Commitments And Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies [Abstract]

13. COMMITMENTS AND CONTINGENCIES

Lease Expense

The company leases certain facilities, parcels of land, and equipment, with remaining terms ranging from less than one year to 16.4 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 company may sublease certain of its railcars to third parties on a short-term basis. The subleases are classified as operating leases, with the associated sublease income being recognized on a straight-line basis over the lease term.

The components of lease expense are as follows (in thousands):


	Three Months Ended ‎June 30,				Six Months Ended ‎June 30,
	2021		2020		2021		2020
Lease expense
Operating lease expense	$	4,908	$	5,255	$	9,842	$	10,200
Variable lease expense ⁽¹⁾		522		630		591		899
Total lease expense	$	5,430	$	5,885	$	10,433	$	11,099

(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.

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Supplemental cash flow information related to operating leases is as follows (in thousands):


	Three Months Ended ‎June 30,				Six Months Ended ‎June 30,
	2021		2020		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,814	$	5,019	$	9,646	$	9,868

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		4,308		1,204		10,772		6,879

Right-of-use assets and lease obligations derecognized due to lease modifications:
Operating leases		-		-		51		-

Supplemental balance sheet information related to operating leases is as follows:

Aggregate minimum lease payments under the operating lease agreements for the remainder of 2021 and in future years are as follows (in thousands):


Year Ending December 31,	Amount
2021	$	10,257
2022		18,883
2023		15,240
2024		12,585
2025		8,286
Thereafter		15,672
Total		80,923
Less: Present value discount		(12,394)
Lease liabilities	$	68,529

The company has additional railcar operating leases that will commence in the third quarter of 2021, with estimated future minimum lease commitments of approximately $4.0 million and lease terms of three to five years. The undiscounted amounts are not included in the tables above.

Lease Revenue

As described in Note 2 – Revenue, the majority of the partnership’s segment revenue is generated through their storage and throughput services and rail transportation services agreements with Green Plains Trade and are accounted for as lease revenue. Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, and are accounted for under ASC 842, Leases. Lease revenue associated with agreements with Green Plains Trade is eliminated upon consolidation. The remaining lease revenue is not material to the company. Refer to Note 2 – Revenue for further discussion on lease revenue.

Commodities

As of June 30, 2021, the company had contracted future purchases of grain, corn oil, natural gas, ethanol and distillers grains, valued at approximately $379.4 million.

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Legal

The company is currently involved in litigation that has arisen during 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.

June 30, 2021

December 31, 2020

Weighted average remaining lease term

Weighted average discount rate