The Company leases land, warehouse and office space, and equipment, which are classified as either operating or finance leases. The Company’s most significant lease is a long-term land lease with the City of San Diego covering approximately 190 acres, including approximately 17 acres of water in Mission Bay Park, California (the “Premises”). While there are no financial restrictions or covenants imposed by the Premises lease, there are certain operational restrictions in that the Premises must be used as a marine park facility, and the Company may not operate another marine park facility within 560 miles of the City of San Diego.

The lease term for the Premises ends in June 2048 and the annual rent under the lease is variable and calculated on the basis of a specified percentage of the Company’s gross income from the Premises (the “Percentage Rent”), or the minimum yearly rent (the “Minimum Rent”), whichever is greater. Portions of the Percentage Rent are subject to adjustment every 10 years.

The required annual rent payments for the Premises are adjusted every three years to an amount equal to 80% of the average accounting year rent actually paid for the three previous years, with the annual minimum rent calculated as approximately $10.4 million through each of the years ended December 31, 2025, 2024 and 2023. The current minimum yearly rent effective January 1, 2026 is approximately $10.7 million and is next subject to adjustment on January 1, 2029.

The annual rent payments may vary from the base rent due to a shift of seasonal performance results. Rent payments related to the Premises for the years ended December 31, 2025, 2024 and 2023 were approximately $13.3 million (including approximately $1.1 million remitted in 2025 related to 2024), $13.6 million (including approximately $1.2 million remitted in 2024 related to 2023) and $13.3 million (including approximately $1.2 million remitted in 2023 related to 2022), respectively. The Company’s gross income from the Premises was significantly impacted during the year ended December 31, 2020 due to the temporary park closures, limited reopenings, modified operations and capacity restrictions resulting from the impact of the COVID-19 pandemic and related government restrictions in San Diego. Due to these factors, the Company deferred a payment of $8.3 million related to the Minimum Rent for the year ended December 31, 2020 (the “2020 Minimum Rent Payment”). During the fourth quarter of 2024, the Company reached a settlement with the City of San Diego and agreed to pay $8.5 million related to the 2020 Minimum Rent Payment. The settlement amount was included in accounts payable and accrued expenses as of December 31, 2024 and was subsequently funded in the first quarter of 2025.

The tables below present the lease balances and their classification in the accompanying consolidated balance sheets as of December 31, 2025 and 2024:


		December 31,		December 31,
	Classification	2025		2024
Assets:		(In thousands)
Operating leases	Right of use assets - operating	$	125,410	$	129,875
Finance leases	Other assets, net		5,496		4,763
Total lease assets		$	130,906	$	134,638
Liabilities:
Current
Operating leases	Operating lease liabilities	$	4,216	$	4,079
Finance leases	Other accrued liabilities		1,012		1,481
Noncurrent
Operating leases	Long-term operating lease liabilities		110,926		115,117
Finance leases	Other liabilities		4,581		3,332
Total lease liabilities		$	120,735	$	124,009

The table below presents the lease costs and their classification in the accompanying consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023:



	Classification	2025		2024		2023
		(In thousands)
Operating lease cost	Operating expenses	$	13,751	$	13,738	$	13,513
Operating lease cost	Selling, general and administrative expenses		172		87		82
Finance lease cost
Amortization of leased assets	Depreciation and amortization		1,530		1,326		764
Interest on lease liabilities	Interest expense		196		206		155
Net lease cost		$	15,649	$	15,357	$	14,514

In addition to the operating lease costs above, short-term rent expense for the years ended December 31, 2025, 2024 and 2023 were approximately $6.2 million, $7.0 million and $8.6 million, respectively, and variable rent expense for the years ended December 31, 2025, 2024 and 2023 were $6.1 million, $6.0 million and $6.2 million, respectively. The short-term and variable rent expense amounts are included primarily in operating expenses in the accompanying consolidated statements of operations.

The table below presents the Company’s lease maturities as of December 31, 2025:


	Operating leases
Years Ending December 31,	Land lease			Other operating leases			Total operating leases			Finance leases
	(In thousands)
2026	$	10,401		$	2,943		$	13,344		$	1,258
2027		10,401			1,509			11,910			1,211
2028		10,401			983			11,384			1,209
2029		10,401			939			11,340			1,084
2030		10,401			823			11,224			249
Thereafter		182,024			2,376			184,401			1,405
Total lease payments		234,029			9,573			243,603			6,416
Less: Imputed interest		(126,692	)		(1,767	)		(128,461	)		(823	)
Lease liabilities	$	107,337		$	7,806		$	115,142		$	5,593

The table below presents the weighted average remaining lease terms and applicable discount rates as of December 31, 2025 and 2024:



	2025			2024
Weighted average remaining lease term (years):
Operating leases		21.37			21.99
Finance leases		6.97			7.65
Weighted average discount rate:
Operating leases		8.16	%		8.14	%
Finance leases		4.91	%		4.84	%

The table below presents the cash flows and supplemental information associated with the Company’s leasing activities for the years ended December 31, 2025, 2024 and 2023:



	2025		2024		2023
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13,512	$	13,230	$	13,172
Operating cash flows from finance leases	$	196	$	206	$	155
Financing cash flows from finance leases	$	1,484	$	1,234	$	927
Right of use assets obtained in exchange for lease liabilities:
Finance leases	$	2,263	$	1,553	$	2,923
Operating leases	$	29	$	6,728	$	1,017