LEASES

12 Months Ended

Dec. 31, 2021

LEASES

LEASES

4. LEASES

Impact of Adoption

The Company adopted ASC 842 on January 1, 2019, utilizing the optional transition method with a cumulative adjustment on the date of adoption. Under this approach, the guidance was applied to leases that had commenced as of January 1, 2019 with a cumulative effect adjustment as of that date and prior periods were not adjusted. Upon adoption, the Company recognized an operating lease ROU asset of $70.8 million, a short-term lease liability of $8.2 million, and a long-term lease liability of $61.2 million. The adoption had no impact on retained earnings or other components of equity.

The Company elected the package of practical expedients. Under the package of practical expedients, for existing leases, the Company does not reassess: i) whether the arrangement contains a lease; ii) lease classification and; iii) initial direct costs.

The Company has operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity. The lease terms are generally between 3 and 10 years, some of which include additional renewal options.

Supplemental lease information

The components of lease expense were as follows (in thousands):

	December 31, 2021		December 31, 2020
Operating lease cost:
Operating lease cost	$	20,386	$	16,409
Short-term lease cost		2,402		2,712
Variable lease cost		3,874		4,059
Total operating lease cost	$	26,662	$	23,180
Finance lease cost:
Amortization of right-of-use asset	$	2,561	$	2,181
Variable costs		792		852
Total finance lease cost	$	3,353	$	3,033

During the year ended December 31, 2021 and December 31, 2020, the Company paid $19.4 million and $16.1 million, respectively, related to operating lease liabilities. Also during the years ended December 31, 2021 and December 31, 2020, the Company recorded $11.8 million and $7.8 million, respectively, of lease liabilities arising from ROU assets. In addition, the Company acquired $60.4 million of operating lease right of use assets and $46.7 million of lease liabilities as part of the Alaska Transaction. Refer to Note 5.

At December 31, 2021, finance leases with a cost of $30.8 million and accumulated amortization of $12.1 million were included in property, plant and equipment. During the year ended December 31, 2021, the Company paid $2.2 million for finance lease liabilities and recorded $2.9 million of additional finance lease liabilities. At December 31, 2021, finance leases had a lease liability of $6.1 million, of which $0.9 million was current. At December 31, 2020, finance leases with a cost of $25.4 million and accumulated amortization of $9.5 million were included in property, plant and equipment.

The weighted average remaining lease terms and discount rates as of December 31, 2021 and December 31, 2020 are noted in the table below:

	December 31, 2021		December 31, 2020
Weighted-average remaining lease term
Operating leases		11.3 years		5.9 years
Financing leases		9.5 years		10.9 years
Weighted-average discount rate
Operating leases		5.4%		5.0%
Financing leases		6.4%		3.3%

Maturities of lease liabilities as of December 31, 2021 were as follows (in thousands):

	Operating Leases		Financing Leases
2022	$	20,474	$	1,269
2023		17,941		1,278
2024		16,634		1,169
2025		13,640		975
2026		9,610		484
Thereafter		65,902		3,145
Total lease payments		144,201		8,320
Less imputed interest		(42,333)		(2,268)
Total	$	101,868	$	6,052

Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):

	Operating Leases		Financing Leases
2021	$	14,877	$	334
2022		14,202		333
2023		11,799		333
2024		10,633		211
2025		7,816		—
Thereafter		13,094		—
Total lease payments		72,421		1,211
Less imputed interest		(10,097)		(82)
Total	$	62,324	$	1,129

As of December 31, 2021, the Company did not have any material operating or finance leases that have not yet commenced.