Leases

12 Months Ended

Dec. 31, 2019

12. Leases

Most leases held by the Company expire between 2020 and 2034. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. Certain leases include terms such as an option to purchase the property, one or more options to renew, with renewal terms that can extend the lease term from one to 10 years, and options to terminate the leases within one year. The exercise of lease renewal or termination option is at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements is limited to the expected lease terms.

The following table summarizes the components of lease costs during 2019 (in thousands):

	Year Ended
	December 31, 2019
Operating lease cost	$	7,638
Finance lease cost
Amortization of right-of-use assets		831
Interest on lease liabilities		430
Variable lease cost		1,329
Total lease cost	$	10,228

During 2018 and 2017, the Company recorded operating lease expense of $7.4 million and $5.5 million, respectively.

The following table provides the details of balance sheet information related to leases as of December 31, 2019 (in thousands, except lease term and discount rate):

	December 31,
	2019
Operating leases
Operating lease right-of-use assets	$	35,180

Current portion of operating lease liabilities	$	5,043
Operating lease liabilities		34,108
Total operating lease liabilities	$	39,151

Finance leases
Property, plant and equipment, gross	$	19,748
Accumulated depreciation		(4,649	)
Finance lease assets included in property, plant and equipment, net	$	15,099

Accrued expenses and other current liabilities	$	1,307
Other liabilities		14,845
Total finance lease liabilities	$	16,152

Weighted-average remaining lease term (in years)
Operating leases		10.2
Finance leases		4.7
Weighted-average discount rate
Operating leases		5.60	%
Finance leases		3.09	%

The following table provides a summary of leased properties under finance leases by major classes as of December 31, 2018:

	December 31,
	2018
Land, buildings and improvements	$	9,133
Machinery and equipment		4,404
Total gross assets under finance leases		13,537
Accumulated depreciation on assets under finance leases		6,901
Assets under finance leases included in property, plant and equipment, net	$	6,636

The following table provides the details of cash flow information related to leases for the year ended December 31, 2019 (in thousands):

	Year Ended
	December 31, 2019
Cash paid for amounts included in lease liabilities:
Operating cash flows from finance leases	$	430
Operating cash flows from operating leases	$	7,768
Financing cash flows from finance leases	$	868
Supplemental non-cash information:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	7,723
Right-of-use assets obtained in exchange for new finance lease liabilities	$	9,209

Future minimum lease payments under operating and finance leases expiring subsequent to December 31, 2019, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):

Year Ending December 31,	Operating Leases			Finance Leases⁽¹⁾
2020	$	6,157		$	1,738
2021		6,485			9,278
2022		5,451			907
2023		4,762			930
2024		4,420			954
Thereafter		26,141			4,440
Total minimum lease payments		53,416			18,247
Less: interest		(14,265	)		(2,095	)
Present value of lease liabilities	$	39,151		$	16,152

(1)

Future minimum lease payments under finance leases include the exercise price of an option to purchase a facility in Germany in 2021.