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Leases
 3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Leases Leases
Time charter-in contracts

The Company has time charter-in contracts for Ultramax vessels which are greater than 12 months as of the lease commencement date. A description of each of these contracts is below:

(i) The Company entered into an agreement effective April 28, 2017, to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years with options for two additional years. The hire rate for the first four years is $12,800 per day and the hire rate for the first optional year is $13,800 per day and $14,300 per day for the second optional year. In addition, the Company’s fair value below contract value of time charters acquired of $1.8 million as of December 31, 2018, which related to the unamortized value of a prior charter with the same counterparty that had been recorded at the time of the Company’s emergence from bankruptcy, was offset against the corresponding right of use asset on this lease as of January 1, 2019. On July 8, 2021, the Company exercised its option to extend the charter for another year at a hire rate of $13,800 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $5.0 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 8, 2021 was 1.36%.
    (ii) On May 4, 2018, the Company entered into an agreement to charter-in a 61,425 dwt 2013 built Ultramax vessel for three years with an option for an additional two years. The hire rate for the first three years is $12,700 per day and $13,750 per day for the first year option and $14,750 per day for the second year option. The Company took delivery of the vessel in the third quarter of 2018. During the second quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party. Additionally, on June 28, 2021, the Company exercised its option to extend the charter for another year until October 19, 2022 at a hire rate of $13,750 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $5.8 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as
of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of June 28, 2021 was 1.34%.
(iii) On December 9, 2018, the Company entered into an agreement to charter-in a 62,487 dwt 2016 built Ultramax vessel for two years. The hire rate for the vessel until March 2020 was $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. On December 25, 2019, the Company renegotiated the lease terms for another year at a hire rate of $11,600 per day. The Company accounted for this as a lease modification on December 25, 2019 and increased its lease liability and right-of-use asset on its consolidated balance sheet as of December 31, 2019 by $4.5 million. During the first quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party. Therefore, the lease liability and the corresponding right-of-use asset as of March 31, 2021 have been increased by $1.0 million to reflect the change in lease term from minimum redelivery date to maximum redelivery date allowed under the charter party. On May 4, 2021, the Company exercised its option to extend the charter for another year until July 31, 2022 at a hire rate of $12,600 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $4.3 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 4, 2021 was 1.38%. On March 17, 2022, the Company has further extended the lease to a minimum period of ten months and maximum period of twelve months with an option to further extension of minimum ten months and twelve months period. The Company has increased the lease liability and the corresponding right-of-use asset by $6.9 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of March 31, 2022. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of March 17, 2022 was 4.48%.
(iv) On December 22, 2020, the Company entered into an agreement to charter-in a 63,634 dwt 2021 built Ultramax vessel for twelve months with an option for an additional three months at a hire rate of $5,900 per day plus 57% of the Baltic Supramax Index ("BSI") 58 average of 10 time charter routes as published by the Baltic Exchange each business day. Additionally, following the initial fifteen month period the Company has an additional option to extend for a period of eleven to thirteen months at an increased rate of $6,500 per day with no change in the rest of the terms. Also, the Company shall share the scrubber benefit with the owners 50% calculated as the price differential between the high sulfur and low sulfur fuel oil based on actual bunker consumption during the lease period. On July 7, 2021, the Company took delivery of the vessel and recorded $9.1 million as lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 7, 2021 was 1.33%.
(v) On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the fixed hire rate decreases to $10,750 per day with no change to the remaining terms. The vessel is expected to be delivered to the Company in the second quarter of 2022. No right-of-use asset or corresponding liability has been recognized in the Condensed Consolidated Balance Sheet as of March 31, 2022 since the Company did not take delivery of the vessel and as such lease term has not begun yet.
Office leases
On October 15, 2015, the Company entered into a commercial lease agreement as a sublessee for office space in Stamford, Connecticut. The lease is effective from January 2016 through June 2023, with an average annual rent of $0.4 million. The lease is secured by cash collateral of $0.1 million which is recorded as Restricted cash - noncurrent in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

