Global Water Resources Inc
For the period ended Dec 31, 2024. Filed Mar 5, 2025.
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FY2024 · Filed Mar 5, 2025
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12. LEASES
- LEASES
The Company measures the lease liability at the present value of future lease payments, excluding variable payments based on usage or performance, and calculates the present value using implicit rates. Leases with an initial term of twelve months or less are not recorded on the balance sheet.
For the years ended December 31, 2024, the Company entered into twenty new vehicle finance leases with 48-month terms and an aggregate total of approximate $0.8 million, all of which include a purchase option, andone new office lease with a 129-month term that is classified as an operating lease.
For the year ended December 31, 2023, the Company entered into five new vehicle finance leases with 48-month terms and an aggregate total of approximately $0.2 million, all of which include a purchase option, andone new office equipment lease with a 60-month term for approximately $21,000.
Rent expense arising from operating leases totaled approximately $403,000 and $394,000 for the years ended December 31, 2024 and 2023, respectively.
The ROU assets recorded represents the Company’s right to use an underlying asset for the lease term and ROU lease liability represents the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments.
ROU assets at December 31, 2024 and 2023 consist of the following (in thousands):
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Finance leases | $1,141 | $561 |
| Operating leases | 1,016 | 1,180 |
| Total | $2,157 | $1,741 |
Lease liabilities at December 31, 2024 and 2023 consist of the following (in thousands):
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Finance leases | $1,136 | $623 |
| Operating leases | 1,185 | 1,300 |
| Total | $2,321 | $1,923 |
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Lease costs for the years ended December 31, 2024 and 2023 were as follows (in thousands):
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Finance lease cost | ||
| Amortization of right-of-use assets | $198 | $84 |
| Interest on lease liabilities | 44 | 19 |
| Total finance lease cost | 242 | 103 |
| Operating leases | 377 | 374 |
| Total lease cost | $619 | $477 |
On the consolidated statements of operations, amortization of right-of-use assets is included in Depreciation and amortization, interest on finance lease liabilities is included in Interest expense and operating leases are included in both Operations and maintenance and General and administrative expenses, depending on the primary use of the leased asset.
Other pertinent information related to leases was as follows:
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Weighted average remaining lease term (years) | ||
| Finance leases | 3.1 | 3.2 |
| Operating leases | 3.1 | 5.1 |
| Weighted average discount rate | ||
| Finance leases | 4.5% | 5.7% |
| Operating leases | 4.0% | 3.5% |
At December 31, 2024, the maturity analysis of lease liabilities is as follows (in thousands):
| Finance Lease Obligations · Operating Lease Obligations | ||
|---|---|---|
| 2025 | $424 | $238 |
| 2026 | 378 | 552 |
| 2027 | 282 | 217 |
| 2028 | 143 | 49 |
| 2029 | — | 46 |
| Thereafter | — | 131 |
| Subtotal | 1,227 | 1,233 |
| Less: | ||
| Amount representing interest | 91 | 48 |
| Total | $1,136 | $1,185 |
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