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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