Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
Entity Registrant Name | DISH Network CORP | |
Entity Central Index Key | 0001001082 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 230,732,103 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 238,435,208 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 1,576,672 | $ 887,346 |
Marketable investment securities | 816,375 | 1,181,471 |
Trade accounts receivable, net of allowance for doubtful accounts of $18,967 and $16,966, respectively | 581,685 | 639,855 |
Inventory | 309,251 | 290,733 |
Other current assets | 308,234 | 289,800 |
Total current assets | 3,592,217 | 3,289,205 |
Noncurrent Assets: | ||
Restricted cash, cash equivalents and marketable investment securities | 68,063 | 67,597 |
Property and equipment, net | 1,863,167 | 1,928,180 |
FCC authorizations | 24,976,019 | 24,736,961 |
Other investment securities | 161,653 | 118,992 |
Operating lease assets | 725,605 | |
Other noncurrent assets, net | 299,653 | 446,077 |
Total noncurrent assets | 28,094,160 | 27,297,807 |
Total assets | 31,686,377 | 30,587,012 |
Current Liabilities: | ||
Trade accounts payable | 277,367 | 233,753 |
Deferred revenue and other | 646,375 | 655,312 |
Accrued programming | 1,472,854 | 1,474,207 |
Accrued interest | 202,190 | 268,479 |
Other accrued expenses | 1,039,856 | 802,388 |
Current portion of long-term debt and finance lease obligations | 1,316,414 | 1,341,993 |
Total current liabilities | 4,955,056 | 4,776,132 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and capital lease obligations, net of current portion | 13,825,418 | 13,810,784 |
Deferred tax liabilities | 2,529,065 | 2,474,907 |
Operating lease liabilities | 491,842 | |
Long-term deferred revenue and other long-term liabilities | 452,337 | 470,932 |
Total long-term obligations, net of current portion | 17,298,662 | 16,756,623 |
Total liabilities | 22,253,718 | 21,532,755 |
Commitments and Contingencies (Note 10) | ||
Redeemable noncontrolling interests (Note 2) | 481,442 | 460,068 |
Stockholders' Equity (Deficit): | ||
Additional paid-in capital | 3,395,377 | 3,379,093 |
Accumulated other comprehensive income (loss) | (57) | (874) |
Accumulated earnings (deficit) | 5,552,551 | 5,212,790 |
Total DISH Network stockholders' equity (deficit) | 8,952,552 | 8,595,688 |
Noncontrolling interests | (1,335) | (1,499) |
Total stockholders' equity (deficit) | 8,951,217 | 8,594,189 |
Total liabilities and stockholders' equity (deficit) | 31,686,377 | 30,587,012 |
Class A common stock | ||
Stockholders' Equity (Deficit): | ||
Common stock | 2,297 | 2,295 |
Class B common stock | ||
Stockholders' Equity (Deficit): | ||
Common stock | $ 2,384 | $ 2,384 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Allowance for doubtful accounts on trade accounts receivable | $ 18,967 | $ 16,966 |
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 | 229,642,174 | 229,448,857 |
Common stock, shares outstanding | 229,642,174 | 229,448,857 |
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, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Total Revenue | $ 3,187,144 | $ 3,458,487 |
Costs and Expenses (exclusive of depreciation shown separately below - Note 7): | ||
Subscriber-related expenses | 2,005,007 | 2,184,951 |
Satellite and transmission expenses | 139,501 | 153,644 |
Cost of sales - equipment and other | 40,384 | 31,626 |
Subscriber acquisition costs: | ||
Cost of sales - subscriber promotion subsidies | 6,517 | 15,930 |
Other subscriber acquisition costs | 80,475 | 77,072 |
Subscriber acquisition advertising | 106,907 | 103,009 |
Total subscriber acquisition costs | 193,899 | 196,011 |
General and administrative expenses | 198,914 | 169,777 |
Depreciation and amortization (Note 7) | 153,139 | 192,972 |
Total costs and expenses | 2,730,844 | 2,928,981 |
Operating income (loss) | 456,300 | 529,506 |
Other Income (Expense): | ||
Interest income | 15,167 | 9,317 |
Interest expense, net of amounts capitalized | (5,921) | (2,957) |
Other, net | 9,088 | (34,808) |
Total other income (expense) | 18,334 | (28,448) |
Income (loss) before income taxes | 474,634 | 501,058 |
Income tax (provision) benefit, net | (113,335) | (115,737) |
Net income (loss) | 361,299 | 385,321 |
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 21,538 | 17,761 |
Net income (loss) attributable to DISH Network | $ 339,761 | $ 367,560 |
Weighted-average common shares outstanding - Class A and B common stock: | ||
Basic (in shares) | 467,953 | 466,642 |
Diluted (in shares) | 526,219 | 525,309 |
Earnings per share - Class A and B common stock: | ||
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.73 | $ 0.79 |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.65 | $ 0.70 |
Comprehensive Income (Loss): | ||
Net income (loss) | $ 361,299 | $ 385,321 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 47 | 400 |
Unrealized holding gains (losses) on available-for-sale securities | 1,006 | 105 |
Recognition of previously unrealized (gains) losses on available-for-sale securities included in net income (loss) | (2) | |
Deferred income tax (expense) benefit, net | (236) | (26) |
Total other comprehensive income (loss), net of tax | 817 | 477 |
Comprehensive income (loss) | 362,116 | 385,798 |
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of tax | 21,538 | 17,761 |
Comprehensive income (loss) attributable to DISH Network | 340,578 | 368,037 |
Subscriber-related revenue | ||
Revenue: | ||
Total Revenue | 3,147,770 | 3,422,704 |
Equipment sales and other revenue | ||
Revenue: | ||
Total Revenue | $ 39,374 | $ 35,783 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Class A and B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Deficit) | Noncontrolling Interest | Redeemable Noncontrolling Interest | Total |
Balance at Dec. 31, 2017 | $ 4,664 | $ 3,296,488 | $ 882 | $ 3,635,380 | $ 492 | $ 383,390 | $ 6,937,906 |
Issuance of Class A common stock: | |||||||
Exercise of stock awards | 2 | 3,535 | 3,537 | ||||
Employee Stock Purchase Plan | 2 | 4,452 | 4,454 | ||||
Non-cash, stock-based compensation | 9,060 | 9,060 | |||||
Change in unrealized holding gains (losses) on available-for-sale securities, net | 103 | 103 | |||||
Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities | (26) | (26) | |||||
Foreign currency translation | 400 | 400 | |||||
