Borr Drilling(BORR) - 2025 Q2 - Quarterly Report

FORM 6-K Filing Details Report Information This Form 6-K includes Borr Drilling's Unaudited Interim Financial Report for H1 2025, incorporated by reference - The report contains the Unaudited Interim Financial Report for the six months ended June 30, 2025[4] - Information is incorporated by reference into Form F-3 (Registration Number 333-286490) and Form S-8 (Registration Number 333-283551)[5] - Exhibit 99.1 is the Unaudited Interim Financial Report[6] Signatures Magnus Vaaler, Principal Financial Officer, signed the report for Borr Drilling on August 13, 2025 - Report signed by Magnus Vaaler, Principal Financial Officer, on August 13, 2025[9][10] Unaudited Interim Financial Report Forward-Looking Statements This section identifies forward-looking statements, their inherent risks, and disclaims update obligations - Forward-looking statements are identified by words like 'may,' 'will,' 'expect,' and include plans, objectives, goals, strategies, future events, and market outlook[13] - These statements are based on current estimates and assumptions but involve significant known and unknown risks, uncertainties, and contingencies beyond control[14] - The company disclaims any obligation to update or revise forward-looking statements, except as required by law[15] Management Discussion and Analysis Analysis of Borr Drilling's H1 2025 financial condition and results, covering developments, performance, liquidity Company Overview Borr Drilling is an offshore shallow-water drilling contractor operating 24 premium jack-up rigs globally - Borr Drilling Limited is an offshore shallow-water drilling contractor providing services to the oil and gas industry[18] - Primary business involves ownership, contracting, and operation of jack-up rigs for shallow-water areas (up to 400 feet depth)[18] - The company's fleet consists of 24 premium jack-up rigs[18] Recent Developments Recent developments include share cancellations, a $102.5 million public offering, rig operations, and CEO succession Liquidity Updates - In March 2025, 19,680,391 treasury shares related to the Convertible Notes share lending agreement were cancelled[19] - On July 3, 2025, a public offering of 50,000,000 shares at $2.05 per share raised total gross proceeds of $102.5 million[20] - Shareholders approved an increase in authorized share capital by 50,000,000 new common shares to 365,000,000 shares in August 2025[21] Operational and Contract Updates - The Vali rig commenced its first contract in March 2025 after delivery in August 2024[22] - In May 2025, jack-up rigs 'Galar', 'Grid', and 'Gersemi' re-commenced operations in Mexico after temporary suspension[23] - The 'Odin' rig received a temporary suspension notice in Mexico in June 2025, but the Company entered an LOI for a combined accommodation and drilling program for it[23] Management Updates - Bruno Morand will succeed Patrick Schorn as CEO, effective September 1, 2025, with Mr. Schorn becoming Executive Chair[24] - Current Chairman Tor Olav Trøim will continue as a Director, and Dan Rabun will become Lead Independent Director[25] - Thiago Mordehachvili was appointed to the Board as a Director on August 6, 2025[25] Operating and Financial Review H1 2025 net and operating income decreased due to lower revenues, higher rig expenses, and depreciation Selected Financial Information (Six months ended June 30, 2025 vs. 2024) | In $ millions | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | 484.3 | 505.9 | (21.6) | (4) % | | Rig operating and maintenance expenses | (232.0) | (228.1) | (3.9) | 2 % | | Depreciation of non-current assets | (72.6) | (63.7) | (8.9) | 14 % | | General and administrative expenses | (23.4) | (25.0) | 1.6 | (6) % | | Total operating expenses | (328.0) | (316.8) | (11.2) | 4 % | | Operating income | 156.7 | 189.5 | (32.8) | (17)% | | (Loss) / income from equity method investments | (2.0) | 2.9 | (4.9) | (169) % | | Total financial expenses, net | (119.1) | (113.2) | (5.9) | 5 % | | Income before income taxes | 35.6 | 79.2 | (43.6) | (55)% | | Income tax expense | (17.4) | (33.1) | 15.7 | (47) % | | Net income | 18.2 | 46.1 | (27.9) | (61)% - Net income decreased by $27.9 million (61%) to $18.2 million for the six months ended June 30, 2025, primarily due to decreased operating revenue, increased rig