| LEASES |
NOTE 7. LEASES Lessee Accounting We enter into non-cancelable operating and finance leases for, among other things, satellites, satellite-related ground infrastructure, data centers, office space, warehouses and distribution centers. Substantially all of our leases have remaining lease terms from one to 13 years with a weighted average lease term of 6.3 years, some of which include renewal options, and some of which include options to terminate the leases within one year. For certain arrangements, the lease term includes the non-cancelable period plus the renewal period that we are reasonably certain to exercise. Our Eutelsat 65 West A, Telesat T19V and EchoStar 105/SES-11 satellites are accounted for as finance leases. Substantially all of our remaining leases are accounted for as operating leases, including our EchoStar XXIV satellite lease. Refer to Note 12 for further details on the EchoStar XXIV operating lease. The following table presents the amounts for ROU assets and lease liabilities: | | | | | | | | | | As of | | | | March 31, 2025 | | December 31, 2024 | | | | | (In thousands) | | Right-of-use assets: | | | | | | | | Operating | | $ | 914,043 | | $ | 939,896 | | Finance | | | 180,580 | | | 183,391 | | Total right-of-use assets | | $ | 1,094,623 | | $ | 1,123,287 | | | | | | | | | | Lease liabilities: | | | | | | | | Current: | | | | | | | | Operating | | $ | 118,560 | | $ | 72,393 | | Finance | | | — | | | — | | Total current | | | 118,560 | | | 72,393 | | Noncurrent: | | | | | | | | Operating | | | 802,444 | | | 830,629 | | Finance | | | — | | | — | | Total noncurrent | | | 802,444 | | | 830,629 | | Total lease liabilities | | $ | 921,004 | | $ | 903,022 | | | | | | | | | | Weighted Average Remaining Lease Term: | | | | | | | | Finance leases | | | 0.0 years | | | 0.0 years | | Operating leases | | | 6.3 years | | | 6.6 years | | | | | | | | | | Weighted Average Discount Rate: | | | | | | | | Finance leases | | | — | % | | — | % | Operating leases | | | 12.0 | % | | 12.0 | % |
As of March 31, 2025 and December 31, 2024, we have prepaid our obligations regarding all of our finance ROU assets. Finance lease assets are reported net of accumulated amortization of $171 million and $162 million as of March 31, 2025 and December 31, 2024, respectively. The following table presents the components of lease expense, weighted-average lease terms and discount rates for operating and finance leases: | | | | | | | | | For the Three Months Ended | | | March 31, | | | 2025 | | 2024 | | | | (In thousands) | Lease cost: | | | | | | | Operating lease cost | | $ | 6,572 | | $ | 6,647 | Operating lease cost - EchoStar XXIV | | | 47,675 | | | 47,757 | Total operating lease cost | | | 54,247 | | | 54,404 | Finance lease cost: | | | | | | | Amortization of right-of-use assets | | | 5,832 | | | 4,523 | Interest on lease liabilities | | | — | | | — | Total finance lease cost | | | 5,832 | | | 4,523 | Short-term lease cost | | | — | | | — | Variable lease cost | | | — | | | — | Total lease cost | | $ | 60,079 | | $ | 58,927 |
Supplemental cash flow information related to leases was as follows: | | | | | | | | | For the Three Months Ended | | | March 31, | | | 2025 | | 2024 | | | | (In thousands) | Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | Operating cash flows from operating leases | | $ | 10,450 | | $ | 170,259 | Operating cash flows from finance leases | | | — | | | — | Financing cash flows from finance leases | | | — | | | — | | | | | | | | Right-of-use assets obtained in exchange for lease obligations: | | | | | | | Operating leases | | | 464 | | | — | Finance leases | | | — | | | — |
Refer to Note 12 for further details on EchoStar XXIV operating lease. Maturities of lease liabilities as of March 31, 2025 were as follows: | | | | For the Years Ending December 31, | | Total | | | | (In thousands) | 2025 (remaining nine months) | | $ | 163,023 | 2026 | | | 216,462 | 2027 | | | 215,109 | 2028 | | | 212,980 | 2029 | | | 212,066 | Thereafter | | | 272,071 | Total lease payments | | | 1,291,711 | Less: Imputed interest | | | (370,707) | Total | | | 921,004 | Less: Current portion | | | 118,560 | Long-term portion of lease obligations | | $ | 802,444 |
Lessor Accounting We lease satellite capacity, communications equipment and real estate to certain of our customers. The following table presents our lease revenue by type of lease: | | | | | | | | | For the Three Months Ended March 31, | | | 2025 | | 2024 | | Sales-type lease revenue: | | (In thousands) | Revenue at lease commencement | | $ | 1,783 | | $ | 549 | Interest income | | | 414 | | | 535 | Total sales-type lease revenue | | | 2,197 | | | 1,084 | Operating lease revenue | | | 2,487 | | | 6,555 | Total lease revenue (1) | | $ | 4,684 | | $ | 7,639 |
| (1) | The reduction in total lease revenue relates to the loss of a single significant customer. |
Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $22 million and $26 million as of March 31, 2025 and December 31, 2024, respectively. The following table presents future operating lease payments to be received as of March 31, 2025: | | | | For the Years Ending December 31, | | Total | | | (In thousands) | 2025 (remaining nine months) | | $ | 7,506 | 2026 | | | 5,535 | 2027 | | | 3,745 | 2028 | | | 1,996 | 2029 | | | 889 | Thereafter | | | 158 | Total lease payments to be received | | $ | 19,829 |
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