Record $4.9B backlog as Valaris (NYSE: VAL) reports Q1 2026 loss
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Valaris Limited reported a mixed first quarter 2026. Total operating revenues were $465.4 million, down from $537.4 million in the prior quarter, and the company recorded a net loss of $18.0 million versus a tax-driven profit previously. Adjusted EBITDA was $66.7 million, down from $97.0 million, as fewer operating days in both floater and jackup fleets reduced revenue.
Revenue efficiency remained strong at 98%, reflecting high uptime on contracted rigs. Contract drilling expenses fell to $340.4 million, helped by warm-stacking certain floaters and deferring preparation costs, though war-risk insurance in the Middle East added about $8 million of costs. Cash and cash equivalents were $578.3 million as of March 31, 2026.
Commercially, Valaris added over $500 million of new contract backlog, lifting total backlog to approximately $4.9 billion, its highest in nearly a decade, including a multi-year extension for VALARIS DS-4 in Brazil. The company also highlighted a pending all-stock business combination with Transocean and stated it does not intend to hold future earnings calls or update forward-looking guidance while that transaction is pending.
Positive
- Total contract backlog reached approximately $4.9 billion, its highest level in nearly a decade, after adding over $500 million of new awards including a multi-year extension for drillship VALARIS DS-4 offshore Brazil.
- Revenue efficiency remained very strong at 98% in the first quarter 2026, indicating rigs are earning near their maximum potential contracted day-rate revenue despite fewer operating days overall.
Negative
- Quarterly performance weakened versus Q4 2025, with operating revenues declining from $537.4 million to $465.4 million and results swinging from $716.8 million of net income to an $18.0 million net loss, while Adjusted EBITDA fell from $97.0 million to $66.7 million.
- Additional costs related to conflicts in the Middle East increased expenses by about $8 million, primarily due to higher war-risk insurance for jackups and other rigs operating or in shipyards in the region.
Insights
Q1 shows weaker earnings but record backlog and a pending Transocean merger.
Valaris generated Q1 2026 operating revenues of $465.4 million and a net loss of $18.0 million, with Adjusted EBITDA falling to $66.7 million. The step-down from Q4 primarily reflects fewer operating days across floaters and jackups and a much smaller tax benefit.
Operational metrics were solid: revenue efficiency was 98%, and contract drilling expenses decreased to $340.4 million as some rigs were warm-stacked and certain preparation costs deferred. Cash and cash equivalents of $578.3 million and total equity of $3.16 billion as of March 31, 2026 indicate a robust balance sheet relative to long-term debt of about $1.09 billion.
Strategically, backlog rose to roughly $4.93 billion, the highest in nearly a decade, supported by more than $500 million in new awards and a long extension for VALARIS DS-4 offshore Brazil. Management also referenced a pending all-stock business combination with Transocean, and indicated they will forgo future earnings calls and guidance updates while that transaction is pending.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total operating revenues: $465.4 million
Net income (loss): ($18.0 million)
Adjusted EBITDA: $66.7 million
+5 more
8 metrics
Total operating revenues
$465.4 million
Three months ended March 31, 2026
Net income (loss)
($18.0 million)
Three months ended March 31, 2026
Adjusted EBITDA
$66.7 million
Three months ended March 31, 2026
Total contract backlog
$4.93 billion
As of May 4, 2026
Cash and cash equivalents
$578.3 million
As of March 31, 2026
Capital expenditures
$100.9 million
Three months ended March 31, 2026
Revenue efficiency
98%
Three months ended March 31, 2026, total fleet
Total fleet utilization
58%
Three months ended March 31, 2026, total fleet
Key Terms
Adjusted EBITDA, contract backlog, revenue efficiency, all-stock transaction, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA of $67 million compared to $97 million in the fourth quarter."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
contract backlog financial
"As a result, total backlog now stands at approximately $4.9 billion, our highest level in nearly a decade"
A contract backlog is the total value of work or orders that a company has committed to complete but has not yet finished. It acts like a pending to-do list of projects or jobs, indicating future revenue potential. For investors, a large or growing backlog suggests steady future income, while a shrinking backlog might signal slowing business activity.
revenue efficiency financial
"We delivered safe and reliable operations for our customers, achieving revenue efficiency of 98% in the first quarter."
A measure of how effectively a company turns its sales-related resources — such as marketing spending, sales staff, or operational capacity — into actual revenue. Investors use it to judge whether growth is coming from smart use of resources or simply from pouring more money into sales; like checking how many apples you get per dollar spent on seeds and labor, higher revenue efficiency means more output for the same input and typically signals healthier profit potential.
all-stock transaction financial
"we were pleased to announce an all-stock transaction with Transocean that will benefit our shareholders"
An all-stock transaction is a deal where one company acquires another using only its own shares instead of cash or other assets. For investors, this means exchanging ownership stakes rather than cash, which can affect the value and control of the companies involved. It often signals a focus on growth and can influence the stock prices of both companies.
rig utilization financial
"Rig utilization is derived by dividing the number of operating days by the number of available days in the period"
non-GAAP financial measures financial
"this press release provides investors with Adjusted EBITDA, which is a non-GAAP measure."
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Earnings Snapshot
Total operating revenues: $465.4 million · Guidance included
Q1 2026
Total operating revenues
$465.4 million
-13% vs Q4 2025
Net income (loss)
($18.0 million)
down from $716.8 million in Q4 2025
Adjusted EBITDA
$66.7 million
down from $97.0 million in Q4 2025
Total contract backlog
$4.93 billion
up from $4.67 billion as of February 17, 2026
Guidance
Management stated they expect a meaningful improvement in financial results through 2026, supported by strong project delivery and operational execution.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
Registrant’s telephone number, including area code: 44 (0) 20 7659 4660
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging Growth Company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
TABLE OF CONTENTS
INFORMATION TO BE INCLUDED IN THE REPORT | 2 | ||||
Item 2.02 Results of Operations and Financial Condition | 2 | ||||
Item 9.01 Financial Statements and Exhibits | 3 | ||||
SIGNATURE | 4 | ||||
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2.02 Results of Operations and Financial Condition
Attached hereto as Exhibit 99.1 and incorporated by reference in its entirety into this Item 2.02 is a copy of the press release dated May 4, 2026 of Valaris Limited announcing its First Quarter 2026 results.
The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Press release issued by Valaris Limited, dated May 4, 2026 | |||||||
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T formatted in inline Extensible Business Reporting Language | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Valaris Limited | ||||||||
| May 4, 2026 | /s/ CHRISTOPHER T. WEBER | |||||||
Christopher T. Weber Senior Vice President and Chief Financial Officer | ||||||||
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 | www.valaris.com | Press Release | ||||||||||||||||||
Valaris Reports First Quarter 2026 Results
Hamilton, Bermuda, May 4, 2026… Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported first quarter 2026 results.
President and Chief Executive Officer Anton Dibowitz said, “Thank you to the entire Valaris team for a strong start to the year. We delivered safe and reliable operations for our customers, achieving revenue efficiency of 98% in the first quarter. We expect a meaningful improvement in our financial results through 2026, supported by strong project delivery and operational execution, with the DS-12 having successfully returned to operations ahead of schedule and three additional drillships from our active fleet on track to restart later this year.”
Dibowitz added, “We continue to execute our commercial strategy, adding over $500 million of new contract backlog since reporting our fourth quarter results, including a multi-year extension for VALARIS DS-4 offshore Brazil that secures continuous work for the rig into 2030. As a result, total backlog now stands at approximately $4.9 billion, our highest level in nearly a decade, further supporting future earnings and cash flow.”
Dibowitz continued, “We remain positive on the outlook for offshore drilling, supported by improving market fundamentals. While the ongoing conflicts in the Middle East have created near-term uncertainty, they reinforce the strategic importance of energy security and the need for sustained upstream investment to help ensure reliable and affordable energy supply.”
