HAMILTON, Bermuda–(BUSINESS WIRE)–Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) today reported third quarter 2024 results.
President and Chief Executive Officer Anton Dibowitz said, “We delivered strong operating performance and financial results in the third quarter, including solid free cash flow generation. Our fleetwide revenue efficiency of 98% included a full quarter of operations for VALARIS DS-7 following its contract startup in the second quarter. Building on our track record of safe, reliable and efficient operations, we are proud to be recognized for the second consecutive year by the Center for Offshore Safety with its Safety Leadership Award for the development of our Restricted Zone Analysis tool.”
Dibowitz added, “We maintain our conviction in the strength and duration of this upcycle and believe Valaris is well positioned to drive long-term value creation. While we have seen some customer demand deferred, the outlook for 2026 and beyond remains robust. We continue to focus on securing attractive, long-term work for our available rig fleet to support our earnings and cash flow growth.”
Dibowitz concluded, “As expected, our free cash flow profile improved relative to the first half of the year, and we repurchased $100 million of shares during the third quarter. We remain committed to returning all future free cash flow to shareholders unless there is a better or more value accretive use for it.”
Financial and Operational Highlights
- Net income of $63 million and Adjusted EBITDA of $150 million;
- Revenue efficiency of 98%;
- Generated $193 million of cash from operating activities and $111 million of free cash flow;
- Repurchased $100 million of shares;
- Recognized by the Center for Offshore Safety with its 2024 Safety Leadership Award for development of the Restricted Zone Analysis tool;
- Full quarter of operations for drillship VALARIS DS-7 following completion of its reactivation and contract startup in the second quarter; and
- Three-year contract extension for jackup VALARIS 118 awarded in October, adding $168 million of contract backlog.
Third Quarter Review
Net income decreased to $63 million from $151 million in the second quarter 2024. Net income included tax expense of $24 million compared to a tax benefit of $30 million in the second quarter. Adjusted EBITDA increased to $150 million from $139 million in the second quarter primarily due to a full quarter of operations for VALARIS DS-7 following its contract startup and higher average daily revenue for the floater fleet. These items were partially offset by lower utilization for VALARIS DPS-5 and DS-10 as well as out of service time and repair costs for VALARIS 249 due to leg repairs.
Revenues increased to $643 million from $610 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $598 million from $573 million in the second quarter primarily due to an increase in operating days and amortized mobilization revenue associated with VALARIS 247, a full quarter of operations for VALARIS DS-7 and higher average daily revenue for the floater fleet. These items were partially offset by lower utilization for VALARIS DPS-5 and DS-10 as well as out of service time for VALARIS 249.
Contract drilling expense increased to $462 million from $439 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense increased to $423 million from $407 million in the second quarter primarily due to an increase in amortized mobilization expense associated with VALARIS 247 and higher costs associated with a full quarter of operations for VALARIS DS-7. This was partially offset by lower reactivation expense and lower personnel costs for VALARIS DS-17 associated with a change in operating location.
Depreciation expense increased to $32 million from $30 million in the second quarter 2024 primarily due to new assets placed in service for certain rigs following reactivation projects and capital upgrades. General and administrative expense decreased to $31 million from $33 million in the second quarter 2024 primarily due to lower professional fees.
Other expense was $8 million compared to other income of $12 million in the second quarter 2024 primarily due to a decrease in interest income and foreign currency exchange losses compared to gains in the second quarter.
Tax expense was $24 million compared to tax benefit of $30 million in the second quarter 2024. The third quarter tax provision included an immaterial discrete tax expense and the second quarter tax provision included $64 million of discrete tax benefit, which were primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. Adjusted for discrete tax items, tax expense decreased to $24 million from $34 million in the second quarter.
Capital expenditures of $82 million decreased from $110 million in the second quarter 2024 primarily due to lower maintenance and upgrade capital expenditures.
Cash and cash equivalents and restricted cash decreased to $392 million as of September 30, 2024, from $410 million as of June 30, 2024. The decrease was primarily due to share repurchases and capital expenditures, partially offset by cash flow from operations.
Third Quarter Segment Review
Floaters
Floater revenues increased to $389 million from $384 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $373 million from $370 million in the second quarter. The increase was primarily due to more operating days for VALARIS DS-7, which commenced a contract in the second quarter, and higher average daily revenue for the floater fleet mostly due to VALARIS DS-16, which started a new higher day rate contract late in the second quarter. This was partially offset by fewer operating days for VALARIS DPS-5 and DS-10, which completed their contracts in the third quarter.
