Continued Strong Operational Performance – 97%
Revenue Efficiency in 2Q 2022 Four Floater Reactivation Projects
Completed in Advance of Multi-Year Contracts Approximately $560
Million of Contract Backlog Added Stacked Drillship VALARIS DS-17
Awarded 540-Day Contract Offshore Brazil Jackup VALARIS 115 Awarded
Four-Year Contract Offshore Brunei
Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today
reported second quarter 2022 results.
President and Chief Executive Officer Anton Dibowitz said, “I
would like to thank the Valaris team for their continued focus on
delivering the safe, reliable and efficient operations that our
customers have come to expect from us, in particular the
achievement of 97% revenue efficiency during the second quarter and
98% through the first half of the year, a period in which several
rigs have commenced new contracts following reactivations or
shipyard projects.”
Dibowitz commented, “I am extremely proud of the entire Valaris
team for having now successfully executed reactivation projects on
four of our preservation stacked floaters after having secured
contracts for these rigs in 2021. Last year, we set out to build
our contract backlog by reactivating some of our high quality
stacked fleet for long-term contracts, and these rigs which are now
all on contract are expected to generate a combined annualized
EBITDA of more than $100 million.”
Dibowitz added, “The fundamental outlook for our industry
remains constructive, with spot Brent crude prices above $100 per
barrel for most of the past five months and two-year and five-year
forward prices above $80 per barrel and $70 per barrel,
respectively. As a result, we continue to see an increase in both
contracting and tendering activity across both floater and jackup
markets.”
Dibowitz concluded, “Since reporting our first quarter 2022
results, we have been awarded new contracts and extensions with
associated contract backlog of approximately $560 million, with
several new contracts awarded at leading-edge rates for their
respective markets. We are particularly pleased to have secured yet
another contract for one of our preservation stacked drillships,
VALARIS DS-17, and we look forward to partnering with Equinor on
their flagship Bacalhau project in Brazil. We expect Brazil to be a
significant growth market for high-specification floaters over the
next several years and we are well-positioned to benefit by now
adding a third rig to this strategic basin. We were also awarded a
four-year contract with Brunei Shell Petroleum in Southeast Asia
for jackup VALARIS 115. This represents the largest backlog award
for a benign environment jackup outside of the Middle East this
year and provides further evidence of the improving market for
modern benign environment jackups.”
Second Quarter Review
Net income was $113 million in the second quarter 2022 compared
to a net loss of $40 million in the first quarter 2022. Adjusted
EBITDA increased to $29 million in the second quarter from negative
$31 million in the first quarter. Adjusted EBITDAR increased to $54
million in the second quarter from $31 million in the first
quarter.
Revenues increased to $413 million in the second quarter 2022
from $318 million in the first quarter 2022. Excluding reimbursable
items, revenues increased to $385 million in the second quarter
from $291 million in the first quarter. The increase was primarily
due to a $51 million fee related to the termination of a contract
for drillship VALARIS DS-11, as well as higher utilization and
average day rates for both the floater and jackup fleets.
Contract drilling expense increased to $362 million in the
second quarter 2022 from $331 million in the first quarter 2022.
Excluding reimbursable items, contract drilling expense increased
to $334 million in the second quarter from $305 million in the
first quarter, primarily due to more operating days for the floater
fleet, increased costs of certain claims and costs associated with
the VALARIS DS-11 contract termination. This was partially offset
by lower reactivation costs, which decreased to $24 million in the
second quarter from $61 million in the first quarter as reactivated
rigs returned to work.
Loss on impairment of $35 million in the second quarter 2022
related to the termination of a contract for VALARIS DS-11. Costs
incurred for capital upgrades specific to the customer requirements
resulted in a pre-tax, non-cash loss on impairment during the
quarter. There was no loss on impairment in the first quarter
2022.
Depreciation expense decreased to $22 million in the second
quarter 2022 from $23 million in the first quarter 2022. General
and administrative expense of $19 million in the second quarter
2022 was in line with the first quarter 2022.
Other income increased to $149 million in the second quarter
2022 from $9 million in the first quarter 2022. Second quarter
other income included a gain on sale of assets of $135 million
primarily related to the sale of jackups VALARIS 113, 114 and 36 as
well as additional proceeds received in the current quarter on the
sale of a rig in a prior year, compared to a $2 million gain on
sale of assets related to the sale of jackup VALARIS 67 in the
first quarter.
Tax expense was $20 million in the second quarter 2022 compared
to a tax benefit of $1 million in the first quarter 2022. The
second quarter tax provision included $6 million of discrete tax
expense primarily attributable to income associated with a contract
termination. The first quarter tax provision included $15 million
of discrete tax benefit primarily related to a reduction in
liabilities for unrecognized tax benefits associated with tax
positions taken in prior years. Adjusted for discrete items, tax
expense of $14 million in the second quarter was in line with the
first quarter.
Cash and cash equivalents and restricted cash decreased to $577
million as of June 30, 2022, from $608 million as of March 31,
2022. Net working capital increased due to a ramp up in operating
activities as rigs returned to work following reactivation and
special survey projects and the $51 million DS-11 termination fee
that was subsequently collected in July. In addition to the
increase in net working capital, we incurred $61 million of capital
expenditures. These were partially offset by $145 million of net
proceeds from the sale of assets, primarily related to jackups
VALARIS 113 and 114.
Segment Review
Floaters
Floater revenues increased to $188 million in the second quarter
2022 from $100 million in the first quarter 2022. Excluding
reimbursable items, revenues increased to $171 million in the
second quarter from $87 million in the first quarter. The increase
was primarily due to a $51 million termination fee related to the
termination of a contract for VALARIS DS-11, as well as the impact
of VALARIS DPS-1 and DS-16 returning to work following reactivation
projects and VALARIS DPS-5 returning to work following a special
periodic survey. This was partially offset by idle time between
contracts for VALARIS MS-1 and mobilization time between contracts
for VALARIS DS-12.
Contract drilling expense increased to $165 million in the
second quarter 2022 from $148 million in the first quarter 2022.
Excluding reimbursable items, contract drilling expense increased
to $148 million in the second quarter from $135 million in the
first quarter primarily due to higher activity levels, increased
costs of certain claims and costs associated with the VALARIS DS-11
contract termination. These were partially offset by lower
reactivation costs, which declined to $24 million in the second
quarter from $61 million in the first quarter.
Jackups
Jackup revenues increased to $186 million in the second quarter
2022 from $181 million in the first quarter 2022. Excluding
reimbursable items, revenues increased to $180 million in the
second quarter from $170 million in the first quarter primarily due
to more operating days for VALARIS 249, which commenced a contract
offshore New Zealand during the first quarter. This was partially
offset by VALARIS 141 rolling off contract in April prior to
commencement of a three-year bareboat charter agreement with ARO
that is expected to begin in August.
Contract drilling expense increased to $142 million in the
second quarter 2022 from $139 million in the first quarter 2022.
Excluding reimbursable items, contract drilling expense increased
to $136 million in the second quarter from $129 million in the
first quarter primarily due to higher repair and maintenance costs
largely related to leg repairs on VALARIS 107.
ARO Drilling
Revenues increased to $116 million in the second quarter 2022
from $111 million in the first quarter 2022 primarily due to a full
quarter of operations for VALARIS 140, which was added to the
leased fleet late in the first quarter. This was partially offset
by VALARIS 36 completing its contract in May before returning to
Valaris and being sold. Contract drilling expense decreased to $82
million in the second quarter from $84 million in the first
quarter. Operating income was $16 million in the second quarter
compared to $5 million in the first quarter. EBITDA was $31 million
in the second quarter compared to $22 million in the first
quarter.
Other
Revenues increased marginally to $39 million in the second
quarter 2022 from $38 million in the first quarter 2022. Contract
drilling expense increased to $25 million in the second quarter
from $16 million in the first quarter primarily due to increased
costs of certain claims. Operating income was $13 million in the
second quarter compared to $22 million in the first quarter. EBITDA
was $15 million in the second quarter compared to $23 million in
the first quarter.
