7. Commitments and Contingencies Leases We have operating leases for our headquarters, where we have office and research and development laboratory facilities, and equipment. Our leases have remaining lease terms of 1 to 10 years. Most of these leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases include renewal options at our election, with renewal terms that can extend the lease term from 1 to 10 years. These optional periods have not been considered in the determination of the right-of-use, or ROU, assets or lease liabilities associated with these leases as we did not consider it reasonably certain that we would exercise the options. Lease costs included in operating expenses in the consolidated statement of operations in relation to these operating leases were $3.1 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively. Included in these lease costs were variable lease cost s, which were not included within the measurement of our operating ROU assets and operating lease liabilities in the amount of $0.7 million and $0.9 million for the three months ended March 31, 2020 and 2019, respectively. The variable lease cost is comprised primarily of our cost in certain research and development arrangements that contain embedded equipment, and our proportionate share of operating expenses, property taxes, and insurance in relation with our facility lease. These costs are classified as operating lease expense due to our election to not separate lease and non-lease components. Supplemental cash flow information related to leases for the period reported is as follows (in thousands, except weighted-average remaining lease term and weighted-average discount rate): Three Months Ended March 31, 2020 2019 ROU assets obtained in exchange for new operating lease upon adoption of ASC 842 $  $ 14,177 Cash paid for amounts included in the measurement of lease liabilities 1,153 1,117 Weighted-average remaining lease term of operating leases (in years) 10 8.7 Weighted-average discount rate of operating leases 8.7 % 13.2 % The majority of our lease costs are driven by our operating lease for our headquarters in South San Francisco, where we have office and research and development laboratory facilities. In March 2017, we entered into a noncancelable operating lease, or Existing Lease, for approximately 67,185 square feet of space in South San Francisco, California, or Existing Premises. The Existing Lease term commenced in November 2017 as we gained control over physical access to the Existing Premises. We have acquired $11.1 million of leasehold improvements at the Existing Premises with the tenant inducement allowance provided under the Existing Lease. We are required to repay $1.7 million of the tenant inducement allowance to the landlord in the form of additional monthly rent with interest applied over the term of the Existing Lease. In August 2018, we entered into an amendment to the Existing Lease, or Lease Amendment, to relocate the leased premises from the Existing Premises to a to-be-constructed building consisting of approximately 164,150 rentable square feet of space, or Substitute Premises . The date on which we became responsible for paying rent under the Lease Amendment was March 13, 2020, or the Substitute Premises Payment Commencement Date. The Lease Amendment has a contractual term, or Substitute Premises Term, of 10 years from the Substitute Premises Payment Commencement Date. The Lease Amendment grants us an option to extend the Lease Amendment for an additional 10-year period. Future minimum rental payments under the Lease Amendment during the 10-year term are $121.5 million in the aggregate. Under the Lease Amendment, we are obligated to pay to the landlord certain costs, including taxes and operating expenses. On October 1, 2019, we determined that the Lease Amendment for the Substitute Premises had commenced as we had the right to control the Substitute Premises. The Lease Amendment also provides a tenant inducement allowance of up to $27.9 million, of which $4.1 million, if utilized, would be repaid to the landlord in the form of additional monthly rent with interest applied. As of March 31, 2020, we have capitalized $30.4 million of costs in construction-in-progress within property and equipment, net for construction of leasehold improvements at the Substitute Premises, which were mostly acquired with the tenant inducement provided under the Lease Amendment. We intend to vacate the Existing Premises and surrender and deliver the Existing Premises to the landlord on or before June 1, 2020, upon which time we will have no further obligations with respect to the Existing Premises. Upon signing of the Lease Amendment, we re-evaluated the remaining useful life of the leasehold improvements at the Existing Premises and started to amortize the leasehold improvements over the remaining period of expected use, resulting in an acceleration of depreciation expenses for approximately $1.9 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the maturities of our operating lease liabilities were as follows (in thousands): Year ending December 31, Amount 2020 (nine months) $ 5,878 (a) 2021 11,736 2022 12,116 2023 12,508 2024 12,913 2025 13,333 Thereafter 61,035 Total lease payments 129,519 Less: Imputed interest (b) (45,190 ) Present value of operating lease liabilities $ 84,329 (a) Includes our lease payments of $7.1 million, which is partially offset by the expected receipt of the remaining tenant inducements of $1.2 million. Contingencies In the ordinary course of business, we may be subject to legal claims and regulatory actions that could have a material adverse effect on our business or financial position. We assess our potential liability in such situations by analyzing potential outcomes, assuming various litigation, regulatory and settlement strategies. If we determine a loss is probable and its amount can be reasonably estimated, we accrue an amount equal to the estimated loss. No losses and no provision for a loss contingency have been recorded to date.