Leases Leases (Notes)

9 Months Ended

Sep. 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 September 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 nine months of 2019, the Company reduced both its operating ROU asset and operating lease liability by $1.8 million as a result of $3.9 million of additional ROU asset amortization and periodic lease expense (which is recorded within our Unaudited Condensed Consolidated Statement of Cash Flows in the change in Other Assets and Other Liabilities), offset partially by $2.1 million attributable to additional leases and modifications to existing leases during the first nine months of the year. As of September 30, 2019, the Company’s ROU asset and operating lease liability had a balance of $19.1 million on its Unaudited Condensed Consolidated Balance Sheets.

For the three and nine months ended September 30, 2019, the Company had the following:



	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30, 2019		September 30, 2019

Operating lease expense	$	1,534	$	4,626
Variable lease expense	427		1,305
Short-term lease expense	429		1,306
Total lease expense	$	2,390	$	7,237


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

The following table presents a maturity analysis of our annual undiscounted cash flows reconciled to the carrying value of our operating lease liabilities as of September 30, 2019:



(Dollars in thousands)
10/1/2019 - 12/31/2019	$	1,520
2020	5,457
2021	4,778
2022	4,171
2023	3,170
2024	1,733
Thereafter	387
Total lease payments	21,216
Less: Imputed interest	(2,157		)
Total operating lease liability	$	19,059

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.