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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Seadrill Limited | NYSE:SDRL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.33 | -0.68% | 48.22 | 49.08 | 47.70 | 48.67 | 739,132 | 01:00:00 |
Interim Financial Statements (unaudited)
|
|
•
|
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.
|
•
|
Overview
|
•
|
Significant developments
|
•
|
Contract backlog
|
•
|
Market overview and trends
|
•
|
Results of operations
|
•
|
Liquidity and capital resources
|
•
|
Borrowing activities
|
•
|
Contractual obligations
|
•
|
Quantitative and qualitative disclosures about market risk
|
•
|
Critical accounting estimates
|
(In $ millions)
|
|
|
|
|
||
Contract backlog
|
|
June 30, 2019
|
|
|
December 31, 2018
|
|
Floaters
|
|
498
|
|
|
630
|
|
Jack-ups
|
|
1,411
|
|
|
1,457
|
|
Total
|
|
1,909
|
|
|
2,087
|
|
(In $ millions)
|
|
|
|
Period ended December 31,
|
|||||||||||
Contract backlog
|
|
Total
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022+
|
|
Floaters
|
|
498
|
|
|
298
|
|
|
191
|
|
|
9
|
|
|
—
|
|
Jack-ups
|
|
1,411
|
|
|
157
|
|
|
171
|
|
|
169
|
|
|
914
|
|
Total
|
|
1,909
|
|
|
455
|
|
|
362
|
|
|
178
|
|
|
914
|
|
|
|
Dec-2015
|
|
|
Dec-2016
|
|
|
Dec-2017
|
|
|
Dec-2018
|
|
|
Jun-2019
|
|
|
Average Brent oil price ($/bbl)
|
|
54
|
|
|
45
|
|
|
55
|
|
|
71
|
|
|
60
|
|
|
|
|
Dec-2015
|
|
|
Dec-2016
|
|
|
Dec-2017
|
|
|
Dec-2018
|
|
|
Jun-2019
|
|
|
Contracted rigs
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Harsh environment floater
|
|
45
|
|
|
35
|
|
|
30
|
|
|
31
|
|
|
35
|
|
|
Benign environment floater
|
|
196
|
|
|
139
|
|
|
120
|
|
|
116
|
|
|
118
|
|
|
Jack-up
(1)
|
|
180
|
|
|
152
|
|
|
154
|
|
|
168
|
|
|
194
|
|
|
Marketed utilization
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Harsh environment floater
|
|
93
|
%
|
|
81
|
%
|
|
83
|
%
|
|
85
|
%
|
|
87
|
%
|
|
Benign environment floater
|
|
83
|
%
|
|
71
|
%
|
|
71
|
%
|
|
73
|
%
|
|
76
|
%
|
|
Jack-up
(1)
|
|
83
|
%
|
|
70
|
%
|
|
70
|
%
|
|
74
|
%
|
|
82
|
%
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Operating revenues
|
321
|
|
|
|
348
|
|
|
623
|
|
|
|
712
|
|
Operating expenses
|
(397
|
)
|
|
|
(476
|
)
|
|
(796
|
)
|
|
|
(918
|
)
|
Other operating items
|
3
|
|
|
|
(411
|
)
|
|
29
|
|
|
|
(407
|
)
|
Operating loss
|
(73
|
)
|
|
|
(539
|
)
|
|
(144
|
)
|
|
|
(613
|
)
|
Interest expense
|
(122
|
)
|
|
|
(19
|
)
|
|
(254
|
)
|
|
|
(38
|
)
|
Reorganization items
|
—
|
|
|
|
(35
|
)
|
|
—
|
|
|
|
(109
|
)
|
Other income and expense
|
(41
|
)
|
|
|
165
|
|
|
(116
|
)
|
|
|
161
|
|
Loss before income taxes
|
(236
|
)
|
|
|
(428
|
)
|
|
(514
|
)
|
|
|
(599
|
)
|
Income tax benefit/(expense)
|
30
|
|
|
|
(4
|
)
|
|
12
|
|
|
|
(36
|
)
|
Net loss
|
(206
|
)
|
|
|
(432
|
)
|
|
(502
|
)
|
|
|
(635
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Contract revenues
|
253
|
|
|
|
311
|
|
|
508
|
|
|
|
619
|
|
Reimbursable revenues
|
44
|
|
|
|
9
|
|
|
70
|
|
|
|
21
|
|
Other revenues
|
24
|
|
|
|
28
|
|
|
45
|
|
|
|
72
|
|
Total operating revenues
|
321
|
|
|
|
348
|
|
|
623
|
|
|
|
712
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
164
|
|
|
|
226
|
|
|
338
|
|
|
|
436
|
|
Jack-ups
|
89
|
|
|
|
85
|
|
|
170
|
|
|
|
183
|
|
Contract revenues
|
253
|
|
|
|
311
|
|
|
508
|
|
|
|
619
|
|
i.
|
Average number of rigs on contract
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(Number)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
7
|
|
|
|
9
|
|
|
8
|
|
|
|
9
|
|
Jack-ups
|
8
|
|
|
|
8
|
|
|
8
|
|
|
|
8
|
|
Average number of rigs on contract
|
15
|
|
|
|
17
|
|
|
16
|
|
|
|
17
|
|
ii.
|
Average contractual dayrates
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ thousands)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
253
|
|
|
|
274
|
|
|
237
|
|
|
|
285
|
|
Jack-ups
|
113
|
|
|
|
113
|
|
|
110
|
|
|
|
124
|
|
iii.
|
Economic utilization for rigs on contract
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(Percentage)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
95
|
%
|
|
|
90
|
%
|
|
93
|
%
|
|
|
90
|
%
|
Jack-ups
|
98
|
%
|
|
|
90
|
%
|
|
98
|
%
|
|
|
94
|
%
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Related party revenues
(i)
|
22
|
|
|
|
21
|
|
|
43
|
|
|
|
43
|
|
Amortization of unfavorable contracts
(ii)
|
—
|
|
|
|
9
|
|
|
—
|
|
|
|
21
|
|
Other
(iii)
|
2
|
|
|
|
(2
|
)
|
|
2
|
|
|
|
8
|
|
Total other revenues
|
24
|
|
|
|
28
|
|
|
45
|
|
|
|
72
|
|
i.
|
Related party revenues
|
ii.
|
Amortization of unfavorable contracts
|
iii.
|
Other
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Vessel and rig operating expenses
|
(182
|
)
|
|
|
(224
|
)
|
|
(381
|
)
|
|
|
(407
|
)
|
Reimbursable expense
|
(43
|
)
|
|
|
(8
|
)
|
|
(69
|
)
|
|
|
(20
|
)
|
Depreciation
|
(104
|
)
|
|
|
(195
|
)
|
|
(212
|
)
|
|
|
(391
|
)
|
Amortization of intangibles
|
(38
|
)
|
|
|
—
|
|
|
(73
|
)
|
|
|
—
|
|
General and administrative expenses
|
(30
|
)
|
|
|
(49
|
)
|
|
(61
|
)
|
|
|
(100
|
)
|
Total operating expenses
|
(397
|
)
|
|
|
(476
|
)
|
|
(796
|
)
|
|
|
(918
|
)
|
i.
|
Vessel and rig operating expenses
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
(118
|
)
|
|
|
(115
|
)
|
|
(250
|
)
|
|
|
(239
|
)
|
Jack-ups
|
(50
|
)
|
|
|
(105
|
)
|
|
(106
|
)
|
|
|
(158
|
)
|
Other
|
(14
|
)
|
|
|
(4
|
)
|
|
(25
|
)
|
|
|
(10
|
)
|
Vessel and rig operating expenses
|
(182
|
)
|
|
|
(224
|
)
|
|
(381
|
)
|
|
|
(407
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(Number of rigs)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
|
|
|
|
|
|
|
|
||||
Operating
|
7
|
|
|
|
9
|
|
|
8
|
|
|
|
9
|
|
Warm stacked
|
3
|
|
|
|
1
|
|
|
2
|
|
|
|
1
|
|
Cold stacked
|
9
|
|
|
|
9
|
|
|
9
|
|
|
|
9
|
|
Average number of Floaters
|
19
|
|
|
|
19
|
|
|
19
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
||||
Jack-ups
|
|
|
|
|
|
|
|
|
|
||||
Operating
|
8
|
|
|
|
8
|
|
|
8
|
|
|
|
8
|
|
Warm stacked
|
2
|
|
|
|
3
|
|
|
2
|
|
|
|
3
|
|
Cold stacked
|
6
|
|
|
|
5
|
|
|
6
|
|
|
|
5
|
|
Average number of Jack-ups
|
16
|
|
|
|
16
|
|
|
16
|
|
|
|
16
|
|
ii.
