Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today
reported second quarter 2024 results.
President and Chief Executive Officer Anton Dibowitz said, “In
the second quarter, we built on our excellent start to 2024 with
another quarter of strong safety and operating performance,
delivering revenue efficiency of 99% without a lost time incident.
In addition, we achieved a meaningful improvement in our financial
results during the second quarter, driven in part by a successful
contract startup for VALARIS DS-7 – our sixth drillship
reactivation completed since 2022.”
Dibowitz added, “In July, we secured a new multi-year contract
with Equinor offshore Brazil for VALARIS DS-17, which added nearly
$500 million of contract backlog. This new contract is a testament
to the quality of our crews and operations, the leading-edge
technical capabilities of the rig and the collaborative nature of
our relationship with Equinor."
Dibowitz concluded, “Valaris is well-positioned and we continue
to execute our strategy, securing attractive new contracts and
building our contract backlog. We maintain our conviction in the
strength and duration of this upcycle and see strong customer
demand for projects that are expected to commence in 2025 and 2026.
We expect to deliver significant earnings and cash flow growth over
the next few years, and we intend to return all future free cash
flow to shareholders unless there is a better or more value
accretive use for it.”
Financial and Operational Highlights
- Net income of $151 million, Adjusted EBITDA of $139 million and
Adjusted EBITDAR of $150 million;
- Revenue efficiency of 99% during the quarter;
- Strong safety performance, including no Lost Time Incidents
(LTI) for the second consecutive quarter;
- Successful contract startup for drillship VALARIS DS-7, the
sixth drillship Valaris has reactivated since 2022;
- Multi-year contract for drillship VALARIS DS-17, adding nearly
$500 million of contract backlog; and
- Increased total contract backlog to more than $4.3 billion as
of July 29, 2024, representing the seventh consecutive quarter of
backlog growth and a 42% increase from twelve months ago.
Second Quarter Review
Net income increased to $151 million from $26 million in the
first quarter 2024. Adjusted EBITDA increased to $139 million from
$54 million in the first quarter primarily due to higher
utilization and average daily revenue for both the floater and
jackup fleets along with lower contract drilling expense. Adjusted
EBITDAR increased to $150 million from $84 million in the first
quarter.
Revenues increased to $610 million from $525 million in the
first quarter 2024. Excluding reimbursable items, revenues
increased to $573 million from $491 million in the first quarter
primarily due to higher utilization and average daily revenue for
both the floater and jackup fleets as several rigs commenced new
contracts during the first and second quarters, including VALARIS
DS-7 which commenced operations in late May following its
reactivation.
Contract drilling expense decreased to $439 million from $445
million in the first quarter 2024. Excluding reimbursable items,
contract drilling expense decreased to $407 million from $414
million in the first quarter primarily due to lower reactivation
expense related to VALARIS DS-7 as well as lower repair and
personnel costs for the jackup fleet. These items were partially
offset by increased operating costs for the floater fleet due to
higher utilization and costs incurred related to the stacking of
VALARIS DS-13 and DS-14.
Depreciation expense increased to $30 million from $27 million
in the first quarter 2024 primarily due to new assets placed in
service for certain rigs following reactivation projects and
capital upgrades. General and administrative expense increased to
$33 million from $27 million in the first quarter 2024 primarily
due to higher professional fees.
Other income increased to $12 million from $9 million in the
first quarter 2024 primarily due to an increase in interest income,
partially offset by an increase in interest expense and a decrease
in foreign currency gains.
Tax benefit of $30 million compared to tax expense of $13
million in the first quarter 2024. The second quarter tax provision
included $64 million of discrete tax benefit and the first quarter
tax provision included $7 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 increased
to $34 million from $20 million in the first quarter.
Cash and cash equivalents and restricted cash decreased to $410
million as of June 30, 2024, from $509 million as of March 31,
2024. The decrease was primarily due to capital expenditures,
partially offset by positive operating cash flow. In the second
quarter, operating cash flow was negatively impacted by changes in
working capital primarily due to an increase in accounts receivable
related to higher revenues.
Capital expenditures of $110 million decreased from $151 million
in the first quarter 2024 due to lower capital expenditures
associated with VALARIS DS-13 and DS-14, which mobilized from South
Korea to Las Palmas during the first quarter and lower reactivation
capital expenditures as VALARIS DS-7 commenced its contract during
the second quarter following its reactivation. These items were
partially offset by an increase in maintenance and upgrade capital
expenditures.
Results Compared to Prior Guidance
The Company's second quarter 2024 results were better than prior
guidance primarily due to strong operating performance resulting in
higher revenue efficiency, certain contracts extending longer than
previously anticipated and the timing of certain costs that are now
expected to be recognized in subsequent quarters.
Second Quarter Segment Review
Floaters
Floater revenues increased to $384 million from $324 million in
the first quarter 2024. Excluding reimbursable items, revenues
increased to $370 million from $310 million in the first quarter.
The increase was primarily due to a full quarter of operations for
VALARIS DS-12 and DPS-5, which both commenced contracts during the
first quarter, along with revenue from DS-7, which commenced
operations in late May following its reactivation. In addition,
VALARIS DS-15 and DS-16 started new higher day rate contracts in
the second quarter, which contributed to an increase in average
daily revenue.
