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LEASES

12 Months Ended

Dec. 31, 2020

(15)LEASES

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. The Company determines its incremental borrowing rate based on its estimated credit risk with adjustments for each individual leases’ geographical risk and lease term. Operating lease assets also include prepaid rent and 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. Lease 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 years ended December 31, 2020 and 2019 are as follows (in thousands):


	Location in Statements of	Year Ended December 31,
Description	Comprehensive Income (Loss)	2020		2019
Amortization of ROU assets - finance leases	Depreciation and amortization	$	7,661		7157
Interest on lease liabilities - finance leases	Interest expense		203	$	141
Operating lease cost (cost resulting from lease payments)	Cost of services		46,375		47,269
Operating lease cost (cost resulting from lease payments)	Selling, general and administrative		2,040		3,731
Operating lease cost (cost resulting from lease payments)	Restructuring		1,232		—
Operating lease cost	Impairment		5,127		—
Operating lease cost (cost resulting from lease payments)	Other income (expense), net		1,149		968
Short-term lease cost	Cost of services		3,888		4,338
Variable lease cost (cost excluded from lease payments	Cost of services		(287)		—
Less: Sublease income	Selling, general and administrative		(836)		(445)
Less: Sublease income	Other income (expense), net		(2,464)		(1,984)
Total lease cost		$	64,088	$	61,175

Other supplementary information for the years ended December 31, 2020 and 2019 are as follows (dollar values in thousands):


	Year Ended December 31,
	2020		2019
Finance lease - operating cash flows	$	68	$	103
Finance lease - financing cash flows	$	7,911	$	10,251
Operating lease - operating cash flows (fixed payments)	$	55,862	$	51,898
New ROU assets - operating leases	$	6,834	$	15,494
Modified ROU assets - operating leases	$	6,485	$	46,543
New ROU assets - finance leases	$	2,292	$	6,133


	December 31, 2020		December 31, 2019
Weighted average remaining lease term - finance leases		2.46 years	2.91 years
Weighted average remaining lease term - operating leases		3.73 years	4.27 years
Weighted average discount rate - finance leases		1.64%	1.43%
Weighted average discount rate - operating leases		6.95%	7.22%

Operating and financing lease right-of-use assets and lease liabilities within our Consolidated Balance Sheet as of December 31, 2020 and 2019 are as follows (in thousands):


Description	Location in Balance Sheet	December 31, 2020		December 31, 2019
Assets
Operating lease assets	Operating lease assets	$	120,820	$	150,808
Finance lease assets	Property, plant and equipment, net		12,659		18,016
Total leased assets		$	133,479	$	168,824

Liabilities
Current
Operating	Current operating lease liabilities	$	43,651	$	45,218
Finance	Other current liabilities		6,193		7,470
Non-current
Operating	Non-current operating lease liabilities		98,277		127,395
Finance	Other long-term liabilities		4,763		8,896
Total lease liabilities		$	152,884	$	188,979

The future minimum operating lease and finance lease payments required under non-cancelable leases as of December 31, 2020 and 2019 are as follows (in thousands):

December 31, 2020


	Operating		Sub-lease		Finance
	Leases		Income		Leases
Year 1	$	51,120	$	(3,500)	$	6,237
Year 2		46,913		(3,489)		2,740
Year 3		31,085		(3,123)		1,631
Year 4		17,338		(2,905)		579
Year 5		8,288		(2,940)		—
Thereafter		8,397		(490)		—
Total minimum lease payments	$	163,141	$	(16,447)	$	11,187
Less imputed interest		(21,213)				(231)
Total lease liability	$	141,928			$	10,956

December 31, 2019


	Operating		Sub-lease		Finance
	Leases		Income		Leases
Year 1	$	54,903	$	(2,976)	$	7,594
Year 2		47,892		(621)		5,587
Year 3		43,590		(345)		2,139
Year 4		28,124		(201)		1,109
Year 5		14,494		—		331
Thereafter		14,734		—		—
Total minimum lease payments	$	203,737	$	(4,143)	$	16,760
Less imputed interest		(31,124)				(394)
Total lease liability	$	172,613			$	16,366

In 2008, the Company sub-leased one of its customer engagement centers to a third party for the remaining term of the lease. The sub-lease began on January 1, 2009 and rental income is recognized on a straight-line basis over the term of the sub-lease through 2026. In 2017, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on November 6, 2017 and ends May 31, 2021. In 2019, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on March 1, 2019 and ends July 21, 2023. In 2020, the Company sub-leased one of its office spaces for the remaining term of the original lease. The sub-lease began on February 6, 2020 and ends on June 14, 2023.