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Leases | 6 Months Ended
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Jun. 30, 2021
Leases [Abstract] |
Leases | Leases We had a finance lease obligation related to our manufacturing facility in Eschenbach, Germany. Under the terms of the lease agreement, we had an option to purchase the property upon the expiration of the lease on June 30, 2021 at a price which was the greater of (i) the then-current market value or (ii) the residual book value of the land including the buildings and installations thereon. We exercised this purchase option with a net cash payment of $5.0 million on June 30, 2021, extinguishing the remaining finance lease obligation and finance lease right-of-use asset related to this facility. Our finance lease obligation related to this facility was $4.2 million just prior to the exercise of the purchase option and $4.5 million as of December 31, 2020. The finance lease right-of-use asset balance for this facility was $6.1 million just prior to the exercise of the purchase option and $6.5 million as of December 31, 2020, respectively. Accumulated amortization related to this finance lease right-of-use asset was $4.5 million just prior to the exercise of the purchase option and as of June 30, 2021. The aggregate of all other finance lease obligations, finance lease right-of-use assets and related accumulated amortization, were immaterial as of June 30, 2021 and December 31, 2020. Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020. Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020. Payments made on the principal portion of our finance lease obligations were immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020, excluding the $5.0 million net cash payment to exercise the Eschenbach, Germany manufacturing facility purchase option. We have operating leases primarily related to building space and vehicles. Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option. The exercise of lease renewal options is at our sole discretion. We account for lease components separately from non-lease components. The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term. Our expenses and payments for operating leases were as follows:
| Three Months Ended |  | Six Months Ended
(Dollars in thousands) | June 30, 2021 |  | June 30, 2020 |  | June 30, 2021 |  | June 30, 2020
Operating leases expense | $ | 779 |  |  | $ | 694 |  |  | $ | 1,460 |  |  | $ | 1,422 |
Short-term leases expense | $ | 56 |  |  | $ | 107 |  |  | $ | 130 |  |  | $ | 230 |
Payments on operating lease obligations | $ | 665 |  |  | $ | 722 |  |  | $ | 1,335 |  |  | $ | 1,468 |
Our assets and liabilities balances related to finance and operating leases reflected in the condensed consolidated statements of financial position were as follows:
(Dollars in thousands) | Location in Statements of Financial Position |  | June 30, 2021 |  | December 31, 2020
Finance lease right-of-use assets | Property, plant and equipment, net |  | $ | 418 |  |  | $ | 7,017 |
Operating lease right-of-use assets | Other long-term assets |  | $ | 4,565 |  |  | $ | 4,216 |
Finance lease obligations, current portion | Other accrued liabilities |  | $ | 219 |  |  | $ | 4,755 |
Finance lease obligations, non-current portion | Other long-term liabilities |  | $ | 161 |  |  | $ | 322 |
Total finance lease obligations |  |  | $ | 380 |  |  | $ | 5,077 |
Operating lease obligations, current portion | Other accrued liabilities |  | $ | 2,164 |  |  | $ | 2,275 |
Operating lease obligations, non-current portion | Other long-term liabilities |  | $ | 2,431 |  |  | $ | 2,219 |
Total operating lease obligations |  |  | $ | 4,595 |  |  | $ | 4,494 |
Net Future Minimum Lease Payments The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of June 30, 2021:
| Finance |  | Operating
(Dollars in thousands) | Leases Signed |  | Less: Leases Not Yet Commenced |  | Leases in Effect |  | Leases Signed |  | Less: Leases Not Yet Commenced |  | Leases in Effect
2021 | 15 |  |  | — |  |  | 15 |  |  | 1,232 |  |  | (10) |  |  | 1,222 |
2022 | 412 |  |  | (218) |  |  | 194 |  |  | 2,057 |  |  | (33) |  |  | 2,024 |
2023 | 478 |  |  | (291) |  |  | 187 |  |  | 1,238 |  |  | (33) |  |  | 1,205 |
2024 | 291 |  |  | (291) |  |  | — |  |  | 323 |  |  | (24) |  |  | 299 |
2025 | 291 |  |  | (291) |  |  | — |  |  | 43 |  |  | (5) |  |  | 38 |
Thereafter | 362 |  |  | (362) |  |  | — |  |  | 7 |  |  | (4) |  |  | 3 |
Total lease payments | 1,849 |  |  | (1,453) |  |  | 396 |  |  | 4,900 |  |  | (109) |  |  | 4,791 |
Less: Interest | (75) |  |  | 59 |  |  | (16) |  |  | (199) |  |  | 3 |  |  | (196) |
Present Value of Net Future Minimum Lease Payments | 1,774 |  |  | (1,394) |  |  | 380 |  |  | 4,701 |  |  | (106) |  |  | 4,595 |
The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:
| Finance Leases |  | Operating Leases
Weighted Average Remaining Lease Term | 2.3 years |  | 2.4 years
Weighted Average Discount Rate | 3.70% |  | 3.58%
