x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
England and Wales (Registered Number 08354954) | 98-0619597 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
Cayman Islands | 98-0366361 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) |
Noble Corporation plc: | Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Noble Corporation: | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer þ | Smaller reporting company ¨ |
Page | ||||
PART I | ||||
Item 1 | ||||
Noble Corporation plc (Noble-UK) Financial Statements: | ||||
Noble Corporation (Noble-Cayman) Financial Statements: | ||||
Item 2 | ||||
Item 3 | ||||
Item 4 | ||||
PART II | ||||
Item 1 | ||||
Item 2 | ||||
Item 6 | ||||
September 30, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 426,052 | $ | 512,245 | ||||
Accounts receivable | 319,567 | 498,931 | ||||||
Taxes receivable | 35,387 | 55,525 | ||||||
Prepaid expenses and other current assets | 102,778 | 173,917 | ||||||
Total current assets | 883,784 | 1,240,618 | ||||||
Property and equipment, at cost | 14,604,796 | 14,056,323 | ||||||
Accumulated depreciation | (3,013,008 | ) | (2,572,700 | ) | ||||
Property and equipment, net | 11,591,788 | 11,483,623 | ||||||
Other assets | 108,566 | 141,404 | ||||||
Total assets | $ | 12,584,138 | $ | 12,865,645 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt | $ | 299,762 | $ | 299,924 | ||||
Accounts payable | 114,392 | 223,221 | ||||||
Accrued payroll and related costs | 53,377 | 81,464 | ||||||
Taxes payable | 98,019 | 87,940 | ||||||
Interest payable | 46,040 | 72,961 | ||||||
Other current liabilities | 72,528 | 98,074 | ||||||
Total current liabilities | 684,118 | 863,584 | ||||||
Long-term debt | 3,830,224 | 4,162,638 | ||||||
Deferred income taxes | 11,487 | 92,797 | ||||||
Other liabilities | 300,326 | 324,396 | ||||||
Total liabilities | 4,826,155 | 5,443,415 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity | ||||||||
Shares; 243,233 and 241,977 shares outstanding | 2,432 | 2,420 | ||||||
Additional paid-in capital | 646,601 | 628,483 | ||||||
Retained earnings | 6,457,071 | 6,131,501 | ||||||
Accumulated other comprehensive loss | (61,169 | ) | (63,175 | ) | ||||
Total shareholders' equity | 7,044,935 | 6,699,229 | ||||||
Noncontrolling interests | 713,048 | 723,001 | ||||||
Total equity | 7,757,983 | 7,422,230 | ||||||
Total liabilities and equity | $ | 12,584,138 | $ | 12,865,645 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating revenues | ||||||||||||||||
Contract drilling services | $ | 373,257 | $ | 873,813 | $ | 1,841,321 | $ | 2,424,481 | ||||||||
Reimbursables | 11,733 | 22,858 | 50,272 | 70,087 | ||||||||||||
Other | 163 | — | 316 | — | ||||||||||||
385,153 | 896,671 | 1,891,909 | 2,494,568 | |||||||||||||
Operating costs and expenses | ||||||||||||||||
Contract drilling services | 207,204 | 293,067 | 702,628 | 934,024 | ||||||||||||
Reimbursables | 9,142 | 17,783 | 39,446 | 55,592 | ||||||||||||
Depreciation and amortization | 155,242 | 160,652 | 455,907 | 473,913 | ||||||||||||
General and administrative | 15,773 | 15,196 | 54,346 | 61,558 | ||||||||||||
Loss on impairment | — | — | 16,616 | — | ||||||||||||
387,361 | 486,698 | 1,268,943 | 1,525,087 | |||||||||||||
Operating income (loss) | (2,208 | ) | 409,973 | 622,966 | 969,481 | |||||||||||
Other income (expense) | ||||||||||||||||
Interest expense, net of amount capitalized | (52,569 | ) | (54,687 | ) | (166,975 | ) | (161,196 | ) | ||||||||
Gain on extinguishment of debt, net | — | — | 11,066 | — | ||||||||||||
Interest income and other, net | 540 | 30,934 | (1,443 | ) | 37,085 | |||||||||||
Income (loss) before income taxes | (54,237 | ) | 386,220 | 465,614 | 845,370 | |||||||||||
Income tax benefit (provision) | 10,002 | (41,789 | ) | (40,317 | ) | (124,641 | ) | |||||||||
Net income (loss) | (44,235 | ) | 344,431 | 425,297 | 720,729 | |||||||||||
Net income attributable to noncontrolling interests | (10,846 | ) | (18,624 | ) | (52,027 | ) | (57,488 | ) | ||||||||
Net income (loss) attributable to Noble Corporation plc | $ | (55,081 | ) | $ | 325,807 | $ | 373,270 | $ | 663,241 | |||||||
Per share data: | ||||||||||||||||
Basic: | $ | (0.23 | ) | $ | 1.32 | $ | 1.48 | $ | 2.68 | |||||||
Diluted: | $ | (0.23 | ) | $ | 1.32 | $ | 1.48 | $ | 2.68 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | (44,235 | ) | $ | 344,431 | $ | 425,297 | $ | 720,729 | |||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||
Foreign currency translation adjustments | (543 | ) | (2,694 | ) | 263 | (4,568 | ) | |||||||||
Foreign currency forward contracts | 463 | (1,271 | ) | (605 | ) | (1,362 | ) | |||||||||
Amortization of deferred pension plan amounts (net of tax provision of $408 and $575 for the three months ended September 30, 2016 and 2015, respectively, and $1,227 and $1,723 for the nine months ended September 30, 2016 and 2015, respectively) | 781 | 1,106 | 2,348 | 3,316 | ||||||||||||
Other comprehensive income (loss), net | 701 | (2,859 | ) | 2,006 | (2,614 | ) | ||||||||||
Net comprehensive income attributable to noncontrolling interests | (10,846 | ) | (18,624 | ) | (52,027 | ) | (57,488 | ) | ||||||||
Comprehensive income (loss) attributable to Noble Corporation plc | $ | (54,380 | ) | $ | 322,948 | $ | 375,276 | $ | 660,627 |
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 425,297 | $ | 720,729 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation and amortization | 455,907 | 473,913 | ||||||
Loss on impairment | 16,616 | — | ||||||
Gain on extinguishment of debt, net | (11,066 | ) | — | |||||
Deferred income taxes | (82,774 | ) | (76,012 | ) | ||||
Amortization of share-based compensation | 27,222 | 30,296 | ||||||
Net change in other assets and liabilities | 131,473 | 103,299 | ||||||
Net cash from operating activities | 962,675 | 1,252,225 | ||||||
Cash flows from investing activities | ||||||||
Capital expenditures | (592,038 | ) | (280,048 | ) | ||||
Change in accrued capital expenditures | (41,235 | ) | (43,440 | ) | ||||
Proceeds from disposal of assets | 23,390 | 2,535 | ||||||
Net cash from investing activities | (609,883 | ) | (320,953 | ) | ||||
Cash flows from financing activities | ||||||||
Net change in borrowings outstanding on bank credit facilities | — | (1,123,495 | ) | |||||
Issuance of senior notes | — | 1,092,728 | ||||||
Debt issuance costs on senior notes and credit facilities | — | (16,070 | ) | |||||
Repayment of long-term debt | (300,000 | ) | (350,000 | ) | ||||
Early repayment of long-term debt | (22,207 | ) | — | |||||
Premiums paid on early repayment of long-term debt | (1,781 | ) | — | |||||
Dividend payments | (47,534 | ) | (278,443 | ) | ||||
Dividends paid to noncontrolling interests | (61,980 | ) | (57,048 | ) | ||||
Repurchases of shares | — | (100,630 | ) | |||||
Employee stock transactions | (5,483 | ) | (2,394 | ) | ||||
Net cash from financing activities | (438,985 | ) | (835,352 | ) | ||||
Net change in cash and cash equivalents | (86,193 | ) | 95,920 | |||||
Cash and cash equivalents, beginning of period | 512,245 | 68,510 | ||||||
Cash and cash equivalents, end of period | $ | 426,052 | $ | 164,430 |
Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
Balance | Par Value | ||||||||||||||||||||||||||
Balance at December 31, 2014 | 247,501 | $ | 2,475 | $ | 695,638 | $ | 5,936,035 | $ | (69,418 | ) | $ | 722,304 | $ | 7,287,034 | |||||||||||||
Employee related equity activity | |||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | 30,296 | — | — | — | 30,296 | ||||||||||||||||||||
Issuance of share-based compensation shares | 678 | 7 | (4,157 | ) | — | — | — | (4,150 | ) | ||||||||||||||||||
Tax benefit of equity transactions | — | — | (2,401 | ) | — | — | — | (2,401 | ) | ||||||||||||||||||
Repurchases of shares | (6,209 | ) | (62 | ) | (100,568 | ) | — | — | — | (100,630 | ) | ||||||||||||||||
Net income | — | — | — | 663,241 | — | 57,488 | 720,729 | ||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (57,048 | ) | (57,048 | ) | ||||||||||||||||||
Dividends | — | — | — | (278,443 | ) | — | — | (278,443 | ) | ||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | (2,614 | ) | — | (2,614 | ) | ||||||||||||||||||
Balance at September 30, 2015 | 241,970 | $ | 2,420 | $ | 618,808 | $ | 6,320,833 | $ | (72,032 | ) | $ | 722,744 | $ | 7,592,773 | |||||||||||||
Balance at December 31, 2015 | 241,977 | $ | 2,420 | $ | 628,483 | $ | 6,131,501 | $ | (63,175 | ) | $ | 723,001 | $ | 7,422,230 | |||||||||||||
Employee related equity activity | |||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | 27,222 | — | — | — | 27,222 | ||||||||||||||||||||
Issuance of share-based compensation shares | 1,256 | 12 | (3,609 | ) | — | — | — | (3,597 | ) | ||||||||||||||||||
Tax benefit of equity transactions | — | — | (5,495 | ) | — | — | — | (5,495 | ) | ||||||||||||||||||
Net income | — | — | — | 373,270 | — | 52,027 | 425,297 | ||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (61,980 | ) | (61,980 | ) | ||||||||||||||||||
Dividends | — | — | — | (47,700 | ) | — | — | (47,700 | ) | ||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 2,006 | — | 2,006 | ||||||||||||||||||||
Balance at September 30, 2016 | 243,233 | $ | 2,432 | $ | 646,601 | $ | 6,457,071 | $ | (61,169 | ) | $ | 713,048 | $ | 7,757,983 |
September 30, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 425,749 | $ | 511,795 | ||||
Accounts receivable | 319,567 | 498,931 | ||||||
Taxes receivable | 35,387 | 55,442 | ||||||
Prepaid expenses and other current assets | 98,995 | 168,469 | ||||||
Total current assets | 879,698 | 1,234,637 | ||||||
Property and equipment, at cost | 14,604,796 | 14,054,558 | ||||||
Accumulated depreciation | (3,013,008 | ) | (2,572,331 | ) | ||||
Property and equipment, net | 11,591,788 | 11,482,227 | ||||||
Other assets | 101,564 | 132,319 | ||||||
Total assets | $ | 12,573,050 | $ | 12,849,183 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Current maturities of long-term debt | $ | 299,762 | $ | 299,924 | ||||
Accounts payable | 114,117 | 221,077 | ||||||
Accrued payroll and related costs | 53,337 | 81,364 | ||||||
Taxes payable | 98,019 | 88,108 | ||||||
Interest payable | 46,040 | 72,961 | ||||||
Other current liabilities | 71,859 | 96,331 | ||||||
Total current liabilities | 683,134 | 859,765 | ||||||
Long-term debt | 3,830,224 | 4,162,638 | ||||||
Deferred income taxes | 11,487 | 92,797 | ||||||
Other liabilities | 295,443 | 319,512 | ||||||
Total liabilities | 4,820,288 | 5,434,712 | ||||||
Commitments and contingencies | ||||||||
Shareholder equity | ||||||||
Ordinary shares; 261,246 shares outstanding | 26,125 | 26,125 | ||||||
Capital in excess of par value | 586,605 | 561,309 | ||||||
Retained earnings | 6,488,153 | 6,167,211 | ||||||
Accumulated other comprehensive loss | (61,169 | ) | (63,175 | ) | ||||
Total shareholder equity | 7,039,714 | 6,691,470 | ||||||
Noncontrolling interests | 713,048 | 723,001 | ||||||
Total equity | 7,752,762 | 7,414,471 | ||||||
Total liabilities and equity | $ | 12,573,050 | $ | 12,849,183 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating revenues | ||||||||||||||||
Contract drilling services | $ | 373,257 | $ | 873,813 | $ | 1,841,321 | $ | 2,424,481 | ||||||||
Reimbursables | 11,733 | 22,858 | 50,272 | 70,087 | ||||||||||||
Other | 163 | — | 1,016 | — | ||||||||||||
385,153 | 896,671 | 1,892,609 | 2,494,568 | |||||||||||||
Operating costs and expenses | ||||||||||||||||
Contract drilling services | 206,072 | 292,479 | 697,596 | 930,925 | ||||||||||||
Reimbursables | 9,142 | 17,783 | 39,446 | 55,592 | ||||||||||||
Depreciation and amortization | 155,242 | 160,383 | 455,853 | 473,046 | ||||||||||||
General and administrative | 12,033 | 10,376 | 36,491 | 36,093 | ||||||||||||
Loss on impairment | — | — | 16,616 | — | ||||||||||||
382,489 | 481,021 | 1,246,002 | 1,495,656 | |||||||||||||
Operating income | 2,664 | 415,650 | 646,607 | 998,912 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense, net of amount capitalized | (52,569 | ) | (54,687 | ) | (166,975 | ) | (161,196 | ) | ||||||||
Gain on extinguishment of debt, net | — | — | 11,066 | — | ||||||||||||
Interest income and other, net | 568 | 31,066 | (1,368 | ) | 35,613 | |||||||||||
Income (loss) before income taxes | (49,337 | ) | 392,029 | 489,330 | 873,329 | |||||||||||
Income tax benefit (provision) | 9,307 | (41,868 | ) | (40,310 | ) | (124,962 | ) | |||||||||
Net income (loss) | (40,030 | ) | 350,161 | 449,020 | 748,367 | |||||||||||
Net income attributable to noncontrolling interests | (10,846 | ) | (18,624 | ) | (52,027 | ) | (57,488 | ) | ||||||||
Net income (loss) attributable to Noble Corporation | $ | (50,876 | ) | $ | 331,537 | $ | 396,993 | $ | 690,879 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | (40,030 | ) | $ | 350,161 | $ | 449,020 | $ | 748,367 | |||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||
Foreign currency translation adjustments | (543 | ) | (2,694 | ) | 263 | (4,568 | ) | |||||||||
Foreign currency forward contracts | 463 | (1,271 | ) | (605 | ) | (1,362 | ) | |||||||||
Amortization of deferred pension plan amounts (net of tax provision of $408 and $575 for the three months ended September 30, 2016 and 2015, respectively, and $1,227 and $1,723 for the nine months ended September 30, 2016 and 2015, respectively) | 781 | 1,106 | 2,348 | 3,316 | ||||||||||||
Other comprehensive income (loss), net | 701 | (2,859 | ) | 2,006 | (2,614 | ) | ||||||||||
Net comprehensive income attributable to noncontrolling interests | (10,846 | ) | (18,624 | ) | (52,027 | ) | (57,488 | ) | ||||||||
Comprehensive income (loss) attributable to Noble Corporation | $ | (50,175 | ) | $ | 328,678 | $ | 398,999 | $ | 688,265 |
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 449,020 | $ | 748,367 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation and amortization | 455,853 | 473,046 | ||||||
Loss on impairment | 16,616 | — | ||||||
Gain on extinguishment of debt, net | (11,066 | ) | — | |||||
Deferred income taxes | (82,774 | ) | (76,012 | ) | ||||
Capital contribution by parent - share-based compensation | 25,296 | 21,875 | ||||||
Net change in other assets and liabilities | 132,911 | 78,821 | ||||||
Net cash from operating activities | 985,856 | 1,246,097 | ||||||
Cash flows from investing activities | ||||||||
Capital expenditures | (592,038 | ) | (280,048 | ) | ||||
Change in accrued capital expenditures | (41,235 | ) | (43,440 | ) | ||||
Proceeds from disposal of assets | 23,390 | 2,535 | ||||||
Net cash from investing activities | (609,883 | ) | (320,953 | ) | ||||
Cash flows from financing activities | ||||||||
Net change in borrowings outstanding on bank credit facilities | — | (1,123,495 | ) | |||||
Issuance of senior notes | — | 1,092,728 | ||||||
Debt issuance costs on senior notes and credit facilities | — | (16,070 | ) | |||||
Repayment of long-term debt | (300,000 | ) | (350,000 | ) | ||||
Premiums paid on early repayment of long-term debt | (1,781 | ) | — | |||||
Early repayment of long-term debt | (22,207 | ) | — | |||||
Dividends paid to noncontrolling interests | (61,980 | ) | (57,048 | ) | ||||
Distributions to parent company, net | (76,051 | ) | (372,799 | ) | ||||
Net cash from financing activities | (462,019 | ) | (826,684 | ) | ||||
Net change in cash and cash equivalents | (86,046 | ) | 98,460 | |||||
Cash and cash equivalents, beginning of period | 511,795 | 65,780 | ||||||
Cash and cash equivalents, end of period | $ | 425,749 | $ | 164,240 |
Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
Balance | Par Value | ||||||||||||||||||||||||||
Balance at December 31, 2014 | 261,246 | $ | 26,125 | $ | 530,657 | $ | 6,009,114 | $ | (69,418 | ) | $ | 722,304 | $ | 7,218,782 | |||||||||||||
Distributions to parent company, net | — | — | — | (372,799 | ) | — | — | (372,799 | ) | ||||||||||||||||||
Capital contribution by parent - share-based compensation | — | — | 21,875 | — | — | — | 21,875 | ||||||||||||||||||||
Net income | — | — | — | 690,879 | — | 57,488 | 748,367 | ||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (57,048 | ) | (57,048 | ) | ||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | (2,614 | ) | — | (2,614 | ) | ||||||||||||||||||
Balance at September 30, 2015 | 261,246 | $ | 26,125 | $ | 552,532 | $ | 6,327,194 | $ | (72,032 | ) | $ | 722,744 | $ | 7,556,563 | |||||||||||||
Balance at December 31, 2015 | 261,246 | $ | 26,125 | $ | 561,309 | $ | 6,167,211 | $ | (63,175 | ) | $ | 723,001 | $ | 7,414,471 | |||||||||||||
Distributions to parent company, net | — | — | — | (76,051 | ) | — | — | (76,051 | ) | ||||||||||||||||||
Capital contribution by parent - share-based compensation | — | — | 25,296 | — | — | — | 25,296 | ||||||||||||||||||||
Net income | — | — | — | 396,993 | — | 52,027 | 449,020 | ||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (61,980 | ) | (61,980 | ) | ||||||||||||||||||
Other comprehensive income, net | — | — | — | — | 2,006 | — | 2,006 | ||||||||||||||||||||
Balance at September 30, 2016 | 261,246 | $ | 26,125 | $ | 586,605 | $ | 6,488,153 | $ | (61,169 | ) | $ | 713,048 | $ | 7,752,762 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Numerator: | ||||||||||||||||
Basic | ||||||||||||||||
Net income (loss) attributable to Noble-UK | $ | (55,081 | ) | $ | 325,807 | $ | 373,270 | $ | 663,241 | |||||||
Earnings allocated to unvested share-based payment awards | — | (7,143 | ) | (13,415 | ) | (14,661 | ) | |||||||||
Net income (loss) to common shareholders - basic | $ | (55,081 | ) | $ | 318,664 | $ | 359,855 | $ | 648,580 | |||||||
Diluted | ||||||||||||||||
Net income (loss) attributable to Noble-UK | $ | (55,081 | ) | $ | 325,807 | $ | 373,270 | $ | 663,241 | |||||||
Earnings allocated to unvested share-based payment awards | — | (7,143 | ) | (13,415 | ) | (14,661 | ) | |||||||||
Net income (loss) to common shareholders - diluted | $ | (55,081 | ) | $ | 318,664 | $ | 359,855 | $ | 648,580 | |||||||
Denominator: | ||||||||||||||||
Weighted average shares outstanding - basic | 243,224 | 241,970 | 243,089 | 242,204 | ||||||||||||
Incremental shares issuable from assumed exercise of stock options | — | — | — | — | ||||||||||||
