Leases

3 Months Ended

Mar. 31, 2020

Subsequent to the adoption of ASC 842, the Company recognizes right of use assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. The discount rates used to determine the present value of the lease assets and liabilities are based on the Company’s incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. As the rates implicit in most of the Company’s leases are not readily determinable, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The Company uses the portfolio approach and groups leases by short-term and long-term categories, applying the corresponding incremental borrowing rates to these categories of leases.

For leases with a term of 12 months or less, no right of use assets or liabilities are recognized on the balance sheet and the Company recognizes the lease expense on a straight-line basis over the lease term. Additionally, the Company recognizes variable lease payments as an expense in the period incurred.

The Company’s lease population consists primarily of vehicle and heavy equipment leases and leases for office equipment. The Company’s building and land leases relate to corporate office space and certain site offices. The Company determines whether a contract contains a lease based on whether the Company obtains the right to control the use of specifically identifiable property, plant, and equipment for a period of time in exchange for consideration. For the three months ended March 31, 2020 and 2019, the Company identified no instances requiring significant judgment in determining whether any contracts entered into during the period were or were not leases. Additionally, the Company had no material sublease agreements within the scope of ASC 842 or lease agreements for which the Company was the lessor for the three months ended March 31, 2020 and 2019.

Renewal options in the Company’s lease population primarily relate to month-to-month extensions on vehicle leases and are immaterial both individually and in the aggregate. The Company includes renewal options that are reasonably certain to be exercised in the measurement of lease liabilities. As of March 31, 2020, the Company does not intend to exercise any termination options on existing leases.

As of March 31, 2020 and December 31, 2019, the Company had the following right-of-use assets and lease liabilities within the Company’s Condensed Consolidated Balance Sheets:



		March 31, 2020		December 31, 2019
Assets	Balance Sheet Classification
Financing lease assets	Property, plant, and equipment, net	$	8,853	$	9,718
Operating lease right-of-use assets	Other non-current assets	7,255		8,678
Total lease assets		$	16,108	$	18,396

Liabilities	Balance Sheet Classification
Financing lease liabilities - current	Current portion of long-term debt	$	3,322	$	3,275
Operating lease liabilities - current	Accrued expenses and other current liabilities	1,462		1,813
Financing lease liabilities - long-term	Long-term debt	3,827		4,674
Operating lease liabilities - long-term	Other non-current liabilities	5,793		6,866
Total lease liabilities		$	14,404	$	16,628

Total lease costs and other lease information for the three months ended March 31, 2020 and 2019 included the following:



	Three Months Ended March 31,
	2020		2019
Lease cost ⁽¹⁾
Finance lease cost:
Amortization of leased assets	$	870	$	640
Interest on lease liabilities	104		44
Operating lease cost	579		1,139
Short-term lease cost	521		439
Total lease cost	$	2,074	$	2,262

⁽¹⁾ The Company had no variable lease costs or sublease income for the three months ended March 31, 2020 and 2019.



	Three Months Ended March 31,
	2020			2019
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	2,009		$	2,258
Operating cash flows from finance leases	$	106		$	44
Operating cash flows from operating leases	$	1,100		$	1,579
Financing cash flows from finance leases	$	803		$	635
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	224

Lease Term and Discount Rate
Weighted-average remaining lease term in months - finance leases	28.0			48.3
Weighted-average remaining lease term in months - operating leases	102.4			80.4
Weighted-average discount rate - finance leases	5.4		%	3.2		%
Weighted-average discount rate - operating leases	11.3		%	10.5		%

The Company has elected to show net instead of gross amounts for right-of-use assets and liabilities within its Condensed Consolidated Statements of Cash Flows.

The following table summarizes the maturity of the Company’s lease liabilities on an undiscounted cash flow basis and a reconciliation to the lease liabilities recognized in the Company’s Condensed Consolidated Balance Sheet as of March 31, 2020:



	Finance Leases			Operating Leases
Lease cost
Remainder of 2020	$	2,716		$	1,520
2021	2,985			1,495
2022	1,729			1,372
2023	184			1,126
2024	—			1,014
Thereafter	—			5,029
Total future minimum lease payments	$	7,614		$	11,556
Imputed interest	(465		)	(4,301		)
Present value of future minimum lease payments	$	7,149		$	7,255

As of March 31, 2020, the Company had no leases with future commencement dates that will create significant rights or obligations for the Company.

Leases

As of March 31, 2020 and December 31, 2019, the Company had the following right-of-use assets and lease liabilities within the Company’s Condensed Consolidated Balance Sheets:



		March 31, 2020		December 31, 2019
Assets	Balance Sheet Classification
Financing lease assets	Property, plant, and equipment, net	$	8,853	$	9,718
Operating lease right-of-use assets	Other non-current assets	7,255		8,678
Total lease assets		$	16,108	$	18,396

Liabilities	Balance Sheet Classification
Financing lease liabilities - current	Current portion of long-term debt	$	3,322	$	3,275
Operating lease liabilities - current	Accrued expenses and other current liabilities	1,462		1,813
Financing lease liabilities - long-term	Long-term debt	3,827		4,674
Operating lease liabilities - long-term	Other non-current liabilities	5,793		6,866
Total lease liabilities		$	14,404	$	16,628

Total lease costs and other lease information for the three months ended March 31, 2020 and 2019 included the following:



	Three Months Ended March 31,
	2020		2019
Lease cost ⁽¹⁾
Finance lease cost:
Amortization of leased assets	$	870	$	640
Interest on lease liabilities	104		44
Operating lease cost	579		1,139
Short-term lease cost	521		439
Total lease cost	$	2,074	$	2,262

⁽¹⁾ The Company had no variable lease costs or sublease income for the three months ended March 31, 2020 and 2019.



	Three Months Ended March 31,
	2020			2019
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	2,009		$	2,258
Operating cash flows from finance leases	$	106		$	44
Operating cash flows from operating leases	$	1,100		$	1,579
Financing cash flows from finance leases	$	803		$	635
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	224

Lease Term and Discount Rate
Weighted-average remaining lease term in months - finance leases	28.0			48.3
Weighted-average remaining lease term in months - operating leases	102.4			80.4
Weighted-average discount rate - finance leases	5.4		%	3.2		%
Weighted-average discount rate - operating leases	11.3		%	10.5		%

The Company has elected to show net instead of gross amounts for right-of-use assets and liabilities within its Condensed Consolidated Statements of Cash Flows.



	Finance Leases			Operating Leases
Lease cost
Remainder of 2020	$	2,716		$	1,520
2021	2,985			1,495
2022	1,729			1,372
2023	184			1,126
2024	—			1,014
Thereafter	—			5,029
Total future minimum lease payments	$	7,614		$	11,556
Imputed interest	(465		)	(4,301		)
Present value of future minimum lease payments	$	7,149		$	7,255

As of March 31, 2020, the Company had no leases with future commencement dates that will create significant rights or obligations for the Company.