VAL Valaris Limited

Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported third quarter 2024 results.

President and Chief Executive Officer Anton Dibowitz said, “We delivered strong operating performance and financial results in the third quarter, including solid free cash flow generation. Our fleetwide revenue efficiency of 98% included a full quarter of operations for VALARIS DS-7 following its contract startup in the second quarter. Building on our track record of safe, reliable and efficient operations, we are proud to be recognized for the second consecutive year by the Center for Offshore Safety with its Safety Leadership Award for the development of our Restricted Zone Analysis tool.”

Dibowitz added, “We maintain our conviction in the strength and duration of this upcycle and believe Valaris is well positioned to drive long-term value creation. While we have seen some customer demand deferred, the outlook for 2026 and beyond remains robust. We continue to focus on securing attractive, long-term work for our available rig fleet to support our earnings and cash flow growth."

Dibowitz concluded, “As expected, our free cash flow profile improved relative to the first half of the year, and we repurchased $100 million of shares during the third quarter. We remain committed to returning 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 $63 million and Adjusted EBITDA of $150 million;
• Revenue efficiency of 98%;
• Generated $193 million of cash from operating activities and $111 million of free cash flow;
• Repurchased $100 million of shares;
• Recognized by the Center for Offshore Safety with its 2024 Safety Leadership Award for development of the Restricted Zone Analysis tool;
• Full quarter of operations for drillship VALARIS DS-7 following completion of its reactivation and contract startup in the second quarter; and
• Three-year contract extension for jackup VALARIS 118 awarded in October, adding $168 million of contract backlog.

Third Quarter Review

Net income decreased to $63 million from $151 million in the second quarter 2024. Net income included tax expense of $24 million compared to a tax benefit of $30 million in the second quarter. Adjusted EBITDA increased to $150 million from $139 million in the second quarter primarily due to a full quarter of operations for VALARIS DS-7 following its contract startup and higher average daily revenue for the floater fleet. These items were partially offset by lower utilization for VALARIS DPS-5 and DS-10 as well as out of service time and repair costs for VALARIS 249 due to leg repairs.

Revenues increased to $643 million from $610 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $598 million from $573 million in the second quarter primarily due to an increase in operating days and amortized mobilization revenue associated with VALARIS 247, a full quarter of operations for VALARIS DS-7 and higher average daily revenue for the floater fleet. These items were partially offset by lower utilization for VALARIS DPS-5 and DS-10 as well as out of service time for VALARIS 249.

Contract drilling expense increased to $462 million from $439 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense increased to $423 million from $407 million in the second quarter primarily due to an increase in amortized mobilization expense associated with VALARIS 247 and higher costs associated with a full quarter of operations for VALARIS DS-7. This was partially offset by lower reactivation expense and lower personnel costs for VALARIS DS-17 associated with a change in operating location.

Depreciation expense increased to $32 million from $30 million in the second quarter 2024 primarily due to new assets placed in service for certain rigs following reactivation projects and capital upgrades. General and administrative expense decreased to $31 million from $33 million in the second quarter 2024 primarily due to lower professional fees.

Other expense was $8 million compared to other income of $12 million in the second quarter 2024 primarily due to a decrease in interest income and foreign currency exchange losses compared to gains in the second quarter.

Tax expense was $24 million compared to tax benefit of $30 million in the second quarter 2024. The third quarter tax provision included an immaterial discrete tax expense and the second quarter tax provision included $64 million of discrete tax benefit, which were primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. Adjusted for discrete tax items, tax expense decreased to $24 million from $34 million in the second quarter.

Capital expenditures of $82 million decreased from $110 million in the second quarter 2024 primarily due to lower maintenance and upgrade capital expenditures.

Cash and cash equivalents and restricted cash decreased to $392 million as of September 30, 2024, from $410 million as of June 30, 2024. The decrease was primarily due to share repurchases and capital expenditures, partially offset by cash flow from operations.

Third Quarter Segment Review

Floaters

Floater revenues increased to $389 million from $384 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $373 million from $370 million in the second quarter. The increase was primarily due to more operating days for VALARIS DS-7, which commenced a contract in the second quarter, and higher average daily revenue for the floater fleet mostly due to VALARIS DS-16, which started a new higher day rate contract late in the second quarter. This was partially offset by fewer operating days for VALARIS DPS-5 and DS-10, which completed their contracts in the third quarter.

Contract drilling expense decreased to $248 million from $257 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense decreased to $235 million from $245 million in the second quarter. The decrease was primarily due to lower reactivation expense as VALARIS DS-7 returned to work in the second quarter and lower personnel expense for VALARIS DS-17 associated with a change in operating location. This was partially offset by higher costs associated with a full quarter of operations for VALARIS DS-7.

Jackups

Jackup revenues increased to $214 million from $186 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $193 million from $167 million in the second quarter primarily due to operating days and amortized mobilization revenue associated with VALARIS 247, which commenced a contract offshore Australia in July following its mobilization from the UK. This was partially offset by out of service time for leg repairs on VALARIS 249.

Contract drilling expense increased to $157 million from $123 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense increased to $137 million from $108 million in the second quarter primarily due to an increase in amortized mobilization expense associated with VALARIS 247 and repair costs for VALARIS 249.

ARO Drilling

Revenues decreased to $114 million from $124 million in the second quarter 2024 primarily due to the contract termination for VALARIS 143 in the second quarter and contract suspensions for VALARIS 147 and 148 during the third quarter. Subsequently, ARO elected to terminate these suspended contracts in October. Contract drilling expense of $94 million was in line with the second quarter.

Other

Revenues of $40 million were in line with the second quarter 2024. Contract drilling expense increased to $22 million from $20 million in the second quarter.

 

Three Months Ended

 

(Unaudited)

 

Floaters

 

Jackups

 

ARO (1)

 

Other

 

Reconciling Items (1)(2)

 

Consolidated Total

(in millions of $, except %)

Q3

2024

Q2

2024

Chg

 

Q3

2024

Q2

2024

Chg

 

Q3

2024

Q2

2024

Chg

 

Q3

2024

Q2

2024

Chg

 

Q3

2024

Q2

2024

 

Q3

2024

Q2

2024

Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

389.0

$

383.9

1

%

 

$

213.7

$

185.8

15

%

 

$

113.7

 

$

124.2

 

(8

)%

 

$

40.4

$

40.4

—

%

 

$

(113.7

)

$

(124.2

)

 

$

643.1

 

$

610.1

 

5

%

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

247.7

 

257.4

4

%

 

 

156.7

 

123.2

(27

)%

 

 

93.8

 

 

94.1

 

—

%

 

 

22.1

 

19.6

(13

)%

 

 

(58.2

)

 

(55.6

)

 

 

462.1

 

 

438.7

 

(5

)%

Loss on impairment

 

—

 

—

—

%

 

 

—

 

—

—

%

 

 

28.4

 

 

—

 

nm

 

 

—

 

—

—

%

 

 

(28.4

)

 

—

 

 

 

—

 

 

—

 

—

%

Depreciation

 

14.8

 

14.1

(5

)%

 

 

11.4

 

10.9

(5

)%

 

 

21.1

 

 

19.7

 

(7

)%

 

 

2.9

 

2.5

(16

)%

 

 

(18.5

)

 

(17.5

)

 

 

31.7

 

 

29.7

 

(7

)%

General and admin.

