Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today
reported fourth quarter 2022 results.
President and Chief Executive Officer Anton Dibowitz said, “I
would like to thank the entire Valaris team for continuing to
deliver excellent operational performance, achieving revenue
efficiency of 98% during the fourth quarter. This strong
operational performance has translated into continued contracting
success, and we were awarded new contracts and extensions with
associated contract backlog of more than $400 million during the
fourth quarter.”
Dibowitz added, “Last year was an important year for Valaris as
we laid the foundation for continued success during the unfolding
industry upcycle. We reactivated four floaters, all of which
returned to work largely on time and on budget. Reactivation of a
fifth floater, VALARIS DS-17, is well underway and we are in
advanced discussions for a multi-year opportunity for one of our
stacked drillships that is expected to deliver meaningful returns.
We remain intent on executing our strategy of being focused, value
driven and responsible in our decision making and we believe that
our strategy will drive increased earnings and significant free
cash flow over time."
Financial and Operational Highlights
- Generated net income of $31 million, Adjusted EBITDA of $54
million and Adjusted EBITDAR of $75 million in the fourth
quarter;
- Delivered revenue efficiency of 98% in the fourth quarter and
97% for the full-year 2022;
- Awarded new contracts and extensions with associated contract
backlog of more than $400 million during the fourth quarter,
including floater contracts offshore Brazil and Egypt as well as
jackup contracts in the Middle East, the North Sea and the U.S.
Gulf of Mexico; and
- Additional contracts awarded or extended in 2023 to date, with
associated contract backlog of approximately $230 million,
including a floater contract offshore West Africa and jackup
contracts in the Middle East, Australia and Trinidad.
Fourth Quarter Review
Net income was $31 million compared to $78 million in the third
quarter 2022. Adjusted EBITDA decreased to $54 million from $76
million in the third quarter. Adjusted EBITDAR decreased to $75
million from $94 million in the third quarter.
Revenues decreased to $434 million from $437 million in the
third quarter 2022. Excluding reimbursable items, revenues
decreased to $413 million from $416 million in the third quarter
primarily due to lower utilization and lower average day rates for
the harsh environment jackup fleet, partially offset by an increase
in utilization for the floater fleet.
Contract drilling expense increased to $353 million from $337
million in the third quarter 2022. Excluding reimbursable items,
contract drilling expense increased to $333 million from $316
million in the third quarter primarily due to an increase in
operating days for the floater fleet and higher reactivation costs,
which increased to $21 million from $18 million.
Depreciation expense increased marginally to $24 million from
$23 million in the third quarter 2022. General and administrative
expense increased to $24 million from $19 million in the third
quarter 2022 primarily due to higher personnel costs and
professional fees.
Other expense was less than $1 million compared to other income
of $30 million in the third quarter 2022. Other expense included
foreign currency exchange losses of $13 million as compared to
gains of $10 million in the third quarter. Third quarter other
income also included non-cash interest income of $15 million
related to the write-off of the discount attributable to the $40
million of shareholder notes receivable repaid by ARO. These items
were partially offset by a $3 million increase in interest income
during the fourth quarter.
Tax expense was $10 million compared to $14 million in the third
quarter 2022. The fourth quarter tax provision included $3 million
of discrete tax benefit attributable to the resolution of prior
period tax matters. The third quarter tax provision included $2
million of discrete tax expense primarily attributable to changes
in liabilities for unrecognized tax benefits associated with tax
positions taken in prior years, partially offset by discrete tax
benefits attributable to the resolution of other prior period tax
matters. Adjusted for discrete items, tax expense increased to $13
million from $12 million in the third quarter.
Total liquidity, which includes cash and cash equivalents,
restricted cash and short-term investments, increased to $748
million as of December 31, 2022, from $644 million as of September
30, 2022, primarily due to cash flow generated from operations,
including changes in working capital, of which $55 million was a
refund payment from the IRS related to the CARES Act that was
received in the fourth quarter.
Capital expenditures of $54 million were in line with the third
quarter 2022.
Fourth Quarter Segment Review
Floaters
Floater revenues increased to $211 million from $202 million in
the third quarter 2022. Excluding reimbursable items, revenues
increased to $203 million from $192 million in the third quarter.
The increase was primarily due to higher revenue efficiency across
the floater fleet and a full quarter of revenues for VALARIS DS-4
and DS-9, which commenced contracts early in the third quarter.
Contract drilling expense increased to $173 million from $161
million in the third quarter 2022. Excluding reimbursable items,
contract drilling expense increased to $165 million from $151
million in the third quarter. The increase was primarily due to
more operating days across the floater fleet and higher
reactivation costs, mostly for VALARIS DS-17, which is expected to
commence a contract later this year.
Jackups
Jackup revenues decreased to $182 million from $196 million in
the third quarter 2022. Excluding reimbursable items, revenues
decreased to $176 million from $190 million in the third quarter
primarily due to VALARIS Stavanger completing its contract offshore
Norway and idle time between contracts for VALARIS 123, 144 and
115. This was partially offset by more operating days for VALARIS
118 and 92 following a contract startup and a special periodic
survey, respectively.
Contract drilling expense increased to $130 million from $128
million in the third quarter 2022. Excluding reimbursable items,
contract drilling expense increased marginally to $124 million from
$123 million in the third quarter.
ARO Drilling
Revenues increased to $120 million from $111 million in the
third quarter 2022 primarily due to higher utilization as certain
rigs returned to work following out of service periods for planned
maintenance. Contract drilling expense decreased to $86 million
from $90 million in the third quarter primarily due to higher
planned maintenance costs in the third quarter.
Other
Revenues increased marginally to $41 million from $40 million in
the third quarter 2022. Contract drilling expense of $18 million
was in line with the third quarter.
Fourth Quarter
Floaters
Jackups
ARO (1)
Other
Reconciling
Items (1)(2)
Consolidated Total
(in millions of $ except %)
Q4
2022
Q3
2022
Chg
Q4
2022
Q3
2022
Chg
Q4
2022
Q3
2022
Chg
Q4
2022
Q3
2022
Chg
Q4
2022
Q3
2022
Q4
2022
Q3
2022
Chg
Revenues
211.0
201.7
5
%
181.8
195.9
(7
)%
120.4
111.4
8
%
40.8
39.6
3
%
(120.4
)
(111.4
)
433.6
437.2
(1
)%
Operating expenses
Contract drilling
172.6
160.5
(8
)%
129.5
128.0
(1
)%
85.5
90.0
5
%
18.4
17.8
(3
)%
(52.6
)
(59.6
)
353.4
336.7
(5
)%
Depreciation
12.9
12.6
(2
)%
9.6
8.7
(10
)%
16.1
15.4
(5
)%
1.2
1.2
—
%
(16.0
)
(15.3
)
23.8
22.6
(5
)%
General and admin.
