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Leases

3 Months Ended

Mar. 31, 2019

Certain subsidiaries of the Company lease office space and equipment under long-term non-cancelable lease agreements which expire at various dates through 2034. Leases with an initial term of 12 months or less are not recorded on the balance sheet, instead the lease expense is recorded on a straight-line basis over the lease term. For lease agreements entered into, we combine lease and non-lease components. Some leases include options to extend the lease term or terminate the lease prior to the end of the lease term. The exercise of lease renewal options is at the Company's sole discretion, as such, these options are generally not recognized as part of our right-of-use asset or lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The leases generally provide for fixed annual rentals plus certain other costs or credits. Some leases include rental payments based on a percentage of revenue over contractual levels or based on an index or rate. Our lease agreements do not include any material residual value guarantees or material restrictive covenants. We rent or sublease one real estate property to a third party, which constitutes an immaterial portion of our lease portfolio.

The following table summarizes the leases included in the consolidated balance sheets as follows:



(In thousands)	Balance Sheet Location	March 31, 2019
Assets
Operating	Operating lease right-of-use asset	$	174,563
Finance	Property and equipment, net	18,502
Total lease assets		$	193,065
Liabilities
Current:
Operating	Current portion of lease obligations	$	26,633
Finance	Current portion of lease obligations	4,708
		$	31,341
Noncurrent:
Operating	Lease obligations	$	204,336
Finance	Lease obligations	20,348
		224,684

Total lease liabilities		$	256,025

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date. Upon transition to ASC Topic 842, the Company used the incremental borrowing rate on January 1, 2019 for all operating leases that commenced prior to that date.

The following table summarizes the lease costs included in the condensed consolidated statement of income:



(In thousands)	Income Statement Location	March 31, 2019
Operating lease costs	SG&A expenses	$	8,206
Finance lease costs:
Amortization of leased assets	Depreciation and amortization	673
Interest on lease liabilities	Net interest expense	678
Short term lease costs	SG&A expenses	1,590
Variable lease costs	SG&A expenses	308
Total net lease cost		$	11,455

The following table summarizes the maturity of lease liabilities for operating and finance leases:



(In thousands)	Operating Leases		Finance Leases		Total
2019	$	27,419	$	5,627	$	33,046
2020	35,909		5,862		41,771
2021	31,248		4,388		35,636
2022	33,309		4,414		37,723
2023	33,766		4,441		38,207
Thereafter	118,885		9,673		128,558
Total lease payments	280,536		34,405		314,941
Less: Interest	49,568		9,348		58,916
Present value of lease liabilities	$	230,968	$	25,057	$	256,025

The following table summarizes the weighted average remaining lease term and discount rate for operating and finance leases:



	March 31, 2019
Weighted average remaining lease term (years):
Operating leases	8.31
Finance leases	6.08
Weighted average discount rate:
Operating leases	4.75	%
Finance leases	10.21	%

The following table summarizes the supplemental cash paid for amounts in the measurement of lease liabilities:



	March 31, 2019
Operating cash flows from operating leases	$	8,240
Financing cash flows from finance leases	$	1,309

Leases

The following table summarizes the leases included in the consolidated balance sheets as follows:



(In thousands)	Balance Sheet Location	March 31, 2019
Assets
Operating	Operating lease right-of-use asset	$	174,563
Finance	Property and equipment, net	18,502
Total lease assets		$	193,065
Liabilities
Current:
Operating	Current portion of lease obligations	$	26,633
Finance	Current portion of lease obligations	4,708
		$	31,341
Noncurrent:
Operating	Lease obligations	$	204,336
Finance	Lease obligations	20,348
		224,684

Total lease liabilities		$	256,025

The following table summarizes the lease costs included in the condensed consolidated statement of income:



(In thousands)	Income Statement Location	March 31, 2019
Operating lease costs	SG&A expenses	$	8,206
Finance lease costs:
Amortization of leased assets	Depreciation and amortization	673
Interest on lease liabilities	Net interest expense	678
Short term lease costs	SG&A expenses	1,590
Variable lease costs	SG&A expenses	308
Total net lease cost		$	11,455

The following table summarizes the maturity of lease liabilities for operating and finance leases:



(In thousands)	Operating Leases		Finance Leases		Total
2019	$	27,419	$	5,627	$	33,046
2020	35,909		5,862		41,771
2021	31,248		4,388		35,636
2022	33,309		4,414		37,723
2023	33,766		4,441		38,207
Thereafter	118,885		9,673		128,558
Total lease payments	280,536		34,405		314,941
Less: Interest	49,568		9,348		58,916
Present value of lease liabilities	$	230,968	$	25,057	$	256,025

The following table summarizes the weighted average remaining lease term and discount rate for operating and finance leases:



	March 31, 2019
Weighted average remaining lease term (years):
Operating leases	8.31
Finance leases	6.08
Weighted average discount rate:
Operating leases	4.75	%
Finance leases	10.21	%

The following table summarizes the supplemental cash paid for amounts in the measurement of lease liabilities:



	March 31, 2019
Operating cash flows from operating leases	$	8,240
Financing cash flows from finance leases	$	1,309