Leases

12 Months Ended

Dec. 31, 2022

13.

Leases

The Company has operating and finance leases for facilities, ground leases, office space, computers, copier equipment and transportation vehicles that have remaining lease terms of one year to seventy-seven years, some of which include options to extend the lease for up to ten years. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the term of the lease. Many of GEO's leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Only renewal or termination options that are reasonably certain to be exercised by the Company are included in the lease term which is used in the calculation of lease liabilities and right-of-use assets. GEO does not typically enter into lease agreements that contain a residual guarantee or that provide for variable lease payments.

When available, GEO uses the rate implicit in the lease to discount lease payments to present value, however, most of GEO's lease agreements do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Lease related assets and liabilities are recorded on the balance sheet as follows (in thousands):


	Classification on the Balance Sheet	December 31, 2022		December 31, 2021
Assets
Operating lease assets	Operating Lease Right-of-Use Assets, Net	$	90,950	$	112,187
Finance lease assets	Property and Equipment, Net		1,895		3,420
Total lease assets		$	92,845	$	115,607

Liabilities
Current
Operating	Operating lease liabilities, current portion	$	22,584	$	28,279
Finance [1]	Current portion of finance liabilities, long-term debt and non-recourse debt		697		1,866
Noncurrent
Operating	Operating Lease Liabilities		73,801		89,917
Finance [1]	Finance Lease Liabilities		1,280		1,977
Total lease liabilities		$	98,362	$	122,039

[1] Also refer to Note 12 - Debt.

Certain information related to the lease costs for finance and operating leases is presented as follows (in thousands):


	Year Ended December 31, 2022			Year Ended December 31, 2021
Operating lease cost	$	37,362		$	40,020
Finance lease cost:
Amortization of right-of-use assets		1,525			1,687
Interest on lease liabilities		119			287
Total finance lease cost		1,644			1,974
Short-term lease cost		4,869			350
Total lease cost	$	43,875		$	42,344
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	37,836		$	38,874
Operating cash flows for finance leases	$	1,262		$	1,255
Financing activities for finance leases	$	726		$	1,289
Right-of-use assets obtained in exchange for new operating lease liabilities	$	11,697		$	10,786
Right-of-use assets obtained in exchange for new finance lease liabilities	$	—		$	1,198
Weighted average remaining lease term:
Operating leases	6.3 years			6.2 years
Finance leases	2.8 years			3.8 years
Weighted average discount rate:
Operating leases		3.90	%		4.56	%
Finance leases		4.00	%		5.26	%

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities and finance lease liabilities recorded on the balance sheet as of December 31, 2022 (in thousands).


	Operating Leases			Finance Leases
2023	$	28,447		$	759
2024		23,527			759
2025		17,844			536
2026		11,593			29
2027		9,069			—
Thereafter		21,849			—
Total minimum lease payments		112,329			2,083
Less: amount of lease payment representing interest		(15,944	)		(106	)
Present value of future minimum lease payments		96,385			1,977
Less: current obligations under leases		(22,584	)		(697	)
Long-term lease obligations	$	73,801		$	1,280