Leases (Tables)
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6 Months Ended |
Jun. 30, 2020 |
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| Leases [Abstract] |
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| Lease, Cost |
The following table provides the components of the finance lease cost for the three and six months ended June 30, 2020 and 2019 (in thousands):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
| Amortization of right-of-use asset, net of lease incentive and contract liability credits |
$ |
420 |
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$ |
675 |
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$ |
840 |
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$ |
675 |
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| Interest accretion on finance lease liabilities |
371 |
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470 |
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754 |
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470 |
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| Total finance lease cost |
$ |
791 |
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$ |
1,145 |
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$ |
1,594 |
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$ |
1,145 |
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The following table discloses the weighted-average remaining lease term and IBR, as well as supplemental cash flow information (in thousands):
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Six Months Ended June 30, 2020 |
| Supplemental cash flow information |
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| Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
3,800 |
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| Cash paid for amounts included in the measurement of finance lease liabilities |
$ |
1,800 |
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| Right-of-use-assets obtained in exchange for operating lease obligations |
$ |
194,000 |
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| Right-of-use-assets obtained in exchange for finance lease obligations |
$ |
— |
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Weighted average remaining lease term -- real estate operating leases
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6.77 years |
Weighted average remaining lease term -- teleport co-location operating leases
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4.43 years |
Weighted average remaining lease term -- satellite capacity operating leases
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0.50 years |
Weighted average remaining lease term -- finance lease
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6.00 years |
Weighted average IBR -- real estate operating leases
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9.91 |
% |
Weighted average IBR -- teleport co-location operating leases
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8.92 |
% |
Weighted average IBR -- teleport satellite capacity operating leases
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7.24 |
% |
Weighted average IBR -- finance lease
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8.30 |
% |
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| Operating Lease, Lease Income |
The service revenues (with embedded operating equipment leases) and recognized revenues on sales-type equipment leases in which the Company acts as the lessor for the three and six months ended June 30, 2020 and 2019, is presented in the following table (in thousands):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2020 |
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2019 |
2020 |
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2019 |
Bandwidth service and equipment revenues(1)
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$ |
20,281 |
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$ |
36,154 |
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$ |
46,304 |
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$ |
70,261 |
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Earned revenues on sales-type leases at commencement(2)
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812 |
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977 |
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915 |
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1,310 |
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| Total Licensing and Service Revenues -- Maritime and Land Connectivity |
$ |
21,093 |
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$ |
37,131 |
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$ |
47,219 |
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$ |
71,571 |
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(1) This is presented as part of Revenues -- Licensing and services in our condensed consolidated statement of operations, and includes the equipment lease component that is embedded in the overall bandwidth service arrangement. Since we adopted the practical expedient to not separate the lease and non-lease components as allowed with the ASC 842 implementation as of January 1, 2019, we will continue to classify existing embedded equipment arrangements as operating leases, to the extent unmodified.
(2) This includes the equipment lease revenues recognized at commencement date of the customer equipment arrangements classified as sales-type leases. As equipment leasing is a standard component in our connectivity business model, we present equipment revenues relating to these sales-type leases on a gross basis, and recognize a corresponding cost of sales equal to the net book value of the leased equipment. Interest income component is considered immaterial.
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| Lessee, Operating Lease, Liability, Maturity |
The following table reflects a summary of Annual future minimum lease payments and the Company’s lease assets as of June 30, 2020 (in thousands):
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As a Lessee |
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As a Lessor |
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Real Estate |
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Satellite Capacity |
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Satellite Capacity |
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Teleport
Co-Location |
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Total |
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Equipment Held by Customers |
| Lease Classification |
Operating |
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Finance |
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Operating |
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Operating |
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Sales-Type |
| 2020 (remaining six months) |
$ |
2,975 |
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$ |
1,879 |
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$ |
689 |
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$ |
937 |
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$ |
6,480 |
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$ |
472 |
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| 2021 |
5,270 |
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3,758 |
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— |
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1,777 |
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10,805 |
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940 |
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| 2022 |
4,574 |
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3,758 |
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— |
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1,452 |
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9,784 |
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585 |
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| 2023 |
3,620 |
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3,758 |
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— |
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561 |
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7,939 |
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261 |
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| 2024 |
3,625 |
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3,758 |
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— |
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550 |
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7,933 |
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180 |
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| Thereafter |
10,896 |
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5,638 |
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— |
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1,013 |
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17,547 |
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43 |
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| Total Future Lease Payments |
$ |
30,960 |
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$ |
22,549 |
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$ |
689 |
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$ |
6,290 |
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$ |
60,488 |
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$ |
2,481 |
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| Less: Imputed interest |
(8,699) |
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(4,712) |
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(10) |
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(1,110) |
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(14,531) |
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(298) |
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| Present Value of Lease Liabilities |
$ |
22,261 |
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$ |
17,837 |
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$ |
679 |
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$ |
5,180 |
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$ |
45,957 |
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| Net Investment in Sales-Type Leases |
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$ |
2,183 |
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| Lessor, Operating Lease, Book Value of Assets Subject to Leases |
The book value of the equipment held by customers under operating leases, which are classified as “Equipment” in Note 5- Property & Equipment, is as follows:
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June 30, 2020 |
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December 31, 2019 |
| Equipment |
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| Gross balance |
$ |
53,884 |
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$ |
57,369 |
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| Accumulated depreciation |
(33,623) |
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(30,692) |
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| Net Book Value |
$ |
20,261 |
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$ |
26,677 |
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