Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

LEASES

        The Partnership has numerous operating leases primarily for terminal facilities and transportation and other equipment. The leases generally provide that all expenses related to the equipment are to be paid by the lessee.

        Operating lease Right-of-Use ("ROU") assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Partnership's leases do not provide an implicit rate of return, the Partnership uses its imputed collateralized rate based on the information available at commencement date in determining the present value of lease payments. The estimated rate is based on a risk-free rate plus a risk-adjusted margin.

Our leases have remaining lease terms of 1 year to 17 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The Partnership includes extension periods and excludes termination periods from its lease term if, at commencement, it is reasonably likely that the Partnership will exercise the option.

        The components of lease expense for the six months ended June 30, 2020 and 2019 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	2,767	$	2,784	$	5,611	$	5,381
Finance lease cost:
Amortization of right-of-use assets	$	526	688		$	1,115	1,310
Interest on lease liabilities	$	86	185		$	196	368
Short-term lease cost	$	3,492	2,671		$	6,915	5,222
Variable lease cost	$	22	$	22	$	50	$	50
Total lease cost	$	6,893	$	6,350	$	13,887	$	12,331

Supplemental balance sheet information related to leases at June 30, 2020 and December 31, 2019 was as follows:

	June 30, 2020		December 31, 2019
Operating Leases
Operating lease right-of-use assets	$	24,554	$	23,901
Current portion of operating lease liabilities included in "Other accrued liabilities"	$	7,906	$	7,722
Operating lease liabilities	$	17,081	16,656
Total operating lease liabilities	$	24,987	$	24,378
Finance Leases
Property, plant and equipment, at cost	$	11,107	$	15,367
Accumulated depreciation	$	(3,360)	(3,941)
Property, plant and equipment, net	$	7,747	$	11,426
Current installments of finance lease obligations	$	3,931	$	6,758
Finance lease obligations	$	405	717
Total finance lease obligations	$	4,336	$	7,475

        The Partnership’s future minimum lease obligations as of June 30, 2020 consist of the following:

	Operating Leases		Finance Leases
Year 1	$	8,964	$	4,044
Year 2	6,731		252
Year 3	4,055		172
Year 4	1,887		—
Year 5	1,210		—
Thereafter	6,319		—
Total	$	29,166	$	4,468
Less amounts representing interest costs	(4,179)		(132)
Total lease liability	$	24,987	$	4,336

        The Partnership has non-cancelable revenue arrangements that are under the scope of ASC 842 whereby we have committed certain terminalling and storage assets in exchange for a minimum fee. Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of June 30, 2020 are as follows: 2020 - $9,960; 2021 - $14,019; 2022 - $13,004; 2023 - $12,609; 2024 - $12,609; subsequent years - $49,414.

Leases

LEASES

        The Partnership has numerous operating leases primarily for terminal facilities and transportation and other equipment. The leases generally provide that all expenses related to the equipment are to be paid by the lessee.

        Operating lease Right-of-Use ("ROU") assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Partnership's leases do not provide an implicit rate of return, the Partnership uses its imputed collateralized rate based on the information available at commencement date in determining the present value of lease payments. The estimated rate is based on a risk-free rate plus a risk-adjusted margin.

Our leases have remaining lease terms of 1 year to 17 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The Partnership includes extension periods and excludes termination periods from its lease term if, at commencement, it is reasonably likely that the Partnership will exercise the option.

        The components of lease expense for the six months ended June 30, 2020 and 2019 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating lease cost	$	2,767	$	2,784	$	5,611	$	5,381
Finance lease cost:
Amortization of right-of-use assets	$	526	688		$	1,115	1,310
Interest on lease liabilities	$	86	185		$	196	368
Short-term lease cost	$	3,492	2,671		$	6,915	5,222
Variable lease cost	$	22	$	22	$	50	$	50
Total lease cost	$	6,893	$	6,350	$	13,887	$	12,331

Supplemental balance sheet information related to leases at June 30, 2020 and December 31, 2019 was as follows:

	June 30, 2020		December 31, 2019
Operating Leases
Operating lease right-of-use assets	$	24,554	$	23,901
Current portion of operating lease liabilities included in "Other accrued liabilities"	$	7,906	$	7,722
Operating lease liabilities	$	17,081	16,656
Total operating lease liabilities	$	24,987	$	24,378
Finance Leases
Property, plant and equipment, at cost	$	11,107	$	15,367
Accumulated depreciation	$	(3,360)	(3,941)
Property, plant and equipment, net	$	7,747	$	11,426
Current installments of finance lease obligations	$	3,931	$	6,758
Finance lease obligations	$	405	717
Total finance lease obligations	$	4,336	$	7,475

        The Partnership’s future minimum lease obligations as of June 30, 2020 consist of the following:

	Operating Leases		Finance Leases
Year 1	$	8,964	$	4,044
Year 2	6,731		252
Year 3	4,055		172
Year 4	1,887		—
Year 5	1,210		—
Thereafter	6,319		—
Total	$	29,166	$	4,468
Less amounts representing interest costs	(4,179)		(132)
Total lease liability	$	24,987	$	4,336

        The Partnership has non-cancelable revenue arrangements that are under the scope of ASC 842 whereby we have committed certain terminalling and storage assets in exchange for a minimum fee. Future minimum revenues the Partnership expects to receive under these non-cancelable arrangements as of June 30, 2020 are as follows: 2020 - $9,960; 2021 - $14,019; 2022 - $13,004; 2023 - $12,609; 2024 - $12,609; subsequent years - $49,414.