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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

9. Leases

In the first quarter of 2019, we adopted Accounting Standards Codification ("ASC") 842, Leases, which replaced the previous accounting standard, ASC 840. The new lease standard is a right-of-use model, requiring most lessee agreements to be recorded on the balance sheet. The intent of the standard is to provide greater transparency about lessee obligations and activities. The primary impact to our financial statements is that most operating leases are recorded on our consolidated balance sheet and enhanced disclosures are required for both operating and finance leases. As permitted by ASC 842, our accounting policy is to evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

We adopted the standard using the modified retrospective approach, as of January 1, 2019. Prior year's financial results were not restated. On the adoption date, we recorded a right-of-use asset for $72 million in other assets, net, with a corresponding offset to other accrued liabilities and other noncurrent liabilities for $25 million and $47 million, respectively. There was no impact to retained deficit from adoption of the new standard.

The following table presents the components of lease expense (in thousands):

	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
Operating lease cost	$	5,698			$	18,585
Finance lease cost:
Amortization of right-of-use assets	$	1,785			$	5,356
Interest on lease liabilities	102				367
Total finance lease cost	$	1,887			$	5,723

The following table presents supplemental cash flow information related to leases (in thousands):

	Nine Months Ended September 30, 2019
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	19,652
Operating cash flows used in finance leases	367
Financing cash flows used in finance leases	5,106
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	15,712
Finance leases	—

The following table presents supplemental balance sheet information related to leases (in thousands):

	September 30, 2019
Operating Leases
Operating lease right-of-use assets	$	62,132
Other accrued liabilities	22,866
Other noncurrent liabilities	45,286
Total operating lease liabilities	$	68,152
Finance Leases
Property and equipment	$	34,952
Accumulated depreciation	(25,446		)
Property and equipment, net	$	9,506
Other accrued liabilities	$	6,357
Other noncurrent liabilities	905
Total finance lease liabilities	$	7,262

The following table presents other supplemental information related to leases:

	September 30, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	4.8
Finance leases	1.1
Weighted Average Discount Rate
Operating leases	5.3	%
Finance leases	4.8	%

Our leases have remaining minimum terms that range between one and nine years. Some of our leases include options to extend for up to five additional years; others include options to terminate the agreement within three years. Future minimum lease payments under non-cancellable leases as of September 30, 2019 are as follows (in thousands):

Year Ending December 31,	Operating Leases				Finance Leases
2019	$	7,064			$	1,856
2020	20,973				5,610
2021	15,256				—
2022	11,192				—
2023	8,002				—
Thereafter	17,696				—
Total	80,183				7,466
Imputed Interest	(12,031		)		(204		)
Total	$	68,152			$	7,262

Leases

9. Leases

In the first quarter of 2019, we adopted Accounting Standards Codification ("ASC") 842, Leases, which replaced the previous accounting standard, ASC 840. The new lease standard is a right-of-use model, requiring most lessee agreements to be recorded on the balance sheet. The intent of the standard is to provide greater transparency about lessee obligations and activities. The primary impact to our financial statements is that most operating leases are recorded on our consolidated balance sheet and enhanced disclosures are required for both operating and finance leases. As permitted by ASC 842, our accounting policy is to evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

We adopted the standard using the modified retrospective approach, as of January 1, 2019. Prior year's financial results were not restated. On the adoption date, we recorded a right-of-use asset for $72 million in other assets, net, with a corresponding offset to other accrued liabilities and other noncurrent liabilities for $25 million and $47 million, respectively. There was no impact to retained deficit from adoption of the new standard.

The following table presents the components of lease expense (in thousands):

	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
Operating lease cost	$	5,698			$	18,585
Finance lease cost:
Amortization of right-of-use assets	$	1,785			$	5,356
Interest on lease liabilities	102				367
Total finance lease cost	$	1,887			$	5,723

The following table presents supplemental cash flow information related to leases (in thousands):

	Nine Months Ended September 30, 2019
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	19,652
Operating cash flows used in finance leases	367
Financing cash flows used in finance leases	5,106
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	15,712
Finance leases	—

The following table presents supplemental balance sheet information related to leases (in thousands):

	September 30, 2019
Operating Leases
Operating lease right-of-use assets	$	62,132
Other accrued liabilities	22,866
Other noncurrent liabilities	45,286
Total operating lease liabilities	$	68,152
Finance Leases
Property and equipment	$	34,952
Accumulated depreciation	(25,446		)
Property and equipment, net	$	9,506
Other accrued liabilities	$	6,357
Other noncurrent liabilities	905
Total finance lease liabilities	$	7,262

The following table presents other supplemental information related to leases:

	September 30, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	4.8
Finance leases	1.1
Weighted Average Discount Rate
Operating leases	5.3	%
Finance leases	4.8	%

Our leases have remaining minimum terms that range between one and nine years. Some of our leases include options to extend for up to five additional years; others include options to terminate the agreement within three years. Future minimum lease payments under non-cancellable leases as of September 30, 2019 are as follows (in thousands):

Year Ending December 31,	Operating Leases				Finance Leases
2019	$	7,064			$	1,856
2020	20,973				5,610
2021	15,256				—
2022	11,192				—
2023	8,002				—
Thereafter	17,696				—
Total	80,183				7,466
Imputed Interest	(12,031		)		(204		)
Total	$	68,152			$	7,262

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- References

No definition available.

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- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ 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

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- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ 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

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