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Leases

12 Months Ended

Dec. 31, 2019

14. LEASES

Lessee. The Partnership has entered into operating leases that extend through 2028 for corporate offices, shared field offices, and equipment supporting the Partnership’s operations, with both Occidental and third parties as lessors. The Partnership also has subleased equipment from Occidental via finance leases extending through April 2020.

The following table summarizes information related to the Partnership’s leases at December 31, 2019:



thousands except lease term and discount rate	Operating Leases			Finance Leases
Assets
Other assets	$	3,985		$	—
Net property, plant, and equipment	—			7,892
Total lease assets ⁽¹⁾	$	3,985		$	7,892

Liabilities
Accrued liabilities	$	1,805		$	—
Short-term debt	—			7,873
Other liabilities	3,035			—
Total lease liabilities ⁽¹⁾	$	4,840		$	7,873

Weighted-average remaining lease term (years)	5			—
Weighted-average discount rate	4.7		%	2.9		%


⁽¹⁾	Includes additions to ROU assets and lease liabilities of $8.5 million related to finance leases for the year ended December 31, 2019.

Lease expense charged to the Partnership was $56.5 million and $45.5 million for the years ended December 31, 2018 and 2017, respectively. The following table summarizes the Partnership’s lease cost for the year ended December 31, 2019:



thousands	Year Ended December 31, 2019
Operating lease cost	$	6,932
Short-term lease cost	1,295
Variable lease cost	256
Sublease income	(414		)
Finance lease cost
Amortization of ROU assets	562
Interest on lease liabilities	137
Total lease cost	$	8,768

The following table summarizes cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2019:



thousands	Operating Leases		Finance Leases
Operating cash flows	$	7,042	$	118
Financing cash flows	—		508

14. LEASES (CONTINUED)

The following table reconciles the undiscounted cash flows to the operating and finance lease liabilities at December 31, 2019:



thousands	Operating Leases		Finance Leases
2020	$	1,969	$	7,934
2021	612		—
2022	618		—
2023	625		—
2024	449		—
Thereafter	1,209		—
Total lease payments	5,482		7,934
Less portion representing imputed interest	642		61
Total lease liabilities	$	4,840	$	7,873

The amounts in the table below represent contractual operating lease commitments at December 31, 2018, that were assigned or otherwise charged to the Partnership pursuant to the reimbursement provisions of the omnibus agreement (see Note 1):



thousands
2019	$	8,711
2020	2,236
2021	460
2022	467
2023	473
Thereafter	1,547
Total lease payments	$	13,894

Lessee, Finance Leases

14. LEASES

The following table summarizes information related to the Partnership’s leases at December 31, 2019:



thousands except lease term and discount rate	Operating Leases			Finance Leases
Assets
Other assets	$	3,985		$	—
Net property, plant, and equipment	—			7,892
Total lease assets ⁽¹⁾	$	3,985		$	7,892

Liabilities
Accrued liabilities	$	1,805		$	—
Short-term debt	—			7,873
Other liabilities	3,035			—
Total lease liabilities ⁽¹⁾	$	4,840		$	7,873

Weighted-average remaining lease term (years)	5			—
Weighted-average discount rate	4.7		%	2.9		%


⁽¹⁾	Includes additions to ROU assets and lease liabilities of $8.5 million related to finance leases for the year ended December 31, 2019.



thousands	Year Ended December 31, 2019
Operating lease cost	$	6,932
Short-term lease cost	1,295
Variable lease cost	256
Sublease income	(414		)
Finance lease cost
Amortization of ROU assets	562
Interest on lease liabilities	137
Total lease cost	$	8,768

The following table summarizes cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2019:



thousands	Operating Leases		Finance Leases
Operating cash flows	$	7,042	$	118
Financing cash flows	—		508

14. LEASES (CONTINUED)

The following table reconciles the undiscounted cash flows to the operating and finance lease liabilities at December 31, 2019:



thousands	Operating Leases		Finance Leases
2020	$	1,969	$	7,934
2021	612		—
2022	618		—
2023	625		—
2024	449		—
Thereafter	1,209		—
Total lease payments	5,482		7,934
Less portion representing imputed interest	642		61
Total lease liabilities	$	4,840	$	7,873



thousands
2019	$	8,711
2020	2,236
2021	460
2022	467
2023	473
Thereafter	1,547
Total lease payments	$	13,894

Lessor, Operating Leases

Lessor. Effective December 31, 2019, an affiliate of Occidental and a wholly owned subsidiary of the Partnership, entered into an operating and maintenance agreement, pursuant to which Occidental provides operational and maintenance services with respect to a crude-oil gathering system and associated treating facilities owned by the Partnership through December 31, 2021. This agreement includes (i) fixed consideration, which is measured as the minimum-volume commitment for both gathering and treating, and (ii) variable consideration, which consists of all volumes above the minimum-volume commitment. Subsequent to the initial two-year term, the agreement provides for automatic one-year extensions, unless either party exercises its option to terminate the lease with advance notice.

The following table presents the undiscounted cash flows expected to be received for all operating leases in effect as of December 31, 2019. This presentation includes minimum fixed lease payments and does not include an estimate of variable lease consideration.



thousands
2020	$	157,582
2021	193,925
2022	—
2023	—
2024	—
Thereafter	—
Total lease payments	$	351,507