LEASES

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

LEASES

LEASES

Finance Leases

The Company's finance lease liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

Creditor	Loan Type	June 30, 2023		December 31, 2022
Matheson	Finance Lease	$	44,739	$	45,311
Plaquemines	Finance Lease	1,096		1,169
Harvey Ford	Finance Lease	43		47
DLL financial	Finance Lease	21		—
Centerpoint Blakely	Finance Lease	23,711		—
		$	69,610	$	46,527

Future maturities of finance lease obligations, as of June 30, 2023, are summarized as follows (in thousands):

Period Ended June 30,	Amount Due
2024	$	8,409
2025	8,409
2026	8,404
2027	8,400
2028	27,330
Thereafter	61,152
Total lease payments	122,104
Less: interest	(52,494)
Present value of financing lease liabilities	$	69,610

The following table summarizes the lease cost recognized in our consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost Type	2023		2022		2023		2022
Amortization of finance lease ROU assets	$	984	$	780	$	1,769	$	808
Interest on lease liabilities	1,551		1,366		2,934		1,378
Net finance lease costs	$	2,535	$	2,146	$	4,703	$	2,186

Operating Leases

Operating leases are included in operating lease right-of-use lease assets, and operating current and long-term lease liabilities on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for

equipment is included in cost of revenues and other rents are included in selling, general and administrative expense on the unaudited consolidated statements of operations and are reported net of lease income.

The following table summarizes the operating lease costs recognized (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost Type	2023		2022		2023		2022
Operating lease cost	$	4,962	$	1,530	$	8,032	$	2,964
Variable lease cost	609		306		869		351
Short-term lease cost	181		2,114		2,110		3,978
Net lease cost	$	5,752	$	3,950	$	11,011	$	7,293

Cash Flows

The following table summarizes the supplemental cash flow information related to leases as follows (in thousands):

	Six Months Ended June 30,
Lease Cost Type	2023		2022
Cash paid for amounts included in the measurement of liabilities
Payments on financing lease	$	908	$	402
Payments on operating lease	$	8,032	$	3,819
Non-cash supplemental amounts
ROU assets obtained from new finance lease liabilities	$	23,990	$	45,096
ROU assets obtained from new operating lease liabilities	$	38,945	$	—

Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2023 (in thousands):

For the period ending June 30,	Facilities		Equipment		Plant		Railcar		Total
2024	$	535	$	16,776	$	7,421	$	856	$	25,588
2025	418		13,579		7,421		654		22,072
2026	333		5,058		7,421		485		13,297
2027	300		5,058		7,440		306		13,104
2028	300		2,185		7,477		49		10,011
Thereafter	1,300		—		83,553		—		84,853
Total lease payments	3,186		42,656		120,733		2,350		168,925
Less: interest	(952)		(6,136)		(69,098)		(237)		(76,423)
Present value of operating lease liabilities	$	2,234	$	36,520	$	51,635	$	2,113	$	92,502

The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2023:

Remaining lease term and discount rate:	June 30, 2023
Weighted average remaining lease terms (years)
Lease facilities	4.95
Lease equipment	3.60
Lease plant	16.52
Lease railcar	2.14
Weighted average discount rate
Lease facilities	9.26	%
Lease equipment	11.90	%
Lease plant	12.24	%
Lease railcar	8.47	%

There are two plant leases that have multiple 5-year extension options for a total of 20 years, three plant leases with multiple 1-year extension options for a total of 20 years and eleven equipment leases with a 3-year extension option. These extension options have been included in the lease right-of-use asset and lease obligation.

The Company will reassess the lease terms and purchase options when there is a significant change in circumstances or when the Company elects to exercise an option that had previously been determined that it was not reasonably certain to do so.

LEASES

LEASES

Finance Leases

The Company's finance lease liabilities consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

Creditor	Loan Type	June 30, 2023		December 31, 2022
Matheson	Finance Lease	$	44,739	$	45,311
Plaquemines	Finance Lease	1,096		1,169
Harvey Ford	Finance Lease	43		47
DLL financial	Finance Lease	21		—
Centerpoint Blakely	Finance Lease	23,711		—
		$	69,610	$	46,527

Future maturities of finance lease obligations, as of June 30, 2023, are summarized as follows (in thousands):

Period Ended June 30,	Amount Due
2024	$	8,409
2025	8,409
2026	8,404
2027	8,400
2028	27,330
Thereafter	61,152
Total lease payments	122,104
Less: interest	(52,494)
Present value of financing lease liabilities	$	69,610

The following table summarizes the lease cost recognized in our consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost Type	2023		2022		2023		2022
Amortization of finance lease ROU assets	$	984	$	780	$	1,769	$	808
Interest on lease liabilities	1,551		1,366		2,934		1,378
Net finance lease costs	$	2,535	$	2,146	$	4,703	$	2,186

Operating Leases

Operating leases are included in operating lease right-of-use lease assets, and operating current and long-term lease liabilities on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for

equipment is included in cost of revenues and other rents are included in selling, general and administrative expense on the unaudited consolidated statements of operations and are reported net of lease income.

The following table summarizes the operating lease costs recognized (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Lease Cost Type	2023		2022		2023		2022
Operating lease cost	$	4,962	$	1,530	$	8,032	$	2,964
Variable lease cost	609		306		869		351
Short-term lease cost	181		2,114		2,110		3,978
Net lease cost	$	5,752	$	3,950	$	11,011	$	7,293

Cash Flows

The following table summarizes the supplemental cash flow information related to leases as follows (in thousands):

	Six Months Ended June 30,
Lease Cost Type	2023		2022
Cash paid for amounts included in the measurement of liabilities
Payments on financing lease	$	908	$	402
Payments on operating lease	$	8,032	$	3,819
Non-cash supplemental amounts
ROU assets obtained from new finance lease liabilities	$	23,990	$	45,096
ROU assets obtained from new operating lease liabilities	$	38,945	$	—

Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2023 (in thousands):

For the period ending June 30,	Facilities		Equipment		Plant		Railcar		Total
2024	$	535	$	16,776	$	7,421	$	856	$	25,588
2025	418		13,579		7,421		654		22,072
2026	333		5,058		7,421		485		13,297
2027	300		5,058		7,440		306		13,104
2028	300		2,185		7,477		49		10,011
Thereafter	1,300		—		83,553		—		84,853
Total lease payments	3,186		42,656		120,733		2,350		168,925
Less: interest	(952)		(6,136)		(69,098)		(237)		(76,423)
Present value of operating lease liabilities	$	2,234	$	36,520	$	51,635	$	2,113	$	92,502

The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2023:

Remaining lease term and discount rate:	June 30, 2023
Weighted average remaining lease terms (years)
Lease facilities	4.95
Lease equipment	3.60
Lease plant	16.52
Lease railcar	2.14
Weighted average discount rate
Lease facilities	9.26	%
Lease equipment	11.90	%
Lease plant	12.24	%
Lease railcar	8.47	%

There are two plant leases that have multiple 5-year extension options for a total of 20 years, three plant leases with multiple 1-year extension options for a total of 20 years and eleven equipment leases with a 3-year extension option. These extension options have been included in the lease right-of-use asset and lease obligation.

The Company will reassess the lease terms and purchase options when there is a significant change in circumstances or when the Company elects to exercise an option that had previously been determined that it was not reasonably certain to do so.