Leases

9 Months Ended

Sep. 30, 2020

8. LEASES

The Company’s operating leases are primarily for office real estate. The leases have remaining lease terms ranging from one year to 10 years and may include options to extend or terminate.

The components of lease expense are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Operating lease cost ⁽¹⁾	$	13,314		$	9,233		$	42,436		$	21,453
Sublease income		(284	)		(664	)		(1,969	)		(1,790	)
Net operating lease cost	$	13,030		$	8,569		$	40,467		$	19,663

(1)

For the three and nine months ended September 30, 2020, variable lease costs were $2.9 million and $8.4 million, respectively. For the three and nine months ended September 30, 2019, variable lease costs were $1.3 million and $3.3 million, respectively. Variable lease costs primarily include common area maintenance charges.

Supplemental cash flow information related to leases is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	6,320	$	4,892	$	21,504	$	12,332
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	3,690	$	32,014	$	6,461	$	115,794

Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):

	As of
	September 30, 2020			December 31, 2019
Operating lease right-of-use assets	$	267,094		$	283,291
Included in accounts payable and accrued liabilities:
Operating lease liability, current		32,130			17,896
Operating lease liability, non-current		311,072			301,694
Total operating lease liability	$	343,202		$	319,590

Weighted average remaining lease term
Operating leases (in years)	9.35			9.98
Weighted average discount rate
Operating leases		4.64	%		4.65	%

Future lease payments under operating leases as of September 30, 2020 were as follows (in thousands):

Year ending December 31,	Operating Leases
2020 (remaining 3 months)	$	9,545
2021		48,695
2022		45,839
2023		46,520
2024		45,727
Thereafter		247,011
Total future lease payments		443,337
Less: imputed interest		(84,680	)
Less: expected tenant improvement allowance		(15,455	)
Total	$	343,202

As of September 30, 2020, the Company has additional operating leases, primarily corporate offices, that have not yet commenced of $7.0 million. These operating leases commence in future periods beginning in the last quarter of fiscal year 2020 and have lease terms of four to five years.