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LEASES | 12 Months Ended
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Dec. 31, 2021
LEASES |
LEASES |
9. | LEASES
​ Description of Operating Leases: The Company has different types of operating leases, the specific terms and conditions of which vary from lease to lease. Certain operating lease agreements include terms such as: (i) renewal and early termination options; (ii) early buy-out and purchase options; and (iii) rent escalation clauses. The lease agreements also include provisions for the maintenance of the leased asset and payment of lease related costs. The Company reviews the specific terms and conditions of each lease and, as appropriate, notifies the lessor of any intent to exercise any option in accordance with the terms of the lease. In the normal course of business, the Company expects to be able to renew or replace most of its operating leases with other similar leases as they expire. The Company’s leases do not contain any other residual value guarantees. ​ The Company’s sub-lease income was nominal to the Company’s Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2021 and 2020. The Company did not have any finance leases during the years ended December 31, 2021 and 2020. Certain of the Company’s lease agreements include rental payments that may be adjusted in the future based on economic conditions and others include rental payments adjusted periodically for inflation. Variable lease expense is disclosed for the adjusted portion of such payments. ​ The lease type by underlying asset class and maximum terms of the Company’s operating leases are as follows: ​
​ | ​ | ​
Lease Type: |  | Term
Real estate and terminal leases |  | 65 years
Vessel charter leases |  | 10 years
Operations equipment and other leases |  | 8 years
​ Incremental Borrowing Rate: As most of the Company’s operating leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on information available at the date of adoption and subsequent lease commencement dates in calculating the present value of its operating lease liabilities. The incremental borrowing rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized nature of operating leases. ​ Components of Lease Cost: Components of lease cost recorded in the Company’s Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2021 and 2020 consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Years Ended
​ | ​ | December 31,
(In millions) |  | 2021 | ​ | 2020
Operating lease cost | ​ | $ | 110.7 | ​ | $ | 83.1
Short-term lease cost | ​ |  | 3.1 | ​ |  | 10.6
Variable lease cost | ​ |  | 0.6 | ​ |  | 0.8
Total lease cost | ​ | $ | 114.4 | ​ | $ | 94.5
​ Other Lease Information: Other information related to the Company’s operating leases for the years ended December 31, 2021 and 2020 are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Years Ended
​ | ​ | December 31,
(In millions) |  | 2021 | ​ | 2020
Cash paid for amounts included in operating lease liabilities | ​ | $ | 107.9 | ​ | $ | 83.6
Right of use assets obtained in the exchange for new operating lease liabilities | ​ | $ | 321.7 | ​ | $ | 70.1
​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31,
​ | ​ | 2021 |  | 2020
Weighted average remaining operating lease term | ​ | ​ | 5.1 years | ​ | ​ | 7.0 years
Weighted average incremental borrowing rate | ​ | ​ | 2.1% | ​ | ​ | 3.7%
​ Maturities of operating lease liabilities at December 31, 2021 are as follows: ​
​ | ​ | ​ | ​
​ |  | As of
Year (in millions) |  | December 31, 2021
2022 | ​ | $ | 145.1
2023 | ​ |  | 118.5
2024 | ​ |  | 98.3
2025 | ​ |  | 48.7
2026 | ​ |  | 20.0
Thereafter | ​ |  | 52.7
Total lease payments | ​ | ​ | 483.3
Less: Interest | ​ | ​ | (38.3)
Present value of operating lease liabilities | ​ | ​ | 445.0
Less: Short-term portion | ​ | ​ | (137.6)
Long-term operating lease liabilities | ​ | $ | 307.4
​ Sale and Leaseback of Equipment: On March 25, 2020, the Company entered into an agreement for the sale and leaseback of multiple tranches of chassis and container equipment. The net proceeds from the sales were $14.3 million, and the gain on the disposal of the equipment was not material to the Company’s Consolidated Financial Statements. The Company subsequently leased back the equipment under a five-year operating lease agreement, and the obligations under the lease are included in the maturities of operating lease liabilities table above. There were no sale and leaseback transactions during 2021 and 2019. ​ Termination of Vessel Charter: On November 26, 2018, MatNav entered into agreements whereby the MatNav owned vessel Maunalei was sold for $106.0 million and subsequently leased back from the buyer-lessor under a Bareboat Charter Agreement (the “Charter”). The transaction qualified for sale and leaseback treatment under ASC 840, Leases, with the Charter treated as an operating lease for accounting purposes. Lease payments were approximately $3.0 million per quarter, and the base term of the Charter was five years with a two year end-of-term renewal option. ​ On July 7, 2021, MatNav entered into an agreement to terminate the Charter for $95.8 million, thereby acquiring the vessel. The Company paid for the termination with a combination of cash on hand and borrowing on the revolving credit facility. The Company derecognized the related right-of-use (“ROU”) asset of $27.4 million and ROU liability of $28.5 million, and increased property and equipment by $94.7 million, net. Concurrent with the termination of the Charter, the Company was released from certain obligations under a guaranty related to the Charter.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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