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Leasing Arrangements

9 Months Ended

Sep. 30, 2019

The Company leases real and personal property in the normal course of business under various operating leases and other insignificant finance leases, including non-cancelable and immaterial month-to-month agreements. We recognize rent expense on a straight-line basis over the lease term. During the three and nine month periods ended September 30, 2019, total lease cost was $1.6 million and $4.9 million, respectively. During the three and nine month period ended September 30, 2018, total lease cost under ASC 840 was $1.6 million and $4.9 million, respectively.

The following table sets forth the Company’s lease cost components (in thousands):



	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	1,200		$	3,613
Amortization of finance lease assets	5			54
Interest on finance lease liabilities	1			9
Short-term lease cost	1			28
Variable lease cost	445			1,238
Sublease income	(18		)	(24		)
Total lease cost (1)	$	1,634		$	4,918

(1) Of the total lease cost of $1.6 million during the three months ended September 30, 2019, $0.8 million was included within selling, general and administrative expenses, $0.4 million was including within cost of sales, and $0.4 million was included in research and development expenses in the Condensed Consolidated Statement of Comprehensive Income/(Loss). Of the total lease cost of $4.9 million during the nine months ended September 30, 2019, $2.6 million is being reported in selling, general and administrative expenses, $1.2 million was included within cost of sales and $1.1 million was included in research and development expenses within the Condensed Consolidated Statement of Comprehensive Income/(Loss).

The following table sets forth the Company’s Supplemental cash flow information related to leases (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	$	3,491
Operating cash flows from finance leases	9
Financing cash flows from finance leases	344

	Nine Months Ended September 30, 2019
Right-of-use assets, net obtained in exchange for new lease obligations:
Operating leases	24,764
Finance leases	$	71

The following table sets forth the Company’s Supplemental balance sheet information related to leases (in thousands):



	September 30, 2019
Right-of-use assets, net:
Operating leases, gross	$	24,711
Accumulated amortization	1,695
Operating leases, net	$	23,016
Finance leases (included in "Other non-current assets"), gross	70
Accumulated depreciation	15
Finance leases (included in "Other non-current assets"), net	$	55
Total Right-of-use assets, net	$	23,071

Lease liabilities:
Current portion of Operating lease liability	$	2,334
Long-term Operating lease liability	22,562
Total Operating lease liability	$	24,896
Current portion of Finance lease (included in "Accrued expenses and other liabilities") liability	$	19
Long-term Finance lease (included in "Pension obligations and other liabilities") liability	38
Total Finance lease liability	$	57
Total Lease liabilities	$	24,953

The following table sets forth the Company’s Weighted-average lease terms and discount rates (lease term in years):



	September 30, 2019
Weighted-average remaining lease terms:
Operating leases	8.48
Finance leases	2.83

Weighted-average discount rates:
Operating leases	9.95	%
Finance leases	5.50	%

The following table sets forth the Company’s scheduled maturities of lease liabilities as of September 30, 2019 (in thousands):



Year ending December 31,	Operating leases		Finance leases
2019 (last three months of 2019)	$	1,210	$	6
2020	4,592		22
2021	4,771		22
2022	4,517		13
2023	3,860		—
2024 and thereafter	18,901		—
Total lease payments (1)	$	37,851	$	63
Less: Imputed interest	$	12,955	$	6
Total lease liabilities	$	24,896	$	57

(1) Under ASC 842, the Company is required to take into consideration contractual lease renewal options that are reasonably assured to be exercised when determining the lease liability. As of September 30, 2019, the Company has approximately $11.4 million of reasonably assured renewal option payments included in the total lease payments.

The following table sets forth the Company’s schedule of future minimum rental payments for operating leases under ASC 840 as of December 31, 2018 (in thousands):



Year ending December 31,	Operating leases
2019	$	4,564
2020	4,647
2021	4,283
2022	3,724
2023	2,673
2024 and thereafter	6,976
Total lease payments	$	26,867

Leasing Arrangements