Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

Additionally, in June 2020, the Company entered into one sublease agreement with a third party for a leased property that the Company no longer occupies.

The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Finance lease cost:
Amortization of right-of-use assets	$	1,629	$	2,625	$	6,422	$	7,602
Interest on lease liabilities	345		665		1,403		2,015
Operating lease cost	6,841		5,167		18,511		15,431
Variable lease cost	637		746		2,208		2,353
Sublease (income)	(48)		—		(64)		—
Total lease cost, net	$	9,404	$	9,203	$	28,480	$	27,401

Supplemental cash flow and other information related to leases for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	6,212	$	5,025	$	16,696	$	15,575
Finance leases	2,242		3,710		8,266		10,504
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	9,838		446		29,492		70,501
Finance leases	—		1,194		—		65,333

During the nine months ended September 30, 2020 the Company amended certain finance leases, the change in terms of which caused the leases to be reclassified to operating leases. In connection with the amendments the Company wrote-off finance lease right-of-use assets and liabilities of $17.6 million and $15.0 million, respectively, and recognized operating lease right-of-use assets and liabilities of $14.5 million and $11.9 million, respectively. There was no gain or loss recognized as a result of these amendments.

Lease terms and discount rates as of September 30, 2020 and December 31, 2019 were as follows:

	September 30, 2020		December 31, 2019
Weighted-average remaining lease term:
Operating leases	6.1 years		6.4 years
Finance leases	0.9 years		1.3 years
Weighted-average discount rate:
Operating leases	4.7	%	5.4	%
Finance leases	5.2	%	5.2	%

Future minimum lease commitments as of September 30, 2020 are as follows:

($ in thousands)	Finance		Operating		Sublease Income
Remainder of 2020	$	6,024	$	6,070	$	(51)
2021	17,454		24,740		(171)
2022	4,135		16,628		—
2023	—		8,394		—
2024	—		5,748		—
Thereafter	—		26,135		—
Total lease payments	27,613		87,715		(222)
Less imputed interest	(979)		(11,980)		—
Total	$	26,634	$	75,735	$	(222)

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of September 30, 2020 is $8.0 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as financing leases, the Company includes the residual value guarantee as estimated in the lease agreement, in the financing lease liability.

Leases

Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

Additionally, in June 2020, the Company entered into one sublease agreement with a third party for a leased property that the Company no longer occupies.

The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Finance lease cost:
Amortization of right-of-use assets	$	1,629	$	2,625	$	6,422	$	7,602
Interest on lease liabilities	345		665		1,403		2,015
Operating lease cost	6,841		5,167		18,511		15,431
Variable lease cost	637		746		2,208		2,353
Sublease (income)	(48)		—		(64)		—
Total lease cost, net	$	9,404	$	9,203	$	28,480	$	27,401

Supplemental cash flow and other information related to leases for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	6,212	$	5,025	$	16,696	$	15,575
Finance leases	2,242		3,710		8,266		10,504
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	9,838		446		29,492		70,501
Finance leases	—		1,194		—		65,333

During the nine months ended September 30, 2020 the Company amended certain finance leases, the change in terms of which caused the leases to be reclassified to operating leases. In connection with the amendments the Company wrote-off finance lease right-of-use assets and liabilities of $17.6 million and $15.0 million, respectively, and recognized operating lease right-of-use assets and liabilities of $14.5 million and $11.9 million, respectively. There was no gain or loss recognized as a result of these amendments.

Lease terms and discount rates as of September 30, 2020 and December 31, 2019 were as follows:

	September 30, 2020		December 31, 2019
Weighted-average remaining lease term:
Operating leases	6.1 years		6.4 years
Finance leases	0.9 years		1.3 years
Weighted-average discount rate:
Operating leases	4.7	%	5.4	%
Finance leases	5.2	%	5.2	%

Future minimum lease commitments as of September 30, 2020 are as follows:

($ in thousands)	Finance		Operating		Sublease Income
Remainder of 2020	$	6,024	$	6,070	$	(51)
2021	17,454		24,740		(171)
2022	4,135		16,628		—
2023	—		8,394		—
2024	—		5,748		—
Thereafter	—		26,135		—
Total lease payments	27,613		87,715		(222)
Less imputed interest	(979)		(11,980)		—
Total	$	26,634	$	75,735	$	(222)

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of September 30, 2020 is $8.0 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as financing leases, the Company includes the residual value guarantee as estimated in the lease agreement, in the financing lease liability.

Lessor, Operating Leases

Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

Additionally, in June 2020, the Company entered into one sublease agreement with a third party for a leased property that the Company no longer occupies.

The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Finance lease cost:
Amortization of right-of-use assets	$	1,629	$	2,625	$	6,422	$	7,602
Interest on lease liabilities	345		665		1,403		2,015
Operating lease cost	6,841		5,167		18,511		15,431
Variable lease cost	637		746		2,208		2,353
Sublease (income)	(48)		—		(64)		—
Total lease cost, net	$	9,404	$	9,203	$	28,480	$	27,401

Supplemental cash flow and other information related to leases for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	6,212	$	5,025	$	16,696	$	15,575
Finance leases	2,242		3,710		8,266		10,504
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	9,838		446		29,492		70,501
Finance leases	—		1,194		—		65,333

During the nine months ended September 30, 2020 the Company amended certain finance leases, the change in terms of which caused the leases to be reclassified to operating leases. In connection with the amendments the Company wrote-off finance lease right-of-use assets and liabilities of $17.6 million and $15.0 million, respectively, and recognized operating lease right-of-use assets and liabilities of $14.5 million and $11.9 million, respectively. There was no gain or loss recognized as a result of these amendments.

Lease terms and discount rates as of September 30, 2020 and December 31, 2019 were as follows:

	September 30, 2020		December 31, 2019
Weighted-average remaining lease term:
Operating leases	6.1 years		6.4 years
Finance leases	0.9 years		1.3 years
Weighted-average discount rate:
Operating leases	4.7	%	5.4	%
Finance leases	5.2	%	5.2	%

Future minimum lease commitments as of September 30, 2020 are as follows:

($ in thousands)	Finance		Operating		Sublease Income
Remainder of 2020	$	6,024	$	6,070	$	(51)
2021	17,454		24,740		(171)
2022	4,135		16,628		—
2023	—		8,394		—
2024	—		5,748		—
Thereafter	—		26,135		—
Total lease payments	27,613		87,715		(222)
Less imputed interest	(979)		(11,980)		—
Total	$	26,634	$	75,735	$	(222)

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of September 30, 2020 is $8.0 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as financing leases, the Company includes the residual value guarantee as estimated in the lease agreement, in the financing lease liability.