Leases

12 Months Ended

Dec. 31, 2020

9. Leases

We have operating and finance lease obligations resulting from the lease of land and buildings that comprise our corporate headquarters and various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on Company vehicles; and leases on a variety of office and other equipment.

We sublease, on an operating lease basis, two unused office space facilities near our corporate office. Total annual rental income for these facilities is approximately $905,000.

On March 8, 2019 we executed a modification to extend the lease of our On-X manufacturing facilities. This modification resulted in an increase in the net present value and corresponding right-of-use asset of $3.7 million, using a discount rate of 5.83%. We have not executed any material lease arrangements which have not commenced. We do not have any related party leasing arrangements.

Supplemental consolidated balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):


Operating leases:	December 31, 2020		December 31, 2019
Operating lease right-of-use assets	$	28,242	$	27,007
Accumulated amortization		(9,671)		(5,013)
Operating lease right-of-use assets, net	$	18,571	$	21,994

Current maturities of operating leases	$	5,763	$	5,487
Non-current maturities of operating leases		14,034		17,918
Total operating lease liabilities	$	19,797	$	23,405

Finance leases:
Property and equipment, at cost	$	7,620	$	7,161
Accumulated amortization		(1,905)		(1,279)
Property and equipment, net	$	5,715	$	5,882

Current maturities of finance leases	$	614	$	597
Non-current maturities of finance leases		5,300		5,415
Total finance lease liabilities	$	5,914	$	6,012

Weighted average remaining lease term (in years):
Operating leases		5.1		5.5
Finance leases		9.8		10.6

Weighted average discount rate:
Operating leases		5.2%		5.4%
Finance leases		2.0%		2.0%

Current maturities of finance leases are included as a component of Other current liabilities and non-current maturities of finance leases are included as a component of Other long-term liabilities on our Consolidated Balance Sheets. A summary of lease expenses for our finance and operating leases included in General, Administrative, and Marketing Expenses on our Consolidated Statements of Operations and Comprehensive Loss are as follows (in thousands):



	December 31, 2020		December 31, 2019
Amortization of property and equipment	$	643	$	771
Interest expense on finance leases		118		124
Total finance lease expense		761		895
Operating lease expense^a		7,145		6,624
Sublease income		(905)		(905)
Total lease expense	$	7,001	$	6,614

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^aTotal rental expense for operating leases was $6.4 million in 2018.

A summary of our supplemental cash flow information is as follows (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:	2020		2019
Operating cash flows for operating leases	$	7,407	$	6,827
Financing cash flows for finance leases		653		728
Operating cash flows for finance leases		126		124

Future minimum lease payments and sublease rental income are as follows (in thousands):


	Finance		Operating		Sublease
	Leases		Leases		Income
2021	$	719	$	6,616	$	905
2022		670		4,511		305
2023		669		3,007		--
2024		666		2,758		--
2025		647		1,909		--
Thereafter		3,138		3,569		--
Total minimum lease payments	$	6,509	$	22,370	$	1,210
Less amount representing interest		595		2,573
Present value of net minimum lease payments		5,914		19,797
Less current maturities		614		5,763
Finance lease obligations, less current maturities	$	5,300	$	14,034