|
Depreciation of drilling units and equipment
|
iii.
|
Amortization of intangibles
|
iv.
|
General and administrative expenses
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Cash and payment-in-kind interest on debt facilities
|
(110
|
)
|
|
|
(18
|
)
|
|
(230
|
)
|
|
|
(36
|
)
|
Unwind of discount on debt
|
(12
|
)
|
|
|
—
|
|
|
(24
|
)
|
|
|
—
|
|
Loan fee amortization
|
—
|
|
|
|
(1
|
)
|
|
—
|
|
|
|
(2
|
)
|
Interest expense
|
(122
|
)
|
|
|
(19
|
)
|
|
(254
|
)
|
|
|
(38
|
)
|
i.
|
Cash and payment-in-kind interest on debt facilities
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Senior credit facilities
|
(82
|
)
|
|
|
(63
|
)
|
|
(167
|
)
|
|
|
(118
|
)
|
Less: adequate protection payments
|
—
|
|
|
|
57
|
|
|
—
|
|
|
|
106
|
|
Senior secured notes
|
(16
|
)
|
|
|
—
|
|
|
(39
|
)
|
|
|
—
|
|
Debt of consolidated variable interest entities
|
(12
|
)
|
|
|
(12
|
)
|
|
(24
|
)
|
|
|
(24
|
)
|
Cash and payment-in-kind interest
|
(110
|
)
|
|
|
(18
|
)
|
|
(230
|
)
|
|
|
(36
|
)
|
ii.
|
Unwind of discount on debt
|
iii.
|
Loan fee amortization
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Advisory and professional fees
|
—
|
|
|
|
(40
|
)
|
|
—
|
|
|
|
(115
|
)
|
Interest income on surplus cash invested
|
—
|
|
|
|
5
|
|
|
—
|
|
|
|
6
|
|
Total reorganization items
|
—
|
|
|
|
(35
|
)
|
|
—
|
|
|
|
(109
|
)
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Interest income
|
19
|
|
|
|
9
|
|
|
39
|
|
|
|
19
|
|
Share in results from associated companies
|
(23
|
)
|
|
|
141
|
|
|
(65
|
)
|
|
|
149
|
|
Loss on derivative financial instruments
|
(6
|
)
|
|
|
(1
|
)
|
|
(33
|
)
|
|
|
(4
|
)
|
Foreign exchange (loss)/gain
|
4
|
|
|
|
(8
|
)
|
|
2
|
|
|
|
—
|
|
(Loss)/gain on marketable securities
|
(14
|
)
|
|
|
25
|
|
|
(35
|
)
|
|
|
(3
|
)
|
Other financial items
|
1
|
|
|
|
(1
|
)
|
|
(2
|
)
|
|
|
—
|
|
Net loss on debt extinguishment
|
(22
|
)
|
|
|
—
|
|
|
(22
|
)
|
|
|
—
|
|
Other income and expense
|
(41
|
)
|
|
|
165
|
|
|
(116
|
)
|
|
|
161
|
|
i.
|
Interest Income
|
ii.
|
Share in results from associated companies
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Seadrill Partners
|
(36
|
)
|
|
|
114
|
|
|
(78
|
)
|
|
|
99
|
|
Seamex
|
(5
|
)
|
|
|
1
|
|
|
(13
|
)
|
|
|
4
|
|
Seabras Sapura
|
18
|
|
|
|
26
|
|
|
26
|
|
|
|
46
|
|
Share of results from associated companies
|
(23
|
)
|
|
|
141
|
|
|
(65
|
)
|
|
|
149
|
|
iii.
|
Loss on derivative financial instruments
|
iv.
|
Foreign exchange (loss)/gain
|
v.
|
(Loss)/gain on marketable securities
|
vi.
|
Other financial items
|
|
|
Successor
|
|
|
Successor
|
||
(In $ millions)
|
|
As at June 30, 2019
|
|
|
|
As at December 31, 2018
|
|
Cash and cash equivalents
|
|
1,251
|
|
|
|
1,542
|
|
Restricted cash
|
|
218
|
|
|
|
461
|
|
Cash and cash equivalents, including restricted cash
|
|
1,469
|
|
|
|
2,003
|
|
|
|
Successor
|
|
|
Predecessor
|
||
(In $ millions)
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Cash flows from operating activities
|
|
(184
|
)
|
|
|
(132
|
)
|
Cash flows from investing activities
|
|
(11
|
)
|
|
|
149
|
|
Cash flows from financing activities
|
|
(343
|
)
|
|
|
(153
|
)
|
Effect of exchange rate changes in cash and cash equivalents
|
|
4
|
|
|
|
(5
|
)
|
Change in period
|
|
(534
|
)
|
|
|
(141
|
)
|
|
|
Successor
|
|
|
Predecessor
|
||
(In $ millions)
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Opening cash and cash equivalents, included restricted
|
|
2,003
|
|
|
|
1,359
|
|
Change in period
|
|
(534
|
)
|
|
|
(141
|
)
|
Closing cash and cash equivalents, included restricted
|
|
1,469
|
|
|
|
1,218
|
|
|
|
Successor
|
|
|
Predecessor
|
||
(In $ millions)
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Net loss
|
|
(502
|
)
|
|
|
(635
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities
(1)
|
|
434
|
|
|
|
629
|
|
Net loss after adjustments
|
|
(68
|
)
|
|
|
(6
|
)
|
Distributions received from associated company
|
|
2
|
|
|
|
17
|
|
Payments for long-term maintenance
|
|
(37
|
)
|
|
|
(78
|
)
|
Settlement of payment-in-kind interest on senior secured notes
|
|
(39
|
)
|
|
|
—
|
|
Changes in operating assets and liabilities
|
|
(42
|
)
|
|
|
(65
|
)
|
Net cash flows from operating activities
|
|
(184
|
)
|
|
|
(132
|
)
|
(1)
|
Includes depreciation, amortization, share of results of joint ventures and associates, unrealized gains and losses on derivatives, unrealized gains and losses on marketable securities, deferred tax expense and other non-cash items shown under the sub-heading "adjustments to reconcile net loss to net cash provided by operating activities" in the Consolidated Statements of Cash Flows presented in the Consolidated Financial Statements included in this report.
|
|
Payment due by period
|
|||||||||||||
|
Period ended June 30
|
|||||||||||||
(In $ millions)
|
2020
|
|
|
2021 - 2022
|
|
|
2023 - 2024
|
|
|
Thereafter
|
|
|
Total
|
|
Interest bearing debt
(1) (2)
|
185
|
|
|
1,297
|
|
|
3,007
|
|
|
2,276
|
|
|
6,765
|
|
Related party interest bearing debt
|
—
|
|
|
—
|
|
|
193
|
|
|
121
|
|
|
314
|
|
Total debt repayments
|
185
|
|
|
1,297
|
|
|
3,200
|
|
|
2,397
|
|
|
7,079
|
|
Pension obligations
(3)
|
2
|
|
|
5
|
|
|
5
|
|
|
12
|
|
|
24
|
|
Operating lease obligations
|
8
|
|
|
15
|
|
|
5
|
|
|
—
|
|
|
28
|
|
Total contractual obligations
|
195
|
|
|
1,317
|
|
|
3,210
|
|
|
2,409
|
|
|
7,131
|
|
(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.
