Business Wire | Aug 3, 2021 01:09AM EDT

Valaris Reports Second Quarter 2021 Results

Aug. 03, 2021

HAMILTON, Bermuda--(BUSINESS WIRE)--Aug. 03, 2021--Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported second quarter 2021 results.

President and Chief Executive Officer Tom Burke said, "On April 30, 2021, Valaris emerged from chapter 11 with a significantly strengthened capital structure, including a net cash position, $550 million of debt due in 2028 and an industry-leading cost structure that is scalable and adaptable to changing market conditions."

Burke added, "During the three months since emergence, our customers awarded Valaris more than 20 new contracts or extensions with associated contract backlog totaling over $1.3 billion. This figure includes an eight-well contract, with an estimated duration of three-and-a-half years, for VALARIS DS-11, a two-year contract for VALARIS DS-16 and a 420-day contract for VALARIS DPS-1, which we announced in today's fleet status report, as well as a three-year contract for VALARIS DS-18 awarded in early June. These contract awards are a testament to the technical capabilities of our fleet and the excellent operational and safety performance of our crews, and I want to take the opportunity to recognize all the teams in Valaris that have contributed to this outstanding contracting success over the past several months."

Burke concluded, "We are beginning to see early signs of a recovery in customer demand following the downturn caused by the COVID-19 pandemic, evidenced by our contracting activity over the past few months. As a result, Valaris is well-positioned to benefit from the opportunities we see in the market today. We will continue to focus on winning work for our active fleet and returning some of our high-quality stacked rigs to work as suitable opportunities arise. I am extremely proud of what Valaris has achieved during the three months since our emergence from chapter 11, and I am excited to see what the future holds for the Company."

Fresh Start Accounting

Valaris emerged from Chapter 11 bankruptcy protection on April 30, 2021 (the "Effective Date"). Upon emergence, Valaris applied fresh start accounting which resulted in Valaris becoming a new reporting entity for accounting and financial reporting. Accordingly, our financial statements and notes after the Effective Date are not comparable to our financial statements and notes prior to that date. As required by GAAP, results for the quarter must be presented separately for the predecessor period from April 1, 2021, through April 30, 2021 (the "Predecessor" period) and the successor period from May 1, 2021, through June 30, 2021 (the "Successor" period). However, the Company has combined certain results of the Predecessor and Successor periods ("Combined" results) as non-GAAP measures to compare to prior periods since we believe it provides the most meaningful basis to analyze our results.

Second Quarter Highlights

Revenues were $203 million and $90 million for the Successor and Predecessor periods, respectively. Combined revenues declined to $293 million in the second quarter 2021 from $307 million in the first quarter. Excluding reimbursable items, Combined revenues declined to $261 million in the second quarter from $277 million in the prior quarter primarily due to lower revenues from the floater fleet as two drillships working in the first quarter were between contracts for most of the second quarter.

Contract drilling expense was $169 million and $86 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense increased to $254 million in the second quarter 2021 from $252 million in the first quarter. Excluding reimbursable items, Combined contract drilling expense declined to $236 million in the second quarter from $237 million in the prior quarter primarily due to fewer operating days for the floater fleet. This was partially offset by additional operating days for the jackup fleet and higher rig reactivation costs as previously stacked rigs, primarily VALARIS JU-249 and VALARIS JU-121, underwent preparations for long-term contracts.

General and administrative expense was $13 million and $6 million for the Successor and Predecessor periods, respectively. Combined general and administrative expense declined to $19 million in the second quarter 2021 from $24 million in the prior quarter primarily due to lower personnel costs.

Tax expense was $15 million and tax benefit was $16 million for the Successor and Predecessor periods, respectively. Combined tax benefit was less than $1 million in the second quarter 2021 compared to tax expense of $32 million in the prior quarter. The Combined second quarter tax provision included $12 million of discrete tax benefit primarily related to fresh start accounting adjustments. The prior quarter tax provision included $20 million of discrete tax expense related to uncertain tax positions taken for prior years. Adjusted for discrete items, Combined tax expense of $12 million in the second quarter was in line with the prior quarter.

Combined adjusted EBITDA of $17 million in the second quarter 2021 compared to $28 million in the prior quarter. Combined adjusted EBITDAR of $41 million in the second quarter 2021 compared to $39 million in the prior quarter. Combined adjusted EBITDARPS of $58 million in the second quarter 2021 compared to $57 million in the prior quarter.

Segment Highlights

Floaters

Floater revenues were $50 million and $18 million for the Successor and Predecessor periods, respectively. Combined floater revenues declined to $68 million in the second quarter 2021 from $97 million in the prior quarter. Excluding reimbursable items, Combined revenues declined to $62 million in the second quarter from $88 million in the prior quarter primarily due to fewer operating days as two drillships that were working in the first quarter were between contracts for most of the second quarter.

Contract drilling expense was $45 million and $22 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense declined to $67 million in the second quarter 2021 from $84 million in the prior quarter. Excluding reimbursable items, Combined contract drilling expense declined to $63 million in the second quarter from $81 million in the prior quarter primarily due to fewer operating days in the second quarter.

Jackups

Jackup revenues were $129 million and $60 million for the Successor and Predecessor periods, respectively. Combined jackup revenues increased to $188 million in the second quarter 2021 from $173 million in the prior quarter. Excluding reimbursable items, Combined revenues increased to $167 million in the second quarter from $157 million in the prior quarter. The sequential quarter increase was primarily due to an increase in average day rates, which were $99,000 in the second quarter compared to $95,000 in the prior quarter and a four percentage point increase in utilization to 54%.

Contract drilling expense was $96 million and $49 million for the Successor and Predecessor periods, respectively. Combined contract drilling expense increased to $144 million in the second quarter 2021 from $121 million in the prior quarter. Excluding reimbursable items, Combined contract drilling expense increased to $134 million in the second quarter from $114 million in the prior quarter primarily due to $19 million higher reactivation costs in the second quarter as we prepare rigs, primarily VALARIS JU-249 and VALARIS JU-121, for long-term contracts starting later in the year.

ARO Drilling

Revenues were $84 million and $41 million for the Successor and Predecessor periods, respectively. Combined revenues increased to $125 million in the second quarter 2021 from $123 million in the prior quarter. Combined contract drilling expense increased to $93 million in the second quarter from $86 million in the prior quarter primarily due to higher personnel costs. Combined EBITDA was $28 million in the second quarter compared to $33 million in the prior quarter.

Other

Revenues were $25 million and $12 million for the Successor and Predecessor periods, respectively. Combined revenues of $37 million in the second quarter 2021 were in line with the prior quarter and Combined contract drilling expense declined to $14 million in the second quarter from $15 million in the prior quarter.

Second Quarter



(in millions Floaters Jackups ARO Other Reconciling Items Consolidated Totalof $,

Successor Predecessor Combined Successor Predecessor Combined Successor Predecessor Combined Successor Predecessor Combined Successor Predecessor Combined Successor Predecessor Combined (Non-GAAP) (Non-GAAP) (Non-GAAP) (Non-GAAP) (Non-GAAP) (Non-GAAP)

Two Three Two Three Two Three Two Three Two Three Two Three Months One Month Months Months One Month Months Months One Month Months Months One Month Months Months One Month Months Months One Month Monthsexcept %) Ended Ended April Ended June Ended Ended April Ended June Ended Ended April Ended June Ended Ended April Ended June Ended Ended April Ended June Ended Ended April Ended June June 30, 30, 2021 30, 2021 June 30, 30, 2021 30, 2021 June 30, 30, 2021 30, 2021 June 30, 30, 2021 30, 2021 June 30, 30, 2021 30, 2021 June 30, 30, 2021 30, 2021 2021 2021 2021 2021 2021 2021



Revenues 49.7 18.4 68.1 128.5 59.8 188.3 84.0 40.8 124.8 24.6 12.1 36.7 (84.0) (40.8) (124.8) 202.8 90.3 293.1

Operating expenses

Contract 45.2 21.7 66.9 95.5 48.8 144.3 62.9 29.8 92.7 9.2 4.7 13.9 (44.1) (19.4) (63.5) 168.7 85.6 254.3 drilling

Depreciation 7.9 15.9 23.8 7.8 17.3 25.1 9.7 4.9 14.6 0.8 3.5 4.3 (9.6) (4.1) (13.7) 16.6 37.5 54.1

General and - - - - - - 3.1 1.2 4.3 - - - 9.6 5.2 14.8 12.7 6.4 19.1 admin.

Equity in earnings of - - - - - - - - - - - - 4.8 1.2 6.0 4.8 1.2 6.0 ARO

Operating (3.4) (19.2) (22.6) 25.2 (6.3) 18.9 8.3 4.9 13.2 14.6 3.9 18.5 (35.1) (21.3) (56.4) 9.6 (38.0) (28.4) income (loss)

Second Quarter

(in millions of $,

Floaters

Jackups

ARO

Other

Reconciling Items

Consolidated Total

except %)

Combined Q2 2021

Q1 2021

Chg

Combined Q2 2021

Q1 2021

Chg

Combined Q2 2021

Q1 2021

Chg

Combined Q2 2021

Q1 2021

Chg

Combined Q2 2021

Q1 2021

Combined Q2 2021

Q1 2021

Chg

Revenues

68.1

97.3

(30)%

188.3

172.6

9%

124.8

122.7

2%

36.7

37.2

(1)%

(124.8)

(122.7)

293.1

307.1

(5)%

Operating expenses

Contract drilling

66.9

84.3

(21)%

144.3

120.5

20%

92.7

86.3

7%

13.9

15.1

(8)%

(63.5)

(54.0)

254.3

252.2

1%

Impairment

-

756.5

nm

-

-

-

-

-

-%

-

-

-%

-

-

-

756.5

nm

Depreciation

23.8

56.2

(58)%

25.1

52.4

(52)%

14.6

16.1

(9)%

4.3

11.3

(62)%

(13.7)

(13.9)

54.1

122.1

(56)%

General and admin.

-

-

-%

-

-

-%

4.3

3.0

43%

-

-

-%

14.8

21.3

19.1

24.3

(21)%

Equity in earnings of ARO

-

-

-%

-

-

-%

-

-

-%

-

-

-%

6.0

1.9

6.0

1.9

nm

Operating income (loss)

(22.6)

(799.7)

nm

18.9

(0.3)

(6400)%

13.2

17.3

(24)%

18.5

10.8

nm

(56.4)

(74.2)

(28.4)

(846.1)

nm

About Valaris Limited

Valaris Limited (NYSE: VAL) is the 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. To learn more, visit the Valaris website at www.valaris.com.

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," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements involving expected financial performance; expected utilization, rig commitments and availability, day rates, revenues, operating expenses including expenses related to reorganization items, cash flow, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effects of declines in commodity prices; synergies and expected additional cost savings; effective tax rates; expected work commitments, letters of intent; scheduled delivery dates for rigs; performance of our joint venture with Saudi Aramco; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell or scrap rigs; and general market, business and industry conditions, trends and outlook. 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 the effects of the chapter 11 cases on the Company's business, relationships, comparability of our financial results and ability to access financing sources, the COVID-19 outbreak and global pandemic, the related public health measures implemented by governments worldwide, which may, among other things, impact our ability to staff rigs and rotate crews; cancellation, suspension, renegotiation or termination of drilling contracts and programs, including drilling contracts which grant the customer termination rights if final investment decision (FID) is not received with respect to projects for which the drilling rig is contracted; potential additional asset impairments; our failure to satisfy our debt obligations; our ability to obtain financing, service our debt, fund negative cash flow and capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; actions by regulatory authorities, rating agencies or other third parties; actions by our security holders; availability and terms of any financing; commodity price fluctuations, customer demand, new rig supply, downtime and other risks associated with offshore rig operations; severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig construction, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling 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; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; and cybersecurity risks and threats. In particular, the unprecedented nature of the current economic downturn, pandemic, and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company's business and financial condition. 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, as updated in our subsequent quarterly reports on Form 10-Q, which are available on the SEC'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.

Second Quarter



(in millions Floaters Jackups ARO Other Reconciling Items Consolidated Totalof $,

except %) Combined Q1 Chg Combined Q1 Chg Combined Q1 Chg Combined Q1 Chg Combined Q1 Combined Q1 Chg Q2 2021 2021 Q2 2021 2021 Q2 2021 2021 Q2 2021 2021 Q2 2021 2021 Q2 2021 2021



Revenues 68.1 97.3 (30) 188.3 172.6 9% 124.8 122.7 2% 36.7 37.2 (1)% (124.8) (122.7) 293.1 307.1 (5)% %

Operating expenses

Contract 66.9 84.3 (21) 144.3 120.5 20% 92.7 86.3 7% 13.9 15.1 (8)% (63.5) (54.0) 254.3 252.2 1% drilling %

Impairment - 756.5 nm - - - - - -% - - -% - - - 756.5 nm

Depreciation 23.8 56.2 (58) 25.1 52.4 (52)% 14.6 16.1 (9)% 4.3 11.3 (62) (13.7) (13.9) 54.1 122.1 (56) % % %

General and - - -% - - -% 4.3 3.0 43% - - -% 14.8 21.3 19.1 24.3 (21) admin. %

Equity in earnings of - - -% - - -% - - -% - - -% 6.0 1.9 6.0 1.9 nm ARO

Operating (22.6) (799.7) nm 18.9 (0.3) (6400) 13.2 17.3 (24) 18.5 10.8 nm (56.4) (74.2) (28.4) (846.1) nmincome (loss) % %

About Valaris Limited

Valaris Limited (NYSE: VAL) is the 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. To learn more, visit the Valaris website at www.valaris.com.

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," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements involving expected financial performance; expected utilization, rig commitments and availability, day rates, revenues, operating expenses including expenses related to reorganization items, cash flow, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs, stacking of rigs, effects of new rigs on the market and effects of declines in commodity prices; synergies and expected additional cost savings; effective tax rates; expected work commitments, letters of intent; scheduled delivery dates for rigs; performance of our joint venture with Saudi Aramco; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell or scrap rigs; and general market, business and industry conditions, trends and outlook. 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 the effects of the chapter 11 cases on the Company's business, relationships, comparability of our financial results and ability to access financing sources, the COVID-19 outbreak and global pandemic, the related public health measures implemented by governments worldwide, which may, among other things, impact our ability to staff rigs and rotate crews; cancellation, suspension, renegotiation or termination of drilling contracts and programs, including drilling contracts which grant the customer termination rights if final investment decision (FID) is not received with respect to projects for which the drilling rig is contracted; potential additional asset impairments; our failure to satisfy our debt obligations; our ability to obtain financing, service our debt, fund negative cash flow and capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; actions by regulatory authorities, rating agencies or other third parties; actions by our security holders; availability and terms of any financing; commodity price fluctuations, customer demand, new rig supply, downtime and other risks associated with offshore rig operations; severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig construction, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling 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; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; and cybersecurity risks and threats. In particular, the unprecedented nature of the current economic downturn, pandemic, and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company's business and financial condition. 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, as updated in our subsequent quarterly reports on Form 10-Q, which are available on the SEC'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.

