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Supplemental Financial Information

12 Months Ended

Dec. 31, 2019

Supplemental Financial Information [Abstract]

Supplemental Balance Sheet Disclosures [Text Block]

. SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Balance Sheet Information

Accounts receivable, net, as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019			2018
Trade	$	466.4		$	301.7
Other	60.3			46.4
	526.7			348.1
Allowance for doubtful accounts	(6.0		)	(3.4		)
	$	520.7		$	344.7

Other current assets as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019		2018
Materials and supplies	$	340.1	$	268.1
Prepaid taxes	36.2		35.0
Deferred costs	23.3		23.5
Prepaid expenses	13.5		15.2
Other	33.4		19.1
	$	446.5	$	360.9

Other assets as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019		2018
Right-of-use assets	$	58.1	$	—
Tax receivables	36.3		8.4
Deferred tax assets	26.6		29.4
Supplemental executive retirement plan assets	26.0		27.2
Intangible assets	11.9		2.5
Deferred costs	7.1		13.5
Other	22.3		16.8
	$	188.3	$	97.8

Accrued liabilities and other as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019		2018
Personnel costs	$	134.4	$	82.5
Accrued interest	115.2		100.6
Income and other taxes payable	61.2		36.9
Deferred revenue	30.0		56.9
Lease liabilities	21.1		—
Other	55.8		41.1
	$	417.7	$	318.0

Other liabilities as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019		2018
Unrecognized tax benefits (inclusive of interest and penalties)	$	323.1	$	177.0
Pension and other post-retirement benefits	246.7		—
Deferred tax liabilities	99.0		70.7
Intangible liabilities	52.1		53.5
Lease liabilities	51.8		—
Supplemental executive retirement plan liabilities	26.7		28.1
Personnel costs	24.5		25.1
Deferred revenue	9.7		20.5
Other	33.8		21.1
	$	867.4	$	396.0

Accumulated other comprehensive income as of December 31, 2019 and 2018 consisted of the following (in millions):



	2019			2018
Derivative instruments	$	22.6		$	12.6
Pension and other post-retirement benefits	(21.7		)	—
Currency translation adjustment	7.1			7.3
Other	(1.8		)	(1.7		)
	$	6.2		$	18.2

Consolidated Statement of Operations Information

Repair and maintenance expense related to continuing operations for each of the years in the three-year period ended December 31, 2019 was as follows (in millions):



	2019		2018		2017
Repair and maintenance expense	$	303.7	$	198.4	$	188.7

Other, net, for each of the years in the three-year period ended December 31, 2019 consisted of the following (in millions):



	2019			2018			2017
Gain on bargain purchase and measurement period adjustments	$	637.0		$	1.8		$	140.2
SHI settlement	200.0			—			—
Gain (loss) on extinguishment of debt	194.1			(19.0		)	(2.6		)
Settlement of legal dispute	(20.3		)	—			—
Currency translation adjustments	(7.4		)	(17.2		)	(5.1		)
Other	1.0			(.4		)	1.9
	$	1,004.4		$	(34.8	)	$	134.4

Consolidated Statement of Cash Flows Information

Net cash provided by (used in) operating activities of continuing operations attributable to the net change in operating assets and liabilities for each of the years in the three-year period ended December 31, 2019 was as follows (in millions):



	2019			2018			2017
(Increase) decrease in accounts receivable	$	29.5		$	(6.2	)	$	83.2
Increase in other assets	(32.0		)	(2.8		)	(14.0		)
Increase (Decrease) in liabilities	(25.4		)	2.7			3.2
	$	(27.9	)	$	(6.3	)	$	72.4

During periods in which our business contracts, resulting in significantly lower revenues and expenses as compared to the prior year, we typically generate positive cash flows from the net change in operating assets and liabilities as the impact from the collection of receivables that were accrued during the prior period is generally larger than the impact from the payment of expenses incurred in the prior period. During 2019, we experienced moderate improvements in fleet utilization coupled with the Rowan Transaction that resulted in negative cash flows from changes in operating assets and liabilities. During 2018, our business contracted at a more moderate pace, resulting in modest negative cash flows from the net change in operating assets and liabilities. During 2017, our business contracted significantly as compared to the respective prior year periods resulting in positive cash generated from the net change in operating assets and liabilities.

Cash paid for interest and income taxes for each of the years in the three-year period ended December 31, 2019 was as follows (in millions):



	2019		2018		2017
Interest, net of amounts capitalized	$	410.0	$	232.6	$	199.8
Income taxes	107.6		58.4		62.8

Capitalized interest totaled $20.9 million, $62.6 million and $72.5 million during the years ended December 31, 2019, 2018 and 2017, respectively. Capital expenditure accruals totaling $16.3 million, $27.8 million and $243.3 million for the years ended December 31, 2019, 2018 and 2017, respectively, were excluded from investing activities in our consolidated statements of cash flows.

Amortization, net, includes amortization of deferred mobilization revenues and costs, deferred capital upgrade revenues, intangible amortization and other amortization.

