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Leases
 12 Months Ended
Dec. 31, 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 determined that the two remaining renewal options of five-years each are also reasonably certain to be exercised and; therefore concluded the 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 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 four lease agreements with the landlord to lease multiple premises in the HK1 Data Center. The first lease commenced in March 2020 with an initial term of 18 years with no renewal option available. The Company assessed the lease classification of that space at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining space 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.
In November 2020, the Company took possession and commence the lease of the second space in the HK1 Data Center with an initial lease term of approximately 17 years with no renewal option available. The Company assessed the lease classification of the second space at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended December 31, 2020, the Company recorded finance lease ROU asset and liability of $65.9 million Hong Kong dollars or $8.5 million at the exchange rate in effect on December 31, 2020.
Headquarters 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 determined 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 space in the AD1 Data Center. The Company concluded lease terms of both leases are 10 years, inclusive of a three-year renewal option
for one of the leases determined to be reasonably assured of exercise. 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.
Singapore Office ("SGO")
In April 2020, the Company entered into an office lease agreement, which commenced on August 1, 2020 with an initial term of seven years, two three-year renewal options and a one-time early termination option for a certain floor after the third year of the lease. The Company determined that the renewal options and the early termination option were not reasonably certain to be exercised and therefore, concluded the lease term was seven years. The Company assessed the lease classification at the commencement date and concluded that the lease should be accounted for as an operating lease. During the three months ended September 30, 2020, the Company recorded operating lease ROU asset and liability of $64.2 million Singapore dollars, or approximately $47.1 million, at the exchange rate in effect on September 30, 2020.
Seoul 1 ("SL1") Data Center
In September 2020, the phase 2 from a previously signed lease for the SL1 data center was delivered and commenced, with an initial lease term of approximately four years and three five-year renewal options. The Company concluded that one renewal option of five years is reasonably certain to be exercised and therefore, the concluded lease term was approximately nine years. The Company assessed the lease classification of the lease at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended September 30, 2020, the Company recorded finance lease ROU asset and liability of 31,777 million Korean Won and 30,386 million Korean Won, respectively, or $27.2 million and $26.0 million, respectively, at the exchange rate in effect on September 30, 2020.
Lease Expenses
The components of lease expenses are as follows (in thousands):
Years Ended December 31,
20202019
Finance lease cost
Amortization of right-of-use assets (1)
$120,169 $82,893 
Interest on lease liabilities
113,699 110,688 
Total finance lease cost
233,868 193,581 
Operating lease cost217,299 219,021 
Variable lease cost13,588 1,763 
Total lease cost$464,755 $414,365 
(1) Amortization of right-of-use assets is included within depreciation expense, and is recorded within cost of revenues, sales and marketing and general and administrative expenses in the consolidated statements of operations.
Other Information
Other information related to leases is as follows (in thousands, except years and percent):
Years Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$109,558 $107,000 
Operating cash flows from operating leases206,512 210,848 
Financing cash flows from finance leases115,288 126,486 
Right-of-use assets obtained in exchange for lease obligations: (1)
Finance leases$487,592 $387,808 
Operating leases108,797 145,025 
As of December 31,
20202019
Weighted-average remaining lease term - finance leases (2)
14 years15 years
Weighted-average remaining lease term - operating leases (2)
12 years13 years
Weighted-average discount rate - finance leases7 %9 %
Weighted-average discount rate - operating leases4 %4 %
Finance lease ROU assets (3)
$1,688,032 $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) Finance lease ROU assets are recorded within property, plant and equipment, net on the consolidated balance sheets. As of December 31, 2020 and December 31, 2019, the Company recorded $604.1 million and $474.8 million of accumulated amortization of finance lease ROU assets, respectively.
Maturities of Lease Liabilities
Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):
Year ended December 31, Operating LeasesFinance LeasesTotal
2021$199,291 $232,415 $431,706 
2022205,411 221,058 426,469 
2023188,724 215,909 404,633 
2024176,626 213,186 389,812 
2025165,437 209,424 374,861 
Thereafter1,032,186 1,928,094 2,960,280 
Total lease payments1,967,675 3,020,086 4,987,761 
Plus amount representing residual property value— 17,331 17,331 
Less imputed interest(504,841)(1,114,918)(1,619,759)
Total$1,462,834 $1,922,499 $3,385,333 
The Company entered into lease agreements in various locations that have not yet commenced as of December 31, 2020. These leases will commence between 2021 and 2022, with lease terms of 10 to 49 years and a total lease commitment of approximately $684.1 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 determined that the two remaining renewal options of five-years each are also reasonably certain to be exercised and; therefore concluded the 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 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 four lease agreements with the landlord to lease multiple premises in the HK1 Data Center. The first lease commenced in March 2020 with an initial term of 18 years with no renewal option available. The Company assessed the lease classification of that space at the commencement date and determined the lease should be accounted for as a finance lease. The Company will assess the remaining space 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.
