Leases

6 Months Ended

Jun. 30, 2019

As described in Note 1, the Company adopted ASU 2016-02 ("ASC 842") effective January 1, 2019 using a modified retrospective approach and elected the practical expedients allowed under the standard.

The Company has entered into various lease agreements both as the lessor and lessee. The leases have been classified as either operating or finance leases in accordance with ASC 842, and primarily consist of leases for land, tower space, office space, certain office equipment and vehicles. The Company also has sublease arrangements that provide a nominal amount of income. A right-of-use asset and lease liability have been recorded on the balance sheet for all leases except those with an original lease term of twelve months or less. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As a lessor, we reserve the rights to the underlying assets in our agreements and do not expect to derive any amounts at the end of the lease terms.

The Company's leases typically have lease terms between five to ten years. Most of these leases include one or more renewal options for periods ranging from one to ten years. At lease commencement, the Company assesses whether it is reasonably certain to exercise a renewal option. Options that are reasonably certain of being exercised are factored into the determination of the lease term, and related payments are included in the calculation of the right-of-use asset and lease liability. The Company assumes that certain tower and land leases will be renewed for one additional term.

The Company estimates the discount rate used to determine the present value of lease payments based on information available at lease commencement.

The following table presents the Company's total right-of-use assets and lease liabilities as of June 30, 2019 (dollars in thousands):



	Balance Sheet Location	June 30, 2019
Right-of-Use Assets
Operating	Operating lease right-of-use assets	$	148,493
Finance, net of accumulated amortization of $211	Other assets	527
Total Assets		$	149,020

Liabilities
Current
Operating	Current portion of operating lease liabilities	$	34,172
Finance	Accounts payable and accrued liabilities	446
Noncurrent
Operating	Operating lease liabilities	115,183
Finance	Other liabilities	81
Total Liabilities		$	149,882

The following table presents the total lease cost for three and six months ended June 30, 2019 (dollars in thousands):



	Statement of Operations Location	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating Lease Cost	Selling, general and administrative expenses; Corporate expenses	$	10,786	$	19,796
Finance Lease Cost
Amortization of right-of-use assets	Depreciation and amortization	108		223
Interest on lease liabilities	Interest expense	11		24
Total Lease Cost		$	10,905	$	20,043

Total lease income related to our lessor arrangements was $0.8 million and $1.5 million for the three and six months ended June 30, 2019.

Other Supplementary Data



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,298	$	10,501
Operating cash flows from finance leases	11		24
Financing cash flows from finance leases	108		223
Financing cash flows from failed sale leaseback	298		596

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,023	$	15,223



	June 30, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	7.80
Finance leases	2.09
Weighted Average Discount Rate
Operating leases	7.5	%
Finance leases	7.5	%

Maturities by year of lease liabilities as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases		Finance Leases		Total
2019 ^(a)	$	17,074	$	205	$	17,279
2020	32,054		217		32,271
2021	25,738		103		25,841
2022	23,231		37		23,268
2023	21,406		6		21,412
Thereafter	82,560		—		82,560
Total lease payments	$	202,063	$	568	$	202,631
Less: interest	52,708		41		52,749
Present value of lease liabilities	$	149,355	$	527	$	149,882

As of December 31, 2018, future minimum lease payments, as defined under the previous lease accounting guidance of ASC Topic 840, under non-cancelable operating leases for the following five fiscal years and thereafter were as follows:



Year Ending December 31:	Future Minimum Rent Under Operating Leases		Future Minimum Sublease Income			Future Minimum Commitments Under Failed Sale Leaseback Agreement		Net Commitments
2019	$	34,356	$	(1,719	)	$	1,193	$	33,830
2020	29,242		(1,719		)	1,557		29,080
2021	22,717					1,603		24,320
2022	19,885					1,650		21,535
2023	16,280					1,701		17,981
Thereafter	45,959					2,052		48,011
	$	168,439	$	(3,438	)	$	9,756	$	174,757

Future minimum payments related to the Company's failed sale-leaseback as of June 30, 2019 were as follows (dollars in thousands):



	Total
2019 ^(a)	$	597
2020	1,557
2021	1,603
2022	1,650
2023	1,701
Thereafter	2,051
Total lease payments	$	9,159

(a) Excludes the six months ended June 30, 2019.