Second Quarter
Floaters
Jackups
ARO
Other
Reconciling Items
Consolidated Total
(in millions of $, except %)
Q2 2022
Q1 2022
Chg
Q2 2022
Q1 2022
Chg
Q2 2022
Q1 2022
Chg
Q2 2022
Q1 2022
Chg
Q2 2022
Q1 2022
Q2 2022
Q1 2022
Chg
Revenues
188.1
99.7
89
%
185.8
180.7
3
%
116.4
111.3
5
%
39.4
38.0
4
%
(116.4
)
(111.3
)
413.3
318.4
30
%
Operating expenses
Contract drilling
165.3
147.6
12
%
142.2
139.2
2
%
82.1
84.2
(2
)%
24.7
15.5
59
%
(52.5
)
(55.2
)
361.8
331.3
9
%
Loss on Impairment
34.5
—
nm
—
—
—
—
—
—
%
—
—
—
%
—
—
34.5
—
nm
Depreciation
12.3
12.2
1
%
8.7
9.1
(4
)%
15.4
16.5
(7
)%
1.3
0.9
44
%
(15.4
)
(16.2
)
22.3
22.5
(1
)%
General and admin.
—
—
—
%
—
—
—
%
3.2
5.2
(38
)%
—
—
—
%
15.8
13.6
19.0
18.8
1
%
Equity in earnings of ARO
—
—
—
%
—
—
—
%
—
—
—
%
—
—
—
%
8.7
4.3
8.7
4.3
102
%
Operating income (loss)
(24.0
)
(60.1
)
(60
)%
34.9
32.4
8
%
15.7
5.4
191
%
13.4
21.6
(38
)%
(55.6
)
(49.2
)
(15.6
)
(49.9
)
(69
)%
Net income (loss)
(24.1
)
(60.0
)
(60
)%
170.3
34.7
391
%
9.9
1.4
607
%
13.4
21.6
(38
)%
(56.7
)
(37.5
)
112.8
(39.8
)
nm
Adjusted EBITDA
23.1
(48.7
)
nm
40.0
43.0
(7
)%
31.1
21.9
42
%
14.9
22.6
(34
)%
(79.8
)
(69.7
)
29.3
(30.9
)
nm
Adjusted EBITDAR
47.2
12.2
287
%
40.2
43.6
(8
)%
31.1
21.9
42
%
14.9
22.6
(34
)%
(79.8
)
(69.7
)
53.6
30.6
75
%
Fresh Start Accounting
Valaris emerged from Chapter 11 bankruptcy protection on April
30, 2021 (the "Effective Date"). Upon emergence, Valaris applied
fresh start accounting which resulted in Valaris becoming a new
reporting entity for accounting and financial reporting.
Accordingly, our financial statements and notes after the Effective
Date are not comparable to our financial statements and notes prior
to that date. As required by GAAP, results for the second quarter
must be presented separately for the predecessor period from April
1, 2021, through April 30, 2021 (the "Predecessor" period) and the
successor period from May 1, 2021, through June 30, 2021 (the
"Successor" period). However, the Company has combined certain
results of the Predecessor and Successor periods ("Combined"
results) as non-GAAP measures to compare the combined second
quarter with other quarters since we believe it provides the most
meaningful basis to analyze our results. The Predecessor and
Successor results for the second quarter are more fully discussed
in our quarterly report on Form 10-Q for the period ended June 30,
2021 filed with the SEC on August 3, 2021.
As previously announced, Valaris will hold its second quarter
2022 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on
Tuesday, August 2, 2022. 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, rig commitments and availability,
cash flows, contract status, terms and duration, contract backlog,
capital expenditures, insurance, financing and funding; the effect,
impact, potential duration and other implications of the COVID-19
pandemic; impact of our emergence from bankruptcy; 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 and contracts; letters of intent; scheduled
delivery dates for rigs; performance of our joint venture with
Saudi Aramco; the timing of delivery, mobilization, contract
commencement, availability, relocation or other movement of rigs;
future rig reactivations; expected 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); 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 the COVID-19 outbreak
and global pandemic and the related public health measures
implemented by governments worldwide, which may, among other
things, impact our ability to staff rigs and rotate crews;
cancellation, suspension, renegotiation or termination of drilling
contracts and programs, including drilling contracts which grant
the customer termination right if FID is not received with respect
to projects for which the drilling rig is contracted; potential
additional asset impairments; failure to satisfy our debt
obligations; 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; the
effects of our emergence from bankruptcy on the Company's business,
relationships, comparability of our financial results and ability
to access financing sources; actions by regulatory authorities, or
other third parties; actions by our security holders; commodity
price fluctuations and volatility, customer demand, new rig supply,
downtime and other risks associated with offshore rig operations;
severe weather or hurricanes; changes in worldwide rig supply and
demand, competition and technology; consumer preferences for
alternative fuels; increased scrutiny of our Environmental, Social
and Governance practices and reporting responsibilities; changes in
customer strategy; 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, 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; debt restrictions that may limit our
liquidity and flexibility; and cybersecurity risks and threats. 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 SUBSIDIARIESCONSOLIDATED STATEMENTS
OF OPERATIONS(In millions, except per share amounts)
Three Months Ended
Successor
Combined (Non-GAAP) (1)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
OPERATING REVENUES
$
413.3
$
318.4
$
305.5
$
326.7
$
293.1
OPERATING EXPENSES
Contract drilling (exclusive of
depreciation)
361.8
331.3
285.5
274.6
258.8
Loss on impairment
34.5
—
—
—
—
Depreciation
22.3
22.5
25.1
24.4
54.1
General and administrative
19.0
18.8
18.3
27.2
19.1
Total operating expenses
437.6
372.6
328.9
326.2
332.0
EQUITY IN EARNINGS (LOSSES) OF ARO
8.7
4.3
(1.3
)
2.6
6.0
OPERATING INCOME (LOSS)
(15.6
)
(49.9
)
(24.7
)
3.1
(32.9
)
OTHER INCOME (EXPENSE)
Interest income
11.2
10.9
11.0
9.7
8.8
Interest expense, net (Unrecognized
contractual interest expense for debt subject to compromise was
$32.6 million for the three months ended June 30, 2021)
(11.6
)
(11.5
)
(11.7
)
(11.3
)
(9.1
)
Reorganization items, net
(0.7
)
(1.0
)
(4.9
)
(6.5
)
(3,536.5
)
Other, net
149.7
11.0
27.0
5.5
9.0
148.6
9.4
21.4
(2.6
)
(3,527.8
)
INCOME (LOSS) BEFORE INCOME TAXES
133.0
(40.5
)
(3.3
)
0.5
(3,560.7
)
PROVISION (BENEFIT) FOR INCOME TAXES
20.2
(0.7
)
(31.0
)
53.3
(0.4
)
NET INCOME (LOSS)
112.8
(39.8
)
27.7
(52.8
)
(3,560.3
)
NET (INCOME) LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(1.2
)
1.2
—
(1.7
)
(2.9
)
NET INCOME (LOSS) ATTRIBUTABLE TO
VALARIS
$
111.6
$
(38.6
)
$
27.7
$
(54.5
)
$
(3,563.2
)
INCOME (LOSS) PER SHARE
Basic
$
1.49
$
(0.51
)
$
0.37
$
(0.73
)
n/m
Diluted
$
1.48
$
(0.51
)
$
0.37
$
(0.73
)
n/m
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic
75.0
75.0
75.0
75.0
n/m
Diluted
75.6
75.0
75.0
75.0
n/m
(1)
Represents the combined results of
operations for the two-months ended June 30, 2021 (Successor) and
the one-month ended April 30, 2021 (Predecessor).