 

—

 

—

—

%

 

 

—

 

—

—

%

 

 

4.9

 

 

5.5

 

11

%

 

 

—

 

—

—

%

 

 

25.7

 

 

27.0

 

 

 

30.6

 

 

32.5

 

6

%

Equity in losses of ARO

 

—

 

—

—

%

 

 

—

 

—

—

%

 

 

—

 

 

—

 

—

%

 

 

—

 

—

—

%

 

 

(23.8

)

 

(0.3

)

 

 

(23.8

)

 

(0.3

)

nm

Operating income (loss)

$

126.5

$

112.4

13

%

 

$

45.6

$

51.7

(12

)%

 

$

(34.5

)

$

4.9

 

nm

 

$

15.4

$

18.3

(16

)%

 

$

(58.1

)

$

(78.4

)

 

$

94.9

 

$

108.9

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

126.8

$

114.1

11

%

 

$

45.7

$

52.8

(13

)%

 

$

(54.0

)

$

(6.7

)

nm

 

$

16.3

$

18.3

(11

)%

 

$

(71.9

)

$

(27.7

)

 

$

62.9

 

$

150.8

 

(58

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

141.3

$

126.4

12

%

 

$

57.0

$

62.6

(9

)%

 

$

15.0

 

$

24.6

 

(39

)%

 

$

18.3

$

20.8

(12

)%

 

$

(81.2

)

$

(95.5

)

 

$

150.4

 

$

138.9

 

8

%

Adjusted EBITDAR

$

143.2

$

137.3

4

%

 

$

57.0

$

62.6

(9

)%

 

$

15.0

 

$

24.6

 

(39

)%

 

$

18.3

$

20.8

(12

)%

 

$

(81.2

)

$

(95.5

)

 

$

152.3

 

$

149.8

 

2

%

nm - Not meaningful

(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."

 

As previously announced, Valaris will hold its third quarter 2024 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Thursday, October 31, 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 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 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, including in any return of capital plans; 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)

(Unaudited)

Three Months Ended

 

Sep 30, 2024

 

Jun 30, 2024

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

OPERATING REVENUES

$

643.1

 

 

$

610.1

 

 

$

525.0

 

 

$

483.8

 

 

$

455.1

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

462.1

 

 

 

438.7

 

 

 

444.8

 

 

 

402.0

 

 

 

390.9

 

Depreciation

 

31.7

 

 

 

29.7

 

 

 

26.8

 

 

 

27.5

 

 

 

25.8

 

General and administrative

 

30.6

 

 

 

32.5

 

 

 

26.5

 

 

 

24.3

 

 

 

24.2

 

Total operating expenses

 

524.4

 

 

 

500.9

 

 

 

498.1

 

 

 

453.8

 

 

 

440.9

 

EQUITY IN EARNINGS (LOSSES) OF ARO

 

(23.8

)

 

 

(0.3

)

 

 

2.4

 

 

 

8.3

 

 

 

2.4

 

OPERATING INCOME

 

94.9

 

 

 

108.9

 

 

 

29.3

 

 

 

38.3

 

 

 

16.6

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest income

 

17.5

 

 

 

31.0

 

 

 

21.0

 

 

 

27.2

 

 

 

26.6

 

Interest expense, net

 

(22.4

)

 

 

(22.6

)

 

 

(17.7

)

 

 

(21.7

)

 

 

(19.4

)

Other, net

 

(2.8

)

 

 

3.5

 

 

 

5.8

 

 

 

(5.5

)

 

 

3.9

 

 

 

(7.7

)

 

 

11.9

 

 

 

9.1

 

 

 

—

 

 

 

11.1

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

87.2

 

 

 

120.8

 

 

 

38.4

 

 

 

38.3

 

 

 

27.7

 

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

24.3

 

 

 

(30.0

)

 

 

12.9

 

 

 

(790.2

)

 

 

10.7

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

62.9

 

 

 

150.8

 

 

 

25.5

 

 

 

828.5

 

 

 

17.0

 

 

 

 

 

 

 

 

 

 

 

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

1.7

 

 

 

(1.2

)

 

 

—

 

 

 

6.7

 

 

 

(4.1

)

 

 

 

 

 

 

 

 

 

 

NET INCOME ATTRIBUTABLE TO VALARIS

$

64.6

 

 

$

149.6

 

 

$

25.5

 

 

$

835.2

 

 

$

12.9

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

Basic

$

0.89

 

 

$

2.07

 

 

$

0.35

 

 

$

11.47

 

 

$

0.18

 

Diluted

$

0.88

 

 

$

2.03

 

 

$

0.35

 

 

$

11.30

 

 

$

0.17

 

WEIGHTED-AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

Basic

 

72.4

 

 

 

72.4

 

 

 

72.4

 

 

 

72.8

 

 

 

73.7

 

Diluted

 

73.2

 

 

 

73.7

 

 

 

73.6

 

 

 

73.9

 

 

 

74.8

 

   

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

As of

 

Sep 30,

2024

Jun 30,

2024

Mar 31,

2024

Dec 31,

2023

Sep 30,

2023

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

$

379.3

$

398.3

$

494.1

$

620.5

$

1,041.1

Restricted cash

 

12.9

 

12.0

 

15.0

 

15.2

 

16.2

Accounts receivable, net

 

555.8

 

631.7

 

510.9

 

459.3

 

492.4

Other current assets

 

163.5

 

182.6

 

177.6

 

177.2

 

178.7

Total current assets

$

1,111.5

$

1,224.6

$

1,197.6

$

1,272.2

$

1,728.4

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

1,842.7

 

1,809.4

 

1,732.3

 

1,633.8

 

1,159.9

 

 

 

 

 

 

LONG-TERM NOTES RECEIVABLE FROM ARO

 

265.4

 

259.2

 

289.3

 

282.3

 

275.2

 

 

 

 

 

 

INVESTMENT IN ARO

 

102.7

 

126.5

 

126.8

 

124.4

 

116.1

 

 

 

 

 

 

DEFERRED TAX ASSETS

 

837.0

 

841.1

 

854.8

 

855.1

 

53.8

 

 

 

 

 

 

OTHER ASSETS

 

174.1

 

154.8

 

153.6

 

154.4

 

151.5

 

 

 

 

 

 

 

$

4,333.4

$

4,415.6

$

4,354.4

$

4,322.2

$

3,484.9

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable - trade

$

303.7

$

347.0

$

394.2

$

400.1

$

376.4

Accrued liabilities and other

 

388.6

 

360.6

 

366.5

 

344.2

 

346.6

Total current liabilities

$

692.3

$

707.6

$

760.7

$

744.3

$

723.0

 

 

 

 

 

 

LONG-TERM DEBT

 

1,081.8

 

1,081.0

 

1,080.1

 

1,079.3

 

1,079.4

 

 

 

 

 

 

DEFERRED TAX LIABILITIES

 

31.1

 