Contract drilling expense increased to $257 million from $253
million in the first quarter 2024. Excluding reimbursable items,
contract drilling expense increased to $245 million from $240
million in the first quarter primarily due to higher utilization
for the floater fleet and costs incurred related to the stacking of
VALARIS DS-13 and DS-14. This was partially offset by lower
reactivation expense due to VALARIS DS-7 returning to work in the
second quarter following its reactivation.
Jackups
Jackup revenues increased to $186 million from $152 million in
the first quarter 2024. Excluding reimbursable items, revenues
increased to $167 million from $139 million in the first quarter
primarily due to higher utilization for the jackup fleet, including
for VALARIS 107 which commenced a contract during the first quarter
as well as VALARIS 123 and Stavanger, which both started new
contracts during the second quarter, following out of service time
during the first quarter while undergoing contract preparation and
survey work.
Contract drilling expense decreased to $123 million from $134
million in the first quarter 2024. Excluding reimbursable items,
contract drilling expense decreased to $108 million from $122
million in the first quarter primarily due to lower repair and
maintenance expense as rigs returned to work following out of
service time for contract preparations and survey work in the first
quarter, and lower personnel expense.
ARO Drilling
Revenues decreased to $124 million from $138 million in the
first quarter 2024 primarily due to out of service time for both
scheduled repair and maintenance projects and unplanned downtime
during the second quarter, partially offset by incremental
operating days for VALARIS 108, which started its contract late in
the first quarter. Contract drilling expense decreased to $94
million from $98 million in the first quarter primarily due to
lower bareboat charter expense for leased rigs.
Other
Revenues decreased to $40 million from $48 million in the first
quarter 2024 primarily due to lower revenues earned from bareboat
charter agreements with ARO and lower reimbursable revenues.
Contract drilling expense decreased to $20 million from $22 million
in the first quarter primarily due to lower reimbursable
expenses.
Three Months Ended
(Unaudited)
Floaters
Jackups
ARO (1)
Other
Reconciling Items (1)(2)
Consolidated Total
(in millions of $, except %)
Q2 2024
Q1 2024
Chg
Q2 2024
Q1 2024
Chg
Q2 2024
Q1 2024
Chg
Q2 2024
Q1 2024
Chg
Q2 2024
Q1 2024
Q2 2024
Q1 2024
Chg
Revenues
$
383.9
$
324.4
18
%
$
185.8
$
152.3
22
%
$
124.2
$
138.3
(10
)%
$
40.4
$
48.3
(16
)%
$
(124.2
)
$
(138.3
)
$
610.1
$
525.0
16
%
Operating expenses
Contract drilling
257.4
253.4
(2
)%
123.2
133.9
8
%
94.1
98.3
4
%
19.6
22.2
12
%
(55.6
)
(63.0
)
438.7
444.8
1
%
Depreciation
14.1
13.2
(7
)%
10.9
10.4
(5
)%
19.7
19.0
(4
)%
2.5
1.3
(92
)%
(17.5
)
(17.1
)
29.7
26.8
(11
)%
General and admin.
—
—
—
%
—
—
—
%
5.5
5.8
5
%
—
—
—
%
27.0
20.7
32.5
26.5
(23
)%
Equity in earnings (losses) of ARO
—
—
—
%
—
—
—
%
—
—
—
%
—
—
—
%
(0.3
)
2.4
(0.3
)
2.4
113
%
Operating income
$
112.4
$
57.8
94
%
$
51.7
$
8.0
546
%
$
4.9
$
15.2
(68
)%
$
18.3
$
24.8
(26
)%
$
(78.4
)
$
(76.5
)
$
108.9
$
29.3
272
%
Net income (loss)
$
114.1
$
64.1
78
%
$
52.8
$
8.8
500
%
$
(6.7
)
$
(1.6
)
319
%
$
18.3
$
24.8
(26
)%
$
(27.7
)
$
(70.6
)
$
150.8
$
25.5
491
%
Adjusted EBITDA
$
126.4
$
71.0
78
%
$
62.6
$
18.4
240
%
$
24.6
$
34.2
(28
)%
$
20.8
$
26.1
(20
)%
$
(95.5
)
$
(96.0
)
$
138.9
$
53.7
159
%
Adjusted EBITDAR
$
137.3
$
101.3
36
%
$
62.6
$
18.4
240
%
$
24.6
$
34.2
(28
)%
$
20.8
$
26.1
(20
)%
$
(95.5
)
$
(96.0
)
$
149.8
$
84.0
78
%
(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 second quarter
2024 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on
Thursday, August 1, 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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
OPERATING REVENUES
$
610.1
$
525.0
$
483.8
$
455.1
$
415.2
OPERATING EXPENSES
Contract drilling (exclusive of
depreciation)
438.7
444.8
402.0
390.9
373.5
Depreciation
29.7
26.8
27.5
25.8
24.5
General and administrative
32.5
26.5
