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Leases

12 Months Ended

Dec. 31, 2020

10. Leases

We lease certain facilities, vehicles and equipment under noncancelable operating leases. The most significant portion of these noncancelable operating leases are for the facilities occupied by our corporate office and our operating locations. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. We account for lease components separately from the non-lease components. We have certain leases with variable payments based on an index as well as some short-term leases on equipment and facilities. Variable lease expense and short-term lease expense were not material to our financial statements and aggregated to $7.7 million in 2020 and $8.4 million in 2019. Lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate as of December 31, 2020 and 2019 was 4.2% and 3.9%, respectively. We recognize lease expense, including escalating lease payments and lease incentives, on a straight-line basis over the lease term. Lease expense for the years ended December 31, 2020, 2019 and 2018 was $28.2 million, $24.8 million and $23.4 million, respectively.

The lease terms generally range from three to ten years. Some leases include one or more options to renew, which may be exercised to extend the lease term. We include the exercise of lease renewal options in the lease term when it is reasonably certain that we will exercise the option and such exercise is at our sole discretion. The weighted average remaining lease term was 7.5 years at December 31, 2020 and 8.1 years at December 31, 2019.

A majority of the Company’s real property leases are with individuals or entities with whom we have no other business relationship. However, in certain instances the Company enters into real property leases with current or former employees. Rent paid to related parties for the years ended December 31, 2020, 2019 and 2018 was approximately $4.2 million, $3.7 million and $4.8 million, respectively.

If we decide to cancel or terminate a lease before the end of its term, we would typically owe the lessor the remaining lease payments under the term of the lease. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. On rare occasions, we rent or sublease certain real estate assets that we no longer use to third parties.

The following table summarizes the lease assets and liabilities included in the consolidated Balance Sheet as follows (in thousands):


	December 31, 2020		December 31, 2019
Lease right-of-use assets	$	94,727	$	84,073
Lease liabilities:
Other current liabilities	$	16,586	$	14,016
Long-term lease liabilities		80,576		72,697
Total lease liabilities	$	97,162	$	86,713

The maturities of lease liabilities as of December 31, 2020 are as follows (in thousands):


Year ending December 31—
2021	$	20,254
2022		17,004
2023		14,727
2024		13,221
2025		12,108
Thereafter		36,645
Total Lease Payments		113,959
Less—Present Value Discount		(16,797)
Present Value of Lease Liabilities	$	97,162

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


	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities	$	20,443	$	16,895
Lease right-of-use assets obtained in exchange for lease liabilities	$	27,346	$	26,811