SEADRILL LTD, 20-F filed on 4/2/2020
Annual and Transition Report (foreign private issuer)
v3.20.1
Cover page
 12 Months Ended
Dec. 31, 2019
shares
Cover [Abstract]  
Entity Registrant Name SEADRILL LTD
Entity Central Index Key 0001737706
Current Fiscal Year End Date --12-31
Document Annual Report true
Document Transition Report false
Document Shell Company Report false
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Accelerated Filer
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding (in shares) 100,234,973
Document Fiscal Year Focus 2019
Document Fiscal Period Focus FY
Document Type 20-F
Amendment Flag false
Document Period End Date Dec. 31, 2019
v3.20.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Operating revenues        
Contract revenues $ 469 $ 619 $ 997 $ 1,888
Total operating revenues 541 712 1,388 2,088
Operating expenses        
Depreciation (236) (391) (426) (798)
Amortization of intangibles (58) 0 (134) 0
Selling, general and administrative expenses [1] (62) (100) (130) (277)
Total operating expenses (737) (918) (1,722) (1,902)
Other operating items        
Impairment of long lived assets 0 (414) 0 (696)
Loss on disposals [1] 0 0 0 (245)
Other operating income [1] 21 7 39 27
Total other operating items 21 (407) 39 (914)
Operating loss (175) (613) (295) (728)
Financial and other non-operating items        
Interest income [1] 40 19 69 60
Interest expense [1] (261) (38) (487) (285)
Loss on impairment of investments 0 0 (302) (841)
Share in results from associated companies (net of tax) (90) 149 (115) 174
(Loss)/gain on derivative financial instrument (31) (4) (37) 11
Impairment of convertible bond from related party [1] 0 0 (11) 0
Net (loss)/gain on debt extinguishment 0 0 (22) 19
Foreign exchange loss (4) 0 (11) (65)
Loss on marketable securities (64) (3) (46) 0
Reorganization items, net (9) (3,365) 0 (1,337)
Other financial and non-operating items [1] (3) 0 (4) (44)
Total financial and other non-operating items (422) (3,242) (966) (2,308)
Loss before income taxes (597) (3,855) (1,261) (3,036)
Income tax benefit/(expense) (8) (30) 39 (66)
Net loss (605) (3,885) (1,222) (3,102)
Net loss attributable to the parent (602) (3,881) (1,219) (2,973)
Net loss attributable to the non-controlling interest (2) (6) (1) (129)
Net (loss)/gain attributable to the redeemable non-controlling interest $ (1) $ 2 $ (2) $ 0
Basic loss per share (usd per share) $ (6.02) $ (7.71) $ (12.18) $ (5.89)
Diluted loss per share (usd per share) $ (6.02) $ (7.71) $ (12.18) $ (5.89)
Reimbursable revenues/ expenses        
Operating revenues        
Reimbursable and other revenues [1] $ 26 $ 21 $ 264 $ 38
Operating expenses        
Expenses [1] (24) (20) (262) (35)
Other revenues        
Operating revenues        
Reimbursable and other revenues [1] 46 72 127 162
Vessel and rig operating expenses        
Operating expenses        
Expenses [1] $ (357) $ (407) $ (770) $ (792)
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Statement of Comprehensive Income [Abstract]        
Net loss $ (605) $ (3,885) $ (1,222) $ (3,102)
Other comprehensive (loss)/income, net of tax:        
Unrealized gain on marketable securities 0 0 0 14
Change in fair value of debt component of Archer convertible bond (3) 0 3 0
Actuarial (loss)/gain relating to pensions 1 0 (1) (3)
Unrealized gain on interest rate swaps in VIEs and subsidiaries 0 0 0 2
Share of other comprehensive loss from associated companies (5) 0 (8) (8)
Other comprehensive (loss)/income (7) 0 (6) 5
Total comprehensive loss for the period (612) (3,885) (1,228) (3,097)
Comprehensive loss attributable to the parent (609) (3,881) (1,225) (2,976)
Comprehensive loss attributable to the non-controlling interest (2) (6) (1) (121)
Comprehensive (loss)/income attributable to the redeemable non-controlling interest $ (1) $ 2 $ (2) $ 0
v3.20.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 1,115 $ 1,542
Restricted cash 135 461
Marketable securities 11 57
Accounts receivables, net 173 208
Amount due from related parties - current 181 177
Other current assets 158 322
Total current assets 1,773 2,767
Non-current assets    
Investment in associated companies 389 800
Drilling units 6,401 6,659
Restricted cash 107 0
Deferred tax assets 4 18
Equipment 23 29
Amount due from related parties - non-current 523 539
Other non-current assets 59 36
Total non-current assets 7,506 8,081
Total assets 9,279 10,848
Current liabilities    
Debt due within one year 343 33
Trade accounts payable 86 82
Amounts due to related parties - current 19 39
Other current liabilities 322 310
Total current liabilities 770 464
Non-current liabilities    
Long-term debt 6,280 6,881
Long-term debt due to related parties 239 222
Deferred tax liabilities 12 87
Other non-current liabilities 128 121
Total non-current liabilities 6,659 7,311
Commitments and contingencies (see note 34)
Redeemable non-controlling interest 57 38
EQUITY    
Common shares of par value US$0.10 per share: $0.10 per share: 138,880,000 shares authorized and 100,234,973 issued at December 31, 2019 (US$0.10 per share: 111,111,111 shares authorized and 100,000,000 issued at December 31, 2018) 10 10
Additional paid in capital 3,496 3,491
Accumulated other comprehensive loss (13) (7)
Retained earnings (1,851) (611)
Total Shareholder’s equity 1,642 2,883
Non-controlling interest 151 152
Total equity 1,793 3,035
Total liabilities and equity $ 9,279 $ 10,848
v3.20.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2019
Jun. 05, 2019
Dec. 31, 2018
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Equity              
Common shares, par value (in dollars per share) $ 0.10   $ 0.10 $ 0.10 $ 2.00 $ 2.00 $ 2.00
Common shares, authorized (in shares) 138,880,000 138,880,000 111,111,111 111,111,111      
Common shares, issued (in shares) 100,234,973   100,000,000 100,000,000 508,763,020 508,763,020,000,000 508,763,020,000,000
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Cash Flows from Operating Activities        
Net loss $ (605) $ (3,885) $ (1,222) $ (3,102)
Adjustments to reconcile net loss to net cash provided by operating activities:        
Depreciation 236 391 426 798
Amortization of deferred loan charges 0 0 0 27
Amortization of unfavorable and favorable contracts 58 (21) 134 (43)
Share of results from associated companies 90 (149) 115 (174)
Impairment of investments 0 0 302 841
Share-based compensation expense 0 3 5 7
Loss on disposals 0 0 0 245
Interest unwind on contingent consideration assets 0 (7) 0 (27)
Unrealized loss/(gain) related to derivative financial instruments 31 4 37 (76)
Loss on impairment of long-lived assets 0 414 0 696
Deferred tax (benefit)/expense (22) 0 (61) 7
Unrealized foreign exchange gain on long-term debt 0 0 0 59
Amortization of discount on debt 23 0 36 0
Gain on derecognition of investment in associated company 0 0 0 (10)
Impairment of convertible bond from related party [1] 0 0 11 0
Net loss/(gain) on debt extinguishment 0 0 22 (19)
Unrealized loss on marketable securities 64 3 46 0
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 1,274
Other (3) (1) (3) (2)
Other cash movements in operating activities        
Distributions received from associated companies 32 17 11 39
Payments for long-term maintenance (71) (78) (114) (58)
Settlement of payment-in-kind interest on Senior Secured Notes 0 0 (39) 0
Changes in operating assets and liabilities, net of effect of acquisitions and disposals        
Trade accounts receivable 64 29 35 167
Trade accounts payable (31) 4 4 (9)
Prepaid expenses/accrued revenue 12 42 (1) (66)
Deferred revenue 21 (23) 13 (107)
Related party receivables 7 (13) (43) (42)
Related party payables 54 (42) (3) (44)
Other assets (20) (62) (12) 93
Other liabilities 34 (10) 45 (75)
Net cash (used in)/provided by operating activities (26) (213) (256) 399
Cash Flows from Investing Activities        
Additions to newbuildings 0 (1) 0 (33)
Additions to drilling units and equipment (27) (48) (48) (59)
Refund of yard installments 0 0 0 25
Contingent consideration received 65 48 32 95
Settlement of West Mira 0 0 0 170
Sale of rigs and equipment 0 126 0 122
Buyout of guarantee 0 0 0 (28)
Investment in associated companies 0 0 (25) 0
Payments received from loans granted to related parties 23 24 15 66
Net cash (used in)/provided by investing activities 61 149 (26) 358
Cash Flows from Financing Activities        
Proceeds from debt 0 875 0 0
Repayments of secured credit facilities (83) (153) (34) (754)
Redemption of Senior Secured Notes (121) 0 (333) 0
Debt fees paid (4) (35) 0 (53)
Repayments of debt to related party 0 0 0 (39)
Proceeds from issuance of shares 0 200 0 0
Net cash (used in)/provided by financing activities (208) 887 (367) (846)
Effect of exchange rate changes on cash and cash equivalents (1) (5) 3 5
Net (decrease)/increase in cash and cash equivalents, including restricted cash (174) 818 (646) (84)
Cash and cash equivalents, including restricted cash, at beginning of the year 2,177 1,359 2,003 1,443
Cash and cash equivalents, including restricted cash, at the end of year 2,003 2,177 1,357 1,359
Supplementary disclosure of cash flow information        
Interest paid, net of capitalized interest (178) (38) (391) (264)
Taxes paid $ (16) $ (22) $ (36) $ (119)
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Total equity before NCI
Common shares
Additional paid in capital
Contributed surplus
Accumulated other comprehensive income/(loss)
Retained Earnings
Non-controlling interest
Beginning balance, shares at Dec. 31, 2016 508,763,020,000,000   1,008,000,000          
Beginning balance at Dec. 31, 2016 $ 10,063 $ 9,521   $ 3,306 $ 1,956 $ 53 $ 3,198 $ 542
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net loss (3,102) (2,973)         (2,973) (129)
Other comprehensive (loss)/income 5 5       5    
Share-based compensation charge 7 7   7        
Distributions to non-controlling interests $ (14)             (14)
Ending balance, shares at Dec. 31, 2017 508,763,020,000,000   1,008,000,000          
Ending balance at Dec. 31, 2017 $ 6,959 6,560   3,313 1,956 58 225 399
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 508,763,020   0          
Ending balance at Jul. 01, 2018 $ 154 0   0 0 0 0 154
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
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
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
Beginning balance, shares at Jul. 01, 2018 508,763,020   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]                
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 $ 1,642   $ 3,496 $ 0 $ (13) $ (1,851) $ 151
v3.20.1
General information
 12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
General information
General information
Seadrill Limited is incorporated in Bermuda and is a publicly listed company on the New York Stock Exchange and the Oslo Stock Exchange. We provide offshore drilling services to the oil and gas industry. As at December 31, 2019 we owned and operated 35 offshore drilling units and an option to acquire one semi-submersible rig. Our fleet consists of drillships, jack-up rigs and semi-submersible rigs for operations in shallow and deepwater areas, as well as benign and harsh environments. We also provide management services to our related parties Seadrill Partners, SeaMex, Northern Drilling 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.
Basis of presentation
The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar ("U.S. dollar" or "US$") rounded to the nearest million, unless otherwise stated.
The accompanying Consolidated Financial Statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which we control, or directly or indirectly holds more than 50% of the voting control are consolidated in the Consolidated Financial Statements, as well as certain variable interest entities of which we are deemed to be the primary beneficiary.
Basis of consolidation
The Consolidated Financial Statements include the revenue, expenses, assets and liabilities of our principal holding company, our majority owned and controlled subsidiaries and certain variable interest entities (“VIE”s) in which we are deemed to be the primary beneficiary. Subsidiaries, even if fully owned, would be excluded from the Consolidated Financial Statements if we are not deemed to be the primary beneficiary as assessed under the variable interest model. All intercompany balances and transactions have been eliminated on consolidation.
A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic success, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. We have certain investments in the common stock or in-substance common stock of associated companies. Refer to Note 2 – Accounting policies for further information on our equity investments.
Bankruptcy accounting
As set out in Note 4 - Chapter 11 Proceedings, we operated as a debtor-in-possession from September 12, 2017 to July 2, 2018. During this period, we prepared our Consolidated Financial Statements under Accounting Standards Codification 852, Reorganizations ("ASC 852"). ASC 852 required that the financial statements distinguished transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings were recorded in “Reorganization items" on our Consolidated Statements of Operations. In addition, ASC 852 required changes in the accounting and presentation of significant items on the Consolidated Balance Sheets, particularly liabilities. Pre-petition obligations that may have been impacted by the Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". 
Fresh Start Reporting
Upon emergence from bankruptcy on July 2, 2018 (the "Effective Date"), in accordance with ASC 852 related to fresh start reporting, Seadrill Limited became a new entity for financial reporting purposes. Upon adoption of fresh start reporting, our assets and liabilities were recorded at their fair values. We elected to apply fresh start reporting effective July 2, 2018 (the “Convenience Date”) to coincide with the timing of our normal third quarter reporting period. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and use of an accounting convenience date was appropriate. The fair values of our assets and liabilities differed materially from the recorded values of our assets and liabilities as reflected in the Predecessor historical Consolidated Balance Sheets. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related predominantly deferred tax effects through "Income tax expense", during the period from January 1, 2018 through July 1, 2018.
Accordingly, our Consolidated Financial Statements subsequent to July 2, 2018 are not and will not be comparable to the Predecessor Consolidated Financial Statements prior to the Convenience Date. Our Consolidated Financial Statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented on July 2, 2018 and dates prior. Our financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material.
Out of period adjustment
The financial statements for the period from January 1, 2018 through July 1, 2018 (Predecessor) include an income tax expense of $18 million due to an adjustment in the income tax charge for a subsidiary related to prior years. We considered the effect of this prior period correction not to be material in the context of the overall results for the period from January 1, 2018 through July 1, 2018 (Predecessor), the year ended December 31, 2017 (Predecessor), or to any previously reported quarterly or annual financial statements.
v3.20.1
Accounting policies
 12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Accounting policies
Accounting policies
The accounting policies set out below have been applied consistently to all periods in these Consolidated Financial Statements, unless otherwise noted.
Use of estimates
Preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Foreign currencies
The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby the Statement of Operations are translated using the average exchange rate for the 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 assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations.
Related parties
Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. Refer to Note 31 – Related Party Transactions.
Revenue from contracts with customers
The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments.
We recognize consideration for activities that correspond to a distinct time increment within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment, ratably over the estimated contract term.
We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess these estimates each reporting period as required. Refer to Note 7 - Revenue from Contracts with Customers.
Dayrate drilling revenue - Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term, and therefore, recognized in line with the contractual rate billed for the services provided for any given hour.
Mobilization revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract.
Demobilization revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions.
Revenues related to reimbursable expenses - We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations.
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, external management fees, and early termination fees. Refer to Note 8 – Other revenues.
Management fees - Revenues related to operation support and management services provided to Seadrill Partners, Seamex, Sonadrill & Northern Drilling. This includes both related and non-related companies.
Early termination fees - Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved.
Vessel and Rig Operating Expenses
Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked and include the remuneration of offshore crews and related costs, rig supplies, insurance costs, expenses for repairs and maintenance and costs for onshore support personnel. We expense such costs as incurred.
On emergence, we classified certain costs as "vessel and rig operating expenses" that are directly attributable to rig activities and had previously been classified as "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 don't expect the costs to be recoverable, in which case we expense them as incurred.
We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. 
Repairs, maintenance and periodic surveys
Costs related to periodic overhauls of drilling units are capitalized and amortized over the anticipated period between overhauls, which is generally five years. Related costs are primarily yard costs and the cost of employees directly involved in the work. We include amortization costs for periodic overhauls in depreciation expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred.
Income taxes
Seadrill is a Bermudan company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – Taxation.
The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authorities widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments.
Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs.
Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards.
Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted.
Loss per share
Basic loss per share (“LPS”) is calculated based on the loss for the period available to common stockholders 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 13 – Loss per share.
Current and non-current classification
Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments whose fair value is a net liability as current.
Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal and we classify any derivatives financial instruments whose fair value is a net asset as current.
Cash and cash equivalents
Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less.
Restricted cash
Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets. Refer to Note 14 – Restricted cash.
Receivables
Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. We establish reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, we consider the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. Interest income on receivables is recognized as earned. Refer to Note 16 – Accounts receivable & Note 31 – Related party transactions.
Contract assets and liabilities
Accounts receivables (see above) are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. If we are required to recognize revenue ahead of this point, we categorize the balance as a contract asset. Contract asset balances consist primarily of demobilization revenues which have been recognized during the period but are contingent on future demobilization activities.
Contract liabilities include payments received for mobilization as well as rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract.
Equity investments
Investments in common stock are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are also considered. We classify our other equity investments either as "Marketable Securities" or "Investments in Associated Companies" depending on their nature. We classify our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". We record gains or losses on investments held fair value as "Loss on Marketable Securities". Refer to Note 15 – Marketable securities and Note 18 – Investment in associated companies.
We analyze our equity method investments for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs.
All other equity investments, which consist of investments that do not gives us the ability to exercise significant influence as well as investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. If we can’t readily ascertain the fair value, we record the investment at cost less impairment.  We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that indicates that the investment's is impaired. If an event or change in circumstances has occurred in that period that indicates that the investment's is impaired, then we record an impairment charge for the difference between the estimated fair value of the investment and its carrying amount.
For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date. Refer to Note 11 - Impairment loss on investments in associated companies for details.
Newbuildings
Generally, the carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components usually include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. During construction, capitalized interest of newbuildings is based on accumulated expenditures for the applicable project at our current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying the interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period. We don't capitalize amounts beyond the actual interest expense incurred in the period.
We ceased capitalization of interest on newbuildings when we operated as a debtor-in-possession as interest payments made during bankruptcy proceedings were treated as adequate protection payments. On emergence from Chapter 11, the Newbuildings carrying value was adjusted to a fair value of nil. In addition, we have not capitalized interest since emergence as work on our Newbuild projects had substantially ceased. Refer to Note 5 – Fresh Start Accounting and Note 19 – Newbuildings.
Drilling units
Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jack-up rigs, when new, is 30 years. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Refer to Note 20 – Drilling units.
Drilling units recognized through a business combination or through the application of fresh start accounting are measured at fair value as of the date of acquisition or the date of emergence, respectively. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations.
Assets held for sale
Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Equipment
Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between 3 and 5 years depending on the type of asset. Refer to Note 21 – Equipment.
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. 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 will adjust the measurement of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over lease term using the interest method. After commencement date, we will subsequently adjust the measurement of the ROU asset by amortizing 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 will determine whether a ROU asset is impaired and shall recognize any impairment loss in accordance with the company policy on impairment of long-lived assets. If a ROU asset is determined to be impaired, then it will be measured at its carrying amount immediately after the impairment less any accumulated amortization. After a ROU asset has been impaired, we will unwind the remaining asset on a straight-line basis over the remaining lease term.

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 result from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, will be the amount which the carrying value of the asset exceeds the discounted future net cash flows.
Other intangible assets and liabilities
Intangible assets and liabilities were recorded at fair value on the date of emergence less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. For periods after emergence we have applied a new accounting policy to classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 17 – Other assets. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 23 – Other liabilities.
Prior to emergence, we classified the amortization of these intangible assets or liabilities within other revenues.
Derivative financial instruments and hedging activities
None of our derivative financial instruments have been formally designated as a hedging instruments, and therefore are recorded at fair value. 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. Refer to Note 32 – Financial instruments and risk management and Note 33 - Fair values of financial instruments.
Trade payables
Trade payables are recorded in the balance sheet to recognize a liability to a supplier for a good or service they have provided us.
Deferred charges
Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan and the amortization is included in interest expense. On emergence from Chapter 11, our loan costs were reduced to nil and we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount will be unwound over the remaining terms of the debt facilities. Refer to Note 5 – Fresh Start Accounting and Note 10 – Interest expense.
Debt
We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we will incur a liability for the principal to be repaid. On emergence from Chapter 11, we issued new debt instruments and the carrying values of our third-party debt liabilities were adjusted to fair value. Refer to Note 5 – Fresh start accounting and Note 22 – Debt for more information on our debt instruments.
Pension benefits
We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We record the service cost, as “Vessel and rig operating expenses” or as "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. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income.   Refer to Note 30 - Pension benefits for more information on the accounting for these pension benefits / pension expense.
Loss contingencies
We recognize a loss contingency in the Consolidated Balance 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. Refer to Note 34 – Commitments and contingencies.
Treasury shares
Treasury shares are recognized at cost as a component of equity. We record the nominal value of treasury shares purchased as a reduction in share capital. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. On emergence from Chapter 11, we no longer had any treasury shares.
Share-based compensation
Since emerging from Chapter 11, we have made several awards under our employee benefit plan (see Note 29 – Share based compensation). We record an accounting charge equal to the fair value of awards that are expected to vest. The expense is classified as compensation cost and recognized ratably over the vesting period. The offsetting entry is recorded directly to equity.
v3.20.1
Recent Accounting Standards
 12 Months Ended
Dec. 31, 2019
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 2016-02 Leases (also 2018-10, 2018-11, 2018-20, 2019-01 & 2019-10)
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years using a modified retrospective application.
We transitioned to the new standard using the modified retrospective approach as permitted by the standard. We determined that our drilling contracts contain a lease component (from a lessor perspective) as well as a revenue component. We have elected to apply the practical expedient provided to lessors and will not separate the lease and nonlease components within our drilling contracts. We will continue to apply the Topic 606 to our drilling contracts instead of Topic 842 because the nonlease component is the predominant component within our drilling contracts. As a result, our pattern of revenue recognition did not change significantly compared to prior accounting standards due to the adoption of this update.
In addition, within our operating leases, where we are lessees, we elected not to separate nonlease components from lease components and instead we account for each separate lease component and the nonlease components associated with that lease component as a single lease component in accordance with Topic 842. We have also elected not to apply the recognition requirements in Topic 842 to short-term leases, being leases lasting less than one year. Instead, we recognize short-term lease payments in our Consolidated Statement of Operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.
We recognized an aggregate lease liability of $25 million and a right-of-use asset of $23 million on adoption on January 1, 2019. There was no impact to our opening retained earnings as a result of adopting this update. Prior period amounts are not adjusted and continue to be reported in accordance with the previous guidance in Topic 840.
b) 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 2018-07 Compensation - Stock compensation (Topic 718)
•
ASU 2018-16 Derivatives and Hedging (Topic 815)
2) Recently issued accounting standards
We have kept abreast of 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 2016-13 - Financial Instruments - Measurement of Credit Losses (Also 2019-04, 2019-05, 2019-10 & 2019-11)
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach to estimate expected lifetime credit losses (CECL model) on financial assets ranging from short term trade accounts receivable to long-term financings and modifies the impairment model for available-for-sale debt securities. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which provides additional guidance on the accounting for credit losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides transition guidance for entities to elect the fair value option of certain financial instruments. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted only from January 1, 2019. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as at the beginning of the first reporting period in which the guidance is adopted.
We are in the process of evaluating the impact of this standard update. Financial assets held by us subject to evaluation under the CECL model include our external trade receivables and related party receivables (See Note 31 for details). Our external customers are international oil companies, national oil companies and large independent oil companies with high credit standing and with whom we have had a low incidence of bad debt expense. Therefore we do not expect this guidance to create any significant reserve on our external receivables. We are however expecting to establish an allowance on our loans and trade receivables due from related parties under the new guidance to reflect the current financial position of the counterparties. We estimate that we will record an initial reserve in the range of $75 - $135 million, which will be booked in a credit loss allowance account as an offset to equity. The allowance will be reassessed quarterly with any adjustment to the reserve recorded as credit loss expense in the P&L.
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 update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The guidance is expected to result in the following additional disclosures; 1) 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; 2) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements; 3) For recurring fair value measurements categorized within Level 3 of the fair value hierarchy, a reconciliation from the opening balances to the closing balances for each class of assets and liabilities, except for derivative assets and liabilities, which may be presented net. We continue to evaluate the impact of this standard update on our consolidated financial statements and related disclosures.
c) ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans
In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
d) ASU 2018-15 Intangibles
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). The update is intended to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
e) ASU 2018-17 Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities
In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The update is intended to improve general purpose financial reporting by considering indirect interests held through related parties in common control arrangements on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
f) ASU 2019-08 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)
In November 2019, the FASB issued ASU 2019-08. The amendments in this Update require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction of the transaction price is required to be measured on the basis of the grant-date fair value of the share-based payment award in accordance with Topic 718, not as a reduction of transaction price at contract inception under ASC 606. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
g) 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 for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
h) Other accounting standard updates issued by the FASB
As of February 29, 2019, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods.
v3.20.1
Chapter 11 Proceedings
 12 Months Ended
Dec. 31, 2019
Reorganizations [Abstract]  
Chapter 11 Proceedings
Chapter 11 Proceedings
In this note we have provided an overview of our Chapter 11 Reorganization and related transactions.
Overview
Prior to the filing of Chapter 11 Proceedings (as defined below), we were engaged in extensive discussions with our secured lenders, certain holders of our unsecured bonds and potential new money investors regarding the terms of a comprehensive restructuring. The objectives of the restructuring were to build a bridge to a recovery and achieve a sustainable capital structure. To achieve this, we had proposed an extension to our bank maturities, reduced debt amortization payments, amendments to financial covenants and raising of new capital.
On September 12, 2017, Old Seadrill Limited, certain of its subsidiaries (together "the Company Parties") and certain Ship Finance companies entered into a restructuring support and lock-up agreement ("RSA") with a group of bank lenders, bondholders, certain other stakeholders, and new-money providers. In connection with the RSA, the Company Parties entered into an "Investment Agreement" under which Hemen Investments Limited, an affiliate of Old Seadrill Limited's largest shareholder Hemen Holding Ltd. and certain other commitment parties, committed to provide $1.06 billion in new cash commitments, subject to certain terms and conditions (the "Capital Commitment").
On September 12, 2017, to implement the transactions contemplated by the RSA and Investment Agreement, Old Seadrill Limited and certain of its subsidiaries (the "Debtors") commenced prearranged reorganization proceedings (the "Chapter 11 Proceedings") under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas Victoria Division. During the bankruptcy proceedings, the Debtors continued to operate the business as debtors in possession.
After September 12, 2017, the Debtors negotiated with their various creditors and on February 26, 2018 announced a "Global Settlement", following which there were amendments to the RSA and Investment Agreement. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.08 billion, increased recoveries for general unsecured creditors under the Plan and an agreement regarding allowed claims from certain newbuild shipyards.
On February 26, 2018, the Debtors filed a proposed Second Amended Joint Chapter 11 Plan of Reorganization (the "Plan") with the Bankruptcy Court. The Plan was confirmed by the Bankruptcy Court on April 17, 2018. The Plan became effective and the Debtors emerged from Chapter 11 Proceedings on July 2, 2018 (the "Effective Date").
The Plan extinguished approximately $2.4 billion in unsecured bond obligations, more than $1.0 billion in contingent newbuild obligations, substantial unliquidated guarantee obligations, and approximately $250 million in unsecured interest rate and currency swap claims, while extending near term debt maturities, providing Seadrill with over $1.0 billion in new capital and leaving employee, customer and ordinary trade claims largely unimpaired.
Key terms of the Plan of Reorganization
As set out above, the Plan was confirmed by the Bankruptcy Court on April 17, 2018 and became effective when the Debtors emerged from Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that:
◦
There was a corporate reorganization whereby Seadrill Limited became the ultimate parent holding company of Old Seadrill Limited's subsidiaries.
◦
The Commitment Parties and subscribers to an equity rights offering subscribed for a total 23,750,000 shares in Seadrill Limited for aggregate consideration of $200 million.
◦
The Commitment Parties and subscribers to a notes rights offering subscribers purchased a total $880 million principal amount of New Secured Notes and were issued 54,625,000 shares in Seadrill Limited for an aggregate consideration of $880 million.
◦
The holders of general unsecured claim were issued 14,250,000 shares in Seadrill Limited.
◦
The former holders of Old Seadrill Limited Equity and certain other claimants were issued 1,900,000 shares in Seadrill Limited.
◦
Certain Commitment Parties received a fee of 475,000 shares in Seadrill Limited and Hemen received a fee of 5,000,000 shares in Seadrill Limited.
◦
An employee incentive plan was implemented (the “Employee Incentive Plan”) which reserved an aggregate of 10% of the Seadrill Limited Shares, for grants to be made from time to time to Seadrill employees and other parties.
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
%
 
 
 
 
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

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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Professional and advisory fees
—

 
(9
)
 
 
(187
)
 
(66
)
New investor commitment fees
—

 
—

 
 
—

 
(53
)
Loss on Newbuilding global settlement claim
—

 
—

 
 
—

 
(1,064
)
Loss on other pre-petition allowed claims
—

 
—

 
 
—

 
(3
)
Gain on liabilities subject to compromise
—

 
—

 
 
2,958

 
—

Fresh start valuation adjustments
—

 
—

 
 
(6,142
)
 
—

Write-off of debt issuance costs
—

 
—

 
 
—

 
(66
)
Reversal of credit risk on derivatives
—

 
—

 
 
—

 
(89
)
Interest income on surplus cash invested
—

 
—

 
 
6

 
4

Total reorganization items, net
—

 
(9
)
 
 
(3,365
)
 
(1,337
)

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 Chapter 11 filing.
ii. New investor commitment fees
Commitment fee of 5% of the committed funds agreed under the terms of the investment agreement.
iii. Loss on Newbuilding global settlement claim
Under the Bankruptcy Code, the Debtors had the right to reject certain contracts, subject to the approval of the Bankruptcy Court and certain other conditions. Subject to certain exceptions, this rejection relieves the debtor from performing its future obligations under the contract but entitles the counterparty to assert a pre-petition general unsecured claim for damages. As part of the Global Settlement Agreement, it was agreed that the Debtors would reject and terminate the newbuild contracts for the drillships West Dorado, West Libra, West Aquila and West Libra. In return the newbuild shipyards Samsung and DSME received an allowed claim for $1,064 million. In addition to the re-organization expense shown above, we also recorded a non-cash impairment charge against these Newbuild assets of $696 million at December 31, 2017. Refer to Note 19 - Newbuildings for further details.
iv. Gain on liabilities subject to compromise
On emergence from Chapter 11 we settled our liabilities subject to compromise in accordance with the Plan. This includes settlement on our unsecured bonds, Newbuild global settlement claim (see above) and interest rate and cross-currency interest rate swaps. Refer to Note 5 – Fresh Start Accounting for further information.
v. Fresh start valuation adjustments
On emergence from Chapter 11, our assets and liabilities were recorded at fair value in accordance with ASC 852 related to fresh start reporting. The effects of the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 (Successor) and the related adjustments thereto were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – Fresh Start Accounting for further information.
vi. Write-off of debt issuance costs
On filing for Chapter 11, $66 million of unamortized debt issuance costs on the impaired secured credit facilities and unsecured bonds were expensed.
vii. Reversal of credit risk on derivatives
The filing for Chapter 11 triggered an event of default under our derivative agreements, and therefore our interest rate and cross-currency interest rate swaps were held at a terminated value. As such, any credit risk adjustment on these arrangements was taken to the Consolidated Statement of Operations.
viii. Interest income on surplus cash invested
Interest income recognized on cash held within entities that had filed for Chapter 11.
Fresh Start Accounting
Fresh Start Accounting
Upon emergence from bankruptcy, we applied fresh start accounting to our financial statements in accordance with the provision set forth in ASC852 as (i) the holders of existing voting shares of the Company prior to emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims.
We elected to apply fresh start accounting effective July 2, 2018 (the "Convenience Date"), to coincide with the timing of the normal third quarter reporting period, which resulted in Seadrill becoming a new entity for financial reporting purposes. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and that the use of an accounting Convenience Date of July 1, 2018 was appropriate. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items" during the period from January 1, 2018 through July 1, 2018. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Consolidated Financial Statements for the period after July 2, 2018 (the “Successor”) will not be comparable with the Consolidated Financial Statements prior to that date.
Reorganization Value
Reorganization value represents the fair value of the Successor Company’s total assets and is intended to approximate to the amount a willing buyer would pay for the assets immediately after restructuring. Under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values.
The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of between $10.2 billion and $11.8 billion. We derived the reorganization value based on the mid-point of this range of estimated distributable values. This was approximately $11.0 billion. Fair values are inherently subject to significant uncertainties and contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, and financial projections will be realized, and actual results could vary materially.
Valuation of Drilling Units
Our principal assets comprise our fleet of drilling units. With the assistance of valuation experts, we determined a fair value of these drilling units based primarily on an income approach utilizing a discounted cash flow analysis. We established an estimate of future cash flows for the period ranging from emergence to the end of life for each rig and discounted the estimated future cash flows to present value. The expected cash flows used in the discounted cash flows were derived from earnings forecasts and assumptions regarding growth and margin projections.
A discount rate of 11.4% was estimated based on an after-tax weighted average cost of capital ("WACC") reflecting the rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the overall uncertainty of the financial projects used to estimate future cash flows. We used a replacement cost approach to value capital spares and other property plant, and equipment.
Valuation of Equity Method Investments
The fair value of equity method investments was derived using an income approach, which discounts future free cash flows. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
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 derived from the discounted cash flow model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is an implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered.
Valuation of debt
We recorded third party and related party debt obligations at a fair value of $7.3 billion which we determined using an income approach. We are amortizing the difference between the $7.6 billion face amount and the fair value recorded in fresh start accounting over the life of the debt. We estimated the fair value of the debt using Level 2 inputs.
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)
As at July 2, 2018

Distributable value
11,056

Less: non-controlling interest
(154
)
Less: fair value of debt
(7,301
)
Less: fair value of other non-operating liabilities
(108
)
Add: fair value of tax attributes
8

Fair value of Successor common stock issued upon emergence
3,501

 
 
Shares issued and outstanding on July 2, 2018
100.0

Per share value
35.01



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)
As at July 2, 2018

Distributable value
11,056

Add: other working capital liabilities
478

Add: other non-current operating liabilities
57

Add: fair value of tax attributes
8

Add: redeemable non-controlling interest
30

Total reorganization value
11,629



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.
 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

ASSETS
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
Cash and cash equivalents
809

 
790

(a)
—

 
1,599

Restricted cash
409

 
169

(a)
—

 
578

Marketable securities
121

 
—

 
—

 
121

Accounts receivable, net
272

 
—

 
—

 
272

Amount due from related parties - current
181

 
—

 
14

(l)
195

Other current assets
247

 
—

 
181

(m)
428

Total current assets
2,039

 
959

 
195

 
3,193

Investment in associated companies
1,615

 
—

 
(687
)
(n)
928

Newbuildings
249

 
—

 
(249
)
(o)
—

Drilling units
12,531

 
—

 
(5,734
)
(p)
6,797

Deferred tax assets
8

 
—

 
—

 
8

Equipment
35

 
—

 
(6
)
(q)
29

Amount due from related parties - non-current
565

 
—

 
11

(r)
576

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

 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

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 shares of common stock at a per share price of $8.42 in connection with the equity commitment, 55 million shares of common stock with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million shares of common stock issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million shares of common stock issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million shares of common stock issued for structuring fees to the select commitment parties and Hemen at an estimated fair value of $35.01 per share.
(k)
As determined in the Plan, NADL and Sevan became wholly owned subsidiaries and the non-controlling interests of NADL and Sevan were eliminated.

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)
 
 
 
 
 
 
 
As at 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 shares of common stock issued in connection with the equity commitment from $8.42 to $35.01 per share.
(bb)
Adjustment to record the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited to fair value.
v3.20.1
Fresh Start Accounting
 12 Months Ended
Dec. 31, 2019
Reorganizations [Abstract]  
Fresh Start Accounting
Chapter 11 Proceedings
In this note we have provided an overview of our Chapter 11 Reorganization and related transactions.
Overview
Prior to the filing of Chapter 11 Proceedings (as defined below), we were engaged in extensive discussions with our secured lenders, certain holders of our unsecured bonds and potential new money investors regarding the terms of a comprehensive restructuring. The objectives of the restructuring were to build a bridge to a recovery and achieve a sustainable capital structure. To achieve this, we had proposed an extension to our bank maturities, reduced debt amortization payments, amendments to financial covenants and raising of new capital.
On September 12, 2017, Old Seadrill Limited, certain of its subsidiaries (together "the Company Parties") and certain Ship Finance companies entered into a restructuring support and lock-up agreement ("RSA") with a group of bank lenders, bondholders, certain other stakeholders, and new-money providers. In connection with the RSA, the Company Parties entered into an "Investment Agreement" under which Hemen Investments Limited, an affiliate of Old Seadrill Limited's largest shareholder Hemen Holding Ltd. and certain other commitment parties, committed to provide $1.06 billion in new cash commitments, subject to certain terms and conditions (the "Capital Commitment").
On September 12, 2017, to implement the transactions contemplated by the RSA and Investment Agreement, Old Seadrill Limited and certain of its subsidiaries (the "Debtors") commenced prearranged reorganization proceedings (the "Chapter 11 Proceedings") under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas Victoria Division. During the bankruptcy proceedings, the Debtors continued to operate the business as debtors in possession.
After September 12, 2017, the Debtors negotiated with their various creditors and on February 26, 2018 announced a "Global Settlement", following which there were amendments to the RSA and Investment Agreement. These amendments provided for, amongst other things, the inclusion of certain other creditors as Commitment Parties, an increase of the Capital Commitment to $1.08 billion, increased recoveries for general unsecured creditors under the Plan and an agreement regarding allowed claims from certain newbuild shipyards.
On February 26, 2018, the Debtors filed a proposed Second Amended Joint Chapter 11 Plan of Reorganization (the "Plan") with the Bankruptcy Court. The Plan was confirmed by the Bankruptcy Court on April 17, 2018. The Plan became effective and the Debtors emerged from Chapter 11 Proceedings on July 2, 2018 (the "Effective Date").
The Plan extinguished approximately $2.4 billion in unsecured bond obligations, more than $1.0 billion in contingent newbuild obligations, substantial unliquidated guarantee obligations, and approximately $250 million in unsecured interest rate and currency swap claims, while extending near term debt maturities, providing Seadrill with over $1.0 billion in new capital and leaving employee, customer and ordinary trade claims largely unimpaired.
Key terms of the Plan of Reorganization
As set out above, the Plan was confirmed by the Bankruptcy Court on April 17, 2018 and became effective when the Debtors emerged from Chapter 11 Proceedings on July 2, 2018. The Plan provided for, among other things, that:
◦
There was a corporate reorganization whereby Seadrill Limited became the ultimate parent holding company of Old Seadrill Limited's subsidiaries.
◦
The Commitment Parties and subscribers to an equity rights offering subscribed for a total 23,750,000 shares in Seadrill Limited for aggregate consideration of $200 million.
◦
The Commitment Parties and subscribers to a notes rights offering subscribers purchased a total $880 million principal amount of New Secured Notes and were issued 54,625,000 shares in Seadrill Limited for an aggregate consideration of $880 million.
◦
The holders of general unsecured claim were issued 14,250,000 shares in Seadrill Limited.
◦
The former holders of Old Seadrill Limited Equity and certain other claimants were issued 1,900,000 shares in Seadrill Limited.
◦
Certain Commitment Parties received a fee of 475,000 shares in Seadrill Limited and Hemen received a fee of 5,000,000 shares in Seadrill Limited.
◦
An employee incentive plan was implemented (the “Employee Incentive Plan”) which reserved an aggregate of 10% of the Seadrill Limited Shares, for grants to be made from time to time to Seadrill employees and other parties.
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
%
 
 
 
 
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

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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Professional and advisory fees
—

 
(9
)
 
 
(187
)
 
(66
)
New investor commitment fees
—

 
—

 
 
—

 
(53
)
Loss on Newbuilding global settlement claim
—

 
—

 
 
—

 
(1,064
)
Loss on other pre-petition allowed claims
—

 
—

 
 
—

 
(3
)
Gain on liabilities subject to compromise
—

 
—

 
 
2,958

 
—

Fresh start valuation adjustments
—

 
—

 
 
(6,142
)
 
—

Write-off of debt issuance costs
—

 
—

 
 
—

 
(66
)
Reversal of credit risk on derivatives
—

 
—

 
 
—

 
(89
)
Interest income on surplus cash invested
—

 
—

 
 
6

 
4

Total reorganization items, net
—

 
(9
)
 
 
(3,365
)
 
(1,337
)

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 Chapter 11 filing.
ii. New investor commitment fees
Commitment fee of 5% of the committed funds agreed under the terms of the investment agreement.
iii. Loss on Newbuilding global settlement claim
Under the Bankruptcy Code, the Debtors had the right to reject certain contracts, subject to the approval of the Bankruptcy Court and certain other conditions. Subject to certain exceptions, this rejection relieves the debtor from performing its future obligations under the contract but entitles the counterparty to assert a pre-petition general unsecured claim for damages. As part of the Global Settlement Agreement, it was agreed that the Debtors would reject and terminate the newbuild contracts for the drillships West Dorado, West Libra, West Aquila and West Libra. In return the newbuild shipyards Samsung and DSME received an allowed claim for $1,064 million. In addition to the re-organization expense shown above, we also recorded a non-cash impairment charge against these Newbuild assets of $696 million at December 31, 2017. Refer to Note 19 - Newbuildings for further details.
iv. Gain on liabilities subject to compromise
On emergence from Chapter 11 we settled our liabilities subject to compromise in accordance with the Plan. This includes settlement on our unsecured bonds, Newbuild global settlement claim (see above) and interest rate and cross-currency interest rate swaps. Refer to Note 5 – Fresh Start Accounting for further information.
v. Fresh start valuation adjustments
On emergence from Chapter 11, our assets and liabilities were recorded at fair value in accordance with ASC 852 related to fresh start reporting. The effects of the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet as of December 31, 2018 (Successor) and the related adjustments thereto were recorded in the Consolidated Statement of Operations in the Predecessor. Refer to Note 5 – Fresh Start Accounting for further information.
vi. Write-off of debt issuance costs
On filing for Chapter 11, $66 million of unamortized debt issuance costs on the impaired secured credit facilities and unsecured bonds were expensed.
vii. Reversal of credit risk on derivatives
The filing for Chapter 11 triggered an event of default under our derivative agreements, and therefore our interest rate and cross-currency interest rate swaps were held at a terminated value. As such, any credit risk adjustment on these arrangements was taken to the Consolidated Statement of Operations.
viii. Interest income on surplus cash invested
Interest income recognized on cash held within entities that had filed for Chapter 11.
Fresh Start Accounting
Fresh Start Accounting
Upon emergence from bankruptcy, we applied fresh start accounting to our financial statements in accordance with the provision set forth in ASC852 as (i) the holders of existing voting shares of the Company prior to emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the plan of reorganization was less than the post-petition liabilities and allowed claims.
We elected to apply fresh start accounting effective July 2, 2018 (the "Convenience Date"), to coincide with the timing of the normal third quarter reporting period, which resulted in Seadrill becoming a new entity for financial reporting purposes. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and that the use of an accounting Convenience Date of July 1, 2018 was appropriate. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items" during the period from January 1, 2018 through July 1, 2018. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the Consolidated Financial Statements for the period after July 2, 2018 (the “Successor”) will not be comparable with the Consolidated Financial Statements prior to that date.
Reorganization Value
Reorganization value represents the fair value of the Successor Company’s total assets and is intended to approximate to the amount a willing buyer would pay for the assets immediately after restructuring. Under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values.
The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of between $10.2 billion and $11.8 billion. We derived the reorganization value based on the mid-point of this range of estimated distributable values. This was approximately $11.0 billion. Fair values are inherently subject to significant uncertainties and contingencies beyond our control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, and financial projections will be realized, and actual results could vary materially.
Valuation of Drilling Units
Our principal assets comprise our fleet of drilling units. With the assistance of valuation experts, we determined a fair value of these drilling units based primarily on an income approach utilizing a discounted cash flow analysis. We established an estimate of future cash flows for the period ranging from emergence to the end of life for each rig and discounted the estimated future cash flows to present value. The expected cash flows used in the discounted cash flows were derived from earnings forecasts and assumptions regarding growth and margin projections.
A discount rate of 11.4% was estimated based on an after-tax weighted average cost of capital ("WACC") reflecting the rate of return that would be expected by a market participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the overall uncertainty of the financial projects used to estimate future cash flows. We used a replacement cost approach to value capital spares and other property plant, and equipment.
Valuation of Equity Method Investments
The fair value of equity method investments was derived using an income approach, which discounts future free cash flows. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
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 derived from the discounted cash flow model was crosschecked against the market price of Seadrill Partners’ common units. Due to the significant influence we have on Seadrill Partners, there is an implied significant influence premium, which represents the additional value we would place over and above the market price of Seadrill Partners in order to maintain this significant influence. This is similar in thought to an implied control premium. We have evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. We deem the implied control premium to be reasonable in the context of the data considered.
Valuation of debt
We recorded third party and related party debt obligations at a fair value of $7.3 billion which we determined using an income approach. We are amortizing the difference between the $7.6 billion face amount and the fair value recorded in fresh start accounting over the life of the debt. We estimated the fair value of the debt using Level 2 inputs.
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)
As at July 2, 2018

Distributable value
11,056

Less: non-controlling interest
(154
)
Less: fair value of debt
(7,301
)
Less: fair value of other non-operating liabilities
(108
)
Add: fair value of tax attributes
8

Fair value of Successor common stock issued upon emergence
3,501

 
 
Shares issued and outstanding on July 2, 2018
100.0

Per share value
35.01



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)
As at July 2, 2018

Distributable value
11,056

Add: other working capital liabilities
478

Add: other non-current operating liabilities
57

Add: fair value of tax attributes
8

Add: redeemable non-controlling interest
30

Total reorganization value
11,629



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.
 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

ASSETS
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
Cash and cash equivalents
809

 
790

(a)
—

 
1,599

Restricted cash
409

 
169

(a)
—

 
578

Marketable securities
121

 
—

 
—

 
121

Accounts receivable, net
272

 
—

 
—

 
272

Amount due from related parties - current
181

 
—

 
14

(l)
195

Other current assets
247

 
—

 
181

(m)
428

Total current assets
2,039

 
959

 
195

 
3,193

Investment in associated companies
1,615

 
—

 
(687
)
(n)
928

Newbuildings
249

 
—

 
(249
)
(o)
—

Drilling units
12,531

 
—

 
(5,734
)
(p)
6,797

Deferred tax assets
8

 
—

 
—

 
8

Equipment
35

 
—

 
(6
)
(q)
29

Amount due from related parties - non-current
565

 
—

 
11

(r)
576

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

 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

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 shares of common stock at a per share price of $8.42 in connection with the equity commitment, 55 million shares of common stock with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million shares of common stock issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million shares of common stock issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million shares of common stock issued for structuring fees to the select commitment parties and Hemen at an estimated fair value of $35.01 per share.
(k)
As determined in the Plan, NADL and Sevan became wholly owned subsidiaries and the non-controlling interests of NADL and Sevan were eliminated.