Under the terms of the bank financing agreements we have the ability to defer up to $500 million of amortization payments (Amortization Conversion Election facility or "ACE") up to 120 days before such payment becomes due. The deferred amortization then becomes part of the balloon payment for each relevant facility. Based on the amortization schedule, the ACE has capacity to defer the first five quarters of amortization.
|
(3)
|
Pension obligations are the forecasted employer’s contributions to our defined benefit plans, expected to be made over the next ten years.
|
(In $ millions)
|
|
Principal outstanding
|
|
|
Hedging instruments - see below
|
|
|
Net exposure
|
|
|
Impact of 1% increase in rates - see below
|
|
Senior Credit Facilities
|
|
5,662
|
|
|
4,500
|
|
|
1,162
|
|
|
36
|
|
Debt contained within VIEs
|
|
645
|
|
|
—
|
|
|
645
|
|
|
6
|
|
Total floating rate debt obligations
|
|
6,307
|
|
|
4,500
|
|
|
1,807
|
|
|
42
|
|
Senior secured notes
(1)
|
|
458
|
|
|
—
|
|
|
N/A
|
|
|
—
|
|
Less: Cash and Restricted Cash
|
|
(1,469
|
)
|
|
—
|
|
|
(1,469
|
)
|
|
(15
|
)
|
Net debt
|
|
5,296
|
|
|
4,500
|
|
|
338
|
|
|
27
|
|
(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
|
|
|
(21
|
)
|
|
24
|
|
Senior Credit Facility debt - not hedged
|
|
1,162
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Total Senior Credit Facility Debt
|
|
5,662
|
|
|
57
|
|
|
(21
|
)
|
|
36
|
|
/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
|
Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2019 (Successor) and for the three and six months ended June 30, 2018 (Predecessor)
|
|
|
Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 (Successor) and for the three and six months ended June 30, 2018 (Predecessor)
|
|
|
Unaudited Consolidated Balance Sheets as at June 30, 2019 (Successor) and December 31, 2018 (Successor)
|
|
|
Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2019 (Successor) and the six months ended June 30, 2018 (Predecessor)
|
|
|
Unaudited Consolidated Statements of Changes in Shareholders' Equity for the six months ended June 30, 2019 (Successor) and the six months ended June 30, 2018 (Predecessor)
|
|
|
Notes to Unaudited Consolidated Financial Statements
|
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
Notes
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
||||
Contract revenues
|
|
253
|
|
|
|
311
|
|
|
508
|
|
|
|
619
|
|
Reimbursable revenues
|
*
|
44
|
|
|
|
9
|
|
|
70
|
|
|
|
21
|
|
Other revenues
|
*
|
24
|
|
|
|
28
|
|
|
45
|
|
|
|
72
|
|
Total operating revenues
|
|
321
|
|
|
|
348
|
|
|
623
|
|
|
|
712
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||
Vessel and rig operating expenses
|
*
|
(182
|
)
|
|
|
(224
|
)
|
|
(381
|
)
|
|
|
(407
|
)
|
Reimbursable expense
|
|
(43
|
)
|
|
|
(8
|
)
|
|
(69
|
)
|
|
|
(20
|
)
|
Depreciation
|
|
(104
|
)
|
|
|
(195
|
)
|
|
(212
|
)
|
|
|
(391
|
)
|
Amortization of intangibles
|
|
(38
|
)
|
|
|
—
|
|
|
(73
|
)
|
|
|
—
|
|
General and administrative expenses
|
|
(30
|
)
|
|
|
(49
|
)
|
|
(61
|
)
|
|
|
(100
|
)
|
Total operating expenses
|
|
(397
|
)
|
|
|
(476
|
)
|
|
(796
|
)
|
|
|
(918
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating items
|
|
|
|
|
|
|
|
|
|
|
||||
Impairment of long-lived assets
|
|
—
|
|
|
|
(414
|
)
|
|
—
|
|
|
|
(414
|
)
|
Other operating income
|
*
|
3
|
|
|
|
3
|
|
|
29
|
|
|
|
7
|
|
Total other operating items
|
|
3
|
|
|
|
(411
|
)
|
|
29
|
|
|
|
(407
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss
|
|
(73
|
)
|
|
|
(539
|
)
|
|
(144
|
)
|
|
|
(613
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial items and other income
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
*
|
19
|
|
|
|
9
|
|
|
39
|
|
|
|
19
|
|
Interest expenses
|
*
|
(122
|
)
|
|
|
(19
|
)
|
|
(254
|
)
|
|
|
(38
|
)
|
Share in results from associated companies
|
12
|
(23
|
)
|
|
|
141
|
|
|
(65
|
)
|
|
|
149
|
|
Loss on derivative financial instruments
|
|
(6
|
)
|
|
|
(1
|
)
|
|
(33
|
)
|
|
|
(4
|
)
|
Net loss on debt extinguishment
|
|
(22
|
)
|
|
|
—
|
|
|
(22
|
)
|
|
|
—
|
|
Foreign exchange gain/(loss)
|
|
4
|
|
|
|
(8
|
)
|
|
2
|
|
|
|
—
|
|
(Loss)/gain on marketable securities
|
9
|
(14
|
)
|
|
|
25
|
|
|
(35
|
)
|
|
|
(3
|
)
|
Other financial items
|
*
|
1
|
|
|
|
(1
|
)
|
|
(2
|
)
|
|
|
—
|
|
Reorganization items
|
|
—
|
|
|
|
(35
|
)
|
|
—
|
|
|
|
(109
|
)
|
Total financial items and other non-operating items
|
|
(163
|
)
|
|
|
111
|
|
|
(370
|
)
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before income taxes
|
|
(236
|
)
|
|
|
(428
|
)
|
|
(514
|
)
|
|
|
(599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Income tax benefit / (expense)
|
|
30
|
|
|
|
(4
|
)
|
|
12
|
|
|
|
(36
|
)
|
Net loss
|
|
(206
|
)
|
|
|
(432
|
)
|
|
(502
|
)
|
|
|
(635
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to shareholder
|
|
(203
|
)
|
|
|
(296
|
)
|
|
(498
|
)
|
|
|
(477
|
)
|
Net loss attributable to non-controlling interest
|
|
(2
|
)
|
|
|
(138
|
)
|
|
(2
|
)
|
|
|
(160
|
)
|
Net (loss)/income attributable to redeemable non-controlling interest
|
|
(1
|
)
|
|
|
2
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic loss per share (US dollar)
|
|
(2.03
|
)
|
|
|
(0.59
|
)
|
|
(4.98
|
)
|
|
|
(0.95
|
)
|
Diluted loss per share (US dollar)
|
|
(2.03
|
)
|
|
|
(0.59
|
)
|
|
(4.98
|
)
|
|
|
(0.95
|
)
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
(206
|
)
|
|
|
(432
|
)
|
|
(502
|
)
|
|
|
(635
|
)
|
Other comprehensive (loss)/income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Change in fair value of debt component of Archer convertible bond
|
|
1
|
|
|
|
2
|
|
|
6
|
|
|
|
2
|
|
Actuarial gain relating to pension
|
|
—
|
|
|
|
1
|
|
|
—
|
|
|
|
1
|
|
Share of other comprehensive (loss)/income from associated companies
|
|
(5
|
)
|
|
|
2
|
|
|
(9
|
)
|
|
|
11
|
|
Other comprehensive (loss)/income:
|
|
(4
|
)
|
|
|
5
|
|
|
(3
|
)
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive loss for the period
|
|
(210
|
)
|
|
|
(427
|
)
|
|
(505
|
)
|
|
|
(621
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive loss attributable to the shareholder
|
|
(207
|
)
|
|
|
(291
|
)
|
|
(501
|
)
|
|
|
(463
|
)
|
Comprehensive loss attributable to the non-controlling interest
|
|
(2
|
)
|
|
|
(138
|
)
|
|
(2
|
)
|
|
|
(160
|
)
|
Comprehensive (loss)/income attributable to the redeemable non-controlling interest
|
|
(1
|
)
|
|
|
2
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
Successor
|
|
Successor
|
||
(In $ millions)
|
Notes
|
June 30,
2019 |
|
|
December 31,
2018 |
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
1,251
|
|
|
1,542
|
|
Restricted cash
|
8
|
132
|
|
|
461
|
|
Marketable securities
|
9
|
22
|
|
|
57
|
|
Accounts receivable, net
|
10
|
228
|
|
|
208
|
|
Amounts due from related parties
|
24
|
141
|
|
|
177
|
|
Other current assets
|
11
|
253
|
|
|
322
|
|
Total current assets
|
|
2,027
|
|
|
2,767
|
|
Non-current assets
|
|
|
|
|
|
|
Investment in associated companies
|
12
|
724
|
|
|
800
|
|
Drilling units
|
13
|
6,513
|
|
|
6,659
|
|
Restricted cash
|
8
|
86
|
|
|
—
|
|
Deferred tax assets
|
6
|
4
|
|
|
18
|
|
Equipment
|
14
|
27
|
|
|
29
|
|
Amounts due from related parties
|
24
|
545
|
|
|
539
|
|
Other non-current assets
|
11
|
46
|
|
|
36
|
|
Total non-current assets
|
|
7,945
|
|
|
8,081
|
|
Total assets
|
|
9,972
|
|
|
10,848
|
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Debt due within one year
|
15
|
185
