LEASES

9 Months Ended

Sep. 30, 2022

The Company has operating leases related to the land under certain hotel properties, conference centers, parking spaces, automobiles, our corporate office and other miscellaneous office equipment. These leases have remaining terms of 1 year to 77 years, some of which include options to extend the leases for additional years. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Certain of our lease agreements include rental payments based on a percentage of revenue over contractual levels and others include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or restrictive covenants that materially affect our business. In addition, we lease certain owned real estate to third parties. We recorded gross third-party tenant income of $2.4 million and $0.5 million during the three months ended September 30, 2022 and 2021, respectively, and $6.9 million and $1.5 million for the nine months ended September 30, 2022 and 2021, respectively, which were recorded in Other income in the Condensed Consolidated Statement of Operations.

On January 1, 2019, the Company adopted ASC No. 842, Leases, and recognized right-of-use assets and related liabilities. The right-of-use assets and related liabilities include renewal options reasonably certain to be exercised. We base our lease calculations on our estimated incremental borrowing rate. As of September 30, 2022, our weighted average incremental borrowing rate was 4.79%.

During the three months ended September 30, 2022 and 2021, the Company's total operating lease cost was $1.0 million and $0.9 million, respectively, and the operating cash outflow from operating leases was $1.0 million and $0.8 million, respectively. During the nine months ended September 30, 2022 and 2021, the Company's total operating lease cost was $3.0 million and $2.4 million, respectively, and the operating cash outflow from operating leases was $2.8 million and $2.2 million, respectively. As of September 30, 2022, the weighted average operating lease term was 33.5 years.

Operating lease maturities as of September 30, 2022 are as follows (in thousands):


2022	$	549
2023	1,942
2024	1,904
2025	1,925
2026	1,959
Thereafter	39,997
Total lease payments (1)	48,276
Less interest	(22,523)
Total	$	25,753

(1)Certain payments above include future increases to the minimum fixed rent based on the Consumer Price Index in effect at the initial measurement of the lease balances.