—
—
—
%
—
—
—
%
5.6
4.7
(19
)%
—
—
—
%
18.3
14.5
23.9
19.2
(24
)%
Equity in earnings of ARO
—
—
—
%
—
—
—
%
—
—
—
%
—
—
—
%
8.6
2.9
8.6
2.9
197
%
Operating income (loss)
25.5
28.6
(11
)%
42.7
59.2
(28
)%
13.2
1.3
915
%
21.2
20.6
3
%
(61.5
)
(48.1
)
41.1
61.6
(33
)%
Net income (loss)
26.6
28.6
(7
)%
46.4
59.1
(21
)%
10.7
(1.3
)
nm
21.2
20.7
2
%
(73.8
)
(29.4
)
31.1
77.7
(60
)%
Adjusted EBITDA
37.5
40.7
(8
)%
51.1
62.6
(18
)%
29.3
16.7
75
%
22.4
22.1
1
%
(86.0
)
(66.1
)
54.3
76.0
(29
)%
Adjusted EBITDAR
58.1
58.5
(1
)%
51.2
62.6
(18
)%
29.3
16.7
75
%
22.4
22.1
1
%
(86.0
)
(66.1
)
75.0
93.8
(20
)%
(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
2022 earnings conference call at 9:00 a.m. CST (10:00 a.m. ET) on
Tuesday, February 21, 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; performance of our joint ventures, including our
joint venture with Saudi Aramco; 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; the effect, impact, potential duration and
other implications of COVID-19; future operations; increasing
regulatory complexity; 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; 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; increased scrutiny of our
Environmental, Social and Governance practices, initiatives and
reporting responsibilities; changes in customer strategy, including
increased focus on renewable energy projects; future levels of
offshore drilling activity; governmental action, civil unrest and
political and economic uncertainties; terrorism, piracy and
military action; risks inherent to shipyard rig reactivation,
construction, upgrade, repair, maintenance or enhancement; our
ability to enter into, and the terms of, future drilling contracts;
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; debt restrictions that may limit our liquidity and
flexibility; 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 SEC'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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
OPERATING REVENUES
$
433.6
$
437.2
$
413.3
$
318.4
$
305.5
OPERATING EXPENSES
Contract drilling (exclusive of
depreciation)
353.4
336.7
361.8
331.3
280.9
Loss on impairment
—
—
34.5
—
—
Depreciation
23.8
22.6
22.3
22.5
25.1
General and administrative
23.9
19.2
19.0
18.8
18.3
Total operating expenses
401.1
378.5
437.6
372.6
324.3
EQUITY IN EARNINGS (LOSSES) OF ARO
8.6
2.9
8.7
4.3
(1.3
)
OPERATING INCOME (LOSS)
41.1
61.6
(15.6
)
(49.9
)
(20.1
)
OTHER INCOME (EXPENSE)
Interest income
15.5
27.9
11.2
10.9
11.0
Interest expense, net
(10.5
)
(11.7
)
(11.6
)
(11.5
)
(11.7
)
Reorganization items, net
(0.3
)
(0.4
)
(0.7
)
(1.0
)
(4.9
)
Other, net
(4.9
)
14.1
149.7
11.0
27.0
(0.2
)
29.9
148.6
9.4
21.4
INCOME (LOSS) BEFORE INCOME TAXES
40.9
91.5
133.0
(40.5
)
1.3
PROVISION (BENEFIT) FOR INCOME TAXES
9.8
13.8
20.2
(0.7
)
(32.0
)
NET INCOME (LOSS)
31.1
77.7
112.8
(39.8
)
33.3
NET INCOME (LOSS) ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(1.9
)
(3.4
)
(1.2
)
1.2
—
NET INCOME (LOSS) ATTRIBUTABLE TO
VALARIS
$
29.2
$
74.3
$
111.6
$
(38.6
)
$
33.3
EARNINGS (LOSS) PER SHARE
Basic
$
0.39
$
0.99
$
1.49
$
(0.51
)
$
0.44
Diluted
$
0.38
$
0.98
$
1.48
$
(0.51
)
$
0.44
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic
75.2
75.1
75.0
75.0
75.0
Diluted
76.0
75.6
75.6
75.0
75.0
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions)
As of
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
724.1
$
406.0
$
553.5
$
578.2
$
608.7
Restricted cash
24.4
18.2
23.8
30.0
35.9
Short-term investments
—
220.0
—
—
—
Accounts receivable, net
449.1
535.5
544.6
439.3
444.2
Other current assets
148.6
162.9
159.0
125.7
117.8
Total current assets
$
1,346.2
$
1,342.6
$
1,280.9
$
1,173.2
$
1,206.6
PROPERTY AND EQUIPMENT, NET
977.2
953.6
931.7
930.2
890.9
LONG-TERM NOTES RECEIVABLE FROM ARO
254.0
246.9
264.5
256.8
249.1
INVESTMENT IN ARO
111.1
102.6
99.6
90.9
86.6
OTHER ASSETS
171.8
175.5
184.1
180.5
169.9
$
2,860.3
$
2,821.2
$
2,760.8
$
2,631.6
$
2,603.1
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable - trade
$
256.5
$
256.6
$
287.0
$
311.2
$
225.8
Accrued liabilities and other
247.9
262.5
260.1
212.1
196.2
Total current liabilities
$
504.4
$
519.1
$
547.1
$
523.3
$
422.0
LONG-TERM DEBT
542.4
541.8
545.7
545.5
545.3
OTHER LIABILITIES
515.6
523.2
511.0
522.1
558.4
TOTAL LIABILITIES
1,562.4
1,584.1
1,603.8
1,590.9
1,525.7
TOTAL EQUITY
1,297.9
1,237.1
1,157.0
1,040.7
1,077.4
$
2,860.3
$
2,821.2
$
2,760.8
$
2,631.6
$
2,603.1
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Successor
Predecessor
Combined
(Non-GAAP) (3)
Year Ended
December 31, 2022
Eight Months Ended
December 31, 2021 (1)
Four Months Ended
April 30, 2021 (2)
Year Ended
December 31, 2021
OPERATING ACTIVITIES
Net income (loss)
$
181.8
$
(23.6
)
$
(4,463.8
)
$
(4,487.4
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Gain on asset disposals
(141.2
)
(21.2
)
(6.0
)
(27.2
)
Depreciation expense
91.2
66.1
159.6
225.7
Accretion of discount on notes
receivable
(44.9
)
(20.8
)
—
(20.8
)
Loss on impairment
34.5
—
756.5
756.5
Equity in earnings of ARO
(24.5
)
(6.1
)
(3.1
)
(9.2
)
Share-based compensation expense
17.4
4.3
4.8
9.1
Net periodic pension and retiree medical
income
(16.4
)
(8.7
)
(5.4
)
(14.1
)
Amortization, net
(9.0
)
2.3
(4.8
)
(2.5
)
Deferred income tax expense (benefit)
7.9
(21.3
)
(18.2
)
(39.5
)
Amortization of debt issuance cost
1.0
0.5
—
0.5
Non-cash reorganization items, net
—
—
3,487.3
3,487.3
Other
(1.6
)
0.3
7.3
7.6
Changes in operating assets and
liabilities
35.4
4.7
68.5
73.2
Contributions to pension plans and other
post retirement benefits
(4.1
)
(2.7
)
(22.5
)
(25.2
)
Net cash provided by (used in) operating
activities
$
127.5
$
(26.2
)
$
(39.8
)
$
(66.0
)
INVESTING ACTIVITIES
Purchases of short-term investments
$
(220.0
)
$
—
$
—
$
—
Maturities of short-term investments
220.0
—
—
—
Additions to property and equipment
(207.0
)
(50.2
)
(8.7
)
(58.9
)
Net proceeds from disposition of
assets
150.3
25.1
30.1
55.2
Repayments of note receivable from ARO
40.0
—
—
—
Net cash provided by (used in) investing
activities
$
(16.7
)
$
(25.1
)
$
21.4
$
(3.7
)
FINANCING ACTIVITIES
Consent solicitation fees
$
(3.9
)
$
—
$
—
$
—
Payments related to tax withholdings for
share-based awards
(2.5
)
—
—
—
Issuance of First lien notes
—
—
520.0
520.0
Payments to Predecessor Creditors
—
—
(129.9
)
(129.9
)
Other
—
—
(1.4
)
(1.4
)
Net cash provided by (used in) financing
activities
$
(6.4
)
$
—
$
388.7
$
388.7
Effect of exchange rate changes on cash
and cash equivalents
$
(0.5
)
$
(0.1
)
$
(0.1
)
$
(0.2
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
103.9
$
(51.4
)
$
370.2
$
318.8
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
644.6
696.0
325.8
325.8
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
748.5
$
644.6
$
696.0
$
644.6
(1)
Represents cash flows for the period from
May 1, 2021, through December 31, 2021 (the "Successor"
period).
(2)
Represents cash flows for the period from
January 1, 2021, through April 30, 2021 (the "Predecessor"
period).
(3)
As required by GAAP, results for the
Successor and Predecessor periods must be presented separately.
However, the Company has combined the cash flows of the Successor
and Predecessor periods ("combined" results) as a non-GAAP measure
to compare the year ended December 31, 2022, to the year ended
December 31, 2021, since we believe it provides the most meaningful
basis to analyze our results. These combined results do not comply
with GAAP and have not been prepared as pro forma results under
applicable SEC rules.
