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.

Some of our leases include future rent escalations that are based on the Consumer Price Index (CPI) or other similar indices. These future rent escalations are not included in the calculation of the ROU asset and lease liability because they be cannot be forecasted at the lease inception date. These are considered variable lease payments 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 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 material finance leases.

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



	Year Ended December 31, 2019
Operating lease cost	$	9,148
Short-term lease cost	1,695
Total lease costs	$	10,843

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



	Year Ended December 31, 2019
Operating lease right-of-use assets	$	27,251

Current portion of operating lease liabilities	$	7,871
Non-current portion of operating lease liabilities	22,159
Total operating lease liabilities	$	30,030

Cash paid for amounts included in the measurement of operating lease liabilities	$	10,137

Right-of-use assets obtained in exchange for operating lease liabilities	$	4,353

Weighted-average remaining lease term for operating leases (years)	5.5 years

Weighted-average discount rate for operating leases	4.7		%

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



Year ended December 31,

2020	$	8,411
2021	6,583
2022	5,120
2023	4,276
2024	3,992
Thereafter	6,060
Total future lease payments	34,442
Less: imputed interest	(4,412		)
Present value of future lease payments	30,030
Less: current portion of lease liabilities	(7,871		)
Long-term lease liabilities	$	22,159

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

Rent expense was approximately $10.9 million and $11.0 million for the years ended December, 31, 2018 and 2017, respectively.