| 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 components of lease expense were as follows:
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Classification in the Condensed Consolidated Statements of Income |
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
Operating lease cost (a) |
Cost of sales, exclusive of depreciation and amortization |
$ |
920 |
|
|
$ |
1,139 |
|
Operating lease cost (a) |
Selling, general and administrative |
48 |
|
|
34 |
|
Total operating lease cost |
|
$ |
968 |
|
|
$ |
1,173 |
|
|
|
|
|
|
Finance lease cost: |
|
|
|
|
Amortization of right-of-use assets |
Depreciation |
$ |
— |
|
|
— |
|
Interest on lease liabilities |
Interest Expense |
— |
|
|
— |
|
Total finance lease cost |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
Total lease cost |
|
$ |
968 |
|
|
$ |
1,173 |
|
|
|
|
|
|
(a) Short-term lease costs were approximately $0.1 million and $0.1 million during the periods, respectively. |
The Company had no variable lease expense, as defined by ASC 842, during the periods.
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Classification on the Condensed Consolidated Balance Sheets |
March 31, 2020 |
|
December 31, 2019 |
Assets: |
|
|
|
|
Operating |
Operating lease assets |
$ |
12,711 |
|
|
$ |
13,512 |
|
Finance |
Property, plant, and equipment |
— |
|
|
— |
|
Total leased assets |
|
$ |
12,711 |
|
|
$ |
13,512 |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
Current |
|
|
|
|
Operating |
Current portion of operating lease liabilities |
$ |
3,153 |
|
|
$ |
3,174 |
|
Finance |
Short-term debt and current portion of long-term debt |
— |
|
|
— |
|
Noncurrent |
|
|
|
|
Operating |
Operating lease liabilities |
9,558 |
|
|
10,338 |
|
Finance |
Long-term debt |
— |
|
|
— |
|
Total lease liabilities |
|
$ |
12,711 |
|
|
$ |
13,512 |
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
Operating cash flows used for operating leases |
$ |
947 |
|
|
$ |
1,133 |
|
Operating cash flows used for finance leases |
— |
|
|
— |
|
Financing cash flows used for finance leases |
— |
|
|
— |
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
Operating leases |
$ |
— |
|
|
$ |
113 |
|
Finance leases |
— |
|
|
— |
|
|
|
|
|
|
March 31, 2020 |
Weighted-average remaining lease term (in years): |
|
Operating leases |
4.3 |
|
Finance leases |
0.0 |
|
Weighted-average discount rate: |
|
Operating leases |
4.5 |
% |
Finance leases |
— |
% |
Nearly all 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.
As of March 31, 2020, maturities of lease liabilities were as follows:
|
|
|
|
|
|
|
|
|
($ in thousands) |
Operating Leases |
|
Finance Leases |
2020 |
$ |
2,756 |
|
|
$ |
— |
|
2021 |
3,540 |
|
|
— |
|
2022 |
3,218 |
|
|
— |
|
2023 |
2,329 |
|
|
— |
|
2024 |
1,026 |
|
|
— |
|
Thereafter |
1,082 |
|
|
— |
|
Total lease payments |
$ |
13,951 |
|
|
$ |
— |
|
Less: Interest |
1,240 |
|
|
— |
|
Total lease obligations |
$ |
12,711 |
|
|
$ |
— |
|
|
| 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 components of lease expense were as follows:
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Classification in the Condensed Consolidated Statements of Income |
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
Operating lease cost (a) |
Cost of sales, exclusive of depreciation and amortization |
$ |
920 |
|
|
$ |
1,139 |
|
Operating lease cost (a) |
Selling, general and administrative |
48 |
|
|
34 |
|
Total operating lease cost |
|
$ |
968 |
|
|
$ |
1,173 |
|
|
|
|
|
|
Finance lease cost: |
|
|
|
|
Amortization of right-of-use assets |
Depreciation |
$ |
— |
|
|
— |
|
Interest on lease liabilities |
Interest Expense |
— |
|
|
— |
|
Total finance lease cost |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
Total lease cost |
|
$ |
968 |
|
|
$ |
1,173 |
|
|
|
|
|
|
(a) Short-term lease costs were approximately $0.1 million and $0.1 million during the periods, respectively. |
The Company had no variable lease expense, as defined by ASC 842, during the periods.
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Classification on the Condensed Consolidated Balance Sheets |
March 31, 2020 |
|
December 31, 2019 |
Assets: |
|
|
|
|
Operating |
Operating lease assets |
$ |
12,711 |
|
|
$ |
13,512 |
|
Finance |
Property, plant, and equipment |
— |
|
|
— |
|
Total leased assets |
|
$ |
12,711 |
|
|
$ |
13,512 |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
Current |
|
|
|
|
Operating |
Current portion of operating lease liabilities |
$ |
3,153 |
|
|
$ |
3,174 |
|
Finance |
Short-term debt and current portion of long-term debt |
— |
|
|
— |
|
Noncurrent |
|
|
|
|
Operating |
Operating lease liabilities |
9,558 |
|
|
10,338 |
|
Finance |
Long-term debt |
— |
|
|
— |
|
Total lease liabilities |
|
$ |
12,711 |
|
|
$ |
13,512 |
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
Three Months Ended
March 31, 2020 |
|
Three Months Ended
March 31, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
Operating cash flows used for operating leases |
$ |
947 |
|
|
$ |
1,133 |
|
Operating cash flows used for finance leases |
— |
|
|
— |
|
Financing cash flows used for finance leases |
— |
|
|
— |
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
Operating leases |
$ |
— |
|
|
$ |
113 |
|
Finance leases |
— |
|
|
— |
|
|
|
|
|
|
March 31, 2020 |
Weighted-average remaining lease term (in years): |
|
Operating leases |
4.3 |
|
Finance leases |
0.0 |
|
Weighted-average discount rate: |
|
Operating leases |
4.5 |
% |
Finance leases |
— |
% |
Nearly all 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.
As of March 31, 2020, maturities of lease liabilities were as follows:
|
|
|
|
|
|
|
|
|
($ in thousands) |
Operating Leases |
|
Finance Leases |
2020 |
$ |
2,756 |
|
|
$ |
— |
|
2021 |
3,540 |
|
|
— |
|
2022 |
3,218 |
|
|
— |
|
2023 |
2,329 |
|
|
— |
|
2024 |
1,026 |
|
|
— |
|
Thereafter |
1,082 |
|
|
— |
|
Total lease payments |
$ |
13,951 |
|
|
$ |
— |
|
Less: Interest |
1,240 |
|
|
— |
|
Total lease obligations |
$ |
12,711 |
|
|
$ |
— |
|
|