COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Operating Lease

The Company leases office facilities under various non-cancelable operating lease agreements with original lease periods expiring between 2016 and 2026. Rent expense was $1,219,000 and $1,117,000 for the three months ended September 30, 2016 and 2015, respectively. Rent expense was $3,515,000 and $3,210,000 for the nine months ended September 30, 2016 and 2015, respectively.

Financing Obligation

During April 2015, the Company began to occupy additional office space constructed under a 15 year build-to-suit lease arrangement entered into in October 2013. During the construction of the facility, the Company concluded that it was the “deemed owner” for accounting purposes due to its extensive involvement in the construction process. Upon completion of the construction, the Company was still considered to be the “deemed owner” of the building for accounting purposes as the asset did not qualify for sale-leaseback accounting treatment due to the Company’s continuing involvement. As such, costs for the building were recorded to “Building, leased” within “Property and equipment, net” and the related financing obligation of $15,975,000 remained recorded as of September 30, 2016. The portion of the lease obligation allocated to the land is being treated for accounting purposes as an operating lease.

Future Minimum Lease Payments

Future minimum lease payments under non-cancelable lease agreements as of September 30, 2016 were as follows (in thousands):



Year Ending December 31,	Operating Leases		Financing Obligation, Building- Leased		Total
2016 (remaining three months)	$	817	$	399	$	1,216
2017	2,558		1,630		4,188
2018	2,063		1,679		3,742
2019	1,940		1,729		3,669
2020	1,915		1,781		3,696
Thereafter	10,817		19,362		30,179
Total minimum lease payments	$	20,110	$	26,580	$	46,690

The remaining future minimum lease payments on the building, leased, include interest of $10,605,000 to be recognized over the remainder of the initial term of the lease agreement. A financing obligation of $15,975,000 remained recorded as of September 30, 2016.

Purchase Commitments

Future unconditional purchase commitments for software subscriptions and data center and communication services as of September 30, 2016 were as follows (in thousands):



Year Ending December 31,
2016 (remaining three months)	$	1,013
2017	3,228
2018	2,863
2019	725
Total minimum purchase commitments	$	7,829

Litigation

From time to time, the Company may become involved in legal proceedings, claims, and litigation arising in the ordinary course of business. Management is not currently aware of any matters that it expects will have a material adverse effect on the consolidated financial position, results of operations, or cash flows of the Company.