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Leases

6 Months Ended

Jun. 30, 2019

Lessee Disclosures

Our operating leases consist primarily of leases for office space, data centers and satellite ground facilities. We recognized right-of-use assets and lease liabilities for such leases in connection with our adoption of ASC 842 as of January 1, 2019 (see Note 2). We report operating lease right-of-use assets in Operating lease right-of-use assets and we report the current and noncurrent portions of our operating lease liabilities in Accrued expenses and other and Operating lease liabilities, respectively. Our finance leases consist primarily of leases of satellite capacity. We report finance lease right-of-use assets in Property and equipment, net and we report the current and noncurrent portions of our finance lease liabilities in Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations, net, respectively. Our Condensed Consolidated Balance Sheets includes the following amounts for right-of-use assets and lease liabilities as of June 30, 2019 (amounts in thousands):



	As of June 30, 2019

Right-of-use assets:
Operating	$	113,643
Finance	544,565
Total right-of-use assets	$	658,208

Lease liabilities:
Current:
Operating	$	16,181
Finance	42,682
Noncurrent:
Operating	94,979
Finance	166,225
Total lease liabilities	$	320,067

Finance lease assets are reported net of accumulated amortization of $511 million as of June 30, 2019.

The following tables detail components of lease cost and weighted average lease terms and discount rates for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Lease cost:
Operating lease cost	$	6,411	$	12,278
Finance lease cost:
Amortization of right-of-use assets	20,577		41,242
Interest on lease liabilities	5,770		11,788
Short-term lease cost	156		276
Variable lease cost	1,422		3,392
Total lease cost	$	34,336	$	68,976



	As of June 30, 2019

Lease term and discount rate:
Weighted average remaining lease term (in years):
Finance leases	4.35
Operating leases	10.16

Weighted average discount rate:
Finance leases	10.77	%
Operating leases	6.18	%

The following table details cash flows for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,046	$	11,417
Operating cash flows from finance leases	$	5,770	$	11,788
Financing cash flows from finance leases	$	10,022	$	19,780

We obtained right-of-use assets in exchange for lease liabilities of de minimis and $1 million upon commencement of operating leases for the three and six months ended June 30, 2019, respectively.

The following table presents maturities of our lease liabilities as of June 30, 2019 (amounts in thousands):



	Operating Leases			Finance Leases			Total

Year ending December 31,
2019 (remainder)	$	11,811		$	31,591		$	43,402
2020	19,858			63,266			83,124
2021	16,403			59,692			76,095
2022	14,209			41,040			55,249
2023	13,373			40,942			54,315
After 2023	75,926			30,707			106,633
Total lease payments	151,580			267,238			418,818
Less: Interest	(40,420		)	(58,331		)	(98,751		)
Present value of lease liabilities	$	111,160		$	208,907		$	320,067

As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows (amounts in thousands):



	Amounts

Year ending December 31,
2019	$	21,146
2020	18,081
2021	13,873
2022	10,118
2023	8,814
Thereafter	21,886
Total	$	93,918

Lessor Disclosures

We report revenue from sales-type leases at the commencement date in Equipment revenue and we report periodic interest income on sales-type lease receivables in Services and other revenue. We report operating lease revenue in Services and other revenue. The following table details our lease revenue as follows (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Sales-type lease revenue:
Revenue at lease commencement	$	1,188	$	1,876
Interest income	258		510

Operating lease revenue	92,582		185,439
Total lease revenue	$	94,028	$	187,825

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $4 million as of June 30, 2019.

The following table presents maturities of our operating lease payments as of June 30, 2019 (amounts in thousands):



	Amounts

Year ending December 31,
2019 (remainder)	$	152,187
2020	260,881
2021	229,209
2022	150,899
2023	41,011
After 2023	194,910
Total lease payments	$	1,029,097

Property and equipment, net as of June 30, 2019 and Depreciation and amortization for the three and six months then ended included the following amounts for assets subject to operating leases (amounts in thousands):



	As of June 30, 2019						For the three months ended June 30, 2019		For the six months ended June 30, 2019
	Cost		Accumulated Depreciation		Net		Depreciation Expense

Customer premises equipment	$	1,270,959	$	953,646	$	317,313	$	46,839	$	92,651
Satellites	1,552,245		879,760		672,485		32,600		65,201
Real estate	100,049		30,836		69,213		558		1,116
Total	$	2,923,253	$	1,864,242	$	1,059,011	$	79,997	$	158,968

LEASES

Lessee Disclosures



	As of June 30, 2019

Right-of-use assets:
Operating	$	113,643
Finance	544,565
Total right-of-use assets	$	658,208

Lease liabilities:
Current:
Operating	$	16,181
Finance	42,682
Noncurrent:
Operating	94,979
Finance	166,225
Total lease liabilities	$	320,067

Finance lease assets are reported net of accumulated amortization of $511 million as of June 30, 2019.