operating expenses, higher depreciation, and a loss from equity method investments[28] - Total operating revenues decreased by $21.6 million (4%) to $484.3 million, mainly due to a $35.0 million decrease in related party revenue (Perfomex termination) and a $10.0 million decrease in bareboat charter revenue due to temporary rig suspensions, partially offset by a $19.4 million increase in dayrate revenue from higher average dayrates and more rigs in operation[29][30] - Rig operating and maintenance expenses increased by $3.9 million (2%) to $232.0 million, driven by new rig management contracts, temporary suspension of rigs (expenses previously in equity method investments), and the Vali rig commencing operations[32] Liquidity and Capital Resources As of June 30, 2025, Borr Drilling had $92.4 million cash, $2,112.3 million debt, $134.7 million maturing in 12 months - As of June 30, 2025, cash and cash equivalents were $92.4 million, with $1.0 million in restricted cash[40] - The company's shares are listed on the NYSE, having delisted from the OSE on December 30, 2024[41] Cash Distributions Cash Distributions per Share | Date of Cash Distribution Declaration | Date of Payment to Shareholders | Cash Distribution per Share ($) | | :--- | :--- | :--- | | December 22, 2023 | January 22, 2024 | $0.05 | | February 22, 2024 | March 18, 2024 | $0.05 | | May 22, 2024 | June 17, 2024 | $0.10 | | August 14, 2024 | September 6, 2024 | $0.10 | | November 6, 2024 | December 16, 2024 | $0.02 | | February 19, 2025 | March 19, 2025 | $0.02 | Borrowing Activities - Total principal amount of debt outstanding was $2,112.3 million as of June 30, 2025, with $134.7 million maturing within the next twelve months[43] - The adjusted conversion price for Convertible Bonds due 2028 is $6.9376 per share, convertible into 34,507,611 shares[44] Cash Flows Cash Flow Information (Six months ended June 30, 2025 vs. 2024) | In $ millions | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 145.0 | 39.9 | 105.1 | 263 % | | Net cash used in investing activities | (38.5) | (32.1) | (6.4) | 20 % | | Net cash (used in) / provided by financing activities | (75.6) | 84.1 | (159.7) | (190)% | | Net increase in cash and cash equivalents and restricted cash | 30.9 | 91.9 | (61.0) | (66)% | | Cash and cash equivalents and restricted cash at beginning of period | 62.5 | 102.6 | (40.1) | (39)% | | Cash and cash equivalents and restricted cash at end of period | 93.4 | 194.5 | (101.1) | (52)% - Net cash provided by operating activities increased by $105.1 million (263%) to $145.0 million, primarily due to working capital movements, including $119.9 million from Mexico operations, and increased average dayrates[46] - Net cash used in financing activities was $75.6 million, a $159.7 million decrease from $84.1 million provided in 2024, primarily due to debt repayments ($70.7 million) and cash distributions ($4.7 million) in 2025, compared to net proceeds from 2028 Notes ($208.3 million) in 2024[49] - Cash interest paid increased to $104.4 million for the six months ended June 30, 2025, from $91.3 million in 2024[50] Non-GAAP Financial Measures This section defines Adjusted EBITDA, its calculation, rationale, and limitations for business performance comparability Adjusted EBITDA Reconciliation (Six months ended June 30, 2025 vs. 2024) | In $ millions | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income | 18.2 | 46.1 | (27.9) | (61) % | | Depreciation of non-current assets | 72.6 | 63.7 | 8.9 | 14 % | | Loss / (Income) from equity method investments | 2.0 | (2.9) | 4.9 | (169) % | | Total financial expenses, net | 119.1 | 113.2 | 5.9 | 5 % | | Income tax expense | 17.4 | 33.1 | (15.7) | (47) % | | Adjusted EBITDA | 229.3 | 253.2 | (23.9) | (9)% - Adjusted EBITDA decreased by $23.9 million (9%) to $229.3 million for the six months ended June 30, 2025[38] - Adjusted EBITDA is presented to increase comparability of underlying business performance and is calculated by adjusting net income for depreciation, equity method investments, financial expenses, and income tax expense[38][53] - Non-GAAP measures have limitations, including not reflecting cash requirements for capital, taxes, working capital, or debt service, and should not be considered in isolation from GAAP results[53] Index to Financial Statements This section indexes the unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows Financial Statement Index | Document | Page | | :--- | :--- | | Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 | 17 | | Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | 18 | | Unaudited Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2025 and 2024 | 19 | | Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2025 and 2024 | 22 | | Notes to the Unaudited Condensed Consolidated Financial Statements | 23 | Condensed Consolidated Statements of Operations Net income decreased to $18.2 million in H1 2025 from $46.1 million in 2024, due to lower revenues and higher expenses Condensed Consolidated Statements of Operations (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Total operating revenues | 484.3 | 505.9 | | Total operating expenses | (328.0) | (316.8) | | Operating income | 156.7 | 189.5 | | Total financial expenses, net | (119.1) | (113.2) | | Income before income taxes | 35.6 | 79.2 | | Income tax expense | (17.4) | (33.1) | | Net income attributable to shareholders of Borr Drilling Limited | 18.2 | 46.1 | | Basic income per share | 0.08 | 0.18 | | Diluted income per share | 0.08 | 0.18 | Condensed Consolidated Balance Sheets Total assets decreased to $3,351.7 million at June 30, 2025, while equity increased to $1,012.6 million Condensed Consolidated Balance Sheets (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | 468.3 | 516.6 | | Total non-current assets | 2,883.4 | 2,903.0 | | Total assets | 3,351.7 | 3,419.6 | | Total current liabilities | 367.1 | 409.6 | | Total non-current liabilities | 1,972.0 | 2,016.7 | | Total liabilities | 2,339.1 | 2,426.3 | | Total equity | 1,012.6 | 993.3 | - Cash and cash equivalents increased to $92.4 million at June 30, 2025, from $61.6 million at December 31, 2024[59] - Jack-up drilling rigs, net, decreased slightly to $2,792.4 million from $2,823.2 million[59] - Due from related parties significantly decreased to $6.4 million from $85.1 million[59] Condensed Consolidated Statements of Cash Flows Net cash from operations increased to $145.0 million in H1 2025, while financing activities shifted to outflow Condensed Consolidated Statements of Cash Flows (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 145.0 | 39.9 | | Net cash used in investing activities | (38.5) | (32.1) | | Net cash (used in) / provided by financing activities | (75.6) | 84.1 | | Net increase in cash and cash equivalents and restricted cash | 30.9 | 91.9 | | Cash, cash equivalents and restricted cash at end of period | 93.4 | 194.5 | - Net cash provided by operating activities increased by $105.1 million (263%) to $145.0 million, driven by working capital movements and cash settlements from Mexico operations[61] - Net cash used in financing activities was $75.6 million in 2025, a significant change from $84.1 million provided in 2024, reflecting debt repayments and cash distributions[61] - Cash interest paid was $104.4 million in 2025, up from $91.3 million in 2024[61] Condensed Consolidated Statements of Changes in Shareholders' Equity Total equity increased to $1,012.6 million at June 30, 2025, driven by comprehensive income and share-based compensation Condensed Consolidated Statements of Changes in Shareholders' Equity (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Common shares | 24.5 | 26.5 | | Treasury shares | (20.0) | (20.9) | | Additional paid in capital | 347.7 | 340.8 | | Contributed surplus | 1,919.0 | 1,923.7 | | Accumulated deficit | (1,258.6) | (1,276.8) | | Total equity | 1,012.6 | 993.3 | - Cancellation of 19,680,391 treasury shares occurred during the six months ended June 30, 2025[66][145] - Share-based compensation contributed $3.4 million to additional paid-in capital for the six months ended March 31, 2025, and $2.6 million for the three months ended June 30, 2025[66] - Cash distributions to shareholders totaled $4.7 million for the six months ended June 30, 2025[66] Note 1 - General Information Borr Drilling, a Bermuda-based offshore drilling contractor, operates 24 premium jack-up rigs and is NYSE-listed - Borr Drilling Limited is an international offshore drilling contractor providing services to the oil and gas industry[68] - The company's primary business is the ownership, contracting, and operation of 24 modern jack-up drilling rigs for shallow-water