Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

9.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.

During the fourth quarter of 2021, our QuetzSat-1 finance lease expired. 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 Years Ended December 31,
	2022		2021		2020
	(In thousands)
Operating lease cost (1)	$	332,385	$	89,565	$	71,863
Short-term lease cost (2)		13,328		12,956		11,870
Finance lease cost:
Amortization of right-of-use assets (3)		28,037		65,967		71,318
Interest on lease liabilities (3)		12,145		14,693		21,007
Total finance lease cost (3)		40,182		80,660		92,325
Total lease costs	$	385,895	$	183,181	$	176,058

(1) The increase in operating lease cost is 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, as well as 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,
	2022		2021		2020
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	163,320	$	72,479	$	72,352
Operating cash flows from finance leases	$	11,053	$	12,868	$	21,007
Financing cash flows from finance leases	$	42,617	$	62,679	$	65,979
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,398,050	$	1,467,983	$	47,225
Finance leases	$	66,312	$	—	$	—

Supplemental balance sheet information related to leases was as follows:

	As of December 31,
	2022		2021
	(In thousands)
Operating Leases:
Operating lease assets (1)	$	2,687,522	$	1,493,410
Other current liabilities	$	194,030	$	75,748
Operating lease liabilities (1)		2,687,883		1,453,395
Total operating lease liabilities	$	2,881,913	$	1,529,143
Finance Leases:
Property and equipment, gross	$	411,778	$	568,889
Accumulated depreciation		(303,802)		(499,188)
Property and equipment, net	$	107,976	$	69,701
Other current liabilities	$	48,066	$	34,772
Other long-term liabilities		75,287		64,886
Total finance lease liabilities	$	123,353	$	99,658
Weighted Average Remaining Lease Term:
Operating leases		11.8 years		12.9 years
Finance leases		2.7 years		2.6 years
Weighted Average Discount Rate:
Operating leases		7.3%		5.3%
Finance leases		9.8%		11.0%

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

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

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2023	$	268,453	$	58,031	$	326,484
2024		298,054		49,450		347,504
2025		328,988		20,045		349,033
2026		357,711		12,905		370,616
2027		360,164		—		360,164
Thereafter		2,898,888		—		2,898,888
Total lease payments		4,512,258		140,431		4,652,689
Less: Imputed interest		(1,630,345)		(17,078)		(1,647,423)
Total		2,881,913		123,353		3,005,266
Less: Current portion		(194,030)		(48,066)		(242,096)
Long-term portion of lease obligations	$	2,687,883	$	75,287	$	2,763,170