Weighted average shares outstanding - diluted | 243,224 | 241,970 | 243,089 | 242,204 | ||||||||||||
Weighted average unvested share-based payment awards | — | 5,424 | 9,062 | 5,475 | ||||||||||||
Earnings (loss) per share | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | 1.32 | $ | 1.48 | $ | 2.68 | |||||||
Diluted | $ | (0.23 | ) | $ | 1.32 | $ | 1.48 | $ | 2.68 | |||||||
Dividends per share | $ | 0.020 | $ | 0.375 | $ | 0.190 | $ | 1.125 |
September 30, 2016 | December 31, 2015 | |||||||
Drilling equipment and facilities | $ | 13,536,979 | $ | 13,074,804 | ||||
Construction in progress | 864,140 | 761,347 | ||||||
Other | 203,677 | 220,172 | ||||||
Property and equipment, at cost | $ | 14,604,796 | $ | 14,056,323 |
September 30, 2016 | December 31, 2015 | |||||||
Current | ||||||||
Current maturities of long-term debt | $ | 299,983 | $ | 299,997 | ||||
Less: Unamortized debt issuance costs | (221 | ) | (73 | ) | ||||
Current maturities of long-term debt, net of debt issuance costs | $ | 299,762 | $ | 299,924 | ||||
Long-term | ||||||||
3.05% Senior Notes due March 2016 | $ | — | $ | 299,997 | ||||
2.50% Senior Notes due March 2017 | 299,983 | 299,956 | ||||||
5.25% Senior Notes due March 2018 (1) | 249,725 | 249,602 | ||||||
7.50% Senior Notes due March 2019 | 201,695 | 201,695 | ||||||
4.90% Senior Notes due August 2020 | 467,195 | 499,287 | ||||||
4.625% Senior Notes due March 2021 | 396,337 | 399,680 | ||||||
3.95% Senior Notes due March 2022 | 399,424 | 399,354 | ||||||
6.95% Senior Notes due April 2025 (1) | 448,886 | 448,814 | ||||||
6.20% Senior Notes due August 2040 | 399,898 | 399,896 | ||||||
6.05% Senior Notes due March 2041 | 397,748 | 397,719 | ||||||
5.25% Senior Notes due March 2042 | 498,361 | 498,338 | ||||||
7.95% Senior Notes due April 2045 (1) | 394,601 | 394,563 | ||||||
Total senior unsecured notes | 4,153,853 | 4,488,901 | ||||||
Credit facility & commercial paper program | — | — | ||||||
Total debt | 4,153,853 | 4,488,901 | ||||||
Less: Unamortized debt issuance costs | (23,646 | ) | (26,266 | ) | ||||
Less: Current maturities of long-term debt | (299,983 | ) | (299,997 | ) | ||||
Long-term debt, net of debt issuance costs | $ | 3,830,224 | $ | 4,162,638 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||
Senior unsecured notes: | ||||||||||||||||
3.05% Senior Notes due March 2016 | $ | — | $ | — | $ | 299,997 | $ | 299,340 | ||||||||
2.50% Senior Notes due March 2017 | 299,983 | 296,357 | 299,956 | 284,334 | ||||||||||||
5.25% Senior Notes due March 2018 (1) | 249,725 | 246,641 | 249,602 | 227,285 | ||||||||||||
7.50% Senior Notes due March 2019 | 201,695 | 201,947 | 201,695 | 194,273 | ||||||||||||
4.90% Senior Notes due August 2020 | 467,195 | 399,846 | 499,287 | 378,761 | ||||||||||||
4.625% Senior Notes due March 2021 | 396,337 | 319,611 | 399,680 | 289,450 | ||||||||||||
3.95% Senior Notes due March 2022 | 399,424 | 294,700 | 399,354 | 265,643 | ||||||||||||
6.95% Senior Notes due April 2025 (1) | 448,886 | 355,500 | 448,814 | 308,870 | ||||||||||||
6.20% Senior Notes due August 2040 | 399,898 | 235,000 | 399,896 | 237,005 | ||||||||||||
6.05% Senior Notes due March 2041 | 397,748 | 234,475 | 397,719 | 239,464 | ||||||||||||
5.25% Senior Notes due March 2042 | 498,361 | 286,250 | 498,338 | 279,919 | ||||||||||||
7.95% Senior Notes due April 2045 (1) | 394,601 | 278,871 | 394,563 | 255,887 | ||||||||||||
Total senior unsecured notes | 4,153,853 | 3,149,198 | 4,488,901 | 3,260,231 | ||||||||||||
Credit facility & commercial paper program | — | — | — | — | ||||||||||||
Total debt | $ | 4,153,853 | $ | 3,149,198 | $ | 4,488,901 | $ | 3,260,231 |
Three Months Ended September 30, | ||||||||||||||||
2016 | 2015 | |||||||||||||||
Non-U.S. | U.S. | Non-U.S. | U.S. | |||||||||||||
Service cost | $ | 763 | $ | 1,662 | $ | 862 | $ | 2,149 | ||||||||
Interest cost | 589 | 2,389 | 653 | 2,300 | ||||||||||||
Return on plan assets | (828 | ) | (3,097 | ) | (942 | ) | (3,286 | ) | ||||||||
Amortization of prior service cost | 25 | 30 | 26 | 36 | ||||||||||||
Recognized net actuarial loss | 35 | 1,099 | 80 | 1,539 | ||||||||||||
Net pension expense | $ | 584 | $ | 2,083 | $ | 679 | $ | 2,738 |
Nine Months Ended September 30, | ||||||||||||||||
2016 | 2015 | |||||||||||||||
Non-U.S. | U.S. | Non-U.S. | U.S. | |||||||||||||
Service cost | $ | 2,337 | $ | 4,986 | $ | 2,582 | $ | 6,447 | ||||||||
Interest cost | 1,864 | 7,167 | 1,927 | 6,899 | ||||||||||||
Return on plan assets | (2,627 | ) | (9,291 | ) | (2,779 | ) | (9,859 | ) | ||||||||
Amortization of prior service cost | 78 | 88 | 79 | 107 | ||||||||||||
Recognized net actuarial loss | 110 | 3,299 | 235 | 4,618 | ||||||||||||
Net pension expense | $ | 1,762 | $ | 6,249 | $ | 2,044 | $ | 8,212 |
Estimated fair value | ||||||||||
Balance sheet classification | September 30, 2016 | December 31, 2015 | ||||||||
Asset derivatives | ||||||||||
Cash flow hedges | ||||||||||
Short-term foreign currency forward contracts | Prepaid expenses and other current assets | $ | 329 | $ | — | |||||
Non-designated derivatives | ||||||||||
FCX Settlement | Prepaid expenses and other current assets | 12,406 | — | |||||||
Liability derivatives | ||||||||||
Cash flow hedges | ||||||||||
Short-term foreign currency forward contracts | Other current liabilities | $ | 934 | $ | — |
Gain/(loss) recognized through AOCL | Gain/(loss) reclassified from AOCL to "contract drilling services" expense | Gain/(loss) recognized through "contract drilling services" revenue | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||
Foreign currency forward contracts | $ | (65 | ) | $ | (747 | ) | $ | (540 | ) | $ | (615 | ) | $ | — | $ | — | ||||||||
Non-designated derivatives | ||||||||||||||||||||||||
FCX Settlement | $ | — | $ | — | $ | — | $ | — | $ | (5,194 | ) | $ | — |
Gain/(loss) recognized through AOCL | Gain/(loss) reclassified from AOCL to "contract drilling services" expense | Gain/(loss) recognized through "contract drilling services" revenue | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||
Foreign currency forward contracts | $ | (447 | ) | $ | (143 | ) | $ | (158 | ) | $ | (1,219 | ) | $ | — | $ | — | ||||||||
Non-designated derivatives | ||||||||||||||||||||||||
FCX Settlement | $ | — | $ | — | $ | — | $ | — | $ | 12,406 | $ | — |
September 30, 2016 | ||||||||||||||||
Estimated Fair Value Measurements | ||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets - | ||||||||||||||||
Marketable securities | $ | 6,472 | $ | 6,472 | $ | — | $ | — | ||||||||
Foreign currency forward contracts | 329 | — | 329 | — | ||||||||||||
FCX Settlement | 12,406 | — | — | 12,406 | ||||||||||||
Liabilities - | ||||||||||||||||
Foreign currency forward contracts | $ | 934 | $ | — | $ | 934 | $ | — |
December 31, 2015 | ||||||||||||||||
Estimated Fair Value Measurements | ||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets - | ||||||||||||||||
Marketable securities | $ | 6,352 | $ | 6,352 | $ | — | $ | — |
Valuation assumptions: | ||||
Expected volatility | 46.83 | % | ||
Mean-reversion rate | 2.80 | |||
Discount rate (1) | 3.0 | % | ||
Underlying spot price (2) | $ | 48.24 |
(1) | Based on the cost of debt of FCX. |
(2) | Based on the last trading price of the WTI spot contract from Bloomberg as of September 30, 2016. |
Balance as of December 31, 2015 | $ | — | ||
Fair value recognized in earnings | — | |||
Balance as of March 31, 2016 | — | |||
Fair value recognized in earnings | 17,600 | |||
Balance as of June 30, 2016 | 17,600 | |||
Change in fair value recognized in earnings | (5,194 | ) | ||
Balance as of September 30, 2016 | $ | 12,406 |
Gains / (Losses) on Cash Flow Hedges(1) | Defined Benefit Pension Items(2) | Foreign Currency Items | Total | |||||||||||||
Balance at December 31, 2014 | $ | — | $ | (58,440 | ) | $ | (10,978 | ) | $ | (69,418 | ) | |||||
Activity during period: | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | (2,581 | ) | — | (4,568 | ) | (7,149 | ) | |||||||||
Amounts reclassified from AOCL | 1,219 | 3,316 | — | 4,535 | ||||||||||||
Net other comprehensive income (loss) | (1,362 | ) | 3,316 | (4,568 | ) | (2,614 | ) | |||||||||
Balance at September 30, 2015 | $ | (1,362 | ) | $ | (55,124 | ) | $ | (15,546 | ) | $ | (72,032 | ) | ||||
Balance at December 31, 2015 | $ | — | $ | (46,919 | ) | $ | (16,256 | ) | $ | (63,175 | ) | |||||
Activity during period: | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | (447 | ) | — | 263 | (184 | ) | ||||||||||
Amounts reclassified from AOCL | (158 | ) | 2,348 | — | 2,190 | |||||||||||
Net other comprehensive income (loss) | (605 | ) | 2,348 | 263 | 2,006 | |||||||||||
Balance at September 30, 2016 | $ | (605 | ) | $ | (44,571 | ) | $ | (15,993 | ) | $ | (61,169 | ) |
(1) | Gains / (losses) on cash flow hedges are related to foreign currency forward contracts. Reclassifications from AOCL are recognized through “contract drilling services” expense on our Consolidated Statements of Operations. See Note 11 for additional information. |
(2) | Defined benefit pension items relate to actuarial changes and the amortization of prior service costs. Reclassifications from AOCL are recognized as expense on our Consolidated Statements of Operations through either “Contract drilling services” or “General and administrative.” See Note 10 for additional information. |
Noble-UK | Noble-Cayman | |||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Accounts receivable | $ | 179,364 | $ | 38,695 | $ | 179,364 | $ | 38,695 | ||||||||
Other current assets | 91,606 | 48,548 | 89,858 | 28,415 | ||||||||||||
Other assets | 27,805 | 61,610 | 25,724 | 41,314 | ||||||||||||
Accounts payable | (70,778 | ) | (20,666 | ) | (68,909 | ) | (18,743 | ) | ||||||||
Other current liabilities | (70,943 | ) | (2,733 | ) | (66,202 | ) | 11,295 | |||||||||
Other liabilities | (25,581 | ) | (22,155 | ) | (26,924 | ) | (22,155 | ) | ||||||||
$ | 131,473 | $ | 103,299 | $ | 132,911 | $ | 78,821 |
Issuer | ||||
Notes | (Co-Issuer(s)) | Guarantor | ||
$300 million 2.50% Senior Notes due 2017 | NHIL | Noble-Cayman | ||
$250 million 5.25% Senior Notes due 2018 | NHIL | Noble-Cayman | ||
$202 million 7.50% Senior Notes due 2019 | NHC | Noble-Cayman | ||
Noble Drilling Holding, LLC ("NDH") | ||||
Noble Drilling Services 6 LLC ("NDS6") | ||||
$468 million 4.90% Senior Notes due 2020 | NHIL | Noble-Cayman | ||
$397 million 4.625% Senior Notes due 2021 | NHIL | Noble-Cayman | ||
$400 million 3.95% Senior Notes due 2022 | NHIL | Noble-Cayman | ||
$450 million 6.95% Senior Notes due 2025 | NHIL | Noble-Cayman | ||
$400 million 6.20% Senior Notes due 2040 | NHIL | Noble-Cayman | ||
$400 million 6.05% Senior Notes due 2041 | NHIL | Noble-Cayman | ||
$500 million 5.25% Senior Notes due 2042 | NHIL | Noble-Cayman | ||
$400 million 7.95% Senior Notes due 2045 | NHIL | Noble-Cayman |
Noble - Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,981 | $ | — | $ | 118 | $ | 1 | $ | — | $ | 423,649 | $ | — | $ | 425,749 | ||||||||||||||||
Accounts receivable | — | — | 42,261 | — | — | 277,306 | — | 319,567 | ||||||||||||||||||||||||
Taxes receivable | — | 20,878 | 4 | — | — | 14,505 | — | 35,387 | ||||||||||||||||||||||||
Short-term notes receivable from affiliates | — | — | 124,601 | — | 1,349,708 | 171,925 | (1,646,234 | ) | — | |||||||||||||||||||||||
Accounts receivable from affiliates | 337,130 | 1,277 | 144,553 | 67,034 | 76,606 | 3,260,567 | (3,887,167 | ) | — | |||||||||||||||||||||||
Prepaid expenses and other current assets | 46 | — | 1,965 | — | — | 96,984 | — | 98,995 | ||||||||||||||||||||||||
Total current assets | 339,157 | 22,155 | 313,502 | 67,035 | 1,426,314 | 4,244,936 | (5,533,401 | ) | 879,698 | |||||||||||||||||||||||
Property and equipment, at cost | — | — | 2,358,530 | — | — | 12,246,266 | — | 14,604,796 | ||||||||||||||||||||||||
Accumulated depreciation | — | — | (410,082 | ) | — | — | (2,602,926 | ) | — | (3,013,008 | ) | |||||||||||||||||||||
Property and equipment, net | — | — | 1,948,448 | — | — | 9,643,340 | — | 11,591,788 | ||||||||||||||||||||||||
Notes receivable from affiliates | 3,304,672 | — | 112,705 | 69,563 | 5,000 | 1,995,607 | (5,487,547 | ) | — | |||||||||||||||||||||||
Investments in affiliates | 3,948,861 | 2,346,182 | 2,305,255 | 9,344,115 | 6,224,556 | — | (24,168,969 | ) | — | |||||||||||||||||||||||
Other assets | 4,708 | — | 7,127 | — | — | 89,729 | — | 101,564 | ||||||||||||||||||||||||
Total assets | $ | 7,597,398 | $ | 2,368,337 | $ | 4,687,037 | $ | 9,480,713 | $ | 7,655,870 | $ | 15,973,612 | $ | (35,189,917 | ) | $ | 12,573,050 | |||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||
Short-term notes payables from affiliates | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Current maturities of long-term debt | — | 171,925 | — | 299,762 | — | 1,474,309 | (1,646,234 | ) | 299,762 | |||||||||||||||||||||||
Accounts payable | — | — | 3,245 | — | — | 110,872 | — | 114,117 | ||||||||||||||||||||||||
Accrued payroll and related costs | — | — | 5,004 | — | — | 48,333 | — | 53,337 | ||||||||||||||||||||||||
Accounts payable to affiliates | 537,755 | 104,854 | 2,354,295 | 274,177 | — | 616,086 | (3,887,167 | ) | — | |||||||||||||||||||||||
Taxes payable | — | — | — | — | — | 98,019 | — | 98,019 | ||||||||||||||||||||||||
Interest payable | — | — | — | 45,410 | 630 | — | — | 46,040 | ||||||||||||||||||||||||
Other current liabilities | — | — | 4,311 | — | — | 67,548 | — | 71,859 | ||||||||||||||||||||||||
Total current liabilities | 537,755 | 276,779 | 2,366,855 | 619,349 | 630 | 2,415,167 | (5,533,401 | ) | 683,134 | |||||||||||||||||||||||
Long-term debt | — | — | — | 3,628,832 | 201,392 | — | — | 3,830,224 | ||||||||||||||||||||||||
Notes payable to affiliates | — | 900,000 | 464,132 | 744,181 | — | 3,379,234 | (5,487,547 | ) | — | |||||||||||||||||||||||
Deferred income taxes | — | — | 840 | — | — | 10,647 | — | 11,487 | ||||||||||||||||||||||||
Other liabilities | 19,929 | — | 25,097 | — | — | 250,417 | — | 295,443 | ||||||||||||||||||||||||
Total liabilities | 557,684 | 1,176,779 | 2,856,924 | 4,992,362 | 202,022 | 6,055,465 | (11,020,948 | ) | 4,820,288 | |||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||||||
Total shareholder equity | 7,039,714 | 1,191,558 | 1,830,113 | 4,488,351 | 7,453,848 | 8,749,887 | (23,713,757 | ) | 7,039,714 | |||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | 1,168,260 | (455,212 | ) | 713,048 | |||||||||||||||||||||||
Total equity | 7,039,714 | 1,191,558 | 1,830,113 | 4,488,351 | 7,453,848 | 9,918,147 | (24,168,969 | ) | 7,752,762 | |||||||||||||||||||||||
Total liabilities and equity | $ | 7,597,398 | $ | 2,368,337 | $ | 4,687,037 | $ | 9,480,713 | $ | 7,655,870 | $ | 15,973,612 | $ | (35,189,917 | ) | $ | 12,573,050 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,627 | $ | — | $ | 2,101 | $ | — | $ | — | $ | 508,067 | $ | — | $ | 511,795 | ||||||||||||||||
Accounts receivable | — | — | 9,381 | — | — | 489,550 | — | 498,931 | ||||||||||||||||||||||||
Taxes receivable | — | 12,124 | 27 | — | — | 43,291 | — | 55,442 | ||||||||||||||||||||||||
Short-term notes receivable from affiliates | — | — | 119,476 | — | — | 171,925 | (291,401 | ) | — | |||||||||||||||||||||||
Accounts receivable from affiliates | 626,305 | 451,201 | 128,457 | 811,785 | 67,684 | 3,445,590 | (5,531,022 | ) | — | |||||||||||||||||||||||
Prepaid expenses and other current assets | 246 | — | 1,696 | — | — | 166,527 | — | 168,469 | ||||||||||||||||||||||||
Total current assets | 628,178 | 463,325 | 261,138 | 811,785 | 67,684 | 4,824,950 | (5,822,423 | ) | 1,234,637 | |||||||||||||||||||||||
Property and equipment, at cost | — | — | 1,877,520 | — | — | 12,177,038 | — | 14,054,558 | ||||||||||||||||||||||||
Accumulated depreciation | — | — | (344,591 | ) | — | — | (2,227,740 | ) | — | (2,572,331 | ) | |||||||||||||||||||||
Property and equipment, net | — | — | 1,532,929 | — | — | 9,949,298 | — | 11,482,227 | ||||||||||||||||||||||||
Notes receivable from affiliates | 3,304,652 | — | 236,921 | 1,587,927 | 5,000 | 2,435,154 | (7,569,654 | ) | — | |||||||||||||||||||||||
Investments in affiliates | 5,159,064 | 2,174,480 | 3,001,327 | 9,752,912 | 7,438,397 | — | (27,526,180 | ) | — | |||||||||||||||||||||||
Other assets | 5,954 | — | 7,496 | — | — | 118,869 | — | 132,319 | ||||||||||||||||||||||||
Total assets | $ | 9,097,848 | $ | 2,637,805 | $ | 5,039,811 | $ | 12,152,624 | $ | 7,511,081 | $ | 17,328,271 | $ | (40,918,257 | ) | $ | 12,849,183 | |||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||
Short-term notes payables from affiliates | $ | — | $ | 171,925 | $ | — | $ | — | $ | — | $ | 119,476 | $ | (291,401 | ) | $ | — | |||||||||||||||
Current maturities of long-term debt | — | — | — | 299,924 | — | — | — | 299,924 | ||||||||||||||||||||||||
Accounts payable | — | — | 10,676 | — | — | 210,401 | — | 221,077 | ||||||||||||||||||||||||
Accrued payroll and related costs | — | — | 6,584 | — | — | 74,780 | — | 81,364 | ||||||||||||||||||||||||
Accounts payable to affiliates | 868,046 | 60,100 | 2,440,965 | 96,543 | 6,426 | 2,058,942 | (5,531,022 | ) | — | |||||||||||||||||||||||
Taxes payable | — | 917 | — | — | — | 87,191 | — | 88,108 | ||||||||||||||||||||||||
Interest payable | — | — | — | 68,549 | 4,412 | — | — | 72,961 | ||||||||||||||||||||||||
Other current liabilities | 40 | — | 4,108 | — | — | 92,183 | — | 96,331 | ||||||||||||||||||||||||
Total current liabilities | 868,086 | 232,942 | 2,462,333 | 465,016 | 10,838 | 2,642,973 | (5,822,423 | ) | 859,765 | |||||||||||||||||||||||
Long-term debt | — | — | — | 3,961,338 | 201,300 | — | — | 4,162,638 | ||||||||||||||||||||||||
Notes payable to affiliates | 1,518,363 | — | 461,379 | 2,086,480 | 124,216 | 3,379,216 | (7,569,654 | ) | — | |||||||||||||||||||||||
Deferred income taxes | — | — | 1,529 | — | — | 91,268 | — | 92,797 | ||||||||||||||||||||||||
Other liabilities | 19,929 | — | 25,312 | — | — | 274,271 | — | 319,512 | ||||||||||||||||||||||||
Total liabilities | 2,406,378 | 232,942 | 2,950,553 | 6,512,834 | 336,354 | 6,387,728 | (13,392,077 | ) | 5,434,712 | |||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||||||
Total shareholder equity | 6,691,470 | 2,404,863 | 2,089,258 | 5,639,790 | 7,174,727 | 9,781,284 | (27,089,922 | ) | 6,691,470 | |||||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | 1,159,259 | (436,258 | ) | 723,001 | |||||||||||||||||||||||
