9. Right to Use Liability

The Company leases operating facilities throughout the United States. The Company analyzes all leases in accordance with Accounting Standards Codification (“ASC”) 840 — Leases. In the first quarter of 2016, two leases were accounted for as operating leases after completion of construction as they qualified for asset derecognition under the sales-leaseback accounting rules. In the third quarter of 2016, one lease was derecognized and accounted for as an operating lease after a reduction in the lease deposit to less than two months’ rent, as it qualifies for asset derecognition. The derecognitions in 2016 resulted in the removal of $20.1 million of right to use assets, and $20.0 million of right to use liabilities, and $0.1 million of deferred gain which will be recognized ratably as an offset to rent expense over the term of the leases. In 2015, twenty-five of the leases had construction projects for which the Company was deemed to be the owner. Eighteen leases were accounted for as finance leases after completion of the construction as they did not qualify for sale accounting under the sale‑leaseback accounting rules. Seven leases were accounted for as operating leases after completion of construction as they qualified for asset derecognition under the sale‑leaseback accounting rules. An additional eighteen leases were accounted for as capital leases based on capital lease accounting rules. For both the financing and capital leases, the value of the real property, other than land was capitalized as a right to use asset with a corresponding right to use liability. To the extent land was less than twenty‑five percent of the value of the total real property, land was capitalized as a right to use asset with a corresponding right to use liability. In the fourth quarter of 2015, the Company modified the terms of certain leases. As a result of the modifications, thirty leases met the requirements to be reported as operating leases and therefore the right to use assets and corresponding right to use liabilities were derecognized in the fourth quarter of 2015. This derecognition resulted in the removal of $122.4 million of right to use assets, and $127.0 million of right to use liabilities and $4.6 million of deferred gain, which will be recognized ratably as an offset to rent expense over the term of the leases.

The Company has included the right to use assets in property and equipment, net at December 31, as follows (in thousands):


	2017		2016
Right to use assets	$	10,673	$	10,673
Accumulated depreciation		(926)		(667)
	$	9,747	$	10,006

The following is a schedule by year of the future changes in the right to use liability (in thousands):


2018	$	583
2019		486
2020		486
2021		487
2022		487
Thereafter (1)		13,325
Total minimum lease payments		15,854
Amounts representing interest		(5,661)
Present value of net minimum right to use liability payments	$	10,193

(1) Includes $5.0 million of scheduled derecognition of right to use liability due to reductions in the lease deposit to less than two months’ rent.