Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Entity Registrant Name | DISH Network CORP | |
Entity Central Index Key | 1,001,082 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 228,944,932 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 238,435,208 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 2,115,349 | $ 1,479,508 |
Marketable investment securities | 163,714 | 501,165 |
Trade accounts receivable, net of allowance for doubtful accounts of $12,739 and $15,511, respectively | 601,673 | 653,948 |
Inventory | 347,746 | 321,008 |
Other current assets | 237,079 | 329,394 |
Total current assets | 3,465,561 | 3,285,023 |
Noncurrent Assets: | ||
Restricted cash, cash equivalents and marketable investment securities | 72,638 | 72,407 |
Property and equipment, net | 2,106,931 | 2,183,661 |
FCC authorizations | 23,987,355 | 23,725,789 |
Other investment securities | 115,429 | 113,460 |
Other noncurrent assets, net | 407,019 | 393,426 |
Total noncurrent assets | 26,689,372 | 26,488,743 |
Total assets | 30,154,933 | 29,773,766 |
Current Liabilities: | ||
Trade accounts payable | 331,388 | 393,305 |
Deferred revenue and other | 742,838 | 709,074 |
Accrued programming | 1,595,619 | 1,571,273 |
Accrued interest | 223,590 | 282,006 |
Other accrued expenses (Note 9) | 790,000 | 803,822 |
Current portion of long-term debt and capital lease obligations | 1,008,902 | 1,068,524 |
Total current liabilities | 4,692,337 | 4,828,004 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and capital lease obligations, net of current portion | 15,152,076 | 15,134,441 |
Deferred tax liabilities | 2,112,421 | 2,019,538 |
Long-term deferred revenue and other long-term liabilities | 471,634 | 470,487 |
Total long-term obligations, net of current portion | 17,736,131 | 17,624,466 |
Total liabilities | 22,428,468 | 22,452,470 |
Commitments and Contingencies (Note 9) | ||
Redeemable Noncontrolling Interest | ||
Redeemable noncontrolling interests (Note 2) | 401,202 | 383,390 |
Stockholders' Equity (Deficit): | ||
Additional paid-in capital | 3,313,535 | 3,296,488 |
Accumulated other comprehensive income (loss) | 1,359 | 882 |
Accumulated earnings (deficit) | 4,005,260 | 3,635,380 |
Total DISH Network stockholders' equity (deficit) | 7,324,822 | 6,937,414 |
Noncontrolling interests | 441 | 492 |
Total stockholders' equity (deficit) | 7,325,263 | 6,937,906 |
Total liabilities and stockholders' equity (deficit) | 30,154,933 | 29,773,766 |
Class A common stock | ||
Stockholders' Equity (Deficit): | ||
Common stock | 2,284 | 2,280 |
Class B common stock | ||
Stockholders' Equity (Deficit): | ||
Common stock | $ 2,384 | $ 2,384 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Allowance for doubtful accounts on trade accounts receivable | $ 12,739 | $ 15,511 |
Common stock, par value (in dollars per share) | $ 86.08 | |
Class A common stock | ||
Current Assets: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 228,363,705 | 228,033,671 |
Common stock, shares outstanding | 228,363,705 | 228,033,671 |
Class B common stock | ||
Current Assets: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 238,435,208 | 238,435,208 |
Common stock, shares outstanding | 238,435,208 | 238,435,208 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Subscriber-related revenue | $ 3,422,704 | $ 3,644,086 |
Equipment sales and other revenue | 35,783 | 36,275 |
Revenue from Contract with Customer, Excluding Assessed Tax, Total | 3,458,487 | 3,680,361 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 7): | ||
Subscriber-related expenses | 2,184,951 | 2,243,187 |
Satellite and transmission expenses | 153,644 | 176,182 |
Cost of sales - equipment and other | 31,626 | 27,973 |
Subscriber acquisition costs: | ||
Cost of sales - subscriber promotion subsidies | 15,930 | 21,011 |
Other subscriber acquisition costs | 77,072 | 141,944 |
Subscriber acquisition advertising | 103,009 | 127,079 |
Total subscriber acquisition costs | 196,011 | 290,034 |
General and administrative expenses | 169,777 | 131,035 |
Depreciation and amortization (Note 7) | 192,972 | 204,630 |
Total costs and expenses | 2,928,981 | 3,073,041 |
Operating income (loss) | 529,506 | 607,320 |
Other Income (Expense): | ||
Interest income | 9,317 | 14,292 |
Interest expense, net of amounts capitalized | (2,957) | (29,170) |
Other, net | (34,808) | 4,745 |
Total other income (expense) | (28,448) | (10,133) |
Income (loss) before income taxes | 501,058 | 597,187 |
Income tax (provision) benefit, net | (115,737) | (207,112) |
Net income (loss) | 385,321 | 390,075 |
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 17,761 | 14,360 |
Net income (loss) attributable to DISH Network | $ 367,560 | $ 375,715 |
Weighted-average common shares outstanding - Class A and B common stock: | ||
Basic (in shares) | 466,642 | 465,412 |
Diluted (in shares) | 525,309 | 514,443 |
Earnings per share - Class A and B common stock: | ||
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.79 | $ 0.81 |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.70 | $ 0.76 |
Comprehensive Income (Loss): | ||
Net income (loss) | $ 385,321 | $ 390,075 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 400 | 207 |
Unrealized holding gains (losses) on available-for-sale securities | 105 | 6,164 |
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (2) | (4) |
Deferred income tax (expense) benefit, net | (26) | (2,264) |
Total other comprehensive income (loss), net of tax | 477 | 4,103 |
Comprehensive income (loss) | 385,798 | 394,178 |
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of tax | 17,761 | 14,360 |
Comprehensive income (loss) attributable to DISH Network | $ 368,037 | $ 379,818 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 385,321 | $ 390,075 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 192,972 | 204,630 |
Realized and unrealized losses (gains) on investments | 36,722 | (2,272) |
Non-cash, stock-based compensation | 9,060 | 6,774 |
Deferred tax expense (benefit) | 92,064 | 150,006 |
Other, net | (32,426) | 6,752 |
Changes in current assets and current liabilities, net | 67,838 | 180,802 |
Net cash flows from operating activities | 751,551 | 936,767 |
Cash Flows From Investing Activities: | ||
Purchases of marketable investment securities | (9,253) | (58,876) |
Sales and maturities of marketable investment securities | 313,567 | 78,703 |
Purchases of property and equipment | (70,521) | (114,899) |
Capitalized interest related to FCC authorizations (Note 2) | (294,003) | (282,597) |
Purchases of strategic investments | (90,921) | |
Other, net | 3,613 | 13,564 |
Net cash flows from investing activities | (56,597) | (455,026) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of convertible notes (Note 8) | 1,000,000 | |
Redemption and repurchases of senior notes | (56,473) | |
Repayment of long-term debt and capital lease obligations | (10,458) | (9,162) |
Payments made to parent of transferred businesses | (7,098) | |
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan | 7,991 | 6,374 |
Debt issuance costs | (6,158) | |
Other, net | (159) | |
Net cash flows from financing activities | (59,099) | 983,956 |
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | 635,855 | 1,465,697 |
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period (Note 5) | 1,479,901 | 5,325,184 |
Cash, cash equivalents, restricted cash and cash equivalents, end of period (Note 5) | $ 2,115,756 | $ 6,790,881 |
Organization and Business Activ
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2018 | |
Organization and Business Activities | |
Organization and Business Activities | 1. Principal Business DISH Network Corporation is a holding company. Its subsidiaries (which together with DISH Network Corporation are referred to as “DISH Network,” the “Company,” “we,” “us” and/or “our,” unless otherwise required by the context) operate two primary business segments. Pay-TV We offer pay-TV services under the DISH ® brand and the Sling ® brand (collectively “Pay-TV” services). The DISH branded pay-TV service consists of, among other things, Federal Communications Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“DBS”) and Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, broadcast operations, customer service facilities, a leased fiber optic network, in-home service and call center operations, and certain other assets utilized in our operations (“DISH TV”). The Sling branded pay-TV services consist of, among other things, live, linear streaming over-the-top (“OTT”) Internet-based domestic, international and Latino video programming services (“Sling TV”). As of March 31, 2018, we had 13.148 million Pay-TV subscribers in the United States, including 10.845 million DISH TV subscribers and 2.303 million Sling TV subscribers. In addition, we have historically offered broadband services under the dishNET™ brand, which includes satellite broadband services that utilize advanced technology and high-powered satellites launched by Hughes Communications, Inc. (“Hughes”) and ViaSat, Inc. (“ViaSat”) and wireline broadband services. However, as of March 2018, we have transitioned our broadband business focus from wholesale to authorized representative arrangements costs for these activations. For example, during the first quarter 2017, we transitioned our wholesale arrangement with Hughes to an authorized representative arrangement and entered into a master service agreement (the “MSA”) with Hughes Network Systems, LLC (“HNS”), a wholly-owned subsidiary of Hughes. See “ Hughes Broadband Master Services Agreement” in Note 12 under Related Party Transactions with EchoStar for further information. As a result of the completion of the Share Exchange with EchoStar, described below, we also design, develop and distribute receiver systems and provide digital broadcast operations, including satellite uplinking/downlinking, transmission and other services to third-party pay-TV providers. See Note 2 and Note 12 for further information. Wireless Since 2008, we have directly invested over $11 billion to acquire certain wireless spectrum licenses and related assets and made over $10 billion in non-controlling investments in certain entities, for a total of over $21 billion, as described further below. DISH Network Spectrum We have directly invested over $11 billion to acquire certain wireless spectrum licenses and related assets. These wireless spectrum licenses are subject to certain interim and final build-out requirements. We will need to make significant additional investments or partner with others to, among other things, commercialize, build-out, and integrate these licenses and related assets, and any additional acquired licenses and related assets; and comply with regulations applicable to such licenses. Depending on the nature and scope of such commercialization, build-out, integration efforts, and regulatory compliance, any such investments or partnerships could vary significantly. In addition, as we consider our options for the commercialization of our wireless spectrum, we will incur significant additional expenses and will have to make significant investments related to, among other things, research and development, wireless testing and wireless network infrastructure. In March 2017, we notified the FCC that we plan to deploy a next-generation 5G-capable network, focused on supporting narrowband Internet of Things (“IoT”). The first phase of our network deployment will be completed by March 2020, with subsequent phases to be completed thereafter. We may also determine that additional wireless spectrum licenses may be required to commercialize our wireless business and to compete with other wireless service providers. DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3 Wireless Spectrum Licenses Through our wholly-owned subsidiaries American AWS-3 Wireless II L.L.C. (“American II”) and American AWS-3 Wireless III L.L.C. (“American III”), we have made over $10 billion in certain non-controlling investments in Northstar Spectrum, LLC (“Northstar Spectrum”), the parent company of Northstar Wireless, LLC (“Northstar Wireless,” and collectively with Northstar Spectrum, the “Northstar Entities”), and in SNR Wireless HoldCo, LLC (“SNR HoldCo”), the parent company of SNR Wireless LicenseCo, LLC (“SNR Wireless,” and collectively with SNR HoldCo, the “SNR Entities”), respectively. On October 27, 2015, the FCC granted certain AWS-3 wireless spectrum licenses (the “AWS-3 Licenses”) to Northstar Wireless and to SNR Wireless, respectively, which are recorded in “FCC authorizations” on our Condensed Consolidated Balance Sheets. Under the applicable accounting guidance in Accounting Standards Codification 810, Consolidation (“ASC 810”), Northstar Spectrum and SNR HoldCo are considered variable interest entities and, based on the characteristics of the structure of these entities and in accordance with the applicable accounting guidance, we consolidate these entities into our financial statements. See Note 2 for further information. The AWS-3 Licenses are subject to certain interim and final build-out requirements. The Northstar Entities and/or the SNR Entities may need to raise significant additional capital in the future, which may be obtained from third party sources or from us, so that the Northstar Entities and the SNR Entities may commercialize, build-out and integrate these AWS-3 Licenses, comply with regulations applicable to such AWS-3 Licenses, and make any potential payments related to the Northstar Re-Auction Payment and the SNR Re-Auction Payment for the AWS-3 licenses retained by the FCC. Depending upon the nature and scope of such commercialization, build-out, integration efforts, regulatory compliance, and potential Northstar Re-Auction Payment and SNR Re-Auction Payment, any loans, equity contributions or partnerships could vary significantly. There can be no assurance that we will be able to obtain a profitable return on our non-controlling investments in the Northstar Entities and the SNR Entities. See Note 9 for further information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior period amounts have been reclassified to conform to the current period presentation. Principles of Consolidation We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Minority interests are recorded as noncontrolling interests or redeemable noncontrolling interests. See below for further information. Non-consolidated investments are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do not have the ability to significantly influence the operating decisions of an investee, these equity securities are classified as either marketable investment securities or other investments and recorded at fair value with changes recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation. On February 28, 2017, we and EchoStar and certain of our respective subsidiaries completed the transactions contemplated by the Share Exchange Agreement (the “Share Exchange Agreement”) that was previously entered into on January 31, 2017 (the “Share Exchange”). Pursuant to the Share Exchange Agreement, among other things, EchoStar transferred to us certain assets and liabilities of the EchoStar technologies and EchoStar broadcasting businesses, consisting primarily of the businesses that design, develop and distribute digital set-top boxes, provide satellite uplinking services and develop and support streaming video technology, as well as certain investments in joint ventures, spectrum licenses, real estate properties and EchoStar’s ten percent non-voting interest in Sling TV Holding L.L.C. (the “Transferred Businesses”), and in exchange, we transferred to EchoStar the 6,290,499 shares of preferred tracking stock issued by EchoStar (the “EchoStar Tracking Stock”) and 81.128 shares of preferred tracking stock issued by Hughes Satellite Systems Corporation, a subsidiary of EchoStar (the “HSSC Tracking Stock,” and together with the EchoStar Tracking Stock, collectively, the “Tracking Stock”), that tracked the residential retail satellite broadband business of HNS. In connection with the Share Exchange, we and EchoStar and certain of their subsidiaries entered into certain agreements covering, among other things, tax matters, employee matters, intellectual property matters and the provision of transitional services. See Note 12 for further information. As the Share Exchange was a transaction between entities that are under common control, accounting rules require that our Condensed Consolidated Financial Statements include the results of the Transferred Businesses for all periods presented, including periods prior to the completion of the Share Exchange. We initially recorded the Transferred Businesses at EchoStar’s historical cost basis. The difference between the historical cost basis of the Transferred Businesses and the net carrying value of the Tracking Stock was recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. The results of the Transferred Businesses were prepared from separate records maintained by EchoStar for the periods prior to March 1, 2017, and may not necessarily be indicative of the conditions that would have existed, or the results of operations, if the Transferred Businesses had been operated on a combined basis with our subsidiaries. Redeemable Noncontrolling Interests Northstar Wireless . Northstar Wireless is a wholly-owned subsidiary of Northstar Spectrum, which is an entity owned by Northstar Manager, LLC (“Northstar Manager”) and us. Under the applicable accounting guidance in ASC 810, Northstar Spectrum is considered a variable interest entity and, based on the characteristics of the structure of this entity and in accordance with the applicable accounting guidance, we consolidate Northstar Spectrum into our financial statements. After the five-year anniversary of the grant of the AWS-3 Licenses to Northstar Wireless (and in certain circumstances, prior to the five-year anniversary of the grant of the AWS-3 Licenses to Northstar Wireless), Northstar Manager has the ability, but not the obligation, to require Northstar Spectrum to purchase Northstar Manager’s ownership interests in Northstar Spectrum (the “Northstar Put Right”) for a purchase price that generally equals its equity contribution to Northstar Spectrum plus a fixed annual rate of return. In the event that the Northstar Put Right is exercised by Northstar Manager, the consummation of the sale will be subject to FCC approval. Northstar Spectrum does not have a call right with respect to Northstar Manager’s ownership interests in Northstar Spectrum. Although Northstar Manager is the sole manager of Northstar Spectrum, Northstar Manager’s ownership interest is considered temporary equity under the applicable accounting guidance and is thus recorded as part of “Redeemable noncontrolling interests” in the mezzanine section of our Condensed Consolidated Balance Sheets. Northstar Manager’s ownership interest in Northstar Spectrum was initially accounted for at fair value. Subsequently, Northstar Manager’s ownership interest in Northstar Spectrum is increased by the fixed annual rate of return through “Redeemable noncontrolling interests” in our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The operating results of Northstar Spectrum attributable to Northstar Manager are recorded as “Redeemable noncontrolling interests” in our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 9 for further information. SNR Wireless . SNR Wireless is a wholly-owned subsidiary of SNR HoldCo, which is an entity owned by SNR Wireless Management, LLC (“SNR Management”) and us. Under the applicable accounting guidance in ASC 810, SNR HoldCo is considered a variable interest entity and, based on the characteristics of the structure of this entity and in accordance with the applicable accounting guidance, we consolidate SNR HoldCo into our financial statements. After the five-year anniversary of the grant of the AWS-3 Licenses to SNR Wireless (and in certain circumstances, prior to the five-year anniversary of the grant of the AWS-3 Licenses to SNR Wireless), SNR Management has the ability, but not the obligation, to require SNR HoldCo to purchase SNR Management’s ownership interests in SNR HoldCo (the “SNR Put Right”) for a purchase price that generally equals its equity contribution to SNR HoldCo plus a fixed annual rate of return. In the event that the SNR Put Right is exercised by SNR Management, the consummation of the sale will be subject to FCC approval. SNR HoldCo does not have a call right with respect to SNR Management’s ownership interests in SNR HoldCo. Although SNR Management is the sole manager of SNR HoldCo, SNR Management’s ownership interest is considered temporary equity under the applicable accounting guidance and is thus recorded as part of “Redeemable noncontrolling interests” in the mezzanine section of our Condensed Consolidated Balance Sheets. SNR Management’s ownership interest in SNR HoldCo was initially accounted for at fair value. Subsequently, SNR Management’s ownership interest in SNR HoldCo is increased by the fixed annual rate of return through “Redeemable noncontrolling interests” on our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The operating results of SNR HoldCo attributable to SNR Management are recorded as “Redeemable noncontrolling interests” on our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 9 for further information. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, independent third-party retailer incentives, programming expenses and subscriber lives. Economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. Marketable Investment Securities Historically, we classified all marketable investment securities as available-for-sale, except for investments which were accounted for as trading securities, and adjusted the carrying amount of our available-for-sale securities to fair value and reported the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. Our trading securities were carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Subsequent to the adoption of ASU 2016-01 during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All debt securities are classified as available-for-sale. We adjust the carrying amount of our debt securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. Declines in the fair value of a marketable debt security which are determined to be “other-than-temporary” are recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. Capitalized Interest We capitalize interest associated with the acquisition or construction of certain assets, including, among other things, satellites and wireless spectrum licenses. Capitalization of interest begins when, among other things, steps are taken to prepare the asset for its intended use and ceases when the asset is ready for its intended use or when these activities are substantially suspended. We are currently preparing for the commercialization of our AWS-4, H Block, 700 MHz, 600 MHz and MVDDS wireless spectrum licenses, and interest expense related to their carrying amount is being capitalized. In addition, the FCC has granted certain AWS-3 Licenses to Northstar Wireless and to SNR Wireless, respectively, in which we have made certain non-controlling investments. Northstar Wireless and SNR Wireless are preparing for the commercialization of their AWS-3 Licenses and interest expense related to their carrying amount is also being capitalized. On June 14, 2017, the FCC issued an order granting our application to acquire the 600 MHz Licenses, and we began preparing for the commercialization of our 600 MHz Licenses and began capitalizing interest related to these licenses on June 14, 2017. As the carrying amount of the licenses discussed above exceeded the carrying value of our long-term debt beginning on June 14, 2017, materially all of our interest expense is now being capitalized. Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: · Level 1, defined as observable inputs being quoted prices in active markets for identical assets; · Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and derivative financial instruments indexed to marketable investment securities; and · Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available. As of March 31, 2018 and December 31, 2017, the carrying amount for cash and cash equivalents, trade accounts receivable (net of allowance for doubtful accounts) and current liabilities (excluding the “Current portion of long-term debt and capital lease obligations”) was equal to or approximated fair value due to their short-term nature or proximity to current market rates. See Note 5 for the fair value of our marketable investment securities and derivative financial instruments. Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are based on, among other things, available trade information, and/or an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 8 for the fair value of our long-term debt. Revenue Recognition Our revenue is primarily derived from Pay-TV programming services that we provide to our subscribers. We also generate revenue from broadband services, equipment rental fees and other hardware related fees, including DVRs, broadband equipment, and fees from subscribers with multiple receivers; advertising services; fees earned from our in-home service operations; warranty services; and sales of digital receivers and related equipment to third-party pay-TV providers. See Note 10 for further information, including revenue disaggregated by major source. Our residential video subscribers contract for individual services or combinations of services, as discussed above, the majority of which are generally capable of being distinct and are accounted for as separate performance obligations. We consider our installations for first time DISH TV subscribers to be a service. However, since we provide a significant integration service combining the installation with programming services we have concluded that the installation is not distinct from programming and thus the installation and programming services are accounted for as a single performance obligation. We generally satisfy these performance obligations and recognize revenue as the services are provided, for example as the programming is broadcast to subscribers, as this best represents the transfer of control of the services to the subscriber. In cases where a subscriber is charged certain nonrefundable upfront fees, those fees are generally considered to be material rights to the subscriber related to the subscriber’s option to renew without having to pay an additional fee upon renewal. These fees will therefore be deferred and recognized over the estimated period of time during which the fee remains material to the customer, which we estimate to be less than one year. Revenues arising from our in-home service operations that are separate from the initial installation, such as mounting a TV on a subscriber’s wall, are generally recognized when these services are performed. For our residential video subscribers, we have concluded that the contract term under ASC 606 is one month and as a result the revenue recognized for these subscribers for a given month is equal to the amount billed in that month, except for certain nonrefundable upfront fees that are accounted for as material rights, as discussed above. Revenues from our advertising services are typically recognized as the advertisements are broadcast. Sales of equipment to subscribers or other third parties are recognized when control is transferred under the contract. Revenue from our commercial video subscribers typically follows the residential model described above, with the exception that the contract term for most of our commercial subscribers exceeds one month and can be multiple years in length. However, commercial subscribers typically do not receive time-limited discounts or free service periods and accordingly, while they may have multiple performance obligations, revenue is equal to the amount billed in a given month. Contract Balances The timing of revenue recognition generally differs from the timing of invoicing to customers. When revenue is recognized prior to invoicing, we record a receivable. When revenue is recognized subsequent to invoicing, we record deferred revenue. Our residential video subscribers are typically billed monthly, and the contract balances for those customers arise from the timing of the monthly billing cycle. We do not adjust the amount of consideration for financing impacts as we apply a practical expedient when we anticipate that the period between transfer of goods and services and eventual payment for those goods and services will be less than one year. See Note 11 for further information, including balance and activity detail about our allowance for doubtful accounts and deferred revenue. Assets recognized related to the Costs to Obtain a Contract with a Subscriber We recognize an asset for the incremental costs of obtaining a contract with a subscriber if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs, including those with our independent third-party retailers, meet the requirements to be capitalized, and payments made under these programs are capitalized and amortized to expense over the estimated subscriber life. During the three months ended March 31, 2018, we capitalized $41 million under these programs. The amortization expense related to these programs was $3 million for the three months ended March 31, 2018. As of March 31, 2018, we had a total of $52 million capitalized on our Condensed Consolidated Balance Sheets. These amounts are capitalized in “Other currents assets” and “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets, and then amortized in “Other subscriber acquisition costs” on our Condensed Consolidated Statements of Operations. Impact of Adoption of ASU 2014-09 On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 Revenue from Contracts with Customers (“ASU 2014-09”) and has modified the standard thereafter. We adopted ASU 2014-09, as modified, and now codified as Accounting Standard Codification Topic 606 (“ASC 606”) and Accounting Standard Codification Topic 340-40 (“ASC 340-40”) on January 1, 2018, using the modified retrospective method. Under that method, we applied the new guidance to all open contracts existing as of January 1, 2018, recognizing in beginning retained earnings an adjustment for the cumulative effect of the change, which was $2 million, net of deferred taxes of $1 million. In addition, we are providing additional disclosures comparing the results under previous guidance to those as follows: Condensed Consolidated Statements of Operations DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) For the Three Months Ended March 31, 2018 Subscriber-related revenue $ 3,431,632 $ (8,928) $ 3,422,704 Subscriber-related expenses $ 2,189,378 $ (4,427) $ 2,184,951 Total subscriber acquisition costs $ 236,309 $ (40,298) $ 196,011 Operating income (loss) $ 493,709 $ 35,797 $ 529,506 Income (loss) before income taxes $ 465,261 $ 35,797 $ 501,058 Income tax (provision) benefit, net $ (107,146) $ (8,591) $ (115,737) Net income (loss) attributable to DISH Network $ 340,354 $ 27,206 $ 367,560 Diluted net income (loss) per share attributable to DISH Network $ 0.65 $ 0.05 $ 0.70 Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) As of March 31, 2018 Inventory $ 310,641 $ 37,105 $ 347,746 Other current assets $ 223,287 $ 13,792 $ 237,079 Other noncurrent assets, net $ 368,501 $ 38,518 $ 407,019 Total assets $ 30,065,518 $ 89,415 $ 30,154,933 Deferred revenue and other $ 694,757 $ 48,081 $ 742,838 Deferred tax liabilities $ 2,103,037 $ 9,384 $ 2,112,421 Long-term deferred revenue and other long-term liabilities $ 469,210 $ 2,424 $ 471,634 Total liabilities $ 22,368,579 $ 59,889 $ 22,428,468 Total stockholders' equity (deficit) $ 7,295,737 $ 29,526 $ 7,325,263 Total liabilities and stockholders' equity (deficit) $ 30,065,518 $ 89,415 $ 30,154,933 The adoption of ASU 2014-09 had no impact to cash flows from operating, investing, and financing activities on our Condensed Consolidated Statements of Cash Flows. Research and Development Research and development costs are expensed as incurred. Research and development costs totaled $6 million and $7 million for the three months ended March 31, 2018 and 2017, respectively. New Accounting Pronouncements Leases. In February 2016, the FASB issued new guidance on the accounting for leases, ASU 2016-02 Leases (“ASU 2016-02”). The guidance amends the existing accounting standards for lease accounting, including the requirement that lessees recognize right of use assets and lease liabilities initially measured at the present value of the lease payments for all leases with a term of greater than twelve months. The accounting guidance for lessors remains largely unchanged. The effective date of this standard for us will be January 1, 2019. While we have not determined the effect of the standard on our ongoing financial reporting, we currently believe the most significant change will be the recognition of right of use assets and lease liabilities on our Condensed Consolidated Balance Sheets. We have established a multidisciplinary team to assess the implementation of this guidance and are currently in the process of identifying and implementing changes to our systems, process, and internal controls to meet the requirements of the standard. Financial Instruments – Credit Losses . On June 16, 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact the adoption of ASU 2016-13 will have on our Condensed Consolidated Financial Statements and related disclosures. |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Basic and Diluted Net Income (Loss) Per Share | |
Basic and Diluted Net Income (Loss) Per Share | 3. Basic and Diluted Net Income (Loss) Per Share We present both basic earnings per share (“EPS”) and diluted EPS. Basic EPS excludes potential dilution and is computed by dividing “Net income (loss) attributable to DISH Network” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock awards were exercised and if our 3 3/8% Convertible Notes due 2026 issued August 8, 2016 (the “Convertible Notes due 2026”) and our 2 3/8% Convertible Notes due 2024 issued March 17, 2017 (the “Convertible Notes due 2024,” and collectively with the Convertible Notes due 2026, the “Convertible Notes”) were converted. The potential dilution from stock awards is accounted for using the treasury stock method based on the average market value of our Class A common stock. The potential dilution from conversion of the Convertible Notes is accounted for using the if-converted method, which requires that all of the shares of our Class A common stock issuable upon conversion of the Convertible Notes will be included in the calculation of diluted EPS assuming conversion of the Convertible Notes at the beginning of the reporting period (or at time of issuance, if later). The following table presents EPS amounts for all periods and the basic and diluted weighted-average shares outstanding used in the calculation. For the Three Months Ended March 31, 2018 2017 (In thousands, except per share amounts) Net income (loss) $ 385,321 $ 390,075 Less: Net income (loss) attributable to noncontrolling interests, net of tax 17,761 14,360 Net income (loss) attributable to DISH Network - Basic 367,560 375,715 Interest on dilutive Convertible Notes, net of tax (1) — 17,119 Net income (loss) attributable to DISH Network - Diluted $ 367,560 $ 392,834 Weighted-average common shares outstanding - Class A and B common stock: Basic 466,642 465,412 Dilutive impact of Convertible Notes 58,192 48,056 Dilutive impact of stock awards outstanding 475 975 Diluted 525,309 514,443 Earnings per share - Class A and B common stock: Basic net income (loss) per share attributable to DISH Network $ 0.79 $ 0.81 Diluted net income (loss) per share attributable to DISH Network $ 0.70 $ 0.76 (1) For the three months ended March 31, 2018, materially all of our interest expense was capitalized. See Note 2 for further information. Certain stock awards to acquire our Class A common stock are not included in the weighted-average common shares outstanding above, as their effect is anti-dilutive. In addition, vesting of performance based options and rights to acquire shares of our Class A common stock granted pursuant to our performance based stock incentive plans (“Restricted Performance Units”) are both contingent upon meeting certain goals, some of which are not yet probable of being achieved. Furthermore, the warrants that we issued to certain option counterparties in connection with the Convertible Notes due 2026 are only exercisable at their expiration if the market price per share of our Class A common stock is greater than the strike price of the warrants, which is approximately $86.08 per share, subject to adjustments. As a consequence, the following are not included in the diluted EPS calculation. As of March 31, 2018 2017 (In thousands) Anti-dilutive stock awards 3,572 1,491 Performance based options 4,804 6,489 Restricted Performance Units/Awards 2,061 1,318 Common stock warrants 46,029 46,029 Total 56,466 55,327 |
Supplemental Data - Statements
Supplemental Data - Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Data - Statements of Cash Flows | |
Supplemental Data - Statements of Cash Flows | 4. Supplemental Data - Statements of Cash Flows The following table presents our supplemental cash flow and other non-cash data. For the Three Months Ended March 31, 2018 2017 (In thousands) Cash paid for interest (including capitalized interest) $ 294,122 $ 313,396 Cash received for interest 2,878 3,406 Cash paid for income taxes (1) 1,758 1,001 Capitalized interest (2) 261,680 236,570 Initial equity component of the 2 3/8% Convertible Notes due 2024, net of deferred taxes of $92,512 — 159,869 Assets financed under capital lease obligations 142 — (1) Certain changes resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”), including, among other things, limitations on the deductibility of interest, may increase cash paid for income taxes in 2018. (2) See Note 2 for further information. |
Marketable Investment Securitie
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 5. Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities Our marketable investment securities, restricted cash and cash equivalents, and other investment securities consisted of the following: As of March 31, December 31, 2018 2017 (In thousands) Marketable investment securities: Current marketable investment securities: Strategic - available-for-sale $ 195 $ 195 Strategic - trading/equity (Note 2) 56,078 93,367 Other 107,441 407,603 Total current marketable investment securities 163,714 501,165 Restricted marketable investment securities (1) 72,231 72,014 Total marketable investment securities 235,945 573,179 Restricted cash and cash equivalents (1) 407 393 Other investment securities: Other investment securities - equity method 115,429 113,460 Total other investment securities 115,429 113,460 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 351,781 $ 687,032 (1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash, cash equivalents and marketable investment securities” on our Condensed Consolidated Balance Sheets. Marketable Investment Securities Our marketable investment securities portfolio consists of various debt and equity instruments. All debt securities are classified as available-for-sale. Subsequent to the adoption of ASU 2016-01 during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 2 for further information. Current Marketable Investment Securities – Strategic Our current strategic marketable investment securities portfolio includes and may include strategic and financial debt and equity investments in private and public companies that are highly speculative and have experienced and continue to experience volatility. As of March 31, 2018, this portfolio consisted of securities of a small number of issuers, and as a result the value of that portfolio depends, among other things, on the performance of those issuers. The fair value of certain of the debt and equity securities in this portfolio can be adversely impacted by, among other things, the issuers’ respective performance and ability to obtain any necessary additional financing on acceptable terms, or at all. We had an investment in non-marketable preferred shares of a non-public company, which was previously accounted for as a cost method investment and included in “Other investment securities” on our Condensed Consolidated Balance Sheets. During the third quarter 2017, our non-marketable preferred shares converted into common shares in conjunction with the issuer’s initial public offering, and accordingly we classified the new equity securities as “Marketable investment securities” on our Condensed Consolidated Balance Sheets. We previously elected to account for these common shares as trading securities with changes in fair value reported each period as unrealized gains or losses in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Subsequent to the adoption of ASU 2016-01 during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 2 for further information. Current Marketable Investment Securities - Other Our current marketable investment securities portfolio includes investments in various debt instruments including, among others, commercial paper, corporate securities and United States treasury and/or agency securities. Commercial paper consists mainly of unsecured short-term, promissory notes issued primarily by corporations with maturities ranging up to 365 days. Corporate securities consist of debt instruments issued by corporations with various maturities normally less than 18 months. U.S. Treasury and agency securities consist of debt instruments issued by the federal government and other government agencies. Restricted Cash, Cash Equivalents and Marketable Investment Securities As of March 31, 2018 and December 31, 2017, our restricted marketable investment securities, together with our restricted cash and cash equivalents, included amounts required as collateral for our letters of credit. Other Investment Securities We have strategic investments in certain debt and/or equity securities that are included in noncurrent “Other investment securities” on our Condensed Consolidated Balance Sheets. Our debt securities are classified as available-for-sale and our equity securities are accounted for using the equity method of accounting or recorded at fair value. Certain of our equity method investments are detailed below. NagraStar L.L.C. As a result of the completion of the Share Exchange on February 28, 2017, we own a 50% interest in NagraStar L.L.C. (“NagraStar”), a joint venture that is our primary provider of encryption and related security systems intended to assure that only authorized customers have access to our programming. Invidi Technologies Corporation . In November 2016, we, DIRECTV, LLC, a wholly-owned indirect subsidiary of AT&T Inc., and Cavendish Square Holding B.V., an affiliate of WPP plc, entered into a series of agreements to acquire Invidi Technologies Corporation (“Invidi”), an entity that provides proprietary software for the addressable advertising market. The transaction closed in January 2017. Our ability to realize value from our strategic investments in securities that are not publicly traded depends on the success of the issuers’ businesses and their ability to obtain sufficient capital, on acceptable terms or at all, and to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them. Unrealized Gains (Losses) on Marketable Investment Securities As of March 31, 2018 and December 31, 2017, we had accumulated net unrealized losses of less than $1 million. These amounts, net of related tax effect, were accumulated net unrealized losses of less than $1 million. All of these amounts are included in “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit).” The components of our available-for-sale investments are summarized in the table below. As of March 31, 2018 As of December 31, 2017 Marketable Marketable Investment Unrealized Investment Unrealized Securities Gains Losses Net Securities Gains Losses Net (In thousands) Debt securities (including restricted): U.S. Treasury and agency securities $ 71,866 $ — $ (113) $ (113) $ 84,286 $ 22 $ (141) $ (119) Commercial paper — — — — 107,962 — (10) (10) Corporate securities 105,074 — (37) (37) 282,256 — (124) (124) Other 2,927 58 (1) 57 5,308 58 (1) 57 Total $ 179,867 $ 58 $ (151) $ (93) $ 479,812 $ 80 $ (276) $ (196) As of March 31, 2018, restricted and non-restricted marketable investment securities included debt securities of $175 million with contractual maturities within one year and $5 million with contractual maturities extending longer than one year through and including five years. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity. Marketable Investment Securities in a Loss Position The following table reflects the length of time that the individual securities, accounted for as available-for-sale, have been in an unrealized loss position, aggregated by investment category. As of March 31, 2018, the unrealized losses related to our investments in debt securities primarily represented investments in United States treasury and agency securities, corporate securities and other. We have the ability to hold and do not intend to sell our investments in these debt securities before they recover or mature, and it is more likely than not that we will hold these investments until that time. In addition, we are not aware of any specific factors indicating that the underlying issuers of these debt securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these marketable investment securities are related to temporary market fluctuations. As of March 31, 2018 December 31, 2017 Fair Unrealized Fair Unrealized Value Loss Value Loss (In thousands) Debt Securities: Less than 12 months $ 111,505 $ (68) $ 410,145 $ (156) 12 months or more 24,093 (83) 34,340 (120) Total $ 135,598 $ (151) $ 444,485 $ (276) Fair Value Measurements Our investments measured at fair value on a recurring basis were as follows: As of March 31, 2018 December 31, 2017 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 2,012,886 $ 1,226,608 $ 786,278 $ — $ 1,425,798 $ 655 $ 1,425,143 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ 71,866 $ 71,866 $ — $ — $ 84,286 $ 84,286 $ — $ — Commercial Paper — — — — 107,962 — 107,962 — Corporate securities 105,074 — 105,074 — 282,256 — 282,256 — Other 2,927 — 2,732 195 5,308 — 5,113 195 Equity securities 56,078 56,078 — — 93,367 93,367 — — Total $ 235,945 $ 127,944 $ 107,806 $ 195 $ 573,179 $ 177,653 $ 395,331 $ 195 As of March 31, 2018 and December 31, 2017, our Level 3 investments were immaterial. During the three months ended March 31, 2018, we had no transfers in or out of Level 1 and Level 2 fair value measurements. Gains and Losses on Sales and Changes in Carrying Amounts of Investments “Other, net” within “Other Income (Expense)” included on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) is as follows: For the Three Months Ended March 31, Other, net: 2018 2017 (In thousands) Marketable investment securities - gains (losses) on sales/exchanges $ 567 $ 2,272 Marketable investment securities - unrealized gains (losses) on equity securities (37,289) — Equity in earnings 1,446 (726) Other 468 3,199 Total $ (34,808) $ 4,745 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory | |
Inventory | 6. Inventory consisted of the following: As of March 31, December 31, 2018 2017 (In thousands) Finished goods $ 281,288 $ 248,233 Work-in-process and service repairs 51,705 54,455 Raw materials 14,753 18,320 Total inventory $ 347,746 $ 321,008 |
Property and Equipment and Inta
Property and Equipment and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Property and Equipment and Intangible Assets | |
