SEADRILL LTD, 6-K filed on 8/24/2020
Report of Foreign Issuer
v3.20.2
Cover
 6 Months Ended
Jun. 30, 2020
Cover [Abstract]  
Entity Registrant Name SEADRILL LTD
Entity Central Index Key 0001737706
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2020
Document Fiscal Period Focus Q2
Document Type 6-K
Amendment Flag false
Document Period End Date Jun. 30, 2020
v3.20.2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Operating revenues        
Contract revenues $ 189 $ 253 $ 392 $ 508
Revenues 277 321 598 623
Operating expenses        
Depreciation (82) (104) (182) (212)
Amortization of intangibles 0 (38) 0 (73)
Selling, general and administrative expenses (17) (24) (37) (47)
Total operating expenses (365) (397) (748) (796)
Other operating items        
Impairment of long-lived assets 0 0 (1,230) 0
Other operating income 0 3 8 29
Total other operating items 0 3 (1,222) 29
Operating loss (88) (73) (1,372) (144)
Financial items and other income        
Interest income [1] 8 19 20 39
Interest expenses [1] (92) (122) (200) (254)
Loss on impairment of equity method investments 0 0 (47) 0
Share in results from associated companies 4 (23) (66) (65)
Loss on derivative financial instruments [1] 0 (6) (1) (33)
Net loss on debt extinguishment 0 (22) 0 (22)
Foreign exchange loss (2) 4 (24) 2
Loss on marketable securities 1 (14) (6) (35)
Impairment of convertible bond from related party 0 0 (29) 0
Other financial items [1] (9) 1 (21) (2)
Total financial items and other non-operating items (90) (163) (374) (370)
Loss before income taxes (178) (236) (1,746) (514)
Income tax benefit/(expense) (5) 30 (2) 12
Net loss (183) (206) (1,748) (502)
Net loss attributable to shareholder (181) (203) (1,745) (498)
Net income/(loss) attributable to non-controlling interest (1) (2) (2) (2)
Net income/(loss) attributable to redeemable non-controlling interest $ (1) $ (1) $ (1) $ (2)
Basic loss per share (in dollars per share) $ (1.80) $ (2.03) $ (17.40) $ (4.98)
Diluted loss per share (in dollars per share) $ (1.80) $ (2.03) $ (17.40) $ (4.98)
Reimbursable revenues/ expenses        
Operating revenues        
Revenues $ 10 $ 10 $ 19 $ 19
Operating expenses        
Expenses (10) (9) (17) (18)
Management contracts        
Operating revenues        
Revenues [1] 73 58 178 95
Operating expenses        
Expenses (104) (49) (208) (82)
Other revenues        
Operating revenues        
Revenues [1] 5 0 9 1
Vessel and rig operating expenses        
Operating expenses        
Expenses [1] $ (152) $ (173) $ (304) $ (364)
[1] Includes transactions with related parties. Refer to Note 26 – Related party transactions.
v3.20.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net loss $ (183) $ (206) $ (1,748) $ (502)
Other comprehensive loss, net of tax:        
Change in fair value of debt component of Archer convertible bond 2 1 2 6
Actuarial loss relating to pension (7) 0 (7) 0
Share of other comprehensive loss from associated companies (1) (5) (17) (9)
Other comprehensive loss: (6) (4) (22) (3)
Total comprehensive loss for the period (189) (210) (1,770) (505)
Comprehensive loss attributable to the shareholder (187) (207) (1,767) (501)
Comprehensive loss attributable to the non-controlling interest (1) (2) (2) (2)
Comprehensive loss attributable to the redeemable non-controlling interest $ (1) $ (1) $ (1) $ (2)
v3.20.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 849 $ 1,115
Restricted cash 80 135
Accounts receivable, net 157 173
Amounts due from related parties, net 184 181
Other current assets 139 158
Total current assets 1,414 1,773
Non-current assets    
Investments in associated companies 257 389
Drilling units 5,077 6,401
Restricted cash 91 107
Deferred tax assets 6 4
Equipment 20 23
Amounts due from related parties, net 382 523
Other non-current assets 44 59
Total non-current assets 5,877 7,506
Total assets 7,291 9,279
Current liabilities    
Debt due within one year 420 343
Trade accounts payable 70 86
Amounts due to related parties - current 11 19
Other current liabilities 281 322
Total current liabilities 782 770
Non-current liabilities    
Long-term debt 6,215 6,280
Long-term debt due to related parties 238 239
Deferred tax liabilities 12 12
Other non-current liabilities 116 128
Total non-current liabilities 6,581 6,659
Commitments and contingencies (See note 27)
Redeemable non-controlling interest 26 57
Equity    
Common shares of par value $0.10 per share: 138,880,000 shares authorized and 100,329,887 issued at June 30, 2020 (Common shares of par value $0.10 per share: 138,880,000 shares authorized and 100,234,973 issued at December 31, 2019) 10 10
Additional paid-in capital 3,498 3,496
Accumulated other comprehensive loss (35) (13)
Retained loss (3,709) (1,851)
Total shareholders' equity (236) 1,642
Non-controlling interest 138 151
Total equity (98) 1,793
Total liabilities, redeemable non-controlling interest and equity $ 7,291 $ 9,279
v3.20.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Common shares, par value (in dollars per share) $ 0.10 $ 0.10
Common shares authorized (in shares) 138,880,000 138,880,000
Common stock, outstanding (in shares) 100,329,887 100,234,973
v3.20.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash Flows from Operating Activities    
Net loss $ (1,748) $ (502)
 Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 182 212
Amortization of unfavorable and favorable contracts 0 73
Share in results from associated companies (net of tax) 66 65
Impairment loss on associated companies 47 0
Impairment of convertible bond from related party 29 0
Unrealized loss related to derivative financial instruments 1 33
Loss on impairment of long-lived assets 1,230 0
Deferred tax benefit (2) (26)
Unrealized loss on marketable securities 6 35
Payment-in-kind interest 7 2
Amortization of discount on debt 17 18
Net loss on debt extinguishment 0 22
Unrealized foreign exchange loss 22 0
Change in allowance for expected credit losses 63 0
Other cash movements in operating activities    
Distributions received from associated company 2 2
Payments for long-term maintenance (71) (37)
Settlement of payment-in-kind interest on Senior secured notes 0 (39)
Changes in operating assets and liabilities, net of effect of acquisitions and disposals    
Trade accounts receivable 16 (20)
Trade accounts payable (16) 8
Prepaid expenses/accrued revenue 1 3
Related party receivables (88) 34
Related party payables (9) (17)
Other assets 5 (46)
Other liabilities (39) (13)
Deferred revenue (1) 8
Other, net 2 1
Net cash flows used in operating activities (278) (184)
Cash Flows from Investing Activities    
Additions to drilling units and equipment (14) (27)
Contingent consideration received 16 16
Purchase of call option for non-controlling interest shares (11) 0
Loans granted to related parties (8) 0
Payments received from loans granted to related parties 4 0
Net cash flows used in investing activities (13) (11)
Cash Flows from Financing Activities    
Repayments of secured credit facilities (24) (10)
Mandatory redemption of senior secured notes 0 (333)
Net cash used in financing activities (24) (343)
Effect of exchange rate changes on cash (22) 4
Net decrease in cash and cash equivalents, including restricted cash (337) (534)
Cash and cash equivalents, including restricted cash, at beginning of the period 1,357 2,003
Cash and cash equivalents, including restricted cash, at the end of period 1,020 1,469
Supplementary disclosure of cash flow information    
Interest paid, net of capitalized interest (167) (219)
Taxes paid $ (7) $ (25)
v3.20.2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($)
$ in Millions
Total
Cumulative Effect, Period of Adoption, Adjustment
Cumulative Effect, Period of Adoption, Adjusted Balance
Total equity before NCI
Total equity before NCI
Cumulative Effect, Period of Adoption, Adjustment
Total equity before NCI
Cumulative Effect, Period of Adoption, Adjusted Balance
Common shares
Common shares
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional paid-in capital
Additional paid-in capital
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated other comprehensive loss
Accumulated other comprehensive loss
Cumulative Effect, Period of Adoption, Adjusted Balance
Retained loss
Retained loss
Cumulative Effect, Period of Adoption, Adjustment
Retained loss
Cumulative Effect, Period of Adoption, Adjusted Balance
NCI
NCI
Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning balance at Dec. 31, 2018 $ 3,035     $ 2,883     $ 10   $ 3,491   $ (7)   $ (611)     $ 152  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Other comprehensive income (loss) 1     1             1            
Share-based compensation charge 1     1         1                
Fair Value adjustment AOD Redeemable NCI (1)     (1)                 (1)        
Net loss (295)     (295)                 (295)        
Ending balance at Mar. 31, 2019 2,741     2,589     10   3,492   (6)   (907)     152  
Beginning balance at Dec. 31, 2018 3,035     2,883     10   3,491   (7)   (611)     152  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Other comprehensive income (loss) (3)                                
Ending balance at Jun. 30, 2019 2,533     2,383     10   3,493   (10)   (1,110)     150  
Beginning balance at Mar. 31, 2019 2,741     2,589     10   3,492   (6)   (907)     152  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Other comprehensive income (loss) (4)     (4)             (4)            
Share-based compensation charge 1     1         1                
Net loss (205)     (203)                 (203)     (2)  
Ending balance at Jun. 30, 2019 2,533     2,383     10   3,493   (10)   (1,110)     150  
Beginning balance at Dec. 31, 2019 1,793 $ (143) $ 1,650 1,642 $ (143) $ 1,499 10 $ 10 3,496 $ 3,496 (13) $ (13) (1,851) $ (143) $ (1,994) 151 $ 151
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Purchase option on non-controlling interest (11)                             11  
Other comprehensive income (loss) (16)     (16)             (16)            
Share-based compensation charge 1     1         1                
Fair Value adjustment AOD Redeemable NCI 27     27                 27        
Net loss (1,565)     (1,564)                 (1,564)     (1)  
Ending balance at Mar. 31, 2020 $ 86     (53)     10   3,497   (29)   (3,531)     139  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201613Member                                
Beginning balance at Dec. 31, 2019 $ 1,793 $ (143) $ 1,650 1,642 $ (143) $ 1,499 10 $ 10 3,496 $ 3,496 (13) $ (13) (1,851) $ (143) $ (1,994) 151 $ 151
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Other comprehensive income (loss) (22)                                
Ending balance at Jun. 30, 2020 $ (98)     (236)     10   3,498   (35)   (3,709)     138  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201613Member                                
Beginning balance at Mar. 31, 2020 $ 86     (53)     10   3,497   (29)   (3,531)     139  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Other comprehensive income (loss) (6)     (6)             (6)            
Share-based compensation charge 1     1         1                
Fair Value adjustment AOD Redeemable NCI 3     3                 3        
Net loss (182)     (181)                 (181)     (1)  
Ending balance at Jun. 30, 2020 $ (98)     $ (236)     $ 10   $ 3,498   $ (35)   $ (3,709)     $ 138  
v3.20.2
General information
 6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
General information General information
Seadrill Limited is incorporated in Bermuda and is a publicly listed company on the Oslo Stock Exchange. We provide offshore drilling services to the oil and gas industry. As at June 30, 2020 we owned and operated 35 offshore drilling units. Our fleet consists of drillships, jack-up rigs and semi-submersible rigs for operations in shallow and deepwater areas, and in benign and harsh environments. We also manage and operate a further 20 drilling units for our related parties Seadrill Partners, SeaMex, Northern Ocean and Sonadrill.

Except where the context otherwise requires or where otherwise indicated, the terms “Seadrill,” “the Group,” “we,” “us,” “our,” “the Company” and “our Business” refer to either Seadrill Limited, any one or more of its consolidated subsidiaries, or to all such entities.

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 our interests in associated entities. Investments in companies in which we control, or directly or indirectly hold 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 (though not directly or indirectly holding more than 50% of the voting control).

The accompanying unaudited interim financial statements, in the opinion of management, include all material adjustments that are considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America. The accompanying unaudited interim financial statements do not include all of the disclosures required in complete annual financial statements. These financial statements should be read in conjunction with our annual financial statements filed with the SEC on Form 20-F for the year ended December 31, 2019 (SEC File No. 333-224459).

The financial information in this report has been prepared on the basis that we will continue as a going concern, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Therefore, financial information in this report does not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if we were unable to realize our assets and settle our liabilities as a going concern in the normal course of operations. Such adjustments could be material.

Significant accounting policies

The accounting policies adopted in the preparation of the unaudited interim financial statements are consistent with those followed in the preparation of our annual audited Consolidated Financial Statements for the year ended December 31, 2019, except as set out below and in Note 2 - Recent accounting pronouncements.

Credit Losses

We adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) on January 1, 2020. Refer to Note 3 – Current Expected Credit Losses for more information on the adoption of this update and the changes to our accounting policy.

Use of Estimates

The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses and reserves and allowances will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.

Presentation of rig management revenues and expenses

In 2019, we entered into management contract arrangements with Sonadrill and Northern Ocean which increased the volume of activity where we are managing rigs on behalf of other parties. We have therefore separately presented the revenues and expenses earned under arrangements where we provide management or operational services to other parties as separate revenue and expense line items and have presented the results of these activities as a separate operating segment (see Note 4 - Segment information).

We have recast the comparative figures in this report for the new presentation. The below table provides a comparison of the current presentation of the comparatives back to the previously reported numbers, for affected line items:
Consolidated Statement of Operations for the three months ended June 30, 2019

(In $ millions)  As previously reportedAdjustmentAs currently reported
Reimbursable revenues44 (34)10 
Management contract revenues— 58 58 
Other revenues24 (24)— 
Vessel and rig operating expenses(182)9 (173)
Reimbursable expenses(43)34 (9)
Management contract expenses— (49)(49)
Selling, general and administrative expenses(30)6 (24)


Consolidated Statement of Operations for the six months ended June 30, 2019
(In $ millions)  As previously reportedAdjustmentAs currently reported
Reimbursable revenues70 (51)19 
Management contract revenues— 95 95 
Other revenues45 (44)1 
Vessel and rig operating expenses(381)17 (364)
Reimbursable expenses(69)51 (18)
Management contract expenses— (82)(82)
Selling, general and administrative expenses(61)14 (47)
v3.20.2
Recent accounting pronouncements
 6 Months Ended
Jun. 30, 2020
Accounting Changes and Error Corrections [Abstract]  
Recent accounting pronouncements Recent accounting pronouncements
Recently adopted accounting standards

We adopted the following accounting standard updates ("ASUs") since the reporting date of our Form 20-F report which covered the period to December 31, 2019.

ASU 2016-13 - Financial Instruments - Measurement of Credit Losses on Financial Instruments (Also 2019-04, 2019-05, 2019-10 & 2019-11)

Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The accounting standard update requires us to establish allowances for estimated future credit losses on all trade and loan receivables, based on a broad range of supportable information and evidence to inform our estimates. Refer to Note 3 - Current Expected Credit Losses. This is different to the previous guidance, which applied an "incurred loss" model and only required us to record allowances for credit losses where it was probable that a receivable would not be recovered in full.

On adoption of the guidance, we recorded an allowance of $143 million, primarily related to subordinated loan receivables due from certain affiliated entities (see note 26 for details). Our third party customers are mostly international or national oil companies with high credit standing and we have historically had a very low incidence of bad debt expense from these customers. Therefore, the adoption of the new guidance has not had a material impact on receivables due from third party customers.

We have recorded the offsetting entry for the initial reserve as a direct adjustment to retained earnings. The new guidance requires us to reassess the allowance each reporting period and record any adjustment to the reserve as a credit loss expense in the Consolidated Statement of Operations. The expense is allocated between operating and financial items on the statement of operations based on the nature of the assessed balance. Receivable balances are presented net of the allowance on the Consolidated Balance Sheet.
Other ASUs

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 2018-13 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 is effective for annual and interim periods beginning after December 15, 2019.

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 is effective for annual and interim periods beginning after December 15, 2019.

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 is effective for annual and interim periods beginning after December 15, 2019.

Recently issued accounting standards

The FASB issued the following ASUs that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods:

ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures.

ASU 2020-04 Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This update is intended to provide relief to to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures.
v3.20.2
Current Expected Credit Losses
 6 Months Ended
Jun. 30, 2020
Credit Loss [Abstract]  
Current Expected Credit Losses Current Expected Credit Losses
As set out in note 2, we adopted accounting standard update 2016-13 effective January 1, 2020. The new guidance replaces the “incurred loss” model required under the previous guidance with a current “expected credit loss” (or CECL) model that contemplates a broader range of information to estimate expected credit losses over the contractual lifetime of the asset. The CECL impairment model requires an estimate of expected credit losses, that considers forecasts of future economic conditions in addition to information about past events and current conditions. It also requires us to consider the risk of loss even if it is remote. This is a departure from the previous guidance, where we recorded an allowance against a receivable balance only if it was probable that we would not recover the full amount due to us.

The standard provides flexibility in how to determine the expected credit loss for financial assets, including the ability to group financial assets with similar risk characteristics, assess the contractual term where it is not formalized, and obtain and adjust the relevant historical loss information. The in-scope balances required to be assessed under the new standard include external trade receivables, related party reimbursable balances, related party loan receivables and related party trade receivables. Refer to Note 26 - Related Party Transactions for detail of related party receivables.