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
OPERATING ACTIVITIES
Net income (loss)
$
31.1
$
77.7
$
112.8
$
(39.8
)
$
33.3
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation expense
23.8
22.6
22.3
22.5
25.1
Equity in losses (earnings) of ARO
(8.6
)
(2.9
)
(8.7
)
(4.3
)
1.3
Accretion of discount on notes
receivable
(7.1
)
(22.4
)
(7.7
)
(7.7
)
(7.9
)
Share-based compensation expense
5.9
4.6
3.5
3.4
2.7
Net periodic pension and retiree medical
income
(4.3
)
(4.0
)
(4.1
)
(4.0
)
(2.6
)
Gain on asset disposals
(3.5
)
(0.1
)
(135.1
)
(2.5
)
(21.0
)
Amortization, net
(2.0
)
(5.4
)
(3.2
)
1.6
(0.5
)
Deferred income tax expense (benefit)
0.8
0.4
7.3
(0.6
)
(22.5
)
Amortization of debt issuance cost
0.3
0.3
0.2
0.2
0.2
Loss on impairment
—
—
34.5
—
—
Other
(2.4
)
0.5
0.3
—
0.3
Changes in operating assets and
liabilities
121.3
16.4
(134.8
)
32.5
(14.6
)
Contributions to pension plans and other
post-retirement benefits
(0.8
)
(0.6
)
(1.9
)
(0.8
)
(1.0
)
Net cash provided by (used in) operating
activities
$
154.5
$
87.1
$
(114.6
)
$
0.5
$
(7.2
)
INVESTING ACTIVITIES
Maturities of short-term investments
220.0
—
—
—
—
Additions to property and equipment
(53.9
)
(53.5
)
(61.1
)
(38.5
)
(26.5
)
Net proceeds from disposition of
assets
3.5
0.3
145.2
1.3
23.6
Purchases of short-term investments
—
(220.0
)
—
—
—
Repayments of note receivable from ARO
—
40.0
—
—
—
Net cash provided by (used in) investing
activities
$
169.6
$
(233.2
)
$
84.1
$
(37.2
)
$
(2.9
)
FINANCING ACTIVITIES
Consent solicitation fees
$
—
$
(3.9
)
$
—
$
—
$
—
Payments for tax withholdings for
share-based awards
—
(2.3
)
(0.2
)
—
—
Net cash used in financing activities
$
—
$
(6.2
)
$
(0.2
)
$
—
$
—
Effect of exchange rate changes on cash
and cash equivalents
$
0.2
$
(0.8
)
$
(0.2
)
$
0.3
$
—
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
324.3
$
(153.1
)
$
(30.9
)
$
(36.4
)
$
(10.1
)
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
424.2
577.3
608.2
644.6
654.7
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
748.5
$
424.2
$
577.3
$
608.2
$
644.6
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
REVENUES
Floaters
Drillships
$
151.9
$
139.8
$
149.0
$
85.4
$
73.5
Semisubmersibles
59.1
61.9
39.1
14.3
27.0
$
211.0
$
201.7
$
188.1
$
99.7
$
100.5
Jackups (1)
HD Ultra-Harsh & Harsh Environment
$
98.5
$
123.0
$
106.1
$
92.9
$
94.0
HD & SD Modern
62.5
59.0
61.1
67.9
56.2
SD Legacy
20.8
13.9
18.6
19.9
22.1
$
181.8
$
195.9
$
185.8
$
180.7
$
172.3
Total
$
392.8
$
397.6
$
373.9
$
280.4
$
272.8
Other
Leased and Managed Rigs
$
40.8
$
39.6
$
39.4
$
38.0
$
32.7
Valaris Total
$
433.6
$
437.2
$
413.3
$
318.4
$
305.5
(1)
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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ADJUSTED EBITDAR (1)
Active Fleet (1) (2)
$
117.5
$
129.6
$
98.7
$
66.5
$
79.6
Leased and Managed Rigs (1)
22.4
22.1
14.9
22.6
17.4
$
139.9
$
151.7
$
113.6
$
89.1
$
97.0
Stacked Fleet (1) (3)
(8.2
)
(8.5
)
(11.3
)
(10.7
)
(11.0
)
$
131.7
$
143.2
$
102.3
$
78.4
$
86.0
Support costs
General and administrative expense
$
23.9
$
19.2
$
19.0
$
18.8
$
18.3
Onshore support costs
32.8
30.2
29.7
29.0
23.4
$
56.7
$
49.4
$
48.7
$
47.8
$
41.7
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
—
—
0.2
Valaris Total
$
75.0
$
93.8
$
53.6
$
30.6
$
44.5
Reactivation costs (4)
$
20.7
$
17.8
$
24.3
$
61.5
$
37.1
(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, including rigs that are in the process of
being reactivated.
(3)
Stacked fleet represents the combined
total of all preservation and stacking costs.
(4)
Reactivation costs, all of which are
attributed to Valaris' active fleet, are excluded from adjusted
EBITDAR.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ADJUSTED EBITDAR (1)
Floaters
Drillships (1)
$
37.4
$
30.5
$
44.3
$
27.2
$
17.7
Semisubmersibles (1)
20.7
28.0
2.9
(15.0
)
3.2
$
58.1
$
58.5
$
47.2
$
12.2
$
20.9
Jackups
HD Ultra-Harsh & Harsh (1)
$
28.1
$
50.4
$
30.7
$
21.0
$
24.3
HD & SD - Modern (1)
12.9
10.1
1.7
13.7
11.6
SD - Legacy (1)
10.2
2.1
7.8
8.9
11.8
$
51.2
$
62.6
$
40.2
$
43.6
$
47.7
Total
$
109.3
$
121.1
$
87.4
$
55.8
$
68.6
Other
Leased and Managed Rigs (1)
$
22.4
$
22.1
$
14.9
$
22.6
$
17.4
Total
$
131.7
$
143.2
$
102.3
$
78.4
$
86.0
Support
costs
General and administrative expense
$
23.9
$
19.2
$
19.0
$
18.8
$
18.3
Onshore support costs
32.8
30.2
29.7
29.0
23.4
$
56.7
$
49.4
$
48.7
$
47.8
$
41.7
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
—
—
0.2
Valaris Total
$
75.0
$
93.8
$
53.6
$
30.6
$
44.5
(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)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ADJUSTED EBITDA (1)
Floaters
Drillships (1)
$
17.1
$
13.5
$
21.0
$
(21.4
)
$
(6.6
)
Semisubmersibles (1)
20.4
27.2
2.1
(27.3
)
(6.3
)
$
37.5
$
40.7
$
23.1
$
(48.7
)
$
(12.9
)
Jackups
HD Ultra-Harsh & Harsh (1)
$
28.0
$
50.5
$
30.5
$
20.4
$
21.0
HD & SD - Modern (1)
12.9
10.0
1.6
13.7
11.6
SD - Legacy (1)
10.2
2.1
7.9
8.9
11.8
$
51.1
$
62.6
$
40.0
$
43.0
$
44.4
Total
$
88.6
$
103.3
$
63.1
$
(5.7
)
$
31.5
Other
Leased and Managed Rigs (1)
$
22.4
$
22.1
$
14.9
$
22.6
$
17.3
Total
$
111.0
$
125.4
$
78.0
$
16.9
$
48.8
Support
costs
General and administrative expense
$
23.9
$
19.2
$
19.0
$
18.8
$
18.3
Onshore support costs
32.8
30.2
29.7
29.0
23.4
$
56.7
$
49.4
$
48.7
$
47.8
$
41.7
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
—
—
0.2
Valaris Total
$
54.3
$
76.0
$
29.3
$
(30.9
)
$
7.3
(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)
As of
February 21,
2023
October 31,
2022
July 28,
2022
May 2,
2022
February 21,
2022
CONTRACT BACKLOG (1)
Floaters
Drillships (2)
$
1,062.3
$
995.1
$
1,090.3
$
1,290.9
$
1,280.4
Semisubmersibles
314.6
379.5
359.6
375.8
384.9
$
1,376.9
$
1,374.6
$
1,449.9
$
1,666.7
$
1,665.3
Jackups
HD Ultra-Harsh & Harsh
348.3
185.1
192.0
218.8
309.7
HD & SD - Modern
341.1
395.3
377.6
225.7
252.1
SD - Legacy
52.9
82.3
72.3
70.7
81.2
$
742.3
$
662.7
$
641.9
$
515.2
$
643.0
Total
$
2,119.2
$
2,037.3
$
2,091.8
$
2,181.9
$
2,308.3
Other (3)
Leased and Managed Rigs
$
344.0
$
223.3
$
257.5
$
271.5
$
135.6
Valaris Total
$
2,463.2
$
2,260.6
$
2,349.3
$
2,453.4
$
2,443.9
(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)
Approximately $428 million of backlog as
of May 2, 2022 and February 21, 2022 was attributable to a contract
awarded to drillship VALARIS DS-11 for an eight-well deepwater
project in the U.S. Gulf of Mexico that was expected to commence in
mid-2024. In June 2022, the customer terminated the contract.