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

Three Months Ended March 31, 2021

OPERATING REVENUES

$

202.8

$

90.3

$

293.1

$

307.1

OPERATING EXPENSES

Contract drilling (exclusive of depreciation)

168.7

85.6

254.3

252.2

Loss on impairment

-

-

-

756.5

Depreciation

16.6

37.5

54.1

122.1

General and administrative

12.7

6.4

19.1

24.3

Total operating expenses

198.0

129.5

327.5

1,155.1

EQUITY IN EARNINGS OF ARO

4.8

1.2

6.0

1.9

OPERATING INCOME (LOSS)

9.6

(38.0)

(28.4)

(846.1)

OTHER INCOME (EXPENSE)

Interest income

7.8

1.0

8.8

2.6

Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million for the one months April 30, 2021 and $100.3 million for the three months ended March 31, 2021)

(8.0)

(1.1)

(9.1)

(1.3)

Reorganization items, net

(4.1)

(3,532.4)

(3,536.5)

(52.2)

Other, net

5.7

(1.2)

4.5

21.1

1.4

(3,533.7)

(3,532.3)

(29.8)

INCOME (LOSS) BEFORE INCOME TAXES

11.0

(3,571.7)

(3,560.7)

(875.9)

PROVISION (BENEFIT) FOR INCOME TAXES

15.1

(15.5)

(0.4)

31.7

NET LOSS

(4.1)

(3,556.2)

(3,560.3)

(907.6)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

(2.1)

(0.8)

(2.9)

(2.4)

NET LOSS ATTRIBUTABLE TO VALARIS

$

(6.2)

$

(3,557.0)

$

(3,563.2)

$

(910.0)

LOSS PER SHARE - BASIC AND DILUTED

$

(0.08)

$

(17.81)

n/m

$

(4.56)

WEIGHTED-AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

75.0

199.7

n/m

199.6

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Months One Month Three Three Ended June Ended April Months Months 30, 2021 30, 2021 Ended June Ended March 30, 2021 31, 2021

OPERATING REVENUES $ 202.8 $ 90.3 $ 293.1 $ 307.1



OPERATING EXPENSES

Contract drilling(exclusive of 168.7 85.6 254.3 252.2 depreciation)

Loss on impairment - - - 756.5

Depreciation 16.6 37.5 54.1 122.1

General and 12.7 6.4 19.1 24.3 administrative

Total operating 198.0 129.5 327.5 1,155.1 expenses

EQUITY IN EARNINGS OF 4.8 1.2 6.0 1.9 ARO

OPERATING INCOME 9.6 (38.0) (28.4) (846.1) (LOSS)



OTHER INCOME (EXPENSE)

Interest income 7.8 1.0 8.8 2.6

Interest expense, net(Unrecognizedcontractual interestexpense for debtsubject tocompromise was $32.6 (8.0) (1.1) (9.1) (1.3) million for the onemonths April 30, 2021and $100.3 millionforthe three monthsended March 31, 2021)

Reorganization items, (4.1) (3,532.4) (3,536.5) (52.2) net

Other, net 5.7 (1.2) 4.5 21.1

1.4 (3,533.7) (3,532.3) (29.8)



INCOME (LOSS) BEFORE 11.0 (3,571.7) (3,560.7) (875.9) INCOME TAXES



PROVISION (BENEFIT) 15.1 (15.5) (0.4) 31.7 FOR INCOME TAXES



NET LOSS (4.1) (3,556.2) (3,560.3) (907.6)



NET INCOMEATTRIBUTABLE TO (2.1) (0.8) (2.9) (2.4) NONCONTROLLINGINTERESTS



NET LOSS ATTRIBUTABLE $ (6.2) $ (3,557.0) $ (3,563.2) $ (910.0) TO VALARIS



LOSS PER SHARE - $ (0.08) $ (17.81) n/m $ (4.56) BASIC AND DILUTED

WEIGHTED-AVERAGESHARES OUTSTANDING - 75.0 199.7 n/m 199.6 BASIC AND DILUTED

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

Three Months Ended

Combined (Non-GAAP) (1)

Predecessor

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

OPERATING REVENUES

$

293.1

$

307.1

$

296.5

$

285.3

$

388.8

OPERATING EXPENSES

Contract drilling (exclusive of depreciation)

254.3

252.2

304.7

307.2

370.7

Loss on impairment

-

756.5

-

-

838.0

Depreciation

54.1

122.1

122.4

122.4

131.5

General and administrative

19.1

24.3

26.5

72.1

62.6

Total operating expenses

327.5

1,155.1

453.6

501.7

1,402.8

Other operating income

-

-

-

118.1

-

EQUITY IN EARNINGS (LOSSES) OF ARO

6.0

1.9

(0.2)

3.9

(5.2)

OPERATING LOSS

(28.4)

(846.1)

(157.3)

(94.4)

(1,019.2)

OTHER EXPENSE

-

Interest income

8.8

2.6

4.5

4.7

5.7

Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million, $100.3 million, $94.8 million, $45.9 million for the three months June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively)

(9.1)

(1.3)

(1.4)

(59.8)

(116.2)

Reorganization items, net

(3,536.5)

(52.2)

(30.1)

(497.5)

-

Other, net

4.5

21.1

1.7

(3.1)

5.1

(3,532.3)

(29.8)

(25.3)

(555.7)

(105.4)

LOSS BEFORE INCOME TAXES

(3,560.7)

(875.9)

(182.6)

(650.1)

(1,124.6)

PROVISION (BENEFIT) FOR INCOME TAXES

(0.4)

31.7

(113.5)

21.9

(15.8)

NET LOSS

(3,560.3)

(907.6)

(69.1)

(672.0)

(1,108.8)

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

(2.9)

(2.4)

(1.8)

1.1

1.4

NET LOSS ATTRIBUTABLE TO VALARIS

$

(3,563.2)

$

(910.0)

$

(70.9)

$

(670.9)

$

(1,107.4)

LOSS PER SHARE - BASIC AND DILUTED

n/m

$

(4.56)

$

(0.36)

$

(3.36)

$

(5.58)

WEIGHTED-AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

n/m

199.6

199.5

199.4

198.6

Three Months Ended

Combined (Non-GAAP) ^ Predecessor (1)

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020



OPERATING $ 293.1 $ 307.1 $ 296.5 $ 285.3 $ 388.8 REVENUES



OPERATING EXPENSES

Contract drilling(exclusive of 254.3 252.2 304.7 307.2 370.7 depreciation)

Loss on - 756.5 - - 838.0 impairment

Depreciation 54.1 122.1 122.4 122.4 131.5

General and 19.1 24.3 26.5 72.1 62.6 administrative

Total operating 327.5 1,155.1 453.6 501.7 1,402.8 expenses

Other operating - - - 118.1 - income

EQUITY INEARNINGS (LOSSES) 6.0 1.9 (0.2) 3.9 (5.2) OF ARO

OPERATING LOSS (28.4) (846.1) (157.3) (94.4) (1,019.2)



OTHER EXPENSE -

Interest income 8.8 2.6 4.5 4.7 5.7

Interest expense,net (Unrecognizedcontractualinterest expensefor debt subjectto compromise was$32.6 million,$100.3 million,$94.8 million, (9.1) (1.3) (1.4) (59.8) (116.2) $45.9 million forthe three monthsJune 30, 2021,March 31, 2021,December 31, 2020and September 30,2020,respectively)

Reorganization (3,536.5) (52.2) (30.1) (497.5) - items, net

Other, net 4.5 21.1 1.7 (3.1) 5.1

(3,532.3) (29.8) (25.3) (555.7) (105.4)



LOSS BEFORE (3,560.7) (875.9) (182.6) (650.1) (1,124.6) INCOME TAXES



PROVISION(BENEFIT) FOR (0.4) 31.7 (113.5) 21.9 (15.8) INCOME TAXES



NET LOSS (3,560.3) (907.6) (69.1) (672.0) (1,108.8)



NET (INCOME) LOSSATTRIBUTABLE TO (2.9) (2.4) (1.8) 1.1 1.4 NONCONTROLLINGINTERESTS



NET LOSSATTRIBUTABLE TO $ (3,563.2) $ (910.0) $ (70.9) $ (670.9) $ (1,107.4) VALARIS



LOSS PER SHARE - n/m $ (4.56) $ (0.36) $ (3.36) $ (5.58) BASIC AND DILUTED

WEIGHTED-AVERAGESHARES n/m 199.6 199.5 199.4 198.6 OUTSTANDING - BASIC AND DILUTED

(1)

Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.

(1) Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)



VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

Successor

Predecessor

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

(unaudited)

(unaudited)

(unaudited)

(unaudited)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

608.8

291.7

$

325.8

$

180.4

$

202.0

Restricted cash

53.1

17.1

11.4

1.2

-

Accounts receivable, net

436.1

449.8

449.2

429.7

363.3

Other current assets

119.7

366.4

386.5

453.5

500.8

Total current assets

$

1,217.7

$

1,125.0

$

1,172.9

$

1,064.8

$

1,066.1

PROPERTY AND EQUIPMENT, NET

897.8

10,083.9

10,960.5

11,082.4

11,192.6

LONG-TERM NOTES RECEIVABLE FROM ARO

234.3

442.7

442.7

442.7

452.8

INVESTMENT IN ARO

85.4

122.8

120.9

121.1

117.2

OTHER ASSETS

166.5

172.5

176.2

200.2

210.2

$

2,601.7

$

11,946.9

$

12,873.2

$

12,911.2

$

13,038.9

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable - trade

$

183.9

176.8

$

176.4

$

180.7

$

151.9

Accrued liabilities and other

212.7

290.6

250.4

207.3

398.1

Current maturities of long-term debt

-

-

-

-

2,518.1

Total current liabilities

$

396.6

$

467.4

$

426.8

$

388.0

$

3,068.1

LONG - TERM DEBT

544.8

-

-

-

4,092.2

OTHER LIABILITIES

569.8

704.6

762.4

696.9

693.2

TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE

1,511.2

1,172.0

1,189.2

1,084.9

7,853.5

LIABILITIES SUBJECT TO COMPROMISE

-

7,313.7

7,313.7

7,313.7

-

TOTAL EQUITY

1,090.5

3,461.2

4,370.3

4,512.6

5,185.4

$

2,601.7

$

11,946.9

$

12,873.2

$

12,911.2

$

13,038.9

Successor Predecessor

June 30, March 31, December 31, September June 30, 2021 2021 2020 30, 2020 2020

(unaudited) (unaudited) (unaudited) (unaudited)

ASSETS



CURRENT ASSETS

Cash and cash $ 608.8 291.7 $ 325.8 $ 180.4 $ 202.0 equivalents

Restricted 53.1 17.1 11.4 1.2 - cash

Accountsreceivable, 436.1 449.8 449.2 429.7 363.3 net

Other current 119.7 366.4 386.5 453.5 500.8 assets

Total current $ 1,217.7 $ 1,125.0 $ 1,172.9 $ 1,064.8 $ 1,066.1 assets



PROPERTY ANDEQUIPMENT, 897.8 10,083.9 10,960.5 11,082.4 11,192.6 NET



LONG-TERMNOTES 234.3 442.7 442.7 442.7 452.8 RECEIVABLE FROM ARO



INVESTMENT IN 85.4 122.8 120.9 121.1 117.2 ARO



OTHER ASSETS 166.5 172.5 176.2 200.2 210.2

$ 2,601.7 $ 11,946.9 $ 12,873.2 $ 12,911.2 $ 13,038.9





LIABILITIESAND SHAREHOLDERS' EQUITY



CURRENT LIABILITIES

Accountspayable - $ 183.9 176.8 $ 176.4 $ 180.7 $ 151.9 trade

Accruedliabilities 212.7 290.6 250.4 207.3 398.1 and other

Currentmaturities of - - - - 2,518.1 long-termdebt

Total current $ 396.6 $ 467.4 $ 426.8 $ 388.0 $ 3,068.1 liabilities



LONG - TERM 544.8 - - - 4,092.2 DEBT



OTHER 569.8 704.6 762.4 696.9 693.2 LIABILITIES



TOTALLIABILITIES 1,511.2 1,172.0 1,189.2 1,084.9 7,853.5 NOT SUBJECTTO COMPROMISE



LIABILITIESSUBJECT TO - 7,313.7 7,313.7 7,313.7 - COMPROMISE



TOTAL EQUITY 1,090.5 3,461.2 4,370.3 4,512.6 5,185.4

$ 2,601.7 $ 11,946.9 $ 12,873.2 $ 12,911.2 $ 13,038.9

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Successor

Predecessor

Combined (Non- GAAP)

Predecessor

Two Months Ended June 30, 2021

Four Months Ended April 30, 2021

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

OPERATING ACTIVITIES

Net loss

$

(4.1)

$

(4,463.8)

$

(4,467.9)

$

(4,116.5)

Adjustments to reconcile net loss to net cash used in operating activities:

Reorganization items, net

-

3,487.3

3,487.3

-

Loss on impairment

-

756.5

756.5

3,646.2

Depreciation expense

16.6

159.6

176.2

296.0

Amortization, net

(.3)

(4.8)

(5.1)

12.2

Accretion of discount on shareholder note

(6.0)

-

(6.0)

-

Share-based compensation expense

-

4.8

4.8

13.5

Equity in losses (earnings) of ARO

(4.8)

(3.1)

(7.9)

11.5

Deferred income tax expense (benefit)

1.1

(18.2)

(17.1)

(109.1)

Debt discounts and other

0.4

-

0.4

28.8

Adjustment to gain on bargain purchase

-

-

-

6.3

Other

(2.5)

(4.1)

(6.6)

(2.7)

Changes in operating assets and liabilities

(25.7)

68.5

42.8

(156.7)

Contributions to pension plans and other post-retirement benefits

(0.6)

(22.5)

(23.1)

(10.6)

Net Cash Used in Operating Activities

(25.9)

(39.8)

(65.7)

(381.1)

INVESTING ACTIVITIES

Additions to property and equipment

(8.1)

(8.7)

(16.8)

(67.1)

Proceeds from Sale of Property, Plant, and Equipment

0.2

30.1

30.3

13.8

Net Cash Provided by (Used in) Investing Activities

(7.9)

21.4

13.5

(53.3)

FINANCING ACTIVITIES

Issuance of First Lien Notes

-

520.0

520.0

-

Payments to Predecessor creditors

-

(129.9)

(129.9)

-

Borrowings on credit facility

-

-

-

566.0

Repayments of credit facility borrowings

-

-

-

(15.0)

Reduction of long-term borrowings

-

-

-

(9.7)

Other

-

(1.4)

(1.4)

(1.9)

Net cash provided by financing activities

-

388.7

388.7

539.4

Effect of exchange rate changes on cash and cash equivalents

(0.3)

(0.1)

(0.4)

(0.2)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

(34.1)

370.2

336.1

104.8

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

696.0

325.8

325.8

97.2

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

661.9

$

696.0

$

661.9

$

202.0

Successor Predecessor Combined Predecessor (Non- GAAP)

Two Months Four Months Six Months Six Months Ended Ended April Ended June Ended June June 30, 30, 2021 30, 2021 30, 2020 2021

OPERATING ACTIVITIES

Net loss $ (4.1) $ (4,463.8) $ (4,467.9) $ (4,116.5)

Adjustments toreconcile net lossto net cash used in operatingactivities:

Reorganization - 3,487.3 3,487.3 - items, net

Loss on impairment - 756.5 756.5 3,646.2

Depreciation 16.6 159.6 176.2 296.0 expense

Amortization, net (.3) (4.8) (5.1) 12.2

Accretion ofdiscount on (6.0) - (6.0) - shareholder note

Share-basedcompensation - 4.8 4.8 13.5 expense

Equity in losses (4.8) (3.1) (7.9) 11.5 (earnings) of ARO

Deferred income tax 1.1 (18.2) (17.1) (109.1) expense (benefit)

Debt discounts and 0.4 - 0.4 28.8 other

Adjustment to gain - - - 6.3 on bargain purchase

Other (2.5) (4.1) (6.6) (2.7)

Changes inoperating assets (25.7) 68.5 42.8 (156.7) and liabilities

Contributions topension plans andother (0.6) (22.5) (23.1) (10.6) post-retirementbenefits

Net Cash Used inOperating (25.9) (39.8) (65.7) (381.1) Activities



INVESTING ACTIVITIES

Additions toproperty and (8.1) (8.7) (16.8) (67.1) equipment

Proceeds from Saleof Property, Plant, 0.2 30.1 30.3 13.8 and Equipment

Net Cash Providedby (Used in) (7.9) 21.4 13.5 (53.3) InvestingActivities



FINANCING ACTIVITIES

Issuance of First - 520.0 520.0 - Lien Notes

Payments toPredecessor - (129.9) (129.9) - creditors

Borrowings on - - - 566.0 credit facility

Repayments ofcredit facility - - - (15.0) borrowings

Reduction oflong-term - - - (9.7) borrowings

Other - (1.4) (1.4) (1.9)

Net cash providedby financing - 388.7 388.7 539.4 activities



Effect of exchangerate changes on (0.3) (0.1) (0.4) (0.2) cash and cashequivalents



INCREASE (DECREASE)IN CASH AND CASH (34.1) 370.2 336.1 104.8 EQUIVALENTS ANDRESTRICTED CASH

CASH AND CASHEQUIVALENTS AND 696.0 325.8 325.8 97.2 RESTRICTED CASH,BEGINNING OF PERIOD

CASH AND CASHEQUIVALENTS AND $ 661.9 $ 696.0 $ 661.9 $ 202.0 RESTRICTED CASH,END OF PERIOD

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

VALARIS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Three Months Ended

Combined (Non-GAAP) (1)

Predecessor

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

OPERATING ACTIVITIES

Net loss

$

(3,560.3)

$

(907.6)

$

(69.1)

$

(672.0)

$

(1,108.8)

Adjustments to reconcile net loss to net cash used in operating activities:

Debtor in Possession financing fees and payments on Backstop Agreement

-

-

(3.8)

43.8

-

Loss on impairment

-

756.5

-

-

838.0

Depreciation expense

54.1

122.1

122.4

122.4

131.5

Reorganization items, net

3,487.3

-

(11.5)

447.9

-

Deferred income tax expense (benefit)

(18.0)

0.9

(2.1)

5.5

(29.6)

Debt discounts and other

0.4

-

-

8.0

14.6

Share-based compensation expense

1.0

3.8

3.6

4.3

5.7

Equity in losses (earnings) of ARO

(6.0)

(1.9)

0.2

(3.9)

5.2

Amortization, net

(.5)

(4.6)

(8.2)

2.2

9.4

Accretion of discount on shareholder note

(6.0)

-

-

-

-

Other

(7.0)

0.4

4.5

2.0

(9.3)

Changes in operating assets and liabilities

21.9

20.9

109.8

24.9

(26.8)

Contributions to pension plans and other post-retirement benefits

(0.9)

(22.2)

(1.1)

(0.4)

(6.6)

Net Cash Provided by (Used in) Operating Activities

(34.0)

(31.7)

144.7

(15.3)

(176.7)

INVESTING ACTIVITIES

Additions to property and equipment

(10.8)

(6.0)

(10.9)

(15.8)

(30.8)

Proceeds from Sale of Property, Plant, and Equipment

26.6

3.7

7.6

30.4

3.4

Net Cash Provided by (Used in) Investing Activities

15.8

(2.3)

(3.3)

14.6

(27.4)

FINANCING ACTIVITIES

Issuance of First Lien Notes

520.0

-

-

-

-

Payments to Predecessor creditors

(129.9)

-

-

-

-

Borrowings on credit facility

-

-

-

30.0

222.1

Payments for Debtor-in-possession financing fees and backstop agreement

-

-

3.8

(43.8)

-

Purchase of noncontrolling interests

-

-

-

(7.2)

-

Other

(1.4)

-

-

-

(1.0)

Net cash provided by (used in) financing activities

388.7

-

3.8

(21.0)

221.1

Effect of exchange rate changes on cash and cash equivalents

(0.3)

(0.1)

0.2

0.1

0.1

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

370.2

(34.1)

145.4

(21.6)

17.1

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

291.7

325.8

180.4

202.0

184.9

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

661.9

$

291.7

$

325.8

$

180.4

$

202.0

Three Months Ended

Combined (Non-GAAP)^ Predecessor (1)

June 30, 2021 March 31, December September June 30, 2020 2021 31, 2020 30, 2020

OPERATING ACTIVITIES

Net loss $ (3,560.3) $ (907.6) $ (69.1) $ (672.0) $ (1,108.8)

Adjustments toreconcile net lossto net cash used in operatingactivities:

Debtor in Possessionfinancing fees and - - (3.8) 43.8 - payments on BackstopAgreement

Loss on impairment - 756.5 - - 838.0

Depreciation expense 54.1 122.1 122.4 122.4 131.5

Reorganization 3,487.3 - (11.5) 447.9 - items, net

Deferred income tax (18.0) 0.9 (2.1) 5.5 (29.6) expense (benefit)

Debt discounts and 0.4 - - 8.0 14.6 other

Share-based 1.0 3.8 3.6 4.3 5.7 compensation expense

Equity in losses (6.0) (1.9) 0.2 (3.9) 5.2 (earnings) of ARO

Amortization, net (.5) (4.6) (8.2) 2.2 9.4

Accretion ofdiscount on (6.0) - - - - shareholder note

Other (7.0) 0.4 4.5 2.0 (9.3)

Changes in operatingassets and 21.9 20.9 109.8 24.9 (26.8) liabilities

Contributions topension plans andother (0.9) (22.2) (1.1) (0.4) (6.6) post-retirementbenefits

Net Cash Provided by(Used in) Operating (34.0) (31.7) 144.7 (15.3) (176.7) Activities



INVESTING ACTIVITIES

Additions toproperty and (10.8) (6.0) (10.9) (15.8) (30.8) equipment

Proceeds from Saleof Property, Plant, 26.6 3.7 7.6 30.4 3.4 and Equipment

Net Cash Provided by(Used in) Investing 15.8 (2.3) (3.3) 14.6 (27.4) Activities



FINANCING ACTIVITIES

Issuance of First 520.0 - - - - Lien Notes

Payments toPredecessor (129.9) - - - - creditors

Borrowings on credit - - - 30.0 222.1 facility

Payments forDebtor-in-possession - - 3.8 (43.8) - financing fees andbackstop agreement

Purchase ofnoncontrolling - - - (7.2) - interests

Other (1.4) - - - (1.0)

Net cash provided by(used in) financing 388.7 - 3.8 (21.0) 221.1 activities



Effect of exchangerate changes on cash (0.3) (0.1) 0.2 0.1 0.1 and cash equivalents



INCREASE (DECREASE)IN CASH AND CASH 370.2 (34.1) 145.4 (21.6) 17.1 EQUIVALENTS ANDRESTRICTED CASH

CASH AND CASHEQUIVALENTS AND 291.7 325.8 180.4 202.0 184.9 RESTRICTED CASH,BEGINNING OF PERIOD

CASH AND CASHEQUIVALENTS AND $ 661.9 $ 291.7 $ 325.8 $ 180.4 $ 202.0 RESTRICTED CASH, ENDOF PERIOD

(1)

Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.

(1) Represents the combined results of operations for the two-months ended June 30, 2021 and the one-month ended April 30, 2021.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

(in millions)

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

REVENUES

Floaters

Drillships

$

28.9

$

13.7

$

42.6

$

81.0

$

93.8

$

35.4

$

76.2

Semisubmersibles

20.8

4.7

25.5

16.3

11.7

21.7

87.4

$

49.7

$

18.4

$

68.1

$

97.3

$

105.5

$

57.1

$

163.6

Jackups (1)

HD Ultra-Harsh & Harsh Environment

70.9

34.0

104.9

95.5

96.2

91.2

89.4

HD & SD Modern

40.7

17.0

57.7

50.5

61.1

67.8

63.5

SD Legacy

16.9

8.8

25.7

26.6

22.1

27.8

33.4

$

128.5

$

59.8

$

188.3

$

172.6

$

179.4

$

186.8

$

186.3

Total

$

178.2

$

78.2

$

256.4

$

269.9

$

284.9

$

243.9

$

349.9

Other

Leased and Managed Rigs

24.6

12.1

36.7

37.2

11.6

41.4

38.9

Valaris Total

$

202.8

$

90.3

$

293.1

$

307.1

$

296.5

$

285.3

$

388.8

ARO

Total

84.0

40.8

124.8

122.7

117.5

145.6

146.0

Valaris 50% Share

42.0

20.4

62.4

61.4

58.8

72.8

73.0

Adjusted Total (2)

$

244.8

$

110.7

$

355.5

$

368.5

$

355.3

$

358.1

$

461.8

(in millions) Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Months One Month June 30, March 31, December September June 30, Ended Ended April 2021 2021 31, 2020 30, 2020 2020 June 30, 30, 2021 2021

REVENUES

Floaters

Drillships $ 28.9 $ 13.7 $ 42.6 $ 81.0 $ 93.8 $ 35.4 $ 76.2

Semisubmersibles 20.8 4.7 25.5 16.3 11.7 21.7 87.4

$ 49.7 $ 18.4 $ 68.1 $ 97.3 $ 105.5 $ 57.1 $ 163.6

Jackups^ (1)

HD Ultra-Harsh &Harsh 70.9 34.0 104.9 95.5 96.2 91.2 89.4 Environment

HD & SD Modern 40.7 17.0 57.7 50.5 61.1 67.8 63.5

SD Legacy 16.9 8.8 25.7 26.6 22.1 27.8 33.4

$ 128.5 $ 59.8 $ 188.3 $ 172.6 $ 179.4 $ 186.8 $ 186.3



Total $ 178.2 $ 78.2 $ 256.4 $ 269.9 $ 284.9 $ 243.9 $ 349.9



Other

Leased and 24.6 12.1 36.7 37.2 11.6 41.4 38.9 Managed Rigs



Valaris Total $ 202.8 $ 90.3 $ 293.1 $ 307.1 $ 296.5 $ 285.3 $ 388.8



ARO

Total 84.0 40.8 124.8 122.7 117.5 145.6 146.0

Valaris 50% 42.0 20.4 62.4 61.4 58.8 72.8 73.0 Share



Adjusted Total^ $ 244.8 $ 110.7 $ 355.5 $ 368.5 $ 355.3 $ 358.1 $ 461.8 (2)

(1)

HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas.

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(1) HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas.

(2) Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(in millions)

As of

Q2 2021(as of August 2, 2021)

Q1 2021(as ofMarch 31, 2021)

Q4 2020(as of December 31, 2020)

Q3 2020(as of September 30, 2020)

Q2 2020(as ofJune 30, 2020)

CONTRACT BACKLOG (1)

Floaters

Drillships

$

1,102.2

$

117.6

$

90.0

$

129.2

$

172.2

Semisubmersibles

294.0

171.4

73.7

82.3

104.9

$

1,396.2

$

289.0

$

163.7

$

211.5

$

277.1

Jackups

HD Ultra-Harsh & Harsh

364.4

403.8

358.7

400.3

484.3

HD & SD - Modern

299.9

180.6

211.8

253.4

375.1

SD - Legacy

102.9

134.4

167.1

176.3

217.0

$

767.2

$

718.8

$

737.6

$

830.0

$

1,076.4

Total

$

2,163.4

$

1,007.8

$

901.3

$

1,041.5

$

1,353.5

Other (2)

Leased and Managed Rigs

60.3

90.8

140.1

178.7

217.4

Valaris Total

$

2,223.7

$

1,098.6

$

1,041.4

$

1,220.2

$

1,570.9

ARO

Owned Rigs

818.7

869.5

84.2

146.7

212.3

Leased Rigs

134.5

192.2

263.3

347.1

422.7

ARO Total

953.2

1,061.7

347.5

493.8

635.0

Valaris 50% Share of ARO Owned Rigs

409.4

434.8

42.1

73.4

106.2

Adjusted Total (3)

$

2,633.1

$

1,533.4

$

1,083.5

$

1,293.6

$

1,677.1

(in millions) As of

Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 (as of (as of (as of (as of (as of August 2, March 31, December September June 30, 2021) 2021) 31, 2020) 30, 2020) 2020)

CONTRACT BACKLOG ^ (1)

Floaters

Drillships $ 1,102.2 $ 117.6 $ 90.0 $ 129.2 $ 172.2

Semisubmersibles 294.0 171.4 73.7 82.3 104.9

$ 1,396.2 $ 289.0 $ 163.7 $ 211.5 $ 277.1

Jackups

HD Ultra-Harsh & 364.4 403.8 358.7 400.3 484.3 Harsh

HD & SD - Modern 299.9 180.6 211.8 253.4 375.1

SD - Legacy 102.9 134.4 167.1 176.3 217.0

$ 767.2 $ 718.8 $ 737.6 $ 830.0 $ 1,076.4



Total $ 2,163.4 $ 1,007.8 $ 901.3 $ 1,041.5 $ 1,353.5



Other^ (2)

Leased and 60.3 90.8 140.1 178.7 217.4 Managed Rigs



Valaris Total $ 2,223.7 $ 1,098.6 $ 1,041.4 $ 1,220.2 $ 1,570.9



ARO

Owned Rigs 818.7 869.5 84.2 146.7 212.3

Leased Rigs 134.5 192.2 263.3 347.1 422.7

ARO Total 953.2 1,061.7 347.5 493.8 635.0



Valaris 50%Share of ARO 409.4 434.8 42.1 73.4 106.2 Owned Rigs



Adjusted Total^ $ 2,633.1 $ 1,533.4 $ 1,083.5 $ 1,293.6 $ 1,677.1 (3)



(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 includes 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. Q2 2021 contract backlog is as of August 2, 2021, being the filing date of our most recent fleet status report. Contract backlog for historical periods is as of the balance sheet date.

(2)

Leased rigs and managed rigs included in Other reporting segment.

(3)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO owned rigs.

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 includes drilling contracts subject to final investment decision (FID) and drilling contracts which grant the customer termination rights if FID is not received with(1) 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. Q2 2021 contract backlog is as of August 2, 2021, being the filing date of our most recent fleet status report. Contract backlog for historical periods is as of the balance sheet date.

(2) Leased rigs and managed rigs included in Other reporting segment.

(3) Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO owned rigs.

As of

NUMBER OF RIGS

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Active Fleet (1)

Floaters

Drillships

4

4

4

5

7

Semisubmersibles

3

3

3

4

5

7

7

7

9

12

Jackups

HD Ultra-Harsh & Harsh Environment

10

9

9

9

10

HD & SD Modern

11

11

11

11

12

SD Legacy

4

4

4

6

7

25

24

24

26

29

Total Active Fleet

32

31

31

35

41

Stacked Fleet

Floaters

Drillships (2)

7

7

7

6

7

Semisubmersibles

2

2

2

2

4

9

9

9

8

11

Jackups

HD Ultra-Harsh & Harsh Environment

2

4

4

4

3

HD & SD Modern

8

8

8

8

8

SD Legacy

-

-

-

-

-

10

12

12

12

11

Total Stacked Fleet

19

21

21

20

22

Leased Rigs (3)

Jackups

HD Ultra-Harsh & Harsh Environment

1

1

1

1

1

HD & SD Modern

5

5

5

5

5

SD Legacy

3

3

3

3

3

Total Leased Rigs

9

9

9

9

9

Valaris Total

60

61

61

64

72

Managed Rigs (3)

2

2

2

2

2

ARO (4)

Owned Rigs

7

7

7

7

7

Leased Rigs

9

9

9

9

9

ARO Total

16

16

16

16

16

As of

NUMBER OF RIGS June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

Active Fleet^ (1)

Floaters

Drillships 4 4 4 5 7

Semisubmersibles 3 3 3 4 5

7 7 7 9 12

Jackups

HD Ultra-Harsh & 10 9 9 9 10 Harsh Environment

HD & SD Modern 11 11 11 11 12

SD Legacy 4 4 4 6 7

25 24 24 26 29



Total Active Fleet 32 31 31 35 41



Stacked Fleet

Floaters

Drillships ^(2) 7 7 7 6 7

Semisubmersibles 2 2 2 2 4

9 9 9 8 11

Jackups

HD Ultra-Harsh & 2 4 4 4 3 Harsh Environment

HD & SD Modern 8 8 8 8 8

SD Legacy - - - - -

10 12 12 12 11



Total Stacked Fleet 19 21 21 20 22



Leased Rigs ^(3)

Jackups

HD Ultra-Harsh & 1 1 1 1 1 Harsh Environment

HD & SD Modern 5 5 5 5 5

SD Legacy 3 3 3 3 3

Total Leased Rigs 9 9 9 9 9



Valaris Total 60 61 61 64 72



Managed Rigs ^(3) 2 2 2 2 2



ARO ^(4)

Owned Rigs 7 7 7 7 7

Leased Rigs 9 9 9 9 9

ARO Total 16 16 16 16 16

(1)

Active rigs are defined as rigs that are not preservation stacked.