Contract drilling expense decreased to $248 million from $257 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense decreased to $235 million from $245 million in the second quarter. The decrease was primarily due to lower reactivation expense as VALARIS DS-7 returned to work in the second quarter and lower personnel expense for VALARIS DS-17 associated with a change in operating location. This was partially offset by higher costs associated with a full quarter of operations for VALARIS DS-7.
Jackups
Jackup revenues increased to $214 million from $186 million in the second quarter 2024. Excluding reimbursable items, revenues increased to $193 million from $167 million in the second quarter primarily due to operating days and amortized mobilization revenue associated with VALARIS 247, which commenced a contract offshore Australia in July following its mobilization from the UK. This was partially offset by out of service time for leg repairs on VALARIS 249.
Contract drilling expense increased to $157 million from $123 million in the second quarter 2024. Excluding reimbursable items, contract drilling expense increased to $137 million from $108 million in the second quarter primarily due to an increase in amortized mobilization expense associated with VALARIS 247 and repair costs for VALARIS 249.
ARO Drilling
Revenues decreased to $114 million from $124 million in the second quarter 2024 primarily due to the contract termination for VALARIS 143 in the second quarter and contract suspensions for VALARIS 147 and 148 during the third quarter. Subsequently, ARO elected to terminate these suspended contracts in October. Contract drilling expense of $94 million was in line with the second quarter.
Other
Revenues of $40 million were in line with the second quarter 2024. Contract drilling expense increased to $22 million from $20 million in the second quarter.
|
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Three Months Ended |
||||||||||||||||||||||||||||||||||||||||||||
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|
(Unaudited) |
||||||||||||||||||||||||||||||||||||||||||||
|
|
Floaters |
|
Jackups |
|
ARO (1) |
|
Other |
|
Reconciling Items (1)(2) |
|
Consolidated Total |
||||||||||||||||||||||||||||||||||
|
(in millions of $, except %) |
Q3 2024 |
Q2 2024 |
Chg |
|
Q3 2024 |
Q2 2024 |
Chg |
|
Q3 2024 |
Q2 2024 |
Chg |
|
Q3 2024 |
Q2 2024 |
Chg |
|
Q3 2024 |
Q2 2024 |
|
Q3 2024 |
Q2 2024 |
Chg |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Revenues |
$ |
389.0 |
$ |
383.9 |
1 |
% |
|
$ |
213.7 |
$ |
185.8 |
15 |
% |
|
$ |
113.7 |
|
$ |
124.2 |
|
(8 |
)% |
|
$ |
40.4 |
$ |
40.4 |
— |
% |
|
$ |
(113.7 |
) |
$ |
(124.2 |
) |
|
$ |
643.1 |
|
$ |
610.1 |
|
5 |
% |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Contract drilling |
|
247.7 |
|
257.4 |
4 |
% |
|
|
156.7 |
|
123.2 |
(27 |
)% |
|
|
93.8 |
|
|
94.1 |
|
— |
% |
|
|
22.1 |
|
19.6 |
(13 |
)% |
|
|
(58.2 |
) |
|
(55.6 |
) |
|
|
462.1 |
|
|
438.7 |
|
(5 |
)% |
|
Loss on impairment |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
28.4 |
|
|
— |
|
nm |
|
|
— |
|
— |
— |
% |
|
|
(28.4 |
) |
