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

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

6 Months Ended

Jun. 30, 2019

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 2 to 6 years 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 and six months ended June 30, 2019 are as follows:



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost
Amortization of right-of-use assets	$	1,529	$	3,046
Interest on lease liabilities	373		619
Total finance lease cost	1,902		3,665

Operating lease cost
Operating lease cost	9,588		18,598
Short-term lease cost	711		1,462
Variable lease cost	4,401		7,173
Total operating lease cost	14,700		27,233

Total lease cost	$	16,602	$	30,898

Other information related to leases included on the Consolidated Balance Sheet as of and for the six months ended June 30, 2019 are as follows:



	Operating Leases		Financing Leases
Right-of-use assets	225,666		22,502
Lease liabilities	211,182		22,908

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows	15,062		420
Financing cash flows	N/A		2,692

Right-of-use assets obtained in exchange for lease liabilities	11,387		10,613

Weighted average remaining lease term	12.7 years		3.7 years
Weighted average discount rate	8.8	%	7.2	%

Future minimum lease payments under non-cancellable leases as of June 30, 2019 are as follows:



	Operating Leases		Financing Leases
July 1, 2019 - December 31, 2019	15,179		5,549
2020	33,736		6,854
2021	32,509		5,409
2022	31,134		3,829
2023	30,962		2,821
Thereafter	229,332		910
Total minimum lease payments	372,852		25,372
Less: imputed interest	161,670		2,464
Total lease liabilities	$	211,182	$	22,908

LEASES

Lease related costs recognized in the Consolidated Statements of Operations for the three and six months ended June 30, 2019 are as follows:



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Finance lease cost
Amortization of right-of-use assets	$	1,529	$	3,046
Interest on lease liabilities	373		619
Total finance lease cost	1,902		3,665

Operating lease cost
Operating lease cost	9,588		18,598
Short-term lease cost	711		1,462
Variable lease cost	4,401		7,173
Total operating lease cost	14,700		27,233

Total lease cost	$	16,602	$	30,898

Other information related to leases included on the Consolidated Balance Sheet as of and for the six months ended June 30, 2019 are as follows:



	Operating Leases		Financing Leases
Right-of-use assets	225,666		22,502
Lease liabilities	211,182		22,908

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows	15,062		420
Financing cash flows	N/A		2,692

Right-of-use assets obtained in exchange for lease liabilities	11,387		10,613

Weighted average remaining lease term	12.7 years		3.7 years
Weighted average discount rate	8.8	%	7.2	%

Future minimum lease payments under non-cancellable leases as of June 30, 2019 are as follows:



	Operating Leases		Financing Leases
July 1, 2019 - December 31, 2019	15,179		5,549
2020	33,736		6,854
2021	32,509		5,409
2022	31,134		3,829
2023	30,962		2,821
Thereafter	229,332		910
Total minimum lease payments	372,852		25,372
Less: imputed interest	161,670		2,464
Total lease liabilities	$	211,182	$	22,908