Quarterly report pursuant to Section 13 or 15(d)

Lease Accounting

v3.22.2
Lease Accounting
6 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Lease Accounting
4.
Lease Accounting

Lease Deferrals and Abatements

Upon the temporary closure of theatres in March 2020, the Company began negotiating the deferral of rent and other lease-related payments with its landlords while theatres remained closed. These negotiations resulted in amendments to the leases that involve varying concessions, including the abatement of rent payments during closure, deferral of all or a portion of rent payments to later periods and deferrals of rent payments combined with an early exercise of an existing renewal option or extension of the lease term. Total remaining deferred payments as of June 30, 2022 and December 31, 2021 were $13.3 and $31.9, respectively, and are included in accounts payable and accrued expenses in the condensed consolidated balance sheets.

The following table represents the Company’s aggregate lease costs, by lease classification, for the periods presented.

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

Lease Cost

Classification

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating lease costs

 

 

 

 

 

 

 

 

 

 

 

 

Equipment (1)

Utilities and other

$

1.0

 

 

$

0.5

 

 

$

1.6

 

 

$

0.9

 

Real Estate (2)(3)

Facility lease expense

 

81.9

 

 

 

67.6

 

 

 

156.9

 

 

 

131.4

 

Total operating lease costs

 

$

82.9

 

 

$

68.1

 

 

$

158.5

 

 

$

132.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance lease costs

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of leased assets

Depreciation and amortization

$

3.2

 

 

$

3.2

 

 

$

6.3

 

 

$

6.4

 

Interest on lease liabilities

Interest expense

 

1.3

 

 

 

1.5

 

 

 

2.7

 

 

 

3.1

 

Total finance lease costs

 

$

4.5

 

 

$

4.7

 

 

$

9.0

 

 

$

9.5

 

(1)
Includes approximately $0.9 and $0.3 of short-term lease payments for the three months ended June 30, 2022 and 2021, respectively. Includes approximately $1.4 and $0.6 of short-term lease payments for the six months ended June 30, 2022 and 2021, respectively.
(2)
Includes approximately $12.2 and $0.4 of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenue or attendance and variable common area maintenance costs for the three months ended June 30, 2022 and 2021, respectively. Includes approximately $18.1 and $(1.9) of variable lease payments based on a change in index, such as CPI or inflation, variable payments based on revenue or attendance and variable common area maintenance costs for the six months ended June 30, 2022 and 2021, respectively.
(3)
Approximately $0.4 and $0.2 of lease payments are included in general and administrative expense primarily related to office leases for the three months ended June 30, 2022 and 2021, respectively. Approximately $0.7 and $0.6 of lease payments are included in general and administrative expense primarily related to office leases for the six months ended June 30, 2022 and 2021, respectively.

The following table represents the minimum cash lease payments included in the measurement of lease liabilities and the non-cash addition of lease right-of-use assets for the periods presented.

 

 

Six Months Ended

 

 

 

June 30,

 

Other Information

 

2022

 

 

2021

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

 

 

 

Cash outflows for operating leases

 

$

139.1

 

 

$

133.6

 

Cash outflows for finance leases - operating activities

 

$

2.7

 

 

$

3.1

 

Cash outflows for finance leases - financing activities

 

$

7.2

 

 

$

7.3

 

Non-cash amount of right-of-use assets obtained in exchange for:

 

 

 

 

 

 

Operating lease liability additions, net of write-offs

 

$

57.0

 

 

$

55.2

 

As of June 30, 2022, the Company had signed lease agreements with total noncancelable lease payments of approximately $69.8 related to theatre leases that had not yet commenced. The timing of lease commencement is dependent on the completion of construction of the related theatre facility. Additionally, these amounts are based on estimated square footage and costs to construct each facility and may be subject to adjustment upon final completion of each construction project. In accordance with ASC Topic 842, fixed minimum lease payments related to these theatres are not included in the right-of-use assets and lease liabilities as of June 30, 2022.