Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Leases |
Note 9. OPERATING LEASES Operating Leases of Retail Sites as Lessee We lease approximately 400 retail sites from third parties under certain non-cancelable operating leases that expire from time to time through 2033. The weighted-average remaining lease term was 5.9 years as of September 30, 2019. Lease expense for the three and nine months ended September 30, 2019 was classified in the statement of operations as follows (in thousands):
Variable lease payments included in the above table are based on future inflation, revenues or volumes and totaled $0.5 million and $1.4 million for the three and nine months ended September 30, 2019, respectively. Short-term lease payments included in the table above that are excluded from the lease liability were $0.1 million and $0.4 million for the three and nine months ended September 30, 2019, respectively. Cash paid for amounts included in the measurement of lease liabilities under operating leases totaled $6.5 million and $19.3 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2019, future minimum rental payments under operating leases, excluding variable lease payments or short-term lease payments, were as follows (in thousands). The weighted-average discount rate as of September 30, 2019 was 6.9%.
Most lease agreements include provisions for renewals. We generally do not include renewal options in our lease term for purposes of measuring our lease liabilities and right-of-use assets unless the sublease to our customer extends beyond the term of the head lease. Substantially all these retail sites are then subleased to lessee dealers (including DMS) or commission agents under leases with terms generally ranging from one to ten years and which may include renewal options. Sublease rental income amounted to $9.6 million and $28.3 million for the three and nine months ended September 30, 2019, respectively. Operating Leases of Retail Sites as Lessor Motor fuel stations are leased to tenants under operating leases with various expiration dates ranging through 2033. Most lease agreements include provisions for renewals. We generally do not include renewal options in our lease term. Future minimum rental payments under non-cancelable operating leases with third parties, Circle K and DMS as of September 30, 2019 were as follows (in thousands):
The future minimum rental payments presented above do not include contingent rent based on future inflation, future revenues or volumes of the lessee or non-lease components for amounts that may be received as tenant reimbursements for certain operating costs. Deferred rent income from straight-line rent relates to the cumulative amount by which straight-line rental income recorded to date exceeds cash rents billed to date under the lease agreement and totaled $6.5 million and $6.3 million at September 30, 2019 and December 31, 2018, respectively. |