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,
As of March 31, 2019, we did not have any material
transactions, arrangements or obligations, including contingent
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.
We may find it necessary to take impairment charges in future
periods based on conditions at that time. Any such impairment could
Critical Accounting Policies
There have been no material changes to our critical accounting
policies from the information provided in Part II, Item 7,
“Management’s 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
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.