Cover page
Cover page | 12 Months Ended |
Dec. 31, 2020shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2020 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 333-224459 |
Entity Registrant Name | SEADRILL LIMITED |
Entity Incorporation, State or Country Code | D0 |
Entity Address, Address Line One | Par-la-Ville Place |
Entity Address, Address Line Two | 4th Floor |
Entity Address, Address Line Three | 14 Par-la-Ville Road |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 08 |
Entity Address, Country | BM |
Entity Common Stock, Shares Outstanding | 100,384,435 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001737706 |
Amendment Flag | false |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Business Contact | |
Document Information [Line Items] | |
Contact Personnel Name | Colleen Simmons |
Entity Address, Address Line One | Par-la-Ville Place |
Entity Address, Address Line Two | 4th Floor |
Entity Address, Address Line Three | 14 Par-la-Ville Road |
Entity Address, City or Town | Hamilton |
Entity Address, Postal Zip Code | HM 08 |
Entity Address, Country | BM |
City Area Code | 441 |
Local Phone Number | 295-9500 |
Contact Personnel Fax Number | 295-3494 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Operating revenues | |||||
Contract revenues | $ 469 | $ 619 | $ 703 | $ 997 | |
Management contract revenue | [1] | 56 | 38 | 289 | 338 |
Total operating revenues | 541 | 712 | 1,059 | 1,388 | |
Operating expenses | |||||
Depreciation | (236) | (391) | (346) | (426) | |
Amortization of intangibles | (58) | 0 | (1) | (134) | |
Management contract expense | [1] | (44) | (45) | (390) | (302) |
Selling, general and administrative expenses | (43) | (47) | (80) | (95) | |
Total operating expenses | (737) | (918) | (1,457) | (1,722) | |
Other operating items | |||||
Loss on impairment of long-lived assets | 0 | (414) | (4,087) | 0 | |
Loss on impairment of intangibles | 0 | 0 | (21) | 0 | |
Gain on disposals | 0 | 0 | 15 | 0 | |
Other operating income | [1] | 21 | 7 | 9 | 39 |
Total other operating items | 21 | (407) | (4,084) | 39 | |
Operating loss | (175) | (613) | (4,482) | (295) | |
Financial and other non-operating items | |||||
Interest income | [1] | 40 | 19 | 34 | 69 |
Interest expense | (261) | (38) | (469) | (487) | |
Loss on impairment of investments | 0 | 0 | (47) | (302) | |
Share in results from associated companies (net of tax) | (90) | 149 | (77) | (115) | |
Fair value measurement on deconsolidation of VIE | [1] | 0 | 0 | 509 | 0 |
Loss on derivative financial instrument | (31) | (4) | 0 | (37) | |
Loss impairment of convertible bond from related party | [1] | 0 | 0 | (29) | (11) |
Net loss on debt extinguishment | 0 | 0 | 0 | (22) | |
Foreign exchange loss | (4) | 0 | (23) | (11) | |
Loss on marketable securities | (64) | (3) | (3) | (46) | |
Reorganization items, net | (9) | (3,365) | 0 | 0 | |
Other financial and non-operating items | [1] | (3) | 0 | (71) | (4) |
Total financial and other non-operating items, net | (422) | (3,242) | (176) | (966) | |
Loss before income taxes | (597) | (3,855) | (4,658) | (1,261) | |
Income tax (expense)/benefit | (8) | (30) | (5) | 39 | |
Net loss | (605) | (3,885) | (4,663) | (1,222) | |
Net loss attributable to the parent | (602) | (3,881) | (4,659) | (1,219) | |
Net loss attributable to the non-controlling interest | (2) | (6) | (3) | (1) | |
Net (loss)/gain attributable to the redeemable non-controlling interest | $ (1) | $ 2 | $ (1) | $ (2) | |
Basic loss per share (usd per share) | $ (6.02) | $ (7.71) | $ (46.43) | $ (12.18) | |
Diluted loss per share (usd per share) | $ (6.02) | $ (7.71) | $ (46.43) | $ (12.18) | |
Reimbursable revenues/ expenses | |||||
Operating revenues | |||||
Reimbursable and other revenues | $ 16 | $ 21 | $ 37 | $ 41 | |
Operating expenses | |||||
Expenses | (15) | (18) | (34) | (39) | |
Other revenues | |||||
Operating revenues | |||||
Reimbursable and other revenues | [1] | 0 | 34 | 30 | 12 |
Vessel and rig operating expenses | |||||
Operating expenses | |||||
Expenses | $ (341) | $ (417) | $ (606) | $ (726) | |
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (605) | $ (3,885) | $ (4,663) | $ (1,222) |
Other comprehensive (loss)/income, net of tax: | ||||
Change in fair value of debt component of Archer convertible bond | (3) | 0 | 4 | 3 |
Actuarial (loss)/gain relating to pensions | 1 | 0 | (2) | (1) |
Share of other comprehensive loss from associated companies | (5) | 0 | (15) | (8) |
Other comprehensive (loss)/income | (7) | 0 | (13) | (6) |
Total comprehensive loss for the period | (612) | (3,885) | (4,676) | (1,228) |
Comprehensive loss attributable to the parent | (609) | (3,881) | (4,672) | (1,225) |
Comprehensive loss attributable to the non-controlling interest | (2) | (6) | (3) | (1) |
Comprehensive (loss)/income attributable to the redeemable non-controlling interest | $ (1) | $ 2 | $ (1) | $ (2) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 526 | $ 1,115 |
Restricted cash | 132 | 135 |
Marketable securities | 8 | 11 |
Accounts receivables, net | 125 | 173 |
Amount due from related parties, net | 85 | 181 |
Other current assets | 186 | 158 |
Total current assets | 1,062 | 1,773 |
Non-current assets | ||
Investment in associated companies | 248 | 389 |
Drilling units | 2,120 | 6,401 |
Restricted cash | 65 | 107 |
Deferred tax assets | 9 | 4 |
Equipment | 19 | 23 |
Amount due from related parties, net | 392 | 523 |
Other non-current assets | 46 | 59 |
Total non-current assets | 2,899 | 7,506 |
Total assets | 3,961 | 9,279 |
Current liabilities | ||
Debt due within one year | 6,177 | 343 |
Trade accounts payable | 45 | 86 |
Amounts due to related parties - current | 7 | 19 |
Other current liabilities | 316 | 322 |
Total current liabilities | 6,545 | 770 |
Non-current liabilities | ||
Long-term debt | 0 | 6,280 |
Long-term debt due to related parties | 426 | 239 |
Deferred tax liabilities | 10 | 12 |
Other non-current liabilities | 120 | 128 |
Total non-current liabilities | 556 | 6,659 |
Commitments and contingencies (see Note 35) | ||
Redeemable non-controlling interest | 0 | 57 |
EQUITY | ||
Common shares of par value US$0.10 per share: US$0.10 per share: 138,880,000 shares authorized and 100,384,435 issued at December 31, 2020 (US$0.10 per share: 138,880,000 shares authorized and 100,234,973 issued at December 31, 2019) | 10 | 10 |
Additional paid in capital | 3,504 | 3,496 |
Accumulated other comprehensive loss | (26) | (13) |
Retained earnings | (6,628) | (1,851) |
Total Shareholder’s equity | (3,140) | 1,642 |
Non-controlling interest | 0 | 151 |
Total equity | (3,140) | 1,793 |
Total liabilities and equity | $ 3,961 | $ 9,279 |
Total, fully diluted (in shares) | 138,880,000 | 138,880,000 |
Common shares, par value (in dollars per share) | $ 0.10 | $ 0.10 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 05, 2019 | Dec. 31, 2018 | Jul. 02, 2018 |
Equity | |||||
Common shares, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | |
Common shares, authorized (in shares) | 138,880,000 | 138,880,000 | 138,880,000 | 111,111,111 | |
Common shares, issued (in shares) | 100,384,435 | 100,234,973 | 100,000,000 | 100,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash Flows from Operating Activities | |||||
Net loss | $ (605) | $ (3,885) | $ (4,663) | $ (1,222) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation | 236 | 391 | 346 | 426 | |
Amortization of unfavorable and favorable contracts | 58 | (21) | 1 | 134 | |
Share of results from associated companies | 90 | (149) | 77 | 115 | |
Impairment of investments | 0 | 0 | 47 | 302 | |
Contingent consideration realized | 0 | (7) | 0 | 0 | |
Gain on disposals | 0 | 0 | (15) | 0 | |
Unrealized loss related to derivatives | 31 | 4 | 0 | 37 | |
Fair value measurement on deconsolidation of VIE | [1] | 0 | 0 | (509) | 0 |
Payment in kind interest | 15 | (15) | 14 | 6 | |
Loss on impairment of long-lived assets | 0 | 414 | 4,087 | 0 | |
Loss on impairment of intangibles | 0 | 0 | 21 | 0 | |
Deferred tax benefit | (22) | 0 | (7) | (61) | |
Unrealized foreign exchange loss | 19 | 0 | |||
Amortization of discount on debt | 23 | 0 | 122 | 36 | |
Change in allowance for credit losses | 0 | 0 | 166 | 0 | |
Impairment of convertible bond from related party | [1] | 0 | 0 | 29 | 11 |
Net loss on debt extinguishment | 0 | 0 | 0 | 22 | |
Unrealized loss on marketable securities | 64 | 3 | 3 | 46 | |
Non-cash gain on liabilities subject to compromise | 0 | (2,977) | 0 | 0 | |
Fresh start valuation adjustments | 0 | 6,142 | 0 | 0 | |
Other re-organization items | 0 | 6 | 0 | 0 | |
Other | (3) | 2 | 8 | 3 | |
Other cash movements in operating activities | |||||
Distributions received from associated companies | 32 | 17 | 2 | 11 | |
Payments for long-term maintenance | (71) | (78) | (121) | (114) | |
Settlement of payment-in-kind interest on Senior Secured Notes | 0 | 0 | 0 | (39) | |
Changes in operating assets and liabilities, net of effect of acquisitions and disposals | |||||
Trade accounts receivable | 64 | 29 | 48 | 35 | |
Trade accounts payable | (31) | 4 | (38) | 4 | |
Prepaid expenses/accrued revenue | 12 | 42 | (52) | (1) | |
Deferred revenue | 21 | (23) | (5) | 13 | |
Related party receivables | 22 | 2 | (105) | (14) | |
Related party payables | 54 | (42) | (5) | (4) | |
Other assets | (20) | (62) | 30 | (12) | |
Other liabilities | 4 | (10) | 80 | 10 | |
Net cash used in operating activities | (26) | (213) | (420) | (256) | |
Cash Flows from Investing Activities | |||||
Additions to newbuildings | 0 | (1) | 0 | 0 | |
Additions to drilling units and equipment | (27) | (48) | (27) | (48) | |
Purchase of call option for non-controlling interest shares | 0 | 0 | (11) | 0 | |
Contingent consideration received | 65 | 48 | 32 | 32 | |
Loans granted to related party | 0 | 0 | (8) | 0 | |
Sale of rigs and equipment | 0 | 126 | 0 | 0 | |
Impact to cash resulting from deconsolidation of VIE | 0 | 0 | (22) | 0 | |
Investment in associated companies | 0 | 0 | 0 | (25) | |
Payments received from loans granted to related parties | 23 | 24 | 4 | 15 | |
Net cash (used in)/provided by investing activities | 61 | 149 | (32) | (26) | |
Cash Flows from Financing Activities | |||||
Proceeds from debt | 0 | 875 | 0 | 0 | |
Repayments of secured credit facilities | (83) | (153) | (132) | (34) | |
Redemption of Senior Secured Notes | (121) | 0 | 0 | (333) | |
Debt fees paid | (4) | (35) | 0 | 0 | |
Purchase of redeemable AOD non-controlling interest | 0 | 0 | (31) | 0 | |
Proceeds from issuance of shares | 0 | 200 | 0 | 0 | |
Net cash (used in)/provided by financing activities | (208) | 887 | (163) | (367) | |
Effect of exchange rate changes on cash and cash equivalents | (1) | (5) | (19) | 3 | |
Net (decrease)/increase in cash and cash equivalents, including restricted cash | (174) | 818 | (634) | (646) | |
Cash and cash equivalents, including restricted cash, at beginning of the year | 2,177 | 1,359 | 1,357 | 2,003 | |
Cash and cash equivalents, including restricted cash, at the end of year | 2,003 | 2,177 | 723 | 1,357 | |
Supplementary disclosure of cash flow information | |||||
Interest paid, net of capitalized interest | (178) | (38) | (181) | (391) | |
Taxes paid | $ (16) | $ (22) | $ (13) | $ (36) | |
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period Of Adoption, Adjustment | Total equity before NCI | Total equity before NCICumulative Effect, Period Of Adoption, Adjustment | Common shares | Additional paid in capital | Contributed surplus | Accumulated other comprehensive income/(loss) | Accumulated other comprehensive income/(loss)Cumulative Effect, Period Of Adoption, Adjustment | Retained Earnings | Retained EarningsCumulative Effect, Period Of Adoption, Adjustment | Non-controlling interest | Non-controlling interestCumulative Effect, Period Of Adoption, Adjustment |
Beginning balance, shares at Dec. 31, 2017 | 1,008,000,000 | ||||||||||||
Beginning balance at Dec. 31, 2017 | $ 6,959 | $ 6,560 | $ 3,313 | $ 1,956 | $ 58 | $ 225 | $ 399 | ||||||
Beginning balance (ASU 2016-01 - Financial Instruments) at Dec. 31, 2017 | $ 0 | $ (31) | $ 31 | ||||||||||
Beginning balance (ASU 2016-16 - Income Taxes) at Dec. 31, 2017 | (84) | $ (59) | (59) | $ (25) | |||||||||
Beginning balance (ASU 2016-09 - Revenue from contracts) at Dec. 31, 2017 | 7 | 7 | 7 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (3,887) | (3,881) | (3,881) | (6) | |||||||||
Other comprehensive (loss)/income | 0 | ||||||||||||
Share-based compensation charge | 9 | 9 | 9 | ||||||||||
Reclassification of non-controlling interest | 0 | (43) | (43) | 43 | |||||||||
Revaluation of redeemable non-controlling interest | (23) | 127 | 127 | (150) | |||||||||
Ending balance, shares at Jul. 01, 2018 | 0 | ||||||||||||
Ending balance at Jul. 01, 2018 | 154 | 0 | 0 | 0 | 0 | 0 | 154 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Balance before fresh-start adjustments, shares | 1,008,000,000 | ||||||||||||
Balance before fresh-start adjustments | 2,981 | 2,720 | 3,322 | 1,956 | 27 | (3,593) | 261 | ||||||
Issuance of Successor common stock, shares | 10,000,000 | ||||||||||||
Issuance of Successor common stock | $ 3,501 | 3,501 | 3,491 | 0 | 0 | 0 | 0 | ||||||
Ending balance, shares at Jul. 02, 2018 | 100,000,000 | 10,000,000 | |||||||||||
Ending balance at Jul. 02, 2018 | $ 3,655 | 3,501 | 3,491 | 0 | 0 | 0 | 154 | ||||||
Beginning balance, shares at Jul. 01, 2018 | 0 | ||||||||||||
Beginning balance at Jul. 01, 2018 | 154 | 0 | 0 | 0 | 0 | 0 | 154 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (604) | (602) | (602) | (2) | |||||||||
Other comprehensive (loss)/income | (7) | (7) | (7) | ||||||||||
Revaluation of redeemable non-controlling interest | $ (9) | (9) | (9) | ||||||||||
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 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||||||
Net loss | $ (1,220) | (1,219) | (1,219) | (1) | |||||||||
Other comprehensive (loss)/income | (6) | (6) | (6) | ||||||||||
Share-based compensation charge | 5 | 5 | 5 | ||||||||||
Revaluation of redeemable non-controlling interest | $ (21) | (21) | (21) | ||||||||||
Ending balance, shares at Dec. 31, 2019 | 100,234,973 | 10,000,000 | |||||||||||
Ending balance at Dec. 31, 2019 | $ 1,793 | $ (143) | 1,642 | $ (143) | 3,496 | 0 | (13) | (1,851) | $ (143) | 151 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net loss | (4,662) | (4,659) | (4,659) | (3) | |||||||||
Other comprehensive (loss)/income | (13) | (13) | (13) | ||||||||||
Share-based compensation charge | 9 | 9 | 9 | ||||||||||
Reclassification of non-controlling interest | (11) | (11) | |||||||||||
Revaluation of redeemable non-controlling interest | 25 | 25 | 25 | ||||||||||
Deconsolidation of VIE | (137) | (137) | |||||||||||
Cash settlement for cancellation of share scheme | $ (1) | (1) | (1) | ||||||||||
Ending balance, shares at Dec. 31, 2020 | 100,384,435 | 10,000,000 | |||||||||||
Ending balance at Dec. 31, 2020 | $ (3,140) | $ (3,140) | $ 3,504 | $ 0 | $ (26) | $ (6,628) | $ 0 |
General information
General information | 12 Months Ended |
Dec. 31, 2020 | |
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 Oslo Stock Exchange. We provide offshore drilling services to the oil and gas industry . As at December 31, 2020 we owned and operated 34 offshore drilling units. 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, SeaMex, Northern Ocean and Sonadrill. 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. At the start of the year ended December 31, 2020 we were also listed on the New York Stock Exchange (" NYSE "). On March 26, 2020 we received a written notice from the NYSE that we were not in compliance with listing rules as our average closing share price had fallen below $1 over a period of 30 consecutive trading days. On April 8, 2020 we provided the required notice to the NYSE stating our intention to seek a cure of our non-compliance. However due to the impact of the coronavirus pandemic on the offshore drilling industry the Board of Directors determined that delisting was in the best interests of the Company. We announced our decision to delist on June 1, 2020 and filed a Form 25 with the SEC on June 11, 2020. We stopped trading on this exchange on June 19, 2020. Our common shares currently trade on the over-the-counter (OTC) market under the ticker symbol SDRLF. We will continue to be listed on the Oslo Stock Exchange. Chapter 11 Proceedings and going concern Since the mid-2010s, the industry has experienced a sustained decline in oil prices which has culminated in an industry-wide supply and demand imbalance. During this period, market dayrates for drilling rigs have been lower than was anticipated when the debt associated with acquiring our rigs was incurred. This challenging business climate was further destabilized by challenges that have arisen due to the COVID-19 pandemic. The actions taken by governmental authorities around the world to mitigate the spread of COVID-19 have had a significant negative effect on oil consumption. This has led to a further decrease in the demand for our services and has had an adverse impact on our business and financial condition. Since the end of 2019, we have been working with senior creditors to provide a solution to Seadrill's high cash outflow for debt service. In June, 2020, we announced that we had appointed financial advisors to evaluate comprehensive restructuring alternatives to reduce debt service costs and overall indebtedness. In September 2020, we ceased making interest payments on our secured credit facilities which constituted an event of default. Furthermore, this triggered cross-defaults on the senior secured notes and leasing agreements in respect of the West Hercules , West Linus and West Taurus with subsidiaries of SFL Corporation Limited. The events of default meant that amounts due on the secured credit facilities and senior notes became callable on demand. As of December 31, 2020, we had $6,177 million in principal amount of these debt obligations. Our available resources would not have been sufficient to repay these obligations were they called. On February 7, 2021 and February 10, 2021 Seadrill Limited and most of its subsidiaries (" the Debtors" ) filed voluntary petitions for reorganization under Chapter 11, triggering a stay on enforcement of remedies with respect to our debt obligations. As part of the Chapter 11 Proceedings, the Debtors were granted “first-day” relief which enables us to continue operations without interruption. We are currently in negotiations to enter into a restructuring support agreement with certain lenders regarding a comprehensive restructuring transaction to be implemented pursuant to a plan of reorganization. The outcome of this process and future capital structure is not yet determined but it remains likely that it will involve significant equitization of debt and thereby material reductions to current shareholder positions. As of December 31, 2020, Seadrill had cash and cash equivalents of $723 million of which $526 million was unrestricted and we have implemented, and will continue to implement, various measures to preserve liquidity. These include an increased focus on operating efficiency, reductions in corporate and overhead expenditures, and deferrals of capital expenditures. Whilst we believe this should provide sufficient liquidity for the 12 month period from the issuance of these financial statements to allow us to complete a comprehensive restructuring, the process is difficult to predict and subject to factors outside of our control. We are subject to numerous risks associated with the bankruptcy proceedings and there can be no assurance that we will agree a plan of reorganization that is acceptable to our creditors, nor that the Bankruptcy Court would confirm such a plan once agreed. These conditions and events raise substantial doubt as to our ability to continue as a going concern for the twelve months after the date our financial statements are issued. Financial information in this report has been prepared on a going concern basis of accounting, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Financial information in this report does not reflect the adjustments to the carrying values of assets, liabilities and the reported expenses and balance sheet classifications that would be necessary if we were unable to realize our assets and settle our liabilities as a going concern in the normal course of operations. Such adjustments could be material. Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar (" U.S. dollar " or " US$ ") rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements include the financial statements of Seadrill Limited, its consolidated subsidiaries and any variable interest entity (" VIE ") in which we are the primary beneficiary. Basis of consolidation We consolidate investments in companies in which we control directly or indirectly more than 50% of the voting rights. We also consolidate entities in which we hold a variable interest where we are the primary beneficiary of the entity. 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 financial 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 performance, (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. We are the primary beneficiary of a VIE when we have 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. Subsidiaries, even if fully owned, are excluded from the Consolidated Financial Statements if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated. Bankruptcy accounting 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 Previous Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". For details of the Previous Chapter 11 process, refer to Note 4 - "Previous Chapter 11 Proceedings". Fresh Start Reporting Upon emergence from bankruptcy on July 2, 2018 (the " Effective Date "), in accordance with ASC 852, Seadrill Limited became a new entity for financial reporting purposes. This meant fresh start reporting with our assets and liabilities recorded at their fair values. For details of the fresh start reporting refer to Note 5 - "Fresh Start Accounting". 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 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 reorganization plan and fresh start accounting were applied as of July 2, 2018. The new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related deferred tax effects through "Income tax expense", during the period from January 1, 2018 to 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 periods following the application of fresh start accounting are different from historical trends and the differences may be material. 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) or to any previously reported quarterly or annual financial statements. Presentation of rig management revenues and expense s In 2019, we entered into management contracts with Sonadrill and Northern Ocean which increased the volume of activity where we are managing rigs on behalf of other parties. We have therefore separately presented the revenues and expenses relating to arrangements where we provide management or operational services as separate line items. We have recast the comparative figures in the Consolidated Statement of Operations. The table below shows effects of this reclassification on the previously reported numbers. Consolidated Statement of Operations for the year ended December 31, 2019 (Successor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 264 (223) 41 Management contract revenues — 338 338 Other revenues 127 (115) 12 Vessel and rig operating expenses (770) 44 (726) Reimbursable expenses (262) 223 (39) Management contract expenses — (302) (302) Selling, general and administrative expenses (130) 35 (95) Consolidated Statement of Operations for the period from July 2, 2018 through December 31, 2018 (Successor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 26 (10) 16 Management contract revenues — 56 56 Other revenues 46 (46) — Vessel and rig operating expenses (357) 16 (341) Reimbursable expenses (24) 9 (15) Management contract expenses — (44) (44) Selling, general and administrative expenses (62) 19 (43) Consolidated Statement of Operations for the period from January 1, 2018 through July 1, 2018 (Predecessor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 21 — 21 Management contract revenues — 38 38 Other revenues 72 (38) 34 Vessel and rig operating expenses (407) (10) (417) Reimbursable expenses (20) 2 (18) Management contract expenses — (45) (45) Selling, general and administrative expenses (100) 53 (47) |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
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. Allowance for credit losses We adopted accounting standard update 2016-13 Measurement of Credit Losses on Financial Instruments effective January 1, 2020. The new guidance replaces the “incurred loss” model required under the previous guidance with a current “expected credit loss” (or CECL) model. The CECL model requires recognition of expected credit losses over the life of a financial asset upon its initial recognition. Comparative periods are presented under the previous guidance with an allowance against a receivable balance recognized only if it was probable that we would not recover the full amount due to us. We determined doubtful accounts on a case-by-case basis and considered the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. The CECL model contemplates a broader range of information to estimate expected credit losses over the contractual lifetime of an asset. It also requires to consider the risk of loss even if it is remote. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts of events which may affect the collectability. We estimate the CECL allowance using a “probability-of-default” model, calculated by multiplying the exposure at default by the probability of default by the loss given default by a risk overlay multiplier over the life of the financial instrument (as defined by ASU 2016-13). Our critical judgements relate to internal credit ratings and maturities used to determine probability of default, the subordination of debt to determine loss given default and the performance status of the receivable that can impact any management overlay. We determine management risk overlay based on management assessment of defaults, overdue amounts and other observable events that provide information on collection. Our internal credit ratings are based on the Moody’s scorecard approach (based on several quantitative and qualitative factors) and our approach relies on statistical data from Moody’s ‘Default and Ratings Analytics’ to derive the expected credit loss. We monitor the credit quality of receivables by re-assessing credit ratings, assumed maturities and probability-of-default on a quarterly basis. Due to the inherent uncertainty around these judgmental areas, it is at least reasonably possible that a material change in the CECL allowance can occur in the near term.We grouped financial assets with similar risk characteristics based on their contractual terms, historical credit loss pattern, internal and external credit ratings, maturity, collateral type, past due status and other relevant factors. The CECL model applies to external trade receivables, related party receivables and other financial assets measured at amortized cost as well as to off-balance sheet credit exposures not accounted for as insurance. We have elected to calculate expected credit losses on the combined balance of both the amortized cost and accrued interest from the unpaid principal balance. The allowance for credit losses reflects the net amount expected to be collected on the financial asset. Any change in credit allowance is reflected in the Consolidated Statement of Operations based on the nature of the financial asset receivable. Amounts are written off against the allowance in the period when efforts to collect a balance have been exhausted. Any write-offs in excess of credit allowance by category of financial asset reduces the asset's carrying amount and is reflected in the Consolidated Statement of Operations. Expected recoveries will not exceed the amounts previously written-off or current credit loss allowance by financial asset category and are recognized in the Consolidated Statement of Operations in the period of receipt. 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 with a customer. 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 of service. We recognize revenues for activities that correspond to a distinct time increment of service 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 of service, 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 8 - "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 service it relates to. Revenue is 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. 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. 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 expenses - 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, leasing income from rigs leased to Gulfdrill, external management fees, and early termination fees. Refer to Note 9 – "Other revenues". Revenue is recognized as the performance obligation is satisfied, which on our leased rigs is on a straight-line basis. 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. Management fees Management fees - Revenues related to operation support and management services provided to Seadrill Partners, Seamex, Sonadrill, Gulfdrill and Northern Ocean. This includes both related and non-related companies. 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 "selling, 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 do not 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 exempted 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 14 – "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. 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. 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 items of income and expense are translated using the average exchange rate for the period 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 denominated monetary assets and liabilities are remeasured using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. Loss per share Basic loss per share (“ LPS ”) is calculated based on the loss for the period available to common shareholders divided by the weighted average number of shares outstanding. Diluted loss per share includes the effect of the assumed conversion of potentially dilutive instruments such as our restricted stock units. The determination of dilutive loss per share may require us to make adjustments to net loss and the weighted average shares outstanding. Refer to Note 15 – "Loss per share". Fair value measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets. Hierarchy Level 2 inputs are significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets. Hierarchy Level 3 inputs are significant unobservable inputs, including those that require considerable judgment for which there is little or no market data.. When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. 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 as current. Current liabilities will include where amounts from lenders are payable on demand at their discretion due to event of default clauses being met. 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. 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. Amounts are presented net of allowances for credit losses. Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts that are expected to be used after one year from balance sheet date are classified as non-current assets. Amounts are presented net of allowances for credit losses, which are assessed based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure. Refer to Note 16 – "Restricted cash". Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount net of expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 18 – "Accounts receivable". Contract assets and liabilities Accounts receivables are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. If we recognize revenue ahead of this point, we also recognize a contract asset. Contract assets balances relate primarily to demobilization revenues recognized during the period but are contingent on future demobilization activities. Contract liabilities include payments received for mobilization, rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. 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. Amounts receivable from related parties are presented net of allowances for expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 32 –" Related party transactions" for details of balances and material transactions with related parties. Equity investments Investments in common stock are accounted for using the equity method if we have the ability to significantly influence, but not control, the investee. Significant influence is presumed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%,. We also consider other factors such as representation on the investee’s board of directors and the nature of commercial arrangements, We classify our equity investees as "Investments in Associated Companies". We recognize our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". Refer to Note 20 – "Investment in associated companies". We assess our equity method investments for impairment at each reporting period when events or circumstances suggest that the carrying amount of the investments may be impaired. 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. We consider (1) the length of time and extent to which fair value is below carrying value, (2) the financial condition and near-term prospects of the investee, and (3) our intent and ability to hold the investment until any anticipated recovery. If an impairment loss is recognized, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. Refer to Note 13 - "Impairment loss on investments in associated companies" for details. All other equity investments including investments that do not give us the ability to exercise significant influence and investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. We classify our other equity investments as "marketable securities" with gains or losses on remeasurement to fair value recognized as "loss on marketable securities". Refer to Note 17 - "Marketable securities". If we cannot 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 that indicates that the investment is impaired. We record an impairment loss to the extent that the carrying amount of the investment exceeds its estimated fair value. 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. 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 do not 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 the Previous Chapter 11, th e Newbuildings carrying value was adjusted to a fair value of nil. We have not capitalized interest since emergence as work on our Newbuild projects had substantially ceased. Refer to Note 5 – "Fresh Start Accounting". 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. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated over the remaining life of the asset. Drilling units acquired in a business combination are measured at fair value at the date of acquisition. Drilling units were also remeasured to fair value when we applied fresh start accounting at the date of emergence. Cost of property and equipment sold or retired, with the related accumulated depreciation and impairment is removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. We re-assess the remaining useful lives of our drilling units when events occur which may impact our assessment of their remaining useful lives. These include changes in the operating condition or functional capability of our rigs, technological advances, changes in market and economic conditions as well as changes in laws or regulations affecting the drilling industry. 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. Equipment Equipment is recorded at historical cost less accumulated depreciation and impairment 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 22 – "Equipment". Assets held for sale Assets are classified as held for sale when all of the following criteria are met: management 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. Leases Lessee - When we enter into a new contract, or modify an existing contract, we identify whether that contract has a finance or operating lease component. We do not have, nor expect to have any leases classified as finance leases. We determine the lease commencement date by reference to the date the rig (or other leased asset) is available for use and transfer of control has occurred from the lessee. At the lease commencement date, we measure and recognize a lease liability and a right of use (" ROU ") asset in the financial statements. The lease liability is measured at the present value of the lease payments not yet paid, discounted using the estimated incremental borrowing rate (" IBR ") at lease commencement. The ROU asset is measured at the initial measurement of the lease liability, plus any lease payments made to the lessor at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred by us. After the commencement date, we adjust the carrying amount of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over the lease term using the effective interest method. After commencement date, we amortize the ROU asset by the amount required to keep total lease expense including interest constant (straight-line over the lease term). Absent an impairment of the ROU asset, the single lease cost is calculated so that the remaining cost of the lease is allocated over the remaining lease term on straight-line basis. Seadrill assesses a ROU asset for impairment and recognizes any impairment loss in accordance with the accounting policy on impairment of long-lived assets. We applied the following significant assumptions and judgments in accounting for our leases. • We apply judgment in determining whether a contract contains a lease or a lease component as defined by Topic 842. • 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. • 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. • 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 certai n 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. • Where a leasing arrangement is a failed sale and leaseback transaction as no transfer of control has occurred as defined by Topic 606, any monies received will be treated as a financing transaction. Lessor - When we enter into a new contract, or modify an existing contract, we identify whether that contract has a sales-type, direct financing or operating lease. We do not have, nor expect to have any leases classified as sales-type or direct financing. For our operating lease, the underlying asset remains on the balance sheet and we record periodic depreciation expense and lease revenue. 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 be generated 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, is the amount by which the carrying value of the asset exceeds the discounted future net cash flows. Other intangible assets and liabilities Intangible assets and liabilities were recorded at fair value on the date of emergence from the Previous Chapter 11 less accumulated amortization. The amounts of these assets and liabilities less any estimated residual value are amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. We c |
Recent Accounting Standards
Recent Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Standards | Recent Accounting Standards 1) Recently adopted accounting standards We adopted the following accounting standard updates (" ASUs ") in the year: a) ASU 2016-13 - Financial Instruments - Measurement of Credit Losses (Also 2018-19, 2019-04 & 2019-11) In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments, including ASU 2018-19, ASU 2019-04 and ASU 2019-11: Codification Improvements to Topic 326 ‘‘Financial Instruments-Credit Losses”. Topic 326 replaces the incurred loss impairment methodology (that recognizes losses when a probable threshold is met) with a requirement to recognize lifetime expected credit losses (measured over the contractual life of the instrument) immediately, based on information about past events, current conditions and forecasts of future economic conditions. Under the current expected credit loss ('CECL') measurement financial assets are reflected at the net amount expected to be collected from the financial asset, CECL measurement is applicable to financial assets measured at amortized cost as well as off-balance sheet credit exposures not accounted for as insurance (including financial guarantees). Using the modified retrospective method, reporting periods beginning after January 1, 2020 are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. On adoption of the CECL approach we recognized an initial credit allowance of $143 million through opening retained earnings on January 1, 2020. The allowance for credit losses is presented as a deduction from the asset’s amortized cost (or liability for off-balance sheet exposures) and the net balance shown on the Consolidated Balance Sheet with associated credit loss expense in the Consolidated Statement of Operations. The ECL allowance related primarily to subordinated loan receivables due from related parties (refer to Note 32 - "Related party transactions"). Our external customers are mostly international or national oil companies with high credit standing. We have historically had a very low incidence of credit losses from these customers. Therefore, adoption of the new guidance has not had a material impact on receivables due from our customers. b) 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 amendments in this ASU remove some disclosure requirements relating to transfers between Level 1 and Level 2 of the fair value hierarchy and introduce new disclosure requirements for Level 3 measurements. We adopted the disclosure improvements prospectively on January 1, 2020, which mainly relate to additional consolidated financial statements notes disclosure for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements (see Note 34 - "Fair values of financial instruments"). c) 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. We are required to adopt the codification improvements retrospectively using a cumulative-effect method to retained earnings of the earliest period presented herein, but the amendment had no impact on historic consolidation assessments or retained earnings. d) ASU 2020-03 Financial Instruments: Codification Improvements In March 2020, the FASB issued ASU 2020-03 Financial Instruments (Topic 825) - Codification Improvements. The amendments in this ASU propose seven clarifications to improve the understandability of existing guidance, including that fees between debtor and creditor and third-party costs directly related to exchanges or modifications of debt instruments include line-of-credit or revolving debt arrangements. We adopted the codification improvements that were effective on issuance from January 1, 2020 under the specified transition approach connected with each of the codification improvements. This amendment has not had a material impact on our consolidated financial statements or related disclosures, including retained earnings, as of January 1, 2020. e) Other accounting standard updates We additionally adopted the following accounting standard updates in the year which did not have any material impact on our Consolidated Financial Statements and related disclosures: • ASU 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. • ASU 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. • 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. • ASU 2019-04 Codification Improvements to Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. • ASU 2019-08 Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer. 2) Recently issued accounting standards Recently issued ASUs by the FASB that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods: a) ASU 2019-12 Income Taxes (Topic 740): Simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The guidance will be effective from January 1, 2021 on a mainly prospective basis, with early adoption permitted. This amendment will have no material impact on our consolidated financial statements or related disclosures, including retained earnings, as of January 1, 2021. b) ASU 2020-04 Reference Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04. The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The applicable expedients for us are in relation to modifications of contracts within the scope of Topics 310, Receivables, 470, Debt, and 842, Leases. This optional guidance may be applied prospectively from any date beginning March 12, 2020 and cannot be applied to contract modifications that occur after December 31, 2022. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. c) Other accounting standard updates issued by the FASB As of March 19, 2021, 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. |
Previous Chapter 11 Proceedings