Total equity | 6,691,470 | 2,404,863 | 2,089,258 | 5,639,790 | 7,174,727 | 10,940,543 | (27,526,180 | ) | 7,414,471 | |||||||||||||||||||||||
Total liabilities and equity | $ | 9,097,848 | $ | 2,637,805 | $ | 5,039,811 | $ | 12,152,624 | $ | 7,511,081 | $ | 17,328,271 | $ | (40,918,257 | ) | $ | 12,849,183 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||||||||||
Contract drilling services | $ | — | $ | — | $ | 52,333 | $ | — | $ | — | $ | 331,916 | $ | (10,992 | ) | $ | 373,257 | |||||||||||||||
Reimbursables | — | — | 2,933 | — | — | 8,800 | — | 11,733 | ||||||||||||||||||||||||
Other | — | — | — | — | — | 163 | — | 163 | ||||||||||||||||||||||||
Total operating revenues | — | — | 55,266 | — | — | 340,879 | (10,992 | ) | 385,153 | |||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||||
Contract drilling services | 857 | 3,914 | 20,487 | 17,483 | — | 174,323 | (10,992 | ) | 206,072 | |||||||||||||||||||||||
Reimbursables | — | — | 2,702 | — | — | 6,440 | — | 9,142 | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 22,661 | — | — | 132,581 | — | 155,242 | ||||||||||||||||||||||||
General and administrative | 203 | 1,552 | — | 7,231 | — | 3,047 | — | 12,033 | ||||||||||||||||||||||||
Loss on impairment | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total operating costs and expenses | 1,060 | 5,466 | 45,850 | 24,714 | — | 316,391 | (10,992 | ) | 382,489 | |||||||||||||||||||||||
Operating income (loss) | (1,060 | ) | (5,466 | ) | 9,416 | (24,714 | ) | — | 24,488 | — | 2,664 | |||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Income (loss) of unconsolidated affiliates | (49,010 | ) | 17,529 | (6,572 | ) | 10,186 | 12,187 | — | 15,680 | — | ||||||||||||||||||||||
Interest expense, net of amounts capitalized | (2,472 | ) | (25,311 | ) | (2,872 | ) | (52,073 | ) | (3,258 | ) | (10,278 | ) | 43,695 | (52,569 | ) | |||||||||||||||||
Gain on extinguishment of debt, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Interest income and other, net | 1,666 | 30 | 2,816 | 525 | 6,046 | 33,180 | (43,695 | ) | 568 | |||||||||||||||||||||||
Income (loss) before income taxes | (50,876 | ) | (13,218 | ) | 2,788 | (66,076 | ) | 14,975 | 47,390 | 15,680 | (49,337 | ) | ||||||||||||||||||||
Income tax benefit (provision) | — | (10,050 | ) | (167 | ) | — | — | 19,524 | — | 9,307 | ||||||||||||||||||||||
Net income (loss) | (50,876 | ) | (23,268 | ) | 2,621 | (66,076 | ) | 14,975 | 66,914 | 15,680 | (40,030 | ) | ||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | (5,933 | ) | (4,913 | ) | (10,846 | ) | |||||||||||||||||||||
Net income (loss) attributable to Noble Corporation | (50,876 | ) | (23,268 | ) | 2,621 | (66,076 | ) | 14,975 | 60,981 | 10,767 | (50,876 | ) | ||||||||||||||||||||
Other comprehensive income, net | 701 | — | — | — | — | 701 | (701 | ) | 701 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to Noble Corporation | $ | (50,175 | ) | $ | (23,268 | ) | $ | 2,621 | $ | (66,076 | ) | $ | 14,975 | $ | 61,682 | $ | 10,066 | $ | (50,175 | ) |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||||||||||
Contract drilling services | $ | — | $ | — | $ | 169,379 | $ | — | $ | — | $ | 1,728,374 | $ | (56,432 | ) | $ | 1,841,321 | |||||||||||||||
Reimbursables | — | — | 6,301 | — | — | 43,971 | — | 50,272 | ||||||||||||||||||||||||
Other | — | — | — | — | — | 1,016 | — | 1,016 | ||||||||||||||||||||||||
Total operating revenues | — | — | 175,680 | — | — | 1,773,361 | (56,432 | ) | 1,892,609 | |||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||||
Contract drilling services | 3,574 | 15,627 | 47,005 | 69,087 | — | 618,735 | (56,432 | ) | 697,596 | |||||||||||||||||||||||
Reimbursables | — | — | 5,589 | — | — | 33,857 | — | 39,446 | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 66,431 | — | — | 389,422 | — | 455,853 | ||||||||||||||||||||||||
General and administrative | 928 | 7,207 | — | 32,696 | 1 | (4,341 | ) | — | 36,491 | |||||||||||||||||||||||
Loss on impairment | — | — | — | — | — | 16,616 | — | 16,616 | ||||||||||||||||||||||||
Total operating costs and expenses | 4,502 | 22,834 | 119,025 | 101,783 | 1 | 1,054,289 | (56,432 | ) | 1,246,002 | |||||||||||||||||||||||
Operating income (loss) | (4,502 | ) | (22,834 | ) | 56,655 | (101,783 | ) | (1 | ) | 719,072 | — | 646,607 | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Income (loss) of unconsolidated affiliates | 331,777 | 58,134 | (64,854 | ) | 640,942 | 610,992 | — | (1,576,991 | ) | — | ||||||||||||||||||||||
Interest expense, net of amounts capitalized | (25,256 | ) | (47,977 | ) | (8,436 | ) | (173,294 | ) | (11,722 | ) | (109,781 | ) | 209,491 | (166,975 | ) | |||||||||||||||||
Gain on extinguishment of debt, net | — | — | — | 11,066 | — | — | — | 11,066 | ||||||||||||||||||||||||
Interest income and other, net | 94,974 | 80 | 9,719 | 19,885 | 6,808 | 76,657 | (209,491 | ) | (1,368 | ) | ||||||||||||||||||||||
Income (loss) before income taxes | 396,993 | (12,597 | ) | (6,916 | ) | 396,816 | 606,077 | 685,948 | (1,576,991 | ) | 489,330 | |||||||||||||||||||||
Income tax benefit (provision) | — | (43,788 | ) | (545 | ) | — | — | 4,023 | — | (40,310 | ) | |||||||||||||||||||||
Net income (loss) | 396,993 | (56,385 | ) | (7,461 | ) | 396,816 | 606,077 | 689,971 | (1,576,991 | ) | 449,020 | |||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | (70,980 | ) | 18,953 | (52,027 | ) | ||||||||||||||||||||||
Net income (loss) attributable to Noble Corporation | 396,993 | (56,385 | ) | (7,461 | ) | 396,816 | 606,077 | 618,991 | (1,558,038 | ) | 396,993 | |||||||||||||||||||||
Other comprehensive income, net | 2,006 | — | — | — | — | 2,006 | (2,006 | ) | 2,006 | |||||||||||||||||||||||
Comprehensive income (loss) attributable to Noble Corporation | $ | 398,999 | $ | (56,385 | ) | $ | (7,461 | ) | $ | 396,816 | $ | 606,077 | $ | 620,997 | $ | (1,560,044 | ) | $ | 398,999 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||||||||||
Contract drilling services | $ | — | $ | — | $ | 37,659 | $ | — | $ | — | $ | 856,145 | $ | (19,991 | ) | $ | 873,813 | |||||||||||||||
Reimbursables | — | — | 4,662 | — | — | 18,196 | — | 22,858 | ||||||||||||||||||||||||
Total operating revenues | — | — | 42,321 | — | — | 874,341 | (19,991 | ) | 896,671 | |||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||||
Contract drilling services | 850 | 3,630 | 32,370 | 14,850 | — | 260,770 | (19,991 | ) | 292,479 | |||||||||||||||||||||||
Reimbursables | — | — | 8,414 | — | — | 9,369 | — | 17,783 | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 20,690 | — | — | 139,693 | — | 160,383 | ||||||||||||||||||||||||
General and administrative | 192 | 1,866 | — | 7,524 | — | 794 | — | 10,376 | ||||||||||||||||||||||||
Total operating costs and expenses | 1,042 | 5,496 | 61,474 | 22,374 | — | 410,626 | (19,991 | ) | 481,021 | |||||||||||||||||||||||
Operating income (loss) | (1,042 | ) | (5,496 | ) | (19,153 | ) | (22,374 | ) | — | 463,715 | — | 415,650 | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Income (loss) of unconsolidated affiliates | 334,441 | 130,794 | 70,445 | 344,840 | 132,616 | — | (1,013,136 | ) | — | |||||||||||||||||||||||
Interest expense, net of amounts capitalized | (17,914 | ) | (1,342 | ) | (3,204 | ) | (58,129 | ) | (7,522 | ) | (37,611 | ) | 71,035 | (54,687 | ) | |||||||||||||||||
Interest income and other, net | 16,052 | 4 | 22,837 | 17,876 | 2,283 | 43,049 | (71,035 | ) | 31,066 | |||||||||||||||||||||||
Income before income taxes | 331,537 | 123,960 | 70,925 | 282,213 | 127,377 | 469,153 | (1,013,136 | ) | 392,029 | |||||||||||||||||||||||
Income tax (provision) benefit | — | (53,518 | ) | (1,198 | ) | — | — | 12,848 | — | (41,868 | ) | |||||||||||||||||||||
Net income | 331,537 | 70,442 | 69,727 | 282,213 | 127,377 | 482,001 | (1,013,136 | ) | 350,161 | |||||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | (32,733 | ) | 14,109 | (18,624 | ) | ||||||||||||||||||||||
Net income attributable to Noble Corporation | 331,537 | 70,442 | 69,727 | 282,213 | 127,377 | 449,268 | (999,027 | ) | 331,537 | |||||||||||||||||||||||
Other comprehensive loss, net | (2,859 | ) | — | — | — | — | (2,859 | ) | 2,859 | (2,859 | ) | |||||||||||||||||||||
Comprehensive income attributable to Noble Corporation | $ | 328,678 | $ | 70,442 | $ | 69,727 | $ | 282,213 | $ | 127,377 | $ | 446,409 | $ | (996,168 | ) | $ | 328,678 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Operating revenues | ||||||||||||||||||||||||||||||||
Contract drilling services | $ | — | $ | — | $ | 176,987 | $ | — | $ | — | $ | 2,349,537 | $ | (102,043 | ) | $ | 2,424,481 | |||||||||||||||
Reimbursables | — | — | 15,578 | — | — | 54,509 | — | 70,087 | ||||||||||||||||||||||||
Total operating revenues | — | — | 192,565 | — | — | 2,404,046 | (102,043 | ) | 2,494,568 | |||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||||||||
Contract drilling services | 5,457 | 20,223 | 79,612 | 61,078 | — | 866,598 | (102,043 | ) | 930,925 | |||||||||||||||||||||||
Reimbursables | — | — | 13,195 | — | — | 42,397 | — | 55,592 | ||||||||||||||||||||||||
Depreciation and amortization | — | — | 58,741 | — | — | 414,305 | — | 473,046 | ||||||||||||||||||||||||
General and administrative | 1,131 | 8,926 | — | 24,918 | 1 | 1,117 | — | 36,093 | ||||||||||||||||||||||||
Total operating costs and expenses | 6,588 | 29,149 | 151,548 | 85,996 | 1 | 1,324,417 | (102,043 | ) | 1,495,656 | |||||||||||||||||||||||
Operating income (loss) | (6,588 | ) | (29,149 | ) | 41,017 | (85,996 | ) | (1 | ) | 1,079,629 | — | 998,912 | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||
Income (loss) of unconsolidated affiliates | 738,742 | 197,773 | 162,486 | 883,323 | 475,715 | — | (2,458,039 | ) | — | |||||||||||||||||||||||
Interest expense, net of amounts capitalized | (63,800 | ) | (3,590 | ) | (9,769 | ) | (167,017 | ) | (21,491 | ) | (65,553 | ) | 170,024 | (161,196 | ) | |||||||||||||||||
Interest income and other, net | 22,525 | 4,835 | 49,824 | 59,666 | 5,096 | 63,691 | (170,024 | ) | 35,613 | |||||||||||||||||||||||
Income before income taxes | 690,879 | 169,869 | 243,558 | 689,976 | 459,319 | 1,077,767 | (2,458,039 | ) | 873,329 | |||||||||||||||||||||||
Income tax provision | — | (87,203 | ) | (2,974 | ) | — | — | (34,785 | ) | — | (124,962 | ) | ||||||||||||||||||||
Net income | 690,879 | 82,666 | 240,584 | 689,976 | 459,319 | 1,042,982 | (2,458,039 | ) | 748,367 | |||||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | (90,557 | ) | 33,069 | (57,488 | ) | ||||||||||||||||||||||
Net income attributable to Noble Corporation | 690,879 | 82,666 | 240,584 | 689,976 | 459,319 | 952,425 | (2,424,970 | ) | 690,879 | |||||||||||||||||||||||
Other comprehensive loss, net | (2,614 | ) | — | — | — | — | (2,614 | ) | 2,614 | (2,614 | ) | |||||||||||||||||||||
Comprehensive income attributable to Noble Corporation | $ | 688,265 | $ | 82,666 | $ | 240,584 | $ | 689,976 | $ | 459,319 | $ | 949,811 | $ | (2,422,356 | ) | $ | 688,265 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||||||||||
Net cash from operating activities | $ | 91,918 | $ | (124,190 | ) | $ | 81,355 | $ | (278,331 | ) | $ | (8,697 | ) | $ | 1,223,801 | $ | — | $ | 985,856 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||
Capital expenditures | — | — | (473,460 | ) | — | — | (159,813 | ) | — | (633,273 | ) | |||||||||||||||||||||
Proceeds from disposal of assets | — | — | — | — | — | 23,390 | — | 23,390 | ||||||||||||||||||||||||
Net cash from investing activities | — | — | (473,460 | ) | — | — | (136,423 | ) | — | (609,883 | ) | |||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||
Repayment of long-term debt | — | — | — | (300,000 | ) | — | — | — | (300,000 | ) | ||||||||||||||||||||||
Early repayment of long-term debt | — | — | — | (22,207 | ) | — | — | — | (22,207 | ) | ||||||||||||||||||||||
Premiums paid on early repayment of long-term debt | — | — | — | (1,781 | ) | — | — | — | (1,781 | ) | ||||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (61,980 | ) | — | (61,980 | ) | ||||||||||||||||||||||
Distributions to parent company, net | (76,051 | ) | — | — | — | — | — | — | (76,051 | ) | ||||||||||||||||||||||
Advances (to) from affiliates | (15,513 | ) | 124,190 | 390,122 | 602,320 | 8,697 | (1,109,816 | ) | — | — | ||||||||||||||||||||||
Net cash from financing activities | (91,564 | ) | 124,190 | 390,122 | 278,332 | 8,697 | (1,171,796 | ) | — | (462,019 | ) | |||||||||||||||||||||
Net change in cash and cash equivalents | 354 | — | (1,983 | ) | 1 | — | (84,418 | ) | — | (86,046 | ) | |||||||||||||||||||||
Cash and cash equivalents, beginning of period | 1,627 | — | 2,101 | — | — | 508,067 | — | 511,795 | ||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 1,981 | $ | — | $ | 118 | $ | 1 | $ | — | $ | 423,649 | $ | — | $ | 425,749 |
Noble- Cayman | NHC | NDH | NHIL | NDS6 | Other Non-guarantor Subsidiaries of Noble | Consolidating Adjustments | Total | |||||||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||||||||||
Net cash from operating activities | $ | (33,578 | ) | $ | (28,115 | ) | $ | 141,329 | $ | (210,734 | ) | $ | (20,085 | ) | $ | 1,397,280 | $ | — | $ | 1,246,097 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||
Capital expenditures | — | — | (80,743 | ) | — | — | (242,745 | ) | — | (323,488 | ) | |||||||||||||||||||||
Proceeds from disposal of assets | — | — | — | — | — | 2,535 | — | 2,535 | ||||||||||||||||||||||||
Notes receivable from affiliates | 124,951 | — | — | 608,771 | — | — | (733,722 | ) | — | |||||||||||||||||||||||
Net cash from investing activities | 124,951 | — | (80,743 | ) | 608,771 | — | (240,210 | ) | (733,722 | ) | (320,953 | ) | ||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||
Net change in borrowings outstanding on bank credit facilities | (1,123,495 | ) | — | — | — | — | — | — | (1,123,495 | ) | ||||||||||||||||||||||
Repayment of long-term debt | — | — | — | (350,000 | ) | — | — | — | (350,000 | ) | ||||||||||||||||||||||
Issuance of senior notes | — | — | — | 1,092,728 | — | — | — | 1,092,728 | ||||||||||||||||||||||||
Debt issuance costs on senior notes and credit facilities | (6,450 | ) | — | — | (9,620 | ) | — | — | — | (16,070 | ) | |||||||||||||||||||||
Dividends paid to noncontrolling interests | — | — | — | — | — | (57,048 | ) | — | (57,048 | ) | ||||||||||||||||||||||
Distributions to parent company, net | (372,799 | ) | — | — | — | — | — | — | (372,799 | ) | ||||||||||||||||||||||
Notes payable to affiliates | (608,771 | ) | — | — | — | — | (124,951 | ) | 733,722 | — | ||||||||||||||||||||||
Advances (to) from affiliates | 2,020,141 | 28,115 | (60,705 | ) | (1,131,145 | ) | 20,085 | (876,491 | ) | — | — | |||||||||||||||||||||
Net cash from financing activities | (91,374 | ) | 28,115 | (60,705 | ) | (398,037 | ) | 20,085 | (1,058,490 | ) | 733,722 | (826,684 | ) | |||||||||||||||||||
Net change in cash and cash equivalents | (1 | ) | — | (119 | ) | — | — | 98,580 | — | 98,460 | ||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 5 | — | 254 | — | — | 65,521 | — | 65,780 | ||||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 4 | $ | — | $ | 135 | $ | — | $ | — | $ | 164,101 | $ | — | $ | 164,240 |
Year Ending December 31, | ||||||||||||||||||||||||
Total | 2016 (1) | 2017 | 2018 | 2019 | 2020-2023 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Contract Drilling Services Backlog | ||||||||||||||||||||||||
Semisubmersibles/Drillships (4)(6) | $ | 3,526 | $ | 272 | $ | 728 | $ | 656 | $ | 506 | $ | 1,364 | ||||||||||||
Jackups (3) | 1,164 | 144 | 460 | 285 | 159 | 116 | ||||||||||||||||||
Total (2) | $ | 4,690 | $ | 416 | $ | 1,188 | $ | 941 | $ | 665 | $ | 1,480 | ||||||||||||
Percent of Available Days Committed (5) | ||||||||||||||||||||||||
Semisubmersibles/Drillships | 41 | % | 28 | % | 25 | % | 20 | % | 13 | % | ||||||||||||||
Jackups | 85 | % | 69 | % | 36 | % | 7 | % | 1 | % | ||||||||||||||
Total | 62 | % | 47 | % | 30 | % | 14 | % | 8 | % |
(1) | Represents a three month period beginning October 1, 2016. |
(2) | Some of our drilling contracts provide the customer with certain early termination rights and, in very limited cases, these termination rights require minimal or no notice or financial penalties. On August 24, 2016 we received notice of the cancellation of the Noble Tom Prosser which has been reflected in our backlog as of September 30, 2016. No other notifications of contract terminations have been received. |
(3) | Our Saudi Aramco contract rates were adjusted downward for 2016. Given current market conditions and based on discussions with the customer, we do not expect the rates to return to the original contract rates. Instead, we expect the contract rates to be in the general range of the amended rates for 2016 through the end of each respective contract. Backlog for these contracts has been prepared assuming the reduced rates for 2016 apply for the remainder of the contract. |
(4) | Three of our long-term contracts with Shell, relating to the Noble Bully II, the Noble Globetrotter I and the Noble Globetrotter II, respectively, contain dayrate adjustment clauses after the initial five-year contract term. After the initial five-year term, dayrates adjust up or down every six months based on a discount to a market basket of comparable dayrates, all as defined in the contracts. These contracts commence indexing in April 2017, July 2017 and September 2018 for the Noble Bully II, the Noble Globetrotter I and the Noble Globetrotter II, respectively. There can be no assurance regarding the level of future dayrates under these market-indexed contracts. For every $50,000 change in dayrate under one of these contracts, our backlog would be adjusted by approximately $91 million. The backlog shown herein assumes the initial dayrate continues for the entirety of the contract given the uncertainty surrounding the level of dayrates through the end of the respective terms, although we do expect the initial adjustments in 2017 to be materially lower than the initial five-year term rates. Should the adverse market conditions persist into 2018 or beyond, we would also expect a material reduction to the dayrates for those rigs as compared to the initial five-year term rates. |
