ARRAY DIGITAL INFRASTRUCTURE, INC. 10-K

Leases

12 Months Ended

Dec. 31, 2025

Note 10 Leases

Lessee Agreements

Array's most significant leases are for land and office space, all of which are classified as operating leases. Many of Array's leases include renewal and early termination options. Lease terms include options to extend or terminate when it is reasonably certain that Array will exercise the option.

Array has recognized a right-of-use asset and a corresponding lease liability that represents the present value of Array's obligation to make payments over the lease term. The present value of the lease payments is calculated using an incremental borrowing rate, which was determined using a portfolio approach based on Array's unsecured rates, adjusted to approximate the rates at which Array would be required to borrow on a collateralized basis over a term similar to the recognized lease term.

Lease and nonlease components are accounted for separately and the cost of nonlease components (e.g., utilities and common area maintenance) are typically expensed as incurred at their relative standalone price.

Array recognizes variable lease expense related to lease payments that were not originally included in the lease liability calculation, which primarily relate to lease payment escalations that are tied to an index, real estate taxes, or additional payments linked to performance.

The following table shows the components of lease cost included in the Consolidated Statement of Operations:


Year Ended December 31,	2025		2024		2023
(Dollars in thousands)
Operating lease cost	$	51,300	$	48,557	$	47,034



Variable lease cost	6,768		6,518		6,023

Total	$	58,068	$	55,075	$	53,057

The following table shows supplemental cash flow information related to lease activities:


Year Ended December 31,	2025		2024		2023
(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	46,589	$	46,273	$	43,167


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	34,559	$	37,792	$	43,111

The table below shows a weighted-average analysis for lease terms and discount rates for operating leases:


December 31,	2025		2024

Weighted Average Remaining Lease Term	21 years		20 years



Weighted Average Discount Rate	5.1	%	4.9	%

The maturities of lease liabilities are as follows:


	Operating Leases
(Dollars in thousands)
2026	$	41,847
2027	45,202
2028	44,261
2029	43,363
2030	42,854
Thereafter	784,776
Total lease payments	$	1,002,303
Less: Imputed interest	477,133
Present value of lease liabilities	$	525,170

Lessor Agreements

Array's most significant lessor leases are for tower space, all of which are classified as operating leases. Many of Array's leases include renewal and early termination options. Lease terms include options to extend or terminate when it is reasonably certain that the lessee will exercise the option. Underlying assets leased to customers under operating leases are included in Communications infrastructure assets in Note 9 — Property, Plant and Equipment.

Array’s lessor agreements with lease and nonlease components are generally accounted for separately.

Array recognizes variable lease income related to lease payments that were not originally included in the lease receivable calculation, which primarily relate to lease payment escalations that are tied to an index.

The following table shows the components of lease income which are included in Site rental revenues in the Consolidated Statement of Operations:

The maturities of expected lease payments to be received are as follows. The table below does not include lease payments for Interim Sites whereby T-Mobile is leasing up to 1,800 sites for a period of up to 30 months subject to the terms and conditions of the MLA.


	Operating Leases
(Dollars in thousands)
2026	$	144,858
2027	144,885
2028	136,511
2029	127,272
2030	115,813
Thereafter	1,070,051
Total future lease maturities	$	1,739,390

Year Ended December 31,

(Dollars in thousands)

Operating lease income