Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.19.2
Leases
6 Months Ended
Jun. 30, 2019
Leases, Operating [Abstract]  
Operating Leases LEASES
The Company leases land, property and equipment under certain operating leases. The Company's leases consist primarily of access to distribution terminals, biomass-based diesel and feedstock storage tanks, railcars and vehicles. The Company determines at the inception of a lease whether an arrangement that provides the Company control over the use of an asset is a lease. The Company recognizes at lease commencement a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the lease term. As discussed in Note 2, the Company has elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. At the end of the lease term the Company, generally, has the option to (a) return the leased equipment to the lessor, (b) purchase the property at its then fair value or (c) renew its lease at the fair rental value on a year-to-year basis or for an agreed upon term. When it is reasonably certain that the Company will exercise the option, the impact of the option is included in the lease term for purposes of determining total future lease payments. As most of its lease agreements do not explicitly state the discount rate implicit in the lease, the Company uses its incremental borrowing rate on the commencement date to calculate the present value of future payments.
The Company's leases commonly include payments that are based on the Consumer Price Index ("CPI") or other similar indices. If the indices are known at inception of the leases, they are included in the calculation of the ROU asset and lease liability. Other variable lease payments, such as usage-based amounts or when the indices are not known at inception, are excluded from the ROU asset and lease liability, and are expensed as incurred.
In addition to the base rent, office equipment leases typically contain provisions for maintenance services, which are considered non-lease components for accounting purposes. For these leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. For all other types of leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability.
The following table summarizes information about the Company's lease expense for the three and six months ended June 30, 2019:
 
Three months ended June 30, 2019
 
Six months ended June 30, 2019
Lease expense:
 
 
 
Operating lease expense
$
5,577

 
$
11,050

Variable lease expenses
469

 
676

Short-term and other lease expenses
528

 
954

Total lease expense
$
6,574

 
$
12,680


The weighted-average remaining lease term for the Company's operating leases is 5.72 years at June 30, 2019. The weighted-average discount rate for the Company's operating leases is 4.72% as of June 30, 2019.
For each of the next five calendar years and thereafter, future minimum lease payments and scheduled maturities under operating leases that have initial or remaining noncancelable lease terms in excess of one year are as follows:
 
Total payments
 
Less: Discount
 
Operating lease obligation
July 1, 2019 through December 31, 2019
$
11,385

 
$
1,371

 
$
10,014

2020
17,408

 
1,737

 
15,671

2021
13,421

 
1,080

 
12,341

2022
4,079

 
693

 
3,386

2023
2,977

 
560

 
2,417

2024
1,772

 
472

 
1,300

2025 and thereafter
11,404

 
2,376

 
9,028

Total
$
62,446

 
$
8,289

 
$
54,157


As the Company has not restated prior-year information for its adoption of ASC Topic 842, the following presents the Company's future minimum lease payments for operating leases under ASC Topic 840 at December 31, 2018:
 
Total Payments
2019
$
20,326

2020
14,063

2021
10,643

2022
3,162

2023
2,406

Thereafter
13,736

Total minimum payments
$
64,336