Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

26.   Leases

The Company's breakdown of lease expense is as follows:

Year ended December 31,	2022		2021		2020
Operating lease cost	$	22,966	$	17,932	$	16,927
Finance lease cost
Amortization of leased assets		10,242		10,804		9,268
Interest on lease liabilities		795		814		915
Short-term lease cost		12,160		10,046		9,799
Sublease income		(111)		(76)		(429)
	$	46,052	$	39,520	$	36,480

The lease expenditure charged to earnings during the year ended December 31, 2022 was $35.1 million (2021: $28.0 million; 2020: $26.7 million).

Operating Leases

The Company has entered into commercial leases for various auction sites and offices located in North America, Europe, the Middle East, Australia and Asia. The majority of these leases are non-cancellable. The Company also has further operating leases for computer equipment, certain motor vehicles and small office equipment where it is not in the best interest of the Company to purchase these assets.

The majority of the Company's operating leases have a fixed term with a remaining life between one month and 17 years, with renewal options included in the contracts. The leases have varying contract terms, escalation clauses and renewal options. Generally, there are no restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations. At the inception of a lease, the Company determines whether it is reasonably certain to exercise a renewal option and includes the options in the determination of the lease term and the lease liability where it is reasonably certain to exercise the option. If the Company's intention is to exercise an option subsequent to the commencement of the lease, the Company will re-assess the lease term. The Company has included certain renewal options in its operating lease liabilities for key property leases for locations that have strategic importance to the Company such as its Corporate Head Office. The Company has not included any purchase options available within its operating lease portfolio in its determination of its operating lease liability.

On March 17, 2022, the Company completed the sale and leaseback of its Bolton property, a parcel of land including all buildings, in Bolton, Ontario (Note 16). The Company intends to lease the Bolton property for a period of 28 months until such time that the replacement property is available for the relocation of the Company’s operations. The lease has an initial rent-free period of two years and an option to renew the lease for two additional one-year periods, during which time the lease is cancellable at one month’s notice. Upon completion of the sale, the Company recorded a $16.6 million ROU asset representing the right-of-use of the Bolton property for the estimated lease term and a $4.5 million long term lease liability representing the obligation to make lease payments arising from the operating lease at the end of the initial two-year period.

26.   Leases (continued)

Operating Leases (continued)

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

2023	$	17,397
2024		17,741
2025		12,992
2026		12,327
2027		11,547
Thereafter		87,301
Total future minimum lease payments	$	159,305
less: imputed interest		(34,689)
Total operating lease liability	$	124,616
less: operating lease liability - current		(12,745)
Total operating lease liability - non current	$	111,871

At December 31, 2022, the weighted average remaining lease term for operating leases is 12.4 years (December 31, 2021: 14.0 years) and the weighted average discount rate is 3.9% (December 31, 2021: 3.7%). There are no additional undiscounted commitments for leases not yet commenced at December 31, 2022 (December 31, 2021: $2.5 million).

Finance Leases

The Company has entered into finance lease arrangements for certain vehicles, computer and yard equipment and office furniture. The majority of the leases have a fixed term with a remaining life of one month to five years with renewal options included in the contracts. In certain of these leases, the Company has the option to purchase the leased asset at fair market value or a stated residual value at the end of the lease term. For certain leases such as vehicle leases the Company has included renewal options in the determination of its lease liabilities.

At December 31, 2022, the net carrying amount of computer and yard equipment and other assets under finance leases is $24.1 million (December 31, 2021: $22.2 million), and is included in the total property, plant and equipment as disclosed on the consolidated balance sheets.

Assets recorded under finance leases are as follows:

			Accumulated		Net book
At December 31, 2022	Cost		depreciation		value
Auto equipment	$	22,102	$	(9,487)	$	12,615
Computer equipment		14,325		(8,021)		6,304
Yard and others		14,072		(8,930)		5,142
	$	50,499	$	(26,438)	$	24,061

			Accumulated		Net book
At December 31, 2021	Cost		depreciation		value
Auto equipment	$	16,380	$	(6,279)	$	10,101
Computer equipment		13,920		(7,728)		6,192
Yard and others		16,628		(10,683)		5,945
	$	46,928	$	(24,690)	$	22,238

26.   Leases (continued)

Finance Leases (continued)

The future aggregate minimum lease payments under non-cancellable finance leases are as follows:

2023	$	10,160
2024		7,624
2025		4,518
2026		2,936
2027		1,097
Thereafter		—
Total future minimum lease payments	$	26,335
less: imputed interest		(1,683)
Total finance lease liability	$	24,652
less: finance lease liability - current		(9,303)
Total finance lease liability - non current	$	15,349

At December 31, 2022, the weighted average remaining lease term for finance leases is 3.2 years (December 31, 2021: 2.9 years) and the weighted average discount rate is 4.4% (December 31, 2021: 3.5%).

Subleases

At December 31, 2022, the total future minimum sublease payments expected to be received under non-cancellable subleases is $1.0 million (2021: $nil; 2020: $0.1 million).