Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Paragon Offshore plc | ' |
Entity Central Index Key | '0001594590 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 84,753,393 |
CONSOLIDATED_AND_COMBINED_BALA
CONSOLIDATED AND COMBINED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $81,908 | $36,581 |
Accounts receivable | 441,875 | 356,241 |
Prepaid and other current assets | 119,782 | 51,182 |
Total current assets | 643,565 | 444,004 |
Property and equipment, at cost | 4,497,399 | 6,067,066 |
Accumulated depreciation | -2,463,764 | -2,607,382 |
Property and equipment, net | 2,033,635 | 3,459,684 |
Other assets | 103,092 | 79,111 |
Total assets | 2,780,292 | 3,982,799 |
Current liabilities | ' | ' |
Current maturities of long-term debt | 6,500 | 0 |
Accounts payable | 147,352 | 124,442 |
Accrued payroll and related costs | 66,753 | 60,738 |
Taxes payable | 90,920 | 0 |
Interest payable | 14,634 | 412 |
Other current liabilities | 109,557 | 40,962 |
Total current liabilities | 435,716 | 226,554 |
Long-term debt | 1,670,087 | 1,561,141 |
Deferred income taxes | 79,482 | 101,703 |
Other liabilities | 120,110 | 88,068 |
Total liabilities | 2,305,395 | 1,977,466 |
Commitments and contingencies (Note 16) | ' | ' |
Equity | ' | ' |
Ordinary shares, $0.01 par value, 101,704,000 shares authorized;84,753,393 issued and outstanding at September 30, 2014 | 848 | 0 |
Additional paid-in capital | 1,422,387 | 0 |
Retained earnings | -912,033 | 0 |
Net parent investment | 0 | 2,005,339 |
Accumulated other comprehensive loss | -36,305 | -6 |
Total equity | 474,897 | 2,005,333 |
Total liabilities and equity | $2,780,292 | $3,982,799 |
CONSOLIDATED_AND_COMBINED_BALA1
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 |
Statement Of Financial Position [Abstract] | ' |
Ordinary shares, par value | $0.01 |
Ordinary shares, authorized | 101,704,000 |
Ordinary shares, issued | 84,753,393 |
Ordinary shares, outstanding | 84,753,393 |
CONSOLIDATED_AND_COMBINED_STAT
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Operating revenues | ' | ' | ' | ' |
Contract drilling services | $456,174 | $468,348 | $1,410,471 | $1,345,967 |
Reimbursables | 40,481 | 12,840 | 63,374 | 36,486 |
Labor contract drilling services | 8,562 | 8,466 | 24,919 | 26,150 |
Other | 5 | 28 | 5 | 94 |
Total operating revenues | 505,222 | 489,682 | 1,498,769 | 1,408,697 |
Operating costs and expenses | ' | ' | ' | ' |
Contract drilling services | 217,378 | 219,022 | 666,158 | 670,146 |
Reimbursables | 35,592 | 9,588 | 51,442 | 27,185 |
Labor contract drilling services | 6,593 | 6,110 | 19,029 | 17,856 |
Depreciation and amortization | 108,027 | 105,445 | 331,147 | 306,046 |
General and administrative | 12,037 | 16,911 | 37,965 | 47,914 |
Loss on impairment | 928,947 | 3,585 | 928,947 | 3,585 |
Gain on disposal of assets, net | 0 | -35,646 | 0 | -35,646 |
Gain on contract settlements/extinguishments, net | 0 | -22,573 | 0 | -24,373 |
Gain on repurchase of long-term debt | -6,931 | 0 | -6,931 | 0 |
Total operating costs and expenses | 1,301,643 | 302,442 | 2,027,757 | 1,012,713 |
Operating income (loss) | -796,421 | 187,240 | -528,988 | 395,984 |
Other income (expense) | ' | ' | ' | ' |
Interest expense, net of amount capitalized | -22,453 | -1,318 | -28,725 | -3,553 |
Interest income and other, net | 340 | 1,237 | 865 | 1,461 |
Income (loss) before income taxes | -818,534 | 187,159 | -556,848 | 393,892 |
Income tax provision | -75,682 | -29,524 | -117,757 | -71,142 |
Net income (loss) | ($894,216) | $157,635 | ($674,605) | $322,750 |
Earnings per share | ' | ' | ' | ' |
Basic and diluted (Note 2) | ($10.14) | $1.80 | ($7.68) | $3.68 |
Weighted-average shares outstanding | ' | ' | ' | ' |
Basic and diluted (Note 2) | 84,753 | 84,753 | 84,753 | 84,753 |
CONSOLIDATED_AND_COMBINED_STAT1
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | ($894,216) | $157,635 | ($674,605) | $322,750 |
Other comprehensive income (loss), net of tax | ' | ' | ' | ' |
Foreign currency translation adjustments | -1,854 | 665 | -1,827 | -79 |
Foreign currency forward contracts | -3,073 | 0 | -3,073 | 0 |
Total other comprehensive income (loss), net | -4,927 | 665 | -4,900 | -79 |
Total comprehensive income | ($899,143) | $158,300 | ($679,505) | $322,671 |
CONSOLIDATED_AND_COMBINED_STAT2
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income | ($674,605) | $322,750 |
Adjustments to reconcile net income to net cash from operating activities: | ' | ' |
Depreciation and amortization | 331,147 | 306,046 |
Loss on impairment | 928,947 | 3,585 |
Gain on disposal of assets, net | 0 | -35,646 |
Gain on repurchase of Senior Notes | -6,931 | 0 |
Deferred income taxes | -11,425 | -11,514 |
Amortization of share-based compensation | 14,400 | 16,388 |
Net change in other assets and liabilities | -15,431 | -14,095 |
Net cash from operating activities | 566,102 | 587,514 |
Cash flows from investing activities | ' | ' |
Capital expenditures | -182,351 | -283,290 |
Proceeds from sale of assets | 6,570 | 61,000 |
Change in accrued capital expenditures | -3,000 | -17,313 |
Net cash from investing activities | -178,781 | -239,603 |
Cash flows from financing activities | ' | ' |
Net change in borrowings outstanding on bank credit facilities | 707,472 | 973,055 |
Proceeds from issuance of Senior Notes and Term Loan Facility | 1,710,550 | 0 |
Purchase of Senior Notes | -42,468 | 0 |
Debt issuance costs | -19,253 | -2,432 |
Net transfers to parent | -2,698,295 | -1,333,416 |
Net cash from financing activities | -341,994 | -362,793 |
Net change in cash and cash equivalents | 45,327 | -14,882 |
Cash and cash equivalents, beginning of period | 36,581 | 70,538 |
Cash and cash equivalents, end of period | 81,908 | 55,656 |
Supplemental information for non-cash activities | ' | ' |
Transfer from parent of property and equipment | 18,124 | 13,778 |
Total supplemental information for non-cash activities | $18,124 | $13,778 |
CONSOLIDATED_AND_COMBINED_STAT3
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Parent [Member] |
In Thousands | ||||||
Balance at Dec. 31, 2012 | $3,365,232 | $0 | $0 | $0 | ($185) | $3,365,417 |
Net income | 322,750 | 0 | 0 | 0 | 0 | 322,750 |
Net transfers to parent | -1,303,250 | 0 | 0 | 0 | 0 | -1,303,250 |
Foreign currency translation adjustments | -79 | 0 | 0 | 0 | -79 | 0 |
Balance at Sep. 30, 2013 | 2,384,653 | 0 | 0 | 0 | -264 | 2,384,917 |
Balance at Dec. 31, 2013 | 2,005,333 | 0 | 0 | 0 | -6 | 2,005,339 |
Net income | -674,605 | 0 | 0 | -912,033 | 0 | 237,428 |
Foreign currency translation adjustments | -1,827 | 0 | 0 | 0 | -1,827 | 0 |
Net changes in parent investment | -852,624 | 0 | 0 | 0 | 0 | -852,624 |
Distribution by former parent, value | 0 | 848 | 1,419,744 | 0 | -30,449 | -1,390,143 |
Distribution by former parent, shares | ' | 84,753 | ' | ' | ' | ' |
Stock-based compensation | 2,643 | 0 | 2,643 | 0 | 0 | 0 |
Cash flow hedges | -4,023 | 0 | 0 | 0 | -4,023 | 0 |
Balance at Sep. 30, 2014 | $474,897 | $848 | $1,422,387 | ($912,033) | ($36,305) | $0 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | |||
Organization and Basis of Presentation | ' | |||
Note 1—Organization and Basis of Presentation | ||||
Organization and Business | ||||
Paragon Offshore plc (together with its subsidiaries, “Paragon,” the “Company,” “we,” “us” or “our”) is a global provider of offshore drilling rigs with a fleet that includes 34 jackups and eight floaters (five drillships and three semisubmersibles), and one floating production storage and offloading unit (“FPSO”). We refer to our semisubmersibles and drillships collectively as “floaters.” We also operate the Hibernia platform offshore of Canada. Our primary business is to contract our drilling rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for our exploration and production customers on a dayrate basis around the world. | ||||
On July 17, 2014, Paragon Offshore Limited, an indirect wholly owned subsidiary of Noble Corporation plc (“Noble”) incorporated under the laws of England and Wales, re-registered under the Companies Act 2006 as a public limited company under the name of Paragon Offshore plc. Noble transferred to us the assets and liabilities (the “Separation”) constituting most of Noble’s standard specification drilling units and related assets, liabilities and business. On August 1, 2014, Noble made a pro rata distribution to its shareholders of all of our issued and outstanding ordinary shares (the “Distribution” and, collectively with the Separation, the “Spin-Off”). In connection with the Distribution, Noble shareholders received one ordinary share of Paragon for every three ordinary shares of Noble owned. | ||||
Basis of Presentation | ||||
The consolidated and combined financial information contained in this report includes periods that ended prior to the Spin-Off on August 1, 2014. For all periods prior to the Spin-Off, the unaudited combined financial statements and related discussion of financial condition and results of operations contained in this report pertain to the historical results of the Noble Standard-Spec Business (our “Predecessor”), which comprised the entire standard specification drilling fleet and related operations of Noble. Our Predecessor’s historical combined financial statements include three standard specification drilling units that were retained by Noble and three standard specification drilling units that were sold by Noble prior to the Separation. | ||||
Our Predecessor’s historical combined financial statements for the periods prior to the Spin-Off include assets and liabilities that are specifically identifiable or have been allocated to our Predecessor. Costs directly related to our Predecessor have been included in the accompanying financial statements. Our Predecessor received service and support functions from Noble and the costs associated with these support functions have been allocated to our Predecessor using various inputs, such as head count, services rendered, and assets assigned to our Predecessor. These allocated costs are primarily related to corporate administrative expenses, employee related costs including pensions and other benefits, and corporate and shared employees for the following functional groups: | ||||
— information technology, | ||||
— legal services, | ||||
— accounting, | ||||
— finance services, | ||||
— human resources, | ||||
— marketing, | ||||
— treasury, and | ||||
— other corporate and infrastructural services. | ||||
We consolidate the historical combined financial results of our Predecessor in our consolidated financial statements for all periods prior to the Spin-Off. All financial information presented after the Spin-Off represents the results of operations, financial position and cash flows of Paragon. Accordingly: | ||||
· | Our Consolidated and Combined Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2014 consist of the consolidated results of Paragon for the two months ended September 30, 2014, and the combined results of our Predecessor for the prior month or months. Our Combined Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2013 consist entirely of the combined results of our Predecessor. Our net income for the periods prior to July 31, 2014, was recorded to “Net parent investment.” | |||
· | Our Consolidated and Combined Balance Sheet at September 30, 2014 consists of the balances of Paragon, while at December 31, 2013, the Combined Balance Sheet consists of the balances of our Predecessor. | |||
· | Our Consolidated and Combined Statement of Cash Flows for the nine months ended September 30, 2014 consists of the consolidated results of Paragon for the two months ended September 30, 2014, and the combined results of our Predecessor for the seven months ended July 31, 2014. Our Combined Statement of Cash Flows for the nine months ended September 30, 2013 consists entirely of the combined results of our Predecessor. | |||
· | Our Consolidated and Combined Statement of Changes in Equity for the nine months ended September 30, 2014 consists of both the activity for our Predecessor prior to August 1, 2014, and the activity for Paragon completed in connection with, and subsequent to, the Distribution on August 1, 2014. Our Combined Statement of Changes in Equity for the nine months ended September 30, 2013 consists of activity for our Predecessor recorded to “Net parent investment.” | |||
Because our Predecessor previously operated within Noble’s corporate cash management program for all periods prior to the Distribution, funding requirements and related transactions between our Predecessor and Noble have been summarized and reflected on the balance sheet as “Net parent investment” without regard to whether the funding represents a receivable, liability or equity. Based on the terms of our Separation from Noble, we ceased being a part of Noble’s corporate cash management program. Any transactions with Noble after August 1, 2014 have been and will continue to be, cash settled in the ordinary course of business, and such amounts are included in “Accounts payable” on our consolidated balance sheet. | ||||
