XML 46 R32.htm IDEA: XBRL DOCUMENT
v3.22.4

Equity Method Investment in ARO (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments | Summarized financial information for ARO is as follows (in millions):
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | Year Ended December 31, 2020
Revenues | $ | 459.5 |  | $ | 470.6 |  | $ | 549.4 |
Operating expenses |  |  |
Contract drilling (exclusive of depreciation) | 341.8 |  | 362.3 |  | 388.2 |
Depreciation | 63.4 |  | 65.2 |  | 54.8 |
General and administrative | 18.7 |  | 17.8 |  | 24.2 |
Operating income | 35.6 |  | 25.3 |  | 82.2 |
Other expense, net | 11.1 |  | 13.4 |  | 26.7 |
Provision for income taxes | 3.8 |  | 7.9 |  | 14.2 |
Net income | $ | 20.7 |  | $ | 4.0 |  | $ | 41.3 |
| December 31, 2022 | December 31, 2021 |
Cash and cash equivalents | $ | 176.2 |  | $ | 270.8 |  |
Other current assets | 140.6 |  | 135.0 |  |
Non-current assets | 818.1 |  | 775.8 |  |
Total assets | $ | 1,134.9 |  | $ | 1,181.6 |  |
Current liabilities | $ | 86.3 |  | $ | 79.9 |  |
Non-current liabilities | 884.6 |  | 956.7 |  |
Total liabilities | $ | 970.9 |  | $ | 1,036.6 |  |
A reconciliation of those components is presented below (in millions):
| Successor |  |  | Predecessor
| Year Ended December 31, 2022 |  | Eight Months Ended December 31, 2021 |  |  | Four Months Ended April 30, 2021 |  | Year Ended December 31, 2020
50% interest in ARO net income (loss) | $ | 10.4 |  |  | $ | (4.0) |  |  |  | $ | 6.0 |  |  | $ | 20.7 |
Amortization of basis differences | 14.1 |  |  | 10.1 |  |  |  | (2.9) |  |  | (28.5) |
Equity in earnings (losses) of ARO | $ | 24.5 |  |  | $ | 6.1 |  |  |  | $ | 3.1 |  |  | $ | (7.8) |
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 Notes Receivable from ARO; and (3) other receivables and contract assets from ARO, partially offset by contract liabilities as well as payables to ARO.
| December 31, 2022 |  | December 31, 2021 |
Total assets | $ | 377.8 |  |  | $ | 348.1 |  |
Less: total liabilities | 59.9 |  |  | 49.1 |  |
Maximum exposure to loss | $ | 317.9 |  |  | $ | 299.0 |  |
Schedule of Related Party Transactions | Revenues recognized by us related to the Lease Agreements and Secondment Agreement are as follows (in millions):
| Successor |  |  | Predecessor
| Year Ended December 31, 2022 |  | Eight Months Ended December 31, 2021 |  |  | Four Months Ended April 30, 2021 |  | Year Ended December 31, 2020
Lease revenue | $ | 56.7 |  |  | $ | 35.4 |  |  |  | $ | 21.7 |  |  | $ | 52.2 |
Secondment revenue | 2.0 |  |  | 1.5 |  |  |  | 1.1 |  |  | 21.6 |
Total revenue from ARO (1) | $ | 58.7 |  |  | $ | 36.9 |  |  |  | $ | 22.8 |  |  | $ | 73.8 |
(1) All of the revenues presented above are included in our Other segment in our segment disclosures. See "Note 16- Segment Information" for additional information. The principal amount and discount of the Notes Receivable from ARO were as follows (in millions):
| December 31, 2022 |  | December 31, 2021 |  |  |
Principal amount | $ | 402.7 |  |  | $ | 442.7 |  |  |  |
Discount | (148.7) |  |  | (193.6) |  |  |  |
Carrying value | $ | 254.0 |  |  | $ | 249.1 |  |  |  |
We collected our 2022 and 2021 interest on the Notes Receivable from ARO from ARO in cash prior to December 31, 2022 and 2021, respectively, and as such, there was no interest receivable for the Notes Receivable from ARO as of December 31, 2022 and 2021. Interest income earned on the Notes Receivable from ARO was as follows (in millions):
| Successor |  |  | Predecessor
| Year Ended December 31, 2022 |  | Eight Months Ended December 31, 2021 |  |  | Four Months Ended April 30, 2021 |  | Year Ended December 31, 2020
Interest income | $ | 11.3 |  |  | $ | 7.0 |  |  |  | $ | 3.5 |  |  | $ | 18.3 |
Non-cash amortization | 44.9 |  |  | 20.8 |  |  |  | — |  |  | — |
Total interest income on the Notes Receivable from ARO | $ | 56.2 |  |  | $ | 27.8 |  |  |  | $ | 3.5 |  |  | $ | 18.3 |

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571 + Details
Name: | us-gaap_EquityMethodInvestmentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References No definition available. + Details
Name: | us-gaap_ScheduleOfRelatedPartyTransactionsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration