Leases

3 Months Ended

Mar. 31, 2023

13. 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. In March 2023, we extended the sublease through January 31, 2024, and we will receive $1.7 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 six months ended March 31, 2023 and March 31, 2022 were as follows:


(in thousands)	Three months ended						Six months ended
	March 31, 2023			March 31, 2022			March 31, 2023			March 31, 2022
Operating lease cost	$	8,510		$	8,676		$	16,564		$	17,536
Short-term lease cost		1,724			582			2,487			1,123
Variable lease cost		2,759			2,596			5,389			5,086
Sublease income		(1,201	)		(1,113	)		(2,386	)		(2,230	)
Total lease cost	$	11,792		$	10,741		$	22,054		$	21,515

Supplemental cash flow and right-of-use assets information for the three and six months ended March 31, 2023 was as follows:


(in thousands)	Three months ended				Six months ended
	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,621	$	9,248	$	17,883	$	25,113
Financing cash flows from financing leases	$	—	$	—	$	217	$	239
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases(1)	$	9,796	$	6,179	$	23,596	$	11,095
Financing leases	$	62	$	—	$	62	$	—

(1) In the three months ended March 31, 2023, operating right-of-use assets increased by ServiceMax assets of $4.0 million.

Supplemental balance sheet information related to the leases as of March 31, 2023 was as follows:


Weighted-average remaining lease term - operating leases	11.1 years
Weighted-average remaining lease term - financing leases	1.5 years
Weighted-average discount rate - operating leases		5.3	%
Weighted-average discount rate - financing leases		3.5	%

Maturities of lease liabilities as of March 31, 2023 are as follows:


(in thousands)
Remainder of 2023	$	18,329
2024		31,366
2025		27,225
2026		22,688
2027		19,639
Thereafter		152,051
Total future lease payments	$	271,298
Less: imputed interest		(69,671	)
Total lease liability	$	201,627

As of March 31, 2023 we had operating leases that had not yet commenced. The leases will commence in fiscal 2023 with lease terms of 7 years and we will make future lease payments of approximately $2.8 million.