Effective January 1, 2019, we adopted ASU 2016-02, “Leases” (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. The impact of the adoption of ASC 842, as of January 1, 2019, was approximately $5.5 million to our assets, approximately $1.6 million to our current liability and approximately $3.9 million to our long-term liability.

Under the transition method selected by the Company, leases expiring at, or entered into after, January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with the Company's historical accounting under ASC 840. The adoption of this standard resulted in the recording of operating lease assets and operating lease liabilities as of January 1, 2019, with no related impact on the Company’s Consolidated Statement of Stockholders’ Equity or Consolidated Statement of Income (Loss). Short-term leases have not been recorded on the balance sheet.

We lease facilities related to sales and service, manufacturing, reconditioning, certain office spaces, apartments and warehouse, all of which we classify as operating leases. In addition, we also lease certain office equipment and vehicles, which we classify as financing leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; short-term lease expense for the three months ended March 31, 2019 was approximately $0.5 million.

Most leases include one or more options to renew, with renewal terms that can extend the lease term on a monthly, annual or longer basis. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option that is reasonably certain of being exercised.

Certain lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

		Three months ended
		March 31, 2019
	Classification	(In thousands)
Assets
Operating	Operating lease right of use assets	$	4,401
Finance	Other assets	722
Total lease assets		$	5,123

Liabilities
Current
Operating	Operating lease liabilities	$	1,176
Finance	Other accrued liabilities		361

Noncurrent
Operating	Operating lease liabilities, long-term		3,189
Finance	Other long-term liabilities		397
Total lease liabilities		$	5,123

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, which is based on our rate for the Asset Backed Loan Facility.

		Three months ended
		March 31, 2019
		(In thousands)
	Classification
Operating lease cost	Selling, general and administrative	$	374
Finance lease cost			-
Amortization of leased assets	Selling, general and administrative	92
Interest on lease liabilities	Interest expense	9
Total lease cost		$	475

	Three months ended
	March 31, 2019
	Operating		Finance
	Leases		Leases		Total
	(In thousands)
2019	$	1,109	$	303	$	1,412
2020		1,128	241			1,369
2021		479	142			621
2022		280	47			327
2023		181	19			200
After 2023		2,827	95			2,922
Total lease payments	$	6,004	$	847	$	6,851
Less: interest		1,566	83			1,649
Present value of lease liabilities	$	4,438	$	764	$	5,202

The lease term and discount rate for our operating and finance leases is as follows:

	March 31, 2019
Weighted average remaining lease term (years)
Operating leases		12.4
Finance leases		2

Weighted average discount rate
Operating leases		4.79	%
Finance leases		4.33	%

We had no material non-cash financing leases entered into during the three months ended March 31, 2019.

	Three months ended
	March 31, 2019
	(In thousands)
Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	368
Operating cash flows from finance leases		9

Financing cash flows from finance leases for the three months ended March 31, 2019 were immaterial to our Consolidated Financial Statements.

The Company leases certain offices, shop and warehouse facilities, automobiles and equipment. Future annual minimum lease commitments at December 31, 2018 are as follows: 2019 - $2.0 million; 2020 - $1.5 million; 2021 - $0.8 million; 2022 - $.05 million; 2023 - $0.4 million; and thereafter - $4.2 million.