Leases

6 Months Ended

Dec. 31, 2019

Upon adoption of the new lease accounting guidance, the Company recognized operating lease liabilities of approximately $15.2 million based on the present value of the remaining minimum rental payments using an incremental borrowing rate of approximately 4%. The Company also recognized corresponding operating lease ROU assets of approximately $14.8 million. The difference relates to adjustments made to operating lease ROU assets for prepaid rent and deferred rent that existed as of the date of adoption. These operating lease ROU assets relate to offices, warehouses and other premises leased under non-cancelable operating leases expiring through June 2026 and vehicles and certain equipment leased under non-cancelable operating leases expiring through August 2023.

Operating lease expense recognized and supplemental cash flow information related to operating leases for the three and six months ended December 31, 2019 were as follows (in thousands):



	Three Months Ended		Six Months Ended
	December 31, 2019		December 31, 2019
Operating lease expense (including expense for lease agreements with related parties of $362 and $727 for the three and six months ended December 31, 2019, respectively)	$	1,595	$	3,304
Cash payments for operating leases (including payments to related parties of $380 and $737 for the three and six months ended December 31, 2019, respectively)	$	1,570	$	3,415
New operating lease assets obtained in exchange for operating lease liabilities	$	437	$	668

During the three and six months ended December 31, 2019, the Company's costs related to short-term lease arrangements for real estate and non-real estate assets were immaterial. Variable payments expensed in the three months and six months ended December 31, 2019 were $0.4 million and $0.7 million, respectively.

As of December 31, 2019, the weighted average remaining lease term for operating leases was 4.1 years and the weighted average discount rate was 3.9%. Future minimum lease payments under noncancelable operating lease arrangements as of December 31, 2019 were as follows (in thousands):



Fiscal Year:	Minimum lease payments
2020 (remainder)	$	3,373
2021	3,890
2022	2,569
2023	1,186
2024	1,145
2025 and beyond	1,952
Total future lease payments	$	14,115
Less: Imputed interest	(1,095		)
Present value of operating lease liabilities	$	13,020

As of December 31, 2019, commitments under short-term lease arrangements were $0.3 million. As of December 31, 2019, operating and financing leases that have not yet commenced were $0.3 million.

The Company has entered into lease agreements with related parties. See Note 9, "Related Party Transactions," for discussion.