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LEASES

12 Months Ended

Dec. 31, 2020

NOTE 16. LEASES

The Company leases 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:


	Year Ended December 31,
	2020		2019
Operating lease cost	$	22,920	$	11,052
Short-term and variable lease cost		1,895		4,726
Total operating lease cost	$	24,815	$	15,778

Maturities of our operating lease liabilities on December 31, 2020 are as follows:


Year Ending December 31,
2021	$	21,126
2022		16,177
2023		12,979
2024		11,593
2025		10,133
Thereafter		74,635
Total lease payments		146,643
Less: Interest		(34,058)
Present value of lease liabilities	$	112,585

We have one lease agreement that commences in March 2021 with total payments of $3.5 million over five years. Other information related to leases, including supplemental cash flow information, consists of:


	Year Ended December 31,
	2020			2019
Weighted average remaining lease term (in years)		10.65			7.50
Weighted average discount rate		4.63	%		4.05	%
Cash paid for operating lease liabilities	$	21,877		$	12,101
Right-of-use assets obtained in exchange for operating lease liabilities⁽¹⁾	$	33,741		$	84,551

(1)

Included in 2019 are the right-of-use assets of $60.1 million obtained in connection with the acquisition of Artesyn in September 2019. Subsequent measurement period adjustments that occurred in the year ended December 31, 2020 reduced this amount to $54.4 million. See Note 2. Business Acquisitions for more details.