MONARCH CASINO & RESORT INC Leases Disclosure
NOTE 5. ACCOUNTING FOR LEASES
In conformity with ASU No. 2016-02, “Leases (Topic 842), (“ASC 842”)” leases with durations greater than twelve months are recognized on the balance sheet.
For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of the lease payments over the lease term. Certain of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into its determination of lease payments when appropriate. As permitted by ASC 842, the Company elected not to separate non-lease components from their related lease components.
As of December 31, 2025, the Company’s right of use assets consisted of the Parking Lot Lease, the Driveway Lease (both as defined and discussed in Note 12. Related Party Transactions), as well as certain billboard leases.
The table below presents information related to the lease costs for operating leases during 2025, 2024 and 2023 (in thousands):
Year ended December 31, | ||||||||||
2025 | 2024 | 2023 | ||||||||
Short-term lease costs | $ | 167 | $ | — | $ | 297 | ||||
Long-term lease costs |
| 1,579 |
| 1,559 |
| 1,546 | ||||
Total lease costs | $ | 1,746 | $ | 1,559 | $ | 1,843 | ||||
When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of its leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement. Upon adoption of the new lease standard, incremental borrowing rates used for existing leases were established using the rates in effect as of the lease inception or modification date. The weighted-average incremental borrowing rate of the leases presented in the lease liability as of December 31, 2025 and 2024 was 4.35% and 4.34%, respectively.
The weighted-average remaining lease term of the leases presented in the lease liability as of December 31, 2025 and 2024 was 15.7 years and 16.5 years, respectively.
Following is the undiscounted cash flow for the next five years and total of the remaining years to the operating lease liabilities recorded on the balance sheet (in thousands):
Operating | ||||
| Leases |
| ||
Year ending December 31, | ||||
2026 | $ | 1,571 | ||
2027 |
| 1,403 | ||
2028 |
| 1,408 | ||
2029 | 1,380 | |||
2030 | 1,072 | |||
Thereafter |
| 11,580 | ||
Total minimum lease payments | 18,414 | |||
Less: amount of lease payment representing interest | (5,116) | |||
Present value of future minimum payments | 13,298 | |||
Less: current obligations under leases | (1,019) | |||
Long-term lease obligations | $ | 12,279 | ||
Cash paid related to the operating leases presented in the lease liability for the twelve months ended December 31, 2025, 2024 and 2023 were $ 1.6 million, $1.5 million and $1.5 million, respectively.
In addition, we lease gaming equipment and paid $3.4 million, $2.9 million and $2.7 million in the years ended December 31, 2025, 2024 and 2023, respectively. The lease cost is included in the casino operating expenses.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Mar 14, 2017 | |
| 2015 | Mar 11, 2016 | |
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.