Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases

Schedule of supplemental balance sheet information related to leases

Leases were included on the Company’s consolidated balance sheet as follows (unaudited and in thousands):

	March 31,			December 31,
	2020			2019
Finance Lease:
Right-of-use asset, net (buildings and improvements)	$	58,799		$	58,799
Accumulated depreciation		(11,515)			(11,147)
Right-of-use asset, net	$	47,284		$	47,652
Accounts payable and accrued expenses	$	1		$	1
Lease obligation, less current portion		15,570			15,570
Total lease obligation	$	15,571		$	15,571
Remaining lease term		78 years
Discount rate		9.0	%
Operating Leases:
Right-of-use assets, net (1)	$	41,198		$	60,629
Accounts payable and accrued expenses	$	4,816		$	4,743
Lease obligations, less current portion		48,460			49,691
Total lease obligations	$	53,276		$	54,434
Weighted average remaining lease term		25 years
Weighted average discount rate		5.4	%

(1) During the first quarter of 2020, the Company wrote down its operating lease right-of-use assets, net and recorded an impairment loss of $18.5 million on the Hilton Times Square (see Note 4).

Lease costs

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

	Three Months Ended March 31,
	2020		2019
Finance lease cost:
Amortization of right-of-use asset	$	368	$	368
Interest on lease obligations		350		644
Total finance lease cost	$	718	$	1,012
Operating lease cost (1)	$	2,442	$	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, 2020 and 2019, the Company recorded $0.7 million and $1.4 million, respectively, in percentage rent related to its operating leases.

Schedule of supplemental cash flow information related to leases

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

	Three Months Ended March 31,
	2020		2019
Operating cash flows used for operating leases	$	1,875	$	1,632
Changes in operating lease right-of-use assets	$	897	$	841
Changes in operating lease obligations		(1,158)		(860)
Changes in operating lease right-of-use assets and lease obligations, net	$	(261)	$	(19)
Operating right-of-use assets obtained in exchange for operating lease obligations	$	—	$	45,677