Leases (Tables)

3 Months Ended

Mar. 31, 2019

Other information related to leases, components of lease expense and supplemental cash flow information

Other information related to lease term and discount rate was as follows:



	March 31, 2019
Weighted Average Remaining Lease Term
Operating leases ⁽¹⁾	29.8 years
Finance leases ⁽²⁾	29.5 years
Financing obligations ⁽³⁾	31.1 years

Weighted Average Discount Rate
Operating leases ⁽¹⁾	6.9	%
Finance leases ⁽²⁾	6.8	%
Financing obligations ⁽³⁾	8.1	%

(1)

Amounts consist of (i) land components associated with our Master Leases that were concluded to be operating leases at the adoption date of the new lease standard; (ii) our Meadows Lease; (iii) our Margaritaville Lease; (iv) ground and levee leases with landlords which were not assumed by our REIT landlords and remain an obligation of the Company; and (v) building and equipment not contained within leases with our REIT landlords. For leases where the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.

(2)

Amounts primarily represent finance leases associated with our Dayton and Mahoning Valley properties (which are included in the Penn Master Lease) that under previous GAAP utilized specific build-to-suit guidance. The adoption of the new lease standard required the Company to evaluate the components utilizing the guidance contained within the new lease standard, which resulted in all components being classified as finance leases.

For leases where the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.


(3)	Amounts consist of components contained within each of the Master Leases determined to continue to be financing obligations (which consist primarily of building components) at the adoption date of the new lease standard.

The components of lease expense were as follows:



	Classification
(in thousands)	Gaming Expense		Food, Beverage, Hotel and Other Expense		General and Administrative		Interest Expense		Depreciation and Amortization		Total for the three months ended March 31, 2019
Operating Lease Costs
Rent expense associated with triple net leases classified as operating leases ⁽¹⁾	$	—	$	—	$	84,730	$	—	$	—	$	84,730
Operating lease cost	137		156		4,097		—		—		4,390
Short-term lease cost	12,936		160		568		—		—		13,664
Variable lease cost	1,259		2		315		—		—		1,576
Total	$	14,332	$	318	$	89,710	$	—	$	—	$	104,360

Finance Lease Costs
Interest expense associated with finance leases ⁽²⁾	$	—	$	—	$	—	$	3,827	$	—	$	3,827
Amortization expense associated with finance leases ⁽²⁾	—		—		—		—		1,959		1,959
Total	$	—	$	—	$	—	$	3,827	$	1,959	$	5,786

Financing Obligation Costs
Interest expense associated with financing obligations ⁽³⁾	$	—	$	—	$	—	$	97,672	$	—	$	97,672


(1)	Pertains to the components contained within the Master Leases (primarily land components) determined to be operating leases, the Meadows Lease, and the Margaritaville Lease.


(2)	Primarily pertains to the Dayton and Mahoning Valley finance leases.

(3)

Pertains to the components contained within the Master Leases (primarily building components) determined to continue to be financing obligations, inclusive of contingent variable interest expense associated with Columbus and Toledo.Supplemental cash flow information related to leases was as follows:



(in thousands)	For the three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	3,827
Operating cash flows from operating leases	$	90,629
Financing cash flows from finance leases	$	1,640

Schedule of future minimum lease commitments, operating leases

The following is a maturity analysis of our operating leases, finance leases, and financing obligations as of March 31, 2019:



(in thousands)	Operating Leases			Finance Leases			Financing Obligations
Years ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	275,761		$	15,701		$	292,189
2020	352,916			21,028			374,715
2021	336,908			21,021			367,278
2022	336,660			20,909			367,278
2023	333,540			20,083			367,278
Thereafter	7,665,371			398,727			9,637,956
Total lease payments	9,301,156			497,469			11,406,694
Less: Amounts representing interest	(5,336,870		)	(274,647		)	(7,224,861		)
Present value of future lease payments	3,964,286			222,822			4,181,833
Less: Current portion of lease obligations	(95,894		)	(5,874		)	(52,600		)
Long-term portion of lease obligations	$	3,868,392		$	216,948		$	4,129,233

Schedule of future minimum lease commitments, finance leases

The following is a maturity analysis of our operating leases, finance leases, and financing obligations as of March 31, 2019:



(in thousands)	Operating Leases			Finance Leases			Financing Obligations
Years ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	275,761		$	15,701		$	292,189
2020	352,916			21,028			374,715
2021	336,908			21,021			367,278
2022	336,660			20,909			367,278
2023	333,540			20,083			367,278
Thereafter	7,665,371			398,727			9,637,956
Total lease payments	9,301,156			497,469			11,406,694
Less: Amounts representing interest	(5,336,870		)	(274,647		)	(7,224,861		)
Present value of future lease payments	3,964,286			222,822			4,181,833
Less: Current portion of lease obligations	(95,894		)	(5,874		)	(52,600		)
Long-term portion of lease obligations	$	3,868,392		$	216,948		$	4,129,233

Schedule of future minimum lease commitments, financing obligations

The following is a maturity analysis of our operating leases, finance leases, and financing obligations as of March 31, 2019:



(in thousands)	Operating Leases			Finance Leases			Financing Obligations
Years ending December 31,
2019 (excluding the three months ended March 31, 2019)	$	275,761		$	15,701		$	292,189
2020	352,916			21,028			374,715
2021	336,908			21,021			367,278
2022	336,660			20,909			367,278
2023	333,540			20,083			367,278
Thereafter	7,665,371			398,727			9,637,956
Total lease payments	9,301,156			497,469			11,406,694
Less: Amounts representing interest	(5,336,870		)	(274,647		)	(7,224,861		)
Present value of future lease payments	3,964,286			222,822			4,181,833
Less: Current portion of lease obligations	(95,894		)	(5,874		)	(52,600		)
Long-term portion of lease obligations	$	3,868,392		$	216,948		$	4,129,233