | ||||||||
Deferred mobilization revenues | 7,000,000 | ||||||||
Unfavorable drilling contracts | 9,000,000 | ||||||||
Fresh Start Adjustments | Secured Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt discount | 188,000,000 | ||||||||
Fresh Start Adjustments | New Secured Notes | Secured Debt | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Write-off of unamortized debt issuance costs | 51,000,000 | ||||||||
Fresh Start Adjustments | Seabras Sapura | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, increase (decrease), Amount due from related parties - non-current | (3,000,000) | ||||||||
Fresh Start Adjustments | West Vela | Seadrill Partners LLC | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, increase (decrease), Amount due from related parties - current | 14,000,000 | ||||||||
Fresh Start Adjustments | West Vela and West Polaris | Seadrill Partners LLC | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Adjustments, increase (decrease), Amount due from related parties - non-current | $ 17,000,000 | ||||||||
Income Approach | |||||||||
Fresh-Start Adjustment [Line Items] | |||||||||
Debt, fair value | $ 7,300,000,000 |
Fresh Start Accounting - Schedule of Weighted Average Cost of Capital (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 11.00% |
Seadrill Capricorn Holdings LLC | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 11.40% |
Seadrill Operating LP | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 12.00% |
Seadrill Deepwater Drillship Ltd | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 12.00% |
Seabras Sapura Holding | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 14.30% |
Seabras Sapura Participacoes | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 13.70% |
SeaMex | |
Restructuring Cost and Reserve [Line Items] | |
WACC | 12.70% |
Fresh Start Accounting - Reconciliation of Distributable Value to Fair Value of Successor Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
Dec. 31, 2018 |
Jul. 02, 2018 |
Jul. 01, 2018 |
Apr. 17, 2018 |
Jun. 13, 2016 |
May 20, 2016 |
---|---|---|---|---|---|---|
Restructuring and Related Activities [Abstract] | ||||||
Distributable value | $ 11,056 | $ 11,000 | ||||
Less: non-controlling interest | (154) | $ 154 | ||||
Less: fair value of debt | (7,301) | |||||
Less: fair value of other non-operating liabilities | (108) | |||||
Add: fair value of tax attributes | 8 | |||||
Fair value of Successor common stock issued upon emergence | $ 3,501 | |||||
Common stock, shares issued (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 | |
Per share value (in dollars per share) | $ 35.01 |
Fresh Start Accounting - Reconciliation of Distributable Value to Estimated Reorganization Value (Details) - USD ($) $ in Millions |
Jul. 02, 2018 |
Apr. 17, 2018 |
---|---|---|
Reorganizations [Abstract] | ||
Distributable value | $ 11,056 | $ 11,000 |
Add: other working capital liabilities | 478 | |
Add: other non-current operating liabilities | 57 | |
Add: fair value of tax attributes | 8 | |
Add: redeemable non-controlling interest | 30 | |
Reorganization Value | $ 11,629 |
Fresh Start Accounting - Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Jul. 02, 2018 |
Jul. 01, 2018 |
---|---|---|
Current assets | ||
Cash and cash equivalents | $ 1,599 | |
Restricted cash | 578 | |
Marketable securities | 121 | |
Accounts receivable, net | 272 | |
Amount due from related parties - current | 195 | |
Other current assets | 428 | |
Total current assets | 3,193 | |
Newbuildings | 928 | |
Investment in associated companies | 0 | |
Drilling units | 6,797 | |
Deferred tax assets | 8 | |
Equipment | 29 | |
Amount due from related parties - non-current | 576 | |
Assets held for sale - non-current | 0 | |
Other non-current assets | 98 | |
Total assets | 11,629 | |
Current liabilities | ||
Debt due within one year | 57 | |
Trade accounts payable | 113 | |
Amounts due to related parties - current | 8 | |
Other current liabilities | 361 | |
Total current liabilities | 539 | |
Liabilities subject to compromise | 0 | |
Long-term debt | 7,044 | |
Long-term debt due to related parties | 200 | |
Deferred tax liabilities | 99 | |
Other non-current liabilities | 62 | |
Total non-current liabilities | 7,405 | |
Redeemable non-controlling interest | 30 | |
Equity | ||
Successor common shares | 10 | |
Successor contributed surplus | 3,491 | |
Total Shareholders' equity | 3,501 | |
Non-controlling interest | $ (154) | 154 |
Total equity | 3,655 | |
Total liabilities and equity | 11,629 | |
Reorganization Adjustments | ||
Adjustments, Assets [Abstract] | ||
Adjustments, increase (decrease), Cash and cash equivalents | 790 | |
Adjustments, increase (decrease), Restricted cash | 169 | |
Adjustments, increase (decrease), Total current assets | 959 | |
Adjustments, increase (decrease), Total assets | 959 | |
Adjustments, Liabilities and Equity [Abstract] | ||
Adjustments, increase (decrease), Trade accounts payable | 17 | |
Adjustments, increase (decrease), Amounts due to related parties - current | 4 | |
Adjustments, increase (decrease), Other current liabilities | 100 | |
Adjustments, increase (decrease), Total current liabilities | 121 | |
Adjustments, increase (decrease), Liabilities subject to compromise | (9,050) | |
Adjustments, increase (decrease), Long-term debt | 6,292 | |
Adjustments, increase (decrease), Other non-current liabilities | 3 | |
Adjustments, increase (decrease), Total non-current liabilities | 6,295 | |
Adjustments, increase (decrease), Common shares | 10 | |
Adjustments, increase (decrease), Contributed surplus | 2,860 | |
Adjustments, increase (decrease), Total Shareholders' equity | 3,700 | |
Adjustments, increase (decrease), Non-controlling interest | (107) | |
Adjustments, increase (decrease), Total equity | 3,593 | |
Adjustments, increase (decrease), Total liabilities and equity | 959 | |
Fresh Start Adjustments | ||
Adjustments, Assets [Abstract] | ||
Adjustments, increase (decrease), Amount due from related parties - current | 14 | |
Adjustments, increase (decrease), Other current assets | 181 | |
Adjustments, increase (decrease), Total current assets | 195 | |
Adjustments, increase (decrease), Investment in associated companies | (687) | |
Adjustments, increase (decrease), Newbuildings | (249) | |
Adjustments, increase (decrease), Drilling units | (5,734) | |
Adjustments, increase (decrease), Equipment | (6) | |
Adjustments, increase (decrease), Amount due from related parties - non-current | 11 | |
Adjustments, increase (decrease), Other non-current assets | 95 | |
Adjustments, increase (decrease), Total assets | (6,375) | |
Adjustments, Liabilities and Equity [Abstract] | ||
Adjustments, increase (decrease), Debt due within one year | (33) | |
Adjustments, increase (decrease), Other current liabilities | 32 | |
Adjustments, increase (decrease), Total current liabilities | (1) | |
Adjustments, increase (decrease), Liabilities subject to compromise | 0 | |
Adjustments, increase (decrease), Long-term debt | (104) | |
Adjustments, increase (decrease), Long-term debt due to related parties | (94) | |
Adjustments, increase (decrease), Deferred tax liabilities | (6) | |
Adjustments, increase (decrease), Other non-current liabilities | 2 | |
Adjustments, increase (decrease), Total non-current liabilities | (202) | |
Adjustments, increase (decrease), Redeemable non-controlling interest | 5 | |
Adjustments, increase (decrease), Contributed surplus | 631 | |
Adjustments, increase (decrease), Total Shareholders' equity | (6,374) | |
Adjustments, increase (decrease), Non-controlling interest | 197 | |
Adjustments, increase (decrease), Total equity | (6,177) | |
Adjustments, increase (decrease), Total liabilities and equity | (6,375) | |
Predecessor | ||
Current assets | ||
Cash and cash equivalents | 809 | |
Restricted cash | 409 | |
Marketable securities | 121 | |
Accounts receivable, net | 272 | |
Amount due from related parties - current | 181 | |
Other current assets | 247 | |
Total current assets | 2,039 | |
Investment in associated companies | 1,615 | |
Newbuildings | 249 | |
Drilling units | 12,531 | |
Deferred tax assets | 8 | |
Equipment | 35 | |
Amount due from related parties - non-current | 565 | |
Assets held for sale - non-current | 0 | |
Other non-current assets | 3 | |
Total assets | 17,045 | |
Current liabilities | ||
Debt due within one year | 90 | |
Trade accounts payable | 96 | |
Amounts due to related parties - current | 4 | |
Other current liabilities | 229 | |
Total current liabilities | 419 | |
Liabilities subject to compromise | 9,050 | |
Long-term debt | 856 | |
Long-term debt due to related parties | 294 | |
Deferred tax liabilities | 105 | |
Other non-current liabilities | 57 | |
Total non-current liabilities | 1,312 | |
Redeemable non-controlling interest | 25 | |
Equity | ||
Predecessor common shares | 1,008 | |
Predecessor additional paid-in capital | 3,316 | |
Predecessor contributed surplus | 1,956 | |
Predecessor accumulated other comprehensive income | 41 | |
Predecessor (loss)/retained earnings | (146) | |
Total Shareholders' equity | 6,175 | |
Non-controlling interest | 64 | |
Total equity | 6,239 | |
Total liabilities and equity | 17,045 | |
Adjustments, Liabilities and Equity [Abstract] | ||
Adjustments, increase (decrease), Common shares | (1,017) | |
Predecessor | Reorganization Adjustments | ||
Adjustments, Liabilities and Equity [Abstract] | ||
Adjustments, increase (decrease), Common shares | (1,008) | |
Adjustments, increase (decrease), Additional paid-in capital | (3,322) | |
Adjustments, increase (decrease), Additional paid-in capital | 6 | |
Adjustments, increase (decrease), Contributed surplus | (1,956) | |
Adjustments, increase (decrease), (Loss)/Retained earnings | 7,110 | |
Predecessor | Fresh Start Adjustments | ||
Adjustments, Liabilities and Equity [Abstract] | ||
Adjustments, increase (decrease), Accumulated other comprehensive income | (41) | |
Adjustments, increase (decrease), (Loss)/Retained earnings | $ (6,964) |
Fresh Start Accounting - Reorganization Adjustments, Cash and Cash Equivalents (Details) $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Proceeds from debt commitment (1) | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | $ 875 |
Proceeds from equity commitment | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | 200 |
Payment to newbuild counterparty members | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (18) |
Amendment consent fees to senior secured creditors | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (26) |
Funding of the escrow account for NSN collateral | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (227) |
Payment of closing fees for the debt commitment | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (9) |
Payment new commitment parties fee | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (1) |
Payment to the bank coordinating committee | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | (4) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Cash and cash equivalents | $ 790 |
Fresh Start Accounting - Reorganization Adjustments, Restricted Cash (Details) $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Funding of the escrow account per terms of NSN | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | $ 227 |
Payment of post confirmation accrued professional fees in connection with emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | (31) |
Payment of success fees incurred upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | (22) |
Distribution from the cash pool to general unsecured claims | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | (2) |
Payment of unsecured creditor committee advisor fees | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | (3) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Restricted cash | $ 169 |
Fresh Start Accounting - Reorganization Adjustments, Other Current Liabilities (Details) $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Success fees accrued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | $ 28 |
Undistributed cash pool balance for general unsecured claims on emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | 35 |
Cash payment made for post confirmation accrued professional fees in connection with emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | (31) |
Reinstatement of other current liabilities as part of liabilities subject to compromise | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | 64 |
Amendment fees on SFL loans accrued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | 4 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Other current liabilities | $ 100 |
Fresh Start Accounting - Gain on Liabilities Subject to Compromise (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Liabilities Subject to Compromise [Abstract] | |||
Senior undersecured or impaired external debt | $ 5,266 | ||
Unsecured bonds | 2,334 | ||
Newbuild claims | 1,064 | ||
Accrued interest payable | 49 | ||
Derivatives previously recorded at fair value | 249 | ||
Accounts payable and other liabilities | 84 | ||
Amount due to related party | 4 | ||
Liabilities subject to compromise | $ 0 | ||
Reorganization Adjustments | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | 2,958 | ||
Less: Distribution from cash pool to holders of general unsecured claims on emergence | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (2) | ||
Less: Undistributed cash pool balance for holders of general unsecured claims on emergence | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (35) | ||
Less: Payment to newbuild counterparty members | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (17) | ||
Less: Fair value of equity issued to holders of general unsecured claims | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (498) | ||
Less: Reinstatement of amount due to related party | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (4) | ||
Less: Reinstatement of trade accounts payable | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (84) | ||
Less: Reinstatement of senior undersecured or impaired external debt | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (5,266) | ||
Less: Recognition of adequate protection payments on senior undersecured or impaired external debt | |||
Liabilities Subject to Compromise [Abstract] | |||
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | (186) | ||
Predecessor | |||
Liabilities Subject to Compromise [Abstract] | |||
Liabilities subject to compromise | $ 9,050 | $ 9,191 |
Fresh Start Accounting - Reorganization Adjustments, Long-Term Debt (Details) $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Total reinstated senior secured credit facilities | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | $ 5,426 |
Reinstated Senior undersecured or impaired external debt | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | 5,266 |
Recognition of adequate protection payments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | 186 |
Lender consent fee | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | (26) |
Issuance of New Secured Notes | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | 880 |
Capitalized pre-issuance interest for New Secured Notes for 8% paid-in kind | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | 10 |
Debt issuance cost in related to the issuance of the New Secured Notes | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | (9) |
Discount on New Secured Notes for the pre-issuance interest paid upon emergence (4% cash interest of $5 million and 8% paid-in kind interest of $10 million) | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | (15) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), Long-term debt | $ 6,292 |
Fresh Start Accounting - Reorganization Adjustments, Change in Retained (loss)/earnings (Details) - Predecessor $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Gain on settlement of liabilities subject to compromise | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | $ 2,958 |
Cancellation of predecessor common stock, contributed surplus, and additional paid in capital | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | 6,286 |
Recognition of unamortized stock compensation expense upon cancellation of the Predecessor Company common stock, contributed surplus, and additional paid in capital | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | (6) |
Fair value of Successor Common Shares issued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | (2,176) |
Success fees incurred upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | (51) |
New Commitment Parties, bank coordinating committee, and unsecured creditor committee advisor fees | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | (8) |
Elimination of NADL and Sevan non-controlling interest | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | 107 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Adjustments, increase (decrease), (Loss)/Retained earnings | $ 7,110 |
Fresh Start Accounting - Estimated Fair Value of Debt at Emergence (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2018 |
Dec. 31, 2018 |
Dec. 31, 2018 |
Jul. 01, 2018 |
|
Fresh-Start Adjustment [Line Items] | ||||
Carrying value after reorganization adjustments | $ 7,600,000,000 | |||
Write-off of unamortized debt issuance costs | $ 0 | $ 66,000,000 | ||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | $ (24,000,000) | |||
Debt, fair value | (7,301,000,000) | |||
Secured Debt | New Secured Notes | ||||
Fresh-Start Adjustment [Line Items] | ||||
Carrying value after reorganization adjustments | 866 | |||
Write-off of unamortized debt issuance costs | 9 | |||
Write-off of discounts for pre-issuance accrued interest settled upon issuance of NSNs (4% cash interest of $5 million and 8% paid-in kind interest of $10 million) | 15 | |||
Debt, fair value | $ 890 | |||
Stated interest rate, cash portion (as a percent) | 4.00% | 4.00% | ||
$5 million applicable to 4% cash interest | $ 5,000,000 | |||
Stated interest rate, paid-in-kind portion (as a percent) | 8.00% | 8.00% | ||
$10 million applicable to 8% paid-in-kind interest | $ 10,000,000 | |||
Secured Debt | Ship Finance Loans | ||||
Fresh-Start Adjustment [Line Items] | ||||
Carrying value after reorganization adjustments | $ 736 | |||
Write-off of unamortized debt issuance costs | 1 | |||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | (33) | |||
Debt, fair value | 704 | |||
Floating rate debt obligations | Senior Credit Facilities | ||||
Fresh-Start Adjustment [Line Items] | ||||
Carrying value after reorganization adjustments | 5,636 | |||
Write-off of unamortized debt issuance costs | 26 | |||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | (155) | |||
Debt, fair value | 5,507 | |||
Total | ||||
Fresh-Start Adjustment [Line Items] | ||||
Carrying value after reorganization adjustments | 7,238 | |||
Write-off of unamortized debt issuance costs | 36 | |||
Write-off of discounts for pre-issuance accrued interest settled upon issuance of NSNs (4% cash interest of $5 million and 8% paid-in kind interest of $10 million) | 15 | |||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | (188) | |||
