Leases

3 Months Ended

Mar. 31, 2021

LEASES

The Company’s operating leases are primarily comprised of railcar, real estate, storage tank, auto, trailer and manufacturing/office equipment leases. Railcars and real estate comprise approximately 24 percent and 62 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 four principal real estate leases relate to the office lease for the new corporate headquarters in Northbrook, Illinois and land leases in the Philippines, Singapore and Lake Providence, Louisiana. As of March 31, 2021, the Company had a storage tank lease, valued at approximately $168,000, that had not commenced. This lease will commence in the second quarter of 2021 with a lease term of two 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, 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 that reside in the five countries identified above represents approximately 98 percent of the Company’s consolidated

ROU asset balance. Lease cost is included in the Cost of Sales and Operating Expenses sections of the Condensed Consolidated Statements of Income.

(In thousands)	March 31, 2021
Lease Cost
Operating lease cost	$	3,726
Short-term lease cost		1,269
Variable lease cost		283
Total lease cost	$	5,278
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow from operating leases	$	3,289
Right-of-use assets obtained in exchange for new operating lease liabilities		12,627

(In thousands)
Undiscounted Cash Flows:
2021 (excluding the three months ended March 31, 2021)	$	10,753
2022		13,081
2023		10,847
2024		6,935
2025		5,306
Subsequent to 2025		39,647
Total Undiscounted Cash Flows	$	86,569
Less: Imputed interest		(13,765	)
Present value	$	72,804
Current operating lease liabilities ⁽¹⁾		12,371
Non-current operating lease liabilities		60,433
Total lease liabilities	$	72,804

(1)

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

Weighted-average remaining lease term-operating leases		10 years
Weighted-average discount rate-operating leases			3.0	%