Valaris Reports Fourth Quarter 2023 Results
HAMILTON, Bermuda–(BUSINESS WIRE)–Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) today reported fourth quarter 2023 results.
President and Chief Executive Officer Anton Dibowitz said, “We continue to execute on our operating leverage by repricing rigs from legacy day rates to meaningfully higher market rates and successfully delivering reactivated rigs with attractive contracts. At the same time, we remain laser focused on delivering high levels of operational performance to our customers, as evidenced by another strong year of revenue efficiency.”
Dibowitz added, “During the fourth quarter, we were awarded new contracts and extensions with associated contract backlog of more than $1.4 billion. These awards include two multi-year drillship contracts at leading-edge day rates and several jackup contracts across the North Sea, Australia and Trinidad, demonstrating the depth of our customer relationships, track record of operational delivery and broad-based strength of the market.”
Dibowitz concluded, “We remain confident in the strength and duration of this upcycle and the outlook for Valaris is positive. We expect to deliver significant earnings and cash flow growth over the next few years and we intend to return all future free cash flow to shareholders unless there is a better or more value accretive use for it.”
Financial and Operational Highlights
- Net income of $829 million (including tax benefit of $790 million), Adjusted EBITDA of $58 million and Adjusted EBITDAR of $96 million;
- Delivered revenue efficiency of 93% during the quarter and 96% for the year;
- VALARIS DS-8 commenced a contract offshore Brazil late in the quarter, following its reactivation;
- VALARIS 110 received TotalEnergies’ and North Oil Company’s global jackup Rig of the Year award;
- Awarded new contracts and extensions with associated contract backlog of more than $1.4 billion during the fourth quarter;
- Increased total contract backlog to more than $3.9 billion as of February 15, 2024, representing a nearly 60% increase from twelve months ago;
- Took delivery of newbuild drillships VALARIS DS-13 and DS-14;
- Repurchased $50 million of shares during the fourth quarter and $200 million during the year;
- Valaris Board of Directors authorized an increase in the Company’s share repurchase program to $600 million from $300 million in February 2024;
- ARO Drilling took delivery of newbuild jackup Kingdom 1, and the rig started its maiden contract, during the fourth quarter.
Fourth Quarter Review
Net income increased to $829 million from $17 million in the third quarter 2023. Net income for the fourth quarter 2023 included a tax benefit of $790 million discussed below. Adjusted EBITDA increased to $58 million from $40 million in the third quarter primarily due to more operating days across the fleet and lower reactivation expense. Adjusted EBITDAR increased to $96 million from $91 million in the third quarter.
Revenues increased to $484 million from $455 million in the third quarter 2023. Excluding reimbursable items, revenues increased to $453 million from $427 million in the third quarter. The increase was primarily due to more operating days across the fleet, including for drillship VALARIS DS-17 that commenced a contract in early September, following its reactivation, and jackup VALARIS 107, which started a contract early in the fourth quarter after being idle for most of the third quarter.
Contract drilling expense increased to $402 million from $391 million in the third quarter 2023. Excluding reimbursable items, contract drilling expense increased to $374 million from $369 million in the third quarter primarily due to the increase in operating days mentioned above. This was partially offset by lower reactivation expense and lower repair and maintenance expense for the jackup fleet.
Depreciation expense increased to $28 million from $26 million in the third quarter 2023. General and administrative expense of $24 million was in line with the third quarter 2023.
Other income decreased to $0 million from $11 million in the third quarter 2023. This was primarily due to foreign currency exchange losses during the quarter compared to gains in the third quarter and an increase in interest expense associated with a $400 million debt issuance that was completed in the third quarter.
Tax benefit was $790 million compared to tax expense of $11 million in the third quarter 2023. The fourth quarter tax provision included $800 million of tax benefit due to changes in deferred tax asset valuation allowances.
Cash and cash equivalents and restricted cash decreased to $636 million as of December 31, 2023, from $1.1 billion as of September 30, 2023. The decrease was primarily due to capital expenditures and share repurchases, partially offset by positive operating cash flow.
Capital expenditures increased to $463 million from $106 million in the third quarter 2023 primarily due to the Company exercising options to take delivery of newbuild drillships VALARIS DS-13 and DS-14 for an aggregate purchase price of $337 million during the quarter.
