LEASES AND PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2020

LEASES AND PROPERTY, PLANT AND EQUIPMENT

The Company leases facilities for executive offices, warehousing, research and development and sales operations and leases various types of equipment under operating and finance lease agreements. The majority of the Company’s real estate leases, in terms of total undiscounted payments, are located in the U.S.

At the effective date of January 1, 2019, the Company adopted ASU No. 2016-02 using a modified retrospective approach applying the standard’s transition provisions provided by such ASU. Refer to Note 1, "Description of Business and Summary of Significant Accounting Policies," in the 2019 Form 10-K for additional information regarding the Company's adoption of ASU No. 2016-02.

During the first and second quarter of 2020, as a result of COVID-19’s impact on the Company’s operations, the Company considered whether indicators of impairment existed for its Property, Plant and Equipment ("PP&E"), including its Right-of-Use ("ROU") assets consisting of the Company's leases as described above. In accordance with ASC Topic 360, "Property, Plant and Equipment," for purposes of recognition and measurement of an impairment loss, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss is recognized only if the carrying amount of a long-lived asset and/or asset group is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset and/or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset

and/or asset group and the impairment loss is measured as the amount by which the carrying amount of a long-lived asset and/or asset group exceeds its fair value. In performing such review, the Company considers several indicators of impairment, including, among other factors, the following: (i) whether there exists any significant adverse change in the extent or manner in which a long-lived asset and/or asset group is being used; (ii) whether there exists any projection or forecast demonstrating losses associated with the use of a long-lived asset and/or asset group; and (iii) whether there exists a current expectation that, more likely than not, a long-lived asset and/or asset group will be sold or otherwise disposed of significantly before the end of its previously-estimated useful life. Following these interim assessments, the Company concluded that the carrying amounts of its PP&E, including its lease ROU assets, were not impaired during the six months ended June 30, 2020.

The following table includes disclosure related to the ASC 842 lease standard for the periods presented, after application of the applicable practical expedients and short-term lease considerations:


	Six Months Ended
	June 30, 2020			June 30, 2019
Lease Cost:
Finance Lease Cost:
Amortization of ROU assets	$	0.2		$	0.1
Interest on lease liabilities	0.1			0.0
Operating Lease Cost	21.8			21.3
Total Lease Cost	$	22.1		$	21.4

Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	0.1			0.0
Operating cash flows from operating leases	19.2			21.0
Financing cash flows from finance leases	0.1			0.4

	June 30, 2020			December 31, 2019
ROU assets for finance leases	0.8			1.0
ROU assets for operating leases	88.4			91.4
Accumulated amortization on ROU assets for finance leases	0.5			0.3
Accumulated amortization on ROU assets for operating leases	29.7			23.2

Weighted-average remaining lease term - finance leases	2.4 years			2.8 years
Weighted-average remaining lease term - operating leases	5.8 years			6.2 years

Weighted-average discount rate - finance leases	15.0		%	15.6		%
Weighted-average discount rate - operating leases	15.7		%	15.8		%

Maturities of lease liabilities as of June 30, 2020 were as follows:


	Operating Leases		Finance Leases
July 2020 through December 2020	$	18.0	$	0.3
2021	33.6		0.5
2022	26.4		0.3
2023	21.9		0.0
2024	16.5		—
Thereafter	47.8		—
Total undiscounted cash flows	$	164.2	$	1.1

Present value:
Short-term lease liability	$	19.3	$	0.4
Long-term lease liability	85.5		0.4
Total lease liability	$	104.8	$	0.8
Difference between undiscounted cash flows and discounted cash flows	$	59.4	$	0.3