Leases

12 Months Ended

Dec. 31, 2019

The Company determines if an arrangement is or contains a lease at contract inception. Right-of-use (ROU) assets related to leases are recorded in Lease assets and lease liabilities are recorded in Accrued liabilities and Lease liability on the Consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. The ROU asset also includes prepaid lease payments and initial direct costs and is reduced for lease incentives paid by the lessor. The discount rate used to determine the present value is generally the Company's incremental borrowing rate because the implicit rate in the lease is not readily determinable. The lease term used to calculate the ROU asset and lease liabilities includes periods covered by options to extend or terminate when the Company is reasonably certain the lease term will include these optional periods.

The Company has operating lease arrangements for sales and administrative offices, manufacturing and distribution facilities, product testing facilities, equipment and vehicles. The Company’s leases have remaining lease terms ranging from 1 to 13 years, some of which include options to extend the lease term for periods generally not greater than 5 years and some of which include options to terminate the leases within 1 year. Certain leases also include options to purchase the leased asset. Leases do not contain any material residual value guarantees or material restrictive covenants.

Operating lease expense for the year ended December 31, 2019 was $27.4 million. This includes variable lease costs related to leases involving assets operated by a third-party of approximately $6.5 million. Other variable and short-term lease costs were not material.

Balance sheet information related to the Company's leases at December 31, was as follows (in thousands):



	2019
Lease assets	$	61,618

Accrued liabilities	$	19,013
Lease liabilities	44,447
	$	63,460

Future maturities of the Company's operating lease liabilities at December 31, 2019 were as follows (in thousands):



2020	$	20,755
2021	17,972
2022	13,268
2023	6,590
2024	4,587
Thereafter	4,589
Future lease payments	67,761
Present value discount	(4,301		)
Lease liability	$	63,460

Other lease information surrounding the Company's operating leases as of December 31, was as follows (dollars in thousands):



	2019
Cash outflows for amounts included in the measurement of lease liabilities	$	21,491
Right-of-use assets obtained in exchange for lease obligations	$	21,759



	2019
Weighted-average remaining lease term (in years)	4.68
Weighted-average discount rate	2.1	%