CARTERS INC [CRI] Filings

10-Q 1 cri-20211002.htm 10-Q cri-20211002

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to __________

Commission file number: 001-31829

CARTER’S, INC.

(Exact name of registrant as specified in its charter)


Delaware						13-3912933
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

Phipps Tower,

3438 Peachtree Road NE, Suite 1800

Atlanta, Georgia 30326

(Address of principal executive offices, including zip code)

(678) 791-1000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common stock, par value $0.01 per share	CRI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No x

As of October 22, 2021, there were 42,265,791 shares of the registrant’s common stock outstanding.

CARTER’S, INC.

INDEX


			Page
Part I. Financial Information

	Item 1	Financial Statements
		Unaudited Condensed Consolidated Balance Sheets as of October 2, 2021, January 2, 2021 and September 26, 2020	1
		Unaudited Condensed Consolidated Statements of Operations for the fiscal quarter and three fiscal quarters ended October 2, 2021 and September 26, 2020	2
		Unaudited Condensed Consolidated Statements of Comprehensive Income for the fiscal quarter and three fiscal quarters ended October 2, 2021 and September 26, 2020	3
		Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the fiscal quarters ended October 2, 2021, July 3, 2021, April 3, 2021, September 26, 2020, June 27, 2020, and March 28, 2020	4
		Unaudited Condensed Consolidated Statements of Cash Flows for the three fiscal quarters ended October 2, 2021 and September 26, 2020	6
		Notes to the Unaudited Condensed Consolidated Financial Statements	7
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3	Quantitative and Qualitative Disclosures about Market Risk	30
	Item 4	Controls and Procedures	31

Part II. Other Information

	Item 1	Legal Proceedings	32
	Item 1A	Risk Factors	32
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 3	Defaults upon Senior Securities	32
	Item 4	Mine Safety Disclosures	32
	Item 5	Other Information	32
	Item 6	Exhibits	33

Signatures			34

Certifications

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARTER’S, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited)


	October 2, 2021		January 2, 2021		September 26, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	943,025	$	1,102,323	$	831,175
Accounts receivable, net of allowance for credit losses of $8,678, $5,940, and $7,675, respectively	261,182		186,512		263,231
Finished goods inventories, net of inventory reserves of $23,698, $14,206, and $30,053, respectively	722,396		599,262		646,608
Prepaid expenses and other current assets	56,182		57,927		56,493
Total current assets	1,982,785		1,946,024		1,797,507
Property, plant, and equipment, net of accumulated depreciation of $557,164, $583,980, and $576,123, respectively	218,828		262,345		274,574
Operating lease assets	510,051		593,008		619,057
Tradenames, net	307,705		307,893		307,955
Goodwill	212,016		211,776		209,507
Customer relationships, net	34,843		37,510		38,147
Other assets	28,028		34,024		34,874
Total assets	$	3,294,256	$	3,392,580	$	3,281,621

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	388,726	$	472,140	$	473,473
Current operating lease liabilities	153,339		185,152		172,364
Other current liabilities	132,400		135,240		115,069
Total current liabilities	674,465		792,532		760,906

Long-term debt, net	990,900		989,530		989,086
Deferred income taxes	52,967		52,770		60,160
Long-term operating lease liabilities	464,660		554,497		587,099
Other long-term liabilities	56,390		65,218		62,489
Total liabilities	$	2,239,382	$	2,454,547	$	2,459,740

Commitments and contingencies - Note 14

Stockholders’ equity:
Preferred stock; par value $0.01 per share; 100,000 shares authorized; none issued or outstanding at October 2, 2021, January 2, 2021, and September 26, 2020	$	—	$	—	$	—
Common stock, voting; par value $0.01 per share; 150,000,000 shares authorized; 42,946,790, 43,780,075, and 43,648,671 shares issued and outstanding at October 2, 2021, January 2, 2021, and September 26, 2020, respectively	429		438		436
Additional paid-in capital	—		17,752		9,258
Accumulated other comprehensive loss	(32,689)		(32,760)		(41,402)
Retained earnings	1,087,134		952,603		853,589
Total stockholders’ equity	1,054,874		938,033		821,881
Total liabilities and stockholders’ equity	$	3,294,256	$	3,392,580	$	3,281,621