(5) | Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs and the number of calendar days in such period. Percentages take into account additional capacity from the estimated date of deployment of our newbuild rig that is scheduled to commence operations during 2016. |
(6) | Noble and a subsidiary of Shell are involved in joint ventures that own and operate both the Noble Bully I and the Noble Bully II. Pursuant to these agreements, each party has an equal 50 percent share in both vessels. As of September 30, 2016, the combined amount of backlog for these rigs totals $1 billion, all of which is included in backlog. Noble’s proportional interest in the backlog for these rigs totals $500 million. |
Average Rig Utilization (1) | Operating Days (2) | Average Dayrates | ||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||||||
Jackups | 80 | % | 84 | % | 954 | 1,005 | (5 | )% | $ | 109,387 | $ | 159,745 | (32 | )% | ||||||||||||
Semisubmersibles | 13 | % | 59 | % | 92 | 432 | (79 | )% | 293,269 | 698,512 | (3) | (58 | )% | |||||||||||||
Drillships | 70 | % | 100 | % | 517 | 828 | (38 | )% | 467,949 | 497,147 | (6 | )% | ||||||||||||||
Total | 59 | % | 82 | % | 1,563 | 2,265 | (31 | )% | $ | 238,869 | $ | 385,755 | (3) | (38 | )% |
(1) | We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rig under construction. |
(2) | Information reflects the number of days that our rigs were operating under contract. |
(3) | Includes the contract drilling services revenue portion of the Noble Homer Ferrington arbitration award during the Comparable Quarter. Exclusive of the arbitration award, the average dayrate for the three months ended September 30, 2015 was $382,545 and $325,537 for semisubmerisbles and the total fleet, respectively. |
Three Months Ended September 30, | Change | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Operating revenues: | |||||||||||||||
Contract drilling services | $ | 373,257 | $ | 873,813 | $ | (500,556 | ) | (57 | )% | ||||||
Reimbursables (1) | 11,733 | 22,858 | (11,125 | ) | (49 | )% | |||||||||
Other | 163 | — | 163 | ** | |||||||||||
$ | 385,153 | $ | 896,671 | $ | (511,518 | ) | (57 | )% | |||||||
Operating costs and expenses: | |||||||||||||||
Contract drilling services | $ | 207,204 | $ | 293,067 | $ | (85,863 | ) | (29 | )% | ||||||
Reimbursables (1) | 9,142 | 17,783 | (8,641 | ) | (49 | )% | |||||||||
Depreciation and amortization | 149,398 | 155,180 | (5,782 | ) | (4 | )% | |||||||||
General and administrative | 15,773 | 15,196 | 577 | 4 | % | ||||||||||
381,517 | 481,226 | (99,709 | ) | (21 | )% | ||||||||||
Operating income | $ | 3,636 | $ | 415,445 | $ | (411,809 | ) | (99 | )% |
(1) | We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows. |
** | Not a meaningful percentage. |
Average Rig Utilization (1) | Operating Days (2) | Average Dayrates | ||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||||||
Jackups | 82 | % | 86 | % | 2,916 | 2,989 | (2 | )% | $ | 126,931 | $ | 167,937 | (24 | )% | ||||||||||||
Semisubmersibles | 25 | % | 62 | % | 557 | 1,379 | (60 | )% | 270,953 | 491,951 | (4) | (45 | )% | |||||||||||||
Drillships | 85 | % | 100 | % | 1,871 | 2,457 | (24 | )% | 705,648 | (3) | 506,341 | 39 | % | |||||||||||||
Total | 67 | % | 84 | % | 5,344 | 6,825 | (22 | )% | $ | 344,571 | (3) | $ | 355,246 | (4) | (3 | )% |
(1) | We define utilization for a specific period as the total number of days our rigs are operating under contract, divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet, excluding newbuild rigs under construction. |
(2) | Information reflects the number of days that our rigs were operating under contract. |
(3) | Average dayrates for the nine months ended September 30, 2016 includes the impact of the FCX Settlement. Exclusive of these items, the average dayrate for the nine months ended September 30, 2016 would have been $495,588 and $271,020 for drillships and the total fleet, respectively. |
(4) | Includes the contract drilling services revenue portion of the Noble Homer Ferrington arbitration award during the Comparable Period. Exclusive of the arbitration award, the average dayrate for the nine months ended September 30, 2015 was $393,052 and $335,259 for semisubmersibles and the total fleet, respectively. |
Nine Months Ended September 30, | Change | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Operating revenues: | |||||||||||||||
Contract drilling services | $ | 1,841,321 | $ | 2,424,481 | $ | (583,160 | ) | (24 | )% | ||||||
Reimbursables (1) | 50,272 | 70,087 | (19,815 | ) | (28 | )% | |||||||||
Other | 316 | — | 316 | ** | |||||||||||
$ | 1,891,909 | $ | 2,494,568 | $ | (602,659 | ) | (24 | )% | |||||||
Operating costs and expenses: | |||||||||||||||
Contract drilling services | $ | 702,628 | $ | 934,024 | $ | (231,396 | ) | (25 | )% | ||||||
Reimbursables (1) | 39,555 | 55,592 | (16,037 | ) | (29 | )% | |||||||||
Depreciation and amortization | 438,664 | 456,967 | (18,303 | ) | (4 | )% | |||||||||
General and administrative | 54,346 | 61,558 | (7,212 | ) | (12 | )% | |||||||||
Loss on impairment | 16,616 | — | 16,616 | ** | |||||||||||
1,251,809 | 1,508,141 | (256,332 | ) | (17 | )% | ||||||||||
Operating income | $ | 640,100 | $ | 986,427 | $ | (346,327 | ) | (35 | )% |
(1) | We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations or cash flows. |
** | Not a meaningful percentage. |
• | normal recurring operating expenses; |
• | repayment of our maturing $300 million 3.05% Senior Notes; |
• | capital expenditures; and |
• | payment of a quarterly dividend. |
• | normal recurring operating expenses; |
• | committed and discretionary capital expenditures; and |
• | repayment of debt. |
• | $145 million for sustaining capital, upgrades and replacements to drilling equipment, major projects and subsea related expenditures; |
• | $431 million in newbuild expenditures, including costs for the Noble Lloyd Noble and trailing costs on our recently completed newbuilds; and |
• | $16 million in capitalized interest. |
/s/ David W. Williams | November 7, 2016 | |
David W. Williams Chairman, President and Chief Executive Officer (Principal Executive Officer) | Date | |
/s/ Dennis J. Lubojacky | ||
Dennis J. Lubojacky Chief Financial Officer, Vice President, Controller and Treasurer (Principal Financial Officer) |
/s/ David W. Williams | November 7, 2016 | |
David W. Williams President and Chief Executive Officer (Principal Executive Officer) | Date | |
/s/ Dennis J. Lubojacky | ||
Dennis J. Lubojacky Vice President and Chief Financial Officer (Principal Financial Officer) |
Exhibit Number | Exhibit | |
2.1 | Merger Agreement, dated as of June 30, 2013, between Noble Corporation, a Swiss corporation (“Noble-Swiss”) and Noble Corporation Limited (“Noble-UK”) (filed as Exhibit 2.1 to Noble-Swiss’ Current Report on Form 8-K filed on July 1, 2013 and incorporated herein by reference). | |
2.2 | Agreement and Plan of Merger, Reorganization and Consolidation, dated as of December 19, 2008, among Noble Corporation, a Swiss corporation (“Noble-Swiss”), Noble Corporation, a Cayman Islands company (“Noble-Cayman”), and Noble Cayman Acquisition Ltd. (filed as Exhibit 1.1 to Noble-Cayman’s Current Report on Form 8-K filed on December 22, 2008 and incorporated herein by reference). | |
2.3 | Amendment No. 1 to Agreement and Plan of Merger, Reorganization and Consolidation, dated as of February 4, 2009, among Noble-Swiss, Noble-Cayman and Noble Cayman Acquisition Ltd. (filed as Exhibit 2.2 to Noble-Cayman’s Current Report on Form 8-K filed on February 4, 2009 and incorporated herein by reference). | |
2.4 | Master Separation Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 2.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference). | |
3.1 | Composite Copy of Articles of Association of Noble-UK, as of June 10, 2014 (filed as Exhibit 3.1 to Noble-UK’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2014 and incorporated herein by reference). | |
3.2 | Memorandum and Articles of Association of Noble-Cayman (filed as Exhibit 3.1 to Noble-Cayman’s Current Report on Form 8-K filed on March 30, 2009 and incorporated herein by reference). | |
4.1 | Revolving Credit Agreement dated as of January 26, 2015, among Noble-Cayman and Noble International Finance Company, a Cayman Islands company, as borrowers; JPMorgan Chase Bank, N.A., as administrative agent and a swingline lender; Wells Fargo Bank, National Association, as a swingline lender; the lenders party thereto; Barclays Bank PLC, Citibank, N.A., DNB Bank ASA New York Branch, HSBC Bank USA, N.A., SunTrust Bank and Wells Fargo, as co-syndication agents; BNP Paribas, Credit Suisse AG, Cayman Islands Branch and Mizuho Bank, Ltd, as co-documentation agents; and J.P. Morgan Securities LLC, Barclays Bank PLC, Citigroup Global Markets Inc., DNB Markets, Inc., HSBC Securities (USA) Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as joint lead arrangers and joint lead bookrunners (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on January 29, 2015 and incorporated herein by reference). | |
4.2 | Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.1 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference). | |
4.3 | First Supplemental Indenture, dated as of March 16, 2015, among Noble Holding International Limited, as Issuer, Noble Corporation, as Guarantor, and Wells Fargo N.A., as Trustee, relating to 4.000% senior notes due 2018, 5.950% senior notes due 2025 and 6.95% senior notes due 2045 of Noble Holding International Limited (filed as Exhibit 4.2 to Noble-UK’s Current Report on Form 8-K filed on March 16, 2015 and incorporated herein by reference). | |
10.1 | Tax Sharing Agreement, dated as of July 31, 2014, between Noble-UK and Paragon Offshore plc. (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference). | |
10.2 | Employee Matters Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.2 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference). | |
10.3 | Transition Services Agreement, dated as of July 31, 2014, between Noble-Cayman and Paragon Offshore plc. (filed as Exhibit 10.3 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference). | |
Exhibit Number | Exhibit | |
10.4 | Transition Services Agreement (Brazil), dated as of July 31, 2014, among Paragon Offshore do Brasil Limitada, Paragon Offshore (Nederland) B.V., Paragon Offshore plc, Noble-Cayman, Noble Dave Beard Limited and Noble Drilling (Nederland) II B.V. (filed as Exhibit 10.4 to Noble-UK’s Current Report on Form 8-K filed on August 5, 2014 and incorporated herein by reference). | |
10.5* | Noble Corporation plc 2015 Omnibus Incentive Plan, restated as of May 1, 2016 (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on April 26, 2016 and incorporated herein by reference). | |
10.6 | Definitive Settlement Agreement, dated as of April 29, 2016, by and between Paragon Offshore plc and Noble-UK (filed as Exhibit 10.7 to Noble-UK’s Quarterly Report on Form 10-Q for the period ended March 31, 2016 and incorporated herein by reference). | |
10.7 | Settlement and Termination Agreement, dated as of May 10, 2016, by and among Freeport-McMoRan Inc., Freeport-McMoRan Oil & Gas LLC and Noble Drilling (U.S.) LLC (filed as Exhibit 10.1 to Noble-UK’s Current Report on Form 8-K filed on May 10, 2016 and incorporated herein by reference). | |
10.8 | Term Sheet for Proposed Amendment to Settlement Agreement, dated as of August 5, 2016, by and between Paragon Offshore plc and Noble-UK. | |
31.1 | Certification of David W. Williams pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a-14(a) or Rule 15d-14(a), for Noble-UK and for Noble-Cayman. | |
31.2 | Certification of Dennis J. Lubojacky pursuant to the U.S. Securities Exchange Act of 1934, as amended, Rule 13a- 14(a) or Rule 15d-14(a), for Noble-UK and for Noble-Cayman. | |
32.1+ | Certification of David W. Williams pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-UK and for Noble-Cayman. | |
32.2+ | Certification of Dennis J. Lubojacky pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, for Noble-UK and for Noble-Cayman. | |
101 | Interactive Data File |
* | Management contract or compensatory plan or arrangement |
+ | Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K. |
Amendment to Tax Sharing Agreement | The Parties propose that the Amendment to Tax Sharing Agreement be amended to provide that, during the Mexican Tax Indemnity Deferral Period, Paragon shall be entitled to deliver a Paragon Note (as defined below), in lieu of cash, to Noble in payment of any amount that Paragon owes Noble in respect of Specified Mexican Taxes and Reimbursable Expenses (as defined below) under the Amendment to Tax Sharing Agreement up to an aggregate amount of $5 million. For the avoidance of doubt, (i) Paragon shall not be entitled to deliver to Noble any Paragon Note in payment of any amount in respect of Specified Mexican Taxes or Reimbursable Expenses to the extent the aggregate principal amount(s) of such Paragon Note and all other Paragon Notes, if any, previously delivered to Noble in payment of any amount in respect of Specified Mexican Taxes and Reimbursable Expenses would exceed $5 million, (ii) the amounts that may be paid with a Paragon Note include amounts owed for all out-of-pocket costs and expenses (e.g. professional fees, court costs, third-party storage fees, etc.) required to be reimbursed to Noble by Paragon (“Reimbursable Expenses”), and (iii) Paragon shall be required to pay any amount or amounts that Paragon owes Noble during the Mexican Tax Indemnity Deferral Period in respect of Specified Mexican Taxes and Reimbursable Expenses under the Amendment to Tax Sharing Agreement in excess of an aggregate of $5 million. “Mexican Tax Indemnity Deferral Period” means the first four years after the Paragon Plan Closing (as defined in the Settlement Agreement). |
Paragon Notes | “Paragon Notes” means one or more promissory notes issued by Paragon and payable to Noble with the following terms: • Term: All remaining principal and accrued but unpaid interest shall be due and payable on the earliest of the (i) liquidation or dissolution of Paragon, (ii) the sale of all or substantially all of the assets of Paragon, (iii) the voluntary or involuntary bankruptcy of Paragon following the Effective Date1 of the Plan, (iv) any acceleration of any other debt facility in excess of a de minimis amount under which Paragon is an obligor or guarantor, or (v) the fourth anniversary of the Effective Date. • Amortization: No amortization other than mandatory upon maturity. • Interest Rate: The Paragon Notes shall bear interest at either: 12% if paid in cash or, at the election of Paragon, 15% if paid in kind. • Default Interest Rate: All past due amounts (principal and interest) to bear interest at the applicable Interest Rate in effect plus 200 basis points. • Interest Payments: Payments of interest only will be due semiannually, in arrears, on each of June 1 and December 31 in cash, until maturity; provided, that Paragon shall have the option to pay any such interest on a payment in kind basis by issuing an additional Paragon Note with a principal amount equal to the amount of interest accrued at the applicable payment in kind interest rate. • Prepayment: Prepayable, in whole or in part, at any time without penalty. • Other provisions: The Paragon Notes will contain other customary provisions common in commercial promissory notes including provisions regarding default, acceleration, governing law, enforcement and payment instructions. |
1“Effective Date” shall have the meaning ascribed to such term in the Second Amended Joint Chapter 11 Plan of Paragon Offshore PLC and its Affiliated Debtors (Docket No. 318) filed by Paragon and its affiliated debtors and debtors and possession in the Chapter 11 cases captioned In re Paragon Offshore PLC, Case No. 16-10386 (CSS) (Bankr. D. Del), as the same may be amended upon the consent of Noble and consistent with this term sheet (the “Plan”). |
Implementation | Effective as of the Effective Date, the Parties will modify applicable provisions of the Amendment to Tax Sharing Agreement to be consistent with the terms hereof. Otherwise, the Amendment to Tax Sharing Agreement will remain as provided in the Settlement Agreement, without modification thereto. The Parties intend to seek to negotiate the Amendment on terms substantially consistent with the terms in this Term Sheet and, upon execution of such Amendment by the Parties, Paragon shall seek approval of the Settlement Agreement, as amended by the Amendment, with the Bankruptcy Court in a Chapter 11 proceeding. Notwithstanding anything herein to the contrary, the Parties' obligations under “Amendment to Tax Sharing Agreement”, “Paragon Notes”, “Negotiation and Settlement of Certain Tax Liabilities” and “Implementation” are subject to consummation of the Plan, which will incorporate the terms of this proposed settlement. |
Publicity | Each Party will reasonably cooperate with respect to any public announcement or other public disclosure regarding this Term Sheet or the matters addressed hereby. |
Governing Law | The enforceable obligations of the Parties under this Term Sheet shall be construed and enforced in accordance with, and the rights of the Parties thereunder shall be governed by, the laws of the State of New York, without giving effect to the conflict of laws principles thereof. |
Counterparts | This Term Sheet may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same agreement. Execution copies of this Term Sheet delivered by facsimile or PDF shall be deemed to be an original for the purposes of this paragraph. |
1. | I have reviewed this quarterly report on Form 10-Q of Noble Corporation plc and Noble Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ David W. Williams | November 7, 2016 |
David W. Williams | Date |
Chairman, President and Chief Executive Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and President and Chief Executive Officer of Noble Corporation, a Cayman Islands company |
