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LEASES | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
LEASES | LEASES On January 1, 2019, we adopted Topic 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with Topic 840. On January 1, 2019, we recorded operating lease right-of-use assets of $16.5 million and operating lease liabilities of $17.3 million, related to real estate and equipment leases, based on the present value of the future lease payments on the date of adoption. The components of lease cost for the three and nine months ended September 30, 2019 are as follows (in thousands):
| Income Statement Classification |  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Operating lease cost | Facilities and grounds expense(1) |  | $ | 899 |  |  | $ | 2,762 |
Short-term lease cost | Facilities and grounds expense(1) |  | $ | 73 |  |  | $ | 206 |
Finance lease cost: |  |  |  |  |
Depreciation of leased assets | Depreciation and amortization(2) |  | $ | 131 |  |  | $ | 395 |
Interest on lease liabilities | Interest expense |  | 129 |  |  | 392 |
Total finance lease cost |  |  | 260 |  |  | 787 |
Total lease cost |  |  | $ | 1,232 |  |  | $ | 3,755 |
(1) | Facilities and grounds expense is included within Cost of service and General, administrative and other on our Consolidated Statements of Operations.
(2) | Depreciation and amortization expense is included within Field depreciation and Home office depreciation and amortization on our Consolidated Statements of Operations.
Variable lease expense was immaterial for the three and nine months ended September 30, 2019. Supplemental cash flow information related to our leases for the nine months ended September 30, 2019 is as follows (in thousands):
| Nine Months Ended September 30, 2019
Cash paid for operating leases included in operating activities | $ | 2,921 |
Cash paid for finance leases included in financing activities | 669 |
Right-of-use assets obtained in exchange for new leases for the nine months ended September 30, 2019 is as follows (in thousands):
| Nine Months Ended September 30, 2019
Right-of-use assets obtained in exchange for new operating lease liabilities(1) | $ | 8,175 |
Right-of-use assets obtained in exchange for new finance lease liabilities | — |
(1) | During the three months ended June 30, 2019, we modified an existing operating lease to extend the term through 2030. As a result of this modification, we increased our lease liabilities and right-of-use assets by $8.2 million.
Supplemental balance sheet information related to leases as of September 30, 2019 is as follows (in thousands):
Lease Type |  | Balance Sheet Classification |  | September 30, 2019
Operating lease right-of-use assets |  | Operating lease right-of-use assets |  | $ | 22,628 |
Finance lease right-of-use assets(1) |  | Property, plant and equipment, net |  | 5,322 |
Total right-of-use assets |  |  |  | $ | 27,950 |
Operating lease current liabilities |  | Current portion of operating lease obligations |  | $ | 1,524 |
Finance lease current liabilities |  | Current portion of finance lease obligations |  | 282 |
Total current lease liabilities |  |  |  | 1,806 |
Operating lease non-current liabilities |  | Obligations under operating leases, net of current portion |  | 21,758 |
Finance lease non-current liabilities |  | Obligations under finance leases, net of current portion |  | 5,929 |
Total non-current lease liabilities |  |  |  | 27,687 |
Total lease liabilities |  |  |  | $ | 29,493 |
(1) | Finance lease right-of-use assets are presented net of accumulated depreciation of $2.0 million.
The average lease terms and discount rates as of September 30, 2019 are as follows:
| Weighted-average remaining lease term (years) |  | Weighted-average discount rate
Operating leases | 11.2 |  | 8.1 | %
Finance leases | 7.2 |  | 8.2 | %
The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands):
| Operating |  | Finance
Lease payments due: |  |  |
Remainder of 2019 | $ | 975 |  |  | $ | 206 |
2020 | 3,277 |  |  | 828 |
2021 | 3,632 |  |  | 836 |
2022 | 3,283 |  |  | 860 |
2023 | 3,186 |  |  | 860 |
Thereafter | 20,934 |  |  | 7,082 |
Total lease payments | 35,287 |  |  | 10,672 |
Less: Interest | (12,005 | ) |  | (4,461 | )
Present value of lease liabilities | $ | 23,282 |  |  | $ | 6,211 |
As of September 30, 2019, we had no additional significant operating or finance leases that had not yet commenced.
