XML 33 R19.htm IDEA: XBRL DOCUMENT v3.20.4
LEASES
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
LEASES LEASES
Adoption of ASC Topic 842, Leases
On January 1, 2019, we adopted ASC Topic 842 using the modified retrospective transition method. Beginning on January 1, 2019, our consolidated financial statements are presented in accordance with the revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies. Aside from the impact to our consolidated balance sheet discussed in Note 2, Summary of Significant Accounting Policies, lease presentation within the consolidated statements of operations and consolidated statements of cash flows are substantially consistent with historical treatment.
General Description of Leases
Our operating leases primarily consist of leases for real estate throughout the world with lease expirations between 2021 and 2027. These arrangements typically do not transfer ownership of the underlying asset as we do not assume, nor do we intend to assume, the risks and rewards of ownership. Our finance leases are related to purchases of property and equipment, primarily computer hardware, with expirations between 2021 and 2023. We have also subleased certain office facilities under operating lease agreements, with expirations between 2023 and 2026.
We lease our headquarters located in Chicago, Illinois ("600 West Chicago"). Our lease agreement for 600 West Chicago extends through January 31, 2026 and includes rent escalations that range from one to two percent per year, as well as expansion options and a five-year renewal option. The 600 West Chicago lease represents $66.8 million of the estimated future payments under operating leases shown in the table below. We account for the 600 West Chicago lease as an operating lease and recognize rent expense on a straight-line basis, taking into account rent escalations and lease incentives. We sublease a portion of our office space at 600 West Chicago to Uptake, Inc., a Lightbank LLC portfolio company as a related party transaction. The sublease was a market rate transaction on terms that we believe are no less favorable than would have been reached with an unrelated party. The sublease extends through January 31, 2026 and sublease rentals over the entire term total $18.2 million.
For more information about our lease accounting policies, including lease recognition policy and significant assumptions and judgments used, see Note 2, Summary of Significant Accounting Policies.
The following summarizes right-of-use assets as of December 31, 2020 and 2019 (in thousands):
December 31, 2020December 31, 2019
Right-of-use assets - operating leases$107,509 $133,832 
Right-of-use assets - finance leases (1)
21,523 28,193 
Total right-of-use assets, gross129,032 162,025 
Less: accumulated depreciation and amortization (44,590)(36,380)
Right-of-use assets, net $84,442 $125,645 
(1)Right-of-use assets for finance leases are included in Property, equipment and software, net on the consolidated balance sheet.
Due to the triggering event and subsequent review of long-lived assets for impairment in the first quarter of 2020, as described in Note 3, COVID-19 Pandemic, we recognized a long-lived asset impairment of $10.5 million related to right-of-use assets - operating leases and $1.3 million related to right-of-use assets - finance leases within our International segment related to our EMEA operations, which are presented in Long-lived asset impairments on the consolidated statements of operations.
Due to actions taken under our restructuring plan, we recognized long-lived asset impairments of $16.0 million related to right-of-use assets - operating leases for the year ended December 31, 2020, which is presented in Restructuring and related charges on the consolidated statements of operations.
The following table summarizes our lease costs and sublease income for the year ended December 31, 2020 and 2019 (in thousands):
Year Ended December 31,
20202019
Financing lease cost:
Amortization of right-of-use assets$6,737 $18,922 
Interest on lease liabilities522 1,021 
Total finance lease cost7,259 19,943 
Operating lease cost (1) (2)
30,870 34,397 
Variable lease cost (3)
8,143 8,551 
Short-term lease cost313 365 
Sublease income, gross (4)
(4,693)(5,045)
Total lease cost$41,892 $58,211 
(1)Rent expense under operating leases was $40.1 million for the year ended December 31, 2018.
(2)Operating lease costs presented as Selling, general and administrative and Restructuring and related charges totaled $23.1 million and $7.8 million in the consolidated statements of operations for the year ended December 31, 2020.
(3)Variable lease costs presented as Selling, general and administrative and Restructuring and related charges totaled $7.0 million and $1.1 million in the consolidated statements of operations for the year ended December 31, 2020.
(4)Sublease income, gross presented as Selling, general and administrative and Restructuring and related charges totaled $1.2 million and $3.5 million in the consolidated statements of operations for the year ended December 31, 2020. Sublease income was $6.5 million for the year ended December 31, 2018.
As of December 31, 2020, the future payments under finance leases and operating leases for each of the next five years and thereafter are as follows (in thousands):
Finance LeasesOperating Leases
2021$4,717 $38,690 
2022715 35,451 
202312 27,025 
2024— 19,599 
2025— 16,175 
Thereafter — 1,701 
Total minimum lease payments5,444 138,641 
Less: Amount representing interest(92)(14,581)
Present value of net minimum lease payments5,352 124,060 
Less: Current portion of lease obligations(4,622)(33,133)
Total long-term lease obligations$730 $90,927 
As of December 31, 2020, we do not have any non-cancelable operating lease commitments that have not yet commenced.