Property and Equipment | 7. Property and equipment consisted of the following: Depreciable As of Life March 31, December 31, (In Years) 2018 2017 (In thousands) Equipment leased to customers 2 - 5 $ 2,250,393 $ 2,323,100 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 D1 N/A 55,000 55,000 T1 14.25 100,000 100,000 Satellites acquired under capital lease agreements 10 - 15 499,819 499,819 Furniture, fixtures, equipment and other 2 - 10 1,804,873 1,779,109 Buildings and improvements 3 - 40 294,522 293,571 Land — 14,057 14,057 Construction in progress — 105,602 103,176 Total property and equipment 5,813,179 5,856,745 Accumulated depreciation (3,706,248) (3,673,084) Property and equipment, net $ 2,106,931 $ 2,183,661 Depreciation and amortization expense consisted of the following: For the Three Months Ended March 31, 2018 2017 (In thousands) Equipment leased to customers $ 110,521 $ 136,134 Satellites 25,086 29,012 Buildings, furniture, fixtures, equipment and other 57,365 39,484 Total depreciation and amortization $ 192,972 $ 204,630 Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation expense related to satellites or equipment leased to customers. Pay-TV Satellites. We currently utilize 12 satellites in geostationary orbit approximately 22,300 miles above the equator, two of which we own and depreciate over their estimated useful life. We currently utilize certain capacity on eight satellites that we lease from EchoStar, which are accounted for as operating leases. We also lease two satellites from third parties, which are accounted for as capital leases and are depreciated over the shorter of the economic life or the term of the satellite agreement. As of March 31, 2018, our pay-TV satellite fleet consisted of the following: Estimated Useful Life Degree (Years)/Lease Launch Orbital Termination Satellites Date Location Date Owned: EchoStar XV July 2010 61.5 15 EchoStar XVIII June 2016 61.5 15 Leased from EchoStar (1): EchoStar VII (2) February 2002 119 June 2018 EchoStar IX August 2003 121 Month to month EchoStar X (3) February 2006 110 February 2021 EchoStar XI (3) July 2008 110 September 2021 EchoStar XIV (3) March 2010 119 February 2023 EchoStar XVI (4) November 2012 61.5 January 2023 Nimiq 5 September 2009 72.7 September 2019 QuetzSat-1 September 2011 77 November 2021 Leased from Other Third Party: Anik F3 April 2007 118.7 April 2022 Ciel II December 2008 129 January 2019 (1) See Note 12 for further information on our Related Party Transactions with EchoStar. (2) The satellite capacity agreement for EchoStar VII will expire on June 30, 2018. (3) We generally have the option to renew each lease on a year-to-year basis through the end of the useful life of the respective satellite. (4) We have the option to renew this lease for an additional five-year period. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt and Capital Lease Obligations | |
Long-Term Debt | 8. Long-Term Debt and Capital Lease Obligations Fair Value of our Long-Term Debt The following table summarizes the carrying amount and fair value of our debt facilities as of March 31, 2018 and December 31, 2017: As of March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value (In thousands) 4 1/4% Senior Notes due 2018 (1) $ 969,388 $ 969,340 $ 1,025,861 $ 1,031,596 7 7/8% Senior Notes due 2019 1,400,000 1,472,730 1,400,000 1,501,206 5 1/8% Senior Notes due 2020 1,100,000 1,103,828 1,100,000 1,127,588 6 3/4% Senior Notes due 2021 2,000,000 2,022,740 2,000,000 2,120,480 5 7/8% Senior Notes due 2022 2,000,000 1,920,740 2,000,000 2,014,140 5% Senior Notes due 2023 1,500,000 1,359,255 1,500,000 1,432,335 5 7/8% Senior Notes due 2024 2,000,000 1,794,980 2,000,000 1,952,220 2 3/8% Convertible Notes due 2024 1,000,000 885,570 1,000,000 962,860 7 3/4% Senior Notes due 2026 2,000,000 1,894,280 2,000,000 2,118,400 3 3/8% Convertible Notes due 2026 3,000,000 2,879,610 3,000,000 3,262,290 Other notes payable 44,178 44,178 44,928 44,928 Subtotal 17,013,566 $ 16,347,251 17,070,789 $ 17,568,043 Unamortized debt discount on the Convertible Notes (903,094) (925,360) Unamortized deferred financing costs and other debt discounts, net (44,324) (46,782) Capital lease obligations (2) 94,830 104,318 Total long-term debt and capital lease obligations (including current portion) $ 16,160,978 $ 16,202,965 (1) During the three months ended March 31, 2018, we repurchased $56 million of our 4 1/4% Senior Notes due 2018 in open market trades. The remaining balance of $969 million was included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2018. This remaining balance matured on April 1, 2018 and on April 2, 2018, we redeemed it from our cash and marketable investment securities balances. (2) Disclosure regarding fair value of capital leases is not required. We estimated the fair value of our publicly traded long-term debt using market prices in less active markets (Level 2). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Commitments Since 2008, we have directly invested over $11 billion to acquire certain wireless spectrum licenses and related assets and made over $10 billion in non-controlling investments in certain entities, for a total of over $21 billion, as described further below. DISH Network Spectrum We have directly invested over $11 billion to acquire certain wireless spectrum licenses and related assets. 700 MHz Licenses . In 2008, we paid $712 million to acquire certain 700 MHz E Block (“700 MHz”) wireless spectrum licenses, which were granted to us by the FCC in February 2009. These licenses are subject to certain build-out requirements. By March 2020, we must provide signal coverage and offer service to at least 70% of the population in each of our E Block license areas (the “700 MHz Build-Out Requirement”). If the 700 MHz Build-Out Requirement is not met with respect to any particular E Block license area, our authorization may terminate for the geographic portion of that license area in which we are not providing service. AWS-4 Licenses . On March 2, 2012, the FCC approved the transfer of 40 MHz of wireless spectrum licenses held by DBSD North America, Inc. (“DBSD North America”) and TerreStar Networks, Inc. (“TerreStar”) to us. On March 9, 2012, we completed the acquisition of 100% of the equity of reorganized DBSD North America (the “DBSD Transaction”) and substantially all of the assets of TerreStar (the “TerreStar Transaction”), pursuant to which we acquired, among other things, certain satellite assets and wireless spectrum licenses held by DBSD North America and TerreStar. The total consideration to acquire the DBSD North America and TerreStar assets was approximately $2.860 billion. On February 15, 2013, the FCC issued an order, which became effective on March 7, 2013, modifying our licenses to expand our terrestrial operating authority with AWS-4 authority (“AWS-4”). These licenses are subject to certain build-out requirements. By March 2020, we are required to provide terrestrial signal coverage and offer terrestrial service to at least 70% of the population in each area covered by an individual license (the “AWS-4 Build-Out Requirement”). If the AWS-4 Build-Out Requirement is not met with respect to any particular individual license, our terrestrial authorization for that license area may terminate. The FCC’s December 20, 2013 order also conditionally waived certain FCC rules for our AWS-4 licenses to allow us to repurpose all 20 MHz of our uplink spectrum (2000-2020 MHz) for terrestrial downlink operations. On June 1, 2016, we notified the FCC that we had elected to use our AWS-4 uplink spectrum for terrestrial downlink operations, and effective June 7, 2016, the FCC modified our AWS-4 licenses, resulting in all 40 MHz of our AWS-4 spectrum being designated for terrestrial downlink operations. H Block Licenses . On April 29, 2014, the FCC issued an order granting our application to acquire all 176 wireless spectrum licenses in the H Block auction. We paid approximately $1.672 billion to acquire these H Block licenses, including clearance costs associated with the lower H Block spectrum. The H Block licenses are subject to certain interim and final build-out requirements. By April 2018, we must provide reliable signal coverage and offer service to at least 40% of the population in each area covered by an individual H Block license (the “H Block Interim Build-Out Requirement”). By April 2024, we must provide reliable signal coverage and offer service to at least 75% of the population in each area covered by an individual H Block license (the “H Block Final Build-Out Requirement”). If the H Block Interim Build-Out Requirement is not met, the H Block license term and the H Block Final Build-Out Requirement may be accelerated by two years (from April 2024 to April 2022) for each H Block license area in which we do not meet the requirement. If the H Block Final Build-Out Requirement is not met, our authorization for each H Block license area in which we do not meet the requirement may terminate. 600 MHz Licenses. The broadcast incentive auction in the 600 MHz frequency range (“Auction 1000”) began on March 29, 2016 and concluded on March 30, 2017. On April 13, 2017, the FCC announced that ParkerB.com Wireless L.L.C. (“ParkerB.com”), a wholly-owned subsidiary of DISH Network, was the winning bidder for 486 wireless spectrum licenses (the “600 MHz Licenses”) with aggregate winning bids totaling approximately $6.211 billion. On April 27, 2017, ParkerB.com filed an application with the FCC to acquire the 600 MHz Licenses. On July 1, 2016, we paid $1.5 billion to the FCC as a deposit for Auction 1000. On May 11, 2017, we paid the remaining balance of our winning bids of approximately $4.711 billion. On June 14, 2017, the FCC issued an order granting ParkerB.com’s application to acquire the 600 MHz Licenses. The 600 MHz Licenses are subject to certain interim and final build-out requirements. By June 2023, we must provide reliable signal coverage and offer wireless service to at least 40% of the population in each area covered by an individual 600 MHz License (the “600 MHz Interim Build-Out Requirement”). By June 2029, we must provide reliable signal coverage and offer wireless service to at least 75% of the population in each area covered by an individual 600 MHz License (the “600 MHz Final Build-Out Requirement”). If the 600 MHz Interim Build-Out Requirement is not met, the 600 MHz License term and the 600 MHz Final Build-Out Requirement may be accelerated by two years (from June 2029 to June 2027) for each 600 MHz License area in which we do not meet the requirement. If the 600 MHz Final Build-Out Requirement is not met, our authorization for each 600 MHz License area in which we do not meet the requirement may terminate. In addition, certain broadcasters will have up to 39 months (ending July 13, 2020) to relinquish their 600 MHz spectrum, which may impact the timing for our ability to commence operations using certain 600 MHz Licenses. The FCC has issued the 600 MHz Licenses prior to the clearance of the spectrum, and the build-out deadlines are based on the date that the 600 MHz Licenses were issued to us, not the date that the spectrum is cleared. MVDDS Licenses . We have multichannel video distribution and data service (“MVDDS”) licenses in 82 out of 214 geographical license areas, including Los Angeles, New York City, Chicago and several other major metropolitan areas. By August 2014, we were required to meet certain FCC build-out requirements related to our MVDDS licenses, and we are subject to certain FCC service rules applicable to these licenses. In January 2015, the FCC granted our application to extend the build-out requirements related to our MVDDS licenses. We now have until 2019 to provide “substantial service” on our MVDDS licenses. Our MVDDS licenses may be terminated, however, if we do not provide substantial service in accordance with the new build-out requirements. These wireless spectrum licenses expire in August 2024 unless they are renewed by the FCC. There can be no assurances that the FCC will renew these wireless spectrum licenses. In 2016, the MVDDS 5G Coalition, of which we are a member, filed a petition for rulemaking requesting the FCC to consider updating the rules to allow us to provide two-way 5G services using our MVDDS licenses. We cannot predict when or if the FCC will grant the petition and proceed with a rulemaking. If the FCC adopts rules that would allow us to provide two-way 5G services using our MVDDS licenses, the requests of OneWeb and others for authority to use the band for service from NGSO satellite systems may hinder our ability to provide 5G services using our MVDDS licenses. LMDS Licenses . As a result of the completion of the Share Exchange on February 28, 2017, we acquired from EchoStar certain Local Multipoint Distribution Service (“LMDS”) licenses in four markets: Cheyenne, Kansas City, Phoenix, and San Diego. The “substantial service” milestone has been met with respect to each of the licenses. In addition, through the FCC’s Spectrum Frontiers proceeding, a portion of each of our LMDS licenses will be reassigned to the Upper Microwave Flexible Use Service band (27.5-28.35 GHz), which will allow for a more flexible use of the licenses, including, among other things, 5G mobile operations. Commercialization of Our Wireless Spectrum Licenses and Related Assets. We have made substantial investments to acquire certain wireless spectrum licenses and related assets. We will need to make significant additional investments or partner with others to, among other things, commercialize, build-out, and integrate these licenses and related assets, and any additional acquired licenses and related assets; and comply with regulations applicable to such licenses. Depending on the nature and scope of such commercialization, build-out, integration efforts, and regulatory compliance, any such investments or partnerships could vary significantly. In addition, as we consider our options for the commercialization of our wireless spectrum, we will incur significant additional expenses and will have to make significant investments related to, among other things, research and development, wireless testing and wireless network infrastructure. In March 2017, we notified the FCC that we plan to deploy a next-generation 5G-capable network, focused on supporting narrowband IoT. The first phase of our network deployment will be completed by March 2020, with subsequent phases to be completed thereafter. We may also determine that additional wireless spectrum licenses may be required to commercialize our wireless business and to compete with other wireless service providers. We may need to raise significant additional capital in the future to fund the efforts described above, which may not be available on acceptable terms or at all. There can be no assurance that we will be able to develop and implement a business model that will realize a return on these wireless spectrum licenses or that we will be able to profitably deploy the assets represented by these wireless spectrum licenses, which may affect the carrying amount of these assets and our future financial condition or results of operations. DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3 Wireless Spectrum Licenses Non-Controlling Investments Through our wholly-owned subsidiaries American II and American III, we have made over $10 billion in certain non-controlling investments in Northstar Spectrum, the parent company of Northstar Wireless, and in SNR HoldCo, the parent company of SNR Wireless, respectively. Under the applicable accounting guidance in ASC 810, Northstar Spectrum and SNR HoldCo are considered variable interest entities and, based on the characteristics of the structure of these entities and in accordance with the applicable accounting guidance, we consolidate these entities into our financial statements. See Note 2 for further information. Northstar Investment. Through American II, we own an 85% non-controlling interest in Northstar Spectrum. Northstar Manager, LLC (“Northstar Manager”) owns a 15% controlling interest in, and is the sole manager of, Northstar Spectrum. As of March 31, 2018, the total equity contributions from American II and Northstar Manager to Northstar Spectrum were approximately $7.621 billion and $133 million, respectively. As of March 31, 2018, the total loans from American II to Northstar Wireless under the Northstar Credit Agreement (as defined below) for payments to the FCC related to the Northstar Licenses (as defined below) were approximately $500 million. SNR Investment. Through American III, we own an 85% non-controlling interest in SNR HoldCo. SNR Wireless Management, LLC (“SNR Management”) owns a 15% controlling interest in, and is the sole manager of, SNR HoldCo. As of March 31, 2018, the total equity contributions from American III and SNR Management to SNR HoldCo were approximately $5.590 billion and $93 million, respectively. As of March 31, 2018, the total loans from American III to SNR Wireless under the SNR Credit Agreement (as defined below) for payments to the FCC related to the SNR Licenses (as defined below) were approximately $500 million. AWS-3 Auction Northstar Wireless and SNR Wireless each filed applications with the FCC to participate in Auction 97 (the “AWS-3 Auction”) for the purpose of acquiring certain AWS-3 Licenses. Each of Northstar Wireless and SNR Wireless applied to receive bidding credits of 25% as designated entities under applicable FCC rules. Northstar Wireless was the winning bidder for AWS-3 Licenses with gross winning bid amounts totaling approximately $7.845 billion, which after taking into account a 25% bidding credit, was approximately $5.884 billion. SNR Wireless was the winning bidder for AWS-3 Licenses with gross winning bid amounts totaling approximately $5.482 billion, which after taking into account a 25% bidding credit, was approximately $4.112 billion. In addition to the net winning bids, SNR Wireless made a bid withdrawal payment of approximately $8 million. FCC Order and October 2015 Arrangements. On August 18, 2015, the FCC released a Memorandum Opinion and Order , FCC 15-104 (the “Order”) in which the FCC determined, among other things, that DISH Network has a controlling interest in, and is an affiliate of, Northstar Wireless and SNR Wireless, and therefore DISH Network’s revenues should be attributed to them, which in turn makes Northstar Wireless and SNR Wireless ineligible to receive the 25% bidding credits (approximately $1.961 billion for Northstar Wireless and $1.370 billion for SNR Wireless). Letters Exchanged between Northstar Wireless and the FCC Wireless Bureau. As outlined in letters exchanged between Northstar Wireless and the Wireless Telecommunications Bureau of the FCC (the “FCC Wireless Bureau”), Northstar Wireless paid the gross winning bid amounts for 261 AWS-3 Licenses (the “Northstar Licenses”) totaling approximately $5.619 billion through the application of funds already on deposit with the FCC. Northstar Wireless also notified the FCC that it would not be paying the gross winning bid amounts for 84 AWS-3 Licenses totaling approximately $2.226 billion. As a result of the nonpayment of those gross winning bid amounts, the FCC retained those licenses and Northstar Wireless owed the FCC an additional interim payment of approximately $334 million (the “Northstar Interim Payment”), which is equal to 15% of $2.226 billion. The Northstar Interim Payment was recorded during the fourth quarter 2015 in “FCC auction expense” on our Consolidated Statements of Operations and Comprehensive Income (Loss) in our Annual Report on Form 10-K for the year ended December 31, 2015. Northstar Wireless immediately satisfied the Northstar Interim Payment through the application of funds already on deposit with the FCC and an additional loan from American II of approximately $69 million. As a result, the FCC will not deem Northstar Wireless to be a “current defaulter” under applicable FCC rules. In addition, the FCC Wireless Bureau acknowledged that Northstar Wireless’ nonpayment of those gross winning bid amounts does not constitute action involving gross misconduct, misrepresentation or bad faith. Therefore, the FCC concluded that such nonpayment will not affect the eligibility of Northstar Wireless, its investors (including DISH Network) or their respective affiliates to participate in future spectrum auctions (including Auction 1000 and any re-auction of the AWS-3 licenses retained by the FCC). At this time, DISH Network (through itself, a subsidiary or another entity in which it may hold a direct or indirect interest) expects to participate in any re-auction of those AWS-3 licenses. If the winning bids from re-auction or other award of the AWS-3 licenses retained by the FCC are greater than or equal to the winning bids of Northstar Wireless, no additional amounts will be owed to the FCC. However, if those winning bids are less than the winning bids of Northstar Wireless, then Northstar Wireless will be responsible for the difference less any overpayment of the Northstar Interim Payment (which will be recalculated as 15% of the winning bids from re-auction or other award) (the “Northstar Re-Auction Payment”). For example, if the winning bids in a re-auction are $1, the Northstar Re-Auction Payment would be approximately $1.892 billion, which is calculated as the difference between $2.226 billion (the Northstar winning bid amounts) and $1 (the winning bids from re-auction) less the resulting $334 million overpayment of the Northstar Interim Payment. As discussed above, at this time, DISH Network (through itself, a subsidiary or another entity in which it may hold a direct or indirect interest) expects to participate in any re-auction. We cannot predict with any degree of certainty the timing or outcome of any re-auction or the amount of any Northstar Re-Auction Payment. DISH Network Guaranty in Favor of the FCC for Certain Northstar Wireless Obligations . On October 1, 2015, DISH Network entered into a guaranty in favor of the FCC (the “FCC Northstar Guaranty”) with respect to the Northstar Interim Payment (which was satisfied on October 1, 2015) and any Northstar Re-Auction Payment. The FCC Northstar Guaranty provides, among other things, that during the period between the due date for the payments guaranteed under the FCC Northstar Guaranty and the date such guaranteed payments are paid: (i) Northstar Wireless’ payment obligations to American II under the Northstar Credit Agreement will be subordinated to such guaranteed payments; and (ii) DISH Network or American II will withhold exercising certain rights as a creditor of Northstar Wireless. Letters Exchanged between SNR Wireless and the FCC Wireless Bureau. As outlined in letters exchanged between SNR Wireless and the FCC Wireless Bureau, SNR Wireless paid the gross winning bid amounts for 244 AWS-3 Licenses (the “SNR Licenses”) totaling approximately $4.271 billion through the application of funds already on deposit with the FCC and a portion of an additional loan from American III in an aggregate amount of approximately $344 million (which included an additional bid withdrawal payment of approximately $3 million). SNR Wireless also notified the FCC that it would not be paying the gross winning bid amounts for 113 AWS-3 Licenses totaling approximately $1.211 billion. As a result of the nonpayment of those gross winning bid amounts, the FCC retained those licenses and SNR Wireless owed the FCC an additional interim payment of approximately $182 million (the “SNR Interim Payment”), which is equal to 15% of $1.211 billion. The SNR Interim Payment was recorded during the fourth quarter 2015 in “FCC auction expense” on our Consolidated Statements of Operations and Comprehensive Income (Loss) in our Annual Report on Form 10-K for the year ended December 31, 2015. SNR Wireless immediately satisfied the SNR Interim Payment through a portion of an additional loan from American III in an aggregate amount of approximately $344 million. As a result, the FCC will not deem SNR Wireless to be a “current defaulter” under applicable FCC rules. In addition, the FCC Wireless Bureau acknowledged that SNR Wireless’ nonpayment of those gross winning bid amounts does not constitute action involving gross misconduct, misrepresentation or bad faith. Therefore, the FCC concluded that such nonpayment will not affect the eligibility of SNR Wireless, its investors (including DISH Network) or their respective affiliates to participate in future spectrum auctions (including Auction 1000 and any re-auction of the AWS-3 licenses retained by the FCC). At this time, DISH Network (through itself, a subsidiary or another entity in which it may hold a direct or indirect interest) expects to participate in any re-auction of those AWS-3 licenses. If the winning bids from re-auction or other award of the AWS-3 licenses retained by the FCC are greater than or equal to the winning bids of SNR Wireless, no additional amounts will be owed to the FCC. However, if those winning bids are less than the winning bids of SNR Wireless, then SNR Wireless will be responsible for the difference less any overpayment of the SNR Interim Payment (which will be recalculated as 15% of the winning bids from re-auction or other award) (the “SNR Re-Auction Payment”). For example, if the winning bids in a re-auction are $1, the SNR Re-Auction Payment