Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 16, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | DO | ||
Entity Registrant Name | DIAMOND OFFSHORE DRILLING INC | ||
Entity Central Index Key | 949039 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 137,147,899 | ||
Entity Public Float | $3,327,258,180 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $233,623 | $347,011 |
Marketable securities | 16,033 | 1,750,053 |
Accounts receivable, net of allowance for bad debts | 463,862 | 469,355 |
Prepaid expenses and other current assets | 185,541 | 143,997 |
Asset held for sale | 7,694 | |
Total current assets | 899,059 | 2,718,110 |
Drilling and other property and equipment, net of accumulated depreciation | 6,945,953 | 5,467,227 |
Other assets | 176,277 | 206,097 |
Total assets | 8,021,289 | 8,391,434 |
Current liabilities: | ||
Accounts payable | 138,444 | 94,151 |
Accrued liabilities | 426,592 | 370,671 |
Taxes payable | 41,648 | 30,806 |
Current portion of long-term debt | 249,962 | 249,954 |
Total current liabilities | 856,646 | 745,582 |
Long-term debt | 1,994,526 | 2,244,189 |
Deferred tax liability | 530,394 | 525,541 |
Other liabilities | 188,160 | 238,864 |
Total liabilities | 3,569,726 | 3,754,176 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock (par value $0.01, 25,000,000 shares authorized, none issued and outstanding) | ||
Common stock (par value $0.01, 500,000,000 shares authorized; 143,960,260 shares issued and 137,147,899 shares outstanding at December 31, 2014; 143,952,248 shares issued and 139,035,448 shares outstanding at December 31, 2013) | 1,440 | 1,440 |
Additional paid-in capital | 1,993,898 | 1,988,720 |
Retained earnings | 2,661,999 | 2,761,161 |
Accumulated other comprehensive gain (loss) | -3,605 | 350 |
Treasury stock, at cost (6,812,361 and 4,916,800 shares of common stock at December 31, 2014 and 2013, respectively) | -202,169 | -114,413 |
Total stockholders' equity | 4,451,563 | 4,637,258 |
Total liabilities and stockholders' equity | $8,021,289 | $8,391,434 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 143,960,260 | 143,952,248 |
Common stock, shares outstanding | 137,147,899 | 139,035,448 |
Treasury stock, shares | 6,812,361 | 4,916,800 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Contract drilling | $2,737,126 | $2,843,584 | $2,936,066 |
Revenues related to reimbursable expenses | 77,545 | 76,837 | 50,442 |
Total revenues | 2,814,671 | 2,920,421 | 2,986,508 |
Operating expenses: | |||
Contract drilling, excluding depreciation | 1,523,623 | 1,572,525 | 1,537,224 |
Reimbursable expenses | 76,091 | 74,967 | 48,778 |
Depreciation | 456,483 | 388,092 | 392,913 |
General and administrative | 81,832 | 64,788 | 64,640 |
Impairment of assets | 109,462 | 0 | 62,437 |
Bad debt expense (recovery) | 22,513 | -1,018 | |
Gain on disposition of assets | -5,382 | -4,070 | -80,844 |
Total operating expenses | 2,242,109 | 2,118,815 | 2,024,130 |
Operating income | 572,562 | 801,606 | 962,378 |
Other income (expense): | |||
Interest income | 801 | 701 | 4,910 |
Interest expense | -62,053 | -24,843 | -46,216 |
Foreign currency transaction gain (loss) | 3,199 | -4,915 | -1,999 |
Other, net | 682 | 1,691 | -992 |
Income before income tax expense | 515,191 | 774,240 | 918,081 |
Income tax expense | -128,180 | -225,554 | -197,604 |
Net income | $387,011 | $548,686 | $720,477 |
Earnings per share: | |||
Basic | $2.82 | $3.95 | $5.18 |
Diluted | $2.81 | $3.95 | $5.18 |
Weighted-average shares outstanding: | |||
Shares of common stock | 137,473 | 139,035 | 139,029 |
Dilutive potential shares of common stock | 50 | 29 | 19 |
Total weighted-average shares outstanding | 137,523 | 139,064 | 139,048 |
Cash dividends declared per share of common stock | $3.50 | $3.50 | $3.50 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $387,011 | $548,686 | $720,477 |
Derivative financial instruments: | |||
Unrealized holding (loss) gain | -1,482 | -6,833 | 4,237 |
Reclassification adjustment for (gain) loss included in net income | -2,379 | 4,840 | 2,733 |
Investments in marketable securities: | |||
Unrealized holding (loss) gain on investments | -69 | -6 | 124 |
Reclassification adjustment for (gain) loss included in net income | -25 | -147 | 44 |
Total other comprehensive (loss) gain | -3,955 | -2,146 | 7,138 |
Comprehensive income | $383,056 | $546,540 | $727,615 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Gains (Losses) [Member] | Treasury Stock [Member] |
In Thousands, except Share data | ||||||
Beginning Balance at Dec. 31, 2011 | $4,333,063 | $1,439 | $1,978,369 | $2,472,310 | ($4,642) | ($114,413) |
Beginning Balance, shares at Dec. 31, 2011 | 143,944,009 | 4,916,800 | ||||
Net income | 720,477 | 720,477 | ||||
Dividends to stockholders ($3.50 per share) | -486,603 | -486,603 | ||||
Anti-dilution adjustment paid to stock plan participants ($3.00 per share) | -3,269 | -3,269 | ||||
Stock options exercised | 148 | 148 | ||||
Stock options exercised, shares | 4,361 | |||||
Stock-based compensation, net of tax | 5,440 | 5,440 | ||||
Net gain (loss) on derivative financial instruments | 6,970 | 6,970 | ||||
Net gain (loss) on investments | 168 | 168 | ||||
Ending Balance at Dec. 31, 2012 | 4,576,394 | 1,439 | 1,983,957 | 2,702,915 | 2,496 | -114,413 |
Ending Balance, shares at Dec. 31, 2012 | 143,948,370 | 4,916,800 | ||||
Net income | 548,686 | 548,686 | ||||
Dividends to stockholders ($3.50 per share) | -486,620 | -486,620 | ||||
Anti-dilution adjustment paid to stock plan participants ($3.00 per share) | -3,820 | -3,820 | ||||
Stock options exercised | 110 | 1 | 109 | |||
Stock options exercised, shares | 3,878 | |||||
Stock-based compensation, net of tax | 4,654 | 4,654 | ||||
Net gain (loss) on derivative financial instruments | -1,993 | -1,993 | ||||
Net gain (loss) on investments | -153 | -153 | ||||
Ending Balance at Dec. 31, 2013 | 4,637,258 | 1,440 | 1,988,720 | 2,761,161 | 350 | -114,413 |
Ending Balance, shares at Dec. 31, 2013 | 143,952,248 | 4,916,800 | ||||
Net income | 387,011 | 387,011 | ||||
Dividends to stockholders ($3.50 per share) | -481,642 | -481,642 | ||||
Treasury stock purchase | -87,756 | -87,756 | ||||
Treasury stock purchase, shares | 1,895,561 | 1,895,561 | ||||
Anti-dilution adjustment paid to stock plan participants ($3.00 per share) | -4,531 | -4,531 | ||||
Stock options exercised | 213 | 213 | ||||
Stock options exercised, shares | 8,012 | |||||
Stock-based compensation, net of tax | 4,965 | 4,965 | ||||
Net gain (loss) on derivative financial instruments | -3,861 | -3,861 | ||||
Net gain (loss) on investments | -94 | -94 | ||||
Ending Balance at Dec. 31, 2014 | $4,451,563 | $1,440 | $1,993,898 | $2,661,999 | ($3,605) | ($202,169) |
Ending Balance, shares at Dec. 31, 2014 | 143,960,260 | 6,812,361 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (Retained Earnings [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Retained Earnings [Member] | |||
Stockholders dividends per share | $3.50 | $3.50 | $3.50 |
Adjustment paid to stock plan participants per share | $3 | $3 | $3 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities: | |||
Net income | $387,011 | $548,686 | $720,477 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 456,483 | 388,092 | 392,913 |
Loss on impairment of assets | 109,462 | 0 | 62,437 |
Gain on disposition of assets | -5,382 | -4,070 | -80,844 |
Bad debt expense (recovery) | 22,513 | -1,018 | |
(Gain) loss on foreign currency forward exchange contracts | -3,275 | 6,501 | 4,302 |
Deferred tax provision | 1,532 | 34,101 | -51,472 |
Accretion of discounts on marketable securities | -277 | -707 | 4,622 |
Stock-based compensation expense | 3,507 | 3,573 | 4,357 |
Deferred income, net | 60,061 | -54,274 | 1,767 |
Deferred expenses, net | -82,814 | 25,604 | 67,824 |
Long-term employee remuneration programs | 1,195 | 8,966 | 7,611 |
Other assets, noncurrent | 2,881 | -4,922 | -2,794 |
Other liabilities, noncurrent | -3,979 | -5,296 | 3,614 |
Proceeds from (payments of) settlement of foreign currency forward exchange contracts designated as accounting hedges | 3,275 | -6,501 | -4,302 |
Bank deposits denominated in nonconvertible currencies | 5,520 | -12,741 | |
Other | 2,200 | 1,954 | 1,258 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 5,269 | 7,905 | 65,074 |
Prepaid expenses and other current assets | -2,791 | 10,066 | -8,960 |
Accounts payable and accrued liabilities | 27,463 | 46,752 | 10,354 |
Taxes payable | 25,490 | 49,786 | 114,049 |
Net cash provided by operating activities | 992,831 | 1,065,988 | 1,311,269 |
Investing activities: | |||
Capital expenditures (including rig construction) | -2,032,764 | -957,598 | -702,041 |
Proceeds from disposition of assets, net of disposal costs | 18,318 | 4,900 | 138,495 |
Proceeds from sale and maturities of marketable securities | 8,000,057 | 4,650,085 | 2,725,118 |
Purchases of marketable securities | -6,265,846 | -5,249,462 | -2,977,290 |
Net cash used in investing activities | -280,235 | -1,552,075 | -815,718 |
Financing activities: | |||
Repayment of long-term debt | -250,000 | ||
Issuance of senior notes | 997,805 | ||
Debt issuance costs and arrangement fees | -2,249 | -9,973 | -3,838 |
Payment of dividends | -486,240 | -490,331 | -490,245 |
Purchase of treasury stock | -87,756 | ||
Other | 261 | 165 | 199 |
Net cash used in financing activities | -825,984 | 497,666 | -493,884 |
Net change in cash and cash equivalents | -113,388 | 11,579 | 1,667 |
Cash and cash equivalents, beginning of year | 347,011 | 335,432 | 333,765 |
Cash and cash equivalents, end of year | $233,623 | $347,011 | $335,432 |
General_Information
General Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
General Information | 1. General Information | ||||||||||||
Diamond Offshore Drilling, Inc. is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a fleet of 38 offshore drilling rigs, excluding three mid-water semisubmersible rigs which we plan to retire and scrap. Our current fleet, excluding the retired units, consists of 27 semisubmersibles, one of which is under construction, six jack-ups and five dynamically positioned drillships, one of which is under construction. Unless the context otherwise requires, references in these Notes to “Diamond Offshore,” “we,” “us” or “our” mean Diamond Offshore Drilling, Inc. and our consolidated subsidiaries. We were incorporated in Delaware in 1989. | |||||||||||||
As of February 16, 2015, Loews Corporation, or Loews, owned 52.5% of the outstanding shares of our common stock. | |||||||||||||
Principles of Consolidation | |||||||||||||
Our consolidated financial statements include the accounts of Diamond Offshore Drilling, Inc. and our subsidiaries after elimination of intercompany transactions and balances. | |||||||||||||
Use of Estimates in the Preparation of Financial Statements | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States, or U.S., or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
We consider short-term, highly liquid investments that have an original maturity of three months or less and deposits in money market mutual funds that are readily convertible into cash to be cash equivalents. We had bank deposits denominated in Egyptian pounds totaling $7.3 million and $14.3 million at December 31, 2014 and 2013, respectively. However, the local currency is not readily convertible into U.S. dollars or other currencies at this time. We expect to use a portion of these amounts to fund local obligations in Egyptian pounds in the short term and have reported $7.2 million and $12.7 million, representing the excess of total bank deposits over our estimated local currency requirements for the next twelve months, as “Other assets” in our Consolidated Balance Sheets at December 31, 2014 and 2013, respectively. | |||||||||||||
The effect of exchange rate changes on cash balances held in foreign currencies was not material for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
Marketable Securities | |||||||||||||
We classify our investments in marketable securities as available for sale and they are stated at fair value in our Consolidated Balance Sheets. Accordingly, any unrealized gains and losses, net of taxes, are reported in our Consolidated Balance Sheets in “Accumulated other comprehensive gain (loss)” until realized. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and such adjustments are included in our Consolidated Statements of Operations in “Interest income.” The sale and purchase of securities are recorded on the date of the trade. The cost of debt securities sold is based on the specific identification method. Realized gains or losses, as well as any declines in value that are judged to be other than temporary, are reported in our Consolidated Statements of Operations in “Other income (expense) – Other, net.” | |||||||||||||
Provision for Bad Debts | |||||||||||||
We record a provision for bad debts on a case-by-case basis when facts and circumstances indicate that a customer receivable may not be collectible. In establishing these reserves, we consider historical and other factors that predict collectability, including write-offs, recoveries and the monitoring of credit quality. Such provision is reported as a component of “Operating expense” in our Consolidated Statements of Operations. See Note 3. | |||||||||||||
Derivative Financial Instruments | |||||||||||||
Our derivative financial instruments consist primarily of foreign currency forward exchange, or FOREX, contracts which we may designate as cash flow hedges. In accordance with GAAP, each derivative contract is stated in the balance sheet at its fair value with gains and losses reflected in the income statement except that, to the extent the derivative qualifies for and is designated as an accounting hedge, the gains and losses are reflected in income in the same period as offsetting gains and losses on the qualifying hedged positions. Designated hedges are expected to be highly effective, and therefore, adjustments to record the carrying value of the effective portion of our derivative financial instruments to their fair value are recorded as a component of “Accumulated other comprehensive gain (loss),” or AOCGL, in our Consolidated Balance Sheets. The effective portion of the cash flow hedge will remain in AOCGL until it is reclassified into earnings in the period or periods during which the hedged transaction affects earnings or it is determined that the hedged transaction will not occur. We report such realized gains and losses as a component of “Contract drilling, excluding depreciation” expense in our Consolidated Statements of Operations to offset the impact of foreign currency fluctuations in our expenditures in local foreign currencies in the countries in which we operate. | |||||||||||||
Adjustments to record the carrying value of the ineffective portion of our derivative financial instruments to fair value and realized gains or losses upon settlement of derivative contracts not designated as cash flow hedges are reported as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations. See Notes 7 and 8. | |||||||||||||
Asset Held For Sale | |||||||||||||
At December 31, 2013, we reported the $7.7 million carrying value of our jack-up rig, the Ocean Spartan, as “Asset held for sale” in our Consolidated Balance Sheets. The Ocean Spartan was sold in June 2014 for an aggregate selling price of $16.5 million, and we recognized a net gain of $8.5 million on the transaction. | |||||||||||||
Drilling and Other Property and Equipment | |||||||||||||
We carry our drilling and other property and equipment at cost. Maintenance and routine repairs are charged to income currently while replacements and betterments, including associated inspection and recertification costs, which upgrade or increase the functionality of our existing equipment and that significantly extend the useful life of an existing asset, are capitalized. Significant judgments, assumptions and estimates may be required in determining whether or not such replacements and betterments meet the criteria for capitalization and in determining useful lives and salvage values of such assets. Changes in these judgments, assumptions and estimates could produce results that differ from those reported. Historically, the amount of capital additions requiring significant judgments, assumptions or estimates has not been significant. During the years ended December 31, 2014 and 2013, we capitalized $546.0 million and $302.0 million, respectively, in replacements and betterments of our drilling fleet, resulting from numerous projects ranging from $25,000 to $160 million per project. | |||||||||||||
Costs incurred for major rig upgrades and/or the construction of rigs are accumulated in construction work-in-progress, with no depreciation recorded on the additions, until the month the upgrade or newbuild is completed and the rig is placed in service. Upon retirement or sale of a rig, the cost and related accumulated depreciation are removed from the respective accounts and any gains or losses are included in our results of operations as “Gain on disposition of assets.” Depreciation is recognized up to applicable salvage values by applying the straight-line method over the remaining estimated useful lives from the year the asset is placed in service. Drilling rigs and equipment are depreciated over their estimated useful lives ranging from 3 to 30 years. | |||||||||||||
Capitalized Interest | |||||||||||||
We capitalize interest cost for qualifying construction and upgrade projects. During the three years ended December 31, 2014, we capitalized interest on qualifying expenditures, primarily related to our rig construction projects. See Note 9. | |||||||||||||
A reconciliation of our total interest cost to “Interest expense” as reported in our Consolidated Statements of Operations is as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Total interest cost including amortization of debt issuance costs | $ | 122,656 | $ | 99,080 | $ | 83,890 | |||||||
Capitalized interest | (60,603 | ) | (74,237 | ) | (37,674 | ) | |||||||
Total interest expense as reported | $ | 62,053 | $ | 24,843 | $ | 46,216 | |||||||
Impairment of Long-Lived Assets | |||||||||||||
We evaluate our property and equipment for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable (such as cold stacking a rig, the expectation of cold stacking a rig in the near term, a decision to retire or scrap a rig, or excess spending over budget on a newbuild, construction project or major rig upgrade). We utilize an undiscounted probability-weighted cash flow analysis in testing an asset for potential impairment. Our assumptions and estimates underlying this analysis include the following: | |||||||||||||
• | dayrate by rig; | ||||||||||||
• | utilization rate by rig (expressed as the actual percentage of time per year that the rig would be used); | ||||||||||||
• | the per day operating cost for each rig if active, warm stacked or cold stacked; | ||||||||||||
• | the estimated annual cost for rig replacements and/or enhancement programs; | ||||||||||||
• | the estimated maintenance, inspection or other costs associated with a rig returning to work; | ||||||||||||
• | salvage value for each rig; and | ||||||||||||
• | estimated proceeds that may be received on disposition of the rig. | ||||||||||||
Based on these assumptions and estimates, we develop a matrix using several different utilization/dayrate scenarios, to each of which we have assigned a probability of occurrence. The sum of our utilization scenarios (which include active, warm stacked and cold stacked) and probability of occurrence scenarios both equal 100% in the aggregate. We reevaluate these rigs annually, by updating the matrices for each rig and modifying our assumptions, giving consideration to the length of time the rig has been cold stacked, the current and expected market for the type of rig and expectations of future oil and gas prices. See Note 2. | |||||||||||||
Fair Value of Financial Instruments | |||||||||||||
We believe that the carrying amount of our current financial instruments approximates fair value because of the short maturity of these instruments. See Note 8. | |||||||||||||
Debt Issuance Costs | |||||||||||||
Debt issuance costs are included in our Consolidated Balance Sheets in “Other assets” and are amortized over the respective terms of the related debt. | |||||||||||||
Income Taxes | |||||||||||||
We account for income taxes in accordance with accounting standards that require the recognition of the amount of taxes payable or refundable for the current year and an asset and liability approach in recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been currently recognized in our financial statements or tax returns. In each of our tax jurisdictions we recognize a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and a deferred tax asset or liability for the estimated future tax effects attributable to temporary differences and carryforwards. Deferred tax assets are reduced by a valuation allowance, if necessary, which is determined by the amount of any tax benefits that, based on available evidence, are not expected to be realized under a “more likely than not” approach. We make judgments regarding future events and related estimates especially as they pertain to the forecasting of our effective tax rate, the potential realization of deferred tax assets such as utilization of foreign tax credits, and exposure to the disallowance of items deducted on tax returns upon audit. | |||||||||||||
We record interest related to accrued unrecognized tax positions in interest expense and recognize penalties associated with uncertain tax positions in our tax expense. See Note 14. | |||||||||||||
Treasury Stock | |||||||||||||
Depending on market conditions, we may, from time to time, purchase shares of our common stock in the open market or otherwise. We account for the purchase of treasury stock using the cost method, which reports the cost of the shares acquired in “Treasury stock” as a deduction from stockholders’ equity in our Consolidated Balance Sheets. During the year ended December 31, 2014, we repurchased 1,895,561 shares of our outstanding common stock at a cost of $87.8 million. We did not repurchase any shares of our outstanding common stock during 2013 or 2012. | |||||||||||||
Comprehensive Income (Loss) | |||||||||||||
Comprehensive income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances except those transactions resulting from investments by owners and distributions to owners. Comprehensive income (loss) for the three years ended December 31, 2014, 2013 and 2012 includes net income (loss) and unrealized holding gains and losses on marketable securities and financial derivatives designated as cash flow accounting hedges. See Note 11. | |||||||||||||
Foreign Currency | |||||||||||||
Our functional currency is the U.S. dollar. Foreign currency transaction gains and losses are reported as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations and include, when applicable, unrealized gains and losses to record the carrying value of our FOREX contracts not designated as accounting hedges, as well as realized gains and losses from the settlement of such contracts. For the years ended December 31, 2014, 2013 and 2012, we recognized aggregate net foreign currency gains (losses) of $3.2 million, $(4.9) million and $(2.0) million, respectively. See Note 7. | |||||||||||||
Revenue Recognition | |||||||||||||
We recognize revenue from dayrate drilling contracts as services are performed. In connection with such drilling contracts, we may receive fees (on either a lump-sum or dayrate basis) for the mobilization of equipment. We earn these fees as services are performed over the initial term of the related drilling contracts. We defer mobilization fees received, as well as direct and incremental mobilization costs incurred, and amortize each, on a straight-line basis, over the term of the related drilling contracts (which is the period we estimate to be benefited from the mobilization activity). Straight-line amortization of mobilization revenues and related costs over the term of the related drilling contracts (which generally range from two to 60 months) is consistent with the timing of net cash flows generated from the actual drilling services performed. Absent a contract, mobilization costs are recognized currently. Upon completion of a drilling contract, we recognize in earnings any demobilization fees received and costs incurred. | |||||||||||||
Some of our drilling contracts require downtime before the start of the contract to prepare the rig to meet customer requirements. At times, we may be compensated by the customer for such work (on either a lump-sum or dayrate basis). These fees are generally earned as services are performed over the initial term of the related drilling contracts. We defer contract preparation fees received, as well as direct and incremental costs associated with the contract preparation activities and amortize each, on a straight-line basis, over the term of the related drilling contracts (which we estimate to be benefited from the contract preparation activity). | |||||||||||||
From time to time, we may receive fees from our customers for capital improvements to our rigs (on either a lump-sum or dayrate basis). We defer such fees received in “Accrued liabilities” and “Other liabilities” in our Consolidated Balance Sheets and recognize these fees into income on a straight-line basis over the period of the related drilling contract. We capitalize the costs of such capital improvements and depreciate them over the estimated useful life of the improvement. | |||||||||||||
We record reimbursements received for the purchase of supplies, equipment, personnel services and other services provided at the request of our customers in accordance with a contract or agreement, for the gross amount billed to the customer, as “Revenues related to reimbursable expenses” in our Consolidated Statements of Operations. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. The new standard supersedes the industry-specific standards that currently exist under GAAP and provides a framework to address revenue recognition issues comprehensively for all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Under the new guidance, companies recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also provides for additional disclosure requirements. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and may be adopted using a retrospective or modified retrospective approach. Early adoption is not permitted. We are currently evaluating the provisions of ASU 2014-09 and have not yet determined its impact on our financial position, results of operations or cash flows. |
Asset_Impairments
Asset Impairments | 12 Months Ended |
Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Asset Impairments | 2. Asset Impairments |
During the third quarter of 2014, we initiated a plan to retire and scrap the Ocean New Era, the Ocean Epoch and the Ocean Whittington, all three of which were cold stacked and initially impaired in 2012, as well as the Ocean Concord and the Ocean Yatzy, which were idle in Brazil. We also initiated a plan to retire and scrap the Ocean Winner upon completion of its contract term in Brazil. | |
Using the undiscounted probability-weighted cash flow analysis described in Note 1, we determined that the carrying values of the six rigs to be retired and scrapped, or the Retirement Group, were impaired. The fair values of the five non-working rigs in the Retirement Group were determined based on discussions with and a quote received from a rig broker to scrap two of the rigs. We consider this to be a Level 3 fair value measurement due to the nonbinding nature of the quote, the significant level of estimation involved and the lack of transparency as to the inputs used. The fair value of the sixth rig in the Retirement Group, the Ocean Winner (which is under contract through March 2015) was determined using 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 current contract, as well as the aforementioned scrap value quote. As a result of our valuations, we recognized an impairment loss aggregating $109.5 million during the third quarter of 2014. See Note 8. | |
During the fourth quarter of 2014, two of the rigs in the Retirement Group were scrapped. The aggregate book value of the remaining rigs in the Retirement Group was $9.4 million at December 31, 2014 and is reported in “Drilling and other property and equipment, net of accumulated depreciation” in our Consolidated Balance Sheets. | |
