Leases

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At December 31, 2019, our operating leases had remaining lease terms of up to 41 years.

Rent expense under the Company's operating leases during the years ended December 31, 2018 and 2017, prior to our adoption of the new lease guidance on January 1, 2019, was $4.9 million and $4.2 million, respectively.

Lease balances within our consolidated balance sheet were as follows:



(In thousands)	December 31, 2019
Assets:
Operating lease right-of-use assets	$	19,826
Liabilities:
Other accrued liabilities	$	4,903
Long-term operating lease obligations	15,639
Total lease liabilities	$	20,542

We recorded an impairment of a ROU asset of $0.8 million during the fourth quarter of the year ended December 31, 2019. This impairment is associated with the disposal of our call center in Euclid, Ohio.

Operating lease expense, including variable lease costs, which are insignificant to the total, and short-term lease costs, and operating lease cash flows and supplemental cash flow information were as follows. Short-term lease costs were approximately $1.3 million during the year ended December 31, 2019.



(In thousands)	Year Ended December 31, 2019
Cost of sales	$	1,945
Selling, general and administrative expenses	4,389
Total operating lease expense	$	6,334
Operating cash outflows from operating leases	$	6,617
Operating lease right-of-use assets obtained in exchange for lease obligations	$	4,302

The weighted average remaining lease liability term and the weighted average discount rate were as follows:



	December 31, 2019
Weighted average lease liability term (in years)	4.30
Weighted average discount rate	4.50	%

The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at December 31, 2019. The reconciliation excludes short-term leases that are not recorded on the balance sheet.



(In thousands)	December 31, 2019
2020	$	5,800
2021	6,120
2022	5,103
2023	2,331
2024	1,341
Thereafter	2,041
Total lease payments	22,736
Less: imputed interest	(2,194		)
Total lease liabilities	$	20,542

As of December 31, 2019, we have one operating lease that has not yet commenced with the total initial lease liability of approximately $1.6 million with a five-year term, which is not reflected within the maturity schedule above. Our future minimum lease obligations under non-cancelable operating leases as of December 31, 2018 were comparable to the undiscounted lease payments included in the table above.

Non-level Rents and Lease Incentives

Some of our leases are subject to rent escalations. Prior to the adoption of the new lease guidance on January 1, 2019, for these leases, we recognized rent expense for the total contractual obligation utilizing the straight-line method over the lease term, ranging from 48 months to 125 months. At December 31, 2018, the related short-term liability was recorded in other accrued liabilities and the related long term liability was recorded in other long-term liabilities. The total liability related to rent escalations was $1.1 million at December 31, 2018.

At December 31, 2018, the lease agreements for our offices in Santa Ana, California and Scottsdale, Arizona contained allowances for moving expenses and tenant improvements aggregating $1.8 million. These moving and tenant improvement allowances were recorded within other accrued liabilities and other long-term liabilities, depending on the short-term or long-term nature, and were being amortized as a reduction of rent expense over the related lease term.

Rental Costs During Construction

Rental costs associated with operating leases incurred during a construction period were expensed for the years ended December 31, 2019, 2018 and 2017.

Prepaid Land Lease

We operate one factory within the PRC on which the land is leased from the government as of December 31, 2019. This land lease was prepaid to the PRC government at the time our subsidiary occupied the land. We have obtained a land-use right certificate for the land pertaining to this factory.

The factory is located in the city of Yangzhou in the Jiangsu province. The remaining net book value of this operating lease ROU was $2.4 million at December 31, 2019, and is amortized on a straight-line basis over the remaining term of approximately 39 years. The buildings located on this land had a net book value of $17.1 million at December 31, 2019 and is being depreciated over a remaining weighted average period of 20 years.

Prior to adoption of the new lease guidance on January 1, 2019, the remaining net book value of this prepaid land lease was included within prepaid expenses and other current assets and other assets, depending on the short-term or long-term nature.