(3)
Leased rigs and managed rigs included in
Other reporting segment.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
AVERAGE DAY RATES (1)
Floaters
Drillships
$
215,000
$
220,000
$
213,000
$
203,000
$
196,000
Semisubmersibles
204,000
226,000
214,000
156,000
171,000
$
212,000
$
222,000
$
213,000
$
197,000
$
189,000
Jackups
HD Ultra-Harsh & Harsh
$
108,000
$
121,000
$
114,000
$
104,000
$
110,000
HD & SD Modern
83,000
82,000
79,000
80,000
76,000
SD Legacy
74,000
74,000
74,000
71,000
73,000
$
93,000
$
100,000
$
94,000
$
89,000
$
90,000
Total
$
133,000
$
138,000
$
120,000
$
108,000
$
111,000
Other
Leased and Managed Rigs
$
36,000
$
38,000
$
39,000
$
39,000
$
33,000
Valaris Total
$
108,000
$
112,000
$
98,000
$
90,000
$
89,000
(1)
Average day rates are derived by dividing
contract drilling revenues, adjusted to exclude certain types of
non-recurring reimbursable revenues, lump-sum revenues, revenues
earned during suspension periods and revenues attributable to
amortization of drilling contract intangibles, by the aggregate
number of contract days, adjusted to exclude contract days
associated with certain suspension periods, mobilizations,
demobilizations and shipyard contracts.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
UTILIZATION - TOTAL FLEET (1)
Floaters
Drillships
62
%
54
%
34
%
36
%
32
%
Semisubmersibles
57
%
54
%
37
%
11
%
30
%
60
%
54
%
35
%
28
%
31
%
Jackups
HD Ultra-Harsh & Harsh
77
%
85
%
81
%
78
%
73
%
HD & SD Modern
55
%
53
%
53
%
51
%
42
%
SD Legacy
99
%
67
%
88
%
75
%
66
%
68
%
67
%
67
%
63
%
55
%
Total
65
%
62
%
56
%
51
%
48
%
Other
Leased and Managed Rigs
100
%
100
%
100
%
100
%
100
%
Valaris Total
72
%
69
%
64
%
59
%
56
%
Pro Forma Jackups (2)
73
%
72
%
72
%
68
%
62
%
(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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
UTILIZATION - ACTIVE FLEET (1)
(2)
Floaters
Drillships
85
%
74
%
52
%
56
%
57
%
Semisubmersibles
96
%
91
%
62
%
19
%
51
%
88
%
79
%
55
%
45
%
55
%
Jackups
HD Ultra-Harsh & Harsh
85
%
94
%
89
%
85
%
80
%
HD & SD Modern
86
%
81
%
82
%
83
%
76
%
SD Legacy
99
%
67
%
90
%
100
%
84
%
87
%
85
%
86
%
86
%
79
%
Total
87
%
83
%
77
%
74
%
72
%
Other
Leased and Managed Rigs
100
%
100
%
100
%
100
%
100
%
Valaris Total
90
%
87
%
82
%
80
%
78
%
Pro Forma Jackups (3)
88
%
86
%
87
%
87
%
81
%
(1)
Rig utilization is derived by dividing the
number of operating days by the number of available days in the
period for the active fleet.
(2)
Active fleet represents rigs that are not
preservation stacked, including rigs that are in the process of
being reactivated.
(3)
Includes all Valaris jackups including
those leased to ARO Drilling.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
REVENUE EFFICIENCY (1)
Floaters
Drillships
96
%
90
%
95
%
98
%
92
%
Semisubmersibles
100
%
100
%
92
%
100
%
98
%
97
%
93
%
94
%
99
%
93
%
Jackups
HD Ultra-Harsh & Harsh
96
%
99
%
99
%
99
%
99
%
HD & SD Modern
99
%
97
%
98
%
100
%
98
%
SD Legacy
100
%
100
%
100
%
100
%
100
%
98
%
98
%
99
%
99
%
99
%
Valaris Total
98
%
96
%
97
%
99
%
97
%
(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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Active Fleet (1)
Floaters
Drillships
8
8
8
7
7
Semisubmersibles
3
3
3
3
3
11
11
11
10
10
Jackups
HD Ultra-Harsh & Harsh
10
10
10
10
10
HD & SD Modern
9
9
10
10
11
SD Legacy
3
3
3
3
3
22
22
23
23
24
Total Active Fleet
33
33
34
33
34
Stacked Fleet
Floaters
Drillships (2)
3
3
3
4
4
Semisubmersibles
2
2
2
2
2
5
5
5
6
6
Jackups
HD Ultra-Harsh & Harsh
1
1
1
1
1
HD & SD Modern
5
5
5
7
7
SD Legacy
—
—
—
—
1
6
6
6
8
9
Total Stacked Fleet
11
11
11
14
15
Leased Rigs (3)
Jackups
HD Ultra-Harsh & Harsh
1
1
1
1
1
HD & SD Modern
7
7
6
6
5
SD Legacy
—
—
—
1
1
Total Leased Rigs
8
8
7
8
7
Valaris Total
52
52
52
55
56
Managed Rigs (3)
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)
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.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
AVAILABLE DAYS - TOTAL FLEET
(1)
Floaters
Drillships
1,012
1,012
979
990
1,012
Semisubmersibles
460
460
455
450
460
1,472
1,472
1,434
1,440
1,472
Jackups
HD Ultra-Harsh & Harsh
1,012
1,012
1,001
990
1,012
HD & SD Modern
1,288
1,328
1,419
1,599
1,668
SD Legacy
276
276
279
360
420
2,576
2,616
2,699
2,949
3,100
Total
4,048
4,088
4,133
4,389
4,572
Other
Leased and Managed Rigs
920
880
874
831
828
Valaris Total
4,968
4,968
5,007
5,220
5,400
(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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
AVAILABLE DAYS - ACTIVE FLEET (1)
(2)
Floaters
Drillships
736
736
645
630
567
Semisubmersibles
276
276
273
270
276
1,012
1,012
918
900
843
Jackups
HD Ultra-Harsh & Harsh
920
920
910
900
920
HD & SD Modern
828
868
910
969
932
SD Legacy
276
276
273
270
328
2,024
2,064
2,093
2,139
2,180
Total
3,036
3,076
3,011
3,039
3,023
Other
Leased and Managed Rigs
920
880
874
831
828
Valaris Total
3,956
3,956
3,885
3,870
3,851
(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.
