Leases

12 Months Ended

Dec. 31, 2020

10. Leases

The Company’s lease portfolio primarily consists of finance and operating real estate leases integral for facility operations. The original terms of the leases typically range from five to 30 years with optional renewal periods. A minimal portion of the Company’s lease portfolio consists of non-real estate leases, including copiers and equipment, which generally have lease terms of one to three years and have insignificant lease obligations.

The Company also elected the accounting policy practical expedients by class of underlying asset in ASC 842 “Leases” to: (i) combine associated lease and non-lease components into a single lease component; and (ii) exclude recording short-term leases as right-of-use assets and liabilities on the consolidated balance sheets. Non-lease components, which are not significant overall, are combined with lease components.

Operating lease liabilities are recorded at the present value of remaining lease payments not yet paid for the lease term discounted using the incremental borrowing rate associated with each lease. Operating lease right-of-use assets represent operating lease liabilities adjusted for prepayments, accrued lease payments, lease incentives and initial direct costs. Certain of the Company’s leases include renewal or termination options. Calculation of operating lease right-of-use assets and liabilities include the initial lease term unless it is reasonably certain a renewal or termination option will be exercised. Variable components of lease payments fluctuating with a future index or rate, as well as those related to common area maintenance costs, are not included in determining lease payments and are expensed as incurred. Most of the Company’s leases do not contain implicit borrowing rates, and therefore, incremental borrowing rates were calculated based on information available at the later of the lease commencement date. The Company reviews service agreements for embedded leases and records right-of-use assets and liabilities as necessary.

Lease Position

The Company recorded the following at December 31, 2020 and 2019 on the consolidated balance sheet (in thousands):

Right-of-Use Assets	Balance Sheet Classification	December 31, 2020		December 31, 2019
Finance lease right-of-use assets	Property and equipment, net	$	34,621	$	35,489
Operating lease right-of-use assets	Operating lease right-of-use assets		96,937		97,795
Total		$	131,558	$	133,284

Lease Liabilities	Balance Sheet Classification	December 31, 2020		December 31, 2019
Current:
Finance lease liabilities	Other accrued liabilities	$	32,188	$	3,765
Operating lease liabilities	Current portion of operating lease liabilities		18,916		18,119
Noncurrent:
Finance lease liabilities	Other liabilities		10,744		39,719
Operating lease liabilities	Operating lease liabilities		84,029		85,643
Total		$	145,877	$	147,246

Weighted-average remaining lease terms and discount rates were as follows at December 31, 2020 and 2019:

	December 31,
	2020			2019
Weighted-average remaining lease term (in years):
Finance	6.7			6.5
Operating	8.5			8.6

Weighted-average discount rate:
Finance		5.9	%		5.3	%
Operating		6.5	%		6.5	%

Lease Costs

The Company recorded the following lease costs at December 31, 2020 and 2019 (in thousands):

	December 31,
	2020		2019
Finance lease costs:
Depreciation of leased assets		868		907
Interest of lease liabilities		3,214		3,226
Total finance lease costs	$	4,082	$	4,133

Operating lease costs		27,050		25,630
Variable lease costs		2,501		1,966
Short term lease costs		3,558		4,790
Other lease costs		4,253		3,101
Total rents and leases	$	37,362	$	35,487

Total lease costs	$	41,444	$	39,620

Other

Undiscounted cash flows for finance and operating leases recorded on the consolidated balance sheet were as follows at December 31, 2020 (in thousands):

	Finance Leases		Operating Leases
2021	$	32,909	$	25,015
2022		990		21,032
2023		990		17,336
2024		1,007		14,832
2025		1,089		12,101
Thereafter		23,999		52,866
Total minimum lease payments		60,984		143,182
Less: amount of lease payments representing interest		18,052		40,237
Present value of future minimum lease payments		42,932		102,945
Less: Current portion of lease liabilities		32,188		18,916
Noncurrent lease liabilities	$	10,744	$	84,029

Supplemental data for the years ended December 31, 2020 and 2019 were as follows (in thousands):

	December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	26,810	$	25,086
Operating cash flows for finance leases	$	3,214	$	3,226
Financing cash flows for finance leases	$	551	$	862

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	21,285	$	21,809
Finance leases	$	-	$	-