v3.22.2.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
Operating Lease Expense
The partnership leases certain facilities, parcels of land, and railcars with remaining terms ranging from less than one year to approximately 9.1 years, including renewal options reasonably certain to be exercised for the land and facility leases. Railcar agreement renewals are not considered reasonably certain to be exercised as they typically renew with different underlying terms.
The components of lease expense for the three and nine months ended September 30, 2022 and 2021, are as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Lease expense
Operating lease expense$3,680 $3,276 $10,849 $10,631 
Variable lease expense (benefit) (1)
172 33 334 (124)
Total lease expense$3,852 $3,309 $11,183 $10,507 
(1) Represents railcar lease abatements provided by the lessor when railcars are out of service during periods of maintenance or upgrade, offset by amounts incurred in excess of the minimum payments required for the handling and unloading of railcars for a certain lease.
Supplemental cash flow information related to operating leases is as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,357 $3,188 $10,044 $10,373 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases— 2,959 7,740 12,641 
Right-of-use assets and lease obligations derecognized due to lease modifications:
Operating leases— 1,838 — 1,889 
Supplemental balance sheet information related to operating leases is as follows:
September 30,
2022		December 31,
2021
Weighted average remaining lease term3.9 years4.1 years
Weighted average discount rate3.53 %3.65 %
Aggregate minimum lease payments under the operating lease agreements for the remainder of 2022 and in future years are as follows (in thousands):
Year Ending December 31,
Amount
2022$3,759 
202312,576 
202410,533 
20257,962 
20263,078 
Thereafter
3,236 
Total
41,144 
Less: Present value discount(2,706)
Operating lease liabilities$38,438 
The partnership has additional railcar operating leases that will commence within the next twelve months, with undiscounted future lease payments of approximately $4.4 million and lease terms of five years. This amount is not included in the tables above.
Lease Revenue
The components of lease revenue for the three and nine months ended September 30, 2022 and 2021, are as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Lease revenue
Operating lease revenue$16,656$15,631$48,247$48,191
Variable lease revenue (1)
5246321,8321,785
Total lease revenue$17,180$16,263$50,079$49,976
(1) Represents amounts charged to Green Plains Trade under the storage and throughput agreement in excess of the initial rate of $0.05 per gallon, amounts delivered by Green Plains Trade and other customers in excess of various minimum volume commitments, and the difference between the contracted railcar volumetric capacity and the actual amount provided to Green Plains Trade during the period.
In accordance with the amended storage and throughput agreement, Green Plains Trade is obligated to deliver a minimum volume of 217.7 mmg per calendar quarter to the partnership’s storage facilities and pay $0.05312 per gallon on all volume it throughputs associated with the agreement. The minimum volume commitment decreased from 232.5 mmg per calendar quarter to 217.7 mmg per calendar quarter as of March 22, 2021, in conjunction with the Ord disposition.
The remaining lease term for the storage and throughput agreement is 6.8 years with automatic one year renewal periods in which either party has the right to terminate the contract. Due to the unilateral right to termination during the renewal period, the lease contract would no longer contain enforceable rights or obligations. Therefore, the lease term does not include the successive one year renewal periods. Anticipated minimum operating lease revenue under this agreement assuming a consistent rate of $0.05312 per gallon for the remainder of 2022 and in future years, is as follows (in thousands):
Year Ending December 31,
Amount
2022$11,564
202346,257
202446,257
202546,257
202646,257
Thereafter115,642
Total$312,234
In accordance with the amended rail transportation services agreement with Green Plains Trade, Green Plains Trade is required to pay the rail transportation services fee for railcar volumetric capacity provided by the partnership. The remaining lease term for this agreement is 6.8 years, with automatic one year renewal periods in which either party has the right to terminate the contract. Due to the unilateral right to termination during the renewal period, the lease contract would no longer contain enforceable rights or obligations. Therefore, the lease term does not include the successive one year renewal periods. Under the terms of the agreement, Green Plains Trade is not required to pay for volumetric capacity that is not available due to inspections, upgrades, or routine repairs and maintenance. As a result, the actual volumetric capacity billed may be reduced based on the amount of volumetric capacity available for use during any applicable period.
Anticipated minimum operating lease revenue under this agreement for the remainder of 2022 and in future years is as follows (in thousands):
Year Ending December 31,
Amount
2022$5,564
202316,771
202412,714
202519,831
20262,743
Thereafter1,203
Total$58,826
Other Commitments and Contingencies
The partnership has agreements for contracted services with certain vendors that require the partnership to pay minimum monthly amounts, which expire on various dates. These agreements do not contain an identified asset and therefore are not considered operating leases. The partnership satisfied the minimum commitments under these agreements during the three and nine months ended September 30, 2022 and 2021. Aggregate minimum payments under these agreements for the remainder of 2022 and in future years are as follows (in thousands):
Year Ending December 31,
Amount
2022$165
2023—
2024—
2025—
2026—
Thereafter—
Total$165
Legal
The partnership may be involved in litigation that arises during the ordinary course of business. Currently, the partnership is not a party to any material litigation.