Leases

3 Months Ended

Mar. 31, 2020

Leases

Leases

11. Leases

The Company has operating and finance leases for corporate office space and equipment.  Our leases have remaining lease terms of less than one year to six years, some of which include options to extend leases for up to 20 years, and some of which include options to terminate the leases within one year.  Certain leases include variable lease payments in future periods based on a market index or rate.  We determine if an arrangement is a lease at inception (or the effective date of ASU 2016-02, Leases). Operating lease assets and liabilities are included in other non-current assets, other current liabilities, and other non-current liabilities in our consolidated balance sheets.  Finance leases are included in property and equipment, net, other current liabilities, and other non-current liabilities in our consolidated balance sheets.  

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.  ROU assets and liabilities are recognized at the commencement date (or the effective date of ASU 2016-02, Leases) based on the present value of lease payments over the lease term. The Company uses an incremental borrowing rate based on the information available at the commencement date (or the effective date of ASU 2016-02, Leases) in determining the present value of lease payments. The ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which we have elected not to separate.

During January 2020, we signed a fifteen-year lease, which we expect to commence during 2022, relating to the development of a new 260,000 square foot innovative, distinctive and sustainably-designed corporate headquarters building in the heart of downtown Kansas City, Missouri.  The lease will be recognized in the Company’s consolidated financial statements during the period that includes the lease’s commencement date.

The components of lease expense were as follows:

	Three months ended March 31,
	2020		2019
	(in thousands)
Operating Lease Cost	$	3,233	$	5,318
Finance Lease Cost:
Amortization of ROU assets	$	55	$	83
Interest on lease liabilities		9		8
Total	$	64	$	91

Supplemental cash flow information related to leases was as follows:

	Three months ended March 31,
	2020		2019
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,143	$	5,238
Operating cash flows from finance leases		9		8
Financing cash flows from finance leases		58		80
ROU assets obtained in exchange for lease obligations:
Operating leases		7		—
Finance leases		—		40

Supplemental balance sheet information related to leases was as follows:

	March 31, 2020		December 31, 2019
	(in thousands, except lease term and discount rate)
Operating Leases:
Operating lease ROU assets (Other non-current assets)	$	20,478	$	23,457
Other current liabilities	$	9,561	$	10,479
Other non-current liabilities		12,726		14,694
Total operating lease liabilities	$	22,287	$	25,173
Finance Leases:
Property and equipment, gross	$	861	$	985
Accumulated depreciation		(676)		(737)
Property and equipment, net	$	185	$	248
Other current liabilities	$	152	$	203
Other non-current liabilities		36		55
Total finance lease liabilities	$	188	$	258
Weighted average remaining lease term:
Operating leases		4 years		4 years
Finance leases		1 year		1 year
Weighted average discount rate:
Operating leases		4.28%		4.32%
Finance leases		6.00%		6.00%

Maturities of lease liabilities are as follows:

	Operating		Finance
	Leases		Leases
	(in thousands)
Year ended December 31,
2020 (excluding the three months ended March 31, 2020)	$	8,189	140
2021		6,696	43
2022		2,465	6
2023		2,122	—
2024		2,090	—
Thereafter		2,613	—
Total lease payments		24,175	189
Less imputed interest		(1,888)	(1)
Total	$	22,287	188