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Note 9 - Leases | 9 Months Ended
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Sep. 30, 2019
Notes to Financial Statements |
Leases of Lessee Disclosure [Text Block] | 9. Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company recognizes a right of use ("ROU") asset and lease liability at the lease commencement date based on the present value of the lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the incremental borrowing rate is used to determine the present value of lease payments. The incremental borrowing rate is a collateralized rate determined based on the lease term, the Company’s credit rating, and other market information available at the commencement date. The ROU asset also includes any lease payments made prior to the commencement date and is reduced by any lease incentives. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term, while lease expense for finance leases is recognized as depreciation and interest expense using the effective interest method. The Company’s variable lease expense generally consists of property tax and insurance payments that are variable in nature, however, these amounts are immaterial to the condensed consolidated financial statements. The Company has lease agreements with both lease and nonlease components, which it elected to account for as a single lease component. However, the Company did not elect to apply the recognition exception for short-term leases. The Company is applying these elections to all asset classes. The Company leases certain manufacturing facilities, distribution centers, office space, warehouses, automobiles, machinery and computer equipment globally under both finance and operating leases. The Company’s leases have remaining lease terms of up to 20 years, of which certain leases, primarily within the buildings and improvements asset class, include options to extend the leases for up to 10 additional years. Further, the Company leases certain buildings from a noncontrolling interest holder, which the Company has determined to be arms’ length transactions. The Company is a lessor of one building that it leases to a third party. The lease income related to this arrangement is not material to the condensed consolidated financial statements. The Company records its operating lease cost and amortization of finance lease ROU assets within cost of goods sold or operating expenses in the condensed consolidated statements of comprehensive income depending on the cost center of the underlying asset. The Company records its finance lease interest cost within interest expense in the condensed consolidated statements of comprehensive income. The components of total lease cost consist of the following:
|  | Three Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2019 |
Operating lease cost |  | $ | 2,312 |  |  | $ | 7,263 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of ROU assets |  |  | 643 |  |  |  | 1,873 |
Interest on lease liabilities |  |  | 554 |  |  |  | 1,696 |
Total lease cost |  | $ | 3,509 |  |  | $ | 10,832 |
Prior to the adoption of ASC 842, lease expense consisted of payments on operating leases. As of January 1, 2019, the date of the adoption of ASU 2016-02, the Company recognized ROU assets and lease liabilities related to operating leases of $42,024 and $42,056, respectively, and there was no cumulative effect adjustment made to retained earnings. Supplemental balance sheet information related to the Company’s leases is as follows:
|  | September 30, 2019 |
Operating Leases |  |  |  |
Operating lease ROU assets (1) |  | $ | 37,270 |
Operating lease liabilities - current (2) |  | $ | 7,519 |
Operating lease liabilities - noncurrent (3) |  |  | 30,693 |
Total operating lease liabilities |  | $ | 38,212 |
Finance Leases |  |  |  |
Finance lease ROU assets, gross |  | $ | 29,353 |
Accumulated depreciation - finance lease ROU assets |  |  | (3,326 | )
Finance lease ROU assets, net (4) |  | $ | 26,027 |
Finance lease liabilities - current (5) |  | $ | 1,813 |
Finance lease liabilities - noncurrent (6) |  |  | 24,158 |
Total finance lease liabilities |  | $ | 25,971 |
| (1) | Recorded in the operating lease and other assets line
| (2) | Recorded in the other accrued liabilities line
| (3) | Recorded in the operating lease and other long-term liabilities line
| (4) | Recorded in the property and equipment, net line
| (5) | Recorded in the current portion of long-term borrowings and finance lease obligations line
| (6) | Recorded in the long-term borrowings and finance lease obligations line
Supplemental cash flow information related to the Company’s leases is as follows:
|  | Three Months Ended September 30, 2019 |  |  | Nine Months Ended September 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 2,565 |  |  | $ | 7,951 |
Operating cash flows from finance leases |  |  | 471 |  |  |  | 1,393 |
Financing cash flows from finance leases |  |  | 905 |  |  |  | 2,261 |
ROU assets obtained in exchange for lease liabilities |  |  |  |  |  |  |  |
Operating leases |  |  | 989 |  |  |  | 3,782 |
Finance leases |  |  | 194 |  |  |  | 8,165 |
Weighted average remaining lease term and discount rate information related to the Company’s leases is as follows:
|  | September 30, 2019 |
Weighted average remaining lease term (in years) |  |  |  |
Operating Leases |  |  | 7.00 |
Finance Leases |  |  | 14.24 |
Weighted average discount rate |  |  |  |
Operating Leases |  |  | 5.51 | %
Finance Leases |  |  | 7.87 | %
The maturities of the Company’s lease liabilities are as follows:
|  | As of September 30, 2019 |
|  | Finance Leases |  |  | Operating Leases |
Remainder of 2019 |  | $ | 934 |  |  | $ | 2,481 |
2020 |  |  | 3,519 |  |  |  | 8,934 |
2021 |  |  | 3,158 |  |  |  | 6,898 |
2022 |  |  | 3,388 |  |  |  | 5,368 |
2023 |  |  | 2,655 |  |  |  | 4,581 |
After 2023 |  |  | 32,016 |  |  |  | 18,338 |
Total minimum lease payments |  |  | 45,670 |  |  |  | 46,600 |
Interest component |  |  | (19,699 | ) |  |  | (8,388 | )
Present value of minimum lease payments |  | $ | 25,971 |  |  | $ | 38,212 |
|  | As of December 31, 2018 |
|  | Capital Leases |  |  | Operating Leases |
2019 |  | $ | 2,166 |  |  | $ | 8,914 |
2020 |  |  | 2,477 |  |  |  | 7,575 |
2021 |  |  | 2,053 |  |  |  | 6,379 |
2022 |  |  | 1,995 |  |  |  | 4,955 |
2023 |  |  | 1,889 |  |  |  | 4,482 |
After 2023 |  |  | 18,108 |  |  |  | 18,614 |
Total minimum lease payments |  |  | 28,688 |  |  | $ | 50,919 |
Interest component |  |  | (8,517 | ) |  |  |  |
Present value of minimum lease payments |  | $ | 20,171 |  |  |  |  |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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