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Leases | 12 Months Ended
--- | ---
Dec. 31, 2019
Leases [Abstract] |
Leases | Leases We adopted ASC 842 on January 1, 2019 using the modified retrospective method. We applied the package of practical expedients and, as a result, did not reassess prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In those circumstances where the Company is the lessee, we elected to account for non-lease components associated with our leases (e.g., maintenance costs) and lease components as a single lease component for substantially all of our asset classes. We lease various cell 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 December 31, 2019, our operating leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 4.3%. Our finance leases had a weighted average remaining lease term of fifteen years and a weighted average discount rate of 5.1%. Under the new lease standard, leases are remeasured upon certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard was as follows:
(in thousands) |  | December 31, 2018 As Previously Reported |  | Effect of the Adoption of ASC 842 (Leases) |  | January 1, 2019 As Adjusted
Assets |  |  |  |  |  |
Prepaid expenses and other |  | $ | 60,162 |  |  | $ | (11,580 | ) |  | $ | 48,582 |
Property, plant and equipment, net |  | 701,359 |  |  | 1,789 |  |  | 703,148 |
Operating lease right-of-use assets |  | — |  |  | 369,344 |  |  | 369,344 |
Intangible assets, net |  | 366,029 |  |  | (13,828 | ) |  | 352,201 |
Liabilities |  |  |  |  |  |
Current operating lease liabilities |  | — |  |  | 38,773 |  |  | 38,773 |
Accrued liabilities and other |  | 14,563 |  |  | (412 | ) |  | 14,151 |
Deferred Lease |  | 22,436 |  |  | (22,436 | ) |  | — |
Noncurrent operating lease liabilities |  | — |  |  | 328,156 |  |  | 328,156 |
Other liabilities |  | 14,364 |  |  | 1,644 |  |  | 16,008 |
In addition to recognizing the operating lease liabilities and right-of-use assets, ASC 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. During 2019, we recognized $69.2 million of operating lease expense and $0.6 million of interest and depreciation expense on finance leases. 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 $63.1 million of operating lease payments during 2019. We also obtained $74.8 million of leased assets in exchange for new operating lease liabilities during 2019. The following table summarizes the expected maturity of lease liabilities at December 31, 2019
(in thousands) |  | Operating Leases |  | Finance Leases |  | Total
2020 |  | $ | 59,790 |  |  | $ | 174 |  |  | $ | 59,964 |
2021 |  | 65,556 |  |  | 174 |  |  | 65,730 |
2022 |  | 63,772 |  |  | 174 |  |  | 63,946 |
2023 |  | 60,301 |  |  | 174 |  |  | 60,475 |
2024 |  | 55,644 |  |  | 174 |  |  | 55,818 |
2025 and thereafter |  | 189,857 |  |  | 1,532 |  |  | 191,389 |
Total lease payments |  | 494,920 |  |  | 2,402 |  |  | 497,322 |
Less: Interest |  | 99,914 |  |  | 717 |  |  | 100,631 |
Present value of lease liabilities |  | $ | 395,006 |  |  | $ | 1,685 |  |  | $ | 396,691 |
Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. We recognized $8.1 million of operating lease revenue during 2019 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 December 31, 2019:
(in thousands) |  | Operating Leases
2020 |  | $ | 7,074 |
2021 |  | 4,914 |
2022 |  | 3,902 |
2023 |  | 2,270 |
2024 |  | 1,245 |
2025 and thereafter |  | 3,853 |
Total |  | $ | 23,258 |
Leases | We adopted ASC 842 on January 1, 2019 using the modified retrospective method. We applied the package of practical expedients and, as a result, did not reassess prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In those circumstances where the Company is the lessee, we elected to account for non-lease components associated with our leases (e.g., maintenance costs) and lease components as a single lease component for substantially all of our asset classes. We lease various cell 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 December 31, 2019, our operating leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 4.3%. Our finance leases had a weighted average remaining lease term of fifteen years and a weighted average discount rate of 5.1%. Under the new lease standard, leases are remeasured upon certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard was as follows:
(in thousands) |  | December 31, 2018 As Previously Reported |  | Effect of the Adoption of ASC 842 (Leases) |  | January 1, 2019 As Adjusted
Assets |  |  |  |  |  |
Prepaid expenses and other |  | $ | 60,162 |  |  | $ | (11,580 | ) |  | $ | 48,582 |
Property, plant and equipment, net |  | 701,359 |  |  | 1,789 |  |  | 703,148 |
Operating lease right-of-use assets |  | — |  |  | 369,344 |  |  | 369,344 |
Intangible assets, net |  | 366,029 |  |  | (13,828 | ) |  | 352,201 |
Liabilities |  |  |  |  |  |
Current operating lease liabilities |  | — |  |  | 38,773 |  |  | 38,773 |
Accrued liabilities and other |  | 14,563 |  |  | (412 | ) |  | 14,151 |
Deferred Lease |  | 22,436 |  |  | (22,436 | ) |  | — |
