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Note D - Leases | 6 Months Ended
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Jun. 30, 2020
Notes to Financial Statements |
Lessee, Operating and Finance Leases [Text Block] | Note D - Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective approach with optional transition method. The Company recorded operating lease assets (right-of-use assets) of $ 22.8 million and operating lease liabilities of $23.9 million. There was minimal impact to retained earnings upon adoption of Topic 842. We have operating and finance leases for corporate and business offices, service facilities, call centers and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). Our leases have remaining lease terms of 1 year to 6 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. As of June 30, 2020 , assets recorded under finance and operating leases were approximately $1.0 million and $15.1 million respectively, and accumulated depreciation associated with finance leases was $0.5 million. Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payment is the interest rate implicit in the lease, or when that is not readily determinable, we utilized our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. During the three months ended June 30 2020, we modified the terms of some of our existing leases which resulted in the re-measurement of the related ROU assets and lease liabilities. We also exercised early termination options and impaired a lease for a facility we are vacating. The resulting impairment and early termination charges are included in our restructuring expenses in the three months ended June 30, 2020. The following table presents supplemental balance sheet information related to our financing and operating leases:
In thousands |  | As of June 30, 2020 |  |  |  |  |
|  | Operating Leases |  |  | Finance Leases |  |  | Total |
Right-of-use Assets |  | $ | 15,078 |  |  | $ | 1,034 |  |  | $ | 16,112 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Short-term lease liabilities |  |  | 6,967 |  |  |  | 315 |  |  |  | 7,282 |
Long-term lease liabilities |  |  | 11,736 |  |  |  | 481 |  |  |  | 12,217 |
Total Lease Liabilities |  | $ | 18,703 |  |  | $ | 796 |  |  | $ | 19,499 |
In thousands |  | As of December 31, 2019 |  |  |  |  |
|  | Operating Leases |  |  | Finance Leases |  |  | Total |
Right-of-use Assets |  | $ | 17,679 |  |  | $ | 1,138 |  |  | $ | 18,817 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Short-term lease liabilities |  |  | 7,226 |  |  |  | 390 |  |  |  | 7,616 |
Long-term lease liabilities |  |  | 12,514 |  |  |  | 564 |  |  |  | 13,078 |
Total Lease Liabilities |  | $ | 19,740 |  |  | $ | 954 |  |  | $ | 20,694 |
For the three and six months ended June 30, 2020 and 2019 , the components of lease expense were as follows:
In thousands |  | Three Months Ended June 30, 2020 |  |  | Three Months Ended June 30, 2019 |
Operating lease cost |  | $ | 2,119 |  |  | $ | 2,378 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  | 65 |  |  |  | 86 |
Interest on lease liabilities |  |  | 13 |  |  |  | 19 |
Total Finance lease cost |  |  | 78 |  |  |  | 105 |
Variable lease cost |  |  | 722 |  |  |  | 840 |
Total lease cost |  | $ | 2,919 |  |  | $ | 3,323 |
In thousands |  | Six Months Ended June 30, 2020 |  |  | Six Months Ended June 30, 2019 |
Operating lease cost |  | $ | 4,484 |  |  | $ | 4,593 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  |  | 132 |  |  |  | 150 |
Interest on lease liabilities |  |  | 27 |  |  |  | 38 |
Total Finance lease cost |  |  | 159 |  |  |  | 188 |
Variable lease cost |  |  | 1,642 |  |  |  | 1,377 |
Total lease cost |  | $ | 6,285 |  |  | $ | 6,158 |
Other information related to leases was as follows:
In thousands |  | Six Months Ended June 30, 2020 |  |  | Six Months Ended June 30, 2019 |
Supplemental Cash Flows Information |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 10,661 |  |  | $ | 8,631 |
Operating cash flows from finance leases |  |  | 23 |  |  |  | 38 |
Financing cash flows from finance leases |  |  | 191 |  |  |  | 227 |
Weighted Average Remaining Lease term |  |  |  |  |  |  |  |
Operating leases |  |  | 3.2 |  |  |  | 3.5 |
Finance leases |  |  | 3.0 |  |  |  | 3.0 |
Weighted Average Discount Rate |  |  |  |  |  |  |  |
Operating leases |  |  | 4.66 | % |  |  | 4.74 | %
Finance leases |  |  | 6.34 | % |  |  | 6.91 | %
The maturities of the Company's finance and operating lease liabilities as of June 30, 2020 are as follows:
In thousands |  | Operating Leases |  |  | Finance Leases |
Year Ending December 31, |  |  |  |  |  |  |  |
Remainder of 2020 |  | $ | 7,633 |  |  | $ | 346 |
2021 |  |  | 5,303 |  |  |  | 227 |
2022 |  |  | 3,771 |  |  |  | 190 |
2023 |  |  | 2,865 |  |  |  | 88 |
2024 |  |  | 562 |  |  |  | 12 |
2025 |  |  | — |  |  |  | — |
Total future minimum lease payments |  |  | 20,134 |  |  |  | 863 |
Less: Imputed interest |  |  | 1,431 |  |  |  | 67 |
Total lease liabilities |  | $ | 18,703 |  |  | $ | 796 |
As of June 30, 2020 , we have one operating lease that has not yet commenced.

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