LEASES

6 Months Ended

Jun. 30, 2020

LEASES

LEASES

NOTE 16.    LEASES

We lease manufacturing and office space under non-cancelable operating leases. Some of these leases contain provisions for landlord funded leasehold improvements which are recorded as a reduction to right-of-use (“ROU”) assets and the related operating lease liabilities. For leases containing an option to renew, we regularly evaluate the renewal options and when they are reasonably certain of exercise, we include the renewal period in our lease terms, along with the ROU assets and operating lease liabilities. In many cases, we have lease terms that are less than one year and therefore, we have elected the practical expedient to exclude these short-term leases from our ROU assets and operating lease liabilities. New leases are negotiated and executed to meet business objectives on an on-going basis. 

Our leases do not provide an implicit rate. Accordingly, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. We have a centrally managed treasury function; therefore, we apply a portfolio approach for determining the incremental borrowing rate applicable to the lease term.

Components of operating lease cost were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	4,860	$	2,000	$	9,694	$	3,850
Short-term and variable lease cost		1,339		743		2,647		1,689
Total operating lease cost	$	6,199	$	2,743	$	12,341	$	5,539

Maturities of our operating lease liabilities at June 30, 2020 are as follows:

Year Ending December 31,
2020 (remaining)	$	11,823
2021		21,278
2022		14,722
2023		11,685
2024		10,474
Thereafter		71,016
Total lease payments		140,998
Less: Interest		(29,273)
Present value of lease liabilities	$	111,725

Other information related to leases, including supplemental cash flow information, consists of:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cash paid for operating leases	$	5,828	$	3,023	$	11,402	$	5,914
Right-of-use assets obtained in exchange for operating lease liabilities(1)	$	2,270	$	19,244	$	24,478	$	57,555

⁽¹⁾ In the three months ended March 31, 2019 we implemented ASC 842, Leases. The previously reported amount includes leases existing on January 1, 2019.

The weighted average remaining lease term and discount rate related to our lease liabilities as of June 30, 2020 were 9.8 years and 4.3%, respectively. As of June 30, 2019, the weighted average remaining lease term and discount rate related to our lease liabilities were 8.4 years and 3.8%, respectively.