Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

General

We enter into operating and finance leases for network equipment, real estate, mobile site sharing and vehicles. We provide residual value guarantees on certain of our vehicle leases.

Lease Balances

A summary of our ROU assets and lease liabilities is set forth below:

	September 30, 2023		December 31, 2022
	in millions
ROU assets:
Finance leases (a)	$	57.7	$	377.6
Operating leases (b)	1,658.5		1,724.4
Total ROU assets	$	1,716.2	$	2,102.0
Lease liabilities:
Finance leases (c)	$	56.1	$	436.1
Operating leases (d)	1,703.9		1,791.1
Total lease liabilities	$	1,760.0	$	2,227.2

_______________

(a)Our finance lease ROU assets are included in property and equipment, net, on our condensed consolidated balance sheets. At September 30, 2023, the weighted average remaining lease term for finance leases was 10.8 years and the weighted average discount rate was 4.9%. During the nine months ended September 30, 2023 and 2022, we recorded non-cash additions to our finance lease ROU assets of $20.8 million and $25.8 million, respectively. The decrease in our finance lease ROU assets is primarily related to the Telenet Wyre Transaction. For additional information, see note 4.

(b)Our operating lease ROU assets are included in other assets, net, on our condensed consolidated balance sheets. At September 30, 2023, the weighted average remaining lease term for operating leases was 12.6 years and the weighted average discount rate was 5.8%. During the nine months ended September 30, 2023 and 2022, we recorded non-cash

additions to our operating lease ROU assets of $38.0 million and $670.0 million, respectively. For information regarding non-cash additions to our operating lease ROU assets during the nine months ended September 30, 2022 related to the Telenet Tower Lease Agreement, see note 4.

(c)The current and long-term portions of our finance lease liabilities are included within current portion of debt and finance lease obligations and long-term debt and finance lease obligations, respectively, on our condensed consolidated balance sheets. The decrease in our finance lease liabilities is primarily related to the Telenet Wyre Transaction. For additional information, see note 4.

(d)The current portions of our operating lease liabilities are included within other accrued and current liabilities on our condensed consolidated balance sheets. For information regarding the increase in our operating lease liabilities during the nine months ended September 30, 2022 related to the Telenet Tower Lease Agreement, see note 4.

A summary of our aggregate lease expense is set forth below: 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions
Finance lease expense:
Depreciation and amortization	$	3.1	$	14.7	$	32.4	$	49.5
Interest expense (a)	0.6		6.4		1.5		20.3
Total finance lease expense	3.7		21.1		33.9		69.8
Operating lease expense (b)	50.5		56.1		170.2		168.8
Short-term lease expense (b)	1.1		1.0		3.2		3.1
Variable lease expense (c)	0.4		0.2		1.1		1.7
Total lease expense	$	55.7	$	78.4	$	208.4	$	243.4

_______________

(a)Amounts for the 2023 periods include the reversal of previously recognized interest expense as a result of certain settlements of lease liabilities.

(b)Our operating lease expense and short-term lease expense are included in programming and other direct costs of services, other operating expenses, SG&A expenses and impairment, restructuring and other operating items, net, in our condensed consolidated statements of operations.

(c)Variable lease expense represents payments made to a lessor during the lease term that vary because of a change in circumstance that occurred after the lease commencement date. Variable lease payments are expensed as incurred and are included in other operating expenses in our condensed consolidated statements of operations.

A summary of our cash outflows from operating and finance leases is set forth below: 

	Nine months ended September 30,
	2023		2022
	in millions
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	163.9	$	163.7
Operating cash outflows from finance leases (interest component)	1.5		20.3
Financing cash outflows from finance leases (principal component)	25.3		46.5
Total cash outflows from operating and finance leases	$	190.7	$	230.5

Maturities of our operating and finance lease liabilities as of September 30, 2023 are presented below. Amounts represent U.S. dollar equivalents based on September 30, 2023 exchange rates:

	Operating leases		Finance leases
	in millions
Year ending December 31:
2023 (remainder of year)	$	65.7	$	3.8
2024	221.1		10.6
2025	203.6		9.5
2026	189.4		7.7
2027	180.2		6.8
2028	174.1		4.2
Thereafter	1,360.8		29.5
Total payments	2,394.9		72.1
Less: present value discount	(691.0)		(16.0)
Present value of lease payments	$	1,703.9	$	56.1
Current portion	$	149.6	$	11.7
Long-term portion	$	1,554.3	$	44.4

Leases

Leases

General

We enter into operating and finance leases for network equipment, real estate, mobile site sharing and vehicles. We provide residual value guarantees on certain of our vehicle leases.

