2023 Q4 Form 20-F Financial Statement

#000162828024013140 Filed on March 27, 2024

View on sec.gov

Income Statement

Concept 2023 Q4 2023 2022 Q4
Revenue $408.0M $1.502B
YoY Change 48.42%
Cost Of Revenue $283.0M $934.0M
YoY Change 28.3%
Gross Profit $125.0M $568.0M
YoY Change 100.0%
Gross Profit Margin 30.64% 37.82%
Selling, General & Admin $26.00M $74.00M
YoY Change 23.33%
% of Gross Profit 20.8% 13.03%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $43.00M $155.0M
YoY Change 1.97%
% of Gross Profit 34.4% 27.29%
Operating Expenses $70.00M $229.0M
YoY Change 8.02%
Operating Profit $55.00M $339.0M
YoY Change 370.83%
Interest Expense $8.000M $13.00M
YoY Change -116.67%
% of Operating Profit 14.55% 3.83%
Other Income/Expense, Net -$6.000M -$25.00M
YoY Change -256.25%
Pretax Income $54.00M $317.0M
YoY Change -91.38%
Income Tax -$19.00M $17.00M
% Of Pretax Income -35.19% 5.36%
Net Earnings $73.00M $300.0M
YoY Change -92.32%
Net Earnings / Revenue 17.89% 19.97%
Basic Earnings Per Share $4.23
Diluted Earnings Per Share $0.95 $4.12
COMMON SHARES
Basic Shares Outstanding 73.71M shares 50.00M shares
Diluted Shares Outstanding 74.00M shares

Balance Sheet

Concept 2023 Q4 2023 2022 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $697.0M $697.0M
YoY Change 45.21%
Cash & Equivalents $697.0M $697.0M $480.0M
Short-Term Investments
Other Short-Term Assets $230.0M $230.0M $169.0M
YoY Change 36.09% 7.98% -14.21%
Inventory
Prepaid Expenses $54.00M $37.00M
Receivables $222.0M $222.0M $137.0M
Other Receivables $9.000M $9.000M
Total Short-Term Assets $1.158B $1.158B $857.0M
YoY Change 35.12% 35.12% -56.74%
LONG-TERM ASSETS
Property, Plant & Equipment $2.868B $2.868B
YoY Change 70.92%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $90.00M $90.00M $84.00M
YoY Change 7.14% 7.14% 211.11%
Other Assets $102.0M $102.0M $93.00M
YoY Change 9.68% -43.96% 244.44%
Total Long-Term Assets $3.060B $3.060B $1.944B
YoY Change 57.41% 57.41% 1.46%
TOTAL ASSETS
Total Short-Term Assets $1.158B $1.158B $857.0M
Total Long-Term Assets $3.060B $3.060B $1.944B
Total Assets $4.218B $4.218B $2.801B
YoY Change 50.59% 50.59% -28.12%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $53.00M $53.00M $76.00M
YoY Change -30.26% -30.26% 43.4%
Accrued Expenses $2.000M $140.0M $124.0M
YoY Change -98.39% 4566.67%
Deferred Revenue $31.00M $19.00M
YoY Change 63.16% -24.0%
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00 $22.00M
YoY Change -100.0% -100.0%
Total Short-Term Liabilities $389.0M $389.0M $404.0M
YoY Change -3.71% -3.71% -67.81%
LONG-TERM LIABILITIES
Long-Term Debt $608.0M $608.0M $496.0M
YoY Change 22.58% 22.58%
Other Long-Term Liabilities $229.0M $229.0M $190.0M
YoY Change 20.53% 20.53% 69.64%
Total Long-Term Liabilities $837.0M $837.0M $695.0M
YoY Change 20.43% 22.01% 465.04%
TOTAL LIABILITIES
Total Short-Term Liabilities $389.0M $389.0M $404.0M
Total Long-Term Liabilities $837.0M $837.0M $695.0M
Total Liabilities $1.235B $1.235B $1.099B
YoY Change 12.37% 12.37% -20.25%
SHAREHOLDERS EQUITY
Retained Earnings $501.0M $201.0M
YoY Change 149.25% -102.79%
Common Stock $741.0K $0.00
YoY Change -100.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $2.983B $2.983B
YoY Change
Total Liabilities & Shareholders Equity $4.218B $4.218B $2.801B
YoY Change 50.59% 50.59% -28.12%

Cashflow Statement

Concept 2023 Q4 2023 2022 Q4
OPERATING ACTIVITIES
Net Income $73.00M $300.0M
YoY Change -92.32%
Depreciation, Depletion And Amortization $43.00M $155.0M
YoY Change 1.97%
Cash From Operating Activities $140.0M $287.0M
YoY Change 3088.89%
INVESTING ACTIVITIES
Capital Expenditures $48.00M $101.0M
YoY Change -32.21%
Acquisitions
YoY Change
Other Investing Activities -$10.00M $143.0M
YoY Change -70.93%
Cash From Investing Activities -$58.00M $42.00M
YoY Change -87.76%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net -$217.0M -$263.0M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -220.0M -200.0M
YoY Change -44.9%
NET CHANGE
Cash From Operating Activities 140.0M 287.0M
Cash From Investing Activities -58.00M 42.00M
Cash From Financing Activities -220.0M -200.0M
Net Change In Cash -138.0M 129.0M
YoY Change -1272.73%
FREE CASH FLOW
Cash From Operating Activities $140.0M $287.0M
Capital Expenditures $48.00M $101.0M
Free Cash Flow $92.00M $186.0M
YoY Change -232.86%

