Leases

9 Months Ended

Sep. 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				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Operating lease cost	$	9,475	$	9,707	$	28,255	$	28,212
Short-term lease cost	218		397		1,007		910
Variable lease cost	663		715		1,818		2,405
Finance lease cost:
Amortization	17		67		94		186
Interest on lease liabilities	4		5		11		12
Total lease cost	$	10,377	$	10,891	$	31,185	$	31,725

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
	September 30,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	19,376	$	28,023
Operating cash flows from finance leases	11		12
Financing cash flows from finance leases	86		182
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	13,711		32,511
Finance leases	60		159

Supplemental balance sheet information related to leases was as follows:

	September 30,			December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	147,959		$	149,578
Current operating lease liability	$	22,485		$	18,294
Non-current operating lease liability	159,200			156,963
Total operating lease liabilities	$	181,685		$	175,257
Finance leases:
Investments in real estate, net (1)	$	73		$	88
Property, plant and equipment, at cost	$	127		$	127
Accumulated amortization	(38)			(19)
Property and equipment, net	$	89		$	108
Current portion of notes payable and long-term debt	$	59		$	86
Notes payable, long-term debt and other obligations, less current portion	110			108
Total finance lease liabilities	$	169		$	194
Weighted average remaining lease term:
Operating leases	8.09			8.46
Finance leases	2.90			3.01
Weighted average discount rate:
Operating leases	9.28		%	10.75		%
Finance leases	7.75		%	8.61		%

(1)     Included in Investments in real estate, net on the condensed consolidated balance sheets are financing lease equipment, at cost of $748 and $762 and accumulated amortization of $675 and $674 as of September 30, 2020 and December 31, 2019, respectively.

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

	Operating Leases		Finance Leases
Period Ending December 31:
Remainder of 2020	$	6,496	$	19
2021	41,353		66
2022	36,892		61
2023	32,417		35
2024	26,749		8
2025	21,797		—
Thereafter	96,556		—
Total lease payments	262,260		189
Less imputed interest	(80,575)		(20)
Total	$	181,685	$	169

As of September 30, 2020, the Company had $23 in undiscounted lease payments relating to an additional operating lease for equipment that has not yet commenced. The operating lease will commence in the fourth quarter of 2020 with a lease term of 3 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.

As a result of the COVID-19 pandemic, the Company received lease concessions from landlords mostly in the form of rent deferrals and a few in the form of rent abatements during the nine months ended September 30, 2020. The Company elected to treat these deferrals and abatements as lease modifications and the existing lease liabilities were remeasured with a corresponding adjustment to the right-of-use asset on the effective date of the modification. The deferrals varied as to the timing of repayment but all agreements required repayment of the deferrals over the remaining lease terms.

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				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Operating lease cost	$	9,475	$	9,707	$	28,255	$	28,212
Short-term lease cost	218		397		1,007		910
Variable lease cost	663		715		1,818		2,405
Finance lease cost:
Amortization	17		67		94		186
Interest on lease liabilities	4		5		11		12
Total lease cost	$	10,377	$	10,891	$	31,185	$	31,725

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
	September 30,
	2020		2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	19,376	$	28,023
Operating cash flows from finance leases	11		12
Financing cash flows from finance leases	86		182
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	13,711		32,511
Finance leases	60		159

Supplemental balance sheet information related to leases was as follows:

	September 30,			December 31,
	2020			2019
Operating leases:
Operating lease right-of-use assets	$	147,959		$	149,578
Current operating lease liability	$	22,485		$	18,294
Non-current operating lease liability	159,200			156,963
Total operating lease liabilities	$	181,685		$	175,257
Finance leases:
Investments in real estate, net (1)	$	73		$	88
Property, plant and equipment, at cost	$	127		$	127
Accumulated amortization	(38)			(19)
Property and equipment, net	$	89		$	108
Current portion of notes payable and long-term debt	$	59		$	86
Notes payable, long-term debt and other obligations, less current portion	110			108
Total finance lease liabilities	$	169		$	194
Weighted average remaining lease term:
Operating leases	8.09			8.46
Finance leases	2.90			3.01
Weighted average discount rate:
Operating leases	9.28		%	10.75		%
Finance leases	7.75		%	8.61		%

(1)     Included in Investments in real estate, net on the condensed consolidated balance sheets are financing lease equipment, at cost of $748 and $762 and accumulated amortization of $675 and $674 as of September 30, 2020 and December 31, 2019, respectively.

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

	Operating Leases		Finance Leases
Period Ending December 31:
Remainder of 2020	$	6,496	$	19
2021	41,353		66
2022	36,892		61
2023	32,417		35
2024	26,749		8
2025	21,797		—
Thereafter	96,556		—
Total lease payments	262,260		189
Less imputed interest	(80,575)		(20)
Total	$	181,685	$	169

As of September 30, 2020, the Company had $23 in undiscounted lease payments relating to an additional operating lease for equipment that has not yet commenced. The operating lease will commence in the fourth quarter of 2020 with a lease term of 3 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.

As a result of the COVID-19 pandemic, the Company received lease concessions from landlords mostly in the form of rent deferrals and a few in the form of rent abatements during the nine months ended September 30, 2020. The Company elected to treat these deferrals and abatements as lease modifications and the existing lease liabilities were remeasured with a corresponding adjustment to the right-of-use asset on the effective date of the modification. The deferrals varied as to the timing of repayment but all agreements required repayment of the deferrals over the remaining lease terms.