|
|
|
33
|
|
Trade accounts payable
|
|
90
|
|
|
82
|
|
Amounts due to related parties
|
24
|
12
|
|
|
39
|
|
Other current liabilities
|
16
|
288
|
|
|
310
|
|
Total current liabilities
|
|
575
|
|
|
464
|
|
Non-current liabilities
|
|
|
|
|
|
|
Long-term debt
|
15
|
6,426
|
|
|
6,881
|
|
Long-term debt due to related parties
|
24
|
232
|
|
|
222
|
|
Deferred tax liabilities
|
6
|
47
|
|
|
87
|
|
Other non-current liabilities
|
16
|
122
|
|
|
121
|
|
Total non-current liabilities
|
|
6,827
|
|
|
7,311
|
|
Commitments and contingencies (see note 25)
|
|
|
|
|
|
|
Redeemable non-controlling interest
|
20
|
37
|
|
|
38
|
|
Equity
|
|
|
|
|
|
|
Common shares of par value $0.10 per share: 138,880,000 shares authorized and 100,000,000 issued at June 30, 2019 (Common shares of par value $0.10 per share: 111,000,000 shares authorized and 100,000,000 issued at December 31, 2018)
|
18
|
10
|
|
|
10
|
|
Additional paid-in capital
|
|
3,493
|
|
|
3,491
|
|
Accumulated other comprehensive loss
|
|
(10
|
)
|
|
(7
|
)
|
Retained loss
|
|
(1,110
|
)
|
|
(611
|
)
|
Total shareholders' equity
|
|
2,383
|
|
|
2,883
|
|
Non-controlling interest
|
19
|
150
|
|
|
152
|
|
Total equity
|
|
2,533
|
|
|
3,035
|
|
Total liabilities, redeemable non-controlling interest and equity
|
|
9,972
|
|
|
10,848
|
|
|
|
Successor
|
|
|
Predecessor
|
||
(In $ millions)
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
||
Net loss
|
|
(502
|
)
|
|
|
(635
|
)
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
|
212
|
|
|
|
391
|
|
Amortization of unfavorable and favorable contracts
|
|
73
|
|
|
|
(21
|
)
|
Share of results from associated companies
|
|
65
|
|
|
|
(149
|
)
|
Share-based compensation expense
|
|
2
|
|
|
|
3
|
|
Contingent consideration recognized
|
|
—
|
|
|
|
(7
|
)
|
Unrealized loss related to derivative financial instruments
|
|
33
|
|
|
|
4
|
|
Loss on impairment of long-lived assets
|
|
—
|
|
|
|
414
|
|
Deferred tax (benefit) expense
|
|
(26
|
)
|
|
|
(9
|
)
|
Unrealized loss on marketable securities
|
|
35
|
|
|
|
3
|
|
Net loss on debt extinguishment
|
|
22
|
|
|
|
—
|
|
Amortization of discount on debt
|
|
18
|
|
|
|
—
|
|
Other cash movements in operating activities
|
|
|
|
|
|
||
Distributions received from associated company
|
|
2
|
|
|
|
17
|
|
Payments for long-term maintenance
|
|
(37
|
)
|
|
|
(78
|
)
|
Settlement of payment-in-kind interest on senior secured notes
|
|
(39
|
)
|
|
|
—
|
|
Changes in operating assets and liabilities, net of effect of acquisitions and disposals
|
|
|
|
|
|
|
|
Trade accounts receivable
|
|
(20
|
)
|
|
|
29
|
|
Trade accounts payable
|
|
8
|
|
|
|
4
|
|
Prepaid expenses
|
|
3
|
|
|
|
42
|
|
Related party receivables
|
|
20
|
|
|
|
(13
|
)
|
Related party payables
|
|
(17
|
)
|
|
|
(42
|
)
|
Other assets
|
|
(46
|
)
|
|
|
(62
|
)
|
Other liabilities
|
|
4
|
|
|
|
1
|
|
Deferred revenue
|
|
8
|
|
|
|
(23
|
)
|
Other, net
|
|
(2
|
)
|
|
|
(1
|
)
|
Net cash flows from operating activities
|
|
(184
|
)
|
|
|
(132
|
)
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
Additions to newbuildings
|
|
—
|
|
|
|
(1
|
)
|
Additions to drilling units and equipment
|
|
(27
|
)
|
|
|
(48
|
)
|
Contingent consideration received
|
|
16
|
|
|
|
48
|
|
Proceeds from disposal of drilling units
|
|
—
|
|
|
|
126
|
|
Payments received from loans granted to related parties
|
|
—
|
|
|
|
24
|
|
Net cash flows from investing activities
|
|
(11
|
)
|
|
|
149
|
|
|
|
Successor
|
|
|
Predecessor
|
||
(In $ millions)
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
||
Cash Flows from Financing Activities
|
|
|
|
|
|
||
Repayments of secured credit facilities
|
|
(10
|
)
|
|
|
(153
|
)
|
Redemption of senior secured notes
|
|
(333
|
)
|
|
|
—
|
|
Net cash used in financing activities
|
|
(343
|
)
|
|
|
(153
|
)
|
Effect of exchange rate changes on cash
|
|
4
|
|
|
|
(5
|
)
|
Net decrease in cash and cash equivalents, including restricted cash
|
|
(534
|
)
|
|
|
(141
|
)
|
Cash and cash equivalents, including restricted cash, at beginning of the period
|
|
2,003
|
|
|
|
1,359
|
|
Cash and cash equivalents, including restricted cash, at the end of period
|
|
1,469
|
|
|
|
1,218
|
|
|
|
|
|
|
|
||
Supplementary disclosure of cash flow information
|
|
|
|
|
|
||
Interest paid, net of capitalized interest
|
|
(219
|
)
|
|
|
(38
|
)
|
Taxes paid
|
|
(25
|
)
|
|
|
(22
|
)
|
(In $ millions)
|
|
Common shares
|
|
Additional paid-in capital
|
|
Contributed surplus
|
|
Accumulated
other comprehensive loss
|
|
Retained loss
|
|
Total equity before NCI
|
|
NCI
|
|
Total
equity
|
||||||||
Balance at January 1, 2018 (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 2014-09 - Revenue from contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Share-based compensation charge
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(181
|
)
|
|
(181
|
)
|
|
(22
|
)
|
|
(203
|
)
|
Balance at March 31, 2018 (Predecessor)
|
|
1,008
|
|
|
3,315
|
|
|
1,956
|
|
|
36
|
|
|
23
|
|
|
6,338
|
|
|
352
|
|
|
6,690
|
|
Share-based compensation charge
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Reclassification to redeemable non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
(150
|
)
|
Fair Value adjustment AOD Redeemable NCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
127
|
|
|
—
|
|
|
127
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(296
|
)
|
|
(296
|
)
|
|
(138
|
)
|
|
(434
|
)
|
Balance at June 30, 2018 (Predecessor)
|
|
1,008
|
|
|
3,316
|
|
|
1,956
|
|
|
41
|
|
|
(146
|
)
|
|
6,175
|
|
|
64
|
|
|
6,239
|
|
(In $ millions)
|
|
Common shares
|
|
Additional paid-in capital
|
|
Contributed surplus
|
|
Accumulated
other comprehensive loss |
|
Retained loss
|
|
Total equity before NCI
|
|
NCI
|
|
Total
equity |
||||||||
Balance at January 1, 2019 (Successor)
|
|
10
|
|
|
3,491
|
|
|
—
|
|
|
(7
|
)
|
|
(611
|
)
|
|
2,883
|
|
|
152
|
|
|
3,035
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Share-based compensation charge
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Fair Value adjustment AOD Redeemable NCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(295
|
)
|
|
(295
|
)
|
|
—
|
|
|
(295
|
)
|
Balance at March 31, 2019 (Successor)
|
|
10
|
|
|
3,492
|
|
|
—
|
|
|
(6
|
)
|
|
(907
|
)
|
|
2,589
|
|
|
152
|
|
|
2,741
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
Share-based compensation charge
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(203
|
)
|
|
(203
|
)
|
|
(2
|
)
|
|
(205
|
)
|
Balance at June 30, 2019 (Successor)
|
|
10
|
|
|
3,493
|
|
|
—
|
|
|
(10
|
)
|
|
(1,110
|
)
|
|
2,383
|
|
|
150
|
|
|
2,533
|
|
•
|
ASU 2018-07 Compensation - Stock compensation (Topic 718)
|
•
|
ASU 2018-16 Derivatives and Hedging (Topic 815)
|
•
|
14.25%
of the New Common Shares issued to holders of unsecured claims against the Company and certain of its Chapter 11 debtor affiliates;
|
•
|
23.75%
of the New Common Shares issued to participants in the
$200 million
equity investment under the Plan;
|
•
|
54.625%
of the New Common Shares issued to participants in the
$880 million
senior secured notes investment under the Plan;
|
•
|
1.9%
of the New Common Shares issued to holders of existing common equity interest in the Company as of the Effective Date, an effective exchange ratio of approximately
0.0037345
New Common Shares per each Existing Share; and
|
•
|
5.475%
of the New Common Shares issued as a structuring fee to certain of the new money investors.
