LEASES

6 Months Ended

Jun. 30, 2020

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.

In response to the COVID-19 pandemic, the Company negotiated COVID-19 related rent concessions for several of its leased properties. The majority of these rent concessions were in the form of deferred rent payments for one or more months. For these rent concessions the Company elected to account for these as if no changes to the lease were made and continued to recognize the straight-line lease expense for these leases in accordance with the FASB Question-and-Answer Document. COVID-19 related deferred rent payments as of June 30, 2020, totaled $1.0 million and were recorded in accrued expenses in the unaudited condensed consolidated balance sheet as of June 30, 2020. In addition, there were a limited number of rent concessions obtained by the Company in the form of rent abatement and changes in lease terms. These lease modifications were accounted for as a resolution to a contingency that fixes previously variable lease payments which resulted in the remeasurement of the right-of-use asset and lease liability. The remeasurement of the right-of-use and lease liability did not have a material effect on our consolidated financial statements or results of operations. The Company continues to assess and hold ongoing conversations with landlords for various properties in seeking commercially reasonable lease concessions given the current environment.

The components of lease expense for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):


	Three Months Ended June 30,						Six Months EndedJune 30,
	2020		2019		2020		2019
Operating lease expenses:
Fixed	$	4,491	$	4,907	$	9,305	$	9,131

Supplemental cash flow information for lease related liabilities and assets for the six months ended June 30, 2020 and 2019 were as follows (in thousands):


	Six Months Ended June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	7,285	$	7,975


	Six Months Ended June 30,
	2020		2019
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	12	$	115,488

The aggregate future lease payments for operating leases as of June 30, 2020 were as follows (in thousands):


	Operating
2020 (excluding the six months ending June 30, 2020)	$	8,819
2021	17,795
2022	17,920
2023	17,914
2024	17,585
2025	17,564
Thereafter	54,209
Total lease payments	151,806
Less: Interest	(34,951)
Present value of lease payments	$	116,855

The Company expects to make payments related to the deferrals obtained as a result of COVID-19-related rent concessions of $0.4 million in 2020 and $0.6 million in 2021, per the updated terms of the applicable lease agreements.

Average lease terms and discount rates were as follows:


	June 30, 2020
Operating leases:
Weighted-average remaining lease term (years)	8.6
Weighted-average discount rate	6.2	%