At December 31, 2014, we had six rigs, in addition to the Retirement Group, which met our criteria for impairment evaluation, and we performed an impairment analysis for each of these rigs using the methodology described in Note 1. Based on our analyses, we concluded that these rigs were not impaired at December 31, 2014. | |
We did not record any impairment for the year ended December 31, 2013. | |
During the year ended December 31, 2012, we recognized an impairment loss of $62.4 million in connection with management’s decision at that time to market for sale four of our then cold stacked rigs. One of these rigs was sold to a third party in 2014 and the remaining three rigs were evaluated for impairment as part of the Retirement Group in 2014. See Note 1. | |
Management’s assumptions are an inherent part of our asset impairment evaluation, and the use of different assumptions could produce results that differ from those reported. |
Supplemental_Financial_Informa
Supplemental Financial Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Supplemental Financial Information | 3. Supplemental Financial Information | ||||||||||||
Consolidated Balance Sheet Information | |||||||||||||
Accounts receivable, net of allowance for bad debts, consists of the following: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Trade receivables | $ | 437,017 | $ | 473,013 | |||||||||
Value added tax receivables | 24,853 | 19,407 | |||||||||||
Amounts held in escrow | 6,450 | 3,066 | |||||||||||
Interest receivable | 317 | 7 | |||||||||||
Related party receivables | 339 | 587 | |||||||||||
Other | 610 | 615 | |||||||||||
469,586 | 496,695 | ||||||||||||
Allowance for bad debts | (5,724 | ) | (27,340 | ) | |||||||||
Total | $ | 463,862 | $ | 469,355 | |||||||||
An analysis of the changes in our provision for bad debts for each of the three years ended December 31, 2014, 2013 and 2012, is as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Allowance for bad debts, beginning of year | $ | 27,340 | $ | 5,458 | $ | 6,867 | |||||||
Bad debt expense: | |||||||||||||
Provision for bad debts | — | 22,513 | — | ||||||||||
Recovery of bad debts | — | — | (1,018 | ) | |||||||||
Total bad debt expense (recovery) | — | 22,513 | (1,018 | ) | |||||||||
Write off of uncollectible accounts against reserve | (21,148 | ) | (509 | ) | (391 | ) | |||||||
Other(1) | (468 | ) | (122 | ) | — | ||||||||
Allowance for bad debts, end of year | $ | 5,724 | $ | 27,340 | $ | 5,458 | |||||||
(1) | Includes revaluation adjustments for non-U.S. dollar denominated receivables, which have been recorded as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations. | ||||||||||||
See Note 8 for a discussion of our provision for bad debts and write off of uncollectible accounts against the reserve. | |||||||||||||
Prepaid expenses and other current assets consist of the following: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Rig spare parts and supplies | $ | 56,315 | $ | 52,439 | |||||||||
Deferred mobilization costs | 53,206 | 20,274 | |||||||||||
Prepaid insurance | 12,163 | 12,503 | |||||||||||
Deferred tax assets | 15,612 | 10,221 | |||||||||||
Prepaid taxes | 44,085 | 42,058 | |||||||||||
FOREX contracts | — | 1,562 | |||||||||||
Other | 4,160 | 4,940 | |||||||||||
Total | $ | 185,541 | $ | 143,997 | |||||||||
Accrued liabilities consist of the following: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Rig operating expenses | $ | 85,897 | $ | 87,307 | |||||||||
Payroll and benefits | 131,664 | 121,387 | |||||||||||
Deferred revenue | 63,209 | 26,975 | |||||||||||
Accrued capital project/upgrade costs | 103,123 | 86,274 | |||||||||||
Interest payable | 18,365 | 28,324 | |||||||||||
Personal injury and other claims | 8,570 | 9,687 | |||||||||||
FOREX contracts | 5,439 | 1,143 | |||||||||||
Other | 10,325 | 9,574 | |||||||||||
Total | $ | 426,592 | $ | 370,671 | |||||||||
Consolidated Statement of Cash Flows Information | |||||||||||||
Noncash investing activities excluded from the Consolidated Statements of Cash Flows and other supplemental cash flow information is as follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Accrued but unpaid capital expenditures at period end | $ | 103,123 | $ | 86,274 | $ | 56,595 | |||||||
Income tax benefits related to exercise of stock options | 1,458 | 1,081 | 1,083 | ||||||||||
Cash interest payments (1)(2) | 133,784 | 82,938 | 83,125 | ||||||||||
Cash income taxes paid, net of refunds: | |||||||||||||
U.S. federal | — | 62,000 | 71,000 | ||||||||||
Foreign | 92,049 | 78,041 | 72,249 | ||||||||||
State | (18 | ) | 190 | 243 | |||||||||
-1 | Interest payments, net of amounts capitalized, were $73.2 million, $16.5 million and $46.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
-2 | Interest paid on Internal Revenue Service assessments was $0.2 million during the year ended December 31, 2012. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | 4. Stock-Based Compensation | ||||||||||||||||
In March 2014, our Board of Directors adopted our Equity Incentive Compensation Plan, or Equity Plan, which amended and restated our Second Amended and Restated 2000 Stock Option Plan. The Equity Plan was approved by our stockholders in May 2014. | |||||||||||||||||
Awards that may be granted under the Equity Plan include time-vested awards and performance-based awards, which are earned on the achievement of certain performance criteria. The following types of awards may be granted under the Equity Plan: | |||||||||||||||||
• | Stock options (including incentive stock options and nonqualified stock options); | ||||||||||||||||
• | Stock appreciation rights, or SARs; | ||||||||||||||||
• | Restricted stock; | ||||||||||||||||
• | Restricted stock units, or RSUs; | ||||||||||||||||
• | Performance shares or units; and | ||||||||||||||||
• | Other stock-based awards (including dividend equivalents). | ||||||||||||||||
A maximum of 7,500,000 shares of our common stock is available for the grant or settlement of awards under the Equity Plan, subject to adjustment for certain business transactions and changes in capital structure. Vesting conditions and other terms and conditions of awards under the Equity Plan are determined by our Board of Directors or the compensation committee of our Board of Directors, subject to the terms of the Equity Plan. | |||||||||||||||||
Time-Vested Awards. Stock options and SARs awarded under the Equity Plan generally vest ratably over a four-year period and expire in ten years. The exercise price per share of stock options and SARs awarded under the Equity Plan may not be less than the fair market value of our common stock on the date of grant. | |||||||||||||||||
Total compensation cost recognized for time-vested awards under the Equity Plan (or its predecessor), consisting solely of awards of SARs, for the years ended December 31, 2014, 2013 and 2012 was $4.1 million, $3.9 million and $4.7 million, respectively. Tax benefits recognized for the years ended December 31, 2014, 2013 and 2012 related thereto were $1.4 million, $1.3 million and $1.6 million, respectively. | |||||||||||||||||
The fair value of SARs granted under the Equity Plan (or its predecessor) during each of the years ended December 31, 2014, 2013 and 2012 was estimated using the Black Scholes pricing model. | |||||||||||||||||
The following are the weighted average assumptions used in estimating the fair value of our SARs: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected life of SARs (in years) | 7 | 7 | 6 | ||||||||||||||
Expected volatility | 21.68 | % | 18.24 | % | 33.45 | % | |||||||||||
Dividend yield | 1.1 | % | 0.75 | % | 0.78 | % | |||||||||||
Risk free interest rate | 2.08 | % | 1.61 | % | 0.89 | % | |||||||||||
The expected life of SARs is based on historical data as is the expected volatility. The dividend yield is based on the current approved regular dividend rate in effect and the current market price at the time of grant. Risk free interest rates are determined using the U.S. Treasury yield curve at time of grant with a term equal to the expected life of the SARs. | |||||||||||||||||
A summary of stock option and SARs activity under the Equity Plan as of December 31, 2014 and changes during the year then ended is as follows: | |||||||||||||||||
Number of | Weighted- | Weighted-Average | Aggregate | ||||||||||||||
Awards | Average | Remaining | Intrinsic Value | ||||||||||||||
Exercise Price | Contractual Term | (In Thousands) | |||||||||||||||
(Years) | |||||||||||||||||
Awards outstanding at January 1, 2014 | 1,392,659 | $ | 78.22 | ||||||||||||||
Granted | 288,675 | $ | 47.09 | ||||||||||||||
Exercised | 9,377 | $ | 28.28 | ||||||||||||||
Forfeited | 12,696 | $ | 61.77 | ||||||||||||||
Expired | 71,931 | $ | 77.21 | ||||||||||||||
Awards outstanding at December 31, 2014 | 1,587,330 | $ | 73.03 | 6.3 | $ | 160 | |||||||||||
Awards exercisable at December 31, 2014 | 1,188,938 | $ | 78.62 | 5.5 | $ | 36 | |||||||||||
The weighted-average grant date fair values per share of awards granted during the years ended December 31, 2014, 2013 and 2012 were $10.40, $13.74 and $19.01, respectively. The total intrinsic value of awards exercised during the years ended December 31, 2014, 2013 and 2012 was $169,000, $162,000 and $147,000, respectively. The total fair value of awards vested during the years ended December 31, 2014, 2013 and 2012 was $4.5 million, $4.1 million and $5.2 million, respectively. As of December 31, 2014 there was $3.9 million of total unrecognized compensation cost related to nonvested SARs granted under the Equity Plan which we expect to recognize over a weighted average period of two years. | |||||||||||||||||
Performance-Based Awards. In March 2014, we awarded 52,581 targeted performance RSUs, with a volume weighted average price of our common stock preceding the grant date of $47.52 per share, to our Chief Executive Officer, or CEO, in connection with his commencement of service with us on March 3, 2014. RSUs are contractual rights to receive shares of our common stock in the future if the applicable vesting conditions are met. Targeted RSUs will become earned RSUs upon achievement of certain performance goals as set forth in the award certificate. In January 2015, the compensation committee of our Board of Directors determined that our CEO had satisfied all performance criteria required for the 52,581 target performance RSUs to become earned by him. Earned RSUs granted to our CEO will vest in one-third increments annually, over three years, commencing on the first anniversary of his hire date, with the first year being prorated for the portion of 2014 during which he was employed. As of December 31, 2014, none of the RSUs granted to our CEO had vested. | |||||||||||||||||
Because the stock-based compensation awarded to our CEO is a fixed monetary amount at the date of grant (the target value of $3.0 million on a prorated basis) with variances based on actual achievement of a performance goal, the award is being recorded as a share-based liability. Compensation cost will be recognized over the requisite service period as specified in the award. In connection with the targeted RSUs granted in March 2014, we recognized $0.9 million in compensation expense for the year ended December 31, 2014. “Accrued liabilities” at December 31, 2014 included $0.9 million for share-based liabilities. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings Per Share | 5. Earnings Per Share | ||||||||||||
A reconciliation of the numerators and the denominators of the basic and diluted per-share computations follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands, except per share data) | |||||||||||||
Net income – basic and diluted (numerator): | $ | 387,011 | $ | 548,686 | $ | 720,477 | |||||||
Weighted-average shares – basic (denominator): | 137,473 | 139,035 | 139,029 | ||||||||||
Dilutive effect of stock-based awards | 50 | 29 | 19 | ||||||||||
Weighted-average shares including conversions – diluted (denominator): | 137,523 | 139,064 | 139,048 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 2.82 | $ | 3.95 | $ | 5.18 | |||||||
Diluted | $ | 2.81 | $ | 3.95 | $ | 5.18 | |||||||
The following table sets forth the share effects of stock-based awards excluded from our computations of diluted earnings per share, or EPS, as the inclusion of such potentially dilutive shares would have been antidilutive for the periods presented: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Employee and director: | |||||||||||||
Stock options | 37 | 18 | 18 | ||||||||||
SARs | 1,488 | 956 | 853 |
Marketable_Securities
Marketable Securities | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
Marketable Securities | 6. Marketable Securities | ||||||||||||
We report our investments in marketable securities as current assets in our Consolidated Balance Sheets in “Marketable securities,” representing the investment of cash available for current operations. See Note 8. | |||||||||||||
Our investments in marketable securities are classified as available for sale and are summarized as follows: | |||||||||||||
December 31, 2014 | |||||||||||||
Amortized | Unrealized | Market | |||||||||||
Cost | Gain (Loss) | Value | |||||||||||
(In thousands) | |||||||||||||
Corporate bonds | $ | 16,003 | $ | (104 | ) | $ | 15,899 | ||||||
Mortgage-backed securities | 130 | 4 | 134 | ||||||||||
Total | $ | 16,133 | $ | (100 | ) | $ | 16,033 | ||||||
December 31, 2013 | |||||||||||||
Amortized | Unrealized | Market | |||||||||||
Cost | Gain (Loss) | Value | |||||||||||
(In thousands) | |||||||||||||
U.S. Treasury Bills and Notes (due within one year) | $ | 1,749,879 | $ | (22 | ) | $ | 1,749,857 | ||||||
Mortgage-backed securities | 188 | 8 | 196 | ||||||||||
Total | $ | 1,750,067 | $ | (14 | ) | $ | 1,750,053 | ||||||
Proceeds from maturities and sales of marketable securities and gross realized gains and losses are summarized as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Proceeds from maturities | $ | 8,000,000 | $ | 4,650,000 | $ | 2,575,000 | |||||||
Proceeds from sales | 57 | 85 | 150,118 | ||||||||||
Gross realized gains | — | — | — | ||||||||||
Gross realized losses | (1 | ) | (1 | ) | (6 | ) | |||||||
As of December 31, 2014, the majority of our marketable securities had matured. Our level of investment activity is dependent on our working capital and other capital requirements during the year, as well as a response to actual or anticipated events or conditions in the securities markets. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||
Derivative Financial Instruments | 7. Derivative Financial Instruments | ||||||||||||||||||||
Foreign Currency Forward Exchange Contracts | |||||||||||||||||||||
Our international operations expose us to foreign exchange risk associated with our costs payable in foreign currencies for employee compensation, foreign income tax payments and purchases from foreign suppliers. We may utilize FOREX contracts to manage our foreign exchange risk. Our FOREX contracts generally require us to net settle the spread between the contracted foreign currency exchange rate and the spot rate on the contract settlement date, which, for most of our contracts, is the average spot rate for the contract period. | |||||||||||||||||||||
We enter into FOREX contracts when we believe market conditions are favorable to purchase contracts for future settlement with the expectation that such contracts, when settled, will reduce our exposure to foreign currency gains and losses on future foreign currency expenditures. The amount and duration of such contracts is based on our monthly forecast of expenditures in the significant currencies in which we do business and for which there is a financial market (i.e., Australian dollars, Brazilian reais, British pounds sterling and Mexican pesos). These forward contracts are derivatives as defined by GAAP. | |||||||||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, we settled FOREX contracts with aggregate notional values of approximately $304.7 million, $307.4 million and $305.6 million, respectively, of which the entire aggregate amounts were designated as an accounting hedge. During the years ended December 31, 2014, 2013 and 2012, we did not enter into or settle any FOREX contracts that were not designated as accounting hedges. | |||||||||||||||||||||
The following table presents the aggregate amount of gain or loss recognized in our Consolidated Statements of Operations related to our FOREX contracts designated as hedging instruments for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income | |||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||
Location of Gain (Loss) Recognized in Income | 2014 | 2013 | 2012 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Contract drilling expense | $ | 3,275 | $ | (6,501 | ) | $ | (4,302 | ) | |||||||||||||
As of December 31, 2014, we had FOREX contracts outstanding in the aggregate notional amount of $70.2 million, consisting of $8.2 million in Australian dollars, $15.9 million in Brazilian reais, $31.3 million in British pounds sterling and $14.8 million in Mexican pesos. These contracts generally settle monthly through September 2015. As of December 31, 2014, all outstanding derivative contracts had been designated as cash flow hedges. | |||||||||||||||||||||
We have International Swap Dealers Association, or ISDA, contracts, which are standardized master legal arrangements that establish key terms and conditions, which govern certain derivative transactions. As of December 31, 2014, our FOREX contracts were with two counterparties and were governed under such ISDA agreements. There are no requirements to post collateral under these contracts; however, they do contain credit-risk related contingent provisions including credit support provisions and the net settlement of amounts owed in the event of early terminations. Additionally, should our credit ratings fall below a specified rating immediately following the merger of Diamond Offshore Drilling, Inc. with another entity, the counterparty may require all outstanding derivatives under the ISDA contract to be settled immediately at current market value. Our ISDA arrangements also include master netting agreements to further manage counterparty credit risk associated with our FOREX contracts. We have elected not to offset the fair value amounts recorded for our derivative contracts under these agreements in our Consolidated Balance Sheets as of December 31, 2014 and 2013; however, there would have been no significant differences in our Consolidated Balance Sheets if the estimated fair values were presented on a net basis for these periods. | |||||||||||||||||||||
The following table presents the fair values of our derivative FOREX contracts designated as hedging instruments at December 31, 2014 and 2013. | |||||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||
Prepaid expenses and other current assets | $ | — | $ | 1,562 | Accrued liabilities | $ | (5,439 | ) | $ | (1,143 | ) | ||||||||||
Treasury Lock Agreements | |||||||||||||||||||||
In connection with the offering of our senior unsecured notes in 2013, we entered into two treasury lock agreements in October 2013 for notional amounts totaling $500 million and designated such contracts as cash flow hedges of interest rate risk. The agreements were settled in November 2013 upon the completion of the offering of the senior notes for a net gain of $26,728, before tax. The gain has been recorded as a component of AOCGL and is being amortized to interest expense over the terms of the respective senior unsecured notes. See Note 10. | |||||||||||||||||||||
The following table presents the amounts recognized in our Consolidated Balance Sheets and Consolidated Statements of Operations related to our derivative financial instruments designated as cash flow hedges for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||
FOREX contracts: | |||||||||||||||||||||
Amount of (loss) gain recognized in AOCGL on derivative (effective portion) | $ | (2,281 | ) | $ | (10,542 | ) | $ | 6,519 | |||||||||||||
Location of (loss) gain reclassified from AOCGL into income (effective portion) | Contract drilling, | Contract drilling, | Contract drilling, | ||||||||||||||||||
excluding | excluding | excluding | |||||||||||||||||||
depreciation | depreciation | depreciation | |||||||||||||||||||
Amount of (loss) gain reclassified from AOCGL into income (effective portion) | $ | 3,650 | $ | (7,449 | ) | $ | (4,205 | ) | |||||||||||||
Location of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | Foreign currency | Foreign currency | Foreign currency | ||||||||||||||||||
transaction gain | transaction gain | transaction gain | |||||||||||||||||||
(loss) | (loss) | (loss) | |||||||||||||||||||
Amount of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | $ | (31 | ) | $ | (104 | ) | $ | (17 | ) | ||||||||||||
Treasury lock agreements: | |||||||||||||||||||||
Amount of gain recognized in AOCGL on derivative (effective portion) | $ | — | $ | 27 | $ | — | |||||||||||||||
Location of gain reclassified from AOCGL into income (effective portion) | Interest expense | Interest expense | Interest expense | ||||||||||||||||||
Amount of gain reclassified from AOCGL into income (effective portion) | $ | 8 | $ | 1 | $ | — | |||||||||||||||
As of December 31, 2014, the estimated amount of net unrealized gains (losses) associated with our FOREX contracts and treasury lock agreements that will be reclassified to earnings during the next twelve months was $(5.4) million and $8,000, respectively. The net unrealized gains (losses) associated with these derivative financial instruments will be reclassified to contract drilling expense and interest expense, respectively, to the extent fully effective. During the years ended December 31, 2014, 2013 and 2012 we did not reclassify any amounts from AOCGL due to the probability of an underlying forecasted transaction not occurring. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Disclosures | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Financial Instruments and Fair Value Disclosures | 8. Financial Instruments and Fair Value Disclosures | ||||||||||||||||||||
Concentrations of Credit and Market Risk | |||||||||||||||||||||
Financial instruments that potentially subject us to significant concentrations of credit or market risk consist primarily of periodic temporary investments of excess cash, trade accounts receivable and investments in debt securities, including mortgage-backed securities. We generally place our excess cash investments in U.S. government backed short-term money market instruments through several financial institutions. At times, such investments may be in excess of the insurable limit. We periodically evaluate the relative credit standing of these financial institutions as part of our investment strategy. | |||||||||||||||||||||
Most of our investments in debt securities are securitized corporate bonds whereby our credit risk is mitigated by the collateral. However, we are exposed to market risk due to price volatility associated with interest rate fluctuations. | |||||||||||||||||||||
Concentrations of credit risk with respect to our trade accounts receivable are limited primarily due to the entities comprising our customer base. Since the market for our services is the offshore oil and gas industry, this customer base consists primarily of major and independent oil and gas companies and government-owned oil companies. During 2014 and 2013, our largest customer in Brazil, Petróleo Brasileiro S.A., or Petrobras, (a Brazilian multinational energy company that is majority-owned by the Brazilian government), accounted for $123.3 million and $154.5 million, or 29% and 35%, respectively, of our total consolidated net trade accounts receivable balance. | |||||||||||||||||||||
In general, before working for a customer with whom we have not had a prior business relationship and/or whose financial stability may be uncertain to us, we perform a credit review on that company. Based on that analysis, we may require that the customer present a letter of credit, prepay or provide other credit enhancements. We record a provision for bad debts on a case-by-case basis when facts and circumstances indicate that a customer receivable may not be collectible and, historically, losses on our trade receivables have been infrequent occurrences. | |||||||||||||||||||||
During 2013, based on our assessment of the financial condition of two of our customers, Niko Resources Ltd., or Niko, and OGX Petróleo e Gás Ltda. (a privately owned Brazilian oil and natural gas company that filed for bankruptcy in October 2013), or OGX, and our expectations at the time regarding the probability of collection of amounts due to us from them, we recorded $22.5 million in bad debt expense to fully reserve all outstanding receivables owed to us. | |||||||||||||||||||||
In December 2013, we entered into a settlement agreement with Niko, or the Niko Settlement, whereby Niko will be released from certain obligations under the dayrate contracts for the Ocean Monarch and Ocean Lexington, subject to and effective upon the full payment of amounts owed to us under the Niko Settlement and subject to its other conditions. In accordance with the terms of the Niko Settlement, we received cash payments of $20.3 million during 2014 and $25.0 million in the fourth quarter of 2013, which we recognized as revenue against invoices due us. Niko is further obligated to make future periodic payments to us pursuant to the Niko Settlement totaling an aggregate of $34.8 million, payable at various times through December 2016. We plan to recognize these amounts in revenue as they are received due to the uncertainty regarding their timing and collection. | |||||||||||||||||||||
In 2014, the creditors of OGX, including us, agreed to a settlement whereby the creditors would receive shares of the reorganized OGX company in full settlement of obligations owed to them by OGX. As a result of the settlement, we have written off $21.2 million in receivables due us from OGX against the associated allowance for bad debts, which was set up in 2013. See Note 3. | |||||||||||||||||||||
Fair Values | |||||||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prescribed by GAAP requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: | |||||||||||||||||||||
Level 1 | Quoted prices for identical instruments in active markets. Level 1 assets include short-term investments such as money market funds, U.S. Treasury Bills and Treasury notes. Our Level 1 assets at December 31, 2014 consisted of cash held in money market funds of $197.5 million and time deposits of $20.3 million. Our Level 1 assets at December 31, 2013 consisted of cash held in money market funds of $281.3 million, time deposits of $30.0 million and investments in U.S. Treasury securities of $1,749.9 million. | ||||||||||||||||||||
Level 2 | Quoted market prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities include residential mortgage-backed securities, corporate bonds purchased in a private placement offering and over-the-counter FOREX contracts. Our residential mortgage-backed securities and corporate bonds were valued using a model-derived valuation technique based on the quoted closing market prices received from a financial institution. Our FOREX contracts were valued based on quoted market prices, which are derived from observable inputs including current spot and forward rates, less the contract rate multiplied by the notional amount. The inputs used in our valuation are obtained from a Bloomberg curve analysis which uses par coupon swap rates to calculate implied forward rates so that projected floating rate cash flows can be calculated. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment. | ||||||||||||||||||||
Level 3 | Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Level 3 assets and liabilities generally include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation or for which there is a lack of transparency as to the inputs used. Our Level 3 assets at December 31, 2014 consisted of nonrecurring measurements of four mid-water semisubmersible rigs for which we recorded an impairment loss during the third quarter of 2014. See Notes 1 and 2. | ||||||||||||||||||||
Market conditions could cause an instrument to be reclassified among Levels 1, 2 and 3. Our policy regarding fair value measurements of financial instruments transferred into and out of levels is to reflect the transfers as having occurred at the beginning of the reporting period. There were no transfers between fair value levels during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||
