XML 107 R22.htm IDEA: XBRL DOCUMENT

Leases

12 Months Ended

Dec. 31, 2019

Leases

The Company adopted ASU 2016-02 effective January 1, 2019. The Company’s lease portfolio primarily consists of real estate leases for its corporate headquarters, regional corporate offices and its facilities which are leased under noncancelable operating and finance leases expiring in various years through 2034. Most lease agreements cover periods from five to fifteen years and contain renewal options of five to ten years at the fair rental value at the time of renewal. Certain leases are subject to rent holidays and/or escalation clauses.

Certain of the Company’s lease agreements include rental payments adjusted periodically for the consumer price index and real estate taxes. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company has lease agreements with lease and non-lease components and has elected to determine by asset class whether to separate these components. The Company has elected not to separate lease and non-lease components for real estate leases. Because the Company’s current leases do not provide an implicit rate of return, the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate represents the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term based on the information available at commencement date of the lease.

The Company leases certain facilities from noncontrolling interest members or entities under the control of noncontrolling interest members. Rent expense under these lease arrangements was $12,799, $10,778 and $10,160 in 2019, 2018 and 2017, respectively. The Company subleases space at certain of these facilities to the noncontrolling interest members. Rental income under these sublease arrangements, which extend to 2033, amounted to $975, $963 and $853 in 2019, 2018 and

2017, respectively. Future receipts of $5,262 due from these related parties are included in sublease receipts presented below. The Company subleases space in certain of its other facilities to nephrologist partners at market values under non‑cancelable operating leases expiring in various years through 2033. Rental income under all subleases, including those noted above, was $1,848 in 2019, $1,709 in 2018 and $1,515 in 2017.

The components of lease expense were as follows:



	Year Ended
Lease Cost	December 31, 2019
Operating lease cost	$	31,865
Finance lease cost:
Amortization of right-of-use assets	590
Interest on lease liabilities	587
Short-term lease cost(1)	299
Variable lease cost	9,998
Less: Sublease income	(1,848		)
Total lease cost	$	41,491

_____________________________


(1)	Short-term leases are leases having a term of twelve months or less. The Company elected to recognize short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

Supplemental cash flow information related to leases was as follows:



	Year Ended
Other information	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	31,849
Operating cash flows from finance leases	587
Financing cash flows from finance leases	274
Right-of-use assets obtained in exchange for new or modified lease obligations:
Operating leases	21,933
Finance leases	1,332

Supplemental balance sheet information related to leases was as follows:



	As of December 31, 2019
Operating Leases
Operating lease right-of-use assets	$	133,899

Current portion of operating lease liabilities	$	22,061
Long-term operating lease liabilities, less current portion	123,792
Total operating lease liabilities	$	145,853

Finance Leases
Property and equipment, at cost	$	7,499
Accumulated depreciation	(588		)
Property and equipment, net	$	6,911

Current portion of long-term debt	$	390
Long-term debt, less current portion	7,390
Total finance lease liabilities	$	7,780

Weighted Average Remaining Lease Term
Operating leases	7.1 years
Finance leases	10.9 years
Weighted Average Discount Rate
Operating leases	7.0		%
Finance leases	9.7		%

Future minimum lease payments under noncancelable operating leases, net of sublease receipts and finance leases as of December 31, 2019, are as follows:



Year Ended December 31,	Operating Leases		Less: Sublease Receipts		Net Operating Lease		Finance Leases
2020	$	32,691	$	1,607	$	31,084	$	1,093
2021	31,105		1,641		29,464		1,108
2022	28,637		1,662		26,975		1,123
2023	24,242		1,142		23,100		1,141
2024	19,844		607		19,237		1,188
Thereafter	57,893		2,575		55,318		7,495
Total minimum lease payments	$	194,412	$	9,234	$	185,178	$	13,148
Less: amount representing interest	42,792						5,368
Present value of lease liabilities held for sale	5,767						—
Present value of lease liabilities	$	145,853					$	7,780

Future minimum lease payments under noncancelable operating leases, net of sublease receipts and capital leases as of December 31, 2018, are as follows:



Year Ended December 31,	Operating Leases		Less: Sublease Receipts		Net Operating Leases		Capital Leases
2019	$	31,311	$	1,537	$	29,774	$	876
2020	29,608		1,551		28,057		930
2021	27,597		1,572		26,025		940
2022	25,132		1,592		23,540		950
2023	20,363		1,117		19,246		963
Thereafter	61,085		3,175		57,910		6,286
Total minimum lease payments	$	195,096	$	10,544	$	184,552	$	10,945
Less: amount representing interest							4,239
Present value of net minimum capital lease payments							$	6,706
Less: current installments of obligations under capital leases							$	302
Long-term capital lease obligation							$	6,404

As of December 31, 2019, the Company has additional operating and finance lease obligations that have not yet commenced of $10,173 and $992, respectively. These operating and finance leases will commence during fiscal year 2020 with lease terms of 5 to 15 years.

LEASES