LEASES

Effective January 1, 2019, the Company adopted FASB ASC 842 using the adoption-date transition provision rather than at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1, 2019 but without retrospective application. The Company also elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components. The Company also made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. The impact of FASB ASC 842 on the Consolidated Balance Sheet beginning January 1, 2019 was through the recognition of operating lease assets and corresponding operating lease liabilities of $70.5 million. No impact was recorded to the Consolidated Statement of Operations or beginning retained earnings.

The Company’s operating lease portfolio includes operational field locations, administrative offices, equipment, vehicles and information technology equipment. The majority of the Company’s leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for 5 years or more. Right-of-use assets are presented within “Operating lease assets” on the Consolidated Balance Sheet. The current portion of operating lease liabilities are presented within “Accrued expenses”, and the non-current portion of operating lease liabilities are presented within “Operating lease liabilities” on the Consolidated Balance Sheet.

Operating lease assets and liabilities are recognized based on the present value of lease payments over the lease term at inception. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. A portion of the Company’s real estate, equipment and vehicle leases is subject to periodic changes in the Consumer Price Index, LIBOR or other market index. The changes to these indexes are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. Because most leases do not provide an explicit rate of return, the Company utilizes its incremental secured borrowing rate on a lease-by-lease basis in determining the present value of lease payments at the commencement date of the lease.

The following table presents the components of lease expense (in thousands):



	Quarter Ended March 31, 2019
Operating lease cost	$	5,452
Short-term lease cost	7,239
Total lease cost	$	12,691

Supplemental cash flow information related to leases was as follows (in thousands):



	Quarter Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,462

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	6,126

Supplemental balance sheet information related to leases was as follows (in thousands):



	March 31, 2019⁽¹⁾
Operating leases:
Operating lease assets	$	69,042

Accrued expenses	$	15,174
Other liabilities	54,404
Total operating lease liabilities	$	69,578

Weighted-average remaining lease term (in years)	5.78
Weighted-average discount rate	6.31		%

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⁽¹⁾	Amounts exclude operating lease assets of $2.1 million, accrued expenses of $0.9 million, and other liabilities of $1.2 million that were classified as held for sale at March 31, 2019 (see Note 5).

Operating lease liabilities under non-cancellable leases were as follows (in thousands):



	March 31, 2019
Nine months ended December 31, 2019	$	14,615
2020	16,496
2021	13,954
2022	11,223
2023	8,916
Thereafter	18,891
Total undiscounted operating lease liability	84,095
Less: Imputed interest	(14,517		)
Total discounted operating lease liability	$	69,578

Minimum rental commitments under non-cancellable leases as of December 31, 2018 for years 2019 through 2023 were $19.8 million, $15.1 million, $11.5 million, $8.1 million and $5.4 million, respectively, and $7.2 million thereafter.