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Leases | 6 Months Ended
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Jun. 30, 2020
Leases [Abstract] |
Leases | Leases Significant Lease Transactions Silicon Valley 4 ("SV4") Data Center In February 2020, the Company exercised its first renewal option available to extend the lease term for the SV4 Data Center for five years. The Company concluded that the two remaining renewal options of five-years each are reasonably certain to be exercised; therefore the concluded lease term is 15 years and 7 months. The lease was previously accounted for as an operating lease. The Company reassessed the lease classification of the SV4 lease and determined the lease should be accounted for as a finance lease. During the three months ended March 31, 2020, the Company recorded finance lease right-of-use ("ROU") asset and liability of $62.8 million and $63.3 million, respectively. Hong Kong 1 ("HK1") Data Center In March 2020, the Company entered into several lease agreements with the landlord to lease several premises in the HK1 Data Center. One of the premises commenced in March 2020 with an initial term of 18 years. The Company assessed the lease classification of that premises at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining premises when the leases commence. During the three months ended March 31, 2020, the Company recorded finance lease ROU asset and liability of $163.0 million Hong Kong dollars or $21.0 million at the exchange rate in effect on March 31, 2020. Headquarter Office in Redwood City, California ("HQ Office") In April 2020, the Company entered into a lease amendment to (i) extend the lease term of the existing space for another 10.5 years and (ii) lease additional space within its HQ Office building, which commenced on June 1, 2020. Both spaces have two five-year renewal options which the Company determined were not reasonably certain to be exercised. Therefore, the concluded lease term for both spaces was approximately 11 years, expiring on March 31, 2031. The existing space was previously accounted for as a finance lease. The Company concluded that the building and land components for both spaces should be accounted for as finance leases and operating leases, respectively. During the three months ended June 30, 2020, the Company recorded incremental finance lease ROU asset and liability of $42.2 million and operating lease ROU asset and liability of $8.3 million. Singapore 1 ("SG1") Data Center In May 2020, the Company exercised a three-year renewal option on the lease of the existing space and entered into a lease agreement to lease additional space in the SG1 Data Center. The building and land were originally accounted for as a finance lease and operating lease, respectively. The Company concluded the remaining five three-year renewal options were reasonably certain to be exercised and therefore, the concluded lease term was 18 years. The Company reassessed the lease classification and determined that the lease should be accounted for as finance lease. Land was determined to not be a component of the lease as the Company no longer controlled substantially all of the economic benefits from its use. The Company recorded incremental finance lease ROU asset and liability of $99.5 million Singapore dollars, or approximately $71.4 million, and de-recognized operating lease ROU asset and liability of $11.4 million Singapore dollars, or approximately $8.1 million, at the exchange rate in effect on June 30, 2020, during the three months ended June 30, 2020. Abu Dhabi 1 ("AD1") Data Center In June 2020, the Company entered into two lease agreements to lease additional spaces in the AD1 Data Center. The Company concluded lease terms of both leases are 10 years, including a three-year renewal option for one of the leases. The Company assessed the lease classifications and determined that the leases should be accounted for as finance leases. During the three months ended June 30, 2020, the Company recorded finance lease ROU assets and liabilities of 261.9 million United Arab Emirates Dirham in aggregate, or approximately $71.3 million at the exchange rate in effect on June 30, 2020. Lease Expenses The components of lease expenses are as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Finance lease cost |  |  |  |  |  |  |
Amortization of right-of-use assets (1) | $ | 28,897 |  |  | 19,811 |  |  | $ | 54,062 |  |  | $ | 39,897 |
Interest on lease liabilities | 28,438 |  |  | 27,111 |  |  | 56,263 |  |  | 54,634 |
Total finance lease cost | 57,335 |  |  | 46,922 |  |  | 110,325 |  |  | 94,531 |
Operating lease cost | 52,556 |  |  | 54,920 |  |  | 106,347 |  |  | 106,559 |
