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Commitments and Contingencies
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3 Months Ended |
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Mar. 31, 2013
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
Commitments and Contingencies
Operating lease commitments
Operating lease commitments include payments on outstanding, noncancelable, operating lease obligations. The Company leases its operating facilities under noncancelable operating leases that expire through 2017. The Company also leases certain facilities and vehicles under month-to-month arrangements. Total rent expense for the three months ended March 31, 2013 and 2012 was $0.5 million and $0.1 million, respectively. The Company is responsible for certain operating expenses in connection with these leases.
Satellite Costs Commitments
In the first quarter of 2013 the Company signed an amendment to the Master Sales Agreement ("MSA") with its satellite service provider to provide for satellite capacity in Russia in support of its newly signed Russian airline customers. The amendment increases satellite cost commitments by $0.8 million for the remainder of 2013 and by $2.1 million for each of the years 2014 through 2016. The Company expenses these satellite fees in the month the service is provided as a charge to cost of services.
Legal Matters
From time to time, the Company is involved in certain claims and proceedings arising in the normal course of business. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that the outcome of the currently pending claims or legal proceedings in which the Company is currently involved will have a material adverse effect on the Company's financial statements.
Business Combination
As a result of the AIA Stock Purchase, the Company assumed certain commitments. AIA’s long-term commitments include contracts for office space leases and operating equipment leases of $5.6 million, movie license fees of $23.1 million and certain guaranteed minimum payments owed to movie content providers of $7.5 million. Additionally there are two earn-out commitments, which are part of the purchase price of prior AIA acquisitions of $1.2 million.
The operating lease contracts usually have a contract period from 1 to 5 years. The movie license contracts have a contract period of 3 years. Minimum payments for already signed contracts are mainly to be paid within 12 months. The earn-out payment will be due in the years 2014 through 2016.
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