Debt, fair value | $ 7,101 |
Segment information - Results by Segment (Details) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
segment
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Segment Reporting [Abstract] | |||||
Number of operating segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 541 | ||||
Depreciation | 236 | ||||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (175) | ||||
Unallocated items: | |||||
Total financial items and other | (422) | ||||
(Loss)/income before income taxes | (597) | ||||
Book value on disposal | 6,659 | $ 6,659 | |||
Assets held for sale | 0 | 0 | |||
Investments in Associated companies | 800 | 800 | |||
Marketable securities | 57 | 57 | |||
Cash and restricted cash | 2,003 | 2,003 | |||
Other assets | 1,329 | 1,329 | |||
Total assets | 10,848 | 10,848 | |||
Capital expenditures - fixed assets | 98 | ||||
Floaters | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 322 | ||||
Depreciation | 190 | ||||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (161) | ||||
Unallocated items: | |||||
Book value on disposal | 5,508 | 5,508 | |||
Capital expenditures - fixed assets | 74 | ||||
Jack-up rigs | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 167 | ||||
Depreciation | 46 | ||||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (16) | ||||
Unallocated items: | |||||
Book value on disposal | 1,151 | $ 1,151 | |||
Capital expenditures - fixed assets | 24 | ||||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 52 | ||||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | $ 2 | ||||
Predecessor | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 712 | $ 2,088 | $ 3,169 | ||
Depreciation | 391 | 798 | 810 | ||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (613) | (728) | 1,026 | ||
Unallocated items: | |||||
Total financial items and other | (3,242) | (2,308) | (982) | ||
(Loss)/income before income taxes | (3,855) | (3,036) | 44 | ||
Book value on disposal | 13,464 | ||||
Assets held for sale | 126 | ||||
Investments in Associated companies | 1,473 | ||||
Marketable securities | 124 | ||||
Cash and restricted cash | 1,359 | ||||
Other assets | 1,436 | ||||
Total assets | 17,982 | ||||
Capital expenditures - fixed assets | 117 | 150 | 227 | ||
Predecessor | Floaters | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 482 | 1,387 | 2,212 | ||
Depreciation | 298 | 601 | 600 | ||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (446) | (622) | 759 | ||
Unallocated items: | |||||
Book value on disposal | 9,956 | ||||
Capital expenditures - fixed assets | 93 | 128 | 192 | ||
Predecessor | Jack-up rigs | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 193 | 617 | 865 | ||
Depreciation | 93 | 197 | 210 | ||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | (167) | (112) | 267 | ||
Unallocated items: | |||||
Book value on disposal | 3,508 | ||||
Capital expenditures - fixed assets | 24 | 22 | 35 | ||
Predecessor | Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 37 | 84 | 92 | ||
Operating Income - net income [Abstract] | |||||
Operating (loss)/income | $ 0 | $ 6 | $ 0 |
Segment Information - Geographic (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 541 | |||
Fixed assets - operating drilling units | 6,659 | |||
Norway | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 117 | |||
Fixed assets - operating drilling units | 1,326 | |||
Malaysia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Fixed assets - operating drilling units | 1,070 | |||
Nigeria | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 108 | |||
Spain | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Fixed assets - operating drilling units | 875 | |||
Brazil | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 91 | |||
Fixed assets - operating drilling units | 688 | |||
Saudi Arabia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 78 | |||
USA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 34 | |||
Fixed assets - operating drilling units | 658 | |||
Angola | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 29 | |||
Others | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 84 | |||
Fixed assets - operating drilling units | $ 2,042 | |||
Predecessor | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 712 | $ 2,088 | $ 3,169 | |
Fixed assets - operating drilling units | 13,216 | |||
Predecessor | Norway | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 82 | 219 | 475 | |
Fixed assets - operating drilling units | 2,258 | |||
Predecessor | Malaysia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Fixed assets - operating drilling units | 1,809 | |||
Predecessor | Nigeria | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 105 | 193 | 431 | |
Predecessor | Spain | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Fixed assets - operating drilling units | 2,016 | |||
Predecessor | Brazil | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 188 | 358 | 491 | |
Fixed assets - operating drilling units | 1,816 | |||
Predecessor | Saudi Arabia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 79 | 159 | 200 | |
Predecessor | USA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 30 | 291 | 370 | |
Fixed assets - operating drilling units | 1,266 | |||
Predecessor | Angola | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 100 | 482 | 419 | |
Predecessor | Others | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 128 | 386 | $ 783 | |
Fixed assets - operating drilling units | $ 4,051 |
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Total | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 27.00% | ||
Saudi Aramco | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 17.00% | ||
ConocoPhillips | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 14.00% | ||
Petrobras | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Equinor | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 12.00% | ||
LLOG | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 6.00% | ||
ExxonMobil | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 0.00% | ||
Predecessor | Total | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 20.00% | 25.00% | 18.00% |
Predecessor | Saudi Aramco | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 12.00% | 8.00% | 7.00% |
Predecessor | ConocoPhillips | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 9.00% | 6.00% | 5.00% |
Predecessor | Petrobras | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 27.00% | 19.00% | 17.00% |
Predecessor | Equinor | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 6.00% | 4.00% | 10.00% |
Predecessor | LLOG | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 5.00% | 15.00% | 13.00% |
Predecessor | ExxonMobil | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | 7.00% | 13.00% |
Revenue from Contracts with Customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Accounts receivables, net | $ 208 | |
Current contract assets (1) | 1 | |
Non-current contract assets (1) | 0 | |
Current contract liabilities (deferred revenues) (1) | (12) | |
Non-current contract liabilities (deferred revenues) (1) | $ (9) | |
Predecessor | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivables, net | $ 295 | |
Current contract assets (1) | 7 | |
Non-current contract assets (1) | 0 | |
Current contract liabilities (deferred revenues) (1) | (37) | |
Non-current contract liabilities (deferred revenues) (1) | $ (18) |
Revenue from Contracts with Customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Contract assets, beginning balance | $ 9 | |
Contract liabilities, beginning balance | 0 | |
Contract assets (liabilities), net, beginning balance | 9 | |
Decrease due to amortization of revenue that was included in the beginning contract liability balance | 0 | |
Increase due to cash received against contract assets recognized at July 2, 2018 (Successor) | (9) | |
Increase due to cash received, excluding amounts recognized as revenue | (21) | |
Decrease due to recognized during the period but contingent on future performance | 1 | |
Fresh start adjustment | 0 | |
Contract assets, ending balance | 1 | $ 9 |
Contract liabilities, ending balance | (21) | 0 |
Contract assets (liabilities), net, ending balance | (20) | 9 |
Predecessor | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets, beginning balance | 9 | 7 |
Contract liabilities, beginning balance | 0 | (55) |
Contract assets (liabilities), net, beginning balance | $ 9 | (48) |
Decrease due to amortization of revenue that was included in the beginning contract liability balance | 25 | |
Increase due to cash received, excluding amounts recognized as revenue | (9) | |
Decrease due to recognized during the period but contingent on future performance | 9 | |
Fresh start adjustment | 32 | |
Contract assets, ending balance | 9 | |
Contract liabilities, ending balance | 0 | |
Contract assets (liabilities), net, ending balance | $ 9 |
Revenue from Contracts with Customers - Deferred Contract Costs (Details) - Drilling expense - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
|
Capitalized Contract Cost [Line Items] | ||
Additional deferred contract costs | $ 22 | |
Amortization of deferred contract costs | (7) | |
Deferred contract costs, end of period | 15 | |
Predecessor | ||
Capitalized Contract Cost [Line Items] | ||
Deferred contract costs, beginning of period | $ 0 | $ 20 |
Additional deferred contract costs | 6 | |
Amortization of deferred contract costs | (15) | |
Fresh start adjustment (1) | (11) | |
Deferred contract costs, end of period | $ 0 |
Revenue from Contracts with Customers - Textual (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, current | $ 12 |
Deferred revenue, noncurrent | $ 9 |
Other revenues (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
||||
Variable Interest Entity [Line Items] | |||||||
Related party revenues | $ 46 | ||||||
Amortization of unfavorable contracts | 0 | ||||||
Early termination fees | 0 | ||||||
Revenues | 541 | ||||||
External management fees with third parties | |||||||
Variable Interest Entity [Line Items] | |||||||
Revenues | 0 | ||||||
Other revenues | |||||||
Variable Interest Entity [Line Items] | |||||||
Revenues | $ 46 | [1] | $ 72 | $ 162 | $ 253 | ||
West Hercules | |||||||
Variable Interest Entity [Line Items] | |||||||
Contract termination fee | 66 | ||||||
Deferred gain on contract termination | 8 | 58 | |||||
Predecessor | |||||||
Variable Interest Entity [Line Items] | |||||||
Related party revenues | 43 | 110 | 100 | ||||
Amortization of unfavorable contracts | 21 | 43 | 65 | ||||
Early termination fees | 8 | 8 | 69 | ||||
Revenues | 712 | 2,088 | 3,169 | ||||
Predecessor | External management fees with third parties | |||||||
Variable Interest Entity [Line Items] | |||||||
Revenues | 0 | 1 | 19 | ||||
Predecessor | Other revenues | |||||||
Variable Interest Entity [Line Items] | |||||||
Revenues | [1] | $ 72 | $ 162 | $ 253 | |||
|
Loss on disposals - Schedule of Disposals (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Book value on disposal | $ 6,659 | ||||||
Loss on disposal | [1] | 0 | |||||
Total, by property, plant, and equipment disposals | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 0 | ||||||
Book value on disposal | 0 | ||||||
Loss on disposal | $ 0 | ||||||
Predecessor | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Book value on disposal | $ 13,464 | ||||||
Loss on disposal | [1] | $ 0 | (245) | $ 0 | |||
Predecessor | Total, by property, plant, and equipment disposals | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 0 | 351 | 0 | ||||
Book value on disposal | 0 | 596 | 0 | ||||
Loss on disposal | $ 0 | (245) | $ 0 | ||||
Predecessor | Sale of West Triton | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 75 | ||||||
Book value on disposal | 109 | ||||||
Loss on disposal | (34) | ||||||
Predecessor | Sale of West Mischief | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 75 | ||||||
Book value on disposal | 146 | ||||||
Loss on disposal | (71) | ||||||
Predecessor | Sale of West Resolute | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 75 | ||||||
Book value on disposal | 136 | ||||||
Loss on disposal | (61) | ||||||
Predecessor | Disposal of Sevan Developer contract | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 0 | ||||||
Book value on disposal | 75 | ||||||
Loss on disposal | (75) | ||||||
Predecessor | Sale of West Rigel | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 126 | ||||||
Book value on disposal | 128 | ||||||
Loss on disposal | (2) | ||||||
Predecessor | Other | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net proceeds/recoverable amount | 0 | ||||||
Book value on disposal | 2 | ||||||
Loss on disposal | $ (2) | ||||||
|
Loss on disposals - Narrative (Details) $ in Millions |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2017
USD ($)
|
Jul. 31, 2017
USD ($)
|
Oct. 31, 2014
option
|
Dec. 31, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
May 09, 2018
USD ($)
|
Apr. 27, 2017
USD ($)
|
Oct. 30, 2015
USD ($)
|
||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Loss on disposals | [1] | $ 0.0 | |||||||||||
Sevan Drilling Limited | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Purchase obligation, minimum deferred delivery period | 12 months | ||||||||||||
Purchase obligations, number of subsequent options in agreement | option | 4 | ||||||||||||
Purchase obligation, exercisable interval period | 6 months | ||||||||||||
Sevan Drilling | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Purchase obligation, refund | $ 26.3 | ||||||||||||
Purchase obligation, refund (as percent) | 5.00% | ||||||||||||
Remaining refund amount | $ 26.3 | ||||||||||||
Purchase obligation | $ 526.0 | ||||||||||||
Exploration and production equipment | West Triton, West Mischief and West Resolute | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Fair value of consideration received | $ 225.0 | ||||||||||||
Loss on disposals | $ (166.0) | ||||||||||||
Exploration and production equipment | Disposal of Sevan Developer contract | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Loss on disposals | $ (75.0) | ||||||||||||
Disposal group, including discontinued operation, property, plant and equipment | 620.0 | ||||||||||||
Disposal group, including discontinued operation, construction payable | 526.0 | ||||||||||||
Disposal group, including discontinued operation, accrued liabilities | $ 19.0 | ||||||||||||
Exploration and production equipment | Jurong Shipyard | Sale of West Rigel | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Fair value of consideration received | $ 126.0 | ||||||||||||
Predecessor | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Loss on disposals | [1] | $ 0.0 | $ (245.0) | $ 0.0 | |||||||||
Predecessor | Disposal of Sevan Developer contract | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Fair value of consideration received | 0.0 | ||||||||||||
Loss on disposals | (75.0) | ||||||||||||
Predecessor | Sale of West Rigel | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Fair value of consideration received | 126.0 | ||||||||||||
Loss on disposals | $ (2.0) | ||||||||||||
|
Interest expense - Schedule of Interest expense (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | ||||
Cash and payment-in-kind interest on debt facilities | $ (237) | |||
Unwind of discount debt | (24) | |||
Loan fee amortization | 0 | |||
Capitalized interest | 0 | |||
Interest expense | $ (261) | |||
Predecessor | ||||
Debt Instrument [Line Items] | ||||
Cash and payment-in-kind interest on debt facilities | $ (37) | $ (286) | $ (408) | |
Unwind of discount debt | 0 | 0 | 0 | |
Loan fee amortization | (1) | (27) | (43) | |
Capitalized interest | 0 | 28 | 39 | |
Interest expense | $ (38) | $ (285) | $ (412) |
Interest expense - Cash and Payment-In-Kind Interest (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 01, 2018 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 02, 2018 |
|
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | $ (237) | ||||||
Total debt principal | 7,086 | $ 7,086 | |||||
Secured Debt | Secured credit facilities and unsecured bonds | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | (162) | (185) | |||||
Less: adequate protection payments | 0 | ||||||
Total debt principal | 5,662 | 5,662 | |||||
Secured Debt | New Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | $ (5) | (50) | |||||
Stated interest rate, cash portion (as a percent) | 4.00% | 4.00% | |||||
Stated interest rate, paid-in-kind portion (as a percent) | 8.00% | 8.00% | |||||
Total debt principal | 769 | 769 | |||||
Secured Debt | Credit facilities contained within variable interest entities | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | (25) | ||||||
Total debt principal | 655 | 655 | |||||
Secured Debt | Credit facilities contained within variable interest entities | Ship Finance subsidiaries | |||||||
Debt Instrument [Line Items] | |||||||
Total debt principal | $ 1,000 | $ 1,000 | |||||
Predecessor | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | $ (37) | $ (286) | $ (408) | ||||
Total debt principal | 8,701 | ||||||
Predecessor | Secured Debt | Secured credit facilities and unsecured bonds | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | (116) | (320) | (360) | ||||
Less: adequate protection payments | 104 | 81 | 0 | ||||
Total debt principal | 5,581 | ||||||
Predecessor | Secured Debt | New Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | 0 | 0 | 0 | ||||
Total debt principal | 0 | ||||||
Predecessor | Secured Debt | Credit facilities contained within variable interest entities | |||||||
Debt Instrument [Line Items] | |||||||
Cash and payment-in-kind interest on debt facilities | $ (25) | (47) | $ (48) | ||||
Total debt principal | $ 786 |
Impairment loss on marketable securities and investments in associated companies - Schedule of Impairments on Marketable Securities and Investments (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Sep. 30, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of marketable securities investments (reclassification from OCI) | $ 0 | |||||
Total impairment of investments | 0 | |||||
Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | $ 73 | |||||
SeaMex Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 76 | $ 36 | |||
Itaunas Drilling, Camburi Drilling, and Sahy Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | $ 13 | ||||
Seadrill Partners, Seamex Limited and Itaunas Drilling, Camburi Drilling, and Sahy Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | |||||
Common Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of marketable securities investments (reclassification from OCI) | 0 | |||||
Direct Ownership Interest | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 400 | 723 | |||
Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | $ 180 | $ 82 | |||
Member Interest and Incentive Distribution Rights | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | $ 0 | |||||
Predecessor | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of marketable securities investments (reclassification from OCI) | $ 0 | 0 | $ 153 | |||
Total impairment of investments | 0 | 841 | 895 | |||
