Valaris Reports Fourth Quarter 2023 Results
- Strong financial performance with net income of $829 million and adjusted EBITDA of $58 million.
- Contract backlog increased to over $3.9 billion, a nearly 60% rise from the previous year.
- Revenue efficiency reached 93% in the quarter and 96% for the year.
- New contracts and extensions worth more than $1.4 billion were awarded in the fourth quarter.
- Cash and cash equivalents decreased to $636 million due to capital expenditures and share repurchases.
- Decrease in cash and cash equivalents from $1.1 billion to $636 million.
- General and administrative expenses remained consistent at $24 million.
- Revenue from other sources decreased to $41 million from $46 million in the previous quarter.
Insights
The reported net income of $829 million for Valaris Limited, which includes a substantial tax benefit of $790 million, marks a significant increase from the previous quarter. This remarkable jump, largely due to changes in deferred tax asset valuation allowances, signals a potential one-time event rather than an operational trend. Investors should note the Adjusted EBITDA of $58 million, which provides a clearer picture of the company's operating performance by excluding non-cash and irregular items. The 44% increase in Adjusted EBITDA from the previous quarter suggests improved operational efficiency and cost management. However, the capital expenditures surge to $463 million, primarily for new drillship deliveries, indicates aggressive capital reinvestment which could affect free cash flow in the short term but may be justified if it enhances long-term earnings capacity.
The increase in total contract backlog to over $3.9 billion demonstrates strong market demand and could provide revenue stability. The share repurchase program expansion to $600 million reflects management's confidence in the company's valuation and future cash flows. However, investors should scrutinize the balance between returning capital to shareholders and investing in growth opportunities, particularly in a cyclical industry like offshore drilling.
Valaris' strategic positioning in securing contracts at higher market rates and successfully reactivating rigs aligns with the broader industry trend of increasing demand for offshore drilling services. The multi-year drillship contracts and jackup contracts across diverse geographical locations underscore the company's broad customer base and operational reach. The reported revenue efficiency of 93% for the quarter and 96% for the year is impressive, indicating effective management and reliable operations, which are critical factors for clients in the energy sector.
Furthermore, the company's focus on returning future free cash flow to shareholders suggests an attractive proposition for investors. However, it is essential to consider the volatility of the oil and gas market, which can impact day rates and contract stability. The reported nearly 60% increase in contract backlog year-over-year provides a buffer against market downturns and positions Valaris favorably for the anticipated upcycle in the industry.
The reported operational highlights from Valaris indicate a robust upturn in the offshore drilling sector, which has been recovering from previous downturns. The delivery of newbuild drillships and the recognition of VALARIS 110 as Rig of the Year reflect the company's commitment to maintaining a modern and competitive fleet. The sector is highly sensitive to oil price fluctuations and the current upcycle presents opportunities for companies like Valaris to capitalize on higher day rates and longer contract durations.
Valaris' emphasis on operational performance and efficiency, as evidenced by their high revenue efficiency, is a critical factor in maintaining a competitive edge. The industry's move towards more technologically advanced and efficient rigs may also drive demand for Valaris' services. However, the significant capital expenditures for newbuild drillships could strain cash reserves and the company's ability to manage this while still rewarding shareholders will be critical to its financial health and stock performance.
President and Chief Executive Officer Anton Dibowitz said, “We continue to execute on our operating leverage by repricing rigs from legacy day rates to meaningfully higher market rates and successfully delivering reactivated rigs with attractive contracts. At the same time, we remain laser focused on delivering high levels of operational performance to our customers, as evidenced by another strong year of revenue efficiency.”
Dibowitz added, “During the fourth quarter, we were awarded new contracts and extensions with associated contract backlog of more than
Dibowitz concluded, “We remain confident in the strength and duration of this upcycle and the outlook for Valaris is positive. We expect to deliver significant earnings and cash flow growth over the next few years and we intend to return all future free cash flow to shareholders unless there is a better or more value accretive use for it.”
Financial and Operational Highlights
-
Net income of
$829 million $790 million $58 million $96 million -
Delivered revenue efficiency of
93% during the quarter and96% for the year; -
VALARIS DS-8 commenced a contract offshore
Brazil late in the quarter, following its reactivation; - VALARIS 110 received TotalEnergies' and North Oil Company's global jackup Rig of the Year award;
-
Awarded new contracts and extensions with associated contract backlog of more than
$1.4 billion -
Increased total contract backlog to more than
$3.9 billion 60% increase from twelve months ago; - Took delivery of newbuild drillships VALARIS DS-13 and DS-14;
-
Repurchased
$50 million $200 million -
Valaris Board of Directors authorized an increase in the Company's share repurchase program to
$600 million $300 million - ARO Drilling took delivery of newbuild jackup Kingdom 1, and the rig started its maiden contract, during the fourth quarter.
Fourth Quarter Review
Net income increased to
Revenues increased to
Contract drilling expense increased to
Depreciation expense increased to
Other income decreased to
Tax benefit was
Cash and cash equivalents and restricted cash decreased to
Capital expenditures increased to
Fourth Quarter Segment Review
Floaters
Floater revenues increased to
Contract drilling expense increased to
Jackups
Jackup revenues increased to
Contract drilling expense increased to
ARO Drilling
Revenues increased to
Other
Revenues decreased to
|
|
Fourth Quarter |
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|
Floaters |
|
Jackups |
|
ARO (1) |
|
Other |
|
Reconciling Items (1) (2) |
|
Consolidated Total |
|||||||||||||||||||||||||||||||
(in millions, except %) |
Q4
|
Q3
|
Chg |
|
Q4
|
Q3
|
Chg |
|
Q4
|
Q3
|
Chg |
|
Q4
|
Q3
|
Chg |
|
Q4
|
Q3
|
|
Q4
|
Q3
|
Chg |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Revenues |