Certain of our assets and liabilities are required to be measured at fair value on a recurring basis in accordance with GAAP. In addition, certain assets and liabilities may be recorded at fair value on a nonrecurring basis. Generally, we record assets at fair value on a nonrecurring basis as a result of impairment charges. We recorded impairment charges related to six mid-water semisubmersible rigs, which were measured at fair value on a nonrecurring basis in the third quarter of 2014, of $109.5 million and have presented the loss in “Impairment of assets” in our Consolidated Statements of Operations for the year ended December 31, 2014. We did not record any such impairment charges during the year ended December 31, 2013. See Notes 1 and 2. | |||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||
Fair Value Measurements Using | Assets at Fair | Total Losses | |||||||||||||||||||
Value | for Year | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Ended | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Short-term investments | $ | 217,789 | $ | — | $ | — | $ | 217,789 | |||||||||||||
Corporate bonds | — | 15,899 | — | 15,899 | |||||||||||||||||
Mortgage-backed securities | — | 134 | — | 134 | |||||||||||||||||
Total assets | $ | 217,789 | $ | 16,033 | $ | — | $ | 233,822 | |||||||||||||
Liabilities: | |||||||||||||||||||||
FOREX contracts | $ | — | $ | (5,439 | ) | $ | — | $ | (5,439 | ) | |||||||||||
Nonrecurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired assets (1)(2) | $ | — | $ | — | $ | 9,421 | $ | 9,421 | $ | 109,462 | |||||||||||
(1) | Represents the book value as of December 31, 2014 of four of our mid-water semisubmersible rigs, which were written down to their estimated recoverable amounts in September 2014 and had not yet been scrapped. | ||||||||||||||||||||
(2) | Includes depreciation expense of $6.6 million recognized in the fourth quarter of 2014 for the Ocean Winner, which is still under contract through March 2015 and was written down to its estimated fair value using an income approach in September 2014 and excludes the fair values of the Ocean New Era and Ocean Whittington, which were included in the September 2014 write-down, but were subsequently sold for scrap in the fourth quarter of 2014. | ||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Fair Value Measurements Using | Assets at | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Short-term investments | $ | 2,061,154 | $ | — | $ | — | $ | 2,061,154 | |||||||||||||
FOREX contracts | — | 1,562 | — | 1,562 | |||||||||||||||||
Mortgage-backed securities | — | 197 | — | 197 | |||||||||||||||||
Total assets | $ | 2,061,154 | $ | 1,759 | $ | — | $ | 2,062,913 | |||||||||||||
Liabilities: | |||||||||||||||||||||
FOREX contracts | $ | — | $ | (1,143 | ) | $ | — | $ | (1,143 | ) | |||||||||||
We believe that the carrying amounts of our other financial assets and liabilities (excluding long-term debt), which are not measured at fair value in our Consolidated Balance Sheets, approximate fair value based on the following assumptions: | |||||||||||||||||||||
• | Cash and cash equivalents — The carrying amounts approximate fair value because of the short maturity of these instruments. | ||||||||||||||||||||
• | Accounts receivable and accounts payable — The carrying amounts approximate fair value based on the nature of the instruments. | ||||||||||||||||||||
We consider our senior notes, including current maturities, to be Level 2 liabilities under the GAAP fair value hierarchy and, accordingly, the fair value of our senior notes was derived using a third-party pricing service at December 31, 2014 and 2013. We perform control procedures over information we obtain from pricing services and brokers to test whether prices received represent a reasonable estimate of fair value. These procedures include the review of pricing service or broker pricing methodologies and comparing fair value estimates to actual trade activity executed in the market for these instruments occurring generally within a 10-day window of the report date. Fair values and related carrying values (see Note 10) of our senior notes are shown below. | |||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||
(In millions) | |||||||||||||||||||||
5.15% Senior Notes due 2014 | $ | — | $ | — | $ | 257.4 | $ | 250 | |||||||||||||
4.875% Senior Notes due 2015 | 255 | 250 | 265.7 | 249.9 | |||||||||||||||||
5.875% Senior Notes due 2019 | 544.9 | 499.6 | 578.1 | 499.6 | |||||||||||||||||
3.45% Senior Notes due 2023 | 232 | 249.1 | 241.4 | 249 | |||||||||||||||||
5.70% Senior Notes due 2039 | 478.5 | 497 | 543.1 | 496.9 | |||||||||||||||||
4.875% Senior Notes due 2043 | 638.9 | 748.8 | 736.1 | 748.8 | |||||||||||||||||
We have estimated the fair value amounts by using appropriate valuation methodologies and information available to management. Considerable judgment is required in developing these estimates, and accordingly, no assurance can be given that the estimated values are indicative of the amounts that would be realized in a free market exchange. |
Drilling_and_Other_Property_an
Drilling and Other Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Drilling and Other Property and Equipment | 9. Drilling and Other Property and Equipment | ||||||||
Cost and accumulated depreciation of drilling and other property and equipment are summarized as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Drilling rigs and equipment | $ | 10,555,314 | $ | 7,412,066 | |||||
Construction work-in-progress | 439,206 | 1,668,211 | |||||||
Land and buildings | 66,989 | 65,627 | |||||||
Office equipment and other | 70,591 | 65,799 | |||||||
Cost | 11,132,100 | 9,211,703 | |||||||
Less accumulated depreciation | (4,186,147 | ) | (3,744,476 | ) | |||||
Drilling and other property and equipment, net | $ | 6,945,953 | $ | 5,467,227 | |||||
Construction work-in-progress, including capitalized interest, at December 31, 2014 and 2013 is summarized as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Ultra-deepwater drillships | $ | 225,405 | $ | 868,908 | |||||
Ultra-deepwater semisubmersible: | |||||||||
Ocean GreatWhite | 213,801 | 195,578 | |||||||
Deepwater semisubmersibles: | |||||||||
Ocean Onyx | — | 339,129 | |||||||
Ocean Apex | — | 264,596 | |||||||
Total construction work-in-progress | $ | 439,206 | $ | 1,668,211 | |||||
At December 31, 2013, construction work-in-progress included an aggregate $1.3 billion for the deepwater semisubmersibles Ocean Onyx and Ocean Apex and the ultra-deepwater drillships Ocean BlackHawk, Ocean BlackHornet and Ocean BlackRhino, which were placed in service at various times during 2014, and are no longer reported as construction work-in-progress at December 31, 2014. Construction work-in-progress at December 31, 2014 represents costs associated with the construction of our final drillship, the Ocean BlackLion, and the semisubmersible Ocean GreatWhite. See Note 12. |
Credit_Agreement_and_Senior_No
Credit Agreement and Senior Notes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Credit Agreement and Senior Notes | 10. Credit Agreement and Senior Notes | ||||||||||||||||
Credit Agreement | |||||||||||||||||
We have a syndicated 5-Year Revolving Credit Agreement, or Credit Agreement, with Wells Fargo Bank, National Association, as administrative agent and swingline lender. Effective October 22, 2014, we entered into a commitment increase and extension agreement and third amendment to the Credit Agreement which, among other things, increased the aggregate commitment under the Credit Agreement from $1.0 billion to $1.5 billion and provided for an approximately seven-month extension of the maturity date for most of the lenders. In addition, pursuant to such amendment, subject to the conditions specified in the Credit Agreement, we have the option to increase the revolving commitments under the Credit Agreement by up to an additional $500 million from time to time, upon receipt of additional commitments from new or existing lenders, and to request up to two additional one-year extensions of the maturity date. As so amended, the Credit Agreement provides for a $1.5 billion senior unsecured revolving credit facility for general corporate purposes, maturing on October 22, 2019, except for $40 million of commitments that mature on March 17, 2019. The entire amount of the facility is available, subject to its terms, for revolving loans. Up to $250 million of the facility may be used for the issuance of performance or other standby letters of credit and up to $100 million may be used for swingline loans. | |||||||||||||||||
Revolving loans under the Credit Agreement bear interest, at our option, at a rate per annum based on either an alternate base rate, or ABR, or a Eurodollar Rate, as defined in the Credit Agreement, plus the applicable interest margin for an ABR loan or a Eurodollar loan. The ABR is the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) the daily one-month Eurodollar Rate plus 1.00%. The applicable interest margin for ABR loans varies from 0% to 0.25%. The applicable interest margin for Eurodollar loans varies between 0.75% and 1.25%. | |||||||||||||||||
Swingline loans bear interest, at our option, at a rate per annum equal to (i) the ABR plus the applicable interest margin for ABR loans or (ii) the daily one-month Eurodollar Rate plus the applicable interest margin for Eurodollar loans. | |||||||||||||||||
Under our Credit Agreement, we also pay, based on our current long-term credit ratings, and as applicable, other customary fees including, but not limited to, a commitment fee on the unused commitments under the Credit Agreement, varying between 0.06% and 0.20% per annum, and a fronting fee to the issuing bank for each letter of credit. Participation fees for letters of credit are dependent upon the type of letter of credit issued, varying between 0.375% and 0.625% per annum for performance letters of credit, and between 0.75% and 1.25% per annum for all other letters of credit. Changes in credit ratings could lower or raise the fees that we pay under the Credit Agreement. | |||||||||||||||||
The Credit Agreement contains customary covenants including, but not limited to, maintenance of a ratio of consolidated indebtedness to total capitalization, as defined in the Credit Agreement, of not more than 60% at the end of each fiscal quarter, as well as limitations on liens; mergers, consolidations, liquidation and dissolution; changes in lines of business; swap agreements; transactions with affiliates; and subsidiary indebtedness. | |||||||||||||||||
At December 31, 2014 and 2013, there were no amounts outstanding under the Credit Agreement. | |||||||||||||||||
Senior Notes | |||||||||||||||||
At December 31, 2014, our senior notes were comprised of the following debt issues: | |||||||||||||||||
Principal | Interest Rate | Semiannual | |||||||||||||||
Amount | Interest Payment | ||||||||||||||||
Debt Issue | (In millions) | Maturity Date | Coupon | Effective | Dates | ||||||||||||
4.875% Senior Notes due 2015 | $ | 250 | 1-Jul-15 | 4.875 | % | 4.90% | January 1 and July 1 | ||||||||||
5.875% Senior Notes due 2019 | $ | 500 | 1-May-19 | 5.875 | % | 5.89 | % | May 1 and November 1 | |||||||||
3.45% Senior Notes due 2023 | $ | 250 | 1-Nov-23 | 3.45 | % | 3.5 | % | May 1 and November 1 | |||||||||
5.70% Senior Notes due 2039 | $ | 500 | 15-Oct-39 | 5.7 | % | 5.75 | % | April 15 and October 15 | |||||||||
4.875% Senior Notes due 2043 | $ | 750 | 1-Nov-43 | 4.875 | % | 4.89 | % | May 1 and November 1 | |||||||||
At December 31, 2014 and 2013, the carrying value of our senior notes was as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
5.15% Senior Notes due 2014 | $ | — | $ | 249,954 | |||||||||||||
4.875% Senior Notes due 2015 | 249,962 | 249,898 | |||||||||||||||
5.875% Senior Notes due 2019 | 499,626 | 499,551 | |||||||||||||||
3.45% Senior Notes due 2023 | 249,077 | 248,988 | |||||||||||||||
5.70% Senior Notes due 2039 | 496,973 | 496,919 | |||||||||||||||
4.875% Senior Notes due 2043 | 748,850 | 748,833 | |||||||||||||||
Total senior notes, net of unamortized discount | $ | 2,244,488 | $ | 2,494,143 | |||||||||||||
Less: Current portion of long-term debt | 249,962 | 249,954 | |||||||||||||||
Total Long-term debt | $ | 1,994,526 | $ | 2,244,189 | |||||||||||||
As of December 31, 2014, the aggregate annual maturity of our senior notes was as follows: | |||||||||||||||||
Aggregate | |||||||||||||||||
Principal | |||||||||||||||||
Amount | |||||||||||||||||
Year Ending December 31, | (In thousands | ) | |||||||||||||||
2015 | $ | 250,000 | |||||||||||||||
2016 | — | ||||||||||||||||
2017 | — | ||||||||||||||||
2018 | — | ||||||||||||||||
2019 | 500,000 | ||||||||||||||||
Thereafter | 1,500,000 | ||||||||||||||||
Total maturities of senior notes | 2,250,000 | ||||||||||||||||
Less: unamortized discounts | (5,512 | ) | |||||||||||||||
Total maturities of senior notes, net of unamortized discount | $ | 2,244,488 | |||||||||||||||
2013 Debt Issues. In 2013, we issued $1.0 billion aggregate principal amount of senior notes consisting of $250.0 million aggregate principal amount of 3.45% senior unsecured notes due 2023 and $750.0 million aggregate principal amount of 4.875% senior unsecured notes due 2043 or, collectively, the New Notes, for general corporate purposes, including redemption, repurchase or retirement of our 5.15% senior notes due September 1, 2014 and our 4.875% senior notes due July 1, 2015, or 2015 Notes. The transaction resulted in net proceeds to us of $987.8 million after deducting underwriting discounts, commissions and estimated expenses. | |||||||||||||||||
The New Notes are unsecured and unsubordinated obligations of Diamond Offshore Drilling, Inc., and rank equally in right of payment to all of its existing and future unsecured and unsubordinated indebtedness, and are effectively subordinated to all existing and future obligations of our subsidiaries. We have the right to redeem all or a portion of the New Notes for cash at any time or from time to time, on at least 15 days but not more than 60 days prior written notice, at a make-whole redemption price specified in the governing indenture (if applicable) plus accrued and unpaid interest to, but excluding, the date of redemption. | |||||||||||||||||
Other Debt. Our 2015 Notes, 5.875% Senior Notes due 2019 and 5.70% Senior Notes due 2039 are all unsecured and unsubordinated obligations of Diamond Offshore Drilling, Inc. and rank equally in right of payment to its existing and future unsecured and unsubordinated indebtedness, and are effectively subordinated to all existing and future obligations of our subsidiaries. We have the right to redeem all or a portion of these notes for cash at any time or from time to time, on at least 15 days but not more than 60 days prior written notice, at the redemption price specified in the governing indenture plus accrued and unpaid interest to the date of redemption. | |||||||||||||||||
Our 2015 Notes, in the aggregate principal amount of $250.0 million, will mature on July 1, 2015. Accordingly, the aggregate $249.9 million accreted value of our 2015 Notes has been presented as “Current portion of long-term debt” in our Consolidated Balance Sheets at December 31, 2014. In September 2014, we repaid $250.0 million in aggregate principal amount of our 5.15% Senior Notes due September 1, 2014. These were presented as “Current portion of long-term debt” in our Consolidated Balance Sheets at December 31, 2013. |
Other_Comprehensive_Income_Los
Other Comprehensive Income (Loss) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Equity [Abstract] | |||||||||||||||
Other Comprehensive Income (Loss) | 11. Other Comprehensive Income (Loss) | ||||||||||||||
The following table sets forth the components of “Other comprehensive income (loss)” and the related income tax effects thereon for the three years ended December 31, 2014 and the cumulative balances in AOCGL by component at December 31, 2014, 2013 and 2012. | |||||||||||||||
Unrealized (Loss) Gain on | |||||||||||||||
Derivative | Marketable | Total | |||||||||||||
Financial | Securities | AOCGL | |||||||||||||
Instruments | |||||||||||||||
(In thousands) | |||||||||||||||
Balance at January 1, 2012 | $ | (4,620 | ) | $ | (22 | ) | $ | (4,642 | ) | ||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $(2,282) and $(28) | 4,237 | 124 | 4,361 | ||||||||||||
Reclassification adjustments for items included in Net Income, after tax of $(1,472) and $(1) | 2,733 | 44 | 2,777 | ||||||||||||
Total other comprehensive income (loss) | 6,970 | 168 | 7,138 | ||||||||||||
Balance at December 31, 2012 | 2,350 | 146 | 2,496 | ||||||||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $3,682 and $18 | (6,833 | ) | (6 | ) | (6,839 | ) | |||||||||
Reclassification adjustments for items included in Net Income, after tax of $(2,608) and $18 | 4,840 | (147 | ) | 4,693 | |||||||||||
Total other comprehensive income (loss) | (1,993 | ) | (153 | ) | (2,146 | ) | |||||||||
Balance at December 31, 2013 | 357 | (7 | ) | 350 | |||||||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $799 and $(15) | (1,482 | ) | (69 | ) | (1,551 | ) | |||||||||
Reclassification adjustments for items included in Net Income, after tax of $1,279 and $7 | (2,379 | ) | (25 | ) | (2,404 | ) | |||||||||
Total other comprehensive income (loss) | (3,861 | ) | (94 | ) | (3,955 | ) | |||||||||
Balance at December 31, 2014 | $ | (3,504 | ) | $ | (101 | ) | $ | (3,605 | ) | ||||||
The following table presents the line items in our Consolidated Statements of Operations affected by reclassification adjustments out of AOCGL. | |||||||||||||||
Year Ended December 31, | Consolidated Statements of | ||||||||||||||
Operations Line Items | |||||||||||||||
Major Components of AOCGL | 2014 | 2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||||
Derivative financial instruments: | |||||||||||||||
Unrealized loss (gain) on FOREX contracts | $ | 3,650 | $ | (7,449 | ) | $ | (4,205 | ) | Contract drilling, excluding depreciation | ||||||
Unrealized loss (gain) on Treasury Lock Agreements | 8 | 1 | — | Interest expense | |||||||||||
(1,279 | ) | 2,608 | 1,472 | Income tax expense | |||||||||||
$ | 2,379 | $ | (4,840 | ) | $ | (2,733 | ) | Net of tax | |||||||
Marketable securities: | |||||||||||||||
Unrealized loss (gain) on marketable securities | $ | 32 | $ | 165 | $ | (45 | ) | Other, net | |||||||
(7 | ) | (18 | ) | 1 | Income tax expense | ||||||||||
$ | 25 | $ | 147 | $ | (44 | ) | Net of tax | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | 12. Commitments and Contingencies | |||
Various claims have been filed against us in the ordinary course of business, including claims by offshore workers alleging personal injuries. With respect to each claim or exposure, we have made an assessment, in accordance with GAAP, of the probability that the resolution of the matter would ultimately result in a loss. When we determine that an unfavorable resolution of a matter is probable and such amount of loss can be determined, we record a liability for the amount of the estimated loss at the time that both of these criteria are met. Our management believes that we have recorded adequate accruals for any liabilities that may reasonably be expected to result from these claims. | ||||
Asbestos Litigation. We are one of several unrelated defendants in lawsuits filed in Mississippi and Louisiana state courts alleging that defendants manufactured, distributed or utilized drilling mud containing asbestos and, in our case, allowed such drilling mud to have been utilized aboard our offshore drilling rigs. The plaintiffs seek, among other things, an award of unspecified compensatory and punitive damages. The manufacture and use of asbestos-containing drilling mud had already ceased before we acquired any of the drilling rigs addressed in these lawsuits. We believe that we are not liable for the damages asserted and we expect to receive complete defense and indemnity from Murphy Exploration & Production Company with respect to many of the lawsuits pursuant to the terms of our 1992 asset purchase agreement with them. We also believe that we are not liable for the damages asserted in the remaining lawsuits pursuant to the terms of our 1989 asset purchase agreement with Diamond M Corporation, and we filed a declaratory judgment action in Texas state court against NuStar Energy LP, or NuStar, and Kaneb Management Co., L.L.C., or Kaneb, the successors to Diamond M Corporation, seeking a judicial determination that we did not assume liability for these claims. Trial of this declaratory judgment action is scheduled to commence in 2015. We are unable to estimate our potential exposure, if any, to these lawsuits at this time but do not believe that our ultimate liability, if any, resulting from this litigation will have a material effect on our consolidated financial condition, results of operations or cash flows. | ||||
We have been named in various other lawsuits or threatened actions that are incidental to the ordinary course of our business. We intend to defend these matters vigorously; however, litigation is inherently unpredictable, and the ultimate outcome or effect of these lawsuits and actions cannot be predicted with certainty. As a result, there can be no assurance as to the ultimate outcome of these lawsuits. Any claims against us, whether meritorious or not, could cause us to incur costs and expenses, require significant amounts of management time and result in the diversion of significant operational resources. In the opinion of our management, no pending or known threatened claims, actions or proceedings against us are expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. | ||||
Brazilian Withholding Contingency. In July 2014, Petrobras notified us, along with other industry participants, that it is 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. Petrobras has also notified us that, if Petrobras is ultimately assessed and must pay such withholding taxes, it will seek reimbursement from us for the portion allocable to our drilling rigs. We dispute any basis for Petrobras to obtain such reimbursement, and we have notified Petrobras of our position. If necessary, we intend to defend any reimbursement claims against us vigorously. We are currently unable to estimate the range of loss, if any, that we would incur if Petrobras is ultimately assessed such taxes and if it is determined that Petrobras is entitled to obtain reimbursement from us. If Petrobras is assessed such taxes and we are ultimately required to pay such reimbursement, 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. | ||||
NPI Arrangement. We received customer payments measured by a percentage net profits interest (primarily of 27%) under an overriding royalty interest in certain developmental oil-and-gas producing properties, or NPI, which we believe is a real property interest. Our drilling program related to the NPI was completed in 2011, and the balance of the amounts due to us under the NPI was received in 2013. However, the customer who conveyed the NPI to us filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in August 2012. Certain parties (including the debtor) in the bankruptcy proceedings questioned whether our NPI, and certain amounts we received under it since the filing of the bankruptcy, should be included in the debtor’s estate under the bankruptcy proceeding. In 2013, we filed a declaratory judgment action in the bankruptcy court seeking a declaration that our NPI, and payments that we received from it since the filing of the bankruptcy, are not part of the bankruptcy estate. We agreed to a settlement with the company that purchased most of the debtor’s assets (including the debtor’s claims against our NPI) whereby the nature of our NPI will not be challenged by that party and our declaratory judgment action was dismissed. Several lienholders filed motions in the bankruptcy contending that their liens have priority and seeking disgorgement of payments made to us after the bankruptcy was filed. We believe that the payments at issue are superior to these liens and expect the bankruptcy proceedings to be concluded with no further impact to us. | ||||
Personal Injury Claims. Under our current insurance policies that expire on May 1, 2015, our deductibles for marine liability insurance coverage, including personal injury claims, which primarily result from Jones Act liability in the Gulf of Mexico, are $25.0 million for the first occurrence, with no aggregate deductible, and vary in amounts ranging between $5.0 million and, if aggregate claims exceed certain thresholds, up to $100.0 million for each subsequent occurrence, depending on the nature, severity and frequency of claims that might arise during the policy year. | ||||
The Jones Act is a federal law that permits seamen to seek compensation for certain injuries during the course of their employment on a vessel and governs the liability of vessel operators and marine employers for the work-related injury or death of an employee. We engage outside consultants to assist us in estimating our aggregate liability for personal injury claims based on our historical losses and utilizing various actuarial models. We allocate a portion of the aggregate liability to “Accrued liabilities” based on an estimate of claims expected to be paid within the next twelve months with the residual recorded as “Other liabilities.” At December 31, 2014, our estimated liability for personal injury claims was $39.4 million, of which $8.2 million and $31.2 million were recorded in “Accrued liabilities” and “Other liabilities,” respectively, in our Consolidated Balance Sheets. At December 31, 2013, our estimated liability for personal injury claims was $35.5 million, of which $9.5 million and $26.0 million were recorded in “Accrued liabilities” and “Other liabilities,” respectively, in our Consolidated Balance Sheets. The eventual settlement or adjudication of these claims could differ materially from our estimated amounts due to uncertainties such as: | ||||
• | the severity of personal injuries claimed; | |||
• | significant changes in the volume of personal injury claims; | |||
• | the unpredictability of legal jurisdictions where the claims will ultimately be litigated; | |||
• | inconsistent court decisions; and | |||
• | the risks and lack of predictability inherent in personal injury litigation. | |||
Purchase Obligations. | ||||
Ultra-Deepwater Floater Construction. The Ocean GreatWhite, a 10,000 foot dynamically positioned, harsh environment semisubmersible drilling rig, is under construction in South Korea at an estimated cost of $764 million, including shipyard costs, customer-requested equipment, capital spares, commissioning, project management and shipyard supervision. The contracted price to Hyundai Heavy Industries Co., Ltd., or Hyundai, totaling $628.5 million is payable in two installments, of which the first installment of $188.6 million has been paid. The final installment of $439.9 million is due upon delivery of the rig, which is expected to occur in the first quarter of 2016. | ||||
Drillship Construction. At December 31, 2014, we had one remaining ultra-deepwater drillship, the Ocean BlackLion, under construction by Hyundai for an estimated cost of $655 million, including shipyard costs, commissioning, capital spares and project management costs. The contracted price of the drillship is payable to Hyundai in two installments, with final payment due on delivery of the drillship. We have paid the first installment of $169.3 million. We expect the Ocean BlackLion to be delivered in the first quarter of 2015, at which time approximately $395 million will be payable to Hyundai. | ||||
At December 31, 2014 and 2013, we had no other purchase obligations for major rig upgrades or any other significant obligations, except for those related to our direct rig operations, which arise during the normal course of business. | ||||
Operating Leases. We lease office and yard facilities, housing, equipment and vehicles under operating leases, which expire at various times through the year 2018. Total rent expense amounted to $10.6 million, $13.5 million and $10.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. Future minimum rental payments under leases are approximately $1.3 million and $1.1 million for the years 2015 and 2016, respectively, and $1.2 million in the aggregate for the years 2017 to 2018. There are no minimum future rental payments under operating leases after 2018. | ||||
Letters of Credit and Other. We were contingently liable as of December 31, 2014 in the amount of $99.6 million under certain performance, bid, supersedeas and custom bonds and letters of credit. Agreements relating to approximately $92.0 million of performance, security, supersedeas and customs bonds can require collateral at any time. As of December 31, 2014, we had not been required to make any collateral deposits with respect to these agreements. The remaining agreements cannot require collateral except in events of default. On our behalf, banks have issued letters of credit securing certain of these bonds. |
