LEASES

12 Months Ended

Dec. 31, 2021

LEASESOur material lease contracts are for facilities and advanced radiology equipment. In regards to our imaging, administrative and warehouse facilities, the most common initial lease term varies in length from 5 to 15 years. Including renewal options negotiated with the landlord, we can have a total span of 10 to 35 years at these locations, and we do not enter into purchase options on the underlying property. We also lease smaller satellite X-Ray locations on mutually renewable terms, usually lasting one year. Leases for advanced radiology and office equipment have terms generally lasting from 5 to 8 years. All leases are classified as operating or finance for accounting purposes, depending on the terms of the agreement. Our Incremental Borrowing Rate ("IBR") used to discount the stream of lease payments is closely related to the interest rates charged on our collateralized debt obligations and our IBR is adjusted when those rates experience a substantial change. During 2021, we satisfied all liabilities classified as finance leases, and only operating leases remain.

The components of lease expense were as follows:



	Years ended December 31,
(In thousands)	2021		2020

Operating lease cost(1)	$	121,578	$	99,323

Finance lease cost:
Depreciation of leased equipment	$	3,068	$	3,122
Interest on lease liabilities	46		210
Total finance lease cost	$	3,114	$	3,332

1) Operating lease cost above for the year ended December 31, 2021 includes $12.6 million in lease abandonment charges. Please see our discussion in the Leases section of Note 2, Summary of Significant Accounting Policies

Supplemental cash flow information related to leases was as follows:


	Years ended December 31,
(In thousands)	2021		2020

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	110,288	$	89,821
Operating cash flows from financing leases	46		210
Financing cash flows from financing leases	3,304		3,304
Right-of-use & Equipment assets obtained in exchange for lease obligations:
Operating leases	186,695		106,099
Financing leases	—		24

1) On December 31, 2021 we reduced our liability and eliminated the related right-of-use assets for future lease options at facilities that we elected to abandon. The amount of liability and right-of-use asset reduction amounted to approximately $3.3 million.

Supplemental balance sheet information related to leases was as follows:


(In thousands, except lease term and discount rates)	December 31,
	2021			2020

Operating Leases
Operating lease right-of-use assets	$	584,291		$	483,661
Current portion of operating lease liability	65,452			65,794
Operating lease liabilities	577,675			463,096
Total operating lease liabilities	$	643,127		$	528,890

Finance Leases
Equipment at cost	$	13,984		$	13,984
Accumulated depreciation	(9,287)			(6,220)
Equipment, net	$	4,697		$	7,764
Current portion of finance lease liability	$	—		$	2,578
Finance lease liabilities	—			743
Total finance lease liabilities	$	—		$	3,321

Weighted Average Remaining Lease Term
Operating leases - years	10.4			9.2
Finance leases - years	0.0			2.5

Weighted Average Discount Rate
Operating leases	6.3		%	6.4		%
Finance leases	—		%	4.4		%

Maturities of lease liabilities were as follows:


(In thousands)
	Operating
Year Ending December 31,	Leases
2022	$	103,831
2023	96,894
2024	88,682
2025	79,409
2026	73,912
Thereafter	457,425
Total Lease Payments	900,153
Less imputed interest	(257,026)
Total	$	643,127

As of December 31, 2021, we have additional operating leases for facilities and medical equipment that have not yet commenced of approximately $19.0 million. These operating leases will commence in 2022 with lease terms of 1 to 15 years.