31.2

 

31.6

 

29.9

 

17.1

 

 

 

 

 

 

OTHER LIABILITIES

 

404.4

 

408.4

 

451.7

 

471.7

 

465.4

 

 

 

 

 

 

TOTAL LIABILITIES

 

2,209.6

 

2,228.2

 

2,324.1

 

2,325.2

 

2,284.9

 

 

 

 

 

 

TOTAL EQUITY

 

2,123.8

 

2,187.4

 

2,030.3

 

1,997.0

 

1,200.0

 

 

 

 

 

 

 

$

4,333.4

$

4,415.6

$

4,354.4

$

4,322.2

$

3,484.9

   

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

OPERATING ACTIVITIES

 

 

 

Net income

$

239.2

 

 

$

38.3

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation expense

 

88.2

 

 

 

73.6

 

Accretion of discount on notes receivable from ARO

 

(33.8

)

 

 

(21.2

)

Share-based compensation expense

 

22.4

 

 

 

19.5

 

Equity in losses (earnings) of ARO

 

21.7

 

 

 

(5.0

)

Deferred income tax expense

 

19.3

 

 

 

2.3

 

Net (gain) loss on sale of property

 

0.3

 

 

 

(27.9

)

Loss on extinguishment of debt

 

—

 

 

 

29.2

 

Changes in contract liabilities

 

(13.5

)

 

 

(3.9

)

Changes in deferred costs

 

32.6

 

 

 

(29.3

)

Other

 

5.0

 

 

 

5.2

 

Changes in other operating assets and liabilities

 

(131.0

)

 

 

94.5

 

Contributions to pension plans and other post-retirement benefits

 

(19.6

)

 

 

(4.5

)

Net cash provided by operating activities

$

230.8

 

 

$

170.8

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

Additions to property and equipment

$

(343.4

)

 

$

(233.1

)

Net proceeds from disposition of assets

 

0.2

 

 

 

29.2

 

Net cash used in investing activities

$

(343.2

)

 

$

(203.9

)

 

 

 

 

FINANCING ACTIVITIES

 

 

 

Payments for share repurchases

$

(101.4

)

 

$

(147.4

)

Payments related to tax withholdings for share-based awards

 

(29.7

)

 

 

(5.2

)

Issuance of Second Lien Notes

 

—

 

 

 

1,103.0

 

Redemption of First Lien Notes

 

—

 

 

 

(571.8

)

Debt issuance costs

 

—

 

 

 

(36.7

)

Net cash provided by (used in) financing activities

$

(131.1

)

 

$

341.9

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

(243.5

)

 

$

308.8

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

635.7

 

 

 

748.5

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

392.2

 

 

$

1,057.3

 

   

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

Jun 30,

2024

Mar 31,

2024

Dec 31,

2023

Sep 30,

2023

OPERATING ACTIVITIES

 

 

 

 

 

Net income

$

62.9

 

$

150.8

 

$

25.5

 

$

828.5

 

$

17.0

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation expense

 

31.7

 

 

29.7

 

 

26.8

 

 

27.5

 

 

25.8

 

Equity in losses (earnings) of ARO

 

23.8

 

 

0.3

 

 

(2.4

)

 

(8.3

)

 

(2.4

)

Share-based compensation expense

 

7.0

 

 

7.4

 

 

8.0

 

 

7.8

 

 

6.8

 

Accretion of discount on notes receivable from ARO

 

(6.2

)

 

(20.6

)

 

(7.0

)

 

(7.1

)

 

(7.2

)

Deferred income tax expense (benefit)

 

3.8

 

 

13.5

 

 

2.0

 

 

(788.7

)

 

(4.8

)

Net (gain) loss on sale of property

 

0.2

 

 

—

 

 

0.1

 

 

(0.7

)

 

—

 

Changes in contract liabilities

 

11.3

 

 

(17.8

)

 

(7.0

)

 

8.8

 

 

3.6

 

Changes in deferred costs

 

33.4

 

 

(3.0

)

 

2.2

 

 

3.2

 

 

(22.4

)

Other

 

0.8

 

 

2.4

 

 

1.8

 

 

0.6

 

 

2.7

 

Changes in other operating assets and liabilities

 

37.8

 

 

(147.5

)

 

(21.3

)

 

27.3

 

 

31.0

 

Contributions to pension plans and other post-retirement benefits

 

(13.5

)

 

(3.7

)

 

(2.4

)

 

(2.2

)

 

(1.9

)

Net cash provided by operating activities

$

193.0

 

$

11.5

 

$

26.3

 

$

96.7

 

$

48.2

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Additions to property and equipment

$

(81.9

)

$

(110.2

)

$

(151.3

)

$

(463.0

)

$

(105.8

)

Net proceeds from disposition of assets

 

0.1

 

 

0.1

 

 

—

 

 

1.1

 

 

0.1

 

Net cash used in investing activities

$

(81.8

)

$

(110.1

)

$

(151.3

)

$

(461.9

)

$

(105.7

)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Payments for share repurchases

$

(100.0

)

$

—

 

$

(1.4

)

$

(51.2

)

$

(83.0

)

Payments for tax withholdings for share-based awards

 

(29.3

)

 

(0.2

)

 

(0.2

)

 

(0.2

)

 

(4.8

)

Debt issuance costs

 

—

 

 

—

 

 

—

 

 

(1.9

)

 

(5.7

)

Issuance of Second Lien Notes

 

—

 

 

—

 

 

—

 

 

—

 

 

403.0

 

Other

 

—

 

 

—

 

 

—

 

 

(3.1

)

 

—

 

Net cash provided by (used in) financing activities

$

(129.3

)

$

(0.2

)

$

(1.6

)

$

(56.4

)

$

309.5

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

(18.1

)

$

(98.8

)

$

(126.6

)

$

(421.6

)

$

252.0

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

410.3

 

 

509.1

 

 

635.7

 

 

1,057.3

 

 

805.3

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

392.2

 

$

410.3

 

$

509.1

 

$

635.7

 

$

1,057.3

 

   

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

REVENUES

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

322.3

 

$

291.5

 

$

249.6

 

$

190.7

 

$

168.2

Semisubmersibles

 

50.9

 

 

78.9

 

 

60.2

 

 

56.3

 

 

64.1

 

$

373.2

 

$

370.4

 

$

309.8

 

$

247.0

 

$

232.3

Reimbursable and Other Revenues (1)

 

15.8

 

 

13.5

 

 

14.6

 

 

16.2

 

 

11.0

Total Floaters

$

389.0

 

$

383.9

 

$

324.4

 

$

263.2

 

$

243.3

 

 

 

 

 

 

 

 

 

 

Jackups (2)

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

118.8

 

$

87.6

 

$

67.5

 

$

76.6

 

$

75.5

HD & SD Modern

 

58.4

 

 

63.7

 

 

56.9

 

 

79.0

 

 

68.8

SD Legacy

 

15.4

 

 

15.4

 

 

14.8

 

 

14.2

 

 

10.5

 

$

192.6

 

$

166.7

 

$

139.2

 

$

169.8

 

$

154.8

Reimbursable and Other Revenues (1)

