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 inpatient units (“IPUs”) and/or contract beds within hospitals. Roto-Rooter mainly 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.

Roto-Rooter purchases equipment and leases it to certain of its independent contractors. We analyzed these leases in accordance with ASC 842 and determined they are operating leases. As a result, Roto-Rooter will continue to capitalize the equipment underlying these leases, depreciate the equipment and recognize rental income.

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


	‎March 31,		‎December 31,
	2021		2020
Assets
Operating lease assets	$	124,104	$	123,448

Liabilities
Current operating leases		37,897		36,200
Noncurrent operating leases		98,813		99,210
Total operating lease liabilities	$	136,710	$	135,410

The components of lease expense for the first quarter is as follows (in thousands):


	Three months ended March 31,
	2021		2020
Lease Expense (a)
Operating lease expense	$	15,388	$	14,610
Sublease income		(45)		-
Net lease expense	$	15,343	$	14,610

(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.


	Three months ended ‎March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	12,850	$	12,028

Leased assets obtained in exchange for new operating lease liabilities	$	13,776	$	12,583


Weighted Average Remaining Lease Term at March 31, 2021
Operating leases	4.9	years


Weighted Average Discount Rate at March 31, 2021
Operating leases	2.66	%


Maturity of Operating Lease Liabilities (in thousands)

2021	$	35,241
2022		32,667
2023		25,209
2024		19,451
2025		13,547
Thereafter		19,801
Total lease payments	$	145,916
Less: interest		(9,206)
Total liability recognized on the balance sheet	$	136,710

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. There are no leases signed but not yet commenced.