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Leases | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
Leases | NOTE 7 – LEAS ES In all leases, whether we are the lessor or lessee, we define lease term as the non-cancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of economic factors relevant to the lessee. The non-cancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract. As Lessee We have operating leases for certain cinemas and corporate offices, and finance leases for certain equipment assets. Our leases have remaining lease terms of 1 to 20 years, with certain leases having options to extend to up to a further 45 years. Contracts are analyzed in accordance with the criteria set out in ASC 842 to determine if there is a lease present. For contracts that contain an operating lease, we account for the lease component and the non-lease component together as a single component. For contracts that contain a finance lease we account for the lease component and the non-lease component separately in accordance with ASC 842. In leases where we are the lessee, we recognize a right of use asset and lease liability at lease commencement, which is measured by discounting lease payments using an incremental borrowing rate applicable to the relevant country and term of the lease as the discount rate. Subsequent amortization of the right of use asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the term of the lease. Lease term includes option periods where we determine that we are reasonably certain to be exercising those options. A finance lease right-of-use asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or the lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. Property taxes and other non-lease costs are accounted for on an accrual basis. Lease payments for our cinema operating leases consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics. As a result of the impacts of COVID-19, we have obtained certain concessions from our landlords. We have elected to account for these concessions as if there have been no changes to the underlying contracts, thereby recognizing abatements secured as variable lease expenses, and increasing payables for lease payment deferrals. The components of lease expense are as follows:
|  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Lease cost |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |
Amortization of right-of-use assets |  | $ | 38 |  | $ | 49
Interest on lease liabilities |  |  | 2 |  |  | 5
Operating lease cost |  |  | 33,422 |  |  | 33,782
Variable lease cost |  |  | 619 |  |  | (7,068)
Total lease cost |  | $ | 34,081 |  | $ | 26,768
‎ Supplemental cash flow information related to leases is as follows:
|  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Cash flows relating to lease cost |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows for finance leases |  | $ | 42 |  | $ | 53
Operating cash flows for operating leases |  |  | 34,685 |  |  | 26,057
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 6,710 |  | $ | 39,090
Supplemental balance sheet information related to leases is as follows:
|  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Operating leases |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | 200,417 |  | $ | 227,367
Operating lease liabilities - current portion |  |  | 23,971 |  |  | 23,737
Operating lease liabilities - non-current portion |  |  | 200,037 |  |  | 223,364
Total operating lease liabilities |  | $ | 224,008 |  | $ | 247,101
Finance leases |  |  |  |  |  | —
Property plant and equipment, gross |  | $ | 363 |  | $ | 374
Accumulated depreciation |  |  | (338) |  |  | (311)
Property plant and equipment, net |  | $ | 25 |  | $ | 63
Other current liabilities |  |  | 28 |  |  | 40
Other long-term liabilities |  |  | — |  |  | 28
Total finance lease liabilities |  | $ | 28 |  | $ | 68
Other information |  |  |  |  |  |
Weighted-average remaining lease term - finance leases |  |  | 1 |  |  | 2
Weighted-average remaining lease term - operating leases |  |  | 11 |  |  | 11
Weighted-average discount rate - finance leases |  |  | 5.21% |  |  | 5.24%
Weighted-average discount rate - operating leases |  |  | 4.55% |  |  | 4.47%
The Maturities of our leases were as follows:
(Dollars in thousands) |  | Operating ‎leases |  | Finance ‎leases
2023 |  | $ | 33,690 |  | $ | 29
2024 |  |  | 32,307 |  |  | —
2025 |  |  | 30,334 |  |  | —
2026 |  |  | 28,372 |  |  | —
2027 |  |  | 26,020 |  |  | —
Thereafter |  |  | 137,553 |  |  | —
Total lease payments |  | $ | 288,276 |  | $ | 29
Less imputed interest |  |  | (64,268) |  |  | (1)
Total |  | $ | 224,008 |  | $ | 28
As of December 31, 2022, we have additional operating leases, primarily for cinemas, that have not yet commenced of approximately $7.2 million. It is anticipated that these operating leases will commence in 2023 with lease terms of 15 to 20 years. As Lessor We have entered into various leases as a lessor for our owned real estate properties. These leases vary in length between 1 and 20 years, with certain leases containing options to extend at the behest of the applicable tenants. Lease components consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics. None of our leases grant any right to the tenant to purchase the underlying asset. We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. As a result of the impacts of COVID-19, we have provided certain concessions to specific tenants. We have elected to account for these concessions as if there have been no changes to the underlying contracts, thereby recognizing abatements granted as variable lease payments through revenue and increasing receivables for lease payment deferrals. Lease income relating to operating lease payments was as follows:
|  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Components of lease income |  |  |  |  |  |
Lease payments |  | $ | 8,076 |  | $ | 9,679
Variable lease payments |  |  | 737 |  |  | 655
Total lease income |  | $ | 8,813 |  | $ | 10,334
The book value of underlying assets under operating leases from owned assets was as follows:
|  | December 31, |  | December 31,
(Dollars in thousands) |  | 2022 |  | 2021
Building and improvements |  |  |  |  |  |
Gross balance |  | $ | 136,749 |  | $ | 140,028
Accumulated depreciation |  |  | (26,148) |  |  | (23,923)
Net Book Value |  | $ | 110,601 |  | $ | 116,105
The Maturity of our leases were as follows:
(Dollars in thousands) |  |  |  |  | Operating ‎leases
2023 |  |  |  |  | $ | 9,773
2024 |  |  |  |  |  | 9,321
2025 |  |  |  |  |  | 8,867
2026 |  |  |  |  |  | 7,232
2027 |  |  |  |  |  | 6,003
Thereafter |  |  |  |  |  | 26,263
Total |  |  |  |  | $ | 67,459

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