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Leases | 12 Months Ended
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Dec. 31, 2020
Leases [Abstract] |
Leases | Leases Effective January 1, 2019, we implemented ASU 2016-02, Leases, which amended authoritative guidance on leases and is codified in ASC Topic 842. The amended guidance requires lessees to recognize most leases on their balance sheets as right-of-use assets along with corresponding lease liabilities. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. The FASB's authoritative guidance provides companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new standard and have recognized right-of-use assets and lease liabilities as of January 1, 2019. Prior period amounts were not adjusted and will continue to be reported under the accounting standards in effect for those periods. The adoption of this standard had a material impact on our Consolidated Balance Sheet as of December 31, 2020 due to the capitalization of right-of-use assets and lease liabilities associated with our current operating leases in which we are the lessee. Adoption of the new standard resulted in the recording of additional right-of-use assets and lease liabilities of approximately $54 million, respectively, as of January 1, 2019. Upon adoption of the new standard on January 1, 2019, we elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases that commenced prior to adoption of the new standard and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification and any initial direct costs for existing leases. We have elected to not separate the lease and non-lease components within our lease contracts. Therefore, all fixed costs associated with the lease are included in the right-of-use asset and the lease liability. These costs often relate to the payments for a proportionate share of real estate taxes, insurance, common area maintenance and other operating costs in addition to base rent. We did not elect the hindsight practical expedient. At the inception of our contracts we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement. We use our incremental borrowing rate ("IBR") at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Our IBR reflects a fully secured rate based on our credit rating, taking into consideration the repayment timing of the lease and any impacts due to the economic environment in which the lease operates. Lease right-of-use assets and liabilities are recognized based on the present value of the fixed future lease payments over the lease term. Lease expense for all operating leases is classified in Cost of products sold or Selling, general and administrative expense in the Consolidated Statements of Income. For finance leases, the amortization of the right-of-use asset is included in depreciation and amortization, and the interest is included in interest expense. As a lessee, we have various operating lease agreements primarily related to real estate, vehicles and office and plant equipment. Our lease payments are largely fixed. Variable lease payments that depend on an index or a rate are included in the lease payments and are measured using the prevailing index or rate at the measurement date, with differences between the calculated lease payment and the actual lease payment being expensed in the period of the change. Other variable lease payments, including utilities, consumption and common area maintenance as well as repairs, maintenance and mileage overages on vehicles, are expensed during the period incurred. Variable lease costs were immaterial for the twelve months ended December 31, 2020. A majority of our real estate leases include options to extend the lease and options to early terminate the lease. Leases with an early termination option generally involve a termination payment. If we are reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and the lease liability. Some of our leases contain residual value guarantees. These are guarantees made to the lessor that the value of an underlying asset returned to the lessor at the end of a lease will be at least a specified amount. Our leases do not contain restrictions or covenants that restrict us from incurring other financial obligations. We do not have any significant leases not yet commenced. For our leases, we have elected to not apply the recognition requirements to leases of less than twelve months. These leases are expensed on a straight-line basis and are not included within the Company's operating lease asset or liability. Lease costs associated with leases of less than twelve months were immaterial for the three and twelve months ended December 31, 2020. We did not have any lease transactions with related parties.
|  |  |  | Other Information
|  |  |  |  | Twelve Months Ended December 31,
(In thousands, except percentage amounts) |  |  |  | 2020 |  | 2019
Lease cost: |  |  |  |  |  |
| Operating lease cost recognized as rent expense |  |  |  | $ | 12,997 |  |  | $ | 13,364 |
| Total lease cost |  |  |  | 12,997 |  |  | 13,364 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
| Operating cash flows related to operating leases |  |  |  | $ | 13,476 |  |  | $ | 13,346 |
Non-cash other information: |  |  |  |
| Right-of-use assets obtained in exchange for new operating lease liabilities |  |  |  | $ | 10,737 |  |  | $ | 6,637 |
|  |  |  |  | December 31, 2020 |  | December 31, 2019
Weighted-average remaining lease term (in years): |  |  |  |
| Operating leases |  |  |  | 11 |  | 11
Weighted-average discount rate: |  |  |  |
| Operating leases |  |  |  | 3.89 | % |  | 4.28 | %
Rent expense was approximately $13.0 million in 2020, $13.4 million in 2019 and $12.5 million in 2018. At December 31, 2020, future lease payments under operating leases were as follows:
(In thousands) |  |  | Operating Leases
2021 |  |  | $ | 11,445 |
2022 |  |  | 7,856 |
2023 |  |  | 6,266 |
2024 |  |  | 4,539 |
2025 |  |  | 4,692 |
After 2025 |  |  | 31,687 |
Total future minimum operating lease payments |  |  | $ | 66,485 |
Less: Imputed interest |  |  | 12,258 |
Present value of operating lease liabilities |  |  | 54,227 |
Less: Current portion operating lease liabilities(a) |  |  | 9,588 |
Noncurrent operating lease liabilities |  |  | $ | 44,639 |
(a) Included in "Warranty reserve and other current liabilities" on the Consolidated Balance Sheet.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + 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 + Details
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