ARKO Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases

Leases

6 Months Ended

Jun. 30, 2022

4. Leases

As of June 30, 2022, the Company leased 1,129 of the convenience stores that it operates, 161 independent dealer locations and certain office and storage spaces, 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 and fuel dispensers.

The components of lease cost recorded on the condensed consolidated statements of operations were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Finance lease cost:
Depreciation of right-of-use assets	$	3,037	$	3,410	$	6,084	$	6,727
Interest on lease liabilities		4,260		4,374		8,631		8,820
Operating lease costs included in store operating expenses		34,358		32,491		68,653		64,825
Operating lease costs included in general and administrative expenses		351		458		738		854
Lease cost related to variable lease payments, short-term leases and leases of low value assets		569		458		1,213		833
Right-of-use asset impairment charges		—		412		—		523
Total lease costs	$	42,575	$	41,603	$	85,319	$	82,582