Lease Accounting

12 Months Ended

Dec. 31, 2022

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 30 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, 2022, 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,
	2022		2021		2020
Components of lease expense:
Operating lease cost (a)	$	52,331	$	59,405	$	23,931
Financing lease cost:
Depreciation	25,687		29,743		16,504
Interest on lease liabilities	3,063		7,135		2,969
Sublease income	(7,991)		(3,785)		(551)
Net lease expense	$	73,090	$	92,498	$	42,853

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

Other information related to leases is as follows:

	Years Ended December 31,
	2022			2021			2020
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(42,949)		$	(52,226)		$	(20,070)
Operating cash flows from finance leases	$	(11,533)		$	(10,342)		$	(2,969)
Financing cash flows from finance leases	$	(33,860)		$	(32,441)		$	(19,970)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	7,889		$	50,886		$	44,919
Finance leases	$	18,694		$	24,567		$	38,858
Weighted-average remaining lease term (years)
Operating leases	11.1			11.7			10.5
Finance leases	3.3			3.6			4.8
Weighted-average discount rate
Operating leases	2.8		%	2.7		%	2.9		%
Finance leases	3.2		%	3.4		%	3.6		%

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2023	$	34,981	$	33,362	$	68,343
2024	33,774		23,072		56,846
2025	31,097		11,529		42,626
2026	26,970		6,828		33,798
2027	24,684		3,187		27,871
Thereafter	158,241		4,080		162,321
Total future minimum lease payments	309,747		82,058		391,805
Less: Interest	(45,113)		(4,497)		(49,610)
Total future minimum lease payments less interest	$	264,634	$	77,561	$	342,195

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 15 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 22 “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 portion of these assets that are applicable to the operating leases where we are the lessor totaled $118.5 million and $91.1 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2022. The portion of these assets

that are applicable to the operating leases where we are the lessor totaled $124.7 million and $99.4 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2021. The portion of these assets that are applicable to the operating leases where we are the lessor totaled $73.7 million and $53.1 million, for Land and Buildings and improvements, on a gross and net basis, 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 was preliminary and was not finalized until 2021, during the measurement period. Depreciation expense for such assets was $4.2 million, $4.2 million and $2.5 million for the years ended December 31, 2022, 2021 and 2020.

Future minimum lease payments due from our customers on leases as of December 31, 2022 were as follows (in thousands):

Year ending December 31,	Operating Leases
2023	$	39,727
2024	32,629
2025	22,446
2026	18,612
2027	13,965
Thereafter	43,706
Total	$	171,085

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 30 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, 2022, 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,
	2022		2021		2020
Components of lease expense:
Operating lease cost (a)	$	52,331	$	59,405	$	23,931
Financing lease cost:
Depreciation	25,687		29,743		16,504
Interest on lease liabilities	3,063		7,135		2,969
Sublease income	(7,991)		(3,785)		(551)
Net lease expense	$	73,090	$	92,498	$	42,853

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

Other information related to leases is as follows:

	Years Ended December 31,
	2022			2021			2020
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(42,949)		$	(52,226)		$	(20,070)
Operating cash flows from finance leases	$	(11,533)		$	(10,342)		$	(2,969)
Financing cash flows from finance leases	$	(33,860)		$	(32,441)		$	(19,970)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	7,889		$	50,886		$	44,919
Finance leases	$	18,694		$	24,567		$	38,858
Weighted-average remaining lease term (years)
Operating leases	11.1			11.7			10.5
Finance leases	3.3			3.6			4.8
Weighted-average discount rate
Operating leases	2.8		%	2.7		%	2.9		%
Finance leases	3.2		%	3.4		%	3.6		%

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2023	$	34,981	$	33,362	$	68,343
2024	33,774		23,072		56,846
2025	31,097		11,529		42,626
2026	26,970		6,828		33,798
2027	24,684		3,187		27,871
Thereafter	158,241		4,080		162,321
Total future minimum lease payments	309,747		82,058		391,805
Less: Interest	(45,113)		(4,497)		(49,610)
Total future minimum lease payments less interest	$	264,634	$	77,561	$	342,195

