Drive Shack Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

3 Months Ended

Mar. 31, 2020

The Company's commitments under lease arrangements are primarily ground leases for Entertainment Golf venues and Traditional Golf properties and related facilities, office leases and leases for golf carts and equipment. The majority of lease terms for our Entertainment Golf venues and Traditional Golf properties and related facilities initially range from 10 to 20 years, and include up to eight 5-year renewal options (see Note 13 for additional detail). Equipment and golf cart leases initially range between 24 to 66 months and typically contain renewal options which may be on a month-to-month basis. An option to renew a lease is included in the determination of the ROU asset and lease liability when it is reasonably certain that the renewal option will be exercised.

Lease related costs recognized in the Consolidated Statements of Operations for the three months ended March 31, 2020 are as follows:



	Three Months Ended March 31, 2020
Finance lease cost
Amortization of right-of-use assets	$	1,532
Interest on lease liabilities	341
Total finance lease cost	1,873

Operating lease cost
Operating lease cost	9,267
Short-term lease cost	428
Variable lease cost	2,788
Total operating lease cost	12,483
Total lease cost	$	14,356

Other information related to leases included on the Consolidated Balance Sheet as of and for the three months ended March 31, 2020 are as follows:



	Operating Leases		Financing Leases
Right-of-use assets	212,246		19,214
Lease liabilities	202,988		18,272

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows	8,303		340
Financing cash flows	N/A		1,484

Right-of-use assets obtained in exchange for lease liabilities	2,459		1,028

Weighted average remaining lease term	12.6 years		3.4 years
Weighted average discount rate	8.3	%	7.3	%

Future minimum lease payments under non-cancellable leases as of March 31, 2020 are as follows:



	Operating Leases		Financing Leases
April 1, 2020 - December 31, 2020	24,277		5,508
2021	31,944		6,018
2022	30,673		4,454
2023	30,511		3,434
2024	24,659		1,284
Thereafter	202,618		90
Total minimum lease payments	344,682		20,788
Less: imputed interest	141,694		2,516
Total lease liabilities	$	202,988	$	18,272

LEASES

Lease related costs recognized in the Consolidated Statements of Operations for the three months ended March 31, 2020 are as follows:



	Three Months Ended March 31, 2020
Finance lease cost
Amortization of right-of-use assets	$	1,532
Interest on lease liabilities	341
Total finance lease cost	1,873

Operating lease cost
Operating lease cost	9,267
Short-term lease cost	428
Variable lease cost	2,788
Total operating lease cost	12,483
Total lease cost	$	14,356

Other information related to leases included on the Consolidated Balance Sheet as of and for the three months ended March 31, 2020 are as follows:



	Operating Leases		Financing Leases
Right-of-use assets	212,246		19,214
Lease liabilities	202,988		18,272

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows	8,303		340
Financing cash flows	N/A		1,484

Right-of-use assets obtained in exchange for lease liabilities	2,459		1,028

Weighted average remaining lease term	12.6 years		3.4 years
Weighted average discount rate	8.3	%	7.3	%

Future minimum lease payments under non-cancellable leases as of March 31, 2020 are as follows:



	Operating Leases		Financing Leases
April 1, 2020 - December 31, 2020	24,277		5,508
2021	31,944		6,018
2022	30,673		4,454
2023	30,511		3,434
2024	24,659		1,284
Thereafter	202,618		90
Total minimum lease payments	344,682		20,788
Less: imputed interest	141,694		2,516
Total lease liabilities	$	202,988	$	18,272