v3.26.1
Segment Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting, Revenue [Abstract]  
Segment Information Segment Information
 
Our business consists of four operating segments: (1) Floaters, which includes our drillships and semisubmersible rigs, (2) Jackups, (3) ARO and (4) Other, which consists of management services on rigs owned by third parties and the activities associated with our arrangements with ARO under the Lease Agreements. Floaters, Jackups and ARO are also reportable segments.
Our chief operating decision maker ("CODM") assesses segment performance based on their review of the operating income (loss) of each segment, which measures profitability after deducting normal operating costs. Components within operating income (loss), such as revenues and contract drilling expenses, are used to monitor actual performance against budget and monthly forecasted results for each segment. Further, the CODM utilizes revenue to derive a segment’s asset utilization, average daily revenue and revenue efficiency. Using these metrics, the CODM can identify potentially underperforming segments and develop strategies to increase profits or reduce costs, make investment decisions and allocate resources as needed. The disaggregated segment information, as presented in the tables below, aligns with the segment level information that is regularly provided to the CODM.

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, those costs are included in “Reconciling Items.” Further, General and administrative expenses, 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." We measure segment assets as Property and equipment, net.

The full operating results included below 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. See "Note 3 - Equity Method Investment in ARO" for additional information on ARO and related arrangements. Similarly, the Property and equipment, net balances presented below for ARO are not included within our Condensed Consolidated Balance Sheets and thus are also deducted under "Reconciling Items."

Segment information for the three and six months ended June 30, 2026 and 2025 are presented below (in millions):
Three Months Ended June 30, 2026

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$279.0 $183.4 $126.9 $39.9 $(126.9)$502.3 
Reimbursable revenues11.0 13.8 — 12.1 — 36.9 
Total operating revenues290.0 197.2 126.9 52.0 (126.9)539.2 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
167.9 143.9 71.6 27.4 (30.4)380.4 
Reimbursable expenses10.5 12.7 — 11.9 — 35.1 
Total contract drilling expenses (exclusive of depreciation)
178.4 156.6 71.6 39.3 (30.4)415.5 
Depreciation17.2 16.2 22.0 6.1 (16.9)44.6 
General and administrative— — 10.6 — 16.6 27.2 
Merger and integration expenses— — — — 11.4 11.4 
Total operating expenses
195.6 172.8 104.2 45.4 (19.3)498.7 
Equity in earnings of ARO— — — — 10.6 10.6 
Operating income$94.4 $24.4 $22.7 $6.6 $(97.0)$51.1 
Property and equipment, net$1,320.2 $636.3 $1,270.4 $224.1 $(1,217.2)$2,233.8 
Capital expenditures$58.4 $21.6 $39.3 $24.1 $(37.9)$105.5 
Three Months Ended June 30, 2025

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$319.7 $212.0 $139.9 $40.6 $(139.9)$572.3 
Reimbursable revenues
7.2 26.0 — 9.7 — 42.9 
Total operating revenues
326.9 238.0 139.9 50.3 (139.9)615.2 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
176.3 124.3 96.4 17.4 (59.2)355.2 
Reimbursable expenses
6.7 24.3 — 9.5 — 40.5 
Total contract drilling expenses (exclusive of depreciation)
183.0 148.6 96.4 26.9 (59.2)395.7 
Depreciation14.6 14.6 28.7 2.8 (25.2)35.5 
General and administrative— — 6.6 — 12.2 18.8 
Total operating expenses197.6 163.2 131.7 29.7 (72.2)450.0 
Equity in losses of ARO— — — — (1.1)(1.1)
Operating income$129.3 $74.8 $8.2 $20.6 $(68.8)$164.1 
Property and equipment, net$1,183.3 $643.4 $1,214.9 $133.6 $(1,153.6)$2,021.6 
Capital expenditures
$25.2 $39.8 $14.1 $— $(11.9)$67.2 

Six Months Ended June 30, 2026

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$471.6 $379.2 $254.3 $81.6 $(254.3)$932.4 
Reimbursable revenues16.0 28.2 — 28.0 — 72.2 
Total operating revenues487.6 407.4 254.3 109.6 (254.3)1,004.6 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
318.5 272.7 146.7 50.1 (67.2)720.8 
Reimbursable expenses15.4 25.9 — 26.8 — 68.1 
Total contract drilling expenses (exclusive of depreciation)
333.9 298.6 146.7 76.9 (67.2)788.9 
Depreciation32.9 32.7 46.9 12.3 (37.5)87.3 
General and administrative— — 17.7 — 34.8 52.5 
Merger and integration expenses— — — — 25.0 25.0 
Other operating income(2.8)— — — — (2.8)
Total operating expenses
364.0 331.3 211.3 89.2 (44.9)950.9 
Equity in earnings of ARO— — — — 17.4 17.4 
Operating income$123.6 $76.1 $43.0 $20.4 $(192.0)$71.1 
Property and equipment, net$1,320.2 $636.3 $1,270.4 $224.1 $(1,217.2)$2,233.8 
Capital expenditures$113.7 $44.6 $71.6 $46.6 $(70.1)$206.4 
Six Months Ended June 30, 2025

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$675.7 $397.9 $274.6 $76.5 $(274.6)$1,150.1 
Reimbursable revenues
16.1 53.7 — 16.0 — 85.8 
Total operating revenues
691.8 451.6 274.6 92.5 (274.6)1,235.9 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
380.3 241.0 182.0 33.4 (107.5)729.2 
Reimbursable expenses
15.0 50.7 — 15.8 — 81.5 
Total contract drilling expenses (exclusive of depreciation)
395.3 291.7 182.0 49.2 (107.5)810.7 
Depreciation28.8 27.3 58.2 5.6 (51.3)68.6 
General and administrative— — 12.9 — 30.3 43.2 
Other operating loss
7.8 — — — — 7.8 
Total operating expenses431.9 319.0 253.1 54.8 (128.5)930.3 
Equity in earnings of ARO— — — — 1.5 1.5 
Operating income$259.9 $132.6 $21.5 $37.7 $(144.6)$307.1 
Property and equipment, net$1,183.3 $643.4 $1,214.9 $133.6 $(1,153.6)$2,021.6 
Capital expenditures
$52.2 $110.0 $22.1 $— $(16.9)$167.4 

Information about Geographic Areas

As of June 30, 2026, the geographic distribution of our and ARO's drilling rigs was as follows:
FloatersJackupsOtherTotal ValarisARO
Middle East & Africa4 5 7 16 9 
Europe
4 11 — 15 — 
North & South America
5 3 — 8 — 
Asia & Pacific Rim1 3 — 4 — 
Held for sale(1)
— 1 — 1 — 
Total14 23 7 44 9 

(1)VALARIS 109 was classified as held for sale and is preservation stacked in Africa as of June 30, 2026. See "Note 5 - Property and Equipment" for more information.

We provide management services in the Gulf of America on two rigs owned by a third party not included in the table above.
ARO ordered two newbuild jackups, Kingdom 3 and Kingdom 4, which are under construction in the Middle East and are not included in the table above.