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Advisory and professional fees
|
|
—
|
|
|
|
(40
|
)
|
|
—
|
|
|
|
(115
|
)
|
Interest income on surplus cash invested
|
|
—
|
|
|
|
5
|
|
|
—
|
|
|
|
6
|
|
Total reorganization items
|
|
—
|
|
|
|
(35
|
)
|
|
—
|
|
|
|
(109
|
)
|
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-ups: 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
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
174
|
|
|
|
243
|
|
|
355
|
|
|
|
482
|
|
Jack-ups
|
|
89
|
|
|
|
89
|
|
|
172
|
|
|
|
193
|
|
Other
|
|
58
|
|
|
|
16
|
|
|
96
|
|
|
|
37
|
|
Total operating revenues
|
|
321
|
|
|
|
348
|
|
|
623
|
|
|
|
712
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
85
|
|
|
|
149
|
|
|
174
|
|
|
|
298
|
|
Jack-ups
|
|
19
|
|
|
|
46
|
|
|
38
|
|
|
|
93
|
|
Total
|
|
104
|
|
|
|
195
|
|
|
212
|
|
|
|
391
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
27
|
|
|
|
—
|
|
|
51
|
|
|
|
—
|
|
Jack-ups
|
|
11
|
|
|
|
—
|
|
|
22
|
|
|
|
—
|
|
Total
|
|
38
|
|
|
|
—
|
|
|
73
|
|
|
|
—
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
(79
|
)
|
|
|
(385
|
)
|
|
(166
|
)
|
|
|
(446
|
)
|
Jack-ups
|
|
4
|
|
|
|
(152
|
)
|
|
18
|
|
|
|
(167
|
)
|
Other
|
|
2
|
|
|
|
(2
|
)
|
|
4
|
|
|
|
—
|
|
Operating loss
|
|
(73
|
)
|
|
|
(539
|
)
|
|
(144
|
)
|
|
|
(613
|
)
|
Unallocated items:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total financial items and other
|
|
(163
|
)
|
|
|
111
|
|
|
(370
|
)
|
|
|
14
|
|
Income taxes
|
|
30
|
|
|
|
(4
|
)
|
|
12
|
|
|
|
(36
|
)
|
Net loss
|
|
(206
|
)
|
|
|
(432
|
)
|
|
(502
|
)
|
|
|
(635
|
)
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
|
|
|
|
|
||
Floaters
|
|
5,377
|
|
|
5,508
|
|
Jack-ups
|
|
1,136
|
|
|
1,151
|
|
Total drilling units
|
|
6,513
|
|
|
6,659
|
|
|
|
|
|
|
||
Unallocated items:
|
|
|
|
|
||
Investments in associated companies
|
|
724
|
|
|
800
|
|
Marketable securities
|
|
22
|
|
|
57
|
|
Cash and restricted cash
|
|
1,469
|
|
|
2,003
|
|
Other assets
|
|
1,244
|
|
|
1,329
|
|
Total assets
|
|
9,972
|
|
|
10,848
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Floaters
|
|
30
|
|
|
|
49
|
|
|
48
|
|
|
|
93
|
|
Jack-ups
|
|
10
|
|
|
|
12
|
|
|
16
|
|
|
|
24
|
|
Total
|
|
40
|
|
|
|
61
|
|
|
64
|
|
|
|
117
|
|
(In $ millions)
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
Three months ended June 30, 2019
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
|||
Norway
|
|
102
|
|
|
|
26
|
|
|
169
|
|
|
|
82
|
|
Nigeria
|
|
53
|
|
|
|
61
|
|
|
104
|
|
|
|
105
|
|
Brazil
|
|
51
|
|
|
|
87
|
|
|
93
|
|
|
|
188
|
|
Saudi Arabia
|
|
35
|
|
|
|
40
|
|
|
69
|
|
|
|
79
|
|
United States
|
|
14
|
|
|
|
15
|
|
|
31
|
|
|
|
30
|
|
Angola
|
|
34
|
|
|
|
49
|
|
|
49
|
|
|
|
100
|
|
Others
(1)
|
|
32
|
|
|
|
70
|
|
|
108
|
|
|
|
128
|
|
Total
|
|
321
|
|
|
|
348
|
|
|
623
|
|
|
|
712
|
|
(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
|
|
|
Successor
|
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31,
2018 |
|
|
Norway
|
|
1,597
|
|
|
1,326
|
|
|
Malaysia
|
|
822
|
|
|
1,070
|
|
|
Spain
|
|
561
|
|
|
875
|
|
|
Brazil
|
|
671
|
|
|
688
|
|
|
United States
|
|
646
|
|
|
658
|
|
|
Other
(2)
|
|
2,216
|
|
|
2,042
|
|
|
Total
|
|
6,513
|
|
|
6,659
|
|
(1)
|
The countries in this table represent the location of the drilling unit at the end of the reporting period and are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by the assets during the period. In most cases these locations are different to the country in which the Company that owns the drilling unit is registered.
|
(2)
|
"Other" represents countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented.
|
(In $ millions)
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
Three months ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
||
Total
|
|
26
|
%
|
|
|
23
|
%
|
|
25
|
%
|
|
|
20
|
%
|
Equinor
|
|
17
|
%
|
|
|
9
|
%
|
|
20
|
%
|
|
|
6
|
%
|
Petrobras
|
|
16
|
%
|
|
|
26
|
%
|
|
15
|
%
|
|
|
27
|
%
|
ConocoPhillips
|
|
15
|
%
|
|
|
5
|
%
|
|
15
|
%
|
|
|
9
|
%
|
Saudi Aramco
|
|
14
|
%
|
|
|
12
|
%
|
|
14
|
%
|
|
|
12
|
%
|
ExxonMobil
|
|
—
|
%
|
|
|
9
|
%
|
|
—
|
%
|
|
|
11
|
%
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Accounts receivable, net
|
|
228
|
|
|
208
|
|
Current contract assets
(1)
|
|
—
|
|
|
1
|
|
Non-current contract assets
|
|
—
|
|
|
—
|
|
Current contract liabilities (deferred revenue)
(1)
|
|
(24
|
)
|
|
(12
|
)
|
Non-current contract liabilities (deferred revenue)
|
|
(7
|
)
|
|
(9
|
)
|
(1)
|
Current contract assets and liabilities balances are included in “other current assets” and “other current liabilities,” respectively in our unaudited Consolidated Balance Sheet.