RelatedParty_Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 13. Related-Party Transactions |
Transactions with Loews. We are party to a services agreement with Loews, or the Services Agreement, pursuant to which Loews performs certain administrative and technical services on our behalf. Such services include personnel, internal auditing, accounting, and cash management services, in addition to advice and assistance with respect to preparation of tax returns and obtaining insurance. Under the Services Agreement, we are required to reimburse Loews for (i) allocated personnel costs (such as salaries, employee benefits and payroll taxes) of the Loews personnel actually providing such services and (ii) all out-of-pocket expenses related to the provision of such services. The Services Agreement may be terminated at our option upon 30 days’ notice to Loews and at the option of Loews upon six months’ notice to us. In addition, we have agreed to indemnify Loews for all claims and damages arising from the provision of services by Loews under the Services Agreement unless due to the gross negligence or willful misconduct of Loews. We were charged $1.1 million, $1.0 million and $0.8 million by Loews for these support functions during the years ended December 31, 2014, 2013 and 2012, respectively. | |
Transactions with Other Related Parties. We hire marine vessels and helicopter transportation services at the prevailing market rate from subsidiaries of SEACOR Holdings Inc. and Era Group Inc. The Executive Chairman of the Board of Directors of SEACOR Holdings Inc. and the Non-Executive Chairman of the Board of Directors of Era Group Inc. is also a member of our Board of Directors. We paid $0.8 million, $0.1 million and $0.1 million for the hire of such vessels and such services during the years ended December 31, 2014, 2013 and 2012, respectively. | |
The wife of our former President and Chief Executive Officer was an audit partner at Ernst & Young LLP, or E&Y, during his term of service with us. For the year ended December 31, 2014, we made payments aggregating $2.9 million to E&Y for tax and other consulting services; however, E&Y ceased to be a related party on March 3, 2014. For the years ended December 31, 2013 and 2012, we made payments to E&Y of $1.6 million and $1.0 million, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | 14. Income Taxes | ||||||||||||
Our income tax expense is a function of the mix between our domestic and international pre-tax earnings or losses, as well as the mix of international tax jurisdictions in which we operate. Certain of our international rigs are owned and operated indirectly by Diamond Offshore International Limited, or DOIL, a foreign subsidiary which we wholly own. It is our intention to indefinitely reinvest future earnings of DOIL and its foreign subsidiaries to finance foreign activities. Accordingly, we have not made a provision for U.S. income taxes on approximately $2.4 billion of undistributed foreign earnings and profits. Although we do not intend to repatriate the earnings of DOIL, and have not provided U.S. income taxes for such earnings, except to the extent that such earnings were immediately subject to U.S. income taxes, these earnings could become subject to U.S. income tax if remitted, or if deemed remitted as a dividend; however, it is not practical to estimate this potential liability. | |||||||||||||
The components of income tax expense (benefit) are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Federal – current | $ | 66,843 | $ | 40,045 | $ | 173,061 | |||||||
State – current | (121 | ) | 69 | 267 | |||||||||
Foreign – current | 59,926 | 151,339 | 75,748 | ||||||||||
Total current | 126,648 | 191,453 | 249,076 | ||||||||||
Federal – deferred | (6,699 | ) | 46,767 | (51,852 | ) | ||||||||
Foreign – deferred | 8,231 | (12,666 | ) | 380 | |||||||||
Total deferred | 1,532 | 34,101 | (51,472 | ) | |||||||||
Total | $ | 128,180 | $ | 225,554 | $ | 197,604 | |||||||
The difference between actual income tax expense and the tax provision computed by applying the statutory federal income tax rate to income before taxes is attributable to the following: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Income before income tax expense: | |||||||||||||
U.S. | $ | 288,080 | $ | 537,635 | $ | 512,733 | |||||||
Foreign | 227,111 | 236,605 | 405,348 | ||||||||||
Worldwide | $ | 515,191 | $ | 774,240 | $ | 918,081 | |||||||
Expected income tax expense at federal statutory rate | $ | 180,317 | $ | 270,984 | $ | 321,328 | |||||||
Foreign earnings of foreign subsidiaries (not taxed at the statutory federal income tax rate) net of related foreign taxes | (46,163 | ) | (102,359 | ) | (166,251 | ) | |||||||
Foreign earnings of foreign subsidiaries for which U.S. federal income taxes have been provided | 7,190 | 805 | 28,252 | ||||||||||
Foreign taxes of domestic and foreign subsidiaries for which U.S. federal income taxes have also been provided | 38,358 | 45,428 | 35,722 | ||||||||||
Foreign tax credits | (39,843 | ) | (46,524 | ) | (45,824 | ) | |||||||
Interest capitalized by foreign subsidiaries | (16,492 | ) | (18,391 | ) | (11,764 | ) | |||||||
Impact of American Taxpayer Relief Act of 2012 | — | (27,509 | ) | — | |||||||||
Uncertain tax positions | (47,964 | ) | 66,085 | 6,325 | |||||||||
Amortization of deferred charges associated with intercompany rig sales to other tax jurisdictions | 44,301 | 30,894 | 31,276 | ||||||||||
Net expense (benefit) in connection with resolutions of tax issues and adjustments relating to prior years | 7,775 | 4,804 | (2,152 | ) | |||||||||
Other | 701 | 1,337 | 692 | ||||||||||
Income tax expense | $ | 128,180 | $ | 225,554 | $ | 197,604 | |||||||
Deferred Income Taxes. Significant components of our deferred income tax assets and liabilities are as follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards, or NOLs | $ | 20,277 | $ | 12,038 | |||||||||
Foreign tax credits | 17,962 | — | |||||||||||
Worker’s compensation and other current accruals | 19,155 | 17,269 | |||||||||||
Bareboat charter deductions | 21,898 | — | |||||||||||
Disputed receivables reserved | 2,438 | 3,516 | |||||||||||
Deferred compensation | 14,409 | 14,020 | |||||||||||
Foreign contribution taxes | 5,345 | 5,749 | |||||||||||
Mobilization | — | 1,673 | |||||||||||
Nonqualified stock options and SARs | 10,316 | 9,584 | |||||||||||
Deferred deductions | 12,196 | 8,577 | |||||||||||
Interest -Uncertain Tax Positions | 1,011 | 1,008 | |||||||||||
Other | 2,555 | 1,714 | |||||||||||
Total deferred tax assets (1) | 127,562 | 75,148 | |||||||||||
Valuation allowance for NOLs | (20,277 | ) | (7,321 | ) | |||||||||
Valuation allowance for foreign tax credits | (516 | ) | — | ||||||||||
Valuation allowance for other deferred tax assets | (27,243 | ) | — | ||||||||||
Net deferred tax assets | 79,526 | 67,827 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Depreciation | (577,103 | ) | (578,742 | ) | |||||||||
Mobilization | (10,655 | ) | — | ||||||||||
Unbilled revenue | (6,518 | ) | (4,371 | ) | |||||||||
Undistributed earnings of foreign subsidiaries | (24 | ) | (24 | ) | |||||||||
Other | (8 | ) | (9 | ) | |||||||||
Total deferred tax liabilities | (594,308 | ) | (583,146 | ) | |||||||||
Net deferred tax liability | $ | (514,782 | ) | $ | (515,319 | ) | |||||||
-1 | $15.6 million and $10.2 million reflected in “Prepaid expenses and other current assets” in our Consolidated Balance Sheets at December 31, 2014 and 2013, respectively. See Note 3. | ||||||||||||
We record a valuation allowance to derecognize a portion of our deferred tax assets, which we do not expect to be ultimately realized. A summary of changes in the valuation allowance is as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Valuation allowance as of January 1 | $ | 7,321 | $ | 22,876 | $ | 26,353 | |||||||
Establishment of valuation allowances: | |||||||||||||
Net operating losses | 15,677 | 25 | 946 | ||||||||||
Foreign tax credits | 516 | — | — | ||||||||||
Other deferred tax assets | 27,243 | — | — | ||||||||||
Releases of valuation allowances in various jurisdictions | (2,721 | ) | (15,580 | ) | (4,423 | ) | |||||||
Valuation allowance as of December 31 | $ | 48,036 | $ | 7,321 | $ | 22,876 | |||||||
Net Operating Loss Carryforwards – As of December 31, 2014, we had recorded a deferred tax asset of $20.3 million for the benefit of NOL carryforwards related to our international operations. Approximately $18.5 million of this deferred tax asset relates to NOL carryforwards that have an indefinite life. The remaining $1.8 million relates to NOL carryforwards of our Mexican and Hungarian entities. Unless utilized, the tax benefits of these NOL carryforwards will expire between 2021 and 2025 as follows: | |||||||||||||
Year Expiring | Tax Benefit of | ||||||||||||
NOL | |||||||||||||
Carryforwards | |||||||||||||
(In millions) | |||||||||||||
2021 | $ | 0.2 | |||||||||||
2022 | 0.2 | ||||||||||||
2023 | 0.8 | ||||||||||||
2025 | 0.6 | ||||||||||||
Total | $ | 1.8 | |||||||||||
As of December 31, 2014, a valuation allowance for $20.3 million has been recorded for our NOLs as none of the deferred tax asset is more likely than not to be realized. | |||||||||||||
Foreign Tax Credits. As of December 31, 2014, we had recorded a deferred tax asset of $17.5 million for the benefit of foreign tax credits in the U.S. and a $0.5 million deferred tax asset for the benefit of foreign tax credits in the United Kingdom, or U.K. Our excess foreign tax credits in the U.S. will be carried back to 2013 but otherwise will expire in 2024. Our U.K. foreign tax credits, for which we recorded a valuation allowance, may be carried forward indefinitely. | |||||||||||||
Other Deferred Tax Assets. As of December 31, 2014, we had recorded a deferred tax asset of $21.9 million for the benefit of disallowed bareboat charter deductions in the U.K. for which we recorded a valuation allowance and a deferred tax asset of $5.3 million for foreign contribution taxes in Brazil for which we also recorded a valuation reserve. | |||||||||||||
Unrecognized Tax Benefits. Our income tax returns are subject to review and examination in the various jurisdictions in which we operate and we are currently contesting various tax assessments. We accrue for income tax contingencies, or uncertain tax positions, that we believe are more likely than not exposures. A reconciliation of the beginning and ending amount of unrecognized tax benefits, gross of tax carryforwards and excluding interest and penalties, and is as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Balance, beginning of period | $ | (90,921 | ) | $ | (67,150 | ) | $ | (62,936 | ) | ||||
Additions for current year tax positions | (5,813 | ) | (1,724 | ) | (3,837 | ) | |||||||
Additions for prior year tax positions | (292 | ) | (31,264 | ) | (5,136 | ) | |||||||
Reductions for prior year tax positions | 34,630 | 7,280 | 4,759 | ||||||||||
Reductions related to statute of limitation expirations | 5,280 | 1,937 | — | ||||||||||
Balance, end of period | $ | (57,116 | ) | $ | (90,921 | ) | $ | (67,150 | ) | ||||
At December 31, 2014, $4.9 million and $55.4 million of the net liability for uncertain tax positions were reflected in “Other assets” and “Other liabilities,” respectively. At December 31, 2013, $6.3 million and $82.6 million of the net liability for uncertain tax positions were reflected in “Other assets” and “Other liabilities,” respectively. Of the net unrecognized tax benefits at December 31, 2014, 2013 and 2012, all $50.5 million, $76.3 million and $48.4 million, respectively, would affect the effective tax rates if recognized. | |||||||||||||
The following table presents the amount of accrued interest and penalties at December 31, 2014 and 2013 related to uncertain tax positions: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Uncertain tax positions net, excluding interest and penalties | $ | (50,513 | ) | $ | (76,303 | ) | |||||||
Accrued interest on uncertain tax positions | (7,503 | ) | (12,786 | ) | |||||||||
Accrued penalties on uncertain tax positions | (37,622 | ) | (59,797 | ) | |||||||||
Uncertain tax positions net, including interest and penalties | $ | (95,638 | ) | $ | (148,886 | ) | |||||||
We record interest related to accrued uncertain tax positions in interest expense and recognize penalties associated with uncertain tax positions in tax expense. Interest expense and penalties recognized during the three years ended December 31, 2014 related to uncertain tax positions are as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Net increase (decrease) in interest expense related to unrecognized tax positions | $ | (5,283 | ) | $ | 5,758 | $ | (1,902 | ) | |||||
Net increase (decrease) in penalties related to unrecognized tax positions | (22,175 | ) | 38,136 | (787 | ) | ||||||||
In several of the international locations in which we operate, certain of our wholly-owned subsidiaries enter into agreements with other of our wholly-owned subsidiaries to provide specialized services and equipment in support of our foreign operations. We apply a transfer pricing methodology to determine the amount to be charged for providing the services and equipment. In most cases, there are alternative transfer pricing methodologies that could be applied to these transactions and, if applied, could result in different chargeable amounts. Taxing authorities in the various foreign locations in which we operate could apply one of the alternative transfer pricing methodologies which could result in an increase to our income tax liabilities with respect to tax returns that remain subject to examination. | |||||||||||||
We expect the statute of limitations for the 2009 tax year to expire in 2015 for one of our Mexican entities, and we anticipate that the related unrecognized tax benefit will decrease by $10.7 million at that time. | |||||||||||||
Tax Returns and Examinations. We file income tax returns in the U.S. federal jurisdiction, various state jurisdictions and various foreign jurisdictions. Tax years that remain subject to examination by these jurisdictions include years 2008 to 2014. We are currently under audit in several of these jurisdictions. We do not anticipate that any adjustments resulting from the tax audit of any of these years will have a material impact on our consolidated results of operations, financial condition or cash flows. | |||||||||||||
Brazil Tax Jurisdiction. In December 2009, we received an assessment of approximately $26.0 million for the years 2004 and 2005, including interest and penalty. We contested the tax assessment in 2010 and, during the third quarter of 2014, received a favorable court decision resulting in the closure of the 2004 and 2005 tax years. As a consequence, we reversed our $14.0 million reserve for this uncertain tax position, of which $3.5 million was interest and $4.4 million was penalty. | |||||||||||||
In March 2013, the Brazilian tax authorities began an audit of our income tax returns for the years 2009 and 2010. | |||||||||||||
In February 2012, the tax authorities concluded their audit of our income tax return for the 2007 tax year for which we received an assessment of R$35.1 million (approximately equal to USD $13 million at December 31, 2014) for income tax, including interest and penalties. We contested the assessment and a court in Brazil ruled to cancel the assessment. However, the Brazilian tax authorities have appealed the ruling, and we are awaiting the outcome of the appeal. We have not accrued any tax expense related to this assessment. | |||||||||||||
In addition, the tax auditors have issued an assessment for tax year 2000 of approximately $1.5 million, including interest and penalty. We have appealed the tax assessment and are awaiting the outcome of the appeal. | |||||||||||||
Egypt Tax Jurisdiction. During 2013, we were under audit by the Egyptian tax authorities for the tax years 2006 through 2010. In 2013, after receiving notification that the Egyptian government had concluded the income tax audit for the period 2006 to 2008 and proposed a $1.2 billion increase to taxable income, we accrued an additional $56.9 million of expense for uncertain tax positions in Egypt for all open years. During the first quarter of 2014, we settled certain disputes for the years 2006 through 2008 with the Egyptian tax authorities, which resulted in an aggregate $17.2 million reduction in tax expense, comprised of a $23.2 million reversal of uncertain tax positions, partially offset by $6.0 million in current foreign income tax expense. One issue for the 2006 through 2008 period remains open, which we appealed. During the second quarter of 2014, the Appeals Committee in Egypt issued a decision regarding this open item, with which we disagree. We have filed an objection with the Egyptian courts and continue to dispute the matter. We have also sought assistance from an agency of the U.S. Treasury Department, pursuant to international tax treaties, and continue to believe that our position will, more likely than not, be sustained. However, if our position is not sustained, tax expense and related penalties would increase by approximately $50 million related to this issue for the 2006 through 2008 tax years as of December 31, 2014. | |||||||||||||
Malaysia Tax Jurisdiction. During the third quarter of 2014, we received final approval from the Malaysian tax authorities for the settlement of tax liabilities and penalties for the years 2003 through 2008 resulting in the reversal of a $14.2 million reserve for uncertain tax positions for these years, of which $5.3 million was penalty. | |||||||||||||
Mexico Tax Jurisdiction. Due to the 2014 expiration of the statute of limitations in Mexico for the 2008 tax year for one of our subsidiaries operating in Mexico, we reversed our $8.0 million accrual for an uncertain tax position, of which $2.7 million was interest and $1.1 million was penalty, during the year ended December 31, 2014. However, the 2008 income tax return of one of our other Mexican subsidiaries is under audit by the Mexican tax authorities. | |||||||||||||
The tax authorities in Mexico previously audited our income tax returns for the years 2004 and 2006 and had issued assessments for tax years 2004 and 2006 of approximately $22.9 million and $24.4 million, respectively, including interest and penalties, which we had appealed. In 2013 the Mexican tax authorities initiated a tax amnesty program whereby income tax assessments, including penalties and interest, could be partially or completely waived. Under the tax amnesty, we were able to settle our tax liabilities for the years 2004 and 2006 for a net cash cost of $3.7 million. As a result of increases in uncertain tax positions for later years, we recorded an additional $13.2 million of expense, including $5.0 million of interest and $2.7 million of penalties, during the year ended December 31, 2013. | |||||||||||||
Due to the expiration of the statute of limitations in Mexico for the 2007 tax year at the end of June 2013, during the second quarter of 2013, we reversed our $4.3 million accrual for this uncertain tax position, of which $1.5 million was interest and $0.6 million was penalty. | |||||||||||||
In addition, in August 2012, the Mexican tax authorities dismissed a claim against one of our Mexican subsidiaries and the 2004 tax year for that subsidiary is now closed. Consequently, during the third quarter of 2012, we reversed our $4.4 million accrual for this uncertain tax position, which included $0.2 million of penalty and $2.6 million of interest. | |||||||||||||
United Kingdom Tax Jurisdiction. The U.K. Finance Act of 2014, or the Finance Act, was enacted in July 2014 with an effective date retroactive to April 1, 2014. Certain provisions of the Finance Act will limit the amount of tax deductions available with respect to our rigs working in the U.K. under bareboat charter arrangements, which has caused our expected tax expense for the full year of 2014 to increase by approximately $22 million. | |||||||||||||
American Taxpayer Relief Act of 2012. The American Taxpayer Relief Act of 2012, or the Act, was signed into law on January 2, 2013. The Act extended through 2013 several expired or expiring temporary business provisions, commonly referred to as “extenders,” which were retroactively extended to the beginning of 2012. As required by GAAP, the effects of new legislation are recognized when signed into law. Consequently, we reduced our 2013 tax expense by $27.5 million as a result of recognizing the 2012 effect of the extenders. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | 15. Employee Benefit Plans |
Defined Contribution Plans | |
We maintain defined contribution retirement plans for our U.S., U.K. and third-country national, or TCN, employees. The plan for our U.S. employees, or the 401k Plan, is designed to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the Code. Under the 401k Plan, each participant may elect to defer taxation on a portion of his or her eligible earnings, as defined by the 401k Plan, by directing his or her employer to withhold a percentage of such earnings. A participating employee may also elect to make after-tax contributions to the 401k Plan. During each of the years ended December 31, 2014, 2013 and 2012, we made a 4% profit-share contribution of participants’ defined compensation and matched up to 6% of each employee’s compensation contributed to the 401k Plan. Participants are fully vested in the employer match immediately upon enrollment in the 401k Plan and subject to a three-year cliff vesting period for the profit sharing contribution. For the years ended December 31, 2014, 2013 and 2012, our provision for contributions was $34.1 million, $29.6 million and $25.9 million, respectively. | |
The defined contribution retirement plan for our U.K. employees provides that we make annual contributions in an amount equal to the employee’s contributions generally up to a maximum percentage of the employee’s defined compensation per year. For each of the years ended December 31, 2014, 2013 and 2012, our contribution for employees working in the U.K. sector of the North Sea was up to a maximum of 10%, of the employee’s defined compensation. For each of the years ended December 31, 2014, 2013 and 2012, our contribution for U.K. nationals working in the Norwegian sector of the North Sea was up to a maximum of 15%, of the employee’s defined compensation. Our provision for contributions was $5.0 million, $3.5 million and $2.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
The defined contribution retirement plan for our TCN employees, or International Savings Plan, is similar to the 401k Plan. During each of the years ended December 31, 2014, 2013 and 2012, we contributed 4% of participants’ defined compensation and matched up to 6% of each employee’s compensation contributed to the International Savings Plan. Our provision for contributions was $3.7 million, $3.1 million and $2.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Deferred Compensation and Supplemental Executive Retirement Plan | |
Our Amended and Restated Diamond Offshore Management Company Supplemental Executive Retirement Plan, or Supplemental Plan, provides benefits to a select group of our management or other highly compensated employees to compensate such employees for any portion of our base salary contribution and/or matching contribution under the 401k Plan that could not be contributed to that plan because of limitations within the Code. Our provision for contributions to the Supplemental Plan for the years ended December 31, 2014, 2013 and 2012 was approximately $265,000, $261,000 and $256,000, respectively. |
Segments_and_Geographic_Area_A
Segments and Geographic Area Analysis | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Segments and Geographic Area Analysis | 16. Segments and Geographic Area Analysis | ||||||||||||
Although we provide contract drilling services with different types of offshore drilling rigs and also provide such services in many geographic locations, we have aggregated these operations into one reportable segment based on the similarity of economic characteristics due to the nature of the revenue earning process as it relates to the offshore drilling industry over the operating lives of our drilling rigs. | |||||||||||||
Revenues from contract drilling services by equipment-type are listed below: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Floaters: | |||||||||||||
Ultra-Deepwater | $ | 987,565 | $ | 854,515 | $ | 902,793 | |||||||
Deepwater | 494,247 | 617,080 | 597,694 | ||||||||||
Mid-Water | 1,076,842 | 1,197,934 | 1,275,068 | ||||||||||
Total Floaters | 2,558,654 | 2,669,529 | 2,775,555 | ||||||||||
Jack-ups | 178,472 | 174,055 | 160,511 | ||||||||||
Total contract drilling revenues | 2,737,126 | 2,843,584 | 2,936,066 | ||||||||||
Revenues related to reimbursable expenses | 77,545 | 76,837 | 50,442 | ||||||||||
Total revenues | $ | 2,814,671 | $ | 2,920,421 | $ | 2,986,508 | |||||||
Geographic Areas | |||||||||||||
Our drilling rigs are highly mobile and may be moved to other markets throughout the world in response to market conditions or customer needs. At December 31, 2014, our actively-marketed drilling rigs were en route to or located offshore eight countries in addition to the United States. Revenues by geographic area are presented by attributing revenues to the individual country or areas where the services were performed. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
United States | $ | 418,095 | $ | 330,471 | $ | 173,961 | |||||||
International: | |||||||||||||
South America | 1,088,796 | 1,219,287 | 1,427,927 | ||||||||||
Europe/Africa/Mediterranean | 558,367 | 731,888 | 662,995 | ||||||||||
Australia/Asia | 503,814 | 438,814 | 524,957 | ||||||||||
Mexico | 245,599 | 199,961 | 196,668 | ||||||||||
2,396,576 | 2,589,950 | 2,812,547 | |||||||||||
Total revenues | $ | 2,814,671 | $ | 2,920,421 | $ | 2,986,508 | |||||||
An individual international country may, from time to time, comprise a material percentage of our total contract drilling revenues from unaffiliated customers. For the years ended December 31, 2014, 2013 and 2012, individual countries that comprised 5% or more of our total contract drilling revenues from unaffiliated customers are listed below. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Brazil | 31 | % | 38.3 | % | 46.1 | % | |||||||
United Kingdom | 10.7 | % | 7.9 | % | 6.9 | % | |||||||
Mexico | 8.7 | % | 6.9 | % | 6.6 | % | |||||||
Australia | 6.4 | % | 3.2 | % | 6.7 | % | |||||||
Malaysia | 5.5 | % | 2.9 | % | 4 | % | |||||||
The following table presents our long-lived tangible assets by geographic location as of December 31, 2014, 2013 and 2012. A substantial portion of our assets is comprised of rigs that are mobile, and therefore asset locations at the end of the period are not necessarily indicative of the geographic distribution of the earnings generated by such assets during the periods and may vary from period to period due to the relocation of rigs. In circumstances where our drilling rigs were in transit at the end of a calendar year, they have been presented in the tables below within the geographic area in which they were expected to operate. | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Drilling and other property and equipment, net: | |||||||||||||
United States(1) | $ | 2,637,621 | $ | 611,731 | $ | 444,984 | |||||||
International: | |||||||||||||
Australia/Asia/Middle East (2) | 1,460,841 | 2,078,348 | 1,474,999 | ||||||||||
South America | 1,445,832 | 1,690,976 | 1,827,247 | ||||||||||
Europe/Africa/Mediterranean | 1,128,857 | 793,097 | 799,194 | ||||||||||
Mexico | 272,802 | 293,075 | 318,548 | ||||||||||
4,308,332 | 4,855,496 | 4,419,988 | |||||||||||
Total | $ | 6,945,953 | $ | 5,467,227 | $ | 4,864,972 | |||||||
(1) | Long-lived tangible assets in the United States region as of December 31, 2014 include $1.9 billion related to three drillships that were delivered in 2014, two of which are in transit thereto. Long-lived tangible assets in the United States region as of December 31, 2013 and 2012 include $339.1 million and $167.4 million, respectively, in construction work-in-progress for the Ocean Onyx, which was under construction in Brownsville, Texas. | ||||||||||||
(2) | Long-lived tangible assets in the Australia/Asia/Middle East region include $439.2 million, $1,064.5 million and $741.1 million in construction work-in-progress for rigs under construction in South Korea as of December 31, 2014, 2013 and 2012, respectively, and $400.8 million and $264.6 million for the recently completed Ocean Apex as of December 31, 2014 and 2013, respectively. | ||||||||||||
