Leases and Contractual Obligations

12 Months Ended

Dec. 31, 2016

Note 11. Leases and Contractual Obligations

Operating Leases

The Company leases office space under non‑cancelable operating leases in the United States. As of December 31, 2016, the future minimum lease payments under non‑cancelable operating leases are as follows (in thousands):


	Operating
	Leases
2017	$	1,996
2018		1,880
2019		1,228
2020		1,272
2021		1,315
2022 and thereafter		4,164
	$	11,855

All of the total future minimum lease payments relate to facilities space. The facility lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. The Company recognizes rent expense on a straight‑line basis over the lease period and has accrued for rent expense incurred but not paid. Deferred rent represents the difference between actual operating lease payments due and straight‑line rent expense. The excess is recorded as a deferred rent liability in the early periods of the lease, when cash payments are generally lower than straight‑line rent expense, and are reduced in the later periods of the lease when payments begin to exceed the straight‑line expense. The Company also accounts for leasehold improvement incentives within its deferred rent liability. For abandoned facilities, the above contractual obligation schedule does not reflect any realized or potential subleases. Rent expense for the years ended December 31, 2016, 2015 and 2014 was $1.8 million, $1.3 million and $0.8 million, respectively.

Letter of Credit

In November 2014, the Company arranged for SVB to issue a letter of credit on its behalf in the amount of $0.3 million in lieu of a cash deposit in connection with the Company’s Purchase, NY office lease. The letter of credit has been extended to November 2017.

In connection with the Company lease agreement for office space in Lewisville, Texas in February 2015, the Company arranged for SVB to issue a letter of credit on its behalf in the amount of $1.0 million in lieu of a cash deposit. The letter of credit has been extended to February 2018.