Leases

3 Months Ended

May 31, 2020

Note 4 - Leases

Adoption of the new lease standard resulted in the recording of lease assets and lease liabilities of approximately $37.1 million and $47.2 million, respectively, as of March 1, 2019. The difference between the lease assets and lease liabilities primarily relates to unamortized lease incentives and deferred rent recorded in accordance with the previous lease guidance. The new standard did not materially impact our consolidated statements of income or cash flows.

We primarily have leases for office space, which are classified as operating leases. Operating leases are included in operating lease assets, accrued expenses and other current liabilities, and lease liabilities, non-current in our consolidated balance sheets. Operating lease assets and operating lease liabilities are

recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our lease contracts do not provide an explicit interest rate, we use an estimated secured incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We include options to extend or terminate the lease in the lease term for accounting considerations, when it is reasonably certain that we will exercise that option. Our leases have remaining lease terms of less than 1 to 13 years. Lease expense for lease payments is recognized on a straight-line basis over the lease term in a manner similar to previous accounting guidance. We do not recognize leases with an initial term of twelve months or less on the balance sheet and instead recognize the related lease payments as expense in the condensed consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component for all asset classes. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease expense recognized in the condensed consolidated statements of income was $1.6 million for both of the three month periods ended May 31, 2020 and 2019. Short-term lease expense is excluded from this amount and is not material. For the three month periods ended May 31, 2020 and 2019, rent expense related to all our operating leases was $2.1 and $2.0 million, respectively. The non-cash component of lease expense is included as an adjustment to reconcile net income to net cash provided by operating activities in the condensed consolidated statements of cash flows. A summary of supplemental lease information is as follows:


	May 31, 2020
Weighted average remaining lease term (years)	10.5
Weighted average discount rate	6.13%
Year-to-date cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	1,272

A summary of our estimated lease payments, imputed interest and liabilities are as follows:


(in thousands)
Fiscal 2021 (balance for remainder of fiscal year)	$	5,014
Fiscal 2022	6,375
Fiscal 2023	6,044
Fiscal 2024	5,332
Fiscal 2025	5,762
Thereafter	34,370
Total future lease payments	62,897
Less: imputed interest	(17,808)
Present value of lease liability	$	45,089


	May 31, 2020
Lease liabilities, current (1)	$	4,154
Lease liabilities, non-current	40,935
Total lease liability	$	45,089

(1) Included as part of "Accrued expenses and other current liabilities" on the condensed consolidated balance sheet.