|
— |
|
|
|
— |
|
|
— |
|
— |
% |
|
|
Depreciation |
|
14.8 |
|
14.1 |
(5 |
)% |
|
|
11.4 |
|
10.9 |
(5 |
)% |
|
|
21.1 |
|
|
19.7 |
|
(7 |
)% |
|
|
2.9 |
|
2.5 |
(16 |
)% |
|
|
(18.5 |
) |
|
(17.5 |
) |
|
|
31.7 |
|
|
29.7 |
|
(7 |
)% |
|
General and admin. |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
4.9 |
|
|
5.5 |
|
11 |
% |
|
|
— |
|
— |
— |
% |
|
|
25.7 |
|
|
27.0 |
|
|
|
30.6 |
|
|
32.5 |
|
6 |
% |
|
Equity in losses of ARO |
|
— |
|
— |
— |
% |
|
|
— |
|
— |
— |
% |
|
|
— |
|
|
— |
|
— |
% |
|
|
— |
|
— |
— |
% |
|
|
(23.8 |
) |
|
(0.3 |
) |
|
|
(23.8 |
) |
|
(0.3 |
) |
nm |
|
|
Operating income (loss) |
$ |
126.5 |
$ |
112.4 |
13 |
% |
|
$ |
45.6 |
$ |
51.7 |
(12 |
)% |
|
$ |
(34.5 |
) |
$ |
4.9 |
|
nm |
|
$ |
15.4 |
$ |
18.3 |
(16 |
)% |
|
$ |
(58.1 |
) |
$ |
(78.4 |
) |
|
$ |
94.9 |
|
$ |
108.9 |
|
(13 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Net income (loss) |
$ |
126.8 |
$ |
114.1 |
11 |
% |
|
$ |
45.7 |
$ |
52.8 |
(13 |
)% |
|
$ |
(54.0 |
) |
$ |
(6.7 |
) |
nm |
|
$ |
16.3 |
$ |
18.3 |
(11 |
)% |
|
$ |
(71.9 |
) |
$ |
(27.7 |
) |
|
$ |
62.9 |
|
$ |
150.8 |
|
(58 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Adjusted EBITDA |
$ |
141.3 |
$ |
126.4 |
12 |
% |
|
$ |
57.0 |
$ |
62.6 |
(9 |
)% |
|
$ |
15.0 |
|
$ |
24.6 |
|
(39 |
)% |
|
$ |
18.3 |
$ |
20.8 |
(12 |
)% |
|
$ |
(81.2 |
) |
$ |
(95.5 |
) |
|
$ |
150.4 |
|
$ |
138.9 |
|
8 |
% |
|
Adjusted EBITDAR |
$ |
143.2 |
$ |
137.3 |
4 |
% |
|
$ |
57.0 |
$ |
62.6 |
(9 |
)% |
|
$ |
15.0 |
|
$ |
24.6 |
|
(39 |
)% |
|
$ |
18.3 |
$ |
20.8 |
(12 |
)% |
|
$ |
(81.2 |
) |
$ |
(95.5 |
) |
|
$ |
152.3 |
|
$ |
149.8 |
|
2 |
% |
|
nm – Not meaningful |
|
|
(1) |
The full operating results included above for ARO are not included within our consolidated results and thus deducted under “Reconciling Items” and replaced with our equity in earnings of ARO. |
|
(2) |
Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in “Reconciling Items.” Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in “Reconciling Items.” |
As previously announced, Valaris will hold its third quarter 2024 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Thursday, October 31, 2024. An updated investor presentation will be available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.
Forward-Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company (“ARO”) newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts, including for VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission’s website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(In millions, except per share amounts) |
|
(Unaudited) |
|
Three Months Ended |
|||||||||||||||||||
|
|
Sep 30, 2024 |
|
Jun 30, 2024 |
|
Mar 31, 2024 |
|
Dec 31, 2023 |
|
Sep 30, 2023 |
||||||||||
|
OPERATING REVENUES |
$ |
643.1 |
|
|
$ |
610.1 |
|
|
$ |
525.0 |
|
|
$ |
483.8 |
|
|
$ |
455.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
|
Contract drilling (exclusive of depreciation) |
|
462.1 |
|
|
|
438.7 |
|
|
|
444.8 |
|
|
|
402.0 |
|
|
|
390.9 |
|
|
Depreciation |
|
31.7 |
|
|
|
29.7 |
|
|
|
26.8 |
|
|
|
27.5 |
|
|
|
25.8 |
|
|
General and administrative |