areas[68] - Listed on the NYSE under 'BORR', and delisted from the Oslo Stock Exchange on December 30, 2024[68] Note 2 - Basis of Preparation and Accounting Policies Financial statements are prepared under U.S. GAAP in U.S. dollars, based on a going concern, with consistent policies - Financial statements are prepared in accordance with U.S. GAAP and presented in millions of U.S. dollars[70] - Prepared on a going concern basis, with all necessary adjustments for fair presentation reflected[70] - Accounting policies are consistent with those in the annual audited consolidated financial statements for the year ended December 31, 2024[72] Note 3 - Recently Issued Accounting Standards This note details new accounting standards (ASU 2023-05, ASU 2023-09) effective January 1, 2025, with no material interim impact - ASU 2023-05 (Business Combinations—Joint Venture Formations) requires joint ventures to apply a new basis of accounting upon formation, recognizing assets and liabilities at fair value, effective January 1, 2025, with no current impact[74] - ASU 2023-09 (Income Taxes) requires enhanced income tax disclosures for public business entities, effective January 1, 2025, for the 2025 annual report, with no current impact[75] - ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2024-04 (Debt—Debt with Conversion and Other Options) have been issued but not yet adopted, with ASU 2024-03 expected to impact disclosures from January 1, 2027[76] Note 4 - Segment Information Borr Drilling operates as a single segment, with revenues geographically attributed, showing shifts in regional contributions - The company operates as a single reportable segment, with Operating income as the key metric for management[77] - Revenues are attributed to geographical location based on the country of operations for drilling activities[78] Revenues by Geographic Area (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | South East Asia | 151.6 | 138.5 | | West Africa | 140.1 | 76.7 | | Latin America | 90.5 | 146.5 | | North Africa | 29.3 | — | | Middle East | 42.8 | 129.3 | | Europe | 30.0 | 14.9 | | Total | 484.3 | 505.9 | Major Customers (Six months ended June 30) | In % of operating revenues | 2025 | 2024 | | :--- | :--- | :--- | | ENI S.p.A | 22 % | 11 % | | PTT Exploration and Production Public Company Limited | 13 % | 10 % | | Saudi Arabian Oil Company | 6 % | 16 % | | Total | 41 % | 37 % | Net Book Value of Jack-up Rigs by Geographic Area (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Latin America | 953.1 | 961.0 | | South East Asia | 796.9 | 809.9 | | West Africa | 429.2 | 434.8 | | Middle East | 358.4 | 366.6 | | North Africa | 163.7 | — | | Europe | 91.1 | 250.9 | | Total | 2,792.4 | 2,823.2 | Note 5 - Contracts with Customers Contract assets increased to $150.4 million and liabilities to $80.2 million; future dayrate revenue projected at $743.8 million for 2026 - Accrued revenue is recognized when the right to consideration becomes unconditional, and trade accounts receivable are recognized upon billing[81] - Deferred mobilization, demobilization, and contract preparation revenue are recognized on a straight-line basis over the initial firm term of contracts[82] Contract Assets and Liabilities (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total contract assets | 150.4 | 109.2 | | Total contract liabilities | (80.2) | (48.1) | Timing of Revenue Recognition (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Over time | 467.6 | 492.7 | | Point in time | 16.7 | 13.2 | | Total | 484.3 | 505.9 | Expected Future Revenue from Unsatisfied Performance Obligations (as of June 30, 2025) | In $ millions | 2026 | 2027 | 2028 | 2029 onwards | | :--- | :--- | :--- | :--- | :--- | | Dayrate revenue | 700.5 | 239.0 | 111.4 | 54.5 | | Other revenue | 43.3 | 20.6 | 14.8 | 7.6 | | Total | 743.8 | 259.6 | 126.2 | 62.1 | Note 6 - Equity Method Investments Borr Drilling holds a 51% equity interest in Mexican JVs; operating structure changed in 2024, leading to rig operational changes in 2025 - Borr Drilling holds a 51% equity ownership interest in Perfomex and Perfomex II, Mexico-based joint ventures[89] - In 2024, bareboat charter agreements with Perfomex were terminated, and new fixed-rate bareboat charter agreements were entered into with Irish Energy Drilling Assets, DAC ('Irco') for five jack-up rigs[90] - In