The following table presents the countries in which material concentrations of our long-lived tangible assets were located as of December 31, 2014, 2013 and 2012: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | 38 | % | 11.2 | % | 9.1 | % | |||||||
Brazil | 20.3 | % | 30.2 | % | 37.3 | % | |||||||
Spain | 8.1 | % | 1.2 | % | — | ||||||||
Vietnam | 6.9 | % | 0.6 | % | 1.4 | % | |||||||
Malaysia | 6.6 | % | 4.3 | % | 3.1 | % | |||||||
South Korea | 6.3 | % | 19.5 | % | 15.2 | % | |||||||
Mexico | 3.9 | % | 5.4 | % | 6.5 | % | |||||||
Angola | — | 6.3 | % | — | |||||||||
Indonesia | — | 5.2 | % | 6.8 | % | ||||||||
Republic of Congo | — | — | 7.4 | % | |||||||||
Singapore | — | 8.2 | % | 1.8 | % | ||||||||
As of December 31, 2014, 2013 and 2012, no other countries had more than a 5% concentration of our long-lived tangible assets. | |||||||||||||
Major Customers | |||||||||||||
Our customer base includes major and independent oil and gas companies and government-owned oil companies. Revenues from our major customers for the years ended December 31, 2014, 2013 and 2012 that contributed more than 10% of our total revenues are as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
Customer | 2014 | 2013 | 2012 | ||||||||||
Petróleo Brasileiro S.A. | 31.9 | % | 33.6 | % | 33.3 | % | |||||||
OGX Petróleo e Gás Ltda. | — | 2.4 | % | 12.5 | % |
Unaudited_Quarterly_Financial_
Unaudited Quarterly Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Unaudited Quarterly Financial Data | 17. Unaudited Quarterly Financial Data | ||||||||||||||||
Unaudited summarized financial data by quarter for the years ended December 31, 2014 and 2013 is shown below. | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Revenues | $ | 709,424 | $ | 692,244 | $ | 737,682 | $ | 675,321 | |||||||||
Operating income | 186,277 | 133,766 | 90,416 | 162,103 | |||||||||||||
Income before income tax expense | 167,679 | 112,603 | 81,639 | 153,270 | |||||||||||||
Net income | 145,810 | 89,713 | 52,645 | 98,843 | |||||||||||||
Net income per share, basic and diluted | $ | 1.05 | $ | 0.65 | $ | 0.38 | $ | 0.72 | |||||||||
2013 | |||||||||||||||||
Revenues | $ | 729,741 | $ | 758,018 | $ | 706,165 | $ | 726,497 | |||||||||
Operating income | 213,726 | 262,859 | 137,352 | 187,669 | |||||||||||||
Income before income tax expense | 206,179 | 256,301 | 131,565 | 180,195 | |||||||||||||
Net income | 175,989 | 185,334 | 94,748 | 92,615 | |||||||||||||
Net income per share, basic and diluted | $ | 1.27 | $ | 1.33 | $ | 0.68 | $ | 0.67 |
General_Information_Policies
General Information (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Principles of Consolidation | Principles of Consolidation | ||||||||||||
Our consolidated financial statements include the accounts of Diamond Offshore Drilling, Inc. and our subsidiaries after elimination of intercompany transactions and balances. | |||||||||||||
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements | ||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States, or U.S., or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
We consider short-term, highly liquid investments that have an original maturity of three months or less and deposits in money market mutual funds that are readily convertible into cash to be cash equivalents. We had bank deposits denominated in Egyptian pounds totaling $7.3 million and $14.3 million at December 31, 2014 and 2013, respectively. However, the local currency is not readily convertible into U.S. dollars or other currencies at this time. We expect to use a portion of these amounts to fund local obligations in Egyptian pounds in the short term and have reported $7.2 million and $12.7 million, representing the excess of total bank deposits over our estimated local currency requirements for the next twelve months, as “Other assets” in our Consolidated Balance Sheets at December 31, 2014 and 2013, respectively. | |||||||||||||
The effect of exchange rate changes on cash balances held in foreign currencies was not material for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
Marketable Securities | Marketable Securities | ||||||||||||
We classify our investments in marketable securities as available for sale and they are stated at fair value in our Consolidated Balance Sheets. Accordingly, any unrealized gains and losses, net of taxes, are reported in our Consolidated Balance Sheets in “Accumulated other comprehensive gain (loss)” until realized. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and such adjustments are included in our Consolidated Statements of Operations in “Interest income.” The sale and purchase of securities are recorded on the date of the trade. The cost of debt securities sold is based on the specific identification method. Realized gains or losses, as well as any declines in value that are judged to be other than temporary, are reported in our Consolidated Statements of Operations in “Other income (expense) – Other, net.” | |||||||||||||
Provision for Bad Debts | Provision for Bad Debts | ||||||||||||
We record a provision for bad debts on a case-by-case basis when facts and circumstances indicate that a customer receivable may not be collectible. In establishing these reserves, we consider historical and other factors that predict collectability, including write-offs, recoveries and the monitoring of credit quality. Such provision is reported as a component of “Operating expense” in our Consolidated Statements of Operations. See Note 3. | |||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | ||||||||||||
Our derivative financial instruments consist primarily of foreign currency forward exchange, or FOREX, contracts which we may designate as cash flow hedges. In accordance with GAAP, each derivative contract is stated in the balance sheet at its fair value with gains and losses reflected in the income statement except that, to the extent the derivative qualifies for and is designated as an accounting hedge, the gains and losses are reflected in income in the same period as offsetting gains and losses on the qualifying hedged positions. Designated hedges are expected to be highly effective, and therefore, adjustments to record the carrying value of the effective portion of our derivative financial instruments to their fair value are recorded as a component of “Accumulated other comprehensive gain (loss),” or AOCGL, in our Consolidated Balance Sheets. The effective portion of the cash flow hedge will remain in AOCGL until it is reclassified into earnings in the period or periods during which the hedged transaction affects earnings or it is determined that the hedged transaction will not occur. We report such realized gains and losses as a component of “Contract drilling, excluding depreciation” expense in our Consolidated Statements of Operations to offset the impact of foreign currency fluctuations in our expenditures in local foreign currencies in the countries in which we operate. | |||||||||||||
Adjustments to record the carrying value of the ineffective portion of our derivative financial instruments to fair value and realized gains or losses upon settlement of derivative contracts not designated as cash flow hedges are reported as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations. See Notes 7 and 8. | |||||||||||||
Asset Held For Sale | Asset Held For Sale | ||||||||||||
At December 31, 2013, we reported the $7.7 million carrying value of our jack-up rig, the Ocean Spartan, as “Asset held for sale” in our Consolidated Balance Sheets. The Ocean Spartan was sold in June 2014 for an aggregate selling price of $16.5 million, and we recognized a net gain of $8.5 million on the transaction. | |||||||||||||
Drilling and Other Property and Equipment | Drilling and Other Property and Equipment | ||||||||||||
We carry our drilling and other property and equipment at cost. Maintenance and routine repairs are charged to income currently while replacements and betterments, including associated inspection and recertification costs, which upgrade or increase the functionality of our existing equipment and that significantly extend the useful life of an existing asset, are capitalized. Significant judgments, assumptions and estimates may be required in determining whether or not such replacements and betterments meet the criteria for capitalization and in determining useful lives and salvage values of such assets. Changes in these judgments, assumptions and estimates could produce results that differ from those reported. Historically, the amount of capital additions requiring significant judgments, assumptions or estimates has not been significant. During the years ended December 31, 2014 and 2013, we capitalized $546.0 million and $302.0 million, respectively, in replacements and betterments of our drilling fleet, resulting from numerous projects ranging from $25,000 to $160 million per project. | |||||||||||||
Costs incurred for major rig upgrades and/or the construction of rigs are accumulated in construction work-in-progress, with no depreciation recorded on the additions, until the month the upgrade or newbuild is completed and the rig is placed in service. Upon retirement or sale of a rig, the cost and related accumulated depreciation are removed from the respective accounts and any gains or losses are included in our results of operations as “Gain on disposition of assets.” Depreciation is recognized up to applicable salvage values by applying the straight-line method over the remaining estimated useful lives from the year the asset is placed in service. Drilling rigs and equipment are depreciated over their estimated useful lives ranging from 3 to 30 years. | |||||||||||||
Capitalized Interest | Capitalized Interest | ||||||||||||
We capitalize interest cost for qualifying construction and upgrade projects. During the three years ended December 31, 2014, we capitalized interest on qualifying expenditures, primarily related to our rig construction projects. See Note 9. | |||||||||||||
A reconciliation of our total interest cost to “Interest expense” as reported in our Consolidated Statements of Operations is as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Total interest cost including amortization of debt issuance costs | $ | 122,656 | $ | 99,080 | $ | 83,890 | |||||||
Capitalized interest | (60,603 | ) | (74,237 | ) | (37,674 | ) | |||||||
Total interest expense as reported | $ | 62,053 | $ | 24,843 | $ | 46,216 | |||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||
We evaluate our property and equipment for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable (such as cold stacking a rig, the expectation of cold stacking a rig in the near term, a decision to retire or scrap a rig, or excess spending over budget on a newbuild, construction project or major rig upgrade). We utilize an undiscounted probability-weighted cash flow analysis in testing an asset for potential impairment. Our assumptions and estimates underlying this analysis include the following: | |||||||||||||
• | dayrate by rig; | ||||||||||||
• | utilization rate by rig (expressed as the actual percentage of time per year that the rig would be used); | ||||||||||||
• | the per day operating cost for each rig if active, warm stacked or cold stacked; | ||||||||||||
• | the estimated annual cost for rig replacements and/or enhancement programs; | ||||||||||||
• | the estimated maintenance, inspection or other costs associated with a rig returning to work; | ||||||||||||
• | salvage value for each rig; and | ||||||||||||
• | estimated proceeds that may be received on disposition of the rig. | ||||||||||||
Based on these assumptions and estimates, we develop a matrix using several different utilization/dayrate scenarios, to each of which we have assigned a probability of occurrence. The sum of our utilization scenarios (which include active, warm stacked and cold stacked) and probability of occurrence scenarios both equal 100% in the aggregate. We reevaluate these rigs annually, by updating the matrices for each rig and modifying our assumptions, giving consideration to the length of time the rig has been cold stacked, the current and expected market for the type of rig and expectations of future oil and gas prices. See Note 2. | |||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||
We believe that the carrying amount of our current financial instruments approximates fair value because of the short maturity of these instruments. See Note 8. | |||||||||||||
Debt Issuance Costs | Debt Issuance Costs | ||||||||||||
Debt issuance costs are included in our Consolidated Balance Sheets in “Other assets” and are amortized over the respective terms of the related debt. | |||||||||||||
Income Taxes | Income Taxes | ||||||||||||
We account for income taxes in accordance with accounting standards that require the recognition of the amount of taxes payable or refundable for the current year and an asset and liability approach in recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been currently recognized in our financial statements or tax returns. In each of our tax jurisdictions we recognize a current tax liability or asset for the estimated taxes payable or refundable on tax returns for the current year and a deferred tax asset or liability for the estimated future tax effects attributable to temporary differences and carryforwards. Deferred tax assets are reduced by a valuation allowance, if necessary, which is determined by the amount of any tax benefits that, based on available evidence, are not expected to be realized under a “more likely than not” approach. We make judgments regarding future events and related estimates especially as they pertain to the forecasting of our effective tax rate, the potential realization of deferred tax assets such as utilization of foreign tax credits, and exposure to the disallowance of items deducted on tax returns upon audit. | |||||||||||||
We record interest related to accrued unrecognized tax positions in interest expense and recognize penalties associated with uncertain tax positions in our tax expense. See Note 14. | |||||||||||||
Treasury Stock | Treasury Stock | ||||||||||||
Depending on market conditions, we may, from time to time, purchase shares of our common stock in the open market or otherwise. We account for the purchase of treasury stock using the cost method, which reports the cost of the shares acquired in “Treasury stock” as a deduction from stockholders’ equity in our Consolidated Balance Sheets. During the year ended December 31, 2014, we repurchased 1,895,561 shares of our outstanding common stock at a cost of $87.8 million. We did not repurchase any shares of our outstanding common stock during 2013 or 2012. | |||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||
Comprehensive income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances except those transactions resulting from investments by owners and distributions to owners. Comprehensive income (loss) for the three years ended December 31, 2014, 2013 and 2012 includes net income (loss) and unrealized holding gains and losses on marketable securities and financial derivatives designated as cash flow accounting hedges. See Note 11. | |||||||||||||
Foreign Currency | Foreign Currency | ||||||||||||
Our functional currency is the U.S. dollar. Foreign currency transaction gains and losses are reported as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations and include, when applicable, unrealized gains and losses to record the carrying value of our FOREX contracts not designated as accounting hedges, as well as realized gains and losses from the settlement of such contracts. For the years ended December 31, 2014, 2013 and 2012, we recognized aggregate net foreign currency gains (losses) of $3.2 million, $(4.9) million and $(2.0) million, respectively. See Note 7. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
We recognize revenue from dayrate drilling contracts as services are performed. In connection with such drilling contracts, we may receive fees (on either a lump-sum or dayrate basis) for the mobilization of equipment. We earn these fees as services are performed over the initial term of the related drilling contracts. We defer mobilization fees received, as well as direct and incremental mobilization costs incurred, and amortize each, on a straight-line basis, over the term of the related drilling contracts (which is the period we estimate to be benefited from the mobilization activity). Straight-line amortization of mobilization revenues and related costs over the term of the related drilling contracts (which generally range from two to 60 months) is consistent with the timing of net cash flows generated from the actual drilling services performed. Absent a contract, mobilization costs are recognized currently. Upon completion of a drilling contract, we recognize in earnings any demobilization fees received and costs incurred. | |||||||||||||
Some of our drilling contracts require downtime before the start of the contract to prepare the rig to meet customer requirements. At times, we may be compensated by the customer for such work (on either a lump-sum or dayrate basis). These fees are generally earned as services are performed over the initial term of the related drilling contracts. We defer contract preparation fees received, as well as direct and incremental costs associated with the contract preparation activities and amortize each, on a straight-line basis, over the term of the related drilling contracts (which we estimate to be benefited from the contract preparation activity). | |||||||||||||
From time to time, we may receive fees from our customers for capital improvements to our rigs (on either a lump-sum or dayrate basis). We defer such fees received in “Accrued liabilities” and “Other liabilities” in our Consolidated Balance Sheets and recognize these fees into income on a straight-line basis over the period of the related drilling contract. We capitalize the costs of such capital improvements and depreciate them over the estimated useful life of the improvement. | |||||||||||||
We record reimbursements received for the purchase of supplies, equipment, personnel services and other services provided at the request of our customers in accordance with a contract or agreement, for the gross amount billed to the customer, as “Revenues related to reimbursable expenses” in our Consolidated Statements of Operations. | |||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. The new standard supersedes the industry-specific standards that currently exist under GAAP and provides a framework to address revenue recognition issues comprehensively for all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Under the new guidance, companies recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also provides for additional disclosure requirements. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and may be adopted using a retrospective or modified retrospective approach. Early adoption is not permitted. We are currently evaluating the provisions of ASU 2014-09 and have not yet determined its impact on our financial position, results of operations or cash flows. |
General_Information_Tables
General Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Reconciliation of Total Interest Cost to Interest Expense | A reconciliation of our total interest cost to “Interest expense” as reported in our Consolidated Statements of Operations is as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Total interest cost including amortization of debt issuance costs | $ | 122,656 | $ | 99,080 | $ | 83,890 | |||||||
Capitalized interest | (60,603 | ) | (74,237 | ) | (37,674 | ) | |||||||
Total interest expense as reported | $ | 62,053 | $ | 24,843 | $ | 46,216 | |||||||
Supplemental_Financial_Informa1
Supplemental Financial Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Accounts Receivable, Net of Allowance for Doubtful Accounts | Accounts receivable, net of allowance for bad debts, consists of the following: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Trade receivables | $ | 437,017 | $ | 473,013 | |||||||||
Value added tax receivables | 24,853 | 19,407 | |||||||||||
Amounts held in escrow | 6,450 | 3,066 | |||||||||||
Interest receivable | 317 | 7 | |||||||||||
Related party receivables | 339 | 587 | |||||||||||
Other | 610 | 615 | |||||||||||
469,586 | 496,695 | ||||||||||||
Allowance for bad debts | (5,724 | ) | (27,340 | ) | |||||||||
Total | $ | 463,862 | $ | 469,355 | |||||||||
Changes in Provision for Bad Debts | An analysis of the changes in our provision for bad debts for each of the three years ended December 31, 2014, 2013 and 2012, is as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Allowance for bad debts, beginning of year | $ | 27,340 | $ | 5,458 | $ | 6,867 | |||||||
Bad debt expense: | |||||||||||||
Provision for bad debts | — | 22,513 | — | ||||||||||
Recovery of bad debts | — | — | (1,018 | ) | |||||||||
Total bad debt expense (recovery) | — | 22,513 | (1,018 | ) | |||||||||
Write off of uncollectible accounts against reserve | (21,148 | ) | (509 | ) | (391 | ) | |||||||
Other(1) | (468 | ) | (122 | ) | — | ||||||||
Allowance for bad debts, end of year | $ | 5,724 | $ | 27,340 | $ | 5,458 | |||||||
(1) | Includes revaluation adjustments for non-U.S. dollar denominated receivables, which have been recorded as “Foreign currency transaction gain (loss)” in our Consolidated Statements of Operations. | ||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Rig spare parts and supplies | $ | 56,315 | $ | 52,439 | |||||||||
Deferred mobilization costs | 53,206 | 20,274 | |||||||||||
Prepaid insurance | 12,163 | 12,503 | |||||||||||
Deferred tax assets | 15,612 | 10,221 | |||||||||||
Prepaid taxes | 44,085 | 42,058 | |||||||||||
FOREX contracts | — | 1,562 | |||||||||||
Other | 4,160 | 4,940 | |||||||||||
Total | $ | 185,541 | $ | 143,997 | |||||||||
Accrued Liabilities | Accrued liabilities consist of the following: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Rig operating expenses | $ | 85,897 | $ | 87,307 | |||||||||
Payroll and benefits | 131,664 | 121,387 | |||||||||||
Deferred revenue | 63,209 | 26,975 | |||||||||||
Accrued capital project/upgrade costs | 103,123 | 86,274 | |||||||||||
Interest payable | 18,365 | 28,324 | |||||||||||
Personal injury and other claims | 8,570 | 9,687 | |||||||||||
FOREX contracts | 5,439 | 1,143 | |||||||||||
Other | 10,325 | 9,574 | |||||||||||
Total | $ | 426,592 | $ | 370,671 | |||||||||
Noncash Investing and Financing Activities | Noncash investing activities excluded from the Consolidated Statements of Cash Flows and other supplemental cash flow information is as follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Accrued but unpaid capital expenditures at period end | $ | 103,123 | $ | 86,274 | $ | 56,595 | |||||||
Income tax benefits related to exercise of stock options | 1,458 | 1,081 | 1,083 | ||||||||||
Cash interest payments (1)(2) | 133,784 | 82,938 | 83,125 | ||||||||||
Cash income taxes paid, net of refunds: | |||||||||||||
U.S. federal | — | 62,000 | 71,000 | ||||||||||
Foreign | 92,049 | 78,041 | 72,249 | ||||||||||
State | (18 | ) | 190 | 243 | |||||||||
(1) | Interest payments, net of amounts capitalized, were $73.2 million, $16.5 million and $46.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
(2) | Interest paid on Internal Revenue Service assessments was $0.2 million during the year ended December 31, 2012. |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Weighted Average Assumptions Used in Estimating Fair Value of Options and SARs | The following are the weighted average assumptions used in estimating the fair value of our SARs: | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected life of SARs (in years) | 7 | 7 | 6 | ||||||||||||||
Expected volatility | 21.68 | % | 18.24 | % | 33.45 | % | |||||||||||
Dividend yield | 1.1 | % | 0.75 | % | 0.78 | % | |||||||||||
Risk free interest rate | 2.08 | % | 1.61 | % | 0.89 | % | |||||||||||
Summary of Activity Under Stock Plan | A summary of stock option and SARs activity under the Equity Plan as of December 31, 2014 and changes during the year then ended is as follows: | ||||||||||||||||
Number of | Weighted- | Weighted-Average | Aggregate | ||||||||||||||
Awards | Average | Remaining | Intrinsic Value | ||||||||||||||
Exercise Price | Contractual Term | (In Thousands) | |||||||||||||||
(Years) | |||||||||||||||||
Awards outstanding at January 1, 2014 | 1,392,659 | $ | 78.22 | ||||||||||||||
Granted | 288,675 | $ | 47.09 | ||||||||||||||
Exercised | 9,377 | $ | 28.28 | ||||||||||||||
Forfeited | 12,696 | $ | 61.77 | ||||||||||||||
Expired | 71,931 | $ | 77.21 | ||||||||||||||
Awards outstanding at December 31, 2014 | 1,587,330 | $ | 73.03 | 6.3 | $ | 160 | |||||||||||
Awards exercisable at December 31, 2014 | 1,188,938 | $ | 78.62 | 5.5 | $ | 36 | |||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Reconciliation of Numerators and Denominators of Basic and Diluted Per-Share Computations | A reconciliation of the numerators and the denominators of the basic and diluted per-share computations follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands, except per share data) | |||||||||||||
Net income – basic and diluted (numerator): | $ | 387,011 | $ | 548,686 | $ | 720,477 | |||||||
Weighted-average shares – basic (denominator): | 137,473 | 139,035 | 139,029 | ||||||||||
Dilutive effect of stock-based awards | 50 | 29 | 19 | ||||||||||
Weighted-average shares including conversions – diluted (denominator): | 137,523 | 139,064 | 139,048 | ||||||||||
Earnings per share: | |||||||||||||
Basic | $ | 2.82 | $ | 3.95 | $ | 5.18 | |||||||
Diluted | $ | 2.81 | $ | 3.95 | $ | 5.18 | |||||||
Securities Excluded from Computation of Diluted Earning Per Share | The following table sets forth the share effects of stock-based awards excluded from our computations of diluted earnings per share, or EPS, as the inclusion of such potentially dilutive shares would have been antidilutive for the periods presented: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Employee and director: | |||||||||||||
Stock options | 37 | 18 | 18 | ||||||||||
SARs | 1,488 | 956 | 853 |
Marketable_Securities_Tables
Marketable Securities (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
Investments in Marketable Securities as Available for Sale | Our investments in marketable securities are classified as available for sale and are summarized as follows: | ||||||||||||
December 31, 2014 | |||||||||||||
Amortized | Unrealized | Market | |||||||||||
Cost | Gain (Loss) | Value | |||||||||||
(In thousands) | |||||||||||||
Corporate bonds | $ | 16,003 | $ | (104 | ) | $ | 15,899 | ||||||
Mortgage-backed securities | 130 | 4 | 134 | ||||||||||
Total | $ | 16,133 | $ | (100 | ) | $ | 16,033 | ||||||
December 31, 2013 | |||||||||||||
Amortized | Unrealized | Market | |||||||||||
Cost | Gain (Loss) | Value | |||||||||||
(In thousands) | |||||||||||||
U.S. Treasury Bills and Notes (due within one year) | $ | 1,749,879 | $ | (22 | ) | $ | 1,749,857 | ||||||
Mortgage-backed securities | 188 | 8 | 196 | ||||||||||
Total | $ | 1,750,067 | $ | (14 | ) | $ | 1,750,053 | ||||||
Summary of Proceeds from Sales and Maturities of Marketable Securities and Gross Realized Gains and Losses | Proceeds from maturities and sales of marketable securities and gross realized gains and losses are summarized as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Proceeds from maturities | $ | 8,000,000 | $ | 4,650,000 | $ | 2,575,000 | |||||||
Proceeds from sales | 57 | 85 | 150,118 | ||||||||||
Gross realized gains | — | — | — | ||||||||||
Gross realized losses | (1 | ) | (1 | ) | (6 | ) |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||
Amounts Recognized in Consolidated Statements of Operations Related to FOREX Contracts Designated as Accounting Hedges | The following table presents the aggregate amount of gain or loss recognized in our Consolidated Statements of Operations related to our FOREX contracts designated as hedging instruments for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||
Amount of Gain (Loss) Recognized in Income | |||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||
Location of Gain (Loss) Recognized in Income | 2014 | 2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||||
Contract drilling expense | $ | 3,275 | $ | (6,501 | ) | $ | (4,302 | ) | |||||||||||
Fair Values of FOREX Contracts Designated as Hedging Instruments | The following table presents the fair values of our derivative FOREX contracts designated as hedging instruments at December 31, 2014 and 2013. | ||||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||