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)
 
 
 
 
 
 
 
As at 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 shares of common stock issued in connection with the equity commitment from $8.42 to $35.01 per share.
(bb)
Adjustment to record the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited to fair value.
v3.20.1
Segment information
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment information
Segment information
 
Operating segments
 
We provide drilling and related services to the offshore oil and gas industry. We have three operating segments:

1.
Floaters: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to semi-submersible rigs and drillships for harsh and benign environments in mid-, deep- and ultra-deep waters;

2.
Jack-up rigs: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environments in shallow waters; and

3.
Other: Operations including management services to third parties and related parties. Income and expenses from these management services are classified under this segment.

Segment results are evaluated on the basis of operating income and the information given below is based on information used for internal management reporting.

Total operating revenue
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
686

 
322

 
 
482

 
1,387

Jack-up rigs
362

 
167

 
 
193

 
617

Other
340

 
52

 
 
37

 
84

Total
1,388

 
541

 
 
712

 
2,088


Depreciation
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
346

 
190

 
 
298

 
601

Jack-up rigs
80

 
46

 
 
93

 
197

Total
426

 
236

 
 
391

 
798

Amortization of intangibles
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
106

 
37

 
 
—

 
—

Jack-ups
28

 
21

 
 
—

 
—

Total
134

 
58

 
 
—

 
—



Operating profit/(loss) - net loss
 
Successor


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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
(340
)
 
(161
)
 
 
(446
)
 
(622
)
Jack-up Rigs
23

 
(16
)
 
 
(167
)
 
(112
)
Other
22

 
2

 
 
—

 
6

Operating loss
(295
)
 
(175
)
 
 
(613
)
 
(728
)
Unallocated items:
 

 
 

 
 
 
 
 

Total financial items and other
(966
)
 
(422
)
 
 
(3,242
)
 
(2,308
)
Loss before income taxes
(1,261
)
 
(597
)
 
 
(3,855
)
 
(3,036
)

Drilling assets - Total assets

Total assets by operating segment are as follows:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Floaters
5,297

 
5,508

Jack-up Rigs
1,104

 
1,151

Total Drilling Units and Newbuildings
6,401

 
6,659

 
 
 
 
Unallocated items:
 
 
 
Investments in Associated companies
389

 
800

Marketable securities
11

 
57

Cash and restricted cash
1,357

 
2,003

Other assets
1,121

 
1,329

Total
9,279

 
10,848


Drilling units - Capital expenditures (1) 

Capital expenditure by operating segment are as follows:

 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
139

 
74

 
 
93

 
128

Jack-ups
23

 
24

 
 
24

 
22

Total
162

 
98

 
 
117

 
150

(1) 
The successor periods include additions to equipment

Geographic segment data
 
Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area:

Revenues
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Norway
469

 
117

 
 
82

 
219

Nigeria
198

 
108

 
 
105

 
193

Brazil
137

 
91

 
 
188

 
358

Saudi Arabia
130

 
78

 
 
79

 
159

United States
74

 
34

 
 
30

 
291

Angola
215

 
29

 
 
100

 
482

Others (1)
165

 
84

 
 
128

 
386

Total Revenue
1,388

 
541

 
 
712

 
2,088

(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:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Norway
1,818

 
1,326

Malaysia
805

 
1,070

USA
644

 
658

Spain
615

 
875

Brazil
332

 
688

Others (2)
2,187

 
2,042

Total
6,401

 
6,659


(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 ended December 31, 2019, the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor), we had the following customers with total revenues greater than 10% in any of the years presented:

 
Successor
 
 
Predecessor
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Total
18
%
 
24
%
 
 
19
%
 
23
%
Equinor
16
%
 
7
%
 
 
5
%
 
4
%
Northern Drilling
12
%

—
%
 
 
—
%
 
—
%
ConocoPhillips
11
%
 
13
%
 
 
8
%
 
6
%
Saudi Aramco
10
%
 
14
%
 
 
11
%
 
8
%
Petrobras
7
%
 
10
%
 
 
23
%
 
17
%
LLOG
4
%
 
6
%
 
 
4
%
 
14
%
ExxonMobil
—
%
 
—
%
 
 
10
%
 
7
%
v3.20.1
Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2019
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:
 
 
Successor
 
Successor
(In $ millions)
 
December 31, 2019

 
December 31, 2018

Accounts receivable, net
 
173

 
208

Current contract assets (1)
 
—

 
1

Non-current contract assets (1)
 
—

 
—

Current contract liabilities (deferred revenues) (1)
 
(20
)
 
(12
)
Non-current contract liabilities (deferred revenues) (1)
 
(9
)
 
(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, 2019 (Successor).


Significant changes in the contract assets and the contract liabilities balances during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
(In $ millions)
  
Contract Assets
 
Contract Liabilities
 
Net Contract
Balances
Net contract liability at January 1, 2018 (Predecessor)
  
7

 
(55
)
 
(48
)
Amortization of revenue that was included in the beginning contract liability balance
  
—

 
25

 
25

Cash received, excluding amounts recognized as revenue
 
—

 
(2
)
 
(2
)
Cash received against the beginning contract asset balance
  
(7
)
 
—

 
(7
)
Contract assets recognized during the period
  
9

 
—

 
9

Net contract liability at July 1, 2018 (Predecessor)
  
9

 
(32
)
 
(23
)
Fresh start adjustments
 
—

 
32

 
32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net contract asset at July 2, 2018 (Successor)
  
9

 
—

 
9

Cash received, excluding amounts recognized as revenue
 
—


(21
)

(21
)
Cash received against the beginning contract asset balance
  
(9
)

—


(9
)
Contract assets recognized during the period
  
1

 
—

 
1

Net contract liability at December 31, 2018 (Successor)
  
1

 
(21
)
 
(20
)

Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2019 (Successor) are as follows:
(In $ millions)
  
Contract Assets
 
Contract Liabilities
 
Net Contract
Balances
Net contract liability at January 1, 2019 (Successor)
  
1

 
(21
)
 
(20
)
Amortization of revenue that was included in the beginning contract liability balance
  
—

 
14

 
14

Cash received, excluding amounts recognized as revenue
 
—

 
(22
)
 
(22
)
Cash received against the beginning contract asset balance
  
(1
)
 
—

 
(1
)
Contract assets recognized during the period
  
—

 
—

 
—

Net contract liability at December 31, 2019 (Successor)
  
—

 
(29
)
 
(29
)

Deferred revenue - The deferred revenue balance of $20 million reported in "Other current liabilities" at December 31, 2019 (Successor) is expected to be realized within the next twelve months and $9 million reported in "Other non-current liabilities" is expected to be realized within the following next twelve months. The deferred revenue included above consists primarily of mobilization and upgrade revenue for both wholly and partially unsatisfied performance obligations as well as expected variable mobilization and upgrade revenue for partially unsatisfied performance obligations, which has been estimated for purposes of allocating across the entire corresponding performance obligations. The amounts are derived from the specific terms within drilling contracts that contain such provisions, and the expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract based on information known at December 31, 2019. The actual timing of recognition of such amounts may vary due to factors outside of our control.
v3.20.1
Other revenues
 12 Months Ended
Dec. 31, 2019
Revenues [Abstract]  
Other revenues
Other revenues
Other revenues consist of the following:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Related party management fees
109

 
46

 
 
43

 
110

Other management fees
6

 
—

 
 
—

 
1

Leasing revenues
1

 
—

 
 
—

 
—

Amortization of unfavorable contracts
—

 
—

 
 
21

 
43

Early termination fees
11

 
—

 
 
8

 
8

Total other revenues
127

 
46

 
 
72

 
162


Related party revenues
Related party revenues relate to management support and administrative services provided during the year to Seadrill Partners, SeaMex, Northern Drilling and Sonadrill. Refer to Note 31 - Related party transactions for more information.
Other management fees
Revenue from management services provided to third parties.
Leasing revenues
Revenue earned on the charter of the West Castor 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 Chapter 11 and the application of fresh start accounting, we classified the amortization of these intangible assets or liabilities within other revenues. For the periods after emergence from Chapter 11 and the application of fresh start accounting, we have applied a new accounting policy, which is to classify amortization of these intangible assets and liabilities within operating expenses. The unfavorable contract values in the Predecessor periods arose from our acquisition of Sevan Drilling Limited.
Early termination fees
The termination fee revenue in the year ended December 31, 2019 relates to the fees recognized for the West Jupiter and West Castor, the period from January 1, 2018 through July 1, 2018 relates to the fees recognized for the West Pegasus and the termination revenue in 2017 relates to the West Hercules.
v3.20.1
Other operating items
 12 Months Ended
Dec. 31, 2019
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Impairment of long lived assets (i)
—

 
—

 
 
(414
)
 
(696
)
Loss on disposals (ii)
—

 
—

 
 
—

 
(245
)
Other operating income (iii)
39

 
21

 
 
7

 
27

Total other operating items
39

 
21

 
 
(407
)
 
(914
)

i. Impairment of long lived assets
In the year ended December 31, 2017 (Predecessor), as part of the Chapter 11 reorganization, we terminated the newbuild contracts for the drillships West Draco, West Dorado, West Aquila and West Libra and the shipyards, Samsung and DSME, received an allowed claim. As a result, we recorded a $696 million non-cash impairment charge against the newbuild assets for these rigs. We also recorded a reorganization expense of $1,064 million for the allowed claim.
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.
We derived the fair value of the rigs using an income approach based on updated projections of future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives. The cash flows were estimated over the remaining useful economic lives of the assets and discounted using an estimated market participant weighted average cost of capital of 11.4%. To estimate these fair values, we were required to use various unobservable inputs including assumptions related to the future performance of our rigs as explained above. We based all estimates on information available at the time of performing the impairment test.
ii. Loss on disposals
There were no loss on asset disposals in the years ended December 31, 2019 (Successor) or 2018 (Successor). There was a loss on disposal for the year ended December 31, 2017 (Predecessor) which comprised the following:
(In $ millions)
 
Net proceeds/recoverable amount

 
Book value on
disposal

 
Loss

Sale of West Triton
75

 
109

 
(34
)
Sale of West Mischief
75

 
146

 
(71
)
Sale of West Resolute
75

 
136

 
(61
)
Disposal of Sevan Developer contract
—

 
75

 
(75
)
Sale of West Rigel
126

 
128

 
(2
)
Other
—

 
2

 
(2
)
Total for year ended December 31, 2017 (Predecessor)
351

 
596

 
(245
)

1) Sale of West Triton, West Mischief and West Resolute
On April 29, 2017 we reached an agreement with Shelf Drilling to sell the West Triton, West Mischief and West Resolute for a total consideration of $225 million. The West Triton and West Resolute were delivered in May 2017, whilst the West Mischief was delivered in September 2017. The sale resulted in a loss on disposal of $166 million.
2) Disposal of Sevan Developer contract
In October 2014, Sevan entered an agreement with Cosco to defer the delivery date of the Sevan Developer for twelve months with four subsequent options to extend the date for further periods of six months, until October 2017. On October 30, 2015, April 15, 2016 and October 15, 2016 three of the options were enacted, with $26.3 million, or 5% of the contract price, plus associated costs, refunded to Sevan on each occasion.
On April 27, 2017, the final delivery deferral agreement for the Sevan Developer was deferred to May 31, 2017 to finalize negotiations. As an agreement was not reached, the remaining installment of $26.3 million was refunded to Sevan, taking the delivery installment back to the $526.0 million contract price.
In July 2017, Sevan and Cosco agreed to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a contract termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset and therefore derecognized the newbuild asset, which was held at $620 million, construction obligation held at $526 million, and accrued interest and other liabilities held at $19 million, resulting in a net loss on disposal of $75 million.
3) West Rigel settlement agreement
On April 5, 2018, we entered into a settlement and release agreement, subject to Bankruptcy Court approval, with Jurong in respect of the West Rigel whereby we agreed that the share of sale proceeds from the sale of the West Rigel by Jurong would be $126 million. We recognized a $2 million loss on disposal in the year ended December 31, 2017, reflecting the share of sales proceeds as the value of the asset held for sale.
On May 9, 2018 the West Rigel was sold by Jurong and we received a share of proceeds totaling $126 million.
iii. Other operating income
 
 
Successor
 
 
Predecessor
 (In $ millions)
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31, 2017

Loss of hire insurance settlement (a)
 
10

 
—

 
 
—

 
—

Receipt of overdue receivable (b)
 
26

 
21

 
 
—

 
—

Contingent consideration (c)
 
—

 
—

 
 
7

 
27

Settlement with shipyard
 
3

 
—

 
 
—

 
—

Total other operating income
 
39

 
21

 
 
7

 
27

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 receivable
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 Chapter 11 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.
v3.20.1
Interest expense
 12 Months Ended
Dec. 31, 2019
Interest Expense [Abstract]  
Interest expense
Interest expense

Interest expense consists of the following:
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Cash and payment-in-kind interest on debt facilities
(440
)
 
(237
)
 
 
(37
)
 
(286
)
Unwind of discount debt
(47
)
 
(24
)
 
 
—

 
—

Loan fee amortization
—

 
—

 
 
(1
)
 
(27
)
Capitalized interest
—

 
—

 
 
—

 
28

Interest expense
(487
)
 
(261
)
 
 
(38
)
 
(285
)
1) 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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Senior credit facilities and unsecured bonds
(327
)
 
(162
)
 
 
(116
)
 
(320
)
Less: adequate protection payments
—

 
—

 
 
104

 
81

Senior Secured Notes
(66
)
 
(50
)
 
 
—

 
—

Debt of consolidated variable interest entities
(47
)
 
(25
)
 
 
(25
)
 
(47
)
Cash and payment-in-kind interest
(440
)
 
(237
)
 
 
(37
)
 
(286
)

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 Chapter 11. There has also been an increase in LIBOR rates, which when combined with the additional post-emergence margin, has led to an increased effective interest rate on our senior credit facilities in the year ended 2019.
During the period we were in Chapter 11 (September 12, 2017 to July 1, 2018), we recorded contractual interest payments against debt held as subject to compromise ("adequate protection payments") as a reduction to debt in the Consolidated Balance Sheet and not as an expense to the Consolidated Statement of Operations. We then expensed the adequate protection payments on emergence from Chapter 11.
On emergence from Chapter 11 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.
Our Consolidated Balance Sheet includes approximately $0.6 billion of debt facilities held by subsidiaries of Ship Finance that we consolidate as variable interest entities. Our interest expense includes the interest incurred by these entities on those facilities.
2) Unwind of discount on debt
On emergence from Chapter 11 and application of fresh start accounting, we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount is unwound over the remaining terms of the debt facilities.
3) Loan fee amortization
We amortize loan issuance costs over the expected term of the associated debt facility. We expensed capitalized loan issuance costs for debt subject to compromise when we filed for Chapter 11 on September 12, 2017. No new debt facilities have been entered into since emerging from Chapter 11.
4) Capitalized interest
We capitalize the interest cost incurred to finance Newbuilds. This ceased when we filed for Chapter 11 on September 12, 2017. No Newbuild finance has been entered into since emerging from Chapter 11.
v3.20.1
Impairment loss on investments in associated companies
 12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Impairment loss on investments in associated companies
Impairment loss on investments in associated companies
Each reporting period, we are required to consider (i) whether there have been any indicators of ’other than temporary impairment’ (“OTTI”) of our equity method investments and (ii) whether there has been an impairment of investments held at cost less impairment. We record an impairment charge for other-than-temporary declines in fair value when the fair value is not anticipated to recover above the carrying value within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required.
We have recognized the following impairments on investments in associated companies:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018


 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
—

 
 
—

 
723

Seadrill Partners - Subordinated units
—

 
—

 
 
—

 
82

Seadrill Partners - Seadrill member interest and IDRs
54

 
—

 
 
—

 
—

SeaMex Limited
—

 
—

 
 
—

 
36

Total impairment of investments in associated companies and joint ventures
302

 
—

 
 
—

 
841


 
 
 
 
 
 
 
 
Total impairment of investments
302

 
—

 
 
—

 
841



Impairment loss recognized for the year ended December 31, 2019 (Successor)
1) Seadrill Partners
Seadrill Partners primary debt finance comes from a $2.6 billion Term Loan B (“TLB”) which comes due for repayment in February 2021 and will need to be refinanced. There has been a decrease in the share price of Seadrill Partners common units since November 2018 which culminated in the common units being suspended from trading on the NYSE in August 2019 as the market capitalization decreased below $15 million for a period of 30 consecutive days. We interpreted this decrease in share price as both (i) an indicator of OTTI for the subordinated units and direct interests and (ii) an impairment indicator for the IDRs.
Having identified an indicator of OTTI, we were required to value our investments in Seadrill Partners to calculate the impairment. At the time of the impairment review, we calculated the fair value of our investments in Seadrill Partners direct interests and IDRs to be $134 million and nil, compared to pre-impairment book values of $382 million and $54 million respectively. As a result, we recorded an impairment charge of $302 million. We have recognized the impairment of these investments within “Loss on impairment of investments” in our Consolidated Statement of Operations for the year ended December 31, 2019.
We valued our investments in the direct interests using an income approach which discounted future free cash flows (“DCF model”). The cash flows were estimated over the remaining useful economic lives of the underlying assets, but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of between 11.25-12.25%. The DCF model derived an enterprise value of the OPCOs, after which associated debt was subtracted to provide equity values. Our DCF model considered a range of scenarios to reflect different potential refinancing outcomes for Seadrill Partners. The key assumptions used in the DCF were derived from significant unobservable inputs based on our best judgments and assumptions available at the time of performing the impairment test.
The underlying assumptions used to model future rig cash flows used a methodology that examined historical data for each rig, considering the rig’s age, rated water depth and other attributes and then assessed its future marketability considering the current and projected market environment at the time of assessment. Other assumptions, such as operating, maintenance and inspection costs, were estimated using historical data adjusted for known developments and future events that are anticipated by management at the time of the assessment. These assumptions are necessarily subjective and are an inherent part of our asset impairment evaluation, and the use of different assumptions could produce results that differ from those reported.
We valued our IDR investments using an option pricing model. The assumptions used in the model were derived from both observable and unobservable inputs and are based on management’s judgments and assumptions available at the time of performing the impairment test. The method values different tranches in the capital structure in sequence of seniority. We employ significant judgment in developing these estimates and assumptions.
Impairment loss recognized for the year ended December 31, 2017 (Predecessor)
1) Seadrill Partners
In 2017, there was a sustained decrease in the trading price of Seadrill Partners common units, which we determined to be an indicator of other than temporary impairment against our equity method investments in Seadrill Partners. We therefore performed an impairment test at December 31, 2017. The findings of the review were that (i) the carrying value of the subordinated units exceeded the fair value by $82 million, and the carrying value of the direct ownership interests exceeded the fair value by $723 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations.
The fair value of these investments were derived using a DCF model. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 9.75%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values.
The assumptions used in the DCF model were derived from significant unobservable inputs (representative of level 3 inputs for fair value measurement) and were based on management’s judgments and assumptions available at the time of performing the impairment test. We employed significant judgment in developing these estimates and assumptions.
2) SeaMex Limited - Impairment of investment in Joint Venture
The deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates was considered to be an indicator of impairment. We determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment in SeaMex as at December 31, 2017.
The fair value was derived using a DCF model. The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 10.25%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $36 million. We have recognized this impairment of the investments within "Loss on impairment of investments" in the Consolidated Statement of Operations.
Investment in associated companies  
We have the following investments in associated companies:
 
Successor

 
Successor

Ownership percentage
December 31, 2019

 
December 31, 2018

Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b)
(a)

 
(a)

Seabras Sapura (b)
50.0
%
 
50.0
%
SeaMex Ltd. ("SeaMex") (b)
50.0
%
 
50.0
%
Sonadrill (b)
50.0
%
 
—
%
Gulfdrill (b)
50.0
%
 
—
%

(a) 
Refer to the Seadrill Partners subsidiaries paragraph below for additional information.
(b) 
For transactions with related parties refer to Note 31 - Related party transactions.
Seadrill Partners
Seadrill Partners investments consist of the following:
(a) Subordinated units - Our holdings of subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners. Upon the expiration of the subordination period, the subordinated units will convert into Common Units. Our holding in the subordinated units represents 18% of the limited partner interests in Seadrill Partners.
(b) Direct ownership interests - All of our direct ownership interests in subsidiaries of Seadrill Partners are accounted for under the equity method. We deem these investments to represent significant influence over the investees through their voting rights and by virtue of Seadrill’s representation on the Board of Seadrill Partners. We hold ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2019:
i.
42% in Seadrill Operating LP: Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners.
ii.
49% Seadrill Capricorn Holdings LLC: Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock.
iii.
39% in Seadrill Deepwater Drillship Ltd and 49% indirect interest in Seadrill Mobile Units (Nigeria) Ltd.: Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock.
(c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill member interest and Incentive Distribution Rights (“IDR’s”) on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost less impairment.
We additionally hold an investment in the common units of Seadrill Partners, which are classified as marketable securities on our Consolidated Balance Sheet. Refer to Note 15 - Marketable Securities for further information.
Seabras Sapura
Seabras Sapura is 50% owned by Sapura Energy, and 50% owned by Seadrill. We account for our 50% investment in Seabras Sapura under the equity method.
SeaMex
We own a 50% equity interest in SeaMex. The remaining 50% is owned by Fintech. We account for our 50% investment in the joint venture under the equity method.
Sonadrill
We own a 50% equity interest in Sonadrill. The remaining 50% is owned by Sonangol E.P. We account for our 50% investment in the joint venture under the equity method.
Gulfdrill
We own 50% equity interest in Gulfdrill. The remaining 50% is owned by Gulf Drilling International. Gulfdrill is a joint venture that will manage and operate five premium jack-ups in Qatar with Qatargas.
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
82

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

 
22

Seabras Sapura
29

 
24

 
 
46

 
80

SeaMex
(19
)
 
(12
)
 
 
4

 
—

Sonadrill
(1
)
 
—

 
 
—

 
—

Archer
—

 
—

 
 
—

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

 
174



Summary of Consolidated Statements of Operations for our equity method investees
The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
SDLP
Successor
 
 
Predecessor
(in $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
750

 
426

 
 
612

 
1,128

Net operating income
51

 
100

 
 
257

 
464

Net income
(187
)
 
(127
)
 
 
201

 
235

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

 
93

Amortization of basis differences
(15
)
 
(23
)
 
 
—

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

 
82

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

 
24

Amortization of basis differences
—

 
(5
)
 
 
—

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

 
22

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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
434

 
232

 
 
241

 
487

Net operating income
198

 
124

 
 
125

 
244

Net income
113

 
88

 
 
92

 
160

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

 
44

 
 
46

 
80

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(20
)
 
 
—

 
—

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

 
24

 
 
46

 
80

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


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


Period from July 2, 2018 through December 31, 2018



Period from January 1, 2018 through July 1, 2018


Year ended December 31,
2017

Operating revenues
232

 
118

 
 
121

 
239

Net operating income
70

 
40

 
 
40

 
80

Net income
18

 
4

 
 
7

 
—

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

 
2

 
 
4

 
—

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(14
)
 
 
—

 
—

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

 
—



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,
2019


Period from July 2, 2018 through December 31, 2018



Period from January 1, 2018 through July 1, 2018


Year ended December 31,
2017

Operating revenues
22

 
—

 
 
—

 
—

Net operating income
(1
)
 
—

 
 
—

 
—

Net income
(2
)
 
—

 
 
—

 
—

 
 
 
 
 
 
 
 
 
Seadrill ownership percentage
50
%
 
—
%
 
 
—
%
 
—
%
Share of net income
(1
)
 
—

 
 
—

 
—

 
 
 
 
 
 
 
 
 
Share in results from Sonadrill (net of tax)
(1
)
 
—

 
 
—

 
—


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:
 
Successor
 
Successor
(In $ millions)
December 31, 2019

 
December 31, 2018

Seadrill Partners - Direct ownership interest
122

 
479

Seadrill Partners - Subordinated units
—

 
17

Seadrill Partners - IDRs
—

 
54

Seabras Sapura
98

 
77

Seabras Sapura Holding GmbH - shareholder loans held as equity
123

 
132

SeaMex Ltd
22

 
41

Sonadrill
24


—

Total
389

 
800

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 SDLP companies and our share of recorded equity in those companies was as follows:
SDLP
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
833

 
1,110

Non-current assets
4,847

 
5,076

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

 
2,714

 
 
 
 
Seadrill share of book equity
1,305

 
1,399

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

 
99

SDLP book equity allocated to direct investments
122

 
479

 
 
 
 
SDLP book equity allocated to subordinated units (1)
—

 
17

(1) 
Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. We allocated a further net loss of $17 million for the year ended December 31, 2019. After allocating this loss the remaining balance of the investment in subordinated units was nil.
(2) 
In September 2019, an impairment of $302 million was recognized against the Seadrill Partners direct ownership interests and IDRs in the Consolidated Statements of Operations within "Loss on impairment of investments" (December 31, 2018 (Successor), nil). See Note 11 – Impairment loss on investments in associated companies.
The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows:
Seabras Sapura
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
195

 
255

Non-current assets
1,495

 
1,567

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

 
586

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

 
293

 
 
 
 
Shareholder loans held as equity (1)
123

 
132

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

 
178

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

 
209

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

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

 
December 31, 2018

Current assets
260

 
253

Non-current assets
939

 
977

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

 
454

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

 
227

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

 
171

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

 
41



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

 
December 31, 2018

Current assets
57

 
—

Non-current assets
—

 
—

Current liabilities
(9
)
 
—

Non-current liabilities
—

 
—

Net Assets
48

 
—

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

 
—

 
 
 
 
Book value of Seadrill investment
24

 
—
v3.20.1
Taxation
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Taxation
Taxation
 
Income taxes consist of the following:

 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Current tax (benefit)/expense:
 
 
 
 
 
 
 
 
Bermuda
—

 
—

 
 
—

 
—

Foreign
22

 
30

 
 
34

 
56

Deferred tax (benefit)/expense:
 
 
 
 
 
 
 
 
Bermuda
—

 
—

 
 
—

 
—

Foreign
(61
)
 
(22
)
 
 
(4
)
 
10

Total tax (benefit)/expense
(39
)
 
8

 
 
30

 
66

Effective tax rate
3.1
%
 
(1.3
)%
 
 
(0.8
)%
 
(2.2
)%

 
The effective tax rate for 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) was 3.1%, (1.3)% and (0.8)% respectively. For the year ended December 31, 2017 (Predecessor) the rate was (2.2)%.

We are incorporated in Bermuda, where a tax exemption has been granted until 2035. Other jurisdictions in which we and our subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, we may pay tax within some jurisdictions even though it might have losses in others.

The income taxes for the year ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor) differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Income taxes at statutory rate
—

 
—

 
 
—

 
—

Effect of change on unrecognized tax benefits
(6
)
 
49

 
 
12

 
(5
)
Effect of unremitted earnings of subsidiaries
(17
)
 
(10
)
 
 
—

 
3

Effect of taxable income in various countries
(16
)
 
(31
)
 
 
18

 
68

Total tax (benefit)/expense
(39
)
 
8

 
 
30

 
66




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:
 
Successor

 
Successor

(In $ millions)
December 31,
2019

 
December 31,
2018

Pensions and stock options
2

 
4

Provisions
30

 
28

Net operating losses carried forward
259

 
263

Gross deferred tax assets
291

 
295

Valuation allowance
(255
)
 
(254
)
Deferred tax assets, net of valuation allowance
36

 
41


Deferred tax liabilities:
 
Successor

 
Successor

(In $ millions)
December 31,
2019

 
December 31,
2018

Property, plant and equipment
30

 
49

Unremitted Earnings of Subsidiaries
10

 
27

Intangibles
4

 
34

Gross deferred tax liabilities
44

 
110

Net deferred tax liability
(8
)
 
(69
)

 
As at December 31, 2019 (Successor), deferred tax assets related to net operating loss (“NOL”) carry forwards was $259 million (December 31, 2018 (Successor): $263 million), which can be used to offset future taxable income. NOL carry forwards which were generated in various jurisdictions, include $249 million (December 31, 2018 (Successor): $257 million) that will not expire and $10 million (December 31, 2018 (Successor): $6 million) that will expire between 2021 and 2039 if unutilized.

As at December 31, 2019 (Successor), deferred tax liability related to intangibles from the application of fresh start accounting was $4 million (December 31, 2018 (Successor): $34 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 valuation allowance consists of $259 million on NOL carry forwards as at December 31, 2019 (Successor) (December 31, 2018 (Successor): $242 million).
 
Uncertain tax positions

As at December 31, 2019 (Successor), we had a total amount of unrecognized tax benefits of $89 million excluding interest and penalties of which $65 million was included in other non-current liabilities, and $24 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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Balance at the beginning of the period
132

 
61

 
 
55

 
44

Increases as a result of positions taken in prior periods
8

 
69

 
 
7

 
23

Increases as a result of positions taken during the current period
29

 
18

 
 
1

 
—

Decreases as a result of positions taken in prior periods
(34
)
 
(9
)
 
 
(2
)
 
(9
)
Decreases as a result of positions taken in the current period
—

 
—

 
 
—

 
—

Decreases due to settlements
(46
)
 
(7
)
 
 
—

 
(3
)
Balance at the end of the period
89

 
132

 
 
61

 
55

 
Accrued interest and penalties totaled $18 million and $26 million as of December 31, 2019 (Successor) and December 31, 2018 (Successor) respectively and were included in "Other liabilities" on our Consolidated Balance Sheets. We recognized expenses of $7 million, $11 million and $3 million during 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 ($10 million expense recognized in the year ended December 31, 2017 (Predecessor)), related to interest and penalties for unrecognized tax benefits on the income tax expense line in the accompanying Consolidated Statement of Operations.
As of December 31, 2019 (Successor), $83 million of our unrecognized tax benefits, including penalties and interest, would have a favorable impact to the Company’s effective tax rate if recognized.
The decrease in our unrecognized tax benefits was primarily related to recognizing the U.S. position following a guidance from the U.S. Department of Treasury. The liability for the U.S. unrecognized tax benefit was originally recorded in the fourth quarter of 2018.

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, 2019, the Company posted approximately $83 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 Chapter 11 process with respect to returns for subsidiaries for certain years up to 2016 for an aggregate amount equivalent to $171 million. The relevant group companies are robustly contesting these assessments including filing relevant appeals in Nigeria and it is also intended that one or more formal objections against these claims for distribution purposes will be filed in the 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
2015
Brazil
2008
v3.20.1
Loss per share
 12 Months Ended
Dec. 31, 2019
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Net loss attributable to the parent
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
Less: Allocation to participating securities
—

 
—

 
 
—

 
—

Net loss available to stockholders
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
Effect of dilution
—

 
—

 
 
—

 
—

Diluted net loss available to stockholders
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
The components of the denominator for the calculation of basic and diluted LPS are as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Basic loss per share:
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
100

 
100

 
 
504

 
505

Diluted loss per share:
 

 
 

 
 
 
 
 

Effect of dilution
—

 
—

 
 
—

 
—

Weighted average number of common shares outstanding adjusted for the effects of dilution
100

 
100

 
 
504

 
505


The basic and diluted loss per share are as follows:
 
Successor
 
 
Predecessor
(In $)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Basic loss per share
(12.18
)
 
(6.02
)
 
 
(7.71
)
 
(5.89
)
Diluted loss per share
(12.18
)
 
(6.02
)
 
 
(7.71
)
 
(5.89
)
v3.20.1
Restricted cash
 12 Months Ended
Dec. 31, 2019
Restricted Cash and Investments [Abstract]  
Restricted cash
Note 14 – Restricted cash
 
Restricted cash consists of the following:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Accounts pledged as collateral for Senior Secured Notes (1)
24

 
328

Accounts pledged as collateral for performance bonds and similar guarantees
104

 
101

Demand deposit pledged as collateral for tax related guarantee (2)
83

 
—

Other
31

 
32

Total restricted cash
242

 
461



(1) 
The balance as at December 31, 2018 was used to repurchase Senior Secured Notes on April 10, 2019 (see Note 22 - Debt for further details). In 2019, Seabras Sapura repaid $24 million of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of Senior Secured Notes. This is held as non-current within the Consolidated Balance Sheet.
(2) 
We placed a total of 330 million Brazilian Reais of collateral with BTG Bank under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet.

Restricted cash is presented in our Consolidated Balance Sheets as follows:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Current restricted cash
135

 
461

Non-current restricted cash
107

 
—

Total restricted cash
242

 
461
v3.20.1
Marketable securities
 12 Months Ended
Dec. 31, 2019
Marketable Securities [Abstract]  
Marketable securities
Marketable securities
Effective January 1, 2018, we adopted ASU 2016-01, which applies to equity investments that are neither (i) accounted for under the equity method or (ii) result in consolidation. Under ASU 2016-01 we record such investments at fair value and recognize any changes directly in net income, unless there is no readily ascertainable fair value, in which case we record the investment at cost less impairment. We hold investments in certain marketable securities which we account for at fair value through profit and loss per this guidance. We use quoted market prices to determine the fair value of our marketable securities and categorize them as level 1 on the fair value hierarchy.
For fiscal periods beginning prior to January 1, 2018, marketable securities not accounted for under the equity method were classified as available-for-sale. Unrealized gains and losses on equity securities classified as available-for-sale were recognized in other comprehensive income. When we adopted ASU 2016-01 for the first time at January 1, 2018, we reclassified $31 million of previously recognized fair value gains from accumulated other comprehensive income to retained earnings on January 1, 2018.
The below table shows the carrying value of our investments in marketable securities for periods presented in this report.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Seadrill Partners - Common units
 
2

 
45

Archer
 
9

 
12

Total marketable securities
 
11

 
57


The below table shows the gain and losses recognized through net income for the periods presented in this report since the adoption of ASU 2016-01.
 
 
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

Seadrill Partners - Common Units - unrealized loss on marketable securities
 
(43
)
 
(45
)
 
 
(5
)
Archer - unrealized (loss)/gain on marketable securities
 
(3
)
 
(19
)
 
 
2

Total unrealized loss on marketable securities
 
(46
)
 
(64
)
 
 
(3
)
The below table shows the gain and losses recognized through other comprehensive income for the periods presented in this report before the adoption of ASU 2016-01.
 
 
Predecessor

(In $ millions)
 
Year ended December 31, 2017

Seadrill Partners - Common Units - unrealized loss on marketable securities
 
(14
)
Archer - unrealized gain on marketable securities
 
28

Total unrealized gain on marketable securities
 
14


Until April 2017, we accounted for our investment in Archer under the equity method. However, as part of a financial restructuring, Archer completed two share issuances in March and April 2017, which diluted our ownership interest to 15.7%. Also, as part of this restructuring, we agreed with Archer to convert total outstanding subordinated loans, fees and interest provided to Archer, with a carrying value of $37 million, into a $45 million loan. The fair value of the new loan receivable at the date of conversion was $56 million resulting in a gain of $19 million on debt extinguishment, which is presented within “Gain on debt extinguishment” in our Predecessor Consolidated Statement of Operations.
As a result of these activities, we concluded that we no longer had significant influence over Archer's financial and operating decisions, primarily as a result of the reduction in our shareholding and the significant reduction in our interests in related debt and guarantees. We reclassified our equity method investment in Archer, which had a carrying value of nil, to an investment in marketable security, also with a carrying value of nil. We then revalued the investment in marketable security to fair value based on Archer's share price. We recognized the gain through other comprehensive income.
For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date. However, there were no impairments recorded against our investments in marketable securities during any of the periods presented.
v3.20.1
Accounts receivable
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Accounts receivable
Accounts receivable
Accounts receivables are held at their nominal amount less an allowance for doubtful accounts. Doubtful accounts are recognized when it is unlikely that required payments of specific amounts will occur as a result of the financial condition of the customer. As at December 31, 2019 (Successor) we had no allowances for doubtful accounts netted against our accounts receivable (December 31, 2018 (Successor): nil).
The below table sets out the bad debt expense incurred for the periods presented in this report.
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Bad debt expense
—

 
—

 
 
48

 
—

Total bad debt expense
—

 
—

 
 
48

 
—


In November 2018 and January 2019, we recovered a total of $47 million from a $48 million overdue receivable that was fully provided against in the Predecessor company. This was recognized as other operating income in our 2018 and 2019 Successor periods.
v3.20.1
Other assets
 12 Months Ended
Dec. 31, 2019
Other Assets [Abstract]  
Other assets
Other assets
As at December 31, 2019 and 2018 (Successor), other assets included the following: 
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019


As at December 31,
2018

Favorable drilling and management services contracts
33

 
186

Taxes receivable
38

 
50

Prepaid expenses
33

 
32

Right of use asset
35

 
—

Reimbursable amounts due from customers (1)
21

 
10

Deferred contract costs
12

 
15

Derivative asset - interest rate cap (2)
3

 
39

Insurance receivable (3)
14

 
1

Other
28

 
25

Total other assets
217

 
358

(1) Includes related party balances of $5 million from Northern Drilling. For further information refer to Note 31 - Related party transactions.
(2) Refer to Note 32 - Financial instruments and risk management.
(3) In January 2019, there was a loss incident on the Sevan Louisiana related to a malfunction of its subsea equipment. As of December 31, 2019, we have incurred $19 million of costs to repair the equipment, of which $4 million has been recovered and an additional $14 million will be recoverable under our physical damage insurance.

