Finance Obligation

9 Months Ended

Sep. 30, 2024

Finance Obligation

Finance Obligation

18. Finance Obligation

The Company has sold future services to be performed associated with certain sale/leaseback transactions and recorded the balance as a finance obligation. The outstanding balance of this obligation as of September 30, 2024 was $296.0 million, $77.3 million and $218.7 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet. The outstanding balance of this obligation at December 31, 2023 was $350.8 million, $74.0 million and $276.8 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet. The amount is amortized using the effective interest method. Interest expense recorded related to finance obligations for the three months ended September 30, 2024 and 2023 was $9.0 million and $10.4 million, respectively. Interest expense recorded related to finance obligations for the nine months ended September 30, 2024 and 2023 was $28.4 million and $29.4 million, respectively.

During the third quarter of 2024, the Company entered into additional failed sale/leaseback transactions that were accounted for as financing obligations resulting in $56.9 million of additional finance obligations. No gain or loss was recorded as a result of these transactions. The outstanding balance of finance obligations related to sale/leaseback transactions as of September 30, 2024 was $65.6 million, $6.0 million and $59.6 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet with a residual value of $33.6 million. The outstanding balance of this obligation at December 31, 2023 was $17.6 million, $10.0 million and $7.6 million of which was classified as short-term and long-term, respectively, on the unaudited interim condensed consolidated balance sheet.

Future minimum payments under finance obligations notes above as of September 30, 2024 were as follows (in thousands):

					Total
	Sale of Future		Sale/Leaseback		Finance
	Revenue - Debt		Financings		Obligations
Remainder of 2024	$	27,451	$	5,430	$	32,881
2025		104,547		15,553		120,100
2026		87,824		13,954		101,778
2027		71,253		13,954		85,207
2028		51,188		13,741		64,929
2029 and thereafter		25,503		22,038		47,541
Total future minimum payments		367,766		84,670		452,436
Less imputed interest		(71,751)		(52,691)		(124,442)
Total	$	296,015	$	31,979	$	327,994

Other information related to the above finance obligations are presented in the following table:

	Nine months ended		Nine months ended
	September 30, 2024		September 30, 2023
Cash payments (in thousands)	$	86,397	$	76,747
Weighted average remaining term (years)		4.25		4.62
Weighted average discount rate		12.3%		11.3%

The fair value of the Company’s total finance obligations approximated their carrying value as of September 30, 2024 and December 31, 2023.