Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Lessee, Operating Leases

LEASESWe have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. We have finance leases for certain facility storage tanks and equipment rentals. Our leases have remaining lease terms ranging from 1 to 12 years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. The office space, warehouse space, operating location leases, and machinery and equipment leases generally require us to pay all maintenance and insurance costs.

Our corporate headquarters facility located in The Woodlands, Texas, was sold on December 31, 2012, pursuant to a sale and leaseback transaction. As a condition to the completion of the purchase and sale of the facility, the parties entered into a lease agreement for the facility having an initial lease term of 15 years, which is classified as an operating lease. Under the terms of the lease agreement, we have the ability to extend the lease for five successive five-year periods at base rental rates to be determined at the time of each extension.

Components of lease expense, included in either cost of revenues or general and administrative expense based on the use of the underlying asset, are as follows (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):

	Year Ended December 31,
	2022		2021		2020
	(In Thousands)
Operating lease expense	$	12,603	$	12,905	$	13,946
Short-term lease expense	39,890		22,055		17,125
Finance lease cost:
Amortization of right-of-use assets	177		—		—
Interest on finance leases	135		—		—
Total lease expense	$	52,805	$	34,960	$	31,071

For the years ended December 31, 2022, 2021, and 2020, we recognized sublease income of $1.4 million, $1.0 million, and $1.0 million, respectively. Variable rent expense was not material. At December 31, 2022, future minimum rental receipts under non-cancelable subleases for office space in two of our locations totaled $3.7 million.

Supplemental cash flow information:

	Year Ended December 31,
	2022		2021		2020
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	12,889	$	12,962	$	13,612
Operating cash flows - finance leases	$	135	$	—	$	—
Financing cash flows - finance leases	$	1,302	$	—	$	—
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	5,524	$	3,168	$	5,612
Finance leases	$	3,261	$	—	$	—

Supplemental balance sheet information:

	December 31, 2022		December 31, 2021
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	33,818	$	36,973
Operating lease liabilities, current portion	7,795		8,108
Operating lease liabilities	28,108		31,429
Total operating lease liabilities	$	35,903	$	39,537
Finance leases:
Finance lease right-of-use assets	$	2,834	$	—
Finance lease liabilities, current portion	1,332		—
Finance lease liabilities	464		—
Total finance lease liabilities	$	1,796	$	—

Additional operating lease information:

	December 31, 2022		December 31, 2021
Weighted average remaining lease term:
Operating leases	5.8 years		6.4 years
Finance leases	1.3 years		0.0 years
Weighted average discount rate:
Operating leases	9.7	%	9.7	%
Finance leases	9.3	%	—	%

Future minimum lease payments by year and in the aggregate, under non-cancelable operating and finance leases with terms in excess of one year consist of the following at December 31, 2022:

	Operating Leases		Finance Leases
	(In Thousands)
2023	$	10,562	$	1,435
2024	8,769		475
2025	6,908		—
2026	6,796		—
2027	6,199		—
Thereafter	8,243		—
Total lease payments	47,477		1,910
Less imputed interest	(11,574)		(114)
Total lease liabilities	$	35,903	$	1,796

Lessee, Finance Leases

LEASESWe have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. We have finance leases for certain facility storage tanks and equipment rentals. Our leases have remaining lease terms ranging from 1 to 12 years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. The office space, warehouse space, operating location leases, and machinery and equipment leases generally require us to pay all maintenance and insurance costs.

Our corporate headquarters facility located in The Woodlands, Texas, was sold on December 31, 2012, pursuant to a sale and leaseback transaction. As a condition to the completion of the purchase and sale of the facility, the parties entered into a lease agreement for the facility having an initial lease term of 15 years, which is classified as an operating lease. Under the terms of the lease agreement, we have the ability to extend the lease for five successive five-year periods at base rental rates to be determined at the time of each extension.

Components of lease expense, included in either cost of revenues or general and administrative expense based on the use of the underlying asset, are as follows (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):

	Year Ended December 31,
	2022		2021		2020
	(In Thousands)
Operating lease expense	$	12,603	$	12,905	$	13,946
Short-term lease expense	39,890		22,055		17,125
Finance lease cost:
Amortization of right-of-use assets	177		—		—
Interest on finance leases	135		—		—
Total lease expense	$	52,805	$	34,960	$	31,071

For the years ended December 31, 2022, 2021, and 2020, we recognized sublease income of $1.4 million, $1.0 million, and $1.0 million, respectively. Variable rent expense was not material. At December 31, 2022, future minimum rental receipts under non-cancelable subleases for office space in two of our locations totaled $3.7 million.

Supplemental cash flow information:

	Year Ended December 31,
	2022		2021		2020
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	12,889	$	12,962	$	13,612
Operating cash flows - finance leases	$	135	$	—	$	—
Financing cash flows - finance leases	$	1,302	$	—	$	—
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	5,524	$	3,168	$	5,612
Finance leases	$	3,261	$	—	$	—

Supplemental balance sheet information:

	December 31, 2022		December 31, 2021
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	33,818	$	36,973
Operating lease liabilities, current portion	7,795		8,108
Operating lease liabilities	28,108		31,429
Total operating lease liabilities	$	35,903	$	39,537
Finance leases:
Finance lease right-of-use assets	$	2,834	$	—
Finance lease liabilities, current portion	1,332		—
Finance lease liabilities	464		—
Total finance lease liabilities	$	1,796	$	—

Additional operating lease information:

	December 31, 2022		December 31, 2021
Weighted average remaining lease term:
Operating leases	5.8 years		6.4 years
Finance leases	1.3 years		0.0 years
Weighted average discount rate:
Operating leases	9.7	%	9.7	%
Finance leases	9.3	%	—	%

Future minimum lease payments by year and in the aggregate, under non-cancelable operating and finance leases with terms in excess of one year consist of the following at December 31, 2022:

	Operating Leases		Finance Leases
	(In Thousands)
2023	$	10,562	$	1,435
2024	8,769		475
2025	6,908		—
2026	6,796		—
2027	6,199		—
Thereafter	8,243		—
Total lease payments	47,477		1,910
Less imputed interest	(11,574)		(114)
Total lease liabilities	$	35,903	$	1,796