HAMILTON, Bermuda--(BUSINESS WIRE)--Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported fourth quarter 2022 results.
President and Chief Executive Officer Anton Dibowitz said, “I would like to thank the entire Valaris team for continuing to deliver excellent operational performance, achieving revenue efficiency of 98% during the fourth quarter. This strong operational performance has translated into continued contracting success, and we were awarded new contracts and extensions with associated contract backlog of more than $400 million during the fourth quarter.”
Dibowitz added, “Last year was an important year for Valaris as we laid the foundation for continued success during the unfolding industry upcycle. We reactivated four floaters, all of which returned to work largely on time and on budget. Reactivation of a fifth floater, VALARIS DS-17, is well underway and we are in advanced discussions for a multi-year opportunity for one of our stacked drillships that is expected to deliver meaningful returns. We remain intent on executing our strategy of being focused, value driven and responsible in our decision making and we believe that our strategy will drive increased earnings and significant free cash flow over time."
Financial and Operational Highlights
- Generated net income of $31 million, Adjusted EBITDA of $54 million and Adjusted EBITDAR of $75 million in the fourth quarter;
- Delivered revenue efficiency of 98% in the fourth quarter and 97% for the full-year 2022;
- Awarded new contracts and extensions with associated contract backlog of more than $400 million during the fourth quarter, including floater contracts offshore Brazil and Egypt as well as jackup contracts in the Middle East, the North Sea and the U.S. Gulf of Mexico; and
- Additional contracts awarded or extended in 2023 to date, with associated contract backlog of approximately $230 million, including a floater contract offshore West Africa and jackup contracts in the Middle East, Australia and Trinidad.
Fourth Quarter Review
Net income was $31 million compared to $78 million in the third quarter 2022. Adjusted EBITDA decreased to $54 million from $76 million in the third quarter. Adjusted EBITDAR decreased to $75 million from $94 million in the third quarter.
Revenues decreased to $434 million from $437 million in the third quarter 2022. Excluding reimbursable items, revenues decreased to $413 million from $416 million in the third quarter primarily due to lower utilization and lower average day rates for the harsh environment jackup fleet, partially offset by an increase in utilization for the floater fleet.
Contract drilling expense increased to $353 million from $337 million in the third quarter 2022. Excluding reimbursable items, contract drilling expense increased to $333 million from $316 million in the third quarter primarily due to an increase in operating days for the floater fleet and higher reactivation costs, which increased to $21 million from $18 million.
Depreciation expense increased marginally to $24 million from $23 million in the third quarter 2022. General and administrative expense increased to $24 million from $19 million in the third quarter 2022 primarily due to higher personnel costs and professional fees.
Other expense was less than $1 million compared to other income of $30 million in the third quarter 2022. Other expense included foreign currency exchange losses of $13 million as compared to gains of $10 million in the third quarter. Third quarter other income also included non-cash interest income of $15 million related to the write-off of the discount attributable to the $40 million of shareholder notes receivable repaid by ARO. These items were partially offset by a $3 million increase in interest income during the fourth quarter.
Tax expense was $10 million compared to $14 million in the third quarter 2022. The fourth quarter tax provision included $3 million of discrete tax benefit attributable to the resolution of prior period tax matters. The third quarter tax provision included $2 million of discrete tax expense primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years, partially offset by discrete tax benefits attributable to the resolution of other prior period tax matters. Adjusted for discrete items, tax expense increased to $13 million from $12 million in the third quarter.
Total liquidity, which includes cash and cash equivalents, restricted cash and short-term investments, increased to $748 million as of December 31, 2022, from $644 million as of September 30, 2022, primarily due to cash flow generated from operations, including changes in working capital, of which $55 million was a refund payment from the IRS related to the CARES Act that was received in the fourth quarter.
Capital expenditures of $54 million were in line with the third quarter 2022.
