Leases

12 Months Ended

Dec. 31, 2022

Lessee Disclosure [Abstract]

Leases

Leases

We are generally the lessee in our lease transactions. Lessees are required to recognize a lease liability and a right of use (ROU) asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term, using the rate implicit in the lease. If that rate is not readily determinable, the rate is based on the Company’s incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. Our ROU assets include the values associated with the additional periods when it is reasonably certain that we will exercise the option. We review the carrying value of ROU assets for impairment whenever events and circumstances indicate that the carrying value of an asset group may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

We have entered into operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment. Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:

	For the years ended
(in thousands)	December 31, 2022		December 31, 2021		December 31, 2020
Finance lease
Amortization of right-of-use asset	$	416	$	997	$	1,056
Interest on lease liabilities	529		1,353		1,475
Operating lease
Fixed lease cost	6,036		5,283		5,448
Variable lease cost	438		(259)		314
Short-term lease cost	1,025		1,037		996
Total lease expense	$	8,444	$	8,411	$	9,289

Supplemental cash flow information related to leases was as follows:

	For the years ended
(in thousands)	December 31, 2022		December 31, 2021		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	6,612	$	5,233	$	5,300
Operating cash outflows from finance leases	529		1,353		1,475
Financing cash outflows from finance leases	654		1,438		7,214
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	38,559	$	2,189	$	4,017
Finance leases	—		—		—

The initial recognition of each ROU asset and lease liability at lease commencement is a noncash transaction that is excluded from amounts reported in the Consolidated Statements of Cash Flows.

In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets. Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.

Supplemental balance sheet information related to leases was as follows:

(in thousands)	December 31, 2022		December 31, 2021
Operating leases
Right of use assets included in Other assets	$	48,475	$	14,366
Lease liabilities included in
Accrued liabilities	$	5,929	$	3,730
Other noncurrent liabilities	50,190		11,001
Total operating lease liabilities	$	56,119	$	14,731
Finance leases
Right-of-use assets included in Property, plant and equipment, net	$	—	$	7,979
Lease liabilities included in
Accrued liabilities	$	—	$	1,606
Other noncurrent liabilities	—		14,515
Total finance lease liabilities	$	—	$	16,121

Additional information for leases existing at December 31, 2022 and 2021 was as follows:

	December 31, 2022		December 31, 2021
Weighted average remaining lease term
Operating leases	11 years		6 years
Finance leases	0 years		8 years
Weighted average discount rate
Operating leases	5.3	%	4.4	%
Finance leases	—		8.0	%

Maturities of lease liabilities as of December 31, 2022 were as follows:

(in thousands)	Operating leases
Year ending December 31,
2023	$	8,734
2024	7,586
2025	6,970
2026	6,985
2027	6,775
Thereafter	36,834
Total lease payments	73,884
Less imputed interest	(17,765)
Total	$	56,119

Maturities of lease liabilities as of December 31, 2021 were as follows:

(in thousands)	Operating leases		Finance leases
Year ending December 31,
2022	$	4,737	$	2,838
2023	3,412		3,004
2024	2,199		3,004
2025	1,801		3,004
2026	1,782		3,004
Thereafter	2,789		6,501
Total lease payments	16,720		21,355
Less imputed interest	(1,989)		(5,234)
Total	$	14,731	$	16,121

Leases

Leases

We are generally the lessee in our lease transactions. Lessees are required to recognize a lease liability and a right of use (ROU) asset for leases with terms greater than 12 months, in accordance with the practical expedient that is available for ongoing accounting.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term, using the rate implicit in the lease. If that rate is not readily determinable, the rate is based on the Company’s incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease. Our ROU assets include the values associated with the additional periods when it is reasonably certain that we will exercise the option. We review the carrying value of ROU assets for impairment whenever events and circumstances indicate that the carrying value of an asset group may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

We have entered into operating and finance leases for offices, manufacturing facilities, warehouses, vehicles, and certain equipment. Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:

	For the years ended
(in thousands)	December 31, 2022		December 31, 2021		December 31, 2020
Finance lease
Amortization of right-of-use asset	$	416	$	997	$	1,056
Interest on lease liabilities	529		1,353		1,475
Operating lease
Fixed lease cost	6,036		5,283		5,448
Variable lease cost	438		(259)		314
Short-term lease cost	1,025		1,037		996
Total lease expense	$	8,444	$	8,411	$	9,289

Supplemental cash flow information related to leases was as follows:

	For the years ended
(in thousands)	December 31, 2022		December 31, 2021		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	6,612	$	5,233	$	5,300
Operating cash outflows from finance leases	529		1,353		1,475
Financing cash outflows from finance leases	654		1,438		7,214
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	38,559	$	2,189	$	4,017
Finance leases	—		—		—

The initial recognition of each ROU asset and lease liability at lease commencement is a noncash transaction that is excluded from amounts reported in the Consolidated Statements of Cash Flows.

In 2022, the Company extended the lease of its primary manufacturing facility in Salt Lake City, Utah, which resulted in a lease classification change from Finance to Operating and included a non-cash increase of $37.1 million to both Other assets and to Other noncurrent liabilities in the Consolidated Balance Sheets. Due to the non-cash nature of the transaction, those increases are excluded from amounts reported in the Consolidated Statements of Cash Flows.

Supplemental balance sheet information related to leases was as follows:

(in thousands)	December 31, 2022		December 31, 2021
Operating leases
Right of use assets included in Other assets	$	48,475	$	14,366
Lease liabilities included in
Accrued liabilities	$	5,929	$	3,730
Other noncurrent liabilities	50,190		11,001
Total operating lease liabilities	$	56,119	$	14,731
Finance leases
Right-of-use assets included in Property, plant and equipment, net	$	—	$	7,979
Lease liabilities included in
Accrued liabilities	$	—	$	1,606
Other noncurrent liabilities	—		14,515
Total finance lease liabilities	$	—	$	16,121

Additional information for leases existing at December 31, 2022 and 2021 was as follows:

	December 31, 2022		December 31, 2021
Weighted average remaining lease term
Operating leases	11 years		6 years
Finance leases	0 years		8 years
Weighted average discount rate
Operating leases	5.3	%	4.4	%
Finance leases	—		8.0	%

Maturities of lease liabilities as of December 31, 2022 were as follows:

(in thousands)	Operating leases
Year ending December 31,
2023	$	8,734
2024	7,586
2025	6,970
2026	6,985
2027	6,775
Thereafter	36,834
Total lease payments	73,884
Less imputed interest	(17,765)
Total	$	56,119

Maturities of lease liabilities as of December 31, 2021 were as follows:

(in thousands)	Operating leases		Finance leases
Year ending December 31,
2022	$	4,737	$	2,838
2023	3,412		3,004
2024	2,199		3,004
2025	1,801		3,004
2026	1,782		3,004
Thereafter	2,789		6,501
Total lease payments	16,720		21,355
Less imputed interest	(1,989)		(5,234)
Total	$	14,731	$	16,121