The Company’s leases are considered operating leases and primarily consist of real estate such as office space, broadcasting towers, land and land easements. A Right of Use (“ROU”) asset and lease liability is recognized as of the lease commencement date based on the present value of the future minimum lease payments over the lease term. As the implicit rate for operating leases is not readily determinable, the future minimum lease payments were discounted using an incremental borrowing rate. Due to the Company’s centralized treasury function, the Company applied a portfolio approach to discount its domestic lease obligations using its secured publicly traded U.S. dollar denominated debt instruments interpolating the duration of the debt to the remaining lease term. The incremental borrowing rate for international leases is the interest rate 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 a similar economic environment.

The operating leases are reflected within the consolidated balance sheet as right-of-use assets with the related liability presented as lease liability, current and lease liability, net of current portion. Lease expense is recognized on a straight-line basis over the lease term.

Generally, lease terms include options to renew or extend the lease. Unless the renewal option is considered reasonably certain, the exercise of any such options have been excluded from the calculation of lease liabilities. In addition, as permitted within the guidance, ROU assets and lease liabilities are not recorded for leases within an initial term of one year or less. The Company’s existing leases have remaining terms of less than one year up to 29 years. Certain of the Company’s lease agreements include rental payments based on changes in the consumer price index (“CPI”). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and recognized in the period in which the related obligation was incurred. Lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Certain real estate leases include additional costs such as common area maintenance (non-lease component), as well as property insurance and property taxes. These costs were excluded from future minimum lease payments as they are variable payments. As such, these costs were not part of the calculation of ROU assets and lease liabilities associated with operating leases upon transition.

The Company’s corporate headquarters are located in Santa Monica, California. The Company leases approximately 16,000 square feet of space in the building housing its corporate headquarters under a lease that the Company amended as of February 15, 2022. The lease, as amended, provides that the Company will relocate and expand its corporate headquarters within the same building to a space consisting of approximately 37,506 square feet, at which point the term of the lease will be extended until January 31, 2034, subject to adjustment. The Company expects to complete its relocation in the second half of 2022. The Company also leases approximately 41,000 square feet of space in the building housing its radio network headquarters in Los Angeles, California, under a lease pursuant to which the Company has given notice that it is terminating the lease effective as of September 30, 2022. In respect of this termination, the Company will pay a termination fee of approximately $0.4 million, of which $0.2 million has been paid as of March 31, 2022. The Company intends on moving its personnel in the Los Angeles office to its expanded space in its Santa Monica headquarters.

The types of properties required to support each of the Company’s television and radio stations typically include offices, broadcasting studios and antenna towers where broadcasting transmitters and antenna equipment are located. The majority of the Company’s office, studio and tower facilities are leased pursuant to non-cancelable long-term leases. The Company also owns the buildings and/or land used for office, studio and tower facilities at certain of its television and/or radio properties. The Company owns substantially all of the equipment used in its television and radio broadcasting business

The following table summarizes the expected future payments related to lease liabilities as of March 31, 2022:


(in thousands)
Remainder of 2022	$	6,830
2023		6,062
2024		4,774
2025		4,417
2026		2,909
2027 and thereafter		11,472
Total minimum payments	$	36,464
Less amounts representing interest		(8,151	)
Present value of minimum lease payments		28,313
Less current operating lease liabilities		(6,808	)
Long-term operating lease liabilities	$	21,505

The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of March 31, 2022 were 9.4 years and 6.3%, respectively. The weighted average remaining lease term and the weighted average discount rate used to calculate the Company’s lease liabilities as of March 31, 2021 were 9.7 years and 6.3%, respectively.

The following table summarizes lease payments and supplemental non-cash disclosures:


	Three-Month Period Ended March 31,
(in thousands)	2022		2021
Cash paid for amounts included in lease liabilities:

Operating cash flows from operating leases	$	2,480	$	2,756
Non-cash additions to operating lease assets	$	2,130	$	2,683

The following table summarizes the components of lease expense:


	Three-Month Period		Three-Month Period
	Ended March 31,		Ended March 31,
(in thousands)	2022		2021
Operating lease cost	$	2,165	$	2,153
Variable lease cost		318		128
Short-term lease cost		415		439
Total lease cost	$	2,898	$	2,720

For the three-month period ended March 31, 2022, lease cost of $1.5 million, $1.3 million and $0.1 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively. For the three-month period ended March 31, 2021, lease cost of $1.4 million, $1.2 million and $0.1 million, were recorded to direct operating expenses, selling, general and administrative expenses and corporate expenses, respectively.