Fourth Quarter Segment Review
Floaters
Floater revenues increased to $263 million from $243 million in the third quarter 2023. Excluding reimbursable items, revenues increased to $247 million from $232 million in the third quarter. The increase was primarily due to more operating days for VALARIS DS-17, which commenced its contract with Equinor offshore Brazil in early September, following its reactivation. This was partially offset by fewer operating days for VALARIS DS-12 due to mobilization and a brief shipyard visit between contracts.
Contract drilling expense increased to $226 million from $215 million in the third quarter 2023. Excluding reimbursable items, contract drilling expense increased to $211 million from $206 million in the third quarter. The increase was primarily due to more operating days for VALARIS DS-17, partially offset by lower reactivation expense.
Jackups
Jackup revenues increased to $179 million from $166 million in the third quarter 2023. Excluding reimbursable items, revenues increased to $170 million from $155 million in the third quarter primarily due to more operating days for VALARIS 107, 249 and Norway, all of which incurred some idle time during the third quarter. This was partially offset by fewer operating days for VALARIS 76 and 123, both of which completed contracts during the fourth quarter and are undergoing contract preparation and planned maintenance work prior to the start of their next contracts in 2024.
Contract drilling expense increased to $123 million from $122 million in the third quarter 2023. Excluding reimbursable items, contract drilling expense increased to $115 million from $114 million in the third quarter. Contract drilling expense was largely flat on higher revenues primarily due to lower repair and maintenance expense.
ARO Drilling
Revenues increased to $134 million from $122 million in the third quarter 2023 primarily due to newbuild jackup Kingdom 1 commencing its maiden contract in November and more operating days for ARO 4001 following some out of service days for planned maintenance during the third quarter. Contract drilling expense decreased to $88 million from $92 million in the third quarter primarily due to lower bareboat charter expense, partially offset by more operating days for the owned fleet.
Other
Revenues decreased to $41 million from $46 million in the third quarter 2023 primarily due to lower revenues earned from bareboat charter agreements with ARO. Contract drilling expense decreased to $18 million from $19 million in the third quarter.
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Fourth Quarter |
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|
Floaters |
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Jackups |
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ARO (1) |
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Other |
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Reconciling Items (1) (2) |
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Consolidated Total |
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|
(in millions, except %) |
Q4 |
Q3 |
Chg |
|
Q4 |
Q3 |
Chg |
|
Q4 |
Q3 |
Chg |
|
Q4 |
Q3 |
Chg |
|
Q4 |
Q3 |
|
Q4 |
Q3 |
Chg |
||||||||||||||||||||
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|
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|
