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Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases Leases
The Company is party to various operating leases for production facilities, vehicles and sites upon which advertising structures are built, including our billboard land leases, leases of logo structures and leases of transit advertising space. The leases expire at various dates, have varying options to renew and cancel, and may contain escalation provisions. We expense our non-variable lease payments ratably over the lease term. Also, certain of our leases contain variable lease payments based on percentage of revenue or consumer price index or other inflation-based indices. The variable lease costs are expensed in the period incurred. Due to our election not to reassess conclusions about lease identification, as part of the adoption of ASC 842, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements will not likely meet the criteria of a lease under ASC 842, therefore they will no longer be accounted for as a lease.
Financing lease right of use assets are amortized over the life of the lease which is recorded in depreciation and amortization on the Consolidated Statements of Income and Comprehensive Income. Interest related to financing lease liabilities is recorded in interest expense on the Consolidated Statements of Income and Comprehensive Income.
The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payment to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payment based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.
During the year ended December 31, 2024, we had base operating lease costs of $319,058 and variable operating lease costs of $64,682, for a total operating lease cost of $383,740. During the year ended December 31, 2023, we had base operating lease costs of $311,640 and variable operating lease costs of $60,147, for a total operating lease cost of $371,787. During the year ended December 31, 2022, we had base operating lease costs of $306,825 and variable operating lease costs of $59,651, for a total operating lease cost of $366,476. Our operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). Also, for the years ended December 31, 2024, 2023 and 2022, we recorded a gain of $403, $295 and $824 respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. Cash payments of $320,053, $310,863 and $298,831 were made reducing our operating lease liabilities for the years ended December 31, 2024, 2023 and 2022, respectively, and are included in cash flows provided by operating activities in the Consolidated Statements of Cash Flows.
We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets or lease liabilities for agreements with a term of twelve months or less. We recorded $10,439, $10,189 and $7,478 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the years ended December 31, 2024, 2023 and 2022, respectively.
Our operating leases have a weighted-average remaining lease term of 12.2 years. The weighted-average discount rate of our operating leases is 5.2%. During the years ended December 31, 2024 and 2023, we obtained $24,627 and $24,999,
respectively, of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions. Lease terminations during the year resulted in a $5,068 and $10,635 reduction to operating lease liabilities for the years ended December 31, 2024 and 2023, respectively.
The following is a summary of the maturities of our operating lease liabilities as of December 31, 2024:
2025$257,371 
2026202,651 
2027178,355 
2028153,861 
2029131,753 
Thereafter915,090 
Total undiscounted operating lease payments1,839,081 
Less: Imputed interest(506,566)
Total operating lease liabilities$1,332,515 
During the years ended December 31, 2024 and 2023, we obtained no new leased assets in exchange for new financing lease liabilities. Our financing leases have a weighted-average remaining lease term of 2.9 years and a weighted-average discount rate of 3.1%. For the years ended December 31, 2024, 2023 and 2022, amortization expense of $2,853 was recorded within depreciation and amortization and interest expense of $463, $504 and $544, was recorded within interest expense, respectively, on the Consolidated Statements of Income and Comprehensive Income in relation to these financing lease liabilities. Cash payments of $1,331 were made reducing our financing lease liabilities for the years ended December 31, 2024, 2023 and 2022 and are included in cash flows used in financing activities in the Consolidated Statements of Cash Flows.
Due to our election not to reassess conclusions about lease identification as part of the adoption of ASC 842, Leases, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements do not meet the criteria of a lease under ASC 842, therefore they are no longer accounted for as a lease. For the years ended December 31, 2024, 2023 and 2022, non-lease variable transit expenses were $97,099, $87,688 and $78,877, respectively. These transit expenses are recorded in direct advertising expenses (exclusive of depreciation and amortization) on the Consolidated Statements of Income and Comprehensive Income.
