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Note 10 - Leases

12 Months Ended

Dec. 31, 2022

NOTE 10. LEASES

We have operating and finance leases primarily for four casino hotel properties, corporate offices, parking ramps, gaming and other equipment. Our leases have remaining lease terms of one year to 54 years, some of which include options to extend the leases for up to 63 years, and some of which include options to terminate the leases within one year. Certain of our lease agreements, including the Master Leases, include provisions for variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time. Such variable lease payments are expensed in the period in which the obligation for these payments is incurred. Variable lease expense recognized in the years ended December 31, 2022 and 2021 was $22.4 million and $20.1 million, respectively.

As part of our annual 2021 impairment test, the Company recorded impairment charges of $5.8 million for operating lease right-of-use assets related to our Las Vegas Locals segment.

The components of lease expense were as follows:

	*Year Ended December 31,*
*(In thousands)*	*2022*			*2021*
Operating lease cost	$	153,961		$	125,693
Short-term lease cost		(685	)		(1,667	)

Supplemental cash flow information related to leases was as follows:

	*Year Ended December 31,*
*(In thousands)*	*2022*		*2021*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	155,085	$	129,053

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		32,080		55,673

Supplemental balance sheet information related to leases was as follows:

	*December 31,*
*(In thousands, except lease term and discount rate)*	*2022*			*2021*
Operating Leases
Operating lease right-of-use assets, including favorable lease rates asset	$	830,345		$	884,241

Current lease liabilities (included in accrued liabilities)	$	88,776		$	84,884
Operating lease liabilities		758,440			815,974
Total operating lease liabilities	$	847,216		$	900,858

Weighted Average Remaining Lease Term
Operating leases (in years)		15.5			16.1

Weighted Average Discount Rate
Operating leases		8.7	%		8.6	%

Maturities of lease liabilities are as follows:

*(In thousands)*	*Operating Leases*
For the period ending December 31,
2023	$	152,487
2024		152,398
2025		120,710
2026		120,833
2027		119,928
Thereafter		910,315
Total lease payments		1,576,671
Less imputed interest		(729,455	)
Less current portion (included in accrued liabilities)		(88,776	)
Long-term portion of operating lease liabilities	$	758,440

Future minimum rental income, which is primarily related to retail and restaurant facilities located within our properties, is as follows:

*(In thousands)*	*Minimum Rental Income*
*For the Year Ended December 31,*
2023	$	3,260
2024		2,417
2025		1,018
2026		338
2027		245
Thereafter		930
Total	$	8,208