CCI » Topics » Operating Leases

These excerpts taken from the CCI 10-K filed Feb 26, 2009.

Operating Leases

The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to lease agreements in effect as of December 31, 2008. The Company is obligated under non-cancelable operating leases for land under 74% of its towers, office space and equipment. In addition, the Company has operating leases under which it manages space on towers owned by third parties under 3% of its towers. The majority of these operating lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at the Company’s option and annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land. Approximately 45% of the land under the Company’s towers has remaining terms to expiration (including renewals at the Company’s option) of greater than 15 years. The operating lease payments included in the table below include payments for certain renewal periods at the Company’s option up to the estimated tower useful life of 20 years and an estimate of contingent payments based on revenues and gross margins derived from existing tenant leases.

 

     Years Ending December 31,
     2009    2010    2011    2012    2013    Thereafter

Operating leases

   $ 280,071    $ 281,278    $ 284,172    $ 287,208    $ 287,481    $ 3,505,725

Rental expense from operating leases was $142.7 million, $309.2 million and $313.1 million, respectively, for the years ended December 31, 2006, 2007 and 2008. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of $15.2 million, $49.3 million and $49.5 million, respectively, for the years ended December 31, 2006, 2007 and 2008.

Operating Leases

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to lease agreements in effect as of
December 31, 2008. The Company is obligated under non-cancelable operating leases for land under 74% of its towers, office space and equipment. In addition, the Company has operating leases under which it manages space on towers owned by third
parties under 3% of its towers. The majority of these operating lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at
the Company’s option and annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land. Approximately 45% of the land under the
Company’s towers has remaining terms to expiration (including renewals at the Company’s option) of greater than 15 years. The operating lease payments included in the table below include payments for certain renewal periods at the
Company’s option up to the estimated tower useful life of 20 years and an estimate of contingent payments based on revenues and gross margins derived from existing tenant leases.

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






























































   Years Ending December 31,
   2009  2010  2011  2012  2013  Thereafter

Operating leases

  $280,071  $281,278  $284,172  $287,208  $287,481  $3,505,725

Rental expense from operating leases was $142.7 million, $309.2 million and $313.1 million,
respectively, for the years ended December 31, 2006, 2007 and 2008. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of $15.2 million, $49.3 million and
$49.5 million, respectively, for the years ended December 31, 2006, 2007 and 2008.

These excerpts taken from the CCI 10-K filed Feb 27, 2008.

Operating Leases

The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to lease agreements in effect as of December 31, 2007. The Company is obligated under non-cancelable operating leases for land under 80% of its towers, space on towers owned by third parties that the Company manages, office space and equipment. The majority of these operating lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at the Company’s option and annual escalations. Lease agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land. Certain of the land and managed tower leases have purchase options at the end of the original lease term. Approximately 25% of the land under the Company’s towers have lease agreements with remaining terms to expiration (including renewals) of greater than 20 years. The operating lease payments included in the table below include payments for certain renewal periods at the Company’s option up to the estimated tower useful life of 20 years.

 

     Years Ending December 31,
     2008    2009    2010    2011    2012    Thereafter

Operating leases

   $ 228,601    $ 231,480    $ 233,937    $ 237,419    $ 239,937    $ 2,979,720

Rental expense from operating leases was $135.5 million, $142.7 million and $309.2 million, respectively, for the years ended December 31, 2005, 2006 and 2007. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of $12.9 million, $15.2 million and $41.6 million, respectively, for the years ended December 31, 2005, 2006 and 2007.

Operating Leases

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The following table is a summary of rental cash payments owed by the Company, as lessee, to landlords pursuant to lease agreements in effect as of
December 31, 2007. The Company is obligated under non-cancelable operating leases for land under 80% of its towers, space on towers owned by third parties that the Company manages, office space and equipment. The majority of these operating
lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at the Company’s option and annual escalations. Lease
agreements may also contain provisions for a contingent payment based on revenues or the gross margin derived from the tower located on the leased land. Certain of the land and managed tower leases have purchase options at the end of the original
lease term. Approximately 25% of the land under the Company’s towers have lease agreements with remaining terms to expiration (including renewals) of greater than 20 years. The operating lease payments included in the table below include
payments for certain renewal periods at the Company’s option up to the estimated tower useful life of 20 years.

 






























































   Years Ending December 31,
   2008  2009  2010  2011  2012  Thereafter

Operating leases

  $228,601  $231,480  $233,937  $237,419  $239,937  $2,979,720

Rental expense from operating leases was $135.5 million, $142.7 million and $309.2 million,
respectively, for the years ended December 31, 2005, 2006 and 2007. The rental expense was inclusive of contingent payments based on revenues or gross margin derived from the tower located on the leased land of $12.9 million, $15.2 million and
$41.6 million, respectively, for the years ended December 31, 2005, 2006 and 2007.

This excerpt taken from the CCI 10-Q filed Nov 1, 2007.

