HAMILTON, Bermuda–(BUSINESS WIRE)–Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) today reported first quarter 2023 results.
President and Chief Executive Officer Anton Dibowitz said, “In the first quarter, we achieved strong revenue efficiency of 99% and won new contracts and extensions with associated contract backlog of approximately $820 million, including a three-year contract offshore Brazil for which we will reactivate drillship VALARIS DS-8.”
Dibowitz added, “On our fourth quarter conference call we outlined a goal to enhance our capital structure, and we achieved this objective through our recently completed refinancing transaction, including the addition of a revolving credit facility. The refinancing increased our liquidity by almost $500 million, enhancing our capital allocation flexibility including our ability to return capital to shareholders.”
Dibowitz concluded, “We continue to be highly constructive on the outlook for the industry and our business, with increasing demand and constrained supply continuing to tighten the market. As a result of our strong business outlook and commitment to returning capital to shareholders, the Valaris Board of Directors has increased our share repurchase authorization to $300 million, and we intend to repurchase $150 million of shares by the end of the year. As we look ahead, we will continue executing our focused, value driven and responsible strategy to deliver value to all stakeholders.”
Financial and Operational Highlights
- Generated Net Income of $49 million, Adjusted EBITDA of $24 million and Adjusted EBITDAR of $51 million;
- Delivered revenue efficiency of 99%;
- Awarded new contracts and extensions with associated contract backlog of approximately $820 million, increasing total contract backlog to $2.8 billion;
- Enhanced capital structure and liquidity through a refinancing in April 2023, including the addition of a $375 million revolving credit facility;
- Valaris Board of Directors authorized an increase in the Company’s share repurchase program to $300 million in April 2023; and
- Published 2022 Sustainability Report in April 2023, in which we announced a Scope 1 carbon emissions intensity reduction target by 2030.
First Quarter Review
Net income was $49 million compared to $31 million in the fourth quarter 2022. Adjusted EBITDA decreased to $24 million from $54 million in the fourth quarter primarily due to increased repair and maintenance costs associated with special periodic surveys. Adjusted EBITDAR decreased to $51 million from $75 million in the fourth quarter for the same reason described above.
Revenues decreased to $430 million from $434 million in the fourth quarter 2022. Excluding reimbursable items, revenues decreased to $408 million from $413 million in the fourth quarter. The decrease was primarily due to lower utilization for the harsh environment jackup fleet, partially offset by a higher average day rate for the floater fleet.
Contract drilling expense increased to $377 million from $353 million in the fourth quarter 2022. Excluding reimbursable items, contract drilling expense increased to $356 million from $333 million in the fourth quarter primarily due to increased repair and maintenance costs associated with special periodic surveys and higher reactivation costs, which increased to $26 million from $21 million.
Depreciation expense decreased to $23 million from $24 million in the fourth quarter 2022. General and administrative expense of $24 million was in line with the fourth quarter 2022.
Other income was $13 million compared to other expense of less than $1 million in the fourth quarter 2022. This was primarily due to foreign currency exchange gains compared to losses in the fourth quarter and an increase in interest income due to a higher interest rate on the ARO shareholder notes receivable as well as an increase in interest from short-term deposits.
Tax benefit was $28 million compared to tax expense of $10 million in the fourth quarter 2022. The first quarter tax provision included $44 million of discrete tax benefit primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. The fourth quarter tax provision included $3 million of discrete tax benefit attributable to the resolution of prior period tax matters. Adjusted for discrete items, tax expense increased to $16 million from $13 million in the fourth quarter.
Total liquidity, which includes cash and cash equivalents and restricted cash, increased to $844 million as of March 31, 2023, from $749 million as of December 31, 2022. The increase was primarily due to cash flow generated from operations, including changes in working capital, of which $46 million was a refund payment from the IRS related to the CARES Act. These were partially offset by capital expenditures.
Capital expenditures increased to $56 million from $54 million in the fourth quarter 2022.
First Quarter Segment Review
Floaters
Floater revenues increased to $215 million from $211 million in the fourth quarter 2022. Excluding reimbursable items, revenues increased to $207 million from $203 million in the fourth quarter. The increase was primarily due to higher day rates for VALARIS DPS-5 and DS-12, which commenced new contracts during the first quarter. This was partially offset by lower utilization, primarily related to VALARIS DS-12, which mobilized from Mauritania to Angola during the first quarter, prior to commencing operations for another customer.