$ |
263.2 |
$ |
243.3 |
8 |
% |
|
$ |
179.3 |
$ |
165.9 |
8 |
% |
|
$ |
133.7 |
$ |
121.5 |
|
10 |
% |
|
$ |
41.3 |
$ |
45.9 |
(10 |
)% |
|
$ |
(133.7 |
) |
$ |
(121.5 |
) |
|
$ |
483.8 |
$ |
455.1 |
6 |
% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Contract drilling |
|
226.0 |
|
215.2 |
(5 |
)% |
|
|
123.3 |
|
121.7 |
(1 |
)% |
|
|
88.0 |
|
92.0 |
|
4 |
% |
|
|
18.0 |
|
18.8 |
4 |
% |
|
|
(53.3 |
) |
|
(56.8 |
) |
|
|
402.0 |
|
390.9 |
(3 |
)% |
Depreciation |
|
15.0 |
|
14.2 |
(6 |
)% |
|
|
11.2 |
|
10.2 |
(10 |
)% |
|
|
19.5 |
|
15.8 |
|
(23 |
)% |
|
|
1.2 |
|
1.3 |
8 |
% |
|
|
(19.4 |
) |
|
(15.7 |
) |
|
|
27.5 |
|
25.8 |
(7 |
)% |
General and admin. |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
6.3 |
|
5.6 |
|
(13 |
)% |
|
|
— |
|
— |
— |
% |
|
|
18.0 |
|
|
18.6 |
|
|
|
24.3 |
|
24.2 |
— |
% |
Equity in earnings of ARO |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
— |
|
— |
|
— |
% |
|
|
— |
|
— |
— |
% |
|
|
8.3 |
|
|
2.4 |
|
|
|
8.3 |
|
2.4 |
246 |
% |
Operating income |
$ |
22.2 |
$ |
13.9 |
60 |
% |
|
$ |
44.8 |
$ |
34.0 |
32 |
% |
|
$ |
19.9 |
$ |
8.1 |
|
146 |
% |
|
$ |
22.1 |
$ |
25.8 |
(14 |
)% |
|
$ |
(70.7 |
) |
$ |
(65.2 |
) |
|
$ |
38.3 |
$ |
16.6 |
131 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net income (loss) |
$ |
24.3 |
$ |
14.5 |
68 |
% |
|
$ |
46.1 |
$ |
34.4 |
34 |
% |
|
$ |
10.3 |
$ |
(1.3 |
) |
nm |
|
$ |
22.1 |
$ |
25.8 |
(14 |
)% |
|
$ |
725.7 |
|
$ |
(56.4 |
) |
|
$ |
828.5 |
$ |
17.0 |
nm |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Adjusted EBITDA |
$ |
37.2 |
$ |
28.2 |
32 |
% |
|
$ |
56.0 |
$ |
44.2 |
27 |
% |
|
$ |
39.4 |
$ |
23.9 |
|
65 |
% |
|
$ |
23.2 |
$ |
27.2 |
(15 |
)% |
|
$ |
(98.3 |
) |
$ |
(83.5 |
) |
|
$ |
57.5 |
$ |
40.0 |
44 |
% |
Adjusted EBITDAR |
$ |
75.7 |
$ |
79.1 |
(4 |
)% |
|
$ |
56.0 |
$ |
44.2 |
27 |
% |
|
$ |
39.4 |
$ |
23.9 |
|
65 |
% |
|
$ |
23.2 |
$ |
27.2 |
(15 |
)% |
|
$ |
(98.3 |
) |
$ |
(83.5 |
) |
|
$ |
96.0 |
$ |
90.9 |
6 |
% |
(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, those 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" |
As previously announced, Valaris will hold its fourth quarter 2023 earnings conference call at 9:00 a.m. CST (10:00 a.m. ET) on Thursday, February 22, 2024. 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
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 and the attainment of requisite permits for such 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; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; 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; cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts, including for VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to sustainability 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 sustainability targets, 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 |
||||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
||||||||||
OPERATING REVENUES |
$ |
483.8 |
|
|
$ |
455.1 |
|
|
$ |
415.2 |
|
|
$ |
430.1 |
|
|
$ |
433.6 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
Contract drilling (exclusive of depreciation) |
|
402.0 |
|
|
|
390.9 |
|
|
|
373.5 |
|
|
|
377.2 |
|
|
|
353.4 |
|
Depreciation |
|
27.5 |
|
|
|
25.8 |
|
|
|
24.5 |
|
|
|
23.3 |
|
|
|
23.8 |
|
General and administrative |
|
24.3 |
|
|
|
24.2 |
|
|
|
26.4 |
|
|
|
24.4 |
|
|
|
23.9 |
|
Total operating expenses |
|
453.8 |
|
|
|
440.9 |
|
|
|
424.4 |
|
|
|
424.9 |
|
|
|
401.1 |
|
EQUITY IN EARNINGS (LOSSES) OF ARO |
|
8.3 |
|
|
|
2.4 |
|
|
|
(0.7 |
) |
|
|
3.3 |
|
|
|
8.6 |
|
OPERATING INCOME (LOSS) |
|
38.3 |
|
|
|
16.6 |
|
|
|
(9.9 |
) |
|
|
8.5 |
|
|
|
41.1 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
|
27.2 |
|
|
|
26.6 |
|
|
|
24.6 |
|
|
|
23.0 |
|
|
|
15.5 |
|
Interest expense, net |
|
(21.7 |
) |
|
|
(19.4 |
) |
|
|
(16.7 |
) |
|
|
(11.1 |
) |
|
|
(10.5 |
) |
Other, net |
|
(5.5 |
) |
|
|
3.9 |
|
|
|
(0.8 |
) |
|
|
0.6 |
|
|
|
(5.2 |
) |
|
|
— |
|
|
|
11.1 |
|
|
|
7.1 |
|
|
|
12.5 |
|
|
|
(0.2 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
38.3 |
|
|
|
27.7 |
|
|
|
(2.8 |
) |
|
|
21.0 |
|
|
|
40.9 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
|
(790.2 |
) |
|
|
10.7 |
|
|
|
24.5 |
|
|
|
(27.6 |
) |
|
|
9.8 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) |
|
828.5 |
|
|
|
17.0 |
|
|
|
(27.3 |
) |
|
|
48.6 |
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
6.7 |
|
|
|
(4.1 |
) |
|
|
(2.1 |
) |
|
|
(1.9 |
) |
|
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS |
$ |
835.2 |
|
|
$ |
12.9 |
|
|
$ |
(29.4 |
) |
|
$ |
46.7 |
|
|
$ |
29.2 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
11.47 |
|
|
$ |
0.18 |
|
|
$ |
(0.39 |
) |
|
$ |
0.62 |
|
|
$ |
0.39 |
|
Diluted |
$ |
11.30 |
|
|
$ |
0.17 |
|
|
$ |
(0.39 |
) |
|
$ |
0.61 |
|
|
$ |
0.38 |
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
72.8 |
|
|
|
73.7 |
|
|
|
74.8 |
|
|
|
75.2 |
|
|
|
75.2 |
|
Diluted |
|
73.9 |
|
|
|
74.8 |
|
|
|
74.8 |
|
|
|
76.4 |
|
|
|
76.0 |
|
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In millions) |
|
|
As of |
|||||||||
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
|||||
ASSETS |
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
CURRENT ASSETS |
|
|
|
|
|
|||||
Cash and cash equivalents |
$ |
620.5 |
$ |
1,041.1 |
$ |
787.3 |
$ |
822.5 |
$ |
724.1 |
Restricted cash |
|
15.2 |
|
16.2 |
|
18.0 |
|
21.5 |
|
24.4 |
Accounts receivable, net |
|
459.3 |
|
492.4 |
|
473.4 |
|
393.4 |
|
449.1 |
Other current assets |
|
177.2 |
|
178.7 |
|
168.7 |
|
158.1 |
|
148.6 |
Total current assets |
$ |
1,272.2 |
$ |
1,728.4 |
$ |
1,447.4 |
$ |
1,395.5 |
$ |
1,346.2 |
|
|
|
|
|
|
|||||
PROPERTY AND EQUIPMENT, NET |
|
1,633.8 |
|
1,159.9 |
|
1,073.7 |
|
1,015.5 |
|
977.2 |
|
|
|
|
|
|
|||||
LONG-TERM NOTES RECEIVABLE FROM ARO |
|
282.3 |
|
275.2 |
|
268.0 |
|
261.0 |
|
254.0 |
|
|
|
|
|
|
|||||
INVESTMENT IN ARO |
|
124.4 |
|
116.1 |
|
113.7 |
|
114.4 |
|
111.1 |
|
|
|
|
|
|
|||||
DEFERRED TAX ASSETS |
|
855.1 |
|
53.8 |
|
48.5 |
|
50.5 |
|
55.1 |
|
|
|
|
|
|
|||||
OTHER ASSETS |
|
154.4 |
|
151.5 |
|
137.1 |
|
114.3 |
|
116.7 |
|
|
|
|
|
|
|||||
|
$ |
4,322.2 |
$ |
3,484.9 |
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
CURRENT LIABILITIES |
|
|
|
|
|
|||||
Accounts payable - trade |
$ |
400.1 |
$ |
376.4 |
$ |
364.2 |
$ |
324.1 |
$ |
256.5 |
Accrued liabilities and other |
|
344.2 |
|
346.6 |
|
294.7 |
|
267.7 |
|
247.9 |
Total current liabilities |
$ |
744.3 |
$ |
723.0 |
$ |
658.9 |
$ |
591.8 |
$ |
504.4 |
|
|
|
|
|
|
|||||
LONG-TERM DEBT |
|
1,079.3 |
|
1,079.4 |
|
681.9 |
|
542.8 |
|
542.4 |
|
|
|
|
|
|
|||||
DEFERRED TAX LIABILITIES |
|
29.9 |
|
17.1 |
|
16.7 |
|
16.1 |
|
16.1 |
|
|
|
|
|
|
|||||
OTHER LIABILITIES |
|
471.7 |
|
465.4 |
|
464.8 |
|
448.5 |
|
499.5 |
|
|
|
|
|
|
|||||
TOTAL LIABILITIES |
|
2,325.2 |
|
2,284.9 |
|
1,822.3 |
|
1,599.2 |
|
1,562.4 |
|
|
|
|
|
|
|||||
TOTAL EQUITY |
|
1,997.0 |
|
1,200.0 |
|
1,266.1 |