(2)
Active fleet represents rigs that are not
preservation stacked, including rigs that are in the process of
being reactivated.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
OPERATING DAYS (1)
Floaters
Drillships
623
546
335
353
322
Semisubmersibles
264
251
168
52
140
887
797
503
405
462
Jackups
HD Ultra-Harsh & Harsh
778
862
810
769
734
HD & SD Modern
713
700
750
809
706
SD Legacy
273
184
245
270
276
1,764
1,746
1,805
1,848
1,716
Total
2,651
2,543
2,308
2,253
2,178
Other
Leased and Managed Rigs
920
881
874
831
828
Valaris Total
3,571
3,424
3,182
3,084
3,006
(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
($ in millions, except average
day rate)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
DRILLSHIPS
Adjusted revenues (1)
$
134.4
$
120.1
$
128.1
$
73.1
$
63.3
Adjusted operating expense (2)
118.1
106.4
106.7
94.0
69.2
Rig operating margin
16.3
13.7
21.4
(20.9
)
(5.9
)
Rig operating margin %
12
%
11
%
17
%
(29
)%
(9
)%
Other operating expenses
Depreciation
12.0
11.8
11.6
11.3
10.8
Loss on impairment
—
—
34.5
—
—
$
12.0
$
11.8
$
46.1
$
11.3
$
10.8
Other operating income (expense) (3)
2.2
0.5
(0.4
)
0.5
(1.2
)
Operating income (loss) (4)
$
6.5
$
2.4
$
(25.1
)
$
(31.7
)
$
(17.9
)
Adjusted EBITDA (5)
$
17.1
$
13.5
$
21.0
$
(21.4
)
$
(6.6
)
Reactivation costs (6)
20.3
17.0
23.3
48.6
24.3
Adjusted EBITDAR
$
37.4
$
30.5
$
44.3
$
27.2
$
17.7
Preservation and stacking costs (5)
$
4.9
$
4.5
$
11.1
$
7.5
$
7.6
Number of Rigs (at quarter end)
Total Fleet
11
11
11
11
11
Active Fleet
8
8
8
7
7
Operating Days
623
546
335
353
322
Utilization - Active Fleet
85
%
74
%
52
%
56
%
57
%
Average Day Rate
$
215,000
$
220,000
$
213,000
$
203,000
$
196,000
(1)
Revenues exclusive of amortization and
reimbursable items. Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
period presentation.
(2)
Operating expense exclusive of
depreciation, amortization, reimbursable items, bad debt expense
and onshore support costs.
(3)
Other operating income (expense) includes
reimbursable revenue and expense, amortized revenue and expense,
bad debt expense and other miscellaneous items.
(4)
Starting from the second quarter 2022, we
adjusted the operating income (loss) to exclude support costs.
Prior periods were adjusted to conform with the current period
presentation.
(5)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
(6)
Included in adjusted operating
expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
SEMISUBMERSIBLES
Adjusted revenues (1)
$
54.0
$
58.3
$
36.3
$
8.1
$
24.0
Adjusted operating expense (2)
33.5
31.0
34.0
34.5
28.2
Rig operating margin
20.5
27.3
2.3
(26.4
)
(4.2
)
Rig operating margin %
38
%
47
%
6
%
(326
)%
(18
)%
Depreciation
0.9
0.8
0.8
0.8
0.8
Other operating income (expense) (3)
(0.5
)
(0.3
)
(0.5
)
(1.1
)
(1.9
)
Operating income (loss) (4)
$
19.1
$
26.2
$
1.0
$
(28.3
)
$
(6.9
)
Adjusted EBITDA (5)
$
20.4
$
27.2
$
2.1
$
(27.3
)
$
(6.3
)
Reactivation costs (6)
0.3
0.8
0.8
12.3
9.5
Adjusted EBITDAR
$
20.7
$
28.0
$
2.9
$
(15.0
)
$
3.2
Preservation and stacking costs (6)
$
1.3
$
1.5
$
4.1
$
1.2
$
1.0
Number of Rigs (at quarter end)
Total Fleet
5
5
5
5
5
Active Fleet
3
3
3
3
3
Operating Days
264
251
168
52
140
Utilization - Active Fleet
96
%
91
%
62
%
19
%
51
%
Average Day Rate
$
204,000
$
226,000
$
214,000
$
156,000
$
171,000
(1)
Revenues exclusive of amortization and
reimbursable items. Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
period presentation.
(2)
Operating expense exclusive of
depreciation, amortization, reimbursable items, bad debt expense
and onshore support costs.
(3)
Other operating expense includes
reimbursable revenue and expense, amortized revenue and expense,
bad debt expense and other miscellaneous items.
(4)
Starting from the second quarter 2022, we
adjusted the operating income (loss) to exclude support costs.
Prior periods were adjusted to conform with the current period
presentation.
(5)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
(6)
Included in adjusted operating
expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
HD ULTRA-HARSH &
HARSH JACKUPS
Adjusted revenues (1)
$
87.1
$
106.5
$
93.6
$
81.1
$
83.7
Adjusted operating expense (2)
59.3
56.2
63.4
58.1
61.4
Rig operating margin
27.8
50.3
30.2
23.0
22.3
Rig operating margin %
32
%
47
%
32
%
28
%
27
%
Depreciation
5.7
5.6
5.5
5.5
7.9
Other operating income (expense) (3)
3.6
7.1
5.1
0.1
(0.8
)
Operating income (4)
$
25.7
$
51.8
$
29.8
$
17.6
$
13.6
Adjusted EBITDA (5)
$
28.0
$
50.5
$
30.5
$
20.4
$
21.0
Reactivation costs (6)
0.1
(0.1
)
0.2
0.6
3.3
Adjusted EBITDAR
$
28.1
$
50.4
$
30.7
$
21.0
$
24.3
Preservation and stacking costs (6)
$
(0.5
)
$
—
$
0.6
$
0.1
$
0.1
Number of Rigs (at quarter end) (7)
Total Fleet
11
11
11
11
11
Active Fleet
10
10
10
10
10
Operating Days
778
862
810
769
734
Utilization - Active Fleet
85
%
94
%
89
%
85
%
80
%
Average Day Rate
$
108,000
$
121,000
$
114,000
$
104,000
$
110,000
(1)
Revenues exclusive of amortization and
reimbursable items. Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
period presentation.
(2)
Operating expense exclusive of
depreciation, amortization, reimbursable items, bad debt expense
and onshore support costs.
(3)
Other operating income (expense) includes
reimbursable revenue and expense, amortized revenue and expense,
bad debt expense and other miscellaneous items.
(4)
Starting from the second quarter 2022, we
adjusted the operating income to exclude support costs. Prior
periods were adjusted to conform with the current period
presentation.
(5)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
(6)
Included in adjusted operating
expense.
(7)
Jackup rigs leased to ARO are not included
in the number of rigs at quarter end.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
HD & SD MODERN JACKUPS
Adjusted revenues (1)
$
59.1
$
57.7
$
59.8
$
65.5
$
54.2
Adjusted operating expense (2)
45.9
47.6
57.9
47.6
40.6
Rig operating margin
13.2
10.1
1.9
17.9
13.6
Rig operating margin %
22
%
18
%
3
%
27
%
25
%
Depreciation
2.3
2.2
2.3
2.5
3.2
Other operating income (expense) (3)
(2.1
)
(1.5
)
(1.4
)
(8.4
)
(2.6
)
Operating income (loss) (4)
$
8.8
$
6.4
$
(1.8
)
$
7.0
$
7.8
Adjusted EBITDA (5)
$
12.9
$
10.0
$
1.6
$
13.7
$
11.6
Reactivation costs (6)
—
0.1
0.1
—
—
Adjusted EBITDAR
$
12.9
$
10.1
$
1.7
$
13.7
$
11.6
Preservation and stacking costs (6)
$
2.4
$
2.4
$
3.3
$
1.8
$
2.0
Number of Rigs (at quarter end) (7)
Total Fleet
14
14
15
17
18
Active Fleet
9
9
10
10
11
Operating Days
713
700
750
809
706
Utilization - Active Fleet
86
%
81
%
82
%
83
%
76
%
Average Day Rate
$
83,000
$
82,000
$
79,000
$
80,000
$
76,000
(1)
Revenues exclusive of amortization and
reimbursable items. Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
period presentation.
(2)
Operating expense exclusive of
depreciation, amortization, reimbursable items, bad debt expense
and onshore support costs.
(3)
Other operating expense includes
reimbursable revenue and expense, amortized revenue and expense,
bad debt expense and other miscellaneous items.