Contract drilling expense increased to $175 million from $173 million in the fourth quarter 2022. Excluding reimbursable items, contract drilling expense increased marginally to $166 million from $165 million in the fourth quarter.
Jackups
Jackup revenues decreased to $170 million from $182 million in the fourth quarter 2022. Excluding reimbursable items, revenues decreased to $162 million from $176 million in the fourth quarter primarily due to lower utilization for the harsh environment jackup fleet, including idle time for all three of our N-Class jackups as well as VALARIS 121 and 247.
Contract drilling expense increased to $149 million from $130 million in the fourth quarter 2022. Excluding reimbursable items, contract drilling expense increased to $142 million from $124 million in the fourth quarter primarily due to higher repair and maintenance costs associated with special periodic surveys.
ARO Drilling
Revenues increased to $124 million from $120 million in the fourth quarter 2022 primarily due to a higher average day rate following the commencement of three-year contract extensions for VALARIS 147 and 148 in December 2022 and February 2023, respectively. Contract drilling expense increased to $91 million from $86 million in the fourth quarter primarily due to higher bareboat charter expense.
Other
Revenues increased to $46 million from $41 million in the fourth quarter 2022 primarily due to higher ARO lease revenue for VALARIS 147 and 148, mentioned above. Contract drilling expense increased to $20 million from $18 million in the fourth quarter.
|
|
|
First Quarter |
||||||||||||||||||||
|
|
Floaters |
|
Jackups |
|
ARO (1) |
|
Other |
|
Reconciling |
|
Consolidated Total |
|||||||||||
|
(in millions of $, except %) |
Q1 2023 |
Q4 2022 |
Chg |
|
Q1 2023 |
Q4 2022 |
Chg |
|
Q1 2023 |
Q4 2022 |
Chg |
|
Q1 2023 |
Q4 2022 |
Chg |
|
Q1 2023 |
Q4 2022 |
|
Q1 2023 |
Q4 2022 |
Chg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
214.8 |
211.0 |
2% |
|
169.8 |
181.8 |
(7)% |
|
123.6 |
120.4 |
3% |
|
45.5 |
40.8 |
12% |
|
(123.6) |
(120.4) |
|
430.1 |
433.6 |
(1)% |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling |
174.6 |
172.6 |
(1)% |
|
148.9 |
129.5 |
(15)% |
|
90.9 |
85.5 |
(6)% |
|
20.2 |
18.4 |
(10)% |
|
(57.4) |
(52.6) |
|
377.2 |
353.4 |
(7)% |
|
Depreciation |
13.0 |
12.9 |
(1)% |
|
9.0 |
9.6 |
6% |
|
15.0 |
16.1 |
7% |
|
1.3 |
1.2 |
(8)% |
|
(15.0) |
(16.0) |
|
23.3 |
23.8 |
2% |
|
General and admin. |
— |
— |
—% |
|
— |
— |
—% |
|
4.6 |
5.6 |
18% |
|
— |
— |
—% |
|
19.8 |
18.3 |
|
24.4 |
23.9 |
(2)% |
|
Equity in earnings of ARO |
— |
— |
—% |
|
— |
— |
—% |
|
— |
— |
—% |
|
— |
— |
—% |
|
3.3 |
8.6 |
|
3.3 |
8.6 |
(62)% |
|
Operating income (loss) |
27.2 |
25.5 |
7% |
|
11.9 |
42.7 |
(72)% |
|
13.1 |
13.2 |
(1)% |
|
24.0 |
21.2 |
13% |
|
(67.7) |
(61.5) |
|
8.5 |
41.1 |
(79)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
27.5 |
26.6 |
3% |
|
12.1 |
46.4 |
(74)% |
|
0.8 |
10.7 |
(93)% |
|
24.0 |
21.2 |
13% |
|
(15.8) |
(73.8) |
|
48.6 |
31.1 |
56% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
38.9 |
37.5 |
4% |
|
17.9 |
51.1 |
(65)% |
|
28.1 |
29.3 |
(4)% |
|
25.4 |
22.4 |
13% |
|
(86.0) |
(86.0) |
|
24.3 |
54.3 |
(55)% |
|
Adjusted EBITDAR |
65.1 |
58.1 |
12% |
|
18.0 |
51.2 |
(65)% |
|
28.1 |
29.3 |
(4)% |
|
25.4 |
22.4 |
13% |
|
(86.0) |
(86.0) |
|
50.6 |
75.0 |
(33)% |
|
(1) The full operating results included above for ARO are not included within our consolidated results and thus deducted under “Reconciling Items” and replaced with our equity in earnings of ARO.
