6. Leases

We lease certain land, buildings and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or more options to renew. The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets are limited to the expected lease term. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. As of September 30, 2019, we do not have any non-cancellable operating lease commitments that have not yet commenced.

ROU assets are classified within other intangibles, deferred costs and investments, net on the condensed consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets and lease liabilities were $6.0 million and $6.1 million at September 30, 2019, respectively. Payments on lease liabilities during the three and nine months ended September 30, 2019 totaled $442,000 and $1,258,000, respectively.

Lease expense includes cost for leases with terms in excess of one year. For the three and nine months ended September 30, 2019, our total lease expense was $420,000 and $1,272,000, respectively. Short-term lease costs are de minimus.

We have no financing leases and minimum annual rental commitments under non-cancellable operating leases consisted of the following at September 30, 2019 (in thousands):


Years Ending December 31,
2019 (a)	$	418
2020		1,524
2021		1,390
2022		1,205
2023		864
Thereafter		1,889
Total lease payments (b)		7,290
Less: Interest (c)		1,156
Present value of lease liabilities (d)	$	6,134

(a)

Remaining payments are for the three-months ending December 31, 2019.

(b)

Lease payments include options to extend lease terms that are reasonably certain of being exercised. There were no legally binding minimum lease payments for leases signed but not yet commenced at September 30, 2019.

(c)

Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.

(d)

The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.8 years and 4.7%, respectively, at September 30, 2019.