Previous Chapter 11 Proceedings | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Previous Chapter 11 Proceedings | Previous Chapter 11 proceedings In this note we have provided an overview of the Previous Chapter 11 Proceedings and related transactions as entered into by the Predecessor Company in 2018. Please refer to Note 38 - "Subsequent events" for details of the Successor Company's filing for Chapter 11. Overview Prior to the filing of the Previous 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 $1.1 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 " Previous 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 the RSA and Investment Agreement were amended. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.1 billion, increased recoveries for general unsecured creditors 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 the Previous 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 unaffected. 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 Previous Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that: ◦ 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 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 claims 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 Shares, for grants to be made from time to time to Seadrill employees and other parties. This is summarized in the below table: 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 Senior 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 % 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: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Professional and advisory fees — — (9) (187) Gain on liabilities subject to compromise — — — 2,958 Fresh start valuation adjustments — — — (6,142) Interest income on surplus cash invested — — — 6 Total reorganization items, net — — (9) (3,365) i. 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 Previous Chapter 11 Proceedings. ii. Gain on liabilities subject to compromise On emergence from the Previous Chapter 11 Proceedings 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. iii. Fresh start valuation adjustments On emergence from the Previous Chapter 11 Proceedings, 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. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 (Successor) and the related adjustments were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – "Fresh Start Accounting" for further information. iv. Interest income on surplus cash invested Interest income recognized on cash held within entities that had filed for Chapter 11. Fresh Start Accounting Upon emergence of the Predecessor Company from the Previous Chapter 11 Proceedings, 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. 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 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 Sheet. 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. 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 estimated future cash flows for the period ranging from emergence to the end of life for each rig and discounted the future cash flows to present value. The expected cash flows used 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 projection 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 were primarily based on expectations about 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: 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 % 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 based on the discounted cash flows was compared to 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 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 concluded that the implied control premium was 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 amortize 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. For further information on fresh start accounting, please refer to the Seadrill Limited Annual Report on Form 20-F for the year ended December 31, 2018. 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: (In $ millions) 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 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: (In $ millions) 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 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. 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 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 Reorganization Adjustments: (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 Senior Secured Notes 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 (1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of Senior Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest. Restricted Cash (In $ millions) Funding of the escrow account per terms of Senior Secured Notes 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 (e) Liabilities subject to compromise were settled as follows in accordance with the Plan: 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 Senior 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 Senior Secured Notes 880 Capitalized pre-issuance interest for Senior Secured Notes for 8% paid-in kind 10 Debt issuance cost in related to the issuance of the Senior Secured Notes (9) Discount on Senior 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 23,750,000 common shares at a per share price of $8.42 in connection with the equity commitment, 55 million common shares with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million common shares issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million common shares issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million common shares 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. Fresh Start Adjustments (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. (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. (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 Senior Secured Notes, unamortized debt issuance cost and lender consent fees. (In $ millions) July 2, 2018 Senior 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 Senior Secured Notes (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 common shares 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 SPV's and Seadrill Nigeria Operations Limited to fair value. |
Fresh Start Accounting
Fresh Start Accounting | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Fresh Start Accounting | Previous Chapter 11 proceedings In this note we have provided an overview of the Previous Chapter 11 Proceedings and related transactions as entered into by the Predecessor Company in 2018. Please refer to Note 38 - "Subsequent events" for details of the Successor Company's filing for Chapter 11. Overview Prior to the filing of the Previous 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 $1.1 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 " Previous 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 the RSA and Investment Agreement were amended. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.1 billion, increased recoveries for general unsecured creditors 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 the Previous 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 unaffected. 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 Previous Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that: ◦ 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 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 claims 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 Shares, for grants to be made from time to time to Seadrill employees and other parties. This is summarized in the below table: 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 Senior 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 % 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: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Professional and advisory fees — — (9) (187) Gain on liabilities subject to compromise — — — 2,958 Fresh start valuation adjustments — — — (6,142) Interest income on surplus cash invested — — — 6 Total reorganization items, net — — (9) (3,365) i. 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 Previous Chapter 11 Proceedings. ii. Gain on liabilities subject to compromise On emergence from the Previous Chapter 11 Proceedings 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. iii. Fresh start valuation adjustments On emergence from the Previous Chapter 11 Proceedings, 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. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 (Successor) and the related adjustments were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – "Fresh Start Accounting" for further information. iv. Interest income on surplus cash invested Interest income recognized on cash held within entities that had filed for Chapter 11. Fresh Start Accounting Upon emergence of the Predecessor Company from the Previous Chapter 11 Proceedings, 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. 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 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 Sheet. 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. 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 estimated future cash flows for the period ranging from emergence to the end of life for each rig and discounted the future cash flows to present value. The expected cash flows used 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 projection 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 were primarily based on expectations about 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: 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 % 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 based on the discounted cash flows was compared to 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 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 concluded that the implied control premium was 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 amortize 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. For further information on fresh start accounting, please refer to the Seadrill Limited Annual Report on Form 20-F for the year ended December 31, 2018. 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: (In $ millions) 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 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: (In $ millions) 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 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. 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 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 Reorganization Adjustments: (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 Senior Secured Notes 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 (1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of Senior Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest. Restricted Cash (In $ millions) Funding of the escrow account per terms of Senior Secured Notes 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 (e) Liabilities subject to compromise were settled as follows in accordance with the Plan: 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 Senior 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 Senior Secured Notes 880 Capitalized pre-issuance interest for Senior Secured Notes for 8% paid-in kind 10 Debt issuance cost in related to the issuance of the Senior Secured Notes (9) Discount on Senior 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 23,750,000 common shares at a per share price of $8.42 in connection with the equity commitment, 55 million common shares with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million common shares issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million common shares issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million common shares 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. Fresh Start Adjustments (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. (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. (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 Senior Secured Notes, unamortized debt issuance cost and lender consent fees. (In $ millions) July 2, 2018 Senior 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 Senior Secured Notes (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 common shares 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 SPV's and Seadrill Nigeria Operations Limited to fair value. |
Current expected credit losses
Current expected credit losses | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Current expected credit losses | Current expected credit losses The CECL model applies to our external trade receivables, related party receivables and other financial assets carried at amortized cost. Our external customers are international oil companies, national oil companies and large independent oil companies. The following table summarizes the movement in the allowance for credit losses for the year ended December 31, 2020. (In $ millions) Allowance for credit losses - trade receivables Allowance for credit losses - other current assets Allowance for credit losses - related party ST Allowance for credit losses related party LT Total Allowance for credit losses January 1, 2020 — — 15 128 143 Credit loss expense — 3 154 9 166 December 31, 2020 — 3 169 137 309 The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations. (In $ millions) Year ended December 31, 2020 Management contract expenses 142 Other financial items 24 Total 166 Changes in expected credit loss allowance for external and related party trade receivables and reimbursable amounts due are included in operating expenses, while changes in the allowances for related party loan receivables are included in other financial items. The increase in the allowance for the year ended December 31, 2020 was caused by a decline in credit ratings of our contemporaries, driven by deteriorated market conditions in the period especially following the outbreak of COVID-19, Seadrill Partners going into insolvency and an increase in expected maturities for receivables due from certain related parties. These factors led to a higher probability of default for certain related party receivables. Management applied risk overlay to receivables from Northern Ocean and Seadrill Partners. Refer to Note 32 – "Related party transactions" for details. |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment information | Segment information We use the management approach to identify our operating segments. We identified the Board of Directors as the Group’s chief operating decision maker (" CODM ") which regularly reviews internal reports when making decisions about allocation of resources to segments and in assessing their performance. In the second half of 2020, we implemented a new operating unit structure which had an increased focus on asset class. The rationale behind this change was to better benchmark our operational performance against so called ‘pure play’ peers who are product line focused, thereby enhancing transparency, efficiency, cost control and leadership focus by asset class. We have updated our reportable segments in line with this change. We now have the following three reportable segments: 1. Harsh environment : Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for harsh environment semi-submersible and jack-up rigs. 2. Floaters : Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for benign environment semi-submersible rigs and drillships. 3. Jack-ups : Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for benign environment jack-up rigs. We previously included revenues and expenses relating to management services in the "other" reportable segment. We have now allocated revenues relating to management contracts and associated expenses to the three operating segments based on the type of rig being managed. This is in line with how segment performance is now assessed by the CODM based on both owned and managed rigs results. Segment results are evaluated on the basis of operating income and the information presented below is based on information used for internal management reporting. The change in reportable segments has been reflected retrospectively. Corresponding items of segment information for earlier periods have been recast. The remaining incidental revenues and expenses not included in the reportable segments are included in the "other" reportable segment. The below section splits out total operating revenue, depreciation, amortization of intangibles, operating net loss, drilling units and capital expenditures by segment: Total operating revenue Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 526 510 150 103 Floaters 358 625 273 476 Jack-up rigs 157 229 107 128 Other 18 24 11 5 Total 1,059 1,388 541 712 Depreciation Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 93 125 78 134 Floaters 176 224 120 179 Jack-up rigs 48 48 23 58 Other 29 29 15 20 Total 346 426 236 391 Amortization of intangibles Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 1 — (13) — Floaters — 105 50 — Jack-ups — 29 21 — Total 1 134 58 — Impairment of drilling units and intangible assets Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 419 — — 414 Floaters 3,555 — — — Jack-ups 86 — — — Other 48 — — — Total 4,108 — — 414 Operating net loss Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment (396) (69) (59) (562) Floaters (3,781) (201) (112) 42 Jack-ups (87) (2) — (73) Other (218) (23) (4) (20) Operating loss (4,482) (295) (175) (613) Unallocated items: Total financial items and other (176) (966) (422) (3,242) Loss before income taxes (4,658) (1,261) (597) (3,855) Drilling assets - Total assets (In $ millions) December 31, 2020 December 31, 2019 Harsh environment rigs 1,032 1,537 Floaters 528 4,184 Jack-up Rigs 560 680 Total Drilling Units 2,120 6,401 Unallocated items: Investments in Associated companies 248 389 Marketable securities 8 11 Cash and restricted cash 723 1,357 Other assets 862 1,121 Total assets 3,961 9,279 Drilling units - Capital expenditures (1)(2) Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 26 34 7 41 Floaters 110 111 72 69 Jack-ups 12 17 19 6 Total 148 162 98 116 (1) The successor periods include additions to equipment (2) Capital expenditure includes long term maintenance projects. 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 Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Norway 480 469 117 82 United States 107 74 34 30 Saudi Arabia 98 130 78 79 Angola 89 215 29 100 Brazil 51 137 91 188 Nigeria — 198 108 105 Others (1) 234 165 84 128 Total Revenue 1,059 1,388 541 712 (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. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area are as follows: (In $ millions) December 31, 2020 December 31, 2019 Norway 1,044 1,818 Saudi Arabia 234 244 Malaysia 185 805 Qatar 151 54 USA 87 644 Brazil 79 332 Spain 49 615 Others (2) 291 1,889 Total 2,120 6,401 (1) 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. Major customers In the years e nded December 31, 2020, the year ended December 31, 2019, the period from July 2, 2018 through December 31, 2018 (Successor), and the period from January 1, 2018 through July 1, 2018 (Predecessor), we had the following customers with total revenues greater than 10% in any of the years presented: Successor Predecessor Segment Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 ConocoPhillips Harsh Environment 16 % 11 % 13 % 8 % Equinor Harsh Environment 12 % 16 % 7 % 5 % Northern Ocean Harsh Environment 12 % 12 % — % — % Saudi Aramco Jack-Ups 9 % 10 % 14 % 11 % LLOG Floaters 7 % 4 % 6 % 4 % Petrobras Floaters 5 % 7 % 10 % 23 % Total Floaters 4 % 18 % 24 % 19 % ExxonMobil Floaters — — % — % 10 % Other 35 % 22 % 26 % 20 % Total 100 % 100 % 100 % 100 % |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
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: (In $ millions) December 31, 2020 December 31, 2019 Accounts receivable, net 125 173 Current contract liabilities (deferred revenues) (1) (18) (20) Non-current contract liabilities (deferred revenues) (1) (13) (9) (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, 2020. Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2019 are as follows: (In $ millions) Contract Assets Contract Liabilities Net Contract Net contract liability at January 1, 2019 1 (21) (20) Amortization of revenue that was included in the beginning contract liability balance — 14 14 Cash received, excluding amounts recognized as revenue — (22) (22) Cash received against the beginning contract asset balance (1) — (1) Net contract liability at December 31, 2019 — (29) (29) Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2020 are as follows: (In $ millions) Contract Assets Contract Liabilities Net Contract Net contract liability at January 1, 2020 — (29) (29) Amortization of revenue that was included in the beginning contract liability balance — 23 23 Cash received, excluding amounts recognized as revenue — (25) (25) Net contract liability at December 31, 2020 — (31) (31) Deferred revenue - The deferred revenue balance o f $18 million reported in "Other current liabilities" at December 31, 2020 is expected to be realized within the next twelve months and $13 million reported in "Other non-current liabilities" is expected to be realized within the following next twelve months. The deferred revenue 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 purpose s of allocating across the entire corresponding performance obligations. |
Other revenues
Other revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenues [Abstract] | |
Other revenues | Other revenues Other revenues consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Leasing revenues 19 1 — — Amortization of unfavorable contracts — — — 21 Early termination fees 11 11 — 13 Total other revenues 30 12 — 34 Leasing revenues Revenue earned on the charter of the West Castor, West Telesto and West Tucana to Gulfdrill. 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 the Previous Chapter 11 Proceedings 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 the Previous Chapter 11 Proceedings 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. Early termination fees The termination fee revenue in the year ended December 31, 2020 relates to the West Gemini , the year ended December 31, 2019 relates to the fees recognized for the West Jupiter and West Castor , and the period from January 1, 2018 through July 1, 2018 relates to the fees recognized for the |
Other operating items
Other operating items | 12 Months Ended |
Dec. 31, 2020 | |
Other Operating Income (Loss) [Abstract] | |
Other operating items | Other operating items Other operating items consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairment of long lived assets (i) (4,087) — — (414) Impairment of intangibles (ii) (21) — — — Gain on disposals (iii) 15 — — — Other operating income (iv) 9 39 21 7 Total other operating items (4,084) 39 21 (407) i. Impairment of long lived assets In the period from January 1, 2018 through July 1, 2018 (Predecessor), we determined that the continuing downturn in the offshore drilling market was an indicator of impairment on certain assets. Following an assessment of recoverability, we recorded an impairment charge of $414 million against three of our older rigs. In the year ended 2020, we determined the global impact of the COVID-19 pandemic, and continued down cycle in the offshore drilling industry, were indicators of impairment on certain assets. Following assessments of recoverability in March 2020 and December 2020, we recorded total impairment charges of $4,087 million. Refer to Note 12 – "Impairment loss on drilling rigs" for further details. ii. Impairment of intangibles On December 1, 2020, Seadrill Partners announced it had filed a voluntary petition under Chapter 11. Under Chapter 11 we are required to continue to provide the management services only at market rate. We concluded that we no longer have a favorable contract and the intangible asset relating to Seadrill Partners has been fully impaired. iii. Gain on disposals On September 3, 2020, the harsh environment jack-up rig, West Epsilon, was sold for $12 million. Following impairments recognized at the start of the year, the rig had zero book value. The full consideration was recognized as a gain. The sale proceeds were paid directly from the purchaser to the holders of the $2,000 million facility who held this rig as collateral. Refer to Note 37 - "Supplementary cash flow information" for further details. On August 31, 2020 Seadrill executed a sale of purchase agreement with GDI for the sale of spare parts on the West Telesto . The sale generated a gain of $3 million. iv. Other operating income Other operating income consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Loss of hire insurance settlement (a) 9 10 — — Receipt of overdue receivable (b) — 26 21 — Contingent consideration (c) — — — 7 Settlement with shipyard — 3 — — Total other operating income 9 39 21 7 a) Loss of hire insurance settlement Settlement of a claim on our loss of hire insurance policy following an incident on the Sevan Louisiana. b) Receipt of overdue receivables Receipt of overdue receivables which had not been recognized as an asset as part of fresh start accounting. c) Contingent consideration Amounts recognized for contingent consideration from the sales of the West Vela and West Polaris to Seadrill Partners in 2014 and 2015. On emergence from the Previous Chapter 11 Proceedings we recognized receivables equal to the fair value of expected future cash flows under these arrangements and have therefore not recognized further income in the 2018 Successor period and year ended 2019. |
Interest expense
Interest expense | 12 Months Ended |
Dec. 31, 2020 | |
Interest Expense [Abstract] | |
Interest expense | Interest expense Interest expense consists of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Cash and payment-in-kind interest on debt facilities (a) (338) (440) (237) (37) Unwind of discount debt (b) (44) (47) (24) — Write off of discount on debt (c) (87) — — — Other — — — (1) Interest expense (469) (487) (261) (38) (a) Cash and payment-in-kind interest on debt facilities We incur cash and payment-in-kind interest on our debt facilities. This is summarized in the table below. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Senior credit facilities and unsecured bonds (239) (327) (162) (116) Less: adequate protection payments — — — 104 Senior Secured Notes (60) (66) (50) — Debt of consolidated variable interest entities (39) (47) (25) (25) Cash and payment-in-kind interest (338) (440) (237) (37) We are charged interest on our senior credit facilities at LIBOR plus a margin. For periods after July 2, 2018, this margin increased by one percentage point following the emergence from the Previous Chapter 11 Proceedings. During the period we were in the Previous Chapter 11 Proceedings (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 the Previous Chapter 11 Proceedings. On emergence from the Previous Chapter 11 Proceedings we issued $880 million of Senior Secured Notes. We incur 4% cash interest and 8% payment-in-kind interest on these notes. On November 14, 2018 and April 10, 2019 there were two redemptions. After the two redemptions there was a remaining $476 million principal outstanding on the notes, which includes $18 million of accrued payment-in-kind interest on our Senior Secured Notes which was compounded on July 15, 2019 and additional notes were issued. During 2020, a further $39 million of accrued payment-in-kind interest on our senior secured notes was compounded and additional notes were issued leaving $515 million principal outstanding on the notes as at December 31, 2020. In the fourth quarter of 2020 we deconsolidated the Ship Finance SPV's as we are no longer primary beneficiary of the variable interest entities. As a result, we no longer consolidate the external debt facilities or the interest expense on these facilities. Please refer to Note 36 - "Variable Interest Entities" for further information. (b) Unwind of discount on debt On emergence from the Previous Chapter 11 Proceedings and application of fresh start accounting, we recorded a discount against our debt to reduce its carrying value to its fair value. The debt discount was due to be unwound over the remaining terms of the debt facilities. (c) Write off of discount on debt |
Loss on impairment of long-live
Loss on impairment of long-lived assets | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Loss on impairment of long-lived assets | Loss on 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 2020 we concluded that impairment triggering events have occurred for our drilling unit fleet. On assessment of asset recoverability through an estimated undiscounted future net cash flow we calculated the value to be lower than the carrying value for 15 rigs. This resulted in a full impairment of all long-term cold stacked units and significant impairment of all benign environment floaters. In addition, based on the terms of the proposed settlement agreement with Northern Ocean we determined that any amounts from the use of owned equipment made available to the West Mira would no longer be recoverable. In total, this resulted in impairment expenses of $4.1 billion during 2020 which were classified within "loss on impairment of long-lived assets" on our Consolidated Statement of Operations for the year ended December 31, 2020. For fair value considerations refer to Note 21 –"Drilling units". |
Loss on impairment of investmen
Loss on impairment of investments in associated companies | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Loss on impairment of investments in associated companies | Loss on impairment of investments in associated companies We have recognized the following impairment of our investments in associated companies in the Consolidated Statements of Operations within "Loss on impairment of investments". Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairments of Investment in associated companies and joint ventures Seadrill Partners - Direct ownership investments 47 248 — — Seadrill Partners - Seadrill member interest and IDRs — 54 — — Total impairment of investments in associated companies and joint ventures 47 302 — — On December 1, 2020 Seadrill Partners had entered into restructuring proceedings, as a result we concluded that we no longer had significant influence over its financial and operating decisions as decisions now need court approval or are determined by the courts. Our investment in Seadrill Partners was therefore derecognized as an investment in associate and recognized as an available-for-sale security at the closing carrying value of the equity investment in associate, being nil. For further information on investment in associated companies refer to Note 20 – "Investment in associated companies". We have the following investments in associated companies: Ownership percentage Joint venture partner December 31, 2020 December 31, 2019 Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b) (a) (a) (a) Seabras Sapura (b) Sapura Energy 50.0 % 50.0 % SeaMex Ltd. ("SeaMex") (b) Fintech 50.0 % 50.0 % Sonadrill (b) Sonangol E.P. 50.0 % 50.0 % Gulfdrill (b) Gulf Drilling International 50.0 % 50.0 % (a) Refer to the Seadrill Partners subsidiaries paragraph below for additional information. For transactions with related parties refer to Note 32 - "Related party transactions". (b) We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 32 - "Related party transactions". Seadrill Partners Seadrill Partners is an international offshore drilling contractor formed in 2012. It has a fleet of 11 drilling units. This comprises four drillships, four semi-submersible rigs and three tender rigs. All the rigs were acquired from Seadrill between 2012 to 2015. Seadrill was responsible for managing, marketing and operating the rigs and charges Seadrill Partners a management fee for these services. Seadrill Partners has issued three categories of equity instruments: two classes of stock (“common units” and “subordinated units”) and incentive distribution rights (“IDRs”). The holders of these equity instruments have varying rights to receive distributions from Seadrill Partners. The common units and subordinated units have equal rights to distributed profits, subject to the common units being entitled to a minimum quarterly distribution before the subordinated units may receive a dividend. The holders of the IDRs do not receive a share of the Seadrill Partners distributions until a target distribution level has been achieved. The IDRs receive an increasing share of the distribution once this has been met. We have several investments in Seadrill Partners. These include (i) 100% of the subordinated units (1.6 million units) representing 18% of the limited partner interests in Seadrill Partners; (ii) 35% of the common units (2.5 million out of 7.5 million total units) and (iii) 100% of the incentive distribution rights. In addition, we have investments in the common stock of 4 operating subsidiaries controlled by Seadrill Partners: (i) 42% interest in Seadrill Operating LLP which wholly owns 4 rigs and has a 56% interest in 1 rig; (ii) 49% interest in Seadrill Capricorn LLC which wholly owns 4 rigs and (iii) 39% interest in Seadrill Deepwater Drillship Ltd and 49% interest in Seadrill Mobile Units (Nigeria) Ltd which, together, own a 44% interest in 1 rig. Seadrill Partners common units do not meet the definition of common stock under US GAAP as they are not the lowest class of stock because they have an additional right to dividends compared to the subordinated units. The IDRs do not meet the definition of stock. Therefore, neither category of investment is accounted for under the equity method. (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 were 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. (c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill Partners common units 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. On December 1, 2020, Seadrill Partners announced it had filed a voluntary petition under Chapter 11. Seadrill Partners assets and business operations are, therefore, under the supervision of the court and for the benefit of creditors. As a result Seadrill no longer has significant influence from this point. On emergence from Chapter 11, we expect our equity interest to be diluted to an extent our shareholding is minimal and significantly reduce our Board representation. From the date of losing significant influence the above investments were classified as market marketable securities on the Consolidated Balance Sheet, consistent with the investment held in the common units of Seadrill Partners. Refer to Note 17 - "Marketable securities" for further information. This reclassification has not resulted in a gain or loss in the Consolidated Statement of Operations as these investments have previously been impaired down to nil and the investments have nil fair value as the date we lost significant influence and at December 31, 2020 based on the year end share price of Seadrill Partners and the financial difficulty of the investees. The 'Summary of Consolidated Statements of Operations' has not been included for Seadrill Partners for the period ending December 1, 2020 in the information below. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020 and thus our share in results of Seadrill Partners did not incorporate results for the period from April 1, 2020 to December 1, 2020. SeaMex SeaMex is a joint venture that owns and operates five jack-up drilling units located in Mexico under contract with Pemex. As of February 28, 2021, we have a 50% ownership stake in SeaMex. The remaining 50% interest is owned by an investment fund controlled by Fintech Investment Limited, (" Fintech "). Seabras Sapura Seabras Sapura is a group of related companies that own and operate six pipe-laying service vessels in Brazil. As of February 28, 2021, we have a 50% ownership stake in each of these companies. The remaining 50% interest is owned by Sapura Energy Berhad (" Sapura Energy "). Gulfdrill Gulfdrill is a joint venture that manages and operates five premium jack-ups in Qatar with Qatargas. As of February 28, 2021, we have a 50% ownership stake in Gulfdrill. The remaining 50% interest is owned by Gulf Drilling International ("GDI") . We lease three of our jack-up rigs to the joint venture, with the additional two units being leased from a third party shipyard. Sonadrill Sonadrill is a joint venture that will operate four drillships focusing on opportunities in Angolan waters. As of February 28, 2021, we have a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol EP ("Sonangol") . Both Seadrill and Sonangol will bareboat two units into the joint venture. On October 1, 2019, the first bareboat and management agreements for the Sonangol drilling unit, Libongos , became effective. The rig commenced its first drilling contract on October 10, 2019. Fresh start accounting 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. Share in results from associated companies Our share in results of our associated companies (net of tax) were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Seadrill Partners - Direct ownership interests (75) (107) (82) 77 Seadrill Partners - Subordinated units — (17) (20) 22 Seabras Sapura 20 29 24 46 SeaMex (22) (19) (12) 4 Sonadrill (2) (1) — — Gulfdrill 2 — — — Total share in results from associated companies (net of tax) (77) (115) (90) 149 Summary of Consolidated Statements of Operations for our equity method investees The results of the Direct ownership interests in Seadrill Partners and its subsidiaries and our share in those results (net of tax) were as follows: Seadrill Partners 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 Operating revenues (1) 750 426 612 Net operating (loss)/income (1) 51 100 257 Net (loss)/income (1) (187) (127) 201 Net (loss)/income allocated to subsidiaries of Seadrill Partners (1) (92) (59) 77 Losses not recognized — — — Amortization of basis differences (15) (23) — Share in results of Seadrill Partners (net of tax) (107) (82) 77 Net (loss)/income allocated to SDLP subordinated units (17) (15) 22 Amortization of basis differences — (5) — Share in results of the subordinated units of Seadrill Partners (net of tax) (17) (20) 22 (1) The 'Summary of Consolidated Statements of Operations' has not been included for Seadrill Partners for the period ending December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020 and thus our share in results of Seadrill Partners did not incorporate results for the period from April 1, 2020 to December 1, 2020. The share in results of a loss of $75 million represents Seadrill's share for the period before the investment was reduced to nil. 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 360 434 232 241 Net operating income 103 198 124 125 Net income 75 113 88 92 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net income 38 57 44 46 Amortization of basis differences (18) (28) (20) — Share in results from Seabras Sapura (net of tax) 20 29 24 46 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 234 232 118 121 Net operating income 49 70 40 40 Net (loss)/income (13) 18 4 7 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net (loss) / income (6) 9 2 4 Amortization of basis differences (16) (28) (14) — Share in results from SeaMex (net of tax) (22) (19) (12) 4 The results of the Sonadrill companies and our share in those results (net of tax) were as follows: Sonadrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 56 22 — — Net operating income (2) (1) — — Net income (5) (2) — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income (2) (1) — — Share in results from Sonadrill (net of tax) (2) (1) — — The results of the Gulfdrill companies and our share in those results (net of tax) were as follows: Gulfdrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 44 — — — Net operating income 6 — — — Net income 4 — — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income 2 — — — Share in results from Gulfdrill (net of tax) 2 — — — 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: (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners - Direct ownership interest — 122 Seabras Sapura 103 98 Seabras Sapura Holding GmbH - shareholder loans held as equity 121 123 SeaMex Ltd — 22 Sonadrill 22 24 Gulfdrill 2 — Total 248 389 Quoted market prices for all of our investments are not available. Summarized Consolidated Balance sheets for our equity method investees The summarized balance sheets of the directly owned subsidiaries of Seadrill Partners and our share of equity in those companies was as follows: Seadrill Partners (In $ millions) December 31, 2019 Current assets 833 Non-current assets 4,847 Current liabilities (533) Non-current liabilities (2,623) Net Assets (2) 2,524 Seadrill share of book equity 1,305 Basis difference allocated to rigs (1) (1,220) Basis difference allocated to contracts (1) 37 Book equity allocated to direct investments in subsidiaries of Seadrill Partners 122 (1) In 2020, an impairment of $47 million (December 31, 2019: $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" reducing the balance of our investment in Seadrill Partners to nil. See Note 13 – "Impairment loss on investments in associated companies". (2) The 'Summary Consolidated Balance sheet' has not been included for Seadrill Partners as at December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020. The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows: Seabras Sapura (In $ millions, unless otherwise stated) December 31, 2020 December 31, 2019 Current assets 207 195 Non-current assets 1,474 1,495 Current liabilities (541) (510) Non-current liabilities (419) (504) Net Assets 721 676 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 361 338 Shareholder loans held as equity (1) 121 123 Basis difference allocated to rigs (351) (369) Basis difference allocated to contracts 93 129 Total adjustments (137) (117) Book value of Seadrill investment 224 221 (1) In 2020, Seabras Sapura repaid $2 million (December 31, 2019: $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 (In $ millions) December 31, 2020 December 31, 2019 Current assets 291 260 Non-current assets 898 939 Current liabilities (174) (141) Non-current liabilities (555) (586) Net Assets 460 472 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 230 236 Basis difference allocated to rigs (325) (341) Basis difference allocated to contracts 95 127 Total adjustments (230) (214) Book value of Seadrill investment — 22 The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows: Sonadrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 54 57 Non-current assets — — Current liabilities (11) (9) Non-current liabilities — — Net Assets 43 48 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 22 24 Book value of Seadrill investment 22 24 The summarized balance sheets of the Gulfdrill companies and our share of recorded equity in those companies was as follows: Gulfdrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 67 — Non-current assets 102 — Current liabilities (135) — Non-current liabilities (31) — Net Assets 3 — Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 2 — Book value of Seadrill investment 2 — |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxation | Taxation Income taxes consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Current tax expense/(benefit): Bermuda — — — — Foreign 12 22 30 34 Deferred tax expense/(benefit): Bermuda — — — — Foreign (7) (61) (22) (4) Total tax expense/(benefit) 5 (39) 8 30 Effective tax rate (0.1) % 3.1 % (1.3) % (0.8) % The effective tax rate for the year ended December 31, 2020 (Successor), the y ear ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through July 1, 2018 (Predecessor) was (0.1)%, 3.1% (1.3)% and (0.8)% respectively. 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 we might have losses in others. Due to the CARES Act in the US, we recognized a tax benefit of $5 million which included the release of valuation allowances previously recorded and carrying back net operating losses to previous years. The income taxes for the year ended December 31, 2020 (Successor), the year ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor), and the period from January 1, 2018 through July 1, 2018 (Predecessor) differed from the amount computed by applying the Bermuda statutory income tax rate of 0% as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Effect of change on unrecognized tax benefits (1) (6) 49 12 Effect of unremitted earnings of subsidiaries (2) (17) (10) — Effect of taxable income in various countries 8 (16) (31) 18 Total tax expense/(benefit) 5 (39) 8 30 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: (In $ millions) December 31, 2020 December 31, 2019 Pensions and stock options 1 2 Provisions 31 30 Net operating losses carried forward 251 259 Intangibles 4 — Other 3 — Gross deferred tax assets 290 291 Valuation allowance (219) (255) Deferred tax assets, net of valuation allowance 71 36 Deferred tax liabilities: (In $ millions) December 31, 2020 December 31, 2019 Property, plant and equipment 30 30 Unremitted Earnings of Subsidiaries 8 10 Deferred gain 34 — Intangibles — 4 Gross deferred tax liabilities 72 44 Net deferred tax liability (1) (8) As at December 31, 2020, deferred tax assets related to net operating loss (“NOL”) carry forwards was $251 million (December 31, 2019: $259 million), which can be used to offset future taxable income. NOL carry forwards which were generated in various jurisdictions, include $241 million (December 31, 2019: $249 million) that will not expire and $10 million (December 31, 2019: $10 million) that will expire between 2021 and 2040 if not utilized. As at December 31, 2020, deferred tax liability related to intangibles from the application of fresh start accounting was nil (December 31, 2019: $4 million). 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 v aluation allowance consists of $251 million on NOL carry forwards as at December 31, 2020 (December 31, 2019: $259 million). Uncertain tax positions As at December 31, 2020 (Successor), we had a total amount of unrecognized tax benefits of $82 million excluding interest and penalties of which $61 million was included in other non-current liabilities, and $21 million was presented as a reduction of deferred tax assets. The changes to our balance related to unrecognized tax benefits were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Balance at the beginning of the period 89 132 61 55 Increases as a result of positions taken in prior periods 1 8 69 7 Increases as a result of positions taken during the current period — 29 18 1 Decreases as a result of positions taken in prior periods (4) (34) (9) (2) Decreases due to settlements (1) (46) (7) — Decreases as a result of a lapse of the applicable statute of limitations (3) — — — Balance at the end of the period 82 89 132 61 Accrued interest and penalties totaled $18 million at both December 31, 2020 (Successor) and December 31, 2019 (Successor) and were included in "Other liabilities" on our Consolidated Balance Sheets. We recognized expenses/(benefits) of ($1 million), ($7 million), $11 million and $3 million during the year ended December 31, 2020 (Successor), the year ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor) and the period from January 1, 2018 through July 1, 2018 (Predecessor), respectively, 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, 2020 (Suc cessor), $79 million of our unrecognized tax benefits, including penalties and interest, would have a favorable impact to the Company’s effective tax rate if recognized. 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. During the year ended December 31, 2020, the Company posted approximately $65 million collateral with a financial institution in order to continue the appeal against certain tax years. The collateral is included in "Restricted Cash" on our Consolidated Balance Sheets. The Nigerian tax authorities have issued a series of claims and assessments both directly and lodged through the Previous Chapter 11 Proceedings, 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 U.S. 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. Jurisdiction Earliest Open Year Angola 2015 Nigeria 2014 United States 2016 Norway 2016 Brazil 2008 |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss per share | Loss per share The computation of basic loss per share (“ LPS ”) is based on the weighted average number of shares outstanding during the period. Diluted LPS includes the effect of the assumed conversion of potentially dilutive instruments. The components of the numerator for the calculation of basic and diluted LPS are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Net loss attributable to the parent (4,659) (1,219) (602) (3,881) Less: Allocation to participating securities — — — — Net loss available to stockholders (4,659) (1,219) (602) (3,881) Effect of dilution — — — — Diluted net loss available to stockholders (4,659) (1,219) (602) (3,881) The components of the denominator for the calculation of basic and diluted LPS are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Basic loss per share: Weighted average number of common shares outstanding 100 100 100 504 Diluted loss per share: Effect of dilution — — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 100 100 100 504 The basic and diluted loss per share are as follows: Successor Predecessor (In $) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Basic loss per share (46.43) (12.18) (6.02) (7.71) Diluted loss per share (46.43) (12.18) (6.02) (7.71) ASC 260 ‘Earnings per Share’ requires the presentation of diluted earnings per share where a company could be called upon to issue shares that would decrease net earnings per share. As the Company reported net losses for the year ended December 31, 2020, the effect of including |
Restricted cash
Restricted cash | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Cash and Investments [Abstract] | |
