Leases

9 Months Ended

Sep. 30, 2019

5. Leases

The Company has operating and finance leases for regional offices, manufacturing facilities, retail centers, distribution centers and certain equipment. The Company’s leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. As of September 30, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 4.0 years and 4.8%. The Company has not separately disclosed finance leases, as they are not material, either individually or in the aggregate, to the Company’s consolidated financial statements.

The components of lease expense were as follows (U.S. dollars in thousands):

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019

Operating lease cost	$	12,399	$	37,677
Short-term lease cost		41		145
Variable lease cost		732		2,889
	$	13,172	$	40,711

As of September 30, 2019, the Company had $115.6 million of operating right-of-use assets on the balance sheet, along with $37.2 million and $81.0 million of operating lease liabilities in accrued expenses and long-term operating lease liabilities, respectively.

	Nine Months Ended September 30, 2019

Operating cash outflow from operating leases	$	39,885
ROU assets obtained in exchange for lease obligations	$	150,127

Maturities of lease liabilities were as follows (U.S. dollars in thousands):

Year Ending December 31,	Operating leases

2019	$	12,801
2020		39,764
2021		32,965
2022		18,419
2023		11,387
Thereafter		15,721
Total		131,057
Less: Finance charges		12,860
Total principal liability	$	118,197

The Company has additional lease liabilities of $13.3 million which have not yet commenced as of September 30, 2019, and as such, have not been recognized on the consolidated balance sheets.

Under ASC Topic 840, minimum future operating leases and financing obligations at December 31, 2018 are as follows (U.S. dollars in thousands):

Year Ending December 31,	Operating leases		Finance leases

2019	$	39,358	$	726
2020		27,553		748
2021		20,266		757
2022		11,723		770
2023		9,950		794
Thereafter		7,628		1,148
Total minimum lease payments	$	116,478	$	4,943