|
1,352.0 |
|
1,297.9 |
|
|
|
|
|
|
|||||
|
$ |
4,322.2 |
$ |
3,484.9 |
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
|
|
Year Ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
OPERATING ACTIVITIES |
|
|
|
||||
Net income |
$ |
866.8 |
|
|
$ |
181.8 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Deferred income tax expense (benefit) |
|
(786.4 |
) |
|
|
7.9 |
|
Depreciation expense |
|
101.1 |
|
|
|
91.2 |
|
Loss on extinguishment of debt |
|
29.2 |
|
|
|
— |
|
Net gain on sale of property |
|
(28.6 |
) |
|
|
(141.2 |
) |
Accretion of discount on notes receivable from ARO |
|
(28.3 |
) |
|
|
(44.9 |
) |
Share-based compensation expense |
|
27.3 |
|
|
|
17.4 |
|
Equity in earnings of ARO |
|
(13.3 |
) |
|
|
(24.5 |
) |
Net periodic pension and retiree medical income |
|
(0.9 |
) |
|
|
(16.4 |
) |
Loss on impairment |
|
— |
|
|
|
34.5 |
|
Changes in deferred costs |
|
(26.1 |
) |
|
|
(38.8 |
) |
Changes in contract liabilities |
|
4.9 |
|
|
|
62.4 |
|
Other |
|
6.7 |
|
|
|
8.3 |
|
Changes in operating assets and liabilities |
|
121.8 |
|
|
|
(6.6 |
) |
Contributions to pension plans and other post-retirement benefits |
|
(6.7 |
) |
|
|
(4.1 |
) |
Net cash provided by operating activities |
$ |
267.5 |
|
|
$ |
127.0 |
|
INVESTING ACTIVITIES |
|
|
|
||||
Additions to property and equipment |
$ |
(696.1 |
) |
|
$ |
(207.0 |
) |
Net proceeds from disposition of assets |
|
30.3 |
|
|
|
150.3 |
|
Purchases of short-term investments |
|
— |
|
|
|
(220.0 |
) |
Maturities of short-term investments |
|
— |
|
|
|
220.0 |
|
Repayment of note receivable from ARO |
|
— |
|
|
|
40.0 |
|
Net cash used in investing activities |
$ |
(665.8 |
) |
|
$ |
(16.7 |
) |
FINANCING ACTIVITIES |
|
|
|
||||
Issuance of Second Lien Notes |
$ |
1,103.0 |
|
|
$ |
— |
|
Redemption of First Lien Notes |
|
(571.8 |
) |
|
|
— |
|
Payments for share repurchases |
|
(198.6 |
) |
|
|
— |
|
Debt issuance costs |
|
(38.6 |
) |
|
|
— |
|
Payments for tax withholdings for share-based awards |
|
(5.4 |
) |
|
|
(2.5 |
) |
Consent solicitation fees |
|
— |
|
|
|
(3.9 |
) |
Other |
|
(3.1 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
$ |
285.5 |
|
|
$ |
(6.4 |
) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(112.8 |
) |
|
$ |
103.9 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
748.5 |
|
|
|
644.6 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
635.7 |
|
|
$ |
748.5 |
|
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
|
|
Three Months Ended |
||||||||||||||
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
||||||||||
Net income (loss) |
$ |
828.5 |
|
$ |
17.0 |
|
$ |
(27.3 |
) |
$ |
48.6 |
|
$ |
31.1 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
||||||||||
Deferred income tax expense (benefit) |
|
(788.7 |
) |
|
(4.8 |
) |
|
2.5 |
|
|
4.6 |
|
|
0.8 |
|
Depreciation expense |
|
27.5 |
|
|
25.8 |
|
|
24.5 |
|
|
23.3 |
|
|
23.8 |
|
Equity in losses (earnings) of ARO |
|
(8.3 |
) |
|
(2.4 |
) |
|
0.7 |
|
|
(3.3 |
) |
|
(8.6 |
) |
Share-based compensation expense |
|
7.8 |
|
|
6.8 |
|
|
7.0 |
|
|
5.7 |
|
|
5.9 |
|
Accretion of discount on notes receivable |
|
(7.1 |
) |
|
(7.2 |
) |
|
(7.0 |
) |
|
(7.0 |
) |
|
(7.1 |
) |
Net gain on sale of property |
|
(0.7 |
) |
|
— |
|
|
(27.8 |
) |
|
(0.1 |
) |
|
(3.5 |
) |
Net periodic pension and retiree medical income |
|
(0.6 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(4.3 |
) |
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
29.2 |
|
|
— |
|
|
— |
|
Changes in contract liabilities |
|
8.8 |
|
|
3.6 |
|
|
13.3 |
|
|
(20.8 |
) |
|
3.6 |
|
Changes in deferred costs |
|
3.2 |
|
|
(22.4 |
) |
|
(7.4 |
) |
|
0.5 |
|
|
8.8 |
|
Other |
|
1.2 |
|
|
2.8 |
|
|
2.2 |
|
|
0.5 |
|
|
0.4 |
|
Changes in operating assets and liabilities |
|
27.3 |
|
|
31.0 |
|
|
(37.3 |
) |
|
100.8 |
|
|
103.0 |
|
Contributions to pension plans and other post-retirement benefits |
|
(2.2 |
) |
|
(1.9 |
) |
|
(1.6 |
) |
|
(1.0 |
) |
|
0.8 |
|
Net cash provided by (used in) operating activities |
$ |
96.7 |
|
$ |
48.2 |
|
$ |
(29.1 |
) |
$ |
151.7 |
|
$ |
154.7 |
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES |
|
|
|
|
|
||||||||||
Additions to property and equipment |
$ |
(463.0 |
) |
$ |
(105.8 |
) |
$ |
(71.0 |
) |
$ |
(56.3 |
) |
$ |
(53.9 |
) |
Net proceeds from disposition of assets |
|
1.1 |
|
|
0.1 |
|
|
29.0 |
|
|
0.1 |
|
|
3.5 |
|
Maturities of short-term investments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
220.0 |
|
Net cash provided by (used in) investing activities |
$ |
(461.9 |
) |
$ |
(105.7 |
) |
$ |
(42.0 |
) |
$ |
(56.2 |
) |
$ |
169.6 |
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES |
|
|
|
|
|
||||||||||
Payments for share repurchases |
$ |
(51.2 |
) |
$ |
(83.0 |
) |
$ |
(64.4 |
) |
$ |
— |
|
$ |
— |
|
Debt issuance costs |
|
(1.9 |
) |
|
(5.7 |
) |
|
(31.0 |
) |
|
— |
|
|
— |
|
Payments for tax withholdings for share-based awards |
|
(0.2 |
) |
|
(4.8 |
) |
|
(0.4 |
) |
|
— |
|
|
— |
|
Issuance of Second Lien Notes |
|
— |
|
|
403.0 |
|
|
700.0 |
|
|
— |
|
|
— |
|
Redemption of First Lien Notes |
|
— |
|
|
— |
|
|
(571.8 |
) |
|
— |
|
|
— |
|
Other |
|
(3.1 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net cash provided by (used in) financing activities |
$ |
(56.4 |
) |
$ |
309.5 |
|
$ |
32.4 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(421.6 |
) |
$ |
252.0 |
|
$ |
(38.7 |
) |
$ |
95.5 |
|
$ |
324.3 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
1,057.3 |
|
|
805.3 |
|
|
844.0 |
|
|
748.5 |
|
|
424.2 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
635.7 |
|
$ |
1,057.3 |
|
$ |
805.3 |
|
$ |
844.0 |
|
$ |
748.5 |
|
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
(In millions) |
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
REVENUES |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
$ |
190.7 |
|
$ |
168.2 |
|
$ |
147.2 |
|
$ |
138.9 |
|
$ |
144.5 |
Semisubmersibles |
|
56.3 |
|
|
64.1 |
|
|
68.5 |
|
|
67.1 |
|
|
58.2 |
|
$ |
247.0 |
|
$ |
232.3 |
|
$ |
215.7 |
|
$ |
206.0 |
|
$ |
202.7 |
Reimbursable and Other Revenues (1) |
|
16.2 |
|
|
11.0 |
|
|
11.7 |
|
|
8.8 |
|
|
8.3 |
Total Floaters |
$ |
263.2 |
|
$ |
243.3 |
|
$ |
227.4 |
|
$ |
214.8 |
|
$ |
211.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Jackups (2) |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh Environment |
$ |
76.6 |
|
$ |
75.5 |
|
$ |
54.1 |
|
$ |
70.9 |
|
$ |
92.9 |
HD & SD Modern |
|
79.0 |
|
|
68.8 |
|
|
67.9 |
|
|
70.4 |
|
|
62.4 |
SD Legacy |
|
14.2 |
|
|
10.5 |
|
|
12.5 |
|
|
20.4 |
|
|
20.2 |
|
$ |
169.8 |
|
$ |
154.8 |
|
$ |
134.5 |
|
$ |
161.7 |
|
$ |
175.5 |
Reimbursable and Other Revenues (1) |
|
9.5 |
|
|
11.1 |
|
|
10.1 |
|
|
8.1 |
|
|
6.3 |
Total Jackups |
$ |
179.3 |
|
$ |
165.9 |
|
$ |
144.6 |
|
$ |
169.8 |
|
$ |
181.8 |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs |
$ |
36.0 |
|
$ |
40.1 |
|
$ |
37.4 |
|
$ |
39.1 |
|
$ |
33.5 |
Reimbursable and Other Revenues (1) |
