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Leases
 3 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Leases Leases
We have operating and finance leases for certain manufacturing facilities, offices, service and quick response centers, machinery, equipment and automobiles. Our leases have remaining lease terms of up to 33 years. The terms and conditions of our leases may include options to extend or terminate the lease which are considered and included in the lease term when these options are reasonably certain of exercise.
We determine if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. For lease contracts containing more than one lease component, we allocate the contract consideration to each of the lease components on the basis of relative standalone prices in order to identify the lease payments for each lease component.
Right-of-use ("ROU") assets and lease liabilities are recognized in our condensed consolidated balance sheets at the commencement date based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease.
Operating leases are included in operating lease right-of-use assets, net and operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in property plant and equipment, debt due within one year and long-term debt due after one year in our condensed consolidated balance sheets.
We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our condensed consolidated income statements as the obligation is incurred.
We have certain lease contracts where we provide a guarantee to the lessor that the value of an underlying asset will be at least a specified amount at the end of the lease. Estimated amounts expected to be paid for residual value guarantees are included in operating lease liabilities and ROU assets, net.
We had $42.3 million and $34.7 million of legally binding minimum lease payments for operating leases signed but not yet commenced as of March 31, 2020 and December 31, 2019, respectively. We did not have material subleases, leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements.
Other information related to our leases is as follows:
March 31,December 31,
(Amounts in thousands)20202019
Operating Leases:
ROU assets recorded under operating leases $224,627  $220,865  
Accumulated amortization associated with operating leases(42,163) (34,647) 
Total operating leases ROU assets, net$182,464  $186,218  
Liabilities recorded under operating leases (current)$36,841  $36,108  
Liabilities recorded under operating leases (non-current)147,031  151,523  
Total operating leases liabilities $183,872  $187,631  
Finance Leases:
ROU assets recorded under finance leases $19,761  $19,606  
Accumulated depreciation associated with finance leases(7,952) (7,551) 
Total finance leases ROU assets, net(1)$11,809  $12,055  
Total finance leases liabilities(2)$11,700  $11,788  
        The costs components of operating and finance leases are as follows:
March 31,
(Amounts in thousands)20202019
Operating Lease Costs:
Fixed lease expense(3)$14,470  $15,209  
Variable lease expense(3)2,172  1,575  
Total operating lease expense $16,642  $16,784  
Finance Lease Costs:
Depreciation of finance lease ROU assets(3)$1,305  $1,157  
Interest on lease liabilities(4)233  78  
Total finance lease expense$1,538  $1,235  
_____________________
(1) Included in property plant and equipment, net.
(2) Included in debt due within one year and long-term debt due after one year, accordingly.
(3) Included in cost of sales and selling, general and administrative expense, accordingly.
(4) Included in interest expense.
Supplemental cash flows information as of and for the three months ended:
March 31,
(Amounts in thousands, except lease term and discount rate)20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases(1)$17,493  $16,736  
Financing cash flows from finance leases(2)724  1,124  
ROU assets obtained in exchange for lease obligations:
Operating leases$802  $2,922  
Finance leases1,411  3,580  
Weighted average remaining lease term (in years)
Operating leases9 years9 years
Finance leases3 years3 years
Weighted average discount rate (percent)
Operating leases4.5 %4.5 %
Finance leases3.5 %3.6 %
_____________________

(1) Included in our condensed consolidated statement of cash flows, operating activities, prepaid expenses and other assets, net and retirement obligations and other.
(2) Included in our condensed consolidated statement of cash flows, financing activities, payments under other financing arrangements.
Future undiscounted lease payments under operating and finance leases as of March 31, 2020 were as follows (amounts in thousands):
Year ending December 31, Operating
Leases 		Finance Leases
2020 (excluding the three months ended March 31, 2020)$31,199  $3,899  
202134,324  4,056  
202228,631  2,741  
202323,441  1,384  
202418,316  335  
Thereafter85,691  55  
Total future minimum lease payments$221,602  $12,470  
Less: Imputed interest(37,730) (770) 
Total$183,872  $11,700  
Other current liabilities$36,841  $—  
Operating lease liabilities147,031  —  
Debt due within one year—  4,653  
Long-term debt due after one year—  7,047  
Total $183,872  $11,700  
Leases Leases
We have operating and finance leases for certain manufacturing facilities, offices, service and quick response centers, machinery, equipment and automobiles. Our leases have remaining lease terms of up to 33 years. The terms and conditions of our leases may include options to extend or terminate the lease which are considered and included in the lease term when these options are reasonably certain of exercise.