Predecessor | SeaMex Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 36 | 76 | |||
Predecessor | Itaunas Drilling, Camburi Drilling, and Sahy Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 0 | 13 | |||
Predecessor | Seadrill Partners, Seamex Limited and Itaunas Drilling, Camburi Drilling, and Sahy Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 841 | 742 | |||
Predecessor | Common Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of marketable securities investments (reclassification from OCI) | 0 | 0 | 153 | |||
Predecessor | Direct Ownership Interest | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 723 | 400 | |||
Predecessor | Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | 0 | 82 | 180 | |||
Predecessor | Member Interest and Incentive Distribution Rights | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total impairment of investments | $ 0 | $ 0 | $ 73 |
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2016 |
Dec. 31, 2018 |
|
Schedule of Equity Method Investments [Line Items] | |||
Total impairment of investments | $ 0 | ||
Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Total impairment of investments | $ 73 | ||
Seadrill Partners LLC | Subordinated Units and Direct Ownership Interest | |||
Schedule of Equity Method Investments [Line Items] | |||
Remaining economic lives of underlying assets | 30 years | ||
Weighted average cost of capital (as percent) | 9.75% | ||
Seadrill Partners LLC | Subordinated Units | |||
Schedule of Equity Method Investments [Line Items] | |||
Total impairment of investments | 0 | 180 | $ 82 |
Seadrill Partners LLC | Direct Ownership Interest | |||
Schedule of Equity Method Investments [Line Items] | |||
Total impairment of investments | $ 0 | $ 400 | $ 723 |
Impairment loss on marketable securities and investments in associated companies - SeaMex Limited - Impairment of investment in Joint Venture (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2016 |
Dec. 31, 2018 |
|
Schedule of Equity Method Investments [Line Items] | |||
Total impairment of investments | $ 0 | ||
SeaMex | |||
Schedule of Equity Method Investments [Line Items] | |||
Remaining economic lives of underlying assets | 30 years | ||
Weighted average cost of capital (as percent) | 11.00% | 10.25% | |
Total impairment of investments | $ 0 | $ 76 | $ 36 |
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Common Units - Impairment of marketable securities (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2016 |
Sep. 30, 2016 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||
Total impairment of marketable securities investments (reclassification from OCI) | $ 0 | ||
Seadrill Partners LLC | Common Unit | |||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||
Increase (decrease) in price per unit (as percent) | 62.00% | ||
Total impairment of marketable securities investments (reclassification from OCI) | $ 0 | ||
Reclassification out of AOCI | Seadrill Partners LLC | |||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||
Total impairment of marketable securities investments (reclassification from OCI) | $ (153) |
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Member interest - Impairment of Cost method investments (Details) - USD ($) $ in Millions |
6 Months Ended | 9 Months Ended |
---|---|---|
Dec. 31, 2018 |
Sep. 30, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||
Total impairment of investments | $ 0 | |
Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Total impairment of investments | $ 73 |
- Itaunas Drilling, Camburi Drilling, and Sahy Drilling - Impairment of investment in Joint Venture (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Jul. 01, 2018 |
Dec. 31, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% |
Total impairment of investments | $ 0 | |||
Itaunas Drilling, Camburi Drilling, and Sahy Drilling | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage held by equity method investee (as percent) | 70.00% | |||
Ownership interest (as percent) | 30.00% | |||
Total impairment of investments | $ 0 | $ 13 |
Taxation - Components of Income Taxes (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current tax expense: | ||||
Bermuda | $ 0 | |||
Foreign | 30 | |||
Deferred tax expense: | ||||
Bermuda | 0 | |||
Foreign | (22) | |||
Total tax expense | $ 8 | |||
Effective tax rate | (1.30%) | |||
Predecessor | ||||
Current tax expense: | ||||
Bermuda | $ 0 | $ 0 | $ 0 | |
Foreign | 34 | 56 | 151 | |
Deferred tax expense: | ||||
Bermuda | 0 | 0 | 0 | |
Foreign | (4) | 10 | 48 | |
Total tax expense | $ 30 | $ 66 | $ 199 | |
Effective tax rate | (0.80%) | (2.20%) | 452.30% |
Taxation - Narrative (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 30, 2019 |
Dec. 31, 2015 |
||||
Related Party Transaction [Line Items] | ||||||||||
Effective tax rate (as percent) | (1.30%) | |||||||||
Impairment of long lived assets | $ 0 | |||||||||
Reorganization items, net | (9,000,000) | |||||||||
Total impairment of investments | 0 | |||||||||
Loss on derivative financial instruments | [1] | 31,000,000 | ||||||||
Loss on disposals | [1] | 0 | ||||||||
Statutory income tax rate (in hundredths) (as a percent) | 0.00% | 0.00% | ||||||||
Unremitted earnings of subsidiaries | 27,000,000 | $ 27,000,000 | $ 37,000,000 | |||||||
Net operating losses carried forward | 263,000,000 | 263,000,000 | ||||||||
Deferred tax assets not subject to expiration | 257,000,000 | 257,000,000 | 248,000,000 | |||||||
Deferred tax assets subject to expiration | 6,000,000 | 6,000,000 | 7,000,000 | |||||||
Deferred tax liabilities, intangibles | 34,000,000 | 34,000,000 | 0 | |||||||
Valuation allowance | 254,000,000 | 254,000,000 | ||||||||
Unrecognized tax benefits | 132,000,000 | $ 61,000,000 | 132,000,000 | |||||||
Accrued interest and penalties | 26,000,000 | 26,000,000 | 12,000,000 | |||||||
Unrecognized tax benefits, interest and penalties expensed during period | 11,000,000 | $ 3,000,000 | 10,000,000 | $ 2,000,000 | ||||||
Unrecognized tax benefits that would have a favorable impact on effective tax rate | 100,000,000 | 100,000,000 | ||||||||
Other Current Liabilities | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Unrecognized tax benefits | 1,000,000 | 1,000,000 | ||||||||
Other Noncurrent Liabilities | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Unrecognized tax benefits | 73,000,000 | 73,000,000 | ||||||||
Deferred Tax Asset Reduction | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Unrecognized tax benefits | 58,000,000 | 58,000,000 | ||||||||
NOL | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Valuation allowance | 242,000,000 | $ 242,000,000 | $ 216,000,000 | |||||||
Bermuda | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Statutory income tax rate (in hundredths) (as a percent) | 0.00% | |||||||||
Total, by property, plant, and equipment disposals | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Loss on disposals | $ 0 | |||||||||
Secretariat of the Federal Revenue Bureau of Brazil | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Income tax examination, estimate of possible loss | $ 161,000,000 | |||||||||
Nigeria | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Income tax examination, estimate of possible loss | $ 171,000,000 | |||||||||
Predecessor | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Effective tax rate (as percent) | (0.80%) | (2.20%) | 452.30% | |||||||
Impairment of long lived assets | $ 414,000,000 | $ 696,000,000 | $ 44,000,000 | |||||||
Reorganization items, net | (3,365,000,000) | (1,337,000,000) | 0 | |||||||
Total impairment of investments | 0 | 841,000,000 | 895,000,000 | |||||||
Loss on derivative financial instruments | [1] | 4,000,000 | (11,000,000) | 74,000,000 | ||||||
Loss on disposals | [1] | 0 | (245,000,000) | 0 | ||||||
Unremitted earnings of subsidiaries | 37,000,000 | |||||||||
Net operating losses carried forward | 255,000,000 | |||||||||
Valuation allowance | 230,000,000 | |||||||||
Unrecognized tax benefits | 61,000,000 | 55,000,000 | 44,000,000 | $ 9,000,000 | ||||||
Predecessor | Newbuildings | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Impairment | 696,000,000 | |||||||||
Predecessor | Total, by property, plant, and equipment disposals | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Loss on disposals | $ 0 | $ (245,000,000) | $ 0 | |||||||
Forecast | Secretariat of the Federal Revenue Bureau of Brazil | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Collateral posted on tax dispute | $ 70,000,000 | |||||||||
|
Taxation Taxation - Items Within the Statement of Operations (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
||||
Income Tax [Line Items] | |||||||
Loss on marketable securities | $ (64) | ||||||
(Loss)/gain on derivative financial instruments | [1] | (31) | |||||
Reorganization items, net | (9) | ||||||
Loss on impairment of investments | 0 | ||||||
Loss on disposals | [1] | $ 0 | |||||
Predecessor | |||||||
Income Tax [Line Items] | |||||||
Loss on marketable securities | $ (3) | $ 0 | $ 0 | ||||
(Loss)/gain on derivative financial instruments | [1] | (4) | 11 | (74) | |||
Reorganization items, net | (3,365) | (1,337) | 0 | ||||
Loss on impairment of investments | 0 | (841) | (895) | ||||
Loss on disposals | [1] | $ 0 | $ (245) | $ 0 | |||
|
Taxation - Income Tax Reconciliation (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax [Line Items] | ||||
Income taxes at statutory rate | $ 0 | |||
Effect of change on uncertain tax positions relating to prior year | 49 | |||
Effect of unremitted earnings of subsidiaries | (10) | |||
Effect of taxable income in various countries | (31) | |||
Total tax expense | $ 8 | |||
Predecessor | ||||
Income Tax [Line Items] | ||||
Income taxes at statutory rate | $ 0 | $ 0 | $ 0 | |
Effect of change on uncertain tax positions relating to prior year | 12 | (5) | 28 | |
Effect of unremitted earnings of subsidiaries | 0 | 3 | (4) | |
Effect of taxable income in various countries | 18 | 68 | 175 | |
Total tax expense | $ 30 | $ 66 | $ 199 |
Taxation - Deferred Income Taxes (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred Tax Assets [Abstract] | ||
Pensions and stock options | $ 4,000,000 | |
Provisions | 28,000,000 | |
Net operating losses carried forward | 263,000,000 | |
Other | 0 | |
Gross deferred tax assets | 295,000,000 | |
Valuation allowance | (254,000,000) | |
Deferred tax assets, net of valuation allowance | 41,000,000 | |
Deferred Tax Liability [Abstract] | ||
Property, plant and equipment | 49,000,000 | |
Unremitted Earnings of Subsidiaries | 27,000,000 | $ 37,000,000 |
Intangibles | 34,000,000 | 0 |
Gross deferred tax liabilities | 110,000,000 | |
Net deferred tax (liability)/asset | $ (69,000,000) | |
Predecessor | ||
Deferred Tax Assets [Abstract] | ||
Pensions and stock options | 4,000,000 | |
Provisions | 49,000,000 | |
Net operating losses carried forward | 255,000,000 | |
Other | 0 | |
Gross deferred tax assets | 308,000,000 | |
Valuation allowance | (230,000,000) | |
Deferred tax assets, net of valuation allowance | 78,000,000 | |
Deferred Tax Liability [Abstract] | ||
Property, plant and equipment | 138,000,000 | |
Unremitted Earnings of Subsidiaries | 37,000,000 | |
Gross deferred tax liabilities | 175,000,000 | |
Net deferred tax (liability)/asset | $ (97,000,000) |
Taxation - Changes to Uncertain Tax Positions, Excluding Interest and Penalties (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | ||||
Balance at the beginning of the period | $ 61 | |||
Increases as a result of positions taken in prior periods | 69 | |||
Increases as a result of positions taken during the current period | 18 | |||
Decreases as a result of positions taken in prior periods | (9) | |||
Decreases as a result of positions taken in the current period | 0 | |||
Decreases due to settlements | (7) | |||
Balance at the end of the period | 132 | $ 61 | ||
Predecessor | ||||
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | ||||
Balance at the beginning of the period | $ 61 | 55 | $ 44 | $ 9 |
Increases as a result of positions taken in prior periods | 7 | 23 | 35 | |
Increases as a result of positions taken during the current period | 1 | 0 | 2 | |
Decreases as a result of positions taken in prior periods | (2) | (9) | (2) | |
Decreases as a result of positions taken in the current period | 0 | 0 | 0 | |
Decreases due to settlements | 0 | (3) | 0 | |
Balance at the end of the period | $ 61 | $ 55 | $ 44 |
Taxation - Earliest Open Tax Year (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Angola | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2015 |
Nigeria | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2014 |
United States | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2015 |
Norway | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2015 |
Brazil | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2008 |
Loss per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jan. 01, 2018 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax [Line Items] | |||||
Net loss attributable to the parent | $ (602) | ||||
Less: Allocation to participating securities | 0 | ||||
Net loss available to stockholders | (602) | ||||
Effect of dilution | 0 | ||||
Diluted net loss available to stockholders | $ (602) | ||||
Basic earnings per share: | |||||
Weighted average number of common shares outstanding (in shares) | 100 | ||||
Diluted earnings per share: | |||||
Effect of dilution (in shares) | 0 | ||||
Weighted average number of common shares outstanding adjusted for the effects of dilution (in shares) | 100 | ||||
Basic loss per share (in dollars per share) | $ (6.02) | ||||
Diluted loss per share (in dollars per share) | $ (6.02) | ||||
Predecessor | |||||
Income Tax [Line Items] | |||||
Net loss attributable to the parent | $ (3,881) | $ (2,973) | $ (181) | ||
Less: Allocation to participating securities | 0 | 0 | 0 | ||
Net loss available to stockholders | (3,881) | (2,973) | (181) | ||
Effect of dilution | 0 | 0 | 0 | ||
Diluted net loss available to stockholders | $ (3,881) | $ (2,973) | $ (181) | ||
Basic earnings per share: | |||||
Weighted average number of common shares outstanding (in shares) | 504 | 505 | 501 | ||
Diluted earnings per share: | |||||
Effect of dilution (in shares) | 0 | 0 | 0 | ||
Weighted average number of common shares outstanding adjusted for the effects of dilution (in shares) | 504 | 505 | 501 | ||
Basic loss per share (in dollars per share) | $ (7.71) | $ (7.71) | $ (5.89) | $ (0.36) | |
Diluted loss per share (in dollars per share) | $ (7.71) | $ (7.71) | $ (5.89) | $ (0.36) |
Restricted cash (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 461 | $ 461 | |||
Initial proceeds from issuing the notes | 0 | 228 | |||
Deferred consideration payment | 55 | ||||
Shareholder loan repayment | 43 | ||||
Funding Escrow for NSN | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 328 | 328 | |||
Cash pledged as collateral | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 101 | 101 | |||
Other | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 32 | $ 32 | |||
Predecessor | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 104 | ||||
Initial proceeds from issuing the notes | $ 875 | 0 | $ 0 | ||
Predecessor | Funding Escrow for NSN | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 0 | ||||
Predecessor | Cash pledged as collateral | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 76 | ||||
Predecessor | Other | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 28 |
Marketable securities - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Apr. 30, 2017 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2018 |
May 01, 2017 |
|
Gain (Loss) on Investments [Line Items] | |||||||
Previously recognized fair value gains reclassified | $ (7) | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||
Gain on debt extinguishment | $ 0 | $ 19 | |||||
Investment in marketable security | 57 | ||||||
Archer | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Ownership interest (as percent) | 15.70% | ||||||
Investment in marketable security | $ 0 | $ 12 | |||||
Predecessor | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Adoption of accounting standard update | $ (31) | ||||||
Previously recognized fair value gains reclassified | 15 | $ 195 | |||||
Gain on debt extinguishment | $ 0 | 19 | 47 | ||||
Investment in marketable security | 124 | ||||||
Predecessor | Archer | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Gain on debt extinguishment | 19 | ||||||
Investment in marketable security | 28 | ||||||
Predecessor | Fair value gains | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Adoption of accounting standard update | $ (31) | ||||||
Previously recognized fair value gains reclassified | $ 14 | $ 168 | |||||
Archer | Financial Restructuring | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Carrying value of loan | $ 37 | $ 45 | |||||
Fair value | Archer | Financial Restructuring | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Carrying value of loan | $ 56 |
Marketable securities - Marketable Securities Held (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
Apr. 30, 2017 |
---|---|---|---|
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | $ 57 | ||
Seadrill Partners - Common units | |||
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | 45 | ||
Archer | |||
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | $ 12 | $ 0 | |
Predecessor | |||
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | $ 124 | ||
Predecessor | Seadrill Partners - Common units | |||
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | 96 | ||
Predecessor | Archer | |||
Gain (Loss) on Investments [Line Items] | |||
Total marketable securities | $ 28 |
Marketable securities - Gross Realized Gains and Losses Related to Marketable Securities (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ (64) | |||
Seadrill Partners - Common Units - unrealized (loss) / gain on marketable securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | (45) | |||
Archer - unrealized (loss)/gain on marketable securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ (19) | |||
Predecessor | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ (3) | $ 14 | $ 17 | |
Predecessor | Seadrill Partners - Common Units - unrealized (loss) / gain on marketable securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | (5) | (14) | 17 | |
Predecessor | Archer - unrealized (loss)/gain on marketable securities | ||||
Gain (Loss) on Investments [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ 2 | $ 28 | $ 0 |
Accounts receivable (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounts Receivable, Net, Current [Abstract] | ||||
Allowance for doubtful accounts receivables | $ 0 | $ 0 | $ 0 | |
Bad debt expense | $ 0 | $ 48,000,000 | $ 0 | $ 0 |
Other assets (Details) - USD ($) |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
May 11, 2018 |
Aug. 28, 2017 |
Apr. 30, 2013 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Favorable drilling and management service contracts to be amortized | $ 186,000,000 | ||||||
Taxes receivable | 50,000,000 | ||||||