Dibowitz concluded, “During the quarter, we were pleased to announce an all-stock transaction with Transocean that will benefit our shareholders, customers and employees. The transaction is expected to deliver meaningful value to Valaris shareholders through anticipated synergies and the opportunity to participate in the future upside potential of a combined company that is capable of operating any rig at any water depth in any offshore environment around the world.”
Financial and Operational Highlights
•Total operating revenues of $465 million and a net loss of $18 million
•Revenue efficiency of 98%
•Adjusted EBITDA of $67 million
•Announced an all-stock transaction with Transocean that is expected to deliver meaningful value to Valaris shareholders
•Secured over $500 million of new contract backlog since reporting fourth quarter 2025 results, increasing total backlog to approximately $4.9 billion
•Entered into a strategic collaboration agreement with Petronas Suriname and Halliburton to support development of Petronas Suriname's offshore assets
•VALARIS 248 received the Chairman's Award for Jackup Rigs at the 2026 IADC North Sea Chapter Annual Safety Awards in recognition of the rig's safety performance in 2025
First Quarter Review
Net loss of $18 million compared to net income of $717 million in the fourth quarter 2025. Net loss included a tax expense of $28 million compared to a tax benefit of $680 million in the fourth quarter. Adjusted EBITDA of $67 million compared to $97 million in the fourth quarter.
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Revenues exclusive of reimbursable items decreased to $430 million from $502 million in the fourth quarter 2025, primarily due to fewer operating days across both the floater and jackup fleets.
Contract drilling expenses exclusive of reimbursable items decreased to $340 million from $380 million in the fourth quarter 2025, primarily due to fewer operating days for the floater fleet and the deferral of contract preparation costs for certain rigs. These items were partially offset by an $8 million increase in costs related to the ongoing conflicts in the Middle East, primarily the incremental cost to maintain insurance coverage for war-related risks for jackups that Valaris operates in the region.
General and administrative expenses decreased to $25 million from $27 million in the fourth quarter 2025, primarily due to lower professional fees.
First quarter 2026 included $14 million of merger and integration expenses, primarily related to professional fees incurred in connection with the pending business combination with Transocean.
Other expense increased to $10 million from $3 million in the fourth quarter 2025, primarily due to unfavorable movements in foreign currency exchange rates and lower interest income.
Tax expense of $28 million compared to a tax benefit of $680 million in the fourth quarter 2025. The first quarter tax provision included $2 million of discrete tax expense, primarily related to the resolution of prior period tax matters. The fourth quarter tax provision included $691 million of tax benefit related to changes in deferred tax asset valuation allowances in certain operating jurisdictions and a $7 million discrete tax benefit primarily attributable to rig impairments. Adjusted for these items, tax expense increased to $26 million from $18 million in the fourth quarter due to a change in the jurisdictional mix of income.
Capital expenditures decreased to $101 million from $106 million in the fourth quarter 2025.
Cash and cash equivalents decreased to $578 million as of March 31, 2026, from $599 million as of December 31, 2025, primarily due to capital expenditures, partially offset by cash flow from operations.
First Quarter Segment Review
Floaters
Revenues exclusive of reimbursable items decreased to $193 million from $255 million in the fourth quarter 2025, primarily due to VALARIS DS-17, which underwent contract preparation activities for most of the first quarter prior to commencing a new contract in late March, as well as VALARIS DPS-1 and MS-1, which completed contracts mid-fourth quarter without follow-on work.
Contract drilling expenses exclusive of reimbursable items decreased to $151 million from $198 million in the fourth quarter 2025, primarily due to cost reductions associated with warm stacking VALARIS DPS-1 and MS-1, as well as the deferral of contract preparation costs for certain drillships that are restarting operations this year.
Jackups
Revenues exclusive of reimbursable items decreased to $196 million from $209 million in the fourth quarter 2025, primarily due to fewer operating days for VALARIS 106, which had an idle period after completing a contract early in the first quarter, and a lower day rate for VALARIS 123, which commenced a short-term accommodation services contract early in the first quarter.
Contract drilling expenses exclusive of reimbursable items increased to $129 million from $121 million in the fourth quarter 2025, primarily due to incremental cost to maintain insurance coverage for war-related risks for jackups that Valaris operates in the Middle East.
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ARO Drilling
Revenues decreased to $127 million from $140 million in the fourth quarter 2025, primarily due to more out of service time related to planned shipyard projects for certain rigs, including VALARIS 116 and 250. This was partially offset by more operating days for VALARIS 76, which commenced a contract late in the fourth quarter. Contract drilling expenses decreased to $75 million from $87 million in the fourth quarter, primarily due to lower operating costs for rigs that were undergoing shipyard projects, partially offset by higher operating costs for VALARIS 76.
Other
Revenues exclusive of reimbursable items increased to $42 million from $38 million in the fourth quarter 2025, primarily due to higher bareboat charter revenues from rigs leased to ARO, resulting from more operating days for VALARIS 76, partially offset by fewer operating days for VALARIS 116 and 250. Contract drilling expenses exclusive of reimbursable items increased to $23 million from $21 million in the fourth quarter, primarily due to incremental cost to maintain insurance coverage for war-related risks for VALARIS 116 and 250, which are undergoing shipyard projects in the Middle East prior to recommencing long-term bareboat charters with ARO.
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Floaters | Jackups | ARO (1) | Other | Reconciling Items (1)(2) | Consolidated Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of $, except %) | Q1 2026 | Q4 2025 | Chg | Q1 2026 | Q4 2025 | Chg | Q1 2026 | Q4 2025 | Chg | Q1 2026 | Q4 2025 | Chg | Q1 2026 | Q4 2025 | Q1 2026 | Q4 2025 | Chg | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues (exclusive of reimbursable revenues) | $ | 192.6 | $ | 255.4 | (25) | % | $ | 195.8 | $ | 208.8 | (6) | % | $ | 127.4 | $ | 139.6 | (9) | % | $ | 41.7 | $ | 38.0 | 10 | % | $ | (127.4) | $ | (139.6) | $ | 430.1 | $ | 502.2 | (14) | % | ||||||||||||||||||||||||||||||||||
| Reimbursable revenues | 5.0 | 10.5 | (52) | % | 14.4 | 15.3 | (6) | % | — | — | — | % | 15.9 | 9.4 | 69 | % | — | — | 35.3 | 35.2 | — | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total operating revenues | 197.6 | 265.9 | (26) | % | 210.2 | 224.1 | (6) | % | 127.4 | 139.6 | (9) | % | 57.6 | 47.4 | 22 | % | (127.4) | (139.6) | 465.4 | 537.4 | (13) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract drilling expenses (exclusive of depreciation and reimbursable expenses) | 150.6 | 197.6 | 24 | % | 128.8 | 120.7 | (7) | % | 75.1 | 87.1 | 14 | % | 22.7 | 20.9 | (9) | % | (36.8) | (46.0) | 340.4 | 380.3 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Reimbursable expenses | 4.9 | 9.9 | 51 | % | 13.2 | 13.9 | 5 | % | — | — | — | % | 14.9 | 9.3 | (60) | % | — | — | 33.0 | 33.1 | — | % | ||||||||||||||||||||||||||||||||||||||||||||||
Total contract drilling expenses (exclusive of depreciation) | 155.5 | 207.5 | 25 | % | 142.0 | 134.6 | (5) | % | 75.1 | 87.1 | 14 | % | 37.6 | 30.2 | (25) | % | (36.8) | (46.0) | 373.4 | 413.4 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation | 15.7 | 16.2 | 3 | % | 16.5 | 16.0 | (3) | % | 24.9 | 28.3 | 12 | % | 6.2 | 4.6 | (35) | % | (20.6) | (24.5) | 42.7 | 40.6 | (5) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| General and admin. | — | — | — | % | — | — | — | % | 7.1 | 10.4 | 32 | % | — | — | — | % | 18.2 | 16.6 | 25.3 | 27.0 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Merger and integration expenses | — | — | — | % | — | — | — | % | — | — | — | % | — | — | — | % | 13.6 | — | 13.6 | — | nm | |||||||||||||||||||||||||||||||||||||||||||||||
Other operating (income) loss | (2.8) | 15.8 | nm | — | 3.7 | nm | — | — | — | % | — | — | — | % | — | — | (2.8) | 19.5 | nm | |||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 168.4 | 239.5 | 30 | % | 158.5 | 154.3 | (3) | % | 107.1 | 125.8 | 15 | % | 43.8 | 34.8 | (26) | % | (25.6) | (53.9) | 452.2 | 500.5 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Equity in earnings of ARO | — | — | — | % | — | — | — | % | — | — | — | % | — | — | — | % | 6.8 | 2.5 | 6.8 | 2.5 | 172 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 29.2 | $ | 26.4 | 11 | % | $ | 51.7 | $ | 69.8 | (26) | % | $ | 20.3 | $ | 13.8 | 47 | % | $ | 13.8 | $ | 12.6 | 10 | % | $ | (95.0) | $ | (83.2) | $ | 20.0 | $ | 39.4 | (49) | % | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 28.3 | $ | 26.4 | 7 | % | $ | 51.6 | $ | 69.9 | (26) | % | $ | 7.4 | $ | (1.4) | nm | $ | 14.6 | $ | 13.0 | 12 | % | $ | (119.9) | $ | 608.9 | $ | (18.0) | $ | 716.8 | nm | ||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 42.1 | $ | 58.4 | (28) | % | $ | 68.2 | $ | 89.5 | (24) | % | $ | 45.2 | $ | 42.1 | 7 | % | $ | 20.0 | $ | 17.2 | 16 | % | $ | (108.8) | $ | (110.2) | $ | 66.7 | $ | 97.0 | (31) | % | ||||||||||||||||||||||||||||||||||
nm - Not meaningful
(1) The full operating results included above for ARO are not included within our consolidated results and thus are deducted under "Reconciling Items" and replaced with our equity in earnings of ARO.