 

21.1

 

 

19.1

 

 

13.1

 

 

9.5

 

 

11.1

Total Jackups

$

213.7

 

$

185.8

 

$

152.3

 

$

179.3

 

$

165.9

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

32.4

 

$

35.6

 

$

42.1

 

$

36.0

 

$

40.1

Reimbursable and Other Revenues (1)

 

8.0

 

 

4.8

 

 

6.2

 

 

5.3

 

 

5.8

Total Other

$

40.4

 

$

40.4

 

$

48.3

 

$

41.3

 

$

45.9

 

 

 

 

 

 

 

 

 

 

Total Operating Revenues

$

643.1

 

$

610.1

 

$

525.0

 

$

483.8

 

$

455.1

 

 

 

 

 

 

 

 

 

 

Total Reimbursable and Other Revenues (1)

$

44.9

 

$

37.4

 

$

33.9

 

$

31.0

 

$

27.9

 

 

 

 

 

 

 

 

 

 

Revenues Excluding Reimbursable and Other Revenues

$

598.2

 

$

572.7

 

$

491.1

 

$

452.8

 

$

427.2

(1)

Reimbursable and other revenues includes 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)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

ADJUSTED EBITDA (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

130.9

 

$

91.2

 

$

55.6

 

$

16.7

 

$

2.8

Semisubmersibles

 

10.4

 

 

35.2

 

 

15.4

 

 

20.5

 

 

25.4

 

$

141.3

 

$

126.4

 

$

71.0

 

$

37.2

 

$

28.2

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

31.4

 

$

36.3

 

$

5.4

 

$

21.1

 

$

20.9

HD & SD Modern

 

20.0

 

 

21.3

 

 

8.6

 

 

30.1

 

 

20.4

SD Legacy

 

5.6

 

 

5.0

 

 

4.4

 

 

4.8

 

 

2.9

 

$

57.0

 

$

62.6

 

$

18.4

 

$

56.0

 

$

44.2

 

 

 

 

 

 

 

 

 

 

Total

$

198.3

 

$

189.0

 

$

89.4

 

$

93.2

 

$

72.4

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

18.3

 

$

20.8

 

$

26.1

 

$

23.2

 

$

27.2

 

 

 

 

 

 

 

 

 

 

Total

$

216.6

 

$

209.8

 

$

115.5

 

$

116.4

 

$

99.6

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

30.6

 

$

32.5

 

$

26.5

 

$

24.3

 

$

24.2

Onshore support costs

 

35.6

 

 

38.4

 

 

35.3

 

 

34.6

 

 

35.4

 

$

66.2

 

$

70.9

 

$

61.8

 

$

58.9

 

$

59.6

 

 

 

 

 

 

 

 

 

 

Total

$

150.4

 

$

138.9

 

$

53.7

 

$

57.5

 

$

40.0

(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)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

Active Fleet (2)

$

213.1

 

 

$

218.1

 

 

$

126.3

 

 

$

137.5

 

 

$

129.3

 

Leased and Managed Rigs

 

18.3

 

 

 

20.8

 

 

 

26.1

 

 

 

23.2

 

 

 

27.2

 

 

$

231.4

 

 

$

238.9

 

 

$

152.4

 

 

$

160.7

 

 

$

156.5

 

 

 

 

 

 

 

 

 

 

 

Stacked Fleet (3)

 

(12.9

)

 

 

(18.2

)

 

 

(6.6

)

 

 

(5.8

)

 

 

(6.0

)

 

$

218.5

 

 

$

220.7

 

 

$

145.8

 

 

$

154.9

 

 

$

150.5

 

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

30.6

 

 

$

32.5

 

 

$

26.5

 

 

$

24.3

 

 

$

24.2

 

Onshore support costs

 

35.6

 

 

 

38.4

 

 

 

35.3

 

 

 

34.6

 

 

 

35.4

 

 

$

66.2

 

 

$

70.9

 

 

$

61.8

 

 

$

58.9

 

 

$

59.6

 

 

 

 

 

 

 

 

 

 

 

Total

$

152.3

 

 

$

149.8

 

 

$

84.0

 

 

$

96.0

 

 

$

90.9

 

 

 

 

 

 

 

 

 

 

 

Reactivation costs (4)

$

1.9

 

 

$

10.9

 

 

$

30.3

 

 

$

38.5

 

 

$

50.9

 

(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)

Adjusted EBITDAR for the 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)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

132.8

 

$

102.1

 

$

85.9

 

$

55.2

 

$

53.7

Semisubmersibles

 

10.4

 

 

35.2

 

 

15.4

 

 

20.5

 

 

25.4

 

$

143.2

 

$

137.3

 

$

101.3

 

$

75.7

 

$

79.1

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

31.4

 

$

36.3

 

$

5.4

 

$

21.1

 

$

20.9

HD & SD Modern

 

20.0

 

 

21.3

 

 

8.6

 

 

30.1

 

 

20.4

SD Legacy

 

5.6

 

 

5.0

 

 

4.4

 

 

4.8

 

 

2.9

 

$

57.0

 

$

62.6

 

$

18.4

 

$

56.0

 

$

44.2

 

 

 

 

 

 

 

 

 

 

Total

$

200.2

 

$

199.9

 

$

119.7

 

$

131.7

 

$

123.3

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

18.3

 

$

20.8

 

$

26.1

 

$

23.2

 

$

27.2

 

 

 

 

 

 

 

 

 

 

Total

$

218.5

 

$

220.7

 

$

145.8

 

$

154.9

 

$

150.5

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

30.6

 

$

32.5

 

$

26.5

 

$

24.3

 

$

24.2

Onshore support costs

 

35.6

 

 

38.4

 

 

35.3

 

 

34.6

 

 

35.4

 

$

66.2

 

$

70.9

 

$

61.8

 

$

58.9

 

$

59.6

 

 

 

 

 

 

 

 

 

 

Total

$

152.3

 

$

149.8

 

$

84.0

 

$

96.0

 

$

90.9

(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)

(Unaudited)

 

As of

 

Oct 30,

2024

 

Jul 29,

2024

 

Apr 30,

2024

 

Feb 15,

2024

 

Nov 1,

2023

CONTRACT BACKLOG (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

2,289.7

 

$

2,508.3

 

$

2,223.9

 

$

2,307.6

 

$

1,726.5

Semisubmersibles

 

106.0

 

 

122.1

 

 

180.7

 

 

224.1

 

 

259.5

 

$

2,395.7

 

$

2,630.4

 

$

2,404.6

 

$

2,531.7

 

$

1,986.0

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

635.1

 

$

665.0

 

$

607.0

 

$

646.8

 

$

327.9

HD & SD Modern

 

585.2

 

 

438.9

 

 

449.1

 

 

347.1

 

 

406.8

SD Legacy

 

178.4

 

 

189.0

 

 

128.8

 

 

173.5

 

 

186.9

 

$

1,389.7

 

$

1,292.9

 

$

1,184.9

 

$

1,167.4

 

$

921.6

 

 

 

 

 

 

 

 

 

 

Total

$

3,794.4

 

$

3,923.3

 

