LEASES

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

LEASES

LEASES

We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets.  

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than 12 months) are expensed as incurred.

We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,784	$	6,882	$	21,044	$	21,573
Variable lease costs	1,503		1,146		4,106		3,727
Finance lease costs:
Amortization of right-of-use assets	155		110		467		328
Interest on lease liabilities	84		80		252		242
Total lease cost	$	8,526	$	8,218	$	25,869	$	25,870

Other information related to leases are as follows (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Supplemental cash flow information:	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	6,226	4,675	17,569	15,797
Operating cash flows from finance leases	81	82	252	247
Financing cash flows from finance leases	119	71	356	205
Right-of-use assets obtained in exchange for lease obligations
Operating leases	721	382	9,304	1,969
Finance leases	611	3	1,017	48

Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands):

	September 30, 2021			December 31, 2020
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	63,471		$	63,869
Current portion of operating lease obligations	16,502			17,375
Operating lease obligations (non-current)	51,867			52,207
Weighted average remaining lease term	6.0 years			6.0 years
Weighted average discount rate	6.8		%	6.7		%

	September 30, 2021			December 31, 2020
Finance Leases:	(unaudited)
Property, plant and equipment, net	$	5,305		$	4,779
Current portion of long-term debt and finance lease obligations	663			337
Long-term debt and finance lease obligations	5,129			4,816
Weighted average remaining lease term	10.0 years			12.0 years
Weighted average discount rate	6.4		%	6.2		%

As of September 30, 2021, we have no material additional operating and finance leases that have not yet commenced.

As of September 30, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands):

	Operating Leases		Finance Leases
	(unaudited)		(unaudited)
2021 (Remainder of the year)	$	7,234	$	327
2022	18,663		978
2023	14,675		888
2024	11,591		730
2025	8,675		568
Thereafter	25,321		4,557
Total future minimum lease payments	86,159		8,048
Less: Interest	(17,790)		(2,256)
Present value of lease liabilities	$	68,369	$	5,792

LEASES

LEASES

We determine if an arrangement is a lease at inception. Operating leases are included in “Operating lease right-of-use (‘ROU’) assets”, “operating lease liabilities” and “current portion of operating lease obligations” on our consolidated balance sheets. Finance leases are included in “property, plant and equipment, net”, “current portion of long-term debt and finance lease obligations” and “long-term debt and finance lease obligations” on our consolidated balance sheets.  

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments and short-term lease payments (leases with initial terms less than 12 months) are expensed as incurred.

We have lease agreements with lease and non-lease components for certain equipment, office, and vehicle leases. We have elected the practical expedient to not separate lease and non-lease components and account for both as a single lease component. We have operating and finance leases primarily for equipment, real estate, and vehicles. Our leases have remaining lease terms of 1 year to 15 years, some of which may include options to extend the leases for up to 10 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Operating lease costs	$	6,784	$	6,882	$	21,044	$	21,573
Variable lease costs	1,503		1,146		4,106		3,727
Finance lease costs:
Amortization of right-of-use assets	155		110		467		328
Interest on lease liabilities	84		80		252		242
Total lease cost	$	8,526	$	8,218	$	25,869	$	25,870

Other information related to leases are as follows (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Supplemental cash flow information:	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	6,226	4,675	17,569	15,797
Operating cash flows from finance leases	81	82	252	247
Financing cash flows from finance leases	119	71	356	205
Right-of-use assets obtained in exchange for lease obligations
Operating leases	721	382	9,304	1,969
Finance leases	611	3	1,017	48

Amounts recognized in the condensed consolidated balance sheet are as follows (in thousands):

	September 30, 2021			December 31, 2020
Operating Leases:	(unaudited)
Operating lease right-of-use assets	$	63,471		$	63,869
Current portion of operating lease obligations	16,502			17,375
Operating lease obligations (non-current)	51,867			52,207
Weighted average remaining lease term	6.0 years			6.0 years
Weighted average discount rate	6.8		%	6.7		%

	September 30, 2021			December 31, 2020
Finance Leases:	(unaudited)
Property, plant and equipment, net	$	5,305		$	4,779
Current portion of long-term debt and finance lease obligations	663			337
Long-term debt and finance lease obligations	5,129			4,816
Weighted average remaining lease term	10.0 years			12.0 years
Weighted average discount rate	6.4		%	6.2		%

As of September 30, 2021, we have no material additional operating and finance leases that have not yet commenced.

As of September 30, 2021, future minimum lease payments under non-cancellable leases (excluding short-term leases) are as follows (in thousands):

	Operating Leases		Finance Leases
	(unaudited)		(unaudited)
2021 (Remainder of the year)	$	7,234	$	327
2022	18,663		978
2023	14,675		888
2024	11,591		730
2025	8,675		568
Thereafter	25,321		4,557
Total future minimum lease payments	86,159		8,048
Less: Interest	(17,790)		(2,256)
Present value of lease liabilities	$	68,369	$	5,792