(2) Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in "Reconciling Items." Further, general and administrative expense, depreciation expense and merger and integration expenses incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in "Reconciling Items."
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Conference Call
In connection with the pending business combination with Transocean Ltd., announced on February 9, 2026, Valaris does not intend to hold future earnings conference calls or provide updates to forward-looking guidance.
About Valaris Limited
Valaris Limited (NYSE: VAL) is an 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 limited by shares (Bermuda No. 56245). To learn more, visit the Valaris website at www.valaris.com.
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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," "outlook," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance and expected benefits of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; uncertainty around the use and impacts of artificial intelligence applications; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; 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 risks associated with the pending transaction with Transocean Ltd., including, among others, the completion of the pending transaction on the anticipated terms and timing, or at all, the risk that disruptions from the transaction will harm our business, including current plans and operations, the diversion of management's time and attention from ordinary course operations to completion of the pending transaction and certain restrictions during the pendency of the transaction that may impact our business; cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, inflation, volatility affecting financial markets and the banking system, changing tariff policies, trade disputes, and adverse changes in the level of international trade activity; terrorism, piracy and military action (including conflicts in the Middle East and potential disruptions to key shipping lanes such as the Strait of Hormuz); risks inherent to shipyard upgrade, repair, maintenance, enhancement or rig reactivation; 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; the use of artificial intelligence by us, third-party service providers or our competitors; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission'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: | Tim Richardson | ||||
| Director - Investor Relations | |||||
+1-713-979-4619 | |||||
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| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
| OPERATING REVENUES | |||||||||||||||||||||||||||||
| Revenues (exclusive of reimbursable revenues) | $ | 430.1 | $ | 502.2 | $ | 555.6 | $ | 572.3 | $ | 577.8 | |||||||||||||||||||
| Reimbursable revenues | 35.3 | 35.2 | 40.1 | 42.9 | 42.9 | ||||||||||||||||||||||||
| Total operating revenues | 465.4 | 537.4 | 595.7 | 615.2 | 620.7 | ||||||||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||||||||
| Contract drilling expenses (exclusive of depreciation and reimbursable expenses) | 340.4 | 380.3 | 367.6 | 355.2 | 374.0 | ||||||||||||||||||||||||
| Reimbursable expenses | 33.0 | 33.1 | 38.0 | 40.5 | 41.0 | ||||||||||||||||||||||||
| Total contract drilling expenses (exclusive of depreciation) | 373.4 | 413.4 | 405.6 | 395.7 | 415.0 | ||||||||||||||||||||||||
| Depreciation | 42.7 | 40.6 | 37.1 | 35.5 | 33.1 | ||||||||||||||||||||||||
| General and administrative | 25.3 | 27.0 | 26.9 | 18.8 | 24.4 | ||||||||||||||||||||||||
| Merger and integration expenses | 13.6 | — | — | — | — | ||||||||||||||||||||||||
| Other operating (income) loss | (2.8) | 19.5 | — | — | 7.8 | ||||||||||||||||||||||||
| Total operating expenses | 452.2 | 500.5 | 469.6 | 450.0 | 480.3 | ||||||||||||||||||||||||
| EQUITY IN EARNINGS (LOSSES) OF ARO | 6.8 | 2.5 | 4.4 | (1.1) | 2.6 | ||||||||||||||||||||||||
| OPERATING INCOME | 20.0 | 39.4 | 130.5 | 164.1 | 143.0 | ||||||||||||||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||||||||||
| Interest income | 17.0 | 18.7 | 22.6 | 15.1 | 14.4 | ||||||||||||||||||||||||
| Interest expense, net | (24.3) | (24.8) | (24.9) | (24.8) | (24.3) | ||||||||||||||||||||||||
| Other, net | (2.3) | 3.1 | 87.7 | (8.7) | 21.2 | ||||||||||||||||||||||||
Total other income (expense) | (9.6) | (3.0) | 85.4 | (18.4) | 11.3 | ||||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 10.4 | 36.4 | 215.9 | 145.7 | 154.3 | ||||||||||||||||||||||||
| PROVISION (BENEFIT) FOR INCOME TAXES | 28.4 | (680.4) | 28.6 | 31.5 | 193.5 | ||||||||||||||||||||||||
| NET INCOME (LOSS) | (18.0) | 716.8 | 187.3 | 114.2 | (39.2) | ||||||||||||||||||||||||
| NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 1.6 | 0.7 | 0.8 | 0.9 | 1.3 | ||||||||||||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS | $ | (16.4) | $ | 717.5 | $ | 188.1 | $ | 115.1 | $ | (37.9) | |||||||||||||||||||
| EARNINGS (LOSS) PER SHARE | |||||||||||||||||||||||||||||
| Basic | $ | (0.24) | $ | 10.32 | $ | 2.66 | $ | 1.62 | $ | (0.53) | |||||||||||||||||||
| Diluted | $ | (0.24) | $ | 10.26 | $ | 2.65 | $ | 1.61 | $ | (0.53) | |||||||||||||||||||
| WEIGHTED-AVERAGE SHARES OUTSTANDING | |||||||||||||||||||||||||||||
| Basic | 69.2 | 69.5 | 70.7 | 71.1 | 71.0 | ||||||||||||||||||||||||
| Diluted | 69.2 | 69.9 | 71.0 | 71.3 | 71.0 | ||||||||||||||||||||||||
6
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| (In millions) | ||||||||||||||
(Unaudited) | ||||||||||||||
| As of | |||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||
| ASSETS | |||||||||||||||||
| CURRENT ASSETS | |||||||||||||||||
| Cash and cash equivalents | $ | 578.3 | $ | 599.4 | $ | 662.7 | $ | 503.4 | $ | 441.4 | |||||||
| Accounts receivable, net | 447.9 | 474.8 | 513.7 | 554.2 | 557.7 | ||||||||||||
| Assets held for sale | 9.2 | 6.4 | — | — | 7.0 | ||||||||||||
| Other current assets | 169.5 | 144.7 | 167.2 | 169.8 | 151.7 | ||||||||||||