Restricted cash | Note 16 – Restricted cash Restricted cash consists of the following: (In $ millions) December 31, 2020 December 31, 2019 Accounts pledged as collateral for Senior Secured Notes (1) 30 24 Accounts pledged as collateral for performance bonds and similar guarantees (2) 48 104 Demand deposit pledged as collateral for tax related guarantee (3) 65 83 Accounts pledged as collateral for leases (4) 22 — Other 32 31 Total restricted cash 197 242 (1) In 2019 and 2020, Seabras Sapura repaid $24 million and $6 million respectively of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of Senior Secured Notes. (2) On February 24, 2020 we agreed with Danske Bank to reduce our guarantee facility from $90 million to $45 million. As a result, the cash collateral required to be held was reduced. (3) We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet. (4) Certain accounts are pledged to the Ship Finance SPV's for lease arrangements for the West Taurus, West Linus and West Hercules . Following an event of default in the fourth quarter of 2020, a block was placed on these accounts. As such these accounts were reclassified as restricted. Restricted cash is presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, 2020 December 31, 2019 Current restricted cash 132 135 Non-current restricted cash 65 107 Total restricted cash 197 242 |
Marketable securities
Marketable securities | 12 Months Ended |
Dec. 31, 2020 | |
Marketable Securities [Abstract] | |
Marketable securities | Marketable securities We hold investments in certain marketable securities which we account for at fair value through profit and loss. 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. The below table shows the carrying value of our investments in marketable securities for periods presented in this report. (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners- Common units — 2 Archer 8 9 Total marketable securities 8 11 Note that our investments in Seadrill Partners subordinated units, direct interests in subsidiaries of Seadrill Partners and Seadrill Partners member interests and IDRs have been reclassified from Investments in Associated Companies at the year end as a result of a loss of significant influence triggered by Seadrill Partners voluntarily filing for Chapter 11 protection on December 1, 2020. At the time of reclassification the investments were carried at a nil value. Refer to Note 20 - "Investments in associated companies" for further information. The below table shows the gain and losses recognized through net income for the periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 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 (2) (43) (45) (5) Archer - unrealized (loss)/gain on marketable securities (1) (3) (19) 2 Total unrealized loss on marketable securities (3) (46) (64) (3) |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Accounts receivable | Accounts receivableAccounts receivable are held at their nominal amount less an allowance for expected credit losses. The adoption of ASC 326 on January 1, 2020 did not have a material impact on our third-party accounts receivable balances either on transition or at the year end. In calculating the expected credit losses we assumed that the accounts receivable are performing, mature within three months, and have a Baa3 credit rating. Refer to Note 6 - "Current expected credit losses" for further information. |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Other assets | Other assets As at December 31, 2020 and 2019 (Successor), other assets included the following: (In $ millions) December 31, 2020 December 31, 2019 Favorable drilling and management services contracts 10 33 Taxes receivable 32 38 Prepaid expenses (1) 67 33 Right of use asset (2) 57 35 Reimbursable amounts due from customers (3) 11 21 Deferred contract costs 14 12 Derivative asset - interest rate cap (4) — 3 Insurance receivable 4 14 Other (5) 37 28 Total other assets 232 217 (1) As at December 31, 2020 includes legal and advisory fees relating to the Chapter 11 process. (2) Refer to Note 25 - "Leases" for further information. (3) Includes related party balance s of $5 million from Northern Ocean. For further information refer to Note 32 - "Related party transactions". (4) Refer to Note 33 - "Financial instruments and risk management". (5) As at December 31, 2020 includes $17 million D&O insurance relating to tail back claims in the Chapter 11 process. Other assets are presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, 2020 December 31, 2019 Other current assets 186 158 Other non-current assets 46 59 Total other assets 232 217 Favorable drilling contracts and management services 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: December 31, 2020 December 31, 2019 (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 (254) 33 287 (101) 186 Impairment of favorable contracts (1) (21) — (21) — — — Amortization of favorable contracts — (2) (2) — (153) (153) Balance at end of period 266 (256) 10 287 (254) 33 (1) On December 1, 2020, Seadrill Partners announced it had filed a voluntary petition under Chapter 11. This triggered an impairment of the full favorable contract balance with Seadrill Partners. Refer to Note 10 - "Other operating items". The amortization is recognized in the Consolidated Statements of Operations under "Amortization of in tangibles". The weighted average remaining amortization period for the favorable contracts is 19 years, 5 months. The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods: (In $ millions) Period ended December 31, 2021 2022 2023 2024 2025 and thereafter Total Amortization of favorable contracts 1 1 1 1 6 10 |
Investment in associated compan
Investment in associated companies | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in associated companies | Loss on impairment of investments in associated companies We have recognized the following impairment of our investments in associated companies in the Consolidated Statements of Operations within "Loss on impairment of investments". Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairments of Investment in associated companies and joint ventures Seadrill Partners - Direct ownership investments 47 248 — — Seadrill Partners - Seadrill member interest and IDRs — 54 — — Total impairment of investments in associated companies and joint ventures 47 302 — — On December 1, 2020 Seadrill Partners had entered into restructuring proceedings, as a result we concluded that we no longer had significant influence over its financial and operating decisions as decisions now need court approval or are determined by the courts. Our investment in Seadrill Partners was therefore derecognized as an investment in associate and recognized as an available-for-sale security at the closing carrying value of the equity investment in associate, being nil. For further information on investment in associated companies refer to Note 20 – "Investment in associated companies". We have the following investments in associated companies: Ownership percentage Joint venture partner December 31, 2020 December 31, 2019 Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b) (a) (a) (a) Seabras Sapura (b) Sapura Energy 50.0 % 50.0 % SeaMex Ltd. ("SeaMex") (b) Fintech 50.0 % 50.0 % Sonadrill (b) Sonangol E.P. 50.0 % 50.0 % Gulfdrill (b) Gulf Drilling International 50.0 % 50.0 % (a) Refer to the Seadrill Partners subsidiaries paragraph below for additional information. For transactions with related parties refer to Note 32 - "Related party transactions". (b) We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 32 - "Related party transactions". Seadrill Partners Seadrill Partners is an international offshore drilling contractor formed in 2012. It has a fleet of 11 drilling units. This comprises four drillships, four semi-submersible rigs and three tender rigs. All the rigs were acquired from Seadrill between 2012 to 2015. Seadrill was responsible for managing, marketing and operating the rigs and charges Seadrill Partners a management fee for these services. Seadrill Partners has issued three categories of equity instruments: two classes of stock (“common units” and “subordinated units”) and incentive distribution rights (“IDRs”). The holders of these equity instruments have varying rights to receive distributions from Seadrill Partners. The common units and subordinated units have equal rights to distributed profits, subject to the common units being entitled to a minimum quarterly distribution before the subordinated units may receive a dividend. The holders of the IDRs do not receive a share of the Seadrill Partners distributions until a target distribution level has been achieved. The IDRs receive an increasing share of the distribution once this has been met. We have several investments in Seadrill Partners. These include (i) 100% of the subordinated units (1.6 million units) representing 18% of the limited partner interests in Seadrill Partners; (ii) 35% of the common units (2.5 million out of 7.5 million total units) and (iii) 100% of the incentive distribution rights. In addition, we have investments in the common stock of 4 operating subsidiaries controlled by Seadrill Partners: (i) 42% interest in Seadrill Operating LLP which wholly owns 4 rigs and has a 56% interest in 1 rig; (ii) 49% interest in Seadrill Capricorn LLC which wholly owns 4 rigs and (iii) 39% interest in Seadrill Deepwater Drillship Ltd and 49% interest in Seadrill Mobile Units (Nigeria) Ltd which, together, own a 44% interest in 1 rig. Seadrill Partners common units do not meet the definition of common stock under US GAAP as they are not the lowest class of stock because they have an additional right to dividends compared to the subordinated units. The IDRs do not meet the definition of stock. Therefore, neither category of investment is accounted for under the equity method. (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 were 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. (c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill Partners common units 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. On December 1, 2020, Seadrill Partners announced it had filed a voluntary petition under Chapter 11. Seadrill Partners assets and business operations are, therefore, under the supervision of the court and for the benefit of creditors. As a result Seadrill no longer has significant influence from this point. On emergence from Chapter 11, we expect our equity interest to be diluted to an extent our shareholding is minimal and significantly reduce our Board representation. From the date of losing significant influence the above investments were classified as market marketable securities on the Consolidated Balance Sheet, consistent with the investment held in the common units of Seadrill Partners. Refer to Note 17 - "Marketable securities" for further information. This reclassification has not resulted in a gain or loss in the Consolidated Statement of Operations as these investments have previously been impaired down to nil and the investments have nil fair value as the date we lost significant influence and at December 31, 2020 based on the year end share price of Seadrill Partners and the financial difficulty of the investees. The 'Summary of Consolidated Statements of Operations' has not been included for Seadrill Partners for the period ending December 1, 2020 in the information below. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020 and thus our share in results of Seadrill Partners did not incorporate results for the period from April 1, 2020 to December 1, 2020. SeaMex SeaMex is a joint venture that owns and operates five jack-up drilling units located in Mexico under contract with Pemex. As of February 28, 2021, we have a 50% ownership stake in SeaMex. The remaining 50% interest is owned by an investment fund controlled by Fintech Investment Limited, (" Fintech "). Seabras Sapura Seabras Sapura is a group of related companies that own and operate six pipe-laying service vessels in Brazil. As of February 28, 2021, we have a 50% ownership stake in each of these companies. The remaining 50% interest is owned by Sapura Energy Berhad (" Sapura Energy "). Gulfdrill Gulfdrill is a joint venture that manages and operates five premium jack-ups in Qatar with Qatargas. As of February 28, 2021, we have a 50% ownership stake in Gulfdrill. The remaining 50% interest is owned by Gulf Drilling International ("GDI") . We lease three of our jack-up rigs to the joint venture, with the additional two units being leased from a third party shipyard. Sonadrill Sonadrill is a joint venture that will operate four drillships focusing on opportunities in Angolan waters. As of February 28, 2021, we have a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol EP ("Sonangol") . Both Seadrill and Sonangol will bareboat two units into the joint venture. On October 1, 2019, the first bareboat and management agreements for the Sonangol drilling unit, Libongos , became effective. The rig commenced its first drilling contract on October 10, 2019. Fresh start accounting 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. Share in results from associated companies Our share in results of our associated companies (net of tax) were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Seadrill Partners - Direct ownership interests (75) (107) (82) 77 Seadrill Partners - Subordinated units — (17) (20) 22 Seabras Sapura 20 29 24 46 SeaMex (22) (19) (12) 4 Sonadrill (2) (1) — — Gulfdrill 2 — — — Total share in results from associated companies (net of tax) (77) (115) (90) 149 Summary of Consolidated Statements of Operations for our equity method investees The results of the Direct ownership interests in Seadrill Partners and its subsidiaries and our share in those results (net of tax) were as follows: Seadrill Partners 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 Operating revenues (1) 750 426 612 Net operating (loss)/income (1) 51 100 257 Net (loss)/income (1) (187) (127) 201 Net (loss)/income allocated to subsidiaries of Seadrill Partners (1) (92) (59) 77 Losses not recognized — — — Amortization of basis differences (15) (23) — Share in results of Seadrill Partners (net of tax) (107) (82) 77 Net (loss)/income allocated to SDLP subordinated units (17) (15) 22 Amortization of basis differences — (5) — Share in results of the subordinated units of Seadrill Partners (net of tax) (17) (20) 22 (1) The 'Summary of Consolidated Statements of Operations' has not been included for Seadrill Partners for the period ending December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020 and thus our share in results of Seadrill Partners did not incorporate results for the period from April 1, 2020 to December 1, 2020. The share in results of a loss of $75 million represents Seadrill's share for the period before the investment was reduced to nil. 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 360 434 232 241 Net operating income 103 198 124 125 Net income 75 113 88 92 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net income 38 57 44 46 Amortization of basis differences (18) (28) (20) — Share in results from Seabras Sapura (net of tax) 20 29 24 46 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 234 232 118 121 Net operating income 49 70 40 40 Net (loss)/income (13) 18 4 7 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net (loss) / income (6) 9 2 4 Amortization of basis differences (16) (28) (14) — Share in results from SeaMex (net of tax) (22) (19) (12) 4 The results of the Sonadrill companies and our share in those results (net of tax) were as follows: Sonadrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 56 22 — — Net operating income (2) (1) — — Net income (5) (2) — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income (2) (1) — — Share in results from Sonadrill (net of tax) (2) (1) — — The results of the Gulfdrill companies and our share in those results (net of tax) were as follows: Gulfdrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 44 — — — Net operating income 6 — — — Net income 4 — — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income 2 — — — Share in results from Gulfdrill (net of tax) 2 — — — 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: (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners - Direct ownership interest — 122 Seabras Sapura 103 98 Seabras Sapura Holding GmbH - shareholder loans held as equity 121 123 SeaMex Ltd — 22 Sonadrill 22 24 Gulfdrill 2 — Total 248 389 Quoted market prices for all of our investments are not available. Summarized Consolidated Balance sheets for our equity method investees The summarized balance sheets of the directly owned subsidiaries of Seadrill Partners and our share of equity in those companies was as follows: Seadrill Partners (In $ millions) December 31, 2019 Current assets 833 Non-current assets 4,847 Current liabilities (533) Non-current liabilities (2,623) Net Assets (2) 2,524 Seadrill share of book equity 1,305 Basis difference allocated to rigs (1) (1,220) Basis difference allocated to contracts (1) 37 Book equity allocated to direct investments in subsidiaries of Seadrill Partners 122 (1) In 2020, an impairment of $47 million (December 31, 2019: $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" reducing the balance of our investment in Seadrill Partners to nil. See Note 13 – "Impairment loss on investments in associated companies". (2) The 'Summary Consolidated Balance sheet' has not been included for Seadrill Partners as at December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020. The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows: Seabras Sapura (In $ millions, unless otherwise stated) December 31, 2020 December 31, 2019 Current assets 207 195 Non-current assets 1,474 1,495 Current liabilities (541) (510) Non-current liabilities (419) (504) Net Assets 721 676 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 361 338 Shareholder loans held as equity (1) 121 123 Basis difference allocated to rigs (351) (369) Basis difference allocated to contracts 93 129 Total adjustments (137) (117) Book value of Seadrill investment 224 221 (1) In 2020, Seabras Sapura repaid $2 million (December 31, 2019: $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 (In $ millions) December 31, 2020 December 31, 2019 Current assets 291 260 Non-current assets 898 939 Current liabilities (174) (141) Non-current liabilities (555) (586) Net Assets 460 472 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 230 236 Basis difference allocated to rigs (325) (341) Basis difference allocated to contracts 95 127 Total adjustments (230) (214) Book value of Seadrill investment — 22 The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows: Sonadrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 54 57 Non-current assets — — Current liabilities (11) (9) Non-current liabilities — — Net Assets 43 48 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 22 24 Book value of Seadrill investment 22 24 The summarized balance sheets of the Gulfdrill companies and our share of recorded equity in those companies was as follows: Gulfdrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 67 — Non-current assets 102 — Current liabilities (135) — Non-current liabilities (31) — Net Assets 3 — Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 2 — Book value of Seadrill investment 2 — |
Drilling units
Drilling units | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Drilling units | Drilling units Changes in drilling units for the periods presented in this report were as follows: (In $ millions) Cost Accumulated depreciation Net book value January 1, 2019 6,890 (231) 6,659 Additions 158 — 158 Depreciation — (416) (416) December 31, 2019 7,048 (647) 6,401 Additions 147 — 147 Depreciation — (341) (341) Impairment (4,087) — (4,087) December 31, 2020 (1)(2) 3,108 (988) 2,120 (1) Book value of rigs in the Consolidated Balance Sheet under leasing arrangements with the Ship Finance SPV's as at December 31, 2020 was $484 million (December 31, 2019: $784 million). (2) On November 25, 2019, March, 15 2020 and November 15, 2020 we leased the West Castor, West Telesto and West Tucana to Gulfdrill. Book value of rigs in the Consolidated Balance Sheet under leasing arrangements with our joint venture Gulfdrill as at December 31, 2020 was $151 million (December 31, 2019: $53 million). We recognized an impairment expense of $4.1 billion which was classified within "Loss on impairment of long-lived assets" on our Consolidated Statement of Operations for the year ended December 31, 2020. Please refer to Note 12 - "Impairment loss on drilling units". |
Equipment
Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Equipment Equipment consists of office equipment, software, furniture and fittings. Changes in equipment balances for the periods presented in this report were as follows: (In $ millions) Cost Accumulated depreciation Net book value January 1, 2019 34 (5) 29 Additions 4 — 4 Depreciation — (10) (10) December 31, 2019 38 (15) 23 Additions 1 — 1 Depreciation — (5) (5) December 31, 2020 39 (20) 19 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt As at December 31, 2020 and 2019, we had the following liabilities for third party debt agreements: (In $ millions) December 31, 2020 December 31, 2019 Secured credit facilities (a) 5,662 5,662 Senior Secured Notes (b) 515 476 Credit facilities contained within variable interest entities — 621 Total debt principal 6,177 6,759 Less: debt discount and fees — (136) Carrying value 6,177 6,623 This was presented in our Consolidated Balance Sheets as follows. (In $ millions) December 31, 2020 December 31, 2019 Debt due within one year 6,177 343 Long-term debt — 6,280 Total debt principal 6,177 6,623 The outstanding debt as at December 31, 2020 is repayable as follows: (In $ millions) December 31, 2020 2021 6,177 2022 and thereafter — Total debt principal 6,177 In September 2020 and December 2020, we defaulted on payments of interest on our senior secured credit facilities which was not cured within the waiver period. This has triggered the cross-default covenant for the Senior Secured Notes. As in default these amounts are callable on demand by the lender and have been classified as current. Although a forbearance agreement was in place at December 31, 2020 for certain debt facilities (see below) the waiver was not for more than one year from balance sheet date. We also considered it not probable that the violation would be cured in this forbearance waiver period and does not impact our current classification for these debt facilities. Given that renegotiation of the debt facilities as part of our restructuring under Chapter 11 will likely result in significantly modified future cash flows associated with these debt facilities we recognized the remaining unamortized debt discount of $87 million as expense in the Consolidated Statement of Operations for the period ending December 31, 2020. The decrease in our credit facilities contained within variable interest entities is attributable to the deconsolidation of our Ship Finance SPV's. Please refer to Note 36 - "Variable Interest Entities" for more information. As the timing of payment of the restricted cash is linked to the Senior Secured Notes, we reclassified it from non-current to current for the year ended December 31, 2020. Refer to Note 16 - "Restricted cash" for more information. In the next sections we cover key terms of our debt facilities at December 31, 2020 : (a) Secured Credit Facilities We have summarized the key terms of our secured credit facilities as at December 31, 2020 in the table below: Facility name Maturity (1) Total ACE drawdowns ($m) Main facility Total ($m) Margin on LIBOR floating interest (2) Collateral vessels Book value of collateral vessels ($m) Notes $400 million facility 4Q 2022 17 121 138 3.50% West Cressida West Callisto West Leda 142 $2,000 million facility 1Q 2023 80 832 912 3.00% West Alpha West Venture West Phoenix West Navigator West Elara 548 $440 million facility 3Q 2023 6 60 66 4.25% West Telesto 54 $1,450 million facility 4Q 2023 13 316 329 3.35-4.00% West Tellus 79 (3) $360 million facility 4Q 2023 18 99 117 3.75% AOD I AOD II AOD III 183 $300 million facility 1Q 2024 6 141 147 4.00% West Tucana West Castor 97 $1,750 million facility 1Q 2024 70 824 894 3.50-3.90% Sevan Driller Sevan Brasil Sevan Louisiana 8 (3) $450 million facility 2Q 2022 24 246 270 3.50% West Eminence — $1,500 million facility 4Q 2024 40 1,106 1,146 2.70-4.78% West Saturn West Neptune West Jupiter 206 (3) $1,350 million facility 4Q 2024 38 923 961 3.00% West Pegasus West Gemini West Orion 55 $950 million facility 4Q 2024 38 539 577 3.00-4.42% West Eclipse West Carina 51 (3) $450 million facility (2015) 4Q 2024 9 96 105 3.85% West Freedom West Vigilant West Prospero West Ariel 82 Total secured credit facilities 5,662 (1) The maturities above are based on the contractual maturities, before taking into account the event of default. (2) The margins above relate to the main facility contractual rates and do not account for the higher margins attributable to the ACE facility. (3) Certain debt facilities are split into different tranches set at different margins. In September 2020 and December 2020 respectively, we defaulted on our scheduled payments of $54 million of interest and fees on our secured credit facilities ($108 million in total). According to the provisions of our secured credit facilities, these amounts were converted to loan principal tranches and incur payment-in-kind interest at their original rates plus an additional 2%. Per the terms of our senior secured credit facilities, we can elect to defer up to $500 million of principal payments through draw downs under the Amortization Conversion Election ('ACE') facility (subject to the satisfaction of certain covenants). As at December 31, 2020, the total principal payments we had elected to defer amounted to $489 million, $359 million of which had been drawdown under the ACE facility. In the year ended December 31, 2020, we elected to defer $130 million with respect to principal payments falling due in 2021. Amounts drawn down under the ACE facility attract a margin of 5.5% (in lieu of the respective original margins, set out in the above table). In September 2020 we sold the West Epsilon for net proceeds of $12 million that were used to make a mandatory repayment of principal and the associated accrued interest under the $2,000 million facility, as the rig was held as collateral. These proceeds were paid directly from the buyer of the rig to the lenders in the $2,000 million facility and therefore this was a non-cash financing activity. Refer to Note 37 - "Supplementary cash flow information". In December 2020, the lenders in the $360 million facility utilized $96 million of cash held in restricted bank accounts (pledged to their facility as security) to prepay a corresponding amount of principal outstanding. (b) Senior Secured Notes On July 2, 2018, we raised $880 million of aggregate principal 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 the Previous Chapter 11 Proceedings. Per the terms of the Senior 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 Senior 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 Senior 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. On April 10, 2019, we repurchased $311 million of our principal Senior Secured Notes for $342 million. The $31 million additional cash paid represents the 7% purchase premium and settlement of accrued payment-in-kind and cash interest. On July 15, 2019, $18 million of accrued payment-in-kind interest on our senior secured notes was compounded and additional notes were issued. During the year ended December 31, 2020, $39 million of accrued payment-in-kind interest on our senior secured notes was compounded and additional notes were issued. As at December 31, 2020 there was $515 million principal outstanding on the notes. In January 2021 we failed to make a cash interest payment on our senior secured notes resulting in an event of default. This is a secondary event of default as a cross-default violation had previously occurred by December 31, 2020, with failure to interest on our secured credit facilities. The Senior Secured Notes are secured by, among other things, our investments in Seadrill Partners, SeaMex and Seabras Sapura. Loan balances receivable from these joint ventures are also held as collateral to be redeemable for notes. Refer to Note 20 - "Investment in associated companies" and Note 32 - "Related party transactions" for further information. Along with this the Senior Secured Notes are also secured by cash collateral $66 million, of which $30 million is classified as restricted cash Please refer to Note 16 - "Restricted cash" for more information on the restricted cash. Covenants and restrictions contained in our debt facilities We have provided a summary of the main financial 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: • 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 December, 31 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. Breach of this covenant leads to an event of default. • 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 EBITDA 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). For the periods ended March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 a margin increase of 0.25% per quarter, which is capped at 1%, will be enacted if: • 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 In addition to the above there are various non-financial covenants. The covenants included in the Senior Secured Notes agreements limit our ability to: • 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. |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Other liabilities | Other liabilities As at December 31, 2020 and December 31, 2019, other liabilities included the following: (In $ millions) December 31, 2020 December 31, 2019 Taxes payable 29 33 Contract liabilities 31 29 Unfavorable drilling contracts 7 8 Employee withheld taxes, social security and vacation payments 47 51 Accrued interest expense 38 40 Accrued expenses 110 137 Lease liabilities 68 36 Uncertain tax positions 79 83 Other liabilities 27 33 Total Other Liabilities 436 450 Other liabilities are presented in our Consolidated Balance Sheet as follows: (In $ millions) December 31, 2020 December 31, 2019 Other current liabilities 316 322 Other non-current liabilities 120 128 Total Other Liabilities 436 450 Unfavorable contracts 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: December 31, 2020 December 31, 2019 (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) 58 (8) (66) 39 (27) Amortization of unfavorable contracts — 1 1 — 19 19 Balance at end of period (66) 59 (7) (66) 58 (8) The amortization is recognized in the Consolidated Statement of Operations under "Amortization of intangibles". The weighted average remaining amortization period for the unfavorable contracts is 6 years, 9 months. The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods: (In $ millions) Period ended December 31, 2021 2022 2023 2024 2025 and thereafter Total Amortization of unfavorable contracts 1 1 1 1 3 7 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 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 accordance with Topic 842, we record a lease liability and associated right-of-use asset for our portfolio of operating leases. In August 2019, we entered into an agreement to establish a 50:50 joint venture (" Gulfdrill" ) with Gulf Drilling International (" GDI" ), to provide drilling services in Qatar. GDI was awarded five long-term drilling contracts in Qatar which it has novated to Gulfdrill. We have leased three of our benign environment jack-up rigs, West Castor, West Telesto and West Tucana to Gulfdrill for use under these contracts and have secured bareboat charters for a further two rigs from a third-party shipyard. GDI will manage and operate all rigs on behalf of the joint venture. In March 2020, the Lovanda (formerly Zhenhai 5) rig charter agreement was novated into the Gulfdrill joint venture, having previously been recognized as a Seadrill agreement with a third-party shipyard from November 2019. In March, 2020, Seadrill was awarded a contract to provide drilling services for 10 firm wells and 4 optional well. To fulfill this contract Seadrill entered a charter agreement to lease the West Bollsta rig from Northern Ocean. The rig was mobilized and commenced operations in early October after being available at the drill location in September, 2020. This operating lease arrangement resulted in the recognition of a lease liability and offsetting right of use asset. Seadrill has entered into sale and leaseback arrangements for the West Hercules semi-submersible rig with SFL Hercules Ltd ( “Hercules” ) in 2008, the West Linus Jack-up rig with SFL Linus Ltd ( “Linus” ) in 2014, and the West Taurus semi-submersible rig with SFL Deepwater Ltd ( “Deepwater” ) in 2008, all wholly owned subsidiaries of SFL Corporation Ltd ( "Ship Finance" ), a related party. Refer to Note 32 – “Related party transactions” for further information. For operating leases where we are the lessee, our future undiscounted cash flows are as follows: (In $ millions) Year ended December 31, 2020 2021 60 2022 16 2023 2 2024 and thereafter 1 Total 79 The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheet as at December 31, 2020: (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Total undiscounted cash flows 79 45 Less short term leases — (1) Less discount (11) (8) Operating lease liability 68 36 Of which: Current 51 12 Non-current 17 24 The following table gives supplementary information regarding our lease accounting at December 31, 2020: (In $ million) Year ended December 31, 2020 Year ended December 31, 2019 Operating Lease Cost: Operating lease cost 19 12 Short-term lease cost 2 1 Total lease cost 21 13 Other information: Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 21 13 Right-of-use assets obtained in exchange for operating lease liabilities during the period 53 19 Weighted-average remaining lease term in months 19 18 Weighted-average discount rate 32 % 13 % On November 25, 2019, March, 15 2020 and November 15, 2020 we leased the West Castor, West Telesto and West Tucana to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows: (In $ millions) Year ended December 31, 2020 2021 28 2022 28 2023 28 2024 22 2025 and thereafter 19 Total 125 Refer to Note 9 - "Other revenues" for comparative information on income from operating leases. |
Leases | 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 accordance with Topic 842, we record a lease liability and associated right-of-use asset for our portfolio of operating leases. In August 2019, we entered into an agreement to establish a 50:50 joint venture (" Gulfdrill" ) with Gulf Drilling International (" GDI" ), to provide drilling services in Qatar. GDI was awarded five long-term drilling contracts in Qatar which it has novated to Gulfdrill. We have leased three of our benign environment jack-up rigs, West Castor, West Telesto and West Tucana to Gulfdrill for use under these contracts and have secured bareboat charters for a further two rigs from a third-party shipyard. GDI will manage and operate all rigs on behalf of the joint venture. In March 2020, the Lovanda (formerly Zhenhai 5) rig charter agreement was novated into the Gulfdrill joint venture, having previously been recognized as a Seadrill agreement with a third-party shipyard from November 2019. In March, 2020, Seadrill was awarded a contract to provide drilling services for 10 firm wells and 4 optional well. To fulfill this contract Seadrill entered a charter agreement to lease the West Bollsta rig from Northern Ocean. The rig was mobilized and commenced operations in early October after being available at the drill location in September, 2020. This operating lease arrangement resulted in the recognition of a lease liability and offsetting right of use asset. Seadrill has entered into sale and leaseback arrangements for the West Hercules semi-submersible rig with SFL Hercules Ltd ( “Hercules” ) in 2008, the West Linus Jack-up rig with SFL Linus Ltd ( “Linus” ) in 2014, and the West Taurus semi-submersible rig with SFL Deepwater Ltd ( “Deepwater” ) in 2008, all wholly owned subsidiaries of SFL Corporation Ltd ( "Ship Finance" ), a related party. Refer to Note 32 – “Related party transactions” for further information. For operating leases where we are the lessee, our future undiscounted cash flows are as follows: (In $ millions) Year ended December 31, 2020 2021 60 2022 16 2023 2 2024 and thereafter 1 Total 79 The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheet as at December 31, 2020: (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Total undiscounted cash flows 79 45 Less short term leases — (1) Less discount (11) (8) Operating lease liability 68 36 Of which: Current 51 12 Non-current 17 24 The following table gives supplementary information regarding our lease accounting at December 31, 2020: (In $ million) Year ended December 31, 2020 Year ended December 31, 2019 Operating Lease Cost: Operating lease cost 19 12 Short-term lease cost 2 1 Total lease cost 21 13 Other information: Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 21 13 Right-of-use assets obtained in exchange for operating lease liabilities during the period 53 19 Weighted-average remaining lease term in months 19 18 Weighted-average discount rate 32 % 13 % On November 25, 2019, March, 15 2020 and November 15, 2020 we leased the West Castor, West Telesto and West Tucana to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows: (In $ millions) Year ended December 31, 2020 2021 28 2022 28 2023 28 2024 22 2025 and thereafter 19 Total 125 Refer to Note 9 - "Other revenues" for comparative information on income from operating leases. |
Common shares
Common shares | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Common shares | Common shares Changes in common shares for the periods presented in this report were as follows: Issued and fully paid share capital $0.10 par value each Shares $ millions December 31, 2018 100,000,000 10 RSU share issuance 234,973 — December 31, 2019 100,234,973 10 RSU share issuance 149,462 — December 31, 2020 100,384,435 10 Common share transactions for periods presented On June 5, 2019 an additional 27,768,889 common shares were approved at a par value of $0.10. This increased our authorized share capital to 138,880,000 common shares. On September 4, 2019, 234,973 common shares were issued to employees following a vesting of restricted stock units awarded under our Employee Incentive Plan. On February 10, 2020 and June 17, 2020, a total of 149,462 common shares were issued to employees following a vesting of restricted stock units awarded under our Employee Incentive Plan. Key terms of shares issued and outstanding 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 common 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. |
Non-controlling interest
Non-controlling interest | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Non-controlling interest | Non-controlling interest Changes in non-controlling interests for the periods presented in this report were as follows: (In $ millions) North Atlantic Drilling Ltd Sevan Drilling Limited Asia Offshore Drilling Ltd Ship Finance SPV's Seadrill Nigeria Operations Limited Total January 1, 2019 — — — 145 7 152 Net (loss)/income attributable to non-controlling interest in 2019 — — — (5) 4 (1) December 31, 2019 — — — 140 11 151 Net loss attributable to non-controlling interest in 2020 — — — (3) — (3) Share buyback of Heirs Holding shares in Seadrill Nigeria Operations — — — — (11) (11) Deconsolidation of Ship Finance SPV's — — — (137) — (137) December 31, 2020 — — — — — — 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, we held a 70.36% interest in North Atlantic Drilling Ltd. and a 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 Prior to August 2020 we held a 66.24% interest in AOD. In the Predecessor, 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 gave a put option to the holders of the non-controlling interest shares, Mermaid. 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' in the Consolidated Balance Sheets. In August 2020, Mermaid exercised their put option to sell their non-controlling interest of 34% in AOD for an agreed valuation of $31 million. This eliminated the non-controlling interest and AOD is now a wholly-owned subsidiary. For details of movements in the redeemable non-controlling interest, refer to Note 28 - "Redeemable non-controlling interest". Ship Finance SPV's In 2007, 2008 and 2014, we entered into sale and leaseback arrangements for drilling units with SFL Corporation Ltd, who incorporated subsidiary companies for the sole purpose of owning and leasing the drilling units. Prior to 4Q20, we were the primary beneficiary of these companies and therefore consolidated them under the variable interest model with the SFL Corporation Ltd equity in these companies included in non-controlling interest. In September 2020, we triggered an event of default that meant we were no longer the primary beneficiary and the Ship Finance SPV's were deconsolidated. Refer to Note 36 - "Variable Interest Entities". Seadrill Nigeria Operations Limited HH Global Alliance Investments Limited ("Heirs Holdings"), an unrelated party registered in Nigeria, owns a non-controlling interest in one of our subsidiaries, Seadrill Nigeria Operations Limited ("Seadrill Nigeria") holds a 10% interest in our drillship West Jupiter and previously supported the West Jupiter's Changes in redeemable non-controlling interests for the periods presented in this report were as follows: (In $ millions) Asia Offshore Drilling Ltd January 1, 2019 38 Net loss attributable to redeemable non-controlling interest (2) Fair value adjustment 21 December 31, 2019 57 Net loss attributable to redeemable non-controlling interest (1) Fair value adjustment (25) Acquisition of NCI (31) December 31, 2020 — Prior to September 11, 2020, we held a 66.24% interest in AOD, which owns the benign environment jack-up rigs AOD 1, AOD 2 and AOD 3. The remaining 33.76% interest was owned by Mermaid. On April 4, 2018, the Predecessor executed a Transaction Support Agreement which provided Mermaid with a put option that gave them the right to sell their non-controlling interest shares to Seadrill. The repurchase price is based on the fair value of the shares, determined by a valuation expert, subject to a price ceiling of $125 million. The exercise window for the put option ended on September 30, 2020. If Mermaid did not exercise their option, Seadrill would have a call option that gives them the right to buy Mermaid's shares at fair value, subject to a price floor of $75 million. The exercise window for the call option started on October 1, 2020 and ends on March 31, 2021. The put option generated a redemption feature for Mermaid that was outside the control of Seadrill. The fair value of Mermaid's non-controlling interest shares was reclassified from equity to "Redeemable non-controlling interest" in the Consolidated Balance Sheet. Each reporting period, we (i) attributed Mermaid's share of AOD's profit or loss to the redeemable non-controlling interest and (ii) made an adjustment to remeasure the redeemable non-controlling interest at fair value, with the offsetting entry to equity. See the table above. On September 11, 2020, Mermaid served notice on Seadrill that it was exercising the put option. The fair value of the non-controlling interest of AOD was agreed at $31 million which was settled in cash by Seadrill. The exercise of the put option resulted in the increase of the ownership interest in AOD to 100% and de-recognition of the redeemable non-controlling interest from the Consolidated Balance Sheet. |
Redeemable non-controlling inte
Redeemable non-controlling interest | 12 Months Ended |
Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable non-controlling interest | Non-controlling interest Changes in non-controlling interests for the periods presented in this report were as follows: (In $ millions) North Atlantic Drilling Ltd Sevan Drilling Limited Asia Offshore Drilling Ltd Ship Finance SPV's Seadrill Nigeria Operations Limited Total January 1, 2019 — — — 145 7 152 Net (loss)/income attributable to non-controlling interest in 2019 — — — (5) 4 (1) December 31, 2019 — — — 140 11 151 Net loss attributable to non-controlling interest in 2020 — — — (3) — (3) Share buyback of Heirs Holding shares in Seadrill Nigeria Operations — — — — (11) (11) Deconsolidation of Ship Finance SPV's — — — (137) — (137) December 31, 2020 — — — — — — 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, we held a 70.36% interest in North Atlantic Drilling Ltd. and a 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 Prior to August 2020 we held a 66.24% interest in AOD. In the Predecessor, 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 gave a put option to the holders of the non-controlling interest shares, Mermaid. 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' in the Consolidated Balance Sheets. In August 2020, Mermaid exercised their put option to sell their non-controlling interest of 34% in AOD for an agreed valuation of $31 million. This eliminated the non-controlling interest and AOD is now a wholly-owned subsidiary. For details of movements in the redeemable non-controlling interest, refer to Note 28 - "Redeemable non-controlling interest". Ship Finance SPV's In 2007, 2008 and 2014, we entered into sale and leaseback arrangements for drilling units with SFL Corporation Ltd, who incorporated subsidiary companies for the sole purpose of owning and leasing the drilling units. Prior to 4Q20, we were the primary beneficiary of these companies and therefore consolidated them under the variable interest model with the SFL Corporation Ltd equity in these companies included in non-controlling interest. In September 2020, we triggered an event of default that meant we were no longer the primary beneficiary and the Ship Finance SPV's were deconsolidated. Refer to Note 36 - "Variable Interest Entities". Seadrill Nigeria Operations Limited HH Global Alliance Investments Limited ("Heirs Holdings"), an unrelated party registered in Nigeria, owns a non-controlling interest in one of our subsidiaries, Seadrill Nigeria Operations Limited ("Seadrill Nigeria") holds a 10% interest in our drillship West Jupiter and previously supported the West Jupiter's Changes in redeemable non-controlling interests for the periods presented in this report were as follows: (In $ millions) Asia Offshore Drilling Ltd January 1, 2019 38 Net loss attributable to redeemable non-controlling interest (2) Fair value adjustment 21 December 31, 2019 57 Net loss attributable to redeemable non-controlling interest (1) Fair value adjustment (25) Acquisition of NCI (31) December 31, 2020 — Prior to September 11, 2020, we held a 66.24% interest in AOD, which owns the benign environment jack-up rigs AOD 1, AOD 2 and AOD 3. The remaining 33.76% interest was owned by Mermaid. On April 4, 2018, the Predecessor executed a Transaction Support Agreement which provided Mermaid with a put option that gave them the right to sell their non-controlling interest shares to Seadrill. The repurchase price is based on the fair value of the shares, determined by a valuation expert, subject to a price ceiling of $125 million. The exercise window for the put option ended on September 30, 2020. If Mermaid did not exercise their option, Seadrill would have a call option that gives them the right to buy Mermaid's shares at fair value, subject to a price floor of $75 million. The exercise window for the call option started on October 1, 2020 and ends on March 31, 2021. The put option generated a redemption feature for Mermaid that was outside the control of Seadrill. The fair value of Mermaid's non-controlling interest shares was reclassified from equity to "Redeemable non-controlling interest" in the Consolidated Balance Sheet. Each reporting period, we (i) attributed Mermaid's share of AOD's profit or loss to the redeemable non-controlling interest and (ii) made an adjustment to remeasure the redeemable non-controlling interest at fair value, with the offsetting entry to equity. See the table above. On September 11, 2020, Mermaid served notice on Seadrill that it was exercising the put option. The fair value of the non-controlling interest of AOD was agreed at $31 million which was settled in cash by Seadrill. The exercise of the put option resulted in the increase of the ownership interest in AOD to 100% and de-recognition of the redeemable non-controlling interest from the Consolidated Balance Sheet. |
