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Leases | 3 Months Ended
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Dec. 28, 2019
Leases [Abstract] |
Leases | Leases 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. 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 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 of the lease payments at commencement date. The right-of-use assets include any lease payments made and exclude lease incentives received. Lease expense for lease payments 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 options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Certain office space leases require us to pay for taxes, insurance, maintenance and other operating expenses in addition to rent. 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 will increase by $1 per square foot per year thereafter ($0.3 million per year) with base rent first becoming payable on July 1, 2020. In addition to the base rent, PTC is required to pay its pro rata portions of building operating costs and real estate taxes (together, “Additional Rent”). Additional Rent is estimated to be approximately $7.1 million for the first year we begin paying rent. The lease provides for $25 million in landlord funding for leasehold improvements ($100 per square foot). Leasehold improvement funding provision was fully utilized by us and was reflected as a derecognition adjustment to the right-of-use asset. The components of lease cost reflected in the Consolidate Statement of Operations for the three months ended December 28, 2019 were as follows:
(in thousands) | Three months ended
| December 28, 2019
Operating lease cost | $ | 8,757 |
Short-term lease cost | 1,874 |
Variable lease cost | 1,914 |
Sublease income | (1,012 | )
Total lease cost | $ | 11,533 |
Other information related to leases for the three months ended December 28, 2019 was as follows:
(dollar amounts in thousands) | Three months ended
| December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities |
Operating cash flows from operating leases | $ | 5,498 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 5,380 |
Right-of-use assets obtained in exchange for new financing lease liabilities | $ | 1,500 |
Weighted-average remaining lease term - operating leases | 12.4 years |
Weighted-average remaining lease term - financing leases | 5 years |
Weighted-average discount rate - operating leases | 5.6 | %
Weighted-average discount rate - financing leases | 3.0 | %
Maturities of lease liabilities as of December 28, 2019 are as follows:
(in thousands) | Operating Leases
Remainder of 2020 | $ | 21,863 |
2021 | 30,858 |
2022 | 22,045 |
2023 | 18,939 |
2024 | 17,965 |
Thereafter | 185,847 |
Total future lease payments | $ | 297,517 |
Less: imputed interest | (72,254 | )
Total | $ | 225,263 |
As of December 28, 2019, we have additional operating and finance leases that have not yet commenced of $3.8 million and $1.5 million, respectively. These leases will commence in 2020 with lease terms of 7 years to 5 years. Under the prior lease standard (ASC 840), as of September 30, 2019, future minimum lease payments under noncancellable operating leases are as follows (in thousands):
2020 | $ | 31,868 |
2021 | 33,094 |
2022 | 25,624 |
2023 | 19,279 |
2024 | 16,909 |
Thereafter | 186,037 |
Total minimum lease payments | $ | 312,811 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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