|
30.6 |
|
|
|
32.5 |
|
|
|
26.5 |
|
|
|
24.3 |
|
|
|
24.2 |
|
|
Total operating expenses |
|
524.4 |
|
|
|
500.9 |
|
|
|
498.1 |
|
|
|
453.8 |
|
|
|
440.9 |
|
|
EQUITY IN EARNINGS (LOSSES) OF ARO |
|
(23.8 |
) |
|
|
(0.3 |
) |
|
|
2.4 |
|
|
|
8.3 |
|
|
|
2.4 |
|
|
OPERATING INCOME |
|
94.9 |
|
|
|
108.9 |
|
|
|
29.3 |
|
|
|
38.3 |
|
|
|
16.6 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
|
Interest income |
|
17.5 |
|
|
|
31.0 |
|
|
|
21.0 |
|
|
|
27.2 |
|
|
|
26.6 |
|
|
Interest expense, net |
|
(22.4 |
) |
|
|
(22.6 |
) |
|
|
(17.7 |
) |
|
|
(21.7 |
) |
|
|
(19.4 |
) |
|
Other, net |
|
(2.8 |
) |
|
|
3.5 |
|
|
|
5.8 |
|
|
|
(5.5 |
) |
|
|
3.9 |
|
|
|
|
(7.7 |
) |
|
|
11.9 |
|
|
|
9.1 |
|
|
|
— |
|
|
|
11.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
INCOME BEFORE INCOME TAXES |
|
87.2 |
|
|
|
120.8 |
|
|
|
38.4 |
|
|
|
38.3 |
|
|
|
27.7 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
24.3 |
|
|
|
(30.0 |
) |
|
|
12.9 |
|
|
|
(790.2 |
) |
|
|
10.7 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME |
|
62.9 |
|
|
|
150.8 |
|
|
|
25.5 |
|
|
|
828.5 |
|
|
|
17.0 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
1.7 |
|
|
|
(1.2 |
) |
|
|
— |
|
|
|
6.7 |
|
|
|
(4.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NET INCOME ATTRIBUTABLE TO VALARIS |
$ |
64.6 |
|
|
$ |
149.6 |
|
|
$ |
25.5 |
|
|
$ |
835.2 |
|
|
$ |
12.9 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
$ |
0.89 |
|
|
$ |
2.07 |
|
|
$ |
0.35 |
|
|
$ |
11.47 |
|
|
$ |
0.18 |
|
|
Diluted |
$ |
0.88 |
|
|
$ |
2.03 |
|
|
$ |
0.35 |
|
|
$ |
11.30 |
|
|
$ |
0.17 |
|
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
72.4 |
|
|
|
72.4 |
|
|
|
72.4 |
|
|
|
72.8 |
|
|
|
73.7 |
|
|
Diluted |
|
73.2 |
|
|
|
73.7 |
|
|
|
73.6 |
|
|
|
73.9 |
|
|
|
74.8 |
|
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(In millions) |
|
(Unaudited) |
|
|
As of |
|||||||||
|
|
Sep 30, 2024 |
Jun 30, 2024 |
Mar 31, 2024 |
Dec 31, 2023 |
Sep 30, 2023 |
|||||
|
ASSETS |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
CURRENT ASSETS |
|
|
|
|
|
|||||
|
Cash and cash equivalents |
$ |
379.3 |
$ |
398.3 |
$ |
494.1 |
$ |
620.5 |
$ |
1,041.1 |
|
Restricted cash |
|
12.9 |
|
12.0 |
|
15.0 |
|
15.2 |
|
16.2 |
|
Accounts receivable, net |
|
555.8 |
|
631.7 |
|
510.9 |
|
459.3 |
|
492.4 |
|
Other current assets |
|
163.5 |
|
182.6 |
|
177.6 |
|
177.2 |
|
178.7 |
|
Total current assets |
$ |
1,111.5 |
$ |
1,224.6 |
$ |
1,197.6 |
$ |
1,272.2 |
$ |
1,728.4 |
|
|
|
|
|
|
|
|||||
|
PROPERTY AND EQUIPMENT, NET |
|
1,842.7 |
|
1,809.4 |
|
1,732.3 |
|
1,633.8 |
|
1,159.9 |
|
|
|
|
|
|
|
|||||
|
LONG-TERM NOTES RECEIVABLE FROM ARO |
|
265.4 |
|
259.2 |
|
289.3 |
|
282.3 |
|
275.2 |
|
|
|
|
|
|
|
|||||
|
INVESTMENT IN ARO |
|
102.7 |
|
126.5 |
|
126.8 |
|
124.4 |
|
116.1 |
|
|
|
|
|
|
|
|||||
|
DEFERRED TAX ASSETS |
|
837.0 |
|
841.1 |
|
854.8 |
|
855.1 |
|
53.8 |
|
|
|
|
|
|
|
|||||
|
OTHER ASSETS |
|
174.1 |
|
154.8 |
|
153.6 |
|
154.4 |
|
151.5 |
|
|
|
|
|
|
|
|||||
|
|
$ |
4,333.4 |
$ |
4,415.6 |
$ |
4,354.4 |
$ |
4,322.2 |
$ |
3,484.9 |
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
CURRENT LIABILITIES |
