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Leases, Codification Topic 842 | 3 Months Ended
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Dec. 31, 2019
Leases [Abstract] |
Leases of Lessee Disclosure | Leases We adopted the new leasing standard utilizing the modified retrospective approach on October 1, 2019. Adoption of the new standard resulted in an increase to total assets and liabilities due to the recording of lease right-of-use assets (“ROU”) and lease liabilities related to our operating lease portfolio. We elected the package of three practical expedients for transition, which include the carry forward of our leases without reassessing whether any contracts are leases or contain leases, lease classification and initial direct costs and applying hindsight when determining the lease term and when assessing impairment of right-of-use assets at the adoption date. This allows us to update our assessments according to new information and changes in facts and circumstances that have occurred since lease inception. Presentation of Leases The Company leases certain office, warehouse, manufacturing, distribution, and research and development facilities and equipment under operating leases. Our leases have remaining lease terms of 1 year to 14 years. The terms and conditions of our leases may include options to extend or terminate the lease which are considered and included in the lease term when these options are reasonably certain of exercise. We determine if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. ROU assets and lease liabilities are recognized in our condensed consolidated balance sheets at the commencement date based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease. Operating leases are included in other noncurrent assets, other current liabilities and noncurrent liabilities in our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt in our condensed consolidated balance sheets. For all classes of leased assets, we have applied an accounting policy election to exclude short-term leases from recognition in our condensed consolidated balance sheets. A short-term lease has a lease term of 12 months or less at the commencement date and does not include a purchase option that is reasonably certain of exercise. We recognize short-term lease expense in our condensed consolidated income statements on a straight-line basis over the lease term. Our short-term lease expense for the quarter ended December 31, 2019 and short-term lease commitments at December 31, 2019 are immaterial. We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our condensed consolidated income statements as the obligation is incurred. At December 31, 2019, we had no material, legally-binding minimum lease payments for operating leases signed but not yet commenced. We did not have material subleases, leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements. The components of lease cost for the three months ended December 31, 2019 are presented below, in millions.
Operating lease cost | $ | 1.6 |
Finance lease cost | 0.3 |
Total lease expense | $ | 1.9 |
Supplemental information related to leases for the three months ended December 31, 2019 is presented below, in millions.
Cash Flow Information: |
Operating cash flows from operating leases | $ | 1.4 |
Financing cash flows from finance leases | $ | 0.3 |
Supplemental information related to leases as of December 31, 2019 is presented below, in millions.
Balance Sheet Information: |  |  |
Right of use assets |  | Balance Sheet Caption |
Operating leases |  | Other noncurrent assets | $ | 27.2 |
Finance leases |  | Plant, property and equipment | 2.0 |
Total right of use assets |  |  | $ | 29.2 |
Lease liabilities |  | Balance Sheet Caption |
Operating leases - current |  | Other current liabilities | $ | 4.4 |
Operating leases - noncurrent |  | Other noncurrent liabilities | 24.5
Finance leases - current |  | Current portion of long-term debt | 0.9
Finance leases - noncurrent |  | Long-term debt | 1.1
Total lease liabilities |  |  | $ | 30.9 |
Additional supplemental information related to leases as of December 31, 2019 is presented below.
Lease term and discount rate: |
Weighted-average remaining lease term (years): |
Operating leases | 8.41
Finance leases | 2.63
Weighted-average interest rate: |
Operating leases | 5.78 | %
Finance leases | 5.37 | %
Total lease liabilities at December 31, 2019 have scheduled maturities as follows:
| Operating Leases |  |  | Finance Leases |
| (in millions) |  |
2020 | $ | 4.5 |  |  | $ | 0.9 |
2021 | 5.1 |  |  | 0.9 |
2022 | 4.3 |  |  | 0.6 |
2023 | 3.9 |  |  | 0.2 |
2024 | 3.7 |  |  | — |
Thereafter | 16.1 |  |  | — |
Total lease payments | 37.6 |  |  | 2.6 |
Less: imputed interest | 8.7 |  |  | 0.6 |
Present value of lease liabilities | $ | 28.9 |  |  | $ | 2.0 |

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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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