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

(unaudited)


	Fiscal quarter ended				Three fiscal quarters ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Net sales	$	890,586	$	865,080	$	2,424,347	$	2,034,437
Cost of goods sold	481,298		483,333		1,262,822		1,170,778
Adverse purchase commitments (inventory and raw materials), net	507		(1,968)		(7,923)		16,166
Gross profit	408,781		383,715		1,169,448		847,493
Royalty income, net	8,442		9,063		22,550		19,989
Selling, general, and administrative expenses	293,192		279,251		832,889		767,237
Goodwill impairment	—		—		—		17,742
Intangible asset impairment	—		—		—		26,500
Operating income	124,031		113,527		359,109		56,003
Interest expense	15,196		16,347		45,839		40,523
Interest income	(335)		(330)		(761)		(1,217)
Other expense (income), net	844		(2,758)		(796)		2,647
Income before income taxes	108,326		100,268		314,827		14,050
Income tax provision	23,350		19,027		72,052		3,347
Net income	$	84,976	$	81,241	$	242,775	$	10,703

Basic net income per common share	$	1.94	$	1.86	$	5.53	$	0.25
Diluted net income per common share	$	1.93	$	1.85	$	5.51	$	0.24
Dividend declared and paid per common share	$	0.40	$	—	$	0.80	$	0.60

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

(unaudited)


	Fiscal quarter ended				Three fiscal quarters ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Net income	$	84,976	$	81,241	$	242,775	$	10,703
Other comprehensive (loss) income:

Foreign currency translation adjustments	(5,426)		3,643		71		(5,768)
Comprehensive income	$	79,550	$	84,884	$	242,846	$	4,935

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(amounts in thousands, except share amounts)

(unaudited)


	Common stock - shares	Common stock - $		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Total stockholders’ equity
Balance at December 28, 2019	43,963,103	$	440	$	—	$	(35,634)	$	915,324	$	880,130
Exercise of stock options	33,158	—		1,840		—		—		1,840
Withholdings from vesting of restricted stock	(43,611)	—		(4,712)		—		—		(4,712)
Restricted stock activity	132,759	1		(1)		—		—		—
Stock-based compensation expense	—	—		1,945		—		—		1,945

Repurchase of common stock	(474,684)	(5)		928		—		(46,178)		(45,255)
Cash dividends declared and paid	—	—		—		—		(26,260)		(26,260)
Comprehensive loss	—	—		—		(12,992)		(78,694)		(91,686)

Balance at March 28, 2020	43,610,725	$	436	$	—	$	(48,626)	$	764,192	$	716,002
Exercise of stock options	14,180	—		1,076		—		—		1,076
Withholdings from vesting of restricted stock	(1,016)	—		(77)		—		—		(77)
Restricted stock activity	12,287	—		—		—		—		—
Stock-based compensation expense	—	—		4,540		—		—		4,540



Comprehensive income	—	—		—		3,581		8,156		11,737

Balance at June 27, 2020	43,636,176	$	436	$	5,539	$	(45,045)	$	772,348	$	733,278
Exercise of stock options	12,811	—		812		—		—		812
Withholdings from vesting of restricted stock	(1,744)	—		(139)		—		—		(139)
Restricted stock activity	1,428	—		—		—		—		—
Stock-based compensation expense	—	—		3,046		—		—		3,046



Comprehensive income	—	—		—		3,643		81,241		84,884

Balance at September 26, 2020	43,648,671	$	436	$	9,258	$	(41,402)	$	853,589	$	821,881


