LEASE OBLIGATIONS

9 Months Ended

Sep. 30, 2018

NOTE 13—LEASE OBLIGATIONS

Future minimum lease payments for our capital lease obligations are as follows:

	(In millions)
2018	$	1
2019		15
2020		12
2021		11
2022		11
Thereafter		53
	$	103
Imputed interest		(28	)
Present value of future minimum lease payments	$	75

Significant capital leases at September 30, 2018 include the following:

The Amazon, a pipelay and construction vessel, was purchased by us in February 2017, sold to an unrelated third party (the “Amazon Owner”) and leased back under a long-term bareboat charter that gave us the right to use the vessel and was recorded as an operating lease. On July 27, 2018, we entered into agreements (the “Amazon Modification Agreements”) providing for certain modifications to the Amazon vessel and related financing and amended bareboat charter arrangements. The total cost of the modifications, including project management and other fees and expenses, is expected to be in the range of approximately $260 million to $290 million. The Amazon Owner is expected to fund the cost of the modifications primarily through an export credit-backed senior loan provided by a group of lenders, supplemented by expected direct capital expenditure by us of approximately $58 million over the course of the modifications. The amended bareboat charter arrangement is accounted for as a capital lease, recognizing Property, plant and equipment and Lease obligation for the present value of future minimum lease payments. The cost of modifications will be recorded in Property, plant and equipment with a corresponding liability for direct capital expenditures not incurred by us. The capital lease obligation will increase upon completion of the modifications and funding by the Amazon Owner. At September 30, 2018, Property, plant and equipment, net included a $54 million asset (net of accumulated amortization of $1 million) and a capital lease liability of approximately $53 million.

In May 2018, we entered into a capital lease arrangement for a jack-up barge and, as of September 30, 2018, Property, plant and equipment, net included a $17 million asset (net of accumulated amortization of $0.3 million) relating to that arrangement, along with a corresponding capital lease liability.