Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

14. Leases

The Company has operating and finance leases for real estate and equipment. Generally, the leases have remaining terms of one month to ten years. Leases with an initial term of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

In addition, some leases include options to terminate the lease. The Company generally negotiates these termination clauses in anticipation of any changes in market conditions; however, because a termination option requires approval from management, the Company assumes the majority of its termination options will not be exercised when determining the lease term.

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease cost. Lease expense is recorded in operating expenses in the results of operations.

Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable portion of lease payments is not included in the computation of the right of use assets or lease liabilities. Rather, variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred and are included in "Cost of sales" and "Selling, general, and administrative" within the condensed consolidated statements of income (loss).

The Company does not include significant restrictions or covenants in its lease agreements, and residual value guarantees are generally not included within its operating leases.

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease expense	$	30	$	64
Short-term lease expense	2		4
Variable lease expense	12		20
Total lease expense	$	44	$	88

Other information related to leases was as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	41	$	82

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating leases
Operating lease right-of-use assets (a)	$	344
Other current liabilities (b)	$	99
Other long-term liabilities (c)	239
Total operating lease liabilities	$	338
Finance leases
Property, plant and equipment, gross	$	2
Accumulated depreciation	—
Total finance lease right-of-use assets	$	2
Other current liabilities (b)	$	1
Other long-term liabilities (c)	1
Total finance lease liabilities	$	2
(a) Included in "Other assets" in the condensed consolidated balance sheets.
(b) Included in "Accrued expenses and other current liabilities" in the condensed consolidated balance sheets.
(c) Included in "Deferred credits and other liabilities" in the condensed consolidated balance sheets.

	June 30, 2019
	Weighted average remaining lease term	Weighted average discount rate
Operating leases	4.96 years	4.26	%
Finance leases	3.05 years	5.08	%

Maturities of lease liabilities under non-cancellable leases as of June 30, 2019 were as follows:

Year ending December 31	Operating leases			Finance leases
2019 (excluding the six months ended June 30, 2019)	$	56		$	1
2020	97			1
2021	75			—
2022	53			—
2023	37			—
Thereafter	57			—
Total future undiscounted lease payments	375			2
Less imputed interest	(37		)	—
Total reported lease liability	$	338		$	2

Future minimum operating lease payments at December 31, 2018 are as follows:

2019	$	120
2020	100
2021	86
2022	68
2023	56
Beyond 2023	53
	$	483

Leases

14. Leases

The Company has operating and finance leases for real estate and equipment. Generally, the leases have remaining terms of one month to ten years. Leases with an initial term of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

In addition, some leases include options to terminate the lease. The Company generally negotiates these termination clauses in anticipation of any changes in market conditions; however, because a termination option requires approval from management, the Company assumes the majority of its termination options will not be exercised when determining the lease term.

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease cost. Lease expense is recorded in operating expenses in the results of operations.

Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable portion of lease payments is not included in the computation of the right of use assets or lease liabilities. Rather, variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred and are included in "Cost of sales" and "Selling, general, and administrative" within the condensed consolidated statements of income (loss).

The Company does not include significant restrictions or covenants in its lease agreements, and residual value guarantees are generally not included within its operating leases.

The components of lease expense were as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease expense	$	30	$	64
Short-term lease expense	2		4
Variable lease expense	12		20
Total lease expense	$	44	$	88

Other information related to leases was as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	41	$	82

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating leases
Operating lease right-of-use assets (a)	$	344
Other current liabilities (b)	$	99
Other long-term liabilities (c)	239
Total operating lease liabilities	$	338
Finance leases
Property, plant and equipment, gross	$	2
Accumulated depreciation	—
Total finance lease right-of-use assets	$	2
Other current liabilities (b)	$	1
Other long-term liabilities (c)	1
Total finance lease liabilities	$	2
(a) Included in "Other assets" in the condensed consolidated balance sheets.
(b) Included in "Accrued expenses and other current liabilities" in the condensed consolidated balance sheets.
(c) Included in "Deferred credits and other liabilities" in the condensed consolidated balance sheets.

	June 30, 2019
	Weighted average remaining lease term	Weighted average discount rate
Operating leases	4.96 years	4.26	%
Finance leases	3.05 years	5.08	%

Maturities of lease liabilities under non-cancellable leases as of June 30, 2019 were as follows:

Year ending December 31	Operating leases			Finance leases
2019 (excluding the six months ended June 30, 2019)	$	56		$	1
2020	97			1
2021	75			—
2022	53			—
2023	37			—
Thereafter	57			—
Total future undiscounted lease payments	375			2
Less imputed interest	(37		)	—
Total reported lease liability	$	338		$	2

Future minimum operating lease payments at December 31, 2018 are as follows:

2019	$	120
2020	100
2021	86
2022	68
2023	56
Beyond 2023	53
	$	483