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Leases

9 Months Ended

Sep. 30, 2019

(3) Leases

The Company has various lease agreements for its facilities, equipment and vehicles with remaining lease terms ranging from one to seventeen years. The Company determines if an arrangement contains a lease at inception. Some leases include the options to purchase, terminate or extend for one or more years; these options are included in the ROU asset and liability lease term when it is reasonably certain an option will be exercised. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Most of the Company’s leases do not provide an implicit rate, therefore the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the future lease payments.

Certain of the Company’s leases include variable costs. Variable costs include non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

Components of lease cost (income) were as follows:


(in thousands)	Quarter ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	3,646	$	11,110
Finance lease cost - amortization expense	174		592
Finance lease cost - interest expense	114		344
Short-term lease cost	30		80
Variable lease cost	102		137
Sublease income	(33)		(33)
Total	$	4,033	$	12,230

Balance sheet classifications at September 30, 2019 are summarized below:


	September 30, 2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	30,786	$	10,092	$	26,488
Finance Leases	4,242		705		6,179
Total	$	35,028	$	10,797	$	32,667

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:


	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

Supplemental cash flow information related to our operating leases for the period ending September 30, 2019, was as follows:


(in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	11,657
Operating cash outflow from finance leases	$	343
Financing cash outflow from finance leases	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2019, were as follows:

September 30, 2019

Operating

Financing

Weighted-average remaining lease term

5.2 years

10.9 years

Weighted-average discount rate

6.47

6.74

Leases