Annual report pursuant to Section 13 and 15(d)

PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

v3.19.3.a.u2
PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

The following table summarizes the Company's property and equipment:

 
December 31, 2019
 
December 31, 2018
 
Gross Carrying Amount
 
Accumulated Depreciation
 
Net Carrying Value
 
Gross Carrying Amount
 
Accumulated Depreciation
 
Net Carrying Value
Land
$
6,770

 
$

 
$
6,770

 
$
6,747

 
$

 
$
6,747

Buildings and improvements
147,146

 
(36,349
)
 
110,797

 
78,833

 
(30,540
)
 
48,293

Furniture, fixtures and equipment
52,327

 
(19,484
)
 
32,843

 
26,726

 
(16,729
)
 
9,997

Finance leases - equipment
36,166

 
(16,047
)
 
20,119

 
28,745

 
(12,843
)
 
15,902

Construction in progress
9,112

 

 
9,112

 
51,666

 

 
51,666

Total Property and Equipment
$
251,521

 
$
(71,880
)
 
$
179,641

 
$
192,717

 
$
(60,112
)
 
$
132,605


Depreciation is calculated on a straight line basis using the estimated useful lives detailed in Note 2. Depreciation expense, which included amortization of assets recorded under finance leases, was $19.3 million, $16.0 million and $21.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Below is a summary of the activity related to leased and managed Traditional Golf properties.
Date
 
Location
 
Leased or Managed Property
 
Description
February 2018
 
Oklahoma
 
Leased
 
agreement terminated
June 2018
 
California
 
Leased
 
agreement terminated, 10 year management agreement executed
September 2018
 
Texas
 
Leased
 
agreement terminated
November 2018
 
California
 
Leased
 
agreement expired
December 2018
 
Michigan
 
Managed
 
agreement terminated, course closing
July 2019
 
California
 
Managed
 
agreement executed
October 2019
 
California
 
Managed
 
agreement terminated, course closing
December 2019
 
California
 
Managed
 
agreement terminated, course closing


On March 7, 2018, the Company announced it was actively pursuing the sale of 26 owned Traditional Golf properties in order to generate capital to invest in the growth of the Entertainment Golf business. The assets and associated liabilities are reported on the Consolidated Balance Sheets as “Real estate assets, held-for-sale, net” and “Real estate liabilities, held-for-sale,” respectively. See Note 15 for additional information.

In October 2018, we reclassified a golf property in New Mexico from held-for sale to held-and-used and recorded catch-up depreciation expense.

As of December 31, 2019, the real estate assets, held-for-sale, net are reported at a carrying value of $16.9 million and include $12.6 million of land, $3.9 million of buildings and improvements, $0.2 million of furniture, fixtures and equipment, and $0.2 million of other related assets. The real estate liabilities, held-for-sale include golf course liabilities to be assumed, primarily prepaid membership dues.

Below is a summary of the Traditional Golf properties sold during 2018 and 2019 (in millions).

During the three months ended
 
Number of Golf Properties Sold
 
Sale Price
 
Net Proceeds (A)
 
Transaction Costs
 
Carrying Value
 
Gain (Loss) (B)
 
Management Agreements Executed Subsequent to Sale
September 30, 2018
 
1

 
$
3.5

 
$
3.2

 
$

 
$
3.3

 
$
(0.1
)
 

December 31, 2018 (C)
 
12

 
$
86.2

 
$
73.5

 
$
1.2

 
$
62.7

 
$
10.8

 
8

March 31, 2019 (D)
 
3

 
$
28.7

 
$
25.5

 
$
0.5

 
$
20.3

 
$
5.2

 
1

June 30, 2019 (E)
 
4

 
$
19.7

 
$
17.9

 
$
0.8

 
$
18.3

 
$
(0.4
)
 
1

September 30, 2019
 
1

 
$
12.5

 
$
12.3

 
$
0.2

 
$
5.2

 
$
7.0

 
1

December 31, 2019
 
3

 
$
19.1

 
$
18.6

 
$
0.4

 
$
10.9

 
$
7.7

 
2

(A)
Net proceeds are inclusive of transaction costs.
(B)
The gain (loss) on sale is recorded in other income (loss), net on the Consolidated Statements of Operations.
(C)
The difference between the sales price and the net proceeds was primarily due to prepaid membership dues that we are obligated to remit to the buyer. The Company received proceeds of $75.7 million as of December 31, 2018 and recorded $2.2 million of net payables related to the sales, which was settled in the first quarter of 2019.
(D)
The Company received sale proceeds of $17.7 million during the three months ended March 31, 2019, consisting of $18.2 million for the golf properties sold during the three months ended March 31, 2019, and $2.2 million for golf properties that were sold during December 2018, less $2.7 million that was remitted to buyers for golf properties that were sold during December 2018. The Company previously received a $9.4 million cash deposit in 2018 related to a golf property that was sold in 2019. The difference between the sales price and the net proceeds was primarily due to prepaid membership dues that we are obligated to remit to the buyer, including $2.1 million payable to the buyer of a golf property sold during the three months ended March 31, 2019.
(E)
The Company received sale proceeds of $14.9 million during the three months ended June 30, 2019, consisting of $18.4 million for the golf properties sold during the three months ended June 30, 2019, less $3.5 million that was remitted to buyers for golf properties that were sold in 2018 and the first quarter of 2019.