Leases

12 Months Ended

Dec. 31, 2020

Leases, Operating [Abstract]

Operating Leases

Leases

We lease office space and certain equipment under various operating and finance leases, with most of our lease portfolio consisting of operating leases for office space.

We determine whether an arrangement is, or includes, an embedded lease at contract inception. Operating lease assets and lease liabilities are recognized at the commencement date and initially measured using the present value of lease payments over the defined lease term. Lease expense is recognized on a straight-line basis over the lease term. For finance leases, we also recognize a finance lease asset and finance lease liability at inception, with lease expense recognized as interest expense and amortization.

A contract is or contains an embedded lease if the contract meets all of the below criteria:

•there is an identified asset

•we obtain substantially all of the economic benefits of the asset

•we have the right to direct the use of the asset

For initial measurement of the present value of lease payments and for subsequent measurement of lease modifications, we are required to use the rate implicit in the lease, if available. However, as most of our leases do not provide an implicit rate, we use our incremental borrowing rate, which is a collateralized rate. To apply the incremental borrowing rate, we used a portfolio approach and grouped leases based on similar lease terms in a manner whereby we reasonably expect that the application does not differ materially from a lease-by-lease approach.

Our leases have remaining lease terms of approximately 1 year to 13 years, which may include the option to extend the lease when it is reasonably certain we will exercise that option. We do not have lease agreements with residual value guarantees, sale leaseback terms, or material restrictive covenants.

Leases with an initial term of 12 months or less are not recognized on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

The following table summarizes our operating lease assets and lease liabilities:

Leases (in millions)	Balance Sheet Classification	As of December 31, 2020		As of December 31, 2019
Assets
Operating	Operating lease assets	$	147.7	$	144.8
Liabilities
Operating	Operating lease liabilities, current	$	39.9	$	35.8
Operating	Operating lease liabilities, non-current	137.7		138.7
Total lease liabilities		$	177.6	$	174.5

Our operating lease expense for the years ended December 31, 2020, 2019, and 2018 was $42.4 million, $33.9 million, and $32.5 million, respectively. Charges related to our operating leases that are variable and, therefore, not included in the measurement of the lease liabilities were $14.9 million and $12.7 million for the years ended December 31, 2020 and 2019, respectively. We made operating lease payments of $45.3 million and $33.1 million during the years ended December 31, 2020 and 2019, respectively.

The following table shows our minimum future rental commitments due in each of the next five years and thereafter for operating leases:

Minimum Future Lease Commitments (in millions)
2021	$	47.3
2022	32.0
2023	27.8
2024	21.9
2025	19.8
Thereafter	56.3
Total minimum lease commitments	205.1
Adjustment for discount to present value	27.5
Total	$	177.6

The following table summarizes our weighted-average lease terms and weighted-average discount rates for our operating leases:

	As of December 31, 2020
Weighted-average remaining lease term (in years)	6.6
Weighted-average discount rate	4.3	%