Fourth Quarter Segment Review
Floaters
Floater revenues increased to $211 million from $202 million in the third quarter 2022. Excluding reimbursable items, revenues increased to $203 million from $192 million in the third quarter. The increase was primarily due to higher revenue efficiency across the floater fleet and a full quarter of revenues for VALARIS DS-4 and DS-9, which commenced contracts early in the third quarter.
Contract drilling expense increased to $173 million from $161 million in the third quarter 2022. Excluding reimbursable items, contract drilling expense increased to $165 million from $151 million in the third quarter. The increase was primarily due to more operating days across the floater fleet and higher reactivation costs, mostly for VALARIS DS-17, which is expected to commence a contract later this year.
Jackups
Jackup revenues decreased to $182 million from $196 million in the third quarter 2022. Excluding reimbursable items, revenues decreased to $176 million from $190 million in the third quarter primarily due to VALARIS Stavanger completing its contract offshore Norway and idle time between contracts for VALARIS 123, 144 and 115. This was partially offset by more operating days for VALARIS 118 and 92 following a contract startup and a special periodic survey, respectively.
Contract drilling expense increased to $130 million from $128 million in the third quarter 2022. Excluding reimbursable items, contract drilling expense increased marginally to $124 million from $123 million in the third quarter.
ARO Drilling
Revenues increased to $120 million from $111 million in the third quarter 2022 primarily due to higher utilization as certain rigs returned to work following out of service periods for planned maintenance. Contract drilling expense decreased to $86 million from $90 million in the third quarter primarily due to higher planned maintenance costs in the third quarter.
Other
Revenues increased marginally to $41 million from $40 million in the third quarter 2022. Contract drilling expense of $18 million was in line with the third quarter.
|
Fourth Quarter |
|||||||||||||||||||||||||||||
|
Floaters |
|
Jackups |
|
ARO (1) |
|
Other |
|
Reconciling Items (1)(2) |
|
Consolidated Total |
|||||||||||||||||||
(in millions of $ except %) |
Q4 2022 |
Q3 2022 |
Chg |
|
Q4 2022 |
Q3 2022 |
Chg |
|
Q4 2022 |
Q3 2022 |
Chg |
|
Q4 2022 |
Q3 2022 |
Chg |
|
Q4 2022 |
Q3 2022 |
|
Q4 2022 |
Q3 2022 |
Chg |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues |
211.0 |
201.7 |
5 |
% |
|
181.8 |
195.9 |
(7 |
)% |
|
120.4 |
111.4 |
|
8 |
% |
|
40.8 |
39.6 |
3 |
% |
|
(120.4 |
) |
(111.4 |
) |
|
433.6 |
437.2 |
(1 |
)% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contract drilling |
172.6 |
160.5 |
(8 |
)% |
|
129.5 |
128.0 |
(1 |
)% |
|
85.5 |
90.0 |
|
5 |
% |
|
18.4 |
17.8 |
(3 |
)% |
|
(52.6 |
) |
(59.6 |
) |
|
353.4 |
336.7 |
(5 |
)% |
Depreciation |
12.9 |
12.6 |
(2 |
)% |
|
9.6 |
8.7 |
(10 |
)% |
|
16.1 |
15.4 |
|
(5 |
)% |
|
1.2 |
1.2 |
— |
% |
|
