VALARIS LIMITED
Valaris Reports Second Quarter 2021 Results
Emerges from Restructuring with Net Cash Position
Awarded More Than 20 New Contracts or Extensions Totaling Over $1.3 Billion of Backlog
VALARIS DS-11 Awarded Contract for 20K Project with Estimated Duration of Three-and-a-Half Years
VALARIS DS-18 Awarded Three-Year Contract
VALARIS DS-16 Awarded Two-Year Contract
Hamilton, Bermuda, August 2, 2021 … Valaris Limited (NYSE: VAL) ('Valaris' or the 'Company') today reported second quarter 2021 results.
President and Chief Executive Officer Tom Burke said, 'On April 30, 2021, Valaris emerged from chapter 11 with a significantly strengthened capital structure, including a net cash position, $550 million of debt due in 2028 and an industry-leading cost structure that is scalable and adaptable to changing market conditions.'
Burke added, 'During the three months since emergence, our customers awarded Valaris more than 20 new contracts or extensions with associated contract backlog totaling over $1.3 billion. This figure includes an eight-well contract, with an estimated duration of three-and-a-half years, for VALARIS DS-11, a two-year contract for VALARIS DS-16 and a 420-day contract for VALARIS DPS-1, which we announced in today's fleet status report, as well as a three-year contract for VALARIS DS-18 awarded in early June. These contract awards are a testament to the technical capabilities of our fleet and the excellent operational and safety performance of our crews, and I want to take the opportunity to recognize all the teams in Valaris that have contributed to this outstanding contracting success over the past several months.'
Burke concluded, 'We are beginning to see early signs of a recovery in customer demand following the downturn caused by the COVID-19 pandemic, evidenced by our contracting activity over the past few months. As a result, Valaris is well-positioned to benefit from the opportunities we see in the market today. We will continue to focus on winning work for our active fleet and returning some of our high-quality stacked rigs to work as suitable opportunities arise. I am extremely proud of what Valaris has achieved during the three months since our emergence from chapter 11, and I am excited to see what the future holds for the Company.'
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 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 to prior periods since we believe it provides the most meaningful basis to analyze our results.
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Second Quarter Highlights
Revenues were $203 million and $90 million for the Successor and Predecessor periods, respectively. Combined revenues declined to $293 million in the second quarter 2021 from $307 million in the first quarter. Excluding reimbursable items, Combined revenues declined to $261 million in the second quarter from $277 million in the prior quarter primarily due to lower revenues from the floater fleet as two drillships working in the first quarter were between contracts for most of the second quarter.
Contract drilling expense was $169 million and $86 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense increased to $254 million in the second quarter 2021 from $252 million in the first quarter. Excluding reimbursable items, Combined contract drilling expense declined to $236 million in the second quarter from $237 million in the prior quarter primarily due to fewer operating days for the floater fleet. This was partially offset by additional operating days for the jackup fleet and higher rig reactivation costs as previously stacked rigs, primarily VALARIS JU-249 and VALARIS JU-121, underwent preparations for long-term contracts.
General and administrative expense was $13 million and $6 million for the Successor and Predecessor periods, respectively. Combined general and administrative expense declined to $19 million in the second quarter 2021 from $24 million in the prior quarter primarily due to lower personnel costs.
Tax expense was $15 million and tax benefit was $16 million for the Successor and Predecessor periods, respectively. Combined tax benefit was less than $1 million in the second quarter 2021 compared to tax expense of $32 million in the prior quarter. The Combined second quarter tax provision included $12 million of discrete tax benefit primarily related to fresh start accounting adjustments. The prior quarter tax provision included $20 million of discrete tax expense related to uncertain tax positions taken for prior years. Adjusted for discrete items, Combined tax expense of $12 million in the second quarter was in line with the prior quarter.
Combined adjusted EBITDA of $17 million in the second quarter 2021 compared to $28 million in the prior quarter. Combined adjusted EBITDAR of $41 million in the second quarter 2021 compared to $39 million in the prior quarter. Combined adjusted EBITDARPS of $58 million in the second quarter 2021 compared to $57 million in the prior quarter.
Segment Highlights
Floaters
Floater revenues were $50 million and $18 million for the Successor and Predecessor periods, respectively. Combined floater revenues declined to $68 million in the second quarter 2021 from $97 million in the prior quarter. Excluding reimbursable items, Combined revenues declined to $62 million in the second quarter from $88 million in the prior quarter primarily due to fewer operating days as two drillships that were working in the first quarter were between contracts for most of the second quarter.
Contract drilling expense was $45 million and $22 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense declined to $67 million in the second quarter 2021 from $84 million in the prior quarter. Excluding reimbursable items, Combined contract drilling expense declined to $63 million in the second quarter from $81 million in the prior quarter primarily due to fewer operating days in the second quarter.
Jackups
Jackup revenues were $129 million and $60 million for the Successor and Predecessor periods, respectively. Combined jackup revenues increased to $188 million in the second quarter 2021 from $173 million in the prior quarter. Excluding reimbursable items, Combined revenues increased to $167 million
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in the second quarter from $157 million in the prior quarter. The sequential quarter increase was primarily due to an increase in average day rates, which were $99,000 in the second quarter compared to $95,000 in the prior quarter and a four percentage point increase in utilization to 54%.
Contract drilling expense was $96 million and $49 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense increased to $144 million in the second quarter 2021 from $121 million in the prior quarter. Excluding reimbursable items, Combined contract drilling expense increased to $134 million in the second quarter from $114 million in the prior quarter primarily due to $19 million higher reactivation costs in the second quarter as we prepare rigs, primarily VALARIS JU-249 and VALARIS JU-121, for long-term contracts starting later in the year.
ARO Drilling
Revenues were $84 million and $41 million for the Successor and Predecessor periods, respectively. Combined revenues increased to $125 million in the second quarter 2021 from $123 million in the prior quarter. Combined contract drilling expense increased to $93 million in the second quarter from $86 million in the prior quarter primarily due to higher personnel costs. Combined EBITDA was $28 million in the second quarter compared to $33 million in the prior quarter.
Other
Revenues were $25 million and $12 million for the Successor and Predecessor periods, respectively. Combined revenues of $37 million in the second quarter 2021 were in line with the prior quarter and Combined contract drilling expense declined to $14 million in the second quarter from $15 million in the prior quarter.
| Second Quarter | ||||||||||||||||||
| (in millions of $, | Floaters | Jackups | ARO | Other | Reconciling Items | Consolidated Total | ||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Successor | Predecessor | Combined (Non-GAAP) | Successor | Predecessor | Combined (Non-GAAP) | Successor | Predecessor | Combined (Non-GAAP) | Successor | Predecessor | Combined (Non-GAAP) | Successor | Predecessor | Combined (Non-GAAP) | |
| except %) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 |
| Revenues | 49.7 | 18.4 | 68.1 | 128.5 | 59.8 | 188.3 | 84.0 | 40.8 | 124.8 | 24.6 | 12.1 | 36.7 | (84.0) | (40.8) | (124.8) | 202.8 | 90.3 | 293.1 |
| Operating expenses | ||||||||||||||||||
| Contract drilling | 45.2 | 21.7 | 66.9 | 95.5 | 48.8 | 144.3 | 62.9 | 29.8 | 92.7 | 9.2 | 4.7 | 13.9 | (44.1) | (19.4) | (63.5) | 168.7 | 85.6 | 254.3 |
| Depreciation | 7.9 | 15.9 | 23.8 | 7.8 | 17.3 | 25.1 | 9.7 | 4.9 | 14.6 | 0.8 | 3.5 | 4.3 | (9.6) | (4.1) | (13.7) | 16.6 | 37.5 | 54.1 |
| General and admin. | - | - | - | - | - | - | 3.1 | 1.2 | 4.3 | - | - | - | 9.6 | 5.2 | 14.8 | 12.7 | 6.4 | 19.1 |
| Equity in earnings of ARO | - | - | - | - | - | - | - | - | - | - | - | - | 4.8 | 1.2 | 6.0 | 4.8 | 1.2 | 6.0 |
| Operating income (loss) | (3.4) | (19.2) | (22.6) | 25.2 | (6.3) | 18.9 | 8.3 | 4.9 | 13.2 | 14.6 | 3.9 | 18.5 | (35.1) | (21.3) | (56.4) | 9.6 | (38.0) | (28.4) |
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| Second Quarter | ||||||||||||||||||||||
| (in millions of $, | Floaters | Jackups | ARO | Other | Reconciling Items | Consolidated Total | ||||||||||||||||
| except %) | Combined Q2 2021 | Q1 2021 | Chg | Combined Q2 2021 | Q1 2021 | Chg | Combined Q2 2021 | Q1 2021 | Chg | Combined Q2 2021 | Q1 2021 | Chg | Combined Q2 2021 | Q1 2021 | Combined Q2 2021 | Q1 2021 | Chg | |||||
| Revenues | 68.1 | 97.3 | (30) | % | 188.3 | 172.6 | 9 | % | 124.8 | 122.7 | 2 | % | 36.7 | 37.2 | (1) | % | (124.8) | (122.7) | 293.1 | 307.1 | (5) | % |
| Operating expenses | ||||||||||||||||||||||
| Contract drilling | 66.9 | 84.3 | (21) | % | 144.3 | 120.5 | 20 | % | 92.7 | 86.3 | 7 | % | 13.9 | 15.1 | (8) | % | (63.5) | (54.0) | 254.3 | 252.2 | 1 | % |
| Impairment | - | 756.5 | nm | - | - | - | - | - | - | % | - | - | - | % | - | - | - | 756.5 | nm | |||
| Depreciation | 23.8 | 56.2 | (58) | % | 25.1 | 52.4 | (52) | % | 14.6 | 16.1 | (9) | % | 4.3 | 11.3 | (62) | % | (13.7) | (13.9) | 54.1 | 122.1 | (56) | % |
| General and admin. | - | - | - | % | - | - | - | % | 4.3 | 3.0 | 43 | % | - | - | - | % | 14.8 | 21.3 | 19.1 | 24.3 | (21) | % |
| Equity in earnings of ARO | - | - | - | % | - | - | - | % | - | - | - | % | - | - | - | % | 6.0 | 1.9 | 6.0 | 1.9 | nm | |
| Operating income (loss) | (22.6) | (799.7) | nm | 18.9 | (0.3) | (6400) | % | 13.2 | 17.3 | (24) | % | 18.5 | 10.8 | nm | (56.4) | (74.2) | (28.4) | (846.1) | nm |
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,' 'plan,' 'project,' 'could,' 'may,' 'might,' 'should,' 'will' and similar words and specifically include statements involving expected financial performance; expected utilization, rig commitments and availability, day rates, revenues, operating expenses including expenses related to reorganization items, cash flow, 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 effects of declines in commodity prices; synergies and expected additional cost savings; effective tax rates; expected work commitments, letters of intent; scheduled delivery dates for rigs; performance of our joint venture with Saudi Aramco; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell or scrap rigs; and general market, business and industry conditions, trends and outlook. 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 effects of the chapter 11 cases on the Company's business, relationships, comparability of our financial results and ability to access financing sources, the COVID-19 outbreak and global pandemic, 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 rights if final investment decision (FID) is not received with respect to projects for which the drilling rig is contracted; potential additional asset impairments; our failure to satisfy our debt obligations; our ability to obtain financing, service our debt, fund negative cash flow and capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; actions by regulatory authorities, rating agencies or other third parties; actions by our security holders; availability and terms of any financing; commodity price fluctuations, 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; 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 construction, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling 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
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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 particular, the unprecedented nature of the current economic downturn, pandemic, and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company's business and financial condition. 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, as updated in our subsequent quarterly reports on Form 10-Q, which are 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.
