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Leases (Notes)
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases Leases
Adoption Method and Impact
On January 1, 2019 the Company adopted ASC 842, Leases. The Company applied ASC 842 to all leases in effect at January 1, 2019 and adopted the accounting standard using the alternative transition method, which does not require the restatement of prior years. Comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company has elected the package of practical expedients, which allows entities to not reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company has also elected the practical expedient to not separate lease components from non-lease components for all asset classes, and did not elect the hindsight practical expedient to determine the lease term. The Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. The adoption did not have a material impact on the Company’s results of operations or cash flows, and had no impact to the net deferred tax position on the consolidated balance sheet due to the Company’s income tax valuation allowances for federal and state purposes (see Note 19).
The Company has entered into finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company. As of December 31, 2020, the lenders had made $17.2 million of progress payments on behalf of the Company, and $29.0 million of progress payments are scheduled to be paid. Upon payment of the final progress payments by the lenders, finance leases will commence, and $46.2 million, discounted using the applicable discount rates at lease inceptions, of ROU assets and lease liabilities will be recognized by the Company.
The following represents the components of lease cost and other information for both operating and financing leases for the fiscal years ending December 31, 2020 and 2019:
($ in millions)Fiscal year endedFiscal year ended
December 31, 2020December 31, 2019
Lease Cost
Finance Lease Cost:
   Amortization of right of use asset$3.5 $1.7 
   Interest on lease liabilities1.0 0.5 
Operating lease cost20.8 20.5 
Short-term lease cost1.9 3.1 
Variable lease cost0.9 0.8 
Sublease income(0.1)— 
Total lease cost$28.0 $26.6 
Other information
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from finance leases$1.0 $0.5 
   Operating cash flows from operating leases$21.7 $20.8 
   Financing cash flows from finance leases$6.2 $2.4 
Right of use assets obtained in exchange for new finance lease liabilities$42.3 $14.1 
Right of use assets obtained in exchange for new operating lease liabilities (a)$12.4 $35.9 
Weighted average remaining lease term - finance leases4 years4 years
Weighted average remaining lease term - operating leases6 years6 years
Weighted average discount rate - finance leases6.2 %5.3 %
Weighted average discount rate - operating leases6.9 %7.0 %
(a) Several of the Company’s real property lease contracts include options to extend the lease term. During the fourth quarter of 2019 and 2020, the Company reassessed the likelihood of renewal and included $10.2 million for the renewal options in fiscal year ended December 31, 2019 for several of these operating leases in the ROU asset and lease liability because the likelihood of renewal was determined to be reasonably certain. No adjustments were required in 2020 as a result of this reassessment.
Rental expense under operating leases was $24.4 million in 2018.
The following table reconciles future minimum undiscounted rental commitments for operating leases to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2020 (in millions):
December 31, 2020
2021$19.6 
202216.6 
202312.8 
20249.3 
20257.6 
2026 and thereafter18.1 
Total undiscounted lease payments$84.0 
Present value adjustment (16.1)
Operating lease liabilities$67.9 
The following table reconciles future minimum undiscounted rental commitments for finance leases to the finance lease liabilities recorded on the consolidated balance sheet as of December 31, 2020 (in millions):
December 31, 2020
2021$13.8 
202213.2 
202312.2 
20248.7 
20254.8 
2026 and thereafter0.1 
Total undiscounted lease payments$52.8 
Present value adjustment (6.4)
Finance lease liabilities$46.4 
Leases Leases
Adoption Method and Impact
On January 1, 2019 the Company adopted ASC 842, Leases. The Company applied ASC 842 to all leases in effect at January 1, 2019 and adopted the accounting standard using the alternative transition method, which does not require the restatement of prior years. Comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company has elected the package of practical expedients, which allows entities to not reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company has also elected the practical expedient to not separate lease components from non-lease components for all asset classes, and did not elect the hindsight practical expedient to determine the lease term. The Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. The adoption did not have a material impact on the Company’s results of operations or cash flows, and had no impact to the net deferred tax position on the consolidated balance sheet due to the Company’s income tax valuation allowances for federal and state purposes (see Note 19).
The Company has entered into finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company. As of December 31, 2020, the lenders had made $17.2 million of progress payments on behalf of the Company, and $29.0 million of progress payments are scheduled to be paid. Upon payment of the final progress payments by the lenders, finance leases will commence, and $46.2 million, discounted using the applicable discount rates at lease inceptions, of ROU assets and lease liabilities will be recognized by the Company.
The following represents the components of lease cost and other information for both operating and financing leases for the fiscal years ending December 31, 2020 and 2019:
($ in millions)Fiscal year endedFiscal year ended
December 31, 2020December 31, 2019
Lease Cost
Finance Lease Cost:
   Amortization of right of use asset$3.5 $1.7 
   Interest on lease liabilities1.0 0.5 
Operating lease cost20.8 20.5 
Short-term lease cost1.9 3.1 
Variable lease cost0.9 0.8 
Sublease income(0.1)— 
Total lease cost$28.0 $26.6 
Other information
Cash paid for amounts included in the measurement of lease liabilities
   Operating cash flows from finance leases$1.0 $0.5 
   Operating cash flows from operating leases$21.7 $20.8 
   Financing cash flows from finance leases$6.2 $2.4 
Right of use assets obtained in exchange for new finance lease liabilities$42.3 $14.1 
Right of use assets obtained in exchange for new operating lease liabilities (a)$12.4 $35.9 
Weighted average remaining lease term - finance leases4 years4 years
Weighted average remaining lease term - operating leases6 years6 years
Weighted average discount rate - finance leases6.2 %5.3 %
Weighted average discount rate - operating leases6.9 %7.0 %
(a) Several of the Company’s real property lease contracts include options to extend the lease term. During the fourth quarter of 2019 and 2020, the Company reassessed the likelihood of renewal and included $10.2 million for the renewal options in fiscal year ended December 31, 2019 for several of these operating leases in the ROU asset and lease liability because the likelihood of renewal was determined to be reasonably certain. No adjustments were required in 2020 as a result of this reassessment.
Rental expense under operating leases was $24.4 million in 2018.
The following table reconciles future minimum undiscounted rental commitments for operating leases to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2020 (in millions):
December 31, 2020
2021$19.6 
202216.6 
202312.8 
20249.3 
20257.6 
2026 and thereafter18.1 
Total undiscounted lease payments$84.0 
Present value adjustment (16.1)
Operating lease liabilities$67.9 
The following table reconciles future minimum undiscounted rental commitments for finance leases to the finance lease liabilities recorded on the consolidated balance sheet as of December 31, 2020 (in millions):
December 31, 2020
2021$13.8 
202213.2 
202312.2 
20248.7 
20254.8 
2026 and thereafter0.1 
Total undiscounted lease payments$52.8 
Present value adjustment (6.4)
Finance lease liabilities$46.4