Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Leases

We lease various telecommunications sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset.

The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. At March 31, 2021, our operating leases had a weighted average remaining lease term of 22 years and a weighted average discount rate of 4.5%. Our finance leases had a weighted average remaining lease term of 14 years and a weighted average discount rate of 5.2%.

During each of the three months ended March 31, 2021 and 2020, we recognized $1.4 million of operating lease expense. We recognized $0.2 million and $0.1 million of interest and depreciation expense on finance leases during the three months ended March 31, 2021 and 2020, respectively. Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility. Variable lease payments and short-term lease expense were both immaterial. We remitted $1.5 million and $1.0 million of operating lease payments during the three months ended March 31, 2021 and 2020, respectively. We also obtained $2.7 million and $0.3 million of leased assets in exchange for new operating lease liabilities recognized during the three months ended March 31, 2021 and 2020, respectively.

The following table summarizes the expected maturity of lease liabilities at March 31, 2021:

(in thousands)	Operating Leases		Finance Leases		Total
2021	$	3,639	$	107	$	3,746
2022	4,695		175		4,870
2023	4,251		177		4,428
2024	3,894		179		4,073
2025	3,672		181		3,853
2026 and thereafter	65,240		1,551		66,791
Total lease payments	85,391		2,370		87,761
Less: Interest	35,282		695		35,977
Present value of lease liabilities	$	50,109	$	1,675	$	51,784

We recognized $2.4 million and $2.1 million of operating lease revenue during the three months ended March 31, 2021 and 2020, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service and other revenue in the consolidated statements of comprehensive income. Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place at March 31, 2021:

(in thousands)	Operating Leases
2021	$	6,137
2022	7,198
2023	5,668
2024	4,526
2025	3,465
2026 and thereafter	7,109
Total	$	34,103

Leases

Leases

We lease various telecommunications sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset.

The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. At March 31, 2021, our operating leases had a weighted average remaining lease term of 22 years and a weighted average discount rate of 4.5%. Our finance leases had a weighted average remaining lease term of 14 years and a weighted average discount rate of 5.2%.

During each of the three months ended March 31, 2021 and 2020, we recognized $1.4 million of operating lease expense. We recognized $0.2 million and $0.1 million of interest and depreciation expense on finance leases during the three months ended March 31, 2021 and 2020, respectively. Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility. Variable lease payments and short-term lease expense were both immaterial. We remitted $1.5 million and $1.0 million of operating lease payments during the three months ended March 31, 2021 and 2020, respectively. We also obtained $2.7 million and $0.3 million of leased assets in exchange for new operating lease liabilities recognized during the three months ended March 31, 2021 and 2020, respectively.

The following table summarizes the expected maturity of lease liabilities at March 31, 2021:

(in thousands)	Operating Leases		Finance Leases		Total
2021	$	3,639	$	107	$	3,746
2022	4,695		175		4,870
2023	4,251		177		4,428
2024	3,894		179		4,073
2025	3,672		181		3,853
2026 and thereafter	65,240		1,551		66,791
Total lease payments	85,391		2,370		87,761
Less: Interest	35,282		695		35,977
Present value of lease liabilities	$	50,109	$	1,675	$	51,784

We recognized $2.4 million and $2.1 million of operating lease revenue during the three months ended March 31, 2021 and 2020, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service and other revenue in the consolidated statements of comprehensive income. Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place at March 31, 2021:

(in thousands)	Operating Leases
2021	$	6,137
2022	7,198
2023	5,668
2024	4,526
2025	3,465
2026 and thereafter	7,109
Total	$	34,103

Leases

Leases

We lease various telecommunications sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset.

The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. At March 31, 2021, our operating leases had a weighted average remaining lease term of 22 years and a weighted average discount rate of 4.5%. Our finance leases had a weighted average remaining lease term of 14 years and a weighted average discount rate of 5.2%.

During each of the three months ended March 31, 2021 and 2020, we recognized $1.4 million of operating lease expense. We recognized $0.2 million and $0.1 million of interest and depreciation expense on finance leases during the three months ended March 31, 2021 and 2020, respectively. Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility. Variable lease payments and short-term lease expense were both immaterial. We remitted $1.5 million and $1.0 million of operating lease payments during the three months ended March 31, 2021 and 2020, respectively. We also obtained $2.7 million and $0.3 million of leased assets in exchange for new operating lease liabilities recognized during the three months ended March 31, 2021 and 2020, respectively.

The following table summarizes the expected maturity of lease liabilities at March 31, 2021:

(in thousands)	Operating Leases		Finance Leases		Total
2021	$	3,639	$	107	$	3,746
2022	4,695		175		4,870
2023	4,251		177		4,428
2024	3,894		179		4,073
2025	3,672		181		3,853
2026 and thereafter	65,240		1,551		66,791
Total lease payments	85,391		2,370		87,761
Less: Interest	35,282		695		35,977
Present value of lease liabilities	$	50,109	$	1,675	$	51,784

We recognized $2.4 million and $2.1 million of operating lease revenue during the three months ended March 31, 2021 and 2020, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service and other revenue in the consolidated statements of comprehensive income. Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place at March 31, 2021:

(in thousands)	Operating Leases
2021	$	6,137
2022	7,198
2023	5,668
2024	4,526
2025	3,465
2026 and thereafter	7,109
Total	$	34,103