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In millions)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
553.5
$
578.2
$
608.7
$
620.8
$
608.8
Restricted cash
23.8
30.0
35.9
33.9
53.1
Accounts receivable, net
544.6
439.3
444.2
455.8
436.1
Other current assets
159.0
125.7
117.8
117.0
119.7
Total current assets
$
1,280.9
$
1,173.2
$
1,206.6
$
1,227.5
$
1,217.7
PROPERTY AND EQUIPMENT, NET
931.7
930.2
890.9
892.3
897.8
LONG-TERM NOTES RECEIVABLE FROM ARO
264.5
256.8
249.1
241.3
234.3
INVESTMENT IN ARO
99.6
90.9
86.6
87.9
85.4
OTHER ASSETS
184.1
186.6
176.0
153.5
166.5
$
2,760.8
$
2,637.7
$
2,609.2
$
2,602.5
$
2,601.7
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable - trade
$
287.0
$
311.2
$
225.8
$
203.0
$
183.9
Accrued liabilities and other
260.1
212.1
196.2
223.8
212.7
Total current liabilities
$
547.1
$
523.3
$
422.0
$
426.8
$
396.6
LONG-TERM DEBT
545.7
545.5
545.3
545.1
544.8
OTHER LIABILITIES
527.6
544.8
581.1
591.3
569.8
TOTAL LIABILITIES
1,620.4
1,613.6
1,548.4
1,563.2
1,511.2
TOTAL EQUITY
1,140.4
1,024.1
1,060.8
1,039.3
1,090.5
$
2,760.8
$
2,637.7
$
2,609.2
$
2,602.5
$
2,601.7
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Successor
Predecessor
Combined
(Non-GAAP)
Six Months Ended June 30,
2022
Two Months Ended June 30,
2021
Four Months Ended April 30,
2021
Six Months Ended June 30,
2021
OPERATING ACTIVITIES
Net income (loss)
$
73.0
$
(4.1
)
$
(4,463.8
)
$
(4,467.9
)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
(Gain) loss on asset disposals
(137.6
)
0.1
(6.0
)
(5.9
)
Depreciation expense
44.8
16.6
159.6
176.2
Loss on impairment
34.5
—
756.5
756.5
Accretion of discount on shareholder
note
(15.4
)
(6.0
)
—
(6.0
)
Equity in earnings of ARO
(13.0
)
(4.8
)
(3.1
)
(7.9
)
Net periodic pension and retiree medical
income
(8.1
)
(2.4
)
(5.4
)
(7.8
)
Share-based compensation expense
6.9
—
4.8
4.8
Deferred income tax expense (benefit)
6.7
1.1
(18.2
)
(17.1
)
Amortization, net
(1.6
)
(0.3
)
(4.8
)
(5.1
)
Amortization of debt issuance cost
0.4
0.4
—
0.4
Non-cash reorganization items, net
—
—
3,487.3
3,487.3
Other
0.3
(0.2
)
7.3
7.1
Changes in operating assets and
liabilities:
(102.3
)
(25.7
)
68.5
42.8
Contributions to pension plans and other
post-retirement benefits
(2.7
)
(0.6
)
(22.5
)
(23.1
)
Net cash used in operating activities
$
(114.1
)
$
(25.9
)
$
(39.8
)
$
(65.7
)
INVESTING ACTIVITIES
Net proceeds from disposition of
assets
$
146.5
$
0.2
$
30.1
$
30.3
Additions to property and equipment
(99.6
)
(8.1
)
(8.7
)
(16.8
)
Net cash provided by (used in) investing
activities
$
46.9
$
(7.9
)
$
21.4
$
13.5
FINANCING ACTIVITIES
Issuance of first lien notes
$
—
$
—
$
520.0
$
520.0
Payment to Predecessor creditors
—
—
(129.9
)
(129.9
)
Other
(0.2
)
—
(1.4
)
(1.4
)
Net cash provided by (used in) financing
activities
$
(0.2
)
$
—
$
388.7
$
388.7
Effect of exchange rate changes on cash
and cash equivalents
$
0.1
$
(0.3
)
$
(0.1
)
$
(0.4
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
(67.3
)
$
(34.1
)
$
370.2
$
336.1
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
$
577.3
$
661.9
$
696.0
$
661.9
VALARIS LIMITED AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
Three Months Ended
Successor
Combined (Non-GAAP) (1)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
OPERATING ACTIVITIES
Net income (loss)
$
112.8
$
(39.8
)
$
27.7
$
(52.8
)
$
(3,560.3
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Gain on asset disposals
(135.1
)
(2.5
)
(21.0
)
(0.3
)
(4.5
)
Loss on impairment
34.5
—
—
—
—
Depreciation expense
22.3
22.5
25.1
24.4
54.1
Equity in losses (earnings) of ARO
(8.7
)
(4.3
)
1.3
(2.6
)
(6.0
)
Accretion of discount on shareholder
note
(7.7
)
(7.7
)
(7.9
)
(6.9
)
(6.0
)
Deferred income tax expense (benefit)
7.3
(0.6
)
(22.5
)
0.1
(18.0
)
Net periodic pension and retiree medical
income
(4.1
)
(4.0
)
(2.6
)
(3.7
)
(3.8
)
Share-based compensation expense
3.5
3.4
2.7
1.6
1.0
Amortization, net
(3.2
)
1.6
(0.5
)
3.1
(0.5
)
Amortization of debt issuance cost
0.2
0.2
0.2
(0.1
)
0.4
Non-cash reorganization items, net
—
—
—
—
3,487.3
Other
0.3
—
0.3
0.2
1.3
Changes in operating assets and
liabilities
(134.8
)
32.5
(9.0
)
45.0
21.9
Contributions to pension plans and other
post-retirement benefits
(1.9
)
(0.8
)
(1.0
)
(1.1
)
(0.9
)
Net cash provided by (used in) operating
activities
$
(114.6
)
$
0.5
$
(7.2
)
$
6.9
$
(34.0
)
INVESTING ACTIVITIES
Net proceeds from disposition of
assets
$
145.2
$
1.3
$
23.6
$
1.3
$
26.6
Additions to property and equipment
(61.1
)
(38.5
)
(26.5
)
(15.6
)
(10.8
)
Net cash provided by (used in) investing
activities
$
84.1
$
(37.2
)
$
(2.9
)
$
(14.3
)
$
15.8
FINANCING ACTIVITIES
Issuance of first lien notes
$
—
$
—
$
—
$
—
$
520.0
Payments to Predecessor creditors
—
—
—
—
(129.9
)
Other
(0.2
)
—
—
—
(1.4
)
Net cash provided by (used in) financing
activities
$
(0.2
)
$
—
$
—
$
—
$
388.7
Effect of exchange rate changes on cash
and cash equivalents
$
(0.2
)
$
0.3
$
—
$
0.2
$
(0.3
)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH
$
(30.9
)
$
(36.4
)
$
(10.1
)
$
(7.2
)
$
370.2
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
608.2
644.6
654.7
661.9
291.7
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
577.3
$
608.2
$
644.6
$
654.7
$
661.9
(1)
Represents the combined results of
operations for the two-months ended June 30, 2021 (Successor) and
the one-month ended April 30, 2021 (Predecessor).
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
Successor
Combined (Non-GAAP)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
REVENUES
Floaters
Drillships
$
149.0
$
85.4
$
73.5
$
67.5
$
42.6
Semisubmersibles
39.1
14.3
27.0
36.8
25.5
$
188.1
$
99.7
$
100.5
$
104.3
$
68.1
Jackups
(1)
HD Ultra-Harsh & Harsh Environment
$
106.1
$
92.9
$
94.0
$
102.8
$
104.9
HD & SD Modern
61.1
67.9
56.2
59.6
57.7
SD Legacy
18.6
19.9
22.1
23.9
25.7
$
185.8
$
180.7
$
172.3
$
186.3
$
188.3
Total
$
373.9
$
280.4
$
272.8
$
290.6
$
256.4
Other
Leased and Managed Rigs
$
39.4
$
38.0
$
32.7
$
36.1
$
36.7
Valaris Total
$
413.3
$
318.4
$
305.5
$
326.7
$
293.1
ARO
ARO Total
$
116.4
$
111.3
$
105.4
$
117.7
$
124.8
Valaris 50% Share (unconsolidated)
58.2
55.7
52.7
58.9
62.4
Adjusted Total (2)
$
471.5
$
374.1
$
358.2
$
385.6
$
355.5
(1)
HD = Heavy Duty; SD = Standard Duty. Heavy
duty jackups are well-suited for operations in tropical revolving
storm areas.
(2)
Adjusted total is Valaris consolidated
total plus Valaris 50% share of ARO (unconsolidated).
