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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
(a) Lease Commitments
All of our lease right-of-use (“ROU”) assets and lease liabilities are related to operating and finance leases, where the lease term exceeds one year. Our operating leases are generally for railcars, office space, and equipment and our finance leases are generally related to equipment used to conduct our operations. These operating and finance leases were discounted using a weighted average rate of 3.689% and 5.27%, respectively, which is based on a weighted average borrowing rate of specific debt. Non-variable lease costs include the amortization of the asset recorded on a straight-line basis. Variable lease components are non-index based payments based on performance or usage of the underlying asset. We have no material lessor or sublease income.
Operating Leases
The components of lease cost for operating leases are as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
(In thousands)
Lease cost$24,208 $24,488 
Variable lease cost713 1,090 
Operating lease expense$24,921 $25,578 
The operating lease liabilities on a discounted basis arising from obtaining ROU assets as of December 31, 2021 were comprised as follows:
Leased Asset ClassPolymerChemicalPercentageAverage Months Remaining on the LeaseWeighted Average in Months
(In thousands)
Railcars$1,860 $21,261 23.4 %388.9
Buildings28,677 11,068 40.3 %3915.7
Equipment6,396 16,181 22.9 %306.9
Land6,806 40 6.9 %23216.1
Other1,769 4,682 6.5 %241.5
Total$45,508 $53,232 49.1
The following tables show the undiscounted cash flows for the operating lease liabilities.
 December 31, 2021
 (In thousands)
2022$23,410 
202320,538 
202415,895 
202513,569 
202612,094 
Thereafter25,567 
Total undiscounted operating lease liabilities111,073 
Present value discount(12,356)
Foreign currency and other23 
Total discounted operating lease liabilities$98,740 
 December 31, 2020
 (In thousands)
2020$21,098 
202115,992 
202214,309 
202310,668 
20248,605 
Thereafter26,988 
Total undiscounted operating lease liabilities97,660 
Present value discount(11,474)
Foreign currency and other11 
Total discounted operating lease liabilities$86,197 
Finance Leases
The components of lease cost for finance leases are as follows:
Year Ended December 31, 2021Year Ended December 31, 2020
(In thousands)
Lease amortization$1,021 $711 
Lease interest162 53 
Finance lease expense$1,183 $764 
The finance lease liabilities on a discounted basis arising from obtaining ROU assets as of December 31, 2021 were comprised as follows:
Leased Asset ClassPolymerChemicalPercentageAverage Months Remaining on the LeaseWeighted Average in Months
(In thousands)
Equipment$645 $2,518 100.0 %6160.9
Total$645 $2,518 60.9
The following tables show the undiscounted cash flows for the finance lease liabilities.
 December 31, 2021
 (In thousands)
2022$1,105 
20231,147 
20241,147 
202518 
20263 
Thereafter— 
Total undiscounted finance lease liabilities3,420 
Present value discount(262)
Foreign currency and other5 
Total discounted finance lease liabilities$3,163 
 December 31, 2020
 (In thousands)
2021$232 
2022232 
2023232 
2024232 
2025— 
Thereafter— 
Total undiscounted finance lease liabilities928 
Present value discount(92)
Foreign currency and other(1)
Total discounted finance lease liabilities$835 
These finance lease liabilities are included within current and long-term debt on the Consolidated Balance
Sheet. See Note 8 Long-Term Debt for additional information.
(b) Environmental and Safety Matters
Our finished products are not generally classified as hazardous under U.S. environmental laws. However, our operations involve the handling, transportation, treatment, and disposal of potentially hazardous materials that are extensively regulated by environmental, health and safety laws, regulations, and permit requirements. Environmental permits required for
our operations are subject to periodic renewal and can be revoked or modified for cause or when new or revised environmental requirements are implemented. Changing and increasingly stringent environmental requirements can affect the manufacturing, handling, processing, distribution and use of our chemical products and the raw materials used to produce such products and, if so affected, our business and operations may be materially and adversely affected. In addition, changes in environmental requirements can cause us to incur substantial costs in upgrading or redesigning our facilities and processes, including waste treatment, disposal, and other waste handling practices and equipment.
We conduct environmental management programs designed to maintain compliance with applicable environmental requirements at all of our facilities. We routinely conduct inspection and surveillance programs designed to detect and respond to leaks or spills of regulated hazardous substances and to identify and correct identified regulatory deficiencies. However, a business risk inherent with chemical operations is the potential for personal injury and property damage claims from employees, contractors and their employees, and nearby landowners and occupants. While we believe our business operations and facilities generally are operated in compliance, in all material respects, with all applicable environmental and health and safety requirements, we cannot be sure that past practices or future operations will not result in material claims or regulatory action, require material environmental expenditures, or result in exposure or injury claims by employees, contractors and their employees, and the public. Some risk of environmental costs and liabilities are inherent in our operations and products, as it is with other companies engaged in similar businesses.
Our Belpre, Ohio, facility is subject to a number of actual and/or potential environmental liabilities primarily relating to contamination caused by former operations at this facility. Some environmental laws could impose on us the entire costs of cleanup regardless of fault, legality of the original disposal, or ownership of the disposal site. In some cases, the governmental entity with jurisdiction could seek an assessment for damage to the natural resources caused by contamination from this site. Shell Chemicals has agreed, subject to certain limitations, in time and amounts, to indemnify us against most environmental liabilities related to the acquired facility that arose from conditions existing prior to the closing.
We had no material operating expenditures for environmental fines, penalties, government imposed remedial, or corrective actions in each of the years ended December 31, 2021, 2020, and 2019, respectively.
As of December 31, 2021 and 2020, we have recorded an environment obligation and corresponding receivable of $2.5 million and $2.2 million, respectively, relating to an indemnification agreement with International Paper, our Chemical segment's former owner.
(c) Legal Proceedings
We received an initial notice from the tax authorities in Brazil during the fourth quarter of 2012 in connection with tax credits that were generated from the purchase of certain goods which were subsequently applied by us against taxes owed. The tax authorities are currently assessing R$10.2 million, or approximately $1.8 million, including penalties and interest.. We have appealed the assertion by the tax authorities in Brazil that the goods purchased were not eligible to earn the credits. While the outcome of this proceeding cannot be predicted with certainty, we do not expect this matter to have a material adverse effect upon our financial position, results of operations, or cash flows.
We and certain of our subsidiaries, from time to time, are parties to various other legal proceedings, claims, and disputes that have arisen in the ordinary course of business. These claims may involve significant amounts, some of which would not be covered by insurance. A substantial settlement payment or judgment in excess of our accruals could have a material adverse effect on our financial position, results of operations or cash flows. While the outcome of these proceedings cannot be predicted with certainty, we do not expect any of these existing matters, individually or in the aggregate, to have a material adverse effect upon our financial position, results of operations or cash flows.
(d) Asset Retirement Obligations (“ARO”)
The changes in the aggregate carrying amount of our ARO liability are as follows: 
December 31,
 20212020
 (In thousands)
Beginning balance$6,332 $6,523 
Additional accruals 316 119 
Accretion expense407 348 
Obligations settled(1,285)(1,164)
Foreign currency translation(383)506 
Ending balance$5,387 $6,332 
In the first quarter of 2021, the Company recorded an ARO of $0.3 million related to the office rebuild of our research facility in Europe.