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Leases | 3 Months Ended
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Mar. 31, 2019
Leases [Abstract] |
Leases | Leases On January 1, 2019, we adopted ASC 842 on a modified retrospective basis. We elected the practical expedients which allowed us to apply the new guidance at its effective date on January 1, 2019 without adjusting the comparative prior period financial statements. The package of practical expedients also allowed us to carry forward the historical lease classification. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases with an initial term of twelve months or less (“short-term leases”) on the balance sheet across all existing asset classes. The adoption of this standard has resulted in the recognition of ROU assets and lease liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $60.6 million as well as a corresponding ROU asset of $82.5 million, which includes, among other things, the reclassified intangible assets of $22.3 million. The standard did not have a material impact on our condensed consolidated statements of operations and statements of cash flows. The majority of our leases are operating ground leases. We also have operating equipment leases, such as copier and vehicle leases, at our hotel properties. Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 50 years. The exercise of lease renewal options is at our sole discretion. Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities. We have no finance leases as of March 31, 2019. As of March 31, 2019, our leased assets and liabilities consisted of the following (in thousands):
| March 31, 2019
Assets |
Operating lease right-of-use assets | $ | 82,308 |
Liabilities |
Operating lease liabilities | $ | 60,617 |
We incurred the following lease costs related to our operating leases (in thousands):
|  | Classification |  | Three Months Ended March 31, 2019
Operating lease cost (1) (2) |  | Hotel operating expenses - other |  | $ | 1,383 |
_______________________________________ (1) Includes variable lease costs associated with the ground leases and short-term leases, which are immaterial. (2) Includes approximately $323,000 of variable lease cost and $119,000 of amortization costs related to the intangible assets that was reclassified upon adoption of ASC 842. Other information related to leases is as follows:
| Three Months Ended March 31, 2019
Supplemental Cash Flows Information |
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows from operating leases (in thousands) | $ | 782 |
Weighted Average Remaining Lease Term |
Operating leases (1) | 48 years |
Weighted Average Discount Rate |
Operating leases (1) | 4.96 | %
_______________________________________ (1) Calculated using the lease term, excluding extension options, and discount rates of the ground leases. Future minimum lease payments due under non-cancellable leases as of March 31, 2019 were as follows (in thousands):
|  | Operating Leases
2019 |  | $ | 2,346 |
2020 |  | 3,140 |
2021 |  | 3,152 |
2022 |  | 3,164 |
2023 |  | 3,176 |
Thereafter |  | 150,980 |
Total future minimum lease payments |  | 165,958 |
Less: interest |  | (105,341 | )
Present value of lease liabilities |  | $ | 60,617 |
Future minimum lease payments due under non-cancellable leases under ASC 840 as of December 31, 2018 were as follows (in thousands):
2019 |  | $ | 3,161 |
2020 |  | 3,156 |
2021 |  | 3,152 |
2022 |  | 3,164 |
2023 |  | 3,177 |
Thereafter |  | 151,244 |
Total |  | $ | 167,054 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating 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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