Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

8. LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of June 30, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	187	$	—	$	—	$	187	$	375	$	—	$	—	$	375
Interest on lease liabilities		74		—		—		74		150		—		—		150
Operating lease costs		—		436		549		985		—		875		1,091		1,966
Variable lease costs		—		41		23		64		—		82		68		150
Total lease costs	$	261	$	477	$	572	$	1,310	$	525	$	957	$	1,159	$	2,641

Other information related to leases as of and for the six months ended June 30, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	150
Operating cash flows used for operating leases	$	1,186
Financing cash flows used for finance leases	$	312
Weighted average remaining lease term-finance leases (months)		105
Weighted average remaining lease term-operating leases (months)		346
Weighted average discount rate-finance leases		4.41	%
Weighted average discount rate-operating leases		6.63	%

Future payments against lease liabilities as of June 30, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
July 1 to December 31, 2019	$	463		$	1,479		$	1,942
2020		925			2,003			2,928
2021		925			1,928			2,853
2022		925			1,646			2,571
2023		925			1,606			2,531
Thereafter		3,923			48,437			52,360
Total undiscounted lease payments		8,086			57,099			65,185
Less imputed interest		(1,386	)		(33,394	)		(34,780	)
Total lease liabilities	$	6,700		$	23,705		$	30,405

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

(in thousands of dollars)	Finance leases		Operating leases		Total
Year ending December 31,
2019	$	925	$	3,007	$	3,932
2020		925		1,845		2,770
2021		925		1,856		2,781
2022		925		1,673		2,598
2023		925		1,593		2,518
Thereafter		3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of June 30, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available.

(in thousands of dollars)
July 1 to December 31, 2019	$	110,415
2020		207,929
2021		191,280
2022		171,463
2023		151,535
Thereafter		513,061
	$	1,345,683

Leases

8. LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of June 30, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	187	$	—	$	—	$	187	$	375	$	—	$	—	$	375
Interest on lease liabilities		74		—		—		74		150		—		—		150
Operating lease costs		—		436		549		985		—		875		1,091		1,966
Variable lease costs		—		41		23		64		—		82		68		150
Total lease costs	$	261	$	477	$	572	$	1,310	$	525	$	957	$	1,159	$	2,641

Other information related to leases as of and for the six months ended June 30, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	150
Operating cash flows used for operating leases	$	1,186
Financing cash flows used for finance leases	$	312
Weighted average remaining lease term-finance leases (months)		105
Weighted average remaining lease term-operating leases (months)		346
Weighted average discount rate-finance leases		4.41	%
Weighted average discount rate-operating leases		6.63	%

Future payments against lease liabilities as of June 30, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
July 1 to December 31, 2019	$	463		$	1,479		$	1,942
2020		925			2,003			2,928
2021		925			1,928			2,853
2022		925			1,646			2,571
2023		925			1,606			2,531
Thereafter		3,923			48,437			52,360
Total undiscounted lease payments		8,086			57,099			65,185
Less imputed interest		(1,386	)		(33,394	)		(34,780	)
Total lease liabilities	$	6,700		$	23,705		$	30,405

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

(in thousands of dollars)	Finance leases		Operating leases		Total
Year ending December 31,
2019	$	925	$	3,007	$	3,932
2020		925		1,845		2,770
2021		925		1,856		2,781
2022		925		1,673		2,598
2023		925		1,593		2,518
Thereafter		3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of June 30, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available.

(in thousands of dollars)
July 1 to December 31, 2019	$	110,415
2020		207,929
2021		191,280
2022		171,463
2023		151,535
Thereafter		513,061
	$	1,345,683

Leases

8. LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as vehicle, solar panel and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of June 30, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total		Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	187	$	—	$	—	$	187	$	375	$	—	$	—	$	375
Interest on lease liabilities		74		—		—		74		150		—		—		150
Operating lease costs		—		436		549		985		—		875		1,091		1,966
Variable lease costs		—		41		23		64		—		82		68		150
Total lease costs	$	261	$	477	$	572	$	1,310	$	525	$	957	$	1,159	$	2,641

Other information related to leases as of and for the six months ended June 30, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows used for finance leases	$	150
Operating cash flows used for operating leases	$	1,186
Financing cash flows used for finance leases	$	312
Weighted average remaining lease term-finance leases (months)		105
Weighted average remaining lease term-operating leases (months)		346
Weighted average discount rate-finance leases		4.41	%
Weighted average discount rate-operating leases		6.63	%

Future payments against lease liabilities as of June 30, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
July 1 to December 31, 2019	$	463		$	1,479		$	1,942
2020		925			2,003			2,928
2021		925			1,928			2,853
2022		925			1,646			2,571
2023		925			1,606			2,531
Thereafter		3,923			48,437			52,360
Total undiscounted lease payments		8,086			57,099			65,185
Less imputed interest		(1,386	)		(33,394	)		(34,780	)
Total lease liabilities	$	6,700		$	23,705		$	30,405

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

(in thousands of dollars)	Finance leases		Operating leases		Total
Year ending December 31,
2019	$	925	$	3,007	$	3,932
2020		925		1,845		2,770
2021		925		1,856		2,781
2022		925		1,673		2,598
2023		925		1,593		2,518
Thereafter		3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of June 30, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or, in the case of percentage rents, when the sales data is made available.

(in thousands of dollars)
July 1 to December 31, 2019	$	110,415
2020		207,929
2021		191,280
2022		171,463
2023		151,535
Thereafter		513,061
	$	1,345,683