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Leases | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
Leases | Leases Significant Lease Transactions The following table summarizes the significant lease transactions during the year ended December 31, 2022 (in thousands):
|  |  |  |  |  |  |  | Renewal/Termination Options Excluded (1) |  |  |  | Net Incremental (1)
Lease |  | Quarter |  | Transaction |  |  |  |  | Lease Classification |  | ROU assets |  | ROU liabilities
Atlanta 1 ("AT1") data center lease extended & expansion (2) |  | Q1 |  | Extended lease term by 12 years with additional three 10-year renewal options |  |  |  | Two 10-year renewal options |  | Finance Lease |  | $71,994 |  | $72,549
|  |  |  |  |  | Operating Lease |  | (1,836) |  | (2,391)
Hong Kong 6 ("HK6") new land and building construction site |  | Q2 |  | New lease with a 15 year term |  |  |  | 5-year renewal option |  | Operating Lease |  | 195,245 |  | 195,245
Hong Kong 2 ("HK2") data center lease renewal |  | Q2 |  | Exercised the 3-year renewal option for Phase 1 & 2 (3) |  |  |  | Two 3-year renewal option |  | Operating Lease |  | 81,504 |  | 81,504
New York 3 ("NY3") data center lease amendment |  | Q4 |  | 26 year lease term after modification to remove early termination option |  |  |  | One 20-year renewal option and one 5-year renewal option |  | Finance Lease |  | 140,215 |  | 140,215
(1) The net incremental amounts represent the adjustments to the right of use ("ROU") assets and liabilities recorded during the quarter that the transactions were entered. (2) This lease had components previously classified as operating leases. (3) The incremental balance includes the impact of reassessing lease terms of complementary leases within HK2, resulting in new lease end dates ranging from June 2030 to October 2031 from including renewal options that are reasonably certain to be exercised. Lease Expenses The components of lease expenses are as follows (in thousands):
| Years Ended December 31,
| 2022 |  | 2021
Finance lease cost |  |  |
Amortization of right-of-use assets (1) | $ | 161,061 |  |  | $ | 157,057 |
Interest on lease liabilities | 112,518 |  |  | 117,896 |
Total finance lease cost | 273,579 |  |  | 274,953 |
Operating lease cost | 213,619 |  |  | 221,776 |
Variable lease cost | 41,237 |  |  | 33,066 |
Total lease cost | $ | 528,435 |  |  | $ | 529,795 |
(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,
| 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 109,514 |  |  | $ | 113,571 |
Operating cash flows from operating leases | 197,356 |  |  | 258,719 |
Financing cash flows from finance leases | 134,202 |  |  | 165,539 |
Right-of-use assets obtained in exchange for lease obligations: (1) |  |  |
Finance leases | $ | 293,858 |  |  | $ | 412,214 |
Operating leases | 355,040 |  |  | 10,446 |
| As of December 31,
| 2022 |  | 2021
Weighted-average remaining lease term - finance leases (2) | 15 years |  | 14 years
Weighted-average remaining lease term - operating leases (2) | 12 years |  | 12 years
Weighted-average discount rate - finance leases | 6 | % |  | 7 | %
Weighted-average discount rate - operating leases | 4 | % |  | 4 | %
Finance lease ROU assets (3) | $ | 2,018,070 |  |  | $ | 1,875,696 |
(1) Represents all non-cash changes in ROU assets. (2) Includes lease renewal options that are reasonably certain to be exercised. (3) As of December 31, 2022 and 2021, we recorded accumulated amortization of finance lease assets of $840.0 million and $726.4 million, respectively. Finance lease assets are recorded within property, plant and equipment, net on the consolidated balance sheets. Maturities of Lease Liabilities Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
Year ended December 31, |  | Operating Leases |  | Finance Leases |  | Total
2023 |  | $ | 181,461 |  |  | $ | 263,052 |  |  | $ | 444,513 |
2024 |  | 190,939 |  |  | 257,457 |  |  | 448,396 |
2025 |  | 185,430 |  |  | 276,825 |  |  | 462,255 |
2026 |  | 182,117 |  |  | 245,798 |  |  | 427,915 |
2027 |  | 158,465 |  |  | 248,767 |  |  | 407,232 |
Thereafter |  | 1,010,606 |  |  | 2,191,044 |  |  | 3,201,650 |
Total lease payments |  | 1,909,018 |  |  | 3,482,943 |  |  | 5,391,961 |
Less imputed interest |  | (496,668) |  |  | (1,187,833) |  |  | (1,684,501) |
Total |  | $ | 1,412,350 |  |  | $ | 2,295,110 |  |  | $ | 3,707,460 |
We entered into agreements with various landlords primarily to lease data center spaces and ground leases which have not yet commenced as of December 31, 2022. These leases will commence between year 2023 and 2025, with lease terms of 2 to 26 years and total lease commitments of approximately $424.7 million.
