Quarterly report pursuant to Section 13 or 15(d)

Operating and Finance Lease Right-of-Use Assets

v3.19.2
Operating and Finance Lease Right-of-Use Assets
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Operating and Finance Lease Right-of-Use Assets
NOTE 8. OPERATING AND FINANCE LEASE
RIGHT-OF-USE
ASSETS
Leasing Transactions
Our leased assets include offices and studios, transmitter locations, antenna sites, tower and tower sites or land. Our current lease portfolio has remaining terms from less than
one-year
up to twenty years. Many of these leases contain options under which we can extend the term for five to twenty years. Renewal options are excluded from our calculation of lease liabilities unless we are reasonably assured to exercise the renewal option. Our lease agreements do not contain residual value guarantees or material restrictive covenants. We lease certain property from our principal stockholders or trusts and partnerships created for the benefit of the principal stockholders and their families. These leases are designated as Related Party leases in the details provided.
Operating leases are reflected on our balance sheet within operating lease ROU assets and the related current and
non-current
operating lease liabilities. 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 lease agreement. Operating lease ROU assets and liabilities are recognized at the commencement date, or the date on which the lessor makes the underlying asset available for use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectation regarding the terms. Variable lease costs such as common area maintenance, property taxes and insurance are expensed as incurred.
Balance Sheet
The adoption of ASC 842 resulted in recording a
non-cash
transitional adjustment to operating lease ROU assets and operating lease liabilities of $65.0 million and $74.4 million, respectively. The difference between the operating lease ROU assets and operating lease liabilities at transition represented existing deferred rent expense and prepaid rent that was derecognized upon adoption. During the six month period ended June 30, 2019, we recorded additional ROU assets and corresponding lease liabilities of $1.1 million.
Supplemental balance sheet information related to leases was as follows:
 
   
June 30, 2019
 
   
(Dollars in thousands)
 
    Related Party     Other     Total  
Operating Leases
                       
Operating leases ROU assets
  $ 10,085     $ 51,496     $ 61,581  
Operating lease liabilities (current)
    993       8,658       9,651  
Operating lease liabilities
(non-current)
    9,523       50,468       59,991  
   
 
 
   
 
 
   
 
 
 
Total operating lease liabilities
  $ 10,516     $ 59,126     $ 69,642  
   
 
 
   
 
 
   
 
 
 
 
Weighted Average Remaining Lease Term
       
Operating leases
    9.1 years  
Finance leases
    3.8 years  
Weighted Average Discount Rate
       
Operating leases
    8.14
Finance leases
    4.31
Lease Expense
The components of lease expense were as follows:
 
   
Six Months Ended

June 30, 2019
 
   
(Dollars in thousands)
 
Amortization of finance lease ROU Assets
  $ 55  
Interest on finance lease liabilities
    5  
   
 
 
 
Finance lease expense
    60  
Operating lease expense
    6,969  
Variable lease expense
    472  
Short-term lease expense
    483  
   
 
 
 
Total lease expense
  $ 7,984  
   
 
 
 
 
Supplemental Cash Flow
Supplemental cash flow information related to leases was as follows:
 
   
Six Months Ended

June 30, 2019
 
   
(Dollars in thousands)
 
Cash paid for amounts included in the measurement of lease liabilities:
       
Operating cash flows from operating leases
  $ 7,038  
Operating cash flows from finance leases
    8  
Financing cash flows from finance leases
    43  
Leased assets obtained in exchange for new operating lease liabilities
  $ 1,064  
Leased assets obtained in exchange for new finance lease liabilities
    2  
Maturities
Future minimum lease payments required under leases that have initial or remaining
non-cancelable
lease terms in excess of one year as of June 30, 2019, are as follows:
 
    Operating Leases              
    Related Party     Other     Total     Finance Leases     Total  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
(Dollars in thousands)
 
2019
(July-Dec)
  $ 835     $ 6,342     $ 7,177     $ 41     $ 7,218  
2020
    1,696       12,930       14,626       66       14,692  
2021
    1,701       11,910       13,611       51       13,662  
2022
    1,680       10,323       12,003       43       12,046  
2023
    1,240       9,160       10,400       22       10,422  
Thereafter
    7,519       39,164       46,683       3       46,686  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Undiscounted Cash Flows
 
$
14,671
   
$
89,829
   
$
104,500
   
$
226
   
$
104,726
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Less: imputed interest
    (4,155     (30,703     (34,858     (16     (34,874
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
 
$
10,516
   
$
59,126
   
$
69,642
   
$
210
   
$
69,852
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Reconciliation to lease liabilities:
                                       
Lease liabilities - current
  $ 993     $ 8,658     $ 9,651     $ 69     $ 9,720  
Lease liabilities - long-term
    9,523       50,468       59,991       141       60,132  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total Lease Liabilities
 
$
10,516
   
$
59,126
   
$
69,642
   
$
210
   
$
69,852
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Future minimum lease payments under leases that had initial or remaining
non-cancelable
lease terms in excess of one year as of December 31, 2018, based on the former accounting guidance for leases, were as follows:
 
    Operating Leases              
    Related Party     Other     Total     Finance Leases     Total  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
         
(Dollars in thousands)
 
2019
  $ 1,730     $ 11,633     $ 13,363     $ 58     $ 13,421  
2020
    1,763       11,592       13,355       39       13,394  
2021
    1,767       10,596       12,363       31       12,394  
2022
    1,730       9,490       11,220       27       11,247  
2023
    1,234       8,584       9,818       8       9,826  
Thereafter
    13,364       48,109       61,473       —         61,473  
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
    $ 21,588     $ 100,004     $ 121,592     $  163     $ 121,755