Accumulated other comprehensive
Accumulated other comprehensive income/(loss) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income/(loss) | Accumulated other comprehensive income/(loss) Changes in accumulated other comprehensive income/(loss) for the periods presented in this report were as follows: (In $ millions) Actuarial gain/(loss) relating to pension Share in unrealized losses from associated companies Change in debt component on Archer facility Total January 1, 2019 1 (5) (3) (7) Other comprehensive (loss)/income (1) (8) 3 (6) December 31, 2019 — (13) — (13) Other comprehensive (loss)/income (2) (15) 4 (13) December 31, 2020 (2) (28) 4 (26) |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share based compensation | Share based compensation The share-based compensation expense for our share options and Restricted Stock Unit (" RSU ") plans in the Consolidated Statements of Operations are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Share-based compensation expense (1) 8 5 — 9 Total share-based compensation expense 8 5 — 9 (1) 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 the Previous Chapter 11 Proceedings. This was classified within reorganization items. On August 16, 2018, we established an employee incentive plan with a limit of 11.1 million of our common shares. On September 4, 2018 we made a grant of 0.5 million RSUs to certain employees and directors under the employee incentive plan. The awards were subject to a service condition and vest 33% per year over the three-year period to September 4, 2021. On September 4, 2019, the first tranche of RSUs vested and 0.2 million of our common shares were issued to employees and directors. On April 26, 2019, we made a grant of 1.7 million performance shares to certain employees under our employee incentive plan. The awards are subject to service and performance conditions and the vesting period ends on March 31, 2022. On August 23, 2019, we made a grant of 0.3 million restricted stock units to directors. The awards were subject to a service condition and vest 33% per year over the three-year period to August 23, 2022. On July 29, 2020, we made a one-off compensatory cash payment to holders of performance share unit and restricted share unit awards that had been granted under our company incentive plans that amounted to $0.5 million. On cancellation of the schemes the remaining charge relating to the unvested awards have been expensed to the consolidated statement of operations. Company Directors and Senior Management held 510,234 performance share units and 188,369 restricted stock units, which resulted in a cash payment of $0.2 million. The compensation cost for non-vested awards not yet recognized as at December 31, 2020 is nil (December 31, 2019: $9 million). |
Pension benefits
Pension benefits | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Pension benefits | Note 31 - Pension benefits Defined benefit plans 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 start a pre-retirement pension at 62 years of age. Consolidated Balance Sheet position Net defined benefit pension asset/(obligation) is as follows: (In $ millions) December 31, 2020 December 31, 2019 Defined benefit obligation - Non-current liabilities — (2) Deferred tax asset 1 1 Net defined benefit pension asset/(obligation) 1 (1) Annual pension cost We record pension costs in the period during which the services are rendered by the employees. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Service cost 1 3 2 1 Interest cost on prior years’ benefit obligation — 1 1 — Gross pension cost for the year 1 4 3 1 Expected return on plan assets — (1) (1) — Net pension cost for the year 1 3 2 1 Impact of settlement/curtailment of defined benefit plans 1 — — Total net pension cost 2 3 2 1 The funded status of the defined benefit plan Funded defined benefit pension obligation is as follows: (In $ millions) December 31, 2020 December 31, 2019 Projected defined benefit obligations (16) (40) Plan assets at market value 16 39 Funded defined benefit pension obligation — (1) Change in projected benefit obligations Change in projected benefit obligation is as follows: (In $ millions) December 31, 2020 December 31, 2019 December 31, 2018 Projected benefit obligations at beginning of period 40 37 36 Interest cost — 1 1 Service cost 1 3 1 Benefits paid (1) (2) (1) Change in unrecognized actuarial gain 2 — 2 Settlement (1) (25) — — Foreign currency translations (1) 1 (2) Projected benefit obligations at end of period 16 40 37 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. Change in pension plan assets Change in pension plan assets is as follows: (In $ millions) December 31, 2020 December 31, 2019 December 31, 2018 Fair value of plan assets at beginning of year 39 33 33 Estimated return — 1 1 Contribution by employer 6 6 — Benefits paid (1) (2) (1) Actuarial gain — — 2 Settlement (1) (27) — — Foreign currency translations (1) 1 (2) Fair value of plan assets at end of year 16 39 33 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. The accumulated benefit obligation for all defined benefit pension plans was $15 million and $37 million at December 31, 2020 (Successor) and December 31, 2019 (Successor), 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. 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 Successor Predecessor Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Rate of compensation increase at the end of year 2.25 % 2.25 % 2.75 % 2.50 % Discount rate at the end of year 1.70 % 2.30 % 2.60 % 2.40 % Prescribed pension index factor 1.20 % 2.00 % 2.00 % 2.00 % Expected return on plan assets for the year 2.60 % 2.60 % 2.60 % 2.40 % Employee turnover 4.00 % 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.00 % 2.50 % 2.50 % 2.25 % The weighted-average asset allocation of funds related to our defined benefit plan at December 31, was as follows: Pension benefit plan assets December 31, 2020 December 31, 2019 Equity securities 7.2 % 13.6 % Debt securities 68.2 % 58.4 % Real estate 13.6 % 11.0 % Money market 10.6 % 16.5 % Other 0.4 % 0.5 % Total 100.0 % 100.0 % 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. The life insurance company diversify the 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. Effective January 1, 2020 the company terminated two of the defined benefit plans and replaced it with a defined contribution plan. The termination/settlement cost relating to the defined benefit plans has been recognized within 'Selling, general and administrative expenses' within the Consolidated Statement of Operations. 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, 2021-2030. The expected payments are based on the assumptions used to measure our obligations at December 31, 2020 and include estimated future employee services. (In $ millions) December 31, 2020 2021 1 2022 1 2023 1 2024 1 2025-2030 3 Total payments expected during the next 10 years 7 Defined contribution and other plans W e made contributions to personal defined contribution pension and other plans totaling $18 million for the year ended December 31, 2020, $16 million for the year ended December 31, 2019 (Successor), $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). These were charged as operational expenses as they became payable. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions Our main related parties include (i) affiliated companies over which we hold significant influence, (ii) affiliated companies and (iii) companies who are either controlled by or whose operating policies may be significantly influenced by our major shareholder, Hemen. Companies over which we hold significant influence include SeaMex, Seabras Sapura, Sonadrill and Gulfdrill. Seadrill Partners is an affiliated company. Companies that are controlled by or whose operating policies may be significantly influenced by Hemen include Ship Finance, Archer, Frontline, Seatankers, Northern Drilling and Northern Ocean. In the following sections we provide an analysis of transactions with related parties and balances outstanding with related parties. Related party revenue The below table provides an analysis of related party revenues for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Management fee revenues (a) 135 113 46 37 Reimbursable revenues (b) 148 218 9 — Related party inventory sales 1 1 1 1 Other 2 — — — Total related party operating revenues 286 332 56 38 (a) We provide management and administrative services to Seadrill Partners, SeaMex and Sonadrill and operational and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We recognized reimbursable revenues from Northern Ocean for work to perform the first mobilization of the Northern Ocean rigs, West Mira and West Bollsta . As at December 31, 2020 our Consolidated Balance Sheet included $142 million of receivables from Northern Ocean (December 31, 2019: $60 million), before deducting allowances for credit losses. This included $137 million of billed and unbilled trade receivables (December 31, 2019: $55 million), which have been classified within the line item "amount due from related parties", and $5 million of costs incurred not yet billable to Northern Ocean (December 31, 2019: $5 million), which have been classified with "Other Assets". Related party operating expenses The below table provides an analysis of related party operating expenses for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 In country support services expenses (c) — — — 1 Related party inventory purchases 1 1 — — Other related party operating expenses (d) 1 2 1 3 West Bollsta lease (e) 10 — — — Total related party operating expenses 12 3 1 4 (c) Seadrill Partners previously provided us in country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us in country support services for the West Pegasus and West Freedom when those rigs operated in Mexico and Venezuela. (d) 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. (e) Seadrill entered a charter agreement to lease the West Bollsta rig from Northern Ocean in 2020. Refer to Note 25 - "Leases" for details. Related party financial items The below table provides an analysis of related party financial income for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Interest income (f) 24 29 17 12 Interest income recognized on deferred contingent consideration (g) 2 4 1 2 Total related party financial items 26 33 18 14 (f) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). (g) We record interest income on deferred consideration receivables from Seadrill Partners (see item (i) below). Related party receivable balances The below table provides an analysis of related party receivable balances for periods presented in this report. (In $ millions) December 31, 2020 December 31, 2019 Related party loans and interest (h) 516 488 Deferred consideration arrangements (i) 3 31 Convertible bond (j) 13 35 Trading balances (k) 251 150 Allowance for expected credit loss (l) (306) — Total related party receivables 477 704 Of which: Amounts due from related parties - current 85 181 Amounts due from related parties - non-current 392 523 (h) We have loan receivables outstanding from SeaMex and Seabras Sapura. We have summarized the amounts outstanding in the table below: (In $ millions) December 31, 2020 December 31, 2019 SeaMex seller's credit and loans receivable 452 422 Seabras loans receivable 64 66 Total related party loans and interest 516 488 SeaMex loans include: 1) $250 million "sellers credit" provided to SeaMex in March 2015 which matured in December 2019 but is subordinated to SeaMex's external debt facility, which matures in March 2022. We have classified this balance as non-current on our Consolidated Balance Sheets. 2) $45 million working capital loan advanced in November 2016. 3) $149 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% plus LIBOR and are subordinated to SeaMex's external debt facility. 4) $8 million Sponsor Minimum Liquidity Shortfall. The loan earns interest at 6.5% plus 3 -month U.S. LIBOR. Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $64 million balance shown in the table above includes (i) $50 million of loan principal and (ii) $14 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. 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. Refer to Note 20 - "Investments in associated companies" for details. Seabras Sapura repaid $6 million of its outstanding loan balances in April 2020, $4 million relating to its loan facility and $2 million relating to its shareholder loans. (i) 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: (In $ millions) December 31, 2020 December 31, 2019 West Vela - Mobilization receivable 2 17 West Vela - Share of dayrate 1 14 Total deferred consideration receivable 3 31 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 recognized only when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items . The West Polaris was settled in 2019. We recorded the following gains in other operating income for these arrangements. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 West Vela earn out realized — — — 7 Total contingent consideration recognized — — — 7 (j) 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. 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, 2019 , Archer were in negotiations with their lenders to refinance their debt obligations, which we expected to result in an extension to maturities for all lenders, including Seadrill. We have determined the fair value of the bond using cashflows discounted at the rate of 14%. We assumed the maturity date to be deferred to December 2024. As a result, we recorded an other than temporary impairment against our investment in the convertible bond issued to us by Archer of $11 million. On March 13, 2020, Archer announced completion of a refinancing, which included agreed renegotiated terms on the convertible loan. The updated terms amended the loan balance to $13 million that bears interest of 5.5%, matures in April 2024 and an equity conversion option. The renegotiated terms resulted in a $29 million impairment recognized following a reduction in the loan balance and an increase to the discount rate. The fair value of the convertible debt instrument as at December 31, 2020 was $13 million of which the split between debt and embedded derivative option was $10 million and $3 million respectively. Refer to Note 34 - "Fair values of financial instruments" for details. The fair value gain/ (loss) on the convertible bond for periods presented is summarized below: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Other than temporary impairment (29) (11) — — Fair value gain/ (loss) of Archer debt component 4 3 (3) 2 Fair value gain/ (loss) of Archer embedded conversion option 3 — (9) 2 (k) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Ocean and Sonadrill for related party management fees, crewing fees and payroll recharges. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. As set out below, we have established credit loss allowances for balances that have not been settled in line with these payment terms and are overdue. (l) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 - Measurement of Credit Losses on Financial Instruments. Refer to Note 6 – "Current expected credit losses" for details. Related party payable balances The below table provides an analysis of related party payable balances for periods presented in this report. (In $ millions) December 31, 2020 December 31, 2019 Related party loans payable by Ship Finance SPVs to Ship Finance (m) — 239 Liabilities from Seadrill to Ship Finance SPVs (n) 426 — Trading balances (o) 7 19 Total related party liabilities 433 258 Of which: Amounts due to related parties - current (7) (19) Long-term debt due to related parties (426) (239) (m) At December 31, 2019, we had recognized $239 million of long-term related party liabilities due from the fully consolidated Ship Finance SPV’s to Ship Finance (parent financing). The principal outstanding on the loans was $314 million at December 31, 2019. Following the deconsolidation of the SPVs in the fourth quarter of 2020 this loan was derecognized. Refer to Note 36 - "Variable Interest Entities" for further details. The loans bear interest at a fixed rate of between 1% to 4.5% per annum and mature between 2023 and 2029 . The total interest expense incurred for the year ended December 31, 2019 was $14 million, the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million and the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 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”. As at December 31, 2019 the trading position was a net liability position of nil. (n) Following the deconsolidation, we recognized the liability between Seadrill and the SPV's that was previously eliminated on consolidation. On initial recognition the carrying value of Seadrill’s liability with the SPV's of $933 million was measured to the fair value of the liability of $424 million (post deconsolidation initial recognition value). Along with this, there was $2 million of unwinding of the discount of debt for the year ended December 31,2020. We estimated the fair value of the liability to Ship Finance SPV's on deconsolidation using the discounted cash flows approach. The DCF was based on the contractual cash flows under the bareboat charter agreement together with applicable LIBOR linked interest payments. We also assumed cash outflows under the mandatory repurchase obligation at the end of the lease term (see below). We have discounted these cash flows using Seadrill senior secured note yield of 37%. This calculation resulted in the fair value of the liability of $424 million. The $509 million gain on measurement is presented as a separate line in financial items in the Consolidated Statement of Operations. Refer to Note 36 - "Variable Interest Entities" for further details. The following table gives a summary of the sale and leaseback arrangements and repurchase options with Ship Finance, as at December 31, 2020: (In $ millions) West Taurus West Hercules West Linus Total Maturity date Dec 2024 Dec 2024 May 2029 Remaining lease payments 191 184 393 768 Purchase obligation 154 138 86 378 Total commitment 345 322 479 1,146 Fair value on initial recognition 146 136 142 424 Book value 147 137 142 426 The purchase price paid by the Ship Finance SPVs was $850 million ( West Taurus - Nov 2008), $850 million ( West Hercules - Oct 2008) and $600 million ( West Linus - June 2013). 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. (In $ thousands) 2021 2022 2023 2024 2025 and thereafter West Taurus 96 96 181 177 — West Hercules 96 96 183 176 — West Linus 99 92 189 153 122 (o) Trading balances primarily include related party payables due from us to SeaMex and Seadrill Partners and in 2019 included related party payables due from our Ship Finance variable interest entities to Ship Finance. 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, but this facility matured in 2020. As a condition to the lenders making the loan available, a subsidiary of Seadrill has 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, 2020 was $132 million (December 31, 2019: $146 million). 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 and SeaMex to their customers. Refer to Note 35 - "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 (iv) 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 4.1. |
Financial instruments and risk
Financial instruments and risk management | 12 Months Ended |
Dec. 31, 2020 | |
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, related party receivables, 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. However, we have established an allowance on our loans and trade receivables due from related parties reflecting their current financial position, lower credit rating and overdue balances. We do not demand collateral in the normal course of business. The credit exposure of derivative financial instruments is represented by the fair value of contracts with a positive fair value at the end of each period. 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 and 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. Credit risk is also considered as part of our expected credit loss provision. For details on how we estimate expected credit losses refer to Note 6 - "Current expected credit losses". 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 BTG Pactual. We consider these risks to be remote, however, from time to time, we may utilize instruments such as money market deposits to manage concentration of risk with respect to cash and cash equivalents. We also have a concentration of risk with respect to customers, including affiliated companies. For details on the customers with greater than 10% of contract revenues, refer to Note 7 - "Segment information". For details on amounts due from affiliated companies, refer to Note 32 - "Related party transactions". Foreign exchange risk It is customary in the oil and gas industry that 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. Our foreign exchange exposures primarily relate to cash and working capital balances denominated in foreign currencies. We do not expect these exposures to cause a significant amount of fluctuation in net income and do not currently hedge them. The effect of fluctuations in currency exchange rates arising from our international operations 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. On May 11, 2018, we purchased an interest rate cap for $68 million to mitigate our exposure to future increases of LIBOR on our Senior Credit Facility debt. The interest rate cap is not designated as a hedge and therefore we do 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. As part of reference rate reform, the use of LIBOR will be replaced by other interest rate indexes as part of a negotiation with our lenders. As at December 31, 2020 our debt facilities and derivatives continue to be linked to the LIBOR interest rate index. We have set out our exposure to interest rate risk on our net debt obligations at December 31, 2020 in the table below: (In $ millions) Principal Hedging instruments Total Impact of 1% increase in rates Senior Credit Facilities 5,662 (4,500) 1,162 12 Ineffective portion of interest rate cap (1) — 4,500 4,500 45 Debt exposed to interest rate fluctuations 5,662 — 5,662 57 Less: Cash and Restricted Cash (723) — (723) (7) Net debt exposed to interest rate fluctuations (2) 4,939 — 4,939 50 (1) The 3-month LIBOR rate as at December 31, 2020 was 0.238%. At this date, the interest cap would mitigate none of the impact of a theoretical 1% point increase in LIBOR. (2) The $515 million of Senior Secured Notes are a fixed rate debt instrument and are therefore excluded from the above table. Gains and losses on derivatives reported in Consolidated Statements of Operations Gains and losses on derivatives reported in our Consolidated Statements of Operations included the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Loss recognized in the Consolidated Statement of Operations relating to derivative financial instruments Interest rate cap agreement (3) (37) (22) (6) Archer convertible debt instrument 3 — (9) 2 Loss on derivative financial instruments — (37) (31) (4) a) Interest rate cap This represents changes in fair value on our interest rate cap agreement referred above. b) Archer convertible debt instrument This represents gains and losses on the conversion option included within a $13 million convertible bond issued to us by Archer. Please see Note 32 - "Related party transactions" for further details. Derivative financial instruments included in our Consolidated Balance Sheets Derivative financial instruments included in our Consolidated Balance Sheets, within "other non-current assets" included the following: (In $ millions) Maturity date Applicable rate Outstanding principal - December 31, 2020 December 31, 2020 December 31, 2019 Interest rate cap June 2023 2.87% LIBOR cap 4,500 — 3 — 3 |
Fair values of financial instru
Fair values of financial instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair values of financial instruments | Note 34 - 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 as at December 31, 2020 and December 31, 2019 are as follows: December 31, 2020 December 31, 2019 (In $ millions) Fair Carrying Fair Carrying Assets Related party loans receivable (1) (Level 2) 379 379 395 488 Liabilities Secured credit facilities (2020: Level 3; 2019: Level 2) 1,193 5,662 5,464 5,549 Credit facilities contained within variable interest entities (Level 2) (2) — — 590 598 Senior Secured Notes (Level 1) 213 515 404 476 Related party loans payable by the VIE (Level 2) (2) — — 239 239 Related party loans payable (Level 3) 424 426 — — (1) Excludes Archer convertible debt receivable, which is measured at fair value. (2) Refer to Note 36 - "Variable Interest Entities" for further information on the Ship Finance SPV's deconsolidation. Level 1 The fair value of the Senior Secured Notes are derived using market traded value. We have categorized this at level 1 of the fair value hierarchy. Refer to Note 23 – "Debt" for further information. Level 2 Upon the adoption of fresh start accounting, the related party loans receivable from SeaMex and Seabras Sapura were recorded at fair value. We estimate the fair value to be equal to the carrying value after adjusting for expected credit losses on the loans. The debt is not freely tradable and cannot be recalled by us at prices other than specified in the loan note agreements. The loans were entered into at market rates. The loans are categorized as level 2 on the fair value hierarchy. Other trading balances with related parties are not shown in the table above and are covered in Note 32 - "Related party transactions". The fair value of other trading balances with related parties are also assumed to be equal to their carrying value after adjusting for expected credit losses on the receivables. Level 3 The fair values of the secured credit facilities as at December 31, 2020 are determined by reference to the fair value of the collateral of each facility, the rigs, as this is the expected amount recoverable on enforcement of an event of default. The fair values were derived using a discounted cash flow model of future free cash flows from each rig, using a weighted average cost of capital of 11.8%. We have categorized this at level 3 of the fair value hierarchy. The fair value of the secured credit facilities as at December 31, 2019, are derived using the discounted cash flow model, using a cost of debt of 6%, with reference to the expected contractual repayments under the agreements, which we categorized at level 2 of the fair value hierarchy. The change in the valuation approach is due to the debt default position in the current period. Refer to Note 23 - "Debt" for further information. The fair value of the related party loans payable were derived using a discounted cash flow model of future free cash flows based on the contractual cash flows under the bareboat charter agreement together with the LIBOR linked interest payments, as well as assumed cash outflows under the mandatory repurchase obligation at the end of the lease term. These cash flows were discounted using the Senior Secured Note yield of 37%. We have categorized this at level 3 on the fair value hierarchy. Refer to Note 32 - "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, 2020 and December 31, 2019 are as follows: December 31, 2020 December 31, 2019 (In $ millions) Fair Carrying Fair Carrying Assets Cash and cash equivalents ( Level 1) 526 526 1,115 1,115 Restricted cash (Level 1) 197 197 242 242 Marketable securities (Level 1) 8 8 11 11 Related party loans receivable - Archer convertible debt (Level 3) 13 13 35 35 Interest rate cap (Level 2) — — 3 3 Temporary equity Redeemable non-controlling interest (Level 3) — — 57 57 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 of the fair value 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, 2020 is calculated using well-established independent valuation techniques and counterparty non-performance credit risk assumptions. The calculation of the credit risk with regard to the interest rate cap 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 as level 2 of the fair value 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 with the instrument. We have categorized this at level 3 of the fair value hierarchy. Refer to Note 32 - "Related party transactions" for further information. Fair value considerations on one-time transactions Impairment of intangible assets |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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 results. Our best estimate of the outcome of the various disputes has been reflected in our Consolidated Financial Statements as at December 31, 2020. Seabras Sapura joint venture The Sapura Esmeralda operates under a Brazilian flag. The right to operate under such Brazilian flag is being challenged in the Brazilian courts. An adverse decision in the Brazilian courts could affect the operations of the Sapura Esmeralda and potentially impact its commercial agreements and related financing. In October 2020, an amicable settlement agreement between Sapura Navegação Maritima and the Federal Public Attorney (representing the Admiralty Court) was confirmed by the Brazilian Federal Court of Appeal and as a result, the Admiralty Court has issued the definitive Property Registry Certificate and Sapura Esmeralda has been granted the right to operate under a Brazilian flag. Dalian Newbuilds As at December 31, 2020, all eight of the newbuilding contracts with Dalian had been terminated by both parties. Accordingly, the Seadrill contracting entities had no contractual obligation to take delivery of the rigs. In January 2019, Dalian appointed an administrator to restructure its liabilities. In March 2019, the Seadrill contracting parties commenced arbitration proceedings in London for all eight rigs and will claim for the return of the paid installments plus interest and further damages for losses. The Seadrill contracting parties have filed their claims against Dalian in the Dalian insolvency and the administrator is currently considering whether to accept or reject the claims in the insolvency. The arbitrations are currently not being progressed by agreement of the parties, pending the insolvency administrator's decision whether to accept or reject the Seadrill contracting parties' claims. Dalian has stated that it has claims for damages in respect of each of the rigs, but it has not quantified those damages. The administrator convened a creditor’s meeting on December 23, 2020 for a vote on the draft reorganization plan that was submitted to the insolvency court. The first round of voting on the reorganization plan subsequently failed. A second round of voting will be arranged by the administrator. There is no deadline for such second round of voting to take place. The newbuilding contracts are all with limited liability subsidiaries of Seadrill. There are no parent company guarantees. Nigerian Cabotage Act litigation Seadrill Mobile Units Nigeria Ltd (“SMUNL”) commenced proceedings in May 2016 against the Honourable Minister for Transportation, the Attorney General of the Federation and the Nigerian Maritime Administration and Safety Agency with respect to interpretation of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Act”). On June 28, 2019, the Federal High Court of Nigeria delivered a judgement finding that: (1) Drilling operations fall within the definition of “Coastal Trade” or “Cabotage” under the Act and (2) Drilling Rigs fall within the definition of "Vessels" under the Act. The impact of this decision is that the Nigerian Maritime Administration and Safety Agency (“NIMASA”) may impose a 2% surcharge on contract revenue from offshore drilling operations in Nigeria as well as requiring SMUNL register for Cabotage with NIMASA and pay all fees and tariffs as may be published in the guidelines that may be issued by the Minister of Transportation in accordance with the Act. However, on 22 July, 2019, SMUNL filed an appeal to the Court of Appeal challenging the decision of the Federal High Court. Due to the volume of cases currently being handled by the Court of Appeal sitting in Lagos we anticipate a decision within 3-5 years. Although we intend to strongly pursue this appeal, we cannot predict the outcome of this case. We do not believe that it is probable that the ultimate liability, if any, resulting from this litigation will have a material effect on our financial position. Accordingly, no loss contingency has been recognized within the Consolidated Financial Statements. Oro Negro Oro Negro, a Mexican drilling rig contractor, filed a Complaint on June 6, 2019 in the United States Bankruptcy Court, Southern District of New York, within Chapter 15 proceedings ancillary to its Mexican insolvency process. The Complaint names Seadrill and its Seamex JV partner, Fintech Advisory, Inc, as co-defendants along with other defendants including Oro Negro bondholders. With respect to Seadrill, the Complaint asserts claims relating to alleged tortious interference but does not seek to quantify damages. On August 26, 2019, we submitted a motion to dismiss the Complaint on technical legal grounds. Gil White, the CEO of Oro Negro responded to this motion on October 25, 2019. Seadrill has the opportunity to reply to this in further support of the motion, the date of which has not yet been determined. We intend to vigorously defend against the claims Oro Negro asserts and dispute the allegations set forth in the Complaint. The proceedings have been stayed until March 26, 2021. Guarantees We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee: (In $ millions) December 31, 2020 December 31, 2019 Guarantees in favor of customers (1)(2)(3) 150 165 Guarantees in favor of banks (4) 132 146 Total 282 311 (1) Guarantees to Seadrill Partners - Guarantees in favor of customers are performance guarantees provided on behalf of Seadrill Partners of nil (December 31, 2019: $15 million). (2) Guarantees to Northern Ocean - Guarantees in favor of customers are performance guarantees provided on behalf of Northern Ocean of $100 million (December 31, 2019: $100 million) for a contract that matures in 2022. (3) Guarantees to Sonadrill - Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $50 million (December 31, 2019: $50 million). Contract maturity in 2021. (4) Guarantees to Seabras Sapura - Guarantees in favor of banks are guarantees provided by a subsidiary of Seadrill Limited on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $132 million (December 31, 2019: $146 million). Contractual maturity is not until 2021. As of December 31, 2020 we have not recognized any liabilities for the above guarantees, as we do not consider it is probable for the guarantees to be called. On March 26, 2020 we signed a joint sponsor guarantee with Fintech Investments Ltd over the senior secured debt held by SeaMex. The total amount guaranteed was up to $22 million of which were jointly and severally liable. On April 21, 2020, $16 million was called upon by the Seamex lenders under the terms of this guarantee, $8 million of which was provided by Seadrill Limited. Other contingencies Sevan Louisiana loss incident In January 2019, there was a loss incident on the Sevan Louisiana related to a malfunction of its subsea equipment. As of December 31, 2020, we have incurred $23 million of costs to repair the equipment. There is a $1.3 million deductible on the insurance policy. As at December 31, 2020, $15.3 million has been recovered and an additional $6.4 million will be recoverable under our physical damage insurance. The loss incident resulted in a period of downtime for the Sevan Louisiana . As a result, we have recovered $19.5 million insurance income from loss of hire of the Sevan Louisiana. The loss of hire claim is now closed. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Variable Interest Entities | Variable Interest Entities Variable Interest Entities - Primary beneficiary Between 2008 and 2013, we entered into sale and leaseback arrangements for two semi-submersible rigs and a jack-up rig (the West Taurus , West Hercules and West Linus ) with Ship Finance, who incorporated Ship Finance SPV's for the sole purpose of owning and leasing the drilling units to Seadrill. We concluded that we were the primary beneficiary of these companies and therefore consolidated them under the variable interest model. In the fourth quarter of 2020, Seadrill triggered an event of default on the leases by not curing the cross-default violation on Seadrill's secured credit facilities and for non-payment of SPV bareboat charter payments. This triggered a reassessment of whether we should still consolidate the SPV's under the variable interest model. Seadrill was no longer deemed to be the primary beneficiary as it no longer has control of the decisions that most significantly impact the SPV’s economic performance. As such, the net assets and corresponding non-controlling interest amount of $137 million (as Seadrill have no equity interest), have been deconsolidated, resulting in no gain or loss in the Consolidated Statement of Operations. As part of the deconsolidation the external debt of the SPV's and parent entity loans to Ship Finance have been derecognized. Refer to Note 32 - "Related Party Transactions" and Note 23 - "Debt". As at December 31, 2020, the Ship Finance SPV's continue to lease the three rigs to Seadrill under long-term charter agreements. The terms of the mandatory obligations to purchase the assets at the end of the lease for a fixed price. As no transfer of control has occurred as part of these leasing arrangements or on deconsolidation of the Ship Finance SPV's, the rigs form part of the 'Drilling Units' amount in the Consolidated Balance Sheet of Seadrill with the failed sale and leaseback transaction accounted for as a financing transaction. These have been described in Note 32 - "Related party transactions" following the deconsolidation of the SPV's. These contractual provisions, which remain in place despite the event of default, prevent the recognition of a sale under ASC 606 as control has not passed to the Ship Finance SPV's. As a result, these leases are accounted for as failed sale and leaseback transactions and the rigs remain within "Drilling Units" in the Consolidated Balance Sheet of Seadrill. With the financial liabilities relating to the leasing arrangements no longer eliminated on consolidation, these financial liabilities were initially reclassified at carrying values of $933 million to related party payables by virtue of Hemen's significant influence over Ship Finance. As the recognition of this related party payable upon deconsolidation is considered a remeasurement event (post-deconsolidation initial recognition), the liabilities were remeasured to an aggregate fair value of $424 million. The gain of $509 million is recognized in the Consolidated Statement of Operations. Along with this there was a subsequent amortization of the discount of debt of $2 million, for the period ended December 31, 2020. The balance sheet of the VIEs on a stand-alone basis at December 31, 2019 was as follows: December 31, 2019 Cash and cash equivalents 22 Investment in finance lease 972 Total assets of the VIEs 994 Short-term interest bearing debt 48 Long-term interest bearing debt 550 Other liabilities 5 Short-term amounts due to related parties 12 Long-term debt due to related parties (1) 239 Total liabilities of the VIEs 854 Equity of the VIEs 140 (1) Long-term debt due to related parties is as follows: (In $ millions) December 31, 2019 Debt principal outstanding 314 Debt discount (75) Trading liability positions held against long-term loan — Long-term loan due to related parties 239 Variable Interest Entities - Not the primary beneficiary Seadrill and Northern Ocean established a new company to act as rig operator for Northern Ocean’s rigs (“Seadrill Northern Operations Ltd” or “Northern Ocean VIE”). This company is a legal subsidiary of Seadrill but is consolidated by Northern Ocean under the variable interest consolidation model. Seadrill provides management and crewing services to the Northern Ocean VIE and charges a fee for doing so. Our maximum exposure to the VIE is a receivable of $142 million ( December 31, 2019: $60 million). Refer to Note 32 - "Related party transactions". We have guarantees to Northern Ocean of $100 million (December 31, 2019: $100 million) that are covered by an indemnity. Refer to - Note 35 – "Commitments and contingencies". |
Supplementary cash flow informa
Supplementary cash flow information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary cash flow information | Supplementary cash flow information The table below summarizes the non-cash investing and financing activities relating to the periods presented: Successor Predecessor Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Non-cash investing activities Proceeds from sale of West Epsilon rig (1) 12 — — — Non-cash financing activities Repayment of debt following sale of West Epsilon rig (1) (12) — — — (1) During September 2020, the West Epsilon was sold for net proceeds of $12 million. The proceeds were paid directly to the banks as an early repayment against our external debt. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent events Filing for Chapter 11 Protection On February 10, 2021, we filed petition for reorganization in a voluntary bankruptcy under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas in respect of Seadrill Limited and its consolidated subsidiaries with the exceptions of Seadrill New Finance Limited and its subsidiaries. On February 7, 2021 we filed the Chapter 11 cases separately for Seadrill GCC Operations Ltd, Asia Offshore Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2 Limited and Asia Offshore Rig 3 Limited. As part of the Chapter 11 Proceedings, we were granted "first day" relief to enable day-to-day operations of the Seadrill Group to continue as usual. Specifically, the relief included the authority to pay key trade creditors and employee wages and benefits without change or interruption and we expect we will pay all suppliers and vendors in full under normal terms for goods and services provided during the Chapter 11 Proceedings. The Chapter 11 Proceedings are opened to facilitate a balance sheet restructuring which will enable Seadrill Limited to continue to operate its modern fleet of drilling units. We expect that the Chapter 11 reorganization will lead to significant equitization of our debt and result in minimal or no recovery for current shareholders. Seadrill Limited has commenced parallel liquidation proceedings in Bermuda and on February 12, 2021, the Bermuda Supreme Court ordered the appointment of Joint Provisional Liquidators under Bermuda law to oversee the Chapter 11 Proceedings together with the Board of Directors of the Company. This is a non-adjusting event and therefore there has been no impact on the financial statements for the year ended December 31, 2020. Seadrill Partners On February 3, 2021 Seadrill Partners entered into a management agreement with Energy Drilling to maintain, market and operate the Seadrill Partners owned tender rigs T-15 , T-16 and West Vencedor . The agreement started a 90-day transition period of services provided from Seadrill Limited to Energy Drilling. On February 10, 2021 we received notification that Seadrill Partners have submitted a motion for the approval of a new framework agreement with Vantage Drilling for certain rigs in the Seadrill Partners Fleet. Forbearance agreement Senior Secured Notes On January 15, 2021 we determined not to make the semi-annual 4% cash interest payment due to the senior secured note holders. This constituted an additional event of default. On February 11, 2021, Seadrill entered into a forbearance agreement with holders of the Senior Secured Notes. Pursuant to the forbearance agreement, the consenting creditors have agreed not to exercise any enforcement rights for the semi-annual 4% cash interest payment, which was due to the senior secured note holders on 15 January 2021 in respect but not paid, until 24 February 2021.On February 23, 2021, this forbearance agreement was extended to March 10, 2021, and then extended again on March 9, 2021, to March 24, 2021, unless otherwise cancelled. West Taurus lease arrangement On February 12, 2021, we filed an order of rejection of the lease contract with respect to the West Taurus and consequently the lease has been rejected. We expect to hand over the West Taurus rig to Ship Finance in April 2021. Seadrill is responsible for the rig costs up until the delivery of the rig. The handover of West Taurus will result in reduction of our fleet to 33 drilling units. |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 include the financial statements of Seadrill Limited, its consolidated subsidiaries and any variable interest entity (" VIE |
Basis of consolidation | Basis of consolidation We consolidate investments in companies in which we control directly or indirectly more than 50% of the voting rights. |
Bankruptcy accounting | Bankruptcy accounting 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 Previous Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". For details of the Previous Chapter 11 process, refer to Note 4 |
Fresh Start Reporting | Fresh Start Reporting Upon emergence from bankruptcy on July 2, 2018 (the " Effective Date "), in accordance with ASC 852, Seadrill Limited became a new entity for financial reporting purposes. This meant fresh start reporting with our assets and liabilities recorded at their fair values. For details of the fresh start reporting refer to Note 5 - "Fresh Start Accounting". 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 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 reorganization plan and fresh start accounting were applied as of July 2, 2018. The new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related deferred tax effects through "Income tax expense", during the period from January 1, 2018 to 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 periods following the application of fresh start accounting are different from historical trends and the differences may be material. 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) or to any previously reported quarterly or annual financial statements. |
Presentation of rig management revenues and expenses | Presentation of rig management revenues and expense s |
