Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

ote O - Commitments and ContingenciesIn the normal course of business, the Company and its subsidiaries are involved in various claims and legal proceedings. While the ultimate resolution of these matters has yet to be determined, the Company does not believe that any unfavorable outcomes will have a material adverse effect on the Company's consolidated financial position or results of operations.

Leases

The Company and its subsidiaries lease manufacturing facilities, warehouses, office facilities, retail stores, equipment and vehicles under various operating arrangements. Certain of the leases are subject to escalation clauses and renewal periods. The Company and its subsidiaries recognize lease expense, including predetermined fixed escalations, on a straight-line basis over the initial term of the lease including reasonably assured renewal periods from the time that the Company and its subsidiaries control the leased property. Leases 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 of our subsidiaries have leases that contain both fixed rent costs and variable rent costs based on achievement of certain operating metrics. The variable lease expense was not a material component of our total lease expense for the three and six months ended June 30, 2022 and 2021. The Company recognized $10.6 million and $21.0 million in the three and six months ended June 30, 2022 and $8.6 million and $17.2 million in the three and six months ended June 30, 2021, respectively, in expense related to operating leases in the condensed consolidated statements of operations.

The maturities of lease liabilities at June 30, 2022 are as follows (in thousands):


2022 (excluding six months ended June 30, 2022)	$	15,243
2023	31,316
2024	26,536
2025	22,023
2026	18,415
Thereafter	37,793
Total undiscounted lease payments	$	151,326
Less: Interest	9,010
Present value of lease liabilities	$	142,316

The calculated amount of the right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and discount rate used to present value the minimum lease payments. The Company's lease agreements often include one or more options to renew at the company's discretion. In general, it is not reasonably certain that lease renewals will be exercised at lease commencement and therefore lease renewals are not included in the lease term. Regarding the discount rate, lease accounting guidance requires the use of a rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes the incremental borrowing rate of the subsidiary entering into the lease arrangement, on a collateralized basis, over a similar term as adjusted for any country specific risk.

The weighted average remaining lease terms and discount rates for all of our operating leases were as follows:


Lease Term and Discount Rate	June 30, 2022		June 30, 2021
Weighted-average remaining lease term (years)	5.98		5.62
Weighted-average discount rate	7.18	%	7.33	%

Supplemental balance sheet information related to leases was as follows (in thousands):


	Line Item in the Company’s Consolidated Balance Sheet	June 30, 2022		December 31, 2021

Operating lease right-of-use assets	Other non-current assets	$	124,692	$	116,992
Current portion, operating lease liabilities	Other current liabilities	$	25,713	$	25,663
Operating lease liabilities	Other non-current liabilities	$	116,603	$	103,800

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


	Six months ended June 30, 2022		Six months ended June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13,929	$	11,425
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	19,947	$	17,379