|
5.3 |
|
|
5.8 |
|
|
5.8 |
|
|
6.4 |
|
|
7.3 |
Total Other |
$ |
41.3 |
|
$ |
45.9 |
|
$ |
43.2 |
|
$ |
45.5 |
|
$ |
40.8 |
|
|
|
|
|
|
|
|
|
|
|||||
Total Operating Revenues |
$ |
483.8 |
|
$ |
455.1 |
|
$ |
415.2 |
|
$ |
430.1 |
|
$ |
433.6 |
|
|
|
|
|
|
|
|
|
|
|||||
Total Reimbursable and Other Revenues (1) |
$ |
31.0 |
|
$ |
27.9 |
|
$ |
27.6 |
|
$ |
23.3 |
|
$ |
21.9 |
|
|
|
|
|
|
|
|
|
|
|||||
Revenues Excluding Reimbursable and Other Revenues |
$ |
452.8 |
|
$ |
427.2 |
|
$ |
387.6 |
|
$ |
406.8 |
|
$ |
411.7 |
(1) |
Reimbursable and other revenues include certain types of non-recurring reimbursable revenues, revenues earned during suspension periods and revenues attributable to amortization of contract intangibles. |
|
|
|
|
(2) |
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 |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
ADJUSTED EBITDA (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships (1) |
$ |
16.7 |
|
$ |
2.8 |
|
$ |
0.3 |
|
$ |
12.2 |
|
$ |
18.5 |
Semisubmersibles (1) |
|
20.5 |
|
|
25.4 |
|
|
30.8 |
|
|
28.0 |
|
|
20.0 |
|
$ |
37.2 |
|
$ |
28.2 |
|
$ |
31.1 |
|
$ |
40.2 |
|
$ |
38.5 |
|
|
|
|
|
|
|
|
|
|
|||||
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh (1) |
$ |
21.1 |
|
$ |
20.9 |
|
$ |
6.1 |
|
$ |
3.0 |
|
$ |
31.4 |
HD & SD - Modern (1) |
|
30.1 |
|
|
20.4 |
|
|
11.6 |
|
|
9.4 |
|
|
13.0 |
SD - Legacy (1) |
|
4.8 |
|
|
2.9 |
|
|
3.4 |
|
|
8.4 |
|
|
9.8 |
|
$ |
56.0 |
|
$ |
44.2 |
|
$ |
21.1 |
|
$ |
20.8 |
|
$ |
54.2 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
93.2 |
|
$ |
72.4 |
|
$ |
52.2 |
|
$ |
61.0 |
|
$ |
92.7 |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs (1) |
$ |
23.2 |
|
$ |
27.2 |
|
$ |
24.9 |
|
$ |
25.4 |
|
$ |
22.3 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
116.4 |
|
$ |
99.6 |
|
$ |
77.1 |
|
$ |
86.4 |
|
$ |
115.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Support costs |
|
|
|
|
|
|
|
|
|
|||||
General and administrative expense |
$ |
24.3 |
|
$ |
24.2 |
|
$ |
26.4 |
|
$ |
24.4 |
|
$ |
23.9 |
Onshore support costs |
|
34.6 |
|
|
35.4 |
|
|
35.4 |
|
|
33.5 |
|
|
32.8 |
|
$ |
58.9 |
|
$ |
59.6 |
|
$ |
61.8 |
|
$ |
57.9 |
|
$ |
56.7 |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
$ |
57.5 |
|
$ |
40.0 |
|
$ |
15.3 |
|
$ |
28.5 |
|
$ |
58.3 |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Adjusted EBITDA is earnings before interest, tax, depreciation and amortization. Adjusted EBITDA for asset category also excludes onshore support costs and general and administrative expense. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
(In millions) |
|
Three Months Ended |
||||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
||||||||||
ADJUSTED EBITDAR (1) |
|
|
|
|
|
|
|
|
|
||||||||||
Active Fleet (1) (2) |
$ |
137.5 |
|
|
$ |
129.3 |
|
|
$ |
104.5 |
|
|
$ |
100.4 |
|
|
$ |
121.5 |
|
Leased and Managed Rigs (1) |
|
23.2 |
|
|
|
27.2 |
|
|
|
24.9 |
|
|
|
25.4 |
|
|
|
22.3 |
|
|
$ |
160.7 |
|
|
$ |
156.5 |
|
|
$ |
129.4 |
|
|
$ |
125.8 |
|
|
$ |
143.8 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stacked Fleet (1) (3) |
|
(5.8 |
) |
|
|
(6.0 |
) |
|
|
(8.2 |
) |
|
|
(13.1 |
) |
|
|
(8.1 |
) |
|
$ |
154.9 |
|
|
$ |
150.5 |
|
|
$ |
121.2 |
|
|
$ |
112.7 |
|
|
$ |
135.7 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Support costs |
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative expense |
$ |
24.3 |
|
|
$ |
24.2 |
|
|
$ |
26.4 |
|
|
$ |
24.4 |
|
|
$ |
23.9 |
|
Onshore support costs |
|
34.6 |
|
|
|
35.4 |
|
|
|
35.4 |
|
|
|
33.5 |
|
|
|
32.8 |
|
|
$ |
58.9 |
|
|
$ |
59.6 |
|
|
$ |
61.8 |
|
|
$ |
57.9 |
|
|
$ |
56.7 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Valaris Total |
$ |
96.0 |
|
|
$ |
90.9 |
|
|
$ |
59.4 |
|
|
$ |
54.8 |
|
|
$ |
79.0 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reactivation costs (4) |
$ |
38.5 |
|
|
$ |
50.9 |
|
|
$ |
44.1 |
|
|
$ |
26.3 |
|
|
$ |
20.7 |
|
(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, including 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. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
(In millions) |
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
ADJUSTED EBITDAR (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships (1) |
$ |
55.2 |
|
$ |
53.7 |
|
$ |
44.4 |
|
$ |
38.2 |
|
$ |
38.8 |
Semisubmersibles (1) |
|
20.5 |
|
|
25.4 |
|
|
30.9 |
|
|
28.2 |
|
|
20.4 |
|
$ |
75.7 |
|
$ |
79.1 |
|
$ |
75.3 |
|
$ |
66.4 |
|
$ |
59.2 |
|
|
|
|
|
|
|
|
|
|
|||||
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh (1) |
$ |
21.1 |
|
$ |
20.9 |
|
$ |
6.1 |
|
$ |
3.1 |
|
$ |
31.4 |
HD & SD - Modern (1) |
|
30.1 |
|
|
20.4 |
|
|
11.5 |
|
|
9.4 |
|
|
13.0 |
SD - Legacy (1) |
|
4.8 |
|
|
2.9 |
|
|
3.4 |
|
|
8.4 |
|
|
9.8 |
|
$ |
56.0 |
|
$ |
44.2 |
|
$ |
21.0 |
|
$ |
20.9 |
|
$ |
54.2 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
131.7 |
|
$ |
123.3 |
|
$ |
96.3 |
|
$ |
87.3 |
|
$ |
113.4 |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs (1) |
$ |
23.2 |
|
$ |
27.2 |
|
$ |
24.9 |
|
$ |
25.4 |
|
$ |
22.3 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
154.9 |
|
$ |
150.5 |
|
$ |
121.2 |
|
$ |
112.7 |
|
$ |
135.7 |
|
|
|
|
|
|
|
|
|
|
|||||
Support costs |
|
|
|
|
|
|
|
|
|
|||||
General and administrative expense |
$ |
24.3 |
|
$ |
24.2 |
|
$ |
26.4 |
|
$ |
24.4 |
|
$ |
23.9 |
Onshore support costs |
|
34.6 |
|
|
35.4 |
|
|
35.4 |
|
|
33.5 |
|
|
32.8 |
|
$ |
58.9 |
|
$ |
59.6 |
|
$ |
61.8 |
|
$ |
57.9 |
|
$ |
56.7 |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
$ |
96.0 |
|
$ |
90.9 |
|
$ |
59.4 |
|
$ |
54.8 |
|
$ |
79.0 |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for asset category also excludes onshore support costs and general and administrative expense. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
(In millions) |
|
As of |
|||||||||||||
|
Feb 15, 2024 |
|
Nov 1, 2023 |
|
Aug 1, 2023 |
|
May 1, 2023 |
|
Feb 21, 2023 |
|||||
CONTRACT BACKLOG (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
$ |
2,307.6 |
|
$ |
1,726.5 |
|
$ |
1,684.9 |
|
$ |
1,499.0 |
|
$ |
1,062.3 |
Semisubmersibles |
|
224.1 |
|
|
259.5 |
|
|
272.4 |
|
|
270.2 |
|
|
314.6 |
|
$ |
2,531.7 |
|
$ |
1,986.0 |
|
$ |
1,957.3 |
|
$ |
1,769.2 |
|
$ |
1,376.9 |
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh |
|
646.8 |
|
|
327.9 |
|
|
307.4 |
|
|
277.7 |
|
|
348.3 |
HD & SD - Modern |
|
347.1 |
|
|
406.8 |
|
|
366.8 |
|
|
317.7 |
|
|
341.1 |
SD - Legacy |
|
173.5 |
|
|
186.9 |
|
|
118.4 |
|
|
119.7 |
|
|
52.9 |
|
$ |
1,167.4 |
|
$ |
921.6 |
|
$ |
792.6 |
|
$ |
715.1 |
|
$ |
742.3 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
3,699.1 |
|
$ |
2,907.6 |
|
$ |
2,749.9 |
|
$ |
2,484.3 |
|
$ |
2,119.2 |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs |
$ |
222.3 |
|
$ |
250.5 |
|
$ |
291.4 |
|
$ |
318.9 |
|
$ |
344.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
$ |
3,921.4 |
|
$ |
3,158.1 |
|
$ |
3,041.3 |
|
$ |
2,803.2 |
|
$ |
