LEASES

9 Months Ended

Sep. 30, 2019

(4)

LEASES

We have operating leases primarily for office space, temporary residences, automobiles and office equipment. Contracts containing assets that we benefit from and control are recognized on our balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. We combine the lease and non-lease components for all of our lease agreements.

Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to ten years. The exercise of lease renewal options is at our sole discretion, and lease renewal options are not included in our lease terms if they are not reasonably certain to be exercised. Our lease agreements do not contain any residual value guarantees or restrictive covenants or options to purchase the leased property.

Leases (In thousands)	Classification	September 30, 2019
Assets:
Operating	Other assets	$	4,400
Liabilities:
Current
Operating	Other current liabilities		698
Noncurrent
Operating	Other liabilities		4,135
Total lease liabilities		$	4,833

Maturity of lease liabilities (In thousands)	Operating leases
2019	$	496
2020		1,202
2021		1,165
2022		975
2023		729
After 2023		1,140
Total lease payments	$	5,707
Less: Interest		874
Present value of lease liabilities	$	4,833

As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We used the incremental borrowing rate on January 1, 2019 for operating leases that began prior to that date.

		Three Months Ended		Nine Months Ended
Lease costs (In thousands)	Classification	September 30, 2019		September 30, 2018
Operating lease costs	General and administrative	$	589		1,779
Short-term leases	General and administrative		469		1,552
Variable lease costs	General and administrative		407		1,011
Sublease income	General and administrative		—		(3	)
Net lease cost		$	1,465		4,339

Our variable lease payments consist primarily of shared operating costs recognized over the term of the lease.

Lease term and discount rate	September 30, 2019
Weighted average remaining lease term in years		4.0

Weighted average discount rate		7.0	%

The cash paid for operating leases included in operating cash flows and in the measurement of lease liabilities for the three and nine months ended September 30, 2019 was $0.3 million and $0.8 million, respectively. Right-of-use assets obtained in exchange for operating lease obligations were $0.0 million and $0.5 million, for the three and nine months ended September 30, 2019, respectively.

Future minimum rental commitments as of December 31, 2018 are as follows:

	Minimum
Year ending (In thousands)	rental commitments
2019	$	3,511
2020		2,804
2021		2,501
2022		2,455
2023		1,734
After 2023		2,495
Total lease payments	$	15,500