LEASES

12 Months Ended

Dec. 31, 2019

We have commitments under lease arrangements for data centers, office space, partner sites and equipment. Our leases have initial lease terms ranging from 2 years to 34 years, most of which include options to extend or renew the leases for 5 to 15 years, and some of which may include options to terminate the leases within 4 to 120 months.

At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time). Operating leases are accounted for on the consolidated balance sheets with ROU assets being recognized in "Operating lease right-of-use assets" and lease liabilities recognized in "Short-term operating lease liabilities" and "Operating lease liabilities." Finance leases are accounted for on the consolidated balance sheets with ROU assets being recognized in "Finance lease right-of-use assets" and lease liabilities recognized in "Short-term finance lease liabilities" and "Finance lease liabilities."

All lease liabilities are measured at the present value of the unpaid lease payments, discounted using our incremental borrowing rate based on the information available at commencement date or modification date of the lease. ROU assets, for both operating and finance leases, are initially measured based on the lease liability, adjusted for initial direct costs, prepaid rent, and lease incentives received. The operating lease ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments and lease incentives. The finance lease ROU assets are subsequently amortized using the straight-line method.

Operating lease expenses are recognized on a straight-line basis over the lease term. With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability.

We have elected to combine lease and non-lease components for all lease contracts where we are the lessee. Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred. ROU assets are measured for impairment when a triggering event occurs.

During 2019, as a result of the reassessment of certain lease assets and liabilities due to triggering events, $82.1 million of finance lease right-of-use assets were converted to $39.9 million of operating lease right-of-use assets, and $2.7 million of short-term finance lease liabilities and $93.5 million of finance lease liabilities were converted to $3.5 million of short-term operating lease liabilities and $52.9 million of operating lease liabilities.

Lease-related costs for the year ended December 31, 2019 are as follows (in thousands):



	Year Ended December 31, 2019
Finance lease cost
Amortization of right-of-use assets		$	16,450
Interest on lease liabilities		28,972
Finance lease cost		$	45,422

Operating lease cost		$	8,771
Short-term lease cost		4,251
Total lease cost		$	58,444

Other information related to leases as of December 31, 2019 is as follows (in thousands, except lease term and rate):



	Operating Leases			Finance Leases
Right-of-use assets	$	62,537		$	141,323
Lease liabilities	81,542			175,021

Weighted-average remaining lease term (years)	7.43			19.01
Weighted-average discount rate	12.40		%	15.70		%

The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the year ended December 31, 2019 (in thousands):



Operating Leases
Operating cash paid to settle operating lease liabilities	$	8,748

Right-of-use assets obtained in exchange for lease liabilities	40,042

Finance Leases
Operating cash paid for interest	$	23,730

Right-of-use assets obtained in exchange for lease liabilities	49

Future minimum lease payments under non-cancellable leases as of December 31, 2019 are as follows (in thousands):



	Operating Leases			Finance Leases
2020		$	18,059		$	24,574
2021		18,256			26,145
2022		17,786			24,763
2023		16,936			23,876
2024		14,765			23,799
Thereafter		44,409			434,025
Total undiscounted lease payments		$	130,211		$	557,182
Less: Imputed interest		48,669			382,161
Total lease liabilities		$	81,542		$	175,021

As of December 31, 2019, we did not have additional operating and finance leases that have not yet commenced.

Rent expense under ASC 840 was $8.7 million and $15.2 million for the years ended December 31, 2018 and 2017, respectively.

LEASES