11.LEASES

The Company determines if an arrangement is a lease at inception. Operating leases and finance lease right-of-use (“ROU”) assets are included in leased ROU assets in the Company’s condensed consolidated balance sheets. Operating lease liabilities are included in current portion of lease liabilities and operating lease liabilities in the Company’s condensed consolidated balance sheets. Finance lease liabilities are included in current portion of lease liabilities and finance lease liabilities in the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the rate implicit is not readily determinable for the Company’s leases, the Company uses its incremental borrowing rate in each of the jurisdictions in which its subsidiaries operate to calculate the present value of lease payments. If an implicit rate is readily determinable in the arrangement, the Company will utilize the implicit rate. Lease terms may include options to extend or terminate the lease, these options are included in the lease term when it is reasonably certain that the Company will exercise those options. Operating lease expense is recorded on a straight-line basis over the lease term.

The Company accounts for lease agreements with lease and non-lease components as a single lease component for all asset classes. The Company does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

The Company’s operating and finance leases include land, casino space, corporate offices, gaming equipment and other equipment. The leases have remaining lease terms of one month to 28 years.

Land – The Company leases the land on which the REC at CMR is built. The lease term is 20 years and the Company has six options to renew for additional five year terms.

Casino space - The Company leases space for its casino in Bath, England, its seven casinos operating in Poland and its casinos onboard nine cruise ships. The lease term for CCB is 28 years with an option to renew for an additional 15 year term. The lease terms for the casinos in Poland mirror the gaming license terms of six years. The lease terms for the casinos onboard the cruise ships mirror the agreement terms with the cruise ships, and the lease payments are variable based on revenue.

Corporate offices – The Company leases space for its corporate offices in Vienna, Austria and Colorado Springs, Colorado. The lease terms are three and 10 years, respectively. The corporate office lease in Vienna has an option to renew for an additional three years.

Gaming equipment – The majority of the gaming equipment that the Company leases is on a monthly basis with variable payments based on revenue.

Other equipment – The lease terms range from one to six years, some of which include options to extend the lease and some of which include options to terminate within one year.

The components of lease expense were as follows:


	For the three months
	ended March 31,
Amounts in thousands	2019
Operating lease expense	$	1,478

Finance lease expense:
Amortization of right-of-use assets	$	32
Interest on lease liabilities		3
Total finance lease expense	$	35

Short-term lease expense	$	138

Variable lease expense	$	681

Supplemental cash flow information related to leases was as follows:


	For the three months
	ended March 31,
Amounts in thousands	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	3
Operating cash flows from operating leases		1,108
Financing cash flows from finance leases		54

Supplemental balance sheet information related to leases was as follows:


	As of
Amounts in thousands	March 31, 2019
Operating leases
Leased right-of-use assets, net	$	37,716

Current portion of operating lease liabilities		3,270
Operating lease liabilities, net of current portion		37,045
Total operating lease liabilities		40,315

Finance leases
Finance lease right-of-use assets, gross		686
Accumulated depreciation		(360)
Leased right-of-use assets, net		326

Current portion of finance lease liabilities		83
Finance lease liabilities, net of current portion		48
Total finance lease liabilities		131

Weighted-average remaining lease term
Operating leases		15.9 years
Finance leases		1.6 years

Weighted-average discount rate
Operating leases		4.9%
Finance leases		6.7%

Maturities of lease liabilities as of March 31, 2019 were as follows:


Amounts in thousands		Operating leases	Finance leases
Remaining 2019	$	4,155	$	98
2020		4,835		50
2021		4,761		17
2022		4,524		—
2023		3,895		—
Thereafter		40,253		—
Total lease payments		62,423		165
Less imputed interest		(22,108)		(34)
Total	$	40,315	$	131

As of March 31, 2019, the Company had additional leases for racing equipment at Century Mile, which have not yet commenced, of approximately $1.0 million. The Company expects the leases will commence in the second quarter of 2019. Lease terms have not been finalized as of the filing of this report.