Equity Method Investment in ARO (Tables)

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

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


	Year Ended December 31, 2021		Year Ended December 31, 2020		April 11, 2019 - December 31, 2019
Revenues	$	470.6	$	549.4	$	410.5
Operating expenses
Contract drilling (exclusive of depreciation)	362.3		388.2		280.2
Depreciation	65.2		54.8		40.3
General and administrative	17.8		24.2		27.1
Operating income	25.3		82.2		62.9
Other expense, net	13.4		26.7		28.6
Provision for income taxes	7.9		14.2		9.7
Net income	$	4.0	$	41.3	$	24.6


	December 31, 2021		December 31, 2020
Cash and cash equivalents	$	270.8	$	237.7
Other current assets	135.0		120.9
Non-current assets	775.8		804.0
Total assets	$	1,181.6	$	1,162.6

Current liabilities	$	79.9	$	70.8
Non-current liabilities	956.7		950.8
Total liabilities	$	1,036.6	$	1,021.6

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


	Successor		Predecessor
	Eight Months Ended December 31, 2021		Four Months Ended April 30, 2021		Year Ended December 31, 2020		April 11, 2019 - December 31, 2019
50% interest in ARO net income (loss)	$	(4.0)	$	6.0	$	20.7	$	12.3
Amortization of basis differences	10.1		(2.9)		(28.5)		(24.9)
Equity in earnings (losses) of ARO	$	6.1	$	3.1	$	(7.8)	$	(12.6)

The following table summarizes the total assets and liabilities as reflected in our 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 from ARO, partially offset by contract liabilities as well as payables to ARO.


	Successor		Predecessor
	December 31, 2021		December 31, 2020
Total assets	$	348.1	$	585.2
Less: total liabilities	49.1		30.9
Maximum exposure to loss	$	299.0	$	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
	Eight Months Ended December 31, 2021		Four Months Ended April 30, 2021		Year Ended December 31, 2020		April 11, 2019 - December 31, 2019
Lease revenue	$	35.4	$	21.7	$	52.2	$	58.2
Secondment revenue	1.5		1.1		21.6		49.9
Transition Services revenue	—		—		1.3		17.3
Total revenue from ARO (1)	$	36.9	$	22.8	$	75.1	$	125.4

(1) All of the revenues presented above are included in our Other segment in our segment disclosures. See "Note 1 7- Segment Information" for additional information.