XML 23 R12.htm IDEA: XBRL DOCUMENT

LEASES

9 Months Ended

Sep. 30, 2020

The Company leases identified assets comprising real estate and equipment. Real estate leases consist primarily of office and warehouse space and equipment leases consist of vehicles and warehouse equipment. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company’s operating leases are comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles.

Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date. Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of real estate taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the condensed consolidated statement of income. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and is included in operating expenses in the condensed consolidated statement of income. Interest expense on finance leases is calculated using the amortized cost basis and is included in interest and other (expense) income, net in the condensed consolidated statement of income.

The Company’s leases have remaining lease terms of less than one year to 13 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less.

The components of lease cost were comprised of the following:


	Three-Months		Three-Months		Nine-Months		Nine-Months
	Ended September 30,		Ended September 30,		Ended September 30,		Ended September 30,
	2020		2019		2020		2019
Operating lease cost	$	1,161	$	1,223	$	3,499	$	3,548

Short-term lease cost		856		993		2,440		2,552

Variable lease cost		242		168		564		503

Finance leases:
Amortization of ROU assets		177		172		511		346
Interest on lease liabilities		9		13		34		43
Finance lease cost		186		185		545		389

Total lease cost	$	2,445	$	2,569	$	7,048	$	6,992

Supplemental cash flow information for the following periods:


	Nine-Months		Nine-Months
	Ended September 30,		Ended September 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	3,081	$	3,026
Operating cash outflows from finance leases		33		43
Financing cash outflows from finance leases		2,500		1,497

ROU assets obtained in exchange for lease obligations:
Finance leases		2,231		2,499
Operating leases		2,117		27,965

ROU assets for operating and finance leases recognized in the condensed consolidated balance sheets were comprised of the following at:


	September 30, 2020
	Real Estate		Equipment		Total		Balance Sheet Location
Operating leases	$	22,783	$	214	$	22,997	Other Assets
Finance leases		—		2,781		2,781	Property and Equipment, net


	December 31, 2019
	Real Estate		Equipment		Total		Balance Sheet Location
Operating leases	$	30,926	$	416	$	31,342	Other Assets
Finance leases		—		2,632		2,632	Property and Equipment, net

Operating and finance lease liabilities recognized in the condensed consolidated balance sheets were as follows at:


	September 30, 2020
	Operating Leases		Finance Leases
Accrued liabilities	$	2,982	$	1,214
Other liabilities		17,535		—
Total	$	20,517	$	1,214


	December 31, 2019
	Operating Leases		Finance Leases
Accrued liabilities	$	2,812	$	1,485
Other liabilities		25,651		—
Total	$	28,463	$	1,485

The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases at September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020
	Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	9.7		0.6
Weighted-average discount rate	3.6	%	2.1	%


	December 31, 2019
	Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	10.1			0.6
Weighted-average discount rate	3.1	%		2.9	%

The following table reconciles the undiscounted future lease payments for operating and finance leases to the operating and finance leases recorded in the condensed consolidated balance sheet at September 30, 2020:


	Undiscounted Future Lease Payments
	Operating Leases		Finance Leases
2020 (excluding the nine-months ended September 30, 2020)	$	811	$	588
2021		3,573		633
2022		2,898		—
2023		2,185		—
2024		1,890		—
2025 and thereafter		13,188		—
Total lease payments		24,545		1,221
Less imputed interest		(4,028)		(7)
Total	$	20,517	$	1,214

As of September 30, 2020, the Company did not have any significant additional operating or finance leases that have not yet commenced.