LEASES
The Company’s leases are primarily for office space, the largest being an office building lease for the Company’s Lakewood, Colorado corporate offices. As of December 31, 2021, this lease has a remaining term of approximately 17 months and includes an option to extend the lease for one five-year term. Certain of our other leases include variable payments for lessor operating expenses that are not included within right-of-use (“ROU”) assets and lease liabilities in the Consolidated Balance Sheets. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.
Beginning January 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Operating leases in effect prior to January 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of January 1, 2019. Because most of the Company's leases do not provide an explicit rate of return, the Company's incremental secured borrowing rate based on lease term information available at the commencement date of the lease will be used in determining the present value of lease payments. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in General and Administration expenses. Short-term leases, which have an initial term of 12 months or less, are not recorded in the Consolidated Balance Sheets.
Total lease cost includes the following components:
| | | | | | | | | | | | | | | | | |
| Years ended December 31, |
| 2021 | | 2020 | | 2019 |
| Operating leases | $ | 308 | | | $ | 339 | | | $ | 381 | |
| Short-term leases | 324 | | | 297 | | | 297 | |
| Sublease income | — | | | — | | | (56) | |
| Total lease expense | $ | 632 | | | $ | 636 | | | $ | 622 | |
The weighted average remaining lease term and weighted average discount rate were as follows:
| | | | | | | | | | | | | | | | | |
| Years ended December 31, |
| 2021 | | 2020 | | 2019 |
| Weighted average remaining lease term of operating leases | 1.4 years | | 2.4 years | | 3.3 years |
| Weighted average discount rate of operating leases | 9.0 | % | | 9.0 | % | | 9.0 | % |
| | | | | |
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | | | | | | |
| Years ended December 31, |
| 2021 | | 2020 | | 2019 |
| Operating cash flow information: | | | | | |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 343 | | | $ | 367 | | | $ | 333 | |
Future minimum payments of operating lease liabilities as of December 31, 2021 are as follows:
| | | | | |
| Years ending December 31: | |
| 2022 | $ | 350 | |
| 2023 | 147 | |
| 2024 | — | |
| 2025 | — | |
| 2026 | — | |
| Thereafter | — | |
| Total lease payments | $ | 497 | |
| Less: Interest | (28) | |
| Present value of lease liabilities | $ | 469 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.