SEADRILL LIMITED
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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(Address of principal executive offices)
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Bermuda
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(Jurisdiction of incorporation or organization)
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Par-la-Ville Place, 4th Floor, 14 Par-la-Ville Road, Hamilton, HM 08 Bermuda
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(Address of principal executive offices)
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Georgina Sousa
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
Tel: +1 (441) 295-9500, Fax: +1 (441) 295-3494
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person
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Common stock, $2.00 par value
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New York Stock Exchange
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Title of class
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Name of exchange on which registered
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[ X ] Yes
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[ ] No
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[ ] Yes
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[ X ] No
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[ X ] Yes
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[ ] No
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[ X ] Yes
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[ ] No
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Large accelerated filer [ X ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
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[ X ] U.S. GAAP
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[ ] International Financial Reporting Standards as issued by the International Accounting Standards Board
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[ ] Other
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If "Other" has been checked in response to the previous question, indicate by check mark which
financial statement item the Registrant has elected to follow.
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[ ] Item 17
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[ ] Item 18
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[ ] Yes
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[ X ] No
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Exhibits
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Description
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Schema Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Schema Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Schema Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Schema Presentation Linkbase Document
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SEADRILL LIMITED
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By:
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/s/ Fredrik Halvorsen
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Name: Fredrik Halvorsen
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Title: Chief Executive Officer of Seadrill Management AS
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(Principal Executive Officer of Seadrill Limited) |
Risk management and financial instruments
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Risk management and financial instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk management and financial instruments | Note 31 – Risk management and financial instruments The majority of our gross earnings from rigs and vessels are receivable in US dollars and the majority of our other transactions, assets and liabilities are denominated in US dollars, the functional currency of the Company. However, the Company has operations and assets in a number of countries worldwide and incurs expenditures in other currencies, causing its results from operations to be affected by fluctuations in currency exchange rates, primarily relative to the US dollar. The Company is also exposed to changes in interest rates on floating interest rate debt, and to the impact of changes in currency exchange rates on NOK denominated debt. There is thus a risk that currency and interest rate fluctuations will have a negative effect on the value of the Company's cash flows. Interest rate risk management The Company's exposure to interest rate risk relates mainly to its floating interest rate debt and balances of surplus funds placed with financial institutions. This exposure is managed through the use of interest rate swaps and other derivative arrangements. The Company's ambition is to obtain the most favorable interest rate borrowings available without increasing its foreign currency exposure. Surplus funds are generally placed in fixed deposits with reputable financial institutions, yielding higher returns than are available on overnight deposits in banks. Such deposits generally have short-term maturities, in order to provide the Company with flexibility to meet all requirements for working capital and capital investments. The extent to which the Company utilizes interest rate swaps and other derivatives to manage its interest rate risk is determined by the net debt exposure and its views on future interest rates. Interest rate swap agreements not qualified as hedge accounting At December 31, 2011, the Company had interest rate swap agreements with an outstanding principal of $4,738 million (2010: $2,706 million). In addition, the Company had outstanding cross currency interest rate swaps at December 31, 2011 with a principal amount of $34 million (2010: $174 million) These agreements do not qualify for hedge accounting, and accordingly any changes in the fair values of the swap agreements are included in the Consolidated Statement of Operations under "Gain/(loss) on derivative financial instruments". The combined total fair value of the interest rate swaps and cross currency interest swaps outstanding December 31, 2011 amounted to a liability of $345 million (2010: a liability of $145 million). The Company's interest rate swap and cross currency interest rate swap agreements as at December 31, 2011, were as follows:
The counterparties to the above agreements are DnBNOR Bank ASA, Swedbank AB, Fokus Bank, ABN Amro and ING Bank N.V. Credit risk exists to the extent that the counterparties are unable to perform under the contracts, but this risk is considered remote as the counterparties are banks which have all provided loan finance to us and the interest rate swaps are related to those financing arrangements. Interest rate hedge accounting Two of the Ship Finance subsidiaries consolidated by the Company as VIE's have entered into interest rate swaps in order to mitigate the Company's exposure to variability in cash flows for future interest payments on the loans taken out to finance the acquisition of West Polaris and West Taurus. These interest rate swaps qualify for hedge accounting and any changes in their fair value are included in "Other comprehensive income/loss". Below is a summary of the notional amounts, fixed interest rates payable and durations of these interest rate swaps.
In the year ended December 31, 2011 the above two VIE Ship Finance subsidiaries recorded fair value gains of $20 million on their interest rate swaps. These gains were recorded by those VIEs as "Other comprehensive income" but due to their ownership by Ship Finance these gains are allocated to "Non-controlling interest" in our equity statement. Any change in fair value resulting from hedge ineffectiveness is recognized immediately in earnings. The two VIEs and therefore the Company, did not recognize any gain or loss due to hedge ineffectiveness in the consolidated financial statements during the years ended December 31, 2011, 2010 and 2009 relating to derivative financial instruments. Foreign currency risk management The Company uses foreign currency forward contracts and other derivatives to manage its exposure to foreign currency risk on certain assets, liabilities and future anticipated transactions. Such derivative contracts do not qualify for hedge accounting treatment and are recorded in the balance sheet under receivables if the contracts have a net positive fair value, and under other short-term liabilities if the contracts have a net negative fair value. At December 31, 2011, the Company had forward contracts and cross currency interest rate swaps to sell approximately $264 million between January 2012 and November 2012 at exchange rates ranging from NOK5.75 to NOK6.40 per US dollar. The total fair value of currency forward contracts December 31, 2011 amounted to minus $3 million (2010: $3 million unrealized gain). Total Return Swap Agreements In June and July 2008, the Company entered into Total Return Swap ("TRS") agreements with a total of 4,500,000 common shares in