(2) Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in “Reconciling Items.” Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in “Reconciling Items.” |
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Guidance
The Company’s first quarter 2023 results were better than prior guidance primarily due to timing of anticipated projects moving from the first quarter to subsequent quarters. The Company’s full-year 2023 guidance remains unchanged.
As previously announced, Valaris will hold its first quarter 2023 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Tuesday, May 2, 2023. An updated investor presentation will be available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.
Forward-Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance of our joint ventures, including our joint venture with Saudi Aramco; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine); cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic; future operations; increasing regulatory complexity; targets, progress, plans and goals related to environmental, social and governance (“ESG”) matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our ESG targets, including our Scope 1 emissions intensity reduction target, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission’s website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.
| VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) |
|||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
|
OPERATING REVENUES |
$ |
430.1 |
|
|
$ |
433.6 |
|
|
$ |
437.2 |
|
|
$ |
413.3 |
|
|
$ |
318.4 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Contract drilling (exclusive of depreciation) |
|
377.2 |
|
|
|
353.4 |
|
|
|
336.7 |
|
|
|
361.8 |
|
|
|
331.3 |
|
|
Loss on impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34.5 |
|
|
|
— |
|
|
Depreciation |
|
23.3 |
|
|
|
23.8 |
|
|
|
22.6 |
|
|
|
22.3 |
|
|
|
22.5 |
|
|
General and administrative |
|
24.4 |
|
|
|
23.9 |
|
|
|
19.2 |
|
|
|
19.0 |
|
|
|
18.8 |
|
|
Total operating expenses |
|
424.9 |
|
|
|
401.1 |
|
|
|
378.5 |
|
|
|
437.6 |
|
|
|
372.6 |
|
|
EQUITY IN EARNINGS OF ARO |
|
3.3 |
|
|
|
8.6 |
|
|
|
2.9 |
|
|
|
8.7 |
|
|
|
4.3 |
|
|
OPERATING INCOME (LOSS) |
|
8.5 |
|
|
|
41.1 |
|
|
|
61.6 |
|
|
|
(15.6 |
) |
|
|
(49.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest income |
|
23.0 |
|
|
|
15.5 |
|
|
|
27.9 |
|
|
|
11.2 |
|
|
|
10.9 |
|
|
Interest expense, net |
|
(11.1 |
) |
|
|
(10.5 |
) |
|
|
(11.7 |
) |
|
|
(11.6 |
) |
|
|
(11.5 |
) |
|
Reorganization items, net |
|
— |
|
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(0.7 |
) |
|
|
(1.0 |
) |
|
Other, net |
|
0.6 |
|
|
|
(4.9 |
) |
|
|
14.1 |
|
|
|
149.7 |
|
|
|
11.0 |
|
|
|
|
12.5 |
|
|
|
(0.2 |
) |
|
|
29.9 |
|
|
|
148.6 |
|
|
|
9.4 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
21.0 |
|
|
|
40.9 |
|
|
|
91.5 |
|
|
|
133.0 |
|
|
|
(40.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
(27.6 |
) |
|
|
9.8 |
|
|
|
13.8 |
|
|
|
20.2 |
|
|
|
(0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME (LOSS) |
|
48.6 |
|
|
|
31.1 |
|
|
|
77.7 |
|
|
|
112.8 |
|
|
|