Noncurrent operating lease liabilities |  | — |  |  | 328,156 |  |  | 328,156 |
Other liabilities |  | 14,364 |  |  | 1,644 |  |  | 16,008 |
In addition to recognizing the operating lease liabilities and right-of-use assets, ASC 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. During 2019, we recognized $69.2 million of operating lease expense and $0.6 million of interest and depreciation expense on finance leases. 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 $63.1 million of operating lease payments during 2019. We also obtained $74.8 million of leased assets in exchange for new operating lease liabilities during 2019. The following table summarizes the expected maturity of lease liabilities at December 31, 2019
(in thousands) |  | Operating Leases |  | Finance Leases |  | Total
2020 |  | $ | 59,790 |  |  | $ | 174 |  |  | $ | 59,964 |
2021 |  | 65,556 |  |  | 174 |  |  | 65,730 |
2022 |  | 63,772 |  |  | 174 |  |  | 63,946 |
2023 |  | 60,301 |  |  | 174 |  |  | 60,475 |
2024 |  | 55,644 |  |  | 174 |  |  | 55,818 |
2025 and thereafter |  | 189,857 |  |  | 1,532 |  |  | 191,389 |
Total lease payments |  | 494,920 |  |  | 2,402 |  |  | 497,322 |
Less: Interest |  | 99,914 |  |  | 717 |  |  | 100,631 |
Present value of lease liabilities |  | $ | 395,006 |  |  | $ | 1,685 |  |  | $ | 396,691 |
Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. We recognized $8.1 million of operating lease revenue during 2019 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 December 31, 2019:
(in thousands) |  | Operating Leases
2020 |  | $ | 7,074 |
2021 |  | 4,914 |
2022 |  | 3,902 |
2023 |  | 2,270 |
2024 |  | 1,245 |
2025 and thereafter |  | 3,853 |
Total |  | $ | 23,258 |
Leases | We adopted ASC 842 on January 1, 2019 using the modified retrospective method. We applied the package of practical expedients and, as a result, did not reassess prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In those circumstances where the Company is the lessee, we elected to account for non-lease components associated with our leases (e.g., maintenance costs) and lease components as a single lease component for substantially all of our asset classes. We lease various cell 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 December 31, 2019, our operating leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 4.3%. Our finance leases had a weighted average remaining lease term of fifteen years and a weighted average discount rate of 5.1%. Under the new lease standard, leases are remeasured upon certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard was as follows:
(in thousands) |  | December 31, 2018 As Previously Reported |  | Effect of the Adoption of ASC 842 (Leases) |  | January 1, 2019 As Adjusted
Assets |  |  |  |  |  |
Prepaid expenses and other |  | $ | 60,162 |  |  | $ | (11,580 | ) |  | $ | 48,582 |
Property, plant and equipment, net |  | 701,359 |  |  | 1,789 |  |  | 703,148 |
Operating lease right-of-use assets |  | — |  |  | 369,344 |  |  | 369,344 |
Intangible assets, net |  | 366,029 |  |  | (13,828 | ) |  | 352,201 |
Liabilities |  |  |  |  |  |
Current operating lease liabilities |  | — |  |  | 38,773 |  |  | 38,773 |
Accrued liabilities and other |  | 14,563 |  |  | (412 | ) |  | 14,151 |
Deferred Lease |  | 22,436 |  |  | (22,436 | ) |  | — |
Noncurrent operating lease liabilities |  | — |  |  | 328,156 |  |  | 328,156 |
Other liabilities |  | 14,364 |  |  | 1,644 |  |  | 16,008 |
In addition to recognizing the operating lease liabilities and right-of-use assets, ASC 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. During 2019, we recognized $69.2 million of operating lease expense and $0.6 million of interest and depreciation expense on finance leases. 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 $63.1 million of operating lease payments during 2019. We also obtained $74.8 million of leased assets in exchange for new operating lease liabilities during 2019. The following table summarizes the expected maturity of lease liabilities at December 31, 2019
(in thousands) |  | Operating Leases |  | Finance Leases |  | Total
2020 |  | $ | 59,790 |  |  | $ | 174 |  |  | $ | 59,964 |
2021 |  | 65,556 |  |  | 174 |  |  | 65,730 |
2022 |  | 63,772 |  |  | 174 |  |  | 63,946 |
2023 |  | 60,301 |  |  | 174 |  |  | 60,475 |
2024 |  | 55,644 |  |  | 174 |  |  | 55,818 |
2025 and thereafter |  | 189,857 |  |  | 1,532 |  |  | 191,389 |
Total lease payments |  | 494,920 |  |  | 2,402 |  |  | 497,322 |
Less: Interest |  | 99,914 |  |  | 717 |  |  | 100,631 |
Present value of lease liabilities |  | $ | 395,006 |  |  | $ | 1,685 |  |  | $ | 396,691 |
Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. We recognized $8.1 million of operating lease revenue during 2019 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 December 31, 2019:
(in thousands) |  | Operating Leases
2020 |  | $ | 7,074 |
2021 |  | 4,914 |
2022 |  | 3,902 |
2023 |  | 2,270 |
2024 |  | 1,245 |
2025 and thereafter |  | 3,853 |
Total |  | $ | 23,258 |

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