Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

8.    Leases

Chemed and each of its operating subsidiaries are service companies. As such, real estate leases comprise the largest lease obligation (and conversely, right of use asset) in our lease portfolio. VITAS has leased office space, as well as space for IPUs and/or contract beds within hospitals. Roto-Rooter has leased office space. Our leases have remaining terms of under 1 year to 10 years, some of which include options to extend the lease for up to 5 years, and some of which include options to terminate the lease within 1 year.

We do not currently have any finance leases, therefore all lease information disclosed is related to operating leases.

The components of balance sheet information related to leases were as follows:

	‎March 31,		‎December 31,
	2020		2019
Assets
Operating lease assets	$	112,302	$	111,652
Liabilities
Current operating leases		36,252		39,280
Noncurrent operating leases		88,278		86,656
Total operating lease liabilities	$	124,530	$	125,936

The components of lease expense were as follows:

	Three months ended ‎March 31,
	2020		2019
Lease Expense (a)
Operating lease expense	$	14,610	$	11,537
Sublease income		-		(6)
Net lease expense	$	14,610	$	11,531

(a)Includes short-term leases and variable lease costs, which are immaterial. Included in both cost of services provided and goods sold and selling, general and administrative expenses.

The components of cash flow information related to leases were as follows:

	Three months ended ‎March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	12,028	$	9,987
Leased assets obtained in exchange for new operating lease liabilities	$	12,583	$	3,213

Weighted Average Remaining Lease Term at March 31, 2020
Operating leases	4.5	years

Weighted Average Discount Rate at March 31, 2020
Operating leases	3.24	%

Maturity of Operating Lease Liabilities (in thousands)
2020	$	32,855
2021		32,430
2022		24,360
2023		18,089
2024		12,948
Thereafter		13,387
Total lease payments	$	134,069
Less: interest		(9,423)
Less: future lease obligations not yet commenced		(116)
Total liability recognized on the balance sheet	$	124,530

For leases commencing prior to April 2019, minimum rental payments exclude payments to landlords for real estate taxes and common area maintenance. Operating lease payments include $2.3 million related to extended lease terms that are reasonably certain of being exercised and exclude $116,000 lease payments for leases signed but not yet commenced.