XML 27 R11.htm IDEA: XBRL DOCUMENT

LEASES

12 Months Ended

Dec. 31, 2021

3. LEASES

The Company leases identified assets comprising real estate and equipment. Real estate leases consist primarily of office and warehouse space and equipment leases consist of vehicles and warehouse equipment. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in ASC 842, “Leases”. The Company’s operating leases are comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles.

Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date. Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of real estate taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statement of income. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and is included in operating expenses in the consolidated statement of income. Interest expense on finance leases is calculated using the amortized cost basis and is included in other income (expense), net in the consolidated statement of income.

The Company’s leases have remaining lease terms of less than one year to 12 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less.

The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were as follows:


	2021		2020		2019
Operating lease cost	$	4,614	$	4,637	$	4,899

Short-term lease cost		5,218		3,408		3,406

Variable lease cost		710		719		640

Finance leases:
Amortization of ROU assets		546		626		436
Interest on lease liabilities		19		39		56
Finance lease cost		565		665		492

Total lease cost	$	11,107	$	9,429	$	9,437

Supplemental cash flow information for leases for the years ended December 31, 2021, 2020 and 2019 were as follows:


	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,123	$	3,982	$	4,077
Operating cash flows from finance leases		19		39		56
Financing cash flows from finance leases		2,698		3,086		2,223

ROU assets obtained in exchange for lease obligations:
Finance leases		2,878		2,417		2,866
Operating leases		4,313		3,003		34,931

ROU assets for operating and finance leases recognized in the consolidated balance sheets were comprised of the following at:


	December 31, 2021
	Real Estate		Equipment		Total		Balance Sheet Location
Operating leases	$	22,518	$	639	$	23,157	Other Assets
Finance leases		—		2,646		2,646	Property and Equipment, net


	December 31, 2020
	Real Estate		Equipment		Total		Balance Sheet Location
Operating leases	$	22,565	$	189	$	22,754	Other Assets
Finance leases		—		2,120		2,120	Property and Equipment, net

Operating and finance lease liabilities recognized in the consolidated balance sheets were as follows at:


	December 31, 2021
	Operating Leases		Finance Leases
Accrued liabilities	$	3,990	$	960
Other liabilities		17,389		41
Total	$	21,379	$	1,001


	December 31, 2020
	Operating Leases		Finance Leases
Accrued liabilities	$	3,171	$	799
Other liabilities		17,342		24
Total	$	20,513	$	823

The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows at:


	December 31, 2021
	Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	8.1		0.7
Weighted-average discount rate	3.5	%	1.3	%


	December 31, 2020
	Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	9.4		0.6
Weighted-average discount rate	3.6	%	1.9	%

The following table reconciles the undiscounted future lease payments for operating and finance leases to the operating and finance leases recorded in the consolidated balance sheet at December 31, 2021:


	Undiscounted Future Lease Payments
	Operating Leases		Finance Leases
2022	$	4,605	$	964
2023		3,821		21
2024		2,978		13
2025		1,669		8
2026		1,692		—
2027 and thereafter		9,949		—
Total lease payments		24,714		1,006
Less imputed interest		(3,335)		(5)
Total	$	21,379	$	1,001

As of December 31, 2021, the Company did not have any significant additional operating or finance leases that had not yet commenced.