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Leases

9 Months Ended

Sep. 30, 2020

(3) Leases

We have various lease agreements for our facilities, equipment and vehicles with remaining lease terms ranging from one to sixteen years. We determine if an arrangement contains a lease at inception. Some leases include the options to purchase, terminate or extend for one or more years; these options are included in the right-of-use (“ROU”) asset and liability lease term when it is reasonably certain an option will be exercised. Our leases do not contain any material residual value guarantees or material restrictive covenants.

Most of our leases do not provide an implicit rate, therefore we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of the future lease payments.

Certain of our leases include variable costs. Variable costs include non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the ROU asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the ROU asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

Components of lease cost (income) were as follows:


	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2020		2019		2020		2019
Operating lease cost	$	3,014	$	3,646	$	9,020	$	11,110
Loss due to remeasurement	1,627		—		1,627		—
Finance lease cost - amortization expense	241		174		681		592
Finance lease cost - interest expense	167		114		495		344
Short-term lease cost	52		30		105		80
Variable lease cost	205		102		498		137
Sublease income	(155)		(33)		(459)		(33)
Total	$	5,151	$	4,033	$	11,967	$	12,230

Balance sheet classifications at September 30, 2020 and December 31, 2019 are summarized below:


	2020						2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities		Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	36,391	$	8,463	$	34,398	$	28,571	$	9,231	$	24,835
Finance Leases	7,975		968		10,123		8,319		338		10,567
Total	$	44,366	$	9,431	$	44,521	$	36,890	$	9,569	$	35,402

On September 1, 2020, we closed two facilities in connection with our restructuring plan. These facilities occupied leased office space that terminates in 2024. In conjunction with these closings, we recorded impairment charges totaling $1,627 related to our ROU assets and impairment charges totaling $1,953 related to leasehold improvements.

Our future minimum lease payments as of September 30, 2020 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:


	September 30, 2020
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2021	$	10,640	$	1,671
2022	8,846		1,630
2023	7,162		1,622
2024	6,308		1,534
2025	4,552		1,427
Thereafter	15,511		6,881
Total lease payments	53,019		14,765
Less: imputed interest	(10,158)		(3,674)
Present value of lease liabilities	$	42,861	$	11,091

Supplemental cash flow information related to our operating leases for the periods ending September 30, 2020 and September 30, 2019 were as follows:


(in thousands)	September 30, 2020		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	9,654	$	11,657
Operating cash outflow from finance leases	$	493	$	343
Financing cash outflow from finance leases	$	186	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2020, were as follows:

September 30, 2020

Operating

Financing

Weighted-average remaining lease term

6.1 years

9.8 years

Weighted-average discount rate

6.26

5.97

Leases