Leases

12 Months Ended

Dec. 31, 2021

Leases

The Company leases substantially all of its U.S. dialysis facilities. The majority of the Company’s facilities are leased under non-cancellable operating leases which range in terms from five years to 15 years and which contain renewal options of five years to ten years at the fair rental value at the time of renewal. Certain of the Company's leases are subject to periodic consumer price increases or contain fixed escalation clauses. See Note 1 for further information on how the Company accounts for leases.

As of December 31, 2021 and December 31, 2020, assets recorded under finance leases were $322,060 and $275,389, respectively, and accumulated amortization associated with finance leases was $75,252 and $49,345, respectively, included in property and equipment, net, on the Company's consolidated balance sheet.

In certain markets, the Company acquires and develops dialysis centers. Upon completion, the Company sells the center to a third party and leases the space back with the intent of operating the center on a long term basis. Both the sale and leaseback terms are generally market terms. The lease terms are consistent with the Company's other operating leases with the majority of the leases under non-cancellable operating leases ranging in terms from five years to 15 years and which contain renewal options of five years to ten years at the fair rental value at the time of renewal.

The components of lease expense were as follows:


	Year ended December 31,
Lease cost	2021		2020		2019
Operating lease cost(1):
Fixed lease expense	$	547,923	$	541,090	$	526,352
Variable lease expense	125,981		122,729		119,740
Financing lease cost:
Amortization of leased assets	26,846		24,720		23,724
Interest on lease liabilities	13,988		14,421		14,932
Net lease cost	$	714,738	$	702,960	$	684,748

(1) Includes short-term lease expense and sublease income, which are immaterial.

Other information related to leases was as follows:


	Year ended December 31,
Lease term and discount rate	2021		2020		2019
Weighted average remaining lease term (years):
Operating leases	8.3		8.7		9.0
Finance leases	10.5		10.5		10.2
Weighted average discount rate:
Operating leases	3.5	%	3.8	%	4.1	%
Finance leases	4.5	%	5.1	%	5.4	%


	Year ended December 31,
Other information	2021		2020		2019
Gains on sale leasebacks, net	$	17,137	$	34,301	$	20,833
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	684,186	$	661,318	$	637,655
Operating cash flows for finance leases	$	21,343	$	20,981	$	22,257
Financing cash flows for finance leases	$	22,445	$	24,780	$	25,692
Net operating lease assets obtained in exchange for new or modified operating lease liabilities	$	361,101	$	401,559	$	432,074

Future minimum lease payments under non-cancellable leases as of December 31, 2021 are as follows:


	Operating leases		Finance leases
2022	$	494,442	$	36,981
2023	511,341		37,672
2024	463,124		38,199
2025	413,117		38,376
2026	361,771		37,141
Thereafter	1,293,544		183,250
Total future minimum lease payments	3,537,339		371,619
Less portion representing interest	(470,269)		(72,491)
Present value of lease liabilities	$	3,067,070	$	299,128

Rent expense under all operating leases for 2021, 2020 and 2019 was $673,904, $663,819 and $646,092, respectively. Rent expense is recorded on a straight-line basis over the term of the lease, including leases that contain fixed escalation clauses or include abatement provisions. Leasehold improvement incentives are deferred and amortized to rent expense over the term of the lease. Finance lease obligations are included in long-term debt. See Note 13 for further details on long-term debt.