LEASES

12 Months Ended

Dec. 31, 2019

LEASES

The Partnership is both a lessee and a lessor. A contract is determined to contain a lease if there is an identified asset to which the lessee has the right to substantially all of the economic benefits and has control over how the asset is used throughout the contract period. Upon adoption of ASC 842, Leases, the Partnership elected the practical expedients to not separate lease and non-lease components for all of its leases.

Lessee lease information

As a lessee, the Partnership’s leases consist of office equipment and office space and are classified as operating leases. Leases for some printers have a variable payment for printing in excess of a page allowance set in the lease contract. The discount rate for leases was determined based on Northwest Farm Credit Services’ (NWFCS), the Partnership’s lender, cost of funds for the lease period plus a margin of 1.60%, as provided for in the Partnership’s credit agreement with NWFCS.

The following table presents the balances of our right-of-use assets and lease liabilities and the balance sheet captions in which they are reported (in thousands):



	December 31, 2019		Balance Sheet caption

Right of use assets	$	161	Other assets
Lease liability - current	$	98	Other current liabilities
Lease liability - long-term	$	63	Environmental remediation and other long-term liabilities

The following table presents the components of lease costs and other lease information for the year ended December 31, 2019:



In thousands, except weighted-average information
	2019
Lease cost
Operating lease cost	$	188
Variable lease cost	8
Total lease cost	$	196

Other lease information
Cash paid for amounts included in the measurement of lease liabilities	$	196
Right-of-use asset obtained in exchange for new leases	$	17
Weighted-average remaining lease term in years	1.84
Weighted average discount rate	4.2		%

Payments due under lease contracts for the next five years and thereafter are as follows (in thousands):



2020	$	103
2021	50
2022	14
Unamortized discount	(8		)
Total lease liability at December 31, 2019	$	161

Lessor lease information

As a lessor, the Partnership’s leases consist of leases of commercial and residential real estate, reported in the Real Estate segment under “rentals and other”, and land leases on the Partnership’s and Funds’ timberland for cellular communication towers (Tower Leases), reported in the Partnership Timber and Funds Timber segments under “other revenue”. All these leases are classified as operating leases. Tower Leases have a variable payment component for revenue sharing from subleases of space on the tower. Tower Leases typically have a five-year term and two to five automatic five-year extensions.

Commercial real estate leases have non-lease components of taxes, insurance and common area maintenance. Tower Leases have non-lease components for real property taxes related to tenant improvements.

The following table presents the components of lease income for the year ended December 31, 2019 (in thousands):



	2019

Lease Income
Operating lease income	$	1,710
Variable lease income	55
Total lease income	$	1,765

Buildings subject to operating leases had a cost of $2.1 million and accumulated depreciation of $1.2 million at December 31, 2019.

Lease income at December 31, 2019, based on payments due by period under the lease contracts, are presented in the following table (in thousands):



2020	$	792
2021	683
2022	649
2023	594
2024	550
Thereafter	3,586
Total	$	6,854

Leases