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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The company leases certain facilities, parcels of land, and equipment, with remaining terms ranging from less than one year to approximately 13.1 years. The land and facility leases include renewal options. The renewal options are included in the lease term only for those sites or locations in which they are reasonably certain to be renewed. Equipment renewals are not considered reasonably certain to be exercised as they typically renew with significantly different underlying terms. The components of lease expense are as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Lease expense |  |  |  |  |  |  |
Operating lease expense | $ | 7,173 |  | $ | 7,155 |  | $ | 21,272 |  | $ | 20,744
Variable lease expense (benefit) (1) | 551 |  | 211 |  | 1,234 |  | (96)
Total lease expense | $ | 7,724 |  | $ | 7,366 |  | $ | 22,506 |  | $ | 20,648
(1)Represents amounts incurred in excess of the minimum payments required for a certain building lease and for the handling and unloading of railcars for a certain land lease, offset by railcar lease abatements provided by the lessor when railcars are out of service during periods of maintenance or upgrade. Supplemental cash flow information related to operating leases is as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | 7,540 |  |  | $ | 7,075 |  |  | $ | 21,737 |  |  | $ | 19,914 |
Right-of-use assets obtained in exchange for lease obligations |  |  |  |  |  |  |
Operating leases | 7,753 |  |  | 4,330 |  |  | 17,491 |  |  | 27,786 |
Right-of-use assets and lease obligations derecognized due to lease modifications: |  |  |  |  |  |  |
Right-of-use assets (1) | 2,208 |  |  | 3,428 |  |  | 2,208 |  |  | 3,428 |
Lease obligations (1) | 2,739 |  |  | 3,428 |  |  | 2,739 |  |  | 3,428 |
(1)Amounts presented in 2024 are related to the Birmingham Transaction, while amounts in 2023 relate to the Atkinson Transaction. Derecognition of right-of-use assets and lease obligations for both dispositions is related to railcar operating leases. Supplemental balance sheet information related to operating leases is as follows:
| September 30, 2024 |  | December 31, 2023
Weighted average remaining lease term | 4.1 years |  | 4.5 years
Weighted average discount rate | 5.32 | % |  | 5.16 | %
Aggregate minimum lease payments under the operating lease agreements for the remainder of 2024 and in future years are as follows (in thousands):
Year Ending December 31, | Amount
2024 | $ | 7,211 |
2025 | 25,420 |
2026 | 18,627 |
2027 | 14,356 |
2028 | 6,648 |
Thereafter | 9,129 |
Total | 81,391 |
Less: Present value discount | (8,543) |
Lease liabilities | $ | 72,848 |
Other Commitments As of September 30, 2024, the company had contracted future purchases of grain, ethanol, distillers grains and natural gas valued at approximately $187.8 million and future commitments for storage and transportation, valued at approximately $26.3 million. The company has entered into contracts with Tallgrass High Plains Carbon Storage, LLC and its affiliates, related to the construction, development and operation of carbon capture and sequestration projects at our three Nebraska plants, which are expected to be completed in 2025. Payments associated with these contracts are due monthly over a period of twelve years, commencing after the capture facilities are considered in-service. Amounts due under the contracts are based on the achievement of certain project milestones and are subject to termination of all or portions of the contracts. Certain of the future obligations to Tallgrass High Plains Carbon Storage LLC are secured by a leasehold deed of trust, security agreement and assignment of rents and leases. As of September 30, 2024, the company had incurred $7.2 million of accumulated construction costs in relation to the projects, presented as property, plant and equipment on the consolidated balance sheet, with an equal and offsetting liability presented as other liabilities. Legal The company is currently involved in litigation that has arisen in the ordinary course of business, but does not believe any pending litigation will have a material adverse effect on its financial position, results of operations or cash flows.

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