Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.22.1
Leases
 3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Leases Leases
Lease Cost
Lease cost included in our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 consisted of the following:
Three Months Ended
March 31,		 Classification in Condensed
Consolidated Statements of Operations
2022 2021
Lease cost:
Operating lease cost $ 54,753 $ 49,303 Rent
Short-term lease cost 356 227 Rent
Variable lease cost 855 987 Rent
Finance lease cost:
Amortization of right-of-use assets 355 364 Depreciation and amortization
Interest on lease liabilities 32 50 Interest expense, net of interest income
Total lease cost $ 56,351 $ 50,931
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:
March 31, 2022 December 31, 2021 Classification on Condensed
Consolidated Balance Sheet
Lease right-of-use assets:
Operating leases $ 1,935,352 $ 1,864,528 Operating lease right-of-use assets
Finance leases (1)
1,719 2,073 Other assets
Total lease right-of-use assets $ 1,937,071 $ 1,866,601
Lease liabilities:
Current
Operating leases $ 46,679 $ 46,315 Current maturities of operating lease liabilities
Finance leases 1,223 1,374 Accrued expenses and other current liabilities
Non-Current
Operating leases 1,971,743 1,909,883 Operating lease liabilities, net of current portion
Finance leases 550 757 Other liabilities
Total lease liabilities $ 2,020,195 $ 1,958,329
(1)         Finance lease right-of-use assets were reported net of accumulated amortization of $2.4 million and $2.4 million at March 31, 2022 and December 31, 2021, respectively.
Operating Lease Right-of-Use Assets and Liabilities
In connection with leases that commenced during the three months ended March 31, 2022, we recognized operating lease right-of-use assets and lease liabilities of $84.0 million and $67.9 million, respectively, on our condensed consolidated balance sheet. In connection with modified leases that were remeasured during the three months ended March 31, 2022, we recognized a net increase in both operating lease right-of-use assets and lease liabilities of $2.9 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 March 31, 2022 were as follows:
March 31, 2022
Weighted-average remaining lease term (1)
Operating leases 17.7 years
Finance leases 1.9 years
Weighted-average discount rate
Operating leases 7.98%
Finance leases 6.24%
(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
On March 8, 2022, the Company entered into two definitive agreements with an unrelated third party, each of which was for the sale-leaseback of two properties, for an aggregate sales price of approximately $175 million. The closing on two of these properties was completed on March 25, 2022, and the closing on the remaining two properties is expected to be completed on or about May 13, 2022. Under the transaction that was completed, we sold two properties with a combined net book value of $66.9 million for $80.0 million, which was reduced by transaction costs of $0.3 million, for net cash proceeds of $79.7 million. The estimated fair value of the properties sold was $95.6 million. Accordingly, the aggregate sales price associated with this arrangement was increased by $15.6 million, which resulted in the recognition of a gain of $28.4 million on this transaction. This gain is included in Other operating (income) expense in our condensed consolidated statement of operations for the three months ended March 31, 2022.
Supplemental Cash Flow Information
Supplemental cash flow information associated with our operating and finance leases is as follows:
Three Months Ended
March 31,
2022 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 48,022 $ 44,377
Operating cash flows from finance leases 32 50
Financing cash flows from finance leases 358 372
Non-cash information:
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases 67,940 66,426
Finance leases — 801
Right-of-use asset adjustments recognized as a result of the remeasurement of existing lease liabilities:
Operating leases 2,882 (4,148)
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 15,600 9,500
Maturities of Operating and Finance Lease Liabilities
The maturities associated with our operating and finance lease liabilities at March 31, 2022 are as follows:
Operating Leases Finance Leases Total
April 2022 through March 2023 $ 193,172 $ 1,294 $ 194,466
April 2023 through March 2024 208,274 522 208,796
April 2024 through March 2025 211,911 42 211,953
April 2025 through March 2026 215,731 — 215,731
April 2026 through March 2027 216,458 — 216,458
Thereafter 2,856,818 — 2,856,818
Total lease payments 3,902,364 1,858 3,904,222
Less: Imputed interest 1,883,942 85 1,884,027
Present value of lease liabilities $ 2,018,422 $ 1,773 $ 2,020,195