| Total current assets | 1,204.9 | 1,225.3 | 1,343.6 | 1,227.4 | 1,157.8 | ||||||||||||
| PROPERTY AND EQUIPMENT, NET | 2,165.0 | 2,088.8 | 2,034.4 | 2,021.6 | 1,977.1 | ||||||||||||
| LONG-TERM NOTES RECEIVABLE FROM ARO | 351.1 | 345.0 | 314.7 | 308.5 | 302.3 | ||||||||||||
| INVESTMENT IN ARO | 128.6 | 121.8 | 119.3 | 114.9 | 116.0 | ||||||||||||
| DEFERRED TAX ASSETS | 1,355.5 | 1,364.2 | 673.9 | 675.5 | 679.0 | ||||||||||||
| OTHER ASSETS | 158.6 | 159.7 | 152.1 | 155.4 | 154.6 | ||||||||||||
| Total assets | $ | 5,363.7 | $ | 5,304.8 | $ | 4,638.0 | $ | 4,503.3 | $ | 4,386.8 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| CURRENT LIABILITIES | |||||||||||||||||
| Accounts payable - trade | $ | 398.5 | $ | 348.2 | $ | 327.1 | $ | 332.3 | $ | 329.3 | |||||||
| Accrued liabilities and other | 379.2 | 343.4 | 390.9 | 346.4 | 365.3 | ||||||||||||
| Total current liabilities | 777.7 | 691.6 | 718.0 | 678.7 | 694.6 | ||||||||||||
| LONG-TERM DEBT | 1,086.8 | 1,086.0 | 1,085.2 | 1,084.3 | 1,083.5 | ||||||||||||
| DEFERRED TAX LIABILITIES | 30.5 | 29.7 | 27.0 | 29.4 | 29.4 | ||||||||||||
| OTHER LIABILITIES | 307.0 | 325.8 | 357.2 | 377.6 | 367.8 | ||||||||||||
| TOTAL LIABILITIES | 2,202.0 | 2,133.1 | 2,187.4 | 2,170.0 | 2,175.3 | ||||||||||||
| TOTAL EQUITY | 3,161.7 | 3,171.7 | 2,450.6 | 2,333.3 | 2,211.5 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 5,363.7 | $ | 5,304.8 | $ | 4,638.0 | $ | 4,503.3 | $ | 4,386.8 | |||||||
7
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||
| OPERATING ACTIVITIES | |||||||||||||||||
| Net income (loss) | $ | (18.0) | $ | 716.8 | $ | 187.3 | $ | 114.2 | $ | (39.2) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||
| Depreciation expense | 42.7 | 40.6 | 37.1 | 35.5 | 33.1 | ||||||||||||
| Deferred income tax expense (benefit) | 9.5 | (687.6) | (0.8) | 3.5 | 169.8 | ||||||||||||
| Equity in losses (earnings) of ARO | (6.8) | (2.5) | (4.4) | 1.1 | (2.6) | ||||||||||||
| Share-based compensation expense | 6.4 | 6.8 | 6.8 | 6.0 | 5.6 | ||||||||||||
| Accretion of discount on Notes Receivable from ARO | (6.1) | (6.2) | (6.2) | (6.2) | (6.1) | ||||||||||||
| Other operating (income) loss | (2.8) | 19.5 | — | — | 7.8 | ||||||||||||
| Net (gain) loss on sale of property | 1.6 | (1.2) | (89.5) | (0.8) | (27.1) | ||||||||||||
| Changes in deferred costs | (22.8) | 7.0 | 4.8 | 4.5 | (0.2) | ||||||||||||
| Changes in contract assets | (6.9) | (4.7) | (5.3) | 0.1 | (0.4) | ||||||||||||
| Changes in contract liabilities | 0.4 | (1.7) | (5.9) | (15.6) | (17.8) | ||||||||||||
| Other | 0.8 | 1.9 | 1.7 | 2.1 | 2.3 | ||||||||||||
| Changes in operating assets and liabilities | 80.3 | (13.0) | 77.3 | (21.1) | 35.7 | ||||||||||||
| Contributions to pension plans and other post-retirement benefits | (3.3) | (3.5) | (4.8) | (3.3) | (5.0) | ||||||||||||
| Net cash provided by operating activities | 75.0 | 72.2 | 198.1 | 120.0 | 155.9 | ||||||||||||
| INVESTING ACTIVITIES | |||||||||||||||||
| Additions to property and equipment | (100.9) | (106.3) | (69.8) | (67.2) | (100.2) | ||||||||||||
| Proceeds from disposition of assets | 5.2 | 1.6 | 108.7 | 9.8 | 17.8 | ||||||||||||
| Net cash provided by (used in) investing activities | (95.7) | (104.7) | 38.9 | (57.4) | (82.4) | ||||||||||||
| FINANCING ACTIVITIES | |||||||||||||||||
| Payments related to tax withholdings for share-based awards | (1.4) | (0.5) | (2.7) | (0.1) | (0.3) | ||||||||||||
| Payments for share repurchases | — | (25.0) | (75.0) | — | — | ||||||||||||
| Net cash used in financing activities | (1.4) | (25.5) | (77.7) | (0.1) | (0.3) | ||||||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (22.1) | (58.0) | 159.3 | 62.5 | 73.2 | ||||||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD (1) | 617.5 | 675.5 | 516.2 | 453.7 | 380.5 | ||||||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (1) | $ | 595.4 | $ | 617.5 | $ | 675.5 | $ | 516.2 | $ | 453.7 | |||||||
(1)Restricted cash balances were $17.1 million, $18.1 million, $12.8 million, $12.8 million, $12.3 million, and $12.3 million as of March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.
8
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
REVENUES | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | $ | 192.6 | $ | 231.1 | $ | 253.8 | $ | 282.7 | $ | 317.3 | |||||||||||||||||||
| Semisubmersibles | — | 24.3 | 39.2 | 37.0 | 38.7 | ||||||||||||||||||||||||
| $ | 192.6 | $ | 255.4 | $ | 293.0 | $ | 319.7 | $ | 356.0 | ||||||||||||||||||||
Reimbursable Revenues (1) | 5.0 | 10.5 | 9.9 | 7.2 | 8.9 | ||||||||||||||||||||||||
Total Floaters | $ | 197.6 | $ | 265.9 | $ | 302.9 | $ | 326.9 | $ | 364.9 | |||||||||||||||||||
Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | $ | 96.0 | $ | 98.2 | $ | 110.5 | $ | 115.0 | $ | 106.3 | |||||||||||||||||||
| Benign Environment | 80.9 | 91.5 | 91.2 | 81.4 | 64.8 | ||||||||||||||||||||||||
| Legacy | 18.9 | 19.1 | 15.0 | 15.6 | 14.8 | ||||||||||||||||||||||||
| $ | 195.8 | $ | 208.8 | $ | 216.7 | $ | 212.0 | $ | 185.9 | ||||||||||||||||||||
Reimbursable Revenues (1) | 14.4 | 15.3 | 20.4 | 26.0 | 27.7 | ||||||||||||||||||||||||
Total Jackups | $ | 210.2 | $ | 224.1 | $ | 237.1 | $ | 238.0 | $ | 213.6 | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | $ | 41.7 | $ | 38.0 | $ | 45.9 | $ | 40.6 | $ | 35.9 | |||||||||||||||||||
Reimbursable Revenues (1) | 15.9 | 9.4 | 9.8 | 9.7 | 6.3 | ||||||||||||||||||||||||
Total Other | $ | 57.6 | $ | 47.4 | $ | 55.7 | $ | 50.3 | $ | 42.2 | |||||||||||||||||||
Total Operating Revenues | $ | 465.4 | $ | 537.4 | $ | 595.7 | $ | 615.2 | $ | 620.7 | |||||||||||||||||||
Total Reimbursable Revenues (1) | $ | 35.3 | $ | 35.2 | $ | 40.1 | $ | 42.9 | $ | 42.9 | |||||||||||||||||||
| Revenues Exclusive of Reimbursable Revenues | $ | 430.1 | $ | 502.2 | $ | 555.6 | $ | 572.3 | $ | 577.8 | |||||||||||||||||||
(1)Reimbursable revenues represent reimbursements from our customers for purchases of supplies, equipment and incremental services provided at their request.
