The Company leases certain facilities, equipment, and vehicles under operating leases that expire on various dates through fiscal 2028. Its leases generally have terms that range from one year to eight years for its facilities, one year to five years for equipment, and one year to five years for vehicles. Some of its leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives.

The Company determines if an arrangement is a lease at inception. The Company has elected not to recognize a lease liability or right-of-use (“ROU”) asset for short-term leases (leases with a term of twelve months or less). Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The interest rate used to determine the present value of future payments is the Company’s incremental borrowing rate because the rate implicit in the leases are not readily determinable. The Company’s incremental borrowing rate is a hypothetical rate for collateralized borrowings based on the current economic environment, credit history, credit rating, value of leases, currency in which the lease obligation is satisfied, rate sensitivity, lease term and materiality. Operating lease assets also included a reclassification for previous asset impairments and associated restructuring liabilities, deferred rent, lease incentives and initial direct costs which reduced the operating lease ROU assets as of July 1, 2019.

Some operating leases contain lease and non-lease components. Certain lease contracts include fixed payments for services, such as operations, maintenance, or other services. The Company has elected to account for fixed lease and non-lease components as a single lease component except for the logistic service asset class. Cash payments made for non-lease costs and variable lease costs are not included in the measurement of operating lease assets and liabilities and are recognized in the Company’s condensed consolidated statements of operations as incurred. Some lease terms include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless it is reasonably certain that it will exercise that option. The Company’s lease agreements do not contain any residual value guarantees.

Activity and other information relating to operating leases is as follows (in thousands except for lease term and discount rate):

	Three Months Ended		Nine Months Ended
	March 31, 2020		March 31, 2020
Operating lease costs	$	4,871	$	14,874
Variable lease costs		1,613		4,548
Cash paid for amounts included in the measurement of operating liabilities		5,328		16,159
ROU assets obtained for new lease obligations		1,103		2,525
ROU assets obtained from Aerohive business combination		—		6,336

March 31,

2020

Weighted average remaining lease term (in years)

4.5

Weighted Average Discount Rate

4.5

Short-term lease expense which represents expense for leases that have terms of one year or less was not material for the three and nine months ended March 31, 2020.

The maturities of the Company’s operating lease liabilities as of March 31, 2020 by fiscal year are as follows:

	Operating Leases (in thousands)
2020 (remaining three months)	$	5,356
2021		20,509
2022		19,351
2023		15,666
2024		6,333
Thereafter		12,396
Total future minimum lease payments		79,611
Less amount representing interest		7,559
Total operating lease liabilities	$	72,052
Operating lease liabilities, current	$	18,197
Operating lease liabilities, non-current	$	53,855

As of June 30, 2019, the minimum future rentals on non-cancellable operating leases by fiscal year, based on the previous accounting standard, were as follows:

	Operating Leases (in thousands)
2020	$	22,733
2021		21,174
2022		20,680
2023		17,828
2024		5,976
Thereafter		16,287
Total lease payments	$	104,678

The Company currently is a sublessor on several operating facility subleases that expire on various dates through fiscal 2023. The subleases have terms from 5 to 6 years and extend through the term of the underlying leases. The subleases do not include renewal options, purchase options, or termination rights. These operating subleases include only lease components. Included in lease expense, the Company had $0.6 million and $1.9 million of sublease income for the three and nine months ended March 31, 2020, respectively.

Although most of the Company’s revenue from its hardware business comes from sales of hardware, the Company also sells subscription contracts which contain both operating lease and non-lease components. These leases range in duration generally up to three years with payments generally collected in equal quarterly installments, do not include purchase options, and include 60-day termination rights by either party. For the three months ended March 31, 2020 and 2019, $2.2 million and $2.7 million are included in product revenue in the Company’s condensed consolidated financial statements, respectively. For the nine months ended March 31, 2020 and 2019, $6.9 million and $8.6 million are included in product revenue in the Company’s condensed consolidated financial statements, respectively. There were no changes to the accounting treatment of these transactions from the adoption of ASC 842.