January 2025, 'Grid', 'Gersemi', and 'Galar' rigs received temporary suspension notices but re-commenced operations during Q2 2025, with charter agreements extended[93] Investments in Equity Method Investments (as of June 30, 2025) | In $ millions | Perfomex | Perfomex II | Borr Total | | :--- | :--- | :--- | :--- | | Balance as of December 31, 2024 | 9.1 | 5.4 | 14.5 | | Equity share in loss of investee | (2.0) | — | (2.0) | | Balance as of June 30, 2025 | 7.1 | 5.4 | 12.5 | Note 7 - Interest Expense Total interest expense increased to $115.3 million in H1 2025 from $101.0 million in 2024, due to higher debt interest and amortization Interest Expense Components (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Debt interest expense | (106.9) | (92.4) | | Amortization of deferred finance charges | (6.4) | (5.5) | | Amortization of debt discount | (3.4) | (3.4) | | Amortization of debt premium | 1.4 | 0.3 | | Total | (115.3) | (101.0) | Note 8 - Other Financial Expenses, net Other financial expenses, net, decreased to $4.9 million in H1 2025 from $16.0 million in 2024, due to no yard cost cover and FX gain Other Financial Expenses, Net (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Foreign exchange gain / (loss) | 1.5 | (2.3) | | Yard cost cover expense | — | (11.2) | | Unrealized changes in value of financial instruments | — | 0.3 | | Other financial (expenses) / income | (4.3) | (0.9) | | Bank commitment, guarantee and other fees | (2.1) | (1.9) | | Total | (4.9) | (16.0) | - Other financial expenses for 2025 include $4.4 million in financing fees related to Mexican customer payment settlement[97] - The 2024 figures included $2.3 million premium paid on repurchased Convertible Bonds[97] Note 9 - Taxation Income tax expense decreased to $17.4 million in H1 2025 from $33.1 million in 2024, due to lower corporate tax and a deferred tax benefit - Borr Drilling Limited is a Bermuda company, exempt from Bermuda taxes until March 31, 2035, but expects to be subject to Bermuda's 15% Corporate Income Tax Act from January 1, 2025, and OECD's Pillar Two global minimum tax in 2026[98][103] Pre-tax Income / (Loss) by Jurisdiction (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Bermuda | 67.0 | (49.2) | | Foreign | (31.4) | 128.4 | | Total | 35.6 | 79.2 | Income Tax (Expense) / Benefit (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Current tax | (23.4) | (28.7) | | Change in deferred tax | 6.0 | (4.4) | | Total | (17.4) | (33.1) | - The decrease in income tax expense is principally due to a $6.3 million decrease in corporate income tax, a $5.7 million one-off recognition of deferred tax benefit, and a $3.7 million decrease in deferred tax asset utilization[37] Note 10 - Income Per Share Basic and diluted income per share was $0.08 in H1 2025, down from $0.18 in 2024, reflecting dilutive and anti-dilutive effects Income Per Share (Six months ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | Basic income per share | 0.08 | 0.18 | | Diluted income per share | 0.08 | 0.18 | | Issued ordinary shares at the end of the period | 244,400,000 | 264,080,391 | | Net income - basic (in $ millions) | 18.2 | 46.1 | | Weighted average numbers of shares outstanding for the period, basic | 241,134,285 | 251,953,928 | | Weighted average numbers of shares outstanding for the period, diluted | 242,362,500 | 289,349,337 | - For the six months ended June 30, 2025, 3,931,663 share options were included as dilutive, while 34,507,611 shares issuable from Convertible Bonds, 8,689,997 share options, 750,000 performance stock units, and 886,610 restricted share units were excluded as anti-dilutive[105][110] - Weighted average shares outstanding include shares from a share lending arrangement related to Convertible Bonds[108] Note 11 - Other Current Assets Other current assets increased to $30.8 million at June 30, 2025, from $28.0 million, mainly due to higher tax receivables Other Current Assets (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Other tax receivables | 13.1 | 8.0 | | Client rechargeables | 6.8 | 5.0 | | VAT receivable | 4.6 | 10.5 | | Deferred financing fee | 0.5 | 0.5 | | Right-of-use lease asset | 0.3 | 0.4 | | Other receivables | 5.5 | 3.6 | | Total | 30.8 | 28.0 | Note 12 - Jack-Up Rigs Net carrying value of jack-up rigs decreased to $2,792.4 million at June 30, 