XML 19 R9.htm IDEA: XBRL DOCUMENT v3.19.1
Note 4 - Leases, Right-to-Use Assets and Related Liabilities
3 Months Ended
Mar. 31, 2019
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]
4.
Leases, Right-to-Use Assets and Related Liabilities
 
The 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
million of right-to-use assets and related lease liabilities. Within the unaudited consolidated balance sheet at
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
million as of
March 31, 2019.
 
The following table presents the (a) costs by lease category and (b) other quantitative information relating to the Company’s leases.
 
   
Three Months Ended
 
   
March 31, 2019
 
Lease Cost
 
 
 
 
Financing lease cost
  $
-
 
Operating lease cost
   
345
 
Short-Term lease cost
   
17
 
Variable lease cost
   
-
 
Sublease income
   
-
 
Total lease cost
  $
362
 
         
Other Information
 
 
 
 
(Gains) and losses on sale and leaseback transactions, net
  $
-
 
Cash paid for the measurement of lease liabilities
       
Operating cash flows from finance leases
   
-
 
Operating cash flows from operating leases
   
345
 
Financing cash flows from financing leases
       
Right-to-use assets obtained in exchange for new finance lease liabilities
   
-
 
Right-to-use assets obtained in exchange for new operating lease liabilities
   
-
 
Weighted-average remaining lease term, financing leases (months)
   
-
 
Weighted-average remaining lease term, operating leases (months)
   
19.60
 
Weighted-average discount rate - financing leases
   
-
%
Weighted-average discount rate - operating leases
   
12.00
%