Separation from Noble | ||||
Prior to the Spin-off, our total equity represented the cumulative net parent investment by Noble in us, including any prior net income attributable to our Predecessor as part of Noble. At the Spin-off, Noble contributed its entire net parent investment in our Predecessor to us. Concurrent with the Spin-off and in accordance with the terms of our Separation from Noble, certain assets and liabilities were transferred between us and Noble, which have been recorded as part of the net capital contributed by Noble. The following table presents the opening balance sheet of our Predecessor as of August 1, 2014 that was distributed to us in connection with the Spin-Off. | ||||
August 1, | ||||
2014 | ||||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | 104,152 | ||
Accounts receivable | 377,324 | |||
Prepaid and other current assets | 126,649 | |||
Total current assets | 608,125 | |||
Property and equipment, at cost | 5,615,161 | |||
Accumulated depreciation | (2,640,273 | ) | ||
Property and equipment, net | 2,974,888 | |||
Other assets | 102,419 | |||
Total assets | $ | 3,685,432 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Current maturities of long-term debt | $ | 4,875 | ||
Accounts payable | 129,952 | |||
Accrued payroll and related costs | 67,256 | |||
Taxes payable | 53,384 | |||
Interest payable | 3,770 | |||
Other current liabilities | 115,647 | |||
Total current liabilities | 374,884 | |||
Long-term debt | 1,725,125 | |||
Deferred income taxes | 79,659 | |||
Other liabilities | 115,621 | |||
Total liabilities | 2,295,289 | |||
Equity | ||||
Ordinary shares | 848 | |||
Additional paid-in capital | 1,419,744 | |||
Accumulated other comprehensive loss | (30,449 | ) | ||
Total equity | 1,390,143 | |||
Total liabilities and equity | $ | 3,685,432 | ||
Unaudited Interim Information | ||||
The unaudited interim consolidated and combined financial statements of Paragon Offshore plc and its subsidiaries, including the combined financial results of our Predecessor, as of September 30, 2014, and for the three and nine months ended September 30, 2014 and 2013, included herein, have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures have been condensed or omitted as permitted by such rules. These unaudited consolidated and combined financial statements should therefore be read in conjunction with the audited combined financial statements and the notes thereto included in our registration statement filed with the Securities and Exchange Commission (the “SEC”) on Form 10, as amended. In our opinion, the unaudited interim consolidated and combined financial statements reflect all adjustments considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Note 2—Earnings Per Share | |||||||||||||||||
As stated in Note 3, “Share-Based Compensation,” our outstanding share-based payment awards currently consist solely of restricted stock units. These unvested restricted stock units, which contain non-forfeitable rights to dividends, are participating securities and are included in the computation of earnings per share pursuant to the “two-class” method. The “two-class” method allocates undistributed earnings between ordinary shares and participating securities. Weighted average shares outstanding, basic and diluted, has been computed based on the weighted average number of ordinary shares outstanding during the applicable period. Restricted stock units do not represent ordinary shares outstanding until they are vested and converted into ordinary shares. The diluted earnings per share calculation under the two class method is the same as our basic earnings per share calculation as we currently have no stock options or other potentially dilutive securities outstanding. | |||||||||||||||||
On August 1, 2014, 84.8 million of our ordinary shares were distributed to Noble’s shareholders in conjunction with the Spin-Off. For comparative purposes and to provide a more meaningful calculation of weighted average shares outstanding, we have assumed this amount to be outstanding as of the beginning of each period prior to the Spin-Off presented in the calculation of weighted average shares outstanding, basic and diluted. Unvested restricted stock units that have been granted to our employees in conjunction with the Noble 1991 Plan, as defined in Note 3, “Share-Based Compensation” are also assumed to be outstanding as of the beginning of each period prior to the Spin-Off presented in the calculation of weighted average unvested share-based payment awards. | |||||||||||||||||
The following table sets forth the computation of basic and diluted net income and earnings per share: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
(In thousands, except per share amounts) | September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Allocation of income - basic and diluted | |||||||||||||||||
Net income | $ | (894,216 | ) | $ | 157,635 | $ | (674,605 | ) | $ | 322,750 | |||||||
Earnings allocated to unvested share-based payment awards | 35,181 | (5,307 | ) | 24,004 | (10,867 | ) | |||||||||||
Net income to ordinary shareholders - | $ | (859,035 | ) | $ | 152,328 | $ | (650,601 | ) | $ | 311,883 | |||||||
Basic and diluted | |||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||
Basic and diluted | 84,753 | 84,753 | 84,753 | 84,753 | |||||||||||||
Weighted average unvested share-based payment awards | 3,471 | 2,953 | 3,127 | 2,953 | |||||||||||||
Earnings per share | |||||||||||||||||
Basic and diluted | $ | (10.14 | ) | $ | 1.8 | $ | (7.68 | ) | $ | 3.68 | |||||||
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||
Share-Based Compensation | ' | ||||||||
Note 3—Share-Based Compensation | |||||||||
Predecessor Plan | |||||||||
For all periods prior to the Spin-Off, our Predecessor was managed in the normal course of business by Noble and its subsidiaries. Noble provides a stock-based compensation plan that is granted and settled in stock of Noble. The Noble plan permits the granting of various types of awards including stock options and restricted stock units. Prior to the Spin-off and to the extent that Company employees participated in these programs, the results of our Predecessor were allocated a portion of the associated expenses (see Note 20, “Related Parties (Including Relationship with Parent and Corporate Allocations)” for total costs allocated to us by Noble). | |||||||||
Paragon employees’ participation in Noble’s 1991 Stock Option and Restricted Stock Plan (“Noble 1991 Plan”) was terminated as of our Separation from Noble at the time of the Distribution. The Noble 1991 Plan provided for the granting of options to purchase Noble shares and the awarding of restricted stock units in the form of both time-vested restricted stock units (“TVRSU’s”) and market based performance-vested restricted stock units (“PVRSU’s”). | |||||||||
Upon termination in Noble’s 1991 Plan, our employees’ rights to exercise Noble stock options continues for up to the shorter of five years or the remaining term of the option and the vesting of each option was accelerated so that each option is now fully vested. Paragon has no outstanding stock option grants as of September 30, 2014 under this arrangement. | |||||||||
Noble TVRSU’s held by our employees under the Noble 1991 Plan have been cancelled. At the time of the Distribution, Paragon granted 2,675,839 TVRSU’s that are intended to be of equivalent value and remaining duration with regard to such cancelled awards. | |||||||||
With respect to outstanding Noble PVRSU’s under the Noble 1991 Plan, a portion of such PVRSU’s continues to be held by those employees and a portion has been cancelled. This apportionment was based on the performance cycle that relates to each applicable Noble performance-vested restricted stock unit award, and the ratio of the number of months remaining in the award’s performance cycle after our Separation from Noble relative to the total number of months (i.e., 36 months) of such performance cycle. This ratio has been applied to each applicable grant of Noble PVRSU’s to determine the portion thereof that has been cancelled, the remainder of which has been continued. With regard to the cancelled portion of Noble PVRSU’s, we have either granted the affected employee Paragon PVRSU’s that are intended to be of equivalent value and duration at the time of grant to the cancelled portion of the Noble award, or provided the employee compensation of equivalent value to the benefit the employee would have received had the cancelled portion of the Noble awards remained in effect. At the time of the Distribution, Paragon granted 277,118 PVRSU’s that are intended to be of equivalent value and remaining duration with regard to the cancelled portion. | |||||||||
Paragon Plans | |||||||||
With respect to the cancellations described above, we have adopted new equity incentive plans for our employees and directors to administer replacement awards of Paragon TVRSU’s and PVRSU’s, as well as to provide for the granting of new awards for the periods following our Separation from Noble. On June 30, 2014, our board of directors adopted the Paragon Offshore plc 2014 Employee Omnibus Incentive Plan (the “Employee Plan”), which was approved by Noble as Paragon Offshore’s sole stockholder on July 15, 2014 and became effective as of the date of the Distribution. Subject to certain adjustments, up to 8,475,340, or 10% of the number of Paragon Offshore’s outstanding shares at the time of the Distribution, were authorized under our Employee Plan for issuance to eligible participants in the form of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards. On June 30, 2014, our board of directors also adopted the Paragon Offshore plc Director Omnibus Plan (the “Director Plan”), which was approved by Noble as Paragon Offshore’s sole stockholder on July 15, 2014 and became effective as of the date of the Distribution. The maximum number of Paragon Offshore ordinary shares that may be subject to awards granted under the Director Plan is 500,000 shares, subject to certain adjustments. The Director Plan provides that our board of directors may award stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to directors as it may determine from time to time. | |||||||||
Shares available for issuance and outstanding restricted stock units for our two stock incentive plans as of September 30, 2014 are as follows: | |||||||||
(In shares) | Employee | Director | |||||||
Plan | Plan | ||||||||
Shares available for future awards or grants | 4,647,365 | 339,060 | |||||||
Outstanding unvested restricted stock units | 3,827,975 | 160,940 | |||||||
As noted above, we have awarded both TVRSU’s and PVRSU’s under our Employee Plan and our Director Plan. The TVRSU’s generally vest over a three year period. The number of PVRSU’s which vest will depend on the degree of achievement of specified corporate performance criteria over a three-year performance period. Paragon performance criteria has not yet been determined but is to be strictly market based as defined by Financial Accounting Standards Board (“FASB”) standards. | |||||||||
Share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as compensation cost using a straight-line method over the service period. Share-based amortization recognized during the three and nine months ended September 30, 2014, not including amounts allocated to our Predecessor, totaled $2.6 million. At September 30, 2014, there was $29.0 million of total unrecognized compensation cost related to the TVRSU’s which is expected to be recognized over a remaining weighted-average period of 2.1 years. At September 30, 2014, there was $1.6 million of total unrecognized compensation cost related to the PVRSU’s which is expected to be recognized over a remaining weighted-average period of 2.0 years. The total potential compensation for PVRSU’s is recognized over the service period regardless of whether the performance thresholds are ultimately achieved. |
Property_and_Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2014 | |
Property Plant And Equipment [Abstract] | ' |
Property and Equipment | ' |
Note 4—Property and Equipment | |
Property and equipment is stated at cost. Interest incurred related to property under construction including major overhaul, improvement and asset replacement projects is capitalized as a component of construction costs. Interest capitalized in our Predecessor’s results relates to Noble’s revolving credit facilities and commercial paper program, while interest capitalized in Paragon’s results relates to our Senior Notes and Term Loan Facility (each as defined in Note 5, “Debt”). Our capital expenditures, including capitalized interest, totaled $71.7 million and $182.4 million for the three and nine months ended September 30, 2014, respectively, as compared to historical Predecessor capitalized expenditures, including capitalized interest, of $67.0 million and $283.3 million for the three and nine months ended September 30, 2013. | |
