

6.	Leases

On January 1, 2019 we adopted ASC 842 using the modified retrospective transition method. Results for the reporting period beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with our historical accounting under ASC 840, Leases. Upon adoption of ASC 842, we increased our total assets and liabilities due to the recording of operating lease ROU assets and operating lease liabilities of approximately $50.8 million and $63.7 million, respectively, as of January 1, 2019. These increases did not have a material impact on our results of operations or cash flows.

For all leases that commenced before the effective date of ASC 842, we elected to apply the permitted practical expedients to not reassess the following: (1) whether any expired or existing contracts contain leases; (2) the lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases.

We determine if an arrangement is a lease at inception of a contract. ROU 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 lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components and have elected to account for these as a single lease component related to our other operating facilities.

We have operating leases for office space, other operating facilities, vehicles and office equipment. Our fixed operating lease costs for the three months ended March 31, 2019 were $3.8 million and are included in general and administrative expenses on our Consolidated Statements of Operations. During the three months ended March 31, 2019, cash paid for amount included in the measurement of operating lease liabilities was $4.0 million.

The following table presents the lease balances within our Condensed Consolidated Balance Sheets, weighted average lease term and weighted average discount rates related to our operating leases:



(dollars in thousands)	Classification in Condensed Consolidated Balance Sheets	March 31, 2019

Operating lease ROU assets	Right-of-use leased assets	$	50,259

Lease liabilities:
Current operating lease liabilities	Other accrued liabilities	$	13,065
Long-term operating lease liabilities	Operating lease liabilities, net of current	50,371
Total operating lease liabilities		$	63,436
Less:
Landlord funded tenant improvements		$	9,368
Deferred rent		3,809
Operating lease ROU assets		$	50,259

Weighted average remaining lease term (years)		6
Weighted average discount rate		4.8		%

The following presents the maturity of our operating leases liabilities as of March 31, 2019:



(in thousands)	Operating Leases

Remainder of 2019	$	11,791
2020	14,194
2021	11,282
2022	9,945
2023	7,631
Thereafter	18,631
Total remaining obligation	73,474
Less imputed interest	10,038
Present value of lease liabilities	$	63,436

As of March 31, 2019, we have additional operating leases that have not yet commenced of $20.5 million with lease terms ranging from 4 years to 7 years.