Valaris Reports First Quarter 2022 Results

Continued Strong Operational Performance – 99% Revenue Efficiency in 1Q 2022

Four Floater Reactivation Projects in Progress for Contracts Expected to Commence in 2Q 2022

Drillship VALARIS DS-12 Awarded Contract Offshore West Africa

Jackups VALARIS 113 and 114 Sold for a Total of $125 Million

HAMILTON, Bermuda–(BUSINESS WIRE)–Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) today reported first quarter 2022 results.

President and Chief Executive Officer Anton Dibowitz said, “The heart of our business, and our primary focus every day, is on delivering safe, reliable and efficient operations to our customers. I would like to thank the Valaris team for continuing to deliver the strong performance that our customers have come to expect from us, achieving 99% revenue efficiency during the first quarter.”

Dibowitz commented, “We are currently in the midst of a transitional period as we incur reactivation costs to put three drillships and one semisubmersible back to work on long-term contracts. I am proud of the progress that the entire Valaris team has made in executing these major projects concurrently, particularly considering the ongoing pandemic, personnel and global supply chain challenges. VALARIS DPS-1 recently returned to work, and we continue to expect that all four floaters will be on contract by the middle of the year with financial results expected to improve meaningfully as these reactivations are completed.”

Dibowitz added, “Very recently, we were awarded a contract with a major operator offshore Angola and the Republic of Congo for drillship VALARIS DS-12. The operating rate for this contract, which is expected to take place during the first quarter 2023, is at a level not seen in the past seven years for drillship work offshore West Africa, providing further evidence of the improvement in floater day rates across geographies.”

Dibowitz concluded, “We continue to take a rational approach to fleet management, including regularly assessing our fleet for retirement and divestiture candidates. In this regard, we recently sold two jackups, VALARIS 113 and 114, to ADES for a total of $125 million, a value which is highly accretive to our shareholders. Each of these rigs had been stacked for more than six years and would have required meaningful capital to reactivate.”

First Quarter Review

Revenues increased to $318 million in the first quarter 2022 from $306 million in the fourth quarter 2021. Excluding reimbursable items, revenues increased to $291 million in the first quarter from $283 million in the fourth quarter primarily due to higher utilization for the jackup fleet and higher average day rates for the other segment, partially offset by lower utilization for the floater fleet.

Contract drilling expense increased to $331 million in the first quarter 2022 from $286 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $305 million in the first quarter from $264 million in the fourth quarter, primarily due to higher rig reactivation costs, which increased to $62 million in the first quarter from $37 million in the fourth quarter, as we prepare four floaters for long-term contracts that are expected to commence in the second quarter. The remaining variance was due to higher personnel costs, higher repair and maintenance costs and higher mobilization costs.

Depreciation expense decreased to $23 million in the first quarter 2022 from $25 million in the fourth quarter 2021. General and administrative expense increased marginally to $19 million in the first quarter 2022 from $18 million in the fourth quarter 2021.

Other income decreased to $9 million in the first quarter 2022 from $21 million in the fourth quarter 2021. First quarter other income included a gain on sale of assets of $2 million related to the sale of jackup VALARIS 67 compared to a $21 million gain on sale of assets related to the sale of jackups VALARIS 22, 37 and 142 in the fourth quarter. The remaining variance is primarily due to lower reorganization-related professional fees in the first quarter as compared to the fourth quarter.

Tax benefit decreased to $1 million in the first quarter 2022 from $31 million in the fourth quarter 2021. The first quarter tax provision included $15 million of discrete tax benefit primarily related to a reduction in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. The fourth quarter tax provision included $30 million of discrete tax benefit primarily related to a reduction in liabilities for unrecognized tax benefits associated with tax positions taken in prior years and deferred tax benefits associated with Swiss tax reform. Adjusted for discrete items, tax expense of $14 million in the first quarter compared to a tax benefit of $1 million in the fourth quarter. The increase in tax expense is primarily due to changes in the relative components of our earnings generated in tax jurisdictions with higher tax rates compared to the prior quarter, and to a reduction in deferred tax valuation allowances in the prior quarter.

Net loss was $40 million in the first quarter 2022 compared to net income of $28 million in the fourth quarter 2021. Adjusted EBITDA decreased to negative $31 million in the first quarter from $3 million in the fourth quarter. Adjusted EBITDAR decreased to $31 million in the first quarter from $40 million in the fourth quarter.

