LEASES

3 Months Ended

Mar. 31, 2020

LEASES

LEASES

4. LEASES

The Company adopted ASC 842 on January 1, 2019, utilizing the optional transition method with a cumulative adjustment on the date of adoption. Under this approach, the guidance was applied to leases that had commenced as of January 1, 2019 with a cumulative effect adjustment as of that date and prior periods were not adjusted. Upon adoption, the Company recognized an operating lease right-of-use (“ROU”) asset of $70.8 million, a short-term lease liability of $8.2 million, and a long-term lease liability of $61.2 million. The adoption had no impact on retained earnings or other components of equity.

The Company elected the package of practical expedients. Under the package of practical expedients, for existing leases, the Company does not reassess: i) whether the arrangement contains a lease; ii) lease classification and; iii) initial direct costs.

The Company has operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity. The lease terms are generally between three and ten years, some of which include additional renewal options.

Supplemental lease information

The components of lease expense were as follows (in thousands):

	Three months ended March 31, 2020		Three months ended March 31, 2019
Operating lease cost:
Operating lease cost	$	4,047	$	3,516
Short-term lease cost		543		713
Variable lease cost		803		961
Total operating lease cost	$	5,393	$	5,190
Finance lease cost:
Amortization of right-of-use asset	$	571	$	593
Variable costs		272		296
Total finance lease cost	$	843	$	889

During the three months ended March 31, 2020 and 2019, the Company paid $3.5 million and $3.2 million, respectively, related to lease liabilities. During the three months ended March 31, 2020 the Company did not record any additional lease liabilities arising from ROU assets. During the three months ended March 31, 2019, the Company recorded $0.2 million of lease liabilities arising from ROU assets. At March 31, 2020, finance leases with a cost of $26.3 million and accumulated amortization of $10.0 million were included in property, plant and equipment. At December 31, 2019, finance leases with a cost of $25.9 million and accumulated amortization of $9.4 million were included in property, plant and equipment.

The weighted average remaining lease terms and discount rates as of March 31, 2020 and December 31, 2019 are noted in the table below:

	March 31, 2020		December 31, 2019
Weighted-average remaining lease term
Operating leases		6.4 years		6.5 years
Financing leases		11.7 years		11.7 years
Weighted-average discount rate
Operating leases		5.1%		5.0%
Financing leases		n/a		n/a

Maturities of lease liabilities as of March 31, 2020 were as follows (in thousands):

	Operating Leases
2020 (excluding the three months ended March 31, 2020)	$	11,097
2021		13,748
2022		12,773
2023		10,561
2024		9,532
Thereafter		18,572
Total lease payments		76,283
Less imputed interest		(11,384)
Total	$	64,899

Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):

	Operating Leases
2020	$	14,526
2021		13,714
2022		12,787
2023		10,713
2024		9,671
Thereafter		18,355
Total lease payments		79,766
Less imputed interest		(12,195)
Total	$	67,571

As of March 31, 2020, the Company did not have any material operating or finance leases that have not yet commenced.