Leases Leases

3 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

10.    Leases

Operating Lease and Finance Obligations

The Company has operating leases for certain facilities, equipment and autos. The existing operating leases expire at various dates through 2024, some of which include options to extend the leases for up to 5 years. The Company measured the lease liability at the present value of the lease payments to be made over the lease term. The lease payments are discounted using the Company's incremental borrowing rate. The Company measured the right-of-use assets ("ROU") assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts. The ROU assets are amortized on a straight-line basis over the lease term.

Finance Lease Obligations

The Company has finance leases for data centers and certain office equipment, which was recorded in fixed assets as capital lease obligations. These finance lease obligations are included in current liabilities and other long-term liabilities in the accompanying consolidated balance sheets. The interest rates for these two capital leases are 2.89% and 3.50%, respectively, and the two leases will mature in May 2021 and July 2021, respectively.

The following table provides a summary of leases included on the condensed consolidated balance sheets September 30, 2020, 2019 and December 31, 2019, condensed consolidated statements of earnings, and condensed consolidated statements of cash flows as of the three months and nine months ended September 30, 2020 and 2019:

	Condensed Consolidated Balance Sheets Line Item	September 30,				December 31,
(in thousands)		2020		2019		2019
Operating leases
Assets
Operating leases	Operating lease right-of-use assets	$	41,453	$	34,463	$	35,436
Liabilities
Operating - current	Accrued expenses and other current liabilities	$	8,443	$	7,037	$	7,392
Operating - noncurrent	Operating lease liabilities	33,354		27,256		27,930
Total operating lease liabilities		$	41,797	$	34,293	$	35,322
Finance leases
Assets
Property and equipment, gross	Property, plant and equipment, net	$	3,569	$	3,569	$	3,569
Accumulated amortization	Property, plant and equipment, net	(3,036)		(2,578)		(2,739)
Property and equipment, net	Property, plant and equipment, net	$	533	$	991	$	830
Liabilities
Other current liabilities	Accrued expenses and other current liabilities	$	771	$	1,116	$	1,125
Other long-term liabilities	Deferred income tax and other long-term liabilities	—		764		386
Total finance lease liabilities		$	771	$	1,880	$	1,511

The components of lease expense were as follows:

	Condensed Consolidated Statements of Operations Line Item	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2020		2019		2020		2019
Operating lease cost	General administrative expenses and cost of sales	$	2,736	$	2,379	$	7,708	$	6,784
Finance lease cost:
Amortization of right-of-use assets	General administrative expenses	$	218	$	218	$	654	$	654
Interest on lease liabilities	Interest expense, net	7		16		28		54
Total finance lease		$	225	$	234	$	682	$	708

Other information

Supplemental cash flow information related to leases as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	2,611	$	2,324	$	7,395	$	6,604
Finance cash flows for finance leases	290		290		870		870
Operating right-of-use assets obtained in exchange for lease obligations during the current period	7,155		1,616		14,312		3,704

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2020:

(in thousands)	Finance Leases		Operating Leases
Remaining three months of 2020	$	290	$	2,632
2021	489		10,147
2022	—		7,933
2023	—		5,867
2024	—		4,834
Thereafter	—		18,926
Total lease payments	779		50,339
Less: Present value discount	(8)		(8,542)
Total lease liabilities	$	771	$	41,797

The following table summarizes the Company's lease terms and discount rates as of September 30, 2020 and 2019:

Weighted-average remaining lease terms (in years):	2020		2019
Operating leases	7.03		6.72
Finance leases	0.71		1.68
Weighted-average discount rate:
Operating leases	5.30	%	5.37	%
Finance leases	3.27	%	3.23	%

Leases

Leases

Operating Lease and Finance Obligations

The Company has operating leases for certain facilities, equipment and autos. The existing operating leases expire at various dates through 2024, some of which include options to extend the leases for up to 5 years. The Company measured the lease liability at the present value of the lease payments to be made over the lease term. The lease payments are discounted using the Company's incremental borrowing rate. The Company measured the right-of-use assets ("ROU") assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts. The ROU assets are amortized on a straight-line basis over the lease term.

Finance Lease Obligations

The Company has finance leases for data centers and certain office equipment, which was recorded in fixed assets as capital lease obligations. These finance lease obligations are included in current liabilities and other long-term liabilities in the accompanying consolidated balance sheets. The interest rates for these two capital leases are 2.89% and 3.50%, respectively, and the two leases will mature in May 2021 and July 2021, respectively.

The following table provides a summary of leases included on the condensed consolidated balance sheets September 30, 2020, 2019 and December 31, 2019, condensed consolidated statements of earnings, and condensed consolidated statements of cash flows as of the three months and nine months ended September 30, 2020 and 2019:

	Condensed Consolidated Balance Sheets Line Item	September 30,				December 31,
(in thousands)		2020		2019		2019
Operating leases
Assets
Operating leases	Operating lease right-of-use assets	$	41,453	$	34,463	$	35,436
Liabilities
Operating - current	Accrued expenses and other current liabilities	$	8,443	$	7,037	$	7,392
Operating - noncurrent	Operating lease liabilities	33,354		27,256		27,930
Total operating lease liabilities		$	41,797	$	34,293	$	35,322
Finance leases
Assets
Property and equipment, gross	Property, plant and equipment, net	$	3,569	$	3,569	$	3,569
Accumulated amortization	Property, plant and equipment, net	(3,036)		(2,578)		(2,739)
Property and equipment, net	Property, plant and equipment, net	$	533	$	991	$	830
Liabilities
Other current liabilities	Accrued expenses and other current liabilities	$	771	$	1,116	$	1,125
Other long-term liabilities	Deferred income tax and other long-term liabilities	—		764		386
Total finance lease liabilities		$	771	$	1,880	$	1,511

The components of lease expense were as follows:

	Condensed Consolidated Statements of Operations Line Item	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)		2020		2019		2020		2019
Operating lease cost	General administrative expenses and cost of sales	$	2,736	$	2,379	$	7,708	$	6,784
Finance lease cost:
Amortization of right-of-use assets	General administrative expenses	$	218	$	218	$	654	$	654
Interest on lease liabilities	Interest expense, net	7		16		28		54
Total finance lease		$	225	$	234	$	682	$	708

Other information

Supplemental cash flow information related to leases as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	2,611	$	2,324	$	7,395	$	6,604
Finance cash flows for finance leases	290		290		870		870
Operating right-of-use assets obtained in exchange for lease obligations during the current period	7,155		1,616		14,312		3,704

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2020:

(in thousands)	Finance Leases		Operating Leases
Remaining three months of 2020	$	290	$	2,632
2021	489		10,147
2022	—		7,933
2023	—		5,867
2024	—		4,834
Thereafter	—		18,926
Total lease payments	779		50,339
Less: Present value discount	(8)		(8,542)
Total lease liabilities	$	771	$	41,797

The following table summarizes the Company's lease terms and discount rates as of September 30, 2020 and 2019:

Weighted-average remaining lease terms (in years):	2020		2019
Operating leases	7.03		6.72
Finance leases	0.71		1.68
Weighted-average discount rate:
Operating leases	5.30	%	5.37	%
Finance leases	3.27	%	3.23	%