Leases | Leases Significant Lease Transactions The following table summarizes the significant lease transactions during the year ended December 31, 2022 (in thousands):
|  |  |  |  |  |  |  | Renewal/Termination Options Excluded (1) |  |  |  | Net Incremental (1)
Lease |  | Quarter |  | Transaction |  |  |  |  | Lease Classification |  | ROU assets |  | ROU liabilities
Atlanta 1 ("AT1") data center lease extended & expansion (2) |  | Q1 |  | Extended lease term by 12 years with additional three 10-year renewal options |  |  |  | Two 10-year renewal options |  | Finance Lease |  | $71,994 |  | $72,549
|  |  |  |  |  | Operating Lease |  | (1,836) |  | (2,391)
Hong Kong 6 ("HK6") new land and building construction site |  | Q2 |  | New lease with a 15 year term |  |  |  | 5-year renewal option |  | Operating Lease |  | 195,245 |  | 195,245
Hong Kong 2 ("HK2") data center lease renewal |  | Q2 |  | Exercised the 3-year renewal option for Phase 1 & 2 (3) |  |  |  | Two 3-year renewal option |  | Operating Lease |  | 81,504 |  | 81,504
New York 3 ("NY3") data center lease amendment |  | Q4 |  | 26 year lease term after modification to remove early termination option |  |  |  | One 20-year renewal option and one 5-year renewal option |  | Finance Lease |  | 140,215 |  | 140,215
(1) The net incremental amounts represent the adjustments to the right of use ("ROU") assets and liabilities recorded during the quarter that the transactions were entered. (2) This lease had components previously classified as operating leases. (3) The incremental balance includes the impact of reassessing lease terms of complementary leases within HK2, resulting in new lease end dates ranging from June 2030 to October 2031 from including renewal options that are reasonably certain to be exercised. Lease Expenses The components of lease expenses are as follows (in thousands):
| Years Ended December 31,
| 2022 |  | 2021
Finance lease cost |  |  |
Amortization of right-of-use assets (1) | $ | 161,061 |  |  | $ | 157,057 |
Interest on lease liabilities | 112,518 |  |  | 117,896 |
Total finance lease cost | 273,579 |  |  | 274,953 |
Operating lease cost | 213,619 |  |  | 221,776 |
Variable lease cost | 41,237 |  |  | 33,066 |
Total lease cost | $ | 528,435 |  |  | $ | 529,795 |
(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,
| 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from finance leases | $ | 109,514 |  |  | $ | 113,571 |
Operating cash flows from operating leases | 197,356 |  |  | 258,719 |
Financing cash flows from finance leases | 134,202 |  |  | 165,539 |
Right-of-use assets obtained in exchange for lease obligations: (1) |  |  |
Finance leases | $ | 293,858 |  |  | $ | 412,214 |
Operating leases | 355,040 |  |  | 10,446 |
| As of December 31,
| 2022 |  | 2021
Weighted-average remaining lease term - finance leases (2) | 15 years |  | 14 years
Weighted-average remaining lease term - operating leases (2) | 12 years |  | 12 years
Weighted-average discount rate - finance leases | 6 | % |  | 7 | %
Weighted-average discount rate - operating leases | 4 | % |  | 4 | %
Finance lease ROU assets (3) | $ | 2,018,070 |  |  | $ | 1,875,696 |
(1) Represents all non-cash changes in ROU assets. (2) Includes lease renewal options that are reasonably certain to be exercised. (3) As of December 31, 2022 and 2021, we recorded accumulated amortization of finance lease assets of $840.0 million and $726.4 million, respectively. Finance lease assets are recorded within property, plant and equipment, net on the consolidated balance sheets. Maturities of Lease Liabilities Maturities of lease liabilities as of December 31, 2022 are as follows (in thousands):
Year ended December 31, |  | Operating Leases |  | Finance Leases |  | Total
2023 |  | $ | 181,461 |  |  | $ | 263,052 |  |  | $ | 444,513 |
2024 |  | 190,939 |  |  | 257,457 |  |  | 448,396 |
2025 |  | 185,430 |  |  | 276,825 |  |  | 462,255 |
2026 |  | 182,117 |  |  | 245,798 |  |  | 427,915 |
2027 |  | 158,465 |  |  | 248,767 |  |  | 407,232 |
Thereafter |  | 1,010,606 |  |  | 2,191,044 |  |  | 3,201,650 |
Total lease payments |  | 1,909,018 |  |  | 3,482,943 |  |  | 5,391,961 |
Less imputed interest |  | (496,668) |  |  | (1,187,833) |  |  | (1,684,501) |
Total |  | $ | 1,412,350 |  |  | $ | 2,295,110 |  |  | $ | 3,707,460 |
We entered into agreements with various landlords primarily to lease data center spaces and ground leases which have not yet commenced as of December 31, 2022. These leases will commence between year 2023 and 2025, with lease terms of 2 to 26 years and total lease commitments of approximately $424.7 million.

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