(16.0 |
) |
(15.3 |
) |
|
23.8 |
22.6 |
(5 |
)% |
General and admin. |
— |
— |
— |
% |
|
— |
— |
— |
% |
|
5.6 |
4.7 |
|
(19 |
)% |
|
— |
— |
— |
% |
|
18.3 |
|
14.5 |
|
|
23.9 |
19.2 |
(24 |
)% |
Equity in earnings of ARO |
— |
— |
— |
% |
|
— |
— |
— |
% |
|
— |
— |
|
— |
% |
|
— |
— |
— |
% |
|
8.6 |
|
2.9 |
|
|
8.6 |
2.9 |
197 |
% |
Operating income (loss) |
25.5 |
28.6 |
(11 |
)% |
|
42.7 |
59.2 |
(28 |
)% |
|
13.2 |
1.3 |
|
915 |
% |
|
21.2 |
20.6 |
3 |
% |
|
(61.5 |
) |
(48.1 |
) |
|
41.1 |
61.6 |
(33 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
26.6 |
28.6 |
(7 |
)% |
|
46.4 |
59.1 |
(21 |
)% |
|
10.7 |
(1.3 |
) |
nm |
|
21.2 |
20.7 |
2 |
% |
|
(73.8 |
) |
(29.4 |
) |
|
31.1 |
77.7 |
(60 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
37.5 |
40.7 |
(8 |
)% |
|
51.1 |
62.6 |
(18 |
)% |
|
29.3 |
16.7 |
|
75 |
% |
|
22.4 |
22.1 |
1 |
% |
|
(86.0 |
) |
(66.1 |
) |
|
54.3 |
76.0 |
(29 |
)% |
Adjusted EBITDAR |
58.1 |
58.5 |
(1 |
)% |
|
51.2 |
62.6 |
(18 |
)% |
|
29.3 |
16.7 |
|
75 |
% |
|
22.4 |
22.1 |
1 |
% |
|
(86.0 |
) |
(66.1 |
) |
|
75.0 |
93.8 |
(20 |
)% |
(1) |
The full operating results included above for ARO are not included within our consolidated results and thus deducted under "Reconciling Items" and replaced with our equity in earnings of ARO. |
(2) |
Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, those costs are included in “reconciling items.” Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in "reconciling items" |
As previously announced, Valaris will hold its fourth quarter 2022 earnings conference call at 9:00 a.m. CST (10:00 a.m. ET) on Tuesday, February 21, 2023. An updated investor presentation will be available on the Valaris website after the call.
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.
Forward-Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; performance of our joint ventures, including our joint venture with Saudi Aramco; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine); cybersecurity attacks and threats; the effect, impact, potential duration and other implications of COVID-19; future operations; increasing regulatory complexity; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract; downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds, and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels; increased scrutiny of our Environmental, Social and Governance practices, initiatives and reporting responsibilities; changes in customer strategy, including increased focus on renewable energy projects; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, construction, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the SEC's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In millions, except per share amounts) |
|
Three Months Ended |
||||||||||||||||||
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
||||||||||
OPERATING REVENUES |
$ |
433.6 |
|
|
$ |
437.2 |
|
|
$ |
413.3 |
|
|
$ |
318.4 |
|
|
$ |
305.5 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
||||||||||
Contract drilling (exclusive of depreciation) |
|
353.4 |
|
|
|
336.7 |
|
|
|
361.8 |
|
|
|
331.3 |
|
|
|
280.9 |
|
Loss on impairment |
|
— |
|
|
|
— |
|
|
|
34.5 |
|
|
|
— |
|
|
|
— |
|
Depreciation |
|
23.8 |
|
|
|
22.6 |
|
|
|
22.3 |
|
|
|
22.5 |
|
|
|
25.1 |
|
General and administrative |
|
23.9 |
|
|
|
19.2 |
|
|
|
19.0 |
|
|
|
18.8 |
|
|
|
18.3 |
|
Total operating expenses |
|
401.1 |
|
|
|
378.5 |
|
|
|
437.6 |
|
|
|
372.6 |
|
|
|
324.3 |
|
EQUITY IN EARNINGS (LOSSES) OF ARO |
|
8.6 |
|
|
|
2.9 |
|
|
|
8.7 |
|
|
|
4.3 |
|
|
|
(1.3 |
) |
OPERATING INCOME (LOSS) |
|
41.1 |
|
|
|
61.6 |
|
|
|
(15.6 |
) |
|
|
(49.9 |
) |
|
|
(20.1 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
|
15.5 |
|
|
|
27.9 |
|
|
|
11.2 |
|
|
|
10.9 |
|
|
|
11.0 |
|
Interest expense, net |
|
(10.5 |
) |
|
|
(11.7 |
) |
|
|
(11.6 |
) |
|
|
(11.5 |
) |
|
|
(11.7 |
) |
Reorganization items, net |
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(0.7 |
) |
|
|
(1.0 |
) |
|
|
(4.9 |
) |
Other, net |
|
(4.9 |
) |
|
|
14.1 |
|
|
|
149.7 |
|
|
|
11.0 |
|
|
|
27.0 |
|
|
|
(0.2 |
) |
|
|
29.9 |
|
|
|
148.6 |
|
|
|
9.4 |
|
|
|
21.4 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
40.9 |
|
|
|
91.5 |
|
|
|
133.0 |
|
|
|
(40.5 |
) |
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
|
9.8 |
|
|
|
13.8 |
|
|
|
20.2 |
|
|
|
(0.7 |
) |
|
|
(32.0 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) |
|
31.1 |
|
|
|
77.7 |
|
|
|
112.8 |
|
|
|
(39.8 |
) |
|
|
33.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
(1.9 |
) |
|
|
(3.4 |
) |
|
|
(1.2 |
) |
|
|
1.2 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS |
$ |
29.2 |
|
|
$ |
74.3 |
|
|
$ |
111.6 |
|
|
$ |
(38.6 |
) |
|
$ |
33.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EARNINGS (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
0.39 |
|
|
$ |
0.99 |
|
|
$ |
1.49 |
|
|
$ |
(0.51 |
) |
|
$ |
0.44 |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.98 |
|
|
$ |
1.48 |
|
|
$ |
(0.51 |
) |
|
$ |
0.44 |
|
WEIGHTED-AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
75.2 |
|
|
|
75.1 |
|
|
|
75.0 |
|
|
|
75.0 |
|
|
|
75.0 |
|
Diluted |
|
76.0 |
|
|
|
75.6 |
|
|
|
75.6 |
|
|
|
75.0 |
|
|
|
75.0 |
|
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In millions) |
|
|
As of |
|||||||||
|
December 31, 2022 |
September 30, 2022 |
June 30, 2022 |
March 31, 2022 |
December 31, 2021 |
|||||
ASSETS |
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
CURRENT ASSETS |
|
|
|
|
|
|||||
Cash and cash equivalents |
$ |
724.1 |
$ |
406.0 |
$ |
553.5 |
$ |
578.2 |
$ |
608.7 |
Restricted cash |
|
24.4 |
|
18.2 |
|
23.8 |
|
30.0 |
|
35.9 |
Short-term investments |
|
— |
|
220.0 |
|
— |
|
— |
|
— |
Accounts receivable, net |
|
449.1 |
|
535.5 |
|
544.6 |
|
439.3 |
|
444.2 |
Other current assets |
|
148.6 |
|
162.9 |
|
159.0 |
|
125.7 |
|
117.8 |
Total current assets |
$ |
1,346.2 |
$ |
1,342.6 |
$ |
1,280.9 |
$ |
1,173.2 |
$ |
1,206.6 |
|
|
|
|
|
|
|||||
PROPERTY AND EQUIPMENT, NET |
|
977.2 |
|
953.6 |
|
931.7 |
|
930.2 |
|
890.9 |
|
|
|
|
|