Seadrill as underlying security. The agreements were scheduled to expire in December 2008 and the initially agreed reference prices were in a range of NOK141.2 to NOK157.8 per share. In November 2008, these agreements were terminated and simultaneously a new TRS agreement with 4,500,000 common shares in Seadrill as underlying security was entered into. This agreement was scheduled to expire in February 2009 and the agreed reference price was NOK56.7 per share. In February 2009, the contract was extended to August 2009 and the new reference price was NOK61.3 per share. In August 2009, the contract was settled and simultaneously a new TRS agreement with 4,500,000 shares in Seadrill as underlying security was entered into. This agreement expired in February 2010 and the agreed reference price was NOK98.44 per share. In February 2010, these agreements were settled and the Company simultaneously entered a new TRS agreement for 3,500,000 of common shares in Seadrill with an agreed reference price of NOK125.70 per share and an expiration date in February 2011. In September 2010, the Company partly settled the TRS agreement and reduced the number of underlying Seadrill Limited shares by 750,000 shares from 3,500,000 shares to 2,750,000 common shares. In January 2011, the Company partly settled the TRS agreement and further reduced the number of underlying Seadrill Limited shares by 750,000 shares from 2,750,000 to 2,000,000 common shares. In September 2011, the contract was settled and simultaneously a new TRS agreement with 2,000,000 Seadrill Limited shares as underlying security was entered into. This agreement expires in March 2012 and the agreed reference price was NOK177.21 per share. The total realized and unrealized gain relating to TRS agreements in 2011 amounted to $5 million (2010 $27 million). Credit risk The Company has financial assets, including cash and cash equivalents, marketable securities, other receivables and certain amounts receivable on derivative instruments, mainly forward exchange contracts and interest rate swaps. These assets expose the Company to credit risk arising from possible default by the counterparty. The Company considers the counterparties to be creditworthy financial institutions and does not expect any significant loss to result from non-performance by such counterparties. The Company, in the normal course of business, does not demand collateral. The credit exposure of interest rate swap agreements, currency option contracts and foreign currency contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements. It is the Company's policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give the Company the legal right to discharge all or a portion of amounts owed to a counterparty by offsetting them against amounts that the counterparty owes to the Company. Fair values The carrying value and estimated fair value of the Company's financial instruments at December 31, 2011 and December 31, 2010 are as follows:
The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, is a reasonable estimate of fair value. The fair value of the current and long-term portion of floating rate debt is estimated to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. The fair value of the long-term portion of the fixed rate CIRR loans is equal to the carrying value, as they are matched with equal balances of restricted cash. The convertible bonds are freely tradable and their fair value has been set equal to the price at which they were traded at on December 31, 2011 and 2010. Financial instruments that are measured at fair value on a recurring basis:
Roll forward of fair value measurements using unobservable inputs (Level 3):
ASC Topic 820 Fair Value Measurement and Disclosures (formerly FAS 157) emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy). Level one input utilizes unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level two inputs are inputs other than quoted prices included in level one that are observable for the asset or liability, either directly or indirectly. Level two inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability, other than quoted prices, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Quoted market prices are used to estimate the fair value of marketable securities, which are valued at fair value on a recurring basis. The fair value of total return equity swaps is calculated using the closing prices of the underlying listed shares, dividends paid since inception and the interest rate charged by the counterparty. The fair values of interest rate swaps and forward exchange contracts are calculated using well-established independent valuation techniques applied to contracted cash flows and LIBOR and NIBOR interest rates as of December 31, 2011. The fair value of other derivative instruments is calculated using the closing prices of the underlying securities, dividends paid since inception and the interest charged by the counterparty. Retained Risk a) Physical Damage Insurance The Company retains the risk, through self-insurance, for the deductibles relating to physical damage insurance on the Company's rig fleet, currently a maximum of $5 million per occurrence. b) Loss of Hire Insurance The Company purchases insurance to cover the Deepwater rigs, 3 semi tenders and the North Atlantic fleet for loss of revenue in the event of extensive downtime caused by physical damage, where such damage is covered under the Company's physical damage insurance. The Company's self-insured retentions under the loss of hire insurance are up to 60 days after the occurrence of the physical damage. Thereafter, under the terms of the insurance, the Company is compensated for loss of revenue for a period ranging from 210 days up to 290 days. The Company retains the risk that the repair of physical damage takes longer than the total number of days in the loss of hire policy. Concentration of risk The Company has financial assets, including cash and cash equivalents, marketable securities, other receivables and certain derivative instrument receivable amounts. These other assets expose the Company to credit risk arising from possible default by the counterparty. There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with DnB NOR Bank ASA, Nordea Bank Finland Plc, Fokus Bank, and ING Bank N.V. The Company considers these risks to be remote. In the year ended December, 31, 2011, 17% of the Company's contract revenues were received from Petroleo Brasileiro S.A ("Petrobras") (2010: 17%), 15% from Total S.A Group ("Total") (2010: 10%), 10% from Exxon Mobil Corp ("Exxon") (2010: 7%), 10% from Royal Dutch Shell Group ("Shell") (2010: 9%) and 7% from Statoil ASA ("Statoil": 15%). There is thus a concentration of revenue risk towards Petrobras, Total, Exxon, Shell and Statoil. |
Marketable securities (Tables)
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Dec. 31, 2011
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Marketable securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable securities held | Marketable securities held by the Company are equity securities considered to be available-for-sale securities or trading securities.
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Marketable securities and changes in carrying value | Marketable securities held by us include approximately 3.5% of the issued shares of Ensco plc. ("Ensco"), 9.2% of the issued shares of Seahawk Drilling Inc. ("Seahawk"), 81.1% of the partially redeemed Petromena NOK2,000 million bond ("Petromena") and 3.3% of Golden Close Maritime bond ("Golden Close"). Marketable securities and changes in their carrying value are as follows:
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Earnings per share (Tables)
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Dec. 31, 2011
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Earnings per share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of numerator and denominator for calculation of basic and diluted earnings per share | The components of the numerator and denominator for the calculation of basic and diluted earnings per share resulting from continuing operations are as follows:
**The loss on debt extinguishment of $145 million has been added back to net income in addition to interests expenses related to the convertible bonds. These effects are anti-dilutive, and exceed the effect of increased denominator when calculating the diluted earnings per share. As a consequence of this, the diluted earnings per share equal basic earnings per share. |
Related party transactions (Tables)
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Dec. 31, 2011
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Related party transactions [Abstract] | |||||||||||||||||||||||||||||||
Lease costs on units leased back from related parties | In the 12 months ended December 31, 2011, the Company incurred the following lease costs on units leased back from Ship Finance subsidiaries.
