LEASES

12 Months Ended

Dec. 31, 2019

LEASES:

On January 1, 2019, the Company adopted Topic 842 and elected the available transition-related practical expedient to recognize the cumulative effect of initially adopting Topic 842 as an adjustment to the opening balance sheet in the period of adoption. In addition, the Company elected to not reassess whether contracts are or contain leases, lease classification, or initial direct costs for existing leases as of January 1, 2019. The Company also elected other available practical expedients for existing leases at adoption and new leases post-adoption, and will not record leases with an initial term of 12 months or less on the balance sheet and will not separate lease components from non-lease components. Only the minimum lease payments in accordance with Topic 840 were included in the calculation of the ROU and liability for existing leases as of January 1, 2019. The consolidated balance sheets and results of operations for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under Topic 840.

The Company's leases include office buildings for its facilities worldwide and car leases in Israel, which are all classified as operating leases. Certain lease agreements include rental payments that are adjusted periodically for the consumer price index ("CPI"). The ROU and lease liability were calculated using the CPI as of the adoption date and will not be subsequently adjusted. Certain leases include renewal options that are under the Company's sole discretion. The renewal options were included in the ROU and liability calculation if it was reasonably assured that the Company will exercise the option.

The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of Topic 842 were as follows:



	December 31, 2018		Adjustments		January 1, 2019
	(in thousands)
Deferred taxes and other long-term assets	$	118,182	$	69,102	$	187,284
Accrued liabilities	$	121,878	$	16,618	$	138,496
Other long-term liabilities	$	54,113	$	52,484	$	106,597

The components of lease expense and supplemental cash flow information related to leases for the year ended December 31, 2019 were as follows:



	Year ended December 31, 2019
	(in thousands)
Components of lease expense:
Operating lease cost	$	23,163
Supplemental cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	20,856
Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets	$	22,403

For the year ended December 31, 2019, the weighted average remaining lease term is 6.8 years, and the weighted average discount rate is 3.01 percent. The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

Maturities of lease liabilities as of December 31, 2019 were as follows:



	(in thousands)
2020	$	20,288
2021	16,840
2022	9,832
2023	9,034
2024	8,777
Thereafter	23,645
Total (1)	88,416
Less: Imputed interest	(7,662		)
Lease liability	$	80,754

(1) Future lease payments have not been reduced by minimum sublease rental income of $3.6 million owed to the Company in the future under noncancelable subleases.

The lease liabilities as of December 31, 2019 do not include the obligations under a lease agreement related to an office being built in Tel Aviv, Israel. The Company is not involved in the construction and will not be exposed to any risks during the construction period. The lease term expires 10 years after the expected lease inception. In addition, the lease contains a renewal option, which the Company determined is not reasonably assured to be exercised. As of December 31, 2019, the estimated total future lease obligation was approximately $31.8 million.