Leases (Notes)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Leases

In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842). This new accounting guidance is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU requires organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike former GAAP which requires only financing leases to be recognized on the balance sheet the new ASU requires both types of leases (i.e., operating and financing) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The financing lease will be accounted for in substantially the same manner as capital leases were accounted for under the previous guidance. For operating leases there will have to be the recognition of a lease liability and a lease asset for all such leases greater than one year in term.

The company adopted Topic 842 effective January 1, 2019 using a modified retrospective method and did not restate comparative periods. The Company elected to adopt the package of practical expedients; accordingly, the Company retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. The company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2029, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. As of March 31, 2019 the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(in thousands)
2019 (Remaining nine months)	$	5,732		$	77		$	5,809
2020	5,821			96			5,917
2021	4,057			92			4,149
2022	2,546			67			2,613
2023	1,658			15			1,673
Thereafter	2,562			—			2,562
Total	22,376			347			22,723
Less: present value discount*	(3,606		)	(60		)	(3,666		)
Present Value of Lease liabilities	$	18,770		$	287		$	19,057
Less: current portion of lease liabilities	(6,046		)	(78		)	(6,124		)
Total long-term lease liabilities	$	12,724		$	210		$	12,934
* The discount rate used was the incremental borrowing rate.

The company's net assets recorded under operating and finance leases were $19.0 million as of March 31, 2019. The lease cost recognized in our condensed consolidated income statements of operations is summarized as follows:

	March 31, 2019
(in thousands)
Operating Lease Cost	2,045
Finance Lease Cost:
Amortization of Lease Assets	20
Interest on Lease liabilities	8
Finance Lease Cost	28
Sublease Income	(265		)
Total Net Lease Cost	$	1,808

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	March 31, 2019
Weighted Average Lease Term - Operating Leases	3.93 years
Weighted Average Lease Term - Finance Leases	3.57 years
Weighted Average Discount Rate - Operating Leases	8.4	%
Weighted Average Discount Rate - Finance Leases	11.0	%

Commitments for minimum rentals under non-cancellable leases, under the legacy guidance in ASC 840 as of December 31, 2018 were as follows:

Year	Operating Leases			Financing Leases
(in thousands)
2019	$	34,189		$	266
2020	32,093			96
2021	26,675			89
2022	23,355			67
2023	21,890			15
Thereafter	3,299			—
Total	$	141,501		$	533
Less: sublease income	(1,091		)
Net lease payments	$	140,410
Less: amount representing interest				(63		)
Present value of obligations under financing leases				$	470
Less: current portion				(239		)
Long-term obligations				$	231

As of March 31, 2019 our lease liability of $19.1 million does not include certain arrangements which do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $104.1 million as follows:

Year	Commitments
(in thousands)
2019 (Remaining nine months)	$	17,904
2020	23,872
2021	22,372
2022	20,042
2023	19,520
Thereafter	371
Total	$	104,081

The Company leases office space under non-cancelable operating leases with expiration dates ranging through 2029, with various renewal options. Finance leases range from three to five years and are primarily for office equipment. There were multiple assets under various individual finance leases at March 31, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases for the three months ended March 31, 2019 and 2018 was $9.2 million and $1.9 million, respectively.

Lessee, Finance Leases [Text Block]

Leases

In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842). This new accounting guidance is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU requires organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike former GAAP which requires only financing leases to be recognized on the balance sheet the new ASU requires both types of leases (i.e., operating and financing) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The financing lease will be accounted for in substantially the same manner as capital leases were accounted for under the previous guidance. For operating leases there will have to be the recognition of a lease liability and a lease asset for all such leases greater than one year in term.

The company adopted Topic 842 effective January 1, 2019 using a modified retrospective method and did not restate comparative periods. The Company elected to adopt the package of practical expedients; accordingly, the Company retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. The company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2029, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. As of March 31, 2019 the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(in thousands)
2019 (Remaining nine months)	$	5,732		$	77		$	5,809
2020	5,821			96			5,917
2021	4,057			92			4,149
2022	2,546			67			2,613
2023	1,658			15			1,673
Thereafter	2,562			—			2,562
Total	22,376			347			22,723
Less: present value discount*	(3,606		)	(60		)	(3,666		)
Present Value of Lease liabilities	$	18,770		$	287		$	19,057
Less: current portion of lease liabilities	(6,046		)	(78		)	(6,124		)
Total long-term lease liabilities	$	12,724		$	210		$	12,934
* The discount rate used was the incremental borrowing rate.

The company's net assets recorded under operating and finance leases were $19.0 million as of March 31, 2019. The lease cost recognized in our condensed consolidated income statements of operations is summarized as follows:

	March 31, 2019
(in thousands)
Operating Lease Cost	2,045
Finance Lease Cost:
Amortization of Lease Assets	20
Interest on Lease liabilities	8
Finance Lease Cost	28
Sublease Income	(265		)
Total Net Lease Cost	$	1,808

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	March 31, 2019
Weighted Average Lease Term - Operating Leases	3.93 years
Weighted Average Lease Term - Finance Leases	3.57 years
Weighted Average Discount Rate - Operating Leases	8.4	%
Weighted Average Discount Rate - Finance Leases	11.0	%

Commitments for minimum rentals under non-cancellable leases, under the legacy guidance in ASC 840 as of December 31, 2018 were as follows:

Year	Operating Leases			Financing Leases
(in thousands)
2019	$	34,189		$	266
2020	32,093			96
2021	26,675			89
2022	23,355			67
2023	21,890			15
Thereafter	3,299			—
Total	$	141,501		$	533
Less: sublease income	(1,091		)
Net lease payments	$	140,410
Less: amount representing interest				(63		)
Present value of obligations under financing leases				$	470
Less: current portion				(239		)
Long-term obligations				$	231

As of March 31, 2019 our lease liability of $19.1 million does not include certain arrangements which do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $104.1 million as follows:

Year	Commitments
(in thousands)
2019 (Remaining nine months)	$	17,904
2020	23,872
2021	22,372
2022	20,042
2023	19,520
Thereafter	371
Total	$	104,081

The Company leases office space under non-cancelable operating leases with expiration dates ranging through 2029, with various renewal options. Finance leases range from three to five years and are primarily for office equipment. There were multiple assets under various individual finance leases at March 31, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases for the three months ended March 31, 2019 and 2018 was $9.2 million and $1.9 million, respectively.