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Other current assets (Tables)
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Dec. 31, 2011
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Other current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other current assets | Other current assets include:
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Earnings per share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
12 Months Ended | |||||
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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Net income [Abstract] | ||||||
Net income | $ 1,401 | $ 1,117 | $ 1,261 | |||
Effect of dilution: | ||||||
Convertible bonds | 45 | 228 | 50 | |||
Share options | 0 | 0 | 0 | |||
Net income after effect of dilution | 1,446 | 1,345 | [1] | 1,311 | ||
Weighted average million of shares outstanding [Abstract] | ||||||
Weighted average million of shares outstanding (in shares) | 459 | 409 | 399 | |||
Effect of dilution: | ||||||
Convertible bonds (in shares) | 28 | 60 | 36 | |||
Share options (in shares) | 1 | 2 | 2 | |||
Weighted average million of shares outstanding after effect of dilution (in shares) | 488 | 471 | [1] | 437 | ||
Earnings per share [Abstract] | ||||||
Earnings per share (in US dollars per share) | $ 3.05 | $ 2.73 | $ 3.16 | |||
Diluted earnings per share (in US dollars per share) | $ 2.96 | $ 2.73 | [1] | $ 3.00 | ||
Loss on debt extinguishment | $ 0 | $ (145) | $ 0 | |||
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Risk management and financial instruments (Details)
In Millions, except Share data, unless otherwise specified |
12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 2 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2009
USD ($)
|
Dec. 31, 2011
Contract Revenues [Member]
Customer Concentration Risk [Member]
Petrobras [Member]
|
Dec. 31, 2010
Contract Revenues [Member]
Customer Concentration Risk [Member]
Petrobras [Member]
|
Dec. 31, 2011
Contract Revenues [Member]
Customer Concentration Risk [Member]
Total [Member]
|
Dec. 31, 2010
Contract Revenues [Member]
Customer Concentration Risk [Member]
Total [Member]
|
Dec. 31, 2011
Contract Revenues [Member]
Customer Concentration Risk [Member]
Exxon [Member]
|
Dec. 31, 2010
Contract Revenues [Member]
Customer Concentration Risk [Member]
Exxon [Member]
|
Dec. 31, 2011
Contract Revenues [Member]
Customer Concentration Risk [Member]
Shell [Member]
|
Dec. 31, 2010
Contract Revenues [Member]
Customer Concentration Risk [Member]
Shell [Member]
|
Dec. 31, 2011
Contract Revenues [Member]
Customer Concentration Risk [Member]
Statoil [Member]
|
Dec. 31, 2010
Contract Revenues [Member]
Customer Concentration Risk [Member]
Statoil [Member]
|
Dec. 31, 2011
Uninsured Risk [Member]
USD ($)
|
Dec. 31, 2011
Recurring [Member]
USD ($)
|
Dec. 31, 2010
Recurring [Member]
USD ($)
|
Dec. 31, 2011
Recurring [Member]
Level 1 [Member]
USD ($)
|
Dec. 31, 2010
Recurring [Member]
Level 1 [Member]
USD ($)
|
Dec. 31, 2011
Recurring [Member]
Level 2 [Member]
USD ($)
|
Dec. 31, 2010
Recurring [Member]
Level 2 [Member]
USD ($)
|
Dec. 31, 2011
Recurring [Member]
Level 3 [Member]
USD ($)
|
Dec. 31, 2010
Recurring [Member]
Level 3 [Member]
USD ($)
|
Dec. 31, 2011
Fair value [Member]
USD ($)
|
Dec. 31, 2010
Fair value [Member]
USD ($)
|
Dec. 31, 2011
Carrying value [Member]
USD ($)
|
Dec. 31, 2010
Carrying value [Member]
USD ($)
|
Dec. 31, 2011
Minimum [Member]
Uninsured Risk [Member]
|
Dec. 31, 2011
Maximum [Member]
Uninsured Risk [Member]
|
Dec. 31, 2011
Consolidated Variable Interest Entities [Member]
|
Dec. 31, 2011
Interest Rate Swap [Member]
USD ($)
|
Dec. 31, 2010
Interest Rate Swap [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Consolidated Variable Interest Entities [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 1 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 3 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 4 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 5 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 6 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 7 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 8 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 9 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 10 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 11 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 12 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 13 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 14 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 15 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 16 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 17 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 18 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 19 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 20 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 21 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 22 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 23 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 24 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 25 [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 26 [Member]
Consolidated Variable Interest Entities [Member]
USD ($)
|
Dec. 31, 2011
Interest Rate Swap [Member]
Swap 27 [Member]
Consolidated Variable Interest Entities [Member]
USD ($)
|
Dec. 31, 2011
Cross Currency Interest Rate Swap [Member]
USD ($)
|
Dec. 31, 2010
Cross Currency Interest Rate Swap [Member]
USD ($)
|
Dec. 31, 2011
Cross Currency Interest Rate Swap [Member]
Swap 2 [Member]
USD ($)
|
Dec. 31, 2011
Cross Currency Interest Rate Swap [Member]
Swap 2 [Member]
NOK
|
Dec. 31, 2011
Forward Contracts [Member]
USD ($)
|
Dec. 31, 2010
Forward Contracts [Member]
USD ($)
|
Dec. 31, 2011
Forward Contracts [Member]
Minimum [Member]
NOK
|
Dec. 31, 2011
Forward Contracts [Member]
Maximum [Member]
NOK
|
Dec. 31, 2011
Total Return Swap [Member]
USD ($)
|
Dec. 31, 2010
Total Return Swap [Member]
USD ($)
|
Jul. 31, 2008
Total Return Swap [Member]
Swap 28 [Member]
|
Jul. 31, 2008
Total Return Swap [Member]
Swap 28 [Member]
Minimum [Member]
NOK
|
Jul. 31, 2008
Total Return Swap [Member]
Swap 28 [Member]
Maximum [Member]
NOK
|
Feb. 28, 2009
Total Return Swap [Member]
Swap 29 [Member]
NOK
|
Nov. 30, 2008
Total Return Swap [Member]
Swap 29 [Member]
NOK
|
Aug. 31, 2009
Total Return Swap [Member]
Swap 30 [Member]
NOK
|
Jan. 31, 2011
Total Return Swap [Member]
Swap 31 [Member]
|
Sep. 30, 2010
Total Return Swap [Member]
Swap 31 [Member]
|
Feb. 28, 2010
Total Return Swap [Member]
Swap 31 [Member]
NOK
|
Sep. 30, 2011
Total Return Swap [Member]
Swap 32 [Member]
NOK
|
|
Derivative [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of variable interest entities with interest rate swaps | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total fair value of interest rate swaps and cross currency interest rate swaps outstanding | $ 345 | $ 145 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding principal | 4,738 | 2,706 | 50 | 300 | 150 | 150 | 200 | 200 | 350 | 300 | 88 | 350 | 100 | 100 | 200 | 200 | 250 | 250 | 500 | 100 | 100 | 200 | 100 | 100 | 200 | 200 | 470 | 518 | 34 | 174 | 34 | 220 | ||||||||||||||||||||||||||||||||||||||||||||||
Name of unit | West Polaris | West Taurus | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receive rate, variable rate basis | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 6 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 3 month LIBOR | 1 month LIBOR | 1 month LIBOR | 3 month NIBOR | 3 month NIBOR | ||||||||||||||||||||||||||||||||||||||||||||||||||
Receive rate, basis spread on variable rate | 1.20% | 1.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pay rate, fixed rate | 4.63% | 3.16% | 3.34% | 3.30% | 2.83% | 3.27% | 3.80% | 3.54% | 3.83% | 3.36% | 2.22% | 2.24% | 2.17% | 2.17% | 2.71% | 2.62% | 2.06% | 2.17% | 2.17% | 2.57% | 2.56% | 2.74% | 2.14% | 2.14% | 3.89% | 2.19% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pay rate, variable rate basis | 3 month LIBOR | 3 month LIBOR | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pay rate, basis spread on variable rate | 1.30% | 1.30% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Length of contract, inception date | May 31, 2005 | Dec. 31, 2008 | Jun. 30, 2013 | Jun. 30, 2013 | Jan. 31, 2011 | Mar. 31, 2013 | Sep. 30, 2011 | Sep. 30, 2011 | Mar. 31, 2008 | Sep. 30, 2011 | Jan. 31, 2011 | Jan. 31, 2011 | Jan. 31, 2011 | Jan. 31, 2011 | May 31, 2009 | May 31, 2009 | Mar. 31, 2009 | Aug. 31, 2012 | Aug. 31, 2012 | Jun. 30, 2012 | Jun. 30, 2012 | May 31, 2012 | May 31, 2011 | May 31, 2011 | Jul. 31, 2008 | Dec. 31, 2008 | Sep. 30, 2005 | Sep. 30, 2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Length of contract, maturity date | May 31, 2015 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jan. 31, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2016 | Jan. 31, 2016 | Jan. 31, 2016 | Jan. 31, 2016 | Jan. 31, 2016 | May 31, 2014 | May 31, 2014 | Mar. 31, 2014 | Aug. 31, 2017 | Aug. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | May 31, 2017 | Jan. 31, 2016 | Jan. 31, 2016 | Oct. 31, 2012 | Aug. