seadrill partners llc...5 seadrill receives any dayrate in excess of $450,000 per day on current...

Seadrill Partners LLCConference Call – Second Quarter 2015 ResultsAugust 27, 2015

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 operates. In particular, statements regarding the Company’s ability to make cash distributions, the expected performance of the drilling units in the Company’s fleet, estimated duration of customer contracts, contract dayrate amounts and the Company’s ability to purchase drilling rigs from Seadrill Limited in the future are considered forward-looking statements. These statements are made based upon management’s current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forwardlooking statements include, but are not limited to offshore drilling market conditions including supply and demand, dayrates, customer dilling programs and effects new rigs on the market, contract awards and rig mobilizations, contract backlog, the performance of the drilling units in the Company’s fleet, delay in payment or disputes with customers, our ability to successfully employ our drilling units, procure or have access to financing, ability to comply with loan covenants, liquidity and adequacy of cash flow from operations, fluctuations in the international price of oil, changes in governmental regulations that affect the Company or the operations of the Company’s fleet, increased competition in the offshore drilling industry, and general economic, political and business conditions globally. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company’s filings with the SEC.

The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, the Company cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors,may cause actual results to be materially different from those contained in any forward looking statement.

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Agenda

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• Highlights 2Q 2015

• Financial Overview

• Summary & Outlook

• Q&A session

• Net income attributable to Seadrill Partners Members of $101.3 million

• Operating income of $205.5 million.

• Economic utilization for the second quarter of 97%

• Generated distributable cash flow of $84.7 million

• Coverage ratio of 1.53

• Distribution of $0.5675 per unit, in line with the first quarter 2015 distribution

• Completed the acquisition of the West Polaris from Seadrill Limited.

Seadrill Partners – Second Quarter Highlights

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West Polaris

West Polaris Acquisition

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Seadrill receives any dayrate in excess of $450,000 per day

on current contract ($203k/d)

Seadrill receives 50% of any dayrate above $450,000 per

day, adjusted for daily utilization, after the conclusion of the

existing contract until 2025

Seller's credit due to Seadrill will be reduced if the average

contracted dayrate under any replacement contract is below

$450,000 until the seller's credit's maturity in 2021.

The seller's credit due will be reduced until Seadrill Partners'

effective dayrate is $450,000 or until the seller's credit is

reduced to zero.

Acquired by Seadrill Operating LP

(58% owned by SDLP)

• Dayrate: $653,000

• Contracted through March 2018

• SDLP order backlog : $493 million

• Location: Angola

• Client: Exxon

• Water depth: 10,000 ft

• Built: 2008

Additional Earn-out Provisions

CashDebtSellers CreditTotal Consideration

204,000,000336,000,000

50,000,000590,000,000

1.55

1.67

1.78

2.03

2.172.21

2.27 2.27

1.50

1.75

2.00

2.25

2.50

IPO T-15 T-16 West SiriusWest Leo

WestAuriga

28%additional

Opcointerest

West Vela WestPolaris

An

nu

aliz

ed

Dis

trib

uti

on

s p

er

Un

it (

$)

Significant Progress Since IPO

Major Events to Date

Tender rig T-15 acquired for $210 million

Tender rig T-16 acquired for $200 million

Public offering of $380 million

West Sirius and West Leo acquired for a total

consideration of $2.3 billion on a 100% basis

$1.8 billion term loan B and $100 million revolver

executed, creating a more efficient capital structure


West Auriga acquired for $1.24 billion on a 100%

basis

$1.1 billion add-on term loan B

Public offering of $192 million, and private

placement to Seadrill Limited of $100 million

Acquired an additional 28% interest in Seadrill

Operating LP for approximately $373 million


West Vela acquired for $900 million on a 100%

basis

West Polaris acquired for $590 million on a 100%

basis

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~ 46% distribution growth since IPO

Assets & Contracts

Current average remaining contract term: 3.0 years - Order backlog: $5.0 billion

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(1)

(1) West Capella distributions based on dayrate of US$562,000

(2) West Sirius received a notice of termination from BP. In accordance with the cancellation provisions

in the West Sirius contract, Seadrill Partners will receive payments over the remaining contract term

(2)

West Vencedor

West Aquarius $541,000$615,000

West Capella $627,500

West Sirius $297,000

West Polaris $450,000

West Leo $605,000

T-15 $127,000

T-16 $127,000

West Capricorn $535,000

West Auriga $565,000

West Vela $525,000

Contracted Option Period

2020

1Q

2019

2Q 3Q 4Q 2Q 3Q 4Q3Q

2015 2016 2017 2018

4Q 1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

Potential Dropdown Opportunities

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Acquisition of Additional OPCO Ownership Interests from Seadrill Ltd.

