Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.21.2
Leases
 9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Leases Leases
Lease Cost
Lease cost included in our condensed consolidated statements of operations for the three months ended September 30, 2021 and 2020 consisted of the following:
Three Months Ended
September 30,		 Classification in Condensed
Consolidated Statements of Operations
2021 2020
Lease cost:
Operating lease cost 50,987 46,644 Rent
Short-term lease cost 281 338 Rent
Variable lease cost 1,245 557 Rent
Finance lease cost:
Amortization of right-of-use assets 380 652 Depreciation and amortization
Interest on lease liabilities 42 43 Interest expense, net of interest income
Total lease cost $ 52,935 $ 48,234
Lease cost included in our condensed consolidated statements of operations for the nine months ended September 30, 2021 and 2020 consisted of the following:
Nine Months Ended
September 30,		 Classification in Condensed
Consolidated Statements of Operations
2021 2020
Lease cost:
Operating lease cost 150,475 136,760 Rent
Short-term lease cost 747 928 Rent
Variable lease cost 3,330 782 Rent
Finance lease cost:
Amortization of right-of-use assets 1,119 1,925 Depreciation and amortization
Interest on lease liabilities 140 143 Interest expense, net of interest income
Total lease cost $ 155,811 $ 140,538
Operating and Finance Lease Right-of-Use Assets and Lease Liabilities
Operating and finance lease right-of-use assets and lease liabilities were as follows:
September 30, 2021 December 31, 2020 Classification on Condensed
Consolidated Balance Sheet
Lease right-of-use assets:
Operating leases 1,864,246 1,708,597 Operating lease right-of-use assets
Finance leases (1)
2,325 2,295 Other assets
Total lease right-of-use assets $ 1,866,571 $ 1,710,892
Lease liabilities:
Current
Operating leases 44,137 49,877 Current maturities of operating lease liabilities
Finance leases 1,383 1,171 Accrued expenses and other current liabilities
Non-Current
Operating leases 1,902,784 1,738,393 Operating lease liabilities, net of current portion
Finance leases 1,007 1,202 Other liabilities
Total Lease liabilities $ 1,949,311 $ 1,790,643
(1)         Finance lease right-of-use assets were reported net of accumulated amortization of $2.1 million and $1.2 million at September 30, 2021 and December 31, 2020, respectively.
Operating Lease Right-of-Use Assets and Liabilities Associated with Unrelated Third Party Leases
In connection with leases with unrelated third parties that commenced during the nine months ended September 30, 2021, we recognized operating lease right-of-use assets and lease liabilities of $203.7 million and $194.0 million, respectively, on our condensed consolidated balance sheet. In connection with modified leases that were remeasured during the nine months ended September 30, 2021, we recognized a net decrease in operating lease right-of-use assets and lease liabilities, each of which totaled $5.4 million, on our condensed consolidated balance sheet.
Finance Lease Right-of-Use Assets and Liabilities Associated with Unrelated Third Party Leases
In connection with leases with unrelated third parties that commenced during the nine months ended September 30, 2021, we recognized finance lease right-of-use assets and lease liabilities, each of which totaled $1.2 million, on our condensed consolidated balance sheet.
Remaining Lease Terms and Discount Rates
The weighted-average remaining lease terms and discount rates associated with our operating and finance lease liabilities at September 30, 2021 were as follows:
September 30, 2021
Weighted-average remaining lease term (1)
Operating leases 18.0 years
Finance leases 2.2 years
Weighted-average discount rate
Operating leases 7.98%
Finance leases 6.42%
(1)         The weighted-average remaining lease term associated with our operating and finance lease liabilities does not include all of the optional renewal periods available to us under our current lease arrangements. Rather, the weighted-average remaining lease term only includes periods covered by an option to extend a lease if we are reasonably certain to exercise that option.
