HAMILTON, Bermuda–(BUSINESS WIRE)–Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) today reported second quarter 2023 results.
President and Chief Executive Officer Anton Dibowitz said, “In the second quarter, we continued to deliver strong operational performance, achieving revenue efficiency of 97%. We also mobilized the VALARIS DS-17 to Brazil, which has completed its reactivation and is expected to commence its contract this month.”
Dibowitz added, “Our outlook for the industry and our business remains very positive, with increasing demand and constrained supply tightening the market. We continue to see increases in contract duration, lead times and day rates, all of which point towards a strong and sustained upcycle. Our earnings and cash flow should grow meaningfully over the next few years as rigs roll from legacy day rate contracts to higher market rates and reactivated rigs return to work on attractive contracts.”
Dibowitz concluded, “Moving forward, we will continue to be disciplined in exercising our operational leverage and laser-focused on maximizing long-term shareholder value. This includes our commitment to returning capital to shareholders, as demonstrated by our recently announced increase in our 2023 share repurchase target from $150 million to $200 million.”
Financial and Operational Highlights
- Net loss of $27 million, Adjusted EBITDA of $15 million and Adjusted EBITDAR of $59 million;
- Delivered revenue efficiency of 97%;
- Awarded new contracts and extensions with associated contract backlog of approximately $180 million during the second quarter;
- Long-term contract awarded to VALARIS DS-7 following quarter end, increasing total contract backlog to $3.0 billion;
- Increased 2023 share repurchase target from $150 million to $200 million in conjunction with the VALARIS DS-7 contract award;
- Repurchased $65 million of shares through June 30, 2023 and $94 million to date.
Second Quarter Review
Net loss was $27 million compared to net income of $49 million in the first quarter 2023. Adjusted EBITDA decreased to $15 million from $29 million in the first quarter primarily due to higher reactivation expense. Adjusted EBITDAR increased to $59 million from $55 million in the first quarter.
Revenues decreased to $415 million from $430 million in the first quarter 2023. Excluding reimbursable items, revenues decreased to $390 million from $408 million in the first quarter. The decrease was primarily due to fewer operating days for the jackup fleet and lower mobilization and demobilization revenues. These were partially offset by an increase in the average day rate for both floaters and jackups.
Contract drilling expense decreased to $374 million from $377 million in the first quarter 2023. Excluding reimbursable items, contract drilling expense decreased to $348 million from $356 million in the first quarter primarily due to lower costs for rigs that were idle or between contracts in the second quarter, and lower repair and maintenance costs associated with special periodic surveys and contract preparation work. These were partially offset by higher reactivation costs, which increased to $44 million from $26 million.
Depreciation expense increased to $25 million from $23 million in the first quarter 2023. General and administrative expense increased to $26 million from $24 million in the first quarter 2023 primarily due to higher personnel costs.
Other income decreased to $7 million from $13 million in the first quarter 2023. This was primarily due to a $29 million loss recognized on the extinguishment of the Senior Secured First Lien Notes due 2028 and a $6 million increase in interest expense associated with the refinancing transaction. These were partially offset by a $27 million pre-tax gain recognized in the second quarter on the sale of VALARIS 54.
Tax expense was $25 million compared to a tax benefit of $28 million in the first quarter 2023. The second quarter tax provision included $6 million of discrete tax expense and the first quarter tax provision included $44 million of discrete tax benefit, which were primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. Adjusted for discrete items, tax expense increased to $18 million from $16 million in the first quarter.
Cash and cash equivalents and restricted cash decreased to $805 million as of June 30, 2023, from $844 million as of March 31, 2023. The decrease was primarily due to payments for share repurchases, net capital expenditures and an increase in working capital, partially offset by net proceeds from the refinancing transaction completed during the quarter.
Capital expenditures increased to $71 million from $56 million in the first quarter 2023 primarily due to an increase in fleetwide maintenance capital expenditures and reactivation capital expenditures associated with VALARIS DS-8.
Second Quarter Segment Review
Floaters
Floater revenues increased to $227 million from $215 million in the first quarter 2023. Excluding reimbursable items, revenues increased to $216 million from $207 million in the first quarter. The increase was primarily due to more operating days and a higher average day rate for VALARIS DS-12, which commenced a new contract in the second quarter after spending part of the first quarter mobilizing from Mauritania to Angola.
