Revenue and Customers

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue and Customers

Note 9— Revenue and Customers

Contract Balances

Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically range from 30 to 60 days. Current contract asset and liability balances are included in “Prepaid expenses and other current assets” and “Other current liabilities,” respectively, and noncurrent contract assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on our Condensed Consolidated Balance Sheets.

The following table provides information about contract assets and contract liabilities from contracts with customers:

	Successor		Predecessor
	March 31, 2021		December 31, 2020
Current contract assets	$	846	$	10,687
Noncurrent contract assets	—		3,174
Total contract assets	846		13,861
Current contract liabilities (deferred revenue)	(2,845)		(34,990)
Noncurrent contract liabilities (deferred revenue)	(8,571)		(24,896)
Total contract liabilities	$	(11,416)	$	(59,886)

Significant changes in the remaining performance obligation contract assets and the contract liabilities balances for the three months ended March 31, 2021 and 2020 are as follows:

	Contract Assets		Contract Liabilities
Net balance at 12/31/2019 (Predecessor)	$	30,800	$	(65,055)
Amortization of deferred costs	(8,799)		—
Additions to deferred costs	2,578		—
Amortization of deferred revenue	—		15,828
Additions to deferred revenue	—		(19,479)
Total	(6,221)		(3,651)
Net balance at 3/31/2020 (Predecessor)	$	24,579	$	(68,706)
Net balance at 12/31/2020 (Predecessor)	$	13,861	$	(59,886)
Amortization of deferred costs	(1,607)		—
Additions to deferred costs	432		—
Amortization of deferred revenue	—		4,142
Additions to deferred revenue	—		(25,479)
Fresh start accounting revaluation	(12,686)		72,936
Total	$	(13,861)	$	51,599
Net balance at 2/5/21 (Predecessor)	$	—	$	(8,287)
Net balance at 2/6/21 (Successor)	$	—	$	(8,287)
Additions to deferred costs	888		—
Amortization of deferred costs	(42)		—
Amortization of deferred revenue	—		—
Additions to deferred revenue	—		(3,129)
Total	846		(3,129)
Net balance at 3/31/2021 (Successor)	$	846	$	(11,416)

Customer Contract Intangible Assets

Upon emergence from the Chapter 11 Cases, the Company recognized a fair value adjustment of $113.4 million related to intangible assets for certain favorable customer contracts. These intangible assets will be amortized as a reduction of contract drilling services revenue for the remainder of the contracts, 18 months and 32 months, respectively. As of March 31, 2021, the net carrying amount was $104.9 million, $113.4 million gross less $8.5 million accumulated amortization. The expected remaining amortization is as follows: $43.1 million for the nine-month period ending December 31, 2021 and $43.5 million and $18.3 million for the years ending December 31, 2022 and 2023, respectively.We assess the recoverability of the unamortized balance when indicators of impairment are present. Should the review indicate that the carrying value is not fully recoverable, the portion not fully recoverable would be recognized as an impairment loss.

Transaction Price Allocated to the Remaining Performance Obligations

The following table reflects revenue expected to be recognized in the future related to unsatisfied performance obligations, by rig type, as of March 31, 2021:    

	For the Years Ended December 31,
	2021 (1)		2022		2023		2024		2025 and beyond		Total
Floaters	$	56	$	11,309	$	51	$	—	$	—	$	11,416
Jackups	—		—		—		—		—		—
Total	$	56	$	11,309	$	51	$	—	$	—	$	11,416

(1) Represents a nine-month period beginning April 1, 2021.

The revenue included above consists of expected mobilization, demobilization, and upgrade revenue for unsatisfied performance obligations. The amounts are derived from the specific terms within drilling contracts that contain such provisions, and the expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract based on information known at March 31, 2021. The actual timing of recognition of such amounts may vary due to factors outside of our control. We have taken the optional exemption, permitted by accounting standards, to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance obligation consisting of a series of distinct hourly, or more frequent, periods, the variability of which will be resolved at the time of the future services.

Disaggregation of Revenue

The following table provides information about contract drilling revenue by rig types:

	Successor		Predecessor
	Period From February 6, 2021 through March 31, 2021		Period From January 1, 2021 through February 5, 2021		Three Months Ended March 31, 2020
Floaters	$	56,048	$	50,057	$	125,336
Jackups	28,581		23,994		142,028
Total	$	84,629	$	74,051	$	267,364