Leases

6 Months Ended

Jun. 30, 2020

Leases

Leases

18.    Leases

The Company’s breakdown of lease expense is as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating lease cost	$	3,969	$	4,071	$	8,470	$	9,283
Finance lease cost
Amortization of leased assets		2,195		1,692		4,309		3,452
Interest on lease liabilities		229		199		462		354
Short-term lease cost		2,151		2,510		5,031		5,075
Sublease income		(148)		(143)		(296)		(297)
	$	8,396	$	8,329	$	17,976	$	17,867

Operating leases

The Company has entered into commercial leases for various auction sites and offices located in North America, Europe, the Middle East and Asia. The majority of these leases are non-cancellable. The Company also has further operating leases for computer equipment, certain motor vehicles and small office equipment where it is not in the best interest of the Company to purchase these assets.

The majority of the Company’s operating leases have a fixed term with a remaining life between one month and 20 years, with renewal options included in the contracts. The leases have varying contract terms, escalation clauses and renewal options. Generally, there are no restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations. At the inception of a lease, the Company determines whether it is reasonably certain to exercise a renewal option and includes the options in the determination of the lease term and the lease liability where it is reasonably certain to exercise the option. If the Company’s intention is to exercise an option subsequent to the commencement of the lease, the Company will re-assess the lease term. The Company has included certain renewal options in its operating lease liabilities for key property leases for locations that have strategic importance to the Company such as its Corporate Head Office. The Company has not included any purchase options available within its operating lease portfolio in its determination of its operating lease liability.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Remainder of 2020	$	8,327
2021		13,352
2022		12,092
2023		10,478
2024		8,752
Thereafter		103,710
Total future minimum lease payments	$	156,711
less: imputed interest		(43,116)
Total operating lease liability	$	113,595
less: operating lease liability - current		(10,077)
Total operating lease liability - non-current	$	103,518

At June 30, 2020 the weighted average remaining lease term for operating leases is 15.5 years and the weighted average discount rate is 4.1%.

18.    Leases (continued)

Finance leases

The Company has entered into finance lease arrangements for certain vehicles, computer and yard equipment and office furniture. The majority of the leases have a fixed term with a remaining life of one month to six years with renewal options included in the contracts. In certain of these leases, the Company has the option to purchase the leased asset at fair market value or a stated residual value at the end of the lease term. For certain leases such as vehicle leases the Company has included renewal options in the determination of its lease liabilities. The Company has not included any purchase options available within its finance lease portfolio in its determination of the finance lease liability.

As at June 30, 2020, the net carrying amount of computer and yard equipment and other assets under capital leases is $24,461,000 (December 31, 2019: $23,258,000), and is included in the total property, plant and equipment as disclosed on the consolidated balance sheets.

			Accumulated		Net book
As at June 30, 2020	Cost		depreciation		value
Computer equipment	$	13,717	$	(6,748)	$	6,969
Yard and others		25,490		(7,998)		17,492
	$	39,207	$	(14,746)	$	24,461

			Accumulated		Net book
As at December 31, 2019	Cost		depreciation		value
Computer equipment	$	15,314	$	(7,832)	$	7,482
Yard and others		21,525		(5,749)		15,776
	$	36,839	$	(13,581)	$	23,258

The future aggregate minimum lease payments under non-cancellable finance leases are as follows:

Remainder of 2020	$	4,730
2021		8,359
2022		6,501
2023		4,510
2024		2,357
Thereafter		247
Total future minimum lease payments	$	26,704
less: imputed interest		(1,572)
Total finance lease liability	$	25,132
less: finance lease liability - current		(8,331)
Total finance lease liability - non-current	$	16,801

At June 30, 2020 the weighted average remaining lease term for finance leases is 3.4 years and the weighted average discount rate is 3.8%.

Subleases

As at June 30, 2020, the total future minimum sublease payments expected to be received under non-cancellable subleases is $359,000.