Leases (Tables)

3 Months Ended

Mar. 31, 2019

The expenses and income generated by the leasing activity of Lawson as lessee for the three months ending March 31, 2019 are as follows (Dollars in thousands):



Lease Type	Classification	Amount

Consolidated Operating Lease Expense ⁽¹⁾	Operating expenses	$	1,024

Consolidated Financing Lease Amortization	Operating expenses	48
Consolidated Financing Lease Interest	Interest expense	6
Consolidated Financing Lease Expense		54

Sublease Income ⁽²⁾	Operating expenses	(80		)
Net Lease Cost		$	998

⁽¹⁾ Includes short term lease expense, which is immaterial

⁽²⁾ Sublease income from sublease of a portion of the Company headquarters

Value of Net Assets and Liabilities of Leasing Activities

The value of the net assets and liabilities generated by the leasing activity of Lawson as lessee as of March 31, 2019 are as follows (Dollars in thousands):



Lease Type	Amount

Total ROU operating lease assets ⁽¹⁾	$	11,742
Total ROU financing lease assets ⁽²⁾	520
Total lease assets	$	12,262

Total current operating lease obligation	$	3,890
Total current financing lease obligation	200
Total current lease obligations	$	4,090

Total long term operating lease obligation	$	10,917
Total long term financing lease obligation	321
Total long term lease obligation	$	11,238

The adoption of ASC 842 resulted in the removal of property, plant and equipment of $4.5 million and capital lease obligations and deferred rent of $6.4 million. Additionally, the Company included in its balance sheet as of March 31, 2019 ROU assets of $12.3 million and lease obligations of $15.3 million. On a pro-forma basis, as if the previously accounting was in effect, the Company's total assets, liabilities and shareholders equity as of March 31, 2019 would have been $193.2 million, $88.4 million and $104.7 million, respectively.

⁽¹⁾ Operating lease assets are recorded net of accumulated amortization of $0.8 million as of March 31, 2019

⁽²⁾ Financing lease assets are recorded net of accumulated amortization less than $0.1 million as of March 31, 2019

Value of Lease Liabilities Generated by Leasing Activities

The value of the lease liabilities generated by the leasing activities of Lawson as lessee as of March 31, 2019 are as follows (Dollars in thousands):



Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total

Year one	$	4,529	$	222	$	4,751
Year two	4,017		190		4,207
Year three	4,025		100		4,125
Year four	2,542		38		2,580
Year five	973		11		984
Subsequent years	203		—		203
Total lease payments	16,289		561		16,850
Less: Interest	1,482		40		1,522
Present value of lease liabilities	$	14,807	$	521	$	15,328

Note: Minimum lease payments exclude payments to landlord for real estate taxes and common area maintenance

Lease Disclosures

The weighted average lease terms and interest rates of the leases held by Lawson as of March 31, 2019 are as follows:



Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate

Operating Leases	3.9	5.2%
Financing Leases	2.9	5.5%

The cash outflows of the leasing activity of Lawson as lessee for the three months ending March 31, 2019 are as follows (Dollars in thousands):



Cash Flow Source	Classification	Amount

Operating cash flows from operating leases	Operating activities	$	808
Operating cash flows from financing leases	Operating activities	6
Financing cash flows from financing leases	Financing activities	52

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

The cash outflows of the leasing activity of Lawson as lessee for the three months ending March 31, 2019 are as follows (Dollars in thousands):



Cash Flow Source	Classification	Amount

Operating cash flows from operating leases	Operating activities	$	808
Operating cash flows from financing leases	Operating activities	6
Financing cash flows from financing leases	Financing activities	52

Operating Lease Income

The income generated by Lawson as lessor for the three months ending March 31, 2019 are as follows (Dollars in thousands):



Lease Income Related To Lease Payments	Amount

Operating Leases	$	42
Financing Leases	—
Total lease payments	$	42