$

3,589.5

 

$

3,699.1

 

$

2,907.6

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

310.4

 

$

384.2

 

$

427.7

 

$

222.3

 

$

250.5

 

 

 

 

 

 

 

 

 

 

Total

$

4,104.8

 

$

4,307.5

 

$

4,017.2

 

$

3,921.4

 

$

3,158.1

(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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

AVERAGE DAILY REVENUE (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

386,000

 

$

358,000

 

$

328,000

 

$

307,000

 

$

288,000

Semisubmersibles

 

247,000

 

 

289,000

 

 

261,000

 

 

229,000

 

 

257,000

 

$

359,000

 

$

340,000

 

$

312,000

 

$

285,000

 

$

279,000

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

163,000

 

$

134,000

 

$

123,000

 

$

111,000

 

$

116,000

HD & SD Modern

 

111,000

 

 

115,000

 

 

103,000

 

 

119,000

 

 

105,000

SD Legacy

 

84,000

 

 

85,000

 

 

81,000

 

 

79,000

 

 

83,000

 

$

133,000

 

$

120,000

 

$

108,000

 

$

111,000

 

$

108,000

 

 

 

 

 

 

 

 

 

 

Total

$

228,000

 

$

217,000

 

$

197,000

 

$

174,000

 

$

171,000

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

32,000

 

$

37,000

 

$

45,000

 

$

39,000

 

$

44,000

 

 

 

 

 

 

 

 

 

 

Total

$

171,000

 

$

167,000

 

$

153,000

 

$

136,000

 

$

134,000

(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, revenues attributable to amortization of drilling contract intangibles and lump-sum revenues and amortization thereof, by the aggregate number of operating days.

   

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

UTILIZATION - TOTAL FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

70

%

 

69

%

 

64

%

 

60

%

 

58

%

Semisubmersibles

45

%

 

60

%

 

51

%

 

53

%

 

54

%

 

63

%

 

66

%

 

61

%

 

58

%

 

57

%

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

72

%

 

65

%

 

55

%

 

68

%

 

64

%

HD & SD Modern

44

%

 

45

%

 

44

%

 

52

%

 

51

%

SD Legacy

100

%

 

100

%

 

100

%

 

97

%

 

69

%

 

60

%

 

58

%

 

53

%

 

62

%

 

58

%

 

 

 

 

 

 

 

 

 

 

Total

61

%

 

61

%

 

56

%

 

60

%

 

57

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

Total

69

%

 

69

%

 

64

%

 

68

%

 

65

%

 

 

 

 

 

 

 

 

 

 

Pro Forma Jackups (2)

71

%

 

68

%

 

64

%

 

70

%

 

67

%

(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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

UTILIZATION - ACTIVE FLEET (1) (2)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

91

%

 

90

%

 

84

%

 

68

%

 

63

%

Semisubmersibles

75

%

 

100

%

 

85

%

 

89

%

 

90

%

 

87

%

 

92

%

 

84

%

 

72

%

 

70

%

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

88

%

 

80

%

 

67

%

 

83

%

 

79

%

HD & SD Modern

82

%

 

81

%

 

69

%

 

80

%

 

79

%

SD Legacy

100

%

 

100

%

 

100

%

 

97

%

 

68

%

 

87

%

 

82

%

 

71

%

 

83

%

 

78

%

 

 

 

 

 

 

 

 

 

 

Total

87

%

 

86

%

 

76

%

 

79

%

 

75

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

Total

90

%

 

90

%

 

82

%

 

84

%

 

81

%

 

 

 

 

 

 

 

 

 

 

Pro Forma Jackups (3)

91

%

 

88

%

 

80

%

 

88

%

 

84

%

(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 and includes 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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

AVAILABLE DAYS - TOTAL FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

1,196

 

1,183

 

1,183

 

1,032

 

1,012

Semisubmersibles

460

 

455

 

455

 

460

 

460

 

1,656

 

1,638

 

1,638

 

1,492

 

1,472

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

1,012

 

1,001

 

1,001

 

1,012

 

1,012

HD & SD Modern

1,196

 

1,225

 

1,258

 

1,288

 

1,288

SD Legacy

184

 

182

 

182

 

184

 

184

 

2,392

 

2,408

 

2,441

 

2,484

 

2,484

 

 

 

 

 

 

 

 

 

 

Total

4,048

 

4,046

 

4,079

 

3,976

 

3,956

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

1,012

 

959

 

926

 

920

 

920

 

 

 

 

 

 

 

 

 

 

Total

5,060

 

5,005

 

5,005

 

4,896

 

4,876

(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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

AVAILABLE DAYS - ACTIVE FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

920

 

910

 

910

 

920

 

920

Semisubmersibles

276

 

273

 

273

 

276

 

276

 

1,196

 

1,183

 

1,183

 

1,196

 

1,196

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

828

 

819

 

819

 

828

 

828

HD & SD Modern

644

 

683

 

803

 

828

 

828

SD Legacy

184

 

182

 

182

 

184

 

184

 

1,656

 

1,684

 

1,804

 

1,840

 

1,840

 

 

 

 

 

 

 

 

 

 

Total

2,852

 

2,867

 

2,987

 

3,036

 

3,036

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

1,012

 

959

 

926

 

920

 

920

 

 

 

 

 

 

 

 

 

 

Total

3,864

 

3,826

 

3,913

 

3,956

 

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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

OPERATING DAYS (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

834

 

815

 

761

 

622

 

584

Semisubmersibles

206

 

273

 

231

 

245

 

249

 

1,040

 

1,088

 

992

 

867

 

833

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

731

 

655

 

549

 

691

 

652

HD & SD Modern

528

 

552

 

555

 

665

 

654

SD Legacy

184

 

182

 

182

 

178

 

126

 

1,443

 

1,389

 

1,286

 

1,534

 

1,432

 

 

 

 

 

 

 

 

 

 

Total

2,483

 

2,477

 

2,278

 

2,401

 

2,265

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

1,012

 

959

 

926

 

920

 

920

 

 

 

 

 

 

 

 

 

 

Total

3,495

 

3,436

 

3,204

 

3,321

 

3,185

(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

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

REVENUE EFFICIENCY (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

98

%

 

99

%

 

94

%

 

88

%

 

89

%

Semisubmersibles

100

%

 

100

%

 

99

%

 

94

%

 

93

%

 

98

%

 

99

%

 

95

%

 

90

%

 

90

%

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

93

%

 

99

%

 

100

%

 

99

%

 

99

%

HD & SD Modern

100

%

 

100

%

 

99

%

 

97

%

 

97

%

SD Legacy

100

%

 

100

%

 

100

%

 

97

%

 

99

%

 

96

%

 

99

%

 

99

%

 

98

%

 

98

%

 

 

 

 

 

 

 

 

 

 

Total

98

%

 

99

%

 

97

%

 

93

%

 

94

%

(1)

Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.

