Seadrill(US:SDRL)2024-03-26 22:46Debt Issuance and Refinancing - Seadrill issued $500 million in 8.375% Senior Secured Second Lien Notes due 2030 on July 27, 2023, followed by an additional $75 million issuance on August 8, 2023, to refinance existing secured debt[1]. - The company incurred approximately $26 million in issuance costs related to the refinancing of its debt[1]. - The new Senior Secured Revolving Credit Facility allows for borrowings of up to $225 million, with an accordion feature to increase this limit by an additional $100 million[1]. Financial Projections and Performance - The total operating revenues for the pro forma combined statement for the year ended December 31, 2023, are projected to be $1,580 million, up from $1,502 million for Seadrill's historical results[5]. - Operating profit for the pro forma combined entity is estimated at $323 million, compared to $329 million for Seadrill's historical results[5]. - The interest expense for the pro forma combined entity is projected to be $58 million, down from $59 million in Seadrill's historical results[5]. - The basic earnings per share (EPS) for continuing operations is projected to be $3.71 for the pro forma combined entity, compared to $3.82 for Seadrill's historical results[5]. Merger and Acquisition Details - The merger with Aquadrill on April 3, 2023, resulted in Seadrill acquiring 29.9 million common shares and $1 million in cash, with a total consideration of $30 million settled by tax withholding[1]. - The pro forma financial information assumes that the completed transactions occurred on January 1, 2023, reflecting their impacts in the historical consolidated balance sheet as of December 31, 2023[2]. - Seadrill issued 8 million shares to Aquadrill shareholders, impacting the weighted average shares outstanding[13]. - Seadrill recognized the effects of the merger in its historical financial statements, including adjustments to shares outstanding since January 1, 2023[12]. Adjustments and Depreciation - The pro forma adjustments include a depreciation and amortization increase of $11 million due to the merger, reflecting preliminary asset values[5][11]. - The total adjustment to depreciation and amortization is $(11) million, reflecting various adjustments including a $70 million depreciation expense for fair value of drilling units[12]. - The estimated remaining useful lives for the acquired drilling units range from 15 to 21 years, affecting depreciation calculations[12]. - The amortization expense for unfavorable contract liabilities is $42 million, contributing to the overall financial adjustments[12]. Interest Expense Adjustments - The removal of historical Initial Term Loan and Initial Second Lien interest expenses resulted in a total adjustment to interest expense of $1 million[15]. - Interest expense adjustments include a $12 million removal of Initial Term Loan interest expense and a $16 million removal of Initial Second Lien interest expense[15]. - The total adjustment to interest expense includes a $28 million expense related to Second Lien Notes[15]. - The dilutive impact of Seadrill's pre-transaction convertible bond is approximately 3% of the fully diluted pro forma common shares outstanding[13].