would be approximately $1.029 billion, which is calculated as the difference between $1.211 billion (the SNR winning bid amounts) and $1 (the winning bids from re-auction) less the resulting $182 million overpayment of the SNR Interim Payment. As discussed above, at this time, DISH Network (through itself, a subsidiary or another entity in which it may hold a direct or indirect interest) expects to participate in any re-auction. We cannot predict with any degree of certainty the timing or outcome of any re-auction or the amount of any SNR Re-Auction Payment. DISH Network Guaranty in Favor of the FCC for Certain SNR Wireless Obligations. On October 1, 2015, DISH Network entered into a guaranty in favor of the FCC (the “FCC SNR Guaranty”) with respect to the SNR Interim Payment (which was satisfied on October 1, 2015) and any SNR Re-Auction Payment. The FCC SNR Guaranty provides, among other things, that during the period between the due date for the payments guaranteed under the FCC SNR Guaranty and the date such guaranteed payments are paid: (i) SNR Wireless’ payment obligations to American III under the SNR Credit Agreement will be subordinated to such guaranteed payments; and (ii) DISH Network or American III will withhold exercising certain rights as a creditor of SNR Wireless. FCC Licenses . On October 27, 2015, the FCC granted the Northstar Licenses to Northstar Wireless and the SNR Licenses to SNR Wireless, respectively, which are recorded in “FCC authorizations” on our Condensed Consolidated Balance Sheets. The AWS-3 Licenses are subject to certain interim and final build-out requirements. By October 2021, Northstar Wireless and SNR Wireless must provide reliable signal coverage and offer service to at least 40% of the population in each area covered by an individual AWS-3 License (the “AWS-3 Interim Build-Out Requirement”). By October 2027, Northstar Wireless and SNR Wireless must provide reliable signal coverage and offer service to at least 75% of the population in each area covered by an individual AWS-3 License (the “AWS-3 Final Build-Out Requirement”). If the AWS-3 Interim Build-Out Requirement is not met, the AWS-3 License term and the AWS-3 Final Build-Out Requirement may be accelerated by two years (from October 2027 to October 2025) for each AWS-3 License area in which Northstar Wireless and SNR Wireless do not meet the requirement. If the AWS-3 Final Build-Out Requirement is not met, the authorization for each AWS-3 License area in which Northstar Wireless and SNR Wireless do not meet the requirement may terminate. These wireless spectrum licenses expire in October 2027 unless they are renewed by the FCC. There can be no assurances that the FCC will renew these wireless spectrum licenses. Qui Tam . On September 23, 2016, the United States District Court for the District of Columbia unsealed a qui tam complaint that was filed by Vermont National Telephone Company (“Vermont National”) against us; our wholly-owned subsidiaries, American AWS-3 Wireless I L.L.C., American II, American III, and DISH Wireless Holding L.L.C.; Charles W. Ergen (our Chairman) and Cantey M. Ergen (a member of our board of directors); Northstar Wireless; Northstar Spectrum; Northstar Manager; SNR Wireless; SNR HoldCo; SNR Management; and certain other parties. See “ Contingencies – Litigation – Vermont National Telephone Company” for further information. D.C. Circuit Court Opinion . On August 29, 2017, the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) in SNR Wireless LicenseCo, LLC, et al. v. Federal Communications Commission , 868 F.3d 1021 (D.C. Cir. 2017) (the “Appellate Decision”) affirmed the Order in part, and remanded the matter to the FCC to give Northstar Wireless and SNR Wireless an opportunity to seek to negotiate a cure of the issues identified by the FCC in the Order (a “Cure”). On January 26, 2018, SNR Wireless and Northstar Wireless filed a petition for a writ of certiorari, asking the United States Supreme Court to hear an appeal from the Appellate Decision. We cannot predict with any degree of certainty the timing or outcome of these proceedings. Order on Remand. On January 24, 2018, the FCC released an Order on Remand, DA 18-70 (the “Order on Remand”) purporting to establish a procedure to afford Northstar Wireless and SNR Wireless the opportunity to implement a Cure pursuant to the Appellate Decision. The Order on Remand provides that Northstar Wireless and SNR Wireless each have until April 24, 2018 to file the necessary documentation to demonstrate that, in light of such changes, each of Northstar Wireless and SNR Wireless qualifies for the very small business bidding credit that it sought in the AWS-3 Auction. Additionally, the Order on Remand provides that if either Northstar Wireless or SNR Wireless needs additional time to negotiate new or amended agreements, it may request to extend the deadline for such negotiations for an additional 45 days (extending the deadline to June 8, 2018). On April 16, 2018, the FCC approved Northstar Wireless’ and SNR Wireless’ requests to extend the deadline for such negotiations to June 8, 2018. SNR Wireless and Northstar Wireless have submitted several requests for meetings with the FCC regarding a Cure. To date, the FCC has responded in writing to one of those requests by declining to grant a meeting and has not responded to the other requests. SNR Wireless and Northstar Wireless have filed a Joint Application for Review of the Order on Remand, which remains pending. We cannot predict with any degree of certainty the timing or outcome of these proceedings. Northstar Operative Agreements Northstar LLC Agreement. Northstar Spectrum is governed by a limited liability company agreement by and between American II and Northstar Manager (the “Northstar Spectrum LLC Agreement”). Pursuant to the Northstar Spectrum LLC Agreement, American II and Northstar Manager made pro-rata equity contributions in Northstar Spectrum. On March 31, 2018, American II, Northstar Spectrum, and Northstar Manager amended and restated the Northstar Spectrum LLC Agreement, to, among other things: (i) exchange $6.870 billion of the amounts outstanding and owed by Northstar Wireless to American II pursuant to the Northstar Credit Agreement (as defined below) for 6,870,493 Class A Preferred Interests in Northstar Spectrum (the “Northstar Preferred Interests”); (ii) replace the existing investor protection provisions with the investor protections described by the FCC in Baker Creek Communications, LLC, Memorandum Opinion and Order, 13 FCC Rcd 18709, 18715 (1998); (iii) delete the obligation of Northstar Manager to consult with American II regarding budgets and business plans; and (iv) remove the requirement that Northstar Spectrum’s systems be interoperable with ours. The Northstar Preferred Interests: (a) are non-voting; (b) have a 12 percent mandatory quarterly distribution, which can be paid in cash or additional face amount of Northstar Preferred Interests at the sole discretion of Northstar Manager; and (c) have a liquidation preference equal to the then-current face amount of the Northstar Preferred Interests plus accrued and unpaid mandatory quarterly distributions in the event of certain liquidation events or deemed liquidation events (e.g., a merger or dissolution of Northstar Spectrum, or a sale of substantially all of Northstar Spectrum’s assets). As a result of the exchange noted in (i) above, a principal amount of $500 million of debt remains under the Northstar Credit Agreement, as described below. Northstar Wireless Credit Agreement. On October 1, 2015, American II, Northstar Wireless and Northstar Spectrum amended the First Amended and Restated Credit Agreement dated October 13, 2014, by and among American II, as Lender, Northstar Wireless, as Borrower, and Northstar Spectrum, as Guarantor (as amended, the “Northstar Credit Agreement”), to provide, among other things, that: (i) the Northstar Interim Payment and any Northstar Re-Auction Payment will be made by American II directly to the FCC and will be deemed as loans under the Northstar Credit Agreement; (ii) the FCC is a third-party beneficiary with respect to American II’s obligation to pay the Northstar Interim Payment and any Northstar Re-Auction Payment; (iii) in the event that the winning bids from re-auction or other award of the AWS-3 licenses retained by the FCC are less than the winning bids of Northstar Wireless, the purchaser, assignee or transferee of any AWS-3 Licenses from Northstar Wireless is obligated to pay its pro-rata share of the difference (and Northstar Wireless remains jointly and severally liable for such pro-rata share); and (iv) during the period between the due date for the payments guaranteed under the FCC Northstar Guaranty (as discussed below) and the date such guaranteed payments are paid, Northstar Wireless’ payment obligations to American II under the Northstar Credit Agreement will be subordinated to such guaranteed payments. On March 31, 2018, American II, Northstar Wireless, and Northstar Spectrum amended and restated the Northstar Credit Agreement, to, among other things: (i) lower the interest rate on the remaining $500 million principal balance under the Northstar Credit Agreement from 12 percent per annum to six percent per annum; (ii) eliminate the higher interest rate that would apply in the case of an event of default; and (iii) modify and/or remove certain obligations of Northstar Wireless to prepay the outstanding loan amounts. SNR Operative Agreements SNR LLC Agreement . SNR HoldCo is governed by a limited liability company agreement by and between American III and SNR Management (the “SNR HoldCo LLC Agreement”). Pursuant to the SNR HoldCo LLC Agreement, American III and SNR Management made pro-rata equity contributions in SNR HoldCo. On March 31, 2018, American III, SNR Holdco, SNR Wireless Management, and John Muleta amended and restated the SNR HoldCo LLC Agreement , to, among other things: (i) exchange $5.065 billion of the amounts outstanding and owed by SNR Wireless to American III pursuant to the SNR Credit Agreement (as defined below) for 5,065,415 Class A Preferred Interests in SNR Holdco (the “SNR Preferred Interests”); (ii) replace the existing investor protection provisions with the investor protections described by the FCC in Baker Creek Communications, LLC, Memorandum Opinion and Order, 13 FCC Rcd 18709, 18715 (1998); (iii) delete the obligation of SNR Management to consult with American III regarding budgets and business plans; and (iv) remove the requirement that SNR Management’s systems be interoperable with ours. The SNR Preferred Interests: (a) are non-voting; (b) have a 12 percent mandatory quarterly distribution, which can be paid in cash or additional face amount of SNR Preferred Interests at the sole discretion of SNR Management; and (c) have a liquidation preference equal to the then-current face amount of the SNR Preferred Interests plus accrued and unpaid mandatory quarterly distributions in the event of certain liquidation events or deemed liquidation events (e.g., a merger or dissolution of SNR Holdco, or a sale of substantially all of SNR Holdco’s assets). As a result of the exchange noted in (i) above, a principal amount of $500 million of debt remains under the SNR Credit Agreement, as described below. SNR Credit Agreement . On October 1, 2015, American III, SNR Wireless and SNR HoldCo amended the First Amended and Restated Credit Agreement dated October 13, 2014, by and among American III, as Lender, SNR Wireless, as Borrower, and SNR HoldCo, as Guarantor (as amended, the “SNR Credit Agreement”), to provide, among other things, that: (i) the SNR Interim Payment and any SNR Re-Auction Payment will be made by American III directly to the FCC and will be deemed as loans under the SNR Credit Agreement; (ii) the FCC is a third-party beneficiary with respect to American III’s obligation to pay the SNR Interim Payment and any SNR Re-Auction P |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Segment Reporting | 10. Segment Reporting Operating segments are components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker(s) of an enterprise. Operating income is the primary measure used by our chief operating decision maker to evaluate segment operating performance. We currently operate two primary business segments: (1) Pay-TV and (2) Wireless. See Note 1 for further information. All other and eliminations primarily include intersegment eliminations related to intercompany debt and the related interest income and interest expense, which are eliminated in consolidation. The total assets, revenue and operating income by segment were as follows: As of March 31, December 31, 2018 2017 (In thousands) Total assets: Pay-TV $ 28,673,503 $ 28,353,581 Wireless 23,638,763 23,377,088 Eliminations (22,157,333) (21,956,903) Total assets $ 30,154,933 $ 29,773,766 For the Three Months Ended March 31, 2018 2017 (In thousands) Revenue: Pay-TV $ 3,458,487 $ 3,680,361 Wireless — — Eliminations — — Total revenue $ 3,458,487 $ 3,680,361 Operating income (loss): Pay-TV $ 539,302 $ 621,665 Wireless (9,796) (14,345) Eliminations — — Total operating income (loss) $ 529,506 $ 607,320 Geographic Information. Revenue is attributed to geographic regions based upon the location where the goods and services are provided. All subscriber-related revenue was derived from the United States. Substantially all of our long-lived assets reside in the United States. The following table summarizes revenue by geographic region: For the Three Months Ended March 31, Revenue: 2018 2017 (In thousands) United States $ 3,449,016 $ 3,670,764 Canada and Mexico 9,471 9,597 Total revenue $ 3,458,487 $ 3,680,361 The revenue from external customers disaggregated by major revenue source was as follows: For the Three Months Ended March 31, Category: 2018 2017 (In thousands) Pay-TV video and related revenue $ 3,347,597 $ 3,536,462 Broadband revenue 75,107 107,624 Equipment sales and other revenue 35,783 36,275 Total $ 3,458,487 $ 3,680,361 All revenues during the three months ended March 31, 2018 were derived from our Pay-TV segment. |
Contract Balances
Contract Balances | 3 Months Ended |
Mar. 31, 2018 | |
Contract Balances | |
Contract Balances | 11. Our valuation and qualifying accounts activity as of March 31, 2018 were as follows: Allowance for doubtful accounts Balance at Charged to Deductions Balance at (In thousands) For the three months ended March 31, 2018 $ 15,511 $ 21,561 $ (24,333) $ 12,739 Deferred revenue related to contracts with subscribers is recorded in “Deferred revenue and other” and “Long-term deferred revenue and other long-term liabilities” on our Condensed Consolidated Balance Sheets. Changes in deferred revenue related to contracts with subscribers were as follows: Contract Liabilities (In thousands) Balance as of December 31, 2017 $ 699,597 Recognition of unearned revenue (1,861,695) Deferral of revenue 1,896,745 Balance as of March 31, 2018 $ 734,647 We apply a practical expedient and do not disclose the value of the remaining performance obligations for contracts that are less than one year in duration, which represent a substantial majority of our revenue. As such, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of our future revenue. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions Related Party Transactions with EchoStar Following the Spin-off, we and EchoStar have operated as separate publicly-traded companies and neither entity has any ownership interest in the other. However, a substantial majority of the voting power of the shares of both companies is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. In connection with and following the Spin-off, we and EchoStar have entered into certain agreements pursuant to which we obtain certain products, services and rights from EchoStar, EchoStar obtains certain products, services and rights from us, and we and EchoStar have indemnified each other against certain liabilities arising from our respective businesses. In connection with the Share Exchange, we and EchoStar and certain of its subsidiaries entered into certain agreements covering, among other things, tax matters, employee matters, intellectual property matters and the provision of transitional services. In addition, certain agreements that we had with EchoStar have terminated, and we entered into certain new agreements with EchoStar. As the Share Exchange was a transaction between entities that are under common control, accounting rules require that our Condensed Consolidated Financial Statements include the results of the Transferred Businesses for all periods presented, including periods prior to the completion of the Share Exchange. Intercompany transactions between the Transferred Businesses and us, including, among others, the sale of set-top boxes and broadcast services from EchoStar to us, have been eliminated to the extent possible, including the margin EchoStar received on those sales. See Note 2 for further information. We also may enter into additional agreements with EchoStar in the future. The following is a summary of the terms of our principal agreements with EchoStar that may have an impact on our financial condition and results of operations. “Trade accounts receivable” As of March 31, 2018 and December 31, 2017, trade accounts receivable from EchoStar was $4 million and $2 million, respectively. These amounts are recorded in “Trade accounts receivable” on our Condensed Consolidated Balance Sheets. “Trade accounts payable” As of March 31, 2018 and December 31, 2017, trade accounts payable to EchoStar was $60 million and $42 million, respectively. These amounts are recorded in “Trade accounts payable” on our Condensed Consolidated Balance Sheets. “Equipment sales and other revenue” During the three months ended March 31, 2018 and 2017, we received $4 million and $1 million, respectively, for services provided to EchoStar. These amounts are recorded in “Equipment sales and other revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these revenues are discussed below. Real Estate Lease Agreements. We have entered into lease agreements pursuant to which we lease certain real estate to EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic areas, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth below: · El Paso Lease Agreement. During 2012, we began leasing certain space at 1285 Joe Battle Blvd., El Paso, Texas to EchoStar for an initial period ending on August 1, 2015, which also provides EchoStar with renewal options for four consecutive three-year terms. During the second quarter 2015, EchoStar exercised its first renewal option for a period ending on August 1, 2018. · 90 Inverness Lease Agreement . In connection with the completion of the Share Exchange, effective March 1, 2017, EchoStar leases certain space from us at 90 Inverness Circle East, Englewood, Colorado for a period ending in February 2022. EchoStar has the option to renew this lease for four three-year periods. · Cheyenne Lease Agreement . In connection with the completion of the Share Exchange, effective March 1, 2017, EchoStar leases certain space from us at 530 EchoStar Drive, Cheyenne, Wyoming for a period ending in February 2019. EchoStar has the option to renew this lease for thirteen one-year periods. · Gilbert Lease Agreement . In connection with the completion of the Share Exchange, effective March 1, 2017, EchoStar leases certain space from us at 801 N. DISH Dr., Gilbert, Arizona for a period ending in March 2019. EchoStar has the option to renew this lease for thirteen one-year periods. · American Fork Occupancy License Agreement. In connection with the completion of the Share Exchange, effective March 1, 2017, we acquired the lease for certain space at 796 East Utah Valley Drive, American Fork, Utah, and we sublease certain space at this location to EchoStar for a period ending in August 2017. In June 2017, EchoStar exercised its five-year renewal option for a period ending in August 2022. Collocation and Antenna Space Agreements . In connection with the completion of the Share Exchange, effective March 1, 2017, we entered into certain agreements pursuant to which we will provide certain collocation and antenna space to HNS through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Englewood, Colorado; and Spokane, Washington. During August 2017, we entered into certain other agreements pursuant to which we will provide certain collocation and antenna space to HNS through August 2022 at the following locations: Monee, Illinois and Spokane, Washington. HNS has the option to renew each of these agreements for four three-year periods. HNS may terminate certain of these agreements with 180 days’ prior written notice to us at the following locations: New Braunfels, Texas; Englewood, Colorado; and Spokane, Washington. The fees for the services provided under these agreements depend, among other things, on the number of racks leased and/or antennas present at the location. “Subscriber-related expenses” During the three months ended March 31, 2018 and 2017, we incurred $13 million and $19 million, respectively, of subscriber-related expenses for services provided to us by EchoStar. These amounts are recorded in “Subscriber-related expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. Hughes Broadband Distribution Agreement . Effective October 1, 2012, dishNET Satellite Broadband L.L.C. (“dishNET Satellite Broadband”), our indirect wholly-owned subsidiary, and HNS entered into a Distribution Agreement (the “Distribution Agreement”) pursuant to which dishNET Satellite Broadband has the right, but not the obligation, to market, sell and distribute the HNS satellite Internet service (the “Service”). dishNET Satellite Broadband pays HNS a monthly per subscriber wholesale service fee for the Service based upon the subscriber’s service level, and, beginning January 1, 2014, certain volume subscription thresholds. The Distribution Agreement also provides that dishNET Satellite Broadband has the right, but not the obligation, to purchase certain broadband equipment from HNS to support the sale of the Service. On February 20, 2014, dishNET Satellite Broadband and HNS amended the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement through March 1, 2024. Thereafter, the Distribution Agreement automatically renews for successive one year terms unless either party gives written notice of its intent not to renew to the other party at least 180 days before the expiration of the then-current term. Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement. During the first quarter 2017, we transitioned our wholesale arrangement with Hughes under the Distribution Agreement to an authorized representative arrangement and entered into the MSA with HNS. See “ Hughes Broadband Master Services Agreement” below for further information. “Satellite and transmission expenses” During the three months ended March 31, 2018 and 2017, we incurred expenses of $85 million and $89 million, respectively, for satellite capacity leased from EchoStar and telemetry, tracking and control and other professional services provided to us by EchoStar. EchoStar is a supplier of the vast majority of our transponder capacity. These amounts are recorded in “Satellite and transmission expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. Satellite Capacity Leased from EchoStar. We have entered into certain satellite capacity agreements pursuant to which we lease certain capacity on certain satellites owned or leased by EchoStar. The fees for the services provided under these satellite capacity agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are leased on the applicable satellite and the length of the lease. See “Pay-TV Satellites” in Note 7 for further information. The term of each lease is set forth below: · EchoStar VII, X, XI and XIV . On March 1, 2014, we began leasing all available capacity from EchoStar on the EchoStar VII, X, XI and XIV satellites. The term of each satellite capacity agreement generally terminates upon the earlier of: (i) the end-of-life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite. We generally have the option to renew each satellite capacity agreement on a year-to-year basis through the end of the respective satellite’s life. There can be no assurance that any options to renew such agreements will be exercised. The satellite capacity agreement for EchoStar VII will expire on June 30, 2018. · EchoStar IX . We lease certain satellite capacity from EchoStar on EchoStar IX. Subject to availability, we generally have the right to continue to lease satellite capacity from EchoStar on EchoStar IX on a month-to-month basis. · EchoStar XII. The lease for EchoStar XII expired as of September 30, 2017. · EchoStar XVI. In December 2009, we entered into a transponder service agreement with EchoStar to lease all of the capacity on EchoStar XVI, a DBS satellite, after its service commencement date. EchoStar XVI was launched in November 2012 to replace EchoStar XV at the 61.5 degree orbital location and is currently in service. Effective December 21, 2012, we and EchoStar amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date. In July 2016, we and EchoStar amended the transponder service agreement to, among other things, extend the initial term by one additional year and to reduce the term of the first renewal option by one year. Prior to expiration of the initial term, we had the option to renew for an additional five-year period. In May 2017, we exercised our first renewal option for an additional five-year period ending in January 2023. We also have the option to renew for an additional five-year period prior to expiration of the first renewal period in January 2023. There can be no assurance that the option to renew this agreement will be exercised. Nimiq 5 Agreement . During 2009, EchoStar entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree orbital location (the “Telesat Transponder Agreement”). During 2009, EchoStar also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with us, pursuant to which we currently receive service from EchoStar on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. We have also guaranteed certain obligations of EchoStar under the Telesat Transponder Agreement. See discussion under “ Guarantees ” in Note 9. Under the terms of the DISH Nimiq 5 Agreement, we make certain monthly payments to EchoStar that commenced in September 2009 when the Nimiq 5 satellite was placed into service and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service. Upon expiration of the initial term, we have the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end-of-life of the Nimiq 5 satellite. Upon in‑orbit failure or end-of-life of the Nimiq 5 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. QuetzSat-1 Lease Agreement. During 2008, EchoStar entered into a ten-year satellite service agreement with SES Latin America S.A. (“SES”), which provides, among other things, for the provision by SES to EchoStar of service on 32 DBS transponders on the QuetzSat-1 satellite. During 2008, EchoStar also entered into a transponder service agreement (“QuetzSat-1 Transponder Agreement”) with us pursuant to which we receive service from EchoStar on 24 DBS transponders. QuetzSat-1 was launched on September 29, 2011 and was placed into service during the fourth quarter 2011 at the 67.1 degree orbital location while we and EchoStar explored alternative uses for the QuetzSat-1 satellite. In the interim, EchoStar provided us with alternate capacity at the 77 degree orbital location. During the first quarter 2013, we and EchoStar entered into an agreement pursuant to which we sublease five DBS transponders back to EchoStar. In January 2013, QuetzSat-1 was moved to the 77 degree orbital location and we commenced commercial operations at that location in February 2013. Unless earlier terminated under the terms and conditions of the QuetzSat-1 Transponder Agreement, the initial service term will expire in November 2021. Upon expiration of the initial term, we have the option to renew the QuetzSat-1 Transponder Agreement on a year-to-year basis through the end-of-life of the QuetzSat-1 satellite. Upon an in-orbit failure or end-of-life of the QuetzSat-1 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that any options to renew the QuetzSat-1 Transponder Agreement will be exercised or that we will exercise our option to receive service on a replacement satellite. 103 Degree Orbital Location/SES-3. In May 2012, EchoStar entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree orbital location (the “103 Spectrum Rights”). In June 2013, we and EchoStar entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which we may use and develop the 103 Spectrum Rights. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. Both the 103 Spectrum Development Agreement and DISH 103 Spectrum Development Agreement were terminated on March 31, 2018. In connection with the 103 Spectrum Development Agreement, in May 2012, EchoStar also entered into a ten-year service agreement with Ciel pursuant to which EchoStar leases certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree orbital location (the “103 Service Agreement”). In June 2013, we and EchoStar entered into an agreement pursuant to which we lease certain satellite capacity from EchoStar on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, we make certain monthly payments to EchoStar through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, we have certain rights to receive service from EchoStar on a replacement satellite. There can be no assurance that we will exercise our option to receive service on a replacement satellite. Both the 103 Service Agreement and DISH 103 Service Agreement were terminated on March 31, 2018. TT&C Agreement. Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we receive TT&C services from EchoStar for certain satellites (the “TT&C Agreement”). In February 2018, we amended the TT&C Agreement to, among other things, extend the term for one-year with four automatic one-year renewal periods. The fees for services provided under the TT&C Agreement are calculated at either: (i) a fixed fee; or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. We and EchoStar are able to terminate the TT&C Agreement for any reason upon 12 months notice. DBSD North America Agreement. On March 9, 2012, we completed the DBSD Transaction. During the second quarter 2011, EchoStar acquired Hughes. Prior to our acquisition of DBSD North America and EchoStar’s acquisition of Hughes, DBSD North America and HNS entered into an agreement pursuant to which HNS provides, among other things, hosting, operations and maintenance services for DBSD North America’s satellite gateway and associated ground infrastructure. This agreement generally may be terminated by us at any time for convenience. TerreStar Agreement . On March 9, 2012, we completed the TerreStar Transaction. Prior to our acquisition of substantially all the assets of TerreStar and EchoStar’s acquisition of Hughes, TerreStar and HNS entered into various agreements pursuant to which HNS provides, among other things, hosting, operations and maintenance services for TerreStar’s satellite gateway and associated ground infrastructure. These agreements generally may be terminated by us at any time for convenience. “General and administrative expenses” During the three months ended March 31, 2018 and 2017, we incurred $5 million and $3 million, respectively, of general and administrative expenses for services provided to us by EchoStar. These amounts are recorded in “General and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. Real Estate Lease Agreements. We have entered into lease agreements pursuant to which we lease certain real estate from EchoStar. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area, and EchoStar is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each lease is set forth below: · Meridian Lease Agreement. The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending on December 31, 2017. In December 2017, we and EchoStar amended this lease to, among other things, extend the term thereof for one additional year until December 31, 2018. · Santa Fe Lease Agreement. The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado was for a period ending on December 31, 2017. In December 2017, we and EchoStar amended this lease to, among other things, extend the term thereof for one additional year until December 31, 2018. · Cheyenne Lease Agreement. The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending on December 31, 2031. In connection with the completion of the Share Exchange, EchoStar transferred ownership of a portion of this property to us, and, effective March 1, 2017, we and EchoStar amended this lease agreement to (i) terminate the lease of certain space at the portion of the property that was transferred to us and (ii) provide for the continued lease to us of certain space at the portion of the property that EchoStar retained. · 100 Inverness Lease Agreement . In connection with the completion of the Share Exchange, effective March 1, 2017, we lease certain space from EchoStar at 100 Inverness Terrace East, Englewood, Colorado for a period ending in December 2020. This agreement may be terminated by either party upon 180 days’ prior notice. Professional Services Agreement. Prior to 2010, in connection with the Spin-off, we entered into various agreements with EchoStar including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired on January 1, 2010 and were replaced by a Professional Services Agreement. During 2009, we and EchoStar agreed that EchoStar shall continue to have the right, but not the obligation, to receive the following services from us, among others, certain of which were previously provided under the Transition Services Agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, we and EchoStar agreed that we shall continue to have the right, but not the obligation, to engage EchoStar to manage the process of procuring new satellite capacity for us (previously provided under the Satellite Procurement Agreement) and receive logistics, procurement and quality assurance services from EchoStar (previously provided under the Services Agreement) and other support services. The Professional Services Agreement renewed on January 1, 2018 for an additional one-year period until January 1, 2019 and renews automatically for successive one-year periods thereafter, unless terminated earlier by either party upon at least 60 days’ notice. However, either party may terminate the Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice. In connection with the completion of the Share Exchange on February 28, 2017, DISH Network and EchoStar amended the Professional Services Agreement to, among other things, provide certain transition services to each other related to the Share Exchange Agreement. Revenue for services provided by us to EchoStar under the Professional Services Agreement is recorded in “Equipment sales and other revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Other Agreements - EchoStar Tax Sharing Agreement. In connection with the Spin-off, we entered into a tax sharing agreement with EchoStar which governs our respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by us, and we will indemnify EchoStar for such taxes. However, we are not liable for and will not indemnify EchoStar for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”) because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar takes or fails to take; or (iii) any action that EchoStar takes that is inconsistent with the information and representations furnished to the Internal Revenue Service (“IRS”) in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, EchoStar is solely liable for, and will indemnify us for, any resulting taxes, as well as any losses, claims and expenses. The tax sharing agreement will only terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. We and EchoStar file combined income tax returns in certain states. In 2015 and 2014, EchoStar earned and recognized a tax benefit for certain state income tax credits that EchoStar estimates it would be unable to utilize in the future if it had filed separately from us. In addition, EchoStar earned and recognized tax benefits for certain federal income tax credits, a portion of which were allocated to us under IRS rules for affiliated companies. We expect to utilize these tax credits to reduce our federal and state income tax payable in the future. In accordance with accounting rules that apply to transfers of assets between entities under common control, we recorded a capital contribution of less than $1 million in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets for the year ended December 31, 2017 representing the amount that we estimate is more likely than not to be realized by us as a result of our utilization of these tax credits earned. Any payments made to EchoStar related to the utilization of these credits will be recorded as a reduction to “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. Tax Matters Agreement . In connection with the completion of the Share Exchange, we and EchoStar entered into a Tax Matters Agreement, which governs certain rights, responsibilities and obligations with respect to taxes of the Transferred Businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the Transferred Businesses for periods prior to the Share Exchange, and we are responsible for all tax returns and tax liabilities for the Transferred Businesses from and after the Share Exchange. Both we and EchoStar have made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both we and EchoStar have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, we have agreed to indemnify EchoStar if the Transferred Businesses are acquired, either directly or indirectly (e.g., via an acquisition of us), by one or more persons and such acquisition results in the Share Exchange not qualifying for tax free treatment. The Tax Matters Agreement supplements the Tax Sharing Agreement described above, which continues in full force and effect. TiVo . On April 29, 2011, we and EchoStar entered into a settlement agreement with TiVo Inc. (“TiVo”). The settlement resolved all pending litigation between us and EchoStar, on the one hand, and TiVo, on the other hand, including litigation relating to alleged patent infringement involving certain DISH TV digital video recorders, or DVRs. Under the settlement agreement, all pending litigation was dismissed with prejudice and all injunctions that permanently restrain, enjoin or compel any action by us or EchoStar were dissolved. We and EchoStar are jointly responsible for making payments to TiVo in the aggregate amount of $500 million, including an initial payment of $300 million and the remaining $200 million in six equal annual installments between 2012 and 2017. Pursuant to the terms and conditions of the agreements entered into in connection with the Spin-off of EchoStar from us, we made the initial payment to TiVo in May 2011, except for the contribution from EchoStar totaling approximately $10 million, representing an allocation of liability relating to EchoStar’s sales of DVR-enabled receivers to an international customer. Future payments were allocated between us and EchoStar based on historical sales of certain licensed products, with us being responsible for 95% of each annual payment. Pursuant to the Share Exchange Agreement, we were responsible for EchoStar’s allocation of the final payment to TiVo, which was paid July 31, 2017. Patent Cross-License Agreements . In December 2011, we and EchoStar entered into separate patent cross-license agreements with the same third party whereby: (i) EchoStar and such third-party licensed their respective patents to each other subject to certain conditions; and (ii) we and such third-party licensed our respective patents to each other subject to certain conditions (each, a “Cross-License Agreement”). Each Cross License Agreement covers patents acquired by the respective party prior to January 1, 2017 and aggregate payments under both Cross-License Agreements total less than $10 million. Each Cross License Agreement also contains an option to extend each Cross-License Agreement to include patents acquired by the respective party prior to January 1, 2022. In December 2016, we and EchoStar independently exercised our respective options to extend each Cross-License Agreement. The aggregate additional payments to such third-party was less than $3 million. Since the aggregate payments under both Cross-License Agreements were based on the combined annual revenues of us and EchoStar, we and EchoStar agreed to allocate our respective payments to such third party based on our respective percentage of combined total revenue. Rovi License Agreement. On August 19, 2016, we entered into a ten-year patent license agreement (the “Rovi License Agreement”) with Rovi Corporation (“Rovi”) and, for certain limited purposes, EchoStar. EchoStar is a party to the Rovi License Agreement solely with respect to certain provisions relating to the prior patent license agreement between EchoStar and Rovi. There are no payments between us and EchoStar under the Rovi License Agreement. Invidi. In November 2010 and April 2011, EchoStar made investments in Invidi in exchange for shares of Invidi’s Series D Preferred Stock. In November 2016, we, DIRECTV, LLC, a wholly-owned indirect subsidiary of AT&T Inc., and Cavendish Square Holding B.V., an affiliate of WPP plc, entered into a series of agreements to acquire Invidi. As a result of the transaction, EchoStar sold its ownership interest in Invidi on the same terms offered to the other shareholders of Invidi. The transaction closed in January 2017. Hughes Broadband Master Services Agreement. In March 2017, DISH Network L.L.C. (“DNLLC”) and HNS entered into the MSA pursuant to which DNLLC, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders for the Hughes broadband satellite service and related equipment; and (ii) installs Hughes service equipment with respect to activations generated by DNLLC. Under the MSA, HNS will make certain payments to DNLLC for each Hughes service activation generated, and installation performed, by DNLLC. Payments from HNS for services provided are recorded in “Subscriber-related revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The MSA has an initial term of five years with automatic renewal for successive one year terms. After the first anniversary of the MSA, either party has the ability to terminate the MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the MSA, HNS will continue to provide the Hughes service to subscribers and make certain payments to DNLLC pursuant to the terms and conditions of the MSA. For the three months ended March 31, 2018 and 2017, we purchased broadband equipment from |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required for complete financial statements prepared under GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Principles of Consolidation | Principles of Consolidation We consolidate all majority owned subsidiaries, investments in entities in which we have controlling influence and variable interest entities where we have been determined to be the primary beneficiary. Minority interests are recorded as noncontrolling interests or redeemable noncontrolling interests. See below for further information. Non-consolidated investments are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do not have the ability to significantly influence the operating decisions of an investee, these equity securities are classified as either marketable investment securities or other investments and recorded at fair value with changes recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation. On February 28, 2017, we and EchoStar and certain of our respective subsidiaries completed the transactions contemplated by the Share Exchange Agreement (the “Share Exchange Agreement”) that was previously entered into on January 31, 2017 (the “Share Exchange”). Pursuant to the Share Exchange Agreement, among other things, EchoStar transferred to us certain assets and liabilities of the EchoStar technologies and EchoStar broadcasting businesses, consisting primarily of the businesses that design, develop and distribute digital set-top boxes, provide satellite uplinking services and develop and support streaming video technology, as well as certain investments in joint ventures, spectrum licenses, real estate properties and EchoStar’s ten percent non-voting interest in Sling TV Holding L.L.C. (the “Transferred Businesses”), and in exchange, we transferred to EchoStar the 6,290,499 shares of preferred tracking stock issued by EchoStar (the “EchoStar Tracking Stock”) and 81.128 shares of preferred tracking stock issued by Hughes Satellite Systems Corporation, a subsidiary of EchoStar (the “HSSC Tracking Stock,” and together with the EchoStar Tracking Stock, collectively, the “Tracking Stock”), that tracked the residential retail satellite broadband business of HNS. In connection with the Share Exchange, we and EchoStar and certain of their subsidiaries entered into certain agreements covering, among other things, tax matters, employee matters, intellectual property matters and the provision of transitional services. See Note 12 for further information. As the Share Exchange was a transaction between entities that are under common control, accounting rules require that our Condensed Consolidated Financial Statements include the results of the Transferred Businesses for all periods presented, including periods prior to the completion of the Share Exchange. We initially recorded the Transferred Businesses at EchoStar’s historical cost basis. The difference between the historical cost basis of the Transferred Businesses and the net carrying value of the Tracking Stock was recorded in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets. The results of the Transferred Businesses were prepared from separate records maintained by EchoStar for the periods prior to March 1, 2017, and may not necessarily be indicative of the conditions that would have existed, or the results of operations, if the Transferred Businesses had been operated on a combined basis with our subsidiaries. |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests Northstar Wireless . Northstar Wireless is a wholly-owned subsidiary of Northstar Spectrum, which is an entity owned by Northstar Manager, LLC (“Northstar Manager”) and us. Under the applicable accounting guidance in ASC 810, Northstar Spectrum is considered a variable interest entity and, based on the characteristics of the structure of this entity and in accordance with the applicable accounting guidance, we consolidate Northstar Spectrum into our financial statements. After the five-year anniversary of the grant of the AWS-3 Licenses to Northstar Wireless (and in certain circumstances, prior to the five-year anniversary of the grant of the AWS-3 Licenses to Northstar Wireless), Northstar Manager has the ability, but not the obligation, to require Northstar Spectrum to purchase Northstar Manager’s ownership interests in Northstar Spectrum (the “Northstar Put Right”) for a purchase price that generally equals its equity contribution to Northstar Spectrum plus a fixed annual rate of return. In the event that the Northstar Put Right is exercised by Northstar Manager, the consummation of the sale will be subject to FCC approval. Northstar Spectrum does not have a call right with respect to Northstar Manager’s ownership interests in Northstar Spectrum. Although Northstar Manager is the sole manager of Northstar Spectrum, Northstar Manager’s ownership interest is considered temporary equity under the applicable accounting guidance and is thus recorded as part of “Redeemable noncontrolling interests” in the mezzanine section of our Condensed Consolidated Balance Sheets. Northstar Manager’s ownership interest in Northstar Spectrum was initially accounted for at fair value. Subsequently, Northstar Manager’s ownership interest in Northstar Spectrum is increased by the fixed annual rate of return through “Redeemable noncontrolling interests” in our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The operating results of Northstar Spectrum attributable to Northstar Manager are recorded as “Redeemable noncontrolling interests” in our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 9 for further information. SNR Wireless . SNR Wireless is a wholly-owned subsidiary of SNR HoldCo, which is an entity owned by SNR Wireless Management, LLC (“SNR Management”) and us. Under the applicable accounting guidance in ASC 810, SNR HoldCo is considered a variable interest entity and, based on the characteristics of the structure of this entity and in accordance with the applicable accounting guidance, we consolidate SNR HoldCo into our financial statements. After the five-year anniversary of the grant of the AWS-3 Licenses to SNR Wireless (and in certain circumstances, prior to the five-year anniversary of the grant of the AWS-3 Licenses to SNR Wireless), SNR Management has the ability, but not the obligation, to require SNR HoldCo to purchase SNR Management’s ownership interests in SNR HoldCo (the “SNR Put Right”) for a purchase price that generally equals its equity contribution to SNR HoldCo plus a fixed annual rate of return. In the event that the SNR Put Right is exercised by SNR Management, the consummation of the sale will be subject to FCC approval. SNR HoldCo does not have a call right with respect to SNR Management’s ownership interests in SNR HoldCo. Although SNR Management is the sole manager of SNR HoldCo, SNR Management’s ownership interest is considered temporary equity under the applicable accounting guidance and is thus recorded as part of “Redeemable noncontrolling interests” in the mezzanine section of our Condensed Consolidated Balance Sheets. SNR Management’s ownership interest in SNR HoldCo was initially accounted for at fair value. Subsequently, SNR Management’s ownership interest in SNR HoldCo is increased by the fixed annual rate of return through “Redeemable noncontrolling interests” on our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The operating results of SNR HoldCo attributable to SNR Management are recorded as “Redeemable noncontrolling interests” on our Condensed Consolidated Balance Sheets, with the offset recorded in “Net income (loss) attributable to noncontrolling interests, net of tax” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 9 for further information. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense for each reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of options granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, fair value of multi-element arrangements, capital leases, asset impairments, estimates of future cash flows used to evaluate impairments, useful lives of property, equipment and intangible assets, independent third-party retailer incentives, programming expenses and subscriber lives. Economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur. |