|
|
|
|
|
|||||
|
Accounts payable – trade |
$ |
303.7 |
$ |
347.0 |
$ |
394.2 |
$ |
400.1 |
$ |
376.4 |
|
Accrued liabilities and other |
|
388.6 |
|
360.6 |
|
366.5 |
|
344.2 |
|
346.6 |
|
Total current liabilities |
$ |
692.3 |
$ |
707.6 |
$ |
760.7 |
$ |
744.3 |
$ |
723.0 |
|
|
|
|
|
|
|
|||||
|
LONG-TERM DEBT |
|
1,081.8 |
|
1,081.0 |
|
1,080.1 |
|
1,079.3 |
|
1,079.4 |
|
|
|
|
|
|
|
|||||
|
DEFERRED TAX LIABILITIES |
|
31.1 |
|
31.2 |
|
31.6 |
|
29.9 |
|
17.1 |
|
|
|
|
|
|
|
|||||
|
OTHER LIABILITIES |
|
404.4 |
|
408.4 |
|
451.7 |
|
471.7 |
|
465.4 |
|
|
|
|
|
|
|
|||||
|
TOTAL LIABILITIES |
|
2,209.6 |
|
2,228.2 |
|
2,324.1 |
|
2,325.2 |
|
2,284.9 |
|
|
|
|
|
|
|
|||||
|
TOTAL EQUITY |
|
2,123.8 |
|
2,187.4 |
|
2,030.3 |
|
1,997.0 |
|
1,200.0 |
|
|
|
|
|
|
|
|||||
|
|
$ |
4,333.4 |
$ |
4,415.6 |
$ |
4,354.4 |
$ |
4,322.2 |
$ |
3,484.9 |
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
(Unaudited) |
|
|
Nine Months Ended September 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
OPERATING ACTIVITIES |
|
|
|
||||
|
Net income |
$ |
239.2 |
|
|
$ |
38.3 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation expense |
|
88.2 |
|
|
|
73.6 |
|
|
Accretion of discount on notes receivable from ARO |
|
(33.8 |
) |
|
|
(21.2 |
) |
|
Share-based compensation expense |
|
22.4 |
|
|
|
19.5 |
|
|
Equity in losses (earnings) of ARO |
|
21.7 |
|
|
|
(5.0 |
) |
|
Deferred income tax expense |
|
19.3 |
|
|
|
2.3 |
|
|
Net (gain) loss on sale of property |
|
0.3 |
|
|
|
(27.9 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
|
29.2 |
|
|
Changes in contract liabilities |
|
(13.5 |
) |
|
|
(3.9 |
) |
|
Changes in deferred costs |
|
32.6 |
|
|
|
(29.3 |
) |
|
Other |
|
5.0 |
|
|
|
5.2 |
|
|
Changes in other operating assets and liabilities |
|
(131.0 |
) |
|
|
94.5 |
|
|
Contributions to pension plans and other post-retirement benefits |
|
(19.6 |
) |
|
|
(4.5 |
) |
|
Net cash provided by operating activities |
$ |
230.8 |
|
|
$ |
170.8 |
|
|
|
|
|
|
||||
|
INVESTING ACTIVITIES |
|
|
|
||||
|
Additions to property and equipment |
$ |
(343.4 |
) |
|
$ |
(233.1 |
) |
|
Net proceeds from disposition of assets |
|
0.2 |
|
|
|
29.2 |
|
|
Net cash used in investing activities |
$ |
(343.2 |
) |
|
$ |
(203.9 |
) |
|
|
|
|
|
||||
|
FINANCING ACTIVITIES |
|
|
|
||||
|
Payments for share repurchases |
$ |
(101.4 |
) |
|
$ |
(147.4 |
) |
|
Payments related to tax withholdings for share-based awards |
|
(29.7 |
) |
|
|
(5.2 |
) |
|
Issuance of Second Lien Notes |
|
— |
|
|
|
1,103.0 |
|
|
Redemption of First Lien Notes |
|
— |
|
|
|
(571.8 |
) |
|
Debt issuance costs |
|
— |
|
|
|
(36.7 |
) |
|
Net cash provided by (used in) financing activities |
$ |
(131.1 |
) |
|
$ |
341.9 |
|
|
|
|
|
|
||||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(243.5 |
) |
|
$ |
308.8 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
635.7 |
|
|
|
748.5 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
392.2 |
|
|
$ |
1,057.3 |
|
|
VALARIS LIMITED AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(In millions) |
|
(Unaudited) |
|
|
Three Months Ended |
||||||||||||||