1. | I have reviewed this quarterly report on Form 10-Q of Noble Corporation plc and Noble Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Dennis J. Lubojacky | November 7, 2016 |
Dennis J. Lubojacky | Date |
Chief Financial Officer, Vice President, Controller and Treasurer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and Vice President and Chief Financial Officer of Noble Corporation, a Cayman Islands company |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 7, 2016 | /s/ David W. Williams |
David W. Williams | |
Chairman, President and Chief Executive Officer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and President and Chief Executive Officer of Noble Corporation, a Cayman Islands company |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 7, 2016 | /s/ Dennis J. Lubojacky |
Dennis J. Lubojacky | |
Chief Financial Officer, Vice President, Controller and Treasurer of Noble Corporation plc, a public limited company incorporated under the laws of England and Wales, and Vice President and Chief Financial Officer of Noble Corporation, a Cayman Islands company |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 21, 2016 |
|
Document Information [Line Items] | ||
Entity Registrant Name | Noble Corp plc | |
Trading Symbol | NE | |
Entity Central Index Key | 0001458891 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 243,233,371 | |
Noble Corp [Member] | ||
Document Information [Line Items] | ||
Entity Registrant Name | Noble Corporation | |
Entity Central Index Key | 0001169055 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 261,245,693 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares shares in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Ordinary shares, shares outstanding | 243,233 | 241,977 |
Noble Corp [Member] | ||
Ordinary shares, shares outstanding | 261,246 | 261,246 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Operating revenues | ||||
Contract drilling services | $ 373,257 | $ 873,813 | $ 1,841,321 | $ 2,424,481 |
Reimbursables | 11,733 | 22,858 | 50,272 | 70,087 |
Other | 163 | 0 | 316 | 0 |
Total operating revenues | 385,153 | 896,671 | 1,891,909 | 2,494,568 |
Operating costs and expenses | ||||
Contract drilling services | 207,204 | 293,067 | 702,628 | 934,024 |
Reimbursables | 9,142 | 17,783 | 39,446 | 55,592 |
Depreciation and amortization | 155,242 | 160,652 | 455,907 | 473,913 |
General and administrative | 15,773 | 15,196 | 54,346 | 61,558 |
Loss on impairment | 0 | 0 | 16,616 | 0 |
Total operating costs and expenses | 387,361 | 486,698 | 1,268,943 | 1,525,087 |
Operating income (loss) | (2,208) | 409,973 | 622,966 | 969,481 |
Other income (expense) | ||||
Interest expense, net of amount capitalized | (52,569) | (54,687) | (166,975) | (161,196) |
Gain on extinguishment of debt, net | 0 | 0 | 11,066 | 0 |
Interest income and other, net | 540 | 30,934 | (1,443) | 37,085 |
Income (loss) before income taxes | (54,237) | 386,220 | 465,614 | 845,370 |
Income tax benefit (provision) | 10,002 | (41,789) | (40,317) | (124,641) |
Net income (loss) | (44,235) | 344,431 | 425,297 | 720,729 |
Net income attributable to noncontrolling interests | (10,846) | (18,624) | (52,027) | (57,488) |
Net income (loss) attributable to the company | $ (55,081) | $ 325,807 | $ 373,270 | $ 663,241 |
Per share data: | ||||
Basic: (usd per share) | $ (0.23) | $ 1.32 | $ 1.48 | $ 2.68 |
Diluted: (usd per share) | $ (0.23) | $ 1.32 | $ 1.48 | $ 2.68 |
Noble Corp [Member] | ||||
Operating revenues | ||||
Contract drilling services | $ 373,257 | $ 873,813 | $ 1,841,321 | $ 2,424,481 |
Reimbursables | 11,733 | 22,858 | 50,272 | 70,087 |
Other | 163 | 0 | 1,016 | 0 |
Total operating revenues | 385,153 | 896,671 | 1,892,609 | 2,494,568 |
Operating costs and expenses | ||||
Contract drilling services | 206,072 | 292,479 | 697,596 | 930,925 |
Reimbursables | 9,142 | 17,783 | 39,446 | 55,592 |
Depreciation and amortization | 155,242 | 160,383 | 455,853 | 473,046 |
General and administrative | 12,033 | 10,376 | 36,491 | 36,093 |
Loss on impairment | 0 | 0 | 16,616 | 0 |
Total operating costs and expenses | 382,489 | 481,021 | 1,246,002 | 1,495,656 |
Operating income (loss) | 2,664 | 415,650 | 646,607 | 998,912 |
Other income (expense) | ||||
Interest expense, net of amount capitalized | (52,569) | (54,687) | (166,975) | (161,196) |
Gain on extinguishment of debt, net | 0 | 0 | 11,066 | 0 |
Interest income and other, net | 568 | 31,066 | (1,368) | 35,613 |
Income (loss) before income taxes | (49,337) | 392,029 | 489,330 | 873,329 |
Income tax benefit (provision) | 9,307 | (41,868) | (40,310) | (124,962) |
Net income (loss) | (40,030) | 350,161 | 449,020 | 748,367 |
Net income attributable to noncontrolling interests | (10,846) | (18,624) | (52,027) | (57,488) |
Net income (loss) attributable to the company | $ (50,876) | $ 331,537 | $ 396,993 | $ 690,879 |
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Amortization of deferred pension plan, tax provision | $ 408 | $ 575 | $ 1,227 | $ 1,723 |
Noble Corp [Member] | ||||
Amortization of deferred pension plan, tax provision | $ 408 | $ 575 | $ 1,227 | $ 1,723 |
Consolidated Statements of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
Total |
Noble Corp [Member] |
Shares [Member] |
Shares [Member]
Noble Corp [Member]
|
Capital in Excess of Par Value [Member] |
Capital in Excess of Par Value [Member]
Noble Corp [Member]
|
Retained Earnings [Member] |
Retained Earnings [Member]
Noble Corp [Member]
|
Accumulated Other Comprehensive Loss [Member] |
Accumulated Other Comprehensive Loss [Member]
Noble Corp [Member]
|
Noncontrolling Interests [Member] |
Noncontrolling Interests [Member]
Noble Corp [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2014 | $ 7,287,034 | $ 7,218,782 | $ 2,475 | $ 26,125 | $ 695,638 | $ 530,657 | $ 5,936,035 | $ 6,009,114 | $ (69,418) | $ (69,418) | $ 722,304 | $ 722,304 |
Beginning Balance, Shares at Dec. 31, 2014 | 247,501 | 261,246 | ||||||||||
Employee related equity activity | ||||||||||||
Amortization of share-based compensation | 30,296 | 30,296 | ||||||||||
Issuance of share-based compensation shares | (4,150) | $ 7 | (4,157) | |||||||||
Issuance of share-based compensation shares, Shares | 678 | |||||||||||
Tax benefit of equity transactions | (2,401) | (2,401) | ||||||||||
Repurchases of shares | $ (100,630) | $ (62) | (100,568) | |||||||||
Repurchases of shares, Shares | (6,200) | (6,209) | ||||||||||
Net income (loss) | $ 720,729 | 748,367 | 663,241 | 690,879 | 57,488 | 57,488 | ||||||
Dividends paid to noncontrolling interests | (57,048) | (57,048) | (57,048) | (57,048) | ||||||||
Dividends | (278,443) | (372,799) | (278,443) | (372,799) | ||||||||
Capital contribution by parent - share- based compensation | 21,875 | 21,875 | ||||||||||
Other comprehensive income (loss), net | (2,614) | (2,614) | (2,614) | (2,614) | ||||||||
Ending Balance at Sep. 30, 2015 | 7,592,773 | 7,556,563 | $ 2,420 | $ 26,125 | 618,808 | 552,532 | 6,320,833 | 6,327,194 | (72,032) | (72,032) | 722,744 | 722,744 |
Ending Balance, Shares at Sep. 30, 2015 | 241,970 | 261,246 | ||||||||||
Beginning balance at Dec. 31, 2015 | $ 7,422,230 | $ 7,414,471 | $ 2,420 | $ 26,125 | 628,483 | 561,309 | 6,131,501 | 6,167,211 | (63,175) | (63,175) | 723,001 | 723,001 |
Beginning Balance, Shares at Dec. 31, 2015 | 241,977 | 261,246 | 241,977 | 261,246 | ||||||||
Employee related equity activity | ||||||||||||
Amortization of share-based compensation | $ 27,222 | 27,222 | ||||||||||
Issuance of share-based compensation shares | (3,597) | $ 12 | (3,609) | |||||||||
Issuance of share-based compensation shares, Shares | 1,256 | |||||||||||
Tax benefit of equity transactions | (5,495) | (5,495) | ||||||||||
Net income (loss) | 425,297 | $ 449,020 | 373,270 | 396,993 | 52,027 | 52,027 | ||||||
Dividends paid to noncontrolling interests | (61,980) | (61,980) | (61,980) | (61,980) | ||||||||
Dividends | (47,700) | (76,051) | (47,700) | (76,051) | ||||||||
Capital contribution by parent - share- based compensation | 25,296 | 25,296 | ||||||||||
Other comprehensive income (loss), net | 2,006 | 2,006 | 2,006 | 2,006 | ||||||||
Ending Balance at Sep. 30, 2016 | $ 7,757,983 | $ 7,752,762 | $ 2,432 | $ 26,125 | $ 646,601 | $ 586,605 | $ 6,457,071 | $ 6,488,153 | $ (61,169) | $ (61,169) | $ 713,048 | $ 713,048 |
Ending Balance, Shares at Sep. 30, 2016 | 243,233 | 261,246 | 243,233 | 261,246 |
Organization and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble-UK”), is a leading offshore drilling contractor for the oil and gas industry. We perform contract drilling services with our global fleet of mobile offshore drilling units. As of the filing date of this Quarterly Report on Form 10-Q, our fleet consisted of 14 jackups, eight drillships and eight semisubmersibles. We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business, and the fact that all of our drilling fleet is dependent upon the worldwide oil and gas industry. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist largely of major independent and government owned/controlled oil and gas companies throughout the world. As of September 30, 2016, our contract drilling services segment conducted operations in the United States, the North Sea, the Middle East, Asia and Australia. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. Noble Corporation, a Cayman Islands company (“Noble-Cayman”), is an indirect, wholly-owned subsidiary of Noble-UK, our publicly-traded parent company. Noble-UK’s principal asset is all of the shares of Noble-Cayman. Noble-Cayman has no public equity outstanding. The consolidated financial statements of Noble-UK include the accounts of Noble-Cayman, and Noble-UK conducts substantially all of its business through Noble-Cayman and its subsidiaries. The accompanying unaudited consolidated financial statements of Noble-UK and Noble-Cayman have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) as they pertain to Quarterly Reports on Form 10-Q. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a recurring nature. The December 31, 2015 Consolidated Balance Sheets presented herein are derived from the December 31, 2015 audited consolidated financial statements. These interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed by both Noble-UK and Noble-Cayman. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Certain amounts in prior periods have been reclassified to conform to the current year presentation. In accordance with our adoption of Accounting Standards Update (“ASU”) No. 2015-3 on January 1, 2016, unamortized debt issuance costs related to our senior notes of approximately $26 million as of December 31, 2015, which were previously included in “Other assets,” are included in either “Current maturities of long-term debt” or “Long-term debt” in the accompanying Consolidated Balance Sheets, based upon the maturity date of the respective senior notes. |
Spin-off of Paragon Offshore plc ("Paragon Offshore") |
9 Months Ended |
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Sep. 30, 2016 | |
Spin-off [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Spin-off of Paragon Offshore plc ("Paragon Offshore") | Spin-off of Paragon Offshore plc (“Paragon Offshore”) On August 1, 2014, Noble-UK completed the separation and spin-off of a majority of its standard specification offshore drilling business (the “Spin-off”) through a pro rata distribution of all of the ordinary shares of its wholly-owned subsidiary, Paragon Offshore, to the holders of Noble’s ordinary shares. In February 2016, we entered into an agreement in principle for a settlement with Paragon Offshore under which, in exchange for a full and unconditional release of any claims by Paragon Offshore in connection with the Spin-off (including certain claims that could be brought on behalf of Paragon Offshore’s creditors), we agreed to assume the administration of Mexican tax claims for specified years up to and including 2010, as well as the related bonding obligations and certain of the related tax liabilities. The settlement agreement with Paragon Offshore, which was signed by the parties on April 29, 2016, is subject to the approval of Paragon Offshore's bankruptcy plan by the bankruptcy court. On October 28, 2016, the bankruptcy court having jurisdiction over the Paragon Offshore bankruptcy denied confirmation of Paragon Offshore’s bankruptcy plan. In the oral ruling, the judge noted that his decision to deny confirmation did not preclude Paragon Offshore from restructuring, only that they could not do so under the existing plan. Paragon Offshore has announced that it is evaluating its options. (see Note 14 for additional information). Prior to the completion of the Spin-off, Noble and Paragon Offshore entered into a series of agreements to effect the separation and Spin-off and govern the relationship between the parties after the Spin-off. Master Separation Agreement (“MSA”) The general terms and conditions relating to the separation and Spin-off are set forth in the MSA. The MSA identifies the assets transferred, liabilities assumed and contracts assigned either to Paragon Offshore by us or by Paragon Offshore to us in the separation and describes when and how these transfers, assumptions and assignments would occur. The MSA provides for, among other things, Paragon Offshore’s responsibility for liabilities relating to its business and the responsibility of Noble for liabilities related to our, and in certain limited cases, Paragon Offshore’s business, in each case irrespective of when the liability arose. The MSA also contains indemnification obligations and ongoing commitments by us and Paragon Offshore. Employee Matters Agreement (“EMA”) The EMA allocates liabilities and responsibilities between us and Paragon Offshore relating to employment, compensation and benefits and other employment related matters. Tax Sharing Agreement (“TSA”) The TSA provides for the allocation of tax liabilities and benefits between us and Paragon Offshore and governs the parties’ assistance with tax-related claims. Transition Services Agreements Under two transition services agreements, we agreed to continue, for a limited period of time, to provide various interim support services to Paragon Offshore, and Paragon Offshore agreed to provide various interim support services to us, including providing operational and administrative support for our remaining Brazilian operations. |
Consolidated Joint Ventures |
9 Months Ended |
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Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
Consolidated Joint Ventures | Consolidated Joint Ventures We maintain a 50 percent interest in two joint ventures, each with a subsidiary of Royal Dutch Shell plc (“Shell”), that own and operate the two Bully-class drillships. We have determined that we are the primary beneficiary of the joint ventures. Accordingly, we consolidate the entities in our consolidated financial statements after eliminating intercompany transactions. Shell’s equity interests are presented as noncontrolling interests on our Consolidated Balance Sheets. During the nine months ended September 30, 2016 and 2015, the Bully joint ventures approved and paid dividends totaling $124 million and $114 million, respectively. Of these amounts, 50 percent was paid to our joint venture partner. The combined carrying amount of the Bully-class drillships at both September 30, 2016 and December 31, 2015 totaled $1.4 billion. These assets were primarily funded through partner equity contributions. Cash held by the Bully joint ventures totaled approximately $51 million at September 30, 2016 as compared to approximately $50 million at December 31, 2015. |
Share Data |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Data | Share Data Earnings per share The following table sets forth the computation of basic and diluted earnings per share for Noble-UK:
Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the three months ended September 30, 2016 and 2015, approximately 1.5 million and 1.7 million shares underlying stock options, respectively, were excluded from the diluted earnings per share as such stock options were not dilutive. Share capital As of September 30, 2016, Noble-UK had approximately 243.2 million shares outstanding and trading as compared to approximately 242.0 million shares outstanding and trading at December 31, 2015. Our Board of Directors may increase our share capital through the issuance of up to 53 million authorized shares (at current nominal value of $0.01 per share) without obtaining shareholder approval. Our most recent quarterly dividend payment to shareholders, totaling approximately $5 million (or $0.02 per share), was declared on July 22, 2016 and paid on August 8, 2016 to holders of record on August 1, 2016. Our Board of Directors eliminated our quarterly cash dividend of $0.02 per share, beginning with the Company's fourth quarter dividend. The elimination of the dividend will provide approximately $20 million of additional liquidity on an annual basis based on the most recent dividend amount. The declaration and payment of dividends require authorization of the Board of Directors of Noble-UK, provided that such dividends on issued share capital may be paid only out of Noble-UK’s “distributable reserves” on its statutory balance sheet. Noble-UK is not permitted to pay dividends out of share capital, which includes share premiums. The resumption of the payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, contractual restrictions and other factors deemed relevant by our Board of Directors. Share repurchases Under UK law, the Company is only permitted to purchase its own shares by way of an “off-market purchase” in a plan approved by shareholders. In December 2014, we received shareholder approval to repurchase up to 37 million ordinary shares, or approximately 15 percent of our outstanding ordinary shares at the time of the shareholder approval. The authority to make such repurchases expired at the end of the Company’s 2016 annual general meeting of shareholders, which was held on April 22, 2016. During 2015, we repurchased 6.2 million of our ordinary shares covered by this authorization for a total cost of approximately $101 million. During the nine months ended September 30, 2016, we did not repurchase any of our shares. |