   

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

 

As of

NUMBER OF RIGS

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

Active Fleet (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

10

 

10

 

10

 

10

 

10

Semisubmersibles

3

 

3

 

3

 

3

 

3

 

13

 

13

 

13

 

13

 

13

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

9

 

9

 

9

 

9

 

9

HD & SD Modern

7

 

7

 

8

 

9

 

9

SD Legacy

2

 

2

 

2

 

2

 

2

 

18

 

18

 

19

 

20

 

20

 

 

 

 

 

 

 

 

 

 

Total Active Fleet

31

 

31

 

32

 

33

 

33

 

 

 

 

 

 

 

 

 

 

Stacked Fleet

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

3

 

3

 

3

 

3

 

1

Semisubmersibles

2

 

2

 

2

 

2

 

2

 

5

 

5

 

5

 

5

 

3

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

2

 

2

 

2

 

2

 

2

HD & SD Modern

6

 

6

 

5

 

5

 

5

 

8

 

8

 

7

 

7

 

7

 

 

 

 

 

 

 

 

 

 

Total Stacked Fleet

13

 

13

 

12

 

12

 

10

 

 

 

 

 

 

 

 

 

 

Leased Rigs (2)

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

1

 

1

 

1

 

1

 

1

HD & SD Modern

8

 

8

 

8

 

7

 

7

Total Leased Rigs

9

 

9

 

9

 

8

 

8

 

 

 

 

 

 

 

 

 

 

Total

53

 

53

 

53

 

53

 

51

 

 

 

 

 

 

 

 

 

 

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)

(Unaudited)

 

As of

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

Cash

$

129.3

 

$

131.7

 

$

69.5

 

$

92.9

 

$

110.3

Other current assets

 

129.4

 

 

157.8

 

 

198.3

 

 

184.0

 

 

191.2

Non-current assets

 

1,223.3

 

 

1,214.4

 

 

1,094.2

 

 

1,081.0

 

 

915.3

Total assets

$

1,482.0

 

$

1,503.9

 

$

1,362.0

 

$

1,357.9

 

$

1,216.8

 

 

 

 

 

 

 

 

 

 

Current liabilities

$

200.7

 

$

173.2

 

$

135.0

 

$

136.0

 

$

173.6

Non-current liabilities

 

1,176.9

 

 

1,172.2

 

 

1,057.6

 

 

1,056.8

 

 

886.2

Total liabilities

$

1,377.6

 

$

1,345.4

 

$

1,192.6

 

$

1,192.8

 

$

1,059.8

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

$

104.4

 

$

158.5

 

$

169.4

 

$

165.1

 

$

157.0

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

1,482.0

 

$

1,503.9

 

$

1,362.0

 

$

1,357.9

 

$

1,216.8

   

ARO DRILLING

CONDENSED INCOME STATEMENT INFORMATION

(In millions)

(Unaudited)

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

Revenues

$

113.7

 

 

$

124.2

 

 

$

138.3

 

 

$

133.7

 

$

121.5

 

Operating expenses

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

93.8

 

 

 

94.1

 

 

 

98.3

 

 

 

88.0

 

 

92.0

 

Loss on impairment

 

28.4

 

 

 

—

 

 

 

—

 

 

 

—

 

 

—

 

Depreciation

 

21.1

 

 

 

19.7

 

 

 

19.0

 

 

 

19.5

 

 

15.8

 

General and administrative

 

4.9

 

 

 

5.5

 

 

 

5.8

 

 

 

6.3

 

 

5.6

 

Operating income (loss)

$

(34.5

)

 

$

4.9

 

 

$

15.2

 

 

$

19.9

 

$

8.1

 

Other expense, net

 

15.3

 

 

 

13.4

 

 

 

13.1

 

 

 

3.6

 

 

9.0

 

Provision (benefit) for income taxes

 

4.2

 

 

 

(1.8

)

 

 

3.7

 

 

 

6.0

 

 

0.4

 

Net income (loss)

$

(54.0

)

 

$

(6.7

)

 

$

(1.6

)

 

$

10.3

 

$

(1.3

)

 

 

 

 

 

 

 

 

 

 

ARO Adjusted EBITDA

$

15.0

 

 

$

24.6

 

 

$

34.2

 

 

$

39.4

 

$

23.9

 

ARO Drilling condensed balance sheet and income statement information presented above represents 100% of ARO. Valaris has a 50% ownership interest in ARO.

   

ARO DRILLING

OPERATING STATISTICS

(Unaudited)

 

As of

(In millions)

Oct 30,

2024

 

Jul 29,

2024

 

Apr 30,

2024

 

Feb 15,

2024

 

Nov 1,

2023

CONTRACT BACKLOG (1)

 

 

 

 

 

 

 

 

 

Owned Rigs

$

1,236.9

 

$

1,322.9

 

$

1,398.9

 

$

1,475.4

 

$

1,547.0

Leased Rigs (2)

 

344.4

 

 

510.4

 

 

583.3

 

 

662.7

 

 

743.7

Total

$

1,581.3

 

$

1,833.3

 

$

1,982.2

 

$

2,138.1

 

$

2,290.7

(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.

(2)

Leased rigs backlog as of July 29, 2024, included $113 million related to the drilling contracts for VALARIS 147 and VALARIS 148, which previously received suspension notices from Saudi Aramco. The contracts were subsequently terminated and are no longer included in leased rigs backlog as of October 30, 2024.

     

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

AVERAGE DAILY REVENUE (1)

 

 

 

 

 

 

 

 

 

Owned Rigs

$

109,000

 

 

$

104,000

 

 

$

105,000

 

 

$

100,000

 

 

$

91,000

 

Leased Rigs (2)

 

98,000

 

 

 

101,000

 

 

 

99,000

 

 

 

97,000

 

 

 

98,000

 

Total

$

103,000

 

 

$

102,000

 

 

$

102,000

 

 

$

98,000

 

 

$

95,000

 

 

 

 

 

 

 

 

 

 

 

UTILIZATION (3)

 

 

 

 

 

 

 

 

 

Owned Rigs

 

62

%

 

 

77

%

 

 

91

%

 

 

96

%

 

 

91

%

Leased Rigs (2)

 

71

%

 

 

86

%

 

 

93

%

 

 

94

%

 

 

95

%

Total

 

66

%

 

 

82

%

 

 

92

%

 

 

95

%

 

 

93

%

 

 

 

 

 

 

 

 

 

 

REVENUE EFFICIENCY (4)

 

 

 

 

 

 

 

 

 

Owned Rigs

 

70

%

 

 

90

%

 

 

98

%

 

 

94

%

 

 

99

%

Leased Rigs (2)

 

70

%

 

 

91

%

 

 

99

%

 

 

98

%

 

 

97

%

Total

 

70

%

 

 

91

%

 

 

98

%

 

 

96

%

 

 

98

%

 

 

 

 

 

 

 

 

 

 

NUMBER OF RIGS (AT QUARTER END)

 

 

 

 

 

 

 

 

 

Owned Rigs

 

9

 

 

 

9

 

 

 

8

 

 

 

8

 

 

 

7

 

Leased Rigs (2)

 

9

 

 

 

9

 

 

 

9

 

 

 

8

 

 

 

8

 

Total

 

18

 

 

 

18

 

 

 

17

 

 

 

16

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

AVAILABLE DAYS (5)

 

 

 

 

 

 

 

 

 

Owned Rigs

 

828

 

 

 

728

 

 

 

728

 

 

 

695

 

 

 

644

 

Leased Rigs (2)

 

828

 

 

 

765

 

 

 

744

 

 

 

736

 

 

 

736

 

Total

 

1,656

 

 

 

1,493

 

 

 

1,472

 

 

 

1,431

 

 

 

1,380

 

 

 

 

 

 

 

 

 

 

 

OPERATING DAYS (6)

 

 

 

 

 

 

 

 

 

Owned Rigs

 

510

 

 

 

561

 

 

 

664

 

 

 

668

 

 

 

585

 

Leased Rigs (2)

 

590

 

 

 

657

 

 

 

692

 

 

 

691

 

 

 

697

 

Total

 

1,100

 

 

 

1,218

 

 

 

1,356

 

 

 

1,359

 

 

 

1,282

 

(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, revenues attributable to amortization of drilling contract intangibles and lump-sum revenues and amortization thereof, 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)

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.

