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Equity Method Investment In ARO (Tables)

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

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

						Three Months Ended
						March 31, 2022						March 31, 2021
Revenues						$	111.3					$	122.7
Operating expenses
Contract drilling (exclusive of depreciation)						84.2						86.3
Depreciation						16.5						16.1
General and administrative						5.2						3.0
Operating income						5.4						17.3
Other expense, net						3.3						4.5
Provision for income taxes						0.7						4.5
Net income						$	1.4					$	8.3

						March 31, 2022						December 31, 2021
Cash and cash equivalents						$	240.2					$	270.8
Other current assets						179.5						135.0
Non-current assets						775.8						775.8
Total assets						$	1,195.5					$	1,181.6
Current liabilities						$	92.9					$	79.9
Non-current liabilities						957.9						956.7
Total liabilities						$	1,050.8					$	1,036.6

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

			Successor															Predecessor
			Three Months Ended March 31, 2022															Three Months Ended March 31, 2021
50% interest in ARO net income			$	0.7														$	4.1
Amortization of basis differences			3.6															(2.2)
Equity in earnings of ARO			$	4.3														$	1.9

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 from ARO, partially offset by contract liabilities as well as payables to ARO.

			March 31, 2022						December 31, 2021
Total assets			$	362.9					$	348.1
Less: total liabilities			51.0						49.1
Maximum exposure to loss			$	311.9					$	299.0

Schedule of Related Party Transactions

Revenues recognized by us related to the Lease Agreements are as follows (in millions):

			Successor															Predecessor
			Three Months Ended March 31, 2022															Three Months Ended March 31, 2021
Lease revenue			$	14.2														$	16.6

(1)    Revenues presented above are included in our Other segment in our segment disclosures. See "Note 12 - Segment Information" for additional information.

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- Definition

Tabular disclosure of equity method investments including, but not limited to, name of each investee or group of investments, percentage ownership, difference between recorded amount of an investment and the value of the underlying equity in the net assets, and summarized financial information.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

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Tabular disclosure of related party transactions. Examples of related party transactions include, but are not limited to, transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners and (d) affiliates.

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