	Common stock - shares	Common stock - $		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Total stockholders’ equity
Balance at January 2, 2021	43,780,075	$	438	$	17,752	$	(32,760)	$	952,603	$	938,033
Exercise of stock options	12,065	—		811		—		—		811
Withholdings from vesting of restricted stock	(37,444)	—		(3,588)		—		—		(3,588)
Restricted stock activity	192,963	2		(2)		—		—		—
Stock-based compensation expense	—	—		6,931		—		—		6,931



Comprehensive income	—	—		—		1,226		86,196		87,422
Balance at April 3, 2021	43,947,659	$	440	$	21,904	$	(31,534)	$	1,038,799	$	1,029,609
Exercise of stock options	57,274	—		4,336		—		—		4,336
Withholdings from vesting of restricted stock	(1,057)	—		(110)		—		—		(110)
Restricted stock activity	7,204	—		—		—		—		—
Stock-based compensation expense	—	—		5,391		—		—		5,391


Cash dividends declared and paid	—	—		—		—		(17,596)		(17,596)
Comprehensive income	—	—		—		4,271		71,603		75,874

Balance at July 3, 2021	44,011,080	$	440	$	31,521	$	(27,263)	$	1,092,806	$	1,097,504
Exercise of stock options	30,464	—		2,313		—		—		2,313
Withholdings from vesting of restricted stock	(1,885)	—		(199)		—		—		(199)
Restricted stock activity	3,030	—		—		—		—		—
Stock-based compensation expense	—	—		3,515		—		—		3,515

Repurchase of common stock	(1,095,899)	(11)		(37,150)		—		(73,101)		(110,262)
Cash dividends declared and paid	—	—		—		—		(17,547)		(17,547)
Comprehensive (loss) income	—	—		—		(5,426)		84,976		79,550

Balance at October 2, 2021	42,946,790	$	429	$	—	$	(32,689)	$	1,087,134	$	1,054,874

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)


	Three fiscal quarters ended
	October 2, 2021		September 26, 2020
Cash flows from operating activities:
Net income	$	242,775	$	10,703
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant, and equipment	65,269		66,985
Amortization of intangible assets	2,799		2,784
Provisions for excess and obsolete inventory	9,507		20,912
Goodwill impairment	—		17,742
Intangible asset impairments	—		26,500
Other asset impairments and loss on disposal of property, plant and equipment, net of recoveries	1,988		9,395
Amortization of debt issuance costs	2,271		1,641
Stock-based compensation expense	15,837		9,531
Unrealized foreign currency exchange loss, net	95		1,354
Provisions for doubtful accounts receivable from customers	2,754		7,702
Unrealized gain on investments	(1,910)		(628)

Deferred income taxes expense (benefit)	894		(16,697)
Effect of changes in operating assets and liabilities:
Accounts receivable	(77,522)		(21,576)
Finished goods inventories	(132,999)		(76,739)
Prepaid expenses and other assets(*)	2,483		(8,432)
Accounts payable and other liabilities	(126,922)		267,551
Net cash provided by operating activities	$	7,319	$	318,728

Cash flows from investing activities:
Capital expenditures	$	(28,663)	$	(25,212)
Proceeds from sale of investments(*)	5,000		1,400

Net cash used in investing activities	$	(23,663)	$	(23,812)

Cash flows from financing activities:
Proceeds from senior notes due 2025	$	—	$	500,000



Payment of debt issuance costs	(223)		(7,639)
Borrowings under secured revolving credit facility	—		644,000
Payments on secured revolving credit facility	—		(744,000)
Repurchases of common stock	(110,262)		(45,255)
Dividends paid	(35,143)		(26,260)
Withholdings from vesting of restricted stock	(3,897)		(4,928)
Proceeds from exercises of stock options	7,460		3,728
Net cash (used in) provided by financing activities	$	(142,065)	$	319,646

Net effect of exchange rate changes on cash and cash equivalents	(889)		2,302
Net (decrease) increase in cash and cash equivalents	$	(159,298)	$	616,864
Cash and cash equivalents, beginning of period	1,102,323		214,311
Cash and cash equivalents, end of period	$	943,025	$	831,175

(*)Cash flows for the three fiscal quarters ended September 26, 2020 were revised to reflect the reclassification of $1.4 million proceeds from sale of investments from cash flows from operating activities to cash flows from investing activities.

