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LEASES | 9 Months Ended
--- | ---
Sep. 30, 2024
Leases [Abstract] |
LEASES | LEASES The Company has entered into various non-cancellable operating and finance lease agreements for certain of the Company’s offices, manufacturing and warehouse facilities, retail and service locations, equipment and vehicles, worldwide. In August 2022, the Company entered into a four-year agreement (“Lease Agreement”) to lease land in Casa Grande, Arizona adjacent to our manufacturing facility. The Company classifies this lease as a finance lease because the Lease Agreement contains a purchase option which the Company is reasonably certain to exercise. As of September 30, 2024 and December 31, 2023, assets associated with the finance lease were $79.3 million. As of September 30, 2024 and December 31, 2023, liabilities associated with the finance lease were $78.9 million and $80.6 million, respectively. Contemporaneously with the execution of the Lease Agreement, the Company entered into a sale agreement, pursuant to which the Company sold certain parcels of land for $31.7 million to the lessor and leased back these parcels of land under the Lease Agreement. The sale of the land and subsequent lease did not result in change in the transfer of control of the land; therefore, the sale-leaseback transaction is accounted for as a failed sale and leaseback financing obligation. The Company recorded $31.7 million of sales proceeds received as a financial liability within other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023. The balances for the operating and finance leases where the Company is the lessee are presented as follows within the Company’s condensed consolidated balance sheets (in thousands):
| September 30, 2024 |  | December 31, 2023
Operating leases: |  |  |
Right-of-use assets | $ | 220,616 |  |  | $ | 221,508 |
Other current liabilities | $ | 34,801 |  |  | $ | 28,431 |
Other long-term liabilities | 240,008 |  |  | 244,122 |
Total operating lease liabilities | $ | 274,809 |  |  | $ | 272,553 |
Finance leases: |  |  |
Property, plant and equipment, net | $ | 82,989 |  |  | $ | 85,055 |
Total finance lease assets | $ | 82,989 |  |  | $ | 85,055 |
Finance lease liabilities, current portion | $ | 6,921 |  |  | $ | 8,202 |
Finance lease liabilities, net of current portion | 75,027 |  |  | 77,653 |
Total finance lease liabilities | $ | 81,948 |  |  | $ | 85,855 |
The components of lease expense were as follows within the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease expense: |  |  |  |  |  |  |
Operating lease expense (1) | $ | 15,680 |  |  | $ | 14,000 |  |  | $ | 46,109 |  |  | $ | 40,578 |
Variable lease expense | 522 |  |  | 438 |  |  | 1,432 |  |  | 1,306 |
Finance lease expense: |  |  |  |  |  |  |
Amortization of leased assets | $ | 669 |  |  | $ | 1,326 |  |  | $ | 2,496 |  |  | $ | 4,133 |
Interest on lease liabilities | 1,161 |  |  | 1,204 |  |  | 3,495 |  |  | 3,677 |
Total finance lease expense | $ | 1,830 |  |  | $ | 2,530 |  |  | $ | 5,991 |  |  | $ | 7,810 |
Total lease expense | $ | 18,032 |  |  | $ | 16,968 |  |  | $ | 53,532 |  |  | $ | 49,694 |
(1) Excluded short-term leases, which were not material. Other information related to leases where the Company is the lessee was as follows:
| September 30, 2024 |  | December 31, 2023
Weighted-average remaining lease term (in years): |  |  |
Operating leases | 6.4 |  | 6.8
Finance leases | 1.9 |  | 2.6
Weighted-average discount rate: |  |  |
Operating leases | 11.89 | % |  | 11.01 | %
Finance leases | 5.71 | % |  | 5.59 | %
As of September 30, 2024, the maturities of the Company’s operating and finance lease liabilities (excluding short-term leases) were as follows (in thousands):
| Operating Leases |  | Finance Leases
2024 (remainder of the year) | $ | 15,005 |  |  | $ | 570 |
2025 | 66,800 |  |  | 6,817 |
2026 | 66,260 |  |  | 82,686 |
2027 | 57,597 |  |  | 245 |
2028 | 53,890 |  |  | 39 |
Thereafter | 140,208 |  |  | 8 |
Total minimum lease payments | 399,760 |  |  | 90,365 |
Less: Interest | (124,951) |  |  | (8,417) |
Present value of lease obligations | 274,809 |  |  | 81,948 |
Less: Current portion | (34,801) |  |  | (6,921) |
Long-term portion of lease obligations | $ | 240,008 |  |  | $ | 75,027 |
As of September 30, 2024, the Company entered into additional leases for facilities and equipment that have not yet commenced with undiscounted future lease payments of $18.9 million. The leases are expected to commence over the next twelve months.
