|12 Months Ended|
Dec. 31, 2021
As of December 31, 2021, the Company leases 1,150 of the convenience stores that it operates, 161 independent dealer locations and certain office spaces used as its headquarters in the US, including land and buildings in certain cases. Most of the lease agreements are for long-term periods, ranging from 15 to 20 years, and generally include several renewal options for extension periods for to 25 years each. Additionally, the Company leases certain store equipment, office equipment, automatic tank gauges, store lighting and fuel dispensers.
As of December 31, 2021, there are approximately 720 sites which are leased under 37 separate master lease agreements. Master leases with 10 lessors encompass a total of approximately 670 sites. Master leases with the same landlord contain cross-default provisions, in most cases. In most instances of leases of multiple stores from one landlord, each one under a separate lease agreement, the lease agreements contain cross-default provisions between all or some of the other lease agreements with the same landlord.
The lease agreements include lease payments that are set at the beginning of the lease, but which may increase by a specified increment or pursuant to a formula both during the course of the initial period and any additional option periods.
Some of the lease agreements include escalation clauses based on the consumer price index, and some of the lease agreements include an increase in the consumer price index coupled with a multiplier and a percentage increase cap effectively assures the cap will be reached each year. Lease payments determined as in-substance fixed payments are included in the lease payments used for the measurement of the lease liabilities. Some of the lease agreements include lease payments which are contingent upon petroleum and merchandise sales (these amounts were not material during the above periods). In some of the lease agreements, the right of first refusal to purchase the sites from the lessor is given and in some of the lease agreements an option to purchase the sites from the lessor is given.
The leases are typically triple net leases whereby the lessor is responsible for the repair and maintenance at the site, insurance and property taxes in addition to environmental compliance.
The components of lease cost recorded on the consolidated statements of operations were as follows:
In 2021 and 2020, the total cash outflows for leases amounted to approximately $128.4 million and $106.3 million for operating leases, respectively, and $25.0 million and $24.7 million for financing leases, respectively.
Supplemental balance sheet data related to leases was as follows:
As of December 31, 2021, maturities of lease liabilities for operating lease obligations and finance lease obligations having an initial or remaining non-cancellable lease terms in excess of one year were as follows. The minimum lease payments presented below
include periods where an option is reasonably certain to be exercised and do not take into consideration any future consumer price index adjustments for these agreements.
The Company leases and subleases owned and leased properties to independent dealers and other tenants and subtenants which are accounted for as operating subleases. These leases and subleases are generally for periods of up to 10 years, which may be a fixed period or a shorter period with an option or series of renewal options, and in certain cases with additional renewal options past such 10-year period. Some of the lease agreements include lease payments which are based upon such tenant’s or subtenants’ sales subject to fixed minimum lease payments. At the time that an agreement is entered into, the independent dealers and other tenants and subtenants often post a security deposit as collateral. Total operating sublease income was approximately $20.7 million, $11.8 million and $8.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. Sublease income is included in other revenues, net in the consolidated statements of operations.
As of December 31, 2021, the future minimum cash payments to be received under these operating subleases that have initial or remaining non-cancelable terms in excess of one year were as follows:
The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef