LEASES AND RELATED PARTY LEASES

3 Months Ended

Mar. 31, 2020

The Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements. The Company has no finance leases as of March 31, 2020. Many of the Company's leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, the Company has elected the practical expedient to group lease and non-lease components.

Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's sole discretion, therefore, the majority of renewals to extend the lease terms are not included in the ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates renewal options and when they are reasonably certain of exercise, the renewal period is included in the lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the three months ended March 31, 2020 and March 31, 2019, was $4.8 million and $4.4 million respectively, which includes $0.1 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases at March 31, 2020 were as follows:



	March 31, 2020
	(In thousands, except lease term and discount rate)
ROU assets	$	95,890

Current lease liabilities	$	12,964
Non-current lease liabilities	100,328
Total lease liabilities	$	113,292

Weighted average remaining lease term (in years):
Leased facilities	12.5
Leased vehicles	1.7

Weighted average discount rate:
Leased facilities	5.2		%
Leased vehicles	2.4		%

Supplemental cash flow information related to leases was as follows for the three months ended March 31, 2020 (in thousands):



	March 31, 2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,229

ROU assets obtained in exchange for lease liabilities:
Operating leases	$	5,808

Future minimum lease payments under operating leases at March 31, 2020 were as follows:



	Related Parties		Third Parties		Total
	(In thousands)
2020	$	222	$	10,334	$	10,556
2021	296		13,018		13,314
2022	296		14,198		14,494
2023	296		11,658		11,954
2024	296		11,022		11,318
Thereafter	1,429		91,026		92,455
Total minimum lease payments	$	2,835	$	151,256	$	154,091
Less: Imputed interest					40,799
Total lease liabilities					113,292
Less: Current lease liabilities					12,964
Long-term lease liabilities					100,328

Future minimum lease payments under operating leases at December 31, 2019 were as follows:



	Related Parties		Third Parties		Total
	(In thousands)
2020	$	296	$	12,100	$	12,396
2021	296		12,951		13,247
2022	296		13,753		14,049
2023	296		11,386		11,682
2024	296		11,060		11,356
Thereafter	1,428		91,235		92,663
Total minimum lease payments	$	2,908	$	152,485	$	155,393
Less: Imputed interest					45,636
Total lease liabilities					109,757
Less: Current lease liabilities					12,253
Long-term lease liabilities					97,504

There were no future minimum lease payments under capital leases at December 31, 2019.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50% owned by a corporation whose shareholders are trusts, whose beneficiaries include family members of the Company’s principal stockholder and former director. The term of the current lease agreement is through October 31, 2032 at an annual rate of approximately $0.3 million per year. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2032 through October 31, 2037 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2037 through October 31, 2042 at the fair market rental rate of the premises.