Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.2
Leases
3 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases Leases
The Company’s operating leases are primarily for distribution facilities, and sales and administrative offices. These operating leases have lease periods expiring between 2019 and 2061.
The Company’s finance leases are primarily for vehicles and certain network equipment. These leases expire between 2019 and 2024. Many leases require the Company to pay certain executory costs (taxes, insurance, and maintenance) and contain renewal and purchase options. The Company does not assume renewals in the determination of the lease term unless renewals are deemed to be reasonably assured at lease commencement. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease expense for the three months ended June 30, 2019 are as follows (amounts in thousands):
 
Three Months Ended June 30, 2019
Operating lease expense
$
2,404

Variable lease expense and other, net (1)
277

Short-term lease expense

Finance lease expense
 
Amortization of right-of-use assets
251

Interest
16

Total lease expense
$
2,948

__________________
(1) Predominantly includes common area maintenance and parking expenses.
Supplemental balance sheet information related to operating and finance leases as of June 30, 2019 is as follows (amounts in thousands, except lease term and discount rate):
 
Balance Sheet Location
June 30, 2019
Lease assets
 
 
Operating lease ROU assets
Other assets
$
32,169

Finance lease ROU assets (1)
Property, plant and equipment, net of accumulated depreciation
2,297

 
 
$
34,466

 
 
 
Lease liabilities
 
 
Current operating lease liabilities
Accrued expenses
$
8,061

Current finance lease liabilities
Accrued expenses
1,000

Non-current operating lease liabilities
Other non-current obligations
23,646

Non-current finance lease liabilities
Other non-current obligations
1,328

 
 
$
34,035

 
 
 
Weighted average remaining lease term
 
 
Operating leases
 
6.43 years

Finance leases
 
2.59 years

 
 
 
Weighted average discount rate
 
 
Operating leases
 
4.72
%
Finance leases
 
5.63
%
_________________
(1) Finance lease ROU assets are shown net of accumulated depreciation of $4.5 million.
Supplemental cash flow information related to leases for the three months ended June 30, 2019 is as follows (amounts in thousands):
 
Three Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
 
Operating cash flows used for operating leases
$
2,922

Operating cash flows used for finance leases
30

Financing cash flows used for finance leases
367

 
$
3,319

 
 
Lease liabilities arising from obtaining ROU assets
 
Operating leases
$
1,975

Finance leases
405

 
$
2,380


Maturities of operating and finance lease liabilities as of June 30, 2019 were as follows (amounts in thousands):
Fiscal year ending March 31,
Operating Lease Liabilities
 
Finance Lease Liabilities
2020 (nine months ending March 31, 2020)
$
7,026

 
$
893

2021
7,546

 
834

2022
4,431

 
513

2023
4,035

 
225

2024
3,426

 
42

Thereafter
11,501

 
8

Total undiscounted cash flows
$
37,965

 
$
2,515

Less imputed interest
(6,258
)
 
(187
)
Present value of lease liabilities
$
31,707

 
$
2,328


Leases Leases
The Company’s operating leases are primarily for distribution facilities, and sales and administrative offices. These operating leases have lease periods expiring between 2019 and 2061.
The Company’s finance leases are primarily for vehicles and certain network equipment. These leases expire between 2019 and 2024. Many leases require the Company to pay certain executory costs (taxes, insurance, and maintenance) and contain renewal and purchase options. The Company does not assume renewals in the determination of the lease term unless renewals are deemed to be reasonably assured at lease commencement. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease expense for the three months ended June 30, 2019 are as follows (amounts in thousands):
 
Three Months Ended June 30, 2019
Operating lease expense
$
2,404

Variable lease expense and other, net (1)
277

Short-term lease expense

Finance lease expense
 
Amortization of right-of-use assets
251

Interest
16

Total lease expense
$
2,948

__________________
(1) Predominantly includes common area maintenance and parking expenses.
Supplemental balance sheet information related to operating and finance leases as of June 30, 2019 is as follows (amounts in thousands, except lease term and discount rate):
 
Balance Sheet Location
June 30, 2019
Lease assets
 
 
Operating lease ROU assets
Other assets
$
32,169

Finance lease ROU assets (1)
Property, plant and equipment, net of accumulated depreciation
2,297

 
 
$
34,466

 
 
 
Lease liabilities
 
 
Current operating lease liabilities
Accrued expenses
$
8,061

Current finance lease liabilities
Accrued expenses
1,000

Non-current operating lease liabilities
Other non-current obligations
23,646

Non-current finance lease liabilities
Other non-current obligations
1,328

 
 
$
34,035

 
 
 
Weighted average remaining lease term
 
 
Operating leases
 
6.43 years

Finance leases
 
2.59 years

 
 
 
Weighted average discount rate
 
 
Operating leases
 
4.72
%
Finance leases
 
5.63
%
_________________
(1) Finance lease ROU assets are shown net of accumulated depreciation of $4.5 million.
Supplemental cash flow information related to leases for the three months ended June 30, 2019 is as follows (amounts in thousands):
 
Three Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
 
Operating cash flows used for operating leases
$
2,922

Operating cash flows used for finance leases
30

Financing cash flows used for finance leases
367

 
$
3,319

 
 
Lease liabilities arising from obtaining ROU assets
 
Operating leases
$
1,975

Finance leases
405

 
$
2,380


Maturities of operating and finance lease liabilities as of June 30, 2019 were as follows (amounts in thousands):
Fiscal year ending March 31,
Operating Lease Liabilities
 
Finance Lease Liabilities
2020 (nine months ending March 31, 2020)
$
7,026

 
$
893

2021
7,546

 
834

2022
4,431

 
513

2023
4,035

 
225

2024
3,426

 
42

Thereafter
11,501

 
8

Total undiscounted cash flows
$
37,965

 
$
2,515

Less imputed interest
(6,258
)
 
(187
)
Present value of lease liabilities
$
31,707

 
$
2,328