Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today
reported third quarter 2023 results.
President and Chief Executive Officer Anton Dibowitz said, “We
are pleased that VALARIS DS-17 commenced its contract offshore
Brazil during the quarter and expect that it will contribute
meaningful earnings and cash flow going forward. While our floater
revenue efficiency for the quarter was below our expectations, our
year to date fleetwide revenue efficiency remains strong at 97%,
and we remain committed to delivering safe and efficient
operations.”
Dibowitz added, “During the third quarter, we were awarded new
contracts and extensions with associated contract backlog of
approximately $465 million. Our long-term contract for VALARIS DS-7
was the seventh contract awarded to our previously stacked floaters
since mid-2021. Following this reactivation we will have 10
drillships working and will remain disciplined in exercising our
operational leverage with only one stacked drillship and two
newbuild drillship options remaining.”
Dibowitz concluded, “The outlook for Valaris is positive, with
increasing demand and constrained supply tightening the market. We
are confident in the strength and duration of this upcycle, and we
expect to deliver meaningfully improved earnings in both 2024 and
2025 due to the impact of recent and ongoing drillship
reactivations at attractive day rates, as well as the repricing of
rigs from legacy day rate contracts to higher markets rates.”
Financial and Operational Highlights
- Net income of $17 million, Adjusted EBITDA of $40 million and
Adjusted EBITDAR of $91 million;
- Delivered revenue efficiency of 94% during the quarter and 97%
year to date;
- Recognized by the Center for Offshore Safety with its 2023
Safety Leadership Award for the Valaris Basic Training
program;
- Awarded new contracts and extensions with associated contract
backlog of approximately $465 million during the third
quarter;
- Additional new contracts and extensions awarded following
quarter end, with associated contract backlog of approximately $335
million;
- Executed $400 million add-on to Senior Secured Second Lien
Notes to finance expected exercise of purchase options for newbuild
drillships VALARIS DS-13 and DS-14;
- Repurchased $85 million of shares during the third quarter and
$171 million to date;
- Remain on track to deliver on our 2023 share repurchase target
of $200 million;
- ARO Drilling secured attractive financing for newbuild jackups
Kingdom 1 and 2.
Third Quarter Review
Net income was $17 million compared to net loss of $27 million
in the second quarter 2023. Adjusted EBITDA increased to $40
million from $15 million in the second quarter primarily due to two
jackups and one floater commencing contracts during the quarter
after not working in the second quarter, as well as an increase in
average daily revenue for both the floater and jackup fleets. These
items were partially offset by higher reactivation expense and an
increase in unplanned downtime related to several floaters.
Adjusted EBITDAR increased to $91 million from $59 million in the
second quarter.
Revenues increased to $455 million from $415 million in the
second quarter 2023. Excluding reimbursable items, revenues
increased to $427 million from $388 million in the second quarter.
The increase was primarily due to two jackups and one floater
commencing contracts during the quarter after not working in the
second quarter, as well as an increase in average daily revenue for
both the floater and jackup fleets. These items were partially
offset by an increase in unplanned downtime related to several
floaters.
Contract drilling expense increased to $391 million from $374
million in the second quarter 2023. Excluding reimbursable items,
contract drilling expense increased to $369 million from $348
million in the second quarter. The increase was primarily due to
higher reactivation expense and higher operating costs resulting
from the contract startups mentioned above.
Depreciation expense increased to $26 million from $25 million
in the second quarter 2023. General and administrative expense
decreased to $24 million from $26 million in the second quarter
2023.
Other income increased to $11 million from $7 million in the
second quarter 2023. This was primarily due to foreign currency
exchange gains during the quarter compared to losses in the second
quarter.
Tax expense decreased to $11 million from $25 million in the
second quarter 2023. The third quarter tax provision included $2
million of discrete tax benefit, which was primarily attributable
to the resolution of prior period tax matters, partially offset by
changes in liabilities for unrecognized tax benefits associated
with tax positions taken in prior years. The second quarter tax
provision included $6 million of discrete tax expense, which was
primarily attributable to changes in liabilities for unrecognized
tax benefits associated with tax positions taken in prior years.
Adjusted for discrete items, tax expense decreased to $13 million
from $18 million in the second quarter primarily due to a reduction
in deferred tax asset valuation allowances.
Cash and cash equivalents and restricted cash increased to $1.1
billion as of September 30, 2023, from $805 million as of June 30,
2023. The increase was primarily due to the issuance of $400
million of additional 8.375% Senior Secured Second Lien Notes due
2030, partially offset by capital expenditures and share
repurchases. The net proceeds from this issuance are intended to
fund the purchase of drillships VALARIS DS-13 and DS-14, and for
general corporate purposes.
Capital expenditures increased to $106 million from $71 million
in the second quarter 2023 primarily due to an increase in
reactivation and customer-specific capital expenditures associated
with VALARIS DS-17, DS-8 and DS-7.
Third Quarter Segment Review
Floaters
Floater revenues increased to $243 million from $227 million in
the second quarter 2023. Excluding reimbursable items, revenues
increased to $232 million from $216 million in the second quarter.
The increase was primarily due to VALARIS DS-17 commencing its
contract with Equinor offshore Brazil in early September, following
its reactivation, as well as an increase in average daily revenue
for the rest of the floater fleet during the third quarter. These
benefits were partially offset by fewer operating days for several
floaters primarily due to unplanned downtime events.
Contract drilling expense increased to $215 million from $196
million in the second quarter 2023. Excluding reimbursable items,
contract drilling expense increased to $206 million from $185
million in the second quarter. The increase was primarily due to
higher reactivation expense associated with VALARIS DS-7 following
a contract award in July for which the rig is being reactivated and
VALARIS DS-17 commencing a contract in early September.
Jackups
Jackup revenues increased to $166 million from $145 million in
the second quarter 2023. Excluding reimbursable items, revenues
increased to $155 million from $135 million in the second quarter
primarily due to more operating days and an increase in average
daily revenue. Revenues from the jackup fleet benefited from
contract startups for VALARIS 121 and 249, as well as several rigs
commencing new contracts at higher day rates.
