. Leases

Operating Leases

We lease various assets with non-cancellable lease terms that range between

one

and

ninety-nine

years. Many of these leases have optional renewal periods ranging between

one

and

twenty

years. We define the lease term as the original lease base period plus optional renewal periods that we reasonably expect to be exercised. We do

not

include renewal periods exercisable more than

ten

years from the commencement date in the lease term as we cannot reasonably expect to exercise an option that far into the future. Some of our leases have free rent periods, tenant allowances and/or fixed or variable rent escalators. We record operating lease expense on a straight-line basis over the lease term. Operating lease expense is included in operating expenses in our statements of operations.

We lease land, buildings, transmission towers, right of way easements, and equipment through operating leases. We generally lease land for the purpose of erecting transmission towers for our broadcast operations. Our building leases consist of office space and broadcast studios. For transmission towers we do

not

own, we lease space for our transmission equipment on the

third

party towers. We lease right of ways for various purposes including ingress and egress for tower locations and guyed wire space. Our equipment leases consist of office, transmission and production equipment.

We allocate consideration paid in the contract to lease and nonlease components based upon the contract or associate invoice received if applicable. Lease components include base rent, fixed rate escalators and in-substance fixed payments associated with the asset leased. Non-lease components include common area maintenance and operating expenses associated with the leased asset. We have

not

elected the practical expedient to combine lease and nonlease components. As such, we only include the lease component in the calculation of right-of-use asset and lease liability. The incremental borrowing rate we use for the calculation is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term based upon our borrower risk profile.

Variable lease payments are

not

significant and are included in operating lease expense as a component of operating expense in our statement of operations. Variable lease payments are generally associated with usage based leases and variable payment escalators such as consumer price index increases (CPI) incurred after the date of the adoption of ASC

842.

Some of our land leases require us to pay a percentage of the revenue earned from leasing space on the towers we erect on the leased land. We included the payment level of CPI and percentage rent amounts at the time of the adoption of ASC

842

in the base rent for calculating the right-of-use asset and lease liability. CPI adjustments and percentage rent amounts that differ from the amount included in ASC

842

calculation are included in variable lease payments.

We recognize leases with an initial term of

months or less as short-term leases. Lease payments associated with short-term leases are expensed as incurred in our operating lease expense and are

not

included in our calculation of right-of-use assets or lease liabilities. Short-term leases generally consist of rentals of production or broadcast equipment for short periods of time.

As of

March 31, 2019,

the weighted average remaining term of our operating leases was

10.9

years. The weighted average discount rate used to calculate the values associated with our operating leases was

6.75%.

The table below describes the nature of lease expense and classification of operating lease expense recognized in the

three

months ended (in millions):

		Three Months Ended
	Classification	March 31, 2019
Lease expense
Operating lease expense	Operating expenses	$	3
Short-term lease expense	Operating expenses		1
Total lease expense		$	4

The maturities of operating lease liabilities as of

March 31, 2019,

for the remainder of

2019

and the succeeding

years were as follows (in millions):

Year ending December 31,	Operating Leases
Remainder of 2019	$	8
2020		10
2021		9
2022		9
2023		9
Thereafter		57
Total lease payments		102
Less: Imputed interest		(31	)
Present value of lease liabilties	$	71

We had

material capital leases as of

December 31, 2018.

Our aggregate minimum lease payments under operating leases as of

December 31, 2018

were as follows (in millions):

	Operating Leases
2019	$	3
2020		3
2021		3
2022		3
2023		2
Thereafter		12
Total	$	26

Our aggregate lease payments under operating leases as of

December 31, 2018

are based on

ASC

840

that was superseded upon the adoption of

ASC

842

January 1, 2019.

Our maturities of operating lease liabilities as of

March 31, 2019

was significantly higher than our aggregate lease payments under operating leases as of

December 31, 2018

due primarily to our completion of the Raycom Merger on

January 2, 2019.

Financing Leases

We lease certain vehicles through a financing master lease. The weighted average remaining lease term of the vehicles under this lease is

3.4

years. The interest rate for each vehicle leased is

4.5%.

We recorded a right-of-use asset and lease liability of

million, respectively, upon the adoption of ASC

842

related to these financing leases. The right-of-use asset is recorded in other noncurrent assets in our balance sheets. The current portion of the lease liability is recorded as current portion of the financing lease liability in current liabilities and the long term portion is recorded as finance lease liability in noncurrent liabilities in our balance sheets.

Amortization expense associated with this lease is included in amortization expense as a component of operating expense, and interest expense is included in interest expense in our statement of operations. Amortization and interest expenses were

not

material in the

three

months ended

March 31, 2019.

Cash paid for financing leases is included in our cash flows from financing activities and cash paid for interest on financing leases is included in our cash flow from operating activities.

Supplemental Cash Flow Information

Supplemental cash flow information related to leases is as follows (in millions):

	Three Months Ended
	March 31, 2019
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	3

For the

three

months ended

March 31, 2019,

cash paid for amounts included in measurement of liabilities for operating cash flows from finance leases and financing cash flows from finance leases as well as ROU assets obtained in exchange for lease liabilities were

not

material.