XML 29 R19.htm IDEA: XBRL DOCUMENT v3.24.0.1
Operating Leases
12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Operating Leases

Note 13. OPERATING LEASES

Operating Leases of Sites as Lessee

We lease 442 sites from third parties under certain non-cancelable operating leases that expire from time to time through 2041. The weighted-average remaining lease term was 4.5 years as of December 31, 2023.

Lease expense was classified in the consolidated statements of income as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Cost of sales

 

$

22,338

 

 

$

23,457

 

 

$

23,765

 

Operating expenses

 

 

15,460

 

 

 

15,254

 

 

 

13,531

 

General and administrative expenses

 

 

995

 

 

 

931

 

 

 

1,331

 

Total

 

$

38,793

 

 

$

39,642

 

 

$

38,627

 

 

Variable lease payments based on inflation or fuel volume included in the table above totaled $4.6 million, $4.4 million and $4.2 million for 2023, 2022 and 2021, respectively. Short-term lease payments included in the table above that are excluded from the lease liability amounted to $0.2 million, $0.2 million and $0.1 million for 2023, 2022 and 2021, respectively. Cash paid for amounts included in the measurement of lease liabilities under operating leases totaled $34.0 million, $35.0 million and $34.3 million for 2023, 2022 and 2021, respectively.

As of December 31, 2023, future minimum rental payments under operating leases, excluding variable lease payments or short-term payments, were as follows (in thousands). The weighted-average discount rate as of December 31, 2023 and 2022 was 5.8% and 6.0%, respectively.

 

 

 

Third Parties

 

 

Related Parties

 

 

Total

 

2024

 

$

25,796

 

 

$

10,152

 

 

$

35,948

 

2025

 

 

23,565

 

 

 

10,310

 

 

 

33,875

 

2026

 

 

20,510

 

 

 

10,395

 

 

 

30,905

 

2027

 

 

16,202

 

 

 

8,953

 

 

 

25,155

 

2028

 

 

11,806

 

 

 

8,382

 

 

 

20,188

 

Thereafter

 

 

28,745

 

 

 

9,350

 

 

 

38,095

 

Total future payments

 

 

126,624

 

 

 

57,542

 

 

 

184,166

 

Less impact of discounting

 

 

 

 

 

 

 

 

30,656

 

 

 

 

 

 

 

 

 

 

153,510

 

Current portion

 

 

 

 

 

 

 

 

34,787

 

Long-term portion

 

 

 

 

 

 

 

$

118,723

 

 

Most lease agreements include provisions for renewals. We generally do not include renewal options in our lease term for purposes of measuring our lease liabilities and right-of-use assets unless the sublease to our customer extends beyond the term of the head lease.

Of our leased sites, we operate 127 of them as company operated sites. Substantially all the remaining leased sites are subleased to lessee dealers or commission agents under leases with terms generally ranging from one to ten years and which may include renewal options. Sublease rental income amounted to $35.3 million, $35.4 million and $34.5 million for 2023, 2022 and 2021, respectively.

Operating Leases of Sites as Lessor

Motor fuel stations are leased to tenants under operating leases with various expiration dates ranging through 2037. Most lease agreements include provisions for renewals. We generally do not include renewal options in our lease term. Future minimum rental payments under non-cancelable operating leases with third parties as of December 31, 2023 were as follows (in thousands):

 

2024

 

$

45,941

 

2025

 

 

38,157

 

2026

 

 

27,715

 

2027

 

 

18,232

 

2028

 

 

12,002

 

Thereafter

 

 

13,143

 

Total future minimum lease payments

 

$

155,190

 

 

The future minimum rental payments presented above do not include contingent rent based on future inflation, future revenues or volumes of the lessee, or non-lease components for amounts that may be received as tenant reimbursements for certain operating costs.

 

Deferred rent income from straight-line rent relates to the cumulative amount by which straight-line rental income recorded to date exceeds cash rents billed to date under the lease agreement and totaled $5.0 million and $5.1 million at December 31, 2023 and 2022, respectively.