9
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
ADJUSTED EBITDA (1) | |||||||||||||||||||||||||||||
Floaters | |||||||||||||||||||||||||||||
| Drillships | $ | 43.8 | $ | 60.4 | $ | 94.7 | $ | 137.3 | $ | 145.9 | |||||||||||||||||||
| Semisubmersibles | (1.7) | (2.0) | 11.1 | 6.6 | 6.7 | ||||||||||||||||||||||||
| $ | 42.1 | $ | 58.4 | $ | 105.8 | $ | 143.9 | $ | 152.6 | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | $ | 35.4 | $ | 38.6 | $ | 48.8 | $ | 49.4 | $ | 38.6 | |||||||||||||||||||
| Benign Environment | 26.2 | 43.2 | 43.0 | 36.3 | 26.6 | ||||||||||||||||||||||||
| Legacy | 6.6 | 7.7 | 1.6 | 3.7 | 5.3 | ||||||||||||||||||||||||
| $ | 68.2 | $ | 89.5 | $ | 93.4 | $ | 89.4 | $ | 70.5 | ||||||||||||||||||||
| Total | $ | 110.3 | $ | 147.9 | $ | 199.2 | $ | 233.3 | $ | 223.1 | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | $ | 20.0 | $ | 17.2 | $ | 29.7 | $ | 23.4 | $ | 19.9 | |||||||||||||||||||
| Total | $ | 130.3 | $ | 165.1 | $ | 228.9 | $ | 256.7 | $ | 243.0 | |||||||||||||||||||
| Support costs | |||||||||||||||||||||||||||||
| General and administrative expense | $ | 25.3 | $ | 27.0 | $ | 26.9 | $ | 18.8 | $ | 24.4 | |||||||||||||||||||
| Onshore support costs | 38.3 | 41.1 | 38.8 | 37.2 | 37.3 | ||||||||||||||||||||||||
| $ | 63.6 | $ | 68.1 | $ | 65.7 | $ | 56.0 | $ | 61.7 | ||||||||||||||||||||
| Valaris Total | $ | 66.7 | $ | 97.0 | $ | 163.2 | $ | 200.7 | $ | 181.3 | |||||||||||||||||||
(1)Adjusted EBITDA is earnings before interest, tax, depreciation, other operating (income) loss, (gain) loss on sale of assets, merger and integration expenses and equity in (earnings) losses of ARO. Adjusted EBITDA for asset categories also excludes onshore support costs and general and administrative expenses.
10
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| As of | |||||||||||||||||||||||||||||
| May 4, 2026 | Feb 17, 2026 | Oct 23, 2025 | Jul 24, 2025 | Apr 30, 2025 | |||||||||||||||||||||||||
CONTRACT BACKLOG (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | $ | 3,319.8 | $ | 3,030.8 | $ | 2,617.8 | $ | 2,708.8 | $ | 2,114.7 | |||||||||||||||||||
| Semisubmersibles | — | — | 7.3 | 35.4 | 56.2 | ||||||||||||||||||||||||
| $ | 3,319.8 | $ | 3,030.8 | $ | 2,625.1 | $ | 2,744.2 | $ | 2,170.9 | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | $ | 350.1 | $ | 367.2 | $ | 525.3 | $ | 532.1 | $ | 640.5 | |||||||||||||||||||
| Benign Environment | 687.2 | 645.2 | 601.0 | 673.2 | 609.0 | ||||||||||||||||||||||||
| Legacy | 98.3 | 113.4 | 136.6 | 148.5 | 160.4 | ||||||||||||||||||||||||
| $ | 1,135.6 | $ | 1,125.8 | $ | 1,262.9 | $ | 1,353.8 | $ | 1,409.9 | ||||||||||||||||||||
| Total | $ | 4,455.4 | $ | 4,156.6 | $ | 3,888.0 | $ | 4,098.0 | $ | 3,580.8 | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | $ | 473.7 | $ | 515.7 | $ | 562.3 | $ | 616.4 | $ | 656.8 | |||||||||||||||||||
| Valaris Total | $ | 4,929.1 | $ | 4,672.3 | $ | 4,450.3 | $ | 4,714.4 | $ | 4,237.6 | |||||||||||||||||||
(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 may include 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.
11
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
AVERAGE DAILY REVENUE (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | $ | 436,000 | $ | 434,000 | $ | 425,000 | $ | 410,000 | $ | 418,000 | |||||||||||||||||||
| Semisubmersibles | — | 267,000 | 229,000 | 231,000 | 232,000 | ||||||||||||||||||||||||
| $ | 436,000 | $ | 409,000 | $ | 380,000 | $ | 377,000 | $ | 384,000 | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | $ | 134,000 | $ | 146,000 | $ | 148,000 | $ | 153,000 | $ | 142,000 | |||||||||||||||||||
| Benign Environment | 147,000 | 142,000 | 143,000 | 144,000 | 125,000 | ||||||||||||||||||||||||
| Legacy | 105,000 | 104,000 | 100,000 | 88,000 | 82,000 | ||||||||||||||||||||||||
| $ | 135,000 | $ | 139,000 | $ | 141,000 | $ | 142,000 | $ | 128,000 | ||||||||||||||||||||
| Total | $ | 207,000 | $ | 218,000 | $ | 220,000 | $ | 227,000 | $ | 230,000 | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | $ | 66,000 | $ | 53,000 | $ | 55,000 | $ | 50,000 | $ | 44,000 | |||||||||||||||||||
| Valaris Total | $ | 171,000 | $ | 177,000 | $ | 176,000 | $ | 181,000 | $ | 182,000 | |||||||||||||||||||
(1)Average daily revenue is derived by dividing Revenues (exclusive of reimbursable revenues), excluding contract termination fees, by the aggregate number of operating days.
12
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
UTILIZATION - TOTAL FLEET (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | 38 | % | 45 | % | 48 | % | 58 | % | 65 | % | |||||||||||||||||||
| Semisubmersibles | — | % | 50 | % | 93 | % | 70 | % | 37 | % | |||||||||||||||||||
| 33 | % | 45 | % | 54 | % | 60 | % | 57 | % | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 88 | % | 77 | % | 77 | % | 76 | % | 71 | % | |||||||||||||||||||
| Benign Environment | 47 | % | 51 | % | 50 | % | 44 | % | 40 | % | |||||||||||||||||||
| Legacy | 100 | % | 100 | % | 82 | % | 98 | % | 100 | % | |||||||||||||||||||
| 67 | % | 64 | % | 63 | % | 61 | % | 57 | % | ||||||||||||||||||||
| Total | 54 | % | 57 | % | 60 | % | 61 | % | 57 | % | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | 78 | % | 86 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||
| Valaris Total | 58 | % | 63 | % | 67 | % | 68 | % | 64 | % | |||||||||||||||||||
Pro Forma Jackups (2) | 68 | % | 68 | % | 71 | % | 69 | % | 66 | % | |||||||||||||||||||
(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. Available days is defined as 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)Includes all Valaris jackups including those leased to ARO Drilling.
