Leases

12 Months Ended

Dec. 31, 2020

Note 10 – Leases

We have non-cancellable operating leases primarily associated with our office facilities, rail assets, land, and storage and terminal assets. We have finance leases primarily associated with our tractors and vehicles. Our leases have remaining lease terms of 1 to 4 years, some of which include options to extend the lease term for up to 10 years.

The balances of right-of-use assets and liabilities of finance leases and operating leases, and their locations on our Consolidated Balance Sheets are as follows:

		Year Ended December 31,
	Balance Sheet Location	2020		2019
Right-of-use assets
Operating leases, gross	Other long-term assets	$	42.3	$	31.6
Finance leases, gross	Property, plant and equipment		51.8		48.8

Lease liabilities
Current:
Operating leases	Accrued liabilities	$	9.5	$	6.5
Finance leases	Current debt obligations		12.1		12.2
Non-current:
Operating leases	Other long-term liabilities	$	19.7	$	18.2
Finance leases	Long-term debt		18.7		25.8

Operating lease costs and short-term lease costs are included in Operating expenses or General and administrative expense in our Consolidated Statements of Operations, depending on the nature of the leases. Finance lease costs are included in Depreciation and amortization expense and Interest income (expense) in our Consolidated Statements of Operations. The components of lease expense were as follows:

	Year Ended December 31,
	2020		2019
Lease cost
Operating lease cost	$	9.9	$	8.2
Short-term lease cost		20.7		30.0
Variable lease cost		5.5		4.9
Finance lease cost
Amortization of right-of-use assets		13.6		13.1
Interest expense		1.4		1.6
Total lease cost	$	51.1	$	57.8

During the year ended December 31, 2018, total operating leases expense incurred was $51.9 million, which includes short-term leases for compressors and equipment.

Other supplemental information related to our leases are as follows:

	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9.8	$	8.2
Operating cash flows for finance leases		1.4		1.6
Financing cash flows for finance leases		12.4		11.5

The weighted-average remaining lease terms for both operating leases and finance leases is 3 years. The weighted-average discount rates for both operating leases and finance leases is 3.8%.

The following table presents the maturities of our lease liabilities under non-cancellable leases as of December 31, 2020:

	Operating Leases			Finance Leases
Future Minimum Lease Payments Beginning After December 31,
2020	$	10.5		$	13.0
2021		9.5			11.6
2022		7.6			6.0
2023		3.2			1.5
2024		0.4			0.3
Thereafter		—			—
Total undiscounted cash flows		31.2			32.4
Less imputed interest		(2.0	)		(1.6	)
Total lease liabilities	$	29.2		$	30.8

Targa Resources Partners LP 10-K