Seadrill Limited · NYSE:SDRL
Seadrill — Debt Investor Presentation (January 2017)
61 slides from Seadrill's debt investor presentation, Jan 31, 2017
Slide 1: Seadrill Limited Presentation to Bondholders
Seadrill Limited Presentation to Bondholders Strictly private & confidential ‘Subject to the disclosures, assumptions and qualifications set out in this presentation ‘including, without limitation, the “Important Disclosures” set forth on page 2 09 December 2016
Slide 2: Disclaimer
Disclaimer Seadnill \We have prepared this dacument solely for informational purposes. You should not defintely rely upon itor use o form the defintve basis for any decison, Contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. You and your directors, offi
Slide 3: Business Plan; Recapitalisation Plan Overview; Timeline and Next Steps
Business Plan Recapitalisation Plan Overview Group Structure Before and After Recapitalisation Timeline and Next Steps Appendix ‘Stacy private & confidential
Slide 4: Business Plan
Business Plan ‘Sic private & confidential 4
Slide 5: Basis of Preparation
Basis of Preparation Seadnill = Our five-year forecast (the “Business Plan”) is the foundation of the Recapitalisation Plan = To assist us in preparing the Business Plan, we commissioned various reports from third parties on the offshore drilling market to validate our dayrate and utilisation assump
Slide 6: Dayrate and Utilisation
Dayrate and Utilisatior * The Business Plan projections are developed on (gay m the following dayrate and utilisation assumptions 59 er 2, 100 7 = The dayrate assumptions are utilised after ced a existing contracts roll-off, and are equivalent 300 s 60 within ri e and entity-to-entit ig typ ity-to-e
Slide 7: Opex
Opex Seadnill = Operating costs of contracted rigs assumed to increase at a rate of 3% p.a. = Rigs rollover operating cost including G&A assumption for: 1) Floaters “ > 2017 = $145k/d > 2018: +4% = $150k/d > 2019: +4% = $155k/d > 2020: +8% = $166k/d 2) HE Jackups “) > 2017-2020:= $150k/d 2) BE Jacku
Slide 8: Other Business Plan Assumptions
Other Business Plan Assumptions * Cold stacked (floaters and jack-ups both at $10k / day) with no long-term maintenance or Non-Working Fleet Assumption capelempendtiae Reactivation Fees * Estimated reactivation fees of $30mm for floaters and $10mm for jack-ups Working Capital Reserve + $50mm working
Slide 9: Financing Case — Key Metrics
Financing Case — Key Metrics Unlevered Free Cash Flow (sm) 1.500 4.000 ' ee _ 2016 2020 Revenue Cash EBITDA“) (smm) (mm) 3,500 2,000 3,000 1,569 2,500 2,000 1,500 2 1.867 41,000 500 ° 216 «= 2017, 2018. 2016 = 2017,-—= 018-209-2020
Slide 10: Financing Case — Operating Cash Flow Overview
Financing Case — Operating Cash Flow Overview Seadnill Summary Consolidated Operating Cash Flows (s ions) 2016 201 2018 Contracted Revenues © $2820 sista $722 $357 Assumed Revenues - 232 1,322 2,364 3,036 Operating Expenditures (1,033) (809) (1,066) (1,219) (1,260) GBA Expenses 220) 220) 220) 220) 2
Slide 11: Recapitalisation Plan Overview
Recapitalisation Plan Overview =m ‘Stacy private & confidential "
Slide 12: Current Group Structure and Liabilities
Current Group Structure and Liabilities Consolidated Entities ‘Guarantees and Contingent Liabities + NADL; $1.1bn bank debt, $171mm NOK bond + Sevan: $1.08" Seadrill Limited Secured Debt: $6.7bn, (ow at Seadrill Limited: $4.4bn) Unsecured bonds:$2.3bn (0'w at Seadrill Limited: $1.7bn) ‘Seabras Sapur
Slide 13: Group Liabilities to Be Addressed
Group Liabilities to Be Addressed Liat ‘Secured Debt ‘Seadril 4393 NADL 1.075 ‘Secured Bank Debt Sevan 960 ‘40D 246 soup 640 Ship Finance 08 Total Secured Debt $8,242 Unsecured Debt ‘Seadril USD Bonds 4.321 eats: ‘Seadril and NADL NOK / SEX Bonds 576 NADL.USD Bond 413 Total Bonds 323310 ‘otal Secure