(39.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
(1.9 |
) |
|
|
(1.9 |
) |
|
|
(3.4 |
) |
|
|
(1.2 |
) |
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS |
$ |
46.7 |
|
|
$ |
29.2 |
|
|
$ |
74.3 |
|
|
$ |
111.6 |
|
|
$ |
(38.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
$ |
0.62 |
|
|
$ |
0.39 |
|
|
$ |
0.99 |
|
|
$ |
1.49 |
|
|
$ |
(0.51 |
) |
|
Diluted |
$ |
0.61 |
|
|
$ |
0.38 |
|
|
$ |
0.98 |
|
|
$ |
1.48 |
|
|
$ |
(0.51 |
) |
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
75.2 |
|
|
|
75.2 |
|
|
|
75.1 |
|
|
|
75.0 |
|
|
|
75.0 |
|
|
Diluted |
|
76.4 |
|
|
|
76.0 |
|
|
|
75.6 |
|
|
|
75.6 |
|
|
|
75.0 |
|
| VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In millions) |
||||||||||||||
|
|
As of |
|||||||||||||
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
|||||||||
|
ASSETS |
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|||||||||
|
CURRENT ASSETS |
|
|
|
|
|
|||||||||
|
Cash and cash equivalents |
$ |
822.5 |
$ |
724.1 |
$ |
406.0 |
$ |
553.5 |
$ |
578.2 |
||||
|
Restricted cash |
|
21.5 |
|
24.4 |
|
18.2 |
|
23.8 |
|
30.0 |
||||
|
Short-term investments |
|
— |
|
— |
|
220.0 |
|
— |
|
— |
||||
|
Accounts receivable, net |
|
393.4 |
|
449.1 |
|
535.5 |
|
544.6 |
|
439.3 |
||||
|
Other current assets |
|
158.1 |
|
148.6 |
|
162.9 |
|
159.0 |
|
125.7 |
||||
|
Total current assets |
$ |
1,395.5 |
$ |
1,346.2 |
$ |
1,342.6 |
$ |
1,280.9 |
$ |
1,173.2 |
||||
|
|
|
|
|
|
|
|||||||||
|
PROPERTY AND EQUIPMENT, NET |
|
1,015.5 |
|
977.2 |
|
953.6 |
|
931.7 |
|
930.2 |
||||
|
|
|
|
|
|
|
|||||||||
|
LONG-TERM NOTES RECEIVABLE FROM ARO |
|
261.0 |
|
254.0 |
|
246.9 |
|
264.5 |
|
256.8 |
||||
|
|
|
|
|
|
|
|||||||||
|
INVESTMENT IN ARO |
|
114.4 |
|
111.1 |
|
102.6 |
|
99.6 |
|
90.9 |
||||
|
|
|
|
|
|
|
|||||||||
|
OTHER ASSETS |
|
164.8 |
|
171.8 |
|
175.5 |
|
184.1 |
|
180.5 |
||||
|
|
|
|
|
|
|
|||||||||
|
|
$ |
2,951.2 |
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
$ |
2,631.6 |
||||
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|||||||||
|
CURRENT LIABILITIES |
|
|
|
|
|
|||||||||
|
Accounts payable – trade |
$ |
324.1 |
$ |
256.5 |
$ |
256.6 |
$ |
287.0 |
$ |
311.2 |
||||
|
Accrued liabilities and other |
|
267.7 |
|
247.9 |
|
262.5 |
|
260.1 |
|
212.1 |
||||
|
Total current liabilities |
$ |
591.8 |
$ |
504.4 |
$ |
519.1 |
$ |
547.1 |
$ |
523.3 |
||||
|
|
|
|
|
|
|
|||||||||
|
LONG-TERM DEBT |
|
542.8 |
|
542.4 |
|
541.8 |
|
545.7 |
|
545.5 |
||||
|
|
|
|
|
|
|
|||||||||
|
OTHER LIABILITIES |
|
464.6 |
|
515.6 |
|
523.2 |
|
511.0 |
|
522.1 |
||||
|
|
|
|
|
|
|
|||||||||
|
TOTAL LIABILITIES |
|
1,599.2 |
|
1,562.4 |
|
1,584.1 |
|
1,603.8 |
|
1,590.9 |
||||
|
|
|
|
|
|
|
|||||||||
|
TOTAL EQUITY |
|
1,352.0 |
|
1,297.9 |
|
1,237.1 |
|
1,157.0 |
|
1,040.7 |
||||
|
|
|
|
|
|
|
|||||||||
|
|
$ |
2,951.2 |
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
$ |
2,631.6 |
||||
|
VALARIS LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) |
|||||||||||||||
|
|
Three Months Ended |
||||||||||||||
|
|
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||||||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Net income (loss) |