We have used a probability-of-default model to estimate expected credit losses for all classes of in-scope receivable balances. Under this methodology we use data such as customer credit ratings, maturity of loan, security of loan, and incorporate historical data published by credit rating agencies, to estimate the chance of default and loss given default. We then multiply the balance outstanding by the estimated chance of default and loss given default to calculate the allowance required for the expected credit loss.

We monitor the credit quality of receivables by re-assessing credit ratings, assumed maturities and probability-of-default on a quarterly basis.

The following table summarizes the movement in the allowance for credit losses for the three and six months ended June 30, 2020:

 (In $ millions)
Allowance for credit losses - trade receivablesAllowance for credit losses - other current assetsAllowance for credit losses - related party STAllowance for credit losses related party LTTotal Allowance for credit losses
As at January 1, 2020— — 15 128 143 
Credit loss expense— — 18 2 20 
As at March 31, 2020— — 33 130 163 
Credit loss expense— 5 36 2 43 
As at June 30, 2020— 5 69 132 206 


The below table shows the classification of the credit loss expense within the consolidated statement of operations.

(In $ millions)Three months ended June 30, 2020Six months ended June 30, 2020
Management contract expenses41 50 
Other financial items2 13 
Total43 63 
Changes in allowances for external and related party trade receivables and reimbursable amounts due are included in operating expenses, while changes in the allowances for related party loan receivables are included in other financial items. The increase in the allowance for the three months ended June 30, 2020 was caused by a decline in credit ratings, driven by market conditions in the period, together with an increase in expected maturities for receivables due from certain related parties. These factors led to a higher probability of default for certain related party receivables, which drove an increase in the overall credit loss allowance.
v3.20.2
Segment information
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment information Segment information
Operating segments
We provide drilling and related services to the offshore oil and gas industry. We have four 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-ups: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environments;
3.Management contracts: Management services to third parties and related parties. Income and expenses related to these management services are classified under this segment; and
4.Other: Corporate items that are not allocated to the three segments above.

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
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters121 172 245 353 
Jack-ups82 89 172 172 
Management contracts74 59 179 96 
Other— 1 2 2 
Total operating revenues277 321 598 623 

Depreciation
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters63 85 143 172 
Jack-ups18 17 36 36 
Management contracts1 2 3 4 
Total82 104 182 212 

Amortization of intangibles
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters— 27 — 51 
Jack-ups— 10 — 21 
Management contracts— 1 — 1 
Total— 38 — 73 

Operating loss - Net loss
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floater operating loss(68)(80)(1,353)(161)
Jack-up operating income16 4 21 18 
Management contracts operating (loss)/income(31)8 (32)10 
Other operating loss(5)(5)(8)(11)
Operating loss(88)(73)(1,372)(144)
Unallocated items: 
Total financial items and other(90)(163)(374)(370)
Income taxes(5)30 (2)12 
Net loss(183)(206)(1,748)(502)
Drilling units - Total assets
(In $ millions)As at June 30, 2020As at December 31,
2019
Floaters3,860 5,144 
Jack-ups1,064 1,104 
Other153 153 
Total drilling units5,077 6,401 
Unallocated items:
Investments in associated companies257 389 
Marketable securities5 11 
Cash and restricted cash1,020 1,357 
Other assets932 1,121 
Total assets7,291 9,279 

Drilling units - Capital expenditures
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters40 29 68 41 
Jack-ups3 10 8 16 
Other8 1 9 7 
Total51 40 85 64 

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 information presents our revenues and fixed assets by geographic area:
Revenues
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Norway146 102 291 169 
Angola32 34 98 49 
Saudi Arabia31 35 62 69 
United States30 14 59 31 
Brazil5 51 19 93 
Nigeria— 53 5 104 
Others (1)
33 32 64 108 
Total277 321 598 623 
(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)
(In $ millions)As at June 30, 2020As at December 31,
2019
Norway1,091 1,818 
Malaysia787 805 
United States636 644 
Spain605 615 
Namibia631 323 
Other (2)
1,327 2,196 
Total5,077 6,401 
(1)  The countries in this table represent the location of the drilling unit at the end of the reporting period and are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by the assets during the period. In most cases these locations are different to the country in which the Company that owns the drilling unit is registered.
(2)  "Other" represents countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented.

Major Customers
We had the following customers with total revenues greater than 10% in any of the periods presented:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Equinor21 %14 %19 %17 %
ConocoPhillips15 %12 %13 %12 %
Saudi Aramco11 %11 %10 %11 %
Northern Ocean9 %7 %14 %7 %
Total2 %22 %4 %22 %
Petrobras2 %13 %3 %13 %
v3.20.2
Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
The following table provides information about receivables and contract liabilities from our contracts with customers:
(In $ millions)As at June 30, 2020 As at December 31,
2019
Accounts receivable, net157 173 
Current contract liabilities (deferred revenue) (1)
(22)(20)
Non-current contract liabilities (deferred revenue) (2)
(11)(9)

(1)  Current contract liabilities balances are included in “Other current liabilities” in our Consolidated Balance Sheet.
(2) Non-current contract liabilities balances are included in “Other non-current liabilities” in our Consolidated Balance Sheet.

Significant changes in the contract assets and the contract liabilities balances during the three months ended June 30, 2019 are as follows:
(In $ millions)  Contract AssetsContract LiabilitiesNet Contract
Balances
Net contract liability at January 1, 2019  1 (21)(20)
Amortization of revenue that was included in the beginning contract liability balance  — 3 3 
Cash received, excluding amounts recognized as revenue  — (13)(13)
Cash received against the beginning contract asset balance  (1)— (1)
Contract assets recognized during the period — — — 
Net contract liability at June 30, 2019— (31)(31)


Significant changes in the contract assets and the contract liabilities balances during the six months ended June 30, 2020 are as follows:
(In $ millions)  Contract AssetsContract LiabilitiesNet Contract
Balances
Net contract liability at January 1, 2020  — (29)(29)
Amortization of revenue that was included in the beginning contract liability balance  — 15 15 
Cash received, excluding amounts recognized as revenue— (19)(19)
Net contract liability at June 30, 2020  — (33)(33)

Certain direct and incremental costs that are expected to be recovered, relate directly to a contract, and enhance resources that will be used in satisfying our performance obligations in the future. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract.
Deferred revenue - The deferred revenue balance of $22 million reported in "Other current liabilities" at June 30, 2020 is expected to be realized within the next twelve months and $11 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 June 30, 2020. The actual timing of recognition of such amounts may vary due to factors outside of our control.
v3.20.2
Impairment of long-lived assets
 6 Months Ended
Jun. 30, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
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. No indicators of impairment have been identified in the three months ended June 30, 2020.

During the first quarter, the impact of COVID-19 on the global economy had a negative impact on our industry. As global oil demand fell, we also saw an increase in oil supply, leading to a surplus of reserves. Brent crude fell from $66 as at December 31, 2019 to $23 as at March 31, 2020.

The oil price decline has led to pressures on our customers to reduce their capital expenditures in the near-term until we see a recovery in the oil price. As a consequence, this has led to reduced forecasted day rates and utilization for 2020, and an extended time for these to recover in future years as the market supply and demand re-balance. We have therefore concluded that an impairment triggering event had occurred for our drilling unit fleet in the three months ended March 31, 2020.

On assessment of asset recoverability through an estimated undiscounted future net cash flow we calculated the value to be lower than the carrying value for seven of our older units, resulting in an impairment expense of $1,230 million which was classified within "Impairment of long-lived assets" on our Consolidated Statement of Operations for the six months ended June 30, 2020.

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 "WACC" of 12.8%. 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. For fair value considerations refer to Note 24 - Risk management and financial instruments.
v3.20.2
Loss on impairment of equity method investments
 6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Loss on impairment of equity method investments Loss on impairment of equity method investments
The loss on impairments of our equity method investments for the three and six months ended June 30, 2020 and three and six months ended June 30, 2019 were as follows:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Seadrill Partners - Direct ownership interests— — (47)— 
Total loss on impairment of equity method investments— — (47)— 

During the first quarter, the impact of COVID-19 on the global economy had a negative impact on our industry. As global oil demand fell, we also saw an increase in oil supply, leading to a surplus of reserves. Brent crude fell from $66 as at December 31, 2019 to $23 as at March 31, 2020.

The oil price decline has led to pressures on our customers to reduce their capital expenditures in the near-term until there is sufficient recovery in the oil price. As a consequence, this has led to reduced forecasted day rates and utilization for 2020 and the recovery of the market we forecast beyond and therefore we identified indicators of impairment against our investments in our first quarter results. An impairment of $47 million was recognized against the Seadrill Partners direct ownership interests in the Consolidated Statements of Operations within "Loss on impairment of equity method investments" in the three months ended March 31, 2020. No further impairments have been recognized in the three months ended June 30, 2020 or in the six months ended June 30, 2019.

We hold direct ownership interests in controlled subsidiaries of Seadrill Partners, which are accounted for under the equity method. The fair values of these investments are not readily determinable, as they are not publicly traded. These investments were recognized at fair value on application of fresh start accounting on July 2, 2018 and therefore categorized at level three on the fair value hierarchy. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity.

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 and discounted using an estimated market participant WACC of 12.8%.
Investment in associated companies
As at June 30, 2020 and December 31, 2019, the carrying values of our investments in associated companies were as follows.

(In $ millions)As at June 30, 2020As at December 31, 2019
Seadrill Partners direct ownership interest— 122 
Seabras Sapura103 98 
Seabras Sapura Holding GmbH- Shareholder loans held as equity121 123 
SeaMex9 22 
Sonadrill24 24 
Gulfdrill— — 
Total investment in associated companies257 389 

Seadrill Partners direct ownership interest impairment
In March 2020 we impaired the remaining investment value to nil, recognizing a $47 million loss within "Loss on impairment of equity method investments" in our Consolidated Statement of Operations. See Note 7– Loss on impairment of equity method investments for further details.
v3.20.2
Taxation
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Taxation Taxation
Income tax expense for the three months ended June 30, 2020 was $5 million (three months ended June 30, 2019: benefit of $30 million). Income tax expense for the six months ended June 30, 2020 was $2 million (six months ended June 30, 2019: benefit of $12 million).

The income tax expense of $2 million for the six months ended June 30, 2020 was primarily due to ordinary taxes in Saudi Arabia, Angola, UK partially offset by a benefit as a result of Coronavirus Aid, Relief, and Economic Security Act introducing a carry back of net operating losses in the U.S.

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

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 Sheet, Statement of Operations or Statement of Cash Flow. In 2019, we placed a total of $330 million Brazilian Reais of collateral in order to continue with our appeal against certain years. This amount is held as restricted cash. See Note 10 - Restricted cash.

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 may be filed in the US court. An adverse outcome on these proposed assessments could result in a material adverse impact on our Consolidated Balance Sheet, Statement of Operations or Statement of Cash Flow.
v3.20.2
Loss per share
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Loss per share Loss per share
The computation of basic loss per share (“LPS”) is based on the weighted average number of shares outstanding during the period. Diluted LPS includes the effect of the assumed conversion of potentially dilutive instruments. However, as the current and comparative periods are all loss making, the effect of dilution is nil.

The components of the numerator for the calculation of basic and diluted LPS were as follows:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Net loss attributable to shareholder(181)(203)(1,745)(498)
Effect of dilution— — — — 
Diluted net loss available to shareholders(181)(203)(1,745)(498)

The components of the denominator for the calculation of basic and diluted LPS were as follows:
 (In millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Basic loss per share:  
Weighted average number of common shares outstanding100 100 100 100 
Diluted loss per share: 
Effect of dilution— — — — 
Weighted average number of common shares outstanding adjusted for the effects of dilution100 100 100 100 

The basic and diluted loss per share were as follows:
(In $)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Basic loss per share(1.80)(2.03)(17.40)(4.98)
Diluted loss per share(1.80)(2.03)(17.40)(4.98)
v3.20.2
Restricted cash
 6 Months Ended
Jun. 30, 2020
Restricted Cash and Investments [Abstract]  
Restricted cash Restricted cash
Restricted cash as at June 30, 2020 and December 31, 2019 was as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Accounts pledged as collateral for Senior Secured Notes (1)
30 24 
Accounts pledged as collateral for performance bonds and similar guarantees (2)
48 104 
Demand deposit pledged as collateral for tax related guarantee (3)
61 83 
Other32 31 
Total restricted cash171 242 

(1)  In April 2020, Seabras Sapura repaid $6 million of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of senior secured notes.
(2) On February 24, 2020 we agreed with Danske Bank to reduce our guarantee facility from $90 million to $45 million. As a result, the cash collateral required to be held was reduced.
(3)  We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet.

Restricted cash is presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Current restricted cash80 135 
Non-current restricted cash91 107 
Total restricted cash171 242 
v3.20.2
Marketable securities
 6 Months Ended
Jun. 30, 2020
Marketable Securities [Abstract]  
Marketable securities Marketable securities
We hold investments in certain marketable securities which we record at fair value and recognize any changes directly in net loss. The below table shows the carrying value of our investments in marketable securities for periods presented in this report.
(In $ millions)As at June 30, 2020As at December 31, 2019
Seadrill Partners - Common units— 2 
Archer5 9 
Total marketable securities5 11 

The below table shows the gain and losses recognized through net loss for the periods presented in this report.
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Seadrill Partners - Common units - unrealized loss on marketable securities— (13)(2)(36)
Archer - unrealized gain / (loss) on marketable securities1 (1)(4)1 
Total unrealized gain / (loss) on marketable securities1 (14)(6)(35)
v3.20.2
Accounts receivable
 6 Months Ended
Jun. 30, 2020
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract]  
Accounts receivable Accounts receivableAccounts receivable are held at their nominal amount less an allowance for credit losses. The adoption of ASC 326 on January 1, 2020 resulted in an immaterial allowance against our outstanding amounts due. Refer to Note 3 - Current expected credit losses for further information.
v3.20.2
Other Assets
 6 Months Ended
Jun. 30, 2020
Other Assets [Abstract]  
Other Assets Other Assets
As at June 30, 2020 and December 31, 2019, other assets included the following:
(In $ millions)As at June 30, 2020As at December 31, 2019
Reimbursable amounts due from customers (1)37 21 
Taxes receivable34 38 
Prepaid expenses32 33 
Favorable drilling and management services contracts 32 33 
Right of use asset13 35 
Insurance receivable11 14 
Deferred contract costs9 12 
Derivative asset - interest rate cap1 3 
Other assets14 28 
Total other assets183 217 
(1)Includes reimbursable amounts due from related parties, net of expected credit loss allowance. For further information refer to Note 26 – Related party transactions and Note 3 - Current expected credit losses.
Other assets were presented in our Consolidated Balance Sheet as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Other current assets139 158 
Other non-current assets44 59 
Total other assets183 217 
v3.20.2
Investment in associated companies
 6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Investment in associated companies Loss on impairment of equity method investments
The loss on impairments of our equity method investments for the three and six months ended June 30, 2020 and three and six months ended June 30, 2019 were as follows:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Seadrill Partners - Direct ownership interests— — (47)— 
Total loss on impairment of equity method investments— — (47)— 

During the first quarter, the impact of COVID-19 on the global economy had a negative impact on our industry. As global oil demand fell, we also saw an increase in oil supply, leading to a surplus of reserves. Brent crude fell from $66 as at December 31, 2019 to $23 as at March 31, 2020.

The oil price decline has led to pressures on our customers to reduce their capital expenditures in the near-term until there is sufficient recovery in the oil price. As a consequence, this has led to reduced forecasted day rates and utilization for 2020 and the recovery of the market we forecast beyond and therefore we identified indicators of impairment against our investments in our first quarter results. An impairment of $47 million was recognized against the Seadrill Partners direct ownership interests in the Consolidated Statements of Operations within "Loss on impairment of equity method investments" in the three months ended March 31, 2020. No further impairments have been recognized in the three months ended June 30, 2020 or in the six months ended June 30, 2019.

We hold direct ownership interests in controlled subsidiaries of Seadrill Partners, which are accounted for under the equity method. The fair values of these investments are not readily determinable, as they are not publicly traded. These investments were recognized at fair value on application of fresh start accounting on July 2, 2018 and therefore categorized at level three on the fair value hierarchy. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity.

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 and discounted using an estimated market participant WACC of 12.8%.
Investment in associated companies
As at June 30, 2020 and December 31, 2019, the carrying values of our investments in associated companies were as follows.

(In $ millions)As at June 30, 2020As at December 31, 2019
Seadrill Partners direct ownership interest— 122 
Seabras Sapura103 98 
Seabras Sapura Holding GmbH- Shareholder loans held as equity121 123 
SeaMex9 22 
Sonadrill24 24 
Gulfdrill— — 
Total investment in associated companies257 389 

Seadrill Partners direct ownership interest impairment
In March 2020 we impaired the remaining investment value to nil, recognizing a $47 million loss within "Loss on impairment of equity method investments" in our Consolidated Statement of Operations. See Note 7– Loss on impairment of equity method investments for further details.
v3.20.2
Drilling units
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Drilling units Drilling units
The following table summarizes the movement for the six months ended June 30, 2019:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 20196,890 (231)6,659 
Additions61 — 61 
Depreciation— (207)(207)
As at June 30, 20196,951 (438)6,513 

The following table summarizes the movement for the six months ended June 30, 2020:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 20207,048 (647)6,401 
Additions85 — 85 
Depreciation— (179)(179)
Impairment(1,230)— (1,230)
As at June 30, 20205,903 (826)5,077 
In March 2020 we recorded a $1,230 million impairment against our fleet. Refer to Note 6 – Impairment of long-lived assets for further information.
v3.20.2
Equipment
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Equipment Equipment
Equipment consists of office equipment, software, furniture and fittings.