2,463.2 |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Our contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. Contract drilling backlog includes drilling contracts subject to FID and drilling contracts which grant the customer termination rights if FID is not received with respect to projects for which the drilling rig is contracted. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization, contract preparation, as well as customer reimbursables and bonus opportunities. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
AVERAGE DAILY REVENUE (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
$ |
307,000 |
|
$ |
288,000 |
|
$ |
253,000 |
|
$ |
239,000 |
|
$ |
232,000 |
Semisubmersibles |
|
229,000 |
|
|
257,000 |
|
|
252,000 |
|
|
259,000 |
|
|
220,000 |
|
$ |
285,000 |
|
$ |
279,000 |
|
$ |
252,000 |
|
$ |
245,000 |
|
$ |
229,000 |
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh |
$ |
111,000 |
|
$ |
116,000 |
|
$ |
100,000 |
|
$ |
126,000 |
|
$ |
119,000 |
HD & SD Modern |
|
119,000 |
|
|
105,000 |
|
|
102,000 |
|
|
98,000 |
|
|
87,000 |
SD Legacy |
|
79,000 |
|
|
83,000 |
|
|
81,000 |
|
|
76,000 |
|
|
74,000 |
|
$ |
111,000 |
|
$ |
108,000 |
|
$ |
99,000 |
|
$ |
104,000 |
|
$ |
99,000 |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
$ |
174,000 |
|
$ |
171,000 |
|
$ |
158,000 |
|
$ |
154,000 |
|
$ |
143,000 |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs |
$ |
39,000 |
|
$ |
44,000 |
|
$ |
41,000 |
|
$ |
44,000 |
|
$ |
36,000 |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
$ |
136,000 |
|
$ |
134,000 |
|
$ |
124,000 |
|
$ |
124,000 |
|
$ |
115,000 |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Average daily revenue is derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of operating days. Beginning with the third quarter of 2023, we began presenting average daily revenue instead of the previously reported average day rate metric, which further excluded lump-sum revenues and amortization thereof. Average daily revenue is a more comprehensive measurement of our revenue-earning performance and more closely aligns with the calculation methodology used by our closest offshore drilling peers. The prior period has been adjusted to conform with the current period presentation. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
UTILIZATION - TOTAL FLEET (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
60 |
% |
|
58 |
% |
|
58 |
% |
|
59 |
% |
|
62 |
% |
Semisubmersibles |
53 |
% |
|
54 |
% |
|
60 |
% |
|
57 |
% |
|
57 |
% |
|
58 |
% |
|
57 |
% |
|
59 |
% |
|
58 |
% |
|
60 |
% |
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh |
68 |
% |
|
64 |
% |
|
55 |
% |
|
57 |
% |
|
77 |
% |
HD & SD Modern |
52 |
% |
|
51 |
% |
|
52 |
% |
|
57 |
% |
|
55 |
% |
SD Legacy |
97 |
% |
|
69 |
% |
|
78 |
% |
|
99 |
% |
|
99 |
% |
|
62 |
% |
|
58 |
% |
|
55 |
% |
|
62 |
% |
|
68 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
60 |
% |
|
57 |
% |
|
56 |
% |
|
60 |
% |
|
65 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
68 |
% |
|
65 |
% |
|
65 |
% |
|
68 |
% |
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Pro Forma Jackups (2) |
69 |
% |
|
66 |
% |
|
65 |
% |
|
69 |
% |
|
74 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the total fleet. |
|
|
|
|
(2) |
Includes all Valaris jackups including those leased to ARO Drilling. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
UTILIZATION - ACTIVE FLEET (1) (2) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
68 |
% |
|
63 |
% |
|
71 |
% |
|
77 |
% |
|
85 |
% |
Semisubmersibles |
89 |
% |
|
90 |
% |
|
100 |
% |
|
96 |
% |
|
96 |
% |
|
72 |
% |
|
70 |
% |
|
78 |
% |
|
82 |
% |
|
88 |
% |
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh |
83 |
% |
|
79 |
% |
|
67 |
% |
|
67 |
% |
|
85 |
% |
HD & SD Modern |
80 |
% |
|
79 |
% |
|
81 |
% |
|
89 |
% |
|
86 |
% |
SD Legacy |
97 |
% |
|
68 |
% |
|
78 |
% |
|
99 |
% |
|
99 |
% |
|
83 |
% |
|
78 |
% |
|
74 |
% |
|
81 |
% |
|
87 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Total |
79 |
% |
|
75 |
% |
|
76 |
% |
|
81 |
% |
|
87 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Other |
|
|
|
|
|
|
|
|
|
|||||
Leased and Managed Rigs |
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
84 |
% |
|
81 |
% |
|
82 |
% |
|
86 |
% |
|
90 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Pro Forma Jackups (3) |
86 |
% |
|
83 |
% |
|
81 |
% |
|
85 |
% |
|
88 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the active fleet. |
|
|
|
|
(2) |
Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated. |
|
|
|
|
(3) |
Includes all Valaris jackups including those leased to ARO Drilling. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
AVAILABLE DAYS - TOTAL FLEET (1) |
|
|
|
|
|
|
|
|
|
Floaters |
|
|
|
|
|
|
|
|
|
Drillships |
1,032 |
|
1,012 |
|
1,001 |
|
990 |
|
1,012 |
Semisubmersibles |
460 |
|
460 |
|
455 |
|
450 |
|
460 |
|
1,492 |
|
1,472 |
|
1,456 |
|
1,440 |
|
1,472 |
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
1,012 |
|
1,012 |
|
990 |
|
990 |
|
1,012 |
HD & SD Modern |
1,288 |
|
1,288 |
|
1,274 |
|
1,260 |
|
1,288 |
SD Legacy |
184 |
|
184 |
|
199 |
|
270 |
|
276 |
|
2,484 |
|
2,484 |
|
2,463 |
|
2,520 |
|
2,576 |
|
|
|
|
|
|
|
|
|
|
Total |
3,976 |
|
3,956 |
|
3,919 |
|
3,960 |
|
4,048 |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
Leased and Managed Rigs |
920 |
|
920 |
|
910 |
|
900 |
|
920 |
|
|
|
|
|
|
|
|
|
|
Valaris Total |
4,896 |
|
4,876 |
|
4,829 |
|
4,860 |
|
4,968 |
|
|
|
|
|
|
|
|
|
|
(1) |
Represents the maximum number of days available in the period for the total fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, irrespective of asset status. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
AVAILABLE DAYS - ACTIVE FLEET (1) |
|
|
|
|
|
|
|
|
|
Floaters |
|
|
|
|
|
|
|
|
|
Drillships |
920 |
|
920 |
|
819 |
|
751 |
|
736 |
Semisubmersibles |
276 |
|
276 |
|
273 |
|
270 |
|
276 |
|
1,196 |
|
1,196 |
|
1,092 |
|
1,021 |
|
1,012 |
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
828 |
|
828 |
|
808 |
|
841 |
|
920 |
HD & SD Modern |
828 |
|
828 |
|
819 |
|
810 |
|
828 |
SD Legacy |
184 |
|
184 |
|
199 |
|
270 |
|
276 |
|
1,840 |
|
1,840 |
|
1,826 |
|
1,921 |
|
2,024 |
|
|
|
|
|
|
|
|
|
|
Total |
3,036 |
|
3,036 |
|
2,918 |
|
2,942 |
|
3,036 |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
Leased and Managed Rigs |
920 |
|
920 |
|
910 |
|
900 |
|
920 |
|
|
|
|
|
|
|
|
|
|
Valaris Total |
3,956 |
|
3,956 |
|
3,828 |
|
3,842 |
|
3,956 |
|
|
|
|
|
|
|
|
|
|
(1) |
Represents the maximum number of days available in the period for the active fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, for active rigs only. Active rigs are defined as rigs that are not preservation stacked. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
OPERATING DAYS (1) |
|
|
|
|
|
|
|
|
|
Floaters |
|
|
|
|
|
|
|
|
|
Drillships |
622 |
|
584 |
|
583 |
|
581 |
|
623 |