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
ADJUSTED EBITDAR (1)
Active Fleet (1) (2)
$
98.7
$
66.5
$
79.6
$
93.0
$
82.1
Leased and Managed Rigs (1)
14.9
22.6
17.4
22.2
22.9
$
113.6
$
89.1
$
97.0
$
115.2
$
105.0
Stacked Fleet (1) (3)
(11.3
)
(10.7
)
(11.0
)
(12.5
)
(17.1
)
$
102.3
$
78.4
$
86.0
$
102.7
$
87.9
Support
costs
General and administrative expense
$
19.0
$
18.8
$
18.3
$
27.2
$
19.1
Onshore support costs
29.7
29.0
28.0
27.1
29.1
$
48.7
$
47.8
$
46.3
$
54.3
$
48.2
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
0.2
0.9
0.9
Valaris Total
$
53.6
$
30.6
$
39.9
$
49.3
$
40.6
ARO
ARO Total
$
31.1
$
21.9
$
11.4
$
17.9
$
27.8
Valaris 50% Share (unconsolidated)
15.6
11.0
5.7
9.0
13.9
Adjusted Total (4)
$
69.2
$
41.6
$
45.6
$
58.3
$
54.5
Reactivation costs (5)
$
24.3
$
61.5
$
37.1
$
19.4
$
24.0
(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)
Adjusted total is Valaris consolidated
total plus Valaris 50% share of ARO (unconsolidated).
(5)
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
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
ADJUSTED EBITDAR (1)
Floaters
Drillships (1)
$
44.3
$
27.2
$
17.7
$
8.9
$
(2.5
)
Semisubmersibles (1)
2.9
(15.0
)
3.2
8.3
6.5
$
47.2
$
12.2
$
20.9
$
17.2
$
4.0
Jackups
HD Ultra-Harsh & Harsh (1)
$
30.7
$
21.0
$
24.3
$
38.7
$
42.3
HD & SD - Modern (1)
1.7
13.7
11.6
15.6
6.7
SD - Legacy (1)
7.8
8.9
11.8
9.0
12.0
$
40.2
$
43.6
$
47.7
$
63.3
$
61.0
Total
$
87.4
$
55.8
$
68.6
$
80.5
$
65.0
Other
Leased and Managed Rigs (1)
$
14.9
$
22.6
$
17.4
$
22.2
$
22.9
Total
$
102.3
$
78.4
$
86.0
$
102.7
$
87.9
Support
costs
General and administrative expense
$
19.0
$
18.8
$
18.3
$
27.2
$
19.1
Onshore support costs
29.7
29.0
28.0
27.1
29.1
$
48.7
$
47.8
$
46.3
$
54.3
$
48.2
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
0.2
0.9
0.9
Valaris Total
$
53.6
$
30.6
$
39.9
$
49.3
$
40.6
ARO
ARO Total
$
31.1
$
21.9
$
11.4
$
17.9
$
27.8
Valaris 50% Share (unconsolidated)
15.6
11.0
5.7
9.0
13.9
Adjusted Total (2)
$
69.2
$
41.6
$
45.6
$
58.3
$
54.5
(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.
(2)
Adjusted total is Valaris consolidated
total plus Valaris 50% share of ARO (unconsolidated).
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
ADJUSTED EBITDA (1)
Floaters
Drillships (1)
$
21.0
$
(21.4
)
$
(6.6
)
$
8.6
$
(2.5
)
Semisubmersibles (1)
2.1
(27.3
)
(6.3
)
7.2
6.4
$
23.1
$
(48.7
)
$
(12.9
)
$
15.8
$
3.9
Jackups
HD Ultra-Harsh & Harsh (1)
$
30.5
$
20.4
$
21.0
$
25.1
$
22.2
HD & SD - Modern (1)
1.6
13.7
11.6
11.2
2.9
SD - Legacy (1)
7.9
8.9
11.8
9.0
12.0
$
40.0
$
43.0
$
44.4
$
45.3
$
37.1
Total
$
63.1
$
(5.7
)
$
31.5
$
61.1
$
41.0
Other
Leased and Managed Rigs (1)
$
14.9
$
22.6
$
17.3
$
22.1
$
22.9
Total
$
78.0
$
16.9
$
48.8
$
83.2
$
63.9
Support
costs
General and administrative expense
$
19.0
$
18.8
$
18.3
$
27.2
$
19.1
Onshore support costs
29.7
29.0
28.0
27.1
29.1
$
48.7
$
47.8
$
46.3
$
54.3
$
48.2
Add:
Merger transaction and integration cost
included in contract drilling expense
—
—
0.2
0.9
0.9
Valaris Total
$
29.3
$
(30.9
)
$
2.7
$
29.8
$
16.6
ARO
ARO Total
$
31.1
$
21.9
$
11.4
$
17.9
$
27.8
Valaris 50% Share (unconsolidated)
15.6
11.0
5.7
9.0
13.9
Adjusted Total (2)
$
44.9
$
(19.9
)
$
8.4
$
38.8
$
30.5
(1)
Adjusted EBITDA is earnings before
interest, tax, depreciation and amortization. Adjusted EBITDA for
asset category also excludes onshore support costs and general and
administrative expense.
(2)
Adjusted total is Valaris consolidated
total plus Valaris 50% share of ARO (unconsolidated).
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
(In millions)
As of
July 28, 2022
May 2, 2022
February 21, 2022
October 27, 2021
August 2, 2021
CONTRACT BACKLOG (1)
Floaters
Drillships (2)
$
1,090.3
$
1,290.9
$
1,280.4
$
1,338.6
$
1,102.2
Semisubmersibles
359.6
375.8
384.9
277.9
294.0
$
1,449.9
$
1,666.7
$
1,665.3
$
1,616.5
$
1,396.2
Jackups
HD Ultra-Harsh & Harsh
192.0
218.8
309.7
307.6
364.4
HD & SD - Modern
377.6
225.7
252.1
274.5
299.9
SD - Legacy
72.3
70.7
81.2
85.5
102.9
$
641.9
$
515.2
$
643.0
$
667.6
$
767.2
Total
$
2,091.8
$
2,181.9
$
2,308.3
$
2,284.1
$
2,163.4
Other (3)
Leased and Managed Rigs
$
257.5
$
271.5
$
135.6
$
33.9
$
60.3
Valaris Total
$
2,349.3
$
2,453.4
$
2,443.9
$
2,318.0
$
2,223.7
ARO
Owned Rigs
$
934.9
$
993.6
$
1,040.9
$
757.4
$
818.7
Leased Rigs
524.3
496.9
460.2
88.7
134.5
ARO Total
$
1,459.2
$
1,490.5
$
1,501.1
$
846.1
$
953.2
Valaris 50% Share of ARO Owned Rigs
467.5
496.8
520.5
378.7
409.4
Adjusted Total (4)
$
2,816.8
$
2,950.2
$
2,964.4
$
2,696.7
$
2,633.1
(1)
Our contract drilling backlog reflects
commitments, represented by signed drilling contracts, and is
calculated by multiplying the contracted day rate by the contract
period. Contract drilling backlog includes drilling contracts
subject to FID and drilling contracts which grant the customer
termination rights if FID is not received with respect to projects
for which the drilling rig is contracted. The contracted day rate
excludes certain types of lump sum fees for rig mobilization,
demobilization, contract preparation, as well as customer
reimbursables and bonus opportunities.
(2)
Approximately $428 million of backlog in
each of the comparative periods presented above was attributable to
a contract awarded to drillship VALARIS DS-11 that was expected to
commence in mid-2024. In February 2022, the customer decided not to
sanction and therefore withdrew from the project. In March 2022,
the contract was novated to another customer, which was a partner
on the project. No material changes to the contract resulted from
the novation, including with respect to the termination provisions
in the event the project does not receive FID. In June 2022, the
customer terminated the contract awarded to VALARIS DS-11.
(3)
Leased rigs and managed rigs included in
Other reporting segment.
(4)
Adjusted total is Valaris consolidated
total plus Valaris 50% share of ARO owned rigs.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
AVERAGE DAY RATES (1)
Floaters
Drillships
$
213,000
$
203,000
$
196,000
$
189,000
$
212,000
Semisubmersibles
214,000
156,000
171,000
191,000
178,000
$
213,000
$
197,000
$
189,000
$
190,000
$
197,000
Jackups
HD Ultra-Harsh & Harsh
$
114,000
$
104,000
$
110,000
$
124,000
$
141,000
HD & SD Modern
79,000
80,000
76,000
77,000
73,000
SD Legacy
74,000
71,000
73,000
74,000
72,000
$
94,000
$
89,000
$
90,000
$
96,000
$
99,000
Total
$
120,000
$
108,000
$
111,000
$
115,000
$
114,000
Other
Leased and Managed Rigs
$
39,000
$
39,000
$
33,000
$
31,000
$
31,000
Valaris Total
$
98,000
$
90,000
$
89,000
$
90,000
$
87,000
ARO
Owned Rigs
$
94,000
$
99,000
$
101,000
$
99,000
$
99,000
Leased Rigs (2)
91,000
93,000
94,000
92,000
93,000
ARO Total
$
92,000
$
96,000
$
97,000
$
95,000
$
96,000
(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, and
demobilizations.
