Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $920 and $435 for the three months ended September 30, 2021 and 2020, respectively, and was $2,824 and $2,688 for the nine months ended September 30, 2021 and 2020, respectively. Short-term operating lease costs were $66 and $65 for the three months ended September 30, 2021 and 2020, respectively, and were $181 and $188 for the nine months ended September 30, 2021 and 2020, respectively. Sublease income was $34 for both the three months ended September 30, 2021 and 2020 and was $101 for both the nine months ended September 30, 2021 and 2020. Maturities of lease liabilities as of September 30, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2021	$	906
2022	1,649
2023	751
2024	411
2025 and thereafter	249
Total minimum lease payments	$	3,966
Less amount representing interest	$	(254)
Present value of net minimum operating lease payments	$	3,712
Less current installments of obligation under current-operating lease liabilities	$	2,012
Obligations under long-term operating lease liabilities, excluding current installments	$	1,700
Weighted-average remaining lease term - operating leases (years)	2.24
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. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of September 30, 2021, the gross cost and accumulated amortization associated with this lease for the remaining satellite hub is included in revenue generating assets and amounted to $1,268 and $664, respectively. The obligation 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 the remaining capital assets was $45 for both the three months ended September 30, 2021 and 2020 and was $136 for both the nine months ended September 30, 2021 and 2020.

The future minimum lease payments under this financing lease as of September 30, 2021 are:

Remainder of 2021	$	66
2022	264
2023	22
Total minimum lease payments	$	352
Less amount representing interest	$	(4)
Present value of net minimum financing lease payments	$	348
Less current installments of obligation under accrued other	$	260
Obligations under other long-term liabilities, excluding current installments	$	88
Weighted-average remaining lease term - finance leases (years)	1.42
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for 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 $3,962 as of September 30, 2021 and the non-current portion of the net investment in these leases was $6,905 as of September 30, 2021. 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 $218 and $670 during the three and nine months ended September 30, 2021, respectively, and was $223 and $623 during the three and nine months ended September 30, 2020.

The future undiscounted cash flows from these leases as of September 30, 2021 are:

Remainder of 2021	$	1,726
2022	3,869
2023	3,286
2024	2,344
2025	963
2026	158
Total undiscounted cash flows	$	12,346
Present value of lease payments	$	10,867
Difference between undiscounted cash flows and discounted cash flows	$	1,479

In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of September 30, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,060 and $89, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $43 and $88 for the three and nine months ended September 30, 2021, respectively.

Lease revenue recognized was $68 and $141 for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, minimum future lease payments to be received on the operating leases are as follows:

2021	$	83
2022	332
2023	331
2024	108
Total	$	854

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $920 and $435 for the three months ended September 30, 2021 and 2020, respectively, and was $2,824 and $2,688 for the nine months ended September 30, 2021 and 2020, respectively. Short-term operating lease costs were $66 and $65 for the three months ended September 30, 2021 and 2020, respectively, and were $181 and $188 for the nine months ended September 30, 2021 and 2020, respectively. Sublease income was $34 for both the three months ended September 30, 2021 and 2020 and was $101 for both the nine months ended September 30, 2021 and 2020. Maturities of lease liabilities as of September 30, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2021	$	906
2022	1,649
2023	751
2024	411
2025 and thereafter	249
Total minimum lease payments	$	3,966
Less amount representing interest	$	(254)
Present value of net minimum operating lease payments	$	3,712
Less current installments of obligation under current-operating lease liabilities	$	2,012
Obligations under long-term operating lease liabilities, excluding current installments	$	1,700
Weighted-average remaining lease term - operating leases (years)	2.24
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. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of September 30, 2021, the gross cost and accumulated amortization associated with this lease for the remaining satellite hub is included in revenue generating assets and amounted to $1,268 and $664, respectively. The obligation 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 the remaining capital assets was $45 for both the three months ended September 30, 2021 and 2020 and was $136 for both the nine months ended September 30, 2021 and 2020.

