Leases

12 Months Ended

Dec. 31, 2021

Leases

Leases

Note 16 —Leases

The Company’s operating leases are comprised of real estate for fueling stations, office spaces, warehouses, a LNG liquefaction plant, and office equipment, and its finance leases are comprised of vehicles.

NG Advantage has provided residual value guarantees on leases of certain vehicles aggregating $1.0 million to the lessors. NG Advantage expects to owe these amounts in full and therefore they have been included in the measurement of the lease liabilities and ROU assets.

Certain of the Company’s real estate leases contain variable lease payments, including payments based on a change in the index or gasoline gallon equivalents of natural gas dispensed at fueling stations. These variable lease payments cannot be determined at the commencement of the lease, are not included in the ROU assets and lease liabilities, and are recorded as a period expense when incurred.

Lessee Accounting

As of December 31, 2020 and 2021, the Company’s finance and operating lease asset and liability balances were as follows (in thousands):

	2020		2021
Finance leases:
Land, property and equipment, gross	$	4,915	$	5,617
Accumulated depreciation		(1,905)		(2,646)
Land, property and equipment, net	$	3,010	$	2,971
Current portion of finance lease obligations	$	840	$	846
Long-term portion of finance lease obligations		2,552		2,427
Total finance lease liabilities	$	3,392	$	3,273
Operating leases:
Operating lease right-of-use assets	$	25,967	$	42,537
Current portion of operating lease obligations	$	2,822	$	3,551
Long-term portion of operating lease obligations		23,698		39,431
Total operating lease liabilities	$	26,520	$	42,982

The components of lease expense for finance and operating leases consisted of the following (in thousands):

	Year Ended December 31,
	2020		2021
Finance leases:
Depreciation on assets under finance leases	$	733	$	809
Interest on lease liabilities		185		181
Total finance leases expense	$	918	$	990
Operating leases:
Lease expense	$	6,287	$	7,313
Lease expense on short-term leases		847		205
Variable lease expense		2,593		3,321
Sublease income		(736)		(726)
Total operating leases expense	$	8,991	$	10,113

Supplemental information on finance and operating leases is as follows (dollars in thousands):

	Year Ended December 31,
	2020		2021
Operating cash outflows from finance leases	$	185	$	181
Operating cash outflows from operating leases	$	5,503	$	5,804
Financing cash outflows from finance leases	$	1,242	$	789
Assets obtained in exchange for new finance lease liabilities (1)	$	1,337	$	879
ROU assets obtained in exchange for operating lease liabilities (1)	$	96	$	19,515

	December 31,	December 31,
	2020	2021
Weighted-average remaining lease term - finance leases	3.59 years	2.87 years
Weighted-average remaining lease term - operating leases	10.81 years	12.31 years
Weighted-average discount rate - finance leases	5.27%	5.22%
Weighted-average discount rate - operating leases	8.40%	7.55%

(1) These amounts are excluded from the accompanying consolidated statements of cash flows as they are non-cash investing, operating and/or financing activities.

The following schedule represents the Company’s maturities of finance and operating lease liabilities as of December 31, 2021 (in thousands):

	Finance Leases		Operating Leases
Fiscal year:
2022	$	990	$	6,148
2023		893		6,037
2024		1,305		6,087
2025		390		6,028
2026		—		5,840
Thereafter		—		38,033
Total minimum lease payments		3,578		68,173
Less amount representing interest		(305)		(25,191)
Present value of lease liabilities	$	3,273	$	42,982

Lessor Accounting

The Company leases fueling station equipment to customers that contain an option to extend and an end-of-term purchase option. Receivables from these leases are accounted for as finance leases, specifically sales-type leases, and are included in “Other receivables” and “Notes receivable and other long-term assets, net” in the accompanying consolidated balance sheets.

The Company recognizes the net investment in the lease as the sum of the lease receivable and the unguaranteed residual value, both of which are measured at the present value using the interest rate implicit in the lease.

During the years ended December 31, 2020 and 2021, the Company recognized $0.5 million and $0.4 million, respectively, in “Interest income” on its lease receivables.

The following schedule represents the Company’s maturities of lease receivables as of December 31, 2021 (in thousands):

Fiscal year:
2022	$	1,182
2023		962
2024		962
2025		962
2026		1,034
Thereafter		2,339
Total minimum lease payments		7,441
Less amount representing interest		(1,908)
Present value of lease receivables	$	5,533