Interest expense capitalized in these consolidated and combined financial statements for the three and nine months ended September 30, 2014 was $0.2 million and $2.6 million, respectively, as compared to Predecessor capitalized interest of $1.8 million and $4.2 million for the three and nine months ended September 30, 2013. | |
We evaluate the impairment of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, on an annual basis, we complete an impairment analysis on our rig fleet. An impairment loss on our property and equipment exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the asset’s carrying value over the estimated fair value. As part of this analysis, we make assumptions and estimates regarding future market conditions. To the extent actual results do not meet our estimated assumptions, we may take an impairment loss in the future. | |
As a result of recent developments, including the decline in the price of Brent crude oil and a decrease in contractual activities, particularly for floating rigs, we have concluded that a triggering event occurred that required us to perform an impairment analysis of our fleet of drilling rigs, especially our floaters in Brazil. We compared the net book value of our drilling rigs to the relative recoverable value, which was determined using an undiscounted cash flow analysis. As a result of this analysis, we determined that the Paragon DPDS1, Paragon DPDS2 and Paragon DPDS3 drilling rigs were impaired. We calculated the fair value of these drilling rigs after considering quotes from rig brokers, a cost approach and an income approach, which utilized significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to estimated dayrate revenue, rig utilization and anticipated costs for the remainder of the rigs’ useful lives. Additionally, we are currently exploring disposition alternatives for the Paragon FPSO1. We recognized an impairment on this unit after we determined the fair value based on quotes from brokers and price indications from potential interested buyers. Based on the above analysis, our estimates of fair value resulted in the recognition of an impairment loss of $929 million for the three and nine months ended September 30, 2014. |
Debt
Debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt | ' | |||||||
Note 5—Debt | ||||||||
A summary of long-term debt at September 30, 2014 and December 31, 2013 is as follows: | ||||||||
September 30, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Senior Notes due 2022, bearing fixed interest at 6.75% per annum | $ | 477,100 | $ | — | ||||
Senior Notes due 2024, bearing fixed interest at 7.25% per annum | 552,660 | — | ||||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | 646,827 | — | ||||||
Noble Credit Facilities / Commercial Paper Program | — | 1,561,141 | ||||||
Less: Current maturities of long-term debt | (6,500 | ) | — | |||||
$ | 1,670,087 | $ | 1,561,141 | |||||
Predecessor Debt | ||||||||
Our Predecessor was supported by Noble’s three separate credit facilities which had an aggregate maximum available capacity of $2.9 billion (collectively, the “Noble Credit Facilities”). Predecessor long-term debt consisted of the amount drawn on the Noble Credit Facilities. Noble established a commercial paper program, which allowed Noble to issue up to $2.7 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program were supported by the unused capacity under the Noble Credit Facilities. The outstanding amounts of commercial paper reduce availability under the Noble Credit Facilities. | ||||||||
As discussed below, Noble received approximately $1.7 billion in cash as settlement of intercompany notes in connection with the Separation. Noble used these proceeds to repay amounts outstanding under its commercial paper program. Accordingly, debt that is included in our Predecessor’s combined financial statements represents the amounts outstanding under Noble’s commercial paper program, and has been pushed down to our Predecessor in accordance with guidance of the SEC. The remaining outstanding debt not repaid from our Predecessor’s debt at the time of the settlement of the intercompany notes is considered as part of “Net parent investment” in our Predecessor. | ||||||||
Paragon Debt | ||||||||
On June 17, 2014, we entered into a senior secured revolving credit agreement with lenders that provided commitments in the amount of $800 million (the “Revolving Credit Facility”). The Revolving Credit Facility has a term of five years. Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) an adjusted LIBOR, plus a margin ranging between 1.50% to 2.50%, depending on our leverage ratio, or (ii) the Base Rate. Under the Revolving Credit Facility we may also obtain up to $800 million of letters of credit. Issuance of letters of credit under the Revolving Credit Facility would reduce amounts available for borrowing. At September 30, 2014, we had no borrowings outstanding, and an aggregate amount of $8.8 million of letters of credit issued under the Revolving Credit Facility. | ||||||||
On July 18, 2014, we issued $1.08 billion of senior notes (the “Senior Notes”) and also borrowed $650 million under a term loan facility (the “Term Loan Facility”). The Term Loan Facility is secured by all but three of our rigs. The proceeds from the Term Loan Facility and the Senior Notes were used to repay $1.7 billion of intercompany indebtedness to Noble incurred as partial consideration for the Separation. The Senior Notes consisted of $500 million of 6.75% senior notes and $580 million of 7.25% senior notes, which mature on July 15, 2022 and August 15, 2024, respectively. The Senior Notes were issued without an original issue discount. Borrowings under the Term Loan Facility bear interest at an adjusted LIBOR rate plus 2.75%, subject to a minimum LIBOR rate of 1% or a base rate plus 1.75%, at our option. We are required to make quarterly principal payments of $1.6 million, or $6.5 million annually, and may prepay all or a portion of the amount outstanding under the Term Loan Facility at any time. The Term Loan Facility matures in July 2021. The loans under the Term Loan Facility were issued with 0.5% original issue discount. | ||||||||
In connection with the issuance of the aforementioned debt, we and our Predecessor incurred $35.1 million of issuance costs. We received the debt proceeds net of $16.2 million of issuance costs incurred. | ||||||||
The covenants and events of default under our Revolving Credit Facility, Senior Notes, and Term Loan Facility are substantially similar. The agreements governing these obligations contain covenants that place restrictions on certain merger and consolidation transactions; our ability to sell or transfer certain assets; payment of dividends; making distributions; redemption of stock; incurrence or guarantee of debt; issuance of loans; prepayment, redemption of certain debt, as well as incurrence or assumption of certain liens. In addition to these covenants, the Revolving Credit Facility includes a covenant requiring us to maintain a net leverage ratio (defined as total debt, net of cash and cash equivalents, divided by earnings excluding interest, taxes, depreciation and amortization charges) less than 4.00 to 1.00 and a covenant requiring us to maintain a minimum interest coverage ratio (defined as interest expense divided by earnings excluding interest, taxes, depreciation and amortization charges) greater than 3.00 to 1.00. As of September 30, 2014, we were in compliance with the covenants under our Revolving Credit Facility, Senior Notes, and Term Loan Facility by maintaining a net leverage ratio of 1.8 and an interest coverage ratio of 8.4. The impairment charge taken in the current quarter does not impact our debt covenant calculations because it is a non-cash charge. | ||||||||
During the three months ended September 30, 2014, we repurchased and cancelled an aggregate principal amount of $50.2 million of our Senior Notes at an aggregate cost of $43.1 million, including accrued interest. The repurchases consisted of $22.9 million aggregate principal amount of our 6.75% senior notes due 2022 and $27.3 million aggregate principal amount of our 7.25% senior notes due 2024. Subsequent to September 30, 2014, we repurchased and cancelled an aggregate principal amount of $10.0 million of our Senior Notes at an aggregate cost of $8.5 million, including accrued interest. The repurchases subsequent to September 30, 2014 consisted of $4.4 million aggregate principal amount of our 6.75% senior notes due 2022 and $5.6 million aggregate principal amount of our 7.25% senior notes due 2024. As a result of the repurchases, we recognized a total gain on debt retirement, net of the write-off of issuance costs, of approximately $8.4 million, of which approximately $6.9 million was recorded in the third quarter 2014, and included in “Gain on repurchase of long-term debt.” All Senior Notes repurchases were made using available cash balances. | ||||||||
Fair Value of Debt | ||||||||
Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair values of our Senior Notes and Term Loan Facility were based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). | ||||||||
The following table presents the estimated fair value of our long-term debt as of September 30, 2014: | ||||||||
30-Sep-14 | ||||||||
(In thousands) | Carrying | Estimated | ||||||
Value | Fair Value | |||||||
Senior unsecured notes: | ||||||||
6.75% Senior Notes due July 15, 2022 | $ | 477,100 | $ | 406,131 | ||||
7.25% Senior Notes due August 15, 2024 | 552,660 | 472,524 | ||||||
Total senior unsecured notes | $ | 1,029,760 | $ | 878,655 | ||||
Term Loan Facility, bearing interest at 3.75%, | $ | 646,827 | $ | 607,750 | ||||
net of unamortized discount | ||||||||
The carrying amounts of our variable-rate debt, the Revolving Credit Facility, approximates fair value because such debt bears short-term, market-based interest rates. We have classified this instrument as Level 2 as valuation inputs used for purposes of determining our fair value disclosure are readily available published LIBOR rates. |
Loss_on_Impairment
Loss on Impairment | 9 Months Ended |
Sep. 30, 2014 | |
Property Plant And Equipment Impairment Or Disposal [Abstract] | ' |
Loss on Impairment | ' |
Note 6—Loss on Impairment | |
As discussed in Note 4, “Property and Equipment,” during the third quarter of 2014, we recognized an impairment loss of $929 million on our three drillships in Brazil and our one cold-stacked FPSO in the U.S. Gulf of Mexico. | |
During the third quarter of 2013, our Predecessor recorded an impairment charge of approximately $3.6 million on our Predecessor’s two cold stacked submersible rigs due to the potential disposition of these assets to an unrelated third party. These submersible rigs were sold by our Predecessor in January 2014. |
Gain_on_Disposal_of_Assets_Net
Gain on Disposal of Assets, Net | 9 Months Ended |
Sep. 30, 2014 | |
Gain Loss On Sale Of Property Plant Equipment [Abstract] | ' |
Gain on Disposal of Assets, Net | ' |
Note 7—Gain on Disposal of Assets, Net | |
During the third quarter of 2013, our Predecessor completed the sale of the Noble Lewis Dugger for $61.0 million to an unrelated third party in Mexico. In connection with the sale, our Predecessor recorded a pre-tax gain of approximately $35.6 million. |
Gain_on_Contract_SettlementsEx
Gain on Contract Settlements/Extinguishments, Net | 9 Months Ended |
Sep. 30, 2014 | |
Contractors [Abstract] | ' |
Gain on Contract Settlements/Extinguishments, Net | ' |
Note 8—Gain on Contract Settlements/Extinguishments, Net | |
During the third quarter of 2013, Noble received $45.0 million related to the settlement of its claims against the former owners of FDR Holdings, Ltd., which Noble acquired in July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement. A portion of the settlement related to standard-specification rigs. This portion, totaling $22.6 million, was pushed down to our Predecessor, through an allocation, using the acquired rig values of the purchased rigs. |
Gain_on_Repurchase_of_LongTerm
Gain on Repurchase of Long-Term Debt | 9 Months Ended |
Sep. 30, 2014 | |
Long Term Debt [Abstract] | ' |
Gain on Repurchase of Long-Term Debt | ' |
Note 9—Gain on Repurchase of Long-Term Debt | |
During the third quarter of 2014, Paragon recorded a gain of approximately $6.9 million on debt retirement, net of the write-off of issuance costs, related to the repurchase and cancellation of a portion of the principal amount of our Senior Notes (See Note 5, “Debt”). |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 10—Income Taxes | |
We operate through various subsidiaries in numerous countries throughout the world. Consequently, income taxes have been based on the laws and rates in effect in the countries in which operations are conducted, or in which we and our subsidiaries or our Predecessor and its subsidiaries were considered to have a taxable presence. | |
