Leases

12 Months Ended

Dec. 31, 2019

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 to 25 years, some of which include options to extend leases for up to 20 years, and some of which include options to terminate leases within 1 year. 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.

As of December 31, 2019, the Company had $144.3 million of operating lease ROU assets on the balance sheet in “Right-of-use assets”, along with $39.3 million and $105.7 million of operating lease liabilities in “Accrued expenses” and “Long-term operating lease liabilities”, respectively. Additionally, as of December 31, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 6.0 years and 5.0%, respectively.

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

	Year Ended December 31, 2019
Operating lease cost	$	51,072
Variable lease cost		3,387
Short-term lease cost		169
Sublease income		(5,743	)
Total lease expense	$	48,885

Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands):

	Year Ended December 31, 2019
Operating cash outflow	$	54,993
ROU assets obtained in exchange for lease liabilities	$	184,502

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

Year Ending December 31,	Operating Leases
2020	$	45,942
2021		38,545
2022		23,822
2023		17,949
2024		12,876
Thereafter		31,368
Total		170,502
Less: Imputed interest		25,452
Total lease liability	$	145,050

The Company has additional lease liabilities of $8.9 million which had not yet commenced as of December 31, 2019, and as such, have not been recognized on the consolidated balance sheets.

In connection with the adoption of ASC 842, the Company derecognized the build-to-suit assets and liabilities that remained on the balance sheet following the construction period, which was completed prior to the adoption of ASC 842. Under ASC 842, the lease was determined to be an operating lease, and is included in ROU assets disclosed above. As of December 31, 2018, the Company had recognized $19.4 million as an asset related to the build-to-suit building and a financing obligation of $9.9 million, net of a $9.9 million deposit paid directly to the landlord, as part of other liabilities in its consolidated balance sheet. As of December 31, 2018, the tenant incentive asset and deferred tenant incentive liability associated with the financing obligation totaled $4.0 million and $3.7 million, respectively.

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		Financing Obligations
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

Rent expense for operating leases totaled $50.4 million, $50.7 million for the years ended December 31, 2018, and 2017, respectively. Interest expense associated with the financing obligations was $0.2 million for the years ended December 31, 2018 and 2017.