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Leases

12 Months Ended

Dec. 31, 2022

We lease office space, distribution centers, land, vehicles and equipment. Lease agreements with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at our sole discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Certain of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides information about the financial statement classification of our lease balances reported within the consolidated balance sheets as of December 31, 2022 and December 31, 2021 (in thousands):


		December 31,
Leases	Classification	2022		2021
Assets
Operating lease assets	Other assets	$	76,160	$	72,605
Finance lease assets	Property and equipment(a)	59		80
Total lease assets		$	76,219	$	72,685
Liabilities
Current
Operating lease liabilities	Accrued expenses and other current liabilities	$	19,213	$	20,667
Finance lease liabilities	Current portion of long-term debt	28		36
Non-current
Operating lease liabilities	Other liabilities	63,324		58,442
Finance lease liabilities	Long-term debt	—		27
Total lease liabilities		$	82,565	$	79,172


(a)			Recorded net of accumulated amortization of $48,000 and $27,000 as of December 31, 2022 and 2021, respectively.

The following table provides information about the financial statement classification of our lease expenses reported within the consolidated statement of operations for the year ended December 31, 2022 and 2021 (in thousands):


		December 31,
Lease cost	Classification	2022		2021
Operating lease cost (a) (b)	Selling and administrative expenses	$	23,986	$	24,839
Finance lease cost
Amortization of leased assets	Selling and administrative expenses	29		697
Interest on lease liabilities	Interest expense, net	2		33
Total lease cost		$	24,017	$	25,569


(a)			Includes immaterial amounts recorded to cost of goods sold.
(b)			Excludes short-term and variable lease costs, which are immaterial.

Future minimum lease payments under non-cancelable leases as of December 31, 2022 are as follows (in thousands):


	Operating leases		Finance leases		Total
2023	$	21,719	$	28	$	21,747
2024	16,614		—		16,614
2025	13,568		—		13,568
2026	12,038		—		12,038
2027	10,140		—		10,140
After 2027	17,366		—		17,366
Total lease payments	91,445		28		91,473
Less: Interest	(8,908)		—		(8,908)
Present value of lease liabilities	$	82,537	$	28	$	82,565

The following table provides information about the remaining lease terms and discount rates applied as of December 31, 2022 and 2021:


	December 31,
	2022	2021
Weighted average remaining lease term (years):
Operating leases	5.67	5.79
Finance leases	0.75	1.75
Weighted average discount rate (%):
Operating leases	3.49	3.09
Finance leases	1.49	1.49

The following table provides other information related to leases for the year ended December 31, 2022 and 2021 (in thousands):


	December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,674	$	24,640
Leased assets obtained in exchange for new operating lease liabilities	22,725		15,980

Leases


		December 31,
Leases	Classification	2022		2021
Assets
Operating lease assets	Other assets	$	76,160	$	72,605
Finance lease assets	Property and equipment(a)	59		80
Total lease assets		$	76,219	$	72,685
Liabilities
Current
Operating lease liabilities	Accrued expenses and other current liabilities	$	19,213	$	20,667
Finance lease liabilities	Current portion of long-term debt	28		36
Non-current
Operating lease liabilities	Other liabilities	63,324		58,442
Finance lease liabilities	Long-term debt	—		27
Total lease liabilities		$	82,565	$	79,172


(a)			Recorded net of accumulated amortization of $48,000 and $27,000 as of December 31, 2022 and 2021, respectively.


		December 31,
Lease cost	Classification	2022		2021
Operating lease cost (a) (b)	Selling and administrative expenses	$	23,986	$	24,839
Finance lease cost
Amortization of leased assets	Selling and administrative expenses	29		697
Interest on lease liabilities	Interest expense, net	2		33
Total lease cost		$	24,017	$	25,569


(a)			Includes immaterial amounts recorded to cost of goods sold.
(b)			Excludes short-term and variable lease costs, which are immaterial.

Future minimum lease payments under non-cancelable leases as of December 31, 2022 are as follows (in thousands):


	Operating leases		Finance leases		Total
2023	$	21,719	$	28	$	21,747
2024	16,614		—		16,614
2025	13,568		—		13,568
2026	12,038		—		12,038
2027	10,140		—		10,140
After 2027	17,366		—		17,366
Total lease payments	91,445		28		91,473
Less: Interest	(8,908)		—		(8,908)
Present value of lease liabilities	$	82,537	$	28	$	82,565

The following table provides information about the remaining lease terms and discount rates applied as of December 31, 2022 and 2021:


	December 31,
	2022	2021
Weighted average remaining lease term (years):
Operating leases	5.67	5.79
Finance leases	0.75	1.75
Weighted average discount rate (%):
Operating leases	3.49	3.09
Finance leases	1.49	1.49

The following table provides other information related to leases for the year ended December 31, 2022 and 2021 (in thousands):


	December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23,674	$	24,640
Leased assets obtained in exchange for new operating lease liabilities	22,725		15,980