As of December 31, 2020, the future amounts due under subleases for each of the next five years and thereafter are as follows (in thousands):
Subleases
2021$5,065 
20225,103 
20234,385 
20242,333 
20252,362 
Thereafter197 
Total future sublease income $19,445 
As of December 31, 2020, the weighted-average remaining lease term and weighted-average discount rate for our finance leases and operating leases were as follows:
Finance LeasesOperating Leases
Weighted-average lease term1 year4 years
Weighted-average discount rate5.4 %5.4 %
LEASES LEASES
Adoption of ASC Topic 842, Leases
On January 1, 2019, we adopted ASC Topic 842 using the modified retrospective transition method. Beginning on January 1, 2019, our consolidated financial statements are presented in accordance with the revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies. Aside from the impact to our consolidated balance sheet discussed in Note 2, Summary of Significant Accounting Policies, lease presentation within the consolidated statements of operations and consolidated statements of cash flows are substantially consistent with historical treatment.
General Description of Leases
Our operating leases primarily consist of leases for real estate throughout the world with lease expirations between 2021 and 2027. These arrangements typically do not transfer ownership of the underlying asset as we do not assume, nor do we intend to assume, the risks and rewards of ownership. Our finance leases are related to purchases of property and equipment, primarily computer hardware, with expirations between 2021 and 2023. We have also subleased certain office facilities under operating lease agreements, with expirations between 2023 and 2026.
We lease our headquarters located in Chicago, Illinois ("600 West Chicago"). Our lease agreement for 600 West Chicago extends through January 31, 2026 and includes rent escalations that range from one to two percent per year, as well as expansion options and a five-year renewal option. The 600 West Chicago lease represents $66.8 million of the estimated future payments under operating leases shown in the table below. We account for the 600 West Chicago lease as an operating lease and recognize rent expense on a straight-line basis, taking into account rent escalations and lease incentives. We sublease a portion of our office space at 600 West Chicago to Uptake, Inc., a Lightbank LLC portfolio company as a related party transaction. The sublease was a market rate transaction on terms that we believe are no less favorable than would have been reached with an unrelated party. The sublease extends through January 31, 2026 and sublease rentals over the entire term total $18.2 million.
For more information about our lease accounting policies, including lease recognition policy and significant assumptions and judgments used, see Note 2, Summary of Significant Accounting Policies.
The following summarizes right-of-use assets as of December 31, 2020 and 2019 (in thousands):
December 31, 2020December 31, 2019
Right-of-use assets - operating leases$107,509 $133,832 
Right-of-use assets - finance leases (1)
21,523 28,193 
Total right-of-use assets, gross129,032 162,025 
Less: accumulated depreciation and amortization (44,590)(36,380)
Right-of-use assets, net $84,442 $125,645 
(1)Right-of-use assets for finance leases are included in Property, equipment and software, net on the consolidated balance sheet.
Due to the triggering event and subsequent review of long-lived assets for impairment in the first quarter of 2020, as described in Note 3, COVID-19 Pandemic, we recognized a long-lived asset impairment of $10.5 million related to right-of-use assets - operating leases and $1.3 million related to right-of-use assets - finance leases within our International segment related to our EMEA operations, which are presented in Long-lived asset impairments on the consolidated statements of operations.
Due to actions taken under our restructuring plan, we recognized long-lived asset impairments of $16.0 million related to right-of-use assets - operating leases for the year ended December 31, 2020, which is presented in Restructuring and related charges on the consolidated statements of operations.
The following table summarizes our lease costs and sublease income for the year ended December 31, 2020 and 2019 (in thousands):
Year Ended December 31,
20202019
Financing lease cost:
Amortization of right-of-use assets$6,737 $18,922 
Interest on lease liabilities522 1,021 
Total finance lease cost7,259 19,943 
Operating lease cost (1) (2)
30,870 34,397 
Variable lease cost (3)
8,143 8,551 
Short-term lease cost313 365 
Sublease income, gross (4)
(4,693)(5,045)
Total lease cost$41,892 $58,211 
(1)Rent expense under operating leases was $40.1 million for the year ended December 31, 2018.
(2)Operating lease costs presented as Selling, general and administrative and Restructuring and related charges totaled $23.1 million and $7.8 million in the consolidated statements of operations for the year ended December 31, 2020.
(3)Variable lease costs presented as Selling, general and administrative and Restructuring and related charges totaled $7.0 million and $1.1 million in the consolidated statements of operations for the year ended December 31, 2020.
(4)Sublease income, gross presented as Selling, general and administrative and Restructuring and related charges totaled $1.2 million and $3.5 million in the consolidated statements of operations for the year ended December 31, 2020. Sublease income was $6.5 million for the year ended December 31, 2018.
As of December 31, 2020, the future payments under finance leases and operating leases for each of the next five years and thereafter are as follows (in thousands):
Finance LeasesOperating Leases
2021$4,717 $38,690 
2022715 35,451 
202312 27,025 
2024— 19,599 
2025— 16,175 
Thereafter — 1,701 
Total minimum lease payments5,444 138,641 
Less: Amount representing interest(92)(14,581)
Present value of net minimum lease payments5,352 124,060 
Less: Current portion of lease obligations(4,622)(33,133)
Total long-term lease obligations$730 $90,927 
As of December 31, 2020, we do not have any non-cancelable operating lease commitments that have not yet commenced.
As of December 31, 2020, the future amounts due under subleases for each of the next five years and thereafter are as follows (in thousands):
Subleases
2021$5,065 
20225,103 
20234,385 
20242,333 
20252,362 
Thereafter197 
Total future sublease income $19,445 
As of December 31, 2020, the weighted-average remaining lease term and weighted-average discount rate for our finance leases and operating leases were as follows:
Finance LeasesOperating Leases
Weighted-average lease term1 year4 years
Weighted-average discount rate5.4 %5.4 %