Leases, Codification Topic 842

Jan. 01, 2019

Leases

We have a total of four operating leases related to office space of which the term of two expires in 2036 and the other two in 2023. We have the option to terminate our leases 30 days after providing written notice of the election to terminate to the landlord. Two of our leases include a right of renewal and an annual 3% escalation on the anniversary date of lease inception. We have the option to renew our leases by giving notice to landlord not less than 60 days prior to the expiration of the lease term. We have not included the option to renew the leases in our determination of lease term because at the time of lease inception it was not certain we would exercise the renewal. We have included the variable lease payments based on the escalation percentage from above in the determination of our lease liabilities and our ROU assets. The other two leases include a non-lease component for maintenance expense. No leases include a residual value guarantee or provide us an option to acquire the real property at the end of the lease. We have no material subleasing arrangements.

Lease expense totaled $71 thousand for each of the years ended December 31, 2021, 2020 and 2019.

In November 2020, two operating leases were renewed, and lease terms were extended until 2023, resulting in additional ROU assets and lease liabilities of $94 thousand.

Amounts recognized in the accompanying consolidated balance sheets are as follows:


Lease activity (in thousands)	Balance sheet location	December 31, 2021		December 31, 2020
ROU assets	Other assets	$	461	$	513
Current lease liability	Other current liabilities	$	63	$	62
Long-term lease liability	Other liabilities	$	422	$	467

As of December 31, 2021, the weighted average discount rate of our leases was 4.1% and the weighted average remaining lease term was 12.8 years.

The undiscounted future minimum lease payments and total lease liabilities as of December 31, 2021 are presented in the table below:



(In thousands)	December 31, 2021
2022	$	65
2023	66
2024	35
2025	36
2026	37
Remaining years	406
Undiscounted future minimum lease payments	645
Less: Interest	(160)
Total lease liabilities	$	485

BP Midstream Partners LP 10-K