Other assets are presented in our Consolidated Balance Sheets as follows:
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Other current assets
158

 
322

Other non-current assets
59

 
36

Total other assets
217

 
358



Favorable drilling contracts and management services contracts
On emergence from Chapter 11, we recognized favorable drilling and management service contracts at fair value, which will be amortized over their remaining contract period. The amounts recognized represent the net present value of the existing contracts at the time of emergence compared to the current market rates at that time, discounted at the weighted average cost of capital.
The gross carrying amounts and accumulated amortization included in 'Other current assets' and 'Other non-current assets' for favorable contracts in the Consolidated Balance Sheet are as follows:
 
 
As at December 31, 2019
 
As at December 31, 2018
(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

(101
)
186

 
287

—

287

Amortization of favorable contracts
 
—

(153
)
(153
)
 
—

(101
)
(101
)
Balance at end of period
 
287

(254
)
33

 
287

(101
)
186


The amortization is recognized in the Consolidated Statements of Operations under "Amortization of intangibles". The weighted average remaining amortization period for the favorable contracts is 20 years, 6 months.
The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods:
 
 
Period ended December 31,
(In $ millions)
 
2020

2021

2022

2023

2024 and after

Total

Amortization of favorable contracts
 
2

2

2

2

25

33
v3.20.1
Investment in associated companies
 12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Investment in associated companies
Impairment loss on investments in associated companies
Each reporting period, we are required to consider (i) whether there have been any indicators of ’other than temporary impairment’ (“OTTI”) of our equity method investments and (ii) whether there has been an impairment of investments held at cost less impairment. We record an impairment charge for other-than-temporary declines in fair value when the fair value is not anticipated to recover above the carrying value within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required.
We have recognized the following impairments on investments in associated companies:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018


 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
—

 
 
—

 
723

Seadrill Partners - Subordinated units
—

 
—

 
 
—

 
82

Seadrill Partners - Seadrill member interest and IDRs
54

 
—

 
 
—

 
—

SeaMex Limited
—

 
—

 
 
—

 
36

Total impairment of investments in associated companies and joint ventures
302

 
—

 
 
—

 
841


 
 
 
 
 
 
 
 
Total impairment of investments
302

 
—

 
 
—

 
841



Impairment loss recognized for the year ended December 31, 2019 (Successor)
1) Seadrill Partners
Seadrill Partners primary debt finance comes from a $2.6 billion Term Loan B (“TLB”) which comes due for repayment in February 2021 and will need to be refinanced. There has been a decrease in the share price of Seadrill Partners common units since November 2018 which culminated in the common units being suspended from trading on the NYSE in August 2019 as the market capitalization decreased below $15 million for a period of 30 consecutive days. We interpreted this decrease in share price as both (i) an indicator of OTTI for the subordinated units and direct interests and (ii) an impairment indicator for the IDRs.
Having identified an indicator of OTTI, we were required to value our investments in Seadrill Partners to calculate the impairment. At the time of the impairment review, we calculated the fair value of our investments in Seadrill Partners direct interests and IDRs to be $134 million and nil, compared to pre-impairment book values of $382 million and $54 million respectively. As a result, we recorded an impairment charge of $302 million. We have recognized the impairment of these investments within “Loss on impairment of investments” in our Consolidated Statement of Operations for the year ended December 31, 2019.
We valued our investments in the direct interests using an income approach which discounted future free cash flows (“DCF model”). The cash flows were estimated over the remaining useful economic lives of the underlying assets, but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of between 11.25-12.25%. The DCF model derived an enterprise value of the OPCOs, after which associated debt was subtracted to provide equity values. Our DCF model considered a range of scenarios to reflect different potential refinancing outcomes for Seadrill Partners. The key assumptions used in the DCF were derived from significant unobservable inputs based on our best judgments and assumptions available at the time of performing the impairment test.
The underlying assumptions used to model future rig cash flows used a methodology that examined historical data for each rig, considering the rig’s age, rated water depth and other attributes and then assessed its future marketability considering the current and projected market environment at the time of assessment. Other assumptions, such as operating, maintenance and inspection costs, were estimated using historical data adjusted for known developments and future events that are anticipated by management at the time of the assessment. These assumptions are necessarily subjective and are an inherent part of our asset impairment evaluation, and the use of different assumptions could produce results that differ from those reported.
We valued our IDR investments using an option pricing model. The assumptions used in the model were derived from both observable and unobservable inputs and are based on management’s judgments and assumptions available at the time of performing the impairment test. The method values different tranches in the capital structure in sequence of seniority. We employ significant judgment in developing these estimates and assumptions.
Impairment loss recognized for the year ended December 31, 2017 (Predecessor)
1) Seadrill Partners
In 2017, there was a sustained decrease in the trading price of Seadrill Partners common units, which we determined to be an indicator of other than temporary impairment against our equity method investments in Seadrill Partners. We therefore performed an impairment test at December 31, 2017. The findings of the review were that (i) the carrying value of the subordinated units exceeded the fair value by $82 million, and the carrying value of the direct ownership interests exceeded the fair value by $723 million. We recognized this impairment of the investments within “Loss on impairment of investments” in the Consolidated Statement of Operations.
The fair value of these investments were derived using a DCF model. The estimated future free cash flows associated with the investments were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures, applicable tax rates and industry conditions. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 9.75%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values.
The assumptions used in the DCF model were derived from significant unobservable inputs (representative of level 3 inputs for fair value measurement) and were based on management’s judgments and assumptions available at the time of performing the impairment test. We employed significant judgment in developing these estimates and assumptions.
2) SeaMex Limited - Impairment of investment in Joint Venture
The deteriorating market conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector in which SeaMex operates was considered to be an indicator of impairment. We determined the length and severity of the deterioration of market conditions to be representative of an other than temporary impairment. As such we measured and recognized an other than temporary impairment of the investment in SeaMex as at December 31, 2017.
The fair value was derived using a DCF model. The estimated future free cash flows associated with the investment were primarily based on expectations around applicable day rates, drilling unit utilization, operating costs, capital and long-term maintenance expenditures and applicable tax rates. The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total and discounted using an estimated market participant weighted average cost of capital of 10.25%. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The carrying value of the investment was found to exceed the fair value by $36 million. We have recognized this impairment of the investments within "Loss on impairment of investments" in the Consolidated Statement of Operations.
Investment in associated companies  
We have the following investments in associated companies:
 
Successor

 
Successor

Ownership percentage
December 31, 2019

 
December 31, 2018

Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b)
(a)

 
(a)

Seabras Sapura (b)
50.0
%
 
50.0
%
SeaMex Ltd. ("SeaMex") (b)
50.0
%
 
50.0
%
Sonadrill (b)
50.0
%
 
—
%
Gulfdrill (b)
50.0
%
 
—
%

(a) 
Refer to the Seadrill Partners subsidiaries paragraph below for additional information.
(b) 
For transactions with related parties refer to Note 31 - Related party transactions.
Seadrill Partners
Seadrill Partners investments consist of the following:
(a) Subordinated units - Our holdings of subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners. Upon the expiration of the subordination period, the subordinated units will convert into Common Units. Our holding in the subordinated units represents 18% of the limited partner interests in Seadrill Partners.
(b) Direct ownership interests - All of our direct ownership interests in subsidiaries of Seadrill Partners are accounted for under the equity method. We deem these investments to represent significant influence over the investees through their voting rights and by virtue of Seadrill’s representation on the Board of Seadrill Partners. We hold ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2019:
i.
42% in Seadrill Operating LP: Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners.
ii.
49% Seadrill Capricorn Holdings LLC: Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock.
iii.
39% in Seadrill Deepwater Drillship Ltd and 49% indirect interest in Seadrill Mobile Units (Nigeria) Ltd.: Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock.
(c) Member interests and IDR's - Seadrill applies the cost method to account for its investment in Seadrill member interest and Incentive Distribution Rights (“IDR’s”) on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost less impairment.
We additionally hold an investment in the common units of Seadrill Partners, which are classified as marketable securities on our Consolidated Balance Sheet. Refer to Note 15 - Marketable Securities for further information.
Seabras Sapura
Seabras Sapura is 50% owned by Sapura Energy, and 50% owned by Seadrill. We account for our 50% investment in Seabras Sapura under the equity method.
SeaMex
We own a 50% equity interest in SeaMex. The remaining 50% is owned by Fintech. We account for our 50% investment in the joint venture under the equity method.
Sonadrill
We own a 50% equity interest in Sonadrill. The remaining 50% is owned by Sonangol E.P. We account for our 50% investment in the joint venture under the equity method.
Gulfdrill
We own 50% equity interest in Gulfdrill. The remaining 50% is owned by Gulf Drilling International. Gulfdrill is a joint venture that will manage and operate five premium jack-ups in Qatar with Qatargas.
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
82

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

 
22

Seabras Sapura
29

 
24

 
 
46

 
80

SeaMex
(19
)
 
(12
)
 
 
4

 
—

Sonadrill
(1
)
 
—

 
 
—

 
—

Archer
—

 
—

 
 
—

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

 
174



Summary of Consolidated Statements of Operations for our equity method investees
The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
SDLP
Successor
 
 
Predecessor
(in $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
750

 
426

 
 
612

 
1,128

Net operating income
51

 
100

 
 
257

 
464

Net income
(187
)
 
(127
)
 
 
201

 
235

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

 
93

Amortization of basis differences
(15
)
 
(23
)
 
 
—

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

 
82

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

 
24

Amortization of basis differences
—

 
(5
)
 
 
—

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

 
22

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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
434

 
232

 
 
241

 
487

Net operating income
198

 
124

 
 
125

 
244

Net income
113

 
88

 
 
92

 
160

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

 
44

 
 
46

 
80

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(20
)
 
 
—

 
—

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

 
24

 
 
46

 
80

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


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


Period from July 2, 2018 through December 31, 2018



Period from January 1, 2018 through July 1, 2018


Year ended December 31,
2017

Operating revenues
232

 
118

 
 
121

 
239

Net operating income
70

 
40

 
 
40

 
80

Net income
18

 
4

 
 
7

 
—

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

 
2

 
 
4

 
—

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(14
)
 
 
—

 
—

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

 
—



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,
2019


Period from July 2, 2018 through December 31, 2018



Period from January 1, 2018 through July 1, 2018


Year ended December 31,
2017

Operating revenues
22

 
—

 
 
—

 
—

Net operating income
(1
)
 
—

 
 
—

 
—

Net income
(2
)
 
—

 
 
—

 
—

 
 
 
 
 
 
 
 
 
Seadrill ownership percentage
50
%
 
—
%
 
 
—
%
 
—
%
Share of net income
(1
)
 
—

 
 
—

 
—

 
 
 
 
 
 
 
 
 
Share in results from Sonadrill (net of tax)
(1
)
 
—

 
 
—

 
—


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:
 
Successor
 
Successor
(In $ millions)
December 31, 2019

 
December 31, 2018

Seadrill Partners - Direct ownership interest
122

 
479

Seadrill Partners - Subordinated units
—

 
17

Seadrill Partners - IDRs
—

 
54

Seabras Sapura
98

 
77

Seabras Sapura Holding GmbH - shareholder loans held as equity
123

 
132

SeaMex Ltd
22

 
41

Sonadrill
24


—

Total
389

 
800

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 SDLP companies and our share of recorded equity in those companies was as follows:
SDLP
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
833

 
1,110

Non-current assets
4,847

 
5,076

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

 
2,714

 
 
 
 
Seadrill share of book equity
1,305

 
1,399

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

 
99

SDLP book equity allocated to direct investments
122

 
479

 
 
 
 
SDLP book equity allocated to subordinated units (1)
—

 
17

(1) 
Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. We allocated a further net loss of $17 million for the year ended December 31, 2019. After allocating this loss the remaining balance of the investment in subordinated units was nil.
(2) 
In September 2019, an impairment of $302 million was recognized against the Seadrill Partners direct ownership interests and IDRs in the Consolidated Statements of Operations within "Loss on impairment of investments" (December 31, 2018 (Successor), nil). See Note 11 – Impairment loss on investments in associated companies.
The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows:
Seabras Sapura
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
195

 
255

Non-current assets
1,495

 
1,567

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

 
586

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

 
293

 
 
 
 
Shareholder loans held as equity (1)
123

 
132

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

 
178

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

 
209

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

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

 
December 31, 2018

Current assets
260

 
253

Non-current assets
939

 
977

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

 
454

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

 
227

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

 
171

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

 
41



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

 
December 31, 2018

Current assets
57

 
—

Non-current assets
—

 
—

Current liabilities
(9
)
 
—

Non-current liabilities
—

 
—

Net Assets
48

 
—

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

 
—

 
 
 
 
Book value of Seadrill investment
24

 
—
v3.20.1
Newbuildings
 12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Newbuildings
Newbuildings
Changes in drilling units for the periods presented in this report were as follows:
(In $ millions)



Opening balance as at January 1, 2018 (Predecessor)

248

Additions

1

Closing balance as at July 1, 2018 (Predecessor)

249

Fresh Start adjustments

(249
)
 
 
 
 
 
 
Balance as at July 2, 2018, December 31, 2018 and December 31, 2019 (Successor)
 
—



On emergence from Chapter 11, the carrying values of our newbuilds were adjusted to fair value. The loss was recognized in the Consolidated Statement of Operations under the heading "Reorganization items".
v3.20.1
Drilling units
 12 Months Ended
Dec. 31, 2019
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

Opening balance as at January 1, 2018 (Predecessor)
 
 
17,335

 
(4,119
)
 
13,216

Additions
 
 
117

 
—

 
117

Depreciation
 
 
—

 
(388
)
 
(388
)
Impairment
 
 
(414
)
 
—

 
(414
)
Closing balance as at July 1, 2018 (Predecessor)
 
 
17,038

 
(4,507
)
 
12,531

Fresh Start adjustments
 
 
(10,241
)
 
4,507

 
(5,734
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance as at July 2, 2018 (Successor)
 
 
6,797

 
—

 
6,797

Additions
 
 
93

 
—

 
93

Depreciation
 
 
—

 
(231
)
 
(231
)
Closing balance as at December 31, 2018 (Successor)
 
 
6,890

 
(231
)
 
6,659

Additions
 
 
158

 
—

 
158

Depreciation
 
 
—

 
(416
)
 
(416
)
Closing balance as at December 31, 2019 (Successor)
 
 
7,048

 
(647
)
 
6,401


We recognized an impairment expense of $414 million which was classified within "Loss on impairment of long-lived assets" on our Consolidated Statement of Operations for the period from January 1, 2018 through July 1, 2018 (Predecessor). Please refer to Note 9- Other operating items for further information.
On emergence from Chapter 11, the carrying values of our drilling units were adjusted to fair value and the accumulated depreciation of each asset was reset to nil. The loss of $5,734 million was recognized in the Consolidated Statement of Operations under the heading "Reorganization items".
As at December 31, 2019, as part of the joint venture with Gulfdrill, we have leased the West Castor to Gulfdrill. The net book value of the West Castor was $53 million split between $72 million cost offset by $19 million accumulated depreciation. Refer to Note 24 - Leases for further information.
v3.20.1
Equipment
 12 Months Ended
Dec. 31, 2019
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

Opening balance as at January 1, 2018 (Predecessor)
 
 
84

 
(55
)
 
29

Additions
 
 
9

 
—

 
9

Depreciation
 
 
—

 
(3
)
 
(3
)
Closing balance as at July 1, 2018 (Predecessor)
 
 
93

 
(58
)
 
35

Fresh Start adjustments
 
 
(64
)
 
58

 
(6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance as at July 2, 2018 (Successor)
 
 
29

 
—

 
29

Additions
 
 
5

 
—

 
5

Depreciation
 
 
—

 
(5
)
 
(5
)
Closing balance as at December 31, 2018 (Successor)
 
 
34

 
(5
)
 
29

Additions
 
 
4

 
—

 
4

Depreciation
 
 
—

 
(10
)
 
(10
)
Closing balance as at December 31, 2019 (Successor)
 
 
38

 
(15
)
 
23


On emergence from Chapter 11, the carrying value of our equipment was adjusted to fair value and the accumulated depreciation of each asset was reset to nil. The loss of $6 million was recognized in the Consolidated Statement of Operations under the heading "Reorganization items".
v3.20.1
Debt
 12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Debt
Debt
As at December 31, 2019 (Successor) and 2018 (Successor), we had the following liabilities for third party debt agreements:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Secured credit facilities
 
5,662

 
5,662

Senior Secured Notes
 
476

 
769

Credit facilities contained within variable interest entities
 
621

 
655

Total debt principal
 
6,759

 
7,086

Less: debt discount and fees
 
(136
)
 
(172
)
Carrying value
 
6,623

 
6,914


This was presented in our Consolidated Balance Sheet as follows.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Debt due within one year
 
343

 
33

Long-term debt
 
6,280

 
6,881

Total debt principal
 
6,623


6,914


In the next sections we cover key terms of our debt facilities at December 31, 2019:
Secured Credit Facilities
We have summarized the key terms of our secured credit facilities as at December 31, 2019 in the table below:
  Facility name
Maturity
Repayments before maturity ($m)

Final Repayment (3)
($m)

Total ($m)

Margin on LIBOR floating interest (2)
Collateral vessels
Book value of collateral vessels ($m)

Notes
$400 million facility
4Q 2022
47

88

135

3.50%
West Cressida West Callisto West Leda
150

 
$2,000 million facility
1Q 2023
248

660

908

3.00%
West Alpha West Venture West Phoenix West Navigator West Epsilon West Elara
732

 
$440 million facility
3Q 2023
23

41

64

4.25%
West Telesto
58

 
$1,450 million facility
4Q 2023
88

235

323

3.35%-4.00%
West Tellus
332

(2) 
$360 million facility
4Q 2023
73

137

210

3.75%
AOD I AOD II AOD III
191

(1) 
$300 million facility
1Q 2024
48

96

144

4.00%
West Tucana West Castor
107

 
$1,750 million facility
1Q 2024
299

576

875

3.50%-3.90%
Sevan Driller Sevan Brasil Sevan Louisiana
865

(2) 
$450 million facility
2Q 2024
54

211

265

3.50%
West Eminence
275

 
$1,500 million facility
4Q 2024
355

770

1,125

2.70%-4.78%
West Saturn West Neptune West Jupiter
1,020

(2) 
$1,350 million facility
4Q 2024
351

594

945

3.00%
West Pegasus West Gemini West Orion
895

 
$950 million facility
4Q 2024
198

368

566

3.00%-4.42%
West Eclipse West Carina
648

(2) 
$450 million facility (2015)
4Q 2024
63

39

102

3.85%
West Freedom West Vigilant West Prospero West Ariel
176

 
Total secured credit facilities
5,662

 
 
 
 
(1) 
The facility is held by AOD, by which we hold a 67% ownership.
(2) 
Certain debt facilities are split into different tranches set at different margins. Under the ACE facility the margin is 5.5%.
(3) 
The final repayment shown in the above table includes balloon amount due on maturity and one quarters worth of amortization payments deferred in the fourth quarter of 2019 under the ACE facility amounting to $63 million. We have the ability to defer a further $437 million of amortization payments that would otherwise fall due between June 2020 and March 2021 through future use of the ACE facility.

Senior Secured Notes
On July 2, 2018, we raised $880 million of aggregate principle amount of 12.00% Senior Secured Notes due in 2025. The notes bear interest at the annual rate of 4.00% payable in cash plus 8.00% payment-in-kind. The principal borrowed on the notes included the initial $880 million principal value of the notes plus $10 million of payment-in-kind interest that was compounded into the principal on emergence from Chapter 11.
Per the terms of the 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.
After the two redemptions, there was a remaining $476 million principal outstanding on the notes.
The Senior Secured Notes are secured by, among other things, our investments in Seadrill Partners, SeaMex and Seabras Sapura. Refer to Note 18 - Investment in associated companies for further information.

Credit facilities contained within variable interest entities
We consolidate three legal subsidiaries of Ship Finance that own the West Taurus, West Hercules and West Linus. Please refer to Note 35 for further details of this arrangement. These facilities were also amended during the period to conform with the charter payment schedules which were amended as part of the RSA linked to our reorganization.
The terms of these facilities are set out in the below table:
Facility Name
Maturity
Repayments before maturity ($m)

Final Repayment ($m)

Total ($m)

Margin on LIBOR floating interest
Collateral vessels
Book value of collateral vessels ($m)

$390 million facility
4Q 2022
43

144

187

Margin not disclosed
West Taurus
271

$375 million facility
2Q 2023
53

149

202

Margin not disclosed
West Hercules
322

$475 million facility
2Q 2023
52

180

232

Margin not disclosed
West Linus
191

Total credit facilities within VIEs
621

 
 
 


Debt maturities
The outstanding debt as at December 31, 2019 is repayable as follows:
(In $ millions)
 
December 31, 2019

2020
 
343

2021
 
569

2022
 
984

2023
 
1,774

2024
 
2,613

2025 and thereafter
 
476

Total debt principal
 
6,759


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 31 December 2018; and $400 million at any time during the period from and including 1 January 2019 to the final maturity date of the credit facilities. 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.
The above covenants are subject to important exceptions and qualifications.

Since the fourth quarter of 2019, we have been engaged in discussions with our secured lenders regarding potential amendments to our credit facilities to provide operational flexibility and additional near-term liquidity by, among other things, converting certain interest payments under our credit facilities to payment-in-kind (“PIK”) interest and deferring certain scheduled amortization payments (or increasing the aggregate amount of such payments that may be converted to loans payable at the final scheduled maturity date of the relevant facility pursuant to the amortization conversion election provisions contained in the facility agreements). Our debt service is anticipated to be primarily comprised of interest through at least Q1 2021 because our facility agreements contain certain provisions that allow us to elect to defer and convert up to $500 million in the aggregate of scheduled amortization payments under certain of our credit facilities. We have already elected to use a portion of this capacity with respect to the first scheduled amortization installments under our credit facilities occurring in Q1 2020. We intend to continue exercising this option for each subsequent scheduled amortization payment date until such capacity is fully utilized; however, we cannot guarantee that we will be able to satisfy the conditions set forth in the facility agreements in order to be able to do so. We have also requested that our lenders consent to an extension of the periods before which we are required to comply with the net leverage and debt service coverage financial covenants in our facility agreements because we currently anticipate that we will not be able to meet these requirements when such covenants begin to be tested at the end of Q1 2021. If we are unable to comply with the net leverage and debt service coverage covenants in our debt agreements between Q1 2021 and Q4 2021, this will lead to an interest margin increase of up to 100 bps in the form of PIK interest; however, this does not constitute an event of default. Thereafter, if we are unable to comply with any of these restrictions and covenants, and we are unable to obtain a waiver or amendment from our lenders for such non-compliance, a default could occur under the terms of those debt agreements. We have also forecasted that we will not be able to meet the requirements under our ongoing liquidity financial covenant contained in the facility agreements during certain periods occurring after the twelve-month period following the date of this report. If our amendment requests for certain liquidity enhancing measures are not successful, including with respect to the conversion of certain interest payments to PIK and the deferral of certain scheduled amortization payments then there is an increased risk that we will breach these liquidly requirements sooner than currently anticipated after such twelve-month period following the date of this report. Failure to comply with such liquidity requirements could result in a default under the terms of our facility agreements if we are unable to obtain a waiver or amendment from our lenders for such non-compliance.
Although lender discussions are well advanced and significant progress has been made, until such time as an agreement is reached, uncertainty remains and therefore we are also preparing certain contingency plans. The Company's business operations remain unaffected by these amendment negotiations and related contingency planning efforts, and the Company expects to meet its ongoing customer and business counterparty obligations as they become due.
v3.20.1
Other liabilities
 12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Other liabilities
Other liabilities
As at December 31, 2019 and 2018 (Successor), other liabilities included the following:  
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Taxes payable
33

 
42

Contract liabilities
29

 
21

Unfavorable drilling contracts
8

 
27

Employee withheld taxes, social security and vacation payments
51

 
40

Accrued interest expense
40

 
61

Accrued expenses
137

 
107

Lease liabilities
36

 
—

Uncertain tax provisions
83

 
100

Other liabilities
33

 
33

Total Other Liabilities
450

 
431

Other liabilities are presented in our Consolidated Balance Sheet as follows:
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Other current liabilities
322

 
310

Other non-current liabilities
128

 
121

Total Other Liabilities
450

 
431


Unfavorable contracts
On emergence from Chapter 11 and application of fresh start accounting, we recognized intangible assets and liabilities for favorable and unfavorable drilling contracts at fair value. The amounts recognized represent the net present value of the existing contracts at the time of emergence compared to the current market rates at the time of acquisition, discounted at the weighted average cost of capital. We amortize these assets and liabilities over the remaining contract period and classify the amortization under operating expenses. For periods before emergence from Chapter 11 and application of fresh start accounting we recognized intangible assets or liabilities only where we acquired a drilling contract in a business combination. The accounting policy we applied in the Predecessor was to classify amortization expense for such contracts within other revenues.
The gross carrying amounts and accumulated amortization included in 'Other current liabilities' and 'Other non-current liabilities' for unfavorable contracts in the Consolidated Balance Sheets as follows:
 
 
December 31, 2019
 
December 31, 2018
(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
)
39

(27
)
 
(66
)
—

(66
)
Amortization of unfavorable contracts
 
—

19

19

 
—

39

39

Balance at end of period
 
(66
)
58

(8
)
 
(66
)
39

(27
)

The amortization is recognized in the Consolidated Statement of Operations under "Amortization of intangibles". For periods before emergence from Chapter 11 and application of fresh start accounting we recognized intangible liabilities only where we acquired a drilling contract in a business combination. We classified amortization expense for such contracts within other revenues in the Predecessor. The weighted average remaining amortization period for the unfavorable contracts is 7 years, 9 months.

The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods:
 
 
Period ended December 31,
(In $ millions)
 
2020

2021

2022

2023

2024 and after

Total

Amortization of unfavorable contracts
 
(1
)
(1
)
(1
)
(1
)
(4
)
(8
)
v3.20.1
Leases
 12 Months Ended
Dec. 31, 2019
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.
On August 15, 2019 and September 3, 2019, in connection with the Gulfdrill joint venture, Seadrill entered charter agreements to lease three jack-up rigs from a third-party shipyard. These arrangements are to be novated to Gulfdrill prior to the commencement of its operations. On November 27, 2019, we received delivery of the jack-up rig Lovanda (formerly Zhenhai 5) under a charter agreement and a lease liability and offsetting right of use asset were recognized accordingly.
Below are the significant assumptions and judgments we applied to account for our leases in accordance with Topic 842.
1.
We apply judgment in determination whether a contract contains a lease or a lease component as defined by Topic 842.
2.
We have elected to combine leases and non-lease components. As a result, we do not allocate our consideration between leases and non-lease components.
3.
The discount rate applied to our operating leases is our incremental borrowing rate. We estimated our incremental borrowing rate based on the rate for our traded debt.
4.
Within the terms and conditions of some of our operating leases we have options to extend or terminate the lease. In instances where we are reasonably certain to exercise available options to extend or terminate, then the option was included in determining the appropriate lease term to apply. Options to renew our lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that we will exercise that option.
For operating leases where we are the lessee, our future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

2020
 
17

2021
 
16

2022
 
9

2023
 
2

2024 and thereafter
 
1

Total
 
45

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, 2019:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

Total undiscounted cash flows
 
45

Less short term leases
 
(1
)
Less discount
 
(8
)
Operating lease liability
 
36

Of which:
 
 
Current
 
12

Non-current
 
24



Prior to the adoption of the New Lease Accounting Standard, rental commitments on an undiscounted basis were approximately $38 million at December 31, 2018 under long-term non-cancelable operating leases and were payable as follows: $11 million in 2019, $9 million in 2020, $9 million in 2021, $5 million in 2022, $3 million in 2023 and $1 million thereafter.
The following table gives supplementary information regarding our lease accounting at December 31, 2019:
 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Cost:
 
 
Operating lease cost
 
13

Total Lease cost
 
13

 
 
 
Other information:
 
 
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows
 
13

Right-of-use assets obtained in exchange for operating lease liabilities during the period
 
19

Weighted-average remaining lease term in months
 
18

Weighted-average discount rate
 
13
%

We also have operating subleases, where we are the lessor, relating to some of our premises. The most significant subleases being our offices in Stavanger and Houston. We do not expect to derive further value from the subleased portion of our right-of-use assets following the end of the sublease term. These subleases do not include variable payments, and do not include options for a lessee to purchase the underlying asset. We do not allocate lease consideration between lease and non-lease components because we have elected not to separate lease and non-lease components for our operating leases where Seadrill is the lessor.
For our operating subleases, the future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
1

2021
 
1

2022
 
1

2023
 
—

2024 and thereafter
 
—

Total
 
3


Rental expense was as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Rent expense
13

 
7

 
 
9

 
19

Total rent expense
13

 
7

 
 
9

 
19


On November 25, 2019 we leased the West Castor to Gulfdrill.
For operating leases where we are the lessor, our future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
10

2021
 
10

2022
 
10

2023
 
9

2024 and thereafter
 
—

Total
 
39

 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Income:
 
 
Operating lease income
 
1

Total Lease income
 
1
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.
On August 15, 2019 and September 3, 2019, in connection with the Gulfdrill joint venture, Seadrill entered charter agreements to lease three jack-up rigs from a third-party shipyard. These arrangements are to be novated to Gulfdrill prior to the commencement of its operations. On November 27, 2019, we received delivery of the jack-up rig Lovanda (formerly Zhenhai 5) under a charter agreement and a lease liability and offsetting right of use asset were recognized accordingly.
Below are the significant assumptions and judgments we applied to account for our leases in accordance with Topic 842.
1.
We apply judgment in determination whether a contract contains a lease or a lease component as defined by Topic 842.
2.
We have elected to combine leases and non-lease components. As a result, we do not allocate our consideration between leases and non-lease components.
3.
The discount rate applied to our operating leases is our incremental borrowing rate. We estimated our incremental borrowing rate based on the rate for our traded debt.
4.
Within the terms and conditions of some of our operating leases we have options to extend or terminate the lease. In instances where we are reasonably certain to exercise available options to extend or terminate, then the option was included in determining the appropriate lease term to apply. Options to renew our lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that we will exercise that option.
For operating leases where we are the lessee, our future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

2020
 
17

2021
 
16

2022
 
9

2023
 
2

2024 and thereafter
 
1

Total
 
45

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, 2019:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

Total undiscounted cash flows
 
45

Less short term leases
 
(1
)
Less discount
 
(8
)
Operating lease liability
 
36

Of which:
 
 
Current
 
12

Non-current
 
24



Prior to the adoption of the New Lease Accounting Standard, rental commitments on an undiscounted basis were approximately $38 million at December 31, 2018 under long-term non-cancelable operating leases and were payable as follows: $11 million in 2019, $9 million in 2020, $9 million in 2021, $5 million in 2022, $3 million in 2023 and $1 million thereafter.
The following table gives supplementary information regarding our lease accounting at December 31, 2019:
 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Cost:
 
 
Operating lease cost
 
13

Total Lease cost
 
13

 
 
 
Other information:
 
 
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows
 
13

Right-of-use assets obtained in exchange for operating lease liabilities during the period
 
19

Weighted-average remaining lease term in months
 
18

Weighted-average discount rate
 
13
%

We also have operating subleases, where we are the lessor, relating to some of our premises. The most significant subleases being our offices in Stavanger and Houston. We do not expect to derive further value from the subleased portion of our right-of-use assets following the end of the sublease term. These subleases do not include variable payments, and do not include options for a lessee to purchase the underlying asset. We do not allocate lease consideration between lease and non-lease components because we have elected not to separate lease and non-lease components for our operating leases where Seadrill is the lessor.
For our operating subleases, the future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
1

2021
 
1

2022
 
1

2023
 
—

2024 and thereafter
 
—

Total
 
3


Rental expense was as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Rent expense
13

 
7

 
 
9

 
19

Total rent expense
13

 
7

 
 
9

 
19


On November 25, 2019 we leased the West Castor to Gulfdrill.
For operating leases where we are the lessor, our future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
10

2021
 
10

2022
 
10

2023
 
9

2024 and thereafter
 
—

Total
 
39

 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Income:
 
 
Operating lease income
 
1

Total Lease income
 
1
v3.20.1
Common shares
 12 Months Ended
Dec. 31, 2019
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
 
Issued and fully paid share capital $2.00 par value each
 
Treasury shares held by the Company - $2.00 par value each
 
Shares

 
$ millions

 
Shares

 
$ millions

 
Shares

 
$ millions

At January 1, 2017, December 31, 2017 and July 1, 2018 (Predecessor)
—


—


508,763,020


1,017


(4,244,080
)

(9
)
Cancellation of Predecessor Company common stock
—


—

 
(508,763,020
)

(1,017
)

4,244,080

 
9

Successor Company share issuance
100,000,000


10


—


—


—


—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At July 2, 2018 (Successor)
100,000,000

 
10

 
—

 
—

 
—

 
—

At December 31, 2018 (Successor)
100,000,000

 
10

 
—

 
—

 
—

 
—

RSU share issuance
234,973

 
—

 
—

 
—

 
—

 
—

At December 31, 2019 (Successor)
100,234,973

 
10

 
—

 
—

 
—

 
—


Common share transactions for periods presented
On the Effective Date, the common stock of the Predecessor Company was cancelled and the Successor Company allocated 100,000,000 shares of $0.10 par value in accordance with the Plan. The Successor Company's authorized share capital on the Effective Date was 111,111,111 common shares each with a par value of $0.10. The unissued 11,111,111 common shares were reserved for issuance under our employee incentive plan (see note 29).
On June 5, 2019 an additional 27,768,889 authorized share capital was approved at a par value of $0.10. This increased authorized share capital to 138,880,000.
On September 4, 2019, 234,973 shares were issued to employees following a vesting of restricted stock units awarded under our employee incentive plan.

Key terms of shares 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 shares.
Holders of common shares have no pre-emptive, redemption, conversion or sinking fund rights. Holders of common shares are entitled to one vote per common share on all matters submitted to a vote of holders of common shares. Unless a different majority is required by law or the Bye-Laws, resolutions to be approved by holders of common shares require the approval by an ordinary resolution (being a resolution approved by a simple majority of votes cast at a general meeting at which a quorum is present). Under the Bye-Laws, each common share is entitled to dividends if, as and when dividends are declared by the Board of Directors, subject to any preferred dividend right of the holders of any preference shares.
In the event of liquidation, dissolution or winding up of the Company, the holders of common shares are entitled to share equally and ratably in the Company's assets, if any, remaining after the payment of all its debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares.
v3.20.1
Non-controlling interest
 12 Months Ended
Dec. 31, 2019
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 VIEs

 
Seadrill Nigeria Operations Limited

 
Total

January 1, 2017 (Predecessor)
165

 
291

 
149

 
(69
)
 
6

 
542

Changes in 2017
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net (loss)/income attributable to non-controlling interest in 2017
(89
)
 
(65
)
 
—

 
24

 
1

 
(129
)
December 31, 2017 (Predecessor)
76

 
226

 
149

 
(59
)
 
7

 
399

Adoption of new accounting standard ASU 2016-16 - Income Taxes
(25
)
 
—

 
—

 
—

 
—

 
(25
)
Net (loss)/income attributable to non-controlling interest in period from January 1, 2018 to July 1, 2018
(160
)
 
(10
)
 
1

 
7

 
2

 
(160
)
Redeemable non-controlling interest
—

 
—

 
(150
)
 
—

 
—

 
(150
)
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited
109

 
(216
)
 
—

 
—

 
—

 
(107
)
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited
—

 
—

 
—

 
199

 
(2
)
 
197

July 1, 2018 (Predecessor)
—

 
—

 
—

 
147

 
7

 
154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 2, 2018 (Successor)
—

 
—

 
—

 
147

 
7

 
154

Net (loss)/income attributable to non-controlling interest in period from July 2, 2018 to December 31, 2018
—

 
—

 
—

 
(2
)
 
—

 
(2
)
December 31, 2018 (Successor)
—

 
—

 
—

 
145

 
7

 
152

Net (loss)/income attributable to non-controlling interest in 2019
—

 
—

 
—

 
(5
)
 
4

 
(1
)
December 31, 2019 (Successor)
—

 
—

 
—

 
140

 
11

 
151


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 NADL and 50.11% interest in Sevan. The amount of shareholders' equity not attributable to us was included in non-controlling interests. As determined in the plan of reorganization, both companies became wholly owned subsidiaries of Seadrill and the non-controlling interests were eliminated prior to emergence on July 2, 2018.
Asia Offshore Drilling Ltd
We hold a 66.24% interest in Asia Offshore Drilling Ltd. 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 included a put option to the holders of the non-controlling interest shares. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to 'Redeemable non-controlling interest' within the Consolidated Balance Sheets. Refer to Note 27 - Redeemable non-controlling interest for further information.
Ship Finance VIEs
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. We concluded that we are the primary beneficiary of these companies and therefore consolidate them under the variable interest model. Accordingly, these subsidiary companies are included in our Consolidated Financial Statements, with the SFL Corporation Ltd equity in these companies included in non-controlling interest. Refer to Note 35 – Variable Interest Entities for more information.
On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 – Fresh Start Accounting for further information.
Seadrill Nigeria Operations Limited
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, which holds a 10% interest in our drillship West Jupiter and previously supported the West Jupiter's operations whilst it was under contract with Total in Nigeria. The equity attributable to Heirs Holdings is classified as a non-controlling interest in our consolidated balance sheet. In February 2020, we paid $11 million to Heirs Holdings for an option to buy the non-controlling interest at any point in the future for a $1 purchase price.
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

As at January 1, 2018 (Predecessor)
 
—

Reclassification from non-controlling interest
 
150

Fair value adjustment on initial recognition
 
(127
)
Net income attributable to redeemable non-controlling interest
 
2

Fresh start fair value adjustment
 
5

As at July 1, 2018 (Predecessor)
 
30

 
 
 
 
 
 
As at July 2, 2018 (Successor)
 
30

Net loss attributable to redeemable non-controlling interest
 
(1
)
Fair value adjustment
 
9

As at December 31, 2018 (Successor)
 
38

Net loss attributable to redeemable non-controlling interest
 
(2
)
Fair value adjustment
 
21

As at December 31, 2019 (Successor)
 
57


We hold a 66.24% interest in Asia Offshore Drilling Limited (“AOD”), which owns the benign environment jack-up rigs AOD 1, AOD 2 and AOD 3. The remaining 33.76% interest is owned by Mermaid Maritime Public Company Limited ("Mermaid").
On April 4, 2018, subsequent to filing bankruptcy petitions, the Predecessor executed a Transaction Support Agreement (“TSA”) with Mermaid in order to (i) provide a framework for a monetization event for Mermaid and (ii) obtain unanimous approval for AOD to become a party to the RSA and participate in Seadrill’s broader debt restructuring under its Chapter 11 reorganization.
The TSA provided Mermaid with put option that gave them the right (with no obligation) 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 started on October 1, 2019 and ends on September 30, 2020.
If Mermaid do not exercise their option, Seadrill will have a call option that gives them the right (with no obligation) to buy Mermaid's non-controlling interest shares for fair value, subject to a price floor of $75 million. The exercise window for the call option starts on October 1, 2020 and ends on March 31, 2021.
If the purchase price is less than $50 million then it will be settled in cash. If the purchase price is greater than $50 million, then Seadrill is required to settle the first $50 million in cash and any excess fair value in a variable number of Seadrill common shares (based on the 60 day volume-weighted average price).
The put option generated a redemption feature for Mermaid that is outside the control of Seadrill. This caused the fair value of Mermaid's non-controlling interest shares to be reclassified from equity to "Redeemable non-controlling interest" within the consolidated balance sheet of the Predecessor. Each reporting period, we are required to (i) attribute Mermaid's share of AOD's profit to the redeemable non-controlling interest and (ii) make an adjustment to record the redeemable non-controlling interest shares at fair value, with the offsetting entry going to equity. These entries are set out in the table above.
v3.20.1
Redeemable non-controlling interest
 12 Months Ended
Dec. 31, 2019
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 VIEs

 
Seadrill Nigeria Operations Limited

 
Total

January 1, 2017 (Predecessor)
165

 
291

 
149

 
(69
)
 
6

 
542

Changes in 2017
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net (loss)/income attributable to non-controlling interest in 2017
(89
)
 
(65
)
 
—

 
24

 
1

 
(129
)
December 31, 2017 (Predecessor)
76

 
226

 
149

 
(59
)
 
7

 
399

Adoption of new accounting standard ASU 2016-16 - Income Taxes
(25
)
 
—

 
—

 
—

 
—

 
(25
)
Net (loss)/income attributable to non-controlling interest in period from January 1, 2018 to July 1, 2018
(160
)
 
(10
)
 
1

 
7

 
2

 
(160
)
Redeemable non-controlling interest
—

 
—

 
(150
)
 
—

 
—

 
(150
)
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited
109

 
(216
)
 
—

 
—

 
—

 
(107
)
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited
—

 
—

 
—

 
199

 
(2
)
 
197

July 1, 2018 (Predecessor)
—

 
—

 
—

 
147

 
7

 
154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 2, 2018 (Successor)
—

 
—

 
—

 
147

 
7

 
154

Net (loss)/income attributable to non-controlling interest in period from July 2, 2018 to December 31, 2018
—

 
—

 
—

 
(2
)
 
