Leases (Notes)

3 Months Ended

Mar. 31, 2020

Leases

We determine if an arrangement is a lease at inception. Our operating lease assets are separately stated in operating lease right-of-use ("ROU") assets and our financing lease assets are included in other assets on our condensed consolidated balance sheets. Our lease liabilities are included in accrued liabilities, and other long-term liabilities on our condensed consolidated balance sheets. We have elected not to recognize an ROU asset and lease liability for leases with terms of twelve months or less.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Most of our leases do not provide an implicit rate, therefore we use our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term based on the information available at commencement date. Our lease ROU assets exclude lease incentives and initial direct costs incurred. Our lease terms include options to extend when it is reasonably certain that we will exercise that option. All of our operating leases have stated lease payments, which may include fixed rental increases. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Our leases are for corporate offices, sales and support offices, a distribution facility, device service centers and certain equipment. Our leases have original lease terms of one year to fifteen years, some of which include options to extend the leases for up to an additional five years. For all of our leases, we do not include optional periods of extension in our current lease terms for the exercise of options to extend is not reasonably certain.

The following table presents the components of our lease cost (in thousands):



	For the three months ended March 31,
	2020		2019
Operating lease cost	$	2,791	$	2,430

Finance lease cost	29		—

Short-term lease cost	54		96

Total lease cost	$	2,874	$	2,526

The following table presents the supplemental cash flow information related to our leases (in thousands):



	For the three months ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,457	$	2,219
Operating cash flows from finance leases	$	29	$	—

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	19,094	$	98
Finance leases	$	800	$	—

The following table presents the supplemental balance sheet information related to our operating leases (in thousands, except lease term and discount rate):



	As of March 31, 2020			As of December 31, 2019
Operating leases
Operating lease right-of-use assets	$	50,430		$	34,465

Accrued liabilities	$	7,544		$	7,362
Other long-term liabilities	45,166			28,896
Total operating lease liabilities	$	52,710		$	36,258

Weighted Average Remaining Lease Term
Operating leases	7.3 years			6.0 years

Weighted Average Discount Rate
Operating leases	5.06		%	5.57		%

The following table presents the supplemental balance sheet information related to our finance leases (in thousands, except lease term and discount rate):



	As of March 31, 2020
Financing leases
Financing lease right-of-use assets	$	789

Accrued liabilities	$	188
Other long-term liabilities	601
Total financing lease liabilities	$	789

Weighted Average Remaining Lease Term
Financing leases	4.0 years

Weighted Average Discount Rate
Financing leases	4.32		%

As of March 31, 2020, the maturities of our operating and financing lease liabilities for each of the next five years is approximately (in thousands):



	Operating Leases			Finance Leases
Remainder of 2020	$	7,195		$	174
2021	10,021			218
2022	9,309			218
2023	8,494			218
2024	8,094			25
2025	4,816			—
Thereafter	14,906			—
Total Lease Payments	62,835			853
Less imputed interest	(10,125		)	(64		)
Total	$	52,710		$	789