Leases

6 Months Ended

Jun. 30, 2022

LeasesWe have operating leases for retail stores, offices, warehouses, and certain equipment. Our leases have remaining lease terms of 1 year to 13 years, some of which include options to extend the leases for up to 20

years. We determine if an arrangement is or contains a lease at lease inception. Our leases do not have any residual value guarantees or any restrictions or covenants imposed by lessors. We have lease agreements for real estate with lease and non-lease components, which are accounted for separately.

Certain of our lease agreements for retail stores include variable lease payments, generally based on sales volume. The variable portion of payments are not included in the initial measurement of the right-of-use asset or lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. Certain of our equipment lease agreements include variable lease costs, generally based on usage of the underlying asset (mileage, fuel, etc.). The variable portion of payments are not included in the initial measurement of the right-of-use asset or lease liability due to uncertainty of the payment amount and are recorded in the period incurred.

As of June 30, 2022, we had entered into one lease for an additional retail location which had not yet commenced.

Lease expense is charged to selling, general and administrative expenses. Components of lease expense were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	11,973	$	11,873	$	23,712	$	23,700
Variable lease cost	1,783		1,609		3,478		3,117
Total lease expense	$	13,756	$	13,482	$	27,190	$	26,817

Supplemental cash flow information related to leases is as follows (in thousands):


	Six Months Ended June 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21,533	$	22,876
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	15,763	$	25,063