The operations of our Predecessor have been included in the consolidated U.S. federal income tax return and certain foreign income tax returns of Noble. The income tax provisions and related deferred tax assets and liabilities that have been reflected in our Predecessor’s historical combined financial statements have been computed as if our Predecessor were a separate taxpayer using the separate return method. As a result, actual tax transactions that would not have occurred had our Predecessor been a separate entity have been eliminated in the preparation of these consolidated and combined financial statements. Income taxes of our Predecessor include results of the operations of the standard specification drilling units. In instances where the operations of the standard specification drilling units of our Predecessor were included in the filing of a consolidated or combined return with high-specification units, an allocation of income taxes was made. | |
Our effective tax rates for the three and nine months ended September 30, 2014 were approximately -9.2% and -21.1% on a pre-tax loss of $819 million and $557 million, respectively. The negative effective tax rates were primarily driven by an impairment loss of $929 million during the third quarter of 2014. The impairment had no corresponding tax benefit, and therefore, it did not decrease the tax expense expected to be incurred by the Company during 2014. Notwithstanding this impairment loss, our effective tax rates would have been higher than the effective tax rates of our Predecessor for the three and nine months ended September 30, 2013, which were approximately 15.8% and 18.1%, respectively. | |
Prior to the Spin-Off, Noble restructured certain aspects of our business to affect the Separation. This restructuring resulted in tax changes for our business and operations, including our inability to offset taxable operating income with interest expense attributable to borrowings under our senior note indenture and term loan agreement, and ownership of our rigs operating in certain jurisdictions which are now in new structures subject to higher tax rates than prior to the restructuring. Additionally, certain unfavorable discrete tax items were recorded, including the one in connection with legislation enacted by the U.K. government that restricts deductions on certain intercompany transactions, such as those relating to the bareboat charter agreements used in connection with our U.K. continental shelf operations. The legislation, enacted in July 2014 and effective retroactively to April 1, 2014, resulted in $6.8 million of income taxes recognized in the current quarter which related to the prior quarter. | |
At September 30, 2014, our reserve for uncertain tax positions totaled $39.9 million, and if not realized, would reduce our provision for income taxes by $39.9 million. At December 31, 2013, the reserve for uncertain tax positions of our Predecessor totaled $36.5 million. It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next 12 months primarily due to the completion of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits. | |
We and our Predecessor periodically transfer our drilling rigs between related entities included in these consolidated and combined financial statements. The unamortized tax benefit associated with these transfers totaled $44.2 million and $46.5 million at September 30, 2014 and December 31, 2013, respectively, and is included in “Other liabilities” in these combined balance sheets. |
Employee_Benefit_Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2014 | |
Compensation And Retirement Disclosure [Abstract] | ' |
Employee Benefit Plans | ' |
Note 11—Employee Benefit Plans | |
During the periods prior to Spin-Off, most of our employees were eligible to participate in various Noble benefit programs. The results of our Predecessor in these consolidated and combined financial statements include an allocation of the costs of such employee benefit plans. These costs were allocated based on our employee population for each of the periods presented. We consider the expense allocation methodology and results to be reasonable for all periods presented; however, the allocated costs included in the results of our Predecessor and included in these consolidated and combined financial statements could differ from amounts that would have been incurred by us if we operated on a standalone basis and are not necessarily indicative of costs to be incurred in the future. | |
We have instituted competitive compensation policies and programs, as well as carried over certain plans as a standalone public company, the expense for which may differ from the compensation expense allocated by Noble in our Predecessor’s historical combined financial statements. | |
Defined Benefit Plans | |
At Spin-Off, Noble sponsored two U.S. noncontributory defined benefit pension plans: one covering salaried employees and the other covering hourly employees, whose initial date of employment are prior to August 31, 2004 (“qualified U.S. plans”), and three non-U.S. noncontributory defined benefit pension plans. Two of the non-U.S. noncontributory plans were carried over by us and cover certain Europe-based salaried, non-union employees. Pension benefit expense related to these plans included in the accompanying consolidated and combined statements of income for the three and nine months ended September 30, 2014 totaled $0.8 million and $4.5 million, respectively, as compared to $2.8 million and $8.5 million for the three and nine months ended September 30, 2013. | |
Other Benefit Plans | |
At Spin-Off, Noble sponsored a 401(k) defined contribution plan and a profit sharing plan, which covered our Predecessor’s employees who are not otherwise enrolled in the above defined benefit plans. Other postretirement benefit expense related to these plans included in the accompanying consolidated and combined statements of income for the three and nine months ended September 30, 2014 totaled $0.5 million and $2.5 million, respectively, as compared to $1.2 million and $3.7 million for the three and nine months ended September 30, 2013. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2014 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' |
Derivative Instruments and Hedging Activities | ' |
Note 12—Derivative Instruments and Hedging Activities | |
Although we are a U.K. company, we define foreign currency as any non-U.S. denominated currency. Our functional currency is primarily the U.S. dollar. However, outside the United States, a portion of our expenses are incurred in local currencies. We are exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currencies that are other than the U.S. dollar. To help manage this potential risk, we periodically enter into derivative instruments to manage our exposure to fluctuations in foreign currency exchange rates, and we may conduct hedging activities in future periods to mitigate such exposure. We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives. We do not have any derivative contracts other than designated hedging instruments. | |
Cash Flow Hedges | |
Our North Sea, Mexico and Brazil operations have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we periodically enter into forward contracts, which settle monthly in the operations’ respective local currencies. We have entered into forward contracts for the remainder of 2014 such that we achieve hedge coverage of 60% or less of our forecasted local currency requirements. The notional amount of the forward contracts outstanding, expressed in U.S. dollars, was approximately $39.1 million at September 30, 2014. Total unrealized gains related to these forward contracts were not material as of September 30, 2014 and were recorded as part of “Accumulated other comprehensive loss” (“AOCL”). Subsequent to the Spin-Off, total realized gains related to these forward contracts were $0.9 million and were classified as “Contract drilling services operating costs and expenses” on the consolidated statement of operations for the three and nine months ended September 30, 2014. As of September 30, 2014, these forward contracts are designated as cash flow hedging instruments. | |
For our foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the hedged item. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. For the three and nine months ended September 30, 2014, no loss was recognized on our consolidated statement of operations due to hedge ineffectiveness. Additionally, there were no gains or losses recognized in income for the three and nine months ended September 30, 2014 as a result of excluding amounts from the assessment of hedge effectiveness or as a result of reclassifications to earnings following the discontinuance of any cash flow hedges. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||||
Note 13—Fair Value of Financial Instruments | ||||||||||||||||
The following table presents the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis: | ||||||||||||||||
30-Sep-14 | ||||||||||||||||
Estimated Fair Value Measurement | ||||||||||||||||
Carrying | Quoted | Significant | Significant | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | inputs | |||||||||||||||
(In thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets - | ||||||||||||||||
Foreign currency forward contracts | $ | 597 | $ | — | $ | 597 | $ | — | ||||||||
Liabilities - | ||||||||||||||||
Foreign currency forward contracts | $ | 593 | $ | — | $ | 593 | $ | — | ||||||||
The foreign currency forward contracts have been valued using actively quoted prices and quotes obtained from the counterparties to the contracts. Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying consolidated and combined balance sheets approximates fair value. | ||||||||||||||||
For the estimated fair value of our long-term debt, refer to Note 5, “Debt.” |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income Loss Disclosure [Abstract] | ' | ||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Note 14—Accumulated Other Comprehensive Loss | |||||||||||||||||
The following table sets forth the changes in the accumulated balances for each component of AOCL, net of tax, for the nine months ended September 30, 2014 and 2013. | |||||||||||||||||
(In thousands) | Gains / | Defined | Foreign | Total | |||||||||||||
(Losses) on | Benefit | Currency | |||||||||||||||
Cash Flow | Pension | Items | |||||||||||||||
Hedges (1) | Items (2) | ||||||||||||||||
Balance at December 31, 2013 | $ | - | $ | - | $ | (6 | ) | $ | (6 | ) | |||||||
Activity during period: | |||||||||||||||||
AOCL recorded in connection with Spin-Off | 4,027 | (21,770 | ) | (12,706 | ) | (30,449 | ) | ||||||||||
Other comprehensive loss before reclassification | (3,073 | ) | - | (1,827 | ) | (4,900 | ) | ||||||||||
Amounts reclassified from AOCL | (950 | ) | - | - | (950 | ) | |||||||||||
Net other comprehensive income (loss) | 4 | (21,770 | ) | (14,533 | ) | (36,299 | ) | ||||||||||
Balance at September 30, 2014 | $ | 4 | $ | (21,770 | ) | $ | (14,539 | ) | $ | (36,305 | ) | ||||||
-1 | Gains / (losses) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “Contract drilling services operating costs and expenses” on our consolidated and combined statements of income. See Note 12, “Derivative instruments and hedging activities” for additional information. | ||||||||||||||||
-2 | Defined benefit pension items relate to actuarial losses and the amortization of prior service costs. Reclassifications from AOCL are recognized as expense on our consolidated and combined statements of income through either “Contract drilling services” or “General and administrative.” See Note 11, “Employee benefit plans” for additional information. |
Deferred_Revenues_and_Costs
Deferred Revenues and Costs | 9 Months Ended |
Sep. 30, 2014 | |
Deferred Revenue And Costs Disclosure [Abstract] | ' |
Deferred Revenue and Costs | ' |
Note 15—Deferred Revenues and Costs | |
It is typical in our dayrate drilling contracts to receive compensation and incur costs for mobilization, equipment modification, or other activities prior to the commencement of the contract. Any such compensation may be paid through a lump-sum payment or other daily compensation. Pre-contract compensation and costs are deferred until the contract commences. The deferred pre-contract compensation and costs are amortized, using the straight-line method, into income over the term of the initial contract period, regardless of the activity taking place. This approach is consistent with the economics for which the parties have contracted. | |
Deferred revenues from drilling contracts totaled $17.6 million at September 30, 2014 as compared to $21.9 million at December 31, 2013. Such amounts are included in either “Other current liabilities” or “Other liabilities” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred revenues. Deferred costs associated with deferred revenues from drilling contracts totaled $8.4 million at September 30, 2014 as compared to $23.7 million at December 31, 2013. Such amounts are included in either “Prepaid and other current assets” or “Other assets” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred costs. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2014 | ||
