Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

7. Leases

We enter into non-cancelable operating and finance leases for, among other things, satellites, office space, warehouses and distribution centers, vehicles, and other equipment. Our leases have remaining lease terms from one to nine years, some of which include renewal options, and some of which include options to terminate the leases within one year. For certain arrangements, the lease term includes the non-cancelable period plus the renewal period that we are reasonably certain to exercise.

Through the first quarter of 2022, our Anik F3 and Nimiq 5 satellites were accounted for as finance leases. However, during April 2022, we extended the Anik F3 lease and, as a result, it is currently accounted for as an operating lease. 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,				September 30,
	2023		2022		2023		2022
	(In thousands)
Operating lease cost (1)	$	14,109	$	42,585	$	57,116	$	124,187
Short-term lease cost (1)(2)		46,080		16,143		123,379		58,132
Finance lease cost:
Amortization of right-of-use assets		8,591		8,619		25,815		29,703
Interest on lease liabilities		1,096		2,009		3,992		6,777
Total finance lease cost		9,687		10,628		29,807		36,480
Total lease costs	$	69,876	$	69,356	$	210,302	$	218,799

(1) The decrease in “Operating lease cost” is primarily related to our intercompany satellite leases with DISH Network, which were reclassified to “Short-term lease costs” during 2022 and the first quarter of 2023. All of our satellite operating leases with DISH Network are now short-term leases.

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

Supplemental cash flow information related to leases was as follows:

	For the Nine Months Ended
	September 30,
	2023		2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	82,919	$	122,987
Operating cash flows from finance leases	$	5,780	$	6,735
Financing cash flows from finance leases	$	37,167	$	31,022
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	20,030	$	70,115
Finance leases	$	—	$	—

Supplemental balance sheet information related to leases was as follows:

	As of
	September 30,		December 31,
	2023		2022
	(In thousands)
Operating Leases:
Operating lease assets	$	93,294	$	130,454
Other current liabilities	$	39,119	$	60,203
Operating lease liabilities		59,372		75,142
Total operating lease liabilities	$	98,491	$	135,345
Finance Leases:
Property and equipment, gross	$	175,704	$	175,704
Accumulated depreciation		(141,305)		(115,469)
Property and equipment, net	$	34,399	$	60,235
Other current liabilities	$	40,967	$	38,102
Other long-term liabilities		—		31,104
Total finance lease liabilities	$	40,967	$	69,206
Weighted Average Remaining Lease Term:
Operating leases		4.0 years		3.7 years
Finance leases		1.0 years		1.8 years
Weighted Average Discount Rate:
Operating leases		7.5%		7.2%
Finance leases		10.0%		10.0%

Maturities of lease liabilities as of September 30, 2023 were as follows:

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2023 (remaining three months)	$	13,354	$	10,716	$	24,070
2024		39,125		32,147		71,272
2025		22,789		—		22,789
2026		12,540		—		12,540
2027		6,787		—		6,787
Thereafter		23,470		—		23,470
Total lease payments		118,065		42,863		160,928
Less: Imputed interest		(19,574)		(1,896)		(21,470)
Total		98,491		40,967		139,458
Less: Current portion		(39,119)		(40,967)		(80,086)
Long-term portion of lease obligations	$	59,372	$	—	$	59,372