Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Company as Lessee

The Company is a lessee under non-cancelable operating and finance leases for offices, taverns, land, vehicles, slot machines and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slot machines at business locations, which are recorded in gaming expenses. The Company’s slot machine lease agreements with gaming equipment manufacturers are short-term in nature with the majority of such leases being under variable rent structure, with amounts determined based on the performance of the leased machines. Certain other short-term slot machine lease agreements are under fixed fee payment structure.

The leases have remaining lease terms of less than 1 year to 75 years, some of which include options to extend the leases for an additional 1 to 25 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days to 1 year notice. The Company assesses the options to extend or terminate the lease using a threshold of reasonably certain. For leases the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for

separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

Lease expense for arrangements with a fixed fee payment structure is recognized on a straight-line basis over the lease term. Lease expense for arrangements under a variable rent structure is recognized in the period in which the obligation for the payment is incurred.

The Company historically leased its office headquarters building and leases the office space in a building adjacent to the Company’s office headquarters building from a related party. Refer to “Note 14 — Related Party Transactions” for more detail.

The current and non-current obligations under finance leases are included in “Current portion of long-term debt and finance leases” and “Long-term debt, net and non-current finance leases” in the Company’s consolidated balance sheets, respectively. The finance leases relate to equipment for the Company’s casino properties and buildings for certain casino and branded tavern locations.

The components of lease expense were as follows:

		Year Ended December 31,
(In thousands)	Classification	2022		2021
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	55,907	$	54,131
Variable lease cost	Operating and SG&A expenses	17,943		20,449
Short-term lease cost	Operating and SG&A expenses	4,796		4,862
Total operating lease cost		$	78,646	$	79,442
Finance lease cost
Amortization of leased assets	Depreciation and amortization	$	934	$	1,693
Interest on lease liabilities	Interest expense, net	114		300
Total finance lease cost		$	1,048	$	1,993

Supplemental cash flow information related to leases was as follows:

	Year Ended December 31,
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used under operating lease agreements	$	55,846	$	53,527
Operating cash flows used under finance lease agreements	109		293
Financing cash flows used under finance lease agreements	541		6,179

Supplemental balance sheet information related to leases was as follows:

	December 31,
(In thousands)	2022		2021
Operating leases
Operating lease right-of-use assets, gross	$	193,565	$	221,732
Accumulated amortization	(45,672)		(42,481)
Operating lease right-of-use assets, net	$	147,893	$	179,251
Current portion of operating leases	$	42,200	$	40,151
Non-current operating leases	121,979		155,098
Total operating lease liabilities	$	164,179	$	195,249
Finance leases
Property and equipment, gross	$	5,719	$	6,278
Accumulated depreciation	(3,341)		(2,407)
Property and equipment, net	$	2,378	$	3,871
Current portion of finance leases	$	465	$	546
Non-current finance leases	1,692		2,459
Total finance lease liabilities	$	2,157	$	3,005

The following presents additional information related to the Company’s leases as of December 31, 2022:

	December 31,
	2022		2021
Weighted Average Remaining Lease Term
Operating leases	7.5 years		7.8 years
Finance leases	18.0 years		16.4 years
Weighted Average Discount Rate
Operating leases	5.9	%	5.7	%
Finance leases	6.4	%	6.1	%

Maturities of Lease Liabilities

As of December 31, 2022, maturities of lease liabilities were as follows:

(In thousands)	Operating Leases		Finance Leases		Total
2023	$	50,372	$	521	$	50,893
2024	43,268		227		43,495
2025	26,378		200		26,578
2026	16,933		200		17,133
2027	12,755		214		12,969
Thereafter	54,674		3,213		57,887
Total lease payments	204,380		4,575		208,955
Amount of interest	(40,201)		(2,418)		(42,619)
Present value of lease liabilities	$	164,179	$	2,157	$	166,336

As of December 31, 2022, the Company did not have any leases that have not yet commenced but that create significant rights and obligations.

Company as Lessor

The Company leases space to third-party tenants under operating leases primarily for retail and food and beverage outlets within its casino properties. Golden also enters into operating lease agreements with certain equipment providers for placement of amusement devices, gaming machines and automated teller machines within its casino properties and branded taverns. The leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for an additional 1 to 15 years.

Lease payments from tenants generally include minimum base rent, adjusted for contractual escalations as applicable, and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. The Company records revenue on a straight-line basis over the term of the lease and recognizes revenue for contingent rentals when the contingency has been resolved. The Company combines lease and non-lease components for the purpose of measuring lease revenue, which is recorded in “Other revenue” in the Company’s consolidated statements of operations.

Minimum and contingent operating lease income was as follows:

	Year Ended December 31,
(In thousands)	2022		2021		2020
Minimum rental income	$	7,380	$	6,041	$	3,913
Contingent rental income	4,071		3,169		1,840
Total rental income	$	11,451	$	9,210	$	5,753

Future minimum rent payments to be received under operating leases are as follows (in thousands):

Year Ending December 31,	Amount
2023	$	5,025
2024	4,913
2025	4,875
2026	4,072
2027	1,173
Thereafter	1,371
Total future minimum rent payments	$	21,429

Leases

Leases

Company as Lessee

The Company is a lessee under non-cancelable operating and finance leases for offices, taverns, land, vehicles, slot machines and equipment. In addition, slot placement contracts in the form of space lease agreements at chain stores are accounted for as operating leases. Under chain store space lease agreements, the Company pays fixed monthly rental fees for the right to install, maintain and operate its slot machines at business locations, which are recorded in gaming expenses. The Company’s slot machine lease agreements with gaming equipment manufacturers are short-term in nature with the majority of such leases being under variable rent structure, with amounts determined based on the performance of the leased machines. Certain other short-term slot machine lease agreements are under fixed fee payment structure.