The following tables detail components of lease cost and weighted average lease terms and discount rates for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Lease cost:
Operating lease cost	$	6,411	$	12,278
Finance lease cost:
Amortization of right-of-use assets	20,577		41,242
Interest on lease liabilities	5,770		11,788
Short-term lease cost	156		276
Variable lease cost	1,422		3,392
Total lease cost	$	34,336	$	68,976



	As of June 30, 2019

Lease term and discount rate:
Weighted average remaining lease term (in years):
Finance leases	4.35
Operating leases	10.16

Weighted average discount rate:
Finance leases	10.77	%
Operating leases	6.18	%

The following table details cash flows for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,046	$	11,417
Operating cash flows from finance leases	$	5,770	$	11,788
Financing cash flows from finance leases	$	10,022	$	19,780

We obtained right-of-use assets in exchange for lease liabilities of de minimis and $1 million upon commencement of operating leases for the three and six months ended June 30, 2019, respectively.

The following table presents maturities of our lease liabilities as of June 30, 2019 (amounts in thousands):



	Operating Leases			Finance Leases			Total

Year ending December 31,
2019 (remainder)	$	11,811		$	31,591		$	43,402
2020	19,858			63,266			83,124
2021	16,403			59,692			76,095
2022	14,209			41,040			55,249
2023	13,373			40,942			54,315
After 2023	75,926			30,707			106,633
Total lease payments	151,580			267,238			418,818
Less: Interest	(40,420		)	(58,331		)	(98,751		)
Present value of lease liabilities	$	111,160		$	208,907		$	320,067

As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows (amounts in thousands):



	Amounts

Year ending December 31,
2019	$	21,146
2020	18,081
2021	13,873
2022	10,118
2023	8,814
Thereafter	21,886
Total	$	93,918

Lessor Disclosures



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Sales-type lease revenue:
Revenue at lease commencement	$	1,188	$	1,876
Interest income	258		510

Operating lease revenue	92,582		185,439
Total lease revenue	$	94,028	$	187,825

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $4 million as of June 30, 2019.

The following table presents maturities of our operating lease payments as of June 30, 2019 (amounts in thousands):



	Amounts

Year ending December 31,
2019 (remainder)	$	152,187
2020	260,881
2021	229,209
2022	150,899
2023	41,011
After 2023	194,910
Total lease payments	$	1,029,097



	As of June 30, 2019						For the three months ended June 30, 2019		For the six months ended June 30, 2019
	Cost		Accumulated Depreciation		Net		Depreciation Expense

Customer premises equipment	$	1,270,959	$	953,646	$	317,313	$	46,839	$	92,651
Satellites	1,552,245		879,760		672,485		32,600		65,201
Real estate	100,049		30,836		69,213		558		1,116
Total	$	2,923,253	$	1,864,242	$	1,059,011	$	79,997	$	158,968

LEASES

Lessee Disclosures



	As of June 30, 2019

Right-of-use assets:
Operating	$	113,643
Finance	544,565
Total right-of-use assets	$	658,208

Lease liabilities:
Current:
Operating	$	16,181
Finance	42,682
Noncurrent:
Operating	94,979
Finance	166,225
Total lease liabilities	$	320,067

Finance lease assets are reported net of accumulated amortization of $511 million as of June 30, 2019.

The following tables detail components of lease cost and weighted average lease terms and discount rates for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Lease cost:
Operating lease cost	$	6,411	$	12,278
Finance lease cost:
Amortization of right-of-use assets	20,577		41,242
Interest on lease liabilities	5,770		11,788
Short-term lease cost	156		276
Variable lease cost	1,422		3,392
Total lease cost	$	34,336	$	68,976



	As of June 30, 2019

Lease term and discount rate:
Weighted average remaining lease term (in years):
Finance leases	4.35
Operating leases	10.16

Weighted average discount rate:
Finance leases	10.77	%
Operating leases	6.18	%

The following table details cash flows for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,046	$	11,417
Operating cash flows from finance leases	$	5,770	$	11,788
Financing cash flows from finance leases	$	10,022	$	19,780

We obtained right-of-use assets in exchange for lease liabilities of de minimis and $1 million upon commencement of operating leases for the three and six months ended June 30, 2019, respectively.