Prepaid expenses and other current assets | $ | — | $ | 1,562 | Accrued liabilities | $ | (5,439 | ) | $ | (1,143 | ) | ||||||||
Amounts Recognized in Consolidated Balance Sheets and Consolidated Statements of Operations Related to Derivative Financial Instruments Designated as Cash Flow Hedges | The following table presents the amounts recognized in our Consolidated Balance Sheets and Consolidated Statements of Operations related to our derivative financial instruments designated as cash flow hedges for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
FOREX contracts: | |||||||||||||||||||
Amount of (loss) gain recognized in AOCGL on derivative (effective portion) | $ | (2,281 | ) | $ | (10,542 | ) | $ | 6,519 | |||||||||||
Location of (loss) gain reclassified from AOCGL into income (effective portion) | Contract drilling, | Contract drilling, | Contract drilling, | ||||||||||||||||
excluding | excluding | excluding | |||||||||||||||||
depreciation | depreciation | depreciation | |||||||||||||||||
Amount of (loss) gain reclassified from AOCGL into income (effective portion) | $ | 3,650 | $ | (7,449 | ) | $ | (4,205 | ) | |||||||||||
Location of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | Foreign currency | Foreign currency | Foreign currency | ||||||||||||||||
transaction gain | transaction gain | transaction gain | |||||||||||||||||
(loss) | (loss) | (loss) | |||||||||||||||||
Amount of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | $ | (31 | ) | $ | (104 | ) | $ | (17 | ) | ||||||||||
Treasury lock agreements: | |||||||||||||||||||
Amount of gain recognized in AOCGL on derivative (effective portion) | $ | — | $ | 27 | $ | — | |||||||||||||
Location of gain reclassified from AOCGL into income (effective portion) | Interest expense | Interest expense | Interest expense | ||||||||||||||||
Amount of gain reclassified from AOCGL into income (effective portion) | $ | 8 | $ | 1 | $ | — |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Disclosures (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | December 31, 2014 | ||||||||||||||||||||
Fair Value Measurements Using | Assets at Fair | Total Losses | |||||||||||||||||||
Value | for Year | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Ended | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Short-term investments | $ | 217,789 | $ | — | $ | — | $ | 217,789 | |||||||||||||
Corporate bonds | — | 15,899 | — | 15,899 | |||||||||||||||||
Mortgage-backed securities | — | 134 | — | 134 | |||||||||||||||||
Total assets | $ | 217,789 | $ | 16,033 | $ | — | $ | 233,822 | |||||||||||||
Liabilities: | |||||||||||||||||||||
FOREX contracts | $ | — | $ | (5,439 | ) | $ | — | $ | (5,439 | ) | |||||||||||
Nonrecurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Impaired assets (1)(2) | $ | — | $ | — | $ | 9,421 | $ | 9,421 | $ | 109,462 | |||||||||||
(1) | Represents the book value as of December 31, 2014 of four of our mid-water semisubmersible rigs, which were written down to their estimated recoverable amounts in September 2014 and had not yet been scrapped. | ||||||||||||||||||||
(2) | Includes depreciation expense of $6.6 million recognized in the fourth quarter of 2014 for the Ocean Winner, which is still under contract through March 2015 and was written down to its estimated fair value using an income approach in September 2014 and excludes the fair values of the Ocean New Era and Ocean Whittington, which were included in the September 2014 write-down, but were subsequently sold for scrap in the fourth quarter of 2014. | ||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Fair Value Measurements Using | Assets at | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Short-term investments | $ | 2,061,154 | $ | — | $ | — | $ | 2,061,154 | |||||||||||||
FOREX contracts | — | 1,562 | — | 1,562 | |||||||||||||||||
Mortgage-backed securities | — | 197 | — | 197 | |||||||||||||||||
Total assets | $ | 2,061,154 | $ | 1,759 | $ | — | $ | 2,062,913 | |||||||||||||
Liabilities: | |||||||||||||||||||||
FOREX contracts | $ | — | $ | (1,143 | ) | $ | — | $ | (1,143 | ) | |||||||||||
Fair Values and Related Carrying Values of Our Debt Instruments | Fair values and related carrying values (see Note 10) of our senior notes are shown below. | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||
(In millions) | |||||||||||||||||||||
5.15% Senior Notes due 2014 | $ | — | $ | — | $ | 257.4 | $ | 250 | |||||||||||||
4.875% Senior Notes due 2015 | 255 | 250 | 265.7 | 249.9 | |||||||||||||||||
5.875% Senior Notes due 2019 | 544.9 | 499.6 | 578.1 | 499.6 | |||||||||||||||||
3.45% Senior Notes due 2023 | 232 | 249.1 | 241.4 | 249 | |||||||||||||||||
5.70% Senior Notes due 2039 | 478.5 | 497 | 543.1 | 496.9 | |||||||||||||||||
4.875% Senior Notes due 2043 | 638.9 | 748.8 | 736.1 | 748.8 |
Drilling_and_Other_Property_an1
Drilling and Other Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Summary of Cost and Accumulated Depreciation of Drilling and Other Property and Equipment | Cost and accumulated depreciation of drilling and other property and equipment are summarized as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Drilling rigs and equipment | $ | 10,555,314 | $ | 7,412,066 | |||||
Construction work-in-progress | 439,206 | 1,668,211 | |||||||
Land and buildings | 66,989 | 65,627 | |||||||
Office equipment and other | 70,591 | 65,799 | |||||||
Cost | 11,132,100 | 9,211,703 | |||||||
Less accumulated depreciation | (4,186,147 | ) | (3,744,476 | ) | |||||
Drilling and other property and equipment, net | $ | 6,945,953 | $ | 5,467,227 | |||||
Summary of Construction Work-in-Progress, Including Capitalized Interest | Construction work-in-progress, including capitalized interest, at December 31, 2014 and 2013 is summarized as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Ultra-deepwater drillships | $ | 225,405 | $ | 868,908 | |||||
Ultra-deepwater semisubmersible: | |||||||||
Ocean GreatWhite | 213,801 | 195,578 | |||||||
Deepwater semisubmersibles: | |||||||||
Ocean Onyx | — | 339,129 | |||||||
Ocean Apex | — | 264,596 | |||||||
Total construction work-in-progress | $ | 439,206 | $ | 1,668,211 | |||||
Credit_Agreement_and_Senior_No1
Credit Agreement and Senior Notes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Summary of Senior Notes | At December 31, 2014, our senior notes were comprised of the following debt issues: | ||||||||||||||||
Principal | Interest Rate | Semiannual | |||||||||||||||
Amount | Interest Payment | ||||||||||||||||
Debt Issue | (In millions) | Maturity Date | Coupon | Effective | Dates | ||||||||||||
4.875% Senior Notes due 2015 | $ | 250 | 1-Jul-15 | 4.875 | % | 4.90% | January 1 and July 1 | ||||||||||
5.875% Senior Notes due 2019 | $ | 500 | 1-May-19 | 5.875 | % | 5.89 | % | May 1 and November 1 | |||||||||
3.45% Senior Notes due 2023 | $ | 250 | 1-Nov-23 | 3.45 | % | 3.5 | % | May 1 and November 1 | |||||||||
5.70% Senior Notes due 2039 | $ | 500 | 15-Oct-39 | 5.7 | % | 5.75 | % | April 15 and October 15 | |||||||||
4.875% Senior Notes due 2043 | $ | 750 | 1-Nov-43 | 4.875 | % | 4.89 | % | May 1 and November 1 | |||||||||
Summary of Carrying Value of Senior Notes | At December 31, 2014 and 2013, the carrying value of our senior notes was as follows: | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
5.15% Senior Notes due 2014 | $ | — | $ | 249,954 | |||||||||||||
4.875% Senior Notes due 2015 | 249,962 | 249,898 | |||||||||||||||
5.875% Senior Notes due 2019 | 499,626 | 499,551 | |||||||||||||||
3.45% Senior Notes due 2023 | 249,077 | 248,988 | |||||||||||||||
5.70% Senior Notes due 2039 | 496,973 | 496,919 | |||||||||||||||
4.875% Senior Notes due 2043 | 748,850 | 748,833 | |||||||||||||||
Total senior notes, net of unamortized discount | $ | 2,244,488 | $ | 2,494,143 | |||||||||||||
Less: Current portion of long-term debt | 249,962 | 249,954 | |||||||||||||||
Total Long-term debt | $ | 1,994,526 | $ | 2,244,189 | |||||||||||||
Aggregate Maturities of Senior Notes | As of December 31, 2014, the aggregate annual maturity of our senior notes was as follows: | ||||||||||||||||
Aggregate | |||||||||||||||||
Principal | |||||||||||||||||
Amount | |||||||||||||||||
Year Ending December 31, | (In thousands | ) | |||||||||||||||
2015 | $ | 250,000 | |||||||||||||||
2016 | — | ||||||||||||||||
2017 | — | ||||||||||||||||
2018 | — | ||||||||||||||||
2019 | 500,000 | ||||||||||||||||
Thereafter | 1,500,000 | ||||||||||||||||
Total maturities of senior notes | 2,250,000 | ||||||||||||||||
Less: unamortized discounts | (5,512 | ) | |||||||||||||||
Total maturities of senior notes, net of unamortized discount | $ | 2,244,488 | |||||||||||||||
Other_Comprehensive_Income_Los1
Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Equity [Abstract] | |||||||||||||||
Components of Other Comprehensive Income (Loss) and Associated Income Tax Effects | The following table sets forth the components of “Other comprehensive income (loss)” and the related income tax effects thereon for the three years ended December 31, 2014 and the cumulative balances in AOCGL by component at December 31, 2014, 2013 and 2012. | ||||||||||||||
Unrealized (Loss) Gain on | |||||||||||||||
Derivative | Marketable | Total | |||||||||||||
Financial | Securities | AOCGL | |||||||||||||
Instruments | |||||||||||||||
(In thousands) | |||||||||||||||
Balance at January 1, 2012 | $ | (4,620 | ) | $ | (22 | ) | $ | (4,642 | ) | ||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $(2,282) and $(28) | 4,237 | 124 | 4,361 | ||||||||||||
Reclassification adjustments for items included in Net Income, after tax of $(1,472) and $(1) | 2,733 | 44 | 2,777 | ||||||||||||
Total other comprehensive income (loss) | 6,970 | 168 | 7,138 | ||||||||||||
Balance at December 31, 2012 | 2,350 | 146 | 2,496 | ||||||||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $3,682 and $18 | (6,833 | ) | (6 | ) | (6,839 | ) | |||||||||
Reclassification adjustments for items included in Net Income, after tax of $(2,608) and $18 | 4,840 | (147 | ) | 4,693 | |||||||||||
Total other comprehensive income (loss) | (1,993 | ) | (153 | ) | (2,146 | ) | |||||||||
Balance at December 31, 2013 | 357 | (7 | ) | 350 | |||||||||||
Change in other comprehensive gain (loss) before reclassifications, after tax of $799 and $(15) | (1,482 | ) | (69 | ) | (1,551 | ) | |||||||||
Reclassification adjustments for items included in Net Income, after tax of $1,279 and $7 | (2,379 | ) | (25 | ) | (2,404 | ) | |||||||||
Total other comprehensive income (loss) | (3,861 | ) | (94 | ) | (3,955 | ) | |||||||||
Balance at December 31, 2014 | $ | (3,504 | ) | $ | (101 | ) | $ | (3,605 | ) | ||||||
Components of Accumulated Other Comprehensive Gain Loss | The following table presents the line items in our Consolidated Statements of Operations affected by reclassification adjustments out of AOCGL. | ||||||||||||||
Year Ended December 31, | Consolidated Statements of | ||||||||||||||
Operations Line Items | |||||||||||||||
Major Components of AOCGL | 2014 | 2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||||
Derivative financial instruments: | |||||||||||||||
Unrealized loss (gain) on FOREX contracts | $ | 3,650 | $ | (7,449 | ) | $ | (4,205 | ) | Contract drilling, excluding depreciation | ||||||
Unrealized loss (gain) on Treasury Lock Agreements | 8 | 1 | — | Interest expense | |||||||||||
(1,279 | ) | 2,608 | 1,472 | Income tax expense | |||||||||||
$ | 2,379 | $ | (4,840 | ) | $ | (2,733 | ) | Net of tax | |||||||
Marketable securities: | |||||||||||||||
Unrealized loss (gain) on marketable securities | $ | 32 | $ | 165 | $ | (45 | ) | Other, net | |||||||
(7 | ) | (18 | ) | 1 | Income tax expense | ||||||||||
$ | 25 | $ | 147 | $ | (44 | ) | Net of tax | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) are as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Federal – current | $ | 66,843 | $ | 40,045 | $ | 173,061 | |||||||
State – current | (121 | ) | 69 | 267 | |||||||||
Foreign – current | 59,926 | 151,339 | 75,748 | ||||||||||
Total current | 126,648 | 191,453 | 249,076 | ||||||||||
Federal – deferred | (6,699 | ) | 46,767 | (51,852 | ) | ||||||||
Foreign – deferred | 8,231 | (12,666 | ) | 380 | |||||||||
Total deferred | 1,532 | 34,101 | (51,472 | ) | |||||||||
Total | $ | 128,180 | $ | 225,554 | $ | 197,604 | |||||||
Difference Between Actual Income Tax Expense and Tax Provision Computed by Applying Statutory Federal Income Tax Rate to Income Before Taxes | The difference between actual income tax expense and the tax provision computed by applying the statutory federal income tax rate to income before taxes is attributable to the following: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Income before income tax expense: | |||||||||||||
U.S. | $ | 288,080 | $ | 537,635 | $ | 512,733 | |||||||
Foreign | 227,111 | 236,605 | 405,348 | ||||||||||
Worldwide | $ | 515,191 | $ | 774,240 | $ | 918,081 | |||||||
Expected income tax expense at federal statutory rate | $ | 180,317 | $ | 270,984 | $ | 321,328 | |||||||
Foreign earnings of foreign subsidiaries (not taxed at the statutory federal income tax rate) net of related foreign taxes | (46,163 | ) | (102,359 | ) | (166,251 | ) | |||||||
Foreign earnings of foreign subsidiaries for which U.S. federal income taxes have been provided | 7,190 | 805 | 28,252 | ||||||||||
Foreign taxes of domestic and foreign subsidiaries for which U.S. federal income taxes have also been provided | 38,358 | 45,428 | 35,722 | ||||||||||
Foreign tax credits | (39,843 | ) | (46,524 | ) | (45,824 | ) | |||||||
Interest capitalized by foreign subsidiaries | (16,492 | ) | (18,391 | ) | (11,764 | ) | |||||||
Impact of American Taxpayer Relief Act of 2012 | — | (27,509 | ) | — | |||||||||
Uncertain tax positions | (47,964 | ) | 66,085 | 6,325 | |||||||||
Amortization of deferred charges associated with intercompany rig sales to other tax jurisdictions | 44,301 | 30,894 | 31,276 | ||||||||||
Net expense (benefit) in connection with resolutions of tax issues and adjustments relating to prior years | 7,775 | 4,804 | (2,152 | ) | |||||||||
Other | 701 | 1,337 | 692 | ||||||||||
Income tax expense | $ | 128,180 | $ | 225,554 | $ | 197,604 | |||||||
Components of Deferred Income Tax Assets and Liabilities | Significant components of our deferred income tax assets and liabilities are as follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards, or NOLs | $ | 20,277 | $ | 12,038 | |||||||||
Foreign tax credits | 17,962 | — | |||||||||||
Worker’s compensation and other current accruals | 19,155 | 17,269 | |||||||||||
Bareboat charter deductions | 21,898 | — | |||||||||||
Disputed receivables reserved | 2,438 | 3,516 | |||||||||||
Deferred compensation | 14,409 | 14,020 | |||||||||||
Foreign contribution taxes | 5,345 | 5,749 | |||||||||||
Mobilization | — | 1,673 | |||||||||||
Nonqualified stock options and SARs | 10,316 | 9,584 | |||||||||||
Deferred deductions | 12,196 | 8,577 | |||||||||||
Interest -Uncertain Tax Positions | 1,011 | 1,008 | |||||||||||
Other | 2,555 | 1,714 | |||||||||||
Total deferred tax assets (1) | 127,562 | 75,148 | |||||||||||
Valuation allowance for NOLs | (20,277 | ) | (7,321 | ) | |||||||||
Valuation allowance for foreign tax credits | (516 | ) | — | ||||||||||
Valuation allowance for other deferred tax assets | (27,243 | ) | — | ||||||||||
Net deferred tax assets | 79,526 | 67,827 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Depreciation | (577,103 | ) | (578,742 | ) | |||||||||
Mobilization | (10,655 | ) | — | ||||||||||
Unbilled revenue | (6,518 | ) | (4,371 | ) | |||||||||
Undistributed earnings of foreign subsidiaries | (24 | ) | (24 | ) | |||||||||
Other | (8 | ) | (9 | ) | |||||||||
Total deferred tax liabilities | (594,308 | ) | (583,146 | ) | |||||||||
Net deferred tax liability | $ | (514,782 | ) | $ | (515,319 | ) | |||||||
-1 | $15.6 million and $10.2 million reflected in “Prepaid expenses and other current assets” in our Consolidated Balance Sheets at December 31, 2014 and 2013, respectively. See Note 3. | ||||||||||||
Summary of Changes in Valuation Allowance | A summary of changes in the valuation allowance is as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Valuation allowance as of January 1 | $ | 7,321 | $ | 22,876 | $ | 26,353 | |||||||
Establishment of valuation allowances: | |||||||||||||
Net operating losses | 15,677 | 25 | 946 | ||||||||||
Foreign tax credits | 516 | — | — | ||||||||||
Other deferred tax assets | 27,243 | — | — | ||||||||||
Releases of valuation allowances in various jurisdictions | (2,721 | ) | (15,580 | ) | (4,423 | ) | |||||||
Valuation allowance as of December 31 | $ | 48,036 | $ | 7,321 | $ | 22,876 | |||||||
Tax Benefits of these Mexican NOL Carryforwards | Unless utilized, the tax benefits of these NOL carryforwards will expire between 2021 and 2025 as follows: | ||||||||||||
Year Expiring | Tax Benefit of | ||||||||||||
NOL | |||||||||||||
Carryforwards | |||||||||||||
(In millions) | |||||||||||||
2021 | $ | 0.2 | |||||||||||
2022 | 0.2 | ||||||||||||
2023 | 0.8 | ||||||||||||
2025 | 0.6 | ||||||||||||
Total | $ | 1.8 | |||||||||||
Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Interest and Penalties | A reconciliation of the beginning and ending amount of unrecognized tax benefits, gross of tax carryforwards and excluding interest and penalties, and is as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Balance, beginning of period | $ | (90,921 | ) | $ | (67,150 | ) | $ | (62,936 | ) | ||||
Additions for current year tax positions | (5,813 | ) | (1,724 | ) | (3,837 | ) | |||||||
Additions for prior year tax positions | (292 | ) | (31,264 | ) | (5,136 | ) | |||||||
Reductions for prior year tax positions | 34,630 | 7,280 | 4,759 | ||||||||||
Reductions related to statute of limitation expirations | 5,280 | 1,937 | — | ||||||||||
Balance, end of period | $ | (57,116 | ) | $ | (90,921 | ) | $ | (67,150 | ) | ||||
Schedule of Accrued Interest and Penalties | The following table presents the amount of accrued interest and penalties at December 31, 2014 and 2013 related to uncertain tax positions: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(In thousands) | |||||||||||||
Uncertain tax positions net, excluding interest and penalties | $ | (50,513 | ) | $ | (76,303 | ) | |||||||
Accrued interest on uncertain tax positions | (7,503 | ) | (12,786 | ) | |||||||||
Accrued penalties on uncertain tax positions | (37,622 | ) | (59,797 | ) | |||||||||
Uncertain tax positions net, including interest and penalties | $ | (95,638 | ) | $ | (148,886 | ) | |||||||
Schedule of Interest Expense and Penalties | Interest expense and penalties recognized during the three years ended December 31, 2014 related to uncertain tax positions are as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Net increase (decrease) in interest expense related to unrecognized tax positions | $ | (5,283 | ) | $ | 5,758 | $ | (1,902 | ) | |||||
Net increase (decrease) in penalties related to unrecognized tax positions | (22,175 | ) | 38,136 | (787 | ) |
Segments_and_Geographic_Area_A1
Segments and Geographic Area Analysis (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Revenues from Contract Drilling Services by Equipment Type | Revenues from contract drilling services by equipment-type are listed below: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Floaters: | |||||||||||||
Ultra-Deepwater | $ | 987,565 | $ | 854,515 | $ | 902,793 | |||||||
Deepwater | 494,247 | 617,080 | 597,694 | ||||||||||
Mid-Water | 1,076,842 | 1,197,934 | 1,275,068 | ||||||||||
Total Floaters | 2,558,654 | 2,669,529 | 2,775,555 | ||||||||||
Jack-ups | 178,472 | 174,055 | 160,511 | ||||||||||
Total contract drilling revenues | 2,737,126 | 2,843,584 | 2,936,066 | ||||||||||
Revenues related to reimbursable expenses | 77,545 | 76,837 | 50,442 | ||||||||||
Total revenues | $ | 2,814,671 | $ | 2,920,421 | $ | 2,986,508 | |||||||
Revenues by Geographic Area Presented by Attributing Revenues to Individual Country | Revenues by geographic area are presented by attributing revenues to the individual country or areas where the services were performed. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
United States | $ | 418,095 | $ | 330,471 | $ | 173,961 | |||||||
International: | |||||||||||||
South America | 1,088,796 | 1,219,287 | 1,427,927 | ||||||||||
Europe/Africa/Mediterranean | 558,367 | 731,888 | 662,995 | ||||||||||
Australia/Asia | 503,814 | 438,814 | 524,957 | ||||||||||
Mexico | 245,599 | 199,961 | 196,668 | ||||||||||
2,396,576 | 2,589,950 | 2,812,547 | |||||||||||
Total revenues | $ | 2,814,671 | $ | 2,920,421 | $ | 2,986,508 | |||||||
Individual Countries that Comprised 5% or More of Our Total Contract Drilling Revenues from Unaffiliated Customers | For the years ended December 31, 2014, 2013 and 2012, individual countries that comprised 5% or more of our total contract drilling revenues from unaffiliated customers are listed below. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Brazil | 31 | % | 38.3 | % | 46.1 | % | |||||||
United Kingdom | 10.7 | % | 7.9 | % | 6.9 | % | |||||||
Mexico | 8.7 | % | 6.9 | % | 6.6 | % | |||||||
Australia | 6.4 | % | 3.2 | % | 6.7 | % | |||||||
Malaysia | 5.5 | % | 2.9 | % | 4 | % | |||||||
Long-Lived Tangible Assets by Geographic Location | The following table presents our long-lived tangible assets by geographic location as of December 31, 2014, 2013 and 2012. | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||
Drilling and other property and equipment, net: | |||||||||||||
United States(1) | $ | 2,637,621 | $ | 611,731 | $ | 444,984 | |||||||
International: | |||||||||||||
Australia/Asia/Middle East(2) | 1,460,841 | 2,078,348 | 1,474,999 | ||||||||||
South America | 1,445,832 | 1,690,976 | 1,827,247 | ||||||||||
Europe/Africa/Mediterranean | 1,128,857 | 793,097 | 799,194 | ||||||||||
Mexico | 272,802 | 293,075 | 318,548 | ||||||||||
4,308,332 | 4,855,496 | 4,419,988 | |||||||||||
Total | $ | 6,945,953 | $ | 5,467,227 | $ | 4,864,972 | |||||||
(1) | Long-lived tangible assets in the United States region as of December 31, 2014 include $1.9 billion related to three drillships that were delivered in 2014, two of which are in transit thereto. Long-lived tangible assets in the United States region as of December 31, 2013 and 2012 include $339.1 million and $167.4 million, respectively, in construction work-in-progress for the Ocean Onyx, which was under construction in Brownsville, Texas. | ||||||||||||
(2) | Long-lived tangible assets in the Australia/Asia/Middle East region include $439.2 million, $1,064.5 million and $741.1 million in construction work-in-progress for rigs under construction in South Korea as of December 31, 2014, 2013 and 2012, respectively, and $400.8 million and $264.6 million for the recently completed Ocean Apex as of December 31, 2014 and 2013, respectively. | ||||||||||||
Countries Where Parent Company had Material Concentration of Operating Assets | The following table presents the countries in which material concentrations of our long-lived tangible assets were located as of December 31, 2014, 2013 and 2012: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | 38 | % | 11.2 | % | 9.1 | % | |||||||
Brazil | 20.3 | % | 30.2 | % | 37.3 | % | |||||||
Spain | 8.1 | % | 1.2 | % | — | ||||||||
Vietnam | 6.9 | % | 0.6 | % | 1.4 | % | |||||||
Malaysia | 6.6 | % | 4.3 | % | 3.1 | % | |||||||
South Korea | 6.3 | % | 19.5 | % | 15.2 | % | |||||||
Mexico | 3.9 | % | 5.4 | % | 6.5 | % | |||||||
Angola | — | 6.3 | % | — | |||||||||
Indonesia | — | 5.2 | % | 6.8 | % | ||||||||
Republic of Congo | — | — | 7.4 | % | |||||||||
Singapore | — | 8.2 | % | 1.8 | % | ||||||||
Revenues from Major Customers that Contributed More than 10% of Total Revenues | Revenues from our major customers for the years ended December 31, 2014, 2013 and 2012 that contributed more than 10% of our total revenues are as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
Customer | 2014 | 2013 | 2012 | ||||||||||
Petróleo Brasileiro S.A. | 31.9 | % | 33.6 | % | 33.3 | % | |||||||
OGX Petróleo e Gás Ltda. | — | 2.4 | % | 12.5 | % |
Unaudited_Quarterly_Financial_1
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Unaudited Quarterly Financial Data | Unaudited summarized financial data by quarter for the years ended December 31, 2014 and 2013 is shown below. | ||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
2014 | |||||||||||||||||
Revenues | $ | 709,424 | $ | 692,244 | $ | 737,682 | $ | 675,321 | |||||||||
Operating income | 186,277 | 133,766 | 90,416 | 162,103 | |||||||||||||
Income before income tax expense | 167,679 | 112,603 | 81,639 | 153,270 | |||||||||||||
Net income | 145,810 | 89,713 | 52,645 | 98,843 | |||||||||||||
Net income per share, basic and diluted | $ | 1.05 | $ | 0.65 | $ | 0.38 | $ | 0.72 | |||||||||
2013 | |||||||||||||||||
Revenues | $ | 729,741 | $ | 758,018 | $ | 706,165 | $ | 726,497 | |||||||||
Operating income | 213,726 | 262,859 | 137,352 | 187,669 | |||||||||||||
Income before income tax expense | 206,179 | 256,301 | 131,565 | 180,195 | |||||||||||||
Net income | 175,989 | 185,334 | 94,748 | 92,615 | |||||||||||||
Net income per share, basic and diluted | $ | 1.27 | $ | 1.33 | $ | 0.68 | $ | 0.67 |
General_Information_Additional
General Information - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Feb. 16, 2015 | |
Rigs | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of offshore rigs owned | 38 | ||||
Period considered to treat short-term, highly liquid investments as cash equivalents | Three months or less | ||||
Carrying value of jack-up rig | $7,694,000 | ||||
Proceeds from disposition of assets | 18,318,000 | 4,900,000 | 138,495,000 | ||
Gain on disposition of assets | 5,382,000 | 4,070,000 | 80,844,000 | ||
Amount capitalized for asset replacements and betterments | 546,000,000 | 302,000,000 | |||
Sum of utilization and probability of occurrence scenarios | 100.00% | ||||
Repurchase of common stock, shares | 1,895,561 | ||||
Repurchase of common stock, cost | 87,756,000 | ||||
Gain (loss) on foreign currency transactions recognized in income | 3,200,000 | -4,900,000 | -2,000,000 | ||
Initial term of contracts minimum months | 2 months | ||||
Initial term of contracts maximum months | 60 months | ||||
Egyptian Pounds [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Bank deposits | 7,300,000 | 14,300,000 | |||
Subsequent Event [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Outstanding common stock owned by Loews Corporation | 52.50% | ||||
Other Assets [Member] | Egyptian Pounds [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Bank deposits | 7,200,000 | 12,700,000 | |||
Mid-Water Floaters [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of rigs subject to retire and scrap | 3 | ||||
Semisubmersibles [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of offshore rigs owned | 27 | ||||
Number of rigs under construction | 1 | ||||
Jack-ups [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of offshore rigs owned | 6 | ||||
Ultra-deepwater Drillships [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of offshore rigs owned | 5 | ||||
Number of rigs under construction | 1 | ||||
Ocean Spartan [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Carrying value of jack-up rig | 7,700,000 | ||||
Proceeds from disposition of assets | 16,500,000 | ||||
Gain on disposition of assets | 8,500,000 | ||||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Rig and equipment project costs | 25,000 | 25,000 | |||
Estimated useful life for drilling rigs and equipment | 3 years | ||||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Rig and equipment project costs | $160,000,000 | $160,000,000 | |||
Estimated useful life for drilling rigs and equipment | 30 years |
General_Information_Reconcilia
General Information - Reconciliation of Total Interest Cost to Interest Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Costs Incurred [Abstract] | |||
Total interest cost including amortization of debt issuance costs | $122,656 | $99,080 | $83,890 |
Capitalized interest | -60,603 | -74,237 | -37,674 |
Total interest expense as reported | $62,053 | $24,843 | $46,216 |
Asset_Impairments_Additional_I
Asset Impairments - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 |
Rigs | ||||
Schedule Of Asset Impairment Charges [Line Items] | ||||
Impairment of assets | $109,462 | $0 | $62,437 | |
Aggregate book value of physical assets | 6,945,953 | 5,467,227 | 4,864,972 | |
Cold-stacked Rigs [Member] | ||||
Schedule Of Asset Impairment Charges [Line Items] | ||||
Number of rigs for sale | 4 | |||
Number of rigs sold or scrapped during period | 1 | |||
Additional Rigs Subject To Possible Impairment [Member] | ||||
Schedule Of Asset Impairment Charges [Line Items] | ||||