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gain (loss) on interest rate swaps in VIEs | 20 | (11) | 15 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of currency to be sold | 264 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forward exchange rate | 5.75 | 6.40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) gain on derivative instrument | (3) | 3 | 5 | 27 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Underlying security (in shares) | 4,500,000 | 4,500,000 | 4,500,000 | 2,000,000 | 2,750,000 | 3,500,000 | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agreed reference price | 141.20 | 157.80 | 61.3 | 56.7 | 98.44 | 125.70 | 177.21 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reduction in underlying security (in shares) | 750,000 | 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 483 | 755 | 483 | 755 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted cash | 482 | 460 | 482 | 460 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt | 1,419 | 981 | 1,419 | 981 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term portion of floating rate debt | 7,711 | 6,509 | 7,711 | 6,509 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long term portion of fixed rate CIRR loans | 250 | 305 | 250 | 305 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed interest convertible bonds | 735 | 1,535 | 545 | 1,287 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable securities | 24 | 598 | 4 | 554 | 0 | 0 | 20 | 44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets | 3 | 0 | 3 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRS equity swap contracts | 11 | 38 | 0 | 0 | 11 | 38 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments - short term receivable | 3 | 7 | 1 | 7 | 2 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | 38 | 646 | 5 | 561 | 13 | 41 | 20 | 44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap contracts - short term payable | 372 | 144 | 0 | 0 | 372 | 144 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency forward contracts - short term payable | 3 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments - short term payable | 39 | 39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 414 | 144 | 0 | 0 | 414 | 144 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements using unobservable inputs [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | 44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realization | (22) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in fair value of bonds | (15) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Closing balance | 20 | 44 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retained Risk [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maximum risk of loss from insurance deductibles per occurrence | $ 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of semi tenders insured | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Self-insured retention period | 60 days | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation period | 210 days | 290 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Percentage | 17.00% | 17.00% | 15.00% | 10.00% | 10.00% | 7.00% | 10.00% | 9.00% | 7.00% | 15.00% |
Segment information (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
|
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Segment information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment results | Revenues (excluding gain on sale of drilling units)
Depreciation and amortization
Operating Income – net income
Total assets
Goodwill
As a consequence of the change in segment structure from 2011, the Goodwill has been reassigned to the reporting units affected using a relative fair value allocation approach. Total liabilities
Capital expenditures – fixed assets
|
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Company's revenues and fixed assets by geographic area | Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents the Company's revenues and fixed assets by geographic area: Revenues (excluding gain on sale of assets)
Fixed assets – operating drilling units (1)
(1) The fixed assets referred to in the table are the Company's operating drilling units. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. |
Business Acquisitions
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Business Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | Note 25 – Business Acquisitions Acquisitions in 2011 In January 2011, our then subsidiary Archer acquired Universal Wireline for $26 million on a debt and cash free basis, however Universal was deconsolidated together with Archer in February 2011. There were no other business acquisitions in the year ended December 31, 2011. Acquisitions in 2010 Scorpion Offshore Ltd ("Scorpion") Scorpion was established and incorporated in Bermuda with the purpose of operating a fleet of offshore drilling rigs and is listed on the Oslo Stock Exchange. Seadrill acquired its first shares in Scorpion and entered into forward contracts for the purchase of Scorpion shares in early 2008. In April 2010, Seadrill increased its ownership to 40.0 percent at a price per Scorpion share of NOK36.00. At that time Scorpion had a fleet of seven premium jack-up rigs with operations in South America, Middle East and South East Asia. In late May 2010, Seadrill increased its ownership to 50.1 percent of the outstanding shares and simultaneously announced a bid of NOK40.50 per share for the remaining outstanding shares that was launched on June 4, 2010. On July 19, 2010, it was announced that the holders of 48.7 percent of the total number of outstanding shares had accepted the offer increasing our ownership to 98.8 percent of the outstanding shares and votes in Scorpion. On September 20, 2010, Seadrill informed remaining Scorpion shareholders of its intention to exercise its right under Bermuda company law to compulsory acquire all remaining outstanding shares in Scorpion. The compulsory acquisition was completed on October 25, 2010 and the company's shares were delisted from the Oslo Stock Exchange on November 17, 2010. As of December 31, 2011 Seadrill's ownership in Scorpion is 100%. Seadrill has applied the purchase method in this business combination (ASC topic 805). As part of the process, a valuation analysis has been performed to determine the fair values of certain identifiable intangible assets of Scorpion as of the acquisition date. The determination of the value of these components required the Company to make various estimates and assumptions. Critical estimates in valuing certain of the intangible assets include but are not limited to the net present value of future expected cash flows from operations. The allocation of the purchase price of Scorpion was based upon fair value studies. Acquisition consideration
On May 28, 2010 the Company acquired control of Scorpion, and remeasured the previously held 40.0% equity interest to its fair value. The difference between the $115 million book value and the $226 million fair value of the previously held 40.0% interest was recorded as a gain on a separate line item under financial items in the consolidated statement of operations in the year ended December 31, 2010. As a result of the acquisition of control, we also recognized a gain on a bargain purchase as the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired. We subsequently performed a reassessment of the values of all assets acquired, liabilities assumed, and consideration transferred. The reassessment confirmed our initial gain on bargain purchase. During the third and fourth quarter of 2010, the Company acquired the remaining shares in Scorpion for a total amount of $292 million, increasing the Company's ownership in Scorpion to 100% of the outstanding shares as of December 31, 2010. With effect from June 1, 2010, the results of Scorpion's operations were included in our consolidated financial statements. Gray Wireline Service, Inc In December 2010, Archer, acquired Gray Wireline Service, Inc. ("Gray"), an independent cased hole wireline company in the U.S. The purchase price was US$ 161 million. Rig Inspection Services Limited In August 2010, Archer acquired Rig Inspection Services Limited ("RIS"), a private company with offices in Singapore and Australia. The purchase price was US$ 9 million. The purchase price of the acquired companies has been allocated as follows:
Acquisitions in 2009 There has been no business acquisitions in the year ended December 31, 2009. Our business acquisitions have been accounted for in accordance with our Accounting policies detailed in Note 2 above, and the basis of presentation of all business combinations is described under Basis of presentation in Note 1 above. |
Other revenues (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Other revenues [Abstract] | |||
Amortization of unfavorable contracts | $ 24 | $ 39 | $ 43 |
Amortization of favorable contracts | (23) | (13) | 0 |
Other revenues | 1 | 26 | 43 |
Unamortized amount of favorable contracts | $ 14 | ||
Useful economic lives of unfavorable contracts, lower range | 2 years | ||
Useful economic lives of unfavorable contracts, upper range | 5 years |
Variable Interest Entities (VIEs) (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Variable Interest Entities (VIEs) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of sale and leaseback arrangements | As of December 31, 2011, the Company leased a drillship and two semi-submersible rigs from VIEs under finance leases. Each of the units had been sold by the Company to single purpose subsidiaries of Ship Finance Ltd and simultaneously leased back by the Company on bareboat charter contracts for a term of 15 years. The Company has several options to repurchase the units during the charter periods, and obligations to purchase the assets at the end of the 15 year lease period. The following table gives a summary of the sale and leaseback arrangements, as of December 31, 2011:
* For the unit West Polaris, Ship Finance has a put option exercisable at the end of the lease terms by which the vessel may be sold to Seadrill for a fixed price of $75 million. For West Taurus and West Hercules repurchase obligations at the end of the lease terms have been agreed, at $149 million and $135 million, respectively. |
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Summary of the bareboat charter rates per day based on Base LIBOR Interest Rate for the next five years | The bareboat charter rates are set on the basis of a Base LIBOR Interest Rate for each bareboat charter contract, and thereafter are adjusted for differences between the LIBOR fixing each month and the Base LIBOR Interest Rate for each contract. A summary of the bareboat charter rates per day for each unit is given below. The amounts shown are based on the Base LIBOR Interest Rate, and reflect average rates for the year.
