Lease Obligations

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Lease Obligations

Lease Obligations

From time to time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to seven years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At December 31, 2022, the Company had several leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is ongoing and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.

The following is a summary of the lease-related assets and liabilities recorded:

		December 31, 2022		December 31, 2021
(in thousands)	Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	30,544	$	20,971
Finance lease right-of-use assets	Property and equipment, net of accumulated depreciation	3,238		—
Total right-of-use lease assets		$	33,782	$	20,971
Liabilities
Current
Operating lease obligations	Current portion of operating lease obligations	$	9,711	$	7,765
Finance lease obligations	Current portion of finance lease obligations	1,127		—
Total current obligations		10,838		7,765
Non-current
Operating lease obligations	Operating lease obligations, net of current maturities	20,845		13,230
Finance lease obligations	Finance lease obligations, net of current maturities	2,313		—
Total non-current obligations		23,158		13,230
Total lease obligations		$	33,996	$	20,995

The following is a summary of the lease terms and discount rates:

	December 31, 2022		December 31, 2021
Weighted-average remaining lease term – finance leases	1.9 years		0.0 years
Weighted-average remaining lease term – operating leases	3.6 years		2.9 years
Weighted-average discount rate – finance leases	3.0	%	—	%
Weighted-average discount rate – operating leases	3.8	%	3.9	%

The following is a summary of certain information related to the lease costs for finance and operating leases:

	Year ended December 31,
(in thousands)	2022		2021
Lease cost:
Finance lease cost:
Amortization of right-of-use assets	$	1,138	$	—
Interest on lease liabilities	128		—
Operating lease cost	13,428		10,217
Variable lease costs	415		317
Total lease cost	$	15,109	$	10,534

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

	Year ended December 31,
(in thousands)	2022		2021
Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	13,287	$	10,451
Right-of-use asset obtained in exchange for new operating lease obligations	$	21,663	$	7,459
Right-of-use asset obtained in exchange for new finance lease obligations	$	517	$	—

Information on operating and financing lease right of use assets and corresponding lease obligations acquired with the Powerline Plus Companies is provided in Note 2–Acquisitions to the Financial Statements.

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under current portion of operating lease obligations and operating lease obligations, net of current maturities, as of December 31, 2022 were as follows:

(in thousands)	Finance Lease Obligations		Operating Lease Obligations		Total Lease Obligations
2023	$	1,212	$	12,810	$	14,022
2024	2,041		9,217		11,258
2025	316		6,786		7,102
2026	—		5,233		5,233
2027	—		1,578		1,578
Thereafter	—		2,905		2,905
Total minimum lease payments	3,569		38,529		42,098
Financing component	(129)		(7,973)		(8,102)
Net present value of minimum lease payments	3,440		30,556		33,996
Less: current portion of operating lease obligations	(1,127)		(9,711)		(10,838)
Long-term operating lease obligations	$	2,313	$	20,845	$	23,158

The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at market rental rates. As of December 31, 2022, the minimum lease payments required under these leases totaled $7.1 million, which are due over the next 4.0 years.

Lease Obligations

Lease Obligations

From time to time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to seven years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases within one year. Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At December 31, 2022, the Company had several leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is ongoing and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease.

The following is a summary of the lease-related assets and liabilities recorded:

		December 31, 2022		December 31, 2021
(in thousands)	Classification on the Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	30,544	$	20,971
Finance lease right-of-use assets	Property and equipment, net of accumulated depreciation	3,238		—
Total right-of-use lease assets		$	33,782	$	20,971
Liabilities
Current
Operating lease obligations	Current portion of operating lease obligations	$	9,711	$	7,765
Finance lease obligations	Current portion of finance lease obligations	1,127		—
Total current obligations		10,838		7,765
Non-current
Operating lease obligations	Operating lease obligations, net of current maturities	20,845		13,230
Finance lease obligations	Finance lease obligations, net of current maturities	2,313		—
Total non-current obligations		23,158		13,230
Total lease obligations		$	33,996	$	20,995

The following is a summary of the lease terms and discount rates:

	December 31, 2022		December 31, 2021
Weighted-average remaining lease term – finance leases	1.9 years		0.0 years
Weighted-average remaining lease term – operating leases	3.6 years		2.9 years
Weighted-average discount rate – finance leases	3.0	%	—	%
Weighted-average discount rate – operating leases	3.8	%	3.9	%

The following is a summary of certain information related to the lease costs for finance and operating leases:

	Year ended December 31,
(in thousands)	2022		2021
Lease cost:
Finance lease cost:
Amortization of right-of-use assets	$	1,138	$	—
Interest on lease liabilities	128		—
Operating lease cost	13,428		10,217
Variable lease costs	415		317
Total lease cost	$	15,109	$	10,534

The following is a summary of other information and supplemental cash flow information related to finance and operating leases:

	Year ended December 31,
(in thousands)	2022		2021
Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	13,287	$	10,451
Right-of-use asset obtained in exchange for new operating lease obligations	$	21,663	$	7,459
Right-of-use asset obtained in exchange for new finance lease obligations	$	517	$	—

Information on operating and financing lease right of use assets and corresponding lease obligations acquired with the Powerline Plus Companies is provided in Note 2–Acquisitions to the Financial Statements.

The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under current portion of operating lease obligations and operating lease obligations, net of current maturities, as of December 31, 2022 were as follows:

(in thousands)	Finance Lease Obligations		Operating Lease Obligations		Total Lease Obligations
2023	$	1,212	$	12,810	$	14,022
2024	2,041		9,217		11,258
2025	316		6,786		7,102
2026	—		5,233		5,233
2027	—		1,578		1,578
Thereafter	—		2,905		2,905
Total minimum lease payments	3,569		38,529		42,098
Financing component	(129)		(7,973)		(8,102)
Net present value of minimum lease payments	3,440		30,556		33,996
Less: current portion of operating lease obligations	(1,127)		(9,711)		(10,838)
Long-term operating lease obligations	$	2,313	$	20,845	$	23,158

The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value.

Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at market rental rates. As of December 31, 2022, the minimum lease payments required under these leases totaled $7.1 million, which are due over the next 4.0 years.