Contract drilling expense decreased to $122 million from $124
million in the second quarter 2023. Excluding reimbursable items,
contract drilling expense of $114 million was in line with the
second quarter. Lower repair and maintenance costs across the fleet
and lower costs resulting from the sale of VALARIS 54 were offset
by higher operating costs for VALARIS 249, which commenced a
contract offshore Trinidad during the quarter after mobilizing from
New Zealand during the second quarter.
ARO Drilling
Revenues increased to $122 million from $118 million in the
second quarter 2023 primarily due to more operating days resulting
from less out of service time for planned maintenance during the
third quarter. Contract drilling expense decreased to $92 million
from $95 million in the second quarter primarily due to lower
repair costs associated with the previously mentioned planned
maintenance.
Other
Revenues increased to $46 million from $43 million in the second
quarter 2023 and contract drilling expense increased to $19 million
from $18 million in the second quarter.
Third Quarter
Floaters
Jackups
ARO (1)
Other
Reconciling Items (1)(2)
Consolidated Total
(in millions of $, except %)
Q3 2023
Q2 2023
Chg
Q3 2023
Q2 2023
Chg
Q3 2023
Q2 2023
Chg
Q3 2023
Q2 2023
Chg
Q3 2023
Q2 2023
Q3 2023
Q2 2023
Chg
Revenues
243.3
227.4
7%
165.9
144.6
15%
121.5
117.8
3%
45.9
43.2
6%
(121.5)
(117.8)
455.1
415.2
10%
Operating expenses
Contract drilling
215.2
196.2
(10)%
121.7
123.5
1%
92.0
95.0
3%
18.8
18.2
(3)%
(56.8)
(59.4)
390.9
373.5
(5)%
Depreciation
14.2
13.6
(4)%
10.2
9.6
(6)%
15.8
15.6
(1)%
1.3
1.2
(8)%
(15.7)
(15.5)
25.8
24.5
(5)%
General and admin.
—
—
—%
—
—
—%
5.6
5.7
2%
—
—
—%
18.6
20.7
24.2
26.4
8%
Equity in earnings (losses) of ARO
—
—
—%
—
—
—%
—
—
—%
—
—
—%
2.4
(0.7)
2.4
(0.7)
nm
Operating income (loss)
13.9
17.6
(21)%
34.0
11.5
196%
8.1
1.5
440%
25.8
23.8
8%
(65.2)
(64.3)
16.6
(9.9)
nm
Net income (loss)
14.5
17.9
(19)%
34.4
39.1
(12)%
(1.3)
(7.3)
(82)%
25.8
23.8
8%
(56.4)
(100.8)
17.0
(27.3)
nm
Adjusted EBITDA
28.2
31.1
(9)%
44.2
21.1
109%
23.9
17.1
40%
27.2
24.9
9%
(83.5)
(78.9)
40.0
15.3
161%
Adjusted EBITDAR
79.1
75.3
5%
44.2
21.0
110%
23.9
17.1
40%
27.2
24.9
9%
(83.5)
(78.9)
90.9
59.4
53%
(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."
Third Quarter Results Versus Guidance
The Company's third quarter 2023 results were lower than prior
guidance primarily due to lower than expected floater revenue
efficiency and two contract commencement delays.
As previously announced, Valaris will hold its third quarter
2023 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on
Tuesday, November 7, 2023. An updated investor presentation will be
available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore
drilling services across all water depths and geographies.
Operating a high-quality rig fleet of ultra-deepwater drillships,
versatile semisubmersibles, and modern shallow-water jackups,
Valaris has experience operating in nearly every major offshore
basin. Valaris maintains an unwavering commitment to safety,
operational excellence, and customer satisfaction, with a focus on
technology and innovation. Valaris Limited is a Bermuda exempted
company. To learn more, visit the Valaris website at
www.valaris.com.
Forward-Looking Statements
Statements contained in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include words or phrases such as
"anticipate," "believe," "estimate," "expect," "intend," "likely,"
"plan," "project," "could," "may," "might," "should," "will" and
similar words and specifically include statements regarding
expected financial performance; expected utilization, day rates,
revenues, operating expenses, cash flows, contract status, terms
and duration, contract backlog, capital expenditures, insurance,
financing and funding; the offshore drilling market, including
supply and demand, customer drilling programs, stacking of rigs,
effects of new rigs on the market and effect of the volatility of
commodity prices; expected work commitments, awards, contracts and
letters of intent; scheduled delivery dates for rigs; performance
of our joint ventures, including our joint venture with Saudi
Aramco; 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 (such
as the ongoing conflict in Ukraine); cybersecurity attacks and
threats; impacts and effects of public health crises, pandemics and
epidemics, such as the COVID-19 pandemic; future operations; any
exercise of our options for delivery of the VALARIS DS-13 and
VALARIS DS-14; increasing regulatory complexity; targets, progress,
plans and goals related to environmental, social and governance
(“ESG”) matters; the outcome of tax disputes; assessments and
settlements; and expense management. The forward-looking statements
contained in this press release are subject to numerous risks,
uncertainties and assumptions that may cause actual results to vary
materially from those indicated, including cancellation,
suspension, renegotiation or termination of drilling contracts and
programs; our ability to obtain financing, service our debt, fund
capital expenditures and pursue other business opportunities;
adequacy of sources of liquidity for us and our customers; future
share repurchases; actions by regulatory authorities, or other
third parties; actions by our security holders; internal control
risk; commodity price fluctuations and volatility, customer demand,
loss of a significant customer or customer contract, downtime and
other risks associated with offshore rig operations; adverse
weather, including hurricanes; changes in worldwide rig supply,
including as a result of reactivations and newbuilds; and demand,
competition and technology; supply chain and logistics challenges;
consumer preferences for alternative fuels and forecasts or
expectations regarding the global energy transition; increased
scrutiny of our ESG targets, including our Scope 1 emissions
intensity reduction target, initiatives and reporting and our
ability to achieve such targets or initiatives; changes in customer
strategy; future levels of offshore drilling activity; governmental
action, civil unrest and political and economic uncertainties,
including recessions, volatility affecting the banking system and
financial markets, inflation and adverse changes in the level of
international trade activity; terrorism, piracy and military
action; risks inherent to shipyard rig reactivation, upgrade,
repair, maintenance or enhancement; our ability to enter into, and
the terms of, future drilling contracts; suitability of rigs for
future contracts; the cancellation of letters of intent or letters
of award or any failure to execute definitive contracts following
announcements of letters of intent, letters of award or other
expected work commitments; the outcome of litigation, legal
proceedings, investigations or other claims or contract disputes;
governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain
skilled personnel on commercially reasonable terms; environmental
or other liabilities, risks or losses; compliance with our debt
agreements and debt restrictions that may limit our liquidity and
flexibility; cybersecurity risks and threats; and changes in
foreign currency exchange rates. In addition to the numerous
factors described above, you should also carefully read and
consider "Item 1A. Risk Factors" in Part I and "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Part II of our most recent annual report
on Form 10-K, which is available on the Securities and Exchange
Commission's website at www.sec.gov or on the Investor Relations
section of our website at www.valaris.com. Each forward-looking
statement speaks only as of the date of the particular statement,
and we undertake no obligation to update or revise any
forward-looking statements, except as required by law.