In November 2020, the Company took possession and commence the lease of the second space in the HK1 Data Center with an initial lease term of approximately 17 years with no renewal option available. The Company assessed the lease classification of the second space at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended December 31, 2020, the Company recorded finance lease ROU asset and liability of $65.9 million Hong Kong dollars or $8.5 million at the exchange rate in effect on December 31, 2020.
Headquarters 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 determined 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 space in the AD1 Data Center. The Company concluded lease terms of both leases are 10 years, inclusive of a three-year renewal option
for one of the leases determined to be reasonably assured of exercise. 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.
Singapore Office ("SGO")
In April 2020, the Company entered into an office lease agreement, which commenced on August 1, 2020 with an initial term of seven years, two three-year renewal options and a one-time early termination option for a certain floor after the third year of the lease. The Company determined that the renewal options and the early termination option were not reasonably certain to be exercised and therefore, concluded the lease term was seven years. The Company assessed the lease classification at the commencement date and concluded that the lease should be accounted for as an operating lease. During the three months ended September 30, 2020, the Company recorded operating lease ROU asset and liability of $64.2 million Singapore dollars, or approximately $47.1 million, at the exchange rate in effect on September 30, 2020.
Seoul 1 ("SL1") Data Center
In September 2020, the phase 2 from a previously signed lease for the SL1 data center was delivered and commenced, with an initial lease term of approximately four years and three five-year renewal options. The Company concluded that one renewal option of five years is reasonably certain to be exercised and therefore, the concluded lease term was approximately nine years. The Company assessed the lease classification of the lease at the commencement date and determined the lease should be accounted for as a finance lease. During the three months ended September 30, 2020, the Company recorded finance lease ROU asset and liability of 31,777 million Korean Won and 30,386 million Korean Won, respectively, or $27.2 million and $26.0 million, respectively, at the exchange rate in effect on September 30, 2020.
Lease Expenses
The components of lease expenses are as follows (in thousands):
Years Ended December 31,
20202019
Finance lease cost
Amortization of right-of-use assets (1)
$120,169 $82,893 
Interest on lease liabilities
113,699 110,688 
Total finance lease cost
233,868 193,581 
Operating lease cost217,299 219,021 
Variable lease cost13,588 1,763 
Total lease cost$464,755 $414,365 
(1) Amortization of right-of-use assets is included within depreciation expense, and is recorded within cost of revenues, sales and marketing and general and administrative expenses in the consolidated statements of operations.
Other Information
Other information related to leases is as follows (in thousands, except years and percent):
Years Ended December 31,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$109,558 $107,000 
Operating cash flows from operating leases206,512 210,848 
Financing cash flows from finance leases115,288 126,486 
Right-of-use assets obtained in exchange for lease obligations: (1)
Finance leases$487,592 $387,808 
Operating leases108,797 145,025 
As of December 31,
20202019
Weighted-average remaining lease term - finance leases (2)
14 years15 years
Weighted-average remaining lease term - operating leases (2)
12 years13 years
Weighted-average discount rate - finance leases7 %9 %
Weighted-average discount rate - operating leases4 %4 %
Finance lease ROU assets (3)
$1,688,032 $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) Finance lease ROU assets are recorded within property, plant and equipment, net on the consolidated balance sheets. As of December 31, 2020 and December 31, 2019, the Company recorded $604.1 million and $474.8 million of accumulated amortization of finance lease ROU assets, respectively.
Maturities of Lease Liabilities
Maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):
Year ended December 31, Operating LeasesFinance LeasesTotal
2021$199,291 $232,415 $431,706 
2022205,411 221,058 426,469 
2023188,724 215,909 404,633 
2024176,626 213,186 389,812 
2025165,437 209,424 374,861 
Thereafter1,032,186 1,928,094 2,960,280 
Total lease payments1,967,675 3,020,086 4,987,761 
Plus amount representing residual property value— 17,331 17,331 
Less imputed interest(504,841)(1,114,918)(1,619,759)
Total$1,462,834 $1,922,499 $3,385,333 
The Company entered into lease agreements in various locations that have not yet commenced as of December 31, 2020. These leases will commence between 2021 and 2022, with lease terms of 10 to 49 years and a total lease commitment of approximately $684.1 million.