24.3
24.2
26.4
Total operating expenses
500.9
498.1
453.8
440.9
424.4
EQUITY IN EARNINGS (LOSSES) OF ARO
(0.3
)
2.4
8.3
2.4
(0.7
)
OPERATING INCOME (LOSS)
108.9
29.3
38.3
16.6
(9.9
)
OTHER INCOME (EXPENSE)
Interest income
31.0
21.0
27.2
26.6
24.6
Interest expense, net
(22.6
)
(17.7
)
(21.7
)
(19.4
)
(16.7
)
Other, net
3.5
5.8
(5.5
)
3.9
(0.8
)
11.9
9.1
—
11.1
7.1
INCOME (LOSS) BEFORE INCOME TAXES
120.8
38.4
38.3
27.7
(2.8
)
PROVISION (BENEFIT) FOR INCOME TAXES
(30.0
)
12.9
(790.2
)
10.7
24.5
NET INCOME (LOSS)
150.8
25.5
828.5
17.0
(27.3
)
NET INCOME (LOSS) ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(1.2
)
—
6.7
(4.1
)
(2.1
)
NET INCOME (LOSS) ATTRIBUTABLE TO
VALARIS
$
149.6
$
25.5
$
835.2
$
12.9
$
(29.4
)
EARNINGS (LOSS) PER SHARE
Basic
$
2.07
$
0.35
$
11.47
$
0.18
$
(0.39
)
Diluted
$
2.03
$
0.35
$
11.30
$
0.17
$
(0.39
)
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic
72.4
72.4
72.8
73.7
74.8
Diluted
73.7
73.6
73.9
74.8
74.8
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
As of
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
398.3
$
494.1
$
620.5
$
1,041.1
$
787.3
Restricted cash
12.0
15.0
15.2
16.2
18.0
Accounts receivable, net
631.7
510.9
459.3
492.4
473.4
Other current assets
182.6
177.6
177.2
178.7
168.7
Total current assets
$
1,224.6
$
1,197.6
$
1,272.2
$
1,728.4
$
1,447.4
PROPERTY AND EQUIPMENT, NET
1,809.4
1,732.3
1,633.8
1,159.9
1,073.7
LONG-TERM NOTES RECEIVABLE FROM ARO
259.2
289.3
282.3
275.2
268.0
INVESTMENT IN ARO
126.5
126.8
124.4
116.1
113.7
DEFERRED TAX ASSETS
841.1
854.8
855.1
53.8
48.5
OTHER ASSETS
154.8
153.6
154.4
151.5
137.1
$
4,415.6
$
4,354.4
$
4,322.2
$
3,484.9
$
3,088.4
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable - trade
$
347.0
$
394.2
$
400.1
$
376.4
$
364.2
Accrued liabilities and other
360.6
366.5
344.2
346.6
294.7
Total current liabilities
$
707.6
$
760.7
$
744.3
$
723.0
$
658.9
LONG-TERM DEBT
1,081.0
1,080.1
1,079.3
1,079.4
681.9
DEFERRED TAX LIABILITIES
31.2
31.6
29.9
17.1
16.7
OTHER LIABILITIES
408.4
451.7
471.7
465.4
464.8
TOTAL LIABILITIES
2,228.2
2,324.1
2,325.2
2,284.9
1,822.3
TOTAL EQUITY
2,187.4
2,030.3
1,997.0
1,200.0
1,266.1
$
4,415.6
$
4,354.4
$
4,322.2
$
3,484.9
$
3,088.4
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended June 30,
2024
2023
OPERATING ACTIVITIES
Net income
$
176.3
$
21.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense
56.5
47.8
Accretion of discount on notes receivable
from ARO
(27.6
)
(14.0
)
Deferred income tax expense
15.5
7.1
Share-based compensation expense
15.4
12.7
Equity in earnings of ARO
(2.1
)
(2.6
)
(Gain) loss on asset disposals
0.1
(27.9
)
Loss on debt extinguishment
—
29.2
Changes in contract liabilities
(24.8
)
(7.5
)
Changes in deferred costs
(0.8
)
(6.9
)
Other
4.2
2.5
Changes in other operating assets and
liabilities
(168.8
)
63.5
Contributions to pension plans and other
post-retirement benefits
(6.1
)
(2.6
)
Net cash provided by operating
activities
$
37.8
$
122.6
INVESTING ACTIVITIES
Additions to property and equipment
$
(261.5
)
$
(127.3
)
Net proceeds from disposition of
assets
0.1
29.1
Net cash used in investing activities
$
(261.4
)
$
(98.2
)
FINANCING ACTIVITIES
Payments for share repurchases
$
(1.4
)
$
(64.4
)
Issuance of Second Lien Notes
—
700.0
Redemption of First Lien Notes
—
(571.8
)
Debt issuance costs
—
(31.0
)
Other
(0.4
)
(0.4
)
Net cash provided by (used in) financing
activities
$
(1.8
)
$
32.4
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
(225.4
)
$
56.8
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
635.7
748.5
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
410.3
$
805.3
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
OPERATING ACTIVITIES
Net income (loss)
$
150.8
$
25.5
$
828.5
$
17.0
$
(27.3
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation expense
29.7
26.8
27.5
25.8
24.5
Accretion of discount on notes receivable
from ARO
(20.6
)
(7.0
)
(7.1
)
(7.2
)
(7.0
)
Deferred income tax expense (benefit)
13.5
2.0
(788.7
)
(4.8
)
2.5
Share-based compensation expense
7.4
8.0
7.8
6.8
7.0
Equity in losses (earnings) of ARO
0.3
(2.4
)
(8.3
)
(2.4
)
0.7
(Gain) loss on asset disposals
—
0.1