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS
OF OPERATIONS
(In millions, except per share
amounts)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
OPERATING REVENUES
$
455.1
$
415.2
$
430.1
$
433.6
$
437.2
OPERATING EXPENSES
Contract drilling (exclusive of
depreciation)
390.9
373.5
377.2
353.4
336.7
Depreciation
25.8
24.5
23.3
23.8
22.6
General and administrative
24.2
26.4
24.4
23.9
19.2
Total operating expenses
440.9
424.4
424.9
401.1
378.5
EQUITY IN EARNINGS (LOSSES) OF ARO
2.4
(0.7
)
3.3
8.6
2.9
OPERATING INCOME (LOSS)
16.6
(9.9
)
8.5
41.1
61.6
OTHER INCOME (EXPENSE)
Interest income
26.6
24.6
23.0
15.5
27.9
Interest expense, net
(19.4
)
(16.7
)
(11.1
)
(10.5
)
(11.7
)
Other, net
3.9
(0.8
)
0.6
(5.2
)
13.7
11.1
7.1
12.5
(0.2
)
29.9
INCOME (LOSS) BEFORE INCOME TAXES
27.7
(2.8
)
21.0
40.9
91.5
PROVISION (BENEFIT) FOR INCOME TAXES
10.7
24.5
(27.6
)
9.8
13.8
NET INCOME (LOSS)
17.0
(27.3
)
48.6
31.1
77.7
NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS
(4.1
)
(2.1
)
(1.9
)
(1.9
)
(3.4
)
NET INCOME (LOSS) ATTRIBUTABLE TO
VALARIS
$
12.9
$
(29.4
)
$
46.7
$
29.2
$
74.3
EARNINGS (LOSS) PER SHARE
Basic
$
0.18
$
(0.39
)
$
0.62
$
0.39
$
0.99
Diluted
$
0.17
$
(0.39
)
$
0.61
$
0.38
$
0.98
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic
73.7
74.8
75.2
75.2
75.1
Diluted
74.8
74.8
76.4
76.0
75.6
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions)
As of
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
1,041.1
$
787.3
$
822.5
$
724.1
$
406.0
Restricted cash
16.2
18.0
21.5
24.4
18.2
Short-term investments
—
—
—
—
220.0
Accounts receivable, net
492.4
473.4
393.4
449.1
535.5
Other current assets
178.7
168.7
158.1
148.6
162.9
Total current assets
$
1,728.4
$
1,447.4
$
1,395.5
$
1,346.2
$
1,342.6
PROPERTY AND EQUIPMENT, NET
1,159.9
1,073.7
1,015.5
977.2
953.6
LONG-TERM NOTES RECEIVABLE FROM ARO
275.2
268.0
261.0
254.0
246.9
INVESTMENT IN ARO
116.1
113.7
114.4
111.1
102.6
OTHER ASSETS
205.3
185.6
164.8
171.8
175.5
$
3,484.9
$
3,088.4
$
2,951.2
$
2,860.3
$
2,821.2
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable - trade
$
376.4
$
364.2
$
324.1
$
256.5
$
256.6
Accrued liabilities and other
346.6
294.7
267.7
247.9
262.5
Total current liabilities
$
723.0
$
658.9
$
591.8
$
504.4
$
519.1
LONG-TERM DEBT
1,079.4
681.9
542.8
542.4
541.8
OTHER LIABILITIES
482.5
481.5
464.6
515.6
523.2
TOTAL LIABILITIES
2,284.9
1,822.3
1,599.2
1,562.4
1,584.1
TOTAL EQUITY
1,200.0
1,266.1
1,352.0
1,297.9
1,237.1
$
3,484.9
$
3,088.4
$
2,951.2
$
2,860.3
$
2,821.2
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Nine Months Ended September
30,
2023
2022
OPERATING ACTIVITIES
Net income
$
38.3
$
150.7
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation expense
73.6
67.4
Amortization
—
6.1
Loss on extinguishment of debt
29.2
—
Gain on asset disposals
(27.9
)
(137.7
)
Accretion of discount on notes receivable
from ARO
(21.2
)
(37.8
)
Share-based compensation expense
19.5
11.5
Equity in earnings of ARO
(5.0
)
(15.9
)
Deferred income tax expense
2.3
7.1
Net periodic pension and retiree medical
income
(0.3
)
(12.1
)
Loss on impairment
—
34.5
Other
5.5
1.8
Changes in contract liabilities
(3.9
)
58.9
Changes in deferred costs
(29.3
)
(47.7
)
Changes in other operating assets and
liabilities
90.0
(114.5
)
Net cash provided by (used in) operating
activities
$
170.8
$
(27.7
)
INVESTING ACTIVITIES
Additions to property and equipment
$
(233.1
)
$
(153.1
)
Net proceeds from disposition of
assets
29.2
146.8
Purchases of short-term investments
—
(220.0
)
Repayments of note receivable from ARO
—
40.0
Net cash used in investing activities
$
(203.9
)
$
(186.3
)
FINANCING ACTIVITIES
Issuance of Second Lien Notes
$
1,103.0
$
—
Redemption of First Lien Notes
(571.8
)
—
Payments for share repurchases
(147.4
)
—
Debt issuance costs
(36.7
)
—
Payments related to tax withholdings for
share-based awards
(5.2
)
(2.5
)
Consent solicitation fees
—
(3.9
)
Net cash provided by (used in) financing
activities
$
341.9
$
(6.4
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
308.8
$
(220.4
)
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
748.5
644.6
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
1,057.3
$
424.2
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
OPERATING ACTIVITIES
Net income (loss)
$
17.0
$
(27.3
)
$
48.6
$
31.1
$
77.7
