Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $2,103 and $3,963 for the year ended December 31, 2022 and 2021, respectively. Short-term operating lease costs was $182 and $237 for the years ended December 31, 2022 and 2021, respectively. Maturities of lease liabilities as of December 31, 2022 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Years ending December 31,
2023	$	1,610
2024	493
2025	53
2026	46
2027 and thereafter	78
Total undiscounted lease payments	$	2,280
Less amount representing interest	$	(112)
Present value of operating lease liabilities	$	2,168
Less current installments of obligation under current-operating lease liabilities	$	1,532
Obligations under long-term operating lease liabilities, excluding current installments	$	636
Weighted-average remaining lease term - operating leases (years)	1.08
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 December 31, 2022, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $891, respectively. The obligations under financing 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 $181 for both the years ended December 31, 2022 and 2021.

The future undiscounted lease payments under this financing lease as of December 31, 2022 are:

2023	$	22
Total undiscounted lease payments	$	22
Less amount representing interest	$	—
Present value of financing lease liabilities	$	22
Less current installments of obligation under accrued other	$	22
Obligations under other long-term liabilities, excluding current installments	$	—
Weighted-average remaining lease term - finance leases (years)	0.17
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone 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 product 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 $3,811 as of December 31, 2022 and the non-current portion of the net investment in these leases was $5,036 as of December 31, 2022. 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 $764 and $882 during the year ended December 31, 2022 and 2021, respectively.

The future undiscounted cash flows from these leases as of December 31, 2022 are:

2023	$	4,365
2024	2,955
2025	1,591
2026	738
2027	257
Total undiscounted cash flows	$	9,906
Present value of lease payments	$	8,847
Difference between undiscounted cash flows and discounted cash flows	$	1,059

The Company entered into three-year leases for its TracPhone 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 December 31, 2022, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,873 and $516, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $360 for the year ended December 31, 2022.

For the year ended December 31, 2022, lease revenue of $537 was recognized in service sales in the statements of operations.

As of December 31, 2022, minimum future lease payments to be received on the operating leases are as follows:

2023	552
2024	342
2025	23
Total	$	917

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $2,103 and $3,963 for the year ended December 31, 2022 and 2021, respectively. Short-term operating lease costs was $182 and $237 for the years ended December 31, 2022 and 2021, respectively. Maturities of lease liabilities as of December 31, 2022 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Years ending December 31,
2023	$	1,610
2024	493
2025	53
2026	46
2027 and thereafter	78
Total undiscounted lease payments	$	2,280
Less amount representing interest	$	(112)
Present value of operating lease liabilities	$	2,168
Less current installments of obligation under current-operating lease liabilities	$	1,532
Obligations under long-term operating lease liabilities, excluding current installments	$	636
Weighted-average remaining lease term - operating leases (years)	1.08
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 December 31, 2022, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $891, respectively. The obligations under financing 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 $181 for both the years ended December 31, 2022 and 2021.

The future undiscounted lease payments under this financing lease as of December 31, 2022 are:

2023	$	22
Total undiscounted lease payments	$	22
Less amount representing interest	$	—
Present value of financing lease liabilities	$	22
Less current installments of obligation under accrued other	$	22
Obligations under other long-term liabilities, excluding current installments	$	—
Weighted-average remaining lease term - finance leases (years)	0.17
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone 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 product 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 $3,811 as of December 31, 2022 and the non-current portion of the net investment in these leases was $5,036 as of December 31, 2022. 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 $764 and $882 during the year ended December 31, 2022 and 2021, respectively.

The future undiscounted cash flows from these leases as of December 31, 2022 are:

2023	$	4,365
2024	2,955
2025	1,591
2026	738
2027	257
Total undiscounted cash flows	$	9,906
Present value of lease payments	$	8,847
Difference between undiscounted cash flows and discounted cash flows	$	1,059

The Company entered into three-year leases for its TracPhone 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 December 31, 2022, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,873 and $516, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $360 for the year ended December 31, 2022.

For the year ended December 31, 2022, lease revenue of $537 was recognized in service sales in the statements of operations.

As of December 31, 2022, minimum future lease payments to be received on the operating leases are as follows:

2023	552
2024	342
2025	23
Total	$	917

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $2,103 and $3,963 for the year ended December 31, 2022 and 2021, respectively. Short-term operating lease costs was $182 and $237 for the years ended December 31, 2022 and 2021, respectively. Maturities of lease liabilities as of December 31, 2022 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Years ending December 31,
2023	$	1,610
2024	493
2025	53
2026	46
2027 and thereafter	78
Total undiscounted lease payments	$	2,280
Less amount representing interest	$	(112)
Present value of operating lease liabilities	$	2,168
Less current installments of obligation under current-operating lease liabilities	$	1,532
Obligations under long-term operating lease liabilities, excluding current installments	$	636
Weighted-average remaining lease term - operating leases (years)	1.08
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 December 31, 2022, the gross costs and accumulated depreciation associated with this lease are included in revenue generating assets and amounted to $1,268 and $891, respectively. The obligations under financing 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 $181 for both the years ended December 31, 2022 and 2021.

The future undiscounted lease payments under this financing lease as of December 31, 2022 are:

2023	$	22
Total undiscounted lease payments	$	22
Less amount representing interest	$	—
Present value of financing lease liabilities	$	22
Less current installments of obligation under accrued other	$	22
Obligations under other long-term liabilities, excluding current installments	$	—
Weighted-average remaining lease term - finance leases (years)	0.17
Weighted-average discount rate - finance leases	1.53		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone 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 product 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 $3,811 as of December 31, 2022 and the non-current portion of the net investment in these leases was $5,036 as of December 31, 2022. 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 $764 and $882 during the year ended December 31, 2022 and 2021, respectively.

The future undiscounted cash flows from these leases as of December 31, 2022 are:

2023	$	4,365
2024	2,955
2025	1,591
2026	738
2027	257
Total undiscounted cash flows	$	9,906
Present value of lease payments	$	8,847
Difference between undiscounted cash flows and discounted cash flows	$	1,059

The Company entered into three-year leases for its TracPhone 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 December 31, 2022, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,873 and $516, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $360 for the year ended December 31, 2022.

For the year ended December 31, 2022, lease revenue of $537 was recognized in service sales in the statements of operations.

As of December 31, 2022, minimum future lease payments to be received on the operating leases are as follows:

2023	552
2024	342
2025	23
Total	$	917