LEASES

3 Months Ended

Mar. 31, 2020

Leasing Guidance

The Company recognizes the assets and liabilities that arise from leases on the commencement date of the lease. The Company recognizes the liability to make lease payments as a lease liability as well as a right-of-use ("ROU") asset representing the right to use the underlying asset for the lease term, on the condensed consolidated balance sheet.

Leasing Transactions

The Company’s leased assets primarily include real estate, broadcasting towers and equipment. The Company’s leases have remaining lease terms of less than 1 year up to 30 years, some of which include one or more options to extend the leases, with renewal terms up to fifteen years and some of which include options to terminate the leases within the next year. Many of the Company’s leases include options to extend the terms of the agreements. Generally, renewal options are excluded when calculating the lease liabilities, as the Company does not consider the exercise of such options to be reasonably certain. Unless a renewal option is considered reasonably assured, the optional terms and related payments are not included within the lease liability. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company’s operating leases are reflected on the Company’s balance sheet within the operating lease right-of-use assets line item and the related current and non-current liabilities are included within the operating lease liabilities and operating lease liabilities, net of current portion line items, respectively. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from leases. Operating lease ROU assets and liabilities are recognized at commencement date based upon the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term.

As the rate implicit in the lease is not readily determinable for the Company’s operating leases, the Company generally uses an incremental borrowing rate based upon information available at the commencement date to determine the present value of future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in similar economic environment. In order to measure the operating lease liability and determine the present value of lease payments, the Company estimated what the incremental borrowing rate was for each lease using an applicable treasury rate compatible to the remaining life of the lease and the applicable margin for the Company’s revolving credit facility (the "Revolver").

In determining whether a contract is or contains a lease at inception of a contract, the Company considers all relevant facts and circumstances, including whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. This consideration involves judgment with respect to whether the Company has the right to obtain substantially all of the economic benefits from the use of the identified asset and whether the Company has the right to direct the use of the identified asset.

On January 1, 2019, the Company implemented the new leasing guidance using a modified retrospective approach with a cumulative-effect adjustment to its accumulated deficit of $4.7 million, net of taxes of $1.7 million. This adjustment was attributable to the recognition of deferred gains from sale and leaseback transactions under the previous accounting guidance for leases.

Practical Expedients

The Company elected the practical expedient which allows it to: (i) apply the new lease requirements at the effective date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption; (ii) continue to report comparative periods presented in the financial statements in the period of adoption under the former U.S. GAAP; and (iii) provide the required disclosures under former U.S. GAAP for all periods presented under former U.S. GAAP.

The Company elected the package of practical expedients, which were applied consistently to all of its leases, and enable it to not reassess: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases.

As a practical expedient, the Company may choose not to separate nonlease components from lease components as an accounting policy election by class of underlying asset. The Company elected this practical expedient by all classes of underlying assets in instances where leases contain common area maintenance. In certain leases, the right to control the use of an asset that meets the lease criteria is combined with the related common area maintenance services provided under the contract into a single lease component.

As an accounting policy election, the Company elected not to apply the recognition requirements to short-term leases for all underlying classes of assets. For these leases which have a term of twelve months or less at lease inception, the Company will recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for these payments is incurred.

Lease Expense

The components of lease expense were as follows:


	Three Months Ended March 31,
Lease Cost	2020		2019
	(amounts in thousands)
Operating lease cost	$	12,146	$	12,468
Variable lease cost	2,767		2,052
Short-term lease cost	—		98
Total lease cost	$	14,913	$	14,618

Supplemental Cash Flow

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
Description	2020		2019
	(amounts in thousands)
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	$	12,997	$	13,109
Right-of-use assets obtained in exchange for lease obligations
Operating leases⁽¹⁾	$	701	$	307,618

(1)ROU assets obtained in exchange for lease obligations in 2019 include transition liabilities upon implementation of the amended leasing guidance, as well as new leases entered into during the three months ended March 31, 2019.

Balance Sheet

Supplemental balance sheet information related to leases was as follows:


Description	March 31, 2020		December 31, 2019
	(amounts in thousands)
Operating Leases
Operating leases right-of-use assets	$	248,501	$	259,613

Operating lease liabilities (current)	$	34,539	$	35,335
Operating lease liabilities (noncurrent)	243,806		253,346
Total operating lease liabilities	$	278,345	$	288,681


Weighted Average Remaining Lease Term
Operating leases	8 years		8 years

Weighted Average Discount Rate
Operating leases	4.9	%	4.9	%

Maturities

The aggregate maturities of the Company’s lease liabilities as of March 31, 2020 are as follows:


	Lease Maturities
	Operating Leases
	(amounts in thousands)
Years ending December 31:
Remainder of 2020	$	36,204
2021	49,825
2022	44,131
2023	40,427
2024	37,152
Thereafter	133,504
Total lease payments	$	341,243
Less: imputed interest	$	(62,898)
Total	$	278,345

As of March 31, 2020, the Company has not entered into any leases that have not yet commenced.

The aggregate maturities of the Company’s lease liabilities as of December 31, 2019, were as follows:


	Lease Maturities
	Operating Leases
	(amounts in thousands)
Years ending December 31:
2020	$	49,298
2021	49,550
2022	44,250
2023	40,549
2024	37,284
Thereafter	134,071
Total lease payments	$	355,002
Less: imputed interest	$	(66,321)
Total	$	288,681