ASU 2014-09 cumulative catch-up adjustment | 2,320 | 2,320 | |||||
Net income (loss) attributable to noncontrolling interests | (51) | 17,812 | (51) | ||||
Net income (loss) attributable to DISH Network | 367,560 | 367,560 | |||||
Balance at Mar. 31, 2018 | 4,668 | 3,313,535 | 1,359 | 4,005,260 | 441 | 401,202 | 7,325,263 |
Balance at Dec. 31, 2018 | 4,679 | 3,379,093 | (874) | 5,212,790 | (1,499) | 460,068 | 8,594,189 |
Issuance of Class A common stock: | |||||||
Exercise of stock awards | 227 | 227 | |||||
Employee Stock Purchase Plan | 2 | 4,520 | 4,522 | ||||
Non-cash, stock-based compensation | 11,537 | 11,537 | |||||
Change in unrealized holding gains (losses) on available-for-sale securities, net | 1,006 | 1,006 | |||||
Deferred income tax (expense) benefit attributable to unrealized gains (losses) on available-for-sale securities | (236) | (236) | |||||
Foreign currency translation | 47 | 47 | |||||
Net income (loss) attributable to noncontrolling interests | 164 | 21,374 | 164 | ||||
Net income (loss) attributable to DISH Network | 339,761 | 339,761 | |||||
Balance at Mar. 31, 2019 | $ 4,681 | $ 3,395,377 | $ (57) | $ 5,552,551 | $ (1,335) | $ 481,442 | $ 8,951,217 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 361,299 | $ 385,321 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 153,139 | 192,972 |
Realized and unrealized losses (gains) on investments | (2,617) | 36,722 |
Non-cash, stock-based compensation | 11,537 | 9,060 |
Deferred tax expense (benefit) | 53,921 | 92,064 |
Other, net | (4,469) | (32,426) |
Changes in current assets and current liabilities, net | 160,119 | 67,838 |
Net cash flows from operating activities | 732,929 | 751,551 |
Cash Flows From Investing Activities: | ||
Purchases of marketable investment securities | (145,162) | (9,253) |
Sales and maturities of marketable investment securities | 513,033 | 313,567 |
Purchases of property and equipment | (120,859) | (70,521) |
Capitalized interest related to FCC authorizations (Note 2) | (289,775) | (294,003) |
Other, net | 2,495 | 3,613 |
Net cash flows from investing activities | (40,268) | (56,597) |
Cash Flows From Financing Activities: | ||
Redemption and repurchases of senior notes | (22,365) | (56,473) |
Repayment of long-term debt and finance lease obligations | (6,632) | (10,458) |
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan | 4,750 | 7,991 |
Other, net | 29,000 | (159) |
Net cash flows from financing activities | 4,753 | (59,099) |
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | 697,414 | 635,855 |
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period (Note 5) | 887,924 | 1,479,901 |
Cash, cash equivalents, restricted cash and cash equivalents, end of period (Note 5) | $ 1,585,338 | $ 2,115,756 |
Organization and Business Activ
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2019 | |
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, 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, Smart Home service and call center operations, and certain other assets utilized in our operations (“DISH TV”). 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 13 for further information. The Sling branded pay-TV services consist of, among other things, multichannel, live-linear streaming OTT Internet-based domestic, international and Latino video programming services (“Sling TV”). As of March 31, 2019, we had 12.063 million Pay-TV subscribers in the United States, including 9.639 million DISH TV subscribers and 2.424 million Sling TV subscribers. In addition, we 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 the first quarter 2018, we have transitioned our broadband business focus from wholesale to authorized representative arrangements costs for these activations. 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, as well as certain renewal requirements. 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”), which is the first phase of our network deployment (“First Phase”). We expect to complete the First Phase by March 2020, with subsequent phases to be completed thereafter. As of March 31, 2019, we had entered into vendor contracts with multiple parties for, among other things, base stations, chipsets, modules, tower leases, the core network, Radio Frequency (“RF”) design, and deployment services for the First Phase. Among other things, initial RF design in connection with the First Phase is now complete, we have secured certain tower sites, and we are in the process of identifying and securing additional tower sites. The core network has been installed and commissioned. We installed the first base stations on sites in 2018, and plan to continue deployment until complete. 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. 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. See Note 10 for further information. DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3 Wireless Spectrum Licenses During 2015, 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 initially made over $10 billion in certain non-controlling investments in Northstar Spectrum, LLC (“Northstar Spectrum”), the parent company of Northstar Wireless, L.L.C. (“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. 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, as well as certain renewal 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 Northstar Re-Auction Payment and 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 10 for further information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018. 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. 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. The Northstar Operative Agreements, as amended, provide for, among other things, that after the fifth and sixth anniversaries of the grant of the AWS-3 Licenses to Northstar Wireless (and in certain circumstances, prior to the fifth 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” 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 Northstar Spectrum attributable to Northstar Manager 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 10 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. The SNR Operative Agreements, as amended, provide for, among other things, that after the fifth and sixth anniversaries of the grant of the AWS-3 Licenses to SNR Wireless (and in certain circumstances, prior to the fifth 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 10 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, relative standalone selling prices of performance obligations, 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 Recognition and Measurement of Financial Assets and Financial Liabilities (“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 on our 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, our wireless spectrum licenses, build-out costs associated with our network deployment and satellites. 