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Equity Method Investment In ARO (Tables)
 9 Months Ended
Sep. 30, 2023
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,Nine Months Ended September 30,
2023202220232022
Revenues$121.5 $111.4 $362.9 $339.1 
Operating expenses
Contract drilling (exclusive of depreciation)92.0 90.0 277.9 256.3 
Depreciation15.8 15.4 46.4 47.3 
General and administrative5.6 4.7 15.9 13.1 
Operating income8.1 1.3 22.7 22.4 
Other expense, net9.0 2.7 28.2 9.3 
Provision (benefit) for income taxes0.4 (0.1)2.3 3.1 
Net income (loss)$(1.3)$(1.3)$(7.8)$10.0 

September 30, 2023December 31, 2022
Cash and cash equivalents$110.3 $176.2 
Other current assets191.2 140.6 
Non-current assets915.3 818.1 
Total assets$1,216.8 $1,134.9 
Current liabilities$173.6 $86.3 
Non-current liabilities886.2 884.6 
Total liabilities$1,059.8 $970.9 
A reconciliation of those components is presented below (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
50% interest in ARO net income (loss)$(0.6)$(0.7)$(3.9)$5.0 
Amortization of basis differences3.0 3.6 8.9 10.9 
Equity in earnings of ARO$2.4 $2.9 $5.0 $15.9 
Schedule of Related Party Transactions
Our balances related to the ARO lease agreements were as follows (in millions):

September 30, 2023December 31, 2022
Amounts receivable (1)
$17.6 $12.0 
Contract liabilities(2)
$13.1 $16.7 
Accounts payable(2)
$54.9 $43.2 

(1)Amounts receivable from ARO is included in Accounts receivable, net in our Condensed Consolidated Balance Sheets.
(2)The per day bareboat charter amount in the Lease Agreements is subject to adjustment based on actual performance of the respective rig and as such contract liabilities related to the Lease Agreements are subject to adjustment during the lease term. Upon completion of the lease term, such amount becomes a payable to or a receivable from ARO.
The principal amount and discount of the Notes Receivable from ARO were as follows (in millions):

September 30, 2023December 31, 2022
Principal amount$402.7 $402.7 
Discount(127.5)(148.7)
Carrying value$275.2 $254.0 
Interest receivable(1)(2)
$22.8 $— 

(1)Our interest receivable from ARO is included in Accounts receivable, net in our Condensed Consolidated Balance Sheets.
(2)We collected our 2022 interest on the Notes Receivable from ARO in cash prior to December 31, 2022, and as such, there was no interest receivable from ARO as of December 31, 2022.
Interest income earned on the Notes Receivable from ARO was as follows (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Interest income$7.7 $2.8 $22.8 $8.6 
Non-cash amortization (1)(2)
7.2 22.4 21.2 37.8 
Total interest income on the Notes Receivable from ARO$14.9 $25.2 $44.0 $46.4 

(1)Represents the amortization of the discount on the Notes Receivable from ARO using the effective interest method to interest income over the term of the notes.
(2)We recognized non-cash interest income of $14.8 million in the third quarter of 2022 attributable to a $40.0 million early principal repayment of the Notes Receivable from ARO received in September 2022.