LEASES

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,035	$	6,784	$	19,056	$	21,044
Variable lease costs	1,057		1,503		3,958		4,106
Finance lease costs:
Amortization of right-of-use assets	237		155		498		467
Interest on lease liabilities	143		84		269		252
Total lease cost	7,472		8,526		23,781		25,869
Lease cost - discontinued operations	$	126	$	(472)	$	(785)	$	(1,169)
Lease cost - continuing operations	$	7,598	$	8,054	$	22,996	$	24,700

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Supplemental cash flow information:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,934	$	6,226	$	15,434	$	17,569
Operating cash flows from finance leases	89		81		204		252
Financing cash flows from finance leases	295		119		615		356
Right-of-use assets obtained in exchange for lease obligations
Operating leases	1,343		721		2,697		9,304
Finance leases	752		611		852		1,017

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

	September 30, 2022			December 31, 2021
Operating Leases:	(unaudited)
Operating lease right-of-use assets, continuing operations	$	48,189		$	58,495
Operating lease right-of-use assets, discontinued operations	1,872			2,205
Current portion of operating lease obligations, continuing operations	13,328			15,412
Current portion of operating lease obligations, discontinued operations	812			764
Operating lease obligations (non-current), continuing operations	39,144			47,617
Operating lease obligations (non-current), discontinued operations	1,000			1,604
Finance Leases:
Finance lease right-of-use assets, continuing operations	$	4,909		$	5,114
Finance lease right-of-use assets, discontinued operations	6			9
Current portion of finance lease obligations, continuing operations	898			667
Current portion of finance lease obligations, discontinued operations	2			2
Long-term finance lease obligations, continuing operations	4,810			4,973
Long-term finance lease obligations, discontinued operations	4			7
Weighted average remaining lease term:
Operating leases	5.8 years			6.0 years
Finance leases	9.1 years			10.0 years
Weighted average discount rate:
Operating leases	7.1		%	6.8		%
Finance leases	7.0		%	6.4		%

As of September 30, 2022, we have no material additional operating and finance leases that have not yet commenced. As of September 30, 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)	$	5,774	$	424
2023	15,146		1,197
2024	12,058		954
2025	8,711		667
2026	6,654		608
Thereafter	17,553		3,925
Total future minimum lease payments	65,896		7,775
Less: Interest	13,424		2,067
Present value of lease liabilities	$	52,472	$	5,708

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,035	$	6,784	$	19,056	$	21,044
Variable lease costs	1,057		1,503		3,958		4,106
Finance lease costs:
Amortization of right-of-use assets	237		155		498		467
Interest on lease liabilities	143		84		269		252
Total lease cost	7,472		8,526		23,781		25,869
Lease cost - discontinued operations	$	126	$	(472)	$	(785)	$	(1,169)
Lease cost - continuing operations	$	7,598	$	8,054	$	22,996	$	24,700

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Supplemental cash flow information:	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,934	$	6,226	$	15,434	$	17,569
Operating cash flows from finance leases	89		81		204		252
Financing cash flows from finance leases	295		119		615		356
Right-of-use assets obtained in exchange for lease obligations
Operating leases	1,343		721		2,697		9,304
Finance leases	752		611		852		1,017

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

	September 30, 2022			December 31, 2021
Operating Leases:	(unaudited)
Operating lease right-of-use assets, continuing operations	$	48,189		$	58,495
Operating lease right-of-use assets, discontinued operations	1,872			2,205
Current portion of operating lease obligations, continuing operations	13,328			15,412
Current portion of operating lease obligations, discontinued operations	812			764
Operating lease obligations (non-current), continuing operations	39,144			47,617
Operating lease obligations (non-current), discontinued operations	1,000			1,604
Finance Leases:
Finance lease right-of-use assets, continuing operations	$	4,909		$	5,114
Finance lease right-of-use assets, discontinued operations	6			9
Current portion of finance lease obligations, continuing operations	898			667
Current portion of finance lease obligations, discontinued operations	2			2
Long-term finance lease obligations, continuing operations	4,810			4,973
Long-term finance lease obligations, discontinued operations	4			7
Weighted average remaining lease term:
Operating leases	5.8 years			6.0 years
Finance leases	9.1 years			10.0 years
Weighted average discount rate:
Operating leases	7.1		%	6.8		%
Finance leases	7.0		%	6.4		%

As of September 30, 2022, we have no material additional operating and finance leases that have not yet commenced. As of September 30, 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)	$	5,774	$	424
2023	15,146		1,197
2024	12,058		954
2025	8,711		667
2026	6,654		608
Thereafter	17,553		3,925
Total future minimum lease payments	65,896		7,775
Less: Interest	13,424		2,067
Present value of lease liabilities	$	52,472	$	5,708