LEASES

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU No. 2016-02”). This guidance amends the existing accounting considerations and treatments for leases through the creation of Topic 842, Leases, to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from such leases.

The Company determines if an arrangement is a lease at inception. The Company considers any contract where there is an identified asset and that it has the right to control the use of such asset in determining whether the contract contains a lease. An operating lease ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are to be recognized at commencement date based on the present value of lease payments over the lease term. As all of the Company’s operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the adoption date in determining the present value of lease payments. We estimate the incremental borrowing rate based on a yield curve analysis, utilizing the interest rate derived from the fair value analysis of our credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Our leases have remaining lease terms of one year to 11 years. Lease terms may include options to extend the lease term used in determining the lease obligation when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term for operating leases.

The following table present the cumulative effect of the changes made to the condensed consolidated balance sheets as of January 1, 2019, as a result of the adoption of ASC Topic 842:

	December 31, 2018		ASC 842			January 1, 2019

Operating lease right-of-use asset	$	-	$	37,993		$	37,993
Current portion of operating lease liability	$	-	$	8,999		$	8,999
Other short-term liabilities	$	968	$	(968	)	$	-
Long-term portion of operating lease liability	$	-	$	33,372		$	33,372
Accrued rent	$	3,410	$	(3,410	)	$	-

Our operating lease cost for the year ended December 31, 2019 was $14.5 million. Our variable lease cost for the year ended December 31, 2019 was $2.9 million. The net change in ROU asset amortization, operating lease liability amortization, and impact from re-measurements of $0.9 million is included in other assets in the condensed consolidated cash flows for the year ended December 31, 2019.

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

	December 31, 2019
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	12,926
Non-cash activity:
Lease liabilities arising from obtaining right-of-use assets*	$	63,911

* Includes effect of adoption of ASU 2016-02 and related amendments and a new lease entered into on January 1, 2019 of $5.6 million.

Weighted-average remaining lease term and discount rate for our operating leases is as follows:

	Year Ended December 31, 2019

Weighted-average remaining lease term	6.22 years
Weighted-average discount rate		12.86	%

Maturities of lease liabilities by fiscal year for our operating leases as of December 31, 2019 are as follows:

Year ending December 31,
2020		15,412
2021		13,600
2022		11,607
2023		9,988
2024		8,749
Thereafter		20,008
Total lease payments		79,364
Less: imputed interest		(24,204	)
Present value of lease liabilities	$	55,160

As of December 31, 2018, minimum lease payments under non-cancelable operating leases by period were expected to be as follows:

2019	$	16,939
2020		14,183
2021		10,708
2022		8,180
2023		5,811
Thereafter		17,610
	$	73,431