Leases

3 Months Ended

Mar. 31, 2022

Leases

Leases

8.Leases

We enter into operating and finance leases for, among other things, communication towers, satellites, office space, fiber and transport equipment, warehouses and distribution centers, vehicles and other equipment. Our leases have remaining lease terms from one to 16 years, some of which include renewal options, and some of which include options to terminate the leases within one year.

During the fourth quarter of 2021, our QuetzSat-1 finance lease expired. As of March 31, 2022, our Anik F3 and Nimiq 5 satellites were accounted for as financing leases. However, during April 2022, we extended this lease and as a result, Anik F3 will subsequently be 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
	March 31,
	2022		2021
	(In thousands)
Operating lease cost (1)	$	61,102	$	14,783
Short-term lease cost (2)		3,554		3,472
Finance lease cost:
Amortization of right-of-use assets (3)		9,893		17,829
Interest on lease liabilities (3)		2,732		4,288
Total finance lease cost (3)		12,625		22,117
Total lease costs	$	77,281	$	40,372

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

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

(3) The decrease in finance lease cost is primarily related to the QuetzSat-1 finance lease, which expired in November 2021.

Supplemental cash flow information related to leases was as follows:
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	For the Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24,360	$	16,919
Operating cash flows from finance leases	$	917	$	4,058
Financing cash flows from finance leases	$	4,420	$	17,157
Right-of-use assets obtained in exchange for lease obligations:
Operating leases (1)	$	543,868	$	20,073
Finance leases	$	—	$	—

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

Supplemental balance sheet information related to leases was as follows:

	As of
	March 31,		December 31,
	2022		2021
	(In thousands)
Operating Leases:
Operating lease assets (1)	$	1,972,455	$	1,493,410
Other current liabilities	$	98,286	$	75,748
Operating lease liabilities (1)		1,944,652		1,453,395
Total operating lease liabilities	$	2,042,938	$	1,529,143
Finance Leases:
Property and equipment, gross	$	568,889	$	568,889
Accumulated depreciation		(509,082)		(499,188)
Property and equipment, net	$	59,807	$	69,701
Other current liabilities	$	36,078	$	34,772
Other long-term liabilities		59,160		64,886
Total finance lease liabilities	$	95,238	$	99,658
Weighted Average Remaining Lease Term:
Operating leases		12.8 years		12.9 years
Finance leases		2.5 years		2.6 years
Weighted Average Discount Rate:
Operating leases		5.8%		5.3%
Finance leases		11.1%		11.0%

(1) The increase in operating lease assets and liabilities primarily related to communication tower leases.

Maturities of lease liabilities as of March 31, 2022 were as follows:

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2022 (remaining nine months)	$	98,534	$	37,811	$	136,345
2023		153,190		41,030		194,220
2024		173,550		30,707		204,257
2025		195,849		—		195,849
2026		218,969		—		218,969
Thereafter		2,255,337		—		2,255,337
Total lease payments		3,095,429		109,548		3,204,977
Less: Imputed interest		(1,052,491)		(14,310)		(1,066,801)
Total		2,042,938		95,238		2,138,176
Less: Current portion		(98,286)		(36,078)		(134,364)
Long-term portion of lease obligations	$	1,944,652	$	59,160	$	2,003,812