LEASES

12 Months Ended

Dec. 31, 2020

We lease office space, warehouses, land, automobiles, and office and manufacturing equipment. All of our leases are classified as operating leases. Our leases have remaining lease terms of 1 month to 10 years, some of which include options to extend the leases for up to 14 years. The exercise of lease renewal options is at our sole discretion. Our lease agreements do not include options to purchase the leased property.

The Company adopted the provisions of ASC 842, "Leases" effective January 1, 2019. We elected to apply the current period transition approach as introduced by ASU 2018-11 for our transition at January 1, 2019 and we elected to apply the following practical expedients and accounting policy decisions. In January 2019, we recorded a ROU Asset and total lease liability obligations of $72.7 million and $72.4 million, respectively. The new standard did not have a material impact on our consolidated statements of operations and had no impact on cash flows.

The lease expenses were as follows (in thousands):


		Twelve Months Ended December 31, 2020		Twelve Months Ended December 31, 2019
Lease cost	Classification
Short-term lease expense	SG&A expenses(*)	$	374	$	1,087
Other operating lease cost	SG&A expenses(*)	22,983		23,911
Total operating lease cost		$	23,357	$	24,998
(*) Manufacturing equipment and some vehicle rental expenses are included in the cost of sales.

Supplemental cash flow information related to leases was as follows (in thousands):


	Twelve Months Ended December 31, 2020		Twelve Months Ended December 31, 2019
Lease
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	18,250	$	19,020
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	5,639	$	12,608

Supplemental balance sheet information related to leases was as follows (in thousand):


Lease	Classification	December 31, 2020		December 31, 2019
Assets
Operating	Operating lease right-of-use assets	$	55,188	$	66,191

Liabilities
Current operating	Short-term operating lease liabilities	15,891		17,603
Non-current operating	Long-term operating lease liabilities	38,010		48,605
Total operating lease liabilities		$	53,901	$	66,208

Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments for lease commenced on or after January 1, 2019. We used our incremental borrowing rate as of the transition date of January 1, 2019 for operating leases that commenced prior to transition.

Maturities of lease liabilities were as follows (in thousands):


Year Ending December 31,	Operating leases (*)
2021	$	19,183
2022	15,990
2023	10,571
2024	6,084
2025	3,924
Thereafter	7,271
Total lease payments	$	63,023
Less: imputed interest	9,122
Present value of lease liabilities	$	53,901

(*) Operating lease payments exclude $2.8 million and $1.1 million of legally binding minimum lease payments for leases signed but not yet commenced, as of December 31, 2020 and December 31, 2019, respectively.

Lease term and discount rate

Twelve Months Ended December 31, 2020

Twelve Months Ended December 31, 2019

Weighted average remaining lease term (years)

Operating lease

4.29

4.74

Weighted average discount rate

Operating lease

7.2%

7.3%

For the twelve months ended December 31, 2020, the Company paid approximately $3.1 million in lease expenses to entities controlled by the Company's Chief Executive Officer, David Little and family.