We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets and operating lease obligations on our Consolidated Balance Sheets. Our operating leases are primarily for office space, cars, servers, and office equipment. We made an election not to separate lease components from non-lease components for office space, servers and office equipment. Finance leases are included in property and equipment, accrued expenses and other current liabilities, and other liabilities on our Consolidated Balance Sheets.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the leases. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term as that of the lease payments at commencement date. The right-of-use assets include any lease payments made and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term.

Our operating leases expire at various dates through 2037. Our lease terms may include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These variable payments include insurance, taxes, consumer price index payments, and payments for maintenance and utilities.

Our headquarters are located at 121 Seaport Boulevard, Boston, Massachusetts (the Boston lease). The Boston lease is for approximately 250,000 square feet and runs from January 1, 2019 through June 30, 2037. Base rent for the first year of the lease is $11.0 million and increases by $1 per square foot per year thereafter ($0.3 million per year). Base rent first became payable on July 1, 2020. In addition to the base rent, we are required to pay our pro rata portions of building operating costs and real estate taxes (together, “Additional Rent”). We are currently paying approximately $7.1 million annually of Additional Rent. The lease provides for $25 million in landlord funding for leasehold improvements ($100 per square foot). The leasehold improvement funding provision was fully utilized by us and was reflected as a derecognition adjustment to the right-of-use asset in October 2020. In February 2019, we subleased a portion of our headquarters through June 30, 2022. We will receive approximately $9.1 million in sublease income over the course of the lease.

The components of lease cost reflected in the Consolidated Statement of Operations for the three months ended December 31, 2020 and December 28, 2019 were as follows:

(in thousands)	Three months ended
	December 31, 2020			December 28, 2019
Operating lease cost	$	9,391		$	8,757
Short-term lease cost		548			1,874
Variable lease cost		2,387			1,914
Sublease income		(1,084	)		(1,012	)
Total lease cost	$	11,242		$	11,533

Supplemental cash flow and right-of-use assets information for the three months ended December 31, 2020 and December 28, 2019 was as follows:

(in thousands)	Three months ended
	December 31, 2020		December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	14,060	$	5,498
Financing cash flows from financing leases	$	279	$	—
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	594	$	5,380
Financing leases	$	—	$	1,500

Supplemental balance sheet information related to the leases as of December 31, 2020 was as follows:

	As of December 31, 2020
Weighted-average remaining lease term - operating leases	12.5 years
Weighted-average remaining lease term - financing leases	4.75 years
Weighted-average discount rate - operating leases		5.6	%
Weighted-average discount rate - financing leases		3.0	%

(in thousands)	Operating Leases
Remainder of 2021	$	32,718
2022		31,181
2023		22,246
2024		20,294
2025		17,360
Thereafter		170,423
Total future lease payments	$	294,222
Less: imputed interest		(87,776	)
Total	$	206,446

As of December 31, 2020, we have net liabilities of $7.6 million related to excess facilities (compared to $11.3 million at September 30, 2020), representing $2.6 million of right-of-use assets and $10.2 million of lease obligations, of which $6.6 million is classified as short term and $3.6 million is classified as long 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 December 31, 2020, the right-of-use assets for exited facilities reflects discounted committed sublease income of approximately $2.3 million and uncommitted sublease income of approximately $0.3 million.

In the first quarter of 2021 and 2020, we made payments of $3.8 million and $2.4 million, respectively, related to lease costs for exited facilities.