Derivative asset - Interest rate cap (1) | 39,000,000 | $ 68,000,000 | |||||
Prepaid Expenses | 32,000,000 | ||||||
Deferred mobilization cost | 15,000,000 | ||||||
Reimbursable amounts due from customers | 10,000,000 | ||||||
Deferred Consideration (2) | 0 | ||||||
Income tax effects of intercompany sales or transfers of assets (3) | 0 | ||||||
Other assets | 26,000,000 | ||||||
Total other assets | 358,000,000 | ||||||
Monthly repayment amount of non-contingent deferred consideration | $ 5,000,000 | ||||||
Tender Rig Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Non-contingent deferred consideration | $ 145,000,000 | ||||||
Payments received from loans granted to related parties | $ 10,000,000 | ||||||
Proceeds from interest received | 25,000,000 | ||||||
LIBOR | Tender Rig Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loan receivable basis spread on variable rate (as percent) | 5.00% | ||||||
Predecessor | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Favorable drilling and management service contracts to be amortized | $ 0 | ||||||
Taxes receivable | 24,000,000 | ||||||
Derivative asset - Interest rate cap (1) | 0 | ||||||
Prepaid Expenses | 87,000,000 | ||||||
Deferred mobilization cost | 20,000,000 | ||||||
Reimbursable amounts due from customers | 15,000,000 | ||||||
Deferred Consideration (2) | 80,000,000 | ||||||
Income tax effects of intercompany sales or transfers of assets (3) | 84,000,000 | ||||||
Other assets | 28,000,000 | ||||||
Total other assets | 338,000,000 | ||||||
(Loss)/gain recognized relating to derivative financial instruments | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss/(gain) on derivative financial instruments | (31,000,000) | ||||||
(Loss)/gain recognized relating to derivative financial instruments | Predecessor | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss/(gain) on derivative financial instruments | $ (4,000,000) | 11,000,000 | (74,000,000) | ||||
Interest rate cap | (Loss)/gain recognized relating to derivative financial instruments | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss/(gain) on derivative financial instruments | $ (22,000,000) | ||||||
Interest rate cap | (Loss)/gain recognized relating to derivative financial instruments | Predecessor | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss/(gain) on derivative financial instruments | $ (6,000,000) | $ 0 | $ 0 |
- Balance Sheet Presentation (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Assets [Line Items] | ||
Other current assets | $ 322,000,000 | |
Other non-current assets | 36,000,000 | |
Total other assets | $ 358,000,000 | |
Predecessor | ||
Other Assets [Line Items] | ||
Other current assets | $ 257,000,000 | |
Other non-current assets | 81,000,000 | |
Total other assets | $ 338,000,000 |
Other assets - Favorable contracts (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization of favorable contracts | $ (58) | ||||
Favorable contracts | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 287 | $ 287 | $ 287 | ||
Accumulated Amortization | (101) | (101) | 0 | ||
Finite-lived Intangible Assets [Roll Forward] | |||||
Net carrying amount, beginning | $ 287 | 287 | |||
Amortization of favorable contracts | (101) | ||||
Net carrying amount, ending | $ 186 | 186 | 287 | ||
Predecessor | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Amortization of favorable contracts | 0 | 0 | $ 0 | ||
Predecessor | Favorable contracts | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 0 | 0 | |||
Accumulated Amortization | 0 | 0 | |||
Finite-lived Intangible Assets [Roll Forward] | |||||
Net carrying amount, beginning | $ 0 | $ 0 | 0 | ||
Amortization of favorable contracts | 0 | ||||
Net carrying amount, ending | $ 0 | $ 0 |
Other assets - Future amortization of favorable contracts (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Remaining amortization period | 4 years 3 months | |
Favorable contracts | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2019 | $ 153 | |
2020 | 2 | |
2021 | 2 | |
2022 | 2 | |
2023 and after | 27 | |
Total | $ 186 | $ 287 |
Investment in associated companies - Ownership Percentage (Details) |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Mar. 10, 2015 |
---|---|---|---|---|---|
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | |
Seabras Sapura (b) | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (as percent) | 50.00% | 50.00% | |||
SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% |
Investment in associated companies - Narrative (Details) $ in Millions |
6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
class_of_stock
class_of_membership_interest
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2017 |
Dec. 31, 2016 |
Mar. 10, 2015 |
|
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | |
Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percent | 100.00% | 100.00% | ||||
Seabras Sapura | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | ||||
Ownership percentage held by equity method investee (as percent) | 50.00% | 50.00% | ||||
SeaMex | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | ||
Third party ownership interest (as percent) | 50.00% | |||||
SeaMex | Fintech | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | |||||
Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 18.00% | 18.00% | ||||
Subordinated units | $ 17 | $ 17 | $ 37 | |||
Income (loss) from subordinated units | $ 20 | |||||
Direct Ownership Interest | Seadrill Operating LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 42.00% | 42.00% | ||||
Direct Ownership Interest | Seadrill Capricorn Holdings LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 49.00% | 49.00% | ||||
Number of classes of membership interest representing voting common stock | class_of_membership_interest | 1 | |||||
Direct Ownership Interest | SFL Deepwater Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 39.00% | 39.00% | ||||
Direct Ownership Interest | Seadrill Mobile Units (Nigeria) Ltd | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 49.00% | 49.00% | ||||
Number of classes of stock representing voting common stock | class_of_stock | 1 |
Investment in associated companies - Share in Results from Associated Companies (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ (90) | |||
Seadrill Partners LLC | Direct Ownership Interest | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (82) | |||
Seadrill Partners LLC | Subordinated Units | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (20) | |||
Seabras Sapura | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 24 | |||
SeaMex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (12) | |||
Archer | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ 0 | |||
Predecessor | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ 149 | $ 174 | $ 283 | |
Predecessor | Seadrill Partners LLC | Direct Ownership Interest | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 77 | 82 | 216 | |
Predecessor | Seadrill Partners LLC | Subordinated Units | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 22 | 22 | 44 | |
Predecessor | Seabras Sapura | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 46 | 80 | 62 | |
Predecessor | SeaMex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 4 | 0 | 20 | |
Predecessor | Archer | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ 0 | $ (10) | $ (59) |
Investment in associated companies - Statement of Operations (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 30, 2017 |
Mar. 10, 2015 |
|
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | ||
Share in results from associated companies (net of tax) | $ (90) | |||||
Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 426 | |||||
Net operating income | 100 | |||||
Net income | (127) | |||||
Seabras Sapura | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 232 | |||||
Net operating income | 124 | |||||
Net income | 88 | |||||
Net income/(loss) allocated to ownership interests | $ 44 | |||||
Ownership interest (as percent) | 50.00% | |||||
Share in results from associated companies (net of tax) | $ 24 | |||||
Amortization of basis differences | (20) | |||||
Total basis difference | (20) | |||||
SeaMex | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 118 | |||||
Net operating income | 40 | |||||
Net income | 4 | |||||
Net income/(loss) allocated to ownership interests | $ 2 | |||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | |||
Share in results from associated companies (net of tax) | $ (12) | |||||
Amortization of basis differences | (14) | |||||
Total basis difference | (14) | |||||
Archer | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 15.70% | |||||
Share in results from associated companies (net of tax) | $ 0 | |||||
Seabras Sapura Participacoes | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as percent) | 50.00% | 50.00% | ||||
Direct Ownership Interest | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Net income/(loss) allocated to ownership interests | $ (59) | |||||
Share in results from associated companies (net of tax) | (82) | |||||
Amortization of basis differences | (23) | |||||
Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Net income/(loss) allocated to ownership interests | $ (15) | |||||
Ownership interest (as percent) | 18.00% | |||||
Share in results from associated companies (net of tax) | $ (20) | |||||
Amortization of basis differences | $ (5) | |||||
Predecessor | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Share in results from associated companies (net of tax) | $ 149 | $ 174 | $ 283 | |||
Predecessor | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 612 | 1,128 | 1,600 | |||
Net operating income | 257 | 464 | 818 | |||
Net income | 201 | 235 | 546 | |||
Predecessor | Seabras Sapura | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 241 | 487 | 389 | |||
Net operating income | 125 | 244 | 201 | |||
Net income | 92 | $ 160 | 124 | |||
Ownership interest (as percent) | 50.00% | |||||
Share in results from associated companies (net of tax) | 46 | $ 80 | 62 | |||
Predecessor | SeaMex | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Operating revenues | 121 | 239 | 280 | |||
Net operating income | 40 | 80 | 119 | |||
Net income | 7 | $ 0 | 40 | |||
Ownership interest (as percent) | 50.00% | |||||
Share in results from associated companies (net of tax) | 4 | $ 0 | 20 | |||
Predecessor | Archer | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Share in results from associated companies (net of tax) | 0 | (10) | (59) | |||
Predecessor | Direct Ownership Interest | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Net income/(loss) allocated to ownership interests | 77 | 93 | 254 | |||
Share in results from associated companies (net of tax) | 77 | 82 | 216 | |||
Amortization of basis differences | (11) | (38) | ||||
Predecessor | Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Net income/(loss) allocated to ownership interests | 22 | 24 | 49 | |||
Share in results from associated companies (net of tax) | $ 22 | 22 | 44 | |||
Amortization of basis differences | $ (2) | $ (5) |
Investment in associated companies - Book Value (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 800 | |
Seadrill Partners LLC | Direct Ownership Interest | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 479 | |
Seadrill Partners LLC | Subordinated Units | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 17 | |
Seadrill Partners LLC | Member Interest and Incentive Distribution Rights | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 54 | |
Seabras Sapura | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 209 | |
SeaMex | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 41 | |
Predecessor | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 1,473 | |
Predecessor | Seadrill Partners LLC | Direct Ownership Interest | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 857 | |
Predecessor | Seadrill Partners LLC | Subordinated Units | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 97 | |
Predecessor | Seadrill Partners LLC | Member Interest and Incentive Distribution Rights | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 64 | |
Predecessor | Seabras Sapura | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 353 | |
Predecessor | SeaMex | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 102 |
Investment in associated companies - Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Jul. 01, 2018 |
Dec. 31, 2016 |
Mar. 10, 2015 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | |
Book value of Seadrill investment | $ 800 | ||||
Seadrill Partners LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 1,110 | ||||
Non-current assets | 5,076 | ||||
Current liabilities | (433) | ||||
Non-current liabilities | (3,039) | ||||
Net Assets | 2,714 | ||||
Seadrill share of book equity | 1,399 | ||||
Prior period impairments and other adjustments | 0 | ||||
Seadrill Partners LLC | Basis difference allocated to rigs | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | (1,019) | ||||
Seadrill Partners LLC | Basis difference allocated to contracts | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | 99 | ||||
Seadrill Partners LLC | Direct Ownership Interest | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | $ 479 | ||||
Seadrill Partners LLC | Subordinated Units | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest (as percent) | 18.00% | ||||
Book value of Seadrill investment | $ 17 | ||||
Seabras Sapura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 255 | ||||
Non-current assets | 1,567 | ||||
Current liabilities | (599) | ||||
Non-current liabilities | (637) | ||||
Net Assets | $ 586 | ||||
Ownership interest (as percent) | 50.00% | ||||
Seadrill share of book equity | $ 293 | ||||
Equity Method Investment, Loan | 125 | ||||
Total adjustments | (84) | ||||
Book value of Seadrill investment | 209 | ||||
Seabras Sapura | Basis difference allocated to rigs | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | (387) | ||||
Seabras Sapura | Basis difference allocated to contracts | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | 178 | ||||
SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 253 | ||||
Non-current assets | 977 | ||||
Current liabilities | (149) | ||||
Non-current liabilities | (627) | ||||
Net Assets | $ 454 | ||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | ||
Seadrill share of book equity | $ 227 | ||||
Total adjustments | (186) | ||||
Prior period impairments and other adjustments | 0 | ||||
Book value of Seadrill investment | 41 | ||||
SeaMex | Basis difference allocated to rigs | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | (357) | ||||
SeaMex | Basis difference allocated to contracts | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total adjustments | $ 171 | ||||
Predecessor | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | $ 1,473 | ||||
Predecessor | Seadrill Partners LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 1,214 | ||||
Non-current assets | 5,317 | ||||
Current liabilities | (546) | ||||
Non-current liabilities | (3,284) | ||||
Net Assets | 2,701 | ||||
Seadrill share of book equity | 1,398 | ||||
Prior period impairments and other adjustments | (541) | ||||
Predecessor | Seadrill Partners LLC | Direct Ownership Interest | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | 857 | ||||
Predecessor | Seadrill Partners LLC | Subordinated Units | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | 97 | ||||
Predecessor | Seabras Sapura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 467 | ||||
Non-current assets | 1,630 | ||||
Current liabilities | (673) | ||||
Non-current liabilities | (1,014) | ||||
Net Assets | $ 410 | ||||
Ownership interest (as percent) | 50.00% | ||||
Seadrill share of book equity | $ 205 | ||||
Equity Method Investment, Loan | 148 | ||||
Total adjustments | 148 | ||||
Book value of Seadrill investment | 353 | ||||
Predecessor | SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | 294 | ||||
Non-current assets | 1,036 | ||||
Current liabilities | (222) | ||||
Non-current liabilities | (666) | ||||
Net Assets | $ 442 | ||||
Ownership interest (as percent) | 50.00% | ||||
Seadrill share of book equity | $ 221 | ||||
Total adjustments | (119) | ||||
Prior period impairments and other adjustments | (119) | ||||
Book value of Seadrill investment | $ 102 |
Newbuildings (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cost | ||||
Closing balance | $ 6,659 | |||
Loss on impairment of long-lived assets | 0 | |||
West Dorado, West Draco, West Aquila and West Libra | ||||
Cost | ||||
Loss on impairment of long-lived assets | $ 696 | |||
Newbuildings | ||||
Cost | ||||
Opening balance | 0 | |||
Additions | 0 | |||
Fresh Start adjustments | $ (249) | |||
Closing balance | 0 | 0 | ||
Predecessor | ||||
Cost | ||||
Opening balance | 13,464 | |||
Closing balance | 13,464 | |||
Loss on impairment of long-lived assets | 414 | 696 | $ 44 | |
Predecessor | Newbuildings | ||||
Cost | ||||
Opening balance | $ 249 | 248 | 1,531 | |
Additions | 1 | 5 | ||
Capitalized interest and loan related costs | 28 | |||
Disposals | (620) | |||
Impairment | (696) | |||
Closing balance | $ 249 | $ 248 | $ 1,531 |
Drilling units (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Cost | ||||
Impairment | $ 0 | |||
Accumulated depreciation | ||||
Net book value | 6,659 | |||
Fresh Start Adjustments | ||||
Cost | ||||
Fresh Start adjustments, net | $ (5,734) | |||
Predecessor | ||||
Cost | ||||
Impairment | (414) | $ (696) | $ (44) | |
Accumulated depreciation | ||||
Net book value | 13,464 | |||
Drilling units | ||||
Cost | ||||
Opening balance | 6,797 | |||
Additions | 93 | |||
Closing balance | 6,890 | 6,797 | ||
Accumulated depreciation | ||||
Opening balance | 0 | |||
Depreciation | (231) | |||
Closing balance | (231) | 0 | ||
Net book value | 6,659 | 6,797 | ||
Drilling units | Fresh Start Adjustments | ||||
Cost | ||||
Fresh Start adjustments, gross | (10,241) | |||
Fresh Start adjustments, net | (5,734) | |||
Accumulated depreciation | ||||
Fresh Start adjustments | 4,507 | |||
Drilling units | Predecessor | ||||
Cost | ||||
Opening balance | 17,038 | 17,335 | 17,753 | |
Additions | 117 | 110 | ||
Disposals, gross | (528) | |||
Disposals, net | (391) | |||
Impairment | (414) | |||
Closing balance | 17,038 | 17,335 | 17,753 | |
Accumulated depreciation | ||||
Opening balance | $ (4,507) | (4,119) | (3,477) | |
Depreciation | (388) | (779) | ||
Disposals | 137 | |||
Closing balance | (4,507) | (4,119) | (3,477) | |
Net book value | $ 12,531 | $ 13,216 | $ 14,276 |
Drilling units - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Drilling units [Line Items] | |||||
Impairment of long-lived assets | $ 0 | ||||
WACC | 11.00% | ||||
Seadrill Capricorn Holdings LLC | |||||
Drilling units [Line Items] | |||||
WACC | 11.40% | ||||
Fresh Start Adjustments | |||||
Drilling units [Line Items] | |||||
Adjustments, increase (decrease), Drilling units | $ (5,734) | ||||
Predecessor | |||||
Drilling units [Line Items] | |||||
Impairment of long-lived assets | 414 | $ 696 | $ 44 | ||
Drilling units | Fresh Start Adjustments | |||||
Drilling units [Line Items] | |||||
