Leases (Tables)

3 Months Ended

Mar. 31, 2021

Schedule of leases entered into during the period

The following table summarizes the significant lease transactions during the three months ended March 31, 2021 (in millions):

Renewal/Termination Options Excluded (1)

Net Incremental (2)

Lease

Quarter

Transaction

Lease Classification

ROU assets

ROU liabilities

Silicon Valley 8 ("SV8") data center lease extended (3)

Extended lease term by 16 years

Two 10-year renewal options

Finance Lease

98.1

100.0

Operating Lease

(13.7)

(15.6)

Hong Kong 3 ("HK3") data center lease extended (3)

Extended lease by 10 years, which included a 5-year renewal option

N/A

Finance Lease - Building

38.0

Operating Lease - Land

6.6

(1) These renewal/termination options are not included in determining the lease terms as we are not reasonably certain to exercise them at this time.

(2) The net incremental amounts represent the adjustments to the right of use ("ROU") assets and liabilities recorded during the quarter that the transactions were entered.

(3) These leases had components previously classified as operating leases.

Components of lease expenses

The components of lease expenses are as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Finance lease cost
Amortization of ROU assets (1)	$	36,128	$	25,166
Interest on lease liabilities	30,193		27,825
Total finance lease cost	66,321		52,991

Operating lease cost	56,454		53,791
Variable lease cost	8,040		2,582
Total lease cost	$	130,815	$	109,364

(1) Amortization of ROU assets is included with depreciation expense, and is recorded within cost of revenues, sales and marketing and general and administrative expenses in the condensed consolidated statements of operations.

Other information related to leases

Other information related to leases is as follows (in thousands):


	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	28,399		$	26,967
Operating cash flows from operating leases	52,092			51,985
Financing cash flows from finance leases	32,584			18,977

ROU assets obtained in exchange for lease obligations: (1)
Finance leases	$	186,981		$	115,274
Operating leases	(1,948)			6,612

	As of March 31, 2021			As of December 31, 2020
Weighted-average remaining lease term - finance leases (2)	14 years			14 years
Weighted-average remaining lease term - operating leases (2)	12 years			12 years
Weighted-average discount rate - finance leases	7		%	7		%
Weighted-average discount rate - operating leases	4		%	4		%
Finance lease assets (3)	$	1,816,380		$	1,688,032

(1) Represents all non-cash changes in ROU assets.

(2) Includes lease renewal options that are reasonably certain to be exercised.

(3) As of March 31, 2021 and December 31, 2020, we recorded accumulated amortization of finance lease assets of $626.8 million and $604.1 million, respectively. Finance lease assets are recorded within property, plant and equipment, net on the condensed consolidated balance sheets.

Maturities of lease liabilities

Maturities of lease liabilities as of March 31, 2021 are as follows (in thousands):


	Operating Leases		Finance Leases		Total
2021 (9 months remaining)	$	139,653	$	183,906	$	323,559
2022	196,704		231,600		428,304
2023	181,741		226,851		408,592
2024	168,996		224,965		393,961
2025	160,384		221,551		381,935
Thereafter	1,037,936		2,084,622		3,122,558
Total lease payments	1,885,414		3,173,495		5,058,909
Plus amount representing residual property value	—		16,363		16,363
Less imputed interest	(485,684)		(1,127,963)		(1,613,647)


Total	$	1,399,730	$	2,061,895	$	3,461,625

Maturities of lease liabilities

Maturities of lease liabilities as of March 31, 2021 are as follows (in thousands):


	Operating Leases		Finance Leases		Total
2021 (9 months remaining)	$	139,653	$	183,906	$	323,559
2022	196,704		231,600		428,304
2023	181,741		226,851		408,592
2024	168,996		224,965		393,961
2025	160,384		221,551		381,935
Thereafter	1,037,936		2,084,622		3,122,558
Total lease payments	1,885,414		3,173,495		5,058,909
Plus amount representing residual property value	—		16,363		16,363
Less imputed interest	(485,684)		(1,127,963)		(1,613,647)


Total	$	1,399,730	$	2,061,895	$	3,461,625