Segment Review

Floaters

Floater revenues decreased marginally to $100 million in the first quarter 2022 from $101 million in the fourth quarter 2021. Excluding reimbursable items, revenues decreased to $87 million in the first quarter from $93 million in the fourth quarter. The sequential quarter decline was primarily due to semisubmersible VALARIS DPS-5 being out of service for most of the first quarter while undergoing a five-year special survey prior to starting the first of several new contracts. This was partially offset by higher utilization and average day rates for the drillship fleet.

Contract drilling expense increased to $148 million in the first quarter 2022 from $114 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $135 million in the first quarter from $106 million in the fourth quarter. The sequential quarter increase was primarily due to higher rig reactivation costs, which increased to $61 million in the first quarter from $34 million in the fourth quarter, as we prepared drillships VALARIS DS-4, DS-9 and DS-16 as well as semisubmersible VALARIS DPS-1 for new long-term contracts. Included within first quarter reactivation costs is approximately $4 million related to minor damage arising from an incident involving VALARIS DS-16, which broke free from its moorings during gale force winds. We also incurred repair and maintenance costs in the first quarter on semisubmersible VALARIS DPS-5 while the rig was in the shipyard undergoing a five-year special survey.

Jackups

Jackup revenues increased to $181 million in the first quarter 2022 from $172 million in the fourth quarter 2021. Excluding reimbursable items, revenues increased to $170 million in the first quarter from $160 million in the fourth quarter. The sequential quarter increase was primarily due to higher utilization on VALARIS 249, 117, 144 and Norway, each of which commenced new contracts either in the first quarter or late in the fourth quarter. This was partially offset by idle time between contracts for VALARIS Viking and 107.

Contract drilling expense increased to $139 million in the first quarter 2022 from $128 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $129 million in the first quarter from $117 million in the fourth quarter. The sequential quarter increase was primarily due to higher costs resulting from more operating days across the jackup fleet in the first quarter and higher mobilization costs primarily related to VALARIS 144.

ARO Drilling

Revenues increased to $111 million in the first quarter 2022 from $105 million in the fourth quarter 2021 primarily due to higher utilization and the addition of VALARIS 140 to the leased rig fleet late in the first quarter. Contract drilling expense decreased to $84 million in the first quarter from $89 million in the fourth quarter. Operating income was $5 million in the first quarter compared to an operating loss of $6 million in the fourth quarter. EBITDA was $22 million in the first quarter compared to $11 million in the fourth quarter.

Other

Revenues increased to $38 million in the first quarter 2022 from $33 million in the fourth quarter 2021 primarily due to higher day rates for managed rigs Mad Dog and Thunder Horse, which were each awarded two-year contract extensions, effective from late January. Contract drilling expense increased marginally to $16 million in the first quarter from $15 million in the fourth quarter. Operating income increased to $22 million in the first quarter from $16 million in the fourth quarter. EBITDA increased to $23 million in the first quarter from $17 million in the fourth quarter.

 

 

First Quarter

 

Floaters

 

Jackups

 

ARO

 

Other

 

Reconciling Items

 

Consolidated Total

(in millions of $, except %)

Q1

2022

Q4

2021

Chg

 

Q1

2022

Q4

2021

Chg

 

Q1

2022

Q4

2021

Chg

 

Q1

2022

Q4

2021

Chg

 

Q1

2022

Q4

2021

 

Q1

2022

Q4

2021

Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

99.7

 

100.5

 

(1

)%

 

180.7

172.3

5

%

 

111.3

105.4

 

6

%

 

38.0

32.7

16

%

 

(111.3

)

(105.4

)

 

318.4

 

305.5

 

4

%

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

147.6

 

113.8

 

30

%

 

139.2

128.0

9

%

 

84.2

88.9

 

(5

)%

 

15.5

15.4

1

%

 

(55.2

)

(60.6

)

 

331.3

 

285.5

 

16

%

Depreciation

12.2

 

11.7

 

4

%

 

9.1

12.1

(25

)%

 

16.5

17.7

 

(7

)%

 

0.9

1.1

(18

)%

 

(16.2

)

(17.5

)

 

22.5

 

25.1

 

(10

)%

General and admin.

