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Leases
 12 Months Ended
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 14 — 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)Classification20202019
Operating lease cost
Operating lease costOperating and SG&A expenses$46,082 $46,515 
Variable lease costOperating and SG&A expenses12,095 17,184 
Short-term lease costOperating and SG&A expenses4,964 6,617 
Total operating lease cost$63,141 $70,316 
Finance lease cost
Amortization of leased assetsDepreciation and amortization$2,376 $2,389 
Interest on lease liabilitiesInterest expense, net627 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)20202019
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 leases491 429 
Financing cash flows from finance leases2,588 2,485 
Supplemental balance sheet information related to leases was as follows:
December 31,
(In thousands)20202019
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 leases160,248 184,301 
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 leases5,675 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,
20202019
Weighted Average Remaining Lease Term
Operating leases8.6 years8.9 years
Finance leases7.0 years7.0 years
Weighted Average Discount Rate
Operating leases6.0 %6.0 %
Finance leases6.5 %6.5 %
Maturities of Lease Liabilities
As of December 31, 2020, maturities of lease liabilities were as follows:
(In thousands)Operating LeasesFinance LeasesTotal
2021$45,456 $3,978 $49,434 
202239,346 3,301 42,647 
202333,627 801 34,428 
202432,416 338 32,754 
202516,922 306 17,228 
Thereafter90,230 3,628 93,858 
Total lease payments257,997 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)202020192018
Minimum rental income$3,913 $7,479 $6,117 
Contingent rental income1,840 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 
20223,040 
20232,371 
20241,433 
20251,431 
Thereafter1,489 
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 14 — 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)Classification20202019
Operating lease cost
Operating lease costOperating and SG&A expenses$46,082 $46,515 
Variable lease costOperating and SG&A expenses12,095 17,184 
Short-term lease costOperating and SG&A expenses4,964 6,617 
Total operating lease cost$63,141 $70,316 
Finance lease cost
Amortization of leased assetsDepreciation and amortization$2,376 $2,389 
Interest on lease liabilitiesInterest expense, net627 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)20202019
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 leases491 429 
Financing cash flows from finance leases2,588 2,485 
Supplemental balance sheet information related to leases was as follows:
December 31,
(In thousands)20202019
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 leases160,248 184,301 
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 leases5,675 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,
20202019
Weighted Average Remaining Lease Term
Operating leases8.6 years8.9 years
Finance leases7.0 years7.0 years
Weighted Average Discount Rate
Operating leases6.0 %6.0 %
Finance leases6.5 %6.5 %
Maturities of Lease Liabilities
As of December 31, 2020, maturities of lease liabilities were as follows:
(In thousands)Operating LeasesFinance LeasesTotal
2021$45,456 $3,978 $49,434 
202239,346 3,301 42,647 
202333,627 801 34,428 
202432,416 338 32,754 
202516,922 306 17,228 
Thereafter90,230 3,628 93,858 
Total lease payments257,997 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)202020192018
Minimum rental income$3,913 $7,479 $6,117 
Contingent rental income1,840 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 
20223,040 
20232,371 
20241,433 
20251,431 
Thereafter1,489 
Total future minimum rent payments$13,262