Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

6. Leases

The Company is a lessee of a 65.3 acre site in Osceola County, Florida on which Gaylord Palms is located; building or land leases for Ole Red Gatlinburg, Ole Red Orlando, Ole Red Tishomingo, Ole Red Nashville International Airport and Ole Red Las Vegas; and various warehouse, general office and other equipment leases. The Gaylord Palms land lease has a term through 2074, which may be extended through January 2101, at the Company’s discretion. The leases for Ole Red locations range from five to ten years, with renewal options ranging from five to fifty-five years, at the Company’s discretion, with the exception of Ole Red Nashville International Airport, which has no extension option. Extension options are not considered reasonably assured and thus are not included in the Company’s calculation of its right-of-use assets and liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The terms of the Gaylord Palms lease include variable lease payments based upon net revenues at Gaylord Palms and certain other of the Company’s leases include rental payments adjusted periodically for inflation. The Company recorded $3.5 million, $3.0 million and $1.8 million of contingent rental expense related to Gaylord Palms in 2023, 2022 and 2021, respectively.

As the discount rate implicit in the Company’s operating leases is not readily determinable, the Company applies judgments related to the determination of the discount rates used to calculate the lease liability as required by Accounting Standards Codification Topic 842, “Leases”. The Company calculates its incremental borrowing rates by

utilizing judgments and estimates regarding the Company’s secured borrowing rates, market credit rating, comparable bond yield curve, and adjustments to market yield curves to determine a securitized rate.

The Company’s lease cost for the years ended December 31 is as follows (in thousands):

	2023		2022		2021
Operating lease cost	$	18,346	$	15,694	$	13,199
Finance lease cost:
Amortization of right-of-use assets		163		122		146
Interest on lease liabilities		25		33		39
Net lease cost	$	18,534	$	15,849	$	13,384

Future minimum lease payments under non-cancelable leases at December 31, 2023 are as follows (in thousands):

	Operating		Finance
	Leases		Leases
Year 1	$	9,809	$	84
Year 2		9,224		40
Year 3		9,315		18
Year 4		9,218		—
Year 5		9,063		—
Years thereafter		556,191		—
Total future minimum lease payments		602,820		142
Less amount representing interest		(473,698)		(4)
Total present value of minimum payments	$	129,122	$	138

The remaining lease term and discount rate for the Company’s leases are as follows:

Weighted-average remaining lease term:
Operating leases	43.1	years
Finance leases	2.0	years
Weighted-average discount rate:
Operating leases	7.0	%
Finance leases	2.4	%