* For a period the interest rates for West Polaris and West Taurus have been fixed at 3.89% and 2.17%, respectively, and the bareboat charter rate for these two units is fixed regardless of movements in LIBOR interest rates. These fixed charter rates are reflected in the above table. |
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Assets and liabilities in the statutory accounts of the VIEs | The assets and liabilities in the statutory accounts of the VIEs are as follows:
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Newbuildings (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2011
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Newbuildings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Newbuildings | Note 17 – Newbuildings
|
Segment information (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|||||
Segment information [Abstract] | |||||||
Number of operating segments | 3 | ||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | $ 4,192 | $ 4,041 | $ 3,254 | ||||
Depreciation and amortization | 563 | 480 | 396 | ||||
Operating Income - net income | |||||||
Operating income | 1,774 | 1,625 | 1,372 | ||||
Unallocated items: | |||||||
Total financial items | (103) | (294) | 101 | ||||
Income taxes | (189) | (159) | (120) | ||||
Gain on issuance of shares by subsidiary | 0 | 0 | 0 | ||||
Net income | 1,482 | 1,172 | 1,353 | ||||
Total assets | 18,304 | 17,497 | |||||
Goodwill | 1,320 | 1,676 | 1,596 | ||||
Total liabilities | 12,002 | 11,560 | |||||
Capital expenditures - fixed assets | 2,543 | 2,368 | 1,369 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 4,192 | 4,041 | 3,254 | ||||
Fixed assets - operating drilling units | 11,223 | [1] | 10,795 | [1] | |||
Norway [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 966 | 1,393 | 1,235 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 966 | 1,393 | 1,235 | ||||
Fixed assets - operating drilling units | 2,007 | [1] | 1,321 | [1] | |||
UK [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 56 | 151 | 149 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 56 | 151 | 149 | ||||
Fixed assets - operating drilling units | 0 | [1] | 751 | [1] | |||
Brunei [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 54 | 66 | 42 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 54 | 66 | 42 | ||||
Fixed assets - operating drilling units | 38 | [1] | 210 | [1] | |||
Thailand [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 303 | 165 | 112 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 303 | 165 | 112 | ||||
Fixed assets - operating drilling units | 605 | [1] | 397 | [1] | |||
Malaysia [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 207 | 62 | 108 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 207 | 62 | 108 | ||||
Fixed assets - operating drilling units | 333 | [1] | 250 | [1] | |||
Congo [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 0 | 37 | 70 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 0 | 37 | 70 | ||||
Nigeria [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 235 | 204 | 155 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 235 | 204 | 155 | ||||
Fixed assets - operating drilling units | 1,191 | [1] | 601 | [1] | |||
Australia [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 0 | 0 | 112 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 0 | 0 | 112 | ||||
USA [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 202 | 186 | 147 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 202 | 186 | 147 | ||||
Fixed assets - operating drilling units | 496 | [1] | 515 | [1] | |||
Brazil [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 913 | 710 | 500 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 913 | 710 | 500 | ||||
Fixed assets - operating drilling units | 2,096 | [1] | 2,804 | [1] | |||
China [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 299 | 230 | 178 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 299 | 230 | 178 | ||||
Fixed assets - operating drilling units | 1,091 | [1] | 1,171 | [1] | |||
Indonesia [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 130 | 159 | 179 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 130 | 159 | 179 | ||||
Fixed assets - operating drilling units | 321 | [1] | 570 | [1] | |||
Philippines [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 0 | 109 | 54 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 0 | 109 | 54 | ||||
Vietnam [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 157 | 150 | 105 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 157 | 150 | 105 | ||||
Fixed assets - operating drilling units | 336 | [1] | 521 | [1] | |||
Angola [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 337 | 182 | 27 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 337 | 182 | 27 | ||||
Fixed assets - operating drilling units | 979 | [1] | 1,020 | [1] | |||
Red Sea [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 0 | 68 | 1 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 0 | 68 | 1 | ||||
Trinidad & Tobago [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 41 | 0 | 0 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 41 | 0 | 0 | ||||
Fixed assets - operating drilling units | 424 | [1] | 0 | [1] | |||
Saudi Arabia/Kuwait [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 127 | 69 | 0 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 127 | 69 | 0 | ||||
Saudi Arabia [Member]
|
|||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Fixed assets - operating drilling units | 331 | [1] | 345 | [1] | |||
Mexico [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 49 | 0 | 0 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 49 | 0 | 0 | ||||
Fixed assets - operating drilling units | 605 | [1] | 0 | [1] | |||
Other [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 116 | 100 | 80 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 116 | 100 | 80 | ||||
Fixed assets - operating drilling units | 370 | [1] | 319 | [1] | |||
Floaters [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 2,694 | 2,264 | 1,864 | ||||
Depreciation and amortization | 358 | 301 | 261 | ||||
Operating Income - net income | |||||||
Operating income | 1,328 | 1,140 | 912 | ||||
Unallocated items: | |||||||
Total assets | 12,600 | 11,650 | |||||
Goodwill | 890 | 890 | |||||
Total liabilities | 8,274 | 8,092 | |||||
Capital expenditures - fixed assets | 1,805 | 1,330 | 936 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 2,694 | 2,264 | 1,864 | ||||
Jack-up rigs [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 776 | 578 | 388 | ||||
Depreciation and amortization | 135 | 99 | 72 | ||||
Operating Income - net income | |||||||
Operating income | 220 | 199 | 229 | ||||
Unallocated items: | |||||||
Total assets | 4,200 | 3,538 | |||||
Goodwill | 281 | 281 | |||||
Total liabilities | 2,745 | 2,406 | |||||
Capital expenditures - fixed assets | 495 | 877 | 155 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 776 | 578 | 388 | ||||
Tender Rigs [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 589 | 482 | 392 | ||||
Depreciation and amortization | 63 | 57 | 42 | ||||
Operating Income - net income | |||||||
Operating income | 221 | 222 | 174 | ||||
Unallocated items: | |||||||
Total assets | 1,504 | 1,322 | |||||
Goodwill | 149 | 149 | |||||
Total liabilities | 983 | 630 | |||||
Capital expenditures - fixed assets | 243 | 134 | 247 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | 589 | 482 | 392 | ||||
Well Services [Member]
|
|||||||
Segment Reporting Information [Line Items] | |||||||
