Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

11. Leases

In the first quarter of 2019, we adopted Accounting Standards Codification ("ASC") 842, Leases, which replaced the previous accounting standard. The new lease standard is a right-of-use model, requiring most lessee agreements to be recorded on the balance sheet. The intent of the standard is to provide greater transparency about lessee obligations and activities. The primary impact to our financial statements is that most operating leases are recorded on our consolidated balance sheet and enhanced disclosures are required for both operating and finance leases. As permitted by ASC 842, our accounting policy is to evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

We adopted the standard using the modified retrospective approach, as of January 1, 2019. Prior year's financial results were not restated. On the adoption date, we recorded a right-of-use asset for $72 million in other assets, net, with a corresponding offset to other accrued liabilities and other noncurrent liabilities for $25 million and $47 million, respectively. There was no impact to retained deficit from adoption of the new standard.

The following table presents the components of lease expense (in thousands):

	Year Ended December 31, 2019
Operating lease cost	$	27,035
Finance lease cost:
Amortization of right-of-use assets	$	7,073
Interest on lease liabilities	453
Total finance lease cost	$	7,526

The following table presents supplemental cash flow information related to leases (in thousands):

	Year Ended December 31, 2019
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	28,374
Operating cash flows used in finance leases	453
Financing cash flows used in finance leases	6,731
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27,116
Finance leases	397

The following table presents supplemental balance sheet information related to leases (in thousands):

	Year Ended 12/31/2019
Operating Leases
Operating lease right-of-use assets	$	64,191
Other accrued liabilities	21,932
Other noncurrent liabilities	49,970
Total operating lease liabilities	$	71,902
Finance Leases
Property and equipment	35,349
Accumulated depreciation	(27,163)
Property and equipment, net	$	8,186
Other accrued liabilities	5,804
Other noncurrent liabilities	78
Total finance lease liabilities	$	5,882

The following table presents other supplemental information related to leases:

	December 31, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	4.9
Finance leases	1.2
Weighted Average Discount Rate
Operating leases	5.4	%
Finance leases	4.9	%

Lease Commitments

We lease certain facilities under long term operating leases. Certain of our lease agreements contain renewal options, early termination options and/or payment escalations based on fixed annual increases, local consumer price index changes or market rental reviews. We recognize rent expense with fixed rate increases and/or fixed rent reductions on a straight line basis over the term of the lease. We lease approximately 1.6 million square feet of office space in 93 locations in 48 countries. For the years ended December 31, 2019, 2018 and 2017, we recognized rent expense of $29 million, $30 million and $32 million, respectively.

Our leases have remaining minimum terms that range between one and nine years. Some of our leases include options to extend for up to five additional years; others include options to terminate the agreement within three years. Future minimum lease payments under non-cancellable leases as of December 31, 2019 are as follows (in thousands):

Year Ending December 31,	Operating Leases		Finance Leases
2020	$	22,461	$	5,896
2021	16,679		108
2022	13,319		12
2023	9,992		6
2024	8,569		—
Thereafter	11,899		—
Total	82,919		6,022
Imputed Interest	(11,017)		(140)
Total	$	71,902	$	5,882

In addition to the above, as of December 31, 2019, we have entered into an additional operating lease with future lease payments of $39 million that will commence in 2020 with a lease term of 10 years.

Leases

11. Leases

In the first quarter of 2019, we adopted Accounting Standards Codification ("ASC") 842, Leases, which replaced the previous accounting standard. The new lease standard is a right-of-use model, requiring most lessee agreements to be recorded on the balance sheet. The intent of the standard is to provide greater transparency about lessee obligations and activities. The primary impact to our financial statements is that most operating leases are recorded on our consolidated balance sheet and enhanced disclosures are required for both operating and finance leases. As permitted by ASC 842, our accounting policy is to evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

We adopted the standard using the modified retrospective approach, as of January 1, 2019. Prior year's financial results were not restated. On the adoption date, we recorded a right-of-use asset for $72 million in other assets, net, with a corresponding offset to other accrued liabilities and other noncurrent liabilities for $25 million and $47 million, respectively. There was no impact to retained deficit from adoption of the new standard.

The following table presents the components of lease expense (in thousands):

	Year Ended December 31, 2019
Operating lease cost	$	27,035
Finance lease cost:
Amortization of right-of-use assets	$	7,073
Interest on lease liabilities	453
Total finance lease cost	$	7,526

The following table presents supplemental cash flow information related to leases (in thousands):

	Year Ended December 31, 2019
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	28,374
Operating cash flows used in finance leases	453
Financing cash flows used in finance leases	6,731
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27,116
Finance leases	397

The following table presents supplemental balance sheet information related to leases (in thousands):

	Year Ended 12/31/2019
Operating Leases
Operating lease right-of-use assets	$	64,191
Other accrued liabilities	21,932
Other noncurrent liabilities	49,970
Total operating lease liabilities	$	71,902
Finance Leases
Property and equipment	35,349
Accumulated depreciation	(27,163)
Property and equipment, net	$	8,186
Other accrued liabilities	5,804
Other noncurrent liabilities	78
Total finance lease liabilities	$	5,882

The following table presents other supplemental information related to leases:

	December 31, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	4.9
Finance leases	1.2
Weighted Average Discount Rate
Operating leases	5.4	%
Finance leases	4.9	%

Lease Commitments

We lease certain facilities under long term operating leases. Certain of our lease agreements contain renewal options, early termination options and/or payment escalations based on fixed annual increases, local consumer price index changes or market rental reviews. We recognize rent expense with fixed rate increases and/or fixed rent reductions on a straight line basis over the term of the lease. We lease approximately 1.6 million square feet of office space in 93 locations in 48 countries. For the years ended December 31, 2019, 2018 and 2017, we recognized rent expense of $29 million, $30 million and $32 million, respectively.

Our leases have remaining minimum terms that range between one and nine years. Some of our leases include options to extend for up to five additional years; others include options to terminate the agreement within three years. Future minimum lease payments under non-cancellable leases as of December 31, 2019 are as follows (in thousands):

Year Ending December 31,	Operating Leases		Finance Leases
2020	$	22,461	$	5,896
2021	16,679		108
2022	13,319		12
2023	9,992		6
2024	8,569		—
Thereafter	11,899		—
Total	82,919		6,022
Imputed Interest	(11,017)		(140)
Total	$	71,902	$	5,882

In addition to the above, as of December 31, 2019, we have entered into an additional operating lease with future lease payments of $39 million that will commence in 2020 with a lease term of 10 years.