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3/25/22, 9:42 AM
<br />Table of Contents
<br />Note 19 - Joint Venture
<br />road -20210930
<br />In November 2017, one of the Company's wholly owned subsidiaries entered into a joint venture agreement (the "JV') with a third
<br />party for the sole purpose of bidding on and performing a construction project for the Alabama Department of Transportation. The
<br />Company and the third party each own a 50% partnership interest in the JV and share revenue and expenses equally. The JV is jointly
<br />managed by representatives of the Company and the third party, and all labor, material and equipment required to perform the contract
<br />is subcontracted, with both of the participants of the JV performing some portion of the subcontracted work.
<br />The Company accounts for this joint venture as an equity method investment in accordance with GAAP. At September 30, 2021 and
<br />2020, the Company's investment in the JV was $0.1 million and $0.2 million, respectively, which is reflected as "Investment in joint
<br />venture" on the Company's Consolidated Balance Sheets. During the fiscal years ended September 30, 2021, 2020 and 2019, the
<br />Company recognized $0.0 million, $0.6 million and $1.3 million, respectively, of pre-tax income, representing its 50% interest in the
<br />earnings of the JV, which is reflected as "Earnings from investment in joint venture" on the Company's Consolidated Statements of
<br />Comprehensive Income. The income tax impact attributable to the Company's investment in the JV is included within the provision for
<br />income taxes in the Company's Consolidated Statements of Comprehensive Income.
<br />Note 20 - Leases
<br />The Company leases certain facilities, office space, vehicles and equipment. As of September 30, 2021, operating leases under Topic
<br />842 were included in (i) operating lease right -of use assets, (ii) current portion of operating lease liabilities and (iii) operating lease
<br />liabilities, net of current portion on the Company's Consolidated Balance Sheets in the amounts of $6.5 million, $1.4 million and
<br />$5.3 million, respectively. As of September 30, 2021, the Company did not have any lease contracts that had not yet commenced but
<br />had created significant rights and obligations.
<br />The components of lease expense were as follows (in thousands):
<br />Operating lease cost
<br />Short-term lease cost
<br />Total lease expense
<br />For the Fiscal Year Ended September 30,
<br />2021 2020
<br />2,475 $ 3,498
<br />13,346 13,374
<br />15,821 16,872
<br />Short-term leases (those with terms of 12 months or less) are not capitalized but are expensed on a straight-line basis over the lease
<br />term. The majority of our short-term leases relate to equipment used on construction projects. These leases are entered into at periodic
<br />rental rates for an unspecified duration and typically have a termination for convenience provision.
<br />As of September 30, 2021, the weighted -average remaining term of the Company's operating leases was 9.1 years, and the weighted -
<br />average discount rate was 3.76%. As of September 30, 2021, the lease liability was equal to the present value of the remaining lease
<br />payments, discounted using the incremental borrowing rate on the Company's secured debt using a single maturity discount rate, as
<br />such rate is not materially different from the discount rate applied to each of the leases in the portfolio.
<br />The following table summarizes the Company's undiscounted lease liabilities outstanding as of September 30, 2021 (in thousands):
<br />Fiscal Year Amount
<br />2022 $ 1,614-
<br />2023
<br />2 1,223
<br />024
<br />929
<br />2025
<br />623
<br />2026
<br />600
<br />Thereafter 3,115
<br />Total future minimum lease payments $ 8,104
<br />Less: imputed interest 1,407
<br />Total $ 6,697
<br />httpsJ/www.see.gov/Archives/edgar/data/0001718227/000171822721000107/road-20210930.htm 123/144
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