Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense for the three months ended March 31, 2020 and 2019 was $1,262 and $1,265, respectively. Short-term operating lease costs for the three months ended March 31, 2020 and 2019 was $61 and $48, respectively. Sublease income for the three months ended March 31, 2020 and 2019 was $34. The future minimum lease payments under our operating leases as of March 31, 2020 are:

Remainder of 2020	$	1,804
2021	1,392
2022	1,298
2023	463
2024 and thereafter	589
Total minimum lease payments	$	5,546
Less amount representing interest	$	(490)
Present value of net minimum operating lease payments	$	5,056
Less current installments of obligation under current-operating lease liabilities	$	1,634
Obligations under long term - operating lease liabilities, excluding current installments	$	3,422
Weighted-average remaining lease term - operating leases (years)	3.24
Weighted-average discount rate - operating leases	5.50		%

During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. As of March 31, 2020, the gross costs and accumulated amortization associated with this lease are included in revenue generating assets and amounted to $3,068 and $955, respectively. Property and equipment under capital leases are stated at the present value of minimum lease payments.

The property and equipment held under this financing lease are amortized on a straight-line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for these capital assets was $110 for both three months ended March 31, 2020 and 2019.

The future minimum lease payments under this financing lease as of March 31, 2020 are:

Remainder of 2020	$	468
2021	624
2022	624
2023	45
Total minimum lease payments	$	1,761
Less amount representing interest	$	(16)
Present value of net minimum financing lease payments	$	1,745
Less current installments of obligation under accrued other	$	615
Obligations under other long-term liabilities, excluding current installments	$	1,130
Weighted-average remaining lease term - finance leases (years)	2.92
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily of the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

The current portion of the net investment in these leases was $4,238 as of March 31, 2020 and the non-current portion of the net investment in these leases was $6,597 as of March 31, 2020. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $197 and $168 during the three months ended March 31, 2020 and 2019, respectively.

The future undiscounted cash flows from these leases as of March 31, 2020 are:

Remainder of 2020	$	3,657
2021	3,407
2022	2,452
2023	1,776
2024	1,007
2025	53
Total undiscounted cash flows	$	12,352
Present value of lease payments	$	10,835
Difference between undiscounted cash flows and discounted cash flows	$	1,517

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense for the three months ended March 31, 2020 and 2019 was $1,262 and $1,265, respectively. Short-term operating lease costs for the three months ended March 31, 2020 and 2019 was $61 and $48, respectively. Sublease income for the three months ended March 31, 2020 and 2019 was $34. The future minimum lease payments under our operating leases as of March 31, 2020 are:

Remainder of 2020	$	1,804
2021	1,392
2022	1,298
2023	463
2024 and thereafter	589
Total minimum lease payments	$	5,546
Less amount representing interest	$	(490)
Present value of net minimum operating lease payments	$	5,056
Less current installments of obligation under current-operating lease liabilities	$	1,634
Obligations under long term - operating lease liabilities, excluding current installments	$	3,422
Weighted-average remaining lease term - operating leases (years)	3.24
Weighted-average discount rate - operating leases	5.50		%

During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. As of March 31, 2020, the gross costs and accumulated amortization associated with this lease are included in revenue generating assets and amounted to $3,068 and $955, respectively. Property and equipment under capital leases are stated at the present value of minimum lease payments.

The property and equipment held under this financing lease are amortized on a straight-line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for these capital assets was $110 for both three months ended March 31, 2020 and 2019.

The future minimum lease payments under this financing lease as of March 31, 2020 are:

Remainder of 2020	$	468
2021	624
2022	624
2023	45
Total minimum lease payments	$	1,761
Less amount representing interest	$	(16)
Present value of net minimum financing lease payments	$	1,745
Less current installments of obligation under accrued other	$	615
Obligations under other long-term liabilities, excluding current installments	$	1,130
Weighted-average remaining lease term - finance leases (years)	2.92
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily of the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

The current portion of the net investment in these leases was $4,238 as of March 31, 2020 and the non-current portion of the net investment in these leases was $6,597 as of March 31, 2020. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $197 and $168 during the three months ended March 31, 2020 and 2019, respectively.

The future undiscounted cash flows from these leases as of March 31, 2020 are:

Remainder of 2020	$	3,657
2021	3,407
2022	2,452
2023	1,776
2024	1,007
2025	53
Total undiscounted cash flows	$	12,352
Present value of lease payments	$	10,835
Difference between undiscounted cash flows and discounted cash flows	$	1,517

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense for the three months ended March 31, 2020 and 2019 was $1,262 and $1,265, respectively. Short-term operating lease costs for the three months ended March 31, 2020 and 2019 was $61 and $48, respectively. Sublease income for the three months ended March 31, 2020 and 2019 was $34. The future minimum lease payments under our operating leases as of March 31, 2020 are:

Remainder of 2020	$	1,804
2021	1,392
2022	1,298
2023	463
2024 and thereafter	589
Total minimum lease payments	$	5,546
Less amount representing interest	$	(490)
Present value of net minimum operating lease payments	$	5,056
Less current installments of obligation under current-operating lease liabilities	$	1,634
Obligations under long term - operating lease liabilities, excluding current installments	$	3,422
Weighted-average remaining lease term - operating leases (years)	3.24
Weighted-average discount rate - operating leases	5.50		%

During the first quarter of 2018, the Company entered into a five-year financing lease for three satellite hubs for its HTS network. As of March 31, 2020, the gross costs and accumulated amortization associated with this lease are included in revenue generating assets and amounted to $3,068 and $955, respectively. Property and equipment under capital leases are stated at the present value of minimum lease payments.

The property and equipment held under this financing lease are amortized on a straight-line basis over the seven-year estimated useful life of the asset, since the lease meets the bargain purchase option criteria. Amortization of assets held under financing leases is included within depreciation expense. Depreciation expense for these capital assets was $110 for both three months ended March 31, 2020 and 2019.

The future minimum lease payments under this financing lease as of March 31, 2020 are:

Remainder of 2020	$	468
2021	624
2022	624
2023	45
Total minimum lease payments	$	1,761
Less amount representing interest	$	(16)
Present value of net minimum financing lease payments	$	1,745
Less current installments of obligation under accrued other	$	615
Obligations under other long-term liabilities, excluding current installments	$	1,130
Weighted-average remaining lease term - finance leases (years)	2.92
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily of the TracPhone mini-VSAT systems. These leases are classified as sales-type leases as title of the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

The current portion of the net investment in these leases was $4,238 as of March 31, 2020 and the non-current portion of the net investment in these leases was $6,597 as of March 31, 2020. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $197 and $168 during the three months ended March 31, 2020 and 2019, respectively.

The future undiscounted cash flows from these leases as of March 31, 2020 are:

Remainder of 2020	$	3,657
2021	3,407
2022	2,452
2023	1,776
2024	1,007
2025	53
Total undiscounted cash flows	$	12,352
Present value of lease payments	$	10,835
Difference between undiscounted cash flows and discounted cash flows	$	1,517