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation expense
25.8
24.5
23.3
23.8
22.6
Amortization
—
—
—
2.0
2.1
Accretion of discount on notes receivable
from ARO
(7.2
)
(7.0
)
(7.0
)
(7.1
)
(22.4
)
Share-based compensation expense
6.8
7.0
5.7
5.9
4.6
Deferred income tax expense (benefit)
(4.8
)
2.5
4.6
0.8
0.4
Equity in (earnings) losses of ARO
(2.4
)
0.7
(3.3
)
(8.6
)
(2.9
)
Net periodic pension and retiree medical
income
(0.1
)
(0.1
)
(0.1
)
(4.3
)
(4.0
)
Loss on extinguishment of debt
—
29.2
—
—
—
Gain on asset disposals
—
(27.8
)
(0.1
)
(3.5
)
(0.1
)
Other
2.8
2.2
0.5
(1.6
)
0.3
Changes in contract liabilities
3.6
13.3
(20.8
)
3.6
38.0
Changes in deferred costs
(22.4
)
(7.4
)
0.5
8.8
1.8
Changes in other operating assets and
liabilities
29.1
(38.9
)
99.8
103.8
(31.8
)
Net cash provided by (used in) operating
activities
$
48.2
$
(29.1
)
$
151.7
$
154.7
$
86.3
INVESTING ACTIVITIES
Additions to property and equipment
$
(105.8
)
$
(71.0
)
$
(56.3
)
$
(53.9
)
$
(53.5
)
Net proceeds from disposition of
assets
0.1
29.0
0.1
3.5
0.3
Purchases of short-term investments
—
—
—
—
(220.0
)
Maturities of short-term investments
—
—
—
220.0
—
Repayments of note receivable from ARO
—
—
—
—
40.0
Net cash provided by (used in) investing
activities
$
(105.7
)
$
(42.0
)
$
(56.2
)
$
169.6
$
(233.2
)
FINANCING ACTIVITIES
Issuance of Second Lien Notes
$
403.0
$
700.0
$
—
$
—
$
—
Payments for share repurchases
(83.0
)
(64.4
)
—
—
—
Debt issuance costs
(5.7
)
(31.0
)
—
—
—
Payments for tax withholdings for
share-based awards
(4.8
)
(0.4
)
—
—
(2.3
)
Redemption of First Lien Notes
—
(571.8
)
—
—
—
Consent solicitation fees
—
—
—
—
(3.9
)
Net cash provided by (used in) financing
activities
$
309.5
$
32.4
$
—
$
—
$
(6.2
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
252.0
$
(38.7
)
$
95.5
$
324.3
$
(153.1
)
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
805.3
844.0
748.5
424.2
577.3
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
1,057.3
$
805.3
$
844.0
$
748.5
$
424.2
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
REVENUES
Floaters
Drillships
$
168.2
$
147.2
$
138.9
$
144.5
$
131.2
Semisubmersibles
64.1
68.5
67.1
58.2
58.8
$
232.3
$
215.7
$
206.0
$
202.7
$
190.0
Reimbursable and Other Revenues (1)
11.0
11.7
8.8
8.3
11.7
Total Floaters
$
243.3
$
227.4
$
214.8
$
211.0
$
201.7
Jackups
(2)
HD Ultra-Harsh & Harsh Environment
$
75.5
$
54.1
$
70.9
$
92.9
$
117.6
HD & SD Modern
68.8
67.9
70.4
62.4
59.0
SD Legacy
10.5
12.5
20.4
20.2
13.6
$
154.8
$
134.5
$
161.7
$
175.5
$
190.2
Reimbursable and Other Revenues (1)
11.1
10.1
8.1
6.3
5.7
Total Jackups
$
165.9
$
144.6
$
169.8
$
181.8
$
195.9
Other
Leased and Managed Rigs
$
40.1
$
37.4
$
39.1
$
33.5
$
33.4
Reimbursable and Other Revenues (1)
5.8
5.8
6.4
7.3
6.2
Total Other
$
45.9
$
43.2
$
45.5
$
40.8
$
39.6
Total Operating Revenues
$
455.1
$
415.2
$
430.1
$
433.6
$
437.2
Total Reimbursable and Other Revenues
(1)
$
27.9
$
27.6
$
23.3
$
21.9
$
23.6
Revenues Excluding Reimbursable and Other
Revenues
$
427.2
$
387.6
$
406.8
$
411.7
$
413.6
(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)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
ADJUSTED EBITDAR (1)
Active Fleet (2)
$
129.3
$
104.5
$
100.4
$
121.5
$
137.2
Leased and Managed Rigs
27.2
24.9
25.4
22.3
22.0
$
156.5
$
129.4
$
125.8
$
143.8
$
159.2
Stacked Fleet (3)
(6.0
)
(8.2
)
(13.1
)
(8.1
)
(8.5
)
$
150.5
$
121.2
$
112.7
$
135.7
$
150.7
Support costs
General and administrative expense
$
24.2
$
26.4
$
24.4
$
23.9
$
19.2
Onshore support costs
35.4
35.4
33.5
32.8
30.2
$
59.6
$
61.8
$
57.9
$
56.7
$
49.4
Total
$
90.9
$
59.4
$
54.8
$
79.0
$
101.3
Reactivation costs (4)
$
50.9
$
44.1
$
26.3
$
20.7
$
17.8
(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. Starting from the second quarter 2023, our
Adjusted EBITDAR calculation was changed to include amortization
associated with deferred mobilization and contract preparation
revenues and costs and deferred capital upgrade revenues to better
reflect the earnings profile of our operations and more closely
align with the calculation methodology used by Valaris' closest
offshore drilling peers. Prior periods were adjusted to conform
with the current period presentation.
(2)
Active fleet represents rigs that are not
preservation stacked and includes rigs that are in the process of
being reactivated.
