Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases, Finance

7. Leases

Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, included in other assets and payables and other liabilities, respectively, on its consolidated balance sheets as of September 30, 2019. The Company does not currently have any significant finance leases in which it is the lessee. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date. ROU assets are further adjusted for lease incentives. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in general and administrative expenses in the consolidated statements of operations. The Company’s leases relate primarily to office space and equipment, with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options, which typically range from 3 to 5 years, at the then fair market rental rates. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. As of September 30, 2019, operating lease ROU assets and liabilities were $126 and $137, respectively.

The table below summarizes the Company’s net lease cost:

	Successor
	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	10		$	29
Short-term lease cost(1)	—			1
Sublease income	(1		)	(2		)
Net lease cost	$	9		$	28

⁽¹⁾  Amount for three months ended September 30, 2019 is less than $1.

The table below summarizes other information related to the Company’s operating leases:

	Successor
	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8		$	21
Leased assets obtained in exchange for new operating lease liabilities(1)	$	(5	)	$	150
Weighted average remaining lease term - operating leases, in years	5.7			5.7
Weighted average discount rate - operating leases	5.0		%	5.0		%

⁽¹⁾  The reduction in the three months ended September 30, 2019 is due to a modification of lease agreements.

Maturities of operating lease liabilities as of September 30, 2019 are as follows:

Year Ending December 31,	Operating Leases
2019(1)	$	10
2020	39
2021	30
2022	22
2023	16
2024 and thereafter	45
Total future minimum lease payments	162
Less: imputed interest	25
Total operating lease liabilities	$	137

⁽¹⁾  Excluding the nine months ended September 30, 2019.

Finance lease liability was $3as of September 30, 2019, the majority of which matures within a year.

Leases, Operating

7. Leases

Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, included in other assets and payables and other liabilities, respectively, on its consolidated balance sheets as of September 30, 2019. The Company does not currently have any significant finance leases in which it is the lessee. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date. ROU assets are further adjusted for lease incentives. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in general and administrative expenses in the consolidated statements of operations. The Company’s leases relate primarily to office space and equipment, with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options, which typically range from 3 to 5 years, at the then fair market rental rates. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. As of September 30, 2019, operating lease ROU assets and liabilities were $126 and $137, respectively.

The table below summarizes the Company’s net lease cost:

	Successor
	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	$	10		$	29
Short-term lease cost(1)	—			1
Sublease income	(1		)	(2		)
Net lease cost	$	9		$	28

⁽¹⁾  Amount for three months ended September 30, 2019 is less than $1.

The table below summarizes other information related to the Company’s operating leases:

	Successor
	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8		$	21
Leased assets obtained in exchange for new operating lease liabilities(1)	$	(5	)	$	150
Weighted average remaining lease term - operating leases, in years	5.7			5.7
Weighted average discount rate - operating leases	5.0		%	5.0		%

⁽¹⁾  The reduction in the three months ended September 30, 2019 is due to a modification of lease agreements.

Maturities of operating lease liabilities as of September 30, 2019 are as follows:

Year Ending December 31,	Operating Leases
2019(1)	$	10
2020	39
2021	30
2022	22
2023	16
2024 and thereafter	45
Total future minimum lease payments	162
Less: imputed interest	25
Total operating lease liabilities	$	137

⁽¹⁾  Excluding the nine months ended September 30, 2019.

Finance lease liability was $3as of September 30, 2019, the majority of which matures within a year.