Leases

9 Months Ended

Jun. 30, 2022

14. Leases

Our operating leases expire at various dates through 2037 and are primarily for office space, automobiles, servers, and office equipment.

Our headquarters are located at 121 Seaport Boulevard, Boston, Massachusetts. In February 2019, we subleased a portion of our headquarters through June 30, 2022, and received approximately $9.1 million in sublease income over the term of the sublease. In March 2022, we extended the sublease through June 30, 2023, and we will receive $2.9 million in sublease income over the term of the extension.

The components of lease cost reflected in the Consolidated Statement of Operations for the three and nine months ended June 30, 2022 and June 30, 2021 were as follows:


(in thousands)	Three months ended						Nine months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Operating lease cost	$	8,613		$	9,075		$	26,149		$	28,031
Short-term lease cost		812			627			1,935			1,785
Variable lease cost		2,608			2,443			7,694			7,306
Sublease income		(1,176	)		(1,114	)		(3,406	)		(3,329	)
Total lease cost	$	10,857		$	11,031		$	32,372		$	33,793

Supplemental cash flow and right-of-use assets information for the three and nine months ended June 30, 2022 was as follows:


(in thousands)	Three months ended				Nine months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	10,087	$	12,319	$	35,200	$	40,396
Financing cash flows from financing leases	$	—	$	—	$	239	$	279
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	730	$	126	$	11,825	$	773
Financing leases	$	—	$	—	$	—	$	—

Supplemental balance sheet information related to the leases as of June 30, 2022 was as follows:


Weighted-average remaining lease term - operating leases	11.9 years
Weighted-average remaining lease term - financing leases	2.1 years
Weighted-average discount rate - operating leases		5.4	%
Weighted-average discount rate - financing leases		3.0	%

Maturities of lease liabilities as of June 30, 2022 are as follows:


(in thousands)
Remainder of 2022	$	9,139
2023		30,971
2024		26,710
2025		23,816
2026		19,853
Thereafter		160,184
Total future lease payments	$	270,673
Less: imputed interest		(75,837	)
Total lease liability	$	194,836

As of June 30, 2022 we had an operating lease that had not yet commenced. The lease will commence in FY'23 with a lease term of 10 years and we will make future lease payments of approximately $11.6 million.

Exited (Restructured) Facilities

As of June 30, 2022, we had net liabilities of $0.7 million related to excess facilities (compared to $3.6 million at September 30, 2021), representing $0.2 million of right-of-use assets and $0.9 million of lease obligations, all of which is classified as short term. Variable costs related to these exited facilities are included in our restructuring accrual. All expenses and income associated with exited facilities are included in restructuring and other charges, net (refer to Note 3. Restructuring and Other Charges).

In determining the amount of right-of-use assets for restructured facilities, we are required to estimate such factors as future vacancy rates, the time required to sublet properties and sublease rates. Updates to these estimates may result in revisions to the value of right-of-use assets recorded. The amounts recorded are based on the net present value of estimated sublease income. As of June 30, 2022, the right-of-use assets for exited facilities reflects discounted committed sublease income of approximately $0.2 million.

In the three and nine months ended June 30, 2022, we made payments of $0.7 million and $1.9 million, respectively, related to lease costs for exited facilities. In the three and nine months ended June 30, 2021, we made payments of $1.2 million and $7.5 million, respectively.