(4)
Starting from the second quarter 2022, we
adjusted the operating income (loss) to exclude support costs.
Prior periods were adjusted to conform with the current period
presentation.
(5)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
(6)
Included in adjusted operating
expense.
(7)
Jackup rigs leased to ARO are not included
in the number of rigs at quarter end.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
SD LEGACY JACKUPS
Adjusted revenues (1)
$
20.4
$
13.6
$
18.1
$
19.2
$
20.3
Adjusted operating expense (2)
10.1
11.6
10.3
9.9
8.4
Rig operating margin
10.3
2.0
7.8
9.3
11.9
Rig operating margin %
50
%
15
%
43
%
48
%
59
%
Depreciation
1.6
1.0
0.9
1.0
1.0
Other operating income (expense) (3)
(0.4
)
—
(0.1
)
(0.3
)
(0.2
)
Operating income (4)
$
8.3
$
1.0
$
6.8
$
8.0
$
10.7
Adjusted EBITDA (5)
$
10.2
$
2.1
$
7.9
$
8.9
$
11.8
Reactivation costs (6)
—
—
—
—
—
Adjusted EBITDAR
$
10.2
$
2.1
$
7.9
$
8.9
$
11.8
Preservation and stacking costs (6)
$
0.1
$
0.1
$
(0.1
)
$
—
$
0.3
Number of Rigs (at quarter end) (7)
Total Fleet
3
3
3
3
4
Active Fleet
3
3
3
3
3
Operating Days
273
184
245
270
276
Utilization - Active Fleet
99
%
67
%
90
%
100
%
84
%
Average Day Rate
$
74,000
$
74,000
$
74,000
$
71,000
$
73,000
(1)
Revenues exclusive of amortization and
reimbursable items. Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
period presentation.
(2)
Operating expense exclusive of
depreciation, amortization, reimbursable items, bad debt expense
and onshore support costs.
(3)
Other operating income (expense) includes
reimbursable revenue and expense, amortized revenue and expense,
bad debt expense and other miscellaneous items.
(4)
Starting from the second quarter 2022, we
adjusted the operating income to exclude support costs. Prior
periods were adjusted to conform with the current period
presentation.
(5)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
(6)
Included in adjusted operating
expense.
(7)
Jackup rigs leased to ARO are not included
in the number of rigs at quarter end.
ARO DRILLING
CONDENSED BALANCE SHEET
INFORMATION
(In millions)
As of
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Cash
$
176.2
$
173.5
$
293.3
$
240.2
$
270.8
Other current assets
140.6
145.6
106.3
179.5
135.0
Non-current assets
818.1
800.9
777.5
775.8
775.8
Total assets
$
1,134.9
$
1,120.0
$
1,177.1
$
1,195.5
$
1,181.6
Current liabilities
$
86.3
$
87.3
$
63.7
$
92.9
$
79.9
Non-current liabilities
884.6
879.5
958.7
957.9
956.7
Total liabilities
$
970.9
$
966.8
$
1,022.4
$
1,050.8
$
1,036.6
Shareholders' equity
$
164.0
$
153.2
$
154.7
$
144.7
$
145.0
Total liabilities and shareholders'
equity
$
1,134.9
$
1,120.0
$
1,177.1
$
1,195.5
$
1,181.6
ARO DRILLING
CONDENSED INCOME STATEMENT
INFORMATION
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Revenues
$
120.4
$
111.4
$
116.4
$
111.3
$
105.4
Operating expenses
Contract drilling (exclusive of
depreciation)
85.5
90.0
82.1
84.2
88.9
Depreciation
16.1
15.4
15.4
16.5
17.7
General and administrative
5.6
4.7
3.2
5.2
5.1
Operating income (loss)
$
13.2
$
1.3
$
15.7
$
5.4
$
(6.3
)
Other expense, net
1.8
2.7
3.3
3.3
2.4
Provision (benefit) for income taxes
0.7
(0.1
)
2.5
0.7
1.3
Net income (loss)
$
10.7
$
(1.3
)
$
9.9
$
1.4
$
(10.0
)
EBITDA
$
29.3
$
16.7
$
31.1
$
21.9
$
11.4
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)
February 21,
2023
October 31,
2022
July 28,
2022
May 2,
2022
February 21,
2022
CONTRACT BACKLOG (1)
Owned Rigs
$
794.3
$
870.7
$
934.9
$
993.6
$
1,040.9
Leased Rigs
937.5
473.3
524.3
496.9
460.2
Total
$
1,731.8
$
1,344.0
$
1,459.2
$
1,490.5
$
1,501.1
(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
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
AVERAGE DAY RATES (1)
Owned Rigs
$
95,000
$
96,000
$
94,000
$
99,000
$
101,000
Leased Rigs (2)
91,000
91,000
91,000
93,000
94,000
Total
$
93,000
$
93,000
$
92,000
$
96,000
$
97,000
UTILIZATION (3)
Owned Rigs
96
%
86
%
97
%
91
%
80
%
Leased Rigs (2)
91
%
92
%
96
%
91
%
89
%
Total
93
%
89
%
96
%
91
%
84
%
REVENUE EFFICIENCY (4)
Owned Rigs
97
%
98
%
97
%
97
%
96
%
Leased Rigs (2)
93
%
96
%
97
%
96
%
91
%
Total
95
%
97
%
97
%
96
%
94
%
NUMBER OF RIGS (AT QUARTER END)
(5)
Owned Rigs
7
7
7
7
7
Leased Rigs (2)
8
8
7
8
7
Total
15
15
14
15
14
AVAILABLE DAYS (6)
Owned Rigs
644
644
637
630
644
Leased Rigs (2)
736
696
671
646
644
Total
1,380
1,340
1,308
1,276
1,288
OPERATING DAYS (7)
Owned Rigs
618
553
619
572
513
Leased Rigs (2)
672
640
642
588
570
Total
1,290
1,193
1,261
1,160
1,083
(1)
Average day rates are derived by dividing
contract drilling revenues, adjusted to exclude certain types of
non-recurring reimbursable revenues, lump-sum revenues, revenues
earned during suspension periods and revenues attributable to
amortization of drilling contract intangibles, by the aggregate
number of contract days, adjusted to exclude contract days
associated with certain suspension periods, mobilizations,
demobilizations and shipyard contracts.
(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. While the shipyard contract contemplated
delivery of these newbuild rigs in 2022, we expect delivery of
these rigs to be delayed into 2023.
(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,
reorganization items, net, other (income) expense, depreciation
expense, amortization, net, loss on impairment, equity in earnings
of ARO, and merger transaction and integration costs. Adjusted
EBITDA is a non-GAAP measure that our management uses to facilitate
period-to-period comparisons of our core operating performance and
to evaluate our long-term financial performance against that of our
peers. We believe that this measure is useful to investors and
analysts in allowing for greater transparency of our core operating
performance and makes it easier to compare our results with those
of other companies within our industry. Adjusted EBITDA should not
be considered (a) in isolation of, or as a substitute for, net
income (loss), (b) as an indication of cash flows from operating
activities, or (c) as a measure of liquidity. Adjusted EBITDA may
not be comparable to other similarly titled measures reported by
other companies.
Valaris defines "Adjusted EBITDAR" as Adjusted EBITDA before
reactivation costs. Adjusted EBITDAR is a non-GAAP measure that our
management uses to assess the performance of our fleet excluding
one-time rig reactivation costs. We believe that this measure is
useful to investors and analysts in allowing for greater
transparency of our core operating performance. Adjusted EBITDAR
should not be considered (a) in isolation of, or as a substitute
for, net income (loss), (b) as an indication of cash flows from
operating activities, or (c) as a measure of liquidity. Adjusted
EBITDAR may not be comparable to other similarly titled measures
reported by other companies.
Valaris defines ARO "EBITDA" as net income before income tax
expense, other expense, net and depreciation expense. EBITDA is a
non-GAAP measure that our management uses to facilitate
period-to-period comparisons of ARO's core operating performance
and to evaluate ARO's long-term financial performance against that
of ARO's peers. We believe that this measure is useful to investors
and analysts in allowing for greater transparency of ARO's core
operating performance and makes it easier to compare ARO's results
with those of other companies within ARO's industry. EBITDA should
not be considered (a) in isolation of, or as a substitute for, net
income (loss), (b) as an indication of cash flows from operating
activities, or (c) as a measure of liquidity. EBITDA may not be
comparable to other similarly titled measures reported by other
companies.