|
|
Sep 30, 2024 |
Jun 30, 2024 |
Mar 31, 2024 |
Dec 31, 2023 |
Sep 30, 2023 |
||||||||||
|
OPERATING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Net income |
$ |
62.9 |
|
$ |
150.8 |
|
$ |
25.5 |
|
$ |
828.5 |
|
$ |
17.0 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||||||||||
|
Depreciation expense |
|
31.7 |
|
|
29.7 |
|
|
26.8 |
|
|
27.5 |
|
|
25.8 |
|
|
Equity in losses (earnings) of ARO |
|
23.8 |
|
|
0.3 |
|
|
(2.4 |
) |
|
(8.3 |
) |
|
(2.4 |
) |
|
Share-based compensation expense |
|
7.0 |
|
|
7.4 |
|
|
8.0 |
|
|
7.8 |
|
|
6.8 |
|
|
Accretion of discount on notes receivable from ARO |
|
(6.2 |
) |
|
(20.6 |
) |
|
(7.0 |
) |
|
(7.1 |
) |
|
(7.2 |
) |
|
Deferred income tax expense (benefit) |
|
3.8 |
|
|
13.5 |
|
|
2.0 |
|
|
(788.7 |
) |
|
(4.8 |
) |
|
Net (gain) loss on sale of property |
|
0.2 |
|
|
— |
|
|
0.1 |
|
|
(0.7 |
) |
|
— |
|
|
Changes in contract liabilities |
|
11.3 |
|
|
(17.8 |
) |
|
(7.0 |
) |
|
8.8 |
|
|
3.6 |
|
|
Changes in deferred costs |
|
33.4 |
|
|
(3.0 |
) |
|
2.2 |
|
|
3.2 |
|
|
(22.4 |
) |
|
Other |
|
0.8 |
|
|
2.4 |
|
|
1.8 |
|
|
0.6 |
|
|
2.7 |
|
|
Changes in other operating assets and liabilities |
|
37.8 |
|
|
(147.5 |
) |
|
(21.3 |
) |
|
27.3 |
|
|
31.0 |
|
|
Contributions to pension plans and other post-retirement benefits |
|
(13.5 |
) |
|
(3.7 |
) |
|
(2.4 |
) |
|
(2.2 |
) |
|
(1.9 |
) |
|
Net cash provided by operating activities |
$ |
193.0 |
|
$ |
11.5 |
|
$ |
26.3 |
|
$ |
96.7 |
|
$ |
48.2 |
|
|
|
|
|
|
|
|
||||||||||
|
INVESTING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Additions to property and equipment |
$ |
(81.9 |
) |
$ |
(110.2 |
) |
$ |
(151.3 |
) |
$ |
(463.0 |
) |
$ |
(105.8 |
) |
|
Net proceeds from disposition of assets |
|
0.1 |
|
|
0.1 |
|
|
— |
|
|
1.1 |
|
|
0.1 |
|
|
Net cash used in investing activities |
$ |
(81.8 |
) |
$ |
(110.1 |
) |
$ |
(151.3 |
) |
$ |
(461.9 |
) |
$ |
(105.7 |
) |
|
|
|
|
|
|
|
||||||||||
|
FINANCING ACTIVITIES |
|
|
|
|
|
||||||||||
|
Payments for share repurchases |
$ |
(100.0 |
) |
$ |
— |
|
$ |
(1.4 |
) |
$ |
(51.2 |
) |
$ |
(83.0 |
) |
|
Payments for tax withholdings for share-based awards |
|
(29.3 |
) |
|
(0.2 |
) |
|
(0.2 |
) |
|
(0.2 |
) |
|
(4.8 |
) |
|
Debt issuance costs |
|
— |
|
|
— |
|
|
— |
|
|
(1.9 |
) |
|
(5.7 |
) |
|
Issuance of Second Lien Notes |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
403.0 |
|
|
Other |
|
— |
|
|
— |
|
|
— |
|
|
(3.1 |
) |
|
— |
|
|
Net cash provided by (used in) financing activities |
$ |
(129.3 |
) |
$ |
(0.2 |
) |
$ |
(1.6 |
) |
$ |
(56.4 |
) |
$ |
309.5 |
|
|
|
|
|
|
|
|
||||||||||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
(18.1 |
) |
$ |
(98.8 |
) |
$ |
(126.6 |
) |
$ |
(421.6 |
) |
$ |
252.0 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
410.3 |
|
|
509.1 |
|
|
635.7 |
|
|
1,057.3 |
|
|
805.3 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
392.2 |
|
$ |
410.3 |
|
$ |
509.1 |
|
$ |
635.7 |
|
$ |
1,057.3 |
|
Contacts
Investor & Media Contacts:
Nick Georgas
Vice President – Treasurer and Investor Relations
+1-713-979-4632
Tim Richardson
Director – Investor Relations
+1-713-979-4619
