18.Leases

The Company has operating and finance leases for office space, equipment and vehicles.

Management determines if a contract is or contains a lease at inception of the contract or modification of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.

Finance and operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.

The Company’s lease arrangements have lease and non-lease components. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases recorded on the balance sheet consists of the following:


	March 31,		December 31,
Leases	2020		2019
Assets
Operating lease right-of-use assets, net (1)	$	17,715	$	17,997
Financing lease right-of-use assets, net (2)		15,608		7,896
Total assets	$	33,323	$	25,893
Liabilities
Current
Operating	$	5,174	$	5,043
Financing		4,567		2,788
Total current		9,741		7,831
Noncurrent
Operating		13,211		13,596
Financing		9,227		3,760
Total noncurrent		22,438		17,356
Total liabilities	$	32,179	$	25,187

(1)

Operating lease right-of-use assets are recorded net of accumulated amortization of $6.4 million as of March 31, 2020.

(2)

Financing lease right-of-use assets are recorded net of accumulated amortization of $6.6 million as of March 31, 2020.

Other information related to lease term and discount rate is as follows:


	March 31,		December 31,
	2020		2019
Weighted Average Remaining Lease Term (in years)
Operating leases	5.18		5.30
Financing leases	4.88		1.18
Weighted Average Discount Rate
Operating leases (1)	4.80	%	4.80	%
Financing leases	4.83	%	5.10	%

(1)

Upon adoption of the new lease standard, discount rates used for existing operating leases were established on January 1, 2019.

The components of lease expense are as follows:


	Three Months Ended March 31,
	2020		2019
Operating lease costs:
Operating lease cost	$	1,614	$	1,701
Short-term lease cost (1)		1,161		68
Financing lease costs:
Interest on lease liabilities		106		103
Amortization of right-of-use assets		700		569
Total lease cost	$	3,581	$	2,441

(1)

Includes expenses related to leases with a lease term of more than one month but less than one year.

Supplemental cash flow information related to leases is as follows:


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,585	$	1,674
Operating cash flows for finance leases	$	106	$	103
Financing cash flows for finance leases	$	942	$	696
Non-cash activity:
ROU assets obtained in exchange for new operating lease liabilities	$	2,076	$	23,431
ROU assets obtained in exchange for new financing lease liabilities	$	8,412	$	—

Maturities of lease liabilities are summarized as follows:


	Operating Leases		Finance Leases
Year ending December 31,
2020 (excluding the three months ended March 31, 2020)	$	4,521	$	3,935
2021		4,723		4,650
2022		3,215		1,030
2023		2,375		1,500
2024		1,818		703
Thereafter		4,161		3,810
Total future minimum lease payments		20,813		15,628
Less - amount representing interest		2,428		1,834
Present value of future minimum lease payments		18,385		13,794
Less - current lease obligations		5,174		4,567
Long-term lease obligations	$	13,211	$	9,227