The Company is not able to provide a reconciliation of the
Company's forward-looking Adjusted EBITDA, as discussed on its
fourth quarter 2022 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 Loss to Adjusted
EBITDA A reconciliation of net loss as reported to Adjusted
EBITDA is included in the tables below (in millions):
Three Months Ended
December 31,
2022
September 30,
2022
VALARIS
Net income
$
31.1
$
77.7
Add (subtract):
Income tax expense
9.8
13.8
Interest expense
10.5
11.7
Reorganization items
0.3
0.4
Other income
(10.6
)
(42.0
)
Operating income
41.1
61.6
Add (subtract):
Depreciation expense
23.8
22.6
Amortization, net (1)
(2.0
)
(5.4
)
Merger transaction and integration
costs
—
0.1
Equity in earnings of ARO
(8.6
)
(2.9
)
Adjusted EBITDA
$
54.3
$
76.0
(1)
Amortization, net, includes amortization
during the indicated period for deferred mobilization revenues and
costs, deferred capital upgrade revenues, deferred certification
costs, intangible amortization and other amortization.
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ARO
Net income (loss)
$
10.7
$
(1.3
)
$
9.9
$
1.4
$
(10.0
)
Add (subtract):
Income tax expense (benefit)
0.7
(0.1
)
2.5
0.7
1.3
Other expense, net
1.8
2.7
3.3
3.3
2.4
Operating income (loss)
$
13.2
$
1.3
$
15.7
$
5.4
$
(6.3
)
Add:
Depreciation expense
16.1
15.4
15.4
16.5
17.7
EBITDA
$
29.3
$
16.7
$
31.1
$
21.9
$
11.4
Reconciliation of Net Income (Loss) to
Adjusted EBITDA and Adjusted EBITDAR
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
FLOATERS
Net income
$
26.6
$
28.6
Subtract:
Other income
(1.1
)
—
Operating income
$
25.5
$
28.6
Add:
Depreciation and amortization, net
11.8
12.1
Other
0.2
—
Adjusted EBITDA
$
37.5
$
40.7
Add:
Reactivation costs
20.6
17.8
Adjusted EBITDAR
$
58.1
$
58.5
JACKUPS
Net income
$
46.4
$
59.1
Add (subtract):
Other (income) expense
(3.7
)
0.1
Operating income
$
42.7
$
59.2
Add (subtract):
Depreciation and amortization, net
8.6
3.9
Other
(0.2
)
(0.5
)
Adjusted EBITDA
$
51.1
$
62.6
Add:
Reactivation costs
0.1
—
Adjusted EBITDAR
$
51.2
$
62.6
OTHER
Net income
$
21.2
$
20.7
Add (subtract):
Other income
—
(0.1
)
Operating income
$
21.2
$
20.6
Add (subtract):
Depreciation and amortization, net
1.4
1.4
Other
(0.2
)
0.1
Adjusted EBITDA
$
22.4
$
22.1
Adjusted EBITDAR
$
22.4
$
22.1
Reconciliation of Net Income (Loss) to
Adjusted EBITDAR
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ACTIVE FLEET (1)
Net income (loss) (3)
$
79.9
$
98.8
$
67.3
$
(13.2
)
$
26.0
Add (subtract):
Other (income) expense
$
(0.9
)
$
—
$
0.1
$
(0.3
)
$
(3.5
)
Operating income (loss) (3)
$
79.0
$
98.8
$
67.4
$
(13.5
)
$
22.5
Add (subtract):
Reactivation costs
20.7
17.8
24.3
61.5
37.1
Depreciation and amortization, net
17.9
13.2
14.8
18.9
19.0
Other
(0.1
)
(0.2
)
(7.8
)
(0.4
)
1.0
Adjusted EBITDAR (2)
$
117.5
$
129.6
$
98.7
$
66.5
$
79.6
LEASED AND MANAGED RIGS
Net income (3)
$
21.2
$
20.7
$
13.4
$
21.6
$
16.2
Subtract:
Other income
$
—
$
(0.1
)
$
—
$
—
$
—
Operating income (3)
$
21.2
$
20.6
$
13.4
$
21.6
$
16.2
Add (subtract):
Depreciation and amortization, net
1.4
1.4
1.3
1.2
1.2
Other
(0.2
)
0.1
0.2
(0.2
)
—
Adjusted EBITDAR (2)
$
22.4
$
22.1
$
14.9
$
22.6
$
17.4
STACKED FLEET
Net income (loss)
$
(6.9
)
$
(11.1
)
$
78.9
$
(12.1
)
$
1.4
Add (subtract):
Other (income) expense
$
(3.9
)
$
0.1
$
(135.4
)
$
(2.1
)
$
(16.7
)
Operating loss (3)
$
(10.8
)
$
(11.0
)
$
(56.5
)
$
(14.2
)
$
(15.3
)
Add (subtract):
Depreciation and amortization, net
2.6
2.6
3.1
3.4
3.9
Loss on impairment
—
—
34.5
—
—
Other
—
(0.1
)
7.6
0.1
0.5
Adjusted EBITDAR (2)
$
(8.2
)
$
(8.5
)
$
(11.3
)
$
(10.7
)
$
(10.9
)
TOTAL FLEET
Net income (loss)
$
94.2
$
108.4
$
159.6
$
(3.7
)
$
43.6
Subtract
Other income
$
(4.8
)
$
—
$
(135.3
)
$
(2.4
)
$
(20.0
)
Operating income (loss) (3)
$
89.4
$
108.4
$
24.3
$
(6.1
)
$
23.4
Add (subtract):
Reactivation costs
20.7
17.8
24.3
61.5
37.1
Depreciation and amortization, net
21.8
17.2
19.2
23.5
24.0
Loss on impairment
—
—
34.5
—
—
Other
(0.2
)
(0.2
)
—
(0.5
)
1.5
Adjusted EBITDAR (2)
$
131.7
$
143.2
$
102.3
$
78.4
$
86.0
(1)
Active fleet represents rigs that are not
preservation stacked, including rigs that are in the process of
being reactivated.
(2)
Adjusted EBITDAR for active fleet, leased
and managed rigs and stacked fleet excludes onshore support costs
and general and administrative expense.
(3)
Starting from the second quarter 2022, we
adjusted operating income (loss) to exclude onshore support costs.
Prior periods were adjusted to conform with the current period
presentation.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Net Income (Loss) to Adjusted EBITDA
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
DRILLSHIPS
Operating revenues
$
151.9
$
139.8
$
149.0
$
85.4
$
73.5
Subtract:
Reimbursable revenues (1)
(6.8
)
(8.5
)
(15.4
)
(6.9
)
(5.2
)
Amortized revenues
(10.7
)
(11.2
)
(5.5
)
(5.4
)
(5.0
)
Adjusted revenues
$
134.4
$
120.1
$
128.1
$
73.1
$
63.3
Operating expenses (2)
$
145.4
$
137.5
$
174.0
$
117.2
$
91.4
Add (subtract):
Depreciation and amortization
(21.3
)
(22.3
)
(17.0
)
(15.8
)
(15.7
)
Loss on impairment
—
—
(34.5
)
—
—
Reimbursable expenses
(6.9
)
(8.3
)
(15.5
)
(7.7
)
(5.8
)
Other
0.9
(0.5
)
(0.3
)
0.3
(0.7
)
Adjusted operating expenses
$
118.1
$
106.4
$
106.7
$
94.0
$
69.2
Net income (loss)
$
7.3
$
2.4
$
(25.2
)
$
(31.7
)
$
(18.3
)
Add (subtract):
Other (income) expense
$
(0.9
)
$
—
$
0.1
$
—
$
0.4
Operating income (loss) (2)
$
6.4
$
2.4
$
(25.1
)
$
(31.7
)
$
(17.9
)
Add (subtract):
Depreciation and amortization, net
10.6
11.1
11.5
10.4
10.7
Loss on impairment
—
—
34.5
—
—
Other
0.1
—
0.1
(0.1
)
0.6
Adjusted EBITDA (3)
$
17.1
$
13.5
$
21.0
$
(21.4
)
$
(6.6
)
(1)
Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
presentation.