Marketable Investment Securities | Marketable Investment Securities Historically, we classified all marketable investment securities as available-for-sale, except for investments which were accounted for as trading securities, and adjusted the carrying amount of our available-for-sale securities to fair value and reported the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. Our trading securities were carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Subsequent to the adoption of ASU 2016-01 during the first quarter 2018, all equity securities are carried at fair value, with changes in fair value recognized in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). All debt securities are classified as available-for-sale. We adjust the carrying amount of our debt securities to fair value and report the related temporary unrealized gains and losses as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholders’ equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. Declines in the fair value of a marketable debt security which are determined to be “other-than-temporary” are recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), thus establishing a new cost basis for such investment. |
Capitalized Interest | Capitalized Interest We capitalize interest associated with the acquisition or construction of certain assets, including, among other things, satellites and wireless spectrum licenses. Capitalization of interest begins when, among other things, steps are taken to prepare the asset for its intended use and ceases when the asset is ready for its intended use or when these activities are substantially suspended. We are currently preparing for the commercialization of our AWS-4, H Block, 700 MHz, 600 MHz and MVDDS wireless spectrum licenses, and interest expense related to their carrying amount is being capitalized. In addition, the FCC has granted certain AWS-3 Licenses to Northstar Wireless and to SNR Wireless, respectively, in which we have made certain non-controlling investments. Northstar Wireless and SNR Wireless are preparing for the commercialization of their AWS-3 Licenses and interest expense related to their carrying amount is also being capitalized. On June 14, 2017, the FCC issued an order granting our application to acquire the 600 MHz Licenses, and we began preparing for the commercialization of our 600 MHz Licenses and began capitalizing interest related to these licenses on June 14, 2017. As the carrying amount of the licenses discussed above exceeded the carrying value of our long-term debt beginning on June 14, 2017, materially all of our interest expense is now being capitalized. |
Fair Value Measurements | Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We apply the following hierarchy in determining fair value: · Level 1, defined as observable inputs being quoted prices in active markets for identical assets; · Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and derivative financial instruments indexed to marketable investment securities; and · Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available. As of March 31, 2018 and December 31, 2017, the carrying amount for cash and cash equivalents, trade accounts receivable (net of allowance for doubtful accounts) and current liabilities (excluding the “Current portion of long-term debt and capital lease obligations”) was equal to or approximated fair value due to their short-term nature or proximity to current market rates. See Note 5 for the fair value of our marketable investment securities and derivative financial instruments. Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are based on, among other things, available trade information, and/or an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 8 for the fair value of our long-term debt. |
Revenue Recognition | Revenue Recognition Our revenue is primarily derived from Pay-TV programming services that we provide to our subscribers. We also generate revenue from broadband services, equipment rental fees and other hardware related fees, including DVRs, broadband equipment, and fees from subscribers with multiple receivers; advertising services; fees earned from our in-home service operations; warranty services; and sales of digital receivers and related equipment to third-party pay-TV providers. See Note 10 for further information, including revenue disaggregated by major source. Our residential video subscribers contract for individual services or combinations of services, as discussed above, the majority of which are generally capable of being distinct and are accounted for as separate performance obligations. We consider our installations for first time DISH TV subscribers to be a service. However, since we provide a significant integration service combining the installation with programming services we have concluded that the installation is not distinct from programming and thus the installation and programming services are accounted for as a single performance obligation. We generally satisfy these performance obligations and recognize revenue as the services are provided, for example as the programming is broadcast to subscribers, as this best represents the transfer of control of the services to the subscriber. In cases where a subscriber is charged certain nonrefundable upfront fees, those fees are generally considered to be material rights to the subscriber related to the subscriber’s option to renew without having to pay an additional fee upon renewal. These fees will therefore be deferred and recognized over the estimated period of time during which the fee remains material to the customer, which we estimate to be less than one year. Revenues arising from our in-home service operations that are separate from the initial installation, such as mounting a TV on a subscriber’s wall, are generally recognized when these services are performed. For our residential video subscribers, we have concluded that the contract term under ASC 606 is one month and as a result the revenue recognized for these subscribers for a given month is equal to the amount billed in that month, except for certain nonrefundable upfront fees that are accounted for as material rights, as discussed above. Revenues from our advertising services are typically recognized as the advertisements are broadcast. Sales of equipment to subscribers or other third parties are recognized when control is transferred under the contract. Revenue from our commercial video subscribers typically follows the residential model described above, with the exception that the contract term for most of our commercial subscribers exceeds one month and can be multiple years in length. However, commercial subscribers typically do not receive time-limited discounts or free service periods and accordingly, while they may have multiple performance obligations, revenue is equal to the amount billed in a given month. Contract Balances The timing of revenue recognition generally differs from the timing of invoicing to customers. When revenue is recognized prior to invoicing, we record a receivable. When revenue is recognized subsequent to invoicing, we record deferred revenue. Our residential video subscribers are typically billed monthly, and the contract balances for those customers arise from the timing of the monthly billing cycle. We do not adjust the amount of consideration for financing impacts as we apply a practical expedient when we anticipate that the period between transfer of goods and services and eventual payment for those goods and services will be less than one year. See Note 11 for further information, including balance and activity detail about our allowance for doubtful accounts and deferred revenue. Assets recognized related to the Costs to Obtain a Contract with a Subscriber We recognize an asset for the incremental costs of obtaining a contract with a subscriber if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs, including those with our independent third-party retailers, meet the requirements to be capitalized, and payments made under these programs are capitalized and amortized to expense over the estimated subscriber life. During the three months ended March 31, 2018, we capitalized $41 million under these programs. The amortization expense related to these programs was $3 million for the three months ended March 31, 2018. As of March 31, 2018, we had a total of $52 million capitalized on our Condensed Consolidated Balance Sheets. These amounts are capitalized in “Other currents assets” and “Other noncurrent assets, net” on our Condensed Consolidated Balance Sheets, and then amortized in “Other subscriber acquisition costs” on our Condensed Consolidated Statements of Operations. Impact of Adoption of ASU 2014-09 On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09 Revenue from Contracts with Customers (“ASU 2014-09”) and has modified the standard thereafter. We adopted ASU 2014-09, as modified, and now codified as Accounting Standard Codification Topic 606 (“ASC 606”) and Accounting Standard Codification Topic 340-40 (“ASC 340-40”) on January 1, 2018, using the modified retrospective method. Under that method, we applied the new guidance to all open contracts existing as of January 1, 2018, recognizing in beginning retained earnings an adjustment for the cumulative effect of the change, which was $2 million, net of deferred taxes of $1 million. In addition, we are providing additional disclosures comparing the results under previous guidance to those as follows: Condensed Consolidated Statements of Operations DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) For the Three Months Ended March 31, 2018 Subscriber-related revenue $ 3,431,632 $ (8,928) $ 3,422,704 Subscriber-related expenses $ 2,189,378 $ (4,427) $ 2,184,951 Total subscriber acquisition costs $ 236,309 $ (40,298) $ 196,011 Operating income (loss) $ 493,709 $ 35,797 $ 529,506 Income (loss) before income taxes $ 465,261 $ 35,797 $ 501,058 Income tax (provision) benefit, net $ (107,146) $ (8,591) $ (115,737) Net income (loss) attributable to DISH Network $ 340,354 $ 27,206 $ 367,560 Diluted net income (loss) per share attributable to DISH Network $ 0.65 $ 0.05 $ 0.70 Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) As of March 31, 2018 Inventory $ 310,641 $ 37,105 $ 347,746 Other current assets $ 223,287 $ 13,792 $ 237,079 Other noncurrent assets, net $ 368,501 $ 38,518 $ 407,019 Total assets $ 30,065,518 $ 89,415 $ 30,154,933 Deferred revenue and other $ 694,757 $ 48,081 $ 742,838 Deferred tax liabilities $ 2,103,037 $ 9,384 $ 2,112,421 Long-term deferred revenue and other long-term liabilities $ 469,210 $ 2,424 $ 471,634 Total liabilities $ 22,368,579 $ 59,889 $ 22,428,468 Total stockholders' equity (deficit) $ 7,295,737 $ 29,526 $ 7,325,263 Total liabilities and stockholders' equity (deficit) $ 30,065,518 $ 89,415 $ 30,154,933 The adoption of ASU 2014-09 had no impact to cash flows from operating, investing, and financing activities on our Condensed Consolidated Statements of Cash Flows. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs totaled $6 million and $7 million for the three months ended March 31, 2018 and 2017, respectively. |
New Accounting Pronouncements | New Accounting Pronouncements Leases. In February 2016, the FASB issued new guidance on the accounting for leases, ASU 2016-02 Leases (“ASU 2016-02”). The guidance amends the existing accounting standards for lease accounting, including the requirement that lessees recognize right of use assets and lease liabilities initially measured at the present value of the lease payments for all leases with a term of greater than twelve months. The accounting guidance for lessors remains largely unchanged. The effective date of this standard for us will be January 1, 2019. While we have not determined the effect of the standard on our ongoing financial reporting, we currently believe the most significant change will be the recognition of right of use assets and lease liabilities on our Condensed Consolidated Balance Sheets. We have established a multidisciplinary team to assess the implementation of this guidance and are currently in the process of identifying and implementing changes to our systems, process, and internal controls to meet the requirements of the standard. Financial Instruments – Credit Losses . On June 16, 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact the adoption of ASU 2016-13 will have on our Condensed Consolidated Financial Statements and related disclosures. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ASU 2014-09 | |
Redeemable Noncontrolling Interest | |
Schedule of impact of ASU 2014-09 | Condensed Consolidated Statements of Operations DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) For the Three Months Ended March 31, 2018 Subscriber-related revenue $ 3,431,632 $ (8,928) $ 3,422,704 Subscriber-related expenses $ 2,189,378 $ (4,427) $ 2,184,951 Total subscriber acquisition costs $ 236,309 $ (40,298) $ 196,011 Operating income (loss) $ 493,709 $ 35,797 $ 529,506 Income (loss) before income taxes $ 465,261 $ 35,797 $ 501,058 Income tax (provision) benefit, net $ (107,146) $ (8,591) $ (115,737) Net income (loss) attributable to DISH Network $ 340,354 $ 27,206 $ 367,560 Diluted net income (loss) per share attributable to DISH Network $ 0.65 $ 0.05 $ 0.70 Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2014-09 DISH Network (as currently reported) (In thousands) As of March 31, 2018 Inventory $ 310,641 $ 37,105 $ 347,746 Other current assets $ 223,287 $ 13,792 $ 237,079 Other noncurrent assets, net $ 368,501 $ 38,518 $ 407,019 Total assets $ 30,065,518 $ 89,415 $ 30,154,933 Deferred revenue and other $ 694,757 $ 48,081 $ 742,838 Deferred tax liabilities $ 2,103,037 $ 9,384 $ 2,112,421 Long-term deferred revenue and other long-term liabilities $ 469,210 $ 2,424 $ 471,634 Total liabilities $ 22,368,579 $ 59,889 $ 22,428,468 Total stockholders' equity (deficit) $ 7,295,737 $ 29,526 $ 7,325,263 Total liabilities and stockholders' equity (deficit) $ 30,065,518 $ 89,415 $ 30,154,933 |
Basic and Diluted Net Income 20
Basic and Diluted Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Basic and Diluted Net Income (Loss) Per Share | |
Table presents EPS amounts for all periods and the basic and diluted weighted-average shares outstanding used in the calculation | For the Three Months Ended March 31, 2018 2017 (In thousands, except per share amounts) Net income (loss) $ 385,321 $ 390,075 Less: Net income (loss) attributable to noncontrolling interests, net of tax 17,761 14,360 Net income (loss) attributable to DISH Network - Basic 367,560 375,715 Interest on dilutive Convertible Notes, net of tax (1) — 17,119 Net income (loss) attributable to DISH Network - Diluted $ 367,560 $ 392,834 Weighted-average common shares outstanding - Class A and B common stock: Basic 466,642 465,412 Dilutive impact of Convertible Notes 58,192 48,056 Dilutive impact of stock awards outstanding 475 975 Diluted 525,309 514,443 Earnings per share - Class A and B common stock: Basic net income (loss) per share attributable to DISH Network $ 0.79 $ 0.81 Diluted net income (loss) per share attributable to DISH Network $ 0.70 $ 0.76 (1) For the three months ended March 31, 2018, materially all of our interest expense was capitalized. See Note 2 for further information. |
Schedule of dilutive securities not included in the diluted EPS calculation | As of March 31, 2018 2017 (In thousands) Anti-dilutive stock awards 3,572 1,491 Performance based options 4,804 6,489 Restricted Performance Units/Awards 2,061 1,318 Common stock warrants 46,029 46,029 Total 56,466 55,327 |
Supplemental Data - Statement21
Supplemental Data - Statements of Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Data - Statements of Cash Flows | |
Schedule of supplemental cash flow and other non-cash data | For the Three Months Ended March 31, 2018 2017 (In thousands) Cash paid for interest (including capitalized interest) $ 294,122 $ 313,396 Cash received for interest 2,878 3,406 Cash paid for income taxes (1) 1,758 1,001 Capitalized interest (2) 261,680 236,570 Initial equity component of the 2 3/8% Convertible Notes due 2024, net of deferred taxes of $92,512 — 159,869 Assets financed under capital lease obligations 142 — (1) Certain changes resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”), including, among other things, limitations on the deductibility of interest, may increase cash paid for income taxes in 2018. (2) See Note 2 for further information. |
Marketable Investment Securit22
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | |
Schedule of marketable investment securities, restricted cash and other investment securities | As of March 31, December 31, 2018 2017 (In thousands) Marketable investment securities: Current marketable investment securities: Strategic - available-for-sale $ 195 $ 195 Strategic - trading/equity (Note 2) 56,078 93,367 Other 107,441 407,603 Total current marketable investment securities 163,714 501,165 Restricted marketable investment securities (1) 72,231 72,014 Total marketable investment securities 235,945 573,179 Restricted cash and cash equivalents (1) 407 393 Other investment securities: Other investment securities - equity method 115,429 113,460 Total other investment securities 115,429 113,460 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 351,781 $ 687,032 (1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash, cash equivalents and marketable investment securities” on our Condensed Consolidated Balance Sheets. |
Schedule of components of available-for-sale investments | As of March 31, 2018 As of December 31, 2017 Marketable Marketable Investment Unrealized Investment Unrealized Securities Gains Losses Net Securities Gains Losses Net (In thousands) Debt securities (including restricted): U.S. Treasury and agency securities $ 71,866 $ — $ (113) $ (113) $ 84,286 $ 22 $ (141) $ (119) Commercial paper — — — — 107,962 — (10) (10) Corporate securities 105,074 — (37) (37) 282,256 — (124) (124) Other 2,927 58 (1) 57 5,308 58 (1) 57 Total $ 179,867 $ 58 $ (151) $ (93) $ 479,812 $ 80 $ (276) $ (196) |
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | As of March 31, 2018 December 31, 2017 Fair Unrealized Fair Unrealized Value Loss Value Loss (In thousands) Debt Securities: Less than 12 months $ 111,505 $ (68) $ 410,145 $ (156) 12 months or more 24,093 (83) 34,340 (120) Total $ 135,598 $ (151) $ 444,485 $ (276) |
Schedule of fair value measurements | As of March 31, 2018 December 31, 2017 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 2,012,886 $ 1,226,608 $ 786,278 $ — $ 1,425,798 $ 655 $ 1,425,143 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ 71,866 $ 71,866 $ — $ — $ 84,286 $ 84,286 $ — $ — Commercial Paper — — — — 107,962 — 107,962 — Corporate securities 105,074 — 105,074 — 282,256 — 282,256 — Other 2,927 — 2,732 195 5,308 — 5,113 195 Equity securities 56,078 56,078 — — 93,367 93,367 — — Total $ 235,945 $ 127,944 $ 107,806 $ 195 $ 573,179 $ 177,653 $ 395,331 $ 195 |
Schedule of gains and losses on sales and changes in carrying values of investments | For the Three Months Ended March 31, Other, net: 2018 2017 (In thousands) Marketable investment securities - gains (losses) on sales/exchanges $ 567 $ 2,272 Marketable investment securities - unrealized gains (losses) on equity securities (37,289) — Equity in earnings 1,446 (726) Other 468 3,199 Total $ (34,808) $ 4,745 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory | |
Schedule of inventory | As of March 31, December 31, 2018 2017 (In thousands) Finished goods $ 281,288 $ 248,233 Work-in-process and service repairs 51,705 54,455 Raw materials 14,753 18,320 Total inventory $ 347,746 $ 321,008 |
Property and Equipment and In24
Property and Equipment and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property and Equipment and Intangible Assets | |
Schedule of property and equipment | Depreciable As of Life March 31, December 31, (In Years) 2018 2017 (In thousands) Equipment leased to customers 2 - 5 $ 2,250,393 $ 2,323,100 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 D1 N/A 55,000 55,000 T1 14.25 100,000 100,000 Satellites acquired under capital lease agreements 10 - 15 499,819 499,819 Furniture, fixtures, equipment and other 2 - 10 1,804,873 1,779,109 Buildings and improvements 3 - 40 294,522 293,571 Land — 14,057 14,057 Construction in progress — 105,602 103,176 Total property and equipment 5,813,179 5,856,745 Accumulated depreciation (3,706,248) (3,673,084) Property and equipment, net $ 2,106,931 $ 2,183,661 |
Schedule of depreciation and amortization expense | For the Three Months Ended March 31, 2018 2017 (In thousands) Equipment leased to customers $ 110,521 $ 136,134 Satellites 25,086 29,012 Buildings, furniture, fixtures, equipment and other 57,365 39,484 Total depreciation and amortization $ 192,972 $ 204,630 |
Schedule of pay-TV satellite fleet | Estimated Useful Life Degree (Years)/Lease Launch Orbital Termination Satellites Date Location Date Owned: EchoStar XV July 2010 61.5 15 EchoStar XVIII June 2016 61.5 15 Leased from EchoStar (1): EchoStar VII (2) February 2002 119 June 2018 EchoStar IX August 2003 121 Month to month EchoStar X (3) February 2006 110 February 2021 EchoStar XI (3) July 2008 110 September 2021 EchoStar XIV (3) March 2010 119 February 2023 EchoStar XVI (4) November 2012 61.5 January 2023 Nimiq 5 September 2009 72.7 September 2019 QuetzSat-1 September 2011 77 November 2021 Leased from Other Third Party: Anik F3 April 2007 118.7 April 2022 Ciel II December 2008 129 January 2019 (1) See Note 12 for further information on our Related Party Transactions with EchoStar. (2) The satellite capacity agreement for EchoStar VII will expire on June 30, 2018. (3) We generally have the option to renew each lease on a year-to-year basis through the end of the useful life of the respective satellite. We have the option to renew this lease for an additional five-year period |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt and Capital Lease Obligations | |
