Leases (Notes)

6 Months Ended

Jun. 30, 2020

– Leases

During the first quarter 2019, the Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted the standard using the modified retrospective approach with an effective date as of January 1, 2019. Upon adoption, the Company recorded $194,100 for right-of-use asset and $209,000 for lease liabilities.

The Company elected the package of three practical expedients. As such, the Company did not reassess whether expired or existing contracts are or contain a lease and did not need to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The Company did not elect the hindsight practical expedient and the land easement practical expedient, neither of which are applicable to the Company. In addition, the Company has elected to take the practical expedient to not separate lease and non-lease components for all asset classes.

The Company leases office space, sample production space, warehouses, showrooms, storage and retail stores under operating leases. The Company’s portfolio of leases is primarily related to real estate and since most of its leases do not provide a readily determinable implicit rate, the Company estimated its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Lease Position

The table below presents the lease-related assets and liabilities recorded on the balance sheet as of June 30, 2020 and December 31, 2019:


	Classification on the Balance Sheet	June 30, 2020			December 31, 2019
Assets
Noncurrent ^{(1) (2)}	Operating lease right-of-use asset	$	120,489		$	155,700

Liabilities
Current	Operating leases - current portion	$	36,890		$	38,624
Noncurrent	Operating leases - long-term portion	114,630			133,172
Total operating lease liabilities		$	151,520		$	171,796

Weighted-average remaining lease term		5.2 years			5.5 years
Weighted-average discount rate		4.4		%	4.4		%

(1) During the first quarter of 2020, the Company recorded a pre-tax impairment charge related to the right-of-use assets of $16,826 and during the second quarter of 2020, the Company recorded a pre-tax impairment charge related to the right-of-use assets of $1,161.

(2) During the third quarter of 2019, the Company recorded a pre-tax impairment charge related to the right-of-use assets of $1,883.

Lease Costs

The table below presents certain information related to lease costs during the three and six months ended June 30, 2020 and 2019:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	9,033	$	11,544	$	20,416	$	22,901
Short-term lease cost	106		9		119		16
Less: sublease income	201		147		402		277
Total lease cost	$	8,938	$	11,406	$	20,133	$	22,640

Other Information

The table below presents supplemental cash flow information related to leases as of the six months ended June 30, 2020 and 2019:


	Six Months Ended June 30,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	21,772	$	22,963

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities recorded on the balance sheet as of June 30, 2020:


2020 (remaining six months)	$	22,602
2021	39,925
2022	30,983
2023	22,067
2024	18,381
Thereafter	35,789
Total minimum lease payments	169,747
Less: interest	18,227
Present value of lease liabilities	$	151,520