(3)
Stacked fleet represents the combined
total of all preservation and stacking costs.
(4)
Reactivation costs, all of which are
attributed to Valaris' active fleet, are excluded from adjusted
EBITDAR.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
ADJUSTED EBITDAR (1)
Floaters
Drillships
$
53.7
$
44.4
$
38.2
$
38.8
$
31.2
Semisubmersibles
25.4
30.9
28.2
20.4
27.8
$
79.1
$
75.3
$
66.4
$
59.2
$
59.0
Jackups
HD Ultra-Harsh & Harsh
$
20.9
$
6.1
$
3.1
$
31.4
$
57.0
HD & SD - Modern
20.4
11.5
9.4
13.0
10.7
SD - Legacy
2.9
3.4
8.4
9.8
2.0
$
44.2
$
21.0
$
20.9
$
54.2
$
69.7
Total
$
123.3
$
96.3
$
87.3
$
113.4
$
128.7
Other
Leased and Managed Rigs
$
27.2
$
24.9
$
25.4
$
22.3
$
22.0
Total
$
150.5
$
121.2
$
112.7
$
135.7
$
150.7
Support
costs
General and administrative expense
$
24.2
$
26.4
$
24.4
$
23.9
$
19.2
Onshore support costs
35.4
35.4
33.5
32.8
30.2
$
59.6
$
61.8
$
57.9
$
56.7
$
49.4
Total
$
90.9
$
59.4
$
54.8
$
79.0
$
101.3
(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. Starting from the
second quarter 2023, our Adjusted EBITDAR calculation was changed
to include amortization associated with deferred mobilization and
contract preparation revenues and costs and deferred capital
upgrade revenues to better reflect the earnings profile of our
operations and more closely align with the calculation methodology
used by Valaris' closest offshore drilling peers. Prior periods
were adjusted to conform with the current period presentation.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
ADJUSTED EBITDA (1)
Floaters
Drillships
$
2.8
$
0.3
$
12.2
$
18.5
$
14.2
Semisubmersibles
25.4
30.8
28.0
20.0
27.0
$
28.2
$
31.1
$
40.2
$
38.5
$
41.2
Jackups
HD Ultra-Harsh & Harsh
$
20.9
$
6.1
$
3.0
$
31.4
$
57.1
HD & SD - Modern
20.4
11.6
9.4
13.0
10.6
SD - Legacy
2.9
3.4
8.4
9.8
2.0
$
44.2
$
21.1
$
20.8
$
54.2
$
69.7
Total
$
72.4
$
52.2
$
61.0
$
92.7
$
110.9
Other
Leased and Managed Rigs
$
27.2
$
24.9
$
25.4
$
22.3
$
22.0
Total
$
99.6
$
77.1
$
86.4
$
115.0
$
132.9
Support
costs
General and administrative expense
$
24.2
$
26.4
$
24.4
$
23.9
$
19.2
Onshore support costs
35.4
35.4
33.5
32.8
30.2
$
59.6
$
61.8
$
57.9
$
56.7
$
49.4
Total
$
40.0
$
15.3
$
28.5
$
58.3
$
83.5
(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. Starting from the second quarter 2023, our
Adjusted EBITDA calculation was changed to include amortization
associated with deferred mobilization and contract preparation
revenues and costs and deferred capital upgrade revenues to better
reflect the earnings profile of our operations and more closely
align with the calculation methodology used by Valaris' closest
offshore drilling peers. Prior periods were adjusted to conform
with the current period presentation.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
As of
Nov 1, 2023
Aug 1, 2023
May 1, 2023
Feb 21, 2023
Oct 31, 2022
CONTRACT BACKLOG (1)
Floaters
Drillships
$
1,726.5
$
1,684.9
$
1,499.0
$
1,062.3
$
995.1
Semisubmersibles
259.5
272.4
270.2
314.6
379.5
$
1,986.0
$
1,957.3
$
1,769.2
$
1,376.9
$
1,374.6
Jackups
HD Ultra-Harsh & Harsh
$
327.9
$
307.4
$
277.7
$
348.3
$
185.1
HD & SD - Modern
406.8
366.8
317.7
341.1
395.3
SD - Legacy
186.9
118.4
119.7
52.9
82.3
$
921.6
$
792.6
$
715.1
$
742.3
$
662.7
Total
$
2,907.6
$
2,749.9
$
2,484.3
$
2,119.2
$
2,037.3
Other
Leased and Managed Rigs
$
250.5
$
291.4
$
318.9
$
344.0
$
223.3
Total
$
3,158.1
$
3,041.3
$
2,803.2
$
2,463.2
$
2,260.6
(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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
AVERAGE DAILY REVENUE (1)
Floaters
Drillships
$
288,000
$
253,000
$
239,000
$
232,000
$
240,000
Semisubmersibles
257,000
252,000
259,000
220,000
235,000
$
279,000
$
252,000
$
245,000
$
229,000
$
239,000
Jackups
HD Ultra-Harsh & Harsh
$
116,000
$
100,000
$
126,000
$
119,000
$
136,000
HD & SD Modern
105,000
102,000
98,000
87,000
84,000
SD Legacy
83,000
81,000
76,000
74,000
74,000
$
108,000
$
99,000
$
104,000
$
99,000
$
109,000
Total
$
171,000
$
158,000
$
154,000
$
143,000
$
150,000
Other
Leased and Managed Rigs
$
44,000
$
41,000
$
44,000
$
36,000
$
38,000
Total
$
134,000
$
124,000
$
124,000
$
115,000
$
121,000
(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. Prior periods were adjusted to
