Leases Leases (Notes)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Lessee, Operating Leases

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 December 31, 2019, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(In thousands)
2020	$	7,289		$	201		$	7,490
2021	5,293			190			5,483
2022	3,768			160			3,928
2023	2,900			99			2,999
2024	1,591			77			1,668
Thereafter	1,591			—			1,591
Total	22,432			727			23,159
Less: present value discount*	(3,281		)	(87		)	(3,368		)
Present value of lease liabilities	19,151			640			19,791
Less: current portion of lease liabilities	(5,955		)	(164		)	(6,119		)
Total long-term lease liabilities	$	13,196		$	476		$	13,672
* The discount rate used was the relevant incremental borrowing rate in each of the jurisdictions wherein the leased properties are located

The company's net assets recorded under operating and finance leases were $19.8 million as of December 31, 2019. The lease cost recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative, is summarized as follows:

	December 31, 2019
	(In thousands)
Operating Lease Cost	$	8,613
Finance Lease Cost:
Amortization of Lease Assets	121
Interest on Lease liabilities	36
Finance Lease Cost	157
Sublease Income	(654		)
Total Net Lease Cost	$	8,116

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

	December 31, 2019
Weighted Average Lease Term - Operating Leases	3.90 years
Weighted Average Lease Term - Finance Leases	4.02 years
Weighted Average Discount Rate - Operating Leases	8.44	%
Weighted Average Discount Rate - Finance Leases	7.28	%

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 December 31, 2019, our lease liability of $19.2 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 $97.8 million as follows:

Year	Commitments
	(In thousands)
2020	$	27,496
2021	25,831
2022	22,713
2023	21,734
2024	—
Thereafter	—
Total	$	97,774

The Company leases office space under non-cancelable operating leases with expiration dates ranging through 2028, 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 December 31, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases during the year ended December 31, 2019 and 2018 was $37.8 million and $22.3 million, respectively.

Lessee, Finance Leases

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 December 31, 2019, the maturity of lease liabilities under Topic 842 are as follows:

Year	Operating Leases			Financing Leases			Total
	(In thousands)
2020	$	7,289		$	201		$	7,490
2021	5,293			190			5,483
2022	3,768			160			3,928
2023	2,900			99			2,999
2024	1,591			77			1,668
Thereafter	1,591			—			1,591
Total	22,432			727			23,159
Less: present value discount*	(3,281		)	(87		)	(3,368		)
Present value of lease liabilities	19,151			640			19,791
Less: current portion of lease liabilities	(5,955		)	(164		)	(6,119		)
Total long-term lease liabilities	$	13,196		$	476		$	13,672
* The discount rate used was the relevant incremental borrowing rate in each of the jurisdictions wherein the leased properties are located

The company's net assets recorded under operating and finance leases were $19.8 million as of December 31, 2019. The lease cost recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative, is summarized as follows:

	December 31, 2019
	(In thousands)
Operating Lease Cost	$	8,613
Finance Lease Cost:
Amortization of Lease Assets	121
Interest on Lease liabilities	36
Finance Lease Cost	157
Sublease Income	(654		)
Total Net Lease Cost	$	8,116

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

	December 31, 2019
Weighted Average Lease Term - Operating Leases	3.90 years
Weighted Average Lease Term - Finance Leases	4.02 years
Weighted Average Discount Rate - Operating Leases	8.44	%
Weighted Average Discount Rate - Finance Leases	7.28	%

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 December 31, 2019, our lease liability of $19.2 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 $97.8 million as follows:

Year	Commitments
	(In thousands)
2020	$	27,496
2021	25,831
2022	22,713
2023	21,734
2024	—
Thereafter	—
Total	$	97,774

The Company leases office space under non-cancelable operating leases with expiration dates ranging through 2028, 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 December 31, 2019 and 2018. Rental expense for office and airport facilities and certain equipment subject to operating leases during the year ended December 31, 2019 and 2018 was $37.8 million and $22.3 million, respectively.