Allowance for credit losses | Allowance for credit losses We adopted accounting standard update 2016-13 Measurement of Credit Losses on Financial Instruments effective January 1, 2020. The new guidance replaces the “incurred loss” model required under the previous guidance with a current “expected credit loss” (or CECL) model. The CECL model requires recognition of expected credit losses over the life of a financial asset upon its initial recognition. Comparative periods are presented under the previous guidance with an allowance against a receivable balance recognized only if it was probable that we would not recover the full amount due to us. We determined doubtful accounts on a case-by-case basis and considered the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. The CECL model contemplates a broader range of information to estimate expected credit losses over the contractual lifetime of an asset. It also requires to consider the risk of loss even if it is remote. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts of events which may affect the collectability. We estimate the CECL allowance using a “probability-of-default” model, calculated by multiplying the exposure at default by the probability of default by the loss given default by a risk overlay multiplier over the life of the financial instrument (as defined by ASU 2016-13). Our critical judgements relate to internal credit ratings and maturities used to determine probability of default, the subordination of debt to determine loss given default and the performance status of the receivable that can impact any management overlay. We determine management risk overlay based on management assessment of defaults, overdue amounts and other observable events that provide information on collection. Our internal credit ratings are based on the Moody’s scorecard approach (based on several quantitative and qualitative factors) and our approach relies on statistical data from Moody’s ‘Default and Ratings Analytics’ to derive the expected credit loss. We monitor the credit quality of receivables by re-assessing credit ratings, assumed maturities and probability-of-default on a quarterly basis. Due to the inherent uncertainty around these judgmental areas, it is at least reasonably possible that a material change in the CECL allowance can occur in the near term.We grouped financial assets with similar risk characteristics based on their contractual terms, historical credit loss pattern, internal and external credit ratings, maturity, collateral type, past due status and other relevant factors. The CECL model applies to external trade receivables, related party receivables and other financial assets measured at amortized cost as well as to off-balance sheet credit exposures not accounted for as insurance. We have elected to calculate expected credit losses on the combined balance of both the amortized cost and accrued interest from the unpaid principal balance. The allowance for credit losses reflects the net amount expected to be collected on the financial asset. Any change in credit allowance is reflected in the Consolidated Statement of Operations based on the nature of the financial asset receivable. |
Revenue from contracts with customers, and contract assets and liabilities | 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 with a customer. 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 of service. We recognize revenues for activities that correspond to a distinct time increment of service 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 of service, 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 8 - "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 service it relates to. Revenue is 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. 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. 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 expenses - 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. Contract assets and liabilities Accounts receivables are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. If we recognize revenue ahead of this point, we also recognize a contract asset. Contract assets balances relate primarily to demobilization revenues recognized during the period but are contingent on future demobilization activities. Contract liabilities include payments received for mobilization, rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. |
Other revenues and Management fees | Other revenues Other revenues consist of related party revenues, leasing income from rigs leased to Gulfdrill, external management fees, and early termination fees. Refer to Note 9 – "Other revenues". Revenue is recognized as the performance obligation is satisfied, which on our leased rigs is on a straight-line basis. 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. Management fees Management fees - Revenues related to operation support and management services provided to Seadrill Partners, Seamex, Sonadrill, Gulfdrill and Northern Ocean. This includes both related and non-related companies. |
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. |
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 do not expect the costs to be recoverable, in which case we expense them as incurred. |
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. |
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 exempted 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 14 – "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. 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. |
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 items of income and expense are translated using the average exchange rate for the period 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 denominated monetary assets and liabilities are remeasured using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. |
Loss per share | Loss per share Basic loss per share (“ LPS |
Fair value measurements | Fair value measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets. Hierarchy Level 2 inputs are significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets. Hierarchy Level 3 inputs are significant unobservable inputs, including those that require considerable judgment for which there is little or no market data.. When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. |
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 as current. Current liabilities will include where amounts from lenders are payable on demand at their discretion due to event of default clauses being met. |
Cash and cash equivalents | Cash and cash equivalentsCash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less. Amounts are presented net of allowances for credit losses. |
Restricted cash | Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts that are expected to be used after one year from balance sheet date are classified as non-current assets. Amounts are presented net of allowances for credit losses, which are assessed based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure. |
Receivables | Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount net of expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 18 – "Accounts receivable". |
Related parties | Related partiesParties 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. Amounts receivable from related parties are presented net of allowances for expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 32 –" Related party transactions" for details of balances and material transactions with related parties. |
Equity investments | Equity investments Investments in common stock are accounted for using the equity method if we have the ability to significantly influence, but not control, the investee. Significant influence is presumed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%,. We also consider other factors such as representation on the investee’s board of directors and the nature of commercial arrangements, We classify our equity investees as "Investments in Associated Companies". We recognize our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". Refer to Note 20 – "Investment in associated companies". We assess our equity method investments for impairment at each reporting period when events or circumstances suggest that the carrying amount of the investments may be impaired. 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. We consider (1) the length of time and extent to which fair value is below carrying value, (2) the financial condition and near-term prospects of the investee, and (3) our intent and ability to hold the investment until any anticipated recovery. If an impairment loss is recognized, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. Refer to Note 13 - "Impairment loss on investments in associated companies" for details. |
Newbuildings | NewbuildingsGenerally, 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. 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. |
Capitalized interest | We do not 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 the Previous Chapter 11, th e Newbuildings |
Drilling units, Repairs, maintenance and periodic surveys, and Equipment | 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. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated over the remaining life of the asset. Drilling units acquired in a business combination are measured at fair value at the date of acquisition. Drilling units were also remeasured to fair value when we applied fresh start accounting at the date of emergence. Cost of property and equipment sold or retired, with the related accumulated depreciation and impairment is removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. We re-assess the remaining useful lives of our drilling units when events occur which may impact our assessment of their remaining useful lives. These include changes in the operating condition or functional capability of our rigs, technological advances, changes in market and economic conditions as well as changes in laws or regulations affecting the drilling industry. 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. Equipment |
Assets held for sale | Assets held for saleAssets are classified as held for sale when all of the following criteria are met: management 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. |
Leases, Lessee | Lessee - When we enter into a new contract, or modify an existing contract, we identify whether that contract has a finance or operating lease component. We do not have, nor expect to have any leases classified as finance leases. We determine the lease commencement date by reference to the date the rig (or other leased asset) is available for use and transfer of control has occurred from the lessee. At the lease commencement date, we measure and recognize a lease liability and a right of use (" ROU ") asset in the financial statements. The lease liability is measured at the present value of the lease payments not yet paid, discounted using the estimated incremental borrowing rate (" IBR ") at lease commencement. The ROU asset is measured at the initial measurement of the lease liability, plus any lease payments made to the lessor at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred by us. After the commencement date, we adjust the carrying amount of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over the lease term using the effective interest method. After commencement date, we amortize the ROU asset by the amount required to keep total lease expense including interest constant (straight-line over the lease term). Absent an impairment of the ROU asset, the single lease cost is calculated so that the remaining cost of the lease is allocated over the remaining lease term on straight-line basis. Seadrill assesses a ROU asset for impairment and recognizes any impairment loss in accordance with the accounting policy on impairment of long-lived assets. We applied the following significant assumptions and judgments in accounting for our leases. • We apply judgment in determining whether a contract contains a lease or a lease component as defined by Topic 842. • 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. • 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. • 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 certai n 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. • Where a leasing arrangement is a failed sale and leaseback transaction as no transfer of control has occurred as defined by Topic 606, any monies received will be treated as a financing transaction. |
Leases, Lessor | Lessor - When we enter into a new contract, or modify an existing contract, we identify whether that contract has a sales-type, direct financing or operating lease. We do not have, nor expect to have any leases classified as sales-type or direct financing. For our operating lease, the underlying asset remains on the balance sheet and we record periodic depreciation expense and lease revenue. |
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 be generated 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, is the amount by which the carrying value of the asset exceeds the discounted future net cash flows. |
Other intangible assets and liabilities | Other intangible assets and liabilitiesIntangible assets and liabilities were recorded at fair value on the date of emergence from the Previous Chapter 11 less accumulated amortization. The amounts of these assets and liabilities less any estimated residual value are amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. We 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 19 – "Other assets". Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 24 – "Other liabilities". |
Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activitiesOur derivative financial instruments are measured at fair value and are not designated as a hedging instruments. Changes in fair value are recorded as a gain or loss as a separate line item within "financial items" in the Consolidated Statements of Operations. |
Trade payables | Trade payablesTrade payables are liabilities to a supplier for a good or service provided to us. |
Deferred charges | Deferred chargesLoan 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. The amortization is included in interest expense. On emergence from the Previous Chapter 11, our loan costs were reduced to nil. We recognized a discount on our debt to reduce its carrying value to its fair value. The debt discount was due to be unwound over the remaining terms of the debt facilities. In September 2020 and December 2020, there were events of default that resulted in the expense of the remaining unamortized debt discount of $87 million. |
Debt | DebtWe 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 incur a liability for the principal to be repaid. On emergence from the Previous Chapter 11, we issued new debt instruments. |
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 recognize the service cost, as “Vessel and rig operating expenses” or as "Selling, 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. Several defined benefit pension plans cover a number of our Norwegian employees that are all administered by a life insurance company. Our net obligation is calculated 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. 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. |
Loss contingencies | Loss contingenciesWe recognize a loss contingency in the Consolidated Balance Sheets 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. |
Treasury shares | Treasury sharesTreasury 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 the Previous Chapter 11, we no longer had any treasury shares. |
Share-based compensation | Share-based compensation Since emerging from the Previous Chapter 11, we have made several awards under our employee benefit plan (see Note 30 – "Share based compensation"), which have been cancelled in July 2020 for a cash payment. The compensation for our unvested awards at date of cancellation was based on the fair value of the Shares at the cancellation date. The cash compensation paid to settle the award was charged directly to equity. For our cancelled awards any remaining unrecognized compensation cost for unvested awards was recognized immediately on the settlement date. Before cancellation we expensed the fair value of stock-based compensation issued to employees and non-employees over the period the awards are expected to vest. The expense is classified as compensation cost and recognized ratably over the period during which the individuals are required to provide service in exchange for the reward – the requisite service (vesting) period. No compensation cost is recognized for stock-based compensation for which the individuals do not render the required service. To measure the fair values of granted or modified service-based restricted share units, we use the market price of our shares on the grant date or modification date. To measure the fair values of granted or modified stock options, we use the Black-Scholes-Merton option-pricing model and apply assumptions for the expected life, risk-free interest rate, expected volatility and dividend yield. To measure the fair values of granted or modified performance-based restricted share units subject to market factors, we use a Monte Carlo simulation model and, in addition to the assumptions applied for the Black-Scholes-Merton option-pricing model, we use a risk neutral approach and an average price at the performance start date. The offsetting entry is recorded directly to equity. |
Guarantees | Guarantees Guarantees issued by us, excluding those that are guaranteeing our own performance, are recognized at fair value at the time that the guarantees are issued and reported in "Other current liabilities" and "Other non-current liabilities". If it becomes probable that we will have to perform under a guarantee, we remeasure the liability if the amount of the loss can be reasonably estimated. The recognition of fair value is not required for certain guarantees such as the parent's guarantee of a subsidiary's debt to a third party. Financial guarantees written are assessed for credit losses and any allowance is presented as a liability for off-balance sheet credit exposures where the balance exceeds the collateral provided over the remaining instrument life. The allowance is assessed at the individual guarantee level, calculated by multiplying the balance exposed on default by the probability of default and loss given default over the term of the guarantee. |
Recently adopted and issued accounting standards | 1) Recently adopted accounting standards We adopted the following accounting standard updates (" ASUs ") in the year: a) ASU 2016-13 - Financial Instruments - Measurement of Credit Losses (Also 2018-19, 2019-04 & 2019-11) In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments, including ASU 2018-19, ASU 2019-04 and ASU 2019-11: Codification Improvements to Topic 326 ‘‘Financial Instruments-Credit Losses”. Topic 326 replaces the incurred loss impairment methodology (that recognizes losses when a probable threshold is met) with a requirement to recognize lifetime expected credit losses (measured over the contractual life of the instrument) immediately, based on information about past events, current conditions and forecasts of future economic conditions. Under the current expected credit loss ('CECL') measurement financial assets are reflected at the net amount expected to be collected from the financial asset, CECL measurement is applicable to financial assets measured at amortized cost as well as off-balance sheet credit exposures not accounted for as insurance (including financial guarantees). Using the modified retrospective method, reporting periods beginning after January 1, 2020 are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. On adoption of the CECL approach we recognized an initial credit allowance of $143 million through opening retained earnings on January 1, 2020. The allowance for credit losses is presented as a deduction from the asset’s amortized cost (or liability for off-balance sheet exposures) and the net balance shown on the Consolidated Balance Sheet with associated credit loss expense in the Consolidated Statement of Operations. The ECL allowance related primarily to subordinated loan receivables due from related parties (refer to Note 32 - "Related party transactions"). Our external customers are mostly international or national oil companies with high credit standing. We have historically had a very low incidence of credit losses from these customers. Therefore, adoption of the new guidance has not had a material impact on receivables due from our customers. b) 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 amendments in this ASU remove some disclosure requirements relating to transfers between Level 1 and Level 2 of the fair value hierarchy and introduce new disclosure requirements for Level 3 measurements. We adopted the disclosure improvements prospectively on January 1, 2020, which mainly relate to additional consolidated financial statements notes disclosure for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements (see Note 34 - "Fair values of financial instruments"). c) 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. We are required to adopt the codification improvements retrospectively using a cumulative-effect method to retained earnings of the earliest period presented herein, but the amendment had no impact on historic consolidation assessments or retained earnings. d) ASU 2020-03 Financial Instruments: Codification Improvements In March 2020, the FASB issued ASU 2020-03 Financial Instruments (Topic 825) - Codification Improvements. The amendments in this ASU propose seven clarifications to improve the understandability of existing guidance, including that fees between debtor and creditor and third-party costs directly related to exchanges or modifications of debt instruments include line-of-credit or revolving debt arrangements. We adopted the codification improvements that were effective on issuance from January 1, 2020 under the specified transition approach connected with each of the codification improvements. This amendment has not had a material impact on our consolidated financial statements or related disclosures, including retained earnings, as of January 1, 2020. e) Other accounting standard updates We additionally adopted the following accounting standard updates in the year which did not have any material impact on our Consolidated Financial Statements and related disclosures: • ASU 2017-04 Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. • ASU 2018-14 Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. • 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. • ASU 2019-04 Codification Improvements to Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. • ASU 2019-08 Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements—Share-Based Consideration Payable to a Customer. 2) Recently issued accounting standards Recently issued ASUs by the FASB that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods: a) ASU 2019-12 Income Taxes (Topic 740): Simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The guidance will be effective from January 1, 2021 on a mainly prospective basis, with early adoption permitted. This amendment will have no material impact on our consolidated financial statements or related disclosures, including retained earnings, as of January 1, 2021. b) ASU 2020-04 Reference Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04. The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The applicable expedients for us are in relation to modifications of contracts within the scope of Topics 310, Receivables, 470, Debt, and 842, Leases. This optional guidance may be applied prospectively from any date beginning March 12, 2020 and cannot be applied to contract modifications that occur after December 31, 2022. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures. c) Other accounting standard updates issued by the FASB As of March 19, 2021, 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. |
General Information (Tables)
General Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassification of Previously Reported Amounts | We have recast the comparative figures in the Consolidated Statement of Operations. The table below shows effects of this reclassification on the previously reported numbers. Consolidated Statement of Operations for the year ended December 31, 2019 (Successor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 264 (223) 41 Management contract revenues — 338 338 Other revenues 127 (115) 12 Vessel and rig operating expenses (770) 44 (726) Reimbursable expenses (262) 223 (39) Management contract expenses — (302) (302) Selling, general and administrative expenses (130) 35 (95) Consolidated Statement of Operations for the period from July 2, 2018 through December 31, 2018 (Successor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 26 (10) 16 Management contract revenues — 56 56 Other revenues 46 (46) — Vessel and rig operating expenses (357) 16 (341) Reimbursable expenses (24) 9 (15) Management contract expenses — (44) (44) Selling, general and administrative expenses (62) 19 (43) Consolidated Statement of Operations for the period from January 1, 2018 through July 1, 2018 (Predecessor) (In $ millions) As previously reported Adjustment As currently reported Reimbursable revenues 21 — 21 Management contract revenues — 38 38 Other revenues 72 (38) 34 Vessel and rig operating expenses (407) (10) (417) Reimbursable expenses (20) 2 (18) Management contract expenses — (45) (45) Selling, general and administrative expenses (100) 53 (47) |
Previous Chapter 11 Proceedin_2
Previous Chapter 11 Proceedings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Summary of restructuring shares | This is summarized in the below table: 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 Senior 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 % |
Schedule of reorganization items | The following table summarizes the components included within reorganization items: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Professional and advisory fees — — (9) (187) Gain on liabilities subject to compromise — — — 2,958 Fresh start valuation adjustments — — — (6,142) Interest income on surplus cash invested — — — 6 Total reorganization items, net — — (9) (3,365) |
Fresh Start Accounting (Tables)
Fresh Start Accounting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: 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: Ownership percentage Joint venture partner December 31, 2020 December 31, 2019 Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b) (a) (a) (a) Seabras Sapura (b) Sapura Energy 50.0 % 50.0 % SeaMex Ltd. ("SeaMex") (b) Fintech 50.0 % 50.0 % Sonadrill (b) Sonangol E.P. 50.0 % 50.0 % Gulfdrill (b) Gulf Drilling International 50.0 % 50.0 % (a) Refer to the Seadrill Partners subsidiaries paragraph below for additional information. For transactions with related parties refer to Note 32 - "Related party transactions". (b) We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 32 - "Related party transactions". At the year end, the book values of our investments in our associated companies were as follows: (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners - Direct ownership interest — 122 Seabras Sapura 103 98 Seabras Sapura Holding GmbH - shareholder loans held as equity 121 123 SeaMex Ltd — 22 Sonadrill 22 24 Gulfdrill 2 — Total 248 389 |
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: (In $ millions) 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 |
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: (In $ millions) 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 |
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. 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 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 Reorganization Adjustments: (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 Senior Secured Notes 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 (1) Pursuant to the Investment Agreement, on the Effective Date we received cash of $875 million for the issuance of Senior Secured Notes, consisting of $880 million par value notes net of $5 million pre-issuance accrued interest. Restricted Cash (In $ millions) Funding of the escrow account per terms of Senior Secured Notes 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 (e) Liabilities subject to compromise were settled as follows in accordance with the Plan: 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 Senior 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 Senior Secured Notes 880 Capitalized pre-issuance interest for Senior Secured Notes for 8% paid-in kind 10 Debt issuance cost in related to the issuance of the Senior Secured Notes (9) Discount on Senior 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 23,750,000 common shares at a per share price of $8.42 in connection with the equity commitment, 55 million common shares with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million common shares issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million common shares issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million common shares 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. Fresh Start Adjustments (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. (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. (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 Senior Secured Notes, unamortized debt issuance cost and lender consent fees. (In $ millions) July 2, 2018 Senior 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 Senior Secured Notes (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 common shares 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 SPV's and Seadrill Nigeria Operations Limited to fair value. |
Current expected credit losses
Current expected credit losses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Movement in allowance for credit losses and credit loss expense | The following table summarizes the movement in the allowance for credit losses for the year ended December 31, 2020. (In $ millions) Allowance for credit losses - trade receivables Allowance for credit losses - other current assets Allowance for credit losses - related party ST Allowance for credit losses related party LT Total Allowance for credit losses January 1, 2020 — — 15 128 143 Credit loss expense — 3 154 9 166 December 31, 2020 — 3 169 137 309 The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations. (In $ millions) Year ended December 31, 2020 Management contract expenses 142 Other financial items 24 Total 166 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment results | Segment results are evaluated on the basis of operating income and the information presented below is based on information used for internal management reporting. The change in reportable segments has been reflected retrospectively. Corresponding items of segment information for earlier periods have been recast. The remaining incidental revenues and expenses not included in the reportable segments are included in the "other" reportable segment. The below section splits out total operating revenue, depreciation, amortization of intangibles, operating net loss, drilling units and capital expenditures by segment: Total operating revenue Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 526 510 150 103 Floaters 358 625 273 476 Jack-up rigs 157 229 107 128 Other 18 24 11 5 Total 1,059 1,388 541 712 Depreciation Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 93 125 78 134 Floaters 176 224 120 179 Jack-up rigs 48 48 23 58 Other 29 29 15 20 Total 346 426 236 391 Amortization of intangibles Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 1 — (13) — Floaters — 105 50 — Jack-ups — 29 21 — Total 1 134 58 — Impairment of drilling units and intangible assets Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 419 — — 414 Floaters 3,555 — — — Jack-ups 86 — — — Other 48 — — — Total 4,108 — — 414 Operating net loss Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment (396) (69) (59) (562) Floaters (3,781) (201) (112) 42 Jack-ups (87) (2) — (73) Other (218) (23) (4) (20) Operating loss (4,482) (295) (175) (613) Unallocated items: Total financial items and other (176) (966) (422) (3,242) Loss before income taxes (4,658) (1,261) (597) (3,855) Drilling assets - Total assets (In $ millions) December 31, 2020 December 31, 2019 Harsh environment rigs 1,032 1,537 Floaters 528 4,184 Jack-up Rigs 560 680 Total Drilling Units 2,120 6,401 Unallocated items: Investments in Associated companies 248 389 Marketable securities 8 11 Cash and restricted cash 723 1,357 Other assets 862 1,121 Total assets 3,961 9,279 Drilling units - Capital expenditures (1)(2) Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Harsh environment 26 34 7 41 Floaters 110 111 72 69 Jack-ups 12 17 19 6 Total 148 162 98 116 (1) The successor periods include additions to equipment (2) Capital expenditure includes long term maintenance projects. |
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 Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Norway 480 469 117 82 United States 107 74 34 30 Saudi Arabia 98 130 78 79 Angola 89 215 29 100 Brazil 51 137 91 188 Nigeria — 198 108 105 Others (1) 234 165 84 128 Total Revenue 1,059 1,388 541 712 (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. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area are as follows: (In $ millions) December 31, 2020 December 31, 2019 Norway 1,044 1,818 Saudi Arabia 234 244 Malaysia 185 805 Qatar 151 54 USA 87 644 Brazil 79 332 Spain 49 615 Others (2) 291 1,889 Total 2,120 6,401 (1) 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. |
Schedule of customer with contract revenues by major customers | In the years e nded December 31, 2020, the year ended December 31, 2019, the period from July 2, 2018 through December 31, 2018 (Successor), and the period from January 1, 2018 through July 1, 2018 (Predecessor), we had the following customers with total revenues greater than 10% in any of the years presented: Successor Predecessor Segment Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 ConocoPhillips Harsh Environment 16 % 11 % 13 % 8 % Equinor Harsh Environment 12 % 16 % 7 % 5 % Northern Ocean Harsh Environment 12 % 12 % — % — % Saudi Aramco Jack-Ups 9 % 10 % 14 % 11 % LLOG Floaters 7 % 4 % 6 % 4 % Petrobras Floaters 5 % 7 % 10 % 23 % Total Floaters 4 % 18 % 24 % 19 % ExxonMobil Floaters — — % — % 10 % Other 35 % 22 % 26 % 20 % Total 100 % 100 % 100 % 100 % |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: (In $ millions) December 31, 2020 December 31, 2019 Accounts receivable, net 125 173 Current contract liabilities (deferred revenues) (1) (18) (20) Non-current contract liabilities (deferred revenues) (1) (13) (9) (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, 2020. Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2019 are as follows: (In $ millions) Contract Assets Contract Liabilities Net Contract Net contract liability at January 1, 2019 1 (21) (20) Amortization of revenue that was included in the beginning contract liability balance — 14 14 Cash received, excluding amounts recognized as revenue — (22) (22) Cash received against the beginning contract asset balance (1) — (1) Net contract liability at December 31, 2019 — (29) (29) Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2020 are as follows: (In $ millions) Contract Assets Contract Liabilities Net Contract Net contract liability at January 1, 2020 — (29) (29) Amortization of revenue that was included in the beginning contract liability balance — 23 23 Cash received, excluding amounts recognized as revenue — (25) (25) Net contract liability at December 31, 2020 — (31) (31) |
Other revenues (Tables)
Other revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenues [Abstract] | |
Other revenues | Other revenues consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Leasing revenues 19 1 — — Amortization of unfavorable contracts — — — 21 Early termination fees 11 11 — 13 Total other revenues 30 12 — 34 |
Other operating items (Tables)
Other operating items (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Operating Income (Loss) [Abstract] | |
Other operating items | Other operating items consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairment of long lived assets (i) (4,087) — — (414) Impairment of intangibles (ii) (21) — — — Gain on disposals (iii) 15 — — — Other operating income (iv) 9 39 21 7 Total other operating items (4,084) 39 21 (407) |
Other operating income | Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Loss of hire insurance settlement (a) 9 10 — — Receipt of overdue receivable (b) — 26 21 — Contingent consideration (c) — — — 7 Settlement with shipyard — 3 — — Total other operating income 9 39 21 7 a) Loss of hire insurance settlement Settlement of a claim on our loss of hire insurance policy following an incident on the Sevan Louisiana. b) Receipt of overdue receivables Receipt of overdue receivables which had not been recognized as an asset as part of fresh start accounting. c) Contingent consideration Amounts recognized for contingent consideration from the sales of the West Vela and West Polaris to Seadrill Partners in 2014 and 2015. On emergence from the Previous Chapter 11 Proceedings we recognized receivables equal to the fair value of expected future cash flows under these arrangements and have therefore not recognized further income in the 2018 Successor period and year ended 2019. |
Interest expense (Tables)
Interest expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Interest Expense [Abstract] | |
Net interest expense | Interest expense consists of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Cash and payment-in-kind interest on debt facilities (a) (338) (440) (237) (37) Unwind of discount debt (b) (44) (47) (24) — Write off of discount on debt (c) (87) — — — Other — — — (1) Interest expense (469) (487) (261) (38) (a) Cash and payment-in-kind interest on debt facilities We incur cash and payment-in-kind interest on our debt facilities. This is summarized in the table below. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Senior credit facilities and unsecured bonds (239) (327) (162) (116) Less: adequate protection payments — — — 104 Senior Secured Notes (60) (66) (50) — Debt of consolidated variable interest entities (39) (47) (25) (25) Cash and payment-in-kind interest (338) (440) (237) (37) |
Loss on impairment of investm_2
Loss on impairment of investments in associated companies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of impairment on marketable securities and investments | We have recognized the following impairment of our investments in associated companies in the Consolidated Statements of Operations within "Loss on impairment of investments". Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairments of Investment in associated companies and joint ventures Seadrill Partners - Direct ownership investments 47 248 — — Seadrill Partners - Seadrill member interest and IDRs — 54 — — Total impairment of investments in associated companies and joint ventures 47 302 — — Our share in results of our associated companies (net of tax) were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Seadrill Partners - Direct ownership interests (75) (107) (82) 77 Seadrill Partners - Subordinated units — (17) (20) 22 Seabras Sapura 20 29 24 46 SeaMex (22) (19) (12) 4 Sonadrill (2) (1) — — Gulfdrill 2 — — — Total share in results from associated companies (net of tax) (77) (115) (90) 149 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Income taxes consist of the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Current tax expense/(benefit): Bermuda — — — — Foreign 12 22 30 34 Deferred tax expense/(benefit): Bermuda — — — — Foreign (7) (61) (22) (4) Total tax expense/(benefit) 5 (39) 8 30 Effective tax rate (0.1) % 3.1 % (1.3) % (0.8) % |
Schedule of income tax reconciliation | The income taxes for the year ended December 31, 2020 (Successor), the year ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor), and the period from January 1, 2018 through July 1, 2018 (Predecessor) differed from the amount computed by applying the Bermuda statutory income tax rate of 0% as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Effect of change on unrecognized tax benefits (1) (6) 49 12 Effect of unremitted earnings of subsidiaries (2) (17) (10) — Effect of taxable income in various countries 8 (16) (31) 18 Total tax expense/(benefit) 5 (39) 8 30 |
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: (In $ millions) December 31, 2020 December 31, 2019 Pensions and stock options 1 2 Provisions 31 30 Net operating losses carried forward 251 259 Intangibles 4 — Other 3 — Gross deferred tax assets 290 291 Valuation allowance (219) (255) Deferred tax assets, net of valuation allowance 71 36 Deferred tax liabilities: (In $ millions) December 31, 2020 December 31, 2019 Property, plant and equipment 30 30 Unremitted Earnings of Subsidiaries 8 10 Deferred gain 34 — Intangibles — 4 Gross deferred tax liabilities 72 44 Net deferred tax liability (1) (8) |
Schedule of changes in uncertain tax positions | The changes to our balance related to unrecognized tax benefits were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Balance at the beginning of the period 89 132 61 55 Increases as a result of positions taken in prior periods 1 8 69 7 Increases as a result of positions taken during the current period — 29 18 1 Decreases as a result of positions taken in prior periods (4) (34) (9) (2) Decreases due to settlements (1) (46) (7) — Decreases as a result of a lapse of the applicable statute of limitations (3) — — — Balance at the end of the period 82 89 132 61 |
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. Jurisdiction Earliest Open Year Angola 2015 Nigeria 2014 United States 2016 Norway 2016 Brazil 2008 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted EPS | The components of the numerator for the calculation of basic and diluted LPS are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Net loss attributable to the parent (4,659) (1,219) (602) (3,881) Less: Allocation to participating securities — — — — Net loss available to stockholders (4,659) (1,219) (602) (3,881) Effect of dilution — — — — Diluted net loss available to stockholders (4,659) (1,219) (602) (3,881) The components of the denominator for the calculation of basic and diluted LPS are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Basic loss per share: Weighted average number of common shares outstanding 100 100 100 504 Diluted loss per share: Effect of dilution — — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 100 100 100 504 The basic and diluted loss per share are as follows: Successor Predecessor (In $) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Basic loss per share (46.43) (12.18) (6.02) (7.71) Diluted loss per share (46.43) (12.18) (6.02) (7.71) |
Restricted cash (Tables)
Restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Cash and Investments [Abstract] | |
Schedule of restricted cash | Restricted cash consists of the following: (In $ millions) December 31, 2020 December 31, 2019 Accounts pledged as collateral for Senior Secured Notes (1) 30 24 Accounts pledged as collateral for performance bonds and similar guarantees (2) 48 104 Demand deposit pledged as collateral for tax related guarantee (3) 65 83 Accounts pledged as collateral for leases (4) 22 — Other 32 31 Total restricted cash 197 242 (1) In 2019 and 2020, Seabras Sapura repaid $24 million and $6 million respectively of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of Senior Secured Notes. (2) On February 24, 2020 we agreed with Danske Bank to reduce our guarantee facility from $90 million to $45 million. As a result, the cash collateral required to be held was reduced. (3) We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet. (4) Certain accounts are pledged to the Ship Finance SPV's for lease arrangements for the West Taurus, West Linus and West Hercules . Following an event of default in the fourth quarter of 2020, a block was placed on these accounts. As such these accounts were reclassified as restricted. Restricted cash is presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, 2020 December 31, 2019 Current restricted cash 132 135 Non-current restricted cash 65 107 Total restricted cash 197 242 |
Marketable securities (Tables)
Marketable securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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. (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners- Common units — 2 Archer 8 9 Total marketable securities 8 11 |
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. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 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 (2) (43) (45) (5) Archer - unrealized (loss)/gain on marketable securities (1) (3) (19) 2 Total unrealized loss on marketable securities (3) (46) (64) (3) |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets [Abstract] | |
Schedule of other assets | As at December 31, 2020 and 2019 (Successor), other assets included the following: (In $ millions) December 31, 2020 December 31, 2019 Favorable drilling and management services contracts 10 33 Taxes receivable 32 38 Prepaid expenses (1) 67 33 Right of use asset (2) 57 35 Reimbursable amounts due from customers (3) 11 21 Deferred contract costs 14 12 Derivative asset - interest rate cap (4) — 3 Insurance receivable 4 14 Other (5) 37 28 Total other assets 232 217 (1) As at December 31, 2020 includes legal and advisory fees relating to the Chapter 11 process. (2) Refer to Note 25 - "Leases" for further information. (3) Includes related party balance s of $5 million from Northern Ocean. For further information refer to Note 32 - "Related party transactions". (4) Refer to Note 33 - "Financial instruments and risk management". (5) As at December 31, 2020 includes $17 million D&O insurance relating to tail back claims in the Chapter 11 process. Other assets are presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, 2020 December 31, 2019 Other current assets 186 158 Other non-current assets 46 59 Total other assets 232 217 |
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: December 31, 2020 December 31, 2019 (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 (254) 33 287 (101) 186 Impairment of favorable contracts (1) (21) — (21) — — — Amortization of favorable contracts — (2) (2) — (153) (153) Balance at end of period 266 (256) 10 287 (254) 33 |
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: (In $ millions) Period ended December 31, 2021 2022 2023 2024 2025 and thereafter Total Amortization of favorable contracts 1 1 1 1 6 10 |
Investment in associated comp_2
Investment in associated companies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of ownership percentages and book values 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: Ownership percentage Joint venture partner December 31, 2020 December 31, 2019 Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b) (a) (a) (a) Seabras Sapura (b) Sapura Energy 50.0 % 50.0 % SeaMex Ltd. ("SeaMex") (b) Fintech 50.0 % 50.0 % Sonadrill (b) Sonangol E.P. 50.0 % 50.0 % Gulfdrill (b) Gulf Drilling International 50.0 % 50.0 % (a) Refer to the Seadrill Partners subsidiaries paragraph below for additional information. For transactions with related parties refer to Note 32 - "Related party transactions". (b) We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 32 - "Related party transactions". At the year end, the book values of our investments in our associated companies were as follows: (In $ millions) December 31, 2020 December 31, 2019 Seadrill Partners - Direct ownership interest — 122 Seabras Sapura 103 98 Seabras Sapura Holding GmbH - shareholder loans held as equity 121 123 SeaMex Ltd — 22 Sonadrill 22 24 Gulfdrill 2 — Total 248 389 |
