LEASES

9 Months Ended

Sep. 30, 2020

Our lease obligations consist of operating and finance leases related to real estate and equipment. The components of lease cost for the three and nine months ended September 30, 2019 and 2020 are as follows (in thousands):


		Three months ended September 30,				Nine months ended September 30,
	Income Statement Classification	2019		2020		2019		2020
Operating lease cost	Facilities and grounds expense(1)	$	899	$	927	$	2,762	$	2,838
Short-term lease cost	Facilities and grounds expense(1)	73		52		206		148

Finance lease cost:
Depreciation of leased assets	Depreciation and amortization(2)	$	131	$	111	$	395	$	329
Interest on lease liabilities	Interest expense	129		123		392		374
Total finance lease cost		260		234		787		703
Total lease cost		$	1,232	$	1,213	$	3,755	$	3,689



(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 and 2020.

Supplemental cash flow information related to our leases for the nine months ended September 30, 2019 and 2020 is as follows (in thousands):


	Nine months ended September 30,
	2019		2020
Cash paid for operating leases included in operating activities	$	2,921	$	2,470
Cash paid for finance leases included in financing activities	669		621

Right-of-use assets obtained in exchange for new leases for the nine months ended September 30, 2019 and 2020 is as follows (in thousands):


	Nine months ended September 30,
	2019		2020
Right-of-use assets obtained in exchange for new operating lease liabilities	$	8,175	$	75
Right-of-use assets obtained in exchange for new finance lease liabilities	—		—

Supplemental balance sheet information related to leases as of December 31, 2019 and September 30, 2020 is as follows (in thousands):


Lease Type	Balance Sheet Classification	December 31, 2019		September 30, 2020
Operating lease right-of-use assets	Operating lease right-of-use assets	$	22,304	$	20,846

Finance lease right-of-use assets	Property, plant and equipment, net	$	6,770	$	6,770
Accumulated depreciation	Property, plant and equipment, net	(1,566)		(1,895)
Finance lease right-of-use assets, net		5,204		4,875

Operating lease current liabilities	Current portion of operating lease obligations	$	1,554	$	2,064
Finance lease current liabilities	Current portion of finance lease obligations	290		314
Total current lease liabilities		1,844		2,378

Operating lease non-current liabilities	Obligations under operating leases, net of current portion	21,533		19,952
Finance lease non-current liabilities	Obligations under finance leases, net of current portion	5,854		5,615
Total non-current lease liabilities		27,387		25,567

Total lease liabilities		$	29,231	$	27,945

The average lease terms and discount rates as of September 30, 2020 are as follows:


	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	10.3	8.1	%
Finance leases	6.1	8.2	%

The aggregate future lease payments for operating and finance leases as of September 30, 2020 are as follows (in thousands):


	Operating		Finance
Lease payments due:
Remainder of 2020	$	938	$	208
2021	3,729		836
2022	3,348		860
2023	3,226		860
2024	3,215		791
Thereafter	17,777		6,291
Total lease payments	32,233		9,846
Less: Interest	(10,217)		(3,917)
Present value of lease liabilities	$	22,016	$	5,929

As of September 30, 2020, we had no additional significant operating or finance leases that had not yet commenced.

LEASES


		Three months ended September 30,				Nine months ended September 30,
	Income Statement Classification	2019		2020		2019		2020
Operating lease cost	Facilities and grounds expense(1)	$	899	$	927	$	2,762	$	2,838
Short-term lease cost	Facilities and grounds expense(1)	73		52		206		148

Finance lease cost:
Depreciation of leased assets	Depreciation and amortization(2)	$	131	$	111	$	395	$	329
Interest on lease liabilities	Interest expense	129		123		392		374
Total finance lease cost		260		234		787		703
Total lease cost		$	1,232	$	1,213	$	3,755	$	3,689



(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.