Contract Settlement and Termination Agreement with Freeport-McMoRan Inc |
9 Months Ended |
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Sep. 30, 2016 | |
Contract Settlement And Termination Agreement [Abstract] | |
Contract Settlement and Termination Agreement with Freeport-McMoRan Inc. | Contract Settlement and Termination Agreement with Freeport-McMoRan Inc. On May 10, 2016, Freeport-McMoRan Inc. (“FCX”), Freeport-McMoRan Oil & Gas LLC and one of our subsidiaries entered into an agreement terminating the contracts on the Noble Sam Croft and the Noble Tom Madden (“FCX Settlement”), which were scheduled to end in July 2017 and November 2017, respectively. For the nine months ended September 30, 2016, Noble recognized approximately $379 million in “Contract drilling services revenue” associated with the FCX Settlement, which included $348 million recorded as a termination fee and $31 million for the accelerated recognition of other deferred contractual items. For the nine months ended September 30, 2016, $11 million was recognized in “Contract drilling services expense” for the accelerated recognition of deferred mobilization and other expenses. Pursuant to the FCX Settlement, Noble may receive payments from FCX contingent upon the average price of oil over a 12 months period from June 30, 2016 through June 30, 2017. These contingent payments were not designated for hedge accounting treatment under FASB standards, and therefore, changes in fair value are recognized as either income or loss in the accompanying Consolidated Statements of Operations. For the nine months ended September 30, 2016, we recognized approximately $12.4 million in “Contract drilling services revenue,” related to the valuation of this contingent payment and during the three months ended September 30, 2016, we recognized a $5.2 million loss in “Contract drilling services revenue,” related to the valuation of this contingent payment. As of September 30, 2016, the estimated fair value of these contingent payments was $12.4 million which is included in “Prepaid expenses and other current assets” (see Note 11 for additional information). |
Receivables from Customers |
9 Months Ended |
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Sep. 30, 2016 | |
Receivables [Abstract] | |
Receivables from Customers | Receivables from Customers At September 30, 2016, we had receivables of approximately $14 million related to the Noble Max Smith, which are being disputed by our former customer, Petróleos Mexicanos (“Pemex”). These receivables have been classified as long-term and are included in “Other assets” on our Consolidated Balance Sheet. The disputed amounts relate to lost revenues for downtime that occurred after our rig was damaged when one of Pemex’s supply boats collided with our rig in 2010. In January 2012, we filed a lawsuit against Pemex in Mexican court seeking recovery of these amounts. While we can make no assurances as to the outcome of this dispute, we believe we are entitled to the disputed amounts. |
Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, at cost, as of September 30, 2016 and December 31, 2015 for Noble-UK consisted of the following:
Capital expenditures, including capitalized interest, totaled $592 million and $280 million for the nine months ended September 30, 2016 and 2015, respectively. Capitalized interest was $9 million and $16 million for the three and nine months ended September 30, 2016, respectively, as compared to $7 million and $18 million for the three and nine months ended September 30, 2015, respectively. We took delivery of our remaining newbuild project, the heavy-duty, harsh environment jackup, Noble Lloyd Noble, on July 15, 2016. The Noble Lloyd Noble is on the drilling location undergoing final acceptance testing under a four-year contract in the North Sea, and is expected to commence operations during the fourth quarter. During the nine months ended September 30, 2016, we completed the sale of certain corporate assets and the previously retired rigs, the jackup Noble Charles Copeland and the drillship Noble Discoverer. In connection with the sale of these assets, we received proceeds of approximately $23 million. Also during the nine months ended September 30, 2016, we recorded an impairment charge of $17 million as a result of our decision to dispose of certain capital spare equipment. |
Debt |
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Debt | Debt Our total debt consisted of the following at September 30, 2016 and December 31, 2015:
(1) In February 2016, as a result of a reduction in our debt rating below investment grade by Moody’s Investors Service, the interest rates on our Senior Notes due 2018, Senior Notes due 2025 and Senior Notes due 2045 were increased 1.00% each to 5.00%, 6.95% and 7.95%, respectively, effective the first day of each interest period after which the downgrade occurred. As a result of an additional downgrade by S&P Global Ratings in July 2016, the interest rates on these Senior Notes were further increased by 0.25% each to 5.25%, 7.20% and 8.20%, respectively, with the interest rate increase taking effect during the third quarter for the Senior Notes due 2018 and during the fourth quarter for the Senior Notes due 2025 and the Senior Notes due 2045. In accordance with our adoption of ASU No. 2015-3 on January 1, 2016, unamortized debt issuance costs related to our senior notes are shown as a direct reduction of the carrying amount of the related debt. The debt issuance costs previously included in “Other assets,” are included in either “Current maturities of long-term debt” or “Long-term debt” in the accompanying Consolidated Balance Sheets, based upon the maturity date of the respective senior notes. Credit Facility and Commercial Paper Program We currently have a five-year $2.4 billion senior unsecured credit facility that matures in January 2020. The credit facility provides us with the ability to issue up to $500 million in letters of credit. The issuance of letters of credit under the facility reduces the amount available for borrowing. At September 30, 2016, we had no letters of credit issued under the facility. During the three months ended September 30, 2016, we terminated our commercial paper program which had allowed us to issue up to $2.4 billion in unsecured commercial paper notes. This termination does not reduce the capacity under our credit facility. Our credit facility and certain of our senior notes, as discussed below, have provisions which vary the applicable interest rates based upon our credit ratings. Senior Unsecured Notes In February 2016, as a result of a reduction in our debt rating below investment grade by Moody’s Investors Service, the interest rates on our Senior Notes due 2018, Senior Notes due 2025 and Senior Notes due 2045 were increased 1.00% each to 5.00%, 6.95% and 7.95%, respectively, effective the first day of each interest period after which the downgrade occurred. As a result of an additional downgrade by S&P Global Ratings in July 2016, the interest rates on these Senior Notes were further increased by 0.25% each to 5.25%, 7.20% and 8.20%, respectively, with the interest rate increase taking effect during the third quarter for the Senior Notes due 2018 and during the fourth quarter for the Senior Notes due 2025 and the Senior Notes due 2045. The interest rates on these Senior Notes may be further increased if our debt rating were to be downgraded further (up to a maximum of an additional 75 basis points). Our other outstanding senior notes do not contain provisions varying applicable interest rates based upon our credit rating. In March 2016, we repaid our maturing $300 million 3.05% Senior Notes using cash on hand. In March 2016, we commenced cash tender offers for our 4.90% Senior Notes due 2020, of which $500 million principal amount was outstanding, and our 4.625% Senior Notes due 2021, of which $400 million principal amount was outstanding. On April 1, 2016, we purchased $36 million of these Senior Notes for $24 million, plus accrued interest, using cash on hand. As a result of this transaction, we recognized a net gain of approximately $11 million during the nine months ended September 30, 2016, which is reflected as “Gain on extinguishment of debt, net” in the accompanying Consolidated Statements of Operations. Our $300 million 2.50% Senior Notes mature during the first quarter of 2017. We anticipate using cash on hand to repay the outstanding balances. Covenants The credit facility is guaranteed by Noble Holding International Limited (“NHIL”) and Noble Holding Corporation (“NHC”). The credit facility contains a covenant that limits our ratio of debt to total tangible capitalization, as defined in the credit facility, to 0.60. At September 30, 2016, our ratio of debt to total tangible capitalization was approximately 0.35. We were in compliance with all covenants under the credit facility as of September 30, 2016. In addition to the covenants from the credit facility noted above, the indentures governing our outstanding senior unsecured notes contain covenants that place restrictions on certain merger and consolidation transactions, unless we are the surviving entity or the other party assumes the obligations under the indenture, and on the ability to sell or transfer all or substantially all of our assets. In addition, there are restrictions on incurring or assuming certain liens and on entering into sale and lease-back transactions. At September 30, 2016, we were in compliance with all of our debt covenants. We continually monitor compliance with the covenants under our notes and expect to remain in compliance during the remainder of 2016. Fair Value of Debt Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair value of our senior notes was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). All remaining fair value disclosures are presented in Note 12. The following table presents the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, as of September 30, 2016 and December 31, 2015, respectively:
(1) In February 2016, as a result of a reduction in our debt rating below investment grade by Moody’s Investors Service, the interest rates on our Senior Notes due 2018, Senior Notes due 2025 and Senior Notes due 2045 were increased 1.00% each to 5.00%, 6.95% and 7.95%, respectively, effective the first day of each interest period after which the downgrade occurred. As a result of an additional downgrade by S&P Global Ratings in July 2016, the interest rates on these Senior Notes were further increased by 0.25% each to 5.25%, 7.20% and 8.20%, respectively, with the interest rate increase taking effect during the third quarter for the Senior Notes due 2018 and during the fourth quarter for the Senior Notes due 2025 and the Senior Notes due 2045. |
Income Taxes |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At September 30, 2016, the reserves for uncertain tax positions totaled $172 million (net of related tax benefits of $1 million). If the September 30, 2016 reserves are not realized, the provision for income taxes would be reduced by $172 million. At December 31, 2015, the reserves for uncertain tax positions totaled $166 million (net of related tax benefits of $14 million). It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits. |
Employee Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Pension costs include the following components for the three months ended September 30, 2016 and 2015:
Pension costs include the following components for the nine months ended September 30, 2016 and 2015:
During the three and nine months ended September 30, 2016, we made contributions to our pension plans totaling approximately $0.1 million and $3 million, respectively. After the conclusion of the current period, we approved amendments, effective as of December 31, 2016, to our Retirement Restoration Plan, our two U.S. noncontributory defined benefit plans and our two pension plans for certain employees operating in the North Sea. With these amendments, employees and alternate payees will accrue no future benefits under the plans after December 31, 2016. However, these amendments will not affect any benefits earned through that date. We estimate we will incur a net curtailment charge of less than $1 million in the fourth quarter of 2016, and will reduce our net pension expense from approximately $11 million in the current year to an estimated net pension gain of approximately $1 million in 2017. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We periodically enter into derivative instruments to manage our exposure to fluctuations in foreign currency exchange rates. We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives. The FCX Settlement includes two contingent payments, which are further discussed below. We are accounting for these contingent payments as derivative instruments that do not qualify under the Financial Accounting Standards Board (“FASB”) standards for hedge accounting treatment, and therefore, changes in fair values are recognized as either income or loss in the accompanying Consolidated Statements of Operations. For foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the hedged item. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. Cash Flow Hedges Several of our regional shorebases, including our North Sea and Australian operations, have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we periodically enter into forward contracts, which settle monthly in the operations’ respective local currencies. All of these contracts have a maturity of less than 12 months. The forward contract settlements in the remainder of 2016 represent approximately 60 percent of these forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. Dollars, was approximately $15 million at September 30, 2016. Total unrealized losses related to these forward contracts were approximately $1 million as of September 30, 2016 and were recorded as part of “Accumulated other comprehensive loss” (“AOCL”). FCX Settlement As discussed in Note 5, pursuant to the FCX Settlement, Noble may receive contingent payments from FCX on September 30, 2017, depending on the average price of oil over a 12 months period from June 30, 2016 through June 30, 2017. The average price of oil will be calculated using the daily closing price of West Texas Intermediate crude oil (“WTI”) (CL1) on the New York Mercantile Exchange for the period of June 30, 2016 through June 30, 2017. If the price of WTI averages more than $50 per barrel during such period, FCX will pay $25 million to Noble. In addition to the $25 million contingent payment, if the price of WTI averages more than $65 per barrel during such period, FCX will pay an additional $50 million to Noble. These contingent payments do not qualify for hedge accounting treatment under FASB standards, and therefore, changes in fair values are recognized as either income or loss in the accompanying Consolidated Statements of Operations. These contingent payments are referred to as non-designated derivatives in the following tables. For the nine months ended September 30, 2016, we recognized approximately $12.4 million in “Contract drilling services revenue,” related to the valuation of this contingent payment and during the three months ended September 30, 2016, we recognized a $5.2 million loss in “Contract drilling services revenue,” related to the valuation of this contingent payment. As of September 30, 2016, the estimated fair value of these contingent payments was $12.4 million which is included in “Prepaid expenses and other current assets”. Financial Statement Presentation The following table, together with Note 12, summarizes the financial statement presentation and fair value of our derivative positions as of September 30, 2016 and December 31, 2015:
To supplement the fair value disclosures in Note 12, the following table summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or as “contract drilling services” revenue or expense for the three months ended September 30, 2016 and 2015:
To supplement the fair value disclosures in Note 12, the following table summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or as “contract drilling services” revenue or expense for the nine months ended September 30, 2016 and 2015:
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Fair Value of Financial Instruments |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The FASB guidance establishes a fair value hierarchy that distinguishes between assumptions based on market data from independent sources (“observable inputs”) and a reporting entity’s internal assumptions based upon the best information available when external market data is limited or unavailable (“unobservable inputs”). The fair value hierarchy under FASB guidance prioritizes inputs within three levels: Level 1: Valuations based on quoted prices in active markets for identical assets; Level 2: Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices in inactive markets and quoted prices in active markets for similar but not identical instruments; and Level 3: Valuations based on unobservable inputs. The following tables present the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:
Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying Consolidated Balance Sheets approximate fair value. The foreign currency forward contracts have been valued using actively quoted prices and quotes obtained from the counterparties to the contracts. The FCX Settlement has been valued using a Monte Carlo Simulation Model based on the following assumptions as of September 30, 2016:
The following table details the activity related to the FCX Settlement asset classified within Level 3 of the valuation hierarchy for the periods indicated:
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables set forth the components of, and changes in the accumulated balances for each component of, AOCL for the nine months ended September 30, 2016 and 2015. All amounts within the tables are shown net of tax.
