Leases

9 Months Ended

Sep. 30, 2021

10. Leases

We have operating and finance lease obligations resulting from the lease of land and buildings that comprise our corporate headquarters and various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on Company vehicles; and leases on a variety of office and other equipment.

On January 6, 2021 we executed a modification to extend the lease of our headquarters located in Kennesaw, Georgia. This modification resulted in an increase in the present value of future lease obligations and corresponding right-of-use asset of $23.3 million, using a discount rate of 6.41%.

On June 1, 2021 we began occupancy of the newly constructed addition to our leased JOTEC headquarters located in Hechingen, Germany. This lease resulted in an increase in the present value of future lease obligations and corresponding right-of-use asset of $9.8 million, using a discount rate of 5.46%.

Information related to leases included in the Condensed Consolidated Balance Sheets is as follows (in thousands, except lease term and discount rate):


Operating leases:		September 30, 2021		December 31, 2020
Operating lease right-of-use assets	$	58,429	$	28,242
Accumulated amortization		(11,516)		(9,671)
Operating lease right-of-use assets, net	$	46,913	$	18,571

Current maturities of operating leases	$	3,053	$	5,763
Non-current maturities of operating leases		45,765		14,034
Total operating lease liabilities	$	48,818	$	19,797

Finance leases:
Property and equipment, at cost	$	6,910	$	7,620
Accumulated amortization		(2,014)		(1,905)
Property and equipment, net	$	4,896	$	5,715

Current maturities of finance leases	$	537	$	614
Non-current maturities of finance leases		4,608		5,300
Total finance lease liabilities	$	5,145	$	5,914

Weighted average remaining lease term (in years):
Operating leases		12.4		5.1
Finance leases		9.1		9.8

Weighted average discount rate:
Operating leases		5.9%		5.2%
Finance leases		2.0%		2.0%

Current maturities of finance leases are included as a component of Other current liabilities and non-current maturities of finance leases are included as a component of Other long-term liabilities on our Condensed Consolidated Balance Sheets. A summary of lease expenses for our finance and operating leases included in General, administrative, and marketing expenses on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2021		2020		2021		2020
Amortization of property and equipment	$	190	$	164	$	500	$	487
Interest expense on finance leases		27		30		85		89
Total finance lease expense		217		194		585		576
Operating lease expense		1,989		1,806		5,566		5,324
Sublease income		(92)		(226)		(308)		(679)
Total lease expense	$	2,114	$	1,774	$	5,843	$	5,221

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A summary of our cash flow information related to leases is as follows (in thousands):


		Nine Months Ended		Nine Months Ended
Cash paid for amounts included in the measurement of lease liabilities:		September 30, 2021		September 30, 2020
Operating cash flows for operating leases	$	4,536	$	5,438
Financing cash flows for finance leases		446		465
Operating cash flows for finance leases		82		92

Future minimum lease payments and sublease rental income are as follows (in thousands):


	Finance		Operating		Sublease
	Leases		Leases		Income
Remainder of 2021	$	134	$	680	$	92
2022		642		6,009		305
2023		641		6,601		--
2024		635		6,212		--
2025		612		5,282		--
Thereafter		2,963		46,618		--
Total minimum lease payments	$	5,627	$	71,402	$	397
Less amount representing interest		(482)		(22,584)
Present value of net minimum lease payments		5,145		48,818
Less current maturities		(537)		(3,053)
Lease liabilities, less current maturities	$	4,608	$	45,765