The following table summarizes the movement for the six months ended June 30, 2019:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 201934 (5)29 
Additions3 — 3 
Depreciation— (5)(5)
As at June 30, 201937 (10)27

The following table summarizes the movement for the six months ended June 30, 2020:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 202038 (15)23 
Depreciation— (3)(3)
As at June 30, 202038 (18)20 
v3.20.2
Debt
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Debt Debt
As at June 30, 2020 and December 31, 2019, we had the following liabilities for third party debt agreements:
(In $ millions)As at June 30, 2020As at December 31, 2019
Secured credit facilities5,662 5,662 
Senior Secured Notes495 476 
Credit facilities contained within variable interest entities598 621 
Total debt principal6,755 6,759 
Less: debt discount and fees(120)(136)
Carrying value6,635 6,623 

This was presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Debt due within one year420 343 
Long-term debt6,215 6,280 
Total debt principal6,635 6,623 

Key changes to borrowing facilities

Senior secured notes
On April 10, 2019, we repurchased $311 million of our principal senior secured notes for $342 million. The $31 million additional cash paid represents the 7% purchase premium and settlement of accrued payment-in-kind and cash interest.

On July 15, 2019, $18 million of accrued payment-in-kind interest on our senior secured notes was compounded and additional notes were issued.

On January 15, 2020, $19 million of accrued payment-in-kind interest on our senior secured notes was compounded and additional notes were issued.

Collateral
Our credit facilities are secured by, among other things, liens on our drilling units. Our credit facility agreements contain cross-default provisions, meaning that if we defaulted and amounts became due and payable under one of our credit agreements, this would trigger a cross-default in our other facilities so that amounts outstanding under our other credit facility agreements become due and payable and capable of being accelerated.
Debt maturities
The outstanding debt as at June 30, 2020 is repayable as follows:
(In $ millions)Year ended June 30,
2021420 
2022786 
20231,730 
20241,430 
20251,894 
2026 and thereafter495 
Total debt principal (1)
6,755 

(1)  Debt principal repayments, excluding cash and payment-in-kind interest.

Amortization Conversion Election facility ("ACE")
The above table assumes that we will make amortization payments on our secured credit facilities from June 2020. Per the terms of our senior secured credit facilities, we can elect to defer up to $500 million of such amortization payments until 2021 through the initiation of new loans.

In November 2019, we made the election to defer $63 million of balances that would have otherwise fallen due in the quarter ended March 2020. In March 2020, we elected to defer a further $74 million that would have otherwise fallen due in the current quarter and in June 2020 we elected to defer a further $111 million that would otherwise have fallen due in the quarter ended September 30, 2020. This leaves a remaining $252 million to be deferred in future periods. If we defer the remaining balance then the amounts due in the year ended June 30, 2021 will reduce to $168 million.

Substantial doubt over going concern
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 scheduled amortization installments under our credit facilities occurring in Q1, Q2 and Q3 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 forecasted that we will not be able to meet the requirements under our ongoing liquidity financial covenant contained in the facility agreements within a twelve-month period following the date of this report and had requested consent for certain liquidity enhancing measures in order to mitigate this. 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. We had 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 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.
Whilst substantial support was indicated by our secured lenders for the consents discussed above, as certain of the amendments impacting economic terms required 100% approval across 43 institutions, recent market uncertainties have prevented a coalescing of views. As a consequence, Seadrill has decided not to proceed with the bank consent and has retained financial and legal advisors to prepare for a comprehensive restructuring of the balance sheet. With the help of these advisors, we have engaged in negotiations with our lenders surrounding a comprehensive restructuring. Whilst we continue to evaluate various alternatives to address the cost of debt service and overall volume of debt, we anticipate that a comprehensive restructuring will require the use of an in-court process and may require a substantial conversion of our indebtedness to equity. As of June 30, 2020, Seadrill had $1.0 billion of cash which we believe provides sufficient liquidity to complete a comprehensive restructuring process. However, until such time that an agreement is reached to restructure our borrowing commitments, substantial doubt remains over our ability to continue as a going concern. Our business operations remain unaffected by the negotiations and related contingency planning efforts, and we expect to meet our ongoing customer and business counterparty obligations as they become due.
v3.20.2
Other Liabilities
 6 Months Ended
Jun. 30, 2020
Payables and Accruals [Abstract]  
Other Liabilities Other Liabilities
As at June 30, 2020 and December 31, 2019, other liabilities included the following:
(In $ millions)As at June 30, 2020As at December 31, 2019
Accrued expenses123 137 
Uncertain tax positions80 83 
Employee withheld taxes, social security and vacation payments41 51 
Accrued interest expense37 40 
Contract liabilities33 29 
Taxes payable30 33 
Lease liabilities15 36 
Unfavorable drilling contracts 7 8 
Other liabilities31 33 
Total Other Liabilities397 450 

Other liabilities are presented in our Consolidated Balance Sheet as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Other current liabilities281 322 
Other non-current liabilities116 128 
Total Other Liabilities397 450 
v3.20.2
Leases
 6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Leases Leases
We have operating leases relating to our premises, the most significant being our offices in London, Liverpool, Oslo, Stavanger, Singapore, Houston, Rio de Janeiro and Dubai.

Below are the significant assumptions and judgments we applied to account for our leases in accordance with Topic 842.

1.We apply judgment in determining 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 as at June 30, 2020 are as follows:
(In $ millions)Period ended June 30,
20217 
20226 
20232 
20241 
2025 and thereafter1 
Total17 

The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheets as at June 30, 2020 and December 31, 2019:
(In $ millions)As at June 30, 2020As at December 31, 2019
Total undiscounted cash flows17 45 
Less short term leases— (1)
Less discount(2)(8)
Operating lease liability (1)
15 36 
Of which:
Current6 12 
Non-current9 24 

(1)  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. This rig was novated into the Gulfdrill joint venture on March 12, 2020.

The following table gives supplementary information regarding our lease accounting for the three months ended June 30, 2020 and three months ended June 30, 2019:
(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Cost:
Operating lease cost2 5 4 7 
Short-term lease cost— — — 1 
Total Lease cost2 5 4 8 
Other information:
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows2 5 4 8 
Right-of-use assets obtained in exchange for operating lease liabilities during the period— — — 1 
Weighted-average remaining lease term in months28202820
Weighted-average discount rate13 %13 %13 %13 %

On November 25, 2019 and March, 15 2020 we leased the West Castor and West Telesto to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows:
(In $ millions)Period ended June 30,
202120 
202220 
202320 
20248 
Total68 

The rental income on the leases is set out below:

(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Income:
Operating lease income5 — 8 — 
Total Lease income5 — 8 — 
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.

Below are the significant assumptions and judgments we applied to account for our leases in accordance with Topic 842.

1.We apply judgment in determining 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 as at June 30, 2020 are as follows:
(In $ millions)Period ended June 30,
20217 
20226 
20232 
20241 
2025 and thereafter1 
Total17 

The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheets as at June 30, 2020 and December 31, 2019:
(In $ millions)As at June 30, 2020As at December 31, 2019
Total undiscounted cash flows17 45 
Less short term leases— (1)
Less discount(2)(8)
Operating lease liability (1)
15 36 
Of which:
Current6 12 
Non-current9 24 

(1)  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. This rig was novated into the Gulfdrill joint venture on March 12, 2020.

The following table gives supplementary information regarding our lease accounting for the three months ended June 30, 2020 and three months ended June 30, 2019:
(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Cost:
Operating lease cost2 5 4 7 
Short-term lease cost— — — 1 
Total Lease cost2 5 4 8 
Other information:
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows2 5 4 8 
Right-of-use assets obtained in exchange for operating lease liabilities during the period— — — 1 
Weighted-average remaining lease term in months28202820
Weighted-average discount rate13 %13 %13 %13 %

On November 25, 2019 and March, 15 2020 we leased the West Castor and West Telesto to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows:
(In $ millions)Period ended June 30,
202120 
202220 
202320 
20248 
Total68 

The rental income on the leases is set out below:

(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Income:
Operating lease income5 — 8 — 
Total Lease income5 — 8 — 
v3.20.2
Common shares
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Common shares Common sharesShare capital as at December 31, 2019 and June 30, 2020 was as follows:
Issued and fully paid share capital $0.10 par value each
Shares$ millions
As at December 31, 2019100,234,973 10 
As at June 30, 2020100,329,887 10 

In February 2020, 94,914 shares were issued to employees following a vesting of restricted stock units awarded under our employee incentive plan.
v3.20.2
Non-controlling interest
 6 Months Ended
Jun. 30, 2020
Noncontrolling Interest [Abstract]  
Non-controlling interest Non-controlling interest
Changes in non-controlling interest for the six months ended June 30, 2019 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2019 and March 31, 2019145 7 152 
Net loss attributable to non-controlling interest (2)— (2)
As at June 30, 2019 143 7 150 

Changes in non-controlling interest for the six months ended June 30, 2020 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2020140 11 151 
Net loss attributable to non-controlling interest (1)— (1)
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations— (11)(11)
As at March 31, 2020139 — 139 
Net loss attributable to non-controlling interest(1)— (1)
As at June 30, 2020138 — 138 

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. This reduced the non-controlling interest balance for Seadrill Nigeria Operations Limited to nil as at March 31, 2020.
Redeemable non-controlling interest
Changes in redeemable non-controlling interest for the period from January 1, 2019 to June 30, 2019 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment1 
As at March 31, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
As at June 30, 201937 

Changes in redeemable non-controlling interest for the period from January 1, 2020 to June 30, 2020 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 202057 
Fair value adjustment(27)
As at March 31, 202030 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment(3)
As at June 30, 202026 

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 a 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.
v3.20.2
Redeemable non-controlling interest
 6 Months Ended
Jun. 30, 2020
Temporary Equity Disclosure [Abstract]  
Redeemable non-controlling interest Non-controlling interest
Changes in non-controlling interest for the six months ended June 30, 2019 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2019 and March 31, 2019145 7 152 
Net loss attributable to non-controlling interest (2)— (2)
As at June 30, 2019 143 7 150 

Changes in non-controlling interest for the six months ended June 30, 2020 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2020140 11 151 
Net loss attributable to non-controlling interest (1)— (1)
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations— (11)(11)
As at March 31, 2020139 — 139 
Net loss attributable to non-controlling interest(1)— (1)
As at June 30, 2020138 — 138 

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. This reduced the non-controlling interest balance for Seadrill Nigeria Operations Limited to nil as at March 31, 2020.
Redeemable non-controlling interest
Changes in redeemable non-controlling interest for the period from January 1, 2019 to June 30, 2019 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment1 
As at March 31, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
As at June 30, 201937 

Changes in redeemable non-controlling interest for the period from January 1, 2020 to June 30, 2020 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 202057 
Fair value adjustment(27)
As at March 31, 202030 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment(3)
As at June 30, 202026 

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 a 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.
v3.20.2
Accumulated other comprehensive (loss)/income
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated other comprehensive (loss)/income Accumulated other comprehensive (loss)/income
Accumulated other comprehensive (loss)/income for the period from January 1, 2019 to June 30, 2019 were as follows:

(In $ millions) 
Actuarial gain relating to pensionShare in unrealized loss from associated companiesChange in debt component on Archer bondTotal
As at January 1, 20191 (5)(3)(7)
Other comprehensive (loss)/income— (4)5 1 
As at March 31, 20191 (9)2 (6)
Other comprehensive (loss)/income— (5)1 (4)
As at June 30, 20191 (14)3 (10)

Accumulated other comprehensive (loss)/income for the period from January 1, 2020 to June 30, 2020 were as follows:

(In $ millions) 
Actuarial loss relating to pensionShare in unrealized loss from associated companiesChange in debt component on Archer bondTotal
As at January 1, 2020 — (13)— (13)
Other comprehensive loss— (16)— (16)
As at March 31, 2020 — (29)— (29)
Other comprehensive (loss)/income(7)(1)2 (6)
As at June 30, 2020(7)(30)2 (35)
Income taxes associated with each component of other comprehensive income were $2 million for the six months ended June 30, 2020 (June 30, 2019: nil).
v3.20.2
Risk management and financial instruments
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Fair Value Disclosures [Abstract]  
Risk management and financial instruments Risk management and financial instruments
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 our counterparties are creditworthy financial institutions or large oil and gas companies. We do not expect any significant loss to result from non-performance by such counterparties. However, we are exposed to a higher level of credit risk on certain related party receivable balances. Please refer to note 3 for details of allowances established for credit losses.

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 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, BTG Pactual and ING Bank N.V. We consider these risks to be remote. We also have a concentration of risk with respect to customers. For details on the customers with greater than 10% of total revenues, refer to Note 4 - Segment information.

Foreign exchange risk
As is customary in the oil and gas industry, most 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 exposure primarily relates to foreign denominated cash and working capital balances. Historically, these exposures have not caused a significant amount of fluctuation in net income or cash flows and therefore we have not hedged them.

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 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 June 30, 2020 in the table below:
(In $ millions)PrincipalHedging instrumentsTotalImpact of 1% increase in rates
Senior credit facilities5,662 (4,500)1,162 12 
Ineffective portion of interest rate cap (1)
— 4,500 4,500 45 
Debt contained within VIEs598 — 598 6 
Debt exposed to interest rate fluctuations6,260 — 6,260 63 
Less: Cash and Restricted Cash(1,020)— (1,020)(10)
Net debt exposed to interest rate fluctuations (2)
5,240 — 5,240 53 

(1) The 3-month LIBOR rate as at June 30, 2020 was 0.30%. As this rate was more than 1% below the 2.87% cap rate, the interest cap would not mitigate any impact of a theoretical 1% point increase in LIBOR.
(2) The $495 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:

Gain/(loss) recognized in the Consolidated Statement of Operations relating to derivative financial instrumentsThree months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Interest rate cap agreement(1)(6)(2)(33)
Embedded conversion option on Archer convertible debt instrument1 — 1 —
Gain/(loss) on derivative financial instruments— (6)(1)(33)

Interest rate cap - This represents changes in fair value on our interest rate cap agreement referred above.

Embedded conversion option on 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 26 – Related party transactions 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 dateApplicable rateOutstanding principal - June 30, 2020As at June 30, 2020As at December 31, 2019
Interest rate capJune 2023
2.87% LIBOR cap
4,500 1 3 
1 3 

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 June 30, 2020 and December 31, 2019 are as follows:
As at June 30, 2020As at December 31, 2019
(In $ millions)Fair
value		Carrying
value		Fair
value		Carrying
value
Assets
Related party loans receivable (1) (Level 2)
373 373 395 488 
Liabilities
Secured credit facilities (Level 2)
2,141 5,561 5,464 5,549 
Credit facilities contained within variable interest entities (Level 2)
578 579 590 598 
Senior secured notes (Level 1)
189 495 404 476 
Related party loans within variable interest entities (Level 2)
237 246 229 239 

(1)   Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis.  Related party loans receivable is $373 million, comprised of principal due of $505 million offset by allowance for expected credit losses recognized of $132 million. For further information on the impact of the expected credit losses to our financial assets please refer to Note 3 - Expected Credit Losses.

Level 1
The fair value of the senior secured notes were derived using market traded value. We have categorized this at level 1 on the fair value measurement hierarchy. Refer to Note 17 – Debt for further information.

Level 2
Upon the adoption of fresh start accounting, the related party loans receivable from Seadrill Partners, SeaMex and Seabras Sapura were recorded at fair value. We estimated that the fair value continues to be equal to the carrying value as at June 30, 2020 as the debt is not freely tradable and cannot be recalled by us at prices other than specified in the loan note agreements and the loans were entered into at market rates. They are categorized as level 2 on the fair value measurement hierarchy. Other trading balances with related parties are not shown in the table above and are covered under Note 26 – Related party transactions. The fair value of other trading balances with related parties are also assumed to be equal to their carrying value.

At December 31, 2019, the estimated fair value of the Secured credit facilities was derived using a discounted cash flow model, using a cost of debt of 4%. At June 30, 2020, following Seadrill's decision to pursue a comprehensive refinancing of its balance sheet, the estimated fair value of the secured credit facilities has been derived with reference to the value of assets pledged as collateral for those facilities. The discounted cash flow models used to determine the collateral value are subject to the same assumptions and sensitivities as the models prepared to consider rig impairment under US GAAP.
The fair value of credit facilities contained within variable interest entities was derived using a discounted cash flow model, using a cost of debt of 4%. The fair value of related party loans within variable interest entities was derived using a 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 26 – 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 June 30, 2020 and December 31, 2019 are as follows:
 As at June 30, 2020As at December 31, 2019
(In $ millions)Fair
value		Carrying
value		Fair
value		Carrying
value
Assets
Cash and cash equivalents (Level 1)
849 849 1,115 1,115 
Restricted cash (Level 1)
171 171 242 242 
Marketable securities (Level 1)
5 5 11 11 
Related party loans receivable - Archer convertible debt (Level 3)
9 9 35 35 
Interest rate cap (Level 2)
1 1 3 3 
Temporary equity
Redeemable non-controlling interest (Level 3)
2626 57 57 

Level 1
The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, was a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy. Quoted market prices were used to estimate the fair value of marketable securities, which were valued at fair value on a recurring basis.