|
(In $ millions)
|
|
Contract Assets
|
|
Contract Liabilities
|
|
Net Contract
Balances |
|||
Net contract liability at January 1, 2018 (Predecessor)
|
|
7
|
|
|
(55
|
)
|
|
(48
|
)
|
Amortization of revenue that was included in the beginning contract liability balance
|
|
—
|
|
|
25
|
|
|
25
|
|
Cash received, excluding amounts recognized as revenue
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
Cash received against the beginning contract asset balance
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
Contract assets recognized during the period
|
|
9
|
|
|
—
|
|
|
9
|
|
Net contract liability at June 30, 2018 (Predecessor)
|
|
9
|
|
|
(32
|
)
|
|
(23
|
)
|
(In $ millions)
|
|
Contract Assets
|
|
Contract Liabilities
|
|
Net Contract
Balances |
|||
Net contract liability at January 1, 2019 (Successor)
|
|
1
|
|
|
(21
|
)
|
|
(20
|
)
|
Amortization of revenue that was included in the beginning contract liability balance
|
|
—
|
|
|
3
|
|
|
3
|
|
Cash received, excluding amounts recognized as revenue
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
Cash received against the beginning contract asset balance
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
Contract assets recognized during the period
|
|
—
|
|
|
—
|
|
|
—
|
|
Net contract liability at June 30, 2019 (Successor)
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
(In $ millions)
|
|
Net deferred contract costs
|
|
As at January 1, 2018 (Predecessor)
|
|
20
|
|
Additional deferred contract costs
|
|
6
|
|
Amortization of deferred contract costs
|
|
(15
|
)
|
As at June 30, 2018 (Predecessor)
|
|
11
|
|
(In $ millions)
|
|
Net deferred contract costs
|
|
As at January 1, 2019 (Successor)
|
|
15
|
|
Additional deferred contract costs
|
|
27
|
|
Amortization of deferred contract costs
|
|
(22
|
)
|
As at June 30, 2019 (Successor)
|
|
20
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Net loss attributable to shareholder
|
|
(203
|
)
|
|
|
(296
|
)
|
|
(498
|
)
|
|
|
(477
|
)
|
Effect of dilution
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Diluted net loss available to shareholders
|
|
(203
|
)
|
|
|
(296
|
)
|
|
(498
|
)
|
|
|
(477
|
)
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In millions)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding
|
|
100
|
|
|
|
504
|
|
|
100
|
|
|
|
504
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Effect of dilution
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
Weighted average number of common shares outstanding adjusted for the effects of dilution
|
|
100
|
|
|
|
504
|
|
|
100
|
|
|
|
504
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $)
|
|
Three Months Ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Basic loss per share
|
|
(2.03
|
)
|
|
|
(0.59
|
)
|
|
(4.98
|
)
|
|
|
(0.95
|
)
|
Diluted loss per share
|
|
(2.03
|
)
|
|
|
(0.59
|
)
|
|
(4.98
|
)
|
|
|
(0.95
|
)
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Accounts pledged as collateral for senior secured notes
(1)
|
|
—
|
|
|
328
|
|
Accounts pledged as collateral for performance bonds and similar guarantees
|
|
103
|
|
|
101
|
|
Demand deposit pledged as collateral for tax related guarantee
(2)
|
|
86
|
|
|
—
|
|
Other
|
|
29
|
|
|
32
|
|
Total restricted cash
|
|
218
|
|
|
461
|
|
(1)
|
The balance of this account was used to repurchase senior secured notes on April 10, 2019 (see note 15 - Debt for further details).
|
(2)
|
We placed a total of
$86 million
of collateral with BTG Bank under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts.
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Current restricted cash
|
|
132
|
|
|
461
|
|
Non-current restricted cash
|
|
86
|
|
|
—
|
|
Total restricted cash
|
|
218
|
|
|
461
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Seadrill Partners - Common units
|
|
9
|
|
|
45
|
|
Archer
|
|
13
|
|
|
12
|
|
Total marketable securities
|
|
22
|
|
|
57
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three Months Ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Seadrill Partners - Common units
|
|
(13
|
)
|
|
|
19
|
|
|
(36
|
)
|
|
|
(5
|
)
|
Archer
|
|
(1
|
)
|
|
|
6
|
|
|
1
|
|
|
|
2
|
|
Total (loss)/gain on marketable securities
|
|
(14
|
)
|
|
|
25
|
|
|
(35
|
)
|
|
|
(3
|
)
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Favorable drilling and management service contracts
|
|
97
|
|
|
186
|
|
Taxes receivable
|
|
55
|
|
|
50
|
|
Prepaid expenses
|
|
29
|
|
|
32
|
|
Right of use asset
|
|
20
|
|
|
—
|
|
Reimbursable amounts due from customers
|
|
27
|
|
|
10
|
|
Deferred contract costs
|
|
19
|
|
|
15
|
|
Derivative asset - interest rate cap
|
|
7
|
|
|
39
|
|
Insurance receivable
(1)
|
|
23
|
|
|
1
|
|
Other
|
|
22
|
|
|
25
|
|
Total other assets
|
|
299
|
|
|
358
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Other current assets
|
|
253
|
|
|
322
|
|
Other non-current assets
|
|
46
|
|
|
36
|
|
Total other assets
|
|
299
|
|
|
358
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Seadrill Partners - Direct ownership interests
|
|
410
|
|
|
479
|
|
Seadrill Partners subsidiaries - Subordinated units
|
|
6
|
|
|
17
|
|
Seadrill Partners subsidiaries - IDRs
(1)
|
|
54
|
|
|
54
|
|
Seabras Sapura
|
|
94
|
|
|
77
|
|
Seabras Sapura - Shareholder loans
(1)
|
|
132
|
|
|
132
|
|
SeaMex
|
|
28
|
|
|
41
|
|
Total investment in associated companies
|
|
724
|
|
|
800
|
|
(In $ millions)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Net book value
|
|
As at January 1, 2018 (Predecessor)
|
|
17,335
|
|
|
(4,119
|
)
|
|
13,216
|
|
Additions
|
|
117
|
|
|
—
|
|
|
117
|
|
Depreciation
|
|
—
|
|
|
(388
|
)
|
|
(388
|
)
|
Impairment
|
|
(414
|
)
|
|
—
|
|
|
(414
|
)
|
As at June 30, 2018 (Predecessor)
|
|
17,038
|
|
|
(4,507
|
)
|
|
12,531
|
|
(In $ millions)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Net book value
|
|
As at January 1, 2019 (Successor)
|
|
6,890
|
|
|
(231
|
)
|
|
6,659
|
|
Additions
|
|
61
|
|
|
—
|
|
|
61
|
|
Depreciation
|
|
—
|
|
|
(207
|
)
|
|
(207
|
)
|
As at June 30, 2019 (Successor)
|
|
6,951
|
|
|
(438
|
)
|
|
6,513
|
|
(In $ millions)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Net book value
|
|
As at January 1, 2018 (Predecessor)
|
|
84
|
|
|
(55
|
)
|
|
29
|
|
Additions
|
|
9
|
|
|
—
|
|
|
9
|
|
Depreciation
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
As at June 30, 2018 (Predecessor)
|
|
93
|
|
|
(58
|
)
|
|
35
|
|
(In $ millions)
|
|
Cost
|
|
|
Accumulated depreciation
|
|
|
Net book value
|
|
As at January 1, 2019 (Successor)
|
|
34
|
|
|
(5
|
)
|
|
29
|
|
Additions
|
|
3
|
|
|
—
|
|
|
3
|
|
Depreciation
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
As at June 30, 2019 (Successor)
|
|
37
|
|
|
(10
|
)
|
|
27
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Secured credit facilities
|
|
5,662
|
|
|
5,662
|
|
Senior secured notes
|
|
458
|
|
|
769
|
|
Credit facilities contained within variable interest entities
|
|
645
|
|
|
655
|
|
Total debt principal
|
|
6,765
|
|
|
7,086
|
|
Less: debt discount and fees
|
|
(154
|
)
|
|
(172
|
)
|
Carrying value
|
|
6,611
|
|
|
6,914
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Debt due within one year
|
|
185
|
|
|
33
|
|
Long-term debt
|
|
6,426
|
|
|
6,881
|
|
Total debt principal
|
|
6,611
|
|
|
6,914
|
|
|
|
Successor
|
|
(In $ millions)
|
|
Year ended June 30,
|
|
2020
|
|
185
|
|
2021
|
|
530
|
|
2022
|
|
767
|
|
2023
|
|
1,658
|
|
2024
|
|
1,349
|
|
2025 and thereafter
|
|
2,276
|
|
Total debt principal
(1) (2)
|
|
6,765
|
|
(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.
Under the terms of the bank financing agreements, we have the ability to defer up to
$500 million
of amortization payments (Amortization Conversion Election facility or "ACE") up to
120 days
before such payment becomes due. The deferred amortization then becomes part of the balloon payment for each relevant facility. Based on the amortization schedule, the ACE has capacity to defer the first five quarters of amortization.
