Leases Leases

12 Months Ended

Dec. 31, 2019

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 10 years, some of which include options to extend. Additionally, we sublease certain office space to third parties.

During the year ended December 31, 2019, we recorded lease impairments of $5.6 million related to the impairment of the right-of-use assets associated with an office space and a leased yard facility that were abandoned due to the consolidation of certain corporate offices and leased facilities.

The components of lease expense as of December 31, 2019 is as follows (in millions):




Long-term operating lease cost	$	29.5
Short-term operating lease cost	12.2
Sublease income	(2.4		)
Total operating lease cost	$	39.3

Supplemental balance sheet information related to our operating leases is as follows (in millions, except lease term and discount rate) as of December 31, 2019:




Operating lease right-of-use assets⁽¹⁾	$	58.1

Current lease liability⁽¹⁾	$	21.1
Long-term lease liability⁽¹⁾	51.8
Total operating lease liabilities	$	72.9

Weighted-average remaining lease term (in years)	5.1

Weighted-average discount rate ⁽²⁾	8.23		%


⁽¹⁾	The right-of-use assets include $12.2 million acquired 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 year ended December 31, 2019, cash paid for amounts included in the measurement of our operating lease liabilities was $29.9 million.

We are obligated under leases for certain of our offices and equipment. Rental expense relating to operating leases was $40.1 million and $37.0 million during the years ended December 31, 2018 and 2017, respectively.

Maturities of lease liabilities as of December 31, 2019 were as follows (in millions):




2020	$	25.4
2021	18.4
2022	12.6
2023	10.7
2024	8.1
Thereafter	17.2
Total lease payments	$	92.4
Less imputed interest	19.5
Total	$	72.9

Future minimum rental payments under non-cancelable operating leases as of December 31, 2018 were as follows (in millions):




2019	$	32.3
2020	18.7
2021	11.9
2022	9.2
2023	8.9
Thereafter	15.2
Total lease payments	$	96.2