(0.7
)
—
(27.8
)
Loss on extinguishment of debt
—
—
—
—
29.2
Changes in contract liabilities
(17.8
)
(7.0
)
8.8
3.6
13.3
Changes in deferred costs
(3.0
)
2.2
3.2
(22.4
)
(7.4
)
Other
2.4
1.8
0.6
2.7
2.1
Changes in other operating assets and
liabilities
(147.5
)
(21.3
)
27.3
31.0
(37.3
)
Contributions to pension plans and other
post-retirement benefits
(3.7
)
(2.4
)
(2.2
)
(1.9
)
(1.6
)
Net cash provided by (used in) operating
activities
$
11.5
$
26.3
$
96.7
$
48.2
$
(29.1
)
INVESTING ACTIVITIES
Additions to property and equipment
$
(110.2
)
$
(151.3
)
$
(463.0
)
$
(105.8
)
$
(71.0
)
Net proceeds from disposition of
assets
0.1
—
1.1
0.1
29.0
Net cash used in investing activities
$
(110.1
)
$
(151.3
)
$
(461.9
)
$
(105.7
)
$
(42.0
)
FINANCING ACTIVITIES
Payments for tax withholdings for
share-based awards
$
(0.2
)
$
(0.2
)
$
(0.2
)
$
(4.8
)
$
(0.4
)
Payments for share repurchases
—
(1.4
)
(51.2
)
(83.0
)
(64.4
)
Debt issuance costs
—
—
(1.9
)
(5.7
)
(31.0
)
Issuance of Second Lien Notes
—
—
—
403.0
700.0
Redemption of First Lien Notes
—
—
—
—
(571.8
)
Other
—
—
(3.1
)
—
—
Net cash provided by (used in) financing
activities
$
(0.2
)
$
(1.6
)
$
(56.4
)
$
309.5
$
32.4
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
(98.8
)
$
(126.6
)
$
(421.6
)
$
252.0
$
(38.7
)
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
509.1
635.7
1,057.3
805.3
844.0
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
410.3
$
509.1
$
635.7
$
1,057.3
$
805.3
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
REVENUES
Floaters
Drillships
$
291.5
$
249.6
$
190.7
$
168.2
$
147.2
Semisubmersibles
78.9
60.2
56.3
64.1
68.5
$
370.4
$
309.8
$
247.0
$
232.3
$
215.7
Reimbursable and Other Revenues (1)
13.5
14.6
16.2
11.0
11.7
Total Floaters
$
383.9
$
324.4
$
263.2
$
243.3
$
227.4
Jackups
(2)
HD Harsh Environment
$
87.6
$
67.5
$
76.6
$
75.5
$
54.1
HD & SD Modern
63.7
56.9
79.0
68.8
67.9
SD Legacy
15.4
14.8
14.2
10.5
12.5
$
166.7
$
139.2
$
169.8
$
154.8
$
134.5
Reimbursable and Other Revenues (1)
19.1
13.1
9.5
11.1
10.1
Total Jackups
$
185.8
$
152.3
$
179.3
$
165.9
$
144.6
Other
Leased and Managed Rigs
$
35.6
$
42.1
$
36.0
$
40.1
$
37.4
Reimbursable and Other Revenues (1)
4.8
6.2
5.3
5.8
5.8
Total Other
$
40.4
$
48.3
$
41.3
$
45.9
$
43.2
Total Operating Revenues
$
610.1
$
525.0
$
483.8
$
455.1
$
415.2
Total Reimbursable and Other Revenues
(1)
$
37.4
$
33.9
$
31.0
$
27.9
$
27.6
Revenues Excluding Reimbursable and Other
Revenues
$
572.7
$
491.1
$
452.8
$
427.2
$
387.6
(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)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
ADJUSTED EBITDA (1)
Floaters
Drillships
$
91.2
$
55.6
$
16.7
$
2.8
$
0.3
Semisubmersibles
35.2
15.4
20.5
25.4
30.8
$
126.4
$
71.0
$
37.2
$
28.2
$
31.1
Jackups
HD Harsh Environment
$
36.3
$
5.4
$
21.1
$
20.9
$
6.1
HD & SD Modern
21.3
8.6
30.1
20.4
11.6
SD Legacy
5.0
4.4
4.8
2.9
3.4
$
62.6
$
18.4
$
56.0
$
44.2
$
21.1
Total
$
189.0
$
89.4
$
93.2
$
72.4
$
52.2
Other
Leased and Managed Rigs
$
20.8
$
26.1
$
23.2
$
27.2
$
24.9
Total
$
209.8
$
115.5
$
116.4
$
99.6
$
77.1
Support
costs
General and administrative expense
$
32.5
$
26.5
$
24.3
$
24.2
$
26.4
Onshore support costs
38.4
35.3
34.6
35.4
35.4
$
70.9
$
61.8
$
58.9
$
59.6
$
61.8
Total
$
138.9
$
53.7
$
57.5
$
40.0
$
15.3
(1)
Adjusted EBITDA is earnings before
interest, tax, depreciation and amortization. Adjusted EBITDA for
asset category also excludes onshore support costs and general and
administrative expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
ADJUSTED EBITDAR (1)
Active Fleet (2)
$
218.1
$
126.3
$
137.5
$
129.3
$
104.5
Leased and Managed Rigs
20.8
26.1
23.2
27.2
24.9
$
238.9
$
152.4
$
160.7
$
156.5
$
129.4
Stacked Fleet (3)
(18.2
)
(6.6
)
(5.8
)
(6.0
)
(8.2
)
$
220.7
$
145.8
$
154.9
$
150.5
$
121.2
Support
costs
General and administrative expense
$
32.5
$
26.5
$
24.3
$
24.2
$
26.4
Onshore support costs
38.4
35.3
34.6
35.4
35.4
$
70.9
$
61.8
$
58.9
$
59.6
$
61.8
Total
$
149.8
$
84.0
$
96.0
$
90.9
$
59.4
Reactivation costs (4)
$
10.9
$
30.3
$
38.5
$
50.9
$
44.1
(1)
Adjusted EBITDAR is earnings before
interest, tax, depreciation, amortization and reactivation costs.
