Valaris LtdVAL
Valaris Ltd Segments Disclosure
SEGMENT INFORMATION
Our business consists of four operating segments, which have been determined based on the asset type and specifications and services we provide. These operating segments are Floaters, Jackups, ARO and Other. The Floaters segment consists of our drillships and semisubmersible rigs, which can generally drill in water depths up to 12,000 feet and 8,000 feet, respectively. Floaters are generally considered to be more advanced, typically earn higher day rates and require a larger crew complement to operate. The Jackups segment consists of our jackup rigs, which generally operate in water depths of 400 feet or less. As Jackups have a simpler design and operate in shallow waters, they typically earn lower day rates and require a smaller crew to operate. The ARO segment consists of the full operations of ARO, which operates jackup drilling rigs in Saudi Arabia for Saudi Aramco. The Other segment consists of management services on rigs owned by third parties and the activities associated with our arrangements with ARO under the Lease Agreements.
Each of the reporting segments earn revenues through drilling contracts, in which we provide a drilling rig and/or drilling services, inclusive of rig crews, on a day rate basis. Floaters, Jackups and ARO are also reportable segments.
Our chief operating decision maker (“CODM”) is the executive management committee, which is comprised of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Commercial Officer, General Counsel & Secretary, Chief Human Resources Officer, Vice President – Strategy and Sustainability and Vice President – Operational Integrity. The 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 and Depreciation expense 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 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.
Segment information for the years ended December 31, 2025, 2024 and 2023 are presented below (in millions).
Year Ended December 31, 2025
| Floaters | Jackups | ARO | Other | Reconciling Items | Consolidated Total | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||
Revenues (exclusive of reimbursable revenues) | $ | 1,224.1 | $ | 823.4 | $ | 571.0 | $ | 160.4 | $ | (571.0) | $ | 2,207.9 | |||||||||||||||||||||||
| Reimbursable revenues | 36.5 | 89.4 | — | 35.2 | — | 161.1 | |||||||||||||||||||||||||||||
Total operating revenues | 1,260.6 | 912.8 | 571.0 | 195.6 | (571.0) | 2,369.0 | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Contract drilling expenses (exclusive of depreciation and reimbursable expenses) | 765.6 | 486.5 | 360.7 | 70.6 | (206.3) | 1,477.1 | |||||||||||||||||||||||||||||
Reimbursable expenses | 34.3 | 83.5 | — | 34.8 | — | 152.6 | |||||||||||||||||||||||||||||
Total contract drilling expenses (exclusive of depreciation) | 799.9 | 570.0 | 360.7 | 105.4 | (206.3) | 1,629.7 | |||||||||||||||||||||||||||||
Loss on impairment | 23.6 | 3.7 | — | — | — | 27.3 | |||||||||||||||||||||||||||||
Depreciation | 60.5 | 58.6 | 114.9 | 13.2 | (100.9) | 146.3 | |||||||||||||||||||||||||||||
General and administrative | — | — | 28.8 | — | 68.3 | 97.1 | |||||||||||||||||||||||||||||
| Equity in earnings of ARO | — | — | — | — | 8.4 | 8.4 | |||||||||||||||||||||||||||||
| Operating income | $ | 376.6 | $ | 280.5 | $ | 66.6 | $ | 77.0 | $ | (323.7) | $ | 477.0 | |||||||||||||||||||||||
| Property and equipment, net | $ | 1,225.0 | $ | 630.8 | $ | 1,236.7 | $ | 174.2 | $ | (1,177.9) | $ | 2,088.8 | |||||||||||||||||||||||
| Capital expenditures | $ | 144.7 | $ | 192.0 | $ | 95.6 | $ | — | $ | (88.8) | $ | 343.5 | |||||||||||||||||||||||
Year Ended December 31, 2024
| Floaters | Jackups | ARO | Other | Reconciling Items | Consolidated Total | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||
Revenues (exclusive of reimbursable revenues) | $ | 1,382.8 | $ | 686.5 | $ | 512.5 | $ | 142.6 | $ | (512.5) | $ | 2,211.9 | |||||||||||||||||||||||
| Reimbursable revenues | 57.9 | 68.4 | — | 24.4 | — | 150.7 | |||||||||||||||||||||||||||||
Total operating revenues | 1,440.7 | 754.9 | 512.5 | 167.0 | (512.5) | 2,362.6 | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
| Contract drilling expenses (exclusive of depreciation and reimbursable expenses) | 930.3 | 477.1 | 367.7 | 63.6 | (220.2) | 1,618.5 | |||||||||||||||||||||||||||||
| Reimbursable expenses | 54.9 | 64.3 | — | 23.2 | — | 142.4 | |||||||||||||||||||||||||||||
Total contract drilling expenses (exclusive of depreciation) | 985.2 | 541.4 | 367.7 | 86.8 | (220.2) | 1,760.9 | |||||||||||||||||||||||||||||
| Loss on impairment | — | — | 28.4 | — | (28.4) | — | |||||||||||||||||||||||||||||
