Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases Leases
We lease certain office facilities and equipment primarily under various operating leases. Our leases have remaining contractual terms up to seven years, some of which include options to extend the leases for up to seven years. Our lease agreements do not contain any material residual value guarantees, material restrictive covenants, or material termination options. Our operating lease costs are primarily related to facility leases for administration offices and research and development facilities, and our finance leases are immaterial.

Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate generally applicable to the location of the lease asset, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.
Variable lease payments are generally expensed as incurred, include certain index-based changes in rent, and exclude certain nonlease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.

The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Operating Lease Assets and Liabilities (in thousands):

June 30, 2019 Balance Sheet Classification
Lease assets $ 10,964  Operating lease right-of-use assets
Current lease liabilities $ (989) Accrued liabilities
Non-current lease liabilities (10,489) Long-term operating lease liabilities
      Total lease liabilities $ (11,478)

During the three months ended June 30, 2019, we entered into several new lease agreements including our San Diego headquarter expansion and a new UK office lease, which resulted an increase in lease assets and liabilities of $6.1 million and $6.0 million, respectively, during the quarter.

Maturity of Operating Lease Liabilities (in thousands):

Maturity Dates June 30, 2019
Remaining six months ending December 31, 2019 $ 785 
2020 1,880 
2021 2,175 
2022 2,214 
2023 1,939 
Thereafter 5,349 
Total lease payments 14,342 
Less imputed interest (2,864)
Present value of lease liabilities $ 11,478 

As of June 30, 2019, our operating leases have a weighted-average remaining lease term of 7 years and a weighted-average discount rate of 6%. Cash paid for amounts included in the measurement of operating lease liabilities was $0.5 million and $1.1 million, for the three and six months ended June 30, 2019, respectively. Operating lease expense was $0.5 million (net of sublease income of $0.3 million) and $1.1 million (net of sublease income of $0.6 million) , for the three and six months ended June 30, 2019, respectively.