LEASES

3 Months Ended

Mar. 31, 2023

NOTE 14 — LEASES

Our Driftwood Project land leases are classified as finance leases and include one or more options to extend the lease term for up to 40 years, as well as to terminate the lease within five years, at our sole discretion. We are reasonably certain that those options will be exercised and that our termination rights will not be exercised, and we have, therefore, included those assumptions within our right of use assets and corresponding lease liabilities. Our other land leases are classified as finance leases and include one or more options to extend the lease term for up to 69 years or to terminate the lease within seven years, at our sole discretion. We are reasonably certain that those options and termination rights will not be exercised, and we have, therefore, excluded those assumptions within our right of use assets and corresponding lease liabilities.

Our office space leases are classified as operating leases and include one or more options to extend the lease term up to 10 years, at our sole discretion. As we are not reasonably certain that those options will be exercised, none are recognized as part of our right of use assets and lease liabilities. As none of our leases provide an implicit rate, we have determined our own discount rate.

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheets (in thousands):


Leases	Condensed Consolidated Balance Sheets Classification	March 31, 2023		December 31, 2022
Right of use asset
Operating	Other non-current assets	$	12,661	$	13,303
Finance	Property, plant and equipment, net	128,977		56,708
Total leased assets		$	141,638	$	70,011
Liabilities
Current
Operating	Accrued and other liabilities	$	2,880	$	2,734
Finance	Accrued and other liabilities	827		140
Non-current
Operating	Other non-current liabilities	11,375		12,148
Finance	Finance lease liabilities	122,112		49,963
Total leased liabilities		$	137,194	$	64,985

Lease costs recognized in our Condensed Consolidated Statements of Operations is summarized as follows (in thousands):


	Three months ended
Lease Costs	2023		2022
Operating lease cost	$	869	$	685
Finance lease cost
Amortization of lease assets	709		294
Interest on lease liabilities	1,948		994
Finance lease cost	$	2,657	$	1,288
Total lease cost	$	3,526	$	1,973

Other information about lease amounts recognized in our Condensed Consolidated Financial Statements is as follows:


	December 31,
Lease term and discount rate	2023		2022
Weighted average remaining lease term (years)
Operating lease	4.3		4.5
Finance lease	36.8		48.4
Weighted average discount rate
Operating lease	6.2	%	6.2	%
Finance lease	8.6	%	9.4	%

The following table includes other quantitative information for our operating and finance leases (in thousands):


	Three months ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	974	$	743
Operating cash flows from finance leases	$	807	$	—
Financing cash flows from finance leases	$	—	$	—

The table below presents a maturity analysis of our lease liability on an undiscounted basis and reconciles those amounts to the present value of the lease liability as of March 31, 2023 (in thousands):


	Operating		Finance
2023	$	2,728	$	7,869
2024	3,850		10,491
2025	3,893		10,491
2026	3,914		10,491
2027	1,666		10,491
After 2027	275		332,826
Total lease payments	$	16,326	$	382,659
Less: discount	2,071		259,721
Present value of lease liability	$	14,255	$	122,938

Leases

NOTE 14 — LEASES

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheets (in thousands):


Leases	Condensed Consolidated Balance Sheets Classification	March 31, 2023		December 31, 2022
Right of use asset
Operating	Other non-current assets	$	12,661	$	13,303
Finance	Property, plant and equipment, net	128,977		56,708
Total leased assets		$	141,638	$	70,011
Liabilities
Current
Operating	Accrued and other liabilities	$	2,880	$	2,734
Finance	Accrued and other liabilities	827		140
Non-current
Operating	Other non-current liabilities	11,375		12,148
Finance	Finance lease liabilities	122,112		49,963
Total leased liabilities		$	137,194	$	64,985

Lease costs recognized in our Condensed Consolidated Statements of Operations is summarized as follows (in thousands):


	Three months ended
Lease Costs	2023		2022
Operating lease cost	$	869	$	685
Finance lease cost
Amortization of lease assets	709		294
Interest on lease liabilities	1,948		994
Finance lease cost	$	2,657	$	1,288
Total lease cost	$	3,526	$	1,973

Other information about lease amounts recognized in our Condensed Consolidated Financial Statements is as follows:


	December 31,
Lease term and discount rate	2023		2022
Weighted average remaining lease term (years)
Operating lease	4.3		4.5
Finance lease	36.8		48.4
Weighted average discount rate
Operating lease	6.2	%	6.2	%
Finance lease	8.6	%	9.4	%

The following table includes other quantitative information for our operating and finance leases (in thousands):


	Three months ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	974	$	743
Operating cash flows from finance leases	$	807	$	—
Financing cash flows from finance leases	$	—	$	—


	Operating		Finance
2023	$	2,728	$	7,869
2024	3,850		10,491
2025	3,893		10,491
2026	3,914		10,491
2027	1,666		10,491
After 2027	275		332,826
Total lease payments	$	16,326	$	382,659
Less: discount	2,071		259,721
Present value of lease liability	$	14,255	$	122,938