Adjusted EBITDAR for active fleet, leased and managed rigs and
stacked fleet also excludes onshore support costs and general and
administrative expense.
(2)
Active fleet represents rigs that are not
preservation stacked and includes rigs that are in the process of
being reactivated.
(3)
Stacked fleet represents the combined
total of all preservation and stacking costs.
(4)
Reactivation costs, all of which are
attributed to Valaris' active fleet, are excluded from adjusted
EBITDAR.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
ADJUSTED EBITDAR (1)
Floaters
Drillships
$
102.1
$
85.9
$
55.2
$
53.7
$
44.4
Semisubmersibles
35.2
15.4
20.5
25.4
30.9
$
137.3
$
101.3
$
75.7
$
79.1
$
75.3
Jackups
HD Harsh Environment
$
36.3
$
5.4
$
21.1
$
20.9
$
6.1
HD & SD Modern
21.3
8.6
30.1
20.4
11.5
SD Legacy
5.0
4.4
4.8
2.9
3.4
$
62.6
$
18.4
$
56.0
$
44.2
$
21.0
Total
$
199.9
$
119.7
$
131.7
$
123.3
$
96.3
Other
Leased and Managed Rigs
$
20.8
$
26.1
$
23.2
$
27.2
$
24.9
Total
$
220.7
$
145.8
$
154.9
$
150.5
$
121.2
Support
costs
General and administrative expense
$
32.5
$
26.5
$
24.3
$
24.2
$
26.4
Onshore support costs
38.4
35.3
34.6
35.4
35.4
$
70.9
$
61.8
$
58.9
$
59.6
$
61.8
Total
$
149.8
$
84.0
$
96.0
$
90.9
$
59.4
(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
Jul 29, 2024
Apr 30, 2024
Feb 15, 2024
Nov 1, 2023
Aug 1, 2023
CONTRACT BACKLOG (1)
Floaters
Drillships
$
2,508.3
$
2,223.9
$
2,307.6
$
1,726.5
$
1,684.9
Semisubmersibles
122.1
180.7
224.1
259.5
272.4
$
2,630.4
$
2,404.6
$
2,531.7
$
1,986.0
$
1,957.3
Jackups
HD Harsh Environment
$
665.0
$
607.0
$
646.8
$
327.9
$
307.4
HD & SD Modern
438.9
449.1
347.1
406.8
366.8
SD Legacy
189.0
128.8
173.5
186.9
118.4
$
1,292.9
$
1,184.9
$
1,167.4
$
921.6
$
792.6
Total
$
3,923.3
$
3,589.5
$
3,699.1
$
2,907.6
$
2,749.9
Other (2)
Leased and Managed Rigs
$
384.2
$
427.7
$
222.3
$
250.5
$
291.4
Total
$
4,307.5
$
4,017.2
$
3,921.4
$
3,158.1
$
3,041.3
(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.
(2)
In late July, ARO received suspension
notices for the drilling contracts for VALARIS 147 and VALARIS 148,
which are two of our jackups leased to ARO. Discussions are ongoing
with Saudi Aramco regarding whether other Valaris leased rigs or
ARO-owned rigs could be subject to the suspensions instead of
VALARIS 147 and VALARIS 148 as well as when the suspensions will be
effective. As of July 29, 2024, these two rigs accounted for $35
million of Valaris' contract backlog.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
AVERAGE DAILY REVENUE (1)
Floaters
Drillships
$
358,000
$
328,000
$
307,000
$
288,000
$
253,000
Semisubmersibles
289,000
261,000
229,000
257,000
252,000
$
340,000
$
312,000
$
285,000
$
279,000
$
252,000
Jackups
HD Harsh Environment
$
134,000
$
123,000
$
111,000
$
116,000
$
100,000
HD & SD Modern
115,000
103,000
119,000
105,000
102,000
SD Legacy
85,000
81,000
79,000
83,000
81,000
$
120,000
$
108,000
$
111,000
$
108,000
$
99,000
Total
$
217,000
$
197,000
$
174,000
$
171,000
$
158,000
Other
Leased and Managed Rigs
$
37,000
$
45,000
$
39,000
$
44,000
$
41,000
Total
$
167,000
$
153,000
$
136,000
$
134,000
$
124,000
(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.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
UTILIZATION - TOTAL FLEET (1)
Floaters
Drillships
69 %
64 %
60 %
58 %
58 %
Semisubmersibles
60 %
51 %
53 %
54 %
60 %
66 %
61 %
58 %
57 %
59 %
Jackups
HD Harsh Environment
65 %
55 %
68 %
64 %
55 %
HD & SD Modern
45 %
44 %
52 %
51 %
52 %
SD Legacy
100 %
100 %
97 %
69 %
78 %
58 %
53 %
62 %
58 %
55 %
Total
61 %
56 %
60 %
57 %
56 %
