Leases

We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Certain of our leases include options to extend the term of the lease or to terminate the lease prior to the end of the initial term. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. As most of our lease agreements do not explicitly state the discount rate implicit in the lease, we use our incremental borrowing rate on the commencement date to calculate the present value of future payments.

Our leases commonly include payments that are based on the Consumer Price Index (CPI) or other similar indices. These variable lease payments are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts, are excluded from the ROU asset and lease liability, and are expensed as incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-payments and initial direct costs of obtaining the lease, such as commissions.

In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.

We have operating leases for office facilities, vehicles and computer and office equipment. We do not have any finance leases.

Lease expense is included in Cost of Revenue and General & Administrative Expenses on the condensed consolidated statements of operations, and is recorded net of immaterial sublease income. The components of lease expense were as follows (in thousands):



	Three Months Ended March 31, 2019
Operating lease cost	$	2,457
Short-term lease cost	353
Total lease costs	$	2,810

Supplemental information related to leases was as follows (dollars in thousands):



	Three Months Ended March 31, 2019
Operating lease right-of-use assets	$	29,273

Current portion of operating lease liabilities	$	9,402
Non-current portion of operating lease liabilities	23,653
Total operating lease liabilities	$	33,055

Cash paid for amounts included in the measurement of operating lease liabilities	$	2,416

Right-of-use assets obtained in exchange for operating lease liabilities	$	467

Weighted-average remaining lease term for operating leases (years)	5.6 years

Weighted-average discount rate for operating leases	4.77		%

The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our condensed consolidated balance sheet as of March 31, 2019 (in thousands):



Year ended December 31,
2019 (excluding the three months ended March 31, 2019)	$	7,469
2020	7,845
2021	5,608
2022	4,513
2023	3,950
Thereafter	8,809
Total future lease payments	38,194
Less: imputed interest	(5,139		)
Present value of future lease payments	33,055
Less: current portion of lease liabilities	(9,402		)
Long-term lease liabilities	$	23,653

Under Topic 840, our future minimum payments for all operating lease obligations as of December 31, 2018 were as follows (in thousands):



Year ended December 31,
2019	$	10,646
2020	7,833
2021	5,520
2022	4,528
2023	3,898
Thereafter	8,671
Total	$	41,096