42% of four UDW rigs and one tender rig

49% of four UDW rigs

Additional UDW rigs from Seadrill

* West Sirius received a notice of termination from BP. In accordance with the cancellation provisions in

the West Sirius contract, Seadrill Partners will receive payments over the remaining contract term

*

Unit Customer

West Mira Husky NewbuildTransit Not Disclosed 01.2021West Vela BP $565,000 11.2020West Auriga BP $565,000 10.2020West Jupiter Total $581,000 12.2019West Capricorn BP $535,000 07.2019Sevan Brasil Petrobras $391,000West Leo Tullow Oil $605,000West Pegasus PEMEX $365,000 Market RateWest Carina Petrobras $463,000West Tellus Petrobras $473,000West Polaris ExxonMobil $653,000West Neptune LLOG $576,000West Gemini Total $656,000West Sirius - $297,000Sevan Louisiana LLOG $350,000West Capella ExxonMobil $627,500West Aquarius ExxonMobil $541,000$615,000West Hercules Statoil $452,000West Saturn ExxonMobil $634,000West Phoenix Total $285,000$75,000 $285,000West Orion Petrobras $592,000West Alpha ExxonMobil $508,000Sevan Driller Petrobras $417,000West Venture StatoilWest Eminence PetrobrasWest Eclipse TotalWest Taurus PetrobrasWest Navigator -West Rigel - NewbuildSevan Developer - NewbuildWest Aquila - NewbuildWest Libra - NewbuildWest Draco - NewbuildWest Dorado - Newbuild

Yard or transit period SDLP Rigs

3Q 4Q2015 2016 2017 2018

4Q 1Q 2Q3Q 4Q 3Q 4Q 1Q 2Q1Q 2Q 3Q

Financial Performance Highlights

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Income Statement – Operating income

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Unaudited accounts in USD millions 2Q15 1Q15

Contract revenues $ 385.6 $ 385.9

Reimbursable revenues 8.9 10.1

Other revenues 22.7 4.7

Total operating revenues $ 417.2 $ 400.7

Vessel and rig operating expenses 122.0 118.5

Amortization of favourable contracts 12.9 11.2

Reimbursable expenses 7.2 9.2

Depreciation and amortization 57.7 57.5

General and administrative expenses 11.9 13.6

Total operating expenses $ 211.7 $ 210.0

Net operating income $ 205.5 $ 190.7

Income Statement – Net Income

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Net operating income $ 205.5 $ 190.7

Financial items

Interest income 5.2 1

Interest expense (42.5) (52)

(Loss) / Gain on derivative financial instruments 18.3 (51.9)

Currency exchange Gain / (Loss) (0.7) (2.6)

Gain on Bargain Purchase 39.6 —

Total financial items $ 19.9 $ (105.5)

Income before income taxes 225.4 85.2

Income taxes (32.9) (14.3)

Net income $ 192.5 $ 70.9

Net income attributable to non-controlling interests $ 91.2 $ 32.7

Net income attributable to Seadrill Partners LLC Members $ 101.3 $ 38.2

Balance Sheet - Assets

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Current assets

Cash and cash equivalents 197.7 242.0

Accounts receivable, net 272.1 241.6

Amount due from related party 14.6 11.0

Other current assets 192.6 128.6

Total current assets 677.0 623.2

Non-current assets

Drilling units 5,629.2 5,098.5

Goodwill 3.2 3.2

Deferred tax assets 20.6 19.2

Other non-current assets 407.2 353.4

Total non-current assets 6,060.2 5,474.3

Total assets 6,737.2 6,097.5

Balance Sheet – Liabilities & Members’ Capital / Owners Equity

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Current liabilities

Current portion of long-term debt 96.2 59.7

Current portion of long-term related party payable 145.8 36.3

Trade accounts payable and accruals 13.0 7.9

Other related party payables 288.3 185.7

Other current liabilities 204.2 215.8

Total current liabilities 747.5 505.4

Non-current liabilities

Long-term debt 3,484.6 3,152.3

Deferred consideration to related party 214.2 115.0

Long-term related party payable 178.3 301.9

Other non-current liabilities 21.9 25.7

Total non-current liabilities 3,899.0 3,594.9

Total equity 2,090.7 1,997.2

Total liabilities and equity 6,737.2 6,097.5

⦁ As of June 30, 2015 total debt was $3,904.9 million and Net Debt/EBITDA was 3.2x

⦁ 89% of debt swapped to an average fixed rate of 2.25%, excluding margin

Distributable Cash Flow

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EBITDA for the quarter 263.2 248.2

Add: Adjustments for non-cash items 9.3 14.3

Adjusted EBITDA 272.5 261.0

Cash Interest Income 1.9 1.9

Cash Interest Expense (49.6) (48.2)

Cash Tax Paid (18.2) (12)

Estimated maintenance and replacement capital expenditure (43.0) (42.4)

Cash flow available for distribution 163.6 160.3

Less:

Cash flow attributable to non-controlling interest

(78.9) (78.3)

Distributable cash flow for SDLP 84.7 82

Distribution Declared 55.3 55.3

Coverage Ratio 1.53 1.48

Summary & Outlook

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Well Positioned in a Challenging Market:

• Long term contracts – Average remaining contract term of 3 years

• $5.0 billion backlog with strong counterparties

• 1.53x coverage ratio

• Evaluating acquisitions to continue to build coverage

• Strong liquidity position – ~$200 million in cash, $150 million undrawn revolver

• Strong balance sheet - 3.2x net leverage ratio

• Large and supportive parent

o Strong operational performance

o Cost efficiencies improving margins

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Q&A

seadrill partners llc...5 seadrill receives any dayrate in excess of $450,000 per day on current...

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