Leases Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Leases:

We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides details of our lease contracts for the year ended December 31, 2019 (in thousands):

	December 31, 2019
Operating lease cost	$	35,335
Finance lease cost:
Amortization of right of use assets	625
Interest on lease liabilities	117
Total finance lease cost	742
Short-term lease cost	6,655
Variable lease cost	6,198
Total lease cost	$	48,930

Rental expense was approximately $37.6 million and $31.2 million for 2018 and 2017, respectively.

Supplemental cash flow information related to our lease contracts for the year ended December 31, 2019 is as follows (in thousands):

	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,946
Operating cash flows from finance leases	117
Financing cash flows from finance leases	678
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	24,687
Finance leases(a)	55,806

(a) Represents 60% ownership interest in finance lease acquired as part of the Wodgina Project acquisition. See Note 2, “Acquisitions,” for further details.

Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at December 31, 2019 is as follows (in thousands, except as noted):

	December 31, 2019
Operating leases:
Other assets	$	133,864
Current operating lease liability	23,137
Other noncurrent liabilities	114,686
Total operating lease liabilities	137,823
Finance leases:
Net property, plant and equipment	59,494
Current portion of long-term debt	636
Long-term debt	58,888
Total finance lease liabilities	59,524
Weighted average remaining lease term (in years):
Operating leases	11.4
Finance leases	28.3
Weighted average discount rate (%):
Operating leases	3.84		%
Finance leases	4.56		%

Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):

	Operating Leases		Finance Leases
2020	$	28,333	$	2,229
2021	15,306		2,140
2022	13,153		4,431
2023	12,433		4,431
2024	11,850		4,431
Thereafter	94,002		94,788
Total lease payments	175,077		112,450
Less imputed interest	37,254		52,926
Total	$	137,823	$	59,524

Leases

Leases:

We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides details of our lease contracts for the year ended December 31, 2019 (in thousands):

	December 31, 2019
Operating lease cost	$	35,335
Finance lease cost:
Amortization of right of use assets	625
Interest on lease liabilities	117
Total finance lease cost	742
Short-term lease cost	6,655
Variable lease cost	6,198
Total lease cost	$	48,930

Rental expense was approximately $37.6 million and $31.2 million for 2018 and 2017, respectively.

Supplemental cash flow information related to our lease contracts for the year ended December 31, 2019 is as follows (in thousands):

	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,946
Operating cash flows from finance leases	117
Financing cash flows from finance leases	678
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	24,687
Finance leases(a)	55,806

(a) Represents 60% ownership interest in finance lease acquired as part of the Wodgina Project acquisition. See Note 2, “Acquisitions,” for further details.

Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at December 31, 2019 is as follows (in thousands, except as noted):

	December 31, 2019
Operating leases:
Other assets	$	133,864
Current operating lease liability	23,137
Other noncurrent liabilities	114,686
Total operating lease liabilities	137,823
Finance leases:
Net property, plant and equipment	59,494
Current portion of long-term debt	636
Long-term debt	58,888
Total finance lease liabilities	59,524
Weighted average remaining lease term (in years):
Operating leases	11.4
Finance leases	28.3
Weighted average discount rate (%):
Operating leases	3.84		%
Finance leases	4.56		%

Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):

	Operating Leases		Finance Leases
2020	$	28,333	$	2,229
2021	15,306		2,140
2022	13,153		4,431
2023	12,433		4,431
2024	11,850		4,431
Thereafter	94,002		94,788
Total lease payments	175,077		112,450
Less imputed interest	37,254		52,926
Total	$	137,823	$	59,524