Commitments And Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies | ' | |
Note 16—Commitments and Contingencies | ||
Litigation | ||
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims. | ||
We have received tax audit claims of approximately $295.2 million, of which $53.9 million is subject to indemnity by Noble, primarily in Mexico and Brazil, attributable to our income, customs and other business taxes. In addition, approximately $40.8 million of tax audit claims attributable to Mexico assessed against Noble may be allocable to us as a result of the Spin-Off. We have contested, or intend to contest, these assessments, including through litigation if necessary, and we believe the ultimate resolution of the outstanding assessments will not have a material adverse effect on our combined financial statements. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits, and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions. In some cases we will be required to post a surety bond or a letter of credit as collateral to defend us, and as of September 30, 2014, we have no surety bonds associated with tax audit claims outstanding. | ||
In addition, Petróleo Brasileiro S.A. (“Petrobras”) has notified us, along with other industry participants that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during the years 2008 and 2009 totaling $115.0 million, of which $32.0 million is subject to indemnity by Noble. Petrobras has also notified us that if they must pay such withholding taxes, they will seek reimbursement from us. We believe that we are contractually indemnified by Petrobras for these amounts and dispute the validity of the assessment. We have notified Petrobras of our position. We will, if necessary, vigorously defend our rights. If we were required to pay such reimbursement, however, the amount of such reimbursement could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. | ||
Insurance | ||
In connection with the Separation, we replaced our Predecessor’s insurance policies, which were supported by Noble, with substantially similar stand-alone insurance policies. We maintain certain insurance coverage against specified marine perils, which included physical damage and loss of hire. Damage caused by hurricanes has negatively impacted the energy insurance market, resulting in more restrictive and expensive coverage for named windstorm perils. | ||
We maintain insurance in the geographic areas in which we operate, although pollution, reservoir damage and environmental risks generally are not fully insurable. Our insurance policies and contractual rights to indemnity may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage or rights to indemnity for all risks, including loss of hire insurance on most of the rigs in our fleet. Uninsured exposures may include expatriate activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to shore-based terrorist acts or strikes. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could materially adversely affect our financial position, results of operations or cash flows. Additionally, there can be no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able to indemnify us against all these risks. | ||
Capital Expenditures | ||
In connection with our capital expenditure program, we have outstanding commitments, including shipyard and purchase commitments of approximately $58.0 million at September 30, 2014. | ||
Other | ||
At September 30, 2014, we had letters of credit of $8.8 million and performance bonds totaling $109.4 million supported by surety bonds outstanding. Certain of our subsidiaries issued guarantees to the temporary import status of rigs or equipment imported into certain countries in which we operated. These guarantees are issued in lieu of payment of custom, value added or similar taxes in those countries. | ||
Separation Agreements | ||
In connection with the Spin-off, on July 31, 2014, we entered into several definitive agreements with Noble or its subsidiaries that, among other things, set forth the terms and conditions of the Spin-Off and provide a framework for our relationship with Noble after the Spin-off, including the following agreements: | ||
— | Master Separation Agreement; | |
— | Tax Sharing Agreement; | |
— | Employee Matters Agreement; | |
— | Transition Services Agreement relating to services Noble and Paragon will provide to each other on an interim basis; and | |
— | Transition Services Agreement relating to Noble’s Brazil operations. | |
Pursuant to these agreements with Noble, the balance sheet consists of a total of approximately $68 million due from Noble, of which $62 million is classified as current, and approximately $90 million due to Noble, of which $67 million is classified as current. These receivables and payables primarily relate to rights and obligations under the Tax Sharing Agreement. | ||
Master Separation Agreement | ||
On July 31, 2014, we entered into a Master Separation Agreement with Noble Corporation, a Cayman Islands company and an indirect, wholly-owned subsidiary of Noble (“Noble-Cayman”), which provided for, among other things, the Distribution of our ordinary shares to Noble shareholders and the transfer to us of the assets and the assumption by us of the liabilities relating to our business and the responsibility of Noble for liabilities related to Noble’s, and in certain limited cases, our business. The Master Separation Agreement identified which assets and liabilities constitute our business and which assets and liabilities constitute Noble’s business. | ||
Tax Sharing Agreement | ||
On July 31, 2014, we entered into a Tax Sharing Agreement with Noble, which governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes following the Distribution. | ||
Employee Matters Agreement | ||
On July 31, 2014, we entered into an Employee Matters Agreement with Noble-Cayman to allocate liabilities and responsibilities relating to our employees and their participation in certain compensation and benefit plans maintained by Noble or a subsidiary of Noble. The Employee Matters Agreement provides that, following the Distribution, most of our employee benefits are provided under compensation and benefit plans adopted or assumed by us. In general, our plans are substantially similar to the plans of Noble or its subsidiaries that covered our employees prior to the completion of the Distribution. The Employee Matters Agreement also addresses the treatment of outstanding Noble equity awards held by transferring employees, including the grant of our equity awards or other rights with respect to Noble equity awards held by transferring employees that were cancelled in connection with the Spin-Off. | ||
Transition Services Agreement | ||
On July 31, 2014, we entered into a Transition Services Agreement with Noble-Cayman pursuant to which Noble-Cayman provides, on a transitional basis, certain administrative and other assistance, generally consistent with the services that Noble provided to us before the separation, and we provide certain transition services to Noble and its subsidiaries. The charges for the transition services are generally intended to allow the party providing the services to fully recover the costs directly associated with providing the services, plus all out-of-pocket costs and expenses, generally without profit. The charges for each of the transition services generally are based on either a pre-determined flat fee or an allocation of the costs incurred, including certain fees and expenses of third-party service providers. | ||
Transition Services Agreement (Brazil) | ||
On July 31, 2014, we and Noble-Cayman and certain other subsidiaries of Noble entered into a Transition Services Agreement (and a related rig charter) pursuant to which we will provide certain transition services to Noble and its subsidiaries in connection with Noble’s Brazil operations. We will continue to provide both rig-based and shore-based support services in respect of Noble’s remaining business through the term of Noble’s existing rig contracts. Noble currently has two rigs operating in Brazil. Noble-Cayman will compensate us on a cost-plus basis for providing such services and also indemnify us for liabilities arising out of the services agreement. This agreement will terminate when the last of the Noble semisubmersibles working in Brazil finish the existing contract, which is expected to occur in 2016. |
Segment_and_Related_Informatio
Segment and Related Information | 9 Months Ended |
Sep. 30, 2014 | |
Segment Reporting [Abstract] | ' |
Segment and Related Information | ' |
Note 17—Segment and Related Information | |
At September 30, 2014, our contract drilling operations were reported as a single reportable segment, Contract Drilling Services, which reflects how our business is managed, and the fact that all of our drilling fleet is dependent upon the worldwide oil industry. The mobile offshore drilling units that comprise our offshore rig fleet operated in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consisted largely of major non-U.S. and government owned/controlled oil and gas companies throughout the world. Our contract drilling services segment conducts contract drilling operations in Mexico, Brazil, the North Sea, West Africa, the Middle East, and India. |
Accounting_Pronouncements
Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2014 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | ' |
Accounting Pronouncements | ' |
Note 18—Accounting Pronouncements | |
In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends FASB Accounting Standards Codification (“ASC”) Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant, and Equipment.” This ASU alters the definition of a discontinued operation to cover only asset disposals that are a strategic shift with a major effect on an entity’s operations and finances, and calls for more extensive disclosures about a discontinued operation’s assets, liabilities, income and expenses. The guidance is effective for all disposals, or classifications as held-for-sale, of components of an entity that occur within annual periods, and interim periods within those annual periods, beginning on or after December 15, 2014. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, “Revenue from Contracts with Customers.” The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2016. We are still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation-Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. We are still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern.” This ASU codifies management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for interim and annual periods beginning on or after December 15, 2016 as early adoption is permitted. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. |
Net_Change_in_Other_Assets_and
Net Change in Other Assets and Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Net Change in Other Assets and Liabilities | ' | ||||||||
Note 19—Net Change in Other Assets and Liabilities | |||||||||
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows: | |||||||||
Nine Months Ended | |||||||||
(In thousands) | September 30, | ||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | (106,776 | ) | $ | (47,772 | ) | |||
Other current assets | 5,391 | 13,514 | |||||||
Other assets | 8,518 | 3,550 | |||||||
Accounts payable | 32,950 | 11,813 | |||||||
Other current liabilities | 39,880 | 18,366 | |||||||
Other liabilities | 4,606 | (13,566 | ) | ||||||
$ | (15,431 | ) | $ | (14,095 | ) | ||||
Related_Parties_Including_Rela
Related Parties (Including Relationship with Parent and Corporate Allocations) | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Parties (Including Relationship with Parent and Corporate Allocations) | ' |
Note 20—Related Parties (Including Relationship with Parent and Corporate Allocations) | |
For all periods prior to the Spin-Off, our Predecessor was managed in the normal course of business by Noble and its subsidiaries. Accordingly, certain shared costs have been allocated to our Predecessor and are reflected as expenses in these consolidated and combined financial statements for periods prior to Spin-Off. Our management considers the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to us for purposes of the carve-out financial statements; however, the expenses reflected in the results of our Predecessor and included in these consolidated and combined statements may not be indicative of the actual expenses that would have been incurred during the periods presented if our Predecessor had operated as a separate stand-alone entity and may not be indicative of expenses that will be incurred in the future by us. | |