Investor & Media Contact:Darin Gibbins
Vice President - Investor Relations and Treasurer
+1-713-979-4623
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| VALARIS LIMITED AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In millions, except per share amounts) |
| (Unaudited) |
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||
| Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | Three Months Ended March 31, 2021 | |||||
| OPERATING REVENUES | $ | 202.8 | $ | 90.3 | $ | 293.1 | $ | 307.1 |
| OPERATING EXPENSES | ||||||||
| Contract drilling (exclusive of depreciation) | 168.7 | 85.6 | 254.3 | 252.2 | ||||
| Loss on impairment | - | - | - | 756.5 | ||||
| Depreciation | 16.6 | 37.5 | 54.1 | 122.1 | ||||
| General and administrative | 12.7 | 6.4 | 19.1 | 24.3 | ||||
| Total operating expenses | 198.0 | 129.5 | 327.5 | 1,155.1 | ||||
| EQUITY IN EARNINGS OF ARO | 4.8 | 1.2 | 6.0 | 1.9 | ||||
| OPERATING INCOME (LOSS) | 9.6 | (38.0) | (28.4) | (846.1) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | 7.8 | 1.0 | 8.8 | 2.6 | ||||
Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million for the one months April 30, 2021 and $100.3 million for the three months ended March 31, 2021)
| (8.0) | (1.1) | (9.1) | (1.3) | ||||
| Reorganization items, net | (4.1) | (3,532.4) | (3,536.5) | (52.2) | ||||
| Other, net | 5.7 | (1.2) | 4.5 | 21.1 | ||||
| 1.4 | (3,533.7) | (3,532.3) | (29.8) | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | 11.0 | (3,571.7) | (3,560.7) | (875.9) | ||||
| PROVISION (BENEFIT) FOR INCOME TAXES | 15.1 | (15.5) | (0.4) | 31.7 | ||||
| NET LOSS | (4.1) | (3,556.2) | (3,560.3) | (907.6) | ||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (2.1) | (0.8) | (2.9) | (2.4) | ||||
| NET LOSS ATTRIBUTABLE TO VALARIS | $ | (6.2) | $ | (3,557.0) | $ | (3,563.2) | $ | (910.0) |
| LOSS PER SHARE - BASIC AND DILUTED | $ | (0.08) | $ | (17.81) | n/m | $ | (4.56) | |
| WEIGHTED-AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED | 75.0 | 199.7 | n/m | 199.6 |
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| VALARIS LIMITED AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In millions, except per share amounts) |
| (Unaudited) |
| Three Months Ended | ||||||||||
Combined (Non-GAAP) (1)
| Predecessor | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| OPERATING REVENUES | $ | 293.1 | $ | 307.1 | $ | 296.5 | $ | 285.3 | $ | 388.8 |
| OPERATING EXPENSES | ||||||||||
| Contract drilling (exclusive of depreciation) | 254.3 | 252.2 | 304.7 | 307.2 | 370.7 | |||||
| Loss on impairment | - | 756.5 | - | - | 838.0 | |||||
| Depreciation | 54.1 | 122.1 | 122.4 | 122.4 | 131.5 | |||||
| General and administrative | 19.1 | 24.3 | 26.5 | 72.1 | 62.6 | |||||
| Total operating expenses | 327.5 | 1,155.1 | 453.6 | 501.7 | 1,402.8 | |||||
| Other operating income | - | - | - | 118.1 | - | |||||
| EQUITY IN EARNINGS (LOSSES) OF ARO | 6.0 | 1.9 | (0.2) | 3.9 | (5.2) | |||||
| OPERATING LOSS | (28.4) | (846.1) | (157.3) | (94.4) | (1,019.2) | |||||
| OTHER EXPENSE | - | |||||||||
| Interest income | 8.8 | 2.6 | 4.5 | 4.7 | 5.7 | |||||
Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million, $100.3 million, $94.8 million, $45.9 million for the three months June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively)
| (9.1) | (1.3) | (1.4) | (59.8) | (116.2) | |||||
| Reorganization items, net | (3,536.5) | (52.2) | (30.1) | (497.5) | - | |||||
| Other, net | 4.5 | 21.1 | 1.7 | (3.1) | 5.1 | |||||
| (3,532.3) | (29.8) | (25.3) | (555.7) | (105.4) | ||||||
| LOSS BEFORE INCOME TAXES | (3,560.7) | (875.9) | (182.6) | (650.1) | (1,124.6) | |||||
| PROVISION (BENEFIT) FOR INCOME TAXES | (0.4) | 31.7 | (113.5) | 21.9 | (15.8) | |||||
| NET LOSS | (3,560.3) | (907.6) | (69.1) | (672.0) | (1,108.8) | |||||
| NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (2.9) | (2.4) | (1.8) | 1.1 | 1.4 | |||||
| NET LOSS ATTRIBUTABLE TO VALARIS | $ | (3,563.2) | $ | (910.0) | $ | (70.9) | $ | (670.9) | $ | (1,107.4) |
| LOSS PER SHARE - BASIC AND DILUTED | n/m | $ | (4.56) | $ | (0.36) | $ | (3.36) | $ | (5.58) | |
| WEIGHTED-AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED | n/m | 199.6 | 199.5 | 199.4 | 198.6 |
(1)Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.
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| VALARIS LIMITED AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In millions) |
| Successor | Predecessor | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | $ | 608.8 | 291.7 | $ | 325.8 | $ | 180.4 | $ | 202.0 | |
| Restricted cash | 53.1 | 17.1 | 11.4 | 1.2 | - | |||||
| Accounts receivable, net | 436.1 | 449.8 | 449.2 | 429.7 | 363.3 | |||||
| Other current assets | 119.7 | 366.4 | 386.5 | 453.5 | 500.8 | |||||
| Total current assets | $ | 1,217.7 | $ | 1,125.0 | $ | 1,172.9 | $ | 1,064.8 | $ | 1,066.1 |
| PROPERTY AND EQUIPMENT, NET | 897.8 | 10,083.9 | 10,960.5 | 11,082.4 | 11,192.6 | |||||
| LONG-TERM NOTES RECEIVABLE FROM ARO | 234.3 | 442.7 | 442.7 | 442.7 | 452.8 | |||||
| INVESTMENT IN ARO | 85.4 | 122.8 | 120.9 | 121.1 | 117.2 | |||||
| OTHER ASSETS | 166.5 | 172.5 | 176.2 | 200.2 | 210.2 | |||||
| $ | 2,601.7 | $ | 11,946.9 | $ | 12,873.2 | $ | 12,911.2 | $ | 13,038.9 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Accounts payable - trade | $ | 183.9 | 176.8 | $ | 176.4 | $ | 180.7 | $ | 151.9 | |
| Accrued liabilities and other | 212.7 | 290.6 | 250.4 | 207.3 | 398.1 | |||||
| Current maturities of long-term debt | - | - | - | - | 2,518.1 | |||||
| Total current liabilities | $ | 396.6 | $ | 467.4 | $ | 426.8 | $ | 388.0 | $ | 3,068.1 |
| LONG - TERM DEBT | 544.8 | - | - | - | 4,092.2 | |||||
| OTHER LIABILITIES | 569.8 | 704.6 | 762.4 | 696.9 | 693.2 | |||||
| TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE | 1,511.2 | 1,172.0 | 1,189.2 | 1,084.9 | 7,853.5 | |||||
| LIABILITIES SUBJECT TO COMPROMISE | - | 7,313.7 | 7,313.7 | 7,313.7 | - | |||||
| TOTAL EQUITY | 1,090.5 | 3,461.2 | 4,370.3 | 4,512.6 | 5,185.4 | |||||
| $ | 2,601.7 | $ | 11,946.9 | $ | 12,873.2 | $ | 12,911.2 | $ | 13,038.9 |
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| VALARIS LIMITED AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In millions) |
| (Unaudited) |
| Successor | Predecessor | Combined (Non- GAAP) | Predecessor | |||||
| Two Months Ended June 30, 2021 | Four Months Ended April 30, 2021 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (4.1) | $ | (4,463.8) | $ | (4,467.9) | $ | (4,116.5) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Reorganization items, net | - | 3,487.3 | 3,487.3 | - | ||||
| Loss on impairment | - | 756.5 | 756.5 | 3,646.2 | ||||
| Depreciation expense | 16.6 | 159.6 | 176.2 | 296.0 | ||||
| Amortization, net | (.3) | (4.8) | (5.1) | 12.2 | ||||
| Accretion of discount on shareholder note | (6.0) | - | (6.0) | - | ||||
| Share-based compensation expense | - | 4.8 | 4.8 | 13.5 | ||||
| Equity in losses (earnings) of ARO | (4.8) | (3.1) | (7.9) | 11.5 | ||||
| Deferred income tax expense (benefit) | 1.1 | (18.2) | (17.1) | (109.1) | ||||
| Debt discounts and other | 0.4 | - | 0.4 | 28.8 | ||||
| Adjustment to gain on bargain purchase | - | - | - | 6.3 | ||||
| Other | (2.5) | (4.1) | (6.6) | (2.7) | ||||
| Changes in operating assets and liabilities | (25.7) | 68.5 | 42.8 | (156.7) | ||||
| Contributions to pension plans and other post-retirement benefits | (0.6) | (22.5) | (23.1) | (10.6) | ||||
| Net Cash Used in Operating Activities | (25.9) | (39.8) | (65.7) | (381.1) | ||||
| INVESTING ACTIVITIES | ||||||||
| Additions to property and equipment | (8.1) | (8.7) | (16.8) | (67.1) | ||||
| Proceeds from Sale of Property, Plant, and Equipment | 0.2 | 30.1 | 30.3 | 13.8 | ||||
| Net Cash Provided by (Used in) Investing Activities | (7.9) | 21.4 | 13.5 | (53.3) | ||||
| FINANCING ACTIVITIES | ||||||||
| Issuance of First Lien Notes | - | 520.0 | 520.0 | - | ||||
| Payments to Predecessor creditors | - | (129.9) | (129.9) | - | ||||
| Borrowings on credit facility | - | - | - | 566.0 | ||||
| Repayments of credit facility borrowings | - | - | - | (15.0) | ||||