—

 
(2
)
December 31, 2018 (Successor)
—

 
—

 
—

 
145

 
7

 
152

Net (loss)/income attributable to non-controlling interest in 2019
—

 
—

 
—

 
(5
)
 
4

 
(1
)
December 31, 2019 (Successor)
—

 
—

 
—

 
140

 
11

 
151


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 NADL and 50.11% interest in Sevan. The amount of shareholders' equity not attributable to us was included in non-controlling interests. As determined in the plan of reorganization, both companies became wholly owned subsidiaries of Seadrill and the non-controlling interests were eliminated prior to emergence on July 2, 2018.
Asia Offshore Drilling Ltd
We hold a 66.24% interest in Asia Offshore Drilling Ltd. 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 included a put option to the holders of the non-controlling interest shares. This redemption feature caused the fair value of the non-controlling interest held in AOD to be reclassified from equity to 'Redeemable non-controlling interest' within the Consolidated Balance Sheets. Refer to Note 27 - Redeemable non-controlling interest for further information.
Ship Finance VIEs
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. We concluded that we are the primary beneficiary of these companies and therefore consolidate them under the variable interest model. Accordingly, these subsidiary companies are included in our Consolidated Financial Statements, with the SFL Corporation Ltd equity in these companies included in non-controlling interest. Refer to Note 35 – Variable Interest Entities for more information.
On emergence from Chapter 11 the non-controlling interest was adjusted to fair value. Refer to Note 5 – Fresh Start Accounting for further information.
Seadrill Nigeria Operations Limited
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, which holds a 10% interest in our drillship West Jupiter and previously supported the West Jupiter's operations whilst it was under contract with Total in Nigeria. The equity attributable to Heirs Holdings is classified as a non-controlling interest in our consolidated balance sheet. In February 2020, we paid $11 million to Heirs Holdings for an option to buy the non-controlling interest at any point in the future for a $1 purchase price.
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

As at January 1, 2018 (Predecessor)
 
—

Reclassification from non-controlling interest
 
150

Fair value adjustment on initial recognition
 
(127
)
Net income attributable to redeemable non-controlling interest
 
2

Fresh start fair value adjustment
 
5

As at July 1, 2018 (Predecessor)
 
30

 
 
 
 
 
 
As at July 2, 2018 (Successor)
 
30

Net loss attributable to redeemable non-controlling interest
 
(1
)
Fair value adjustment
 
9

As at December 31, 2018 (Successor)
 
38

Net loss attributable to redeemable non-controlling interest
 
(2
)
Fair value adjustment
 
21

As at December 31, 2019 (Successor)
 
57


We hold a 66.24% interest in Asia Offshore Drilling Limited (“AOD”), which owns the benign environment jack-up rigs AOD 1, AOD 2 and AOD 3. The remaining 33.76% interest is owned by Mermaid Maritime Public Company Limited ("Mermaid").
On April 4, 2018, subsequent to filing bankruptcy petitions, the Predecessor executed a Transaction Support Agreement (“TSA”) with Mermaid in order to (i) provide a framework for a monetization event for Mermaid and (ii) obtain unanimous approval for AOD to become a party to the RSA and participate in Seadrill’s broader debt restructuring under its Chapter 11 reorganization.
The TSA provided Mermaid with put option that gave them the right (with no obligation) 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 started on October 1, 2019 and ends on September 30, 2020.
If Mermaid do not exercise their option, Seadrill will have a call option that gives them the right (with no obligation) to buy Mermaid's non-controlling interest shares for fair value, subject to a price floor of $75 million. The exercise window for the call option starts on October 1, 2020 and ends on March 31, 2021.
If the purchase price is less than $50 million then it will be settled in cash. If the purchase price is greater than $50 million, then Seadrill is required to settle the first $50 million in cash and any excess fair value in a variable number of Seadrill common shares (based on the 60 day volume-weighted average price).
The put option generated a redemption feature for Mermaid that is outside the control of Seadrill. This caused the fair value of Mermaid's non-controlling interest shares to be reclassified from equity to "Redeemable non-controlling interest" within the consolidated balance sheet of the Predecessor. Each reporting period, we are required to (i) attribute Mermaid's share of AOD's profit to the redeemable non-controlling interest and (ii) make an adjustment to record the redeemable non-controlling interest shares at fair value, with the offsetting entry going to equity. These entries are set out in the table above.
v3.20.1
Accumulated other comprehensive income/(loss)
 12 Months Ended
Dec. 31, 2019
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)
Unrealized gain on marketable securities

 
Unrealized gain on foreign exchange

 
Actuarial gain/(loss) relating to pension

 
Share in unrealized gains from associated companies

 
Change in unrealized gain on interest rate swaps in VIEs

 
Change in debt component on Archer facility

 
Total

Balance as at December 31, 2017 (Predecessor)
31

 
36

 
(26
)
 
15

 
2

 
—

 
58

Adoption of accounting standard update
(31
)
 
—

 
—

 
—

 
—

 
—

 
(31
)
Balance as at January 1, 2018 (Predecessor)
—

 
36

 
(26
)
 
15

 
2

 
—

 
27

Reset accumulated other comprehensive (loss)/income
—

 
(36
)
 
26

 
(15
)
 
(2
)
 
—

 
(27
)
Balance as at July 1, 2018 (Predecessor)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss) before reclassifications
—

 
—

 
1

 
(5
)
 
—

 
(3
)
 
(7
)
Balance as at December 31, 2018 (Successor)
—

 
—

 
1

 
(5
)
 
—

 
(3
)
 
(7
)
Other comprehensive (loss)/income
—

 
—

 
(1
)
 
(8
)
 
—

 
3

 
(6
)
Balance as at December 31, 2019 (Successor)
—

 
—

 
—

 
(13
)
 
—

 
—

 
(13
)

In January 2016, the FASB issued ASU 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities" to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. ASU 2016-01 became effective for fiscal years and interim periods beginning after December 15, 2017. We adopted ASU 2016-01 starting from January 1, 2018 on a modified retrospective basis, with no changes recognized in the prior year comparatives and a cumulative catch up adjustment recognized in the Predecessor opening retained earnings. Upon adoption of ASU 2016-01, we reclassified $31 million of unrealized gains related to our marketable securities from accumulated other comprehensive income to retained earnings in the Predecessor. As a result of the adoption of this guidance we are required to recognize the movement in the fair value of our marketable securities in the Consolidated Statement of Operations. Refer to Note 15 "Marketable securities" for further information.
On emergence from Chapter 11, the accumulated other comprehensive income of the Predecessor was reset to nil. For further information refer to Note 5 - Fresh start accounting.
The applicable amount of income taxes associated with each component of other comprehensive income in the Successor is nil, other than on the actuarial loss on pension, due to the fact that the items relate to companies domiciled in non-taxable jurisdictions. For actuarial loss related to pension the accumulated applicable amount of income taxes is nil for the year ended December 31, 2019 (Successor) (nil for the period July 2, 2018 to December 31, 2018 (Successor) and $1 million for the period from January 1, 2018 to July 1, 2018 (Predecessor) as this item is related to companies domiciled in Norway where the tax rate is 22% (December 31, 2018 (Successor): 23%).
v3.20.1
Share based compensation
 12 Months Ended
Dec. 31, 2019
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Share-based compensation expense (1)
5

 
—

 
 
9

 
7

Total share-based compensation expense
5

 
—

 
 
9

 
7

(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 Chapter 11. This was classified within reorganization items.
On August 16, 2018, we established an employee incentive plan with a limit of 11.1 million shares in Seadrill Limited.
On September 4, 2018 we made a grant of 0.5 million 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 Seadrill 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.
The compensation cost for non-vested awards not yet recognized as at December 31, 2019 is $9 million (December 31, 2018: $9 million), with a weighted average vesting period of 2 years.
v3.20.1
Pension benefits
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Pension benefits
Note 30 - Pension benefits

Defined benefit plans

We have several defined benefit pension plans covering a number of our Norwegian employees. All the plans are administered by a life insurance company. Our net obligation is calculated separately for each plan by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to present value, from which the aggregated fair value of plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations.

Actuarial gains and losses are recognized in the Consolidated Statement of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income.

On retirement, or when an employee leaves the company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting, the portion of the net unrealized actuarial gains/losses corresponding to the relative value of the obligation reduction is recognized through the Consolidated Statement of Operations. However, settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. We deem the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case, the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the Consolidated Statement of Operations.

For onshore employees in Norway, who are participants in the defined benefit plans, the primary benefits are a retirement pension of approximately 66 percent of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66 percent of the total of 12 times the Norwegian Social Security Base. Most employees in this group may choose to start a pre-retirement pension at 62 years of age.

Consolidated Balance Sheet position
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Accrued pension liabilities - Non-current liabilities
2

 
4

Less: Deferred tax (Asset)
(1
)
 
(1
)
Shareholders' equity
1

 
3


 
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Service cost
3

 
2

 
 
1

 
2

Interest cost on prior years’ benefit obligation
1

 
1

 
 
—

 
2

Gross pension cost for the year
4

 
3

 
 
1

 
4

Expected return on plan assets
(1
)
 
(1
)
 
 
—

 
(1
)
Net pension cost for the year
3

 
2

 
 
1

 
3

Impact of settlement/curtailment funded status
—

 
—

 
 
—

 
(1
)
Total net pension cost
3

 
2

 
 
1

 
2



The funded status of the defined benefit plan
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Projected benefit obligations at end of period
40

 
37

Plan assets at market value
(39
)
 
(33
)
Accrued pension liabilities
1

 
4



Change in projected benefit obligations
 
Successor
 
 
Predecessor
(In $ millions)
December 31, 2019

 
December 31, 2018

 
 
June 30, 2018

Projected benefit obligations at beginning of period
37

 
36

 
 
38

Interest cost
1

 
1

 
 
—

Service cost
3

 
1

 
 
1

Benefits paid
(2
)
 
(1
)
 
 
(1
)
Change in unrecognized actuarial gain
—

 
2

 
 
(2
)
Foreign currency translations
1

 
(2
)
 
 
—

Projected benefit obligations at end of period
40

 
37

 
 
36


 
Change in pension plan assets
 
Successor
 
 
Predecessor
(In $ millions)
December 31, 2019

 
December 31, 2018

 
 
June 30, 2018

Fair value of plan assets at beginning of year
33

 
33

 
 
33

Estimated return
1

 
1

 
 
—

Contribution by employer
6

 
—

 
 
2

Administration charges
—

 
—

 
 
—

Benefits paid
(2
)
 
(1
)
 
 
(1
)
Actuarial gain
—

 
2

 
 
(1
)
Foreign currency translations
1

 
(2
)
 
 
—

Fair value of plan assets at end of year
39

 
33

 
 
33



The accumulated benefit obligation for all defined benefit pension plans was $37 million and $33 million at December 31, 2019 (Successor) and 2018 (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.
 
During the year ended December 31, 2017, a number of employees left and as a result, the defined benefit scheme transferred the pension liability for these employees to the life insurance company administering the scheme. The difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company has been recognized within “Other comprehensive income.” The settlement is not deemed to be significant in the context of the overall scheme and as such net unrecognized actuarial losses have not been recycled as a result of the settlement.

The expected rate of return on plan assets and the discount rate applied to projected benefits are particularly important factors in calculating our pension expense and liabilities. We evaluate assumptions regarding the estimated rate of return on plan assets based on historical experience and future expectations on investment returns, utilizing the asset allocation classes held by the plan’s portfolios. The discount rate is based on the covered bond rate in Norway. Changes in these and other assumptions used in the actuarial computations could impact the projected benefit obligations, pension liabilities, pension expense and other comprehensive income.

Assumptions used in calculation of pension obligations 
 
Successor
 
 
Predecessor
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Rate of compensation increase at the end of year
2.25
%
 
2.75
%
 
 
2.50
%
 
2.50
%
Discount rate at the end of year
2.30
%
 
2.60
%
 
 
2.40
%
 
2.40
%
Prescribed pension index factor
2.00
%
 
2.00
%
 
 
2.00
%
 
1.50
%
Expected return on plan assets for the year
2.60
%
 
2.60
%
 
 
2.40
%
 
2.40
%
Employee turnover
4.00
%
 
4.00
%
 
 
4.00
%
 
4.00
%
Expected increases in Social Security Base
2.50
%
 
2.50
%
 
 
2.25
%
 
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  
 
Successor

 
 
Successor

 
December 31, 2019

 
 
December 31, 2018

Equity securities
13.6
%
 
 
12.7
%
Debt securities
58.4
%
 
 
70.0
%
Real estate
11.0
%
 
 
9.9
%
Money market
16.5
%
 
 
6.9
%
Other
0.5
%
 
 
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. We diversify our allocation of plan assets by investing in both domestic and international fixed income securities and domestic and international equity securities. These investments are readily marketable and can be sold to fund benefit payment obligations as they become payable.
 
Cash flows - Contributions expected to be paid
 
The table below shows our expected annual pension plans contributions under defined benefit plans for the years ending December 31, 2020-2029. The expected payments are based on the assumptions used to measure our obligations at December 31, 2019 and include estimated future employee services. 
(In $ millions)
December 31, 2019

2020
4

2021
2

2022
2

2023
3

2024
2

2025-2029
13

Total payments expected during the next 10 years
26



Defined contribution and other plans

We made contributions to personal defined contribution pension and other plans totaling $16 million for the year ended December 31, 2019 and $9 million for the period from July 2, 2018 through December 31, 2018 (Successor) and $10 million for the period from January 1, 2018 through July 1, 2018 (Predecessor). For the year to December 31, 2017 (Predecessor) the charge was $17 million. These were charged as operational expenses as they became payable.
v3.20.1
Related party transactions
 12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related party transactions
Related party transactions
Our main related parties include (i) affiliated companies over which we hold significant influence and (ii) companies who are either controlled by or whose operating policies may be significantly influenced by our major shareholder, Hemen.
Companies in which we hold significant influence include (i) Seadrill Partners, (ii) SeaMex and (iii) Seabras Sapura (iv) Sonadrill and (v) Gulfdrill. Companies that are controlled by or whose operating policies may be significantly influenced by Hemen include (i) Ship Finance, (ii) Archer, (iii) Frontline, (iv) Seatankers and (v) Northern Drilling. In the following sections we provide an analysis of (i) transactions with related parties and (ii) balances outstanding with related parties.
Related party revenue
The below table provides an analysis of related party revenues for periods presented in this report.
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Management fee revenues (a)
109

 
41

 
 
41

 
84

In country support services revenues (b)
—

 
—

 
 
1

 
23

Related party inventory sales
1

 
1

 
 
1

 
—

Other
—

 
4

 
 
—

 
3

Total related party operating revenues
110

 
46


 
43


110

(a) We provide management and administrative services to Seadrill Partners and SeaMex and operation and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Drilling. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis.
(b) We previously provided in country support services to the Seadrill Partners rig West Polaris when it operated in Angola. The West Polaris's contract ended in December 31, 2017, so we no longer earn revenues under this arrangement.
In addition to the amounts shown above, we recognized reimbursable revenues and expenses from Northern Drilling of $167 million for the year ended December 31, 2019 for work to perform the first mobilization of the Northern Drilling rigs, West Mira and West Bollsta. As at December 31, 2019 our Consolidated Balance Sheet included a $55 million receivable from Northern Drilling included in related parties and $5 million unbilled reimbursables amounts within Other Assets for costs to be recovered from this arrangement.
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

In country support services expenses (c)
—

 
—

 
 
1

 
8

Related party inventory purchases
1

 
—

 
 
—

 
3

Other related party operating expenses (d)
2

 
1

 
 
3

 
3

Net bareboat charter arrangements (e)
—

 
—

 
 
—

 
(1
)
Total related party operating expenses
3

 
1

 
 
4

 
13

(c) Seadrill Partners previously provided us with in country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us with in 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) We previously acted as an intermediate charterer for the Seadrill Partners rig West Aquarius, during its contract with Hibernia in Canada, which ended in April 2017.
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Interest income (f)
26

 
15

 
 
12

 
34

Gains on related party derivatives
—

 
—

 
 
—

 
1

Interest income recognized on deferred contingent consideration (g)
4

 
1

 
 
2

 
3

Total related party financial items
30

 
16

 
 
14

 
38

(f) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). We also previously earned interest income on our related party loans to Seadrill Partners in 2017.
(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.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Related party loans and interest (h)
 
488

 
476

Deferred consideration arrangements (i)
 
31

 
59

Convertible bond (j)
 
35

 
43

Trading balances (k)
 
150

 
138

Total related party receivables
 
704

 
716

Of which:
 
 
 
 
Amounts due from related parties - current
 
181

 
177

Amounts due from related parties - non-current
 
523

 
539

(h) We have loan receivables outstanding from SeaMex and Seabras Sapura. We previously had loan receivables from Seadrill Partners, which have been repaid. We have summarized the amounts outstanding in the table below:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

SeaMex seller's credit and loans receivable
 
422

 
398

Seabras loans receivable
 
66

 
78

Total related party loans and interest
 
488

 
476

SeaMex loans include (i) $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, and therefore cannot be repaid. As such, we have classified this balance as non-current on our Consolidated Balance Sheets. (ii) $45 million working capital loan advanced in November 2016 and (iii) $127 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% and are subordinated to SeaMex's external debt facility.
Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $66 million balance shown in the table above includes (i) $54 million of loan principal and (ii) $12 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility. We received repayments against these related party loans of $15 million during 2019.
In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 18 - "Investments in Associated Companies" for further details. We received repayments against these shareholder loans of $9 million during 2019.
(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:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

West Vela - Mobilization receivable
 
17

 
31

West Vela - Share of dayrate
 
14

 
27

West Polaris
 
—

 
1

Total deferred consideration receivable
 
31

 
59


On adoption of fresh start accounting, we recorded receivables for West Vela share of dayrate and West Polaris earnout. These amounts were previously accounted for as gain contingencies so were only recognized when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items.
We recorded the following gains in other operating income for these arrangements.
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

West Polaris earn out realized
—

 
—

 
 
—

 
13

West Vela earn out realized
—

 
—

 
 
7

 
14

Total contingent consideration recognized
—

 
—

 
 
7

 
27

(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 because of this transaction.
The loan receivable is a convertible debt instrument comprised of a debt instrument and a conversion option, classed as an embedded derivative. Both elements are measured at fair value at each reporting date. As at December 31, 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. As a result, we recorded an other than temporary impairment against our investment in the convertible bond issued to us by Archer. Following the other-than-temporary impairment, the fair value of the convertible debt instrument was $35 million of which the split between debt and embedded derivative option was $35 million and nil respectively. See Note 33 - Fair values of financial instruments for further details.
Subsequent to the year end, on March 13, 2020, Archer announced that it had successfully secured a consensual amendment and extension to its debt facilities. This included a reduction to the principal and accrued interest on the convertible loan due to us from Archer, in exchange for a reduced stock conversion price and removal of certain restrictions regarding the sale or conversion of the loan. Following the amendment, the principal due on the loan would be $13 million and the stock conversion price would decrease from $2.083 per share to $0.40. The maturity date of the loan would also extend to April 1, 2024. The transaction is subject to execution of final agreements and completion of closing conditions.
The fair value gain/(loss) on the convertible bond for periods presented is summarized below:
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Other than temporary impairment
(11
)
 
—

 
 
—

 
—

Fair value gain / (loss) of Archer debt component
3

 
(3
)
 
 
2

 
1

Fair value (loss) / gain of Archer embedded conversion option
—

 
(9
)
 
 
2

 
(4
)
(k) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Drilling and Sonadrill for related party management fees. In addition, certain receivables and payables arise when we pay an invoice on behalf of Seadrill Partners or SeaMex and vice versa. Receivables and payables are generally settled quarterly in arrears.

Related party payable balances
The below table provides an analysis of related party payable balances for periods presented in this report.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Related party loans payable (n)
 
239

 
222

Trading balances (o)
 
19

 
39

Total related party liabilities
 
258

 
261

Of which:
 
 
 
 
Amounts due to related parties - current
 
(19
)
 
(39
)
Long-term debt due to related parties
 
(239
)
 
(222
)
(n) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 35 – Variable Interest Entities (VIEs) for further details). The carrying amount of the loans was $239 million at December 31, 2019 (2018: $222 million). The principal outstanding on the loans was $314 million at December 31, 2019, (2018: $314 million).
There is a right of offset of trading balance assets against the loans, the net position is disclosed within “Long-term debt due to related parties” on the Consolidated Balance Sheets. As at December 31, 2019 (Successor) the trading position was a net liability position of nil.
The loans bear interest at a fixed rate of 4.5% per annum and mature between 2023 and 2029. The total interest expense incurred for the year ended December 31, 2019 (Successor) was $14 million, the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million, the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 million (year ended December 31, 2017 (Predecessor): $15 million).
(o) Trading balances primarily include related party payables due from our Ship Finance variable interest entities to Ship Finance and trading balances due from us to SeaMex and Seadrill Partners.
Other related party transactions
Seabras Sapura guarantees - In November 2012, a subsidiary of Seabras Sapura Participações S.A. entered into a $179 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Esmeralda pipe-laying support vessel, with a maturity in 2032. During 2013 an additional facility of $36 million was entered into, with a maturity in 2020. As a condition to the lenders making the loan available, we provided a sponsor guarantee, on a joint and several basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrower. The total amount guaranteed by the joint venture partners as at December 31, 2019 (Successor) was $146 million (December 31, 2018 (Successor): $165 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 on behalf of customers. Please refer to Note 34 - "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 4.4.
v3.20.1
Financial instruments and risk management
 12 Months Ended
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial instruments and risk management
Financial instruments and risk management
We are exposed to several market risks, including credit risk, foreign currency risk and interest rate risk. Our policy is to reduce our exposure to these risks, where possible, within boundaries deemed appropriate by our management team. This may include the use of derivative instruments.
Credit risk
We have financial assets, including cash and cash equivalents, marketable securities, other receivables and certain amounts receivable on derivative instruments. These assets expose us to credit risk arising from possible default by the counterparty. Most of the counterparties are creditworthy financial institutions or large oil and gas companies. We do not expect any significant loss to result from non-performance by such counterparties.
We do not demand collateral in the normal course of business. The credit exposure of derivative financial instruments is represented by the fair value of contracts with a positive fair value at the end of each period, adjusted for our non-performance credit risk assumption.

Concentration of risk
There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with Citibank, Nordea Bank Finland Plc, Danske Bank A/S, BNP Paribas and ING Bank N.V. We consider these risks to be remote. 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 6 - Segment information. For details on amounts due from affiliated companies, refer to Note 31 - Related Party transactions.
Foreign exchange risk
As is customary in the oil and gas industry, a majority of our revenues and expenses are denominated in U.S. dollars, which is the functional currency of most of our subsidiaries and equity method investees. However, a portion of the revenues and expenses of certain of our subsidiaries and equity method investees are denominated in other currencies. We are therefore exposed to foreign exchange gains and losses that may arise on the revaluation or settlement of monetary balances denominated in foreign currencies.
Our foreign exchange exposures primarily relate to foreign denominated cash and working capital balances. We do not expect these remaining exposures to cause a significant amount of fluctuation in net income and therefore do not currently hedge them. Further, the effect of fluctuations in currency exchange rates caused by our international operations generally has not had a material impact on our overall operating results.
Interest rate risk
Our exposure to interest rate risk relates mainly to our floating rate debt and balances of surplus funds placed with financial institutions. We manage this risk through the use of derivative arrangements.
On May 11, 2018, we purchased an interest rate cap for $68 million to mitigate our exposure to future increases in LIBOR on our Senior Credit Facility debt. The interest rate cap is not designated as a hedge and therefore 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.
We have set out our exposure to interest rate risk on our net debt obligations at December 31, 2019 (Successor) 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)
 
—

 
4,320

 
4,320

 
43

Debt contained within VIEs
 
621

 
—

 
621

 
6

Debt exposed to interest rate fluctuations
 
6,283

 
(180
)
 
6,103

 
61

Less: Cash and Restricted Cash
 
(1,357
)
 
—

 
(1,357
)
 
(14
)
Net debt exposed to interest rate fluctuations (2)
 
4,926

 
(180
)
 
4,746

 
47

(1) The 3-month LIBOR rate as at December 31, 2019 was 1.91%. At this date, the interest cap would mitigate 4% of the impact of a theoretical 1% point increase in LIBOR.
(2) The $476 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 statement of operations
Gains and losses on derivatives reported in our consolidated statement of operations included the following:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

(Loss)/gain recognized in the Consolidated Statement of Operations relating to derivative financial instruments
 
 
 
 
 
 
 
 
Interest rate cap agreement
(37
)
 
(22
)
 
 
(6
)
 
—

Archer convertible debt instrument
—

 
(9
)
 
 
2

 
(4
)
Interest rate swaps not designated for hedge accounting
—

 
—

 
 
—

 
(31
)
Cross currency swaps not designated for hedge accounting
—

 
—

 
 
—

 
46

Loss/(gain) on derivative financial instruments
(37
)
 
(31
)
 
 
(4
)
 
11


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 $45 million convertible bond issued to us by Archer. Please see Note 31 - Related party transactions for further details.
c) Interest rate swaps and cross currency swaps
Prior to filing for Chapter 11 (Predecessor), we used interest rate swaps and cross currency swaps to mitigate the impact of currency and interest rate fluctuations on our debt. When we filed for Chapter 11 we triggered a default under these agreements and our counterparties terminated the contracts and received an allowed claim for damages suffered. We reversed the liabilities for these instruments and recorded liabilities equal to the expected value of the allowed claims received by our counterparties. The allowed claim values were higher than the previous fair values, which factored in a discount for our own credit risk, so this led to an expense of $89 million. We classified the expense within reorganization items (see Note 4 for further details).
Derivative financial instruments included in our Consolidated Balance Sheet
Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
 
(In $ millions)
Maturity date
Applicable rate
Outstanding principal - December 31, 2019

As at December 31, 2019

As at December 31, 2018

 
 
Interest rate cap
June 2023
2.87% LIBOR cap
4,500

3

39

 
 
 
 
 
3

39
v3.20.1
Fair values of financial instruments
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair values of financial instruments
Note 33 - Fair values of financial instruments  
Fair value of financial instruments measured at amortized cost
The carrying value and estimated fair value of our financial instruments that are measured at amortized cost at December 31, 2019 (Successor) and December 31, 2018 (Successor) are as follows:
 
Successor
 
Successor
 
December 31, 2019
 
December 31, 2018
(In $ millions)
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
Related party loans receivable (1) (Level 2)
395

 
488

 
476

 
476

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Secured credit facilities (Level 2)
5,464

 
5,549

 
5,388

 
5,519

Credit facilities contained within variable interest entities (Level 2)
590

 
598

 
612

 
626

Senior Secured Notes (Level 1)
404

 
476

 
770

 
769

Related party loans payable by the VIE (Level 2)
229

 
239

 
222

 
226

(1) 
Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis 
Level 1
The fair value of the Senior Secured Notes are derived using market traded value. We have categorized this at level 1 on the fair value measurement hierarchy. Refer to Note 22 – Debt for further information.
Level 2
Upon the adoption of fresh start accounting, the related party loans receivable from 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 and the loans were entered into at market rates. The loans are categorized as level 2 on the fair value measurement hierarchy. Other trading balances with related parties are not shown in the table above and are covered under Note 31 - 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.
The fair value of the secured credit facilities and Ship Finance loans are derived using the discounted cash flow model, using a cost of debt of 6%.
The fair value of the loans provided by Ship Finance to our VIE's are derived using the discounted cash flow model, using a cost of debt of 11%. We have categorized this at level 2 on the fair value measurement hierarchy. Refer to Note 31 - 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, 2019 (Successor) and December 31, 2018 (Successor) are as follows: 
 
Successor
 
Successor
 
December 31, 2019
 
December 31, 2018
(In $ millions)
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
Cash and cash equivalents (Level 1)
1,115

 
1,115

 
1,542

 
1,542

Restricted cash (Level 1)
242

 
242

 
461

 
461

Marketable securities (Level 1)
11

 
11

 
57

 
57

Related party loans receivable - Archer convertible debt (Level 3)
35

 
35

 
43

 
43

Interest rate cap (Level 2)
3

 
3

 
39

 
39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Temporary equity
 
 
 
 
 
 
 
Redeemable non-controlling interest (Level 3)
57

 
57

 
38

 
38


Level 1
The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, is a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy. Quoted market prices are used to estimate the fair value of marketable securities, which are valued at fair value on a recurring basis.
Level 2
The fair value of the interest rate cap as at December 31, 2019 is calculated using well-established independent valuation techniques and counterparty non-performance credit risk assumptions. The calculation of the credit risk in the swap values is subject to a number of assumptions including an assumed credit default swap rate based on our traded debt, and recovery rate, which assumes the proportion of value recovered, given an event of default. We have categorized these transactions as level 2 on the fair value measurement hierarchy.
Level 3
The Archer convertible debt instrument is bifurcated into two elements. The fair value of the embedded derivative option is calculated using a modified version of the Black-Scholes formula for a currency translated option. Assumptions include Archer's share price in NOK, NOK/ USD FX volatility and dividend yield. The fair value of the debt component is derived using the discounted cash flow model including assumptions relating to cost of debt and credit risk associated to the instrument.
The redeemable non-controlling interest in AOD is calculated by applying a fair value to the three AOD rigs and debt facility using a discounted cash flow model. The rig values are determined using an income approach based on projected future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives, discounted using a weighted average cost of capital of 11%. The fair value of the debt is derived using the discounted cash flow model, using a cost of debt of 6%.
Fair value considerations on one-time transactions
Archer convertible bond fair value
As at December 31, 2019 we reassessed the fair value of the Archer convertible bond held as a related party balance as a result of the current negotiations to restructure Archer's debt with senior lenders and Seadrill. We have re-assessed the fair value of the bond using a discounted cashflow model approach. For the purposes of the valuation, we have assumed that the maturity date of the bond will be pushed out to December 2024, which we expect to be required in order for Archer to refinance their bank borrowings to which the Seadrill bond is subordinate. We applied a discount rate of 14%.
As a result, an impairment of $11 million was recognized in the Consolidated Statements of Operations within "Impairment of convertible bond from related party" and $3 million recognized in the Consolidated Statements of Comprehensive loss within "Change in fair value of debt component of Archer convertible bond" for the year ended December 31, 2019.
The convertible bond outstanding as at December 31, 2019 was $35 million (December 31, 2018: $43 million). For further information and fair value considerations, refer to Note 31 - Related Party Transactions.
Impairment of investments in associated companies
On September 6, 2019, Seadrill Partners LLC received notification from the New York Stock Exchange ("the NYSE") that trading of their common units had been suspended due to the Company's low market capitalization. We determined that this was a trigger of other-than-temporary impairment against our investments in Seadrill Partners. As a result, we recognized an impairment of $302 million against the Seadrill Partners direct ownership interests, subordinated units and IDRs. This expense was classified under the line item "Loss on impairment of investments" in the consolidated statement of operations, in the year ended December 31, 2019.
Fresh start valuations
The Plan presented on February 26, 2018, and confirmed by the Bankruptcy Court on April 17, 2018, estimated a range of distributable value for the Successor Company of which a reorganization value was derived based on the mid-point of this range of estimated distributable values. The reorganization value represents the fair value of the Successor Company’s total assets and, under fresh start accounting, we are required to allocate the reorganization value to individual assets based on their estimated fair values. For further information, refer to Note 5 - Fresh Start Accounting.
Drilling unit impairment
In our reported Predecessor period ended July 1, 2018 (Predecessor), we recorded an impairment expense of $414 million against our drilling units, derived from a fair value using an income approach based on updated projections of future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives. For further information, refer to Note 9 - Other operating items.
Impairment of marketable securities and investments in associated companies and joint ventures
In the year ended December 31, 2017 we recognized impairments on our investments in marketable securities, associated companies and joint ventures following deteriorating conditions in the oil and gas industry and supply and demand conditions in the offshore drilling sector.
For further information and fair value considerations, refer to Note 11 - Impairment loss on investments in associated companies.
v3.20.1
Commitments and contingencies
 12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies
Commitments and contingencies
Legal Proceedings
From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities.  We believe that the resolution of such claims will not have a material impact, individually or in the aggregate, on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our Consolidated Financial Statements as at December 31, 2019.
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. Due to the backlog of cases we estimate a decision within approximately 3 years.
Dalian Newbuilds
As at December 31, 2019, 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 insolvency 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 has submitted a draft reorganization plan to the insolvency court which has stated that it will convene a creditor’s meeting 30 days from when it receives the same for a vote on the draft plan. The contracts are all with limited liability subsidiaries of Seadrill. There are no parent company guarantees. As at 31 March 2020, the date of the creditor’s meeting remains unconfirmed.
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 JV partner 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. On January 3, 2020, Oro Negro’s foreign representative was changed to Jose Gerardo Badin Cherit. As a consequence there has been an extension to Seadrill responding to Gil White’s response in further support of its motion to dismiss until further notice. . We intend to vigorously defend against the claims Oro Negro asserts and dispute the allegations set forth in the Complaint. The costs of defending the claims against Seadrill and its JV partner are being met by the joint venture, SeaMex.
Guarantees
We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee:
 
Successor

 
Successor

 (In $ millions)
December 31, 2019

 
December 31, 2018

Guarantees in favor of customers (1)(2)(3)
215

 
7

Guarantees in favor of banks (4)
146

 
165

Guarantees in favor of suppliers
—

 
1

Total
361

 
173


(1) Guarantees to Seadrill Partners - Guarantees in favor of customers are performance guarantees provided on behalf of Seadrill Partners of $15 million (December 31, 2018 (Successor): $7 million). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of nil (December 31, 2018 (Successor): $1 million). Contractual maturity from 2020-2021.
(2) Guarantees to Northern Drilling - Guarantees in favor of customers are performance guarantees provided on behalf of Northern Drilling of $150 million (December 31, 2018 (Successor): $nil). These guarantees are indemnified by Northern Drilling. Contractual maturity till 2022.
(3) Guarantees to Sonadrill - Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $50 million (December 31, 2018 (Successor): $nil). Contractual maturity till 2021 and remains in full force and effect until all obligations under the contract have been discharged and in any event shall terminate on the 90th day after completion of demobilization.
(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 $146 million (December 31, 2018 (Successor): $165 million). Contractual maturity till 2021.
As of December 31, 2019 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 is up to $22 million of which we are joint and severally liable.
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, 2019, we have incurred $19 million of costs to repair the equipment, of which $4 million has been recovered and an additional $14 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 $10 million insurance income from loss of hire of the Sevan Louisiana, covering the period until May 2019. As any further loss of hire in bringing the rig back to work in August 2019 was not readily determined as at December 31, 2019 we have not recognized the gain contingency for further amounts recoverable under the policy.
v3.20.1
Variable Interest Entities
 12 Months Ended
Dec. 31, 2019
Variable Interest Entity, Measure of Activity [Abstract]  
Variable Interest Entities
Variable Interest Entities
Between 2007 and 2013, 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 ("Ship Finance VIEs"). We concluded that we are the primary beneficiary of these companies and therefore consolidate them under the variable interest model.
As at December 31, 2019 (Successor), the Ship Finance VIEs lease two semi-submersible rigs and a jack-up rig to certain fully owned Seadrill entities under long-term charter agreements. These agreements include options for the Seadrill entities to purchase the rigs during the charter periods and obligations to purchase the assets at the end of the lease.
The following table gives a summary of the sale and leaseback arrangements and repurchase options, as at December 31, 2019:
Unit
 
Effective
from
 
Sale value
(In $ millions)
 
First
repurchase
option
(In $ millions)
 
Month of first
repurchase
option
 
Last
repurchase
option (1)
(In $ millions)
 
Month of last
repurchase
Option (1)
West Taurus
 
Nov 2008
 
850
 
418
 
Feb 2015
 
154
 
Dec 2024
West Hercules
 
Oct 2008
 
850
 
580
 
Aug 2011
 
138
 
Dec 2024
West Linus
 
June 2013
 
600
 
370
 
Jun 2018
 
170
 
May 2029

(i)     Ship Finance has a right to require us to purchase the West Linus for $86 million if we don’t exercise the final repurchase option.
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)
 
2020
 
2021
 
2022
 
2023
 
2024
West Taurus
 
101
 
96
 
96
 
181
 
177
West Hercules
 
100
 
96
 
96
 
183
 
176
West Linus
 
99
 
99
 
92
 
189
 
153

The Ship Finance VIEs are fully consolidated in our Consolidated Financial Statements. The equity attributable to Ship Finance in the VIEs is included in non-controlling interests. The rigs are reported within drilling units in our balance sheet. No gain from the sale of the units was recorded at the time of each transaction. The investment in the capital leases recorded in the Ship Finance VIEs are eliminated on consolidation against the corresponding capital lease liability held within Seadrill entities. The other assets and liabilities of the VIEs are fully reflected within the Consolidated Financial Statements.

The balance sheets of the VIEs on a stand-alone basis at December 31, 2019 and December 31, 2018 (Successor) were as follows:
 
 
Successor

 
Successor

 
(In $ millions)
 
As at December 31, 2019

 
As at December 31, 2018

Cash and cash equivalents
 
22

 
2

Investment in finance lease
 
972

 
1,024

Total assets of the VIEs (1)
 
994

 
1,026

 
 
 
 
 
Short-term interest bearing debt (2)
 
48

 
33

Long-term interest bearing debt (2)
 
550

 
593

Other liabilities
 
5

 
2

Short-term amounts due to related parties
 
12

 
31

Long-term debt due to related parties (3)
 
239

 
222

Total liabilities of the VIEs
 
854

 
881

Equity of the VIEs
 
140

 
145


(1) Book value of units in the Company's consolidated financial statements as at December 31, 2019 was $784 million (December 31, 2018: $823 million).
(2)
Total interest bearing debt comprises principal outstanding of $621 million offset by $23 million debt discount (December 31, 2018: $655 million principal outstanding offset by $29 million debt discount).
(3)
We present balances due to/from Ship Finance on a net basis, due to the fact that there is a right to offset established in the long-term loan agreements, and the balances are intended to be settled on a net basis as shown in the table below:
        
 
Successor
 
Successor
(In $ millions)
As at December 31, 2019

 
As at December 31, 2018

Debt principal outstanding
314

 
314

Debt discount
(75
)
 
(88
)
Trading liability positions held against long-term loan
—

 
(4
)
Long-term loan due to related parties
239

 
222
v3.20.1
Supplementary cash flow information
 12 Months Ended
Dec. 31, 2019
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
 
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Non-cash investing activities
 
 
 
 
 
 
 
 
Sale of rigs and equipment (1)
—

 
—

 
 
—

 
103

Proceeds from repayment of short-term loan from related parties due to Seadrill Partners insulation from Seadrill Limited (2)
—

 
—

 
 
—

 
109

Derecognition of Sevan Developer newbuild asset (3)
—

 
—

 
 
—

 
620

Derecognition of Sevan Developer construction obligation (3)
—

 
—

 
 
—

 
(526
)
 
 
 
 
 
 
 
 
 
Non-cash financing activities
 
 
 
 
 
 
 
 
Repayment of debt following sale of rigs and equipment (1)
—

 
—

 
 
—

 
(103
)
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited (3)
—

 
—

 
 
—

 
(109
)
Dividend to non-controlling interests in VIEs (4)
—

 
—

 
 
—

 
(14
)

(1) 
During the year ended December 31, 2017 (Predecessor), we completed the sale of the West Triton, West Resolute and West Mischief to Shelf Drilling, receiving cash consideration of $122 million. This comprised sales value of $225 million offset by $103 million of debt repayments. Refer to Note 9 - Other operating items for further information.

(2) 
During the year ended December 31, 2017 (Predecessor), Seadrill Partners amended certain credit facilities to insulate itself from Seadrill Limited. This resulted in a $109 million repayment in respect to the $440 million secured debt facility. Refer to Note 31 - Related party transactions for further information on related party transactions.
 
(3) 
During the year ended December 31, 2017 (Predecessor), Sevan and Cosco agreed to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a contract termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset and therefore derecognized the newbuild asset, which was held at $620 million, construction obligation held at $526 million, and accrued interest and other liabilities held at $19 million, resulting in a net loss on disposal of $75 million. Refer to Note 9 – Other operating items for further information.