| Depreciation | 58.1 | 45.0 | 89.2 | 9.5 | (79.7) | 122.1 | |||||||||||||||||||||||||||||
| General and administrative | — | — | 23.7 | — | 92.6 | 116.3 | |||||||||||||||||||||||||||||
| Equity in losses of ARO | — | — | — | — | (11.0) | (11.0) | |||||||||||||||||||||||||||||
| Operating income | $ | 397.4 | $ | 168.5 | $ | 3.5 | $ | 70.7 | $ | (287.8) | $ | 352.3 | |||||||||||||||||||||||
| Property and equipment, net | $ | 1,174.2 | $ | 575.3 | $ | 1,253.1 | $ | 132.8 | $ | (1,202.5) | $ | 1,932.9 | |||||||||||||||||||||||
| Capital expenditures | $ | 239.7 | $ | 213.1 | $ | 285.0 | $ | — | $ | (282.7) | $ | 455.1 | |||||||||||||||||||||||
Year Ended December 31, 2023
| Floaters | Jackups | ARO | Other | Reconciling Items | Consolidated Total | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||||||
Revenues (exclusive of reimbursable revenues) | $ | 902.8 | $ | 620.6 | $ | 496.6 | $ | 152.6 | $ | (496.6) | $ | 1,676.0 | |||||||||||||||||||||||
| Reimbursable revenues | 45.9 | 39.0 | — | 23.3 | — | 108.2 | |||||||||||||||||||||||||||||
Total operating revenues | 948.7 | 659.6 | 496.6 | 175.9 | (496.6) | 1,784.2 | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
| Contract drilling expenses (exclusive of depreciation and reimbursable expenses) | 768.4 | 480.4 | 365.9 | 52.6 | (226.9) | 1,440.4 | |||||||||||||||||||||||||||||
| Reimbursable expenses | 43.6 | 37.0 | — | 22.6 | — | 103.2 | |||||||||||||||||||||||||||||
Total contract drilling expenses (exclusive of depreciation) | 812.0 | 517.4 | 365.9 | 75.2 | (226.9) | 1,543.6 | |||||||||||||||||||||||||||||
| Depreciation | 55.8 | 40.0 | 65.9 | 5.0 | (65.6) | 101.1 | |||||||||||||||||||||||||||||
| General and administrative | — | — | 22.2 | — | 77.1 | 99.3 | |||||||||||||||||||||||||||||
| Equity in earnings of ARO | — | — | — | — | 13.3 | 13.3 | |||||||||||||||||||||||||||||
| Operating income | $ | 80.9 | $ | 102.2 | $ | 42.6 | $ | 95.7 | $ | (267.9) | $ | 53.5 | |||||||||||||||||||||||
| Property and equipment, net | $ | 1,035.5 | $ | 480.8 | $ | 1,036.6 | $ | 52.1 | $ | (971.2) | $ | 1,633.8 | |||||||||||||||||||||||
| Capital expenditures | $ | 562.0 | $ | 132.3 | $ | 300.8 | $ | — | $ | (299.0) | $ | 696.1 | |||||||||||||||||||||||
Information about Geographic Areas
As of December 31, 2025, our Floaters segment consisted of 13 drillships and two semisubmersible rigs. Our Jackups segment consisted of 24 jackup rigs which were deployed in various locations and our Other segment consisted of seven jackup rigs which are leased to our 50/50 unconsolidated joint venture with Saudi Aramco.
As of December 31, 2025, the geographic distribution of our and ARO's drilling rigs was as follows:
| Floaters | Jackups | Other | Total Valaris | ARO | |||||||||||||||||||||||||
Europe | 6 | 11 | — | 17 | — | ||||||||||||||||||||||||
| Middle East & Africa | 2 | 7 | 7 | 16 | 9 | ||||||||||||||||||||||||
| North & South America | 5 | 3 | — | 8 | — | ||||||||||||||||||||||||
| Asia & Pacific Rim | 1 | 3 | — | 4 | — | ||||||||||||||||||||||||
Held for sale (1) | 1 | — | — | 1 | — | ||||||||||||||||||||||||
| Total | 15 | 24 | 7 | 46 | 9 | ||||||||||||||||||||||||
(1)VALARIS DPS-1 was classified as held for sale and warm stacked in Asia Pacific as of December 31, 2025. See "Note 5 - Property and Equipment" for more information regarding VALARIS DPS-1.
We provide management services in the U.S. Gulf of America on two rigs owned by a third party not included in the table above.
ARO ordered two newbuild jackup rigs Kingdom 3 and Kingdom 4, which are under construction in the Middle East and are not included in table above.
Information by country for those countries that account for more than 10% of our long-lived assets was as follows (in millions):
| Long-lived Assets | |||||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Spain (1) | $ | 627.4 | $ | 484.8 | |||||||
| Brazil | 352.2 | 413.9 | |||||||||
| United States | 268.7 | 314.3 | |||||||||
| United Kingdom | 262.1 | 290.4 | |||||||||
Angola | 234.6 | 132.6 | |||||||||
Other countries (2) | 419.5 | 381.4 | |||||||||
| Total | $ | 2,164.5 | $ | 2,017.4 | |||||||
(1)Long-lived assets located in Spain primarily consist of rigs which were idle or preservation stacked.
(2)Other countries includes countries where individually we had long-lived assets representing less than 10% of total long-lived assets.
For purposes of our geographic disclosures above, we attribute assets to the geographic location of the drilling rig or operating lease, in the case of our right-of-use assets, as of the end of the applicable year.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 25, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.