Level 2
The fair value of the interest rate cap as at June 30, 2020 was calculated using well-established independent valuation techniques and counterparty non-performance credit risk assumptions. 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 was 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 was 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 was calculated by applying a fair value to the three AOD rigs and debt facility using a discounted cash flow model. The rig values were 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 12.8%. The fair value of the debt was derived using the discounted cash flow model, using a cost of debt of 4%.

Fair value considerations on one-time transactions

Archer convertible bond fair value

On March 13, 2020, Archer announced completion of a refinancing, which included agreed renegotiated terms on the convertible loan. The updated terms amended the loan balance to $13 million that bears interest of 5.5%, matures in April 2024 and an equity conversion option. We reassessed the fair value of the Archer convertible bond held as a related party balance using a credit adjusted discount rate of 27.6%. This resulted in an impairment of $29 million, which was recognized in the Consolidated Statements of Operations within "Impairment of convertible bond from related party".

As at December 31, 2019 we reassessed the fair value of the Archer convertible bond held as a related party balance as negotiations to restructure Archer's debt were in progress with senior lenders and Seadrill. We reassessed the fair value of the bond using a discounted cashflow model approach. For the purposes of the valuation, we 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 subordinated. We applied a discount rate of 14%. This resulted in an impairment of $11 million which was recognized within "Impairment of convertible bond from related party" in the Consolidated Statements of Operations and $3 million was 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.

Impairment of investments in associated companies
During the first quarter, the impact of COVID-19 on the global economy had a negative impact on our industry. As global oil demand has fallen, we have also seen an increase in oil supply, leading to a surplus of reserves. Brent crude fell from $66 as at December 31, 2019 to $23 as at March 31, 2020.

The oil price decline led to pressures on our customers to reduce their capital expenditures in the near-term until we see a recovery in the oil price. This has led to reduced forecasted dayrates and utilization for 2020, and an extended time for these to recover in future years as market supply and demand re-balance. An other than temporary impairment of $47 million was, therefore, recognized against our direct investments in Seadrill Partners. Refer to Note 7 - Loss on impairment of equity method investments for further information.

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.

Drilling unit impairment
The current economic outlook and oil price decline was also an indicator of impairment on our drilling units. Following a review of undiscounted cash flows against the carrying book value of our rigs we recognized an impairment against our drilling unit fleet. The impairment recognized in the three months ended March 31, 2020 was $1,230 million, 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. Refer to Note 6 – Impairment of long-lived assets for further information.
v3.20.2
Variable Interest Entities (VIEs)
 6 Months Ended
Jun. 30, 2020
Variable Interest Entity, Measure of Activity [Abstract]  
Variable Interest Entities (VIEs) Variable Interest Entities (VIEs)
The combined assets and liabilities in the financial statements of the VIEs as at June 30, 2020 and December 31, 2019 are as follows:

 
(In $ millions)		As at June 30, 2020As at December 31, 2019
Cash and cash equivalents15 22 
Investment in finance lease948 972 
Total assets of the VIEs (1)
963 994 
Short-term interest bearing debt (2)
48 48 
Long-term interest bearing debt (2)
531 550 
Other liabilities4 5 
Short-term amounts due to related parties 4 12 
Long-term debt due to related parties (3)
238 239 
Total liabilities of the VIEs825 854 
Equity of the VIEs138 140 

(1) Book value of units in the Company's consolidated financial statements as at June 30, 2020 was $507 million (December 31, 2019: $784 million).
(2)  Total interest bearing debt comprises principal outstanding of $598 million offset by $19 million debt discount (December 31, 2019: $621 million principal outstanding offset by $23 million debt discount).
(3)  Long-term debt due to related parties comprises principal outstanding of $314 million, offset by debt discount of $68 million and trading asset position held against long-term of $8 million (December 31, 2019: $314 million principal offset by $75 million debt discount).
v3.20.2
Related party transactions
 6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related party transactions Related party transactions
Our main related parties include (i) affiliated companies over which we hold significant influence and (ii) companies who are either controlled by or whose operating policies may be significantly influenced by our largest shareholder, Hemen.

Companies in which we hold significant influence include (i) Seadrill Partners, (ii) SeaMex, (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, (v) Northern Drilling and (vi) Northern Ocean. 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.
 (In $ millions)
Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Management fees revenues (a)36 23 77 43 
Reimbursable revenues (b)37 34 100 51 
Related party inventory sales — 1 1 1 
Total related party operating revenues73 58 178 95 

(a) We provide management and administrative services to Seadrill Partners, SeaMex and Sonadrill and operational and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis.

(b) We recognized reimbursable revenues from Northern Ocean in the six months ended June 30, 2020 for work to perform the first mobilization of the Northern Ocean rigs, West Mira and West Bollsta. As at June 30, 2020 our Consolidated Balance Sheet included $152 million of receivables from Northern Ocean (December 31, 2019: $60 million), before deducting allowances for credit losses. This included $123 million of billed and unbilled trade receivables (December 31 2019: $55 million), which have been classified within the line item "amount due from related parties", and $29 million of costs incurred not yet billable to Northern Ocean (December 31, 2019: $5 million), which have been classified with "Other Assets".

Related party operating expenses

The below table provides an analysis of related party operating expenses for periods presented in this report.

(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Other related party operating expenses— 1 — 1 
Total related party operating expenses— 1 — 1 

Related party financial items

The below table provides an analysis of related party financial income for periods presented in this report.

 (In $ millions)
Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Interest income (c)6 7 12 15 
Total related party financial items6 7 12 15 

(c) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below).
Related party receivable balances

The below table provides an analysis of related party receivable balances for periods presented in this report.
(In $ millions)As at June 30, 2020As at December 31, 2019
Related party loans and interest (d)505 488 
Deferred consideration arrangements (e)17 31 
Convertible bond (f)9 35 
Trading balances (g)236 150 
Allowance for expected credit losses (h)(201)— 
Total related party receivables566 704 
Of which:
Amounts due from related parties - current184 181 
Amounts due from related parties - non-current382 523 

(d) We have loan receivables outstanding from SeaMex and Seabras Sapura. We have summarized the amounts outstanding in the table below:
(In $ millions)As at June 30, 2020As at December 31, 2019
SeaMex seller's credit and loans receivable442 422 
Seabras loans receivable63 66 
Total related party loans and interest505 488 

SeaMex loans include (i) $250 million "sellers credit" provided to SeaMex in March 2015 which matures in December 2019 but is subordinated to SeaMex's external debt facility, which matures in March 2022. As such, we have classified this balance as non-current on our Consolidated Balance Sheets. (ii) $45 million working capital loan was advanced to SeaMex in November 2016. (iii) $139 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 and (iv) $8 million Sponsor Minimum Liquidity Shortfall loan facility provided to SeaMex in April 2020 which matures at the earlier of February 2021 or two days following the date where there is no Minimum Liquidity Shortfall. The loan earns interest at 6.5% plus 3-month US LIBOR.

Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $63 million balance shown in the table above includes (i) $50 million of loan principal and (ii) $13 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility.

In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 14 – Investment in associated companies for further details.

Seabras Sapura repaid $6 million of its outstanding loan balances in April 2020, $4 million relating to its loan facility and $2 million relating to its shareholder loans.


(e) Deferred consideration arrangements include receivables due to us from Seadrill Partners from the sale of the West Vela to Seadrill Partners in November 2014. We have summarized amounts due for each period in the table below:
(In $ millions)As at June 30, 2020As at December 31, 2019
West Vela - Mobilization receivable10 17 
West Vela - Share of dayrate7 14 
Total deferred consideration receivable17 31 

On adoption of fresh start accounting, we recorded a receivable for West Vela share of dayrate. This was previously accounted for as a gain contingency so was only recognized when realized. Under fresh start accounting, the receivable was recognized at a fair value of $29 million and the gain was recognized in reorganization items.
(f) 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 loan incurred interest at 5.5% and was to mature in December 2021, with 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 was in negotiations with its lenders to refinance its 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 of $11 million.

On March 13, 2020, Archer announced completion of a refinancing, which included agreed renegotiated terms on the convertible loan. The updated terms amended the loan balance to $13 million that bears interest of 5.5%, matures in April 2024 and an equity conversion option. The renegotiated terms resulted in a $29 million impairment being recognized following a reduction in loan balance and an increase to the discount rate. The fair value of the convertible debt instrument as at June 30, 2020 was $9 million of which the split between debt and embedded derivative option was $9 million and nil respectively.

(g) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Ocean and Sonadrill for related party management fees, crewing fees and payroll recharges. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. As set out below, we have established credit loss allowances for balances that have not been settled in line with these payment terms and are overdue.

(h) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 - Measurement of Credit Losses on Financial Instruments. Refer to Note 3 – Current Expected Credit Losses for further information.

Related party payable balances

Related party liabilities are presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Related party loans payable (i)238 239 
Trading balances (j)11 19 
Total related party liabilities249 258 
Of which:
Amounts due to related parties - current11 19 
Long-term debt due to related parties238 239 

(i) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 25 – Variable Interest Entities (VIEs) for further details).

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 three months ended June 30, 2020 was $3 million and the six months ended June 30, 2020 was $7 million. For the three months ended June 30, 2019 the total interest expense incurred was $3 million and for the six months ended June 30, 2019 was $7 million.

(j) 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, Seadrill Partners and Sonadrill.

Other related party transactions

Seabras Sapura guarantees - In November 2012, a subsidiary of Seabras Sapura Participações S.A. entered into a $179 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Esmeralda pipe-laying support vessel, with a maturity in 2032. During 2013, an additional facility of $36 million was entered into, but this facility matured in March 2020. 

As a condition to the lenders making the loan available, a subsidiary of Seadrill has provided a sponsor guarantee, on a joint and several basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrower. The total amount guaranteed by the joint venture partners as at June 30, 2020 was $139 million (December 31, 2019: $146 million).

We have not recognized a liability for any of the above guarantees as we did not consider it to be probable that the guarantees would be called.

Other guarantees - In addition, we have made certain guarantees over the performance of Seadrill Partners and SeaMex on behalf of customers.
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.
v3.20.2
Commitments and contingencies
 6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies Commitments and contingencies
Legal Proceedings

From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities. We believe that the resolution of such claims will not have a material impact, individually or in the aggregate, on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our unaudited Consolidated Financial Statements as at June 30, 2020.

Seabras Sapura joint venture
The Sapura Esmeralda operates under a Brazilian flag. The right to operate under such Brazilian flag is being challenged in the Brazilian courts. An adverse decision in the Brazilian courts could affect the operations of the Sapura Esmeralda and potentially impact its commercial agreements and related financing. Due to the backlog of cases we estimate a decision within approximately 3 years.

Dalian Newbuilds
At June 30, 2020, all eight of the newbuilding contracts with Dalian had been terminated by both parties. Accordingly, the Seadrill contracting entities had no contractual obligation to take delivery of the rigs. Contracts for six of the rigs (West Titan, West Proteus, West Rhea, West Hyperion, West Tethys and West Umbriel) were terminated as of December 31, 2018, and we had total contractual obligations as at December 31, 2018 of $0.4 billion.

In February 2019, the Seadrill contracting party terminated the newbuilding contract for the jack-up rig West Dione due to: (i) delays to delivery of the rig, and (ii) Dalian being subject to bankruptcy proceedings. In March 2019, Dalian disputed the Seadrill contracting party's termination and purported to terminate the newbuilding contract itself for the alleged wrongful termination.

In March 2019, Dalian purported to terminate the eighth newbuilding contract for the West Mimas. In April 2019, the Seadrill contracting party rejected Dalian’s termination of the contract as wrongful and reserved all its rights. The Seadrill contracting party terminated the contract for the West Mimas for: (i) delays to delivery of the rig, (ii) Dalian being subject to bankruptcy proceedings, and (iii) Dalian's wrongful purported termination in March 2019.

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.

In January 2019, Dalian appointed an administrator to restructure its liabilities. 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. This has not yet been received. The contracts are all with limited liability subsidiaries of Seadrill. There are no parent company guarantees.

Nigerian Cabotage Act litigation
Seadrill Mobile Units Nigeria Ltd (“SMUNL”) commenced proceedings in May 2016 against the Honourable Minister for Transportation, the Attorney General of the Federation and the Nigerian Maritime Administration and Safety Agency with respect to interpretation of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Act”). On June 28 2019, the Federal High Court of Nigeria delivered a judgement finding that: (1) Drilling operations fall within the definition of “Coastal Trade” or “Cabotage” under the Act and (2) Drilling Rigs fall within the definition of "Vessels" under the Act. The impact of this decision is that the Nigerian Maritime Administration and Safety Agency (“NIMASA”) may impose a 2% surcharge on contract revenue from offshore drilling operations in Nigeria as well as requiring SMUNL register for Cabotage with NIMASA and pay all fees and tariffs as may be published in the guidelines that may be issued by the Minister of Transportation in accordance with the Act. However, on 22 July, 2019, SMUNL filed an appeal to the Court of Appeal challenging the decision of the Federal High Court. Due to the volume of cases currently being handled by the Court of Appeal sitting in Lagos we anticipate a decision within 3-5 years.

Although we intend to strongly pursue this appeal, we cannot predict the outcome of this case. We do not believe that it is probable that the ultimate liability, if any, resulting from this litigation will have a material effect on our financial position. Accordingly, no loss contingency has been recognized within the Consolidated Financial Statements.

Oro Negro
Oro Negro, a Mexican drilling rig contractor, filed a Complaint on June 6, 2019 in the United States Bankruptcy Court, Southern District of New York, within Chapter 15 proceedings ancillary to its Mexican insolvency process. The Complaint names Seadrill and its 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. Seadrill has the opportunity to reply to this in further support of the motion, the date of which has not yet been determined. We intend to vigorously defend against the claims Oro Negro asserts and dispute the allegations set forth in the Complaint. The costs of defending the claims against Seadrill and its JV partner are being met by the joint venture, SeaMex.

Other contingencies

Sevan Louisiana loss incident

i. Physical damage insurance
In January 2019, there was a loss incident on the Sevan Louisiana related to a malfunction of its subsea equipment. As of June 30, 2020, we have incurred $22 million of costs to repair the equipment, of which $8 million has been recovered and an additional $11 million will be recoverable under our physical damage insurance.

ii. Loss of hire insurance
The loss incident has resulted in a period of downtime for the Sevan Louisiana. As a result, we have recovered $18 million insurance income from loss of hire of the Sevan Louisiana.
v3.20.2
Subsequent Events
 6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsThere have been no subsequent events to report.
v3.20.2
Recent accounting pronouncements (Policies)
 6 Months Ended
Jun. 30, 2020
Accounting Changes and Error Corrections [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 our interests in associated entities. Investments in companies in which we control, or directly or indirectly hold 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 (though not directly or indirectly holding more than 50% of the voting control).

The accompanying unaudited interim financial statements, in the opinion of management, include all material adjustments that are considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America. The accompanying unaudited interim financial statements do not include all of the disclosures required in complete annual financial statements. These financial statements should be read in conjunction with our annual financial statements filed with the SEC on Form 20-F for the year ended December 31, 2019 (SEC File No. 333-224459).

The financial information in this report has been prepared on the basis that we will continue as a going concern, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Therefore, financial information in this report does not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if we were unable to realize our assets and settle our liabilities as a going concern in the normal course of operations. Such adjustments could be material.
Credit Losses
Credit Losses

We adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) on January 1, 2020. Refer to Note 3 – Current Expected Credit Losses for more information on the adoption of this update and the changes to our accounting policy.
Use of Estimates
Use of Estimates

The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses and reserves and allowances will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.
Presentation of rig management revenues and expenses Presentation of rig management revenues and expensesIn 2019, we entered into management contract arrangements with Sonadrill and Northern Ocean which increased the volume of activity where we are managing rigs on behalf of other parties. We have therefore separately presented the revenues and expenses earned under arrangements where we provide management or operational services to other parties as separate revenue and expense line items and have presented the results of these activities as a separate operating segment (see Note 4 - Segment information).
Recently adopted accounting standards
Recently adopted accounting standards

We adopted the following accounting standard updates ("ASUs") since the reporting date of our Form 20-F report which covered the period to December 31, 2019.

ASU 2016-13 - Financial Instruments - Measurement of Credit Losses on Financial Instruments (Also 2019-04, 2019-05, 2019-10 & 2019-11)

Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The accounting standard update requires us to establish allowances for estimated future credit losses on all trade and loan receivables, based on a broad range of supportable information and evidence to inform our estimates. Refer to Note 3 - Current Expected Credit Losses. This is different to the previous guidance, which applied an "incurred loss" model and only required us to record allowances for credit losses where it was probable that a receivable would not be recovered in full.