Share in results from associated companies | We have recognized the following impairment of our investments in associated companies in the Consolidated Statements of Operations within "Loss on impairment of investments". Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Impairments of Investment in associated companies and joint ventures Seadrill Partners - Direct ownership investments 47 248 — — Seadrill Partners - Seadrill member interest and IDRs — 54 — — Total impairment of investments in associated companies and joint ventures 47 302 — — Our share in results of our associated companies (net of tax) were as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Seadrill Partners - Direct ownership interests (75) (107) (82) 77 Seadrill Partners - Subordinated units — (17) (20) 22 Seabras Sapura 20 29 24 46 SeaMex (22) (19) (12) 4 Sonadrill (2) (1) — — Gulfdrill 2 — — — Total share in results from associated companies (net of tax) (77) (115) (90) 149 |
Summary of Consolidated Statements of Operations for our equity method investees | The results of the Direct ownership interests in Seadrill Partners and its subsidiaries and our share in those results (net of tax) were as follows: Seadrill Partners 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 Operating revenues (1) 750 426 612 Net operating (loss)/income (1) 51 100 257 Net (loss)/income (1) (187) (127) 201 Net (loss)/income allocated to subsidiaries of Seadrill Partners (1) (92) (59) 77 Losses not recognized — — — Amortization of basis differences (15) (23) — Share in results of Seadrill Partners (net of tax) (107) (82) 77 Net (loss)/income allocated to SDLP subordinated units (17) (15) 22 Amortization of basis differences — (5) — Share in results of the subordinated units of Seadrill Partners (net of tax) (17) (20) 22 (1) The 'Summary of Consolidated Statements of Operations' has not been included for Seadrill Partners for the period ending December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020 and thus our share in results of Seadrill Partners did not incorporate results for the period from April 1, 2020 to December 1, 2020. The share in results of a loss of $75 million represents Seadrill's share for the period before the investment was reduced to nil. 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 360 434 232 241 Net operating income 103 198 124 125 Net income 75 113 88 92 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net income 38 57 44 46 Amortization of basis differences (18) (28) (20) — Share in results from Seabras Sapura (net of tax) 20 29 24 46 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, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 234 232 118 121 Net operating income 49 70 40 40 Net (loss)/income (13) 18 4 7 Seadrill ownership percentage 50 % 50 % 50 % 50 % Share of net (loss) / income (6) 9 2 4 Amortization of basis differences (16) (28) (14) — Share in results from SeaMex (net of tax) (22) (19) (12) 4 The results of the Sonadrill companies and our share in those results (net of tax) were as follows: Sonadrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 56 22 — — Net operating income (2) (1) — — Net income (5) (2) — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income (2) (1) — — Share in results from Sonadrill (net of tax) (2) (1) — — The results of the Gulfdrill companies and our share in those results (net of tax) were as follows: Gulfdrill Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Operating revenues 44 — — — Net operating income 6 — — — Net income 4 — — — Seadrill ownership percentage 50 % 50 % — % — % Share of net income 2 — — — Share in results from Gulfdrill (net of tax) 2 — — — |
Summarized Consolidated Balance sheets for our equity method investees | The summarized balance sheets of the directly owned subsidiaries of Seadrill Partners and our share of equity in those companies was as follows: Seadrill Partners (In $ millions) December 31, 2019 Current assets 833 Non-current assets 4,847 Current liabilities (533) Non-current liabilities (2,623) Net Assets (2) 2,524 Seadrill share of book equity 1,305 Basis difference allocated to rigs (1) (1,220) Basis difference allocated to contracts (1) 37 Book equity allocated to direct investments in subsidiaries of Seadrill Partners 122 (1) In 2020, an impairment of $47 million (December 31, 2019: $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" reducing the balance of our investment in Seadrill Partners to nil. See Note 13 – "Impairment loss on investments in associated companies". (2) The 'Summary Consolidated Balance sheet' has not been included for Seadrill Partners as at December 1, 2020. Seadrill Partners on the date of issuance of these consolidated financial statements have yet to issue consolidated statements for the year ending December 31, 2020 that comply with U.S. GAAP and would be impractical to obtain the results for the year ended December 31, 2020. Furthermore, our associated investment was substantially written down through impairment in the year ending December 31, 2019 and was fully impaired to nil carrying value in the first quarter of 2020. The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows: Seabras Sapura (In $ millions, unless otherwise stated) December 31, 2020 December 31, 2019 Current assets 207 195 Non-current assets 1,474 1,495 Current liabilities (541) (510) Non-current liabilities (419) (504) Net Assets 721 676 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 361 338 Shareholder loans held as equity (1) 121 123 Basis difference allocated to rigs (351) (369) Basis difference allocated to contracts 93 129 Total adjustments (137) (117) Book value of Seadrill investment 224 221 (1) In 2020, Seabras Sapura repaid $2 million (December 31, 2019: $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 (In $ millions) December 31, 2020 December 31, 2019 Current assets 291 260 Non-current assets 898 939 Current liabilities (174) (141) Non-current liabilities (555) (586) Net Assets 460 472 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 230 236 Basis difference allocated to rigs (325) (341) Basis difference allocated to contracts 95 127 Total adjustments (230) (214) Book value of Seadrill investment — 22 The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows: Sonadrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 54 57 Non-current assets — — Current liabilities (11) (9) Non-current liabilities — — Net Assets 43 48 Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 22 24 Book value of Seadrill investment 22 24 The summarized balance sheets of the Gulfdrill companies and our share of recorded equity in those companies was as follows: Gulfdrill (In $ millions) December 31, 2020 December 31, 2019 Current assets 67 — Non-current assets 102 — Current liabilities (135) — Non-current liabilities (31) — Net Assets 3 — Seadrill ownership percentage 50 % 50 % Seadrill share of book equity 2 — Book value of Seadrill investment 2 — |
Drilling units (Tables)
Drilling units (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of drilling units | Changes in drilling units for the periods presented in this report were as follows: (In $ millions) Cost Accumulated depreciation Net book value January 1, 2019 6,890 (231) 6,659 Additions 158 — 158 Depreciation — (416) (416) December 31, 2019 7,048 (647) 6,401 Additions 147 — 147 Depreciation — (341) (341) Impairment (4,087) — (4,087) December 31, 2020 (1)(2) 3,108 (988) 2,120 |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Equipment consists of office equipment, software, furniture and fittings. Changes in equipment balances for the periods presented in this report were as follows: (In $ millions) Cost Accumulated depreciation Net book value January 1, 2019 34 (5) 29 Additions 4 — 4 Depreciation — (10) (10) December 31, 2019 38 (15) 23 Additions 1 — 1 Depreciation — (5) (5) December 31, 2020 39 (20) 19 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt and Balance Sheet Presentation | As at December 31, 2020 and 2019, we had the following liabilities for third party debt agreements: (In $ millions) December 31, 2020 December 31, 2019 Secured credit facilities (a) 5,662 5,662 Senior Secured Notes (b) 515 476 Credit facilities contained within variable interest entities — 621 Total debt principal 6,177 6,759 Less: debt discount and fees — (136) Carrying value 6,177 6,623 This was presented in our Consolidated Balance Sheets as follows. (In $ millions) December 31, 2020 December 31, 2019 Debt due within one year 6,177 343 Long-term debt — 6,280 Total debt principal 6,177 6,623 |
Schedule of Debt Maturities | The outstanding debt as at December 31, 2020 is repayable as follows: (In $ millions) December 31, 2020 2021 6,177 2022 and thereafter — Total debt principal 6,177 |
Schedule of Credit Facilities, and Related Covenants and Restrictions | We have summarized the key terms of our secured credit facilities as at December 31, 2020 in the table below: Facility name Maturity (1) Total ACE drawdowns ($m) Main facility Total ($m) Margin on LIBOR floating interest (2) Collateral vessels Book value of collateral vessels ($m) Notes $400 million facility 4Q 2022 17 121 138 3.50% West Cressida West Callisto West Leda 142 $2,000 million facility 1Q 2023 80 832 912 3.00% West Alpha West Venture West Phoenix West Navigator West Elara 548 $440 million facility 3Q 2023 6 60 66 4.25% West Telesto 54 $1,450 million facility 4Q 2023 13 316 329 3.35-4.00% West Tellus 79 (3) $360 million facility 4Q 2023 18 99 117 3.75% AOD I AOD II AOD III 183 $300 million facility 1Q 2024 6 141 147 4.00% West Tucana West Castor 97 $1,750 million facility 1Q 2024 70 824 894 3.50-3.90% Sevan Driller Sevan Brasil Sevan Louisiana 8 (3) $450 million facility 2Q 2022 24 246 270 3.50% West Eminence — $1,500 million facility 4Q 2024 40 1,106 1,146 2.70-4.78% West Saturn West Neptune West Jupiter 206 (3) $1,350 million facility 4Q 2024 38 923 961 3.00% West Pegasus West Gemini West Orion 55 $950 million facility 4Q 2024 38 539 577 3.00-4.42% West Eclipse West Carina 51 (3) $450 million facility (2015) 4Q 2024 9 96 105 3.85% West Freedom West Vigilant West Prospero West Ariel 82 Total secured credit facilities 5,662 (1) The maturities above are based on the contractual maturities, before taking into account the event of default. (2) The margins above relate to the main facility contractual rates and do not account for the higher margins attributable to the ACE facility. (3) Certain debt facilities are split into different tranches set at different margins. 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 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 |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Other liabilities | As at December 31, 2020 and December 31, 2019, other liabilities included the following: (In $ millions) December 31, 2020 December 31, 2019 Taxes payable 29 33 Contract liabilities 31 29 Unfavorable drilling contracts 7 8 Employee withheld taxes, social security and vacation payments 47 51 Accrued interest expense 38 40 Accrued expenses 110 137 Lease liabilities 68 36 Uncertain tax positions 79 83 Other liabilities 27 33 Total Other Liabilities 436 450 Other liabilities are presented in our Consolidated Balance Sheet as follows: (In $ millions) December 31, 2020 December 31, 2019 Other current liabilities 316 322 Other non-current liabilities 120 128 Total Other Liabilities 436 450 |
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: December 31, 2020 December 31, 2019 (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) 58 (8) (66) 39 (27) Amortization of unfavorable contracts — 1 1 — 19 19 Balance at end of period (66) 59 (7) (66) 58 (8) |
Schedule of expected amortization of unfavorable contracts | The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods: (In $ millions) Period ended December 31, 2021 2022 2023 2024 2025 and thereafter Total Amortization of unfavorable contracts 1 1 1 1 3 7 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Future undiscounted cash flows for operating leases and reconciliation to operating lease liability | For operating leases where we are the lessee, our future undiscounted cash flows are as follows: (In $ millions) Year ended December 31, 2020 2021 60 2022 16 2023 2 2024 and thereafter 1 Total 79 The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheet as at December 31, 2020: (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Total undiscounted cash flows 79 45 Less short term leases — (1) Less discount (11) (8) Operating lease liability 68 36 Of which: Current 51 12 Non-current 17 24 |
Supplementary information regarding lease accounting | The following table gives supplementary information regarding our lease accounting at December 31, 2020: (In $ million) Year ended December 31, 2020 Year ended December 31, 2019 Operating Lease Cost: Operating lease cost 19 12 Short-term lease cost 2 1 Total lease cost 21 13 Other information: Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 21 13 Right-of-use assets obtained in exchange for operating lease liabilities during the period 53 19 Weighted-average remaining lease term in months 19 18 Weighted-average discount rate 32 % 13 % |
Operating subleases and leases, lessor, future undiscounted cash flows, and income | (In $ millions) Year ended December 31, 2020 2021 28 2022 28 2023 28 2024 22 2025 and thereafter 19 Total 125 Refer to Note 9 - "Other revenues" for comparative information on income from operating leases. |
Common shares (Tables)
Common shares (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Change in common shares | Changes in common shares for the periods presented in this report were as follows: Issued and fully paid share capital $0.10 par value each Shares $ millions December 31, 2018 100,000,000 10 RSU share issuance 234,973 — December 31, 2019 100,234,973 10 RSU share issuance 149,462 — December 31, 2020 100,384,435 10 |
Non-controlling interest (Table
Non-controlling interest (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in non-controlling interest | Changes in non-controlling interests for the periods presented in this report were as follows: (In $ millions) North Atlantic Drilling Ltd Sevan Drilling Limited Asia Offshore Drilling Ltd Ship Finance SPV's Seadrill Nigeria Operations Limited Total January 1, 2019 — — — 145 7 152 Net (loss)/income attributable to non-controlling interest in 2019 — — — (5) 4 (1) December 31, 2019 — — — 140 11 151 Net loss attributable to non-controlling interest in 2020 — — — (3) — (3) Share buyback of Heirs Holding shares in Seadrill Nigeria Operations — — — — (11) (11) Deconsolidation of Ship Finance SPV's — — — (137) — (137) December 31, 2020 — — — — — — |
Redeemable non-controlling in_2
Redeemable non-controlling interest (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of changes in redeemable non-controlling interest | Changes in redeemable non-controlling interests for the periods presented in this report were as follows: (In $ millions) Asia Offshore Drilling Ltd January 1, 2019 38 Net loss attributable to redeemable non-controlling interest (2) Fair value adjustment 21 December 31, 2019 57 Net loss attributable to redeemable non-controlling interest (1) Fair value adjustment (25) Acquisition of NCI (31) December 31, 2020 — |
Accumulated other comprehensi_2
Accumulated other comprehensive income/(loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income/(loss) | Changes in accumulated other comprehensive income/(loss) for the periods presented in this report were as follows: (In $ millions) Actuarial gain/(loss) relating to pension Share in unrealized losses from associated companies Change in debt component on Archer facility Total January 1, 2019 1 (5) (3) (7) Other comprehensive (loss)/income (1) (8) 3 (6) December 31, 2019 — (13) — (13) Other comprehensive (loss)/income (2) (15) 4 (13) December 31, 2020 (2) (28) 4 (26) |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based compensation expense | The share-based compensation expense for our share options and Restricted Stock Unit (" RSU ") plans in the Consolidated Statements of Operations are as follows: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Share-based compensation expense (1) 8 5 — 9 Total share-based compensation expense 8 5 — 9 (1) 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 the Previous Chapter 11 Proceedings. This was classified within reorganization items. |
Pension benefits (Tables)
Pension benefits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of consolidated balance sheet position | Consolidated Balance Sheet position Net defined benefit pension asset/(obligation) is as follows: (In $ millions) December 31, 2020 December 31, 2019 Defined benefit obligation - Non-current liabilities — (2) Deferred tax asset 1 1 Net defined benefit pension asset/(obligation) 1 (1) |
Schedule of annual pension cost | Annual pension cost We record pension costs in the period during which the services are rendered by the employees. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Service cost 1 3 2 1 Interest cost on prior years’ benefit obligation — 1 1 — Gross pension cost for the year 1 4 3 1 Expected return on plan assets — (1) (1) — Net pension cost for the year 1 3 2 1 Impact of settlement/curtailment of defined benefit plans 1 — — Total net pension cost 2 3 2 1 |
Schedule of funded status of the defined benefit plan | The funded status of the defined benefit plan Funded defined benefit pension obligation is as follows: (In $ millions) December 31, 2020 December 31, 2019 Projected defined benefit obligations (16) (40) Plan assets at market value 16 39 Funded defined benefit pension obligation — (1) |
Change in projected benefit obligations | Change in projected benefit obligations Change in projected benefit obligation is as follows: (In $ millions) December 31, 2020 December 31, 2019 December 31, 2018 Projected benefit obligations at beginning of period 40 37 36 Interest cost — 1 1 Service cost 1 3 1 Benefits paid (1) (2) (1) Change in unrecognized actuarial gain 2 — 2 Settlement (1) (25) — — Foreign currency translations (1) 1 (2) Projected benefit obligations at end of period 16 40 37 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. |
Change in pension plan assets | Change in pension plan assets Change in pension plan assets is as follows: (In $ millions) December 31, 2020 December 31, 2019 December 31, 2018 Fair value of plan assets at beginning of year 39 33 33 Estimated return — 1 1 Contribution by employer 6 6 — Benefits paid (1) (2) (1) Actuarial gain — — 2 Settlement (1) (27) — — Foreign currency translations (1) 1 (2) Fair value of plan assets at end of year 16 39 33 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. |
Schedule of assumptions used in calculation of pension obligations | Assumptions used in calculation of pension obligations Successor Predecessor Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Rate of compensation increase at the end of year 2.25 % 2.25 % 2.75 % 2.50 % Discount rate at the end of year 1.70 % 2.30 % 2.60 % 2.40 % Prescribed pension index factor 1.20 % 2.00 % 2.00 % 2.00 % Expected return on plan assets for the year 2.60 % 2.60 % 2.60 % 2.40 % Employee turnover 4.00 % 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.00 % 2.50 % 2.50 % 2.25 % |
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 December 31, 2020 December 31, 2019 Equity securities 7.2 % 13.6 % Debt securities 68.2 % 58.4 % Real estate 13.6 % 11.0 % Money market 10.6 % 16.5 % Other 0.4 % 0.5 % Total 100.0 % 100.0 % |
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, 2021-2030. The expected payments are based on the assumptions used to measure our obligations at December 31, 2020 and include estimated future employee services. (In $ millions) December 31, 2020 2021 1 2022 1 2023 1 2024 1 2025-2030 3 Total payments expected during the next 10 years 7 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The below table provides an analysis of related party revenues for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Management fee revenues (a) 135 113 46 37 Reimbursable revenues (b) 148 218 9 — Related party inventory sales 1 1 1 1 Other 2 — — — Total related party operating revenues 286 332 56 38 (a) We provide management and administrative services to Seadrill Partners, SeaMex and Sonadrill and operational and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We recognized reimbursable revenues from Northern Ocean for work to perform the first mobilization of the Northern Ocean rigs, West Mira and West Bollsta . As at December 31, 2020 our Consolidated Balance Sheet included $142 million of receivables from Northern Ocean (December 31, 2019: $60 million), before deducting allowances for credit losses. This included $137 million of billed and unbilled trade receivables (December 31, 2019: $55 million), which have been classified within the line item "amount due from related parties", and $5 million of costs incurred not yet billable to Northern Ocean (December 31, 2019: $5 million), which have been classified with "Other Assets". The below table provides an analysis of related party operating expenses for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 In country support services expenses (c) — — — 1 Related party inventory purchases 1 1 — — Other related party operating expenses (d) 1 2 1 3 West Bollsta lease (e) 10 — — — Total related party operating expenses 12 3 1 4 (c) Seadrill Partners previously provided us in country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us in country support services for the West Pegasus and West Freedom when those rigs operated in Mexico and Venezuela. (d) 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. (e) Seadrill entered a charter agreement to lease the West Bollsta rig from Northern Ocean in 2020. Refer to Note 25 - "Leases" for details. The below table provides an analysis of related party financial income for periods presented in this report. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Interest income (f) 24 29 17 12 Interest income recognized on deferred contingent consideration (g) 2 4 1 2 Total related party financial items 26 33 18 14 (f) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). (g) We record interest income on deferred consideration receivables from Seadrill Partners (see item (i) below). (In $ millions) December 31, 2020 December 31, 2019 Related party loans and interest (h) 516 488 Deferred consideration arrangements (i) 3 31 Convertible bond (j) 13 35 Trading balances (k) 251 150 Allowance for expected credit loss (l) (306) — Total related party receivables 477 704 Of which: Amounts due from related parties - current 85 181 Amounts due from related parties - non-current 392 523 (h) We have loan receivables outstanding from SeaMex and Seabras Sapura. We have summarized the amounts outstanding in the table below: (In $ millions) December 31, 2020 December 31, 2019 SeaMex seller's credit and loans receivable 452 422 Seabras loans receivable 64 66 Total related party loans and interest 516 488 SeaMex loans include: 1) $250 million "sellers credit" provided to SeaMex in March 2015 which matured in December 2019 but is subordinated to SeaMex's external debt facility, which matures in March 2022. We have classified this balance as non-current on our Consolidated Balance Sheets. 2) $45 million working capital loan advanced in November 2016. 3) $149 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% plus LIBOR and are subordinated to SeaMex's external debt facility. 4) $8 million Sponsor Minimum Liquidity Shortfall. The loan earns interest at 6.5% plus 3 -month U.S. LIBOR. Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $64 million balance shown in the table above includes (i) $50 million of loan principal and (ii) $14 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. 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. Refer to Note 20 - "Investments in associated companies" for details. Seabras Sapura repaid $6 million of its outstanding loan balances in April 2020, $4 million relating to its loan facility and $2 million relating to its shareholder loans. (i) 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: (In $ millions) December 31, 2020 December 31, 2019 West Vela - Mobilization receivable 2 17 West Vela - Share of dayrate 1 14 Total deferred consideration receivable 3 31 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 recognized only when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items . The West Polaris was settled in 2019. We recorded the following gains in other operating income for these arrangements. Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 West Vela earn out realized — — — 7 Total contingent consideration recognized — — — 7 (j) 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. 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, 2019 , Archer were in negotiations with their lenders to refinance their debt obligations, which we expected to result in an extension to maturities for all lenders, including Seadrill. We have determined the fair value of the bond using cashflows discounted at the rate of 14%. We assumed the maturity date to be deferred to December 2024. As a result, we recorded an other than temporary impairment against our investment in the convertible bond issued to us by Archer of $11 million. On March 13, 2020, Archer announced completion of a refinancing, which included agreed renegotiated terms on the convertible loan. The updated terms amended the loan balance to $13 million that bears interest of 5.5%, matures in April 2024 and an equity conversion option. The renegotiated terms resulted in a $29 million impairment recognized following a reduction in the loan balance and an increase to the discount rate. The fair value of the convertible debt instrument as at December 31, 2020 was $13 million of which the split between debt and embedded derivative option was $10 million and $3 million respectively. Refer to Note 34 - "Fair values of financial instruments" for details. The fair value gain/ (loss) on the convertible bond for periods presented is summarized below: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Other than temporary impairment (29) (11) — — Fair value gain/ (loss) of Archer debt component 4 3 (3) 2 Fair value gain/ (loss) of Archer embedded conversion option 3 — (9) 2 (k) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Ocean and Sonadrill for related party management fees, crewing fees and payroll recharges. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. As set out below, we have established credit loss allowances for balances that have not been settled in line with these payment terms and are overdue. (l) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 - Measurement of Credit Losses on Financial Instruments. Refer to Note 6 – "Current expected credit losses" for details. The below table provides an analysis of related party payable balances for periods presented in this report. (In $ millions) December 31, 2020 December 31, 2019 Related party loans payable by Ship Finance SPVs to Ship Finance (m) — 239 Liabilities from Seadrill to Ship Finance SPVs (n) 426 — Trading balances (o) 7 19 Total related party liabilities 433 258 Of which: Amounts due to related parties - current (7) (19) Long-term debt due to related parties (426) (239) (m) At December 31, 2019, we had recognized $239 million of long-term related party liabilities due from the fully consolidated Ship Finance SPV’s to Ship Finance (parent financing). The principal outstanding on the loans was $314 million at December 31, 2019. Following the deconsolidation of the SPVs in the fourth quarter of 2020 this loan was derecognized. Refer to Note 36 - "Variable Interest Entities" for further details. The loans bear interest at a fixed rate of between 1% to 4.5% per annum and mature between 2023 and 2029 . The total interest expense incurred for the year ended December 31, 2019 was $14 million, the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million and the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 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”. As at December 31, 2019 the trading position was a net liability position of nil. (n) Following the deconsolidation, we recognized the liability between Seadrill and the SPV's that was previously eliminated on consolidation. On initial recognition the carrying value of Seadrill’s liability with the SPV's of $933 million was measured to the fair value of the liability of $424 million (post deconsolidation initial recognition value). Along with this, there was $2 million of unwinding of the discount of debt for the year ended December 31,2020. The following table gives a summary of the sale and leaseback arrangements and repurchase options with Ship Finance, as at December 31, 2020: (In $ millions) West Taurus West Hercules West Linus Total Maturity date Dec 2024 Dec 2024 May 2029 Remaining lease payments 191 184 393 768 Purchase obligation 154 138 86 378 Total commitment 345 322 479 1,146 Fair value on initial recognition 146 136 142 424 Book value 147 137 142 426 (In $ thousands) 2021 2022 2023 2024 2025 and thereafter West Taurus 96 96 181 177 — West Hercules 96 96 183 176 — West Linus 99 92 189 153 122 |
Financial instruments and ris_2
Financial instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 in the table below: (In $ millions) Principal Hedging instruments Total Impact of 1% increase in rates Senior Credit Facilities 5,662 (4,500) 1,162 12 Ineffective portion of interest rate cap (1) — 4,500 4,500 45 Debt exposed to interest rate fluctuations 5,662 — 5,662 57 Less: Cash and Restricted Cash (723) — (723) (7) Net debt exposed to interest rate fluctuations (2) 4,939 — 4,939 50 (1) The 3-month LIBOR rate as at December 31, 2020 was 0.238%. At this date, the interest cap would mitigate none of the impact of a theoretical 1% point increase in LIBOR. |
Schedule of Realized and Unrealized Gains and Losses | Gains and losses on derivatives reported in our Consolidated Statements of Operations included the following: Successor Predecessor (In $ millions) Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Loss recognized in the Consolidated Statement of Operations relating to derivative financial instruments Interest rate cap agreement (3) (37) (22) (6) Archer convertible debt instrument 3 — (9) 2 Loss on derivative financial instruments — (37) (31) (4) |
Schedule of Derivative Financial Instruments | Derivative financial instruments included in our Consolidated Balance Sheets, within "other non-current assets" included the following: (In $ millions) Maturity date Applicable rate Outstanding principal - December 31, 2020 December 31, 2020 December 31, 2019 Interest rate cap June 2023 2.87% LIBOR cap 4,500 — 3 — 3 |
Fair values of financial inst_2
Fair values of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 as at December 31, 2020 and December 31, 2019 are as follows: December 31, 2020 December 31, 2019 (In $ millions) Fair Carrying Fair Carrying Assets Related party loans receivable (1) (Level 2) 379 379 395 488 Liabilities Secured credit facilities (2020: Level 3; 2019: Level 2) 1,193 5,662 5,464 5,549 Credit facilities contained within variable interest entities (Level 2) (2) — — 590 598 Senior Secured Notes (Level 1) 213 515 404 476 Related party loans payable by the VIE (Level 2) (2) — — 239 239 Related party loans payable (Level 3) 424 426 — — (1) Excludes Archer convertible debt receivable, which is measured at fair value. |
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, 2020 and December 31, 2019 are as follows: December 31, 2020 December 31, 2019 (In $ millions) Fair Carrying Fair Carrying Assets Cash and cash equivalents ( Level 1) 526 526 1,115 1,115 Restricted cash (Level 1) 197 197 242 242 Marketable securities (Level 1) 8 8 11 11 Related party loans receivable - Archer convertible debt (Level 3) 13 13 35 35 Interest rate cap (Level 2) — — 3 3 Temporary equity Redeemable non-controlling interest (Level 3) — — 57 57 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: (In $ millions) December 31, 2020 December 31, 2019 Guarantees in favor of customers (1)(2)(3) 150 165 Guarantees in favor of banks (4) 132 146 Total 282 311 (1) Guarantees to Seadrill Partners - Guarantees in favor of customers are performance guarantees provided on behalf of Seadrill Partners of nil (December 31, 2019: $15 million). (2) Guarantees to Northern Ocean - Guarantees in favor of customers are performance guarantees provided on behalf of Northern Ocean of $100 million (December 31, 2019: $100 million) for a contract that matures in 2022. (3) Guarantees to Sonadrill - Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $50 million (December 31, 2019: $50 million). Contract maturity in 2021. (4) Guarantees to Seabras Sapura - Guarantees in favor of banks are guarantees provided by a subsidiary of Seadrill Limited on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $132 million |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Schedule of assets and liabilities in statutory accounts of the VIEs | The balance sheet of the VIEs on a stand-alone basis at December 31, 2019 was as follows: December 31, 2019 Cash and cash equivalents 22 Investment in finance lease 972 Total assets of the VIEs 994 Short-term interest bearing debt 48 Long-term interest bearing debt 550 Other liabilities 5 Short-term amounts due to related parties 12 Long-term debt due to related parties (1) 239 Total liabilities of the VIEs 854 Equity of the VIEs 140 (1) Long-term debt due to related parties is as follows: (In $ millions) December 31, 2019 Debt principal outstanding 314 Debt discount (75) Trading liability positions held against long-term loan — Long-term loan due to related parties 239 |
Supplementary cash flow infor_2
Supplementary cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: Successor Predecessor Year ended December 31, 2020 Year ended December 31, 2019 Period from July 2, 2018 through December 31, 2018 Period from January 1, 2018 through July 1, 2018 Non-cash investing activities Proceeds from sale of West Epsilon rig (1) 12 — — — Non-cash financing activities Repayment of debt following sale of West Epsilon rig (1) (12) — — — (1) During September 2020, the West Epsilon was sold for net proceeds of $12 million. The proceeds were paid directly to the banks as an early repayment against our external debt. |
General information (Details)
General information (Details) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($)drilling_unit | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of offshore drilling units owned by the Company | drilling_unit | 34 | ||||
Debt due within one year | $ 6,177 | $ 343 | |||
Restricted and unrestricted cash and cash equivalents | $ 2,003 | $ 2,177 | 723 | 1,357 | $ 1,359 |
Unrestricted cash and cash equivalents | 526 | 1,115 | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Income tax expense | $ 8 | 30 | $ 5 | $ (39) | |
Adjustment for a subsidiary related to prior years | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Income tax expense | $ 18 |
General information - Reclassif
General information - Reclassification of Previously Reported Amounts (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Management contract revenue | [1] | $ 56 | $ 38 | $ 289 | $ 338 |
Management contract expense | [1] | (44) | (45) | (390) | (302) |
Selling, general and administrative expenses | (43) | (47) | (80) | (95) | |
Reimbursable revenues/ expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | 16 | 21 | 37 | 41 | |
Expenses | (15) | (18) | (34) | (39) | |
Other revenues | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | [1] | 0 | 34 | 30 | 12 |
Vessel and rig operating expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Expenses | (341) | (417) | $ (606) | (726) | |
As previously reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Management contract revenue | 0 | 0 | 0 | ||
Management contract expense | 0 | 0 | 0 | ||
Selling, general and administrative expenses | (62) | (100) | (130) | ||
As previously reported | Reimbursable revenues/ expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | 26 | 21 | 264 | ||
Expenses | (24) | (20) | (262) | ||
As previously reported | Other revenues | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | 46 | 72 | 127 | ||
As previously reported | Vessel and rig operating expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Expenses | (357) | (407) | (770) | ||
Adjustment | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Management contract revenue | 56 | 38 | 338 | ||
Management contract expense | (44) | (45) | (302) | ||
Selling, general and administrative expenses | 19 | 53 | 35 | ||
Adjustment | Reimbursable revenues/ expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | (10) | 0 | (223) | ||
Expenses | 9 | 2 | 223 | ||
Adjustment | Other revenues | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Reimbursable and other revenues | (46) | (38) | (115) | ||
Adjustment | Vessel and rig operating expenses | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Expenses | $ 16 | $ (10) | $ 44 | ||
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Accounting policies (Details)
Accounting policies (Details) - USD ($) $ in Millions | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Write off of unamortized debt discount | $ 87 | $ 0 | $ 0 | $ 87 | $ 0 |
Threshold percentage for recognizing actuarial gains and losses | 10.00% | 10.00% | |||
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 |
Recent Accounting Standards (De
Recent Accounting Standards (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 | Jul. 01, 2018 | Dec. 31, 2017 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adoption of accounting standard update | $ 3,140 | $ (1,793) | $ (3,035) | $ (3,655) | $ (154) | $ (6,959) |
Retained Earnings | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adoption of accounting standard update | $ 6,628 | 1,851 | $ 611 | $ 0 | $ 0 | $ (225) |
Cumulative Effect, Period Of Adoption, Adjustment | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adoption of accounting standard update | 143 | |||||
Cumulative Effect, Period Of Adoption, Adjustment | Retained Earnings | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Adoption of accounting standard update | $ 143 |
Previous Chapter 11 Proceedin_3
Previous Chapter 11 Proceedings - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 26, 2018 | Sep. 12, 2017 |
Fresh-Start Adjustment [Line Items] | ||||||
Amount of new cash commitments in the form of new notes and equity | $ 1,000,000,000 | $ 1,100,000,000 | $ 1,100,000,000 | |||
Common shares, issued (in shares) | 100,000,000 | 100,384,435 | 100,234,973 | 100,000,000 | ||
Common stock, value issued | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||
Fully diluted, reserved for Employee Incentive Plan | 10.00% | |||||
Senior secured notes | Secured Debt | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Debt, face amount | $ 880,000,000 | |||||
Commitment Parties [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 23,750,000 | |||||
Common stock, value issued | $ 200,000,000 | |||||
Commitment Parties and Notes Right Offering Subscribers [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 54,625,000 | |||||
Holders of General Unsecured Claims [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 14,250,000 | |||||
Old Seadrill Limited and Seadrill Limited 510(b) [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 1,900,000 | |||||
Other Commitment Parties [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 475,000 | |||||
Hemen [Member] | ||||||
Fresh-Start Adjustment [Line Items] | ||||||
Common shares, issued (in shares) | 5,000,000 | |||||
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 |
Previous Chapter 11 Proceedin_4
Previous Chapter 11 Proceedings - Schedule of Key terms of the Plan of Reorganization (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 05, 2019 | Dec. 31, 2018 | Jul. 02, 2018 |
Fresh-Start Adjustment [Line Items] | |||||
Number of shares | 100,384,435 | 100,234,973 | 100,000,000 | 100,000,000 | |
Prior to dilution by the shares reserved under the Employee Incentive Plan | 100.00% | ||||
Fully diluted | 90.00% | ||||
Number of shares authorized (in shares) | 11,111,111 | ||||
Total, fully diluted (in shares) | 138,880,000 | 138,880,000 | 138,880,000 | 111,111,111 | |
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 Senior 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% |
Previous Chapter 11 Proceedin_5
Previous 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, 2020 | Dec. 31, 2019 | |
Reorganizations [Abstract] | ||||
Professional and advisory fees | $ (9) | $ (187) | $ 0 | $ 0 |
Gain on liabilities subject to compromise | 0 | 2,958 | 0 | 0 |
Fresh start valuation adjustments | 0 | (6,142) | 0 | 0 |
Interest income on surplus cash invested | 0 | 6 | 0 | 0 |
Reorganization items, net | $ (9) | $ (3,365) | $ 0 | $ 0 |
Fresh Start Accounting - Additi
Fresh Start Accounting - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 17, 2018 | Feb. 26, 2018 |
Fresh-Start Adjustment [Line Items] | |||||||
Distributable value | $ 11,056,000,000 | $ 11,000,000,000 | |||||
WACC | 11.40% | ||||||
Debt, fair value | 7,301,000,000 | ||||||
Debt, book value | $ 7,600,000,000 | ||||||
Common stock, shares issued (in shares) | 100,000,000 | 100,384,435 | 100,234,973 | 100,000,000 | |||
Per share value (in dollars per share) | $ 35.01 | ||||||
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 | ||||||
Senior secured notes | Secured Debt | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt, fair value | $ 890,000,000 | ||||||
Proceeds from issuance | 875,000,000 | ||||||
Debt, face amount | 880,000,000 | ||||||
Interest accrual | 5,000,000 | ||||||
Write-off of unamortized debt issuance costs | $ 9,000,000 | ||||||
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 Senior 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 | ||||||
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 | ||||||
Accrued interest expense | 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 | Senior secured notes | Secured Debt | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Write-off of unamortized debt issuance costs | 51,000,000 | ||||||
Fresh Start Adjustments | Seadrill Partners | West Vela | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Adjustments, increase (decrease), Amount due from related parties - current | 14,000,000 | ||||||
Fresh Start Adjustments | Seadrill Partners | West Vela and West Polaris | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Adjustments, increase (decrease), Amount due from related parties - non-current | 17,000,000 | ||||||
Fresh Start Adjustments | Seabras Sapura | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Adjustments, increase (decrease), Amount due from related parties - non-current | $ (3,000,000) | ||||||
Income Approach | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt, fair value | $ 7,300,000,000 |
Fresh Start Accounting - Schedu
Fresh Start Accounting - Schedule of Weighted Average Cost of Capital (Details) | Jul. 02, 2018 | Dec. 31, 2020 |
Restructuring Cost and Reserve [Line Items] | ||
WACC | 11.40% | |
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 - Reconc
Fresh Start Accounting - Reconciliation of Distributable Value to Fair Value of Successor Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 | Jul. 01, 2018 | Apr. 17, 2018 |
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) | 100,384,435 | 100,234,973 | 100,000,000 | 100,000,000 | ||
Per share value (in dollars per share) | $ 35.01 |
Fresh Start Accounting - Reco_2
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 | |
Total reorganization value | $ 11,629 |
Fresh Start Accounting - Consol
Fresh Start Accounting - Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Jul. 01, 2018 |
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), Additional paid-in capital | (6) | |
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 | |
Change in other liabilities | 100 | |
Adjustments, increase (decrease), Total current liabilities | 121 | |
Adjustments, increase (decrease), Liabilities subject to compromise | (9,050) | |
Net increase in 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 | (1,008) |
Adjustments, increase (decrease), Additional paid-in capital | (3,322) | |
Adjustments, increase (decrease), Additional paid-in capital | (6) | |
Adjustments, increase (decrease), Contributed surplus | 2,860 | (1,956) |
Total change in predecessor retained (loss)/earnings | 7,110 | |
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) | |
Change in other liabilities | 32 | |
Adjustments, increase (decrease), Total current liabilities | (1) | |
Adjustments, increase (decrease), Liabilities subject to compromise | 0 | |
Net increase in 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), Accumulated other comprehensive income | (41) | |
Total change in predecessor retained (loss)/earnings | (6,964) | |
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) |
Fresh Start Accounting - Reorga
Fresh Start Accounting - Reorganization Adjustments, Cash and Cash Equivalents (Details) $ in Millions | Jul. 01, 2018USD ($) |
Proceeds from debt commitment | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | $ 875 |
Proceeds from equity commitment | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | 200 |
Payment to newbuild counterparty members | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (18) |
Amendment consent fees to senior secured creditors | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (26) |
Funding of the escrow account for senior secured notes collateral | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (227) |
Payment of closing fees for the debt commitment | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (9) |
Payment new commitment parties fee | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (1) |
Payment to the bank coordinating committee | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | (4) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Change in cash and cash equivalents | $ 790 |
Fresh Start Accounting - Reor_2
Fresh Start Accounting - Reorganization Adjustments, Restricted Cash (Details) $ in Millions | Jul. 01, 2018USD ($) |
Funding of the escrow account per terms of senior secured notes | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | $ 227 |
Payment of post confirmation accrued professional fees in connection with emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | (31) |
Payment of success fees incurred upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | (22) |
Distribution from the cash pool to general unsecured claims | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | (2) |
Payment of unsecured creditor committee advisor fees | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | (3) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Change in restricted cash | $ 169 |
Fresh Start Accounting - Reor_3
Fresh Start Accounting - Reorganization Adjustments, Other Current Liabilities (Details) $ in Millions | Jul. 01, 2018USD ($) |
Success fees accrued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | $ 28 |
Undistributed cash pool balance for general unsecured claims on emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | 35 |
Cash payment made for post confirmation accrued professional fees in connection with emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | (31) |
Reinstatement of other current liabilities as part of liabilities subject to compromise | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | 64 |