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, 2019 and December 31, 2018, 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 finance 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 9 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 equipment rental fees and other hardware related fees, including DVRs and fees from subscribers with multiple receivers; advertising services; fees earned from our Smart Home service operations; broadband services; warranty services; and sales of digital receivers and related equipment to third-party pay-TV providers. See Note 11 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 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 are 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 Smart 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 Revenue from Contracts with Customers (“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 12 for further information, including balance and activity detail about our allowance for doubtful accounts and deferred revenue related to contracts with subscribers. 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, 2019 and 2018, we capitalized $37 million and $41 million, respectively, under these programs. The amortization expense related to these programs was $14 million and $3 million, respectively, for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and December 31, 2018, we had a total of $192 million and $169 million capitalized on our Condensed Consolidated Balance Sheets. These amounts are capitalized in “Other current 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 and Comprehensive Income (Loss). Leases We enter into operating and finance leases for, among other things, satellites, office space, data centers, warehouses and distribution centers, vehicles used for installation and Smart Home Services, wireless towers and other equipment. Our leases have remaining lease terms from one to 12 years, some of which include renewal options, and some of which include options to terminate the leases within one year. We determine if an arrangement is a lease and classify that lease as either an operating or finance lease at inception. Operating leases are included in “Operating lease assets,” “Other accrued expenses” and “Operating lease liabilities” on our Condensed Consolidated Balance Sheets. Finance leases are included in “Property and equipment, net,” “Current portion of long-term debt and finance lease obligations” and “Long-term debt and finance lease obligations, net of current portion” on our Condensed Consolidated Balance Sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 8 for further information on our lease expenses. Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent the present value of our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes the impact of prepaid or deferred lease payments. The length of our lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We lease certain assets from EchoStar, including, among other things, satellites, office space and data centers. See Note 13 for further information on our Related Party Transactions with EchoStar. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Our variable lease payments are immaterial and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For equipment leased to new and existing DISH TV subscribers we made an accounting policy election to combine the equipment with our programming services as a single performance obligation in accordance with the revenue recognition guidance as the programming services are the predominant component. Impact of Adoption of ASU 2016-02 In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 Leases (“ASU 2016-02”) and has modified the standard thereafter. We adopted ASU 2016-02, as modified, on January 1, 2019 using the modified retrospective method. Under the modified retrospective method, we applied the new guidance to all leases that commenced before and were existing as of January 1, 2019. The adoption of ASU 2016-02 had no impact on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and cash flows from operating, investing and financing activities on our Condensed Consolidated Statements of Cash Flows. The adoption of ASU 2016-02 impacted our March 31, 2019 Condensed Consolidated Balance Sheet, including the reclassification of our deferred rent liabilities to an operating lease asset, as follows: Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2016-02 DISH Network (as currently reported) (In thousands) As of March 31, 2019 Operating lease assets $ — $ 725,605 $ 725,605 Total assets $ 30,960,772 $ 725,605 $ 31,686,377 Other accrued expenses $ 802,323 $ 237,533 $ 1,039,856 Operating lease liabilities $ — $ 491,842 $ 491,842 Long-term deferred revenue and other long-term liabilities $ 456,107 $ (3,770) $ 452,337 Total liabilities $ 21,528,113 $ 725,605 $ 22,253,718 Total stockholders' equity (deficit) $ 8,951,217 $ — $ 8,951,217 Total liabilities and stockholders' equity (deficit) $ 30,960,772 $ 725,605 $ 31,686,377 Research and Development Research and development costs are expensed as incurred. Research and development costs totaled $5 million and $6 million for the three months ended March 31, 2019 and 2018, respectively. New Accounting Pronouncements 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. Fair Value Measurement. On August 28, 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements by adding, modifying or removing certain disclosures. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. We are evaluating the impact the adoption of ASU 2018-13 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, 2019 | |