On adoption of the guidance, we recorded an allowance of $143 million, primarily related to subordinated loan receivables due from certain affiliated entities (see note 26 for details). Our third party customers are mostly international or national oil companies with high credit standing and we have historically had a very low incidence of bad debt expense from these customers. Therefore, the adoption of the new guidance has not had a material impact on receivables due from third party customers.

We have recorded the offsetting entry for the initial reserve as a direct adjustment to retained earnings. The new guidance requires us to reassess the allowance each reporting period and record any adjustment to the reserve as a credit loss expense in the Consolidated Statement of Operations. The expense is allocated between operating and financial items on the statement of operations based on the nature of the assessed balance. Receivable balances are presented net of the allowance on the Consolidated Balance Sheet.
Other ASUs

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 2018-13 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 is effective for annual and interim periods beginning after December 15, 2019.

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 is effective for annual and interim periods beginning after December 15, 2019.

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 is effective for annual and interim periods beginning after December 15, 2019.

Recently issued accounting standards

The FASB issued the following ASUs that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods:

ASU 2018-14 Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. The update is intended to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the US GAAP information requirements that are most important to users of an entity's financial statements. The guidance will be effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures.

ASU 2020-04 Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This update is intended to provide relief to to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. We are in the process of evaluating the impact of this standard update on our Consolidated Financial Statements and related disclosures.
Revenue from contracts with customers Certain direct and incremental costs that are expected to be recovered, relate directly to a contract, and enhance resources that will be used in satisfying our performance obligations in the future. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Deferred revenue - The deferred revenue balance of $22 million reported in "Other current liabilities" at June 30, 2020 is expected to be realized within the next twelve months and $11 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 June 30, 2020. The actual timing of recognition of such amounts may vary due to factors outside of our control.
Leases
Below are the significant assumptions and judgments we applied to account for our leases in accordance with Topic 842.

1.We apply judgment in determining 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.
Credit risk and concentration of 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 our counterparties are creditworthy financial institutions or large oil and gas companies. We do not expect any significant loss to result from non-performance by such counterparties. However, we are exposed to a higher level of credit risk on certain related party receivable balances. Please refer to note 3 for details of allowances established for credit losses.
Foreign exchange risk
Foreign exchange risk
As is customary in the oil and gas industry, most 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 exposure primarily relates to foreign denominated cash and working capital balances. Historically, these exposures have not caused a significant amount of fluctuation in net income or cash flows and therefore we have not hedged them.
Interest rate risk Interest rate riskOur 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.
v3.20.2
General information (Tables)
 6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Recast Consolidated Statements of Operations
Consolidated Statement of Operations for the three months ended June 30, 2019

(In $ millions)  As previously reportedAdjustmentAs currently reported
Reimbursable revenues44 (34)10 
Management contract revenues— 58 58 
Other revenues24 (24)— 
Vessel and rig operating expenses(182)9 (173)
Reimbursable expenses(43)34 (9)
Management contract expenses— (49)(49)
Selling, general and administrative expenses(30)6 (24)


Consolidated Statement of Operations for the six months ended June 30, 2019
(In $ millions)  As previously reportedAdjustmentAs currently reported
Reimbursable revenues70 (51)19 
Management contract revenues— 95 95 
Other revenues45 (44)1 
Vessel and rig operating expenses(381)17 (364)
Reimbursable expenses(69)51 (18)
Management contract expenses— (82)(82)
Selling, general and administrative expenses(61)14 (47)
v3.20.2
Current Expected Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2020
Credit Loss [Abstract]  
Movement in the allowance for credit losses and classification of credit loss expense
The following table summarizes the movement in the allowance for credit losses for the three and six months ended June 30, 2020:

 (In $ millions)
Allowance for credit losses - trade receivablesAllowance for credit losses - other current assetsAllowance for credit losses - related party STAllowance for credit losses related party LTTotal Allowance for credit losses
As at January 1, 2020— — 15 128 143 
Credit loss expense— — 18 2 20 
As at March 31, 2020— — 33 130 163 
Credit loss expense— 5 36 2 43 
As at June 30, 2020— 5 69 132 206 


The below table shows the classification of the credit loss expense within the consolidated statement of operations.

(In $ millions)Three months ended June 30, 2020Six months ended June 30, 2020
Management contract expenses41 50 
Other financial items2 13 
Total43 63 
v3.20.2
Segment information (Tables)
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Schedule of segment results
Total operating revenue
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters121 172 245 353 
Jack-ups82 89 172 172 
Management contracts74 59 179 96 
Other— 1 2 2 
Total operating revenues277 321 598 623 

Depreciation
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters63 85 143 172 
Jack-ups18 17 36 36 
Management contracts1 2 3 4 
Total82 104 182 212 

Amortization of intangibles
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters— 27 — 51 
Jack-ups— 10 — 21 
Management contracts— 1 — 1 
Total— 38 — 73 

Operating loss - Net loss
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floater operating loss(68)(80)(1,353)(161)
Jack-up operating income16 4 21 18 
Management contracts operating (loss)/income(31)8 (32)10 
Other operating loss(5)(5)(8)(11)
Operating loss(88)(73)(1,372)(144)
Unallocated items: 
Total financial items and other(90)(163)(374)(370)
Income taxes(5)30 (2)12 
Net loss(183)(206)(1,748)(502)
Drilling units - Total assets
(In $ millions)As at June 30, 2020As at December 31,
2019
Floaters3,860 5,144 
Jack-ups1,064 1,104 
Other153 153 
Total drilling units5,077 6,401 
Unallocated items:
Investments in associated companies257 389 
Marketable securities5 11 
Cash and restricted cash1,020 1,357 
Other assets932 1,121 
Total assets7,291 9,279 

Drilling units - Capital expenditures
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Floaters40 29 68 41 
Jack-ups3 10 8 16 
Other8 1 9 7 
Total51 40 85 64 
Schedule of revenues and fixed assets by geographic area
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 information presents our revenues and fixed assets by geographic area:
Revenues
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Norway146 102 291 169 
Angola32 34 98 49 
Saudi Arabia31 35 62 69 
United States30 14 59 31 
Brazil5 51 19 93 
Nigeria— 53 5 104 
Others (1)
33 32 64 108 
Total277 321 598 623 
(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)
(In $ millions)As at June 30, 2020As at December 31,
2019
Norway1,091 1,818 
Malaysia787 805 
United States636 644 
Spain605 615 
Namibia631 323 
Other (2)
1,327 2,196 
Total5,077 6,401 
(1)  The countries in this table represent the location of the drilling unit at the end of the reporting period and are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by the assets during the period. In most cases these locations are different to the country in which the Company that owns the drilling unit is registered.
(2)  "Other" represents countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented.
Schedule of customer with contract revenues by major customers
We had the following customers with total revenues greater than 10% in any of the periods presented:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Equinor21 %14 %19 %17 %
ConocoPhillips15 %12 %13 %12 %
Saudi Aramco11 %11 %10 %11 %
Northern Ocean9 %7 %14 %7 %
Total2 %22 %4 %22 %
Petrobras2 %13 %3 %13 %
v3.20.2
Revenue from Contracts with Customers (Tables)
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Schedule of contract assets and contract liabilities from contracts with customers
The following table provides information about receivables and contract liabilities from our contracts with customers:
(In $ millions)As at June 30, 2020 As at December 31,
2019
Accounts receivable, net157 173 
Current contract liabilities (deferred revenue) (1)
(22)(20)
Non-current contract liabilities (deferred revenue) (2)
(11)(9)

(1)  Current contract liabilities balances are included in “Other current liabilities” in our Consolidated Balance Sheet.
(2) Non-current contract liabilities balances are included in “Other non-current liabilities” in our Consolidated Balance Sheet.

Significant changes in the contract assets and the contract liabilities balances during the three months ended June 30, 2019 are as follows:
(In $ millions)  Contract AssetsContract LiabilitiesNet Contract
Balances
Net contract liability at January 1, 2019  1 (21)(20)
Amortization of revenue that was included in the beginning contract liability balance  — 3 3 
Cash received, excluding amounts recognized as revenue  — (13)(13)
Cash received against the beginning contract asset balance  (1)— (1)
Contract assets recognized during the period — — — 
Net contract liability at June 30, 2019— (31)(31)


Significant changes in the contract assets and the contract liabilities balances during the six months ended June 30, 2020 are as follows:
(In $ millions)  Contract AssetsContract LiabilitiesNet Contract
Balances
Net contract liability at January 1, 2020  — (29)(29)
Amortization of revenue that was included in the beginning contract liability balance  — 15 15 
Cash received, excluding amounts recognized as revenue— (19)(19)
Net contract liability at June 30, 2020  — (33)(33)
v3.20.2
Loss on impairment of equity method investments (Tables)
 6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Loss on impairments of equity method investments
The loss on impairments of our equity method investments for the three and six months ended June 30, 2020 and three and six months ended June 30, 2019 were as follows:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Seadrill Partners - Direct ownership interests— — (47)— 
Total loss on impairment of equity method investments— — (47)— 
v3.20.2
Loss per share (Tables)
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Schedule of calculation of basic and diluted EPS
The components of the numerator for the calculation of basic and diluted LPS were as follows:
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Net loss attributable to shareholder(181)(203)(1,745)(498)
Effect of dilution— — — — 
Diluted net loss available to shareholders(181)(203)(1,745)(498)

The components of the denominator for the calculation of basic and diluted LPS were as follows:
 (In millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Basic loss per share:  
Weighted average number of common shares outstanding100 100 100 100 
Diluted loss per share: 
Effect of dilution— — — — 
Weighted average number of common shares outstanding adjusted for the effects of dilution100 100 100 100 

The basic and diluted loss per share were as follows:
(In $)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Basic loss per share(1.80)(2.03)(17.40)(4.98)
Diluted loss per share(1.80)(2.03)(17.40)(4.98)
v3.20.2
Restricted cash (Tables)
 6 Months Ended
Jun. 30, 2020
Restricted Cash and Investments [Abstract]  
Schedule of restricted cash
Restricted cash as at June 30, 2020 and December 31, 2019 was as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Accounts pledged as collateral for Senior Secured Notes (1)
30 24 
Accounts pledged as collateral for performance bonds and similar guarantees (2)
48 104 
Demand deposit pledged as collateral for tax related guarantee (3)
61 83 
Other32 31 
Total restricted cash171 242 

(1)  In April 2020, Seabras Sapura repaid $6 million of related party and shareholder loans, with the cash proceeds held in escrow against a future redemption of senior secured notes.
(2) On February 24, 2020 we agreed with Danske Bank to reduce our guarantee facility from $90 million to $45 million. As a result, the cash collateral required to be held was reduced.
(3)  We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current within the Consolidated Balance Sheet.

Restricted cash is presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Current restricted cash80 135 
Non-current restricted cash91 107 
Total restricted cash171 242 
v3.20.2
Marketable securities (Tables)
 6 Months Ended
Jun. 30, 2020
Marketable Securities [Abstract]  
Marketable securities held The below table shows the carrying value of our investments in marketable securities for periods presented in this report.
(In $ millions)As at June 30, 2020As at December 31, 2019
Seadrill Partners - Common units— 2 
Archer5 9 
Total marketable securities5 11 
Gains and losses related to marketable securities
The below table shows the gain and losses recognized through net loss for the periods presented in this report.
(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Seadrill Partners - Common units - unrealized loss on marketable securities— (13)(2)(36)
Archer - unrealized gain / (loss) on marketable securities1 (1)(4)1 
Total unrealized gain / (loss) on marketable securities1 (14)(6)(35)
v3.20.2
Other Assets (Tables)
 6 Months Ended
Jun. 30, 2020
Other Assets [Abstract]  
Schedule of other assets
As at June 30, 2020 and December 31, 2019, other assets included the following:
(In $ millions)As at June 30, 2020As at December 31, 2019
Reimbursable amounts due from customers (1)37 21 
Taxes receivable34 38 
Prepaid expenses32 33 
Favorable drilling and management services contracts 32 33 
Right of use asset13 35 
Insurance receivable11 14 
Deferred contract costs9 12 
Derivative asset - interest rate cap1 3 
Other assets14 28 
Total other assets183 217 
(1)Includes reimbursable amounts due from related parties, net of expected credit loss allowance. For further information refer to Note 26 – Related party transactions and Note 3 - Current expected credit losses.
Other assets were presented in our Consolidated Balance Sheet as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Other current assets139 158 
Other non-current assets44 59 
Total other assets183 217 
v3.20.2
Investment in associated companies (Tables)
 6 Months Ended
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of investment in associated companies
As at June 30, 2020 and December 31, 2019, the carrying values of our investments in associated companies were as follows.

(In $ millions)As at June 30, 2020As at December 31, 2019
Seadrill Partners direct ownership interest— 122 
Seabras Sapura103 98 
Seabras Sapura Holding GmbH- Shareholder loans held as equity121 123 
SeaMex9 22 
Sonadrill24 24 
Gulfdrill— — 
Total investment in associated companies257 389 
v3.20.2
Drilling units (Tables)
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Schedule of drilling units
The following table summarizes the movement for the six months ended June 30, 2019:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 20196,890 (231)6,659 
Additions61 — 61 
Depreciation— (207)(207)
As at June 30, 20196,951 (438)6,513 

The following table summarizes the movement for the six months ended June 30, 2020:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 20207,048 (647)6,401 
Additions85 — 85 
Depreciation— (179)(179)
Impairment(1,230)— (1,230)
As at June 30, 20205,903 (826)5,077 
v3.20.2
Equipment (Tables)
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Equipment
The following table summarizes the movement for the six months ended June 30, 2019:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 201934 (5)29 
Additions3 — 3 
Depreciation— (5)(5)
As at June 30, 201937 (10)27

The following table summarizes the movement for the six months ended June 30, 2020:
 (In $ millions)
CostAccumulated depreciationNet book value
As at January 1, 202038 (15)23 
Depreciation— (3)(3)
As at June 30, 202038 (18)20 
v3.20.2
Debt (Tables)
 6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Schedule of debt
As at June 30, 2020 and December 31, 2019, we had the following liabilities for third party debt agreements:
(In $ millions)As at June 30, 2020As at December 31, 2019
Secured credit facilities5,662 5,662 
Senior Secured Notes495 476 
Credit facilities contained within variable interest entities598 621 
Total debt principal6,755 6,759 
Less: debt discount and fees(120)(136)
Carrying value6,635 6,623 

This was presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Debt due within one year420 343 
Long-term debt6,215 6,280 
Total debt principal6,635 6,623 
Debt maturities
The outstanding debt as at June 30, 2020 is repayable as follows:
(In $ millions)Year ended June 30,
2021420 
2022786 
20231,730 
20241,430 
20251,894 
2026 and thereafter495 
Total debt principal (1)
6,755 

(1)  Debt principal repayments, excluding cash and payment-in-kind interest.
v3.20.2
Other Liabilities (Tables)
 6 Months Ended
Jun. 30, 2020
Payables and Accruals [Abstract]  
Other liabilities
As at June 30, 2020 and December 31, 2019, other liabilities included the following:
(In $ millions)As at June 30, 2020As at December 31, 2019
Accrued expenses123 137 
Uncertain tax positions80 83 
Employee withheld taxes, social security and vacation payments41 51 
Accrued interest expense37 40 
Contract liabilities33 29 
Taxes payable30 33 
Lease liabilities15 36 
Unfavorable drilling contracts 7 8 
Other liabilities31 33 
Total Other Liabilities397 450 

Other liabilities are presented in our Consolidated Balance Sheet as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Other current liabilities281 322 
Other non-current liabilities116 128 
Total Other Liabilities397 450 
v3.20.2
Leases (Tables)
 6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Schedule of future undiscounted cash flows
For operating leases where we are the lessee, our future undiscounted cash flows as at June 30, 2020 are as follows:
(In $ millions)Period ended June 30,
20217 
20226 
20232 
20241 
2025 and thereafter1 
Total17 
Schedule of reconciliation and supplementary information The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheets as at June 30, 2020 and December 31, 2019:
(In $ millions)As at June 30, 2020As at December 31, 2019
Total undiscounted cash flows17 45 
Less short term leases— (1)
Less discount(2)(8)
Operating lease liability (1)
15 36 
Of which:
Current6 12 
Non-current9 24 

(1)  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. This rig was novated into the Gulfdrill joint venture on March 12, 2020.

