Leases

6 Months Ended

Jun. 30, 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 June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Lease cost:
Operating lease cost	$	795		$	857	$	1,590		$	1,600
Short-term lease cost		383			432		772			716

Total lease cost	$	1,178		$	1,289	$	2,362		$	2,316

Other information:
Cash paid for amounts included in the measurement of operating liabilities (operating leases)	$	875			n/a	$	1,760			n/a

Right-of-use assets obtained in exchange for new operating lease liabilities		n/a			n/a		n/a			n/a

Weighted-average remaining lease term (in years) – operating leases		9.8			n/a		9.8			n/a

Weighted-average discount rate – operating leases		6.3	%		n/a		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 June 30, 2019 with respect to the Company’s operating lease liabilities:


Remainder of 2019	$	1,832
2020		3,676
2021		2,958
2022		2,958
2023		2,958
2024 and thereafter		17,641

Total future minimum lease payments (undiscounted)	$	32,023

The following table reconciles the future minimum lease payments (disclosed above) at June 30, 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	$	3,632
Lease liability – long term		20,190

Subtotal		23,822
Difference between undiscounted and discounted cash flows		8,201

Total future minimum lease payments (undiscounted)	$	32,023

The following table discloses the future minimum lease payments at June 30, 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	$	1,948
2019		3,764
2020		3,516
2021		3,146
2022		2,958
2023 and thereafter		20,599

Total future minimum lease payments (undiscounted)	$	35,931

Lease Termination – Japan Office

During the six months ended June 30, 2019, 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.