Note 4 - Leases, Right-to-Use Assets and Related Liabilities |
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases [Text Block] | 4. Leases, Right-to-Use Assets and Related LiabilitiesThe Company enters into various arrangements which constitute a lease as defined by Topic 842 – Leases as part of its ongoing business activities and operations. Leases represent a contract or part of a contract, that conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. Such contracts result in both (a) Right-to-use assets, which represent the Company’s right to use an underlying asset for the term of the contract; and (b) a corresponding lease liability which represents the Company’s obligation to make the lease payments arising from the contract, measured on a discounted basis.The contracts for the Company are comprised of facility, equipment and transportation leases necessary to conduct the Company’s day-to-day operations for which the Company maintains control of right-to-use assets and incurs the related liabilities. The Company elected to adopt both the (a) short-term lease exemption for those leases with initial terms of twelve months or less; and (b) the practical expedient to not separate lease components from non-lease components, if applicable. Those leases which qualify for the short-term scope exception consist of certain residential rents for executive apartments, certain of the Company’s railcar leases, and other equipment leases. There were no leases containing variable lease payments, and none of the Company’s leases contained extension or termination options which were necessary in determining the value of the right-to-use asset and related liabilities. The Company assumed a 12.00% discount rate based, which is consistent with the stated rate on the Company’s 2020 Notes (as defined below) and best approximation of the rate implicit in the Company’s leases.Upon adoption of Topic 842 - Leases, the Company recognized a total of $1.2 March 31, 2019, ( i) $0.3 million of right-to-use assets with a remaining term of less than twelve months are included in Prepaid and other current assets, (ii) $0.5 million of right-to-use assets with a remaining term of exceeding twelve months are included in Deposits and other assets, and for the related lease liabilities, (iii) $0.6 million are included in Accounts payable and accrued liabilities for the current portion and (iv) $0.3 million are included in Other long-term liabilities for the non-current portion.There are two contractual agreements related to equipment improvements at the Luverne Facility that were not recognized as of March 31, 2019 as a result of operating contingencies which must be satisfied before the Company is obligated under the terms of the contract. The total estimated fair value of unrecognized right-to-use assets and related lease liabilities relating to these contracts was approximately $3.0 March 31, 2019. The following table presents the (a) costs by lease category and (b) other quantitative information relating to the Company’s leases.
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