Operating Leases

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expense that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. For the three months ended December 31, 2019, we recorded operating lease expense of $1.2 million. Cash payments on lease liabilities during the three months ended December 31, 2019 totaled $1.1 million. Sublease income and variable lease expenses are de minimis.

At December 31, 2019, weighted-average remaining lease term and discount rate were as follows:



Weighted-average remaining lease term	4.4 years
Weighted-average discount rate	4.94%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2019:



Fiscal Years Ending September 30,
in thousands
2020 ^(a)	$	3,474
2021	4,217
2022	3,378
2023	2,560
2024	1,435
Thereafter	1,838
Total lease payments ^(b)	$	16,902
Less: Imputed interest	$	1,744
Total operating lease liabilities	$	15,158

^(a)Remaining lease payments are for the period beginning January 1, 2020 through September 30, 2020.

^(b)Lease payments excludes $4.0 million legally binding minimum lease payments for an office lease signed but not yet commenced at December 31, 2019. The related ROU asset and operating lease liability are not reflected on the Company’s condensed consolidated balance sheet as of December 31, 2019.

At September 30, 2019, under ASC 840, Leases (“ASC 840”), the future minimum rental commitments totaled $20.1 million under non-cancelable operating leases as follows: 2020 - $4.7 million; 2021 - $4.5 million; 2022 - $3.6 million; 2023 - $2.9 million; 2024 - $1.8 million; and $2.6 million thereafter.