Revenues (excluding gain on sale of drilling units) | 133 | 717 | 610 | ||||
Depreciation and amortization | 7 | 23 | 21 | ||||
Operating Income - net income | |||||||
Operating income | 5 | 64 | 57 | ||||
Unallocated items: | |||||||
Total assets | 0 | 987 | |||||
Goodwill | 0 | 356 | |||||
Total liabilities | 0 | 432 | |||||
Capital expenditures - fixed assets | 0 | 27 | 31 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenues (excluding gain on sale of assets) | $ 133 | $ 717 | $ 610 | ||||
|
Marketable securities (Details)
In Millions, unless otherwise specified |
12 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2009
USD ($)
|
Dec. 31, 2011
Pride [Member]
USD ($)
|
Dec. 31, 2011
Ensco [Member]
USD ($)
|
Dec. 31, 2011
Seahawk [Member]
USD ($)
|
Dec. 31, 2011
Petromena [Member]
USD ($)
|
Dec. 31, 2011
Petromena [Member]
NOK
|
Dec. 31, 2011
Golden Close [Member]
USD ($)
|
Dec. 31, 2011
Other bonds [Member]
USD ($)
|
|
Marketable securities [Abstract] | ||||||||||
Original cost | $ 24 | $ 306 | $ 0 | $ 5 | $ 0 | $ 4 | $ 15 | $ 0 | ||
Unrealized gain on marketable securities, net | 0 | 292 | ||||||||
Carrying value | 24 | 598 | 0 | 4 | 0 | 4 | 16 | 0 | ||
Marketable Securities, Investee [Line Items] | ||||||||||
Percentage of marketable securities held (in hundredths) | 3.50% | 9.20% | 81.10% | 3.30% | ||||||
Face amount of bond securities held | 2,000 | |||||||||
Historic cost | 306 | 268 | 0 | 10 | 13 | 15 | 0 | |||
Fair Market value adjustments recognized via OCI | 292 | 317 | 276 | 0 | 0 | 16 | 0 | 0 | ||
Net book value | 598 | 544 | 0 | 10 | 29 | 15 | 0 | |||
Additions | 18 | 0 | 5 | 0 | 0 | 0 | 13 | |||
Fair market value adjustments recognized via OCI | 125 | 140 | 0 | 0 | (16) | 1 | 0 | |||
Release of OCI into profit & loss | (416) | 0 | 0 | (416) | 0 | 0 | 0 | 0 | ||
Realization of historic cost | (290) | (268) | 0 | 0 | (9) | 0 | (13) | |||
Other than temporary impairments | (10) | (15) | 0 | 0 | 0 | (10) | 0 | 0 | 0 | |
Historic cost | 24 | 306 | 0 | 5 | 0 | 4 | 15 | 0 | ||
Fair Market value adjustments recognized via OCI | 1 | 292 | 317 | 0 | 0 | 0 | 0 | 1 | 0 | |
Fair Market value adjustments recognized via P&L | (1) | 0 | (1) | 0 | 0 | 0 | 0 | |||
Net book value | $ 24 | $ 598 | $ 0 | $ 4 | $ 0 | $ 4 | $ 16 | $ 0 |
Operational leases (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Operational leases [Abstract] | |||
Rent expense | $ 20 | $ 21 | $ 14 |
Operating leases, future minimum payments due, fiscal year maturity [Abstract] | |||
2012 | 17 | ||
2013 | 9 | ||
2014 | 6 | ||
2015 | 5 | ||
2016 | 4 | ||
2017 and thereafter | 10 | ||
Total | $ 51 |
Accounts receivable (Details) (USD $)
In Millions, unless otherwise specified |
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|
Accounts receivable [Abstract] | ||
Allowance for doubtful accounts receivables | $ 25 | $ 25 |
Taxation (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Current tax expense: | |||
Bermuda | $ 0 | $ 0 | $ 0 |
Foreign | 328 | 184 | 118 |
Deferred tax expense: | |||
Bermuda | 0 | 0 | 0 |
Foreign | 24 | 14 | (3) |
Deferred taxes acquired during the year | 0 | 0 | 0 |
Tax related to internal sale of assets in subsidiary, amortized for group purposes | (163) | (39) | 5 |
Total provision | 189 | 159 | 120 |
Effective tax rate (in hundredths) | 11.30% | 12.10% | 8.10% |
Statutory income tax rate (in hundredths) | 0.00% | ||
Income tax reconciliation [Abstract] | |||
Income taxes at statutory rate | 0 | 0 | 0 |
Effect of transfers to new tax jurisdictions | (163) | (39) | 5 |
Effect of change in taxable currency | 0 | 0 | 0 |
Effect of taxable income in various countries | 352 | 198 | 115 |
Total provision | 189 | 159 | 120 |
Deferred Tax Assets: | |||
Pension | 11 | 15 | |
Tax loss carry forward | 0 | 10 | |
Unfavorable contracts | 0 | 2 | |
Provisions | 15 | 0 | |
Property, plant and equipment | 9 | 0 | |
Other | 8 | 5 | |
Gross deferred tax asset | 43 | 32 | |
Deferred Tax Liability: | |||
Property, plant and equipment | 0 | 62 | |
Long term maintenance | 0 | 48 | |
Gain from sale of fixed assets | 31 | 64 | |
Other | 13 | 24 | |
Gross deferred tax liability | 44 | 198 | |
Net deferred tax | 1 | 166 | |
Net deferred taxes, classified [Abstract] | |||
Short-term deferred tax asset | 10 | 2 | |
Long-term deferred tax asset | 33 | 30 | |
Short-term deferred tax liability | 10 | 17 | |
Long-term deferred tax liability | 34 | 181 | |
Net deferred tax | 1 | 166 | |
Uncertain tax positions [Abstract] | |||
Total remaining claim following the tax reassessment | 263 | ||
Tax expense recorded relating to uncertain tax positions | 9 | ||
Deferred charges relating to uncertain tax positions | 39 | ||
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | |||
Balance beginning of period | 0 | 0 | 0 |
Additions for prior years tax positions | 48 | 0 | 0 |
Balance end of period | 48 | 0 | 0 |
Provision for tax expense relating to conversion of functional currency for several Norwegian subsidiaries | 15 | ||
Threshold of liquidity exposure in excess of which amount is covered by a liquidity facility in relation to possible tax claims | $ 63 | ||
Australia [Member]
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Income Tax Examination [Line Items] | |||
Earliest Open Year | 2008 | ||
Nigeria [Member]
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Income Tax Examination [Line Items] | |||
Earliest Open Year | 2007 | ||
Norway [Member]
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Income Tax Examination [Line Items] | |||
Earliest Open Year | 2007 | ||
Thailand [Member]
|
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Income Tax Examination [Line Items] | |||
Earliest Open Year | 2003 |
Risk management and financial instruments (Tables)
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Dec. 31, 2011
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Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap and cross currency interest rate swap agreements | The Company's interest rate swap and cross currency interest rate swap agreements as at December 31, 2011, were as follows:
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Carrying value and estimated fair value of financial instruments | The carrying value and estimated fair value of the Company's financial instruments at December 31, 2011 and December 31, 2010 are as follows:
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Financial instruments measured at fair value on a recurring basis | Financial instruments that are measured at fair value on a recurring basis:
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Roll forward of fair value measurements using unobservable inputs (Level 3) | Roll forward of fair value measurements using unobservable inputs (Level 3):
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Consolidated Variable Interest Entities [Member]
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Variable Interest Entity [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap and cross currency interest rate swap agreements | Two of the Ship Finance subsidiaries consolidated by the Company as VIE's have entered into interest rate swaps in order to mitigate the Company's exposure to variability in cash flows for future interest payments on the loans taken out to finance the acquisition of West Polaris and West Taurus. These interest rate swaps qualify for hedge accounting and any changes in their fair value are included in "Other comprehensive income/loss". Below is a summary of the notional amounts, fixed interest rates payable and durations of these interest rate swaps.