Adjustments, increase (decrease), Drilling units | (5,734) | ||||
Drilling units | Predecessor | |||||
Drilling units [Line Items] | |||||
Impairment of long-lived assets | $ 414 |
Equipment (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accumulated depreciation | ||||
Net book value | $ 6,659 | |||
Predecessor | ||||
Accumulated depreciation | ||||
Net book value | $ 13,464 | |||
Equipment | ||||
Cost | ||||
Opening balance | 29 | |||
Additions | 5 | |||
Fresh Start adjustments, gross | $ (64) | |||
Closing balance | 34 | 29 | ||
Accumulated depreciation | ||||
Opening balance | 0 | |||
Depreciation | (5) | |||
Fresh Start adjustments | 58 | |||
Closing balance | (5) | 0 | ||
Net book value | 29 | 29 | ||
Equipment | Predecessor | ||||
Cost | ||||
Opening balance | 93 | 84 | 77 | |
Additions | 9 | 7 | ||
Closing balance | 93 | 84 | ||
Accumulated depreciation | ||||
Opening balance | $ (58) | (55) | (36) | |
Depreciation | (3) | (19) | ||
Closing balance | (58) | (55) | ||
Net book value | 35 | $ 29 | $ 41 | |
Fresh Start Adjustments | ||||
Cost | ||||
Fresh Start adjustments, net | (6) | |||
Fresh Start Adjustments | Equipment | ||||
Cost | ||||
Fresh Start adjustments, net | $ (6) |
Equipment - Narrative (Details) $ in Millions |
Jul. 01, 2018
USD ($)
|
---|---|
Fresh Start Adjustments | |
Property, Plant and Equipment [Line Items] | |
Adjustments, increase (decrease), Equipment | $ (6) |
Debt - Schedule of Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt principal | $ 7,086 | |
Less: debt discount and fees | (172) | |
Carrying value | 6,914 | |
Secured credit facilities | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 5,662 | |
New secured notes | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 769 | |
Credit facilities contained within variable interest entities | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 655 | |
Unsecured bonds | Unsecured bonds | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 0 | |
Predecessor | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 8,701 | |
Less: debt discount and fees | (2) | |
Carrying value | 8,699 | |
Predecessor | Secured credit facilities | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 5,581 | |
Predecessor | New secured notes | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 0 | |
Predecessor | Credit facilities contained within variable interest entities | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt principal | 786 | |
Predecessor | Unsecured bonds | Unsecured bonds | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 2,334 |
Debt - Outstanding Debt, Long-term and Debt Issuance Costs (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Principal outstanding | ||
Debt due within one year | $ 33 | |
Long-term debt | 6,881 | |
Debt held as subject to compromise | 0 | |
Carrying value | $ 6,914 | |
Predecessor | ||
Principal outstanding | ||
Debt due within one year | $ 509 | |
Long-term debt | 485 | |
Debt held as subject to compromise | 7,705 | |
Carrying value | $ 8,699 |
Debt - Narrative (Details) - USD ($) |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 14, 2018 |
Nov. 01, 2018 |
Jul. 02, 2018 |
Aug. 31, 2017 |
May 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2018 |
Oct. 10, 2018 |
Jul. 01, 2018 |
May 09, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | |||||||||||
Write-off of unamortized debt issuance costs | $ 0 | $ 66,000,000 | |||||||||
Interest expense on debt | 237,000,000 | ||||||||||
Mandatory redemption of New Secured Notes | 121,000,000 | ||||||||||
Total debt principal | $ 7,086,000,000 | $ 7,086,000,000 | |||||||||
Asia Offshore Drilling | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Noncontrolling interest ownership percentage (as percent) | 66.24% | 66.24% | |||||||||
Jurong Shipyard | Exploration and production equipment | Sale of West Rigel | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value of consideration received | $ 126,000,000 | ||||||||||
Secured Debt | Secured credit facilities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest expense on debt | $ 162,000,000 | $ 185,000,000 | |||||||||
Total debt principal | 5,662,000,000 | 5,662,000,000 | |||||||||
Minimum liquidity, initial period | 525,000,000 | 525,000,000 | |||||||||
Minimum liquidity, subsequent period | 400,000,000 | 400,000,000 | |||||||||
Secured Debt | $360 facility (Asia Offshore Drilling) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 360,000,000 | 360,000,000 | |||||||||
Increase in margin, percent | 1.00% | ||||||||||
Total debt principal | $ 210,000,000 | $ 210,000,000 | |||||||||
Secured Debt | $360 facility (Asia Offshore Drilling) | Asia Offshore Drilling | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Noncontrolling interest ownership percentage (as percent) | 67.00% | 67.00% | |||||||||
Secured Debt | $400 million facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||||||
Total debt principal | 135,000,000 | 135,000,000 | |||||||||
Secured Debt | $400 million facility | Shelf Drilling | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of lines of credit | $ 47,000,000 | ||||||||||
Secured Debt | $440 million facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 440,000,000 | 440,000,000 | |||||||||
Total debt principal | 64,000,000 | 64,000,000 | |||||||||
Secured Debt | $440 million facility | Seadrill Partners LLC | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of lines of credit | $ 109,000,000 | ||||||||||
Debt, face amount | $ 440,000,000 | ||||||||||
Secured Debt | Credit Facility $1,500 - 2014 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 1,500,000,000 | $ 1,500,000,000 | |||||||||
Debt instrument, interest rate (as percent) | 2.38% | 2.38% | |||||||||
Total debt principal | $ 1,125,000,000 | $ 1,125,000,000 | |||||||||
Secured Debt | $950 million facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 950,000,000 | $ 950,000,000 | |||||||||
Debt instrument, interest rate (as percent) | 2.12% | 2.12% | |||||||||
Debt instrument, guarantee fee | 1.30% | 1.30% | |||||||||
Total debt principal | $ 566,000,000 | $ 566,000,000 | |||||||||
Secured Debt | New secured notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Write-off of unamortized debt issuance costs | $ 9 | ||||||||||
Interest expense on debt | $ 5,000,000 | 50,000,000 | |||||||||
Debt instrument, interest rate (as percent) | 12.00% | ||||||||||
Debt, face amount | $ 880,000,000 | ||||||||||
Stated interest rate, cash portion (as a percent) | 4.00% | 4.00% | |||||||||
Stated interest rate, paid-in-kind portion (as a percent) | 8.00% | 8.00% | |||||||||
Compounded paid-in-kind interest | $ 10,000,000 | ||||||||||
Mandatory redemption of New Secured Notes | $ 100,000 | $ 121,000,000 | |||||||||
Total debt principal | $ 769,000,000 | $ 769,000,000 | |||||||||
Tender offer, aggregate repurchase amount | $ 56,000,000 |
Debt - Debt Maturity (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2019 | $ 33 |
2020 | 407 |
2021 | 570 |
2022 | 973 |
2023 | 1,748 |
2024 and thereafter | 3,355 |
Total debt principal | $ 7,086 |
Debt - Credit facilities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Debt Instrument [Line Items] | |
Total debt principal | $ 7,086,000,000 |
LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 2.81% |
Secured Debt | Secured credit facilities | |
Debt Instrument [Line Items] | |
Total debt principal | $ 5,662,000,000 |
Secured Debt | $400 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 400,000,000 |
Repayments before maturity | 51,000,000 |
Final Repayment | 84,000,000 |
Total debt principal | 135,000,000 |
Book value of collateral vessels | $ 157,000,000 |
Secured Debt | $400 million facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.50% |
Secured Debt | $2,000 million facility (NADL) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 2,000,000,000 |
Repayments before maturity | 268,000,000 |
Final Repayment | 640,000,000 |
Total debt principal | 908,000,000 |
Book value of collateral vessels | $ 794,000,000 |
Secured Debt | $2,000 million facility (NADL) | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.00% |
Secured Debt | $440 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 440,000,000 |
Repayments before maturity | 24,000,000 |
Final Repayment | 40,000,000 |
Total debt principal | 64,000,000 |
Book value of collateral vessels | $ 58,000,000 |
Secured Debt | $440 million facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 4.25% |
Secured Debt | $1,450 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,450,000,000 |
Repayments before maturity | 87,000,000 |
Final Repayment | 235,000,000 |
Total debt principal | 322,000,000 |
Book value of collateral vessels | $ 337,000,000 |
Secured Debt | $1,450 million facility | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 1.20% |
Secured Debt | $1,450 million facility | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 4.00% |
Secured Debt | $360 facility (Asia Offshore Drilling) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 360,000,000 |
Repayments before maturity | 78,000,000 |
Final Repayment | 132,000,000 |
Total debt principal | 210,000,000 |
Book value of collateral vessels | $ 201,000,000 |
Secured Debt | $360 facility (Asia Offshore Drilling) | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.75% |
Secured Debt | $300 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 300,000,000 |
Repayments before maturity | 48,000,000 |
Final Repayment | 96,000,000 |
Total debt principal | 144,000,000 |
Book value of collateral vessels | $ 111,000,000 |
Secured Debt | $300 million facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 4.00% |
Secured Debt | $1,750 million facility (Sevan Drilling) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,750,000,000 |
Repayments before maturity | 316,000,000 |
Final Repayment | 559,000,000 |
Total debt principal | 875,000,000 |
Book value of collateral vessels | $ 910,000,000 |
Secured Debt | $1,750 million facility (Sevan Drilling) | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 2.50% |
Secured Debt | $1,750 million facility (Sevan Drilling) | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 2.90% |
Secured Debt | $450 million Eminence facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 450,000,000 |
Repayments before maturity | 60,000,000 |
Final Repayment | 205,000,000 |
Total debt principal | 265,000,000 |
Book value of collateral vessels | $ 290,000,000 |
Secured Debt | $450 million Eminence facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.50% |
Secured Debt | Credit Facility $1,500 - 2014 | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,500,000,000 |
Repayments before maturity | 355,000,000 |
Final Repayment | 770,000,000 |
Total debt principal | 1,125,000,000 |
Book value of collateral vessels | $ 1,051,000,000 |
Secured Debt | Credit Facility $1,500 - 2014 | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 2.38% |
Secured Debt | Credit Facility $1,500 - 2014 | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.25% |
Secured Debt | $1,350 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,350,000,000 |
Repayments before maturity | 351,000,000 |
Final Repayment | 594,000,000 |
Total debt principal | 945,000,000 |
Book value of collateral vessels | $ 917,000,000 |
Secured Debt | $1,350 million facility | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.00% |
Secured Debt | $950 million facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 950,000,000 |
Repayments before maturity | 207,000,000 |
Final Repayment | 359,000,000 |
Total debt principal | 566,000,000 |
Book value of collateral vessels | $ 659,000,000 |
Secured Debt | $950 million facility | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 2.12% |
Secured Debt | $950 million facility | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.00% |
Secured Debt | $450 million facility (2015) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 450,000,000 |
Repayments before maturity | 63,000,000 |
Final Repayment | 40,000,000 |
Total debt principal | 103,000,000 |
Book value of collateral vessels | $ 186,000,000 |
Secured Debt | $450 million facility (2015) | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.85% |
Secured Debt | Credit facilities contained within variable interest entities | |
Debt Instrument [Line Items] | |
Total debt principal | $ 655,000,000 |
Secured Debt | $390 million facility (SFL Deepwater) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 390,000,000 |
Repayments before maturity | 60,000,000 |
Final Repayment | 144,000,000 |
Total debt principal | 204,000,000 |
Book value of collateral vessels | 286,000,000 |
Secured Debt | $375 million facility (SFL Hercules) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 375,000,000 |
Repayments before maturity | 61,000,000 |
Final Repayment | 149,000,000 |
Total debt principal | 210,000,000 |
Book value of collateral vessels | 343,000,000 |
Secured Debt | $475 million facility (SFL Linus) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | 475,000,000 |
Repayments before maturity | 62,000,000 |
Final Repayment | 179,000,000 |
Total debt principal | 241,000,000 |
Book value of collateral vessels | $ 194,000,000 |
Debt - Covenant Restrictions (Details) - Secured Debt - Secured credit facilities |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Net leverage ratio, twelve months ended March 31, 2022 | 4.5 |
Net leverage ratio, twelve months ended June 30, 2022 | 4.2 |
Net leverage ratio, twelve months ended September 30, 2022 | 3.9 |
Net leverage ratio, twelve months ended December 31, 2022 | 3.7 |
Net leverage ratio, twelve months ended March 31, 2023 | 3.4 |
Net leverage ratio, twelve months ended June 30, 2023 | 3.3 |
Net leverage ratio, twelve months ended September 30, 2023 | 3.1 |
Net leverage ratio, twelve months ended December 31, 2023 | 3.0 |
Net leverage ratio, twelve months ended March 31, 2024 | 2.8 |
Net leverage ratio, twelve months ended June 30, 2024 | 2.7 |
Net leverage ratio, twelve months ended September 30, 2024 | 2.4 |
Net leverage ratio, twelve months ended December 31, 2024 | 2.2 |
Debt service coverage ratio | 1 |
Debt service coverage ratio threshold | 0.8 |
Net leverage ratio margin increase threshold, twelve months ended March 31, 2021 | 7.3 |
Net leverage ratio margin increase threshold, twelve months ended June 30, 2021 | 6.6 |
Net leverage ratio margin increase threshold, twelve months ended September 30, 2021 | 6.2 |
Net leverage ratio margin increase threshold, twelve months ended December 31, 2021 | 5.8 |
Other liabilities (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 107,000,000 | $ 103,000,000 |
Taxes Payable | 42,000,000 | 70,000,000 |
Accrued interest expense (1) | 61,000,000 | 3,000,000 |
Employee withheld taxes, social security and vacation payments | 40,000,000 | 15,000,000 |
Unfavorable contracts to be amortized | 27,000,000 | 23,000,000 |
Deferred mobilization revenue | 19,000,000 | 55,000,000 |
Other liabilities | 135,000,000 | 66,000,000 |
Total Other Liabilities | $ 431,000,000 | $ 335,000,000 |
Other liabilities - Balance sheet presentation (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities [Line Items] | ||
Other current liabilities | $ 310,000,000 | |
Other non-current liabilities | 121,000,000 | |
Total Other Liabilities | $ 431,000,000 | $ 335,000,000 |
Predecessor | ||
Other Liabilities [Line Items] | ||
Other current liabilities | 268,000,000 | |
Other non-current liabilities | 67,000,000 | |
Total Other Liabilities | $ 335,000,000 |
Other liabilities - Unfavorable contracts (Details) - Unfavorable contracts - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other Liabilities [Line Items] | |||
Gross carrying amount | $ (66) | $ (66) | |
Accumulated amortization | 39 | 0 | |
Finite-lived Intangible Liabilities [Roll Forward] | |||
Net carrying amount, beginning balance | (66) | ||
Amortization of unfavorable contracts | 39 | ||
Net carrying amount, ending balance | (27) | (66) | |
Predecessor | |||
Other Liabilities [Line Items] | |||
Gross carrying amount | (444) | $ (444) | |
Accumulated amortization | 421 | $ 378 | |
Finite-lived Intangible Liabilities [Roll Forward] | |||
Net carrying amount, beginning balance | $ (23) | (66) | |
Amortization of unfavorable contracts | 43 | ||
Net carrying amount, ending balance | $ (23) |
Other liabilities - Future amortization of unfavorable contracts (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Other Liabilities [Line Items] | ||
Finite-Lived Intangible Liabilities, Remaining Amortization Period | 2 years 11 months | |
Unfavorable contracts | ||
Other Liabilities [Line Items] | ||
2019 | $ (19) | |
2020 | (1) | |
2021 | (1) | |
2022 | (1) | |
2023 and after | (5) | |
Total | $ (27) | $ (66) |
Common shares (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2018 |
Jul. 01, 2018 |
Sep. 05, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2018 |
Jun. 30, 2016 |
Jun. 13, 2016 |
May 31, 2016 |
May 20, 2016 |
Dec. 31, 2015 |
May 10, 2005 |
|
Class of Stock [Line Items] | ||||||||||||
Common stock, shares issued (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 | |||||||
Common stock, value | $ 10 | $ 10 | $ 10 | |||||||||
Share for debt exchange (in shares) | 15,684,340 | |||||||||||
Share for debt exchange | $ 1,080 | $ 3,501 | ||||||||||
Repurchase of shares (in shares) | (4,000,000) | |||||||||||
Common shares, authorized | $ 11 | |||||||||||
Common shares, shares authorized (in shares) | 111,111,111 | 111,111,111.000000 | ||||||||||
Common shares, par value (in dollars per share) | $ 0.1 | $ 2.00 | $ 2.00 | |||||||||
Number of shares authorized (in shares) | 11,111,111 | |||||||||||
Option agreement, strike price (in NOK per share) | $ 20.30 | |||||||||||
Predecessor | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, shares issued (in shares) | 508,763,020 | 508,763,020 | 508,763,020 | 493,078,680 | 6,000 | |||||||
Common stock, value | $ 1,017 | $ 1,017 | $ 1,017 | $ 986 | ||||||||
Treasury shares (in shares) | (4,244,080) | (4,244,080) | (4,318,740) | (318,740) | ||||||||
Treasury shares, value | $ (9) | $ (9) | $ (9) | $ (1) | ||||||||
Share for debt exchange (in shares) | 15,684,340 | |||||||||||
Share for debt exchange | $ 31 | |||||||||||
Repurchase of shares (in shares) | (4,000,000) | |||||||||||
Repurchase of shares | $ (8) | |||||||||||
Cancellation of shares (in shares) | 74,660 | |||||||||||
Cancellation of Predecessor Company common stock, common stock (in shares) | (508,763,020) | |||||||||||
Cancellation of Predecessor Company common stock, common stock | $ (1,017) | |||||||||||
Cancellation of Predecessor Company common stock, treasury shares (in shares) | 4,244,080 | |||||||||||
Cancellation of Predecessor Company common stock, treasury shares | $ 9 | |||||||||||
Common shares, shares authorized (in shares) | 800,000,000 | |||||||||||
Common shares, par value (in dollars per share) | $ 2.00 | $ 2 |
Non-controlling interest - Changes in Non-controlling Interest (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jul. 01, 2018 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | $ 154 | ||||