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 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, 2019 2018 (In thousands, except per share amounts) Net income (loss) $ 361,299 $ 385,321 Less: Net income (loss) attributable to noncontrolling interests, net of tax 21,538 17,761 Net income (loss) attributable to DISH Network - Basic 339,761 367,560 Interest on dilutive Convertible Notes, net of tax (1) — — Net income (loss) attributable to DISH Network - Diluted $ 339,761 $ 367,560 Weighted-average common shares outstanding - Class A and B common stock: Basic 467,953 466,642 Dilutive impact of Convertible Notes 58,192 58,192 Dilutive impact of stock awards outstanding 74 475 Diluted 526,219 525,309 Earnings per share - Class A and B common stock: Basic net income (loss) per share attributable to DISH Network $ 0.73 $ 0.79 Diluted net income (loss) per share attributable to DISH Network $ 0.65 $ 0.70 (1) For both the three months ended March 31, 2019 and 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, 2019 2018 (In thousands) Anti-dilutive stock awards 4,495 3,572 Performance based options (1) 8,936 4,804 Restricted Performance Units/Awards 1,651 2,061 Common stock warrants 46,029 46,029 Total 61,111 56,466 (1) The increase in performance based options as of March 31, 2019 primarily resulted from the issuance of stock option awards as of October 1, 2018 under a long-term, performance-based stock incentive plan adopted on August 17, 2018 (the “2019 LTIP”). |
Supplemental Data - Statements
Supplemental Data - Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Data - Statements of Cash Flows | |
Supplemental Data - Statements of Cash Flows | 4. Supplemental Data - Statements of Cash Flows The following table presents certain supplemental cash flow and other non-cash data. See Note 8 for supplemental cash flow and non-cash data related to leases. For the Three Months Ended March 31, 2019 2018 (In thousands) Cash paid for interest (including capitalized interest) $ 289,497 $ 294,122 Cash received for interest 8,109 2,878 Cash paid for income taxes 701 1,758 Capitalized interest (1) 250,202 261,680 Reclassification of a receivable from noncurrent to current 140,810 — (1) 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, 2019 | |
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, 2019 2018 (In thousands) Marketable investment securities: Current marketable investment securities: Strategic - available-for-sale $ 185 $ 193 Strategic - trading/equity (Note 2) 2,894 2,370 Other 813,296 1,178,908 Total current marketable investment securities 816,375 1,181,471 Restricted marketable investment securities (1) 59,397 67,019 Total marketable investment securities 875,772 1,248,490 Restricted cash and cash equivalents (1) 8,666 578 Other investment securities: Other investment securities 161,653 118,992 Total other investment securities 161,653 118,992 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 1,046,091 $ 1,368,060 (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, 2019, 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. Current Marketable Investment Securities - Other Our current other 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, 2019 and December 31, 2018, 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. TerreStar Solutions, Inc. In March 2019, we closed a transaction with TerreStar Solutions, Inc. (“TSI”) to acquire additional equity securities of TSI, an entity that holds certain 2 GHz wireless spectrum licenses in Canada, in exchange for certain Canadian assets, including, among other things, a portion of the satellite capacity on our T1 satellite, which we had acquired from TerreStar Networks, Inc. in 2012. 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, 2019 and December 31, 2018, we had accumulated net unrealized gains of less than $1 million and accumulated net unrealized losses of $1 million, respectively. These amounts, net of related tax effect, were accumulated net unrealized gains of less than $1 million and accumulated net unrealized losses of $1 million, respectively. 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, 2019 As of December 31, 2018 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 $ 59,155 $ 71 $ (4) $ 67 $ 66,823 $ 40 $ (19) $ 21 Commercial paper 383,420 — (21) (21) 367,488 — — — Corporate securities 424,221 188 (9) 179 805,259 91 (899) (808) Other 6,082 56 (8) 48 6,550 56 (2) 54 Total $ 872,878 $ 315 $ (42) $ 273 $ 1,246,120 $ 187 $ (920) $ (733) As of March 31, 2019, restricted and non-restricted marketable investment securities included debt securities of $868 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. Fair Value Measurements Our investments measured at fair value on a recurring basis were as follows: As of March 31, 2019 December 31, 2018 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 1,540,361 $ 261,843 $ 1,278,518 $ — $ 859,220 $ 30,858 $ 828,362 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ 59,155 $ 59,155 $ — $ — $ 66,823 $ 66,823 $ — $ — Commercial paper 383,420 — 383,420 — 367,488 — 367,488 — Corporate securities 424,221 — 424,221 — 805,259 — 805,259 — Other 6,082 — 5,897 185 6,550 — 6,357 193 Equity securities 2,894 2,894 — — 2,370 2,370 — — Total $ 875,772 $ 62,049 $ 813,538 $ 185 $ 1,248,490 $ 69,193 $ 1,179,104 $ 193 During the three months ended March 31, 2019, we had no transfers in or out of Level 1 and Level 2 fair value measurements. Gains “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: 2019 2018 (In thousands) Marketable investment securities - realized and unrealized gains (losses) (1) $ 3,056 $ (36,543) Costs related to early redemption of debt (439) (179) Equity in earnings of affiliates (1,065) 1,446 Other 7,536 468 Total $ 9,088 $ (34,808) (1) During the three months ended March 31, 2019, we recorded unrealized gains of $2 million related to equity securities held as of March 31, 2019. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Inventory | 6. Inventory consisted of the following: As of March 31, December 31, 2019 2018 (In thousands) Finished goods $ 242,363 $ 215,186 Work-in-process and service repairs 49,939 56,871 Raw materials 16,949 18,676 Total inventory $ 309,251 $ 290,733 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment. | |
