Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.20.2
Leases
 9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Leases LEASES
The Company enters into a variety of operating lease agreements through the normal course of its business including certain administrative offices. The leases are long-term, non-concealable real estate lease agreements, expiring at various dates through fiscal 2028. The agreements generally provide for fixed minimum rental payments and the payment of utilities, real estate taxes, insurance and repairs. The Company also leases certain land parcels related to our energy projects, expiring at various dates through fiscal 2050. The office and land leases make up a significant portion of the Company’s operating lease activity. Many of these leases have one or more renewal options that allow the Company, at its discretion, to renew the lease for six months to seven years. Only renewal options that the Company believed were likely to be exercised were included in our lease calculations. Many land leases include minimum lease payments that increase when the related project becomes operational. In these cases, the commercial operation date was estimated by the Company and used to calculate the estimated minimum lease payments.
Supplemental balance sheet information related to leases at September 30, 2020 and December 31, 2019 is as follows:
September 30, 2020 December 31, 2019
Operating Leases:
Operating lease assets $ 36,336  $ 32,791 
Current operating lease liabilities 6,010  5,802 
Long-term portions of operating lease liabilities 32,509  29,101 
Total operating lease liabilities $ 38,519  $ 34,903 
Weighted-average remaining lease term 11 years 11 years
Weighted-average discount rate 6.0  % 6.3  %
Financing Leases:
Energy assets, net $ 34,537  $ 36,134 
Current portions of financing lease liabilities 4,746  4,997 
Long-term financing lease liabilities, less current portions and net of deferred financing fees 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Weighted-average remaining lease term 16 years 17 years
Weighted-average discount rate 11.9  % 11.8  %
The costs related to the Company’s leases are as follows:
Three Months Ended September 30,
 Nine Months Ended September 30,
2020 2019 2020 2019
Operating Lease:
Operating lease costs $ 2,001  $ 1,913  $ 5,933  $ 5,660 
Financing Lease:
Amortization expense 533  533 1,597  1,597 
Interest on lease liabilities 723 854 2,282  2,750 
Total lease costs $ 3,257  $ 3,300  $ 9,812  $ 10,007 

The Company’s estimated minimum future lease obligations under our leases are as follows: 
  Operating Leases Financing Leases
Year ended December 31,  
2020 $ 2,339  $ 4,014 
2021 7,342  6,792 
2022 6,716  5,178 
2023 5,381  3,676 
2024 4,500  2,565 
Thereafter 28,115  24,080 
Total minimum lease payments $ 54,393  $ 46,305 
Less: interest 15,874  20,207 
Present value of lease liabilities $ 38,519  $ 26,098 
The Company has determined that certain power purchase agreements (“PPAs”) contain a lease component in accordance with ASC 840, Leases. The Company recognized $2,261 and $6,546 of operating lease revenue under these agreements during the three and nine months ended September 30, 2020, respectively, which was reflected in revenues on the condensed consolidated statements of income. The Company recognized $2,243 and $6,737 of operating lease revenue under these agreements during the three and nine months ended September 30, 2019, respectively, which was reflected in revenues on the condensed consolidated statements of income.
Sale-Leaseback
Most of the solar photovoltaic (“solar PV”) projects sold to date under the sale-leaseback program have been determined by the Company to be financing leases. The Company defers any gain or loss, representing the excess or shortfall of cash received from the investor compared to the net book value of the asset in the Company’s condensed consolidated balance sheets at the time of the sale. The Company records the long term portion of any deferred gain or loss in its condensed consolidated balance sheets in other liabilities and other assets, respectively, and the current portion in accrued expenses and other current liabilities and prepaid expenses and other current assets. The deferred amounts are amortized over the lease term and are included in cost of revenues in its condensed consolidated statements of income. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $57 and $57 for the three months ended September 30, 2020 and 2019, respectively. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $170 and $172 for the nine months ended September 30, 2020 and 2019, respectively.
During the third quarter of 2018, the Company entered into an agreement with an investor which gives us the option to sell and contemporaneously lease back solar PV projects through August 2019 up to a maximum funding amount of $100 million. In January 2020, the Company amended the August 2018 agreement with the investor to extend the end date of the agreement to November 24, 2020 and increase the maximum funding amount up to $150 million. During the nine months ended September 30,
2020, the Company completed one acquisition of a solar PV project and $130 million remained available under the lending commitment.
