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Leases

3 Months Ended

Mar. 31, 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	March 31, 2019
ROU Assets
Operating Leases ⁽¹⁾	Other Noncurrent Assets	$	273
Finance Leases ⁽²⁾	Total Property, Plant and Equipment, Net	179
Total ROU Assets		$	452
Lease Liabilities
Current Liabilities
Operating Leases	Other Current Liabilities	$	86
Finance Leases	Other Current Liabilities	41
Noncurrent Liabilities
Operating Leases	Other Noncurrent Liabilities	194
Finance Leases	Long-Term Debt	174
Total Lease Liabilities		$	495


⁽¹⁾	Operating lease ROU assets include primarily office space of $107 million, compressors of $87 million, and drilling rigs of $40 million.


⁽²⁾	Finance lease ROU assets are recorded net of accumulated amortization of $449 million as of March 31, 2019. Assets include primarily office space of $96 million, net.

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



(millions)	Statement of Operations Location	Three Months Ended March 31, 2019
Operating Lease Cost	⁽¹⁾	$	25
Finance Lease Cost
Amortization Expense on ROU Assets	Depreciation, Depletion and Amortization	8
Interest Expense on Lease Liabilities	Interest, Net of Amount Capitalized	3
Short-term Lease Cost ⁽²⁾	⁽¹⁾	126
Variable Lease Cost ⁽³⁾	⁽¹⁾	—
Sublease Income	General and Administrative	(1		)
Total Lease Cost		$	161


⁽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 a term of one month or less.


⁽³⁾	Variable lease costs were de minimis for first quarter 2019.

Cash Flow Information Supplemental cash flow information is as follows:



	Three Months Ended March 31, 2019
(millions)	Operating Leases		Finance Leases
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating Cash Flows	$	15	$	3
Financing Cash Flows	—		10
Investing Cash Flows	9		—
ROU Assets Obtained in Exchange for Lease Liabilities ⁽¹⁾	34		2


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

Maturity of Lease Liabilities Maturities of lease liabilities as of March 31, 2019 are as follows:



(millions)	Operating Leases		Finance Leases		Total
Remainder of 2019	$	73	$	37	$	110
2020	83		47		130
2021	47		32		79
2022	32		22		54
2023	19		20		39
2024 and Thereafter	67		105		172
Total Lease Liabilities, Undiscounted	321		263		584
Less: Imputed Interest	41		48
Total Lease Liabilities ⁽¹⁾	$	280	$	215


⁽¹⁾	Includes the current portion of $86 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:



	March 31, 2019
Weighted-Average Remaining Lease Term
Operating Leases	6.7 years
Finance Leases	8.0 years
Weighted-Average Discount Rate
Operating Leases	4.45	%
Finance Leases	5.61	%

Leases