(2)

Excludes VALARIS DS-13 and VALARIS DS-14, which Valaris has the option to purchase through year-end 2023. Prior periods have been revised to conform with the current treatment.

(3)

Leased rigs and managed rigs included in Other reporting segment.

(4)

Valaris has a 50% ownership interest in ARO. Rig count for ARO owned rigs excludes two newbuild rigs scheduled to be delivered in 2022. All ARO leased rigs are leased from Valaris and also included in Valaris leased rig count.

(1) Active rigs are defined as rigs that are not preservation stacked.

Excludes VALARIS DS-13 and VALARIS DS-14, which Valaris has the option to(2) purchase through year-end 2023. Prior periods have been revised to conform with the current treatment.

(3) Leased rigs and managed rigs included in Other reporting segment.

Valaris has a 50% ownership interest in ARO. Rig count for ARO owned rigs(4) excludes two newbuild rigs scheduled to be delivered in 2022. All ARO leased rigs are leased from Valaris and also included in Valaris leased rig count.





Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

AVAILABLE DAYS - TOTAL FLEET (1)

Floaters

Drillships

1,001

990

1,043

1,274

1,274

Semisubmersibles

455

450

521

628

843

1,456

1,440

1,564

1,902

2,117

Jackups

HD Ultra-Harsh & Harsh Environment

1,153

1,170

1,328

1,196

1,183

HD & SD Modern

1,729

1,710

1,810

1,828

1,820

SD Legacy

364

360

368

368

504

3,246

3,240

3,506

3,392

3,507

Total

4,702

4,680

5,070

5,294

5,624

Other

Leased and Managed Rigs

1,001

990

1,012

1,012

1,001

Valaris Total

5,703

5,670

6,082

6,306

6,625

ARO

Owned Rigs

637

630

644

644

637

Leased Rigs (2)

819

810

828

828

819

ARO Total

1,456

1,440

1,472

1,472

1,456

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

AVAILABLE DAYS - TOTAL FLEET ^(1)

Floaters

Drillships 1,001 990 1,043 1,274 1,274

Semisubmersibles 455 450 521 628 843

1,456 1,440 1,564 1,902 2,117

Jackups

HD Ultra-Harsh & 1,153 1,170 1,328 1,196 1,183 Harsh Environment

HD & SD Modern 1,729 1,710 1,810 1,828 1,820

SD Legacy 364 360 368 368 504

3,246 3,240 3,506 3,392 3,507



Total 4,702 4,680 5,070 5,294 5,624



Other

Leased and Managed 1,001 990 1,012 1,012 1,001 Rigs



Valaris Total 5,703 5,670 6,082 6,306 6,625



ARO

Owned Rigs 637 630 644 644 637

Leased Rigs ^(2) 819 810 828 828 819

ARO Total 1,456 1,440 1,472 1,472 1,456

(1)

Represents 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)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

Represents the maximum number of days available in the period for the total(1) 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) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

AVAILABLE DAYS - ACTIVE FLEET (1)

Floaters

Drillships

364

360

368

460

637

Semisubmersibles

273

270

276

368

455

637

630

644

828

1,092

Jackups

HD Ultra-Harsh & Harsh Environment

819

630

867

736

910

HD & SD Modern

1,001

810

982

920

1,183

SD Legacy

364

360

368

490

546

2,184

1,800

2,217

2,146

2,639

Total

2,821

2,430

2,861

2,974

3,731

Other

Leased and Managed Rigs

1,001

990

1,012

1,012

1,001

Valaris Total

3,822

3,420

3,873

3,986

4,732

ARO

Owned Rigs

637

630

644

644

637

Leased Rigs (2)

819

810

828

828

819

ARO Total

1,456

1,440

1,472

1,472

1,456

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

AVAILABLE DAYS - ACTIVE FLEET ^(1)

Floaters

Drillships 364 360 368 460 637

Semisubmersibles 273 270 276 368 455

637 630 644 828 1,092

Jackups

HD Ultra-Harsh & 819 630 867 736 910 Harsh Environment

HD & SD Modern 1,001 810 982 920 1,183

SD Legacy 364 360 368 490 546

2,184 1,800 2,217 2,146 2,639



Total 2,821 2,430 2,861 2,974 3,731



Other

Leased and Managed 1,001 990 1,012 1,012 1,001 Rigs



Valaris Total 3,822 3,420 3,873 3,986 4,732



ARO

Owned Rigs 637 630 644 644 637

Leased Rigs ^(2) 819 810 828 828 819

ARO Total 1,456 1,440 1,472 1,472 1,456

(1)

Represents the maximum number of days available in the period for the active fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, for active rigs only. Active rigs are defined as rigs that are not preservation stacked.

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

Represents the maximum number of days available in the period for the(1) active fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, for active rigs only. Active rigs are defined as rigs that are not preservation stacked.

(2) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

OPERATING DAYS (1)

Floaters

Drillships

185

329

352

142

382

Semisubmersibles

137

90

56

71

157

322

419

408

213

539

Jackups

HD Ultra-Harsh & Harsh Environment

674

582

579

572

572

HD & SD Modern

742

683

669

750

842

SD Legacy

339

360

367

366

481

1,755

1,625

1,615

1,688

1,895

Total

2,077

2,044

2,023

1,901

2,434

Other

Leased and Managed Rigs

1,001

990

1,012

951

1,001

Valaris Total

3,078

3,034

3,035

2,852

3,435

ARO

Owned Rigs

609

609

599

619

615

Leased Rigs (2)

684

687

437

814

802

ARO Total

1,293

1,296

1,036

1,433

1,417

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

OPERATING DAYS ^(1)

Floaters

Drillships 185 329 352 142 382

Semisubmersibles 137 90 56 71 157

322 419 408 213 539

Jackups

HD Ultra-Harsh & 674 582 579 572 572 Harsh Environment

HD & SD Modern 742 683 669 750 842

SD Legacy 339 360 367 366 481

1,755 1,625 1,615 1,688 1,895



Total 2,077 2,044 2,023 1,901 2,434



Other

Leased and Managed 1,001 990 1,012 951 1,001 Rigs



Valaris Total 3,078 3,034 3,035 2,852 3,435



ARO

Owned Rigs 609 609 599 619 615

Leased Rigs^ (2) 684 687 437 814 802

ARO Total 1,293 1,296 1,036 1,433 1,417

(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 early contract terminations, 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.

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs operating days.

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 early contract(1) terminations, 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.

(2) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs operating days.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

UTILIZATION - TOTAL FLEET (1)

Floaters

Drillships

18

%

33

%

34

%

11

%

30

%

Semisubmersibles

30

%

20

%

11

%

11

%

19

%

22

%

29

%

26

%

11

%

25

%

Jackups

HD Ultra-Harsh & Harsh Environment

58

%

50

%

44

%

48

%

48

%

HD & SD Modern

43

%

40

%

37

%

41

%

46

%

SD Legacy

93

%

100

%

100

%

99

%

96

%

54

%

50

%

46

%

50

%

54

%

Total

44

%

44

%

40

%

36

%

43

%

Other

Leased and Managed Rigs

100

%

100

%

100

%

94

%

100

%

Valaris Total

54

%

54

%

50

%

45

%

52

%

Pro Forma Jackups Including Leased Rigs

63

%

60

%

56

%

59

%

63

%

ARO

Owned Rigs

96

%

97

%

93

%

96

%

97

%

Leased Rigs (2)

83

%

85

%

53

%

98

%

98

%

ARO Total

89

%

90

%

70

%

97

%

97

%

Three Months Ended

June 30, March December September June 30, 2021 31, 2021 31, 2020 30, 2020 2020

UTILIZATION - TOTAL FLEET ^(1)

Floaters

Drillships 18 % 33 % 34 % 11 % 30 %

Semisubmersibles 30 % 20 % 11 % 11 % 19 %

22 % 29 % 26 % 11 % 25 %

Jackups

HD Ultra-Harsh & Harsh 58 % 50 % 44 % 48 % 48 %Environment

HD & SD Modern 43 % 40 % 37 % 41 % 46 %

SD Legacy 93 % 100 % 100 % 99 % 96 %

54 % 50 % 46 % 50 % 54 %



Total 44 % 44 % 40 % 36 % 43 %



Other

Leased and Managed 100 % 100 % 100 % 94 % 100 %Rigs



Valaris Total 54 % 54 % 50 % 45 % 52 %



Pro Forma Jackups 63 % 60 % 56 % 59 % 63 %Including Leased Rigs



ARO

Owned Rigs 96 % 97 % 93 % 96 % 97 %

Leased Rigs^ (2) 83 % 85 % 53 % 98 % 98 %

ARO Total 89 % 90 % 70 % 97 % 97 %

(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.

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

(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.

(2) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

UTILIZATION - ACTIVE FLEET (1)

Floaters

Drillships

51

%

91

%

96

%

31

%

60

%

Semisubmersibles

50

%

33

%

20

%

19

%

34

%

51

%

66

%

63

%

26

%

49

%

Jackups

HD Ultra-Harsh & Harsh Environment

82

%

92

%

67

%

78

%

63

%

HD & SD Modern

74

%

84

%

68

%

82

%

71

%

SD Legacy

93

%

100

%

100

%

75

%

88

%

80

%

90

%

73

%

79

%

72

%

Total

74

%

84

%

71

%

64

%

65

%

Other

Leased and Managed Rigs

100

%

100

%

100

%

94

%

100

%

Valaris Total

81

%

89

%

78

%

72

%

73

%

Pro Forma Jackups Including Leased Rigs

86

%

93

%

80

%

85

%

78

%

ARO

Owned Rigs

96

%

97

%

93

%

96

%

97

%

Leased Rigs (2)

83

%

85

%

53

%

98

%

98

%

ARO Total

89

%

90

%

70

%

97

%

97

%

Three Months Ended

June 30, March December September June 30, 2021 31, 2021 31, 2020 30, 2020 2020

UTILIZATION - ACTIVE FLEET^ (1)

Floaters

Drillships 51 % 91 % 96 % 31 % 60 %

Semisubmersibles 50 % 33 % 20 % 19 % 34 %

51 % 66 % 63 % 26 % 49 %

Jackups

HD Ultra-Harsh & Harsh 82 % 92 % 67 % 78 % 63 %Environment

HD & SD Modern 74 % 84 % 68 % 82 % 71 %

SD Legacy 93 % 100 % 100 % 75 % 88 %

80 % 90 % 73 % 79 % 72 %



Total 74 % 84 % 71 % 64 % 65 %



Other

Leased and Managed 100 % 100 % 100 % 94 % 100 %Rigs



Valaris Total 81 % 89 % 78 % 72 % 73 %



Pro Forma Jackups 86 % 93 % 80 % 85 % 78 %Including Leased Rigs



ARO

Owned Rigs 96 % 97 % 93 % 96 % 97 %

Leased Rigs ^(2) 83 % 85 % 53 % 98 % 98 %

ARO Total 89 % 90 % 70 % 97 % 97 %

(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.

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

(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.

(2) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

REVENUE EFFICIENCY (1)

Floaters

Drillships

100.0

%

95.7

%

97.1

%

98.3

%

96.6

%

Semisubmersibles

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

100.0

%

98.2

%

98.8

%

98.9

%

98.5

%

Jackups

HD Ultra-Harsh & Harsh Environment

100.0

%

95.1

%

95.7

%

92.1

%

80.5

%

HD & SD Modern

99.8

%

99.7

%

99.8

%

94.3

%

98.7

%

SD Legacy

96.9

%

100.0

%

100.0

%

100.0

%

100.0

%

99.0

%

99.3

%

99.1

%

95.2

%

96.3

%

Total

99.3

%

98.9

%

99.0

%

96.0

%

97.1

%

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

REVENUE EFFICIENCY ^ (1)

Floaters

Drillships 100.0 % 95.7 % 97.1 % 98.3 % 96.6 %

Semisubmersibles 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

100.0 % 98.2 % 98.8 % 98.9 % 98.5 %

Jackups

HD Ultra-Harsh & 100.0 % 95.1 % 95.7 % 92.1 % 80.5 %Harsh Environment

HD & SD Modern 99.8 % 99.7 % 99.8 % 94.3 % 98.7 %

SD Legacy 96.9 % 100.0 % 100.0 % 100.0 % 100.0 %

99.0 % 99.3 % 99.1 % 95.2 % 96.3 %



Total 99.3 % 98.9 % 99.0 % 96.0 % 97.1 %



(1)

Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.

(1) Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

AVERAGE DAY RATES (1)

Floaters

Drillships

$

212,000

$

208,000

$

214,000

$

155,000

$

161,000

Semisubmersibles

178,000

164,000

160,000

262,000

197,000

$

197,000

$

198,000

$

206,000

$

190,000

$

172,000

Jackups

HD Ultra-Harsh & Harsh Environment

$

141,000

$

140,000

$

120,000

$

138,000

$

129,000

HD & SD Modern

73,000

70,000

74,000

73,000

70,000

SD Legacy

72,000

70,000

55,000

65,000

63,000

$

99,000

$

95,000

$

86,000

$

93,000

$

86,000

Total

$

114,000

$

116,000

$

110,000

$

104,000

$

106,000

Other

Leased and Managed Rigs

31,000

32,000

6,000

36,000

37,000

Valaris Total

$

87,000

$

89,000

$

76,000

$

80,000

$

84,000

ARO

Owned Rigs

$

99,000

$

98,000

$

116,000

$

116,000

$

115,000

Leased Rigs (2)

93,000

89,000

99,000

91,000

94,000

ARO Total

$

96,000

$

93,000

$

109,000

$

102,000

$

103,000

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

AVERAGE DAY RATES ^(1)

Floaters

Drillships $ 212,000 $ 208,000 $ 214,000 $ 155,000 $ 161,000

Semisubmersibles 178,000 164,000 160,000 262,000 197,000

$ 197,000 $ 198,000 $ 206,000 $ 190,000 $ 172,000

Jackups

HD Ultra-Harsh & $ 141,000 $ 140,000 $ 120,000 $ 138,000 $ 129,000 Harsh Environment

HD & SD Modern 73,000 70,000 74,000 73,000 70,000

SD Legacy 72,000 70,000 55,000 65,000 63,000

$ 99,000 $ 95,000 $ 86,000 $ 93,000 $ 86,000



Total $ 114,000 $ 116,000 $ 110,000 $ 104,000 $ 106,000



Other

Leased and 31,000 32,000 6,000 36,000 37,000 Managed Rigs



Valaris Total $ 87,000 $ 89,000 $ 76,000 $ 80,000 $ 84,000



ARO

Owned Rigs $ 99,000 $ 98,000 $ 116,000 $ 116,000 $ 115,000

Leased Rigs ^(2) 93,000 89,000 99,000 91,000 94,000

ARO Total $ 96,000 $ 93,000 $ 109,000 $ 102,000 $ 103,000

(1)

Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, lump-sum revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of contract days, adjusted to exclude contract days associated with certain suspension periods, mobilizations, demobilizations and shipyard contracts.

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs average day rates.

Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, lump-sum revenues, revenues earned during suspension periods and revenues(1) attributable to amortization of drilling contract intangibles, by the aggregate number of contract days, adjusted to exclude contract days associated with certain suspension periods, mobilizations, demobilizations and shipyard contracts.

