Leases

9 Months Ended

Sep. 30, 2019

We have operating leases for our corporate offices, data centers and certain equipment utilized at those properties. We are obligated under a number of noncancelable operating leases for premises and equipment that expire at various dates, through 2030, and in most instances, include options to renew or extend at market rates and terms. Such leases may provide for periodic adjustments of rentals during the term of the lease based on changes in various economic indicators.

At the inception of the lease, the lease is evaluated to determine whether the lease will be accounted for as an operating or a finance lease. There were no significant assumptions or judgments required upon applying the new lease standard. Operating lease ROU assets and operating lease liabilities are included in our consolidated balance sheets. We have no leases that meet the definition of a finance lease under ASC 842 and our lessor accounting treatment for subleases is not material. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Total recorded balances for the lease assets and liabilities are as follows:



(Dollars in thousands)	September 30, 2019
Assets:
Right-of-use assets - operating leases (1)	$	178,532
Liabilities:
Lease liabilities - operating leases (1)	192,543


(1)	Included in these amounts are $22.8 million and $31.4 million of ROU assets and lease liabilities, respectively, attributable to the inclusion of SVB Leerink in our financial results at September 30, 2019.

The components of our lease cost and supplemental cash flow information related to leases for the three and nine months ended September 30, 2019 were as follows:



(Dollars in thousands)	Three months ended September 30, 2019			Nine months ended September 30, 2019
Operating lease cost	$	10,120		$	29,099
Short-term lease cost	370			1,214
Variable lease cost	903			2,683
Less: sublease income	(1,140		)	(3,363		)
Total lease cost, net	$	10,253		$	29,633
Supplemental cash flows information:
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases	$	11,514		$	32,752
Noncash items during the period:
Lease obligations in exchange for obtaining Right-of-use assets
Operating leases	$	7,770		$	7,770

The table below presents additional information related to the Company's leases as of September 30, 2019:



	September 30, 2019
Weighted-average remaining term (in years) - operating leases	6.15
Weighted-average discount rate - operating leases (1)	3.15	%

(1)

The incremental borrowing rate used to calculate the lease liability was determined based on the facts and circumstances of the economic environment and the Company’s credit standing as of the effective date of ASC 842. Additionally, the total lease term and total lease payments were also considered in determining the rate. Based on these considerations the Company identified credit terms available under its existing credit lines which represent a collateralized borrowing rate that has varying credit terms that could be matched to total lease terms and total lease payments in ultimately determining the implied borrowing rate in each lease contract.

The following table presents our undiscounted future cash payments for our operating lease liabilities as of September 30, 2019:



Years ended December 31, (Dollars in thousands)	Operating Leases
2019 (excluding the nine months ended September 30, 2019)	$	10,994
2020	41,197
2021	38,325
2022	32,830
2023	31,033
2024 and thereafter	41,792
Total future lease payments (1)	$	196,171
Less: imputed interest	(3,628		)
Total lease liabilities	$	192,543


(1)	As of September 30, 2019, we have additional leases that have not yet commenced. We estimate that we will record additional lease liabilities of $35.4 million upon commencement. These leases will commence by 2020 with lease terms of one to ten years.

The following table presents minimum future payments under noncancelable operating leases under ASC 840, as of December 31, 2018:



(Dollars in thousands)	Amount
2019	$	38,609
2020	37,575
2021	35,854
2022	31,659
2023	30,904
2024 and thereafter	49,071
Total minimum future payments	$	223,672