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Leases | 9 Months Ended
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Sep. 30, 2020
Leases [Abstract] |
Leases | 13.LEASES In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The Company adopted ASU 2016-02 with a date of initial application of January 1, 2019. The Company applied ASU 2016-02 by recognizing (i) a $38.3 million right-of-use (“ROU”) asset which represents the right to use, or control the use of, specified assets for a lease term; and (ii) a $40.4 million lease liability for the obligation to make lease payments arising from the leases. The ROU asset is included in leased right-of-use assets, net, and the lease liability is included in current portion of operating lease liability and operating lease liability, net of current portion, on the Company’s condensed consolidated balance sheets. The Company used the alternative modified retrospective method, also known as the transition relief method, which did not require the restatement of prior periods and instead recognized a $0.3 million cumulative-effect adjustment to retained earnings upon transition. ‎ When adopting the leasing standard, the Company made the following policy elections: The Company elected the practical expedient to account for the lease and non-lease components as a single lease component for all asset classes; The Company elected the short-term lease measurement and recognition exemption and did not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less; The Company used its original assumptions for operating leases entered into prior to adoption, electing not to use the hindsight practical expedient; The Company elected to use the package of practical expedients for transition and did not reassess (i) whether expired or existing contracts were leases or contained leases, (ii) the classification of its existing leases, or (iii) initial direct costs for existing leases; and The Company elected not to evaluate existing or expired land easements under the leasing standard prior to the date of adoption. The Company determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate in each of the jurisdictions in which its subsidiaries operate to calculate the present value of lease payments. Lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise those options. Operating lease expense is recorded on a straight-line basis over the lease term. The Company accounts for lease agreements with lease and non-lease components as a single lease component for all asset classes. The Company does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. The Company’s operating and finance leases include land, casino space, corporate offices, and gaming and other equipment. The leases have remaining lease terms of one month to 20 years. The components of lease expense were as follows:
|  | For the three months ended |  | For the nine months ended
|  | September 30, |  | September 30,
Amounts in thousands |  | 2020 |  | 2019 |  | 2020 |  | 2019
Operating lease expense |  | $ | 1,484 |  | $ | 1,495 |  | $ | 4,134 |  | $ | 4,367
Finance lease expense: |  |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  | $ | 39 |  | $ | 142 |  | $ | 120 |  | $ | 203
Interest on lease liabilities |  |  | 3 |  |  | 20 |  |  | 11 |  |  | 31
Total finance lease expense |  | $ | 42 |  | $ | 162 |  | $ | 131 |  | $ | 234
Short-term lease expense |  | $ | 55 |  | $ | 132 |  | $ | 209 |  | $ | 679
Variable lease expense |  | $ | 543 |  | $ | 904 |  | $ | 1,112 |  | $ | 2,614
Variable lease expense relates primarily to rates based on a percentage of gaming revenue, changes in indexes that are excluded from the lease liability and fluctuations in foreign currency related to leases in Poland. Supplemental cash flow information related to leases was as follows:
|  | For the nine months
|  | ended September 30,
Amounts in thousands |  | 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from finance leases |  | $ | 3 |  | $ | 31
Operating cash flows from operating leases |  |  | 4,915 |  |  | 5,185
Financing cash flows from finance leases |  |  | 118 |  |  | 250
Supplemental balance sheet information related to leases was as follows:
|  | As of |  | As of
Amounts in thousands |  | September 30, 2020 |  | December 31, 2019
Operating leases |  |  |  |  |  |
Leased right-of-use assets, net |  | $ | 33,785 |  | $ | 37,040
Current portion of operating lease liabilities |  |  | 4,137 |  |  | 4,235
Operating lease liabilities, net of current portion |  |  | 31,991 |  |  | 42,942
Total operating lease liabilities |  |  | 36,128 |  |  | 47,177
Finance leases |  |  |  |  |  |
Finance lease right-of-use assets, gross |  |  | 566 |  |  | 731
Accumulated depreciation |  |  | (320) |  |  | (338)
Property and equipment, net |  |  | 246 |  |  | 393
Current portion of finance lease liabilities |  |  | 131 |  |  | 161
Finance lease liabilities, net of current portion |  |  | 110 |  |  | 217
Total finance lease liabilities |  |  | 241 |  |  | 378
Weighted-average remaining lease term |  |  |  |  |  |
Operating leases |  |  | 11.3 years |  |  | 14.4 years
Finance leases |  |  | 2.2 years |  |  | 2.7 years
Weighted-average discount rate |  |  |  |  |  |
Operating leases |  |  | 4.5% |  |  | 4.8%
Finance leases |  |  | 4.9% |  |  | 5.1%
Maturities of lease liabilities as of September 30, 2020 were as follows:
Amounts in thousands |  |  | Operating Leases |  | Finance Leases
2020 |  | $ | 1,361 |  | $ | 38
2021 |  |  | 5,466 |  |  | 131
2022 |  |  | 5,242 |  |  | 40
2023 |  |  | 4,589 |  |  | 25
2024 |  |  | 3,831 |  |  | 20
Thereafter |  |  | 27,957 |  |  | —
Total lease payments |  |  | 48,446 |  |  | 254
Less imputed interest |  |  | (12,318) |  |  | (13)
Total |  | $ | 36,128 |  | $ | 241
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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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