Leases

6 Months Ended

Jun. 30, 2020

LEASES

The Company’s operating leases are primarily comprised of railcars, real estate, storage tanks, autos, trailers and manufacturing/office equipment. Railcars and real estate comprise approximately 46 percent and 37 percent, respectively, of the Company’s consolidated ROU asset balance. Except for real estate, typical lease terms range from one to ten years. Real estate lease terms typically range from one to fifty years. The Company’s two principal real estate leases relate to land leases in the Philippines and Singapore. As of June 30, 2020, the Company had an approximately $612,000 storage tank lease that had not commenced. This lease will commence in the third quarter of 2020 with a lease term of four years.

As most of the Company’s leases do not provide an implicit borrowing rate, the Company uses its incremental borrowing rate (IBR) based on the information available at the commencement date in determining the present value of lease payments. IBRs were specifically determined for the United States, the Philippines, Singapore, Brazil and China, typically for five-year increments. The U.S. IBR was used for all other countries as the leases in these countries are not material. The total value of leases of property in the five countries identified above represents approximately 98 percent of the Company’s consolidated ROU asset balance.

(In thousands)	Three months ended June 30, 2020		Six months ended June 30, 2020
Lease Cost
Operating lease cost	$	2,761	$	5,482
Short-term lease cost		1,204		2,383
Variable lease cost		301		599
Total lease cost	$	4,266	$	8,464
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	2,787	$	5,534
Right-of-use assets obtained in exchange for new operating lease liabilities		828		1,494


(In thousands)
Undiscounted Cash Flows:
2020 (excluding the six months ended June 30, 2020)	$	5,337
2021		8,844
2022		7,013
2023		5,483
2024		3,202
Subsequent to 2024		16,639
Total Undiscounted Cash Flows	$	46,518
Less: Imputed interest		(9,829	)
Present value	$	36,689
Current operating lease liabilities ⁽¹⁾		8,695
Non-current operating lease liabilities		27,994
Total lease liabilities	$	36,689

(1)

This item is included in Accrued liabilities line on the Company’s Condensed Consolidated Balance Sheet.

Weighted-average remaining lease term-operating leases		9 Years
Weighted-average discount rate-operating leases		4.2%