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Leases Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases
(5) Leases

The majority of our leases are for the following types of assets:

•Office space. Our primary offices are in Dallas, Houston, and Midland, with smaller offices in other locations near our assets. Our office leases are long-term in nature and represent $57.6 million of our lease liability and $32.4 million of our right-of-use asset as of December 31, 2020. Our office leases represented $60.0 million of our lease liability and $39.8 million of our right-of-use asset as of December 31, 2019. These office leases typically include variable lease costs related to utility expenses, which are determined based on our pro-rata share of the building expenses each month and expensed as incurred.

•Compression and other field equipment. We pay third parties to provide compressors or other field equipment for our assets. Under these agreements, a third party installs and operates compressor units based on specifications set by us to meet our compression needs at specific locations. While the third party determines which compressors to install and operates and maintains the units, we have the right to control the use of the compressors and are the sole economic beneficiary of the identified assets. These agreements are typically for an initial term of one to three years but will automatically renew from month to month until canceled by us or the lessor. Compression and other field equipment rentals represent $14.6 million of our lease liability and $14.6 million of our right-of-use asset as of December 31, 2020. Compression and other field equipment rentals represented $27.1 million of our lease liability and $27.1 million of our right-of-use asset as of December 31, 2019. Under certain agreements, we may incur variable lease costs related to incidental services provided by the equipment lessor, which are expensed as incurred.

•Land and land easements. We make periodic payments to lease land or to have access to our assets. Land leases and easements are typically long-term to match the expected useful life of the corresponding asset and represent $15.1 million of our lease liability and $12.5 million of our right-of-use asset as of December 31, 2020. Land and land easement leases represented $15.3 million of our lease liability and $12.9 million of our right-of-use asset as of December 31, 2019.
•Other. We rent office equipment and other items that represent $0.3 million of our lease liability and $0.3 million of our right-of-use asset as of December 31, 2020. Office equipment and other items represented $0.6 million of our lease liability and $0.6 million of our right-of-use asset as of December 31, 2019.

Lease balances are recorded on the consolidated balance sheets as follows (in millions):
Operating leases:December 31, 2020December 31, 2019
Other assets, net$59.8 $80.4 
Other current liabilities$16.3 $21.1 
Other long-term liabilities$71.3 $81.9 
Other lease information
Weighted-average remaining lease term—Operating leases11.1 years10.6 years
Weighted-average discount rate—Operating leases5.1 %5.1 %

Certain of our lease agreements have options to extend the lease for a certain period after the expiration of the initial term. We recognize the cost of a lease over the expected total term of the lease, including optional renewal periods that we can reasonably expect to exercise. We do not have material obligations whereby we guarantee a residual value on assets we lease, nor do our lease agreements impose restrictions or covenants that could affect our ability to make distributions.

Lease expense is recognized on the consolidated statements of operations as “Operating expenses” and “General and administrative” depending on the nature of the leased asset. Impairments of right-of-use assets are recognized in “Impairments” on the consolidated statements of operations. The components of total lease expense are as follows (in millions):
Year Ended December 31,
20202019
Finance lease expense:
Amortization of right-of-use asset$— $5.2 
Interest on lease liability— 0.1 
Operating lease expense:
Long-term operating lease expense23.1 28.7 
Short-term lease expense22.1 32.0 
Variable lease expense11.8 7.7 
Impairments6.8 — 
Total lease expense$63.8 $68.4 

During the fourth quarter of 2020, we determined that we would cease using a portion of our Dallas, Houston, and Midland offices. We are attempting to sublease the vacated space; however, as we believe the terms of a sublease would be below our current rental rates, we evaluated the related right-of-use assets for impairment by comparing the estimated fair values of the right-of-use assets to their carrying values. Estimated fair values were calculated using a discounted cash flow analysis that utilized Level 3 inputs, which included estimated future cash flows and a discount rate derived from market data. As the carrying value of each right-of-use asset exceeded its estimated fair value, we recognized impairment expense of $6.8 million for the year ended December 31, 2020.