(2) All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs average day rates.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

DRILLSHIPS

Adjusted Revenues (1)

$

38.4

$

66.4

$

71.1

$

28.9

$

69.3

Adjusted operating expense (2)

41.6

52.8

62.0

77.6

90.6

Rig operating margin

(3.2)

13.6

9.1

(48.7)

(21.3)

Rig operating margin %

(8)

%

20

%

13

%

(169)

%

(31)

%

Other operating expenses

Depreciation

21.4

43.0

42.8

42.4

43.1

Loss on impairment

-

-

-

-

13.5

$

21.4

$

43.0

$

42.8

$

42.4

$

56.6

Other operating income (expense) (3)

(8.8)

(3.2)

(6.9)

106.7

(20.9)

Operating income (loss)

$

(33.4)

$

(32.6)

$

(40.6)

$

15.6

$

(98.8)

Adjusted EBITDA (4)

(2.5)

16.1

5.1

68.3

(22.9)

Reactivation costs (5)

-

-

-

-

-

Adjusted EBITDAR

$

(2.5)

$

16.1

$

5.1

$

68.3

$

(22.9)

Preservation costs (5)

-

-

1.5

28.3

10.8

Adjusted EBITDARP

$

(2.5)

$

16.1

$

6.6

$

96.6

$

(12.1)

Stacking costs (5)

8.9

11.3

14.8

5.6

7.7

Adjusted EBITDARPS

$

6.4

$

27.4

$

21.4

$

102.2

$

(4.4)

Number of Rigs (at quarter end)

Total Fleet

11

11

11

11

14

Active Fleet

4

4

4

5

7

Operating Days

185

329

352

142

382

Utilization - Active Fleet

51

%

91

%

96

%

31

%

60

%

Average Day Rate

$

212,000

$

208,000

$

214,000

$

155,000

$

161,000

(in Three Months Endedmillions)

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

DRILLSHIPS



AdjustedRevenues ^ $ 38.4 $ 66.4 $ 71.1 $ 28.9 $ 69.3 (1)

Adjustedoperating 41.6 52.8 62.0 77.6 90.6 expense ^(2)



Rigoperating (3.2) 13.6 9.1 (48.7) (21.3) margin

Rigoperating (8) % 20 % 13 % (169) % (31) %margin %



Otheroperating expenses

Depreciation 21.4 43.0 42.8 42.4 43.1

Loss on - - - - 13.5 impairment

$ 21.4 $ 43.0 $ 42.8 $ 42.4 $ 56.6



Otheroperatingincome (8.8) (3.2) (6.9) 106.7 (20.9) (expense)^(3)



Operatingincome $ (33.4) $ (32.6) $ (40.6) $ 15.6 $ (98.8) (loss)



Adjusted (2.5) 16.1 5.1 68.3 (22.9) EBITDA ^(4)

Reactivation - - - - - costs ^(5)

Adjusted $ (2.5) $ 16.1 $ 5.1 $ 68.3 $ (22.9) EBITDAR

Preservation - - 1.5 28.3 10.8 costs ^(5)

Adjusted $ (2.5) $ 16.1 $ 6.6 $ 96.6 $ (12.1) EBITDARP

Stacking 8.9 11.3 14.8 5.6 7.7 costs ^(5)

Adjusted $ 6.4 $ 27.4 $ 21.4 $ 102.2 $ (4.4) EBITDARPS



Number ofRigs (at quarter end)

Total Fleet 11 11 11 11 14

Active Fleet 4 4 4 5 7



Operating 185 329 352 142 382 Days

Utilization- Active 51 % 91 % 96 % 31 % 60 %Fleet

Average Day $ 212,000 $ 208,000 $ 214,000 $ 155,000 $ 161,000 Rate

(1)

Revenues exclusive of amortization and reimbursable items.

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items. Other operating income in the quarter ended September 30, 2020 primarily relates to loss of hire insurance for VALARIS DS-8 following termination of a contract.

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5)

Included in rig operating expense.

(1) Revenues exclusive of amortization and reimbursable items.

(2) Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of(3) assets and other miscellaneous items. Other operating income in the quarter ended September 30, 2020 primarily relates to loss of hire insurance for VALARIS DS-8 following termination of a contract.

(4) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5) Included in rig operating expense.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

SEMISUBMERSIBLES

Adjusted Revenues (1)

$

23.7

$

14.1

$

9.4

$

18.9

$

78.4

Adjusted operating expense (2)

17.4

20.9

21.8

30.1

35.3

Rig operating margin

6.3

(6.8)

(12.4)

(11.2)

43.1

Rig operating margin %

27

%

(48)

%

(132)

%

(59)

%

55

%

Other operating expenses

Depreciation

2.2

12.9

12.7

13.2

18.7

Loss on impairment

-

756.5

-

-

818.2

$

2.2

$

769.4

$

12.7

$

13.2

$

836.9

Other operating income (expense) (3)

(5.9)

(5.1)

(4.9)

(0.1)

(8.1)

Operating income (loss)

$

(1.8)

$

(781.3)

$

(30.0)

$

(24.5)

$

(801.9)

Adjusted EBITDA (4)

6.4

(6.7)

(12.7)

(10.2)

43.6

Reactivation costs (5)

0.1

5.7

1.2

0.9

1.9

Adjusted EBITDAR

$

6.5

$

(1.0)

$

(11.5)

$

(9.3)

$

45.5

Preservation costs (5)

0.2

1.1

2.8

4.4

-

Adjusted EBITDARP

$

6.7

$

0.1

$

(8.7)

$

(4.9)

$

45.5

Stacking costs (5)

1.2

0.5

0.8

3.5

2.2

Adjusted EBITDARPS

$

7.9

$

0.6

$

(7.9)

$

(1.4)

$

47.7

Number of Rigs (at quarter end)

Total Fleet

5

5

5

6

9

Active Fleet

3

3

3

4

5

Operating Days

137

90

56

71

157

Utilization - Active Fleet

50

%

33

%

20

%

19

%

34

%

Average Day Rate

$

178,000

$

164,000

$

160,000

$

262,000

$

197,000

(in millions) Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

SEMISUBMERSIBLES



Adjusted $ 23.7 $ 14.1 $ 9.4 $ 18.9 $ 78.4 Revenues ^(1)

Adjustedoperating 17.4 20.9 21.8 30.1 35.3 expense ^(2)



Rig operating 6.3 (6.8) (12.4) (11.2) 43.1 margin

Rig operating 27 % (48) % (132) % (59) % 55 %margin %



Other operating expenses

Depreciation 2.2 12.9 12.7 13.2 18.7

Loss on - 756.5 - - 818.2 impairment

$ 2.2 $ 769.4 $ 12.7 $ 13.2 $ 836.9



Other operatingincome (expense) (5.9) (5.1) (4.9) (0.1) (8.1) ^ (3)



Operating income $ (1.8) $ (781.3) $ (30.0) $ (24.5) $ (801.9) (loss)



Adjusted EBITDA 6.4 (6.7) (12.7) (10.2) 43.6 ^(4)

Reactivation 0.1 5.7 1.2 0.9 1.9 costs ^(5)

Adjusted EBITDAR $ 6.5 $ (1.0) $ (11.5) $ (9.3) $ 45.5

Preservation 0.2 1.1 2.8 4.4 - costs ^(5)

Adjusted $ 6.7 $ 0.1 $ (8.7) $ (4.9) $ 45.5 EBITDARP

Stacking costs ^ 1.2 0.5 0.8 3.5 2.2 (5)

Adjusted $ 7.9 $ 0.6 $ (7.9) $ (1.4) $ 47.7 EBITDARPS



Number of Rigs (at quarter end)

Total Fleet 5 5 5 6 9

Active Fleet 3 3 3 4 5



Operating Days 137 90 56 71 157

Utilization - 50 % 33 % 20 % 19 % 34 %Active Fleet

Average Day Rate $ 178,000 $ 164,000 $ 160,000 $ 262,000 $ 197,000

(1)

Revenues exclusive of amortization and reimbursable items.

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5)

Included in rig operating expense.

(1) Revenues exclusive of amortization and reimbursable items.

(2) Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

Other operating income (expense) includes reimbursable revenue and expense,(3) amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5) Included in rig operating expense.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

HD ULTRA-HARSH &HARSH JACKUPS

Adjusted Revenues (1)

$

90.3

$

82.4

$

76.4

$

80.4

$

74.4

Adjusted operating expense (2)

71.3

55.2

62.2

60.0

63.2

Rig operating margin

19.0

27.2

14.2

20.4

11.2

Rig operating margin %

21

%

33

%

19

%

25

%

15

%

Other operating expenses

Depreciation

13.7

26.9

27.4

26.7

26.7

Loss on impairment

-

-

-

-

-

$

13.7

$

26.9

$

27.4

$

26.7

$

26.7

Other operating income (expense) (3)

3.4

(1.7)

(5.7)

(7.6)

(9.8)

Operating income (loss)

$

8.7

$

(1.4)

$

(18.9)

$

(13.9)

$

(25.3)

Adjusted EBITDA (4)

22.2

29.3

16.5

22.5

12.7

Reactivation costs (5)

20.1

1.7

0.1

-

-

Adjusted EBITDAR

$

42.3

$

31.0

$

16.6

$

22.5

$

12.7

Preservation costs (5)

0.3

-

3.3

7.1

1.8

Adjusted EBITDARP

$

42.6

$

31.0

$

19.9

$

29.6

$

14.5

Stacking costs (5)

1.0

2.8

0.9

(1.1)

-

Adjusted EBITDARPS

$

43.6

$

33.8

$

20.8

$

28.5

$

14.5

Number of Rigs (at quarter end)

Total Fleet

12

13

13

13

13

Active Fleet

10

9

9

9

10

Operating Days

674

582

579

572

572

Utilization - Active Fleet

82

%

92

%

67

%

78

%

63

%

Average Day Rate

$

142,000

$

140,000

$

120,000

$

138,000

$

129,000

(in Three Months Endedmillions)

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

HDULTRA-HARSH& HARSHJACKUPS



AdjustedRevenues ^ $ 90.3 $ 82.4 $ 76.4 $ 80.4 $ 74.4 (1)

Adjustedoperating 71.3 55.2 62.2 60.0 63.2 expense ^(2)



Rigoperating 19.0 27.2 14.2 20.4 11.2 margin

Rigoperating 21 % 33 % 19 % 25 % 15 %margin %



Otheroperating expenses

Depreciation 13.7 26.9 27.4 26.7 26.7

Loss on - - - - - impairment

$ 13.7 $ 26.9 $ 27.4 $ 26.7 $ 26.7



Otheroperatingincome 3.4 (1.7) (5.7) (7.6) (9.8) (expense)^(3)



Operatingincome $ 8.7 $ (1.4) $ (18.9) $ (13.9) $ (25.3) (loss)



Adjusted 22.2 29.3 16.5 22.5 12.7 EBITDA^ (4)

Reactivation 20.1 1.7 0.1 - - costs ^(5)

Adjusted $ 42.3 $ 31.0 $ 16.6 $ 22.5 $ 12.7 EBITDAR

Preservation 0.3 - 3.3 7.1 1.8 costs ^(5)

Adjusted $ 42.6 $ 31.0 $ 19.9 $ 29.6 $ 14.5 EBITDARP

Stacking 1.0 2.8 0.9 (1.1) - costs ^(5)

Adjusted $ 43.6 $ 33.8 $ 20.8 $ 28.5 $ 14.5 EBITDARPS



Number ofRigs (at quarter end)

Total Fleet 12 13 13 13 13

Active Fleet 10 9 9 9 10



Operating 674 582 579 572 572 Days

Utilization- Active 82 % 92 % 67 % 78 % 63 %Fleet

Average Day $ 142,000 $ 140,000 $ 120,000 $ 138,000 $ 129,000 Rate

(1)

Revenues exclusive of amortization and reimbursable items.

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5)

Included in rig operating expense.

(1) Revenues exclusive of amortization and reimbursable items.

(2) Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

Other operating income (expense) includes reimbursable revenue and expense,(3) amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5) Included in rig operating expense.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

HD & SD MODERN JACKUPS

Adjusted Revenues (1)

$

49.8

$

44.7

$

51.6

$

60.4

$

56.2

Adjusted operating expense (2)

49.2

38.8

45.1

46.4

54.8

Rig operating margin

0.6

5.9

6.5

14.0

1.4

Rig operating margin %

1

%

13

%

13

%

23

%

2

%

Other operating expenses

Depreciation

9.6

22.4

22.5

22.4

22.2

Loss on impairment

-

-

-

-

0.5

$

9.6

$

22.4

$

22.5

$

22.4

$

22.7

Other operating income (expense) (3)

(2.6)

(4.9)

(6.0)

(7.0)

(6.3)

Operating income (loss)

$

(11.6)

$

(21.4)

$

(22.0)

$

(15.4)

$

(27.6)

Adjusted EBITDA (4)

2.9

8.3

9.8

16.3

4.8

Reactivation costs (5)

3.8

3.7

0.3

-

-

Adjusted EBITDAR

$

6.7

$

12.0

$

10.1

$

16.3

$

4.8

Preservation costs (5)

-

0.3

1.9

1.8

2.6

Adjusted EBITDARP

$

6.7

$

12.3

$

12.0

$

18.1

$

7.4

Stacking costs (5)

5.5

1.7

5.5

6.3

2.6

Adjusted EBITDARPS

$

12.2

$

14.0

$

17.5

$

24.4

$

10.0

Number of Rigs (at quarter end)

Total Fleet

19

19

19

19

20

Active Fleet

11

11

11

11

12

Operating Days

742

683

669

750

842

Utilization - Active Fleet

74

%

84

%

68

%

82

%

71

%

Average Day Rate

$

73,000

$

70,000

$

74,000

$

73,000

$

70,000

(in millions) Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

HD & SD MODERN JACKUPS



Adjusted $ 49.8 $ 44.7 $ 51.6 $ 60.4 $ 56.2 Revenues ^(1)

Adjustedoperating 49.2 38.8 45.1 46.4 54.8 expense ^(2)



Rig operating 0.6 5.9 6.5 14.0 1.4 margin

Rig operating 1 % 13 % 13 % 23 % 2 %margin %



Other operating expenses

Depreciation 9.6 22.4 22.5 22.4 22.2

Loss on - - - - 0.5 impairment

$ 9.6 $ 22.4 $ 22.5 $ 22.4 $ 22.7



Other operatingincome (expense) (2.6) (4.9) (6.0) (7.0) (6.3) ^ (3)



Operating income $ (11.6) $ (21.4) $ (22.0) $ (15.4) $ (27.6) (loss)



Adjusted EBITDA^ 2.9 8.3 9.8 16.3 4.8 (4)

Reactivation 3.8 3.7 0.3 - - costs ^(5)

Adjusted EBITDAR $ 6.7 $ 12.0 $ 10.1 $ 16.3 $ 4.8

Preservation - 0.3 1.9 1.8 2.6 costs ^(5)

Adjusted $ 6.7 $ 12.3 $ 12.0 $ 18.1 $ 7.4 EBITDARP

Stacking costs ^ 5.5 1.7 5.5 6.3 2.6 (5)

Adjusted $ 12.2 $ 14.0 $ 17.5 $ 24.4 $ 10.0 EBITDARPS



Number of Rigs (at quarter end)

Total Fleet 19 19 19 19 20

Active Fleet 11 11 11 11 12



Operating Days 742 683 669 750 842

Utilization - 74 % 84 % 68 % 82 % 71 %Active Fleet

Average Day Rate $ 73,000 $ 70,000 $ 74,000 $ 73,000 $ 70,000

(1)

Revenues exclusive of amortization and reimbursable items.

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5)

Included in rig operating expense.

(1) Revenues exclusive of amortization and reimbursable items.

