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LEASES
3 Months Ended
Mar. 31, 2021
Leases [Abstract]  
LEASES

12.

LEASES

The Company leases a variety of assets throughout its organization, such as office space, funeral homes, warehouses and equipment. In addition the Company has a sale-leaseback related to one of its warehouses. Leases with an initial term of 12 months or less are not recorded on the Company’s consolidated balance sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements with an initial term of more than 12 months, the Company measures the lease liability at the present value of the sum of the remaining minimum rental payments, which exclude executory costs.

Certain leases provide the Company with the option to renew for additional periods, with renewal terms that can extend the lease term for periods ranging from 1 to 30 years. The exercise of lease renewal options is at the Company’s sole discretion, and the Company is only including the renewal option in the lease term when the Company can be reasonably certain that it will exercise the renewal options. The Company does have residual value guarantees on the finance leases for its vehicles, but no residual guarantees on any of its operating leases.

Certain of the Company’s leases have variable payments with annual escalations based on the proportion by which the consumer price index (“CPI”) for all urban consumers increased over the CPI index for the prior comparative year.

The Company has the following balances recorded on its consolidated balance sheets related to leases:

 

 

March 31, 2021

 

 

December 31, 2020

 

Assets:

 

 

 

 

 

 

 

 

Operating

 

$

4,464

 

 

$

5,171

 

Finance

 

 

3,796

 

 

 

4,296

 

Total ROU assets(1)

 

$

8,260

 

 

$

9,467

 

Liabilities:

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

Operating

 

$

1,021

 

 

$

1,182

 

Finance

 

 

1,353

 

 

 

1,416

 

Long-term

 

 

 

 

 

 

 

 

Operating

 

 

2,897

 

 

 

3,441

 

Finance

 

 

2,194

 

 

 

2,592

 

Total lease liabilities(2)

 

$

7,465

 

 

$

8,631

 

(1)

The Company’s ROU operating assets and finance assets are presented within Other assets and Property and equipment, net of accumulated depreciation, respectively, in its consolidated balance sheets.

(2)

The Company’s current lease liabilities and long-term are presented within Accounts payable and accrued liabilities and Other long-term liabilities, respectively, in its consolidated balance sheets.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The Company used the incremental borrowing rate on January 1, 2019 for operating leases that commenced prior to that date. The weighted average borrowing rates for operating and finance leases were 10.6% and 8.6%, respectively, as of March 31, 2021.

The components of lease expense were as follows:

 

 

Three months ended March 31,

 

 

 

2021

 

 

2020

 

Lease cost

Classification

 

 

 

 

 

 

 

Operating lease costs(1)

General and administrative expense

$

479

 

 

$

801

 

Finance lease costs

 

 

 

 

 

 

 

 

Amortization of leased assets

Depreciation and Amortization

 

329

 

 

 

329

 

Interest on lease liabilities

Interest expense

 

87

 

 

 

116

 

Short-term lease costs(2)

General and administrative expense

 

 

 

 

 

Net lease costs

 

$

895

 

 

$

1,246

 

 

(1)

The Company includes its variable lease costs under operating lease costs as these variable lease costs are immaterial.

 

(2)

The Company does not have any short-term leases with lease terms greater than one month.

 

Maturities of the Company’s lease labilities as of March 31, 2021 were as follows:

Year ending December 31,

 

Operating

 

 

Finance

 

2021

 

$

1,083

 

 

$

1,340

 

2022

 

 

1,114

 

 

 

1,878

 

2023

 

 

812

 

 

 

619

 

2024

 

 

623

 

 

 

83

 

2025

 

 

511

 

 

 

33

 

Thereafter

 

 

973

 

 

 

 

Total

 

$

5,116

 

 

$

3,953

 

Less: Interest

 

 

(1,198

)

 

 

(405

)

Present value of lease liabilities

 

$

3,918

 

 

$

3,548

 

 

Maturities of the Company’s lease labilities as of December 31, 2020 were as follows:

Year ending December 31,

 

Operating

 

 

Finance

 

2020

 

$

1,615

 

 

$

1,791

 

2021

 

 

1,186

 

 

 

1,939

 

2022

 

 

881

 

 

 

643

 

2023

 

 

702

 

 

 

107

 

2024

 

 

595

 

 

 

33

 

Thereafter

 

 

1,092

 

 

 

 

Total

 

$

6,071

 

 

$

4,513

 

Less: Interest

 

 

(1,448

)

 

 

(505

)

Present value of lease liabilities

 

$

4,623

 

 

$

4,008

 

 

Operating and finance lease payments include $1.4 million related to options to extend lease terms that are reasonably certain of being exercised and $1.8 million related to residual value guarantees. The weighted average remaining lease term for operating and finance leases was 5.1 years and 1.7 years, respectively, as of March 31, 2021.

As of March 31, 2021, the Company had one additional operating lease that had not yet commenced, and did not have any lease transactions with its related parties. In addition, as of March 31, 2021, the Company had not entered into any new sale-leaseback arrangements.