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General information<div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Seadrill Limited is incorporated in Bermuda. We are an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drillships, semi-submersible rigs and jackup rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities. As of December 31, 2023, we owned a total of 19 drilling rigs, of which three were leased to the Gulfdrill LLC ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Gulfdrill</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") joint venture, one was leased to the Sonadrill joint venture, three were cold stacked and one was warm stacked. In addition to our owned assets, as of December 31, 2023, we managed two rigs owned by Sonangol.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">As used herein, the term "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Predecessor</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">" refers to the financial position and results of operations of Seadrill Limited prior to, and including, February 22, 2022. This is also applicable to terms "we", "our", "Group" or "Company" in the context of events on and prior to February 22, 2022. As used herein, the term "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Successor</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">" refers to the financial position and results of operations of Seadrill Limited (previously Seadrill 2021 Limited) after February 22, 2022 (the "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Effective Date</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"). This is also applicable to terms "new Successor", "we", "our", "Group" or "Company" in the context of events after February 22, 2022 (Successor). </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">The use herein of such terms as "Group", "organization", "we", "us", "our" and "its", or references to specific entities, is not intended to be a precise description of corporate relationships. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:115%">Basis of presentation</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">The Consolidated Financial Statements comply with generally accepted accounting principles in the United States of America ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">US GAAP</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") and are presented in U.S. dollars ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">US dollar</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">", "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">$</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">" or "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">US$</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") rounded to the nearest million, unless stated otherwise. They include the financial statements of Seadrill Limited and its consolidated subsidiaries. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">In January 2022, we disposed of 65% of our equity interest in Paratus Energy Services Ltd ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">PES</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") and in October 2022, we disposed of seven jackup units with contract in the Kingdom of Saudi Arabia (the "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">KSA Business</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"). Both transactions represented strategic shifts in Seadrill's operations which were deemed to have a major effect on its operations and financial results in 2022 and going forward and therefore both were reclassified as discontinued operations. As such, their results were reported separately in comparative periods.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Following the sale of the KSA Business, our organizational structure was simplified, consolidating our operations into a single segment. In light of this change, the information provided to the Chief Operating Decision Maker ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">CODM</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") has been adapted to reflect the updated operational structure during the year ended December 31, 2023. As a result, we have updated the reportable segments disclosed externally from Harsh Environment Floaters, and Jackups to a single operating segment. This has been reflected for all periods covered by the report.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">The financial information presented assumes we will continue as a going concern, able to realize our assets and discharge liabilities in the normal course of business as they come due.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:115%">Basis of consolidation</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">We consolidate companies where we control over 50% of voting rights, and entities where we hold a variable interest and are the primary beneficiary. A variable interest entity ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">VIE</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") is a legal entity where equity at risk is not enough to finance its activities, or equity interest holders lack power to direct activities or receive expected returns. We are the primary beneficiary of a VIE when we have the power to direct activities that impact economic performance and the right to receive benefits or absorb losses. We exclude subsidiaries, even if fully owned, if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Acquisition of Aquadrill LLC</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">On April 3, 2023 (the "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Closing Date</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"), Seadrill completed the acquisition of Aquadrill LLC ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Aquadrill</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"), an offshore drilling rig owner. Pursuant to the Agreement and Plan of Merger (the "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Merger Agreement</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">") dated December 22, 2022, by and among Seadrill, Aquadrill (formerly Seadrill Partners LLC) and Seadrill Merger Sub, LLC, a Marshall Islands limited liability company ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Merger Sub</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"), Merger Sub merged with and into Aquadrill, with Aquadrill surviving the merger as a wholly owned subsidiary of Seadrill (the "</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Merger</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"). In connection with the Merger, and pursuant to the Merger Agreement, Seadrill exchanged consideration consisting of (i) 29.9 million Seadrill common shares, (ii) $30 million settled by tax withholding in lieu of common shares, and (iii) cash consideration of $1 million.</span></div><div style="margin-bottom:6pt;margin-top:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Through the acquisition of Aquadrill in April 2023, we added four drillships, one semi-submersible, and three tender-assist units to our fleet. Refer to Note 31 – "Business combinations" for further detail. The three tender-assist units were sold on July 28, 2023.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:115%">Emergence from Chapter 11 proceedings</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">On February 22, 2022, Seadrill Limited and certain of its subsidiaries which filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court ("</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%">Debtors</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">"),</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">completed its comprehensive restructuring and emerged from Chapter 11 proceedings. Please refer to Note 4 – "Chapter 11"</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:700;line-height:115%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%"> for further details.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-style:italic;font-weight:700;line-height:115%">Fresh start accounting</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Seadrill qualified for fresh start accounting following its emergence from bankruptcy on the Effective Date, in accordance with the provisions set forth in ASC 852. This resulted in a new entity, the Successor, for financial reporting purposes, with no beginning retained earnings or loss as of the Effective Date. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Under fresh start accounting, Seadrill allocated the court approved reorganization value to its individual assets based on their estimated fair values on the Effective Date. Reorganization value represents the value of the reconstituted entity before considering liabilities and it approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-weight:400;line-height:115%">Seadrill will continue to present financial information for any periods before the adoption of fresh start accounting for the Predecessor. The Predecessor and Successor Companies lack comparability, as required by ASC Topic 205, Presentation of Financial Statements. Therefore, "black-line" financial statements are presented to distinguish between the Predecessor and Successor Companies.</span></div>Refer to Note 5 – "Fresh Start Accounting" for further details.
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