Number of additional rigs subject to possible impairment | 6 | |||
Retirement Group [Member] | ||||
Schedule Of Asset Impairment Charges [Line Items] | ||||
Number of cold stacked rigs at period end, previously impaired | 3 | |||
Number of rigs planned to be scrapped | 6 | |||
Number of rigs with fair values estimated based on scrap quote | 5 | |||
Number of rigs included in indicative bid | 2 | |||
Impairment of assets | 0 | 62,400 | 109,500 | |
Number of rigs scrapped during period | 2 | |||
Aggregate book value of physical assets | $9,400 | |||
Number of rigs evaluated for impairment | 3 |
Supplemental_Financial_Informa2
Supplemental Financial Information - Accounts Receivable, Net of Allowance for Doubtful Accounts (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Receivables [Abstract] | ||||
Trade receivables | $437,017 | $473,013 | ||
Value added tax receivables | 24,853 | 19,407 | ||
Amounts held in escrow | 6,450 | 3,066 | ||
Interest receivable | 317 | 7 | ||
Related party receivables | 339 | 587 | ||
Other | 610 | 615 | ||
Receivables Gross Current, Total | 469,586 | 496,695 | ||
Allowance for bad debts | -5,724 | -27,340 | -5,458 | -6,867 |
Total | $463,862 | $469,355 |
Supplemental_Financial_Informa3
Supplemental Financial Information - Changes in Provision for Bad Debts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Receivables [Abstract] | |||
Allowance for bad debts, beginning of year | $27,340 | $5,458 | $6,867 |
Provision for bad debts | 22,513 | ||
Recovery of bad debts | -1,018 | ||
Total bad debt expense (recovery) | 22,513 | -1,018 | |
Write off of uncollectible accounts against reserve | -21,148 | -509 | -391 |
Other | -468 | -122 | |
Allowance for bad debts, end of year | $5,724 | $27,340 | $5,458 |
Supplemental_Financial_Informa4
Supplemental Financial Information - Prepaid Expenses and Other Current Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Rig spare parts and supplies | $56,315 | $52,439 |
Deferred mobilization costs | 53,206 | 20,274 |
Prepaid insurance | 12,163 | 12,503 |
Deferred tax assets | 15,612 | 10,221 |
Prepaid taxes | 44,085 | 42,058 |
FOREX contracts | 1,562 | |
Other | 4,160 | 4,940 |
Total | $185,541 | $143,997 |
Supplemental_Financial_Informa5
Supplemental Financial Information - Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Rig operating expenses | $85,897 | $87,307 |
Payroll and benefits | 131,664 | 121,387 |
Deferred revenue | 63,209 | 26,975 |
Accrued capital project/upgrade costs | 103,123 | 86,274 |
Interest payable | 18,365 | 28,324 |
Personal injury and other claims | 8,570 | 9,687 |
FOREX contracts | 5,439 | 1,143 |
Other | 10,325 | 9,574 |
Total | $426,592 | $370,671 |
Supplemental_Financial_Informa6
Supplemental Financial Information - Noncash Investing and Financing Activities (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Financial Statements, Captions [Line Items] | |||
Accrued but unpaid capital expenditures at period end | $103,123 | $86,274 | $56,595 |
Income tax benefits related to exercise of stock options | 1,458 | 1,081 | 1,083 |
Cash interest payments | 133,784 | 82,938 | 83,125 |
U.S Federal [Member] | |||
Cash income taxes paid, net of refunds: | |||
Cash income taxes paid, net of refunds | 62,000 | 71,000 | |
Foreign [Member] | |||
Cash income taxes paid, net of refunds: | |||
Cash income taxes paid, net of refunds | 92,049 | 78,041 | 72,249 |
State [Member] | |||
Cash income taxes paid, net of refunds: | |||
Cash income taxes paid, net of refunds | ($18) | $190 | $243 |
Supplemental_Financial_Informa7
Supplemental Financial Information - Noncash Investing and Financing Activities (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Financial Statements, Captions [Line Items] | |||
Interest payments, net of amounts capitalized | $73,200,000 | $16,500,000 | $46,200,000 |
Interest paid | 133,784,000 | 82,938,000 | 83,125,000 |
Internal Revenue Service [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Interest paid | $200,000 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $3,507,000 | $3,573,000 | $4,357,000 | |
Stock Options and SARs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock awards, vesting period | 4 years | |||
Expiration (in years) | 10 years | |||
Compensation cost recognized for time-vested awards | 4,100,000 | 3,900,000 | 4,700,000 | |
Tax benefits recognized | 1,400,000 | 1,300,000 | 1,600,000 | |
Weighted-average grant date fair values of awards granted | $10.40 | $13.74 | $19.01 | |
Intrinsic value of awards exercised | 169,000 | 162,000 | 147,000 | |
Fair value of awards vested | 4,500,000 | 4,100,000 | 5,200,000 | |
Unrecognized compensation cost related to nonvested stock options and SARs granted under the Stock Plan | 3,900,000 | |||
Expected weighted average period to recognize the compensation cost related to nonvested stock options and SARs granted under the Stock Plan | 2 years | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock awards, vesting period | 3 years | |||
Targeted performance restricted stock units awarded | 52,581 | |||
Weighted-average price of common stock grant date per share | $47.52 | |||
Number of shares granted to CEO vested | 0 | |||
Target value of RSUs granted | 3,000,000 | |||
Stock-based compensation expense | 900,000 | |||
Share-based liabilities | $900,000 | |||
Equity Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares of common stock available for issuance | 7,500,000 |
StockBased_Compensation_Weight
Stock-Based Compensation - Weighted Average Assumptions Used in Estimating Fair Value of Options and SARs (Detail) (Stock Appreciation Rights (SARs) [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Appreciation Rights (SARs) [Member] | |||
Schedule Of Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Activity [Line Items] | |||
Expected life of SARs (in years) | 7 years | 7 years | 6 years |
Expected volatility | 21.68% | 18.24% | 33.45% |
Dividend yield | 1.10% | 0.75% | 0.78% |
Risk free interest rate | 2.08% | 1.61% | 0.89% |
StockBased_Compensation_Summar
Stock-Based Compensation - Summary of Activity Under Stock Plan (Detail) (Stock Options and SARs [Member], USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 |
Stock Options and SARs [Member] | |
Schedule Of Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Activity [Line Items] | |
Number of Awards Outstanding, Beginning Balance | 1,392,659 |
Number of Awards, granted | 288,675 |
Number of Awards, exercised | 9,377 |
Number of Awards, forfeited | 12,696 |
Number of Awards, expired | 71,931 |
Number of Awards, Outstanding, Ending Balance | 1,587,330 |
Number of Awards, exercisable | 1,188,938 |
Weighted-Average Exercise Price Outstanding, Beginning Balance | $78.22 |
Weighted-Average Exercise Price, granted | $47.09 |
Weighted-Average Exercise Price, exercised | $28.28 |
Weighted-Average Exercise Price, forfeited | $61.77 |
Weighted-Average Exercise Price, expired | $77.21 |
Weighted-Average Exercise Price Outstanding, Ending Balance | $73.03 |
Weighted-Average Exercise Price Outstanding, exercisable | $78.62 |
Weighted-Average Remaining Contractual Term, Ending Balance | 6 years 3 months 18 days |
Weighted-Average Remaining Contractual Term, exercisable | 5 years 6 months |
Aggregate Intrinsic Value, Ending Balance | $160 |
Aggregate Intrinsic Value, exercisable | $36 |
Earnings_Per_Share_Reconciliat
Earnings Per Share - Reconciliation of Numerators and Denominators of Basic and Diluted Per-Share Computations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||||||||||
Net income - basic and diluted (numerator): | $98,843 | $52,645 | $89,713 | $145,810 | $92,615 | $94,748 | $185,334 | $175,989 | $387,011 | $548,686 | $720,477 |
Weighted-average shares - basic (denominator): | 137,473 | 139,035 | 139,029 | ||||||||
Dilutive effect of stock-based awards | 50 | 29 | 19 | ||||||||
Weighted-average shares including conversions - diluted (denominator): | 137,523 | 139,064 | 139,048 | ||||||||
Earnings per share: | |||||||||||
Basic | $2.82 | $3.95 | $5.18 | ||||||||
Diluted | $2.81 | $3.95 | $5.18 |
Earnings_Per_Share_Securities_
Earnings Per Share - Securities Excluded from Computation of Diluted Earning Per Share (Detail) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Options [Member] | |||
Employee and director: | |||
Securities excluded from computation of diluted earning per share | 37 | 18 | 18 |
Stock Appreciation Rights (SARs) [Member] | |||
Employee and director: | |||
Securities excluded from computation of diluted earning per share | 1,488 | 956 | 853 |
Marketable_Securities_Investme
Marketable Securities - Investments in Marketable Securities as Available for Sale (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $16,133 | $1,750,067 |
Unrealized Gain (Loss) | -100 | -14 |
Market Value | 16,033 | 1,750,053 |
U.S. Treasury Bills and Notes (Due Within One Year) [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,749,879 | |
Unrealized Gain (Loss) | -22 | |
Market Value | 1,749,857 | |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,003 | |
Unrealized Gain (Loss) | -104 | |
Market Value | 15,899 | |
Mortgage-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 130 | 188 |
Unrealized Gain (Loss) | 4 | 8 |
Market Value | $134 | $196 |
Marketable_Securities_Summary_
Marketable Securities - Summary of Proceeds from Sales and Maturities of Marketable Securities and Gross Realized Gains and Losses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from maturities | $8,000,000 | $4,650,000 | $2,575,000 |
Proceeds from sales | 57 | 85 | 150,118 |
Gross realized gains | 0 | 0 | 0 |
Gross realized losses | ($1) | ($1) | ($6) |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2013 | Dec. 31, 2014 | Nov. 30, 2013 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | AUD | BRL | GBP (£) | MXN | Reclassification out of Accumulated Other Comprehensive Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Treasury Lock Agreements [Member] | Treasury Lock Agreements [Member] | Treasury Lock Agreements [Member] | FOREX Contracts [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||
Agreement | ||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||||||||
Notional amount of foreign currency contracts settled | $304,700,000 | $307,400,000 | $305,600,000 | |||||||||||
Derivative contracts outstanding in the aggregate notional amount | 70,200,000 | 8,200,000 | 15,900,000 | 31,300,000 | 14,800,000 | 500,000,000 | ||||||||
Amount of (loss) gain recognized in AOCGL on derivative (effective portion) | 26,728 | |||||||||||||
Number of treasury lock agreements | 2 | |||||||||||||
Net unrealized gains (losses) associated with derivative financial instruments to be reclassified to earnings | 8,000 | -5,400,000 | ||||||||||||
Amount reclassified from AOCGL due to the probability of a forecasted transaction not occurring | $0 | $0 | $0 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments - Amounts Recognized in Consolidated Statements of Operations Related to FOREX Contracts Designated as Accounting Hedges (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain Recognized in Income | $3,275 | ($6,501) | ($4,302) |
Contract Drilling Expense [Member] | Designated as Hedging Instrument [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain Recognized in Income | $3,275 | ($6,501) | ($4,302) |
Derivative_Financial_Instrumen4
Derivative Financial Instruments - Fair Values of Forex Contracts Designated as Hedging Instruments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets designated as hedging instruments, current | $1,562 | |
Derivative liabilities designated as hedging instruments, current | -5,439 | -1,143 |
Accrued Liabilities [Member] | FOREX Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities designated as hedging instruments, current | -5,439 | -1,143 |
Prepaid Expenses and Other Current Assets [Member] | FOREX Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets designated as hedging instruments, current | $1,562 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments - Amounts Recognized in Consolidated Balance Sheets and Consolidated Statements of Operations Related to Derivative Financial Instruments Designated as Cash Flow Hedges (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Derivative Designated as Accounting Hedges [Member] | FOREX Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of (loss) gain recognized in AOCGL on derivative (effective portion) | ($2,281,000) | ($10,542,000) | $6,519,000 |
Derivative Designated as Accounting Hedges [Member] | Treasury Lock Agreements [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of (loss) gain recognized in AOCGL on derivative (effective portion) | 27,000 | ||
Contract Drilling Expense [Member] | Derivative Designated as Accounting Hedges [Member] | FOREX Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of (loss) gain reclassified from AOCGL into income (effective portion) | 3,650,000 | -7,449,000 | -4,205,000 |
Foreign Currency Transaction Gain (Loss) [Member] | Derivative Designated as Accounting Hedges [Member] | FOREX Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of loss recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | -31,000 | -104,000 | -17,000 |
Interest Expense [Member] | Derivative Designated as Accounting Hedges [Member] | Treasury Lock Agreements [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of (loss) gain reclassified from AOCGL into income (effective portion) | $8,000 | $1,000 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Disclosures - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2014 | |
Rigs | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Accounts receivable, net | $463,862,000 | $469,355,000 | $469,355,000 | ||
Bad debt expense | 22,513,000 | ||||
Receivables written off | 21,148,000 | 509,000 | 391,000 | ||
Transfers between fair value levels | 0 | 0 | |||
Impairment of assets | 109,462,000 | 0 | 62,437,000 | ||
Measurement period for determining fair value of debt instruments | 10 days | ||||
Ogx and Niko Resources [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Number of customers | 2 | ||||
Bad debt expense | 22,500,000 | ||||
OGX Petroleo e Gas Ltda. [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Receivables written off | 21,200,000 | ||||
Accounts Receivable [Member] | Petroleo Brasileiro S.A. [Member] | Credit Concentration Risk [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Accounts receivable, net | 123,300,000 | 154,500,000 | 154,500,000 | ||
Percentage of accounts receivable due from major customer | 29.00% | 35.00% | |||
Mid-Water [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Number of mid-water semisubmersible rigs to be scrapped | 6 | ||||
Niko [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash received pursuant to Settlement Agreement | 20,300,000 | 25,000,000 | |||
Anticipated future payments pursuant to Settlement Agreement | 34,800,000 | ||||
Level 1 [Member] | Cash Held in Money Market Funds [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of investments | 197,500,000 | 281,300,000 | 281,300,000 | ||
Level 1 [Member] | Time Deposits [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of investments | 20,300,000 | 30,000,000 | 30,000,000 | ||
Level 1 [Member] | U.S. Treasury Securities [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of investments | $1,749,900,000 | $1,749,900,000 | |||
Level 3 [Member] | Mid-Water [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Number of mid-water semisubmersible rigs to be scrapped | 4 |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Disclosures - Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets: | |||
Loss on assets | $109,462 | $0 | $62,437 |
Book Value of Assets | 6,945,953 | 5,467,227 | 4,864,972 |
FOREX contracts | 1,562 | ||
Liabilities: | |||
FOREX contracts | -5,439 | -1,143 | |
Fair Value Measurements, Recurring [Member] | |||
Assets: | |||
Total assets | 233,822 | 2,062,913 | |
Short-term investments | 217,789 | 2,061,154 | |
Corporate bonds | 15,899 | ||
FOREX contracts | 1,562 | ||
Mortgage-backed securities | 134 | 197 | |
Liabilities: | |||
FOREX contracts | -5,439 | -1,143 | |
Fair Value Measurements, Recurring [Member] | Level 1 [Member] | |||
Assets: | |||
Total assets | 217,789 | 2,061,154 | |
Short-term investments | 217,789 | 2,061,154 | |
Fair Value Measurements, Recurring [Member] | Level 2 [Member] | |||
Assets: | |||
Total assets | 16,033 | 1,759 | |
Corporate bonds | 15,899 | ||
FOREX contracts | 1,562 | ||
Mortgage-backed securities | 134 | 197 | |
Liabilities: | |||
FOREX contracts | -5,439 | -1,143 | |
Nonrecurring Fair Value Measurements [Member] | |||
Assets: | |||
Loss on assets | 109,462 | ||
Book Value of Assets | 9,421 | ||
Nonrecurring Fair Value Measurements [Member] | Level 3 [Member] | |||
Assets: | |||
Book Value of Assets | $9,421 |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value Disclosures - Assets and Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis (Parenthetical) (Detail) (Nonrecurring Fair Value Measurements [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Rigs | |
Nonrecurring Fair Value Measurements [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Number of mid-water semisubmersible rigs to be scrapped | 4 |
Depreciation expense | $6.60 |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value Disclosures - Fair Value and Related Carrying Values of Our Debt Instruments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
5.15% Senior Notes due 2014 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | $249,954,000 | |
Fair Value | 257,400,000 | |
4.875% Senior Notes due 2015 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | 249,962,000 | 249,898,000 |
Fair Value | 255,000,000 | 265,700,000 |
5.875% Senior Notes due 2019 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | 499,626,000 | 499,551,000 |
Fair Value | 544,900,000 | 578,100,000 |
3.45% Senior Notes due 2023 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | 249,077,000 | 248,988,000 |
Fair Value | 232,000,000 | 241,400,000 |
5.70% Senior Notes due 2039 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | 496,973,000 | 496,919,000 |
Fair Value | 478,500,000 | 543,100,000 |
4.875% Senior Notes due 2043 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying Value | 748,850,000 | 748,833,000 |
Fair Value | $638,900,000 | $736,100,000 |
Financial_Instruments_and_Fair6
Financial Instruments and Fair Value Disclosures - Fair Value and Related Carrying Values of Our Debt Instruments (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 |
5.15% Senior Notes due 2014 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 5.15% | 5.15% |
4.875% Senior Notes due 2015 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
5.875% Senior Notes due 2019 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 5.88% | 5.88% |
3.45% Senior Notes due 2023 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 3.45% | 3.45% |
5.70% Senior Notes due 2039 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 5.70% | 5.70% |
4.875% Senior Notes due 2043 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
Drilling_and_Other_Property_an2
Drilling and Other Property and Equipment - Summary of Cost and Accumulated Depreciation of Drilling and Other Property and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $11,132,100 | $9,211,703 | |
Less: accumulated depreciation | -4,186,147 | -3,744,476 | |
Drilling and other property and equipment, net | 6,945,953 | 5,467,227 | 4,864,972 |
Drilling Rigs and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 10,555,314 | 7,412,066 | |
Construction Work-in-Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 439,206 | 1,668,211 | |
Land and Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 66,989 | 65,627 | |
Office Equipment and Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $70,591 | $65,799 |
Drilling_and_Other_Property_an3
Drilling and Other Property and Equipment - Summary of Construction Work-in-Progress, Including Capitalized Interest (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Rig(s) Under Construction | $439,206 | $1,668,211 |
Ultra-deepwater Drillships [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Rig(s) Under Construction | 225,405 | 868,908 |
Ocean GreatWhite [Member] | Ultra-deepwater Semisubmersible [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Rig(s) Under Construction | 213,801 | 195,578 |
Ocean Onyx [Member] | Deepwater semisubmersibles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Rig(s) Under Construction | 339,129 | |
Ocean Apex [Member] | Deepwater semisubmersibles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Rig(s) Under Construction | $264,596 |
Drilling_and_Other_Property_an4
Drilling and Other Property and Equipment - Additional Information (Detail) (Assets Placed in Service [Member], USD $) | 12 Months Ended |
In Billions, unless otherwise specified | Dec. 31, 2013 |
Assets Placed in Service [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction work-in-progress | $1.30 |
Credit_Agreement_and_Senior_No2
Credit Agreement and Senior Notes - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Oct. 22, 2014 | |
Debt Instrument [Line Items] | |||
Ratio of consolidated indebtedness to total capitalization | 60.00% | ||
Amount outstanding under credit agreement | $0 | $0 | |
Issuance of senior notes | 1,000,000,000 | ||
Proceeds from issuance | 987,800,000 | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee on unused commitments | 0.06% | ||
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Commitment fee on unused commitments | 0.20% | ||
3.45% Senior Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 250,000,000 | ||
Maturity Date | 1-Nov-23 | ||
Accreted value of senior notes | 249,077,000 | 248,988,000 | |
3.45% Senior Notes due 2023 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
3.45% Senior Notes due 2023 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
4.875% Senior Notes due 2043 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 750,000,000 | ||
Maturity Date | 1-Nov-43 | ||
Accreted value of senior notes | 748,850,000 | 748,833,000 | |
4.875% Senior Notes due 2043 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
4.875% Senior Notes due 2043 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
5.15% Senior Notes due 2014 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 250,000,000 | ||
Accreted value of senior notes | 249,954,000 | ||
5.15% Senior Notes due 2014 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
5.15% Senior Notes due 2014 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
4.875% Senior Notes due 2015 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 250,000,000 | ||
Maturity Date | 1-Jul-15 | ||
Accreted value of senior notes | 249,962,000 | 249,898,000 | |
4.875% Senior Notes due 2015 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
4.875% Senior Notes due 2015 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
5.875% Senior Notes due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 500,000,000 | ||
Maturity Date | 1-May-19 | ||
Accreted value of senior notes | 499,626,000 | 499,551,000 | |
5.875% Senior Notes due 2019 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
5.875% Senior Notes due 2019 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
5.70% Senior Notes due 2039 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of senior notes | 500,000,000 | ||
Maturity Date | 15-Oct-39 | ||
Accreted value of senior notes | 496,973,000 | 496,919,000 | |
5.70% Senior Notes due 2039 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 15 days | ||
5.70% Senior Notes due 2039 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Notice period for redemption of senior notes | 60 days | ||
Federal Funds Rate [Member] | |||
Debt Instrument [Line Items] | |||
Basis point increase | 0.50% | ||
One Month Eurodollar Rate [Member] | |||
Debt Instrument [Line Items] | |||
Basis point increase | 1.00% | ||
ABR Loans [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest margin | 0.00% | ||
ABR Loans [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest margin | 0.25% | ||
Eurodollar Loans [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest margin | 0.75% | ||
Eurodollar Loans [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest margin | 1.25% | ||
Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Term of Credit agreement | 5 years | ||
Additional amount available for general purposes | 500,000,000 | ||
Extension of the maturity date under credit agreement | Up to two additional one-year extensions of the maturity date | ||
Maturity period of credit agreement | 22-Oct-19 | ||
Credit Agreement [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | 1,000,000,000 | ||
Credit Agreement [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | 1,500,000,000 | ||
Credit Agreement [Member] | Senior Unsecured [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | 1,500,000,000 | ||
Credit Agreement Commitments [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | 40,000,000 | ||
Maturity period of credit agreement | 17-Mar-19 | ||
Letters of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | 250,000,000 | ||
Swingline Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Amount available for general purposes | $100,000,000 | ||
Swingline loans bear interest description | Swingline loans bear interest, at our option, at a rate per annum equal to (i) the ABR plus the applicable interest margin for ABR loans or (ii) the daily one-month Eurodollar Rate plus the applicable interest margin for Eurodollar loans. | ||
Performance Letters of Credit [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Participation fees for letters of credit | 0.38% | ||
Performance Letters of Credit [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Participation fees for letters of credit | 0.63% | ||
Other Letter of Credit [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Participation fees for letters of credit | 0.75% | ||
Other Letter of Credit [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Participation fees for letters of credit | 1.25% |
Credit_Agreement_and_Senior_No3
Credit Agreement and Senior Notes - Summary of Senior Notes (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
4.875% Senior Notes due 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | $250 | |
Maturity Date | 1-Jul-15 | |
Interest rate Coupon, senior notes | 4.88% | 4.88% |
Interest rate Effective, senior notes | 4.90% | |
Semiannual Interest Payment Dates | January 1 and July 1 | |
5.875% Senior Notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | 500 | |
Maturity Date | 1-May-19 | |
Interest rate Coupon, senior notes | 5.88% | 5.88% |
Interest rate Effective, senior notes | 5.89% | |
Semiannual Interest Payment Dates | May 1 and November 1 | |
3.45% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | 250 | |
Maturity Date | 1-Nov-23 | |
Interest rate Coupon, senior notes | 3.45% | 3.45% |
Interest rate Effective, senior notes | 3.50% | |
Semiannual Interest Payment Dates | May 1 and November 1 | |
5.70% Senior Notes due 2039 [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | 500 | |
Maturity Date | 15-Oct-39 | |
Interest rate Coupon, senior notes | 5.70% | 5.70% |
Interest rate Effective, senior notes | 5.75% | |
Semiannual Interest Payment Dates | April 15 and October 15 | |
4.875% Senior Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate Principal Amount | $750 | |
Maturity Date | 1-Nov-43 | |
Interest rate Coupon, senior notes | 4.88% | 4.88% |
Interest rate Effective, senior notes | 4.89% | |
Semiannual Interest Payment Dates | May 1 and November 1 |
Credit_Agreement_and_Senior_No4
Credit Agreement and Senior Notes - Summary of Senior Notes (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 |
4.875% Senior Notes due 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
5.875% Senior Notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 5.88% | 5.88% |
3.45% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 3.45% | 3.45% |
5.70% Senior Notes due 2039 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 5.70% | 5.70% |
4.875% Senior Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
Credit_Agreement_and_Senior_No5
Credit Agreement and Senior Notes - Summary of Carrying Value of Senior Notes (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Total maturities of senior notes, net of unamortized discount | $2,244,488 | $2,494,143 |
Less: Current portion of long-term debt | 249,962 | 249,954 |
Total Long-term debt | 1,994,526 | 2,244,189 |
5.15% Senior Notes due 2014 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 249,954 | |
4.875% Senior Notes due 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 249,962 | 249,898 |