13
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
UTILIZATION - ACTIVE FLEET (1) (2) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | 49 | % | 58 | % | 63 | % | 76 | % | 84 | % | |||||||||||||||||||
| Semisubmersibles | — | % | 50 | % | 93 | % | 88 | % | 70 | % | |||||||||||||||||||
| 45 | % | 57 | % | 68 | % | 78 | % | 81 | % | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 99 | % | 94 | % | 96 | % | 93 | % | 87 | % | |||||||||||||||||||
| Benign Environment | 87 | % | 100 | % | 99 | % | 89 | % | 83 | % | |||||||||||||||||||
| Legacy | 100 | % | 100 | % | 82 | % | 98 | % | 100 | % | |||||||||||||||||||
| 94 | % | 97 | % | 96 | % | 92 | % | 87 | % | ||||||||||||||||||||
| Total | 75 | % | 80 | % | 84 | % | 86 | % | 85 | % | |||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | 78 | % | 86 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||
| Valaris Total | 76 | % | 82 | % | 88 | % | 89 | % | 88 | % | |||||||||||||||||||
Pro Forma Jackups (3) | 88 | % | 92 | % | 97 | % | 94 | % | 90 | % | |||||||||||||||||||
(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. Available days is defined as the maximum number of days available in the period for the active fleet, calculated by multiplying the number of active rigs in each asset category by the number of days in the period.
(2)Active fleet represents rigs that are not preservation stacked or held for sale and includes rigs that are in the process of being reactivated.
(3)Includes all Valaris jackups including those leased to ARO Drilling.
14
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
OPERATING DAYS (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | 442 | 533 | 579 | 689 | 759 | ||||||||||||||||||||||||
| Semisubmersibles | — | 91 | 171 | 160 | 167 | ||||||||||||||||||||||||
| 442 | 624 | 750 | 849 | 926 | |||||||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 714 | 690 | 748 | 753 | 697 | ||||||||||||||||||||||||
| Benign Environment | 549 | 643 | 638 | 566 | 519 | ||||||||||||||||||||||||
| Legacy | 180 | 184 | 150 | 178 | 180 | ||||||||||||||||||||||||
| 1,443 | 1,517 | 1,536 | 1,497 | 1,396 | |||||||||||||||||||||||||
| Total | 1,885 | 2,141 | 2,286 | 2,346 | 2,322 | ||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Leased and Managed Rigs | 630 | 714 | 828 | 819 | 810 | ||||||||||||||||||||||||
Total | 2,515 | 2,855 | 3,114 | 3,165 | 3,132 | ||||||||||||||||||||||||
(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 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.
15
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
REVENUE EFFICIENCY (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | 96 | % | 96 | % | 91 | % | 95 | % | 96 | % | |||||||||||||||||||
| Semisubmersibles | — | % | 100 | % | 97 | % | 89 | % | 95 | % | |||||||||||||||||||
| 96 | % | 97 | % | 92 | % | 95 | % | 96 | % | ||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 99 | % | 98 | % | 98 | % | 97 | % | 94 | % | |||||||||||||||||||
| Benign Environment | 100 | % | 100 | % | 100 | % | 99 | % | 100 | % | |||||||||||||||||||
| Legacy | 100 | % | 100 | % | 100 | % | 98 | % | 100 | % | |||||||||||||||||||
| 99 | % | 99 | % | 99 | % | 98 | % | 96 | % | ||||||||||||||||||||
Total | 98 | % | 98 | % | 95 | % | 96 | % | 96 | % | |||||||||||||||||||
(1)Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.
16
| VALARIS LIMITED AND SUBSIDIARIES | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
(Unaudited) | ||||||||||||||
| As of | |||||||||||||||||||||||||||||
| NUMBER OF RIGS | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | ||||||||||||||||||||||||
Active Fleet (1) | |||||||||||||||||||||||||||||
| Floaters | |||||||||||||||||||||||||||||
| Drillships | 10 | 10 | 10 | 10 | 10 | ||||||||||||||||||||||||
| Semisubmersibles | 1 | 1 | 2 | 2 | 2 | ||||||||||||||||||||||||
| 11 | 11 | 12 | 12 | 12 | |||||||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 8 | 8 | 8 | 9 | 9 | ||||||||||||||||||||||||
| Benign Environment | 7 | 7 | 7 | 7 | 7 | ||||||||||||||||||||||||
| Legacy | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||||||||||
| 17 | 17 | 17 | 18 | 18 | |||||||||||||||||||||||||
| Total Active Fleet | 28 | 28 | 29 | 30 | 30 | ||||||||||||||||||||||||
| Stacked Fleet | |||||||||||||||||||||||||||||
| Drillships | 3 | 3 | 3 | 3 | 3 | ||||||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 1 | 1 | 2 | 2 | 2 | ||||||||||||||||||||||||
| Benign Environment | 6 | 6 | 7 | 7 | 7 | ||||||||||||||||||||||||
| 7 | 7 | 9 | 9 | 9 | |||||||||||||||||||||||||
| Total Stacked Fleet | 10 | 10 | 12 | 12 | 12 | ||||||||||||||||||||||||
Held For Sale(2) | |||||||||||||||||||||||||||||
| Semisubmersibles | 1 | 1 | — | — | 3 | ||||||||||||||||||||||||
Leased Rigs (3) | |||||||||||||||||||||||||||||
| Jackups | |||||||||||||||||||||||||||||
| Harsh Environment | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
| Benign Environment | 6 | 6 | 6 | 6 | 6 | ||||||||||||||||||||||||
| Total Leased Rigs | 7 | 7 | 7 | 7 | 7 | ||||||||||||||||||||||||
Total | 46 | 46 | 48 | 49 | 52 | ||||||||||||||||||||||||
Managed Rigs (3) | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||||||||||
(1)Active fleet represents rigs that are not preservation stacked or held for sale and includes rigs that are in the process of being reactivated.
(2)Represents VALARIS DPS-1, which was classified as held for sale as of March 31, 2026 and December 31, 2025, as well as VALARIS DPS-3, VALARIS DPS-5 and VALARIS DPS-6, which were classified as held for sale as of March 31, 2025 and were subsequently sold in April 2025.
(3)Leased rigs and managed rigs included in Other reporting segment.
17
| ARO DRILLING | ||||||||||||||
| CONDENSED INCOME STATEMENT INFORMATION | ||||||||||||||
| (In millions) | ||||||||||||||
(Unaudited) | ||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
| Revenues | $ | 127.4 | $ | 139.6 | $ | 156.8 | $ | 139.9 | $ | 134.7 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||
Contract drilling expenses (exclusive of depreciation) | 75.1 | 87.1 | 91.6 | 96.4 | 85.6 | ||||||||||||||||||||||||
| Depreciation | 24.9 | 28.3 | 28.4 | 28.7 | 29.5 | ||||||||||||||||||||||||
| General and administrative | 7.1 | 10.4 | 5.5 | 6.6 | 6.3 | ||||||||||||||||||||||||
| Operating income | 20.3 | 13.8 | 31.3 | 8.2 | 13.3 | ||||||||||||||||||||||||
| Other expense, net | 12.9 | 14.5 | 14.3 | 15.5 | 15.2 | ||||||||||||||||||||||||
| Provision (benefit) for income taxes | — | 0.7 | 14.6 | 1.3 | (0.9) | ||||||||||||||||||||||||
| Net income (loss) | $ | 7.4 | $ | (1.4) | $ | 2.4 | $ | (8.6) | $ | (1.0) | |||||||||||||||||||
Adjusted EBITDA | $ | 45.2 | $ | 42.1 | $ | 59.7 | $ | 36.9 | $ | 42.8 | |||||||||||||||||||
ARO Drilling condensed income statement information presented above represents 100% of ARO. Valaris has a 50% ownership interest in ARO.