|
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|
|
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|
|
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|
Revenues |
$ |
263.2 |
$ |
243.3 |
8 |
% |
|
$ |
179.3 |
$ |
165.9 |
8 |
% |
|
$ |
133.7 |
$ |
121.5 |
|
10 |
% |
|
$ |
41.3 |
$ |
45.9 |
(10 |
)% |
|
$ |
(133.7 |
) |
$ |
(121.5 |
) |
|
$ |
483.8 |
$ |
455.1 |
6 |
% |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Contract drilling |
|
226.0 |
|
215.2 |
(5 |
)% |
|
|
123.3 |
|
121.7 |
(1 |
)% |
|
|
88.0 |
|
92.0 |
|
4 |
% |
|
|
18.0 |
|
18.8 |
4 |
% |
|
|
(53.3 |
) |
|
(56.8 |
) |
|
|
402.0 |
|
390.9 |
(3 |
)% |
|
Depreciation |
|
15.0 |
|
14.2 |
(6 |
)% |
|
|
11.2 |
|
10.2 |
(10 |
)% |
|
|
19.5 |
|
15.8 |
|
(23 |
)% |
|
|
1.2 |
|
1.3 |
8 |
% |
|
|
(19.4 |
) |
|
(15.7 |
) |
|
|
27.5 |
|
25.8 |
(7 |
)% |
|
General and admin. |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
6.3 |
|
5.6 |
|
(13 |
)% |
|
|
— |
|
— |
— |
% |
|
|
18.0 |
|
|
18.6 |
|
|
|
24.3 |
|
24.2 |
— |
% |
|
Equity in earnings of ARO |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
— |
|
— |
|
— |
% |
|
|
— |
|
— |
— |
% |
|
|
8.3 |
|
|
2.4 |
|
|
|
8.3 |
|
2.4 |
246 |
% |
|
Operating income |
$ |
22.2 |
$ |
13.9 |
60 |
% |
|
$ |
44.8 |
$ |
34.0 |
32 |
% |
|
$ |
19.9 |
$ |
8.1 |
|
146 |
% |
|
$ |
22.1 |
$ |
25.8 |
(14 |
)% |
|
$ |
(70.7 |
) |
$ |
(65.2 |
) |
|
$ |
38.3 |
$ |
16.6 |
131 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Net income (loss) |
$ |
24.3 |
$ |
14.5 |
68 |
% |
|
$ |
46.1 |
$ |
34.4 |
34 |
% |
|
$ |
10.3 |
$ |
(1.3 |
) |
nm |
|
$ |
22.1 |
$ |
25.8 |
(14 |
)% |
|
$ |
725.7 |
|
$ |
(56.4 |
) |
|
$ |
828.5 |
$ |
17.0 |
nm |
||
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Adjusted EBITDA |
$ |
37.2 |
$ |
28.2 |
32 |
% |
|
$ |
56.0 |
$ |
44.2 |
27 |
% |
|
$ |
39.4 |
$ |
23.9 |
|
65 |
% |
|
$ |
23.2 |
$ |
27.2 |
(15 |
)% |
|
$ |
(98.3 |
) |
$ |
(83.5 |
) |
|
$ |
57.5 |
$ |
40.0 |
44 |
% |
|
Adjusted EBITDAR |
$ |
75.7 |
$ |
79.1 |
(4 |
)% |
|
$ |
56.0 |
$ |
44.2 |
27 |
% |
|
$ |
39.4 |
$ |
23.9 |
|
65 |
% |
|
$ |
23.2 |
$ |
27.2 |
(15 |
)% |
|
$ |
(98.3 |
) |
$ |
(83.5 |
) |
|
$ |
96.0 |
$ |
90.9 |
6 |
% |
|
(1) |
The full operating results included above for ARO are not included within our consolidated results and thus deducted under “Reconciling Items” and replaced with our equity in earnings of ARO. |
|
|
(2) |
Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, those costs are included in “reconciling items.” Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in “reconciling items” |
As previously announced, Valaris will hold its fourth quarter 2023 earnings conference call at 9:00 a.m. CST (10:00 a.m. ET) on Thursday, February 22, 2024. An updated investor presentation will be available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a 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; 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.
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VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(In millions, except per share amounts) |
|
|
|
|
Three Months Ended |
||||||||||||||||||
|
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Jun 30, 2023 |
|
Mar 31, 2023 |
|
Dec 31, 2022 |
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|
OPERATING REVENUES |
$ |
483.8 |
|
|
