Leases Leases (Notes)

6 Months Ended

Jun. 30, 2019

Operating Leases

On January 1, 2019, the Company adopted ASC 842, Leases (“ASC 842”), using the initial date of adoption method (as defined in Note 1 above), whereby the adoption does not impact any periods prior to 2019. The Company recorded an operating ROU asset and an operating lease liability of $20.9 million on its Unaudited Condensed Consolidated Balance Sheets upon adoption. The Company elected to adopt the package of practical expedients and, accordingly, did not reassess any previously expired or existing arrangements and related classification under ASC 840. See Note 1 for further discussion on the Company’s lease accounting policy and the adoption of other practical expedients.

As of June 30, 2019, the Company has additional operating leases, which have not yet commenced, of approximately $25 million. This balance relates primarily to a new ten-year renewable lease for our corporate headquarters expected to commence in 2020.

During the first half of 2019, the Company increased both its operating ROU asset and operating lease liability by $1.1 million as a result of additional leases commencing as well as modifications to existing leases during the first half of the year. Partially offsetting this, the Company’s operating ROU asset and operating lease liability reduced by $2.6 million (which is recorded within our Unaudited Condensed Consolidated Statement of Cash Flows in the change in Other Assets and Other Liabilities) as a result of ROU asset amortization and periodic lease expense. As of June 30, 2019, the Company’s ROU asset and operating lease liability had a balance of $19.4 million on its Unaudited Condensed Consolidated Balance Sheets.

For the three and six months ended June 30, 2019, the Company had the following:



	Three Months Ended		Six Months Ended
(Dollars in thousands)	June 30, 2019		June 30, 2019

Operating lease expense	$	1,547	$	3,092
Variable lease expense	473		878
Short-term lease expense	459		877
Total lease expense	$	2,479	$	4,847


			As of June 30, 2019
Weighted-average remaining lease term			4.2 years
Weighted-average discount rate			5.0		%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2019:



(Dollars in thousands)	June 30, 2019
7/1/2019 - 12/31/2019	$	3,058
2020	5,425
2021	4,644
2022	3,986
2023	2,735
2024	1,480
Thereafter	274
Total lease payments	21,602
Less: Imputed interest	(2,205		)
Total operating lease liability	$	19,397

At December 31, 2018, under ASC 840, Leases (“ASC 840”), the future minimum rental commitments totaled $22.5 million under non-cancelable operating leases with initial terms in excess of one year as follows: 2019 - $5.5 million; 2020 - $4.4 million; 2021 - $4.1 million; 2022 - $3.8 million; 2023 - $2.8 million; and $1.9 million thereafter.