NOTE 8 – LEASES

On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Required disclosures have been made on a modified retrospective basis in accordance with the guidance of the standard. See Note 1, Organization and Summary of Significant Accounting Policies under the heading Significant accounting policies.

We have operating leases for administrative offices and R&D facilities, and certain finance leases for equipment. Our operating leases have remaining terms of less than one year to ten years, and our finance leases have remaining terms of less than one year to two years. Leases with an initial term of 12 months or less will not be recorded on the balance sheet as operating leases or finance leases, and we will recognize lease expense for these leases on a straight-line basis over the lease term. For leases commencing in 2019 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes, and insurance costs) with non-lease components (e.g. common area maintenance costs). Certain leases include options to renew, with renewal terms that can extend the lease term from one to five years. The exercise of lease renewal options for our existing leases is at our sole discretion and not included in the measurement of lease liability and ROU asset as they are not reasonably certain to be exercised. Certain finance leases also include options to purchase the leased equipment. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our leases do not contain any residual value guarantees or material restrictive covenants.

As a result of applying the modified retrospective method to adopt the lease guidance, the following adjustments were made to accounts on the Condensed Consolidated Balance Sheet as of January 1, 2019 (in thousands):

In January 2019, we entered into a lease agreement for an additional 57,000 square feet of administrative office and R&D space in Austin, Texas. The lease commenced March 2019 and is set expire in August 2028 and does not contain an option to renew. The tables below include the impact of this newly entered lease. Upon the commencement of the lease, we recorded an operating lease right-of-use asset and a lease liability of $7.2 million and $7.2 million, respectively.

As of March 31, 2019 we do not have any operating and finance leases that have not yet commenced.

The components of lease expense for the three months ended March 31, 2019, were as follows (in thousands):

The following table summarizes the balance sheets classification of our leases as of March 31, 2019 (in thousands):

The following table represents information about our leases as of March 31, 2019:

Maturities of lease liabilities for the period were as follows (in thousands):

Supplemental cash flow information for the three months ended March 31, 2019 were as follows (in thousands):