ARKO 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, 2021

5. Leases

As of September 30, 2021, the Company leased 1,169 of the convenience stores that it operates, 159 dealer locations and certain office spaces in the U.S., including land and buildings in certain cases. Most of the lease agreements are for long-term periods, ranging from 15 to 20 years, and generally include several renewal options for extension periods for five to 25 years each. Additionally, the Company leases certain store equipment, office equipment, automatic tank gauges, store lighting and fuel dispensers.

Under ASC 842, the components of lease cost recorded on the condensed consolidated statements of operations were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)
Finance lease cost:
Depreciation of right-of-use assets	$	3,390	$	3,098	$	10,117	$	9,446
Interest on lease liabilities		4,348		4,275		13,168		12,960
Operating lease costs included in store operating expenses		32,709		26,590		97,534		80,429
Operating lease costs included in general and administrative expenses		425		337		1,279		984
Lease cost related to variable lease payments, short-term leases and leases of low value assets		674		334		1,507		654
Right-of-use asset impairment charges		507		501		1,030		1,430
Total lease costs	$	42,053	$	35,135	$	124,635	$	105,903