Tailwind Two Acquisition Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

9 Months Ended

Sep. 30, 2022

Note 15 Leases

As part of normal operations, the Company leases real estate and equipment from various counterparties with lease terms and maturities extending through 2032. The Company applies the practical expedient to not separate the lease and non-lease components and accounts for the combined component as a lease. Additionally, the Company’s right-of-use assets and lease liabilities include leases with lease terms of 12 months or less.

The Company’s right-of-use assets and lease liabilities primarily represent lease payments that are fixed at the commencement of a lease and variable lease payments that depend on an index or rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the non-cancelable period, including periods in which termination options are reasonably certain of not being exercised and periods in which renewal options are reasonably certain of being exercised. The discount rate for a lease is determined using the Company’s incremental borrowing rate that coincides with the lease term at the commencement of a lease. The incremental borrowing rate is estimated based on the Company's recent financing transactions.

Lease payments that are neither fixed nor dependent on an index or rate and vary because of changes in usage or other factors are included in variable lease costs. Variable lease costs are recorded in the period in which the obligation is incurred and primarily relate to utilities, maintenance, and repair costs.

The Company’s leases do not contain material residual value guarantees or restrictive covenants. The Company is not a lessor in any leases and does not sublease.

The following table presents the amounts reported in the Company’s condensed consolidated balance sheets related to operating and finance leases as of the dates presented:


(in thousands)	Classification	September 30, 2022		January 1, 2022
Right-of-use assets:
Operating	Other assets	$	16,438	$	6,550
Finance	Property, plant, and equipment, net		424		48
Total right-of-use assets		$	16,862	$	6,598

Lease liabilities
Operating	Accrued expenses and other current liabilities	$	1,253	$	166
Finance	Current portion of long-term debt		88		14
Operating	Other liabilities		19,255		7,962
Finance	Long-term debt		344		39
Total lease liabilities		$	20,940	$	8,181

The following is a summary of the Company’s lease cost for the periods presented:



Lease cost (in thousands)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Operating lease cost	$	1,824	$	4,934
Finance lease cost
Amortization of right-of-use assets		19		26
Interest on lease liabilities		5		9
Variable lease costs		196		670
Total lease cost	$	2,044	$	5,639

The following is a summary of the cash flows and supplemental information associated with the Company’s leases for the period presented:


Other information (in thousands)	Nine Months Ended September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,610
Operating cash flows from finance leases		9
Financing cash flows from finance leases		22
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		10,544
Finance leases		402

The following is a summary of the weighted-average lease term and discount rate for operating and finance leases as of the date presented:


Lease term and discount rate	September 30, 2022
Weighted-average remaining lease term (years)
Operating leases		7.0
Finance leases		4.7
Weighted-average discount rate
Operating leases		30.47	%
Finance leases		6.66	%

The following is a maturity analysis related to the Company’s operating and finance leases as of September 30, 2022:


Maturity of lease liabilities (in thousands)	Operating Leases		Finance Leases
2022	$	1,574	$	28
2023		6,996		113
2024		7,121		103
2025		7,104		101
2026		7,147		99
Thereafter		22,884		53
Total lease payments		52,826		497
Less interest		32,318		65
Total lease liabilities	$	20,508	$	432

The following is a maturity analysis related to the Company’s operating and finance leases as of December 31, 2021, which is presented in accordance with ASC 840, Leases:


(in thousands)	Operating Leases		Finance Leases
2022	$	3,484	$	21
2023		4,865		21
2024		4,970		11
2025		4,928		8
2026		4,896		7
Thereafter		5,167		-
Total lease payments		28,310		68
Less interest on finance leases		-		15
Total	$	28,310	$	53