Net income attributable to non-controlling interest | (2) | $ (160) | |||
Redeemable non-controlling interest | (1) | (150) | |||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | $ (107) | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | 197 | ||||
Balance, end of period | 154 | 152 | 154 | ||
Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 64 | 399 | $ 542 | $ 615 | |
Changes during period | (25) | (14) | (99) | ||
Net income attributable to non-controlling interest | (6) | (129) | 26 | ||
Redeemable non-controlling interest | 2 | 0 | 0 | ||
Balance, end of period | 64 | 64 | 399 | 542 | |
North Atlantic Drilling Ltd | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 0 | ||||
Net income attributable to non-controlling interest | 0 | (160) | |||
Redeemable non-controlling interest | 0 | ||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | 109 | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | 0 | ||||
Balance, end of period | 0 | 0 | 0 | ||
North Atlantic Drilling Ltd | Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | (109) | 76 | 165 | 179 | |
Changes during period | (25) | 0 | 7 | ||
Net income attributable to non-controlling interest | (89) | (21) | |||
Balance, end of period | (109) | (109) | 76 | 165 | |
Sevan Drilling Limited | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 0 | ||||
Net income attributable to non-controlling interest | 0 | (10) | |||
Redeemable non-controlling interest | 0 | ||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | (216) | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | 0 | ||||
Balance, end of period | 0 | 0 | 0 | ||
Sevan Drilling Limited | Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 216 | 226 | 291 | 282 | |
Changes during period | 0 | 0 | 0 | ||
Net income attributable to non-controlling interest | (65) | 9 | |||
Balance, end of period | 216 | 216 | 226 | 291 | |
Asia Offshore Drilling Ltd | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 0 | ||||
Net income attributable to non-controlling interest | 0 | 1 | |||
Redeemable non-controlling interest | (150) | ||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | 0 | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | 0 | ||||
Balance, end of period | 0 | 0 | 0 | ||
Asia Offshore Drilling Ltd | Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 0 | 149 | 149 | 140 | |
Changes during period | 0 | 0 | 0 | ||
Net income attributable to non-controlling interest | 0 | 9 | |||
Balance, end of period | 0 | 0 | 149 | 149 | |
Ship Finance International Ltd VIEs | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 147 | ||||
Net income attributable to non-controlling interest | (2) | 7 | |||
Redeemable non-controlling interest | 0 | ||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | 0 | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | 199 | ||||
Balance, end of period | 147 | 145 | 147 | ||
Ship Finance International Ltd VIEs | Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | (52) | (59) | (69) | 14 | |
Changes during period | 0 | (14) | (112) | ||
Net income attributable to non-controlling interest | 24 | 29 | |||
Balance, end of period | (52) | (52) | (59) | (69) | |
Seadrill Nigeria Operations Limited | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | 7 | ||||
Net income attributable to non-controlling interest | 0 | 2 | |||
Redeemable non-controlling interest | 0 | ||||
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited | 0 | ||||
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited | (2) | ||||
Balance, end of period | 7 | 7 | 7 | ||
Seadrill Nigeria Operations Limited | Predecessor | |||||
Changes in non-controlling interest [Roll Forward] | |||||
Balance, beginning of period | $ 9 | 7 | 6 | 0 | |
Changes during period | 0 | 0 | 6 | ||
Net income attributable to non-controlling interest | 1 | 0 | |||
Balance, end of period | $ 9 | $ 9 | $ 7 | $ 6 |
Non-controlling interest - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 05, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 01, 2018 |
|
Noncontrolling Interest [Line Items] | |||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | |
Seadrill Mobile Units (Nigeria) Ltd | |||||
Noncontrolling Interest [Line Items] | |||||
Ownership interest (as percent) | 51.00% | ||||
Seadrill Partners LLC | |||||
Noncontrolling Interest [Line Items] | |||||
Notional amount of investments acquired | $ 6.0 | ||||
North Atlantic Drilling | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest ownership percentage (as percent) | 70.36% | ||||
Sevan Drilling Limited | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest ownership percentage (as percent) | 50.11% | ||||
Asia Offshore Drilling Ltd | |||||
Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest ownership percentage (as percent) | 66.24% | ||||
Ship Finance International Ltd VIEs | |||||
Noncontrolling Interest [Line Items] | |||||
Proceeds from dividends received | $ 14.0 | $ 113.0 | |||
Seadrill UK Ltd | Seadrill Mobile Units (Nigeria) Ltd | |||||
Noncontrolling Interest [Line Items] | |||||
Interest acquired (as percent) | 10.00% | ||||
Ownership interest (as percent) | 49.00% | ||||
Notional amount of investments acquired | $ 6.0 | ||||
HHL | Seadrill Mobile Units (Nigeria) Ltd | |||||
Noncontrolling Interest [Line Items] | |||||
Notional amount of investments acquired | $ 6.0 | ||||
Business acquisition, percentage of voting interests acquired | 2.00% | ||||
Investments, consideration paid | $ 0.3 |
Redeemable non-controlling interest - Schedule of Changes in Redeemable Non-controlling Interest (Details) - Asia Offshore Drilling Ltd - Redeemable non-controlling interest - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 30 | |
Net income (loss) attributable to redeemable non-controlling interest | (1) | |
Fair value adjustment | 9 | |
Ending balance | 38 | $ 30 |
Predecessor | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 30 | 0 |
Reclassification from non-controlling interest | 150 | |
Fair value adjustment on initial recognition | (127) | |
Net income (loss) attributable to redeemable non-controlling interest | 2 | |
Fresh start fair value adjustment | 5 | |
Ending balance | $ 30 |
Accumulated other comprehensive income/(loss) (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2018 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Other comprehensive income before reclassifications | $ (7,000,000) | |||||
Ending balance | 3,035,000,000 | $ 3,035,000,000 | ||||
Other comprehensive income taxes | $ 0 | |||||
Actuarial loss related to pension, tax effect | 0 | $ 1,000,000 | $ 1,000,000 | |||
Tax rate in Norway (as percent) | 23.00% | 24.00% | ||||
Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 2,981,000,000 | 6,959,000,000 | $ 6,959,000,000 | $ 10,063,000,000 | $ 10,068,000,000 | |
Other comprehensive income before reclassifications | 15,000,000 | 195,000,000 | ||||
Amounts reclassified from accumulated other comprehensive income | (10,000,000) | |||||
Adoption of accounting standard update | $ (31,000,000) | |||||
Ending balance | 2,981,000,000 | 6,959,000,000 | 10,063,000,000 | |||
Unrealized gain on marketable securities | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Ending balance | 0 | 0 | 0 | |||
Unrealized gain on marketable securities | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 31,000,000 | 31,000,000 | 17,000,000 | (151,000,000) | ||
Other comprehensive income before reclassifications | 14,000,000 | 168,000,000 | ||||
Adoption of accounting standard update | (31,000,000) | |||||
Beginning balance, adjusted | 0 | |||||
Ending balance | 31,000,000 | 17,000,000 | ||||
Unrealized gain on foreign exchange | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Reset accumulated other comprehensive (loss)/income | (36,000,000) | |||||
Ending balance | 0 | 0 | 0 | |||
Unrealized gain on foreign exchange | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 36,000,000 | 36,000,000 | 36,000,000 | 36,000,000 | ||
Beginning balance, adjusted | 36,000,000 | |||||
Ending balance | 36,000,000 | 36,000,000 | ||||
Actuarial gain/(loss) relating to pension | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Other comprehensive income before reclassifications | 1,000,000 | |||||
Reset accumulated other comprehensive (loss)/income | 26,000,000 | |||||
Ending balance | 1,000,000 | 0 | 1,000,000 | |||
Actuarial gain/(loss) relating to pension | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | (26,000,000) | (26,000,000) | (23,000,000) | (38,000,000) | ||
Other comprehensive income before reclassifications | (3,000,000) | 15,000,000 | ||||
Beginning balance, adjusted | (26,000,000) | |||||
Ending balance | (26,000,000) | (23,000,000) | ||||
Share in unrealized gains from associated companies | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Other comprehensive income before reclassifications | (5,000,000) | |||||
Reset accumulated other comprehensive (loss)/income | (15,000,000) | |||||
Ending balance | (5,000,000) | 0 | (5,000,000) | |||
Share in unrealized gains from associated companies | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 15,000,000 | 15,000,000 | 23,000,000 | 11,000,000 | ||
Other comprehensive income before reclassifications | 2,000,000 | 12,000,000 | ||||
Amounts reclassified from accumulated other comprehensive income | (10,000,000) | |||||
Beginning balance, adjusted | 15,000,000 | |||||
Ending balance | 15,000,000 | 23,000,000 | ||||
Change in unrealized gain on interest rate swaps in VIEs | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Reset accumulated other comprehensive (loss)/income | (2,000,000) | |||||
Ending balance | 0 | 0 | 0 | |||
Change in unrealized gain on interest rate swaps in VIEs | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 2,000,000 | 2,000,000 | 0 | 0 | ||
Other comprehensive income before reclassifications | 2,000,000 | |||||
Beginning balance, adjusted | 2,000,000 | |||||
Ending balance | 2,000,000 | 0 | ||||
Change in debt component on Archer facility | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Other comprehensive income before reclassifications | (3,000,000) | |||||
Ending balance | (3,000,000) | 0 | (3,000,000) | |||
Change in debt component on Archer facility | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | 0 | 0 | 0 | ||
Beginning balance, adjusted | 0 | |||||
Ending balance | 0 | 0 | ||||
Accumulated other comprehensive income/(loss) | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Reset accumulated other comprehensive (loss)/income | (27,000,000) | |||||
Ending balance | (7,000,000) | 0 | (7,000,000) | |||
Accumulated other comprehensive income/(loss) | Predecessor | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ 27,000,000 | 58,000,000 | $ 58,000,000 | 53,000,000 | (142,000,000) | |
Beginning balance, adjusted | $ 27,000,000 | |||||
Ending balance | $ 27,000,000 | $ 58,000,000 | $ 53,000,000 |
Share based compensation (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Sep. 04, 2018 |
Aug. 16, 2018 |
Jul. 02, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized (in shares) | 11,111,111 | |||||||
Share-based compensation expense | $ 0 | |||||||
Compensation cost for non-vested awards not yet recognized | $ 9 | $ 9 | ||||||
Weighted average vesting period | 2 years 9 months | |||||||
Employee incentive plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized (in shares) | 11,111,111.000000 | |||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Weighted average vesting period | 3 years | |||||||
Restricted Stock Units | Employee incentive plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized (in shares) | 500,000.0 | |||||||
Predecessor | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense for Predecessor share options and Restricted Stock Unit plans | $ 9 | $ 7 | $ 7 |
Pension benefits - Narrative (Details) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | |||||
Accumulated benefit obligation | $ 33 | $ 33 | $ 33 | ||
Total company contributions | $ 9 | $ 10 | $ 17 | $ 26 | |
Onshore Employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Retirement pension as a percent of salary (as percent) | 66.00% | 66.00% | |||
Retirement age | 67 years | ||||
Retirement pension cap (as percent) | 66.00% | 66.00% | |||
Multiple of base | 12 | 12 | |||
Retirement age to receive pre-retirement pension | 62 years |
Pension benefits - Consolidated Balance Sheet Position (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued pension liabilities - Non-current liabilities | $ 4 | |
Less: Deferred tax (Asset) | (1) | |
Shareholders' equity | $ 3 | |
Predecessor | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued pension liabilities - Non-current liabilities | $ 6 | |
Less: Deferred tax (Asset) | (2) | |
Shareholders' equity | $ 4 |
Pension benefits - Annual Pension Cost (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2 | |||
Interest cost | 1 | |||
Gross pension cost for the year | 3 | |||
Expected return on plan assets | (1) | |||
Net pension cost for the year | 2 | |||
Social security cost | 0 | |||
Amortization of actuarial gains/losses | 0 | |||
Impact of settlement/curtailment funded status | 0 | |||
Total net pension cost | $ 2 | |||
Predecessor | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 2 | $ 7 | |
Interest cost | 0 | 2 | 3 | |
Gross pension cost for the year | 1 | 4 | 10 | |
Expected return on plan assets | 0 | (1) | (4) | |
Net pension cost for the year | 1 | 3 | 6 | |
Social security cost | 0 | 0 | 1 | |
Amortization of actuarial gains/losses | 0 | 0 | 1 | |
Impact of settlement/curtailment funded status | 0 | (1) | (1) | |
Total net pension cost | $ 1 | $ 2 | $ 7 |
Pension benefits - Funded Status of the Defined Benefit Plan (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||||
Projected benefit obligations at end of period | $ 37 | $ 36 | ||
Plan assets at market value | (33) | (33) | ||
Accrued pension liability exclusive social security | 4 | |||
Social security related to pension obligations | 0 | |||
Accrued pension liabilities | $ 4 | |||
Predecessor | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Projected benefit obligations at end of period | 36 | $ 38 | $ 60 | |
Plan assets at market value | $ (33) | (33) | $ (58) | |
Accrued pension liability exclusive social security | 5 | |||
Social security related to pension obligations | 1 | |||
Accrued pension liabilities | $ 6 |
Pension benefits - Change in Projected Benefit Obligations (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligations at beginning of period | $ 36 | |||
Interest cost | 1 | |||
Service cost | 1 | |||
Benefits paid | (1) | |||
Change in unrecognized actuarial gain | 2 | |||
Settlement | 0 | |||
Foreign currency translations | (2) | |||
Projected benefit obligations at end of period | 37 | $ 36 | ||
Predecessor | ||||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||||
Projected benefit obligations at beginning of period | $ 36 | 38 | $ 60 | |
Interest cost | 0 | 2 | $ 3 | |
Service cost | 1 | 2 | ||
Benefits paid | (1) | (2) | ||
Change in unrecognized actuarial gain | (2) | (3) | ||
Settlement | 0 | (24) | ||
Foreign currency translations | 0 | 3 | ||
Projected benefit obligations at end of period | $ 36 | $ 38 | $ 60 |
Pension benefits - Change in Pension Plan Assets (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
|
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | $ 33 | ||
Estimated return | 1 | ||
Contribution by employer | 0 | ||
Administration charges | 0 | ||
Benefits paid | (1) | ||
Actuarial gain | 2 | ||
Settlement | 0 | ||
Foreign currency translations | (2) | ||
Fair value of plan assets at end of year | 33 | $ 33 | |
Predecessor | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | $ 33 | 33 | $ 58 |
Estimated return | 0 | 1 | |
Contribution by employer | 2 | 1 | |
Administration charges | 0 | 0 | |
Benefits paid | (1) | (2) | |
Actuarial gain | (1) | (5) | |
Settlement | 0 | (23) | |
Foreign currency translations | 0 | 3 | |
Fair value of plan assets at end of year | $ 33 | $ 33 |
Pension benefits - Assumptions Used in Calculation of Pension Obligations (Details) |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Rate of compensation increase at the end of year (as percent) | 2.75% | |||
Discount rate at the end of year (as percent) | 2.60% | |||
Prescribed pension index factor (as percent) | 2.00% | |||
Expected return on plan assets for the year (as percent) | 2.60% | |||
Employee turnover (as percent) | 4.00% | |||
Expected increases in Social Security Base (as percent) | 2.50% | |||
Predecessor | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Rate of compensation increase at the end of year (as percent) | 2.50% | 2.50% | 2.50% | |
Discount rate at the end of year (as percent) | 2.40% | 2.40% | 2.10% | |
Prescribed pension index factor (as percent) | 2.00% | 1.50% | 1.20% | |
Expected return on plan assets for the year (as percent) | 2.40% | 2.40% | 3.00% | |
Employee turnover (as percent) | 4.00% | 4.00% | 4.00% | |
Expected increases in Social Security Base (as percent) | 2.25% | 2.25% | 2.25% |
Pension benefits - Weighted-Average Asset Allocation of Funds Related to Defined Benefit Plan (Details) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 100.00% | |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 12.70% | |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 70.00% | |
Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 9.90% | |
Money market | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 6.90% | |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 0.50% | |
Predecessor | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 100.00% | |
Predecessor | Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 10.60% | |
Predecessor | Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 66.10% | |
Predecessor | Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 8.80% | |
Predecessor | Money market | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 13.50% | |
Predecessor | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 1.00% |
Pension benefits - Expected Annual Pension Plan Contributions Under Defined Benefit Plans (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Defined Benefit Plan, Expected Future Employer Contributions [Abstract] | |
2019 | $ 2 |
2020 | 2 |
2021 | 2 |
2022 | 3 |
2023 | 3 |
2024-2028 | 13 |
Total payments expected during the next 10 years | $ 25 |
Related party transactions - Analysis of Related Party Revenues, Operating Expenses, and Financial Items (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | $ 46 | |||
Total related party operating expenses | 1 | |||
Management fee revenues | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 41 | |||
In country support services revenues | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 0 | |||
Related party inventory sales | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 1 | |||
Other | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 4 | |||
Work performed to mobilize drilling rig for first drilling contract | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 10 | |||
In country support services expenses | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 0 | |||