(4) 
During the years ended December 31, 2017, the Ship Finance VIEs declared dividends payable to Ship Finance. Refer to Note 35 - Variable interest entities for further information.
v3.20.1
Subsequent Events
 12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

Archer convertible note

On March 13, 2020, Archer announced that it had successfully secured a consensual amendment and extension to its debt facilities. This included a reduction to the principal and interest on the convertible loan due to us from Archer, in exchange for a reduced stock conversion price and removal of certain restrictions regarding the sale or conversion of the loan (see Note 31 - "Related party transactions" for details of loan). Following the amendment, the principal due on the loan would be $13 million and the stock conversion price would decrease from $2.083 per share to $0.40. The maturity date of the loan would also extend to April 1, 2024. The transaction is subject to execution of final agreements and completion of closing conditions.
v3.20.1
Accounting policies (Policies)
 12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Basis of presentation
Basis of presentation
The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar ("U.S. dollar" or "US$") rounded to the nearest million, unless otherwise stated.
The accompanying Consolidated Financial Statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which we control, or directly or indirectly holds more than 50% of the voting control are consolidated in the Consolidated Financial Statements, as well as certain variable interest entities of which we are deemed to be the primary beneficiary.
Basis of consolidation
Basis of consolidation
The Consolidated Financial Statements include the revenue, expenses, assets and liabilities of our principal holding company, our majority owned and controlled subsidiaries and certain variable interest entities (“VIE”s) in which we are deemed to be the primary beneficiary. Subsidiaries, even if fully owned, would be excluded from the Consolidated Financial Statements if we are not deemed to be the primary beneficiary as assessed under the variable interest model. All intercompany balances and transactions have been eliminated on consolidation.
A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic success, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. We have certain investments in the common stock or in-substance common stock of associated companies.
Bankruptcy accounting
Bankruptcy accounting
As set out in Note 4 - Chapter 11 Proceedings, we operated as a debtor-in-possession from September 12, 2017 to July 2, 2018. During this period, we prepared our Consolidated Financial Statements under Accounting Standards Codification 852, Reorganizations ("ASC 852"). ASC 852 required that the financial statements distinguished transactions and events that were directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings were recorded in “Reorganization items" on our Consolidated Statements of Operations. In addition, ASC 852 required changes in the accounting and presentation of significant items on the Consolidated Balance Sheets, particularly liabilities. Pre-petition obligations that may have been impacted by the Chapter 11 reorganization process were classified on the Consolidated Balance Sheets within "Liabilities subject to compromise". 
Fresh Start Reporting
Fresh Start Reporting
Upon emergence from bankruptcy on July 2, 2018 (the "Effective Date"), in accordance with ASC 852 related to fresh start reporting, Seadrill Limited became a new entity for financial reporting purposes. Upon adoption of fresh start reporting, our assets and liabilities were recorded at their fair values. We elected to apply fresh start reporting effective July 2, 2018 (the “Convenience Date”) to coincide with the timing of our normal third quarter reporting period. We evaluated and concluded that events between July 1, 2018 and July 2, 2018 were immaterial and use of an accounting convenience date was appropriate. The fair values of our assets and liabilities differed materially from the recorded values of our assets and liabilities as reflected in the Predecessor historical Consolidated Balance Sheets. The effects of the Plan and the application of fresh start accounting were applied as of July 2, 2018 and the new basis of our assets and liabilities are reflected in our Consolidated Balance Sheet as of December 31, 2018 and the related adjustments thereto were recorded in the Consolidated Statement of Operations of the Predecessor as "Reorganization items", with the related predominantly deferred tax effects through "Income tax expense", during the period from January 1, 2018 through July 1, 2018.
Accordingly, our Consolidated Financial Statements subsequent to July 2, 2018 are not and will not be comparable to the Predecessor Consolidated Financial Statements prior to the Convenience Date. Our Consolidated Financial Statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented on July 2, 2018 and dates prior. Our financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material.
Out of period adjustment
Out of period adjustment
The financial statements for the period from January 1, 2018 through July 1, 2018 (Predecessor) include an income tax expense of $18 million due to an adjustment in the income tax charge for a subsidiary related to prior years. We considered the effect of this prior period correction not to be material in the context of the overall results for the period from January 1, 2018 through July 1, 2018 (Predecessor), the year ended December 31, 2017 (Predecessor), or to any previously reported quarterly or annual financial statements.
Use of estimates
Use of estimates
Preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Foreign currencies
Foreign currencies
The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby the Statement of Operations are translated using the average exchange rate for the 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 assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations.
Related parties
Related parties
Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. Refer to Note 31 – Related Party Transactions.
Revenue from contracts with customers, and contract assets and liabilities
Contract assets and liabilities
Accounts receivables (see above) are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. If we are required to recognize revenue ahead of this point, we categorize the balance as a contract asset. Contract asset balances consist primarily of demobilization revenues which have been recognized during the period but are contingent on future demobilization activities.
Contract liabilities include payments received for mobilization as well as rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract.
Revenue from contracts with customers
The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments.
We recognize consideration for activities that correspond to a distinct time increment within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment, ratably over the estimated contract term.
We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess these estimates each reporting period as required. Refer to Note 7 - Revenue from Contracts with Customers.
Dayrate drilling revenue - Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term, and therefore, recognized in line with the contractual rate billed for the services provided for any given hour.
Mobilization revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract.
Demobilization revenue - We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions.
Revenues related to reimbursable expenses - We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations.
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
Other revenues consist of related party revenues, external management fees, and early termination fees. Refer to Note 8 – Other revenues.
Management fees - Revenues related to operation support and management services provided to Seadrill Partners, Seamex, Sonadrill & Northern Drilling. This includes both related and non-related companies.
Early termination fees - Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved.
Vessel and Rig Operating Expenses
Vessel and Rig Operating Expenses
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
Mobilization and demobilization expenses
We incur costs to prepare a drilling unit for a new customer contract and to move the rig to a new contract location. We capitalize the mobilization and preparation costs for a rig's first contract as a part of the rig value and recognize them as depreciation expense over the expected useful life of the rig (i.e. 30 years). For subsequent contracts, we defer these costs over the expected contract term (see deferred contract costs above), unless we don't expect the costs to be recoverable, in which case we expense them as incurred.
We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. 
Repairs, maintenance and periodic surveys
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 Bermudan company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – Taxation.
The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authorities widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments.
Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs.
Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards.
Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted.
Loss per share
Loss per share
Basic loss per share (“LPS”) is calculated based on the loss for the period available to common stockholders 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.
Current and non-current classification
Current and non-current classification
Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments whose fair value is a net liability as current.
Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal and we classify any derivatives financial instruments whose fair value is a net asset as current.
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less.
Restricted cash
Restricted cash
Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets.
Receivables
Receivables
Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. We establish reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, we consider the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. Interest income on receivables is recognized as earned.
Equity investments
Equity investments
Investments in common stock are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are also considered. We classify our other equity investments either as "Marketable Securities" or "Investments in Associated Companies" depending on their nature. We classify our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies". We record gains or losses on investments held fair value as "Loss on Marketable Securities". Refer to Note 15 – Marketable securities and Note 18 – Investment in associated companies.
We analyze our equity method investments for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs.
All other equity investments, which consist of investments that do not gives us the ability to exercise significant influence as well as investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. If we can’t readily ascertain the fair value, we record the investment at cost less impairment.  We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that indicates that the investment's is impaired. If an event or change in circumstances has occurred in that period that indicates that the investment's is impaired, then we record an impairment charge for the difference between the estimated fair value of the investment and its carrying amount.
For periods before we adopted ASU 2016-01, we reviewed our marketable securities for other-than-temporary impairment at each reporting date.
Newbuildings
Newbuildings
Generally, the carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components usually include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. During construction, capitalized interest of newbuildings is based on accumulated expenditures for the applicable project at our current rate of borrowing. The amount of interest expense capitalized in an accounting period is determined by applying the interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period.
Capitalized interest
We don't capitalize amounts beyond the actual interest expense incurred in the period.
We ceased capitalization of interest on newbuildings when we operated as a debtor-in-possession as interest payments made during bankruptcy proceedings were treated as adequate protection payments.
Drilling units
Drilling units
Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jack-up rigs, when new, is 30 years. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Refer to Note 20 – Drilling units.
Drilling units recognized through a business combination or through the application of fresh start accounting are measured at fair value as of the date of acquisition or the date of emergence, respectively. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations.
Assets held for sale
Assets held for sale
Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Equipment
Equipment
Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between 3 and 5 years depending on the type of asset.
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. 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 will adjust the measurement of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over lease term using the interest method. After commencement date, we will subsequently adjust the measurement of the ROU asset by amortizing 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 will determine whether a ROU asset is impaired and shall recognize any impairment loss in accordance with the company policy on impairment of long-lived assets. If a ROU asset is determined to be impaired, then it will be measured at its carrying amount immediately after the impairment less any accumulated amortization. After a ROU asset has been impaired, we will unwind the remaining asset on a straight-line basis over the remaining lease term.
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 result from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, will be the amount which the carrying value of the asset exceeds the discounted future net cash flows.
Other intangible assets and liabilities
Other intangible assets and liabilities
Intangible assets and liabilities were recorded at fair value on the date of emergence less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. For periods after emergence we have applied a new accounting policy to classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 17 – Other assets. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 23 – Other liabilities.
Derivative financial instruments and hedging activities
Derivative financial instruments and hedging activities
None of our derivative financial instruments have been formally designated as a hedging instruments, and therefore are recorded at fair value. 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 payables
Trade payables are recorded in the balance sheet to recognize a liability to a supplier for a good or service they have provided us.
Deferred charges
Deferred charges
Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan and the amortization is included in interest expense. On emergence from Chapter 11, our loan costs were reduced to nil and we recorded a discount against our debt to reduce its carrying value to equal its fair value. The debt discount will be unwound over the remaining terms of the debt facilities.
Debt
Debt
We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we will incur a liability for the principal to be repaid. On emergence from Chapter 11, we issued new debt instruments and the carrying values of our third-party debt liabilities were adjusted to fair value.
Pension benefits
Pension benefits
We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We record the service cost, as “Vessel and rig operating expenses” or as "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. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. 
Loss contingencies
Loss contingencies
We 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 shares
Treasury shares are recognized at cost as a component of equity. We record the nominal value of treasury shares purchased as a reduction in share capital. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. On emergence from Chapter 11, we no longer had any treasury shares.
Share-based compensation
Share-based compensation
Since emerging from Chapter 11, we have made several awards under our employee benefit plan (see Note 29 – Share based compensation). We record an accounting charge equal to the fair value of awards that are expected to vest. The expense is classified as compensation cost and recognized ratably over the vesting period. The offsetting entry is recorded directly to equity.
Recently adopted and issued accounting standards
1) Recently adopted accounting standards
We adopted the following accounting standard updates ("ASUs") in the year:
a) ASU 2016-02 Leases (also 2018-10, 2018-11, 2018-20, 2019-01 & 2019-10)
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years using a modified retrospective application.
We transitioned to the new standard using the modified retrospective approach as permitted by the standard. We determined that our drilling contracts contain a lease component (from a lessor perspective) as well as a revenue component. We have elected to apply the practical expedient provided to lessors and will not separate the lease and nonlease components within our drilling contracts. We will continue to apply the Topic 606 to our drilling contracts instead of Topic 842 because the nonlease component is the predominant component within our drilling contracts. As a result, our pattern of revenue recognition did not change significantly compared to prior accounting standards due to the adoption of this update.
In addition, within our operating leases, where we are lessees, we elected not to separate nonlease components from lease components and instead we account for each separate lease component and the nonlease components associated with that lease component as a single lease component in accordance with Topic 842. We have also elected not to apply the recognition requirements in Topic 842 to short-term leases, being leases lasting less than one year. Instead, we recognize short-term lease payments in our Consolidated Statement of Operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.
We recognized an aggregate lease liability of $25 million and a right-of-use asset of $23 million on adoption on January 1, 2019. There was no impact to our opening retained earnings as a result of adopting this update. Prior period amounts are not adjusted and continue to be reported in accordance with the previous guidance in Topic 840.
b) 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 2018-07 Compensation - Stock compensation (Topic 718)
•
ASU 2018-16 Derivatives and Hedging (Topic 815)
2) Recently issued accounting standards
We have kept abreast of 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 2016-13 - Financial Instruments - Measurement of Credit Losses (Also 2019-04, 2019-05, 2019-10 & 2019-11)
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach to estimate expected lifetime credit losses (CECL model) on financial assets ranging from short term trade accounts receivable to long-term financings and modifies the impairment model for available-for-sale debt securities. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which provides additional guidance on the accounting for credit losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides transition guidance for entities to elect the fair value option of certain financial instruments. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted only from January 1, 2019. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as at the beginning of the first reporting period in which the guidance is adopted.
We are in the process of evaluating the impact of this standard update. Financial assets held by us subject to evaluation under the CECL model include our external trade receivables and related party receivables (See Note 31 for details). Our external customers are international oil companies, national oil companies and large independent oil companies with high credit standing and with whom we have had a low incidence of bad debt expense. Therefore we do not expect this guidance to create any significant reserve on our external receivables. We are however expecting to establish an allowance on our loans and trade receivables due from related parties under the new guidance to reflect the current financial position of the counterparties. We estimate that we will record an initial reserve in the range of $75 - $135 million, which will be booked in a credit loss allowance account as an offset to equity. The allowance will be reassessed quarterly with any adjustment to the reserve recorded as credit loss expense in the P&L.
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 update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The guidance is expected to result in the following additional disclosures; 1) 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; 2) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements; 3) For recurring fair value measurements categorized within Level 3 of the fair value hierarchy, a reconciliation from the opening balances to the closing balances for each class of assets and liabilities, except for derivative assets and liabilities, which may be presented net. We continue to evaluate the impact of this standard update on our consolidated financial statements and related disclosures.
c) ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans
In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
d) ASU 2018-15 Intangibles
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force). The update is intended to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
e) ASU 2018-17 Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities
In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The update is intended to improve general purpose financial reporting by considering indirect interests held through related parties in common control arrangements on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
f) ASU 2019-08 Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)
In November 2019, the FASB issued ASU 2019-08. The amendments in this Update require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction of the transaction price is required to be measured on the basis of the grant-date fair value of the share-based payment award in accordance with Topic 718, not as a reduction of transaction price at contract inception under ASC 606. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
g) 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 for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
h) Other accounting standard updates issued by the FASB
As of February 29, 2019, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods.
v3.20.1
Chapter 11 Proceedings (Tables)
 12 Months Ended
Dec. 31, 2019
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
%
 
 
 
 
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

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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Professional and advisory fees
—

 
(9
)
 
 
(187
)
 
(66
)
New investor commitment fees
—

 
—

 
 
—

 
(53
)
Loss on Newbuilding global settlement claim
—

 
—

 
 
—

 
(1,064
)
Loss on other pre-petition allowed claims
—

 
—

 
 
—

 
(3
)
Gain on liabilities subject to compromise
—

 
—

 
 
2,958

 
—

Fresh start valuation adjustments
—

 
—

 
 
(6,142
)
 
—

Write-off of debt issuance costs
—

 
—

 
 
—

 
(66
)
Reversal of credit risk on derivatives
—

 
—

 
 
—

 
(89
)
Interest income on surplus cash invested
—

 
—

 
 
6

 
4

Total reorganization items, net
—

 
(9
)
 
 
(3,365
)
 
(1,337
)
v3.20.1
Fresh Start Accounting (Tables)
 12 Months Ended
Dec. 31, 2019
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:
 
Successor

 
Successor

Ownership percentage
December 31, 2019

 
December 31, 2018

Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b)
(a)

 
(a)

Seabras Sapura (b)
50.0
%
 
50.0
%
SeaMex Ltd. ("SeaMex") (b)
50.0
%
 
50.0
%
Sonadrill (b)
50.0
%
 
—
%
Gulfdrill (b)
50.0
%
 
—
%

(a) 
Refer to the Seadrill Partners subsidiaries paragraph below for additional information.
(b) 
For transactions with related parties refer to Note 31 - Related party transactions.
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)
As at July 2, 2018

Distributable value
11,056

Less: non-controlling interest
(154
)
Less: fair value of debt
(7,301
)
Less: fair value of other non-operating liabilities
(108
)
Add: fair value of tax attributes
8

Fair value of Successor common stock issued upon emergence
3,501

 
 
Shares issued and outstanding on July 2, 2018
100.0

Per share value
35.01
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)
As at July 2, 2018

Distributable value
11,056

Add: other working capital liabilities
478

Add: other non-current operating liabilities
57

Add: fair value of tax attributes
8

Add: redeemable non-controlling interest
30

Total reorganization value
11,629
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.
 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

ASSETS
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
Cash and cash equivalents
809

 
790

(a)
—

 
1,599

Restricted cash
409

 
169

(a)
—

 
578

Marketable securities
121

 
—

 
—

 
121

Accounts receivable, net
272

 
—

 
—

 
272

Amount due from related parties - current
181

 
—

 
14

(l)
195

Other current assets
247

 
—

 
181

(m)
428

Total current assets
2,039

 
959

 
195

 
3,193

Investment in associated companies
1,615

 
—

 
(687
)
(n)
928

Newbuildings
249

 
—

 
(249
)
(o)
—

Drilling units
12,531

 
—

 
(5,734
)
(p)
6,797

Deferred tax assets
8

 
—

 
—

 
8

Equipment
35

 
—

 
(6
)
(q)
29

Amount due from related parties - non-current
565

 
—

 
11

(r)
576

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

 
As of July 1, 2018
(In $ millions)
Predecessor Company

 
Reorganization Adjustments

 
Fresh Start Adjustments

 
Successor Company

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 shares of common stock at a per share price of $8.42 in connection with the equity commitment, 55 million shares of common stock with estimated fair value of $35.01 per share issued in connection with the debt commitment, 14 million shares of common stock issued to the holders of general unsecured claims at an estimated fair value of $35.01 per share, 2 million shares of common stock issued to former holders of Predecessor equity at an estimated fair value of $35.01 per share, and 5 million shares of common stock issued for structuring fees to the select commitment parties and Hemen at an estimated fair value of $35.01 per share.
(k)
As determined in the Plan, NADL and Sevan became wholly owned subsidiaries and the non-controlling interests of NADL and Sevan were eliminated.

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)
 
 
 
 
 
 
 
As at 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 shares of common stock issued in connection with the equity commitment from $8.42 to $35.01 per share.
(bb)
Adjustment to record the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited to fair value.
v3.20.1
Segment information (Tables)
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Schedule of segment results
Segment results are evaluated on the basis of operating income and the information given below is based on information used for internal management reporting.

Total operating revenue
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
686

 
322

 
 
482

 
1,387

Jack-up rigs
362

 
167

 
 
193

 
617

Other
340

 
52

 
 
37

 
84

Total
1,388

 
541

 
 
712

 
2,088


Depreciation
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
346

 
190

 
 
298

 
601

Jack-up rigs
80

 
46

 
 
93

 
197

Total
426

 
236

 
 
391

 
798

Amortization of intangibles
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
106

 
37

 
 
—

 
—

Jack-ups
28

 
21

 
 
—

 
—

Total
134

 
58

 
 
—

 
—



Operating profit/(loss) - net loss
 
Successor


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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
(340
)
 
(161
)
 
 
(446
)
 
(622
)
Jack-up Rigs
23

 
(16
)
 
 
(167
)
 
(112
)
Other
22

 
2

 
 
—

 
6

Operating loss
(295
)
 
(175
)
 
 
(613
)
 
(728
)
Unallocated items:
 

 
 

 
 
 
 
 

Total financial items and other
(966
)
 
(422
)
 
 
(3,242
)
 
(2,308
)
Loss before income taxes
(1,261
)
 
(597
)
 
 
(3,855
)
 
(3,036
)

Drilling assets - Total assets

Total assets by operating segment are as follows:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Floaters
5,297

 
5,508

Jack-up Rigs
1,104

 
1,151

Total Drilling Units and Newbuildings
6,401

 
6,659

 
 
 
 
Unallocated items:
 
 
 
Investments in Associated companies
389

 
800

Marketable securities
11

 
57

Cash and restricted cash
1,357

 
2,003

Other assets
1,121

 
1,329

Total
9,279

 
10,848


Drilling units - Capital expenditures (1) 

Capital expenditure by operating segment are as follows:

 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Floaters
139

 
74

 
 
93

 
128

Jack-ups
23

 
24

 
 
24

 
22

Total
162

 
98

 
 
117

 
150

(1) 
The successor periods include additions to equipment
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Norway
469

 
117

 
 
82

 
219

Nigeria
198

 
108

 
 
105

 
193

Brazil
137

 
91

 
 
188

 
358

Saudi Arabia
130

 
78

 
 
79

 
159

United States
74

 
34

 
 
30

 
291

Angola
215

 
29

 
 
100

 
482

Others (1)
165

 
84

 
 
128

 
386

Total Revenue
1,388

 
541

 
 
712

 
2,088

(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:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Norway
1,818

 
1,326

Malaysia
805

 
1,070

USA
644

 
658

Spain
615

 
875

Brazil
332

 
688

Others (2)
2,187

 
2,042

Total
6,401

 
6,659


(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 ended December 31, 2019, the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor), we had the following customers with total revenues greater than 10% in any of the years presented:

 
Successor
 
 
Predecessor
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Total
18
%
 
24
%
 
 
19
%
 
23
%
Equinor
16
%
 
7
%
 
 
5
%
 
4
%
Northern Drilling
12
%

—
%
 
 
—
%
 
—
%
ConocoPhillips
11
%
 
13
%
 
 
8
%
 
6
%
Saudi Aramco
10
%
 
14
%
 
 
11
%
 
8
%
Petrobras
7
%
 
10
%
 
 
23
%
 
17
%
LLOG
4
%
 
6
%
 
 
4
%
 
14
%
ExxonMobil
—
%
 
—
%
 
 
10
%
 
7
%
v3.20.1
Revenue from Contracts with Customers (Tables)
 12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Schedule of contract assets and contract liabilities from contracts with customers
Significant changes in the contract assets and the contract liabilities balances during the period from January 1, 2018 through July 1, 2018 (Predecessor) and period from July 2, 2018 through December 31, 2018 (Successor) are as follows:
(In $ millions)
  
Contract Assets
 
Contract Liabilities
 
Net Contract
Balances
Net contract liability at January 1, 2018 (Predecessor)
  
7

 
(55
)
 
(48
)
Amortization of revenue that was included in the beginning contract liability balance
  
—

 
25

 
25

Cash received, excluding amounts recognized as revenue
 
—

 
(2
)
 
(2
)
Cash received against the beginning contract asset balance
  
(7
)
 
—

 
(7
)
Contract assets recognized during the period
  
9

 
—

 
9

Net contract liability at July 1, 2018 (Predecessor)
  
9

 
(32
)
 
(23
)
Fresh start adjustments
 
—

 
32

 
32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net contract asset at July 2, 2018 (Successor)
  
9

 
—

 
9

Cash received, excluding amounts recognized as revenue
 
—


(21
)

(21
)
Cash received against the beginning contract asset balance
  
(9
)

—


(9
)
Contract assets recognized during the period
  
1

 
—

 
1

Net contract liability at December 31, 2018 (Successor)
  
1

 
(21
)
 
(20
)

Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2019 (Successor) are as follows:
(In $ millions)
  
Contract Assets
 
Contract Liabilities
 
Net Contract
Balances
Net contract liability at January 1, 2019 (Successor)
  
1

 
(21
)
 
(20
)
Amortization of revenue that was included in the beginning contract liability balance
  
—

 
14

 
14

Cash received, excluding amounts recognized as revenue
 
—

 
(22
)
 
(22
)
Cash received against the beginning contract asset balance
  
(1
)
 
—

 
(1
)
Contract assets recognized during the period
  
—

 
—

 
—

Net contract liability at December 31, 2019 (Successor)
  
—

 
(29
)
 
(29
)

The following table provides information about receivables, contract assets and contract liabilities from our contracts with customers:
 
 
Successor
 
Successor
(In $ millions)
 
December 31, 2019

 
December 31, 2018

Accounts receivable, net
 
173

 
208

Current contract assets (1)
 
—

 
1

Non-current contract assets (1)
 
—

 
—

Current contract liabilities (deferred revenues) (1)
 
(20
)
 
(12
)
Non-current contract liabilities (deferred revenues) (1)
 
(9
)
 
(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, 2019 (Successor).

v3.20.1
Other revenues (Tables)
 12 Months Ended
Dec. 31, 2019
Revenues [Abstract]  
Other revenues
Other revenues consist of the following:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Related party management fees
109

 
46

 
 
43

 
110

Other management fees
6

 
—

 
 
—

 
1

Leasing revenues
1

 
—

 
 
—

 
—

Amortization of unfavorable contracts
—

 
—

 
 
21

 
43

Early termination fees
11

 
—

 
 
8

 
8

Total other revenues
127

 
46

 
 
72

 
162
v3.20.1
Other operating items (Tables)
 12 Months Ended
Dec. 31, 2019
Other Operating Income (Loss) [Abstract]  
Other operating items
Other operating items consist of the following:
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Impairment of long lived assets (i)
—

 
—

 
 
(414
)
 
(696
)
Loss on disposals (ii)
—

 
—

 
 
—

 
(245
)
Other operating income (iii)
39

 
21

 
 
7

 
27

Total other operating items
39

 
21

 
 
(407
)
 
(914
)
Schedule of disposals
There was a loss on disposal for the year ended December 31, 2017 (Predecessor) which comprised the following:
(In $ millions)
 
Net proceeds/recoverable amount

 
Book value on
disposal

 
Loss

Sale of West Triton
75

 
109

 
(34
)
Sale of West Mischief
75

 
146

 
(71
)
Sale of West Resolute
75

 
136

 
(61
)
Disposal of Sevan Developer contract
—

 
75

 
(75
)
Sale of West Rigel
126

 
128

 
(2
)
Other
—

 
2

 
(2
)
Total for year ended December 31, 2017 (Predecessor)
351

 
596

 
(245
)
Other operating income
 
 
Successor
 
 
Predecessor
 (In $ millions)
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31, 2017

Loss of hire insurance settlement (a)
 
10

 
—

 
 
—

 
—

Receipt of overdue receivable (b)
 
26

 
21

 
 
—

 
—

Contingent consideration (c)
 
—

 
—

 
 
7

 
27

Settlement with shipyard
 
3

 
—

 
 
—

 
—

Total other operating income
 
39

 
21

 
 
7

 
27

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 receivable
Receipt of overdue receivables which had not been recognized as an asset as part of fresh start accounting.
c) Contingent consideration
Am
v3.20.1
Interest expense (Tables)
 12 Months Ended
Dec. 31, 2019
Interest Expense [Abstract]  
Net interest expense
Interest expense consists of the following:
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Cash and payment-in-kind interest on debt facilities
(440
)
 
(237
)
 
 
(37
)
 
(286
)
Unwind of discount debt
(47
)
 
(24
)
 
 
—

 
—

Loan fee amortization
—

 
—

 
 
(1
)
 
(27
)
Capitalized interest
—

 
—

 
 
—

 
28

Interest expense
(487
)
 
(261
)
 
 
(38
)
 
(285
)
1) 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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Senior credit facilities and unsecured bonds
(327
)
 
(162
)
 
 
(116
)
 
(320
)
Less: adequate protection payments
—

 
—

 
 
104

 
81

Senior Secured Notes
(66
)
 
(50
)
 
 
—

 
—

Debt of consolidated variable interest entities
(47
)
 
(25
)
 
 
(25
)
 
(47
)
Cash and payment-in-kind interest
(440
)
 
(237
)
 
 
(37
)
 
(286
)
v3.20.1
Impairment loss on investments in associated companies (Tables)
 12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of impairment on marketable securities and investments
We have recognized the following impairments on investments in associated companies:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018


 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
—

 
 
—

 
723

Seadrill Partners - Subordinated units
—

 
—

 
 
—

 
82

Seadrill Partners - Seadrill member interest and IDRs
54

 
—

 
 
—

 
—

SeaMex Limited
—

 
—

 
 
—

 
36

Total impairment of investments in associated companies and joint ventures
302

 
—

 
 
—

 
841


 
 
 
 
 
 
 
 
Total impairment of investments
302

 
—

 
 
—

 
841

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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
82

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

 
22

Seabras Sapura
29

 
24

 
 
46

 
80

SeaMex
(19
)
 
(12
)
 
 
4

 
—

Sonadrill
(1
)
 
—

 
 
—

 
—

Archer
—

 
—

 
 
—

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

 
174
v3.20.1
Taxation (Tables)
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of income taxes
Income taxes consist of the following:

 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Current tax (benefit)/expense:
 
 
 
 
 
 
 
 
Bermuda
—

 
—

 
 
—

 
—

Foreign
22

 
30

 
 
34

 
56

Deferred tax (benefit)/expense:
 
 
 
 
 
 
 
 
Bermuda
—

 
—

 
 
—

 
—

Foreign
(61
)
 
(22
)
 
 
(4
)
 
10

Total tax (benefit)/expense
(39
)
 
8

 
 
30

 
66

Effective tax rate
3.1
%
 
(1.3
)%
 
 
(0.8
)%
 
(2.2
)%
Schedule of income tax reconciliation
The income taxes for the year ended December 31, 2019 (Successor), the period from July 2, 2018 through December 31, 2018 (Successor), the period from January 1, 2018 through July 1, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor) differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Income taxes at statutory rate
—

 
—

 
 
—

 
—

Effect of change on unrecognized tax benefits
(6
)
 
49

 
 
12

 
(5
)
Effect of unremitted earnings of subsidiaries
(17
)
 
(10
)
 
 
—

 
3

Effect of taxable income in various countries
(16
)
 
(31
)
 
 
18

 
68

Total tax (benefit)/expense
(39
)
 
8

 
 
30

 
66
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:
 
Successor

 
Successor

(In $ millions)
December 31,
2019

 
December 31,
2018

Pensions and stock options
2

 
4

Provisions
30

 
28

Net operating losses carried forward
259

 
263

Gross deferred tax assets
291

 
295

Valuation allowance
(255
)
 
(254
)
Deferred tax assets, net of valuation allowance
36

 
41


Deferred tax liabilities:
 
Successor

 
Successor

(In $ millions)
December 31,
2019

 
December 31,
2018

Property, plant and equipment
30

 
49

Unremitted Earnings of Subsidiaries
10

 
27

Intangibles
4

 
34

Gross deferred tax liabilities
44

 
110

Net deferred tax liability
(8
)
 
(69
)
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Balance at the beginning of the period
132

 
61

 
 
55

 
44

Increases as a result of positions taken in prior periods
8

 
69

 
 
7

 
23

Increases as a result of positions taken during the current period
29

 
18

 
 
1

 
—

Decreases as a result of positions taken in prior periods
(34
)
 
(9
)
 
 
(2
)
 
(9
)
Decreases as a result of positions taken in the current period
—

 
—

 
 
—

 
—

Decreases due to settlements
(46
)
 
(7
)
 
 
—

 
(3
)
Balance at the end of the period
89

 
132

 
 
61

 
55
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
2015
Brazil
2008
v3.20.1
Loss per share (Tables)
 12 Months Ended
Dec. 31, 2019
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Net loss attributable to the parent
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
Less: Allocation to participating securities
—

 
—

 
 
—

 
—

Net loss available to stockholders
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
Effect of dilution
—

 
—

 
 
—

 
—

Diluted net loss available to stockholders
(1,219
)
 
(602
)
 
 
(3,881
)
 
(2,973
)
The components of the denominator for the calculation of basic and diluted LPS are as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Basic loss per share:
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
100

 
100

 
 
504

 
505

Diluted loss per share:
 

 
 

 
 
 
 
 

Effect of dilution
—

 
—

 
 
—

 
—

Weighted average number of common shares outstanding adjusted for the effects of dilution
100

 
100

 
 
504

 
505


The basic and diluted loss per share are as follows:
 
Successor
 
 
Predecessor
(In $)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Basic loss per share
(12.18
)
 
(6.02
)
 
 
(7.71
)
 
(5.89
)
Diluted loss per share
(12.18
)
 
(6.02
)
 
 
(7.71
)
 
(5.89
)
v3.20.1
Restricted cash (Tables)
 12 Months Ended
Dec. 31, 2019
Restricted Cash and Investments [Abstract]  
Schedule of restricted cash
Restricted cash consists of the following:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Accounts pledged as collateral for Senior Secured Notes (1)
24

 
328

Accounts pledged as collateral for performance bonds and similar guarantees
104

 
101

Demand deposit pledged as collateral for tax related guarantee (2)
83

 
—

Other
31

 
32

Total restricted cash
242

 
461



(1) 
The balance as at December 31, 2018 was used to repurchase Senior Secured Notes on April 10, 2019 (see Note 22 - Debt for further details). In 2019, Seabras Sapura repaid $24 million of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of Senior Secured Notes. This is held as non-current within the Consolidated Balance Sheet.
(2) 
We placed a total of 330 million Brazilian Reais of collateral with BTG Bank under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet.

Restricted cash is presented in our Consolidated Balance Sheets as follows:
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Current restricted cash
135

 
461

Non-current restricted cash
107

 
—

Total restricted cash
242

 
461
v3.20.1
Marketable securities (Tables)
 12 Months Ended
Dec. 31, 2019
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.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Seadrill Partners - Common units
 
2

 
45

Archer
 
9

 
12

Total marketable securities
 
11

 
57
Gross Realized Gains and Losses Related to Marketable Securities
The below table shows the gain and losses recognized through net income for the periods presented in this report since the adoption of ASU 2016-01.
 
 
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

Seadrill Partners - Common Units - unrealized loss on marketable securities
 
(43
)
 
(45
)
 
 
(5
)
Archer - unrealized (loss)/gain on marketable securities
 
(3
)
 
(19
)
 
 
2

Total unrealized loss on marketable securities
 
(46
)
 
(64
)
 
 
(3
)
The below table shows the gain and losses recognized through other comprehensive income for the periods presented in this report before the adoption of ASU 2016-01.
 
 
Predecessor

(In $ millions)
 
Year ended December 31, 2017

Seadrill Partners - Common Units - unrealized loss on marketable securities
 
(14
)
Archer - unrealized gain on marketable securities
 
28

Total unrealized gain on marketable securities
 
14
v3.20.1
Accounts receivable (Tables)
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Bad debt expense
The below table sets out the bad debt expense incurred for the periods presented in this report.
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Bad debt expense
—

 
—

 
 
48

 
—

Total bad debt expense
—

 
—

 
 
48

 
—
v3.20.1
Other assets (Tables)
 12 Months Ended
Dec. 31, 2019
Other Assets [Abstract]  
Schedule of other assets
As at December 31, 2019 and 2018 (Successor), other assets included the following: 
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019


As at December 31,
2018

Favorable drilling and management services contracts
33

 
186

Taxes receivable
38

 
50

Prepaid expenses
33

 
32

Right of use asset
35

 
—

Reimbursable amounts due from customers (1)
21

 
10

Deferred contract costs
12

 
15

Derivative asset - interest rate cap (2)
3

 
39

Insurance receivable (3)
14

 
1

Other
28

 
25

Total other assets
217

 
358

(1) Includes related party balances of $5 million from Northern Drilling. For further information refer to Note 31 - Related party transactions.
(2) Refer to Note 32 - Financial instruments and risk management.
(3) In January 2019, there was a loss incident on the Sevan Louisiana related to a malfunction of its subsea equipment. As of December 31, 2019, we have incurred $19 million of costs to repair the equipment, of which $4 million has been recovered and an additional $14 million will be recoverable under our physical damage insurance.

Other assets are presented in our Consolidated Balance Sheets as follows:
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Other current assets
158

 
322

Other non-current assets
59

 
36

Total other assets
217

 
358
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:
 
 
As at December 31, 2019
 
As at December 31, 2018
(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

(101
)
186

 
287

—

287

Amortization of favorable contracts
 
—

(153
)
(153
)
 
—

(101
)
(101
)
Balance at end of period
 
287

(254
)
33

 
287

(101
)
186
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:
 
 
Period ended December 31,
(In $ millions)
 
2020

2021

2022

2023

2024 and after

Total

Amortization of favorable contracts
 
2

2

2

2

25

33
v3.20.1
Investment in associated companies (Tables)
 12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of ownership percentages in associated companies
The cash flows were estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant WACC as follows:
Investment
WACC

Seadrill Capricorn Holdings LLC
11.4
%
Seadrill Operating LP
12.0
%
Seadrill Deepwater Drillship Ltd
12.0
%
Seabras Sapura Holding
14.3
%
Seabras Sapura Participacoes
13.7
%
SeaMex
12.7
%
We have the following investments in associated companies:
 
Successor

 
Successor

Ownership percentage
December 31, 2019

 
December 31, 2018

Seadrill Partners and Seadrill Partner subsidiaries ("SDLP investments") (a) (b)
(a)

 
(a)

Seabras Sapura (b)
50.0
%
 
50.0
%
SeaMex Ltd. ("SeaMex") (b)
50.0
%
 
50.0
%
Sonadrill (b)
50.0
%
 
—
%
Gulfdrill (b)
50.0
%
 
—
%

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

 
Period from July 2, 2018 through December 31, 2018


 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
—

 
 
—

 
723

Seadrill Partners - Subordinated units
—

 
—

 
 
—

 
82

Seadrill Partners - Seadrill member interest and IDRs
54

 
—

 
 
—

 
—

SeaMex Limited
—

 
—

 
 
—

 
36

Total impairment of investments in associated companies and joint ventures
302

 
—

 
 
—

 
841


 
 
 
 
 
 
 
 
Total impairment of investments
302

 
—

 
 
—

 
841

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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

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

 
82

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

 
22

Seabras Sapura
29

 
24

 
 
46

 
80

SeaMex
(19
)
 
(12
)
 
 
4

 
—

Sonadrill
(1
)
 
—

 
 
—

 
—

Archer
—

 
—

 
 
—

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

 
174
Summary of Consolidated Statements of Operations for our equity method investees
The results of the Direct ownership interests in the SDLP companies and our share in those results (net of tax) were as follows:
SDLP
Successor
 
 
Predecessor
(in $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
750

 
426

 
 
612

 
1,128

Net operating income
51

 
100

 
 
257

 
464

Net income
(187
)
 
(127
)
 
 
201

 
235

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

 
93

Amortization of basis differences
(15
)
 
(23
)
 
 
—

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

 
82

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

 
24

Amortization of basis differences
—

 
(5
)
 
 
—

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

 
22

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

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Operating revenues
434

 
232

 
 
241

 
487

Net operating income
198

 
124

 
 
125

 
244

Net income
113

 
88

 
 
92

 
160

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

 
44

 
 
46

 
80

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(20
)
 
 
—

 
—

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

 
24

 
 
46

 
80

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


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


Period from July 2, 2018 through December 31, 2018



Period from January 1, 2018 through July 1, 2018


Year ended December 31,
2017

Operating revenues
232

 
118

 
 
121

 
239

Net operating income
70

 
40

 
 
40

 
80

Net income
18

 
4

 
 
7

 
—

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

 
2

 
 
4

 
—

 
 
 
 
 
 
 
 
 
Amortization of basis differences
(28
)
 
(14
)
 
 
—

 
—

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

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

 
December 31, 2018

Current assets
833

 
1,110

Non-current assets
4,847

 
5,076

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

 
2,714

 
 
 
 
Seadrill share of book equity
1,305

 
1,399

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

 
99

SDLP book equity allocated to direct investments
122

 
479

 
 
 
 
SDLP book equity allocated to subordinated units (1)
—

 
17

(1) 
Seadrill Partners subordinated units have a lock-up period during which they have subordinated liquidation and dividend rights. On application of fresh start accounting the units were valued with reference to the market price of common units and adjusted for a discount for lack of marketability (because of the subordination period). The value of the subordinated units on application of fresh start accounting was $37 million. Since application of fresh start accounting we allocated a share of the net loss incurred by Seadrill Partners to the subordinated units using a Hypothetical Liquidation at Book Value methodology. We allocated a net loss of $20 million for the period from July 2, 2018 through December 31, 2018. After allocating this loss the remaining balance of the investment in subordinated units at December 31, 2018 was $17 million. We allocated a further net loss of $17 million for the year ended December 31, 2019. After allocating this loss the remaining balance of the investment in subordinated units was nil.
(2) 
In September 2019, an impairment of $302 million was recognized against the Seadrill Partners direct ownership interests and IDRs in the Consolidated Statements of Operations within "Loss on impairment of investments" (December 31, 2018 (Successor), nil). See Note 11 – Impairment loss on investments in associated companies.
The summarized balance sheets of the Seabras Sapura companies and our share of recorded equity in those companies was as follows:
Seabras Sapura
Successor
 
Successor
(in $ millions)
December 31, 2019

 
December 31, 2018

Current assets
195

 
255

Non-current assets
1,495

 
1,567

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

 
586

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

 
293

 
 
 
 
Shareholder loans held as equity (1)
123

 
132

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

 
178

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

 
209

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

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

 
December 31, 2018

Current assets
260

 
253

Non-current assets
939

 
977

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

 
454

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

 
227

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

 
171

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

 
41



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

 
December 31, 2018

Current assets
57

 
—

Non-current assets
—

 
—

Current liabilities
(9
)
 
—

Non-current liabilities
—

 
—

Net Assets
48

 
—

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

 
—

 
 
 
 
Book value of Seadrill investment
24

 
—
v3.20.1
Newbuildings (Tables)
 12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Newbuildings
Changes in drilling units for the periods presented in this report were as follows:
(In $ millions)



Opening balance as at January 1, 2018 (Predecessor)

248

Additions

1

Closing balance as at July 1, 2018 (Predecessor)

249

Fresh Start adjustments

(249
)
 
 
 
 
 
 
Balance as at July 2, 2018, December 31, 2018 and December 31, 2019 (Successor)
 
—

Changes in drilling units for the periods presented in this report were as follows:
 (In $ millions)
 
 
Cost

 
Accumulated depreciation

 
Net book value

Opening balance as at January 1, 2018 (Predecessor)
 
 
17,335

 
(4,119
)
 
13,216

Additions
 
 
117

 
—

 
117

Depreciation
 
 
—

 
(388
)
 
(388
)
Impairment
 
 
(414
)
 
—

 
(414
)
Closing balance as at July 1, 2018 (Predecessor)
 
 
17,038

 
(4,507
)
 
12,531

Fresh Start adjustments
 
 
(10,241
)
 
4,507

 
(5,734
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance as at July 2, 2018 (Successor)
 
 
6,797

 
—

 
6,797

Additions
 
 
93

 
—

 
93

Depreciation
 
 
—

 
(231
)
 
(231
)
Closing balance as at December 31, 2018 (Successor)
 
 
6,890

 
(231
)
 
6,659

Additions
 
 
158

 
—

 
158

Depreciation
 
 
—

 
(416
)
 
(416
)
Closing balance as at December 31, 2019 (Successor)
 
 
7,048

 
(647
)
 
6,401
v3.20.1
Drilling units (Tables)
 12 Months Ended
Dec. 31, 2019
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)



Opening balance as at January 1, 2018 (Predecessor)

248

Additions

1

Closing balance as at July 1, 2018 (Predecessor)

249

Fresh Start adjustments

(249
)
 
 
 
 
 
 
Balance as at July 2, 2018, December 31, 2018 and December 31, 2019 (Successor)
 
—

Changes in drilling units for the periods presented in this report were as follows:
 (In $ millions)
 
 
Cost

 
Accumulated depreciation

 
Net book value

Opening balance as at January 1, 2018 (Predecessor)
 
 
17,335

 
(4,119
)
 
13,216

Additions
 
 
117

 
—

 
117

Depreciation
 
 
—

 
(388
)
 
(388
)
Impairment
 
 
(414
)
 
—

 
(414
)
Closing balance as at July 1, 2018 (Predecessor)
 
 
17,038

 
(4,507
)
 
12,531

Fresh Start adjustments
 
 
(10,241
)
 
4,507

 
(5,734
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance as at July 2, 2018 (Successor)
 
 
6,797

 
—

 
6,797

Additions
 
 
93

 
—

 
93

Depreciation
 
 
—

 
(231
)
 
(231
)
Closing balance as at December 31, 2018 (Successor)
 
 
6,890

 
(231
)
 
6,659

Additions
 
 
158

 
—

 
158

Depreciation
 
 
—

 
(416
)
 
(416
)
Closing balance as at December 31, 2019 (Successor)
 
 
7,048

 
(647
)
 
6,401
v3.20.1
Equipment (Tables)
 12 Months Ended
Dec. 31, 2019
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

Opening balance as at January 1, 2018 (Predecessor)
 
 
84

 
(55
)
 
29

Additions
 
 
9

 
—

 
9

Depreciation
 
 
—

 
(3
)
 
(3
)
Closing balance as at July 1, 2018 (Predecessor)
 
 
93

 
(58
)
 
35

Fresh Start adjustments
 
 
(64
)
 
58

 
(6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opening balance as at July 2, 2018 (Successor)
 
 
29

 
—

 
29

Additions
 
 
5

 
—

 
5

Depreciation
 
 
—

 
(5
)
 
(5
)
Closing balance as at December 31, 2018 (Successor)
 
 
34

 
(5
)
 
29

Additions
 
 
4

 
—

 
4

Depreciation
 
 
—

 
(10
)
 
(10
)
Closing balance as at December 31, 2019 (Successor)
 
 
38

 
(15
)
 
23
v3.20.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Schedule of Debt and Balance Sheet Presentation
As at December 31, 2019 (Successor) and 2018 (Successor), we had the following liabilities for third party debt agreements:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Secured credit facilities
 
5,662

 
5,662

Senior Secured Notes
 
476

 
769

Credit facilities contained within variable interest entities
 
621

 
655

Total debt principal
 
6,759

 
7,086

Less: debt discount and fees
 
(136
)
 
(172
)
Carrying value
 
6,623

 
6,914


This was presented in our Consolidated Balance Sheet as follows.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Debt due within one year
 
343

 
33

Long-term debt
 
6,280

 
6,881

Total debt principal
 
6,623


6,914
Schedule of Credit Facilities, and Related Covenants and Restrictions
We have summarized the key terms of our secured credit facilities as at December 31, 2019 in the table below:
  Facility name
Maturity
Repayments before maturity ($m)

Final Repayment (3)
($m)

Total ($m)

Margin on LIBOR floating interest (2)
Collateral vessels
Book value of collateral vessels ($m)

Notes
$400 million facility
4Q 2022
47

88

135

3.50%
West Cressida West Callisto West Leda
150

 
$2,000 million facility
1Q 2023
248

660

908

3.00%
West Alpha West Venture West Phoenix West Navigator West Epsilon West Elara
732

 
$440 million facility
3Q 2023
23

41

64

4.25%
West Telesto
58

 
$1,450 million facility
4Q 2023
88

235

323

3.35%-4.00%
West Tellus
332

(2) 
$360 million facility
4Q 2023
73

137

210

3.75%
AOD I AOD II AOD III
191

(1) 
$300 million facility
1Q 2024
48

96

144

4.00%
West Tucana West Castor
107

 
$1,750 million facility
1Q 2024
299

576

875

3.50%-3.90%
Sevan Driller Sevan Brasil Sevan Louisiana
865

(2) 
$450 million facility
2Q 2024
54

211

265

3.50%
West Eminence
275

 
$1,500 million facility
4Q 2024
355

770

1,125

2.70%-4.78%
West Saturn West Neptune West Jupiter
1,020

(2) 
$1,350 million facility
4Q 2024
351

594

945

3.00%
West Pegasus West Gemini West Orion
895

 
$950 million facility
4Q 2024
198

368

566

3.00%-4.42%
West Eclipse West Carina
648

(2) 
$450 million facility (2015)
4Q 2024
63

39

102

3.85%
West Freedom West Vigilant West Prospero West Ariel
176

 
Total secured credit facilities
5,662

 
 
 
 
(1) 
The facility is held by AOD, by which we hold a 67% ownership.
(2) 
Certain debt facilities are split into different tranches set at different margins. Under the ACE facility the margin is 5.5%.
(3) 
The final repayment shown in the above table includes balloon amount due on maturity and one quarters worth of amortization payments deferred in the fourth quarter of 2019 under the ACE facility amounting to $63 million. We have the ability to defer a further $437 million of amortization payments that would otherwise fall due between June 2020 and March 2021 through future use of the ACE facility.

