NOTE 8. CAPITAL LEASES

The Company leases certain assets under capital leases which expire at various dates through 2020. The assets and liabilities under capital leases are recorded at the lower of present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. Amortization expense of assets under capital leases was $1.2 million and $0.4 million for the nine months ended September 30, 2017 and 2016, respectively. Amortization expense of assets under capital leases was $0.4 million and $0.2 million for the three months ended September 30, 2017 and 2016, respectively.

In February 2017, the Company entered into a lease agreement for certain high‑specification rig equipment for use in its business operations. The lease is being accounted for as a capital lease, as the present value of minimum monthly lease payments, including the purchase option, exceeds 90 percent of the fair value of the leased property at inception of the lease. The lease term ends January 2018, and as such, the total obligation is current.

Aggregate future minimum lease payments under capital leases are as follows (in millions):


As of September 30,	Total
2017	$	0.5
2018		8.0
2019		0.7
2020		0.4
Total future minimum lease payments		9.6
Less: amount representing interest		(0.6)
Present value of future minimum lease payments		9.0
Less: current portion of capital lease obligations		(7.6)
Total capital lease obligations, less current portion	$	1.4