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Leases (Tables)

9 Months Ended

Sep. 30, 2019

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



Lease Type	Classification	Three Months Ending September 30, 2019		Nine Months Ending September 30, 2019

Consolidated Operating Lease Expense ⁽¹⁾	Operating expenses	$	1,190	$	3,532

Consolidated Financing Lease Amortization	Operating expenses	60		159
Consolidated Financing Lease Interest	Interest expense	10		23
Consolidated Financing Lease Expense		70		182

Sublease Income ⁽²⁾	Operating expenses	—		(160		)
Net Lease Cost		$	1,260	$	3,554

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



Lease Type	Amount

Total ROU operating lease assets ⁽¹⁾	$	11,258
Total ROU financing lease assets ⁽²⁾	659
Total lease assets	$	11,917

Total current operating lease obligation	$	3,534
Total current financing lease obligation	247
Total current lease obligations	$	3,781

Total long term operating lease obligation	$	9,976
Total long term financing lease obligation	384
Total long term lease obligation	$	10,360

⁽¹⁾ Operating lease assets are recorded net of accumulated amortization of $2.1 million as of September 30, 2019

⁽²⁾ Financing lease assets are recorded net of accumulated amortization of $0.2 million as of September 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 September 30, 2019 were as follows (Dollars in thousands):



Maturity Date of Lease Liabilities	Operating Leases		Financing Leases		Total

Year one	$	4,097	$	258	$	4,355
Year two	4,141		214		4,355
Year three	3,582		118		3,700
Year four	1,717		70		1,787
Year five	701		20		721
Subsequent years	627		—		627
Total lease payments	14,865		680		15,545
Less: Interest	1,355		49		1,404
Present value of lease liabilities	$	13,510	$	631	$	14,141

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 September 30, 2019 are as follows:



Lease Type	Weighted Average Term in Years	Weighted Average Interest Rate

Operating Leases	4.0	5.1%
Financing Leases	3.0	5.5%

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

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



Cash Flow Source	Classification	Amount

Operating cash flows from operating leases	Operating activities	$	3,014
Operating cash flows from financing leases	Operating activities	14
Financing cash flows from financing leases	Financing activities	192

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.