The future minimum lease payments under this financing lease as of September 30, 2021 are:

Remainder of 2021	$	66
2022	264
2023	22
Total minimum lease payments	$	352
Less amount representing interest	$	(4)
Present value of net minimum financing lease payments	$	348
Less current installments of obligation under accrued other	$	260
Obligations under other long-term liabilities, excluding current installments	$	88
Weighted-average remaining lease term - finance leases (years)	1.42
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for 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 $3,962 as of September 30, 2021 and the non-current portion of the net investment in these leases was $6,905 as of September 30, 2021. 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 $218 and $670 during the three and nine months ended September 30, 2021, respectively, and was $223 and $623 during the three and nine months ended September 30, 2020.

The future undiscounted cash flows from these leases as of September 30, 2021 are:

Remainder of 2021	$	1,726
2022	3,869
2023	3,286
2024	2,344
2025	963
2026	158
Total undiscounted cash flows	$	12,346
Present value of lease payments	$	10,867
Difference between undiscounted cash flows and discounted cash flows	$	1,479

In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of September 30, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,060 and $89, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $43 and $88 for the three and nine months ended September 30, 2021, respectively.

Lease revenue recognized was $68 and $141 for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, minimum future lease payments to be received on the operating leases are as follows:

2021	$	83
2022	332
2023	331
2024	108
Total	$	854

Leases

Leases

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $920 and $435 for the three months ended September 30, 2021 and 2020, respectively, and was $2,824 and $2,688 for the nine months ended September 30, 2021 and 2020, respectively. Short-term operating lease costs were $66 and $65 for the three months ended September 30, 2021 and 2020, respectively, and were $181 and $188 for the nine months ended September 30, 2021 and 2020, respectively. Sublease income was $34 for both the three months ended September 30, 2021 and 2020 and was $101 for both the nine months ended September 30, 2021 and 2020. Maturities of lease liabilities as of September 30, 2021 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2021	$	906
2022	1,649
2023	751
2024	411
2025 and thereafter	249
Total minimum lease payments	$	3,966
Less amount representing interest	$	(254)
Present value of net minimum operating lease payments	$	3,712
Less current installments of obligation under current-operating lease liabilities	$	2,012
Obligations under long-term operating lease liabilities, excluding current installments	$	1,700
Weighted-average remaining lease term - operating leases (years)	2.24
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. During the first quarter of 2021, the terms of this lease were adjusted and the Company discontinued use of two satellite hubs and was released from the related payment obligation in exchange for additional satellite service capacity. As of September 30, 2021, the gross cost and accumulated amortization associated with this lease for the remaining satellite hub is included in revenue generating assets and amounted to $1,268 and $664, respectively. The obligation 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 the remaining capital assets was $45 for both the three months ended September 30, 2021 and 2020 and was $136 for both the nine months ended September 30, 2021 and 2020.

The future minimum lease payments under this financing lease as of September 30, 2021 are:

Remainder of 2021	$	66
2022	264
2023	22
Total minimum lease payments	$	352
Less amount representing interest	$	(4)
Present value of net minimum financing lease payments	$	348
Less current installments of obligation under accrued other	$	260
Obligations under other long-term liabilities, excluding current installments	$	88
Weighted-average remaining lease term - finance leases (years)	1.42
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for 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 $3,962 as of September 30, 2021 and the non-current portion of the net investment in these leases was $6,905 as of September 30, 2021. 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 $218 and $670 during the three and nine months ended September 30, 2021, respectively, and was $223 and $623 during the three and nine months ended September 30, 2020.

The future undiscounted cash flows from these leases as of September 30, 2021 are:

Remainder of 2021	$	1,726
2022	3,869
2023	3,286
2024	2,344
2025	963
2026	158
Total undiscounted cash flows	$	12,346
Present value of lease payments	$	10,867
Difference between undiscounted cash flows and discounted cash flows	$	1,479

In 2021, the Company entered into three-year leases for its TracPhone mini-VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of September 30, 2021, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,060 and $89, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $43 and $88 for the three and nine months ended September 30, 2021, respectively.

Lease revenue recognized was $68 and $141 for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, minimum future lease payments to be received on the operating leases are as follows:

2021	$	83
2022	332
2023	331
2024	108
Total	$	854