Quarterly report pursuant to Section 13 or 15(d)

Operating and Finance Lease Right-of-Use Assets

v3.23.1
Operating and Finance Lease Right-of-Use Assets
3 Months Ended
Mar. 31, 2023
Leases [Abstract]  
Operating and Finance Lease Right-of-Use Assets
NOTE 7. OPERATING AND FINANCE LEASE
RIGHT-OF-USE
ASSETS
Leasing Transactions
Our leased assets include offices and studios, transmitter locations, antenna sites, towers, tower sites, and land. Our lease portfolio has remaining terms ranging from less than
one-year
up to
twenty-six
years. Many of these leases contain options to extend the term from five to twenty years, the exercise of which is at our sole discretion. 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 properties from our principal stockholders or from trusts and partnerships created for the benefit of our principal stockholders and their families. These leases are designated as Related Party leases in the details provided. We are obligated to pay taxes, insurance, and common area maintenance charges under a majority of our lease agreements.
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 the 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 lease terms. Variable lease costs, such as common area maintenance, property taxes and insurance, are expensed as incurred.
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:
 
    
March 31, 2023
 
    
(Dollars in thousands)
 
Operating Leases
   Related Party      Other      Total  
Operating leases ROU assets
   $ 8,409      $ 35,867      $ 44,276  
Operating lease liabilities (current)
   $ 996      $ 7,442      $ 8,438  
Operating lease liabilities
(non-current)
     7,549        34,960        42,509  
    
 
 
    
 
 
    
 
 
 
Total operating lease liabilities
   $ 8,545      $ 42,402      $ 50,947  
    
 
 
    
 
 
    
 
 
 
 
Weighted Average Remaining Lease Term
        
Operating leases
     7.4 years  
Finance leases
     2.5 years  
Weighted Average Discount Rate
        
Operating leases
     8.43%  
Finance leases
     6.97%  
Lease Expense
The components of lease expense were as follows:
 
    
Three Months Ended
March 31, 2023
 
    
(Dollars in thousands)
 
Amortization of finance lease ROU Assets
   $ 11  
Interest on finance lease liabilities
     1  
    
 
 
 
Finance lease expense
     12  
Operating lease expense
     3,285  
Variable lease expense
     398  
Short-term lease expense
     136  
    
 
 
 
Total lease expense
   $ 3,831  
    
 
 
 
Supplemental Cash Flow
Supplemental cash flow information related to leases was as follows:
 
    
Three Months Ended
March 31, 2023
 
    
(Dollars in thousands)
 
Cash paid for amounts included in the measurement of lease liabilities:
        
Operating cash flows from operating leases
   $ 3,540  
Operating cash flows from finance leases
     1  
Financing cash flows from finance leases
     15  
Leased assets obtained in exchange for new operating lease liabilities
   $ 3,125  
Leased assets obtained in exchange for new finance lease liabilities
     —    
Maturities
Future minimum lease payments under leases that had initial or remaining
non-cancelable
lease terms in excess of one year as of March 31, 2023, are as follows:
 
 
Future minimum lease payments required under leases that have initial or remaining non-
cancelable lease terms in excess of one year as of March 31, 2020, are as follows:
   Operating Leases              
     Related Party     Other     Total     Finance Leases     Total  
                                
    
(Dollars in thousands)
 
2023
(Apr-Dec)
   $ 1,700     $ 11,011     $ 12,711     $ 40     $ 12,751  
2024
     1,860       10,018       11,878       19       11,897  
2025
     1,895       8,864       10,759       11       10,770  
2026
     1,701       6,776       8,477       3       8,480  
2027
     1,223       3,858       5,081       1       5,082  
Thereafter
     1,082       23,207       24,289       —         24,289  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Undiscounted Cash Flows
   $ 9,461     $ 63,734     $ 73,195     $ 74     $ 73,269  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Less: imputed interest
     (916     (21,332     (22,248     (6     (22,254
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
$
8,545
 
 
$
42,402
 
 
$
50,947
 
 
$
68
 
 
$
51,015
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Reconciliation to lease liabilities:
                                        
Lease liabilities – current
   $ 996     $ 7,442     $ 8,438     $ 37     $ 8,475  
Lease liabilities – long-term
     7,549       34,960       42,509       31       42,540  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total Lease Liabilities
  
$
8,545
 
 
$
42,402
 
 
$
50,947
 
 
$
68
 
 
$
51,015