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
The terms of these facilities are set out in the below table:
Facility Name
Maturity
Repayments before maturity ($m)

Final Repayment ($m)

Total ($m)

Margin on LIBOR floating interest
Collateral vessels
Book value of collateral vessels ($m)

$390 million facility
4Q 2022
43

144

187

Margin not disclosed
West Taurus
271

$375 million facility
2Q 2023
53

149

202

Margin not disclosed
West Hercules
322

$475 million facility
2Q 2023
52

180

232

Margin not disclosed
West Linus
191

Total credit facilities within VIEs
621

 
 
 
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
Schedule of Debt Maturities
The outstanding debt as at December 31, 2019 is repayable as follows:
(In $ millions)
 
December 31, 2019

2020
 
343

2021
 
569

2022
 
984

2023
 
1,774

2024
 
2,613

2025 and thereafter
 
476

Total debt principal
 
6,759
v3.20.1
Other liabilities (Tables)
 12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Other liabilities
As at December 31, 2019 and 2018 (Successor), other liabilities included the following:  
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Taxes payable
33

 
42

Contract liabilities
29

 
21

Unfavorable drilling contracts
8

 
27

Employee withheld taxes, social security and vacation payments
51

 
40

Accrued interest expense
40

 
61

Accrued expenses
137

 
107

Lease liabilities
36

 
—

Uncertain tax provisions
83

 
100

Other liabilities
33

 
33

Total Other Liabilities
450

 
431

Other liabilities are presented in our Consolidated Balance Sheet as follows:
 
Successor

 
Successor

(In $ millions)
As at December 31,
2019

 
As at December 31,
2018

Other current liabilities
322

 
310

Other non-current liabilities
128

 
121

Total Other Liabilities
450

 
431
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, 2019
 
December 31, 2018
(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
)
39

(27
)
 
(66
)
—

(66
)
Amortization of unfavorable contracts
 
—

19

19

 
—

39

39

Balance at end of period
 
(66
)
58

(8
)
 
(66
)
39

(27
)
Schedule of future amortization of unfavorable contracts
The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods:
 
 
Period ended December 31,
(In $ millions)
 
2020

2021

2022

2023

2024 and after

Total

Amortization of unfavorable contracts
 
(1
)
(1
)
(1
)
(1
)
(4
)
(8
)
v3.20.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2019
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:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

2020
 
17

2021
 
16

2022
 
9

2023
 
2

2024 and thereafter
 
1

Total
 
45

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, 2019:
 
 
Successor

(In $ millions)
 
Year ended December 31, 2019

Total undiscounted cash flows
 
45

Less short term leases
 
(1
)
Less discount
 
(8
)
Operating lease liability
 
36

Of which:
 
 
Current
 
12

Non-current
 
24
Supplementary information regarding lease accounting
Rental expense was as follows:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Rent expense
13

 
7

 
 
9

 
19

Total rent expense
13

 
7

 
 
9

 
19

The following table gives supplementary information regarding our lease accounting at December 31, 2019:
 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Cost:
 
 
Operating lease cost
 
13

Total Lease cost
 
13

 
 
 
Other information:
 
 
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows
 
13

Right-of-use assets obtained in exchange for operating lease liabilities during the period
 
19

Weighted-average remaining lease term in months
 
18

Weighted-average discount rate
 
13
%
Operating subleases and leases, lessor, future undiscounted cash flows, and income
For operating leases where we are the lessor, our future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
10

2021
 
10

2022
 
10

2023
 
9

2024 and thereafter
 
—

Total
 
39

 
 
Successor

(In $ million)
 
Year ended December 31,
2019

Operating Lease Income:
 
 
Operating lease income
 
1

Total Lease income
 
1

For our operating subleases, the future undiscounted cash flows are as follows:
 
 
Successor

(In $ millions)
 
Year ended December 31,
2019

2020
 
1

2021
 
1

2022
 
1

2023
 
—

2024 and thereafter
 
—

Total
 
3
v3.20.1
Common shares (Tables)
 12 Months Ended
Dec. 31, 2019
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
 
Issued and fully paid share capital $2.00 par value each
 
Treasury shares held by the Company - $2.00 par value each
 
Shares

 
$ millions

 
Shares

 
$ millions

 
Shares

 
$ millions

At January 1, 2017, December 31, 2017 and July 1, 2018 (Predecessor)
—


—


508,763,020


1,017


(4,244,080
)

(9
)
Cancellation of Predecessor Company common stock
—


—

 
(508,763,020
)

(1,017
)

4,244,080

 
9

Successor Company share issuance
100,000,000


10


—


—


—


—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At July 2, 2018 (Successor)
100,000,000

 
10

 
—

 
—

 
—

 
—

At December 31, 2018 (Successor)
100,000,000

 
10

 
—

 
—

 
—

 
—

RSU share issuance
234,973

 
—

 
—

 
—

 
—

 
—

At December 31, 2019 (Successor)
100,234,973

 
10

 
—

 
—

 
—

 
—
v3.20.1
Non-controlling interest (Tables)
 12 Months Ended
Dec. 31, 2019
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 VIEs

 
Seadrill Nigeria Operations Limited

 
Total

January 1, 2017 (Predecessor)
165

 
291

 
149

 
(69
)
 
6

 
542

Changes in 2017
—

 
—

 
—

 
(14
)
 
—

 
(14
)
Net (loss)/income attributable to non-controlling interest in 2017
(89
)
 
(65
)
 
—

 
24

 
1

 
(129
)
December 31, 2017 (Predecessor)
76

 
226

 
149

 
(59
)
 
7

 
399

Adoption of new accounting standard ASU 2016-16 - Income Taxes
(25
)
 
—

 
—

 
—

 
—

 
(25
)
Net (loss)/income attributable to non-controlling interest in period from January 1, 2018 to July 1, 2018
(160
)
 
(10
)
 
1

 
7

 
2

 
(160
)
Redeemable non-controlling interest
—

 
—

 
(150
)
 
—

 
—

 
(150
)
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited
109

 
(216
)
 
—

 
—

 
—

 
(107
)
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited
—

 
—

 
—

 
199

 
(2
)
 
197

July 1, 2018 (Predecessor)
—

 
—

 
—

 
147

 
7

 
154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 2, 2018 (Successor)
—

 
—

 
—

 
147

 
7

 
154

Net (loss)/income attributable to non-controlling interest in period from July 2, 2018 to December 31, 2018
—

 
—

 
—

 
(2
)
 
—

 
(2
)
December 31, 2018 (Successor)
—

 
—

 
—

 
145

 
7

 
152

Net (loss)/income attributable to non-controlling interest in 2019
—

 
—

 
—

 
(5
)
 
4

 
(1
)
December 31, 2019 (Successor)
—

 
—

 
—

 
140

 
11

 
151
v3.20.1
Redeemable non-controlling interest (Tables)
 12 Months Ended
Dec. 31, 2019
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

As at January 1, 2018 (Predecessor)
 
—

Reclassification from non-controlling interest
 
150

Fair value adjustment on initial recognition
 
(127
)
Net income attributable to redeemable non-controlling interest
 
2

Fresh start fair value adjustment
 
5

As at July 1, 2018 (Predecessor)
 
30

 
 
 
 
 
 
As at July 2, 2018 (Successor)
 
30

Net loss attributable to redeemable non-controlling interest
 
(1
)
Fair value adjustment
 
9

As at December 31, 2018 (Successor)
 
38

Net loss attributable to redeemable non-controlling interest
 
(2
)
Fair value adjustment
 
21

As at December 31, 2019 (Successor)
 
57
v3.20.1
Accumulated other comprehensive income/(loss) (Tables)
 12 Months Ended
Dec. 31, 2019
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)
Unrealized gain on marketable securities

 
Unrealized gain on foreign exchange

 
Actuarial gain/(loss) relating to pension

 
Share in unrealized gains from associated companies

 
Change in unrealized gain on interest rate swaps in VIEs

 
Change in debt component on Archer facility

 
Total

Balance as at December 31, 2017 (Predecessor)
31

 
36

 
(26
)
 
15

 
2

 
—

 
58

Adoption of accounting standard update
(31
)
 
—

 
—

 
—

 
—

 
—

 
(31
)
Balance as at January 1, 2018 (Predecessor)
—

 
36

 
(26
)
 
15

 
2

 
—

 
27

Reset accumulated other comprehensive (loss)/income
—

 
(36
)
 
26

 
(15
)
 
(2
)
 
—

 
(27
)
Balance as at July 1, 2018 (Predecessor)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss) before reclassifications
—

 
—

 
1

 
(5
)
 
—

 
(3
)
 
(7
)
Balance as at December 31, 2018 (Successor)
—

 
—

 
1

 
(5
)
 
—

 
(3
)
 
(7
)
Other comprehensive (loss)/income
—

 
—

 
(1
)
 
(8
)
 
—

 
3

 
(6
)
Balance as at December 31, 2019 (Successor)
—

 
—

 
—

 
(13
)
 
—

 
—

 
(13
)
v3.20.1
Share based compensation Share based compensation (Tables)
 12 Months Ended
Dec. 31, 2019
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Share-based compensation expense (1)
5

 
—

 
 
9

 
7

Total share-based compensation expense
5

 
—

 
 
9

 
7

(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 Chapter 11. This was classified within reorganization items.
v3.20.1
Pension benefits (Tables)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Schedule of consolidated balance sheet position
Consolidated Balance Sheet position
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Accrued pension liabilities - Non-current liabilities
2

 
4

Less: Deferred tax (Asset)
(1
)
 
(1
)
Shareholders' equity
1

 
3
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Service cost
3

 
2

 
 
1

 
2

Interest cost on prior years’ benefit obligation
1

 
1

 
 
—

 
2

Gross pension cost for the year
4

 
3

 
 
1

 
4

Expected return on plan assets
(1
)
 
(1
)
 
 
—

 
(1
)
Net pension cost for the year
3

 
2

 
 
1

 
3

Impact of settlement/curtailment funded status
—

 
—

 
 
—

 
(1
)
Total net pension cost
3

 
2

 
 
1

 
2
Schedule of funded status of the defined benefit plan
The funded status of the defined benefit plan
 
Successor

 
Successor

(In $ millions)
December 31, 2019

 
December 31, 2018

Projected benefit obligations at end of period
40

 
37

Plan assets at market value
(39
)
 
(33
)
Accrued pension liabilities
1

 
4
Change in projected benefit obligations
Change in projected benefit obligations
 
Successor
 
 
Predecessor
(In $ millions)
December 31, 2019

 
December 31, 2018

 
 
June 30, 2018

Projected benefit obligations at beginning of period
37

 
36

 
 
38

Interest cost
1

 
1

 
 
—

Service cost
3

 
1

 
 
1

Benefits paid
(2
)
 
(1
)
 
 
(1
)
Change in unrecognized actuarial gain
—

 
2

 
 
(2
)
Foreign currency translations
1

 
(2
)
 
 
—

Projected benefit obligations at end of period
40

 
37

 
 
36
Change in pension plan assets
Change in pension plan assets
 
Successor
 
 
Predecessor
(In $ millions)
December 31, 2019

 
December 31, 2018

 
 
June 30, 2018

Fair value of plan assets at beginning of year
33

 
33

 
 
33

Estimated return
1

 
1

 
 
—

Contribution by employer
6

 
—

 
 
2

Administration charges
—

 
—

 
 
—

Benefits paid
(2
)
 
(1
)
 
 
(1
)
Actuarial gain
—

 
2

 
 
(1
)
Foreign currency translations
1

 
(2
)
 
 
—

Fair value of plan assets at end of year
39

 
33

 
 
33
Schedule of assumptions used in calculation of pension obligations
Assumptions used in calculation of pension obligations 
 
Successor
 
 
Predecessor
 
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Rate of compensation increase at the end of year
2.25
%
 
2.75
%
 
 
2.50
%
 
2.50
%
Discount rate at the end of year
2.30
%
 
2.60
%
 
 
2.40
%
 
2.40
%
Prescribed pension index factor
2.00
%
 
2.00
%
 
 
2.00
%
 
1.50
%
Expected return on plan assets for the year
2.60
%
 
2.60
%
 
 
2.40
%
 
2.40
%
Employee turnover
4.00
%
 
4.00
%
 
 
4.00
%
 
4.00
%
Expected increases in Social Security Base
2.50
%
 
2.50
%
 
 
2.25
%
 
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  
 
Successor

 
 
Successor

 
December 31, 2019

 
 
December 31, 2018

Equity securities
13.6
%
 
 
12.7
%
Debt securities
58.4
%
 
 
70.0
%
Real estate
11.0
%
 
 
9.9
%
Money market
16.5
%
 
 
6.9
%
Other
0.5
%
 
 
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, 2020-2029. The expected payments are based on the assumptions used to measure our obligations at December 31, 2019 and include estimated future employee services. 
(In $ millions)
December 31, 2019

2020
4

2021
2

2022
2

2023
3

2024
2

2025-2029
13

Total payments expected during the next 10 years
26
v3.20.1
Related party transactions (Tables)
 12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

In country support services expenses (c)
—

 
—

 
 
1

 
8

Related party inventory purchases
1

 
—

 
 
—

 
3

Other related party operating expenses (d)
2

 
1

 
 
3

 
3

Net bareboat charter arrangements (e)
—

 
—

 
 
—

 
(1
)
Total related party operating expenses
3

 
1

 
 
4

 
13

(c) Seadrill Partners previously provided us with in country support services for the West Jupiter in Nigeria. This arrangement ended in early 2018. In addition, SeaMex previously provided us with in 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) We previously acted as an intermediate charterer for the Seadrill Partners rig West Aquarius, during its contract with Hibernia in Canada, which ended in April 2017.
The below table provides an analysis of related party receivable balances for periods presented in this report.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Related party loans and interest (h)
 
488

 
476

Deferred consideration arrangements (i)
 
31

 
59

Convertible bond (j)
 
35

 
43

Trading balances (k)
 
150

 
138

Total related party receivables
 
704

 
716

Of which:
 
 
 
 
Amounts due from related parties - current
 
181

 
177

Amounts due from related parties - non-current
 
523

 
539

(h) We have loan receivables outstanding from SeaMex and Seabras Sapura. We previously had loan receivables from Seadrill Partners, which have been repaid. We have summarized the amounts outstanding in the table below:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

SeaMex seller's credit and loans receivable
 
422

 
398

Seabras loans receivable
 
66

 
78

Total related party loans and interest
 
488

 
476

SeaMex loans include (i) $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, and therefore cannot be repaid. As such, we have classified this balance as non-current on our Consolidated Balance Sheets. (ii) $45 million working capital loan advanced in November 2016 and (iii) $127 million accrued interest on above loans and other funding. The sellers credit and working capital loan both earn interest at 6.5% and are subordinated to SeaMex's external debt facility.
Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $66 million balance shown in the table above includes (i) $54 million of loan principal and (ii) $12 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility. We received repayments against these related party loans of $15 million during 2019.
In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 18 - "Investments in Associated Companies" for further details. We received repayments against these shareholder loans of $9 million during 2019.
(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:
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

West Vela - Mobilization receivable
 
17

 
31

West Vela - Share of dayrate
 
14

 
27

West Polaris
 
—

 
1

Total deferred consideration receivable
 
31

 
59


On adoption of fresh start accounting, we recorded receivables for West Vela share of dayrate and West Polaris earnout. These amounts were previously accounted for as gain contingencies so were only recognized when realized. The receivables were recognized at fair value of $29 million and $1 million respectively and the gain was recognized in reorganization items.
We recorded the following gains in other operating income for these arrangements.
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

West Polaris earn out realized
—

 
—

 
 
—

 
13

West Vela earn out realized
—

 
—

 
 
7

 
14

Total contingent consideration recognized
—

 
—

 
 
7

 
27

(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 because of this transaction.
The loan receivable is a convertible debt instrument comprised of a debt instrument and a conversion option, classed as an embedded derivative. Both elements are measured at fair value at each reporting date. As at December 31, 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. As a result, we recorded an other than temporary impairment against our investment in the convertible bond issued to us by Archer. Following the other-than-temporary impairment, the fair value of the convertible debt instrument was $35 million of which the split between debt and embedded derivative option was $35 million and nil respectively. See Note 33 - Fair values of financial instruments for further details.
Subsequent to the year end, on March 13, 2020, Archer announced that it had successfully secured a consensual amendment and extension to its debt facilities. This included a reduction to the principal and accrued interest on the convertible loan due to us from Archer, in exchange for a reduced stock conversion price and removal of certain restrictions regarding the sale or conversion of the loan. Following the amendment, the principal due on the loan would be $13 million and the stock conversion price would decrease from $2.083 per share to $0.40. The maturity date of the loan would also extend to April 1, 2024. The transaction is subject to execution of final agreements and completion of closing conditions.
The fair value gain/(loss) on the convertible bond for periods presented is summarized below:
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Other than temporary impairment
(11
)
 
—

 
 
—

 
—

Fair value gain / (loss) of Archer debt component
3

 
(3
)
 
 
2

 
1

Fair value (loss) / gain of Archer embedded conversion option
—

 
(9
)
 
 
2

 
(4
)
(k) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Drilling and Sonadrill for related party management fees. In addition, certain receivables and payables arise when we pay an invoice on behalf of Seadrill Partners or SeaMex and vice versa. Receivables and payables are generally settled quarterly in arrears.
The below table provides an analysis of related party payable balances for periods presented in this report.
 
 
Successor

 
Successor

(In $ millions)
 
December 31, 2019

 
December 31, 2018

Related party loans payable (n)
 
239

 
222

Trading balances (o)
 
19

 
39

Total related party liabilities
 
258

 
261

Of which:
 
 
 
 
Amounts due to related parties - current
 
(19
)
 
(39
)
Long-term debt due to related parties
 
(239
)
 
(222
)
(n) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 35 – Variable Interest Entities (VIEs) for further details). The carrying amount of the loans was $239 million at December 31, 2019 (2018: $222 million). The principal outstanding on the loans was $314 million at December 31, 2019, (2018: $314 million).
There is a right of offset of trading balance assets against the loans, the net position is disclosed within “Long-term debt due to related parties” on the Consolidated Balance Sheets. As at December 31, 2019 (Successor) the trading position was a net liability position of nil.
The loans bear interest at a fixed rate of 4.5% per annum and mature between 2023 and 2029. The total interest expense incurred for the year ended December 31, 2019 (Successor) was $14 million, the period from July 2, 2018 through December 31, 2018 (Successor) was $7 million, the period from January 1, 2018 through July 1, 2018 (Predecessor) was $7 million (year ended December 31, 2017 (Predecessor): $15 million).
(o) Trading balances primarily include related party payables due from our Ship Finance variable interest entities to Ship Finance and trading balances due from us to SeaMex and Seadrill Partners.
The below table provides an analysis of related party revenues for periods presented in this report.
 
Successor
 
 
Predecessor
 (In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Management fee revenues (a)
109

 
41

 
 
41

 
84

In country support services revenues (b)
—

 
—

 
 
1

 
23

Related party inventory sales
1

 
1

 
 
1

 
—

Other
—

 
4

 
 
—

 
3

Total related party operating revenues
110

 
46


 
43


110

(a) We provide management and administrative services to Seadrill Partners and SeaMex and operation and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Drilling. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis.
(b) We previously provided in country support services to the Seadrill Partners rig West Polaris when it operated in Angola. The West Polaris's contract ended in December 31, 2017, so we no longer earn revenues under this arrangement.
In addition to the amounts shown above, we recognized reimbursable revenues and expenses from Northern Drilling of $167 million for the year ended December 31, 2019 for work to perform the first mobilization of the Northern Drilling rigs, West Mira and West Bollsta. As at December 31, 2019 our Consolidated Balance Sheet included a $55 million receivable from Northern Drilling included in related parties and $5 million unbilled reimbursables amounts within Other Assets for costs to be recovered from this arrangement.
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,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Interest income (f)
26

 
15

 
 
12

 
34

Gains on related party derivatives
—

 
—

 
 
—

 
1

Interest income recognized on deferred contingent consideration (g)
4

 
1

 
 
2

 
3

Total related party financial items
30

 
16

 
 
14

 
38

(f) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below). We also previously earned interest income on our related party loans to Seadrill Partners in 2017.
(g) We record interest income on deferred consideration receivables from Seadrill Partners (see item (i) below).
v3.20.1
Financial instruments and risk management (Tables)
 12 Months Ended
Dec. 31, 2019
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, 2019 (Successor) 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)
 
—

 
4,320

 
4,320

 
43

Debt contained within VIEs
 
621

 
—

 
621

 
6

Debt exposed to interest rate fluctuations
 
6,283

 
(180
)
 
6,103

 
61

Less: Cash and Restricted Cash
 
(1,357
)
 
—

 
(1,357
)
 
(14
)
Net debt exposed to interest rate fluctuations (2)
 
4,926

 
(180
)
 
4,746

 
47

(1) The 3-month LIBOR rate as at December 31, 2019 was 1.91%. At this date, the interest cap would mitigate 4% of the impact of a theoretical 1% point increase in LIBOR.
(2) The $476 million of Senior Secured Notes are a fixed rate debt instrument and are therefore excluded from the above table.
Schedule of Realized and Unrealized Gains and Losses
Gains and losses on derivatives reported in our consolidated statement of operations included the following:
 
Successor
 
 
Predecessor
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

(Loss)/gain recognized in the Consolidated Statement of Operations relating to derivative financial instruments
 
 
 
 
 
 
 
 
Interest rate cap agreement
(37
)
 
(22
)
 
 
(6
)
 
—

Archer convertible debt instrument
—

 
(9
)
 
 
2

 
(4
)
Interest rate swaps not designated for hedge accounting
—

 
—

 
 
—

 
(31
)
Cross currency swaps not designated for hedge accounting
—

 
—

 
 
—

 
46

Loss/(gain) on derivative financial instruments
(37
)
 
(31
)
 
 
(4
)
 
11
Schedule of Derivative Financial Instruments
Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
 
(In $ millions)
Maturity date
Applicable rate
Outstanding principal - December 31, 2019

As at December 31, 2019

As at December 31, 2018

 
 
Interest rate cap
June 2023
2.87% LIBOR cap
4,500

3

39

 
 
 
 
 
3

39
v3.20.1
Fair values of financial instruments (Tables)
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Schedule of fair value of financial instruments measured at amortized cost
The carrying value and estimated fair value of our financial instruments that are measured at amortized cost at December 31, 2019 (Successor) and December 31, 2018 (Successor) are as follows:
 
Successor
 
Successor
 
December 31, 2019
 
December 31, 2018
(In $ millions)
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
Related party loans receivable (1) (Level 2)
395

 
488

 
476

 
476

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Secured credit facilities (Level 2)
5,464

 
5,549

 
5,388

 
5,519

Credit facilities contained within variable interest entities (Level 2)
590

 
598

 
612

 
626

Senior Secured Notes (Level 1)
404

 
476

 
770

 
769

Related party loans payable by the VIE (Level 2)
229

 
239

 
222

 
226

(1) 
Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis 
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, 2019 (Successor) and December 31, 2018 (Successor) are as follows: 
 
Successor
 
Successor
 
December 31, 2019
 
December 31, 2018
(In $ millions)
Fair
value

 
Carrying
value

 
Fair
value

 
Carrying
value

Assets
 
 
 
 
 
 
 
Cash and cash equivalents (Level 1)
1,115

 
1,115

 
1,542

 
1,542

Restricted cash (Level 1)
242

 
242

 
461

 
461

Marketable securities (Level 1)
11

 
11

 
57

 
57

Related party loans receivable - Archer convertible debt (Level 3)
35

 
35

 
43

 
43

Interest rate cap (Level 2)
3

 
3

 
39

 
39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Temporary equity
 
 
 
 
 
 
 
Redeemable non-controlling interest (Level 3)
57

 
57

 
38

 
38
v3.20.1
Commitments and contingencies (Tables)
 12 Months Ended
Dec. 31, 2019
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:
 
Successor

 
Successor

 (In $ millions)
December 31, 2019

 
December 31, 2018

Guarantees in favor of customers (1)(2)(3)
215

 
7

Guarantees in favor of banks (4)
146

 
165

Guarantees in favor of suppliers
—

 
1

Total
361

 
173


(1) Guarantees to Seadrill Partners - Guarantees in favor of customers are performance guarantees provided on behalf of Seadrill Partners of $15 million (December 31, 2018 (Successor): $7 million). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of nil (December 31, 2018 (Successor): $1 million). Contractual maturity from 2020-2021.
(2) Guarantees to Northern Drilling - Guarantees in favor of customers are performance guarantees provided on behalf of Northern Drilling of $150 million (December 31, 2018 (Successor): $nil). These guarantees are indemnified by Northern Drilling. Contractual maturity till 2022.
(3) Guarantees to Sonadrill - Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $50 million (December 31, 2018 (Successor): $nil). Contractual maturity till 2021 and remains in full force and effect until all obligations under the contract have been discharged and in any event shall terminate on the 90th day after completion of demobilization.
(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 $146 million (December 31, 2018 (Successor): $165 million). Contractual maturity till 2021.
v3.20.1
Variable Interest Entities (Tables)
 12 Months Ended
Dec. 31, 2019
Variable Interest Entity, Measure of Activity [Abstract]  
Summary of sale and leaseback arrangements and repurchase of options
The following table gives a summary of the sale and leaseback arrangements and repurchase options, as at December 31, 2019:
Unit
 
Effective
from
 
Sale value
(In $ millions)
 
First
repurchase
option
(In $ millions)
 
Month of first
repurchase
option
 
Last
repurchase
option (1)
(In $ millions)
 
Month of last
repurchase
Option (1)
West Taurus
 
Nov 2008
 
850
 
418
 
Feb 2015
 
154
 
Dec 2024
West Hercules
 
Oct 2008
 
850
 
580
 
Aug 2011
 
138
 
Dec 2024
West Linus
 
June 2013
 
600
 
370
 
Jun 2018
 
170
 
May 2029

(i)     Ship Finance has a right to require us to purchase the West Linus for $86 million if we don’t exercise the final repurchase option.
Summary of average bareboat charter rates
A summary of the average bareboat charter rates per day for each unit is given below for the respective years.
(In $ thousands)
 
2020
 
2021
 
2022
 
2023
 
2024
West Taurus
 
101
 
96
 
96
 
181
 
177
West Hercules
 
100
 
96
 
96
 
183
 
176
West Linus
 
99
 
99
 
92
 
189
 
153
Schedule of assets and liabilities in statutory accounts of the VIEs
The balance sheets of the VIEs on a stand-alone basis at December 31, 2019 and December 31, 2018 (Successor) were as follows:
 
 
Successor

 
Successor

 
(In $ millions)
 
As at December 31, 2019

 
As at December 31, 2018

Cash and cash equivalents
 
22

 
2

Investment in finance lease
 
972

 
1,024

Total assets of the VIEs (1)
 
994

 
1,026

 
 
 
 
 
Short-term interest bearing debt (2)
 
48

 
33

Long-term interest bearing debt (2)
 
550

 
593

Other liabilities
 
5

 
2

Short-term amounts due to related parties
 
12

 
31

Long-term debt due to related parties (3)
 
239

 
222

Total liabilities of the VIEs
 
854

 
881

Equity of the VIEs
 
140

 
145


(1) Book value of units in the Company's consolidated financial statements as at December 31, 2019 was $784 million (December 31, 2018: $823 million).
(2)
Total interest bearing debt comprises principal outstanding of $621 million offset by $23 million debt discount (December 31, 2018: $655 million principal outstanding offset by $29 million debt discount).
(3)
We present balances due to/from Ship Finance on a net basis, due to the fact that there is a right to offset established in the long-term loan agreements, and the balances are intended to be settled on a net basis as shown in the table below:
        
 
Successor
 
Successor
(In $ millions)
As at December 31, 2019

 
As at December 31, 2018

Debt principal outstanding
314

 
314

Debt discount
(75
)
 
(88
)
Trading liability positions held against long-term loan
—

 
(4
)
Long-term loan due to related parties
239

 
222
v3.20.1
Supplementary cash flow information (Tables)
 12 Months Ended
Dec. 31, 2019
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
 
(In $ millions)
Year ended December 31,
2019

 
Period from July 2, 2018 through December 31, 2018

 
 
Period from January 1, 2018 through July 1, 2018

 
Year ended December 31,
2017

Non-cash investing activities
 
 
 
 
 
 
 
 
Sale of rigs and equipment (1)
—

 
—

 
 
—

 
103

Proceeds from repayment of short-term loan from related parties due to Seadrill Partners insulation from Seadrill Limited (2)
—

 
—

 
 
—

 
109

Derecognition of Sevan Developer newbuild asset (3)
—

 
—

 
 
—

 
620

Derecognition of Sevan Developer construction obligation (3)
—

 
—

 
 
—

 
(526
)
 
 
 
 
 
 
 
 
 
Non-cash financing activities
 
 
 
 
 
 
 
 
Repayment of debt following sale of rigs and equipment (1)
—

 
—

 
 
—

 
(103
)
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited (3)
—

 
—

 
 
—

 
(109
)
Dividend to non-controlling interests in VIEs (4)
—

 
—

 
 
—

 
(14
)

(1) 
During the year ended December 31, 2017 (Predecessor), we completed the sale of the West Triton, West Resolute and West Mischief to Shelf Drilling, receiving cash consideration of $122 million. This comprised sales value of $225 million offset by $103 million of debt repayments. Refer to Note 9 - Other operating items for further information.

(2) 
During the year ended December 31, 2017 (Predecessor), Seadrill Partners amended certain credit facilities to insulate itself from Seadrill Limited. This resulted in a $109 million repayment in respect to the $440 million secured debt facility. Refer to Note 31 - Related party transactions for further information on related party transactions.
 
(3) 
During the year ended December 31, 2017 (Predecessor), Sevan and Cosco agreed to defer the Sevan Developer delivery period until June 30, 2020. The contract amendment included a contract termination clause for Cosco and therefore it was deemed that Sevan had lost control of the asset and therefore derecognized the newbuild asset, which was held at $620 million, construction obligation held at $526 million, and accrued interest and other liabilities held at $19 million, resulting in a net loss on disposal of $75 million. Refer to Note 9 – Other operating items for further information.

