(8) Leases

The Company has various cancelable and noncancelable leased assets within our three operating segments, including Control Devices, Electronics and PST, which include certain properties, vehicles and equipment of which are all classified as operating leases. Payments for these leases are generally fixed; however, several of our leases are composed of variable lease payments including index-based payments or inflation-based payments based on a Consumer Price Index (“CPI”) or other escalators. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Under Leases (Topic 842), the Company determines an arrangement is a lease when we have the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Other than the leases that we have already identified, we are not aware of any material leases that have not yet commenced. For leases that have a calculated lease term of 12 months or less and do not include an option to purchase the underlying asset which we are reasonably certain to exercise, the Company has made the policy election to not apply the recognition requirements in Leases (Topic 842). For these short-term leases, the Company recognizes the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

For the leases identified, ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company used the calculated incremental borrowing rate based on the information available at the implementation date, and going forward at the commencement date, in determining the present value of lease payments. The Company will use the implicit rate when readily determinable. The ROU asset includes the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. The Company’s lease terms may include options to extend or terminate the lease and such options are included in the lease term when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease expenses are recognized within COGS, SG&A and design and development (“D&D”) costs in the condensed consolidated statements of operations. The Company has made the policy election to account for lease and non-lease components as a single lease component for all of its leases.

As a result of the Company’s election to apply the modified retrospective transition method at the effective date of the standard, information prior to January 1, 2019 has not been restated and continues to be reported under the accounting standards in effect for the period (ASC Topic 840).

The components of lease expense are as follows:


Three months ended		March 31, 2019
Operating lease cost	$	1,463
Short-term lease cost		159
Variable lease cost		96
Total lease cost	$	1,718

Balance Sheet information related to leases is as follows:


		As of March 31, 2019
Assets:
Operating lease right-of-use assets	$	19,226

Liabilities:
Operating lease current liability, included in other current liabilities		4,463
Operating lease long-term liability		14,858
Total leased liabilities	$	19,321

Maturities of operating lease liabilities are as follows:


		As of March 31, 2019
Year ending December 31,
2019 (1)	$	3,898
2020		4,559
2021		3,939
2022		3,085
2023		3,104
Thereafter		4,178
Total future minimum lease payments	$	22,763
Less: imputed interest		(3,442)
Total lease liabilities	$	19,321

(1) For the remaining nine months

Weighted-average remaining lease term and discount rate is as follows:


	As of March 31, 2019
Weighted-average remaining lease term (in years)
Operating leases	5.38
Weighted-average discount rate
Operating leases	5.98	%

Other information:


Three months ended		March 31, 2019
Operating cash flows:
Cash paid related to operating lease obligations	$	1,533
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations	$	159