LEASES

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

LEASES

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 initial 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, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 14 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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,882	$	7,659	$	21,573	$	23,042
Variable lease costs	1,146		1,774		3,727		4,702
Finance lease costs:
Amortization of right-of-use assets	110		106		328		214
Interest on lease liabilities	80		78		242		251
Total lease cost	$	8,218	$	9,617	$	25,870	$	28,209

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Supplemental cash flow information:	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	4,657	6,025	15,797	18,210
Operating cash flows from finance leases	82	85	247	305
Financing cash flows from finance leases	71	62	205	201
Right-of-use assets obtained in exchange for lease obligations
Operating leases	382	3,411	1,969	11,192
Finance leases	3	—	48	290

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

	September 30, 2020			December 31, 2019
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	62,082		$	67,048
Current portion of operating lease obligations	16,977			17,100
Operating lease obligations (non-current)	50,598			54,436
Weighted average remaining lease term	5.6 years			5.7 years
Weighted average discount rate	6.6		%	8.3		%

	September 30, 2020			December 31, 2019
Finance Leases:	(unaudited)
Property, plant and equipment, net	$	4,873		$	5,156
Current portion of long-term debt and finance lease obligations	323			294
Long-term debt and finance lease obligations	4,884			5,069
Weighted average remaining lease term	12.6 years			13.3 years
Weighted average discount rate	6.2		%	6.3		%

As of September 30, 2020, we have no material additional operating and finance leases that have not yet commenced.

As of September 30, 2020, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands):

	Operating Leases		Finance Lease
	(unaudited)		(unaudited)
2020 (Remainder of the year)	7,308		202
2021	18,238		615
2022	13,217		619
2023	11,392		555
2024	9,241		542
Thereafter	21,501		5,105
Total future minimum lease payments	80,897		7,638
Less: Interest	(13,322)		(2,431)
Present value of lease liabilities	$	67,575	$	5,207

LEASES

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 initial 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, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 14 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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,882	$	7,659	$	21,573	$	23,042
Variable lease costs	1,146		1,774		3,727		4,702
Finance lease costs:
Amortization of right-of-use assets	110		106		328		214
Interest on lease liabilities	80		78		242		251
Total lease cost	$	8,218	$	9,617	$	25,870	$	28,209

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Supplemental cash flow information:	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	4,657	6,025	15,797	18,210
Operating cash flows from finance leases	82	85	247	305
Financing cash flows from finance leases	71	62	205	201
Right-of-use assets obtained in exchange for lease obligations
Operating leases	382	3,411	1,969	11,192
Finance leases	3	—	48	290

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

	September 30, 2020			December 31, 2019
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	62,082		$	67,048
Current portion of operating lease obligations	16,977			17,100
Operating lease obligations (non-current)	50,598			54,436
Weighted average remaining lease term	5.6 years			5.7 years
Weighted average discount rate	6.6		%	8.3		%

	September 30, 2020			December 31, 2019
Finance Leases:	(unaudited)
Property, plant and equipment, net	$	4,873		$	5,156
Current portion of long-term debt and finance lease obligations	323			294
Long-term debt and finance lease obligations	4,884			5,069
Weighted average remaining lease term	12.6 years			13.3 years
Weighted average discount rate	6.2		%	6.3		%

As of September 30, 2020, we have no material additional operating and finance leases that have not yet commenced.

As of September 30, 2020, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands):

	Operating Leases		Finance Lease
	(unaudited)		(unaudited)
2020 (Remainder of the year)	7,308		202
2021	18,238		615
2022	13,217		619
2023	11,392		555
2024	9,241		542
Thereafter	21,501		5,105
Total future minimum lease payments	80,897		7,638
Less: Interest	(13,322)		(2,431)
Present value of lease liabilities	$	67,575	$	5,207