Leases

12 Months Ended

Dec. 31, 2020

We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At December 31, 2020, our operating leases had remaining lease terms of up to 40 years, including any reasonably probable extensions.

Rent expense under the Company's operating leases during the years ended December 31, 2018, prior to our adoption of the new lease guidance on January 1, 2019, was $4.9 million.

Lease balances within our consolidated balance sheet were as follows:


(In thousands)	December 31, 2020		December 31, 2019
Assets:
Operating lease right-of-use assets	$	19,522	$	19,826
Liabilities:
Other accrued liabilities	$	6,094	$	4,903
Long-term operating lease obligations	13,681		15,639
Total lease liabilities	$	19,775	$	20,542

We recorded an impairment of a ROU asset of $0.8 million during the fourth quarter of the year ended December 31, 2019. This impairment was associated with the sale of our call center in Euclid, Ohio, which was completed in February 2020.

Operating lease expense, including variable and short-term lease costs which were insignificant to the total, operating lease cash flows and supplemental cash flow information were as follows:


	Year Ended December 31,
(In thousands)	2020		2019
Cost of sales	$	1,896	$	1,945
Selling, general and administrative expenses	4,040		4,389
Total operating lease expense	$	5,936	$	6,334
Operating cash outflows from operating leases	$	6,552	$	6,617
Operating lease right-of-use assets obtained in exchange for lease obligations	$	3,743	$	4,302

The weighted average remaining lease liability term and the weighted average discount rate were as follows:


	Year Ended December 31,
	2020		2019
Weighted average lease liability term (in years)	3.70		4.30
Weighted average discount rate	3.84	%	4.50	%

The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at December 31, 2020. The reconciliation excludes short-term leases that are not recorded on the balance sheet.


(In thousands)
2021	$	6,812
2022	6,128
2023	3,557
2024	2,172
2025	1,628
Thereafter	964
Total lease payments	21,261
Less: imputed interest	(1,486)
Total lease liabilities	$	19,775

At December 31, 2020, we had four operating leases that had not yet commenced with terms ranging from approximately two to four years. The total initial lease liability associated with these leases is $0.4 million, which is not reflected within the maturity schedule above. On January 29, 2021, we entered into an agreement with the landlord of our Euclid, Ohio lease and the buyer of our call center, thereby releasing us from all obligations under the lease. The associated December 31, 2020 lease liability of $0.7 million was reversed in January 2021.

Rental Costs During Construction

Rental costs associated with operating leases incurred during a construction period were expensed for the years ended December 31, 2020, 2019 and 2018.

Prepaid Land Lease

We operate one factory within the PRC on which the land is leased from the government as of December 31, 2020. This land lease was prepaid to the PRC government at the time our subsidiary occupied the land. We have obtained a land-use right certificate for the land pertaining to this factory.

The factory is located in the city of Yangzhou in the Jiangsu province. The remaining net book value of this operating lease ROU was $2.4 million at December 31, 2020, and is being amortized on a straight-line basis over the remaining term of approximately 38 years. The buildings located on this land had a net book value of $16.9 million at December 31, 2020 and are being depreciated over a remaining weighted average period of 19 years.