Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

From time to time, the Company enters into arrangements with vendors to provide certain tangible assets used in the Company's operations which qualify as a lease pursuant to ASC Topic 842, Leases. The tangible assets leased include Buildings, Office Equipment, Machinery and Vehicles. The Company's leases have remaining terms of a few months to 14 years, some of which have options to extend for a period of up to 7 years and some of which have options to terminate within 1 year.

At inception of the arrangement, the Company determines if an arrangement is a lease based on assessment of the terms and conditions of the contract. Operating leases are included in Operating lease right-of-use (“ROU”) assets, other accrued liabilities, and Long-term operating lease liabilities in the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, Current portion of long-term debt, and long-term debt in the Company's condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

While the overwhelming majority of leases have fixed payments schedules, some leases have variable lease schedules based on market indices such as LIBOR or include additional payments based on excess consumption of services. For leases on a variable schedule based on a market index, the current lease payment amount is used in the calculation of the lease liability and corresponding asset included on the balance sheet. For leases with additional payments based on excess consumption of services, no amount is included in the calculation of the lease liability or corresponding asset as it is not probable excess consumption will continue in the future.

As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. At June 30, 2019, the weighted average discount rate used for operating and finance leases is 4.39% and 1.78%, respectively. The implicit rate is used when readily determinable from a lease.

The operating lease ROU asset also includes any lease payments made in advance of the assets use and excludes lease incentives received. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for as one component as permitted by ASC 842.

After consideration of any options to terminate early which are reasonably certain to be executed or any options to extend which are not reasonably certain to be executed, any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU Asset and Lease Liability accounts on the condensed consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

The components of lease expense are as follows:

In thousands	Quarter Ended   June 30, 2019		Six Months Ended   June 30, 2019
Finance lease expense:
Amortization of right-of-use assets	$	16	$	49
Interest on lease liabilities	—		1
Operating lease expense	1,605		3,249
Short-term lease expense	244		468
Variable lease expense	18		54
Total lease expense	$	1,883	$	3,821

Supplemental balance sheet information related to leases are as follows:

In thousands, except lease term	June 30, 2019
Operating leases:
Operating lease right-of-use assets	$	27,070
Short-term lease liabilities, included in "Other accrued liabilities"	$	5,176
Long-term lease liabilities	22,006
Total operating lease liabilities	$	27,182
Finance leases:
Property, plant and equipment	$	740
Accumulated depreciation	(195		)
Property, plant and equipment, net	$	545
Short-term lease liabilities, included in debt	$	109
Long-term lease liabilities, included in debt	13
Total finance lease liabilities	$	122
Weighted average remaining lease term:
Operating leases	7.5 years
Finance leases	12.0 years

Supplemental cash flow information related to leases are as follows:

	Six Months Ended June 30,
In thousands	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,162
Operating cash flows from finance leases	1
Financing cash flows from finance leases	188
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,676
Finance leases	—

As of June 30, 2019, future lease payments maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2019 (excluding the six months ended June 30, 2019)	$	3,223		$	89
2020	5,723			34
2021	4,408			—
2022	3,643			—
2023	2,753			—
Thereafter	12,822			—
Total lease payments	32,572			123
Less imputed interest	(5,390		)	(1		)
Total discounted future lease payments	$	27,182		$	122

As of December 31, 2018, future lease payment maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases		Finance Leases
2019	$	6,004	$	279
2020	4,871		35
2021	3,877		—
2022	3,226		—
2023	2,617		—
Thereafter	11,111		—
Total lease payments	$	31,706	$	314

Leases

Leases

From time to time, the Company enters into arrangements with vendors to provide certain tangible assets used in the Company's operations which qualify as a lease pursuant to ASC Topic 842, Leases. The tangible assets leased include Buildings, Office Equipment, Machinery and Vehicles. The Company's leases have remaining terms of a few months to 14 years, some of which have options to extend for a period of up to 7 years and some of which have options to terminate within 1 year.

At inception of the arrangement, the Company determines if an arrangement is a lease based on assessment of the terms and conditions of the contract. Operating leases are included in Operating lease right-of-use (“ROU”) assets, other accrued liabilities, and Long-term operating lease liabilities in the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, Current portion of long-term debt, and long-term debt in the Company's condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

While the overwhelming majority of leases have fixed payments schedules, some leases have variable lease schedules based on market indices such as LIBOR or include additional payments based on excess consumption of services. For leases on a variable schedule based on a market index, the current lease payment amount is used in the calculation of the lease liability and corresponding asset included on the balance sheet. For leases with additional payments based on excess consumption of services, no amount is included in the calculation of the lease liability or corresponding asset as it is not probable excess consumption will continue in the future.

As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. At June 30, 2019, the weighted average discount rate used for operating and finance leases is 4.39% and 1.78%, respectively. The implicit rate is used when readily determinable from a lease.

The operating lease ROU asset also includes any lease payments made in advance of the assets use and excludes lease incentives received. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for as one component as permitted by ASC 842.

After consideration of any options to terminate early which are reasonably certain to be executed or any options to extend which are not reasonably certain to be executed, any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU Asset and Lease Liability accounts on the condensed consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

The components of lease expense are as follows:

In thousands	Quarter Ended   June 30, 2019		Six Months Ended   June 30, 2019
Finance lease expense:
Amortization of right-of-use assets	$	16	$	49
Interest on lease liabilities	—		1
Operating lease expense	1,605		3,249
Short-term lease expense	244		468
Variable lease expense	18		54
Total lease expense	$	1,883	$	3,821

Supplemental balance sheet information related to leases are as follows:

In thousands, except lease term	June 30, 2019
Operating leases:
Operating lease right-of-use assets	$	27,070
Short-term lease liabilities, included in "Other accrued liabilities"	$	5,176
Long-term lease liabilities	22,006
Total operating lease liabilities	$	27,182
Finance leases:
Property, plant and equipment	$	740
Accumulated depreciation	(195		)
Property, plant and equipment, net	$	545
Short-term lease liabilities, included in debt	$	109
Long-term lease liabilities, included in debt	13
Total finance lease liabilities	$	122
Weighted average remaining lease term:
Operating leases	7.5 years
Finance leases	12.0 years

Supplemental cash flow information related to leases are as follows:

	Six Months Ended June 30,
In thousands	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,162
Operating cash flows from finance leases	1
Financing cash flows from finance leases	188
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,676
Finance leases	—

As of June 30, 2019, future lease payments maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2019 (excluding the six months ended June 30, 2019)	$	3,223		$	89
2020	5,723			34
2021	4,408			—
2022	3,643			—
2023	2,753			—
Thereafter	12,822			—
Total lease payments	32,572			123
Less imputed interest	(5,390		)	(1		)
Total discounted future lease payments	$	27,182		$	122

As of December 31, 2018, future lease payment maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases		Finance Leases
2019	$	6,004	$	279
2020	4,871		35
2021	3,877		—
2022	3,226		—
2023	2,617		—
Thereafter	11,111		—
Total lease payments	$	31,706	$	314