Leases

12 Months Ended

Dec. 31, 2019

We primarily have operating leases for office space and leased cars included in our ROU assets and lease liabilities. Our executive offices and those related to certain domestic product development, marketing, production and administration are located in a 186,000 square foot office facility in Canonsburg, Pennsylvania. The term of the lease is 183 months, which began on October 1, 2014 and expires on December 31, 2029. The lease agreement includes options to renew the contract through August 2044, an option to lease additional space in January 2025 and an option to terminate the lease in December 2025. No options are included in the lease liability as renewal is not reasonably certain. In addition, we are reasonably certain we will not terminate the lease agreement. Absent the exercise of options in the lease, our base rent (inclusive of property taxes and certain operating costs) was $4.3 million per annum for the first five years of the lease term, $4.5 million per annum for years six through ten and $4.7 million per annum for years eleven through fifteen.

The components of our global lease cost reflected in the consolidated statements of income for the year ended December 31, 2019 are as follows:



(in thousands)
Lease liability cost	$	22,507
Variable lease cost not included in the lease liability⁽¹⁾	3,754
Total lease cost	$	26,261

⁽¹⁾ Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate.

For the years ended December 31, 2018 and 2017, lease cost totaled $21.3 million and $18.4 million, respectively.

Other information related to operating leases for the year ended December 31, 2019 is as follows:



(in thousands)
Cash paid for amounts included in the measurement of the lease liability:
Operating cash flows from operating leases	$	(20,031	)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	35,191

As of December 31, 2019, the weighted-average remaining lease term of operating leases was 7.7 years, and the weighted-average discount rate of operating leases was 3.7%.

The maturity schedule of the operating lease liabilities as of December 31, 2019 is as follows:



(in thousands)
2020	$	21,617
2021	19,439
2022	16,616
2023	12,513
2024	12,421
Thereafter	46,159
Total future lease payments	128,765
Less: Present value adjustment	(18,838		)
Present value of future lease payments⁽¹⁾	$	109,927

⁽¹⁾Includes the current portion of operating lease liabilities of $18.2 million, which is reflected in other accrued expenses and liabilities in the consolidated balance sheets.

As of December 31, 2019, we had operating office leases that have not yet commenced with combined lease obligations of $16.3 million. The leases commence in 2020 and have a weighted-average lease term of 7.2 years.

The future minimum lease payments under ASC 840, including termination fees, under noncancellable operating leases for office space in effect at December 31, 2018 were as follows:



(in thousands)
2019	$	16,354
2020	12,469
2021	10,177
2022	8,523
2023	6,809
Thereafter	14,267
Total	$	68,599