10.

LEASES

Lease Agreements Under Which the Company is the Lessee

The Company enters into agreements for land, land easements, access rights, IRUs, co-located data centers, buildings, equipment, pole attachments and personal property. These assets are utilized in the provision of broadband and telecommunications services to the Company’s customers. Operating leases are included in operating lease right of use assets and current and noncurrent operating lease liabilities on the consolidated balance sheet. Finance leases are included in property, plant and equipment and current portion of long-term obligations and long-term obligations on the consolidated balance sheet.

Certain leases include a provision for early termination, typically in return for an agreed amount of consideration. Early terminations recorded in the

three

-month period ended

March 31, 2019

were

not

material.

The Company entered into additional operating lease commitments that had

not

yet commenced as of

March 31, 2020

with a present value totaling approximately

$8,928.

These leases consist primarily of a dark fiber IRU agreement with a telecom carrier. The Company will sublease this fiber, with additional fiber of its own, to another carrier. These

two

agreements have a

-year terms and are expected to commence in

2020.

The commitments also include agreements associated with the Company’s CAF Phase II services which are expected to commence in

2020

and have terms of

years.

Short-term and variable lease cost recorded during the

three

-month periods ended

March 31, 2020

and

2019

were

not

material.

The Company did

not

enter into any sale and leaseback transactions during the

three

-month period ended

March 31, 2020.

The following table presents lease costs for agreements under which the Company is the lessee for the

three

-month periods ended

March 31, 2020

and

2019.

	Three Months Ended		Three Months Ended
	March 31, 2020		March 31, 2019

Finance lease cost:
Amortization of right-of-use assets	$	47	$	20
Interest on lease liabilities		67		68
Operating lease costs		1,968		1,955
Total lease cost	$	2,082	$	2,043

The following table provides information included on the consolidated balance sheet for agreements under which the Company is the lessee as of

March 31, 2020

and

December 31, 2019.

	At			At
	March 31, 2020			December 31, 2019

Operating leases:
Right of use assets	$	80,394		$	80,991


Liabilities - current	$	2,902		$	2,795
Liabilities - noncurrent		78,207			78,767
Total liabilities	$	81,109		$	81,562

Finance leases:
Property, plant and equipment	$	5,800		$	5,800
Accumulated depreciation and amortization		(3,746	)		(3,699	)
Property, plant and equipment, net	$	2,054		$	2,101

Current portion of long-term obligations	$	56		$	53
Long-term obligations, net of current portion		2,661			2,676
Total finance lease liabilities	$	2,717		$	2,729

The following table presents the maturities of lease liabilities at

March 31, 2020

twelve

-month increments beginning

April 1, 2020.

	At March 31, 2020
	Operating			Financing
	Leases			Leases

Year 1	$	7,433		$	320
Year 2		7,410			329
Year 3		7,357			338
Year 4		7,116			348
Year 5		6,929			357
Thereafter		157,626			3,383
Total lease payments		193,871			5,075
Less imputed interest		(113,749	)		(2,358	)
Total present value of lease obligations		80,122			2,717
Present value of current obligations		(1,915	)		(56	)
Present value of long-term obligations	$	78,207		$	2,661

The following table presents other information about agreements under which the Company is the lessee for the

three

-month periods ended

March 31, 2020

and

2019

and as of

March 31, 2020.

	Three Months Ended		Three Months Ended
	March 31, 2020		March 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	266	$	68
Operating cash flows from operating leases		1,826		2,276
Financing cash flows from finance leases		52		9

	At			At
	March 31, 2020			March 31, 2019

Weighted-average remaining lease term (in years):
Finance leases		13			14
Operating leases		29			30
Weighted-average discount rate:
Finance leases		9.8	%		9.8	%
Operating leases		6.9	%		6.9	%

Lease Agreements Under Which the Company is the Lessor

The Company’s agreements under which it is the lessor are primarily associated with the use of its network assets, including IRUs for fiber optic cable, colocation and buildings.

Certain leases include a provision for early termination, typically in return for an agreed amount of consideration. There were

early terminations recorded in the

three

-month period ended

March 31, 2020.

The Company does

not

have material sublease arrangements as the lessor or lease arrangements with related parties.

The Company did

not

have sales-type leases or direct financing leases as of

March 31, 2020.

The underlying assets associated with the Company’s operating leases are accounted for under ASC

360,

“

Property, Plant and Equipment.

” The assets are depreciated on a straight-line basis over their estimated useful life, including any periods in which the Company expects to utilize the asset subsequent to termination of the lease.

The following table presents lease income for agreements under which the Company is the lessor for the

three

-month periods ended

March 31, 2020

and

2019.

Lease income is classified as revenue on the Statement of Comprehensive Income. The carrying value of the underlying leased assets is

not

material.

	Three Months Ended		Three Months Ended
	March 31, 2020		March 31, 2019
Total lease income	$	1,171	$	861

The following table presents the maturities of future undiscounted lease payments at

March 31, 2020

twelve

-month increments beginning

April 1, 2020.

	At March 31,
	2020

Year 1	$	1,476
Year 2		987
Year 3		463
Year 4		446
Year 5		412
Thereafter		2,649
Total future undiscounted lease payments	$	6,433