The Company leases parking facilities, office space, warehouses, vehicles and equipment and determines if an arrangement is a lease at inception. The Company subleases certain real estate to third parties. The Company's sublease portfolio consists of operating leases for space within leased parking facilities.

The Company accounts for leases in accordance with Topic 842. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company's "right-of-use" over an underlying asset for the lease term, and

lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The ROU asset includes cumulative prepaid or accrued rent, as well as lease incentives, initial direct costs and acquired lease contracts. The short term lease exception has been applied to leases with an initial term of 12 months or less and these leases are not recorded on the balance sheet.

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. Lease expense is recognized on a straight-line basis over the lease term.

For leases that include one or more options to renew, the exercise of such renewal options is at the Company's sole discretion or mutual agreement. The Company’s lease term may include renewal options that are at the Company’s sole discretion and are reasonably certain to be exercised. Equipment and vehicle leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Variable lease components comprising of payments that are a percentage of parking services revenue based on contractual levels and rental payments adjusted periodically for inflation are not included in the lease liability. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As discussed in Note 1. Significant Accounting Policies and Practices, the Company tests ROU assets when impairment indicators are present. During the year ended December 31, 2021, the Company determined impairment testing triggers had occurred for ROU assets associated with certain asset groups. Therefore, the Company performed an undiscounted cash flow analysis on these ROU assets as of March 31, 2021 and September 30, 2021. Based on the undiscounted cash flow analysis of March 31, 2021 and September 30, 2021, the Company determined these ROU asset groups had net carrying values that exceeded their estimated undiscounted future cash flows and fair values for these asset groups were determined. The fair values of the ROU assets measured on a non-recurring basis, which is classified as Level 3 in the fair value hierarchy, was determined based on estimates of future discounted cash flows. The estimated fair values were compared to net carrying values, and as a result, ROU assets held and used with carrying amounts of $5.6 million were determined to have a fair value of $2.0 million, resulting in impairment charges of $3.5 million and $0.1 million in the Commercial and Aviation segments, respectively. The impairment charge of $3.6 million for the year ended December 31, 2021 was included within Lease Impairment in the Consolidated Statements of Income (Loss).

Due to the impact of COVID-19 on the Company's expected future operating cash flows, the Company determined impairment testing triggers had occurred within certain asset groups during the year ended December 31, 2020. Accordingly, the Company performed undiscounted cash flow analyses on certain operating lease ROU assets during the year ended December 31, 2020. Based on the undiscounted cash flow analyses as of March 31, 2020, June 30, 2020, September 30, 2020, and December 31, 2020, the Company determined that certain ROU asset groups had net carrying values that exceeded their estimated undiscounted future cash flows and fair value for these asset groups was determined. The estimated fair values were compared to the net carrying values, and, as a result, ROU assets held and used with a carrying amount of $278.9 million were determined to have a fair value of $180.2 million. Accordingly, the Company recorded impairment charges of $98.7 million in the Commercial and Aviation segments for the year ended December 31, 2020, of which $97.1 million is included within Lease impairment in the Consolidated Statements of Income (Loss) and $1.6 million is included within General and administrative expenses in the Consolidated Statements of Income (Loss).

No lease impairment charges were recognized during the year ended December 31, 2019.

In April 2020, the FASB staff provided accounting elections for entities that receive or provide lease-related concessions to mitigate the economic effects of COVID-19 on lessees. The Company elected not to evaluate whether certain concessions provided by lessors in response to the COVID-19 pandemic, that are within the scope of additional interpretation provided by the FASB in April 2020, were lease modifications and has also elected not to apply modification guidance under Topic 842. These concessions were recognized as a reduction of rent expense in the month they occurred and were recorded within Cost of parking services within the Consolidated Statements of Income (Loss).

As a result of COVID-19, the Company was able to negotiate lease concessions with certain landlords. These rent concessions have been recorded in accordance with the guidance noted above. As a result, the Company recorded $16.6 million and $26.0 million as a reduction to cost of services during the years ended December 31, 2021 and 2020, respectively. As COVID-19 subsides, the Company expects these lease concessions to gradually go away.

Costs associated with the right to use the infrastructure on service concession arrangements are recorded as a reduction of revenue in accordance with the scope of ASU No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. See Note 4. Revenue for further discussion on service concession arrangements.

The components of ROU assets and lease liabilities and the classification on the Consolidated Balance Sheets as of December 31, 2021 and 2020 were as follows:

(millions)	Classification	2021		2020
Assets
Operating	Right-of-use assets	$	201.2	$	235.1
Finance	Leasehold improvements, equipment and construction in progress, net		22.4		28.8
Total leased assets		$	223.6	$	263.9
Liabilities
Current
Operating	Short-term lease liabilities	$	65.4	$	82.1
Finance	Current portion of long-term borrowings		6.7		7.8
Noncurrent
Operating	Long-term lease liabilities		200.3		243.4
Finance	Long-term borrowings, excluding current portion		14.0		20.5
Total lease liabilities		$	286.4	$	353.8

The components of lease cost and classification on the Consolidated Statement of Income (Loss) for the years ended December 31, 2021 and 2020 were as follows:

(millions)	Classification	2021		2020
Operating lease (a)(b)	Cost of services - lease type contracts	$	57.5	$	81.1
Short-term lease (a)	Cost of services - lease type contracts		15.9		22.6
Variable lease	Cost of services - lease type contracts		36.7		20.1
Operating lease cost			110.1		123.8
Finance lease cost
Amortization of leased assets	Depreciation and amortization		5.7		4.2
Interest on lease liabilities	Interest expense		1.0		1.1
Lease Impairment	Lease impairment		3.6		97.1
Lease Impairment	General and administrative expenses		—		1.6
Net lease cost		$	120.4	$	227.8

Sublease income during the years ended December 31, 2021 and 2020 was $1.4 million and $1.6 million, respectively.

The Company has entered into new operating lease arrangements as of December 31, 2021 that commence in future periods. The total amount of ROU assets and lease liabilities related to these arrangements are immaterial.

Maturities, lease term and discount rate information of lease liabilities as of December 31, 2021 were as follows:

	Operating			Finance
(millions)	Leases			Leases			Total
2022	$	76.9		$	7.5		$	84.4
2023		62.1			5.4			67.5
2024		46.3			3.5			49.8
2025		35.9			1.7			37.6
2026		28.6			1.1			29.7
After 2026		59.6			4.0			63.6
Total lease payments		309.4			23.2			332.6
Less: Imputed interest		43.7			2.5			46.2
Present value of lease liabilities	$	265.7		$	20.7		$	286.4
Weighted-average remaining lease term (years)		5.7			4.8
Weighted-average discount rate		5.2	%		4.3	%

Future sublease income for the periods shown above was excluded as the amounts are not material.

Supplemental cash flow information related to leases for the years ended December 31, 2021 and 2020 were as follows:

(millions)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows related to operating leases	$	96.4	$	120.3
Operating cash outflows related to interest on finance leases		1.0		1.1
Financing cash outflows related to finance leases		7.7		5.2
Leased assets obtained in exchange for new operating lease liabilities		40.7		38.2
Leased assets obtained in exchange for new finance lease liabilities		0.4		16.5