SUPPLEMENTAL FINANCIAL INFORMATION
Consolidated Balance Sheet Information
Accounts receivable, net, as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | | |
| | 2013 | | 2012 |
Trade | | $ | 869.8 |
| | $ | 812.4 |
|
Other | | 14.3 |
| | 18.2 |
|
| | 884.1 |
| | 830.6 |
|
Allowance for doubtful accounts | | (28.4 | ) | | (19.2 | ) |
| | $ | 855.7 |
| | $ | 811.4 |
|
The liquidity of OGX Petróleo e Gás Participações S.A. ("OGX") deteriorated during the second half of 2013, and on October 30, 2013, OGX filed for bankruptcy protection in Brazil. We did not recognize revenue for drilling services provided to OGX during the second half of 2013 as we concluded collectability of these amounts was not reasonably assured. Additionally, we recorded a $14.6 million provision for doubtful accounts during the year ended December 31, 2013 for receivables related to drilling services provided through June 30, 2013. Our receivables with OGX were fully reserved on our consolidated balance sheet as of December 31, 2013.
Other current assets as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | | |
| | 2013 | | 2012 |
Inventory | | $ | 256.4 |
| | $ | 207.8 |
|
Prepaid taxes | | 88.1 |
| | 62.2 |
|
Short-term investments | | 50.0 |
| | 50.0 |
|
Deferred costs | | 47.4 |
| | 46.9 |
|
Deferred tax assets | | 23.1 |
| | 14.6 |
|
Prepaid expenses | | 18.5 |
| | 20.3 |
|
Derivative assets | | 11.6 |
| | 5.2 |
|
Assets held for sale | | 8.6 |
| | 14.2 |
|
Other | | 10.2 |
| | 4.2 |
|
| | $ | 513.9 |
| | $ | 425.4 |
|
Other assets, net, as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | | |
| | 2013 | | 2012 |
Intangible assets | | $ | 83.8 |
| | $ | 143.3 |
|
Deferred costs | | 59.1 |
| | 45.2 |
|
Unbilled receivables | | 51.9 |
| | 77.1 |
|
Prepaid taxes on intercompany transfers of property | | 50.2 |
| | 58.3 |
|
Supplemental executive retirement plan assets | | 37.7 |
| | 29.8 |
|
Warranty and other claim receivables | | 30.6 |
| | 30.6 |
|
Deferred tax assets | | 25.2 |
| | 19.3 |
|
Wreckage and debris removal receivables | | .5 |
| | 13.2 |
|
Other | | 13.7 |
| | 5.0 |
|
| | $ | 352.7 |
| | $ | 421.8 |
|
Accrued liabilities and other as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | | |
| | 2013 | | 2012 |
Personnel costs | | $ | 242.0 |
| | $ | 231.1 |
|
Deferred revenue | | 169.8 |
| | 146.9 |
|
Taxes | | 84.2 |
| | 86.9 |
|
Accrued interest | | 68.0 |
| | 67.9 |
|
Advance payment received on sale of assets | | 33.0 |
| | — |
|
Customer pre-payments | | 20.0 |
| | — |
|
Wreckage and debris removal | | — |
| | 9.0 |
|
Other | | 41.7 |
| | 42.6 |
|
| | $ | 658.7 |
| | $ | 584.4 |
|
Other liabilities as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | | |
| | 2013 | | 2012 |
Deferred revenue | | $ | 217.6 |
| | $ | 224.5 |
|
Unrecognized tax benefits (inclusive of interest and penalties)
| | 148.0 |
| | 129.6 |
|
Intangible liabilities | | 69.1 |
| | 118.0 |
|
Supplemental executive retirement plan liabilities | | 40.5 |
| | 33.3 |
|
Personnel costs | | 37.2 |
| | 31.6 |
|
Other | | 33.3 |
| | 36.4 |
|
| | $ | 545.7 |
| | $ | 573.4 |
|
Accumulated other comprehensive income as of December 31, 2013 and 2012 consisted of the following (in millions):
|
| | | | | | | |
| 2013 | | 2012 |
Derivative Instruments | $ | 20.6 |
| | $ | 24.4 |
|
Other | (2.4 | ) | | (4.3 | ) |
| $ | 18.2 |
| | $ | 20.1 |
|
Consolidated Statement of Income Information
Repair and maintenance expense related to continuing operations for each of the years in the three-year period ended December 31, 2013 was as follows (in millions):
|
| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Repair and maintenance expense | | $ | 374.4 |
| | $ | 344.9 |
| | $ | 263.7 |
|
Consolidated Statement of Cash Flows Information
Net cash provided by operating activities of continuing operations attributable to the net change in operating assets and liabilities for each of the years in the three-year period ended December 31, 2013 was as follows (in millions):
|
| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
(Increase) decrease in other assets | | $ | (80.7 | ) | | $ | 80.1 |
| | $ | (14.5 | ) |
(Decrease) increase in liabilities | | (22.9 | ) | | 319.0 |
| | (13.2 | ) |
Decrease (increase) in accounts receivable | | 1.1 |
| | 28.1 |
| | (244.8 | ) |
| | $ | (102.5 | ) | | $ | 427.2 |
| | $ | (272.5 | ) |
Cash paid for interest and income taxes for each of the years in the three-year period ended December 31, 2013 was as follows (in millions):
|
| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Interest, net of amounts capitalized | | $ | 182.2 |
| | $ | 150.7 |
| | $ | 28.6 |
|
Income taxes | | 221.8 |
| | 103.5 |
| | 123.9 |
|
Capitalized interest totaled $67.7 million, $105.8 million and $80.2 million during the years ended December 31, 2013, 2012 and 2011, respectively. Capital expenditure accruals totaling $113.9 million, $112.5 million and $305.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, were excluded from investing activities in our consolidated statements of cash flows.
Amortization of intangibles and other, net, included amortization of intangible assets and liabilities related to the estimated fair values of acquired Company firm drilling contracts in place at the Merger Date, debt premiums related to the fair value adjustment of acquired Company debt instruments, deferred charges for income taxes incurred on intercompany transfers of drilling rigs and certain other deferred costs.
Concentration of Risk
We are exposed to credit risk relating to our receivables from customers, our cash and cash equivalents and investments and our use of derivatives in connection with the management of foreign currency exchange rate risk. We mitigate our credit risk relating to receivables from customers, which consist primarily of major international, government-owned and independent oil and gas companies, by performing ongoing credit evaluations. We also maintain reserves for potential credit losses, which generally have been within management's expectations. We mitigate our credit risk relating to cash and investments by focusing on diversification and quality of instruments. Cash equivalents and short-term investments consist of a portfolio of high-grade instruments. Custody of cash and cash equivalents and short-term investments is maintained at several well-capitalized financial institutions, and we monitor the financial condition of those financial institutions.
We mitigate our credit risk relating to counterparties of our derivatives through a variety of techniques, including transacting with multiple, high-quality financial institutions, thereby limiting our exposure to individual counterparties and by entering into ISDA Master Agreements, which include provisions for a legally enforceable master netting agreement, with almost all of our derivative counterparties. The terms of the ISDA agreements may also include credit support requirements, cross default provisions, termination events, or set-off provisions. Legally enforceable master netting agreements reduce credit risk by providing protection in bankruptcy in certain circumstances and generally permitting the closeout and netting of transactions with the same counterparty upon the occurrence of certain events.
During the years ended December 31, 2013, 2012 and 2011, Petrobras, our largest customer, accounted for $817.8 million, $1.0 billion and $456.6 million, or 17%, 24% and 16%, of consolidated revenues, respectively, all of which were attributable to our Floaters segment.
During the year ended December 31, 2013, revenues provided by our drilling operations in the U. S. Gulf of Mexico totaled $1.7 billion, or 35%, of consolidated revenues, of which 75% were attributable to our Floaters segment. Revenues provided by our drilling operations in Brazil during the year ended December 31, 2013 totaled $953.7 million, or 19%, of consolidated revenues, all of which were attributable to our Floaters segment.