Property and Equipment | 7. Property and equipment consisted of the following: Depreciable As of Life March 31, December 31, (In Years) 2019 2018 (In thousands) Equipment leased to customers 2 - 5 $ 1,940,528 $ 2,016,965 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 D1 N/A 55,000 55,000 T1 (1) 14 66,071 100,000 Satellites acquired under finance lease agreements (2) 10 - 15 223,423 499,819 Furniture, fixtures, equipment and other 2 - 10 1,910,150 1,923,585 Buildings and improvements 4 - 40 285,321 290,650 Land — 13,186 13,186 Construction in progress — 126,186 100,560 Total property and equipment 5,308,778 5,688,678 Accumulated depreciation (3,445,611) (3,760,498) Property and equipment, net $ 1,863,167 $ 1,928,180 (1) See Note 5 for further information on the transaction with TSI. (2) The Ciel II satellite was previously classified as a finance lease, however, as a result of an amendment, which was effective during the first quarter 2019, Ciel II is now accounted for as an operating lease. Depreciation and amortization expense consisted of the following: For the Three Months Ended March 31, 2019 2018 (In thousands) Equipment leased to customers $ 109,154 $ 110,521 Satellites 20,479 25,086 Buildings, furniture, fixtures, equipment and other 23,506 57,365 Total depreciation and amortization $ 153,139 $ 192,972 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 11 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 seven satellites that we lease from EchoStar, which are accounted for as operating leases. We also lease two satellites from third parties, Ciel II which is now accounted for as an operating lease and Anik F3 which is accounted for as a financing lease and is depreciated over its economic life. As of March 31, 2019, 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 IX August 2003 121 Month to month EchoStar X (2) February 2006 110 February 2021 EchoStar XI (2) July 2008 110 September 2021 EchoStar XIV (2) March 2010 119 February 2023 EchoStar XVI (3) 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 (4) December 2008 129 January 2020 (1) See Note 13 for further information on our Related Party Transactions with EchoStar. (2) 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. (3) We have the option to renew this lease for an additional five-year period. (4) During the fourth quarter 2018, we amended this lease. (5) |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases We enter into operating and finance leases for, among other things, satellites, office space, data centers, warehouses and distribution centers, vehicles used for installation and Smart Home Services, wireless towers and other equipment. Our leases have remaining lease terms from one to 12 years, some of which include renewal options, and some of which include options to terminate the leases within one year. Our Anik F3 satellite is accounted for as a financing lease. The vast majority of our remaining leases are accounted for as operating leases, including the remainder of our satellite fleet. The components of lease expense were as follows: For the Three Months Ended March 31, 2019 (In thousands) Operating lease cost $ 81,070 Short-term lease cost (1) 2,484 Finance lease cost: Amortization of right-of-use assets 6,108 Interest on lease liabilities 1,181 Total finance lease cost 7,289 Total lease costs $ 90,843 (1) Leases that have terms of 12 month or less. Supplemental cash flow information related to leases was as follows : For the Three Months Ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 81,346 Operating cash flows from finance leases $ 1,195 Financing cash flows from finance leases $ 6,055 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 62,150 Finance leases $ — Right-of-use assets and liabilities recognized at January 1, 2019 upon adoption of ASC 842 $ 733,584 Supplemental balance sheet information related to leases was as follows: As of March 31, 2019 (In thousands) Operating Leases: Operating lease right-of-use assets $ 725,605 Other current liabilities $ 237,533 Operating lease liabilities 491,842 Total operating lease liabilities $ 729,375 Finance Leases: Property and equipment, gross $ 224,454 Accumulated depreciation (178,848) Property and equipment, net $ 45,606 Other current liabilities $ 18,349 Other long-term liabilities 42,403 Total finance lease liabilities $ 60,752 Weighted Average Remaining Lease Term: Operating leases 3.7 years Finance leases 3.1 years Weighted Average Discount Rate: Operating leases Finance leases Maturities of lease liabilities as of March 31, 2019 were as follows: Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2019 (remaining nine months) $ 227,988 $ 16,740 $ 244,728 2020 236,511 22,024 258,535 2021 195,840 22,026 217,866 2022 126,628 7,364 133,992 2023 24,628 — 24,628 Thereafter 51,556 — 51,556 Total lease payments 863,151 68,154 931,305 Less: Imputed interest (133,776) (7,402) (141,178) Total 729,375 60,752 790,127 Less: Current portion (237,533) (18,349) (255,882) Long-term portion of lease obligations $ 491,842 $ 42,403 $ 534,245 |
Long-Term Debt and Capital Leas
Long-Term Debt and Capital Lease Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt and Capital Lease Obligations | |
Long-Term Debt and Capital Lease Obligations | 9. Long-Term Debt and Finance 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, 2019 and December 31, 2018: As of March 31, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value (In thousands) 7 7/8% Senior Notes due 2019 (1) $ 1,295,007 $ 1,317,501 $ 1,317,372 $ 1,343,298 5 1/8% Senior Notes due 2020 1,100,000 1,110,670 1,100,000 1,089,957 6 3/4% Senior Notes due 2021 2,000,000 2,064,620 2,000,000 1,974,940 5 7/8% Senior Notes due 2022 2,000,000 1,941,280 2,000,000 1,833,140 5% Senior Notes due 2023 1,500,000 1,359,270 1,500,000 1,247,445 5 7/8% Senior Notes due 2024 2,000,000 1,693,000 2,000,000 1,611,960 2 3/8% Convertible Notes due 2024 1,000,000 822,950 1,000,000 801,200 7 3/4% Senior Notes due 2026 2,000,000 1,748,960 2,000,000 1,653,720 3 3/8% Convertible Notes due 2026 3,000,000 2,544,060 3,000,000 2,436,690 Other notes payable 31,232 31,232 39,715 39,715 Subtotal 15,926,239 $ 14,633,543 15,957,087 $ 14,032,065 Unamortized debt discount on the Convertible Notes (810,023) (833,906) Unamortized deferred financing costs and other debt discounts, net (35,136) (37,388) Finance lease obligations (2) 60,752 66,984 Total long-term debt and finance lease obligations (including current portion) $ 15,141,832 $ 15,152,777 (1) During the year ended December 31, 2018 and the three months ended March 31, 2019, we repurchased $83 million and $22 million, respectively, of our 7 7/8% Senior Notes due 2019 in open market trades. The remaining balance of $1.295 billion matures on September 1, 2019. (2) Disclosure regarding fair value of finance 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, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. 