Annual report pursuant to Section 13 and 15(d)

LEASES

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LEASES
12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
LEASES LEASES
Adoption of ASU Topic 842

We adopted ASU No. 2016-02, Leases (Topic 842): Accounting for Leases, as of January 1, 2019. This update requires lessees to recognize right-of-use assets and lease liabilities arising from leases. We elected certain practical expedients permitted under the transition guidance. We elected the optional transition method that allows for a cumulative-effect adjustment and will not restate prior periods. Under the new guidance, all leases will continue to be classified as operating.

Adoption of the new standard resulted in recording of additional net operating lease right-of-use assets and lease liabilities of approximately $23.1 million and $24.0 million, respectively, as of January 1, 2019. The difference between the operating lease right-of-use assets and lease liabilities reflects deferred rent balances at the time of adoption. The standard did not materially impact consolidated net earnings and cash flows.

We lease certain retail stores, warehouses, distribution centers, office spaces and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning in 2019 and later, we account for lease components including rent, real estate taxes and insurance costs separately from non-lease components, like common-area maintenance fees. Most of our leases include one or more options to renew, with renewal terms that can extend the lease term for one or more years. The exercise of the lease option to renew is solely at our discretion.

Operating lease costs were approximately $6.6 million and $6.7 million for the years ended December 31, 2020 and 2019, respectively. Short-term lease costs were approximately $0.4 million and $0.2 million for the years ended December 31, 2020 and 2019, respectively. Operating lease costs were offset by sublease income of $0.1 million and $0.1 million for the years ended December 31, 2020 and 2019, respectively. Short-term lease costs represent our costs with respect to leases with a duration of 12 months or less and are not reflected on our Consolidated Balance Sheets.
Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows (dollar amounts in thousands, except lease term and discount rate):
As of December 31, 2020 2019
Assets:
Operating lease right-of-use assets $ 20,210  $ 23,951 
Liabilities:
Current 4,992  4,941 
Long-term 16,412  20,213 
Total operating lease liabilities $ 21,404  $ 25,154 

Weighted-average remaining lease term 6.3 7.0
Weighted-average discount rate 4.23  % 4.21  %

Year Ended December 31, 2020 2019
Cash paid for operating lease liabilities $ 5,703  $ 6,147 
Right-of-use assets obtained in exchange for new operating lease obligations (1) 1,996  29,883 
Cancellations or adjustments of leases that resulted in the reduction of lease assets in exchange for lease liabilities $ (1,111) $ (486)

(1) Balance as of December 31, 2019 includes $23.1 million for operating leases existing on January 1, 2019.

There were no material operating leases that we have entered into and that were yet to commence as of December 31, 2020.

The approximate aggregate commitments under non-cancelable operating leases in effect at December 31, 2020, were as follows (dollar amounts in thousands):
Year Ending December 31,
2021 $ 5,834 
2022 4,077 
2023 3,109 
2024 2,917 
2025 2,188 
Thereafter 6,500 
Total lease payments $ 24,625 
Less: Imputed interest (1) 3,221 
Present value of lease liabilities $ 21,404 

(1) Calculated using our corporate borrowing rate based on the term of each lease ranging from 3.50 percent to 4.29 percent.

Because of leases entered into during 2019, we incurred asset retirement obligations in the amount of $0.6 million and reductions of $0.3 million.