(2)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
average day rates.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
UTILIZATION - TOTAL FLEET (1)
Floaters
Drillships
29 %
30 %
27 %
24 %
18 %
Semisubmersibles
37 %
11 %
30 %
39 %
30 %
31 %
25 %
28 %
28 %
22 %
Jackups
HD Ultra-Harsh & Harsh
81 %
78 %
73 %
72 %
58 %
HD & SD Modern
53 %
51 %
42 %
43 %
43 %
SD Legacy
88 %
75 %
66 %
74 %
93 %
67 %
63 %
55 %
57 %
54 %
Total
53 %
49 %
46 %
47 %
44 %
Other
Leased and Managed Rigs
100 %
100 %
100 %
100 %
100 %
Valaris Total
61 %
57 %
54 %
56 %
54 %
Pro Forma Jackups (2)
72 %
68 %
62 %
62 %
63 %
ARO
Owned Rigs
97 %
91 %
80 %
85 %
96 %
Leased Rigs (3)
96 %
91 %
89 %
86 %
83 %
ARO Total
96 %
91 %
84 %
86 %
89 %
(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.
(3)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
utilization.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
UTILIZATION - ACTIVE FLEET (1)
(2)
Floaters
Drillships
52 %
56 %
57 %
79 %
51 %
Semisubmersibles
62 %
19 %
51 %
64 %
50 %
55 %
45 %
55 %
73 %
51 %
Jackups
HD Ultra-Harsh & Harsh
89 %
85 %
80 %
84 %
82 %
HD & SD Modern
82 %
83 %
76 %
75 %
74 %
SD Legacy
90 %
100 %
84 %
87 %
93 %
86 %
86 %
79 %
80 %
80 %
Total
77 %
74 %
72 %
79 %
74 %
Other
Leased and Managed Rigs
100 %
100 %
100 %
100 %
100 %
Valaris Total
82 %
80 %
78 %
84 %
81 %
Pro Forma Jackups (3)
87 %
87 %
81 %
82 %
86 %
ARO
Owned Rigs
97 %
91 %
80 %
85 %
96 %
Leased Rigs (4)
96 %
91 %
89 %
86 %
83 %
ARO Total
96 %
91 %
84 %
86 %
89 %
(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.
(4)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
utilization.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
REVENUE EFFICIENCY (1)
Floaters
Drillships
94.6 %
98.3 %
91.5 %
97.6 %
100.0 %
Semisubmersibles
91.9 %
100.0 %
97.7 %
96.7 %
100.0 %
93.7 %
98.5 %
93.0 %
97.3 %
100.0 %
Jackups
HD Ultra-Harsh & Harsh
99.3 %
98.9 %
99.1 %
99.5 %
100.0 %
HD & SD Modern
97.9 %
99.8 %
97.9 %
100.0 %
99.8 %
SD Legacy
100.0 %
100.0 %
100.0 %
99.0 %
96.9 %
98.9 %
99.4 %
98.8 %
99.6 %
99.0 %
Valaris Total
97.0 %
99.1 %
96.6 %
98.8 %
99.3 %
ARO
Owned Rigs
97.2 %
96.8 %
96.3 %
98.1 %
94.0 %
Leased Rigs
96.5 %
95.5 %
91.3 %
96.9 %
92.6 %
ARO Total
96.9 %
96.2 %
93.7 %
97.4 %
93.3 %
(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
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Active Fleet (1)
Floaters
Drillships
8
7
7
4
4
Semisubmersibles
3
3
3
3
3
11
10
10
7
7
Jackups
HD Ultra-Harsh & Harsh
10
10
10
10
10
HD & SD Modern
10
10
11
11
11
SD Legacy
3
3
3
3
4
23
23
24
24
25
Total Active Fleet
34
33
34
31
32
Stacked Fleet
Floaters
Drillships (2)
3
4
4
7
7
Semisubmersibles
2
2
2
2
2
5
6
6
9
9
Jackups
HD Ultra-Harsh & Harsh
1
1
1
1
2
HD & SD Modern
5
7
7
7
8
SD Legacy
—
—
1
1
—
6
8
9
9
10
Total Stacked Fleet
11
14
15
18
19
Leased Rigs (3)
Jackups
HD Ultra-Harsh & Harsh
1
1
1
1
1
HD & SD Modern
6
6
5
5
5
SD Legacy
—
1
1
2
3
Total Leased Rigs
7
8
7
8
9
Valaris Total
52
55
56
57
60
Managed Rigs (3)
2
2
2
2
2
ARO (4)
Owned Rigs
7
7
7
7
7
Leased Rigs
7
8
7
8
9
ARO Total
14
15
14
15
16
(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 purchase through year-end 2023.
Prior periods have been revised to conform with the current
treatment.
(3)
Leased rigs and managed rigs included in
Other reporting segment.
(4)
Valaris has a 50% ownership interest in
ARO. Rig count for ARO owned rigs excludes two newbuild rigs. The
first two rigs are expected to be delivered in the first half 2023.
All ARO leased rigs are leased from Valaris and also included in
Valaris leased rig count.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
AVAILABLE DAYS - TOTAL FLEET
(1)
Floaters
Drillships
1,161
1,170
1,196
1,196
1,001
Semisubmersibles
455
450
460
460
455
1,616
1,620
1,656
1,656
1,456
Jackups
HD Ultra-Harsh & Harsh
1,001
990
1,012
1,074
1,153
HD & SD Modern
1,419
1,599
1,668
1,748
1,729
SD Legacy
279
360
420
398
364
2,699
2,949
3,100
3,220
3,246
Total
4,315
4,569
4,756
4,876
4,702
Other
Leased and Managed Rigs
874
831
828
982
1,001
Valaris Total
5,189
5,400
5,584
5,858
5,703
ARO
Owned Rigs
637
630
644
644
637
Leased Rigs (2)
671
646
644
798
819
ARO Total
1,308
1,276
1,288
1,442
1,456
(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.
(2)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
available days.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
AVAILABLE DAYS - ACTIVE FLEET (1)
(2)
Floaters
Drillships
645
630
567
368
364
Semisubmersibles
273
270
276
276
273
918
900
843
644
637
Jackups
HD Ultra-Harsh & Harsh
910
900
920
920
819
HD & SD Modern
910
969
932
1,012
1,001
SD Legacy
273
270
328
337
364
2,093
2,139
2,180
2,269
2,184
Total
3,011
3,039
3,023
2,913
2,821
Other
Leased and Managed Rigs
874
831
828
982
1,001
Valaris Total
3,885
3,870
3,851
3,895
3,822
ARO
Owned Rigs
637
630
644
644
637
Leased Rigs (2)
671
646
644
798
819
ARO Total
1,308
1,276
1,288
1,442
1,456
(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.
(3)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
available days.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
OPERATING DAYS (1)
Floaters
Drillships
335
353
322
290
185
Semisubmersibles
168
52
140
177
137
503
405
462
467
322
Jackups
HD Ultra-Harsh & Harsh
810
769
734
770
674
HD & SD Modern
750
809
706
759
742
SD Legacy
245
270
276
294
339
1,805
1,848
1,716
1,823
1,755
Total
2,308
2,253
2,178
2,290
2,077
Other
Leased and Managed Rigs
874
831
828
982
1,001
Valaris Total
3,182
3,084
3,006
3,272
3,078
ARO
Owned Rigs
619
572
513
549
609
Leased Rigs (2)
642
588
570
687
684
ARO Total
1,261
1,160
1,083
1,236
1,293
(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.
(2)
All ARO leased rigs are leased from
Valaris and also included in Valaris leased and managed rigs
operating days.