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. In addition to the 700 MHz Build-Out Requirement deadline in March 2020, these wireless spectrum licenses also expire in March 2020 unless they are renewed by the FCC. There can be no assurances that the FCC will renew these wireless spectrum licenses. 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 build-out requirements. By April 2022, 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 Build-Out Requirement”). If the H Block 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 the third quarter 2019 to provide “substantial service” on our MVDDS licenses. Our MVDDS licenses may be terminated 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 were 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. These wireless spectrum licenses have been renewed by the FCC through September 2028. There can be no assurances that the FCC will renew these wireless spectrum licenses. Commercialization of Our Wireless Spectrum Licenses and Related Assets. In March 2017, we notified the FCC that we plan to deploy a next-generation 5G-capable network, focused on supporting narrowband IoT. We expect to complete the First Phase by March 2020, with subsequent phases to be completed thereafter. As of March 31, 2019, we had entered into vendor contracts with multiple parties for, among other things, base stations, chipsets, modules, tower leases, the core network, RF design, and deployment services for the First Phase. Among other things, initial RF design in connection with the First Phase is now complete, we have secured certain tower sites, and we are in the process of identifying and securing additional tower sites. The core network has been installed and commissioned. We installed the first base stations on sites in 2018, and plan to continue deployment until complete. We currently expect expenditures for our wireless projects to be between $500 million and $1.0 billion through 2020. We expect the Second Phase to follow once the 3GPP Release 16 is standardized and as our plans for our other spectrum holdings develop, we plan to upgrade and expand our network to full 5G to support new use cases. We currently expect expenditures for the Second Phase to be approximately $10 billion. 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. 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. For example, on September 18, 2018, we filed an application with the FCC to participate as a bidder in the FCC’s auction of Upper Microwave Flexible Use Service licenses in the 27.5–28.35 GHz bands (“Auction 101”) and 24.25–24.45 and 24.75–25.25 GHz bands (“Auction 102” and collectively with Auction 101, “Auctions 101 & 102”). On October 10, 2018, the FCC announced that a subsidiary of DISH Network and 25 other applicants were qualified to participate in Auction 101 and that a subsidiary of DISH Network and 33 other applicants were qualified to participate in Auction 102. Auction 101 commenced on November 14, 2018 and concluded January 24, 2019. Auction 102 commenced on March 14, 2019 and concluded on April 17, 2019. The FCC determined that bidding in these auctions will be “anonymous,” which means that prior to and during the course of the auctions, the FCC will not make public any information about a specific applicant’s upfront deposit or its bids. In addition, FCC rules restrict information that bidders may disclose about their participation in the auctions. On July 9, 2018, the FCC sent us a letter inquiring about our progress toward meeting certain build-out milestones by March 2020, which is publicly available on the FCC’s website. On September 21, 2018, we filed a response letter with the FCC regarding our progress toward meeting certain build-out milestones. We will continue to update the FCC about our progress on the First Phase. There is no assurance that the FCC will find our build-out, including the First Phase, sufficient to meet the build-out requirements to which our wireless spectrum licenses are subject. 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 During 2015, through our wholly-owned subsidiaries American II and American III, we initially 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 a non-controlling interest in Northstar Spectrum, which is comprised of 85% of the Class B Common Interests and 100% of the Class A Preferred Interests of Northstar Spectrum. Northstar Manager is the sole manager of Northstar Spectrum and owns a controlling interest in Northstar Spectrum, which is comprised of 15% of the Class B Common Interests 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. See below for further information. SNR Investment. Through American III, we own a non-controlling interest in SNR HoldCo, which is comprised of 85% of the Class B Common Interests and 100% of the Class A Preferred Interests of SNR HoldCo. SNR Management is the sole manager of SNR HoldCo and owns a controlling interest in SNR HoldCo, which is comprised of 15% of the Class B Common Interests 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. See below for further information. 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 as an expense during the fourth quarter 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 as an expense during the fourth quarter 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 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, which the United States Supreme Court denied on June 25, 2018 . 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 provided that Northstar Wireless and SNR Wireless each had 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 for an additional 45 days to June 8, 2018. On June 8, 2018, Northstar Wireless and SNR Wireless each filed amended agreements 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. The Order on Remand also provided, among other things, until July 23, 2018 for certain third-parties to file comments about any changes to the agreements proposed by Northstar Wireless and SNR Wireless and several third-parties filed comments (with one opposition). On October 22, 2018, Northstar Wireless and SNR Wireless filed a response to the third-party comments. Northstar Wireless and SNR Wireless have submitted eleven separate requests for meetings with the FCC regarding a Cure. To date, with the lone exception of the Office of former Commissioner Mignon Clyburn, the parties have been refused an audience with the Commissioners and staff of the FCC. Northstar Wireless and SNR Wireless have filed a Joint Application for Review of the Order on Remand requesting, among other things, an iterative negotiation process with the FCC regarding a Cure, which was denied on July 12, 2018. 