Schedule of carrying and fair values of the entity's debt facilities | As of March 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value (In thousands) 4 1/4% Senior Notes due 2018 (1) $ 969,388 $ 969,340 $ 1,025,861 $ 1,031,596 7 7/8% Senior Notes due 2019 1,400,000 1,472,730 1,400,000 1,501,206 5 1/8% Senior Notes due 2020 1,100,000 1,103,828 1,100,000 1,127,588 6 3/4% Senior Notes due 2021 2,000,000 2,022,740 2,000,000 2,120,480 5 7/8% Senior Notes due 2022 2,000,000 1,920,740 2,000,000 2,014,140 5% Senior Notes due 2023 1,500,000 1,359,255 1,500,000 1,432,335 5 7/8% Senior Notes due 2024 2,000,000 1,794,980 2,000,000 1,952,220 2 3/8% Convertible Notes due 2024 1,000,000 885,570 1,000,000 962,860 7 3/4% Senior Notes due 2026 2,000,000 1,894,280 2,000,000 2,118,400 3 3/8% Convertible Notes due 2026 3,000,000 2,879,610 3,000,000 3,262,290 Other notes payable 44,178 44,178 44,928 44,928 Subtotal 17,013,566 $ 16,347,251 17,070,789 $ 17,568,043 Unamortized debt discount on the Convertible Notes (903,094) (925,360) Unamortized deferred financing costs and other debt discounts, net (44,324) (46,782) Capital lease obligations (2) 94,830 104,318 Total long-term debt and capital lease obligations (including current portion) $ 16,160,978 $ 16,202,965 (1) During the three months ended March 31, 2018, we repurchased $56 million of our 4 1/4% Senior Notes due 2018 in open market trades. The remaining balance of $969 million was included in “Current portion of long-term debt and capital lease obligations” on our Condensed Consolidated Balance Sheets as of March 31, 2018. This remaining balance matured on April 1, 2018 and on April 2, 2018, we redeemed it from our cash and marketable investment securities balances. (2) Disclosure regarding fair value of capital leases is not required. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Schedule of assets, revenue, and operating income by segment | As of March 31, December 31, 2018 2017 (In thousands) Total assets: Pay-TV $ 28,673,503 $ 28,353,581 Wireless 23,638,763 23,377,088 Eliminations (22,157,333) (21,956,903) Total assets $ 30,154,933 $ 29,773,766 For the Three Months Ended March 31, 2018 2017 (In thousands) Revenue: Pay-TV $ 3,458,487 $ 3,680,361 Wireless — — Eliminations — — Total revenue $ 3,458,487 $ 3,680,361 Operating income (loss): Pay-TV $ 539,302 $ 621,665 Wireless (9,796) (14,345) Eliminations — — Total operating income (loss) $ 529,506 $ 607,320 |
Schedule of revenue by geographical region | For the Three Months Ended March 31, Revenue: 2018 2017 (In thousands) United States $ 3,449,016 $ 3,670,764 Canada and Mexico 9,471 9,597 Total revenue $ 3,458,487 $ 3,680,361 |
Revenue from external customers disaggregated by major revenue source | For the Three Months Ended March 31, Category: 2018 2017 (In thousands) Pay-TV video and related revenue $ 3,347,597 $ 3,536,462 Broadband revenue 75,107 107,624 Equipment sales and other revenue 35,783 36,275 Total $ 3,458,487 $ 3,680,361 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
NagraStar | |
Schedule of transactions with related party | For the Three Months Ended March 31, 2018 2017 (In thousands) Purchases (including fees): Purchases from NagraStar $ 16,843 $ 17,779 As of March 31, December 31, 2018 2017 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 17,063 $ 16,685 Commitments to NagraStar $ 1,893 $ 4,927 |
Dish Mexico | |
Schedule of transactions with related party | For the Three Months Ended March 31, 2018 2017 (In thousands) Sales: Digital receivers and related components $ 280 $ 871 Uplink services $ 1,034 $ 1,023 As of March 31, December 31, 2018 2017 (In thousands) Amounts Receivable: Amounts receivable from Dish Mexico $ 1,415 $ 3,027 |
Organization and Business Act28
Organization and Business Activities (Details) item in Thousands, $ in Millions | 3 Months Ended | 84 Months Ended | 114 Months Ended | 123 Months Ended | |
Mar. 31, 2018USD ($)segmentitem | Dec. 31, 2014USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Spectrum Investments | |||||
Number of primary operating business units | segment | 2 | ||||
Number of Pay-TV subscribers | item | 13,148 | 13,148 | |||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | $ 21,000 | |||
Total debt and equity investments in subsidiaries | $ 10,000 | $ 10,000 | |||
Sling TV Holding L.L.C. | |||||
Spectrum Investments | |||||
Number of Pay-TV subscribers | item | 2,303 | 2,303 | |||
Dish TV | |||||
Spectrum Investments | |||||
Number of Pay-TV subscribers | item | 10,845 | 10,845 | |||
Wireless | |||||
Spectrum Investments | |||||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | $ 11 | |||
Total debt and equity investments in subsidiaries | $ 11,000 | 11,000 | |||
Northstar Spectrum And SNR Holdco | |||||
Spectrum Investments | |||||
Total debt and equity investments in subsidiaries | 10 | $ 10 | $ 10,000 | ||
ASU 2014-09 | |||||
Spectrum Investments | |||||
Cumulative effect of the change, net | $ 2 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Accounting policy disclosures | ||||
Costs capitalized under the programs during the period | $ 41,000 | |||
Amortization expense related to the programs | 3,000 | |||
Total costs capitalized | 52,000 | |||
Deferred taxes | 2,112,421 | $ 2,019,538 | ||
Research and Development | ||||
Research and development cost | $ 6,000 | $ 7,000 | ||
Northstar Manager LLC | ||||
Variable Interest Entity | ||||
Number of years after wireless spectrum license is granted until put right vests | 5 years | |||
SNR Wireless Management LLC | ||||
Variable Interest Entity | ||||
Number of years after wireless spectrum license is granted until put right vests | 5 years | |||
Sling TV Holding L.L.C. | ||||
Accounting policy disclosures | ||||
Nonvoting Interest Prior To Share Exchange | 10.00% | |||
Satellite and Tracking Stock Transaction | DISH Investors | EchoStar | ||||
Accounting policy disclosures | ||||
Preferred tracking stock issued by related party | 6,290,499 | |||
Satellite and Tracking Stock Transaction | DISH Investors | HSSC | ||||
Accounting policy disclosures | ||||
Preferred tracking stock issued by related party | 81.128 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Condensed Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 3,458,487 | $ 3,680,361 |
Subscriber-related expenses | 2,184,951 | 2,243,187 |
Total subscriber acquisition costs | 196,011 | 290,034 |
Operating income (loss) | 529,506 | 607,320 |
Income (loss) before income taxes | 501,058 | 597,187 |
Income tax (provision) benefit, net | (115,737) | (207,112) |
Net income (loss) attributable) to DISH Network | $ 367,560 | $ 375,715 |
Diluted net income (loss) per share attributable to DISH Network | $ 0.70 | $ 0.76 |
Subscriber-related revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 3,422,704 | |
ASU 2014-09 | DISH Network (as would have been reported under previous standard) | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Subscriber-related expenses | 2,189,378 | |
Total subscriber acquisition costs | 236,309 | |
Operating income (loss) | 493,709 | |
Income (loss) before income taxes | 465,261 | |
Income tax (provision) benefit, net | (107,146) | |
Net income (loss) attributable) to DISH Network | $ 340,354 | |
Diluted net income (loss) per share attributable to DISH Network | $ 0.65 | |
ASU 2014-09 | DISH Network (as would have been reported under previous standard) | Subscriber-related revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 3,431,632 | |
ASU 2014-09 | Impact of adoption ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Subscriber-related expenses | (4,427) | |
Total subscriber acquisition costs | (40,298) | |
Operating income (loss) | 35,797 | |
Income (loss) before income taxes | 35,797 | |
Income tax (provision) benefit, net | (8,591) | |
Net income (loss) attributable) to DISH Network | $ 27,206 | |
Diluted net income (loss) per share attributable to DISH Network | $ 0.05 | |
ASU 2014-09 | Impact of adoption ASU 2014-09 | Subscriber-related revenue | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ (8,928) |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Inventory | $ 347,746 | $ 321,008 |
Other current assets | 237,079 | 329,394 |
Other noncurrent assets, net | 407,019 | 393,426 |
Total assets | 30,154,933 | 29,773,766 |
Deferred revenue and other | 742,838 | 709,074 |
Deferred tax liabilities | 2,112,421 | 2,019,538 |
Long-term deferred revenue and other long-term liabilities | 471,634 | 470,487 |
Total liabilities | 22,428,468 | 22,452,470 |
Total stockholders' equity (deficit) | 7,325,263 | 6,937,906 |
Total liabilities and stockholders' equity (deficit) | 30,154,933 | $ 29,773,766 |
ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred tax liabilities | 1,000 | |
DISH Network (as would have been reported under previous standard) | ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Inventory | 310,641 | |
Other current assets | 223,287 | |
Other noncurrent assets, net | 368,501 | |
Total assets | 30,065,518 | |
Deferred revenue and other | 694,757 | |
Deferred tax liabilities | 2,103,037 | |
Long-term deferred revenue and other long-term liabilities | 469,210 | |
Total liabilities | 22,368,579 | |
Total stockholders' equity (deficit) | 7,295,737 | |
Total liabilities and stockholders' equity (deficit) | 30,065,518 | |
Impact of adoption ASU 2014-09 | ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Inventory | 37,105 | |
Other current assets | 13,792 | |
Other noncurrent assets, net | 38,518 | |
Total assets | 89,415 | |
Deferred revenue and other | 48,081 | |
Deferred tax liabilities | 9,384 | |
Long-term deferred revenue and other long-term liabilities | 2,424 | |
Total liabilities | 59,889 | |
Total stockholders' equity (deficit) | 29,526 | |
Total liabilities and stockholders' equity (deficit) | $ 89,415 |
Basic and Diluted Net Income 32
Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Net income (loss) | $ 385,321 | $ 390,075 | |
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 17,761 | 14,360 | |
Net income (loss) attributable to DISH Network | 367,560 | 375,715 | |
Interest on dilutive Convertible Notes, net of tax | 17,119 | ||
Net Income (Loss) Available to Common Stockholders, Diluted, Total | $ 367,560 | $ 392,834 | |
Weighted-average common shares outstanding - Class A and B common stock: | |||
Basic (in shares) | 466,642 | 465,412 | |
Dilutive impact of Convertible Notes (in shares) | 58,192 | 48,056 | |
Dilutive impact of stock awards outstanding (in shares) | 475 | 975 | |
Diluted (in shares) | 525,309 | 514,443 | |
Earnings per share - Class A and B common stock: | |||
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.79 | $ 0.81 | |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.70 | $ 0.76 | |
2 3/8% Convertible Notes due 2024 | |||
Interest rate (as a percent) | 2.375% | ||
3 3/8% Convertible Notes due 2026 | |||
Interest rate (as a percent) | 3.375% | 3.375% |
Basic and Diluted Net Income 33
Basic and Diluted Net Income (Loss) Per Share - Performance based stock (Details) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive securities excluded from computation of earnings per share | ||
Strike price of the warrants | $ 86.08 | |
Dilutive securities excluded from computation of earnings per share | 56,466 | 55,327 |
Anti-dilutive stock awards | ||
Antidilutive securities excluded from computation of earnings per share | ||
Dilutive securities excluded from computation of earnings per share | 3,572 | 1,491 |
Performance based options | ||
Antidilutive securities excluded from computation of earnings per share | ||
Dilutive securities excluded from computation of earnings per share | 4,804 | 6,489 |
Restricted Performance Units | ||
Antidilutive securities excluded from computation of earnings per share | ||
Dilutive securities excluded from computation of earnings per share | 2,061 | 1,318 |
Common stock warrants | ||
Antidilutive securities excluded from computation of earnings per share | ||
Dilutive securities excluded from computation of earnings per share | 46,029 | 46,029 |
Supplemental Data - Statement34
Supplemental Data - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Supplemental Data - Statements of Cash Flows | ||
Cash paid for interest (including capitalized interest) | $ 294,122 | $ 313,396 |
Cash received for interest | 2,878 | 3,406 |
Cash paid for income taxes | 1,758 | 1,001 |
Capitalized interest | 261,680 | 236,570 |
Satellites and other assets financed under capital lease obligations | $ 142 | |
2 3/8% Convertible Notes due 2024 | ||
Supplemental Data - Statements of Cash Flows | ||
Interest rate (as a percent) | 2.375% | |
Initial equity component of the Convertible Notes net of deferred taxes | $ 159,869 | |
Deferred taxes | $ 92,512 |
Marketable Investment Securit35
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Marketable investment securities, restricted cash and other investment securities | ||
Strategic - available-for-sale | $ 195 | $ 195 |
Strategic - trading | 56,078 | 93,367 |
Other | 107,441 | 407,603 |
Total current marketable investment securities | 163,714 | 501,165 |
Restricted marketable investment securities | 72,231 | 72,014 |
Total marketable investment securities | 235,945 | 573,179 |
Restricted cash and cash equivalents | 407 | 393 |
Total other investment securities | 115,429 | 113,460 |
Total marketable investment securities, restricted cash and cash equivalents and other investment securities | 351,781 | 687,032 |
Pre-tax unrealized gain of trading securities | (37,289) | |
Other investment securities | ||
Marketable investment securities, restricted cash and other investment securities | ||
Other investment securities - equity method | $ 115,429 | $ 113,460 |
Marketable Investment Securit36
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2018 | Feb. 28, 2017 | |
Commercial paper | Maximum | ||
Other investment securities: | ||
Debt term of Maturity | 365 days | |
Corporate securities | Maximum | ||
Other investment securities: | ||
Debt term of Maturity | 18 months | |
NagraStar | ||
Other investment securities: | ||
Ownership interest (as a percent) | 50.00% |
Marketable Investment Securit37
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Unrealized Gain (Losses) On Marketable Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Components of our available-for-sale investments | ||
Debt securities | $ 179,867 | $ 479,812 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 58 | 80 |
Unrealized Losses | (151) | (276) |
Unrealized Gains Losses, Net | (93) | (196) |
Accumulated net unrealized gains (losses) | ||
Accumulated net unrealized loss, before tax, in accumulated other comprehensive income (loss) | (1,000) | (1,000) |
Accumulated net unrealized loss, net of tax, in accumulated other comprehensive income (loss) | (1,000) | (1,000) |
Contractual maturities of restricted and non-restricted marketable investment securities | ||
Debt securities with contractual maturities within one year | 175,000 | |
Debt securities with contractual maturities extending longer than one year through and including five years | 5,000 | |
US Treasury and agency securities | ||
Components of our available-for-sale investments | ||
Debt securities | 71,866 | 84,286 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 22 | |
Unrealized Losses | (113) | (141) |
Unrealized Gains Losses, Net | (113) | (119) |
Commercial paper | ||
Components of our available-for-sale investments | ||
Debt securities | 107,962 | |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Losses | (10) | |
Unrealized Gains Losses, Net | (10) | |
Corporate securities | ||
Components of our available-for-sale investments | ||
Debt securities | 105,074 | 282,256 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Losses | (37) | (124) |
Unrealized Gains Losses, Net | (37) | (124) |
Other | ||
Components of our available-for-sale investments | ||
Debt securities | 2,927 | 5,308 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 58 | 58 |
Unrealized Losses | (1) | (1) |
Unrealized Gains Losses, Net | $ 57 | $ 57 |
Marketable Investment Securit38
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Changes in Estimated Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair value of marketable investment securities in a loss position | ||
Total | $ 135,598 | $ 444,485 |
Unrealized loss on marketable investment securities in a loss position | ||
Total | (151) | (276) |
Debt securities | ||
Fair value of marketable investment securities in a loss position | ||
Less than 12 Months | 111,505 | 410,145 |
12 Months or More | 24,093 | 34,340 |
Unrealized loss on marketable investment securities in a loss position | ||
Less than 12 Months | (68) | (156) |
12 Months or More | $ (83) | $ (120) |
Marketable Investment Securit39
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Investments Measured at Fair Value On A Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair value of marketable securities | ||
Debt securities | $ 179,867 | $ 479,812 |
Equity security | 56,078 | 93,367 |
US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 71,866 | 84,286 |
Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 107,962 | |
Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 105,074 | 282,256 |
Other | ||
Fair value of marketable securities | ||
Debt securities | 2,927 | 5,308 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 2,012,886 | 1,425,798 |
Equity security | 56,078 | 93,367 |
Total | 235,945 | 573,179 |
Fair value measurements on recurring basis | US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 71,866 | 84,286 |
Fair value measurements on recurring basis | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 107,962 | |
Fair value measurements on recurring basis | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 105,074 | 282,256 |
Fair value measurements on recurring basis | Other | ||
Fair value of marketable securities | ||
Debt securities | 2,927 | 5,308 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 1,226,608 | 655 |
Equity security | 56,078 | 93,367 |
Total | 127,944 | 177,653 |
Fair value measurements on recurring basis | Level 1 | US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 71,866 | 84,286 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 786,278 | 1,425,143 |
Total | 107,806 | 395,331 |
Fair value measurements on recurring basis | Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 107,962 | |
Fair value measurements on recurring basis | Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 105,074 | 282,256 |
Fair value measurements on recurring basis | Level 2 | Other | ||
Fair value of marketable securities | ||
Debt securities | 2,732 | 5,113 |
Fair value measurements on recurring basis | Level 3 | ||
Fair value of marketable securities | ||
Total | 195 | 195 |
Fair value measurements on recurring basis | Level 3 | Other | ||
Fair value of marketable securities | ||
Debt securities | $ 195 | $ 195 |
Marketable Investment Securit40
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Changes in Level 3 Instruments (Details) | Mar. 31, 2018USD ($) |
Fair values transfers between Level 1 and Level 2 | |
Fair value assets transfer from level 1 to level 2 | $ 0 |
Fair value liabilities transfer from level 1 to level 2 | 0 |
Fair value assets transfer from level 2 to level 1 | 0 |
Fair value liabilities transfer from level 2 to level 1 | $ 0 |
Marketable Investment Securit41
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Other Income Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income (Expense) | ||
Marketable investment securities - gains (losses) on sales/exchanges | $ 567 | $ 2,272 |
Marketable investment securities - unrealized gains (losses) on trading securities | (37,289) | |
Equity in earnings | 1,446 | (726) |
Other | 468 | 3,199 |
Total | $ (34,808) | $ 4,745 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory | ||
Finished goods | $ 281,288 | $ 248,233 |
Work-in-process and service repairs | 51,705 | 54,455 |
Raw materials | 14,753 | 18,320 |
Total inventory | $ 347,746 | $ 321,008 |
Property and Equipment and In43
Property and Equipment and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property and equipment | ||
Total property and equipment | $ 5,813,179 | $ 5,856,745 |
Accumulated depreciation | (3,706,248) | (3,673,084) |
Property and equipment, net | 2,106,931 | 2,183,661 |
Equipment leased to customers | ||
Property and equipment | ||
Total property and equipment | $ 2,250,393 | 2,323,100 |
Equipment leased to customers | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Equipment leased to customers | Maximum | ||
Property and equipment | ||
Depreciable Life | 5 years | |
EchoStar XV | ||
Property and equipment | ||
Total property and equipment | $ 277,658 | 277,658 |
Depreciable Life | 15 years | |
EchoStar XVIII | ||
Property and equipment | ||
Total property and equipment | $ 411,255 | 411,255 |
Depreciable Life | 15 years | |
D1 | ||
Property and equipment | ||
Total property and equipment | $ 55,000 | 55,000 |
T1 | ||
Property and equipment | ||
Total property and equipment | $ 100,000 | 100,000 |
Depreciable Life | 14 years 3 months | |
Satellites acquired under capital lease agreements | ||
Property and equipment | ||
Total property and equipment | $ 499,819 | 499,819 |
Satellites acquired under capital lease agreements | Minimum | ||
Property and equipment | ||
Depreciable Life | 10 years | |
Satellites acquired under capital lease agreements | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Furniture, fixtures, equipment and other | ||
Property and equipment | ||
Total property and equipment | $ 1,804,873 | 1,779,109 |
Furniture, fixtures, equipment and other | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Furniture, fixtures, equipment and other | Maximum | ||
Property and equipment | ||
Depreciable Life | 10 years | |
Buildings and improvements | ||
Property and equipment | ||
Total property and equipment | $ 294,522 | 293,571 |
Buildings and improvements | Minimum | ||
Property and equipment | ||
Depreciable Life | 3 years | |
Buildings and improvements | Maximum | ||
Property and equipment | ||
Depreciable Life | 40 years | |
Land | ||
Property and equipment | ||
Total property and equipment | $ 14,057 | 14,057 |
Construction in progress | ||
Property and equipment | ||
Total property and equipment | $ 105,602 | $ 103,176 |
Property and Equipment and In44
Property and Equipment and Intangible Assets - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Depreciation and amortization expense | ||
Depreciation and amortization expense | $ 192,972 | $ 204,630 |
Equipment leased to customers | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 110,521 | 136,134 |
Satellites | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 25,086 | 29,012 |
Buildings, furniture, fixtures, equipment and other | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | $ 57,365 | $ 39,484 |
Property and Equipment and In45
Property and Equipment and Intangible Assets - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018item | |
EchoStar XV | |
Property and equipment | |
Estimated Useful Life | 15 years |
EchoStar XVI | |
Property and equipment | |
Term of renewal option | 5 years |
EchoStar XVIII | |
Property and equipment | |
Estimated Useful Life | 15 years |
EchoStar XVIII, including capitalized interest | |
Property and equipment | |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 12 |
Owned Satellites | 2 |
Number of satellites utilized under operating lease | 8 |
Number of satellites utilized under capital lease | 2 |
Long-Term Debt - Fair Value of
Long-Term Debt - Fair Value of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument | ||
Carrying Value | $ 17,013,566 | $ 17,070,789 |
Fair Value | 16,347,251 | 17,568,043 |
Unamortized debt discount on the Convertible Notes | (903,094) | (925,360) |
Unamortized deferred financing costs and debt | (44,324) | (46,782) |
Capital Lease obligations | 94,830 | 104,318 |
Total long-term debt and capital lease obligations (including current portion) | 16,160,978 | 16,202,965 |
Principal balance reclassified to Current portion of long-term debt and capital lease obligations | 969,000 | |
4 1/4% Senior Notes due 2018 | ||
Debt Instrument | ||
Carrying Value | 969,388 | 1,025,861 |
Fair Value | $ 969,340 | $ 1,031,596 |
Interest rate (as a percent) | 4.25% | 4.25% |
Debt repurchased | $ 56,000 | |
7 7/8% Senior Notes due 2019 | ||
Debt Instrument | ||
Carrying Value | 1,400,000 | $ 1,400,000 |
Fair Value | $ 1,472,730 | $ 1,501,206 |
