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Equity Method Investment In ARO (Tables)
 6 Months Ended
Jun. 30, 2025
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments A reconciliation of those components is presented below (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
50% interest in ARO net loss$(4.3)$(3.4)$(4.8)$(4.2)
Amortization of basis differences3.2 3.1 6.3 6.3 
Equity in earnings (losses) of ARO$(1.1)$(0.3)$1.5 $2.1 
Schedule of Related Party Transactions
Our balances related to the ARO lease agreements were as follows (in millions):

June 30, 2025December 31, 2024
Amounts receivable (1)
$26.8 $16.5 
Contract liabilities (2)
$16.8 $14.1 
Accounts payable (2)
$51.3 $43.1 

(1)Amounts receivable from ARO are 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. In addition, the accounts payable balance includes amounts owed to ARO for certain reimbursable costs.
The principal amount and discount of the Notes Receivable from ARO were as follows (in millions):

June 30, 2025December 31, 2024
Principal amount$376.6 $376.6 
Discount(68.1)(80.4)
Carrying value$308.5 $296.2 
Interest receivable (1)(2)
$8.0 $— 

(1)Our interest receivable from ARO is included in Accounts receivable, net in our Condensed Consolidated Balance Sheets.
(2)The 2024 interest on the Notes Receivable from ARO of approximately $24.6 million was paid in kind in December 2024 by increasing the principal balance of the Notes Receivable from ARO.

Interest income earned on the Notes Receivable from ARO was as follows (in millions):

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Interest income$4.0 $5.2 $8.0 $12.2 
Non-cash amortization (1)(2)
6.2 20.6 12.3 27.6 
Total interest income on the Notes Receivable from ARO$10.2 $25.8 $20.3 $39.8 

(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)During the three and six months ended June 30, 2024, we recognized $13.9 million of non-cash interest income attributable to a settlement agreement executed in June 2024 whereby $50.7 million of accounts payable due to ARO was net settled against a portion of the Notes Receivable from ARO.