| | | | | | | | | | | | | | | | | | | Balances at December 31, 2018 | | Adjustments from adoption of new lease standard | | Balances at January 1, 2019 | |
Assets | | | | | | |
Cash and cash equivalents | $ | 121,347 | | | (646) | | | 120,701 | | |
Investments and notes receivable | 249,370 | | | (23,134) | | | 226,236 | | |
Accounts receivable | 59,531 | | | (89) | | | 59,442 | | |
Property and equipment, net | 344,784 | | | (16,974) | | | 327,810 | | |
Other assets | 45,533 | | | 32,804 | | | 78,337 | | |
Liabilities | | | | | | |
Bonds and notes payable | 22,218,740 | | | (33,182) | | | 22,185,558 | | |
Other liabilities | 256,092 | | | 31,220 | | | 287,312 | | |
Equity | | | | | | |
Noncontrolling interests | 10,315 | | | (6,077) | | | 4,238 | | |
At the inception of an arrangement, the Company determines if the arrangement is, or contains, a lease and records the lease in the consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available by the lessor. The Company primarily leases dark fiber to support its telecommunications operations and office and data center space. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The lease expense for these leases is recognized on a straight-line basis over the lease term. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. When the discount rate implicit in the lease cannot be readily determined, the Company uses its incremental borrowing rate.
The Company has elected to utilize the practical expedient to account for lease and non-lease components together as a single, combined lease component for its office and data center space. In addition, the Company has identified itself as the lessor in its Communications operating segment for services provided to customers that include customer-premise equipment. The Company has also elected to utilize the practical expedient to account for those services and associated leases as a single, combined component. The non-lease services are 'predominant' in those contracts. Therefore, the combined component is considered a single performance obligation under ASC Topic 606, Revenue from Contracts with Customers.
Most leases include one or more options to renew, with renewal terms that can be extended. The exercise of lease renewal options for the majority of leases is at the Company's discretion. Renewal options that the Company is reasonably certain to exercise are included in the lease term.
Certain leases include escalating rental payments or rental payments adjusted periodically for inflation. None of the lease agreements include any residual value guarantees, a transfer of title, or a purchase option that is reasonably certain to be exercised.
The following table provides supplemental balance sheet information related to leases:
| | | | | |
| As of |
| September 30, 2019 |
Operating lease ROU assets, which is included in "other assets" on the consolidated balance sheet | $ | 34,264 | |
Operating lease liabilities, which is included in "other liabilities" on the consolidated balance sheet | $ | 35,237 | |
The following table provides components of lease expense:
| | | | | | | | | | | |
| Three months ended September 30, 2019 | | Nine months ended September 30, 2019 |
Rental expense, which is included in "other expenses" on the consolidated statements of income (a) | $ | 2,776 | | | 8,276 | |
Rental expense, which is included in "cost to provide communications services" on the consolidated statements of income (a) | 428 | | | 1,138 | |
Total operating rental expense | $ | 3,204 | | | 9,414 | |
(a) Includes short-term and variable lease costs, which are immaterial.
The following table provides supplemental cash flow information related to leases:
| | | | | |
| Nine months ended September 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflows related to operating leases | $ | 7,307 | |
Supplemental noncash activity: | |
Operating ROU assets obtained in exchange for lease obligations, excluding impact of adoption | $ | 7,972 | |
Weighted average remaining lease term and discount rate are shown below:
| | | | | |
| As of |
| September 30, 2019 |
Weighted average remaining lease term (years) | 7.2 |
Weighted average discount rate | 3.95 | % |
Maturity of lease liabilities are shown below:
| | | | | |
2019 (October 1 - December 31) | $ | 2,638 | |
2020 | 9,916 | |
2021 | 6,803 | |
2022 | 4,652 | |
2023 | 3,640 | |
2024 and thereafter | 12,996 | |
Total lease payments | 40,645 | |
Imputed interest | (5,408) | |
Total | $ | 35,237 | |
The Company adopted the new lease standard using the effective date as its date of initial application as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future minimum lease payments as of December 31, 2018 are shown below:
| | | | | |
2019 | $ | 9,181 | |
2020 | 8,261 | |
2021 | 5,776 | |
2022 | 3,745 | |
2023 | 2,904 | |
2024 and thereafter | 5,479 | |
Total minimum lease payments | $ | 35,346 | |
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- DefinitionThe entire disclosure for the basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + ReferencesReference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369
+ Details Name: | us-gaap_BasisOfAccounting | Namespace Prefix: | us-gaap_ | Data Type: | nonnum:textBlockItemType | Balance Type: | na | Period Type: | duration | |
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- References + Details Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract | Namespace Prefix: | us-gaap_ | Data Type: | xbrli:stringItemType | Balance Type: | na | Period Type: | duration | |