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. On June 7, 2018, American II, Northstar Spectrum, and Northstar Manager amended and restated the Second Amended and Restated Limited Liability Company Agreement, dated March 31, 2018, by and among American II, Northstar Spectrum, and Northstar Manager, to, among other things: (i) reduce the mandatory quarterly distribution for the Northstar Preferred Interests from 12 percent to eight percent from and after June 7, 2018; (ii) increase the window for Northstar Manager to “put” its interest in Northstar Spectrum to Northstar Spectrum after October 27, 2020 from 30 days to 90 days; (iii) provide an additional 90-day window for Northstar Manager to put its interest in Northstar Spectrum to Northstar Spectrum commencing on October 27, 2021; (iv) provide a right for Northstar Manager to require an appraisal of the fair market value of its interest in Northstar Spectrum at any time from October 27, 2022 through October 27, 2024, coupled with American II having the right to accept the offer to sell from Northstar Manager; (v) allow Northstar Manager to sell its interest in Northstar Spectrum without American II’s co |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Segment Reporting | 11. 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, 2019 2018 (In thousands) Total assets: Pay-TV $ 30,002,686 $ 28,981,608 Wireless 24,737,581 24,433,458 Eliminations (23,053,890) (22,828,054) Total assets $ 31,686,377 $ 30,587,012 For the Three Months Ended March 31, 2019 2018 (In thousands) Revenue: Pay-TV $ 3,188,169 $ 3,458,487 Wireless 3 — Eliminations (1,028) — Total revenue $ 3,187,144 $ 3,458,487 Operating income (loss): Pay-TV $ 457,369 $ 539,302 Wireless (1,069) (9,796) Eliminations — — Total operating income (loss) $ 456,300 $ 529,506 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: 2019 2018 (In thousands) United States $ 3,176,253 $ 3,449,016 Canada and Mexico 10,891 9,471 Total revenue $ 3,187,144 $ 3,458,487 The revenue from external customers disaggregated by major revenue source was as follows: For the Three Months Ended March 31, Category: 2019 2018 (In thousands) Pay-TV video and related revenue $ 3,097,936 $ 3,347,597 Broadband revenue 49,834 75,107 Equipment sales and other revenue 39,374 35,783 Total $ 3,187,144 $ 3,458,487 All revenues during the three months ended March 31, 2019 were derived from our Pay-TV segment. |
Contract Balances
Contract Balances | 3 Months Ended |
Mar. 31, 2019 | |
Contract Balances | |
Contract Balances | 12. Our valuation and qualifying accounts as of March 31, 2019 were as follows: Allowance for doubtful accounts Balance at Charged to Deductions Balance at (In thousands) For the three months ended March 31, 2019 $ 16,966 $ 18,496 $ (16,495) $ 18,967 Deferred revenue related to contracts with our customers 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 our customers were as follows: Contract Liabilities (In thousands) Balance as of December 31, 2018 $ 635,018 Recognition of unearned revenue (1,597,470) Deferral of revenue 1,589,358 Balance as of March 31, 2019 $ 626,906 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, 2019 | |
Related Party Transactions | |
Related Party Transactions | 13. 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 entities 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. 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. 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. In addition, certain agreements that we had with EchoStar have terminated, and we entered into certain new agreements with EchoStar. 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, 2019 and December 31, 2018, trade accounts receivable from EchoStar was $3 million and $4 million, respectively. These amounts are recorded in “Trade accounts receivable” on our Condensed Consolidated Balance Sheets. “Trade accounts payable” As of March 31, 2019 and December 31, 2018, trade accounts payable to EchoStar was $22 million and $14 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, 2019 and 2018, we received $2 million and $4 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 and in April 2018 EchoStar exercised its second renewal option for a period ending in August 2021. · 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. In August 2018, EchoStar exercised its option to renew this lease for a one-year period ending in February 2020. EchoStar has the option to renew this lease for twelve 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. In August 2018, EchoStar exercised its option to renew this lease for a one-year period ending in February 2020. EchoStar has the option to renew this lease for twelve 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, 2019 and 2018, we incurred $7 million and $13 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, 2019 and 2018, we incurred expenses of $73 million and $85 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 expired 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 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. During 2018, we and EchoStar further amended the agreement to, among other things, allow us to place and use certain satellites at the 61.5 degree orbital location. 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 10. Under the terms of the DISH Nimiq 5 Agreement, we make certain monthly payments to EchoStar that commenced in 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. 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. 