LEASES

We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with terms less than 12 months) are expensed as incurred.

We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component.

We have operating and finance leases primarily for equipment, offices, and vehicles. Our leases have remaining lease terms of 1 year to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense are as follows (in thousands):



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
	(unaudited)		(unaudited)
Operating lease costs	$	7,525	$	15,383
Variable lease costs	1,247		2,927
Finance lease costs:
Amortization of right-of-use assets	20		108
Interest on lease liabilities	92		173
Total lease cost	$	8,884	$	18,591

Other information related to leases are as follows (in thousands):



	Three Months Ended June 30, 2019	Six Months Ended June 30, 2019
	(unaudited)	(unaudited)
Supplemental cash flow information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	6,113	12,185
Operating cash flows from finance leases	85	220
Financing cash flows from finance leases	66	139
Right-of-use assets obtained in exchange for lease obligations
Operating leases	1,313	7,781
Finance leases	290	290

As of June 30, 2019, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands):



Twelve Months Ended December 31,	Operating Leases			Finance Lease
	(unaudited)			(unaudited)
2019 (excluding the six months ended June 30, 2019)	$	11,623		$	292
2020	18,951			585
2021	13,690			589
2022	11,320			593
2023	9,102			543
Thereafter	24,356			5,641
Total future minimum lease payments	89,042			8,243
Less: Interest	(17,783		)	(2,790		)
Present value of lease liabilities	$	71,259		$	5,453

As of December 31, 2018, we disclosed the following undiscounted future gross minimum lease payments for non-cancellable operating and finance leases (in thousands):



Twelve Months Ended December 31,	Operating Leases		Finance Lease
2019	$	23,315	$	583
2020	16,858		500
2021	12,577		504
2022	9,873		524
2023	7,846		525
Thereafter	23,224		5,631
Total minimum lease payments	$	93,693	$	8,267
Less: Interest on finance leases			(2,911		)
Total principal payable on finance leases			$	5,356

Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands):



	June 30, 2019
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	66,500
Current portion of operating lease obligations	17,314
Operating lease obligations (non-current)	53,945

Finance Leases:
Property, plant and equipment, net	$	5,336
Current portion of long-term debt and finance lease obligations	279
Long-term debt and finance lease obligations	5,174

Weighted average remaining lease term
Operating leases	6 years
Finance leases	14 years
Weighted average discount rate
Operating leases	8.4		%
Finance lease	6.3		%

As of June 30, 2019, we have no material additional operating and finance leases that have not yet commenced.