LEASES

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

LEASES

We adopted ASC 842, Leases, effective January 1, 2019 and elected the modified retrospective transition method. We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets.  

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than twelve months) are expensed as incurred.

We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining

lease terms of 1 year to 14 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense are as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
	(unaudited)		(unaudited)
Operating lease costs	$	6,687	$	7,239
Variable lease costs	1,459		1,276
Finance lease costs:
Amortization of right-of-use assets	194		117
Interest on lease liabilities	88		78
Total lease cost	$	8,428	$	8,710

Other information related to leases are as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Supplemental cash flow information:	(unaudited)		(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,405	$	5,356
Operating cash flows from finance leases	90		80
Financing cash flows from finance leases	162		78
Right-of-use assets obtained in exchange for lease obligations
Operating leases	840		8,172
Finance leases	23		22

Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands):

	March 31, 2022			December 31, 2021
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	56,403		$	60,700
Current portion of operating lease obligations	15,306			16,176
Operating lease obligations (non-current)	45,742			49,221
Finance Leases:
Property, plant and equipment, net	$	4,949		$	5,123
Current portion of long-term debt and finance lease obligations	670			669
Long-term debt and finance lease obligations	4,840			4,980
Weighted average remaining lease term:
Operating leases	6.0 years			6.0 years
Finance leases	10.0 years			10.0 years
Weighted average discount rate:
Operating leases	6.9		%	6.8		%
Finance leases	6.4		%	6.4		%

As of March 31, 2022, we have no material additional operating and finance leases that have not yet commenced.

As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands):

	Operating Leases		Finance Leases
	(unaudited)		(unaudited)
2022 (Remainder of the year)	$	19,540	$	990
2023	15,433		901
2024	12,183		740
2025	8,691		569
2026	6,869		555
Thereafter	18,397		4,003
Total future minimum lease payments	81,113		7,758
Less: Interest	(20,065)		(2,248)
Present value of lease liabilities	$	61,048	$	5,510

Total rent expense resulting from operating leases, including short-term leases, for the quarter ended March 31, 2022 and December 31, 2021 were $20.1 million and $39.4 million, respectively.

LEASES

LEASES

We adopted ASC 842, Leases, effective January 1, 2019 and elected the modified retrospective transition method. We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets.  

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than twelve months) are expensed as incurred.

We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining

lease terms of 1 year to 14 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense are as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
	(unaudited)		(unaudited)
Operating lease costs	$	6,687	$	7,239
Variable lease costs	1,459		1,276
Finance lease costs:
Amortization of right-of-use assets	194		117
Interest on lease liabilities	88		78
Total lease cost	$	8,428	$	8,710

Other information related to leases are as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Supplemental cash flow information:	(unaudited)		(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,405	$	5,356
Operating cash flows from finance leases	90		80
Financing cash flows from finance leases	162		78
Right-of-use assets obtained in exchange for lease obligations
Operating leases	840		8,172
Finance leases	23		22

Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands):

	March 31, 2022			December 31, 2021
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	56,403		$	60,700
Current portion of operating lease obligations	15,306			16,176
Operating lease obligations (non-current)	45,742			49,221
Finance Leases:
Property, plant and equipment, net	$	4,949		$	5,123
Current portion of long-term debt and finance lease obligations	670			669
Long-term debt and finance lease obligations	4,840			4,980
Weighted average remaining lease term:
Operating leases	6.0 years			6.0 years
Finance leases	10.0 years			10.0 years
Weighted average discount rate:
Operating leases	6.9		%	6.8		%
Finance leases	6.4		%	6.4		%

As of March 31, 2022, we have no material additional operating and finance leases that have not yet commenced.

As of March 31, 2022, future minimum lease payments under non-cancellable leases (including short-term leases) are as follows (in thousands):

	Operating Leases		Finance Leases
	(unaudited)		(unaudited)
2022 (Remainder of the year)	$	19,540	$	990
2023	15,433		901
2024	12,183		740
2025	8,691		569
2026	6,869		555
Thereafter	18,397		4,003
Total future minimum lease payments	81,113		7,758
Less: Interest	(20,065)		(2,248)
Present value of lease liabilities	$	61,048	$	5,510

Total rent expense resulting from operating leases, including short-term leases, for the quarter ended March 31, 2022 and December 31, 2021 were $20.1 million and $39.4 million, respectively.