|
|||||
LONG-TERM NOTES RECEIVABLE FROM ARO |
|
254.0 |
|
246.9 |
|
264.5 |
|
256.8 |
|
249.1 |
|
|
|
|
|
|
|||||
INVESTMENT IN ARO |
|
111.1 |
|
102.6 |
|
99.6 |
|
90.9 |
|
86.6 |
|
|
|
|
|
|
|||||
OTHER ASSETS |
|
171.8 |
|
175.5 |
|
184.1 |
|
180.5 |
|
169.9 |
|
|
|
|
|
|
|||||
|
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
$ |
2,631.6 |
$ |
2,603.1 |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|||||
|
|
|
|
|
|
|||||
CURRENT LIABILITIES |
|
|
|
|
|
|||||
Accounts payable - trade |
$ |
256.5 |
$ |
256.6 |
$ |
287.0 |
$ |
311.2 |
$ |
225.8 |
Accrued liabilities and other |
|
247.9 |
|
262.5 |
|
260.1 |
|
212.1 |
|
196.2 |
Total current liabilities |
$ |
504.4 |
$ |
519.1 |
$ |
547.1 |
$ |
523.3 |
$ |
422.0 |
|
|
|
|
|
|
|||||
LONG-TERM DEBT |
|
542.4 |
|
541.8 |
|
545.7 |
|
545.5 |
|
545.3 |
|
|
|
|
|
|
|||||
OTHER LIABILITIES |
|
515.6 |
|
523.2 |
|
511.0 |
|
522.1 |
|
558.4 |
|
|
|
|
|
|
|||||
TOTAL LIABILITIES |
|
1,562.4 |
|
1,584.1 |
|
1,603.8 |
|
1,590.9 |
|
1,525.7 |
|
|
|
|
|
|
|||||
TOTAL EQUITY |
|
1,297.9 |
|
1,237.1 |
|
1,157.0 |
|
1,040.7 |
|
1,077.4 |
|
|
|
|
|
|
|||||
|
$ |
2,860.3 |
$ |
2,821.2 |
$ |
2,760.8 |
$ |
2,631.6 |
$ |
2,603.1 |
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
|
Successor |
|
|
Predecessor |
|
Combined (Non-GAAP) (3) |
||||||||||
|
Year Ended December 31, 2022 |
|
Eight Months Ended December 31, 2021 (1) |
|
|
Four Months Ended April 30, 2021 (2) |
|
Year Ended December 31, 2021 |
||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
181.8 |
|
|
$ |
(23.6 |
) |
|
|
$ |
(4,463.8 |
) |
|
$ |
(4,487.4 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
||||||||
Gain on asset disposals |
|
(141.2 |
) |
|
|
(21.2 |
) |
|
|
|
(6.0 |
) |
|
|
(27.2 |
) |
Depreciation expense |
|
91.2 |
|
|
|
66.1 |
|
|
|
|
159.6 |
|
|
|
225.7 |
|
Accretion of discount on notes receivable |
|
(44.9 |
) |
|
|
(20.8 |
) |
|
|
|
— |
|
|
|
(20.8 |
) |
Loss on impairment |
|
34.5 |
|
|
|
— |
|
|
|
|
756.5 |
|
|
|
756.5 |
|
Equity in earnings of ARO |
|
(24.5 |
) |
|
|
(6.1 |
) |
|
|
|
(3.1 |
) |
|
|
(9.2 |
) |
Share-based compensation expense |
|
17.4 |
|
|
|
4.3 |
|
|
|
|
4.8 |
|
|
|
9.1 |
|
Net periodic pension and retiree medical income |
|
(16.4 |
) |
|
|
(8.7 |
) |
|
|
|
(5.4 |
) |
|
|
(14.1 |
) |
Amortization, net |
|
(9.0 |
) |
|
|
2.3 |
|
|
|
|
(4.8 |
) |
|
|
(2.5 |
) |
Deferred income tax expense (benefit) |
|
7.9 |
|
|
|
(21.3 |
) |
|
|
|
(18.2 |
) |
|
|
(39.5 |
) |
Amortization of debt issuance cost |
|
1.0 |
|
|
|
0.5 |
|
|
|
|
— |
|
|
|
0.5 |
|
Non-cash reorganization items, net |
|
— |
|
|
|
— |
|
|
|
|
3,487.3 |
|
|
|
3,487.3 |
|
Other |
|
(1.6 |
) |
|
|
0.3 |
|
|
|
|
7.3 |
|
|
|
7.6 |
|
Changes in operating assets and liabilities |
|
35.4 |
|
|
|
4.7 |
|
|
|
|
68.5 |
|
|
|
73.2 |
|
Contributions to pension plans and other post retirement benefits |
|
(4.1 |
) |
|
|
(2.7 |
) |
|
|
|
(22.5 |
) |
|
|
(25.2 |
) |
Net cash provided by (used in) operating activities |
$ |
127.5 |
|
|
$ |
(26.2 |
) |
|
|
$ |
(39.8 |
) |
|
$ |
