Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Operating and Finance Leases [Text Block]

LEASES

Adoption of ASC Topic 842, "Leases"

In February 2016, the FASB issued a new standard (“ASC 842”) intended to improve financial reporting about leasing transactions. The FASB issued additional guidance subsequently to clarify aspects of the standard and provide certain relief for implementation. ASC 842 requires lessees to recognize on the balance sheet the rights and obligations created by leases with terms greater than twelve months. The primary change created by the new standard is the recognition of ROU assets and lease liabilities by lessees for those leases previously classified as operating leases. ASC 842 requires disclosures to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

We adopted ASC 842 effective January 1, 2019, with an immaterial, cumulative-effect adjustment to the opening balance of retained earnings as of that date. As allowed under the standard, we have not changed our accounting and reporting for lease arrangements for periods presented prior to January 1, 2019. The impacts upon adoption on previously reported amounts are shown below. Our accounting for capital leases (now referred to as finance leases) remained substantially unchanged.

Adoption of the standard is not expected to significantly impact lease activity reported in our statements of earnings and cash flows.

We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.

Adoption of the standard related to leases impacted our previously reported results as follows:

	Balance as of		Adoption		Balance as of
	December 31, 2018		Adjustments		January 1, 2019
(in millions)
Operating lease right-of-use assets	$	—	$	241.1	$	241.1
Finance lease right-of-use assets	340.9		—		340.9
Accrued and other noncurrent liabilities	—		241.1		241.1
Long-term debt, including current maturities	302.2		—		302.2

Adoption of ASC 842 had no impact to cash from or used in operating, financing or investing on our consolidated cash flows statements.

Leasing Activity

We have operating and finance leases for heavy mobile equipment, railcars, fleet vehicles, field and plant equipment, river and cross-Gulf vessels, corporate offices, land, and computer equipment. Our leases have remaining lease terms of 1 year to 29 years, some of which include options to extend the leases for up to 10 years and some of which include options to terminate the leases within 1 year.

Finance and operating lease assets and liabilities as of December 31, 2019 were as follows:

Type of Lease Asset or Liability	Amount		Balance Sheet Classification
	(in millions)
Operating Leases
Right-of-use assets	$	192.1	Other assets
Lease liabilities:
Short-term	67.1		Accrued liabilities
Long-term	127.0		Other noncurrent liabilities
Total	$	194.1
Finance Leases
Right-of-use assets:
Gross assets	$	423.2
Less: accumulated depreciation	57.5
Net assets	$	365.7	Property, plant and equipment, net
Lease liabilities:
Short-term	$	41.7	Current maturities of long-term debt
Long-term	303.4		Long-term debt, less current maturities
Total	$	345.1

Lease expense is generally included within cost of goods sold and selling, general and administrative expenses, except for interest on lease liabilities, which is recorded within net interest. The components of lease expense were as follows:

	2019
(in millions)
Operating lease cost	$	98.4
Finance lease cost:
Amortization of right-of-use assets	28.3
Interest on lease liabilities	15.2
	43.5
Short-term lease cost	10.5
Variable lease cost	21.5
Total lease cost	$	173.9

Rental expense for 2019, 2018 and 2017 was $249.1 million, $270.3 million and $114.0 million, respectively.

Supplemental cash flow information related to leases was as follows:

	2019
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	107.9
Operating cash flows from finance leases	$	10.7
Financing cash flows from finance leases	$	41.3
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	56.0
Finance leases	$	88.2

Other information related to leases was as follows:

	December 31, 2019
Weighted Average Remaining Lease Term
Operating leases	4.7 years
Finance leases	4.8 years
Weighted Average Discount Rate
Operating leases	6.1	%
Finance leases	3.9	%

Future lease payments under non-cancellable leases recorded as of December 31, 2019, were as follows:

	Operating Leases			Finance Leases
(in millions)
2020	$	77.5		$	51.5
2021	51.6			53.2
2022	33.9			44.5
2023	22.2			76.1
2024	15.6			168.3
Thereafter	27.1			14.4
Total future lease payments	$	227.9		$	408.0
Less imputed interest	(33.8		)	(62.9		)
Total	$	194.1		$	345.1