See accompanying notes to the unaudited condensed consolidated financial statements.

CARTER’S, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 – THE COMPANY

Carter’s, Inc. and its wholly owned subsidiaries (collectively, the “Company”) design, source, and market branded childrenswear under the Carter’s, OshKosh, Skip Hop, Child of Mine, Just One You, Simple Joys, My First Love, little planet, and other brands. The Company’s products are sourced through contractual arrangements with manufacturers worldwide for: 1) wholesale distribution to leading department stores, national chains, and specialty retailers domestically and internationally and 2) distribution to the Company’s own retail stores and eCommerce sites that market its brand name merchandise and other licensed products manufactured by other companies.

NOTE 2 – BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). All intercompany transactions and balances have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, comprehensive income, statement of stockholders’ equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the fiscal quarter ended October 2, 2021 are not necessarily indicative of the results that may be expected for the current fiscal year ending January 1, 2022.

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

The accompanying condensed consolidated balance sheet as of January 2, 2021 was derived from the Company’s audited consolidated financial statements included in its most recently filed Annual Report on Form 10-K. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q.

COVID-19

The Company is closely monitoring the effects of the ongoing coronavirus (“COVID-19”) pandemic and its impact on our business. Additionally, the Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of October 2, 2021 and through the date of this report filing. The accounting matters assessed included, but were not limited to, our allowance for credit losses, inventory reserves, adverse fabric purchase commitments, stock-based compensation, and the carrying value of our goodwill, indefinite-lived intangible assets, and other long-lived assets. Based on these assessments, in the first three quarters of fiscal 2021, the Company released adverse purchase commitment reserves of $8.4 million related to better than expected sales of inventory and utilization of fabric that was reserved for in the first quarter of fiscal 2020 due to COVID-19 related disruptions. As of October 2, 2021, there is no outstanding reserve for adverse fabric purchase commitments related to COVID-19 disruptions in fiscal 2020.

Additional COVID-19 related charges were $0.3 million and $3.5 million in the third quarter of fiscal 2021 and the first three quarters of fiscal 2021, respectively. These charges were primarily related to the costs associated with additional personal protective equipment and cleaning supplies.

Accounting Policies

The accounting policies the Company follows are set forth in its most recently filed Annual Report on Form 10-K. There have been no material changes to these accounting policies.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3 - REVENUE RECOGNITION

The Company’s revenues are earned from contracts or arrangements with retail and wholesale customers and licensees. Contracts include written agreements as well as arrangements that are implied by customary practices or law.

Disaggregation of Revenue

The Company sells its products directly to consumers (“direct-to-consumer”) and to other retail companies and partners that subsequently sell the products directly to their own retail customers. The Company also earns royalties from certain of its licensees. Disaggregated revenues from these sources for the third quarter and first three quarters of fiscal 2021 and 2020 were as follows:


	Fiscal quarter ended October 2, 2021
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Wholesale channel	$	—	$	294,180	$	48,935	$	343,115
Direct-to-consumer	465,711		—		81,760		547,471

	$	465,711	$	294,180	$	130,695	$	890,586

Royalty income	$	2,500	$	5,226	$	716	$	8,442


	Three fiscal quarters ended October 2, 2021
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Wholesale channel	$	—	$	809,186	$	125,337	$	934,523
Direct-to-consumer	1,296,405		—		193,419		1,489,824

	$	1,296,405	$	809,186	$	318,756	$	2,424,347

Royalty income	$	7,930	$	11,877	$	2,743	$	22,550


	Fiscal quarter ended September 26, 2020
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Wholesale channel	$	—	$	302,135	$	37,838	$	339,973
Direct-to-consumer	449,150		—		75,957		525,107

