v3.26.3
Segment Information
 9 Months Ended
Sep. 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 (losses) 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 nine months ended September 30, 2026 and 2025 are presented below (in millions):
Three Months Ended September 30, 2026

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$346.0 $171.2 $144.9 $38.4 $(144.9)$555.6 
Reimbursable revenues13.3 17.6 — 7.1 — 38.0 
Total operating revenues359.3 188.8 144.9 45.5 (144.9)593.6 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
188.8 129.2 91.7 20.8 (50.6)379.9 
Reimbursable expenses12.9 16.5 — 8.0 — 37.4 
Total contract drilling expenses (exclusive of depreciation)
201.7 145.7 91.7 28.8 (50.6)417.3 
Depreciation17.7 16.2 28.8 8.1 (23.5)47.3 
General and administrative— — 7.7 — 18.0 25.7 
Merger and integration expenses— — — — 15.5 15.5 
Other operating loss3.0 — — — — 3.0 
Total operating expenses
222.4 161.9 128.2 36.9 (40.6)508.8 
Equity in losses of ARO— — — — (3.5)(3.5)
Operating income$136.9 $26.9 $16.7 $8.6 $(107.8)$81.3 
Property and equipment, net$1,346.4 $641.9 $1,311.3 $217.5 $(1,257.9)$2,259.2 
Capital expenditures$60.3 $35.1 $69.5 $25.7 $(69.0)$121.6 
Three Months Ended September 30, 2025

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$293.0 $216.7 $156.8 $45.9 $(156.8)$555.6 
Reimbursable revenues
9.9 20.4 — 9.8 — 40.1 
Total operating revenues
302.9 237.1 156.8 55.7 (156.8)595.7 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
187.7 124.8 91.6 16.3 (52.8)367.6 
Reimbursable expenses
9.4 18.9 — 9.7 — 38.0 
Total contract drilling expenses (exclusive of depreciation)
197.1 143.7 91.6 26.0 (52.8)405.6 
Depreciation15.5 15.3 28.4 3.0 (25.1)37.1 
General and administrative— — 5.5 — 21.4 26.9 
Total operating expenses212.6 159.0 125.5 29.0 (56.5)469.6 
Equity in earnings of ARO— — — — 4.4 4.4 
Operating income$90.3 $78.1 $31.3 $26.7 $(95.9)$130.5 
Property and equipment, net$1,201.3 $628.9 $1,199.7 $145.4 $(1,140.9)$2,034.4 
Capital expenditures
$37.6 $28.9 $10.9 $— $(7.6)$69.8 

Nine Months Ended September 30, 2026
FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$817.6 $550.4 $399.2 $120.0 $(399.2)$1,488.0 
Reimbursable revenues29.3 45.8 — 35.1 — 110.2 
Total operating revenues846.9 596.2 399.2 155.1 (399.2)1,598.2 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
507.3 401.9 238.4 70.9 (117.8)1,100.7 
Reimbursable expenses28.3 42.4 — 34.8 — 105.5 
Total contract drilling expenses (exclusive of depreciation)
535.6 444.3 238.4 105.7 (117.8)1,206.2 
Depreciation50.6 48.9 75.7 20.4 (61.0)134.6 
General and administrative— — 25.4 — 52.8 78.2 
Merger and integration expenses— — — — 40.5 40.5 
Other operating loss, net0.2 — — — — 0.2 
Total operating expenses
586.4 493.2 339.5 126.1 (85.5)1,459.7 
Equity in earnings of ARO— — — — 13.9 13.9 
Operating income$260.5 $103.0 $59.7 $29.0 $(299.8)$152.4 
Property and equipment, net$1,346.4 $641.9 $1,311.3 $217.5 $(1,257.9)$2,259.2 
Capital expenditures$174.0 $79.7 $141.1 $72.3 $(139.1)$328.0 
Nine Months Ended September 30, 2025

FloatersJackupsAROOtherReconciling ItemsConsolidated Total
Operating revenues:
Revenues (exclusive of reimbursable revenues)
$968.7 $614.6 $431.4 $122.4 $(431.4)$1,705.7 
Reimbursable revenues
26.0 74.1 — 25.8 — 125.9 
Total operating revenues
994.7 688.7 431.4 148.2 (431.4)1,831.6 
Operating expenses:
Contract drilling expenses (exclusive of depreciation and reimbursable expenses)
568.0 365.8 273.6 49.7 (160.3)1,096.8 
Reimbursable expenses
24.4 69.6 — 25.5 — 119.5 
Total contract drilling expenses (exclusive of depreciation)
592.4 435.4 273.6 75.2 (160.3)1,216.3 
Depreciation44.3 42.6 86.6 8.6 (76.4)105.7 
General and administrative— — 18.4 — 51.7 70.1 
Other operating loss
7.8 — — — — 7.8 
Total operating expenses644.5 478.0 378.6 83.8 (185.0)1,399.9 
Equity in earnings of ARO— — — — 5.9 5.9 
Operating income$350.2 $210.7 $52.8 $64.4 $(240.5)$437.6 
Property and equipment, net$1,201.3 $628.9 $1,199.7 $145.4 $(1,140.9)$2,034.4 
Capital expenditures
$89.8 $138.9 $33.0 $— $(24.5)$237.2 

Information about Geographic Areas

As of September 30, 2026, the geographic distribution of our and ARO's drilling rigs was as follows:
FloatersJackupsOther
Total Valaris (1)
ARO
Middle East & Africa5 5 7 17 9 
Europe
3 10 — 13 — 
North & South America
5 3 — 8 — 
Asia & Pacific Rim— 3 — 3 — 
Total13 21 7 41 9 
(1)In September 2026, we sold VALARIS 111 for recycling and transferred possession of the rig to the buyer. Accordingly, the rig is excluded from the fleet table above as of September 30, 2026. However, due to a termination right stipulated within the sale agreement, the rig remained on our balance sheet and was classified as held for sale as of September 30, 2026. See "Note 5 - Property and Equipment" for additional information regarding the sale of VALARIS 111.
We provide management services in the Gulf of America on two rigs owned by a third party not included in the table above.
ARO has ordered four newbuild jackups (two which are under construction in the Middle East and two which were ordered in August 2026) that are not included in the table above.