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Leases | 3 Months Ended
--- | ---
Mar. 31, 2023
Leases [Abstract] |
Leases | Leases Lessee Accounting The Company leases certain office spaces, warehouses, facilities, vehicles and equipment. Our leases have maturity dates ranging from May 2023 to November 2034. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease ROU assets are classified as property, plant and equipment, net in the condensed consolidated balance sheets. Finance lease ROU assets are classified as other assets in the condensed consolidated balance sheets. Operating lease liabilities are classified as operating lease liabilities, current and operating lease liabilities, non-current. Finance lease liabilities are classified as other current liabilities and other long-term liabilities in the consolidated balances sheets. We incurred $5.1 and $3.4 of rental expense under operating leases for the three months ended March 31, 2023 and 2022, respectively. Certain operating leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash provided by operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms. We incurred $0.1 and $0.1 of finance lease interest for the three months ended March 31, 2023 and 2022, respectively. The following table presents the lease balances within our condensed consolidated balance sheets, weighted average remaining lease term and weighted average discount rates related to our leases:
Lease Assets and Liabilities | March 31, 2023 |  | December 31, 2022
Assets |  |  |
Operating lease, net | $ | 65.9 |  |  | $ | 21.1 |
Finance lease, net | 11.2 |  |  | 3.0 |
Total lease assets | $ | 77.1 |  |  | $ | 24.1 |
Liabilities |  |  |
Current: |  |  |
Operating lease liabilities | $ | 14.3 |  |  | $ | 5.4 |
Finance lease liabilities | 2.5 |  |  | 1.7 |
Non-current: |  |  |
Operating lease liabilities | 52.0 |  |  | 15.6 |
Finance lease liabilities | $ | 8.8 |  |  | 1.5 |
Total lease liabilities | $ | 77.6 |  |  | $ | 24.2 |
Weighted-average remaining lease terms |  |  |
Operating leases | 5.1 years |  |
Finance leases | 5.8 years |  |
Weighted-average discount rate |  |  |
Operating leases | 9.4% |  |
Finance leases | 6.5% |  |
The following table summarizes future minimum lease payments for non-cancelable operating leases and for finance leases as of March 31, 2023:
| Finance | Operating
2023 | $ | 2.4 |  | $ | 15.4 |
2024 | 2.5 |  | 19.3 |
2025 | 1.4 |  | 15.3 |
2026 | 1.2 |  | 10.6 |
2027 | 1.1 |  | 7.3 |
Thereafter (1) | 2.7 |  | 20.4 |
Total future minimum lease payments | $ | 11.3 |  | $ | 88.3 |
_______________ (1) As of March 31, 2023, future minimum lease payments for non-cancelable operating leases for the period subsequent to 2027 relate to twenty leased facilities. Lessor Accounting We lease equipment manufactured by Chart primarily through our Cryo-Lease program as sales-type and operating leases. As of March 31, 2023 and December 31, 2022, our short-term net investment in sales-type leases was $16.3 and $14.5, respectively, and is included in other current assets in our condensed consolidated balance sheets. Our long-term net investment in sales type leases was $50.6 and $44.3 as of March 31, 2023 and December 31, 2022, respectively, and is included in other assets in our condensed consolidated balance sheets. For sales type leases, interest income was $0.7 and $0.5 in the condensed consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2023 and 2022, respectively. Operating leases offered by Chart may include early termination options. At the end of a lease, a lessee generally has the option to either extend the lease, purchase the underlying equipment for a fixed price or return it to Chart. The lease agreements clearly define applicable return conditions and remedies for non-compliance to ensure that leased equipment will be in good operating condition upon return. The following table represents sales from sales-type and operating leases:
| Three Months Ended March 31, |  |  |  |
| 2023 |  | 2022 |  |  |  |
Sales-type leases | $ | 12.7 |  |  | $ | 5.3 |  |  |  |  |
Operating leases | 1.2 |  |  | 1.0 |  |  |  |  |
Total sales from leases | $ | 13.9 |  |  | $ | 6.3 |  |  |  |  |
The following table represents scheduled payments for sales-type leases:
| March 31, 2023
2023 | $ | 11.7 |
2024 | 16.9 |
2025 | 16.9 |
2026 | 13.8 |
2027 | 7.4 |
Thereafter | 13.0 |
Total | 79.7 |
Less: unearned income | 12.8 |
Total | $ | 66.9 |
The following table represents the cost of equipment leased to others:
| March 31, 2023 |  | December 31, 2022
Equipment leased to others, cost | $ | 19.0 |  |  | $ | 17.3 |
Less: accumulated depreciation | 3.6 |  |  | 3.1 |
Equipment leased to others, net | $ | 15.4 |  |  | $ | 14.2 |
The following table represents payments due for operating leases:
| March 31, 2023
2023 | $ | 0.6 |
2024 | 0.1 |
2025 | 0.1 |
2026 | 0.1 |
2027 | — |
Thereafter | — |
Total | $ | 0.9 |