(4) 
During the years ended December 31, 2017, the Ship Finance VIEs declared dividends payable to Ship Finance. Refer to Note 35 - Variable interest entities for further information.
v3.20.1
General information (Details)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
drilling_unit
Dec. 31, 2017
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]        
Number of offshore drilling units owned by the Company | drilling_unit     35  
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Income tax expense $ 8 $ 30 $ (39) $ 66
Adjustment for change in the contractual dayrate        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Income tax expense   $ 18    
v3.20.1
Accounting policies (Details)
 12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Line Items]  
Threshold percentage for recognizing actuarial gains and losses 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
v3.20.1
Recent Accounting Standards (Details) - USD ($)
$ in Millions
Jan. 01, 2020
Dec. 31, 2019
Jan. 01, 2019
Dec. 31, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Aggregate lease liability   $ 36   $ 0
Right of use asset   35   0
Retained earnings   $ 1,851   $ 611
ASU 2016-02        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Aggregate lease liability     $ 25  
Right of use asset     $ 23  
Cumulative Effect, Period Of Adoption, Adjustment | Forecast | Minimum | ASU 2016-13        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Retained earnings $ 75      
Cumulative Effect, Period Of Adoption, Adjustment | Forecast | Maximum | ASU 2016-13        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Retained earnings $ 135      
v3.20.1
Chapter 11 Proceedings - Additional Information (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Feb. 26, 2018
Sep. 12, 2017
Dec. 31, 2016
Fresh-Start Adjustment [Line Items]                
Amount of new cash commitments in the form of new notes and equity $ 1,000,000,000         $ 1,080,000,000 $ 1,060,000,000  
Number of shares 100,000,000 100,000,000 508,763,020 100,234,973 508,763,020,000,000     508,763,020,000,000
Common stock, value issued $ 10,000,000 $ 10,000,000 $ 1,017,000,000 $ 10,000,000 $ 1,017,000,000     $ 1,017,000,000
Fully diluted, reserved for Employee Incentive Plan 10.00%              
New investor commitment fee 5.00%              
Loss on Newbuilding global settlement claim   0 0 0 (1,064,000,000)      
Loss on impairment of long-lived assets   0 414,000,000 0 696,000,000      
Unamortized debt issuance costs   $ 0 $ 0 $ 0 66,000,000      
West Dorado, West Draco, West Aquila and West Libra                
Fresh-Start Adjustment [Line Items]                
Loss on impairment of long-lived assets         $ 696,000,000      
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers                
Fresh-Start Adjustment [Line Items]                
Number of shares 23,750,000              
Common stock, value issued $ 200,000,000              
Recipients of Senior Secured Notes (including Commitment Parties and Notes Rights Offering Subscribers)                
Fresh-Start Adjustment [Line Items]                
Number of shares 54,625,000              
Holders of General Unsecured Claims                
Fresh-Start Adjustment [Line Items]                
Number of shares 14,250,000              
Former Holders of Old Seadrill Limited Equity and Seadrill Limited 510(b) Claimants                
Fresh-Start Adjustment [Line Items]                
Number of shares 1,900,000              
Fees to Select Commitment Parties                
Fresh-Start Adjustment [Line Items]                
Number of shares 475,000              
Hemen (on account of Primary Structuring Fee)                
Fresh-Start Adjustment [Line Items]                
Number of shares 5,000,000              
Secured Debt | Senior secured notes                
Fresh-Start Adjustment [Line Items]                
Debt, face amount $ 880,000,000              
Unamortized debt issuance costs 9,000,000              
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              
v3.20.1
Chapter 11 Proceedings - Key terms of the Plan of Reorganization (Details) - shares
Dec. 31, 2019
Jun. 05, 2019
Dec. 31, 2018
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Fresh-Start Adjustment [Line Items]              
Number of shares 100,234,973   100,000,000 100,000,000 508,763,020 508,763,020,000,000 508,763,020,000,000
Reserved for issuance under employee incentive plan (in shares)       11,111,111      
Total, fully diluted (in shares) 138,880,000 138,880,000 111,111,111 111,111,111      
Prior to dilution by the shares reserved under the Employee Incentive Plan       100.00%      
Fully diluted       90.00%      
Fully diluted, reserved for Employee Incentive Plan       10.00%      
Total fully diluted       100.00%      
Commitment Parties (in exchange for cash paid pursuant to the Investment Agreement) and Equity Rights Offering Subscribers              
Fresh-Start Adjustment [Line Items]              
Number of shares       23,750,000      
Prior to dilution by Primary Structuring Fee and the shares reserved under the Employee Incentive Plan       25.00%      
Prior to dilution by the shares reserved under the Employee Incentive Plan       23.75%      
Fully diluted       21.38%      
Recipients of 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%      
v3.20.1
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, 2019
Dec. 31, 2017
Reorganizations [Abstract]        
Professional and advisory fees $ (9) $ (187) $ 0 $ (66)
New investor commitment fees 0 0 0 (53)
Loss on Newbuilding global settlement claim 0 0 0 (1,064)
Loss on other pre-petition allowed claims 0 0 0 (3)
Gain on liabilities subject to compromise 0 2,958 0 0
Fresh start valuation adjustments 0 (6,142) 0 0
Write-off of debt issuance costs 0 0 0 (66)
Reversal of credit risk on derivatives 0 0 0 (89)
Interest income on surplus cash invested 0 6 0 4
Reorganization items, net $ (9) $ (3,365) $ 0 $ (1,337)
v3.20.1
Fresh Start Accounting - Additional Information (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Apr. 17, 2018
Feb. 26, 2018
Dec. 31, 2016
Fresh-Start Adjustment [Line Items]                  
Distributable value $ 11,056,000,000           $ 11,000,000,000    
WACC 11.40%       11.00%        
Debt, fair value $ 7,301,000,000                
Debt, book value $ 7,600,000,000                
Common stock, shares issued (in shares) 100,000,000 508,763,020 100,000,000 508,763,020 100,234,973 508,763,020,000,000     508,763,020,000,000
Per share value (in dollars per share) $ 35.01                
Write-off of unamortized debt issuance costs     $ 0 $ 0 $ 0 $ 66,000,000      
Minimum | Plan                  
Fresh-Start Adjustment [Line Items]                  
Distributable value               $ 10,200,000,000  
Maximum | Plan                  
Fresh-Start Adjustment [Line Items]                  
Distributable value               $ 11,800,000,000  
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                
Seadrill Capricorn Holdings LLC                  
Fresh-Start Adjustment [Line Items]                  
WACC 11.40%                
Fresh Start Adjustments                  
Fresh-Start Adjustment [Line Items]                  
Adjustments, increase (decrease), Amount due from related parties - current   $ 14,000,000   14,000,000          
Deferred mobilization cost, current   9,000,000   9,000,000          
Favorable drilling contracts, current   190,000,000   190,000,000          
Adjustments, increase (decrease), Amount due from related parties - non-current   11,000,000   11,000,000          
Embedded derivative   2,000,000              
Deferred mobilization, noncurrent   2,000,000   2,000,000          
Favorable contracts, unamortized   1,000,000   1,000,000          
Favorable drilling and management service, noncurrent   98,000,000   98,000,000          
Short term portion of deferred mobilization revenues   27,000,000   27,000,000          
Accrued interest expense   59,000,000   59,000,000          
Deferred mobilization revenues   7,000,000   7,000,000          
Unfavorable drilling contracts   9,000,000   9,000,000          
Fresh Start Adjustments | Secured Debt                  
Fresh-Start Adjustment [Line Items]                  
Debt discount   188,000,000   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 LLC | West Vela                  
Fresh-Start Adjustment [Line Items]                  
Adjustments, increase (decrease), Amount due from related parties - current   14,000,000   14,000,000          
Fresh Start Adjustments | Seadrill Partners LLC | West Vela and West Polaris                  
Fresh-Start Adjustment [Line Items]                  
Adjustments, increase (decrease), Amount due from related parties - non-current   17,000,000   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)   $ (3,000,000)          
Income Approach                  
Fresh-Start Adjustment [Line Items]                  
Debt, fair value $ 7,300,000,000                
v3.20.1
Fresh Start Accounting - Schedule of Weighted Average Cost of Capital (Details)
 12 Months Ended
Jul. 02, 2018
Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]    
WACC 11.40% 11.00%
Seadrill Capricorn Holdings LLC    
Restructuring Cost and Reserve [Line Items]    
WACC 11.40%  
Seadrill Operating LP    
Restructuring Cost and Reserve [Line Items]    
WACC 12.00%  
Seadrill Deepwater Drillship Ltd    
Restructuring Cost and Reserve [Line Items]    
WACC 12.00%  
Seabras Sapura Holding    
Restructuring Cost and Reserve [Line Items]    
WACC 14.30%  
Seabras Sapura Participacoes    
Restructuring Cost and Reserve [Line Items]    
WACC 13.70%  
SeaMex    
Restructuring Cost and Reserve [Line Items]    
WACC 12.70%  
v3.20.1
Fresh Start Accounting - Reconciliation of Distributable Value to Fair Value of Successor Common Stock (Details) - USD ($)
$ / shares in Units, $ in Millions
Dec. 31, 2019
Dec. 31, 2018
Jul. 02, 2018
Jul. 01, 2018
Apr. 17, 2018
Dec. 31, 2017
Dec. 31, 2016
Restructuring and Related Activities [Abstract]              
Distributable value     $ 11,056   $ 11,000    
Less: non-controlling interest     (154) $ (154)      
Less: fair value of debt     (7,301)        
Less: fair value of other non-operating liabilities     (108)        
Add: fair value of tax attributes     8        
Fair value of Successor common stock issued upon emergence     $ 3,501        
Common stock, shares issued (in shares) 100,234,973 100,000,000 100,000,000 508,763,020   508,763,020,000,000 508,763,020,000,000
Per share value (in dollars per share)     $ 35.01        
v3.20.1
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  
v3.20.1
Fresh Start Accounting - Consolidated Balance Sheets (Details) - USD ($)
$ in Millions
Dec. 31, 2018
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), Common shares     (1,017)
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)
v3.20.1
Fresh Start Accounting - Reorganization Adjustments, Cash and Cash Equivalents (Details)
$ in Millions
Jul. 01, 2018
USD ($)
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
v3.20.1
Fresh Start Accounting - Reorganization Adjustments, Restricted Cash (Details)
$ in Millions
Jul. 01, 2018
USD ($)
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
v3.20.1
Fresh Start Accounting - Reorganization Adjustments, Other Current Liabilities (Details)
$ in Millions
Jul. 01, 2018
USD ($)
Success fees accrued upon emergence  
Fresh-Start Adjustment [Line Items]  
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
v3.20.1
Fresh Start Accounting - Gain on Liabilities Subject to Compromise (Details)
$ in Millions
Jul. 01, 2018
USD ($)
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
v3.20.1
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
v3.20.1
Fresh Start Accounting - Reorganization Adjustments, Change in Retained (loss)/earnings (Details)
$ in Millions
Jul. 01, 2018
USD ($)
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
v3.20.1
Fresh Start Accounting - Estimated Fair Value of Debt at Emergence (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Fresh-Start Adjustment [Line Items]          
Carrying value after reorganization adjustments   $ 6,914   $ 6,623  
Write-off of unamortized debt issuance costs   0 $ 0 0 $ 66
Fair value adjustment to record discount on the senior secured credit facilities and Ship Finance Loans   $ (24) $ 0 $ (47) $ 0
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        
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        
v3.20.1
Segment information - Results by Segment (Details)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
segment
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Segment Reporting [Abstract]          
Number of operating segments | segment     3    
Segment Reporting Information [Line Items]          
Revenues $ 541 $ 712 $ 1,388 $ 2,088  
Depreciation 236 391 426 798  
Amortization of intangibles 58 0 134 0  
Operating Income - net income [Abstract]          
Operating profit/(loss) (175) (613) (295) (728)  
Unallocated items:          
Total financial items and other (422) (3,242) (966) (2,308)  
Loss before income taxes (597) (3,855) (1,261) (3,036)  
Drilling units 6,659   6,401    
Investment in associated companies 800   389    
Marketable securities 57   11    
Cash and restricted cash 2,003 2,177 1,357 1,359 $ 1,443
Other assets 1,329   1,121    
Total assets 10,848   9,279    
Capital expenditures - fixed assets 98 117 162 150  
Floaters          
Segment Reporting Information [Line Items]          
Revenues 322 482 686 1,387  
Depreciation 190 298 346 601  
Amortization of intangibles 37 0 106 0  
Operating Income - net income [Abstract]          
Operating profit/(loss) (161) (446) (340) (622)  
Unallocated items:          
Drilling units 5,508   5,297    
Capital expenditures - fixed assets 74 93 139 128  
Jack-up rigs          
Segment Reporting Information [Line Items]          
Revenues 167 193 362 617  
Depreciation 46 93 80 197  
Amortization of intangibles 21 0 28 0  
Operating Income - net income [Abstract]          
Operating profit/(loss) (16) (167) 23 (112)  
Unallocated items:          
Drilling units 1,151   1,104    
Capital expenditures - fixed assets 24 24 23 22  
Other          
Segment Reporting Information [Line Items]          
Revenues 52 37 340 84  
Operating Income - net income [Abstract]          
Operating profit/(loss) $ 2 $ 0 $ 22 $ 6  
v3.20.1
Segment information - Geographic Revenues (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue $ 541 $ 712 $ 1,388 $ 2,088
Norway        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 117 82 469 219
Nigeria        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 108 105 198 193
Brazil        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 91 188 137 358
Saudi Arabia        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 78 79 130 159
United States        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 34 30 74 291
Angola        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue 29 100 215 482
Others        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Total Revenue $ 84 $ 128 $ 165 $ 386
v3.20.1
Segment information - Geographic Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units $ 6,401 $ 6,659
Norway    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 1,818 1,326
Malaysia    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 805 1,070
USA    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 644 658
Spain    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 615 875
Brazil    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 332 688
Others    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units $ 2,187 $ 2,042
v3.20.1
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Total        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 24.00% 19.00% 18.00% 23.00%
Equinor        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 7.00% 5.00% 16.00% 4.00%
Northern Drilling        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 0.00% 0.00% 12.00% 0.00%
ConocoPhillips        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 13.00% 8.00% 11.00% 6.00%
Saudi Aramco        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 14.00% 11.00% 10.00% 8.00%
Petrobras        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 10.00% 23.00% 7.00% 17.00%
LLOG        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 6.00% 4.00% 4.00% 14.00%
ExxonMobil        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 0.00% 10.00% 0.00% 7.00%
v3.20.1
Revenue from Contracts with Customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]    
Accounts receivables, net $ 173 $ 208
Current contract assets 0 1
Non-current contract assets 0 0
Current contract liabilities (deferred revenues) (20) (12)
Non-current contract liabilities (deferred revenues) $ (9) $ (9)
v3.20.1
Revenue from Contracts with Customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Change In Contract With Customer, Asset And Liability [Roll Forward]        
Contract assets, beginning balance $ 9 $ 9 $ 7 $ 1
Contract liabilities, beginning balance (32) (32) (55) (21)
Contract assets (liabilities), net, beginning balance (23) (23) (48) (20)
Amortization of revenue that was included in the beginning contract liability balance     25 14
Cash received, excluding amounts recognized as revenue   (21) (2) (22)
Cash received against the beginning contract asset balance   (9) (7) (1)
Contract assets recognized during the period   1 9 0
Fresh start adjustments, contract assets 0      
Fresh start adjustments, contract liabilities 32      
Fresh start adjustments 32      
Contract assets, ending balance 9 1 9 0
Contract liabilities, ending balance 0 (21) (32) (29)
Contract assets (liabilities), net, ending balance $ 9 $ (20) $ (23) $ (29)
v3.20.1
Revenue from Contracts with Customers - Additional Information (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]    
Deferred revenue, current $ 20 $ 12
Deferred revenue, noncurrent $ 9 $ 9
v3.20.1
Other revenues (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Variable Interest Entity [Line Items]        
Related party management fees $ 46 $ 43 $ 110 $ 110
Leasing revenues     1  
Other revenues        
Variable Interest Entity [Line Items]        
Related party management fees 46 43 109 110
Other management fees 0 0 6 1
Leasing revenues 0 0 1 0
Amortization of unfavorable contracts 0 21 0 43
Early termination fees 0 8 11 8
Total other revenues [1] $ 46 $ 72 $ 127 $ 162
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Other operating items - Other Operating Items (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Other Operating Income (Loss) [Abstract]        
Impairment of long lived assets $ 0 $ (414) $ 0 $ (696)
Loss on disposals [1] 0 0 0 (245)
Other operating income [1] 21 7 39 27
Total other operating items $ 21 $ (407) $ 39 $ (914)
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Other operating items - Schedule of Disposals (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Loss on disposal [1] $ 0 $ 0 $ 0 $ (245)
Total, by property, plant, and equipment disposals        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       351
Book value on disposal       596
Loss on disposal       (245)
Sale of West Triton        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       75
Book value on disposal       109
Loss on disposal       (34)
Sale of West Mischief        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       75
Book value on disposal       146
Loss on disposal       (71)
Sale of West Resolute        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       75
Book value on disposal       136
Loss on disposal       (61)
Disposal of Sevan Developer contract        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       0
Book value on disposal       75
Loss on disposal       (75)
Sale of West Rigel        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       126
Book value on disposal       128
Loss on disposal       (2)
Other        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Net proceeds/recoverable amount       0
Book value on disposal       2
Loss on disposal       $ (2)
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Other operating items - Other Operating Income (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 31, 2019
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Other Operating Income (Loss) [Abstract]          
Loss of hire insurance settlement   $ 0 $ 0 $ 10 $ 0
Receipt of overdue receivable $ 47 21 0 26 0
Contingent consideration (c)   0 7 0 27
Settlement with shipyard   0 0 3 0
Total other operating income [1]   $ 21 $ 7 $ 39 $ 27
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Other operating items - Additional Information (Details)
$ in Millions
 1 Months Ended 6 Months Ended 12 Months Ended
Jul. 02, 2018
Apr. 29, 2017
USD ($)
Jul. 31, 2017
USD ($)
Oct. 31, 2014
option
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
rig
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
May 09, 2018
USD ($)
Apr. 27, 2017
USD ($)
Oct. 15, 2016
option
Oct. 30, 2015
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Impairment of long lived assets         $ 0.0 $ 414.0 $ 0.0 $ 696.0        
Reorganization expense             $ 89.0 1,064.0        
Number of impaired rigs | rig           3            
WACC 11.40%           11.00%          
Loss on disposals [1]         $ 0.0 $ 0.0 $ 0.0 (245.0)        
Disposal of Sevan Developer contract                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Fair value of consideration received               0.0        
Loss on disposals               (75.0)        
Sale of West Rigel                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Fair value of consideration received               126.0        
Loss on disposals               $ (2.0)        
Sevan Drilling Limited                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Purchase obligation, minimum deferred delivery period       12 months                
Purchase obligation, number of subsequent options in agreement | option       4                
Purchase obligation, exercisable interval period       6 months                
Purchase obligation, number of options enacted | option                     3  
Sevan Drilling                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Purchase obligation, refund                       $ 26.3
Purchase obligation, refund (as percent)                       5.00%
Remaining refund amount                   $ 26.3    
Purchase obligation                   $ 526.0    
Exploration and production equipment | West Triton, West Mischief and West Resolute                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Fair value of consideration received   $ 225.0                    
Loss on disposals   $ (166.0)                    
Exploration and production equipment | Disposal of Sevan Developer contract                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Loss on disposals     $ (75.0)                  
Disposal group, including discontinued operation, property, plant and equipment     620.0                  
Disposal group, including discontinued operation, construction payable     526.0                  
Disposal group, including discontinued operation, accrued liabilities     $ 19.0                  
Exploration and production equipment | Sale of West Rigel                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Fair value of consideration received                 $ 126.0      
Exploration and production equipment | Jurong Shipyard | Sale of West Rigel                        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]                        
Fair value of consideration received                 $ 126.0      
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Interest expense - Schedule of Interest expense (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Interest Expense [Abstract]        
Cash and payment-in-kind interest on debt facilities $ (237) $ (37) $ (440) $ (286)
Unwind of discount debt (24) 0 (47) 0
Loan fee amortization 0 (1) 0 (27)
Capitalized interest 0 0 0 28
Interest expense $ (261) $ (38) $ (487) $ (285)
v3.20.1
Interest expense - Cash and Payment-In-Kind Interest (Details) - USD ($)
 6 Months Ended 12 Months Ended
Nov. 01, 2018
Jul. 02, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Jul. 15, 2019
Apr. 10, 2019
Debt Instrument [Line Items]                
Cash and payment-in-kind interest on debt facilities     $ (237,000,000) $ (37,000,000) $ (440,000,000) $ (286,000,000)    
Total debt principal     7,086,000,000   6,759,000,000      
Secured Debt | Secured credit facilities and unsecured bonds                
Debt Instrument [Line Items]                
Cash and payment-in-kind interest on debt facilities     (162,000,000) (116,000,000) (327,000,000) (320,000,000)    
Less: adequate protection payments     0 104,000,000 0 81,000,000    
Total debt principal     5,662,000,000   5,662,000,000      
Secured Debt | Senior secured notes                
Debt Instrument [Line Items]                
Cash and payment-in-kind interest on debt facilities $ (5,000,000)   (50,000,000) $ 0 (66,000,000) 0    
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     769,000,000   476,000,000     $ 476,000,000
Face amount representing accrued interest compounded             $ 18,000,000  
Secured Debt | Credit facilities contained within variable interest entities                
Debt Instrument [Line Items]                
Cash and payment-in-kind interest on debt facilities     $ (25,000,000) $ (25,000,000) (47,000,000) $ (47,000,000)    
Total debt principal         $ 621,000,000      
LIBOR | Secured Debt | Secured credit facilities and unsecured bonds                
Debt Instrument [Line Items]                
Increase in basis spread on variable interest rate   1.00%            
v3.20.1
Impairment loss on investments in associated companies - Impairments of Investments in Associated Companies and Joint Ventures (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments $ 0 $ 0 $ 302 $ 841
Associated Companies And Joint Ventures        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments 0 0 302 841
Seadrill Partners LLC        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments     302  
SeaMex Limited        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments 0 0 0 36
Direct Ownership Interest | Seadrill Partners LLC        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments 0 0 248 723
Subordinated Units | Seadrill Partners LLC        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments 0 0 0 82
Member Interest and Incentive Distribution Rights | Seadrill Partners LLC        
Schedule of Equity Method Investments [Line Items]        
Total impairment of investments $ 0 $ 0 $ 54 $ 0
v3.20.1
Impairment loss on investments in associated companies - Seadrill Partners (Details)
 6 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
Aug. 31, 2019
USD ($)
Schedule of Equity Method Investments [Line Items]          
Investments, book value $ 800,000,000   $ 389,000,000    
Impairment of investments 0 $ 0 302,000,000 $ 841,000,000  
Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Impairment of investments     $ 302,000,000    
Remaining economic lives of underlying assets     30 years    
Seadrill Partners LLC | Subordinated Units and Direct Ownership Interest          
Schedule of Equity Method Investments [Line Items]          
Remaining economic lives of underlying assets       30 years  
Seadrill Partners LLC | Direct Ownership Interest          
Schedule of Equity Method Investments [Line Items]          
Investments, fair value         $ 134,000,000
Investments, book value         382,000,000
Impairment of investments 0 0 $ 248,000,000 $ 723,000,000  
Seadrill Partners LLC | Member Interest and Incentive Distribution Rights          
Schedule of Equity Method Investments [Line Items]          
Investments, fair value         0
Investments, book value         $ 54,000,000
Impairment of investments 0 0 54,000,000 0  
Seadrill Partners LLC | Subordinated Units          
Schedule of Equity Method Investments [Line Items]          
Impairment of investments $ 0 $ 0 0 $ 82,000,000  
Discount Rate | Seadrill Partners LLC | Subordinated Units and Direct Ownership Interest          
Schedule of Equity Method Investments [Line Items]          
Equity method investment, measurement input       0.0975  
Term Loan B | Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Maximum borrowing capacity     $ 2,600,000,000.0    
Minimum | Discount Rate | Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Equity method investment, measurement input     0.1125    
Maximum | Discount Rate | Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Equity method investment, measurement input     0.1225    
v3.20.1
Impairment loss on investments in associated companies - SeaMex Limited (Details)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
Schedule of Equity Method Investments [Line Items]        
Impairment of investments $ 0 $ 0 $ 302 $ 841
SeaMex        
Schedule of Equity Method Investments [Line Items]        
Impairment of investments $ 0 $ 0 $ 0 $ 36
Discount Rate | SeaMex        
Schedule of Equity Method Investments [Line Items]        
Equity method investment, measurement input       0.1025
Subordinated Units and Direct Ownership Interest | SeaMex        
Schedule of Equity Method Investments [Line Items]        
Remaining economic lives of underlying assets       30 years
v3.20.1
Taxation - Components of Income Taxes (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Current tax (benefit)/expense:        
Bermuda $ 0 $ 0 $ 0 $ 0
Foreign 30 34 22 56
Deferred tax (benefit)/expense:        
Bermuda 0 0 0 0
Foreign (22) (4) (61) 10
Total tax (benefit)/expense $ 8 $ 30 $ (39) $ 66
Effective tax rate (1.30%) (0.80%) 3.10% (2.20%)
v3.20.1
Taxation - Additional Information (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Dec. 31, 2016
Related Party Transaction [Line Items]          
Effective tax rate (1.30%) (0.80%) 3.10% (2.20%)  
Impairment of long lived assets $ 0 $ 414 $ 0 $ 696  
Statutory income tax rate 0.00% 0.00% 0.00% 0.00%  
Net operating losses carried forward $ 263   $ 259    
Deferred tax assets not subject to expiration 257   249    
Deferred tax assets subject to expiration 6   10    
Deferred tax liabilities, intangibles 34   4    
Valuation allowance 254   255    
Unrecognized tax benefits 132 $ 61 89 $ 55 $ 44
Accrued interest and penalties 26   18    
Unrecognized tax benefits, interest and penalties expensed during period 11 $ 3 7 $ 10  
Unrecognized tax benefits that would have a favorable impact on effective tax rate     83    
Other Noncurrent Liabilities          
Related Party Transaction [Line Items]          
Unrecognized tax benefits     65    
Deferred Tax Asset Reduction          
Related Party Transaction [Line Items]          
Unrecognized tax benefits     24    
NOL          
Related Party Transaction [Line Items]          
Valuation allowance $ 242   259    
Secretariat of the Federal Revenue Bureau of Brazil          
Related Party Transaction [Line Items]          
Income tax examination, estimate of possible loss     161    
Collateral posted on tax dispute     83    
Nigeria          
Related Party Transaction [Line Items]          
Income tax examination, estimate of possible loss     $ 171    
v3.20.1
Taxation - Income Tax Reconciliation (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Income Tax Disclosure [Abstract]        
Income taxes at statutory rate $ 0 $ 0 $ 0 $ 0
Effect of change on unrecognized tax benefits 49 12 (6) (5)
Effect of unremitted earnings of subsidiaries (10) 0 (17) 3
Effect of taxable income in various countries (31) 18 (16) 68
Total tax (benefit)/expense $ 8 $ 30 $ (39) $ 66
v3.20.1
Taxation - Deferred Income Taxes (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Deferred Tax Assets [Abstract]    
Pensions and stock options $ 2 $ 4
Provisions 30 28
Net operating losses carried forward 259 263
Gross deferred tax assets 291 295
Valuation allowance (255) (254)
Deferred tax assets, net of valuation allowance 36 41
Deferred Tax Liability [Abstract]    
Property, plant and equipment 30 49
Unremitted Earnings of Subsidiaries 10 27
Intangibles 4 34
Gross deferred tax liabilities 44 110
Net deferred tax liability $ (8) $ (69)
v3.20.1
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, 2019
Dec. 31, 2017
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward]        
Balance at the beginning of the period $ 61 $ 55 $ 132 $ 44
Increases as a result of positions taken in prior periods 69 7 8 23
Increases as a result of positions taken during the current period 18 1 29 0
Decreases as a result of positions taken in prior periods (9) (2) (34) (9)
Decreases as a result of positions taken in the current period 0 0 0 0
Decreases due to settlements (7) 0 (46) (3)
Balance at the end of the period $ 132 $ 61 $ 89 $ 55
v3.20.1
Taxation - Earliest Open Tax Year (Details)
 12 Months Ended
Dec. 31, 2019
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 2015
Brazil  
Income Tax Examination [Line Items]  
Earliest Open Year 2008
v3.20.1
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, 2019
Dec. 31, 2017
Earnings Per Share [Abstract]        
Net loss attributable to the parent $ (602) $ (3,881) $ (1,219) $ (2,973)
Less: Allocation to participating securities 0 0 0 0
Net loss available to stockholders (602) (3,881) (1,219) (2,973)
Effect of dilution 0 0 0 0
Diluted net loss available to stockholders $ (602) $ (3,881) $ (1,219) $ (2,973)
Basic loss per share:        
Weighted average number of common shares outstanding (in shares) 100 504 100 505
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) 100 504 100 505
Basic loss per share (usd per share) $ (6.02) $ (7.71) $ (12.18) $ (5.89)
Diluted loss per share (usd per share) $ (6.02) $ (7.71) $ (12.18) $ (5.89)
v3.20.1
Restricted cash (Details)
R$ in Millions, $ in Millions
Dec. 31, 2019
USD ($)
Dec. 31, 2019
BRL (R$)
Dec. 31, 2018
USD ($)
Restricted Cash [Line Items]      
Total restricted cash $ 242   $ 461
Current restricted cash 135   461
Non-current restricted cash 107   0
Accounts pledged as collateral for Senior Secured Notes      
Restricted Cash [Line Items]      
Total restricted cash 24   328
Accounts pledged as collateral for performance bonds and similar guarantees      
Restricted Cash [Line Items]      
Total restricted cash 104   101
Demand deposit pledged as collateral for tax related guarantee      
Restricted Cash [Line Items]      
Total restricted cash 83 R$ 330 0
Other      
Restricted Cash [Line Items]      
Total restricted cash $ 31   $ 32
v3.20.1
Marketable securities - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 6 Months Ended 12 Months Ended
Apr. 30, 2017
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Jan. 01, 2018
May 01, 2017
Gain (Loss) on Securities [Line Items]              
Gain on debt extinguishment   $ 0 $ 0 $ (22) $ 19    
Investment in marketable security   57   11      
Archer              
Gain (Loss) on Securities [Line Items]              
Ownership percentage 15.70%            
Gain on debt extinguishment $ 19            
Investment in marketable security 0 $ 12   $ 9      
Archer | Financial Restructuring              
Gain (Loss) on Securities [Line Items]              
Carrying value of loan $ 37           $ 45
Fair value | Archer | Financial Restructuring              
Gain (Loss) on Securities [Line Items]              
Carrying value of loan             $ 56
ASU 2016-01 - Financial Instruments              
Gain (Loss) on Securities [Line Items]              
Adoption of accounting standard update           $ 0  
ASU 2016-01 - Financial Instruments | Accumulated other comprehensive income/(loss)              
Gain (Loss) on Securities [Line Items]              
Adoption of accounting standard update           (31)  
ASU 2016-01 - Financial Instruments | Fair value gains              
Gain (Loss) on Securities [Line Items]              
Adoption of accounting standard update           $ 31  
v3.20.1
Marketable securities - Marketable Securities Held (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Apr. 30, 2017
Gain (Loss) on Securities [Line Items]      
Total marketable securities $ 11 $ 57  
Seadrill Partners - Common units      
Gain (Loss) on Securities [Line Items]      
Total marketable securities 2 45  
Archer      
Gain (Loss) on Securities [Line Items]      
Total marketable securities $ 9 $ 12 $ 0
v3.20.1
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, 2019
Dec. 31, 2017
Gain (Loss) on Securities [Line Items]        
Total unrealized gain (loss) on marketable securities $ (64) $ (3) $ (46)  
Total unrealized gain on marketable securities 0 0 0 $ 14
Seadrill Partners - Common Units - unrealized loss on marketable securities        
Gain (Loss) on Securities [Line Items]        
Total unrealized gain (loss) on marketable securities (45) (5) (43)  
Total unrealized gain on marketable securities       (14)
Archer - unrealized (loss)/gain on marketable securities        
Gain (Loss) on Securities [Line Items]        
Total unrealized gain (loss) on marketable securities $ (19) $ 2 $ (3)  
Total unrealized gain on marketable securities       $ 28
v3.20.1
Accounts receivable (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 31, 2019
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Receivables [Abstract]          
Allowance for doubtful accounts receivables   $ 0   $ 0  
Bad debt expense   0 $ 48,000,000 0 $ 0
Other operating income - receipt of overdue receivable $ 47,000,000 $ 21,000,000 $ 0 $ 26,000,000 $ 0
v3.20.1
Other assets (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Favorable drilling and management services contracts $ 33 $ 186
Taxes receivable 38 50
Prepaid expenses 33 32
Right of use asset 35 0
Reimbursable amounts due from customers 21 10
Deferred contract costs 12 15
Derivative asset - interest rate cap 3 39
Insurance receivable 14 1
Other 28 25
Total other assets 217 $ 358
Loss incident - amounts recovered 4  
Loss from Catastrophes    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Loss incident - costs to repair equipment 19  
Related party reimbursable expenses    
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Reimbursable amounts due from customers $ 5  
v3.20.1
Other assets - Balance Sheet Presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Other current assets $ 158 $ 322
Other non-current assets 59 36
Total other assets $ 217 $ 358
v3.20.1
Other assets - Favorable contracts (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Finite-lived Intangible Assets [Roll Forward]        
Amortization of favorable contracts $ (58) $ 0 $ (134) $ 0
Favorable contracts        
Finite-Lived Intangible Assets [Line Items]        
Gross Carrying Amount 287   287 287
Accumulated Amortization (101)   (254) 0
Finite-lived Intangible Assets [Roll Forward]        
Net carrying amount, beginning   287 186  
Amortization of favorable contracts   $ (101) (153)  
Net carrying amount, ending $ 186   $ 33 $ 287
v3.20.1
Other assets - Future amortization of favorable contracts (Details) - Favorable contracts - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]      
Weighted average remaining amortization period 20 years 6 months    
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]      
2020 $ 2    
2021 2    
2022 2    
2023 2    
2024 and after 25    
Total $ 33 $ 186 $ 287
v3.20.1
Investment in associated companies - Ownership Percentage (Details)
Dec. 31, 2019
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2017
Seabras Sapura        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 50.00%    
SeaMex        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 50.00% 50.00% 50.00%
Sonadrill        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 0.00% 0.00% 0.00%
Gulfdrill        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 0.00%    
v3.20.1
Investment in associated companies - Additional Information (Details)
 12 Months Ended
Dec. 31, 2019
rig
class_of_stock
class_of_membership_interest
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]        
Number premium jack-ups operated | rig 5      
Seabras Sapura        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 50.00% 50.00% 50.00%
Seabras Sapura | Sapura Energy        
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 | Fintech        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00%      
Sonadrill        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 0.00% 0.00% 0.00%
Sonadrill | Sonangol E.P.        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00%      
Gulfdrill        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00% 0.00%    
Gulfdrill | Gulf Drilling International        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 50.00%      
Subordinated Units | Seadrill Partners LLC        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 18.00%      
Direct Ownership Interest | Seadrill Capricorn Holdings LLC        
Schedule of Equity Method Investments [Line Items]        
Number of classes of membership interest representing voting common stock | class_of_membership_interest 1      
Direct Ownership Interest | Seadrill Deepwater Drillship Ltd        
Schedule of Equity Method Investments [Line Items]        
Number of classes of stock representing voting common stock 1      
Direct Ownership Interest | Seadrill Mobile Units (Nigeria) Ltd        
Schedule of Equity Method Investments [Line Items]        
Number of classes of stock representing voting common stock 1      
Direct Ownership Interest | Seadrill Operating LP        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 42.00%      
Direct Ownership Interest | Seadrill Capricorn Holdings LLC        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 49.00%      
Direct Ownership Interest | Seadrill Deepwater Drillship Ltd        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 39.00%      
Direct Ownership Interest | Seadrill Mobile Units (Nigeria) Ltd        
Schedule of Equity Method Investments [Line Items]        
Ownership percentage 49.00%      
v3.20.1
Investment in associated companies - Share in Results from Associated Companies (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) $ (90) $ 149 $ (115) $ 174
Seadrill Partners LLC | Direct Ownership Interest        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) (82) 77 (107) 82
Seadrill Partners LLC | Subordinated Units        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) (20) 22 (17) 22
Seabras Sapura        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) 24 46 29 80
SeaMex        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) (12) 4 (19) 0
Sonadrill        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) 0 0 (1) 0
Archer        
Schedule of Equity Method Investments [Line Items]        
Share in results from associated companies (net of tax) $ 0 $ 0 $ 0 $ (10)
v3.20.1
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, 2019
Dec. 31, 2017
Apr. 30, 2017
Schedule of Equity Method Investments [Line Items]          
Share in results from associated companies (net of tax) $ (90) $ 149 $ (115) $ 174  
Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Operating revenues 426 612 750 1,128  
Net operating income 100 257 51 464  
Net income (127) 201 (187) 235  
Seabras Sapura          
Schedule of Equity Method Investments [Line Items]          
Operating revenues 232 241 434 487  
Net operating income 124 125 198 244  
Net income 88 92 113 160  
Net income/(loss) allocated to ownership interests 44 46 57 80  
Amortization of basis differences (20) 0 (28) 0  
Share in results from associated companies (net of tax) $ 24 $ 46 $ 29 $ 80  
Ownership percentage 50.00% 50.00% 50.00% 50.00%  
SeaMex          
Schedule of Equity Method Investments [Line Items]          
Operating revenues $ 118 $ 121 $ 232 $ 239  
Net operating income 40 40 70 80  
Net income 4 7 18 0  
Net income/(loss) allocated to ownership interests 2 4 9 0  
Amortization of basis differences (14) 0 (28) 0  
Share in results from associated companies (net of tax) $ (12) $ 4 $ (19) $ 0  
Ownership percentage 50.00% 50.00% 50.00% 50.00%  
Sonadrill          
Schedule of Equity Method Investments [Line Items]          
Operating revenues $ 0 $ 0 $ 22 $ 0  
Net operating income 0 0 (1) 0  
Net income 0 0 (2) 0  
Net income/(loss) allocated to ownership interests 0 0 (1) 0  
Share in results from associated companies (net of tax) $ 0 $ 0 $ (1) $ 0  
Ownership percentage 0.00% 0.00% 50.00% 0.00%  
Archer          
Schedule of Equity Method Investments [Line Items]          
Share in results from associated companies (net of tax) $ 0 $ 0 $ 0 $ (10)  
Ownership percentage         15.70%
Direct Ownership Interest | Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Net income/(loss) allocated to ownership interests (59) 77 (92) 93  
Amortization of basis differences (23) 0 (15) (11)  
Share in results from associated companies (net of tax) (82) 77 (107) 82  
Subordinated Units | Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Net income/(loss) allocated to ownership interests (15) 22 (17) 24  
Amortization of basis differences (5) 0 0 (2)  
Share in results from associated companies (net of tax) $ (20) $ 22 $ (17) $ 22  
Ownership percentage     18.00%    
v3.20.1
Investment in associated companies - Book Value (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies $ 389 $ 800
Seadrill Partners LLC | Direct Ownership Interest    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 122 479
Seadrill Partners LLC | Subordinated Units    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 0 17
Seadrill Partners LLC | Member Interest and Incentive Distribution Rights    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 0 54
Seabras Sapura    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 98 77
Seabras Sapura Holding    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 123 132
SeaMex Limited    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies 22 41
Sonadrill    
Schedule of Equity Method Investments [Line Items]    
Investment in associated companies $ 24 $ 0
v3.20.1
Investment in associated companies - Consolidated Balance Sheets (Details) - USD ($)
$ in Millions
 1 Months Ended 6 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]          
Book value of Seadrill investment   $ 800   $ 389  
Share in results from associated companies (net of tax)   (90) $ 149 (115) $ 174
Impairment of investments   0 0 302 841
Shareholder loan repayment $ 9        
Seadrill Partners LLC          
Schedule of Equity Method Investments [Line Items]          
Current assets   1,110   833  
Non-current assets   5,076   4,847  
Current liabilities   (433)   (533)  
Non-current liabilities   (3,039)   (2,623)  
Net Assets   2,714   2,524  
Seadrill share of book equity   1,399   1,305  
Impairment of investments       302  
Seadrill Partners LLC | Basis difference allocated to rigs          
Schedule of Equity Method Investments [Line Items]          
Basis difference   (1,019)   (1,220)  
Seadrill Partners LLC | Basis difference allocated to contracts          
Schedule of Equity Method Investments [Line Items]          
Basis difference   99   37  
Seadrill Partners LLC | Direct Ownership Interest          
Schedule of Equity Method Investments [Line Items]          
Book value of Seadrill investment   479   122  
Share in results from associated companies (net of tax)   (82) 77 $ (107) 82
Impairment of investments $ 302        
Seadrill Partners LLC | Subordinated Units          
Schedule of Equity Method Investments [Line Items]          
Ownership percentage       18.00%  
Book value of Seadrill investment   17   $ 0  
Value of subordinated units   17 37    
Share in results from associated companies (net of tax)   (20) $ 22 (17) $ 22
Income (loss) from subordinated units   20      
Sebras Sapura and Seabras Sapura Holding          
Schedule of Equity Method Investments [Line Items]          
Book value of Seadrill investment   209   221  
Seabras Sapura          
Schedule of Equity Method Investments [Line Items]          
Current assets   255   195  
Non-current assets   1,567   1,495  
Current liabilities   (599)   (510)  
Non-current liabilities   (637)   (504)  
Net Assets   $ 586   $ 676  
Ownership percentage   50.00% 50.00% 50.00% 50.00%
Seadrill share of book equity   $ 293   $ 338  
Basis difference   (84)   (117)  
Book value of Seadrill investment   77   98  
Share in results from associated companies (net of tax)   24 $ 46 29 $ 80
Seabras Sapura | Basis difference allocated to rigs          
Schedule of Equity Method Investments [Line Items]          
Basis difference   (394)   (369)  
Seabras Sapura | Basis difference allocated to contracts          
Schedule of Equity Method Investments [Line Items]          
Basis difference   178   129  
Seabras Sapura Holding          
Schedule of Equity Method Investments [Line Items]          
Shareholder loans held as equity   132   123  
Book value of Seadrill investment   132   123  
SeaMex          
Schedule of Equity Method Investments [Line Items]          
Current assets   253   260  
Non-current assets   977   939  
Current liabilities   (149)   (141)  
Non-current liabilities   (627)   (586)  
Net Assets   $ 454   $ 472  
Ownership percentage   50.00% 50.00% 50.00% 50.00%
Seadrill share of book equity   $ 227   $ 236  
Basis difference   (186)   (214)  
Book value of Seadrill investment   41   22  
Share in results from associated companies (net of tax)   (12) $ 4 (19) $ 0
Impairment of investments   0 $ 0 0 $ 36
SeaMex | Basis difference allocated to rigs          
Schedule of Equity Method Investments [Line Items]          
Basis difference   (357)   (341)  
SeaMex | Basis difference allocated to contracts          
Schedule of Equity Method Investments [Line Items]          
Basis difference   171   127  
Sonadrill          
Schedule of Equity Method Investments [Line Items]          
Current assets   0   57  
Non-current assets   0   0  
Current liabilities   0   (9)  
Non-current liabilities   0   0  
Net Assets   $ 0   $ 48  
Ownership percentage   0.00% 0.00% 50.00% 0.00%
Seadrill share of book equity   $ 0   $ 24  
Book value of Seadrill investment   0   24  
Share in results from associated companies (net of tax)   $ 0 $ 0 $ (1) $ 0
v3.20.1
Newbuildings (Details) - Newbuildings - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Cost        
Opening balance $ 249 $ 249 $ 248 $ 0
Additions     1  
Fresh Start adjustments (249)      
Closing balance 0 0 249 0
Net book value $ 0 $ 249 $ 249 $ 0
v3.20.1
Drilling units (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Jul. 02, 2018
Cost          
Impairment $ 0 $ (414) $ 0 $ (696)  
Fresh Start Adjustments          
Accumulated depreciation          
Fresh Start adjustments, net   (5,734)      
Drilling units          
Cost          
Opening balance 17,038 17,335 6,890    
Additions 93 117 158    
Impairment   (414)      
Closing balance 6,890 17,038 7,048 17,335  
Accumulated depreciation          
Opening balance (4,507) (4,119) (231)    
Depreciation (231) (388) (416)    
Closing balance (231) (4,507) (647) (4,119)  
Net book value $ 6,659 12,531 $ 6,401 $ 13,216 $ 6,797
Drilling units | Fresh Start Adjustments          
Cost          
Fresh Start adjustments   (10,241)      
Accumulated depreciation          
Fresh Start adjustments   4,507      
Fresh Start adjustments, net   $ (5,734)      
v3.20.1
Drilling units - Additional Information (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Jul. 02, 2018
Drilling units [Line Items]          
Impairment of long-lived assets $ 0 $ 414 $ 0 $ 696  
Fresh Start Adjustments          
Drilling units [Line Items]          
Adjustments, increase (decrease), Drilling units   (5,734)      
Drilling units          
Drilling units [Line Items]          
Impairment of long-lived assets   414      
Net book value 6,659 12,531 6,401 13,216 $ 6,797
Cost 6,890 17,038 7,048 17,335 6,797
Accumulated depreciation $ 231 4,507 647 $ 4,119 $ 0
Drilling units | West Castor          
Drilling units [Line Items]          
Net book value     53    
Cost     72    
Accumulated depreciation     $ 19    
Drilling units | Fresh Start Adjustments          
Drilling units [Line Items]          
