Leases

9 Months Ended

Sep. 30, 2022

LEASES

The Company as a Lessor:

The Company leases a building in Elma, Washington that is subleased by the Company to a third party. This sublease is classified as a finance lease with a long term lease receivable balance of $5.9 million and $6.7 million and a short term lease receivable balance of $3.8 million and $3.6 million as of September 30, 2022 and December 31, 2021, respectively. This lease generated $0.6 million and $0.7 million in real estate income for the three months ended September 30, 2022 and 2021, respectively. This lease generated $2.0 million and $2.1 million in real estate income for the nine months ended September 30, 2022 and 2021, respectively.

The Company owned buildings in Olympia, Washington that were leased to a third party. This lease was classified as a finance lease. On December 17, 2020, the Company sold the Olympia building and other assets as part of a sale and leaseback transaction and this lease was cancelled. The Company applied ASC 842 to a new sublease to the same third party and classified the new sublease as an operating lease. The lease receivable was sold to the purchaser of the assets as part of the sale and leaseback transaction. This lease generated $2.3 million and $2.1 million in real estate income for the three months ended September 30, 2022 and 2021, respectively. This lease generated $6.8 million and $6.3 million in real estate income for the nine months ended September 30, 2022 and 2021, respectively.

The following table summarizes changes in the Company’s lease receivables:


	September 30, 2022		December 31, 2021
Balance, beginning of the year	$	10,378	$	11,045
Interest	2,029		2,783
Lease payments received	(2,700)		(3,450)
Balance, end of the period	9,707		$	10,378
Less current portion	(3,765)		(3,630)
Long-term lease receivables	$	5,942	$	6,748

In addition to these agreements, the Company recorded additional real estate income of $0.5 million on various subleases for the nine months ending September 30, 2022.