 

 

%

 

%

 

5.2

5.1

 

2

%

 

%

 

13.6

 

13.2

 

 

18.8

 

18.3

 

3

%

Equity in earnings (losses) of ARO

 

 

%

 

%

 

 

%

 

%

 

4.3

 

(1.3

)

 

4.3

 

(1.3

)

nm

 

Operating income (loss)

(60.1

)

(25.0

)

140

%

 

32.4

32.2

1

%

 

5.4

(6.3

)

nm

 

 

21.6

16.2

33

%

 

(49.2

)

(41.8

)

 

(49.9

)

(24.7

)

102

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

(60.0

)

(25.4

)

136

%

 

34.7

52.8

(34

)%

 

1.4

(10.0

)

nm

 

 

21.6

16.2

33

%

 

(37.5

)

(5.9

)

 

(39.8

)

27.7

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

(48.7

)

(12.9

)

278

%

 

43.0

44.4

(3

)%

 

21.9

11.4

 

92

%

 

22.6

17.3

31

%

 

(69.7

)

(57.5

)

 

(30.9

)

2.7

 

nm

 

Adjusted EBITDAR

12.2

 

20.9

 

(42

)%

 

43.6

47.7

(9

)%

 

21.9

11.4

 

92

%

 

22.6

17.4

30

%

 

(69.7

)

(57.5

)

 

30.6

 

39.9

 

(23

)%

Fresh Start Accounting

Valaris emerged from Chapter 11 bankruptcy protection on April 30, 2021 (the “Effective Date”). Upon emergence, Valaris applied fresh start accounting which resulted in Valaris becoming a new reporting entity for accounting and financial reporting. Accordingly, our financial statements and notes after the Effective Date are not comparable to our financial statements and notes prior to that date. As required by GAAP, results for the second quarter must be presented separately for the predecessor period from April 1, 2021, through April 30, 2021 (the “Predecessor” period) and the successor period from May 1, 2021, through June 30, 2021 (the “Successor” period). However, the Company has combined certain results of the Predecessor and Successor periods (“Combined” results) as non-GAAP measures to compare the combined second quarter with other quarters since we believe it provides the most meaningful basis to analyze our results. The Predecessor and Successor results for the second quarter are more fully discussed in our quarterly report on Form 10-Q for the period ended June 30, 2021 filed with the SEC on August 3, 2021.

As previously announced, Valaris will hold its first quarter 2022 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Tuesday, May 3, 2022. An updated investor presentation will be available on the Valaris website after the call.

About Valaris Limited

Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.

Forward-Looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “likely,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, rig commitments and availability, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the effect, impact, potential duration and other implications of the ongoing COVID-19 pandemic; impact of our emergence from bankruptcy; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards and contracts; letters of intent; scheduled delivery dates for rigs; performance of our joint venture with Saudi Aramco; the timing of delivery, mobilization, contract commencement, availability, relocation or other movement of rigs; future rig reactivations; expected divestitures of assets; general market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine); future operations; increasing regulatory complexity; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including the COVID-19 outbreak and global pandemic and the related public health measures implemented by governments worldwide, which may, among other things, impact our ability to staff rigs and rotate crews; cancellation, suspension, renegotiation or termination of drilling contracts and programs, including drilling contracts which grant the customer termination right if FID is not received with respect to projects for which the drilling rig is contracted; potential additional asset impairments; failure to satisfy our debt obligations; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; the effects of our emergence from bankruptcy on the Company’s business, relationships, comparability of our financial results and ability to access financing sources; actions by regulatory authorities, or other third parties; actions by our security holders; commodity price fluctuations and volatility, customer demand, new rig supply, downtime and other risks associated with offshore rig operations; severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; consumer preferences for alternative fuels; increased scrutiny of our Environmental, Social and Governance (“ESG”) practices and reporting responsibilities; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; and cybersecurity risks and threats. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, which is available on the SEC’s website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.

 

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

 

 

Three Months Ended

 

Successor

 

Combined

(Non-GAAP) (1)

 

Predecessor

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

OPERATING REVENUES

$

318.4

 

 

$

305.5

 

 

$

326.7

 

 

$

293.1

 

 

$

307.1

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

331.3

 

 

 

285.5

 

 

 

274.6

 

 

 

258.8

 

 

 

253.6

 

Loss on impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

756.5

 

Depreciation

 

22.5

 

 

 

25.1

 

 

 

24.4

 

 

 

54.1

 

 

 

122.1

 

General and administrative

 

18.8

 

 

 

18.3

 

 

 

27.2

 

 

 

19.1

 

 

 

24.3

 

Total operating expenses

 

372.6

 

 

 

328.9

 

 

 

326.2

 

 

