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Equity Method Investment in ARO (Tables) | 12 Months Ended
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Dec. 31, 2023
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments | Summarized financial information for ARO is as follows (in millions):
| Year Ended December 31, 2023 |  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021
Revenues | $ | 496.6 |  |  | $ | 459.5 |  |  | $ | 470.6 |
Operating expenses |  |  |  |  |
Contract drilling (exclusive of depreciation) | 365.9 |  |  | 341.8 |  |  | 362.3 |
Depreciation | 65.9 |  |  | 63.4 |  |  | 65.2 |
General and administrative | 22.2 |  |  | 18.7 |  |  | 17.8 |
Operating income | 42.6 |  |  | 35.6 |  |  | 25.3 |
Other expense, net | 31.8 |  |  | 11.1 |  |  | 13.4 |
Provision for income taxes | 8.3 |  |  | 3.8 |  |  | 7.9 |
Net income | $ | 2.5 |  |  | $ | 20.7 |  |  | $ | 4.0 |
| December 31, 2023 |  | December 31, 2022
Cash and cash equivalents | $ | 92.9 |  |  | $ | 176.2 |
Other current assets | 184.0 |  |  | 140.6 |
Non-current assets | 1,081.0 |  |  | 818.1 |
Total assets | $ | 1,357.9 |  |  | $ | 1,134.9 |
Current liabilities | $ | 136.0 |  |  | $ | 86.3 |
Non-current liabilities | 1,056.8 |  |  | 884.6 |
Total liabilities | $ | 1,192.8 |  |  | $ | 970.9 |
A reconciliation of those components is presented below (in millions):
| Successor |  |  | Predecessor
| Year Ended December 31, 2023 |  | Year Ended December 31, 2022 |  | Eight Months Ended December 31, 2021 |  |  | Four Months Ended April 30, 2021
50% interest in ARO net income (loss) | $ | 1.3 |  |  | $ | 10.4 |  |  | $ | (4.0) |  |  |  | $ | 6.0 |
Amortization of basis differences | 12.0 |  |  | 14.1 |  |  | 10.1 |  |  |  | (2.9) |
Equity in earnings of ARO | $ | 13.3 |  |  | $ | 24.5 |  |  | $ | 6.1 |  |  |  | $ | 3.1 |
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, 2023 |  | December 31, 2022 |
Total assets | $ | 417.1 |  |  | $ | 377.8 |  |
Less: total liabilities | 73.6 |  |  | 59.9 |  |
Maximum exposure to loss | $ | 343.5 |  |  | $ | 317.9 |  |
Schedule of Related Party Transactions | Our balances related to the Lease Agreements were as follows (in millions):
| December 31, 2023 |  | December 31, 2022 |  |  |
Amounts receivable (1) | $ | 10.2 |  |  | $ | 12.0 |  |  |  |
Contract liabilities(2) | $ | 15.9 |  |  | $ | 16.7 |  |  |  |
Accounts payable(2) | $ | 57.7 |  |  | $ | 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 therefore, the corresponding contract liabilities are subject to adjustment during the lease term. Upon completion of the lease term, such amounts become a payable to or a receivable from ARO. The principal amount and discount of the Notes Receivable from ARO were as follows (in millions):
| December 31, 2023 |  | December 31, 2022 |  |  |
Principal amount | $ | 402.7 |  |  | $ | 402.7 |  |  |  |
Discount | (120.4) |  |  | (148.7) |  |  |  |
Carrying value | $ | 282.3 |  |  | $ | 254.0 |  |  |  |
Interest income earned on the Notes Receivable from ARO was as follows (in millions):
| Successor |  |  | Predecessor
| Year Ended December 31, 2023 |  | Year Ended December 31, 2022 |  | Eight Months Ended December 31, 2021 |  |  | Four Months Ended April 30, 2021
Interest income | $ | 30.5 |  |  | $ | 11.3 |  |  | $ | 7.0 |  |  |  | $ | 3.5 |
Non-cash amortization (1) | 28.3 |  |  | 44.9 |  |  | 20.8 |  |  |  | — |
Total interest income on the Notes Receivable from ARO | $ | 58.8 |  |  | $ | 56.2 |  |  | $ | 27.8 |  |  |  | $ | 3.5 |
(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. In 2022, we recognized non-cash interest income of $14.8 million attributable to a $40.0 million early principal repayment of the Notes Receivable from ARO received in September 2022.

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- 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
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