Leases

6 Months Ended

Jun. 30, 2019

LEASES

We have several noncancellable operating leases, primarily for office space, that expire at various dates over the next five years. These leases generally contain renewal options to extend for one lease term of five years. For leases that we are reasonably certain we will exercise the lease renewal options, the options were considered in determining the lease term, and associated potential option payments are included in the lease payments. The payments used in the renewal term were estimated using the percentage rate increase of historical rent payments for each location where the renewal will be exercised.

Payments due under the lease contracts include annual fixed payments for office space. Variable payments including payments for our proportionate share of the building’s property taxes, insurance, and common area maintenance are treated as non-lease components and are recognized in the period for which the costs occur.

The components of lease cost were as follows (in thousands):



	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease expense	$	1,138	$	2,257

Leases with an initial term of 12 months or less ("short-term lease") are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. The short-term lease expense for the three and six months ended June 30, 2019 was $0.1 million and $0.2 million, respectively.

Minimum rental lease payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods of rent abatement and incentives. Rental expense for operating leases for the three and six months ended June 30, 2019 was $1.0 million and $2.1 million, respectively.

Other information related to leases was as follows (dollars in thousands):



	As of
	June 30, 2019
Supplemental cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flow from operating leases	$	2,267
Additional operating lease information:
ROU assets obtained in exchange for operating lease obligations	$	24,212
Reductions to ROU assets resulting from reductions to operating lease obligations	$	1,689
Weighted average remaining operating lease term	4.2 years
Weighted average discount rate on operating leases	4.49%

Amounts disclosed for ROU assets obtained in exchange for lease obligations include amounts added to the carrying amount of ROU assets resulting from lease modifications and reassessments including transition liabilities upon adoption of ASC 842 on January 1, 2019. We determined the discount rate for leases using an incremental borrowing rate to calculate the ROU assets and lease liabilities.

Maturities of operating lease liabilities under noncancellable leases were as follows (in thousands):



	As of
	June 30, 2019
2019 - remaining	$	2,318
2020	4,691
2021	4,717
2022	4,567
2023	3,813
Thereafter	8,081
Total undiscounted lease payments	28,187
Less imputed interest	(3,670		)
Total lease liabilities	$	24,517

Under ASC 840, Leases, future minimum lease payments under noncancellable operating leases payments were as follows (in thousands):



	As of
	December 31, 2018
Year ending:
2019	$	5,366
2020	5,279
2021	4,147
2022	2,729
2023	1,698
Thereafter	2,647
Total minimum lease payments	$	21,866