XML 24 R14.htm IDEA: XBRL DOCUMENT
v3.19.2

Leases | 6 Months Ended
--- | ---
Jun. 30, 2019
Leases [Abstract] |
Leases |
8. | LEASES
The Company adopted ASU No. 2016-02, Leases (Topic 842), on January 1, 2019. This new accounting standard requires a dual approach for lessee accounting whereby a lessee accounts for lease arrangements as either finance leases or operating leases. The lease classification affects the pattern of expense recognition in the income statement. The most significant impact of adopting ASU No. 2016-02, Leases (Topic 842) is that a lessee is now required to recognize a “right-of-use” (ROU) asset and corresponding lease liability for operating lease agreements. ROU assets represent a right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating leases are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. The Company elected to apply the new lease standard at adoption as allowed under ASU No. 2018-11 and, as a result, the Company did not retrospectively adjust prior periods presented. The Company elected the practical expedient to not separate non-lease components from lease components for all asset classes and the practical expedient which permits a Company to not reassess prior conclusions about lease identification, lease classifications and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being applicable to the Company. In addition, the Company made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. Upon adoption of ASC 842, the Company recognized $42.4 million of ROU assets and related operating lease liabilities on its balance sheet. There was no cumulative catch-up adjustment made to beginning retained earnings. Significant judgments used by the Company to determine whether a contract is or contains a lease include: (i) determining whether any explicitly or implicitly identified assets have been identified in the contract and (ii) determining whether the Company obtains substantially all of the economic benefits from the use of an underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company’s operating leases are primarily comprised of railcars, real estate, storage tanks, autos, trailers and manufacturing/office equipment. Railcars and real estate comprise approximately 49 percent and 38 percent, respectively, of the Company’s consolidated ROU asset balance. With the exception of real estate, typical lease terms range from one to ten years. Real estate lease terms typically range from one to fifty years. The Company’s two principal real estate leases relate to land leases in the Philippines and Singapore. As of June 30, 2019, the Company had additional leases, primarily for leases of real estate and railcars, that have not commenced of approximately $2.0 million. The majority of these leases will commence in the second half of 2019 with lease terms ranging from one to seven years. Variability associated with the Company’s lease obligations typically relates to: (i) additional charges based on usage (i.e. railcar mileage in excess of a specified amount) and, (ii) periodic increases associated with Consumer Price Index (CPI) changes (i.e. land rental payments). Appropriate CPI at the inception of a lease is reflected in the Company’s lease liability balances whereas variability based on usage is typically excluded from lease liability amounts. Some of the Company’s leases include options to extend the lease term but these are typically not recognized as part of the ROU asset or lease liability at inception unless it is reasonably certain the renewal option will be exercised. Determining whether a renewal option is reasonably certain to be exercised requires judgment based on the existing facts and circumstances as well as expectations about future business needs. Renewal options are typically re-assessed within one year or less prior to lease termination when the Company is able to more accurately forecast future business needs. Some of the Company’s lease contracts include options to terminate leases early but these are typically not considered unless it is reasonably certain the early termination option will be exercised. The Company’s leases do not typically carry any residual value guarantees and typically payment is not considered probable when such guarantees are included in the contract. Initial implementation of ASU No. 2016-02, Leases (Topic 842) did not impact compliance with any of the Company’s debt-covenants, nor is it expected to in the future. The majority of the Company’s debt agreements contain language that excludes the impact of any new GAAP accounting change. As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, the Philippines, Singapore and China, typically for five-year increments. The U.S. IBR was used for all other countries as the leases in these countries are not material. The total value of leases that reside in the four countrie s identified above represents approximately 94 percent of the Company’s consolidated ROU asset balance.
(In thousands) | Three months ended June 30, 2019 |  |  | Six months ended June 30, 2019 |
Lease Cost |  |  |  |  |  |  |
Operating lease cost | $ | 2,711 |  |  | $ | 5,399 |
Short-term lease cost |  | 1,148 |  |  |  | 2,118 |
Variable lease cost |  | 233 |  |  |  | 581 |
Total lease cost | $ | 4,092 |  |  | $ | 8,098 |
Other Information |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |
Operating cash flow from operating leases | $ | 2,725 |  |  | $ | 5,421 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | 595 |  |  |  | 889 |
(In thousands) |  |  |  |
Undiscounted Cash Flows: |  |  |  |
2019 (excluding the six months ended June 30, 2019) |  | $ | 5,379 |
2020 |  |  | 9,343 |
2021 |  |  | 6,616 |
2022 |  |  | 5,457 |
2023 |  |  | 4,249 |
Subsequent to 2023 |  |  | 18,011 |
Total Undiscounted Cash Flows |  | $ | 49,055 |
Less: Imputed interest |  |  | (10,356 | )
Present value |  | $ | 38,699 |
Current operating lease liabilities (1) |  |  | 8,987 |
Non-current operating lease liabilities |  |  | 29,712 |
Total lease liabilities |  | $ | 38,699 |
| (1) | This item is included in Accrued liabilities line on the Company’s Condensed Consolidated Balance Sheet.
Weighted-average remaining lease term-operating leases |  | 9 Years
Weighted-average discount rate-operating leases |  | 3.9%
ASC 840 Disclosure As required in transition, the table below summarizes the Company’s future minimum lease payments at December 31, 2018 under ASC 840.
(In thousands) |  |  |  |
Year |  |  |  |
2019 |  | $ | 9,740 |
2020 |  |  | 8,294 |
2021 |  |  | 6,027 |
2022 |  |  | 5,242 |
2023 |  |  | 4,101 |
Subsequent to 2023 |  |  | 16,593 |
Total minimum future rental payments |  | $ | 49,997 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration