(7) Leases

Accounting Policy for Leases

The Company determines if an arrangement is a lease at inception. All of the Company’s leases are operating leases and are included in right-of-use (ROU) assets, accounts payable and operating lease liabilities in the condensed consolidated balance sheet.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligations to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the respective lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease.

The Company has changed its position regarding exercising certain operating lease renewal options given the current industry conditions related to the COVID-19 pandemic. At September 30, 2020, this change resulted in a decrease to the operating lease ROU assets and liabilities of $10.7 million.

Overview

The Company’s operating leases are primarily for real estate, machinery and equipment, and vehicles. The terms and conditions for these leases vary by the type of underlying asset. Subject to certain exceptions, if the Debtors make the Bankruptcy Filing, under the Bankruptcy Code, the Company may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Total operating lease expense was as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Long-term fixed lease expense	$	4,032	$	8,942	$	18,043	$	25,507
Long-term variable lease expense		85		117		285		298
Short-term lease expense		1,652		3,346		8,175		13,216
Total operating lease expense	$	5,769	$	12,405	$	26,503	$	39,021

Supplemental Balance Sheet and Cash Flows Information

Operating leases were as follows (in thousands):



	September 30, 2020		December 31, 2019
Operating lease ROU assets	$	56,198	$	80,906

Accrued expenses	$	19,622	$	21,072
Operating lease liabilities		38,649		62,354
Total operating lease liabilities	$	58,271	$	83,426

Weighted average remaining lease term		8 years		9 years
Weighted average discount rate		6.51%		6.75%

	Nine Months Ended September 30,
	2020		2019
Cash paid for operating leases	$	20,806	$	26,242
ROU assets obtained in exchange for lease obligations	$	3,513	$	21,045

Maturities of operating lease liabilities at September 30, 2020 are as follows (in thousands):