We have operating leases for office space, automobiles, and various other equipment in the United States and in certain international locations in which we do business. We also have other contracts, such as manufacturing agreements and service agreements, which we reviewed to determine if they contain any embedded leases. We specifically reviewed these other contracts to determine whether we have the right to substantially all of the economic benefit from the use of any specified assets or the right to direct the use of any specified assets, either of which would indicate the existence of a lease.

As of September 30, 2019, our operating leases have remaining lease terms of two months to six years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within three months. For those leases that are reasonably assured to be renewed, we have included the option to extend as part of our right of use asset and lease liability. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense related to these short-term leases was $0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively, and is included in cost of sales, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Income. Lease expense related to variable lease payments that do not depend on an index or rate, such as real estate taxes and insurance reimbursements, was $0.3 million and $0.7 million for the three and nine months ended September 30, 2019. For lease agreements entered into or reassessed after the adoption of Topic 842, we elected to not separate lease and non-lease components. None of our lease agreements contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to operating leases is as follows:

		September 30,		January 1,
(In thousands)	Classification	2019		2019 ⁽¹⁾
Assets
Operating lease asset	Other assets	$	18,529	$	10,322
Total lease assets		$	18,529	$	10,322

Liabilities
Current operating lease liability	Accrued expenses	$	3,063	$	2,948
Non-current operating lease liability	Other non-current liabilities		15,659		7,374
Total lease liability		$	18,722	$	10,322

The components of lease expense included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019 were as follows:

(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Selling, general and administrative expenses	$	352	$	1,050
Research and development expenses		847		1,731
Cost of sales		16		49
Total operating lease expense	$	1,215	$	2,830

As of September 30, 2019, operating lease liabilities included on the Condensed Consolidated Balance Sheet by future maturity were as follows:

(In thousands)	Amount
Remainder of 2019	$	1,044
2020		3,417
2021		3,071
2022		2,672
2023		2,350
Thereafter		8,258
Total lease payments		20,812
Less: Interest		(2,090	)
Present value of lease liabilities	$	18,722

Future operating lease payments include $7.6 million related to options to extend lease terms that are reasonably certain of being exercised. There are no legally binding leases that have not yet commenced.

As of December 31, 2018, future minimum rental payments under non-cancelable operating leases, including renewals determined to be reasonably assured as of December 31, 2018, with original maturities of greater than 12 months, were as follows:

(In thousands)	Amount ⁽¹⁾
2019	$	3,873
2020		3,580
2021		2,771
2022		2,053
2023		1,317
Thereafter		762
Total	$	14,356

Our leases do not provide an implicit borrowing rate and therefore we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We used the incremental borrowing rate on January 1, 2019, for operating leases that commenced on or prior to that date. The incremental borrowing rate was determined on a portfolio basis by grouping leases with similar terms as well as grouping leases based on a U.S. dollar or Euro functional currency. The actual rate is then determined based on a credit spread over LIBOR as well as the Bloomberg Curve Matrix for the U.S. Communications section. The following table provides information about our weighted average lease terms and weighted average discount rates as of September 30, 2019:

	September 30, 2019
Weighted average remaining lease term (years)
Operating leases with USD functional currency		8.4
Operating leases with Euro functional currency		4.6
Weighted average discount rate
Operating leases with USD functional currency		3.22	%
Operating leases with Euro functional currency		1.84	%

	Nine Months Ended
(In thousands)	September 30, 2019
Cash paid for amounts included in the measurement of operating lease assets / liabilities
Cash used in operating activities related to operating leases	$	(775	)

Right-of-use assets obtained in exchange for lease obligations	$	21,418

We are the lessor in sales-type lease arrangements for network equipment, which have initial terms of up to five years. Our sales-type lease arrangements contain either a provision whereby the network equipment reverts back to us upon the expiration of the lease or a provision that allows the lessee to purchase the network equipment at a bargain purchase amount. In addition, our sales-type lease arrangements do not contain any residual value guarantees or material restrictive covenants. The allocation of the consideration between lease and non-lease components is determined by standalone sales price by component. The net investment in sales-type leases consists of lease receivables less unearned income. Collectability of sales-type leases is evaluated periodically at an individual customer level. At September 30, 2019 and December 31, 2018, we had no allowance for credit losses for our net investment in sales-type leases. As of September 30, 2019 and December 31, 2018, the components of the net investment in sales-type leases were as follows:

	September 30,		December 31,
(In thousands)	2019		2018
Current minimum lease payments receivable⁽¹⁾	$	3,643	$	11,339
Non-current minimum lease payments receivable⁽²⁾		1,073		1,670
Total minimum lease payments receivable		4,716		13,009
Less: Current unearned revenue		445		631
Less: Non-current unearned revenue		210		473
Net investment in sales-type leases	$	4,061	$	11,905

The components of sales-type lease gross profit recognized at the lease commencement date and interest and dividend income, included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019, were as follows:

	Three Months Ended		Nine Months Ended
(In thousands)	September 30, 2019		September 30, 2019
Sales - Network Solutions	$	47	$	1,668
Cost of sales - Network Solutions		25		660
Gross profit	$	22	$	1,008

Interest and dividend income	$	92	$	278

As of September 30, 2019, future minimum lease payments to be received from sales-type leases were as follows:

(In thousands)	Amount
Remainder of 2019	$	2,700
2020		1,162
2021		542
2022		225
2023		83
Thereafter		4
Total	$	4,716