Leases Leases
Lease Cost
Lease cost included in our condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 consisted of the following:
Three Months Ended
March 31,		 Classification in Condensed
Consolidated Statements of Operations
2022 2021
Lease cost:
Operating lease cost $ 54,753 $ 49,303 Rent
Short-term lease cost 356 227 Rent
Variable lease cost 855 987 Rent
Finance lease cost:
Amortization of right-of-use assets 355 364 Depreciation and amortization
Interest on lease liabilities 32 50 Interest expense, net of interest income
Total lease cost $ 56,351 $ 50,931
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:
March 31, 2022 December 31, 2021 Classification on Condensed
Consolidated Balance Sheet
Lease right-of-use assets:
Operating leases $ 1,935,352 $ 1,864,528 Operating lease right-of-use assets
Finance leases (1)
1,719 2,073 Other assets
Total lease right-of-use assets $ 1,937,071 $ 1,866,601
Lease liabilities:
Current
Operating leases $ 46,679 $ 46,315 Current maturities of operating lease liabilities
Finance leases 1,223 1,374 Accrued expenses and other current liabilities
Non-Current
Operating leases 1,971,743 1,909,883 Operating lease liabilities, net of current portion
Finance leases 550 757 Other liabilities
Total lease liabilities $ 2,020,195 $ 1,958,329
(1)         Finance lease right-of-use assets were reported net of accumulated amortization of $2.4 million and $2.4 million at March 31, 2022 and December 31, 2021, respectively.
Operating Lease Right-of-Use Assets and Liabilities
In connection with leases that commenced during the three months ended March 31, 2022, we recognized operating lease right-of-use assets and lease liabilities of $84.0 million and $67.9 million, respectively, on our condensed consolidated balance sheet. In connection with modified leases that were remeasured during the three months ended March 31, 2022, we recognized a net increase in both operating lease right-of-use assets and lease liabilities of $2.9 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 March 31, 2022 were as follows:
March 31, 2022
Weighted-average remaining lease term (1)
Operating leases 17.7 years
Finance leases 1.9 years
Weighted-average discount rate
Operating leases 7.98%
Finance leases 6.24%
(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
On March 8, 2022, the Company entered into two definitive agreements with an unrelated third party, each of which was for the sale-leaseback of two properties, for an aggregate sales price of approximately $175 million. The closing on two of these properties was completed on March 25, 2022, and the closing on the remaining two properties is expected to be completed on or about May 13, 2022. Under the transaction that was completed, we sold two properties with a combined net book value of $66.9 million for $80.0 million, which was reduced by transaction costs of $0.3 million, for net cash proceeds of $79.7 million. The estimated fair value of the properties sold was $95.6 million. Accordingly, the aggregate sales price associated with this arrangement was increased by $15.6 million, which resulted in the recognition of a gain of $28.4 million on this transaction. This gain is included in Other operating (income) expense in our condensed consolidated statement of operations for the three months ended March 31, 2022.
Supplemental Cash Flow Information
Supplemental cash flow information associated with our operating and finance leases is as follows:
Three Months Ended
March 31,
2022 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 48,022 $ 44,377
Operating cash flows from finance leases 32 50
Financing cash flows from finance leases 358 372
Non-cash information:
Right-of-use assets obtained in exchange for initial lease liabilities:
Operating leases 67,940 66,426
Finance leases — 801
Right-of-use asset adjustments recognized as a result of the remeasurement of existing lease liabilities:
Operating leases 2,882 (4,148)
Non-cash increase in operating lease right-of-use assets associated with below-market sale-leaseback transactions 15,600 9,500
Maturities of Operating and Finance Lease Liabilities
The maturities associated with our operating and finance lease liabilities at March 31, 2022 are as follows:
Operating Leases Finance Leases Total
April 2022 through March 2023 $ 193,172 $ 1,294 $ 194,466
April 2023 through March 2024 208,274 522 208,796
April 2024 through March 2025 211,911 42 211,953
April 2025 through March 2026 215,731 — 215,731
April 2026 through March 2027 216,458 — 216,458
Thereafter 2,856,818 — 2,856,818
Total lease payments 3,902,364 1,858 3,904,222
Less: Imputed interest 1,883,942 85 1,884,027
Present value of lease liabilities $ 2,018,422 $ 1,773 $ 2,020,195