LEASES

9 Months Ended

Sep. 30, 2022

LEASES

LEASES

4. LEASES

Lessee Disclosure

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

Supplemental lease information

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

	Three months ended				Nine months ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Operating lease cost:
Operating lease cost	$	6,061	$	5,921	$	18,398	$	14,395
Short-term lease cost		714		661		1,869		1,798
Variable lease cost		1,010		633		2,456		2,713
Total operating lease cost	$	7,785	$	7,215	$	22,723	$	18,906
Finance lease cost:
Amortization of right-of-use asset	$	742	$	618	$	2,321	$	1,807
Variable costs		209		194		667		586
Interest costs		93		—		290		—
Total finance lease cost	$	1,044	$	812	$	3,278	$	2,393

During the nine month periods ended September 30, 2022 and 2021, the Company paid $16.0 million and $12.7 million, respectively, for operating lease liabilities. During the nine months ended September 30, 2022 and 2021, the Company recorded $6.1 million and $9.4 million, respectively, of operating lease liabilities arising from ROU assets.

At September 30, 2022, finance leases with a cost of $26.6 million and accumulated amortization of $12.7 million were included in property, plant and equipment. During the nine months ended September 30, 2022, the Company paid $0.8 million of financing cash flows and $0.3 million of operating cash flows for finance lease liabilities

and recorded $0.4 million of additional finance lease liabilities. Additionally, during the nine months ended September 30, 2022, the Company disposed of finance leases with a net book value of $2.3 million recording a loss for $1.0 million. At September 30, 2022, finance leases had a lease liability of $5.6 million, of which $1.0 million was current.

During the nine months ended September 30, 2021, the Company recorded $2.3 million of additional finance lease liabilities. 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.

The weighted average remaining lease terms and discount rates as of September 30, 2022 and December 31, 2021 are noted in the table below:

	September 30, 2022		December 31, 2021
Weighted-average remaining lease term
Operating leases		11.0 years		11.3 years
Financing leases		9.4 years		9.5 years
Weighted-average discount rate
Operating leases		5.3%		5.4%
Financing leases		6.6%		6.4%

Maturities of lease liabilities as of September 30, 2022 were as follows (in thousands):

	Operating Leases		Financing Leases
2022 (excluding the nine months ended September 30, 2022)	$	6,299	$	333
2023		19,419		1,337
2024		17,492		1,228
2025		14,569		1,030
2026		10,175		539
Thereafter		67,749		3,145
Total lease payments		135,703		7,612
Less imputed interest		(40,428)		(1,999)
Total	$	95,275	$	5,613

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

As of September 30, 2022, the Company did not have any material operating or finance leases that have not yet commenced.

Lessor Disclosure

The Company is the lessor in agreements to lease the use of its network assets including its cell sites and buildings. For the three and nine months ended September 30, 2022 the Company recorded $1.5 million and $4.4 million, respectively, of lease income from agreements in which the Company is the lessor. Lease income is classified as Carrier Services revenue in the statement of operations.

The following table presents the maturities of future undiscounted lease payments for the periods indicated:

2022 (excluding the nine months ended September 30, 2022)	$	1,462
2023		5,384
2024		4,951
2025		4,839
2026		4,503
Thereafter		11,216
Total future lease payments	$	32,355