Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

The components of lease expense for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
($ in thousands)	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	2,236	$	977
Interest on lease liabilities	694		261
Operating lease cost	10,574		9,499
Variable lease cost	1,246		1,091
Short-term lease cost	2,051		1,546
Total lease cost	$	16,801	$	13,374

Supplemental cash flow and other information related to leases for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
($ in thousands)	2023		2022
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	9,877	$	9,032
Finance leases	2,936		1,479
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	4,562		9,461
Finance leases	2,789		—

Lease terms and discount rates as of March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023		December 31, 2022
Weighted-average remaining lease term:
Operating leases	4.7 years		4.8 years
Finance leases	3.1 years		3.1 years
Weighted-average discount rate:
Operating leases	4.8	%	4.6	%
Finance leases	8.1	%	8.2	%

Future minimum lease commitments as of March 31, 2023 are as follows:

($ in thousands)	Finance		Operating
Remainder of 2023	$	9,027	$	23,556
2024	7,871		25,812
2025	7,982		23,278
2026	13,234		12,130
2027	1,200		4,815
Thereafter	—		14,504
Total lease payments	39,314		104,095
Less imputed interest	(5,309)		(11,094)
Total	$	34,005	$	93,001

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of March 31, 2023 is $13.3 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as finance leases, the Company includes the residual value guarantee, estimated in the lease agreement, in the financing lease liability.

Lessor Arrangements

The Company leases dry and wet sand containers and conveyor belts to customers through operating leases, where the lessor for tax purposes is considered to be the owner of the equipment during the term of the lease. The lease agreements do not include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value. However, some of the leases contain a termination clause in which the customer can cancel the contract. The leases can be subject to variable lease payments if the customer requests more units than what is agreed upon in the lease. The Company does not record any lease assets or liabilities related to these variable items.

The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of March 31, 2023 and December 31, 2022 were as follows:

($ in thousands)	March 31, 2023		December 31, 2022
Lease Equipment	$	110,844	$	106,087
Less: Accumulated depreciation	(14,699)		(11,408)
Lease Equipment - net	$	96,145	$	94,679

Future payments receivable for operating leases commenced as of March 31, 2023 are as follows:

($ in thousands)
Remainder of 2023	$	12,392
2024	9,218
2025	1,051
2026	—
2027	—
Thereafter	—
Total	$	22,661

Revenues from operating leases for the three months ended March 31, 2023 and 2022 were $8.6 million and $5.9 million, respectively.

Leases

Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

The components of lease expense for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
($ in thousands)	2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	2,236	$	977
Interest on lease liabilities	694		261
Operating lease cost	10,574		9,499
Variable lease cost	1,246		1,091
Short-term lease cost	2,051		1,546
Total lease cost	$	16,801	$	13,374

Supplemental cash flow and other information related to leases for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
($ in thousands)	2023		2022
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	9,877	$	9,032
Finance leases	2,936		1,479
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	4,562		9,461
Finance leases	2,789		—

Lease terms and discount rates as of March 31, 2023 and December 31, 2022 were as follows:

	March 31, 2023		December 31, 2022
Weighted-average remaining lease term:
Operating leases	4.7 years		4.8 years
Finance leases	3.1 years		3.1 years
Weighted-average discount rate:
Operating leases	4.8	%	4.6	%
Finance leases	8.1	%	8.2	%

Future minimum lease commitments as of March 31, 2023 are as follows:

($ in thousands)	Finance		Operating
Remainder of 2023	$	9,027	$	23,556
2024	7,871		25,812
2025	7,982		23,278
2026	13,234		12,130
2027	1,200		4,815
Thereafter	—		14,504
Total lease payments	39,314		104,095
Less imputed interest	(5,309)		(11,094)
Total	$	34,005	$	93,001

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of March 31, 2023 is $13.3 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as finance leases, the Company includes the residual value guarantee, estimated in the lease agreement, in the financing lease liability.

Lessor Arrangements

The Company leases dry and wet sand containers and conveyor belts to customers through operating leases, where the lessor for tax purposes is considered to be the owner of the equipment during the term of the lease. The lease agreements do not include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value. However, some of the leases contain a termination clause in which the customer can cancel the contract. The leases can be subject to variable lease payments if the customer requests more units than what is agreed upon in the lease. The Company does not record any lease assets or liabilities related to these variable items.

The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of March 31, 2023 and December 31, 2022 were as follows:

($ in thousands)	March 31, 2023		December 31, 2022
Lease Equipment	$	110,844	$	106,087
Less: Accumulated depreciation	(14,699)		(11,408)
Lease Equipment - net	$	96,145	$	94,679

Future payments receivable for operating leases commenced as of March 31, 2023 are as follows:

($ in thousands)
Remainder of 2023	$	12,392
2024	9,218
2025	1,051
2026	—
2027	—
Thereafter	—
Total	$	22,661

Revenues from operating leases for the three months ended March 31, 2023 and 2022 were $8.6 million and $5.9 million, respectively.