Semisubmersibles |
245 |
|
249 |
|
272 |
|
258 |
|
264 |
|
867 |
|
833 |
|
855 |
|
839 |
|
887 |
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
691 |
|
652 |
|
540 |
|
564 |
|
778 |
HD & SD Modern |
665 |
|
654 |
|
663 |
|
718 |
|
713 |
SD Legacy |
178 |
|
126 |
|
155 |
|
268 |
|
273 |
|
1,534 |
|
1,432 |
|
1,358 |
|
1,550 |
|
1,764 |
|
|
|
|
|
|
|
|
|
|
Total |
2,401 |
|
2,265 |
|
2,213 |
|
2,389 |
|
2,651 |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
Leased and Managed Rigs |
920 |
|
920 |
|
910 |
|
900 |
|
920 |
|
|
|
|
|
|
|
|
|
|
Valaris Total |
3,321 |
|
3,185 |
|
3,123 |
|
3,289 |
|
3,571 |
|
|
|
|
|
|
|
|
|
|
(1) |
Represents the total number of days under contract in the period. Days under contract equals the total number of days that rigs have earned and recognized day rate revenue, including days associated with early contract terminations, compensated downtime and mobilizations. When revenue is deferred and amortized over a future period, for example when we receive fees while mobilizing to commence a new contract or while being upgraded in a shipyard, the related days are excluded from days under contract. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
Three Months Ended |
|||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
|||||
REVENUE EFFICIENCY (1) |
|
|
|
|
|
|
|
|
|
|||||
Floaters |
|
|
|
|
|
|
|
|
|
|||||
Drillships |
88 |
% |
|
89 |
% |
|
95 |
% |
|
97 |
% |
|
96 |
% |
Semisubmersibles |
94 |
% |
|
93 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
90 |
% |
|
90 |
% |
|
96 |
% |
|
98 |
% |
|
97 |
% |
Jackups |
|
|
|
|
|
|
|
|
|
|||||
HD Ultra-Harsh & Harsh |
99 |
% |
|
99 |
% |
|
99 |
% |
|
100 |
% |
|
96 |
% |
HD & SD Modern |
97 |
% |
|
97 |
% |
|
98 |
% |
|
100 |
% |
|
99 |
% |
SD Legacy |
97 |
% |
|
99 |
% |
|
100 |
% |
|
99 |
% |
|
100 |
% |
|
98 |
% |
|
98 |
% |
|
99 |
% |
|
100 |
% |
|
98 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
Valaris Total |
93 |
% |
|
94 |
% |
|
97 |
% |
|
99 |
% |
|
98 |
% |
|
|
|
|
|
|
|
|
|
|
|||||
(1) |
Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue. |
VALARIS LIMITED AND SUBSIDIARIES |
OPERATING STATISTICS |
|
|
As of |
||||||||
NUMBER OF RIGS |
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
Active Fleet (1) |
|
|
|
|
|
|
|
|
|
Floaters |
|
|
|
|
|
|
|
|
|
Drillships |
10 |
|
10 |
|
9 |
|
9 |
|
8 |
Semisubmersibles |
3 |
|
3 |
|
3 |
|
3 |
|
3 |
|
13 |
|
13 |
|
12 |
|
12 |
|
11 |
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
9 |
|
9 |
|
9 |
|
9 |
|
10 |
HD & SD Modern |
9 |
|
9 |
|
9 |
|
9 |
|
9 |
SD Legacy |
2 |
|
2 |
|
2 |
|
3 |
|
3 |
|
20 |
|
20 |
|
20 |
|
21 |
|
22 |
|
|
|
|
|
|
|
|
|
|
Total Active Fleet |
33 |
|
33 |
|
32 |
|
33 |
|
33 |
|
|
|
|
|
|
|
|
|
|
Stacked Fleet |
|
|
|
|
|
|
|
|
|
Floaters |
|
|
|
|
|
|
|
|
|
Drillships |
3 |
|
1 |
|
2 |
|
2 |
|
3 |
Semisubmersibles |
2 |
|
2 |
|
2 |
|
2 |
|
2 |
|
5 |
|
3 |
|
4 |
|
4 |
|
5 |
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
2 |
|
2 |
|
2 |
|
2 |
|
1 |
HD & SD Modern |
5 |
|
5 |
|
5 |
|
5 |
|
5 |
|
7 |
|
7 |
|
7 |
|
7 |
|
6 |
|
|
|
|
|
|
|
|
|
|
Total Stacked Fleet |
12 |
|
10 |
|
11 |
|
11 |
|
11 |
|
|
|
|
|
|
|
|
|
|
Leased Rigs (2) |
|
|
|
|
|
|
|
|
|
Jackups |
|
|
|
|
|
|
|
|
|
HD Ultra-Harsh & Harsh |
1 |
|
1 |
|
1 |
|
1 |
|
1 |
HD & SD Modern |
7 |
|
7 |
|
7 |
|
7 |
|
7 |
Total Leased Rigs |
8 |
|
8 |
|
8 |
|
8 |
|
8 |
|
|
|
|
|
|
|
|
|
|
Valaris Total |
53 |
|
51 |
|
51 |
|
52 |
|
52 |
|
|
|
|
|
|
|
|
|
|
Managed Rigs (2) |
2 |
|
2 |
|
2 |
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
|
(1) |
Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated. |
|
(2) |
Leased rigs and managed rigs included in Other reporting segment. |
ARO DRILLING |
CONDENSED BALANCE SHEET INFORMATION |
(In millions) |
|
|
As of |
|||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Jun 30,
|
|
Mar 31,
|
|
Dec 31,
|
|||||
Cash |
$ |
92.9 |
|
$ |
110.3 |
|
$ |
100.6 |
|
$ |
101.2 |
|
$ |
176.2 |
Other current assets |
|
184.0 |
|
|
191.2 |
|
|
188.3 |
|
|
189.3 |
|
|
140.6 |
Non-current assets |
|
1,081.0 |
|
|
915.3 |
|
|
879.6 |
|
|
830.2 |
|
|
818.1 |
Total assets |
$ |
1,357.9 |
|
$ |
1,216.8 |
|
$ |
1,168.5 |
|
$ |
1,120.7 |
|
$ |
1,134.9 |
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities |
$ |
136.0 |
|
$ |
173.6 |
|
$ |
122.6 |
|
$ |
68.5 |
|
$ |
86.3 |
Non-current liabilities |
|
1,056.8 |
|
|
886.2 |
|
|
887.5 |
|
|
887.4 |
|
|
884.6 |
Total liabilities |
$ |
1,192.8 |
|
$ |
1,059.8 |
|
$ |
1,010.1 |
|
$ |
955.9 |
|
$ |
970.9 |
|
|
|
|
|
|
|
|
|
|
|||||
Shareholders' equity |
$ |
165.1 |
|
$ |
157.0 |
|
$ |
158.4 |
|
$ |
164.8 |
|
$ |
164.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Total liabilities and shareholders' equity |
$ |
1,357.9 |
|
$ |
1,216.8 |
|
$ |
1,168.5 |
|
$ |
1,120.7 |
|
$ |
1,134.9 |
|
|
|
|
|
|
|
|
|
|
|||||
ARO DRILLING |
CONDENSED INCOME STATEMENT INFORMATION |
(In millions) |
|
|
Three Months Ended |
|||||||||||||||
|
Dec 31,
|
|
Sep 30,
|
|
Jun 30,
|
|
Mar 31,
|
|
Dec 31,
|
|||||||
Revenues |
$ |
133.7 |
|
$ |
121.5 |
|
|
$ |
117.8 |
|
|
$ |
123.6 |
|
$ |
120.4 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|||||||
Contract drilling (exclusive of depreciation) |
|
88.0 |
|
|
92.0 |
|
|
|
95.0 |
|
|
|
90.9 |
|
|
85.5 |
Depreciation |
|
19.5 |
|
|
15.8 |
|
|
|
15.6 |
|
|
|
15.0 |
|
|
16.1 |
General and administrative |
|
6.3 |
|
|
5.6 |
|
|
|
5.7 |
|
|
|
4.6 |
|
|
5.6 |
Operating income |
$ |
19.9 |
|
$ |
8.1 |
|
|
$ |
1.5 |
|
|
$ |
13.1 |
|
$ |
13.2 |
Other expense, net |
|
3.6 |
|
|
9.0 |
|
|
|
8.8 |
|
|
|
10.4 |
|
|
1.8 |
Provision for income taxes |
|
6.0 |
|
|
0.4 |
|
|
|
— |
|
|
|
1.9 |
|
|
0.7 |
Net income (loss) |
$ |
10.3 |
|
$ |
(1.3 |
) |
|
$ |
(7.3 |
) |
|
$ |
0.8 |
|
$ |
10.7 |
|
|
|
|
|
|
|
|
|
|
|||||||
EBITDA |
$ |
39.4 |
|
$ |
23.9 |
|
|
$ |
17.1 |
|
|
$ |
28.1 |
|
$ |
29.3 |
ARO Drilling condensed balance sheet and income statement information presented above represents
ARO DRILLING |
OPERATING STATISTICS |
|
As of |
|||||||||||||
(In millions) |
Feb 15, 2024 |
|
Nov 1, 2023 |
|
Aug 1, 2023 |
|
May 1, 2023 |
|
Feb 21, 2023 |
|||||
CONTRACT BACKLOG (1) |
|
|
|
|
|
|
|
|
|
|||||
Owned Rigs |
$ |
1,475.4 |
|
$ |
1,547.0 |
|
$ |
686.3 |
|
$ |
747.7 |
|
$ |
794.3 |
Leased Rigs |
|
662.7 |
|
|
743.7 |
|
|
815.0 |
|
|
884.7 |
|
|
937.5 |
Total |
$ |
2,138.1 |
|
$ |
2,290.7 |
|
$ |
1,501.3 |
|
$ |
1,632.4 |
|
$ |
1,731.8 |
(1) |
Contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization, contract preparation, as well as customer reimbursables and bonus opportunities. |
|
Three Months Ended |
||||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
||||||||||
AVERAGE DAILY REVENUE (1) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
$ |
100,000 |
|
|
$ |
91,000 |
|
|
$ |
90,000 |
|
|
$ |
99,000 |
|
|
$ |
95,000 |
|
Leased Rigs (2) |
|
97,000 |
|
|
|
98,000 |
|
|
|
98,000 |
|
|
|
98,000 |
|
|
|
91,000 |
|
Total |
$ |
98,000 |
|
|
$ |
95,000 |