Sale-Leaseback Transactions
Sale-Leaseback Transactions with Unrelated Third Parties
During the nine months ended September 30, 2021, we entered into two sale-leaseback transactions, involving two properties, with unrelated third parties. Under these transactions, we sold property with a net book value of $86.1 million for $76.0 million, which was reduced by transaction costs of $2.0 million, for net cash proceeds of $74.0 million. The estimated fair value of the properties sold was $85.5 million. Sale-leaseback transactions with unrelated third parties are accounted for at fair value. Accordingly, the aggregate sales price associated with these arrangements was increased, for accounting purposes, by a total of $9.5 million, which resulted in the recognition of an aggregate loss of $2.6 million on these transactions. This net loss is included in Other operating in our condensed consolidated statement of operations for the nine months ended September 30, 2021. The leases, each of which has been classified as an operating lease, each has an initial term of 25 years and includes six renewal options of five years each. The $9.5 million increase in the aggregate sales price associated with these sale-leaseback transactions was accounted for as prepaid rent, which was recognized as a non-cash increase in the aggregate operating lease right-of-use asset balance associated with these properties.
Supplemental Cash Flow Information
Supplemental cash flow information associated with our operating and finance leases is as follows:
Nine Months Ended
September 30,
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 137,942 $ 87,924
Operating cash flows from finance leases 140 143
Financing cash flows from finance leases 1,133 1,034
Non-cash information:
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases 194,021 145,384
Finance leases 1,150 2,021
Right-of-use asset adjustments recognized as a result of the remeasurement of existing lease liabilities:
Operating leases (5,357) 36,865
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 9,500 19,310
Maturities of Operating and Finance Lease Liabilities
The maturities associated with our operating and finance lease liabilities at September 30, 2021 are as follows:
Operating leases Finance leases Total
October 2021 through September 2022 $ 184,947 1,493 186,440
October 2022 through September 2023 195,386 874 196,260
October 2023 through September 2024 203,040 167 203,207
October 2024 through September 2025 205,024 — 205,024
October 2025 through September 2026 208,241 — 208,241
Thereafter 2,803,049 — 2,803,049
Total lease payments 3,799,687 2,534 3,802,221
Less: Imputed interest 1,852,766 144 1,852,910
Present value of lease liabilities $ 1,946,921 $ 2,390 $ 1,949,311
Leases Leases
Lease Cost
Lease cost included in our condensed consolidated statements of operations for the three months ended September 30, 2021 and 2020 consisted of the following:
Three Months Ended
September 30,		 Classification in Condensed
Consolidated Statements of Operations
2021 2020
Lease cost:
Operating lease cost 50,987 46,644 Rent
Short-term lease cost 281 338 Rent
Variable lease cost 1,245 557 Rent
Finance lease cost:
Amortization of right-of-use assets 380 652 Depreciation and amortization
Interest on lease liabilities 42 43 Interest expense, net of interest income
Total lease cost $ 52,935 $ 48,234
Lease cost included in our condensed consolidated statements of operations for the nine months ended September 30, 2021 and 2020 consisted of the following:
Nine Months Ended
September 30,		 Classification in Condensed
Consolidated Statements of Operations
2021 2020
Lease cost:
Operating lease cost 150,475 136,760 Rent
Short-term lease cost 747 928 Rent
Variable lease cost 3,330 782 Rent
Finance lease cost:
Amortization of right-of-use assets 1,119 1,925 Depreciation and amortization
Interest on lease liabilities 140 143 Interest expense, net of interest income
Total lease cost $ 155,811 $ 140,538
Operating and Finance Lease Right-of-Use Assets and Lease Liabilities
Operating and finance lease right-of-use assets and lease liabilities were as follows:
September 30, 2021 December 31, 2020 Classification on Condensed
Consolidated Balance Sheet
Lease right-of-use assets:
Operating leases 1,864,246 1,708,597 Operating lease right-of-use assets
Finance leases (1)
2,325 2,295 Other assets
Total lease right-of-use assets $ 1,866,571 $ 1,710,892
Lease liabilities:
Current
Operating leases 44,137 49,877 Current maturities of operating lease liabilities
Finance leases 1,383 1,171 Accrued expenses and other current liabilities
Non-Current
Operating leases 1,902,784 1,738,393 Operating lease liabilities, net of current portion
Finance leases 1,007 1,202 Other liabilities
Total Lease liabilities $ 1,949,311 $ 1,790,643
(1)         Finance lease right-of-use assets were reported net of accumulated amortization of $2.1 million and $1.2 million at September 30, 2021 and December 31, 2020, respectively.
