Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.0.1
Leases
12 Months Ended
Dec. 31, 2021
Leases  
Leases

(9) Leases

Leasing activity was not material to Liberty Broadband until the closing of the Combination with GCI Liberty on December 18, 2020. Prior to the closing of the Combination, Liberty Broadband’s only leases were for office space and accounted for as operating leases. Their impact to the consolidated balance sheet, statements of operations and statements of cash flows was not material for any of the prior years.

In 2016 and 2017, GCI Holdings sold certain tower sites and entered into a master lease agreement in which it leased back space on those tower sites. At the time, GCI Holdings determined that it was precluded from applying sales-leaseback accounting. We also considered whether the Combination resulted in a completed sale-leaseback transaction and concluded that the transaction did not meet the criteria and should continue to be accounted for in the same manner as previously determined.

GCI Holdings has entered into finance lease agreements with satellite providers for transponder capacity to transmit voice and data traffic in rural Alaska. GCI Holdings is also party to finance lease agreements for an office building and certain retail store locations. GCI Holdings also leases office space, land for towers and communication facilities, satellite transponders, fiber capacity, and equipment. These leases are classified as operating leases. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future lease payments using our incremental borrowing rate at the commencement date of the lease.

The Company has leases with remaining lease terms that range from less than one year up to 29 years. Certain of the Company’s leases may include an option to extend the term of the lease with such options to extend ranging from 4 years up to 37 years. The Company also has the option to terminate certain of its leases early with such options to terminate ranging from as early as 30 days up to 16 years from December 31, 2021.

The components of lease cost during the years ended December 31, 2021 and 2020 were as follows:

Year ended December 31,

 

2021

2020

 

amounts in millions

Operating lease cost (1)

$

60

3

Finance lease cost

 

  

Depreciation of leased assets

$

1

1

Interest on lease liabilities

 

Total finance lease cost

$

1

1

(1) Included within operating lease costs were short-term lease costs and variable lease costs, which were not material to the financial statements.

Total operating lease cost for the year ended December 31, 2019 was $1 million.

The remaining weighted-average lease term and the weighted-average discount rate were as follows:

    

 

December 31, 2021

December 31, 2020

 

Weighted-average remaining lease term (years):

 

  

Finance leases

 

4.5

3.1

Operating leases

 

4.2

4.8

Weighted-average discount rate:

 

  

Finance leases

 

4.3

%

3.9

%

Operating leases

 

4.0

%

4.2

%

Supplemental balance sheet information related to leases was as follows:

December 31,

    

2021

 

2020

amounts in millions

Operating leases:

 

  

Operating lease ROU assets, net (1)

$

154

99

Current operating lease liabilities (2)

$

50

34

Operating lease liabilities (3)

 

102

61

Total operating lease liabilities

$

152

95

Finance Leases:

 

  

Property and equipment, at cost

$

4

10

Accumulated depreciation

 

(1)

(1)

Property and equipment, net

$

3

9

Current obligations under finance leases (4)

$

1

4

Obligations under finance leases

 

2

4

Total finance lease liabilities

$

3

8

(1) Operating lease ROU assets, net are included within the Other assets, net line item in the accompanying consolidated balance sheets.
(2) Current operating lease liabilities are included within the Other current liabilities line item in the accompanying consolidated balance sheets.
(3) Operating lease liabilities are included within the Other liabilities line item in the accompanying consolidated balance sheets.
(4) Current obligations under finance leases are included within the Other current liabilities line item in the accompanying consolidated balance sheets.

Supplemental cash flow information related to leases was as follows:

Year ended December 31,

2021

 

2020

 

amounts in millions

Cash paid for amounts included in the measurement of lease liabilities:

 

Operating cash outflows from operating leases

$

55

3

Operating cash outflows from finance leases

$

Financing cash outflows from finance leases

$

2

ROU assets obtained in exchange for lease obligations

 

Operating leases

$

108

Finance leases

$

Future lease payments under finance leases, operating leases and tower obligations with initial terms of one year or more at December 31, 2021 consisted of the following:

Finance Leases

Operating Leases

Tower Obligations

amounts in millions

2022

$

1

 

50

 

7

2023

 

1

 

48

 

8

2024

 

1

 

41

 

8

2025

 

 

7

 

8

2026

 

 

5

 

8

Thereafter

 

 

15

 

109

Total payments

 

3

 

166

 

148

Less: imputed interest

 

 

14

 

59

Total liabilities

$

3

 

152

 

89