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LEASES | 6 Months Ended
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Jun. 30, 2019
LEASES |
2. | LEASES
Adoption of New Lease Standard We adopted the New Lease Standard on January 1, 2019 using the additional transition method described in Note 1 to these condensed consolidated unaudited financial statements. Results for reporting periods beginning on and after January 1, 2019 are presented under the New Lease Standard. Prior periods have not been restated. The New Lease Standard had a material impact on our consolidated balance sheet due to the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Practical Expedients We elected the package of practical expedients which did not require us to reassess (1) whether existing contracts contain embedded leases, (2) the lease classification of existing leases, and (3) whether initial direct costs for existing leases would qualify for capitalization under the New Lease Standard. We also elected the practical expedients related to short-term leases and separating lease components from non-lease components for all underlying asset classes. Operating and Finance Leases We have operating leases for real property, vehicles and equipment, and finance leases primarily for vehicles. Operating leases are included in operating lease right-of-use assets, current portion of long-term obligations, and operating lease liabilities in our consolidated balance sheet. Finance leases are not considered significant to our consolidated balance sheet or consolidated statement of income. Finance lease ROU assets at June 30, 2019 of $2,759 are included in property and equipment, net in our condensed consolidated unaudited balance sheet. Finance lease liabilities at June 30, 2019 of $2,852 are included in current portion of long-term obligations and other long-term obligations, net of current portion in our condensed consolidated unaudited balance sheet. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement dates of the respective leases in determining the present value of the applicable lease payments. Operating lease ROU assets also include any lease pre-payments made and exclude lease incentives. Certain of our leases include variable payments, which are excluded from lease ROU assets and lease liabilities, and are expensed as incurred. Our leases have remaining lease terms of 1-9 years, some of which include options to extend the leases for up to five years. The exercise of lease renewal options is at our sole discretion, and our lease ROU assets and liabilities reflect only the options we are reasonably certain that we will exercise. Certain real property lease agreements have lease and non-lease components, which are generally accounted for as a single lease component. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease payments for short-term leases, which are 12 months or less without a purchase option that is likely to be exercised, are recognized as lease cost on a straight-line basis over the lease term. The components of operating lease expense were as follows:
|  | Quarter ended June 30, 2019 |  |  | Six months ended June 30, 2019 |
Lease cost |  | $ | 17,984 |  |  | $ | 35,760 |
Short-term lease cost |  |  | 2,433 |  |  |  | 4,609 |
Variable lease cost |  |  | 109 |  |  |  | 315 |
Sublease income |  |  | (32 | ) |  |  | (81 | )
Total operating lease cost |  | $ | 20,494 |  |  | $ | 40,603 |
Supplemental balance sheet information related to operating leases were as follows:
June 30, |  | 2019 |
ROU assets |  | $ | 190,530 |
Current portion of long-term obligations |  | $ | 59,644 |
Operating lease liabilities |  |  | 129,636 |
Total operating lease liabilities |  | $ | 189,280 |
Weighted Average Remaining Lease Term (in years) |  |  | 3.7 years |
Weighted Average Discount Rate |  |  | 4.53 | %
Supplemental cash flow information related to operating leases were as follows:
Six Months Ended June 30, |  | 2019 |
Operating cash flows for the measurement of operating lease liabilities |  | $ | 35,544 |
Operating lease right-of-use assets obtained in exchange for operating lease obligations |  | $ | 222,332 |
At June 30, 2019, maturities of operating lease liabilities over each of the next five years and thereafter were as follows:
Remainder of 2019 |  | $ | 35,321 |
2020 |  |  | 60,667 |
2021 |  |  | 47,995 |
2022 |  |  | 33,232 |
2023 |  |  | 19,039 |
Thereafter |  |  | 9,921 |
Total lease payments |  |  | 206,175 |
Less imputed interest |  |  | 16,895 |
Total lease liability |  | $ | 189,280 |
At June 30, 2019, we had additional operating leases, primarily for real property, that had not yet commenced. Such leases had estimated future minimum rental commitments of approximately $17,000. These operating leases are expected to commence in 2019 with lease terms of 5-11 years. These undiscounted amounts are not included in the table above. Prior to the adoption of the New Lease Standard, rental commitments on an undiscounted basis were approximately $219,300 at December 31, 2018 under non-cancelable operating leases and were payable as follows: $70,400 in 2019, $55,100 in 2020, $41,300 in 2021, $28,500 in 2022, $15,700 in 2023, and $8,300 thereafter.

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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