LEASES

9 Months Ended

Sep. 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	September 30, 2019
		(In thousands)
Assets:
Right-of-use assets	Right-of-use assets	$	177,797

Liabilities:
Current lease liabilities	Accrued expenses and other current liabilities	33,029
Long-term lease liabilities	Other long-term liabilities	198,962
Total lease liabilities		$	231,991



Lease Cost	Income Statement Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
		(In thousands)
Fixed lease cost	Cost of revenue	$	975	$	3,181
Fixed lease cost	Selling and marketing expense	2,836		7,747
Fixed lease cost	General and administrative expense	7,424		24,014
Fixed lease cost	Product development expense	450		1,050
Total fixed lease cost ^(a)		11,685		35,992
Variable lease cost	Cost of revenue	90		354
Variable lease cost	Selling and marketing expense	337		1,007
Variable lease cost	General and administrative expense	1,799		5,487
Variable lease cost	Product development expense	74		173
Total variable lease cost		2,300		7,021
Net lease cost		$	13,985	$	43,013

_____________________

^(a)Includes approximately $1.1 million and $4.2 million of short-term lease cost and $0.6 million and $1.6 million of sublease income for the three and nine months ended September 30, 2019, respectively.

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



Remainder of 2019	$	9,565
2020	46,199
2021	40,761
2022	33,659
2023	28,836
After 2023	249,912
Total	408,932
Less: Interest	176,941
Present value of lease liabilities	$	231,991

_____________________


^(b)	Lease payments exclude $6.0 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 September 30, 2019:



Remaining lease term	15.2 years
Discount rate	6.02	%



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Other Information:
Right-of-use assets obtained in exchange for lease liabilities	$	6,699	$	59,857
Cash paid for amounts included in the measurement of lease liabilities	$	10,719	$	34,433