Interest rate (as a percent) | 7.875% | 7.875% |
5 1/8% Senior Notes due 2020 | ||
Debt Instrument | ||
Carrying Value | $ 1,100,000 | $ 1,100,000 |
Fair Value | $ 1,103,828 | $ 1,127,588 |
Interest rate (as a percent) | 5.125% | 5.125% |
6 3/4% Senior Notes due 2021 | ||
Debt Instrument | ||
Carrying Value | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 2,022,740 | $ 2,120,480 |
Interest rate (as a percent) | 6.75% | 6.75% |
5 7/8% Senior Notes due 2022 | ||
Debt Instrument | ||
Carrying Value | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 1,920,740 | $ 2,014,140 |
Interest rate (as a percent) | 5.875% | 5.875% |
5% Senior Notes due 2023 | ||
Debt Instrument | ||
Carrying Value | $ 1,500,000 | $ 1,500,000 |
Fair Value | $ 1,359,255 | $ 1,432,335 |
Interest rate (as a percent) | 5.00% | 5.00% |
5 7/8% Senior Notes due 2024 | ||
Debt Instrument | ||
Carrying Value | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 1,794,980 | $ 1,952,220 |
Interest rate (as a percent) | 5.875% | 5.875% |
2 3/8% Convertible Notes due 2024 | ||
Debt Instrument | ||
Carrying Value | $ 1,000,000 | $ 1,000,000 |
Fair Value | $ 885,570 | 962,860 |
Interest rate (as a percent) | 2.375% | |
7 3/4% Senior Notes due 2026 | ||
Debt Instrument | ||
Carrying Value | $ 2,000,000 | 2,000,000 |
Fair Value | $ 1,894,280 | $ 2,118,400 |
Interest rate (as a percent) | 7.75% | 7.75% |
3 3/8% Convertible Notes due 2026 | ||
Debt Instrument | ||
Carrying Value | $ 3,000,000 | $ 3,000,000 |
Fair Value | $ 2,879,610 | $ 3,262,290 |
Interest rate (as a percent) | 3.375% | 3.375% |
Other notes payable | ||
Debt Instrument | ||
Carrying Value | $ 44,178 | $ 44,928 |
Fair Value | $ 44,178 | $ 44,928 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | May 11, 2017USD ($) | Sep. 23, 2016 | Jul. 01, 2016USD ($) | Aug. 18, 2015USD ($) | Apr. 29, 2014USD ($)segment | Oct. 29, 2013 | Mar. 09, 2012 | Mar. 09, 2012USD ($) | Jan. 31, 2017 | Mar. 31, 2018USD ($)item | Dec. 31, 2008USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Apr. 13, 2017USD ($)item |
Spectrum Investments | ||||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | $ 21,000 | ||||||||||||||
Number of geographical license areas | item | 214 | |||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Noncontrolling Interest in Variable Interest Entity | $ 10,000 | 10,000 | ||||||||||||||
MVDDS Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number of geographical license areas | item | 82 | |||||||||||||||
LMDS Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number Of Markets | item | 4 | |||||||||||||||
Wireless | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | 11 | ||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Noncontrolling Interest in Variable Interest Entity | $ 11,000 | 11,000 | ||||||||||||||
H Block Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 1,672 | |||||||||||||||
Number of wireless spectrum licenses | segment | 176 | |||||||||||||||
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement | 2 years | |||||||||||||||
H Block Licenses | Minimum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interim Build-out Requirement (as a percent) | 40.00% | |||||||||||||||
Final Build-out Requirement (as a percent) | 75.00% | |||||||||||||||
700 MHz Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 712 | |||||||||||||||
Modified 700 MHz Final Build-out Requirement (as a percent) | 70.00% | |||||||||||||||
600 MHz Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number of wireless spectrum licenses | item | 486 | |||||||||||||||
Build-out requirement accelerated period | 2 years | |||||||||||||||
Aggregate Bid Price | $ 6,211 | |||||||||||||||
Licenses Renewal Period | 39 months | |||||||||||||||
600 MHz Licenses | Maximum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Percent of coverage on available licensed geographic areas | 75.00% | |||||||||||||||
600 MHz Licenses | Minimum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Percent of coverage on available licensed geographic areas | 40.00% | |||||||||||||||
DBSD North America and TerreStar Transactions | Wireless | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Purchase price | $ 2,860 | |||||||||||||||
AWS-4 Final Build-out Requirement (as a percent) | 70.00% | |||||||||||||||
DBSD North America and TerreStar Transactions | AWS-4 Satellites | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Ownership percentage | 100.00% | |||||||||||||||
Northstar Spectrum And SNR Holdco | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Noncontrolling Interest in Variable Interest Entity | $ 10 | $ 10 | $ 10,000 | |||||||||||||
Percentage of bidding credit | 25.00% | |||||||||||||||
Northstar Spectrum And SNR Holdco | American III | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number of wireless spectrum licenses | item | 244 | 244 | ||||||||||||||
Northstar Spectrum And SNR Holdco | AWS-3 Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interim Build-out Requirement (as a percent) | 40.00% | |||||||||||||||
Final Build-out Requirement (as a percent) | 75.00% | |||||||||||||||
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement | 2 years | |||||||||||||||
Northstar Spectrum And SNR Holdco | Prior Arrangement [Member] | SNR Licenses | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Number of licenses returned | item | 113 | |||||||||||||||
Northstar Spectrum And SNR Holdco | Northstar Operative Agreement [Member] | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Debt outstanding amount | $ 6,870 | $ 6,870 | ||||||||||||||
Northstar Wireless or Northstar Spectrum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interim Payment | $ 334 | |||||||||||||||
Interim payment percentage | 15.00% | |||||||||||||||
Re-Auction payment | $ 1,892 | |||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Percentage of bidding credit | 15.00% | |||||||||||||||
Bidding credit value | $ 1,961 | |||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Manager LLC | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Controlling interest owned by other companies | 15.00% | |||||||||||||||
Equity contribution | $ 133 | |||||||||||||||
Northstar Wireless or Northstar Spectrum | American II | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Ownership percentage | 85.00% | |||||||||||||||
Loan made | $ 69 | |||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Equity contribution | $ 7,621 | |||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number of wireless spectrum licenses | item | 261 | 261 | ||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Gross winning bids | $ 5,619 | |||||||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Non-payment gross winning bids | 2,226 | $ 2,226 | ||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Gross winning bids | $ 7,845 | |||||||||||||||
Percentage of bidding credit | 25.00% | 25.00% | ||||||||||||||
Net winning bid | $ 5,884 | |||||||||||||||
Number of licenses returned | item | 84 | |||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement [Member] | Preferred Class A [Member] | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number shares issued in conversion | item | 6,870,493 | |||||||||||||||
Preferred stock quarterly distribution (as a percent) | 12.00% | |||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement [Member] | Maximum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interest rate (as a percent) | 12.00% | 12.00% | ||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement [Member] | Minimum | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interest rate (as a percent) | 6.00% | 6.00% | ||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement [Member] | Northstar Manager LLC | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Principal amount of debt | $ 500 | $ 500 | ||||||||||||||
SNR Wireless or SNR Wireless Holdco | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Interim Payment | 182 | |||||||||||||||
Re-Auction payment | 1,029 | |||||||||||||||
Debt outstanding amount | 5,065 | 5,065 | ||||||||||||||
Principal amount of debt | $ 500 | 500 | ||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Bidding credit value | $ 1,370 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | Preferred Class A [Member] | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Number shares issued in conversion | item | 5,065,415 | |||||||||||||||
Preferred stock quarterly distribution (as a percent) | 12.00% | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Wireless Management LLC | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Controlling interest owned by other companies | 15.00% | |||||||||||||||
Equity contribution | $ 93 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | American III | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Ownership percentage | 85.00% | |||||||||||||||
Loan made | $ 344 | |||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Equity contribution | 5,590 | |||||||||||||||
Gross winning bids | 4,271 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | AWS 3 Auction | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Gross winning bids | 5,482 | |||||||||||||||
Net winning bid | 4,112 | |||||||||||||||
Bid withdrawal payment | $ 8 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | AWS-3 Licenses | SNR Wireless Management LLC | ||||||||||||||||
Commitments relating to AWS-3 Auction | ||||||||||||||||
Percentage of bidding credit | 15.00% | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Licenses | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Non-payment gross winning bids | $ 1,211 | $ 1,211 | ||||||||||||||
Additional Bid Withdrawal Payment | $ 3 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Operative Agreement [Member] | Preferred Class A [Member] | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 6.00% | |||||||||||||||
FCC Wireless Bureau | Auction 1000 | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 1,500 | |||||||||||||||
Payment of remaining balance of winning bid | $ 4,711 | |||||||||||||||
SNR Credit Agreement [Member] | SNR Wireless or SNR Wireless Holdco | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Loan made | $ 500 | |||||||||||||||
Northstar Credit Agreement | Northstar Wireless or Northstar Spectrum | American II | ||||||||||||||||
Spectrum Investments | ||||||||||||||||
Loan made | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Part 2 (Details) | Apr. 05, 2018USD ($) | May 22, 2017$ / item | Jan. 19, 2017USD ($)item | Sep. 23, 2016USD ($) | Aug. 18, 2015USD ($) | Dec. 23, 2013USD ($) | Apr. 29, 2011USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Jun. 05, 2017USD ($) |
Vermont National Telephone Company [Member] | ||||||||||||
Loss contingency terms | ||||||||||||
Recovery amount | $ 10,000,000,000 | |||||||||||
Satellite transponder guarantees | ||||||||||||
Loss contingencies | ||||||||||||
Guarantees for payments | $ 111,000,000 | |||||||||||
Litigation accrual | $ 0 | |||||||||||
Northstar Spectrum And SNR Holdco | ||||||||||||
Loss contingency terms | ||||||||||||
Percentage Of Bidding Credit | 25.00% | |||||||||||
Northstar Spectrum And SNR Holdco | AWS-3 Licenses | ||||||||||||
Loss contingencies | ||||||||||||
Interim Build-out Requirement (as a percent) | 40.00% | |||||||||||
Final Build-out Requirement (as a percent) | 75.00% | |||||||||||
Accelerated period to meet Final Build-Out Requirement on failure to meet Interim Build-Out Requirement | 2 years | |||||||||||
Northstar Wireless or Northstar Spectrum | ||||||||||||
Loss contingency terms | ||||||||||||
Percentage Of Bidding Credit | 15.00% | |||||||||||
Bidding Credit | $ 1,961,000,000 | |||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | ||||||||||||
Loss contingency terms | ||||||||||||
Percentage Of Bidding Credit | 25.00% | 25.00% | ||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | Vermont National Telephone Company [Member] | ||||||||||||
Loss contingency terms | ||||||||||||
Bidding Credit | $ 3,300,000,000 | |||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | Minimum | Vermont National Telephone Company [Member] | ||||||||||||
Loss contingency terms | ||||||||||||
Claim amount | 5,500 | |||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | Maximum | Vermont National Telephone Company [Member] | ||||||||||||
Loss contingency terms | ||||||||||||
Claim amount | $ 11,000 | |||||||||||
SNR Wireless or SNR Wireless Holdco | ||||||||||||
Loss contingency terms | ||||||||||||
Bidding Credit | $ 1,370,000,000 | |||||||||||
Lightsquared Harbinger Capital Partners LLC | ||||||||||||
Loss contingencies | ||||||||||||
Business days allowed to terminate existing agreements | 3 days | |||||||||||
Telemarketing Litigation | ||||||||||||
Loss contingencies | ||||||||||||
Period of injunctive relief sought from placing any outbound telemarketing calls to market or promote its goods or services | 5 years | |||||||||||
Telemarketing Litigation | OHIO | ||||||||||||
Loss contingency terms | ||||||||||||
Claim amount | $ 10,000,000 | |||||||||||
Telemarketing Litigation | CALIFORNIA | ||||||||||||
Loss contingencies | ||||||||||||
Claim amount from state plaintiff | $ 100,000,000 | |||||||||||
Do Not Call Litigation | ||||||||||||
Loss contingencies | ||||||||||||
Period of injunctive relief sought from placing any outbound telemarketing calls to market or promote its goods or services | 5 years | |||||||||||
Number Of Telemarketing Calls | item | 51,119 | |||||||||||
Litigation Per Call Damages | $ 400 | |||||||||||
Do Not Call Litigation | Maximum | Illinois And North Carolina [Member] | ||||||||||||
Loss contingencies | ||||||||||||
Claim amount from state plaintiff | $ 1,000,000,000 | |||||||||||
Krakauer Action | ||||||||||||
Loss contingencies | ||||||||||||
Litigation Expense | $ 41,000,000 | $ 20,000,000 | ||||||||||
Third party Number Of Calls Made In Case Trebled Damages Per Call | $ / item | 1,200 | |||||||||||
Settlement amount awarded to other party | $ 61,000,000 | |||||||||||
Krakauer Action | Other Accrued Expense | ||||||||||||
Loss contingencies | ||||||||||||
Litigation accrual | 61,000,000 | |||||||||||
TiVo vs Dish Network and EchoStar Corporation | DISH Network | ||||||||||||
Loss contingencies | ||||||||||||
Litigation accrual | $ 200,000,000 | |||||||||||
Settlement amount awarded to other party | $ 500,000,000 | |||||||||||
DISH Network L.L.C. | Telemarketing Litigation | ||||||||||||
Loss contingencies | ||||||||||||
Claim amount from state plaintiff | 23,500,000,000 | |||||||||||
Damages awarded to state and federal plaintiff | $ 280,000,000 | |||||||||||
Litigation Expense | $ 255,000,000 | $ 25,000,000 | ||||||||||
Loss contingency terms | ||||||||||||
Claim amount | $ 270,000,000 | |||||||||||
DISH Network L.L.C. | Telemarketing Litigation | Other Accrued Expense | ||||||||||||
Loss contingencies | ||||||||||||
Litigation accrual | 280,000,000 | |||||||||||
DISH Network L.L.C. | Telemarketing Litigation | Maximum | ||||||||||||
Loss contingencies | ||||||||||||
Claim amount from federal plaintiff | $ 900,000,000 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment information | |||
Number of primary operating business units | segment | 2 | ||
Total assets | $ 30,154,933 | $ 29,773,766 | |
Revenues | 3,458,487 | $ 3,680,361 | |
Operating income (loss) | 529,506 | 607,320 | |
Pay-TV Video And Related Revenue | |||
Segment information | |||
Revenues | 3,347,597 | 3,536,462 | |
Broadband Revenue | |||
Segment information | |||
Revenues | 75,107 | 107,624 | |
Equipment Sales And Other Revenue | |||
Segment information | |||
Revenues | 35,783 | 36,275 | |
United States | |||
Segment information | |||
Revenues | 3,449,016 | 3,670,764 | |
Canada And Mexico | |||
Segment information | |||
Revenues | 9,471 | 9,597 | |
Pay-TV | Operating segment | |||
Segment information | |||
Total assets | 28,673,503 | 28,353,581 | |
Revenues | 3,458,487 | 3,680,361 | |
Operating income (loss) | 539,302 | 621,665 | |
Wireless | Operating segment | |||
Segment information | |||
Total assets | 23,638,763 | 23,377,088 | |
Operating income (loss) | (9,796) | $ (14,345) | |
All Other and Eliminations | Other and Eliminations | |||
Segment information | |||
Total assets | $ (22,157,333) | $ (21,956,903) |
Contract Balances - Valuation A
Contract Balances - Valuation And Qualifying Accounts Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Contract Balances | |
Allowance for Doubtful Accounts Receivable, Beginning Balance | $ 15,511 |
Charged to Costs and Expenses | 21,561 |
Deductions | (24,333) |
Allowance for Doubtful Accounts Receivable, Ending Balance | $ 12,739 |
Contract Balances - Deferred Re
Contract Balances - Deferred Revenues (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Contract Balances | |
Balance at Beginning of Period | $ 699,597 |
Recognition of unearned revenue | (1,861,695) |
Deferral of revenue | 1,896,745 |
Balance at End of Period | $ 734,647 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Aug. 19, 2016 | Apr. 29, 2011USD ($)item | Mar. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2013 | Dec. 21, 2012 | May 31, 2012 | Jan. 31, 2012 | Dec. 31, 2011USD ($) | Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Mar. 31, 2013item | Dec. 31, 2017USD ($) | Dec. 31, 2009item | Dec. 31, 2008item |
Related Party Transactions | ||||||||||||||||
Trade accounts receivable | $ 601,673 | $ 653,948 | ||||||||||||||
Trade accounts payable | 331,388 | 393,305 | ||||||||||||||
Equipment sales and other revenue | 35,783 | $ 36,275 | ||||||||||||||
Subscriber-related expenses | 2,184,951 | 2,243,187 | ||||||||||||||
Satellite and transmission expenses | 153,644 | 176,182 | ||||||||||||||
General and Administrative Expense | 169,777 | 131,035 | ||||||||||||||
Noncontrolling interests | $ 441 | 492 | ||||||||||||||
Maximum | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Capital contribution recorded in additional paid-in-capital for tax credits related to tax-sharing agreement | 1,000 | |||||||||||||||
Professional Services Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Automatic Renewal Period | 1 year | |||||||||||||||
Hughes Broadband Distribution Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of renewal options | item | 4 | |||||||||||||||
Term of renewal option | 3 years | |||||||||||||||
Automatic renewal period | 1 year | |||||||||||||||
Hughes Broadband Distribution Agreement | Minimum | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Notice period for termination of agreement | 180 days | |||||||||||||||
EchoStar | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Trade accounts receivable | $ 4,000 | 2,000 | ||||||||||||||
Trade accounts payable | 60,000 | $ 42,000 | ||||||||||||||
Equipment sales and other revenue | 4,000 | 1,000 | ||||||||||||||
Subscriber-related expenses | 13,000 | 19,000 | ||||||||||||||
Satellite and transmission expenses | 85,000 | 89,000 | ||||||||||||||
General and Administrative Expense | $ 5,000 | 3,000 | ||||||||||||||
EchoStar | El Paso Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of consecutive three year renewal options | item | 4 | |||||||||||||||
Term of renewal option | 3 years | |||||||||||||||
EchoStar | 90 Inverness Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of consecutive three year renewal options | item | 4 | |||||||||||||||
Term of renewal option | 3 years | |||||||||||||||
EchoStar | Cheyenne Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of one year renewal options | item | 13 | |||||||||||||||
Term of renewal option | 1 year | |||||||||||||||
EchoStar | Gilbert Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of one year renewal options | item | 13 | |||||||||||||||
Term of renewal option | 1 year | |||||||||||||||
EchoStar | American Fork Occupancy License Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Term of renewal option | 5 years | |||||||||||||||
EchoStar | Collocation And Antenna Space Agreements | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Minimum required notice period for termination of agreement by related party | 180 days | |||||||||||||||
EchoStar | EchoStar XVI | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Term of renewal option | 5 years | |||||||||||||||
Agreement term | 4 years | |||||||||||||||
Extension of initial term | 1 year | |||||||||||||||
Additional term of renewal option | 5 years | |||||||||||||||
EchoStar | Nimiq 5 Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 15 years | |||||||||||||||
Number of DBS transponders available to receive services | item | 32 | |||||||||||||||
EchoStar | DISH Nimiq 5 Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 10 years | |||||||||||||||
Number of DBS transponders currently used | item | 32 | |||||||||||||||
EchoStar | QuetzSat-1 Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 10 years | |||||||||||||||
Number of DBS transponders available to receive services | item | 32 | |||||||||||||||
EchoStar | QuetzSat-1 Transponder Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Number of DBS transponders currently used | item | 24 | |||||||||||||||
Number of transponders subleased | item | 5 | |||||||||||||||
EchoStar | 103 degree orbital location member | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 10 years | |||||||||||||||
Agreement term from commencement of service date | 10 years | |||||||||||||||
EchoStar | 2012 TT&C Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Minimum required notice period for termination by the reporting entity | 12 days | |||||||||||||||
EchoStar | Meridian Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Additional term of renewal option | 1 year | |||||||||||||||
EchoStar | Santa Fe Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Additional term of renewal option | 1 year | |||||||||||||||
EchoStar | 100 Inverness Lease Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Notice period for termination of agreement | 180 days | |||||||||||||||
EchoStar | Professional Services Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 1 year | |||||||||||||||
Minimum notice period for termination of a specific service | 30 days | |||||||||||||||
EchoStar | Professional Services Agreement | Minimum | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Notice period for termination of agreement | 60 days | |||||||||||||||
EchoStar | Patent Cross-License Agreements | Maximum | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Payments to third party | $ 10,000 | |||||||||||||||
Payments to third party by related party under extension option | $ 3,000 | |||||||||||||||
EchoStar | Rovi License Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Agreement term | 10 years | |||||||||||||||
HNS | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Broadband equipment purchased from related parties | $ 10,000 | $ 7,000 | ||||||||||||||
HNS | Hughes Broadband Sales Agency Agreement | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Notice period for termination of agreement | 90 days | |||||||||||||||
Agreement term | 5 years | |||||||||||||||
Automatic Renewal Period | 1 year | |||||||||||||||
DISH Network | TiVo vs Dish Network and EchoStar Corporation | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Initial settlement amount paid | $ 300,000 | |||||||||||||||
Aggregate of six annual installment amounts between 2012 and 2017, net of contribution from related party | $ 200,000 | |||||||||||||||
Litigation settlement number of annual installments | item | 6 | |||||||||||||||
Contribution from related party | $ 10,000 | |||||||||||||||
Percentage of litigation settlement amount to be made by related party | 95.00% |
Related Party Transactions - Pa
Related Party Transactions - Part 2 (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Feb. 28, 2017 | |
NagraStar | ||||
Related Party Transactions | ||||
Ownership interest (as a percent) | 50.00% | |||
Purchases from related party | $ 16,843 | $ 17,779 | ||
Amounts payable to related party | 17,063 | $ 16,685 | ||
Commitments to related party | $ 1,893 | 4,927 | ||
Dish Mexico | ||||
Related Party Transactions | ||||
Ownership interest (as a percent) | 49.00% | |||
Amounts receivable from related party | $ 1,415 | $ 3,027 | ||
Dish Mexico | Digital Set-top Boxes And Related Accessories | ||||
Related Party Transactions | ||||
Revenue from related party | 280 | 871 | ||
Dish Mexico | Uplink Services | ||||
Related Party Transactions | ||||
Revenue from related party | $ 1,034 | $ 1,023 |