Leases | Leases We had a finance lease obligation related to our manufacturing facility in Eschenbach, Germany. Under the terms of the lease agreement, we had an option to purchase the property upon the expiration of the lease on June 30, 2021 at a price which was the greater of (i) the then-current market value or (ii) the residual book value of the land including the buildings and installations thereon. We exercised this purchase option with a net cash payment of $5.0 million on June 30, 2021, extinguishing the remaining finance lease obligation and finance lease right-of-use asset related to this facility. Our finance lease obligation related to this facility was $4.2 million just prior to the exercise of the purchase option and $4.5 million as of December 31, 2020. The finance lease right-of-use asset balance for this facility was $6.1 million just prior to the exercise of the purchase option and $6.5 million as of December 31, 2020, respectively. Accumulated amortization related to this finance lease right-of-use asset was $4.5 million just prior to the exercise of the purchase option and as of June 30, 2021. The aggregate of all other finance lease obligations, finance lease right-of-use assets and related accumulated amortization, were immaterial as of June 30, 2021 and December 31, 2020. Amortization expense related to our finance lease right-of-use assets, which is primarily included in the “Cost of sales” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020. Interest expense related to our finance lease obligations, which is included in the “Interest expense, net” line item of the condensed consolidated statements of operations, was immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020. Payments made on the principal portion of our finance lease obligations were immaterial for each of the three- and six-month periods ended June 30, 2021 and 2020, excluding the $5.0 million net cash payment to exercise the Eschenbach, Germany manufacturing facility purchase option. We have operating leases primarily related to building space and vehicles. Renewal options are included in the lease term to the extent we are reasonably certain to exercise the option. The exercise of lease renewal options is at our sole discretion. We account for lease components separately from non-lease components. The incremental borrowing rate represents our ability to borrow on a collateralized basis over a similar lease term. Our expenses and payments for operating leases were as follows:
| Three Months Ended |  | Six Months Ended
(Dollars in thousands) | June 30, 2021 |  | June 30, 2020 |  | June 30, 2021 |  | June 30, 2020
Operating leases expense | $ | 779 |  |  | $ | 694 |  |  | $ | 1,460 |  |  | $ | 1,422 |
Short-term leases expense | $ | 56 |  |  | $ | 107 |  |  | $ | 130 |  |  | $ | 230 |
Payments on operating lease obligations | $ | 665 |  |  | $ | 722 |  |  | $ | 1,335 |  |  | $ | 1,468 |
Our assets and liabilities balances related to finance and operating leases reflected in the condensed consolidated statements of financial position were as follows:
(Dollars in thousands) | Location in Statements of Financial Position |  | June 30, 2021 |  | December 31, 2020
Finance lease right-of-use assets | Property, plant and equipment, net |  | $ | 418 |  |  | $ | 7,017 |
Operating lease right-of-use assets | Other long-term assets |  | $ | 4,565 |  |  | $ | 4,216 |
Finance lease obligations, current portion | Other accrued liabilities |  | $ | 219 |  |  | $ | 4,755 |
Finance lease obligations, non-current portion | Other long-term liabilities |  | $ | 161 |  |  | $ | 322 |
Total finance lease obligations |  |  | $ | 380 |  |  | $ | 5,077 |
Operating lease obligations, current portion | Other accrued liabilities |  | $ | 2,164 |  |  | $ | 2,275 |
Operating lease obligations, non-current portion | Other long-term liabilities |  | $ | 2,431 |  |  | $ | 2,219 |
Total operating lease obligations |  |  | $ | 4,595 |  |  | $ | 4,494 |
Net Future Minimum Lease Payments The following table includes future minimum lease payments under finance and operating leases together with the present value of the net future minimum lease payments as of June 30, 2021:
| Finance |  | Operating
(Dollars in thousands) | Leases Signed |  | Less: Leases Not Yet Commenced |  | Leases in Effect |  | Leases Signed |  | Less: Leases Not Yet Commenced |  | Leases in Effect
2021 | 15 |  |  | — |  |  | 15 |  |  | 1,232 |  |  | (10) |  |  | 1,222 |
2022 | 412 |  |  | (218) |  |  | 194 |  |  | 2,057 |  |  | (33) |  |  | 2,024 |
2023 | 478 |  |  | (291) |  |  | 187 |  |  | 1,238 |  |  | (33) |  |  | 1,205 |
2024 | 291 |  |  | (291) |  |  | — |  |  | 323 |  |  | (24) |  |  | 299 |
2025 | 291 |  |  | (291) |  |  | — |  |  | 43 |  |  | (5) |  |  | 38 |
Thereafter | 362 |  |  | (362) |  |  | — |  |  | 7 |  |  | (4) |  |  | 3 |
Total lease payments | 1,849 |  |  | (1,453) |  |  | 396 |  |  | 4,900 |  |  | (109) |  |  | 4,791 |
Less: Interest | (75) |  |  | 59 |  |  | (16) |  |  | (199) |  |  | 3 |  |  | (196) |
Present Value of Net Future Minimum Lease Payments | 1,774 |  |  | (1,394) |  |  | 380 |  |  | 4,701 |  |  | (106) |  |  | 4,595 |
The following table includes information regarding the lease term and discount rates utilized in the calculation of the present value of net future minimum lease payments:
| Finance Leases |  | Operating Leases
Weighted Average Remaining Lease Term | 2.3 years |  | 2.4 years
Weighted Average Discount Rate | 3.70% |  | 3.58%

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