(10) Leases

In February 2016 and subsequently, the FASB issued new guidance which revises the accounting for leases (“ASC 842”). Under the new guidance, entities that lease assets are required to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases regardless of whether they are classified as finance or operating leases. In addition, new disclosures are required to meet the objective of enabling users of the financial statements to better understand the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted this guidance on January 1, 2019 and elected the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for those periods.  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 30 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 5 years up to 38 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 17 years from December 31, 2020.

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

Total operating lease cost for the year ended December 31, 2019 was $0.7 million.  For the year ended December 31, 2018, the Company recorded total rental expense of $1.0 million.

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

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Supplemental balance sheet information related to leases was as follows:

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Supplemental cash flow information related to leases was as follows:

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Future lease payments under finance leases, operating leases and tower obligations with initial terms of one year or more at December 31, 2020 consisted of the following:

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