(6)

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 (Unaudited)

To supplement Valaris’ condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with Adjusted EBITDA, Adjusted EBITDAR and Free Cash Flow, which are non-GAAP measures.

Valaris defines "Adjusted EBITDA" as net income (loss) before income tax expense, interest expense, other (income) expense, depreciation expense, amortization, 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 Adjusted EBITDA" as ARO's net income (loss) before income tax expense, other expense, net, depreciation expense and loss on impairment. ARO Adjusted 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. ARO 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. ARO Adjusted 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 third quarter 2024 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).

Valaris defines "Free Cash Flow" as net cash provided by operating activities less capital expenditures. Free Cash Flow is a non-GAAP measure that our management uses to assess the cash generation of our fleet after paying operating expenses and capital expenditures to maintain and upgrade our assets. We believe that this measure is useful to investors and analysts in allowing for greater transparency of the cash generation of our business.

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 (Loss) to Adjusted EBITDA

A reconciliation of net income as reported to Adjusted EBITDA is included in the tables below (in millions):

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

 

 

 

VALARIS

 

 

 

Net income

$

62.9

 

 

$

150.8

 

Add (subtract):

 

 

 

Income tax expense (benefit)

 

24.3

 

 

 

(30.0

)

Interest expense, net

 

22.4

 

 

 

22.6

 

Other income

 

(14.7

)

 

 

(34.5

)

Operating income

$

94.9

 

 

$

108.9

 

Add:

 

 

 

Depreciation expense

 

31.7

 

 

 

29.7

 

Equity in losses of ARO

 

23.8

 

 

 

0.3

 

Adjusted EBITDA

$

150.4

 

 

$

138.9

 

   

A reconciliation of net loss as reported to ARO Adjusted EBITDA is included in the tables below (in millions):

 

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

 

 

 

ARO

 

 

 

Net loss

$

(54.0

)

 

$

(6.7

)

Add (subtract):

 

 

 

Income tax expense (benefit)

 

4.2

 

 

 

(1.8

)

Other expense, net

 

15.3

 

 

 

13.4

 

Operating income (loss)

$

(34.5

)

 

$

4.9

 

Add:

 

 

 

Depreciation expense

 

21.1

 

 

 

19.7

 

Loss on impairment

 

28.4

 

 

 

—

 

ARO Adjusted EBITDA

$

15.0

 

 

$

24.6

 

       

Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR

(In millions)

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

FLOATERS

 

 

 

Net income

$

126.8

 

 

$

114.1

 

Subtract:

 

 

 

Other income

 

(0.3

)

 

 

(1.7

)

Operating income

$

126.5

 

 

$

112.4

 

Add (subtract):

 

 

 

Depreciation

 

14.8

 

 

 

14.1

 

Other costs

 

—

 

 

 

(0.1

)

Adjusted EBITDA (1)

$

141.3

 

 

$

126.4

 

Add:

 

 

 

Reactivation costs

 

1.9

 

 

 

10.9

 

Adjusted EBITDAR (1)

$

143.2

 

 

$

137.3

 

 

 

 

 

JACKUPS

 

 

 

Net income

$

45.7

 

 

$

52.8

 

Subtract:

 

 

 

Other income

 

(0.1

)

 

 

(1.1

)

Operating income

$

45.6

 

 

$

51.7

 

Add:

 

 

 

Depreciation

 

11.4

 

 

 

10.9

 

Adjusted EBITDA (1)

$

57.0

 

 

$

62.6

 

Adjusted EBITDAR (1)

$

57.0

 

 

$

62.6

 

 

 

 

 

OTHER

 

 

 

Net income

$

16.3

 

 

$

18.3

 

Add (subtract):

 

 

 

Other income

 

(0.9

)

 

 

—

 

Operating income

$

15.4

 

 

$

18.3

 

Add:

 

 

 

Depreciation

 

2.9

 

 

 

2.5

 

Adjusted EBITDA (1)

$

18.3

 

 

$

20.8

 

Adjusted EBITDAR (1)

$

18.3

 

 

$

20.8

 

(1)

Adjusted EBITDA and EBITDAR excludes onshore support costs and general and administrative expense.

       

Reconciliation of Net Income (Loss) to Adjusted EBITDAR

(In millions)

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

ACTIVE FLEET (1)

 

 

 

 

 

 

 

 

 

Net income

$

186.8

 

 

$

186.6

 

 

$

80.8

 

 

$

78.7

 

 

$

57.5

 

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

(0.4

)

 

 

(2.8

)

 

 

(7.0

)

 

 

(3.3

)

 

 

(1.0

)

Operating income

$

186.4

 

 

$

183.8

 

 

$

73.8

 

 

$

75.4

 

 

$

56.5

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Reactivation costs

 

1.9

 

 

 

10.9

 

 

 

30.3

 

 

 

38.5

 

 

 

50.9

 

Depreciation

 

24.8

 

 

 

23.5

 

 

 

22.2

 

 

 

23.5

 

 

 

21.9

 

Other

 

—

 

 

 

(0.1

)

 

 

—

 

 

 

0.1

 

 

 

—

 

Adjusted EBITDAR (2)

$

213.1

 

 

$

218.1

 

 

$

126.3

 

 

$

137.5

 

 

$

129.3

 

 

 

 

 

 

 

 

 

 

 

LEASED AND MANAGED RIGS

 

 

 

 

 

 

 

 

 

Net income

$

16.3

 

 

$

18.3

 

 

$

24.8

 

 

$

22.1

 

 

$

25.8

 

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

(0.9

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Operating income

$

15.4

 

 

$

18.3

 

 

$

24.8

 

 

$

22.1

 

 

$

25.8

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Depreciation

 

2.9

 

 

 

2.5

 

 

 

1.3

 

 

 

1.2

 

 

 

1.3

 

Other

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

0.1

 

Adjusted EBITDAR (2)

$

18.3

 

 

$

20.8

 

 

$

26.1

 

 

$

23.2

 

 

$

27.2

 

 

 

 

 

 

 

 

 

 

 

STACKED FLEET

 

 

 

 

 

 

 

 

 

Net loss

$

(14.3

)

 

$

(19.7

)