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Taxes payable
|
|
42
|
|
|
42
|
|
Contract liabilities
|
|
31
|
|
|
21
|
|
Unfavorable drilling contracts
|
|
11
|
|
|
27
|
|
Employee withheld taxes, social security and vacation payments
|
|
39
|
|
|
40
|
|
Accrued interest expense
|
|
38
|
|
|
61
|
|
Accrued expenses
|
|
110
|
|
|
107
|
|
Lease liabilities
|
|
22
|
|
|
—
|
|
Uncertain tax positions
|
|
87
|
|
|
100
|
|
Other liabilities
|
|
30
|
|
|
33
|
|
Total Other Liabilities
|
|
410
|
|
|
431
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Other current liabilities
|
|
288
|
|
|
310
|
|
Other non-current liabilities
|
|
122
|
|
|
121
|
|
Total Other Liabilities
|
|
410
|
|
|
431
|
|
1.
|
We apply judgment in determination whether a contract contains a lease or a lease component as defined by Topic 842.
|
2.
|
We have elected to combine leases and non-lease components. As a result, we do not allocate our consideration between leases and non-lease components.
|
3.
|
The discount rate applied to our operating leases is our incremental borrowing rate. We estimated our incremental borrowing rate based on the rate for our traded debt.
|
4.
|
Within the terms and conditions of some of our operating leases we have options to extend or terminate the lease. In instances where we are reasonably certain to exercise available options to extend or terminate, then the option was included in determining the appropriate lease term to apply.
Options to renew our lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that we will exercise that option.
|
|
|
Successor
|
|
(In $ millions)
|
|
Year ended June 30,
|
|
2020
|
|
8
|
|
2021
|
|
8
|
|
2022
|
|
7
|
|
2023
|
|
3
|
|
2024 and thereafter
|
|
2
|
|
Total
|
|
28
|
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
Total undiscounted cash flows
|
|
28
|
|
Less short term leases
|
|
1
|
|
Less discount
|
|
(7
|
)
|
Operating lease liability
|
|
22
|
|
Of which:
|
|
|
|
Current
|
|
7
|
|
Non-current
|
|
15
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ million)
|
|
Three Months Ended June 30, 2019
|
|
|
Six months ended June 30, 2019
|
|
Operating Lease Cost:
|
|
|
|
|
||
Operating lease cost
|
|
5
|
|
|
7
|
|
Short-term lease cost
|
|
—
|
|
|
1
|
|
Total Lease cost
|
|
5
|
|
|
8
|
|
|
|
|
|
|
||
Other information:
|
|
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows
|
|
5
|
|
|
8
|
|
Right-of-use assets obtained in exchange for operating lease liabilities during the period
|
|
—
|
|
|
1
|
|
Weighted-average remaining lease term in months
|
|
20
|
|
|
20
|
|
Weighted-average discount rate
|
|
13
|
%
|
|
13
|
%
|
|
|
Successor
|
|
(In $ millions)
|
|
Year ended June 30,
|
|
2020
|
|
1
|
|
2021
|
|
1
|
|
2022
|
|
1
|
|
2023
|
|
—
|
|
2024 and thereafter
|
|
—
|
|
Total
|
|
3
|
|
|
|
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, 2018, March 31, 2018 and June 30, 2018 (Predecessor)
|
|
—
|
|
|
—
|
|
|
508,763,020
|
|
|
1,017
|
|
|
(4,244,080
|
)
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
At January 1, 2019, March 31, 2019 and June 30, 2019 (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
|
||||||
As at January 1, 2018 (Predecessor)
|
|
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
|
|
(17
|
)
|
|
(10
|
)
|
|
—
|
|
|
4
|
|
|
1
|
|
|
(22
|
)
|
As at March 31, 2018 (Predecessor)
|
|
34
|
|
|
216
|
|
|
149
|
|
|
(55
|
)
|
|
8
|
|
|
352
|
|
Net income attributable to non-controlling interest
|
|
(143
|
)
|
|
—
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
(138
|
)
|
Redeemable non-controlling interest
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
As at June 30, 2018 (Predecessor)
|
|
(109
|
)
|
|
216
|
|
|
—
|
|
|
(52
|
)
|
|
9
|
|
|
64
|
|
(In $ millions)
|
|
Ship Finance International Ltd VIEs
|
|
Seadrill Nigeria Operations Limited
|
|
Total
|
|||
As at January 1, 2019 (Successor) and March 31, 2019 (Successor)
|
|
145
|
|
|
7
|
|
|
152
|
|
Net income attributable to non-controlling interest
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
As at June 30, 2019 (Successor)
|
|
143
|
|
|
7
|
|
|
150
|
|
(In $ millions)
|
|
Asia Offshore Drilling Ltd
|
|
As at December 31, 2017 (Predecessor) and March 31, 2018 (Predecessor)
|
|
—
|
|
Reclassification from non-controlling interest
|
|
150
|
|
Net loss attributable to redeemable non-controlling interest in the period
|
|
2
|
|
Fair value adjustment
|
|
(127
|
)
|
As at June 30, 2018 (Predecessor)
|
|
25
|
|
(In $ millions)
|
|
Asia Offshore Drilling Ltd
|
|
As at December 31, 2018 (Successor)
|
|
38
|
|
Net loss attributable to redeemable non-controlling interest in the period
|
|
(1
|
)
|
Fair value adjustment
|
|
1
|
|
As at March 31, 2019 (Successor)
|
|
38
|
|
Net loss attributable to redeemable non-controlling interest in the period
|
|
(1
|
)
|
As at June 30, 2019 (Successor)
|
|
37
|
|
(In $ millions)
|
|
Unrealized gain on marketable securities
|
|
|
Unrealized gain on foreign exchange
|
|
|
Actuarial (loss) / gain relating to pension
|
|
|
Share in unrealized gain from associated companies
|
|
|
Change in unrealized gain on interest rate swaps in VIEs
|
|
|
Change in debt component on Archer facility
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2018 (Predecessor)
|
|
31
|
|
|
36
|
|
|
(26
|
)
|
|
15
|
|
|
2
|
|
|
—
|
|
|
58
|
|
Adoption of new accounting standard ASU 2016-01 - Financial Instruments
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
As at March 31, 2018 (Predecessor)
|
|
—
|
|
|
36
|
|
|
(26
|
)
|
|
24
|
|
|
2
|
|
|
—
|
|
|
36
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
5
|
|
As at June 30, 2018 (Predecessor)
|
|
—
|
|
|
36
|
|
|
(25
|
)
|
|
26
|
|
|
2
|
|
|
2
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2019 (Successor)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(5
|
)
|
|
—
|
|
|
(3
|
)
|
|
(7
|
)
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
5
|
|
|
1
|
|
As at March 31, 2019 (Successor)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(9
|
)
|
|
—
|
|
|
2
|
|
|
(6
|
)
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
1
|
|
|
(4
|
)
|
As at June 30, 2019 (Successor)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(14
|
)
|
|
—
|
|
|
3
|
|
|
(10
|
)
|
(In $ millions)
|
|
Principal outstanding
|
|
|
Hedging instruments - see below
|
|
|
Net exposure
|
|
|
Impact of 1% increase in rates - see below
|
|
Senior Credit Facilities
|
|
5,662
|
|
|
4,500
|
|
|
1,162
|
|
|
36
|
|
Debt contained within VIEs
|
|
645
|
|
|
—
|
|
|
645
|
|
|
6
|
|
Total floating rate debt obligations
|
|
6,307
|
|
|
4,500
|
|
|
1,807
|
|
|
42
|
|
Senior secured notes
(1)
|
|
458
|
|
|
—
|
|
|
N/A
|
|
|
—
|
|
Less: Cash and Restricted Cash
|
|
(1,469
|
)
|
|
—
|
|
|
(1,469
|
)
|
|
(15
|
)
|
Net debt
|
|
5,296
|
|
|
4,500
|
|
|
338
|
|
|
27
|
|
(In $ millions)
|
|
Amount
|
|
|
Impact of 1% point increase in rates (before impact of interest rate cap)
|
|
|
Less: impact of interest rate cap