$ |
455.1 |
|
|
$ |
415.2 |
|
|
$ |
430.1 |
|
|
$ |
433.6 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Contract drilling (exclusive of depreciation) |
|
402.0 |
|
|
|
390.9 |
|
|
|
373.5 |
|
|
|
377.2 |
|
|
|
353.4 |
|
|
Depreciation |
|
27.5 |
|
|
|
25.8 |
|
|
|
24.5 |
|
|
|
23.3 |
|
|
|
23.8 |
|
|
General and administrative |
|
24.3 |
|
|
|
24.2 |
|
|
|
26.4 |
|
|
|
24.4 |
|
|
|
23.9 |
|
|
Total operating expenses |
|
453.8 |
|
|
|
440.9 |
|
|
|
424.4 |
|
|
|
424.9 |
|
|
|
401.1 |
|
|
EQUITY IN EARNINGS (LOSSES) OF ARO |
|
8.3 |
|
|
|
2.4 |
|
|
|
(0.7 |
) |
|
|
3.3 |
|
|
|
8.6 |
|
|
OPERATING INCOME (LOSS) |
|
38.3 |
|
|
|
16.6 |
|
|
|
(9.9 |
) |
|
|
8.5 |
|
|
|
41.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest income |
|
27.2 |
|
|
|
26.6 |
|
|
|
24.6 |
|
|
|
23.0 |
|
|
|
15.5 |
|
|
Interest expense, net |
|
(21.7 |
) |
|
|
(19.4 |
) |
|
|
(16.7 |
) |
|
|
(11.1 |
) |
|
|
(10.5 |
) |
|
Other, net |
|
(5.5 |
) |
|
|
3.9 |
|
|
|
(0.8 |
) |
|
|
0.6 |
|
|
|
(5.2 |
) |
|
|
|
— |
|
|
|
11.1 |
|
|
|
7.1 |
|
|
|
12.5 |
|
|
|
(0.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
38.3 |
|
|
|
27.7 |
|
|
|
(2.8 |
) |
|
|
21.0 |
|
|
|
40.9 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
(790.2 |
) |
|
|
10.7 |
|
|
|
24.5 |
|
|
|
(27.6 |
) |
|
|
9.8 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME (LOSS) |
|
828.5 |
|
|
|
17.0 |
|
|
|
(27.3 |
) |
|
|
48.6 |
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
6.7 |
|
|
|
(4.1 |
) |
|
|
(2.1 |
) |
|
|
(1.9 |
) |
|
|
(1.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS |
$ |
835.2 |
|
|
$ |
12.9 |
|
|
$ |
(29.4 |
) |
|
$ |
46.7 |
|
|
$ |
29.2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
$ |
11.47 |
|
|
$ |
0.18 |
|
|
$ |
(0.39 |
) |
|
$ |
0.62 |
|
|
$ |
0.39 |
|
|
Diluted |
$ |
11.30 |
|
|
$ |
0.17 |
|
|
$ |
(0.39 |
) |
|
$ |
0.61 |
|
|
$ |
0.38 |
|
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
72.8 |
|
|
|
73.7 |
|
|
|
74.8 |
|
|
|
75.2 |
|
|
|
75.2 |
|
|
Diluted |
|
73.9 |
|
|
|
74.8 |
|
|
|
74.8 |
|
|
|
76.4 |
|
|
|
76.0 |
|
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(In millions) |
|
|
|
|
As of |
|||||||||
|
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
|||||
|
ASSETS |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
CURRENT ASSETS |
|
|
|
|
|
|||||
|
Cash and cash equivalents |
$ |
620.5 |
$ |
1,041.1 |
$ |
787.3 |
$ |
822.5 |
$ |
724.1 |
|
Restricted cash |
|
15.2 |
|
16.2 |
|
18.0 |
|
21.5 |
|
24.4 |
|
Accounts receivable, net |
|
459.3 |
|
492.4 |
|
473.4 |
|
393.4 |
|
449.1 |
|
Other current assets |
|
177.2 |
|
178.7 |
|
168.7 |
|
158.1 |
|
148.6 |
|
Total current assets |
$ |
1,272.2 |
$ |
1,728.4 |
$ |
1,447.4 |
$ |
1,395.5 |
$ |
1,346.2 |
|
|
|
|
|
|
|
|||||
|
PROPERTY AND EQUIPMENT, NET |
|
1,633.8 |
|
1,159.9 |
|
1,073.7 |
|
1,015.5 |
|
977.2 |
|
|
|
|
|
|
|
|||||
|
LONG-TERM NOTES RECEIVABLE FROM ARO |
|
282.3 |
|
275.2 |
|
268.0 |
|
261.0 |
|
254.0 |
|
|
|
|
|
|
|
|||||
|
INVESTMENT IN ARO |
|
124.4 |
|
116.1 |
|
113.7 |
|
114.4 |
|
111.1 |
|
|
|
|
|
|
|
|||||
|
DEFERRED TAX ASSETS |
|
855.1 |
|
53.8 |
|
48.5 |
|
50.5 |
|
55.1 |
|
|
|
|
|
|
|
|||||
|
OTHER ASSETS |
|
154.4 |
|
151.5 |
|
137.1 |
|
114.3 |
|
116.7 |
|
|
|
|
|
|
|
|||||
|
|
$ |
4,322.2 |
$ |
3,484.9 |
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
CURRENT LIABILITIES |
|
|
|
|