The following table presents maturities of our lease liabilities as of June 30, 2019 (amounts in thousands):



	Operating Leases			Finance Leases			Total

Year ending December 31,
2019 (remainder)	$	11,811		$	31,591		$	43,402
2020	19,858			63,266			83,124
2021	16,403			59,692			76,095
2022	14,209			41,040			55,249
2023	13,373			40,942			54,315
After 2023	75,926			30,707			106,633
Total lease payments	151,580			267,238			418,818
Less: Interest	(40,420		)	(58,331		)	(98,751		)
Present value of lease liabilities	$	111,160		$	208,907		$	320,067

As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows (amounts in thousands):



	Amounts

Year ending December 31,
2019	$	21,146
2020	18,081
2021	13,873
2022	10,118
2023	8,814
Thereafter	21,886
Total	$	93,918

Lessor Disclosures



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Sales-type lease revenue:
Revenue at lease commencement	$	1,188	$	1,876
Interest income	258		510

Operating lease revenue	92,582		185,439
Total lease revenue	$	94,028	$	187,825

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $4 million as of June 30, 2019.

The following table presents maturities of our operating lease payments as of June 30, 2019 (amounts in thousands):



	Amounts

Year ending December 31,
2019 (remainder)	$	152,187
2020	260,881
2021	229,209
2022	150,899
2023	41,011
After 2023	194,910
Total lease payments	$	1,029,097



	As of June 30, 2019						For the three months ended June 30, 2019		For the six months ended June 30, 2019
	Cost		Accumulated Depreciation		Net		Depreciation Expense

Customer premises equipment	$	1,270,959	$	953,646	$	317,313	$	46,839	$	92,651
Satellites	1,552,245		879,760		672,485		32,600		65,201
Real estate	100,049		30,836		69,213		558		1,116
Total	$	2,923,253	$	1,864,242	$	1,059,011	$	79,997	$	158,968

LEASES

Lessee Disclosures



	As of June 30, 2019

Right-of-use assets:
Operating	$	113,643
Finance	544,565
Total right-of-use assets	$	658,208

Lease liabilities:
Current:
Operating	$	16,181
Finance	42,682
Noncurrent:
Operating	94,979
Finance	166,225
Total lease liabilities	$	320,067

Finance lease assets are reported net of accumulated amortization of $511 million as of June 30, 2019.

The following tables detail components of lease cost and weighted average lease terms and discount rates for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Lease cost:
Operating lease cost	$	6,411	$	12,278
Finance lease cost:
Amortization of right-of-use assets	20,577		41,242
Interest on lease liabilities	5,770		11,788
Short-term lease cost	156		276
Variable lease cost	1,422		3,392
Total lease cost	$	34,336	$	68,976



	As of June 30, 2019

Lease term and discount rate:
Weighted average remaining lease term (in years):
Finance leases	4.35
Operating leases	10.16

Weighted average discount rate:
Finance leases	10.77	%
Operating leases	6.18	%

The following table details cash flows for operating leases and finance leases (amounts in thousands):



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,046	$	11,417
Operating cash flows from finance leases	$	5,770	$	11,788
Financing cash flows from finance leases	$	10,022	$	19,780

We obtained right-of-use assets in exchange for lease liabilities of de minimis and $1 million upon commencement of operating leases for the three and six months ended June 30, 2019, respectively.

The following table presents maturities of our lease liabilities as of June 30, 2019 (amounts in thousands):



	Operating Leases			Finance Leases			Total

Year ending December 31,
2019 (remainder)	$	11,811		$	31,591		$	43,402
2020	19,858			63,266			83,124
2021	16,403			59,692			76,095
2022	14,209			41,040			55,249
2023	13,373			40,942			54,315
After 2023	75,926			30,707			106,633
Total lease payments	151,580			267,238			418,818
Less: Interest	(40,420		)	(58,331		)	(98,751		)
Present value of lease liabilities	$	111,160		$	208,907		$	320,067

As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows (amounts in thousands):



	Amounts

Year ending December 31,
2019	$	21,146
2020	18,081
2021	13,873
2022	10,118
2023	8,814
Thereafter	21,886
Total	$	93,918

Lessor Disclosures



	For the three months ended June 30, 2019		For the six months ended June 30, 2019

Sales-type lease revenue:
Revenue at lease commencement	$	1,188	$	1,876
Interest income	258		510

Operating lease revenue	92,582		185,439
Total lease revenue	$	94,028	$	187,825

Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $4 million as of June 30, 2019.

The following table presents maturities of our operating lease payments as of June 30, 2019 (amounts in thousands):



	Amounts

Year ending December 31,
2019 (remainder)	$	152,187
2020	260,881
2021	229,209
2022	150,899
2023	41,011
After 2023	194,910
Total lease payments	$	1,029,097



	As of June 30, 2019						For the three months ended June 30, 2019		For the six months ended June 30, 2019
	Cost		Accumulated Depreciation		Net		Depreciation Expense

Customer premises equipment	$	1,270,959	$	953,646	$	317,313	$	46,839	$	92,651
Satellites	1,552,245		879,760		672,485		32,600		65,201
Real estate	100,049		30,836		69,213		558		1,116
Total	$	2,923,253	$	1,864,242	$	1,059,011	$	79,997	$	158,968