Financial Data and Key Metrics Changes - For the full year 2024, the company delivered $378 million of adjusted EBITDA on $1.4 billion of revenue, with capital expenditures of $118 million [38][39] - The fourth-quarter total operating revenues were $289 million, primarily impacted by fewer operating days due to planned out-of-service time and cold stacking of rigs [40] - The company maintained a strong balance sheet with gross principal debt of $625 million and cash of $505 million, resulting in a net debt position of $120 million [42] Business Line Data and Key Metrics Changes - The company returned over $500 million in capital to shareholders and had a contracted backlog of $1.3 billion, with $400 million from divesting non-core assets [8][9] - The share repurchase program returned a total of $792 million to shareholders, reducing the issued share count by 22% since September 2023 [9][44] - The company secured approximately 65% of the global backlog awarded to the four largest publicly traded offshore drillers, despite representing only 18% of the drillship fleet [27] Market Data and Key Metrics Changes - The drillship marketed utilization is now in the mid-eighties, down from the high nineties in 2023, indicating a softening market [32] - The company expects future demand to increase, but visibility remains unclear, with a strong balance sheet and 75% of the marketed fleet contracted for 2025 [12][32] - The company reported $3 billion in durable contract cover extending through 2028 and into 2029 [13] Company Strategy and Development Direction - The company aims to be a pure-play floater company, having executed a strategy to rationalize its fleet and divest non-core assets [49][50] - The focus remains on delivering safe and efficient operations while optimizing the cost base to navigate market volatility [25][138] - The company is committed to improving safety performance and maintaining a low-cost operating model [137][140] Management's Comments on Operating Environment and Future Outlook - Management noted that the immediate outlook for 2025 is uncertain, but they expect a rapid improvement in 2026 as deferred demand intersects with major projects [66] - The company is optimistic about the exploration activities, with around 30% of rigs currently drilling exploration wells, indicating a shift in market dynamics [65][131] - Management is actively engaged in discussions with clients to navigate new regulatory expectations and minimize potential non-revenue days [55][90] Other Important Information - The company is facing legal challenges from Petrobras, with claims amounting to approximately $213 million related to delayed penalties from contracts dating back to 2012 [22][21] - The company intends to vigorously defend its position and is evaluating all options, including potential counterclaims against Petrobras [23][24] Q&A Session Summary Question: Downtime for the Telus rig - Management confirmed 50 days of downtime due to a protracted regulatory clearance process, not due to changes in rules [54][55] Question: Petrobras litigation context - Management acknowledged the surprise regarding the $213 million claim and noted that penalties are capped at 10% of contract value [57][58] Question: Client conversations and project economics - Management indicated a mix of client responses, with some being cautious while others are ready to return to the market as day rates improve [62][68] Question: Operating expenses and guidance - Management provided insights on expected operating expenses, estimating $150k per day across the drillship fleet, excluding SG&A [75][76] Question: Share buyback program amid uncertainty - Management emphasized the importance of cash conservation while recognizing the attractiveness of current share prices for buybacks [110][111] Question: Exploration activities and client strategies - Management noted an increase in exploration activities and a growing demand for drilling in 2026 and beyond [126][131]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of approximately $132 million for Q4, down from $167 million in the previous quarter [33] - Net income for the quarter was around $20 million, or $0.15 per share, compared to approximately $44.5 million, or $0.34 per share, in the previous quarter [36] - The fixed-rate backlog stands at approximately $4.3 billion, with 2/3 of this backlog attributed to customers with investment-grade ratings [101][40] Business Line Data and Key Metrics Changes - The container fleet generated approximately $85 million in gross charter hire during Q4, down from the previous quarter due to scheduled dry dockings and efficiency upgrades [27] - The tanker fleet generated approximately $42 million in gross charter hire, an increase from approximately $37 million in the previous quarter [29] - The energy assets generated approximately $55 million in contract revenues, down from approximately $86 million in the previous quarter [32] Market Data and Key Metrics Changes - The overall utilization across the shipping fleet in Q4 was 98.3%, primarily affected by 108 days spent in dry dock [114] - The rig market index rate increased by 2.3% in Q4, with the Hercules rig recording revenue of $34 million and costs of approximately $26 million [116][24] - The company has a diversified fleet with 15 dry bulk vessels, 38 containerships, 18 tankers, 2 drilling rigs, and 7 car carriers [110] Company Strategy and Development Direction - The company has transformed its operating model over the last 10 years to focus on long-term charters with large end users [10] - There is a strong emphasis on investing in vessel maintenance and upgrades to meet tightening regulatory requirements and improve customer partnerships [112] - The company is segment agnostic and seeks to pursue the right deals with strong counterparties across various shipping segments [69] Management's Comments on Operating Environment and Future Outlook - Management expects a slow market for the Hercules rig in the first half of 2025, with more prospects anticipated in the second half [45] - The company believes that the dividend stability is tied to long-term prospects, with a focus on maintaining a strong cash flow foundation [50][52] - Management does not foresee a significant impact on profitability from the large delivery backlog of container ships due to the current long-term charters in place [92] Other Important Information - The company raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds in 2024 [104] - A recent court ruling ordered Seadrill to pay approximately $48 million in compensation, which is subject to appeal [105][76] - The company has a strong balance sheet with approximately $135 million in cash and cash equivalents at quarter-end [36] Q&A Session Summary Question: What are the operational expenses for the Hercules rig while warm stacked? - Management indicated that the Hercules rig is currently warm stacked and is being upgraded to enhance its attractiveness for future contracts [46][47] Question: How stable is the dividend payout? - The dividend is set on a quarter-over-quarter basis, with discussions focused on long-term prospects and cash flow stability [50][52] Question: What is the company's view on tariffs and their impact on shipping? - Management believes that strong counterparties like Volkswagen Group can absorb tariff impacts, and the company is not directly exposed to these risks [61][64] Question: What are the plans for redeploying proceeds from the sale of Capesize vessels? - The company is open to various segments and will focus on finding the right deals with strong structures and counterparties [68][72] Question: What is the expected timeline for the Seadrill appeal ruling? - The appeal period ends on March 5, and if appealed, it could take up to 12 months for a new ruling [76]