Lease Accounting (Notes)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Lease Accounting

Lease Accounting

Arrangements wherein we are the lessee:

We have operating and finance leases for land, warehouses, offices, vehicles, and equipment with remaining lease terms ranging from 1 to 32 years. Many of our leases include one or more options to extend the lease term from 1 to 10 years that may be exercised at our sole discretion. Additionally, many of our leases for vehicles and equipment include options to purchase the underlying asset at or before expiration of the lease agreement. Rental payments are generally fixed over the term of the lease agreement with the exception of certain equipment leases for which the rental payment may vary based on usage of the asset. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of December 31, 2020, the rights and obligations with respect to leases which have been signed but have not yet commenced are not material to our financial position or results of operations.

The components of lease expense were as follows (in thousands):

	Years Ended December 31,
	2020		2019
Components of lease expense:
Operating lease cost (a)	$	23,931	$	29,205
Financing lease cost:
Depreciation	16,504		11,252
Interest on lease liabilities	2,969		2,941
Sublease income (b)	(551)		(499)
Net lease expense	$	42,853	$	42,899

(a) Includes short-term lease and variable lease costs, which are immaterial.

(b) Sublease income relates to two warehouses in the U.S. and New Zealand.

For the year ended December 31, 2018, rent expense of $36.7 million, was recorded pursuant to ASC 840, Leases.

Other information related to leases is as follows:

	Years Ended December 31,
	2020			2019
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(20,070)		$	(24,992)
Operating cash flows from finance leases	$	(2,969)		$	(2,941)
Financing cash flows from finance leases	$	(19,970)		$	(13,339)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	44,919		$	12,492
Finance leases	$	38,858		$	30,416
Weighted-average remaining lease term (years)
Operating leases	10.5			6.1
Finance leases	4.8			4.4
Weighted-average discount rate
Operating leases	2.9		%	4.1		%
Finance leases	3.6		%	5.5		%

Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2021	$	41,821	$	41,671	$	83,492
2022	36,000		32,118		68,118
2023	32,809		25,943		58,752
2024	28,185		16,752		44,937
2025	23,923		6,108		30,031
Thereafter	154,991		10,723		165,714
Total future minimum lease payments	317,729		133,315		451,044
Less: Interest	(48,582)		(7,389)		(55,971)
Total future minimum lease payments less interest	$	269,147	$	125,926	$	395,073
Reported as of December 31, 2020
Accounts payable and accrued expenses	$	174	$	120	$	294
Operating lease obligations	268,973		—		268,973
Finance lease obligations	—		125,806		125,806
Total lease obligations	$	269,147	$	125,926	$	395,073

Arrangements wherein we are the lessor:

We receive lease income as the lessor for certain buildings and warehouses or space within a warehouse. The remaining term on existing leases ranges from 1 to 12 years. Lease income is generally fixed over the duration of the contract and each lease contract contains clauses permitting extension or termination. Lease incentives and options for purchase of the leased asset by the lessee are generally not included.

The Company is party to operating leases only and currently does not have sales-type or direct financing leases. Lease income is included within “Rent, storage and warehouse services” in the accompanying Consolidated Statements of Operations as denoted in Note 24 “Revenues from Contracts with Customers”.

Property, buildings and equipment underlying operating leases is included in “Land” and “Buildings and improvements” on the accompanying Consolidated Balance Sheets. The gross value and net value of these assets was $854.2 million and $615.7 million, for Land and Buildings and improvements, respectively, as of December 31, 2020. These amounts for 2020 exclude values attributable to Land and Buildings and improvements acquired from Agro as the relevant acquisition accounting is preliminary and will be finalized during the measurement period. The gross value and net value of these assets was $786.4 million and $600.1 million, for Land and Buildings and improvements, respectively, as of December 31, 2019. Depreciation expense for such assets was $29.5 million and $23.1 million for the years ended December 31, 2020 and 2019.

