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Leases | 12 Months Ended
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Dec. 31, 2020
Leases [Abstract] |
Leases | Leases Company as Lessee The Company is a lessee under non-cancelable operating and finance leases for offices, taverns, land, vehicles, slot machines and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slots at business locations, which are recorded in gaming expenses. The Company’s slot machine lease agreements with gaming equipment manufacturers are short-term in nature with majority of such leases being under variable rent structure, with amounts determined based on the performance of the leased machines. Certain other short-term slot machine lease agreements are under fixed fee payment structure. The leases, excluding land, have remaining lease terms of 1 year to 77 years, some of which include options to extend the leases for an additional 1 to 25 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days to 1 year notice. The Company assesses the options to extend or terminate the lease using a threshold of reasonably certain. For leases the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability. The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. Lease expense for arrangements with a fixed fee payment structure is recognized on a straight-line basis over the lease term. Lease expense for arrangements under a variable rent structure is recognized in the period in which the obligation for the payment is incurred. The Company leases approximately 4.5 acres of undeveloped land in Carson City. Upon the adoption of ASC 842, the Company wrote off the associated ROU asset for this land lease of $9.4 million with a charge to its beginning balance of retained earnings as of January 1, 2019. The Company is also lessee for several taverns and locations subject to space lease agreements that it does not plan to develop, operate, or sub-lease. The Company wrote off the associated ROU asset for these leases of $2.9 million with a charge to its beginning balance of retained earnings as of January 1, 2019. The Company leases its office headquarters building and the office space in a building adjacent to the Company’s office headquarters building from a related party. Refer to “Note 1 4 — Related Party Transactions” for more detail. The current and non-current obligations under finance leases are included in “Current portion of long-term debt and finance leases” and “Long-term debt, net and finance leases” in the Company’s consolidated balance sheets, respectively. The majority of the finance leases relate to equipment for the Company’s casinos. The components of lease expense were as follows:
|  |  | Year Ended December 31,
(In thousands) | Classification |  | 2020 |  | 2019
Operating lease cost |  |  |  |  |
Operating lease cost | Operating and SG&A expenses |  | $ | 46,082 |  |  | $ | 46,515 |
Variable lease cost | Operating and SG&A expenses |  | 12,095 |  |  | 17,184 |
Short-term lease cost | Operating and SG&A expenses |  | 4,964 |  |  | 6,617 |
Total operating lease cost |  |  | $ | 63,141 |  |  | $ | 70,316 |
Finance lease cost |  |  |  |  |
Amortization of leased assets | Depreciation and amortization |  | $ | 2,376 |  |  | $ | 2,389 |
Interest on lease liabilities | Interest expense, net |  | 627 |  |  | 439 |
Total finance lease cost |  |  | $ | 3,003 |  |  | $ | 2,828 |
The Company incurred $55.7 million in operating lease expense for the year ended December 31, 2018. The expense was calculated on a straight-line basis and not retrospectively adjusted by the Company upon adoption of ASC 842. Supplemental cash flow information related to leases was as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 44,774 |  |  | $ | 47,084 |
Operating cash flows from finance leases | 491 |  |  | 429 |
Financing cash flows from finance leases | 2,588 |  |  | 2,485 |
Supplemental balance sheet information related to leases was as follows:
| December 31,
(In thousands) | 2020 |  | 2019
Operating leases |  |  |
Operating lease right-of-use assets, gross | $ | 214,548 |  |  | $ | 226,884 |
Accumulated amortization | (33,995) |  |  | (23,353) |
Operating lease right-of-use assets, net | $ | 180,553 |  |  | $ | 203,531 |
Current portion of operating leases | $ | 35,725 |  |  | $ | 33,883 |
Non-current operating leases | 160,248 |  |  | 184,301 |
Total operating lease liabilities | $ | 195,973 |  |  | $ | 218,184 |
Finance leases |  |  |
Property and equipment, gross | $ | 16,404 |  |  | $ | 19,920 |
Accumulated depreciation | (3,807) |  |  | (3,787) |
Property and equipment, net | $ | 12,597 |  |  | $ | 16,133 |
Current portion of finance leases | $ | 3,507 |  |  | $ | 3,662 |
Non-current finance leases | 5,675 |  |  | 8,801 |
Total finance lease liabilities | $ | 9,182 |  |  | $ | 12,463 |
The following presents additional information related to the Company’s leases as of December 31, 2020:
| December 31,
| 2020 |  | 2019
Weighted Average Remaining Lease Term |  |  |
Operating leases | 8.6 years |  | 8.9 years