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Commitments and Contingencies |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In December 2014, one of our subsidiaries reached a settlement with the U.S. Department of Justice (“DOJ”) regarding our former drillship, the Noble Discoverer, and the Kulluk, a rig we were providing contract labor services for, in respect of violations of applicable law discovered in connection with a 2012 Coast Guard inspection in Alaska and our own subsequent internal investigation. Under the terms of the agreement, the subsidiary pled guilty to oil record book, ballast record and required hazardous condition reporting violations with respect to the Noble Discoverer and an oil record book violation with respect to the Kulluk. The subsidiary paid $8.2 million in fines and $4 million in community service payments and was placed on probation for four years, provided that we may petition the court for early dismissal of probation after three years. If, during the term of probation, the subsidiary fails to adhere to the terms of the plea agreement, the DOJ may withdraw from the plea agreement and would be free to prosecute the subsidiary on all charges arising out of its investigation, including any charges dismissed pursuant to the terms of the plea agreement, as well as potentially other charges. We also implemented a comprehensive environmental compliance plan in connection with the settlement. We have used a commercial agent in Brazil in connection with our Petróleo Brasileiro S.A. (“Petrobras”) drilling contracts. We understand that this agent has represented a number of different companies in Brazil over many years, including several offshore drilling contractors. In November 2015, this agent pled guilty in Brazil in connection with the award of a drilling contract to a competitor and implicated a Petrobras official as part of a wider investigation of Petrobras’ business practices. Following news reports relating to the agent’s involvement in the Brazil investigation in connection with his activities with other companies, we have been conducting a review, which is now substantially complete, of our relationship with the agent and with Petrobras. We are in contact with the SEC, the Brazilian federal prosecutor’s office and the DOJ about this matter. We are cooperating with these agencies and they are aware of our internal review. To our knowledge, neither the agent, nor the government authorities investigating the matter, has alleged that the agent or Noble acted improperly in connection with our contracts with Petrobras. We are from time to time a party to various lawsuits that are incidental to our operations in which the claimants seek an unspecified amount of monetary damages for personal injury, including injuries purportedly resulting from exposure to asbestos on drilling rigs and associated facilities. At September 30, 2016, there were 42 asbestos related lawsuits in which we are one of many defendants. These lawsuits have been filed in the United States in the states of Louisiana and Mississippi. We intend to vigorously defend against the litigation. We do not believe the ultimate resolution of these matters will have a material adverse effect on our financial position, results of operations or cash flows. We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims. We operate in a number of countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We recognize uncertain tax positions that we believe have a greater than 50 percent likelihood of being sustained. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments. During 2014, the IRS began its examination of our tax reporting in the U.S. for the taxable years ended December 31, 2010 and 2011. We believe that we have accurately reported all amounts in our 2010 and 2011 tax returns. We believe the ultimate resolution of the IRS examination will not have a material adverse effect on our consolidated financial statements. Under the TSA entered into at the time of the Spin-off, Noble and Paragon Offshore are each responsible for the taxes that relate to their respective business (whether such taxes were incurred through a Noble-retained or a Paragon-retained entity) and provide a corresponding indemnity. In addition, in February 2016, we entered into an agreement in principle with Paragon Offshore relating to tax matters in Mexico described below in exchange for a full and unconditional release of any claims by Paragon Offshore in connection with the Spin-off (including any claims that could be brought on behalf of its creditors). The settlement agreement with Paragon Offshore, which was signed by the parties on April 29, 2016, is subject to the approval of Paragon Offshore's bankruptcy plan by the bankruptcy court. On October 28, 2016, the bankruptcy court having jurisdiction over the Paragon Offshore bankruptcy denied confirmation of Paragon Offshore’s bankruptcy plan. In the oral ruling, the judge noted that his decision to deny confirmation did not preclude Paragon Offshore from restructuring, only that they could not do so under the existing plan. Paragon Offshore has announced that it is evaluating its options. Audit claims of approximately $157 million attributable to income and other business taxes have been assessed against us in Mexico, as detailed below. Under our settlement agreement with Paragon Offshore, we agreed to assume the administration of Paragon Offshore’s Mexican income and value-added taxes for the years 2005 through 2010 and for Paragon Offshore’s Mexican customs taxes through 2010, as well as the related bonding obligations and certain of the tax related liabilities. In addition, under the agreement with Paragon Offshore, we agreed to (i) pay all of the ultimate resolved amount of Mexican income and value-added taxes related to Paragon Offshore’s business that were incurred through a Noble-retained entity, (ii) pay 50 percent of the ultimate resolved amount of Mexican income and value-added taxes related to Paragon Offshore’s business that were incurred through a Paragon Offshore-retained entity, (iii) pay 50 percent of the ultimate resolved amount of Mexican custom taxes related to Paragon Offshore’s business, and (iv) post any tax appeal bond that may be required to challenge a final assessment. Paragon Offshore also agreed to pay 50 percent of the third party costs incurred by us in the administration of the tax claims. Pursuant to an amendment agreed to on August 5, 2016 we have also agreed to allow Paragon Offshore to pay up to $5 million of the Mexican tax and administrative costs described above that become owed to us in the form of an interest bearing note, which will be due at the end of the four year period following the date of approval of Paragon Offshore's bankruptcy plan. Tax assessments of approximately $45 million for income and value-added taxes have been made against Noble entities in Mexico. Tax assessments for income and value-added taxes of approximately $183 million have been made against Paragon Offshore entities in Mexico, of which approximately $42 million relates to Noble’s business that operated through Paragon Offshore-retained entities in Mexico prior to the Spin-off. We will only be obligated to post a tax appeal bond in the event a final assessment is made by Mexican authorities. As of October 15, 2016, there have been $3 million in final assessments that have been bonded. In January 2015, Noble received an official notification of a ruling from the Second Chamber of the Supreme Court in Mexico. The ruling settled an ongoing dispute in Mexico relating to the classification of a Noble subsidiary’s business activity and the applicable rate of depreciation under the Mexican law applicable to the activities of that subsidiary. The ruling did not result in any additional tax liability to Noble. Additionally, the ruling is only applicable to the Noble subsidiary named in the ruling and, therefore, does not establish the depreciation rate applicable to the assets of other Noble subsidiaries. Under the recent agreement with Paragon Offshore, we agreed to be responsible for any tax liability ultimately incurred because these depreciation liabilities would be incurred by Noble-retained entities, and such amounts are reflected in the discussion of Mexican audit claims in the preceding paragraph. We will continue to contest future assessments received, and do not believe we are liable for additional tax. Paragon Offshore has received tax assessments of approximately $152 million attributable to income, customs and other business taxes in Brazil, of which $44 million relates to Noble’s business that operated through a Paragon Offshore-retained entity in Brazil prior to the Spin-off. Under the TSA, we must indemnify Paragon Offshore for all assessed amounts that are related to Noble’s Brazil business, approximately $44 million, if and when such payments become due. We have contested, or intend to contest or cooperate with Paragon Offshore in Brazil where it is contesting, the assessments described above, including through litigation if necessary, and we believe the ultimate resolution, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions or our ability to collect indemnities from Paragon Offshore under the TSA or the recent agreement with Paragon Offshore. We have been notified by Petrobras that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during 2008 and 2009. Petrobras has also notified us that if Petrobras must ultimately pay such withholding taxes, it will seek reimbursement from us for the portion allocable to our drilling rigs. The amount of withholding tax that Petrobras indicates may be allocable to Noble drilling rigs is approximately $24 million. We believe that our contract with Petrobras requires Petrobras to indemnify us for these withholding taxes. We will, if necessary, vigorously defend our rights. We maintain certain insurance coverage against specified marine perils, which includes physical damage and loss of hire to our drilling rigs along with other associated coverage common in our industry. We maintain a physical damage deductible on our rigs of $25 million per occurrence. With respect to the U.S. Gulf of Mexico, hurricane risk has generally resulted in more restrictive and expensive coverage for U.S. named windstorm perils, and we have opted in certain years to maintain limited or no windstorm coverage. Our current program provides for $500 million in named windstorm coverage in the U.S. Gulf of Mexico. For the Noble Bully I, our customer assumes the risk of loss due to a named windstorm event, pursuant to the terms of the drilling contract, through the purchase of insurance coverage (provided that we are responsible for any deductible under such policy) or, at its option, the assumption of the risk of loss up to the insured value in lieu of the purchase of such insurance. The loss of hire coverage applies only to our rigs operating under contract with a dayrate equal to or greater than $200,000 a day and is subject to a 45-day waiting period for each unit and each occurrence. Although we maintain insurance in the geographic areas in which we operate, pollution, reservoir damage and environmental risks generally are not fully insurable. Our insurance policies and contractual rights to indemnity may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage or rights to indemnity for all risks, including loss of hire insurance on most of the rigs in our fleet. Uninsured exposures may include expatriate activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to shore-based terrorist acts, strikes or cyber risks. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could materially adversely affect our financial position, results of operations or cash flows. Additionally, there can be no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able to indemnify us against all these risks. We carry protection and indemnity insurance covering marine third party liability exposures, which also includes coverage for employer’s liability resulting from personal injury to our offshore drilling crews. Our protection and indemnity policy currently has a standard deductible of $10 million per occurrence, with maximum liability coverage of $750 million. In connection with our capital expenditure program as of September 30, 2016, we had outstanding commitments, including shipyard and purchase commitments of approximately $88 million. We have entered into agreements with certain of our executive officers, as well as certain other employees. These agreements become effective upon a change of control of Noble-UK (within the meaning set forth in the agreements) or a termination of employment in connection with or in anticipation of a change of control, and remain effective for three years thereafter. These agreements provide for compensation and certain other benefits under such circumstances. |
Accounting Pronouncements |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements | Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-9, which creates Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, ASU No. 2014-9 supersedes the cost guidance in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts,” and creates new Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers.” In summary, the core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Companies are allowed to select between two transition methods: (1) a full retrospective transition method with the application of the new guidance to each prior reporting period presented, or (2) a retrospective transition method that recognizes the cumulative effect on prior periods at the date of adoption together with additional footnote disclosures. The amendments in ASU No. 2014-9 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and early application is permitted for periods beginning after December 15, 2016. A number of amendments have been issued in connection with ASU No. 2014-9, all of which are effective upon adoption of Topic 606. In March 2016 and April 2016, the FASB issued clarification amendments ASU No. 2016-8 and ASU No. 2016-10 which clarify the implementation guidance on principle versus agent considerations and identify performance obligations and the licensing implementation guidance, respectively. In May 2016, the FASB issued ASU No. 2016-11 and ASU No. 2016-12 which rescind certain SEC Staff Observer comments that are codified in Topic 605, “Revenue Recognition,” and Topic 932, “Extractive Activities—Oil and Gas” and provide improvements to narrow aspects of ASU No. 2014-9, respectively. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and have not made any decision on the method of adoption. In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation-Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In August 2014, the FASB issued ASU No. 2014-15, which amends ASC Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern.” The amendments in this ASU provide guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this guidance is not anticipated to have a material impact on our financial condition, results of operations, cash flows or financial disclosures. In January 2015, the FASB issued ASU No. 2015-1, which amends ASC Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items.” The amendment in this ASU eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In February 2015, the FASB issued ASU No. 2015-2, which amends ASC Subtopic 810, “Consolidations.” This amendment affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; eliminate the presumption that a general partner should consolidate a limited partnership; affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. The standard may be applied retrospectively or through a cumulative effect adjustment to retained earnings as of the beginning of the year of adoption. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In April 2015, the FASB issued ASU No. 2015-3, which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance requires debt issuance costs to be presented in the balance sheet as a direct reduction from the associated debt liability. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. In August 2015, the FASB issued ASU No. 2015-15 which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance allows a debt issuance cost related to a line-of-credit to be presented in the balance sheet as an asset and subsequently amortized ratably over the term of the line-of credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new guidance is applied on a retrospective basis. In accordance with our adoption of ASU No. 2015-3, unamortized debt issuance costs related to our senior notes of approximately $26 million as of December 31, 2015, which were previously included in “Other assets,” are included in either “Current maturities of long-term debt” or “Long-term debt” in the accompanying Consolidated Balance Sheets, based upon the maturity date of the respective senior notes. In April 2015, the FASB issued ASU No. 2015-4, which amends ASC Topic 715, “Compensation – Retirement Benefits.” The guidance gives an employer whose fiscal year end does not coincide with a calendar month end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month end that is closest to its fiscal year end. The ASU also provides a similar practical expedient for interim remeasurements of significant events. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In July 2015, the FASB issued ASU No. 2015-12, which amends ASC Topic 960, “Plan Accounting-Defined Benefit Pension Plans,” ASC Topic 962, “Defined Contribution Pension Plans” and ASC Topic 965, “Health and Welfare Benefit Plans.” There are three parts to the ASU that aim to simplify the accounting and presentation of plan accounting. Part I of this ASU requires fully benefit-responsive investment contracts to be measured at contract value instead of the current fair value measurement. Part II of this ASU requires investments (both participant-directed and nonparticipant-directed investments) of employee benefit plans be grouped only by general type, eliminating the need to disaggregate the investments in multiple ways. Part III of this ASU provides a similar measurement date practical expedient for employee benefit plans as available in ASU No. 2015-4, which allows employers to measure defined benefit plan assets on a month-end date that is nearest to the year’s fiscal year-end when the fiscal period does not coincide with a month-end. Parts I and II of the new guidance should be applied on a retrospective basis. Part III of the new guidance should be applied on a prospective basis. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In September 2015, the FASB issued ASU 2015-16, which amends Topic 805, “Business Combinations.” This amendment eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination at the acquisition date with a corresponding adjustment to goodwill, and revise comparative information for prior periods presented in financial statements. Those adjustments are required when new information about circumstances that existed as of the acquisition date would have affected the measurement of the amount initially recognized. This update requires an entity to recognize these adjustments in the reporting period in which the adjustment amounts are determined. An acquirer must record the effect on earnings of changes in depreciation, amortization, or other income effects, calculated as if the accounting had been completed at the acquisition date. An entity must present separately on the face of the income statement, or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In November 2015, the FASB issued ASU No. 2015-17, which amends ASC Topic 740, “Income Taxes.” This amendment aligns the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. International Accounting Standard 1, Presentation of Financial Statements, requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets be offset and presented as a single amount is not affected by the amendments in this update. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In March 2016, the FASB issued ASU No. 2016-5, which amends ASC Topic 815, “Derivatives and Hedging.” This amendment clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016 and may be applied on either a prospective basis or a modified retrospective basis. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In March 2016, the FASB issued ASU No. 2016-9, which amends ASC Topic 718, “Compensation – Stock Compensation.” This amendment simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2016, the FASB issued ASU No. 2016-15 which amends ASC Topic 230, “Classification of Certain Cash Receipts and Cash Payments.” The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The update outlines the classification of specific transactions as either cash inflows or outflows from financing activities, operating activities, investing activities or non-cash activities. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. |
Supplemental Financial Information |
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Supplemental Financial Information | Supplemental Financial Information Consolidated Balance Sheets Information Deferred revenues from drilling contracts totaled $140 million and $180 million at September 30, 2016 and December 31, 2015, respectively. Such amounts are included in either “Other current liabilities” or “Other liabilities” in the accompanying Consolidated Balance Sheets, based upon our expected time of recognition. Related expenses deferred under drilling contracts totaled $54 million at September 30, 2016 as compared to $78 million at December 31, 2015, and are included in either “Prepaid expenses and other current assets” or “Other assets” in the accompanying Consolidated Balance Sheets, based upon our expected time of recognition. In April 2015, we agreed to contract dayrate reductions for five rigs working for Saudi Arabian Oil Company (“Saudi Aramco”), which were effective from January 1, 2015 through December 31, 2015. During the first quarter of 2016, we agreed to further contract dayrate reductions for the remaining four contracted rigs through the end of 2016. Given current market conditions and based on discussions with the customer, we do not expect the rates to return to the original contract rates. In accordance with accounting guidance, we are recognizing the reductions on a straight-line basis over the remaining life of the existing Saudi Aramco contracts. At September 30, 2016 and December 31, 2015, revenues recorded in excess of billings as a result of this recognition totaled $22 million and $53 million, respectively, and are included in either “Prepaid expenses and other current assets” or “Other assets” in the accompanying Consolidated Balance Sheets, based upon our expected time of recognition. Consolidated Statements of Cash Flows Information The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows.