18
| ARO DRILLING | ||||||||||||||
| OPERATING STATISTICS | ||||||||||||||
| (Unaudited) | ||||||||||||||
| As of | |||||||||||||||||||||||||||||
| (In millions) | May 4, 2026 | Feb 17, 2026 | Oct 23, 2025 | Jul 24, 2025 | Apr 30, 2025 | ||||||||||||||||||||||||
CONTRACT BACKLOG (1) | |||||||||||||||||||||||||||||
| Owned Rigs | $ | 753.1 | $ | 778.0 | $ | 879.9 | $ | 970.1 | $ | 1,054.4 | |||||||||||||||||||
| Leased Rigs | 1,163.6 | 1,233.3 | 1,284.7 | 1,379.2 | 1,440.9 | ||||||||||||||||||||||||
| Total | $ | 1,916.7 | $ | 2,011.3 | $ | 2,164.6 | $ | 2,349.3 | $ | 2,495.3 | |||||||||||||||||||
(1)Contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. 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.
| Three Months Ended | |||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
AVERAGE DAILY REVENUE (1) | |||||||||||||||||||||||||||||
| Owned Rigs | $ | 111,000 | $ | 112,000 | $ | 112,000 | $ | 107,000 | $ | 111,000 | |||||||||||||||||||
Leased Rigs (2) | 114,000 | 116,000 | 126,000 | 122,000 | 102,000 | ||||||||||||||||||||||||
| Total | $ | 112,000 | $ | 113,000 | $ | 118,000 | $ | 113,000 | $ | 108,000 | |||||||||||||||||||
UTILIZATION (3) | |||||||||||||||||||||||||||||
| Owned Rigs | 88 | % | 94 | % | 96 | % | 93 | % | 92 | % | |||||||||||||||||||
Leased Rigs (2) | 68 | % | 71 | % | 83 | % | 76 | % | 80 | % | |||||||||||||||||||
| Total | 79 | % | 84 | % | 90 | % | 85 | % | 87 | % | |||||||||||||||||||
REVENUE EFFICIENCY (4) | |||||||||||||||||||||||||||||
| Owned Rigs | 98 | % | 97 | % | 100 | % | 95 | % | 97 | % | |||||||||||||||||||
Leased Rigs (2) | 92 | % | 89 | % | 92 | % | 83 | % | 80 | % | |||||||||||||||||||
| Total | 96 | % | 94 | % | 96 | % | 90 | % | 90 | % | |||||||||||||||||||
| NUMBER OF RIGS (AT QUARTER END) | |||||||||||||||||||||||||||||
| Owned Rigs | 9 | 9 | 9 | 9 | 9 | ||||||||||||||||||||||||
Leased Rigs (2) | 7 | 7 | 7 | 7 | 7 | ||||||||||||||||||||||||
| Total | 16 | 16 | 16 | 16 | 16 | ||||||||||||||||||||||||
OPERATING DAYS (5) | |||||||||||||||||||||||||||||
| Owned Rigs | 710 | 778 | 792 | 761 | 748 | ||||||||||||||||||||||||
Leased Rigs (2) | 430 | 455 | 532 | 481 | 503 | ||||||||||||||||||||||||
| Total | 1,140 | 1,233 | 1,324 | 1,242 | 1,251 | ||||||||||||||||||||||||
(1)Average daily revenue is derived by dividing Revenues (exclusive of reimbursable revenues), excluding contract termination fees, by the aggregate number of operating days.
(2)All ARO leased rigs are leased from Valaris.
(3)Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the rig fleet.
(4)Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.
(5)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 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.
19
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, which is a non-GAAP measure.
Valaris defines "Adjusted EBITDA" as net income (loss) before income tax expense, interest expense, other (income) expense, depreciation expense, other operating (income) loss, (gain) loss on sale of property, merger and integration expenses, and equity in (earnings) losses of ARO. 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 "ARO Adjusted EBITDA" as ARO's net income (loss) before income tax expense, other expense, net, and depreciation expense. ARO Adjusted 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. ARO 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. ARO Adjusted 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.
20
Reconciliation of Net Income (Loss) to Adjusted EBITDA
A reconciliation of net income (loss) as reported to Adjusted EBITDA is included in the tables below (in millions):
| Three Months Ended | |||||||||||
| Mar 31, 2026 | Dec 31, 2025 | ||||||||||
| VALARIS | |||||||||||
| Net income (loss) | $ | (18.0) | $ | 716.8 | |||||||
| Add (subtract): | |||||||||||
| Income tax expense (benefit) | 28.4 | (680.4) | |||||||||
| Interest expense, net | 24.3 | 24.8 | |||||||||
| (Gain) loss on sale of property | 1.6 | (1.2) | |||||||||
| Other income | (16.3) | (20.6) | |||||||||
| Operating income | 20.0 | 39.4 | |||||||||
| Add (subtract): | |||||||||||
| Depreciation | 42.7 | 40.6 | |||||||||
Merger and integration expenses | 13.6 | — | |||||||||
Other operating (income) loss(1) | (2.8) | 19.5 | |||||||||
| Equity in earnings of ARO | (6.8) | (2.5) | |||||||||
Adjusted EBITDA | $ | 66.7 | $ | 97.0 | |||||||
(1)Other operating (income) loss represents non-cash impairment losses and gains on remeasurement of assets classified as held for sale. During the three months ended March 31, 2026, we recognized a $2.8 million gain on remeasurement of VALARIS DPS-1. During the three months ended December 31, 2025, we recognized $19.5 million of non-cash impairment losses in connection with the retirements of VALARIS 102 and VALARIS 145 and the classification of VALARIS DPS-1 as held for sale.
A reconciliation of net income (loss) as reported to ARO Adjusted EBITDA is included in the tables below (in millions):
| Three Months Ended | |||||||||||
| Mar 31, 2026 | Dec 31, 2025 | ||||||||||
| ARO | |||||||||||
| Net income (loss) | $ | 7.4 | $ | (1.4) | |||||||
| Add: | |||||||||||
| Income tax expense | — | 0.7 | |||||||||
| Other expense, net | 12.9 | 14.5 | |||||||||
| Operating income | 20.3 | 13.8 | |||||||||
| Add: | |||||||||||
| Depreciation expense | 24.9 | 28.3 | |||||||||
Adjusted EBITDA | $ | 45.2 | $ | 42.1 | |||||||
21
Reconciliation of Net Income to Adjusted EBITDA
| (In millions) | Three Months Ended | ||||||||||
| Mar 31, 2026 | Dec 31, 2025 | ||||||||||
| FLOATERS | |||||||||||
| Net income | $ | 28.3 | $ | 26.4 | |||||||
| Add: | |||||||||||
| Other expense | 0.9 | — | |||||||||
| Operating income | 29.2 | 26.4 | |||||||||
| Add (subtract): | |||||||||||
| Depreciation | 15.7 | 16.2 | |||||||||
Other operating (income) loss(1) | (2.8) | 15.8 | |||||||||
| Adjusted EBITDA | $ | 42.1 | $ | 58.4 | |||||||
| JACKUPS | |||||||||||
| Net income | $ | 51.6 | $ | 69.9 | |||||||
| Add (subtract): | |||||||||||
| Other (income) expense | 0.1 | (0.1) | |||||||||
| Operating income | 51.7 | 69.8 | |||||||||
| Add: | |||||||||||
| Depreciation | 16.5 | 16.0 | |||||||||
Other operating loss(2) | — | 3.7 | |||||||||
| Adjusted EBITDA | $ | 68.2 | $ | 89.5 | |||||||
| OTHER | |||||||||||
| Net income | $ | 14.6 | $ | 13.0 | |||||||
| Subtract: | |||||||||||
| Other income | (0.8) | (0.4) | |||||||||
| Operating income | 13.8 | 12.6 | |||||||||
| Add: | |||||||||||
| Depreciation | 6.2 | 4.6 | |||||||||
| Adjusted EBITDA | $ | 20.0 | $ | 17.2 | |||||||
(1)Other operating (income) loss represents non-cash impairment losses and gains on remeasurement of assets classified as held for sale. During the three months ended March 31, 2026, we recognized a $2.8 million gain on remeasurement of VALARIS DPS-1. During the three months ended December 31, 2025, we recognized $15.8 million of non-cash impairment losses in connection with the classification of VALARIS DPS-1 as held for sale.
