The Company leases certain operating equipment and office facilities under long-term operating leases expiring at various dates through 2030. Leases with an initial term greater than twelve months are recorded on the Company’s balance sheet as an operating or finance lease asset and operating or finance lease liability. Operating leases are included in operating lease assets, operating lease liabilities, and operating lease liabilities noncurrent in the Company's consolidated balance sheets. Finance leases are included in other assets, lease liabilities, and other in the Company's consolidated balance sheets. and are measured at the present value of lease payments over the lease term. Substantially all of the Company’s leases are classified as operating leases. Leases with an initial term of twelve months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The equipment leases contain renewal or purchase options that specify prices at the then fair value upon the expiration of the lease terms. The leases also contain default provisions that are triggered by an acceleration of debt maturity under the terms of the Company’s Amended Credit Agreement, or, in certain instances, cross default to other equipment leases and certain lease arrangements require that the Company maintain certain financial ratios comparable to those required by its Amended Credit Agreement. Additionally, the leases typically contain provisions whereby the Company indemnifies the lessors for the tax treatment attributable to such leases based on the tax rules in place at lease inception. The tax indemnifications do not have a contractual dollar limit. To date, no lessors have asserted any claims against the Company under these tax indemnification provisions.

The exercise of lease renewal options is at the Company’s sole discretion and is considered in the measurement of operating lease assets and operating lease liabilities when it is reasonably certain the Company will exercise the option. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

On November 1, 2023, the Company entered into a purchase agreement to sell certain vessels (the “Property”) for gross cash proceeds of $29.5 million. Concurrent with the sale of these certain vessels, the Company entered into a seven-year lease at an annual rental rate of approximately $4.2 million. The Company determined that the transactions represented a sale and leaseback and, accordingly, established new operating lease right of use assets and operating lease liabilities. The lease did not include an implicit rate of return; therefore, the Company used an incremental borrowing rate. Under the leaseback agreement, the Company has the option to i) purchase the Property after six years with an early buyout option; ii) purchase the Property at the end of the lease at the then fair value; iii) renew the lease at the then fair market value or iv) return the Property to the purchaser.

The Company’s lease costs are recorded in costs of contract revenues and general and administrative expenses. For the years ended December 31, 2023, 2022 and 2021, respectively, lease costs are as follows:



	2023		2022		2021
Operating lease costs	$	29,945	$	24,224	$	24,427
Finance Lease costs
Amortization of finance lease assets		95		—		—
Interest expense on lease liabilities		24		—		—
Short-term lease costs		68,119		94,842		95,957
Total lease cost	$	98,183	$	119,066	$	120,384

As recorded on the balance sheet, the Company’s maturity analysis of its operating lease liabilities as of December 31, 2023 is as follows:


	Operating			Finance
2024	$	31,465		$	1,291
2025		23,751			1,291
2026		12,843			1,216
2027		10,984			355
2028		9,601			—
Thereafter		12,574			—
Minimum lease payments		101,218			4,153
Imputed interest		(11,087	)		(480	)
Present value of minimum lease liabilities	$	90,131		$	3,673

As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Additional information related to the Company’s leases as of December 31, 2023, 2022 and 2021 respectively, is as follows:


	2023			2022			2021
Operating
Weighted average remaining lease term (years)		4.5			4.2			4.4
Weighted average discount rate		5.6	%		4.7	%		5.1	%
Finance
Weighted average remaining lease term (years)		3.3			—			—
Weighted average discount rate		7.9	%		—			—

Supplemental balance sheet information related to finance leases as of December 31, 2023 and 2022 respectively, is as follows:


	2023			2022
Finance lease assets:
Other noncurrent assets	$	3,757		$	—
Accumulated depreciation		(95	)		—
Total other noncurrent assets	$	3,662		$	—

Finance lease liabilities:
Accrued expenses		1,047			—
Other noncurrent liabilities		2,626			—
Total finance lease liabilities	$	3,673		$	—

Supplemental cash flow information related to leases during the years ended December 31, 2023, 2022 and 2021 respectively, is as follows:


	2023			2022			2021
Operating cash flows from operating leases	$	(29,016	)	$	(22,775	)	$	(22,591	)
Operating cash flows from finance leases		(24	)		—			—
Financing cash flows from finance leases		(84	)		—			—
Lease liabilities arising from obtaining new operating lease assets		24,808			57,618			24,191
Lease liabilities arising from obtaining new finance lease assets		3,757			—			—