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Leases and Other Finance Obligations
12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases and Other Finance Obligations

9. Leases and Other Finance Obligations

 

Right-of-use assets and lease liabilities consisted of the following as of December 31:

 

 

2021

 

 

2020

 

 

 

(in thousands)

 

Assets

 

 

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

$

457,833

 

 

$

274,562

 

Finance lease right-of-use assets, net (included in property, plant and equipment, net)

 

 

4,111

 

 

 

34,905

 

Total right-of-use assets

 

$

461,944

 

 

$

309,467

 

Liabilities

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

Current portion of operating lease liabilities

 

$

96,680

 

 

$

61,625

 

Current portion of finance lease liabilities (included in current maturities of long-term debt)

 

 

1,439

 

 

 

12,178

 

Noncurrent

 

 

 

 

 

 

 

 

Noncurrent portion of operating lease liabilities

 

 

375,289

 

 

 

219,239

 

Noncurrent portion of finance lease liabilities (included in long-term debt, net of current maturities)

 

 

2,348

 

 

 

11,695

 

Total lease liabilities

 

$

475,756

 

 

$

304,737

 

 

 

Total lease costs consisted of the following for the years ended December 31:

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

 

(in thousands)

 

Operating lease costs (1)

 

$

133,009

 

 

$

85,798

 

Finance lease costs:

 

 

 

 

 

 

 

 

Amortization of finance lease right-of-use assets

 

 

2,166

 

 

 

6,325

 

Interest on finance lease liabilities

 

 

360

 

 

 

1,424

 

Variable lease costs

 

 

27,276

 

 

 

17,607

 

Total lease costs

 

$

162,811

 

 

$

111,154

 

 

 

(1)

Includes short-term lease costs and sublease income which were not material for either period.

Future maturities of lease liabilities as of December 31, 2021 were as follows:

 

 

Finance

Leases

 

 

Operating

Leases

 

 

 

(in thousands)

 

2022

 

$

1,570

 

 

$

115,675

 

2023

 

 

1,337

 

 

 

102,699

 

2024

 

 

480

 

 

 

85,724

 

2025

 

 

257

 

 

 

62,585

 

2026

 

 

128

 

 

 

50,872

 

Thereafter

 

 

309

 

 

 

142,084

 

Total lease payments

 

 

4,081

 

 

 

559,639

 

Less: amount representing interest

 

 

(294

)

 

 

(87,670

)

Present value of lease liabilities

 

 

3,787

 

 

 

471,969

 

Less: current portion

 

 

(1,439

)

 

 

(96,680

)

Long-term lease liabilities, net of current portion

 

$

2,348

 

 

$

375,289

 

 

Weighted average lease terms and discount rates as of December 31 were as follows:

 

 

2021

 

 

2020

 

Weighted average remaining lease term (years)

 

 

 

 

 

 

 

 

Operating leases

 

 

6.3

 

 

 

6.3

 

Finance leases

 

 

3.4

 

 

 

2.1

 

Weighted average discount rate

 

 

 

 

 

 

 

 

Operating leases

 

 

5.3

%

 

 

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 years ended December 31:

 

 

2021

 

 

2020

 

 

 

(in thousands)

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

118,314

 

 

$

82,559

 

Operating cash flows from finance leases

 

 

360

 

 

 

1,424

 

Financing cash flows from finance leases

 

 

2,709

 

 

 

13,409

 

 

 

Residual value guarantees in our lease agreements are not material. Based upon the expectation that none of these leased assets will have a residual value at the end of the lease term that is materially less than the value specified in the related operating lease agreement or that we will purchase the equipment at the end of the lease term, we do not believe it is probable that we will be required to fund any amounts under the terms of these guarantee arrangements. Accordingly, these guarantees have not been recognized in the calculation of our right-of-use assets and lease liabilities. Our lease agreements do not impose any significant restrictions or covenants on us. As of December 31, 2021, we do not have any material leases that have been signed but have not yet commenced and are not

reflected on our consolidated balance sheet. Leases with related parties are not significant as of and for the years ended December 31, 2021, 2020, and 2019.

Other Finance Obligations

In addition to the operating and finance lease arrangements described above, the Company is party to 121 individual property lease agreements with a single lessor as of December 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 December 31, 2021, other finance obligations consist of $203.0 million, with cash payments of $21.2 million for the year ended December 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 maturities for other finance obligations as of December 31, 2021 were as follows (in thousands):

 

2022

 

$

16,885

 

2023

 

 

16,893

 

2024

 

 

16,911

 

2025

 

 

16,911

 

2026

 

 

16,690

 

Thereafter

 

 

157,653

 

Total

 

$

241,943