Leases (Notes)

9 Months Ended

Sep. 30, 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 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 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 is now 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 September 30, 2019, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(in thousands)
2019 (Remaining three months)	$	1,892		$	52		$	1,944
2020	6,173			201			6,374
2021	4,127			190			4,317
2022	2,620			160			2,780
2023	1,746			99			1,845
Thereafter	2,646			77			2,723
Total	19,204			779			19,983
Less: present value discount*	(2,824		)	(91		)	(2,915		)
Present value of lease liabilities	16,380			688			17,068
Less: current portion of lease liabilities	(5,578		)	(177		)	(5,755		)
Total long-term lease liabilities	$	10,802		$	511		$	11,313
* The discount rate used was the incremental borrowing rate.

The company's net assets recorded under operating and finance leases were $17.0 million as of September 30, 2019. The lease cost recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative, is summarized as follows:

	Three Months Ended			Nine Months Ended
	September 30, 2019
	(in thousands)
Operating Lease Cost	$	2,016		$	6,265
Finance Lease Cost:
Amortization of Lease Assets	32			76
Interest on Lease liabilities	9			24
Finance Lease Cost	41			100
Sublease Income	(99		)	(521		)
Total Net Lease Cost	$	1,958		$	5,844

Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:

	September 30, 2019
Weighted Average Lease Term - Operating Leases	3.85 years
Weighted Average Lease Term - Finance Leases	4.23 years
Weighted Average Discount Rate - Operating Leases	8.38	%
Weighted Average Discount Rate - Finance Leases	7.31	%

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 September 30, 2019, our lease liability of $17.1 million does not include certain arrangements, which are primarily airport leases that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $107.8 million as follows:

Year	Commitments
	(in thousands)
2019 (Remaining three months)	$	6,886
2020	27,543
2021	26,050
2022	23,739
2023	23,195
Thereafter	398
Total	$	107,811

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 September 30, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases for the nine months ended September 30, 2019 and 2018 was $28.0 million and $14.7 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 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 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 is now 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 September 30, 2019, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(in thousands)
2019 (Remaining three months)	$	1,892		$	52		$	1,944
2020	6,173			201			6,374
2021	4,127			190			4,317
2022	2,620			160			2,780
2023	1,746			99			1,845
Thereafter	2,646			77			2,723
Total	19,204			779			19,983
Less: present value discount*	(2,824		)	(91		)	(2,915		)
Present value of lease liabilities	16,380			688			17,068
Less: current portion of lease liabilities	(5,578		)	(177		)	(5,755		)
Total long-term lease liabilities	$	10,802		$	511		$	11,313
* The discount rate used was the incremental borrowing rate.

The company's net assets recorded under operating and finance leases were $17.0 million as of September 30, 2019. The lease cost recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative, is summarized as follows:

	Three Months Ended			Nine Months Ended
	September 30, 2019
	(in thousands)
Operating Lease Cost	$	2,016		$	6,265
Finance Lease Cost:
Amortization of Lease Assets	32			76
Interest on Lease liabilities	9			24
Finance Lease Cost	41			100
Sublease Income	(99		)	(521		)
Total Net Lease Cost	$	1,958		$	5,844

Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:

	September 30, 2019
Weighted Average Lease Term - Operating Leases	3.85 years
Weighted Average Lease Term - Finance Leases	4.23 years
Weighted Average Discount Rate - Operating Leases	8.38	%
Weighted Average Discount Rate - Finance Leases	7.31	%

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 September 30, 2019, our lease liability of $17.1 million does not include certain arrangements, which are primarily airport leases that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $107.8 million as follows:

Year	Commitments
	(in thousands)
2019 (Remaining three months)	$	6,886
2020	27,543
2021	26,050
2022	23,739
2023	23,195
Thereafter	398
Total	$	107,811

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 September 30, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases for the nine months ended September 30, 2019 and 2018 was $28.0 million and $14.7 million, respectively.