Leases

9 Months Ended

Sep. 30, 2019

The extent of the Company’s lease commitments consists of operating leases for physical office locations with terms ranging from one to 11 years. The Company has accounted for the portfolio of

operating leases by disaggregation based on the nature and term of the lease. Generally, the leases require a fixed minimum rent with contractual minimum rent increases over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet, but rather lease expense from these leases is recognized on a straight-line basis over the lease term.

When available, the rate implicit in the lease to discount lease payments to present value would be used; however, none of the Company's significant leases as of September 30, 2019 provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate for each portfolio of leases to discount the lease payments based on information available at lease commencement.

The Company has evaluated the performance of existing leases in relation to its leasing strategy and determined that most renewal options would not be reasonably certain to be exercised.

The right of use asset and related lease liability are determined based on the lease component of the consideration in each lease contract. The Company has evaluated its lease portfolio for appropriate allocation of the consideration in the lease contracts between lease and nonlease components based on standalone prices and determined the allocation per the contracts to be appropriate.



Lease Cost	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost ^(a)	Cost of revenue	$	2,029	$	5,814
Operating lease cost ^(a)	Operating expenses	865		2,575
Total lease cost		$	2,894	$	8,389

(a) Includes lease expense with initial terms of 12 months or less of $399 and $1,889 for the three months ended and nine months ended September 30, 2019, respectively.



Maturity of Lease Liabilities	Operating Leases
2019, excluding the nine months ended September 30, 2019	$	2,013
2020	14,437
2021	14,111
2022	13,409
2023	12,533
Thereafter	27,757
Total lease payments	$	84,260
Less: Interest and other ^(a)	(21,470		)
Present value of lease liabilities	$	62,790

(a) Interest and other consists of interest expense related to capitalized right of use lease liabilities of $9,050, commitments related to leases that have not yet commenced and leases with initial terms of 12 months or less.



Lease Term and Discount Rate	September 30, 2019
Weighted average remaining operating lease term (years)	6.1
Weighted average discount rate for operating leases	4.4	%



Supplemental Cash Flow Information	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	7,040
Right of use assets obtained in exchange for lease liabilities
Operating leases	$	50,263