Leases

9 Months Ended

Sep. 30, 2024

Leases

Leases

7.Leases

Lessee Accounting

We enter into non-cancelable operating and finance leases for, among other things, communication towers, satellites, satellite-related ground infrastructure, data centers, 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 13 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.

Our Nimiq 5 satellite is accounted for as finance lease within our Pay-TV segment. Subsequent to September 30, 2024, we extended the Nimiq 5 lease to October 2029 and as a result, beginning in the fourth quarter of 2024, we will account for the Nimiq 5 lease as an operating lease. Substantially all of our remaining leases are accounted for as operating leases, including our Anik F3 satellite lease.

The components of lease expense were as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(In thousands)
Operating lease cost (1)	$	150,048	$	130,288	$	461,172	$	364,622
Short-term lease cost (2)		3,089		2,686		8,951		8,107
Finance lease cost:
Amortization of right-of-use assets		12,847		13,316		40,211		53,505
Interest on lease liabilities		1,980		3,521		7,169		10,915
Total finance lease cost		14,827		16,837		47,380		64,420
Total lease costs	$	167,964	$	149,811	$	517,503	$	437,149

(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:
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	For the Nine Months Ended
	September 30,
	2024		2023
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	344,810	$	233,135
Operating cash flows from finance leases	$	7,363	$	9,778
Financing cash flows from finance leases	$	49,648	$	37,936
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	406,101	$	559,539
Finance leases	$	—	$	53,771

Supplemental balance sheet information related to leases was as follows:

	As of
	September 30,		December 31,
	2024		2023
	(In thousands)
Operating Leases:
Operating lease assets	$	3,030,380	$	2,934,862
Other current liabilities	$	471,663	$	301,172
Operating lease liabilities		2,999,747		2,992,863
Total operating lease liabilities	$	3,471,410	$	3,294,035
Finance Leases:
Property and equipment, gross	$	465,549	$	465,549
Accumulated depreciation		(410,467)		(370,768)
Property and equipment, net	$	55,082	$	94,781
Other current liabilities	$	29,386	$	56,459
Other long-term liabilities		44,623		67,199
Total finance lease liabilities	$	74,009	$	123,658
Weighted Average Remaining Lease Term:
Operating leases		10.0 years		10.7 years
Finance leases		2.0 years		2.2 years
Weighted Average Discount Rate:
Operating leases		10.3%		9.5%
Finance leases		9.3%		9.7%

Maturities of lease liabilities as of September 30, 2024 were as follows:

	Maturities of Lease Liabilities
	Operating		Finance
For the Years Ending December 31,	Leases		Leases		Total
	(In thousands)
2024 (remaining three months)	$	95,440	$	8,463	$	103,903
2025		504,878		35,392		540,270
2026		541,249		36,588		577,837
2027		545,983		2,574		548,557
2028		505,253		—		505,253
Thereafter		3,371,530		—		3,371,530
Total lease payments		5,564,333		83,017		5,647,350
Less: Imputed interest		(2,092,923)		(9,008)		(2,101,931)
Total		3,471,410		74,009		3,545,419
Less: Current portion		(471,663)		(29,386)		(501,049)
Long-term portion of lease obligations	$	2,999,747	$	44,623	$	3,044,370