Adoption of ASC 842

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Adoption of ASC 842

2. Adoption of ASC 842

On January 1, 2019, we adopted ASC 842 using the additional transition method option provided by ASU 2018-11. Under this transition method, we applied the new accounting guidance on the date of adoption. Upon adoption, a cumulative effect adjustment was not required; however, the effect of this guidance on our consolidated financial statements impacted our balance sheet presentation by increasing the amount of our noncurrent assets for the inclusion of right-of-use assets of $15.9 million and increasing the amount of our liabilities for the inclusion of the associated lease obligations of $15.9 million, most of which were classified as noncurrent.

Under the transition option we elected, ASC 842 is applied only to the most current period presented in the financial statements and our reporting for the comparative periods presented in the financial statements continue to be in accordance with Topic 840, including disclosures.  Upon adoption, we elected the following accounting policies or practical expedients related to ASC 842:

• not reassess whether any expired or existing contracts are or contain leases, not reassess the lease classification for any expired or existing leases, and not reassess initial direct costs for any existing leases;

• apply accounting similar to Topic 840 operating leases accounting to leases that meet the definition of short-term leases; and

• not evaluate land easements that exist or expired before January 1, 2019 and that were not previously accounted for as leases under Topic 840.

2.  Adoption of ASC 842 (continued)

Subsequent to adoption, we determine if an arrangement is a lease at inception.  Since our leases generally do not provide an implicit rate, we use our incremental borrowing rate based on the lease term and other information available at the commencement date in determining the present value of lease payments.  Lease expense is recognized on a straight-line basis over the lease term.  Currently, most of our leases are classified as operating leases under which we are the lessee and primarily relate to railcars, other equipment and office space.  In addition, our leases that are classified as finance leases (previously classified as capital leases) and other leases under which we are the lessor are not material. Most of our leases do not include options to extend or terminate the lease prior to the end of the term.  As of December 31, 2019, we have executed operating leases with lease terms greater than one year, totaling approximately $10.8 million that have not yet commenced.

	2019
	(Dollars In Thousands)
Components of lease expense:
Operating lease cost	$	7,270
Short-term lease cost		2,665
Other cost (1)		64
Total lease cost	$	9,999
Supplemental cash flow information related to leases:
Operating cash flows from operating leases	$	7,677
Operating cash flows from finance leases		16
Financing cash flows from finance leases		61
Cash paid for amounts included in the measurement of lease liabilities	$	7,754
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,967
Other lease-related information:
Weighted-average remaining lease term - operating leases (in years)		4.6
Weighted-average remaining lease term - finance leases (in years)		3.8
Weighted-average discount rate - operating leases		8.70	%
Weighted-average discount rate - finance leases		8.94	%

(1) Includes variable and finance lease costs.

Maturities of operating lease liabilities as of December 31, 2019 are as follows:

	Operating Leases
	(In thousands)
2020	$	5,189
2021		3,951
2022		3,282
2023		2,969
2024		1,715
Thereafter		1,603
Total lease payments		18,709
Less imputed interest		(3,239	)
Present value of lease liabilities	$	15,470

Additionally, under Topic 840, expenses associated with our operating lease agreements, including month-to-month leases, were $10,235,000 in 2018 and $9,813,000 in 2017.