Salem Media Group, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Operating and Finance Lease Right-of-Use Assets

Operating and Finance Lease Right-of-Use Assets

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Operating and Finance Lease Right-of-Use Assets

NOTE 6. OPERATING AND FINANCE LEASE

RIGHT-OF-USE

ASSETS

Leasing Transactions

Refer to Footnote 7 – Operating and Finance Lease

Right-Of-Use

Assets of our annual report on Form

10-K

for the year ended December 31, 2022 for a description of our leasing transactions under ASC 842.

Due to the adverse economic impact of the

COVID-19

pandemic, we negotiated with our landlords in early 2020 to obtain rent concessions to improve our short-term liquidity. In accordance with the FASB’s recent Staff Q&A regarding rent concessions related to the effects of the

COVID-19

pandemic, we did not apply the lease modification guidance under FASB ASC Topic 842 to rent concessions that resulted in total payments required under the modified contract were substantially the same as or less than total payments required by the original contract. For qualifying rent abatement concessions, we recorded negative lease expense for abatement during the period of relief. At December 31, 2022, $

0.2

million of the deferred cash payments remained with $

26,000

payable in 2023 and the remainder payable in 2024.

Balance Sheet

Supplemental balance sheet information related to leases is as follows:


	June 30, 2023
	(Dollars in thousands)
Operating Leases	Related Party		Other		Total
Operating leases ROU assets	$	8,846	$	35,701	$	44,547
Operating lease liabilities (current)	$	1,305	$	8,615	$	9,920
Operating lease liabilities (non-current)		7,849		34,531		42,380

Total operating lease liabilities	$	9,154	$	43,146	$	52,300


Weighted Average Remaining Lease Term
Operating leases	7.2 years
Finance leases	2.4 years
Weighted Average Discount Rate
Operating leases	8.52	%
Finance leases	7.74	%

Lease Expense

The components of lease expense were as follows:


	Six Months Ended
	June 30, 2023
	(Dollars in thousands)
Amortization of finance lease ROU Assets	$	21
Interest on finance lease liabilities		3

Finance lease expense		24
Operating lease expense		6,745
Variable lease expense		788
Short-term lease expense		258

Total lease expense	$	7,815

Supplemental Cash Flow

Supplemental cash flow information related to leases was as follows:


	Six Months Ended June 30, 2023
	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,177
Operating cash flows from finance leases		2
Financing cash flows from finance leases		30
Leased assets obtained in exchange for new operating lease liabilities	$	5,747
Leased assets obtained in exchange for new finance lease liabilities		39

Maturities

Future minimum lease payments under leases that had initial or remaining

non-cancelable

lease terms in excess of one year as of June 30, 2023, are as follows:


Future minimum lease	Operating Leases
Future minimum lease	Related Party			Other			Total			Finance Leases			Total

	(Dollars in thousands)
2024 (Jul-Dec)	$	1,698		$	10,324		$	12,022		$	53		$	12,075
2025		2,052			9,885			11,937			25			11,962
2026		2,069			9,185			11,254			16			11,270
2027		1,817			6,387			8,204			7			8,211
2028		1,366			4,251			5,617			1			5,618
Thereafter		3,725			20,223			23,948			—			23,948

Undiscounted Cash Flows	$	12,727		$	60,255		$	72,982		$	102		$	73,084

Less: imputed interest		(3,573	)		(17,109	)		(20,682	)		(9	)		(20,691	)

Total	$	9,154		$	43,146		$	52,300		$	93		$	52,393

Reconciliation to lease liabilities:
Lease liabilities – current	$	1,305		$	8,615		$	9,920		$	50		$	9,970
Lease liabilities – long-term		7,849			34,531			42,380			43			42,423

Total Lease Liabilities	$	9,154		$	43,146		$	52,300		$	93		$	52,393