5. Leases

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement. Lease classifications, recognition, and measurement are then determined at the lease commencement date.

The Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent primarily leases for office/warehouse spaces used to conduct our business. These leases have remaining terms of approximately 4 to 10 years. The majority of the Company’s leases includes one or more options to renew, with renewal terms ranging from 3 years to 8 years. The Company includes renewal options in valuing its ROU assets and liabilities when it determines that it is reasonably certain to exercise these renewal options. Based on conditions of the Company’s existing leases, historical trend and its overall business strategies, the Company has included the renewal options in all of its operating leases in valuing its ROU assets and liabilities. As most of our operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate when determining the present value of the lease payments. The incremental borrowing rate is determined based on the Company’s secured borrowing rate, lease terms and current economic environment. Some of our operating leases include both lease (rent payments) and non-lease components (maintenance costs such as cleaning and landscaping services). The Company has elected the practical expedient to account for lease component and non-lease component as a single component for all leases in accordance with ASC 842. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Finance leases consist primarily of equipment used by our facilities’ operations. Our finance leases also includes a building with land for our waste treatment operations. The Company’s finance leases for equipment generally have terms between one to three years and some of the leases include options to purchase the underlying assets at fair market value at the conclusion of the lease term. The lease for the building and land has a term of two year with option to buy at the end of the lease term which the Company is reasonably certain exercise. At March 31, 2020, assets recorded under finance leases were $1,492,000 less accumulated depreciation of $97,000, resulting in net fixed assets under finance leases of $1,395,000, which is recorded within net property and equipment on the Consolidated Balance Sheets.

The Company adopted the policy to not recognize ROU assets and liabilities for short term leases. The components of lease cost for the Company’s leases for the three months ended March 31, 2020 and 2019 were (in thousands):

The weighted average remaining lease term and the weighted average discount rate for operating and finance leases at March 31, 2020 was:

The weighted average remaining lease term and the weighted average discount rate for operating and finance leases at March 31, 2019 was:

The following table reconciles the undiscounted cash flows for the operating and finance leases at March 31, 2020 to the operating and finance lease liabilities recorded on the balance sheet (in thousands):

Supplemental cash flow and other information related to our leases were as follows for the three months ended March 31, 2020 and March 31, 2019 (in thousands):