Amendment fees on SFL loans accrued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | 4 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Change in other liabilities | $ 100 |
Fresh Start Accounting - Gain o
Fresh Start Accounting - Gain on Liabilities Subject to Compromise (Details) $ in Millions | Jul. 01, 2018USD ($) |
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 | 9,050 |
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) |
Reorganization Adjustments | |
Liabilities Subject to Compromise [Abstract] | |
Adjustments, increase (decrease), gain on settlement of liabilities subject to compromise | $ 2,958 |
Fresh Start Accounting - Reor_4
Fresh Start Accounting - Reorganization Adjustments, Long-Term Debt (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Jul. 01, 2018 |
Total reinstated senior secured credit facilities | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | $ 5,426 | |
Reinstated Senior undersecured or impaired external debt | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | 5,266 | |
Recognition of adequate protection payments | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | 186 | |
Lender consent fee | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | (26) | |
Issuance of senior secured notes | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | 880 | |
Capitalized pre-issuance interest for senior secured notes for 8% paid-in kind | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | 10 | |
Debt issuance cost in related to the issuance of the senior secured notes | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | (9) | |
Discount on senior 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] | ||
Net increase in long-term debt | (15) | |
Reorganization Adjustments | ||
Fresh-Start Adjustment [Line Items] | ||
Net increase in long-term debt | $ 6,292 | |
Secured Debt | Senior secured notes | ||
Fresh-Start Adjustment [Line Items] | ||
Stated interest rate, cash portion (as a percent) | 4.00% | 4.00% |
$5 million applicable to 4% cash interest | $ 5 | |
Stated interest rate, paid-in-kind portion (as a percent) | 8.00% | 8.00% |
$10 million applicable to 8% paid-in-kind interest | $ 10 |
Fresh Start Accounting - Reor_5
Fresh Start Accounting - Reorganization Adjustments, Change in Retained (loss)/earnings (Details) $ in Millions | Jul. 01, 2018USD ($) |
Gain on settlement of liabilities subject to compromise | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | $ 2,958 |
Cancellation of predecessor common stock, contributed surplus, and additional paid in capital | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/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] | |
Total change in predecessor retained (loss)/earnings | (6) |
Fair value of Successor Common Shares issued upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | (2,176) |
Success fees incurred upon emergence | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | (51) |
New Commitment Parties, bank coordinating committee, and unsecured creditor committee advisor fees | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | (8) |
Elimination of NADL and Sevan non-controlling interest | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | 107 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Total change in predecessor retained (loss)/earnings | $ 7,110 |
Fresh Start Accounting - Estima
Fresh Start Accounting - Estimated Fair Value of Debt at Emergence (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Fresh-Start Adjustment [Line Items] | |||||
Carrying value after reorganization adjustments | $ 6,177 | $ 6,623 | |||
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans | $ (24) | $ 0 | $ (44) | $ (47) | |
Debt, fair value | $ 7,301 | ||||
Secured Debt | Senior 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 senior secured notes (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 | ||||
Stated interest rate, paid-in-kind portion (as a percent) | 8.00% | 8.00% | |||
$10 million applicable to 8% paid-in-kind interest | $ 10 | ||||
Secured Debt | Credit facilities contained within variable interest entities | |||||
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 senior secured notes (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 |
Current expected credit losse_2
Current expected credit losses - Allowance for Credit Losses and Credit Loss Expense (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 143 | |||
Credit loss expense | $ 0 | $ 0 | 166 | $ 0 |
Ending balance | 309 | 143 | ||
Credit loss expense | $ 0 | $ 0 | 166 | 0 |
Management contract expenses | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Credit loss expense | 142 | |||
Credit loss expense | 142 | |||
Other financial items | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Credit loss expense | 24 | |||
Credit loss expense | 24 | |||
Trade receivables | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 0 | |||
Credit loss expense | 0 | |||
Ending balance | 0 | 0 | ||
Credit loss expense | 0 | |||
Other current assets | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 0 | |||
Credit loss expense | 3 | |||
Ending balance | 3 | 0 | ||
Credit loss expense | 3 | |||
Related party ST | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 15 | |||
Credit loss expense | 154 | |||
Ending balance | 169 | 15 | ||
Credit loss expense | 154 | |||
Related party LT | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 128 | |||
Credit loss expense | 9 | |||
Ending balance | 137 | $ 128 | ||
Credit loss expense | $ 9 |
Segment information - Results b
Segment information - Results by Segment (Details) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 3 | ||||
Number of operating segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 541 | $ 712 | $ 1,059 | $ 1,388 | |
Depreciation | 236 | 391 | 346 | 426 | |
Amortization of intangibles | 58 | 0 | 1 | 134 | |
Impairment of drilling units and intangible assets | 0 | 414 | 4,108 | 0 | |
Operating Income - net income [Abstract] | |||||
Operating profit/(loss) | (175) | (613) | (4,482) | (295) | |
Unallocated items: | |||||
Total financial items and other | (422) | (3,242) | (176) | (966) | |
Loss before income taxes | (597) | (3,855) | (4,658) | (1,261) | |
Drilling units | 2,120 | 6,401 | |||
Investment in associated companies | 248 | 389 | |||
Marketable securities | 8 | 11 | |||
Cash and restricted cash | 2,003 | 2,177 | 723 | 1,357 | $ 1,359 |
Other assets | 862 | 1,121 | |||
Total assets | 3,961 | 9,279 | |||
Capital expenditures | 98 | 116 | 148 | 162 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 11 | 5 | 18 | 24 | |
Depreciation | 15 | 20 | 29 | 29 | |
Impairment of drilling units and intangible assets | 0 | 0 | 48 | 0 | |
Operating Income - net income [Abstract] | |||||
Operating profit/(loss) | (4) | (20) | (218) | (23) | |
Harsh environment | |||||
Segment Reporting Information [Line Items] | |||||
Amortization of intangibles | (13) | 0 | 1 | 0 | |
Unallocated items: | |||||
Drilling units | 1,032 | 1,537 | |||
Capital expenditures | 7 | 41 | 26 | 34 | |
Harsh environment | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 150 | 103 | 526 | 510 | |
Depreciation | 78 | 134 | 93 | 125 | |
Impairment of drilling units and intangible assets | 0 | 414 | 419 | 0 | |
Operating Income - net income [Abstract] | |||||
Operating profit/(loss) | (59) | (562) | (396) | (69) | |
Floaters | |||||
Segment Reporting Information [Line Items] | |||||
Amortization of intangibles | 50 | 0 | 0 | 105 | |
Unallocated items: | |||||
Drilling units | 528 | 4,184 | |||
Capital expenditures | 72 | 69 | 110 | 111 | |
Floaters | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 273 | 476 | 358 | 625 | |
Depreciation | 120 | 179 | 176 | 224 | |
Impairment of drilling units and intangible assets | 0 | 0 | 3,555 | 0 | |
Operating Income - net income [Abstract] | |||||
Operating profit/(loss) | (112) | 42 | (3,781) | (201) | |
Jack-up rigs | |||||
Segment Reporting Information [Line Items] | |||||
Amortization of intangibles | 21 | 0 | 0 | 29 | |
Unallocated items: | |||||
Drilling units | 560 | 680 | |||
Capital expenditures | 19 | 6 | 12 | 17 | |
Jack-up rigs | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 107 | 128 | 157 | 229 | |
Depreciation | 23 | 58 | 48 | 48 | |
Impairment of drilling units and intangible assets | 0 | 0 | 86 | 0 | |
Operating Income - net income [Abstract] | |||||
Operating profit/(loss) | $ 0 | $ (73) | $ (87) | $ (2) |
Segment information - Geographi
Segment information - Geographic Revenues (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 541 | $ 712 | $ 1,059 | $ 1,388 |
Norway | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 117 | 82 | 480 | 469 |
Nigeria | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 108 | 105 | 0 | 198 |
Brazil | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 91 | 188 | 51 | 137 |
Saudi Arabia | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 78 | 79 | 98 | 130 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 34 | 30 | 107 | 74 |
Angola | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 29 | 100 | 89 | 215 |
Others | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 84 | $ 128 | $ 234 | $ 165 |
Segment information - Geograp_2
Segment information - Geographic Assets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | $ 2,120 | $ 6,401 |
Norway | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 1,044 | 1,818 |
Saudi Arabia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 234 | 244 |
Malaysia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 185 | 805 |
Qatar | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 151 | 54 |
USA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 87 | 644 |
Brazil | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 79 | 332 |
Spain | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | 49 | 615 |
Others | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Drilling units | $ 291 | $ 1,889 |
Segment information - Major Cus
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
ConocoPhillips | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 13.00% | 8.00% | 16.00% | 11.00% |
Equinor | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 7.00% | 5.00% | 12.00% | 16.00% |
Northern Ocean | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 0.00% | 0.00% | 12.00% | 12.00% |
Saudi Aramco | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 14.00% | 11.00% | 9.00% | 10.00% |
LLOG | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 10.00% | 23.00% | 7.00% | 7.00% |
Petrobras | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 6.00% | 4.00% | 5.00% | 4.00% |
Total | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 24.00% | 19.00% | 4.00% | 18.00% |
ExxonMobil | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 0.00% | 10.00% | 0.00% | 0.00% |
Other | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk percentage | 26.00% | 20.00% | 35.00% | 22.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivables, net | $ 125 | $ 173 |
Current contract liabilities (deferred revenues) | (18) | (20) |
Non-current contract liabilities (deferred revenues) | $ (13) | $ (9) |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract assets, beginning balance | $ 0 | $ 1 |
Contract liabilities, beginning balance | (29) | (21) |
Contract assets (liabilities), net, beginning balance | (29) | (20) |
Amortization of revenue that was included in the beginning contract liability balance | 23 | 14 |
Cash received, excluding amounts recognized as revenue | (25) | (22) |
Cash received against the beginning contract asset balance | (1) | |
Contract assets, ending balance | 0 | 0 |
Contract liabilities, ending balance | (31) | (29) |
Contract assets (liabilities), net, ending balance | $ (31) | $ (29) |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, current | $ 18 | $ 20 |
Deferred revenue, noncurrent | $ 13 | $ 9 |
Other revenues (Details)
Other revenues (Details) - Other revenues - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Variable Interest Entity [Line Items] | |||||
Leasing revenues | $ 0 | $ 0 | $ 19 | $ 1 | |
Amortization of unfavorable contracts | 0 | 21 | 0 | 0 | |
Early termination fees | 0 | 13 | 11 | 11 | |
Total other revenues | [1] | $ 0 | $ 34 | $ 30 | $ 12 |
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Other operating items - Other O
Other operating items - Other Operating Items (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Other Operating Income (Loss) [Abstract] | |||||
Impairment of long lived assets | $ 0 | $ (414) | $ (4,087) | $ 0 | |
Loss on impairment of intangibles | 0 | 0 | (21) | 0 | |
Gain on disposals | 0 | 0 | 15 | 0 | |
Other operating income | [1] | 21 | 7 | 9 | 39 |
Total other operating items | $ 21 | $ (407) | $ (4,084) | $ 39 | |
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Other operating items - Additio
Other operating items - Additional Information (Details) | Sep. 03, 2020USD ($) | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($)rig | Dec. 31, 2020USD ($)rig | Dec. 31, 2019USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on impairment of long-lived assets | $ 0 | $ 414,000,000 | $ 4,087,000,000 | $ 0 | |
Number of impaired rigs | rig | 3 | 15 | |||
Gain on disposals | $ 0 | $ 0 | $ 15,000,000 | $ 0 | |
Line of Credit | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Maximum borrowing capacity | $ 2,000,000,000 | ||||
West Epsilon | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on disposals | $ 12,000,000 | ||||
West Telesto | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on disposals | $ 3,000,000 |
Other operating items - Other_2
Other operating items - Other Operating Income (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | ||
Other Operating Income (Loss) [Abstract] | ||||||
Loss of hire insurance settlement | $ 0 | $ 0 | $ 9 | $ 10 | $ 19.5 | |
Receipt of overdue receivable | 21 | 0 | 0 | 26 | ||
Contingent consideration | 0 | 7 | 0 | 0 | ||
Settlement with shipyard | 0 | 0 | 0 | 3 | ||
Total other operating income | [1] | $ 21 | $ 7 | $ 9 | $ 39 | |
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Interest expense - Schedule of
Interest expense - Schedule of Interest expense (Details) - USD ($) $ in Millions | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest Expense [Abstract] | |||||
Cash and payment-in-kind interest on debt facilities | $ (237) | $ (37) | $ (338) | $ (440) | |
Unwind of discount debt | (24) | 0 | (44) | (47) | |
Write off of discount on debt | $ (87) | 0 | 0 | (87) | 0 |
Other | 0 | (1) | 0 | 0 | |
Interest expense | $ (261) | $ (38) | $ (469) | $ (487) |
Interest expense - Cash and Pay
Interest expense - Cash and Payment-In-Kind Interest (Details) - USD ($) $ in Millions | Nov. 01, 2018 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Cash and payment-in-kind interest | $ (237) | $ (37) | $ (338) | $ (440) | |
Secured Debt | Secured credit facilities and unsecured bonds | |||||
Debt Instrument [Line Items] | |||||
Cash and payment-in-kind interest | (162) | (116) | (239) | (327) | |
Less: adequate protection payments | 0 | 104 | 0 | 0 | |
Secured Debt | Senior secured notes | |||||
Debt Instrument [Line Items] | |||||
Cash and payment-in-kind interest | $ (5) | (50) | 0 | (60) | (66) |
Secured Debt | Credit facilities contained within variable interest entities | |||||
Debt Instrument [Line Items] | |||||
Cash and payment-in-kind interest | $ (25) | $ (25) | $ (39) | $ (47) |
Interest expense - Additional I
Interest expense - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 15, 2019 | Apr. 10, 2019 |
Debt Instrument [Line Items] | ||||||||
Total debt principal | $ 6,177,000,000 | $ 6,177,000,000 | $ 6,759,000,000 | |||||
Write off of unamortized debt discount | 87,000,000 | $ 0 | $ 0 | 87,000,000 | 0 | |||
Senior secured notes | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
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% | ||||||
Total debt principal | 515,000,000 | 515,000,000 | 476,000,000 | $ 476,000,000 | ||||
Face amount representing accrued interest compounded | 39,000,000 | 39,000,000 | $ 18,000,000 | |||||
Senior credit facilities | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt principal | $ 5,662,000,000 | $ 5,662,000,000 | $ 5,662,000,000 | |||||
Senior credit facilities | Secured Debt | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Increase in basis spread on variable interest rate | 1.00% |
Loss on impairment of long-li_2
Loss on impairment of long-lived assets (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($)rig | Dec. 31, 2020USD ($)rig | Dec. 31, 2019USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Number of impaired rigs | rig | 3 | 15 | ||
Loss on impairment of long-lived assets | $ 0 | $ 414 | $ 4,087 | $ 0 |
Drilling units | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Loss on impairment of long-lived assets | $ 4,087 |
Loss on impairment of investm_3
Loss on impairment of investments in associated companies (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Total impairment of investments in associated companies and joint ventures | $ 0 | $ 0 | $ 47 | $ 302 |
Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total impairment of investments in associated companies and joint ventures | 47 | 302 | ||
Seadrill Partners - Direct ownership investments | Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total impairment of investments in associated companies and joint ventures | 0 | 0 | 47 | 248 |
Seadrill Partners - Seadrill member interest and IDRs | Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total impairment of investments in associated companies and joint ventures | $ 0 | $ 0 | $ 0 | $ 54 |
Loss on impairment of investm_4
Loss on impairment of investments in associated companies - Seadrill Partners (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Impairment of investments | $ 0 | $ 0 | $ 47 | $ 302 |
Investments, book value | 248 | 389 | ||
Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Impairment of investments | 47 | 302 | ||
Seadrill Partners | Seadrill Partners - Direct ownership investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Impairment of investments | 0 | 0 | 47 | 248 |
Seadrill Partners | Seadrill Partners - Seadrill member interest and IDRs | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Impairment of investments | $ 0 | $ 0 | $ 0 | $ 54 |
Taxation - Components of Income
Taxation - Components of Income Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax expense/(benefit): | ||||
Bermuda | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign | 30 | 34 | 12 | 22 |
Deferred tax expense/(benefit): | ||||
Bermuda | 0 | 0 | 0 | 0 |
Foreign | (22) | (4) | (7) | (61) |
Total tax expense/(benefit) | $ 8 | $ 30 | $ 5 | $ (39) |
Effective tax rate | (1.30%) | (0.80%) | (0.10%) | 3.10% |
Taxation - Additional Informati
Taxation - Additional Information (Details) R$ in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020BRL (R$) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | ||||||
Effective tax rate | (1.30%) | (0.80%) | (0.10%) | 3.10% | ||
Tax benefit, CARES Act | $ 5 | |||||
Deferred tax assets, net operating loss carry forwards | 251 | $ 259 | ||||
Deferred tax assets not subject to expiration | 241 | 249 | ||||
Deferred tax assets subject to expiration | 10 | 10 | ||||
Deferred tax liabilities, intangibles | 0 | 4 | ||||
Unrecognized tax benefits | $ 132 | $ 61 | 82 | 89 | $ 55 | |
Accrued interest and penalties | 18 | 18 | ||||
Interest and penalties expense (benefit) | $ 11 | $ 3 | 1 | 7 | ||
Unrecognized tax benefits that would have a favorable impact on effective tax rate | 79 | |||||
Cash collateral posted | 197 | 242 | ||||
Demand deposit pledged as collateral for tax related guarantee | ||||||
Related Party Transaction [Line Items] | ||||||
Cash collateral posted | 65 | $ 83 | R$ 330 | |||
Secretariat of the Federal Revenue Bureau of Brazil | ||||||
Related Party Transaction [Line Items] | ||||||
Income tax examination, estimate of possible loss | 161 | |||||
Nigeria | ||||||
Related Party Transaction [Line Items] | ||||||
Income tax examination, estimate of possible loss | 171 | |||||
Other Noncurrent Liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Unrecognized tax benefits | 61 | |||||
Deferred Tax Asset Reduction | ||||||
Related Party Transaction [Line Items] | ||||||
Unrecognized tax benefits | $ 21 |
Taxation - Income Tax Reconcili
Taxation - Income Tax Reconciliation (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effect of change on unrecognized tax benefits | $ 49 | $ 12 | $ (1) | $ (6) |
Effect of unremitted earnings of subsidiaries | (10) | 0 | (2) | (17) |
Effect of taxable income in various countries | (31) | 18 | 8 | (16) |
Total tax expense/(benefit) | $ 8 | $ 30 | $ 5 | $ (39) |
Taxation - Deferred Income Taxe
Taxation - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets [Abstract] | ||
Pensions and stock options | $ 1 | $ 2 |
Provisions | 31 | 30 |
Net operating losses carried forward | 251 | 259 |
Intangibles | 4 | 0 |
Other | 3 | 0 |
Gross deferred tax assets | 290 | 291 |
Valuation allowance | (219) | (255) |
Deferred tax assets, net of valuation allowance | 71 | 36 |
Deferred Tax Liability [Abstract] | ||
Property, plant and equipment | 30 | 30 |
Unremitted Earnings of Subsidiaries | 8 | 10 |
Deferred gain | 34 | 0 |
Intangibles | 0 | 4 |
Gross deferred tax liabilities | 72 | 44 |
Net deferred tax liability | $ (1) | $ (8) |
Taxation - Changes to Uncertain
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, 2020 | Dec. 31, 2019 | |
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | ||||
Balance at the beginning of the period | $ 61 | $ 55 | $ 89 | $ 132 |
Increases as a result of positions taken in prior periods | 69 | 7 | 1 | 8 |
Increases as a result of positions taken during the current period | 18 | 1 | 0 | 29 |
Decreases as a result of positions taken in prior periods | (9) | (2) | (4) | (34) |
Decreases due to settlements | (7) | 0 | (1) | (46) |
Decreases as a result of a lapse of the applicable statute of limitations | 0 | 0 | (3) | 0 |
Balance at the end of the period | $ 132 | $ 61 | $ 82 | $ 89 |
Taxation - Earliest Open Tax Ye
Taxation - Earliest Open Tax Year (Details) | 12 Months Ended |
Dec. 31, 2020 | |
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 | 2016 |
Norway | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2016 |
Brazil | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2008 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to the parent | $ (602) | $ (3,881) | $ (4,659) | $ (1,219) |
Less: Allocation to participating securities | 0 | 0 | 0 | 0 |
Net loss available to stockholders | (602) | (3,881) | (4,659) | (1,219) |
Effect of dilution | 0 | 0 | 0 | 0 |
Diluted net loss available to stockholders | $ (602) | $ (3,881) | $ (4,659) | $ (1,219) |
Basic loss per share: | ||||
Weighted average number of common shares outstanding (in shares) | 100 | 504 | 100 | 100 |
Diluted loss per share: | ||||
Effect of dilution (in shares) | 0 | 0 | 0 | 0 |
Weighted average number of common shares outstanding adjusted for the effects of dilution (in shares) | 100 | 504 | 100 | 100 |
Basic loss per share (usd per share) | $ (6.02) | $ (7.71) | $ (46.43) | $ (12.18) |
Diluted loss per share (usd per share) | $ (6.02) | $ (7.71) | $ (46.43) | $ (12.18) |
Restricted cash (Details)
Restricted cash (Details) R$ in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020BRL (R$) | Feb. 24, 2020USD ($) | Feb. 23, 2020USD ($) | |
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 197 | $ 242 | |||
Current restricted cash | 132 | 135 | |||
Non-current restricted cash | 65 | 107 | |||
Proceeds from related party loans held in escrow | 24 | 6 | |||
Accounts pledged as collateral for Senior Secured Notes | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 30 | 24 | |||
Accounts pledged as collateral for performance bonds and similar guarantees | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 48 | 104 | |||
Guaranty facility | $ 45 | $ 90 | |||
Demand deposit pledged as collateral for tax related guarantee | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 65 | 83 | R$ 330 | ||
Accounts pledged as collateral for leases | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | 22 | 0 | |||
Other | |||||
Restricted Cash [Line Items] | |||||
Total restricted cash | $ 32 | $ 31 |
Marketable securities - Additio
Marketable securities - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 | Jul. 01, 2018 | Dec. 31, 2017 |
Gain (Loss) on Securities [Line Items] | ||||||
Adoption of accounting standard update | $ (3,140) | $ 1,793 | $ 3,035 | $ 3,655 | $ 154 | $ 6,959 |
Retained earnings | ||||||
Gain (Loss) on Securities [Line Items] | ||||||
Adoption of accounting standard update | $ (6,628) | $ (1,851) | $ (611) | $ 0 | $ 0 | $ 225 |
Marketable securities - Marketa
Marketable securities - Marketable Securities Held (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Gain (Loss) on Securities [Line Items] | ||
Total marketable securities | $ 8 | $ 11 |
Seadrill Partners- Common units | ||
Gain (Loss) on Securities [Line Items] | ||
Total marketable securities | 0 | 2 |
Archer | ||
Gain (Loss) on Securities [Line Items] | ||
Total marketable securities | $ 8 | $ 9 |
Marketable securities - Gross R
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, 2020 | Dec. 31, 2019 | |
Gain (Loss) on Securities [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ (64) | $ (3) | $ (3) | $ (46) |
Seadrill Partners - Common Units - unrealized loss on marketable securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | (45) | (5) | (2) | (43) |
Archer - unrealized (loss)/gain on marketable securities | ||||
Gain (Loss) on Securities [Line Items] | ||||
Total unrealized gain (loss) on marketable securities | $ (19) | $ 2 | $ (1) | $ (3) |
Other assets (Details)
Other assets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Favorable drilling and management services contracts | $ 10 | $ 33 |
Taxes receivable | 32 | 38 |
Prepaid expenses | 67 | 33 |
Right of use asset | 57 | 35 |
Reimbursable amounts due from customers | 11 | 21 |
Deferred contract costs | 14 | 12 |
Derivative asset - interest rate cap | 0 | 3 |
Insurance receivable | 4 | 14 |
Other (5) | 37 | 28 |
Total other assets | 232 | 217 |
Related party loans receivable | 477 | $ 704 |
Prepaid D&O insurance | 17 | |
Affiliated Entity | Northern Ocean | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Related party loans receivable | $ 5 |
Other assets - Balance Sheet Pr
Other assets - Balance Sheet Presentation (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Other current assets | $ 186 | $ 158 |
Other non-current assets | 46 | 59 |
Total other assets | $ 232 | $ 217 |
Other assets - Favorable contra
Other assets - Favorable contracts (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Impairment of favorable contracts | $ (21) | $ 0 | ||
Amortization of favorable contracts | $ (58) | $ 0 | (1) | (134) |
Net carrying amount, end of period | 10 | |||
Favorable contracts | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Gross carrying amount, beginning of period | 287 | 287 | ||
Accumulated amortization, end of period | (101) | (256) | (254) | |
Net carrying amount, beginning of period | 33 | 186 | ||
Amortization of favorable contracts | (2) | (153) | ||
Gross carrying amount, end of period | 287 | 266 | 287 | |
Accumulated amortization, beginning of period | (254) | (101) | ||
Net carrying amount, end of period | $ 186 | $ 10 | $ 33 |
Other assets - Future amortizat
Other assets - Future amortization of favorable contracts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average remaining amortization period | 19 years 5 months | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2021 | $ 1 | ||
2022 | 1 | ||
2023 | 1 | ||
2024 | 1 | ||
2025 and thereafter | 6 | ||
Total | 10 | ||
Favorable contracts | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Total | $ 10 | $ 33 | $ 186 |
Investment in associated comp_3
Investment in associated companies - Ownership Percentage (Details) | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2018 |
Seabras Sapura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | |||
Seabras Sapura | Joint Venture Partner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | ||||
SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 50.00% | |
SeaMex | Joint Venture Partner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | ||||
Sonadrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | 0.00% | 0.00% | |
Sonadrill | Joint Venture Partner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | ||||
Gulfdrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 0.00% | 0.00% |
Gulfdrill | Joint Venture Partner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% |
Investment in associated comp_4
Investment in associated companies - Additional Information (Details) shares in Thousands | Feb. 28, 2021vesselrig | Dec. 31, 2020subsidiarydrilling_unitclass_of_stockvesselequity_instrumentdrillshiprigshares | Dec. 31, 2019 | Aug. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of leased rigs | 3 | |||||
Seadrill Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of drilling units | drilling_unit | 11 | |||||
Number of drillships | drillship | 4 | |||||
Number of semi-submersible rigs | 4 | |||||
Number of tender rigs | 3 | |||||
Number categories of equity instruments | equity_instrument | 3 | |||||
Number of classes of stock | class_of_stock | 2 | |||||
Common units outstanding (in shares) | shares | 7,500 | |||||
Seadrill Operating LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 56.00% | |||||
Number of rigs | 1 | |||||
Seadrill Deepwater Drillship And Seadrill Mobile Units (Nigeria) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 44.00% | |||||
Number of rigs | 1 | |||||
Fintech | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Sapura Energy | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Gulf Drilling International | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Sonangol | Subsequent Event | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Seadrill Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 18.00% | |||||
Number of investments in operating subsidiaries | subsidiary | 4 | |||||
Seadrill Operating LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 42.00% | |||||
Number of rigs | 4 | |||||
Seadrill Capricorn Holdings LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 49.00% | |||||
Number of rigs | 4 | |||||
Seadrill Deepwater Drillship Ltd | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 39.00% | |||||
Seadrill Mobile Units (Nigeria) Ltd | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 49.00% | |||||
SeaMex | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of drilling units | 5 | |||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 50.00% | ||
Seabras Sapura | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% | ||||
Number of pipe-laying service vessels | vessel | 6 | |||||
Gulfdrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 0.00% | 0.00% | |
Number of premium jack-ups | 5 | |||||
Gulfdrill | Seadrill Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of leased rigs | 3 | |||||
Gulfdrill | Third Party | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of leased rigs | 2 | |||||
Sonadrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% | 0.00% | 0.00% | ||
Sonadrill | Subsequent Event | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of drillships | 4 | |||||
Ownership percentage | 50.00% | |||||
Number of units bareboated by each joint venture partner | vessel | 2 | |||||
Seadrill Partners - Subordinated Units | Seadrill Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 100.00% | |||||
Investment (in shares) | shares | 1,600 | |||||
Seadrill Partners - Common Units | Seadrill Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 35.00% | |||||
Investment (in shares) | shares | 2,500 | |||||
Seadrill Partners - IDRs | Seadrill Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 100.00% |
Investment in associated comp_5
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, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ (90) | $ 149 | $ (77) | $ (115) |
Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (75) | |||
Seadrill Partners | Seadrill Partners - Direct ownership investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (82) | 77 | (75) | (107) |
Seadrill Partners | Seadrill Partners - Subordinated Units | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (20) | 22 | 0 | (17) |
Seabras Sapura | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 24 | 46 | 20 | 29 |
SeaMex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | (12) | 4 | (22) | (19) |
Sonadrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | 0 | 0 | (2) | (1) |
Gulfdrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Share in results from associated companies (net of tax) | $ 0 | $ 0 | $ 2 | $ 0 |
Investment in associated comp_6
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, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | $ 541 | $ 712 | $ 1,059 | $ 1,388 | |
Net operating (loss)/income | (175) | (613) | (4,482) | (295) | |
Net (loss)/income | (602) | (3,881) | (4,659) | (1,219) | |
Share in results from associated companies (net of tax) | $ (90) | $ 149 | $ (77) | $ (115) | |
Seadrill Partners | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 18.00% | ||||
Share in results from associated companies (net of tax) | $ (75) | ||||
Seabras Sapura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 50.00% | |
Net (loss)/income allocated to ownership interests | $ 44 | $ 46 | $ 38 | $ 57 | |
Amortization of basis differences | (20) | 0 | (18) | (28) | |
Share in results from associated companies (net of tax) | $ 24 | $ 46 | $ 20 | $ 29 | |
SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 50.00% | |
Net (loss)/income allocated to ownership interests | $ 2 | $ 4 | $ (6) | $ 9 | |
Amortization of basis differences | (14) | 0 | (16) | (28) | |
Share in results from associated companies (net of tax) | $ (12) | $ 4 | $ (22) | $ (19) | |
Sonadrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 0.00% | 0.00% | 50.00% | 50.00% | |
Net (loss)/income allocated to ownership interests | $ 0 | $ 0 | $ (2) | $ (1) | |
Share in results from associated companies (net of tax) | $ 0 | $ 0 | $ (2) | $ (1) | |
Gulfdrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 0.00% | 0.00% | 50.00% | 50.00% | 50.00% |
Net (loss)/income allocated to ownership interests | $ 0 | $ 0 | $ 2 | $ 0 | |
Share in results from associated companies (net of tax) | 0 | 0 | 2 | 0 | |
Seadrill Partners | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | 426 | 612 | 750 | ||
Net operating (loss)/income | 100 | 257 | 51 | ||
Net (loss)/income | (127) | 201 | (187) | ||
Seabras Sapura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | 232 | 241 | 360 | 434 | |
Net operating (loss)/income | 124 | 125 | 103 | 198 | |
Net (loss)/income | 88 | 92 | 75 | 113 | |
SeaMex | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | 118 | 121 | 234 | 232 | |
Net operating (loss)/income | 40 | 40 | 49 | 70 | |
Net (loss)/income | 4 | 7 | (13) | 18 | |
Sonadrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | 0 | 0 | 56 | 22 | |
Net operating (loss)/income | 0 | 0 | (2) | (1) | |
Net (loss)/income | 0 | 0 | (5) | (2) | |
Gulfdrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating revenues | 0 | 0 | 44 | 0 | |
Net operating (loss)/income | 0 | 0 | 6 | 0 | |
Net (loss)/income | 0 | 0 | 4 | 0 | |
Seadrill Partners - Direct ownership investments | Seadrill Partners | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Net (loss)/income allocated to ownership interests | (59) | 77 | (92) | ||
Amortization of basis differences | (23) | 0 | (15) | ||
Share in results from associated companies (net of tax) | (82) | 77 | $ (75) | (107) | |
Seadrill Partners - Subordinated Units | Seadrill Partners | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 100.00% | ||||
Net (loss)/income allocated to ownership interests | (15) | 22 | (17) | ||
Amortization of basis differences | (5) | 0 | 0 | ||
Share in results from associated companies (net of tax) | $ (20) | $ 22 | $ 0 | $ (17) |
Investment in associated comp_7
Investment in associated companies - Book Value (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 248 | $ 389 |
Seadrill Partners | Seadrill Partners - Direct ownership investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 0 | 122 |
Seabras Sapura | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 103 | 98 |
Seabras Sapura Holding | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 121 | 123 |
SeaMex | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 0 | 22 |
Sonadrill | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | 22 | 24 |
Gulfdrill | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in associated companies | $ 2 | $ 0 |
Investment in associated comp_8
Investment in associated companies - Consolidated Balance Sheets (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | $ 1,062 | $ 1,773 | ||
Non-current assets | 2,899 | 7,506 | ||
Current liabilities | (6,545) | (770) | ||
Non-current liabilities | (556) | (6,659) | ||
Book value of investment | 248 | 389 | ||
Total impairment of investments in associated companies and joint ventures | $ 0 | $ 0 | 47 | 302 |
Cash proceeds from repayment of shareholder loans held in escrow | 2 | 9 | ||
Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill share of book equity | 1,305 | |||
Total impairment of investments in associated companies and joint ventures | 47 | 302 | ||
Seadrill Partners | Basis difference allocated to rigs | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | (1,220) | |||
Seadrill Partners | Basis difference allocated to contracts | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | 37 | |||
Seadrill Partners | Seadrill Partners - Direct ownership investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Book value of investment | 0 | 122 | ||
Sebras Sapura and Seabras Sapura Holding | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Book value of investment | 224 | 221 | ||
Seabras Sapura | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill share of book equity | 361 | 338 | ||
Basis difference | (137) | (117) | ||
Book value of investment | 103 | 98 | ||
Seabras Sapura | Basis difference allocated to rigs | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | (351) | (369) | ||
Seabras Sapura | Basis difference allocated to contracts | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | 93 | 129 | ||
Seabras Sapura Holding | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Shareholder loans held as equity | 121 | 123 | ||
Book value of investment | 121 | 123 | ||
SeaMex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill share of book equity | 230 | 236 | ||
Basis difference | (230) | (214) | ||
Book value of investment | 0 | 22 | ||
SeaMex | Basis difference allocated to rigs | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | (325) | (341) | ||
SeaMex | Basis difference allocated to contracts | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Basis difference | 95 | 127 | ||
Sonadrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill share of book equity | 22 | 24 | ||
Book value of investment | 22 | 24 | ||
Gulfdrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill share of book equity | 2 | 0 | ||
Book value of investment | 2 | 0 | ||
Seadrill Partners | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 833 | |||
Non-current assets | 4,847 | |||
Current liabilities | (533) | |||
Non-current liabilities | (2,623) | |||
Net Assets (2) | 2,524 | |||
Seabras Sapura | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 207 | 195 | ||
Non-current assets | 1,474 | 1,495 | ||
Current liabilities | (541) | (510) | ||
Non-current liabilities | (419) | (504) | ||
Net Assets (2) | 721 | 676 | ||
SeaMex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 291 | 260 | ||
Non-current assets | 898 | 939 | ||
Current liabilities | (174) | (141) | ||
Non-current liabilities | (555) | (586) | ||
Net Assets (2) | 460 | 472 | ||
Sonadrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 54 | 57 | ||
Non-current assets | 0 | 0 | ||
Current liabilities | (11) | (9) | ||
Non-current liabilities | 0 | 0 | ||
Net Assets (2) | 43 | 48 | ||
Gulfdrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 67 | 0 | ||
Non-current assets | 102 | 0 | ||
Current liabilities | (135) | 0 | ||
Non-current liabilities | (31) | 0 | ||
Net Assets (2) | $ 3 | $ 0 |
Drilling units (Details)
Drilling units (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cost | ||||
Impairment | $ 0 | $ (414) | $ (4,087) | $ 0 |
Accumulated depreciation | ||||
Impairment of long-lived assets | 0 | $ 414 | 4,087 | 0 |
Drilling units | ||||
Cost | ||||
Opening balance | 7,048 | 6,890 | ||
Additions | 147 | 158 | ||
Impairment | (4,087) | |||
Closing balance | 6,890 | 3,108 | 7,048 | |
Accumulated depreciation | ||||
Opening balance | (647) | (231) | ||
Depreciation | (341) | (416) | ||
Closing balance | (231) | (988) | (647) | |
Net book value | $ 6,659 | 2,120 | 6,401 | |
Impairment of long-lived assets | 4,087 | |||
Drilling units leased to others | Ship Finance SPV's | ||||
Accumulated depreciation | ||||
Net book value | 484 | 784 | ||
Drilling units leased to others | Gulfdrill | ||||
Accumulated depreciation | ||||
Net book value | $ 151 | $ 53 |
Equipment (Details)
Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2018 | |
Equipment | ||||||
Cost | ||||||
Opening balance | $ 38 | $ 34 | ||||
Property, Plant and Equipment, Additions | 1 | 4 | ||||
Closing balance | 39 | 38 | ||||
Cost | 39 | 38 | $ 39 | $ 38 | $ 34 | |
Accumulated depreciation | ||||||
Opening balance | (15) | (5) | ||||
Depreciation | (5) | (10) | ||||
Closing balance | (20) | (15) | ||||
Accumulated depreciation | $ (20) | $ (15) | (20) | (15) | (5) | |
Net book value | $ 19 | $ 23 | $ 29 | |||
Fresh Start Adjustments | ||||||
Accumulated depreciation | ||||||
Fresh Start adjustments, net | $ (6) |
Debt - Schedule of Debt and Bal
Debt - Schedule of Debt and Balance Sheet Presentation (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 10, 2019 | Jul. 02, 2018 |
Debt Instrument [Line Items] | ||||
Total debt principal | $ 6,177 | $ 6,759 | ||
Less: debt discount and fees | 0 | (136) | ||
Carrying value | 6,177 | 6,623 | ||
Debt due within one year | 6,177 | 343 | ||
Long-term debt | 0 | 6,280 | ||
Senior credit facilities | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total debt principal | 5,662 | 5,662 | ||
Senior Secured Notes | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total debt principal | 515 | 476 | $ 476 | |
Carrying value | $ 866 | |||
Credit facilities contained within variable interest entities | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Total debt principal | $ 0 | $ 621 |
Debt - Debt Maturity (Details)
Debt - Debt Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 6,177 | |
2022 and thereafter | 0 | |
Total debt principal | $ 6,177 | $ 6,759 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||||
Write off of unamortized debt discount | $ 87 | $ 0 | $ 0 | $ 87 | $ 0 |
Debt - Credit Facilities - Sche
Debt - Credit Facilities - Schedule (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total debt principal | $ 6,177,000,000 | $ 6,759,000,000 |
Line of Credit | Senior credit facilities | ||
Debt Instrument [Line Items] | ||
Total debt principal | 5,662,000,000 | |
Line of Credit | $400 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 400,000,000 | |
Total debt principal | 138,000,000 | |
Book value of collateral vessels | $ 142,000,000 | |
Line of Credit | $400 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.50% | |
Line of Credit | $2,000 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000,000 | |
Total debt principal | 912,000,000 | |
Book value of collateral vessels | $ 548,000,000 | |
Line of Credit | $2,000 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.00% | |
Line of Credit | $440 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 440,000,000 | |
Total debt principal | 66,000,000 | |
Book value of collateral vessels | $ 54,000,000 | |
Line of Credit | $440 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 4.25% | |
Line of Credit | $1,450 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,450,000,000 | |
Total debt principal | 329,000,000 | |
Book value of collateral vessels | $ 79,000,000 | |
Line of Credit | $1,450 million facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.35% | |
Line of Credit | $1,450 million facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 4.00% | |
Line of Credit | $360 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 360,000,000 | |
Total debt principal | 117,000,000 | |
Book value of collateral vessels | $ 183,000,000 | |
Line of Credit | $360 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.75% | |
Line of Credit | $300 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 300,000,000 | |
Total debt principal | 147,000,000 | |
Book value of collateral vessels | $ 97,000,000 | |
Line of Credit | $300 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 4.00% | |
Line of Credit | $1,750 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,750,000,000 | |
Total debt principal | 894,000,000 | |
Book value of collateral vessels | $ 8,000,000 | |
Line of Credit | $1,750 million facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.50% | |
Line of Credit | $1,750 million facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.90% | |
Line of Credit | $450 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 450,000,000 | |
Total debt principal | 270,000,000 | |
Book value of collateral vessels | $ 0 | |
Line of Credit | $450 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.50% | |
Line of Credit | $1,500 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,500,000,000 | |
Total debt principal | 1,146,000,000 | |
Book value of collateral vessels | $ 206,000,000 | |
Line of Credit | $1,500 million facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 2.70% | |
Line of Credit | $1,500 million facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 4.78% | |
Line of Credit | $1,350 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,350,000,000 | |
Total debt principal | 961,000,000 | |
Book value of collateral vessels | $ 55,000,000 | |
Line of Credit | $1,350 million facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.00% | |
Line of Credit | $950 million facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 950,000,000 | |
Total debt principal | 577,000,000 | |
Book value of collateral vessels | $ 51,000,000 | |
Line of Credit | $950 million facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.00% | |
Line of Credit | $950 million facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 4.42% | |
Line of Credit | $450 million facility (2015) | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 450,000,000 | |
Total debt principal | 105,000,000 | |
Book value of collateral vessels | $ 82,000,000 | |
Line of Credit | $450 million facility (2015) | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 3.85% | |
Line of Credit | ACE Facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 359,000,000 | |
Line of Credit | ACE Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 5.50% | |
Line of Credit | ACE Facility | $400 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 17,000,000 | |
Line of Credit | ACE Facility | $2,000 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 80,000,000 | |
Line of Credit | ACE Facility | $440 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 6,000,000 | |