Other
Leased and Managed Rigs
100 %
100 %
100 %
100 %
100 %
Total
69 %
64 %
68 %
65 %
65 %
Pro Forma Jackups (2)
68 %
64 %
70 %
67 %
65 %
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
UTILIZATION - ACTIVE FLEET (1)
(2)
Floaters
Drillships
90 %
84 %
68 %
63 %
71 %
Semisubmersibles
100 %
85 %
89 %
90 %
100 %
92 %
84 %
72 %
70 %
78 %
Jackups
HD Harsh Environment
80 %
67 %
83 %
79 %
67 %
HD & SD Modern
81 %
69 %
80 %
79 %
81 %
SD Legacy
100 %
100 %
97 %
68 %
78 %
82 %
71 %
83 %
78 %
74 %
Total
86 %
76 %
79 %
75 %
76 %
Other
Leased and Managed Rigs
100 %
100 %
100 %
100 %
100 %
Total
90 %
82 %
84 %
81 %
82 %
Pro Forma Jackups (3)
88 %
80 %
88 %
84 %
82 %
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
AVAILABLE DAYS - TOTAL FLEET
(1)
Floaters
Drillships
1,183
1,183
1,032
1,012
1,001
Semisubmersibles
455
455
460
460
455
1,638
1,638
1,492
1,472
1,456
Jackups
HD Harsh Environment
1,001
1,001
1,012
1,012
990
HD & SD Modern
1,225
1,258
1,288
1,288
1,274
SD Legacy
182
182
184
184
199
2,408
2,441
2,484
2,484
2,463
Total
4,046
4,079
3,976
3,956
3,919
Other
Leased and Managed Rigs
959
926
920
920
910
Total
5,005
5,005
4,896
4,876
4,829
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
AVAILABLE DAYS - ACTIVE FLEET
(1)
Floaters
Drillships
910
910
920
920
819
Semisubmersibles
273
273
276
276
273
1,183
1,183
1,196
1,196
1,092
Jackups
HD Harsh Environment
819
819
828
828
808
HD & SD Modern
683
803
828
828
819
SD Legacy
182
182
184
184
199
1,684
1,804
1,840
1,840
1,826
Total
2,867
2,987
3,036
3,036
2,918
Other
Leased and Managed Rigs
959
926
920
920
910
Total
3,826
3,913
3,956
3,956
3,828
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
OPERATING DAYS (1)
Floaters
Drillships
815
761
622
584
583
Semisubmersibles
273
231
245
249
272
1,088
992
867
833
855
Jackups
HD Harsh Environment
655
549
691
652
540
HD & SD Modern
552
555
665
654
663
SD Legacy
182
182
178
126
155
1,389
1,286
1,534
1,432
1,358
Total
2,477
2,278
2,401
2,265
2,213
Other
Leased and Managed Rigs
959
926
920
920
910
Total
3,436
3,204
3,321
3,185
3,123
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
REVENUE EFFICIENCY (1)
Floaters
Drillships
99 %
94 %
88 %
89 %
95 %
Semisubmersibles
100 %
99 %
94 %
93 %
100 %
99 %
95 %
90 %
90 %
96 %
Jackups
HD Harsh Environment
99 %
100 %
99 %
99 %
99 %
HD & SD Modern
100 %
99 %
97 %
97 %
98 %
SD Legacy
100 %
100 %
97 %
99 %
100 %
99 %
99 %
98 %
98 %
99 %
Total
99 %
97 %
93 %
94 %
97 %
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Active Fleet (1)
Floaters
Drillships
10
10
10
10
9
Semisubmersibles
3
3
3
3
3
13
13
13
13
12
Jackups
HD Harsh Environment
9
9
9
9
9
HD & SD Modern
7
8
9
9
9
SD Legacy
2
2
2
2
2
18
19
20
20
20
Total Active Fleet
31
32
33
33
32
Stacked Fleet
Floaters
Drillships
3
3
3
1
2
Semisubmersibles
2
2
2
2
2
5
5
5
3
4
Jackups
HD Harsh Environment
2
2
2
2
2
HD & SD Modern
6
5
5
5
5
8
7
7
7
7
Total Stacked Fleet
13
12
12
10
11
Leased Rigs (2)
Jackups
HD Harsh Environment
1
1
1
1
1
HD & SD Modern
8
8
7
7
7
Total Leased Rigs
9
9
8
8
8
Total
53
53
53
51
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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Cash
$
131.7
$
69.5
$
92.9
$
110.3
$
100.6
Other current assets
157.8
198.3
184.0
191.2
188.3
Non-current assets
1,214.4
1,094.2
1,081.0
915.3
879.6
Total assets
$
1,503.9
$
1,362.0
$
1,357.9
$
1,216.8
$
1,168.5
Current liabilities
$
173.2
$
135.0
$
136.0
$
173.6
$
122.6
Non-current liabilities
1,172.2
1,057.6
1,056.8
886.2
887.5
Total liabilities
$
1,345.4
$
1,192.6
$
1,192.8
$
1,059.8
$
1,010.1
Shareholders' equity