VALARIS LIMITED AND
SUBSIDIARIES OPERATING STATISTICS ($ in millions,
except average day rate)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
DRILLSHIPS
Adjusted revenues (1)
$
128.1
$
73.1
$
63.3
$
55.7
$
39.6
Adjusted operating expense (2)
106.7
94.0
69.2
46.8
41.6
Rig operating margin
$
21.4
$
(20.9
)
$
(5.9
)
$
8.9
$
(2.0
)
Rig operating margin %
17
%
(29
)%
(9
)%
16
%
(5
)%
Other operating expenses
Depreciation
11.6
11.3
10.8
10.5
21.4
Loss on impairment
34.5
—
—
—
—
$
46.1
$
11.3
$
10.8
$
10.5
$
21.4
Other operating income (expense) (3)
(0.4
)
0.5
(1.2
)
(1.6
)
(1.6
)
Operating loss (4)
$
(25.1
)
$
(31.7
)
$
(17.9
)
$
(3.2
)
$
(25.0
)
Adjusted EBITDA (5)
$
21.0
$
(21.4
)
$
(6.6
)
$
8.6
$
(2.5
)
Reactivation costs (6)
23.3
48.6
24.3
0.3
—
Adjusted EBITDAR
$
44.3
$
27.2
$
17.7
$
8.9
$
(2.5
)
Preservation and stacking costs (6)
$
11.1
$
7.5
$
7.6
$
8.3
$
8.9
Number of Rigs (at quarter end)
Total Fleet
11
11
11
11
11
Active Fleet
8
7
7
4
4
Operating Days
335
353
322
290
185
Utilization - Active Fleet
52
%
56
%
57
%
79
%
51
%
Average Day Rate
$
213,000
$
203,000
$
196,000
$
189,000
$
212,000
(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 rig operating expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
SEMISUBMERSIBLES
Adjusted revenues (1)
$
36.3
$
8.1
$
24.0
$
33.8
$
24.5
Adjusted operating expense (2)
34.0
34.5
28.2
25.9
17.4
Rig operating margin
$
2.3
$
(26.4
)
$
(4.2
)
$
7.9
$
7.1
Rig operating margin %
6
%
(326
)%
(18
)%
23
%
29
%
Depreciation
0.8
0.8
0.8
0.8
2.2
Other operating expense (3)
(0.5
)
(1.1
)
(1.9
)
(2.6
)
(2.2
)
Operating income (loss) (4)
$
1.0
$
(28.3
)
$
(6.9
)
$
4.5
$
2.7
Adjusted EBITDA (5)
$
2.1
$
(27.3
)
$
(6.3
)
$
7.2
$
6.4
Reactivation costs (6)
0.8
12.3
9.5
1.1
0.1
Adjusted EBITDAR
$
2.9
$
(15.0
)
$
3.2
$
8.3
$
6.5
Preservation and stacking costs (6)
$
4.1
$
1.2
$
1.0
$
1.4
$
1.4
Number of Rigs (at quarter end)
Total Fleet
5
5
5
5
5
Active Fleet
3
3
3
3
3
Operating Days
168
52
140
177
137
Utilization - Active Fleet
62
%
19
%
51
%
64
%
50
%
Average Day Rate
$
214,000
$
156,000
$
171,000
$
191,000
$
178,000
(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 rig operating expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
HD ULTRA-HARSH & HARSH
JACKUPS
Adjusted revenues (1)
$
93.6
$
81.1
$
83.7
$
95.8
$
95.0
Adjusted operating expense (2)
63.4
58.1
61.4
68.8
71.3
Rig operating margin
$
30.2
$
23.0
$
22.3
$
27.0
$
23.7
Rig operating margin %
32
%
28
%
27
%
28
%
25
%
Depreciation
5.5
5.5
7.9
8.0
13.7
Other operating income (expense) (3)
5.1
0.1
(0.8
)
(2.1
)
(0.7
)
Operating income (4)
$
29.8
$
17.6
$
13.6
$
16.9
$
9.3
Adjusted EBITDA (5)
$
30.5
$
20.4
$
21.0
$
25.1
$
22.2
Reactivation costs (6)
0.2
0.6
3.3
13.6
20.1
Adjusted EBITDAR
$
30.7
$
21.0
$
24.3
$
38.7
$
42.3
Preservation and stacking costs (6)
$
0.6
$
0.1
$
0.1
$
0.1
$
1.3
Number of Rigs (at quarter end)
Total Fleet
11
11
11
11
12
Active Fleet
10
10
10
10
10
Operating Days
810
769
734
770
674
Utilization - Active Fleet
89
%
85
%
80
%
84
%
82
%
Average Day Rate
$
114,000
$
104,000
$
110,000
$
124,000
$
141,000
(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 rig operating expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
HD & SD MODERN JACKUPS
Adjusted revenues (1)
$
59.8
$
65.5
$
54.2
$
58.1
$
54.2
Adjusted operating expense (2)
57.9
47.6
40.6
44.9
49.2
Rig operating margin
$
1.9
$
17.9
$
13.6
$
13.2
$
5.0
Rig operating margin %
3
%
27
%
25
%
23
%
9
%
Depreciation
2.3
2.5
3.2
3.0
9.6
Other operating expense (3)
(1.4
)
(8.4
)
(2.6
)
(2.6
)
(0.9
)
Operating income (loss) (4)
$
(1.8
)
$
7.0
$
7.8
$
7.6
$
(5.5
)
Adjusted EBITDA (5)
$
1.6
$
13.7
$
11.6
$
11.2
$
2.9
Reactivation costs (6)
0.1
—
—
4.4
3.8
Adjusted EBITDAR
$
1.7
$
13.7
$
11.6
$
15.6
$
6.7
Preservation and stacking costs (6)
$
3.3
$
1.8
$
2.0
$
0.5
$
5.5
Number of Rigs (at quarter end)
Total Fleet
15
17
18
18
19
Active Fleet
10
10
11
11
11
Operating Days
750
809
706
759
742
Utilization - Active Fleet
82
%
83
%
76
%
75
%
74
%
Average Day Rate
$
79,000
$
80,000
$
76,000
$
77,000
$
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 (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 rig operating expense.
VALARIS LIMITED AND
SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average
day rate)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
SD LEGACY JACKUPS
Adjusted revenues (1)
$
18.1
$
19.2
$
20.3
$
23.4
$
24.4
Adjusted operating expense (2)
10.3
9.9
8.4
14.2
11.8
Rig operating margin
$
7.8
$
9.3
$
11.9
$
9.2
$
12.6
Rig operating margin %
43
%
48
%
59
%
39
%
52
%
Depreciation
0.9
1.0
1.0
0.9
1.6
Other operating expense (3)
(0.1
)
(0.3
)
(0.2
)
(0.3
)
(0.6
)
Operating income (4)
$
6.8
$
8.0
$
10.7
$
8.0
$
10.4
Adjusted EBITDA (5)
$
7.9
$
8.9
$
11.8
$
9.0
$
12.0
Reactivation costs (6)
—
—
—
—
—
Adjusted EBITDAR
$
7.9
$
8.9
$
11.8
$
9.0
$
12.0
Preservation and stacking costs (6)
$
(0.1
)
$
—
$
0.3
$
2.3
$
—
Number of Rigs (at quarter end)
Total Fleet
3
3
4
4
4
Active Fleet
3
3
3
3
4
Operating Days
245
270
276
294
339
Utilization - Active Fleet
90
%
100
%
84
%
87
%
93
%
Average Day Rate
$
74,000
$
71,000
$
73,000
$
74,000
$
72,000
(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 rig operating expense.