Future minimum payments to be received under the Company's lessor arrangements as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases
2019 ^(a)	$	1,532
2020	3,259
2021	2,603
2022	2,296
2023	1,770
Thereafter	2,893
Total lease receivables	$	14,353

(a) Excludes the six months ended June 30, 2019.

Leases

As described in Note 1, the Company adopted ASU 2016-02 ("ASC 842") effective January 1, 2019 using a modified retrospective approach and elected the practical expedients allowed under the standard.

The Company estimates the discount rate used to determine the present value of lease payments based on information available at lease commencement.

The following table presents the Company's total right-of-use assets and lease liabilities as of June 30, 2019 (dollars in thousands):



	Balance Sheet Location	June 30, 2019
Right-of-Use Assets
Operating	Operating lease right-of-use assets	$	148,493
Finance, net of accumulated amortization of $211	Other assets	527
Total Assets		$	149,020

Liabilities
Current
Operating	Current portion of operating lease liabilities	$	34,172
Finance	Accounts payable and accrued liabilities	446
Noncurrent
Operating	Operating lease liabilities	115,183
Finance	Other liabilities	81
Total Liabilities		$	149,882

The following table presents the total lease cost for three and six months ended June 30, 2019 (dollars in thousands):



	Statement of Operations Location	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating Lease Cost	Selling, general and administrative expenses; Corporate expenses	$	10,786	$	19,796
Finance Lease Cost
Amortization of right-of-use assets	Depreciation and amortization	108		223
Interest on lease liabilities	Interest expense	11		24
Total Lease Cost		$	10,905	$	20,043

Total lease income related to our lessor arrangements was $0.8 million and $1.5 million for the three and six months ended June 30, 2019.

Other Supplementary Data



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	5,298	$	10,501
Operating cash flows from finance leases	11		24
Financing cash flows from finance leases	108		223
Financing cash flows from failed sale leaseback	298		596

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,023	$	15,223



	June 30, 2019
Weighted Average Remaining Lease Term (in years)
Operating leases	7.80
Finance leases	2.09
Weighted Average Discount Rate
Operating leases	7.5	%
Finance leases	7.5	%

Maturities by year of lease liabilities as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases		Finance Leases		Total
2019 ^(a)	$	17,074	$	205	$	17,279
2020	32,054		217		32,271
2021	25,738		103		25,841
2022	23,231		37		23,268
2023	21,406		6		21,412
Thereafter	82,560		—		82,560
Total lease payments	$	202,063	$	568	$	202,631
Less: interest	52,708		41		52,749
Present value of lease liabilities	$	149,355	$	527	$	149,882



Year Ending December 31:	Future Minimum Rent Under Operating Leases		Future Minimum Sublease Income			Future Minimum Commitments Under Failed Sale Leaseback Agreement		Net Commitments
2019	$	34,356	$	(1,719	)	$	1,193	$	33,830
2020	29,242		(1,719		)	1,557		29,080
2021	22,717					1,603		24,320
2022	19,885					1,650		21,535
2023	16,280					1,701		17,981
Thereafter	45,959					2,052		48,011
	$	168,439	$	(3,438	)	$	9,756	$	174,757

Future minimum payments related to the Company's failed sale-leaseback as of June 30, 2019 were as follows (dollars in thousands):



	Total
2019 ^(a)	$	597
2020	1,557
2021	1,603
2022	1,650
2023	1,701
Thereafter	2,051
Total lease payments	$	9,159

(a) Excludes the six months ended June 30, 2019.

Future minimum payments to be received under the Company's lessor arrangements as of June 30, 2019 were as follows (dollars in thousands):



	Operating Leases
2019 ^(a)	$	1,532
2020	3,259
2021	2,603
2022	2,296
2023	1,770
Thereafter	2,893
Total lease receivables	$	14,353

(a) Excludes the six months ended June 30, 2019.