Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

16. Leases

On January 1, 2019, we adopted Topic 842 using the modified retrospective approach on leases with terms extending past January 1, 2019. Results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. As a result, we were not required to adjust our comparative period financial information for the effects of Topic 842 or make new lease disclosures for comparative prior periods before the date of adoption. See Note 2 (u. Leases) for additional information concerning our accounting policies and the election of certain practical expedients under Topic 842.

Upon adoption of Topic 842 on January 1, 2019, we recorded right-of-use assets and corresponding liabilities of $207.4 million and $204.3 million, respectively, with the impact primarily related to our leases of operating rights for theme park and waterpark properties and land. There was not a material impact to our consolidated statements of operations or statements of cash flows as a result of adoption of Topic 842.

We have operating leases for amusement parks, land, vehicles, machinery and certain equipment. Our leases have remaining lease terms of less than one year to 45 years, some of which include an option to extend the underlying leases for up to 20 years, and some of which include an option to terminate the underlying lease within one year. For our noncancelable operating leases with such options to extend, because we may determine it is not reasonably certain we will exercise the option, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments. Our leases generally do not include restrictive financial or other covenants. Payments due under the lease contracts include fixed payments and, for certain of our leases, variable payments.

The components of lease cost for the year ended December 31, 2020 are as follows:

	Year Ended
(Amounts in thousands)	December 31, 2020		December 31, 2019
Finance Lease Expense
Amortization of ROU assets	$	248	$	—
Interest on lease liabilities		31		—
Operating lease cost		24,166		24,890
Short-term lease cost		5,804		6,925
Variable lease cost		4,816		5,979
Total lease cost	$	35,065	$	37,794

Lease costs for the year ended December 31, 2020 and 2019 included minimum rental payments under operating leases recognized on a straight-line basis over the term of the lease. Rental expense for operating leases during the year ended December 31, 2018 was $29.3 million.

Other information related to leases for the year ended December 31, 2020 and 2019 is as follows:

	Year Ended
(Amounts in thousands, except for lease term and discount rate)	December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	18,870	$	24,140
Financing cash flows for finance leases		490		—
Operating cash flows from finance leases		31		—
Operating Leases
ROU assets obtained in exchange for lease liabilities		7,774		4,808
Finance Leases
ROU assets obtained in exchange for lease liabilities		2,428		—

Additional information related to our operating leases for the year ended December 31, 2020 is as follows:

Weighted average remaining lease term (in years)	18.83
Weighted average discount rate	6.95	%

Additional information related to our finance leases for the year ended December 31, 2020 is as follows:

Weighted average remaining lease term (in years)	3.59
Weighted average discount rate	3.81	%

The following tables set forth supplemental balance sheet information related to operating and finance leases as of December 31, 2020 and December 31, 2019:

	Year Ended
(Amounts in thousands)	December 31, 2020		December 31, 2019
Operating Leases
Right of use assets, net	$	196,711	$	201,128
Short-term lease liabilities		13,727		10,709
Long-term lease liabilities		185,823		188,149
Total operating lease obligation	$	199,550	$	198,858
Finance Leases
Property and equipment, at cost	$	2,428	$	—
Accumulated depreciation		(248)		—
Total property and equipment, net	$	2,180	$	—
Short-term lease liabilities	$	327	$	—
Long-term lease liabilities		1,609		—
Total finance lease obligation	$	1,936	$	—

Maturities of noncancelable operating and finance lease liabilities under Topic 842 as of December 31, 2020 are summarized in the table below.

(Amounts in thousands)	As of December 31, 2020
	Finance Leases		Operating Leases
2021	$	397	$	26,859
2022		651		22,326
2023		651		22,225
2024		384		20,473
2025		—		18,388
Thereafter		—		261,746
Total	$	2,083	$	372,017
Less: present value discount		(147)		(172,467)
Lease liability	$	1,936	$	199,550

Practical Expedients

We have elected the package of practical expedients for adoption of Topic 842 permitted under the transition guidance within the standard, which among other things allows us to carry forward historical lease classification, indirect costs and the original determination of whether or not a contract contained a lease.

We have elected the practical expedient to not separate a qualifying lease into its lease and non-lease components.