Leases

6 Months Ended

Jun. 30, 2019

As discussed in Note 2, "New Accounting Standards," we adopted FASB ASC Topic 842 on January 1, 2019, using the modified retrospective transition method. We have elected to apply the package of practical expedients and the land easement practical expedient. We have not elected to apply the hindsight practical expedient.

As a result of this adoption, we classify most leases as either finance or operating leases and recognize a related lease liability and right-of-use asset on our consolidated balance sheets. Our accounting for finance leases remains unchanged after the adoption of FASB ASC Topic 842. We have elected to account for leases with a term of one year or less (short-term leases) using a method similar to the operating lease model under FASB ASC Topic 840, Leases (i.e. they are not recorded on the consolidated balance sheets).

We elected to apply the transition provisions of this guidance, including its disclosure requirements, at its date of adoption instead of at the beginning of the earliest comparative period presented. Accordingly, we have not restated our consolidated balance sheet as of December 31, 2018. There was no cumulative effect of adoption on our retained earnings or any other components of equity. The below adjustments were made to our condensed consolidated balance sheet on January 1, 2019 to reflect the new guidance:



	December 31, 2018		Adjustment			January 1, 2019
Prepaid expenses and other current assets	$	113,234	$	(253	)	$	112,981
Other intangible assets, net	$	897,191	$	(1,510	)	$	895,681
Other assets	$	86,890	$	58,496		$	145,386
Accrued expenses and other current liabilities	$	218,130	$	12,119		$	230,249
Other long-term liabilities	$	39,277	$	44,614		$	83,891

The table below presents the amounts recognized and location of recognition in our condensed consolidated balance sheet as of June 30, 2019 related to our operating and finance leases:



	June 30, 2019
Operating lease right-of-use assets:
Other assets	$	52,471
Total operating lease right-of-use assets	$	52,471
Operating lease liabilities:
Accrued expenses and other current liabilities	$	11,864
Other long-term liabilities	42,062
Total operating lease liabilities	$	53,926
Finance lease right-of-use assets:
Property, plant and equipment, at cost	$	49,714
Accumulated depreciation	(23,412		)
Property, plant and equipment, net	$	26,302
Finance lease liabilities:
Current portion of long-term debt, finance lease and other financing obligations	$	2,298
Finance lease and other financing obligations, less current portion	29,797
Total finance lease liabilities	$	32,095

The table below presents the lease liabilities arising from obtaining right-of-use assets in the six months ended June 30, 2019:



	Six months ended
	June 30, 2019
Operating leases	$	1,882
Finance leases	$	—

For finance leases, the consolidated statements of operations include separate recognition of interest on the lease liability and amortization of the right-of-use asset. For operating leases, the consolidated statements of operations include a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. The table below presents our total lease cost for the three and six months ended June 30, 2019:



	For the three months ended		For the six months ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	4,244	$	8,224

Finance lease cost:
Amortization of right-of-use assets	$	452	$	904
Interest on lease liabilities	671		1,360
Total finance lease cost	$	1,123	$	2,264

Short-term lease cost was not material for the three and six months ended June 30, 2019.

Cash flows from operating activities include (1) interest on finance lease liabilities and (2) payments arising from operating leases. Cash flows from financing activities include repayments of the principal portion of finance lease liabilities. The table below presents the cash paid related to our operating and financing leases for the six months ended June 30, 2019:



	For the six months ended
	June 30, 2019
Operating cash flows from operating leases	$	8,090
Operating cash flows from finance leases	$	1,206
Financing cash flows from finance leases	$	753

We occupy leased facilities with initial terms ranging up to 20 years. These lease agreements frequently include options to renew for additional periods and generally require that we pay taxes, insurance, and maintenance costs. We also lease certain

vehicles and equipment. The table below presents the weighted average remaining lease term of our operating and finance leases (in years):



	June 30, 2019
Operating leases	8.2
Finance leases	12.8

Our lease liabilities are initially measured at the present value of the lease payments not yet paid, discounted using our incremental borrowing rate for a period that is comparable to the remaining lease term. Upon adoption of FASB ASC Topic 842, we initially measured our operating lease liabilities using this methodology, while our accounting for finance leases remained unchanged. We use our incremental borrowing rate, adjusted for collateralization, because the discount rate implicit in our leases are generally not readily determinable. The table below presents our weighted average discount rate as of June 30, 2019:



	June 30, 2019
Operating leases	5.8	%
Finance leases	8.5	%

The table below presents a maturity analysis of the obligations related to our operating lease liabilities and finance lease liabilities in effect as of June 30, 2019:



	Operating Leases			Finance Leases
Year ending December 31,
2019 (excluding the six months ended June 30, 2019)	$	7,932		$	2,715
2020	13,030			4,541
2021	9,235			4,063
2022	7,266			3,713
2023	5,961			3,772
Thereafter	27,550			36,330
Total undiscounted cash flows related to lease liabilities	70,974			55,134
Less imputed interest	(17,048		)	(23,039		)
Total lease liabilities	$	53,926		$	32,095