Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	4,906	$	5,739
Interest expense	520		639
Operating lease cost	6,638		7,747
Short-term lease cost	1,894		329
Sublease income	(265)		(475)
Total lease cost	$	13,693	$	13,979

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	520	$	639
Operating cash flows from operating leases	5,398		6,875
Financing cash flows from finance leases	5,205		5,317
Total	$	11,123	$	12,831
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	5,342	$	1,329
Finance leases	9,941		2,973
Total	$	15,283	$	4,302

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2021:

	Operating		Finance
2022	$	5,506	$	5,269
2023	4,721		3,848
2024	3,932		2,320
2025	3,069		30
2026	2,134		—
Thereafter	5,269		—
Total undiscounted lease payments	24,631		11,467
Less: effects of discounting	(2,101)		(789)
Present value of lease payments	$	22,530	$	10,678

The following represents the average lease terms and discount rates for our operating and finance lease portfolio as of December 31, 2021:

	Year ended December 31,
	2021		2020
Weighted average remaining lease term:
Finance leases	2.1	years	1.6	years
Operating leases	5.8	years	6.6	years
Weighted average discount rate
Finance leases	8.58	%	10.78	%
Operating leases	3.01	%	3.52	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	4,906	$	5,739
Interest expense	520		639
Operating lease cost	6,638		7,747
Short-term lease cost	1,894		329
Sublease income	(265)		(475)
Total lease cost	$	13,693	$	13,979

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	520	$	639
Operating cash flows from operating leases	5,398		6,875
Financing cash flows from finance leases	5,205		5,317
Total	$	11,123	$	12,831
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	5,342	$	1,329
Finance leases	9,941		2,973
Total	$	15,283	$	4,302

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2021:

	Operating		Finance
2022	$	5,506	$	5,269
2023	4,721		3,848
2024	3,932		2,320
2025	3,069		30
2026	2,134		—
Thereafter	5,269		—
Total undiscounted lease payments	24,631		11,467
Less: effects of discounting	(2,101)		(789)
Present value of lease payments	$	22,530	$	10,678

The following represents the average lease terms and discount rates for our operating and finance lease portfolio as of December 31, 2021:

	Year ended December 31,
	2021		2020
Weighted average remaining lease term:
Finance leases	2.1	years	1.6	years
Operating leases	5.8	years	6.6	years
Weighted average discount rate
Finance leases	8.58	%	10.78	%
Operating leases	3.01	%	3.52	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.

Leases

LeasesWe lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, we use our incremental borrowing rate based on the information available at the commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of twelve months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.

The following are the components of operating and finance lease costs:

	Year Ended December 31,
	2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	4,906	$	5,739
Interest expense	520		639
Operating lease cost	6,638		7,747
Short-term lease cost	1,894		329
Sublease income	(265)		(475)
Total lease cost	$	13,693	$	13,979

The following is supplemental cash flow information for our operating and finance leases:

	Year Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	520	$	639
Operating cash flows from operating leases	5,398		6,875
Financing cash flows from finance leases	5,205		5,317
Total	$	11,123	$	12,831
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases	$	5,342	$	1,329
Finance leases	9,941		2,973
Total	$	15,283	$	4,302

The following is the aggregate future lease payments for operating and finance leases as of December 31, 2021:

	Operating		Finance
2022	$	5,506	$	5,269
2023	4,721		3,848
2024	3,932		2,320
2025	3,069		30
2026	2,134		—
Thereafter	5,269		—
Total undiscounted lease payments	24,631		11,467
Less: effects of discounting	(2,101)		(789)
Present value of lease payments	$	22,530	$	10,678

The following represents the average lease terms and discount rates for our operating and finance lease portfolio as of December 31, 2021:

	Year ended December 31,
	2021		2020
Weighted average remaining lease term:
Finance leases	2.1	years	1.6	years
Operating leases	5.8	years	6.6	years
Weighted average discount rate
Finance leases	8.58	%	10.78	%
Operating leases	3.01	%	3.52	%

As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 7 for disaggregation of revenue.