$
158.5
$
169.4
$
165.1
$
157.0
$
158.4
Total liabilities and shareholders'
equity
$
1,503.9
$
1,362.0
$
1,357.9
$
1,216.8
$
1,168.5
ARO DRILLING
CONDENSED INCOME STATEMENT
INFORMATION
(In millions)
(Unaudited)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Revenues
$
124.2
$
138.3
$
133.7
$
121.5
$
117.8
Operating expenses
Contract drilling (exclusive of
depreciation)
94.1
98.3
88.0
92.0
95.0
Depreciation
19.7
19.0
19.5
15.8
15.6
General and administrative
5.5
5.8
6.3
5.6
5.7
Operating income
$
4.9
$
15.2
$
19.9
$
8.1
$
1.5
Other expense, net
13.4
13.1
3.6
9.0
8.8
Provision (benefit) for income taxes
(1.8
)
3.7
6.0
0.4
—
Net income (loss)
$
(6.7
)
$
(1.6
)
$
10.3
$
(1.3
)
$
(7.3
)
EBITDA
$
24.6
$
34.2
$
39.4
$
23.9
$
17.1
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)
Jul 29, 2024
Apr 30, 2024
Feb 15, 2024
Nov 1, 2023
Aug 1, 2023
CONTRACT BACKLOG (1)
Owned Rigs
$
1,322.9
$
1,398.9
$
1,475.4
$
1,547.0
$
686.3
Leased Rigs (2)
510.4
583.3
662.7
743.7
815.0
Total
$
1,833.3
$
1,982.2
$
2,138.1
$
2,290.7
$
1,501.3
(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,
includes $113 million related to the drilling contracts for VALARIS
147 and VALARIS 148, which have received suspension notices from
Saudi Aramco.
Three Months Ended
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
AVERAGE DAILY REVENUE (1)
Owned Rigs
$
104,000
$
105,000
$
100,000
$
91,000
$
90,000
Leased Rigs (2)
101,000
99,000
97,000
98,000
98,000
Total
$
102,000
$
102,000
$
98,000
$
95,000
$
95,000
UTILIZATION (3)
Owned Rigs
77
%
91
%
96
%
91
%
83
%
Leased Rigs (2)
86
%
93
%
94
%
95
%
98
%
Total
82
%
92
%
95
%
93
%
91
%
REVENUE EFFICIENCY (4)
Owned Rigs
90
%
98
%
94
%
99
%
95
%
Leased Rigs (2)
91
%
99
%
98
%
97
%
99
%
Total
91
%
98
%
96
%
98
%
97
%
NUMBER OF RIGS (AT QUARTER END)
Owned Rigs
9
8
8
7
7
Leased Rigs (2)
9
9
8
8
8
Total
18
17
16
15
15
AVAILABLE DAYS (5)
Owned Rigs
728
728
695
644
637
Leased Rigs (2)
765
744
736
736
728
Total
1,493
1,472
1,431
1,380
1,365
OPERATING DAYS (6)
Owned Rigs
561
664
668
585
532
Leased Rigs (2)
657
692
691
697
713
Total
1,218
1,356
1,359
1,282
1,245
(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)
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 and Adjusted EBITDAR, 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 "EBITDA" as net income (loss) 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
second 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).
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 (loss) as reported to Adjusted
EBITDA is included in the tables below (in millions):
Three Months Ended
Jun 30, 2024
Mar 31, 2024
VALARIS
Net income
$
150.8
$
25.5
Add (subtract):
Income tax expense (benefit)
(30.0
)
12.9
Interest expense
22.6
17.7
Other income
(34.5
)
(26.8
)
Operating income
$
108.9
$
29.3
Add (subtract):
Depreciation expense
29.7
26.8
Equity in (earnings) losses of ARO
0.3
(2.4
)
Adjusted EBITDA
$
138.9
$
53.7
Three Months Ended
Jun 30, 2024
Mar 31, 2024
ARO
Net loss
$
(6.7
)
$
(1.6
)
Add (subtract):
Income tax expense (benefit)
(1.8
)
3.7
Other expense, net
13.4
13.1
Operating income
$
4.9
$
15.2
Add:
Depreciation expense
19.7
19.0
EBITDA
$
24.6
$
34.2
Reconciliation of Net Income to Adjusted EBITDA and Adjusted
EBITDAR
(In millions)
Three Months Ended
Jun 30, 2024
Mar 31, 2024
FLOATERS
Net income
$
114.1
$
64.1
Subtract:
Other income
(1.7
)
(6.3
)
Operating income
$
112.4
$
57.8
Add (subtract):
Depreciation
14.1
13.2
Other costs
(0.1
)
—
Adjusted EBITDA (1)
$
126.4
$
71.0
Add:
Reactivation costs
10.9
30.3
Adjusted EBITDAR (1)
