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LEASES | 6 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
LEASES | LEASES Lease Commitments We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The following table reflects the balance sheet presentation of our lease assets and liabilities:
Leases |  | Classification |  | June 30, 2023 |  | December 31, 2022
Assets: |  |  |  |  |  |
Operating |  | Right-of-use assets |  | $ | 170,733 |  |  | $ | 161,822 |
Total right-of-use assets |  |  |  | $ | 170,733 |  |  | $ | 161,822 |
Liabilities: |  |  |  |  |  |
Current: |  |  |  |  |  |
Operating |  | Accounts payable and other current liabilities |  | $ | 24,591 |  |  | $ | 24,075 |
Non-Current: |  |  |  |  |  |
Operating |  | Long-term portion of operating lease liabilities |  | 138,282 |  |  | 126,695 |
Total lease liabilities |  |  |  | $ | 162,873 |  |  | $ | 150,770 |
The weighted-average remaining lease term and discount rate for the Company's operating leases are as follows:
| June 30, 2023 | December 31, 2022
Weighted average lease term-operating leases | 14.0 years | 14.6 years
Weighted average discount rate-operating leases | 14.0% | 14.0%
The following table provides information related to the lease costs of finance and operating leases for the three and six months ended June 30, 2023 and 2022:
Lease Expense |  | Income Statement Classification |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating |  | Selling, general and administrative expenses |  | $ | 8,525 |  |  | $ | 7,565 |  |  | $ | 16,674 |  |  | $ | 14,428 |
Finance: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | Depreciation and amortization expense |  | — |  |  | — |  |  | — |  |  | 41 |
Interest on lease liabilities |  | Interest expense |  | — |  |  | — |  |  | — |  |  | 124 |
Total lease costs |  |  |  | $ | 8,525 |  |  | $ | 7,565 |  |  | $ | 16,674 |  |  | $ | 14,593 |
In connection with the acquisition of the RideNow companies on August 31, 2021 (the "RideNow Transaction"), the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at June 30, 2023:
Leases |  | Balance Sheet Classification |  | June 30, 2023 |  | December 31, 2022
Assets: |  |  |  |  |  |
Right of use assets – related party |  |  |  | $ | 104,376 |  |  | $ | 105,264 |
All other right-of-use assets |  |  |  | 66,357 |  |  | 56,558 |
Total |  | Right-of-use assets |  | $ | 170,733 |  |  | $ | 161,822 |
Liabilities: |  |  |  |  |  |
Current: |  |  |  |  |  |
Current portion of lease liabilities – related party |  |  |  | $ | 13,997 |  |  | $ | 14,492 |
Current portion of lease liabilities – all other leases |  |  |  | 10,594 |  |  | 9,583 |
Total |  | Accounts payable and other current liabilities |  | $ | 24,591 |  |  | $ | 24,075 |
Non-Current: |  |  |  |  |  |
Long-term portion of lease liabilities – related party |  |  |  | 96,538 |  |  | 93,713 |
Long-term portion of lease liabilities – all other leases |  |  |  | 41,744 |  |  | 32,982 |
Total |  | Operating lease liabilities |  | $ | 138,282 |  |  | $ | 126,695 |
Total lease liabilities |  |  |  | $ | 162,873 |  |  | $ | 150,770 |
Supplemental cash flow information related to operating leases for the six months ended June 30, 2023 and 2022 was as follows:
|  |  | Six Months Ended June 30,
|  |  | 2023 |  | 2022
Cash payments for operating leases |  |  | $ | 14,244 |  |  | $ | 12,240 |
ROU assets obtained in exchange for new operating lease liabilities |  |  | $ | 14,383 |  |  | $ | 15,103 |
The following table summarizes the future minimum payments for operating leases at June 30, 2023 due in each year ending December 31:
Year | Operating Leases
2023 | $ | 15,394 |
2024 | 30,314 |
2025 | 28,601 |
2026 | 26,927 |
2027 | 26,131 |
Thereafter | 282,415 |
Total lease payments | 409,782 |
Less: imputed interest | (246,909) |
Present value of operating lease liabilities | $ | 162,873 |