ARO DRILLING
CONDENSED BALANCE SHEET
INFORMATION
(In millions)
As of
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Cash
$
293.3
$
240.2
$
270.8
$
309.0
$
318.2
Other current assets
106.3
179.5
135.0
98.0
81.7
Non-current assets
777.5
775.8
775.8
776.1
782.8
Total assets
$
1,177.1
$
1,195.5
$
1,181.6
$
1,183.1
$
1,182.7
Current liabilities
$
63.7
$
92.9
$
79.9
$
77.1
$
74.9
Non-current liabilities
958.7
957.9
956.7
951.0
950.3
Total liabilities
$
1,022.4
$
1,050.8
$
1,036.6
$
1,028.1
$
1,025.2
Shareholders' equity
$
154.7
$
144.7
$
145.0
$
155.0
$
157.5
Total liabilities and shareholders'
equity
$
1,177.1
$
1,195.5
$
1,181.6
$
1,183.1
$
1,182.7
ARO DRILLING
CONDENSED INCOME STATEMENT
INFORMATION
(In millions)
Three Months Ended
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Revenues
$
116.4
$
111.3
$
105.4
$
117.7
$
124.8
Operating expenses
Contract drilling (exclusive of
depreciation)
82.1
84.2
88.9
94.4
92.7
Depreciation
15.4
16.5
17.7
16.8
14.6
General and administrative
3.2
5.2
5.1
5.4
4.3
Operating income (loss)
$
15.7
$
5.4
$
(6.3
)
$
1.1
$
13.2
Other expense, net
3.3
3.3
2.4
3.4
3.1
Provision for income taxes
2.5
0.7
1.3
0.2
1.9
Net income (loss)
$
9.9
$
1.4
$
(10.0
)
$
(2.5
)
$
8.2
EBITDA
$
31.1
$
21.9
$
11.4
$
17.9
$
27.8
ARO Drilling condensed balance sheet and income statement
information presented above represents 100% of ARO. Valaris has a
50% ownership interest in ARO.
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 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, merger transaction and integration costs and lease
modification adjustment. 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
second 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 Income (Loss) to
Adjusted EBITDA
A reconciliation of net income (loss) as
reported to Adjusted EBITDA is included in the tables below (in
millions):
Three Months Ended
June 30, 2022
March 31, 2022
VALARIS
Net income (loss)
$
112.8
$
(39.8
)
Add (subtract):
Income tax expense (benefit)
20.2
(0.7
)
Interest expense
11.6
11.5
Reorganization items
0.7
1.0
Other income
(160.9
)
(21.9
)
Operating loss
$
(15.6
)
$
(49.9
)
Add (subtract):
Loss on impairment
34.5
—
Depreciation expense
22.3
22.5
Amortization, net (1)
(3.2
)
1.6
Merger transaction and integration
costs
—
(0.8
)
Equity in earnings of ARO
(8.7
)
(4.3
)
Adjusted EBITDA
$
29.3
$
(30.9
)
(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
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
ARO
Net income (loss)
$
9.9
$
1.4
$
(10.0
)
$
(2.5
)
$
8.2
Add:
Income tax expense
2.5
0.7
1.3
0.2
1.9
Other expense, net
3.3
3.3
2.4
3.4
3.1
Operating income (loss)
$
15.7
$
5.4
$
(6.3
)
$
1.1
$
13.2
Add:
Depreciation expense
15.4
16.5
17.7
16.8
14.6
EBITDA
$
31.1
$
21.9
$
11.4
$
17.9
$
27.8
Reconciliation of Net Income (Loss) to
Adjusted EBITDA and Adjusted EBITDAR
(In millions)
Three Months Ended
June 30, 2022
March 31, 2022
FLOATERS
Net loss
$
(24.1
)
$
(60.0
)
Add (subtract):
Other (income) expense
0.1
(0.1
)
Operating loss
$
(24.0
)
$
(60.1
)
Add (subtract):
Depreciation and amortization, net
12.5
11.4
Loss on impairment
34.5
—
Other costs
0.1
—
Adjusted EBITDA
$
23.1
$
(48.7
)
Add (subtract):
Reactivation costs
24.1
60.9
Adjusted EBITDAR
$
47.2
$
12.2
JACKUPS
Net income
$
170.3
$
34.7
Add (subtract):
Other income
(135.4
)
(2.3
)
Operating income
$
34.9
$
32.4
Add (subtract):
Depreciation and amortization, net
5.4
10.6
Other costs
(0.3
)
—
Adjusted EBITDA
$
40.0
$
43.0
Add (subtract):
Reactivation costs
0.2
0.6
Adjusted EBITDAR
$
40.2
$
43.6
OTHER
Net income
$
13.4
$
21.6
Add (subtract):
Operating income
$
13.4
$
21.6
Add (subtract):
Depreciation and amortization, net
1.3
1.0
Other costs
0.2
—
Adjusted EBITDA
$
14.9
$
22.6
Add (subtract):
Reactivation costs
—
—
Adjusted EBITDAR
$
14.9
$
22.6
Reconciliation of Operating Income
(Loss) to Adjusted EBITDAR
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
ACTIVE FLEET (1)
Operating income (loss)
$
32.0
$
(40.0
)
$
(3.1
)
$
27.2
$
20.2
$
(20.7
)
$
(0.5
)
Add (subtract):
Reactivation costs
24.3
61.5
37.1
19.4
17.3
6.7
24.0
Depreciation and amortization, net
14.8
18.9
19.0
20.7
11.9
19.0
30.9
Support and other costs
27.6
26.1
26.6
25.7
17.9
9.8
27.7
Adjusted EBITDAR (2)
$
98.7
$
66.5
$
79.6
$
93.0
$
67.3
$
14.8
$
82.1
LEASED AND MANAGED RIGS
Operating income
$
11.6
$
19.4
$
13.9
$
18.5
$
13.0
$
2.6
$
15.6
Add (subtract):
Depreciation and amortization, net
1.3
1.2
1.2
1.2
0.9
3.9
4.8
Support and other costs
2.0
2.0
2.3
2.5
1.7
0.8
2.5
Adjusted EBITDAR (2)
$
14.9
$
22.6
$
17.4
$
22.2
$
15.6
$
7.3
$
22.9
STACKED FLEET
Operating loss
$
(48.9
)
$
(14.6
)
$
(15.2
)
$
(17.6
)
$
(15.3
)
$
(18.8
)
$
(34.1
)
Add (subtract):
Depreciation and amortization, net
3.1
3.4
3.9
5.1
3.3
13.7
17.0
Loss on impairment
34.5
—
—
—
—
—
—
Support and other costs
—
0.5
0.4
—
—
—
—
Adjusted EBITDAR (2)
$
(11.3
)
$
(10.7
)
$
(10.9
)
$
(12.5
)
$
(12.0
)
$
(5.1
)
$
(17.1
)
TOTAL FLEET
Operating income (loss)
$
(5.3
)
$
(35.2
)
$
(4.4
)
$
28.1
$
17.9
$
(36.9
)
$
(19.0
)
Add (subtract):
Reactivation costs
24.3
61.5
37.1
19.4
17.3
6.7
24.0
Depreciation and amortization, net
19.2
23.5
24.0
27.0
16.1
36.6
52.7
Loss on impairment
34.5
—
—
—
—
—
—
Support and other costs
29.6
28.6
29.3
28.2
19.6
10.6
30.2
Adjusted EBITDAR (2)
$
102.3
$
78.4
$
86.0
$
102.7
$
70.9
$
17.0
$
87.9
(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.
