Operating Leases

3 Months Ended

Mar. 31, 2020

The Company entered into operating lease agreements for offices in Chicago, Illinois, San Francisco, California, and Seattle, Washington. The operating leases require escalating monthly rental payments ranging from $17,000 to $280,000. Under the terms of the lease agreements, the Company is also responsible for its proportionate share of taxes and operating costs, which are treated as variable lease costs. The Chicago and Seattle leases expire in January 2028 and July 2020, respectively. The San Francisco lease expired in June 2019. The Company’s operating leases typically contain options to extend or terminate the term of the lease. The Company currently does not include any options to extend leases in its lease terms as it is not reasonably certain to exercise them. As such, it has recorded lease obligations only through the initial optional termination dates above.

On January 21, 2020, the Company entered into a new lease agreement for an office in Seattle, Washington with an expected total future commitment of $7.9 million, expected lease commencement date in August 2020 and is expected to expire in November 2030. For accounting purposes under ASC 842, the lease commenced on January 23, 2020, resulting in the recording of a $5.5 million right-of-use operating lease asset and operating lease liability.

The following table provides a summary of operating lease assets and liabilities as of March 31, 2020 (in thousands):



Assets
Operating lease right-of-use assets	$	10,884
Liabilities
Operating lease liabilities	2,139
Operating lease liabilities, non-current	23,272
Total operating lease liabilities	$	25,411

Operating lease expense for the three months ended March 31, 2020 and March 31, 2019 was $0.7 million and $0.6 million, respectively. Variable lease costs for the three months ended March 31, 2020 and March 31, 2019 was $0.8 million each. Cash payments related to operating leases for the three months ended March 31, 2020 and March 31, 2019 were $1.6 million and $1.3 million, respectively. The Company recognized $0.1 million of sublease rental income in other income on the consolidated statement of operations for each of the three months ended March 31, 2020 and March 31, 2019.

As of March 31, 2020, the weighted-average remaining lease term is 8.4 years and the weighted-average discount rate is 5.7%.

Remaining maturities of operating lease liabilities as of March 31, 2020 are as follows (in thousands):



Years ending December 31,
2020	$	484
2021	3,840
2022	3,930
2023	4,021
2024	4,117
Thereafter	16,353
Total future minimum lease payments	$	32,745
Less: imputed interest	(7,334		)
Total operating lease liabilities	$	25,411