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LEASE COMMITMENTS

6 Months Ended

Jun. 30, 2019

NOTE 7 – LEASE COMMITMENTS

We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating and finance leases expiring at various dates through the year 2028. Most of the operating leases contain renewal options and certain leases include options to purchase the related asset during or at the end of the lease term.

Amortization expense related to finance leases is included in depreciation expense while rent expense related to operating leases is included within cost of sales and selling research & development and administrative expenses (“SG&A”). Rent expense related to operating leases (including taxes, insurance and maintenance when included in the rent) amounted to $7.8 million and $15.9 million in the three and six months ended June 30, 2018, respectively, under the old lease accounting standard.

The components of lease expense for the current period were as follows:


	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	5,437	$	11,441

Finance lease cost:
Amortization of right-of-use assets	$	1,004	$	1,876
Interest on lease liabilities		325		640
Total finance lease cost	$	1,329	$	2,516

Short-term lease and variable lease costs	$	2,328	$	4,270

Supplemental cash flow information related to leases was as follows:


Six Months Ended June 30,	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	10,249
Operating cash flows from finance leases		534
Financing cash flows from finance leases		2,294

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	9,512
Finance leases		11,622

Supplemental balance sheet information related to leases was as follows:


	June 30, 2019
Operating Leases
Operating lease right-of-use assets	$	76,996

Accounts payable and accrued liabilities	$	16,727
Operating lease liabilities		59,192
Total operating lease liabilities	$	75,919

Finance Leases
Property, plant and equipment, gross	$	43,117
Accumulated depreciation		(2,088)
Property, plant and equipment, net	$	41,029

Current maturities of long-term obligations, net of unamortized debt issuance cost	$	4,095
Long-term obligations, net of unamortized debt issuance cost		24,163
Total finance lease liabilities	$	28,258

Weighted Average Remaining Lease Term (in years)
Operating leases		6.1
Finance leases		7.1

Weighted Average Discount Rate
Operating leases		5.12	%
Finance leases		5.38	%

Maturities of lease liabilities as of June 30, 2019, were as follows:


	Operating		Finance
	Leases		Leases
Year 1	$	20,140	$	5,504
Year 2		16,800		4,592
Year 3		12,248		3,850
Year 4		9,520		2,854
Year 5		7,232		2,379
Thereafter		23,673		17,434
Total lease payments		89,613		36,613
Less imputed interest		(13,694)		(8,355)
Total	$	75,919	$	28,258

Maturities of lease liabilities as of December 31, 2018 under the old lease accounting standard were as follows:


	Operating		Capital
	Leases		Leases
Year 1	$	26,512	$	1,828
Year 2		21,386		1,653
Year 3		16,529		1,546
Year 4		12,549		1,160
Year 5		10,225		880
Thereafter		21,932		3,827
Total lease payments	$	109,133		10,894
Less imputed interest				(2,541)
Present value of future lease payments			$	8,353

As of June 30, 2019, we have additional operating and finance leases, primarily for buildings, that have not yet commenced of $4.0 million. These operating and finance leases will commence in years 2019 and 2020 with lease terms of 3 to 10 years.