	$	449,150	$	302,135	$	113,795	$	865,080

Royalty income	$	3,902	$	3,986	$	1,175	$	9,063


	Three fiscal quarters ended September 26, 2020
(dollars in thousands)	U.S. Retail		U.S. Wholesale		International		Total
Wholesale channel	$	—	$	706,009	$	92,110	$	798,119
Direct-to-consumer	1,085,883		—		150,435		1,236,318

	$	1,085,883	$	706,009	$	242,545	$	2,034,437

Royalty income	$	7,648	$	9,576	$	2,765	$	19,989

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounts Receivable from Customers and Licensees

The components of Accounts receivable, net, were as follows:


(dollars in thousands)	October 2, 2021		January 2, 2021		September 26, 2020
Trade receivables from wholesale customers, net	$	262,770	$	180,830	$	255,214
Royalties receivable	7,932		5,733		8,596
Tenant allowances and other receivables	9,336		12,315		12,064
Total receivables	$	280,038	$	198,878	$	275,874
Less: Wholesale accounts receivable reserves(*)	(18,856)		(12,366)		(12,643)
Accounts receivable, net	$	261,182	$	186,512	$	263,231

(*)Includes allowance for credit losses of $8.7 million, $5.9 million, and $7.7 million for the periods ended October 2, 2021, January 2, 2021, and September 26, 2020, respectively.

Contract Assets and Liabilities

The Company’s contract assets are not material.

Contract Liabilities

The Company recognizes a contract liability when it has received consideration from a customer and has a future obligation to transfer goods to the customer. Total contract liabilities consisted of the following amounts:


(dollars in thousands)	October 2, 2021		January 2, 2021		September 26, 2020
Contract liabilities - current:
Unredeemed gift cards	$	18,948	$	18,300	$	15,977
Unredeemed customer loyalty rewards	6,677		5,241		5,510
Carter’s credit card - upfront bonus(1)	714		714		714
Total contract liabilities - current(2)	$	26,339	$	24,255	$	22,201

Contract liabilities - non-current(3)	$	2,321	$	2,857	$	3,036
Total contract liabilities	$	28,660	$	27,112	$	25,237

(1)The Company received an upfront signing bonus from a third-party financial institution, which will be recognized as revenue on a straight-line basis over the term of the agreement. This amount reflects the current portion of this bonus to be recognized as revenue over the next twelve months.

(2)Included with Other current liabilities on the Company’s consolidated balance sheets.

(3)This amount reflects the non-current portion of the Carter’s credit card upfront bonus.

NOTE 4 - LEASES

The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company’s leases generally have initial terms ranging from 1 year to 10 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to early terminate the lease.

As of the periods presented, the Company’s finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statements of cash flows.

The following components of lease expense are included in Selling, general and administrative expenses on the Company’s consolidated statements of operations for the third quarter and first three quarters of fiscal 2021 and 2020:


	Fiscal quarter ended				Three fiscal quarters ended
(dollars in thousands)	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Operating lease cost	$	40,917	$	44,230	$	125,715	$	136,180




Variable lease cost (*)	15,444		19,635		48,118		55,139
Net lease cost	$	56,361	$	63,865	$	173,833	$	191,319

(*)Includes short-term leases, which are not material, and operating lease asset impairment charges.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of October 2, 2021, the weighted average remaining operating lease term was 5.1 years, and the weighted average discount rate for operating leases was 3.28%.

Cash paid for amounts included in the measurement of operating lease liabilities in the third quarter and first three quarters of fiscal 2021 were $47.6 million and $162.3 million, respectively.

Operating lease assets obtained in exchange for operating lease liabilities in the third quarter and first three quarters of fiscal 2021 were $18.6 million and $26.2 million, respectively.

As of October 2, 2021, the maturities of lease liabilities were as follows:


(dollars in thousands)	Operating leases
Remainder of 2021	$	46,341
2022	162,896
2023	137,967
2024	109,661
2025	77,907
2026	55,589
After 2026	82,009
Total lease payments	$	672,370
Less: Interest	(54,371)
Present value of lease liabilities(*)	$	617,999