(2)
Starting from the second quarter 2022, we
adjusted operating expenses and operating income (loss) to exclude
onshore support costs. Prior periods were adjusted to conform with
the current period presentation.
(3)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Net Income (Loss) to Adjusted EBITDA
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
SEMISUBMERSIBLES
Operating revenues
$
59.1
$
61.9
$
39.1
$
14.3
$
27.0
Subtract:
Reimbursable revenues (1)
(0.8
)
(1.2
)
(2.0
)
(6.2
)
(2.3
)
Amortized revenues
(4.3
)
(2.4
)
(0.8
)
—
(0.7
)
Adjusted revenues
$
54.0
$
58.3
$
36.3
$
8.1
$
24.0
Operating expenses (2)
$
40.1
$
35.6
$
38.1
$
42.6
$
34.0
Add (subtract):
Depreciation and amortization
(5.6
)
(3.4
)
(1.8
)
(1.0
)
(1.2
)
Reimbursable expenses
(0.9
)
(1.2
)
(2.1
)
(7.3
)
(4.9
)
Other
(0.1
)
—
(0.2
)
0.2
0.3
Adjusted operating expenses
$
33.5
$
31.0
$
34.0
$
34.5
$
28.2
Net income (loss)
$
19.3
$
26.2
$
1.1
$
(28.3
)
$
(6.9
)
Subtract:
Other income
$
(0.2
)
$
—
$
(0.1
)
$
—
$
—
Operating income (loss) (2)
$
19.1
$
26.2
$
1.0
$
(28.3
)
$
(6.9
)
Add:
Depreciation and amortization, net
1.2
1.0
1.0
1.0
0.5
Other
0.1
—
0.1
—
0.1
Adjusted EBITDA (3)
$
20.4
$
27.2
$
2.1
$
(27.3
)
$
(6.3
)
(1)
Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
presentation.
(2)
Starting from the second quarter 2022, we
adjusted operating expenses and operating income (loss) to exclude
onshore support costs. Prior periods were adjusted to conform with
the current period presentation.
(3)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Net Income (Loss) to Adjusted EBITDA
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
HD ULTRA-HARSH & HARSH
JACKUPS
Operating revenues
$
98.5
$
123.0
$
106.1
$
92.9
$
94.0
Subtract:
Reimbursable revenues (1)
(2.8
)
(3.5
)
(3.7
)
(6.6
)
(8.6
)
Amortized revenues
(8.6
)
(13.0
)
(8.8
)
(5.2
)
(1.7
)
Adjusted revenues
$
87.1
$
106.5
$
93.6
$
81.1
$
83.7
Operating expenses (2)
$
72.8
$
71.2
$
76.3
$
75.4
$
80.4
Add (subtract):
Depreciation and amortization
(10.9
)
(11.9
)
(9.5
)
(8.1
)
(8.9
)
Reimbursable expenses
(2.8
)
(3.1
)
(3.3
)
(9.2
)
(10.1
)
Other
0.2
—
(0.1
)
—
—
Adjusted operating expenses
$
59.3
$
56.2
$
63.4
$
58.1
$
61.4
Net income
$
29.3
$
51.7
$
29.8
$
17.7
$
13.4
Add (subtract):
Other (income) expense
$
(3.5
)
$
0.1
$
—
$
(0.1
)
$
0.2
Operating income (2)
$
25.8
$
51.8
$
29.8
$
17.6
$
13.6
Add (subtract):
Depreciation and amortization, net
2.3
(1.0
)
0.7
2.9
7.2
Other
(0.1
)
(0.3
)
—
(0.1
)
0.2
Adjusted EBITDA (3)
$
28.0
$
50.5
$
30.5
$
20.4
$
21.0
(1)
Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
presentation.
(2)
Starting from the second quarter 2022, we
adjusted operating expenses and operating income to exclude onshore
support costs. Prior periods were adjusted to conform with the
current period presentation.
(3)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Net Income (Loss) to Adjusted EBITDA
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
HD & SD MODERN JACKUPS
Operating revenues
$
62.5
$
59.0
$
61.1
$
67.8
$
56.2
Add (subtract):
Reimbursable revenues (1)
(2.2
)
(2.0
)
(1.9
)
(3.1
)
(1.4
)
Amortized revenues
(1.2
)
0.7
0.6
0.8
(0.6
)
Adjusted revenues
$
59.1
$
57.7
$
59.8
$
65.5
$
54.2
Operating expenses (2)
$
53.7
$
52.6
$
62.8
$
60.9
$
48.4
Add (subtract):
Depreciation and amortization
(5.5
)
(3.1
)
(3.1
)
(6.0
)
(4.3
)
Reimbursable expenses
(2.3
)
(2.0
)
(1.9
)
(7.5
)
(3.2
)
Other
—
0.1
0.1
0.2
(0.3
)
Adjusted operating expenses
$
45.9
$
47.6
$
57.9
$
47.6
$
40.6
Net income
$
8.8
$
6.5
$
118.3
$
7.1
$
20.9
Subtract:
Other income
$
(0.1
)
$
(0.1
)
$
(120.1
)
$
(0.1
)
$
(13.1
)
Operating income (loss) (2)
$
8.7
$
6.4
$
(1.8
)
$
7.0
$
7.8
Add (subtract):
Depreciation and amortization, net
4.3
3.8
3.7
6.8
3.7
Other
(0.1
)
(0.2
)
(0.3
)
(0.1
)
0.1
Adjusted EBITDA (3)
$
12.9
$
10.0
$
1.6
$
13.7
$
11.6
(1)
Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
presentation.
(2)
Starting from the second quarter 2022, we
adjusted operating expenses and operating income (loss) to exclude
onshore support costs. Prior periods were adjusted to conform with
the current period presentation.
(3)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Net Income (Loss) to Adjusted EBITDA
(In millions)
Three Months Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
SD LEGACY JACKUPS
Operating revenues
$
20.8
$
13.9
$
18.6
$
19.9
$
22.1
Subtract:
Reimbursable revenues (1)
(0.4
)
(0.3
)
(0.5
)
(0.7
)
(1.8
)
Adjusted revenues
$
20.4
$
13.6
$
18.1
$
19.2
$
20.3
Operating expenses (2)
$
12.6
$
12.9
$
11.8
$
12.0
$
11.4
Add (subtract):
Depreciation and amortization
(2.0
)
(1.1
)
(1.0
)
(1.0
)
(1.0
)
Reimbursable expenses
(0.5
)
(0.2
)
(0.5
)
(1.1
)
(2.1
)
Other
—
—
—
—
0.1
Adjusted operating expenses
$
10.1
$
11.6
$
10.3
$
9.9
$
8.4
Net income
$
8.3
$
0.9
$
22.2
$
10.0
$
18.4
Add (subtract):
Other (income) expense
$
(0.1
)
$
0.1
$
(15.4
)
$
(2.0
)
$
(7.7
)
Operating income (2)
$
8.2
$
1.0
$
6.8
$
8.0
$
10.7
Add (subtract):
Depreciation and amortization, net
2.0
1.1
1.0
1.0
1.0
Other
—
—
0.1
(0.1
)
0.1
Adjusted EBITDA (3)
$
10.2
$
2.1
$
7.9
$
8.9
$
11.8
(1)
Starting from the first quarter 2022, we
adjusted reimbursable revenues to exclude recurring reimbursable
revenues. Prior periods were adjusted to conform with the current
presentation.
(2)
Starting from the second quarter 2022, we
adjusted operating expenses and operating income to exclude onshore
support costs. Prior periods were adjusted to conform with the
current period presentation.
(3)
Adjusted EBITDA for asset category
excludes onshore support costs and general and administrative
expense.
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