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Leases

6 Months Ended

Jun. 30, 2019

Note 8. Leases

In the normal course of business, we enter into operating and finance lease agreements to support our operations. Operating leases include primarily office space for our corporate and field locations, US onshore compressors and drilling rigs, vessels and helicopters for offshore operations, storage facilities, and other miscellaneous assets. Finance leases include corporate office space, a trunkline in the DJ Basin, a floating production, storage and offloading vessel (FPSO) in West Africa, and vehicles. Our leasing activity is recorded and presented on a gross basis, with the exception of the FPSO which is recorded net to our interest.

Balance Sheet Information ROU assets and lease liabilities are as follows:



(millions)	Balance Sheet Location	June 30, 2019
ROU Assets
Operating Leases ⁽¹⁾	Other Noncurrent Assets	$	272
Finance Leases ⁽²⁾	Total Property, Plant and Equipment, Net	175
Total ROU Assets		$	447
Lease Liabilities
Current Liabilities
Operating Leases	Other Current Liabilities	$	88
Finance Leases	Other Current Liabilities	41
Noncurrent Liabilities
Operating Leases	Other Noncurrent Liabilities	190
Finance Leases	Long-Term Debt	170
Total Lease Liabilities		$	489


⁽¹⁾	Operating lease ROU assets include primarily office space of $117 million, compressors of $88 million, and drilling rigs of $35 million.


⁽²⁾	Finance lease ROU assets include primarily office space of $94 million, net of accumulated amortization.

Statement of Operations Information The components of lease cost are as follows:



(millions)	Statement of Operations Location	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Operating Lease Cost	⁽¹⁾	$	26		$	51
Finance Lease Cost
Amortization Expense	Depreciation, Depletion and Amortization	9			17
Interest Expense	Interest, Net of Amount Capitalized	4			7
Short-term Lease Cost ⁽²⁾	⁽¹⁾	143			269
Variable Lease Cost ⁽³⁾	⁽¹⁾	—			—
Sublease Income	General and Administrative	(1		)	(2		)
Total Lease Cost		$	181		$	342


⁽¹⁾	Cost classification varies depending on the leased asset. Costs are primarily included within production expense and general and administrative expense. In addition, in accordance with the successful efforts method of accounting, certain lease costs may be capitalized when incurred, as part of oil and gas properties on our consolidated balance sheet.


⁽²⁾	Short-term lease costs relate primarily to hydraulic fracturing services, well-to-well drilling rig contracts and other miscellaneous lease agreements. Amount excludes costs for leases with an initial term of one month or less.


⁽³⁾	Variable lease costs were de minimis for second quarter and the first six months of 2019.

Cash Flow Information Supplemental cash flow information is as follows:



	Six Months Ended June 30, 2019
(millions)	Operating Leases		Finance Leases
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating Cash Flows	$	30	$	6
Financing Cash Flows	—		20
Investing Cash Flows	18		—
ROU Assets Obtained in Exchange for Lease Liabilities ⁽¹⁾	58		8


⁽¹⁾	Amounts exclude the impact of adopting ASC 842 on January 1, 2019. See Note 2. Basis of Presentation.

Maturity of Lease Liabilities Maturities of lease liabilities as of June 30, 2019 are as follows:



(millions)	Operating Leases		Finance Leases		Total
Remainder of 2019	$	50	$	25	$	75
2020	85		48		133
2021	48		33		81
2022	33		23		56
2023	21		21		42
2024 and Thereafter	80		105		185
Total Lease Liabilities, Undiscounted	317		255		572
Less: Imputed Interest	39		44		83
Total Lease Liabilities ⁽¹⁾	$	278	$	211	$	489


⁽¹⁾	Includes the current portions of $88 million and $41 million for operating and finance leases, respectively.

Lease commitments as of December 31, 2018 were as follows:



(millions)	Operating Leases		Finance Leases		Total
2019	$	91	$	52	$	143
2020	74		46		120
2021	59		31		90
2022	62		22		84
2023	50		20		70
2024 and Thereafter	176		104		280
Total Lease Liabilities, Undiscounted	$	512	$	275	$	787

Other Information Other information related to our leases is as follows:



	June 30, 2019
Weighted-Average Remaining Lease Term
Operating Leases	5.9 years
Finance Leases	7.9 years
Weighted-Average Discount Rate
Operating Leases	4.40	%
Finance Leases	5.01	%

Leases