|
|
$ |
95,000 |
|
|
$ |
98,000 |
|
|
$ |
93,000 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
UTILIZATION (3) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
|
96 |
% |
|
|
91 |
% |
|
|
83 |
% |
|
|
91 |
% |
|
|
96 |
% |
Leased Rigs (2) |
|
94 |
% |
|
|
95 |
% |
|
|
98 |
% |
|
|
95 |
% |
|
|
91 |
% |
Total |
|
95 |
% |
|
|
93 |
% |
|
|
91 |
% |
|
|
93 |
% |
|
|
93 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
REVENUE EFFICIENCY (4) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
|
94 |
% |
|
|
99 |
% |
|
|
95 |
% |
|
|
98 |
% |
|
|
97 |
% |
Leased Rigs (2) |
|
98 |
% |
|
|
97 |
% |
|
|
99 |
% |
|
|
95 |
% |
|
|
93 |
% |
Total |
|
96 |
% |
|
|
98 |
% |
|
|
97 |
% |
|
|
96 |
% |
|
|
95 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
NUMBER OF RIGS (AT QUARTER END) (5) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
|
8 |
|
|
|
7 |
|
|
|
7 |
|
|
|
7 |
|
|
|
7 |
|
Leased Rigs (2) |
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
8 |
|
|
|
8 |
|
Total |
|
16 |
|
|
|
15 |
|
|
|
15 |
|
|
|
15 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
AVAILABLE DAYS (6) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
|
695 |
|
|
|
644 |
|
|
|
637 |
|
|
|
630 |
|
|
|
644 |
|
Leased Rigs (2) |
|
736 |
|
|
|
736 |
|
|
|
728 |
|
|
|
720 |
|
|
|
736 |
|
Total |
|
1,431 |
|
|
|
1,380 |
|
|
|
1,365 |
|
|
|
1,350 |
|
|
|
1,380 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING DAYS (7) |
|
|
|
|
|
|
|
|
|
||||||||||
Owned Rigs |
|
668 |
|
|
|
585 |
|
|
|
532 |
|
|
|
575 |
|
|
|
618 |
|
Leased Rigs (2) |
|
691 |
|
|
|
697 |
|
|
|
713 |
|
|
|
683 |
|
|
|
672 |
|
Total |
|
1,359 |
|
|
|
1,282 |
|
|
|
1,245 |
|
|
|
1,258 |
|
|
|
1,290 |
|
(1) |
Average daily revenue is derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of operating days. |
|
(2) |
All ARO leased rigs are leased from Valaris. |
|
(3) |
Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the rig fleet. |
|
(4) |
Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue. |
|
(5) |
Rig count for owned rigs as of December 31, 2023 excludes a rig under construction, which is expected to be delivered in the first half of 2024. |
|
(6) |
Represents the maximum number of days available in the period for the rig fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, irrespective of asset status. |
|
(7) |
Represents the total number of days under contract in the period. Days under contract equals the total number of days that rigs have earned and recognized day rate revenue, including days associated with early contract terminations, compensated downtime and mobilizations. When revenue is deferred and amortized over a future period, for example when we receive fees while mobilizing to commence a new contract or while being upgraded in a shipyard, the related days are excluded from days under contract. |
Non-GAAP Financial Measures
To supplement Valaris’ condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP measures.
Valaris defines "Adjusted EBITDA" as net income (loss) from continuing operations before income tax expense, interest expense, other (income) expense, depreciation expense, amortization, loss on impairment and equity in (earnings) losses of ARO. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies.
Valaris defines "Adjusted EBITDAR" as Adjusted EBITDA before reactivation costs. Adjusted EBITDAR is a non-GAAP measure that our management uses to assess the performance of our fleet excluding one-time rig reactivation costs. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDAR should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDAR may not be comparable to other similarly titled measures reported by other companies.
Valaris defines ARO "EBITDA" as net income before income tax expense, other expense, net and depreciation expense. EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of ARO's core operating performance and to evaluate ARO's long-term financial performance against that of ARO's peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of ARO's core operating performance and makes it easier to compare ARO's results with those of other companies within ARO's industry. EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. EBITDA may not be comparable to other similarly titled measures reported by other companies.
The Company is not able to provide a reconciliation of the Company's forward-looking Adjusted EBITDA, as discussed on its fourth quarter 2023 earnings conference call, to the most directly comparable GAAP measure without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation, including forward-looking tax expense and other income (expense).
Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Reconciliation of Net Income to Adjusted EBITDA
A reconciliation of net income as reported to Adjusted EBITDA is included in the tables below (in millions):
|
Three Months Ended |
||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
||||
|
|
|
|
||||
VALARIS |
|
|
|
||||
Net income |
$ |
828.5 |
|
|
$ |
17.0 |
|
Add (subtract): |
|
|
|
||||
Income tax expense (benefit) |
|
(790.2 |
) |
|
|
10.7 |
|
Interest expense |
|
21.7 |
|
|
|
19.4 |
|
Other income |
|
(21.7 |
) |
|
|
(30.5 |
) |
Operating income |
|
38.3 |
|
|
|
16.6 |
|
Add (subtract): |
|
|
|
||||
Depreciation expense |
|
27.5 |
|
|
|
25.8 |
|
Equity in earnings of ARO |
|
(8.3 |
) |
|
|
(2.4 |
) |
Adjusted EBITDA |
$ |
57.5 |
|
|
$ |
40.0 |
|
|
Three Months Ended |
|||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|||
|
|
|
|
|||
ARO |
|
|
|
|||
Net income (loss) |
$ |
10.3 |
|
$ |
(1.3 |
) |
Add: |
|
|
|
|||
Income tax expense |
|
6.0 |
|
|
0.4 |
|
Other expense, net |
|
3.6 |
|
|
9.0 |
|
Operating income |
$ |
19.9 |
|
$ |
8.1 |
|
|
|
|
|
|||
Add: |
|
|
|
|||
Depreciation expense |
|
19.5 |
|
|
15.8 |
|
EBITDA |
$ |
39.4 |
|
$ |
23.9 |
|
Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR
(In millions) |
Three Months Ended |
||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
||||
FLOATERS |
|
|
|
||||
Net income |
$ |
24.3 |
|
|
$ |
14.5 |
|
Subtract: |
|
|
|
||||
Other income |
|
(2.1 |
) |
|
|
(0.6 |
) |
Operating income |
$ |
22.2 |
|
|
$ |
13.9 |
|
Add: |
|
|
|
||||
Depreciation |
|
15.0 |
|
|
|
14.2 |
|
Other |
|
— |
|
|
|
0.1 |
|
Adjusted EBITDA |
$ |
37.2 |
|
|
$ |
28.2 |
|
Add: |
|
|
|
||||
Reactivation costs |
|
38.5 |
|
|
|
50.9 |
|
Adjusted EBITDAR |
$ |
75.7 |
|
|
$ |
79.1 |
|
|
|
|
|
||||
JACKUPS |
|
|
|
||||
Net income |
$ |
46.1 |
|
|
$ |
34.4 |
|
Subtract: |
|
|
|
||||
Other income |
|
(1.3 |
) |
|
|
(0.4 |
) |
Operating income |
$ |
44.8 |
|
|
$ |
34.0 |
|
Add: |
|
|
|
||||
Depreciation |
|
11.2 |
|
|
|
10.2 |
|
Adjusted EBITDA |
$ |
56.0 |
|
|
$ |
44.2 |
|
Adjusted EBITDAR |
$ |
56.0 |
|
|
$ |
44.2 |
|
|
|
|
|
||||
OTHER |
|
|
|
||||
Net income |
$ |
22.1 |
|
|
$ |
25.8 |
|
Operating income |
$ |
22.1 |
|
|
$ |
25.8 |
|
Add (subtract): |
|
|
|
||||
Depreciation |
|
1.2 |