| Reduction of long-term borrowings | - | - | - | (9.7) | ||||
| Other | - | (1.4) | (1.4) | (1.9) | ||||
| Net cash provided by financing activities | - | 388.7 | 388.7 | 539.4 | ||||
| Effect of exchange rate changes on cash and cash equivalents | (0.3) | (0.1) | (0.4) | (0.2) | ||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (34.1) | 370.2 | 336.1 | 104.8 | ||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 696.0 | 325.8 | 325.8 | 97.2 | ||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 661.9 | $ | 696.0 | $ | 661.9 | $ | 202.0 |
9
| VALARIS LIMITED AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In millions) |
| (Unaudited) |
| Three Months Ended | ||||||||||
Combined (Non-GAAP) (1)
| Predecessor | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| OPERATING ACTIVITIES | ||||||||||
| Net loss | $ | (3,560.3) | $ | (907.6) | $ | (69.1) | $ | (672.0) | $ | (1,108.8) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Debtor in Possession financing fees and payments on Backstop Agreement | - | - | (3.8) | 43.8 | - | |||||
| Loss on impairment | - | 756.5 | - | - | 838.0 | |||||
| Depreciation expense | 54.1 | 122.1 | 122.4 | 122.4 | 131.5 | |||||
| Reorganization items, net | 3,487.3 | - | (11.5) | 447.9 | - | |||||
| Deferred income tax expense (benefit) | (18.0) | 0.9 | (2.1) | 5.5 | (29.6) | |||||
| Debt discounts and other | 0.4 | - | - | 8.0 | 14.6 | |||||
| Share-based compensation expense | 1.0 | 3.8 | 3.6 | 4.3 | 5.7 | |||||
| Equity in losses (earnings) of ARO | (6.0) | (1.9) | 0.2 | (3.9) | 5.2 | |||||
| Amortization, net | (.5) | (4.6) | (8.2) | 2.2 | 9.4 | |||||
| Accretion of discount on shareholder note | (6.0) | - | - | - | - | |||||
| Other | (7.0) | 0.4 | 4.5 | 2.0 | (9.3) | |||||
| Changes in operating assets and liabilities | 21.9 | 20.9 | 109.8 | 24.9 | (26.8) | |||||
| Contributions to pension plans and other post-retirement benefits | (0.9) | (22.2) | (1.1) | (0.4) | (6.6) | |||||
| Net Cash Provided by (Used in) Operating Activities | (34.0) | (31.7) | 144.7 | (15.3) | (176.7) | |||||
| INVESTING ACTIVITIES | ||||||||||
| Additions to property and equipment | (10.8) | (6.0) | (10.9) | (15.8) | (30.8) | |||||
| Proceeds from Sale of Property, Plant, and Equipment | 26.6 | 3.7 | 7.6 | 30.4 | 3.4 | |||||
| Net Cash Provided by (Used in) Investing Activities | 15.8 | (2.3) | (3.3) | 14.6 | (27.4) | |||||
| FINANCING ACTIVITIES | ||||||||||
| Issuance of First Lien Notes | 520.0 | - | - | - | - | |||||
| Payments to Predecessor creditors | (129.9) | - | - | - | - | |||||
| Borrowings on credit facility | - | - | - | 30.0 | 222.1 | |||||
| Payments for Debtor-in-possession financing fees and backstop agreement | - | - | 3.8 | (43.8) | - | |||||
| Purchase of noncontrolling interests | - | - | - | (7.2) | - | |||||
| Other | (1.4) | - | - | - | (1.0) | |||||
| Net cash provided by (used in) financing activities | 388.7 | - | 3.8 | (21.0) | 221.1 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (0.3) | (0.1) | 0.2 | 0.1 | 0.1 | |||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 370.2 | (34.1) | 145.4 | (21.6) | 17.1 | |||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 291.7 | 325.8 | 180.4 | 202.0 | 184.9 | |||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 661.9 | $ | 291.7 | $ | 325.8 | $ | 180.4 | $ | 202.0 |
(1)Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.
10
| VALARIS LIMITED AND SUBSIDIARIES |
| OPERATING STATISTICS |
| (Unaudited) |
| (in millions) | Three Months Ended | |||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||||
REVENUES
| ||||||||||||||
| Floaters | ||||||||||||||
| Drillships | $ | 28.9 | $ | 13.7 | $ | 42.6 | $ | 81.0 | $ | 93.8 | $ | 35.4 | $ | 76.2 |
| Semisubmersibles | 20.8 | 4.7 | 25.5 | 16.3 | 11.7 | 21.7 | 87.4 | |||||||
| $ | 49.7 | $ | 18.4 | $ | 68.1 | $ | 97.3 | $ | 105.5 | $ | 57.1 | $ | 163.6 | |
Jackups (1)
| ||||||||||||||
| HD Ultra-Harsh & Harsh Environment | 70.9 | 34.0 | 104.9 | 95.5 | 96.2 | 91.2 | 89.4 | |||||||
| HD & SD Modern | 40.7 | 17.0 | 57.7 | 50.5 | 61.1 | 67.8 | 63.5 | |||||||
| SD Legacy | 16.9 | 8.8 | 25.7 | 26.6 | 22.1 | 27.8 | 33.4 | |||||||
| $ | 128.5 | $ | 59.8 | $ | 188.3 | $ | 172.6 | $ | 179.4 | $ | 186.8 | $ | 186.3 | |
| Total | $ | 178.2 | $ | 78.2 | $ | 256.4 | $ | 269.9 | $ | 284.9 | $ | 243.9 | $ | 349.9 |
| Other | ||||||||||||||
| Leased and Managed Rigs | 24.6 | 12.1 | 36.7 | 37.2 | 11.6 | 41.4 | 38.9 | |||||||
| Valaris Total | $ | 202.8 | $ | 90.3 | $ | 293.1 | $ | 307.1 | $ | 296.5 | $ | 285.3 | $ | 388.8 |
| ARO | ||||||||||||||
| Total | 84.0 | 40.8 | 124.8 | 122.7 | 117.5 | 145.6 | 146.0 | |||||||
| Valaris 50% Share | 42.0 | 20.4 | 62.4 | 61.4 | 58.8 | 72.8 | 73.0 | |||||||
Adjusted Total (2)
| $ | 244.8 | $ | 110.7 | $ | 355.5 | $ | 368.5 | $ | 355.3 | $ | 358.1 | $ | 461.8 |
(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.
11
| (in millions) | As of | |||||||||
|
Q2 2021 (as of August 2, 2021) |
Q1 2021 (as of March 31, 2021) |
Q4 2020 (as of December 31, 2020) |
Q3 2020 (as of September 30, 2020) |
Q2 2020 (as of June 30, 2020) | ||||||
CONTRACT BACKLOG (1)
| ||||||||||
| Floaters | ||||||||||
| Drillships | $ | 1,102.2 | $ | 117.6 | $ | 90.0 | $ | 129.2 | $ | 172.2 |
| Semisubmersibles | 294.0 | 171.4 | 73.7 | 82.3 | 104.9 | |||||
| $ | 1,396.2 | $ | 289.0 | $ | 163.7 | $ | 211.5 | $ | 277.1 | |
| Jackups | ||||||||||
| HD Ultra-Harsh & Harsh | 364.4 | 403.8 | 358.7 | 400.3 | 484.3 | |||||
| HD & SD - Modern | 299.9 | 180.6 | 211.8 | 253.4 | 375.1 | |||||
| SD - Legacy | 102.9 | 134.4 | 167.1 | 176.3 | 217.0 | |||||
| $ | 767.2 | $ | 718.8 | $ | 737.6 | $ | 830.0 | $ | 1,076.4 | |
| Total | $ | 2,163.4 | $ | 1,007.8 | $ | 901.3 | $ | 1,041.5 | $ | 1,353.5 |
Other (2)
| ||||||||||
| Leased and Managed Rigs | 60.3 | 90.8 | 140.1 | 178.7 | 217.4 | |||||
| Valaris Total | $ | 2,223.7 | $ | 1,098.6 | $ | 1,041.4 | $ | 1,220.2 | $ | 1,570.9 |
| ARO | ||||||||||
| Owned Rigs | 818.7 | 869.5 | 84.2 | 146.7 | 212.3 | |||||
| Leased Rigs | 134.5 | 192.2 | 263.3 | 347.1 | 422.7 | |||||
| ARO Total | 953.2 | 1,061.7 | 347.5 | 493.8 | 635.0 | |||||
| Valaris 50% Share of ARO Owned Rigs | 409.4 | 434.8 | 42.1 | 73.4 | 106.2 | |||||
Adjusted Total (3)
| $ | 2,633.1 | $ | 1,533.4 | $ | 1,083.5 | $ | 1,293.6 | $ | 1,677.1 |
(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 final investment decision (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. Q2 2021 contract backlog is as of August 2, 2021, being the filing date of our most recent fleet status report. Contract backlog for historical periods is as of the balance sheet date.
(2)Leased rigs and managed rigs included in Other reporting segment.
(3)Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO owned rigs.
12
| As of | |||||
| NUMBER OF RIGS | June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 |
Active Fleet (1)
| |||||
| Floaters | |||||
| Drillships | 4 | 4 | 4 | 5 | 7 |
| Semisubmersibles | 3 | 3 | 3 | 4 | 5 |
| 7 | 7 | 7 | 9 | 12 | |
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 10 | 9 | 9 | 9 | 10 |
| HD & SD Modern | 11 | 11 | 11 | 11 | 12 |
| SD Legacy | 4 | 4 | 4 | 6 | 7 |
| 25 | 24 | 24 | 26 | 29 | |
| Total Active Fleet | 32 | 31 | 31 | 35 | 41 |
| Stacked Fleet | |||||
| Floaters | |||||
Drillships (2)
| 7 | 7 | 7 | 6 | 7 |
| Semisubmersibles | 2 | 2 | 2 | 2 | 4 |
| 9 | 9 | 9 | 8 | 11 | |
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 2 | 4 | 4 | 4 | 3 |
| HD & SD Modern | 8 | 8 | 8 | 8 | 8 |
| SD Legacy | - | - | - | - | - |
| 10 | 12 | 12 | 12 | 11 | |
| Total Stacked Fleet | 19 | 21 | 21 | 20 | 22 |
Leased Rigs (3)
| |||||
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 1 | 1 | 1 | 1 | 1 |
| HD & SD Modern | 5 | 5 | 5 | 5 | 5 |
| SD Legacy | 3 | 3 | 3 | 3 | 3 |
| Total Leased Rigs | 9 | 9 | 9 | 9 | 9 |
| Valaris Total | 60 | 61 | 61 | 64 | 72 |
Managed Rigs (3)
| 2 | 2 | 2 | 2 | 2 |
ARO (4)
| |||||
| Owned Rigs | 7 | 7 | 7 | 7 | 7 |
| Leased Rigs | 9 | 9 | 9 | 9 | 9 |
| ARO Total | 16 | 16 | 16 | 16 | 16 |
(1)Active rigs are defined as rigs that are not preservation stacked.
