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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

(6) Leases

Lease Overview

We lease certain pipelines, storage tanks, railcars, office space, land, and equipment across our refining, fertilizer, and corporate operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements.

Balance Sheet Summary as of September 30, 2021 and December 31, 2020

The following tables summarize the right-of-use (“ROU”) asset and lease liability balances for the Company’s operating and finance leases at September 30, 2021 and December 31, 2020:

			September 30, 2021												December 31, 2020
(in millions)			Operating Leases						Finance Leases						Operating Leases						Finance Leases
ROU assets, net
Pipeline and storage			$	18					$	24					$	15					$	26
Railcars			7						—						8						—
Real estate and other			13						18						14						21
Lease liability
Pipelines and storage			$	18					$	36					$	16					$	38
Railcars			7						—						8						—
Real estate and other			13						20						14						22

Lease Expense Summary for the Three and Nine Months Ended September 30, 2021 and 2020

We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the three and nine months ended September 30, 2021 and 2020, we recognized lease expense comprised of the following components:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Operating lease expense			$	3					$	4					$	11					$	13
Finance lease expense:
Amortization of ROU asset			$	2					$	2					$	5					$	5
Interest expense on lease liability			1						1						4						4
Short-term lease expense			$	2					$	2					$	5					$	6

Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and liabilities:

			September 30, 2021												December 31, 2020
			Operating Leases						Finance Leases						Operating Leases						Finance Leases
Weighted-average remaining lease term			4.3 years						7.4 years						3.1 years						8.1 years
Weighted-average discount rate			5.5		%				9.0		%				5.5		%				9.0		%

Maturities of Lease Liabilities

The following summarizes the remaining minimum lease payments through maturity of the Company’s lease liabilities at September 30, 2021:

(in millions)			Operating Leases						Finance Leases
Remainder of 2021			$	3					$	3
2022			13						11
2023			12						10
2024			7						10
2025			2						10
Thereafter			5						33
Total lease payments			42						77
Less: imputed interest			(4)						(21)
Total lease liability			$	38					$	56

Leases

(6) Leases

Lease Overview

We lease certain pipelines, storage tanks, railcars, office space, land, and equipment across our refining, fertilizer, and corporate operations. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Certain of our lease agreements include rental payments which are adjusted periodically for factors such as inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, we do not have any material lessor or sub-leasing arrangements.

Balance Sheet Summary as of September 30, 2021 and December 31, 2020

The following tables summarize the right-of-use (“ROU”) asset and lease liability balances for the Company’s operating and finance leases at September 30, 2021 and December 31, 2020:

			September 30, 2021												December 31, 2020
(in millions)			Operating Leases						Finance Leases						Operating Leases						Finance Leases
ROU assets, net
Pipeline and storage			$	18					$	24					$	15					$	26
Railcars			7						—						8						—
Real estate and other			13						18						14						21
Lease liability
Pipelines and storage			$	18					$	36					$	16					$	38
Railcars			7						—						8						—
Real estate and other			13						20						14						22

Lease Expense Summary for the Three and Nine Months Ended September 30, 2021 and 2020

We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization). For the three and nine months ended September 30, 2021 and 2020, we recognized lease expense comprised of the following components:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in millions)			2021						2020						2021						2020
Operating lease expense			$	3					$	4					$	11					$	13
Finance lease expense:
Amortization of ROU asset			$	2					$	2					$	5					$	5
Interest expense on lease liability			1						1						4						4
Short-term lease expense			$	2					$	2					$	5					$	6

Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and liabilities:

			September 30, 2021												December 31, 2020
			Operating Leases						Finance Leases						Operating Leases						Finance Leases
Weighted-average remaining lease term			4.3 years						7.4 years						3.1 years						8.1 years
Weighted-average discount rate			5.5		%				9.0		%				5.5		%				9.0		%

Maturities of Lease Liabilities

The following summarizes the remaining minimum lease payments through maturity of the Company’s lease liabilities at September 30, 2021:

(in millions)			Operating Leases						Finance Leases
Remainder of 2021			$	3					$	3
2022			13						11
2023			12						10
2024			7						10
2025			2						10
Thereafter			5						33
Total lease payments			42						77
Less: imputed interest			(4)						(21)
Total lease liability			$	38					$	56

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- References

No definition available.

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- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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X

- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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