We determine if a contract is (or contains) a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. For lease contracts containing more than one lease component, we allocate the contract consideration to each of the lease components on the basis of relative standalone prices in order to identify the lease payments for each lease component.
Right-of-use ("ROU") assets and lease liabilities are recognized in our condensed consolidated balance sheets at the commencement date based on the present value of remaining lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease.
Operating leases are included in operating lease right-of-use assets, net and operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in property plant and equipment, debt due within one year and long-term debt due after one year in our condensed consolidated balance sheets.
We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our condensed consolidated income statements as the obligation is incurred.
We have certain lease contracts where we provide a guarantee to the lessor that the value of an underlying asset will be at least a specified amount at the end of the lease. Estimated amounts expected to be paid for residual value guarantees are included in operating lease liabilities and ROU assets, net.
We had $42.3 million and $34.7 million of legally binding minimum lease payments for operating leases signed but not yet commenced as of March 31, 2020 and December 31, 2019, respectively. We did not have material subleases, leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements.
Other information related to our leases is as follows:
March 31,December 31,
(Amounts in thousands)20202019
Operating Leases:
ROU assets recorded under operating leases $224,627  $220,865  
Accumulated amortization associated with operating leases(42,163) (34,647) 
Total operating leases ROU assets, net$182,464  $186,218  
Liabilities recorded under operating leases (current)$36,841  $36,108  
Liabilities recorded under operating leases (non-current)147,031  151,523  
Total operating leases liabilities $183,872  $187,631  
Finance Leases:
ROU assets recorded under finance leases $19,761  $19,606  
Accumulated depreciation associated with finance leases(7,952) (7,551) 
Total finance leases ROU assets, net(1)$11,809  $12,055  
Total finance leases liabilities(2)$11,700  $11,788  
        The costs components of operating and finance leases are as follows:
March 31,
(Amounts in thousands)20202019
Operating Lease Costs:
Fixed lease expense(3)$14,470  $15,209  
Variable lease expense(3)2,172  1,575  
Total operating lease expense $16,642  $16,784  
Finance Lease Costs:
Depreciation of finance lease ROU assets(3)$1,305  $1,157  
Interest on lease liabilities(4)233  78  
Total finance lease expense$1,538  $1,235  
_____________________
(1) Included in property plant and equipment, net.
(2) Included in debt due within one year and long-term debt due after one year, accordingly.
(3) Included in cost of sales and selling, general and administrative expense, accordingly.
(4) Included in interest expense.
Supplemental cash flows information as of and for the three months ended:
March 31,
(Amounts in thousands, except lease term and discount rate)20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases(1)$17,493  $16,736  
Financing cash flows from finance leases(2)724  1,124  
ROU assets obtained in exchange for lease obligations:
Operating leases$802  $2,922  
Finance leases1,411  3,580  
Weighted average remaining lease term (in years)
Operating leases9 years9 years
Finance leases3 years3 years
Weighted average discount rate (percent)
Operating leases4.5 %4.5 %
Finance leases3.5 %3.6 %
_____________________

(1) Included in our condensed consolidated statement of cash flows, operating activities, prepaid expenses and other assets, net and retirement obligations and other.
(2) Included in our condensed consolidated statement of cash flows, financing activities, payments under other financing arrangements.
Future undiscounted lease payments under operating and finance leases as of March 31, 2020 were as follows (amounts in thousands):
Year ending December 31, Operating
Leases 		Finance Leases
2020 (excluding the three months ended March 31, 2020)$31,199  $3,899  
202134,324  4,056  
202228,631  2,741  
202323,441  1,384  
202418,316  335  
Thereafter85,691  55  
Total future minimum lease payments$221,602  $12,470  
Less: Imputed interest(37,730) (770) 
Total$183,872  $11,700  
Other current liabilities$36,841  $—  
Operating lease liabilities147,031  —  
Debt due within one year—  4,653  
Long-term debt due after one year—  7,047  
Total $183,872  $11,700