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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

The Company leases certain grain handling and storage facilities, ethanol storage terminals. warehouse space, railcars, locomotives, barges, office space, machinery and equipment, vehicles and information technology equipment under operating leases. Lease expense for these leases is recognized within the Consolidated Statements of Operations on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

The following table summarizes the amounts recognized in the Company's Condensed Consolidated Balance Sheet related to leases:

(in thousands)		Condensed Consolidated Balance Sheet Classification		September 30, 2019
Assets
Operating lease assets		Right of use assets, net		$	70,773
Finance lease assets		Property, plant and equipment, net		24,003
Finance lease assets		Rail Group assets leased to others, net		17,136
Total leased assets				$	111,912
Liabilities
Current operating leases		Accrued expenses and other current liabilities		24,544
Non-current operating leases		Long-term lease liabilities		47,299
Total operating lease liabilities				$	71,843
Current finance leases		Current maturities of long-term debt		17,331
Non-current finance leases		Long-term debt		21,925
Total finance lease liabilities				$	39,256
Total lease liabilities				$	111,099

The components of lease cost recognized within the Company's Condensed Consolidated Statement of Operations were as follows:

(in thousands)		Condensed Consolidated Statement of Operations Classification		Three months ended September 30, 2019				Nine months ended September 30, 2019
Lease cost:
Operating lease cost		Cost of sales and merchandising revenues		$	5,761			$	18,881
Operating lease cost		Operating, administrative and general expenses		3,417				10,251
Finance lease cost
Amortization of right-of-use assets		Operating, administrative and general expenses		443				1,042
Interest expense on lease liabilities		Interest expense		236				779
Other lease cost (a)		Cost of sales and merchandising revenues		193				731
Other lease cost (a)		Operating, administrative and general expenses		61				201
Total lease cost				$	10,111			$	31,885

(a) Other lease cost includes short-term lease costs and variable lease costs.

The Company often has the option to renew lease terms for buildings and other assets. The exercise of a lease renewal option is generally at the sole discretion of the Company. In addition, certain lease agreements may be terminated prior to their original expiration date at the discretion of the Company. Each renewal and termination option is evaluated at the lease commencement date to determine if the Company is reasonably certain to exercise the option on the basis of economic factors. The table below summarizes the weighted average remaining lease terms as of September 30, 2019.

Weighted Average Remaining Lease Term
Operating leases	4.2 years
Finance leases	6.9 years

The discount rate implicit within our leases is generally not determinable and therefore the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for each lease is determined based on its term and the currency in which lease payments are made, adjusted for the impacts of collateral. The table below summarizes the weighted average discount rate used to measure the Company's lease liabilities as of September 30, 2019.

Weighted Average Discount Rate
Operating leases	4.16	%
Finance leases	3.78	%

Supplemental Cash Flow Information Related to Leases

(in thousands)			September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	24,982
Operating cash flows from finance leases			405
Financing cash flows from finance leases			973
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			6,365
Finance leases			16,498

Maturity Analysis of Leases Liabilities

	September 30, 2019
(in thousands)	Operating Leases				Finance Leases				Total
2019 (excluding the nine months ended September 30, 2019)	$	8,612			$	1,140			$	9,752
2020	23,210				17,613				40,823
2021	16,635				2,334				18,969
2022	11,613				2,341				13,954
2023	7,664				2,342				10,006
Thereafter	10,748				18,184				28,932
Total lease payments	$	78,482			$	43,954			$	122,436
Less: interest	6,639				4,698				11,337
Total	$	71,843			$	39,256			$	111,099

Leases

Leases

The Company leases certain grain handling and storage facilities, ethanol storage terminals. warehouse space, railcars, locomotives, barges, office space, machinery and equipment, vehicles and information technology equipment under operating leases. Lease expense for these leases is recognized within the Consolidated Statements of Operations on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.

The following table summarizes the amounts recognized in the Company's Condensed Consolidated Balance Sheet related to leases:

(in thousands)		Condensed Consolidated Balance Sheet Classification		September 30, 2019
Assets
Operating lease assets		Right of use assets, net		$	70,773
Finance lease assets		Property, plant and equipment, net		24,003
Finance lease assets		Rail Group assets leased to others, net		17,136
Total leased assets				$	111,912
Liabilities
Current operating leases		Accrued expenses and other current liabilities		24,544
Non-current operating leases		Long-term lease liabilities		47,299
Total operating lease liabilities				$	71,843
Current finance leases		Current maturities of long-term debt		17,331
Non-current finance leases		Long-term debt		21,925
Total finance lease liabilities				$	39,256
Total lease liabilities				$	111,099

The components of lease cost recognized within the Company's Condensed Consolidated Statement of Operations were as follows:

(in thousands)		Condensed Consolidated Statement of Operations Classification		Three months ended September 30, 2019				Nine months ended September 30, 2019
Lease cost:
Operating lease cost		Cost of sales and merchandising revenues		$	5,761			$	18,881
Operating lease cost		Operating, administrative and general expenses		3,417				10,251
Finance lease cost
Amortization of right-of-use assets		Operating, administrative and general expenses		443				1,042
Interest expense on lease liabilities		Interest expense		236				779
Other lease cost (a)		Cost of sales and merchandising revenues		193				731
Other lease cost (a)		Operating, administrative and general expenses		61				201
Total lease cost				$	10,111			$	31,885

(a) Other lease cost includes short-term lease costs and variable lease costs.

The Company often has the option to renew lease terms for buildings and other assets. The exercise of a lease renewal option is generally at the sole discretion of the Company. In addition, certain lease agreements may be terminated prior to their original expiration date at the discretion of the Company. Each renewal and termination option is evaluated at the lease commencement date to determine if the Company is reasonably certain to exercise the option on the basis of economic factors. The table below summarizes the weighted average remaining lease terms as of September 30, 2019.

Weighted Average Remaining Lease Term
Operating leases	4.2 years
Finance leases	6.9 years

The discount rate implicit within our leases is generally not determinable and therefore the Company determines the discount rate based on its incremental borrowing rate. The incremental borrowing rate for each lease is determined based on its term and the currency in which lease payments are made, adjusted for the impacts of collateral. The table below summarizes the weighted average discount rate used to measure the Company's lease liabilities as of September 30, 2019.

Weighted Average Discount Rate
Operating leases	4.16	%
Finance leases	3.78	%

Supplemental Cash Flow Information Related to Leases

(in thousands)			September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	24,982
Operating cash flows from finance leases			405
Financing cash flows from finance leases			973
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			6,365
Finance leases			16,498

Maturity Analysis of Leases Liabilities

	September 30, 2019
(in thousands)	Operating Leases				Finance Leases				Total
2019 (excluding the nine months ended September 30, 2019)	$	8,612			$	1,140			$	9,752
2020	23,210				17,613				40,823
2021	16,635				2,334				18,969
2022	11,613				2,341				13,954
2023	7,664				2,342				10,006
Thereafter	10,748				18,184				28,932
Total lease payments	$	78,482			$	43,954			$	122,436
Less: interest	6,639				4,698				11,337
Total	$	71,843			$	39,256			$	111,099

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- References

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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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- 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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