Lease Commitments

12 Months Ended

Dec. 31, 2019

Note 9 — Lease Commitments

The Company recognizes right-of-use assets ("ROU Assets") and lease liabilities (“Lease Liabilities”) for automobiles, office buildings, IT equipment, and small storage units for the temporary storage of operational equipment. The Company's leases have remaining lease terms ranging from less than 1 year to 10 years, and have extension options ranging from 1 year to 5 years. Most leases include the option to terminate the lease within 1 year.

Upon adopting ASC 842, the Company made accounting policy elections using practical expedients offered under the guidance to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term. Further, the cost associated with variable lease payments is recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and Lease Liabilities. The value of the Company’s ROU Assets is determined as the non-depreciated fair value of its leasing arrangements and is recorded to Property and Equipment, net on the Company's Consolidated Balance Sheet. The value of the Company’s Lease Liabilities is the present value of fixed lease payments not yet paid, discounted using either the rate implicit in the lease contract if that rate can be determined, or the Company’s incremental borrowing rate ("IBR"). As of December 31, 2019, the Company's short-term lease obligations were $5.2 million and were recorded in Other accrued expenses with the remaining balance recognized in Lease liability — long-term portion on the Company's Consolidated Balance Sheet. Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company's ROU Assets or Lease Liabilities. The Company's IBR is determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Components of lease expense required by ASC 842 are presented below for the year ended December 31, 2019.


	Year ended December 31, 2019
	(in thousands)
Lease Cost¹
Operating lease cost	$	4,699
Short-term lease cost	830
Variable lease cost	591
Total lease cost	$	6,120

^1.ASC 842 was adopted as of January 1, 2019. As such, prior period numbers remain unadjusted and in accordance with prior U.S. GAAP.

Supplemental information required by ASC 842 is presented below for the year ended December 31, 2019.


	Year ended December 31, 2019
	(dollar amounts in thousands)
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,908
ROU Assets obtained in exchange for lease obligations	$	21,366
Weighted-average remaining lease term — operating leases	6.2 years
Weighted-average discount rate — operating leases	4.7		%

During the year ended December 31, 2019, the Company's ROU Assets and Lease Liabilities were both reduced by $0.3 million due to lease cancellations which are accounted for as noncash transactions.

The following is a schedule by calendar year of future undiscounted minimum lease payments under operating leases that have remaining terms as of December 31, 2019:


Period/Year	Operating Leases
	(in thousands)
2020	$	5,179
2021	3,592
2022	2,312
2023	1,277
2024	1,285
Thereafter	5,514
Total undiscounted minimum lease payments¹	$	19,159

^1.As of December 31, 2019, the Company's total Lease Liabilities in the Consolidated Balance Sheet were $16.9 million, net of imputed interest of $2.3 million.

Total expense for all operating leases for the years ended December 31, 2018 and 2017 was as follows:


		Year Ended December 31,
		2018		2017
	(in thousands)
Operating lease expense		$	4,039	$	3,833