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Equity Method Investment In ARO (Tables)
 9 Months Ended
Sep. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments
Summarized financial information for ARO is as follows (in millions):
Three Months Ended September 30, 2019April 11 - September 30, 2019
Revenues$138.4  $262.2  
Operating expenses
Contract drilling (exclusive of depreciation)92.7  171.7  
Depreciation14.6  26.9  
General and administrative8.8  13.9  
Operating income22.3  49.7  
Other expense, net9.9  18.8  
Provision for income taxes2.2  3.8  
Net income$10.2  $27.1  

September 30, 2019
Current assets$452.8  
Non-current assets887.1  
Total assets$1,339.9  
Current liabilities$232.4  
Non-current liabilities1,021.7  
Total liabilities$1,254.1  
Equity in Earnings of ARO
As a result of the Rowan Transaction, we recorded our equity method investment in ARO at its estimated fair value on the Transaction Date. Additionally, we computed the difference between the fair value of ARO's net assets and the carrying value of those net assets in ARO's GAAP financial statements ("basis differences"). The basis differences primarily relate to ARO's long-lived assets and the recognition of intangible assets associated with certain of ARO's drilling contracts that were determined to have favorable terms as of the Transaction Date. The basis differences are amortized over the remaining life of the assets or liabilities to which they relate and are recognized as an adjustment to the equity in earnings of ARO in our condensed consolidated statements of operations. The amortization of those basis differences are combined with our 50% interest in ARO's net income. A reconciliation of those components is presented below (in millions):
Three Months Ended September 30, 2019  April 11 - September 30, 2019  
50% interest in ARO net income$5.1  $13.6  
Amortization of basis differences(8.8) (16.7) 
Equity in earnings of ARO$(3.7) $(3.1) 
Equity Method Investments
The following summarizes the total assets and liabilities as reflected in our condensed consolidated balance sheet as well as our maximum exposure to loss related to ARO (in millions). Generally, our maximum exposure to loss is limited to (1) our equity investment in ARO; (2) the outstanding balance on our shareholder notes receivable; and (3) other receivables for services provided to ARO, partially offset by payables for services received.
September 30, 2019
Total assets$663.3  
Less: total liabilities3.0  
Maximum exposure to loss$660.3  
Schedule of Notes Receivable
The following table summarizes the maturity schedule of our notes receivable from ARO as of September 30, 2019 (in millions):


Maturity Date		Principal Amount
October 2027$275.2  
October 2028177.7  
Total$452.9  
Schedule of Related Party Transactions
Revenues recognized by us related to the Lease Agreements, Transition Services Agreement and Secondment Agreement are as follows (in millions):
Three Months Ended September 30, 2019April 11 - September 30, 2019
Lease revenue $19.9  $37.0  
Secondment revenue17.9  33.5  
Transition Services revenue5.0  10.2  
Total revenue from ARO (1)
$42.8  $80.7  
(1)All of the revenues presented above are included in our Other segment in our segment disclosures. See Note 15 for additional information.