$ |
48.6 |
|
$ |
31.1 |
|
$ |
77.7 |
|
$ |
112.8 |
|
$ |
(39.8 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
||||||||||
|
Depreciation expense |
|
23.3 |
|
|
23.8 |
|
|
22.6 |
|
|
22.3 |
|
|
22.5 |
|
|
Accretion of discount on notes receivable |
|
(7.0 |
) |
|
(7.1 |
) |
|
(22.4 |
) |
|
(7.7 |
) |
|
(7.7 |
) |
|
Share-based compensation expense |
|
5.7 |
|
|
5.9 |
|
|
4.6 |
|
|
3.5 |
|
|
3.4 |
|
|
Deferred income tax expense (benefit) |
|
4.6 |
|
|
0.8 |
|
|
0.4 |
|
|
7.3 |
|
|
(0.6 |
) |
|
Amortization, net |
|
(4.2 |
) |
|
(2.0 |
) |
|
(5.4 |
) |
|
(3.2 |
) |
|
1.6 |
|
|
Equity in earnings of ARO |
|
(3.3 |
) |
|
(8.6 |
) |
|
(2.9 |
) |
|
(8.7 |
) |
|
(4.3 |
) |
|
Net periodic pension and retiree medical income |
|
(0.1 |
) |
|
(4.3 |
) |
|
(4.0 |
) |
|
(4.1 |
) |
|
(4.0 |
) |
|
Gain on asset disposals |
|
(0.1 |
) |
|
(3.5 |
) |
|
(0.1 |
) |
|
(135.1 |
) |
|
(2.5 |
) |
|
Loss on impairment |
|
— |
|
|
— |
|
|
— |
|
|
34.5 |
|
|
— |
|
|
Other |
|
0.1 |
|
|
(1.9 |
) |
|
— |
|
|
0.3 |
|
|
0.5 |
|
|
Changes in operating assets and liabilities |
|
85.1 |
|
|
121.3 |
|
|
16.4 |
|
|
(134.8 |
) |
|
32.5 |
|
|
Contributions to pension plans and other post-retirement benefits |
|
(1.0 |
) |
|
(0.8 |
) |
|
(0.6 |
) |
|
(1.9 |
) |
|
(0.8 |
) |
|
Net cash provided by (used in) operating activities |
$ |
151.7 |
|
$ |
154.7 |
|
$ |
86.3 |
|
$ |
(114.8 |
) |
$ |
0.8 |
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Additions to property and equipment |
$ |
(56.3 |
) |
$ |
(53.9 |
) |
$ |
(53.5 |
) |
$ |
(61.1 |
) |
$ |
(38.5 |
) |
|
Net proceeds from disposition of assets |
|
0.1 |
|
|
3.5 |
|
|
0.3 |
|
|
145.2 |
|
|
1.3 |
|
|
Purchases of short-term investments |
|
— |
|
|
— |
|
|
(220.0 |
) |
|
— |
|
|
— |
|
|
Maturities of short-term investments |
|
— |
|
|
220.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
Repayments of note receivable from ARO |
|
— |
|
|
— |
|
|
40.0 |
|
|
— |
|
|
— |
|
|
Net cash provided by (used in) investing activities |
$ |
(56.2 |
) |
$ |
169.6 |
|
$ |
(233.2 |
) |
$ |
84.1 |
|
$ |
(37.2 |
) |
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Consent solicitation fees |
$ |
— |
|
$ |
— |
|
$ |
(3.9 |
) |
$ |
— |
|
$ |
— |
|
|
Payments for tax withholdings for share-based awards |
|
— |
|
|
— |
|
|
(2.3 |
) |
|
(0.2 |
) |
|
— |
|
|
Net cash provided by (used in) financing activities |
$ |
— |
|
$ |
— |
|
$ |
(6.2 |
) |
$ |
(0.2 |
) |
$ |
— |
|
|
|
|
|
|
|
|
||||||||||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
95.5 |
|
$ |
324.3 |
|
$ |
(153.1 |
) |
$ |
(30.9 |
) |
$ |
(36.4 |
) |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
748.5 |
|
|
424.2 |
|
|
577.3 |
|
|
608.2 |
|
|
644.6 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
844.0 |
|
$ |
748.5 |
|
$ |
424.2 |
|
$ |
577.3 |
|
$ |
608.2 |
|
| VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS (In millions) |
||||||||||||||
|
|
Three Months Ended |
|||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|||||
|
REVENUES |
|
|
|
|
|
|
|
|
|
|||||
|
Floaters |
|
|
|
|
|
|
|
|
|
|||||
|
Drillships |
$ |
146.5 |
|
$ |
