Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Operating Leases

For some of our offices and data centers, we have entered into non-cancelable operating lease agreements with various expiration dates through February 28, 2035. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments.

Total operating lease costs was $14.7 million, excluding short-term leases costs, variable lease costs and sublease income each of which were immaterial for the three months ended March 31, 2019. Total lease expenses recognized prior to our adoption of Topic 842 was $11.4 million for the three months ended March 31, 2018.

For the three months ended March 31, 2019, cash paid for amounts included in the measurement of operating lease liabilities was $10.0 million and operating lease liabilities arising from obtaining operating right of-use assets totaled $67.7 million.

As of March 31, 2019, the weighted-average remaining lease term is 10.5 years, and the weighted-average discount rate is 3.9%.

Maturities of operating lease liabilities as of March 31, 2019 are presented in the table below (in thousands):



Years Ending December 31,
Remainder of 2019	$	44,266
2020	59,080
2021	57,605
2022	55,098
2023	50,564
Thereafter	259,664
Total operating lease payments	526,277
Less: imputed interest	(103,381		)
Present value of operating lease liabilities	$	422,896

In addition to the amounts above, as of March 31, 2019, we have operating leases, primarily for offices, that have not yet commenced with undiscounted cash flows of $413.4 million. These operating leases will commence between 2019 and 2022 with lease terms of three years to 15 years.

Future minimum commitments under our non-cancelable operating leases as of December 31, 2018 are presented in the table below (in thousands):



Years Ending December 31,
2019	$	55,435
2020	60,996
2021	63,348
2022	67,707
2023	72,491
Thereafter	578,874
Total	898,851

Other Contractual Commitments

Other contractual commitments consist of data center and IT operations and sales and marketing activities. There were no material contractual obligations that were entered into during the three months ended March 31, 2019 that were outside the ordinary course of business.

In addition to the amounts above, the repayment of our 2022 Notes with an aggregate principal amount of $782.5 million is due on June 1, 2022. Refer to Note 10 for further information regarding our Notes.

In addition to the obligations in the table above, approximately $4.8 million of unrecognized tax benefits have been recorded as liabilities as of March 31, 2019.

Letters of Credit

As of March 31, 2019, we had letters of credit in the aggregate amount of $21.3 million, primarily in connection with our customer contracts and operating leases.

Legal Proceedings

From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss.

Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations.