Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

7.Leases

Lessee Accounting

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 satellite was accounted for as a finance lease. However, during April 2022, we extended the Anik F3 lease and as a result, it is currently accounted for as an operating lease. Nimiq 5 is accounted for as a finance lease. Substantially all of our remaining leases are accounted for as operating leases, including the remainder of our satellite fleet.

The components of lease expense were as follows:

	For the Years Ended December 31,
	2023		2022		2021
	(In thousands)
Operating lease cost (1)	$	70,262	$	166,599	$	217,635
Short-term lease cost (1)(2)		169,159		74,514		33,456
Finance lease cost:
Amortization of right-of-use assets (3)		34,448		38,322		49,496
Interest on lease liabilities (3)		4,845		8,566		13,122
Total finance lease cost (3)		39,293		46,888		62,618
Total lease costs	$	278,714	$	288,001	$	313,709

(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. In addition, the decrease in “Operating lease cost” from 2021 to 2022 was primarily related to the QuetzSat-1 lease, which expired in November 2021.

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

(3) The decrease in finance lease cost is primarily related to the Anik F3 finance lease that was extended in April 2022 and as a result is currently accounted for as an operating lease.

Supplemental cash flow information related to leases was as follows:

	For the Years Ended December 31,
	2023		2022		2021
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96,195	$	138,318	$	213,135
Operating cash flows from finance leases	$	6,633	$	6,733	$	13,002
Financing cash flows from finance leases	$	47,030	$	31,030	$	51,608
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	30,657	$	74,317	$	22,780
Finance leases	$	—	$	—	$	—

Supplemental balance sheet information related to leases was as follows:

	As of December 31,
	2023		2022
	(In thousands)
Operating Leases:
Operating lease assets	$	92,972	$	130,454
Other current liabilities	$	36,618	$	60,203
Operating lease liabilities		61,381		75,142
Total operating lease liabilities	$	97,999	$	135,345
Finance Leases:
Property and equipment, gross	$	175,704	$	175,704
Accumulated depreciation		(149,917)		(115,469)
Property and equipment, net	$	25,787	$	60,235
Other current liabilities	$	31,104	$	38,102
Other long-term liabilities		—		31,104
Total finance lease liabilities	$	31,104	$	69,206
Weighted Average Remaining Lease Term:
Operating leases		4.1 years		3.7 years
Finance leases		0.8 years		1.8 years
Weighted Average Discount Rate:
Operating leases		8.3%		7.2%
Finance leases		10.0%		10.0%

Maturities of lease liabilities as of December 31, 2023 were as follows:

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2024	$	41,709	$	32,147	$	73,856
2025		26,417		—		26,417
2026		15,898		—		15,898
2027		8,337		—		8,337
2028		7,361		—		7,361
Thereafter		17,792		—		17,792
Total lease payments		117,514		32,147		149,661
Less: Imputed interest		(19,515)		(1,043)		(20,558)
Total		97,999		31,104		129,103
Less: Current portion		(36,618)		(31,104)		(67,722)
Long-term portion of lease obligations	$	61,381	$	—	$	61,381