Quarterly report pursuant to Section 13 or 15(d)

Note 2 - Leases

v3.19.1
Note 2 - Leases
3 Months Ended
Mar. 31, 2019
Notes to Financial Statements  
Leases of Lessee Disclosure [Text Block]
2.
Leases
 
We lease certain warehouse facilities, manufacturing facilities, office space, equipment, and vehicles. Leases with an initial term of
12
months or less are
not
recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
 
We determine if an arrangement is a lease at inception. For lease arrangements, we recognize right-of-use assets and lease liabilities on the balance sheet. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. On our consolidated balance sheets, operating lease right-of-use assets are included in Other noncurrent assets and finance lease right-of-use assets are included in Property, plant and equipment, net.
 
Right-of-use assets and lease liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. Some of our leases include renewal options that are exercisable at our sole discretion. Our lease terms include the renewal option period when it is reasonably certain that we will exercise that option. As the implicit rate for most of our operating leases is
not
readily determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. For finance leases, we use the implicit rate in the lease in determining the present value of lease payments. Right-of-use assets also include any lease payments made and exclude lease incentives. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.
 
We have lease agreements with lease and non-lease components. We elected the option to
not
separate lease and non-lease components for all of our leases. Our lease agreements do
not
contain any significant variable lease payments, residual value guarantees, or restrictive covenants.
 
Supplemental balance sheet information related to leases was as follows:
 
(in millions)
Classification
 
As of
March 31,
2019
Assets
         
Operating lease assets
Other noncurrent assets (a)
  $
6.5
 
Finance lease assets
Property, plant and equipment, net (a)
   
1.7
 
Total lease assets
 
  $
8.2
 
Liabilities
         
Current
         
Operating
Accrued liabilities
  $
2.7
 
Finance
Current portion of debt
   
1.1
 
Noncurrent
         
Operating
Other noncurrent liabilities
   
4.2
 
Finance
Noncurrent portion of debt
   
1.1
 
Total lease liabilities
 
  $
9.1
 
 
(a) Operating and finance lease assets are recorded net of accumulated amortization of
$0.6
million and
$6.4
million, respectively, as of
March 31, 2019
.
 
The following table sets forth the components of lease expense:
 
(in millions)
Classification
 
Three
Months
Ended
March 31, 2019
Operating lease expense
Cost of sales
  $
0.7
 
 
Selling, general and administrative expenses
   
0.2
 
Total operating lease expense (a)
 
   
0.9
 
           
Finance lease expense
         
Amortization of right-of-use assets
Cost of sales
   
0.4
 
Interest on lease liabilities
Interest expense, net
   
0.1
 
Total finance lease expense
 
   
0.5
 
Total lease expense
 
  $
1.4
 
 
(a) Includes short-term lease expense and sublease income, which are
not
material.
 
Supplemental cash flow information related to leases was as follows:
 
(in millions)
 
Three
Months Ended
March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
       
Operating cash flows from operating leases
  $
0.9
 
Operating cash flows from finance leases
   
0.1
 
Financing cash flows from finance leases
   
0.5
 
Right-of-use assets obtained in exchange for lease obligations:
       
Operating leases
   
7.3
 
Finance leases
   
0.1
 
 
The following table sets for the weighted-average remaining lease terms and discount rates:
 
 
 
As of March 31, 2019
Weighted-average remaining lease term (years):
       
Operating leases
   
3.1
 
Finance leases
   
3.0
 
Weighted-average discount rate:
       
Operating leases
   
5.4
%
Finance leases
   
5.4
%
 
Maturities of lease liabilities are as follows:
 
(in millions)
 
Operating Leases
 
Finance Leases
 
Total
2019 (excluding the three months ending March 31, 2019)   $
2.4
 
  $
1.0
 
  $
3.4
 
2020
   
2.2
 
   
0.5
 
   
2.7
 
2021
   
1.6
 
   
0.4
 
   
2.0
 
2022
   
0.7
 
   
0.3
 
   
1.0
 
2023
   
0.4
 
   
0.1
 
   
0.5
 
Thereafter
   
0.2
 
   
0.1
 
   
0.3
 
Total lease payments
   
7.5
 
   
2.4
 
   
9.9
 
Less: Imputed interest
   
(0.6
)
   
(0.2
)
   
(0.8
)
Present value of lease liabilities
  $
6.9
 
  $
2.2
 
  $
9.1
 
 
Future minimum lease payments for operating and finance leases as of
December 31, 2018
were as follows:
 
(in millions)
 
Operating Leases
   
Finance Leases
   
Total
 
2019
  $
3.2
    $
1.5
    $
4.7
 
2020
   
2.1
     
0.5
     
2.6
 
2021
   
1.5
     
0.3
     
1.8
 
2022
   
0.6
     
0.3
     
0.9
 
2023
   
0.3
     
0.1
     
0.4
 
Thereafter
   
0.2
     
0.1
     
0.3
 
Total lease payments
  $
7.9
    $
2.8
    $
10.7