Operating Leases

The Company is obligated under non-cancelable operating leases for land under its towers, space on towers owned by third parties that the Company manages, office space and equipment. The majority of the Company’s lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at the Company’s option and annual escalations. The lease agreements for managed sites generally require either a minimum fixed lease payment or a contingent payment based on revenues or the gross margin at a site with some of the sites requiring both a fixed payment and a contingent payment based on revenues or gross margin. Certain of the land and managed tower leases have purchase options at the end of the original lease term. The following table is a summary of the minimal rental cash payments owed by the Company, as lessee, to landlords pursuant to non-cancelable lease agreements and includes payments for certain renewal periods at the Company’s option up to a maximum of 20 years. In addition to the minimal rental cash payments disclosed below, the Company is obligated in some cases to pay contingent rental cash payments to landlords, including those calculated as a percentage of the tenant revenues and variable escalations.

 

     Operating Leases
     (In thousands of dollars)

Year ended December 31, 2008

   $ 222,308

Year ended December 31, 2009

     223,028

Year ended December 31, 2010

     224,096

Year ended December 31, 2011

     224,721

Year ended December 31, 2012

     225,884

Thereafter

     2,868,175
This excerpt taken from the CCI 10-Q filed May 10, 2007.

Operating Leases

The following table is a summary of the amount owed by the Company, as lessee, for rental payments under non-cancelable lease agreements in effect as of March 31, 2007. The Company is obligated under non-cancelable operating leases for land under its towers, space on towers owned by third parties that the Company manages, office space and equipment. The majority of the Company’s lease agreements have certain termination rights that provide for cancellation after a notice period. The majority of the land and managed tower leases have multiple renewal options at the Company’s option. The lease agreements for managed sites generally require either a minimum fixed lease payment or a contingent payment based on revenues or the gross margin at a site with some of the sites requiring both a fixed payment and a contingent payment based on revenues or gross margin. Certain of the land and managed tower leases have purchase options at the end of the original lease term. The operating lease payments included in the table below include payments for certain renewal periods at the Company’s option up to a maximum of 20 years.

 

     Operating Leases
     (In thousands of dollars)

Nine months ended December 31, 2007

   $ 172,814

Year ended December 31, 2008

     232,604

Year ended December 31, 2009

     238,901

Year ended December 31, 2010

     244,352

Year ended December 31, 2011

     251,868

Thereafter

     2,971,261
This excerpt taken from the CCI 8-K filed Mar 30, 2007.

Operating Leases

As lessees, we are obligated under non-cancelable operating leases for office space, equipment, and ground space under communications towers and at other sites, as well as space on communications towers that expire at various times through 2099. The majority of the ground, tower and other site leases have multiple renewal options, which range up to 25 years each. For the ground leases associated with the Sprint Transaction, we have an obligation to Sprint to renew the ground lease through the final term and to use commercial efforts to extend these leases at the end of the final lease term. The ground, tower and other lease agreements for managed sites generally require either a minimum fixed lease payment or a contingent payment based on revenues or the gross margin at a site with some of the sites requiring both a fixed payment and a contingent payment based on revenues or gross margin. Certain of the ground and managed site leases have purchase options at the end of the original lease term.

 

- 27 -


Our future minimum cash lease payment commitments under these leases at December 31, 2006, are as follows (in thousands):

 

Year Ending December 31,

   Minimum Lease
Payments

2007

   $ 78,304

2008

     62,930

2009

     51,419

2010

     38,330

2011

     17,486

2012 and thereafter

     66,010
      

Total minimum lease payments

   $ 314,479
      

Many of our lease agreements contain escalation clauses that are typically based on either a fixed percentage rate or the change in the Consumer Price Index. For leases with escalation clauses based on a fixed percentage rate, rental expenses are recognized in our statements of operations on a straight-line basis over the initial term of the lease plus the future optional renewal periods where there is a reasonable assurance that the lease will be renewed based on our evaluation at the inception of the lease or at our assumption of the lease due to our acquisition of the related tower asset. Total rent expense related to continuing operations under non-cancelable operating leases was $166.7 million, $114.7 million and $35.0 million for the years ended December 31, 2006, 2005 and 2004, respectively.

The components of minimum and contingent rental expense from continuing operations for the years ended December 31, 2006, 2005 and 2004 are as follows (in thousands):

 

Year Ended December 31,

   Minimum
Rental
Expense
   Contingent
Rental
Expense
   Total

2006

   $ 111,588    $ 55,083    $ 166,671

2005

   $ 72,667    $ 42,009    $ 114,676

2004

   $ 19,467    $ 15,524    $ 34,991

Under the Sprint Transaction, we have an obligation to pay Sprint $2,095 per site for 2007 (which increases by 3% each successive year) as a reimbursement to Sprint of property taxes Sprint will pay on those sites. The future payments to Sprint under this agreement are as follows (in thousands):

 

Year Ending December 31,

   Payments

2007

   $ 13,670

2008

     14,043

2009

     14,422

2010

     14,809

2011

     15,234

2012 and thereafter

     229,018
      

Total payments

   $ 301,196
      
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