OPERATING LEASES

12 Months Ended

Dec. 31, 2021

The company leases office space in almost all its locations of business, data centers and certain equipment under non-cancelable operating leases. The operating leases have a weighted-average remaining lease term of 5.41 years for the year ended December 31, 2021 (2020: 5.74 years) and generally include one or more options to renew, with renewal terms that can extend the lease term from 1 to 10 years. Certain lease arrangements include an option to terminate the lease if a notification is provided to the landlord within 1-7.2 years prior to the end of the lease term. The company has sole discretion in exercising lease renewal and termination options. The lease terms used in the company’s lease measurements do not include renewal options as they are not reasonably certain to be exercised as of the date of this report.

The company elected to combine lease and non-lease components in calculating the lease liability and right-of-use asset for operating leases.

Variable lease payments are determined based on the terms and conditions outlined in the lease contracts and are primarily determined in relation to the extent of the company’s usage of the right-of use-asset or the nature and extent of services received from the lessor. Variable lease costs consists primarily of common area maintenance and other operating expenses as negotiated with the lessor.

As of December 31, 2021, the right-of-use asset of $256.6 million was included within Other assets, and the lease liability of $289.8 million was included within Accounts payable and accrued expenses, on the Consolidated Balance Sheets.

The components of lease expense for the year ended December 31, 2021, December 31, 2020 and December 31, 2019 were as follows:


$ in millions	Year ended December 31, 2021	Year ended December 31, 2020	Year ended December 31, 2019
Operating lease cost	81.4	91.6	70.0
Variable lease cost	25.5	23.4	26.8
Less: sublease income	(1.9)	(2.1)	(0.6)
Total lease expense	105.0	112.9	96.2

The company did not record any impairment expense during the years ended December 31, 2021 and 2019 (during the year ended December 31, 2020, an impairment expense of $17.8 million was recorded to transaction, integration and restructuring expense related to a property we intend to sublease, of which $13.4 million related to the right-of use assets and $4.4 million related to leasehold improvements (see Note 5, “Property, Equipment Software”)).

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


$ in millions	Year ended December 31, 2021	Year ended December 31, 2020
Operating cash flows from operating leases included in the measurement of lease liabilities	86.0	98.3
Right-of-use assets obtained in exchange for new operating lease liabilities	7.7	36.7

In determining the discount rate, the company considered the interest rate yield for specific interest rate environments and the company’s credit spread at the inception of the lease.

The weighted-average discount rate for the operating lease liability for the year ended December 31, 2021 was 3.35% (2020: 3.39%).

As of December 31, 2021, the maturities of the company’s lease liabilities (primarily related to real estate leases) were as follows:


$ in millions
Year Ending December 31,2021			Lease Liabilities
2022			77.5
2023			64.9
2024			47.8
2025			39.3
2026			34.7
Thereafter			51.3
Total lease payments			315.5
Less: interest			(25.7)
Present value of lease liabilities			289.8

Excluded from the tables above is an additional operating lease for the company’s new Atlanta headquarters that was entered into during third quarter of 2019, but has not yet commenced. The expected lease obligations are approximately $232.5 million which will be paid over an expected lease term of 15 years. This operating lease will commence in 2022 and will replace the company’s existing lease for the current headquarters.