Adjustments, increase (decrease), Drilling units   $ (5,734)      
v3.20.1
Equipment (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2017
Equipment                
Cost                
Opening balance $ 93 $ 84 $ 34          
Additions 5 9 4          
Closing balance 34 93 38          
Cost 93 93 38 $ 38 $ 34 $ 29 $ 93 $ 84
Accumulated depreciation                
Opening balance (58) (55) (5)          
Depreciation (5) (3) (10)          
Closing balance (5) (58) (15)          
Accumulated depreciation $ (58) $ (58) $ (15) (15) (5) 0 (58) (55)
Net book value       $ 23 $ 29 $ 29 35 $ 29
Fresh Start Adjustments                
Cost                
Fresh Start adjustments, net             (6)  
Fresh Start Adjustments | Equipment                
Cost                
Fresh Start adjustments, gross             (64)  
Fresh Start adjustments, net             (6)  
Accumulated depreciation                
Fresh Start adjustments             $ 58  
v3.20.1
Debt - Schedule of Debt and Balance Sheet Presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Apr. 10, 2019
Dec. 31, 2018
Jul. 02, 2018
Debt Instrument [Line Items]        
Total debt principal $ 6,759   $ 7,086  
Less: debt discount and fees (136)   (172)  
Carrying value 6,623   6,914  
Debt due within one year 343   33  
Long-term debt 6,280   6,881  
Secured 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 476 $ 476 769  
Carrying value       $ 866
Debt contained within VIEs | Secured Debt        
Debt Instrument [Line Items]        
Total debt principal $ 621   $ 655  
v3.20.1
Debt - Credit Facilities (Details) - USD ($)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Total debt principal $ 6,759,000,000 $ 7,086,000,000
Secured Debt | Secured credit facilities    
Debt Instrument [Line Items]    
Minimum liquidity, initial period 525,000,000  
Minimum liquidity, subsequent period 400,000,000  
Total debt principal 5,662,000,000 $ 5,662,000,000
Secured Debt | $400 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity 400,000,000  
Repayments before maturity 47,000,000  
Final Repayment 88,000,000  
Total debt principal 135,000,000  
Book value of collateral vessels $ 150,000,000  
Secured Debt | $400 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.50%  
Secured Debt | $2,000 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 2,000,000,000  
Repayments before maturity 248,000,000  
Final Repayment 660,000,000  
Total debt principal 908,000,000  
Book value of collateral vessels $ 732,000,000  
Secured Debt | $2,000 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.00%  
Secured Debt | $440 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 440,000,000  
Repayments before maturity 23,000,000  
Final Repayment 41,000,000  
Total debt principal 64,000,000  
Book value of collateral vessels $ 58,000,000  
Secured Debt | $440 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 4.25%  
Secured Debt | $1,450 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 1,450,000,000  
Repayments before maturity 88,000,000  
Final Repayment 235,000,000  
Total debt principal 323,000,000  
Book value of collateral vessels $ 332,000,000  
Secured Debt | $1,450 million facility | LIBOR | Minimum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.35%  
Secured Debt | $1,450 million facility | LIBOR | Maximum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 4.00%  
Secured Debt | $360 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 360,000,000  
Repayments before maturity 73,000,000  
Final Repayment 137,000,000  
Total debt principal 210,000,000  
Book value of collateral vessels $ 191,000,000  
Secured Debt | $360 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.75%  
Secured Debt | $300 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 300,000,000  
Repayments before maturity 48,000,000  
Final Repayment 96,000,000  
Total debt principal 144,000,000  
Book value of collateral vessels $ 107,000,000  
Secured Debt | $300 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 4.00%  
Secured Debt | $1,750 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 1,750,000,000  
Repayments before maturity 299,000,000  
Final Repayment 576,000,000  
Total debt principal 875,000,000  
Book value of collateral vessels $ 865,000,000  
Secured Debt | $1,750 million facility | LIBOR | Minimum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.50%  
Secured Debt | $1,750 million facility | LIBOR | Maximum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.90%  
Secured Debt | $450 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 450,000,000  
Repayments before maturity 54,000,000  
Final Repayment 211,000,000  
Total debt principal 265,000,000  
Book value of collateral vessels $ 275,000,000  
Secured Debt | $450 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.50%  
Secured Debt | $1,500 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 1,500,000,000  
Repayments before maturity 355,000,000  
Final Repayment 770,000,000  
Total debt principal 1,125,000,000  
Book value of collateral vessels $ 1,020,000,000  
Secured Debt | $1,500 million facility | LIBOR | Minimum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 2.70%  
Secured Debt | $1,500 million facility | LIBOR | Maximum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 4.78%  
Secured Debt | $1,350 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 1,350,000,000  
Repayments before maturity 351,000,000  
Final Repayment 594,000,000  
Total debt principal 945,000,000  
Book value of collateral vessels $ 895,000,000  
Secured Debt | $1,350 million facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.00%  
Secured Debt | $950 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 950,000,000  
Repayments before maturity 198,000,000  
Final Repayment 368,000,000  
Total debt principal 566,000,000  
Book value of collateral vessels $ 648,000,000  
Secured Debt | $950 million facility | LIBOR | Minimum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.00%  
Secured Debt | $950 million facility | LIBOR | Maximum    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 4.42%  
Secured Debt | $450 million facility (2015)    
Debt Instrument [Line Items]    
Maximum borrowing capacity $ 450,000,000  
Repayments before maturity 63,000,000  
Final Repayment 39,000,000  
Total debt principal 102,000,000  
Book value of collateral vessels $ 176,000,000  
Secured Debt | $450 million facility (2015) | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 3.85%  
Secured Debt | Credit facilities contained within variable interest entities    
Debt Instrument [Line Items]    
Total debt principal $ 621,000,000  
Secured Debt | $390 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity 390,000,000  
Repayments before maturity 43,000,000  
Final Repayment 144,000,000  
Total debt principal 187,000,000  
Book value of collateral vessels 271,000,000  
Secured Debt | $375 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity 375,000,000  
Repayments before maturity 53,000,000  
Final Repayment 149,000,000  
Total debt principal 202,000,000  
Book value of collateral vessels 322,000,000  
Secured Debt | $475 million facility    
Debt Instrument [Line Items]    
Maximum borrowing capacity 475,000,000  
Repayments before maturity 52,000,000  
Final Repayment 180,000,000  
Total debt principal 232,000,000  
Book value of collateral vessels 191,000,000  
Secured Debt | ACE Facility    
Debt Instrument [Line Items]    
Final Repayment 63,000,000  
Ability to defer final repayment $ 437,000,000  
Secured Debt | ACE Facility | LIBOR    
Debt Instrument [Line Items]    
Basis spread on variable rate (as a percent) 5.50%  
Asia Offshore Drilling Ltd    
Debt Instrument [Line Items]    
Noncontrolling interest, ownership percentage by parent 66.24%  
Asia Offshore Drilling Ltd | Secured Debt | $360 million facility    
Debt Instrument [Line Items]    
Noncontrolling interest, ownership percentage by parent 67.00%  
v3.20.1
Debt - Senior Secured Notes (Details) - USD ($)
 6 Months Ended 12 Months Ended
Apr. 10, 2019
Nov. 14, 2018
Nov. 01, 2018
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Oct. 10, 2018
Jul. 02, 2018
May 09, 2018
Debt Instrument [Line Items]                    
Repayments of debt       $ 83,000,000 $ 153,000,000 $ 34,000,000 $ 754,000,000      
Interest expense on debt       237,000,000 $ 37,000,000 440,000,000 286,000,000      
Total debt principal       7,086,000,000   6,759,000,000        
Sale of West Rigel                    
Debt Instrument [Line Items]                    
Fair value of consideration received             126,000,000      
Exploration and production equipment | Sale of 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                 $ 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 66,000,000 $ 0      
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     $ 769,000,000   $ 476,000,000        
v3.20.1
Debt - Debt Maturity (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Debt Disclosure [Abstract]    
2020 $ 343  
2021 569  
2022 984  
2023 1,774  
2024 2,613  
2025 and thereafter 476  
Total debt principal $ 6,759 $ 7,086
v3.20.1
Debt - Covenants and Restrictions (Details)
 12 Months Ended
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]  
Amount of scheduled amortization payments that may be deferred and converted $ 500,000,000
Increase in margin interest in the form of paid in kind interest if certain covenants not met 0.0100
Secured Debt | Secured credit facilities  
Debt Instrument [Line Items]  
Net leverage ratio, twelve months ended March 31, 2022 4.5
Net leverage ratio, twelve months ended June 30, 2022 4.2
Net leverage ratio, twelve months ended September 30, 2022 3.9
Net leverage ratio, twelve months ended December 31, 2022 3.7
Net leverage ratio, twelve months ended March 31, 2023 3.4
Net leverage ratio, twelve months ended June 30, 2023 3.3
Net leverage ratio, twelve months ended September 30, 2023 3.1
Net leverage ratio, twelve months ended December 31, 2023 3.0
Net leverage ratio, twelve months ended March 31, 2024 2.8
Net leverage ratio, twelve months ended June 30, 2024 2.7
Net leverage ratio, twelve months ended September 30, 2024 2.4
Net leverage ratio, twelve months ended December 31, 2024 2.2
Debt service coverage ratio 1
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
v3.20.1
Other liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2017
Payables and Accruals [Abstract]          
Taxes payable $ 33 $ 42      
Contract liabilities 29 21 $ 0 $ 32 $ 55
Unfavorable drilling contracts 8 27      
Employee withheld taxes, social security and vacation payments 51 40      
Accrued interest expense 40 61      
Accrued expenses 137 107      
Lease liabilities 36 0      
Uncertain tax provisions 83 100      
Other liabilities 33 33      
Total Other Liabilities $ 450 $ 431      
v3.20.1
Other liabilities - Balance sheet presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Other Liabilities [Abstract]    
Other current liabilities $ 322 $ 310
Other non-current liabilities 128 121
Total Other Liabilities $ 450 $ 431
v3.20.1
Other liabilities - Unfavorable contracts (Details) - Unfavorable contracts - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other Liabilities [Line Items]      
Gross carrying amount $ (66) $ (66) $ (66)
Accumulated amortization 58 39 $ 0
Finite-lived Intangible Liabilities [Roll Forward]      
Net carrying amount, beginning balance (27) (66)  
Amortization of unfavorable contracts 19 39  
Net carrying amount, ending balance $ (8) $ (27)  
v3.20.1
Other liabilities - Future amortization of unfavorable contracts (Details) - Unfavorable contracts - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other Liabilities [Line Items]      
Weighted average remaining amortization period 7 years 9 months    
2019 $ (1)    
2020 (1)    
2021 (1)    
2022 (1)    
2023 and after (4)    
Total $ (8) $ (27) $ (66)
v3.20.1
Leases - Future Undiscounted Cash Flows for Operating Leases and Reconciliation to Operating Lease Liability (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Leases [Abstract]    
2020 $ 17  
2021 16  
2022 9  
2023 2  
2024 and thereafter 1  
Total 45  
Less short term leases (1)  
Less discount (8)  
Operating lease liability 36 $ 0
Current 12  
Non-current $ 24  
v3.20.1
Leases - Additional Information (Details)
$ in Millions
 1 Months Ended
Sep. 03, 2019
rig
Dec. 31, 2018
USD ($)
Leases [Abstract]    
Number of leased jack-up rigs | rig 3  
Rental commitments, total   $ 38
Rental commitments, 2019   11
Rental commitments, 2020   9
Rental commitments, 2021   9
Rental commitments, 2022   5
Rental commitments, 2023   3
Rental commitments, thereafter   $ 1
v3.20.1
Leases - Supplementary Information Regarding Lease Accounting (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2019
USD ($)
Operating Lease Cost:  
Operating lease cost $ 13
Other information:  
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 13
Right-of-use assets obtained in exchange for operating lease liabilities during the period $ 19
Weighted-average remaining lease term 18 months
Weighted-average discount rate 13.00%
v3.20.1
Leases - Operating Subleases (Details)
$ in Millions
Dec. 31, 2019
USD ($)
Leases [Abstract]  
2020 $ 1
2021 1
2022 1
2023 0
2024 0
Total $ 3
v3.20.1
Leases - Rent Expense (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Leases [Abstract]        
Operating lease cost     $ 13  
Rent expense $ 7 $ 9   $ 19
v3.20.1
Leases - Operating Leases, Lessor, Future Undiscounted Cash Flows, and Income (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2019
USD ($)
Operating lease payments receivable  
2020 $ 10
2021 10
2022 10
2023 9
2024 and thereafter 0
Total 39
Operating lease income $ 1
v3.20.1
Common shares (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Sep. 04, 2019
Jun. 05, 2019
Dec. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Aug. 16, 2018
Jul. 02, 2018
Jul. 01, 2018
Dec. 31, 2017
Dec. 31, 2016
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Beginning balance, shares     100,000,000              
Common stock, value issued     $ 10              
Treasury shares (in shares)               (4,244,080) (4,244,080,000,000) (4,244,080,000,000)
Treasury shares, value               $ (9) $ (9) $ (9)
Cancellation of Predecessor Company common stock (in shares)               (508,763,020)    
Cancellation of Predecessor Company common stock               $ (1,017)    
Cancellation of Predecessor Company common stock, treasury shares (in shares)               4,244,080    
Cancellation of Predecessor Company common stock, treasury shares               $ 9    
RSU share issuance (in shares) 234,973   234,973              
Ending balance, shares     100,234,973              
Common stock, value issued     $ 10              
Common shares, issued (in shares)     100,234,973 100,234,973 100,000,000   100,000,000 508,763,020 508,763,020,000,000 508,763,020,000,000
Common stock, value issued     $ 10 $ 10 $ 10   $ 10 $ 1,017 $ 1,017 $ 1,017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                    
Reserved for issuance under employee incentive plan (in shares)             11,111,111      
Common shares, par value (in dollars per share)       $ 0.10 $ 0.10   $ 0.10 $ 2.00 $ 2.00 $ 2.00
Common shares, authorized (in shares)   138,880,000   138,880,000 111,111,111   111,111,111      
Common shares, additional authorized (in shares)   27,768,889                
Employee incentive plan                    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                    
Reserved for issuance under employee incentive plan (in shares)           11,111,111        
v3.20.1
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, 2019
Dec. 31, 2017
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period $ 154 $ 399 $ 152 $ 542
Changes during period   (25)   (14)
Net (loss)/income attributable to non-controlling interest, before adjustments   (160)    
Redeemable non-controlling interest (9) (23) (21)  
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   (107)    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   197    
Net (loss)/income attributable to non-controlling interest (2) (6) (1) (129)
Balance, end of period 152 154 151 399
North Atlantic Drilling Ltd        
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period 0 76 0 165
Changes during period   (25)   0
Net (loss)/income attributable to non-controlling interest, before adjustments   (160)    
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   109    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   0    
Net (loss)/income attributable to non-controlling interest 0   0 (89)
Balance, end of period 0 0 0 76
Sevan Drilling Limited        
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period 0 226 0 291
Changes during period   0   0
Net (loss)/income attributable to non-controlling interest, before adjustments   (10)    
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   (216)    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   0    
Net (loss)/income attributable to non-controlling interest 0   0 (65)
Balance, end of period 0 0 0 226
Asia Offshore Drilling Ltd        
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period 0 149 0 149
Changes during period   0   0
Net (loss)/income attributable to non-controlling interest, before adjustments   1    
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   0    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   0    
Net (loss)/income attributable to non-controlling interest 0   0 0
Balance, end of period 0 0 0 149
Ship Finance VIEs        
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period 147 (59) 145 (69)
Changes during period   0   (14)
Net (loss)/income attributable to non-controlling interest, before adjustments   7    
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   0    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   199    
Net (loss)/income attributable to non-controlling interest (2)   (5) 24
Balance, end of period 145 147 140 (59)
Seadrill Nigeria Operations Limited        
Changes in non-controlling interest [Roll Forward]        
Balance, beginning of period 7 7 7 6
Changes during period   0   0
Net (loss)/income attributable to non-controlling interest, before adjustments   2    
Elimination of NCI of North Atlantic Drilling Ltd and Sevan Drilling Limited   0    
Fair value adjustment of the non-controlling interest in the Ship Finance VIEs and Seadrill Nigeria Operations Limited   (2)    
Net (loss)/income attributable to non-controlling interest 0   4 1
Balance, end of period $ 7 7 $ 11 $ 7
Non-controlling interest        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   (150)    
Non-controlling interest | North Atlantic Drilling Ltd        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   0    
Non-controlling interest | Sevan Drilling Limited        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   0    
Non-controlling interest | Asia Offshore Drilling Ltd        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   (150)    
Non-controlling interest | Ship Finance VIEs        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   0    
Non-controlling interest | Seadrill Nigeria Operations Limited        
Changes in non-controlling interest [Roll Forward]        
Redeemable non-controlling interest   $ 0    
v3.20.1
Non-controlling interest - Additional Information (Details) - USD ($)
 1 Months Ended
Feb. 29, 2020
Dec. 31, 2019
Jul. 01, 2018
Seadrill Nigeria Operations Limited | West Jupiter Drillship      
Noncontrolling Interest [Line Items]      
Ownership percentage   10.00%  
Subsequent Event      
Noncontrolling Interest [Line Items]      
Payment for option to purchase non-controlling interest $ 11,000,000    
Option to purchase non-controlling interest, purchase price $ 1    
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   66.24%  
v3.20.1
Redeemable non-controlling interest - Schedule of Changes in Redeemable Non-controlling Interest (Details) - Redeemable non-controlling interest - Asia Offshore Drilling Ltd - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Increase (Decrease) in Temporary Equity [Roll Forward]      
Beginning balance $ 30 $ 0 $ 38
Reclassification from non-controlling interest   150  
Fair value adjustment on initial recognition   (127)  
Net loss attributable to redeemable non-controlling interest (1) 2 (2)
Fresh start fair value adjustment   5  
Fair value adjustment 9   21
Ending balance $ 38 $ 30 $ 57
v3.20.1
Redeemable non-controlling interest - Additional Information (Details) - Asia Offshore Drilling Ltd - USD ($)
Apr. 04, 2018
Dec. 31, 2019
Redeemable Noncontrolling Interest [Line Items]    
Noncontrolling interest, ownership percentage by parent   66.24%
Mermaid    
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  
Purchase price threshold (less than) for cash settlement 50,000,000  
Purchase price threshold (greater than) for settlement in shares 50,000,000  
Purchase price, amount to be redeemed in cash if price is above threshold $ 50,000,000  
v3.20.1
Accumulated other comprehensive income/(loss) (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Jan. 01, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance $ 154 $ 6,959 $ 3,035 $ 10,063  
Other comprehensive (loss)/income (7) 0 (6) 5  
Ending balance 3,035 154 1,793 6,959  
Other comprehensive income, tax $ 0 1 $ 0    
Tax rate in Norway (as percent) 23.00%   22.00%    
Accumulated other comprehensive income/(loss)          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance $ 0 58 $ (7) 53  
Reset accumulated other comprehensive (loss)/income   (27)      
Beginning balance, adjusted         $ 27
Other comprehensive (loss)/income (7)   (6) 5  
Ending balance (7) 0 (13) 58  
Unrealized gain on marketable securities          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 31 0    
Beginning balance, adjusted         0
Ending balance 0 0 0 31  
Unrealized gain on foreign exchange          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 36 0    
Reset accumulated other comprehensive (loss)/income   (36)      
Beginning balance, adjusted         36
Ending balance 0 0 0 36  
Actuarial gain/(loss) relating to pension          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 (26) 1    
Reset accumulated other comprehensive (loss)/income   26      
Beginning balance, adjusted         (26)
Other comprehensive (loss)/income 1   (1)    
Ending balance 1 0 0 (26)  
Share in unrealized gains from associated companies          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 15 (5)    
Reset accumulated other comprehensive (loss)/income   (15)      
Beginning balance, adjusted         15
Other comprehensive (loss)/income (5)   (8)    
Ending balance (5) 0 (13) 15  
Change in unrealized gain on interest rate swaps in VIEs          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 2 0    
Reset accumulated other comprehensive (loss)/income   (2)      
Beginning balance, adjusted         2
Ending balance 0 0 0 2  
Change in debt component on Archer facility          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Beginning balance 0 0 (3)    
Beginning balance, adjusted         0
Other comprehensive (loss)/income (3)   3    
Ending balance $ (3) $ 0 $ 0 $ 0  
ASU 2016-01 - Financial Instruments          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Adoption of accounting standard update         0
ASU 2016-01 - Financial Instruments | Accumulated other comprehensive income/(loss)          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Adoption of accounting standard update         (31)
ASU 2016-01 - Financial Instruments | Unrealized gain on marketable securities          
AOCI Attributable to Parent, Net of Tax [Roll Forward]          
Adoption of accounting standard update         $ 31
v3.20.1
Share based compensation - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Sep. 04, 2019
Aug. 23, 2019
Sep. 04, 2018
Dec. 31, 2019
Apr. 26, 2019
Dec. 31, 2018
Aug. 16, 2018
Jul. 02, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Number of shares authorized (in shares)               11,111,111
Compensation cost for non-vested awards not yet recognized       $ 9   $ 9    
Weighted average vesting period       2 years        
Employee incentive plan                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Number of shares authorized (in shares)             11,111,111  
Restricted Stock Units                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Vesting period   3 years 3 years          
Shares vested in period (in shares) 200,000              
Restricted Stock Units | Employee incentive plan                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Number of shares authorized (in shares)   300,000.0 500,000.0          
Performance Shares | Employee incentive plan                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Number of shares authorized (in shares)         1,700,000.0      
Tranche One | Restricted Stock Units                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Percentage vested   33.00% 33.00%          
Tranche Two | Restricted Stock Units                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Percentage vested   33.00% 33.00%          
Tranche Three | Restricted Stock Units                
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                
Percentage vested   33.00% 33.00%          
v3.20.1
Share based compensation Share based compensation - Summary (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Share-based Payment Arrangement [Abstract]        
Share-based compensation expense $ 0 $ 9 $ 5 $ 7
Charge for schemes cancelled on emergence from Chapter 11 $ 6      
v3.20.1
Pension benefits - Additional Information (Details)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
Defined Benefit Plan Disclosure [Line Items]        
Accumulated benefit obligation $ 33   $ 37  
Total company contributions $ 9 $ 10 $ 16 $ 17
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  
v3.20.1
Pension benefits - Consolidated Balance Sheet Position (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Retirement Benefits [Abstract]    
Accrued pension liabilities - Non-current liabilities $ 2 $ 4
Less: Deferred tax (Asset) (1) (1)
Shareholders' equity $ 1 $ 3
v3.20.1
Pension benefits - Annual Pension Cost (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Retirement Benefits [Abstract]        
Service cost $ 2 $ 1 $ 3 $ 2
Interest cost 1 0 1 2
Gross pension cost for the year 3 1 4 4
Expected return on plan assets (1) 0 (1) (1)
Net pension cost for the year 2 1 3 3
Impact of settlement/curtailment funded status 0 0 0 (1)
Total net pension cost $ 2 $ 1 $ 3 $ 2
v3.20.1
Pension benefits - Funded Status of the Defined Benefit Plan (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2017
Retirement Benefits [Abstract]        
Projected benefit obligations at end of period $ 40 $ 37 $ 36 $ 38
Plan assets at market value (39) (33) $ (33) $ (33)
Accrued pension liabilities $ 1 $ 4    
v3.20.1
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, 2019
Dec. 31, 2017
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]        
Projected benefit obligations at beginning of period $ 36 $ 38 $ 37  
Interest cost 1 0 1 $ 2
Service cost 1 1 3  
Benefits paid (1) (1) (2)  
Change in unrecognized actuarial gain 2 (2) 0  
Foreign currency translations (2) 0 1  
Projected benefit obligations at end of period $ 37 $ 36 $ 40 $ 38
v3.20.1
Pension benefits - Change in Pension Plan Assets (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of plan assets at beginning of year $ 33 $ 33 $ 33
Estimated return 1 0 1
Contribution by employer 0 2 6
Administration charges 0 0 0
Benefits paid (1) (1) (2)
Actuarial gain 2 (1) 0
Foreign currency translations (2) 0 1
Fair value of plan assets at end of year $ 33 $ 33 $ 39
v3.20.1
Pension benefits - Assumptions Used in Calculation of Pension Obligations (Details)
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Retirement Benefits [Abstract]        
Rate of compensation increase at the end of year (as percent) 2.75% 2.50% 2.25% 2.50%
Discount rate at the end of year (as percent) 2.60% 2.40% 2.30% 2.40%
Prescribed pension index factor (as percent) 2.00% 2.00% 2.00% 1.50%
Expected return on plan assets for the year (as percent) 2.60% 2.40% 2.60% 2.40%
Employee turnover (as percent) 4.00% 4.00% 4.00% 4.00%
Expected increases in Social Security Base (as percent) 2.50% 2.25% 2.50% 2.25%
v3.20.1
Pension benefits - Weighted-Average Asset Allocation of Funds Related to Defined Benefit Plan (Details)
Dec. 31, 2019
Dec. 31, 2018
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) 13.60% 12.70%
Debt securities    
Defined Benefit Plan Disclosure [Line Items]    
Weighted-average asset allocation of funds related to defined benefit plan (as percent) 58.40% 70.00%
Real estate    
Defined Benefit Plan Disclosure [Line Items]    
Weighted-average asset allocation of funds related to defined benefit plan (as percent) 11.00% 9.90%
Money market    
Defined Benefit Plan Disclosure [Line Items]    
Weighted-average asset allocation of funds related to defined benefit plan (as percent) 16.50% 6.90%
Other    
Defined Benefit Plan Disclosure [Line Items]    
Weighted-average asset allocation of funds related to defined benefit plan (as percent) 0.50% 0.50%
v3.20.1
Pension benefits - Expected Annual Pension Plan Contributions Under Defined Benefit Plans (Details)
$ in Millions
Dec. 31, 2019
USD ($)
Defined Benefit Plan, Expected Future Employer Contributions [Abstract]  
2020 $ 4
2021 2
2022 2
2023 3
2024 2
2025-2029 13
Total payments expected during the next 10 years $ 26
v3.20.1
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, 2019
Dec. 31, 2017
Related Party Transaction [Line Items]        
Total related party operating revenues $ 46 $ 43 $ 110 $ 110
Total related party operating expenses 1 4 3 13
Total related party receivables 716   704  
Reimbursable amounts due from customers 10   21  
Management fee revenues        
Related Party Transaction [Line Items]        
Total related party operating revenues 41 41 109 84
In country support services revenues        
Related Party Transaction [Line Items]        
Total related party operating revenues 0 1 0 23
Related party inventory sales        
Related Party Transaction [Line Items]        
Total related party operating revenues 1 1 1 0
Other        
Related Party Transaction [Line Items]        
Total related party operating revenues 4 0 0 3
Work performed to mobilize drilling rig for first drilling contract        
Related Party Transaction [Line Items]        
Total related party operating revenues     167  
Total related party receivables     55  
In country support services expenses        
Related Party Transaction [Line Items]        
Total related party operating expenses 0 1 0 8
Interest income 15 12 26 34
Gains on related party derivatives 0 0 0 1
Interest income recognized on deferred contingent consideration 1 2 4 3
Total related party financial items 16 14 30 38
Related party inventory purchases        
Related Party Transaction [Line Items]        
Total related party operating expenses 0 0 1 3
Other related party operating expenses        
Related Party Transaction [Line Items]        
Total related party operating expenses 1 3 2 3
Net bareboat charter arrangements        
Related Party Transaction [Line Items]        
Total related party operating revenues $ 0 $ 0 0 $ 1
Related party reimbursable expenses        
Related Party Transaction [Line Items]        
Reimbursable amounts due from customers     $ 5  
v3.20.1
Related party transactions - Analysis of Related Party Receivable Balances (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Nov. 30, 2016
Mar. 31, 2015
Related Party Transaction [Line Items]            
Total related party receivables $ 716   $ 704      
Repayments received against related party loans (7) $ 13 43 $ 42    
Amount due from related parties - current 177   181      
Amount due from related parties - non-current 539   523      
Related party loans and interest            
Related Party Transaction [Line Items]            
Total related party receivables 476   488      
Deferred consideration arrangements            
Related Party Transaction [Line Items]            
Total related party receivables 59   31      
Convertible bond            
Related Party Transaction [Line Items]            
Total related party receivables 43   35      
Trading balances            
Related Party Transaction [Line Items]            
Total related party receivables 138   150      
SeaMex seller's credit and loans receivable | Related party loans and interest            
Related Party Transaction [Line Items]            
Total related party receivables 398   $ 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     $ 127      
Seabras loans receivable | Related party loans and interest            
Related Party Transaction [Line Items]            
Total related party receivables 78   66      
Repayments received against related party loans     15      
Seabras loans receivable | Accrued interest            
Related Party Transaction [Line Items]            
Total related party receivables     12      
Seabras loans receivable | Loan principal            
Related Party Transaction [Line Items]            
Total related party receivables     54      
Seabras loans receivable | Shareholder loans            
Related Party Transaction [Line Items]            
Repayments received against related party loans     9      
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Seadrill Partners            
Related Party Transaction [Line Items]            
Total related party receivables 59   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 31   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 27   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            
Related Party Transaction [Line Items]            
Total related party receivables 1   $ 0      
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 loans receivable | Related party loans and interest            
Related Party Transaction [Line Items]            
Interest rate on related party receivable     3.40%      
Maximum | LIBOR | Seabras loans receivable | Related party loans and interest            
Related Party Transaction [Line Items]            
Interest rate on related party receivable     3.99%      
v3.20.1
Related party transactions - Gains in Other Operating Income (Details) - USD ($)
$ / shares in Units, $ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Mar. 13, 2020
Apr. 26, 2017
Related Party Transaction [Line Items]            
Carrying value of related party receivable $ 716   $ 704      
Net (loss)/gain on debt extinguishment 0 $ 0 (22) $ 19    
Disposal Group, Disposed of by Sale, Not Discontinued Operations            
Related Party Transaction [Line Items]            
Total contingent consideration recognized 0 7 0 27    
Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Polaris earn out realized            
Related Party Transaction [Line Items]            
Total contingent consideration recognized 0 0 0 13    
Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Vela earn out realized            
Related Party Transaction [Line Items]            
Total contingent consideration recognized 0 $ 7 $ 0 $ 14    
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%      
Carrying value of related party receivable $ 43   $ 35      
Conversion price (in dollars per share)     $ 2.083      
Subordinated loans including accrued interest and fees | Archer | Subsequent Event            
Related Party Transaction [Line Items]            
Carrying value of related party receivable         $ 13  
Conversion price (in dollars per share)         $ 0.40  
Fair value | Subordinated loans including accrued interest and fees | Archer            
Related Party Transaction [Line Items]            
Carrying value of related party receivable     $ 35     56
Fair value | Embedded derivative option | Archer            
Related Party Transaction [Line Items]            
Carrying value of related party receivable     $ 0      
Carrying value | Subordinated loans including accrued interest and fees | Archer            
Related Party Transaction [Line Items]            
Carrying value of related party receivable           $ 37
v3.20.1
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, 2019
Dec. 31, 2017
Related Party Transaction [Line Items]        
Fair value (loss) / gain $ 0 $ 0 $ (11) $ 0
Archer | Fair value gain / (loss) of Archer debt component        
Related Party Transaction [Line Items]        
Fair value (loss) / gain (3) 2 3 1
Archer | Fair value (loss) / gain of Archer embedded conversion option        
Related Party Transaction [Line Items]        
Fair value (loss) / gain $ (9) $ 2 $ 0 $ (4)
v3.20.1
Related party transactions - Analysis of Related Party Payable Balances (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Related Party Transaction [Line Items]        
Total related party liabilities $ 261   $ 258  
Amounts due to related parties - current (39)   (19)  
Long-term debt due to related parties (222)   (239)  
Debt principal outstanding 655   621  
Related party loans payable        
Related Party Transaction [Line Items]        
Total related party liabilities 222   239  
Trading balances        
Related Party Transaction [Line Items]        
Total related party liabilities 39   $ 19  
Ship Finance VIEs | Related party loans payable        
Related Party Transaction [Line Items]        
Interest rate on related party payable     4.50%  
Interest expense on related party payable 7 $ 7 $ 14 $ 15
Variable Interest Entity, primary beneficiary        
Related Party Transaction [Line Items]        
Long-term debt due to related parties 222   239  
Debt principal outstanding 314   314  
Trading asset positions held against long-term loan $ 4   $ 0  
v3.20.1
Related party transactions - Other Related Party Transactions (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2013
Nov. 30, 2012
Seabras Sapura | Secured Debt | Sapura Esmeralda        
Related Party Transaction [Line Items]        
Maximum borrowing capacity     $ 36,000,000 $ 179,000,000
Sponsor guarantee | TL Offshore Sdn. Bhd | Seabras Sapura        
Related Party Transaction [Line Items]        
Total amount guaranteed $ 146,000,000 $ 165,000,000    
v3.20.1
Financial instruments and risk management - Interest Rate Risk (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Apr. 10, 2019
Dec. 31, 2018
Debt Instrument [Line Items]      
Principal outstanding $ 4,926    
Hedging instruments (180)    
Net exposure 4,746    
Impact of 1% increase in rates 47    
Total debt principal 6,759   $ 7,086
Total floating rate debt obligations      
Debt Instrument [Line Items]      
Principal outstanding 6,283    
Hedging instruments (180)    
Net exposure 6,103    
Impact of 1% increase in rates 61    
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 4,320    
Net exposure 4,320    
Impact of 1% increase in rates $ 43    
Impact that would be mitigated (as a percent) 4.00%    
Hypothetical increase in rates (as a percent) 1.00%    
Total floating rate debt obligations | Debt contained within VIEs      
Debt Instrument [Line Items]      
Principal outstanding $ 621    
Hedging instruments 0    
Net exposure 621    
Impact of 1% increase in rates 6    
Less: Cash and Restricted Cash      
Debt Instrument [Line Items]      
Principal outstanding (1,357)    
Hedging instruments 0    
Net exposure (1,357)    
Impact of 1% increase in rates (14)    
Secured Debt | Debt contained within VIEs      
Debt Instrument [Line Items]      
Total debt principal 621   655
Secured Debt | Senior secured notes      
Debt Instrument [Line Items]      
Total debt principal $ 476 $ 476 $ 769
v3.20.1
Financial instruments and risk management - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2017
Dec. 31, 2018
May 11, 2018
Apr. 26, 2017
Derivative [Line Items]          
Convertible bond issued by Archer $ 258   $ 261    
Expense for allowed claim values higher than previous fair values $ 89 $ 1,064      
Interest rate cap | Not designated as a hedge          
Derivative [Line Items]          
Derivative asset purchased       $ 68  
Interest rate cap | LIBOR          
Derivative [Line Items]          
Capped rate       2.87%  
Interest rate cap | LIBOR | Not designated as a hedge          
Derivative [Line Items]          
Capped rate 2.87%        
Archer | Convertible bond          
Derivative [Line Items]          
Convertible bond issued by Archer         $ 45
v3.20.1
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, 2019
Dec. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments $ (31) $ (4) $ (37) $ 11
Interest rate cap agreement        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments (22) (6) (37) 0
Archer convertible debt instrument        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments (9) 2 0 (4)
Interest rate swaps not designated for hedge accounting        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments 0 0 0 (31)
Cross currency swaps not designated for hedge accounting        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments $ 0 $ 0 $ 0 $ 46
v3.20.1
Financial instruments and risk management - Derivative Financial Instruments (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
May 11, 2018
Derivatives, Fair Value [Line Items]      
Outstanding principal $ 4,926,000,000    
Other Assets      
Derivatives, Fair Value [Line Items]      
Derivative financial instruments 3,000,000 $ 39,000,000  
Other Assets | Interest rate cap      
Derivatives, Fair Value [Line Items]      
Outstanding principal 4,500,000,000    
Derivative financial instruments $ 3,000,000 $ 39,000,000  
LIBOR cap | Interest rate cap      
Derivatives, Fair Value [Line Items]      
Applicable rate, floating     2.87%
v3.20.1
Fair values of financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Assets    
Related party loans receivable $ 704 $ 716
Fair value | Level 2    
Assets    
Related party loans receivable 395 476
Liabilities    
Related party loans payable by the VIE 229 222
Fair value | Level 2 | Secured credit facilities    
Liabilities    
Debt 5,464 5,388
Fair value | Level 2 | Credit facilities contained within variable interest entities    
Liabilities    
Debt 590 612
Fair value | Level 1 | Secured Debt    
Liabilities    
Debt 404 770
Carrying value | Level 2    
Assets    
Related party loans receivable 488 476
Liabilities    
Related party loans payable by the VIE 239 226
Carrying value | Level 2 | Secured credit facilities    
Liabilities    
Debt 5,549 5,519
Carrying value | Level 2 | Credit facilities contained within variable interest entities    
Liabilities    
Debt 598 626
Carrying value | Level 1 | Secured Debt    
Liabilities    
Debt $ 476 $ 769
v3.20.1
Fair values of financial instruments - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Fair value, recurring basis - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Level 1    
Assets    
Cash and cash equivalents $ 1,115 $ 1,542
Restricted cash 242 461
Marketable securities 11 57
Level 3    
Assets    
Related party loans receivable 35 43
Temporary equity    
Redeemable non-controlling interest 57 38
Level 2 | Interest rate cap    
Assets    
Interest rate cap $ 3 $ 39
v3.20.1
Fair values of financial instruments - Additional Information (Details)
$ in Millions
 6 Months Ended 12 Months Ended
Jul. 02, 2018
Dec. 31, 2018
USD ($)
Jul. 01, 2018
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2017
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
WACC 11.40%     11.00%  
Impairment of convertible bond from related party [1]   $ 0 $ 0 $ 11 $ 0
Change in fair value of debt component of Archer convertible bond   (3) 0 3 0
Related party loans receivable   716   704  
Total impairment of investments   0 0 302 841
Impairment   0 (414) $ 0 $ (696)
Exploration and production equipment          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Impairment     $ (414)    
Secured credit facilities | Discounted cash flow          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value, cost of debt percent       0.06  
Debt | Discounted cash flow          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value, cost of debt percent       0.06  
Discount Rate | Debt          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value, cost of debt percent       0.14  
Subordinated loans including accrued interest and fees | Archer          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Related party loans receivable   $ 43   $ 35  
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Commitments and contingencies (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Mar. 26, 2020
Guarantor Obligations [Line Items]          
Maximum guarantee $ 173   $ 361    
Loss incident - amounts recovered     4    
Insurance receivable 1   14    
Loss of hire insurance settlement 0 $ 0 10 $ 0  
Loss from Catastrophes          
Guarantor Obligations [Line Items]          
Loss incident - costs to repair equipment     19    
Guarantees in favor of customers          
Guarantor Obligations [Line Items]          
Maximum guarantee     215    
Guarantees in favor of customers | Seadrill Partners LLC          
Guarantor Obligations [Line Items]          
Maximum guarantee 7   15    
Guarantees in favor of customers | Northern Drilling          
Guarantor Obligations [Line Items]          
Maximum guarantee 0   150    
Guarantees in favor of customers | Sonadrill          
Guarantor Obligations [Line Items]          
Maximum guarantee 0   50    
Guarantee in favor of banks          
Guarantor Obligations [Line Items]          
Maximum guarantee 165        
Guarantee in favor of banks | Seabras Sapura          
Guarantor Obligations [Line Items]          
Maximum guarantee 165   146    
Guarantee in favor of suppliers | Seadrill Partners LLC          
Guarantor Obligations [Line Items]          
Maximum guarantee $ 1   $ 0    
Subsequent Event | Guarantee in favor of banks | SeaMex          
Guarantor Obligations [Line Items]          
Maximum guarantee         $ 22
v3.20.1
Variable Interest Entities - Summary of Sale and Leaseback Arrangements (Details)
$ in Millions
Dec. 31, 2019
USD ($)
rig
Variable Interest Entity [Line Items]  
Number of semi submersible rigs under sale leaseback arrangements | rig 2
West Taurus  
Variable Interest Entity [Line Items]  
Sale value $ 850
First repurchase option 418
Last repurchase option 154
West Hercules  
Variable Interest Entity [Line Items]  
Sale value 850
First repurchase option 580
Last repurchase option 138
West Linus  
Variable Interest Entity [Line Items]  
Sale value 600
First repurchase option 370
Last repurchase option 170
Repurchase obligation $ 86
v3.20.1
Variable Interest Entities - Summary of Average Bareboat Charter Rates per Day (Details)
$ / d in Thousands
Dec. 31, 2019
$ / d
West Taurus  
Sale Leaseback Transaction [Line Items]  
2020 101
2021 96
2022 96
2023 181
2024 177
West Hercules  
Sale Leaseback Transaction [Line Items]  
2020 100
2021 96
2022 96
2023 183
2024 176
West Linus  
Sale Leaseback Transaction [Line Items]  
2020 99
2021 99
2022 92
2023 189
2024 153
v3.20.1
Variable Interest Entities - Assets and Liabilities in Statutory Accounts of VIEs (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Variable Interest Entity [Line Items]    
Cash and cash equivalents $ 1,115 $ 1,542
Total assets 784 823
Debt principal outstanding 621 655
Debt discount (23) (29)
Variable Interest Entity, primary beneficiary    
Variable Interest Entity [Line Items]    
Cash and cash equivalents 22 2
Investment in finance lease 972 1,024
Total assets 994 1,026
Short-term interest-bearing debt 48 33
Long-term interest-bearing debt 550 593
Short-term amounts due to related parties 5 2
Short-term amounts due to related parties 12 31
Long-term debt due to related parties 239 222
Debt principal outstanding 314 314
Debt discount (75) (88)
Trading asset positions held against long-term loan 0 (4)
Total liabilities 854 881
Equity $ 140 $ 145
v3.20.1
Supplementary cash flow information (Details) - USD ($)
 1 Months Ended 6 Months Ended 12 Months Ended
Apr. 29, 2017
Jul. 31, 2017
Dec. 31, 2018
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2017
Non-cash investing activities            
Sale of rigs and equipment     $ 0 $ 0 $ 0 $ 103,000,000
Proceeds from repayment of short-term loan from related parties due to Seadrill Partners insulation from Seadrill Limited     0 0 0 109,000,000
Derecognition of Sevan Developer newbuild asset     0 0 0 620,000,000
Derecognition of Sevan Developer construction obligation     0 0 0 (526,000,000)
Non-cash financing activities            
Repayment of debt following sale of rigs and equipment $ (103,000,000)   0 0 0 (103,000,000)
Repayment of debt following insulation of Seadrill Partners from Seadrill Limited     0 0 0 (109,000,000)
Dividend to non-controlling interests in VIEs     0 0 0 (14,000,000)
Sale of rigs and equipment 122,000,000   0 126,000,000 0 122,000,000
Loss on disposals [1]     $ 0 $ 0 $ 0 245,000,000
Seadrill Partners LLC | $440 million facility | Secured Debt            
Non-cash financing activities            
Repayments of lines of credit           109,000,000
Debt, face amount           440,000,000
Disposal of Sevan Developer contract            
Non-cash financing activities            
Fair value of consideration received           0
Loss on disposals           $ 75,000,000
Drilling units | West Triton, West Mischief and West Resolute            
Non-cash financing activities            
Fair value of consideration received 225,000,000          
Loss on disposals $ 166,000,000          
Drilling units | Disposal of Sevan Developer contract            
Non-cash financing activities            
Disposal group, including discontinued operation, property, plant and equipment   $ 620,000,000        
Disposal group, including discontinued operation, construction payable   526,000,000        
Disposal group, including discontinued operation, accrued liabilities   19,000,000        
Loss on disposals   $ 75,000,000        
[1] Includes transactions with related parties. Refer to Note 31 "Related party transactions".
v3.20.1
Subsequent Events (Details) - USD ($)
$ / shares in Units, $ in Millions
Mar. 13, 2020
Dec. 31, 2019
Dec. 31, 2018
Subsequent Event [Line Items]      
Carrying value of related party receivable   $ 704 $ 716
Subordinated loans including accrued interest and fees | Archer      
Subsequent Event [Line Items]      
Carrying value of related party receivable   $ 35 $ 43
Conversion price (in dollars per share)   $ 2.083  
Subordinated loans including accrued interest and fees | Archer | Subsequent Event      
Subsequent Event [Line Items]      
Carrying value of related party receivable $ 13    
Conversion price (in dollars per share) $ 0.40    
v3.20.1
Label Element Value
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity $ 2,827,000,000
Common Stock [Member]  
Cancellation Of Predecessor Equity, Shares sdrl_CancellationOfPredecessorEquityShares 1,008,000,000
AOCI Attributable to Parent [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity $ 27,000,000
Noncontrolling Interest [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity 107,000,000
Parent [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity 2,720,000,000
Retained Earnings [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity (3,593,000,000)
Additional Paid-in Capital [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity 3,322,000,000
Other Additional Capital [Member]  
Cancellation Of Predecessor Equity sdrl_CancellationOfPredecessorEquity 1,956,000,000
Accounting Standards Update 2016-16 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (84,000,000)
Accounting Standards Update 2016-16 [Member] | Noncontrolling Interest [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (25,000,000)
Accounting Standards Update 2016-16 [Member] | Parent [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (59,000,000)
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (59,000,000)
Accounting Standards Update 2016-09 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption 7,000,000
Accounting Standards Update 2016-09 [Member] | Parent [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption 7,000,000
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 7,000,000