Slide 14: Recapitalisation Plan Overview
Recapitalisation Plan Overview * Matuity Extension: c 5 years extension to period from Jun-21 to Deo 23, ‘+ Amotisation Extension: 5 year extension of profile (¢ $360 MM savings pa) arts ‘+ Undravm ROF: Cancelled and replaced with $500mm amortisation conversion election at option of the Company ‘+ M
Slide 15: Financing Case — Summary Financials
Financing Case — Operating Cash Flow Overview Seadnill Summary Financials (Sin millions) 2016 2017 2018 2019 2020 Unlevered FCF $1,268 $594 $196 $680 $959 Cash Interest (462) (420) 79) 354) 632) Levered FOF $806 S174 ($183) $926 $626 Bank Amortization @10) 21) 21) 21) ea Finance Lease Payments 187)
Slide 16: Liquidity Profile
Liquidity Profile Liquidity Profile before Recapitalisation Plan Liquidity Profile after Recapitalisation Plan $2,000 3.000 $1,000 4 2500 z H 5 1.00) | 1 au | = (62,000) | © ese “TT *\ mony 1,000 amy Na ($6,000) 500 $k = (87,000) | ° SPESSSISSP RESIS SIPIP mee Min. Liquic it ie === Min Ligusty Requr
Slide 17: Maturity And Amortisation Profile
Maturity And Amortisation Profile + The Recapitalisation Plan addresses our refinancing risk by re-profiling our amortisation payments and maturities Maturity Profile before Recapitalisation Plan Maturity Profile after Recapitalisation Plan Ingmm Inmm 3500 3.000 $3128 3000 aon $2260 2800 soz ‘ 2,000
Slide 18: Leverage Profile
Leverage Profile age Trajectory Leverage Profile Net Debt / EBITDA, 140 120% 115% 2 5a Net Debt / EBITDA (x) 2 2 40x 20x ox 2016 2017-2018 2019 ex 51x $12,000 $8,000 ‘$6,000 $4,000 $2,000 Net leverage: 5.4x ‘Cash: $2.1bn $10508 Net leverage: 5.1x Cash $0.7en Nax $8,802 $1,000 o.5x 15 $1,920 08 3.8%
Slide 19: Plan Bridges Seadrill To a Recovery
Plan Bridges Seadrill To a Recovery (nm (en) $2,088 bod 200 sus00 ‘$1,000 ba nana ‘$266 oo Li i zie tor ove 201 fom 2021 wz BD SPrernsacion SFomsranacton Amortisation After Refinancing venants (smn) Covenants ETT ETD 1200 <A7 <46De «400 Sane) > 1.20 > 1.50x 1000 00 Nettovenge thie aa = Covenant Head
Slide 20: Key Benefits of Consensual Recapitalisation Plan for Bondholders
Key Benefits of Consensual Recapitalisation Plan for Bondholders Seadnill = Today, Bonds are unsecured liabilities of Seadrill Limited ranking pari passu with a significant amount of unsecured and contingent liabilities = The Recapitalisation Plan delivers: i. Significant amount of new money ii, Ext
Slide 21: Group Structure Before and After Recapitalisation
Group Structure Before and After Recapitalisation =m ‘Stacy private & confidential a
Slide 22: Before Recapitalisation
Before Recapitalisation Seadnill Francia! Labi + Sena tcee _—_—_—_____—_] + Sener Sere rd atte any Sey con = = Lx Lime + NOXISEKNADL Bod any dene cam) ee com set ty rs 1+ Derivative contracts (issued or guaranteed = be — yee) + Other unsecured clams oo a om i seo ‘seotras oom: cnmmns | |emernaceonnl
Slide 23: After Recapitalisation
After Recapitalisation Flcanca Ladies + ends + Sega rest Fests any ‘tony om) + Now Sec ten ny ‘steer com) ome eae oe eae o comonne | |e Seems = a + Now Seca tesoenet tom nico srerepse) cnr! Fal Bl aad oss i aoe | | caccon] | encore oo LE ti] Camenmem] | ° ' ea sare Pan Estes Sn Procents. soos ret Fs
Slide 24: Timeline and Next Steps
Timeline and Next Steps qu ‘Stacy pnvate & confidential 24
Slide 25: Agreement Required In January
Agreement Required In January An in-principle agreement with all key stakeholders will be required in January to have sufficient time to solicit support for the transaction, agree on documentation and implement the plan before the Long Stop Date (30 April 2017) Key documents that must be agreed are:
Slide 26: Illustrative Implementation Timeline
Illustrative Implementation Timeline Mid-February January ‘Sign Lockup Agreement + Agree in Principle to and Initiate Solctations Initiate: Detailed Restructuring for + Outot-Court Term Sheets + Outof-Court Consents; Transaction; or Aga + Sign New-Money + Scheme Consonts;and + In-Court Post Long Sto
Slide 27: Appendix Materials
Appendix Materials qu ‘Stacy pnvate & confidential a
Slide 28: Table of Contents
Table of Contents ppendix ix A: Term Sheets > Summary of Terms for Secured Credit Facilities > Summary of Terms for New Secured Notes > Summary of Terms for Bonds > > Summary Terms for Ship Finance Lease Agreements ‘Summary Terms for Non-Consolidated Entities and Financial Guarantees : Cash Pool Mec
Slide 29: Appendix A: Term Sheets
Appendix A: Term Sheets ‘Stacy private & confidential 2
Slide 30: Summary of Terms with Secured Credit Facilities
Summary of Terms with Secured Credit Facilities ‘Stacy private & confidential 2”
Slide 31: Secured Credit Facilities
Secured Credit Facilities Seadnill Summary of Proposed Tem f+ December 2016 to August 2020 June 2021 to December 2023 '+ Reduced on basis ot near paysown over repayment period extended by § years | uncer Request 1 no change o number of exsing srecued amortisation payments ||” Reshesd on bag of ote;
Slide 32: Secured Credit Facilities (cont.)
Secured Credit Facilities (cont.) Seadrill + Reset he Leverage Rao covenant in each Group Fact Agreement so that [» Minmum Liguty Covenant tobe satsted at all times and tobe tested quarteriy > 60x upto 31 December 2016 mneiased cr a > 66x tom 31 March 2017 to an including 30 June 2017 Covenants > 45
Slide 33: Financial Covenants Summary (included)
Financial Covenants Summary 21 (ineluded) Minimum Ligulcty ‘sain or tet argo fetnancng sesng soe ‘Soom Pareanee i. guy regurement of $525/000m within RCo ants Tobe eatafed at tines andto be testa cn quartets, ‘Aca win igo ad ts Subsianis,cing cash Rina Rgco emcees sles proceeds ew asset) ‘tren evar
Slide 34: Amortisation Conversion Election Mechanism
Amortisation Conversion Election Mechanism Seadnill Terms ‘Summary Description The Company can choose to reduce amortisation payments by converting them into a new secured tranche with bullet maturity coterminous with the respective facility agreement ‘Amount extended to be allocated on a pro rata b
Slide 35: Summary of Terms with New Secured Notes
Summary of Terms with New Secured Notes ‘Stacy pnvate & confidential s
Slide 36: New Secured Notes
New Secured Notes Seadnill + tHce + Seacil Limited and second ranking guarantee trom Rigco + Company seeking to rage 1.280mm (subject to market demand) wth a commitment fo rage @ minimum o 000mm * Opton to purchase at par wih net proceeds of ales of assets over which New Secured Notes have rst ranki
Slide 37: New Secured Notes and Banks Security Package
New Secured Notes and Banks Security Package Seadrill Bank Ranking ZRarking Seu 1+ Saag UK id hares (100% SORL Us the) v + Seabras Spur Heléco Gh shares 50% ret SORL Lid take) + Sear SapuaPartpacons ia hares 0% nee SORL ° SDRL Lta_] | = Actor Unies nares 40% SORL Lt ta) 1 New Bua Eres (takes recy nd
Slide 38: Banks and NSN Intercreditor Principles
Banks and NSN Intercreditor P Seadnill + Bdetng secuty under relevant Secured Cred Facies + Securt tobe granted in favour ofthe Bank Finance Partes under the respectve Secured Cre Facies over any intercompany laity owed fo RigCo by a subschary ot RCo whose shares are subject existing secur Under the
Slide 39: Banks and NSN Intercreditor Principles (cont.)
