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Note 6 - Leases

6 Months Ended

Jun. 30, 2020

6.	Leases

The Company has entered into various equipment and property leases with terms of ten years or less. Certain lease agreements include renewals and/or purchase options set to expire at various dates, and certain lease agreements include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is a lease at inception. Leases with an initial term of twelve months or less are not recorded on the balance sheet; costs for these leases are recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company's leases do not provide an implicit rate of return, the Company uses its asset-based lending rate in determining the present value of lease payments. Some of the Company's lease agreements contain non-lease components, which are accounted for separately.

The following table summarizes the Company’s leases recorded on the Condensed Consolidated Balance Sheets (in thousands):

	June 30, 2020		December 31, 2019
Right-of-use assets:
Finance leases, net, included in Property and equipment (1)	$	992	$	1,203
Operating leases		29,645		7,683
Total right-of-use assets	$	30,637	$	8,886

Lease liabilities:
Finance leases	$	1,434	$	1,641
Operating leases		28,768		7,889
Total lease liabilities	$	30,202	$	9,530

(1)

Finance lease right-of-use assets are presented net of accumulated amortization of $1.1 million and $0.9 million as of June 30, 2020 and December 31, 2019, respectively.

Lease cost consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Finance lease cost:
Amortization of right-of-use assets	$	106	$	110	$	211	$	219
Interest on lease liabilities		20		14		42		29
Operating lease cost		947		480		1,752		905
Short-term lease cost		217		313		407		575
Variable lease cost		40		35		82		75
Total lease cost	$	1,330	$	952	$	2,494	$	1,803

The future maturities of lease liabilities as of June 30, 2020 are as follows (in thousands):

	Finance Leases			Operating Leases

Remainder of 2020	$	271		$	1,987
2021		382			3,050
2022		361			2,695
2023		157			2,432
2024		471			2,287
Thereafter		-			27,098
Total lease payments		1,642			39,549
Amount representing interest		(208	)		(10,781	)
Present value of lease liabilities		1,434			28,768
Current portion of lease liabilities (1)		(380	)		(2,340	)
Long-term lease liabilities (2)	$	1,054		$	26,428

	(1)	Current portion of finance lease liabilities are included in Accrued liabilities.

	(2)	Long-term finance lease liabilities are included in Other long-term liabilities.

The following table summarizes the lease terms and discount rates for the lease liabilities:

	June 30, 2020			December 31, 2019
Weighted-average remaining lease term (years)
Finance leases		3.43			3.79
Operating leases		17.61			8.31
Weighted-average discount rate
Finance leases		5.45	%		5.40	%
Operating leases		3.53	%		4.50	%

The following table presents other information related to the leases (in thousands):

	Six Months Ended June 30,
	2020			2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	(42	)	$	(29	)
Operating cash flows from operating leases		(1,677	)		(887	)
Financing cash flows from finance leases		(208	)		(215	)
Right-of-use assets obtained in exchange for operating lease liabilities		1,837			1,238