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Leases
 3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Leases Leases
The Company has operating leases for corporate offices and data centers, and finance leases for infrastructure and office equipment. The Company’s leases have remaining lease terms of 1 year to 14 years, some of which include options to extend the leases for up to 5 years.

The Company also has subleases for several floors of its former corporate offices. The Company classifies its subleases as operating leases. The subleases have remaining lease terms of 1 year to 9 years. Sublease income, which is recorded as a reduction of rental expense, was $4.5 million and $3.9 million during the three months ended March 31, 2022 and 2021 respectively.

Future minimum lease payments under non-cancellable leases as of March 31, 2022 were as follows:

Year ending December 31,
Operating leases(1)
Finance leases
2022 (excluding the three months ended March 31, 2022)
$84.3 $96.4 
202396.6 98.5 
202486.4 63.4 
202581.0 25.4 
202661.4 1.2 
Thereafter460.2 — 
Total future minimum lease payments869.9 284.9 
Less imputed interest(151.0)(9.4)
Less tenant improvement receivables(4.0)— 
Total liability$714.9 $275.5 
(1) Consists of future non-cancelable minimum rental payments under operating leases for the Company’s corporate offices and data centers where the Company has possession, excluding rent payments from the Company’s sub-tenants and variable operating expenses.

Future non-cancelable rent payments from the Company's subtenants as of March 31, 2022 were as follows:

Year ending December 31,Operating leases
2022 (excluding the three months ended March 31, 2022)
$17.8 
202314.6 
202413.6 
202512.6 
20268.9 
Thereafter13.3 
Total future sublease rent payments80.8 
Less sub-tenant incentive(1.1)
Total future sublease rent payments, net$79.7 

In 2017, the Company signed a 15 year lease agreement for office space in San Francisco, California, to serve as its corporate headquarters which commenced in 2018. The Company’s obligations under the lease are supported by a $34.2 million letter of credit, which reduced the borrowing capacity under the revolving credit facility. As of March 31, 2022, the Company's remaining minimum obligation for its headquarters was $590.7 million.

In the fourth quarter of 2020, the Company announced a Virtual First work model pursuant to which remote work has become the primary experience for all of its employees. As part of the Virtual First strategy, Dropbox retained a portion of its office space to be used for the Company’s team collaboration use and a portion will be marketed for sublease. The Company evaluated certain of its right-of-use assets and other lease related assets including leasehold improvements, furniture and fixtures, and computer equipment for impairment under ASC 360.

In connection with this analysis, the Company reassessed its real estate asset groups and estimated the fair value of the office space to be subleased using current market conditions. Where the carrying value of the individual asset groups exceeded their fair value, an impairment charge was recognized for the difference.

The company recorded total impairment of $17.3 million for right-of-use and other lease related assets during the three months ended March 31, 2021. During the three months ended March 31, 2022, the Company did not record impairment.

As of March 31, 2022, the Company has sublease commitments of $32.8 million that have not yet commenced, with sublease terms of 10 to 11 years. The company has no other commitments for operating leases that have not commenced.
Leases Leases
The Company has operating leases for corporate offices and data centers, and finance leases for infrastructure and office equipment. The Company’s leases have remaining lease terms of 1 year to 14 years, some of which include options to extend the leases for up to 5 years.

The Company also has subleases for several floors of its former corporate offices. The Company classifies its subleases as operating leases. The subleases have remaining lease terms of 1 year to 9 years. Sublease income, which is recorded as a reduction of rental expense, was $4.5 million and $3.9 million during the three months ended March 31, 2022 and 2021 respectively.

Future minimum lease payments under non-cancellable leases as of March 31, 2022 were as follows:

Year ending December 31,
Operating leases(1)
Finance leases
2022 (excluding the three months ended March 31, 2022)
$84.3 $96.4 
202396.6 98.5 
202486.4 63.4 
202581.0 25.4 
202661.4 1.2 
Thereafter460.2 — 
Total future minimum lease payments869.9 284.9 
Less imputed interest(151.0)(9.4)
Less tenant improvement receivables(4.0)— 
Total liability$714.9 $275.5 
(1) Consists of future non-cancelable minimum rental payments under operating leases for the Company’s corporate offices and data centers where the Company has possession, excluding rent payments from the Company’s sub-tenants and variable operating expenses.

Future non-cancelable rent payments from the Company's subtenants as of March 31, 2022 were as follows:

Year ending December 31,Operating leases
2022 (excluding the three months ended March 31, 2022)
$17.8 
202314.6 
202413.6 
202512.6 
20268.9 
Thereafter13.3 
Total future sublease rent payments80.8 
Less sub-tenant incentive(1.1)
Total future sublease rent payments, net$79.7 

In 2017, the Company signed a 15 year lease agreement for office space in San Francisco, California, to serve as its corporate headquarters which commenced in 2018. The Company’s obligations under the lease are supported by a $34.2 million letter of credit, which reduced the borrowing capacity under the revolving credit facility. As of March 31, 2022, the Company's remaining minimum obligation for its headquarters was $590.7 million.

In the fourth quarter of 2020, the Company announced a Virtual First work model pursuant to which remote work has become the primary experience for all of its employees. As part of the Virtual First strategy, Dropbox retained a portion of its office space to be used for the Company’s team collaboration use and a portion will be marketed for sublease. The Company evaluated certain of its right-of-use assets and other lease related assets including leasehold improvements, furniture and fixtures, and computer equipment for impairment under ASC 360.

In connection with this analysis, the Company reassessed its real estate asset groups and estimated the fair value of the office space to be subleased using current market conditions. Where the carrying value of the individual asset groups exceeded their fair value, an impairment charge was recognized for the difference.

The company recorded total impairment of $17.3 million for right-of-use and other lease related assets during the three months ended March 31, 2021. During the three months ended March 31, 2022, the Company did not record impairment.

As of March 31, 2022, the Company has sublease commitments of $32.8 million that have not yet commenced, with sublease terms of 10 to 11 years. The company has no other commitments for operating leases that have not commenced.