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Leases Leases

12 Months Ended

Dec. 31, 2019

On January 1, 2019, the Company adopted Accounting Standards Codification (ASC) 842, “Leases,” using the transition method of adoption, which allowed the Company to apply the standard on a prospective basis with a cumulative-effect adjustment to the opening balance sheet as of the adoption date. Accordingly, the Company recorded lease assets of $17,522,000, current lease liabilities of $4,736,000, and non-current lease liabilities of $12,669,000 on its Consolidated Balance Sheet as of January 1, 2019.

As part of the adoption, the Company elected a practical expedient package to be applied to all of its leases upon transition, and as a result, the Company did not reassess: 1) whether any expired or existing contracts contain leases;

2) the lease classification for any expired or existing leases; and 3) the accounting for initial direct costs for any existing leases.

The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion. There were no options to extend or terminate that were included in the determination of the lease term for the leases outstanding as of December 31, 2019. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for the leases outstanding as of December 31, 2019.

The total operating lease expense and operating lease cash payments in 2019 were $6,893,000 and $6,530,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected

not to recognize a lease asset or lease liability was $275,000 in 2019. Annual rental expense prior to the adoption of ASC 842 was $8,186,000 in 2018 and $6,738,000 in 2017.

Future operating lease cash payments are as follows (in thousands):



Year Ended December 31,	Amount
2020	6,565
2021	5,558
2022	3,822
2023	3,000
2024	927
Thereafter	310
	$	20,182

The discounted present value of the future lease cash payments resulted in a lease liability of $17,973,000 as of December 31, 2019.

The weighted-average discount rate was 4.6% for the leases outstanding as of December 31, 2019. The weighted-average remaining lease term was 3.7 years for the leases outstanding as of December 31, 2019. The Company did not have any leases that have not yet commenced but that create significant rights and obligations as of December 31, 2019.

The Company owns a building adjacent to its corporate headquarters that is partially occupied with a tenant who has a lease agreement that will expire in 2022. Annual rental income totaled $311,000 in 2019, $1,116,000 in 2018, and $1,474,000 in 2017. Rental income and related expenses are included in "Other income (expense)" on the Consolidated Statements of Operations.

Future minimum rental receipts under non-cancelable lease agreements are as follows (in thousands):



Year Ended December 31,	Amount
2020	307
2021	307
2022	307
	$	921

Leases

2) the lease classification for any expired or existing leases; and 3) the accounting for initial direct costs for any existing leases.

not to recognize a lease asset or lease liability was $275,000 in 2019. Annual rental expense prior to the adoption of ASC 842 was $8,186,000 in 2018 and $6,738,000 in 2017.

Future operating lease cash payments are as follows (in thousands):



Year Ended December 31,	Amount
2020	6,565
2021	5,558
2022	3,822
2023	3,000
2024	927
Thereafter	310
	$	20,182

The discounted present value of the future lease cash payments resulted in a lease liability of $17,973,000 as of December 31, 2019.

Future minimum rental receipts under non-cancelable lease agreements are as follows (in thousands):



Year Ended December 31,	Amount
2020	307
2021	307
2022	307
	$	921