Allocated costs include, but are not limited to: corporate accounting, human resources, information technology, treasury, legal, employee benefits and incentives (excluding allocated postretirement benefits described in “Note 11, Employee Benefit Plans,”) and stock-based compensation. Our Predecessor’s allocated costs included in contract drilling services in the accompanying consolidated and combined statements of income totaled $0.9 million and $70.3 million for the three and nine months ended September 30, 2014, respectively, as compared to $33.1 million and $107.7 million for the three and nine months ended September 30, 2013. Our Predecessor’s allocated costs included in general, and administrative expenses in the accompanying consolidated and combined statements of income totaled $0.5 million and $24.6 million for the three and nine months ended September 30, 2014, respectively, as compared to $15.1 million and $42.6 million for the three and nine months ended September 30, 2013. The costs were allocated to our Predecessor using various inputs, such as head count, services rendered, and assets assigned to our Predecessor. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Policies) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Accounting Policies [Abstract] | ' | |||
Earnings Per Share | ' | |||
These unvested restricted stock units, which contain non-forfeitable rights to dividends, are participating securities and are included in the computation of earnings per share pursuant to the “two-class” method. The “two-class” method allocates undistributed earnings between ordinary shares and participating securities. Weighted average shares outstanding, basic and diluted, has been computed based on the weighted average number of ordinary shares outstanding during the applicable period. Restricted stock units do not represent ordinary shares outstanding until they are vested and converted into ordinary shares. | ||||
Share-based Compensation | ' | |||
Share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as compensation cost using a straight-line method over the service period. | ||||
Property and Equipment | ' | |||
Property and equipment is stated at cost. Interest incurred related to property under construction including major overhaul, improvement and asset replacement projects is capitalized as a component of construction costs. | ||||
Property Plant And Equipment Impairment | ' | |||
We evaluate the impairment of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, on an annual basis, we complete an impairment analysis on our rig fleet. An impairment loss on our property and equipment exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the asset’s carrying value over the estimated fair value. As part of this analysis, we make assumptions and estimates regarding future market conditions. To the extent actual results do not meet our estimated assumptions, we may take an impairment loss in the future. | ||||
Derivatives | ' | |||
For our foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the hedged item. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. | ||||
Deferred Revenues and Costs | ' | |||
It is typical in our dayrate drilling contracts to receive compensation and incur costs for mobilization, equipment modification, or other activities prior to the commencement of the contract. Any such compensation may be paid through a lump-sum payment or other daily compensation. Pre-contract compensation and costs are deferred until the contract commences. The deferred pre-contract compensation and costs are amortized, using the straight-line method, into income over the term of the initial contract period, regardless of the activity taking place. This approach is consistent with the economics for which the parties have contracted. | ||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | |||
Basis of Presentation | ' | |||
Basis of Presentation | ||||
The consolidated and combined financial information contained in this report includes periods that ended prior to the Spin-Off on August 1, 2014. For all periods prior to the Spin-Off, the unaudited combined financial statements and related discussion of financial condition and results of operations contained in this report pertain to the historical results of the Noble Standard-Spec Business (our “Predecessor”), which comprised the entire standard specification drilling fleet and related operations of Noble. Our Predecessor’s historical combined financial statements include three standard specification drilling units that were retained by Noble and three standard specification drilling units that were sold by Noble prior to the Separation. | ||||
Our Predecessor’s historical combined financial statements for the periods prior to the Spin-Off include assets and liabilities that are specifically identifiable or have been allocated to our Predecessor. Costs directly related to our Predecessor have been included in the accompanying financial statements. Our Predecessor received service and support functions from Noble and the costs associated with these support functions have been allocated to our Predecessor using various inputs, such as head count, services rendered, and assets assigned to our Predecessor. These allocated costs are primarily related to corporate administrative expenses, employee related costs including pensions and other benefits, and corporate and shared employees for the following functional groups: | ||||
— information technology, | ||||
— legal services, | ||||
— accounting, | ||||
— finance services, | ||||
— human resources, | ||||
— marketing, | ||||
— treasury, and | ||||
— other corporate and infrastructural services. | ||||
We consolidate the historical combined financial results of our Predecessor in our consolidated financial statements for all periods prior to the Spin-Off. All financial information presented after the Spin-Off represents the results of operations, financial position and cash flows of Paragon. Accordingly: | ||||
· | Our Consolidated and Combined Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2014 consist of the consolidated results of Paragon for the two months ended September 30, 2014, and the combined results of our Predecessor for the prior month or months. Our Combined Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2013 consist entirely of the combined results of our Predecessor. Our net income for the periods prior to July 31, 2014, was recorded to “Net parent investment.” | |||
· | Our Consolidated and Combined Balance Sheet at September 30, 2014 consists of the balances of Paragon, while at December 31, 2013, the Combined Balance Sheet consists of the balances of our Predecessor. | |||
· | Our Consolidated and Combined Statement of Cash Flows for the nine months ended September 30, 2014 consists of the consolidated results of Paragon for the two months ended September 30, 2014, and the combined results of our Predecessor for the seven months ended July 31, 2014. Our Combined Statement of Cash Flows for the nine months ended September 30, 2013 consists entirely of the combined results of our Predecessor. | |||
· | Our Consolidated and Combined Statement of Changes in Equity for the nine months ended September 30, 2014 consists of both the activity for our Predecessor prior to August 1, 2014, and the activity for Paragon completed in connection with, and subsequent to, the Distribution on August 1, 2014. Our Combined Statement of Changes in Equity for the nine months ended September 30, 2013 consists of activity for our Predecessor recorded to “Net parent investment.” | |||
Because our Predecessor previously operated within Noble’s corporate cash management program for all periods prior to the Distribution, funding requirements and related transactions between our Predecessor and Noble have been summarized and reflected on the balance sheet as “Net parent investment” without regard to whether the funding represents a receivable, liability or equity. Based on the terms of our Separation from Noble, we ceased being a part of Noble’s corporate cash management program. Any transactions with Noble after August 1, 2014 have been and will continue to be, cash settled in the ordinary course of business, and such amounts are included in “Accounts payable” on our consolidated balance sheet. | ||||
Separation from Noble | ||||
Prior to the Spin-off, our total equity represented the cumulative net parent investment by Noble in us, including any prior net income attributable to our Predecessor as part of Noble. At the Spin-off, Noble contributed its entire net parent investment in our Predecessor to us. Concurrent with the Spin-off and in accordance with the terms of our Separation from Noble, certain assets and liabilities were transferred between us and Noble, which have been recorded as part of the net capital contributed by Noble. The following table presents the opening balance sheet of our Predecessor as of August 1, 2014 that was distributed to us in connection with the Spin-Off. | ||||
August 1, | ||||
2014 | ||||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | 104,152 | ||
Accounts receivable | 377,324 | |||
Prepaid and other current assets | 126,649 | |||
Total current assets | 608,125 | |||
Property and equipment, at cost | 5,615,161 | |||
Accumulated depreciation | (2,640,273 | ) | ||
Property and equipment, net | 2,974,888 | |||
Other assets | 102,419 | |||
Total assets | $ | 3,685,432 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Current maturities of long-term debt | $ | 4,875 | ||
Accounts payable | 129,952 | |||
Accrued payroll and related costs | 67,256 | |||
Taxes payable | 53,384 | |||
Interest payable | 3,770 | |||
Other current liabilities | 115,647 | |||
Total current liabilities | 374,884 | |||
Long-term debt | 1,725,125 | |||
Deferred income taxes | 79,659 | |||
Other liabilities | 115,621 | |||
Total liabilities | 2,295,289 | |||
Equity | ||||
Ordinary shares | 848 | |||
Additional paid-in capital | 1,419,744 | |||
Accumulated other comprehensive loss | (30,449 | ) | ||
Total equity | 1,390,143 | |||
Total liabilities and equity | $ | 3,685,432 | ||
Unaudited Interim Information | ||||
The unaudited interim consolidated and combined financial statements of Paragon Offshore plc and its subsidiaries, including the combined financial results of our Predecessor, as of September 30, 2014, and for the three and nine months ended September 30, 2014 and 2013, included herein, have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures have been condensed or omitted as permitted by such rules. These unaudited consolidated and combined financial statements should therefore be read in conjunction with the audited combined financial statements and the notes thereto included in our registration statement filed with the Securities and Exchange Commission (the “SEC”) on Form 10, as amended. In our opinion, the unaudited interim consolidated and combined financial statements reflect all adjustments considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. |
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | |||
Consolidated and Combined Balance Sheet | ' | |||
The following table presents the opening balance sheet of our Predecessor as of August 1, 2014 that was distributed to us in connection with the Spin-Off. | ||||
August 1, | ||||
2014 | ||||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | 104,152 | ||
Accounts receivable | 377,324 | |||
Prepaid and other current assets | 126,649 | |||
Total current assets | 608,125 | |||
Property and equipment, at cost | 5,615,161 | |||
Accumulated depreciation | (2,640,273 | ) | ||
Property and equipment, net | 2,974,888 | |||
Other assets | 102,419 | |||
Total assets | $ | 3,685,432 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Current maturities of long-term debt | $ | 4,875 | ||
Accounts payable | 129,952 | |||
Accrued payroll and related costs | 67,256 | |||
Taxes payable | 53,384 | |||
Interest payable | 3,770 | |||
Other current liabilities | 115,647 | |||
Total current liabilities | 374,884 | |||
Long-term debt | 1,725,125 | |||
Deferred income taxes | 79,659 | |||
Other liabilities | 115,621 | |||
Total liabilities | 2,295,289 | |||
Equity | ||||
Ordinary shares | 848 | |||
Additional paid-in capital | 1,419,744 | |||
Accumulated other comprehensive loss | (30,449 | ) | ||
Total equity | 1,390,143 | |||
Total liabilities and equity | $ | 3,685,432 | ||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Computation of Basic and Diluted Net Income and Earnings Per Share | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted net income and earnings per share: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
(In thousands, except per share amounts) | September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Allocation of income - basic and diluted | |||||||||||||||||
Net income | $ | (894,216 | ) | $ | 157,635 | $ | (674,605 | ) | $ | 322,750 | |||||||
Earnings allocated to unvested share-based payment awards | 35,181 | (5,307 | ) | 24,004 | (10,867 | ) | |||||||||||
Net income to ordinary shareholders - | $ | (859,035 | ) | $ | 152,328 | $ | (650,601 | ) | $ | 311,883 | |||||||