 

$

(7.9

)

 

$

(8.3

)

 

$

(8.6

)

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

(0.1

)

 

 

—

 

Operating loss

$

(14.3

)

 

$

(19.7

)

 

$

(8.0

)

 

$

(8.4

)

 

$

(8.6

)

Add (subtract):

 

 

 

 

 

 

 

 

 

Depreciation

 

1.4

 

 

 

1.5

 

 

 

1.4

 

 

 

2.7

 

 

 

2.5

 

Other

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

0.1

 

Adjusted EBITDAR (2)

$

(12.9

)

 

$

(18.2

)

 

$

(6.6

)

 

$

(5.8

)

 

$

(6.0

)

 

 

 

 

 

 

 

 

 

 

TOTAL FLEET

 

 

 

 

 

 

 

 

 

Net income

$

188.8

 

 

$

185.2

 

 

$

97.7

 

 

$

92.5

 

 

$

74.7

 

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

(1.3

)

 

 

(2.8

)

 

 

(7.1

)

 

 

(3.4

)

 

 

(1.0

)

Operating income

$

187.5

 

 

$

182.4

 

 

$

90.6

 

 

$

89.1

 

 

$

73.7

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Reactivation costs

 

1.9

 

 

 

10.9

 

 

 

30.3

 

 

 

38.5

 

 

 

50.9

 

Depreciation

 

29.1

 

 

 

27.5

 

 

 

24.9

 

 

 

27.4

 

 

 

25.7

 

Other

 

—

 

 

 

(0.1

)

 

 

—

 

 

 

(0.1

)

 

 

0.2

 

Adjusted EBITDAR (2)

$

218.5

 

 

$

220.7

 

 

$

145.8

 

 

$

154.9

 

 

$

150.5

 

(1)

Active fleet represents rigs that are not preservation stacked and includes 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

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

DRILLSHIPS

 

 

 

 

 

 

 

 

 

Net income (loss)

$

117.3

 

 

$

79.6

 

 

$

49.4

 

 

$

4.7

 

 

$

(9.9

)

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

(0.3

)

 

 

(1.5

)

 

 

(6.2

)

 

 

(2.0

)

 

 

(0.6

)

Operating income (loss)

 

117.0

 

 

 

78.1

 

 

 

43.2

 

 

 

2.7

 

 

 

(10.5

)

Add (subtract):

 

 

 

 

 

 

 

 

 

Depreciation

 

13.9

 

 

 

13.2

 

 

 

12.4

 

 

 

14.0

 

 

 

13.2

 

Other

 

—

 

 

 

(0.1

)

 

 

—

 

 

 

—

 

 

 

0.1

 

Adjusted EBITDA (1)

$

130.9

 

 

$

91.2

 

 

$

55.6

 

 

$

16.7

 

 

$

2.8

 

 

 

 

 

 

 

 

 

 

 

SEMISUBMERSIBLES

 

 

 

 

 

 

 

 

 

Net income

$

9.5

 

 

$

34.5

 

 

$

14.7

 

 

$

19.6

 

 

$

24.4

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Other income

 

—

 

 

 

(0.2

)

 

 

(0.1

)

 

 

(0.1

)

 

 

—

 

Operating income

 

9.5

 

 

 

34.3

 

 

 

14.6

 

 

 

19.5

 

 

 

24.4

 

Add:

 

 

 

 

 

 

 

 

 

Depreciation

 

0.9

 

 

 

0.9

 

 

 

0.8

 

 

 

1.0

 

 

 

1.0

 

Other

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Adjusted EBITDA (1)

$

10.4

 

 

$

35.2

 

 

$

15.4

 

 

$

20.5

 

 

$

25.4

 

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

       

Reconciliation of Net Income to Adjusted EBITDA

(In millions)

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

 

Mar 31,

2024

 

Dec 31,

2023

 

Sep 30,

2023

HD HARSH ENVIRONMENT

 

 

 

 

 

 

 

 

 

Net income

$

24.8

 

 

$

31.0

 

 

$

0.4

 

 

$

15.4

 

 

$

15.4

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Other (income) expense

 

0.2

 

 

 

(0.3

)

 

 

(0.3

)

 

 

(0.1

)

 

 

(0.2

)

Operating income

 

25.0

 

 

 

30.7

 

 

 

0.1

 

 

 

15.3

 

 

 

15.2

 

Add:

 

 

 

 

 

 

 

 

 

Depreciation

 

6.4

 

 

 

5.6

 

 

 

5.3

 

 

 

5.8

 

 

 

5.7

 

Adjusted EBITDA (1)

$

31.4

 

 

$

36.3

 

 

$

5.4

 

 

$

21.1

 

 

$

20.9

 

 

 

 

 

 

 

 

 

 

 

HD & SD MODERN JACKUPS

 

 

 

 

 

 

 

 

 

Net income

$

17.6

 

 

$

19.2

 

 

$

6.4

 

 

$

28.2

 

 

$

17.7

 

Subtract:

 

 

 

 

 

 

 

 

 

Other income

 

(0.2

)

 

 

(0.8

)

 

 

(0.6

)

 

 

(1.2

)

 

 

(0.2

)

Operating income

 

17.4

 

 

 

18.4

 

 

 

5.8

 

 

 

27.0

 

 

 

17.5

 

Add:

 

 

 

 

 

 

 

 

 

Depreciation

 

2.6

 

 

 

2.9

 

 

 

2.8

 

 

 

3.0

 

 

 

2.9

 

Other

 

—

 

 

 

—

 

 

 

—

 

 

 

0.1

 

 

 

—

 

Adjusted EBITDA (1)

$

20.0

 

 

$

21.3

 

 

$

8.6

 

 

$

30.1

 

 

$

20.4

 

 

 

 

 

 

 

 

 

 

 

SD LEGACY JACKUPS

 

 

 

 

 

 

 

 

 

Net income

$

3.3

 

 

$

2.6

 

 

$

2.0

 

 

$

2.5

 

 

$

1.3

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Other (income) expense

 

(0.1

)

 

 

—

 

 

 

0.1

 

 

 

—

 

 

 

—

 

Operating income

 

3.2

 

 

 

2.6

 

 

 

2.1

 

 

 

2.5

 

 

 

1.3

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Depreciation

 

2.4

 

 

 

2.4

 

 

 

2.3

 

 

 

2.4

 

 

 

1.6

 

Other

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

—

 

Adjusted EBITDA (1)

$

5.6

 

 

$

5.0

 

 

$

4.4

 

 

$

4.8

 

 

$

2.9

 

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

     

Reconciliation of Cash from Operating Activities to Free Cash Flow

(In millions)

Three Months Ended

 

Sep 30,

2024

 

Jun 30,

2024

Net cash provided by operating activities

$

193.0

 

 

$

11.5

 

Additions to property and equipment

 

(81.9

)

 

 

(110.2

)

Free cash flow

$

111.1

 

 

$

(98.7

)

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241029543925/en/

Investor & Media Contacts:

Nick Georgas Vice President - Treasurer and Investor Relations +1-713-979-4632

Tim Richardson Director - Investor Relations +1-713-979-4619