Leases

3 Months Ended

Mar. 31, 2019

14. Leases

The Company has entered into operating leases for its corporate headquarters and other office facilities, financial data terminals and equipment. The Company has no finance leases.

Upon the adoption of ASC 842 on January 1, 2019, the Company recognized a right-of-use asset and lease liability of $

19,827

and $

24,817

, respectively. The right-of-use asset was equal to the lease liability, less accrued lease payments and remaining unamortized lease incentives.

The following table provides additional information regarding the Company’s leases:

	Three Months Ended March 31,
	2019			2018
Lease cost:
Operating lease cost	$	798		$	743
Short-term lease cost		389			284
Total lease cost	$	1,187		$	1,027
Other information:
Cash paid for amounts included in the measurement of operating liabilities (operating leases)	$	881			n/a
Right-of-use assets obtained in exchange for new operating lease liabilities		n/a			n/a
Weighted-average remaining lease term (in years) – operating leases		10.0			n/a
Weighted-average discount rate – operating leases		6.3	%		n/a

None of the Company’s leases include variable payments, residual value guarantees or any restrictions or covenants relating to the Company’s ability to pay dividends or incur additional financing obligations.

The Company’s lease of its headquarters, which expires on August 20, 2029, includes an option to extend for an additional five years. Rent payable under the option is equal to the fair market rent of the premise as determined by the landlord approximately six months prior to the commencement of the extension term. The lease also includes a cancellation option which is effective on August 21, 2024 and requires notice to be provided to the landlord at least 12 months prior. Triggering this option requires a cancellation payment of $4,236. The cancellation and extension options were not reasonably certain of being exercised and were therefore not recognized as part of the right-of-use asset and lease liability.

Other leases also include extension, automatic renewal and termination provisions. These provisions were also not reasonably certain of being exercised and were therefore not recognized as part of the right-of-use asset and lease liability.

The following table discloses future minimum lease payments at March 31, 2019 with respect to the Company’s operating lease liabilities:

Remainder of 2019	$	2,723
2020		3,695
2021		2,958
2022		2,958
2023		2,958
2024 and thereafter		17,641
Total future minimum lease payments (undiscounted)	$	32,933

The following table reconciles the future minimum lease payments (disclosed above) at March 31, 2019 to the operating lease liabilities recognized in the Company’s Consolidated Balance Sheet:

Amounts recognized in the Company’s Consolidated Balance Sheet
Lease liability – short term	$	3,651
Lease liability – long term		20,704
Subtotal		24,355
Difference between undiscounted and discounted cash flows		8,578
Total future minimum lease payments (undiscounted)	$	32,933

The following table discloses the future minimum lease payments at March 31, 2018 (prior period), which is required as the Company elected to apply the new lease requirements at the effective date, rather than the beginning of the earliest comparative period presented:

Remainder of 2018	$	3,072
2019		3,764
2020		3,516
2021		3,146
2022		2,958
2023 and thereafter		20,599
Total future minimum lease payments (undiscounted)	$	37,055

Lease Termination – Japan Office

The Company recognized an impairment expense of $572 in connection with the termination of its Japan office lease.

Letter of Credit

The Company collateralized its U.S. office lease through a standby letter of credit totaling $1,384. The collateral is included in cash and cash equivalents on the Company’s Consolidated Balance Sheets.