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 15 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 22 “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 portion of these assets that are applicable to the operating leases where we are the lessor totaled $118.5 million and $91.1 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2022. The portion of these assets

that are applicable to the operating leases where we are the lessor totaled $124.7 million and $99.4 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2021. The portion of these assets that are applicable to the operating leases where we are the lessor totaled $73.7 million and $53.1 million, for Land and Buildings and improvements, on a gross and net basis, 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 was preliminary and was not finalized until 2021, during the measurement period. Depreciation expense for such assets was $4.2 million, $4.2 million and $2.5 million for the years ended December 31, 2022, 2021 and 2020.

Future minimum lease payments due from our customers on leases as of December 31, 2022 were as follows (in thousands):

Year ending December 31,	Operating Leases
2023	$	39,727
2024	32,629
2025	22,446
2026	18,612
2027	13,965
Thereafter	43,706
Total	$	171,085

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 30 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, 2022, 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,
	2022		2021		2020
Components of lease expense:
Operating lease cost (a)	$	52,331	$	59,405	$	23,931
Financing lease cost:
Depreciation	25,687		29,743		16,504
Interest on lease liabilities	3,063		7,135		2,969
Sublease income	(7,991)		(3,785)		(551)
Net lease expense	$	73,090	$	92,498	$	42,853

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

Other information related to leases is as follows:

	Years Ended December 31,
	2022			2021			2020
Supplemental Cash Flow Information (in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(42,949)		$	(52,226)		$	(20,070)
Operating cash flows from finance leases	$	(11,533)		$	(10,342)		$	(2,969)
Financing cash flows from finance leases	$	(33,860)		$	(32,441)		$	(19,970)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	7,889		$	50,886		$	44,919
Finance leases	$	18,694		$	24,567		$	38,858
Weighted-average remaining lease term (years)
Operating leases	11.1			11.7			10.5
Finance leases	3.3			3.6			4.8
Weighted-average discount rate
Operating leases	2.8		%	2.7		%	2.9		%
Finance leases	3.2		%	3.4		%	3.6		%

Future minimum lease payments under non-cancellable leases as of December 31, 2022 were as follows (in thousands):

Years ending December 31,	Operating Lease Payments		Finance Lease Payments		Total Lease Payments
2023	$	34,981	$	33,362	$	68,343
2024	33,774		23,072		56,846
2025	31,097		11,529		42,626
2026	26,970		6,828		33,798
2027	24,684		3,187		27,871
Thereafter	158,241		4,080		162,321
Total future minimum lease payments	309,747		82,058		391,805
Less: Interest	(45,113)		(4,497)		(49,610)
Total future minimum lease payments less interest	$	264,634	$	77,561	$	342,195

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 15 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 22 “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 portion of these assets that are applicable to the operating leases where we are the lessor totaled $118.5 million and $91.1 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2022. The portion of these assets

that are applicable to the operating leases where we are the lessor totaled $124.7 million and $99.4 million, for Land and Buildings and improvements, on a gross and net basis, respectively, as of December 31, 2021. The portion of these assets that are applicable to the operating leases where we are the lessor totaled $73.7 million and $53.1 million, for Land and Buildings and improvements, on a gross and net basis, 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 was preliminary and was not finalized until 2021, during the measurement period. Depreciation expense for such assets was $4.2 million, $4.2 million and $2.5 million for the years ended December 31, 2022, 2021 and 2020.

Future minimum lease payments due from our customers on leases as of December 31, 2022 were as follows (in thousands):

Year ending December 31,	Operating Leases
2023	$	39,727
2024	32,629
2025	22,446
2026	18,612
2027	13,965
Thereafter	43,706
Total	$	171,085