Reconciliation of Operating Revenues to
Adjusted Revenues, Operating Expenses to Adjusted Operating
Expenses and Operating Income (Loss) to Adjusted EBITDA
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
DRILLSHIPS
Operating revenues
$
149.0
$
85.4
$
73.5
$
67.5
$
28.9
$
13.7
$
42.6
Add (subtract):
Reimbursable revenues (1)
(15.4
)
(6.9
)
(5.2
)
(6.0
)
(1.9
)
(0.6
)
(2.5
)
Amortized revenues
(5.5
)
(5.4
)
(5.0
)
(5.8
)
—
(0.5
)
(0.5
)
Adjusted revenues
$
128.1
$
73.1
$
63.3
$
55.7
$
27.0
$
12.6
$
39.6
Operating expenses (2)
$
174.0
$
117.2
$
91.4
$
70.6
$
34.5
$
33.0
$
67.5
Add (subtract):
Depreciation and amortization
(17.0
)
(15.8
)
(15.7
)
(17.0
)
(7.2
)
(15.3
)
(22.5
)
Loss on impairment
(34.5
)
—
—
—
—
—
—
Reimbursable expenses
(15.5
)
(7.7
)
(5.8
)
(6.5
)
(2.2
)
(1.0
)
(3.2
)
Other
(0.3
)
0.3
(0.7
)
(0.3
)
(0.1
)
(0.1
)
(0.2
)
Adjusted operating expenses
$
106.7
$
94.0
$
69.2
$
46.8
$
25.0
$
16.6
$
41.6
Operating loss (2)
$
(25.1
)
$
(31.7
)
$
(17.9
)
$
(3.2
)
$
(5.7
)
$
(19.3
)
$
(25.0
)
Add (subtract):
Depreciation and amortization, net
11.5
10.4
10.7
11.2
7.2
14.8
22.0
Loss on impairment
34.5
—
—
—
—
—
—
Other
0.1
(0.1
)
0.6
0.6
0.4
(0.3
)
0.5
Adjusted EBITDA (3)
$
21.0
$
(21.4
)
$
(6.6
)
$
8.6
$
1.9
$
(4.8
)
$
(2.5
)
(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 the operating expenses and operating income (loss) to
exclude 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 Operating Income (Loss) to Adjusted EBITDA
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
SEMISUBMERSIBLES
Operating revenues
$
39.1
$
14.3
$
27.0
$
36.8
$
20.9
$
4.7
$
25.6
Add (subtract):
Reimbursable revenues (1)
(2.0
)
(6.2
)
(2.3
)
(2.0
)
(1.1
)
—
(1.1
)
Amortized revenues
(0.8
)
—
(0.7
)
(1.0
)
—
—
—
Adjusted revenues
$
36.3
$
8.1
$
24.0
$
33.8
$
19.8
$
4.7
$
24.5
Operating expenses (2)
$
38.1
$
42.6
$
34.0
$
32.3
$
18.7
$
4.1
$
22.8
Add (subtract):
Depreciation and amortization
(1.8
)
(1.0
)
(1.2
)
(3.4
)
(1.9
)
(1.6
)
(3.5
)
Reimbursable expenses
(2.1
)
(7.3
)
(4.9
)
(2.8
)
(1.5
)
(0.2
)
(1.7
)
Other
(0.2
)
0.2
0.3
(0.2
)
(0.2
)
—
(0.2
)
Adjusted operating expenses
$
34.0
$
34.5
$
28.2
$
25.9
$
15.1
$
2.3
$
17.4
Operating income (loss) (2)
$
1.0
$
(28.3
)
$
(6.9
)
$
4.5
$
2.2
$
0.5
$
2.7
Add (subtract):
Depreciation and amortization, net
1.0
1.0
0.5
2.4
1.9
1.6
3.5
Other
0.1
—
0.1
0.3
0.1
0.1
0.2
Adjusted EBITDA (3)
$
2.1
$
(27.3
)
$
(6.3
)
$
7.2
$
4.2
$
2.2
$
6.4
(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 the operating expenses and operating income (loss) to
exclude 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 Operating Income (Loss) to Adjusted EBITDA
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
HD ULTRA-HARSH & HARSH
JACKUPS
Operating revenues
$
106.1
$
92.9
$
94.0
$
102.8
$
70.9
$
34.0
$
104.9
Add (subtract):
Reimbursable revenues (1)
(3.7
)
(6.6
)
(8.6
)
(6.6
)
(5.9
)
(2.7
)
(8.6
)
Amortized revenues
(8.8
)
(5.2
)
(1.7
)
(0.4
)
(0.2
)
(1.1
)
(1.3
)
Adjusted revenues
$
93.6
$
81.1
$
83.7
$
95.8
$
64.8
$
30.2
$
95.0
Operating expenses (2)
$
76.3
$
75.4
$
80.4
$
85.9
$
55.6
$
40.0
$
95.6
Add (subtract):
Depreciation and amortization
(9.5
)
(8.1
)
(8.9
)
(8.2
)
(5.0
)
(9.0
)
(14.0
)
Reimbursable expenses
(3.3
)
(9.2
)
(10.1
)
(8.8
)
(6.8
)
(3.2
)
(10.0
)
Other
(0.1
)
—
—
(0.1
)
(0.2
)
(0.1
)
(0.3
)
Adjusted operating expenses
$
63.4
$
58.1
$
61.4
$
68.8
$
43.6
$
27.7
$
71.3
Operating income (loss) (2)
$
29.8
$
17.6
$
13.6
$
16.9
$
15.3
$
(6.0
)
$
9.3
Add (subtract):
Depreciation and amortization, net
0.7
2.9
7.2
7.8
4.8
7.9
12.7
Other
—
(0.1
)
0.2
0.4
0.1
0.1
0.2
Adjusted EBITDA (3)
$
30.5
$
20.4
$
21.0
$
25.1
$
20.2
$
2.0
$
22.2
(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 the operating expenses and operating income (loss) to
exclude 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 Operating Income (Loss) to Adjusted EBITDA
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
HD & SD MODERN JACKUPS
Operating revenues
$
61.1
$
67.8
$
56.2
$
59.6
$
40.7
$
17.0
$
57.7
Add (subtract):
Reimbursable revenues (1)
(1.9
)
(3.1
)
(1.4
)
(1.1
)
(0.9
)
(0.5
)
(1.4
)
Amortized revenues
0.6
0.8
(0.6
)
(0.4
)
(1.6
)
(0.5
)
(2.1
)
Adjusted revenues
$
59.8
$
65.5
$
54.2
$
58.1
$
38.2
$
16.0
$
54.2
Operating expenses (2)
$
62.8
$
60.9
$
48.4
$
52.0
$
37.4
$
25.8
$
63.2
Add (subtract):
Depreciation and amortization
(3.1
)
(6.0
)
(4.3
)
(3.6
)
(2.2
)
(8.1
)
(10.3
)
Reimbursable expenses
(1.9
)
(7.5
)
(3.2
)
(3.2
)
(2.2
)
(1.2
)
(3.4
)
Other
0.1
0.2
(0.3
)
(0.3
)
(0.2
)
(0.1
)
(0.3
)
Adjusted operating expenses
$
57.9
$
47.6
$
40.6
$
44.9
$
32.8
$
16.4
$
49.2
Operating income (loss) (2)
$
(1.8
)
$
7.0
$
7.8
$
7.6
$
3.3
$
(8.8
)
$
(5.5
)
Add (subtract):
Depreciation and amortization, net
3.7
6.8
3.7
3.2
0.6
7.6
8.2
Other
(0.3
)
(0.1
)
0.1
0.4
0.1
0.1
0.2
Adjusted EBITDA (3)
$
1.6
$
13.7
$
11.6
$
11.2
$
4.0
$
(1.1
)
$
2.9
(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 the operating expenses and operating income (loss) to
exclude 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 Operating Income (Loss) to Adjusted EBITDA
(In millions)
Successor
Predecessor
Combined (Non-GAAP)
Three Months Ended
June 30, 2022
Three Months Ended March 31,
2022
Three Months Ended December 31,
2021
Three Months Ended September 30,
2021
Two Months Ended June 30,
2021
One Month Ended April 30,
2021
Three Months Ended June 30,
2021
SD LEGACY JACKUPS
Operating revenues
$
18.6
$
19.9
$
22.1
$
23.9
$
16.8
$
8.8
$
25.6
Add (subtract):
Reimbursable revenues (1)
(0.5
)
(0.7
)
(1.8
)
(0.5
)
(0.8
)
(0.2
)
(1.0
)
Amortized revenues
—
—
—
—
—
(0.2
)
(0.2
)
Adjusted revenues
$
18.1
$
19.2
$
20.3
$
23.4
$
16.0
$
8.4
$
24.4
Operating expenses (2)
$
11.8
$
12.0
$
11.4
$
16.0
$
10.0
$
5.2
$
15.2
Add (subtract):
Depreciation and amortization
(1.0
)
(1.0
)
(1.0
)
(0.9
)
(0.7
)
(1.0
)
(1.7
)
Reimbursable expenses
(0.5
)
(1.1
)
(2.1
)
(0.9
)
(1.2
)
(0.4
)
(1.6
)
Other
—
—
0.1
—
(0.2
)
0.1
(0.1
)
Adjusted operating expenses
$
10.3
$
9.9
$
8.4
$
14.2
$
7.9
$
3.9
$
11.8
Operating income (2)
$
6.8
$
8.0
$
10.7
$
8.0
$
6.8
$
3.6
$
10.4
Add (subtract):
Depreciation and amortization, net
1.0
1.0
1.0
0.9
0.7
0.8
1.5
Other
0.1
(0.1
)
0.1
0.1
0.2
(0.1
)
0.1
Adjusted EBITDA (3)
$
7.9
$
8.9
$
11.8
$
9.0
$
7.7
$
4.3
$
12.0
(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 the operating expenses and operating income (loss) to
exclude 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220801005830/en/
Investor & Media Contact: Tim Richardson Director - Investor
Relations +1-713-979-4619
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