Future minimum lease payments due from our customers on leases as of December 31, 2020 were as follows (in thousands):

	Operating Leases
Year ending December 31,
2021	$	26,903
2022	21,884
2023	18,914
2024	14,201
2025	10,169
Thereafter	21,491
Total	$	113,562

Lease Accounting

Lease Accounting

Arrangements wherein we are the lessee:

We have operating and finance leases for land, warehouses, offices, vehicles, and equipment with remaining lease terms ranging from 1 to 32 years. Many of our leases include one or more options to extend the lease term from 1 to 10 years that may be exercised at our sole discretion. Additionally, many of our leases for vehicles and equipment include options to purchase the underlying asset at or before expiration of the lease agreement. Rental payments are generally fixed over the term of the lease agreement with the exception of certain equipment leases for which the rental payment may vary based on usage of the asset. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of December 31, 2020, the rights and obligations with respect to leases which have been signed but have not yet commenced are not material to our financial position or results of operations.

The components of lease expense were as follows (in thousands):

	Years Ended December 31,
	2020		2019
Components of lease expense:
Operating lease cost (a)	$	23,931	$	29,205
Financing lease cost:
Depreciation	16,504		11,252
Interest on lease liabilities	2,969		2,941
Sublease income (b)	(551)		(499)
Net lease expense	$	42,853	$	42,899

(a) Includes short-term lease and variable lease costs, which are immaterial.

(b) Sublease income relates to two warehouses in the U.S. and New Zealand.

For the year ended December 31, 2018, rent expense of $36.7 million, was recorded pursuant to ASC 840, Leases.

Other information related to leases is as follows:

	Years Ended December 31,
	2020			2019
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(20,070)		$	(24,992)
Operating cash flows from finance leases	$	(2,969)		$	(2,941)
Financing cash flows from finance leases	$	(19,970)		$	(13,339)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	44,919		$	12,492
Finance leases	$	38,858		$	30,416
Weighted-average remaining lease term (years)
Operating leases	10.5			6.1
Finance leases	4.8			4.4
Weighted-average discount rate
Operating leases	2.9		%	4.1		%
Finance leases	3.6		%	5.5		%

Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2021	$	41,821	$	41,671	$	83,492
2022	36,000		32,118		68,118
2023	32,809		25,943		58,752
2024	28,185		16,752		44,937
2025	23,923		6,108		30,031
Thereafter	154,991		10,723		165,714
Total future minimum lease payments	317,729		133,315		451,044
Less: Interest	(48,582)		(7,389)		(55,971)
Total future minimum lease payments less interest	$	269,147	$	125,926	$	395,073
Reported as of December 31, 2020
Accounts payable and accrued expenses	$	174	$	120	$	294
Operating lease obligations	268,973		—		268,973
Finance lease obligations	—		125,806		125,806
Total lease obligations	$	269,147	$	125,926	$	395,073

Arrangements wherein we are the lessor:

We receive lease income as the lessor for certain buildings and warehouses or space within a warehouse. The remaining term on existing leases ranges from 1 to 12 years. Lease income is generally fixed over the duration of the contract and each lease contract contains clauses permitting extension or termination. Lease incentives and options for purchase of the leased asset by the lessee are generally not included.

The Company is party to operating leases only and currently does not have sales-type or direct financing leases. Lease income is included within “Rent, storage and warehouse services” in the accompanying Consolidated Statements of Operations as denoted in Note 24 “Revenues from Contracts with Customers”.

Property, buildings and equipment underlying operating leases is included in “Land” and “Buildings and improvements” on the accompanying Consolidated Balance Sheets. The gross value and net value of these assets was $854.2 million and $615.7 million, for Land and Buildings and improvements, respectively, as of December 31, 2020. These amounts for 2020 exclude values attributable to Land and Buildings and improvements acquired from Agro as the relevant acquisition accounting is preliminary and will be finalized during the measurement period. The gross value and net value of these assets was $786.4 million and $600.1 million, for Land and Buildings and improvements, respectively, as of December 31, 2019. Depreciation expense for such assets was $29.5 million and $23.1 million for the years ended December 31, 2020 and 2019.

