Leases

9 Months Ended

Sep. 30, 2019

Leases

Leases

8.Leases

We enter into operating and finance leases for, among other things, satellites, office space, data centers, warehouses and distribution centers, vehicles used for installation and Smart Home Services, wireless towers and other equipment. Our leases have remaining lease terms from one to eight years, some of which include renewal options, and some of which include options to terminate the leases within one year.

Our Anik F3, Nimiq 5 and QuetzSat-1 satellites are accounted for as financing leases. Substantially all of our remaining leases are accounted for as operating leases.

The components of lease expense were as follows:

	For the Three Months Ended		For the Nine Months Ended
	September 30, 2019		September 30, 2019
	(In thousands)
Operating lease cost	$	40,831	$	205,815
Short-term lease cost (1)		2,915		9,141
Finance lease cost:
Amortization of right-of-use assets		7,187		17,100
Interest on lease liabilities		2,352		4,632
Total finance lease cost		9,539		21,732
Total lease costs	$	53,285	$	236,688

(1) Leases that have terms of 12 months or less.

Pursuant to the Master Transaction Agreement, effective September 10, 2019, approximately $495 million of previously reported operating lease assets and the related liabilities for satellites and real estate assets were transferred to us. See Note 1 for further information. These satellite and real estate assets are longer included in “Operating lease assets,” “Other current liabilities” and “Operating lease liabilities,” but rather in “Property and equipment, net” on our Condensed Consolidated Balance Sheets. Lease expense related to these satellites and real estate assets for the three and nine months ended September 30, 2019 was $25 million and $159 million, respectively.

Supplemental cash flow information related to leases was as follows:
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	For the Nine Months Ended
	September 30, 2019
		(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	209,435
Operating cash flows from finance leases	$	4,637
Financing cash flows from finance leases	$	17,681
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	110,235
Finance leases	$	187,339
Right-of-use assets and liabilities recognized at January 1, 2019 upon adoption of ASC 842	$	733,584

Supplemental balance sheet information related to leases was as follows:

	As of September 30, 2019
	(In thousands)
Operating Leases:
Operating lease assets	$	152,178
Other current liabilities	$	57,737
Operating lease liabilities		92,796
Total operating lease liabilities	$	150,533
Finance Leases:
Property and equipment, gross	$	890,598
Accumulated depreciation		(665,367)
Property and equipment, net	$	225,231
Other current liabilities	$	63,483
Other long-term liabilities		188,221
Total finance lease liabilities	$	251,704
Weighted Average Remaining Lease Term:
Operating leases		3.2 years
Finance leases		4.0 years
Weighted Average Discount Rate:
Operating leases		5.1%
Finance leases		10.2%

Maturities of lease liabilities as of September 30, 2019 were as follows:

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2019 (remaining three months)	$	17,053	$	21,132	$	38,185
2020		59,995		85,965		145,960
2021		45,155		82,577		127,732
2022		22,108		48,305		70,413
2023		9,208		40,942		50,150
Thereafter		8,444		30,707		39,151
Total lease payments		161,963		309,628		471,591
Less: Imputed interest		(11,430)		(57,924)		(69,354)
Total		150,533		251,704		402,237
Less: Current portion		(57,737)		(63,483)		(121,220)
Long-term portion of lease obligations	$	92,796	$	188,221	$	281,017