Banks and NSN Intercreditor Principles (cont.) Seadrill ment of shared secuty and New Secured Notes fet ranking secur (nt bidding by New Secured Notehoie + No firvae or one nterretor protections to estiet enforcement of secuy by Lenders below RigCo. Ne resictons on non-cash consideration creat bang
Slide 40: Summary of Terms with Bonds
Summary of Terms with Bonds ‘Stacy pnvate & confidential 40
Slide 41: Bonds Terms
Seadnill '+ Al Sesct Linted and Seas Linted guarantees bonds exchanged eto four equal annual ranches of naw bonds sued by Sead Limes (the "New Seacril fonds") + For consenting NADL USD Bondholders, £0% recovery on claim against NADL inthe form of New Seas Bonds + Al New Sescil Gond to be denominated
Slide 42: Summary of Terms with Ship Finance Lease Agreements
Summary of Terms with Ship Finance Lease Agreements ‘Strcty private & confidential a
Slide 43: Ship Finance Lease Agreements
Ship Finance Lease Agreements Seadnill concessions are designed to be similar in size and structure to the to 14.June 2024 Secured Credit Facilities L Linus Ltd (West Linus): Unchanged at 25 May 2029 concessions L Hercules Ld, (West Hercules): Moved from 6 November 2023 to 6 June 2024 SFL Deepwater
Slide 44: Summary of Terms with Non-Consolidated Entities and Financial Guarantees
Summary of Terms with Non-Consolidated Entities and Financial Guarantees Strictly private & confidential “4
Slide 45: Non-Consolidated Guarantees and Contingent Liabilities
Non-Consolidated Guarantees and Contingen Liabilities Seadnill Description of Amendments Required from Counterparties a Somnprchensive approach to addressing + 60% hedge rato for next 5 years plus blending existing MTM on existing IRS into IRS swap unsecured liabilities rates going forward + Cross c
Slide 46: Page intentionally left blank
Page intentionally left blank ‘Stacy private & confidential 6
Slide 47: Appendix B: Cash Pool Mechanics
Appendix B: Cash Pool Mechanics ju ‘Stcty private & confidential a
Slide 48: Cash Pooling Mechanics On Closing
Cash Pooling Mechanics On Closing Desc * "Consolidated Cash Balance” to be equal to cash held at Seadril Limited or in any of its consolidated subsidiaries, including NADL, Sevan and AOD, but excluding Ship Finance * “Available Closing Cash" to be equal to Consolidated Cash Balance at closing, less
Slide 49: Cash Pooling Mechanics After Recapitalisation
Cash Pooling Mechanics After Recapitalisation Rigo Net Leverage < 40x. RigGo Net Leverage > 4.0x_ *RigCo Minimum Liquty Requirement of $500mm to be satisfied at al times * No restrictions to cash movements within Rigo group “+ Cash upstream to IHCo subject to Rigo Restricted Payments Membrane: > Jun
Slide 50: Appendix C: Other Information
Appendix C: Other Information ‘Stcty private & confidential 0
Slide 51: Amortisation and Maturity Profile as of Q3
Amortisation and Maturity Profile as of Q3 2 Seadnill sum 2000 sara 11500 oo 11000 56 a ew oe a | a 7 2016 2017 2018 2019 ‘sank Amortsaton Bank Galleon "= Bond Bult (SORL Guararived) "Bond Butet (Non-guaranteed) 48 654 500 500 a3 321 320 260 E 216 203 193 Ca ° Fae ae a @ oo a | ar @ a a) a a oo 2020
