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Leases | 12 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
Leases | Note 8, Leases: We have operating leases for retail stores, offices, warehouses, and certain equipment. Our leases have remaining lease terms of between 1 year and 14 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. In April 2020, the Financial Accounting Standards Board issued guidance allowing entities to make a policy election to account for lease concessions related to the COVID-19 pandemic as though enforceable rights and obligations for those concessions existed. The election applies to any lessor-provided lease concession related to the impact of the COVID-19 pandemic, provided the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. During the year ended December 31, 2020, we received concessions from certain landlords in the form of rent deferrals of approximately $4.5 million and abatements of approximately $1.8 million. We have elected to account for these rent concessions as though enforceable rights and obligations for those concessions existed in the original lease agreements and have recorded a non-interest bearing payable for the deferred rent payments. On May 18, 2020, we completed a sale and leaseback transaction of three facilities which we initiated in April 2020 as part of our business continuity plan. The Coppell, TX location has approximately 394,000 distribution square feet used to serve our western stores, 44,000 retail square feet, and 20,000 square feet of office space used for a call center and general management purposes. The Lakeland, FL  property is a distribution center with approximately 335,000 square feet and the Colonial Heights property is a distribution facility with 129,000 square feet. The facilities were leased back to Havertys via 15-year operating lease agreements with renewal options.  The total sales price for these properties, excluding costs and taxes, was $70.0 million and their net book value was approximately $37.9 million. The gain of approximately $31.6 million was recognized in the second quarter of 2020 and is included in other income. In August 2021, we repurchased the Colonial Heights property, that was part of the sale-leaseback transaction in 2020 for $8.5 million. As of December 31, 2021, we have entered into two leases for additional retail locations which have not yet commenced and are under construction. The table below presents the operating lease assets and liabilities recognized on the consolidated balance sheets as of December 31:
(in thousands) |  | 2021 |  |  | 2020 |
Operating Lease Assets: |  |  |  |  |  |
Right-of use lease assets |  | $ | 222,356 |  |  | $ | 228,749 |
Operating Lease Liabilities: |  |  |  |  |  |  |  |
Current lease liabilities |  | $ | 33,581 |  |  | $ | 33,466 |
Non-current lease liabilities |  |  | 196,771 |  |  |  | 200,200 |
Total operating lease liabilities |  | $ | 230,352 |  |  | $ | 233,666 |
Our leases generally do not provide an implicit rate, and therefore we use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. The weighted-average remaining lease term and weighted-average discount rate for operating leases as of December 31 are:
|  | 2021 |  |  | 2020 |
Weighted-average remaining lease term |  | 8.1 years |  |  | 8.8 years |
Weighted-average discount rate |  |  | 5.62 | % |  |  | 6.07 | %
The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheet as of December 31, 2021:
(in thousands) |  | Operating Leases |
2022 |  | $ | 45,277 |
2023 |  |  | 41,509 |
2024 |  |  | 37,483 |
2025 |  |  | 32,059 |
2026 |  |  | 27,563 |
Thereafter |  |  | 106,805 |
Total undiscounted future minimum lease payments |  |  | 290,696 |
Less: difference between undiscounted lease payments and discounted operating lease liabilities |  |  | (60,344 | )
Total operating lease liabilities |  | $ | 230,352 |
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 as lease expense in the period incurred. Components of lease expense which are included in selling, general, and administrative expenses within our consolidated statements of comprehensive income were as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Operating lease cost |  | $ | 46,774 |  |  | $ | 44,854 |  |  | $ | 41,681 |
Short-term lease cost |  |  | — |  |  |  | — |  |  |  | 90 |
Variable lease cost |  |  | 6,680 |  |  |  | 5,827 |  |  |  | 5,653 |
Total lease expense |  | $ | 53,454 |  |  | $ | 50,681 |  |  | $ | 47,424 |
Supplemental cash flow information related to leases is as follows:
|  | Year Ended December 31, |
(In thousands) |  | 2021 |  |  | 2020 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 47,607 |  |  | $ | 39,341 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  | $ | 25,025 |  |  | $ | 89,082 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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