Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

LEASES

The Company has operating leases for certain of its full service and back-up child care and early education centers, corporate offices, call centers, and to a lesser extent, various office equipment, in the United States, the United Kingdom, and the Netherlands. Most of the leases expire within 10 to 15 years and many contain renewal options and/or termination provisions. The Company does not have any finance leases as of September 30, 2020.

Lease Expense

The components of lease expense were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Operating lease expense (1)	$	33,436	$	34,166	$	105,964	$	95,555
Variable lease expense (1)	6,419		8,752		21,772		25,738
Total lease expense	$	39,855	$	42,918	$	127,736	$	121,293

(1) Excludes short-term lease expense and sublease income, which were immaterial for the periods presented.

Operating lease expense for the three and nine months ended September 30, 2020 includes an impairment loss on operating lease right-of-use assets of $0.3 million and $5.5 million, respectively. Refer to Note 9, Fair Value Measurements, for additional information.

Other Information

The weighted average remaining lease term and the weighted average discount rate were as follows:

	September 30, 2020	December 31, 2019
Weighted average remaining lease term (in years)	10	10
Weighted average discount rate	6.0%	6.2%

Maturity of Lease Liabilities

The following table summarizes the maturity of lease liabilities as of September 30, 2020 (in thousands):

	Operating Leases
Remainder of 2020	$	30,169
2021	134,729
2022	126,719
2023	118,311
2024	107,564
Thereafter	593,098
Total lease payments	1,110,590
Less imputed interest	(288,443)
Present value of lease liabilities	822,147
Less current portion of operating lease liabilities	(94,431)
Long-term operating lease liabilities	$	727,716

As of September 30, 2020, the Company had entered into additional operating leases that have not yet commenced with total fixed payment obligations of $38.7 million. The leases are expected to commence between the fourth quarter of fiscal 2020 and the fourth quarter of fiscal 2021 and have initial lease terms of approximately 10 to 15 years.

Lease Modifications

In response to the broad effects of COVID-19, the Company re-negotiated certain payment terms with lessors to mitigate the impact on the Company’s financial position and operations. As of September 30, 2020, the Company had deferred lease payments of $12.1 million. The majority of these lease payments are payable over the next year. On April 10, 2020, the FASB issued guidance for lease concessions provided to lessees in response to the effects of COVID-19. Such guidance allows lessees to make an election not to evaluate whether a lease concession provided by a lessor should be accounted for as a lease modification, in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Such concessions would be recorded as negative lease expense in the period of relief. The Company elected this practical expedient in accounting for lease concessions provided for our center lease agreements and the impact was immaterial.