(2) Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

Other operating income (expense) includes reimbursable revenue and expense,(3) amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5) Included in rig operating expense.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

SD LEGACY JACKUPS

Adjusted Revenues (1)

$

23.5

$

24.6

$

19.4

$

25.5

$

31.5

Adjusted operating expense (2)

11.8

12.1

12.3

15.9

18.2

Rig operating margin

11.7

12.5

7.1

9.6

13.3

Rig operating margin %

50

%

51

%

37

%

38

%

42

%

Other operating expenses

Depreciation

1.6

2.8

2.7

3.5

3.7

Loss on impairment

-

-

-

-

-

$

1.6

$

2.8

$

2.7

$

3.5

$

3.7

Other operating income (expense) (3)

(2.1)

(1.8)

(1.2)

(2.9)

(6.3)

Operating income (loss)

$

8.0

$

7.9

$

3.2

$

3.2

$

3.3

Adjusted EBITDA (4)

12.0

13.0

7.3

10.2

12.7

Reactivation costs (5)

-

-

-

-

-

Adjusted EBITDAR

$

12.0

$

13.0

$

7.3

$

10.2

$

12.7

Preservation costs (5)

-

-

-

-

-

Adjusted EBITDARP

$

12.0

$

13.0

$

7.3

$

10.2

$

12.7

Stacking costs (5)

-

-

-

-

-

Adjusted EBITDARPS

$

12.0

$

13.0

$

7.3

$

10.2

$

12.7

Number of Rigs (at quarter end)

Total Fleet

4

4

4

6

7

Active Fleet

4

4

4

6

7

Operating Days

339

360

367

366

481

Utilization - Active Fleet

93

%

100

%

100

%

75

%

88

%

Average Day Rate

$

71,000

$

70,000

$

55,000

$

65,000

$

63,000

(in millions) Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

SD LEGACY JACKUPS



Adjusted $ 23.5 $ 24.6 $ 19.4 $ 25.5 $ 31.5 Revenues ^(1)

Adjustedoperating 11.8 12.1 12.3 15.9 18.2 expense ^(2)



Rig operating 11.7 12.5 7.1 9.6 13.3 margin

Rig operating 50 % 51 % 37 % 38 % 42 %margin %



Other operating expenses

Depreciation 1.6 2.8 2.7 3.5 3.7

Loss on - - - - - impairment

$ 1.6 $ 2.8 $ 2.7 $ 3.5 $ 3.7



Other operatingincome (expense) (2.1) (1.8) (1.2) (2.9) (6.3) ^ (3)



Operating income $ 8.0 $ 7.9 $ 3.2 $ 3.2 $ 3.3 (loss)



Adjusted EBITDA^ 12.0 13.0 7.3 10.2 12.7 (4)

Reactivation - - - - - costs ^(5)

Adjusted EBITDAR $ 12.0 $ 13.0 $ 7.3 $ 10.2 $ 12.7

Preservation - - - - - costs ^(5)

Adjusted $ 12.0 $ 13.0 $ 7.3 $ 10.2 $ 12.7 EBITDARP

Stacking costs ^ - - - - - (5)

Adjusted $ 12.0 $ 13.0 $ 7.3 $ 10.2 $ 12.7 EBITDARPS



Number of Rigs (at quarter end)

Total Fleet 4 4 4 6 7

Active Fleet 4 4 4 6 7



Operating Days 339 360 367 366 481

Utilization - 93 % 100 % 100 % 75 % 88 %Active Fleet

Average Day Rate $ 71,000 $ 70,000 $ 55,000 $ 65,000 $ 63,000

(1)

Revenues exclusive of amortization and reimbursable items.

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5)

Included in rig operating expense.

(1) Revenues exclusive of amortization and reimbursable items.

(2) Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

Other operating income (expense) includes reimbursable revenue and expense,(3) amortized revenue and expense, bad debt expense, gain or loss on sale of assets and other miscellaneous items.

(4) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(5) Included in rig operating expense.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

ADJUSTED EBITDA

Floaters

Drillships (1)

$

(2.5)

$

16.1

$

5.1

$

68.3

$

(22.9)

Semisubmersibles (1)

6.4

(6.7)

(12.7)

(10.2)

43.6

$

3.9

$

9.4

$

(7.6)

$

58.1

$

20.7

Jackups

HD Ultra-Harsh & Harsh (1)

$

22.2

$

29.3

$

16.5

$

22.5

$

12.7

HD & SD - Modern (1)

2.9

8.3

9.8

16.3

4.8

SD - Legacy (1)

12.0

13.0

7.3

10.2

12.7

$

37.1

$

50.6

$

33.6

$

49.0

$

30.2

Total

$

41.0

$

60.0

$

26.0

$

107.1

$

50.9

Other

Leased and Managed Rigs (1)

22.9

22.7

24.0

25.3

24.6

Total

$

63.9

$

82.7

$

50.0

$

132.4

$

75.5

Support costs

General and administrative expense

$

19.1

$

24.3

$

26.3

$

72.0

$

62.7

Onshore support costs

29.1

32.2

35.6

37.9

41.6

$

48.2

$

56.5

$

61.9

$

109.9

$

104.3

Add (subtract):

Merger transaction and integration cost

0.9

1.9

2.1

50.7

40.2

Valaris Total

$

16.6

$

28.1

$

(9.8)

$

73.2

$

11.4

ARO

Total

27.8

33.4

46.1

40.8

26.4

Valaris 50% Share

13.9

16.7

23.1

20.4

13.2

Adjusted Total (2)

$

30.5

$

44.8

$

13.3

$

93.6

$

24.6

(in millions) Three Months Ended

June 30, March December September June 30, 2021 31, 2021 31, 2020 30, 2020 2020

ADJUSTED EBITDA^

Floaters

Drillships ^(1) $ (2.5) $ 16.1 $ 5.1 $ 68.3 $ (22.9)

Semisubmersibles ^(1) 6.4 (6.7) (12.7) (10.2) 43.6

$ 3.9 $ 9.4 $ (7.6) $ 58.1 $ 20.7



Jackups

HD Ultra-Harsh & $ 22.2 $ 29.3 $ 16.5 $ 22.5 $ 12.7 Harsh ^(1)

HD & SD - Modern ^(1) 2.9 8.3 9.8 16.3 4.8

SD - Legacy ^(1) 12.0 13.0 7.3 10.2 12.7

$ 37.1 $ 50.6 $ 33.6 $ 49.0 $ 30.2



Total $ 41.0 $ 60.0 $ 26.0 $ 107.1 $ 50.9



Other

Leased and Managed 22.9 22.7 24.0 25.3 24.6 Rigs ^(1)



Total $ 63.9 $ 82.7 $ 50.0 $ 132.4 $ 75.5



Support costs

General andadministrative $ 19.1 $ 24.3 $ 26.3 $ 72.0 $ 62.7 expense

Onshore support costs 29.1 32.2 35.6 37.9 41.6

$ 48.2 $ 56.5 $ 61.9 $ 109.9 $ 104.3

Add (subtract):

Merger transaction 0.9 1.9 2.1 50.7 40.2 and integration cost



Valaris Total $ 16.6 $ 28.1 $ (9.8) $ 73.2 $ 11.4



ARO

Total 27.8 33.4 46.1 40.8 26.4

Valaris 50% Share 13.9 16.7 23.1 20.4 13.2



Adjusted Total^ (2) $ 30.5 $ 44.8 $ 13.3 $ 93.6 $ 24.6

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(2) Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

ADJUSTED EBITDARPS

Floaters

Drillships (1)

$

6.4

$

27.4

$

21.4

$

102.2

$

(4.4)

Semisubmersibles (1)

7.9

0.6

(7.9)

(1.4)

47.7

$

14.3

$

28.0

$

13.5

$

100.8

$

43.3

Jackups

HD Ultra-Harsh & Harsh (1)

$

43.6

$

33.8

$

20.8

$

28.5

$

14.5

HD & SD - Modern (1)

12.2

14.0

17.5

24.4

10.0

SD - Legacy (1)

12.0

13.0

7.3

10.2

12.7

$

67.8

$

60.8

$

45.6

$

63.1

$

37.2

Total

$

82.1

$

88.8

$

59.1

$

163.9

$

80.5

Other

Leased and Managed Rigs (1)

22.9

22.7

24.0

25.3

24.6

Total

$

105.0

$

111.5

$

83.1

$

189.2

$

105.1

Support costs

General and administrative expense

$

19.1

$

24.3

$

26.3

$

72.0

$

62.7

Onshore support costs

29.1

32.2

35.6

37.9

41.6

$

48.2

$

56.5

$

61.9

$

109.9

$

104.3

Add (subtract):

Merger transaction and integration cost

0.9

1.9

2.1

50.7

40.2

Valaris Total

$

57.7

$

56.9

$

23.3

$

130.0

$

41.0

ARO

Total

27.8

33.4

46.1

40.8

26.4

Valaris 50% Share

13.9

16.7

23.1

20.4

13.2

Adjusted Total (2)

$

71.6

$

73.6

$

46.4

$

150.4

$

54.2

(in millions) Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

ADJUSTED EBITDARPS

Floaters

Drillships ^(1) $ 6.4 $ 27.4 $ 21.4 $ 102.2 $ (4.4)

Semisubmersibles ^(1) 7.9 0.6 (7.9) (1.4) 47.7

$ 14.3 $ 28.0 $ 13.5 $ 100.8 $ 43.3



Jackups

HD Ultra-Harsh & $ 43.6 $ 33.8 $ 20.8 $ 28.5 $ 14.5 Harsh ^(1)

HD & SD - Modern ^(1) 12.2 14.0 17.5 24.4 10.0

SD - Legacy ^(1) 12.0 13.0 7.3 10.2 12.7

$ 67.8 $ 60.8 $ 45.6 $ 63.1 $ 37.2



Total $ 82.1 $ 88.8 $ 59.1 $ 163.9 $ 80.5



Other

Leased and Managed 22.9 22.7 24.0 25.3 24.6 Rigs ^(1)



Total $ 105.0 $ 111.5 $ 83.1 $ 189.2 $ 105.1



Support costs

General andadministrative $ 19.1 $ 24.3 $ 26.3 $ 72.0 $ 62.7 expense

Onshore support costs 29.1 32.2 35.6 37.9 41.6

$ 48.2 $ 56.5 $ 61.9 $ 109.9 $ 104.3

Add (subtract):

Merger transaction 0.9 1.9 2.1 50.7 40.2 and integration cost



Valaris Total $ 57.7 $ 56.9 $ 23.3 $ 130.0 $ 41.0



ARO

Total 27.8 33.4 46.1 40.8 26.4

Valaris 50% Share 13.9 16.7 23.1 20.4 13.2



Adjusted Total^ (2) $ 71.6 $ 73.6 $ 46.4 $ 150.4 $ 54.2

(1)

EBITDARPS is earnings before interest, tax, depreciation, amortization, reactivation, preservation and stacking costs. Adjusted EBITDARPS for asset category excludes onshore support costs and general and administrative expense.

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

EBITDARPS is earnings before interest, tax, depreciation, amortization,(1) reactivation, preservation and stacking costs. Adjusted EBITDARPS for asset category excludes onshore support costs and general and administrative expense.

(2) Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(in millions)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

ADJUSTED EBITDA

Active Fleet (1)

$

58.1

$

77.7

$

57.5

$

163.0

$

78.6

Leased and Managed Rigs (1)

22.9

22.7

24.0

25.3

24.6

$

81.0

$

100.4

$

81.5

$

188.3

$

103.2

Stacked Fleet (1)

(17.1)

(17.7)

(31.5)

(55.9)

(27.7)

$

63.9

$

82.7

$

50.0

$

132.4

$

75.5

Support costs

General and administrative expense

$

19.1

$

24.3

$

26.3

$

72.0

$

62.7

Onshore support costs

29.1

32.2

35.6

37.9

41.6

$

48.2

$

56.5

$

61.9

$

109.9

$

104.3

Add (subtract):

Merger transaction and integration cost

0.9

1.9

2.1

50.7

40.2

Valaris Total

$

16.6

$

28.1

$

(9.8)

$

73.2

$

11.4

Reactivation costs

24.0

11.1

1.6

0.9

1.9

Adjusted EBITDAR

$

40.6

$

39.2

$

(8.2)

$

74.1

$

13.3

Preservation costs

0.5

1.4

9.5

41.6

15.2

Adjusted EBITDARP

$

41.1

$

40.6

$

1.3

$

115.7

$

28.5

Stacking costs

16.6

16.3

22.0

14.3

12.5

Adjusted EBITDARPS

$

57.7

$

56.9

$

23.3

$

130.0

$

41.0

ARO

Total

27.8

33.4

46.1

40.8

26.4

Valaris 50% Share

13.9

16.7

23.1

20.4

13.2

Adjusted Total (2)

$

71.6

$

73.6

$

46.4

$

150.4

$

54.2

(in millions) Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

ADJUSTED EBITDA^

Active Fleet ^(1) $ 58.1 $ 77.7 $ 57.5 $ 163.0 $ 78.6

Leased and Managed 22.9 22.7 24.0 25.3 24.6 Rigs^ (1)

$ 81.0 $ 100.4 $ 81.5 $ 188.3 $ 103.2



Stacked Fleet ^(1) (17.1) (17.7) (31.5) (55.9) (27.7)

$ 63.9 $ 82.7 $ 50.0 $ 132.4 $ 75.5



Support costs

General andadministrative $ 19.1 $ 24.3 $ 26.3 $ 72.0 $ 62.7 expense

Onshore support costs 29.1 32.2 35.6 37.9 41.6

$ 48.2 $ 56.5 $ 61.9 $ 109.9 $ 104.3

Add (subtract):

Merger transaction 0.9 1.9 2.1 50.7 40.2 and integration cost



Valaris Total $ 16.6 $ 28.1 $ (9.8) $ 73.2 $ 11.4



Reactivation costs 24.0 11.1 1.6 0.9 1.9

Adjusted EBITDAR $ 40.6 $ 39.2 $ (8.2) $ 74.1 $ 13.3



Preservation costs 0.5 1.4 9.5 41.6 15.2

Adjusted EBITDARP $ 41.1 $ 40.6 $ 1.3 $ 115.7 $ 28.5



Stacking costs 16.6 16.3 22.0 14.3 12.5

Adjusted EBITDARPS $ 57.7 $ 56.9 $ 23.3 $ 130.0 $ 41.0



ARO

Total 27.8 33.4 46.1 40.8 26.4

Valaris 50% Share 13.9 16.7 23.1 20.4 13.2



Adjusted Total^ (2) $ 71.6 $ 73.6 $ 46.4 $ 150.4 $ 54.2

(1)

Adjusted EBITDA for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

(1) Adjusted EBITDA for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.

(2) Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO.

ARO DRILLING

CONDENSED BALANCE SHEET INFORMATION

(In millions)

(Unaudited)(3)

ARO DRILLING

CONDENSED BALANCE SHEET INFORMATION

(In millions)

(Unaudited)^(3)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Cash

$

318.2

$

275.4

$

237.7

$

270.5

$

258.8

Other current assets

81.7

89.2

120.9

121.4

90.4

Non-current assets

782.8

789.0

804.0

898.2

924.1

Total assets

$

1,182.7

$

1,153.6

$

1,162.6

$

1,290.1

$

1,273.3

Current liabilities

$

74.9

$

52.3

$

70.8

$

230.8

$

206.8

Non-current liabilities

950.3

952.1

950.8

940.8

973.4

Total liabilities

$

1,025.2

$

1,004.4

$

1,021.6

$

1,171.6

$

1,180.2

Shareholders' Equity

$

157.5

$

149.2

$

141.0

$

118.5

$

93.1

Total liabilities and shareholders' equity

$

1,182.7

$

1,153.6

$

1,162.6

$

1,290.1

$

1,273.3

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

Cash $ 318.2 $ 275.4 $ 237.7 $ 270.5 $ 258.8

Other current 81.7 89.2 120.9 121.4 90.4 assets

Non-current 782.8 789.0 804.0 898.2 924.1 assets

Total assets $ 1,182.7 $ 1,153.6 $ 1,162.6 $ 1,290.1 $ 1,273.3



Current $ 74.9 $ 52.3 $ 70.8 $ 230.8 $ 206.8 liabilities

Non-current 950.3 952.1 950.8 940.8 973.4 liabilities

Total $ 1,025.2 $ 1,004.4 $ 1,021.6 $ 1,171.6 $ 1,180.2 liabilities



Shareholders' $ 157.5 $ 149.2 $ 141.0 $ 118.5 $ 93.1 Equity



Totalliabilitiesand $ 1,182.7 $ 1,153.6 $ 1,162.6 $ 1,290.1 $ 1,273.3 shareholders'equity



ARO DRILLING

CONDENSED INCOME STATEMENT INFORMATION

(In millions)

(Unaudited)

ARO DRILLING

CONDENSED INCOME STATEMENT INFORMATION

(In millions)

(Unaudited)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Revenues

$

124.8

$

122.7

$

117.5

$

145.6

$

146.0

Operating expenses

Contract drilling (exclusive of depreciation)

92.7

86.3

68.4

99.0

112.5

Depreciation

14.6

16.1

13.7

14.8

13.3

General and administrative

4.3

3.0

3.0

5.8

7.1

Operating income

13.2

17.3

32.4

26.0

13.1

Other expense, net

3.1

4.5

6.7

6.7

6.7

Provision for income taxes

1.9

4.5

19.6

(6.1)

(.2)

Net income

$

8.2

$

8.3

$

6.1

$

25.4

$

6.6

EBITDA

$

27.8

$

33.4

$

46.1

$

40.8

$

26.4

Non-GAAP Financial Measures (Unaudited)

To supplement Valaris' condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with adjusted loss per share from continuing operations, adjusted EBITDA and adjusted EBITDARPS, which are non-GAAP measures.

