Leases

9 Months Ended

Sep. 30, 2020

Note 14 - Leases

The Company has operating leases for corporate offices under non-cancelable agreements with various expiration dates. Our leases do not have significant rent escalation, holidays, concessions, material residual value guarantees, material restrictive covenants, or contingent rent provisions. Our leases include both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component. In addition, we have elected the practical expedient to exclude short-term leases, which have an original lease term of less than one year, from our right-of-use assets and lease liabilities as well as the package of practical expedients relating to adoption of Topic 842.

The Company also has a sublease of a former corporate office. The sublease has a remaining lease term of less than one year. Sublease income, which is recorded as a reduction of rent expense and allocated to the appropriate financial statement line item to arrive at Income from operations in the Consolidated Statements of Operations was immaterial for the three and nine months ended September 30, 2020 and 2019.

The following are additional details related to leases recorded on our balance sheet as of September 30, 2020 and December 31, 2019:


		September 30,		December 31,
		2020		2019
(in millions)		(Unaudited)
Assets
Operating lease right-of-use assets, net	Operating leases	$	34.0	$	36.8

Liabilities
Current portion of operating lease liabilities	Operating leases	$	4.9	$	4.0
Operating lease liabilities, net of current portion	Operating leases	$	37.0	$	40.7

Rent expense was $1.8 million and $1.8 million for the three months ended September 30, 2020 and 2019, respectively. Rent expense was $5.5 million and $4.3 million for the nine months ended September 30, 2020 and 2019, respectively.

Other information related to leases was as follows:


(unaudited, in millions)	Three Months Ended September 30,				Nine Months Ended September 30,
Supplemental Cash Flow Information	2020		2019		2020		2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	1.5	$	0.9	$	5.3	$	2.5

Lease liabilities arising from obtaining right-of-use assets
From Zoom Information, Inc. acquisition	$	—	$	—	$	—	$	28.6
Other	$	—	$	—	$	0.1	$	0.2


	As of
	September 30, 2020		December 31, 2019
Weighted average remaining lease term (in years)	8.0		8.6
Weighted average discount rate	6.3	%	6.3	%

The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized on the condensed consolidated balance sheets as of September 30, 2020 (in millions):


Year Ending December 31,	Operating Leases
2020 (excluding nine months ended September 30, 2020)	$	1.7
2021	7.5
2022	7.6
2023	7.2
2024	6.8
Thereafter	22.9
Total future minimum lease payments	53.7
Less effects of discounting	11.8
Total lease liabilities	$	41.9

Reported as of September 30, 2020
Current portion of operating lease liabilities	$	4.9
Operating lease liabilities, net of current portion	37.0
Total lease liabilities	$	41.9

The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced.

As of September 30, 2020, we had additional operating leases for office space that have not yet commenced with undiscounted future lease payments of $2.7 million. These operating leases will commence in the fourth quarter of fiscal year 2020. Expense associated with short term leases and variable lease costs were immaterial for the three and nine months ended September 30, 2020. The expense related to short-term leases reasonably reflects our short-term lease commitments.