The following table gives supplementary information regarding our lease accounting for the three months ended June 30, 2020 and three months ended June 30, 2019:
(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Cost:
Operating lease cost2 5 4 7 
Short-term lease cost— — — 1 
Total Lease cost2 5 4 8 
Other information:
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows2 5 4 8 
Right-of-use assets obtained in exchange for operating lease liabilities during the period— — — 1 
Weighted-average remaining lease term in months28202820
Weighted-average discount rate13 %13 %13 %13 %
Schedule of operating subleases The estimated future undiscounted cash flows on these leases are as follows:
(In $ millions)Period ended June 30,
202120 
202220 
202320 
20248 
Total68 

The rental income on the leases is set out below:

(In $ million)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Operating Lease Income:
Operating lease income5 — 8 — 
Total Lease income5 — 8 — 
v3.20.2
Common shares (Tables)
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Schedule of share capital Share capital as at December 31, 2019 and June 30, 2020 was as follows:
Issued and fully paid share capital $0.10 par value each
Shares$ millions
As at December 31, 2019100,234,973 10 
As at June 30, 2020100,329,887 10 
v3.20.2
Non-controlling interest (Tables)
 6 Months Ended
Jun. 30, 2020
Noncontrolling Interest [Abstract]  
Schedule of changes in non-controlling interest
Changes in non-controlling interest for the six months ended June 30, 2019 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2019 and March 31, 2019145 7 152 
Net loss attributable to non-controlling interest (2)— (2)
As at June 30, 2019 143 7 150 

Changes in non-controlling interest for the six months ended June 30, 2020 were as follows:
(In $ millions)Ship Finance VIEsSeadrill Nigeria Operations LimitedTotal
As at January 1, 2020140 11 151 
Net loss attributable to non-controlling interest (1)— (1)
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations— (11)(11)
As at March 31, 2020139 — 139 
Net loss attributable to non-controlling interest(1)— (1)
As at June 30, 2020138 — 138 
v3.20.2
Redeemable non-controlling interest (Tables)
 6 Months Ended
Jun. 30, 2020
Temporary Equity Disclosure [Abstract]  
Schedule of changes in redeemable non-controlling interest
Changes in redeemable non-controlling interest for the period from January 1, 2019 to June 30, 2019 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment1 
As at March 31, 201938 
Net loss attributable to redeemable non-controlling interest in the period(1)
As at June 30, 201937 

Changes in redeemable non-controlling interest for the period from January 1, 2020 to June 30, 2020 are set out in the table below.
(In $ millions) Asia Offshore Drilling Ltd
As at January 1, 202057 
Fair value adjustment(27)
As at March 31, 202030 
Net loss attributable to redeemable non-controlling interest in the period(1)
Fair value adjustment(3)
As at June 30, 202026 
v3.20.2
Accumulated other comprehensive (loss)/income (Tables)
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of accumulated other comprehensive income
Accumulated other comprehensive (loss)/income for the period from January 1, 2019 to June 30, 2019 were as follows:

(In $ millions) 
Actuarial gain relating to pensionShare in unrealized loss from associated companiesChange in debt component on Archer bondTotal
As at January 1, 20191 (5)(3)(7)
Other comprehensive (loss)/income— (4)5 1 
As at March 31, 20191 (9)2 (6)
Other comprehensive (loss)/income— (5)1 (4)
As at June 30, 20191 (14)3 (10)

Accumulated other comprehensive (loss)/income for the period from January 1, 2020 to June 30, 2020 were as follows:

(In $ millions) 
Actuarial loss relating to pensionShare in unrealized loss from associated companiesChange in debt component on Archer bondTotal
As at January 1, 2020 — (13)— (13)
Other comprehensive loss— (16)— (16)
As at March 31, 2020 — (29)— (29)
Other comprehensive (loss)/income(7)(1)2 (6)
As at June 30, 2020(7)(30)2 (35)
v3.20.2
Risk management and financial instruments (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Fair Value Disclosures [Abstract]  
Schedule of interest rate risk
We have set out our exposure to interest rate risk on our net debt obligations at June 30, 2020 in the table below:
(In $ millions)PrincipalHedging instrumentsTotalImpact of 1% increase in rates
Senior credit facilities5,662 (4,500)1,162 12 
Ineffective portion of interest rate cap (1)
— 4,500 4,500 45 
Debt contained within VIEs598 — 598 6 
Debt exposed to interest rate fluctuations6,260 — 6,260 63 
Less: Cash and Restricted Cash(1,020)— (1,020)(10)
Net debt exposed to interest rate fluctuations (2)
5,240 — 5,240 53 

(1) The 3-month LIBOR rate as at June 30, 2020 was 0.30%. As this rate was more than 1% below the 2.87% cap rate, the interest cap would not mitigate any impact of a theoretical 1% point increase in LIBOR.
(2) The $495 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:

Gain/(loss) recognized in the Consolidated Statement of Operations relating to derivative financial instrumentsThree months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Interest rate cap agreement(1)(6)(2)(33)
Embedded conversion option on Archer convertible debt instrument1 — 1 —
Gain/(loss) on derivative financial instruments— (6)(1)(33)
Schedule of derivative financial instruments
Derivative financial instruments included in our Consolidated Balance Sheet, within "Other Assets" included the following:
(In $ millions)Maturity dateApplicable rateOutstanding principal - June 30, 2020As at June 30, 2020As at December 31, 2019
Interest rate capJune 2023
2.87% LIBOR cap
4,500 1 3 
1 3 
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 June 30, 2020 and December 31, 2019 are as follows:
As at June 30, 2020As at December 31, 2019
(In $ millions)Fair
value		Carrying
value		Fair
value		Carrying
value
Assets
Related party loans receivable (1) (Level 2)
373 373 395 488 
Liabilities
Secured credit facilities (Level 2)
2,141 5,561 5,464 5,549 
Credit facilities contained within variable interest entities (Level 2)
578 579 590 598 
Senior secured notes (Level 1)
189 495 404 476 
Related party loans within variable interest entities (Level 2)
237 246 229 239 

(1)   Excludes Archer convertible debt receivable, which is measured at fair value on a recurring basis.  Related party loans receivable is $373 million, comprised of principal due of $505 million offset by allowance for expected credit losses recognized of $132 million. For further information on the impact of the expected credit losses to our financial assets please refer to Note 3 - Expected Credit Losses.
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 June 30, 2020 and December 31, 2019 are as follows:
 As at June 30, 2020As at December 31, 2019
(In $ millions)Fair
value		Carrying
value		Fair
value		Carrying
value
Assets
Cash and cash equivalents (Level 1)
849 849 1,115 1,115 
Restricted cash (Level 1)
171 171 242 242 
Marketable securities (Level 1)
5 5 11 11 
Related party loans receivable - Archer convertible debt (Level 3)
9 9 35 35 
Interest rate cap (Level 2)
1 1 3 3 
Temporary equity
Redeemable non-controlling interest (Level 3)
2626 57 57 
v3.20.2
Variable Interest Entities (VIEs) (Tables)
 6 Months Ended
Jun. 30, 2020
Variable Interest Entity, Measure of Activity [Abstract]  
Schedule of assets and liabilities in the financial statements of the VIEs
The combined assets and liabilities in the financial statements of the VIEs as at June 30, 2020 and December 31, 2019 are as follows:

 
(In $ millions)		As at June 30, 2020As at December 31, 2019
Cash and cash equivalents15 22 
Investment in finance lease948 972 
Total assets of the VIEs (1)
963 994 
Short-term interest bearing debt (2)
48 48 
Long-term interest bearing debt (2)
531 550 
Other liabilities4 5 
Short-term amounts due to related parties 4 12 
Long-term debt due to related parties (3)
238 239 
Total liabilities of the VIEs825 854 
Equity of the VIEs138 140 

(1) Book value of units in the Company's consolidated financial statements as at June 30, 2020 was $507 million (December 31, 2019: $784 million).
(2)  Total interest bearing debt comprises principal outstanding of $598 million offset by $19 million debt discount (December 31, 2019: $621 million principal outstanding offset by $23 million debt discount).
(3)  Long-term debt due to related parties comprises principal outstanding of $314 million, offset by debt discount of $68 million and trading asset position held against long-term of $8 million (December 31, 2019: $314 million principal offset by $75 million debt discount).
v3.20.2
Related party transactions (Tables)
 6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Schedule of related party transactions
The below table provides an analysis of related party revenues for periods presented in this report.
 (In $ millions)
Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Management fees revenues (a)36 23 77 43 
Reimbursable revenues (b)37 34 100 51 
Related party inventory sales — 1 1 1 
Total related party operating revenues73 58 178 95 

(a) We provide management and administrative services to Seadrill Partners, SeaMex and Sonadrill and operational and technical support services to Seadrill Partners, SeaMex, Sonadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis.

(b) We recognized reimbursable revenues from Northern Ocean in the six months ended June 30, 2020 for work to perform the first mobilization of the Northern Ocean rigs, West Mira and West Bollsta. As at June 30, 2020 our Consolidated Balance Sheet included $152 million of receivables from Northern Ocean (December 31, 2019: $60 million), before deducting allowances for credit losses. This included $123 million of billed and unbilled trade receivables (December 31 2019: $55 million), which have been classified within the line item "amount due from related parties", and $29 million of costs incurred not yet billable to Northern Ocean (December 31, 2019: $5 million), which have been classified with "Other Assets".

Related party operating expenses

The below table provides an analysis of related party operating expenses for periods presented in this report.

(In $ millions)Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Other related party operating expenses— 1 — 1 
Total related party operating expenses— 1 — 1 

Related party financial items

The below table provides an analysis of related party financial income for periods presented in this report.

 (In $ millions)
Three months ended June 30, 2020Three months ended June 30, 2019Six months ended June 30, 2020Six months ended June 30, 2019
Interest income (c)6 7 12 15 
Total related party financial items6 7 12 15 

(c) We earn interest income on our related party loans to SeaMex and Seabras Sapura (see below).
Related party receivable balances

The below table provides an analysis of related party receivable balances for periods presented in this report.
(In $ millions)As at June 30, 2020As at December 31, 2019
Related party loans and interest (d)505 488 
Deferred consideration arrangements (e)17 31 
Convertible bond (f)9 35 
Trading balances (g)236 150 
Allowance for expected credit losses (h)(201)— 
Total related party receivables566 704 
Of which:
Amounts due from related parties - current184 181 
Amounts due from related parties - non-current382 523 

(d) We have loan receivables outstanding from SeaMex and Seabras Sapura. We have summarized the amounts outstanding in the table below:
(In $ millions)As at June 30, 2020As at December 31, 2019
SeaMex seller's credit and loans receivable442 422 
Seabras loans receivable63 66 
Total related party loans and interest505 488 

SeaMex loans include (i) $250 million "sellers credit" provided to SeaMex in March 2015 which matures in December 2019 but is subordinated to SeaMex's external debt facility, which matures in March 2022. As such, we have classified this balance as non-current on our Consolidated Balance Sheets. (ii) $45 million working capital loan was advanced to SeaMex in November 2016. (iii) $139 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 and (iv) $8 million Sponsor Minimum Liquidity Shortfall loan facility provided to SeaMex in April 2020 which matures at the earlier of February 2021 or two days following the date where there is no Minimum Liquidity Shortfall. The loan earns interest at 6.5% plus 3-month US LIBOR.

Seabras loans include a series of loan facilities that we extended to Seabras Sapura between May 2014 and December 2016. The $63 million balance shown in the table above includes (i) $50 million of loan principal and (ii) $13 million of accrued interest. The loans are repayable on demand, subject to restrictions on Seabras Sapura's external debt facilities. We earn interest of between 3.4% - LIBOR + 3.99% on the loans, depending on the facility.

In addition to the Seabras loans referred above, we have made certain other shareholder loans to Seabras Sapura, which we classify as part of our equity method investment in Seabras Sapura. See Note 14 – Investment in associated companies for further details.

Seabras Sapura repaid $6 million of its outstanding loan balances in April 2020, $4 million relating to its loan facility and $2 million relating to its shareholder loans.


(e) Deferred consideration arrangements include receivables due to us from Seadrill Partners from the sale of the West Vela to Seadrill Partners in November 2014. We have summarized amounts due for each period in the table below:
(In $ millions)As at June 30, 2020As at December 31, 2019
West Vela - Mobilization receivable10 17 
West Vela - Share of dayrate7 14 
Total deferred consideration receivable17 31 

On adoption of fresh start accounting, we recorded a receivable for West Vela share of dayrate. This was previously accounted for as a gain contingency so was only recognized when realized. Under fresh start accounting, the receivable was recognized at a fair value of $29 million and the gain was recognized in reorganization items.
(f) 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 loan incurred interest at 5.5% and was to mature in December 2021, with 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 was in negotiations with its lenders to refinance its 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 of $11 million.

On March 13, 2020, Archer announced completion of a refinancing, which included agreed renegotiated terms on the convertible loan. The updated terms amended the loan balance to $13 million that bears interest of 5.5%, matures in April 2024 and an equity conversion option. The renegotiated terms resulted in a $29 million impairment being recognized following a reduction in loan balance and an increase to the discount rate. The fair value of the convertible debt instrument as at June 30, 2020 was $9 million of which the split between debt and embedded derivative option was $9 million and nil respectively.

(g) Trading balances primarily comprise receivables from Seadrill Partners, SeaMex, Northern Ocean and Sonadrill for related party management fees, crewing fees and payroll recharges. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. As set out below, we have established credit loss allowances for balances that have not been settled in line with these payment terms and are overdue.

(h) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 - Measurement of Credit Losses on Financial Instruments. Refer to Note 3 – Current Expected Credit Losses for further information.

Related party payable balances

Related party liabilities are presented in our Consolidated Balance Sheets as follows:
(In $ millions)As at June 30, 2020As at December 31, 2019
Related party loans payable (i)238 239 
Trading balances (j)11 19 
Total related party liabilities249 258 
Of which:
Amounts due to related parties - current11 19 
Long-term debt due to related parties238 239 

(i) Related party loans include related party loans from Ship Finance to the Ship Finance subsidiaries that we consolidated as variable interest entities (see Note 25 – Variable Interest Entities (VIEs) for further details).

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 three months ended June 30, 2020 was $3 million and the six months ended June 30, 2020 was $7 million. For the three months ended June 30, 2019 the total interest expense incurred was $3 million and for the six months ended June 30, 2019 was $7 million.

