LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

LEASES

We adopted ASC 842 effective January 1, 2019 and elected the modified retrospective transition method. 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 twelve 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 14 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):

	December 31,
	2022		2021
Operating lease costs	$	25,116	$	27,773
Variable lease costs	5,346		5,546
Finance lease costs:
Amortization of right-of-use assets	765		666
Interest on lease liabilities	421		344
Total lease cost	$	31,648	$	34,329
Lease cost - discontinued operations	$	841	$	1,656
Lease cost - continuing operations	$	30,807	$	32,673

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

	December 31,
	2022		2021
Supplemental cash flow information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	19,032	$	16,856
Operating cash flows from finance leases	316		345
Financing cash flows from finance leases	885		515
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	3,455	$	8,008
Finance leases	$	1,270	$	1,011

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

	December 31,
	2022			2021
Operating Leases:
Operating lease right-of-use assets	$	48,462		$	58,495
Current portion of operating lease obligations	13,823			15,412
Operating lease obligations (non-current)	38,819			47,617
Finance Leases:
Property, plant and equipment, net	$	5,107		$	5,114
Current portion of long-term debt and finance lease obligations	960			667
Long-term debt and finance lease obligations	4,942			4,973
Weighted average remaining lease term
Operating leases	6 years			6 years
Finance leases	9 years			10 years
Weighted average discount rate
Operating leases	7.5		%	6.8		%
Finance lease	7.3		%	6.4		%

As of December 31, 2022, we have no material additional operating and finance leases that have not yet commenced.

As of December 31, 2022, future minimum lease payments under non-cancellable (excluding short-term leases) are as follows (in thousands):

Twelve Months Ended December 31,	Operating Leases		Finance Leases
2023	$	14,228	$	1,179
2024	11,893		954
2025	8,761		686
2026	6,527		586
2027	5,480		543
Thereafter	11,318		3,376
Total future minimum lease payments	$	58,207	$	7,324
Less: Interest	5,565		1,422
Present value of lease liabilities	$	52,642	$	5,902

Total rent expense resulting from operating leases, including short-term leases, for the years ended December 31, 2022 and 2021 were $37.3 million, $39.4 million, respectively.

Leases

LEASES

We adopted ASC 842 effective January 1, 2019 and elected the modified retrospective transition method. 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 twelve 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 14 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):

	December 31,
	2022		2021
Operating lease costs	$	25,116	$	27,773
Variable lease costs	5,346		5,546
Finance lease costs:
Amortization of right-of-use assets	765		666
Interest on lease liabilities	421		344
Total lease cost	$	31,648	$	34,329
Lease cost - discontinued operations	$	841	$	1,656
Lease cost - continuing operations	$	30,807	$	32,673

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

	December 31,
	2022		2021
Supplemental cash flow information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	19,032	$	16,856
Operating cash flows from finance leases	316		345
Financing cash flows from finance leases	885		515
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	3,455	$	8,008
Finance leases	$	1,270	$	1,011

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

	December 31,
	2022			2021
Operating Leases:
Operating lease right-of-use assets	$	48,462		$	58,495
Current portion of operating lease obligations	13,823			15,412
Operating lease obligations (non-current)	38,819			47,617
Finance Leases:
Property, plant and equipment, net	$	5,107		$	5,114
Current portion of long-term debt and finance lease obligations	960			667
Long-term debt and finance lease obligations	4,942			4,973
Weighted average remaining lease term
Operating leases	6 years			6 years
Finance leases	9 years			10 years
Weighted average discount rate
Operating leases	7.5		%	6.8		%
Finance lease	7.3		%	6.4		%

As of December 31, 2022, we have no material additional operating and finance leases that have not yet commenced.

As of December 31, 2022, future minimum lease payments under non-cancellable (excluding short-term leases) are as follows (in thousands):

Twelve Months Ended December 31,	Operating Leases		Finance Leases
2023	$	14,228	$	1,179
2024	11,893		954
2025	8,761		686
2026	6,527		586
2027	5,480		543
Thereafter	11,318		3,376
Total future minimum lease payments	$	58,207	$	7,324
Less: Interest	5,565		1,422
Present value of lease liabilities	$	52,642	$	5,902

Total rent expense resulting from operating leases, including short-term leases, for the years ended December 31, 2022 and 2021 were $37.3 million, $39.4 million, respectively.