Valaris defines "Adjusted EBITDA" as net loss from continuing operations before income tax expense, interest expense, reorganization items, net, other (income) expense, depreciation expense, amortization, net, loss on impairment, equity in earnings of ARO, (gain) loss on asset disposals, merger transaction and integration costs and lease modification adjustment. 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 "Adjusted EBITDAR" as Adjusted EBITDA before reactivation costs. Adjusted EBITDAR is a non-GAAP measure that our management uses to assess the performance of our fleet excluding one-time rig reactivation costs. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDAR 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 EBITDAR may not be comparable to other similarly titled measures reported by other companies.

Valaris defines "Adjusted EBITDARPS" as Adjusted EBITDA before reactivation, preservation and stacking costs. Adjusted EBITDARPS is a non-GAAP measure that our management uses to assess the performance of our active fleet. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDARPS 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 EBITDARPS may not be comparable to other similarly titled measures reported by other companies.

Valaris defines ARO "EBITDA" as net income before income tax expense, other expense, net and depreciation expense. 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. 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. 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.

Reconciliation of Net Loss to Adjusted EBITDA

A reconciliation of net loss as reported to Adjusted EBITDA for the Two Months Ended June 30, 2021 (Successor), One Month Ended April 30, 2021 (Predecessor) and quarters ended June 30, 2020 is included in the tables below (in millions):

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020

Revenues $ 124.8 $ 122.7 $ 117.5 $ 145.6 $ 146.0

Operating expenses

Contract drilling(exclusive of 92.7 86.3 68.4 99.0 112.5 depreciation)

Depreciation 14.6 16.1 13.7 14.8 13.3

General and 4.3 3.0 3.0 5.8 7.1 administrative

Operating income 13.2 17.3 32.4 26.0 13.1

Other expense, net 3.1 4.5 6.7 6.7 6.7

Provision for income 1.9 4.5 19.6 (6.1) (.2) taxes

Net income $ 8.2 $ 8.3 $ 6.1 $ 25.4 $ 6.6



EBITDA $ 27.8 $ 33.4 $ 46.1 $ 40.8 $ 26.4

Non-GAAP Financial Measures (Unaudited)

To supplement Valaris' condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with adjusted loss per share from continuing operations, adjusted EBITDA and adjusted EBITDARPS, which are non-GAAP measures.

Valaris defines "Adjusted EBITDA" as net loss from continuing operations before income tax expense, interest expense, reorganization items, net, other (income) expense, depreciation expense, amortization, net, loss on impairment, equity in earnings of ARO, (gain) loss on asset disposals, merger transaction and integration costs and lease modification adjustment. 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 "Adjusted EBITDAR" as Adjusted EBITDA before reactivation costs. Adjusted EBITDAR is a non-GAAP measure that our management uses to assess the performance of our fleet excluding one-time rig reactivation costs. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDAR 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 EBITDAR may not be comparable to other similarly titled measures reported by other companies.

Valaris defines "Adjusted EBITDARPS" as Adjusted EBITDA before reactivation, preservation and stacking costs. Adjusted EBITDARPS is a non-GAAP measure that our management uses to assess the performance of our active fleet. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDARPS 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 EBITDARPS may not be comparable to other similarly titled measures reported by other companies.

Valaris defines ARO "EBITDA" as net income before income tax expense, other expense, net and depreciation expense. 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. 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. 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.

Reconciliation of Net Loss to Adjusted EBITDA

A reconciliation of net loss as reported to Adjusted EBITDA for the Two Months Ended June 30, 2021 (Successor), One Month Ended April 30, 2021 (Predecessor) and quarters ended June 30, 2020 is included in the tables below (in millions):

Successor Predecessor

Two Months One Month Three Months Three Ended June 30, Ended April Ended June 30, Months 2021 30, 2021 2020 Ended March 31, 2021



VALARIS

Net loss $ (4.1) $ (3,556.2) $ (3,560.3) $ (907.6)

Add (subtract):

Income tax expense 15.1 (15.5) (0.4) 31.7 (benefit)

Interest expense 8.0 1.1 9.1 1.3

Reorganization 4.1 3,532.4 3,536.5 52.2 items

Other income (13.5) 0.2 (13.3) (23.7)

Operating loss 9.6 (38.0) (28.4) (846.1)

Add (subtract):

Loss on impairment - - - 756.5

Depreciation 16.6 37.5 54.1 122.1 expense

Amortization, net (0.3) (0.2) (0.5) (4.6) ^(1)

Merger transactionand integration 1.0 0.9 1.9 3.5 costs

Equity in(earnings) losses (4.8) (1.2) (6.0) (1.9) of ARO

(Gain) loss on 0.1 (4.6) (4.5) (1.4) asset disposals

Adjusted EBITDA $ 22.2 $ (5.6) $ 16.6 28.1

(1)

Amortization, net, includes amortization during the indicated period for deferred mobilization revenues and costs, deferred capital upgrade revenues, deferred certification costs, intangible amortization and other amortization.

Amortization, net, includes amortization during the indicated period for(1) deferred mobilization revenues and costs, deferred capital upgrade revenues, deferred certification costs, intangible amortization and other amortization.

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

ARO

Net Income

$

8.2

$

8.3

$

6.1

$

25.4

$

6.6

Add (subtract):

Income tax expense (benefit)

1.9

4.5

19.6

(6.1)

(0.2)

Other expense, net

3.1

4.5

6.7

6.7

6.7

Operating income

$

13.2

$

17.3

$

32.4

$

26.0

$

13.1

Add (subtract):

Depreciation expense

14.6

16.1

13.7

14.8

13.3

EBITDA

$

27.8

$

33.4

$

46.1

$

40.8

$

26.4

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 2020 30, 2020 2020



ARO

Net Income $ 8.2 $ 8.3 $ 6.1 $ 25.4 $ 6.6

Add (subtract):

Income tax 1.9 4.5 19.6 (6.1) (0.2) expense (benefit)

Other expense, 3.1 4.5 6.7 6.7 6.7 net

Operating income $ 13.2 $ 17.3 $ 32.4 $ 26.0 $ 13.1



Add (subtract):

Depreciation 14.6 16.1 13.7 14.8 13.3 expense

EBITDA $ 27.8 $ 33.4 $ 46.1 $ 40.8 $ 26.4



Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

DRILLSHIPS

Revenue

$

28.9

$

13.7

$

42.6

$

81.0

$

93.8

$

35.4

476.2

Add (subtract):

Reimbursable revenues

(2.4)

(1.3)

(3.7)

(7.4)

(11.5)

(5.5)

(6.3)

Amortized revenues

-

(0.5)

(0.5)

(7.2)

(11.2)

(1.0)

(0.6)

Adjusted revenues

$

26.5

$

11.9

$

38.4

$

66.4

$

71.1

$

28.9

$

69.3

Operating expenses

39.8

36.2

76.0

113.6

134.4

137.9

175.0

Add (subtract):

Depreciation and amortization, net

(7.2)

(15.3)

(22.5)

(46.6)

(45.5)

(43.3)

(48.6)

Loss on impairment

-

-

-

-

-

-

(13.5)

Gain (loss) on sale of assets

0.1

(0.2)

(0.1)

0.5

-

(0.4)

-

Reimbursable expenses

(2.2)

(1.0)

(3.2)

(5.0)

(9.5)

(4.9)

(5.0)

Support and other costs

(5.5)

(3.1)

(8.6)

(9.7)

(17.4)

(11.7)

(17.3)

Adjusted operating expenses

$

25.0

$

16.6

$

41.6

$

52.8

$

62.0

$

77.6

$

90.6

Operating income (loss)

(10.9)

(22.5)

(33.4)

(32.6)

(40.6)

15.6

(98.8)

Add (subtract):

Depreciation and amortization, net

7.2

14.8

22.0

39.4

34.3

42.3

48.0

Loss on impairment

-

-

-

-

-

-

13.5

Gain (loss) on sale of assets

(0.1)

0.2

0.1

(0.5)

-

0.4

-

Support and other costs

5.7

3.1

8.8

9.8

11.4

10.0

14.4

Adjusted EBITDA (1)

$

1.9

$

(4.4)

$

(2.5)

$

16.1

$

5.1

$

68.3

$

(22.9)

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Months One Month Three(in millions) Ended June Ended April Months March 31, December September June 30, 30, 2021 30, 2021 Ended June 2021 31, 2020 30, 2020 2020 30, 2021

DRILLSHIPS

Revenue $ 28.9 $ 13.7 $ 42.6 $ 81.0 $ 93.8 $ 35.4 476.2

Add (subtract):

Reimbursable (2.4) (1.3) (3.7) (7.4) (11.5) (5.5) (6.3) revenues

Amortized - (0.5) (0.5) (7.2) (11.2) (1.0) (0.6) revenues

Adjusted $ 26.5 $ 11.9 $ 38.4 $ 66.4 $ 71.1 $ 28.9 $ 69.3 revenues



Operating 39.8 36.2 76.0 113.6 134.4 137.9 175.0 expenses

Add (subtract):

Depreciationand (7.2) (15.3) (22.5) (46.6) (45.5) (43.3) (48.6) amortization,net

Loss on - - - - - - (13.5) impairment

Gain (loss)on sale of 0.1 (0.2) (0.1) 0.5 - (0.4) - assets

Reimbursable (2.2) (1.0) (3.2) (5.0) (9.5) (4.9) (5.0) expenses

Support and (5.5) (3.1) (8.6) (9.7) (17.4) (11.7) (17.3) other costs

Adjustedoperating $ 25.0 $ 16.6 $ 41.6 $ 52.8 $ 62.0 $ 77.6 $ 90.6 expenses



Operating (10.9) (22.5) (33.4) (32.6) (40.6) 15.6 (98.8) income (loss)

Add (subtract):

Depreciationand 7.2 14.8 22.0 39.4 34.3 42.3 48.0 amortization,net

Loss on - - - - - - 13.5 impairment

Gain (loss)on sale of (0.1) 0.2 0.1 (0.5) - 0.4 - assets

Support and 5.7 3.1 8.8 9.8 11.4 10.0 14.4 other costs

Adjusted $ 1.9 $ (4.4) $ (2.5) $ 16.1 $ 5.1 $ 68.3 $ (22.9) EBITDA ^(1)

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

SEMISUBMERSIBLES

Revenue

$

20.9

$

4.7

$

25.6

$

16.3

$

11.8

$

21.7

$

87.4

Add (subtract):

Reimbursable revenues

(1.8)

(0.1)

(1.9)

(2.2)

(2.4)

(3.3)

(5.0)

Amortized revenues

-

-

-

-

-

0.5

(4.0)

Adjusted revenues

$

19.1

$

4.6

$

23.7

$

14.1

$

9.4

$

18.9

$

78.4

Operating expenses

21.5

5.9

27.4

797.6

41.8

46.2

889.3

Add (subtract):

Depreciation and amortization, net

(1.9)

(1.6)

(3.5)

(13.0)

(12.7)

(12.8)

(22.7)

Loss on impairment

-

-

-

(756.5)

-

-

(818.2)

Gain (loss) on sale of assets

-

(0.1)

(0.1)

0.2

0.7

7.5

(0.2)

Reimbursable expenses

(1.5)

(0.2)

(1.7)

(2.1)

(2.4)

(2.7)

(4.5)

Support and other costs

(3.0)

(1.7)

(4.7)

(5.3)

(5.6)

(8.1)

(8.4)

Adjusted operating expenses

$

15.1

$

2.3

$

17.4

$

20.9

$

21.8

$

30.1

$

35.3

Operating income (loss)

(0.6)

(1.2)

(1.8)

(781.3)

(30.0)

(24.5)

(801.9)

Add (subtract):

Depreciation and amortization, net

1.9

1.6

3.5

13.0

12.7

13.3

18.7

Loss on impairment

-

-

-

756.5

-

-

818.2

Gain (loss) on sale of assets

-

0.1

0.1

(0.2)

(0.7)

(7.5)

0.2

Support and other costs

2.9

1.7

4.6

5.3

5.3

8.5

8.4

Adjusted EBITDA (1)

$

4.2

$

2.2

$

6.4

$

(6.7)

$

(12.7)

$

(10.2)

$

43.6

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Three Months One Month Months March 31, December September June 30,(in millions) Ended Ended April Ended June 2021 31, 2020 30, 2020 2020 June 30, 30, 2021 30, 2021 2021

SEMISUBMERSIBLES

Revenue $ 20.9 $ 4.7 $ 25.6 $ 16.3 $ 11.8 $ 21.7 $ 87.4

Add (subtract):

Reimbursable (1.8) (0.1) (1.9) (2.2) (2.4) (3.3) (5.0) revenues

Amortized - - - - - 0.5 (4.0) revenues

Adjusted $ 19.1 $ 4.6 $ 23.7 $ 14.1 $ 9.4 $ 18.9 $ 78.4 revenues



Operating 21.5 5.9 27.4 797.6 41.8 46.2 889.3 expenses

Add (subtract):

Depreciation andamortization, (1.9) (1.6) (3.5) (13.0) (12.7) (12.8) (22.7) net

Loss on - - - (756.5) - - (818.2) impairment

Gain (loss) on - (0.1) (0.1) 0.2 0.7 7.5 (0.2) sale of assets

Reimbursable (1.5) (0.2) (1.7) (2.1) (2.4) (2.7) (4.5) expenses

Support and (3.0) (1.7) (4.7) (5.3) (5.6) (8.1) (8.4) other costs

Adjustedoperating $ 15.1 $ 2.3 $ 17.4 $ 20.9 $ 21.8 $ 30.1 $ 35.3 expenses



Operating income (0.6) (1.2) (1.8) (781.3) (30.0) (24.5) (801.9) (loss)

Add (subtract):

Depreciation andamortization, 1.9 1.6 3.5 13.0 12.7 13.3 18.7 net

Loss on - - - 756.5 - - 818.2 impairment

Gain (loss) on - 0.1 0.1 (0.2) (0.7) (7.5) 0.2 sale of assets

Support and 2.9 1.7 4.6 5.3 5.3 8.5 8.4 other costs

Adjusted EBITDA $ 4.2 $ 2.2 $ 6.4 $ (6.7) $ (12.7) $ (10.2) $ 43.6 ^(1)

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

HD ULTRA-HARSH & HARSH JACKUPS

Revenue

$

70.9

$

34.0

$

104.9

$

95.5

$

96.2

$

91.2

$

89.4

Add (subtract):

Reimbursable revenues

(9.1)

(4.2)

(13.3)

(9.7)

(17.3)

(8.1)

(12.0)

Amortized revenues

(0.2)

(1.1)

(1.3)

(3.4)

(2.5)

(2.7)

(3.0)

Adjusted revenues

$

61.6

$

28.7

$

90.3

$

82.4

$

76.4

$

80.4

$

74.4

Operating expenses

59.4

36.8

96.2

96.9

115.1

105.1

114.7

Add (subtract):

Depreciation and amortization

(5.0)

(9.0)

(14.0)

(28.8)

(28.3)

(29.5)

(32.4)

Gain (loss) on sale of assets

(0.3)

5.1

4.8

0.3

0.1

-

0.1

Reimbursable expenses

(6.8)

(3.2)

(10.0)

(7.6)

(15.1)

(6.1)

(10.4)

Support and other costs

(3.7)

(2.0)

(5.7)

(5.6)

(9.6)

(9.5)

(8.8)

Adjusted operating expenses

$

43.6

$

27.7

$

71.3

$

55.2

$

62.2

$

60.0

$

63.2

Operating income (loss)

11.5

(2.8)

8.7

(1.4)