151.9 |
|
$ |
139.8 |
|
$ |
149.0 |
|
$ |
85.4 |
|
Semisubmersibles |
|
68.3 |
|
|
59.1 |
|
|
61.9 |
|
|
39.1 |
|
|
14.3 |
|
|
$ |
214.8 |
|
$ |
211.0 |
|
$ |
201.7 |
|
$ |
188.1 |
|
$ |
99.7 |
|
Jackups (1) |
|
|
|
|
|
|
|
|
|
|||||
|
HD Ultra-Harsh & Harsh Environment |
$ |
75.7 |
|
$ |
98.5 |
|
$ |
123.0 |
|
$ |
106.1 |
|
$ |
92.9 |
|
HD & SD Modern |
|
73.2 |
|
|
62.5 |
|
|
59.0 |
|
|
61.1 |
|
|
67.9 |
|
SD Legacy |
|
20.9 |
|
|
20.8 |
|
|
13.9 |
|
|
18.6 |
|
|
19.9 |
|
|
$ |
169.8 |
|
$ |
181.8 |
|
$ |
195.9 |
|
$ |
185.8 |
|
$ |
180.7 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total |
$ |
384.6 |
|
$ |
392.8 |
|
$ |
397.6 |
|
$ |
373.9 |
|
$ |
280.4 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Other |
|
|
|
|
|
|
|
|
|
|||||
|
Leased and Managed Rigs |
$ |
45.5 |
|
$ |
40.8 |
|
$ |
39.6 |
|
$ |
39.4 |
|
$ |
38.0 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Valaris Total |
$ |
430.1 |
|
$ |
433.6 |
|
$ |
437.2 |
|
$ |
413.3 |
|
$ |
318.4 |
|
|
|
|
|
|
|
|
|
|
|
|||||
| (1) |
HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas. |
|
VALARIS LIMITED AND SUBSIDIARIES OPERATING STATISTICS (In millions) |
|||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
||||||||||
|
ADJUSTED EBITDAR (1) |
|
|
|
|
|
|
|
|
|
||||||||||
|
Active Fleet (1) (2) |
$ |
96.2 |
|
|
$ |
117.5 |
|
|
$ |
129.6 |
|
|
$ |
98.7 |
|
|
$ |
66.5 |
|
|
Leased and Managed Rigs (1) |
|
25.4 |
|
|
|
22.4 |
|
|
|
22.1 |
|
|
|
14.9 |
|
|
|
22.6 |
|
|
|
$ |
121.6 |
|
|
$ |
139.9 |
|
|
$ |
151.7 |
|
|
$ |
113.6 |
|
|
$ |
89.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Stacked Fleet (1) (3) |
|
(13.1 |
) |
|
|
(8.2 |
) |
|
|
(8.5 |
) |
|
|
(11.3 |
) |
|
|
(10.7 |
) |
|
|
$ |
108.5 |
|
|
$ |
131.7 |
|
|
$ |
143.2 |
|
|
$ |
102.3 |
|
|
$ |
78.4 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Support costs |
|
|
|
|
|
|
|
|
|
||||||||||
|
General and administrative expense |
$ |
24.4 |
|
|
$ |
23.9 |
|
|
$ |
19.2 |
|
|
$ |
19.0 |
|
|
$ |
18.8 |
|
|
Onshore support costs |
|
33.5 |
|
|
|
32.8 |
|
|
|
30.2 |
|
|
|
29.7 |
|
|
|
29.0 |
|
|
|
$ |
57.9 |
|
|
$ |
56.7 |
|
|
$ |
49.4 |
|
|
$ |
48.7 |
|
|
$ |
47.8 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Valaris Total |
$ |
50.6 |
|
|
$ |
75.0 |
|
|
$ |
93.8 |
|
|
$ |
53.6 |
|
|
$ |
30.6 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Reactivation costs (4) |
$ |
26.3 |
|
|
$ |
20.7 |
|
|
$ |
17.8 |
|
|
$ |
24.3 |
|
|
$ |
61.5 |
|
| (1) |
Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet also excludes onshore support costs and general and administrative expense. |
|
| (2) |
Active fleet represents rigs that are not preservation stacked and includes rigs that are in the process of being reactivated. |
|
| (3) |
Stacked fleet represents the combined total of all preservation and stacking costs. |
|
| (4) |
Reactivation costs, all of which are attributed to Valaris’ active fleet, are excluded from adjusted EBITDAR. |
Contacts
Investor & Media Contacts:
Darin Gibbins
Vice President – Investor Relations and Treasurer
+1-713-979-4623
Tim Richardson
Director – Investor Relations
+1-713-979-4619