Leases

9 Months Ended

Sep. 30, 2024

Note 8 – 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:

Quarter Ended

Nine Months Ended

	September 30,				September 30,
(Dollars in thousands)	2024		2023		2024		2023
	(As Restated)				(As Restated)
Lease cost
Finance lease cost:
Amortization of right-of-use assets	$	10	$	8	$	31	$	23
Interest on lease liabilities		1		—		4		1
Operating lease cost		7,585		8,076		23,723		24,287
Variable lease cost		734		722		2,394		1,377
Total lease cost	$	8,330	$	8,806	$	26,152	$	25,688

Supplemental cash flow information related to leases is as follows:


	Nine Months Ended
	September 30,
(Dollars in thousands)	2024		2023
	(As Restated)
Cash flows relating to lease cost
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for finance leases	$	33	$	26
Operating cash flows for operating leases		19,455		24,944
Right-of-use assets obtained in exchange for new operating lease liabilities		3,866		1,578

Supplemental balance sheet information related to leases is as follows:


	September 30,		December 31,
(Dollars in thousands)	2024		2023
Operating leases
Operating lease right-of-use assets	$	170,549	$	181,542
Operating lease liabilities - current portion		22,182		23,047
Operating lease liabilities - non-current portion		170,127		180,898
Total operating lease liabilities	$	192,309	$	203,945
Finance leases
Property plant and equipment, gross		234		232
Accumulated depreciation		(182)		(177)
Property plant and equipment, net	$	52	$	55
Other current liabilities		42		40
Other long-term liabilities		12		43
Total finance lease liabilities	$	54	$	83

Other information
Weighted-average remaining lease term - finance leases		1		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		4.74%		4.62%

The maturities of our leases were as follows:


(Dollars in thousands)	Operating ‎leases		Finance ‎leases
2024	$	30,862	$	44
2025		29,623		11
2026		27,239		—
2027		23,460		—
2028		21,834		—
Thereafter		113,572		—
Total lease payments	$	246,590	$	55
Less imputed interest		(54,281)		(1)
Total	$	192,309	$	54

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:


	Quarter Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2024		2023		2024		2023
Components of lease income
Lease payments	$	2,781		2,834	$	8,186	$	8,271
Variable lease payments		178		288		600		618
Total lease income	$	2,959	$	3,122	$	8,786	$	8,889

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


	September 30,		December 31,
(Dollars in thousands)	2024		2023
Building and improvements
Gross balance	$	117,675	$	127,222
Accumulated depreciation		(22,442)		(23,270)
Net Book Value	$	95,233	$	103,952

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


(Dollars in thousands)	Operating ‎leases
2024	$	2,214
2025		8,874
2026		7,334
2027		6,517
2028		6,548
Thereafter		21,384
Total	$	52,871