2025, with additions offset by depreciation Carrying Value of Jack-Up Rigs (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Opening balance | 2,823.2 | 2,578.3 | | Additions | 41.2 | 64.6 | | Depreciation and amortization | (72.0) | (130.1) | | Transfers from Newbuildings | — | 310.4 | | Total | 2,792.4 | 2,823.2 | - Accumulated depreciation related to jack-up rigs was $800.2 million at June 30, 2025, up from $728.2 million at December 31, 2024[113] - Impairment indicators existed for fourteen rigs, but no impairment loss was recognized as estimated undiscounted net cash flows were higher than carrying amounts[117] Note 13 - Leases Operating lease assets and liabilities were $0.9 million each; bareboat charter revenue was $27.9 million, with $134.1 million future revenues Supplemental Balance Sheet Information Related to Leases (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating leases right-of-use assets | 0.9 | 1.2 | | Current operating lease liabilities | 0.3 | 0.4 | | Non-current operating lease liabilities | 0.6 | 0.8 | Operating Lease Expense (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Rig operating and maintenance expenses | 8.3 | 6.3 | | General and administrative expenses | 1.2 | 1.0 | | Operating lease expense | 9.5 | 7.3 | - Bareboat charter revenue from operating leases on jack-up rigs was $27.9 million for the six months ended June 30, 2025, and $37.9 million for the same period in 2024[122] Minimum Future Revenues from Operating Leases on Jack-Up Rigs (as of June 30, 2025) | In $ millions | June 30, 2025 | | :--- | :--- | | 2025 | 55.2 | | 2026 | 48.0 | | 2027 | 24.4 | | 2028 | 6.5 | | Total minimum contractual future revenues | 134.1 | Note 14 - Other Non-Current Assets Other non-current assets increased to $76.2 million at June 30, 2025, from $62.5 million, driven by deferred tax assets Other Non-Current Assets (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred mobilization and contract preparation costs | 37.2 | 39.5 | | Deferred tax asset | 24.6 | 18.6 | | Deferred demobilization revenue | 10.4 | 1.5 | | Blended rate revenue, non-current | 1.8 | — | | Deferred financing fee | 1.0 | 1.2 | | Right-of-use lease asset, non-current | 0.6 | 0.8 | | Customer retention | 0.6 | — | | Prepayments | — | 0.9 | | Total | 76.2 | 62.5 | Note 15 - Accrued Expenses Accrued expenses decreased to $65.0 million at June 30, 2025, from $68.0 million, mainly due to lower payroll and bonus Accrued Expenses (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued goods and services received, not invoiced | 13.7 | 14.2 | | Accrued payroll and bonus | 7.9 | 13.2 | | Other accrued expenses | 43.4 | 40.6 | | Total | 65.0 | 68.0 | Note 16 - Other Current Liabilities Other current liabilities decreased to $47.7 million at June 30, 2025, from $84.2 million, due to reductions in VAT and other taxes Other Current Liabilities (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Advances from customers | 18.8 | 15.9 | | Other current taxes payable | 12.9 | 19.6 | | Corporate income taxes payable | 10.6 | 14.3 | | VAT payable | 2.3 | 28.2 | | Accrued payroll and severance | 1.6 | 1.4 | | Operating lease liability, current | 0.3 | 0.4 | | Other current liabilities | 1.2 | 4.4 | | Total | 47.7 | 84.2 | Note 17 - Debt Total principal debt was $2,112.3 million at June 30, 2025, with $134.7 million short-term, and a 9.8% weighted average interest rate Short-Term Debt (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Principal Outstanding | 134.7 | 134.7 | | Carrying Value Short-Term Debt | 118.1 | 118.1 | Long-Term Debt (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Principal Outstanding | 1,977.6 | 2,044.9 | | Carrying Value Long-Term Debt | 1,933.4 | 1,992.5 | Scheduled Debt Maturities (as of June 30, 2025) | In $ millions | Maturities | | :--- | :--- | | 2025 | 67.4 | | 2026 | 134.7 | | 2027 | 134.7 | | 2028 | 1,249.7 | | 2029 | 33.7 | | Thereafter | 492.1 | | Total principal debt | 2,112.3 | - The adjusted conversion price for the Convertible Bonds due 2028 is $6.9376 per share, convertible into 34,507,611 shares[130] - The weighted average nominal interest rate for all interest-bearing debt was 9.8% for the six months ended June 30, 2025 (9.7% in 2024)[131] - As of June 30, 2025, the company was in compliance with all covenants and obligations under its debt