|
|
|
Impact of 1% point increase in rates (after impact of interest rate cap)
|
|
|
|
|
|
|
|
|
|
|
||||
Senior Credit Facility debt - hedged
|
|
4,500
|
|
|
45
|
|
|
(21
|
)
|
|
24
|
|
Senior Credit Facility debt - not hedged
|
|
1,162
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Total Senior Credit Facility Debt
|
|
5,662
|
|
|
57
|
|
|
(21
|
)
|
|
36
|
|
(In $ millions)
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(Loss)/gain recognized in the Consolidated Statement of Operations relating to derivative financial instruments
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Interest rate cap agreement
|
|
(6
|
)
|
|
|
(7
|
)
|
|
(33
|
)
|
|
|
(7
|
)
|
Archer convertible debt instrument
|
|
—
|
|
|
|
7
|
|
|
—
|
|
|
|
4
|
|
Interest rate swap agreements not qualified as hedge accounting
|
|
—
|
|
|
|
(1
|
)
|
|
—
|
|
|
|
(1
|
)
|
Loss on derivative financial instruments
|
|
(6
|
)
|
|
|
(1
|
)
|
|
(33
|
)
|
|
|
(4
|
)
|
|
|
Successor
|
|
Successor
|
||||||||
|
|
As at June 30, 2019
|
|
As at December 31, 2018
|
||||||||
(In $ millions)
|
|
Fair
value
|
|
|
Carrying
value
|
|
|
Fair
value
|
|
|
Carrying
value
|
|
Assets
|
|
|
|
|
|
|
|
|
||||
Related party loans receivable
(1)
(Level 2)
|
|
489
|
|
|
489
|
|
|
476
|
|
|
476
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||
Secured credit facilities
(Level 2)
|
|
5,449
|
|
|
5,532
|
|
|
5,388
|
|
|
5,519
|
|
Credit facilities contained within variable interest entities
(Level 2)
|
|
611
|
|
|
621
|
|
|
612
|
|
|
626
|
|
Senior secured notes
(Level 1)
|
|
445
|
|
|
458
|
|
|
770
|
|
|
769
|
|
Related party loans payable by the VIE
(Level 2)
|
|
227
|
|
|
232
|
|
|
222
|
|
|
226
|
|
(1)
|
Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis
|
|
|
Successor
|
|
Successor
|
||||||||
|
|
As at June 30, 2019
|
|
As at December 31, 2018
|
||||||||
(In $ millions)
|
|
Fair
value
|
|
|
Carrying
value
|
|
|
Fair
value
|
|
|
Carrying
value
|
|
Assets
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
(Level 1)
|
|
1,251
|
|
|
1,251
|
|
|
1,542
|
|
|
1,542
|
|
Restricted cash
(Level 1)
|
|
218
|
|
|
218
|
|
|
461
|
|
|
461
|
|
Marketable securities
(Level 1)
|
|
22
|
|
|
22
|
|
|
57
|
|
|
57
|
|
Related party loans receivable - Archer convertible debt
(Level 3)
|
|
49
|
|
|
49
|
|
|
43
|
|
|
43
|
|
Interest rate cap
(Level 2)
|
|
7
|
|
|
7
|
|
|
39
|
|
|
39
|
|
Temporary equity
|
|
|
|
|
|
|
|
|
||||
Redeemable non-controlling interest
(Level 3)
|
|
37
|
|
|
37
|
|
|
38
|
|
|
38
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions) |
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Cash and cash equivalents
|
|
9
|
|
|
2
|
|
Investment in finance lease
|
|
990
|
|
|
1,024
|
|
Amount due from related parties
|
|
3
|
|
|
—
|
|
Total assets of the VIEs
|
|
1,002
|
|
|
1,026
|
|
|
|
|
|
|
||
Short-term interest bearing debt
(1)
|
|
48
|
|
|
33
|
|
Long-term interest bearing debt
(1)
|
|
573
|
|
|
593
|
|
Other liabilities
|
|
2
|
|
|
2
|
|
Short-term amounts due to related parties
|
|
4
|
|
|
31
|
|
Long-term debt due to related parties
(2)
|
|
232
|
|
|
222
|
|
Total liabilities of the VIEs
|
|
859
|
|
|
881
|
|
Equity of the VIEs
|
|
143
|
|
|
145
|
|
Book value of units in the Company's consolidated financial statements
|
|
805
|
|
|
823
|
|
(1)
|
Total interest bearing debt comprises principal outstanding of
$645 million
offset by
$24 million
debt discount (December 31, 2018:
$655 million
principal outstanding offset by
$29 million
debt discount).
|
(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 as shown in the table below:
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Debt principal outstanding
|
314
|
|
|
314
|
|
Debt discount
|
(82
|
)
|
|
(88
|
)
|
Trading asset positions held against long-term loan
|
—
|
|
|
(4
|
)
|
Long-term loan due to related parties
|
232
|
|
|
222
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Management fees revenues (a)
|
|
21
|
|
|
|
20
|
|
|
42
|
|
|
|
41
|
|
In country support services revenues
|
|
—
|
|
|
|
1
|
|
|
—
|
|
|
|
1
|
|
Related party inventory sales
|
|
1
|
|
|
|
—
|
|
|
1
|
|
|
|
1
|
|
Total related party operating revenues
|
|
22
|
|
|
|
21
|
|
|
43
|
|
|
|
43
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Related party inventory purchases
|
|
—
|
|
|
|
2
|
|
|
—
|
|
|
|
3
|
|
Other related party operating expenses
|
|
1
|
|
|
|
1
|
|
|
1
|
|
|
|
1
|
|
Total related party operating expenses
|
|
1
|
|
|
|
3
|
|
|
1
|
|
|
|
4
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Interest income (c)
|
|
7
|
|
|
|
6
|
|
|
15
|
|
|
|
13
|
|
Other
|
|
—
|
|
|
|
1
|
|
|
—
|
|
|
|
1
|
|
Total related party financial items
|
|
7
|
|
|
|
7
|
|
|
15
|
|
|
|
14
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Related party loans and interest (d)
|
|
489
|
|
|
476
|
|
Deferred consideration arrangements (e)
|
|
45
|
|
|
59
|
|
Convertible bond (f)
|
|
49
|
|
|
43
|
|
Trading balances (g)
|
|
103
|
|
|
138
|
|
Total related party receivables
|
|
686
|
|
|
716
|
|
Of which:
|
|
|
|
|
||
Amounts due from related parties - current
|
|
141
|
|
|
177
|
|
Amounts due from related parties - non current
|
|
545
|
|
|
539
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
SeaMex seller's credit and loans receivable
|
|
409
|
|
|
398
|
|
Seabras loans receivable
|
|
80
|
|
|
78
|
|
Total related party loans and interest
|
|
489
|
|
|
476
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
West Vela - Mobilization receivable
|
|
24
|
|
|
31
|
|
West Vela - Share of dayrate
|
|
21
|
|
|
27
|
|
West Polaris
|
|
—
|
|
|
1
|
|
Total deferred consideration receivable
|
|
45
|
|
|
59
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
West Vela
earn out realized
|
|
—
|
|
|
|
3
|
|
|
—
|
|
|
|
7
|
|
Total contingent consideration recognized
|
|
—
|
|
|
|
3
|
|
|
—
|
|
|
|
7
|
|
|
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
(In $ millions)
|
|
Three months ended June 30, 2019
|
|
|
|
Three months ended June 30, 2018
|
|
|
Six months ended June 30, 2019
|
|
|
|
Six months ended June 30, 2018
|
|
Fair value gain of Archer debt component
|
|
1
|
|
|
|
2
|
|
|
6
|
|
|
|
2
|
|
Fair value gain of Archer embedded conversion option
|
|
—
|
|
|
|
7
|
|
|
—
|
|
|
|
4
|
|
|
|
Successor
|
|
|
Successor
|
|
(In $ millions)
|
|
As at June 30, 2019
|
|
|
As at December 31, 2018
|
|
Related party loans payable (h)
|
|
232
|
|
|
222
|
|
Trading balances (i)
|
|
12
|
|
|
39
|
|
Total related party liabilities
|
|
244
|
|
|
261
|
|
Of which:
|
|
|
|
|
||
Amounts due to related parties - current
|
|
12
|
|
|
39
|
|
Long-term debt due to related parties
|
|
232
|
|
|
222
|
|
|
SEADRILL LIMITED
|
|
August 20, 2019
|
|
|
|
By:
|
/s/ Anton Dibowitz
Name: Anton Dibowitz
Title: Chief Executive Officer of Seadrill Management Ltd. (Principal Executive Officer of Seadrill Limited)
|
1 Year Seadrill Chart |
1 Month Seadrill Chart |
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