Future minimum lease payments due from our customers on leases as of December 31, 2020 were as follows (in thousands):

	Operating Leases
Year ending December 31,
2021	$	26,903
2022	21,884
2023	18,914
2024	14,201
2025	10,169
Thereafter	21,491
Total	$	113,562

Lease Accounting

Lease Accounting

Arrangements wherein we are the lessee:

We have operating and finance leases for land, warehouses, offices, vehicles, and equipment with remaining lease terms ranging from 1 to 32 years. Many of our leases include one or more options to extend the lease term from 1 to 10 years that may be exercised at our sole discretion. Additionally, many of our leases for vehicles and equipment include options to purchase the underlying asset at or before expiration of the lease agreement. Rental payments are generally fixed over the term of the lease agreement with the exception of certain equipment leases for which the rental payment may vary based on usage of the asset. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of December 31, 2020, the rights and obligations with respect to leases which have been signed but have not yet commenced are not material to our financial position or results of operations.

The components of lease expense were as follows (in thousands):

	Years Ended December 31,
	2020		2019
Components of lease expense:
Operating lease cost (a)	$	23,931	$	29,205
Financing lease cost:
Depreciation	16,504		11,252
Interest on lease liabilities	2,969		2,941
Sublease income (b)	(551)		(499)
Net lease expense	$	42,853	$	42,899

(a) Includes short-term lease and variable lease costs, which are immaterial.

(b) Sublease income relates to two warehouses in the U.S. and New Zealand.

For the year ended December 31, 2018, rent expense of $36.7 million, was recorded pursuant to ASC 840, Leases.

Other information related to leases is as follows:

	Years Ended December 31,
	2020			2019
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(20,070)		$	(24,992)
Operating cash flows from finance leases	$	(2,969)		$	(2,941)
Financing cash flows from finance leases	$	(19,970)		$	(13,339)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	44,919		$	12,492
Finance leases	$	38,858		$	30,416
Weighted-average remaining lease term (years)
Operating leases	10.5			6.1
Finance leases	4.8			4.4
Weighted-average discount rate
Operating leases	2.9		%	4.1		%
Finance leases	3.6		%	5.5		%

Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2021	$	41,821	$	41,671	$	83,492
2022	36,000		32,118		68,118
2023	32,809		25,943		58,752
2024	28,185		16,752		44,937
2025	23,923		6,108		30,031
Thereafter	154,991		10,723		165,714
Total future minimum lease payments	317,729		133,315		451,044
Less: Interest	(48,582)		(7,389)		(55,971)
Total future minimum lease payments less interest	$	269,147	$	125,926	$	395,073
Reported as of December 31, 2020
Accounts payable and accrued expenses	$	174	$	120	$	294
Operating lease obligations	268,973		—		268,973
Finance lease obligations	—		125,806		125,806
Total lease obligations	$	269,147	$	125,926	$	395,073

Arrangements wherein we are the lessor:

We receive lease income as the lessor for certain buildings and warehouses or space within a warehouse. The remaining term on existing leases ranges from 1 to 12 years. Lease income is generally fixed over the duration of the contract and each lease contract contains clauses permitting extension or termination. Lease incentives and options for purchase of the leased asset by the lessee are generally not included.

The Company is party to operating leases only and currently does not have sales-type or direct financing leases. Lease income is included within “Rent, storage and warehouse services” in the accompanying Consolidated Statements of Operations as denoted in Note 24 “Revenues from Contracts with Customers”.

Property, buildings and equipment underlying operating leases is included in “Land” and “Buildings and improvements” on the accompanying Consolidated Balance Sheets. The gross value and net value of these assets was $854.2 million and $615.7 million, for Land and Buildings and improvements, respectively, as of December 31, 2020. These amounts for 2020 exclude values attributable to Land and Buildings and improvements acquired from Agro as the relevant acquisition accounting is preliminary and will be finalized during the measurement period. The gross value and net value of these assets was $786.4 million and $600.1 million, for Land and Buildings and improvements, respectively, as of December 31, 2019. Depreciation expense for such assets was $29.5 million and $23.1 million for the years ended December 31, 2020 and 2019.

Future minimum lease payments due from our customers on leases as of December 31, 2020 were as follows (in thousands):

	Operating Leases
Year ending December 31,
2021	$	26,903
2022	21,884
2023	18,914
2024	14,201
2025	10,169
Thereafter	21,491
Total	$	113,562