(66.0 |
) |
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||
Purchases of short-term investments |
$ |
(220.0 |
) |
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
Maturities of short-term investments |
|
220.0 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Additions to property and equipment |
|
(207.0 |
) |
|
|
(50.2 |
) |
|
|
|
(8.7 |
) |
|
|
(58.9 |
) |
Net proceeds from disposition of assets |
|
150.3 |
|
|
|
25.1 |
|
|
|
|
30.1 |
|
|
|
55.2 |
|
Repayments of note receivable from ARO |
|
40.0 |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
$ |
(16.7 |
) |
|
$ |
(25.1 |
) |
|
|
$ |
21.4 |
|
|
$ |
(3.7 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||
Consent solicitation fees |
$ |
(3.9 |
) |
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
— |
|
Payments related to tax withholdings for share-based awards |
|
(2.5 |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Issuance of First lien notes |
|
— |
|
|
|
— |
|
|
|
|
520.0 |
|
|
|
520.0 |
|
Payments to Predecessor Creditors |
|
— |
|
|
|
— |
|
|
|
|
(129.9 |
) |
|
|
(129.9 |
) |
Other |
|
— |
|
|
|
— |
|
|
|
|
(1.4 |
) |
|
|
(1.4 |
) |
Net cash provided by (used in) financing activities |
$ |
(6.4 |
) |
|
$ |
— |
|
|
|
$ |
388.7 |
|
|
$ |
388.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rate changes on cash and cash equivalents |
$ |
(0.5 |
) |
|
$ |
(0.1 |
) |
|
|
$ |
(0.1 |
) |
|
$ |
(0.2 |
) |
|
|
|
|
|
|
|
|
|
||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
103.9 |
|
|
$ |
(51.4 |
) |
|
|
$ |
370.2 |
|
|
$ |
318.8 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
644.6 |
|
|
|
696.0 |
|
|
|
|
325.8 |
|
|
|
325.8 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
748.5 |
|
|
$ |
644.6 |
|
|
|
$ |
696.0 |
|
|
$ |
644.6 |
|
(1) |
Represents cash flows for the period from May 1, 2021, through December 31, 2021 (the "Successor" period). |
(2) |
Represents cash flows for the period from January 1, 2021, through April 30, 2021 (the "Predecessor" period). |
(3) |
As required by GAAP, results for the Successor and Predecessor periods must be presented separately. However, the Company has combined the cash flows of the Successor and Predecessor periods ("combined" results) as a non-GAAP measure to compare the year ended December 31, 2022, to the year ended December 31, 2021, since we believe it provides the most meaningful basis to analyze our results. These combined results do not comply with GAAP and have not been prepared as pro forma results under applicable SEC rules. |
VALARIS LIMITED AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In millions) |
|
Three Months Ended |
|||||||||||||||||
|
December 31, 2022 |
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
||||||||||
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) |
$ |
31.1 |
|
$ |
77.7 |
|
|
$ |
112.8 |
|
|
$ |
(39.8 |
) |
|
$ |
33.3 |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
||||||||||
Depreciation expense |
|
23.8 |
|
|
22.6 |
|
|
|
22.3 |
|
|
|
22.5 |
|
|
|
25.1 |
|
