Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

The following table presents components of lease expense:

	Years Ended December 31,
	2022		2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	1,318	$	1,451	$	1,272
Interest expense	351		213		192
Operating lease cost	8,285		8,015		8,397
Short-term lease cost (1)	438		655		591
Sublease income	(195)		—		—
Total lease cost	$	10,197	$	10,334	$	10,452

_______________________________

(1) Excludes expenses related to leases with a lease term of one month or less.

The following table presents lease-related assets and liabilities recorded on the balance sheet.

		As of December 31,
	Financial Statement Line Item	2022		2021
Assets:
Operating lease assets	Operating lease right-of-use assets	$	46,713	$	46,443
Finance lease assets	Property, plant and equipment, net	12,989		13,641
Total lease assets		$	59,702	$	60,084
Liabilities:
Current liabilities:
Operating lease liabilities	Current portion of operating lease liabilities	$	5,294	$	5,704
Finance lease liabilities	Other current liabilities	2,610		3,111
Non-current liabilities:
Operating lease liabilities	Operating lease liabilities, net of current portion	51,411		51,295
Finance lease liabilities	Other non-current liabilities	3,828		5,446
Total lease liabilities		$	63,143	$	65,556

The following table contains supplemental cash flow information related to leases.

	Years Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	351	$	213	$	192
Operating cash flows used in operating leases	14,214		13,434		13,498
Financing cash flows used in finance leases	3,003		4,836		2,018
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,263	$	2,814	$	728
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	5,181		—		8,682

_______________________________

(1) Includes new leases, renewals, and modifications.

The weighted average remaining lease term and weighted-average discount rate for finance and operating leases were as follows:

	As of December 31,
	2022		2021
Weighted-average remaining lease term - finance leases	3.1 years		3.3 years
Weighted-average remaining lease term - operating leases	10.1 years		11.1 years
Weighted-average discount rate - finance leases	5.3	%	3.0	%
Weighted-average discount rate - operating leases	7.5	%	7.0	%

The maturities of lease liabilities as of December 31, 2022, is as follows:

	Operating Leases		Finance Leases
2023	$	9,250	$	2,913
2024	8,419		1,819
2025	8,352		1,017
2026	8,193		950
2027	7,983		509
Thereafter	37,655		—
Total future minimum lease payments	79,852		7,208
Less: imputed interest	23,147		770
Total lease liabilities	$	56,705	$	6,438

In August 2022, we began subleasing a portion of our leased corporate headquarters office space. Since the Company retains the obligation to the lessor, the underlying lease continues to be accounted for as operating leases. Sublease income is recognized on a straight-line basis over the lease terms.

In March 2020, we amended the lease of our corporate headquarters building to exit over half of the previously leased space and reduce annual base rent payments. The amendment was accounted for as a lease modification, and the remeasurement of the lease resulted in an $8.1 million decrease in the operating lease ROU asset, a $10.5 million decrease in the noncurrent portion of the operating lease liability, and a $0.6 million decrease in the current portion of the operating lease liability. The $3.0 million difference between the change in the operating lease ROU asset and the operating lease liabilities was recognized in “Other operating expense (income), net,” on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2020. In connection with the discontinued use of the previously leased space, we also recognized a $4.4 million termination charge and a $2.9 million impairment charge on the associated leasehold improvements, all of which were also recognized in “Other operating expense (income), net” for the year ended December 31, 2020.

During the second quarter of 2020 and as part of our overall plan to improve liquidity during the COVID-19 pandemic, we negotiated with certain lessors to defer rent payments on leased buildings. In total, $0.5 million of operating lease payments were deferred over a period ranging from April 2020 to December 2020 and were repaid from June 2020 through December 2022. The deferral of rent payments did not result in a substantial change in total lease payments over the individual lease terms. We elected to apply lease accounting relief announced by the FASB in April 2020 and treated these lease concessions as if they existed in the original contracts rather than applying lease modification accounting. The net impact on cash flows from operating activities on the Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020, was $(0.3) million, $(0.2) million, and $0.7 million, respectively.

