Accel Entertainment, Inc.ACEL

Accel Entertainment, Inc. Leases Disclosure

10-KFiled Mar 3, 20252 min read
Leases
The Company's lease portfolio has both operating and finance leases but is primarily comprised of operating leases for buildings and vehicles. The Company's leases have remaining lease terms that range from less than 1 to 13 years, some of which also include options to extend or terminate the lease. Most leases contain both fixed and variable payments. Variable costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor.
Lease expense for the years ended December 31 included within general and administrative expenses in the consolidated statements of operations and comprehensive income is follows (in thousands):
202420232022
Operating lease costs
Short-term lease expense$667 $789 $600 
Operating lease expense3,284 2,875 1,586 
Variable lease expense150 316 368 
Total operating lease expense
$4,101 $3,980 $2,554 
Total expense related to finance leases was $0.3 million and less than $0.1 million for the years ended December 31, 2024 and 2023, respectively. There were no finance leases for the year ended December 31, 2022.
Amounts recognized in the consolidated balance sheets related to the Company's lease portfolio as of December 31 are as follows (in thousands):
Lease componentClassification20242023
Operating lease ROU asset
Other assets$8,526 $7,862 
Finance lease ROU asset
Other assets1,115 1,388 
Current operating lease liabilityAccounts payable and other accrued expenses2,721 2,269 
Current finance lease liability
Accounts payable and other accrued expenses245 221 
Long-term operating lease liabilityOther long-term liabilities6,125 5,826 
Long-term finance lease liability
Other long-term liabilities927 1,172 
As of December 31, 2024, the future undiscounted cash flows associated with the Company's lease liabilities were as follows (in thousands):
Operating leases
Finance leases
2025$3,306 $322 
20262,437 329 
20271,494 335 
20281,082 342 
20291,082 29 
Thereafter997 — 
Total$10,398 $1,357 
Less: present value discount(1,552)(185)
Total lease liability
$8,846 $1,172 
The weighted average remaining lease term and discount rate used in computing the lease liabilities as of December 31 were as follows:
202420232022
Weighted average remaining lease term (in years)
Operating leases
4.44.23.4
Finance leases
4.15.1N/A
Weighted average discount rate
Operating leases
6.46 %5.85 %3.28 %
Finance leases
7.71 %7.71 %N/A
Supplemental cash flow information related to leases for the years ended December 31 is as follows (in thousands):
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$3,034 $2,659 $1,525 
Operating cash flows for finance leases
959—
Financing cash flows for finance leases
22117—
Total cash paid for lease liabilities
$3,350 $2,685 $1,525 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases3,383 5,508 5,602 
Finance leases
N/A1,411 N/A

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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