A summary of amounts related to sale leasebacks in the Company’s condensed consolidated balance sheets is as follows:
September 30, 2020 December 31, 2019
Financing lease assets, net $ 34,537  $ 36,134 
Deferred loss, short-term, net 115  115 
Deferred loss, long-term, net 1,715  1,801 
Total deferred loss $ 1,830  $ 1,916 
Financing lease liabilities, short-term 4,746  4,997 
Financing lease liabilities, long-term 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Deferred gain, short-term, net 345  345 
Deferred gain, long-term, net 5,206  5,463 
Total deferred gain $ 5,551  $ 5,808 
Leases LEASES
The Company enters into a variety of operating lease agreements through the normal course of its business including certain administrative offices. The leases are long-term, non-concealable real estate lease agreements, expiring at various dates through fiscal 2028. The agreements generally provide for fixed minimum rental payments and the payment of utilities, real estate taxes, insurance and repairs. The Company also leases certain land parcels related to our energy projects, expiring at various dates through fiscal 2050. The office and land leases make up a significant portion of the Company’s operating lease activity. Many of these leases have one or more renewal options that allow the Company, at its discretion, to renew the lease for six months to seven years. Only renewal options that the Company believed were likely to be exercised were included in our lease calculations. Many land leases include minimum lease payments that increase when the related project becomes operational. In these cases, the commercial operation date was estimated by the Company and used to calculate the estimated minimum lease payments.
Supplemental balance sheet information related to leases at September 30, 2020 and December 31, 2019 is as follows:
September 30, 2020 December 31, 2019
Operating Leases:
Operating lease assets $ 36,336  $ 32,791 
Current operating lease liabilities 6,010  5,802 
Long-term portions of operating lease liabilities 32,509  29,101 
Total operating lease liabilities $ 38,519  $ 34,903 
Weighted-average remaining lease term 11 years 11 years
Weighted-average discount rate 6.0  % 6.3  %
Financing Leases:
Energy assets, net $ 34,537  $ 36,134 
Current portions of financing lease liabilities 4,746  4,997 
Long-term financing lease liabilities, less current portions and net of deferred financing fees 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Weighted-average remaining lease term 16 years 17 years
Weighted-average discount rate 11.9  % 11.8  %
The costs related to the Company’s leases are as follows:
Three Months Ended September 30,
 Nine Months Ended September 30,
2020 2019 2020 2019
Operating Lease:
Operating lease costs $ 2,001  $ 1,913  $ 5,933  $ 5,660 
Financing Lease:
Amortization expense 533  533 1,597  1,597 
Interest on lease liabilities 723 854 2,282  2,750 
Total lease costs $ 3,257  $ 3,300  $ 9,812  $ 10,007 

The Company’s estimated minimum future lease obligations under our leases are as follows: 
  Operating Leases Financing Leases
Year ended December 31,  
2020 $ 2,339  $ 4,014 
2021 7,342  6,792 
2022 6,716  5,178 
2023 5,381  3,676 
2024 4,500  2,565 
Thereafter 28,115  24,080 
Total minimum lease payments $ 54,393  $ 46,305 
Less: interest 15,874  20,207 
Present value of lease liabilities $ 38,519  $ 26,098 
The Company has determined that certain power purchase agreements (“PPAs”) contain a lease component in accordance with ASC 840, Leases. The Company recognized $2,261 and $6,546 of operating lease revenue under these agreements during the three and nine months ended September 30, 2020, respectively, which was reflected in revenues on the condensed consolidated statements of income. The Company recognized $2,243 and $6,737 of operating lease revenue under these agreements during the three and nine months ended September 30, 2019, respectively, which was reflected in revenues on the condensed consolidated statements of income.
Sale-Leaseback
Most of the solar photovoltaic (“solar PV”) projects sold to date under the sale-leaseback program have been determined by the Company to be financing leases. The Company defers any gain or loss, representing the excess or shortfall of cash received from the investor compared to the net book value of the asset in the Company’s condensed consolidated balance sheets at the time of the sale. The Company records the long term portion of any deferred gain or loss in its condensed consolidated balance sheets in other liabilities and other assets, respectively, and the current portion in accrued expenses and other current liabilities and prepaid expenses and other current assets. The deferred amounts are amortized over the lease term and are included in cost of revenues in its condensed consolidated statements of income. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $57 and $57 for the three months ended September 30, 2020 and 2019, respectively. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $170 and $172 for the nine months ended September 30, 2020 and 2019, respectively.
During the third quarter of 2018, the Company entered into an agreement with an investor which gives us the option to sell and contemporaneously lease back solar PV projects through August 2019 up to a maximum funding amount of $100 million. In January 2020, the Company amended the August 2018 agreement with the investor to extend the end date of the agreement to November 24, 2020 and increase the maximum funding amount up to $150 million. During the nine months ended September 30,
2020, the Company completed one acquisition of a solar PV project and $130 million remained available under the lending commitment.
