(11)LEASES

The Company adopted ASU 842, Leases, as of January 1, 2019 using the effective date as the date of initial application. As a result, prior year financials were not recast under the new standard and therefore, those amounts are not presented below.

Operating leases are included in our Consolidated Balance Sheet as Operating lease assets, Current operating lease liabilities and Non-current operating lease liabilities. Finance leases are included in Property, plant and equipment, Other current liabilities and Other long-term liabilities in our Consolidated Balance Sheet. The Company primarily leases real estate and equipment under various arrangements that provide the Company the right of use for the underlying asset that require lease payments over the lease term. The Company determines the value of each lease by computing the present value of each lease payment using the interest rate implicit in the lease, if available; otherwise the Company estimates its incremental borrowing rate over the lease term. Operating lease assets also include prepaid rent, initial direct costs less any tenant improvements.

The Company’s real estate portfolio typically includes one or more options to renew, with renewal terms that generally can extend the lease term from one to 10 years. The exercise of these lease renewal options is at the Company’s discretion and is included in the lease term only if the Company is reasonably certain to exercise. The Company also has service arrangements whereby it controls specific space provided by a third-party service provider. These arrangements meet the definition of a lease and are accounted for under ASC 842. Rent expense for operating leases is recognized on a straight-line basis over the lease term and is included in the Consolidated Statements of Comprehensive Income (Loss). The Company’s lease agreements do not contain any material residual value guarantees or restrictive guarantees.

The components of lease expense for the three and nine months ended September 30, 2019 are as follows (in thousands):


	Location in Statements of	Three Months Ended
Description	Comprehensive Income (Loss)	September 30, 2019
Amortization of ROU assets - finance leases	Depreciation and amortization	$	1,855
Interest on lease liabilities - finance leases	Interest expense		43
Operating lease cost (cost resulting from lease payments)	Cost of services		10,910
Operating lease cost (cost resulting from lease payments)	Selling, general and administrative		551
Operating lease cost (cost resulting from lease payments)	Other income (expense), net		242
Short-term lease cost	Cost of services		1,107
Less: Sublease income	Selling, general and administrative		(126)
Less: Sublease income	Other income (expense), net		(496)
Total lease cost		$	14,086


	Location in Statements of	Nine Months Ended
Description	Comprehensive Income (Loss)	September 30, 2019
Amortization of ROU assets - finance leases	Depreciation and amortization	$	5,260
Interest on lease liabilities - finance leases	Interest expense		83
Operating lease cost (cost resulting from lease payments)	Cost of services		34,256
Operating lease cost (cost resulting from lease payments)	Selling, general and administrative		3,181
Operating lease cost (cost resulting from lease payments)	Other income (expense), net		726
Short-term lease cost	Cost of services		3,419
Less: Sublease income	Selling, general and administrative		(319)
Less: Sublease income	Other income (expense), net		(1,488)
Total lease cost		$	45,118

Other supplementary information for the three and nine months ended September 30, 2019 are as follows (dollar values in thousands):


	Three Months Ended
	September 30, 2019
Finance lease - operating cash flows	$	43
Finance lease - financing cash flows	$	2,111
Operating lease - operating cash flows (fixed payments)	$	12,185
New ROU assets - operating leases	$	1,301
Modified ROU assets - operating leases	$	18,807
New ROU assets - finance leases	$	1,886


	Nine Months Ended
	September 30, 2019
Finance lease - operating cash flows	$	83
Finance lease - financing cash flows	$	8,096
Operating lease - operating cash flows (fixed payments)	$	38,260
New ROU assets - operating leases	$	8,358
Modified ROU assets - operating leases	$	42,008
New ROU assets - finance leases	$	6,133


	September 30, 2019
Weighted average remaining lease term - finance leases		3.11 yrs
Weighted average remaining lease term - operating leases		4.46 yrs
Weighted average discount rate - finance leases		1.38%
Weighted average discount rate - operating leases		7.51%

Operating and financing lease right-of-use assets and lease liabilities within our Consolidated Balance Sheet as of September 30, 2019 and January 1, 2019 (date of adoption of ASU 842) are as follows (in thousands):


				January 1, 2019
Description	Location in Balance Sheet	September 30, 2019		(date of adoption)
Assets
Operating lease assets	Operating lease assets	$	146,092	$	129,894
Finance lease assets	Property, plant and equipment, net		19,903		18,261
Total leased assets		$	165,995	$	148,155

Liabilities
Current
Operating	Current operating lease liabilities	$	41,512	$	35,535
Finance	Other current liabilities		7,917		8,770
Non-current
Operating	Non-current operating lease liabilities		125,998		112,754
Finance	Other long-term liabilities		10,533		10,765
Total lease liabilities		$	185,960	$	167,824

The future minimum operating lease and finance lease payments required under non-cancelable leases as of September 30, 2019 are as follows (in thousands):


	Operating		Sub-lease		Finance
	Leases		Income		Leases
Year 1	$	51,718	$	(2,974)	$	7,931
Year 2		46,111		(1,278)		6,153
Year 3		40,010		(345)		2,952
Year 4		30,766		(288)		1,305
Year 5		14,853		—		491
Thereafter		17,464		—		—
Total minimum lease payments	$	200,922	$	(4,885)	$	18,832
Less imputed interest		(33,412)				(382)
Total lease liability	$	167,510			$	18,450

The future minimum rental and capital lease payments under non-cancelable leases as of December 31, 2018 are as follows (in thousands):


	Operating		Sub-lease		Capital
	Leases		Income		Leases
Year 1	$	47,379	$	(2,624)	$	8,770
Year 2		36,045		(2,631)		5,548
Year 3		30,678		(276)		3,798
Year 4		26,584		—		1,005
Year 5		17,226		—		414
Thereafter		25,362		—		—
Total minimum lease payments	$	183,274	$	(5,531)	$	19,535
Less imputed interest						—
Total lease liability					$	19,535