conform with the current period presentation.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
UTILIZATION - TOTAL FLEET (1)
Floaters
Drillships
58
%
58
%
59
%
62
%
54
%
Semisubmersibles
54
%
60
%
57
%
57
%
54
%
57
%
59
%
58
%
60
%
54
%
Jackups
HD Ultra-Harsh & Harsh
64
%
55
%
57
%
77
%
85
%
HD & SD Modern
51
%
52
%
57
%
55
%
53
%
SD Legacy
69
%
78
%
99
%
99
%
67
%
58
%
55
%
62
%
68
%
67
%
Total
57
%
56
%
60
%
65
%
62
%
Other
Leased and Managed Rigs
100
%
100
%
100
%
100
%
100
%
Total
65
%
65
%
68
%
72
%
69
%
Pro Forma Jackups (2)
65
%
63
%
68
%
73
%
72
%
(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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
UTILIZATION - ACTIVE FLEET (1)
(2)
Floaters
Drillships
63
%
71
%
77
%
85
%
74
%
Semisubmersibles
90
%
100
%
96
%
96
%
91
%
70
%
78
%
82
%
88
%
79
%
Jackups
HD Ultra-Harsh & Harsh
79
%
67
%
67
%
85
%
94
%
HD & SD Modern
79
%
81
%
89
%
86
%
81
%
SD Legacy
68
%
78
%
99
%
99
%
67
%
78
%
74
%
81
%
87
%
85
%
Total
75
%
76
%
81
%
87
%
83
%
Other
Leased and Managed Rigs
100
%
100
%
100
%
100
%
100
%
Total
81
%
82
%
86
%
90
%
87
%
Pro Forma Jackups (3)
81
%
79
%
83
%
88
%
86
%
(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
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
AVAILABLE DAYS - TOTAL FLEET
(1)
Floaters
Drillships
1,012
1,001
990
1,012
1,012
Semisubmersibles
460
455
450
460
460
1,472
1,456
1,440
1,472
1,472
Jackups
HD Ultra-Harsh & Harsh
1,012
990
990
1,012
1,012
HD & SD Modern
1,288
1,274
1,260
1,288
1,328
SD Legacy
184
199
270
276
276
2,484
2,463
2,520
2,576
2,616
Total
3,956
3,919
3,960
4,048
4,088
Other
Leased and Managed Rigs
920
910
900
920
880
Total
4,876
4,829
4,860
4,968
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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
AVAILABLE DAYS - ACTIVE FLEET
(1)
Floaters
Drillships
920
819
751
736
736
Semisubmersibles
276
273
270
276
276
1,196
1,092
1,021
1,012
1,012
Jackups
HD Ultra-Harsh & Harsh
828
808
841
920
920
HD & SD Modern
828
819
810
828
868
SD Legacy
184
199
270
276
276
1,840
1,826
1,921
2,024
2,064
Total
3,036
2,918
2,942
3,036
3,076
Other
Leased and Managed Rigs
920
910
900
920
880
Total
3,956
3,828
3,842
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 and includes rigs
that are in the process of being reactivated.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
OPERATING DAYS (1)
Floaters
Drillships
584
583
581
623
546
Semisubmersibles
249
272
258
264
251
833
855
839
887
797
Jackups
HD Ultra-Harsh & Harsh
652
540
564
778
862
HD & SD Modern
654
663
718
713
700
SD Legacy
126
155
268
273
184
1,432
1,358
1,550
1,764
1,746
Total
2,265
2,213
2,389
2,651
2,543
Other
Leased and Managed Rigs
920
910
900
920
881
Total
3,185
3,123
3,289
3,571
3,424
(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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
REVENUE EFFICIENCY (1)
Floaters
Drillships
89
%
95
%
97
%
96
%
90
%
Semisubmersibles
93
%
100
%
100
%
100
%
100
%
90
%
96
%
98
%
97
%
93
%
Jackups
HD Ultra-Harsh & Harsh
99
%
99
%
100
%
96
%
99
%
HD & SD Modern
97
%
98
%
100
%
99
%
97
%
SD Legacy
99
%
100
%
99
%
100
%
100
%
98
%
99
%
100
%
98
%
98
%
Total
94
%
97
%
99
%
98
%
96
%
(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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
Active Fleet (1)
Floaters
Drillships
10
9
9
8
8
Semisubmersibles
3
3
3
3
3
13
12
12
11
11
Jackups
HD Ultra-Harsh & Harsh
9
9
9
10
10
HD & SD Modern
9
9
9
9
9
SD Legacy
2
2
3
3
3
20
20
21
22
22
Total Active Fleet
33
32
33
33
33
Stacked Fleet
Floaters
Drillships (2)
1
2
2
3
3
Semisubmersibles
2
2
2
2
2
3
4
4
5
5
Jackups
HD Ultra-Harsh & Harsh
2
2
2
1
1
HD & SD Modern
5
5
5
5
5
7
7
7
6
6
Total Stacked Fleet
10
11
11
11
11
Leased Rigs (3)
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
Total
51
51
52
52
52
Managed Rigs (3)
2
2
2
2
2
(1)
Active fleet represents rigs that are not
preservation stacked and includes rigs that are in the process of
being reactivated.
(2)
Excludes VALARIS DS-13 and VALARIS DS-14,
which Valaris has the option to take delivery by year-end 2023.
(3)
Leased rigs and managed rigs included in
Other reporting segment.
