LEASES (Notes)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

LEASES

LEASES

The Company is a lessee to leases of corporate offices and certain office equipment. The majority of leases for corporate offices include one or more options to renew, with renewal terms ranging from two to five years. These renewal options have not been included in the calculation of right-of-use assets and lease liabilities, as the Company is not reasonably certain of the exercise of these renewal options. The Company used its incremental borrowing rate to calculate the right-of-use asset and lease liability for each lease.

As of September 30, 2019, right-of use assets totaling $27.0 million are included in other non-current assets and lease liabilities totaling $30.2 million are included in accrued expenses and other current liabilities and other non-current liabilities in the accompanying balance sheet.

During the second quarter of 2019, the Company recognized an impairment loss of $0.5 million within general and administrative expense on the consolidated statements of operations and comprehensive income, for the right-of-use asset related to an office lease. The Company vacated the office space in the second quarter of 2019 and adjusted the right-of-use asset to its fair value based on estimated sublease income.

Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive income, consists of the following (in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	1,765	$	4,495
Short-term lease cost	21		69
Total lease cost	$	1,786	$	4,564

Weighted average remaining lease term and discount rate for operating leases are as follows:

	September 30, 2019
Weighted average remaining lease term	5.2 years
Weighted average discount rate	4.7	%

Supplemental cash flow information related to leases is as follows (in thousands):

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,191
Right-of-use assets obtained in exchange for new operating lease liabilities	$	21,912

Maturities of lease liabilities as of September 30, 2019 are as follows (in thousands):

	Operating Leases
Remainder of current year	$	1,977
Year ending December 31, 2020	8,066
Year ending December 31, 2021	6,032
Year ending December 31, 2022	5,495
Year ending December 31, 2023	5,191
Thereafter	7,287
Total lease payments	34,048
Less: Interest	3,887
Present value of lease liabilities	$	30,161

Future minimum payments as of December 31, 2018 under operating lease agreements having an initial or remaining non-cancelable lease term in excess of one year are as follows (in thousands):

	Amount
Year ending December 31, 2019	$	4,406
Year ending December 31, 2020	3,188
Year ending December 31, 2021	1,094
Year ending December 31, 2022	736
Year ending December 31, 2023	228
Total	$	9,652

The Company operated as a lessor in connection with the office buildings in Charlotte, North Carolina acquired in December 2016. The properties were sold in the second quarter of 2019 to an unrelated third party. See Note 6—Assets Held for Sale for further information.

Rental income of $0.3 million in the first nine months of 2019, and $0.2 million and $0.7 million in the third quarter and first nine months of 2018, respectively, is included in other income on the accompanying consolidated statements of operations and comprehensive income.

LEASES

LEASES

The Company is a lessee to leases of corporate offices and certain office equipment. The majority of leases for corporate offices include one or more options to renew, with renewal terms ranging from two to five years. These renewal options have not been included in the calculation of right-of-use assets and lease liabilities, as the Company is not reasonably certain of the exercise of these renewal options. The Company used its incremental borrowing rate to calculate the right-of-use asset and lease liability for each lease.

As of September 30, 2019, right-of use assets totaling $27.0 million are included in other non-current assets and lease liabilities totaling $30.2 million are included in accrued expenses and other current liabilities and other non-current liabilities in the accompanying balance sheet.

During the second quarter of 2019, the Company recognized an impairment loss of $0.5 million within general and administrative expense on the consolidated statements of operations and comprehensive income, for the right-of-use asset related to an office lease. The Company vacated the office space in the second quarter of 2019 and adjusted the right-of-use asset to its fair value based on estimated sublease income.

Lease expense, which is included in general and administrative expense on the accompanying consolidated statements of operations and comprehensive income, consists of the following (in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	1,765	$	4,495
Short-term lease cost	21		69
Total lease cost	$	1,786	$	4,564

Weighted average remaining lease term and discount rate for operating leases are as follows:

	September 30, 2019
Weighted average remaining lease term	5.2 years
Weighted average discount rate	4.7	%

Supplemental cash flow information related to leases is as follows (in thousands):

	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,191
Right-of-use assets obtained in exchange for new operating lease liabilities	$	21,912

Maturities of lease liabilities as of September 30, 2019 are as follows (in thousands):

	Operating Leases
Remainder of current year	$	1,977
Year ending December 31, 2020	8,066
Year ending December 31, 2021	6,032
Year ending December 31, 2022	5,495
Year ending December 31, 2023	5,191
Thereafter	7,287
Total lease payments	34,048
Less: Interest	3,887
Present value of lease liabilities	$	30,161

Future minimum payments as of December 31, 2018 under operating lease agreements having an initial or remaining non-cancelable lease term in excess of one year are as follows (in thousands):

	Amount
Year ending December 31, 2019	$	4,406
Year ending December 31, 2020	3,188
Year ending December 31, 2021	1,094
Year ending December 31, 2022	736
Year ending December 31, 2023	228
Total	$	9,652

The Company operated as a lessor in connection with the office buildings in Charlotte, North Carolina acquired in December 2016. The properties were sold in the second quarter of 2019 to an unrelated third party. See Note 6—Assets Held for Sale for further information.

Rental income of $0.3 million in the first nine months of 2019, and $0.2 million and $0.7 million in the third quarter and first nine months of 2018, respectively, is included in other income on the accompanying consolidated statements of operations and comprehensive income.