| LEASES |
LEASES The Company leases certain rail cars, rail equipment, office space and office equipment. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised.
Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. Lease expense for these leases is recognized on a straight-line basis over the lease term.
The Company has no finance leases.
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| The components of lease expense were as follows: |
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| ($ in thousands) |
Classification in the Condensed Consolidated Statements of Income |
Three Months Ended September 30, |
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Nine Months Ended
September 30, |
| 2021 |
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2020 |
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2021 |
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2020 |
| Operating lease cost (a) |
Cost of sales, exclusive of depreciation and amortization |
$ |
1,124 |
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$ |
1,115 |
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$ |
3,132 |
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$ |
3,036 |
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| Operating lease cost (a) |
Selling, general and administrative |
33 |
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34 |
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102 |
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102 |
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| Total lease cost |
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$ |
1,157 |
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$ |
1,149 |
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$ |
3,234 |
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$ |
3,138 |
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(a) Short-term lease costs were approximately $0.2 million and $0.2 million for the three months and $0.5 million and $0.3 million for the nine months ended September 30, 2021 and 2020, respectively.
The Company had no variable lease expense, as defined by ASC 842, during the periods.
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| ($ in thousands) |
Classification on the Condensed Consolidated Balance Sheets |
September 30, 2021 |
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December 31, 2020 |
| Assets: |
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| Operating |
Operating lease assets |
$ |
8,746 |
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$ |
10,528 |
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| Total lease right-of-use assets, net |
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$ |
8,746 |
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$ |
10,528 |
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| Liabilities: |
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| Current: |
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| Operating |
Current portion of operating lease liabilities |
$ |
3,302 |
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$ |
3,195 |
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| Noncurrent: |
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| Operating |
Operating lease liabilities |
5,444 |
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7,333 |
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| Total lease liabilities |
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$ |
8,746 |
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$ |
10,528 |
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
| ($ in thousands) |
2021 |
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2020 |
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2021 |
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2020 |
| Cash paid for amounts included in the measurement of lease liabilities: |
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| Operating cash flows used for operating leases |
$ |
924 |
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$ |
925 |
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$ |
2,727 |
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$ |
2,806 |
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| Right-of-use assets obtained in exchange for lease obligations: |
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| Operating leases |
$ |
610 |
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$ |
37 |
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$ |
630 |
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$ |
37 |
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September 30, 2021 |
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September 30, 2020 |
| Weighted-average remaining lease term (in years): |
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| Operating leases |
3.2 |
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3.9 |
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| Weighted-average discount rate: |
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| Operating leases |
4.5 |
% |
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4.5 |
% |
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Most of the Company’s lease contracts do not provide a readily determinable implicit rate. For these contracts, the Company’s estimated incremental borrowing rate is based on information available at the inception of the lease.
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As of September 30, 2021, maturities of lease liabilities were as follows: |
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| ($ in thousands) |
Operating Leases |
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| 2021 |
$ |
934 |
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| 2022 |
3,439 |
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| 2023 |
2,547 |
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| 2024 |
1,233 |
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| 2025 |
1,094 |
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| Thereafter |
118 |
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| Total lease payments |
$ |
9,365 |
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| Less: Interest |
619 |
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| Total lease obligations |
$ |
8,746 |
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