Basic and diluted | |||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||
Basic and diluted | 84,753 | 84,753 | 84,753 | 84,753 | |||||||||||||
Weighted average unvested share-based payment awards | 3,471 | 2,953 | 3,127 | 2,953 | |||||||||||||
Earnings per share | |||||||||||||||||
Basic and diluted | $ | (10.14 | ) | $ | 1.8 | $ | (7.68 | ) | $ | 3.68 | |||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||
Shares Available for Issuance and Outstanding Restricted Stock Units | ' | ||||||||
Shares available for issuance and outstanding restricted stock units for our two stock incentive plans as of September 30, 2014 are as follows: | |||||||||
(In shares) | Employee | Director | |||||||
Plan | Plan | ||||||||
Shares available for future awards or grants | 4,647,365 | 339,060 | |||||||
Outstanding unvested restricted stock units | 3,827,975 | 160,940 | |||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Summary of Long Term Debt | ' | |||||||
A summary of long-term debt at September 30, 2014 and December 31, 2013 is as follows: | ||||||||
September 30, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Senior Notes due 2022, bearing fixed interest at 6.75% per annum | $ | 477,100 | $ | — | ||||
Senior Notes due 2024, bearing fixed interest at 7.25% per annum | 552,660 | — | ||||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | 646,827 | — | ||||||
Noble Credit Facilities / Commercial Paper Program | — | 1,561,141 | ||||||
Less: Current maturities of long-term debt | (6,500 | ) | — | |||||
$ | 1,670,087 | $ | 1,561,141 | |||||
Estimated Fair Value of Long Term Debt | ' | |||||||
The following table presents the estimated fair value of our long-term debt as of September 30, 2014: | ||||||||
30-Sep-14 | ||||||||
(In thousands) | Carrying | Estimated | ||||||
Value | Fair Value | |||||||
Senior unsecured notes: | ||||||||
6.75% Senior Notes due July 15, 2022 | $ | 477,100 | $ | 406,131 | ||||
7.25% Senior Notes due August 15, 2024 | 552,660 | 472,524 | ||||||
Total senior unsecured notes | $ | 1,029,760 | $ | 878,655 | ||||
Term Loan Facility, bearing interest at 3.75%, | $ | 646,827 | $ | 607,750 | ||||
net of unamortized discount | ||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments - Schedule of Carrying Amount and Estimated Fair Value Measured on a Recurring Basis (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | |||||||||||||||
The following table presents the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis: | ||||||||||||||||
30-Sep-14 | ||||||||||||||||
Estimated Fair Value Measurement | ||||||||||||||||
Carrying | Quoted | Significant | Significant | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | inputs | |||||||||||||||
(In thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets - | ||||||||||||||||
Foreign currency forward contracts | $ | 597 | $ | — | $ | 597 | $ | — | ||||||||
Liabilities - | ||||||||||||||||
Foreign currency forward contracts | $ | 593 | $ | — | $ | 593 | $ | — | ||||||||
Changes_in_Accumulated_balance
Changes in Accumulated balances for each component of AOCL (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accumulated Other Comprehensive Income Loss Disclosure [Abstract] | ' | ||||||||||||||||
Changes in Accumulated balances for Each Component of AOCL | ' | ||||||||||||||||
The following table sets forth the changes in the accumulated balances for each component of AOCL, net of tax, for the nine months ended September 30, 2014 and 2013. | |||||||||||||||||
(In thousands) | Gains / | Defined | Foreign | Total | |||||||||||||
(Losses) on | Benefit | Currency | |||||||||||||||
Cash Flow | Pension | Items | |||||||||||||||
Hedges (1) | Items (2) | ||||||||||||||||
Balance at December 31, 2013 | $ | - | $ | - | $ | (6 | ) | $ | (6 | ) | |||||||
Activity during period: | |||||||||||||||||
AOCL recorded in connection with Spin-Off | 4,027 | (21,770 | ) | (12,706 | ) | (30,449 | ) | ||||||||||
Other comprehensive loss before reclassification | (3,073 | ) | - | (1,827 | ) | (4,900 | ) | ||||||||||
Amounts reclassified from AOCL | (950 | ) | - | - | (950 | ) | |||||||||||
Net other comprehensive income (loss) | 4 | (21,770 | ) | (14,533 | ) | (36,299 | ) | ||||||||||
Balance at September 30, 2014 | $ | 4 | $ | (21,770 | ) | $ | (14,539 | ) | $ | (36,305 | ) | ||||||
· | Gains / (losses) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “Contract drilling services operating costs and expenses” on our consolidated and combined statements of income. See Note 12, “Derivative instruments and hedging activities” for additional information. | ||||||||||||||||
· | Defined benefit pension items relate to actuarial losses and the amortization of prior service costs. Reclassifications from AOCL are recognized as expense on our consolidated and combined statements of income through either “Contract drilling services” or “General and administrative.” See Note 11, “Employee benefit plans” for additional information. |
Net_Change_in_Other_Assets_and1
Net Change in Other Assets and Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||
Effect of Changes in Other Assets and Liabilities on Cash Flows from Operating Activities | ' | ||||||||
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows: | |||||||||
Nine Months Ended | |||||||||
(In thousands) | September 30, | ||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | (106,776 | ) | $ | (47,772 | ) | |||
Other current assets | 5,391 | 13,514 | |||||||
Other assets | 8,518 | 3,550 | |||||||
Accounts payable | 32,950 | 11,813 | |||||||
Other current liabilities | 39,880 | 18,366 | |||||||
Other liabilities | 4,606 | (13,566 | ) | ||||||
$ | (15,431 | ) | $ | (14,095 | ) | ||||
Organization_and_Basis_of_Pres3
Organization and Basis of Presentation - Additional Information (Detail) | 9 Months Ended | 0 Months Ended |
Sep. 30, 2014 | Aug. 01, 2014 | |
Rigs | Predecessor [Member] | |
Noble Corporation PLC [Member] | ||
Drilling | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ' | ' |
Number of jackups | 34 | ' |
Number of floaters | 8 | ' |
Number of drillships | 5 | ' |
Number of semisubmersibles | 3 | ' |
Number of floating production storage and offloading units ("FPSO") | 1 | ' |
Entity incorporation date | 17-Jul-14 | ' |
Drilling units sold prior to spin off | ' | 3 |
Drilling units retained prior to spin off | ' | 3 |
Organization_and_Basis_of_Pres4
Organization and Basis of Presentation - Consolidated and Combined Balance Sheet (Detail) (USD $) | Sep. 30, 2014 | Aug. 01, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||||
Current assets | ' | ' | ' | ' | ' |
Cash and cash equivalents | $81,908 | $104,152 | $36,581 | $55,656 | $70,538 |
Accounts receivable | 441,875 | 377,324 | 356,241 | ' | ' |
Prepaid and other current assets | 119,782 | 126,649 | 51,182 | ' | ' |
Total current assets | 643,565 | 608,125 | 444,004 | ' | ' |
Property and equipment, at cost | 4,497,399 | 5,615,161 | 6,067,066 | ' | ' |
Accumulated depreciation | -2,463,764 | -2,640,273 | -2,607,382 | ' | ' |
Property and equipment, net | 2,033,635 | 2,974,888 | 3,459,684 | ' | ' |
Other assets | 103,092 | 102,419 | 79,111 | ' | ' |
Total assets | 2,780,292 | 3,685,432 | 3,982,799 | ' | ' |
Current liabilities | ' | ' | ' | ' | ' |
Current maturities of long-term debt | 6,500 | 4,875 | 0 | ' | ' |
Accounts payable | 147,352 | 129,952 | 124,442 | ' | ' |
Accrued payroll and related costs | 66,753 | 67,256 | 60,738 | ' | ' |
Taxes payable | 90,920 | 53,384 | 0 | ' | ' |
Interest payable | 14,634 | 3,770 | 412 | ' | ' |
Other current liabilities | 109,557 | 115,647 | 40,962 | ' | ' |
Total current liabilities | 435,716 | 374,884 | 226,554 | ' | ' |
Long-term debt | 1,670,087 | 1,725,125 | 1,561,141 | ' | ' |
Deferred income taxes | 79,482 | 79,659 | 101,703 | ' | ' |
Other liabilities | 120,110 | 115,621 | 88,068 | ' | ' |
Total liabilities | 2,305,395 | 2,295,289 | 1,977,466 | ' | ' |
Equity | ' | ' | ' | ' | ' |
Ordinary shares, $0.01 par value, 101,704,000 shares authorized;84,753,393 issued and outstanding at September 30, 2014 | 848 | 848 | 0 | ' | ' |
Additional paid-in capital | 1,422,387 | 1,419,744 | 0 | ' | ' |
Accumulated other comprehensive loss | -36,305 | -30,449 | -6 | ' | ' |
Total equity | 474,897 | 1,390,143 | 2,005,333 | 2,384,653 | 3,365,232 |
Total liabilities and equity | $2,780,292 | $3,685,432 | $3,982,799 | ' | ' |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | Sep. 30, 2014 | Aug. 01, 2014 |
Earnings Per Share [Abstract] | ' | ' |
Ordinary shares, outstanding | 84,753,393 | 84,753,393 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Net Income and Earnings Per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Allocation of income - basic and diluted | ' | ' | ' | ' |
Net income (loss) | ($894,216) | $157,635 | ($674,605) | $322,750 |
Earnings allocated to unvested share-based payment awards | 35,181 | -5,307 | 24,004 | -10,867 |
Net income to ordinary shareholders - Basic and diluted | ($859,035) | $152,328 | ($650,601) | $311,883 |
Weighted-average shares outstanding | ' | ' | ' | ' |
Basic and diluted | 84,753 | 84,753 | 84,753 | 84,753 |
Weighted average unvested share-based payment awards | 3,471 | 2,953 | 3,127 | 2,953 |
Earnings per share | ' | ' | ' | ' |
Basic and diluted | ($10.14) | $1.80 | ($7.68) | $3.68 |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Share-based amortization recognized amount | $2.60 | $2.60 |
TVRSUbs [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Share based compensation, vesting period (in years) | ' | '3 years |
Total unrecognized compensation cost | 29 | 29 |
Total unrecognized compensation cost, remaining weighted-average period (in years) | ' | '2 years 1 month 6 days |
PVRSUbs [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Share based compensation, vesting period (in years) | ' | '3 years |
Total unrecognized compensation cost | $1.60 | $1.60 |
Total unrecognized compensation cost, remaining weighted-average period (in years) | ' | '2 years |
Employee Plan [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Maximum number of shares authorized | 8,475,340 | 8,475,340 |
Percentage of outstanding share at time of distribution, authorized shares | ' | 10.00% |
Director Plan [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Maximum number of shares authorized | 500,000 | 500,000 |
Predecessor [Member] | TVRSUbs [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Restricted shares, granted | ' | 2,675,839 |
Predecessor [Member] | PVRSUbs [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Share based compensation, vesting period (in years) | ' | '36 months |
Restricted shares, granted | ' | 277,118 |
Predecessor [Member] | Noble's 1991 Plan [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Stock option grants, outstanding | 0 | 0 |
Maximum | Predecessor [Member] | Noble's 1991 Plan [Member] | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' | ' |
Share based compensation, vesting period (in years) | ' | '5 years |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Shares Available for Issuance and Outstanding Restricted Stock Units (Detail) | Sep. 30, 2014 |
Employee Plan [Member] | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares available for future awards or grants | 4,647,365 |
Outstanding unvested restricted stock units | 3,827,975 |
Director Plan [Member] | ' |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ' |
Shares available for future awards or grants | 339,060 |
Outstanding unvested restricted stock units | 160,940 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Capital expenditures, including capitalized interest | $71,700,000 | ' | $182,351,000 | $283,290,000 |
Interest expense capitalized | 200,000 | ' | 2,600,000 | ' |
Loss on impairment | 928,947,000 | 3,585,000 | 928,947,000 | 3,585,000 |
Predecessor [Member] | ' | ' | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Capital expenditures, including capitalized interest | ' | 67,000,000 | ' | 283,290,000 |
Interest expense capitalized | ' | $1,800,000 | ' | $4,200,000 |
Debt_Summary_of_Long_Term_Debt
Debt - Summary of Long Term Debt (Detail) (USD $) | Sep. 30, 2014 | Aug. 01, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | ' | ' | ' |
Less: Current maturities of long-term debt | ($6,500) | ($4,875) | $0 |
Long-term debt | 1,670,087 | 1,725,125 | 1,561,141 |
6.75% Senior Notes Due 2022 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt | 477,100 | ' | ' |
7.25% Senior Notes Due 2024 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt | 552,660 | ' | ' |
Term Loan Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt | 646,827 | ' | ' |
Noble Credit Facilities / Commercial Paper Program [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt | ' | ' | $1,561,141 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||