(j) 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, Seadrill Partners and Sonadrill.
v3.20.2
General information - Additional Information (Details)
Jun. 30, 2020
drilling_unit
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of offshore drilling units owned and operated 35
Number of offshore drilling units managed and operated for related parties 20
v3.20.2
General information - Change in Presentation (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues $ 277 $ 321 $ 598 $ 623
Selling, general and administrative expenses (17) (24) (37) (47)
Reimbursable revenues/ expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues 10 10 19 19
Expenses (10) (9) (17) (18)
Management contracts        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues [1] 73 58 178 95
Expenses (104) (49) (208) (82)
Other revenues        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues [1] 5 0 9 1
Vessel and rig operating expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Expenses [1] $ (152) (173) $ (304) (364)
As previously reported        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Selling, general and administrative expenses   (30)   (61)
As previously reported | Reimbursable revenues/ expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   44   70
Expenses   (43)   (69)
As previously reported | Management contracts        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   0   0
Expenses   0   0
As previously reported | Other revenues        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   24   45
As previously reported | Vessel and rig operating expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Expenses   (182)   (381)
Adjustment        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Selling, general and administrative expenses   6   14
Adjustment | Reimbursable revenues/ expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   (34)   (51)
Expenses   34   51
Adjustment | Management contracts        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   58   95
Expenses   (49)   (82)
Adjustment | Other revenues        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Revenues   (24)   (44)
Adjustment | Vessel and rig operating expenses        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Expenses   $ 9   $ 17
[1] Includes transactions with related parties. Refer to Note 26 – Related party transactions.
v3.20.2
Recent accounting pronouncements (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Mar. 31, 2020
Jun. 30, 2020
Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201613Member  
Accounts receivable, allowance for credit loss $ 163 $ 206 $ 143
Cumulative Effect, Period of Adoption, Adjustment      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Accounts receivable, allowance for credit loss     $ 143
v3.20.2
Current Expected Credit Losses - Movement in the Allowance for Credit Losses (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2020
Jun. 30, 2019
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Beginning balance $ 163 $ 143 $ 143  
Credit loss expense 43 20 63 $ 0
Ending balance 206 163 206  
Allowance for credit losses - trade receivables        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Beginning balance 0 0 0  
Credit loss expense 0 0    
Ending balance 0 0 0  
Allowance for credit losses - other current assets        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Beginning balance 0 0 0  
Credit loss expense 5 0    
Ending balance 5 0 5  
Allowance for credit losses - related party ST        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Beginning balance 33 15 15  
Credit loss expense 36 18    
Ending balance 69 33 69  
Allowance for credit losses related party LT        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Beginning balance 130 128 128  
Credit loss expense 2 2    
Ending balance $ 132 $ 130 $ 132  
v3.20.2
Current Expected Credit Losses - Classification of Credit Loss Expense (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2020
Jun. 30, 2019
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Credit loss expense $ 43 $ 20 $ 63 $ 0
Management contract expenses        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Credit loss expense 41   50  
Other financial items        
Accounts Receivable, Noncurrent, Past Due [Line Items]        
Credit loss expense $ 2   $ 13  
v3.20.2
Segment information - Results by Segment (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
segment
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Segment Reporting [Abstract]            
Number of operating segments | segment     4      
Segment Reporting Information [Line Items]            
Total operating revenues $ 277 $ 321 $ 598 $ 623    
Depreciation 82 104 182 212    
Amortization of intangibles 0 38 0 73    
Operating loss - Net loss            
Operating loss (88) (73) (1,372) (144)    
Unallocated items:            
Total financial items and other (90) (163) (374) (370)    
Income taxes (5) 30 (2) 12    
Net loss (183) (206) (1,748) (502)    
Drilling units 5,077   5,077   $ 6,401  
Investments in associated companies 257   257   389  
Cash and restricted cash 1,020 1,469 1,020 1,469 1,357 $ 2,003
Other assets 183   183   217  
Total assets 7,291   7,291   9,279  
Drilling units - capital expenditures 51 40 85 64    
Floaters            
Segment Reporting Information [Line Items]            
Total operating revenues 121 172 245 353    
Depreciation 63 85 143 172    
Amortization of intangibles 0 27 0 51    
Operating loss - Net loss            
Operating loss (68) (80) (1,353) (161)    
Unallocated items:            
Drilling units - capital expenditures 40 29 68 41    
Jack-ups            
Segment Reporting Information [Line Items]            
Total operating revenues 82 89 172 172    
Depreciation 18 17 36 36    
Amortization of intangibles 0 10 0 21    
Operating loss - Net loss            
Operating loss 16 4 21 18    
Unallocated items:            
Drilling units - capital expenditures 3 10 8 16    
Management contracts            
Segment Reporting Information [Line Items]            
Total operating revenues 74 59 179 96    
Depreciation 1 2 3 4    
Amortization of intangibles 0 1 0 1    
Operating loss - Net loss            
Operating loss (31) 8 (32) 10    
Other            
Segment Reporting Information [Line Items]            
Total operating revenues 0 1 2 2    
Operating loss - Net loss            
Operating loss (5) (5) (8) (11)    
Unallocated items:            
Drilling units - capital expenditures 8 $ 1 9 $ 7    
Segment Reconciling Items            
Unallocated items:            
Investments in associated companies 257   257   389  
Marketable securities 5   5   11  
Cash and restricted cash 1,020   1,020   1,357  
Other assets 932   932   1,121  
Operating Segments            
Unallocated items:            
Drilling units 5,077   5,077   6,401  
Operating Segments | Floaters            
Unallocated items:            
Drilling units 3,860   3,860   5,144  
Operating Segments | Jack-ups            
Unallocated items:            
Drilling units 1,064   1,064   1,104  
Operating Segments | Other            
Unallocated items:            
Drilling units $ 153   $ 153   $ 153  
v3.20.2
Segment Information - Geographic (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues $ 277 $ 321 $ 598 $ 623  
Drilling units 5,077   5,077   $ 6,401
Norway          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 146 102 291 169  
Drilling units 1,091   1,091   1,818
Angola          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 32 34 98 49  
Saudi Arabia          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 31 35 62 69  
Malaysia          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Drilling units 787   787   805
United States          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 30 14 59 31  
Drilling units 636   636   644
Brazil          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 5 51 19 93  
Nigeria          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 0 53 5 104  
Spain          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Drilling units 605   605   615
Namibia          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Drilling units 631   631   323
Others          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Total operating revenues 33 $ 32 64 $ 108  
Drilling units $ 1,327   $ 1,327   $ 2,196
v3.20.2
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Equinor        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 21.00% 14.00% 19.00% 17.00%
ConocoPhillips        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 15.00% 12.00% 13.00% 12.00%
Saudi Aramco        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 11.00% 11.00% 10.00% 11.00%
Northern Ocean        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 9.00% 7.00% 14.00% 7.00%
Total        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 2.00% 22.00% 4.00% 22.00%
Petrobras        
Revenue, Major Customer [Line Items]        
Concentration risk percentage 2.00% 13.00% 3.00% 13.00%
v3.20.2
Revenue from Contracts with Customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]    
Accounts receivable, net $ 157 $ 173
Current contract liabilities (deferred revenues) (22) (20)
Non-current contract liabilities (deferred revenues) $ (11) $ (9)
v3.20.2
Revenue from Contracts with Customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]    
Contract assets, beginning balance $ 0 $ 1
Contract liabilities, beginning balance (29) (21)
Net contract balances, beginning balance (29) (20)
Amortization of revenue that was included in the beginning contract liability balance 15 3
Cash received, excluding amounts recognized as revenue (19) (13)
Cash received against the beginning contract asset balance   (1)
Contract assets, ending balance 0 0
Contract liabilities, ending balance (33) (31)
Net contract balances, ending balance $ (33) $ (31)
v3.20.2
Revenue from Contracts with Customers - Narrative (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]    
Deferred revenue, current $ 22 $ 20
Deferred revenue, noncurrent $ 11 $ 9
v3.20.2
Impairment of long-lived assets (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Mar. 31, 2020
USD ($)
Jun. 30, 2020
USD ($)
drilling_unit
Jun. 30, 2019
USD ($)
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]      
Number of impaired units | drilling_unit   7  
Loss on impairment of long-lived assets | $ $ 1,230 $ 1,230 $ 0
Discount rate | Discounted cash flow      
Impairment Of Long-Lived Assets [Line Items]      
Long-lived assets, measurement input   0.128  
v3.20.2
Loss on impairment of equity method investments (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Schedule of Equity Method Investments [Line Items]          
Total loss on impairment of equity method investments $ 0 $ (47) $ 0 $ (47) $ 0
Discount rate | Discounted cash flow          
Schedule of Equity Method Investments [Line Items]          
Long-lived assets, measurement input 0.128     0.128  
Seadrill Partners - Direct ownership interests          
Schedule of Equity Method Investments [Line Items]          
Total loss on impairment of equity method investments $ 0   $ 0 $ (47) $ 0
v3.20.2
Taxation (Details)
R$ in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
BRL (R$)
Related Party Transaction [Line Items]          
Income tax (benefit) expense $ 5 $ (30) $ 2 $ (12)  
Nigeria          
Related Party Transaction [Line Items]          
Tax assessment     171    
Secretariat of the Federal Revenue Bureau of Brazil          
Related Party Transaction [Line Items]          
Tax assessment     $ 161    
Appeal, collateral placed | R$         R$ 330
v3.20.2
Loss per share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share [Abstract]        
Net loss attributable to shareholder $ (181) $ (203) $ (1,745) $ (498)
Effect of dilution 0 0 0 0
Diluted net loss available to shareholders $ (181) $ (203) $ (1,745) $ (498)
Basic loss per share:        
Weighted average number of common shares outstanding (in shares) 100 100 100 100
Diluted earnings 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) 100 100 100 100
Basic loss per share (in dollars per share) $ (1.80) $ (2.03) $ (17.40) $ (4.98)
Diluted loss per share (in dollars per share) $ (1.80) $ (2.03) $ (17.40) $ (4.98)
v3.20.2
Restricted cash (Details)
R$ in Millions
 1 Months Ended
Apr. 30, 2020
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2020
BRL (R$)
Feb. 24, 2020
USD ($)
Feb. 23, 2020
USD ($)
Dec. 31, 2019
USD ($)
Restricted Cash and Cash Equivalents Items [Line Items]            
Total restricted cash   $ 171,000,000       $ 242,000,000
Restricted Cash [Abstract]            
Current restricted cash   80,000,000       135,000,000
Non-current restricted cash   91,000,000       107,000,000
Total restricted cash   171,000,000       242,000,000
Guaranty facility | Danske Bank            
Restricted Cash and Cash Equivalents Items [Line Items]            
Maximum borrowing capacity       $ 45,000,000 $ 90,000,000  
Seabras Sapura            
Restricted Cash and Cash Equivalents Items [Line Items]            
Repayment of related party and shareholder loans $ 6,000,000          
BTG Pactual            
Restricted Cash and Cash Equivalents Items [Line Items]            
Appeal, collateral placed | R$     R$ 330      
Accounts pledged as collateral for senior secured notes            
Restricted Cash and Cash Equivalents Items [Line Items]            
Total restricted cash   30,000,000       24,000,000
Accounts pledged as collateral for performance bonds and similar guarantees            
Restricted Cash and Cash Equivalents Items [Line Items]            
Total restricted cash   48,000,000       104,000,000
Demand deposit pledged as collateral for tax related guarantee            
Restricted Cash and Cash Equivalents Items [Line Items]            
Total restricted cash   61,000,000       83,000,000
Other            
Restricted Cash and Cash Equivalents Items [Line Items]            
Total restricted cash   $ 32,000,000       $ 31,000,000
v3.20.2
Marketable securities - Marketable Securities Held (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Gain (Loss) on Securities [Line Items]    
Marketable securities $ 5 $ 11
Seadrill Partners - Common units    
Gain (Loss) on Securities [Line Items]    
Marketable securities 0 2
Archer    
Gain (Loss) on Securities [Line Items]    
Marketable securities $ 5 $ 9
v3.20.2
Marketable securities - Gross Realized Gains and Losses Related to Marketable Securities (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Gain (Loss) on Securities [Line Items]        
Total unrealized gain / (loss) on marketable securities $ 1 $ (14) $ (6) $ (35)
Seadrill Partners - Common units - unrealized loss on marketable securities        
Gain (Loss) on Securities [Line Items]        
Total unrealized gain / (loss) on marketable securities 0 (13) (2) (36)
Archer - unrealized gain / (loss) on marketable securities        
Gain (Loss) on Securities [Line Items]        
Total unrealized gain / (loss) on marketable securities $ 1 $ (1) $ (4) $ 1
v3.20.2
Other Assets - Other Asset Balances (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Other Assets [Abstract]    
Reimbursable amounts due from customers $ 37 $ 21
Taxes receivable 34 38
Prepaid expenses 32 33
Favorable drilling and management services contracts 32 33
Right of use asset 13 35
Insurance receivable 11 14
Deferred contract costs 9 12
Derivative asset - interest rate cap 1 3
Other assets 14 28
Total other assets $ 183 $ 217
v3.20.2
Other Assets - Balance Sheet Presentation (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Other Assets [Abstract]    
Other current assets $ 139 $ 158
Other non-current assets 44 59
Total other assets $ 183 $ 217
v3.20.2
Investment in associated companies (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies $ 257     $ 257   $ 389
Impairment loss on associated companies 0 $ 47 $ 0 47 $ 0  
Seadrill Partners LLC            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies 0     0   122
Seabras Sapura            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies 103     103   98
Seabras Sapura - Shareholder loans            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies 121     121   123
SeaMex            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies 9     9   22
Sonadrill            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies 24     24   24
Gulfdrill            
Schedule of Equity Method Investments [Line Items]            
Investments in associated companies $ 0     $ 0   $ 0
v3.20.2
Drilling units (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Mar. 31, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Cost          
Impairment $ (1,230) $ (1,230) $ 0    
Closing balance     37    
Accumulated depreciation          
Closing balance     (10)    
Net book value     27    
Drilling units          
Cost          
Opening balance 7,048 7,048 6,890    
Additions   85 61    
Impairment   (1,230)      
Closing balance   5,903 6,951    
Accumulated depreciation          
Opening balance $ (647) (647) (231)    
Depreciation   (179) (207)    
Closing balance   (826) (438)    
Net book value   $ 5,077 $ 6,513 $ 6,401 $ 6,659
v3.20.2
Equipment (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Dec. 31, 2018
Cost        
Closing balance   $ 37    
Accumulated depreciation        
Closing balance   (10)    
Net book value   27    
Equipment        
Cost        
Opening balance $ 38 34    
Additions   3    
Closing balance 38      
Accumulated depreciation        
Opening balance (15) (5)    
Depreciation (3) $ (5)    
Closing balance (18)      
Net book value $ 20   $ 23 $ 29
v3.20.2
Debt - Schedule of Debt (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Apr. 10, 2019
Debt Instrument [Line Items]      
Total debt principal $ 6,755 $ 6,759  
Less: debt discount and fees (120) (136)  
Carrying value 6,635 6,623  
Secured credit facilities | Secured debt      
Debt Instrument [Line Items]      
Total debt principal $ 6,260 5,662  
New secured notes | Secured debt      
Debt Instrument [Line Items]      
Total debt principal   476 $ 311
Credit facilities contained within variable interest entities | Secured debt      
Debt Instrument [Line Items]      
Total debt principal   $ 621  
v3.20.2
Debt - Outstanding Debt, Long-term and Debt Issuance Costs (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Debt Disclosure [Abstract]    
Debt due within one year $ 420 $ 343
Long-term debt 6,215 6,280
Carrying value $ 6,635 $ 6,623
v3.20.2
Debt - Narrative (Details)
 1 Months Ended 6 Months Ended
Apr. 10, 2019
USD ($)
Jun. 30, 2020
USD ($)
lender
Mar. 31, 2020
USD ($)
Nov. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
lender
Jun. 30, 2019
USD ($)
Jan. 15, 2020
USD ($)
Dec. 31, 2019
USD ($)
Jul. 15, 2019
USD ($)
Dec. 31, 2018
USD ($)
Debt Instrument [Line Items]                    
Total debt principal   $ 6,755,000,000     $ 6,755,000,000     $ 6,759,000,000    
Repurchase senior secured notes         0 $ 333,000,000        
Accrued interest compounded and added to principal             $ 19,000,000   $ 18,000,000  
Amortization payments, option to defer   500,000,000     500,000,000          
Amortization payments, amounts deferred   111,000,000 $ 74,000,000 $ 63,000,000            
Amortization payments, option to defer, remaining amount available   252,000,000     252,000,000          
Amounts due in 2021 reduced to if option to defer utilized   $ 168,000,000     $ 168,000,000          
Increase in interest rate if debt covenants not met         0.0100          
Credit facility amendment, percent of approval of banks required   100.00%     100.00%          
Number of lenders | lender   43     43          
Cash and restricted cash   $ 1,020,000,000     $ 1,020,000,000 $ 1,469,000,000   1,357,000,000   $ 2,003,000,000
Secured debt | New secured notes                    
Debt Instrument [Line Items]                    
Total debt principal $ 311,000,000             $ 476,000,000    
Repurchase senior secured notes 342,000,000                  
Payment of debt premium and accrued payment-in-kind of cash interest $ 31,000,000                  
Purchase premium 7.00%                  
v3.20.2
Debt - Debt Maturity (Details)
$ in Millions
Jun. 30, 2020
USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]  
2021 $ 420
2022 786
2023 1,730
2024 1,430
2025 1,894
2026 495
Total debt principal $ 6,755
v3.20.2
Other Liabilities - Liability Balances (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Jun. 30, 2019
Dec. 31, 2018
Other Liabilities [Abstract]        
Accrued expenses $ 123 $ 137    
Uncertain tax positions 80 83    
Employee withheld taxes, social security and vacation payments 41 51    
Accrued interest expense 37 40    
Contract liabilities 33 29 $ 31 $ 21
Taxes payable 30 33    
Lease liabilities 15 36    
Unfavorable drilling contracts 7 8    
Other liabilities 31 33    
Total Other Liabilities $ 397 $ 450    
v3.20.2
Other Liabilities - Balance Sheet (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Other Liabilities [Abstract]    
Other current liabilities $ 281 $ 322
Other non-current liabilities 116 128
Total Other Liabilities $ 397 $ 450
v3.20.2
Leases - Operating Leases Future Undiscounted Cash Flows (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Operating leases, future minimum payments due, fiscal year maturity [Abstract]    
2021 $ 7  
2022 6  
2023 2  
2024 1  
2025 and thereafter 1  
Total undiscounted cash flows $ 17 $ 45
v3.20.2
Leases - Balance Sheet (Details)
$ in Millions
Jun. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