Leases Leases
The Company is party to various operating leases for production facilities, vehicles and sites upon which advertising structures are built, including our billboard land leases, leases of logo structures and leases of transit advertising space. The leases expire at various dates, have varying options to renew and cancel, and may contain escalation provisions. We expense our non-variable lease payments ratably over the lease term. Also, certain of our leases contain variable lease payments based on percentage of revenue or consumer price index or other inflation-based indices. The variable lease costs are expensed in the period incurred. Due to our election not to reassess conclusions about lease identification, as part of the adoption of ASC 842, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements will not likely meet the criteria of a lease under ASC 842, therefore they will no longer be accounted for as a lease.
Financing lease right of use assets are amortized over the life of the lease which is recorded in depreciation and amortization on the Consolidated Statements of Income and Comprehensive Income. Interest related to financing lease liabilities is recorded in interest expense on the Consolidated Statements of Income and Comprehensive Income.
The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payment to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payment based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.
During the year ended December 31, 2024, we had base operating lease costs of $319,058 and variable operating lease costs of $64,682, for a total operating lease cost of $383,740. During the year ended December 31, 2023, we had base operating lease costs of $311,640 and variable operating lease costs of $60,147, for a total operating lease cost of $371,787. During the year ended December 31, 2022, we had base operating lease costs of $306,825 and variable operating lease costs of $59,651, for a total operating lease cost of $366,476. Our operating lease costs are recorded in direct advertising expenses (exclusive of depreciation and amortization). Also, for the years ended December 31, 2024, 2023 and 2022, we recorded a gain of $403, $295 and $824 respectively, in gain on disposition of assets related to the amendment and termination of lease agreements. Cash payments of $320,053, $310,863 and $298,831 were made reducing our operating lease liabilities for the years ended December 31, 2024, 2023 and 2022, respectively, and are included in cash flows provided by operating activities in the Consolidated Statements of Cash Flows.
We elected the short-term lease exemption which applies to certain of our vehicle agreements. This election allows the Company to not recognize lease right of use assets or lease liabilities for agreements with a term of twelve months or less. We recorded $10,439, $10,189 and $7,478 in direct advertising expenses (exclusive of depreciation and amortization) for these agreements during the years ended December 31, 2024, 2023 and 2022, respectively.
Our operating leases have a weighted-average remaining lease term of 12.2 years. The weighted-average discount rate of our operating leases is 5.2%. During the years ended December 31, 2024 and 2023, we obtained $24,627 and $24,999,
respectively, of leased assets in exchange for new operating lease liabilities, which includes liabilities obtained through acquisitions. Lease terminations during the year resulted in a $5,068 and $10,635 reduction to operating lease liabilities for the years ended December 31, 2024 and 2023, respectively.
The following is a summary of the maturities of our operating lease liabilities as of December 31, 2024:
2025$257,371 
2026202,651 
2027178,355 
2028153,861 
2029131,753 
Thereafter915,090 
Total undiscounted operating lease payments1,839,081 
Less: Imputed interest(506,566)
Total operating lease liabilities$1,332,515 
During the years ended December 31, 2024 and 2023, we obtained no new leased assets in exchange for new financing lease liabilities. Our financing leases have a weighted-average remaining lease term of 2.9 years and a weighted-average discount rate of 3.1%. For the years ended December 31, 2024, 2023 and 2022, amortization expense of $2,853 was recorded within depreciation and amortization and interest expense of $463, $504 and $544, was recorded within interest expense, respectively, on the Consolidated Statements of Income and Comprehensive Income in relation to these financing lease liabilities. Cash payments of $1,331 were made reducing our financing lease liabilities for the years ended December 31, 2024, 2023 and 2022 and are included in cash flows used in financing activities in the Consolidated Statements of Cash Flows.
Due to our election not to reassess conclusions about lease identification as part of the adoption of ASC 842, Leases, our transit agreements were accounted for as leases on January 1, 2019. As we enter into new or renew current transit agreements, those agreements do not meet the criteria of a lease under ASC 842, therefore they are no longer accounted for as a lease. For the years ended December 31, 2024, 2023 and 2022, non-lease variable transit expenses were $97,099, $87,688 and $78,877, respectively. These transit expenses are recorded in direct advertising expenses (exclusive of depreciation and amortization) on the Consolidated Statements of Income and Comprehensive Income.