Leases

12 Months Ended

Dec. 31, 2021

Finance Leases

We had a finance lease obligation related to our manufacturing facility in Eschenbach, Germany. Under the terms of the lease agreement, we had an option to purchase the property upon the expiration of the lease on June 30, 2021 at a price which was the greater of (i) the then-current market value or (ii) the residual book value of the land including the buildings and installations thereon. We exercised this purchase option with a net cash payment of $5.0 million on June 30, 2021, extinguishing the remaining finance lease obligation and finance lease right-of-use asset related to this facility. Our finance lease obligation related to this facility was $4.2 million just prior to the exercise of the purchase option and $4.5 million as of December 31, 2020. The finance lease right-of-use asset balance for this facility was $6.1 million just prior to the exercise of the purchase option and $6.5 million as of December 31, 2020, respectively. Accumulated amortization related to this finance lease right-of-use asset was $4.5 million just prior to the exercise of the purchase option and as of December 31, 2021. The aggregate of all other finance lease obligations, finance lease right-of-use assets and related accumulated amortization, were immaterial as of December 31, 2021 and December 31, 2020.

Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the consolidated statements of operations, was immaterial for each of the years ended December 31, 2021 and 2020. Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the consolidated statements of operations, was immaterial for each of the years ended December 31, 2021 and 2020. Payments made on the principal portion of our finance lease obligations were immaterial for each of the years ended December 31, 2021 and 2020.

Operating Leases

We have operating leases primarily related to building space and vehicles. Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option. The exercise of lease renewal options is at our sole discretion. We account for lease components separately from non-lease components. The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term. Our expenses and payments for operating leases were as follows:


	Year Ended December 31,
(Dollars in thousands)	2021		2020		2019
Operating leases expense	$	3,002	$	3,257	$	3,119
Short-term leases expense	$	330	$	464	$	192
Payments on operating lease obligations	$	2,784	$	2,893	$	2,967

Lease Balances in Statements of Financial Position

Our assets and liabilities balances related to finance and operating leases reflected in the consolidated statements of financial position were as follows:


		As of December 31,
(Dollars in thousands)	Financial Statement Line Item	2021		2020
Finance lease right-of-use assets	Property, plant and equipment, net	$	389	$	7,017
Operating lease right-of-use assets	Other long-term assets	$	17,161	$	4,216

Finance lease obligations, current portion	Other accrued liabilities	$	198	$	4,755
Finance lease obligations, non-current portion	Other long-term liabilities	$	209	$	322
Total finance lease obligations		$	407	$	5,077

Operating lease obligations, current portion	Other accrued liabilities	$	2,810	$	2,275
Operating lease obligations, non-current portion	Other long-term liabilities	$	14,965	$	2,219
Total operating lease obligations		$	17,775	$	4,494

Net Future Minimum Lease Payments

The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of December 31, 2021:


	Finance						Operating
(Dollars in thousands)	Leases Signed		Less: Leases Not Yet Commenced		Leases in Effect		Leases Signed		Less: Leases Not Yet Commenced		Leases in Effect
2022	422		(217)		205		3,462		(47)		3,415
2023	490		(290)		200		2,682		(45)		2,637
2024	300		(290)		10		1,635		(40)		1,595
2025	300		(290)		10		1,334		(18)		1,316
Thereafter	371		(364)		7		12,758		(3)		12,755
Total lease payments	1,883		(1,451)		432		21,871		(153)		21,718
Less: Interest	(74)		49		(25)		(3,946)		3		(3,943)
Present Value of Net Future Minimum Lease Payments	$	1,809	$	(1,402)	$	407	$	17,925	$	(150)	$	17,775

The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:


	Finance Leases	Operating Leases
Weighted Average Remaining Lease Term	2.1 years	11.1 years
Weighted Average Discount Rate	3.75%	3.87%

Practical Expedients

We have elected to recognize lease payments in the consolidated statements of operations on a straight-line basis over the term of the lease for short-term leases. We also elected the package of practical expedients that allows us to carry forward the historical lease classification and accounting for indirect costs for any existing leases.

Leases