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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2019
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by US GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are:
• | Level 1 – Quoted prices for identical instruments in active markets;
• | Level 2 – Quoted market prices for similar instruments in active markets; quoted prices for identical instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
• | Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as those used in pricing models or discounted cash flow methodologies, for example.
The applicable level within the fair value hierarchy is the lowest level of any input that is significant to the fair value measurement. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets measured at fair value on a recurring basis are presented below (in millions):
|  |  | Estimated fair value measurements
| Fair value |  | Quoted prices in active markets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant other unobservable inputs (Level 3)
March 31, 2019: |  |  |  |  |  |  |
Assets - cash equivalents | $ | 896.7 |  |  | $ | 896.7 |  |  | $ | — |  |  | $ | — |
Other assets (Egyptian Pounds) | 1.0 |  |  | 1.0 |  |  | — |  |  | — |
Other assets (Angolan Kwanza) | 1.9 |  |  | 1.9 |  |  | — |  |  | — |
December 31, 2018: |  |  |  |  |  |  |
Assets - cash equivalents | $ | 990.5 |  |  | $ | 990.5 |  |  | $ | — |  |  | $ | — |
Other assets (Egyptian Pounds) | 0.7 |  |  | 0.7 |  |  | — |  |  | — |
Other assets (Angolan Kwanza) | 1.7 |  |  | 1.7 |  |  | — |  |  | — |
At March 31, 2019, and December 31, 2018, the Company held Egyptian pounds in the amount of $1.0 million and $0.7 million, respectively, which are classified as Other assets on the Condensed Consolidated Balance Sheets. The Company ceased drilling operations in Egypt in 2014, and is working to obtain access to the funds for use outside Egypt to the extent they are not utilized. Given stricter foreign currency exchange controls in Angola, the Company determined in May 2017 that its previous method of converting Angola Kwanza to USD is likely no longer feasible. As a result, at March 31, 2019 and December 31, 2018, the Company classified its Angolan Kwanza USD equivalent balance of $1.9 million and $1.7 million, respectively, as non-current assets in Other assets on the Condensed Consolidated Balance Sheets. The Company considers the amounts to be recoverable and will continue to evaluate options to convert the Angolan Kwanza to USD. Trade receivables and trade payables, which are required to be measured at fair value, have carrying values that approximate their fair values due to their short maturities. Other Fair Value Measurements Financial instruments not required to be measured at fair value consist of the Company’s publicly traded debt securities. The Company’s publicly traded debt securities had a carrying value of $2.511 billion at March 31, 2019, and an estimated fair value at that date aggregating $2.039 billion, compared to a carrying and fair value of $2.511 billion and $1.881 billion, respectively, at December 31, 2018. Fair values of the Company's publicly traded debt securities were provided by a broker who makes a market in such securities and were measured using a market-approach valuation technique, which is a Level 2 fair value measurement. Concentrations of Credit Risk The Company invests its excess cash primarily in time deposits and high-quality money market accounts at several large commercial banks with strong credit ratings, and therefore believes that its risk of loss is minimal. The Company’s customers largely consist of major international oil companies, national oil companies and large investment-grade exploration and production companies. The Company routinely evaluates and monitors the credit quality of potential and current customers. The Company maintains reserves for credit losses when necessary and actual losses have been within management's expectations. Revenue and receivables from transactions with external customers that amount to 10% or more of revenue during the three months ended March 31 are set forth below: Percentage of revenue from major customers:
|  |  |  | Three months ended March 31,
Customer |  | Segment |  | 2019 |  | 2018
ARO Drilling (1) |  | Jack-ups and Unallocated and other |  | 27 | % |  | 11 | %
BP Trinidad and Tobago |  | Jack-ups |  | 12 | % |  | 5 | %
Saudi Aramco |  | Jack-ups |  | — | % |  | 35 | %
Anadarko |  | Deepwater |  | — | % |  | 24 | %
Lundin |  | Jack-ups |  | — | % |  | 10 | %
(1) Includes revenue related to services provided to ARO (see Note 4).
Percentage of receivables from major customers:
Customer |  | Segment |  | March 31, 2019 |  | December 31, 2018
ARO Drilling (1) |  | Jack-ups and Unallocated and other |  | 27 | % |  | 30 | %
BP Trinidad and Tobago |  | Jack-ups |  | 8 | % |  | 9 | %
Saudi Aramco |  | Jack-ups |  | 21 | % |  | 21 | %
Anadarko |  | Deepwater |  | — | % |  | — | %
Lundin |  | Jack-ups |  | — | % |  | — | %
(1) Includes receivables related to services provided to ARO (see Note 4).

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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