Commitments and Contingencies

Commitments

We lease facilities for our corporate office, sales centers and centralized shipping locations under operating leases that expire in various years through 2032. Most of our leases contain five-year terms with renewal options. For leases with step rent provisions whereby the rental payments increase incrementally over the life of the lease, we recognize expense on a straight-line basis determined by the total minimum lease payments over the minimum lease term. The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands):



2018		2017		2016
$	70,102	$	66,161	$	63,940

The table below sets forth the approximate future minimum lease payments as of December 31, 2018 related to non-cancelable facility operating leases with initial terms of one year or more (in thousands):



2019	$	50,416
2020	48,580
2021	37,411
2022	28,078
2023	16,260
Thereafter	16,020

Upon adoption of ASU 2016-02, Leases, we will be required to record most leases on our balance sheets and recognize expenses in a manner similar to current guidance. We will also be required to provide enhanced disclosures related to our lease agreements. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018. The guidance is required to be applied using a modified retrospective approach, which for us will entail recording an immaterial cumulative adjustment to retained earnings as of January 1, 2019 rather than retrospectively adjusting prior periods. This adoption approach will also result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption.

The adoption of ASU 2016-02 will have a significant impact on our Consolidated Balance Sheets as we will be recording a right-of-use asset and corresponding liability for our current operating leases. Presentation of leases within our Consolidated Statements of Income and Consolidated Statements of Cash Flows will be generally consistent with the current lease accounting guidance. For additional information on this new accounting pronouncement, refer to Note 1.

Contingencies

From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. Each quarter, we evaluate developments related to claims and litigation and record a liability if we deem a loss to be probable and estimable. When evaluating these matters for accrual and disclosure, we consider factors such as historical experience, specific facts and claims asserted, the likelihood we will prevail and the magnitude of any potential loss. The outcome of any litigation is inherently unpredictable. Based on currently available facts, we do not believe that the ultimate resolution of any of these claims and litigation matters will have a material adverse impact on our financial condition, results of operations or cash flows. We do not believe our exposure for any of these matters is material for disclosure, either individually or in the aggregate.