The Company leases land, warehouse and office space, and equipment, which are classified as either operating or finance leases. The Company’s most significant lease is a long-term land lease with the City of San Diego covering approximately 190 acres, including approximately 17 acres of water in Mission Bay Park, California (the “Premises”). While there are no financial restrictions or covenants imposed by the Premises lease, there are certain operational restrictions in that the Premises must be used as a marine park facility and the Company may not operate another marine park facility within 560 miles of the City of San Diego.

The lease term for the Premises ends in June 2048 and the annual rent under the lease is variable and calculated on the basis of a specified percentage of the Company’s gross income from the Premises (the “Percentage Rent”), or the minimum yearly rent (the “Minimum Rent”), whichever is greater. Portions of the Percentage Rent are subject to adjustment every 10 years.

The required annual rent payments for the Premises are adjusted every three years to an amount equal to 80% of the average accounting year rent actually paid for the three previous years, with the annual minimum rent calculated as approximately $10.4 million through each of the years ended December 31, 2023, 2022 and 2021. The current minimum yearly rent is next subject to adjustment on January 1, 2026.

The annual rent payments may vary from the base rent due to a shift of seasonal performance results. Rent payments related to the Premises for the years ended December 31, 2023, 2022 and 2021 were approximately $13.3 million (including approximately $1.2 million remitted in 2023 related to 2022, $13.6 million (including approximately $1.0 million remitted in 2022 related to 2021 and certain other fees) and $11.1 million (including approximately $1.6 million remitted in 2021 related to 2020 Percentage Rent), respectively. The Company’s gross income from the Premises was significantly impacted during the year ended December 31, 2020 due to the temporary park closures, limited reopenings, modified operations and capacity restrictions resulting from the impact of the COVID-19 pandemic and related government restrictions in San Diego. Due to these factors, the Company deferred a payment of $8.3 million related to the Minimum Rent for the year ended December 31, 2020 (the “2020 Minimum Rent Payment”). As such, approximately $13.8 million and $10.9 million is included primarily in accounts payable and accrued expenses on the accompanying consolidated balance sheets as of December 31, 2023 and 2022, respectively, primarily related to the 2020 Minimum Rent Payment, the timing of the respective December rent payments, and certain accrued fees. Operating lease liabilities and long-term operating lease liabilities on the accompanying consolidated balance sheets as of December 31, 2023 and 2022 and the lease maturities as of December 31, 2023 are not adjusted for these deferred payments.

The tables below present the lease balances and their classification in the accompanying consolidated balance sheets as of December 31, 2023 and 2022:


		December 31,		December 31,
	Classification	2023		2022
Assets:		(In thousands)
Operating leases	Right of use assets - operating	$	127,379	$	130,479
Finance leases	Other assets, net		4,537		2,353
Total lease assets		$	131,916	$	132,832
Liabilities:
Current
Operating leases	Operating lease liabilities	$	3,380	$	3,387
Finance leases	Other accrued liabilities		1,145		171
Noncurrent
Operating leases	Long-term operating lease liabilities		112,724		115,396
Finance leases	Other liabilities		3,349		2,284
Total lease liabilities		$	120,598	$	121,238

The table below presents the lease costs and their classification in the accompanying consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021:



	Classification	2023		2022		2021
		(In thousands)
Operating lease cost	Operating expenses	$	13,513	$	13,177	$	13,200
Operating lease cost	Selling, general and administrative expenses		82		337		415
Finance lease cost
Amortization of leased assets	Depreciation and amortization		764		469		817
Interest on lease liabilities	Interest expense		155		83		123
Net lease cost		$	14,514	$	14,066	$	14,555

In addition to the operating lease costs above, short-term rent expense for the years ended December 31, 2023, 2022 and 2021 were approximately $8.6 million, $4.6 million and $2.7 million, respectively, and variable rent expense for the years ended December 31, 2023, 2022 and 2021 were $6.2 million, $4.6 million and $3.8 million, respectively. The short-term and variable rent expense amounts are included primarily in operating expenses in the accompanying consolidated statements of operations.

The table below presents the Company’s lease maturities as of December 31, 2023:


	Operating leases
Years Ending December 31,	Land lease			Other operating leases			Total operating leases			Finance leases
	(In thousands)
2024	$	10,401		$	2,246		$	12,647		$	1,317
2025		10,401			1,671			12,072			1,309
2026		10,401			1,535			11,936			339
2027		10,401			225			10,626			200
2028		10,401			225			10,626			199
Thereafter		202,825			620			203,445			1,797
Total lease payments		254,830			6,522			261,352			5,161
Less: Imputed interest		(144,451	)		(797	)		(145,248	)		(667	)
Lease liabilities	$	110,379		$	5,725		$	116,104		$	4,494

The table below presents the weighted average remaining lease terms and applicable discount rates as of December 31, 2023 and 2022:



	2023			2022
Weighted average remaining lease term (years):
Operating leases		23.50			24.27
Finance leases		8.34			15.08
Weighted average discount rate:
Operating leases		8.17	%		8.16	%
Finance leases		4.43	%		3.07	%

The table below presents the cash flows and supplemental information associated with the Company’s leasing activities for the years ended December 31, 2023, 2022 and 2021:



	2023		2022		2021
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	13,172	$	12,934	$	13,190
Operating cash flows from finance leases	$	155	$	83	$	123
Financing cash flows from finance leases	$	927	$	485	$	841
Right of use assets obtained in exchange for lease liabilities:
Finance leases	$	2,923	$	—	$	32
Operating leases	$	1,017	$	3,174	$	143