Seadrill Limited · NYSE:SDRL
Seadrill — Q2 2016 Earnings Presentation
25 slides from Seadrill's earnings presentation, Aug 25, 2016
Slide 1: Q2 2016 Results
Q2 2016 Results August 25, 2016 Seadril
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company’s plans, strategies, business prospects, changes and trends in its business and the markets in which it oper
Slide 3: Financial Performance, Market Outlook, Summary and Q&A
6 Financial Performance 6 Market Outlook 6 Summary and Q&A Seadnill
Slide 4: Q2 2016 highlights: operations, commercial, costs, newbuilds
Operations Record operational uptime Seadrill Group economic utilisation of 99% Commercial Net backlog improvement of $21 million Costs Vessel and rig operating costs down $42 million compared to Q1 Newbuilds No scheduled deliveries in 2016 Continued progress regarding additional
Slide 5: Operational highlights: Q2 2016
Operational highlights: Q2 2016 Current backlog 2000 1500 Current order backlog of $3.6 billion $ million 1000 $8.0 billion for Seadrill Group 500 0 2016 2017 2018 2019+ Economic utilization (floater fleet) 100 95 90 Safe and efficient operations Utilization % 85 98% economic utilization for
Slide 6: Financial Performance
Seadnill Financial Performance
Slide 7: Revenue & EBITDA bridge
Revenue & EBITDA* bridge Revenue • Volume: Full quarter of operations 950 for the West Phoenix and the 925 commencement of operations for 900 the West Eclipse and Sevan 875 Driller 850 825 • Dayrates: Reduced dayrate on 800 the West Tellus 775 750 • Utilization: Improved uptime 1Q16 Volume Dayrates
Slide 8: Balance sheet main movements
Balance sheet main movements Quarter Mai over quarter June 30, March 31, Change 2016 2016 Cash and cash equivalents 1,287 1,092 195 Marketable securities – current 141 286 (145) Amount due from related party– current 470 585 (115) Amount due from related party– non current 550 463 87 Current portion
Slide 9: Q2 cash balance
Q2 cash balance $1.3 billion in cash and cash equivalents at quarter end Continue to cut costs to match lower revenue environment Headcount reductions Opex reductions No newbuild instalments or rig deliveries in 2016 9
Slide 10: Financing update
Financing update Near term stability created with maturity extensions and covenant waivers Longer term solution to bridge to a recovery Milestones met as they have become due Expect to conclude by year end 10
Slide 11: Q3 2016 and FY 2016 guidance
Q3 2016 guidance EBITDA* is forecasted to be around $380 million, based on forecasted Operating Income of around $183 million. FY 2016 guidance EBITDA* is forecasted to be around $1.8 billion, based on forecasted Operating Income of around $1.0 billion. 11
Slide 12: Market Outlook
Seadnill a CCEA NEPTUNE 12
Slide 13: Summary: record operating quarter, cost reductions, financing on track
Record operating quarter Cost reductions flowing through Managing yard commitments Financing plans on track 13
Slide 14: 14
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Slide 15: Appendix: Seadrill Limited Financials
Appendix: Seadrill Limited Financials 14
Slide 16: Appendix – Non-GAAP Financial Measures
Appendix – Non-GAAP Financial Measures * EBITDA is defined as 'Earnings Before Interest, Tax, Depreciation and Amortization' and has been calculated by taking operating income plus depreciation and amortization but excluding gains or losses on disposals and impairment charges against goodwill. Conti
Slide 17: Financial Performance Highlights
Financial Performance Highlights Q2 2016 Q1 2016 Change % Change Total operating revenue $868 $891 ($23) (3%) Contingent consideration realized $5 $5 $— —% Total operating expenses $509 $568 ($59) (10%) Net operating income $364 $328 $36 11% EBITDA $557 $528 $29 5% 17
Slide 18: Balance Sheet Summary
Balance Sheet Summary June 30, March 31, Change %Change 2016 2016 • Total assets of $23,016 Total Current Assets $3,056 $3,141 ($85) (3%) million as at June 30, Non-current assets —% 2016 Investment in associated $2,656 $2,583 $73 3% companies Newbuildings $1,507 $1,496 $11 1% • Total net interest b
Slide 19: Operating Income - 2Q16
Operating Income - 2Q16 Unaudited accounts in USD millions Total Floaters Jack-ups Other Contract revenues 809 577 232 — Reimbursable revenues 16 14 2 — Other revenues 43 19 — 24 Total operating revenues 868 610 234 24 Contingent consideration realized 5 5 — — Vessel and rig operating expenses 248 1
Slide 20: Operating Income - Floaters
Operating Income - Floaters Unaudited accounts in USD millions 2Q16 1Q16 4Q15 3Q15 Total operating revenues 610 616 644 647 Loss on disposals* — — (89) (80) Contingent consideration realized 5 5 19 19 Vessel and rig operating expenses 152 181 235 233 Reimbursable expenses 13 14 29 24 Depreciation an
Slide 21: Operating Income – Jack-up Rigs
Operating Income – Jack-up Rigs Unaudited accounts in USD millions 2Q16 1Q16 4Q15 3Q15 Total operating revenues 234 246 282 306 Loss on disposals — — (4) (3) Vessel and rig operating expenses 75 88 107 117 Reimbursable expenses 1 4 — 4 Depreciation and amortization 51 52 50 51 General and administra
Slide 22: Operating Income – Total Seadrill Limited
Operating Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q16 1Q16 4Q15 3Q15 Total operating revenues 868 891 959 985 Loss on sale of assets* — — (93) (82) Contingent consideration realized 5 5 19 19 Vessel and rig operating expenses 248 290 369 374 Reimbursable expenses 14 18 29
Slide 23: Net Income – Total Seadrill Limited
Net Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q16 1Q16 4Q15 3Q15 Net operating income/(loss) 364 328 223 (291) Financial items and other income Interest income 16 20 18 15 Interest expense (105) (102) (98) (105) Loss on impairment of investments — (24) — (1,274) Share in re
Slide 24: Balance Sheet - Assets
Balance Sheet - Assets Unaudited accounts in USD millions June 30, March 31, 2016 December 31, 2016 2015 Current assets Cash and cash equivalents 1,287 1,092 1,044 Restricted cash 96 104 50 Marketable securities 141 286 96 Accounts receivables, net 727 710 718 Other current assets 805 949 1,034 Tota
Slide 25: Balance Sheet – Liabilities & Shareholder’s Equity
Balance Sheet – Liabilities & Shareholder’s Equity Unaudited accounts in USD millions June 30, March 31, 2016 December 31, 2016 2015 Current liabilities Current portion of long-term debt 2,347 1,278 1,489 Trade accounts payable 158 152 141 Other current liabilities 1,810 1,804 1,836 Total current li