Leases | Leases Lessee Accounting The Company leases certain office spaces, warehouses, facilities, vehicles and equipment. Our leases have maturity dates ranging from May 2023 to November 2034. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease ROU assets are classified as property, plant and equipment, net in the condensed consolidated balance sheets. Finance lease ROU assets are classified as other assets in the condensed consolidated balance sheets. Operating lease liabilities are classified as operating lease liabilities, current and operating lease liabilities, non-current. Finance lease liabilities are classified as other current liabilities and other long-term liabilities in the consolidated balances sheets. We incurred $5.1 and $3.4 of rental expense under operating leases for the three months ended March 31, 2023 and 2022, respectively. Certain operating leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash provided by operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms. We incurred $0.1 and $0.1 of finance lease interest for the three months ended March 31, 2023 and 2022, respectively. The following table presents the lease balances within our condensed consolidated balance sheets, weighted average remaining lease term and weighted average discount rates related to our leases:
Lease Assets and Liabilities | March 31, 2023 |  | December 31, 2022
Assets |  |  |
Operating lease, net | $ | 65.9 |  |  | $ | 21.1 |
Finance lease, net | 11.2 |  |  | 3.0 |
Total lease assets | $ | 77.1 |  |  | $ | 24.1 |
Liabilities |  |  |
Current: |  |  |
Operating lease liabilities | $ | 14.3 |  |  | $ | 5.4 |
Finance lease liabilities | 2.5 |  |  | 1.7 |
Non-current: |  |  |
Operating lease liabilities | 52.0 |  |  | 15.6 |
Finance lease liabilities | $ | 8.8 |  |  | 1.5 |
Total lease liabilities | $ | 77.6 |  |  | $ | 24.2 |
Weighted-average remaining lease terms |  |  |
Operating leases | 5.1 years |  |
Finance leases | 5.8 years |  |
Weighted-average discount rate |  |  |
Operating leases | 9.4% |  |
Finance leases | 6.5% |  |
The following table summarizes future minimum lease payments for non-cancelable operating leases and for finance leases as of March 31, 2023:
| Finance | Operating
2023 | $ | 2.4 |  | $ | 15.4 |
2024 | 2.5 |  | 19.3 |
2025 | 1.4 |  | 15.3 |
2026 | 1.2 |  | 10.6 |
2027 | 1.1 |  | 7.3 |
Thereafter (1) | 2.7 |  | 20.4 |
Total future minimum lease payments | $ | 11.3 |  | $ | 88.3 |
_______________ (1) As of March 31, 2023, future minimum lease payments for non-cancelable operating leases for the period subsequent to 2027 relate to twenty leased facilities. Lessor Accounting We lease equipment manufactured by Chart primarily through our Cryo-Lease program as sales-type and operating leases. As of March 31, 2023 and December 31, 2022, our short-term net investment in sales-type leases was $16.3 and $14.5, respectively, and is included in other current assets in our condensed consolidated balance sheets. Our long-term net investment in sales type leases was $50.6 and $44.3 as of March 31, 2023 and December 31, 2022, respectively, and is included in other assets in our condensed consolidated balance sheets. For sales type leases, interest income was $0.7 and $0.5 in the condensed consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2023 and 2022, respectively. Operating leases offered by Chart may include early termination options. At the end of a lease, a lessee generally has the option to either extend the lease, purchase the underlying equipment for a fixed price or return it to Chart. The lease agreements clearly define applicable return conditions and remedies for non-compliance to ensure that leased equipment will be in good operating condition upon return. The following table represents sales from sales-type and operating leases:
| Three Months Ended March 31, |  |  |  |
| 2023 |  | 2022 |  |  |  |
Sales-type leases | $ | 12.7 |  |  | $ | 5.3 |  |  |  |  |
Operating leases | 1.2 |  |  | 1.0 |  |  |  |  |
Total sales from leases | $ | 13.9 |  |  | $ | 6.3 |  |  |  |  |
The following table represents scheduled payments for sales-type leases:
| March 31, 2023
2023 | $ | 11.7 |
2024 | 16.9 |
2025 | 16.9 |
2026 | 13.8 |
2027 | 7.4 |
Thereafter | 13.0 |
Total | 79.7 |
Less: unearned income | 12.8 |
Total | $ | 66.9 |
The following table represents the cost of equipment leased to others:
| March 31, 2023 |  | December 31, 2022
Equipment leased to others, cost | $ | 19.0 |  |  | $ | 17.3 |
Less: accumulated depreciation | 3.6 |  |  | 3.1 |
Equipment leased to others, net | $ | 15.4 |  |  | $ | 14.2 |
The following table represents payments due for operating leases:
| March 31, 2023
2023 | $ | 0.6 |
2024 | 0.1 |
2025 | 0.1 |
2026 | 0.1 |
2027 | — |
Thereafter | — |
Total | $ | 0.9 |
