Contractual Obligations
As of March 31, 2019, there have been no net material changes in the total amount from the contractual obligations listed in our Form
10-K
for the year ended December 31, 2018, as filed with the SEC on February 27, 2019, other than as described below.
As discussed above, during the three months ended March 31, 2019, we decreased our long-term debt obligations outstanding by
$180.0 million. As a result of these debt payments made, we have no amount outstanding under our Revolver at March 31, 2019.
Off-Balance
Sheet Arrangements
As of March 31, 2019, we did not have any material
off-balance
sheet transactions, arrangements or obligations, including contingent obligations.
During
the third quarter of 2018, we disposed of certain property that we considered as surplus to our operations and that resulted in significant gains reportable for tax purposes. In order to minimize the tax impact on a certain portion of these taxable
gains, we created an entity that served as a qualified intermediary (QI) for tax purposes and that held the net sales proceeds of $70.2 million. The net sales proceeds were deposited into the account of the QI to comply with
requirements under Section 1031 of the Code to execute a like-kind exchange and were reflected as restricted cash on our consolidated balance sheet at December 31, 2018.
We used a portion of these funds in a
tax-free
exchange by using the net sale proceeds from
relinquished property for the purchase of replacement property. This QI was treated as a variable interest entity (VIE) and was included in our prior year consolidated financial statements as we were considered the primary beneficiary.
Under Section 1031 of the Code, the property to be exchanged in the like-kind exchange was required to be received by us within 180
days. This period of time lapsed during the first quarter of 2019, at which point, the restrictions on the cash balances were released. As a result, we do not present restricted cash on our balance sheet at March 31, 2019.
We do not have any other relationships with unconsolidated entities or financial partnerships, such as entities often referred to as
structured finance or special purpose entities, which would have been established for the purpose of facilitating
off-balance
sheet financial arrangements or other contractually narrow or limited purposes as
of March 31, 2019. Accordingly, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
Future Impairments
We may find it
necessary to take impairment charges in future periods based on conditions at that time. Any such impairment could be material.
Critical Accounting
Policies
There have been no material changes to our critical accounting policies from the information provided in Part II, Item 7,
Managements Discussion and Analysis of Financial Condition and Results of Operations, under the heading Critical Accounting Policies in our Annual Report on Form
10-K
for the year
ended December 31, 2018, and filed with the SEC on February 27, 2019, other than as described below.
Changes in Accounting Policies
Leases
In February 2016, the accounting guidance was modified to increase transparency and comparability among organizations by
requiring the recognition of
right-of-use
(ROU) assets and lease liabilities on the balance sheet.
The guidance was effective for us as of January 1, 2019, and was implemented using a modified retrospective approach at the beginning of
the period of adoption, rather than at the beginning of the earliest comparative period presented in these financial statements.
As a
result, we changed our accounting policy for leases. Refer to Note 4, Leases, included elsewhere in this report for additional information. Except for this change, the Company has consistently applied its accounting policies to all periods presented
in these consolidated financial statements.
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