Capital Lease Obligations |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Capital Lease Obligations | Capital Lease Obligations
In June 2016, the Company began financing its purchases of phone hardware through lease agreements classified as capital leases. As of December 31, 2021 the Company had 91 executed and active lease agreements, respectively, for phone hardware. These agreements require monthly payments ranging from approximately $140 to $21,975 and have maturity dates ranging from January 2022 to December 2024. As of December 31, 2021, the gross value of phone hardware acquired under these capital leases approximated $26 million. For the years ended December 31, 2021, 2020 and 2019, depreciation expense on capital leased phone hardware was $8.6 million, $7.1 million and $4.5 million, respectively, which is included in the depreciation expense referenced in Note 5.
The Company has leased certain computer equipment under agreements classified as capital leases. As of December 31, 2021, the Company had three executed and active agreements all of which require 36 monthly payments and have maturity dates of October 2022 to February 2023. Monthly payments on these leases combined approximate $9,600 and as of December 31, 2021, the gross value of computer equipment acquired under capital leases approximated $0.2 million. Depreciation on this computer equipment was $0.1 per year for the years ended December 31, 2021, 2020 and 2019, which is included in the $12.1 million, $9.4 million and $5.7 million depreciation referenced in Note 5.
Future payments and present value of future payments on these capital leases are listed below. To calculate interest expense and present value of future payments for both the phone hardware and
computer equipment leases, the Company utilizes its incremental borrowing rate. At the time these lease agreements were initiated the incremental borrowing rate ranged from 3.5% to 6.25%. As of December 31, 2021 the incremental borrowing rate was determined at the greater of Prime Rate plus 0.25% or 3.50%. As of December 31, 2020, and 2019, the incremental borrowing rate was determined at the greater of Prime Rate plus 0.75% or 5.50% for both periods. For the years ended December 31, 2021, 2020 and 2019, the Company recognized approximately $0.9 million, $0.9 million, and $0.6 million, respectively, of interest expense on capital leases.
As of December 31, 2021, future minimum lease payments under capital lease obligations by year are as follows (in thousands):
As of December 31, 2021, the current principal portion of capital lease obligations was $8.5 million and gross assets resulting from capital lease arrangements was $26.0 million in phone hardware and $0.2 million in computer equipment. As of December 31, 2021, accumulated depreciation on this phone hardware and computer equipment was $13.6 million and $0.2 million, respectively.
As of December 31, 2020, the current principal portion of capital lease obligations was $7.1 million and gross assets resulting from capital lease arrangements was $23.1 million in phone hardware and $0.3 million in computer equipment. As of December 31, 2020, accumulated depreciation on this phone hardware and computer equipment was $10.4 million and $0.2 million, respectively.
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