Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

Lessor Accounting

We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Lease income - operating leases	$	224,562	$	211,089	$	668,754	$	622,408

Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows:

(Thousands)	September 30, 2022⁽¹⁾
2022	$	191,496
2023	777,937
2024	784,400
2025	785,568
2026	787,169
Thereafter	3,066,497
Total lease receivables	$	6,393,067
(1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases.

The underlying assets under operating leases where we are the lessor are summarized as follows:

(Thousands)	September 30, 2022		December 31, 2021
Land	$	26,550	$	26,593
Building and improvements	344,836		343,624
Poles	293,504		281,130
Fiber	3,465,878		3,278,276
Equipment	428		428
Copper	3,955,180		3,918,281
Conduit	89,925		89,859
Tower assets	1,397		1,397
Finance lease assets	28,126		28,126
Other assets	10,434		10,649
	8,216,258		7,978,363
Less: accumulated depreciation	(5,502,245)		(5,391,479)
Underlying assets under operating leases, net	$	2,714,013	$	2,586,884

Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Depreciation expense for underlying assets under operating leases	$	44,127	$	44,763	$	130,858	$	134,783

Lessee Accounting

We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years, and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million.

Future lease payments under non-cancellable leases as of September 30, 2022 are as follows:

(Thousands)	Operating Leases		Finance Leases
2022	$	4,079	$	625
2023	15,588		2,497
2024	13,201		2,307
2025	10,529		2,254
2026	7,739		2,254
Thereafter	47,463		14,878
Total undiscounted lease payments	$	98,599	$	24,815
Less: imputed interest	(33,918)		(9,246)
Total lease liabilities	$	64,681	$	15,569

Leases

Leases

Lessor Accounting

We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Lease income - operating leases	$	224,562	$	211,089	$	668,754	$	622,408

Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows:

(Thousands)	September 30, 2022⁽¹⁾
2022	$	191,496
2023	777,937
2024	784,400
2025	785,568
2026	787,169
Thereafter	3,066,497
Total lease receivables	$	6,393,067
(1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases.

The underlying assets under operating leases where we are the lessor are summarized as follows:

(Thousands)	September 30, 2022		December 31, 2021
Land	$	26,550	$	26,593
Building and improvements	344,836		343,624
Poles	293,504		281,130
Fiber	3,465,878		3,278,276
Equipment	428		428
Copper	3,955,180		3,918,281
Conduit	89,925		89,859
Tower assets	1,397		1,397
Finance lease assets	28,126		28,126
Other assets	10,434		10,649
	8,216,258		7,978,363
Less: accumulated depreciation	(5,502,245)		(5,391,479)
Underlying assets under operating leases, net	$	2,714,013	$	2,586,884

Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Depreciation expense for underlying assets under operating leases	$	44,127	$	44,763	$	130,858	$	134,783

Lessee Accounting

We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years, and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million.

Future lease payments under non-cancellable leases as of September 30, 2022 are as follows:

(Thousands)	Operating Leases		Finance Leases
2022	$	4,079	$	625
2023	15,588		2,497
2024	13,201		2,307
2025	10,529		2,254
2026	7,739		2,254
Thereafter	47,463		14,878
Total undiscounted lease payments	$	98,599	$	24,815
Less: imputed interest	(33,918)		(9,246)
Total lease liabilities	$	64,681	$	15,569

Leases

Leases

Lessor Accounting

We lease communications towers, ground, colocation, and dark fiber to tenants under operating leases. Our leases have initial lease terms ranging from less than one year to 35 years, most of which include options to extend or renew the leases for less than one year to 20 years (based on the satisfaction of certain conditions as defined in the lease agreements), and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

The components of lease income for the three and nine months ended September 30, 2022 and 2021, respectively, are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Lease income - operating leases	$	224,562	$	211,089	$	668,754	$	622,408

Lease payments to be received under non-cancellable operating leases where we are the lessor for the remainder of the lease terms as of September 30, 2022 are as follows:

(Thousands)	September 30, 2022⁽¹⁾
2022	$	191,496
2023	777,937
2024	784,400
2025	785,568
2026	787,169
Thereafter	3,066,497
Total lease receivables	$	6,393,067
(1) Total future minimum lease payments to be received include $5.5 billion relating to the Windstream Leases.

The underlying assets under operating leases where we are the lessor are summarized as follows:

(Thousands)	September 30, 2022		December 31, 2021
Land	$	26,550	$	26,593
Building and improvements	344,836		343,624
Poles	293,504		281,130
Fiber	3,465,878		3,278,276
Equipment	428		428
Copper	3,955,180		3,918,281
Conduit	89,925		89,859
Tower assets	1,397		1,397
Finance lease assets	28,126		28,126
Other assets	10,434		10,649
	8,216,258		7,978,363
Less: accumulated depreciation	(5,502,245)		(5,391,479)
Underlying assets under operating leases, net	$	2,714,013	$	2,586,884

Depreciation expense for the underlying assets under operating leases where we are the lessor for the three and nine months ended September 30, 2022 and 2021, respectively, is summarized as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Thousands)	2022		2021		2022		2021
Depreciation expense for underlying assets under operating leases	$	44,127	$	44,763	$	130,858	$	134,783

Lessee Accounting

We have commitments under operating leases for communications towers, ground, colocation, dark fiber lease arrangements and buildings. We also have finance leases for dark fiber lease arrangements. Our leases have initial lease terms ranging from less than one year to 30 years, most of which include options to extend or renew the leases for less than one year to 20 years, and some of which may include options to terminate the leases within one to six months. Certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include fixed payments plus, for some of our leases, variable payments.

As of September 30, 2022, we have short term lease commitments amounting to approximately $2.8 million.

Future lease payments under non-cancellable leases as of September 30, 2022 are as follows:

(Thousands)	Operating Leases		Finance Leases
2022	$	4,079	$	625
2023	15,588		2,497
2024	13,201		2,307
2025	10,529		2,254
2026	7,739		2,254
Thereafter	47,463		14,878
Total undiscounted lease payments	$	98,599	$	24,815
Less: imputed interest	(33,918)		(9,246)
Total lease liabilities	$	64,681	$	15,569