Total lease cost | $ | 109,891 |  |  | $ | 101,842 |  |  | $ | 216,672 |  |  | $ | 201,090 |
(1) Amortization of right-of-use 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 Other information related to leases is as follows (in thousands):
| Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 54,417 |  | $ | 52,701 |
Operating cash flows from operating leases | 102,146 |  | 101,875 |
Financing cash flows from finance leases | 42,681 |  | 43,112 |
Right-of-use assets obtained in exchange for lease obligations: (1) |  |
Finance leases | $ | 311,951 |  | $ | 2,597 |
Operating leases | 14,114 |  | 77,905 |
| As of June 30, 2020 | As of December 31, 2019
Weighted-average remaining lease term - finance leases (2) | 15 years |  | 15 years |
Weighted-average remaining lease term - operating leases (2) | 13 years |  | 13 years |
Weighted-average discount rate - finance leases | 8 | % | 9 | %
Weighted-average discount rate - operating leases | 4 | % | 4 | %
Finance lease assets (3) | $ | 1,516,351 |  | $ | 1,277,614 |
(1) Represents all non-cash changes in ROU assets. (2) Includes lease renewal options that are reasonably certain to be exercised. (3) As of June 30, 2020 and December 31, 2019, the Company recorded accumulated amortization of finance lease assets of $528.6 million and $474.8 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 June 30, 2020 are as follows (in thousands):
| Operating Leases |  | Finance Leases |  | Total
2020 (6 months remaining) | $ | 87,527 |  |  | $ | 95,454 |  |  | $ | 182,981 |
2021 | 192,368 |  |  | 205,435 |  |  | 397,803 |
2022 | 184,049 |  |  | 202,461 |  |  | 386,510 |
2023 | 168,561 |  |  | 197,071 |  |  | 365,632 |
2024 | 156,627 |  |  | 194,842 |  |  | 351,469 |
Thereafter | 1,094,015 |  |  | 1,975,440 |  |  | 3,069,455 |
Total lease payments | 1,883,147 |  |  | 2,870,703 |  |  | 4,753,850 |
Plus amount representing residual property value | — |  |  | 17,626 |  |  | 17,626 |
Less imputed interest | (499,952 | ) |  | (1,127,481 | ) |  | (1,627,433 | )
Total | $ | 1,383,195 |  |  | $ | 1,760,848 |  |  | $ | 3,144,043 |
The Company entered into agreements with various landlords primarily to lease data center spaces and ground leases which have not yet commenced as of June 30, 2020. These leases will commence between fiscal years 2020 and 2022, with lease terms of 1 to 49 years and a total lease commitment of approximately $705.6 million.
Leases | Leases Significant Lease Transactions Silicon Valley 4 ("SV4") Data Center In February 2020, the Company exercised its first renewal option available to extend the lease term for the SV4 Data Center for five years. The Company concluded that the two remaining renewal options of five-years each are reasonably certain to be exercised; therefore the concluded lease term is 15 years and 7 months. The lease was previously accounted for as an operating lease. The Company reassessed the lease classification of the SV4 lease and determined the lease should be accounted for as a finance lease. During the three months ended March 31, 2020, the Company recorded finance lease right-of-use ("ROU") asset and liability of $62.8 million and $63.3 million, respectively. Hong Kong 1 ("HK1") Data Center In March 2020, the Company entered into several lease agreements with the landlord to lease several premises in the HK1 Data Center. One of the premises commenced in March 2020 with an initial term of 18 years. The Company assessed the lease classification of that premises at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining premises when the leases commence. During the three months ended March 31, 2020, the Company recorded finance lease ROU asset and liability of $163.0 million Hong Kong dollars or $21.0 million at the exchange rate in effect on March 31, 2020. Headquarter Office in Redwood City, California ("HQ Office") In April 2020, the Company entered into a lease amendment to (i) extend the lease term of the existing space for another 10.5 years and (ii) lease additional space within its HQ Office building, which commenced on June 1, 2020. Both spaces have two five-year renewal options which the Company determined were not reasonably certain to be exercised. Therefore, the concluded lease term for both spaces was approximately 11 years, expiring on March 31, 2031. The existing space was previously accounted for as a finance lease. The Company concluded that the building and land components for both spaces should be accounted for as finance leases and operating leases, respectively. During the three months ended June 30, 2020, the Company recorded incremental finance lease ROU asset and liability of $42.2 million and operating lease ROU asset and liability of $8.3 million. Singapore 1 ("SG1") Data