Chemed and each of its operating subsidiaries are service companies. As such, real estate leases comprise the largest lease obligation (and conversely, right of use asset) in our lease portfolio. VITAS has leased office space, as well as space for inpatient units (“IPUs”) and/or contract beds within hospitals. Roto-Rooter mainly has leased office space. Our leases have remaining terms of under 1 year to 10 years, some of which include options to extend the lease for up to 5 years, and some of which include options to terminate the lease within 1 year.

Roto-Rooter purchases equipment and leases it to certain of its Independent Contractors. We analyzed these leases in accordance with ASC 842 and determined they are operating leases. As a result, Roto-Rooter will continue to capitalize the equipment underlying these leases, depreciate the equipment and recognize rental income.

We do not currently have any finance leases, therefore all lease information disclosed is related to operating leases.


	March 31,		‎December 31,
	2022		2021
Assets
Operating lease assets	$	134,169	$	125,048

Liabilities
Current operating leases		38,856		37,913
Noncurrent operating leases		109,121		100,629
Total operating lease liabilities	$	147,977	$	138,542

The components of lease expense for the first quarter is as follows (in thousands):


	Three months ended March 31,
	2022		2021
Lease Expense (a)
Operating lease expense	$	14,903	$	15,388
Sublease income		(45)		(45)
Net lease expense	$	14,858	$	15,343

(a)Includes short-term leases and variable lease costs, which are immaterial. Included in both cost of services provided and goods sold and selling, general and administrative expenses.


	Three months ended ‎March 31,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	12,489	$	12,850

Leased assets obtained in exchange for new operating lease liabilities	$	20,453	$	13,776


Weighted Average Remaining Lease Term at March 31, 2022
Operating leases	4.66	years


Weighted Average Discount Rate at March 31, 2022
Operating leases	2.39	%


Maturity of Operating Lease Liabilities (in thousands)

2022	$	34,158
2023		37,989
2024		29,353
2025		22,656
2026		16,434
Thereafter		16,038
Total lease payments	$	156,628
Less: interest		(8,651)
Total liability recognized on the balance sheet	$	147,977

For leases commencing prior to April 2019, minimum rental payments exclude payments to landlords for real estate taxes and common area maintenance. Operating lease payments include $2.8 million related to extended lease terms that are reasonably certain of being exercised and exclude $200,000 of lease payments for leases signed but not yet commenced.