Leases | Leases Lessee Accounting The Company leases certain office spaces, warehouses, facilities, vehicles and equipment. Our leases have maturity dates ranging from May 2023 to November 2034. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Operating lease ROU assets are classified as property, plant and equipment, net in the condensed consolidated balance sheets. Finance lease ROU assets are classified as other assets in the condensed consolidated balance sheets. Operating lease liabilities are classified as operating lease liabilities, current and operating lease liabilities, non-current. Finance lease liabilities are classified as other current liabilities and other long-term liabilities in the consolidated balances sheets. We incurred $5.1 and $3.4 of rental expense under operating leases for the three months ended March 31, 2023 and 2022, respectively. Certain operating leases contain rent escalation clauses and lease concessions that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight-line basis over the minimum lease term. Adjustments for straight-line rental expense for the respective periods was not material and as such, the majority of expense recognized was reflected in cash provided by operating activities for the respective periods. This expense consisted primarily of payments for base rent on building and equipment leases. Payments related to short-term lease costs and taxes and variable service charges on leased properties were immaterial. In addition, we have the right, but no obligation, to renew certain leases for various renewal terms. We incurred $0.1 and $0.1 of finance lease interest for the three months ended March 31, 2023 and 2022, respectively. The following table presents the lease balances within our condensed consolidated balance sheets, weighted average remaining lease term and weighted average discount rates related to our leases:
Lease Assets and Liabilities | March 31, 2023 |  | December 31, 2022
Assets |  |  |
Operating lease, net | $ | 65.9 |  |  | $ | 21.1 |
Finance lease, net | 11.2 |  |  | 3.0 |
Total lease assets | $ | 77.1 |  |  | $ | 24.1 |
Liabilities |  |  |
Current: |  |  |
Operating lease liabilities | $ | 14.3 |  |  | $ | 5.4 |
Finance lease liabilities | 2.5 |  |  | 1.7 |
Non-current: |  |  |
Operating lease liabilities | 52.0 |  |  | 15.6 |
Finance lease liabilities | $ | 8.8 |  |  | 1.5 |
Total lease liabilities | $ | 77.6 |  |  | $ | 24.2 |
Weighted-average remaining lease terms |  |  |
Operating leases | 5.1 years |  |
Finance leases | 5.8 years |  |
Weighted-average discount rate |  |  |
Operating leases | 9.4% |  |
Finance leases | 6.5% |  |
The following table summarizes future minimum lease payments for non-cancelable operating leases and for finance leases as of March 31, 2023:
| Finance | Operating
2023 | $ | 2.4 |  | $ | 15.4 |
2024 | 2.5 |  | 19.3 |
2025 | 1.4 |  | 15.3 |
2026 | 1.2 |  | 10.6 |
2027 | 1.1 |  | 7.3 |
Thereafter (1) | 2.7 |  | 20.4 |
Total future minimum lease payments | $ | 11.3 |  | $ | 88.3 |
_______________ (1) As of March 31, 2023, future minimum lease payments for non-cancelable operating leases for the period subsequent to 2027 relate to twenty leased facilities. Lessor Accounting We lease equipment manufactured by Chart primarily through our Cryo-Lease program as sales-type and operating leases. As of March 31, 2023 and December 31, 2022, our short-term net investment in sales-type leases was $16.3 and $14.5, respectively, and is included in other current assets in our condensed consolidated balance sheets. Our long-term net investment in sales type leases was $50.6 and $44.3 as of March 31, 2023 and December 31, 2022, respectively, and is included in other assets in our condensed consolidated balance sheets. For sales type leases, interest income was $0.7 and $0.5 in the condensed consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2023 and 2022, respectively. Operating leases offered by Chart may include early termination options. At the end of a lease, a lessee generally has the option to either extend the lease, purchase the underlying equipment for a fixed price or return it to Chart. The lease agreements clearly define applicable return conditions and remedies for non-compliance to ensure that leased equipment will be in good operating condition upon return. The following table represents sales from sales-type and operating leases:
| Three Months Ended March 31, |  |  |  |
| 2023 |  | 2022 |  |  |  |
Sales-type leases | $ | 12.7 |  |  | $ | 5.3 |  |  |  |  |
Operating leases | 1.2 |  |  | 1.0 |  |  |  |  |
Total sales from leases | $ | 13.9 |  |  | $ | 6.3 |  |  |  |  |
The following table represents scheduled payments for sales-type leases:
| March 31, 2023
2023 | $ | 11.7 |
2024 | 16.9 |
2025 | 16.9 |
2026 | 13.8 |
2027 | 7.4 |
Thereafter | 13.0 |
Total | 79.7 |
Less: unearned income | 12.8 |
Total | $ | 66.9 |
The following table represents the cost of equipment leased to others:
| March 31, 2023 |  | December 31, 2022
Equipment leased to others, cost | $ | 19.0 |  |  | $ | 17.3 |
Less: accumulated depreciation | 3.6 |  |  | 3.1 |
Equipment leased to others, net | $ | 15.4 |  |  | $ | 14.2 |
The following table represents payments due for operating leases:
| March 31, 2023
2023 | $ | 0.6 |
2024 | 0.1 |
2025 | 0.1 |
2026 | 0.1 |
2027 | — |
Thereafter | — |
Total | $ | 0.9 |

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