14. LEASES

Accounting Standards Update ASU No. 2016-02, Leases (Topic 842), requires the Company to recognize a right of use (“ROU”) asset and a lease liability for all leases with terms greater than 12 months. Refer to Note 19 - Recent Accounting Pronouncements for discussion on the adoption of Topic 842.

The Company has operating leases for office space, manufacturing equipment, computer equipment and automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes.

For the three and nine months ended September 30, 2019, the components of operating lease expense were as follows (in thousands):


	Three months ended		Nine months ended
	September 30, 2019		September 30, 2019
Fixed operating lease expense	$	1,018	$	3,057
Variable operating lease expense		39		118
	$	1,057	$	3,175

Supplemental cash flow information related to the Company’s operating leases for the nine-month period ended September 30, 2019 was as follows (in thousands):


Cash paid for amounts included in the measurement of operating leases	$	3,101
ROU assets obtained in exchange for operating lease obligations	$	20,604

The following table presents the lease balances within the condensed consolidated balance sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of September 30, 2019 (in thousands except for the weighted average remaining lease term and weighted average discount rate):


Lease assets and liabilities	Classification	Amount
Assets:
Right of use asset	Other long-term assets	$	17,358
Liabilities:
Current
Right of use liability, current	Accrued liabilities	$	3,261
Long-term
Right of use liability, long-term	Other long-term liabilities		14,107
Total ROU lease liabilities		$	17,368

Weighted average remaining lease term			8.35
Weighted average discount rate			2.95	%

The following table presents the maturity of the Company’s operating lease liabilities as of September 30, 2019 (in thousands):


2020	$	3,711
2021		3,004
2022		2,419
2023		2,065
2024		1,682
Thereafter		6,349
Total undiscounted cash flows		19,230
Less: present value discount		(1,862)
Total lease liabilities	$	17,368

As of September 30, 2019, the Company had no additional significant operating or finance leases that had not yet commenced.