 

332.0

 

 

 

1,156.5

 

EQUITY IN EARNINGS (LOSSES) OF ARO

 

4.3

 

 

 

(1.3

)

 

 

2.6

 

 

 

6.0

 

 

 

1.9

 

OPERATING INCOME (LOSS)

 

(49.9

)

 

 

(24.7

)

 

 

3.1

 

 

 

(32.9

)

 

 

(847.5

)

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest income

 

10.9

 

 

 

11.0

 

 

 

9.7

 

 

 

8.8

 

 

 

2.6

 

Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million and $100.3 million for the three months ended June 30, 2021 and March 31, 2021, respectively)

 

(11.5

)

 

 

(11.7

)

 

 

(11.3

)

 

 

(9.1

)

 

 

(1.3

)

Reorganization items, net

 

(1.0

)

 

 

(4.9

)

 

 

(6.5

)

 

 

(3,536.5

)

 

 

(52.2

)

Other, net

 

11.0

 

 

 

27.0

 

 

 

5.5

 

 

 

9.0

 

 

 

22.5

 

 

 

9.4

 

 

 

21.4

 

 

 

(2.6

)

 

 

(3,527.8

)

 

 

(28.4

)

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(40.5

)

 

 

(3.3

)

 

 

0.5

 

 

 

(3,560.7

)

 

 

(875.9

)

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

(0.7

)

 

 

(31.0

)

 

 

53.3

 

 

 

(0.4

)

 

 

31.7

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

(39.8

)

 

 

27.7

 

 

 

(52.8

)

 

 

(3,560.3

)

 

 

(907.6

)

 

 

 

 

 

 

 

 

 

 

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

1.2

 

 

 

 

 

 

(1.7

)

 

 

(2.9

)

 

 

(2.4

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS

$

(38.6

)

 

$

27.7

 

 

$

(54.5

)

 

$

(3,563.2

)

 

$

(910.0

)

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER SHARE – BASIC AND DILUTED

$

(0.51

)

 

$

0.37

 

 

$

(0.73

)

 

 

n/m

 

 

$

(4.56

)

WEIGHTED-AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED

 

75.0

 

 

 

75.0

 

 

 

75.0

 

 

 

n/m

 

 

 

199.6

 

(1)

Represents the combined results of operations for the two-months ended June 30, 2021 (Successor) and the one-month ended April 30, 2021 (Predecessor).

   

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

   

 

Successor

 

 

Predecessor

 

March 31,

2022

December 31,

2021

September 30,

2021

June 30,

2021

 

 

March 31,

2021

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

578.2

 

$

608.7

 

$

620.8

 

$

608.8

 

 

$

291.7

 

Restricted cash

 

30.0

 

 

35.9

 

 

33.9

 

 

53.1

 

 

 

17.1

 

Accounts receivable, net

 

439.3

 

 

444.2

 

 

455.8

 

 

436.1

 

 

 

449.8

 

Other current assets

 

125.7

 

 

117.8

 

 

117.0

 

 

119.7

 

 

 

366.4

 

Total current assets

$

1,173.2

 

$

1,206.6

 

$

1,227.5

 

$

1,217.7

 

 

$

1,125.0

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

930.2

 

 

890.9

 

 

892.3

 

 

897.8

 

 

 

10,083.9

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM NOTES RECEIVABLE FROM ARO

 

256.8

 

 

249.1

 

 

241.3

 

 

234.3

 

 

 

442.7

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT IN ARO

 

90.9

 

 

86.6

 

 

87.9

 

 

85.4

 

 

 

122.8

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS

 

186.6

 

 

176.0

 

 

153.5

 

 

166.5

 

 

 

172.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,637.7

 

$

2,609.2

 

$

2,602.5

 

$

2,601.7

 

 

$

11,946.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Accounts payable – trade

$

311.2

 

$

225.8

 

$

203.0

 

$

183.9

 

 

$

176.8

 

Accrued liabilities and other

 

212.1

 

 

196.2

 

 

223.8

 

 

212.7

 

 

 

290.6

 

Total current liabilities

$

523.3

 

$

422.0

 

$

426.8

 

$

396.6

 

 

$

467.4

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT

 

545.5

 

 

545.3

 

 

545.1

 

 

544.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER LIABILITIES

 

544.8

 

 

581.1

 

 

591.3

 

 

569.8

 

 

 

704.6

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE

 

1,613.6

 

 

1,548.4

 