Operating Lease Right-of-Use Assets and Liabilities Associated with Unrelated Third Party Leases
In connection with leases with unrelated third parties that commenced during the nine months ended September 30, 2021, we recognized operating lease right-of-use assets and lease liabilities of $203.7 million and $194.0 million, respectively, on our condensed consolidated balance sheet. In connection with modified leases that were remeasured during the nine months ended September 30, 2021, we recognized a net decrease in operating lease right-of-use assets and lease liabilities, each of which totaled $5.4 million, on our condensed consolidated balance sheet.
Finance Lease Right-of-Use Assets and Liabilities Associated with Unrelated Third Party Leases
In connection with leases with unrelated third parties that commenced during the nine months ended September 30, 2021, we recognized finance lease right-of-use assets and lease liabilities, each of which totaled $1.2 million, on our condensed consolidated balance sheet.
Remaining Lease Terms and Discount Rates
The weighted-average remaining lease terms and discount rates associated with our operating and finance lease liabilities at September 30, 2021 were as follows:
September 30, 2021
Weighted-average remaining lease term (1)
Operating leases 18.0 years
Finance leases 2.2 years
Weighted-average discount rate
Operating leases 7.98%
Finance leases 6.42%
(1)         The weighted-average remaining lease term associated with our operating and finance lease liabilities does not include all of the optional renewal periods available to us under our current lease arrangements. Rather, the weighted-average remaining lease term only includes periods covered by an option to extend a lease if we are reasonably certain to exercise that option.
Sale-Leaseback Transactions
Sale-Leaseback Transactions with Unrelated Third Parties
During the nine months ended September 30, 2021, we entered into two sale-leaseback transactions, involving two properties, with unrelated third parties. Under these transactions, we sold property with a net book value of $86.1 million for $76.0 million, which was reduced by transaction costs of $2.0 million, for net cash proceeds of $74.0 million. The estimated fair value of the properties sold was $85.5 million. Sale-leaseback transactions with unrelated third parties are accounted for at fair value. Accordingly, the aggregate sales price associated with these arrangements was increased, for accounting purposes, by a total of $9.5 million, which resulted in the recognition of an aggregate loss of $2.6 million on these transactions. This net loss is included in Other operating in our condensed consolidated statement of operations for the nine months ended September 30, 2021. The leases, each of which has been classified as an operating lease, each has an initial term of 25 years and includes six renewal options of five years each. The $9.5 million increase in the aggregate sales price associated with these sale-leaseback transactions was accounted for as prepaid rent, which was recognized as a non-cash increase in the aggregate operating lease right-of-use asset balance associated with these properties.
Supplemental Cash Flow Information
Supplemental cash flow information associated with our operating and finance leases is as follows:
Nine Months Ended
September 30,
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 137,942 $ 87,924
Operating cash flows from finance leases 140 143
Financing cash flows from finance leases 1,133 1,034
Non-cash information:
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases 194,021 145,384
Finance leases 1,150 2,021
Right-of-use asset adjustments recognized as a result of the remeasurement of existing lease liabilities:
Operating leases (5,357) 36,865
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 9,500 19,310
Maturities of Operating and Finance Lease Liabilities
The maturities associated with our operating and finance lease liabilities at September 30, 2021 are as follows:
Operating leases Finance leases Total
October 2021 through September 2022 $ 184,947 1,493 186,440
October 2022 through September 2023 195,386 874 196,260
October 2023 through September 2024 203,040 167 203,207
October 2024 through September 2025 205,024 — 205,024
October 2025 through September 2026 208,241 — 208,241
Thereafter 2,803,049 — 2,803,049
Total lease payments 3,799,687 2,534 3,802,221
Less: Imputed interest 1,852,766 144 1,852,910
Present value of lease liabilities $ 1,946,921 $ 2,390 $ 1,949,311