Leases and Other Finance Obligations

3 Months Ended

Mar. 31, 2021

10. Leases and Other Finance Obligations

Right-of-use assets and lease liabilities consisted of the following (in thousands) as of:

		March 31, 2021		December 31, 2020
Assets
Operating lease right-of-use assets, net	$	442,440	$	274,562
Finance lease right-of-use assets, net (included in property, plant and equipment, net)		7,073		34,905
Total right-of-use assets	$	449,513	$	309,467
Liabilities
Current
Current portion of operating lease liabilities	$	94,316	$	61,625
Current portion of finance lease liabilities (included in current maturities of long-term debt)		2,592		12,178
Noncurrent
Noncurrent portion of operating lease liabilities	$	356,549	$	219,239
Noncurrent portion of finance lease liabilities (included in long-term debt, net of current maturities)		5,122		11,695
Total lease liabilities	$	458,579	$	304,737

Total lease costs consisted of the following for the three months ended March 31 (in thousands):

		2021		2020
Operating lease costs (1)	$	32,289	$	21,672
Finance lease costs:
Amortization of finance lease right-of-use assets		959		1,613
Interest on finance lease liabilities		194		314
Variable lease costs		6,772		4,249
Total lease costs	$	40,214	$	27,848

(1)

Includes short-term lease costs and sublease income which were not material for the three months ended March 31, 2021 and 2020.

Future maturities of lease liabilities as of March 31, 2021 were as follows (in thousands):

	Finance Leases			Operating Leases
2021 (from April 1, 2021)	$	2,386		$	87,378
2022		1,794			104,414
2023		1,569			86,915
2024		720			69,772
2025		510			48,139
Thereafter		1,572			140,525
Total lease payments		8,551			537,143
Less: amount representing interest		(837	)		(86,278	)
Present value of lease liabilities		7,714			450,865
Less: current portion		(2,592	)		(94,316	)
Long-term lease liabilities, net of current portion	$	5,122		$	356,549

Weighted average lease terms and discount rates as of March 31, 2021 and December 31, 2020 were as follows:

	March 31, 2021		December 31, 2020
Weighted average remaining lease term (years)
Operating leases	6.3		6.3
Finance leases	5.3		2.1
Weighted average discount rate
Operating leases	5.5	%	6.3	%
Finance leases	4.4	%	5.9	%

The following table presents cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31 (in thousands):

		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	30,512	$	20,846
Operating cash flows from finance leases		194		314
Financing cash flows from finance leases		25,801		3,522

Residual value guarantees in our lease agreements are not material. Our lease agreements do not impose any significant restrictions or covenants on us. As of March 31, 2021, we do not have any material leases that have been signed, but have not yet commenced. Leases with related parties are not significant as of March 31, 2021 nor for the three months ended March 31, 2021 and 2020.

Other Finance Obligations

In addition to the operating and finance lease arrangements described above, the Company is party to 126 individual property lease agreements with a single lessor as of March 31, 2021. These lease agreements had initial terms ranging from nine to 15 years with renewal options in five-year increments providing for up to approximately 30-year total lease terms. A related agreement between the lessor and the Company gives the Company the right to acquire a limited number of the leased facilities at fair market value. These purchase rights represent a form of continuing involvement with these properties, which precluded sale-leaseback accounting. As a result, the Company treats all of the properties that it leases from this lessor as a financing arrangement.

We were deemed the owner of certain of our facilities during their construction period based on an evaluation made in accordance with the Leases topic of the Codification. Effectively, a sale and leaseback of these facilities occurred when construction was completed and the lease term began. These transactions did not qualify for sale-leaseback accounting. As a result, the Company treats the lease of these facilities as a financing arrangement.

As of March 31, 2021, other finance obligations consist of $211.2 million, with cash payments of $5.1 million for the three months ended March 31, 2021. These other finance obligations are included on the consolidated balance sheet as part of long-term debt. The related assets are recorded as components of property, plant, and equipment on the consolidated balance sheet.

Future minimum commitments for other finance obligations as of March 31, 2021 were as follows (in thousands):

2021 (from April 1, 2021)	$	12,867
2022		16,818
2023		16,818
2024		16,835
2025		16,836
Thereafter		174,300
Total	$	254,474