LEASES AND RELATED PARTY LEASES

The Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements. The Company has no finance leases as of March 31, 2019. Many of our leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, we have elected the practical expedient to group lease and non-lease components.

Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at our sole discretion, therefore, the majority of renewals to extend the lease terms are not included in our ROU assets and lease liabilities as they are not reasonably certain of exercise. We regularly evaluate the renewal options and when they are reasonably certain of exercise, we include the renewal period in our lease term.

As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the three months ended March 31, 2019 and March 31, 2018, was $4.4 million and $3.4 million respectively, which includes $0.1 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases at March 31, 2019 were as follows:



	March 31, 2019
	(In thousands, except lease term and discount rate)
ROU assets	$	64,999

Current lease liabilities	$	12,619
Non-current lease liabilities	61,711
Total lease liabilities	$	74,330

Weighted average remaining lease term (in years):
Leased facilities	9.9
Leased vehicles	3.4

Weighted average discount rate:
Leased facilities	5.7		%
Leased vehicles	3.2		%

ROU assets were included in other assets at March 31, 2019. Current lease liabilities were included in accrued expenses and other current liabilities and non-current lease liabilities were included in other liabilities at March 31, 2019.

Supplemental cash flow information related to leases was as follows for the three months ended March 31, 2019 (in thousands):



	March 31, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,408

ROU assets obtained in exchange for lease liabilities:
Operating leases	2,004

Future minimum lease payments under operating leases at March 31, 2019 were as follows:



	Related Parties		Third Parties		Total
	(In thousands)
2019	$	222	$	11,641	$	11,863
2020	296		12,409		12,705
2021	296		11,532		11,828
2022	296		9,154		9,450
2023	296		7,282		7,578
Thereafter	1,724		40,893		42,617
Total minimum lease payments	$	3,130	$	92,911	$	96,041
Less: Imputed interest					21,711
Total lease liabilities					74,330
Less: Current lease liabilities					12,619
Long-term lease liabilities					61,711

During 2018, the Company entered into a lease for a new corporate headquarters in Princeton, NJ which is expected to commence during the second quarter of 2019. Total payments over the lease term are approximately $67.0 million. The payments are not included in the table above as the lease has yet to commence.

Future minimum lease payments under operating leases at December 31, 2018 were as follows:



	Related Parties		Third Parties		Total
	(In thousands)
2019	$	296	$	16,472	$	16,768
2020	296		13,510		13,806
2021	296		12,197		12,493
2022	296		12,937		13,233
2023	296		10,707		11,003
Thereafter	1,724		100,675		102,399
Total minimum lease payments	$	3,204	$	166,498	$	169,702

Total operating lease expense for the year ended December 31, 2018 was $16.3 million and included $0.3 million, in related party lease expense. Future lease expense for the new corporate headquarters in Princeton, NJ is included in the table above, however, has not yet commenced.

There were no future minimum lease payments under capital leases at December 31, 2018.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50% owned by a corporation whose shareholders are trusts, whose beneficiaries include family members of the Company’s principal stockholder and former director. The term of the current lease agreement is through October 31, 2032 at an annual rate of approximately $0.3 million per year. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2032 through October 31, 2037 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2037 through October 31, 2042 at the fair market rental rate of the premises.