In November 2018, the Company entered into an office lease agreement in Singapore, which was initially set to expire in October 2021, with an average annual rent of $0.3 million. On August 17, 2021, the Company renewed the lease on the existing office space for an additional 5 years with an average annual rent of $0.4 million. The Company increased the lease liability and the corresponding right-of-use asset by $1.3 million in its Condensed Consolidated Balance Sheet as of December 31, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of August 17, 2021 was 3.09%. Additionally, the Company entered into a new lease agreement for an additional office space in Singapore for 4.9 years beginning in the second quarter of 2022 with an average annual rent of $0.2 million. On February 15, 2022, the Company took possession of the additional office space. The Company has recognized $0.5 million of lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of March 31, 2022. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the
Company's implied credit rating and the yield curve for debt as of February 15, 2022 was 5.7%.
The Company determined the three office leases to be operating leases and recorded the lease expense as part of General and administrative expenses in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.
Operating lease right-of-use assets and lease liabilities as of March 31, 2022 and December 31, 2021 are as follows:


DescriptionLocation in Balance Sheet
March 31, 2022 (1)
December 31, 2021 (1)
Noncurrent assets:(In thousands)
Chartered-in contracts greater than 12 months Operating lease right-of-use assets $16,377 $15,039 
Office leasesOperating lease right-of-use assets 2,277 1,978 
Operating lease right-of-use assets $18,654 $17,017 
Liabilities:
Chartered-in contracts greater than 12 monthsCurrent portion of operating lease liabilities$14,966 $15,039 
Office leasesCurrent portion of operating lease liabilities783 689 
Lease liabilities - current portion$15,749 $15,728 
Chartered-in contracts greater than 12 monthsNoncurrent portion of operating lease liabilities $1,412 $— 
Office leasesNoncurrent portion of operating lease liabilities $1,487 $1,282 
Lease liabilities - noncurrent portion$2,899 $1,282 

(1) The Operating lease right-of-use assets and Operating lease liabilities represent the present value of lease payments for the remaining term of the lease. The discount rate used ranged from 1.33% to 6.08%. The weighted average discount rate used to calculate the lease liability was 2.88%.
The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three months ended March 31, 2022 and 2021:

(In thousands)Three Months Ended
DescriptionLocation in Statement of OperationsMarch 31, 2022March 31, 2021
Lease expense for chartered-in contracts less than 12 monthsCharter hire expenses$17,139 $5,487 
Lease expense for chartered-in contracts greater than 12 monthsCharter hire expenses5,572 2,993 
Total charter hire expenses$22,711 $8,480 
Lease expense for office leasesGeneral and administrative expenses$197 $184 
Sublease income from chartered-in contracts greater than 12 months *Revenues, net $8,327 $1,146 

* The sublease income represents only time charter revenue earned on the chartered-in contracts with terms more than 12 months. There is additional revenue earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in our Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.

The cash paid for operating leases with terms greater than 12 months is $5.8 million and $3.4 million for the three months ended March 31, 2022 and 2021, respectively.

On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the fixed hire rate decreases to $10,750 per day with no change to the remaining terms. The vessel is expected to be delivered to the Company in the second quarter of 2022.

The weighted average remaining lease term on our operating lease contracts greater than 12 months is 12.40 months.
The table below provides the total amount of remaining lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of March 31, 2022:

Supplemental Disclosure InformationChartered-in contracts greater than 12 monthsOffice leases Total Operating leases
(In thousands, except percentages)
Year:
Nine months ending December 31, 2022$13,042 $645 $13,687 
20233,472 617 4,089 
2024— 373 373 
2025— 372 372 
2026— 372 372 
2027— 74 74 
$16,514 $2,453 $18,967 
Present value of lease liability:
Lease liabilities - short term$14,966 $783 $15,749 
Lease liabilities - long term1,412 1,487 2,899 
Total lease liabilities$16,378 $2,270 $18,648 
Discount based on incremental borrowing rate$136 $183 $319