XML 31 R9.htm IDEA: XBRL DOCUMENT

LEASES

9 Months Ended

Sep. 30, 2019

We are the lessee in a lease contract when we obtain the right to control the asset. We lease certain land, office space, equipment and vehicles. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is primarily at our discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our lease agreements include rental payments based on a percentage of volume sold over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Where observable, we use the implicit interest rate in determining the present value of future payments. Where the implicit interest rate is not observable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. We give consideration to our outstanding debt as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates.



Leases ($ in millions)	Balance Sheet Classification	September 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	69.3
Finance lease assets	Property, plant and equipment, net	98.0		⁽¹⁾
Total lease assets		$	167.3
Liabilities:
Current liabilities:
Operating	Current operating lease liabilities	$	13.5
Finance	Current maturities of long-term debt	26.6
Long-term liabilities:
Operating	Long-term operating lease liabilities	58.6
Finance	Long-term debt, net of current maturities	45.5
Total lease liabilities		$	144.2

(1) Net of accumulated amortization of $23.6 million.



Lease Cost ($ in millions)	Statement of Operations Classification	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	Selling, general and administrative expenses	$	6.8	⁽¹⁾	$	19.8	⁽²⁾
Finance lease cost:
Amortization of leased assets	Depreciation, depletion and amortization	3.0			8.6
Interest on lease liabilities	Interest expense, net	0.6			1.9
Total finance lease cost		3.6			10.5
Total		$	10.4		$	30.3

(1) Includes short-term lease and variable lease costs of approximately $1.9 million.

(2) Includes short-term lease and variable lease costs of approximately $5.2 million.



Maturity of Lease Liabilities ($ in millions)	Operating Leases		Finance Leases		Total
2019 (remainder of year)	$	4.6	$	10.4	$	15.0
2020	16.7		24.1		40.8
2021	14.9		19.3		34.2
2022	11.9		13.4		25.3
2023	10.3		7.9		18.2
2024	8.5		1.8		10.3
Thereafter	23.6		—		23.6
Total lease payments	90.5		76.9		167.4
Less interest	18.4		4.8		23.2
Present value of lease liabilities	$	72.1	$	72.1	$	144.2



Lease Term and Discount Rate	September 30, 2019
Weighted-average remaining lease term (years):
Operating leases	6.6
Finance leases	3.2
Weighted-average discount rate:
Operating leases	6.2	%
Finance leases	3.8	%



Other Information ($ in millions)	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	14.0
Operating cash flows for finance leases	1.9
Financing cash flows for finance leases	16.2
Leased assets obtained in exchange for new finance lease liabilities	17.1
Leased assets obtained in exchange for new operating lease liabilities	4.7

LEASES



Leases ($ in millions)	Balance Sheet Classification	September 30, 2019
Assets:
Operating lease assets	Operating lease assets	$	69.3
Finance lease assets	Property, plant and equipment, net	98.0		⁽¹⁾
Total lease assets		$	167.3
Liabilities:
Current liabilities:
Operating	Current operating lease liabilities	$	13.5
Finance	Current maturities of long-term debt	26.6
Long-term liabilities:
Operating	Long-term operating lease liabilities	58.6
Finance	Long-term debt, net of current maturities	45.5
Total lease liabilities		$	144.2

(1) Net of accumulated amortization of $23.6 million.



Lease Cost ($ in millions)	Statement of Operations Classification	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Operating lease cost	Selling, general and administrative expenses	$	6.8	⁽¹⁾	$	19.8	⁽²⁾
Finance lease cost:
Amortization of leased assets	Depreciation, depletion and amortization	3.0			8.6
Interest on lease liabilities	Interest expense, net	0.6			1.9
Total finance lease cost		3.6			10.5
Total		$	10.4		$	30.3

(1) Includes short-term lease and variable lease costs of approximately $1.9 million.

(2) Includes short-term lease and variable lease costs of approximately $5.2 million.



Maturity of Lease Liabilities ($ in millions)	Operating Leases		Finance Leases		Total
2019 (remainder of year)	$	4.6	$	10.4	$	15.0
2020	16.7		24.1		40.8
2021	14.9		19.3		34.2
2022	11.9		13.4		25.3
2023	10.3		7.9		18.2
2024	8.5		1.8		10.3
Thereafter	23.6		—		23.6
Total lease payments	90.5		76.9		167.4
Less interest	18.4		4.8		23.2
Present value of lease liabilities	$	72.1	$	72.1	$	144.2



Lease Term and Discount Rate	September 30, 2019
Weighted-average remaining lease term (years):
Operating leases	6.6
Finance leases	3.2
Weighted-average discount rate:
Operating leases	6.2	%
Finance leases	3.8	%



Other Information ($ in millions)	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	14.0
Operating cash flows for finance leases	1.9
Financing cash flows for finance leases	16.2
Leased assets obtained in exchange for new finance lease liabilities	17.1
Leased assets obtained in exchange for new operating lease liabilities	4.7