LEASES

12 Months Ended

Dec. 31, 2019

The Company has operating leases for corporate offices, distribution facilities, manufacturing plants, and certain vehicles. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities. These are expensed as incurred and recorded as variable lease expense.

ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the net present value of fixed lease payments over the lease term. The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. ROU assets also include any advance lease payments. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The components of lease costs for the year ended December 31, 2019 were as follows (in thousands):


	Year Ended December 31, 2019
Operating lease costs:
Fixed	$	18,898
Total	$	18,898

Rent and related expenses under operating leases were $18.4 million and $16.8 million for the years ended December 31, 2018 and 2017, respectively.

Supplemental cash flow information for the year ended December 31, 2019 was as follows (in thousands):


	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	17,851
Total	$	17,851


	Year ended December 31, 2019
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	118,447
Total	$	118,447

Included in machinery, furniture and equipment at each of December 31, 2019 and 2018 is $0.3 million and $1.8 million, respectively, related to assets recorded under capital leases. Included in accumulated depreciation and amortization at December 31, 2019 and December 31, 2018 is $0.1 million and $1.7 million, respectively, related to assets recorded under capital leases.

The aggregate future lease payments for operating leases as of December 31, 2019 were as follows (in thousands):


	Operating
2020	$	17,876
2021	17,760
2022	17,828
2023	17,982
2024	17,650
Thereafter	72,912
Total lease payments	162,008
Less: Interest	(39,167)
Present value of lease payments	$	122,841

Average lease terms and discount rates were as follows:


	December 31, 2019
Weighted-average remaining lease term (years)
Operating leases	9.6
Weighted-average discount rate
Operating leases	6.2	%