Leases

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

The Company leases office space under various operating lease agreements, which have remaining lease terms of one year to seven years. Prior to January 1, 2019, the Company accounted for leases under ASC Topic 840. On January 1, 2019, the Company adopted ASC Topic 842, which replaced ASC Topic 840. The most significant impact upon adoption was the recognition of lease liabilities and ROU assets for all operating leases with a term greater than 12 months on its balance sheet. Refer to Note 3, Recent Accounting Pronouncements, for additional information on the impact of adoption.

The following discussion relates to the Company’s lease accounting policy, effective January 1, 2019, under ASC Topic 842 for the six months ended June 30, 2019.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets, other current liabilities, and operating lease liabilities on the consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at

commencement date. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. In determining the expected lease term, the majority of the Company’s renewal options are not reasonably certain based on conditions of the Company’s existing leases and its overall business strategies. The Company will periodically reassess expected lease terms based on significant triggering events or compelling economic reasons to exercise renewal options. The Company utilizes its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component.

Supplemental balance sheet information related to leases was as follows (in thousands):



	June 30, 2019
Other current liabilities	$	8,379
Operating lease liabilities	20,628
Total	$	29,007

Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows (in thousands):



	June 30, 2019
2019 remaining	$	3,828
2020	8,591
2021	6,745
2022	5,021
2023	4,022
Thereafter	4,286
Total future lease payments	32,493
Less implied interest	(3,486		)
Total	$	29,007

Operating lease expense for the three and six months ended June 30, 2019 was $2.5 million and $4.6 million, respectively, of which $0.3 million and $0.6 million related to variable lease payments, respectively. Short term lease payments were immaterial for the three and six months ended June 30, 2019. Operating cash flows for amounts included in the measurement of the Company’s operating lease liabilities for the six months ended June 30, 2019 were $3.8 million. ROU assets obtained in exchange for lease liabilities during the six months ended June 30, 2019 were $9.1 million. The weighted average remaining lease term of the Company’s operating leases as of June 30, 2019 was four years and the weighted average incremental borrowing rate was 4.9% as of June 30, 2019.

The following discussion relates to the Company’s lease accounting policy under ASC Topic 840 for the year ended December 31, 2018.

Future minimum commitments under these lease agreements as of December 31, 2018 were as follows (in thousands):



	December 31, 2018
2019	$	7,375
2020	6,777
2021	5,071
2022	3,288
2023	2,189
Thereafter	1,420
Total future lease payments	$	26,120

Rent expense for the three and six months ended June 30, 2018 was $2.2 million and $4.2 million, respectively.