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Leases (Tables)

6 Months Ended

Jun. 30, 2019

The expenses and income generated by the leasing activity of Lawson as lessee for the three and six months ending June 30, 2019 are as follows (Dollars in thousands):



Lease Type	Classification	Three Months Ending June 30, 2019			Six Months Ending June 30, 2019

Consolidated Operating Lease Expense ⁽¹⁾	Operating expenses	$	1,227		$	2,502

Consolidated Financing Lease Amortization	Operating expenses	51			99
Consolidated Financing Lease Interest	Interest expense	7			13
Consolidated Financing Lease Expense		58			112

Sublease Income ⁽²⁾	Operating expenses	(80		)	(160		)
Net Lease Cost		$	1,205		$	2,454

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

⁽²⁾ Sublease income from sublease of a portion of the Company headquarters. The sublease was terminated in June 2019 and the Company has no other subleases.

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 June 30, 2019 are as follows (Dollars in thousands):



Lease Type	Amount

Total ROU operating lease assets ⁽¹⁾	$	11,142
Total ROU financing lease assets ⁽²⁾	698
Total lease assets	$	11,840

Total current operating lease obligation	$	3,434
Total current financing lease obligation	274
Total current lease obligations	$	3,708

Total long term operating lease obligation	$	10,089
Total long term financing lease obligation	411
Total long term lease obligation	$	10,500

⁽¹⁾ Operating lease assets are recorded net of accumulated amortization of $1.4 million as of June 30, 2019

⁽²⁾ Financing lease assets are recorded net of accumulated amortization of $0.1 million as of June 30, 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 June 30, 2019 were as follows (Dollars in thousands):



Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total

Year one	$	4,032	$	267	$	4,299
Year two	4,044		240		4,284
Year three	3,981		126		4,107
Year four	1,880		79		1,959
Year five	845		25		870
Subsequent years	55		—		55
Total lease payments	14,837		737		15,574
Less: Interest	1,314		52		1,366
Present value of lease liabilities	$	13,523	$	685	$	14,208

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

December 31, 2018, were as follows (Dollars in thousands):



Maturity Date of Lease Liabilities	Operating Leases⁽²⁾⁽³⁾			Financing Lease⁽³⁾⁽⁴⁾			Capital Leases⁽⁴⁾
Year one		$	2,574		$	1,395	$	201
Year two		2,369			1,444		155
Year three		2,349			1,493		91
Year four		2,008			760		11
Year five		1,130			—		—
Subsequent years		374			—		—
Total lease payments⁽¹⁾		$	10,804		$	5,092	$	458

Lease Disclosures

he weighted average lease terms and interest rates of the leases held by Lawson as of June 30, 2019 are as follows:



Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate

Operating Leases	3.8	5.2%
Financing Leases	3.2	5.5%

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

The cash outflows of the leasing activity of Lawson as lessee for the six months ending June 30, 2019 are as follows (Dollars in thousands):



Cash Flow Source	Classification	Amount

Operating cash flows from operating leases	Operating activities	$	1,857
Operating cash flows from financing leases	Operating activities	7
Financing cash flows from financing leases	Financing activities	123

Operating Lease Income

Annual lease income classified as operating expenses of $0.2 million is anticipated through the earlier of the put option exercise or February, 2024.