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Leases | 3 Months Ended
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Mar. 31, 2019
Leases [Abstract] |
Leases | Leases The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company's lease contracts is at the Company's sole discretion. Most real estate leases, in particular, include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The Company's leases do not have any significant residual value guarantees or restrictive covenants. As the implicit rate in the Company's leases is not readily determinable, the Company calculates its right of use lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years. See Note 2 for further information regarding the Company's adoption of ASU 2016-02, "Leases." The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at March 31, 2019:
Classification |  | Balance Sheet Location |  | March 31, 2019
Lease Assets |  |  |  |
Operating lease assets |  | Right of Use Asset - Operating Leases |  | $ | 308,166
Finance lease assets |  | Other Assets |  | 22,122
Total lease assets |  |  |  | 330,288
Lease Liabilities |  |  |  |
Current operating lease liabilities |  | Accrued expenses and other |  | 54,979
Current finance lease liabilities |  | Notes payable and current portion of debt |  | 9,684
Total current lease liabilities |  |  |  | 64,663
Noncurrent operating lease liabilities |  | Noncurrent Operating Lease Liabilities |  | 262,663
Noncurrent finance lease liabilities |  | Long-term Debt, Net of Current Portion |  | 11,472
Total noncurrent lease liabilities |  |  |  | 274,135
Total lease liabilities |  |  |  | $ | 338,798
As of March 31, 2019, the Company has entered into additional leases that have not yet commenced. The associated contracts include payments over the respective lease terms totaling $1,789, which are not reflected in the Company's liabilities recorded as of March 31, 2019. These leases will commence during fiscal year 2019 with lease terms ranging from 3 years to 6.4 years. Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term. The following table sets forth the components of the Company's total lease cost for the three months ended March 31, 2019:
Lease Cost |  | Three Months Ended March 31, 2019
Operating lease cost | (a) | $ | 15,545
Finance lease cost: |  |
Amortization of lease asset | (a) (b) | 2,069
Interest on lease liabilities | (c) | 276
Variable lease cost | (a) (d) | 9,178
Total lease cost |  | $ | 27,068
(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively. (b) Included in depreciation and amortization. (c) Included in interest expense. (d) Also includes short term lease costs, which are deemed immaterial. In compliance with ASC 842, the Company must provide the prior year disclosures required under the previous lease guidance (ASC 840) for comparative periods presented herein. Rental expense under operating leases for the three months ended April 1, 2018 was $18,901. The following table sets forth the five-year maturity schedule of the Company's lease liabilities as of March 31, 2019:
Maturity of Lease Liabilities |  | Operating Leases |  | Finance Leases |  | Total
2019 (excluding three months ended March 31, 2019) |  | $ | 45,175 |  | $ | 7,522 |  | $ | 52,697
2020 |  | 53,114 |  | 8,649 |  | 61,763
2021 |  | 45,288 |  | 3,132 |  | 48,420
2022 |  | 39,572 |  | 1,609 |  | 41,181
2023 |  | 36,248 |  | 969 |  | 37,217
Beyond 2023 |  | 188,226 |  | 836 |  | 189,062
Total lease payments |  | $ | 407,623 |  | $ | 22,717 |  | $ | 430,340
Less: Interest |  | 89,981 |  | 1,561 |  | 91,542
Lease Liabilities |  | $ | 317,642 |  | $ | 21,156 |  | $ | 338,798
As presented in our 2018 Form 10-K (under ASC 840), the future minimum rentals under noncancellable operating leases with terms of more than one year, payable over the remaining lives of the leases at December 31, 2018, were as follows:
Period |  | Minimum Future Rental Commitments
2019 |  | $ | 48,200
2020 |  | 41,700
2021 |  | 32,500
2022 |  | 27,300
2023 |  | 21,400
Beyond 2023 |  | 92,300
The following tables set forth the Company's weighted average remaining lease term and discount rates used in the calculation of its outstanding lease liabilities March 31, 2019, along with other lease-related information for the three months ended March 31, 2019:
Lease Term and Discount Rate |  | As of March 31, 2019
Weighted-average remaining lease term (years): |  |
Operating leases |  | 11.4
Finance leases |  | 3.0
Weighted-average discount rate: |  |
Operating leases |  | 4.96% |
Finance leases |  | 5.10% |
Other Information |  | Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows used by operating leases |  | $ | 15,246
Operating cash flows used by finance leases |  | $ | 276
Financing cash flows used by finance leases |  | $ | 2,281
Leased assets obtained in exchange for new operating lease liabilities |  | $ | 661
Leased assets obtained in exchange for new finance lease liabilities |  | $ | —