(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 scheduled to be delivered in 2022. All ARO leased rigs are leased from Valaris and also included in Valaris leased rig count.
13
| Three Months Ended | |||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |
AVAILABLE DAYS - TOTAL FLEET (1)
| |||||
| Floaters | |||||
| Drillships | 1,001 | 990 | 1,043 | 1,274 | 1,274 |
| Semisubmersibles | 455 | 450 | 521 | 628 | 843 |
| 1,456 | 1,440 | 1,564 | 1,902 | 2,117 | |
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 1,153 | 1,170 | 1,328 | 1,196 | 1,183 |
| HD & SD Modern | 1,729 | 1,710 | 1,810 | 1,828 | 1,820 |
| SD Legacy | 364 | 360 | 368 | 368 | 504 |
| 3,246 | 3,240 | 3,506 | 3,392 | 3,507 | |
| Total | 4,702 | 4,680 | 5,070 | 5,294 | 5,624 |
| Other | |||||
| Leased and Managed Rigs | 1,001 | 990 | 1,012 | 1,012 | 1,001 |
| Valaris Total | 5,703 | 5,670 | 6,082 | 6,306 | 6,625 |
| ARO | |||||
| Owned Rigs | 637 | 630 | 644 | 644 | 637 |
Leased Rigs (2)
| 819 | 810 | 828 | 828 | 819 |
| ARO Total | 1,456 | 1,440 | 1,472 | 1,472 | 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.
14
| Three Months Ended | |||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |
AVAILABLE DAYS - ACTIVE FLEET (1)
| |||||
| Floaters | |||||
| Drillships | 364 | 360 | 368 | 460 | 637 |
| Semisubmersibles | 273 | 270 | 276 | 368 | 455 |
| 637 | 630 | 644 | 828 | 1,092 | |
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 819 | 630 | 867 | 736 | 910 |
| HD & SD Modern | 1,001 | 810 | 982 | 920 | 1,183 |
| SD Legacy | 364 | 360 | 368 | 490 | 546 |
| 2,184 | 1,800 | 2,217 | 2,146 | 2,639 | |
| Total | 2,821 | 2,430 | 2,861 | 2,974 | 3,731 |
| Other | |||||
| Leased and Managed Rigs | 1,001 | 990 | 1,012 | 1,012 | 1,001 |
| Valaris Total | 3,822 | 3,420 | 3,873 | 3,986 | 4,732 |
| ARO | |||||
| Owned Rigs | 637 | 630 | 644 | 644 | 637 |
Leased Rigs (2)
| 819 | 810 | 828 | 828 | 819 |
| ARO Total | 1,456 | 1,440 | 1,472 | 1,472 | 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)All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.
15
| Three Months Ended | |||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |
OPERATING DAYS (1)
| |||||
| Floaters | |||||
| Drillships | 185 | 329 | 352 | 142 | 382 |
| Semisubmersibles | 137 | 90 | 56 | 71 | 157 |
| 322 | 419 | 408 | 213 | 539 | |
| Jackups | |||||
| HD Ultra-Harsh & Harsh Environment | 674 | 582 | 579 | 572 | 572 |
| HD & SD Modern | 742 | 683 | 669 | 750 | 842 |
| SD Legacy | 339 | 360 | 367 | 366 | 481 |
| 1,755 | 1,625 | 1,615 | 1,688 | 1,895 | |
| Total | 2,077 | 2,044 | 2,023 | 1,901 | 2,434 |
| Other | |||||
| Leased and Managed Rigs | 1,001 | 990 | 1,012 | 951 | 1,001 |
| Valaris Total | 3,078 | 3,034 | 3,035 | 2,852 | 3,435 |
| ARO | |||||
| Owned Rigs | 609 | 609 | 599 | 619 | 615 |
Leased Rigs (2)
| 684 | 687 | 437 | 814 | 802 |
| ARO Total | 1,293 | 1,296 | 1,036 | 1,433 | 1,417 |
(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.
16
| Three Months Ended | ||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
UTILIZATION - TOTAL FLEET (1)
| ||||||||||
| Floaters | ||||||||||
| Drillships | 18 | % | 33 | % | 34 | % | 11 | % | 30 | % |
| Semisubmersibles | 30 | % | 20 | % | 11 | % | 11 | % | 19 | % |
| 22 | % | 29 | % | 26 | % | 11 | % | 25 | % | |
| Jackups | ||||||||||
| HD Ultra-Harsh & Harsh Environment | 58 | % | 50 | % | 44 | % | 48 | % | 48 | % |
| HD & SD Modern | 43 | % | 40 | % | 37 | % | 41 | % | 46 | % |
| SD Legacy | 93 | % | 100 | % | 100 | % | 99 | % | 96 | % |
| 54 | % | 50 | % | 46 | % | 50 | % | 54 | % | |
| Total | 44 | % | 44 | % | 40 | % | 36 | % | 43 | % |
| Other | ||||||||||
| Leased and Managed Rigs | 100 | % | 100 | % | 100 | % | 94 | % | 100 | % |
| Valaris Total | 54 | % | 54 | % | 50 | % | 45 | % | 52 | % |
| Pro Forma Jackups Including Leased Rigs | 63 | % | 60 | % | 56 | % | 59 | % | 63 | % |
| ARO | ||||||||||
| Owned Rigs | 96 | % | 97 | % | 93 | % | 96 | % | 97 | % |
Leased Rigs (2)
| 83 | % | 85 | % | 53 | % | 98 | % | 98 | % |
| ARO Total | 89 | % | 90 | % | 70 | % | 97 | % | 97 | % |
(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)All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.
17
| Three Months Ended | ||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
UTILIZATION - ACTIVE FLEET (1)
| ||||||||||
| Floaters | ||||||||||
| Drillships | 51 | % | 91 | % | 96 | % | 31 | % | 60 | % |
| Semisubmersibles | 50 | % | 33 | % | 20 | % | 19 | % | 34 | % |
| 51 | % | 66 | % | 63 | % | 26 | % | 49 | % | |
| Jackups | ||||||||||
| HD Ultra-Harsh & Harsh Environment | 82 | % | 92 | % | 67 | % | 78 | % | 63 | % |
| HD & SD Modern | 74 | % | 84 | % | 68 | % | 82 | % | 71 | % |
| SD Legacy | 93 | % | 100 | % | 100 | % | 75 | % | 88 | % |
| 80 | % | 90 | % | 73 | % | 79 | % | 72 | % | |
| Total | 74 | % | 84 | % | 71 | % | 64 | % | 65 | % |
| Other | ||||||||||
| Leased and Managed Rigs | 100 | % | 100 | % | 100 | % | 94 | % | 100 | % |
| Valaris Total | 81 | % | 89 | % | 78 | % | 72 | % | 73 | % |
| Pro Forma Jackups Including Leased Rigs | 86 | % | 93 | % | 80 | % | 85 | % | 78 | % |
| ARO | ||||||||||
| Owned Rigs | 96 | % | 97 | % | 93 | % | 96 | % | 97 | % |
Leased Rigs (2)
| 83 | % | 85 | % | 53 | % | 98 | % | 98 | % |
| ARO Total | 89 | % | 90 | % | 70 | % | 97 | % | 97 | % |
(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)All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.
18
| Three Months Ended | ||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
REVENUE EFFICIENCY (1)
| ||||||||||
| Floaters | ||||||||||
| Drillships | 100.0 | % | 95.7 | % | 97.1 | % | 98.3 | % | 96.6 | % |
| Semisubmersibles | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| 100.0 | % | 98.2 | % | 98.8 | % | 98.9 | % | 98.5 | % | |
| Jackups | ||||||||||
| HD Ultra-Harsh & Harsh Environment | 100.0 | % | 95.1 | % | 95.7 | % | 92.1 | % | 80.5 | % |
| HD & SD Modern | 99.8 | % | 99.7 | % | 99.8 | % | 94.3 | % | 98.7 | % |
| SD Legacy | 96.9 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
| 99.0 | % | 99.3 | % | 99.1 | % | 95.2 | % | 96.3 | % | |
| Total | 99.3 | % | 98.9 | % | 99.0 | % | 96.0 | % | 97.1 | % |
(1)Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.
19
| Three Months Ended | ||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
AVERAGE DAY RATES (1)
| ||||||||||
| Floaters | ||||||||||
| Drillships | $ | 212,000 | $ | 208,000 | $ | 214,000 | $ | 155,000 | $ | 161,000 |
| Semisubmersibles | 178,000 | 164,000 | 160,000 | 262,000 | 197,000 | |||||
| $ | 197,000 | $ | 198,000 | $ | 206,000 | $ | 190,000 | $ | 172,000 | |
| Jackups | ||||||||||
| HD Ultra-Harsh & Harsh Environment | $ | 141,000 | $ | 140,000 | $ | 120,000 | $ | 138,000 | $ | 129,000 |
| HD & SD Modern | 73,000 | 70,000 | 74,000 | 73,000 | 70,000 | |||||
| SD Legacy | 72,000 | 70,000 | 55,000 | 65,000 | 63,000 | |||||
| $ | 99,000 | $ | 95,000 | $ | 86,000 | $ | 93,000 | $ | 86,000 | |
| Total | $ | 114,000 | $ | 116,000 | $ | 110,000 | $ | 104,000 | $ | 106,000 |
| Other | ||||||||||
| Leased and Managed Rigs | 31,000 | 32,000 | 6,000 | 36,000 | 37,000 | |||||
| Valaris Total | $ | 87,000 | $ | 89,000 | $ | 76,000 | $ | 80,000 | $ | 84,000 |
| ARO | ||||||||||
| Owned Rigs | $ | 99,000 | $ | 98,000 | $ | 116,000 | $ | 116,000 | $ | 115,000 |
Leased Rigs (2)
| 93,000 | 89,000 | 99,000 | 91,000 | 94,000 | |||||
| ARO Total | $ | 96,000 | $ | 93,000 | $ | 109,000 | $ | 102,000 | $ | 103,000 |
(1)Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, lump-sum revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of contract days, adjusted to exclude contract days associated with certain suspension periods, mobilizations, demobilizations and shipyard contracts.
