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LEASES (Notes) | 12 Months Ended
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Dec. 31, 2020
Leases [Abstract] |
LEASES | LEASES The Company leases office space, office equipment, refinery support facilities and equipment, railcars and other logistics assets primarily under non-cancelable operating leases, with terms typically ranging from one to twenty years, subject to certain renewal options as applicable. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of lease liabilities and right-of-use assets. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Interest expense for finance leases is incurred based on the carrying value of the lease liability. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. For substantially all classes of underlying assets, the Company has elected the practical expedient not to separate lease and non-lease components, which allows for combining the components if certain criteria are met. For certain leases of refinery support facilities, the Company accounts for the non-lease service component separately. There are no material residual value guarantees associated with any of the Company’s leases. There are no significant restrictions or covenants included in the Company’s lease agreements other than those that are customary in such arrangements. Certain of the Company’s leases, primarily for the Company’s commercial and logistics asset classes, include provisions for variable payments. These variable payments are typically determined based on a measure of throughput or actual days the asset has operated during the contract term or another measure of usage and are not included in the initial measurement of lease liabilities and right-of-use assets. Lease Position as of December 31, 2020 and December 31, 2019 The table below presents the lease related assets and liabilities recorded on the Company’s Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019:
(in millions) |  | Classification on the Balance Sheet |  | December 31, 2020 |  | December 31, 2019
Assets |  |  |  |  |  |
Operating lease assets |  | Lease right of use assets |  | $ | 836.5 |  |  | $ | 306.4 |
Finance lease assets |  | Lease right of use assets |  | 80.4 |  |  | 24.2 |
Total lease right of use assets |  |  |  | $ | 916.9 |  |  | $ | 330.6 |
Liabilities |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Operating lease liabilities |  | Current operating lease liabilities |  | $ | 78.4 |  |  | $ | 72.1 |
Finance lease liabilities |  | Accrued expenses |  | 14.4 |  |  | 6.5 |
Noncurrent liabilities: |  |  |  |  |  |
Operating lease liabilities |  | Long-term operating lease liabilities |  | 756.0 |  |  | 233.1 |
Finance lease liabilities |  | Long-term financing lease liabilities |  | 68.3 |  |  | 18.4 |
Total lease liabilities |  |  |  | $ | 917.1 |  |  | $ | 330.1 |
Lease Costs The table below presents certain information related to costs for the Company’s leases for the year ended December 31, 2020 and December 31, 2019:
Lease Costs (in millions) |  | December 31, 2020 |  | December 31, 2019 |  |  |  |
Components of total lease costs: |  |  |  |  |  |  |  |
Finance lease costs |  |  |  |  |  |  |  |
Amortization of right of use assets |  | $ | 14.0 |  |  | $ | 2.0 |  |  |  |  |
Interest on lease liabilities |  | 4.3 |  |  | 0.8 |  |  |  |  |
Operating lease costs |  | 162.3 |  |  | 109.8 |  |  |  |  |
Short-term lease costs |  | 92.3 |  |  | 89.2 |  |  |  |  |
Variable lease costs |  | 11.6 |  |  | 8.3 |  |  |  |  |
Total lease costs |  | $ | 284.5 |  |  | $ | 210.1 |  |  |  |  |
Sale-leaseback Transactions On April 17, 2020, the Company closed on the sale of five hydrogen plants to Air Products in a sale-leaseback transaction for gross cash proceeds of $530.0 million and recognized a gain of $471.1 million. In connection with the sale, the Company entered into a transition services agreement through which Air Products will exclusively supply hydrogen, steam, carbon dioxide and other products (the “Products”) to the Martinez, Torrance and Delaware City refineries for a specified period (not expected to exceed 18 months). The transition services agreement also requires certain maintenance and operating activities to be provided by PBF Holding, for which the Company will be reimbursed, during the term of the agreement. In August 2020, the parties executed long-term supply agreements through which Air Products will supply the Products for a term of fifteen years at these same refineries. As a result of these transactions, the Company recorded lease right of use assets of $504.1 million and corresponding operating lease liabilities of approximately $503.9 million. There were no net gains or losses on any sale-leaseback transactions for the year ended December 31, 2020. Other Information The table below presents supplemental cash flow information related to leases for the year ended December 31, 2020 and December 31, 2019 (in millions):
| Year Ended December 31, 2020 |  |
| 2020 |  | 2019 |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows for operating leases | $ | 163.1 |  |  | $ | 110.3 |  |  |
Operating cash flows for finance leases | 4.3 |  |  | 0.8 |  |  |
Financing cash flows for finance leases | 12.4 |  |  | 1.4 |  |  |
Supplemental non-cash amounts of lease liabilities arising from obtaining right-of-use assets | 702.0 |  |  | 184.9 |  |  |
Lease Term and Discount Rate The table below presents certain information related to the weighted average remaining lease term and weighted average discount rate for the Company’s leases as of December 31, 2020:
Weighted average remaining lease term - operating leases | 13.8 years |  |  |  |  |  |
Weighted average remaining lease term - finance leases | 7.1 years |  |  |  |  |  |
Weighted average discount rate - operating leases | 9.6 | % |  |  |  |  |  |
Weighted average discount rate - finance leases | 5.5 | % |  |  |  |  |  |
Undiscounted Cash Flows The table below reconciles the fixed component of the undiscounted cash flows for each of the periods presented to the lease liabilities recorded on the Consolidated Balance Sheets as of December 31, 2020:
Amounts due in the year ended December 31, (in millions) |  | Finance Leases |  | Operating Leases
2021 |  | $ | 18.6 |  |  | $ | 153.0 |
2022 |  | 12.8 |  |  | 134.1 |
2023 |  | 12.8 |  |  | 111.8 |
2024 |  | 12.8 |  |  | 111.4 |
2025 |  | 11.4 |  |  | 98.0 |
Thereafter |  | 31.7 |  |  | 907.3 |
Total minimum lease payments |  | 100.1 |  |  | 1,515.6 |
Less: effect of discounting |  | 17.4 |  |  | 681.2 |
Present value of future minimum lease payments |  | 82.7 |  |  | 834.4 |
Less: current obligations under leases |  | 14.4 |  |  | 78.4 |
Long-term lease obligations |  | $ | 68.3 |  |  | $ | 756.0 |
As of December 31, 2020, the Company has entered into certain leases that have not yet commenced. Such leases include a 15-year lease for water treatment equipment, with future lease payments estimated to total approximately $34.1 million, and is not expected to commence prior to April 1, 2021. No other such pending leases, either individually or in the aggregate, are material. There are no material lease arrangements in which the Company is the lessor.

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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