5.875% Senior Notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 499,626 | 499,551 |
3.45% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 249,077 | 248,988 |
5.70% Senior Notes due 2039 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | 496,973 | 496,919 |
4.875% Senior Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Notes | $748,850 | $748,833 |
Credit_Agreement_and_Senior_No6
Credit Agreement and Senior Notes - Summary of Carrying Value of Senior Notes (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 |
5.15% Senior Notes due 2014 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 5.15% | 5.15% |
4.875% Senior Notes due 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
5.875% Senior Notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 5.88% | 5.88% |
3.45% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 3.45% | 3.45% |
5.70% Senior Notes due 2039 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 5.70% | 5.70% |
4.875% Senior Notes due 2043 [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate of senior notes | 4.88% | 4.88% |
Credit_Agreement_and_Senior_No7
Credit Agreement and Senior Notes - Aggregate Maturities of Senior Notes (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
2015 | $250,000 | |
2016 | 0 | |
2017 | 0 | |
2018 | 0 | |
2019 | 500,000 | |
Thereafter | 1,500,000 | |
Total maturities of senior notes | 2,250,000 | |
Less: unamortized discounts | -5,512 | |
Total maturities of senior notes, net of unamortized discount | $2,244,488 | $2,494,143 |
Other_Comprehensive_Income_Los2
Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Gain (Loss) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $350 | $2,496 | ($4,642) |
Change in other comprehensive gain (loss) before reclassifications | -1,551 | -6,839 | 4,361 |
Reclassification adjustments for items included in Net Income | -2,404 | 4,693 | 2,777 |
Total other comprehensive (loss) gain | -3,955 | -2,146 | 7,138 |
Ending balance | -3,605 | 350 | 2,496 |
Derivative Financial Instrument [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 357 | 2,350 | -4,620 |
Change in other comprehensive gain (loss) before reclassifications | -1,482 | -6,833 | 4,237 |
Reclassification adjustments for items included in Net Income | -2,379 | 4,840 | 2,733 |
Total other comprehensive (loss) gain | -3,861 | -1,993 | 6,970 |
Ending balance | -3,504 | 357 | 2,350 |
Marketable Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | -7 | 146 | -22 |
Change in other comprehensive gain (loss) before reclassifications | -69 | -6 | 124 |
Reclassification adjustments for items included in Net Income | -25 | -147 | 44 |
Total other comprehensive (loss) gain | -94 | -153 | 168 |
Ending balance | ($101) | ($7) | $146 |
Other_Comprehensive_Income_Los3
Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Gain (Loss) (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Equity [Abstract] | |||
Change in other comprehensive gain (loss), tax (expense) benefit | $799 | $3,682 | ($2,282) |
Change in other comprehensive gain (loss), tax (expense) benefit | -15 | 18 | -28 |
Reclassification adjustments for items included in Net Income, tax (expense) benefit | 1,279 | -2,608 | -1,472 |
Reclassification adjustments for items included in Net Income, tax (expense) benefit | $7 | $18 | ($1) |
Other_Comprehensive_Income_Los4
Other Comprehensive Income (Loss) - Items in Consolidated Statements of Operations Affected by Reclassification Adjustments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other, net | ($682) | ($1,691) | $992 | ||||||||
Contract drilling, excluding depreciation | 1,523,623 | 1,572,525 | 1,537,224 | ||||||||
Interest expense | 62,053 | 24,843 | 46,216 | ||||||||
Income tax expense | 128,180 | 225,554 | 197,604 | ||||||||
Net of tax | -98,843 | -52,645 | -89,713 | -145,810 | -92,615 | -94,748 | -185,334 | -175,989 | -387,011 | -548,686 | -720,477 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income tax expense | -1,279 | 2,608 | 1,472 | ||||||||
Net of tax | 2,379 | -4,840 | -2,733 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | FOREX Contracts [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Contract drilling, excluding depreciation | 3,650 | -7,449 | -4,205 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Treasury Lock Agreements [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest expense | 8 | 1 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Marketable Securities [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other, net | 32 | 165 | -45 | ||||||||
Income tax expense | -7 | -18 | 1 | ||||||||
Net of tax | $25 | $147 | ($44) |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Contingencies And Commitments [Line Items] | |||
Net profits interest percent | 27.00% | ||
Deductible for marine liability coverage including personal injury claims, per first occurrence | $25,000,000 | ||
Range of deductible for liability coverage for personal injury claims, lower limit | 5,000,000 | ||
Range of deductible for liability coverage for personal injury claims, upper limit | 100,000,000 | ||
Other purchase obligations | 0 | 0 | |
Rental expense under operating leases | 10,600,000 | 13,500,000 | 10,800,000 |
Future minimum rental payments under leases, in current years | 1,300,000 | ||
Future minimum rental payments under leases, in two years | 1,100,000 | ||
Future minimum rental payments under leases , in years three through five following reporting period | 1,200,000 | ||
Future minimum rental payments under leases, thereafter | 0 | ||
Total Contingent Liabilities Under Letters of Credit and Bonds [Member] | |||
Contingencies And Commitments [Line Items] | |||
Contingent liability under letters of credit and other bonds | 99,600,000 | ||
Potentially Collateralized Contingent Liability Under Letters Of Credit and Bonds [Member] | |||
Contingencies And Commitments [Line Items] | |||
Contingent liability under letters of credit and other bonds | 92,000,000 | ||
Hyundai Heavy Industries, Co., Ltd. [Member] | Ultra-deepwater Drillships [Member] | |||
Contingencies And Commitments [Line Items] | |||
Cost of enhancement of project | 655,000,000 | ||
Total number of installments due under each turnkey construction agreements | 2 | ||
Construction installments paid | 169,300,000 | ||
Number of ultra-deepwater drillships under construction | 1 | ||
Construction agreement balance amount payable | 395,000,000 | ||
Hyundai Heavy Industries, Co., Ltd. [Member] | Ultra-Deepwater Floater Construction [Member] | |||
Contingencies And Commitments [Line Items] | |||
Water depth of rig | 10,000 | ||
Cost of enhancement of project | 764,000,000 | ||
Total number of installments due under each turnkey construction agreements | 2 | ||
Cost of construction per shipyard agreement | 628,500,000 | ||
Construction installments paid | 188,600,000 | ||
Final installment for Ultra-Deep water Floater Construction | 439,900,000 | ||
Brazil Tax Jurisdiction [Member] | |||
Contingencies And Commitments [Line Items] | |||
Unable to estimate the amount of loss or range of loss | We are unable to estimate the amount of loss or range of loss, if any, at this time, should Petrobras ultimately be assessed such taxes and it be determined that Petrobras is entitled to obtain reimbursement from us. 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. | ||
Personal Injury Claims [Member] | |||
Contingencies And Commitments [Line Items] | |||
Personal injury claims recorded | 39,400,000 | 35,500,000 | |
Personal Injury Claims [Member] | Accrued Liabilities [Member] | |||
Contingencies And Commitments [Line Items] | |||
Personal injury claims recorded | 8,200,000 | 9,500,000 | |
Personal Injury Claims [Member] | Other Liabilities [Member] | |||
Contingencies And Commitments [Line Items] | |||
Personal injury claims recorded | $31,200,000 | $26,000,000 |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | |||
Terms and conditions of service agreement with Loews | The Services Agreement may be terminated at our option upon 30 days' notice to Loews and at the option of Loews upon six months' notice to us. | ||
Services Agreement with Loews [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | $1.10 | $1 | $0.80 |
SEACOR Holdings Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | 0.8 | 0.1 | 0.1 |
Ernst & Young LLP [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | $2.90 | $1.60 | $1 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Feb. 28, 2012 | Jun. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Other Assets [Member] | Other Assets [Member] | Other Liabilities [Member] | Other Liabilities [Member] | Combined Mexico and Hungary Tax Jurisdictions [Member] | Brazil Tax Jurisdiction [Member] | Mexico [Member] | United Kingdom [Member] | United States [Member] | 2004 & 2005 Tax Year [Member] | 2000 Tax Year [Member] | 2003 through 2008 Tax Year [Member] | Tax Year 2008 [Member] | 2004 Tax Year [Member] | 2004 Tax Year [Member] | 2006 Tax Year [Member] | 2007 Tax Year [Member] | 2007 Tax Year [Member] | 2007 Tax Year [Member] | 2006 through 2008 Tax Year [Member] | 2006 through 2008 Tax Year [Member] | 2006 through 2008 Tax Year [Member] | 2006 through 2010 Tax Year [Member] | 2009 Tax Year [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Brazil Tax Jurisdiction [Member] | Brazil Tax Jurisdiction [Member] | Malaysia Tax Jurisdiction [Member] | Mexico [Member] | Mexico [Member] | Mexico [Member] | Mexico [Member] | Brazil Tax Jurisdiction [Member] | Brazil Tax Jurisdiction [Member] | Mexico [Member] | Egypt [Member] | Egypt [Member] | Egypt [Member] | Egypt [Member] | Mexico [Member] | |||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | BRL | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||
Appeals | ||||||||||||||||||||||||||||
Income Tax Contingency [Line Items] | ||||||||||||||||||||||||||||
Amount of undistributed foreign earnings and profit | $2,400,000,000 | |||||||||||||||||||||||||||
Net operating loss carryforwards, or NOLs | 20,277,000 | 12,038,000 | 1,800,000 | |||||||||||||||||||||||||
Deferred tax asset relates to NOL carryforwards | 18,500,000 | |||||||||||||||||||||||||||
Valuation allowance of NOL | 20,277,000 | 7,321,000 | ||||||||||||||||||||||||||
Portion of operating loss carryforwards expected to be realized | 0 | |||||||||||||||||||||||||||
Deferred tax assets for foreign tax credits | 17,962,000 | 500,000 | 17,500,000 | |||||||||||||||||||||||||
Deferred tax asset for bareboat charter deductions | 21,898,000 | 21,900,000 | ||||||||||||||||||||||||||
Deferred tax asset for foreign contribution taxes | 5,345,000 | 5,749,000 | 5,300,000 | |||||||||||||||||||||||||
Net liability for uncertain tax positions | 57,116,000 | 90,921,000 | 67,150,000 | 62,936,000 | 4,900,000 | 6,300,000 | 55,400,000 | 82,600,000 | ||||||||||||||||||||
Net unrecognized tax benefits would affect the effective tax rate | 50,500,000 | 76,300,000 | 48,400,000 | |||||||||||||||||||||||||
Decrease in unrecognized tax benefit | 10,700,000 | |||||||||||||||||||||||||||
Total tax assessment including interest and penalty | 26,000,000 | 1,500,000 | 14,200,000 | 22,900,000 | 24,400,000 | 13,000,000 | 35,100,000 | |||||||||||||||||||||
Accrued liabilities related to income tax examination | 14,000,000 | 50,000,000 | 56,900,000 | |||||||||||||||||||||||||
Reversal of accrued interest on uncertain tax position | 3,500,000 | 2,700,000 | 2,600,000 | 1,500,000 | ||||||||||||||||||||||||
Reversal of accrued penalty on uncertain tax position | 4,400,000 | 5,300,000 | 1,100,000 | 200,000 | 600,000 | |||||||||||||||||||||||
Proposed increase to taxable income | 1,200,000,000 | |||||||||||||||||||||||||||
Current income tax expense due to settlement | 6,000,000 | |||||||||||||||||||||||||||
Reversal of uncertain tax positions due to settlement | 23,200,000 | |||||||||||||||||||||||||||
Income tax (expense) benefit | -128,180,000 | -225,554,000 | -197,604,000 | 17,200,000 | ||||||||||||||||||||||||
Number of open tax issues | 1 | |||||||||||||||||||||||||||
Reduction in uncertain tax positions related to statute of limitations expirations | 5,280,000 | 1,937,000 | 8,000,000 | 4,400,000 | 4,300,000 | |||||||||||||||||||||||
Net cash cost on settlement of tax liability | 3,700,000 | |||||||||||||||||||||||||||
Increase in uncertain tax position due to tax settlement | 13,200,000 | |||||||||||||||||||||||||||
Change in interest on uncertain tax positions | -5,283,000 | 5,758,000 | -1,902,000 | 5,000,000 | ||||||||||||||||||||||||
Change in penalties on uncertain tax positions | -22,175,000 | 38,136,000 | -787,000 | 2,700,000 | ||||||||||||||||||||||||
Tax expense increase (decrease) | ($27,509,000) | $22,000,000 |
Income_Taxes_Components_of_Inc
Income Taxes - Components of Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Federal - current | $66,843 | $40,045 | $173,061 |
State - current | -121 | 69 | 267 |
Foreign - current | 59,926 | 151,339 | 75,748 |
Total current | 126,648 | 191,453 | 249,076 |
Federal - deferred | -6,699 | 46,767 | -51,852 |
Foreign - deferred | 8,231 | -12,666 | 380 |
Total deferred | 1,532 | 34,101 | -51,472 |
Income tax expense | $128,180 | $225,554 | $197,604 |
Income_Taxes_Difference_Betwee
Income Taxes - Difference Between Actual Income Tax Expense and Tax Provision Computed by Applying Statutory Federal Income Tax Rate to Income Before Taxes (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income before income tax expense: | |||||||||||
U.S. | $288,080 | $537,635 | $512,733 | ||||||||
Foreign | 227,111 | 236,605 | 405,348 | ||||||||
Income before income tax expense | 153,270 | 81,639 | 112,603 | 167,679 | 180,195 | 131,565 | 256,301 | 206,179 | 515,191 | 774,240 | 918,081 |
Expected income tax expense at federal statutory rate | 180,317 | 270,984 | 321,328 | ||||||||
Foreign earnings of foreign subsidiaries (not taxed at the statutory federal income tax rate) net of related foreign taxes | -46,163 | -102,359 | -166,251 | ||||||||
Foreign earnings of foreign subsidiaries for which U.S. federal income taxes have been provided | 7,190 | 805 | 28,252 | ||||||||
Foreign taxes of domestic and foreign subsidiaries for which U.S. federal income taxes have also been provided | 38,358 | 45,428 | 35,722 | ||||||||
Foreign tax credits | -39,843 | -46,524 | -45,824 | ||||||||
Interest capitalized by foreign subsidiaries | -16,492 | -18,391 | -11,764 | ||||||||
Impact of American Taxpayer Relief Act of 2012 | -27,509 | ||||||||||
Uncertain tax positions | -47,964 | 66,085 | 6,325 | ||||||||
Amortization of deferred charges associated with intercompany rig sales to other tax jurisdictions | 44,301 | 30,894 | 31,276 | ||||||||
Net expense (benefit) in connection with resolutions of tax issues and adjustments relating to prior years | 7,775 | 4,804 | -2,152 | ||||||||
Other | 701 | 1,337 | 692 | ||||||||
Income tax expense | $128,180 | $225,554 | $197,604 |
Income_Taxes_Components_of_Def
Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Net operating loss carryforwards, or NOLs | $20,277 | $12,038 |
Foreign tax credits | 17,962 | |
Worker's compensation and other current accruals | 19,155 | 17,269 |
Bareboat charter deductions | 21,898 | |
Disputed receivables reserved | 2,438 | 3,516 |
Deferred compensation | 14,409 | 14,020 |
Foreign contribution taxes | 5,345 | 5,749 |
Mobilization | 1,673 | |
Nonqualified stock options and SARs | 10,316 | 9,584 |
Deferred deductions | 12,196 | 8,577 |
Interest -Uncertain Tax Positions | 1,011 | 1,008 |
Other | 2,555 | 1,714 |
Total deferred tax assets | 127,562 | 75,148 |
Valuation allowance for NOLs | -20,277 | -7,321 |
Valuation allowance for foreign tax credits | -516 | |
Valuation allowance for other deferred tax assets | -27,243 | |
Net deferred tax assets | 79,526 | 67,827 |
Deferred tax liabilities: | ||
Depreciation | -577,103 | -578,742 |
Mobilization | -10,655 | |
Unbilled revenue | -6,518 | -4,371 |
Undistributed earnings of foreign subsidiaries | -24 | -24 |
Other | -8 | -9 |
Total deferred tax liabilities | -594,308 | -583,146 |
Net deferred tax liability | ($514,782) | ($515,319) |
Income_Taxes_Components_of_Def1
Income Taxes - Components of Deferred Income Tax Assets and Liabilities (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Deferred tax asset on worker's compensation and other current accruals included in prepaid expenses and other current assets | $15,612 | $10,221 |
Income_Taxes_Summary_of_Change
Income Taxes - Summary of Changes in Valuation Allowance (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Valuation Allowance [Line Items] | ||||
Valuation allowance as of December 31 | $48,036 | $7,321 | $22,876 | $26,353 |
Foreign Tax Credits [Member] | ||||
Valuation Allowance [Line Items] | ||||
Change in valuation allowance | 516 | |||
Net Operating Losses [Member] | ||||
Valuation Allowance [Line Items] | ||||
Change in valuation allowance | 15,677 | 25 | 946 | |
Releases of Valuation Allowances in Various Jurisdictions [Member] | ||||
Valuation Allowance [Line Items] | ||||
Change in valuation allowance | -2,721 | -15,580 | -4,423 | |
Other Deferred Tax Assets [Member] | ||||
Valuation Allowance [Line Items] | ||||
Change in valuation allowance | $27,243 |
Income_Taxes_Tax_Benefits_of_T
Income Taxes - Tax Benefits of These Mexican NOL Carryforwards (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | $20,277 | $12,038 |
Mexico [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | 1,800 | |
2021 [Member] | Mexico [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | 200 | |
2022 [Member] | Mexico [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | 200 | |
2023 [Member] | Mexico [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | 800 | |
2025 [Member] | Mexico [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, or NOLs | $600 |
Income_Tax_Summary_of_Reconcil
Income Tax - Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Interest and Penalties (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Balance, beginning of period | ($90,921) | ($67,150) | ($62,936) |
Additions for current year tax positions | -5,813 | -1,724 | -3,837 |
Additions for prior year tax positions | -292 | -31,264 | -5,136 |
Reductions for prior year tax positions | 34,630 | 7,280 | 4,759 |
Reductions related to statute of limitation expirations | 5,280 | 1,937 | |
Balance, end of period | ($57,116) | ($90,921) | ($67,150) |
Income_Taxes_Schedule_of_Accru
Income Taxes - Schedule of Accrued Interest and Penalties (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Uncertain tax positions net, excluding interest and penalties | ($50,513) | ($76,303) |
Accrued interest on uncertain tax positions | -7,503 | -12,786 |
Accrued penalties on uncertain tax positions | -37,622 | -59,797 |
Uncertain tax positions net, including interest and penalties | ($95,638) | ($148,886) |
Income_Tax_Schedule_of_Interes
Income Tax - Schedule of Interest Expense and Penalties (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Net increase (decrease) in interest expense related to unrecognized tax positions | ($5,283) | $5,758 | ($1,902) |
Net increase (decrease) in penalties related to unrecognized tax positions | ($22,175) | $38,136 | ($787) |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Provision for contributions to the Supplemental Plan | $265,000 | $261,000 | $256,000 |
US Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, employer profit sharing contribution percent | 4.00% | 4.00% | 4.00% |
Vesting period for the profit sharing contribution | 3 years | ||
Defined contribution plan, cost recognized | 34,100,000 | 29,600,000 | 25,900,000 |
Defined Contribution Plan, Matching Contribution per employee by the company | 6.00% | 6.00% | 6.00% |
UK Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan, cost recognized | 5,000,000 | 3,500,000 | 2,700,000 |
UK Plan [Member] | U. K. Sector of North Sea [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Matching Contribution by the company | 10.00% | 10.00% | 10.00% |
UK Plan [Member] | U.K. Norwegian Sector of North Sea [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Matching Contribution by the company | 15.00% | 15.00% | 15.00% |
International Savings Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Contribution Plan, employer profit sharing contribution percent | 4.00% | 4.00% | 4.00% |
Defined contribution plan, cost recognized | $3,700,000 | $3,100,000 | $2,800,000 |
Defined Contribution Plan, Matching Contribution per employee by the company | 6.00% | 6.00% | 6.00% |
Segments_and_Geographic_Area_A2
Segments and Geographic Area Analysis - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 1 | ||
Number of countries with rigs | 8 | ||
Geographic Concentration Risk [Member] | Contract Drilling Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk benchmark | Individual countries that comprised 5% or more of our total contract drilling revenues | ||
Concentration risk percentage | 5.00% | 5.00% | 5.00% |
Geographic Concentration Risk [Member] | Long-lived Tangible Assets [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk benchmark | No other countries had more than a 5% concentration | ||
Concentration risk percentage | 5.00% | 5.00% | 5.00% |
Number of Countries | 0 | 0 | 0 |
Customer Concentration Risk [Member] | Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration risk benchmark | Contributed more than 10% of our total revenues | ||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Segments_and_Geographic_Area_A3
Segments and Geographic Area Analysis - Revenues from Contract Drilling Services by Equipment Type (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | $2,737,126 | $2,843,584 | $2,936,066 | ||||||||
Revenues related to reimbursable expenses | 77,545 | 76,837 | 50,442 | ||||||||
Total revenues | 675,321 | 737,682 | 692,244 | 709,424 | 726,497 | 706,165 | 758,018 | 729,741 | 2,814,671 | 2,920,421 | 2,986,508 |
Ultra-deepwater Semisubmersible [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | 987,565 | 854,515 | 902,793 | ||||||||
Deepwater [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | 494,247 | 617,080 | 597,694 | ||||||||
Mid-Water [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | 1,076,842 | 1,197,934 | 1,275,068 | ||||||||
Total Floaters [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | 2,558,654 | 2,669,529 | 2,775,555 | ||||||||
Jack-ups [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Contract drilling | $178,472 | $174,055 | $160,511 |
Segments_and_Geographic_Area_A4
Segments and Geographic Area Analysis - Revenues by Geographic Area Presented by Attributing Revenues to Individual Country (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | $675,321 | $737,682 | $692,244 | $709,424 | $726,497 | $706,165 | $758,018 | $729,741 | $2,814,671 | $2,920,421 | $2,986,508 |
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 418,095 | 330,471 | 173,961 | ||||||||
South America [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 1,088,796 | 1,219,287 | 1,427,927 | ||||||||
Europe/Africa/Mediterranean [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 558,367 | 731,888 | 662,995 | ||||||||
Australia/Asia [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 503,814 | 438,814 | 524,957 | ||||||||
Mexico [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 245,599 | 199,961 | 196,668 | ||||||||
International [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | $2,396,576 | $2,589,950 | $2,812,547 |
Segments_and_Geographic_Area_A5
Segments and Geographic Area Analysis - Individual Countries that Comprised 5% or More of Our Total Contract Drilling Revenues from Unaffiliated Customers (Detail) (Revenues [Member], Geographic Concentration Risk [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Brazil Tax Jurisdiction [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of total drilling revenues from unaffiliated customers | 31.00% | 38.30% | 46.10% |
United Kingdom [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of total drilling revenues from unaffiliated customers | 10.70% | 7.90% | 6.90% |
Mexico [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of total drilling revenues from unaffiliated customers | 8.70% | 6.90% | 6.60% |
Australia [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of total drilling revenues from unaffiliated customers | 6.40% | 3.20% | 6.70% |
Malaysia Tax Jurisdiction [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of total drilling revenues from unaffiliated customers | 5.50% | 2.90% | 4.00% |
Segments_and_Geographic_Area_A6
Segments and Geographic Area Analysis - Long-Lived Tangible Assets by Geographic Location (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | $6,945,953 | $5,467,227 | $4,864,972 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | 2,637,621 | 611,731 | 444,984 |
Australia/Asia/Middle East [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | 1,460,841 | 2,078,348 | 1,474,999 |
South America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | 1,445,832 | 1,690,976 | 1,827,247 |
Europe/Africa/Mediterranean [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | 1,128,857 | 793,097 | 799,194 |
Mexico [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | 272,802 | 293,075 | 318,548 |
International [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling and other property and equipment, net | $4,308,332 | $4,855,496 | $4,419,988 |
Segments_and_Geographic_Area_A7
Segments and Geographic Area Analysis - Long-Lived Tangible Assets by Geographic Location (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Construction work-in-progress | $439,206 | $1,668,211 | |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Construction work-in-progress | 1,900,000 | 339,100 | 167,400 |
Australia/Asia/Middle East [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Construction work-in-progress | 439,200 | 1,064,500 | 741,100 |
Singapore [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Construction work-in-progress | $400,800 | $264,600 |
Segments_and_Geographic_Area_A8
Segments and Geographic Area Analysis - Countries Where Parent Company had Material Concentration of Operating Assets (Detail) (Geographic Concentration Risk [Member], Long-lived Tangible Assets [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 5.00% | 5.00% | 5.00% |
United States [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 38.00% | 11.20% | 9.10% |
Brazil Tax Jurisdiction [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 20.30% | 30.20% | 37.30% |
Spain [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 8.10% | 1.20% | |
Vietnam [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 6.90% | 0.60% | 1.40% |
Malaysia Tax Jurisdiction [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 6.60% | 4.30% | 3.10% |
South Korea [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 6.30% | 19.50% | 15.20% |
Mexico [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 3.90% | 5.40% | 6.50% |
Angola [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 6.30% | ||
Indonesia [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 5.20% | 6.80% | |
Republic of Congo [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of long-lived tangible assets | 7.40% | ||
Singapore [Member] | |||
Entity Wide Disclosure On Geographic Areas Countries Where Parent Company Had Material Concentration Of Operating Assets [Line Items] | |||
Percentage of material concentration of operating assets | 8.20% | 1.80% |
Segments_and_Geographic_Area_A9
Segments and Geographic Area Analysis - Revenues from Major Customers that Contributed More than 10% of Total Revenues (Detail) (Revenues [Member], Customer Concentration Risk [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue, Major Customer [Line Items] | |||
Percentage of revenues from major customers | 10.00% | 10.00% | 10.00% |
Petrobras Brasileiro S.A. [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of revenues from major customers | 31.90% | 33.60% | 33.30% |
OGX Petroleo e Gas Ltda. [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of revenues from major customers | 2.40% | 12.50% |
Unaudited_Quarterly_Financial_2
Unaudited Quarterly Financial Data - Unaudited Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Revenues | $675,321 | $737,682 | $692,244 | $709,424 | $726,497 | $706,165 | $758,018 | $729,741 | $2,814,671 | $2,920,421 | $2,986,508 |
Operating income | 162,103 | 90,416 | 133,766 | 186,277 | 187,669 | 137,352 | 262,859 | 213,726 | 572,562 | 801,606 | 962,378 |
Income before income tax expense | 153,270 | 81,639 | 112,603 | 167,679 | 180,195 | 131,565 | 256,301 | 206,179 | 515,191 | 774,240 | 918,081 |
Net income | $98,843 | $52,645 | $89,713 | $145,810 | $92,615 | $94,748 | $185,334 | $175,989 | $387,011 | $548,686 | $720,477 |
Net income per share, basic and diluted | $0.72 | $0.38 | $0.65 | $1.05 | $0.67 | $0.68 | $1.33 | $1.27 |