Other includes amortization of debt discounts and premiums, deferred financing costs, deferred charges for income taxes incurred on intercompany transfers of drilling rigs and other items.

Concentration of Risk

We are exposed to credit risk relating to our receivables from customers, our cash and cash equivalents, investments and our use of derivatives in connection with the management of foreign currency exchange rate risk. We mitigate our credit risk relating to receivables from customers, which consist primarily of major international, government-owned and independent oil and gas companies, by performing ongoing credit evaluations. We also maintain reserves for potential credit losses, which generally have been within our expectations. We mitigate our credit risk relating to cash and investments by focusing on diversification and quality of instruments. Short-term investments consist of a portfolio of time deposits held with several well-capitalized financial institutions, and we monitor the financial condition of those financial institutions.

We mitigate our credit risk relating to counterparties of our derivatives through a variety of techniques, including transacting with multiple, high-quality financial institutions, thereby limiting our exposure to individual counterparties and by entering into ISDA Master Agreements, which include provisions for a legally enforceable master netting agreement, with our derivative counterparties. See "Note 8 - Derivative Instruments" for additional information on our derivative activity.

The terms of the ISDA agreements may also include credit support requirements, cross default provisions, termination events or set-off provisions. Legally enforceable master netting agreements reduce credit risk by providing protection in bankruptcy in certain circumstances and generally permitting the closeout and netting of transactions with the same counterparty upon the occurrence of certain events.

Consolidated revenues by customer for the years ended December 31, 2019, 2018 and 2017 were as follows:



	2019		2018		2017
Total⁽¹⁾	16	%	15	%	22	%
BP ⁽²⁾	9	%	7	%	15	%
Saudi Aramco⁽³⁾	7	%	11	%	9	%
Petrobras⁽⁴⁾	4	%	8	%	11	%
Other	64	%	59	%	43	%
	100	%	100	%	100	%


⁽¹⁾	For the years ended December 31, 2019, 93% of revenues provided by Total were attributable to the Floaters segment and the remainder was attributable to the Jackup segment. During the years 2018 and 2017, all Total revenues were attributable to the Floater segment.


⁽²⁾	For the year ended December 31, 2019, 16%, 43% and 41% of BP revenues were attributable to our Floater, Other and Jackup segments, respectively.

For the year ended December 31, 2018, 27%, 53% and 20% of BP revenues were attributable to our Floater, Other and Jackup segments, respectively.

For the year ended December 31, 2017, 78% of BP revenues were attributable to our Floater segment and the remaining revenues were attributable to our Other segment.


⁽³⁾	For the years ended December 31, 2019, 2018 and 2017, all Saudi Aramco revenues were attributable to the Jackup segment.


⁽⁴⁾	For the years ended December 31, 2019, 2018 and 2017, all Petrobras revenues were attributable to the Floater segment.

For purposes of our geographic disclosure, we attribute revenues to the geographic location where such revenues are earned. Consolidated revenues by region, including the United Kingdom, our country of domicile, for the years ended December 31, 2019, 2018 and 2017 were as follows (in millions):



	2019		2018		2017
Saudi Arabia⁽¹⁾	$	313.4	$	182.2	$	171.8
U.S. Gulf of Mexico⁽²⁾	301.0		214.7		149.8
Angola⁽³⁾	284.0		285.7		445.7
United Kingdom⁽⁴⁾	213.1		192.6		164.6
Australia⁽⁵⁾	204.2		283.9		206.7
Brazil⁽⁶⁾	117.8		139.6		196.2
Egypt⁽⁷⁾	40.4		31.2		214.8
Other	579.3		375.5		293.4
	$	2,053.2	$	1,705.4	$	1,843.0


⁽¹⁾	For the years ended December 31, 2019, 65% and 35% of revenues were attributable to our Jackup and Other segments, respectively. For the years ended December 31, 2018 and 2017, all revenues earned were attributable to our Jackup segment.


⁽²⁾	For the years ended December 31, 2019, 2018 and 2017, 46%, 30% and 29% of revenues earned in the U.S. Gulf of Mexico, respectively, were attributable to our Floaters segment, 28%, 42% and 31% of revenues were attributable to our Jackup segment, respectively, and the remaining revenues were attributable to our Other segment, respectively.


⁽³⁾	For the years ended December 31, 2019, 2018 and 2017, 87%, 86% and 88% of revenues earned in Angola, respectively, were attributable to our Floaters segment with the remaining revenues attributable to our Jackup segment.


⁽⁴⁾	For the years ended December 31, 2019, 2018 and 2017, all revenues earned in the United Kingdom were attributable to our Jackup segment.


⁽⁵⁾	For the years ended December 31, 2019, 2018 and 2017, 90%, 92% and 87% of revenues earned in Australia, respectively, were attributable to our Floaters segment with the remaining revenues attributable to our Jackup segment.


⁽⁶⁾	For the years ended December 31, 2019, 2018 and 2017, all revenues earned in Brazil were attributable to our Floaters segment.

⁽⁷⁾

For the years ended December 31, 2019, 2018 and 2017, all revenues earned in Egypt were attributable to our Floaters segment.