Lease Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Lease Commitments and Contingencies:

Lease Commitments

Our most significant lease commitment is for the land on which Schlitterbahn Waterpark Galveston is located which we acquired upon acquisition of the Schlitterbahn parks on July 1, 2019 (see Note 4). This land lease resulted in the recognition of an additional right-of-use asset totaling $6.8 million and an additional corresponding lease liability totaling $5.3 million during the third quarter of 2019. The Schlitterbahn Waterpark Galveston land lease has an initial term through 2024 with renewal options through 2049. In calculating the right-of-use asset and lease liability, we are reasonably certain to exercise renewal options through 2049 and the discount rate used represents the incremental borrowing rate if we were to acquire the land on the acquisition date, or July 1, 2019.

As a lessee, we have also entered into various operating leases for office space, office equipment, vehicles, and revenue-generating assets. As a lessor, we lease a portion of the California's Great America parking lot to the Santa Clara Stadium Authority during Levi's Stadium events. The parking lot lease is effective through the life of the stadium, or approximately 25 years, from the opening of the stadium through 2039. The lease payments were prepaid, and the corresponding income is being recognized over the life of the stadium. The annual lease income recognized is immaterial.

Prior to the second quarter of 2019, our most significant lease commitment was for the land on which California's Great America is located in the City of Santa Clara, which had an initial term through 2039 with renewal options through 2074. On June 28, 2019, we purchased the land at California's Great America from the lessor, the City of Santa Clara, for $150.3 million.

Total lease cost and related supplemental information for the years ended December 31, 2020 and December 31, 2019 were as follows:


	Years Ended December 31,
(In thousands, except for lease term and discount rate)	2020			2019
Operating lease expense	$	2,797		$	5,623
Variable lease expense	173			1,579
Short-term lease expense	2,205			6,635
Sublease income	—			(244)
Total lease cost	$	5,175		$	13,593

Weighted-average remaining lease term	16.8 years			16.7 years
Weighted-average discount rate	4.1		%	4.2		%
Operating cash flows for operating leases	$	2,679		$	5,494
Leased assets obtained in exchange for new operating lease liabilities (non-cash activity)	$	1,769		$	5,512

Lease expense, which includes short-term rentals for equipment and machinery, totaled $16.5 million for the year ended December 31, 2018.

Future undiscounted cash flows under our operating leases and a reconciliation to the operating lease liabilities recognized as of December 31, 2020 are included below:


(In thousands)	December 31, 2020
Undiscounted cash flows
2021	$	2,113
2022	1,531
2023	1,249
2024	998
2025	897
Thereafter	10,313
Total	$	17,101

Present value of cash flows
Current lease liability	$	1,692
Lease Liability	10,483
Total	$	12,175

Difference between undiscounted cash flows and discounted cash flows	$	4,926

Contingencies

We are a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters are expected to have a material effect in the aggregate on the consolidated financial statements.