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Investment in associated companies (Tables)
 12 Months Ended
Dec. 31, 2019
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:
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
%
We have the following investments in associated companies:
 
Successor

 
Successor

Ownership percentage
December 31, 2019

 
December 31, 2018

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
%
Sonadrill (b)
50.0
%
 
—
%
Gulfdrill (b)
50.0
%
 
—
%

(a) 
Refer to the Seadrill Partners subsidiaries paragraph below for additional information.
(b) 
For transactions with related parties refer to Note 31 - Related party transactions.
Share in results from associated companies
We have recognized the following impairments on investments in associated companies:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018


 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Impairments of Investment in associated companies and joint ventures (refer to Note 18)
 
 
 
 
 
 
 
 
Seadrill Partners - Direct ownership investments
248

 
—

 
 
—

 
723

Seadrill Partners - Subordinated units
—

 
—

 
 
—

 
82

Seadrill Partners - Seadrill member interest and IDRs
54

 
—

 
 
—

 
—

SeaMex Limited
—

 
—

 
 
—

 
36

Total impairment of investments in associated companies and joint ventures
302

 
—

 
 
—

 
841


 
 
 
 
 
 
 
 
Total impairment of investments
302

 
—

 
 
—

 
841

Our share in results of our associated companies (net of tax) were as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Seadrill Partners - Direct ownership interests
(107
)
 
(82
)
 
 
77

 
82

Seadrill Partners - Subordinated units
(17
)
 
(20
)
 
 
22

 
22

Seabras Sapura
29

 
24

 
 
46

 
80

SeaMex
(19
)
 
(12
)
 
 
4

 
—

Sonadrill
(1
)
 
—

 
 
—

 
—

Archer
—

 
—

 
 
—

 
(10
)
Total share in results from associated companies (net of tax)
(115
)
 
(90
)
 
 
149

 
174
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:
SDLP
Successor
 
 
Predecessor
(in $ millions)
Year ended December 31,
2019

 
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
750

 
426

 
 
612

 
1,128

Net operating income
51

 
100

 
 
257

 
464

Net income
(187
)
 
(127
)
 
 
201

 
235

 
 
 
 
 
 
 
 
 
Net (loss)/income allocated to SDLP direct ownership interests
(92
)
 
(59
)
 
 
77

 
93

Amortization of basis differences
(15
)
 
(23
)
 
 
—

 
(11
)
Share in results of SDLP direct investments (net of tax)
(107
)
 
(82
)
 
 
77

 
82

 
 
 
 
 
 
 
 
 
Net (loss)/income allocated to SDLP subordinated units
(17
)
 
(15
)
 
 
22

 
24

Amortization of basis differences
—

 
(5
)
 
 
—

 
(2
)
Share in results of SDLP subordinated units (net of tax)
(17
)
 
(20
)
 
 
22

 
22

The results of the Seabras Sapura companies and our share in those results (net of tax) were as follows:
Seabras Sapura
Successor
 
 
Predecessor
(in $ millions)
Year ended December 31,
2019

 
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
434

 
232

 
 
241

 
487

Net operating income
198

 
124

 
 
125

 
244

Net income
113

 
88

 
 
92

 
160

 
 
 
 
 
 
 
 
 
Seadrill ownership percentage
50
%
 
50
%
 
 
50
%
 
50
%
Share of net income
57

 
44

 
 
46

 
80

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(20
)
 
 
—

 
—

Share in results from Seabras Sapura (net of tax)
29

 
24

 
 
46

 
80

The results of the SeaMex companies and our share in those results (net of tax) were as follows:
SeaMex
Successor


Predecessor
(in $ millions)
Year ended December 31,
2019


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
232

 
118

 
 
121

 
239

Net operating income
70

 
40

 
 
40

 
80

Net income
18

 
4

 
 
7

 
—

 
 
 
 
 
 
 
 
 
Seadrill ownership percentage
50
%
 
50
%
 
 
50
%
 
50
%
Share of net income
9

 
2

 
 
4

 
—

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(14
)
 
 
—

 
—

Share in results from SeaMex (net of tax)
(19
)
 
(12
)
 
 
4

 
—
Summarized Consolidated Balance sheets for our equity method investees
The summarized balance sheets of the directly owned SDLP companies and our share of recorded equity in those companies was as follows:
SDLP
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
833

 
1,110

Non-current assets
4,847

 
5,076

Current liabilities
(533
)
 
(433
)
Non-current liabilities
(2,623
)
 
(3,039
)
Net Assets
2,524

 
2,714

 
 
 
 
Seadrill share of book equity
1,305

 
1,399

Basis difference allocated to rigs (2)
(1,220
)
 
(1,019
)
Basis difference allocated to contracts (2)
37

 
99

SDLP book equity allocated to direct investments
122

 
479

 
 
 
 
SDLP book equity allocated to subordinated units (1)
—

 
17

(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. We allocated a further net loss of $17 million for the year ended December 31, 2019. After allocating this loss the remaining balance of the investment in subordinated units was nil.
(2) 
In September 2019, an impairment of $302 million was recognized against the Seadrill Partners direct ownership interests and IDRs in the Consolidated Statements of Operations within "Loss on impairment of investments" (December 31, 2018 (Successor), nil). See Note 11 – Impairment loss on investments in associated companies.
The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows:
Seabras Sapura
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
195

 
255

Non-current assets
1,495

 
1,567

Current liabilities
(510
)
 
(599
)
Non-current liabilities
(504
)
 
(637
)
Net Assets
676

 
586

Seadrill ownership percentage
50
%
 
50
%
Seadrill share of book equity
338

 
293

 
 
 
 
Shareholder loans held as equity (1)
123

 
132

Basis difference allocated to rigs
(369
)
 
(394
)
Basis difference allocated to contracts
129

 
178

Total adjustments
(117
)
 
(84
)
Book value of Seadrill investment
221

 
209

(1) In September 2019, Seabras Sapura repaid $9 million of shareholder loans, with the cash proceeds held in escrow against a future redemption of Senior Secured Notes.

The summarized balance sheets of the SeaMex companies and our share of recorded equity in those companies was as follows:
SeaMex
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
260

 
253

Non-current assets
939

 
977

Current liabilities
(141
)
 
(149
)
Non-current liabilities
(586
)
 
(627
)
Net Assets
472

 
454

Seadrill ownership percentage
50
%
 
50
%
Seadrill share of book equity
236

 
227

 
 
 
 
Basis difference allocated to rigs
(341
)
 
(357
)
Basis difference allocated to contracts
127

 
171

Total adjustments
(214
)
 
(186
)
 
 
 
 
Book value of Seadrill investment
22

 
41



The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows:
Sonadrill
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
57

 
—

Non-current assets
—

 
—

Current liabilities
(9
)
 
—

Non-current liabilities
—

 
—

Net Assets
48

 
—

Seadrill ownership percentage
50
%
 
—
%
Seadrill share of book equity
24

 
—

 
 
 
 
Book value of Seadrill investment
24

 
—