LEASES | LEASES Lease Commitments We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The following table reflects the balance sheet presentation of our lease assets and liabilities:
Leases |  | Classification |  | June 30, 2023 |  | December 31, 2022
Assets: |  |  |  |  |  |
Operating |  | Right-of-use assets |  | $ | 170,733 |  |  | $ | 161,822 |
Total right-of-use assets |  |  |  | $ | 170,733 |  |  | $ | 161,822 |
Liabilities: |  |  |  |  |  |
Current: |  |  |  |  |  |
Operating |  | Accounts payable and other current liabilities |  | $ | 24,591 |  |  | $ | 24,075 |
Non-Current: |  |  |  |  |  |
Operating |  | Long-term portion of operating lease liabilities |  | 138,282 |  |  | 126,695 |
Total lease liabilities |  |  |  | $ | 162,873 |  |  | $ | 150,770 |
The weighted-average remaining lease term and discount rate for the Company's operating leases are as follows:
| June 30, 2023 | December 31, 2022
Weighted average lease term-operating leases | 14.0 years | 14.6 years
Weighted average discount rate-operating leases | 14.0% | 14.0%
The following table provides information related to the lease costs of finance and operating leases for the three and six months ended June 30, 2023 and 2022:
Lease Expense |  | Income Statement Classification |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating |  | Selling, general and administrative expenses |  | $ | 8,525 |  |  | $ | 7,565 |  |  | $ | 16,674 |  |  | $ | 14,428 |
Finance: |  |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | Depreciation and amortization expense |  | — |  |  | — |  |  | — |  |  | 41 |
Interest on lease liabilities |  | Interest expense |  | — |  |  | — |  |  | — |  |  | 124 |
Total lease costs |  |  |  | $ | 8,525 |  |  | $ | 7,565 |  |  | $ | 16,674 |  |  | $ | 14,593 |
In connection with the acquisition of the RideNow companies on August 31, 2021 (the "RideNow Transaction"), the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at June 30, 2023:
Leases |  | Balance Sheet Classification |  | June 30, 2023 |  | December 31, 2022
Assets: |  |  |  |  |  |
Right of use assets – related party |  |  |  | $ | 104,376 |  |  | $ | 105,264 |
All other right-of-use assets |  |  |  | 66,357 |  |  | 56,558 |
Total |  | Right-of-use assets |  | $ | 170,733 |  |  | $ | 161,822 |
Liabilities: |  |  |  |  |  |
Current: |  |  |  |  |  |
Current portion of lease liabilities – related party |  |  |  | $ | 13,997 |  |  | $ | 14,492 |
Current portion of lease liabilities – all other leases |  |  |  | 10,594 |  |  | 9,583 |
Total |  | Accounts payable and other current liabilities |  | $ | 24,591 |  |  | $ | 24,075 |
Non-Current: |  |  |  |  |  |
Long-term portion of lease liabilities – related party |  |  |  | 96,538 |  |  | 93,713 |
Long-term portion of lease liabilities – all other leases |  |  |  | 41,744 |  |  | 32,982 |
Total |  | Operating lease liabilities |  | $ | 138,282 |  |  | $ | 126,695 |
Total lease liabilities |  |  |  | $ | 162,873 |  |  | $ | 150,770 |
Supplemental cash flow information related to operating leases for the six months ended June 30, 2023 and 2022 was as follows:
|  |  | Six Months Ended June 30,
|  |  | 2023 |  | 2022
Cash payments for operating leases |  |  | $ | 14,244 |  |  | $ | 12,240 |
ROU assets obtained in exchange for new operating lease liabilities |  |  | $ | 14,383 |  |  | $ | 15,103 |
The following table summarizes the future minimum payments for operating leases at June 30, 2023 due in each year ending December 31:
Year | Operating Leases
2023 | $ | 15,394 |
2024 | 30,314 |
2025 | 28,601 |
2026 | 26,927 |
2027 | 26,131 |
Thereafter | 282,415 |
Total lease payments | 409,782 |
Less: imputed interest | (246,909) |
Present value of operating lease liabilities | $ | 162,873 |

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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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