Leases

12 Months Ended

Dec. 31, 2019

Our lease arrangements are primarily for: (1) corporate, administrative, and development studio offices; (2) data centers and server equipment; and (3) live event production equipment. Our existing leases have remaining lease terms ranging from one year to 10 years. In certain instances, such leases include one or more options to renew, with renewal terms that generally extend the lease term by one year to five years for each option. The exercise of lease renewal options is generally at our sole discretion. Additionally, the majority of our leases are classified as operating leases; our financing leases are not material.

Components of our lease costs are as follows (amounts in millions):



	Year Ended December 31, 2019
Operating leases
Operating lease costs	$	75
Variable lease costs	20

Rental expense prior to our adoption of the new lease standard was $75 million and $71 million for the years ended December 31, 2018 and 2017, respectively.

Supplemental information related to our operating leases is as follows (amounts in millions):



	Year Ended December 31, 2019
Supplemental Operating Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities	$	80
ROU assets obtained in exchange for new lease obligations	65

	At December 31, 2019
Weighted Average Lease terms and discount rates
Remaining lease term	5.00 years
Discount rate	4.02		%

Future undiscounted lease payments for our operating lease liabilities, and a reconciliation of these payments to our operating lease liabilities at December 31, 2019, are as follows (amounts in millions):



For the years ending December 31,
2020	$	72
2021	59
2022	50
2023	44
2024	41
Thereafter	37
Total future lease payments	$	303
Less imputed interest	(30		)
Total lease liabilities	$	273

As of December 31, 2019, we have entered into facility leases that have not yet commenced with future lease payments of approximately $58 million. These leases are expected to commence within the next 12 months and will have lease terms ranging from three years to five years.

Operating lease ROU assets and liabilities recorded on our consolidated balance sheet as of December 31, 2019, were as follows (amounts in millions):



	At December 31, 2019		Balance Sheet Classification
ROU assets	$	232	Other assets

Current lease liabilities	$	63	Accrued expenses and other current liabilities
Non-current lease liabilities	210		Other liabilities
	$	273	Total lease liabilities

Future minimum lease payments as of December 31, 2018, prior to our adoption of the new lease accounting standard, were as follows:



For the years ending December 31,
2019	$	80
2020	70
2021	53
2022	45
2023	38
Thereafter	60
Total	$	346