LEASES

9 Months Ended

Sep. 30, 2020

The Company is a lessee to leases of corporate offices and certain office equipment. The majority of leases for corporate offices include one or more options to renew, with renewal terms ranging from two to five years. These renewal options have not been included in the calculation of right-of-use assets and lease liabilities, as the Company is not reasonably certain of the exercise of these renewal options. The Company used its incremental borrowing rate to calculate the right-of-use asset and lease liability for each lease.

As of September 30, 2020, right-of-use assets totaled $86.2 million and lease liabilities, the current portion of which is included in accrued expenses and other current liabilities in the accompanying balance sheet, totaled $93.4 million. At December 31, 2019, right-of-use assets totaled $25.5 million and lease liabilities totaled $28.2 million. During the second quarter of 2020 the right-of-use assets and lease liabilities increased $65.7 million due to commencement of the lease, as defined under ASC Topic 842, Leases, for the Company’s new principal executive offices currently under construction in Charlotte, North Carolina.

Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive income, consists of the following (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease cost	$	3,568	$	1,765	$	7,562	$	4,495
Short-term lease cost	11		21		49		69
Total lease cost	$	3,579	$	1,786	$	7,611	$	4,564

Weighted average remaining lease term and discount rate for operating leases are as follows:



	September 30, 2020		December 31, 2019
Weighted average remaining lease term	13.0 years		5.0 years
Weighted average discount rate	5.0	%	4.7	%

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



	Nine Months Ended September 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,077	$	4,191
Right-of-use assets obtained in exchange for new operating lease liabilities	$	66,463	$	21,912

Maturities of lease liabilities as of September 30, 2020 are as follows (in thousands):



	Operating Leases
Remainder of current year	$	2,118
Year ending December 31, 2021	8,949
Year ending December 31, 2022	12,619
Year ending December 31, 2023	12,409
Year ending December 31, 2024	10,885
Thereafter	105,398
Total lease payments	152,378
Less: Interest	46,096
Less: Tenant improvement allowances	12,859
Present value of lease liabilities	$	93,423

Rental income of $0.3 million in the first nine months of 2019 is included in other income on the accompanying consolidated statements of operations and comprehensive income.