Leases Leases (Tables)

12 Months Ended

Dec. 31, 2019

Supplemental balance sheet detail of assets and liabilities

Supplemental balance sheet information related to the Company’s leases as of December 31, 2019, were as follows (in millions):



		December 31, 2019
Assets:	Classification:
Operating lease assets	Operating lease right-of-use assets	$	93.1
Finance lease assets	Property, plant and equipment, net ⁽¹⁾	3.2
Total leased assets		$	96.3
Liabilities:
Current
Operating	Current portion of operating lease liabilities	$	60.6
Finance	Current portion of long-term debt	0.3
Non-current
Operating	Long-term operating lease liabilities	33.0
Finance	Long term debt, less current portion	2.4
Total lease liabilities		$	96.3


⁽¹⁾	Finance lease assets are recorded net of accumulated amortization of $7.1 million as of December 31, 2019.

Lease costs

The components of lease expense related to the Company’s leases for the year ended December 31, 2019 were as follows (in millions):



		December 31,
Lease Costs:	Classification:	2019
Fixed operating lease cost	Cost of Sales; SG&A Expenses	$	67.0
Short-term operating lease cost ⁽¹⁾	Cost of Sales; SG&A Expenses	8.0
Variable operating lease cost ^{(2) (3)}	Cost of Sales; SG&A Expenses	3.2
Finance lease cost:
Amortization of right-of-use asset	Cost of Sales	1.2
Interest on lease liabilities	Interest expense	1.4
Total lease cost		$	80.8


⁽¹⁾	The Company’s leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets.

⁽²⁾

Approximately $2.0 million of the Company’s variable operating lease cost for the year ended December 31, 2019 relates to its lease agreement with Phillips 66 related to the LVT unit at its Lake Charles, Louisiana refinery (“the LVT Agreement”). Pursuant to the LVT Agreement, Phillips 66 is obligated to supply a minimum supply quantity which the Company agrees to purchase through December 31, 2020. Pricing for the agreement is indexed to the prior month’s average of Platts Mid USGC 55 Grade Jet Kero price on the day of loading plus an adder. Phillips 66 invoices the Company for the estimated volume of product to be purchased by the Company based on a supplied forecast and differences between actual volumes purchased and the estimated volume of product originally billed which makes up the variable component of the operating lease contract.


⁽³⁾	The Company’s railcar leases typically include a mileage limit the railcar can travel over the life of the lease. For any mileage incurred over this limit, the Company is obligated to pay an agreed upon dollar value for each mile that is traveled over the limit.

Maturity of Lease Liabilities

As of December 31, 2019, the Company had estimated minimum commitments for the payment of rentals under leases which, at inception, had a noncancelable term of more than one year, as follows (in millions):



Maturity of Lease Liabilities	Operating Leases⁽¹⁾		Finance Leases⁽²⁾		Total
2020	$	65.0	$	0.5	$	65.5
2021	13.8		0.5		14.3
2022	9.7		0.5		10.2
2023	6.9		0.5		7.4
2024	3.9		0.5		4.4
Thereafter	3.3		1.1		4.4
Total	$	102.6	$	3.6	$	106.2
Less: Interest	9.0		0.9		9.9
Present value of lease liabilities	$	93.6	$	2.7	$	96.3
Less obligations due within one year	60.6		0.3		60.9
Long-term lease obligations	$	33.0	$	2.4	$	35.4


⁽¹⁾	As of December 31, 2019, the Company’s operating lease payments included no material options to extend lease terms that are reasonably certain of being exercised. The Company has no legally binding minimum lease payments for leases signed but not yet commenced as of December 31, 2019.


⁽²⁾	As of December 31, 2019, the Company’s finance lease payments included no material options to extend lease terms that are reasonably certain of being exercised. In addition, the Company has no legally binding minimum lease payments for leases that have been signed but not yet commenced as of December 31, 2019.

Weighted Average Term and Discount

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases were as follows:



Lease Term and Discount Rate:	December 31, 2019
Weighted-average remaining lease term (years):
Operating leases	2.5
Finance leases	7.1
Weighted-average discount rate:
Operating leases	7.3	%
Finance leases	8.8	%