Slide 52: Bank Facilities, Bonds and SLBs
Bank Facilities, Bonds and SLBs Seadrill weasaenatiniee ag apt Se be Ld Noes thar Oo hr ate Power eqs ing ts 10 amt? Sipe nrat ‘ea Sa
Slide 53: Other Seadrill Limited Contingent Liabilities
Other Seadrill Limited Contingent Liabilities Nam ‘Amount (mm) Newbuild Obligations to the Shipyards with $1,896 ci Li Se + Potential liability for delivery payments of newbuilds, as reported in Q2 2016 Report Newuld Obigations tothe Shipyards with on no recourse to Seadrill Limited : Ship Finance L
Slide 54: Project Eagle
Project Eagle MOELIS & COMPANY Bondholder Informal Group Restructuring Proposal 15 December 2016
Slide 55: Disclaimer
Disclaimer MOBLIS {COMPANY ‘Moti & Company’ UK LLP ("Mocs prepare thi presentation based on a ccmbinaton of public and non-public availble information and soley forthe purpone of the worcbeing conduct under the engagement letter dated 19 October 2016 eth Akin Gump Straus Haver & Feld LLP "Akin Gum),
Slide 56: Bondholder Informal Group Restructuring Proposal — Introduction
Bondholder Informal Group Restructuring Proposal Introduction MOBLIS {COMPANY The Informal Group of Seadill Bondholders (“Informal Group”) wishes to work withthe Board of Seadrill Limited (“SDRL” or the “Company”, Hemen as a 1ajor stakeholder and Senior Secured Creditors (or “the Banks”) to lever a
Slide 57: Informal Group's Perspective on Comprehensive Solution
Bondholder Informal Group Restructuring Proposal The Informal Group's Perspecti eon Comprehensive Solution PERSPECTIVE ON RECAPITALISATION PLAN DONDHOLDER CONTRIBUTION UNDER THE INFORMAL GROUP PROPOSAL DELEVERAGING IMPACT OF INFORMAL GROUP ‘PROPOSAL Proposed introduction of NSN senior tothe Bonds to
Slide 58: Informal Group's Perspective on Comprehensive Solution (cont'd)
Bondholder Informal Group Restructuring Proposal The Informal Group’s Perspective on Comprehensive Solution (cont'd) MOBLIS {COMPANY ' In consideration for the substantial contributions being made by Bondholders in terms of deleveragi BANKS liquidity the Informal Group requires the Banks to agree to
Slide 59: Overview of Proposal
Bondholder Informal Group Restructuring Proposal Overview of Proposal Moris KcoMPANY * New capital and iguiity is injected inthe form of $700m of NSN at IHCo * Current Bondholders contribute the fll amount ofthe NSN new money investment Informal Group, Hemen and other large Bondholders would agree t
Slide 60: Overview of Proposal (cont'd)
Bondholder Informal Group Restructuring Proposal Overview of Proposal (cont'd) fo) (2) {3} MOBLIS {COMPANY ‘Current shareholders allocated a nominal amount oF out of the money warrants post-estructuring, ‘As por the Recapitalisation Pan ‘Secured Credit Fae fs maturities extended for an average of 5
Slide 61: Overview of Proposal (cont'd)
Bondholder Informal Group Restructuring Proposal Overview of Proposal (cont'd) MonLis RcoMPANY COD = sormat Group to approve «comprehensive solution for derivatives customer and performance guarantees, newb abilities and financial OF _Buarantes tobe agree with relevant counterparties, inclatng intr