(18.9)

(13.9)

(25.3)

Add (subtract):

Depreciation and amortization, net

4.8

7.9

12.7

25.4

25.8

26.8

29.4

Gain (loss) on sale of assets

0.3

(5.1)

(4.8)

(0.3)

(0.1)

-

(0.1)

Support and other costs

3.6

2.0

5.6

5.6

9.7

9.6

8.7

Adjusted EBITDA (1)

$

20.2

$

2.0

$

22.2

$

29.3

$

16.5

$

22.5

$

12.7

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Three Months One Month Months March 31, December September June 30,(in millions) Ended Ended April Ended June 2021 31, 2020 30, 2020 2020 June 30, 30, 2021 30, 2021 2021

HDULTRA-HARSH &HARSH JACKUPS



Revenue $ 70.9 $ 34.0 $ 104.9 $ 95.5 $ 96.2 $ 91.2 $ 89.4

Add (subtract):

Reimbursable (9.1) (4.2) (13.3) (9.7) (17.3) (8.1) (12.0) revenues

Amortized (0.2) (1.1) (1.3) (3.4) (2.5) (2.7) (3.0) revenues

Adjusted $ 61.6 $ 28.7 $ 90.3 $ 82.4 $ 76.4 $ 80.4 $ 74.4 revenues



Operating 59.4 36.8 96.2 96.9 115.1 105.1 114.7 expenses

Add (subtract):

Depreciationand (5.0) (9.0) (14.0) (28.8) (28.3) (29.5) (32.4) amortization

Gain (loss)on sale of (0.3) 5.1 4.8 0.3 0.1 - 0.1 assets

Reimbursable (6.8) (3.2) (10.0) (7.6) (15.1) (6.1) (10.4) expenses

Support and (3.7) (2.0) (5.7) (5.6) (9.6) (9.5) (8.8) other costs

Adjustedoperating $ 43.6 $ 27.7 $ 71.3 $ 55.2 $ 62.2 $ 60.0 $ 63.2 expenses



Operating 11.5 (2.8) 8.7 (1.4) (18.9) (13.9) (25.3) income (loss)

Add (subtract):

Depreciationand 4.8 7.9 12.7 25.4 25.8 26.8 29.4 amortization,net

Gain (loss)on sale of 0.3 (5.1) (4.8) (0.3) (0.1) - (0.1) assets

Support and 3.6 2.0 5.6 5.6 9.7 9.6 8.7 other costs

Adjusted $ 20.2 $ 2.0 $ 22.2 $ 29.3 $ 16.5 $ 22.5 $ 12.7 EBITDA ^(1)

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

HD & SD MODERN JACKUPS

Revenue

$

40.7

$

17.0

$

57.7

$

50.5

$

61.2

$

67.8

$

63.5

Add (subtract):

Reimbursable revenues

(3.5)

(2.3)

(5.8)

(4.2)

(7.8)

(5.3)

(5.2)

Amortized revenues

(1.6)

(0.5)

(2.1)

(1.6)

(1.8)

(2.1)

(2.1)

Adjusted revenues

$

35.6

$

14.2

$

49.8

$

44.7

$

51.6

$

60.4

$

56.2

Operating expenses

41.3

28.0

69.3

71.9

83.2

83.2

91.1

Add (subtract):

Depreciation and amortization

(2.2)

(8.1)

(10.3)

(24.5)

(25.7)

(26.7)

(25.6)

Loss on impairment

-

-

-

-

-

-

(0.5)

Gain (loss) on sale of assets

-

(0.1)

(0.1)

0.3

0.5

1.2

0.1

Reimbursable expenses

(2.2)

(1.2)

(3.4)

(1.8)

(4.8)

(3.1)

(2.7)

Support and other costs

(4.1)

(2.2)

(6.3)

(7.1)

(8.1)

(8.2)

(7.6)

Adjusted operating expenses

$

32.8

$

16.4

$

49.2

$

38.8

$

45.1

$

46.4

$

54.8

Operating income (loss)

(0.6)

(11.0)

(11.6)

(21.4)

(22.0)

(15.4)

(27.6)

Add (subtract):

Depreciation and amortization, net

0.6

7.6

8.2

22.9

23.9

24.6

23.5

Loss on impairment

-

-

-

-

-

-

0.5

Gain (loss) on sale of assets

-

0.1

0.1

(0.3)

(0.5)

(1.2)

(0.1)

Support and other costs

4.0

2.2

6.2

7.1

8.4

8.3

8.5

Adjusted EBITDA (1)

$

4.0

$

(1.1)

$

2.9

$

8.3

$

9.8

$

16.3

$

4.8

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Three Months One Month Months March 31, December September June 30,(in millions) Ended Ended April Ended June 2021 31, 2020 30, 2020 2020 June 30, 30, 2021 30, 2021 2021

HD & SDMODERN JACKUPS

Revenue $ 40.7 $ 17.0 $ 57.7 $ 50.5 $ 61.2 $ 67.8 $ 63.5

Add (subtract):

Reimbursable (3.5) (2.3) (5.8) (4.2) (7.8) (5.3) (5.2) revenues

Amortized (1.6) (0.5) (2.1) (1.6) (1.8) (2.1) (2.1) revenues

Adjusted $ 35.6 $ 14.2 $ 49.8 $ 44.7 $ 51.6 $ 60.4 $ 56.2 revenues



Operating 41.3 28.0 69.3 71.9 83.2 83.2 91.1 expenses

Add (subtract):

Depreciationand (2.2) (8.1) (10.3) (24.5) (25.7) (26.7) (25.6) amortization

Loss on - - - - - - (0.5) impairment

Gain (loss)on sale of - (0.1) (0.1) 0.3 0.5 1.2 0.1 assets

Reimbursable (2.2) (1.2) (3.4) (1.8) (4.8) (3.1) (2.7) expenses

Support and (4.1) (2.2) (6.3) (7.1) (8.1) (8.2) (7.6) other costs

Adjustedoperating $ 32.8 $ 16.4 $ 49.2 $ 38.8 $ 45.1 $ 46.4 $ 54.8 expenses



Operating (0.6) (11.0) (11.6) (21.4) (22.0) (15.4) (27.6) income (loss)

Add (subtract):

Depreciationand 0.6 7.6 8.2 22.9 23.9 24.6 23.5 amortization,net

Loss on - - - - - - 0.5 impairment

Gain (loss)on sale of - 0.1 0.1 (0.3) (0.5) (1.2) (0.1) assets

Support and 4.0 2.2 6.2 7.1 8.4 8.3 8.5 other costs

Adjusted $ 4.0 $ (1.1) $ 2.9 $ 8.3 $ 9.8 $ 16.3 $ 4.8 EBITDA ^(1)

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

SD LEGACY JACKUPS

Revenue

$

16.8

$

8.8

$

25.6

$

26.6

$

22.0

$

27.8

$

33.3

Add (subtract):

Reimbursable revenues

(1.4)

(0.5)

(1.9)

(1.5)

(1.9)

(1.3)

(0.7)

Amortized revenues

-

(0.2)

(0.2)

(0.5)

(0.7)

(1.0)

(1.1)

Adjusted revenues

$

15.4

$

8.1

$

23.5

$

24.6

$

19.4

$

25.5

$

31.5

Operating expenses

11.5

6.1

17.6

18.7

18.8

24.6

30.0

Add (subtract):

Depreciation and amortization, net

(0.7)

(1.0)

(1.7)

(2.9)

(3.3)

(4.2)

(4.9)

Gain (loss) on sale of assets

-

-

-

0.1

1.9

-

(0.9)

Reimbursable expenses

(1.2)

(0.4)

(1.6)

(1.0)

(1.7)

(0.7)

(0.8)

Support and other costs

(1.7)

(0.8)

(2.5)

(2.8)

(3.4)

(3.8)

(5.2)

Adjusted operating expenses

$

7.9

$

3.9

$

11.8

$

12.1

$

12.3

$

15.9

$

18.2

Operating income (loss)

5.3

2.7

8.0

7.9

3.2

3.2

3.3

Add (subtract):

Depreciation and amortization, net

0.7

0.8

1.5

2.4

2.6

3.2

3.8

Gain (loss) on sale of assets

-

-

-

(0.1)

(1.9)

-

0.9

Support and other costs

1.7

0.8

2.5

2.8

3.4

3.8

4.7

Adjusted EBITDA (1)

$

7.7

$

4.3

$

12.0

$

13.0

$

7.3

$

10.2

$

12.7

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Three Months One Month Months March 31, December September June 30,(in millions) Ended Ended April Ended June 2021 31, 2020 30, 2020 2020 June 30, 30, 2021 30, 2021 2021

SD LEGACY JACKUPS

Revenue $ 16.8 $ 8.8 $ 25.6 $ 26.6 $ 22.0 $ 27.8 $ 33.3

Add (subtract):

Reimbursable (1.4) (0.5) (1.9) (1.5) (1.9) (1.3) (0.7) revenues

Amortized - (0.2) (0.2) (0.5) (0.7) (1.0) (1.1) revenues

Adjusted $ 15.4 $ 8.1 $ 23.5 $ 24.6 $ 19.4 $ 25.5 $ 31.5 revenues



Operating 11.5 6.1 17.6 18.7 18.8 24.6 30.0 expenses

Add (subtract):

Depreciationand (0.7) (1.0) (1.7) (2.9) (3.3) (4.2) (4.9) amortization,net

Gain (loss)on sale of - - - 0.1 1.9 - (0.9) assets

Reimbursable (1.2) (0.4) (1.6) (1.0) (1.7) (0.7) (0.8) expenses

Support and (1.7) (0.8) (2.5) (2.8) (3.4) (3.8) (5.2) other costs

Adjustedoperating $ 7.9 $ 3.9 $ 11.8 $ 12.1 $ 12.3 $ 15.9 $ 18.2 expenses



Operating 5.3 2.7 8.0 7.9 3.2 3.2 3.3 income (loss)

Add (subtract):

Depreciationand 0.7 0.8 1.5 2.4 2.6 3.2 3.8 amortization,net

Gain (loss)on sale of - - - (0.1) (1.9) - 0.9 assets

Support and 1.7 0.8 2.5 2.8 3.4 3.8 4.7 other costs

Adjusted $ 7.7 $ 4.3 $ 12.0 $ 13.0 $ 7.3 $ 10.2 $ 12.7 EBITDA ^(1)

(1)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

(1) Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

Three Months Ended

Successor

Predecessor

Combined (Non-GAAP)

Predecessor

(in millions)

Two Months Ended June 30, 2021

One Month Ended April 30, 2021

Three Months Ended June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

ACTIVE FLEET

Operating income (loss)

$

20.3

$

(21.2)

$

(0.9)

$

(432.7)

$

(33.5)

$

55.9

$

(450.9)

Add (subtract):

Depreciation and amortization, net

11.9

19.0

30.9

62.0

56.0

67.5

70.3

Loss on impairment

-

-

-

419.2

-

-

413.9

Gain (loss) on sale of assets

(0.1)

0.5

0.4

(1.4)

(3.2)

(0.6)

0.6

Support and other costs

17.9

9.8

27.7

30.6

38.2

40.2

44.7

Adjusted EBITDA (1)

$

50.0

$

8.1

$

58.1

$

77.7

$

57.5

$

163.0

$

78.6

LEASED AND MANAGED RIGS

Operating income (loss)

13.0

2.6

15.6

7.7

(19.9)

10.7

4.3

Add (subtract):

Depreciation and amortization, net

0.9

3.9

4.8

12.3

12.3

12.2

12.4

Loss on impairment

-

-

-

-

-

-

5.7

Gain (loss) on sale of assets

-

-

-

(0.1)

-

-

-

Support and other costs

1.7

0.8

2.5

2.8

31.6

2.4

2.2

Adjusted EBITDA (1)

$

15.6

$

7.3

$

22.9

$

22.7

$

24.0

$

25.3

$

24.6

STACKED FLEET

Operating income (loss)

(15.6)

(13.6)

(29.2)

(396.1)

(74.8)

(90.9)

(499.4)

Add (subtract):

Depreciation and amortization, net

3.3

13.7

17.0

41.1

43.3

42.7

53.1

Loss on impairment

-

-

-

337.3

-

-

418.3

Gain (loss) on sale of assets

0.3

(5.2)

(4.9)

-

-

(7.7)

0.3

Support and other costs

-

-

-

-

-

-

-

Adjusted EBITDA (1)

$

(12.0)

$

(5.1)

$

(17.1)

$

(17.7)

$

(31.5)

$

(55.9)

$

(27.7)

VALARIS TOTAL

Operating income (loss)

17.7

(32.2)

(14.5)

(821.1)

(128.2)

(24.3)

(946.0)

Add (subtract):

Depreciation and amortization, net

16.1

36.6

52.7

115.4

111.6

122.4

135.8

Loss on impairment

-

-

-

756.5

-

-

837.9

Gain (loss) on sale of assets

0.2

(4.7)

(4.5)

(1.5)

(3.2)

(8.3)

0.9

Support and other costs

19.6

10.6

30.2

33.4

69.8

42.6

46.9

Adjusted EBITDA (1)

$

53.6

$

10.3

$

63.9

$

82.7

$

50.0

$

132.4

$

75.5

Three Months Ended

Successor Predecessor Combined Predecessor (Non-GAAP)

Two Months One Month Three(in millions) Ended June Ended April Months March 31, December September June 30, 30, 2021 30, 2021 Ended June 2021 31, 2020 30, 2020 2020 30, 2021

ACTIVE FLEET

Operating $ 20.3 $ (21.2) $ (0.9) $ (432.7) $ (33.5) $ 55.9 $ (450.9) income (loss)

Add (subtract):

Depreciationand 11.9 19.0 30.9 62.0 56.0 67.5 70.3 amortization,net

Loss on - - - 419.2 - - 413.9 impairment

Gain (loss)on sale of (0.1) 0.5 0.4 (1.4) (3.2) (0.6) 0.6 assets

Support and 17.9 9.8 27.7 30.6 38.2 40.2 44.7 other costs

Adjusted $ 50.0 $ 8.1 $ 58.1 $ 77.7 $ 57.5 $ 163.0 $ 78.6 EBITDA ^(1)



LEASED AND MANAGED RIGS

Operating 13.0 2.6 15.6 7.7 (19.9) 10.7 4.3 income (loss)

Add (subtract):

Depreciationand 0.9 3.9 4.8 12.3 12.3 12.2 12.4 amortization,net

Loss on - - - - - - 5.7 impairment

Gain (loss)on sale of - - - (0.1) - - - assets

Support and 1.7 0.8 2.5 2.8 31.6 2.4 2.2 other costs

Adjusted $ 15.6 $ 7.3 $ 22.9 $ 22.7 $ 24.0 $ 25.3 $ 24.6 EBITDA ^(1)



STACKED FLEET

Operating (15.6) (13.6) (29.2) (396.1) (74.8) (90.9) (499.4) income (loss)

Add (subtract):

Depreciationand 3.3 13.7 17.0 41.1 43.3 42.7 53.1 amortization,net

Loss on - - - 337.3 - - 418.3 impairment

Gain (loss)on sale of 0.3 (5.2) (4.9) - - (7.7) 0.3 assets

Support and - - - - - - - other costs

Adjusted $ (12.0) $ (5.1) $ (17.1) $ (17.7) $ (31.5) $ (55.9) $ (27.7) EBITDA ^(1)



VALARIS TOTAL

Operating 17.7 (32.2) (14.5) (821.1) (128.2) (24.3) (946.0) income (loss)

Add (subtract):

Depreciationand 16.1 36.6 52.7 115.4 111.6 122.4 135.8 amortization,net

Loss on - - - 756.5 - - 837.9 impairment

Gain (loss)on sale of 0.2 (4.7) (4.5) (1.5) (3.2) (8.3) 0.9 assets

Support and 19.6 10.6 30.2 33.4 69.8 42.6 46.9 other costs

Adjusted $ 53.6 $ 10.3 $ 63.9 $ 82.7 $ 50.0 $ 132.4 $ 75.5 EBITDA ^(1)

(1)

Adjusted EBITDA for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.

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