Lease Commitments

12 Months Ended

Dec. 31, 2023

Lease Commitments:

Our most significant lease commitment is for the land at California's Great America, which we sold on June 27, 2022. Concurrently with the sale of the land, we entered into a lease contract that allows us to operate the park during a six-year term, and we have an option to extend the term for an additional five years. The lease is subject to early termination by the buyer with at least two years' prior notice. Upon termination of the lease, we will close existing park operations and remove the rides and attractions from the land. The annual base rent under the lease liability initially was $12.2 million and will increase by 2.5% per year. Upon commencement of the lease, we recognized a right-of-use asset and lease liability equal to the annual base rent for the initial six-year term and estimated lease payments totaling $12.8 million to dismantle and remove rides and attractions upon termination of the lease. The discount rate used to determine the present value of the future lease payments was our incremental borrowing rate. We sublease a portion of the California's Great America parking lot to the Santa Clara Stadium Authority during Levi's Stadium events. The lease payments were prepaid, and the corresponding income is being recognized over the lease term, or through 2027. The annual lease income recognized is immaterial.

Other significant lease commitments include corporate office space in Charlotte, North Carolina and the land on which Schlitterbahn Waterpark Galveston is located. The corporate office space is generally leased through 2029. The Schlitterbahn Waterpark Galveston land lease has an initial term through 2024 with renewal options at our discretion through 2049, which we have concluded we are reasonably certain to exercise. We have also entered into various operating leases for office equipment, vehicles, storage and revenue-generating assets.

Total lease cost and related supplemental information for the years ended December 31, 2023, 2022 and 2021 were as follows:


	Years Ended December 31,
(In thousands, except for lease term and discount rate)	2023			2022			2021
Operating lease expense	$	19,422		$	9,857		$	2,711
Variable lease expense	382			972			872
Short-term lease expense	9,580			8,769			7,563
Sublease income	(1,436)			(715)			—
Total lease cost	$	27,948		$	18,883		$	11,146

Weighted-average remaining lease term	5.8 years			6.7 years			14.1 years
Weighted-average discount rate	3.9		%	3.7		%	3.7		%
Operating cash flows for operating leases	$	16,046		$	9,034		$	2,299
Leased assets obtained in exchange for new operating lease liabilities (non-cash activity)	$	4,306		$	85,789		$	4,914

Future undiscounted cash flows under our operating leases and a reconciliation to the operating lease liabilities recognized as of December 31, 2023 are included below:


(In thousands)	December 31, 2023
Undiscounted cash flows
2024	$	16,330
2025	16,305
2026	16,222
2027	15,865
2028	23,939
Thereafter	8,086
Total	$	96,747

Present value of cash flows
Current lease liability	$	13,294
Lease Liability	71,951
Total	$	85,245

Difference between undiscounted cash flows and discounted cash flows	$	11,502