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Newbuildings
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Dec. 31, 2011
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Newbuildings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Newbuildings | Note 17 – Newbuildings
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Gain on sale of assets (Tables)
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Dec. 31, 2011
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Gain on sale of assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on sale of assets | The Company has recognized the following gains and losses on sales of assets:
* Loss incurred due to the PPL yard exercising their option to purchase the construction contract for one jack-up rig. |
Gain on realization of marketable securities
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12 Months Ended |
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Dec. 31, 2011
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Gain on realization of marketable securities disclosure [Abstract] | |
Gain on realization of marketable securities | Note 34 – Gain on realization of marketable securities On February 7, 2011, Ensco plc ("Ensco") (NYSE: ESV) and Pride International, Inc. ("Pride") (NYSE: PDE) jointly announced that they have entered into a definitive merger agreement under which Ensco will combine with Pride in a cash and stock transaction. On May 31, 2011, Ensco announced the completion of its acquisition of Pride International, after both companies received shareholder approvals. Under the terms of the merger agreement, Pride stockholders received 0.4778 newly-issued shares of Ensco plus $15.60 in cash for each share of Pride common stock. The merger represents a realization of our previously held Pride positions. The accumulated other-comprehensive income effect related to our holding in Pride amounted to $416 million as of May 31, 2011. This amount has been released into the profit and loss statement upon our acceptance of the Ensco offer, and the gain is presented on a separate line item in our financial statements. The cash effect of this transaction was $141 million in 2011. |
Accounting policies (Details)
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12 Months Ended |
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Dec. 31, 2011
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Property, Plant and Equipment [Line Items] | |
Escalation of dayrates (in hundredths) | 0.00% |
Defined benefit pension plans [Abstract] | |
Threshold percentage for recognizing actuarial gains and losses (in hundredths) | 10.00% |
Segment reporting [Abstract] | |
Number of reportable business segments | 3 |
Overhauls of drilling units [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Drilling units [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 30 years |
Period within which management is actively committed to a probable sale of assets classified as held for sale | 1 year |
Other equipment [Member] | Minimum [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 3 years |
Other equipment [Member] | Maximum [Member]
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Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Other non-current liabilities (Details) (USD $)
In Millions, unless otherwise specified |
Dec. 31, 2011
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Dec. 31, 2010
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Other non-current liabilities [Abstract] | ||
Accrued pension liabilities | $ 43 | $ 75 |
Long-term portion of unfavorable contract values | 0 | 4 |
Long term portion of deferred mobilization revenues | 130 | 146 |
Other non-current liabilities | 15 | 29 |
Total other non-current liabilities | $ 188 | $ 254 |
Pension benefits
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Dec. 31, 2011
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Pension benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension benefits | Note 29 - Pension benefits The Company has a defined benefit pension plan covering substantially all Norwegian employees. A significant part of this plan is administered by a life insurance company. In June 2009 we introduced a defined contribution plan for all new employees employed onshore. Under the new scheme, the Company contributes to the employee's pension plan amounts ranging into five to eight percent of the employee's annual salary. Existing onshore staff was given an option to join the new scheme or continue with their previous defined benefit plan. For onshore employees in Norway, continuing with the defined benefit plan, the primary benefits are retirement pension of approximately 66 percent of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66 percent of the total of 12 times the Norwegian Social Security Base. Most employees in this group may choose to retire at 62 years of age on a pre-retirement pension. Offshore employees in Norway have retirement and long-term disability pension of approximately 60 percent of salary at retirement age of 67. Offshore employees on mobile units may choose to retire at 60 years of age on a pre-retirement pension. On December 31, 2006, Seadrill adopted the recognition and disclosure provisions of ASC Topic 715 Compensation – Retirement Benefits (formerly SFAS No.158, Employer's Accounting for Defined Benefit Pension and other Postretirement Plans, an amendment of formerly FASB Statements No. 87, 88 and 123(R)). ASC Topic 715 requires the recognition of the funded status of the Defined Benefit and Postretirement Benefits Other Than Pensions ("OPEB") plans on the December 31, 2006 balance sheet with a corresponding adjustment to accumulated other comprehensive income. The adjustment to accumulated other comprehensive income at adoption represents the net unrecognized actuarial losses, unrecognized prior service costs, and unrecognized transition obligation remaining from the initial application of ASC Topic 715, all of which were previously netted against the plans' funded status on the balance sheet. These amounts will be subsequently recognized as net periodic pension cost pursuant to our historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. Effect of formerly SFAS No. 158 on the consolidated balance sheet
Annual pension cost
The funded status of the defined benefit plan
Change in benefit obligations
Change in pension plan assets
Pension obligations are actuarially determined and are critically affected by the assumptions used, including the expected return on plan assets, discount rates, compensation increases and employee turnover rates. The Company periodically reviews the assumptions used, and adjusts them and the recorded liabilities as necessary. The expected rate of return on plan assets and the discount rate applied to projected benefits are particularly important factors in calculating the Company's pension expense and liabilities. The Company evaluates assumptions regarding the estimated rate of return on plan assets based on historical experience and future expectations on investment returns, which are calculated by a third party investment advisor utilizing the asset allocation classes held by the plan's portfolios. The discount rate is based on the Norwegian government 10 year-bond effective yield. Changes in these and other assumptions used in the actuarial computations could impact the projected benefit obligations, pension liabilities, pension expense and other comprehensive income.
