Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This accounting guidance is intended to improve financial reporting about leasing transactions. The ASU requires organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with former GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike the legacy guidance, which requires only financing leases to be recognized on the balance sheet, the new ASU requires both types of leases (i.e., operating and financing) to be recognized on the balance sheet. The financing lease will be accounted for in substantially the same manner as capital leases were accounted for under the previous guidance. For operating leases, there is now the recognition of a lease liability and a lease asset for all such leases greater than one year in term.

The Company adopted Topic 842 effective January 1, 2019, using a modified retrospective method and did not restate comparative periods. The Company elected to adopt the package of practical expedients; accordingly, the Company retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. The Company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2031, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. As of December 31, 2021, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases		Financing Leases		Total
	(In thousands)
2022	$	3,583	$	207	$	3,790
2023	3,180		158		3,338
2024	1,833		133		1,966
2025	1,228		19		1,247
2026	460		—		460
Thereafter	1,079		—		1,079
Total	11,363		517		11,880
Less: present value discount*	(1,051)		(38)		(1,089)
Present value of lease liabilities	10,312		479		10,791
Less: current portion of lease liabilities	(3,173)		(185)		(3,358)
Total long-term lease liabilities	$	7,139	$	294	$	7,433
* The discount rate used was the relevant incremental borrowing rate in each of the jurisdictions wherein the leased properties are located

The company's net assets recorded under operating and finance leases were $10 million as of December 31, 2021. The lease cost recognized in our consolidated statements of income in the category of general and administrative, is summarized as follows:

	Year Ended December 31,
(In thousands)	2021		2020
Operating Lease Cost	$	4,860	$	7,051
Finance Lease Cost:
Amortization of Lease Assets	194		161
Interest on Lease liabilities	35		39
Finance Lease Cost	229		200
Sublease Income	(118)		(476)
Total Net Lease Cost	$	4,971	$	6,775

Other information about lease amounts recognized in our consolidated statement of income is summarized as follows:

	December 31, 2021
Weighted Average Lease Term - Operating Leases	4.24 years
Weighted Average Lease Term - Finance Leases	2.79 years
Weighted Average Discount Rate - Operating Leases	7.00	%
Weighted Average Discount Rate - Finance Leases	6.39	%

Commitments for minimum rentals under non-cancellable leases, under the legacy guidance in ASC 840 as of December 31, 2021 were as follows:

Year	Operating Leases		Financing Leases
	(In thousands)
2022	$	3,583	$	207
2023	3,180		158
2024	1,833		133
2025	1,228		19
2026	460		—
Thereafter	1,079		—
Total	$	11,363	$	517
Less: sublease income	(118)
Net lease payments	$	11,245
Less: amount representing interest			35
Present value of obligations under financing leases			$	552
Less: current portion			(185)
Long-term obligations			$	367

As of December 31, 2021, our lease liability of $10.8 million does not include certain arrangements, which are primarily airport leases that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $34.4 million as follows:

Year	Commitments
	(In thousands)
2022	$	17,406
2023	16,996
Thereafter	—
Total	$	34,402

    Finance leases range from three to five years and are primarily for office equipment. Rental expense for office and airport facilities and certain equipment subject to operating leases for the period ended December 31, 2021 and 2020 was $10.5 million and $14.0 million, respectively. The year over year decline in this rent expense is a result of COVID-19, in which airport leases were subject to force majeure provisions and the cessation of the Company's airport operations. These monthly rent payments have been temporarily waived until the Company restarts airport operations. It remains uncertain when and under what conditions each payment abatement will end.

Leases

Leases

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This accounting guidance is intended to improve financial reporting about leasing transactions. The ASU requires organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with former GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike the legacy guidance, which requires only financing leases to be recognized on the balance sheet, the new ASU requires both types of leases (i.e., operating and financing) to be recognized on the balance sheet. The financing lease will be accounted for in substantially the same manner as capital leases were accounted for under the previous guidance. For operating leases, there is now the recognition of a lease liability and a lease asset for all such leases greater than one year in term.

The Company adopted Topic 842 effective January 1, 2019, using a modified retrospective method and did not restate comparative periods. The Company elected to adopt the package of practical expedients; accordingly, the Company retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. The Company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2031, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. As of December 31, 2021, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases		Financing Leases		Total
	(In thousands)
2022	$	3,583	$	207	$	3,790
2023	3,180		158		3,338
2024	1,833		133		1,966
2025	1,228		19		1,247
2026	460		—		460
Thereafter	1,079		—		1,079
Total	11,363		517		11,880
Less: present value discount*	(1,051)		(38)		(1,089)
Present value of lease liabilities	10,312		479		10,791
Less: current portion of lease liabilities	(3,173)		(185)		(3,358)
Total long-term lease liabilities	$	7,139	$	294	$	7,433
* The discount rate used was the relevant incremental borrowing rate in each of the jurisdictions wherein the leased properties are located

The company's net assets recorded under operating and finance leases were $10 million as of December 31, 2021. The lease cost recognized in our consolidated statements of income in the category of general and administrative, is summarized as follows:

	Year Ended December 31,
(In thousands)	2021		2020
Operating Lease Cost	$	4,860	$	7,051
Finance Lease Cost:
Amortization of Lease Assets	194		161
Interest on Lease liabilities	35		39
Finance Lease Cost	229		200
Sublease Income	(118)		(476)
Total Net Lease Cost	$	4,971	$	6,775

Other information about lease amounts recognized in our consolidated statement of income is summarized as follows:

	December 31, 2021
Weighted Average Lease Term - Operating Leases	4.24 years
Weighted Average Lease Term - Finance Leases	2.79 years
Weighted Average Discount Rate - Operating Leases	7.00	%
Weighted Average Discount Rate - Finance Leases	6.39	%

Commitments for minimum rentals under non-cancellable leases, under the legacy guidance in ASC 840 as of December 31, 2021 were as follows:

Year	Operating Leases		Financing Leases
	(In thousands)
2022	$	3,583	$	207
2023	3,180		158
2024	1,833		133
2025	1,228		19
2026	460		—
Thereafter	1,079		—
Total	$	11,363	$	517
Less: sublease income	(118)
Net lease payments	$	11,245
Less: amount representing interest			35
Present value of obligations under financing leases			$	552
Less: current portion			(185)
Long-term obligations			$	367

As of December 31, 2021, our lease liability of $10.8 million does not include certain arrangements, which are primarily airport leases that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $34.4 million as follows:

Year	Commitments
	(In thousands)
2022	$	17,406
2023	16,996
Thereafter	—
Total	$	34,402

    Finance leases range from three to five years and are primarily for office equipment. Rental expense for office and airport facilities and certain equipment subject to operating leases for the period ended December 31, 2021 and 2020 was $10.5 million and $14.0 million, respectively. The year over year decline in this rent expense is a result of COVID-19, in which airport leases were subject to force majeure provisions and the cessation of the Company's airport operations. These monthly rent payments have been temporarily waived until the Company restarts airport operations. It remains uncertain when and under what conditions each payment abatement will end.