Leases and Other

9 Months Ended

Sep. 30, 2021

Note 20. Leases and Other

The balance sheet presentation of our operating and finance leases is as follows:


		September 30,		December 31,
(in thousands)	Classification on the Condensed Consolidated Balance Sheet	2021		2020
Assets:
Operating lease assets	Operating lease ROU assets	$	87,935	$	82,739
Finance lease assets (1)	Property and equipment, net		61,263		23,366
Total lease assets		$	149,198	$	106,105

Liabilities:
Current:
Operating lease obligations	Operating lease obligations	$	11,058	$	15,697
Finance lease obligations	Current portion of debt and finance lease obligations		3,085		2,514
Noncurrent:
Operating lease obligations	Long-term operating lease obligations		86,165		70,150
Finance lease obligations (1)	Long-term debt and finance lease obligations		60,512		20,627
Total lease liabilities		$	160,820	$	108,988

(1)

The increase in finance lease assets and obligations is primarily due to the commencement of Pursuit’s new Sky Lagoon attraction in Iceland during the first quarter of 2021, which has a 46-year lease term.

During the first quarter of 2021, we recorded a write down of certain ROU assets as a result of vacating certain facilities prior to the lease term.

The components of lease expense consisted of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2021		2020		2021		2020
Finance lease cost:
Amortization of ROU assets	$	1,093	$	926	$	3,231	$	2,767
Interest on lease liabilities		1,405		429		4,193		1,258
Operating lease cost		5,165		6,596		17,328		20,235
Short-term lease cost		394		123		853		465
Variable lease cost		1,059		1,557		3,093		4,615
Total lease cost, net	$	9,116	$	9,631	$	28,698	$	29,340

Other information related to operating and finance leases are as follows:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands)	2021		2020			2021			2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,140	$	5,644		$	17,753		$	18,268
Operating cash flows from finance leases	$	4,748	$	839		$	5,955		$	1,705
Financing cash flows from finance leases	$	656	$	665		$	2,050		$	2,235
ROU assets obtained in exchange for lease obligations:
Operating leases	$	8,033	$	(3,059	)	$	26,968		$	1,018
Finance leases		1,073	$	126		$	42,782		$	1,894

						September 30,			December 31,
						2021			2020
Weighted-average remaining lease term (years):
Operating leases							8.33			8.39
Finance leases						35.11(1)				13.97
Weighted-average discount rate:
Operating leases							6.72	%		6.93	%
Finance leases							9.05	%		7.99	%

(1)

As of September 30, 2021, the estimated future minimum lease payments under non-cancellable leases, excluding variable leases and variable non-lease components, are as follows:


(in thousands)	Operating Leases			Finance Leases			Total
Remainder of 2021	$	5,571		$	2,142		$	7,713
2022		19,954			8,269			28,223
2023		17,858			7,750			25,608
2024		16,113			6,699			22,812
2025		14,832			6,168			21,000
Thereafter		60,906			188,955			249,861
Total future lease payments		135,234			219,983			355,217
Less: Amount representing interest		(38,011	)		(156,386	)		(194,397	)
Present value of minimum lease payments		97,223			63,597			160,820
Current portion		11,058			3,085			14,143
Long-term portion	$	86,165		$	60,512		$	146,677

As of September 30, 2021, the estimated future minimum rental income under non-cancellable leases, which includes rental income from facilities that we own, is as follows:


(in thousands)
Remainder of 2021	$	411
2022		1,291
2023		1,071
2024		847
2025		694
Thereafter		1,453
Total minimum rents	$	5,767

Lease Not Yet Commenced

As of September 30, 2021, we had executed a facility lease for which we did not have control of the underlying assets. Accordingly, we did not record the lease liability and ROU asset on the Condensed Consolidated Balance Sheets. This lease is for the new FlyOver attraction, FlyOver Canada Toronto. We expect the lease commencement date to begin in fiscal year 2022 with a lease term of 20 years.