XML 44 R29.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Leases (Notes)
 12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases of Lessee Disclosure [Text Block]
20. LEASES

The Company's operating leases consist of rent commitments under various leases for office space, warehouses, land and buildings at varying dates from January 2020 to December 2024. The terms of most of these leases are in the range of 3 to 8 years, with certain leases renewable for varying periods. It is expected that in the normal course of business leases that expire will be renewed or replaced by leases on other similar property. Some of the Company's lease obligations have rent escalations or contingent rent that are recognized on a straight-line basis over the entire lease term. Material leasehold improvements and other landlord incentives are amortized over the shorter of their economic lives or the lease term, including renewal periods, if reasonably assured. Substantially all real estate taxes, insurance and maintenance expenses associated with leased facilities are obligations of the Company. The terms for most machinery and equipment leases range from 3 to 5 years.

The Company's finance leases consist of assets purchased under the Company's master leasing agreement. The terms of these leases are 5 years. These assets are included in machinery, office furniture and equipment and construction in process and amortization of these assets is included in depreciation and amortization expense. At December 31, 2019, $8.2 million of assets included in property, plant and equipment were accounted for as finance leases purchased under the Company's master leasing agreement. At December 31, 2019, the Company had accumulated depreciation of $2.4 million associated with these assets. Additionally, $2.7 million of assets purchased under the Company's master leasing agreement were included in construction in process in property, plant and equipment, net of accumulated depreciation. At December 31, 2018, $10.8 million of assets purchased under the Company's master leasing agreement and accounted for as capital leases were included in property, plant and equipment, with accumulated depreciation of $1.5 million. Finance leases (capital leases at December 31, 2018) of the Company's formerly owned Distribution business were included in assets held for sale, noncurrent portion on the Company's Consolidated Balance Sheets. See Note 3, Discontinued Operations, for further information on the Company's sale of the Distribution business.

20. LEASES (CONTINUED)

At the commencement date of a contract containing a lease, a right-of-use asset and lease liability are recorded to the Company's Consolidated Balance Sheets when the Company obtains control of the use of the asset. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make payments upon entering into a lease agreement.

Right-of-use assets, net consisted of the following:
 
 
Classification
 
December 31, 2019(1)
In thousands
 
 
 
 
Assets
 
 
 
 
Operating lease right of use assets
 
Operating lease right-of-use assets, net
 
$
15,159

Finance lease right of use assets
 
Property, plant and equipment, net of accumulated depreciation
 
5,840

Total leased assets
 
 
 
$
20,999

(1) The Company elected the modified retrospective transition method that applies ASC 842 as of January 1, 2019. See Note 1, Summary of Significant Accounting Policies, for further information on the adoption of ASC 842.

The lease liability and future rental payments are required under leases that have initial or remaining non-cancellable lease terms in excess of one year as of December 31, 2019. Lease liabilities consisted of the following:
 
 
Classification
 
December 31, 2019
 
December 31,
2018
In thousands
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Current
 
 
 
 
 
 
Operating lease liability, current portion
 
Operating lease liabilities, current portion
 
$
4,306

 
$
—

Finance lease liability, current portion
 
Other current liabilities
 
1,838

 
1,803

Noncurrent
 
 
 
 
 
 
Operating lease liability, noncurrent portion
 
Operating lease liabilities, noncurrent portion
 
11,617

 
—

Finance lease liability, noncurrent portion
 
Other long-term liabilities
 
5,559

 
6,260

Total lease liabilities(1)
 
 
 
$
23,320

 
$
8,063

(1) Lease liabilities of the Company's formerly owned Distribution business were included in liabilities held for sale as of December 31, 2018 on the Company's Condensed Consolidated Balance Sheets. See Note 3, Discontinued Operations, for further information on the Company's sale of the Distribution business.

20. LEASES (CONTINUED)

Future rental payments for continuing operations consisted of the following:
 
 
December 31, 2019
In thousands
 
 
 
 
 
Operating leases
 
 
2020
 
$
5,164

2021
 
4,095

2022
 
3,285

2023
 
2,728

2024
 
2,059

Thereafter
 
—

Total future operating lease payments
 
$
17,331

Interest
 
(1,408
)
Present value of future operating lease payments
 
$
15,923

 
 
 
Finance leases
 
 
2020
 
2,114

2021
 
1,965

2022
 
1,705

2023
 
1,189

2024
 
703

Thereafter
 
—

Total future finance lease payments
 
$
7,676

Interest
 
(279
)
Present value of future finance lease payments
 
$
7,397

 
 
 
Present value of total future lease payments
 
$
23,320



Prior to the adoption of ASC 842, operating lease payments on an undiscounted basis for continuing operations were approximately $20.7 million and were payable as follows: $4.8 million in 2019, $4.5 million in 2020, $3.7 million in 2021, $3.1 million in 2022, $2.6 million in 2023 and $2.0 million thereafter. Prior to the adoption of ASC 842, finance lease payments (capital lease payments under ASC 840) on an undiscounted basis for continuing operations were approximately $8.1 million and were payable as follows: $1.8 million in 2019, $1.8 million in 2020, 1.7 million in 2021, $1.5 million in 2022, $1.0 million in 2023 and $0.3 million thereafter.

The following table illustrates the components of lease expense for the Company's leases.
 
 
For the Year Ended
 
 
December 31, 2019
In thousands
 
 
Finance lease cost
 
 
Amortization of right-of-use assets
 
$
941

Interest on lease liabilities
 
297

Operating lease cost
 
5,064

Short-term lease cost
 
177

Variable lease cost
 
83

Total lease expense(1)
 
$
6,562

(1) Lease expense of the Company's formerly owned Distribution business was included in discontinued operations on the Company's Condensed Consolidated Statement of Operations. See Note 3, Discontinued Operations, for further information on the Company's sale of the Distribution business.
20. LEASES (CONTINUED)

The following table segregates cash paid for the Company's leases from continuing operations.
 
 
December 31, 2019
In thousands
 
 
Operating cash flows from operating leases
 
$
(4,950
)
Operating cash flows from finance leases
 
(1,609
)
Financing cash flows from finance leases
 
(297
)
Total cash flows from leasing activities(1)
 
$
(6,856
)
(1) Cash flows from leasing activities of the Company's formerly owned Distribution businesst was included in discontinued operations on the Company's Condensed Consolidated Statement of Cash Flows. See Note 3, Discontinued Operations, for further information on the Company's sale of the Distribution business.

During the twelve-month fiscal period ended December 31, 2019, $1.4 million and $1.5 million in right-of-use assets were obtained in exchange for new operating lease liabilities and finance lease liabilities, respectively.

Other information related to leases is as follows:
 
 
December 31, 2019
 
 
 
Weighted-average remaining lease term (years)
 
 
Operating leases
 
4.11

Finance leases
 
3.30

Weighted-average discount rate
 
 
Operating leases
 
4.32
%
Finance leases
 
4.04
%