Leases

12 Months Ended

Dec. 31, 2019

Effective January 1, 2019, the Company adopted Topic 842 using a modified retrospective method. Under this transition method, the Company has not restated comparative periods, and prior comparative periods will continue to be reported in conformity with ASC 840. On January 1, 2019, based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use (“ROU”) assets of $55.9 million and lease liabilities for operating leases of $65.5 million. At December 31, 2019, other assets include an ROU asset of $84.3 million, other current liabilities include short-term operating lease liabilities of $16.9 million, and other non-current liabilities include long term lease liabilities of $81.7 million. Finance leases are immaterial.

The Company primarily leases office space, data centers, vehicles, and equipment. Some of our leases contain variable lease payments, typically payments based on an index. The Company’s leases have remaining lease terms of one year to thirty years, some of which include options to extend from one to five years or more. The exercise of lease renewal options is typically at the Company's sole discretion; therefore, the majority of renewals to extend the lease terms are not reasonably certain to exercise and are not included in ROU assets and lease liabilities. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement, for the purposes of transition, the rate in effect at January 1, 2019. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability as of the modification date.

For contracts entered into on or after the effective date or at the inception of a contract, the Company assessed whether the contract is, or contains, a lease. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases. Therefore, leases entered into prior to January 1, 2019, are accounted for under the prior accounting standard and were not reassessed. The Company has also elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of twelve months or less. The effect of short-term leases would not be material to the ROU assets and lease liabilities.

Under ASC 842, a Company discounts future lease obligations by the rate implicit in the contract, unless the rate cannot be readily determined. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. In determining the borrowing rate, the Company considered the applicable lease terms, the Company's cost of borrowing, and for leases denominated in a foreign currency, the collateralized borrowing rate that the Company would obtain to borrow in the same currency in which the lease is denominated.

Total lease costs for the year ended December 31, 2019 were $20.5 million.

The supplementary cash and non-cash disclosures for the year ended December 31, 2019 are as follows (in thousands):



	December 31, 2019
Cash paid for operating lease liabilities	$	19,763
Right-of-use assets obtained in exchange for new operating lease obligations ¹	$	102,586
Weighted-average remaining lease term (years)	7.54
Weighted-average discount rate	4.64		%
¹Includes $55.9 million for operating leases existing on January 1, 2019

Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):



2020	$	19,785
2021	17,813
2022	14,438
2023	13,403
2024	12,824
Thereafter	38,992
Total lease payments	117,255
Less imputed interest	18,700
Present value of lease liabilities	$	98,555

Disclosures related to periods prior to the adoption of the new lease standard

The Company enters into noncancelable operating lease agreements for equipment, buildings and vehicles. The minimum lease payments for the noncancelable operating lease agreements are as follows (in thousands):



2019	$	19,678
2020	16,658
2021	14,826
2022	11,733
2023	11,017
Thereafter	24,374

Rent expense for noncancelable operating leases approximated $22.4 million and $18.4 million for the years ended December 31, 2018 and 2017, respectively.