Leases

12 Months Ended

Dec. 31, 2020

The Company determines if an arrangement is a lease at inception. Operating leases are included in other assets, other current liabilities and other long-term liabilities on the Consolidated Balance Sheets. The Company did not have any finance leases at December 31, 2020.

Operating lease right-of-use assets ("ROU assets") represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of minimum fixed lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets also include prepaid lease payments made prior to commencement of the lease plus initial capitalized direct costs and exclude tenant improvement allowances. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for minimum fixed lease payments is recognized on a straight-line basis over the lease term.

The Company has elected to apply the short-term lease exemption in accordance with guidance, and therefore, short-term leases (leases with a term of twelve months or less) are not recorded on the balance sheet. The Company has only a small number of leases that qualify for the exemption and the amount of its remaining short-term lease commitments is not significant.

Most of the Company’s operating leases are for buildings, warehouses and office space. These leases have remaining lease terms of approximately one year to ten years.

The components of lease expense were as follows (in thousands):

Note 7. Leases - (Continued)


	Year Ended December 31,
	2020		2019
Operating lease expense	$	12,055	$	11,925
Short-term lease expense	81		963
Variable lease expense	2,265		1,586
Total lease expense	$	14,401	$	14,474

Supplemental cash flow information related to operating leases (in thousands):


	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	12,289	$	11,244
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	7,926	$	12,210

Supplemental balance sheet information related to operating leases (in thousands):


	December 31, 2020		December 31, 2019
Operating lease right-of-use assets	$	32,833	$	35,479
Operating lease liabilities	$	36,745	$	39,291

As of December 31, 2020, the weighted average remaining lease term for operating leases was 5.9 years and the weighted average discount rate was 3.73 percent.

Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):


2021	$	11,699
2022	7,649
2023	4,607
2024	3,465
2025	2,945
Thereafter	10,712
Total lease payments	41,077
Less: imputed interest	(4,332)
Present value of lease liabilities	$	36,745