8. Leases

Lessee Accounting

The Company has both operating and finance leases for ground, building, office and air leases, maturing in dates ranging from 2028 through 2097, including expected renewal options. Including all renewal options available to the Company, the lease maturity date extends to 2147. Leases were included on the Company’s consolidated balance sheet as follows (in thousands):


	March 31,
	2019
	(unaudited)
Finance Leases:
Right-of-use assets, net (land)	$	6,605
Right-of-use assets, net (buildings and improvements)		58,799
Accumulated amortization		(10,045)
Right-of-use assets, net	$	55,359

Accounts payable and accrued expenses	$	1
Lease obligations, less current portion		27,064
Total lease obligations	$	27,065


Operating Leases:
Right-of-use assets, net	$	63,235

Accounts payable and accrued expenses	$	4,528
Lease obligations, less current portion		53,276
Total lease obligations	$	57,804


Weighted Average Remaining Lease Term:
Finance leases		53.2 years
Operating leases		24.5 years


Weighted Average Discount Rate:
Finance leases		9.5	%
Operating leases		5.3	%

The components of lease expense were as follows (in thousands):


	Three Months Ended
	March 31, 2019
	(unaudited)
Finance lease cost:
Amortization of right-of-use assets	$	368
Interest on lease obligations		644
Total finance lease cost	$	1,012

Operating lease cost (1)	$	3,149

(1)

Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. During the three months ended March 31, 2019, the Company recorded $1.4 million in percentage rent related to its operating leases.

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended
	March 31, 2019
	(unaudited)
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from operating leases	$	1,632
Operating cash flows from finance leases	$	—
Finance cash flows from finance leases	$	—

Right-of-use assets obtained in exchange for lease obligations upon adoption of ASU No. 2016-02:
Operating leases	$	45,677
Finance leases	$	—

Future maturities of the Company’s operating and finance lease obligations at March 31, 2019 were as follows (in thousands):


	Operating Leases		Finance Leases
	(unaudited)		(unaudited)
2019	$	7,480	$	2,357
2020		7,532		2,357
2021		7,583		2,413
2022		7,635		2,453
2023		7,689		2,453
Thereafter		79,789		135,607
Total lease payments		117,708		147,640
Less: interest (1)		(59,904)		(120,575)
Present value of lease obligations	$	57,804	$	27,065

(1)

Calculated using the appropriate discount rate for each lease.

Lessor Accounting

During the three months ended March 31, 2019, the Company recognized $2.6 million in lease-related revenue, which is included in other operating revenue on the Company’s unaudited statement of operations.