Leases

6 Months Ended

Jun. 30, 2023

8.Leases

We enter into non-cancelable operating and finance leases for, among other things, communication towers, satellites, office space, dark fiber and transport equipment, warehouses and distribution centers, vehicles and other equipment. Substantially all of our leases have remaining lease terms from one to 15 years, some of which include renewal options, and some of which include options to terminate the leases within one year. For certain arrangements (generally communication towers), 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 Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022

	(In thousands)
Operating lease cost (1)	$	122,901	$	76,810	$	234,334	$	137,912

Short-term lease cost (2)		2,703		3,385		5,421		6,939

Finance lease cost:
Amortization of right-of-use assets		13,133		6,048		40,189		15,941
Interest on lease liabilities		3,824		2,426		7,394		5,158
Total finance lease cost		16,957		8,474		47,583		21,099
Total lease costs	$	142,561	$	88,669	$	287,338	$	165,950

(1)	The increase in operating lease cost is primarily related to communication tower leases.

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

Supplemental cash flow information related to leases was as follows:


	For the Six Months Ended
	June 30,
	2023		2022

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	142,803	$	55,764
Operating cash flows from finance leases	$	6,796	$	4,218
Financing cash flows from finance leases	$	24,617	$	18,444

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	407,195	$	900,154
Finance leases	$	51,110	$	31,812

Supplemental balance sheet information related to leases was as follows:


	As of
	June 30,		December 31,
	2023		2022

	(In thousands)
Operating Leases:
Operating lease assets	$	2,965,682	$	2,687,522

Other current liabilities	$	250,150	$	194,030
Operating lease liabilities		2,995,945		2,687,883
Total operating lease liabilities	$	3,246,095	$	2,881,913

Finance Leases:
Property and equipment, gross	$	462,887	$	411,778
Accumulated depreciation		(343,991)		(303,802)
Property and equipment, net	$	118,896	$	107,976

Other current liabilities	$	58,748	$	48,066
Other long-term liabilities		91,098		75,287
Total finance lease liabilities	$	149,846	$	123,353

Weighted Average Remaining Lease Term:
Operating leases		11.3 years		11.8 years
Finance leases		2.5 years		2.7 years

Weighted Average Discount Rate:
Operating leases		7.9%		7.3%
Finance leases		9.7%		9.8%

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


	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total

	(In thousands)
2023 (remaining six months)	$	171,308	$	37,665	$	208,973
2024		364,393		61,934		426,327
2025		400,394		34,344		434,738
2026		431,629		36,588		468,217
2027		434,407		2,574		436,981
Thereafter		3,295,037		—		3,295,037
Total lease payments		5,097,168		173,105		5,270,273
Less: Imputed interest		(1,851,073)		(23,259)		(1,874,332)
Total		3,246,095		149,846		3,395,941
Less: Current portion		(250,150)		(58,748)		(308,898)
Long-term portion of lease obligations	$	2,995,945	$	91,098	$	3,087,043