Leases

3 Months Ended

Mar. 31, 2020

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 13 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 payment 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 March 31, 2020, the weighted average discount rate used for operating and finance leases is 4.34% and 1.65%, 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:

	Quarters Ended March 31,
In thousands	2020		2019
Finance lease expense:
Amortization of right-of-use assets	$	8	$	33
Interest on lease liabilities	—		1
Operating lease expense	1,590		1,644
Short-term lease expense	382		224
Variable lease expense	42		36
Total lease expense	$	2,022	$	1,938

Supplemental balance sheet information related to leases are as follows:

In thousands, except lease term	March 31, 2020			December 31, 2019
Operating leases:
Operating lease right-of-use assets	$	22,266		$	23,116
Short-term lease liabilities, included in "Other accrued liabilities"	$	4,614		$	4,789
Long-term lease liabilities	17,726			18,424
Total operating lease liabilities	$	22,340		$	23,213
Finance leases:
Property, plant and equipment	$	421		$	456
Accumulated depreciation	(132		)	(143		)
Property, plant and equipment, net	$	289		$	313
Short-term lease liabilities, included in debt	$	24		$	35
Long-term lease liabilities, included in debt	—			—
Total finance lease liabilities	$	24		$	35
Weighted average remaining lease term:
Operating leases	6.8 years			7.1 years
Finance leases	20.9 years			20.4 years

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
In thousands	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,574	$	1,673
Operating cash flows from finance leases	—		1
Financing cash flows from finance leases	10		67
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	704		1,131
Finance leases	—		—

As of March 31, 2020, future lease payments maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2020 (excluding the three months ended March 31, 2020)	$	4,250		$	24
2021	4,527			—
2022	3,716			—
2023	2,703			—
2024	1,884			—
Thereafter	9,324			—
Total lease payments	26,404			24
Less imputed interest	(4,064		)	—
Total discounted future lease payments	$	22,340		$	24

As of December 31, 2019, future lease payment maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2020	$	5,680		$	36
2021	4,329			—
2022	3,555			—
2023	2,659			—
2024	1,848			—
Thereafter	9,465			—
Total lease payments	27,536			36
Less imputed interest	(4,323		)	(1		)
Total discounted future lease payments	$	23,213		$	35

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 13 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 payment 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 March 31, 2020, the weighted average discount rate used for operating and finance leases is 4.34% and 1.65%, 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:

	Quarters Ended March 31,
In thousands	2020		2019
Finance lease expense:
Amortization of right-of-use assets	$	8	$	33
Interest on lease liabilities	—		1
Operating lease expense	1,590		1,644
Short-term lease expense	382		224
Variable lease expense	42		36
Total lease expense	$	2,022	$	1,938

Supplemental balance sheet information related to leases are as follows:

In thousands, except lease term	March 31, 2020			December 31, 2019
Operating leases:
Operating lease right-of-use assets	$	22,266		$	23,116
Short-term lease liabilities, included in "Other accrued liabilities"	$	4,614		$	4,789
Long-term lease liabilities	17,726			18,424
Total operating lease liabilities	$	22,340		$	23,213
Finance leases:
Property, plant and equipment	$	421		$	456
Accumulated depreciation	(132		)	(143		)
Property, plant and equipment, net	$	289		$	313
Short-term lease liabilities, included in debt	$	24		$	35
Long-term lease liabilities, included in debt	—			—
Total finance lease liabilities	$	24		$	35
Weighted average remaining lease term:
Operating leases	6.8 years			7.1 years
Finance leases	20.9 years			20.4 years

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
In thousands	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,574	$	1,673
Operating cash flows from finance leases	—		1
Financing cash flows from finance leases	10		67
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	704		1,131
Finance leases	—		—

As of March 31, 2020, future lease payments maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2020 (excluding the three months ended March 31, 2020)	$	4,250		$	24
2021	4,527			—
2022	3,716			—
2023	2,703			—
2024	1,884			—
Thereafter	9,324			—
Total lease payments	26,404			24
Less imputed interest	(4,064		)	—
Total discounted future lease payments	$	22,340		$	24

As of December 31, 2019, future lease payment maturities were as follows:

In thousands
Years Ending December 31,	Operating Leases			Finance Leases
2020	$	5,680		$	36
2021	4,329			—
2022	3,555			—
2023	2,659			—
2024	1,848			—
Thereafter	9,465			—
Total lease payments	27,536			36
Less imputed interest	(4,323		)	(1		)
Total discounted future lease payments	$	23,213		$	35