Interest income | 15 | |||
Gains on related party derivatives | 0 | |||
Interest income recognized on deferred contingent consideration | 1 | |||
Total related party financial items | 16 | |||
Related party inventory purchases | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 0 | |||
Other related party operating expenses | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 1 | |||
Net bareboat charter arrangements | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | $ 0 | |||
Predecessor | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | $ 43 | $ 110 | $ 100 | |
Total related party operating expenses | 7 | 13 | 13 | |
Predecessor | Management fee revenues | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 41 | 84 | 72 | |
Predecessor | In country support services revenues | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 1 | 23 | 25 | |
Predecessor | Related party inventory sales | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 1 | 0 | 1 | |
Predecessor | Other | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating revenues | 0 | 3 | 2 | |
Predecessor | In country support services expenses | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 1 | 8 | 14 | |
Interest income | 12 | 34 | 29 | |
Gains on related party derivatives | 0 | 1 | 1 | |
Interest income recognized on deferred contingent consideration | 2 | 3 | 4 | |
Total related party financial items | 14 | 38 | 34 | |
Predecessor | Related party inventory purchases | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 3 | 3 | 1 | |
Predecessor | Other related party operating expenses | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | 3 | 3 | 5 | |
Predecessor | Net bareboat charter arrangements | ||||
Related Party Transaction [Line Items] | ||||
Total related party operating expenses | $ 0 | $ 1 | $ 7 |
Related party transactions - Analysis of Related Party Receivable Balances (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Nov. 30, 2016 |
Mar. 31, 2015 |
|
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 716 | $ 716 | |||||
Repayments received against related party loans | (7) | ||||||
Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 476 | 476 | |||||
Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 59 | 59 | |||||
Convertible bond | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 43 | 43 | |||||
Trading balances | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 138 | 138 | |||||
SeaMex seller's credit and loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 398 | $ 398 | |||||
Interest rate on related party receivable | 6.50% | ||||||
SeaMex seller's credit and loans receivable | Sellers credit | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 250 | ||||||
SeaMex seller's credit and loans receivable | Working capital loan | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 45 | ||||||
SeaMex seller's credit and loans receivable | Accrued interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 103 | $ 103 | |||||
Seabras loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 78 | 78 | |||||
Repayments received against related party loans | 23 | ||||||
Seabras loans receivable | Accrued interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 8 | 8 | |||||
Seabras loans receivable | Loan principal | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 70 | 70 | |||||
Seabras loans receivable | Shareholder loans | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments received against related party loans | 20 | ||||||
Seadrill Partners | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 0 | 0 | |||||
Seadrill Partners | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 59 | 59 | |||||
Predecessor | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 764 | ||||||
Repayments received against related party loans | $ 13 | 42 | $ (2) | ||||
Predecessor | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 495 | ||||||
Predecessor | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 52 | ||||||
Predecessor | Convertible bond | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 53 | ||||||
Predecessor | Trading balances | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 164 | ||||||
Predecessor | SeaMex seller's credit and loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 369 | ||||||
Predecessor | Seabras loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 101 | ||||||
Predecessor | Seadrill Partners | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 25 | ||||||
Predecessor | Seadrill Partners | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 53 | ||||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Mobilization receivable | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 31 | 31 | |||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Share of dayrate | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 27 | 27 | |||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Predecessor | Seadrill Partners | Mobilization receivable | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 44 | ||||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Predecessor | Seadrill Partners | Share of dayrate | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 4 | ||||||
West Polaris | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 1 | $ 1 | |||||
West Polaris | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Predecessor | Seadrill Partners | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 5 | ||||||
Minimum | LIBOR | Seabras loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party receivable | 3.40% | ||||||
Maximum | LIBOR | Seabras loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party receivable | 3.99% |
Related party transactions - Gains in Other Operating Income (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 26, 2017 |
|
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | $ 0 | |||||
Carrying value of related party receivable | 716 | $ 716 | ||||
Gain on debt extinguishment | 0 | $ 19 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | 0 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Polaris earn out realized | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | 0 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Vela earn out realized | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | 0 | |||||
Predecessor | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | $ 7 | 27 | $ 21 | |||
Carrying value of related party receivable | 764 | |||||
Gain on debt extinguishment | 0 | 19 | 47 | |||
Predecessor | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | 7 | 27 | 21 | |||
Predecessor | Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Polaris earn out realized | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | 0 | 13 | 8 | |||
Predecessor | Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Vela earn out realized | ||||||
Related Party Transaction [Line Items] | ||||||
Total contingent consideration recognized | $ 7 | $ 14 | $ 13 | |||
Subordinated loans including accrued interest and fees | Archer | ||||||
Related Party Transaction [Line Items] | ||||||
Related party receivable before conversion | $ 146 | |||||
Related party receivable after conversion | 45 | |||||
Interest rate on related party receivable | 5.50% | |||||
Fair value | Subordinated loans including accrued interest and fees | Archer | ||||||
Related Party Transaction [Line Items] | ||||||
Carrying value of related party receivable | 43 | $ 43 | 56 | |||
Fair value | Embedded derivative option | Archer | ||||||
Related Party Transaction [Line Items] | ||||||
Carrying value of related party receivable | $ 0 | $ 0 | ||||
Carrying value | Subordinated loans including accrued interest and fees | Archer | ||||||
Related Party Transaction [Line Items] | ||||||
Carrying value of related party receivable | $ 37 |
Related party transactions - Fair Value Gain/Loss on Convertible Bond (Details) - Archer - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
|
Fair value (loss) / gain of Archer debt component | |||
Related Party Transaction [Line Items] | |||
Fair value (loss) / gain | $ (3) | ||
Fair value (loss) / gain of Archer embedded conversion option | |||
Related Party Transaction [Line Items] | |||
Fair value (loss) / gain | $ (9) | ||
Predecessor | Fair value (loss) / gain of Archer debt component | |||
Related Party Transaction [Line Items] | |||
Fair value (loss) / gain | $ 2 | $ 1 | |
Predecessor | Fair value (loss) / gain of Archer embedded conversion option | |||
Related Party Transaction [Line Items] | |||
Fair value (loss) / gain | $ 2 | $ (4) |
Related party transactions - Analysis of Related Party Payable Balances (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Related Party Transaction [Line Items] | ||||
Total related party liabilities | $ 261 | $ 261 | ||
Related party loans payable | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | 222 | 222 | ||
Trading balances | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | 39 | 39 | ||
Predecessor | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | $ 324 | |||
Predecessor | Related party loans payable | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | 314 | |||
Predecessor | Trading balances | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | 10 | |||
Ship Finance | Related party loans payable | ||||
Related Party Transaction [Line Items] | ||||
Total related party liabilities | 222 | $ 222 | 314 | |
Interest rate on related party payable | 4.50% | |||
Interest expense on related party payable | 7 | |||
Ship Finance | Trading balances | ||||
Related Party Transaction [Line Items] | ||||
Net asset position | $ 4 | $ 4 | ||
Ship Finance | Predecessor | Related party loans payable | ||||
Related Party Transaction [Line Items] | ||||
Interest expense on related party payable | $ 7 | $ 15 |
Related party transactions - Related Party Assets and Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Related Party Transaction [Line Items] | ||
Amount due from related parties - current | $ 177 | |
Amount due from related parties - non-current | 539 | |
Amounts due to related parties - current | (39) | |
Long-term debt due to related parties | (222) | |
Total net related party balances | $ 455 | |
Predecessor | ||
Related Party Transaction [Line Items] | ||
Amount due from related parties - current | $ 217 | |
Amount due from related parties - non-current | 547 | |
Amounts due to related parties - current | (10) | |
Long-term debt due to related parties | (314) | |
Total net related party balances | $ 440 |
Related party transactions - Narrative (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
Apr. 30, 2015 |
Dec. 31, 2013 |
Nov. 30, 2012 |
---|---|---|---|---|---|
Seabras Sapura | Secured Debt | |||||
Related Party Transaction [Line Items] | |||||
Maximum borrowing capacity | $ 543,000,000 | ||||
Seabras Sapura | Secured Debt | Sapura Esmeralda | |||||
Related Party Transaction [Line Items] | |||||
Maximum borrowing capacity | $ 36,000,000 | $ 179,000,000 | |||
Seabras Sapura | Secured Debt | Sapura Onix, Sapura Jade, and Supra Rubi | |||||
Related Party Transaction [Line Items] | |||||
Maximum borrowing capacity | $ 780,000,000 | ||||
Sponsor guarantee | TL Offshore Sdn. Bhd | Seabras Sapura | |||||
Related Party Transaction [Line Items] | |||||
Total amount guaranteed | $ 165,000,000 | ||||
Predecessor | Sponsor guarantee | TL Offshore Sdn. Bhd | Seabras Sapura | |||||
Related Party Transaction [Line Items] | |||||
Total amount guaranteed | $ 184,000,000 | ||||
Predecessor | Sponsor guarantee | Sapura Energy | Seabras Sapura | |||||
Related Party Transaction [Line Items] | |||||
Total amount guaranteed | 186,000,000 | ||||
Predecessor | Sponsor guarantee | Sapura Energy Berhad | Seabras Sapura | |||||
Related Party Transaction [Line Items] | |||||
Total amount guaranteed | $ 328,000,000 |
Financial instruments and risk management - Interest Rate Risk (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Debt Instrument [Line Items] | |
Principal outstanding | $ 5,083 |
Hedging instruments | 4,500 |
Net exposure | $ (186) |
Hypothetical increase in rates (as a percent) | 1.00% |
Impact of 1% increase in rates | $ 1 |
Total floating rate debt obligations | |
Debt Instrument [Line Items] | |
Principal outstanding | 6,317 |
Hedging instruments | 4,500 |
Net exposure | 1,817 |
Impact of 1% increase in rates | 21 |
Total floating rate debt obligations | Senior Credit Facilities | |
Debt Instrument [Line Items] | |
Principal outstanding | 5,662 |
Hedging instruments | 4,500 |
Net exposure | 1,162 |
Impact of 1% increase in rates | 15 |
Total floating rate debt obligations | Debt contained within VIEs | |
Debt Instrument [Line Items] | |
Principal outstanding | 655 |
Net exposure | 655 |
Impact of 1% increase in rates | 6 |
Secured Debt | New Secured Notes | |
Debt Instrument [Line Items] | |
Principal outstanding | 769 |
Net exposure | 0 |
Impact of 1% increase in rates | 0 |
Less: Cash and Restricted Cash | |
Debt Instrument [Line Items] | |
Principal outstanding | (2,003) |
Net exposure | (2,003) |
Impact of 1% increase in rates | $ (20) |
Financial instruments and risk management - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
May 11, 2018 |
Apr. 26, 2017 |
|
Derivative [Line Items] | |||
Impact that would be mitigated (as a percent) | 94.00% | ||
Hypothetical increase in LIBOR rate (as a percent) | 1.00% | ||
Convertible bond issued by Archer | $ 261 | ||
Expense for allowed claim values higher than previous fair values | $ 89 | ||
LIBOR | |||
Derivative [Line Items] | |||
Basis spread on variable rate (as a percent) | 2.81% | ||
Interest rate cap | Not designated as a hedge | |||
Derivative [Line Items] | |||
Derivative asset purchased | $ 68 | ||
Interest rate cap | LIBOR | Not designated as a hedge | |||
Derivative [Line Items] | |||
Capped rate | 2.87% | ||
Archer | Convertible bond | |||
Derivative [Line Items] | |||
Convertible bond issued by Archer | $ 45 |
Financial instruments and risk management - Sensitivity Analysis (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Derivative [Line Items] | |
Point increase in rates (before impact of interest rate cap) (percent) | 1.00% |
Point increase in rates (after impact of interest rate cap) (percent) | 1.00% |
Amount | $ 5,083 |
Impact of 1% point increase in rates (after impact of interest rate cap) | 1 |
Floating rate debt obligations | |
Derivative [Line Items] | |
Amount | 6,317 |
Impact of 1% point increase in rates (after impact of interest rate cap) | 21 |
Floating rate debt obligations | Senior Credit Facilities | |
Derivative [Line Items] | |
Amount | 5,662 |
Impact of 1% point increase in rates (before impact of interest rate cap) | 57 |
Less: impact of LIBOR CAP | (42) |
Impact of 1% point increase in rates (after impact of interest rate cap) | 15 |
Floating rate debt obligations | Senior Credit Facilities | Hedged | |
Derivative [Line Items] | |
Amount | 4,500 |
Impact of 1% point increase in rates (before impact of interest rate cap) | 45 |
Less: impact of LIBOR CAP | (42) |
Impact of 1% point increase in rates (after impact of interest rate cap) | 3 |
Floating rate debt obligations | Senior Credit Facilities | Not hedged | |
Derivative [Line Items] | |
Amount | 1,162 |
Impact of 1% point increase in rates (before impact of interest rate cap) | 12 |
Less: impact of LIBOR CAP | 0 |
Impact of 1% point increase in rates (after impact of interest rate cap) | $ 12 |
Financial instruments and risk management - Realized and Unrealized Gains and Losses (Details) - (Loss)/gain recognized relating to derivative financial instruments - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | $ (31) | |||
Interest rate cap agreement | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | (22) | |||
Archer convertible debt instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | (9) | |||
Interest rate swaps not designated for hedge accounting | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | 0 | |||
Cross currency swaps not designated for hedge accounting | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | 0 | |||
Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | $ 0 | |||
Predecessor | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | $ (4) | $ 11 | $ (74) | |
Predecessor | Interest rate cap agreement | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | (6) | 0 | 0 | |
Predecessor | Archer convertible debt instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | 2 | (4) | 0 | |
Predecessor | Interest rate swaps not designated for hedge accounting | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | 0 | (31) | (48) | |
Predecessor | Cross currency swaps not designated for hedge accounting | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | 0 | 46 | (20) | |
Predecessor | Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss/(gain) on derivative financial instruments | $ 0 | $ 0 | $ (6) |
Financial instruments and risk management - Derivative Financial Instruments (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Outstanding principal | $ 5,083,000,000 | |
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative financial instruments | 39,000,000 | $ 0 |
Other Assets | Interest rate cap | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding principal | 4,500,000,000 | |
Derivative financial instruments | 39,000,000 | 0 |
Other Assets | Interest rate hedge agreement in the VIE | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding principal | 0 | |
Derivative financial instruments | $ 0 | $ 0 |
LIBOR cap | Other Assets | Interest rate cap | ||
Derivatives, Fair Value [Line Items] | ||
Applicable rate, floating | 2.87% | |
Minimum | Other Assets | Interest rate hedge agreement in the VIE | ||
Derivatives, Fair Value [Line Items] | ||
Applicable rate, fixed | 1.77% | |
Maximum | Other Assets | Interest rate hedge agreement in the VIE | ||
Derivatives, Fair Value [Line Items] | ||
Applicable rate, fixed | 2.01% |
Fair value of financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair value | Level 2 | ||
Assets | ||
Related party loans receivable | $ 476 | |
Liabilities | ||
Related party loans payable by the VIE | 222 | |
Fair value | Level 2 | Unsecured bonds | ||
Liabilities | ||
Debt | 0 | |
Fair value | Level 2 | Secured credit facilities | ||
Liabilities | ||
Debt | 5,388 | |
Fair value | Level 2 | Credit facilities contained within variable interest entities | ||
Liabilities | ||
Debt | 612 | |
Fair value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | 770 | |
Carrying value | Level 2 | ||
Assets | ||
Related party loans receivable | 476 | |
Liabilities | ||
Related party loans payable by the VIE | 226 | |
Carrying value | Level 2 | Unsecured bonds | ||
Liabilities | ||
Debt | 0 | |
Carrying value | Level 2 | Secured credit facilities | ||
Liabilities | ||
Debt | 5,519 | |
Carrying value | Level 2 | Credit facilities contained within variable interest entities | ||
Liabilities | ||
Debt | 626 | |
Carrying value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | $ 769 | |
Predecessor | Fair value | Level 2 | ||
Assets | ||
Related party loans receivable | $ 470 | |
