Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

Note 5 – Leases

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842 “Leases” using the optional transition method. Under this method of adoption, the prior period comparative information in the consolidated financial statements has not been revised and continues to be reported under the previously applicable lease accounting guidance. Additionally, we elected the package of practical expedients permitted under the transition guidance, which included the carry-forward of historical lease classification.

The Company primarily leases office buildings under operating leases which are included in Operating lease right-of-use (“ROU”) assets, Current operating lease liabilities, and Long-term operating lease liabilities on the condensed consolidated balance sheets. The Company’s leases have remaining terms of 1 to 7 years and often include one or more options to renew. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring liabilities. Leases with initial terms of 12 months or less are considered short-term lease costs and are not recorded as ROU assets on the condensed consolidated balance sheets. The Company has elected the practical expedient not to separate non-lease components from lease components for all classes of assets. Our lease agreements contain $3.7 million of residual value guarantees and generally do not contain material variable lease payments or restrictive covenants.

Information related to the Company's total lease costs were as follows (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30, 2019

 

 

September 30, 2019

 

Operating lease cost

$

2,438

 

 

$

6,040

 

Variable lease cost

 

500

 

 

 

750

 

Short-term lease cost

 

198

 

 

 

442

 

Total lease cost

$

3,136

 

 

$

7,232

 

 

Information related to the Company's ROU assets and related lease liabilities were as follows (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2019

 

 

Cash paid for operating lease liabilities

$

1,916

 

 

$

5,561

 

 

Right-of-use assets obtained in exchange for new operating lease obligations (1)

 

513

 

 

 

29,028

 

 

 

 

 

 

 

 

 

 

 

(1) Nine-months ended balance includes $25.8 million for operating leases existing on January 1, 2019 and $3.2 million for operating leases that commenced in the first nine months of 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2019

 

 

Weighted-average remaining lease term

 

 

 

 

4.0 years

 

 

Weighted-average discount rate

 

 

 

 

4.4

 

%

 

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancellable operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed consolidated balance sheets as of September 30, 2019 (in thousands):

 

October 1, 2019 through December 31, 2019

$

1,910

 

2020

 

7,227

 

2021

 

6,606

 

2022

 

5,089

 

2023

 

3,720

 

Thereafter

 

2,116

 

Total undiscounted future minimum lease payments

 

26,668

 

Less: Difference between undiscounted lease payments and discounted operating lease liabilities

 

2,314

 

Total operating lease liabilities

$

24,354

 

Current operating lease liabilities

$

6,448

 

Long-term operating lease liabilities

 

17,906

 

Total operating lease liabilities

$

24,354

 

 

As previously disclosed in our 2018 Annual Report on Form 10-K, under the previous lease accounting standard, future minimum lease payments for operating leases having initial or remaining noncancellable lease terms in excess of one year would have been as follows (in thousands):

 

Year Ending

 

 

 

December 31,

 

 

 

2019

$

7,135

 

2020

 

6,198

 

2021

 

5,673

 

2022

 

4,125

 

2023

 

2,642

 

Thereafter

 

1,474

 

 

$

27,247