Leases

3 Months Ended

Dec. 31, 2020

We have leases for facilities and office equipment. Our lease liabilities are recognized as the present value of the future minimum lease payments over the lease term. Our right-of-use assets are recognized as the present value of the future minimum lease payments over the lease term less unamortized lease incentives and the balance remaining in deferred rent liability under ASC 840. Our lease payments consist of fixed and in-substance fixed amounts attributable to the use of the underlying asset over the lease term. Variable lease payments that do not depend on an index rate or are not in-substance fixed payments are excluded in the measurement of right-of-use assets and lease liabilities and are expensed in the period incurred. The incremental borrowing rate on our credit facility was used in determining the present value of future minimum lease payments. Some of our lease agreements include options to extend the lease term or terminate the lease. These options are accounted for in our right-of-use assets and lease liabilities when it is reasonably certain that the Company will extend the lease term or terminate the lease. The Company does not have any finance leases. As of December 31, 2020, operating leases for facilities and equipment have remaining lease terms of 1.0 to 10.3 years.

The following table summarizes lease balances in our consolidated balance sheets at December 31, 2020 and September 30, 2020:


	(in thousands)
	December 31, 2020		September 30, 2020


Operating lease right-of-use assets	$	21,737	$	22,427

Operating lease liabilities, current	$	2,053	$	2,045
Operating lease liabilities - long-term	21,017		21,620
Total operating lease liabilities	$	23,070	$	23,665

The Company subleases a portion of one of its leased facilities. The sublease is classified as an operating lease with respect to the underlying asset. The sublease was assumed from the acquisition of Social & Scientific Systems, Inc. ("S3") in fiscal 2019. The sublease term is 5 years with two additional 1-year term extension options.

The Company's lease costs are included within contract costs in our Consolidated Statements of Operations. For the three months ended December 31, 2020 and December 31, 2019, total lease costs for our operating leases are as follows:


	(in thousands)
	Three Months Ended
	December 31,
	2020		2019
Operating	$	970	$	1,312
Short-term	29		56
Variable	5		20
Sublease income	(95)		(49)
Total lease costs	$	909	$	1,339

The Company's future minimum lease payments as of December 31, 2020 are as follows:


For the Fiscal Year Ending September 30,	(in thousands)
2021 (remaining)	$	2,454
2022	3,501
2023	3,375
2024	3,251
2025	3,092
Thereafter	14,684
Total future lease payments	30,357
Less: imputed interest	(7,287)
Present value of future minimum lease payments	23,070
Less: current portion of operating lease liabilities	(2,053)
Long-term operating lease liabilities	$	21,017

Other information related to our leases are as follows:


	December 31, 2020
Weighted-average remaining lease term	8.9 years
Weighted-average discount rate	5.99	%


	(in thousands)
	Three Months Ended
	December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities	$	881
Lease liabilities arising from obtaining right-of-use-assets	$	—