Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with original maturities between one to ten years from the execution date. Some of these leases include options to extend for up to 10 years. We have no finance leases and no related party lease agreements as of September 30, 2021. Operating lease costs were approximately $5.3 million and $13.5 million for the three and nine months ended September 30, 2021, respectively, and $2.5 million and $7.6 million for the three and nine months ended September 30, 2020, respectively.

The components of operating lease expense were as follows:

Lease Costs	Financial Statement Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020
Operating lease cost	Selling, general and administrative expenses	$	4,344	$	1,595	$	10,454	$	4,867
Short-term lease cost	Selling, general and administrative expenses	547		453		1,759		1,474
Variable lease cost	Selling, general and administrative expenses	378		458		1,305		1,306
Net lease cost		$	5,269	$	2,506	$	13,518	$	7,647

Right-of-use lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheets as follows:

	September 30, 2021		December 31, 2020
Assets:
Operating lease right-of-use assets	$	40,449	$	18,734
Liabilities:
Operating leases, short-term	10,125		5,904
Operating leases, long-term	37,348		16,279
Total lease liabilities	$	47,473	$	22,183

Supplemental information related to leases is as follows:

Other Information	Nine Months Ended September 30,
	2021			2020
Cash flows:
Cash amounts paid included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	7,856		$	5,665
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	17,633		$	562
Lease term and discount rate:
Weighted average remaining lease term (years)	6			4
Weighted average discount rate	1.91		%	4.00		%

As of September 30, 2021, maturities of lease liabilities were as follows:

Year ending December 31,	Amount
2021 (Remaining 2021)	$	3,408
2022	11,215
2023	8,500
2024	7,211
2025	5,230
Thereafter	14,265
Total lease payments	49,829
Less: Interest	(2,356)
Present value of operating lease liabilities	$	47,473

Rental Income from third parties

We own office buildings in Bangor, Falmouth and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2021 and 2025, and some have options to extend the lease for up to seven years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset.

Rental income from third-party tenants for the three and nine months ended September 30, 2021, totaled $301,000 and $891,000, respectively, and for the three and nine months ended September 30, 2020, totaled $284,000 and $850,000, respectively. Rental income is included in hardware and other revenue in the condensed consolidated statements of income. As of September 30, 2021, future minimum operating rental income based on contractual agreements is as follows:

Year ending December 31,	Amount
2021 (Remaining 2021)	$	358
2022	1,449
2023	1,479
2024	1,510
2025	965
Thereafter	—
Total	$	5,761

As of September 30, 2021, we had no additional significant operating or finance leases that had not yet commenced.

Leases

Leases

We lease office facilities for use in our operations, as well as transportation and other equipment. Most of our leases are non-cancelable operating lease agreements with original maturities between one to ten years from the execution date. Some of these leases include options to extend for up to 10 years. We have no finance leases and no related party lease agreements as of September 30, 2021. Operating lease costs were approximately $5.3 million and $13.5 million for the three and nine months ended September 30, 2021, respectively, and $2.5 million and $7.6 million for the three and nine months ended September 30, 2020, respectively.

The components of operating lease expense were as follows:

Lease Costs	Financial Statement Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020
Operating lease cost	Selling, general and administrative expenses	$	4,344	$	1,595	$	10,454	$	4,867
Short-term lease cost	Selling, general and administrative expenses	547		453		1,759		1,474
Variable lease cost	Selling, general and administrative expenses	378		458		1,305		1,306
Net lease cost		$	5,269	$	2,506	$	13,518	$	7,647

Right-of-use lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheets as follows:

	September 30, 2021		December 31, 2020
Assets:
Operating lease right-of-use assets	$	40,449	$	18,734
Liabilities:
Operating leases, short-term	10,125		5,904
Operating leases, long-term	37,348		16,279
Total lease liabilities	$	47,473	$	22,183

Supplemental information related to leases is as follows:

Other Information	Nine Months Ended September 30,
	2021			2020
Cash flows:
Cash amounts paid included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	7,856		$	5,665
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases	$	17,633		$	562
Lease term and discount rate:
Weighted average remaining lease term (years)	6			4
Weighted average discount rate	1.91		%	4.00		%

As of September 30, 2021, maturities of lease liabilities were as follows:

Year ending December 31,	Amount
2021 (Remaining 2021)	$	3,408
2022	11,215
2023	8,500
2024	7,211
2025	5,230
Thereafter	14,265
Total lease payments	49,829
Less: Interest	(2,356)
Present value of operating lease liabilities	$	47,473

Rental Income from third parties

We own office buildings in Bangor, Falmouth and Yarmouth, Maine; Lubbock and Plano, Texas; Troy, Michigan; Latham, New York; and Moraine, Ohio. We lease space in some of these buildings to third-party tenants. The property we lease to others under operating leases consists primarily of specific facilities where one tenant obtains substantially all of the economic benefit from the asset and has the right to direct the use of the asset. These non-cancelable leases expire between 2021 and 2025, and some have options to extend the lease for up to seven years. We determine if an arrangement is a lease at inception. None of our leases allow the lessee to purchase the leased asset.

Rental income from third-party tenants for the three and nine months ended September 30, 2021, totaled $301,000 and $891,000, respectively, and for the three and nine months ended September 30, 2020, totaled $284,000 and $850,000, respectively. Rental income is included in hardware and other revenue in the condensed consolidated statements of income. As of September 30, 2021, future minimum operating rental income based on contractual agreements is as follows:

Year ending December 31,	Amount
2021 (Remaining 2021)	$	358
2022	1,449
2023	1,479
2024	1,510
2025	965
Thereafter	—
Total	$	5,761

As of September 30, 2021, we had no additional significant operating or finance leases that had not yet commenced.