Line of Credit | ACE Facility | $1,450 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 13,000,000 | |
Line of Credit | ACE Facility | $360 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 18,000,000 | |
Line of Credit | ACE Facility | $300 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 6,000,000 | |
Line of Credit | ACE Facility | $1,750 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 70,000,000 | |
Line of Credit | ACE Facility | $450 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 24,000,000 | |
Line of Credit | ACE Facility | $1,500 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 40,000,000 | |
Line of Credit | ACE Facility | $1,350 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 38,000,000 | |
Line of Credit | ACE Facility | $950 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 38,000,000 | |
Line of Credit | ACE Facility | $450 million facility (2015) | ||
Debt Instrument [Line Items] | ||
Total debt principal | 9,000,000 | |
Line of Credit | Main Facility | $400 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 121,000,000 | |
Line of Credit | Main Facility | $2,000 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 832,000,000 | |
Line of Credit | Main Facility | $440 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 60,000,000 | |
Line of Credit | Main Facility | $1,450 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 316,000,000 | |
Line of Credit | Main Facility | $360 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 99,000,000 | |
Line of Credit | Main Facility | $300 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 141,000,000 | |
Line of Credit | Main Facility | $1,750 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 824,000,000 | |
Line of Credit | Main Facility | $450 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 246,000,000 | |
Line of Credit | Main Facility | $1,500 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 1,106,000,000 | |
Line of Credit | Main Facility | $1,350 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 923,000,000 | |
Line of Credit | Main Facility | $950 million facility | ||
Debt Instrument [Line Items] | ||
Total debt principal | 539,000,000 | |
Line of Credit | Main Facility | $450 million facility (2015) | ||
Debt Instrument [Line Items] | ||
Total debt principal | $ 96,000,000 |
Debt - Credit Facilities - Narr
Debt - Credit Facilities - Narrative (Details) - USD ($) | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | |||||
Additional interest rate, default | 2.00% | 2.00% | 2.00% | ||
Total debt principal | $ 6,177,000,000 | $ 6,177,000,000 | $ 6,177,000,000 | $ 6,759,000,000 | |
Line of Credit | ACE Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 359,000,000 | 359,000,000 | $ 359,000,000 | ||
Line of Credit | ACE Facility | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (as a percent) | 5.50% | ||||
Senior credit facilities | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Scheduled payments defaulted on | 54,000,000 | $ 54,000,000 | 108,000,000 | ||
Amount of scheduled amortization payments that may be deferred and converted | 500,000,000 | 500,000,000 | $ 500,000,000 | ||
Amount of scheduled amortization payments elected to defer | 489,000,000 | 489,000,000 | 489,000,000 | ||
Total debt principal | 5,662,000,000 | 5,662,000,000 | 5,662,000,000 | ||
Amount of scheduled amortization payments elected to defer for payments due in 2021 | 130,000,000 | 130,000,000 | 130,000,000 | ||
$450 million facility (2015) | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 105,000,000 | 105,000,000 | 105,000,000 | ||
Maximum borrowing capacity | 450,000,000 | 450,000,000 | $ 450,000,000 | ||
$450 million facility (2015) | Line of Credit | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (as a percent) | 3.85% | ||||
$450 million facility (2015) | Line of Credit | ACE Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 9,000,000 | 9,000,000 | $ 9,000,000 | ||
$360 million facility | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 117,000,000 | 117,000,000 | 117,000,000 | ||
Repayments of lines of credit | 96,000,000 | ||||
Maximum borrowing capacity | 360,000,000 | 360,000,000 | $ 360,000,000 | ||
$360 million facility | Line of Credit | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (as a percent) | 3.75% | ||||
$360 million facility | Line of Credit | ACE Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 18,000,000 | 18,000,000 | $ 18,000,000 | ||
$2,000 million facility | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | 912,000,000 | 912,000,000 | 912,000,000 | ||
Repayments of lines of credit | $ 12,000,000 | ||||
Maximum borrowing capacity | 2,000,000,000 | 2,000,000,000 | $ 2,000,000,000 | ||
$2,000 million facility | Line of Credit | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (as a percent) | 3.00% | ||||
$2,000 million facility | Line of Credit | ACE Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total debt principal | $ 80,000,000 | $ 80,000,000 | $ 80,000,000 |
Debt - Senior Secured Notes (De
Debt - Senior Secured Notes (Details) - USD ($) | Apr. 10, 2019 | Nov. 14, 2018 | Nov. 01, 2018 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 15, 2019 | Oct. 10, 2018 | Jul. 02, 2018 | May 09, 2018 |
Debt Instrument [Line Items] | |||||||||||
Repayments of debt | $ 83,000,000 | $ 153,000,000 | $ 132,000,000 | $ 34,000,000 | |||||||
Interest expense on debt | 237,000,000 | $ 37,000,000 | 338,000,000 | 440,000,000 | |||||||
Total debt principal | 6,177,000,000 | 6,759,000,000 | |||||||||
Cash collateral securing Senior Notes | 66,000,000 | ||||||||||
Restricted cash portion of cash collateral securing Senior Notes | 197,000,000 | 242,000,000 | |||||||||
Accounts pledged as collateral for Senior Secured Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Restricted cash portion of cash collateral securing Senior Notes | 30,000,000 | 24,000,000 | |||||||||
Exploration and production equipment | West Rigel | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fair value of consideration received | $ 126,000,000 | ||||||||||
Secured Debt | Senior Secured Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt, face amount | $ 880,000,000 | ||||||||||
Debt instrument, interest rate (as percent) | 12.00% | ||||||||||
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 | 39,000,000 | $ 18,000,000 | $ 10,000,000 | ||||||||
Repayments of debt | $ 342,000,000 | $ 100,000 | $ 121,000,000 | ||||||||
Interest expense on debt | $ 5,000,000 | $ 50,000,000 | $ 0 | 60,000,000 | 66,000,000 | ||||||
Tender offer, aggregate repurchase amount | $ 56,000,000 | ||||||||||
Repurchased principal amount | 311,000,000 | ||||||||||
Purchase premium and accrued interest included in debt repayment | $ 31,000,000 | ||||||||||
Premium percentage | 7.00% | ||||||||||
Total debt principal | $ 476,000,000 | $ 515,000,000 | $ 476,000,000 |
Debt - Covenants and Restrictio
Debt - Covenants and Restrictions (Details) - Secured Debt - Senior credit facilities | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
Minimum liquidity, initial period | $ 525,000,000 |
Minimum liquidity, subsequent period | $ 400,000,000 |
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 |
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 |
Increase in margin if covenants not met, period ended March 31, 2021 | 0.25% |
Increase in margin if covenants not met, period ended June 30, 2021 | 0.25% |
Increase in margin if covenants not met, period ended September 30, 2021 | 0.25% |
Increase in margin if covenants not met, period ended December 31, 2021 | 0.25% |
Increase in margin if covenants not met, cap | 1.00% |
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)
Other liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Taxes payable | $ 29 | $ 33 | |
Contract liabilities | 31 | 29 | $ 21 |
Unfavorable drilling contracts | 7 | 8 | |
Employee withheld taxes, social security and vacation payments | 47 | 51 | |
Accrued interest expense | 38 | 40 | |
Accrued expenses | 110 | 137 | |
Lease liabilities | 68 | 36 | |
Uncertain tax positions | 79 | 83 | |
Other liabilities | 27 | 33 | |
Total Other Liabilities | $ 436 | $ 450 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Other liabilities - Balance she
Other liabilities - Balance sheet presentation (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities [Abstract] | ||
Other current liabilities | $ 316 | $ 322 |
Other non-current liabilities | 120 | 128 |
Total Other Liabilities | $ 436 | $ 450 |
Other liabilities - Unfavorable
Other liabilities - Unfavorable contracts (Details) - Unfavorable contracts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Liabilities [Line Items] | |||
Gross carrying amount | $ (66) | $ (66) | $ (66) |
Accumulated amortization | 59 | 58 | $ 39 |
Finite-lived Intangible Liabilities [Roll Forward] | |||
Net carrying amount, beginning balance | (8) | (27) | |
Amortization of unfavorable contracts | 1 | 19 | |
Net carrying amount, ending balance | $ (7) | $ (8) |
Other liabilities - Future amor
Other liabilities - Future amortization of unfavorable contracts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Liabilities [Line Items] | |||
Weighted average remaining amortization period | 6 years 9 months | ||
Unfavorable contracts | |||
Other Liabilities [Line Items] | |||
2021 | $ 1 | ||
2022 | 1 | ||
2023 | 1 | ||
2024 | 1 | ||
2025 and thereafter | 3 | ||
Total | $ 7 | $ 8 | $ 27 |
Leases - Future Undiscounted Ca
Leases - Future Undiscounted Cash Flows for Operating Leases and Reconciliation to Operating Lease Liability (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 60 | |
2022 | 16 | |
2023 | 2 | |
2024 and thereafter | 1 | |
Total | 79 | $ 45 |
Less short term leases | 0 | (1) |
Less discount | (11) | (8) |
Operating lease liability | 68 | 36 |
Current | 51 | 12 |
Non-current | $ 17 | $ 24 |
Leases - Additional Information
Leases - Additional Information (Details) | Dec. 31, 2020 | Mar. 31, 2020well | Dec. 31, 2019 | Aug. 31, 2019rigcontract | Dec. 31, 2018 | Jul. 01, 2018 |
Lessor, Lease, Description [Line Items] | ||||||
Number of rigs for which bareboat charters have been secured | rig | 2 | |||||
Number of wells under drilling contract | well | 10 | |||||
Number of optional wells under drilling contract | well | 4 | |||||
Gulfdrill | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Number of rigs leased to others | rig | 3 | |||||
Gulfdrill | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Number of drilling contracts | contract | 5 | |||||
Gulfdrill | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 0.00% | 0.00% |
Leases - Supplementary Informat
Leases - Supplementary Information Regarding Lease Accounting (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Lease Cost: | ||
Operating lease cost | $ 19 | $ 12 |
Short-term lease cost | 2 | 1 |
Total lease cost | 21 | 13 |
Other information: | ||
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows | 21 | 13 |
Right-of-use assets obtained in exchange for operating lease liabilities during the period | $ 53 | $ 19 |
Weighted-average remaining lease term | 19 months | 18 months |
Weighted-average discount rate | 32.00% | 13.00% |
Leases - Operating Leases, Less
Leases - Operating Leases, Lessor, Future Undiscounted Cash Flows, and Income (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating lease payments receivable | |
2021 | $ 28 |
2022 | 28 |
2023 | 28 |
2024 | 22 |
2025 and thereafter | 19 |
Total | $ 125 |
Common shares (Details)
Common shares (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 04, 2019 | Jun. 05, 2019 | Jun. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 |
Equity [Abstract] | |||||||
Common shares, par value (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning balance, shares | 100,234,973 | 100,000,000 | |||||
Common stock, value issued | $ 10 | $ 10 | |||||
RSU share issuance (in shares) | 234,973 | 149,462 | 149,462 | 234,973 | |||
Ending balance, shares | 100,384,435 | 100,234,973 | |||||
Common stock, value issued | $ 10 | $ 10 | |||||
Common shares, additional authorized (in shares) | 27,768,889 | ||||||
Total, fully diluted (in shares) | 138,880,000 | 138,880,000 | 138,880,000 | 111,111,111 |
Non-controlling interest - Chan
Non-controlling interest - Changes in Non-controlling Interest (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | $ 151 | $ 152 | ||
Net (loss)/income attributable to non-controlling interest | $ (2) | $ (6) | (3) | (1) |
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | $ 0 | (11) | ||
Deconsolidation of Ship Finance SPV's | (137) | |||
Balance, end of period | 152 | 0 | 151 | |
North Atlantic Drilling Ltd | ||||
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | ||
Net (loss)/income attributable to non-controlling interest | 0 | 0 | ||
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | 0 | |||
Deconsolidation of Ship Finance SPV's | 0 | |||
Balance, end of period | 0 | 0 | 0 | |
Sevan Drilling Limited | ||||
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | ||
Net (loss)/income attributable to non-controlling interest | 0 | 0 | ||
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | 0 | |||
Deconsolidation of Ship Finance SPV's | 0 | |||
Balance, end of period | 0 | 0 | 0 | |
Asia Offshore Drilling Ltd | ||||
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | 0 | 0 | ||
Net (loss)/income attributable to non-controlling interest | 0 | 0 | ||
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | 0 | |||
Deconsolidation of Ship Finance SPV's | 0 | |||
Balance, end of period | 0 | 0 | 0 | |
Ship Finance SPV's | ||||
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | 140 | 145 | ||
Net (loss)/income attributable to non-controlling interest | (3) | (5) | ||
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | 0 | |||
Deconsolidation of Ship Finance SPV's | (137) | |||
Balance, end of period | 145 | 0 | 140 | |
Seadrill Nigeria Operations Limited | ||||
Changes in non-controlling interest [Roll Forward] | ||||
Balance, beginning of period | 11 | 7 | ||
Net (loss)/income attributable to non-controlling interest | 0 | 4 | ||
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations | (11) | |||
Deconsolidation of Ship Finance SPV's | 0 | |||
Balance, end of period | $ 7 | $ 0 | $ 11 |
Non-controlling interest - Addi
Non-controlling interest - Additional Information (Details) - USD ($) | 1 Months Ended | ||||||
Aug. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2020 | Sep. 11, 2020 | Sep. 10, 2020 | Jul. 31, 2020 | Jul. 01, 2018 | |
Noncontrolling Interest [Line Items] | |||||||
Payment for option to purchase non-controlling interest | $ 11,000,000 | ||||||
Option to purchase non-controlling interest, purchase price | $ 1 | ||||||
Seadrill Nigeria Operations Limited | West Jupiter Drillship | |||||||
Noncontrolling Interest [Line Items] | |||||||
Ownership percentage | 10.00% | ||||||
North Atlantic Drilling Ltd | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest, ownership percentage by parent | 70.36% | ||||||
Sevan Drilling Limited | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest, ownership percentage by parent | 50.11% | ||||||
Asia Offshore Drilling Ltd | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest, ownership percentage by parent | 100.00% | 66.24% | 66.24% | ||||
Asia Offshore Drilling Ltd | Mermaid | |||||||
Noncontrolling Interest [Line Items] | |||||||
Noncontrolling interest, percentage sold | 34.00% | ||||||
Noncontrolling interest, value sold | $ 31,000,000 |
Redeemable non-controlling in_3
Redeemable non-controlling interest - Schedule of Changes in Redeemable Non-controlling Interest (Details) - USD ($) $ in Millions | Sep. 11, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Acquisition of NCI | $ (31) | ||
Asia Offshore Drilling Ltd | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Acquisition of NCI | $ 31 | ||
Redeemable non-controlling interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | 57 | ||
Ending balance | 0 | $ 57 | |
Redeemable non-controlling interest | Asia Offshore Drilling Ltd | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | 38 | ||
Net loss attributable to redeemable non-controlling interest | (1) | (2) | |
Fair value adjustment | $ (25) | $ 21 |
Redeemable non-controlling in_4
Redeemable non-controlling interest - Additional Information (Details) - USD ($) | Sep. 11, 2020 | Apr. 04, 2018 | Dec. 31, 2020 | Sep. 10, 2020 | Jul. 31, 2020 |
Redeemable Noncontrolling Interest [Line Items] | |||||
Acquisition of NCI | $ (31,000,000) | ||||
Asia Offshore Drilling Ltd | |||||
Redeemable Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 100.00% | 66.24% | 66.24% | ||
Acquisition of NCI | $ 31,000,000 | ||||
Mermaid | Asia Offshore Drilling Ltd | |||||
Redeemable Noncontrolling Interest [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 33.76% | ||||
Noncontrolling interest owners option to redeem, price ceiling | $ 125,000,000 | ||||
Noncontrolling interest parent option to redeem, price floor | $ 75,000,000 |
Accumulated other comprehensi_3
Accumulated other comprehensive income/(loss) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 154 | $ 6,959 | $ 1,793 | $ 3,035 |
Other comprehensive (loss)/income | (7) | 0 | (13) | (6) |
Ending balance | 3,035 | 154 | (3,140) | 1,793 |
Accumulated other comprehensive income/(loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | 58 | (13) | (7) |
Other comprehensive (loss)/income | (7) | (13) | (6) | |
Ending balance | (7) | $ 0 | (26) | (13) |
Actuarial gain/(loss) relating to pension | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | 1 | ||
Other comprehensive (loss)/income | (2) | (1) | ||
Ending balance | 1 | (2) | 0 | |
Share in unrealized losses from associated companies | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (13) | (5) | ||
Other comprehensive (loss)/income | (15) | (8) | ||
Ending balance | (5) | (28) | (13) | |
Change in debt component on Archer facility | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | (3) | ||
Other comprehensive (loss)/income | 4 | 3 | ||
Ending balance | $ (3) | $ 4 | $ 0 |
Share based compensation - Expe
Share based compensation - Expense Summary (Details) - USD ($) $ in Millions | Jul. 29, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Payment Arrangement [Abstract] | |||||
Share-based compensation expense | $ 0.5 | $ 0 | $ 9 | $ 8 | $ 5 |
Charge for schemes cancelled on emergence from Chapter 11 | $ 6 |
Share based compensation - Narr
Share based compensation - Narrative (Details) - USD ($) $ in Millions | Jul. 29, 2020 | Sep. 04, 2019 | Aug. 23, 2019 | Sep. 04, 2018 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 26, 2019 | 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 | ||||||||||
Compensation cost for non-vested awards not yet recognized | $ 0 | $ 9 | |||||||||
Share-based compensation expense | $ 0.5 | $ 0 | $ 9 | $ 8 | $ 5 | ||||||
Company Directors and Senior Management | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based compensation expense | $ 0.2 | ||||||||||
Employee incentive plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized (in shares) | 11,100,000 | ||||||||||
Restricted Stock Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percentage vested | 33.00% | 33.00% | |||||||||
Vesting period | 3 years | 3 years | |||||||||
Shares vested in period (in shares) | 200,000 | ||||||||||
Restricted Stock Units | Company Directors and Senior Management | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 188,369 | ||||||||||
Restricted Stock Units | Employee incentive plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized (in shares) | 300,000 | 500,000 | |||||||||
Performance Shares | Company Directors and Senior Management | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 510,234 | ||||||||||
Performance Shares | Employee incentive plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized (in shares) | 1,700,000 |
Pension benefits - Additional I
Pension benefits - Additional Information (Details) $ in Millions | Jan. 01, 2020plan | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |||||
Accumulated benefit obligation | $ 15 | $ 37 | |||
Number of defined benefit plans terminated | plan | 2 | ||||
Total company contributions | $ 9 | $ 10 | $ 18 | $ 16 | |
Onshore Employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Retirement pension as a percent of salary (as percent) | 66.00% | ||||
Retirement age | 67 years | ||||
Retirement pension cap (as percent) | 66.00% | ||||
Multiple of base | 12 | ||||
Retirement age to receive pre-retirement pension | 62 years |
Pension benefits - Consolidated
Pension benefits - Consolidated Balance Sheet Position (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Retirement Benefits [Abstract] | ||
Defined benefit obligation - Non-current liabilities | $ 0 | $ (2) |
Deferred tax asset | 1 | 1 |
Net defined benefit pension asset/(obligation) | $ 1 | $ (1) |
Pension benefits - Annual Pensi
Pension benefits - Annual Pension Cost (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||||
Service cost | $ 2 | $ 1 | $ 1 | $ 3 | |
Interest cost on prior years’ benefit obligation | 1 | 0 | 0 | 1 | $ 1 |
Gross pension cost for the year | 3 | 1 | 1 | 4 | |
Expected return on plan assets | (1) | 0 | 0 | (1) | |
Net pension cost for the year | 2 | 1 | 1 | 3 | |
Impact of settlement/curtailment of defined benefit plans | 0 | 0 | 1 | ||
Total net pension cost | $ 2 | $ 1 | $ 2 | $ 3 |
Pension benefits - Funded Statu
Pension benefits - Funded Status of the Defined Benefit Plan (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2017 |
Retirement Benefits [Abstract] | |||||
Projected defined benefit obligations | $ (16) | $ (40) | $ (37) | $ (37) | $ (36) |
Plan assets at market value | 16 | 39 | $ 33 | $ 33 | |
Funded defined benefit pension obligation | $ 0 | $ (1) |
Pension benefits - Change in Pr
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Projected benefit obligations at beginning of period | $ 37 | $ 36 | $ 40 | $ 37 | $ 36 |
Interest cost | 1 | 0 | 0 | 1 | 1 |
Service cost | 3 | 1 | 1 | ||
Benefits paid | (2) | (1) | (1) | ||
Change in unrecognized actuarial gain | 0 | 2 | 2 | ||
Settlement | 0 | (25) | 0 | ||
Foreign currency translations | 1 | (1) | (2) | ||
Projected benefit obligations at end of period | $ 37 | $ 37 | $ 16 | $ 40 | $ 37 |
Pension benefits - Change in Pe
Pension benefits - Change in Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | $ 39 | $ 33 | $ 33 |
Estimated return | 0 | 1 | 1 |
Contribution by employer | 6 | 6 | 0 |
Benefits paid | (1) | (2) | (1) |
Actuarial gain | 0 | 0 | 2 |
Settlement | (27) | 0 | 0 |
Foreign currency translations | (1) | 1 | (2) |
Fair value of plan assets at end of year | $ 16 | $ 39 | $ 33 |
Pension benefits - Assumptions
Pension benefits - Assumptions Used in Calculation of Pension Obligations (Details) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||||
Rate of compensation increase at the end of year (as percent) | 2.75% | 2.50% | 2.25% | 2.25% |
Discount rate at the end of year (as percent) | 2.60% | 2.40% | 1.70% | 2.30% |
Prescribed pension index factor (as percent) | 2.00% | 2.00% | 1.20% | 2.00% |
Expected return on plan assets for the year (as percent) | 2.60% | 2.40% | 2.60% | 2.60% |
Employee turnover (as percent) | 4.00% | 4.00% | 4.00% | 4.00% |
Expected increases in Social Security Base (as percent) | 2.50% | 2.25% | 2.00% | 2.50% |
Pension benefits - Weighted-Ave
Pension benefits - Weighted-Average Asset Allocation of Funds Related to Defined Benefit Plan (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 7.20% | 13.60% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 68.20% | 58.40% |
Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 13.60% | 11.00% |
Money market | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 10.60% | 16.50% |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 0.40% | 0.50% |
Pension benefits - Expected Ann
Pension benefits - Expected Annual Pension Plan Contributions Under Defined Benefit Plans (Details) $ in Millions | Dec. 31, 2020USD ($) |
Defined Benefit Plan, Expected Future Employer Contributions [Abstract] | |
2021 | $ 1 |
2022 | 1 |
2023 | 1 |
2024 | 1 |
2025-2030 | 3 |
Total payments expected during the next 10 years | $ 7 |
Related party transactions - An
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Total related party operating revenues | $ 56 | $ 38 | $ 286 | $ 332 | |
Total related party receivables | 477 | 704 | |||
Total related party operating expenses | 3 | 1 | 12 | $ 4 | |
Amount due from related parties | |||||
Related Party Transaction [Line Items] | |||||
Total related party receivables | 137 | 55 | |||
Other Assets | |||||
Related Party Transaction [Line Items] | |||||
Total related party receivables | 5 | 5 | |||
Management fee revenues | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating revenues | 46 | 37 | 135 | 113 | |
Reimbursable revenues | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating revenues | 9 | 0 | 148 | 218 | |
Related party inventory sales | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating revenues | 1 | 1 | 1 | 1 | |
Other | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating revenues | 0 | 0 | 2 | 0 | |
Work performed to mobilize drilling rig for first drilling contract | |||||
Related Party Transaction [Line Items] | |||||
Total related party receivables | 142 | 60 | |||
In country support services expenses | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating expenses | 0 | 0 | 0 | 1 | |
Interest income | 17 | 12 | 24 | 29 | |
Interest income recognized on deferred contingent consideration | 1 | 2 | 2 | 4 | |
Total related party financial items | 18 | 14 | 26 | $ 33 | |
Related party inventory purchases | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating expenses | 1 | 0 | 1 | 0 | |
Other related party operating expenses | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating expenses | 2 | 1 | 1 | 3 | |
West Bollsta lease | |||||
Related Party Transaction [Line Items] | |||||
Total related party operating expenses | $ 0 | $ 0 | $ 10 | $ 0 |
Related party transactions - _2
Related party transactions - Analysis of Related Party Receivable Balances (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Apr. 30, 2020 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | |||||||
Allowance for expected credit loss | $ (306) | $ 0 | |||||
Total related party receivables | 477 | 704 | |||||
Amounts due from related parties - current | 85 | 181 | |||||
Amounts due from related parties - non-current | 392 | 523 | |||||
Payments received on related party receivables | $ 22 | $ 2 | (105) | (14) | |||
Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables, gross | 516 | 488 | |||||
Total related party receivables | 516 | 488 | |||||
Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables, gross | 3 | 31 | |||||
Convertible bond | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables, gross | 13 | 35 | |||||
Trading balances | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables, gross | 251 | 150 | |||||
SeaMex seller's credit and loans receivable | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 452 | 422 | |||||
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 | $ 149 | ||||||
SeaMex seller's credit and loans receivable | Sponsor Minimum Liquidity Shortfall | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 8 | ||||||
Interest rate on related party receivable | 6.50% | ||||||
Seabras Sapura | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 64 | 66 | |||||
Payments received on related party receivables | $ 6 | ||||||
Seabras Sapura | Accrued interest | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 14 | ||||||
Seabras Sapura | Loan principal | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 50 | ||||||
Seabras Sapura | Due From Related Party, Loan Facility | |||||||
Related Party Transaction [Line Items] | |||||||
Payments received on related party receivables | 4 | ||||||
Seabras Sapura | Due From Related Party, Shareholder Loans | |||||||
Related Party Transaction [Line Items] | |||||||
Payments received on related party receivables | $ 2 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Deferred consideration arrangements | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 3 | 31 | |||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Mobilization receivable | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 2 | 17 | |||||
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 | $ 1 | 14 | |||||
West Vela | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Share of dayrate | Fair value | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | 29 | ||||||
West Polaris | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners | Fair value | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party receivables | $ 1 | ||||||
Minimum | LIBOR | Seabras Sapura | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party receivable | 3.40% | ||||||
Maximum | LIBOR | Seabras Sapura | Related party loans and interest | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party receivable | 3.99% |
Related party transactions - Ga
Related party transactions - Gains in Other Operating Income (Details) $ in Millions | Mar. 13, 2020USD ($) | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Apr. 26, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||||
Carrying value of related party receivable | $ 477 | $ 704 | ||||||
Net loss on debt extinguishment | $ 0 | $ 0 | 0 | (22) | $ 19 | |||
Impairment of investments | 0 | 0 | $ 47 | 302 | ||||
Discount rate | Discounted cash flow | ||||||||
Related Party Transaction [Line Items] | ||||||||
Loan receivable, measurement input | 0.14 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Related Party Transaction [Line Items] | ||||||||
Total contingent consideration recognized | 0 | 0 | $ 0 | $ 7 | ||||
Archer Convertible Bond | ||||||||
Related Party Transaction [Line Items] | ||||||||
Impairment of investments | 29 | $ 11 | ||||||
Related party receivable fair value | 13 | |||||||
West Vela earn out realized | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Related Party Transaction [Line Items] | ||||||||
Total contingent consideration recognized | $ 0 | $ 0 | 0 | $ 7 | ||||
Subordinated loans including accrued interest and fees | Archer Convertible Bond | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party receivable fair value | $ 10 | |||||||
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% | 5.50% | ||||||
Carrying value of related party receivable | $ 13 | |||||||
Embedded derivative option | Archer Convertible Bond | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party receivable fair value | $ 3 | |||||||
Fair value | Subordinated loans including accrued interest and fees | Archer | ||||||||
Related Party Transaction [Line Items] | ||||||||
Carrying value of related party receivable | 56 | |||||||
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 - Fa
Related party transactions - Fair Value Gain/Loss on Convertible Bond (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Fair value (loss) / gain | $ (11) | $ 0 | $ (29) | $ 0 |
Archer | Fair value gain/ (loss) of Archer debt component | ||||
Related Party Transaction [Line Items] | ||||
Fair value (loss) / gain | 3 | (3) | 4 | 2 |
Archer | Fair value gain/ (loss) of Archer embedded conversion option | ||||
Related Party Transaction [Line Items] | ||||
Fair value (loss) / gain | $ 0 | $ (9) | $ 3 | $ 2 |
Related party transactions - _3
Related party transactions - Analysis of Related Party Payable Balances (Details) $ in Millions | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | ||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | $ 433 | $ 433 | $ 433 | $ 258 | |||
Amounts due to related parties - current | (7) | (7) | (7) | (19) | |||
Long-term debt due to related parties | (426) | (426) | (426) | (239) | |||
Write off of unamortized debt discount | 87 | $ 0 | $ 0 | 87 | 0 | ||
Fair value measurement on deconsolidation of VIE | [1] | 0 | 0 | 509 | 0 | ||
Related party loans payable | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | 426 | 426 | $ 426 | 0 | |||
Interest expense on related party payable | $ 7 | $ 7 | 14 | ||||
Related party loans payable | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party payable | 1.00% | ||||||
Related party loans payable | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate on related party payable | 4.50% | ||||||
Trading balances | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | 7 | 7 | $ 7 | 19 | |||
Ship Finance SPV's | Related party loans payable | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | 0 | 0 | 0 | 239 | |||
Debt principal outstanding | $ 314 | ||||||
Due to related parties, carrying value prior to deconsolidation | 933 | 933 | 933 | ||||
Due to related parties, fair value at deconsolidation | 424 | $ 424 | 424 | ||||
Write off of unamortized debt discount | $ 2 | ||||||
Fair value measurement on deconsolidation of VIE | $ 509 | ||||||
Ship Finance SPV's | Related party loans payable | Discounted cash flow | Discount rate | |||||||
Related Party Transaction [Line Items] | |||||||
Fair value, cost of debt percent | 0.37 | 0.37 | 0.37 | ||||
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Related party transactions - Sa
Related party transactions - Sale and Leaseback Arrangements (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2013 | Nov. 30, 2008 | Oct. 31, 2008 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||||
Purchase price | $ 98 | $ 116 | $ 148 | $ 162 | |||
West Taurus | |||||||
Related Party Transaction [Line Items] | |||||||
Purchase price | $ 850 | ||||||
West Hercules | |||||||
Related Party Transaction [Line Items] | |||||||
Purchase price | $ 850 | ||||||
West Linus | |||||||
Related Party Transaction [Line Items] | |||||||
Purchase price | $ 600 | ||||||
Ship Finance SPV's | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Remaining lease payments | 768 | ||||||
Purchase obligation | 378 | ||||||
Total commitment | 1,146 | ||||||
Fair value on initial recognition | 424 | ||||||
Book value | 426 | ||||||
Ship Finance SPV's | Affiliated Entity | West Taurus | |||||||
Related Party Transaction [Line Items] | |||||||
Remaining lease payments | 191 | ||||||
Purchase obligation | 154 | ||||||
Total commitment | 345 | ||||||
Fair value on initial recognition | 146 | ||||||
Book value | 147 | ||||||
Ship Finance SPV's | Affiliated Entity | West Hercules | |||||||
Related Party Transaction [Line Items] | |||||||
Remaining lease payments | 184 | ||||||
Purchase obligation | 138 | ||||||
Total commitment | 322 | ||||||
Fair value on initial recognition | 136 | ||||||
Book value | 137 | ||||||
Ship Finance SPV's | Affiliated Entity | West Linus | |||||||
Related Party Transaction [Line Items] | |||||||
Remaining lease payments | 393 | ||||||
Purchase obligation | 86 | ||||||
Total commitment | 479 | ||||||
Fair value on initial recognition | 142 | ||||||
Book value | $ 142 |
Related party transactions - Su
Related party transactions - Summary of Average Bareboat Charter Rates per Day (Details) $ in Thousands | Dec. 31, 2020USD ($) |
West Taurus | |
Sale Leaseback Transaction [Line Items] | |
2021 | $ 96 |
2022 | 96 |
2023 | 181 |
2024 | 177 |
2025 and thereafter | 0 |
West Hercules | |
Sale Leaseback Transaction [Line Items] | |
2021 | 96 |
2022 | 96 |
2023 | 183 |
2024 | 176 |
2025 and thereafter | 0 |
West Linus | |
Sale Leaseback Transaction [Line Items] | |
2021 | 99 |
2022 | 92 |
2023 | 189 |
2024 | 153 |
2025 and thereafter | $ 122 |
Related party transactions - Ot
Related party transactions - Other Related Party Transactions (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2013 | Nov. 30, 2012 |
Sponsor guarantee | ||||
Related Party Transaction [Line Items] | ||||
Total amount guaranteed | $ 132,000,000 | $ 146,000,000 | ||
Seabras Sapura | Secured Debt | Sapura Esmeralda | ||||
Related Party Transaction [Line Items] | ||||
Maximum borrowing capacity | $ 36,000,000 | $ 179,000,000 |
Financial instruments and ris_3
Financial instruments and risk management - Interest Rate Risk (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Apr. 10, 2019 | |
Debt Instrument [Line Items] | |||
Principal outstanding | $ 4,939 | ||
Hedging instruments | 0 | ||
Net exposure | 4,939 | ||
Impact of 1% increase in rates | 50 | ||
Total debt principal | 6,177 | $ 6,759 | |
Total floating rate debt obligations | |||
Debt Instrument [Line Items] | |||
Principal outstanding | 5,662 | ||
Hedging instruments | 0 | ||
Net exposure | 5,662 | ||
Impact of 1% increase in rates | 57 | ||
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 | 12 | ||
Total floating rate debt obligations | Ineffective portion of interest rate cap | |||
Debt Instrument [Line Items] | |||
Principal outstanding | 0 | ||
Hedging instruments | 4,500 | ||
Net exposure | 4,500 | ||
Impact of 1% increase in rates | $ 45 | ||
Impact that would be mitigated (as a percent) | 0.00% | ||
Hypothetical increase in rates (as a percent) | 1.00% | ||
Less: Cash and Restricted Cash | |||
Debt Instrument [Line Items] | |||
Principal outstanding | $ (723) | ||
Hedging instruments | 0 | ||
Net exposure | (723) | ||
Impact of 1% increase in rates | (7) | ||
Secured Debt | Senior secured notes | |||
Debt Instrument [Line Items] | |||
Total debt principal | $ 515 | $ 476 | $ 476 |
Financial instruments and ris_4
Financial instruments and risk management - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | May 11, 2018 | Apr. 26, 2017 |
Derivative [Line Items] | ||||
Convertible bond issued by Archer | $ 433 | $ 258 | ||
Interest rate cap | Not designated as a hedge | ||||
Derivative [Line Items] | ||||
Derivative asset purchased | $ 68 | |||
Interest rate cap | Not designated as a hedge | LIBOR | ||||
Derivative [Line Items] | ||||
Capped rate | 2.87% | |||
Archer | Convertible bond | ||||
Derivative [Line Items] | ||||
Convertible bond issued by Archer | $ 13 |
Financial instruments and ris_5
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, 2020 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss on derivative financial instruments | $ (31) | $ (4) | $ 0 | $ (37) |
Interest rate cap agreement | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss on derivative financial instruments | (22) | (6) | (3) | (37) |
Archer convertible debt instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss on derivative financial instruments | $ (9) | $ 2 | $ 3 | $ 0 |
Financial instruments and ris_6
Financial instruments and risk management - Derivative Financial Instruments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Outstanding principal | $ 4,939,000,000 | |
Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative financial instruments | 0 | $ 3,000,000 |
Other Assets | Interest rate cap | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding principal | 4,500,000,000 | |
Derivative financial instruments | $ 0 | $ 3,000,000 |
Fair values of financial inst_3
Fair values of financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Related party loans receivable | $ 477 | $ 704 |
Fair value | Level 2 | ||
Assets | ||
Related party loans receivable | 379 | 395 |
Liabilities | ||
Related party loans payable | 0 | 239 |
Fair value | Level 2 | Senior credit facilities | ||
Liabilities | ||
Debt | 1,193 | 5,464 |
Fair value | Level 2 | Credit facilities contained within variable interest entities | ||
Liabilities | ||
Debt | 0 | 590 |
Fair value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | 213 | 404 |
Fair value | Level 3 | ||
Liabilities | ||
Related party loans payable | 424 | 0 |
Carrying value | Level 2 | ||
Assets | ||
Related party loans receivable | 379 | 488 |
Liabilities | ||
Related party loans payable | 0 | 239 |
Carrying value | Level 2 | Senior credit facilities | ||
Liabilities | ||
Debt | 5,662 | 5,549 |
Carrying value | Level 2 | Credit facilities contained within variable interest entities | ||
Liabilities | ||
Debt | 0 | 598 |
Carrying value | Level 1 | Secured Debt | ||
Liabilities | ||
Debt | 515 | 476 |
Carrying value | Level 3 | ||
Liabilities | ||
Related party loans payable | $ 426 | $ 0 |
Fair values of financial inst_4
Fair values of financial instruments - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Temporary equity | ||
Redeemable non-controlling interest | $ 0 | $ 57 |
Fair value, recurring basis | Level 1 | ||
Assets | ||
Cash and cash equivalents | 526 | 1,115 |
Restricted cash | 197 | 242 |
Marketable securities | 8 | 11 |
Fair value, recurring basis | Level 3 | ||
Assets | ||
Related party loans receivable | 13 | 35 |
Temporary equity | ||
Redeemable non-controlling interest | 0 | 57 |
Fair value, recurring basis | Level 2 | Interest rate cap | ||
Assets | ||
Interest rate cap | $ 0 | $ 3 |
Fair values of financial inst_5
Fair values of financial instruments - Additional Information (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Loss on impairment of intangibles | $ 0 | $ 0 | $ (21) | $ 0 |
Discount rate | Discounted cash flow | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Related party loans payable, weighted average cost of capital | 0.37 | |||
Discount rate | Senior credit facilities | Discounted cash flow | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value, cost of debt percent | 0.118 | 0.06 |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Millions | Apr. 21, 2020USD ($) | Mar. 31, 2019rig | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)contract | Mar. 26, 2020USD ($) |
Guarantor Obligations [Line Items] | ||||||||
Number of newbuilding contracts terminated | contract | 8 | 8 | ||||||
Number of rigs included in legal proceedings | rig | 8 | |||||||
Maximum guarantee | $ 282 | $ 311 | $ 282 | |||||
Insurance deductible | 1.3 | 1.3 | ||||||
Loss incident - amounts recovered | 15.3 | |||||||
Losses recoverable under insurance | 6.4 | 6.4 | ||||||
Loss of hire insurance settlement | $ 0 | $ 0 | 9 | 10 | 19.5 | |||
Loss from Catastrophes | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Loss incident - costs to repair equipment | 23 | |||||||
Guarantees in favor of customers | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | 150 | 165 | 150 | |||||
Total amount guaranteed | 132 | 146 | 132 | |||||
Guarantees in favor of customers | Seadrill Partners | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | 0 | 15 | 0 | |||||
Guarantees in favor of customers | Northern Ocean | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | 100 | 100 | 100 | |||||
Guarantees in favor of customers | Sonadrill | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | 50 | 50 | 50 | |||||
Guarantee in favor of banks | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | $ 132 | $ 146 | $ 132 | |||||
Guarantee, amount called by lenders | $ 16 | |||||||
Guarantee in favor of banks | SeaMex | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Maximum guarantee | $ 22 | |||||||
Guarantee, amount called by lenders | $ 8 |
Variable Interest Entities - Ba
Variable Interest Entities - Balance Sheets of VIEs (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 526 | $ 1,115 | |
Total assets | 3,961 | 9,279 | |
Long-term interest-bearing debt | 6,177 | 6,623 | |
Other liabilities | 436 | 450 | |
Equity of the VIEs | $ (3,140) | 1,642 | |
Variable Interest Entity, primary beneficiary | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 22 | ||
Investment in finance lease | 972 | ||
Total assets | 994 | ||
Short-term interest-bearing debt | 48 | ||
Long-term interest-bearing debt | 550 | ||
Other liabilities | 5 | ||
Short-term amounts due to related parties | 12 | ||
Long-term loan due to related parties | 239 | ||
Total liabilities of the VIEs | 854 | ||
Equity of the VIEs | $ 137 | $ 140 |
Variable Interest Entities - Re
Variable Interest Entities - Related Party Debt (Details) - Variable Interest Entity, primary beneficiary $ in Millions | Dec. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | |
Debt principal outstanding | $ 314 |
Debt discount | (75) |
Trading liability positions held against long-term loan | 0 |
Long-term loan due to related parties | $ 239 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) $ in Millions | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020USD ($)rig | Dec. 31, 2020USD ($)rig | Dec. 31, 2018USD ($) | Jul. 01, 2018USD ($) | Dec. 31, 2020USD ($)rig | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2013arrangement | ||
Variable Interest Entity [Line Items] | |||||||||
Number of sale and leaseback arrangements | arrangement | 2 | ||||||||
Equity of the VIEs | $ (3,140) | $ (3,140) | $ (3,140) | $ 1,642 | |||||
Number of leased rigs | rig | 3 | 3 | 3 | ||||||
Fair value measurement on deconsolidation of VIE | [1] | $ 0 | $ 0 | $ 509 | 0 | ||||
Write off of unamortized debt discount | $ 87 | $ 0 | $ 0 | 87 | 0 | ||||
Total related party receivables | $ 477 | 477 | 477 | 704 | |||||
Maximum guarantee | 282 | 282 | 282 | 311 | |||||
Guarantees in favor of customers | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Maximum guarantee | 150 | 150 | 150 | 165 | |||||
Northern Ocean | Guarantees in favor of customers | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Maximum guarantee | 100 | 100 | 100 | 100 | |||||
Related party loans payable | Ship Finance SPV's | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Due to related parties, carrying value prior to deconsolidation | 933 | 933 | 933 | ||||||
Due to related parties, fair value at deconsolidation | 424 | 424 | 424 | ||||||
Fair value measurement on deconsolidation of VIE | 509 | ||||||||
Write off of unamortized debt discount | 2 | ||||||||
Work performed to mobilize drilling rig for first drilling contract | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Total related party receivables | $ 142 | $ 142 | $ 142 | 60 | |||||
Variable Interest Entity, primary beneficiary | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Equity of the VIEs | $ 140 | $ 137 | |||||||
[1] | Includes transactions with related parties. Refer to Note 32 - "Related party transactions" for further details. |
Supplementary cash flow infor_3
Supplementary cash flow information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Non-cash investing activities | ||||
Proceeds from sale of West Epsilon rig | $ 0 | $ 0 | $ 12 | $ 0 |
Non-cash financing activities | ||||
Repayment of debt following sale of West Epsilon rig (1) | $ 0 | $ 0 | $ (12) | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - rig | Feb. 03, 2021 | Jan. 15, 2021 | Apr. 30, 2021 |
Forecast | |||
Subsequent Event [Line Items] | |||
Reduction in number of drilling units | 33 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Cash interest payment defaulted | 4.00% | ||
Subsequent Event | Seadrill Partners | |||
Subsequent Event [Line Items] | |||
Transition services agreement, term | 90 days |
Uncategorized Items - sdrl-2020
Label | Element | Value |
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 2,827,000,000 |
Retained Earnings [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | (3,593,000,000) |
AOCI Attributable to Parent [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 27,000,000 |
Common Stock [Member] | ||
Cancellation Of Predecessor Equity, Shares | sdrl_CancellationOfPredecessorEquityShares | 1,008,000,000 |
Additional Paid-in Capital [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 3,322,000,000 |
Parent [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | 2,720,000,000 |
Noncontrolling Interest [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | 107,000,000 |
Other Additional Capital [Member] | ||
Cancellation Of Predecessor Equity | sdrl_CancellationOfPredecessorEquity | $ 1,956,000,000 |