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Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

Note 13. Leases

Our operating lease activities consist of leases for office space and equipment. Our finance lease activities consist of leases for hardware which we will own at the end of the lease agreement. None of our lease agreements include variable lease payments. See discussion of the January 1, 2019 implementation impact at Note 1. Basis of Presentation and Summary of Significant Accounting Policies.

Supplemental balance sheet information as of September 30, 2019 for our leases is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

Leases

    

Classification

    

September 30, 2019

    

December 31, 2018

Assets

 

  

 

 

  

 

 

  

Noncurrent:

 

  

 

 

  

 

 

  

Finance

 

Office and other equipment, net of accumulated depreciation and amortization

 

$

5,826

 

$

14,564

Operating

 

Operating lease right-of-use assets

 

 

500,615

 

 

592,065

Total leased assets

 

  

 

$

506,441

 

$

606,629

 

 

 

 

 

 

 

 

 

Liabilities

 

  

 

 

  

 

 

  

Current:

 

  

 

 

  

 

 

  

Finance lease

 

Finance lease liabilities

 

$

3,720

 

$

9,299

Noncurrent:

 

  

 

 

  

 

 

  

Operating lease

 

Operating lease liabilities

 

 

554,921

 

 

646,519

Total leased liabilities

 

  

 

$

558,641

 

$

655,818

 

The difference between assets and liabilities includes a $5,266 adjust to the finance lease and a $54,454 adjustment to an operating lease, both at the beginning of the period as part of the ASC 842 implementation adjustment.

Our operating and finance leases expenses for the three and nine months ended September 30, 2019 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

Leases

    

Classification

    

2019

    

2018

    

2019

    

2018

Operating

 

General and administrative expense

 

$

3,344

 

$

4,609

 

$

10,453

 

$

13,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease cost:

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

Amortization expense

 

 

2,914

 

 

1,120

 

 

8,739

 

 

3,360

 

 

Interest expense

 

 

111

 

 

111

 

 

333

 

 

333

 

 

Minimum contractual obligations for our leases as of September 30, 2019 are as follows:

 

 

 

 

 

 

 

 

 

    

Operating Leases

    

Finance Lease

2019 (excluding nine months ended September 30, 2019)

 

$

39,079

 

$

2,133

2020

 

 

160,958

 

 

2,133

2021

 

 

164,081

 

 

 —

2022

 

 

156,608

 

 

 —

2023

 

 

161,674

 

 

 —

2024

 

 

13,508

 

 

 —

Total remaining lease payments

 

$

695,908

 

$

4,266

 

Supplemental cash flow information related to leases was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

 

    

2019

    

2018

    

2019

    

2018

Cash payments

 

 

  

 

 

  

 

 

  

 

 

  

Operating cash flows from operating leases

 

$

(190)

 

$

1,076

 

$

(148)

 

$

3,228

Operating cash flows from finance leases

 

 

1,164

 

 

(628)

 

 

2,328

 

 

(1,258)

Financing cash flows from finance leases

 

 

(111)

 

 

(111)

 

 

(333)

 

 

(333)

 

The weighted average remaining lease terms of our finance and operating leases were six months and approximately three years, respectively and as of September 30, 2019. As of December 31, 2018 the weighted average remaining lease terms of our finance and operating leases were fifteen months and three and a half years, respectively. The weighted average discount rates used to determine the lease liabilities for finance leases was 6% and operating leases was 8% as of September 30, 2019 and December 31, 2018, respectively. The discount rate used for finance leases was based on the rates implicit in the leases. The discount rate used for operating leases was based on our incremental borrowing rate.