LEASES

6 Months Ended

Jun. 30, 2020

The Company's lease population of its right-of-use asset and lease liabilities under the Leases Topic of the FASB ASC is substantially related to the rental of office space. The Company enters into lease agreements as lessee for the rental of office space for both its corporate and branch locations that may include options to extend or terminate early. Many of these real estate leases require variable payments of property taxes, insurance, and common area maintenance, in addition to base rent. Certain of the leases have provisions for free rent months during the lease term and/or escalating rent payments and, particularly for the Company’s longer-term leases for its corporate offices, it has received incentives to enter into the leases such as receiving up to a specified dollar amount to construct tenant improvements. These leases do not include residual value guarantees, covenants, or other restrictions.

During the second quarter of 2020, in connection with the continuing developments from COVID-19, the Company expedited restructuring plans and either reduced or fully vacated leased office space. The Company is in the process of seeking to sublet some of the space where possible. The decision and change in the use of space resulted in a right-of-use asset impairment charge of $3.8 million. This loss was determined by comparing the fair value of the impacted right-of-use assets to the carrying value of the assets as of the impairment measurement date, in accordance with the Property, Plant and Equipment Topic of the FASB ASC. Where or when applicable, the fair value of the right-of-use assets was based on the estimated sublease income for the space taking into consideration the time period it will take to obtain a subtenant, the applicable discount rate, and the sublease rate. Furthermore, the Company wrote off a total of $0.7 million of leasehold improvements and other property and equipment related to these locations. The measurement of the right-of-use asset impairments, using the assumptions described, is a level 3 measurement.

The table below presents the lease-related assets and liabilities included on the condensed consolidated balance sheets:


Classification on Condensed Consolidated Balance Sheets:	June 30, 2020		December 31, 2019
	(amounts in thousands)
Operating lease right-of-use assets	$	11,553	$	16,964
Operating lease liabilities - current	$	4,883	$	4,878
Operating lease liabilities - non-current	$	16,757	$	19,070


Weighted-average remaining lease term	4.4 years		4.7 years
Weighted average discount rate	6.26	%	6.26	%

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities (which do not include short-term leases) recorded on the condensed consolidated balance sheets as of June 30, 2020:


Years Ending December 31:	(amounts in thousands)
2020	$	2,824
2021	6,175
2022	5,243
2023	4,763
2024	3,390
Thereafter	2,487
Total minimum lease payments	24,882
Less: amount of lease payments representing interest	(3,242)
Present value of future minimum lease payments	21,640
Less: current lease obligations	(4,883)
Non-current lease obligations	$	16,757

Other Information

The table below provides information regarding supplemental cash flows:


	Six Months Ended
	June 30,
	2020		2019
	(amounts in thousands)
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,654	$	3,685
Right-of-use assets acquired under operating lease	$	631	$	873

The components of lease expense are as follows:


	Three Months Ended
	June 30,
	2020		2019
	(amounts in thousands)
Amounts Included in Condensed Consolidated Statements of Operations:
Operating lease expense	$	1,407	$	1,698
Short-term lease expense	$	1,451	$	1,949
Variable and other lease costs	$	482	$	659

	Six Months Ended
	June 30,
	2020		2019
	(amounts in thousands)
Amounts Included in Condensed Consolidated Statements of Operations:
Operating lease expense	$	2,930	$	3,392
Short-term lease expense	$	3,296	$	4,108
Variable and other lease costs	$	1,056	$	1,377

Operating lease expense, short-term lease expense, and variable and other lease costs are included in selling, general and administrative expenses, direct operating expenses, and restructuring costs in the condensed consolidated statements of operations, depending on the nature of the leased asset.

As of June 30, 2020, the Company does not have any material operating leases which have not yet commenced. The Company has an immaterial amount of finance lease contracts related to other equipment rentals which are not included in the above disclosures.