Sep. 03, 2019
rig
Leases [Abstract]      
Total undiscounted cash flows $ 17 $ 45  
Less short term leases 0 (1)  
Less discount (2) (8)  
Operating lease liability 15 36  
Current 6 12  
Non-current $ 9 $ 24  
Number of leased rigs | rig     3
v3.20.2
Leases - Supplementary Information (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Operating lease cost        
Operating lease cost $ 2 $ 5 $ 4 $ 7
Short-term lease cost 0 0 0 1
Total Lease cost 2 5 4 8
Lease, Other Information [Abstract]        
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 2 5 4 8
Right-of-use assets obtained in exchange for operating lease liabilities during the period $ 0 $ 0 $ 0 $ 1
Weighted-average remaining lease term in months 28 months 20 months 28 months 20 months
Weighted-average discount rate 13.00% 13.00% 13.00% 13.00%
v3.20.2
Leases - Operating Subleases (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract]        
2021 $ 20   $ 20  
2022 20   20  
2023 20   20  
2024 8   8  
Total 68   68  
Operating lease income $ 5 $ 0 $ 8 $ 0
v3.20.2
Common shares (Details) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended
Feb. 29, 2020
Jun. 30, 2020
Dec. 31, 2019
Equity [Abstract]      
Common shares, par value (in dollars per share)   $ 0.10 $ 0.10
Common stock, shares issued (in shares)   100,329,887 100,234,973
Common stock, value   $ 10 $ 10
Shares issued to employees, vesting of restricted stock units (in shares) 94,914    
v3.20.2
Non-controlling interest (Details) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended
Feb. 29, 2020
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Changes in non-controlling interest [Roll Forward]              
Balance, beginning of period     $ 151,000,000     $ 151,000,000  
Net loss attributable to non-controlling interest   $ (1,000,000)   $ (2,000,000)   (2,000,000) $ (2,000,000)
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations     11,000,000        
Balance, end of period   $ 138,000,000       $ 138,000,000  
Seadrill Nigeria Operations Limited              
Changes in non-controlling interest [Roll Forward]              
Payment to acquire option to buy noncontrolling interest $ 11,000,000            
Option to buy noncontrolling interest $ 1            
West Jupiter | Seadrill Nigeria Operations Limited              
Changes in non-controlling interest [Roll Forward]              
Noncontrolling interest, ownership percentage by noncontrolling owners   10.00%       10.00%  
NCI              
Changes in non-controlling interest [Roll Forward]              
Balance, beginning of period   $ 139,000,000 151,000,000 152,000,000 $ 152,000,000 $ 151,000,000 152,000,000
Net loss attributable to non-controlling interest   (1,000,000) (1,000,000) (2,000,000) (2,000,000)    
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations     (11,000,000)        
Balance, end of period   138,000,000 139,000,000 150,000,000 152,000,000 138,000,000 150,000,000
NCI | Ship Finance VIEs              
Changes in non-controlling interest [Roll Forward]              
Balance, beginning of period   139,000,000 140,000,000 145,000,000 145,000,000 140,000,000 145,000,000
Net loss attributable to non-controlling interest   (1,000,000) (1,000,000) (2,000,000) (2,000,000)    
Balance, end of period   138,000,000 139,000,000 143,000,000 145,000,000 138,000,000 143,000,000
NCI | Seadrill Nigeria Operations Limited              
Changes in non-controlling interest [Roll Forward]              
Balance, beginning of period   0 11,000,000 7,000,000 7,000,000 11,000,000 7,000,000
Share buyback of Heirs Holding shares in Seadrill Nigeria Operations     (11,000,000)        
Balance, end of period   $ 0 $ 0 $ 7,000,000 $ 7,000,000 $ 0 $ 7,000,000
v3.20.2
Redeemable non-controlling interest (Details) - USD ($)
 3 Months Ended
Apr. 04, 2018
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Increase (Decrease) in Temporary Equity [Roll Forward]          
Beginning balance     $ 57,000,000    
Ending balance   $ 26,000,000      
Asia Offshore Drilling Ltd          
Increase (Decrease) in Temporary Equity [Roll Forward]          
Noncontrolling interest, ownership percentage by parent   66.24%      
Noncontrolling interest, parent option to purchase, price floor $ 75,000,000        
Noncontrolling interest, purchase price cash settlement, maximum threshold 50,000,000        
Noncontrolling interest, purchase price cash and shares settlement, minimum threshold 50,000,000        
Noncontrolling interest, purchase price, amount to be settled in cash $ 50,000,000        
Volume-weighted average price period 60 days        
Asia Offshore Drilling Ltd | Mermaid          
Increase (Decrease) in Temporary Equity [Roll Forward]          
Noncontrolling interest, ownership percentage by noncontrolling owners   33.76%      
Noncontrolling interest, noncontrolling interest owner option to sell, price ceiling $ 125,000,000        
Redeemable non-controlling interest | Asia Offshore Drilling Ltd          
Increase (Decrease) in Temporary Equity [Roll Forward]          
Beginning balance   $ 30,000,000 57,000,000 $ 38,000,000 $ 38,000,000
Net loss attributable to redeemable non-controlling interest in the period   (1,000,000)   (1,000,000) (1,000,000)
Fair value adjustment   (3,000,000) (27,000,000)   1,000,000
Ending balance   $ 26,000,000 $ 30,000,000 $ 37,000,000 $ 38,000,000
v3.20.2
Accumulated other comprehensive (loss)/income (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance $ 86 $ 1,793 $ 2,741 $ 3,035 $ 1,793 $ 3,035
Other comprehensive income before reclassifications (6) (16) (4) 1    
Ending balance (98) 86 2,533 2,741 (98) 2,533
Other comprehensive income tax         2 0
Accumulated other comprehensive loss            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (29) (13) (6) (7) (13) (7)
Ending balance (35) (29) (10) (6) (35) (10)
Actuarial gain relating to pension            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance 0 0 1 1 0 1
Other comprehensive income before reclassifications (7) 0 0 0    
Ending balance (7) 0 1 1 (7) 1
Share in unrealized loss from associated companies            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (29) (13) (9) (5) (13) (5)
Other comprehensive income before reclassifications (1) (16) (5) (4)    
Ending balance (30) (29) (14) (9) (30) (14)
Change in debt component on Archer bond            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance 0 0 2 (3) 0 (3)
Other comprehensive income before reclassifications 2 0 1 5    
Ending balance $ 2 $ 0 $ 3 $ 2 $ 2 $ 3
v3.20.2
Risk management and financial instruments - Derivative Narrative (Details) - USD ($)
$ in Millions
May 11, 2018
Jun. 30, 2020
Dec. 31, 2019
Apr. 26, 2017
Derivative [Line Items]        
Convertible bond issued by Archer   $ 249 $ 258  
Interest rate cap        
Derivative [Line Items]        
Purchase of derivative instrument $ 68      
Interest rate cap | LIBOR        
Derivative [Line Items]        
Capped rate 2.87%      
Archer | Convertible bond        
Derivative [Line Items]        
Convertible bond issued by Archer       $ 45
v3.20.2
Risk management and financial instruments - Interest Rate Risk (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Apr. 10, 2019
May 11, 2018
Debt Instrument [Line Items]        
Principal $ 6,755 $ 6,759    
Impact of 1% increase in rates 53      
Less: Cash and Restricted Cash (1,020)      
Net debt exposed to interest rate fluctuations 5,240      
Interest Rate Contract        
Debt Instrument [Line Items]        
Hedging instruments, ineffective portion 4,500      
Impact of 1% increase in rates 45      
Interest rate cap | LIBOR        
Debt Instrument [Line Items]        
Capped rate       2.87%
Secured debt        
Debt Instrument [Line Items]        
Impact of 1% increase in rates 6      
Secured debt | Variable Interest Entity, Not Primary Beneficiary        
Debt Instrument [Line Items]        
Principal 598      
Secured debt | Secured credit facilities        
Debt Instrument [Line Items]        
Principal 6,260 5,662    
Total 6,260      
Impact of 1% increase in rates 63      
Secured debt | Secured credit facilities | Consolidated Entity, Excluding VIE        
Debt Instrument [Line Items]        
Principal 5,662      
Hedging instruments (4,500)      
Total 1,162      
Impact of 1% increase in rates 12      
Secured debt | New Secured Notes        
Debt Instrument [Line Items]        
Principal   $ 476 $ 311  
Less: Cash and Restricted Cash        
Debt Instrument [Line Items]        
Impact of 1% increase in rates $ 10      
v3.20.2
Risk management and financial instruments - Realized and Unrealized Gains and Losses (Details) - (Loss)/gain recognized relating to derivative financial instruments - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments $ 0 $ (6) $ (1) $ (33)
Interest rate cap agreement        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments (1) (6) (2) (33)
Archer convertible debt instrument        
Derivative Instruments, Gain (Loss) [Line Items]        
Loss/(gain) on derivative financial instruments $ 1 $ 0 $ 1 $ 0
v3.20.2
Risk management and financial instruments - Derivative Financial Instruments (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
May 11, 2018
Derivatives, Fair Value [Line Items]      
Outstanding principal $ 5,240,000,000    
Other Assets      
Derivatives, Fair Value [Line Items]      
Derivative financial instruments 1,000,000 $ 3,000,000  
Other Assets | Interest rate cap      
Derivatives, Fair Value [Line Items]      
Outstanding principal 4,500,000,000    
Derivative asset $ 1,000,000 $ 3,000,000  
LIBOR cap | Interest rate cap      
Derivatives, Fair Value [Line Items]      
Applicable rate     2.87%
v3.20.2
Risk management and financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Liabilities    
Related party loans receivable $ 373  
Related party loans receivable, gross 505  
Related party loans receivable, allowance for credit losses 132  
Fair value | Level 2    
Assets    
Related party loans receivable 373 $ 395
Liabilities    
Related party loans within variable interest entities 237 229
Fair value | Level 2 | Secured credit facilities    
Liabilities    
Debt 2,141 5,464
Fair value | Level 2 | Credit facilities contained within variable interest entities    
Liabilities    
Debt 578 590
Fair value | Level 1 | Secured debt    
Liabilities    
Debt 189 404
Carrying value | Level 2    
Assets    
Related party loans receivable 373 488
Liabilities    
Related party loans within variable interest entities 246 239
Carrying value | Level 2 | Secured debt    
Liabilities    
Debt 495  
Carrying value | Level 2 | Secured credit facilities    
Liabilities    
Debt 5,561 5,549
Carrying value | Level 2 | Credit facilities contained within variable interest entities    
Liabilities    
Debt 579 598
Carrying value | Level 1 | Secured debt    
Liabilities    
Debt $ 495 $ 476
v3.20.2
Risk management and financial instruments - Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Assets    
Restricted cash $ 171 $ 242
Fair value, recurring basis | Level 1    
Assets    
Cash and cash equivalents 849 1,115
Restricted cash 171 242
Marketable securities 5 11
Fair value, recurring basis | Level 3    
Assets    
Related party loans receivable 9 35
Temporary equity    
Redeemable non-controlling interest 26 57
Fair value, recurring basis | Level 2 | Interest rate cap agreement    
Assets    
Interest rate cap $ 1 $ 3
v3.20.2
Risk management and financial instruments - Fair Value Narrative (Details)
$ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Mar. 13, 2020
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Related party convertible note receivable             $ 13
Related party convertible note receivable, stated interest rate             5.50%
Impairment of convertible bond from related party $ 0   $ 0 $ 29 $ 0 $ 11  
Loss on change in fair value of debt component of convertible note receivable           3  
Impairment loss on associated companies $ 0 $ 47 $ 0 47 0    
Impairment of investments           $ 302  
Loss on impairment of long-lived assets   $ 1,230   $ 1,230 $ 0    
Discounted cash flow | Discount rate              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Related party note receivable, measurement input 0.11     0.11      
Noncontrolling interest, measurement input 0.128     0.128      
Discounted cash flow | Discount rate | Archer Convertible Debt              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Debt instrument, measurement input 0.04     0.04      
Related party note receivable, measurement input 0.276     0.276   0.14  
Discounted cash flow | Discount rate | Variable Interest Entity, Not Primary Beneficiary              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Debt instrument, measurement input           0.04  
Discounted cash flow | Discount rate | Secured credit facilities              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Debt instrument, measurement input           0.04  
v3.20.2
Variable Interest Entities (VIEs) (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Variable Interest Entity [Line Items]    
Cash and cash equivalents $ 849 $ 1,115
Total assets 7,291 9,279
Long-term interest bearing debt 6,755  
Other liabilities 397 450
Short-term amounts due to related parties 11 19
Long-term debt due to related parties 238 239
Total debt principal 6,755 6,759
Book value of units in the Company's consolidated financial statements 507 784
Variable Interest Entity    
Variable Interest Entity [Line Items]    
Cash and cash equivalents 15 22
Investment in finance lease 948 972
Total assets 963 994
Short-term interest bearing debt 48 48
Long-term interest bearing debt 531 550
Other liabilities 4 5
Short-term amounts due to related parties 4 12
Long-term debt due to related parties 238 239
Total liabilities of the VIEs 825 854
Equity of the VIEs 138 140
Total debt principal 598 621
Debt discount 19 23
Long-term debt due to related parties, principal 314 314
Long-term debt due to related parties, unamortized discount 68 $ 75
Derivative asset $ 8  
v3.20.2
Related party transactions - Related Party Revenue, Operating Expenses, and Financial Items (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]          
Total related party operating revenues $ 73 $ 58 $ 178 $ 95  
Receivables from related parties 566   566   $ 704
Total related party operating expenses 0 1 0 1  
Total related party financial items 6 7 12 15  
Northern Ocean          
Related Party Transaction [Line Items]          
Receivables from related parties 152   152   60
Receivables from related parties, billed and unbilled 123   123   55
Receivables from related parties, costs incurred not yet billable 29   29   $ 5
Management fee revenues          
Related Party Transaction [Line Items]          
Total related party operating revenues 36 23 77 43  
Reimbursable revenues          
Related Party Transaction [Line Items]          
Total related party operating revenues 37 34 100 51  
Related party inventory sales          
Related Party Transaction [Line Items]          
Total related party operating revenues $ 0 $ 1 $ 1 $ 1  
v3.20.2
Related party transactions - Related Party Receivable Balances (Details) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Apr. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Dec. 31, 2017
Mar. 13, 2020
Jul. 02, 2018
Apr. 26, 2017
Apr. 25, 2017
Related Party Transaction [Line Items]                      
Related party receivables, allowance for credit losses   $ (201)   $ (201)   $ 0          
Total related party receivables   566   566   704          
Amounts due from related parties - current   184   184   181          
Amounts due from related parties - non-current   382   382   523          
Gain on debt extinguishment   0 $ (22) 0 $ (22)            
Impairment of convertible bond from related party   0 $ 0 29 $ 0 11          
Related party convertible note receivable               $ 13      
Archer                      
Related Party Transaction [Line Items]                      
Related party receivable before conversion                   $ 146  
Related party receivable after conversion                   $ 45  
Convertible note receivable, interest rate               5.50%   5.50%  
Convertible note receivable, fair value                   $ 56 $ 37
Gain on debt extinguishment             $ 19        
Impairment of convertible bond from related party       29   11          
Related party loans and interest                      
Related Party Transaction [Line Items]                      
Related party receivables, gross   505   505   488          
Total related party receivables   505   505   488          
Related party loans and interest | SeaMex seller's credit and loans receivable                      
Related Party Transaction [Line Items]                      
Total related party receivables   442   442   422          
Sellers credit   250   250              
Working capital loan   45   45              
Interest receivable   $ 139   $ 139              
Sellers credit and working capital loans, interest rate   6.50%   6.50%              
Sponsor Minimum Liquidity Shortfall loan facility   $ 8   $ 8              
Related party loans and interest | SeaMex seller's credit and loans receivable | LIBOR                      
Related Party Transaction [Line Items]                      
Sponsor Minimum Liquidity Shortfall loan facility, interest rate   6.50%   6.50%              
Related party loans and interest | Seabras loans receivable                      
Related Party Transaction [Line Items]                      
Related party receivables, gross   $ 50   $ 50              
Total related party receivables   63   63   66          
Interest receivable   13   $ 13              
Repayment of loans $ 6                    
Related party loans and interest | Seabras loans receivable | Minimum                      
Related Party Transaction [Line Items]                      
Interest rate on related party receivable       3.40%              
Related party loans and interest | Seabras loans receivable | LIBOR | Maximum                      
Related Party Transaction [Line Items]                      
Interest rate on related party receivable       3.99%              
Deferred consideration arrangements                      
Related Party Transaction [Line Items]                      
Related party receivables, gross   17   $ 17   31          
Deferred consideration arrangements | Seadrill Partners | Disposed of by sale                      
Related Party Transaction [Line Items]                      
Total related party receivables   17   17   31          
Convertible bond                      
Related Party Transaction [Line Items]                      
Related party receivables, gross   9   9   35          
Trading balances                      
Related Party Transaction [Line Items]                      
Related party receivables, gross   236   236   150          
Loan facility | Seabras loans receivable                      
Related Party Transaction [Line Items]                      
Repayment of loans 4                    
Shareholder loans | Seabras loans receivable                      
Related Party Transaction [Line Items]                      
Repayment of loans $ 2                    
Due From Related Party, Deferred Compensation Arrangements, Share Of Dayrate [Member] | Seadrill Partners | Disposed of by sale | West Vela                      
Related Party Transaction [Line Items]                      
Total related party receivables   7   7   14          
Adjustments, increase (decrease), Amount due from related parties                 $ 29    
Due From Related Party, Deferred Compensation Arrangements, Mobilization Receivable [Member] | Seadrill Partners | Disposed of by sale | West Vela                      
Related Party Transaction [Line Items]                      
Total related party receivables   $ 10   $ 10   $ 17          
v3.20.2
Related party transactions - Related Party Payable Balances (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]          
Long-term debt due to related parties $ 238   $ 238   $ 239
Amounts due to related parties - current 11   11   19
Total related party liabilities 249   $ 249   $ 258
Related party loans payable          
Related Party Transaction [Line Items]          
Interest rate on related party payable     4.50%    
Interest expense on related party payable $ 3 $ 3 $ 7 $ 7  
v3.20.2
Related party transactions - Other Related Party Transactions (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Dec. 31, 2014
Nov. 30, 2012
Seabras Sapura | Secured debt | Sapura Esmeralda        
Related Party Transaction [Line Items]        
Maximum borrowing capacity     $ 36,000,000 $ 179,000,000
Seabras Sapura | TL Offshore Sdn. Bhd | Sponsor guarantee        
Related Party Transaction [Line Items]        
Total amount guaranteed $ 139,000,000 $ 146,000,000    
v3.20.2
Commitments and contingencies (Details)
$ in Millions
 1 Months Ended 18 Months Ended
Jun. 28, 2019
Mar. 31, 2019
rig
Jun. 30, 2020
USD ($)
contract
Dec. 31, 2019
USD ($)
Guarantor Obligations [Line Items]        
Number of newbuilding contracts cancelled | contract     8  
Number of rigs included in legal proceedings | rig   8    
Costs to repair equipment     $ 22  
Recovered from insurance     8  
Insurance receivable     11 $ 14
Insurance Recoveries, Loss Of Hire     $ 18  
Dalian        
Guarantor Obligations [Line Items]        
Number of newbuilding contracts terminated | contract     6  
Maximum guarantee       $ 400
Nigeria | Seadrill Mobile Units (Nigeria) Ltd        
Guarantor Obligations [Line Items]        
Contract revenue, surcharge 2.00%