Leases

9 Months Ended

Sep. 30, 2020

9. Leases

The Company leases retail shoe stores, as well as several office and distribution facilities worldwide. The leases have original lease periods expiring between the fourth quarter of 2020 and 2030. Many leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

During the third quarter of 2020, the Company recorded $1.2 million expense for the impairment of operating lease right-of-use assets related to its retail stores worldwide. This impairment was part of the overall $3.1 million impairment of long-lived assets charge recognized during the quarter.

The components of the Company’s operating lease costs were as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(Dollars in thousands)
Operating lease costs	$	1,652	$	2,198	$	5,237	$	6,590
Variable lease costs ⁽¹⁾		—		—		12		43
Total lease costs	$	1,652	$	2,198	$	5,249	$	6,633

⁽¹⁾Variable lease costs primarily include percentage rentals based upon sales in excess of specified amounts.

Short-term lease costs, which were excluded from the above table, are not material to the Company's financial statements.

The following is a schedule of maturities of operating lease liabilities as of September 30, 2020 (dollars in thousands):


	Operating Leases
2020, excluding the nine months ended September 30, 2020	$	1,301
2021		4,559
2022		3,309
2023		2,270
2024		1,505
Thereafter		2,830
Total lease payments		15,774
Less imputed interest		(1,344)
Present value of lease liabilities	$	14,430

The operating lease liabilities are classified in the consolidated condensed balance sheets as follows:


	September 30, 2020		December 31, 2019

	(Dollars in thousands)
Operating lease liabilities – current	$	4,468	$	6,505
Operating lease liabilities - non-current		9,962		14,110
Total	$	14,430	$	20,615

The Company determined the present value of its lease liabilities using a weighted-average discount rate of 4.25%. As of September 30, 2020, the Company’s leases have a weighted-average remaining lease term of 4.63 years. The decrease in lease liabilities in 2020 was primarily due to the early closing of three unprofitable retail stores in the U.S. and lease expirations at Florsheim Australia.

Supplemental cash flow information related to the Company’s operating leases is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	2,174	$	2,278	$	5,424	$	6,803
Right-of-use assets obtained in exchange for new lease liabilities (noncash)	$	72	$	—	$	216	$	27,002