Leases | Leases The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). The assessment of the certainty associated with the exercise of various lease renewal, termination, and purchase options included in the Company's lease contracts is at the Company's sole discretion. Most real estate leases, in particular, include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The Company's leases do not have any significant residual value guarantees or restrictive covenants. As the implicit rate in the Company's leases is not readily determinable, the Company calculates its right of use lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate, which contemplates and reflects a particular geographical region’s interest rate for the leases active within that region of the Company’s global operations. The Company further utilizes a portfolio approach by assigning a “short” rate to contracts with lease terms of 10 years or less and a “long” rate for contracts greater than 10 years. See Note 2 for further information regarding the Company's adoption of ASU 2016-02, "Leases." The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at March 31, 2019:
Classification |  | Balance Sheet Location |  | March 31, 2019
Lease Assets |  |  |  |
Operating lease assets |  | Right of Use Asset - Operating Leases |  | $ | 308,166
Finance lease assets |  | Other Assets |  | 22,122
Total lease assets |  |  |  | 330,288
Lease Liabilities |  |  |  |
Current operating lease liabilities |  | Accrued expenses and other |  | 54,979
Current finance lease liabilities |  | Notes payable and current portion of debt |  | 9,684
Total current lease liabilities |  |  |  | 64,663
Noncurrent operating lease liabilities |  | Noncurrent Operating Lease Liabilities |  | 262,663
Noncurrent finance lease liabilities |  | Long-term Debt, Net of Current Portion |  | 11,472
Total noncurrent lease liabilities |  |  |  | 274,135
Total lease liabilities |  |  |  | $ | 338,798
As of March 31, 2019, the Company has entered into additional leases that have not yet commenced. The associated contracts include payments over the respective lease terms totaling $1,789, which are not reflected in the Company's liabilities recorded as of March 31, 2019. These leases will commence during fiscal year 2019 with lease terms ranging from 3 years to 6.4 years. Certain of the Company’s leases include variable costs. Variable costs include lease payments that were volume or usage-driven in accordance with the use of the underlying asset, and also non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term. The following table sets forth the components of the Company's total lease cost for the three months ended March 31, 2019:
Lease Cost |  | Three Months Ended March 31, 2019
Operating lease cost | (a) | $ | 15,545
Finance lease cost: |  |
Amortization of lease asset | (a) (b) | 2,069
Interest on lease liabilities | (c) | 276
Variable lease cost | (a) (d) | 9,178
Total lease cost |  | $ | 27,068
(a) Production-related and administrative amounts are included in cost of sales and selling, general and administrative expenses, respectively. (b) Included in depreciation and amortization. (c) Included in interest expense. (d) Also includes short term lease costs, which are deemed immaterial. In compliance with ASC 842, the Company must provide the prior year disclosures required under the previous lease guidance (ASC 840) for comparative periods presented herein. Rental expense under operating leases for the three months ended April 1, 2018 was $18,901. The following table sets forth the five-year maturity schedule of the Company's lease liabilities as of March 31, 2019:
Maturity of Lease Liabilities |  | Operating Leases |  | Finance Leases |  | Total
2019 (excluding three months ended March 31, 2019) |  | $ | 45,175 |  | $ | 7,522 |  | $ | 52,697
2020 |  | 53,114 |  | 8,649 |  | 61,763
2021 |  | 45,288 |  | 3,132 |  | 48,420
2022 |  | 39,572 |  | 1,609 |  | 41,181
2023 |  | 36,248 |  | 969 |  | 37,217
Beyond 2023 |  | 188,226 |  | 836 |  | 189,062
Total lease payments |  | $ | 407,623 |  | $ | 22,717 |  | $ | 430,340
Less: Interest |  | 89,981 |  | 1,561 |  | 91,542
Lease Liabilities |  | $ | 317,642 |  | $ | 21,156 |  | $ | 338,798
As presented in our 2018 Form 10-K (under ASC 840), the future minimum rentals under noncancellable operating leases with terms of more than one year, payable over the remaining lives of the leases at December 31, 2018, were as follows:
Period |  | Minimum Future Rental Commitments
2019 |  | $ | 48,200
2020 |  | 41,700
2021 |  | 32,500
2022 |  | 27,300
2023 |  | 21,400
Beyond 2023 |  | 92,300
The following tables set forth the Company's weighted average remaining lease term and discount rates used in the calculation of its outstanding lease liabilities March 31, 2019, along with other lease-related information for the three months ended March 31, 2019:
Lease Term and Discount Rate |  | As of March 31, 2019
Weighted-average remaining lease term (years): |  |
Operating leases |  | 11.4
Finance leases |  | 3.0
Weighted-average discount rate: |  |
Operating leases |  | 4.96% |
Finance leases |  | 5.10% |
Other Information |  | Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |
Operating cash flows used by operating leases |  | $ | 15,246
Operating cash flows used by finance leases |  | $ | 276
Financing cash flows used by finance leases |  | $ | 2,281
Leased assets obtained in exchange for new operating lease liabilities |  | $ | 661
Leased assets obtained in exchange for new finance lease liabilities |  | $ | —

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