Leases (Notes)

12 Months Ended

Dec. 31, 2021

Leases

Our leases principally relate to office, maintenance, and transportation equipment and funeral service real estate. The majority of our lease arrangements contain options to (i) purchase the property at fair value on the exercise date, (ii) purchase the property for a value determined at the inception of the lease, or (iii) renew the lease for the fair rental value at the end of the primary lease term.

Future lease payments for non-cancelable operating and finance leases as of December 31, 2021 were as follows:


	Operating		Finance		Total
	(In thousands)

2022	$	10,083	$	37,979	$	48,062
2023	8,377		41,315		49,692
2024	7,274		32,320		39,594
2025	6,211		13,035		19,246
2026	5,403		7,704		13,107
2027 and thereafter	36,599		18,196		54,795
Total lease payments	$	73,947	$	150,549	$	224,496
Less: Interest	(17,720)		(13,702)		(31,422)
Present value of lease liabilities	$	56,227	$	136,847	$	193,074

The components of lease cost were as follows:




	Years Ended December 31,
	2021		2020
	(In thousands)
Amortization of leased assets	$	37,569	$	41,938
Interest on lease liabilities	4,642		5,955
Total finance lease cost	42,211		47,893
Operating lease cost	11,586		12,196
Variable lease cost	178		29
Total lease cost	$	53,975	$	60,118

Supplemental balance sheet information related to leases was as follows:


Lease Type	Balance Sheet Classification	December 31, 2021		December 31, 2020
		(In thousands)
Operating lease right-of-use assets (1)	Deferred charges and other assets	$	53,685	$	54,764
Finance lease right-of-use assets (1)	Property and equipment, net	131,420		146,144
Total right-of-use assets (1)		$	185,105	$	200,908


Operating	Accounts payable and accrued liabilities	$	8,049	$	8,584
Finance	Current maturities of long-term debt	34,222		47,109
Total current lease liabilities		42,271		55,693

Operating	Other liabilities	48,178		48,656
Finance	Long-term debt	102,625		101,755
Total non-current lease liabilities		150,803		150,411
Total lease liabilities		$	193,074	$	206,104

(1) Right-of-use assets are presented net of accumulated amortization.

The weighted-average life remaining and discount rates of our leases were as follows:


	December 31, 2021		December 31, 2020
	Operating	Finance	Operating	Finance
Weighted-average remaining lease term (years)	12.1	4.9	12.2	4.8
Weighted-average discount rate	3.9%	3.1%	4.3%	3.3%

Supplemental cash flow information related to leases was as follows:



	Years Ended December 31,
	2021		2020
	(In thousands)
Cash paid for amounts in the measurement of lease liabilities:
Operating cash flows for operating leases	$	11,693	$	12,190
Operating cash flows for finance leases	4,207		5,446
Financing cash flows for finance leases	34,617		43,598
Total cash paid for amounts included in the measurement of lease liabilities	$	50,517	$	61,234

New finance leases	21,097		23,523
Finance lease renewals and extensions	1,095		—
Right-of-use assets obtained in exchange for finance lease liabilities	$	22,192	$	23,523

New operating leases	3,268		4,684
Operating lease renewals and extensions	4,554		4,128
Right-of-use assets obtained in exchange for operating lease liabilities	$	7,822	$	8,812

During the years ended December 31, 2021 and 2020, we acquired buildings and land previously leased for our funeral service locations. These real estate acquisitions, excluded from the table above, reduced right-of-use assets by $1.0 million and $2.7 million for the years ended December 31, 2021 and 2020, respectively.

We have 59 operating leases where we are the lessor and the non-cancelable term is greater than one year, resulting in $4.4 million and $3.6 million in lease income for the years ended December 31, 2021 and 2020, respectively. We determine whether an arrangement is or contains a lease at the inception of the arrangement based on the terms of the arrangement. We lease retail space, office space and land, and we are party to cellular agreements and land easements. The underlying assets of these lease agreements are buildings and land. We generally do not have sales-type leases, direct financing leases,

or lease receivables. Certain of our agreements include variable rental income based on a percentage of sales over base contractual levels. Renewal options that can be cancelled by the lessees are not included in our disclosure of future lease income, which includes only the non-cancelable terms and fixed escalation provisions. Certain lease arrangements contain options to purchase the property at fair value at the conclusion of the lease term. Non lease components are excluded from rental income disclosures.

Future undiscounted lease income from operating leases where we are the lessor were as follows as of December 31, 2021 (in thousands):


2022	$	4,123
2023	3,513
2024	3,124
2025	2,818
2026	2,542
2027 and thereafter	19,714
Total expected cash receipts	$	35,834

We own certain land, buildings, and improvements for the sole purpose of generating lease income. Property is recorded at cost, and depreciation is recognized ratably over the estimated useful lives of the various classes of assets. Buildings and improvements are depreciated over a period ranging from ten years to forty years. For these properties, we recorded depreciation expense of $0.7 million, $0.5 million, and $0.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, our Consolidated Balance Sheet includes Land of $25.0 million, and Buildings and improvements of $24.6 million, net of $2.9 million accumulated depreciation, related to these properties.