ARO DRILLING
CONDENSED BALANCE SHEET
INFORMATION
(In millions)
As of
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
Cash
$
110.3
$
100.6
$
101.2
$
176.2
$
173.5
Other current assets
191.2
188.3
189.3
140.6
145.6
Non-current assets
915.3
879.6
830.2
818.1
800.9
Total assets
$
1,216.8
$
1,168.5
$
1,120.7
$
1,134.9
$
1,120.0
Current liabilities
$
173.6
$
122.6
$
68.5
$
86.3
$
87.3
Non-current liabilities
886.2
887.5
887.4
884.6
879.5
Total liabilities
$
1,059.8
$
1,010.1
$
955.9
$
970.9
$
966.8
Shareholders' equity
$
157.0
$
158.4
$
164.8
$
164.0
$
153.2
Total liabilities and shareholders'
equity
$
1,216.8
$
1,168.5
$
1,120.7
$
1,134.9
$
1,120.0
ARO DRILLING
CONDENSED INCOME STATEMENT
INFORMATION
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
Revenues
$
121.5
$
117.8
$
123.6
$
120.4
$
111.4
Operating expenses
Contract drilling (exclusive of
depreciation)
92.0
95.0
90.9
85.5
90.0
Depreciation
15.8
15.6
15.0
16.1
15.4
General and administrative
5.6
5.7
4.6
5.6
4.7
Operating income
$
8.1
$
1.5
$
13.1
$
13.2
$
1.3
Other expense, net
9.0
8.8
10.4
1.8
2.7
Provision (benefit) for income taxes
0.4
—
1.9
0.7
(0.1
)
Net income (loss)
$
(1.3
)
$
(7.3
)
$
0.8
$
10.7
$
(1.3
)
EBITDA
$
23.9
$
17.1
$
28.1
$
29.3
$
16.7
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
As of
(In millions)
Nov 1, 2023
Aug 1, 2023
May 1, 2023
Feb 21, 2023
Oct 31, 2022
CONTRACT BACKLOG (1)
Owned Rigs
$
1,547.0
$
686.3
$
747.7
$
794.3
$
870.7
Leased Rigs
743.7
815.0
884.7
937.5
473.3
Total
$
2,290.7
$
1,501.3
$
1,632.4
$
1,731.8
$
1,344.0
(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
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
AVERAGE DAILY REVENUE (1)
Owned Rigs
$
91,000
$
90,000
$
99,000
$
95,000
$
96,000
Leased Rigs (2)
98,000
98,000
98,000
91,000
91,000
Total
$
95,000
$
95,000
$
98,000
$
93,000
$
93,000
UTILIZATION (3)
Owned Rigs
91
%
83
%
91
%
96
%
86
%
Leased Rigs (2)
95
%
98
%
95
%
91
%
92
%
Total
93
%
91
%
93
%
93
%
89
%
REVENUE EFFICIENCY (4)
Owned Rigs
99
%
95
%
98
%
97
%
98
%
Leased Rigs (2)
97
%
99
%
95
%
93
%
96
%
Total
98
%
97
%
96
%
95
%
97
%
NUMBER OF RIGS (AT QUARTER END)
(5)
Owned Rigs
7
7
7
7
7
Leased Rigs (2)
8
8
8
8
8
Total
15
15
15
15
15
AVAILABLE DAYS (6)
Owned Rigs
644
637
630
644
644
Leased Rigs (2)
736
728
720
736
696
Total
1,380
1,365
1,350
1,380
1,340
OPERATING DAYS (7)
Owned Rigs
585
532
575
618
553
Leased Rigs (2)
697
713
683
672
640
Total
1,282
1,245
1,258
1,290
1,193
(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 excludes two rigs
under construction, the first of which was delivered in October
2023 and the second is expected to be delivered in the first
quarter 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.
In the second quarter 2023, Valaris changed its Adjusted EBITDA
and Adjusted EBITDAR calculations to include amortization
associated with deferred mobilization and contract preparation
revenues and costs and deferred capital upgrade revenues to better
reflect the earnings profile of our operations and more closely
align with the calculation methodology used by Valaris' closest
offshore drilling peers. Adjusted EBITDA and Adjusted EBITDAR for
all comparative periods have been revised using the new methodology
to consistently reflect this change.
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
third 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 (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, 2023
Jun 30, 2023
VALARIS
Net income (loss)
$
17.0
$
(27.3
)
Add (subtract):
Income tax expense
10.7
24.5
Interest expense
19.4
16.7
Other income
(30.5
)
(23.8
)
Operating income (loss)
$
16.6
$
(9.9
)
Add (subtract):
Depreciation expense
25.8
24.5
Equity in (earnings) losses of ARO
(2.4
)
0.7
Adjusted EBITDA (1)
$
40.0
$
15.3
(1)
Starting from the second quarter 2023, our
Adjusted EBITDA calculation was changed to include amortization
associated with deferred mobilization and contract preparation
revenues and costs and deferred capital upgrade revenues to better
reflect the earnings profile of our operations and more closely
align with the calculation methodology used by Valaris' closest
offshore drilling peers. Prior periods were adjusted to conform
with the current period presentation.
Three Months Ended
Sep 30, 2023
Jun 30, 2023
ARO
Net loss
$
(1.3
)
$
(7.3
)
Add:
Income tax expense
0.4
—
Other expense, net
9.0
8.8
Operating income
$
8.1
$
1.5
Add:
Depreciation expense
15.8
15.6
EBITDA
$
23.9
$
17.1
Reconciliation of Net Income to Adjusted EBITDA and Adjusted
EBITDAR
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
FLOATERS
Net income
$
14.5
$
17.9
Subtract:
Other income
(0.6
)
(0.3
)
Operating income
$
13.9
$
17.6
Add (subtract):
Depreciation
14.2
13.6
Other costs
0.1
(0.1
)
Adjusted EBITDA (1)
$
28.2
$
31.1
Add:
Reactivation costs
50.9
44.2
Adjusted EBITDAR (1)
$
79.1
$
75.3
JACKUPS
Net income
$
34.4
$
39.1
Add (subtract):
Other income
(0.4
)
(27.6
)
Operating income
$
34.0
$
11.5
Add:
Depreciation
10.2
9.6
Other costs
—
—
Adjusted EBITDA (1)
$
44.2
$
21.1
Add (subtract):
Reactivation costs
—
(0.1
)
Adjusted EBITDAR (1)
$
44.2
$
21.0
OTHER
Net income
$
25.8
$
23.8
Operating income
$
25.8
$
23.8
Add (subtract):
Depreciation
1.3
1.2
Other costs
0.1
(0.1
)
Adjusted EBITDA (1)
$
27.2
$
24.9
Adjusted EBITDAR (1)
$
27.2
$
24.9
(1)
Starting from the second quarter 2023, our
Adjusted EBITDA and Adjusted EBITDAR calculation were changed to
include amortization associated with deferred mobilization and
contract preparation revenues and costs and deferred capital
upgrade revenues to better reflect the earnings profile of our
operations and more closely align with the calculation methodology
used by Valaris' closest offshore drilling peers. Prior periods
were adjusted to conform with the current period presentation.
