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Leases (Notes)

12 Months Ended

Dec. 31, 2019

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019. We elected to use the adoption date as our date of initial application and thus have not restated comparative prior periods. We elected the ‘package of practical

expedients’, which permits us not to reassess our prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us.

The new standard also provides practical expedients for an entity’s ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize right-of-use assets or lease liabilities, and this includes not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

The adoption of the new standard resulted in the recording of operating lease assets and lease liabilities of approximately $197 million and $201 million, respectively, as of January 1, 2019. The standard did not materially impact our consolidated net loss and had no impact on cash flows.

The components of lease expense were as follows:



	Classification	Year Ended December 31, 2019
Operating lease cost	DS&A Expenses	$	53,588
Finance lease cost:
Amortization of lease assets	DS&A Expenses	1,322
Interest on lease liabilities	Interest expense, net	1,189
Total finance lease cost		$	2,511
Short-term lease cost	DS&A Expenses	348
Variable lease cost	DS&A Expenses	16,415
Total lease cost		$	72,862

Variable lease cost consists primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities which are paid as incurred. Rent expense for all operating leases for the year ended December 31, 2018 was $56.1 million.

Supplemental balance sheet information is as follows:



	Classification	As of December 31, 2019
Assets:
Operating lease assets	Operating lease assets	$	142,219
Finance lease assets	Property and equipment, net	7,948
Total lease assets		$	150,167
Liabilities:
Current
Operating	Other current liabilities	$	31,568
Finance	Other current liabilities	1,014
Noncurrent
Operating	Operating lease liabilities, excluding current portion	117,080
Finance	Long-term debt, excluding current portion	11,692
Total lease liabilities		$	161,354

The gross value recorded under finance leases was $15.9 million and $26.2 million with associated accumulated depreciation of $8.0 million and $14.8 million as of December 31, 2019 and 2018, respectively.

Other information related to leases was as follows:



	Year Ended December 31, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	54,300
Financing cash flows from finance leases	$	1,205

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	33,933

Weighted average remaining lease term (years)
Operating leases	5.1
Finance leases	8.8

Weighted average discount rate
Operating leases	11.9		%
Finance leases	9.7		%

Maturities of lease liabilities as of December 31, 2019 were as follows:



	Operating Leases			Finance Leases			Total
2020	$	46,658		$	2,139		$	48,797
2021	43,689			2,024			45,713
2022	32,381			1,955			34,336
2023	25,314			1,910			27,224
2024	19,059			1,890			20,949
Thereafter	33,675			8,408			42,083
Total lease payments	200,776			18,326			219,102
Less: Interest	(52,128		)	(5,620		)	(57,748		)
Present value of lease liabilities	$	148,648		$	12,706		$	161,354

Leases

The components of lease expense were as follows:



	Classification	Year Ended December 31, 2019
Operating lease cost	DS&A Expenses	$	53,588
Finance lease cost:
Amortization of lease assets	DS&A Expenses	1,322
Interest on lease liabilities	Interest expense, net	1,189
Total finance lease cost		$	2,511
Short-term lease cost	DS&A Expenses	348
Variable lease cost	DS&A Expenses	16,415
Total lease cost		$	72,862

Supplemental balance sheet information is as follows:



	Classification	As of December 31, 2019
Assets:
Operating lease assets	Operating lease assets	$	142,219
Finance lease assets	Property and equipment, net	7,948
Total lease assets		$	150,167
Liabilities:
Current
Operating	Other current liabilities	$	31,568
Finance	Other current liabilities	1,014
Noncurrent
Operating	Operating lease liabilities, excluding current portion	117,080
Finance	Long-term debt, excluding current portion	11,692
Total lease liabilities		$	161,354

Other information related to leases was as follows:



	Year Ended December 31, 2019
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating and finance leases	$	54,300
Financing cash flows from finance leases	$	1,205

Right-of-use assets obtained in exchange for new operating and finance lease liabilities	$	33,933

Weighted average remaining lease term (years)
Operating leases	5.1
Finance leases	8.8

Weighted average discount rate
Operating leases	11.9		%
Finance leases	9.7		%

Maturities of lease liabilities as of December 31, 2019 were as follows:



	Operating Leases			Finance Leases			Total
2020	$	46,658		$	2,139		$	48,797
2021	43,689			2,024			45,713
2022	32,381			1,955			34,336
2023	25,314			1,910			27,224
2024	19,059			1,890			20,949
Thereafter	33,675			8,408			42,083
Total lease payments	200,776			18,326			219,102
Less: Interest	(52,128		)	(5,620		)	(57,748		)
Present value of lease liabilities	$	148,648		$	12,706		$	161,354