Contract drilling expense increased to $196 million from $175 million in the first quarter 2023. Excluding reimbursable items, contract drilling expense increased to $185 million from $166 million in the first quarter. The increase was primarily due to higher reactivation costs, which increased to $44 million from $26 million in the first quarter due to the commencement of a reactivation project for VALARIS DS-8 ahead of a three-year contract offshore Brazil. This was partially offset by lower reactivation expense for VALARIS DS-17, which is expected to commence operations offshore Brazil this month.
Jackups
Jackup revenues decreased to $145 million from $170 million in the first quarter 2023. Excluding reimbursable items, revenues decreased to $136 million from $162 million in the first quarter primarily due to fewer operating days and lower mobilization and demobilization revenues for VALARIS 249, which completed its contract offshore New Zealand late in the first quarter and was mobilizing to its next contract offshore Trinidad during the second quarter. In addition, VALARIS 54 was sold following the completion of its contract late in the first quarter and VALARIS 108 was idle for most of the second quarter undergoing contract preparation work ahead of a three-year bareboat charter with ARO Drilling. These were partially offset by more operating days for VALARIS 115 and 247 as both rigs commenced new contracts after idle periods.
Contract drilling expense decreased to $124 million from $149 million in the first quarter 2023. Excluding reimbursable items, contract drilling expense decreased to $114 million from $142 million in the first quarter. This was primarily due to lower costs for VALARIS 249 as the rig’s operating costs were deferred during its mobilization from New Zealand to Trinidad, lower costs for VALARIS Viking due to the rig being preservation stacked in the first quarter and lower costs associated with special periodic surveys and contract preparations for certain rigs.
ARO Drilling
Revenues decreased to $118 million from $124 million in the first quarter 2023 primarily due to an increase in out of service time related to planned maintenance on certain rigs. Contract drilling expense increased to $95 million from $91 million in the first quarter primarily due to higher repair costs associated with the previously mentioned planned maintenance.
Other
Revenues decreased to $43 million from $46 million in the first quarter 2023 and contract drilling expense decreased to $18 million from $20 million in the first quarter.
|
Second Quarter |
||||||||||||||||||||||||||||||||
|
Floaters |
Jackups |
ARO (1) |
Other |
Reconciling Items (1)(2) |
Consolidated Total |
|||||||||||||||||||||||||||
|
(in millions of $, except %) |
Q2 2023 |
Q1 2023 |
Chg |
Q2 2023 |
Q1 2023 |
Chg |
Q2 2023 |
Q1 2023 |
Chg |
Q2 2023 |
Q1 2023 |
Chg |
Q2 2023 |
Q1 2023 |
Q2 2023 |
Q1 2023 |
Chg |
|||||||||||||||
|
Revenues |
227.4 |
214.8 |
6 |
% |
144.6 |
169.8 |
(15 |
)% |
117.8 |
123.6 |
(5 |
)% |
43.2 |
45.5 |
(5 |
)% |
(117.8 |
) |
(123.6 |
) |
415.2 |
430.1 |
(3 |
)% |
||||||||
|
Operating expenses |
||||||||||||||||||||||||||||||||
|
Contract drilling |
196.2 |