Lease Balances

A summary of our ROU assets and lease liabilities is set forth below:

	September 30, 2023		December 31, 2022
	in millions
ROU assets:
Finance leases (a)	$	57.7	$	377.6
Operating leases (b)	1,658.5		1,724.4
Total ROU assets	$	1,716.2	$	2,102.0
Lease liabilities:
Finance leases (c)	$	56.1	$	436.1
Operating leases (d)	1,703.9		1,791.1
Total lease liabilities	$	1,760.0	$	2,227.2

_______________

(a)Our finance lease ROU assets are included in property and equipment, net, on our condensed consolidated balance sheets. At September 30, 2023, the weighted average remaining lease term for finance leases was 10.8 years and the weighted average discount rate was 4.9%. During the nine months ended September 30, 2023 and 2022, we recorded non-cash additions to our finance lease ROU assets of $20.8 million and $25.8 million, respectively. The decrease in our finance lease ROU assets is primarily related to the Telenet Wyre Transaction. For additional information, see note 4.

(b)Our operating lease ROU assets are included in other assets, net, on our condensed consolidated balance sheets. At September 30, 2023, the weighted average remaining lease term for operating leases was 12.6 years and the weighted average discount rate was 5.8%. During the nine months ended September 30, 2023 and 2022, we recorded non-cash

additions to our operating lease ROU assets of $38.0 million and $670.0 million, respectively. For information regarding non-cash additions to our operating lease ROU assets during the nine months ended September 30, 2022 related to the Telenet Tower Lease Agreement, see note 4.

(c)The current and long-term portions of our finance lease liabilities are included within current portion of debt and finance lease obligations and long-term debt and finance lease obligations, respectively, on our condensed consolidated balance sheets. The decrease in our finance lease liabilities is primarily related to the Telenet Wyre Transaction. For additional information, see note 4.

(d)The current portions of our operating lease liabilities are included within other accrued and current liabilities on our condensed consolidated balance sheets. For information regarding the increase in our operating lease liabilities during the nine months ended September 30, 2022 related to the Telenet Tower Lease Agreement, see note 4.

A summary of our aggregate lease expense is set forth below: 

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
	in millions
Finance lease expense:
Depreciation and amortization	$	3.1	$	14.7	$	32.4	$	49.5
Interest expense (a)	0.6		6.4		1.5		20.3
Total finance lease expense	3.7		21.1		33.9		69.8
Operating lease expense (b)	50.5		56.1		170.2		168.8
Short-term lease expense (b)	1.1		1.0		3.2		3.1
Variable lease expense (c)	0.4		0.2		1.1		1.7
Total lease expense	$	55.7	$	78.4	$	208.4	$	243.4

_______________

(a)Amounts for the 2023 periods include the reversal of previously recognized interest expense as a result of certain settlements of lease liabilities.

(b)Our operating lease expense and short-term lease expense are included in programming and other direct costs of services, other operating expenses, SG&A expenses and impairment, restructuring and other operating items, net, in our condensed consolidated statements of operations.

(c)Variable lease expense represents payments made to a lessor during the lease term that vary because of a change in circumstance that occurred after the lease commencement date. Variable lease payments are expensed as incurred and are included in other operating expenses in our condensed consolidated statements of operations.

A summary of our cash outflows from operating and finance leases is set forth below: 

	Nine months ended September 30,
	2023		2022
	in millions
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	163.9	$	163.7
Operating cash outflows from finance leases (interest component)	1.5		20.3
Financing cash outflows from finance leases (principal component)	25.3		46.5
Total cash outflows from operating and finance leases	$	190.7	$	230.5

Maturities of our operating and finance lease liabilities as of September 30, 2023 are presented below. Amounts represent U.S. dollar equivalents based on September 30, 2023 exchange rates:

	Operating leases		Finance leases
	in millions
Year ending December 31:
2023 (remainder of year)	$	65.7	$	3.8
2024	221.1		10.6
2025	203.6		9.5
2026	189.4		7.7
2027	180.2		6.8
2028	174.1		4.2
Thereafter	1,360.8		29.5
Total payments	2,394.9		72.1
Less: present value discount	(691.0)		(16.0)
Present value of lease payments	$	1,703.9	$	56.1
Current portion	$	149.6	$	11.7
Long-term portion	$	1,554.3	$	44.4