Leases

9 Months Ended

Sep. 30, 2019

The Company primarily has operating leases for office space and leased cars included in its ROU assets and lease liabilities. The Company's executive offices and those related to certain domestic product development, marketing, production and administration are located in a 186,000 square foot office facility in Canonsburg, Pennsylvania. The term of the lease is 183 months, which began on October 1, 2014 and expires on December 31, 2029. The lease agreement includes options to renew the contract through August 2044, an option to lease additional space in January 2025 and an option to terminate the lease in December 2025. No options are included in the lease liability as renewal is not reasonably certain. In addition, the Company is reasonably certain it will not terminate the lease agreement. Absent the exercise of options in the lease, the Company's base rent

(inclusive of property taxes and certain operating costs) is $4.3 million per annum for the first five years of the lease term, $4.5 million per annum for years six through ten and $4.7 million per annum for years eleven through fifteen.

The components of the Company's global lease cost reflected in the condensed consolidated statements of income are as follows:



(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Lease liability cost	$	5,684	$	16,579
Variable lease cost not included in the lease liability⁽¹⁾	1,126		2,847
Total lease cost	$	6,810	$	19,426

⁽¹⁾ Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate.

For the three and nine months ended September 30, 2018, lease cost totaled $6.1 million and $16.3 million, respectively.

Other information related to operating leases is as follows:



(in thousands)	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of the lease liability:
Operating cash flows from operating leases	$	(5,242	)	$	(14,551	)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	6,155		$	29,262

As of September 30, 2019, the weighted-average remaining lease term of operating leases was 7.8 years, and the weighted-average discount rate of operating leases was 3.7%.

The maturity schedule of the operating lease liabilities as of September 30, 2019 is as follows:



(in thousands)
Remainder of 2019	$	6,335
2020	20,192
2021	18,178
2022	15,472
2023	11,748
Thereafter	54,966
Total future lease payments	126,891
Less: Present value adjustment	(19,059		)
Present value of future lease payments⁽¹⁾	$	107,832

⁽¹⁾Includes the current portion of operating lease liabilities of $16.7 million, which is reflected in other accrued expenses and liabilities in the condensed consolidated balance sheets.

There were no material leases that have been signed but not yet commenced as of September 30, 2019.

The future minimum lease payments under ASC 840, including termination fees, under noncancellable operating leases for office space in effect at December 31, 2018 were as follows:



(in thousands)
2019	$	16,354
2020	12,469
2021	10,177
2022	8,523
2023	6,809
Thereafter	14,267
Total	$	68,599