 

1,563.2

 

 

1,511.2

 

 

 

1,172.0

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES SUBJECT TO COMPROMISE

 

 

 

 

 

 

 

 

 

 

7,313.7

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

1,024.1

 

 

1,060.8

 

 

1,039.3

 

 

1,090.5

 

 

 

3,461.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,637.7

 

$

2,609.2

 

$

2,602.5

 

$

2,601.7

 

 

$

11,946.9

 
 

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

 

Three Months Ended

 

Successor

 

 

Combined

(Non-GAAP) (1)

 

Predecessor

 

March 31,

2022

December 31,

2021

September 30,

2021

 

 

June 30,

2021

 

March 31,

2021

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income (loss)

$

(39.8

)

$

27.7

 

$

(52.8

)

 

 

$

(3,560.3

)

 

$

(907.6

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

22.5

 

 

25.1

 

 

24.4

 

 

 

 

54.1

 

 

 

122.1

 

Accretion of discount on shareholder note

 

(7.7

)

 

(7.9

)

 

(6.9

)

 

 

 

(6.0

)

 

 

 

Equity in losses (earnings) of ARO

 

(4.3

)

 

1.3

 

 

(2.6

)

 

 

 

(6.0

)

 

 

(1.9

)

Net periodic pension and retiree medical income

 

(4.0

)

 

(2.6

)

 

(3.7

)

 

 

 

(3.8

)

 

 

(4.0

)

Share-based compensation expense

 

3.4

 

 

2.7

 

 

1.6

 

 

 

 

1.0

 

 

 

3.8

 

Gain on asset disposals

 

(2.5

)

 

(21.0

)

 

(0.3

)

 

 

 

(4.5

)

 

 

(1.4

)

Amortization, net

 

1.6

 

 

(0.5

)

 

3.1

 

 

 

 

(0.5

)

 

 

(4.6

)

Deferred income tax expense (benefit)

 

(0.6

)

 

(22.5

)

 

0.1

 

 

 

 

(18.0

)

 

 

0.9

 

Amortization of debt issuance cost

 

0.2

 

 

0.2

 

 

(0.1

)

 

 

 

0.4

 

 

 

 

Loss on impairment

 

 

 

 

 

 

 

 

 

 

 

 

756.5

 

Non-cash reorganization items, net

 

 

 

 

 

 

 

 

 

3,487.3

 

 

 

 

Other

 

 

 

0.3

 

 

0.2

 

 

 

 

1.3

 

 

 

5.8

 

Changes in operating assets and liabilities

 

32.5

 

 

(9.0

)

 

45.0

 

 

 

 

21.9

 

 

 

20.9

 

Contributions to pension plans and other post-retirement benefits

 

(0.8

)

 

(1.0

)

 

(1.1

)

 

 

 

(0.9

)

 

 

(22.2

)

Net cash provided by (used in) operating activities

$

0.5

 

$

(7.2

)

$

6.9

 

 

 

$

(34.0

)

 

$

(31.7

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to property and equipment

$

(38.5

)

$

(26.5

)

$

(15.6

)

 

 

$

(10.8

)

 

$

(6.0

)

Net proceeds from disposition of assets

 

1.3

 

 

23.6

 

 

1.3

 

 

 

 

26.6

 

 

 

3.7

 

Net cash provided by (used in) investing activities

$

(37.2

)

$

(2.9

)

$

(14.3

)

 

 

$

15.8

 

 

$

(2.3

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Issuance of first lien notes

$

 

$

 

$

 

 

 

$

520.0

 

 

$

 

Payments to Predecessor creditors

 

 

 

 

 

 

 

 

 

(129.9

)

 

 

 

Other

 

 

 

 

 

 

 

 

 

(1.4

)

 

 

 

Net cash provided by financing activities

$

 

$

 

$

 

 

 

$

388.7

 

 

$

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

$

0.3

 

$

 

$

0.2

 

 

 

$

(0.3

)

 

$

(0.1

)

 

 

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

(36.4

)

$

(10.1

)

$

(7.2

)

 

 

$

370.2

 

 

$

(34.1

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

644.6

 

 

654.7

 

 

661.9

 

 

 

 

291.7

 

 

 

325.8

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

608.2

 

$

644.6

 

$

654.7

 

 

 

$

661.9

 

 

$

291.7

 

Contacts

Investor & Media Contact:

Tim Richardson

Director – Investor Relations

+1-713-979-4619

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