| 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 | | | | | | | | | | | | |
|