Lease Commitments

12 Months Ended

Dec. 31, 2021

Note 9 — Lease Commitments

The Company recognizes ROU Assets and Lease Liabilities for automobiles, office buildings, IT equipment, and small storage units for the temporary storage of operational equipment. The Company’s leases have remaining lease terms ranging from less than 1 year to 7 years, and have extension options ranging from 1 year to 5 years. Most leases include the option to terminate the lease within 1 year.

Upon adopting ASC 842, the Company made accounting policy elections using practical expedients offered under the guidance to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term, with the cost associated with variable lease payments recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and Lease Liabilities. The value of the Company’s ROU Assets is determined as the non-depreciated fair value of its leasing arrangements and is recorded to Property and Equipment, net on the Company’s Consolidated Balance Sheets. The value of the Company’s Lease Liabilities is the present value of fixed lease payments not yet paid, discounted using either the rate implicit in the lease contract if that rate can be determined, or the Company’s incremental borrowing rate (“IBR”). As of December 31, 2021 and 2020, the Company’s short-term portion of lease obligations were $6.5 million and $5.3 million, respectively, and are recorded in Other accrued expenses with the remaining balance recognized under the Lease liability — long-term portion captions on the Company’s Consolidated Balance Sheets. Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company’s ROU Assets or Lease Liabilities. The Company’s IBR is determined as the rate of interest that the Company would incur to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Components of lease expense required by ASC 842 are presented below for the years ended December 31, 2021, 2020 and 2019.


	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Lease cost
Operating lease cost	$	6,210	$	5,381	$	4,699
Short-term lease cost	747		738		830
Variable lease cost	973		464		591
Total lease cost	$	7,930	$	6,583	$	6,120

Supplemental information required by ASC 842 is presented below for the years ended December 31, 2021, 2020 and 2019.


	Year Ended December 31,
	2021			2020			2019
	(dollar amounts in thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	6,609		$	5,690		$	4,908
ROU Assets obtained in exchange for lease obligations1	$	7,143		5,410			21,366
Weighted-average remaining lease term — operating leases	4.5 years			5.4 years			6.2 years
Weighted-average discount rate — operating leases	4.2		%	4.5		%	4.7		%

1.ROU Assets obtained in exchange for lease obligations for the year ended December 31, 2019 includes the amount initially capitalized in conjunction with the adoption of ASC 842.

During the years ended December 31, 2021 and 2020, the Company’s ROU Assets and Lease Liabilities were reduced by $0.8 million and $0.6 million, respectively due to lease cancellations.

The following is a schedule by calendar year of future minimum lease payments under operating leases that have remaining terms as of December 31, 2021:


Period/Year	Operating Leases
	(in thousands)
2022	6,470
2023	4,822
2024	2,699
2025	1,311
2026	1,337
Thereafter	2,867
Total minimum lease payments	$	19,506
Less: imputed lease payments	$	1,702
Present value of lease liabilities	$	17,804