The following table summarizes the maturity of our lease liability as of December 31, 2020 (in millions):
Total20212022202320242025Thereafter
Undiscounted operating lease liability$121.7 $19.6 $13.7 $10.2 $9.5 $9.8 $58.9 
Reduction due to present value(34.1)(4.0)(3.6)(3.2)(2.8)(2.4)(18.1)
Operating lease liability$87.6 $15.6 $10.1 $7.0 $6.7 $7.4 $40.8 
Leases
(5) Leases

The majority of our leases are for the following types of assets:

•Office space. Our primary offices are in Dallas, Houston, and Midland, with smaller offices in other locations near our assets. Our office leases are long-term in nature and represent $57.6 million of our lease liability and $32.4 million of our right-of-use asset as of December 31, 2020. Our office leases represented $60.0 million of our lease liability and $39.8 million of our right-of-use asset as of December 31, 2019. These office leases typically include variable lease costs related to utility expenses, which are determined based on our pro-rata share of the building expenses each month and expensed as incurred.

•Compression and other field equipment. We pay third parties to provide compressors or other field equipment for our assets. Under these agreements, a third party installs and operates compressor units based on specifications set by us to meet our compression needs at specific locations. While the third party determines which compressors to install and operates and maintains the units, we have the right to control the use of the compressors and are the sole economic beneficiary of the identified assets. These agreements are typically for an initial term of one to three years but will automatically renew from month to month until canceled by us or the lessor. Compression and other field equipment rentals represent $14.6 million of our lease liability and $14.6 million of our right-of-use asset as of December 31, 2020. Compression and other field equipment rentals represented $27.1 million of our lease liability and $27.1 million of our right-of-use asset as of December 31, 2019. Under certain agreements, we may incur variable lease costs related to incidental services provided by the equipment lessor, which are expensed as incurred.

•Land and land easements. We make periodic payments to lease land or to have access to our assets. Land leases and easements are typically long-term to match the expected useful life of the corresponding asset and represent $15.1 million of our lease liability and $12.5 million of our right-of-use asset as of December 31, 2020. Land and land easement leases represented $15.3 million of our lease liability and $12.9 million of our right-of-use asset as of December 31, 2019.
•Other. We rent office equipment and other items that represent $0.3 million of our lease liability and $0.3 million of our right-of-use asset as of December 31, 2020. Office equipment and other items represented $0.6 million of our lease liability and $0.6 million of our right-of-use asset as of December 31, 2019.

Lease balances are recorded on the consolidated balance sheets as follows (in millions):
Operating leases:December 31, 2020December 31, 2019
Other assets, net$59.8 $80.4 
Other current liabilities$16.3 $21.1 
Other long-term liabilities$71.3 $81.9 
Other lease information
Weighted-average remaining lease term—Operating leases11.1 years10.6 years
Weighted-average discount rate—Operating leases5.1 %5.1 %

Certain of our lease agreements have options to extend the lease for a certain period after the expiration of the initial term. We recognize the cost of a lease over the expected total term of the lease, including optional renewal periods that we can reasonably expect to exercise. We do not have material obligations whereby we guarantee a residual value on assets we lease, nor do our lease agreements impose restrictions or covenants that could affect our ability to make distributions.

Lease expense is recognized on the consolidated statements of operations as “Operating expenses” and “General and administrative” depending on the nature of the leased asset. Impairments of right-of-use assets are recognized in “Impairments” on the consolidated statements of operations. The components of total lease expense are as follows (in millions):
Year Ended December 31,
20202019
Finance lease expense:
Amortization of right-of-use asset$— $5.2 
Interest on lease liability— 0.1 
Operating lease expense:
Long-term operating lease expense23.1 28.7 
Short-term lease expense22.1 32.0 
Variable lease expense11.8 7.7 
Impairments6.8 — 
Total lease expense$63.8 $68.4 

During the fourth quarter of 2020, we determined that we would cease using a portion of our Dallas, Houston, and Midland offices. We are attempting to sublease the vacated space; however, as we believe the terms of a sublease would be below our current rental rates, we evaluated the related right-of-use assets for impairment by comparing the estimated fair values of the right-of-use assets to their carrying values. Estimated fair values were calculated using a discounted cash flow analysis that utilized Level 3 inputs, which included estimated future cash flows and a discount rate derived from market data. As the carrying value of each right-of-use asset exceeded its estimated fair value, we recognized impairment expense of $6.8 million for the year ended December 31, 2020.

The following table summarizes the maturity of our lease liability as of December 31, 2020 (in millions):
Total20212022202320242025Thereafter
Undiscounted operating lease liability$121.7 $19.6 $13.7 $10.2 $9.5 $9.8 $58.9 
Reduction due to present value(34.1)(4.0)(3.6)(3.2)(2.8)(2.4)(18.1)
Operating lease liability$87.6 $15.6 $10.1 $7.0 $6.7 $7.4 $40.8