174.6 |
(12 |
)% |
123.5 |
148.9 |
17 |
% |
95.0 |
90.9 |
(5 |
)% |
18.2 |
20.2 |
10 |
% |
(59.4 |
) |
(57.4 |
) |
373.5 |
377.2 |
1 |
% |
||||||||
|
Depreciation |
13.6 |
13.0 |
(5 |
)% |
9.6 |
9.0 |
(7 |
)% |
15.6 |
15.0 |
(4 |
)% |
1.2 |
1.3 |
8 |
% |
(15.5 |
) |
(15.0 |
) |
24.5 |
23.3 |
(5 |
)% |
||||||||
|
General and admin. |
— |
— |
— |
% |
— |
— |
— |
% |
5.7 |
4.6 |
(24 |
)% |
— |
— |
— |
% |
20.7 |
19.8 |
26.4 |
24.4 |
(8 |
)% |
||||||||||
|
Equity in earnings (losses) of ARO |
— |
— |
— |
% |
— |
— |
— |
% |
— |
— |
— |
% |
— |
— |
— |
% |
(0.7 |
) |
3.3 |
(0.7 |
) |
3.3 |
nm |
|||||||||
|
Operating income (loss) |
17.6 |
27.2 |
(35 |
)% |
11.5 |
11.9 |
(3 |
)% |
1.5 |
13.1 |
(89 |
)% |
23.8 |
24.0 |
(1 |
)% |
(64.3 |
) |
(67.7 |
) |
(9.9 |
) |
8.5 |
nm |
||||||||
|
Net income (loss) |
17.9 |
27.5 |
(35 |
)% |
39.1 |
12.1 |
223 |
% |
(7.3 |
) |
0.8 |
nm |
23.8 |
24.0 |
(1 |
)% |
(100.8 |
) |
(15.8 |
) |
(27.3 |
) |
48.6 |
nm |
||||||||
|
Adjusted EBITDA |
31.1 |
40.2 |
(23 |
)% |
21.1 |
20.8 |
1 |
% |
17.1 |
28.1 |
(39 |
)% |
24.9 |
25.4 |
(2 |
)% |
(78.9 |
) |
(86.0 |
) |
15.3 |
28.5 |
(46 |
)% |
||||||||
|
Adjusted EBITDAR |
75.3 |
66.4 |
13 |
% |
21.0 |
20.9 |
— |
% |
17.1 |
28.1 |
(39 |
)% |
24.9 |
25.4 |
(2 |
)% |
(78.9 |
) |
(86.0 |
) |
59.4 |
54.8 |
8 |
% |
||||||||
|
(1) The full operating results included above for ARO are not included within our consolidated results and thus deducted under “Reconciling Items” and replaced with our equity in earnings of ARO. |
|
(2) Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in “Reconciling Items.” Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in “Reconciling Items.” |
Adjusted EBITDA and Adjusted EBITDAR
In the second quarter, Valaris changed its Adjusted EBITDA and Adjusted EBITDAR calculations to include amortization associated with deferred mobilization and contract preparation revenues and costs and deferred capital upgrade revenues. The Company believes that this change will ensure that Adjusted EBITDA and Adjusted EBITDAR better reflect the earnings profile of our operations and will be more closely aligned with the calculation methodology used by Valaris’ closest offshore drilling peers. Adjusted EBITDA and Adjusted EBITDAR for all comparative periods have been revised using the new methodology to consistently reflect this change. The impact of the calculation change on both Adjusted EBITDA and Adjusted EBITDAR was negative $2 million and positive $4 million in the second and first quarter 2023, respectively.
As previously announced, Valaris will hold its second quarter 2023 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Wednesday, August 2, 2023. An updated investor presentation will be available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.
Forward-Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company (“ARO”) newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine); cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic; future operations; any exercise of our options for delivery of the VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to environmental, social and governance (“ESG”) matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our ESG targets, including our Scope 1 emissions intensity reduction target, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission’s website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(In millions, except per share amounts) |
