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Lease Assets and Lease Liabilities Lease Assets and Lease Liabilities
 6 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Lease Assets and Lease Liabilities Lease Assets and Lease Liabilities
Lease Assets

The Company is subject to various operating leases as lessee for both real estate and equipment, the majority of which are ground leases related to properties the Company leases to its tenants under triple-net operating leases. These ground leases may include fixed rent, as well as variable rent based upon an individual property’s performance or changes in an index such as the CPI, and have maturity dates ranging from 2028 to 2108, when considering all renewal options. For certain of these ground leases, the Company’s tenants are responsible for payment directly to the third-party landlord. Under ASC 842, the Company is required to gross-up its condensed consolidated financial statements for these ground leases as the Company is considered the primary obligor. In conjunction with the adoption of ASU 2016-02 on January 1, 2019, the Company recorded right-of-use assets and related lease liabilities on its condensed consolidated balance sheets to represent its rights to use the underlying leased assets and its future lease obligations, respectively, including for those ground leases paid directly by our tenants. Because the right-of-use asset relates, in part, to the same leases which resulted in the land right assets the Company recorded on its condensed consolidated balance sheets in conjunction with the Company's assumption of below market leases at the time it acquired the related land and building assets, the Company is required to report the right-of-use assets and land rights in the aggregate on the condensed consolidated balance sheets.

Land rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through the acquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of the related ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given market conditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paid under the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definite lived asset (land rights) on its books.
Components of the Company's right-of use assets and land rights, net are detailed below (in thousands):
June 30, 2022December 31, 2021
Right-of use assets - operating leases
$182,134 $183,136 
Land rights, net659,403 668,683 
Right-of-use assets and land rights, net$841,537 $851,819 

Land Rights

The land rights are amortized over the individual lease term of the related ground lease, including all renewal options, which ranged from 10 years to 92 years at their respective acquisition dates. Land rights net, consist of the following:
June 30,
2022		December 31,
2021
(in thousands)
Land rights$727,796 $730,783 
Less accumulated amortization(68,393)(62,100)
Land rights, net$659,403 $668,683 

During the six month period ended June 30, 2022, the Company recorded $2.7 million of accelerated land right amortization as it donated a portion of the land underlying a ground lease.

As of June 30, 2022, estimated future amortization expense related to the Company’s land rights by fiscal year is as follows (in thousands):
Year ending December 31,
2022 (remainder of year)$6,579 
202313,159 
202413,159 
202513,159 
202613,159 
Thereafter600,188 
Total$659,403 

Operating Lease Liabilities

At June 30, 2022, maturities of the Company's operating lease liabilities were as follows (in thousands):
Year ending December 31,
2022 (remainder of year)$6,778 
202313,556 
202413,505 
202513,452 
202613,459 
Thereafter610,693 
Total lease payments$671,443 
Less: interest(488,543)
Present value of lease liabilities
$182,900 

Lease Expense

Operating lease costs represent the entire amount of expense recognized for operating leases that are recorded on the condensed consolidated balance sheets. Variable lease costs are not included in the measurement of the lease liability and include both lease payments tied to a property's performance and changes in an index such as the CPI that are not determinable at lease commencement, while short-term lease costs are costs for those operating leases with a term of 12 months or less.
The components of lease expense were as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Operating lease cost$3,370 $3,228 $6,740 $6,156 
Variable lease cost 5,072 2,129 9,427 3,139 
Short-term lease cost— 301 — 628 
Amortization of land right assets3,290 3,006 9,280 5,849 
Total lease cost$11,732 $8,664 $25,447 $15,772 

Amortization expense related to the land right intangibles, as well as variable lease costs and the majority of the Company's operating lease costs are recorded within land rights and ground lease expense in the condensed consolidated statements of income.

Supplemental Disclosures Related to Leases

Supplemental balance sheet information related to the Company's operating leases was as follows:
June 30, 2022
Weighted average remaining lease term - operating leases51.45 years
Weighted average discount rate - operating leases6.6%

Supplemental cash flow information related to the Company's operating leases was as follows:

Three Months Ended June 30,Six Months Ended
June 30,
2022202120222021
(in thousands)(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
  Operating cash flows from operating leases (1)
$404 $403 $809 $807 

(1) The Company's cash paid for operating leases is significantly less than the lease cost for the same period due to the majority of the Company's ground lease rent being paid directly to the landlords by the Company's tenants. Although GLPI expends no cash related to these leases, they are required to be grossed up in the Company's condensed consolidated financial statements under ASC 842.
Financing Lease Liabilities

In connection with the acquisition of the real property assets of Live! Casino & Hotel Maryland, the Company acquired the rights to land subject to a long-term ground lease which expires on June 6, 2111. As the Maryland Live! Lease was accounted for as an Investment in lease, financing receivable, the underlying ground lease was accounted for as a financing lease obligation within Lease liabilities on the Condensed Consolidated Balance Sheets. In accordance with ASC 842, the Company records revenue for the ground lease rent paid by its tenant with an offsetting expense in interest expense as the Company has concluded that as the lessee it is the primary obligor under the ground leases. The ground lease contains variable lease payments based on a percentage of gaming revenues generated by the facility and has fixed minimum annual payments. The Company discounted the fixed minimum annual payments at 5.0% to arrive at the initial lease obligation. At June 30, 2022, maturities of this finance lease were as follows (in thousands):

Six Months Ended June 30, 2022
2022 (remainder of year)$1,105 
20232,222 
20242,244 
20252,267 
20262,289 
Thereafter304,371 
Total lease payments$314,498 
Less: Interest(260,950)
Present value of finance lease liability$53,548