The leases have remaining lease terms of less than 1 year to 75 years, some of which include options to extend the leases for an additional 1 to 25 years. Some equipment leases and space lease agreements include options to terminate the lease with 60 days to 1 year notice. The Company assesses the options to extend or terminate the lease using a threshold of reasonably certain. For leases the Company is reasonably certain to renew, those option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability.

The Company’s lease agreements for land, buildings and taverns with lease and non-lease components are accounted for

separately. The lease and non-lease components of certain vehicle and equipment leases are accounted for as a single lease component. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

Lease expense for arrangements with a fixed fee payment structure is recognized on a straight-line basis over the lease term. Lease expense for arrangements under a variable rent structure is recognized in the period in which the obligation for the payment is incurred.

The Company historically leased its office headquarters building and leases the office space in a building adjacent to the Company’s office headquarters building from a related party. Refer to “Note 14 — Related Party Transactions” for more detail.

The current and non-current obligations under finance leases are included in “Current portion of long-term debt and finance leases” and “Long-term debt, net and non-current finance leases” in the Company’s consolidated balance sheets, respectively. The finance leases relate to equipment for the Company’s casino properties and buildings for certain casino and branded tavern locations.

The components of lease expense were as follows:

		Year Ended December 31,
(In thousands)	Classification	2022		2021
Operating lease cost
Operating lease cost	Operating and SG&A expenses	$	55,907	$	54,131
Variable lease cost	Operating and SG&A expenses	17,943		20,449
Short-term lease cost	Operating and SG&A expenses	4,796		4,862
Total operating lease cost		$	78,646	$	79,442
Finance lease cost
Amortization of leased assets	Depreciation and amortization	$	934	$	1,693
Interest on lease liabilities	Interest expense, net	114		300
Total finance lease cost		$	1,048	$	1,993

Supplemental cash flow information related to leases was as follows:

	Year Ended December 31,
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used under operating lease agreements	$	55,846	$	53,527
Operating cash flows used under finance lease agreements	109		293
Financing cash flows used under finance lease agreements	541		6,179

Supplemental balance sheet information related to leases was as follows:

	December 31,
(In thousands)	2022		2021
Operating leases
Operating lease right-of-use assets, gross	$	193,565	$	221,732
Accumulated amortization	(45,672)		(42,481)
Operating lease right-of-use assets, net	$	147,893	$	179,251
Current portion of operating leases	$	42,200	$	40,151
Non-current operating leases	121,979		155,098
Total operating lease liabilities	$	164,179	$	195,249
Finance leases
Property and equipment, gross	$	5,719	$	6,278
Accumulated depreciation	(3,341)		(2,407)
Property and equipment, net	$	2,378	$	3,871
Current portion of finance leases	$	465	$	546
Non-current finance leases	1,692		2,459
Total finance lease liabilities	$	2,157	$	3,005

The following presents additional information related to the Company’s leases as of December 31, 2022:

	December 31,
	2022		2021
Weighted Average Remaining Lease Term
Operating leases	7.5 years		7.8 years
Finance leases	18.0 years		16.4 years
Weighted Average Discount Rate
Operating leases	5.9	%	5.7	%
Finance leases	6.4	%	6.1	%

Maturities of Lease Liabilities

As of December 31, 2022, maturities of lease liabilities were as follows:

(In thousands)	Operating Leases		Finance Leases		Total
2023	$	50,372	$	521	$	50,893
2024	43,268		227		43,495
2025	26,378		200		26,578
2026	16,933		200		17,133
2027	12,755		214		12,969
Thereafter	54,674		3,213		57,887
Total lease payments	204,380		4,575		208,955
Amount of interest	(40,201)		(2,418)		(42,619)
Present value of lease liabilities	$	164,179	$	2,157	$	166,336

As of December 31, 2022, the Company did not have any leases that have not yet commenced but that create significant rights and obligations.

Company as Lessor

The Company leases space to third-party tenants under operating leases primarily for retail and food and beverage outlets within its casino properties. Golden also enters into operating lease agreements with certain equipment providers for placement of amusement devices, gaming machines and automated teller machines within its casino properties and branded taverns. The leases have remaining lease terms of 1 to 10 years, some of which include options to extend the leases for an additional 1 to 15 years.

Lease payments from tenants generally include minimum base rent, adjusted for contractual escalations as applicable, and/or contingent rental clauses based on a percentage of net sales exceeding minimum base rent. The Company records revenue on a straight-line basis over the term of the lease and recognizes revenue for contingent rentals when the contingency has been resolved. The Company combines lease and non-lease components for the purpose of measuring lease revenue, which is recorded in “Other revenue” in the Company’s consolidated statements of operations.

Minimum and contingent operating lease income was as follows:

	Year Ended December 31,
(In thousands)	2022		2021		2020
Minimum rental income	$	7,380	$	6,041	$	3,913
Contingent rental income	4,071		3,169		1,840
Total rental income	$	11,451	$	9,210	$	5,753

Future minimum rent payments to be received under operating leases are as follows (in thousands):

Year Ending December 31,	Amount
2023	$	5,025
2024	4,913
2025	4,875
2026	4,072
2027	1,173
Thereafter	1,371
Total future minimum rent payments	$	21,429