Leases

9 Months Ended

Mar. 31, 2020

Upon adoption of the new lease accounting guidance, the Company recognized operating lease liabilities of approximately $15.2 million based on the present value of the remaining minimum rental payments using an incremental borrowing rate of approximately 4%. The Company also recognized corresponding operating lease ROU assets of approximately $14.8 million. The difference relates to adjustments made to operating lease ROU assets for prepaid rent and deferred rent that existed as of the date of adoption. These operating lease ROU assets relate to offices, warehouses and other premises leased under non-cancelable operating leases expiring through June 2026 and vehicles and certain equipment leased under non-cancelable operating leases expiring through August 2023.

Operating lease expense recognized and supplemental cash flow information related to operating leases for the three and nine months ended March 31, 2020 were as follows (in thousands):



	Three Months Ended		Nine Months Ended
	March 31, 2020		March 31, 2020
Operating lease expense (including expense for lease agreements with related parties of $359 and $1,086 for the three and nine months ended March 31, 2019, respectively)	$	1,605	$	4,909
Cash payments for operating leases (including payments to related parties of $369 and $1,106 for the three and nine months ended March 31, 2019, respectively)	$	1,667	$	5,082
New operating lease assets obtained in exchange for operating lease liabilities	$	14,221	$	14,889

During the three and nine months ended March 31, 2020, the Company's costs related to short-term lease arrangements for real estate and non-real estate assets were immaterial. Variable payments expensed in the three and nine months ended March 31, 2020 were $0.2 million and $0.9 million, respectively.

As of March 31, 2020, the weighted average remaining lease term for operating leases was 4.7 years and the weighted average discount rate was 3.6%. Future minimum lease payments under noncancelable operating lease arrangements as of March 31, 2020 were as follows (in thousands):



Fiscal Year:	Minimum lease payments
2020 (remainder)	$	2,208
2021	6,974
2022	5,613
2023	4,219
2024	4,204
2025 and beyond	5,232
Total future lease payments	$	28,450
Less: Imputed interest	(2,859		)
Present value of operating lease liabilities	$	25,591

As of March 31, 2020, commitments under short-term lease arrangements were immaterial. As of March 31, 2020, operating and financing leases that have not yet commenced were immaterial.

The Company has entered into lease agreements with related parties. See Note 9, "Related Party Transactions," for discussion.