Leases (Notes)

12 Months Ended

Dec. 31, 2023

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, 2023 were as follows:


	Operating		Finance		Total
	(In thousands)

2024	$	9,953	$	49,166	$	59,119
2025	9,044		29,161		38,205
2026	7,695		22,284		29,979
2027	6,680		14,835		21,515
2028	5,534		8,928		14,462
2029 and thereafter	31,419		28,982		60,401
Total lease payments	$	70,325	$	153,356	$	223,681
Less: Interest	(16,493)		(21,317)		(37,810)
Present value of lease liabilities	$	53,832	$	132,039	$	185,871

The components of lease cost were as follows:




	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Amortization of leased assets	$	34,212	$	35,321	$	37,569
Interest on lease liabilities	4,795		3,990		4,642
Total finance lease cost	39,007		39,311		42,211
Operating lease cost	10,531		11,021		11,586
Variable lease cost	872		437		178
Total lease cost	$	50,410	$	50,769	$	53,975

Supplemental balance sheet information related to leases was as follows:


Lease Type	Balance Sheet Classification	December 31, 2023		December 31, 2022
		(In thousands)
Operating lease right-of-use assets (1)	Deferred charges and other assets	$	50,973	$	49,741
Finance lease right-of-use assets (1)	Property and equipment, net	127,425		115,813
Total right-of-use assets (1)		$	178,398	$	165,554


Operating	Accounts payable and accrued liabilities	$	7,782	$	7,083
Finance	Current maturities of long-term debt	44,109		42,469
Total current lease liabilities		51,891		49,552

Operating	Other liabilities	46,050		45,314
Finance	Long-term debt	87,930		78,368
Total non-current lease liabilities		133,980		123,682
Total lease liabilities		$	185,871	$	173,234

(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, 2023		December 31, 2022
	Operating	Finance	Operating	Finance
Weighted-average remaining lease term (years)	11.1	5.2	11.8	4.5
Weighted-average discount rate	4.4%	4.6%	4.0%	3.3%

Supplemental cash flow information related to leases was as follows:



	Years Ended December 31,
	2023		2022		2021
	(In thousands)
Cash paid for amounts in the measurement of lease liabilities:
Operating cash flows for operating leases	$	10,473	$	10,994	$	11,693
Operating cash flows for finance leases	5,191		3,838		4,207
Financing cash flows for finance leases	34,482		35,542		34,617
Total cash paid for amounts included in the measurement of lease liabilities	$	50,146	$	50,374	$	50,517

New finance leases	57,962		21,148		21,097
Finance lease renewals and extensions	829		(264)		1,095
Right-of-use assets obtained in exchange for finance lease liabilities	$	58,791	$	20,884	$	22,192

New operating leases	6,534		2,704		3,268
Operating lease renewals and extensions	2,985		2,324		4,554
Right-of-use assets obtained in exchange for operating lease liabilities	$	9,519	$	5,028	$	7,822

We have 80 operating leases where we are the lessor and the non-cancelable term is greater than one year, resulting in $4.0 million and $4.3 million in lease income for the years ended December 31, 2023 and 2022, 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, 2023 (in thousands):


2024	$	3,967
2025	3,297
2026	2,512
2027	2,043
2028	1,682
2029 and thereafter	11,793
Total expected cash receipts	$	25,294

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 $0.4 million for the year ended December 31, 2023 and $0.7 million for each of the years ended December 31, 2022 and 2021. As of December 31, 2023, our Consolidated Balance Sheet includes Land of $33.9 million, and Buildings and improvements of $12.6 million, net of $2.3 million accumulated depreciation, related to these properties.