A summary of amounts related to sale leasebacks in the Company’s condensed consolidated balance sheets is as follows:
September 30, 2020 December 31, 2019
Financing lease assets, net $ 34,537  $ 36,134 
Deferred loss, short-term, net 115  115 
Deferred loss, long-term, net 1,715  1,801 
Total deferred loss $ 1,830  $ 1,916 
Financing lease liabilities, short-term 4,746  4,997 
Financing lease liabilities, long-term 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Deferred gain, short-term, net 345  345 
Deferred gain, long-term, net 5,206  5,463 
Total deferred gain $ 5,551  $ 5,808 
Leases LEASES
The Company enters into a variety of operating lease agreements through the normal course of its business including certain administrative offices. The leases are long-term, non-concealable real estate lease agreements, expiring at various dates through fiscal 2028. The agreements generally provide for fixed minimum rental payments and the payment of utilities, real estate taxes, insurance and repairs. The Company also leases certain land parcels related to our energy projects, expiring at various dates through fiscal 2050. The office and land leases make up a significant portion of the Company’s operating lease activity. Many of these leases have one or more renewal options that allow the Company, at its discretion, to renew the lease for six months to seven years. Only renewal options that the Company believed were likely to be exercised were included in our lease calculations. Many land leases include minimum lease payments that increase when the related project becomes operational. In these cases, the commercial operation date was estimated by the Company and used to calculate the estimated minimum lease payments.
Supplemental balance sheet information related to leases at September 30, 2020 and December 31, 2019 is as follows:
September 30, 2020 December 31, 2019
Operating Leases:
Operating lease assets $ 36,336  $ 32,791 
Current operating lease liabilities 6,010  5,802 
Long-term portions of operating lease liabilities 32,509  29,101 
Total operating lease liabilities $ 38,519  $ 34,903 
Weighted-average remaining lease term 11 years 11 years
Weighted-average discount rate 6.0  % 6.3  %
Financing Leases:
Energy assets, net $ 34,537  $ 36,134 
Current portions of financing lease liabilities 4,746  4,997 
Long-term financing lease liabilities, less current portions and net of deferred financing fees 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Weighted-average remaining lease term 16 years 17 years
Weighted-average discount rate 11.9  % 11.8  %
The costs related to the Company’s leases are as follows:
Three Months Ended September 30,
 Nine Months Ended September 30,
2020 2019 2020 2019
Operating Lease:
Operating lease costs $ 2,001  $ 1,913  $ 5,933  $ 5,660 
Financing Lease:
Amortization expense 533  533 1,597  1,597 
Interest on lease liabilities 723 854 2,282  2,750 
Total lease costs $ 3,257  $ 3,300  $ 9,812  $ 10,007 

The Company’s estimated minimum future lease obligations under our leases are as follows: 
  Operating Leases Financing Leases
Year ended December 31,  
2020 $ 2,339  $ 4,014 
2021 7,342  6,792 
2022 6,716  5,178 
2023 5,381  3,676 
2024 4,500  2,565 
Thereafter 28,115  24,080 
Total minimum lease payments $ 54,393  $ 46,305 
Less: interest 15,874  20,207 
Present value of lease liabilities $ 38,519  $ 26,098 
The Company has determined that certain power purchase agreements (“PPAs”) contain a lease component in accordance with ASC 840, Leases. The Company recognized $2,261 and $6,546 of operating lease revenue under these agreements during the three and nine months ended September 30, 2020, respectively, which was reflected in revenues on the condensed consolidated statements of income. The Company recognized $2,243 and $6,737 of operating lease revenue under these agreements during the three and nine months ended September 30, 2019, respectively, which was reflected in revenues on the condensed consolidated statements of income.
Sale-Leaseback
Most of the solar photovoltaic (“solar PV”) projects sold to date under the sale-leaseback program have been determined by the Company to be financing leases. The Company defers any gain or loss, representing the excess or shortfall of cash received from the investor compared to the net book value of the asset in the Company’s condensed consolidated balance sheets at the time of the sale. The Company records the long term portion of any deferred gain or loss in its condensed consolidated balance sheets in other liabilities and other assets, respectively, and the current portion in accrued expenses and other current liabilities and prepaid expenses and other current assets. The deferred amounts are amortized over the lease term and are included in cost of revenues in its condensed consolidated statements of income. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $57 and $57 for the three months ended September 30, 2020 and 2019, respectively. Net gains from amortization expense in cost of revenues related to deferred gains and losses was $170 and $172 for the nine months ended September 30, 2020 and 2019, respectively.
During the third quarter of 2018, the Company entered into an agreement with an investor which gives us the option to sell and contemporaneously lease back solar PV projects through August 2019 up to a maximum funding amount of $100 million. In January 2020, the Company amended the August 2018 agreement with the investor to extend the end date of the agreement to November 24, 2020 and increase the maximum funding amount up to $150 million. During the nine months ended September 30,
2020, the Company completed one acquisition of a solar PV project and $130 million remained available under the lending commitment.
A summary of amounts related to sale leasebacks in the Company’s condensed consolidated balance sheets is as follows:
September 30, 2020 December 31, 2019
Financing lease assets, net $ 34,537  $ 36,134 
Deferred loss, short-term, net 115  115 
Deferred loss, long-term, net 1,715  1,801 
Total deferred loss $ 1,830  $ 1,916 
Financing lease liabilities, short-term 4,746  4,997 
Financing lease liabilities, long-term 21,352  23,500 
Total financing lease liabilities $ 26,098  $ 28,497 
Deferred gain, short-term, net 345  345 
Deferred gain, long-term, net 5,206  5,463 
Total deferred gain $ 5,551  $ 5,808