agreements[132] Note 18 - Commitments and Contingencies Commercial commitments totaled $36.0 million at June 30, 2025, with $2,792.4 million in jack-up rigs pledged as collateral Guarantee Commitments (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank guarantees, letters of credit and performance bonds | 36.0 | 42.9 | | Total | 36.0 | 42.9 | Expected Expiration Dates of Guarantee Obligations (as of June 30, 2025) | In $ millions | Less than 1 year | 2–3 years | 4-5 years | Thereafter | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank guarantees and performance bonds | 30.4 | — | 5.0 | 0.6 | 36.0 | Assets Pledged as Collateral (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Book value of jack-up rigs pledged as collateral for debt facilities | 2,792.4 | 2,671.7 | Note 19 - Related Party Transactions Related party revenue from Perfomex ceased in 2025; support expenses increased to $2.8 million, receivables decreased to $6.4 million - Bareboat charter agreements with Perfomex were terminated in 2024, and new fixed-rate bareboat charter agreements were entered into with an unrelated party for five jack-up rigs[135] Bareboat Revenue from Related Parties (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Bareboat Revenue - Perfomex | — | 35.0 | | Total | — | 35.0 | Onshore Operational and Technical Support Expenses from Perfomex (Six months ended June 30) | In $ millions | 2025 | 2024 | | :--- | :--- | :--- | | Onshore Operational and Technical Support - Perfomex | 2.8 | 1.8 | | Total | 2.8 | 1.8 | Receivables from Joint Ventures (as of June 30, 2025 vs. December 31, 2024) | In $ millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Perfomex | 6.4 | 85.1 | | Total | 6.4 | 85.1 | Note 20 - Fair Value of Financial Instruments This note outlines the fair value hierarchy for financial instruments (Level 1, Level 2), with debt fair valued using Level 2 inputs - Fair value estimates are recognized using a hierarchy: Level 1 for quoted market prices in active markets, Level 2 for observable market-based inputs, and Level 3 for unobservable inputs[140][141] Carrying Value and Estimated Fair Value of Financial Instruments (as of June 30, 2025) | In $ millions | Hierarchy | Fair value | Carrying value | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | 1 | 92.4 | 92.4 | | Restricted cash | 1 | 1.0 | 1.0 | | Trade receivables | 1 | 149.2 | 149.2 | | Other current assets (excluding deferred costs and right-of-use lease asset) | 1 | 30.0 | 30.0 | | Due from related parties | 1 | 6.4 | 6.4 | | Liabilities | | | | | Trade payables | 1 | 63.8 | 63.8 | | Accrued expenses | 1 | 65.0 | 65.0 | | Short term accrued interest and other items | 1 | 29.7 | 29.7 | | Other current liabilities | 1 | 47.7 | 47.7 | | Short-term debt | 2 | 121.1 | 134.7 | | Long-term debt | 2 | 1,737.9 | 1,977.6 | - The unamortized amount of issuance costs associated with the Share Lending Framework Agreement (SLFA) was $6.5 million as of June 30, 2025[142] Note 21 - Common Shares As of June 30, 2025, Borr Drilling had 244,400,000 issued shares; 19,680,391 treasury shares were cancelled, and $0.02 per share cash distributions were declared - As of June 30, 2025, authorized shares were 315,000,000, issued shares were 244,400,000, and outstanding shares were 236,224,866[143][145] - During the six months ended June 30, 2025, 19,680,391 issued shares held in treasury were cancelled following the OSE delisting and amendments to the SLFA[145][147][148] - As of June 30, 2025, 2,208,734 shares were outstanding under the SLFA, with 8,651,955 shares returned to the company and not available for re-loaning[148] - Cash distributions of $0.02 per share were declared in February 2025, totaling $4.7 million[153] Note 22 - Subsequent Events Post-June 30, 2025, a public offering of 50,000,000 shares at $2.05 per share raised $102.5 million, with authorized capital increased - On July 3, 2025, a public offering of 50,000,000 shares at $2.05 per share was conducted, generating $102.5 million in gross proceeds[155] - The offering proceeds were received in two settlements: $30,000,000 shares on July 7, 2025, and $20,000,000 shares on August 7, 2025[155] - Shareholders approved an increase in authorized share capital by 50,000,000 new common shares (from 315,000,000 to 365,000,000) on August 6, 2025, to support the public offering[156]