|
|
|
1.3 |
|
Other |
|
(0.1 |
) |
|
|
0.1 |
|
Adjusted EBITDA |
$ |
23.2 |
|
|
$ |
27.2 |
|
Adjusted EBITDAR |
$ |
23.2 |
|
|
$ |
27.2 |
|
Reconciliation of Net Income (Loss) to Adjusted EBITDAR
(In millions) |
Three Months Ended |
|||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
ACTIVE FLEET (1) |
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
78.7 |
|
|
$ |
57.5 |
|
|
$ |
68.2 |
|
|
$ |
55.4 |
|
$ |
79.9 |
|
Subtract: |
|
|
|
|
|
|
|
|
||||||||||
Other income |
$ |
(3.3 |
) |
|
$ |
(1.0 |
) |
|
$ |
(27.4 |
) |
|
$ |
— |
|
$ |
(0.9 |
) |
Operating income |
$ |
75.4 |
|
|
$ |
56.5 |
|
|
$ |
40.8 |
|
|
$ |
55.4 |
|
$ |
79.0 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Reactivation costs |
|
38.5 |
|
|
|
50.9 |
|
|
|
44.1 |
|
|
|
26.3 |
|
|
20.7 |
|
Depreciation and amortization |
|
23.5 |
|
|
|
21.9 |
|
|
|
19.6 |
|
|
|
18.9 |
|
|
21.9 |
|
Other |
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.2 |
) |
|
(0.1 |
) |
Adjusted EBITDAR (2) |
$ |
137.5 |
|
|
$ |
129.3 |
|
|
$ |
104.5 |
|
|
$ |
100.4 |
|
$ |
121.5 |
|
|
|
|
|
|
|
|
|
|
||||||||||
LEASED AND MANAGED RIGS |
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
22.1 |
|
|
$ |
25.8 |
|
|
$ |
23.8 |
|
|
$ |
24.0 |
|
$ |
21.2 |
|
Operating income |
$ |
22.1 |
|
|
$ |
25.8 |
|
|
$ |
23.8 |
|
|
$ |
24.0 |
|
$ |
21.2 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Depreciation |
|
1.2 |
|
|
|
1.3 |
|
|
|
1.2 |
|
|
|
1.3 |
|
|
1.3 |
|
Other |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
(0.2 |
) |
Adjusted EBITDAR (2) |
$ |
23.2 |
|
|
$ |
27.2 |
|
|
$ |
24.9 |
|
|
$ |
25.4 |
|
$ |
22.3 |
|
|
|
|
|
|
|
|
|
|
||||||||||
STACKED FLEET |
|
|
|
|
|
|
|
|
||||||||||
Net loss |
$ |
(8.3 |
) |
|
$ |
(8.6 |
) |
|
$ |
(11.7 |
) |
|
$ |
(15.8 |
) |
$ |
(6.9 |
) |
Subtract: |
|
|
|
|
|
|
|
|
||||||||||
Other income |
$ |
(0.1 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.5 |
) |
$ |
(3.9 |
) |
Operating loss |
$ |
(8.4 |
) |
|
$ |
(8.6 |
) |
|
$ |
(11.7 |
) |
|
$ |
(16.3 |
) |
$ |
(10.8 |
) |
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Depreciation |
|
2.7 |
|
|
|
2.5 |
|
|
|
3.6 |
|
|
|
3.2 |
|
|
2.7 |
|
Other |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
— |
|
|
— |
|
Adjusted EBITDAR (2) |
$ |
(5.8 |
) |
|
$ |
(6.0 |
) |
|
$ |
(8.2 |
) |
|
$ |
(13.1 |
) |
$ |
(8.1 |
) |
|
|
|
|
|
|
|
|
|
||||||||||
TOTAL FLEET |
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
92.5 |
|
|
$ |
74.7 |
|
|
$ |
80.3 |
|
|
$ |
63.6 |
|
$ |
94.2 |
|
Subtract: |
|
|
|
|
|
|
|
|
||||||||||
Other income |
$ |
(3.4 |
) |
|
$ |
(1.0 |
) |
|
$ |
(27.4 |
) |
|
$ |
(0.5 |
) |
$ |
(4.8 |
) |
Operating income |
$ |
89.1 |
|
|
$ |
73.7 |
|
|
$ |
52.9 |
|
|
$ |
63.1 |
|
$ |
89.4 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Reactivation costs |
|
38.5 |
|
|
|
50.9 |
|
|
|
44.1 |
|
|
|
26.3 |
|
|
20.7 |
|
Depreciation and amortization |
|
27.4 |
|
|
|
25.7 |
|
|
|
24.4 |
|
|
|
23.4 |
|
|
25.9 |
|
Other |
|
(0.1 |
) |
|
|
0.2 |
|
|
|
(0.2 |
) |
|
|
(0.1 |
) |
|
(0.3 |
) |
Adjusted EBITDAR (2) |
$ |
154.9 |
|
|
$ |
150.5 |
|
|
$ |
121.2 |
|
|
$ |
112.7 |
|
$ |
135.7 |
|
(1) |
Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated. |
|
(2) |
Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense. |
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In millions) |
Three Months Ended |
|||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
DRILLSHIPS |
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
$ |
4.7 |
|
|
$ |
(9.9 |
) |
|
$ |
(12.0 |
) |
|
$ |
0.4 |
|
$ |
7.3 |
|
Subtract: |
|
|
|
|
|
|
|
|
||||||||||
Other income |
$ |
(2.0 |
) |
|
$ |
(0.6 |
) |
|
$ |
(0.4 |
) |
|
$ |
(0.3 |
) |
$ |
(0.9 |
) |
Operating income (loss) |
$ |
2.7 |
|
|
$ |
(10.5 |
) |
|
$ |
(12.4 |
) |
|
$ |
0.1 |
|
$ |
6.4 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Depreciation |
|
14.0 |
|
|
|
13.2 |
|
|
|
12.8 |
|
|
|
12.2 |
|
|
12.1 |
|
Other |
|
— |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
— |
|
Adjusted EBITDA (1) |
$ |
16.7 |
|
|
$ |
2.8 |
|
|
$ |
0.3 |
|
|
$ |
12.2 |
|
$ |
18.5 |
|
|
|
|
|
|
|
|
|
|
||||||||||
SEMISUBMERSIBLES
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
19.6 |
|
|
$ |
24.4 |
|
|
$ |
29.9 |
|
|
$ |
27.1 |
|
$ |
19.3 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
||||||||||
Other (income) expense |
$ |
(0.1 |
) |
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
— |
|
$ |
(0.2 |
) |
Operating income |
$ |
19.5 |
|
|
$ |
24.4 |
|
|
$ |
30.0 |
|
|
$ |
27.1 |
|
$ |
19.1 |
|
Add: |
|
|
|
|
|
|
|
|
||||||||||
Depreciation |
|
1.0 |
|
|
|
1.0 |
|
|
|
0.8 |
|
|
|
0.9 |
|
|
0.8 |
|
Other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
0.1 |
|
Adjusted EBITDA (1) |
$ |
20.5 |
|
|
$ |
25.4 |
|
|
$ |
30.8 |
|
|
$ |
28.0 |
|
$ |
20.0 |
|
(1) |
Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense. |
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In millions) |
Three Months Ended |
||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
Dec 31, 2022 |
|||||
HD ULTRA-HARSH & HARSH JACKUPS |
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
) |
|
|
Subtract: |
|
|
|
|
|
|
|
|
|||||
Other income |
|
) |
|
|
) |
|
$ — |
|
|
|
) |
|
) |
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
) |
|
|
Add (subtract): |
|
|
|
|
|
|
|
|
|||||
Depreciation |
5.8 |
|
|
5.7 |
|
|
5.7 |
|
|
5.8 |
|
5.7 |
|
Other |
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
(0.1 |
) |
Adjusted EBITDA (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
HD & SD MODERN JACKUPS |
|
|
|
|
|
|
|
|
|||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract: |
|
|
|
|
|
|
|
|
|||||
Other income |
|
) |
|
|
) |
|
|
) |
|
|
) |
|
) |
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
3.0 |
|
|
2.9 |
|
|
2.9 |
|
|
2.4 |
|
4.4 |
|
Other |
0.1 |
|
|
— |
|
|
(0.1 |
) |
|
(0.1 |
) |
(0.1 |
) |
Adjusted EBITDA (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
SD LEGACY JACKUPS |
|
|
|
|
|
|
|
|
|||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract: |
|
|
|
|
|
|
|
|
|||||
Other income |
$ — |
|
|
$ — |
|
|
|
) |
|
$ — |
|
|
) |
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
|
|||||
Depreciation |
2.4 |
|
|
1.6 |
|
|
1.0 |
|
|
0.9 |
|
1.6 |
|
Other |
(0.1 |
) |
|
— |
|
|
0.1 |
|
|
0.1 |
|
— |
|
Adjusted EBITDA (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221354956/en/
Investor & Media Contacts:
Darin Gibbins
Vice President - Investor Relations and Treasurer
+1-713-979-4623
Tim Richardson
Director - Investor Relations
+1-713-979-4619
Source: Valaris Limited
FAQ
What were Valaris' net income and adjusted EBITDA in the fourth quarter of 2023?
How much was Valaris' contract backlog as of February 15, 2024?
What was the revenue efficiency for Valaris in the fourth quarter of 2023?
Did Valaris experience any decrease in cash and cash equivalents in the fourth quarter of 2023?
How much did Valaris spend on capital expenditures in the fourth quarter of 2023?
