Leases (Notes)

6 Months Ended

Jun. 30, 2020

Leases

The company has operating leases for datacenters, corporate offices, and certain information technology equipment. The operating leases have remaining lease terms of up to 18 years, some of which include options to extend or renew the leases for up to an additional five years, and some of which include options to early terminate the leases in less than 12 months. Management evaluates the exercisability of these options at least quarterly in order to determine whether the contract term must be reassessed. For a small number of the leases, primarily the international locations, management's approach is to enter into short-term leases for a lease term of 12 months or less in order to provide for greater flexibility in the local environment. For certain office spaces, the company has entered into arrangements to sublease excess space to third parties, while the original lease contract remains in effect with the landlord.

The company also has one finance lease, which is related to the sale of our datacenter in March 2016. In connection with the sale, the company leased back a portion of the property. The sale leaseback transaction was recognized under the financing method and not as a sale leaseback arrangement.

The right-of-use lease asset is recorded within other assets, and the present value of the lease liability is recorded within other liabilities (segregated between short term and long term) on the consolidated balance sheets. The discount rate applied to the lease payments represents the company's incremental borrowing rate.

The components of lease costs were as follows:


	Quarter Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Operating lease expense:
Operating lease cost	$	16.4	$	18.9	$	31.3	$	37.3
Short-term lease cost	0.5		1.5		0.7		4.9
Total operating lease expense included in other expense	$	16.9	$	20.4	$	32.0	$	42.2

Finance lease expense:
Interest expense	$	0.8	$	0.9	$	1.7	$	1.8
Depreciation expense	2.1		2.4		4.3		4.6
Total finance lease expense	$	2.9	$	3.3	$	6.0	$	6.4

Sublease revenue included in other revenue	$	3.1	$	1.7	$	6.7	$	5.3

Supplemental cash flow information related to leases was as follows:


	Quarter Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Cash outflows for operating leases	$	15.7	$	16.9	$	31.6	$	32.1
Cash outflows for finance leases	4.2		4.8		8.4		9.0

Supplemental balance sheet information related to leases was as follows:

Operating leases


(in millions)	June 30, 2020			December 31, 2019
Operating lease right-of-use assets	$	396.7		$	417.1

Operating lease liabilities:
Other current liabilities	$	40.5		$	42.3
Other liabilities	486.8			514.8
Total operating lease liabilities	$	527.3		$	557.1



Weighted average remaining lease term (in months)	143			146
Weighted average discount rate	4.0		%	4.0		%

Finance leases


(in millions)	June 30, 2020			December 31, 2019
Finance lease right-of-use assets	$	93.2		$	97.5

Finance lease liabilities:
Other current liabilities	$	7.5		$	7.4
Other liabilities	87.7			91.5
Total finance lease liabilities	$	95.2		$	98.9

Weighted average remaining lease term (in months)	129			135
Weighted average discount rate	3.5		%	3.5		%

Future minimum lease payments were as follows as of June 30, 2020 for operating and finance leases:


(in millions)	Operating Leases
Remainder of 2020	$	32.1
2021	61.4
2022	64.4
2023	61.3
2024	55.7
2025	53.8
Thereafter	343.4
Total lease payments	672.1
Less: imputed interest	(144.8)
Present value of lease liability	$	527.3


(in millions)	Finance Leases
Remainder of 2020	$	8.5
2021	17.0
2022	17.1
2023	17.2
2024	17.4
2025	17.5
Thereafter	94.2
Total lease payments	188.9
Less: imputed interest	(93.7)
Present value of lease liability	$	95.2