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Information about Noble-Cayman |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Noble-Cayman | Information about Noble-Cayman Guarantees of Registered Securities Noble-Cayman, or one or more wholly-owned subsidiaries of Noble-Cayman, are a co-issuer or full and unconditional guarantor or otherwise obligated as of September 30, 2016 as follows:
The following condensed consolidating financial statements of Noble-Cayman, NHC, NDH, NHIL, NDS6 and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting. NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS) Nine months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME and COMPREHENSIVE INCOME Three months Ended September 30, 2015 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME and COMPREHENSIVE INCOME Nine months Ended September 30, 2015 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months Ended September 30, 2015 (in thousands) (Unaudited)
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Accounting Pronouncements (Policies) |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-9, which creates Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, ASU No. 2014-9 supersedes the cost guidance in Subtopic 605-35, “Revenue Recognition—Construction-Type and Production-Type Contracts,” and creates new Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers.” In summary, the core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Companies are allowed to select between two transition methods: (1) a full retrospective transition method with the application of the new guidance to each prior reporting period presented, or (2) a retrospective transition method that recognizes the cumulative effect on prior periods at the date of adoption together with additional footnote disclosures. The amendments in ASU No. 2014-9 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and early application is permitted for periods beginning after December 15, 2016. A number of amendments have been issued in connection with ASU No. 2014-9, all of which are effective upon adoption of Topic 606. In March 2016 and April 2016, the FASB issued clarification amendments ASU No. 2016-8 and ASU No. 2016-10 which clarify the implementation guidance on principle versus agent considerations and identify performance obligations and the licensing implementation guidance, respectively. In May 2016, the FASB issued ASU No. 2016-11 and ASU No. 2016-12 which rescind certain SEC Staff Observer comments that are codified in Topic 605, “Revenue Recognition,” and Topic 932, “Extractive Activities—Oil and Gas” and provide improvements to narrow aspects of ASU No. 2014-9, respectively. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and have not made any decision on the method of adoption. In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation-Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In August 2014, the FASB issued ASU No. 2014-15, which amends ASC Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern.” The amendments in this ASU provide guidance related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this guidance is not anticipated to have a material impact on our financial condition, results of operations, cash flows or financial disclosures. In January 2015, the FASB issued ASU No. 2015-1, which amends ASC Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items.” The amendment in this ASU eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In February 2015, the FASB issued ASU No. 2015-2, which amends ASC Subtopic 810, “Consolidations.” This amendment affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; eliminate the presumption that a general partner should consolidate a limited partnership; affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. The standard may be applied retrospectively or through a cumulative effect adjustment to retained earnings as of the beginning of the year of adoption. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In April 2015, the FASB issued ASU No. 2015-3, which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance requires debt issuance costs to be presented in the balance sheet as a direct reduction from the associated debt liability. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. In August 2015, the FASB issued ASU No. 2015-15 which amends ASC Subtopic 835-30, “Interest – Imputation of Interest.” The guidance allows a debt issuance cost related to a line-of-credit to be presented in the balance sheet as an asset and subsequently amortized ratably over the term of the line-of credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new guidance is applied on a retrospective basis. In accordance with our adoption of ASU No. 2015-3, unamortized debt issuance costs related to our senior notes of approximately $26 million as of December 31, 2015, which were previously included in “Other assets,” are included in either “Current maturities of long-term debt” or “Long-term debt” in the accompanying Consolidated Balance Sheets, based upon the maturity date of the respective senior notes. In April 2015, the FASB issued ASU No. 2015-4, which amends ASC Topic 715, “Compensation – Retirement Benefits.” The guidance gives an employer whose fiscal year end does not coincide with a calendar month end the ability, as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month end that is closest to its fiscal year end. The ASU also provides a similar practical expedient for interim remeasurements of significant events. The standard is effective for interim and annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In July 2015, the FASB issued ASU No. 2015-12, which amends ASC Topic 960, “Plan Accounting-Defined Benefit Pension Plans,” ASC Topic 962, “Defined Contribution Pension Plans” and ASC Topic 965, “Health and Welfare Benefit Plans.” There are three parts to the ASU that aim to simplify the accounting and presentation of plan accounting. Part I of this ASU requires fully benefit-responsive investment contracts to be measured at contract value instead of the current fair value measurement. Part II of this ASU requires investments (both participant-directed and nonparticipant-directed investments) of employee benefit plans be grouped only by general type, eliminating the need to disaggregate the investments in multiple ways. Part III of this ASU provides a similar measurement date practical expedient for employee benefit plans as available in ASU No. 2015-4, which allows employers to measure defined benefit plan assets on a month-end date that is nearest to the year’s fiscal year-end when the fiscal period does not coincide with a month-end. Parts I and II of the new guidance should be applied on a retrospective basis. Part III of the new guidance should be applied on a prospective basis. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In September 2015, the FASB issued ASU 2015-16, which amends Topic 805, “Business Combinations.” This amendment eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination at the acquisition date with a corresponding adjustment to goodwill, and revise comparative information for prior periods presented in financial statements. Those adjustments are required when new information about circumstances that existed as of the acquisition date would have affected the measurement of the amount initially recognized. This update requires an entity to recognize these adjustments in the reporting period in which the adjustment amounts are determined. An acquirer must record the effect on earnings of changes in depreciation, amortization, or other income effects, calculated as if the accounting had been completed at the acquisition date. An entity must present separately on the face of the income statement, or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment had been recognized as of the acquisition date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this guidance did not have an impact on our financial condition, results of operations, cash flows or financial disclosures. In November 2015, the FASB issued ASU No. 2015-17, which amends ASC Topic 740, “Income Taxes.” This amendment aligns the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. International Accounting Standard 1, Presentation of Financial Statements, requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets be offset and presented as a single amount is not affected by the amendments in this update. The standard is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In February 2016, the FASB issued ASU No. 2016-2, which creates ASC Topic 842, “Leases.” This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In March 2016, the FASB issued ASU No. 2016-5, which amends ASC Topic 815, “Derivatives and Hedging.” This amendment clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016 and may be applied on either a prospective basis or a modified retrospective basis. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In March 2016, the FASB issued ASU No. 2016-9, which amends ASC Topic 718, “Compensation – Stock Compensation.” This amendment simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. In August 2016, the FASB issued ASU No. 2016-15 which amends ASC Topic 230, “Classification of Certain Cash Receipts and Cash Payments.” The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The update outlines the classification of specific transactions as either cash inflows or outflows from financing activities, operating activities, investing activities or non-cash activities. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. |
Share Data (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share for Noble-UK | The following table sets forth the computation of basic and diluted earnings per share for Noble-UK:
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Property and Equipment (Tables) |
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Property and Equipment, at Cost | Property and equipment, at cost, as of September 30, 2016 and December 31, 2015 for Noble-UK consisted of the following:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Our total debt consisted of the following at September 30, 2016 and December 31, 2015:
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Estimated Fair Value of Our Long-Term Debt, not Including Effect of Unamortized Debt Issuance Costs | The following table presents the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, as of September 30, 2016 and December 31, 2015, respectively:
(1) In February 2016, as a result of a reduction in our debt rating below investment grade by Moody’s Investors Service, the interest rates on our Senior Notes due 2018, Senior Notes due 2025 and Senior Notes due 2045 were increased 1.00% each to 5.00%, 6.95% and 7.95%, respectively, effective the first day of each interest period after which the downgrade occurred. As a result of an additional downgrade by S&P Global Ratings in July 2016, the interest rates on these Senior Notes were further increased by 0.25% each to 5.25%, 7.20% and 8.20%, respectively, with the interest rate increase taking effect during the third quarter for the Senior Notes due 2018 and during the fourth quarter for the Senior Notes due 2025 and the Senior Notes due 2045. |
Employee Benefit Plans (Tables) |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Costs | Pension costs include the following components for the three months ended September 30, 2016 and 2015:
Pension costs include the following components for the nine months ended September 30, 2016 and 2015:
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Derivative Instruments and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarization of Financial Statement Presentation and Fair Value of Derivative Positions | The following table, together with Note 12, summarizes the financial statement presentation and fair value of our derivative positions as of September 30, 2016 and December 31, 2015:
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Summarization of Recognized Gains and Losses of Cash Flow Hedges | To supplement the fair value disclosures in Note 12, the following table summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or as “contract drilling services” revenue or expense for the three months ended September 30, 2016 and 2015:
To supplement the fair value disclosures in Note 12, the following table summarizes the recognized gains and losses of cash flow hedges and non-designated derivatives through AOCL or as “contract drilling services” revenue or expense for the nine months ended September 30, 2016 and 2015:
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount and Estimated Fair Value of Financial Instruments | The following tables present the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis:
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Valuation Assumptions Using Carlo Simulation Model | The FCX Settlement has been valued using a Monte Carlo Simulation Model based on the following assumptions as of September 30, 2016:
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Schedule of Activity Related to FCX Settlement Asset | The following table details the activity related to the FCX Settlement asset classified within Level 3 of the valuation hierarchy for the periods indicated:
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Accumulated Other Comprehensive Loss (Tables) |
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in AOCL by Component | The following tables set forth the components of, and changes in the accumulated balances for each component of, AOCL for the nine months ended September 30, 2016 and 2015. All amounts within the tables are shown net of tax.
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Supplemental Financial Information (Tables) |
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Supplemental Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Changes in Other Assets and Liabilities on Cash Flows from Operating Activities | The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows.
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Information about Noble-Cayman (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor Obligations | Noble-Cayman, or one or more wholly-owned subsidiaries of Noble-Cayman, are a co-issuer or full and unconditional guarantor or otherwise obligated as of September 30, 2016 as follows:
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Condensed Consolidating Balance Sheet | The following condensed consolidating financial statements of Noble-Cayman, NHC, NDH, NHIL, NDS6 and all other subsidiaries present investments in both consolidated and unconsolidated affiliates using the equity method of accounting. NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 (in thousands) (Unaudited)
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Condensed Consolidating Statement of Income | NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS and COMPREHENSIVE INCOME (LOSS) Nine months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME and COMPREHENSIVE INCOME Three months Ended September 30, 2015 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF INCOME and COMPREHENSIVE INCOME Nine months Ended September 30, 2015 (in thousands) (Unaudited)
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Condensed Consolidating Statement of Cash Flows | NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months Ended September 30, 2016 (in thousands) (Unaudited)
NOBLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine months Ended September 30, 2015 (in thousands) (Unaudited)
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Organization and Basis of Presentation - Additional Information (Detail) $ in Millions |
12 Months Ended | |
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Dec. 31, 2015
USD ($)
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Sep. 30, 2016
Vessel
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of jackups | 14 | |
Number of drillships | 8 | |
Number of semisubmersibles | 8 | |
Prior period reclassification adjustment | $ | $ 26 |
Spin-off of Paragon Offshore plc ("Paragon Offshore") - Additional Information (Detail) |
9 Months Ended |
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Sep. 30, 2016
Agreement
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Discontinued Operations and Disposal Groups [Abstract] | |
Number of transition services agreements | 2 |
Consolidated Joint Ventures - Additional Information (Detail) $ in Thousands |
9 Months Ended | |||
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Sep. 30, 2016
USD ($)
Rig
JointVenture
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Sep. 30, 2015
USD ($)
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Dec. 31, 2015
USD ($)
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Dec. 31, 2014
USD ($)
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Schedule Of Equity Method Investments [Line Items] | ||||
Percent of interest in joint ventures | 50.00% | |||
Number of joint ventures acquired | JointVenture | 2 | |||
Number of bully class drillships | Rig | 2 | |||
Carrying amount of the drillships | $ 1,400,000 | $ 1,400 | ||
Cash held by Bully joint venture | 426,052 | $ 164,430 | 512,245 | $ 68,510 |
Bully Joint Venture [Member] | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Dividend paid by Bully Joint Venture Partners | 124,000 | $ 114,000 | ||
Cash held by Bully joint venture | $ 51,000 | $ 50,000 |
Share Data - Computation of Basic and Diluted Earnings Per Share for Noble-UK (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||
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Jul. 22, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Basic | |||||
Net income (loss) attributable to Noble-UK | $ (55,081) | $ 325,807 | $ 373,270 | $ 663,241 | |
Earnings allocated to unvested share-based payment awards | 0 | (7,143) | (13,415) | (14,661) | |
Net income (loss) to common shareholders - basic | (55,081) | 318,664 | 359,855 | 648,580 | |
Diluted | |||||
Net income (loss) attributable to Noble-UK | (55,081) | 325,807 | 373,270 | 663,241 | |
Earnings allocated to unvested share-based payment awards | 0 | (7,143) | (13,415) | (14,661) | |
Net income (loss) to common shareholders - diluted | $ (55,081) | $ 318,664 | $ 359,855 | $ 648,580 | |
Denominator: | |||||
Weighted average shares outstanding - basic | 243,224 | 241,970 | 243,089 | 242,204 | |
Weighted average shares outstanding - diluted | 243,224 | 241,970 | 243,089 | 242,204 | |
Weighted average unvested share-based payment awards | 0 | 5,424 | 9,062 | 5,475 | |
Basic (usd per share) | $ (0.23) | $ 1.32 | $ 1.48 | $ 2.68 | |
Diluted: (usd per share) | (0.23) | 1.32 | 1.48 | 2.68 | |
Dividends per share (usd per share) | $ 0.02 | $ 0.02 | $ 0.375 | $ 0.19 | $ 1.125 |
Receivables from Customers - Additional Information (Detail) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Petroleos Mexicanos [Member] | Other Assets [Member] | |
Accounts Notes And Loans Receivable [Line Items] | |
Approximate receivable | $ 14 |
Property and Equipment - Property and Equipment, at Cost (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 14,604,796 | $ 14,056,323 |
Drilling Equipment and Facilities [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 13,536,979 | 13,074,804 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 864,140 | 761,347 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 203,677 | $ 220,172 |
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 15, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Property, Plant and Equipment [Abstract] | |||||
Capital expenditures | $ 592,038 | $ 280,048 | |||
Capitalized interest on construction-in-progress | $ 9,000 | $ 7,000 | 16,000 | 18,000 | |
Property, Plant and Equipment [Line Items] | |||||
Proceeds from sale of rigs | 23,390 | 2,535 | |||
Loss on impairment of certain capital spare equipment | $ 0 | $ 0 | $ 16,616 | $ 0 | |
Drilling Equipment and Facilities [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Newbuild project, term of contract | 4 years |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Reserves for uncertain tax positions net | $ 172 | $ 166 |
Related tax benefits | 1 | $ 14 |
Reduction in the provision for income taxes, if reserves not realized | $ 172 | |
Operational period | 12 months |
Employee Benefit Plans - Pension Costs (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Non-U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 763 | $ 862 | $ 2,337 | $ 2,582 |
Interest cost | 589 | 653 | 1,864 | 1,927 |
Return on plan assets | (828) | (942) | (2,627) | (2,779) |
Amortization of prior service cost | 25 | 26 | 78 | 79 |
Recognized net actuarial loss | 35 | 80 | 110 | 235 |
Net pension expense | 584 | 679 | 1,762 | 2,044 |
U.S. Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1,662 | 2,149 | 4,986 | 6,447 |
Interest cost | 2,389 | 2,300 | 7,167 | 6,899 |
Return on plan assets | (3,097) | (3,286) | (9,291) | (9,859) |
Amortization of prior service cost | 30 | 36 | 88 | 107 |
Recognized net actuarial loss | 1,099 | 1,539 | 3,299 | 4,618 |
Net pension expense | $ 2,083 | $ 2,738 | $ 6,249 | $ 8,212 |
Employee Benefit Plans - Additional Information (Detail) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
plan
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
plan
|
|
Compensation and Retirement Disclosure [Abstract] | |||||
Employer contributions | $ 0.1 | $ 3.0 | |||
Forecast [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected curtailment charge | $ 1.0 | ||||
Pension expense (gain) | $ (1.0) | $ 11.0 | |||
U.S. Defined Benefit Plans [Member] | Subsequent Event [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of plans to be amended | plan | 2 | 2 | |||
Pension Plans in North Sea [Member] | Subsequent Event [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of plans to be amended | plan | 2 | 2 |
Derivative Instruments and Hedging Activities - Summarization of Financial Statement Presentation and Fair Value of Derivative Positions (Detail) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Short-Term Foreign Currency Forward Contracts [Member] | Prepaid Expenses and Other Current Assets [Member] | |
Asset derivatives | |
Cash flow hedges Short-term foreign currency forward contracts | $ 329 |
Short-Term Foreign Currency Forward Contracts [Member] | Other Current Liabilities [Member] | |
Liability derivatives | |
Cash flow hedges Short-term foreign currency forward contracts | 934 |
FCX settlement [Member] | Other Assets [Member] | |
Asset derivatives | |
Non-designated derivatives FCX settlement | $ 12,406 |
Derivative Instruments and Hedging Activities - Summarization of Recognized Gains and Losses of Cash Flow Hedges (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Foreign Currency Forward Contracts [Member] | Cash Flow Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(loss) recognized through AOCL | $ (65) | $ (747) | $ (447) | $ (143) |
Foreign Currency Forward Contracts [Member] | Contract Drilling Services [Member] | Cash Flow Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(loss) reclassified from AOCL to "contract drilling services" expense | (540) | $ (615) | (158) | $ (1,219) |
Not Designated as Hedging Instrument [Member] | Contract Drilling Services [Member] | FCX settlement [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain/(loss) recognized through contract drilling services revenue | $ (5,194) | $ 12,406 |
Fair Value of Financial Instruments - Carrying Amount and Estimated Fair Value of Financial Instruments (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Quoted Prices in Active Markets (Level 1) [Member] | ||
Assets - | ||
Marketable securities | $ 6,472 | $ 6,352 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets - | ||
Foreign currency forward contracts | 329 | |
Liabilities - | ||
Foreign currency forward contracts | 934 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets - | ||
FCX Settlement | 12,406 | |
Carrying Amount [Member] | ||
Assets - | ||
Marketable securities | 6,472 | $ 6,352 |
Foreign currency forward contracts | 329 | |
FCX Settlement | 12,406 | |
Liabilities - | ||
Foreign currency forward contracts | $ 934 |
Fair Value of Financial Instruments - Valuation Assumptions Using Carlo Simulation Model (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
| |
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | |
Expected volatility | 46.83% |
Mean-reversion rate | 2.80% |
Discount rate | 3.00% |
Underlying spot price | $ 48.24 |
Fair Value of Financial Instruments Fair Value of Financial Instruments - Settlement Asset from FCX (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
|
Business Combination, Contingent Consideration, Asset [Roll Forward] | |||
Beginning balance | $ 17,600 | $ 0 | $ 0 |
Fair value recognized in earnings | (5,194) | 17,600 | 0 |
Ending balance | $ 12,406 | $ 17,600 | $ 0 |
Accounting Pronouncements - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Prior period reclassification adjustment | $ 26 |
Supplemental Financial Information - Additional Information (Detail) $ in Millions |
Sep. 30, 2016
USD ($)
|
Mar. 31, 2016
Rig
|
Dec. 31, 2015
USD ($)
|
Apr. 30, 2015
Rig
|
---|---|---|---|---|
Schedule Of Supplemental Financial Information [Line Items] | ||||
Deferred revenues under drilling contracts | $ 140 | $ 180 | ||
Deferred expenses under drilling contracts | 54 | 78 | ||
Aramco [Member] | ||||
Schedule Of Supplemental Financial Information [Line Items] | ||||
Number of rigs | Rig | 4 | 5 | ||
Aramco [Member] | Prepaid Expenses and Other Current Assets or Other Assets [Member] | ||||
Schedule Of Supplemental Financial Information [Line Items] | ||||
Revenues recorded in excess of billings | $ 22 | $ 53 |
Supplemental Financial Information - Effect of Changes in Other Assets and Liabilities on Cash Flows from Operating Activities (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Operating Capital [Line Items] | ||
Accounts receivable | $ 179,364 | $ 38,695 |
Other current assets | 91,606 | 48,548 |
Other assets | 27,805 | 61,610 |
Accounts payable | (70,778) | (20,666) |
Other current liabilities | (70,943) | (2,733) |
Other liabilities | (25,581) | (22,155) |
Net change in other assets and liabilities | 131,473 | 103,299 |
Noble-Cayman [Member] | ||
Operating Capital [Line Items] | ||
Accounts receivable | 179,364 | 38,695 |
Other current assets | 89,858 | 28,415 |
Other assets | 25,724 | 41,314 |
Accounts payable | (68,909) | (18,743) |
Other current liabilities | (66,202) | 11,295 |
Other liabilities | (26,924) | (22,155) |
Net change in other assets and liabilities | $ 132,911 | $ 78,821 |
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