Finance leases | 7.0 years |  | 7.0 years
Weighted Average Discount Rate |  |  |
Operating leases | 6.0 | % |  | 6.0 | %
Finance leases | 6.5 | % |  | 6.5 | %
Maturities of Lease Liabilities As of December 31, 2020, maturities of lease liabilities were as follows:
(In thousands) | Operating Leases |  | Finance Leases |  | Total
2021 | $ | 45,456 |  |  | $ | 3,978 |  |  | $ | 49,434 |
2022 | 39,346 |  |  | 3,301 |  |  | 42,647 |
2023 | 33,627 |  |  | 801 |  |  | 34,428 |
2024 | 32,416 |  |  | 338 |  |  | 32,754 |
2025 | 16,922 |  |  | 306 |  |  | 17,228 |
Thereafter | 90,230 |  |  | 3,628 |  |  | 93,858 |
Total lease payments | 257,997 |  |  | 12,352 |  |  | 270,349 |
Amount of interest | (62,024) |  |  | (3,170) |  |  | (65,194) |
Present value of lease liabilities | $ | 195,973 |  |  | $ | 9,182 |  |  | $ | 205,155 |
As of December 31, 2020, the Company did not have any leases that have not yet commenced but that create significant rights and obligations. Company as Lessor The Company leases space to third-party tenants under non-cancelable operating leases primarily for retail and food and beverage outlets within its resort casino properties. Golden also enters into operating lease agreements with certain equipment providers for placement of amusement devices and automated teller machines within its resort casino properties and taverns. The leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for an additional 1 to 15 years. Lease payments from tenants generally include minimum base rent, adjusted for contractual escalations as applicable, and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. The Company records revenue on a straight-line basis over the term of the lease and recognizes revenue for contingent rentals when the contingency has been resolved. The Company combines lease and non-lease components for the purpose of measuring lease revenue, which is recorded in “Other revenue” in the Company’s consolidated statements of operations. Minimum and contingent operating lease income was as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Minimum rental income | $ | 3,913 |  |  | $ | 7,479 |  |  | $ | 6,117 |
Contingent rental income | 1,840 |  |  | 1,527 |  |  | 1,335 |
Total rental income | $ | 5,753 |  |  | $ | 9,006 |  |  | $ | 7,452 |
Future minimum rent payments to be received under operating leases are as follows (in thousands):
Year Ending December 31, | Amount
2021 | $ | 3,498 |
2022 | 3,040 |
2023 | 2,371 |
2024 | 1,433 |
2025 | 1,431 |
Thereafter | 1,489 |
Total future minimum rent payments | $ | 13,262 |
Leases | Leases Company as Lessee The Company is a lessee under non-cancelable operating and finance leases for offices, taverns, land, vehicles, slot machines and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slots at business locations, which are recorded in gaming expenses. The Company’s slot machine lease agreements with gaming equipment manufacturers are short-term in nature with majority of such leases being under variable rent structure, with amounts determined based on the performance of the leased machines. Certain other short-term slot machine lease agreements are under fixed fee payment structure. The leases, excluding land, have remaining lease terms of 1 year to 77 years, some of which include options to extend the leases for an additional 1 to 25 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days to 1 year notice. The Company assesses the options to extend or terminate the lease using a threshold of reasonably certain. For leases the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability. The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants. Lease expense for arrangements with a fixed fee payment structure is recognized on a straight-line basis over the lease term. Lease expense for arrangements under a variable rent structure is recognized in the period in which the obligation for the payment is incurred. The Company leases approximately 4.5 acres of undeveloped land in Carson City. Upon the adoption of ASC 842, the Company wrote off the associated ROU asset for this land lease of $9.4 million with a charge to its beginning balance of retained earnings as of January 1, 2019. The Company is also lessee for several taverns and locations subject to space lease agreements that it does not plan to develop, operate, or sub-lease. The Company wrote off the associated ROU asset for these leases of $2.9 million with a charge to its beginning balance of retained earnings as of January 1, 2019. The Company leases its office headquarters building and the office space in a building adjacent to the Company’s office headquarters building from a related party. Refer to “Note 1 4 — Related Party Transactions” for more detail. The current and non-current obligations under finance leases are included in “Current portion of long-term debt and finance leases” and “Long-term debt, net and finance leases” in the Company’s consolidated balance sheets, respectively. The majority of the finance leases relate to equipment for the Company’s casinos. The components of lease expense were as follows:
