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LEASES

3 Months Ended

Mar. 31, 2020

The Company enters into contracts to lease real estate, equipment, and vehicles, and has identified embedded leases within its colocation, dark fiber, and duct supplier contracts. The lease contracts have remaining lease terms up to 31 years and certain leases include options to extend the lease term. The Company is not party to any lease contracts with related parties. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

The Company's lease expense is split between cost of telecommunications services and selling, general and administrative expenses in the condensed consolidated statement of operations based on the use of the asset for which lease expense is being paid. The components of lease expense for the period were as follows (amounts in millions):


	Three Months Ended March 31,
	2020		2019
Operating lease expense	$	23.8	$	28.6
Finance lease expense:
Amortization of right of use assets	0.5		0.6
Interest on lease liabilities	1.3		1.1
Total finance lease expense	1.8		1.7
Short-term lease expense	5.0		6.2
Variable lease expense	5.6		7.7
Total lease expense	$	36.2	$	44.2

Supplemental cash flow information related to leases for the period was as follows (amounts in millions):


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21.7	$	34.0
Operating cash flows from finance leases	1.3		1.1
Financing cash flows from finance leases	2.1		0.6

Right of use assets obtained in exchange for new operating lease liabilities	2.4		8.0
Right of use assets obtained in exchange for new finance lease liabilities	1.0		—

Supplemental balance sheet information related to leases for the period was as follows:


	March 31, 2020
Weighted average remaining lease term (amounts in years)
Operating leases	6.25
Finance leases	22.82

Weighted average discount rate
Operating leases	5.6	%
Finance leases	13.0	%

Maturities of lease liabilities were as follows (amounts in millions):


	Operating Leases		Finance Leases
2020 remaining	$	68.0	$	5.1
2021	81.5		5.1
2022	63.5		5.2
2023	48.0		5.2
2024	34.3		5.3
2025 and beyond	95.3		111.2
Total lease payments	390.6		137.1
Less: Present value discount	(63.3)		(95.3)
Present value of lease obligations	$	327.3	$	41.8

LEASES


	Three Months Ended March 31,
	2020		2019
Operating lease expense	$	23.8	$	28.6
Finance lease expense:
Amortization of right of use assets	0.5		0.6
Interest on lease liabilities	1.3		1.1
Total finance lease expense	1.8		1.7
Short-term lease expense	5.0		6.2
Variable lease expense	5.6		7.7
Total lease expense	$	36.2	$	44.2

Supplemental cash flow information related to leases for the period was as follows (amounts in millions):


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21.7	$	34.0
Operating cash flows from finance leases	1.3		1.1
Financing cash flows from finance leases	2.1		0.6

Right of use assets obtained in exchange for new operating lease liabilities	2.4		8.0
Right of use assets obtained in exchange for new finance lease liabilities	1.0		—

Supplemental balance sheet information related to leases for the period was as follows:


	March 31, 2020
Weighted average remaining lease term (amounts in years)
Operating leases	6.25
Finance leases	22.82

Weighted average discount rate
Operating leases	5.6	%
Finance leases	13.0	%

Maturities of lease liabilities were as follows (amounts in millions):


	Operating Leases		Finance Leases
2020 remaining	$	68.0	$	5.1
2021	81.5		5.1
2022	63.5		5.2
2023	48.0		5.2
2024	34.3		5.3
2025 and beyond	95.3		111.2
Total lease payments	390.6		137.1
Less: Present value discount	(63.3)		(95.3)
Present value of lease obligations	$	327.3	$	41.8