Leases

3 Months Ended

Mar. 31, 2021

Leases

Leases

10. 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 five 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 was expected to commence during 2022, relating to the development of a new 260,000 square foot corporate headquarters building in 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 impact that our proposed merger with Macquarie will have on our new corporate headquarters lease, including eligibility for state and local tax savings, has not been determined.

The components of lease expense were as follows:

	For the three months ended March 31,
	2021		2020
	(in thousands)
Operating Lease Cost	$	1,478	$	3,233
Finance Lease Cost:
Amortization of ROU assets	$	14	$	55
Interest on lease liabilities		1		9
Total	$	15	$	64

Supplemental cash flow information related to leases was as follows:

	For the three months ended March 31,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,792	$	3,143
Operating cash flows from finance leases		1		9
Financing cash flows from finance leases		19		58
ROU assets obtained in exchange for lease obligations:
Operating leases		—		7
Finance leases		—		—

Supplemental balance sheet information related to leases was as follows:

	March 31, 2021		December 31, 2020
	(in thousands, except lease term and discount rate)
Operating Leases:
Operating lease ROU assets (Other non-current assets)	$	12,124	$	13,461
Other current liabilities	$	5,394	$	6,247
Other non-current liabilities		7,765		8,812
Total operating lease liabilities	$	13,159	$	15,059
Finance Leases:
Property and equipment, gross	$	181	$	333
Accumulated depreciation		(144)		(277)
Property and equipment, net	$	37	$	56
Other current liabilities	$	25	$	41
Other non-current liabilities		8		11
Total finance lease liabilities	$	33	$	52
Weighted average remaining lease term:
Operating leases		4 years		4 years
Finance leases		1 year		1 year
Weighted average discount rate:
Operating leases		4.11%		4.08%
Finance leases		6.00%		6.00%

Maturities of lease liabilities are as follows:

	Operating		Finance
	Leases		Leases
	(in thousands)
Year ended December 31,
2021 (excluding the three months ended March 31, 2021)	$	4,834	22
2022		2,424	12
2023		2,090	—
2024		2,090	—
Thereafter		2,613	—
Total lease payments		14,051	34
Less imputed interest		(892)	(1)
Total	$	13,159	33