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Leases

12 Months Ended

Dec. 31, 2021

Note 11 – Leases

The Company leases certain real estate and automobiles. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the consolidated balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception. All of our leases are operating leases.

Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company uses its imputed collateralized rate based on the information available at the commencement date in determining the present value of lease payments. Operating lease ROU assets are comprised of the lease liability plus prepaid rents and are reduced by lease incentives or deferred rents. The Company has lease agreements with non-lease components which are not bifurcated.

Some of our leases include one or more options to renew, with renewal terms that can extend the lease from one to five years. The exercise of a lease renewal option typically occurs at the discretion of both parties. Certain leases also include options to purchase the leased property at fair value. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease termination until it is reasonably certain that the Company will exercise that option. Certain of the Company’s lease agreements include payments adjusted periodically for inflation based on the consumer price index. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease cost details for the years ended December 31, 2021, December 31, 2020, and December 31, 2019 are as follows:



	Years ended December 31,
	2021		2020		2019

	(in thousands)
Building rent	$	2,564	$	2,978	$	3,397
Automobile rentals		1,505		1,576		1,531
Total net operating lease costs	$	4,069	$	4,554	$	4,928

Short-term lease costs and variable lease costs recognized during the years ended December 31, 2021, December 31, 2020, and December 31, 2019 are immaterial.

Supplemental consolidated balance sheet information related to our operating leases is as follows:


	December 31, 2021			December 31, 2020
in thousands
Leases
Assets		9,197		11,356
Operating lease right-of-use assets	$	9,197	$	11,356

Liabilities
Current
Operating lease liabilities	$	2,476	$	2,855

Noncurrent
Operating lease liabilities		10,180		12,399
Total lease liabilities	$	12,656	$	15,254

The weighted average remaining lease term for our operating leases is 6.4 years. The weighted-average discount rate for our operating leases is 5%.

Supplemental consolidated cash flow information related to leases is as follows:


	Years ended December 31,
	2021		2020		2019

		(in $ thousands)
Supplemental cash flow and other information related to leases:

Operating cash payments from operating leases	$	3,630	$	3,835	$	3,731

ROU assets obtained in exchange for new operating lease liabilities	$	589	$	3,549	$	4,924

Maturities of our operating leases are as follows:


	As of December 31, 2021
		(in $ thousands)
2022	$	3,040
2023		2,599
2024		1,823
2025		1,693
2026		1,629
Later years		4,352
Less imputed interest		(2,480)
Total lease liabilities	$	12,656