LEASES

9 Months Ended

Sep. 30, 2021

The Company leases all of its facilities, including its EXPAREL manufacturing facility in San Diego, California and its iovera° manufacturing facility in Fremont, California. These leases have remaining terms up to 8.9 years, some of which provide renewal options at the then-current market value. The Company also has an embedded lease with Thermo Fisher Scientific Pharma Services for the use of their manufacturing facility in Swindon, England. A portion of the associated monthly base fees have been allocated to the lease component based on a relative fair value basis.

The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease costs are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Fixed lease costs	$	2,919	$	3,099	$	8,762	$	7,085
Variable lease costs	416		611		1,318		1,661
Total	$	3,335	$	3,710	$	10,080	$	8,746

Supplemental cash flow information related to operating leases is as follows (in thousands):


	Nine Months Ended
	September 30,
	2021		2020
Cash paid for operating lease liabilities, net of lease incentive	$	9,868	$	11,251
Right-of-use assets recorded in exchange for lease obligations	$	212	$	42,101

The Company has elected to net the amortization of the right-of-use asset and the reduction of the lease liability principal in other liabilities in the condensed consolidated statement of cash flows.

The Company has measured its operating lease liabilities at an estimated discount rate at which it could borrow on a collateralized basis over the remaining term for each operating lease. The weighted average remaining lease term and the weighted average discount rate are summarized as follows:


	September 30,
	2021		2020
Weighted average remaining lease term	8.46 years		9.39 years
Weighted average discount rate	6.88	%	6.88	%

Maturities of the Company’s operating lease liabilities are as follows (in thousands):


Year	Aggregate Minimum Payments Due
2021 (remaining three months)	$	2,659
2022	10,645
2023	10,697
2024	10,980
2025	11,271
2026 and thereafter	50,802
Total lease payments	97,054

Less: imputed interest	(24,391)
Total operating lease liabilities	$	72,663