(2)All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs average day rates.
20
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| DRILLSHIPS | ||||||||||
Adjusted Revenues (1)
| $ | 38.4 | $ | 66.4 | $ | 71.1 | $ | 28.9 | $ | 69.3 |
Adjusted operating expense (2)
| 41.6 | 52.8 | 62.0 | 77.6 | 90.6 | |||||
| Rig operating margin | (3.2) | 13.6 | 9.1 | (48.7) | (21.3) | |||||
| Rig operating margin % | (8) | % | 20 | % | 13 | % | (169) | % | (31) | % |
| Other operating expenses | ||||||||||
| Depreciation | 21.4 | 43.0 | 42.8 | 42.4 | 43.1 | |||||
| Loss on impairment | - | - | - | - | 13.5 | |||||
| $ | 21.4 | $ | 43.0 | $ | 42.8 | $ | 42.4 | $ | 56.6 | |
Other operating income (expense) (3)
| (8.8) | (3.2) | (6.9) | 106.7 | (20.9) | |||||
| Operating income (loss) | $ | (33.4) | $ | (32.6) | $ | (40.6) | $ | 15.6 | $ | (98.8) |
Adjusted EBITDA (4)
| (2.5) | 16.1 | 5.1 | 68.3 | (22.9) | |||||
Reactivation costs (5)
| - | - | - | - | - | |||||
| Adjusted EBITDAR | $ | (2.5) | $ | 16.1 | $ | 5.1 | $ | 68.3 | $ | (22.9) |
Preservation costs (5)
| - | - | 1.5 | 28.3 | 10.8 | |||||
| Adjusted EBITDARP | $ | (2.5) | $ | 16.1 | $ | 6.6 | $ | 96.6 | $ | (12.1) |
Stacking costs (5)
| 8.9 | 11.3 | 14.8 | 5.6 | 7.7 | |||||
| Adjusted EBITDARPS | $ | 6.4 | $ | 27.4 | $ | 21.4 | $ | 102.2 | $ | (4.4) |
| Number of Rigs (at quarter end) | ||||||||||
| Total Fleet | 11 | 11 | 11 | 11 | 14 | |||||
| Active Fleet | 4 | 4 | 4 | 5 | 7 | |||||
| Operating Days | 185 | 329 | 352 | 142 | 382 | |||||
| Utilization - Active Fleet | 51 | % | 91 | % | 96 | % | 31 | % | 60 | % |
| Average Day Rate | $ | 212,000 | $ | 208,000 | $ | 214,000 | $ | 155,000 | $ | 161,000 |
(1)Revenues exclusive of amortization and reimbursable items.
(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, gain or loss on sale of assets and other miscellaneous items. Other operating income in the quarter ended September 30, 2020 primarily relates to loss of hire insurance for VALARIS DS-8 following termination of a contract.
(4)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(5)Included in rig operating expense.
21
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| SEMISUBMERSIBLES | ||||||||||
Adjusted Revenues (1)
| $ | 23.7 | $ | 14.1 | $ | 9.4 | $ | 18.9 | $ | 78.4 |
Adjusted operating expense (2)
| 17.4 | 20.9 | 21.8 | 30.1 | 35.3 | |||||
| Rig operating margin | 6.3 | (6.8) | (12.4) | (11.2) | 43.1 | |||||
| Rig operating margin % | 27 | % | (48) | % | (132) | % | (59) | % | 55 | % |
| Other operating expenses | ||||||||||
| Depreciation | 2.2 | 12.9 | 12.7 | 13.2 | 18.7 | |||||
| Loss on impairment | - | 756.5 | - | - | 818.2 | |||||
| $ | 2.2 | $ | 769.4 | $ | 12.7 | $ | 13.2 | $ | 836.9 | |
Other operating income (expense) (3)
| (5.9) | (5.1) | (4.9) | (0.1) | (8.1) | |||||
| Operating income (loss) | $ | (1.8) | $ | (781.3) | $ | (30.0) | $ | (24.5) | $ | (801.9) |
Adjusted EBITDA (4)
| 6.4 | (6.7) | (12.7) | (10.2) | 43.6 | |||||
Reactivation costs (5)
| 0.1 | 5.7 | 1.2 | 0.9 | 1.9 | |||||
| Adjusted EBITDAR | $ | 6.5 | $ | (1.0) | $ | (11.5) | $ | (9.3) | $ | 45.5 |
Preservation costs (5)
| 0.2 | 1.1 | 2.8 | 4.4 | - | |||||
| Adjusted EBITDARP | $ | 6.7 | $ | 0.1 | $ | (8.7) | $ | (4.9) | $ | 45.5 |
Stacking costs (5)
| 1.2 | 0.5 | 0.8 | 3.5 | 2.2 | |||||
| Adjusted EBITDARPS | $ | 7.9 | $ | 0.6 | $ | (7.9) | $ | (1.4) | $ | 47.7 |
| Number of Rigs (at quarter end) | ||||||||||
| Total Fleet | 5 | 5 | 5 | 6 | 9 | |||||
| Active Fleet | 3 | 3 | 3 | 4 | 5 | |||||
| Operating Days | 137 | 90 | 56 | 71 | 157 | |||||
| Utilization - Active Fleet | 50 | % | 33 | % | 20 | % | 19 | % | 34 | % |
| Average Day Rate | $ | 178,000 | $ | 164,000 | $ | 160,000 | $ | 262,000 | $ | 197,000 |
(1)Revenues exclusive of amortization and reimbursable items.
(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, gain or loss on sale of assets and other miscellaneous items.
(4)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(5)Included in rig operating expense.
22
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
|
HD ULTRA-HARSH & HARSH JACKUPS | ||||||||||
Adjusted Revenues (1)
| $ | 90.3 | $ | 82.4 | $ | 76.4 | $ | 80.4 | $ | 74.4 |
Adjusted operating expense (2)
| 71.3 | 55.2 | 62.2 | 60.0 | 63.2 | |||||
| Rig operating margin | 19.0 | 27.2 | 14.2 | 20.4 | 11.2 | |||||
| Rig operating margin % | 21 | % | 33 | % | 19 | % | 25 | % | 15 | % |
| Other operating expenses | ||||||||||
| Depreciation | 13.7 | 26.9 | 27.4 | 26.7 | 26.7 | |||||
| Loss on impairment | - | - | - | - | - | |||||
| $ | 13.7 | $ | 26.9 | $ | 27.4 | $ | 26.7 | $ | 26.7 | |
Other operating income (expense) (3)
| 3.4 | (1.7) | (5.7) | (7.6) | (9.8) | |||||
| Operating income (loss) | $ | 8.7 | $ | (1.4) | $ | (18.9) | $ | (13.9) | $ | (25.3) |
Adjusted EBITDA (4)
| 22.2 | 29.3 | 16.5 | 22.5 | 12.7 | |||||
Reactivation costs (5)
| 20.1 | 1.7 | 0.1 | - | - | |||||
| Adjusted EBITDAR | $ | 42.3 | $ | 31.0 | $ | 16.6 | $ | 22.5 | $ | 12.7 |
Preservation costs (5)
| 0.3 | - | 3.3 | 7.1 | 1.8 | |||||
| Adjusted EBITDARP | $ | 42.6 | $ | 31.0 | $ | 19.9 | $ | 29.6 | $ | 14.5 |
Stacking costs (5)
| 1.0 | 2.8 | 0.9 | (1.1) | - | |||||
| Adjusted EBITDARPS | $ | 43.6 | $ | 33.8 | $ | 20.8 | $ | 28.5 | $ | 14.5 |
| Number of Rigs (at quarter end) | ||||||||||
| Total Fleet | 12 | 13 | 13 | 13 | 13 | |||||
| Active Fleet | 10 | 9 | 9 | 9 | 10 | |||||
| Operating Days | 674 | 582 | 579 | 572 | 572 | |||||
| Utilization - Active Fleet | 82 | % | 92 | % | 67 | % | 78 | % | 63 | % |
| Average Day Rate | $ | 142,000 | $ | 140,000 | $ | 120,000 | $ | 138,000 | $ | 129,000 |
(1)Revenues exclusive of amortization and reimbursable items.
(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, gain or loss on sale of assets and other miscellaneous items.
(4)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(5)Included in rig operating expense.
23
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| HD & SD MODERN JACKUPS | ||||||||||
Adjusted Revenues (1)
| $ | 49.8 | $ | 44.7 | $ | 51.6 | $ | 60.4 | $ | 56.2 |
Adjusted operating expense (2)
| 49.2 | 38.8 | 45.1 | 46.4 | 54.8 | |||||
| Rig operating margin | 0.6 | 5.9 | 6.5 | 14.0 | 1.4 | |||||
| Rig operating margin % | 1 | % | 13 | % | 13 | % | 23 | % | 2 | % |
| Other operating expenses | ||||||||||
| Depreciation | 9.6 | 22.4 | 22.5 | 22.4 | 22.2 | |||||
| Loss on impairment | - | - | - | - | 0.5 | |||||
| $ | 9.6 | $ | 22.4 | $ | 22.5 | $ | 22.4 | $ | 22.7 | |
Other operating income (expense) (3)
| (2.6) | (4.9) | (6.0) | (7.0) | (6.3) | |||||
| Operating income (loss) | $ | (11.6) | $ | (21.4) | $ | (22.0) | $ | (15.4) | $ | (27.6) |
Adjusted EBITDA (4)
| 2.9 | 8.3 | 9.8 | 16.3 | 4.8 | |||||
Reactivation costs (5)
| 3.8 | 3.7 | 0.3 | - | - | |||||
| Adjusted EBITDAR | $ | 6.7 | $ | 12.0 | $ | 10.1 | $ | 16.3 | $ | 4.8 |
Preservation costs (5)
| - | 0.3 | 1.9 | 1.8 | 2.6 | |||||
| Adjusted EBITDARP | $ | 6.7 | $ | 12.3 | $ | 12.0 | $ | 18.1 | $ | 7.4 |
Stacking costs (5)
| 5.5 | 1.7 | 5.5 | 6.3 | 2.6 | |||||
| Adjusted EBITDARPS | $ | 12.2 | $ | 14.0 | $ | 17.5 | $ | 24.4 | $ | 10.0 |
| Number of Rigs (at quarter end) | ||||||||||
| Total Fleet | 19 | 19 | 19 | 19 | 20 | |||||
| Active Fleet | 11 | 11 | 11 | 11 | 12 | |||||
| Operating Days | 742 | 683 | 669 | 750 | 842 | |||||
| Utilization - Active Fleet | 74 | % | 84 | % | 68 | % | 82 | % | 71 | % |
| Average Day Rate | $ | 73,000 | $ | 70,000 | $ | 74,000 | $ | 73,000 | $ | 70,000 |
(1)Revenues exclusive of amortization and reimbursable items.
