Leases

9 Months Ended

Oct. 03, 2020

The Company leases its principal facilities located in San Francisco, California. The Company also leases office space in various locations. Both the Company’s principal facilities and leases in various locations have expiration dates between 2020 and 2024. The lease agreements often include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance, maintenance costs or defined rent increases. The Company’s leases are primarily accounted for as operating leases. Operating lease ROU assets and short-term and long-term operating lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. The Company has no leases that have not yet commenced as of October 3, 2020.

Total lease cost consists of the following (in thousands):


	Three Months Ended				Nine Months Ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019

Finance lease costs:
Amortization of ROU assets	$	390	$	989	$	668	$	2,640
Interest on lease liabilities	—		—		—		—
Operating lease costs(1)	6,031		5,850		19,179		16,834
Variable lease costs	3,110		1,463		5,766		4,108
Sublease income	(146)		(479)		(1,113)		(4,110)
Total lease costs	$	9,385	$	7,823	$	24,500	$	19,472

(1) includes short-term leases, which are immaterial.

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


	Three Months Ended				Nine Months Ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	—	$	1,302	$	1,384	$	2,239
Operating cash flows from finance leases	—		—		—		—
Operating cash flows from operating leases	6,168		6,737		19,097		20,775

ROU assets obtained in exchange for lease obligations:
Finance lease liabilities	$	2,338	$	—	$	3,722	$	—
Operating lease liabilities	—		—		4,497		288

Supplemental balance sheet information related to leases was as follows (in thousands):


	October 3, 2020		December 31, 2019

Finance leases:
Other assets	$	1,948	$	1,384

Accrued liabilities	$	2,338	$	1,384

Operating leases:
Operating lease ROU assets	$	62,144	$	70,225

Operating lease liabilities	$	22,390	$	23,511
Long-term operating lease liabilities	56,703		67,902
Total operating lease liabilities	$	79,093	$	91,413

Weighted-average lease terms and discount rates are as follows:


	October 3, 2020		December 31, 2019

Weighted-average remaining lease terms (in years):
Finance leases	1.3		0.5
Operating leases	3.6		4.2

Weighted-average discount rates:
Finance leases	—	%	—	%
Operating leases	5.5	%	5.5	%

Maturities of lease liabilities as of October 3, 2020 were as follow (in thousands):



	Finance Leases		Operating Leases
Remaining 2020	$	2,338	$	24,956
2021	—		25,106
2022	—		23,385
2023	—		17,970
2024	—		405
Thereafter	—		—
Total minimum lease payments	$	2,338	$	91,822
Less: amount representing interest	—		(12,729)
Total lease liabilities	$	2,338	$	79,093

Leases