Valaris Limited — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total operating revenues were $594 million, up 10% from $539.2 million in the second quarter 2026.
• Net income was $47 million, essentially flat compared to $47.0 million in the second quarter 2026.
• Adjusted EBITDA was $151 million, a 56% increase from $96.5 million in the second quarter 2026.
• Revenues exclusive of reimbursable items increased to $556 million from $502 million in the second quarter 2026.
• Contract drilling expenses exclusive of reimbursable items were $380 million, in line with the second quarter 2026.
• General and administrative expenses decreased to $26 million from $27 million in the second quarter 2026.
• Merger and integration expenses increased to $16 million from $11 million in the second quarter 2026.
• Other income decreased to $20 million from $30 million in the second quarter 2026.
• Tax expense increased to $55 million from $34 million in the second quarter 2026, including a $23 million non-cash discrete tax expense related to rig sales.
• Capital expenditures increased to $122 million from $106 million in the second quarter 2026.
• Cash and cash equivalents decreased to $525 million as of September 30, 2026, from $541 million as of June 30, 2026.
• Revenue efficiency was 97% during the quarter and 98% year-to-date.

Guidance and Future Outlook:

• Management stated the outlook for the business is increasingly positive, citing a robust pipeline of deepwater opportunities and day rates moving higher.
• The pending business combination with Transocean received required regulatory approvals and is anticipated to close on or about December 1, 2026.
• Valaris does not intend to hold future earnings conference calls or provide updates to forward-looking guidance due to the pending transaction.

Business Segments and Product Lines:

• Floaters: Revenues exclusive of reimbursable items increased to $346 million from $279 million in the second quarter 2026, driven by new contracts for VALARIS DS-10, DS-12, and DS-15.
• Jackups: Revenues exclusive of reimbursable items decreased to $171 million from $183 million in the second quarter 2026, primarily due to fewer operating days for VALARIS 249 in the shipyard.
• ARO Drilling: Revenues increased to $145 million from $127 million in the second quarter 2026, driven by more operating days for VALARIS 250 and 116.
• Other: Revenues exclusive of reimbursable items decreased to $38 million from $40 million in the second quarter 2026.
• Successful contract startup of drillship VALARIS DS-15 occurred during the quarter, with VALARIS DS-18 commencing subsequent to quarter end.
• Jackups VALARIS 250 and 116 recommenced long-term bareboat charters with ARO following major shipyard projects.
• The fleet was high-graded through the sale of semisubmersible VALARIS MS-1 for recycling and the sale of stacked jackup VALARIS 111 for conversion to a mobile offshore production unit.

Market and Competitive Landscape:

• All ten active drillships are now on contract.
• Four drillships were returned to work in 2026 following significant idle periods.
• Contract backlog increased by approximately $600 million since the second quarter results, reaching approximately $4.8 billion.
• Day rates are moving higher driven by favorable market fundamentals and strong customer demand for high-specification drillships.

Risks and Challenges:

• Ongoing conflicts in the Middle East negatively impacted Adjusted EBITDA by approximately $24 million in the third quarter, compared to $30 million in the second quarter.
• Adverse impacts from Middle East conflicts began to moderate due to lower war-risk insurance costs following the negotiation of longer-term policies at lower rates.
• VALARIS 250 and 116 recommenced contracts in July and September, respectively, following completion of planned maintenance and contract preparation projects in the region.

Management Commentary and Tone:

• President and CEO Anton Dibowitz expressed confidence in the positive business outlook and the value creation expected from the pending Transocean transaction.
• Management highlighted strong execution resulting in 97% revenue efficiency in the quarter and 98% year-to-date.
• The company received the Center for Offshore Safety's 2026 Safety Leadership Award, marking the fourth consecutive year of this recognition.

Other Key Points:

• The pending business combination with Transocean Ltd. is expected to close on or about December 1, 2026.
• The company received the Center for Offshore Safety's 2026 Safety Leadership Award.
• Contract backlog stands at approximately $4.8 billion as of the reporting period.
• The company does not intend to hold future earnings conference calls or provide updates to forward-looking guidance.