Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

Leases

During the three months ended June 30, 2023 and 2022, we had operating lease costs of $79,640 and $76,382, respectively, and variable lease costs of $16,153 and $15,671, respectively. During the six months ended June 30, 2023 and 2022, we had operating lease costs of $159,086 and $152,201, respectively, and variable lease costs of $28,528 and $27,875, respectively. These operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). For the three months ended June 30, 2023 and 2022, we recorded a gain of $337 and $429, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. For the six months ended June 30, 2023 and 2022, we recorded a gain of $192 and $469, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. Cash payments of $202,129 and $180,151 were made reducing our operating lease liabilities for the six months ended June 30, 2023 and 2022, respectively, and are included in cash flows provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets ("ROU assets") or lease liabilities for agreements with a term of twelve months or less. We recorded $2,598 and $1,814 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the three months ended June 30, 2023 and 2022, respectively. We recorded $5,008 and $3,551 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the six months ended June 30, 2023 and 2022, respectively.

Our operating leases have a weighted-average remaining lease term of 12.7 years. The weighted-average discount rate of our operating leases is 4.9%. Also, during the periods ended June 30, 2023 and 2022, we obtained $9,910 and $32,492, respectively, of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions.

The following is a summary of the maturities of our operating lease liabilities as of June 30, 2023:

2023	$	107,491
2024	224,989
2025	176,073
2026	150,071
2027	127,195
Thereafter	921,598
Total undiscounted operating lease payments	1,707,417
Less: Imputed interest	(482,444)
Total operating lease liabilities	$	1,224,973

During the three months ended June 30, 2023 and 2022, $713 of amortization expense for each period and $127 and $137 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. During the six months ended June 30, 2023 and 2022, $1,427 of amortization expense for each period and $257 and $277 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. Cash payments of $666 were made reducing our financing lease liabilities for each of the six months ended June 30, 2023 and 2022 and are included in cash flows used in financing activities in the Condensed Consolidated Statements of Cash Flows. Our financing leases have a weighted-average remaining lease term of 4.4 years and a weighted-average discount rate of 3.1%.

Due to our election not to reassess conclusions about lease identification as part of the adoption of ASC 842, Leases, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements do not meet the criteria of a lease under ASC 842, therefore they are no longer accounted for as a lease. For the three months ended June 30, 2023 and 2022, non-lease variable transit payments were $20,320 and $24,241, respectively. For the six months ended June 30, 2023 and 2022, non-lease variable transit payments were $40,638 and $41,519, respectively.

These transit expenses are recorded in direct advertising expenses (exclusive of depreciation and amortization) on the Condensed Consolidated Statements of Income and Comprehensive Income.

Leases

Leases

During the three months ended June 30, 2023 and 2022, we had operating lease costs of $79,640 and $76,382, respectively, and variable lease costs of $16,153 and $15,671, respectively. During the six months ended June 30, 2023 and 2022, we had operating lease costs of $159,086 and $152,201, respectively, and variable lease costs of $28,528 and $27,875, respectively. These operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). For the three months ended June 30, 2023 and 2022, we recorded a gain of $337 and $429, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. For the six months ended June 30, 2023 and 2022, we recorded a gain of $192 and $469, respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. Cash payments of $202,129 and $180,151 were made reducing our operating lease liabilities for the six months ended June 30, 2023 and 2022, respectively, and are included in cash flows provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets ("ROU assets") or lease liabilities for agreements with a term of twelve months or less. We recorded $2,598 and $1,814 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the three months ended June 30, 2023 and 2022, respectively. We recorded $5,008 and $3,551 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the six months ended June 30, 2023 and 2022, respectively.

Our operating leases have a weighted-average remaining lease term of 12.7 years. The weighted-average discount rate of our operating leases is 4.9%. Also, during the periods ended June 30, 2023 and 2022, we obtained $9,910 and $32,492, respectively, of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions.

The following is a summary of the maturities of our operating lease liabilities as of June 30, 2023:

2023	$	107,491
2024	224,989
2025	176,073
2026	150,071
2027	127,195
Thereafter	921,598
Total undiscounted operating lease payments	1,707,417
Less: Imputed interest	(482,444)
Total operating lease liabilities	$	1,224,973

During the three months ended June 30, 2023 and 2022, $713 of amortization expense for each period and $127 and $137 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. During the six months ended June 30, 2023 and 2022, $1,427 of amortization expense for each period and $257 and $277 of interest expense relating to our financing lease liabilities were recorded in depreciation and amortization and interest expense, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. Cash payments of $666 were made reducing our financing lease liabilities for each of the six months ended June 30, 2023 and 2022 and are included in cash flows used in financing activities in the Condensed Consolidated Statements of Cash Flows. Our financing leases have a weighted-average remaining lease term of 4.4 years and a weighted-average discount rate of 3.1%.

Due to our election not to reassess conclusions about lease identification as part of the adoption of ASC 842, Leases, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements do not meet the criteria of a lease under ASC 842, therefore they are no longer accounted for as a lease. For the three months ended June 30, 2023 and 2022, non-lease variable transit payments were $20,320 and $24,241, respectively. For the six months ended June 30, 2023 and 2022, non-lease variable transit payments were $40,638 and $41,519, respectively.

These transit expenses are recorded in direct advertising expenses (exclusive of depreciation and amortization) on the Condensed Consolidated Statements of Income and Comprehensive Income.