Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Supplemental balance sheet information related to our leases is as follows (dollars in thousands):

		December 31,
Category	Classification	2022		2021
Assets
Operating	Operating lease assets	$	1,033,011	$	1,046,377
Financing	Other assets, net	91,028		110,809
Total leased assets		$	1,124,039	$	1,157,186
Liabilities
Current:
Operating	Operating lease liabilities	$	229,591	$	232,423
Financing	Other current liabilities	33,039		38,103
Non-current:
Operating	Non-current operating lease liabilities	1,080,385		1,116,562
Financing	Other liabilities	58,094		73,257
Total lease liabilities		$	1,401,109	$	1,460,345

Components of lease cost are as follows (dollars in thousands):

		Year Ended December 31,
Component	Classification	2022		2021
Operating lease cost	Operating, administrative and other	$	196,218	$	196,685
Financing lease cost:
Amortization of right-to-use assets	(1)	30,601		36,376
Interest on lease liabilities	Interest expense	934		1,301
Variable lease cost	(2)	79,249		70,091
Sublease income	Revenue	(4,092)		(2,271)
Total lease cost		$	302,910	$	302,182

_______________

(1)Amortization costs of $26.4 million and $31.9 million from vehicle finance leases utilized in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Amortization costs of $4.2 million and $4.4 million from all other finance leases are included in the “Depreciation and amortization” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

(2)Variable lease costs of $23.6 million and $16.8 million from leases in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Variable lease costs of $55.6 million and $53.3 million from all other leases are included in the “Operating, administrative, and other” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

Weighted average remaining lease term and discount rate for our operating and finance leases are as follows:

	December 31,
	2022	2021
Weighted-average remaining lease term:
Operating leases (1)	42 years	8 years
Financing leases (2)	75 years	72 years
Weighted-average discount rate:
Operating leases (1)	4.5%	2.9%
Financing leases (2)	5.1%	5.0%

_______________

(1)In 2022, we entered into two 99-year operating leases and one 90-year operating lease on real estate under development. If excluded, the weighted-average remaining lease term and weighted-average discount rate would be 7 years and 3.0%, respectively, as of December 31, 2022.

(2)Finance leases as of December 31, 2022 and 2021 included a 99 year lease on a real estate under development. If excluded, the weighted-average remaining lease term and weighted-average discount rate would be 3 years and 1.7%, respectively, as of December 31, 2022 and 3 years and 1.8%, respectively, as of December 31, 2021.

Maturities of lease liabilities by fiscal year as of December 31, 2022 are as follows (dollars in thousands):

	Operating Leases		Financing Leases
2023	$	229,748	$	33,213
2024	226,036		23,556
2025	210,518		12,921
2026	179,126		6,659
2027	130,284		2,227
Thereafter	1,204,601		220,804
Total remaining lease payments at December 31, 2022	2,180,313		299,380
Less: Interest	870,337		208,247
Present value of lease liabilities at December 31, 2022	$	1,309,976	$	91,133

Supplemental cash flow information and non-cash activity related to our operating and financing leases are as follows (dollars in thousands):

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	236,758	$	202,690
Operating cash flows from financing leases	2,432		2,876
Financing cash flows from financing leases	37,987		41,211
Right-of-use assets obtained in exchange for new operating lease liabilities	164,275		199,275
Right-of-use assets obtained in exchange for new financing lease liabilities	31,272		39,460
Other non-cash increases in operating lease right-of-use assets (1)	31,856		12,126
Other non-cash increases (decreases) in financing lease right-of-use assets (1)	5,779		(2,754)

_______________

(1)The non-cash activity in the right-of-use assets resulted from lease modifications and remeasurements.

Leases

Leases

Supplemental balance sheet information related to our leases is as follows (dollars in thousands):

		December 31,
Category	Classification	2022		2021
Assets
Operating	Operating lease assets	$	1,033,011	$	1,046,377
Financing	Other assets, net	91,028		110,809
Total leased assets		$	1,124,039	$	1,157,186
Liabilities
Current:
Operating	Operating lease liabilities	$	229,591	$	232,423
Financing	Other current liabilities	33,039		38,103
Non-current:
Operating	Non-current operating lease liabilities	1,080,385		1,116,562
Financing	Other liabilities	58,094		73,257
Total lease liabilities		$	1,401,109	$	1,460,345

Components of lease cost are as follows (dollars in thousands):

		Year Ended December 31,
Component	Classification	2022		2021
Operating lease cost	Operating, administrative and other	$	196,218	$	196,685
Financing lease cost:
Amortization of right-to-use assets	(1)	30,601		36,376
Interest on lease liabilities	Interest expense	934		1,301
Variable lease cost	(2)	79,249		70,091
Sublease income	Revenue	(4,092)		(2,271)
Total lease cost		$	302,910	$	302,182

_______________

(1)Amortization costs of $26.4 million and $31.9 million from vehicle finance leases utilized in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Amortization costs of $4.2 million and $4.4 million from all other finance leases are included in the “Depreciation and amortization” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

(2)Variable lease costs of $23.6 million and $16.8 million from leases in client outsourcing arrangements are included in the “Cost of revenue” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. Variable lease costs of $55.6 million and $53.3 million from all other leases are included in the “Operating, administrative, and other” line item in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively.

Weighted average remaining lease term and discount rate for our operating and finance leases are as follows:

	December 31,
	2022	2021
Weighted-average remaining lease term:
Operating leases (1)	42 years	8 years
Financing leases (2)	75 years	72 years
Weighted-average discount rate:
Operating leases (1)	4.5%	2.9%
Financing leases (2)	5.1%	5.0%

_______________

(1)In 2022, we entered into two 99-year operating leases and one 90-year operating lease on real estate under development. If excluded, the weighted-average remaining lease term and weighted-average discount rate would be 7 years and 3.0%, respectively, as of December 31, 2022.

(2)Finance leases as of December 31, 2022 and 2021 included a 99 year lease on a real estate under development. If excluded, the weighted-average remaining lease term and weighted-average discount rate would be 3 years and 1.7%, respectively, as of December 31, 2022 and 3 years and 1.8%, respectively, as of December 31, 2021.

Maturities of lease liabilities by fiscal year as of December 31, 2022 are as follows (dollars in thousands):

	Operating Leases		Financing Leases
2023	$	229,748	$	33,213
2024	226,036		23,556
2025	210,518		12,921
2026	179,126		6,659
2027	130,284		2,227
Thereafter	1,204,601		220,804
Total remaining lease payments at December 31, 2022	2,180,313		299,380
Less: Interest	870,337		208,247
Present value of lease liabilities at December 31, 2022	$	1,309,976	$	91,133

Supplemental cash flow information and non-cash activity related to our operating and financing leases are as follows (dollars in thousands):

	Year Ended December 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	236,758	$	202,690
Operating cash flows from financing leases	2,432		2,876
Financing cash flows from financing leases	37,987		41,211
Right-of-use assets obtained in exchange for new operating lease liabilities	164,275		199,275
Right-of-use assets obtained in exchange for new financing lease liabilities	31,272		39,460
Other non-cash increases in operating lease right-of-use assets (1)	31,856		12,126
Other non-cash increases (decreases) in financing lease right-of-use assets (1)	5,779		(2,754)

_______________

(1)The non-cash activity in the right-of-use assets resulted from lease modifications and remeasurements.