Liabilities | ||
Related party loans payable by the VIE | 218 | |
Predecessor | Fair value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | 0 | |
Predecessor | Carrying value | Level 2 | ||
Assets | ||
Related party loans receivable | 470 | |
Liabilities | ||
Related party loans payable by the VIE | 314 | |
Predecessor | Carrying value | Level 2 | Unsecured bonds | ||
Liabilities | ||
Debt | 2,334 | |
Predecessor | Carrying value | Level 2 | Secured credit facilities | ||
Liabilities | ||
Debt | 5,581 | |
Predecessor | Carrying value | Level 2 | Credit facilities contained within variable interest entities | ||
Liabilities | ||
Debt | 786 | |
Predecessor | Carrying value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | $ 0 |
Fair value of financial instruments - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Fair value, recurring basis - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Level 1 | ||
Assets | ||
Cash and cash equivalents | $ 1,542 | |
Restricted cash | 461 | |
Marketable securities | 57 | |
Level 3 | ||
Assets | ||
Related party loans receivable | 43 | |
Temporary equity | ||
Redeemable non-controlling interest | 38 | |
Level 2 | Interest rate cap agreement | ||
Assets | ||
Interest rate cap | $ 39 | |
Predecessor | Level 1 | ||
Assets | ||
Cash and cash equivalents | $ 1,255 | |
Restricted cash | 104 | |
Marketable securities | 124 | |
Predecessor | Level 3 | ||
Assets | ||
Related party loans receivable | 53 | |
Temporary equity | ||
Redeemable non-controlling interest | 0 | |
Predecessor | Level 2 | Interest rate cap agreement | ||
Assets | ||
Interest rate cap | $ 0 |
Fair value of financial instruments - Narrative (Details) $ in Millions |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Jul. 01, 2018
USD ($)
|
Dec. 31, 2018 |
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
WACC | 11.00% | ||||
Impairment | $ 0 | ||||
Predecessor | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment | $ (414) | $ (696) | $ (44) | ||
Predecessor | Exploration and production equipment | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment | $ (414) | ||||
Debt | Discounted cash flow | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value, cost of debt percent | 0.08 | 0.08 |
Commitments and contingencies - Guarantees (Details) £ in Millions, $ in Millions |
Dec. 31, 2018
USD ($)
contract
|
Dec. 31, 2018
GBP (£)
contract
|
Dec. 31, 2017
USD ($)
contract
|
Dec. 31, 2017
GBP (£)
contract
|
---|---|---|---|---|
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | $ 173.0 | $ 912.0 | ||
Dalian | ||||
Guarantor Obligations [Line Items] | ||||
Number of newbuilding contracts | contract | 2 | 2 | 8 | 8 |
Maximum guarantee | $ 400.0 | $ 1,700.0 | ||
Performance Guarantee | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | 7.0 | 203.0 | ||
Performance Guarantee | Archer Limited | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | 0.0 | 8.0 | ||
Performance Guarantee | Seadrill Partners LLC | ||||
Guarantor Obligations [Line Items] | ||||
Guarantee outstanding | 7.0 | 165.0 | ||
Performance Guarantee | SeaMex Limited | ||||
Guarantor Obligations [Line Items] | ||||
Guarantee outstanding | 30.0 | |||
Guarantee in favor of banks | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | 165.0 | 698.0 | ||
Guarantee in favor of banks | Seabras Sapura | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | 165.0 | 698.0 | ||
Guarantee in favor of suppliers | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | 1.0 | 11.0 | ||
Guarantee in favor of suppliers | Archer Limited | ||||
Guarantor Obligations [Line Items] | ||||
Maximum guarantee | £ 0 | 10.0 | £ 7 | |
Custom Guarantee | Nigeria | Seadrill Partners LLC | ||||
Guarantor Obligations [Line Items] | ||||
Guarantee outstanding | $ 1.0 | $ 1.0 |
Operating leases (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Leases, Operating [Abstract] | ||||
Rent expense | $ 7 | $ 9 | $ 19 | $ 17 |
Operating leases, future minimum payments due, fiscal year maturity [Abstract] | ||||
2019 | 11 | |||
2020 | 9 | |||
2021 | 9 | |||
2022 | 5 | |||
2023 | 3 | |||
2024 and thereafter | 1 | |||
Total | $ 38 |
Variable Interest Entities - Narrative (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
rig
|
Dec. 31, 2017
USD ($)
|
|
Sale Leaseback Transaction [Line Items] | ||
Number of semi submersible rigs under sale leaseback arrangements | rig | 2 | |
Term of lease contracts | 15 years | |
Cash and cash equivalents | $ 1,542,000,000 | |
SFL Linus Limited | ||
Sale Leaseback Transaction [Line Items] | ||
Repurchase obligation | 86,000,000 | |
Variable Interest Entity, primary beneficiary | ||
Sale Leaseback Transaction [Line Items] | ||
Cash and cash equivalents | 2,000,000 | $ 17,000,000 |
Dividend to non-controlling interests in VIEs | $ 0 | $ 14,000,000 |
Variable Interest Entities - Summary of Sale and Leaseback Arrangements (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
West Taurus | |
Variable Interest Entity [Line Items] | |
Sale value (In $ millions) | $ 850 |
First repurchase option (In $ millions) | 418 |
Last repurchase option (1) (In $ millions) | 154 |
SFL Hercules Limited | |
Variable Interest Entity [Line Items] | |
Sale value (In $ millions) | 850 |
First repurchase option (In $ millions) | 580 |
Last repurchase option (1) (In $ millions) | 138 |
SFL Linus Limited | |
Variable Interest Entity [Line Items] | |
Sale value (In $ millions) | 600 |
First repurchase option (In $ millions) | 370 |
Last repurchase option (1) (In $ millions) | 170 |
Repurchase obligation | $ 86 |
Variable Interest Entities - Summary of Average Bareboat Charter Rates per Day (Details) $ / d in Thousands |
Dec. 31, 2018
$ / d
|
---|---|
West Taurus | |
Sale Leaseback Transaction [Line Items] | |
2018 | 112 |
2019 | 102 |
2020 | 101 |
2021 | 96 |
2022 | 96 |
2023 | 179 |
SFL Hercules Limited | |
Sale Leaseback Transaction [Line Items] | |
2018 | 117 |
2019 | 101 |
2020 | 100 |
2021 | 96 |
2022 | 96 |
2023 | 180 |
SFL Linus Limited | |
Sale Leaseback Transaction [Line Items] | |
2018 | 158 |
2019 | 119 |
2020 | 99 |
2021 | 99 |
2022 | 92 |
2023 | 171 |
Variable Interest Entities - Assets and Liabilities in Statutory Accounts of VIEs (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 1,542,000,000 | |
Predecessor | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 1,255,000,000 | |
SFL Deepwater Limited | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 320,000,000 | |
Amount due from related parties | 0 | |
Other assets (1) | 2,000,000 | |
Total assets | 322,000,000 | |
Short-term interest-bearing debt | 16,000,000 | |
Long-term interest-bearing debt | 179,000,000 | |
Other liabilities | 2,000,000 | |
Short-term trading balances due to related parties | 0 | |
Long-term debt due to related parties (2) | 84,000,000 | |
Debt principal outstanding | 113,000,000 | |
Debt discount | (25,000,000) | |
Trading asset positions held against long-term loan | (4,000,000) | |
Total liabilities | 281,000,000 | |
Equity | 41,000,000 | |
SFL Deepwater Limited | Predecessor | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 335,000,000 | |
Amount due from related parties | 4,000,000 | |
Other assets (1) | 6,000,000 | |
Total assets | 345,000,000 | |
Short-term interest-bearing debt | 226,000,000 | |
Long-term interest-bearing debt | 0 | |
Other liabilities | 3,000,000 | |
Short-term trading balances due to related parties | 0 | |
Long-term debt due to related parties (2) | 113,000,000 | |
Debt principal outstanding | 113,000,000 | |
Debt discount | 0 | |
Trading asset positions held against long-term loan | 0 | |
Total liabilities | 342,000,000 | |
Equity | 3,000,000 | |
SFL Hercules Limited | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 307,000,000 | |
Amount due from related parties | 0 | |
Other assets (1) | 0 | |
Total assets | 307,000,000 | |
Short-term interest-bearing debt | 8,000,000 | |
Long-term interest-bearing debt | 193,000,000 | |
Other liabilities | 0 | |
Short-term trading balances due to related parties | 10,000,000 | |
Long-term debt due to related parties (2) | 62,000,000 | |
Debt principal outstanding | 80,000,000 | |
Debt discount | (18,000,000) | |
Trading asset positions held against long-term loan | 0 | |
Total liabilities | 273,000,000 | |
Equity | 34,000,000 | |
SFL Hercules Limited | Predecessor | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 326,000,000 | |
Amount due from related parties | 4,000,000 | |
Other assets (1) | 6,000,000 | |
Total assets | 336,000,000 | |
Short-term interest-bearing debt | 27,000,000 | |
Long-term interest-bearing debt | 224,000,000 | |
Other liabilities | 2,000,000 | |
Short-term trading balances due to related parties | 0 | |
Long-term debt due to related parties (2) | 80,000,000 | |
Debt principal outstanding | 80,000,000 | |
Debt discount | 0 | |
Trading asset positions held against long-term loan | 0 | |
Total liabilities | 333,000,000 | |
Equity | 3,000,000 | |
SFL Linus Limited | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 397,000,000 | |
Amount due from related parties | 0 | |
Other assets (1) | 0 | |
Total assets | 397,000,000 | |
Short-term interest-bearing debt | 9,000,000 | |
Long-term interest-bearing debt | 221,000,000 | |
Other liabilities | 0 | |
Short-term trading balances due to related parties | 21,000,000 | |
Long-term debt due to related parties (2) | 76,000,000 | |
Debt principal outstanding | 121,000,000 | |
Debt discount | (45,000,000) | |
Trading asset positions held against long-term loan | 0 | |
Total liabilities | 327,000,000 | |
Equity | 70,000,000 | |
SFL Linus Limited | Predecessor | ||
Variable Interest Entity [Line Items] | ||
Investment in finance lease | 431,000,000 | |
Amount due from related parties | 0 | |
Other assets (1) | 8,000,000 | |
Total assets | 439,000,000 | |
Short-term interest-bearing debt | 48,000,000 | |
Long-term interest-bearing debt | 261,000,000 | |
Other liabilities | 0 | |
Short-term trading balances due to related parties | 4,000,000 | |
Long-term debt due to related parties (2) | 121,000,000 | |
Debt principal outstanding | 121,000,000 | |
Debt discount | 0 | |
Trading asset positions held against long-term loan | 0 | |
Total liabilities | 434,000,000 | |
Equity | 5,000,000 | |
Variable Interest Entity, primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 2,000,000 | $ 17,000,000 |
Assets held for sale (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
May 09, 2018 |
Apr. 05, 2018 |
Dec. 02, 2015 |
|||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Loss on disposals | [1] | $ 0 | |||||
Drilling units | Sale of West Rigel | Jurong Shipyard | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Fair value of consideration received | $ (126) | ||||||
Assets held for sale | Drilling units | Sale of West Rigel | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned (as percent) | 23.00% | ||||||
Fair value of consideration received | $ (126) | $ (126) | |||||
Loss on disposals | $ 2 | ||||||
Assets held for sale | Drilling units | Sale of West Rigel | Jurong Shipyard | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned (as percent) | 77.00% | ||||||
|
Supplementary cash flow information (Details) - USD ($) |
1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 29, 2017 |
Dec. 05, 2016 |
Aug. 31, 2017 |
Jul. 31, 2017 |
Jun. 30, 2016 |
May 31, 2016 |
Dec. 31, 2018 |
Jul. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jul. 02, 2018 |
Jun. 29, 2016 |
Jun. 13, 2016 |
May 30, 2016 |
May 20, 2016 |
Dec. 31, 2015 |
Sep. 30, 2012 |
May 10, 2005 |
||||
Non-cash investing activities | |||||||||||||||||||||
Sale of rigs and equipment (1) | $ 0 | ||||||||||||||||||||
Derecognition of Sevan Developer newbuild asset (4) | 0 | ||||||||||||||||||||
Derecognition of Sevan Developer construction obligation (4) | 0 | ||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited (3) | 0 | ||||||||||||||||||||
Proceeds from long-term loans (6) | 0 | ||||||||||||||||||||
Long term loans netted-down with related party balances (6) | 0 | ||||||||||||||||||||
Dividend to non-controlling interests in VIEs (7) | 0 | ||||||||||||||||||||
Sale of rigs and equipment | $ 0 | ||||||||||||||||||||
Ownership interest (as percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||||||
Loss on disposals | [1] | $ 0 | |||||||||||||||||||
Number of shares issued (in shares) | 15,684,340 | ||||||||||||||||||||
Common shares, par value (in dollars per share) | $ 2.00 | $ 2.00 | $ 0.1 | ||||||||||||||||||
Common stock, shares issued (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 508,444,280 | 500,944,280 | ||||||||||||||||
$1,000 million fixed interest bond | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Fixed interest rate (as percent) | 6.125% | 6.125% | 5.625% | 5.625% | 5.625% | ||||||||||||||||
Number of shares issued (in shares) | 7,500,000 | 8,184,340 | |||||||||||||||||||
Debt repurchased | $ 50,000,000 | $ 55,000,000 | |||||||||||||||||||
Seadrill Mobile Units (Nigeria) Ltd | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Ownership interest (as percent) | 51.00% | ||||||||||||||||||||
Seadrill UK Ltd | Seadrill Mobile Units (Nigeria) Ltd | |||||||||||||||||||||
Non-cash investing activities | |||||||||||||||||||||
Increase of investment in Seadrill Mobile Units (Nigeria) Ltd (2) | $ (6,000,000) | ||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Interest acquired (as percent) | 10.00% | ||||||||||||||||||||
Ownership interest (as percent) | 49.00% | ||||||||||||||||||||
Seadrill Partners LLC | $440 million facility | Secured Debt | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Repayments of lines of credit | $ 109,000,000 | ||||||||||||||||||||
Debt, face amount | $ 440,000,000 | ||||||||||||||||||||
Drilling units | West Triton, West Mischief and West Resolute | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Fair value of consideration received | $ 225,000,000 | ||||||||||||||||||||
Loss on disposals | $ 166,000,000 | ||||||||||||||||||||
Drilling units | Disposal of Sevan Developer contract | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Disposal group, including discontinued operation, property, plant and equipment | $ 620,000,000 | ||||||||||||||||||||
Disposal group, including discontinued operation, construction payable | 526,000,000 | ||||||||||||||||||||
Disposal group, including discontinued operation, accrued liabilities | 19,000,000 | ||||||||||||||||||||
Loss on disposals | $ 75,000,000 | ||||||||||||||||||||
Predecessor | |||||||||||||||||||||
Non-cash investing activities | |||||||||||||||||||||
Sale of rigs and equipment (1) | $ 0 | 103,000,000 | $ 0 | ||||||||||||||||||
Increase of investment in Seadrill Mobile Units (Nigeria) Ltd (2) | (6,000,000) | ||||||||||||||||||||
Proceeds from repayment of short-term loan from related parties due to Seadrill Partners insulation from Seadrill Limited (3) | 109,000,000 | ||||||||||||||||||||
Derecognition of Sevan Developer newbuild asset (4) | 0 | 620,000,000 | 0 | ||||||||||||||||||
Derecognition of Sevan Developer construction obligation (4) | 0 | (526,000,000) | 0 | ||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Repayment of debt following sale of rigs and equipment (1) | (103,000,000) | ||||||||||||||||||||
Increase in non-controlling interest in Seadrill Nigeria Operations Ltd (2) | 7,000,000 | ||||||||||||||||||||
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited (3) | 0 | (109,000,000) | 0 | ||||||||||||||||||
Conversion of convertible bond into shares, decrease in long term debt (5) | (105,000,000) | ||||||||||||||||||||
Conversion of convertible bond into shares, net increase in equity (5) | 58,000,000 | ||||||||||||||||||||
Proceeds from long-term loans (6) | 0 | 0 | 150,000,000 | ||||||||||||||||||
Long term loans netted-down with related party balances (6) | 0 | 0 | (150,000,000) | ||||||||||||||||||
Dividend to non-controlling interests in VIEs (7) | 0 | (14,000,000) | (113,000,000) | ||||||||||||||||||
Sale of rigs and equipment | 126,000,000 | 122,000,000 | 0 | ||||||||||||||||||
Loss on disposals | [1] | $ 0 | $ 245,000,000 | $ 0 | |||||||||||||||||
Number of shares issued (in shares) | 15,684,340 | ||||||||||||||||||||
Common shares, par value (in dollars per share) | $ 2.00 | $ 2 | |||||||||||||||||||
Common stock, shares issued (in shares) | 508,763,020 | 508,763,020 | 508,763,020 | 493,078,680 | 6,000 | ||||||||||||||||
Predecessor | Disposal of Sevan Developer contract | |||||||||||||||||||||
Non-cash financing activities | |||||||||||||||||||||
Fair value of consideration received | $ 0 | ||||||||||||||||||||
Loss on disposals | $ 75,000,000 | ||||||||||||||||||||
|
Subsequent Events (Details) $ / shares in Units, $ in Millions, $ in Millions |
1 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 31, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
$ / shares
|
Mar. 31, 2019
CAD ($)
|
Feb. 28, 2019 |
Jan. 01, 2019
drillship
|
Dec. 31, 2018
USD ($)
|
Oct. 10, 2018
USD ($)
|
|
Subsequent Event [Line Items] | |||||||
Total debt principal | $ 7,086 | ||||||
Secured Debt | New Secured Notes | |||||||
Subsequent Event [Line Items] | |||||||
Tender offer, aggregate repurchase amount | $ 56 | ||||||
Total debt principal | $ 769 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Collection of receivables | $ 26 | ||||||
Subsequent Event | Sonadrill | |||||||
Subsequent Event [Line Items] | |||||||
Number of drillships | drillship | 4 | ||||||
Subsequent Event | Secured Debt | New Secured Notes | |||||||
Subsequent Event [Line Items] | |||||||
Majority of Note holders to consent to proposed amendments | 50.00% | ||||||
Tender offer, aggregate repurchase amount | $ 311 | ||||||
Tender offer, price | $ / shares | $ 107 | ||||||
Total debt principal | $ 458 |
Label | Element | Value |
---|---|---|
Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 2,827,000,000 |
Parent [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 3,501,000,000 |
Parent [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 2,720,000,000 |
Common Stock [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 10,000,000 |
Common Stock [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity, Shares | sdrl_CancellationOfPredecessorEquityShares | 1,008,000,000 |
Other Additional Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 0 |
Other Additional Capital [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | 1,956,000,000 |
Noncontrolling Interest [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Noncontrolling Interest [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | 107,000,000 |
Retained Earnings [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
Retained Earnings [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | (3,593,000,000) |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 3,491,000,000 |
Additional Paid-in Capital [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | 3,322,000,000 |
AOCI Attributable to Parent [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 0 |
AOCI Attributable to Parent [Member] | Predecessor [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 27,000,000 |
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