LEASES LEASES

6 Months Ended

Jun. 30, 2019

The Company leases land, office space, data center facilities and equipment used in connection with its operations under various operating leases, the majority of which contain escalation clauses.

ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the present value of the Company’s obligation to make payments arising from these leases. ROU assets and related lease liabilities are based on the present value of fixed lease payments over the lease term using the Company's and its publicly-traded subsidiaries' respective incremental borrowing rates on the lease commencement date or January 1, 2019 for leases that commenced prior to that date. The Company combines the lease and non-lease components of lease payments in determining ROU assets and related lease liabilities. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less ("short-term leases") are not recorded on the accompanying consolidated balance sheet.

Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.



Leases	Balance Sheet Classification	June 30, 2019
		(In thousands)
Assets:
Right-of-use assets	Right-of-use assets	$	180,290

Liabilities:
Current lease liabilities	Accrued expenses and other current liabilities	32,635
Long-term lease liabilities	Other long-term liabilities	201,708
Total lease liabilities		$	234,343



Lease Cost	Income Statement Classification	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
		(In thousands)
Fixed lease cost	Cost of revenue	$	1,131	$	2,206
Fixed lease cost	Selling and marketing expense	3,002		4,911
Fixed lease cost	General and administrative expense	9,400		16,590
Fixed lease cost	Product development expense	282		600
Total fixed lease cost ^(a)		13,815		24,307
Variable lease cost	Cost of revenue	107		264
Variable lease cost	Selling and marketing expense	366		670
Variable lease cost	General and administrative expense	1,884		3,688
Variable lease cost	Product development expense	45		99
Total variable lease cost		2,402		4,721
Net lease cost		$	16,217	$	29,028

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^(a)Includes approximately $1.7 million and $3.0 million of short-term lease cost and $0.5 million and $1.1 million of sublease income for the three and six months ended June 30, 2019, respectively.

Maturities of lease liabilities as of June 30, 2019 (in thousands)^(b):



Remainder of 2019	$	20,503
2020	45,081
2021	38,724
2022	31,829
2023	28,491
After 2023	249,573
Total	414,201
Less: Interest	179,858
Present value of lease liabilities	$	234,343

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^(b)	Lease payments exclude $1.1 million of legally binding minimum lease payments for leases signed but not yet commenced.

The following are the weighted average assumptions used for lease term and discount rate as of June 30, 2019:



Remaining lease term	15.9 years
Discount rate	6.03	%



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(In thousands)
Other Information:
Right-of-use assets obtained in exchange for lease liabilities	$	24,888	$	53,158
Cash paid for amounts included in the measurement of lease liabilities	$	10,539	$	23,714