Certain enforceable vessel charters and pipeline capacity agreements are classified as finance leases, and the right-of-use assets are included in property and equipment. Lease obligations are recognized based on the rate implicit in the lease or the Company’s incremental borrowing rate at lease commencement.

As of December 31, 2022, the Company was a lessee in finance lease arrangements on one pipeline capacity agreement and one tugboat. These arrangements were determined to be finance leases due to their terms representing the majority of the economic lives of the assets.

In connection with the IPO, EELP purchased two vessels previously leased and accounted for as related party finance leases. In 2018, EELP entered into an agreement with a customer to lease the Excellence vessel with the vessel transferring ownership to the customer at the conclusion of the agreement for no additional consideration. EELP, as a lessor, accounts for the Excellence vessel contract with our customer as a sales-type lease in the consolidated balance sheet in accordance with ASC 842. For more information regarding the purchase of the vessels, see Note 8 – Property and equipment.

Finance lease liabilities as of December 31, 2022 and December 31, 2021 consisted of the following (in thousands):


	December 31, 2022			December 31, 2021
External leases:
Finance lease liabilities	$	231,158		$	251,658
Less current portion of finance lease liabilities		(20,804	)		(21,903	)
Finance lease liabilities, long-term	$	210,354		$	229,755

Related party leases:
Finance lease liabilities	$	—		$	226,619
Less current portion of finance lease liabilities		—			(15,627	)
Finance lease liabilities, long-term	$	—		$	210,992

As of December 31, 2022, the Company was a lessee in a bareboat charter contract and a terminal use lease, accounted for as operating leases. Pursuant to a bareboat charter, the vessel owner provides the use of the vessel to the Company in exchange for a fixed charter hire rate. However, the Company is responsible for the operation and maintenance of the vessel with its own crew, fuel costs, and other related expenses. As such, the bareboat charter includes a lease component only for the lessee to control the use of the vessel and does not contain non-lease components.

Additionally, the Company has operating leases for offices in various locations in which operations are performed. Such leases will often include options to extend the lease and the Company will include option periods that, on commencement date, it is reasonably certain the Company will exercise. Variable lease costs relate to certain lease agreements, which include payments that vary for items such as inflation adjustments, or common area charges. Variable lease costs that are not dependent on an index are excluded from the lease payments that comprise the operating lease liability and are expensed in the period in which they are incurred. None of the Company's operating leases contain any residual value guarantees.

A maturity analysis of the Company’s operating and finance lease liabilities (excluding short-term leases) at December 31, 2022 is as follows (in thousands):


Year	Operating			Finance
2023	$	37,562		$	33,235
2024		29,275			33,248
2025		18,538			33,235
2026		940			33,235
2027		913			33,235
Thereafter		1,334			141,120
Total lease payments	$	88,562		$	307,308
Less: imputed interest		(6,577	)		(76,150	)
Carrying value of lease liabilities		81,985			231,158
Less: current portion		(33,612	)		(20,804	)
Carrying value of long-term lease liabilities	$	48,373		$	210,354

As of December 31, 2022, the Company’s weighted average remaining lease term for operating and finance leases was 2.6 years and 10.1 years, respectively, with a weighted average discount rate of 5.9% and 6.3%, respectively. As of December 31, 2021, the Company’s weighted average remaining lease term for operating and finance leases was 3.4 years and 12.1 years, respectively, with a weighted average discount rate of 5.8% and 9.8%, respectively.

The Company's total lease costs for the years ended December 31, 2022, 2021 and 2020 recognized in the consolidated statements of income consisted of the following (in thousands):


	For the years ended December 31,
	2022		2021		2020
Amortization of finance lease right-of-use assets – related party	$	1,226	$	4,906	$	4,906
Amortization of finance lease right-of-use assets – external		2,609		13,345		13,345
Interest on finance lease liabilities – related party		7,930		29,080		30,619
Interest on finance lease liabilities – external		15,172		17,231		19,370
Operating lease expense		37,825		29,489		16,919
Short-term lease expense		1,164		746		681
Total lease costs	$	65,926	$	94,797	$	85,840

Other information related to leases for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):


	For the years ended December 31,
	2022		2021		2020
Operating cash flows for finance leases	$	15,172	$	17,231	$	19,370
Operating cash flows for finance leases – related party		7,930		29,080		30,619
Financing cash flow for finance leases		20,499		36,262		34,143
Financing cash flow for finance leases – related party		2,912		15,427		14,558
Operating cash flows for operating leases		36,841		29,100		16,481
Right-of-use assets obtained in exchange for new operating lease liabilities		3,567		15,248		121,575