LEASES

The Company determines if an arrangement is a lease at inception. The Company considers any contract where there is an identified asset and that it has the right to control the use of such asset in determining whether the contract contains a lease. An operating lease right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are to be recognized at the commencement date based on the present value of lease payments over the lease term. As all of the Company’s operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the adoption date in determining the present value of lease payments. We estimate the incremental borrowing rate based on a yield curve analysis, utilizing the interest rate derived from the fair value analysis of our credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Our leases have remaining lease terms of one year to 11 years. Lease terms may include options to extend the lease term used in determining the lease obligation when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term for operating leases.

Our operating lease cost for the years ended December 31, 2020 and 2019 was $15.3 and $14.5 million, respectively. Our variable lease cost for the years ended December 31, 2020 and 2019 was $0.6 and $2.9 million, respectively. The net change in ROU asset and operating lease liability are included in other assets in the consolidated cash flows for the years ended December 31, 2020 and 2019.

During the year ended December 31, 2020, the Company has withheld portions of and/or delayed payments to certain of its landlords as the Company sought to renegotiate payment terms, in order to further maintain liquidity given the temporary closures of its facilities. In some instances, the negotiations with landlords have led to agreements with landlords for rent abatements or rental deferrals, while, in other cases, negotiations are ongoing. Total payments withheld or deferred as of December 31, 2020 were approximately $0.5 million and are included in current liabilities.

In accordance with the FASB’s recent Staff Q&A regarding rent concessions related to the effects of the COVID-19 pandemic, the Company has elected to account for agreed concessions by landlords that do not result in a substantial increase in the rights of the landlord or the obligations of the Company, as lessee, as though enforceable rights and obligations for those concessions existed in the original lease agreements and the Company has elected not to re-measure the related lease liabilities and right-of-use assets associated with rent concessions due to COVID-19. For qualifying rent abatement concessions, the Company has recorded negative lease expense for the amount of the concession during the period of relief, and for qualifying deferrals of rental payments, the Company has recognized a payable in lieu of recognizing a decrease in cash for the lease payment that would have been made based on the original terms of the lease agreement, which will be reduced when the deferred payment is made in the future. During the year ended December 31, 2020, the Company recognized $0.6 million of negative lease expense related to rent abatement concessions.

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

	December 31,
	2020		2019
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	15,390	$	12,926
Non-cash activity:
Lease liabilities arising from obtaining right-of-use assets*	$	14,890	$	63,911

* Includes effect of adoption of ASU 2016-02 and related amendments and a new lease entered into on January 1, 2019 of $5.6 million.

As of December 31, 2020, there were four lease modifications that resulted in noncash re-measurements of the related ROU asset and operating lease liability of $14.9 million.

Weighted-average remaining lease term and discount rate for our operating leases is as follows:

	Year Ended December 31,
	2020			2019
Weighted-average remaining lease term	6.11 years			6.22 years
Weighted-average discount rate		11.33	%		12.86	%

Maturities of lease liabilities by fiscal year for our operating leases as of December 31, 2020 are as follows:

Year ending December 31,
2021		14,705
2022		14,750
2023		13,451
2024		12,306
2025		10,748
Thereafter		18,380
Total lease payments		84,340
Less: imputed interest		(23,133	)
Present value of lease liabilities	$	61,207