(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, gain or loss on sale of assets and other miscellaneous items.
(4)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(5)Included in rig operating expense.
24
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| SD LEGACY JACKUPS | ||||||||||
Adjusted Revenues (1)
| $ | 23.5 | $ | 24.6 | $ | 19.4 | $ | 25.5 | $ | 31.5 |
Adjusted operating expense (2)
| 11.8 | 12.1 | 12.3 | 15.9 | 18.2 | |||||
| Rig operating margin | 11.7 | 12.5 | 7.1 | 9.6 | 13.3 | |||||
| Rig operating margin % | 50 | % | 51 | % | 37 | % | 38 | % | 42 | % |
| Other operating expenses | ||||||||||
| Depreciation | 1.6 | 2.8 | 2.7 | 3.5 | 3.7 | |||||
| Loss on impairment | - | - | - | - | - | |||||
| $ | 1.6 | $ | 2.8 | $ | 2.7 | $ | 3.5 | $ | 3.7 | |
Other operating income (expense) (3)
| (2.1) | (1.8) | (1.2) | (2.9) | (6.3) | |||||
| Operating income (loss) | $ | 8.0 | $ | 7.9 | $ | 3.2 | $ | 3.2 | $ | 3.3 |
Adjusted EBITDA (4)
| 12.0 | 13.0 | 7.3 | 10.2 | 12.7 | |||||
Reactivation costs (5)
| - | - | - | - | - | |||||
| Adjusted EBITDAR | $ | 12.0 | $ | 13.0 | $ | 7.3 | $ | 10.2 | $ | 12.7 |
Preservation costs (5)
| - | - | - | - | - | |||||
| Adjusted EBITDARP | $ | 12.0 | $ | 13.0 | $ | 7.3 | $ | 10.2 | $ | 12.7 |
Stacking costs (5)
| - | - | - | - | - | |||||
| Adjusted EBITDARPS | $ | 12.0 | $ | 13.0 | $ | 7.3 | $ | 10.2 | $ | 12.7 |
| Number of Rigs (at quarter end) | ||||||||||
| Total Fleet | 4 | 4 | 4 | 6 | 7 | |||||
| Active Fleet | 4 | 4 | 4 | 6 | 7 | |||||
| Operating Days | 339 | 360 | 367 | 366 | 481 | |||||
| Utilization - Active Fleet | 93 | % | 100 | % | 100 | % | 75 | % | 88 | % |
| Average Day Rate | $ | 71,000 | $ | 70,000 | $ | 55,000 | $ | 65,000 | $ | 63,000 |
(1)Revenues exclusive of amortization and reimbursable items.
(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, gain or loss on sale of assets and other miscellaneous items.
(4)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(5)Included in rig operating expense.
25
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
ADJUSTED EBITDA
| ||||||||||
Floaters
| ||||||||||
Drillships (1)
| $ | (2.5) | $ | 16.1 | $ | 5.1 | $ | 68.3 | $ | (22.9) |
Semisubmersibles (1)
| 6.4 | (6.7) | (12.7) | (10.2) | 43.6 | |||||
| $ | 3.9 | $ | 9.4 | $ | (7.6) | $ | 58.1 | $ | 20.7 | |
| Jackups | ||||||||||
HD Ultra-Harsh & Harsh (1)
| $ | 22.2 | $ | 29.3 | $ | 16.5 | $ | 22.5 | $ | 12.7 |
HD & SD - Modern (1)
| 2.9 | 8.3 | 9.8 | 16.3 | 4.8 | |||||
SD - Legacy (1)
| 12.0 | 13.0 | 7.3 | 10.2 | 12.7 | |||||
| $ | 37.1 | $ | 50.6 | $ | 33.6 | $ | 49.0 | $ | 30.2 | |
| Total | $ | 41.0 | $ | 60.0 | $ | 26.0 | $ | 107.1 | $ | 50.9 |
| Other | ||||||||||
Leased and Managed Rigs (1)
| 22.9 | 22.7 | 24.0 | 25.3 | 24.6 | |||||
| Total | $ | 63.9 | $ | 82.7 | $ | 50.0 | $ | 132.4 | $ | 75.5 |
| Support costs | ||||||||||
| General and administrative expense | $ | 19.1 | $ | 24.3 | $ | 26.3 | $ | 72.0 | $ | 62.7 |
| Onshore support costs | 29.1 | 32.2 | 35.6 | 37.9 | 41.6 | |||||
| $ | 48.2 | $ | 56.5 | $ | 61.9 | $ | 109.9 | $ | 104.3 | |
| Add (subtract): | ||||||||||
| Merger transaction and integration cost | 0.9 | 1.9 | 2.1 | 50.7 | 40.2 | |||||
| Valaris Total | $ | 16.6 | $ | 28.1 | $ | (9.8) | $ | 73.2 | $ | 11.4 |
| ARO | ||||||||||
| Total | 27.8 | 33.4 | 46.1 | 40.8 | 26.4 | |||||
| Valaris 50% Share | 13.9 | 16.7 | 23.1 | 20.4 | 13.2 | |||||
Adjusted Total (2)
| $ | 30.5 | $ | 44.8 | $ | 13.3 | $ | 93.6 | $ | 24.6 |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
(2)Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.
26
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| ADJUSTED EBITDARPS | ||||||||||
| Floaters | ||||||||||
Drillships (1)
| $ | 6.4 | $ | 27.4 | $ | 21.4 | $ | 102.2 | $ | (4.4) |
Semisubmersibles (1)
| 7.9 | 0.6 | (7.9) | (1.4) | 47.7 | |||||
| $ | 14.3 | $ | 28.0 | $ | 13.5 | $ | 100.8 | $ | 43.3 | |
| Jackups | ||||||||||
HD Ultra-Harsh & Harsh (1)
| $ | 43.6 | $ | 33.8 | $ | 20.8 | $ | 28.5 | $ | 14.5 |
HD & SD - Modern (1)
| 12.2 | 14.0 | 17.5 | 24.4 | 10.0 | |||||
SD - Legacy (1)
| 12.0 | 13.0 | 7.3 | 10.2 | 12.7 | |||||
| $ | 67.8 | $ | 60.8 | $ | 45.6 | $ | 63.1 | $ | 37.2 | |
| Total | $ | 82.1 | $ | 88.8 | $ | 59.1 | $ | 163.9 | $ | 80.5 |
| Other | ||||||||||
Leased and Managed Rigs (1)
| 22.9 | 22.7 | 24.0 | 25.3 | 24.6 | |||||
| Total | $ | 105.0 | $ | 111.5 | $ | 83.1 | $ | 189.2 | $ | 105.1 |
| Support costs | ||||||||||
| General and administrative expense | $ | 19.1 | $ | 24.3 | $ | 26.3 | $ | 72.0 | $ | 62.7 |
| Onshore support costs | 29.1 | 32.2 | 35.6 | 37.9 | 41.6 | |||||
| $ | 48.2 | $ | 56.5 | $ | 61.9 | $ | 109.9 | $ | 104.3 | |
| Add (subtract): | ||||||||||
| Merger transaction and integration cost | 0.9 | 1.9 | 2.1 | 50.7 | 40.2 | |||||
| Valaris Total | $ | 57.7 | $ | 56.9 | $ | 23.3 | $ | 130.0 | $ | 41.0 |
| ARO | ||||||||||
| Total | 27.8 | 33.4 | 46.1 | 40.8 | 26.4 | |||||
| Valaris 50% Share | 13.9 | 16.7 | 23.1 | 20.4 | 13.2 | |||||
Adjusted Total (2)
| $ | 71.6 | $ | 73.6 | $ | 46.4 | $ | 150.4 | $ | 54.2 |
(1)EBITDARPS is earnings before interest, tax, depreciation, amortization, reactivation, preservation and stacking costs. Adjusted EBITDARPS for asset category excludes onshore support costs and general and administrative expense.
(2)Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.
27
| (in millions) | Three Months Ended | |||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
ADJUSTED EBITDA
| ||||||||||
Active Fleet (1)
| $ | 58.1 | $ | 77.7 | $ | 57.5 | $ | 163.0 | $ | 78.6 |
Leased and Managed Rigs (1)
| 22.9 | 22.7 | 24.0 | 25.3 | 24.6 | |||||
| $ | 81.0 | $ | 100.4 | $ | 81.5 | $ | 188.3 | $ | 103.2 | |
Stacked Fleet (1)
| (17.1) | (17.7) | (31.5) | (55.9) | (27.7) | |||||
| $ | 63.9 | $ | 82.7 | $ | 50.0 | $ | 132.4 | $ | 75.5 | |
| Support costs | ||||||||||
| General and administrative expense | $ | 19.1 | $ | 24.3 | $ | 26.3 | $ | 72.0 | $ | 62.7 |
| Onshore support costs | 29.1 | 32.2 | 35.6 | 37.9 | 41.6 | |||||
| $ | 48.2 | $ | 56.5 | $ | 61.9 | $ | 109.9 | $ | 104.3 | |
| Add (subtract): | ||||||||||
| Merger transaction and integration cost | 0.9 | 1.9 | 2.1 | 50.7 | 40.2 | |||||
| Valaris Total | $ | 16.6 | $ | 28.1 | $ | (9.8) | $ | 73.2 | $ | 11.4 |
| Reactivation costs | 24.0 | 11.1 | 1.6 | 0.9 | 1.9 | |||||
| Adjusted EBITDAR | $ | 40.6 | $ | 39.2 | $ | (8.2) | $ | 74.1 | $ | 13.3 |
| Preservation costs | 0.5 | 1.4 | 9.5 | 41.6 | 15.2 | |||||
| Adjusted EBITDARP | $ | 41.1 | $ | 40.6 | $ | 1.3 | $ | 115.7 | $ | 28.5 |
| Stacking costs | 16.6 | 16.3 | 22.0 | 14.3 | 12.5 | |||||
| Adjusted EBITDARPS | $ | 57.7 | $ | 56.9 | $ | 23.3 | $ | 130.0 | $ | 41.0 |
| ARO | ||||||||||
| Total | 27.8 | 33.4 | 46.1 | 40.8 | 26.4 | |||||
| Valaris 50% Share | 13.9 | 16.7 | 23.1 | 20.4 | 13.2 | |||||
Adjusted Total (2)
| $ | 71.6 | $ | 73.6 | $ | 46.4 | $ | 150.4 | $ | 54.2 |
(1)Adjusted EBITDA for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.
(2)Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.