|
Three Months Ended |
|||||||||||||||||||
|
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
|||||||||||||||
|
OPERATING REVENUES |
$ |
415.2 |
$ |
430.1 |
$ |
433.6 |
$ |
437.2 |
$ |
413.3 |
|||||||||
|
OPERATING EXPENSES |
|||||||||||||||||||
|
Contract drilling (exclusive of depreciation) |
373.5 |
377.2 |
353.4 |
336.7 |
361.8 |
||||||||||||||
|
Loss on impairment |
— |
— |
— |
— |
34.5 |
||||||||||||||
|
Depreciation |
24.5 |
23.3 |
23.8 |
22.6 |
22.3 |
||||||||||||||
|
General and administrative |
26.4 |
24.4 |
23.9 |
19.2 |
19.0 |
||||||||||||||
|
Total operating expenses |
424.4 |
424.9 |
401.1 |
378.5 |
437.6 |
||||||||||||||
|
EQUITY IN EARNINGS (LOSSES) OF ARO |
(0.7 |
) |
3.3 |
8.6 |
2.9 |
8.7 |
|||||||||||||
|
OPERATING INCOME (LOSS) |
(9.9 |
) |
8.5 |
41.1 |
61.6 |
(15.6 |
) |
||||||||||||
|
OTHER INCOME (EXPENSE) |
|||||||||||||||||||
|
Interest income |
24.6 |
23.0 |
15.5 |
27.9 |
11.2 |
||||||||||||||
|
Interest expense, net |
(16.7 |
) |
(11.1 |
) |
(10.5 |
) |
(11.7 |
) |
(11.6 |
) |
|||||||||
|
Other, net |
(0.8 |
) |
0.6 |
(5.2 |
) |
13.7 |
149.0 |
||||||||||||
|
7.1 |
12.5 |
(0.2 |
) |
29.9 |
148.6 |
||||||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES |
(2.8 |
) |
21.0 |
40.9 |
91.5 |
133.0 |
|||||||||||||
|
PROVISION (BENEFIT) FOR INCOME TAXES |
24.5 |
(27.6 |
) |
9.8 |
13.8 |
20.2 |
|||||||||||||
|
NET INCOME (LOSS) |
(27.3 |
) |
48.6 |
31.1 |
77.7 |
112.8 |
|||||||||||||
|
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
(2.1 |
) |
(1.9 |
) |
(1.9 |
) |
(3.4 |
) |
(1.2 |
) |
|||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS |
$ |
(29.4 |
) |
$ |
46.7 |
$ |
29.2 |
$ |
74.3 |
$ |
111.6 |
||||||||
|
EARNINGS (LOSS) PER SHARE |
|||||||||||||||||||
|
Basic |
$ |
(0.39 |
) |
$ |
0.62 |
$ |
0.39 |
$ |
0.99 |
$ |
1.49 |
||||||||
|
Diluted |
$ |
(0.39 |
) |
$ |
0.61 |
$ |
0.38 |
$ |
0.98 |
$ |
1.48 |
||||||||
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|||||||||||||||||||
|
Basic |
74.8 |
75.2 |
75.2 |
75.1 |
75.0 |
||||||||||||||
|
Diluted |
74.8 |
76.4 |
76.0 |
75.6 |
75.6 |
||||||||||||||
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(In millions) |
|
As of |
||||||||||||||
|
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
||||||||||
|
ASSETS |
||||||||||||||
|
CURRENT ASSETS |
||||||||||||||
|
Cash and cash equivalents |
$ |
787.3 |
$ |
822.5 |
$ |
724.1 |
$ |
406.0 |
$ |
553.5 |
||||
|
Restricted cash |
18.0 |
21.5 |
24.4 |
18.2 |
23.8 |
|||||||||
|
Short-term investments |
— |
— |
— |
220.0 |
— |
|||||||||
|
Accounts receivable, net |
473.4 |
393.4 |
449.1 |
535.5 |
544.6 |
|||||||||
|
Other current assets |
168.7 |
158.1 |
148.6 |
162.9 |
159.0 |
|||||||||
|
Total current assets |
$ |
1,447.4 |
$ |
1,395.5 |
$ |
1,346.2 |
$ |
1,342.6 |
$ |
1,280.9 |
||||
|
PROPERTY AND EQUIPMENT, NET |
1,073.7 |
1,015.5 |
977.2 |
953.6 |
931.7 |
|||||||||
|
LONG-TERM NOTES RECEIVABLE FROM ARO |
268.0 |
261.0 |
254.0 |
246.9 |
264.5 |
|||||||||
|
INVESTMENT IN ARO |
113.7 |
114.4 |
111.1 |
102.6 |
99.6 |
|||||||||
|
OTHER ASSETS |
185.6 |
164.8 |
171.8 |
175.5 |
184.1 |
|||||||||
|
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
|||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||
|
CURRENT LIABILITIES |
||||||||||||||
|
Accounts payable – trade |
$ |
364.2 |
$ |
324.1 |
$ |
256.5 |
$ |
256.6 |
$ |
287.0 |
||||
|
Accrued liabilities and other |
294.7 |
267.7 |
247.9 |
262.5 |
260.1 |
|||||||||
|
Total current liabilities |
$ |
658.9 |
$ |
591.8 |
$ |
504.4 |
$ |
519.1 |
$ |
547.1 |
||||
|
LONG-TERM DEBT |
681.9 |
542.8 |
542.4 |
541.8 |
545.7 |
|||||||||
|
OTHER LIABILITIES |
481.5 |
464.6 |
515.6 |
523.2 |
511.0 |
|||||||||
|
TOTAL LIABILITIES |
1,822.3 |
1,599.2 |
1,562.4 |
1,584.1 |
1,603.8 |
|||||||||
|
TOTAL EQUITY |
1,266.1 |
1,352.0 |
1,297.9 |
1,237.1 |
1,157.0 |
|||||||||
|
$ |
3,088.4 |
$ |
2,951.2 |
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
|||||
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
Six Months Ended June 30, |
|||||||
|
2023 |
2022 |
||||||
|
OPERATING ACTIVITIES |
|||||||
|
Net income |
$ |
21.3 |
$ |
73.0 |
|||
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|||||||
|
Depreciation expense |
47.8 |
44.8 |
|||||
|
Amortization |
— |
4.0 |
|||||
|
Loss on extinguishment of debt |
29.2 |
— |
|||||
|
Gain on asset disposals |
(27.9 |
) |
(137.6 |
) |
|||
|
Accretion of discount on notes receivable from ARO |
(14.0 |
) |
(15.4 |
) |
|||
|
Share-based compensation expense |
12.7 |
6.9 |
|||||
|
Deferred income tax expense |
7.1 |
6.7 |
|||||
|
Equity in earnings of ARO |
(2.6 |
) |
(13.0 |
) |
|||
|
Net periodic pension and retiree medical income |
(0.2 |
) |
(8.1 |
) |
|||
|
Loss on impairment |
— |
34.5 |
|||||
|
Other |
2.7 |
1.2 |
|||||
|
Changes in contract liabilities |
(7.5 |
) |
20.9 |
||||
|
Changes in deferred costs |
(6.9 |
) |
(49.5 |
) |
|||
|
Changes in other operating assets and liabilities |
60.9 |
(82.4 |
) |
||||
|
Net cash provided by (used in) operating activities |
$ |
122.6 |
$ |
(114.0 |
) |
||
|
INVESTING ACTIVITIES |
|||||||
|
Additions to property and equipment |
$ |
(127.3 |
) |
$ |
(99.6 |
) |
|
|
Net proceeds from disposition of assets |
29.1 |
146.5 |
|||||
|
Net cash provided by (used in) investing activities |
$ |
(98.2 |
) |
$ |
46.9 |
||
|
FINANCING ACTIVITIES |
|||||||
|
Issuance of Second Lien Notes |
$ |
700.0 |
$ |
— |
|||
|
Redemption of First Lien Notes |
(571.8 |
) |
— |
||||
|
Payments for share repurchases |
(64.4 |
) |
— |
||||
|
Debt issuance costs |
(31.0 |
) |
— |
||||
|
Other |
(0.4 |
) |
(0.2 |
) |
|||
|
Net cash provided by (used in) financing activities |
$ |
32.4 |
$ |
(0.2 |
) |
||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
56.8 |
$ |
(67.3 |
) |
||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
748.5 |
644.6 |
|||||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
805.3 |
$ |
577.3 |
|||
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
Three Months Ended |
||||||||||||||||||||
|
June 30, 2023 |
March 31, 2023 |
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
||||||||||||||||
|
OPERATING ACTIVITIES |
||||||||||||||||||||
|
Net income (loss) |
$ |
(27.3 |
) |
$ |
48.6 |
