Leases

3 Months Ended

Mar. 31, 2024

Note 7 – Leases

In all leases, whether we are the lessor or lessee, we define lease term as the non-cancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of economic factors relevant to the lessee. The non-cancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

As Lessee

We have operating leases for certain cinemas, and finance leases for certain equipment assets. Our leases have remaining lease terms of 1 to 25 years, with certain leases having options to extend up to a further 20 years. Lease payments for our cinema operating leases consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics.

The components of lease expense were as follows:


	Three Months Ended
	March 31,
(Dollars in thousands)	2024		2023
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	10	$	8
Interest on lease liabilities		1		—
Operating lease cost		7,801		8,208
Variable lease cost		511		271
Total lease cost	$	8,323	$	8,487

Supplemental cash flow information related to leases is as follows:


	Three Months Ended
	March 31,
(Dollars in thousands)	2024		2023
Cash flows relating to lease cost
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for finance leases	$	11	$	9
Operating cash flows for operating leases		7,391		8,435
Right-of-use assets obtained in exchange for new operating lease liabilities		—		—

Supplemental balance sheet information related to leases is as follows:


	March 31,		December 31,
(Dollars in thousands)	2024		2023
Operating leases
Operating lease right-of-use assets	$	172,201	$	181,542
Operating lease liabilities - current portion		22,198		23,047
Operating lease liabilities - non-current portion		171,793		180,898
Total operating lease liabilities	$	193,991	$	203,945
Finance leases
Property plant and equipment, gross		225		232
Accumulated depreciation		(152)		(177)
Property plant and equipment, net	$	73	$	55
Other current liabilities		41		40
Other long-term liabilities		32		43
Total finance lease liabilities	$	73	$	83

Other information
Weighted-average remaining lease term - finance leases		2		2
Weighted-average remaining lease term - operating leases		11		11
Weighted-average discount rate - finance leases		7.07%		7.07%
Weighted-average discount rate - operating leases		4.63%		4.62%

The maturities of our leases were as follows:


(Dollars in thousands)	Operating ‎leases		Finance ‎leases
2024	$	30,740	$	44
2025		28,928		34
2026		26,990		—
2027		24,215		—
2028		21,433		—
Thereafter		116,048		—
Total lease payments	$	248,354	$	78
Less imputed interest		(54,363)		(5)
Total	$	193,991	$	73

As Lessor

We have entered into various leases as a lessor for our owned real estate properties. These leases vary in length between 1 and 20 years, with certain leases containing options to extend at the behest of the applicable tenants. Lease components consist of fixed base rent, and for certain leases, variable lease payments consisting of contracted percentages of revenue, changes in the relevant CPI, and/or other contracted financial metrics. None of our leases grant any right to the tenant to purchase the underlying asset.

Lease income relating to operating lease payments was as follows:


	Three Months Ended
	March 31,
(Dollars in thousands)	2024		2023
Components of lease income
Lease payments	$	2,701	$	2,636
Variable lease payments		144		187
Total lease income	$	2,845	$	2,823

The book value of underlying assets under operating leases from owned assets was as follows:


	March 31,		December 31,
(Dollars in thousands)	2024		2023
Building and improvements
Gross balance	$	125,323	$	127,222
Accumulated depreciation		(23,414)		(23,270)
Net Book Value	$	101,909	$	103,952

The minimum contractual rent payments due on our leases were as follows:


(Dollars in thousands)	Operating ‎leases
2024	$	7,105
2025		9,461
2026		7,910
2027		7,131
2028		7,048
Thereafter		22,326
Total	$	60,981