$
137.3
$
101.3
JACKUPS
Net income
$
52.8
$
8.8
Subtract:
Other income
(1.1
)
(0.8
)
Operating income
$
51.7
$
8.0
Add:
Depreciation
10.9
10.4
Adjusted EBITDA (1)
$
62.6
$
18.4
Adjusted EBITDAR (1)
$
62.6
$
18.4
OTHER
Net income
$
18.3
$
24.8
Operating income
$
18.3
$
24.8
Add:
Depreciation
2.5
1.3
Adjusted EBITDA (1)
$
20.8
$
26.1
Adjusted EBITDAR (1)
$
20.8
$
26.1
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
ACTIVE FLEET (1)
Net income
$
186.6
$
80.8
$
78.7
$
57.5
$
68.2
Subtract:
Other income
(2.8
)
(7.0
)
(3.3
)
(1.0
)
(27.4
)
Operating income
$
183.8
$
73.8
$
75.4
$
56.5
$
40.8
Add (subtract):
Reactivation costs
10.9
30.3
38.5
50.9
44.1
Depreciation
23.5
22.2
23.5
21.9
19.6
Other
(0.1
)
—
0.1
—
—
Adjusted EBITDAR (2)
$
218.1
$
126.3
$
137.5
$
129.3
$
104.5
LEASED AND MANAGED RIGS
Net income
$
18.3
$
24.8
$
22.1
$
25.8
$
23.8
Operating income
$
18.3
$
24.8
$
22.1
$
25.8
$
23.8
Add (subtract):
Depreciation
2.5
1.3
1.2
1.3
1.2
Other
—
—
(0.1
)
0.1
(0.1
)
Adjusted EBITDAR (2)
$
20.8
$
26.1
$
23.2
$
27.2
$
24.9
STACKED FLEET
Net loss
$
(19.7
)
$
(7.9
)
$
(8.3
)
$
(8.6
)
$
(11.7
)
Subtract:
Other income
—
(0.1
)
(0.1
)
—
—
Operating loss
$
(19.7
)
$
(8.0
)
$
(8.4
)
$
(8.6
)
$
(11.7
)
Add (subtract):
Depreciation
1.5
1.4
2.7
2.5
3.6
Other
—
—
(0.1
)
0.1
(0.1
)
Adjusted EBITDAR (2)
$
(18.2
)
$
(6.6
)
$
(5.8
)
$
(6.0
)
$
(8.2
)
TOTAL FLEET
Net income
$
185.2
$
97.7
$
92.5
$
74.7
$
80.3
Subtract:
Other income
(2.8
)
(7.1
)
(3.4
)
(1.0
)
(27.4
)
Operating income
$
182.4
$
90.6
$
89.1
$
73.7
$
52.9
Add (subtract):
Reactivation costs
10.9
30.3
38.5
50.9
44.1
Depreciation
27.5
24.9
27.4
25.7
24.4
Other
(0.1
)
—
(0.1
)
0.2
(0.2
)
Adjusted EBITDAR (2)
$
220.7
$
145.8
$
154.9
$
150.5
$
121.2
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
DRILLSHIPS
Net income (loss)
$
79.6
$
49.4
$
4.7
$
(9.9
)
$
(12.0
)
Subtract:
Other income
(1.5
)
(6.2
)
(2.0
)
(0.6
)
(0.4
)
Operating income (loss)
78.1
43.2
2.7
(10.5
)
(12.4
)
Add (subtract):
Depreciation
13.2
12.4
14.0
13.2
12.8
Other
(0.1
)
—
—
0.1
(0.1
)
Adjusted EBITDA (1)
$
91.2
$
55.6
$
16.7
$
2.8
$
0.3
SEMISUBMERSIBLES
Net income
$
34.5
$
14.7
$
19.6
$
24.4
$
29.9
Add (subtract):
Other (income) expense
(0.2
)
(0.1
)
(0.1
)
—
0.1
Operating income
34.3
14.6
19.5
24.4
30.0
Add:
Depreciation
0.9
0.8
1.0
1.0
0.8
Adjusted EBITDA (1)
$
35.2
$
15.4
$
20.5
$
25.4
$
30.8
(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
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
HD HARSH ENVIRONMENT
Net income
$
31.0
$
0.4
$
15.4
$
15.4
$
0.4
Subtract:
Other income
(0.3
)
(0.3
)
(0.1
)
(0.2
)
—
Operating income
30.7
0.1
15.3
15.2
0.4
Add:
Depreciation
5.6
5.3
5.8
5.7
5.7
Adjusted EBITDA (1)
$
36.3
$
5.4
$
21.1
$
20.9
$
6.1
HD & SD MODERN JACKUPS
Net income
$
19.2
$
6.4
$
28.2
$
17.7
$
8.9
Subtract:
Other income
(0.8
)
(0.6
)
(1.2
)
(0.2
)
(0.1
)
Operating income
18.4
5.8
27.0
17.5
8.8
Add (subtract):
Depreciation
2.9
2.8
3.0
2.9
2.9
Other
—
—
0.1
—
(0.1
)
Adjusted EBITDA (1)
$
21.3
$
8.6
$
30.1
$
20.4
$
11.6
SD LEGACY JACKUPS
Net income
$
2.6
$
2.0
$
2.5
$
1.3
$
29.8
Add (subtract):
Other (income) expense
—
0.1
—
—
(27.5
)
Operating income
2.6
2.1
2.5
1.3
2.3
Add (subtract):
Depreciation
2.4
2.3
2.4
1.6
1.0
Other
—
—
(0.1
)
—
0.1
Adjusted EBITDA (1)
$
5.0
$
4.4
$
4.8
$
2.9
$
3.4
(1) Adjusted EBITDA for asset category excludes onshore
support costs and general and administrative expense.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730726374/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
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