Leases

Leases

The following table presents components of lease expense:

	Years Ended December 31,
	2022		2021		2020
Finance lease cost:
Amortization of right-of-use assets	$	1,318	$	1,451	$	1,272
Interest expense	351		213		192
Operating lease cost	8,285		8,015		8,397
Short-term lease cost (1)	438		655		591
Sublease income	(195)		—		—
Total lease cost	$	10,197	$	10,334	$	10,452

_______________________________

(1) Excludes expenses related to leases with a lease term of one month or less.

The following table presents lease-related assets and liabilities recorded on the balance sheet.

		As of December 31,
	Financial Statement Line Item	2022		2021
Assets:
Operating lease assets	Operating lease right-of-use assets	$	46,713	$	46,443
Finance lease assets	Property, plant and equipment, net	12,989		13,641
Total lease assets		$	59,702	$	60,084
Liabilities:
Current liabilities:
Operating lease liabilities	Current portion of operating lease liabilities	$	5,294	$	5,704
Finance lease liabilities	Other current liabilities	2,610		3,111
Non-current liabilities:
Operating lease liabilities	Operating lease liabilities, net of current portion	51,411		51,295
Finance lease liabilities	Other non-current liabilities	3,828		5,446
Total lease liabilities		$	63,143	$	65,556

The following table contains supplemental cash flow information related to leases.

	Years Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in finance leases	$	351	$	213	$	192
Operating cash flows used in operating leases	14,214		13,434		13,498
Financing cash flows used in finance leases	3,003		4,836		2,018
Right-of-use assets obtained in exchange for new finance lease liabilities	$	1,263	$	2,814	$	728
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	5,181		—		8,682

_______________________________

(1) Includes new leases, renewals, and modifications.

The weighted average remaining lease term and weighted-average discount rate for finance and operating leases were as follows:

	As of December 31,
	2022		2021
Weighted-average remaining lease term - finance leases	3.1 years		3.3 years
Weighted-average remaining lease term - operating leases	10.1 years		11.1 years
Weighted-average discount rate - finance leases	5.3	%	3.0	%
Weighted-average discount rate - operating leases	7.5	%	7.0	%

The maturities of lease liabilities as of December 31, 2022, is as follows:

	Operating Leases		Finance Leases
2023	$	9,250	$	2,913
2024	8,419		1,819
2025	8,352		1,017
2026	8,193		950
2027	7,983		509
Thereafter	37,655		—
Total future minimum lease payments	79,852		7,208
Less: imputed interest	23,147		770
Total lease liabilities	$	56,705	$	6,438

In August 2022, we began subleasing a portion of our leased corporate headquarters office space. Since the Company retains the obligation to the lessor, the underlying lease continues to be accounted for as operating leases. Sublease income is recognized on a straight-line basis over the lease terms.

In March 2020, we amended the lease of our corporate headquarters building to exit over half of the previously leased space and reduce annual base rent payments. The amendment was accounted for as a lease modification, and the remeasurement of the lease resulted in an $8.1 million decrease in the operating lease ROU asset, a $10.5 million decrease in the noncurrent portion of the operating lease liability, and a $0.6 million decrease in the current portion of the operating lease liability. The $3.0 million difference between the change in the operating lease ROU asset and the operating lease liabilities was recognized in “Other operating expense (income), net,” on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2020. In connection with the discontinued use of the previously leased space, we also recognized a $4.4 million termination charge and a $2.9 million impairment charge on the associated leasehold improvements, all of which were also recognized in “Other operating expense (income), net” for the year ended December 31, 2020.

During the second quarter of 2020 and as part of our overall plan to improve liquidity during the COVID-19 pandemic, we negotiated with certain lessors to defer rent payments on leased buildings. In total, $0.5 million of operating lease payments were deferred over a period ranging from April 2020 to December 2020 and were repaid from June 2020 through December 2022. The deferral of rent payments did not result in a substantial change in total lease payments over the individual lease terms. We elected to apply lease accounting relief announced by the FASB in April 2020 and treated these lease concessions as if they existed in the original contracts rather than applying lease modification accounting. The net impact on cash flows from operating activities on the Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020, was $(0.3) million, $(0.2) million, and $0.7 million, respectively.