Leasing Arrangements

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leasing Arrangements

Leasing Arrangements

The Company leases warehouse and manufacturing real estate, and manufacturing and computer equipment under operating leases with lease terms ranging up to 25 years. Several operating lease agreements contain options to extend the lease term and/or options for early termination. The lease term consists of the non-cancelable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. As of December 31, 2021, we had no material leases that had yet to commence.

The discount rate implicit within the leases is generally not determinable, and, therefore, the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for leases is determined based on the lease term over which lease payments are made, adjusted for the impact of collateral.

The components of operating and finance lease cost for 2021 and 2020 were as follows:

(Thousands)	2021		2020
Components of lease expense
Operating lease cost	$	11,825	$	10,602
Finance lease cost
Amortization of right-of-use assets	1,989		1,324
Interest on lease liabilities	1,009		1,021
Total lease cost	$	14,823	$	12,947

The Company straight-lines its expense of fixed payments for operating leases over the lease term and expenses the variable lease payments in the period incurred. These variable lease payments are not included in the calculation of right-of-use assets or lease liabilities.

Supplemental balance sheet information related to the Company's operating and finance leases as of December 31, 2021 and 2020 is as follows:

(Thousands, except lease term and discount rate)	2021		2020
Supplemental balance sheet information
Operating Leases
Operating lease right-of-use assets	$	63,096	$	62,089
Other liabilities and accrued items	7,906		6,908
Operating lease liabilities	57,099		56,761
Finance Leases
Property, plant, and equipment	$	32,865	$	34,301
Allowances for depreciation, depletion, and amortization	(6,193)		(4,914)
Finance lease assets, net	$	26,672	$	29,387
Other liabilities and accrued items	$	2,800	$	2,925
Finance lease liabilities	16,327		20,539
Total principal payable on finance leases	$	19,127	$	23,464
Weighted Average Remaining Lease Term
Operating leases	11.47		12.72
Finance leases	16.96		16.59
Weighted Average Discount Rate
Operating leases	6.19%		6.46%
Finance leases	4.99%		4.88%

Future maturities of the Company's lease liabilities as of December 31, 2021 are as follows:

	Finance		Operating
(Thousands)	Leases		Leases
2022	$	3,644	$	11,551
2023	2,384		10,970
2024	1,466		8,785
2025	1,311		7,909
2026	1,285		6,500
2027 and thereafter	18,980		47,129
Total lease payments	29,070		92,844
Less amount of lease payment representing interest	9,943		27,839
Total present value of lease payments	$	19,127	$	65,005

Supplemental cash flow information related to leases was as follows:

(Thousands)	2021		2020
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	17,580	$	16,216
Operating cash flows from finance leases	1,009		1,021
Financing cash flows from finance leases	2,819		2,213
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,191		43,037
Finance leases	—		6,736

Leasing Arrangements

Leasing Arrangements

The Company leases warehouse and manufacturing real estate, and manufacturing and computer equipment under operating leases with lease terms ranging up to 25 years. Several operating lease agreements contain options to extend the lease term and/or options for early termination. The lease term consists of the non-cancelable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. As of December 31, 2021, we had no material leases that had yet to commence.

The discount rate implicit within the leases is generally not determinable, and, therefore, the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for leases is determined based on the lease term over which lease payments are made, adjusted for the impact of collateral.

The components of operating and finance lease cost for 2021 and 2020 were as follows:

(Thousands)	2021		2020
Components of lease expense
Operating lease cost	$	11,825	$	10,602
Finance lease cost
Amortization of right-of-use assets	1,989		1,324
Interest on lease liabilities	1,009		1,021
Total lease cost	$	14,823	$	12,947

The Company straight-lines its expense of fixed payments for operating leases over the lease term and expenses the variable lease payments in the period incurred. These variable lease payments are not included in the calculation of right-of-use assets or lease liabilities.

Supplemental balance sheet information related to the Company's operating and finance leases as of December 31, 2021 and 2020 is as follows:

(Thousands, except lease term and discount rate)	2021		2020
Supplemental balance sheet information
Operating Leases
Operating lease right-of-use assets	$	63,096	$	62,089
Other liabilities and accrued items	7,906		6,908
Operating lease liabilities	57,099		56,761
Finance Leases
Property, plant, and equipment	$	32,865	$	34,301
Allowances for depreciation, depletion, and amortization	(6,193)		(4,914)
Finance lease assets, net	$	26,672	$	29,387
Other liabilities and accrued items	$	2,800	$	2,925
Finance lease liabilities	16,327		20,539
Total principal payable on finance leases	$	19,127	$	23,464
Weighted Average Remaining Lease Term
Operating leases	11.47		12.72
Finance leases	16.96		16.59
Weighted Average Discount Rate
Operating leases	6.19%		6.46%
Finance leases	4.99%		4.88%

Future maturities of the Company's lease liabilities as of December 31, 2021 are as follows:

	Finance		Operating
(Thousands)	Leases		Leases
2022	$	3,644	$	11,551
2023	2,384		10,970
2024	1,466		8,785
2025	1,311		7,909
2026	1,285		6,500
2027 and thereafter	18,980		47,129
Total lease payments	29,070		92,844
Less amount of lease payment representing interest	9,943		27,839
Total present value of lease payments	$	19,127	$	65,005

Supplemental cash flow information related to leases was as follows:

(Thousands)	2021		2020
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	17,580	$	16,216
Operating cash flows from finance leases	1,009		1,021
Financing cash flows from finance leases	2,819		2,213
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	9,191		43,037
Finance leases	—		6,736