LEASES

3 Months Ended

Mar. 31, 2023

LEASES

LEASES

16. LEASES

Lessee

At March 31, 2023, the Company recorded $22.5 million as a right of use asset and $23.8 million as a lease liability. At December 31, 2022, the Company recorded $22.1 million as a right of use asset and $23.6 million as a lease liability. The Company assesses its right of use asset and other lease-related assets for impairment. There were no impairments recorded related to these assets during the three months ended March 31, 2023 and the year ended December 31, 2022.

The Company reviews all supplier, vendor, and service provider contracts to determine whether any service arrangements contain a lease component. The Company identified two service agreements that contain an embedded lease. The agreements do not contain fixed or minimum payments, and the variable lease expense was immaterial during the three months ended March 31, 2023 and 2022.

Information about other lease-related balances is as follows (in thousands):

	Three Months Ended March 31,
	2023			2022
Lease cost
Operating lease cost	$	1,501		$	1,460
Short‑term lease cost		55			70
Variable lease cost		34			61
Finance lease cost		23			19
Total lease cost	$	1,613		$	1,610
Other Information
Operating cash flows used in operating leases	$	1,730		$	1,464
Operating cash flows used in finance leases		21			21
Weighted‑average remaining lease term—operating leases (years)		5.0			3.5
Weighted‑average remaining lease term—finance leases (years)		7.1			7.6
Weighted‑average discount rate—operating leases		4.5	%		3.9	%
Weighted‑average discount rate—finance leases		3.1	%		1.5	%

The rate implicit in the lease is not readily determinable in most of the Company’s leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease.

Future minimum lease payments under noncancelable operating leases, including immaterial future minimum lease payments under finance leases, at March 31, 2023, are as follows (in thousands):

	Operating Leases		Finance Leases
2023	$	5,285	$	62
2024		5,505		78
2025		4,721		77
2026		3,796		77
2027		3,505		77
2028 and after		2,966		317
Total lease payments		25,778		688
Less amount representing interest		(2,598)		(83)
Total lease liability		23,180		605
Less current portion of lease liability		(6,042)		(64)
Lease liability, net of current portion	$	17,138	$	541

In February 2022, the Company amended its existing facility lease for the ExOne European headquarters and operating facility in Gersthofen, Germany, extending the lease term set to expire in December 2022 through December 2027, with the option to extend for two additional five-year extension periods. The rent is fixed through December 31, 2024, for an aggregate annual rent totaling $1.7 million, plus applicable taxes and is subject to adjustment on an annual basis thereafter (in accordance with the consumer price index for Germany) through December 31, 2027.