Equity in losses (earnings) of ARO |
|
(8.6 |
) |
|
(2.9 |
) |
|
|
(8.7 |
) |
|
|
(4.3 |
) |
|
|
1.3 |
|
Accretion of discount on notes receivable |
|
(7.1 |
) |
|
(22.4 |
) |
|
|
(7.7 |
) |
|
|
(7.7 |
) |
|
|
(7.9 |
) |
Share-based compensation expense |
|
5.9 |
|
|
4.6 |
|
|
|
3.5 |
|
|
|
3.4 |
|
|
|
2.7 |
|
Net periodic pension and retiree medical income |
|
(4.3 |
) |
|
(4.0 |
) |
|
|
(4.1 |
) |
|
|
(4.0 |
) |
|
|
(2.6 |
) |
Gain on asset disposals |
|
(3.5 |
) |
|
(0.1 |
) |
|
|
(135.1 |
) |
|
|
(2.5 |
) |
|
|
(21.0 |
) |
Amortization, net |
|
(2.0 |
) |
|
(5.4 |
) |
|
|
(3.2 |
) |
|
|
1.6 |
|
|
|
(0.5 |
) |
Deferred income tax expense (benefit) |
|
0.8 |
|
|
0.4 |
|
|
|
7.3 |
|
|
|
(0.6 |
) |
|
|
(22.5 |
) |
Amortization of debt issuance cost |
|
0.3 |
|
|
0.3 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
Loss on impairment |
|
— |
|
|
— |
|
|
|
34.5 |
|
|
|
— |
|
|
|
— |
|
Other |
|
(2.4 |
) |
|
0.5 |
|
|
|
0.3 |
|
|
|
— |
|
|
|
0.3 |
|
Changes in operating assets and liabilities |
|
121.3 |
|
|
16.4 |
|
|
|
(134.8 |
) |
|
|
32.5 |
|
|
|
(14.6 |
) |
Contributions to pension plans and other post-retirement benefits |
|
(0.8 |
) |
|
(0.6 |
) |
|
|
(1.9 |
) |
|
|
(0.8 |
) |
|
|
(1.0 |
) |
Net cash provided by (used in) operating activities |
$ |
154.5 |
|
$ |
87.1 |
|
|
$ |
(114.6 |
) |
|
$ |
0.5 |
|
|
$ |
(7.2 |
) |
|
|
|
|
|
|
|
|
|
||||||||||
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||||
Maturities of short-term investments |
|
220.0 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Additions to property and equipment |
|
(53.9 |
) |
|
(53.5 |
) |
|
|
(61.1 |
) |
|
|
(38.5 |
) |
|
|
(26.5 |
) |
Net proceeds from disposition of assets |
|
3.5 |
|
|
0.3 |
|
|
|
145.2 |
|
|
|
1.3 |
|
|
|
23.6 |
|
Purchases of short-term investments |
|
— |
|
|
(220.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Repayments of note receivable from ARO |
|
— |
|
|
40.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
$ |
169.6 |
|
$ |
(233.2 |
) |
|
$ |
84.1 |
|
|
$ |
(37.2 |
) |
|
$ |
(2.9 |
) |
|
|
|
|
|
|
|
|
|
||||||||||
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
||||||||||
Consent solicitation fees |
$ |
— |
|
$ |
(3.9 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Payments for tax withholdings for share-based awards |
|
— |
|
|
(2.3 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
Net cash used in financing activities |
$ |
— |
|
$ |
(6.2 |
) |
|
$ |
(0.2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents |
$ |
0.2 |
|
$ |
(0.8 |
) |
|
$ |
(0.2 |
) |
|
$ |
0.3 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
$ |
324.3 |
|
$ |
(153.1 |
) |
|
$ |
(30.9 |
) |
|
$ |
(36.4 |
) |
|
$ |
(10.1 |
) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
424.2 |
|
|
577.3 |
|
|
|
608.2 |
|
|
|
644.6 |
|
|
|
654.7 |
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ |
748.5 |
|
$ |
424.2 |
|
|
$ |
577.3 |
|
|
$ |
608.2 |
|
|
$ |
644.6 |
|
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
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