Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Components of Lease Income

The components of lease income for the three and six months ended June 30, 2019 are as follows:

(Thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Lease income - operating leases	$	185,666	$	371,724

Lease Payments to be Received under Non-Cancellable Operating Leases

Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms are as follows:

(Thousands)	June 30, 2019 (1)		December 31, 2018 (2)
2019	$	351,179	$	724,269
2020		705,063		693,596
2021		708,110		696,713
2022		710,922		699,561
2023		713,902		702,663
Thereafter		4,761,525		4,706,951
Total lease receivables	$	7,950,701	$	8,223,753
(1) Total future minimum lease payments to be received include $7.3 billion relating to the Master Lease with Windstream.
(2) Prior period amounts have not been adjusted under the modified retrospective transition approach.

Schedule of Underlying Assets under Operating Leases

The underlying assets under operating leases where we are the lessor as of June 30, 2019 are summarized as follows:

(Thousands)	June 30, 2019
Land	$	26,672
Building and improvements		332,158
Real property interest		-
Poles		255,103
Fiber		2,594,530
Equipment		202
Copper		3,756,760
Conduit		89,768
Tower assets		127,289
Capital lease assets		10,276
Other assets		26,581
		7,219,339
Less:  accumulated depreciation		(4,889,425	)
Underlying assets under operating leases, net	$	2,329,914

Schedule of Depreciation Expense for Underlying Assets under Operating Leases

Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and six months ended June 30, 2019 is summarized as follows:

(Thousands)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Depreciation expense for underlying assets under operating leases	$	75,093	$	151,367

Components of Lease Cost

The components of lease cost for the three and six months ended June 30, 2019 are as follows:

(Thousands)	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Finance lease cost
Amortization of ROU assets	$	890		$	1,896
Interest on lease liabilities		552			1,621
Total finance lease cost		1,442			3,517
Operating lease cost		6,667			13,254
Short-term lease cost		467			929
Variable lease cost		138			257
Less sublease income		(2,633	)		(5,378	)
Total lease cost	$	6,081		$	12,579

Summary of Amounts Reported in Condensed Consolidated Balance Sheets for Leases

Amounts reported in the Condensed Consolidated Balance Sheets for leases where we are the lessee as of June 30, 2019 were as follows:

(Thousands)	Location on Condensed Consolidated Balance Sheets	June 30, 2019
Operating leases
ROU asset	Other assets, net	$	100,227
ROU liability	Accounts payable, accrued expenses and other liabilities, net		107,199
Finance leases
ROU asset	Property, plant and equipment, net	$	128,530
ROU liability	Finance lease obligations		55,444
Weighted-average remaining lease term
Operating leases		10.0 years
Finance leases		14.1 years
Weighted-average discount rate
Operating leases			9.5	%
Finance leases			8.1	%

Schedule of Other Information Related to Leases

Other information related to leases as of June 30, 2019 are as follows:

(Thousands)	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	1,621
Operating cash flows from operating leases		13,426
Financing cash flows from finance leases		1,896
Non-cash items:
New operating leases	$	12,621
New finance leases		2,683

Future Lease Payments Under Non-Cancellable Operating and Finance Leases

Future lease payments under non-cancellable leases as of June 30, 2019 are as follows:

(Thousands)	Operating Leases (1)			Finance Leases (1)
2019	$	11,890		$	4,211
2020		22,922			7,588
2021		20,983			6,829
2022		18,538			6,697
2023		16,333			6,681
Thereafter		86,345			57,330
Total undiscounted lease payments	$	177,011		$	89,336
Less:  imputed interest		(69,812	)		(33,892	)
Total lease liabilities	$	107,199		$	55,444
(1) Amounts are exclusive of lease arrangements that are classified in Liabilities Held for Sale.

Schedule of Future Minimum Rental Payments Under Non-cancellable Operating Leases

Future minimum rental payments under non-cancellable operating leases as of December 31, 2018⁽¹⁾ were as follows:

(Thousands)
2019	$	10,585
2020		7,543
2021		4,815
2022		3,186
2023		2,382
Thereafter		15,269
Total	$	43,780
(1) Prior period amounts have not been adjusted under the modified retrospective transition approach.

Schedule of Future Minimum Rental Payments Under Capital Leases

Future minimum rental payments under capital leases in effect as of December 31, 2018⁽¹⁾ were as follows:

(Thousands)
2019	$	8,683
2020		7,357
2021		6,638
2022		6,484
2023		6,457
Thereafter		52,533
Total minimum payments		88,152
Less amount representing interest		(32,870	)
Total	$	55,282
(1) Prior period amounts have not been adjusted under the modified retrospective transition approach.

Future Sublease Rentals

Future sublease rentals as of June 30, 2019 are as follows:

(Thousands)	Sublease Rentals
2019	$	4,158
2020		8,966
2021		8,992
2022		9,019
2023		9,046
Thereafter		95,785
Total	$	135,966