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LEASES

3 Months Ended

Mar. 31, 2023

4. LEASES

Lessee Disclosure

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 10 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, 2023		March 31, 2022
Operating lease cost:
Operating lease cost	$	5,981	$	6,142
Short-term lease cost		677		509
Variable lease cost		662		804
Total operating lease cost	$	7,320	$	7,455

Finance lease cost:
Amortization of right-of-use asset	$	699	$	797
Variable costs		203		248
Interest costs		84		102
Total finance lease cost	$	986	$	1,147

During the three months ended March 31, 2023 and 2022, the Company paid $5.0 million and $5.6 million, respectively, for operating lease liabilities. During the three months ended March 31, 2023 and 2022, the Company recorded $2.9 million and $3.7 million, respectively, of operating lease liabilities arising from ROU assets. During the three months ended March 31, 2023, in conjunction with the restructuring activities the Company terminated $5.0

million of lease right of use assets, $5.3 million of lease liabilities from its balance sheet, and recorded a gain of $0.3 million in the restructuring expense line of its statement of operations.

At March 31, 2023, finance leases with a cost of $27.5 million and accumulated amortization of $14.1 million were included in property, plant and equipment. During the three months ended March 31, 2023, the Company paid $0.2 million of financing cash flows, $0.9 million of investing cash flows and $0.1 million of operating cash flows for finance lease liabilities. At March 31, 2023, finance leases had a lease liability of $5.1 million, of which $1.0 million was current.

At December 31, 2022, finance leases with a cost of $26.6 million and accumulated amortization of $13.5 million were included in property, plant and equipment.

The weighted average remaining lease terms and discount rates as of March 31, 2023 and December 31, 2022 are noted in the table below:


	March 31, 2023		December 31, 2022
Weighted-average remaining lease term
Operating leases		13.1 years		12.4 years
Financing leases		9.3 years		9.3 years

Weighted-average discount rate
Operating leases		6.1%		6.0%
Financing leases		6.9%		6.7%

Maturities of lease liabilities as of March 31, 2023 were as follows (in thousands):


	Operating Leases		Financing Leases
2023 (excluding the three months ended March 31, 2023)		12,977		1,045
2024		17,023		1,240
2025		13,897		972
2026		9,771		504
2027		7,708		495
Thereafter		79,134		2,651
Total lease payments		140,510		6,907
Less imputed interest		(53,450)		(1,822)
Total	$	87,060	$	5,085

Maturities of lease liabilities as of December 31, 2022 were as follows (in thousands):


	Operating Leases		Financing Leases
2023	$	19,417	$	1,403
2024		17,836		1,342
2025		14,805		978
2026		10,505		504
2027		8,096		495
Thereafter		76,452		2,651
Total lease payments		147,111		7,373
Less imputed interest		(53,794)		(1,914)
Total	$	93,317	$	5,459

As of March 31, 2023, the Company did not have any material operating or finance leases that have not yet commenced.

Lessor Disclosure

The Company is the lessor in agreements to lease the use of its network assets including its cell sites and buildings. For the three months ended March 31, 2023 and 2022, the Company recorded $1.9 million and $1.0 million, respectively, of lease income from agreements in which the Company is the lessor. Lease income is classified as Carrier Services revenue in the statement of operations.

The following table presents the maturities of future undiscounted lease payments for the periods indicated:


2023 (excluding the three months ended March 31, 2023)	$	4,609
2024		5,891
2025		5,716
2026		5,410
2027		4,267
Thereafter		14,360
Total future lease payments	$	40,253