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LEASES

9 Months Ended

Sep. 30, 2020

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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease cost	$	4,806	$	2,733	$	14,500	$	6,583
Short-term and variable lease cost		1,504		1,165		4,151		2,854
Total operating lease cost	$	6,310	$	3,898	$	18,651	$	9,437

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


Year Ending December 31,
2020 (remaining)	$	5,669
2021		20,609
2022		15,818
2023		12,689
2024		11,356
Thereafter		83,531
Total lease payments		149,672
Less: Interest		(34,825)
Present value of lease liabilities	$	114,847

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cash paid for operating leases	$	5,934	$	2,936	$	17,336	$	8,850
Right-of-use assets obtained in exchange for operating lease liabilities⁽¹⁾	$	9,586	$	56,319	$	34,064	$	113,874

(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. In the three months ended September 30, 2019, we obtained $56.3 million in right-of-use assets in connection with the Artesyn acquisition.

The weighted average remaining lease term and discount rate related to our lease liabilities as of September 30, 2020 were 10.8 years and 4.5%, respectively. As of September 30, 2019, the weighted average remaining lease term and discount rate related to our lease liabilities were 8.7 years and 4.0%, respectively.