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Leases

12 Months Ended

Dec. 31, 2019

Note 9—Leases

Our operating leases are principally for office space, storage facilities, operating equipment and land. At December 31, 2019, our operating leases had a weighted average discount rate of 6.3 percent and a weighted-average remaining lease term of 13.8 years.

Our finance lease for the ultra-deepwater drillship Petrobras 10000, which is scheduled to expire in August 2029, has an implicit interest rate of 7.8 percent and requires scheduled payments of $6 million monthly through expiration, after which we have the right and obligation to acquire the drillship from the lessor for one dollar. In the year ended December 31, 2019, we recognized expense of $21 million, recorded in depreciation and amortization, associated with the amortization of the right of use asset.

The components of our lease costs were as follows (in millions):


	Year ended
	December 31,
	2019
Lease costs
Operating lease costs	$	25
Short-term lease costs		13
Finance lease costs, amortization of right-of-use assets		21
Finance lease costs, interest on lease liabilities		39
Total lease costs	$	98

In the year ended December 31, 2019, we recognized a loss of $26 million, with no tax effect, associated with the impairment of right-of-use assets and leasehold improvements for certain office facilities that we had vacated or had committed to sublease.

Supplemental cash flow information for our leases was as follows (in millions):


	Year ended
	December 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19
Operating cash flows from finance lease		39
Financing cash flows from finance lease		32

At December 31, 2019, the aggregate future minimum rental payments for our leases were as follows (in millions):


	Operating		Finance
	leases		lease
Years ending December 31,
2020	$	16	$	71
2021		12		71
2022		14		71
2023		12		71
2024		12		71
Thereafter		135		327
Total future minimum rental payment		201		682
Less amount representing imputed interest		(72)		(203)
Present value of future minimum rental payments		129		479
Less current portion, recorded in other current liabilities		(13)		(35)
Long-term lease liabilities, recorded in other long-term liabilities	$	116	$	444