Reconciliation of Net Income (Loss) to Adjusted
EBITDAR
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
ACTIVE FLEET (1)
Net income
$
57.5
$
68.2
$
55.4
$
79.9
$
98.8
Add (subtract):
Other income
(1.0
)
(27.4
)
—
(0.9
)
—
Operating income
$
56.5
$
40.8
$
55.4
$
79.0
$
98.8
Add (subtract):
Reactivation costs
50.9
44.1
26.3
20.7
17.8
Depreciation
21.9
19.6
18.9
21.9
20.8
Support and other costs
—
—
(0.2
)
(0.1
)
(0.2
)
Adjusted EBITDAR (2)
$
129.3
$
104.5
$
100.4
$
121.5
$
137.2
LEASED AND MANAGED RIGS
Net income
$
25.8
$
23.8
$
24.0
$
21.2
$
20.7
Subtract:
Other income
—
—
—
—
(0.1
)
Operating income
$
25.8
$
23.8
$
24.0
$
21.2
$
20.6
Add (subtract):
Depreciation
1.3
1.2
1.3
1.3
1.3
Support and other costs
0.1
(0.1
)
0.1
(0.2
)
0.1
Adjusted EBITDAR (2)
$
27.2
$
24.9
$
25.4
$
22.3
$
22.0
STACKED FLEET
Net loss
$
(8.6
)
$
(11.7
)
$
(15.8
)
$
(6.9
)
$
(11.1
)
Add (subtract):
Other (income) expense
—
—
(0.5
)
(3.9
)
0.1
Operating loss
$
(8.6
)
$
(11.7
)
$
(16.3
)
$
(10.8
)
$
(11.0
)
Add (subtract):
Depreciation
2.5
3.6
3.2
2.7
2.6
Support and other costs
0.1
(0.1
)
—
—
(0.1
)
Adjusted EBITDAR (2)
$
(6.0
)
$
(8.2
)
$
(13.1
)
$
(8.1
)
$
(8.5
)
TOTAL FLEET
Net income
$
74.7
$
80.3
$
63.6
$
94.2
$
108.4
Subtract:
Other income
(1.0
)
(27.4
)
(0.5
)
(4.8
)
—
Operating income
$
73.7
$
52.9
$
63.1
$
89.4
$
108.4
Add (subtract):
Reactivation costs
50.9
44.1
26.3
20.7
17.8
Depreciation
25.7
24.4
23.4
25.9
24.7
Support and other costs
0.2
(0.2
)
(0.1
)
(0.3
)
(0.2
)
Adjusted EBITDAR (2)
$
150.5
$
121.2
$
112.7
$
135.7
$
150.7
(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. Starting in the second
quarter 2023, our Adjusted EBITDAR calculation was changed to
include amortization associated with deferred mobilization and
contract preparation revenues and costs and deferred capital
upgrade revenues to better reflect the earnings profile of our
operations and more closely align with the calculation methodology
used by Valaris' closest offshore drilling peers. Prior periods
were adjusted to conform with the current period presentation.
Reconciliation of Net Income (Loss) to Adjusted
EBITDA
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
DRILLSHIPS
Net income (loss)
$
(9.9
)
$
(12.0
)
$
0.4
$
7.3
$
2.4
Add (subtract):
Other income
(0.6
)
(0.4
)
(0.3
)
(0.9
)
—
Operating income (loss)
(10.5
)
(12.4
)
0.1
6.4
2.4
Add (subtract):
Depreciation
13.2
12.8
12.2
12.1
11.9
Other
0.1
(0.1
)
(0.1
)
—
(0.1
)
Adjusted EBITDA (1)
$
2.8
$
0.3
$
12.2
$
18.5
$
14.2
SEMISUBMERSIBLES
Net income
$
24.4
$
29.9
$
27.1
$
19.3
$
26.2
Add (subtract):
Other (income) expense
—
0.1
—
(0.2
)
—
Operating income
24.4
30.0
27.1
19.1
26.2
Add:
Depreciation
1.0
0.8
0.9
0.8
0.8
Other
—
—
—
0.1
—
Adjusted EBITDA (1)
$
25.4
$
30.8
$
28.0
$
20.0
$
27.0
(1)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense. Starting from the second quarter 2023, our Adjusted EBITDA
calculation was changed to include amortization associated with
deferred mobilization and contract preparation revenues and costs
and deferred capital upgrade revenues to better reflect the
earnings profile of our operations and more closely align with the
calculation methodology used by Valaris' closest offshore drilling
peers. Prior periods were adjusted to conform with the current
period presentation.
Reconciliation of Net Income (Loss) to Adjusted
EBITDA
(In millions)
Three Months Ended
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
HD ULTRA-HARSH & HARSH
JACKUPS
Net income (loss)
$
15.4
$
0.4
$
(2.5
)
$
29.3
$
51.7
Add (subtract):
Other (income) expense
(0.2
)
—
(0.1
)
(3.5
)
0.1
Operating income (loss)
15.2
0.4
(2.6
)
25.8
51.8
Add (subtract):
Depreciation
5.7
5.7
5.8
5.7
5.7
Other
—
—
(0.2
)
(0.1
)
(0.4
)
Adjusted EBITDA (1)
$
20.9
$
6.1
$
3.0
$
31.4
$
57.1
HD & SD MODERN JACKUPS
Net income
$
17.7
$
8.9
$
7.2
$
8.8
$
6.5
Subtract:
Other income
(0.2
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
Operating income
17.5
8.8
7.1
8.7
6.4
Add (subtract):
Depreciation and amortization
2.9
2.9
2.4
4.4
4.2
Other
—
(0.1
)
(0.1
)
(0.1
)
—
Adjusted EBITDA (1)
$
20.4
$
11.6
$
9.4
$
13.0
$
10.6
SD LEGACY JACKUPS
Net income
$
1.3
$
29.8
$
7.4
$
8.3
$
0.9
Add (subtract):
Other (income) expense
—
(27.5
)
—
(0.1
)
0.1
Operating income
1.3
2.3
7.4
8.2
1.0
Add:
Depreciation
1.6
1.0
0.9
1.6
1.0
Other
—
0.1
0.1
—
—
Adjusted EBITDA (1)
$
2.9
$
3.4
$
8.4
$
9.8
$
2.0
(1)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense. Starting from the second quarter 2023, our Adjusted EBITDA
calculation was changed to include amortization associated with
deferred mobilization and contract preparation revenues and costs
and deferred capital upgrade revenues to better reflect the
earnings profile of our operations and more closely align with the
calculation methodology used by Valaris' closest offshore drilling
peers. Prior periods were adjusted to conform with the current
period presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106554160/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
Grafico Azioni Valaris (NYSE:VAL)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Valaris (NYSE:VAL)
Storico
Da Set 2023 a Set 2024