4.   Leases

Operating Leases - Lessee

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Operating lease balances were as follows (in thousands):

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Operating Leases - Lessor

In April 2025, we executed long-term leases for two of our ships. The lease for Norwegian Sky will commence in 2026 and the lease for Norwegian Sun will commence in 2027. Each lease has a term of 10 years and contains a nominal purchase option at the end of each lease term. These leases are expected to be operating leases. The aggregate undiscounted lease payments to be received throughout the terms of the agreements, including variable payments, are expected to be approximately $320 million. Subsequent to September 30, 2025, the two lease agreements signed in March 2025 for Seven Seas Navigator and Oceania Insignia were terminated, and we received a nominal fee.