$ |
31.1 |
$ |
77.7 |
$ |
112.8 |
|||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||||||||||||||
|
Loss on extinguishment of debt |
29.2 |
— |
— |
— |
— |
|||||||||||||||
|
Gain on asset disposals |
(27.8 |
) |
(0.1 |
) |
(3.5 |
) |
(0.1 |
) |
(135.1 |
) |
||||||||||
|
Depreciation expense |
24.5 |
23.3 |
23.8 |
22.6 |
22.3 |
|||||||||||||||
|
Amortization |
— |
— |
2.0 |
2.1 |
2.0 |
|||||||||||||||
|
Accretion of discount on notes receivable from ARO |
(7.0 |
) |
(7.0 |
) |
(7.1 |
) |
(22.4 |
) |
(7.7 |
) |
||||||||||
|
Share-based compensation expense |
7.0 |
5.7 |
5.9 |
4.6 |
3.5 |
|||||||||||||||
|
Deferred income tax expense |
2.5 |
4.6 |
0.8 |
0.4 |
7.3 |
|||||||||||||||
|
Equity in losses (earnings) of ARO |
0.7 |
(3.3 |
) |
(8.6 |
) |
(2.9 |
) |
(8.7 |
) |
|||||||||||
|
Net periodic pension and retiree medical income |
(0.1 |
) |
(0.1 |
) |
(4.3 |
) |
(4.0 |
) |
(4.1 |
) |
||||||||||
|
Loss on impairment |
— |
— |
— |
— |
34.5 |
|||||||||||||||
|
Other |
2.2 |
0.5 |
(1.6 |
) |
0.3 |
0.7 |
||||||||||||||
|
Changes in contract liabilities |
13.3 |
(20.8 |
) |
3.6 |
38.0 |
11.4 |
||||||||||||||
|
Changes in deferred costs |
(7.4 |
) |
0.5 |
8.8 |
1.8 |
(39.4 |
) |
|||||||||||||
|
Changes in other operating assets and liabilities |
(38.9 |
) |
99.8 |
103.8 |
(31.8 |
) |
(114.3 |
) |
||||||||||||
|
Net cash provided by (used in) operating activities |
$ |
(29.1 |
) |
$ |
151.7 |
$ |
154.7 |
$ |
86.3 |
$ |
(114.8 |
) |
||||||||
|
INVESTING ACTIVITIES |
||||||||||||||||||||
|
Additions to property and equipment |
$ |
(71.0 |
) |
$ |
(56.3 |
) |
$ |
(53.9 |
) |
$ |
(53.5 |
) |
$ |
(61.1 |
) |
|||||
|
Net proceeds from disposition of assets |
29.0 |
0.1 |
3.5 |
0.3 |
145.2 |
|||||||||||||||
|
Purchases of short-term investments |
— |
— |
— |
(220.0 |
) |
— |
||||||||||||||
|
Maturities of short-term investments |
— |
— |
220.0 |
— |
— |
|||||||||||||||
|
Repayments of note receivable from ARO |
— |
— |
— |
40.0 |
— |
|||||||||||||||
|
Net cash provided by (used in) investing activities |
$ |
(42.0 |
) |
$ |
(56.2 |
) |
$ |
169.6 |
$ |
(233.2 |
) |
$ |
84.1 |
|||||||
|
FINANCING ACTIVITIES |
||||||||||||||||||||
|
Issuance of Second Lien Notes |
$ |
700.0 |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||||
|
Redemption of First Lien Notes |
(571.8 |
) |
— |
— |
— |
— |
||||||||||||||
|
Payments for share repurchases |
(64.4 |
) |
— |
— |
— |
— |
||||||||||||||
|
Debt issuance costs |
(31.0 |
) |
— |
— |
(3.9 |
) |
— |
|||||||||||||
|
Other |
(0.4 |
) |
— |
— |
(2.3 |
) |
(0.2 |
) |
||||||||||||
|
Net cash provided by (used in) financing activities |
$ |
32.4 |
$ |
— |
$ |
— |
$ |
(6.2 |
) |
$ |
(0.2 |
) |
||||||||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(38.7 |
) |
$ |
95.5 |
$ |
324.3 |
$ |
(153.1 |
) |
$ |
(30.9 |
) |
|||||||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
844.0 |
748.5 |
424.2 |
577.3 |
608.2 |
|||||||||||||||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
805.3 |
$ |
844.0 |
$ |
748.5 |
$ |
424.2 |
$ |
577.3 |
||||||||||
Contacts
Investor & Media Contacts:
Darin Gibbins
Vice President – Investor Relations and Treasurer
+1-713-979-4623
Tim Richardson
Director – Investor Relations
+1-713-979-4619