Center In May 2020, the Company exercised a three-year renewal option on the lease of the existing space and entered into a lease agreement to lease additional space in the SG1 Data Center. The building and land were originally accounted for as a finance lease and operating lease, respectively. The Company concluded the remaining five three-year renewal options were reasonably certain to be exercised and therefore, the concluded lease term was 18 years. The Company reassessed the lease classification and determined that the lease should be accounted for as finance lease. Land was determined to not be a component of the lease as the Company no longer controlled substantially all of the economic benefits from its use. The Company recorded incremental finance lease ROU asset and liability of $99.5 million Singapore dollars, or approximately $71.4 million, and de-recognized operating lease ROU asset and liability of $11.4 million Singapore dollars, or approximately $8.1 million, at the exchange rate in effect on June 30, 2020, during the three months ended June 30, 2020. Abu Dhabi 1 ("AD1") Data Center In June 2020, the Company entered into two lease agreements to lease additional spaces in the AD1 Data Center. The Company concluded lease terms of both leases are 10 years, including a three-year renewal option for one of the leases. The Company assessed the lease classifications and determined that the leases should be accounted for as finance leases. During the three months ended June 30, 2020, the Company recorded finance lease ROU assets and liabilities of 261.9 million United Arab Emirates Dirham in aggregate, or approximately $71.3 million at the exchange rate in effect on June 30, 2020. Lease Expenses The components of lease expenses are as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Finance lease cost |  |  |  |  |  |  |
Amortization of right-of-use assets (1) | $ | 28,897 |  |  | 19,811 |  |  | $ | 54,062 |  |  | $ | 39,897 |
Interest on lease liabilities | 28,438 |  |  | 27,111 |  |  | 56,263 |  |  | 54,634 |
Total finance lease cost | 57,335 |  |  | 46,922 |  |  | 110,325 |  |  | 94,531 |
Operating lease cost | 52,556 |  |  | 54,920 |  |  | 106,347 |  |  | 106,559 |
Total lease cost | $ | 109,891 |  |  | $ | 101,842 |  |  | $ | 216,672 |  |  | $ | 201,090 |
(1) Amortization of right-of-use 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 Other information related to leases is as follows (in thousands):
| Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 54,417 |  | $ | 52,701 |
Operating cash flows from operating leases | 102,146 |  | 101,875 |
Financing cash flows from finance leases | 42,681 |  | 43,112 |
Right-of-use assets obtained in exchange for lease obligations: (1) |  |
Finance leases | $ | 311,951 |  | $ | 2,597 |
Operating leases | 14,114 |  | 77,905 |
| As of June 30, 2020 | As of December 31, 2019
Weighted-average remaining lease term - finance leases (2) | 15 years |  | 15 years |
Weighted-average remaining lease term - operating leases (2) | 13 years |  | 13 years |
Weighted-average discount rate - finance leases | 8 | % | 9 | %
Weighted-average discount rate - operating leases | 4 | % | 4 | %
Finance lease assets (3) | $ | 1,516,351 |  | $ | 1,277,614 |
(1) Represents all non-cash changes in ROU assets. (2) Includes lease renewal options that are reasonably certain to be exercised. (3) As of June 30, 2020 and December 31, 2019, the Company recorded accumulated amortization of finance lease assets of $528.6 million and $474.8 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 June 30, 2020 are as follows (in thousands):
| Operating Leases |  | Finance Leases |  | Total
2020 (6 months remaining) | $ | 87,527 |  |  | $ | 95,454 |  |  | $ | 182,981 |
2021 | 192,368 |  |  | 205,435 |  |  | 397,803 |
2022 | 184,049 |  |  | 202,461 |  |  | 386,510 |
2023 | 168,561 |  |  | 197,071 |  |  | 365,632 |
2024 | 156,627 |  |  | 194,842 |  |  | 351,469 |
Thereafter | 1,094,015 |  |  | 1,975,440 |  |  | 3,069,455 |
Total lease payments | 1,883,147 |  |  | 2,870,703 |  |  | 4,753,850 |
Plus amount representing residual property value | — |  |  | 17,626 |  |  | 17,626 |
Less imputed interest | (499,952 | ) |  | (1,127,481 | ) |  | (1,627,433 | )
Total | $ | 1,383,195 |  |  | $ | 1,760,848 |  |  | $ | 3,144,043 |
The Company entered into agreements with various landlords primarily to lease data center spaces and ground leases which have not yet commenced as of June 30, 2020. These leases will commence between fiscal years 2020 and 2022, with lease terms of 1 to 49 years and a total lease commitment of approximately $705.6 million.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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