LEASES

6 Months Ended

Jun. 30, 2020

As a result of the COVID-19 pandemic, we received lease concessions from landlords in the form of rent deferrals and rent abatements in the three months ended June 30, 2020. We chose to implement the policy election provided by the FASB in April 2020 to record rent concessions as if no modifications to leases contracts were made, and thus no changes to the lease obligations were recorded in respect to these concessions. As of June 30, 2020, we had outstanding deferred rent of $4.3 million, the majority of which will be paid by December 31, 2020, and in the three months ended June 30, 2020, we received rent abatements of $1.3 million.

Right-of-Use Assets and Operating Lease Liabilities

Amounts reported in the condensed consolidated balance sheets were:


	June 30, 2020		December 31, 2019
	(in thousands)
Assets:
Right-of-use assets	$	183,490	$	182,228
Liabilities:
Current operating lease liabilities	$	49,168	$	48,585
Long-term operating lease liabilities	141,887		140,148
Total operating lease liabilities	$	191,055	$	188,733

Lease Costs and Other Information

Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of operations were:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(in thousands)
Operating lease cost	$	15,219	$	14,749	$	30,213	$	29,679
Short-term lease cost	1,337		387		2,662		1,747
Variable lease cost	4,273		4,300		5,773		7,289
Total lease costs	$	20,829	$	19,436	$	38,648	$	38,715

Other information related to leases, including supplemental cash flow information, consists of:


	Six Months Ended June 30,
	2020		2019
	(in thousands)
Cash paid for operating leases	$	23,587	$	33,729
Right-of-use assets obtained in exchange for operating lease liabilities ⁽¹⁾	27,586		190,102

⁽¹⁾In the six months ended June 30, 2019, we implemented ASC 842, Leases. The previously reported amount includes $176.1 million for operating leases existing on January 1, 2019 and $14.0 million for operating leases that commenced in the six months ended June 30, 2019.

The weighted average remaining lease term and discount rate related to our lease liabilities as of June 30, 2020 were 6.3 years and 4.7%, respectively. As of June 30, 2019, the weighted average remaining lease term and discount rate related to our lease liabilities were 5.5 years and 4.8%, respectively.

Maturities

The maturities of our operating lease liabilities were:


	As of June 30, 2020
	(in thousands)
2020 (remainder of year)	$	25,737
2021	51,035
2022	36,554
2023	27,061
2024	17,531
Thereafter	65,996
Total future minimum lease payments	223,914
Less: imputed interest	(32,859)
Total operating lease liabilities	$	191,055

Leases That Have Not Yet Commenced

As of June 30, 2020, we had significant obligations for a lease that has not yet commenced related to our new EMEA distribution center. In the fourth quarter of 2019, we entered into a lease for a new distribution center in Dordrecht, the Netherlands, which is expected to replace our existing distribution center in Rotterdam by the end of 2021. The total contractual commitment related to this lease, with payments expected to begin in January 2021 and continuing through December 2030, is approximately €23 million, or $26 million, with expected total capital investments of approximately €20 million, or $23 million, through 2021. Additionally, as of June 30, 2020, we had significant obligations for a lease that has not yet commenced related to the expansion of our Americas distribution center in Dayton, Ohio. The total contractual commitment related to this lease, with payments expected to begin August 2020 and continuing through September 2030, is approximately $26 million, with expected total capital investments of approximately $10 million through 2020.