28
| ARO DRILLING |
| CONDENSED BALANCE SHEET INFORMATION |
| (In millions) |
| (Unaudited) |
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| Cash | $ | 318.2 | $ | 275.4 | $ | 237.7 | $ | 270.5 | $ | 258.8 |
| Other current assets | 81.7 | 89.2 | 120.9 | 121.4 | 90.4 | |||||
| Non-current assets | 782.8 | 789.0 | 804.0 | 898.2 | 924.1 | |||||
| Total assets | $ | 1,182.7 | $ | 1,153.6 | $ | 1,162.6 | $ | 1,290.1 | $ | 1,273.3 |
| Current liabilities | $ | 74.9 | $ | 52.3 | $ | 70.8 | $ | 230.8 | $ | 206.8 |
| Non-current liabilities | 950.3 | 952.1 | 950.8 | 940.8 | 973.4 | |||||
| Total liabilities | $ | 1,025.2 | $ | 1,004.4 | $ | 1,021.6 | $ | 1,171.6 | $ | 1,180.2 |
| Shareholders' Equity | $ | 157.5 | $ | 149.2 | $ | 141.0 | $ | 118.5 | $ | 93.1 |
| Total liabilities and shareholders' equity | $ | 1,182.7 | $ | 1,153.6 | $ | 1,162.6 | $ | 1,290.1 | $ | 1,273.3 |
| ARO DRILLING |
| CONDENSED INCOME STATEMENT INFORMATION |
| (In millions) |
| (Unaudited) |
| Three Months Ended | ||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| Revenues | $ | 124.8 | $ | 122.7 | $ | 117.5 | $ | 145.6 | $ | 146.0 |
| Operating expenses | ||||||||||
| Contract drilling (exclusive of depreciation) | 92.7 | 86.3 | 68.4 | 99.0 | 112.5 | |||||
| Depreciation | 14.6 | 16.1 | 13.7 | 14.8 | 13.3 | |||||
| General and administrative | 4.3 | 3.0 | 3.0 | 5.8 | 7.1 | |||||
| Operating income | 13.2 | 17.3 | 32.4 | 26.0 | 13.1 | |||||
| Other expense, net | 3.1 | 4.5 | 6.7 | 6.7 | 6.7 | |||||
| Provision for income taxes | 1.9 | 4.5 | 19.6 | (6.1) | (.2) | |||||
| Net income | $ | 8.2 | $ | 8.3 | $ | 6.1 | $ | 25.4 | $ | 6.6 |
| EBITDA | $ | 27.8 | $ | 33.4 | $ | 46.1 | $ | 40.8 | $ | 26.4 |
29
Non-GAAP Financial Measures (Unaudited)
To supplement Valaris' condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with adjusted EBITDA, adjusted EBITDAR and adjusted EBITDARPS, 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, (gain) loss on asset disposals, 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 'Adjusted EBITDARPS' as Adjusted EBITDA before reactivation, preservation and stacking costs. Adjusted EBITDARPS is a non-GAAP measure that our management uses to assess the performance of our active fleet. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDARPS 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 EBITDARPS 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.
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.
30
Reconciliation of Net Loss to Adjusted EBITDA
A reconciliation of net loss as reported to Adjusted EBITDA for the Two Months Ended June 30, 2021 (Successor), One Month Ended April 30, 2021 (Predeceesor) and quarters ended June 30, 2020 is included in the tables below (in millions):
| Successor | Predecessor | |||||||
| Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2020 |
Three Months Ended March 31, 2021 | |||||
| VALARIS | ||||||||
| Net loss | $ | (4.1) | $ | (3,556.2) | $ | (3,560.3) | $ | (907.6) |
| Add (subtract): | ||||||||
| Income tax expense (benefit) | 15.1 | (15.5) | (0.4) | 31.7 | ||||
| Interest expense | 8.0 | 1.1 | 9.1 | 1.3 | ||||
| Reorganization items | 4.1 | 3,532.4 | 3,536.5 | 52.2 | ||||
| Other income | (13.5) | 0.2 | (13.3) | (23.7) | ||||
| Operating loss | 9.6 | (38.0) | (28.4) | (846.1) | ||||
| Add (subtract): | ||||||||
| Loss on impairment | - | - | - | 756.5 | ||||
| Depreciation expense | 16.6 | 37.5 | 54.1 | 122.1 | ||||
Amortization, net (1)
| (0.3) | (0.2) | (0.5) | (4.6) | ||||
| Merger transaction and integration costs | 1.0 | 0.9 | 1.9 | 3.5 | ||||
| Equity in (earnings) losses of ARO | (4.8) | (1.2) | (6.0) | (1.9) | ||||
| (Gain) loss on asset disposals | 0.1 | (4.6) | (4.5) | (1.4) | ||||
| Adjusted EBITDA | $ | 22.2 | $ | (5.6) | $ | 16.6 | 28.1 |
(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, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | ||||||
| ARO | ||||||||||
| Net Income | $ | 8.2 | $ | 8.3 | $ | 6.1 | $ | 25.4 | $ | 6.6 |
| Add (subtract): | ||||||||||
| Income tax expense (benefit) | 1.9 | 4.5 | 19.6 | (6.1) | (0.2) | |||||
| Other expense, net | 3.1 | 4.5 | 6.7 | 6.7 | 6.7 | |||||
| Operating income | $ | 13.2 | $ | 17.3 | $ | 32.4 | $ | 26.0 | $ | 13.1 |
| Add (subtract): | ||||||||||
| Depreciation expense | 14.6 | 16.1 | 13.7 | 14.8 | 13.3 | |||||
| EBITDA | $ | 27.8 | $ | 33.4 | $ | 46.1 | $ | 40.8 | $ | 26.4 |
31
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
DRILLSHIPS
| ||||||||||||||
| Revenue | $ | 28.9 | $ | 13.7 | $ | 42.6 | $ | 81.0 | $ | 93.8 | $ | 35.4 | $ | 76.2 |
| Add (subtract): | ||||||||||||||
| Reimbursable revenues | (2.4) | (1.3) | (3.7) | (7.4) | (11.5) | (5.5) | (6.3) | |||||||
| Amortized revenues | - | (0.5) | (0.5) | (7.2) | (11.2) | (1.0) | (0.6) | |||||||
| Adjusted revenues | $ | 26.5 | $ | 11.9 | $ | 38.4 | $ | 66.4 | $ | 71.1 | $ | 28.9 | $ | 69.3 |
| Operating expenses | 39.8 | 36.2 | 76.0 | 113.6 | 134.4 | 137.9 | 175.0 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | (7.2) | (15.3) | (22.5) | (46.6) | (45.5) | (43.3) | (48.6) | |||||||
| Loss on impairment | - | - | - | - | - | - | (13.5) | |||||||
| Gain (loss) on sale of assets | 0.1 | (0.2) | (0.1) | 0.5 | - | (0.4) | - | |||||||
| Reimbursable expenses | (2.2) | (1.0) | (3.2) | (5.0) | (9.5) | (4.9) | (5.0) | |||||||
| Support and other costs | (5.5) | (3.1) | (8.6) | (9.7) | (17.4) | (11.7) | (17.3) | |||||||
| Adjusted operating expenses | $ | 25.0 | $ | 16.6 | $ | 41.6 | $ | 52.8 | $ | 62.0 | $ | 77.6 | $ | 90.6 |
| Operating income (loss) | (10.9) | (22.5) | (33.4) | (32.6) | (40.6) | 15.6 | (98.8) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 7.2 | 14.8 | 22.0 | 39.4 | 34.3 | 42.3 | 48.0 | |||||||
| Loss on impairment | - | - | - | - | - | - | 13.5 | |||||||
| Gain (loss) on sale of assets | (0.1) | 0.2 | 0.1 | (0.5) | - | 0.4 | - | |||||||
| Support and other costs | 5.7 | 3.1 | 8.8 | 9.8 | 11.4 | 10.0 | 14.4 | |||||||
Adjusted EBITDA (1)
| $ | 1.9 | $ | (4.4) | $ | (2.5) | $ | 16.1 | $ | 5.1 | $ | 68.3 | $ | (22.9) |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
32
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
SEMISUBMERSIBLES
| ||||||||||||||
| Revenue | $ | 20.9 | $ | 4.7 | $ | 25.6 | $ | 16.3 | $ | 11.8 | $ | 21.7 | $ | 87.4 |
| Add (subtract): | ||||||||||||||
| Reimbursable revenues | (1.8) | (0.1) | (1.9) | (2.2) | (2.4) | (3.3) | (5.0) | |||||||
| Amortized revenues | - | - | - | - | - | 0.5 | (4.0) | |||||||
| Adjusted revenues | $ | 19.1 | $ | 4.6 | $ | 23.7 | $ | 14.1 | $ | 9.4 | $ | 18.9 | $ | 78.4 |
| Operating expenses | 21.5 | 5.9 | 27.4 | 797.6 | 41.8 | 46.2 | 889.3 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | (1.9) | (1.6) | (3.5) | (13.0) | (12.7) | (12.8) | (22.7) | |||||||
| Loss on impairment | - | - | - | (756.5) | - | - | (818.2) | |||||||
| Gain (loss) on sale of assets | - | (0.1) | (0.1) | 0.2 | 0.7 | 7.5 | (0.2) | |||||||
| Reimbursable expenses | (1.5) | (0.2) | (1.7) | (2.1) | (2.4) | (2.7) | (4.5) | |||||||
| Support and other costs | (3.0) | (1.7) | (4.7) | (5.3) | (5.6) | (8.1) | (8.4) | |||||||
| Adjusted operating expenses | $ | 15.1 | $ | 2.3 | $ | 17.4 | $ | 20.9 | $ | 21.8 | $ | 30.1 | $ | 35.3 |
| Operating income (loss) | (0.6) | (1.2) | (1.8) | (781.3) | (30.0) | (24.5) | (801.9) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 1.9 | 1.6 | 3.5 | 13.0 | 12.7 | 13.3 | 18.7 | |||||||
| Loss on impairment | - | - | - | 756.5 | - | - | 818.2 | |||||||
| Gain (loss) on sale of assets | - | 0.1 | 0.1 | (0.2) | (0.7) | (7.5) | 0.2 | |||||||
| Support and other costs | 2.9 | 1.7 | 4.6 | 5.3 | 5.3 | 8.5 | 8.4 | |||||||
Adjusted EBITDA (1)
| $ | 4.2 | $ | 2.2 | $ | 6.4 | $ | (6.7) | $ | (12.7) | $ | (10.2) | $ | 43.6 |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