|
|||||
|
Accounts payable – trade |
$ |
400.1 |
$ |
376.4 |
$ |
364.2 |
$ |
324.1 |
$ |
256.5 |
|
Accrued liabilities and other |
|
344.2 |
|
346.6 |
|
294.7 |
|
267.7 |
|
247.9 |
|
Total current liabilities |
$ |
744.3 |
$ |
723.0 |
$ |
658.9 |
$ |
591.8 |
$ |
504.4 |
|
|
|
|
|
|
|
|||||
|
LONG-TERM DEBT |
|
1,079.3 |
|
1,079.4 |
|
681.9 |
|
542.8 |
|
542.4 |
|
|
|
|
|
|
|
|||||
|
DEFERRED TAX LIABILITIES |
|
29.9 |
|
17.1 |
|
16.7 |
|
16.1 |
|
16.1 |
|
|
|
|
|
|
|
|||||
|
OTHER LIABILITIES |
|
471.7 |
|
465.4 |
|
464.8 |
|
448.5 |
|
499.5 |
|
|
|
|
|
|
|
|||||
|
TOTAL LIABILITIES |
|
2,325.2 |
|
2,284.9 |
|
1,822.3 |
|
1,599.2 |
|
1,562.4 |
|
|
|
|
|
|
|
|||||
|
TOTAL EQUITY |
|
1,997.0 |
|
1,200.0 |
|
1,266.1 |
|
1,352.0 |
|
1,297.9 |
|
|
|
|
|
|
|
|||||
|
|
$ |
4,322.2 |
$ |
3,484.9 |
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
|
|
|
Year Ended December 31, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
OPERATING ACTIVITIES |
|
|
|
||||
|
Net income |
$ |
866.8 |
|
|
$ |
181.8 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Deferred income tax expense (benefit) |
|
(786.4 |
) |
|
|
7.9 |
|
|
Depreciation expense |
|
101.1 |
|
|
|
91.2 |
|
|
Loss on extinguishment of debt |
|
29.2 |
|
|
|
— |
|
|
Net gain on sale of property |
|
(28.6 |
) |
|
|
(141.2 |
) |
|
Accretion of discount on notes receivable from ARO |
|
(28.3 |
) |
|
|
(44.9 |
) |
|
Share-based compensation expense |
|
27.3 |
|
|
|
17.4 |
|
|
Equity in earnings of ARO |
|
(13.3 |
) |
|
|
(24.5 |
) |
|
Net periodic pension and retiree medical income |
|
(0.9 |
) |
|
|
(16.4 |
) |
|
Loss on impairment |
|
— |
|
|
|
34.5 |
|
|
Changes in deferred costs |
|
(26.1 |
) |
|
|
(38.8 |
) |
|
Changes in contract liabilities |
|
4.9 |
|
|
|
62.4 |
|
|
Other |
|
6.7 |
|
|
|
8.3 |
|
|
Changes in operating assets and liabilities |
|
121.8 |
|
|
|
(6.6 |
) |
|
Contributions to pension plans and other post-retirement benefits |
|
(6.7 |
) |
|
|
(4.1 |
) |
|
Net cash provided by operating activities |
$ |
267.5 |
|
|
$ |
127.0 |
|
|
INVESTING ACTIVITIES |
|
|
|
||||
|
Additions to property and equipment |
$ |
(696.1 |
) |
|
$ |
(207.0 |
) |
|
Net proceeds from disposition of assets |
|
30.3 |
|
|
|
150.3 |
|
|
Purchases of short-term investments |
|
— |
|
|
|
(220.0 |
) |
|
Maturities of short-term investments |
|
— |
|
|
|
220.0 |
|
|
Repayment of note receivable from ARO |
|
— |
|
|
|
40.0 |
|
|
Net cash used in investing activities |
$ |
(665.8 |
) |
|
$ |
(16.7 |
) |
|
FINANCING ACTIVITIES |
|
|
|
||||
|
Issuance of Second Lien Notes |
$ |
1,103.0 |
|
|
$ |
— |
|
|
Redemption of First Lien Notes |
|
(571.8 |
) |
|
|
— |
|
|
Payments for share repurchases |
|
(198.6 |
) |
|
|
— |
|
|
Debt issuance costs |
|
(38.6 |
) |
|
|
— |
|
|
Payments for tax withholdings for share-based awards |
|
(5.4 |
) |
|
|
(2.5 |
) |
|
Consent solicitation fees |
|
— |
|
|
|
(3.9 |
) |
|
Other |
|
(3.1 |
) |
|
|
— |
|
|
Net cash provided by (used in) financing activities |
$ |
285.5 |
|
|
$ |
(6.4 |
) |
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(112.8 |
) |
|
$ |
103.9 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
748.5 |
|
|
|
644.6 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
635.7 |
|
|
$ |
748.5 |
|
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
|
|
|
Three Months Ended |
||||||||||||||
|