(2)Other operating loss for the three months ended December 31, 2025 represents non-cash impairment losses of $3.7 million recognized in connection with the retirements of VALARIS 102 and VALARIS 145.
22
Reconciliation of Net Income (Loss) to Adjusted EBITDA
| (In millions) | Three Months Ended | ||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
DRILLSHIPS | |||||||||||||||||||||||||||||
| Net income | $ | 28.5 | $ | 45.5 | $ | 80.3 | $ | 123.4 | $ | 132.2 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
| Other expense | 0.3 | — | 0.3 | 0.5 | 0.7 | ||||||||||||||||||||||||
| Operating income | 28.8 | 45.5 | 80.6 | 123.9 | 132.9 | ||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
Depreciation | 15.0 | 14.9 | 14.1 | 13.4 | 13.0 | ||||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 43.8 | $ | 60.4 | $ | 94.7 | $ | 137.3 | $ | 145.9 | |||||||||||||||||||
SEMISUBMERSIBLES | |||||||||||||||||||||||||||||
| Net income (loss) | $ | (0.2) | $ | (19.1) | $ | 9.7 | $ | 5.4 | $ | (2.3) | |||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
| Other expense | 0.6 | — | — | — | — | ||||||||||||||||||||||||
| Operating income (loss) | 0.4 | (19.1) | 9.7 | 5.4 | (2.3) | ||||||||||||||||||||||||
| Add (subtract): | |||||||||||||||||||||||||||||
| Depreciation | 0.7 | 1.3 | 1.4 | 1.2 | 1.2 | ||||||||||||||||||||||||
Other operating (income) loss (2) | (2.8) | 15.8 | — | — | 7.8 | ||||||||||||||||||||||||
Adjusted EBITDA (1) | $ | (1.7) | $ | (2.0) | $ | 11.1 | $ | 6.6 | $ | 6.7 | |||||||||||||||||||
(1)Adjusted EBITDA for asset categories excludes onshore support costs, general and administrative expenses and merger and integration expenses.
(2)Other operating (income) loss represents non-cash impairment losses and gains on remeasurement of assets classified as held for sale. During the three months ended March 31, 2026, we recognized a $2.8 million gain on remeasurement of VALARIS DPS-1. During the three months ended December 31, 2025, we recognized $15.8 million of non-cash impairment losses in connection with the classification of VALARIS DPS-1 as held for sale.
During the three months ended March 31, 2025, we recognized non-cash impairment loss of $7.8 million in connection with the retirements of VALARIS DPS-3, VALARIS DPS-5 and VALARIS DPS-6, which were classified as held for sale as of March 31, 2025 and were subsequently sold in April 2025.
23
Reconciliation of Net Income (Loss) to Adjusted EBITDA
| (In millions) | Three Months Ended | ||||||||||||||||||||||||||||
| Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | |||||||||||||||||||||||||
| HARSH ENVIRONMENT JACKUPS | |||||||||||||||||||||||||||||
| Net income | $ | 27.2 | $ | 29.3 | $ | 130.5 | $ | 42.2 | $ | 31.6 | |||||||||||||||||||
| Add (subtract): | |||||||||||||||||||||||||||||
| Gain on sale of property | — | — | (88.4) | — | — | ||||||||||||||||||||||||
| Other (income) expense | 0.1 | (0.1) | (0.4) | (0.1) | (0.1) | ||||||||||||||||||||||||
| Operating income | 27.3 | 29.2 | 41.7 | 42.1 | 31.5 | ||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
Depreciation | 8.1 | 7.7 | 7.1 | 7.3 | 7.1 | ||||||||||||||||||||||||
Other operating loss(1) | — | 1.7 | — | — | — | ||||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 35.4 | $ | 38.6 | $ | 48.8 | $ | 49.4 | $ | 38.6 | |||||||||||||||||||
| BENIGN ENVIRONMENT JACKUPS | |||||||||||||||||||||||||||||
| Net income | $ | 20.4 | $ | 35.5 | $ | 37.4 | $ | 31.7 | $ | 47.3 | |||||||||||||||||||
| Subtract: | |||||||||||||||||||||||||||||
| Gain on sale of property | — | — | — | — | (23.0) | ||||||||||||||||||||||||
| Other income | — | — | — | (0.2) | (0.8) | ||||||||||||||||||||||||
| Operating income | 20.4 | 35.5 | 37.4 | 31.5 | 23.5 | ||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
Depreciation | 5.8 | 5.7 | 5.6 | 4.8 | 3.1 | ||||||||||||||||||||||||
Other operating loss(1) | — | 2.0 | — | — | — | ||||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 26.2 | $ | 43.2 | $ | 43.0 | $ | 36.3 | $ | 26.6 | |||||||||||||||||||
| LEGACY JACKUPS | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 4.0 | $ | 5.1 | $ | (1.0) | $ | 1.2 | $ | 2.8 | |||||||||||||||||||
| Operating income (loss) | 4.0 | 5.1 | (1.0) | 1.2 | 2.8 | ||||||||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
Depreciation | 2.6 | 2.6 | 2.6 | 2.5 | 2.5 | ||||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 6.6 | $ | 7.7 | $ | 1.6 | $ | 3.7 | $ | 5.3 | |||||||||||||||||||
(1)Other operating loss for the three months ended December 31, 2025 represents non-cash impairment losses of $1.7 million and $2.0 million recognized in connection with the retirements of VALARIS 102, a harsh environment jackup, and VALARIS 145, a benign environment jackup, respectively.
(2)Adjusted EBITDA for asset categories excludes onshore support costs, general and administrative expenses and merger and integration expenses.
24
FAQ
How did Valaris (VAL) perform financially in Q1 2026?
Valaris reported Q1 2026 operating revenues of $465.4 million and a net loss of $18.0 million. Adjusted EBITDA was $66.7 million, down from $97.0 million in Q4 2025, mainly due to fewer operating days across both floater and jackup fleets.
What is Valaris (VAL)’s current contract backlog after Q1 2026?
Valaris reported total contract backlog of approximately $4.9 billion as of May 4, 2026. This reflected over $500 million of new awards since Q4 2025, including a multi-year extension for the VALARIS DS-4 drillship offshore Brazil, securing work into 2030.
How strong were Valaris (VAL)’s operating metrics like revenue efficiency in Q1 2026?
Valaris achieved 98% revenue efficiency in Q1 2026, indicating rigs earned nearly all potential contracted day-rate revenue. Total fleet utilization was 58%, while active fleet utilization reached 76%, reflecting high uptime on working rigs despite some stacked and shipyard units.
What impact did Middle East conflicts have on Valaris (VAL) in Q1 2026?
Valaris incurred about $8 million of additional costs in Q1 2026 tied to ongoing conflicts in the Middle East. These expenses mainly related to higher insurance premiums for war-related risks on jackups and other rigs operated or undergoing shipyard projects in the region.
What are the key details of Valaris (VAL)’s pending transaction with Transocean?
Valaris highlighted a pending all-stock business combination with Transocean announced earlier in 2026. Management stated the deal is expected to deliver value through anticipated synergies and exposure to a larger combined offshore fleet capable of operating across all water depths and environments.
Will Valaris (VAL) continue holding earnings calls after announcing the Transocean deal?
Valaris stated it does not intend to hold future earnings conference calls or provide updates to forward-looking guidance while the pending business combination with Transocean Ltd. remains in process, changing its prior communication practices around quarterly results.