VSE Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Leases

Leases

12 Months Ended

Dec. 31, 2022

Our operating lease cost included the following components for the year ended December 31, (in thousands):


	2022		2021		2020
Operating lease cost	$	6,804	$	5,868	$	5,032
Short-term lease cost	204		202		622
Less: sublease income	(294)		(152)		(666)
Total lease cost, net	$	6,714	$	5,918	$	4,988

Our lease arrangements do not contain any material residual guarantees, variable payment provisions, or restrictive covenants. In 2020, we closed on a sale-leaseback agreement involving land and an office building utilized by our Aviation segment to conduct operations in Miami, Florida. Under the agreement, the land and building, with a net book value of $1.3 million was sold for a sale price of $2.6 million and leased back under a 6-year term operating lease commencing upon the closing of the transaction. The lease provides us with an option to extend the lease upon the expiration of its term in April 2026 for two additional five-year periods. In connection with the sale and leaseback transaction, we recognized a gain of $1.1 million, net of selling expenses.

The table below summarizes future minimum lease payments under operating leases, recorded on the balance sheet, as of December 31, 2022 (in thousands):


Year ending December 31,
2023	$	9,217
2024	9,424
2025	9,192
2026	7,785
2027	3,666
Thereafter	6,843
Minimum lease payments	46,127
Less: imputed interest	(6,533)
Present value of minimum lease payments	39,594
Less: current portion of lease liabilities(1)	(7,254)
Long-term lease liabilities	$	32,340

(1) Current portion of lease liabilities are presented within Accrued expenses and other current liabilities on our consolidated balance sheets. Refer to Note (9) "Accrued Expenses and Other Current Liabilities."

Other supplemental operating lease information for the year ended December 31, was as follows (in thousands):


	2022		2021		2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	7,372	$	6,309	$	3,681
Right-of-use assets obtained in exchange for new operating lease liabilities	$	12,295	$	11,175	$	4,728

The weighted-average remaining lease term and the weighted-average discount rate was 5.1 years and 5.5% as of December 31, 2022, respectively, and 5.1 years and 4.8% as of December 31, 2021, respectively.