33
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
HD ULTRA-HARSH & HARSH JACKUPS
| ||||||||||||||
| Revenue | $ | 70.9 | $ | 34.0 | $ | 104.9 | $ | 95.5 | $ | 96.2 | $ | 91.2 | $ | 89.4 |
| Add (subtract): | ||||||||||||||
| Reimbursable revenues | (9.1) | (4.2) | (13.3) | (9.7) | (17.3) | (8.1) | (12.0) | |||||||
| Amortized revenues | (0.2) | (1.1) | (1.3) | (3.4) | (2.5) | (2.7) | (3.0) | |||||||
| Adjusted revenues | $ | 61.6 | $ | 28.7 | $ | 90.3 | $ | 82.4 | $ | 76.4 | $ | 80.4 | $ | 74.4 |
| Operating expenses | 59.4 | 36.8 | 96.2 | 96.9 | 115.1 | 105.1 | 114.7 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization | (5.0) | (9.0) | (14.0) | (28.8) | (28.3) | (29.5) | (32.4) | |||||||
| Gain (loss) on sale of assets | (0.3) | 5.1 | 4.8 | 0.3 | 0.1 | - | 0.1 | |||||||
| Reimbursable expenses | (6.8) | (3.2) | (10.0) | (7.6) | (15.1) | (6.1) | (10.4) | |||||||
| Support and other costs | (3.7) | (2.0) | (5.7) | (5.6) | (9.6) | (9.5) | (8.8) | |||||||
| Adjusted operating expenses | $ | 43.6 | $ | 27.7 | $ | 71.3 | $ | 55.2 | $ | 62.2 | $ | 60.0 | $ | 63.2 |
| Operating income (loss) | 11.5 | (2.8) | 8.7 | (1.4) | (18.9) | (13.9) | (25.3) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 4.8 | 7.9 | 12.7 | 25.4 | 25.8 | 26.8 | 29.4 | |||||||
| Gain (loss) on sale of assets | 0.3 | (5.1) | (4.8) | (0.3) | (0.1) | - | (0.1) | |||||||
| Support and other costs | 3.6 | 2.0 | 5.6 | 5.6 | 9.7 | 9.6 | 8.7 | |||||||
Adjusted EBITDA (1)
| $ | 20.2 | $ | 2.0 | $ | 22.2 | $ | 29.3 | $ | 16.5 | $ | 22.5 | $ | 12.7 |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
34
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
HD & SD MODERN JACKUPS
| ||||||||||||||
| Revenue | $ | 40.7 | $ | 17.0 | $ | 57.7 | $ | 50.5 | $ | 61.2 | $ | 67.8 | $ | 63.5 |
| Add (subtract): | ||||||||||||||
| Reimbursable revenues | (3.5) | (2.3) | (5.8) | (4.2) | (7.8) | (5.3) | (5.2) | |||||||
| Amortized revenues | (1.6) | (0.5) | (2.1) | (1.6) | (1.8) | (2.1) | (2.1) | |||||||
| Adjusted revenues | $ | 35.6 | $ | 14.2 | $ | 49.8 | $ | 44.7 | $ | 51.6 | $ | 60.4 | $ | 56.2 |
| Operating expenses | 41.3 | 28.0 | 69.3 | 71.9 | 83.2 | 83.2 | 91.1 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization | (2.2) | (8.1) | (10.3) | (24.5) | (25.7) | (26.7) | (25.6) | |||||||
| Loss on impairment | - | - | - | - | - | - | (0.5) | |||||||
| Gain (loss) on sale of assets | - | (0.1) | (0.1) | 0.3 | 0.5 | 1.2 | 0.1 | |||||||
| Reimbursable expenses | (2.2) | (1.2) | (3.4) | (1.8) | (4.8) | (3.1) | (2.7) | |||||||
| Support and other costs | (4.1) | (2.2) | (6.3) | (7.1) | (8.1) | (8.2) | (7.6) | |||||||
| Adjusted operating expenses | $ | 32.8 | $ | 16.4 | $ | 49.2 | $ | 38.8 | $ | 45.1 | $ | 46.4 | $ | 54.8 |
| Operating income (loss) | (0.6) | (11.0) | (11.6) | (21.4) | (22.0) | (15.4) | (27.6) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 0.6 | 7.6 | 8.2 | 22.9 | 23.9 | 24.6 | 23.5 | |||||||
| Loss on impairment | - | - | - | - | - | - | 0.5 | |||||||
| Gain (loss) on sale of assets | - | 0.1 | 0.1 | (0.3) | (0.5) | (1.2) | (0.1) | |||||||
| Support and other costs | 4.0 | 2.2 | 6.2 | 7.1 | 8.4 | 8.3 | 8.5 | |||||||
Adjusted EBITDA (1)
| $ | 4.0 | $ | (1.1) | $ | 2.9 | $ | 8.3 | $ | 9.8 | $ | 16.3 | $ | 4.8 |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
35
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
SD LEGACY JACKUPS
| ||||||||||||||
| Revenue | $ | 16.8 | $ | 8.8 | $ | 25.6 | $ | 26.6 | $ | 22.0 | $ | 27.8 | $ | 33.3 |
| Add (subtract): | ||||||||||||||
| Reimbursable revenues | (1.4) | (0.5) | (1.9) | (1.5) | (1.9) | (1.3) | (0.7) | |||||||
| Amortized revenues | - | (0.2) | (0.2) | (0.5) | (0.7) | (1.0) | (1.1) | |||||||
| Adjusted revenues | $ | 15.4 | $ | 8.1 | $ | 23.5 | $ | 24.6 | $ | 19.4 | $ | 25.5 | $ | 31.5 |
| Operating expenses | 11.5 | 6.1 | 17.6 | 18.7 | 18.8 | 24.6 | 30.0 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | (0.7) | (1.0) | (1.7) | (2.9) | (3.3) | (4.2) | (4.9) | |||||||
| Gain (loss) on sale of assets | - | - | - | 0.1 | 1.9 | - | (0.9) | |||||||
| Reimbursable expenses | (1.2) | (0.4) | (1.6) | (1.0) | (1.7) | (0.7) | (0.8) | |||||||
| Support and other costs | (1.7) | (0.8) | (2.5) | (2.8) | (3.4) | (3.8) | (5.2) | |||||||
| Adjusted operating expenses | $ | 7.9 | $ | 3.9 | $ | 11.8 | $ | 12.1 | $ | 12.3 | $ | 15.9 | $ | 18.2 |
| Operating income (loss) | 5.3 | 2.7 | 8.0 | 7.9 | 3.2 | 3.2 | 3.3 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 0.7 | 0.8 | 1.5 | 2.4 | 2.6 | 3.2 | 3.8 | |||||||
| Gain (loss) on sale of assets | - | - | - | (0.1) | (1.9) | - | 0.9 | |||||||
| Support and other costs | 1.7 | 0.8 | 2.5 | 2.8 | 3.4 | 3.8 | 4.7 | |||||||
Adjusted EBITDA (1)
| $ | 7.7 | $ | 4.3 | $ | 12.0 | $ | 13.0 | $ | 7.3 | $ | 10.2 | $ | 12.7 |
(1)Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.
36
| Three Months Ended | ||||||||||||||
| Successor | Predecessor | Combined (Non-GAAP) | Predecessor | |||||||||||
| (in millions) | Two Months Ended June 30, 2021 | One Month Ended April 30, 2021 | Three Months Ended June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||
ACTIVE FLEET
| ||||||||||||||
| Operating income (loss) | $ | 20.3 | $ | (21.2) | $ | (0.9) | $ | (432.7) | $ | (33.5) | $ | 55.9 | $ | (450.9) |
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 11.9 | 19.0 | 30.9 | 62.0 | 56.0 | 67.5 | 70.3 | |||||||
| Loss on impairment | - | - | - | 419.2 | - | - | 413.9 | |||||||
| Gain (loss) on sale of assets | (0.1) | 0.5 | 0.4 | (1.4) | (3.2) | (0.6) | 0.6 | |||||||
| Support and other costs | 17.9 | 9.8 | 27.7 | 30.6 | 38.2 | 40.2 | 44.7 | |||||||
Adjusted EBITDA (1)
| $ | 50.0 | $ | 8.1 | $ | 58.1 | $ | 77.7 | $ | 57.5 | $ | 163.0 | $ | 78.6 |
LEASED AND MANAGED RIGS
| ||||||||||||||
| Operating income (loss) | 13.0 | 2.6 | 15.6 | 7.7 | (19.9) | 10.7 | 4.3 | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 0.9 | 3.9 | 4.8 | 12.3 | 12.3 | 12.2 | 12.4 | |||||||
| Loss on impairment | - | - | - | - | - | - | 5.7 | |||||||
| Gain (loss) on sale of assets | - | - | - | (0.1) | - | - | - | |||||||
| Support and other costs | 1.7 | 0.8 | 2.5 | 2.8 | 31.6 | 2.4 | 2.2 | |||||||
Adjusted EBITDA (1)
| $ | 15.6 | $ | 7.3 | $ | 22.9 | $ | 22.7 | $ | 24.0 | $ | 25.3 | $ | 24.6 |
STACKED FLEET
| ||||||||||||||
| Operating income (loss) | (15.6) | (13.6) | (29.2) | (396.1) | (74.8) | (90.9) | (499.4) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 3.3 | 13.7 | 17.0 | 41.1 | 43.3 | 42.7 | 53.1 | |||||||
| Loss on impairment | - | - | - | 337.3 | - | - | 418.3 | |||||||
| Gain (loss) on sale of assets | 0.3 | (5.2) | (4.9) | - | - | (7.7) | 0.3 | |||||||
| Support and other costs | - | - | - | - | - | - | - | |||||||
Adjusted EBITDA (1)
| $ | (12.0) | $ | (5.1) | $ | (17.1) | $ | (17.7) | $ | (31.5) | $ | (55.9) | $ | (27.7) |
VALARIS TOTAL
| ||||||||||||||
| Operating income (loss) | 17.7 | (32.2) | (14.5) | (821.1) | (128.2) | (24.3) | (946.0) | |||||||
| Add (subtract): | ||||||||||||||
| Depreciation and amortization, net | 16.1 | 36.6 | 52.7 | 115.4 | 111.6 | 122.4 | 135.8 | |||||||
| Loss on impairment | - | - | - | 756.5 | - | - | 837.9 | |||||||
| Gain (loss) on sale of assets | 0.2 | (4.7) | (4.5) | (1.5) | (3.2) | (8.3) | 0.9 | |||||||
| Support and other costs | 19.6 | 10.6 | 30.2 | 33.4 | 69.8 | 42.6 | 46.9 | |||||||
Adjusted EBITDA (1)
| $ | 53.6 | $ | 10.3 | $ | 63.9 | $ | 82.7 | $ | 50.0 | $ | 132.4 | $ | 75.5 |
(1)Adjusted EBITDA for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.
37
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Disclaimer
Valaris Ltd. published this content on 03 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 11:12:21 UTC.
