Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

LEASES

Leases

The Company has operating and finance leases for corporate and sales offices, and certain vehicles and equipment. The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	9,356	$	9,630	$	18,780	$	18,505
Short-term lease cost	389		279		790		513
Variable lease cost	588		898		1,155		1,690
Finance lease cost:
Amortization	39		63		77		119
Interest on lease liabilities	4		4		7		7
Total lease cost	$	10,376	$	10,874	$	20,809	$	20,834

Supplemental cash flow information related to leases was as follows:

	Six Months Ended
	June 30,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	11,953	$	18,440
Operating cash flows from finance leases	7		7
Financing cash flows from finance leases	69		113
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,076		13,061
Finance leases	60		123

Supplemental balance sheet information related to leases was as follows:

	June 30,			December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	148,662		$	149,578
Current operating lease liability	$	18,268		$	18,294
Non-current operating lease liability	159,296			156,963
Total operating lease liabilities	$	177,564		$	175,257
Finance leases:
Investments in real estate, net (1)	$	84		$	88
Property, plant and equipment, at cost	$	127		$	127
Accumulated amortization	(32		)	(19		)
Property and equipment, net	$	95		$	108
Current portion of notes payable and long-term debt	$	61		$	86
Notes payable, long-term debt and other obligations, less current portion	124			108
Total finance lease liabilities	$	185		$	194
Weighted average remaining lease term:
Operating leases	8.35			8.46
Finance leases	3.10			3.01
Weighted average discount rate:
Operating leases	9.48		%	10.75		%
Finance leases	7.68		%	8.61		%

⁽¹⁾   Included in Investments in real estate, net on the condensed consolidated balance sheets are financing lease equipment, at cost of $822 and $762 and accumulated amortization of $738 and $674 as of June 30, 2020 and December 31, 2019, respectively.

As of June 30, 2020, maturities of lease liabilities were as follows:

	Operating Leases			Finance  Leases
Period Ending December 31:
Remainder of 2020	$	15,374		$	39
2021	38,992			66
2022	34,772			61
2023	31,516			35
2024	25,902			8
2025	20,980			—
Thereafter	96,668			—
Total lease payments	264,204			209
Less imputed interest	(86,640		)	(24		)
Total	$	177,564		$	185

As of June 30, 2020, the Company had $870 in undiscounted lease payments relating to additional operating leases for office space and equipment that have not yet commenced. The operating leases will commence in the third and fourth quarter of 2020 with lease terms ranging from 1.5 years to 5 years.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, lessors may provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Topic 842 addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance does not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic and restrictions intended to prevent its spread.

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

The Company entered into rent deferral concession agreements during the three months ended June 30, 2020, with approximately half of its existing landlords. The agreements varied on the timing of repayment but all agreements required repayment of the deferrals over the remaining lease terms. The Company elected to treat these deferrals agreements as lease modifications and the existing lease liabilities were remeasured with a corresponding adjustment to the ROU asset on the effective date of the modification.

The Lease Modification Q&A’s future impact to the Company’s condensed consolidated financial statements is dependent upon the extent of any lease concessions granted to the Company or its subsidiaries as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering into such concessions.

Leases

LEASES

Leases

The Company has operating and finance leases for corporate and sales offices, and certain vehicles and equipment. The components of lease expense were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	9,356	$	9,630	$	18,780	$	18,505
Short-term lease cost	389		279		790		513
Variable lease cost	588		898		1,155		1,690
Finance lease cost:
Amortization	39		63		77		119
Interest on lease liabilities	4		4		7		7
Total lease cost	$	10,376	$	10,874	$	20,809	$	20,834

Supplemental cash flow information related to leases was as follows:

	Six Months Ended
	June 30,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	11,953	$	18,440
Operating cash flows from finance leases	7		7
Financing cash flows from finance leases	69		113
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,076		13,061
Finance leases	60		123

Supplemental balance sheet information related to leases was as follows:

	June 30,			December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	148,662		$	149,578
Current operating lease liability	$	18,268		$	18,294
Non-current operating lease liability	159,296			156,963
Total operating lease liabilities	$	177,564		$	175,257
Finance leases:
Investments in real estate, net (1)	$	84		$	88
Property, plant and equipment, at cost	$	127		$	127
Accumulated amortization	(32		)	(19		)
Property and equipment, net	$	95		$	108
Current portion of notes payable and long-term debt	$	61		$	86
Notes payable, long-term debt and other obligations, less current portion	124			108
Total finance lease liabilities	$	185		$	194
Weighted average remaining lease term:
Operating leases	8.35			8.46
Finance leases	3.10			3.01
Weighted average discount rate:
Operating leases	9.48		%	10.75		%
Finance leases	7.68		%	8.61		%

⁽¹⁾   Included in Investments in real estate, net on the condensed consolidated balance sheets are financing lease equipment, at cost of $822 and $762 and accumulated amortization of $738 and $674 as of June 30, 2020 and December 31, 2019, respectively.

As of June 30, 2020, maturities of lease liabilities were as follows:

	Operating Leases			Finance  Leases
Period Ending December 31:
Remainder of 2020	$	15,374		$	39
2021	38,992			66
2022	34,772			61
2023	31,516			35
2024	25,902			8
2025	20,980			—
Thereafter	96,668			—
Total lease payments	264,204			209
Less imputed interest	(86,640		)	(24		)
Total	$	177,564		$	185

As of June 30, 2020, the Company had $870 in undiscounted lease payments relating to additional operating leases for office space and equipment that have not yet commenced. The operating leases will commence in the third and fourth quarter of 2020 with lease terms ranging from 1.5 years to 5 years.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, lessors may provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Topic 842 addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance does not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic and restrictions intended to prevent its spread.

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

The Company entered into rent deferral concession agreements during the three months ended June 30, 2020, with approximately half of its existing landlords. The agreements varied on the timing of repayment but all agreements required repayment of the deferrals over the remaining lease terms. The Company elected to treat these deferrals agreements as lease modifications and the existing lease liabilities were remeasured with a corresponding adjustment to the ROU asset on the effective date of the modification.

The Lease Modification Q&A’s future impact to the Company’s condensed consolidated financial statements is dependent upon the extent of any lease concessions granted to the Company or its subsidiaries as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering into such concessions.