Jul. 18, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jun. 17, 2014 | Sep. 30, 2014 | Jul. 18, 2014 | Jul. 18, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Jun. 17, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Jun. 17, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 17, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Oct. 31, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Oct. 31, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Oct. 31, 2014 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) | Base Rate [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Maximum | Maximum | Predecessor [Member] | Noble Credit Facilities And Commerical Paper Program | Letter of Credit | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | 7.25% Senior Notes Due 2024 [Member] | 7.25% Senior Notes Due 2024 [Member] | 7.25% Senior Notes Due 2024 [Member] | 6.75% Senior Notes Due 2022 [Member] | 6.75% Senior Notes Due 2022 [Member] | 6.75% Senior Notes Due 2022 [Member] | ||||||
Term Loan Facility [Member] | Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) | Predecessor [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||||||||||||||||
Revolving Credit Facility [Member] | Term Loan Facility [Member] | Revolving Credit Facility [Member] | CreditFacility | |||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of credit facilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum amount available under credit facility | ' | ' | ' | ' | ' | ' | $800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,900,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum amount to be issued under commercial paper | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of intercompany indebtedness | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility maturity period | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate description | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reference rate plus margin | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.75% | 1.75% | ' | 1.50% | 1.00% | ' | 2.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity under revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | 8,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding revolving credit facility | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face value of senior notes | ' | ' | ' | ' | ' | ' | ' | ' | 650,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,080,000,000 | ' | ' | 580,000,000 | ' | ' | 500,000,000 | ' | ' |
Stated interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.25% | ' | ' | 6.75% | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | ' | ' | ' | ' | 1-Jul-21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15-Aug-24 | ' | ' | 15-Jul-22 | ' | ' |
Original issue discount | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly debt principal payments | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annually debt principal payments | ' | ' | ' | ' | ' | ' | ' | ' | 6,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost | 35,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net leverage ratio requirement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest coverage ratio requirement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Repurchased Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,200,000 | 10,000,000 | ' | 27,300,000 | 5,600,000 | ' | 22,900,000 | 4,400,000 |
Repurchase of senior notes aggregate cost including accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,100,000 | 8,500,000 | ' | ' | ' | ' | ' | ' |
Recognized gain on debt retirement as a result of repurchase | ' | $6,931,000 | $0 | $6,931,000 | $0 | $8,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,931,000 | ' | ' | ' | ' | ' | ' | ' |
Net leverage ratio at end of the period | ' | 1.8 | ' | 1.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest coverage ratio at end of the period | ' | 8.4 | ' | 8.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Estimated_Fair_Value_of_L
Debt - Estimated Fair Value of Long-Term Debt (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Senior Notes [Member] | ' |
Debt Instrument [Line Items] | ' |
Carrying value | $1,029,760 |
Estimated fair value | 878,655 |
Term Loan Facility [Member] | ' |
Debt Instrument [Line Items] | ' |
Carrying value | 646,827 |
Estimated fair value | 607,750 |
6.75% Senior Notes Due 2022 [Member] | Senior Notes [Member] | ' |
Debt Instrument [Line Items] | ' |
Carrying value | 477,100 |
Estimated fair value | 406,131 |
7.25% Senior Notes Due 2024 [Member] | Senior Notes [Member] | ' |
Debt Instrument [Line Items] | ' |
Carrying value | 552,660 |
Estimated fair value | $472,524 |
Loss_on_Impairment_Additional_
Loss on Impairment - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Rigs | Rigs | |||
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Loss on impairment | $928,947 | $3,585 | $928,947 | $3,585 |
Number of drillships | 5 | ' | 5 | ' |
Predecessor [Member] | ' | ' | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Number of cold stacked submersibles | ' | ' | ' | 2 |
Brazil [Member] | ' | ' | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Number of drillships | 3 | ' | 3 | ' |
U.S. Gulf of Mexico | ' | ' | ' | ' |
Property Plant And Equipment [Line Items] | ' | ' | ' | ' |
Number of cold-stacked FPSO | ' | ' | 1 | ' |
Gain_on_Disposal_of_Assets_Net1
Gain on Disposal of Assets, Net - Additional Information (Detail) (USD $) | 3 Months Ended |
Sep. 30, 2013 | |
Property Plant And Equipment [Line Items] | ' |
Gain on disposal of assets, net | $35,646,000 |
Predecessor [Member] | ' |
Property Plant And Equipment [Line Items] | ' |
Proceeds from sale of assets | $61,000,000 |
Gain_on_Contract_SettlementsEx1
Gain on Contract Settlements/Extinguishments, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Gain On Contract Settlements [Line Items] | ' | ' | ' | ' |
Net gain recognized on settlement included in other income | $0 | $22,573,000 | $0 | $24,373,000 |
Noble Corporation PLC [Member] | ' | ' | ' | ' |
Gain On Contract Settlements [Line Items] | ' | ' | ' | ' |
Proceeds related to settlement of claims against former owners | ' | $45,000,000 | ' | ' |
Gain_on_Repurchase_of_LongTerm1
Gain on Repurchase of Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Long Term Debt [Abstract] | ' | ' | ' | ' |
Recognized gain on debt retirement as a result of repurchase | $6,931 | $0 | $6,931 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Her Majesty's Revenue and Customs (HMRC) | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||||
Income Tax Contingency [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Effective income tax rate | -9.20% | ' | -21.10% | ' | ' | 15.80% | 18.10% | ' |
Pre-tax Book loss | ($818,534,000) | $187,159,000 | ($556,848,000) | $393,892,000 | ' | ' | ' | ' |
Loss on impairment | 928,947,000 | 3,585,000 | 928,947,000 | 3,585,000 | ' | ' | ' | ' |
Income tax provision | 75,682,000 | 29,524,000 | 117,757,000 | 71,142,000 | 6,800,000 | ' | ' | ' |
Reserves for uncertain tax positions | 39,900,000 | ' | 39,900,000 | ' | ' | ' | ' | 36,500,000 |
Unamortized tax benefit | $44,200,000 | ' | $44,200,000 | ' | ' | ' | ' | $46,500,000 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Compensation And Retirement Disclosure [Abstract] | ' | ' | ' | ' |
Pension benefit expense | $0.80 | $2.80 | $4.50 | $8.50 |
Other postretirement benefit expense | $0.50 | $1.20 | $2.50 | $3.70 |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ' | ' | ' | ' |
Unrealized gains related to these forward contracts recorded in AOCI | ($3,073,000) | $0 | ($3,073,000) | $0 |
Cash Flow Hedging [Member] | ' | ' | ' | ' |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ' | ' | ' | ' |
Notional amount outstanding | 39,100,000 | ' | 39,100,000 | ' |
Unrealized gains related to these forward contracts recorded in AOCI | 0 | ' | 0 | ' |
Cash Flow Hedging [Member] | Contract Drilling Services Operating Costs And Expenses [Member] | ' | ' | ' | ' |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ' | ' | ' | ' |
Gain (loss) on derivative contracts reclassified from OCI | 900,000 | ' | 900,000 | ' |
Gain (loss) recognized in income statement as a result of ineffectiveness | $0 | ' | $0 | ' |
Maximum | ' | ' | ' | ' |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ' | ' | ' | ' |
Percentage of local currency transactions hedged | 60.00% | ' | 60.00% | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Fair Value of Financial Instruments - Carrying Amount and Estimated Fair Value Measured on a Recurring Basis (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Reported Value Measurement [Member] | ' |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' |
Foreign currency forward contracts - Assets | $597 |
Foreign currency forward contracts - Liabilities | 593 |
Fair Value, Inputs, Level 2 [Member] | Portion at Fair Value Measurement [Member] | ' |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ' |
Foreign currency forward contracts - Assets | 597 |
Foreign currency forward contracts - Liabilities | $593 |
Changes_in_AOCL_by_Component_D
Changes in AOCL by Component (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Aug. 01, 2014 |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' |
Balance at December 31, 2013 | ($6) | ($30,449) |
Activity during period: | ' | ' |
AOCL recorded in connection with Spin-Off | -30,449 | ' |
Other comprehensive loss before reclassification | -4,900 | ' |
Amounts reclassified from AOCL | -950 | ' |
Net other comprehensive income (loss) | -36,299 | ' |
Balance at September 30, 2014 | -36,305 | -30,449 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ' | ' |
Activity during period: | ' | ' |
AOCL recorded in connection with Spin-Off | 4,027 | ' |
Other comprehensive loss before reclassification | -3,073 | ' |
Amounts reclassified from AOCL | -950 | ' |
Net other comprehensive income (loss) | 4 | ' |
Balance at September 30, 2014 | 4 | ' |
Accumulated Defined Benefit Plans Adjustment [Member] | ' | ' |
Activity during period: | ' | ' |
AOCL recorded in connection with Spin-Off | -21,770 | ' |
Net other comprehensive income (loss) | -21,770 | ' |
Balance at September 30, 2014 | -21,770 | ' |
Accumulated Translation Adjustment [Member] | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' |
Balance at December 31, 2013 | -6 | ' |
Activity during period: | ' | ' |
AOCL recorded in connection with Spin-Off | -12,706 | ' |
Other comprehensive loss before reclassification | -1,827 | ' |
Net other comprehensive income (loss) | -14,533 | ' |
Balance at September 30, 2014 | ($14,539) | ' |
Deferred_Revenues_and_Costs_Ad
Deferred Revenues and Costs - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Predecessor [Member] | |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Deferred revenues included in either other current liabilities or other liabilities | $17.60 | $21.90 |
Deferred costs included in either prepaid and other current assets or other assets | $8.40 | $23.70 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Sep. 30, 2014 |
In Millions, unless otherwise specified | |
Other Commitments [Line Items] | ' |
Outstanding commitments including shipyard and purchase commitments | $58 |
Performance bonds | 109.4 |
Due from Noble | 68 |
Due from Noble, current | 62 |
Due to Noble | 90 |
Due to Noble, current | 67 |
Revolving Credit Facility [Member] | ' |
Other Commitments [Line Items] | ' |
Letters of credit, amount outstanding | 8.8 |
Customs and Other Business Taxes [Member] | ' |
Other Commitments [Line Items] | ' |
Taxes and other contingencies | 295.2 |
Customs and Other Business Taxes [Member] | Noble Corporation PLC [Member] | ' |
Other Commitments [Line Items] | ' |
Taxes and other contingencies | 53.9 |
Tax Audits [Member] | Noble Corporation PLC [Member] | ' |
Other Commitments [Line Items] | ' |
Taxes and other contingencies | 40.8 |
Withholding Taxes [Member] | ' |
Other Commitments [Line Items] | ' |
Taxes and other contingencies | 115 |
Withholding Taxes [Member] | Noble Corporation PLC [Member] | ' |
Other Commitments [Line Items] | ' |
Taxes and other contingencies | $32 |
Net_Change_in_Other_Assets_and2
Net Change in Other Assets and Liabilities - Effect of Changes in Other Assets and Liabilites on Cash Flows from Operating Activities (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
Accounts receivable | ($106,776) | ($47,772) |
Other current assets | 5,391 | 13,514 |
Other assets | 8,518 | 3,550 |
Accounts payable | 32,950 | 11,813 |
Other current liabilities | 39,880 | 18,366 |
Other liabilities | 4,606 | -13,566 |
Net change in other assets and liabilities | ($15,431) | ($14,095) |
Related_Parties_Additional_Inf
Related Parties - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Schedule Of Other Related Party Transactions [Line Items] | ' | ' | ' | ' |
Contract drilling services | $217,378 | $219,022 | $666,158 | $670,146 |
General and administrative | 12,037 | 16,911 | 37,965 | 47,914 |
Predecessor [Member] | ' | ' | ' | ' |
Schedule Of Other Related Party Transactions [Line Items] | ' | ' | ' | ' |
Contract drilling services | 900 | 33,100 | 70,300 | 107,700 |
General and administrative | $500 | $15,100 | $24,600 | $42,600 |