Leases (Notes)

6 Months Ended

Jun. 30, 2019

Leases

We have operating leases for office space, facilities, equipment, employee housing and certain rig berthing facilities. For all asset classes, except office space, we account for the lease component and the non-lease component as a single lease component. Our leases have remaining lease terms of less than one year to 11 years, some of which include options to extend. Additionally, we sublease certain office space to third parties.

The components of lease expense are as follows (in millions):



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Long-term operating lease cost	$	7.0		$	13.2
Short-term operating lease cost	2.2			5.3
Sublease income	(.4		)	(.7		)
Total operating lease cost	$	8.8		$	17.8

Supplemental balance sheet information related to our operating leases is as follows (in millions, except lease term and discount rate):



	June 30, 2019
Operating lease right-of-use assets⁽¹⁾	$	57.1

Current lease liability⁽¹⁾	$	21.5
Long-term lease liability⁽¹⁾	48.6
Total operating lease liabilities	$	70.1

Weighted-average remaining lease term (in years)	5.4

Weighted-average discount rate ⁽²⁾	8.00		%


⁽¹⁾	The right-of-use assets include $12.2 million assumed in the Rowan Transaction. The current and long-term lease liabilities include $3.9 million and $10.6 million, respectively, assumed in the Rowan Transaction.


⁽²⁾	Represents our estimated incremental borrowing cost on a secured basis for similar terms as the underlying leases.

For the three and six-month periods ended June 30, 2019, cash paid for amounts included in the measurement of our operating lease liabilities was $7.2 million and $14.2 million, respectively. Right-of-use assets and lease liabilities recorded for leases commencing during the quarter ended June 30, 2019 were insignificant.

Maturities of lease liabilities as of June 30, 2019 were as follows (in millions):



Year Ending December 31,	Total
2019 (excluding the six months ended June 30, 2019)	$	15.3
2020	19.5
2021	10.8
2022	9.9
2023	10.2
Thereafter	22.1
Total lease payments	$	87.8
Less imputed interest	(17.7		)
Total	$	70.1

In July 2019, we entered into operating lease agreements for rig berthing facilities. Future payments for these leases are approximately $9.6 million. The leases commence in fiscal year 2019 and have lease terms of one to two years.