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Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases | LEASES Impact of the Adoption of Topic 842 On January 1, 2019, the Company adopted Topic 842, using the alternative transition method under ASU 2018-11, which permits application of the new guidance at the beginning of the period of adoption, with comparative periods continuing to be reported under Topic 840. The Company elected to apply the practical expedient package outlined in the transition guidance which, among other things, allows for the carryforward of historical lease classifications. In addition, the Company elected to separately account for non-lease and associated lease components and apply the short-term lease exception, whereby the Company does not recognize a right-of-use asset or lease liability for leases with an initial term of 12 months or less. Upon adoption, the Company recognized operating lease right-of-use assets and liabilities on its Condensed Consolidated Balance Sheet of $27.1 million and $29.5 million, respectively. In addition, the Company recognized the remaining deferred gain of $8.7 million associated with the sale-leaseback transactions that the Company entered into in July 2008 for its Elgin, Illinois and University Park, Illinois plant locations, net of the related deferred tax asset of $2.2 million, as a cumulative effect adjustment to opening retained earnings as of the January 1, 2019 adoption date. Prior to the adoption of Topic 842, the deferred gain, which initially totaled $29.0 million, had been amortized through the Company’s Condensed Consolidated Statements of Operations on a straight-line basis over the 15-year life of the respective leases. Effective in 2019, approximately $1.9 million of the deferred gain, which had been recognized each year since 2008, will no longer be recognized through the Condensed Consolidated Statements of Operations. Other than the aforementioned elimination of the deferred gain recognition, the adoption of Topic 842 did not have a material impact on the Company’s results of operations or cash flows. Further, the adoption of Topic 842 did not have an impact on the Company’s liquidity or debt-covenant compliance under its current arrangements. Description of Leases The Company leases certain facilities within the U.S., Europe and Canada from which the Company manufactures vehicles and equipment, and provides sales, service and/or equipment rentals. Some of the Company’s lease agreements contain options to renew. The Company also leases vehicles and various other equipment. The Company’s lease agreements may contain lease and non-lease components, which are accounted for separately. In connection with the 2016 acquisition of JJE, the Company entered into lease agreements for two facilities owned by affiliates of the sellers of JJE. Both agreements include an annual rent that is considered market-based and were for an initial lease term of five years, with options to renew. The total lease liability under these agreements to the former owners of JJE, certain of whom are now employees of the Company, was $0.5 million as of September 30, 2019. In connection with the current-year acquisition of MRL, the Company entered into lease agreements for five facilities owned by affiliates of the sellers of MRL. With the exception of one lease, which has a term of one year, all such lease agreements have lease terms of five years. All lease agreements contain an annual rent that is considered to be market-based and include options to renew. In the three and nine months ended September 30, 2019, total rent paid under these agreements to the former owners of MRL, certain of whom are now employees of the Company, was $0.3 million, and the total lease liability was $4.4 million as of September 30, 2019. The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental collateralized borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Implicit rates are used when readily determinable. The Company’s lease terms 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 lease payments is recognized on a straight-line basis over the respective lease term. The following table summarizes the Company’s total lease costs and supplemental cash flow information arising from operating lease transactions:
(in millions) | Three Months Ended September 30, 2019 |  | Nine Months Ended September 30, 2019
Total operating lease costs (a) | $ | 3.2 |  |  | $ | 9.3 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 2.3 |  |  | $ | 6.3 |
(a) | Includes short-term leases and variable lease costs, which are immaterial.
The following table summarizes the components of lease right-of-use assets and liabilities:
(in millions) | September 30, 2019 |  | Affected Line Item in Condensed Consolidated Balance Sheets
Assets |  |  |
Operating lease right-of-use assets | $ | 28.5 |  |  | Operating lease right-of-use assets
Finance lease right-of-use assets | 0.6 |  |  | Properties and equipment, net of accumulated depreciation
Total lease right-of-use assets | $ | 29.1 |  |  |
Liabilities |  |  |
Current: |  |  |
Operating leases | $ | 8.8 |  |  | Other current liabilities
Finance leases | 0.2 |  |  | Current portion of long-term borrowings and finance lease obligations
Noncurrent: |  |  |
Operating leases | 21.9 |  |  | Long-term operating lease liabilities
Finance leases | 0.4 |  |  | Long-term borrowings and finance lease obligations
Total lease liabilities | $ | 31.3 |  |  |
As of September 30, 2019, the Company’s operating leases have a weighted-average remaining lease term of 4.0 years and a weighted-average discount rate of 3.8%. Maturities of operating lease liabilities as of September 30, 2019 were as follows:
(in millions) |
2019 (excluding the nine months ended September 30, 2019) | $ | 2.3 |
2020 | 8.9 |
2021 | 8.2 |
2022 | 7.2 |
2023 | 4.5 |
Thereafter | 2.1 |
Total lease payments | 33.2 |
Less: Imputed interest | 2.5 |
Present value of operating lease liabilities | $ | 30.7 |
At December 31, 2018, minimum future rental commitments under operating leases having non-cancelable lease terms in excess of one year, as previously determined in accordance with Topic 840, aggregated $34.3 million and were payable as follows: $8.9 million in 2019, $8.0 million in 2020, $6.9 million in 2021, $5.9 million in 2022, $3.4 million in 2023 and $1.2 million thereafter.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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