LEASES | LEASES On January 1, 2019, we adopted Topic 842 using the modified retrospective method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with Topic 840. On January 1, 2019, we recorded operating lease right-of-use assets of $16.5 million and operating lease liabilities of $17.3 million, related to real estate and equipment leases, based on the present value of the future lease payments on the date of adoption. The components of lease cost for the three and nine months ended September 30, 2019 are as follows (in thousands):
| Income Statement Classification |  | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Operating lease cost | Facilities and grounds expense(1) |  | $ | 899 |  |  | $ | 2,762 |
Short-term lease cost | Facilities and grounds expense(1) |  | $ | 73 |  |  | $ | 206 |
Finance lease cost: |  |  |  |  |
Depreciation of leased assets | Depreciation and amortization(2) |  | $ | 131 |  |  | $ | 395 |
Interest on lease liabilities | Interest expense |  | 129 |  |  | 392 |
Total finance lease cost |  |  | 260 |  |  | 787 |
Total lease cost |  |  | $ | 1,232 |  |  | $ | 3,755 |
(1) | Facilities and grounds expense is included within Cost of service and General, administrative and other on our Consolidated Statements of Operations.
(2) | Depreciation and amortization expense is included within Field depreciation and Home office depreciation and amortization on our Consolidated Statements of Operations.
Variable lease expense was immaterial for the three and nine months ended September 30, 2019. Supplemental cash flow information related to our leases for the nine months ended September 30, 2019 is as follows (in thousands):
| Nine Months Ended September 30, 2019
Cash paid for operating leases included in operating activities | $ | 2,921 |
Cash paid for finance leases included in financing activities | 669 |
Right-of-use assets obtained in exchange for new leases for the nine months ended September 30, 2019 is as follows (in thousands):
| Nine Months Ended September 30, 2019
Right-of-use assets obtained in exchange for new operating lease liabilities(1) | $ | 8,175 |
Right-of-use assets obtained in exchange for new finance lease liabilities | — |
(1) | During the three months ended June 30, 2019, we modified an existing operating lease to extend the term through 2030. As a result of this modification, we increased our lease liabilities and right-of-use assets by $8.2 million.
Supplemental balance sheet information related to leases as of September 30, 2019 is as follows (in thousands):
Lease Type |  | Balance Sheet Classification |  | September 30, 2019
Operating lease right-of-use assets |  | Operating lease right-of-use assets |  | $ | 22,628 |
Finance lease right-of-use assets(1) |  | Property, plant and equipment, net |  | 5,322 |
Total right-of-use assets |  |  |  | $ | 27,950 |
Operating lease current liabilities |  | Current portion of operating lease obligations |  | $ | 1,524 |
Finance lease current liabilities |  | Current portion of finance lease obligations |  | 282 |
Total current lease liabilities |  |  |  | 1,806 |
Operating lease non-current liabilities |  | Obligations under operating leases, net of current portion |  | 21,758 |
Finance lease non-current liabilities |  | Obligations under finance leases, net of current portion |  | 5,929 |
Total non-current lease liabilities |  |  |  | 27,687 |
Total lease liabilities |  |  |  | $ | 29,493 |
(1) | Finance lease right-of-use assets are presented net of accumulated depreciation of $2.0 million.
The average lease terms and discount rates as of September 30, 2019 are as follows:
| Weighted-average remaining lease term (years) |  | Weighted-average discount rate
Operating leases | 11.2 |  | 8.1 | %
Finance leases | 7.2 |  | 8.2 | %
The aggregate future lease payments for operating and finance leases as of September 30, 2019 are as follows (in thousands):
| Operating |  | Finance
Lease payments due: |  |  |
Remainder of 2019 | $ | 975 |  |  | $ | 206 |
2020 | 3,277 |  |  | 828 |
2021 | 3,632 |  |  | 836 |
2022 | 3,283 |  |  | 860 |
2023 | 3,186 |  |  | 860 |
Thereafter | 20,934 |  |  | 7,082 |
Total lease payments | 35,287 |  |  | 10,672 |
Less: Interest | (12,005 | ) |  | (4,461 | )
Present value of lease liabilities | $ | 23,282 |  |  | $ | 6,211 |
As of September 30, 2019, we had no additional significant operating or finance leases that had not yet commenced.

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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 + Details
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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 + Details
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