The weighted-average asset allocation of funds related to the Company's defined benefit plan at December 31, was as follows:
The investment policies and strategies for the pension benefit plan funds do not use target allocations for the individual asset categories. The investment objectives are to maximize returns subject to specific risk management policies. The Company diversifies its allocation of plan assets by investing in both domestic and international fixed income securities and domestic and international equity securities. These investments are readily marketable and can be sold to fund benefit payment obligations as they become payable. The estimated yearly return on pension assets was 4.60 percent in 2011 and 5.30 percent in 2010. Cash flows - Contributions expected to be paid The table below shows the Company's expected annual pension plan contributions under defined benefit plans for the years 2012-2021. The expected payments are based on the assumptions used to measure the Company's obligations at December 31, 2011 and include estimated future employee services.
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Deconsolidation of subsidiary (Tables)
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Dec. 31, 2011
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Deconsolidation of subsidiary [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Re-measurement of any retained equity interest in former subsidiary at fair value | A change in control is considered a re-measurement event; therefore, upon losing control of Archer, we have re-measured at fair value any retained equity interest in the former subsidiary.
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Share capital (Tables)
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Dec. 31, 2011
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Share capital [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital |
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Other non-current assets (Tables)
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Dec. 31, 2011
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Other non-current assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other non-current assets | Note 21 – Other non-current assets
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Deferred charges | Deferred charges represent debt arrangement fees that are capitalized and amortized to interest expense over the life of the debt instrument.
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Taxation (Tables)
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Dec. 31, 2011
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Taxation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income taxes | Income taxes consist of the following:
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Income tax reconciliation | The income taxes for the years ended December 31 differed from the amount computed by applying the statutory income tax rate of 0 % as follows:
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Net deferred tax assets (liabilities) | Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets (liabilities) consist of the following: Deferred Tax Assets:
Deferred Tax Liability:
Net deferred taxes are classified as follows:
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Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties | The changes to our liabilities related to unrecognized tax benefits, excluding interest and penalties that we recognize as a component of income tax expense, where as follows:
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Earliest tax years that remain subject to examination by major taxable jurisdictions | The parent company, Seadrill Limited, is headquartered in Bermuda where we have been granted a tax exemption until 2035. Other jurisdictions in which the Company and its subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, the Company may pay tax within some jurisdictions even though it may have an overall loss at the consolidated level. The following table summarizes the earliest tax years that remain subject to examination by the major taxable jurisdictions in which the Company operates:
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General information
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12 Months Ended |
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Dec. 31, 2011
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General information [Abstract] | |
General information | Note 1- General information Seadrill Limited ("Seadrill" or the "Company") was incorporated in Bermuda in May 2005, and is a listed company on the Oslo Stock Exchange and the New York Stock Exchange. Seadrill, through a number of acquisitions of other companies and contracts for newbuildings, has developed into one of the largest international offshore drilling contractors, providing services within drilling and well services. As of December 31, 2011 the Company owned a versatile fleet consisting of drillships, jack-up rigs, semi-submersible rigs and tender rigs for operations in shallow and deepwater areas, as well as benign and harsh environments, totaling 55 offshore drilling units, including fifteen units under construction. In addition to owning and operating offshore floaters, jack-up rigs and tender rigs, we provide platform drilling, well intervention and engineering services through the separately Oslo Stock Exchange listed company Seawell Limited, now renamed Archer Ltd ("Archer"), a Bermuda company in which we own 39.9% at the end of December 2011. Effective from February 2011, Archer is no longer fully consolidated into our financial statements, but accounted for as an investment in an associated company. As used herein, and unless otherwise required by the context, the term "Seadrill" refers to Seadrill Limited and the terms "Company", "we", "Group", "our" and words of similar import refer to Seadrill and its consolidated companies. The use herein of such terms as group, organization, we, us, our and its, or references to specific entities, is not intended to be a precise description of corporate relationships. Basis of presentation The financial statements are presented in accordance with generally accepted accounting principles in the United States of America (US GAAP). The amounts are presented in United States dollar (US dollar) rounded to the nearest million, unless otherwise stated. In 2011 we have changed the presentation of unbilled revenue, previously presented as other current assets, now presented under the Accounts receivable line in the Consolidated Balance Sheet. We have adjusted December 2010 figures accordingly for comparison. We have in 2010 and 2011 significantly expanded our fleet of drilling rigs through acquisitions of new rigs and newbuilding orders. In response to this development and the deconsolidation of Archer, management has reviewed our internal reporting structure including the operating and reporting business segments. This review has resulted in a change in our reporting segments reflecting how the chief operating decision makers assess performance and allocates resources. This change had effect from January 1, 2011, but the segments have also been retrospectively recasted for comparison. The new segments are floaters, jack-up rigs, tender rigs and well services. The accompanying consolidated financial statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group's interest in associated entities. Investments in companies in which the Company directly or indirectly holds more than 50% of the voting control are consolidated in the financial statements, as well as certain variable interest entities of which the Company is deemed to be the primary beneficiary. In accordance with US GAAP, Seadrill's acquisition of Scorpion Offshore Ltd in June 2010 and Archer's acquisitions of Universal Wireline Inc in January 2011, Gray Wireline Service Inc in December 2010, Rig Inspection Services limited in August 2010 have been accounted for as purchases in accordance with Statement of Financial Accounting Standards No. 141R (currently Accounting Standards Codification (ASC) Topic 805 Business Combinations). These acquisitions are described in more detail in Note 25 (Acquisitions). The fair value of the assets acquired and liabilities assumed were included in the Company's consolidated financial statements beginning on the date when control was achieved. Derivative financial instruments, financial instruments that are held for trading or classified as available-for-sale and other investments in entities owned less than 20% where the Company does not exercise significant influence, are recognized at fair value if fair value is readily determinable. Non-current assets and disposal groups held for sale are stated at the lower of their carrying amount or fair value less costs of sale. The accounting policies set out below have been applied consistently to all periods in these consolidated financial statements. Basis of consolidation The consolidated financial statements include the assets and liabilities of the Company and its subsidiaries and certain variable interest entities, ("VIE"s) in which the Company is deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. A variable interest entity is defined in Accounting Standards Codification ("ASC") Topic 810 "Consolidation" ("ASC 810") as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either i) the power to direct the activities of the entity that most significantly impact on its economic success, ii) the obligation to absorb the expected losses of the entity, or iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. ASC 810 requires a variable interest entity to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity's economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we fully consolidate the entity. Investment in companies in which we hold an ownership interest of between 20% and 50%, and over which we exercise significant influence, but do not consolidate, are accounted for using the equity method. The Company records its investments in associated companies and its share of earnings or losses in the consolidated statements of operations as "Share in results from associated companies". The excess, if any, of purchase price over book value of the Company's investments in equity method investees is included in the accompanying consolidated balance sheets in "Investment in associated companies". Investments in companies in which our ownership is less than 20% are valued at fair value unless it is not possible to estimate fair value, then the cost method is used. Intercompany transactions and internal sales have been eliminated on consolidation. Unrealized gains and losses arising from transactions with associates are eliminated to the extent of the Company's interest in the entity. |
Long-term interest bearing debt and interest expenses (Tables)
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Dec. 31, 2011
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Long-term interest bearing debt and interest expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt facilities | As of December 31, 2011 and 2010, the Company had the following debt facilities:
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Maturities of outstanding debt | The outstanding debt as of December 31, 2011 is repayable as follows:
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