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LEASES
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
LEASES

NOTE 8.  LEASES

 

We have entered into various non–cancellable operating lease agreements for certain of our offices, shop and warehouse facilities, equipment and vehicles.  We determine if an arrangement is a lease, or contains a lease, at inception and record the lease in our unaudited condensed consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

 

Our leases have remaining lease terms ranging from one year to seven years and often include options to extend the lease term for up to three years.  Some of our leases also include options to terminate the lease prior to the end of the agreed upon lease term.  For the majority of leases entered into during the current period, we have concluded it is not reasonably certain that we would exercise the options to extend the lease.  Therefore, as of the lease commencement date, our lease terms generally do not include these options.  We include options to extend the lease when it is reasonably certain that we will exercise that option.

Lease expense for operating lease payments is recognized on a straight–line basis over the lease term.  Certain operating leases provide for annual increases to lease payments based on an index or rate.  We estimate the annual increase in lease payments based on the index or rate at the lease commencement date.  Differences between the estimated lease payment and actual payment are expensed as incurred.  Lease expense for finance lease payments is recognized as amortization expense of the finance lease ROU asset and interest expense on the finance lease liability over the lease term.

The balances for the operating and finance leases where we are the lessee are presented on our unaudited condensed consolidated balance sheet as follows:

 

 

 

Classification on Unaudited Condensed Consolidated Balance Sheet

 

September 30,

2020

 

 

December 31,

2019

 

Assets:

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use

   assets

 

 

Operating lease right-of-use assets

 

$

5,505

 

 

$

6,421

 

Finance lease assets

 

Property and equipment, net

 

 

 

 

 

324

 

Total lease assets

 

 

 

$

5,505

 

 

$

6,745

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities

 

Operating lease liabilities

 

$

1,517

 

 

$

2,576

 

Finance lease liabilities

 

Current portion of long-term debt and finance leases

 

 

 

 

 

350

 

Long-term - operating lease

  liabilities

 

 

Other long-term liabilities

 

 

4,107

 

 

 

3,980

 

Total lease liabilities

 

 

 

$

5,624

 

 

$

6,906

 

The components of lease expense on our unaudited condensed consolidated statement of operations are as follows:

 

 

 

Three Months

Ended September 30,

 

 

Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating lease expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease expense (1)

 

$

696

 

 

$

1,294

 

 

$

3,103

 

 

$

3,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of leased assets

 

$

 

 

$

221

 

 

$

324

 

 

$

664

 

Interest on lease liabilities

 

 

 

 

 

24

 

 

 

10

 

 

 

93

 

Total finance lease expense

 

$

 

 

$

245

 

 

$

334

 

 

$

757

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease expense

 

$

696

 

 

$

1,539

 

 

$

3,437

 

 

$

4,715

 

 

(1)

Includes short–term leases and variable lease costs, both of which are immaterial.

 

As of September 30, 2020, our operating leases have a weighted average remaining lease term of 3.9 years and a weighted average discount rate of 13.0%.

 

 

Supplemental cash flows information related to leases where we are the lessee is as follows for the nine months ended September 30:

 

 

 

2020

 

 

2019

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

2,337

 

 

$

2,583

 

Operating cash flows from finance leases

 

 

10

 

 

 

93

 

Financing cash flows from finance leases

 

 

350

 

 

 

652

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets obtained in exchange for new

  operating lease liabilities

 

 

744

 

 

 

162

 

As of September 30, 2020, the maturities of the liabilities related to our operating leases are as follows:

 

Three months ended December 31, 2020

 

$

549

 

2021

 

 

1,958

 

2022

 

 

1,615

 

2023

 

 

1,461

 

2024

 

 

1,002

 

Thereafter

 

 

613

 

Total minimum lease payments

 

 

7,198

 

Less interest

 

 

1,574

 

Present value of lease liabilities

 

 

5,624

 

Less current lease liabilities

 

 

1,517

 

Long-term lease liabilities

 

$

4,107