Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Lessee, Operating Leases

LEASES

We 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 11 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,
	2023		2022		2021
	(In Thousands)
Operating lease expense	$	13,053	$	12,603	$	12,905
Short-term lease expense	46,566		39,890		22,055
Finance lease cost:
Amortization of right-of-use assets	232		177		—
Interest on finance leases	112		135		—
Total lease expense	$	59,963	$	52,805	$	34,960

Supplemental cash flow information:

	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	13,293	$	12,889	$	12,962
Operating cash flows - finance leases	$	112	$	135	$	—
Financing cash flows - finance leases	$	1,695	$	1,302	$	—
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	10,058	$	5,524	$	5,612
Finance leases	$	2,555	$	3,261	$	—

Supplemental balance sheet information:

	December 31, 2023		December 31, 2022
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	31,915	$	33,818
Operating lease liabilities, current portion	9,101		7,795
Operating lease liabilities	27,538		28,108
Total operating lease liabilities	$	36,639	$	35,903
Finance leases:
Finance lease right-of-use assets	$	2,494	$	2,834
Finance lease liabilities, current portion	828		1,332
Finance lease liabilities	1,828		464
Total finance lease liabilities	$	2,656	$	1,796

Additional operating lease information:

	December 31, 2023		December 31, 2022
Weighted average remaining lease term:
Operating leases	5.0 years		5.8 years
Finance leases	2.5 years		1.3 years
Weighted average discount rate:
Operating leases	9.7	%	9.7	%
Finance leases	9.3	%	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, 2023:

	Operating Leases		Finance Leases
	(In Thousands)
2024	$	11,788	$	1,040
2025	9,383		1,615
2026	8,899		144
2027	7,812		142
2028	2,293		92
Thereafter	6,590		15
Total lease payments	46,765		3,048
Less imputed interest	(10,126)		(392)
Total lease liabilities	$	36,639	$	2,656

The Company has subleases for a portion of its corporate headquarters facility and a facility in Europe. The leases and subleases are considered operating leases. For the years ended December 31, 2023, 2022, and 2021,

we recognized sublease income of $1.2 million, $1.4 million, and $1.0 million, respectively. Future minimum sublease payments under non-cancelable subleases for two of our facilities were as follows at December 31, 2023:

	Sublease Payments
	(In Thousands)
2024	$	1,376
2025	1,616
2026	1,415
2027	1,377
2028	923
Thereafter	4,158
Total sublease payments	$	10,865

Lessee, Finance Leases

LEASES

We 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 11 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,
	2023		2022		2021
	(In Thousands)
Operating lease expense	$	13,053	$	12,603	$	12,905
Short-term lease expense	46,566		39,890		22,055
Finance lease cost:
Amortization of right-of-use assets	232		177		—
Interest on finance leases	112		135		—
Total lease expense	$	59,963	$	52,805	$	34,960

Supplemental cash flow information:

	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	13,293	$	12,889	$	12,962
Operating cash flows - finance leases	$	112	$	135	$	—
Financing cash flows - finance leases	$	1,695	$	1,302	$	—
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	10,058	$	5,524	$	5,612
Finance leases	$	2,555	$	3,261	$	—

Supplemental balance sheet information:

	December 31, 2023		December 31, 2022
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	31,915	$	33,818
Operating lease liabilities, current portion	9,101		7,795
Operating lease liabilities	27,538		28,108
Total operating lease liabilities	$	36,639	$	35,903
Finance leases:
Finance lease right-of-use assets	$	2,494	$	2,834
Finance lease liabilities, current portion	828		1,332
Finance lease liabilities	1,828		464
Total finance lease liabilities	$	2,656	$	1,796

Additional operating lease information:

	December 31, 2023		December 31, 2022
Weighted average remaining lease term:
Operating leases	5.0 years		5.8 years
Finance leases	2.5 years		1.3 years
Weighted average discount rate:
Operating leases	9.7	%	9.7	%
Finance leases	9.3	%	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, 2023:

	Operating Leases		Finance Leases
	(In Thousands)
2024	$	11,788	$	1,040
2025	9,383		1,615
2026	8,899		144
2027	7,812		142
2028	2,293		92
Thereafter	6,590		15
Total lease payments	46,765		3,048
Less imputed interest	(10,126)		(392)
Total lease liabilities	$	36,639	$	2,656

The Company has subleases for a portion of its corporate headquarters facility and a facility in Europe. The leases and subleases are considered operating leases. For the years ended December 31, 2023, 2022, and 2021,

we recognized sublease income of $1.2 million, $1.4 million, and $1.0 million, respectively. Future minimum sublease payments under non-cancelable subleases for two of our facilities were as follows at December 31, 2023:

	Sublease Payments
	(In Thousands)
2024	$	1,376
2025	1,616
2026	1,415
2027	1,377
2028	923
Thereafter	4,158
Total sublease payments	$	10,865