Leases

12 Months Ended

Dec. 31, 2021

LEASES

Centrus leases facilities and equipment under operating leases. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company has facility leases with terms greater than 12 months, and the Company records the related asset and obligation at the present value of lease payments over the term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets exclude lease incentives. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term. The weighted-average remaining lease term was 5.3 years at December 31, 2021, with maturity dates ranging from December 31, 2025 to September 2027, and the weighted-average discount rate was 12.5%. Lease expense totaled a credit of $0.5 million in 2021 and expense of $2.6 million for 2020. Lease expense primarily related to operating leases for the years ended December 31, 2021 and 2020 includes a $2.0 million and $0.3 million credit, respectively, from DOE for true-up of prior years’ lease expense. Other amounts related to short-term lease expense were insignificant. Operating lease expense is included in Cost of Sales, Selling, General and Administrative Expenses and Advance Technology Costs on the Statement of Operations. Cash paid for amounts included in operating cash flows for operating leases was $2.4 million for the year ended December 31, 2021.

The Company leases facilities and related personal property near Piketon, Ohio from DOE under a lease which is classified as operating. The lease was amended on May 6, 2021, resulting in a decrease in the monthly lease payment beginning with the June 2021 payment. The Company accounted for the amendment as a modification and remeasured the remaining future lease payments through May 31, 2022, resulting in the recording of a $1.0 million reduction in lease assets and liabilities. In September 2021, the lease was extended through December 31, 2025. The Company did not remeasure the lease as under the terms of the lease amendment it may be terminated early upon completion of the work under the HALEU Contract which is expected to occur by June 1, 2022. Any facilities, centrifuges or other equipment constructed or installed under contract with DOE will be owned by DOE and may be returned to DOE in an “as is” condition at the end of the lease term, and DOE would be responsible for its D&D.

Operating Lease Assets and Liabilities

The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheet (in millions).


	December 31, 2021		Classification on the Balance Sheet
Lease assets	$	2.1	Other long-term assets
Lease liabilities:
Current	$	0.9	Accounts payable and accrued liabilities
Non-current	3.0		Other long-term liabilities
Total lease liabilities	$	3.9

Maturity of Operating Lease Liabilities

The table below reconciles undiscounted payments for operating leases with terms greater than 12 months to the operating lease liabilities recorded on the balance sheet (in millions).


2022	$	1.3
2023	1.0
2024	1.0
2025	1.0
2026	1.0
Thereafter	0.8
Total lease payments	6.1
Less imputed interest	2.2
Present value of lease payments	$	3.9