Leases

3 Months Ended

Mar. 31, 2020

Orion has entered into lease contracts as a lessee and is not acting as a lessor. The vast majority of Orion’s lease contracts are concerning operational items such as rail cars, company cars, offices and office equipment.

The recorded right-of-use assets as of March 31, 2020 amounted to $29.7 million, and the corresponding lease liabilities amounted to $31.3 million, of which $8.6 million were recorded within other current liabilities and $22.7 million as other liabilities.

The weighted remaining average minimum lease period is 2.7 years.

The undiscounted minimum lease payments are due in and reconcile to the discounted lease liabilities as follows:


	March 31, 2020
	(In thousands)
Next 12 months	$	8,593
1 to 2 years	7,291
2 to 3 years	6,391
3 to 4 years	5,578
4 to 5 years	4,301
More than 5 years	4,644
Total undiscounted minimum lease payments	36,799
Discount	(5,501)
Lease liability (current and non-current)	$	31,298

The weighted average discount rate applied to the lease liabilities is 6.43%.

Finance lease costs were immaterial for the three months ended March 31, 2020. Operating lease costs amounted in total to $3.2 million for the three months ended March 31, 2020 and were recorded as operating expenses under cost of sales, selling, general and administrative expenses and under research and development cost. Cash paid for amounts included in the measurement of lease liabilities from operating leases was $2.2 million for March 31, 2020 and $2.7 million for the three months ended March 31, 2019 and was immaterial for finance leases during the same periods.

In addition to the above, we entered into a forward-starting lease agreement in October 2016, for a district heating facility in Cologne, Germany, where we plan to operate the equipment to generate the required heat energy. The lessor, the public utility of our neighbor city and its agents, is currently constructing the facilities at our location, with the lease scheduled to commence by the end of 2020 after construction is completed. The lease agreement will have a total of approximately $35.0 million in undiscounted future lease payments over the 20 year term of the lease.