|  |  | Year Ended December 31,
(In thousands) | Classification |  | 2020 |  | 2019
Operating lease cost |  |  |  |  |
Operating lease cost | Operating and SG&A expenses |  | $ | 46,082 |  |  | $ | 46,515 |
Variable lease cost | Operating and SG&A expenses |  | 12,095 |  |  | 17,184 |
Short-term lease cost | Operating and SG&A expenses |  | 4,964 |  |  | 6,617 |
Total operating lease cost |  |  | $ | 63,141 |  |  | $ | 70,316 |
Finance lease cost |  |  |  |  |
Amortization of leased assets | Depreciation and amortization |  | $ | 2,376 |  |  | $ | 2,389 |
Interest on lease liabilities | Interest expense, net |  | 627 |  |  | 439 |
Total finance lease cost |  |  | $ | 3,003 |  |  | $ | 2,828 |
The Company incurred $55.7 million in operating lease expense for the year ended December 31, 2018. The expense was calculated on a straight-line basis and not retrospectively adjusted by the Company upon adoption of ASC 842. Supplemental cash flow information related to leases was as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 44,774 |  |  | $ | 47,084 |
Operating cash flows from finance leases | 491 |  |  | 429 |
Financing cash flows from finance leases | 2,588 |  |  | 2,485 |
Supplemental balance sheet information related to leases was as follows:
| December 31,
(In thousands) | 2020 |  | 2019
Operating leases |  |  |
Operating lease right-of-use assets, gross | $ | 214,548 |  |  | $ | 226,884 |
Accumulated amortization | (33,995) |  |  | (23,353) |
Operating lease right-of-use assets, net | $ | 180,553 |  |  | $ | 203,531 |
Current portion of operating leases | $ | 35,725 |  |  | $ | 33,883 |
Non-current operating leases | 160,248 |  |  | 184,301 |
Total operating lease liabilities | $ | 195,973 |  |  | $ | 218,184 |
Finance leases |  |  |
Property and equipment, gross | $ | 16,404 |  |  | $ | 19,920 |
Accumulated depreciation | (3,807) |  |  | (3,787) |
Property and equipment, net | $ | 12,597 |  |  | $ | 16,133 |
Current portion of finance leases | $ | 3,507 |  |  | $ | 3,662 |
Non-current finance leases | 5,675 |  |  | 8,801 |
Total finance lease liabilities | $ | 9,182 |  |  | $ | 12,463 |
The following presents additional information related to the Company’s leases as of December 31, 2020:
| December 31,
| 2020 |  | 2019
Weighted Average Remaining Lease Term |  |  |
Operating leases | 8.6 years |  | 8.9 years
Finance leases | 7.0 years |  | 7.0 years
Weighted Average Discount Rate |  |  |
Operating leases | 6.0 | % |  | 6.0 | %
Finance leases | 6.5 | % |  | 6.5 | %
Maturities of Lease Liabilities As of December 31, 2020, maturities of lease liabilities were as follows:
(In thousands) | Operating Leases |  | Finance Leases |  | Total
2021 | $ | 45,456 |  |  | $ | 3,978 |  |  | $ | 49,434 |
2022 | 39,346 |  |  | 3,301 |  |  | 42,647 |
2023 | 33,627 |  |  | 801 |  |  | 34,428 |
2024 | 32,416 |  |  | 338 |  |  | 32,754 |
2025 | 16,922 |  |  | 306 |  |  | 17,228 |
Thereafter | 90,230 |  |  | 3,628 |  |  | 93,858 |
Total lease payments | 257,997 |  |  | 12,352 |  |  | 270,349 |
Amount of interest | (62,024) |  |  | (3,170) |  |  | (65,194) |
Present value of lease liabilities | $ | 195,973 |  |  | $ | 9,182 |  |  | $ | 205,155 |
As of December 31, 2020, the Company did not have any leases that have not yet commenced but that create significant rights and obligations. Company as Lessor The Company leases space to third-party tenants under non-cancelable operating leases primarily for retail and food and beverage outlets within its resort casino properties. Golden also enters into operating lease agreements with certain equipment providers for placement of amusement devices and automated teller machines within its resort casino properties and taverns. The leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for an additional 1 to 15 years. Lease payments from tenants generally include minimum base rent, adjusted for contractual escalations as applicable, and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. The Company records revenue on a straight-line basis over the term of the lease and recognizes revenue for contingent rentals when the contingency has been resolved. The Company combines lease and non-lease components for the purpose of measuring lease revenue, which is recorded in “Other revenue” in the Company’s consolidated statements of operations. Minimum and contingent operating lease income was as follows:
| Year Ended December 31,
(In thousands) | 2020 |  | 2019 |  | 2018
Minimum rental income | $ | 3,913 |  |  | $ | 7,479 |  |  | $ | 6,117 |
Contingent rental income | 1,840 |  |  | 1,527 |  |  | 1,335 |
Total rental income | $ | 5,753 |  |  | $ | 9,006 |  |  | $ | 7,452 |
Future minimum rent payments to be received under operating leases are as follows (in thousands):
Year Ending December 31, | Amount
2021 | $ | 3,498 |
2022 | 3,040 |
2023 | 2,371 |
2024 | 1,433 |
2025 | 1,431 |
Thereafter | 1,489 |
Total future minimum rent payments | $ | 13,262 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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