LEASES | LEASES The Company has entered into various non-cancellable operating and finance lease agreements for certain of the Company’s offices, manufacturing and warehouse facilities, retail and service locations, equipment and vehicles, worldwide. In August 2022, the Company entered into a four-year agreement (“Lease Agreement”) to lease land in Casa Grande, Arizona adjacent to our manufacturing facility. The Company classifies this lease as a finance lease because the Lease Agreement contains a purchase option which the Company is reasonably certain to exercise. As of September 30, 2024 and December 31, 2023, assets associated with the finance lease were $79.3 million. As of September 30, 2024 and December 31, 2023, liabilities associated with the finance lease were $78.9 million and $80.6 million, respectively. Contemporaneously with the execution of the Lease Agreement, the Company entered into a sale agreement, pursuant to which the Company sold certain parcels of land for $31.7 million to the lessor and leased back these parcels of land under the Lease Agreement. The sale of the land and subsequent lease did not result in change in the transfer of control of the land; therefore, the sale-leaseback transaction is accounted for as a failed sale and leaseback financing obligation. The Company recorded $31.7 million of sales proceeds received as a financial liability within other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023. The balances for the operating and finance leases where the Company is the lessee are presented as follows within the Company’s condensed consolidated balance sheets (in thousands):
| September 30, 2024 |  | December 31, 2023
Operating leases: |  |  |
Right-of-use assets | $ | 220,616 |  |  | $ | 221,508 |
Other current liabilities | $ | 34,801 |  |  | $ | 28,431 |
Other long-term liabilities | 240,008 |  |  | 244,122 |
Total operating lease liabilities | $ | 274,809 |  |  | $ | 272,553 |
Finance leases: |  |  |
Property, plant and equipment, net | $ | 82,989 |  |  | $ | 85,055 |
Total finance lease assets | $ | 82,989 |  |  | $ | 85,055 |
Finance lease liabilities, current portion | $ | 6,921 |  |  | $ | 8,202 |
Finance lease liabilities, net of current portion | 75,027 |  |  | 77,653 |
Total finance lease liabilities | $ | 81,948 |  |  | $ | 85,855 |
The components of lease expense were as follows within the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease expense: |  |  |  |  |  |  |
Operating lease expense (1) | $ | 15,680 |  |  | $ | 14,000 |  |  | $ | 46,109 |  |  | $ | 40,578 |
Variable lease expense | 522 |  |  | 438 |  |  | 1,432 |  |  | 1,306 |
Finance lease expense: |  |  |  |  |  |  |
Amortization of leased assets | $ | 669 |  |  | $ | 1,326 |  |  | $ | 2,496 |  |  | $ | 4,133 |
Interest on lease liabilities | 1,161 |  |  | 1,204 |  |  | 3,495 |  |  | 3,677 |
Total finance lease expense | $ | 1,830 |  |  | $ | 2,530 |  |  | $ | 5,991 |  |  | $ | 7,810 |
Total lease expense | $ | 18,032 |  |  | $ | 16,968 |  |  | $ | 53,532 |  |  | $ | 49,694 |
(1) Excluded short-term leases, which were not material. Other information related to leases where the Company is the lessee was as follows:
| September 30, 2024 |  | December 31, 2023
Weighted-average remaining lease term (in years): |  |  |
Operating leases | 6.4 |  | 6.8
Finance leases | 1.9 |  | 2.6
Weighted-average discount rate: |  |  |
Operating leases | 11.89 | % |  | 11.01 | %
Finance leases | 5.71 | % |  | 5.59 | %
As of September 30, 2024, the maturities of the Company’s operating and finance lease liabilities (excluding short-term leases) were as follows (in thousands):
| Operating Leases |  | Finance Leases
2024 (remainder of the year) | $ | 15,005 |  |  | $ | 570 |
2025 | 66,800 |  |  | 6,817 |
2026 | 66,260 |  |  | 82,686 |
2027 | 57,597 |  |  | 245 |
2028 | 53,890 |  |  | 39 |
Thereafter | 140,208 |  |  | 8 |
Total minimum lease payments | 399,760 |  |  | 90,365 |
Less: Interest | (124,951) |  |  | (8,417) |
Present value of lease obligations | 274,809 |  |  | 81,948 |
Less: Current portion | (34,801) |  |  | (6,921) |
Long-term portion of lease obligations | $ | 240,008 |  |  | $ | 75,027 |
As of September 30, 2024, the Company entered into additional leases for facilities and equipment that have not yet commenced with undiscounted future lease payments of $18.9 million. The leases are expected to commence over the next twelve months.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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