Other Long-Term Financial Liabilities (Notes)
|12 Months Ended|
Dec. 31, 2020
|Other Long-Term Financial Liabilities [Abstract]|
|Other Long-Term Financial Liabilities||
8. OTHER LONG-TERM FINANCIAL LIABILITIES
During the year ended December 31, 2020, the Company sold and leased back three U.S.-flag harbor tugs for $33.7 million with original leaseback terms ranging from 72-84 months (see Note 3). Each of the sale-leaseback agreements provides the Company an option to purchase the applicable U.S.-flag harbor tug for a fixed price one year prior to the expiration of the original lease term.
As a result of the fixed price purchase options, in accordance with Topic 842 and Topic 606, the transactions resulted in "failed" sale-leasebacks as the purchasers do not obtain control of the assets at the end of the lease unless the purchase option is exercised. As a consequence, the Company has not derecognized the assets from its property and equipment and accumulated depreciation balances and will continue to depreciate the assets in accordance with its useful life and depreciation policies. The proceeds received from the sales are included in the accompanying consolidated balance sheets as other long-term financial liabilities. As the Company makes rental payments, a portion of each payment will reduce the balance of the other long-term financial liabilities and a portion will be recorded as interest expense at an imputed rate of 3.35%.
During the twelve months ended December 31, the amounts recognized in the accompanying consolidated statements of income related to these "failed" sale-leasebacks were as follows (in thousands):
As of December 31, 2020, the future minimum lease payments under these agreements for the years ended December 31, were as follows (in thousands):
As of December 31, 2020, depreciation expense to be recognized on these U.S.-flag harbor tugs through the end of the lease term for the years ended December 31, was as follows (in thousands):