Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

13. Leases

The Company has operating and finance leases for facilities, ground leases, office space, computers, copier equipment and transportation vehicles that have remaining lease terms of one year to seventy-seven years, some of which include options to extend the lease for up to ten years. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the term of the lease. Many of GEO's leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Only renewal or termination options that are reasonably certain to be exercised by the Company are included in the lease term which is used in the calculation of lease liabilities and right-of-use assets. GEO does not typically enter into lease agreements that contain a residual guarantee or that provide for variable lease payments.

When available, GEO uses the rate implicit in the lease to discount lease payments to present value, however, most of GEO's lease agreements do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Lease related assets and liabilities are recorded on the balance sheet as follows (in thousands):

	Classification on the Balance Sheet	December 31, 2021		December 31, 2020
Assets
Operating lease assets	Operating Lease Right-of-Use Assets, Net	$	112,187	$	124,727
Finance lease assets	Property and Equipment, Net		3,420		3,914
Total lease assets		$	115,607	$	128,641
Liabilities
Current
Operating	Operating lease liabilities, current portion	$	28,279	$	29,080
Finance [1]	Current portion of finance liabilities, long-term debt and non-recourse debt		1,866		2,041
Noncurrent
Operating	Operating Lease Liabilities		89,917		101,375
Finance [1]	Finance Lease Liabilities		1,977		2,988
Total lease liabilities		$	122,039	$	135,484

[1] Also refer to Note 12 - Debt.

Certain information related to the lease costs for finance and operating leases is presented as follows (in thousands):

	Year Ended December 31, 2021			Year Ended December 31, 2020
Operating lease cost	$	40,020		$	39,506
Finance lease cost:
Amortization of right-of-use assets		1,687			1,225
Interest on lease liabilities		287			352
Total finance lease cost		1,974			1,577
Short-term lease cost		350			3,293
Total lease cost	$	42,344		$	44,376
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	38,874		$	38,847
Operating cash flows for finance leases	$	1,255		$	276
Financing activities for finance leases	$	1,289		$	1,918
Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,786		$	23,940
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,198		$	2,260
Weighted average remaining lease term:
Operating leases	6.2 years			6.8 years
Finance leases	3.8 years			2.9 years
Weighted average discount rate:
Operating leases		4.56	%		4.65	%
Finance leases		5.26	%		6.47	%

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities and finance lease liabilities recorded on the balance sheet as of December 31, 2021 (in thousands).

	Operating Leases			Finance Leases
2022	$	36,704		$	1,992
2023		28,388			759
2024		22,854			759
2025		14,617			536
2026		9,020			28
Thereafter		26,356			—
Total minimum lease payments		137,939			4,074
Less: amount of lease payment representing interest		(19,743	)		(231	)
Present value of future minimum lease payments		118,196			3,843
Less: current obligations under leases		(28,279	)		(1,866	)
Long-term lease obligations	$	89,917		$	1,977

Leases

13. Leases

The Company has operating and finance leases for facilities, ground leases, office space, computers, copier equipment and transportation vehicles that have remaining lease terms of one year to seventy-seven years, some of which include options to extend the lease for up to ten years. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the term of the lease. Many of GEO's leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Only renewal or termination options that are reasonably certain to be exercised by the Company are included in the lease term which is used in the calculation of lease liabilities and right-of-use assets. GEO does not typically enter into lease agreements that contain a residual guarantee or that provide for variable lease payments.

When available, GEO uses the rate implicit in the lease to discount lease payments to present value, however, most of GEO's lease agreements do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Lease related assets and liabilities are recorded on the balance sheet as follows (in thousands):

	Classification on the Balance Sheet	December 31, 2021		December 31, 2020
Assets
Operating lease assets	Operating Lease Right-of-Use Assets, Net	$	112,187	$	124,727
Finance lease assets	Property and Equipment, Net		3,420		3,914
Total lease assets		$	115,607	$	128,641
Liabilities
Current
Operating	Operating lease liabilities, current portion	$	28,279	$	29,080
Finance [1]	Current portion of finance liabilities, long-term debt and non-recourse debt		1,866		2,041
Noncurrent
Operating	Operating Lease Liabilities		89,917		101,375
Finance [1]	Finance Lease Liabilities		1,977		2,988
Total lease liabilities		$	122,039	$	135,484

[1] Also refer to Note 12 - Debt.

Certain information related to the lease costs for finance and operating leases is presented as follows (in thousands):

	Year Ended December 31, 2021			Year Ended December 31, 2020
Operating lease cost	$	40,020		$	39,506
Finance lease cost:
Amortization of right-of-use assets		1,687			1,225
Interest on lease liabilities		287			352
Total finance lease cost		1,974			1,577
Short-term lease cost		350			3,293
Total lease cost	$	42,344		$	44,376
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	38,874		$	38,847
Operating cash flows for finance leases	$	1,255		$	276
Financing activities for finance leases	$	1,289		$	1,918
Right-of-use assets obtained in exchange for new operating lease liabilities	$	10,786		$	23,940
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,198		$	2,260
Weighted average remaining lease term:
Operating leases	6.2 years			6.8 years
Finance leases	3.8 years			2.9 years
Weighted average discount rate:
Operating leases		4.56	%		4.65	%
Finance leases		5.26	%		6.47	%

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities and finance lease liabilities recorded on the balance sheet as of December 31, 2021 (in thousands).

	Operating Leases			Finance Leases
2022	$	36,704		$	1,992
2023		28,388			759
2024		22,854			759
2025		14,617			536
2026		9,020			28
Thereafter		26,356			—
Total minimum lease payments		137,939			4,074
Less: amount of lease payment representing interest		(19,743	)		(231	)
Present value of future minimum lease payments		118,196			3,843
Less: current obligations under leases		(28,279	)		(1,866	)
Long-term lease obligations	$	89,917		$	1,977