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Leases

9 Months Ended

Sep. 30, 2024

Note 7 — Leases

Operating Leases

The Company has operating leases, primarily for real estate and equipment, with terms that vary from one to nine years, included in operating lease costs in the table below. The operating leases are included in Short-term lease liability and Long-term lease liability in the Condensed Consolidated Balance Sheets.

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and nine months ended September 30, 2024 and 2023, are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024			2023
Short-term lease costs	$	3.5	$	3.4	$	9.6		$	13.0
Operating lease costs	$	0.8	$	0.8	$	2.4		$	2.4
Operating cash outflows from operating leases	$	0.8	$	0.7	$	2.4		$	2.3

Weighted average remaining lease term					2.9 years			4.7 years
Weighted average discount rate					8.1		%	7.9		%

As of September 30, 2024, aggregate future minimum lease payments under operating leases are as follows (in millions):


For the twelve months ending September 30,	Total
2025	$	3.4
2026	3.1
2027	2.4
2028	0.4
2029	0.1

Total future minimum lease payments	9.4
Less: amount representing interest	(1.1)
Present value of future minimum lease payments	8.3
Less: current portion of operating lease obligations	(2.8)
Long-term portion of operating lease obligations	$	5.5

Finance Leases

The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three to five years. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. The finance leases are included in Property and equipment, net, Short-term lease liability and Long-term lease liability in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the three and nine months ended September 30, 2024 and 2023, are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024			2023
Amortization of finance leases	$	1.5	$	1.0	$	4.2		$	2.7
Interest on lease liabilities	$	0.6	$	0.5	$	1.7		$	1.1
Financing cash outflows from finance leases	$	1.6	$	1.3	$	4.2		$	4.0

Weighted average remaining lease term					2.2 years			2.1 years
Weighted average discount rate					6.5		%	5.2		%

As of September 30, 2024, aggregate future minimum lease payments under finance leases are as follows (in millions):


For the twelve months ending September 30,	Total
2025	$	6.6
2026	4.4
2027	3.4
2028	0.8


Total future minimum lease payments	15.2
Less: amount representing interest and fees	(2.0)
Present value of future minimum lease payments	13.2
Less: current portion of finance lease obligations	(5.4)
Long-term portion of finance lease obligations	$	7.8

Note 8 — Other Financing Liabilities

The Company has sale, lease-back agreements for land and certain other fixed assets with terms that vary from 18 months to 13 years. The sales did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded. The net book value of the assets remained in Property and equipment, net and are depreciating over their original useful lives.

As of September 30, 2024, aggregate future lease payments of the financing liabilities are as follows (in millions):


For the twelve months ending September 30,	Total
2025	$	0.7
2026	0.7
2027	0.8
2028	0.8
2029	0.9
Thereafter	7.3
Total future minimum lease payments	$	11.2

Leases