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Net income (loss) |
$ |
828.5 |
|
$ |
17.0 |
|
$ |
(27.3 |
) |
$ |
48.6 |
|
$ |
31.1 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
||||||||||
|
Deferred income tax expense (benefit) |
|
(788.7 |
) |
|
(4.8 |
) |
|
2.5 |
|
|
4.6 |
|
|
0.8 |
|
|
Depreciation expense |
|
27.5 |
|
|
25.8 |
|
|
24.5 |
|
|
23.3 |
|
|
23.8 |
|
|
Equity in losses (earnings) of ARO |
|
(8.3 |
) |
|
(2.4 |
) |
|
0.7 |
|
|
(3.3 |
) |
|
(8.6 |
) |
|
Share-based compensation expense |
|
7.8 |
|
|
6.8 |
|
|
7.0 |
|
|
5.7 |
|
|
5.9 |
|
|
Accretion of discount on notes receivable |
|
(7.1 |
) |
|
(7.2 |
) |
|
(7.0 |
) |
|
(7.0 |
) |
|
(7.1 |
) |
|
Net gain on sale of property |
|
(0.7 |
) |
|
— |
|
|
(27.8 |
) |
|
(0.1 |
) |
|
(3.5 |
) |
|
Net periodic pension and retiree medical income |
|
(0.6 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(4.3 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
29.2 |
|
|
— |
|
|
— |
|
|
Changes in contract liabilities |
|
8.8 |
|
|
3.6 |
|
|
13.3 |
|
|
(20.8 |
) |
|
3.6 |
|
|
Changes in deferred costs |
|
3.2 |
|
|
(22.4 |
) |
|
(7.4 |
) |
|
0.5 |
|
|
8.8 |
|
|
Other |
|
1.2 |
|
|
2.8 |
|
|
2.2 |
|
|
0.5 |
|
|
0.4 |
|
|
Changes in operating assets and liabilities |
|
27.3 |
|
|
31.0 |
|
|
(37.3 |
) |
|
100.8 |
|
|
103.0 |
|
|
Contributions to pension plans and other post-retirement benefits |
|
(2.2 |
) |
|
(1.9 |
) |
|
(1.6 |
) |
|
(1.0 |
) |
|
0.8 |
|
|
Net cash provided by (used in) operating activities |
$ |
96.7 |
|
$ |
48.2 |
|
$ |
(29.1 |
) |
$ |
151.7 |
|
$ |
154.7 |
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Additions to property and equipment |
$ |
(463.0 |
) |
$ |
(105.8 |
) |
$ |
(71.0 |
) |
$ |
(56.3 |
) |
$ |
(53.9 |
) |
|
Net proceeds from disposition of assets |
|
1.1 |
|
|
0.1 |
|
|
29.0 |
|
|
0.1 |
|
|
3.5 |
|
|
Maturities of short-term investments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
220.0 |
|
|
Net cash provided by (used in) investing activities |
$ |
(461.9 |
) |
$ |
(105.7 |
) |
$ |
(42.0 |
) |
$ |
(56.2 |
) |
$ |
169.6 |
|
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Payments for share repurchases |
$ |
(51.2 |
) |
$ |
(83.0 |
) |
$ |
(64.4 |
) |
$ |
— |
|
$ |
— |
|
|
Debt issuance costs |
|
(1.9 |
) |
|
(5.7 |
) |
|
(31.0 |
) |
|
— |
|
|
— |
|
|
Payments for tax withholdings for share-based awards |
|
(0.2 |
) |
|
(4.8 |
) |
|
(0.4 |
) |
|
— |
|
|
— |
|
|
Issuance of Second Lien Notes |
|
— |
|
|
403.0 |
|
|
700.0 |
|
|
— |
|
|
— |
|
|
Redemption of First Lien Notes |
|
— |
|
|
— |
|
|
(571.8 |
) |
|
— |
|
|
— |
|
|
Other |
|
(3.1 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Net cash provided by (used in) financing activities |
$ |
(56.4 |
) |
$ |
309.5 |
|
$ |
32.4 |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
||||||||||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(421.6 |
) |
$ |
252.0 |
|
$ |
(38.7 |
) |
$ |
95.5 |
|
$ |
324.3 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
1,057.3 |
|
|
805.3 |
|
|
844.0 |
|
|
748.5 |
|
|
424.2 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
635.7 |
|
$ |
1,057.3 |
|
$ |
805.3 |
|
$ |
844.0 |
|
$ |
748.5 |
|
Contacts
Investor & Media Contacts:
Darin Gibbins
Vice President – Investor Relations and Treasurer
+1-713-979-4623
Tim Richardson
Director – Investor Relations
+1-713-979-4619
