NOTE

LEASES

We enter into operating lease contracts primarily for land and office space. Arrangements are evaluated at inception to determine whether such arrangements contain a lease. Operating leases include land lease contracts and contracts for the use of office space. In accordance with the transition guidance of ASC

842,

such arrangements are included in our balance sheet as of

January 1, 2019.

Right of use assets, which we refer to as “ROU assets,” represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term.

Certain of our operating lease agreements include rental payments based on a percentage of revenue and others include rental payments adjusted periodically for inflationary changes. Percentage rent contracts, in which lease expense is calculated as a percentage of advertising revenue, and payments due to changes in inflationary adjustments are included within variable rent expense, which is accounted for separately from periodic straight-line lease expense.

Many operating lease contracts expire; however, we

may

continue to operate the leased assets after the rights and obligations of the lease agreements have expired. Such contracts, once expired, are considered to be leases and future expected payments are included in operating lease liabilities or ROU assets, using a

year extension period. Many of our leases entered into in connection with land provide options to extend the terms of the agreements. Generally, renewal periods are included in minimum lease payments when calculating the lease liabilities as, for most leases, we consider exercise of such options to be reasonably certain. As a result, optional terms and payments are included within the lease liability. Our lease agreements do

not

contain any material residual value guarantees or material restrictive covenants.

The implicit rate within our lease agreements is generally

not

determinable. As such, we use the incremental borrowing rate, which we refer to as "IBR," to determine the present value of lease payments at the commencement of the lease. The IBR, as defined in ASC

842,

"the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment."

Operating Lease Cost

Operating lease cost for the

six

months ended

June 30, 2019

are as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019		Statement of Operations Classification

Lease cost	$	1,471,077	$	2,941,733	Cost of billboard revenues and general and administrative
Variable and short-term lease cost		260,189		589,678	Cost of billboard revenues and general and administrative

Total Lease Cost	$	1,731,266	$	3,531,411

Supplemental cash flow information related to operating leases was as follows:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019

Cash payments for operating leases	$	1,590,549	$	2,935,390
New operating lease assets obtained in exchange for operating lease liabilities	$	321,194	$	1,437,622

Operating Lease Assets and Liabilities

	June 30, 2019		Balance Sheet Classification

Lease assets	$	50,307,264	Other Assets: Right of use assets

Current lease liabilities	$	3,390,314	Current Liabilities: Lease liabilities
Noncurrent lease liabilities		45,468,802	Long-term Liabilities: Lease liabilities

Total Lease Liabilities	$	48,859,116

Maturity of Operating Lease Liabilities

	June 30, 2019

2019	$	5,644,316
2020		5,451,275
2021		5,299,084
2022		5,057,938
2023		4,714,236
Thereafter		48,029,391

Total lease payments		74,196,240
Less imputed interest		25,337,124

Present Value of Lease Liabilities	$	48,859,116

As of

June 30, 2019,

our operating leases have a weighted-average remaining lease term of

16.97

years and a weighted-average discount rate of

4.88%.

The future minimum obligations under operating leases in effect as of

December 31, 2018

having a noncancellable term in excess of

one

year as determined prior to the adoption of ASC

842

are as follows:

2019	$	4,495,984
2020		4,148,078
2021		3,824,585
2022		3,406,397
2023		3,287,293
Thereafter		19,047,366

Total	$	38,209,703