| Leases |
We have an operating lease
for our corporate offices in Canada and finance leases for furniture and equipment. Our leases have remaining lease terms of seven
months to forty-one months, and our primary operating leases include options to extend the leases for four years. Future renewal
options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease
liabilities.
We report operating leased
assets, as well as operating lease current and noncurrent obligations on our balance sheets for the right to use the building in
our business. Our finance leases represent furniture and office equipment; we report the furniture and equipment, as well as finance
lease current and noncurrent obligations on our balance sheet.
Generally, interest rates
are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit
in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the
most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate.
The components of lease expense were as follows:
| |
Three Months Ended March 31, 2020 |
Three Months Ended March 31, 2019 |
| Operating lease cost |
$9,707 |
$5,653 |
| |
|
|
| Finance lease cost: |
|
|
| Amortization of leased assets |
$2,428 |
$2,583 |
| Interest on lease liabilities |
281 |
501 |
| Total finance lease cost |
$2,709 |
$3,084 |
Supplemental cash flow information related to
leases was as follows:
| |
Three Months Ended March 31, 2020 |
Three Months Ended March 31, 2019 |
| Cash paid for amounts included in leases: |
|
|
| Operating cash flows from operating leases |
$9,880 |
$5,477 |
| Operating cash flows from finance leases |
$281 |
$501 |
| Financing cash flows from finance leases |
$2,316 |
$2,121 |
| |
|
|
| Right-of-use assets obtained in exchange for lease obligations: |
|
|
| Operating leases |
$- |
$- |
| Finance leases |
$- |
$- |
Supplemental balance sheet information related
to leases was as follows:
| |
March 31, 2020 |
December 31, 2019 |
| Operating leases: |
|
|
| Operating lease right-of-use assets |
$104,369 |
$121,440 |
| Current portion of operating lease obligations |
$28,249 |
$30,255 |
| Operating lease obligations, net of current portion |
78,194 |
93,642 |
| Total operating lease liabilities |
$106,443 |
$123,897 |
| |
|
|
| Finance leases: |
|
|
| Property and equipment, at cost |
$48,555 |
$53,183 |
| Accumulated depreciation |
(36,416 |
) (37,227) |
| Property and equipment, net |
$12,139 |
$15,956 |
| |
|
|
| Current portion of finance lease obligations |
$8,159 |
$9,951 |
| Finance lease obligations, net of current portion |
1,290 |
2,797 |
| Total finance lease liabilities |
$9,449 |
$12,748 |
| |
Three Months Ended March 31, 2020 |
December 31, 2019 |
| Weighted Average Remaining Lease Term |
|
|
| Operating lease |
3.4 years |
3.6 years |
| Finance leases |
0.9 years |
1.3 years |
| |
|
|
| Weighted Average Discount Rate |
|
|
| Operating lease |
9.0% |
9.0% |
| Finance leases |
9.7% |
9.7% |
Upon adoption of the new lease standard, discount rates used for
existing leases were established at January 1, 2019.
A summary of future minimum payments under non-cancellable
operating lease commitment as of March 31, 2020 is as follows:
|
Years ending December 31, |
Total |
| 2020 (remaining months) |
$27,526 |
| 2021 |
36,702 |
| 2022 |
36,702 |
| 2023 |
23,974 |
| Total lease liabilities |
$124,904 |
| Less amount representing interest |
(18,461) |
| Total |
106,443 |
| Less current portion |
(28,249) |
| |
$78,194 |
The following is a schedule of minimum future
rentals on the non-cancelable finance leases as of March 31, 2020:
|
Year ending December 31, |
Total |
| 2020 (remaining months) |
$7,791 |
| 2021 |
2,777 |
| Total minimum payments required: |
10,568 |
| Less amount representing interest: |
(1,119) |
| Present value of net minimum lease payments: |
9,449 |
| Less current portion |
(8,159) |
| |
$1,290 |
|