Equity Method Investment In ARO (Tables)

3 Months Ended

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

A reconciliation of those components is presented below (in millions):


	Successor		Predecessor
	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020
50% interest in ARO net income	$	(1.3)	$	12.7
Amortization of basis differences	3.9		(8.8)
Equity in earnings of ARO	$	2.6	$	3.9


	Successor		Predecessor
	Five Months Ended September 30, 2021		Four Months Ended April 30, 2021		Nine Months Ended September 30, 2020
50% interest in ARO net income	$	1.0	$	6.0	$	17.6
Amortization of basis differences	6.4		(2.9)		(25.2)
Equity in earnings (losses) of ARO	$	7.4	$	3.1	$	(7.6)

Summarized financial information for ARO is as follows (in millions):


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Revenues	$	117.7	$	145.6	$	365.2	$	431.9
Operating expenses
Contract drilling (exclusive of depreciation)	94.4		99.0		273.4		319.8
Depreciation	16.8		14.8		47.5		41.1
General and administrative	5.4		5.8		12.7		21.2
Operating income	1.1		26.0		31.6		49.8
Other expense, net	3.4		6.7		11.0		20.0
Provision (benefit) for income taxes	.2		(6.1)		6.6		(5.4)
Net income (loss)	$	(2.5)	$	25.4	$	14.0	$	35.2


	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	309.0	$	237.7
Other current assets	98.0		120.9
Non-current assets	776.1		804.0
Total assets	$	1,183.1	$	1,162.6

Current liabilities	$	77.1	$	70.8
Non-current liabilities	951.0		950.8
Total liabilities	$	1,028.1	$	1,021.6

The following table summarizes the total assets and liabilities as reflected in our Condensed Consolidated Balance Sheets as well as our maximum exposure to loss related to ARO (in millions). Our maximum exposure to loss is limited to (1) our equity investment in ARO; (2) the carrying amount of our shareholder notes receivable; and (3) other receivables and contract assets related to services provided to ARO, partially offset by contract liabilities as well as payables for services received.


	Successor		Predecessor
	September 30, 2021		December 31, 2020
Total assets	$	343.9	$	585.2
Less: total liabilities	43.3		30.9
Maximum exposure to loss	$	300.6	$	554.3

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):


	Successor		Predecessor
	Three Months Ended September 30, 2021		Three Months Ended September 30, 2020
Lease revenue	$	14.2	$	21.0
Secondment and Transition Services revenue	.5		1.0

Total revenue from ARO (1)	$	14.7	$	22.0


	Successor		Predecessor
	Five Months Ended September 30, 2021		Four Months Ended April 30, 2021		Nine Months Ended September 30, 2020
Lease revenue	$	24.5	$	21.7	$	62.4
Secondment and Transition Services revenue	.9		1.1		23.0

Total revenue from ARO (1)	$	25.4	$	22.8	$	85.4

(1) All of the revenues presented above are included in our Other segment in our segment disclosures. See "Note 15 - Segment Information" for additional information.