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. Hughes Equipment and Services Agreement. In February 2019, we and HNS entered into an agreement pursuant to which HNS will provide us with HughesNet Service and HughesNet equipment for the transmission of certain data related to our next-generation 5G-capable network, focused on supporting narrowband IoT. This agreement has an initial term of five years with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. “General and administrative expenses” During each of the three months ended March 31, 2019 and 2018, we incurred $5 million for 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 was for a period ending on December 31, 2018. In December 2018, we and EchoStar amended this lease to, among other things, extend the term thereof for one additional year until December 31, 2019. · 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, 2018. In December 2018, we and EchoStar amended this lease to, among other things, extend the term thereof for one additional year until December 31, 2019. · 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 (the “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. In light of the Tax Sharing Agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, during the third quarter 2013, we and EchoStar agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’ examination of these consolidated tax returns. As a result, we agreed to pay EchoStar $84 million of the tax benefit we received or will receive. This resulted in a reduction of our recorded unrecognized tax benefits and this amount was reclassified to a long-term payable to EchoStar within “Long-term deferred revenue and other long-term liabilities” on our Consolidated Balance Sheets during the third quarter 2013. Any payment to EchoStar, including accrued interest, will be made at such time as EchoStar would have otherwise been able to realize such tax benefit. In addition, during the third quarter 2013, we and EchoStar agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and EchoStar for such combined returns, through the taxable period ending on December 31, 2017 (the “State Tax Arrangement”). During the third quarter 2018, we and EchoStar amended the Tax Sharing Agreement and the 2013 agreements (the “Amendment”). Under the Amendment, among other things, we are entitled to apply the benefit of EchoStar’s 2009 net operating losses to our federal tax return for the year ended December 31, 2008, in exchange for paying EchoStar over time the value of the net annual federal income taxes paid by EchoStar that would have been otherwise offset by their 2009 net operating loss. In addition, the Amendment extends the term of the State Tax Arrangement for filing certain combined state income tax returns to the earlier to occur of (1) termination of the Tax Sharing Agreement, (2) a change in control of either us or EchoStar or, (3) for any particular state, if we and EchoStar no longer file a combined tax return for such state. 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 for the year ended December 31, 2018 in “Additional paid-in capital” on our Condensed Consolidated Balance Sheets 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. 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 th |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018. 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. |
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. The Northstar Operative Agreements, as amended, provide for, among other things, that after the fifth and sixth anniversaries of the grant of the AWS-3 Licenses to Northstar Wireless (and in certain circumstances, prior to the fifth 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” 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 Northstar Spectrum attributable to Northstar Manager 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 10 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. The SNR Operative Agreements, as amended, provide for, among other things, that after the fifth and sixth anniversaries of the grant of the AWS-3 Licenses to SNR Wireless (and in certain circumstances, prior to the fifth 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 10 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, relative standalone selling prices of performance obligations, 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 Recognition and Measurement of Financial Assets and Financial Liabilities (“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 on our 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, our wireless spectrum licenses, build-out costs associated with our network deployment and satellites. 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, 2019 and December 31, 2018, 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 finance 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 9 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 equipment rental fees and other hardware related fees, including DVRs and fees from subscribers with multiple receivers; advertising services; fees earned from our Smart Home service operations; broadband services; warranty services; and sales of digital receivers and related equipment to third-party pay-TV providers. See Note 11 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 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 are 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 Smart 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 Revenue from Contracts with Customers (“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 12 for further information, including balance and activity detail about our allowance for doubtful accounts and deferred revenue related to contracts with subscribers. 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, 2019 and 2018, we capitalized $37 million and $41 million, respectively, under these programs. The amortization expense related to these programs was $14 million and $3 million, respectively, for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and December 31, 2018, we had a total of $192 million and $169 million capitalized on our Condensed Consolidated Balance Sheets. These amounts are capitalized in “Other current 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 and Comprehensive Income (Loss). |
Leases | Leases We enter into operating and finance leases for, among other things, satellites, office space, data centers, warehouses and distribution centers, vehicles used for installation and Smart Home Services, wireless towers and other equipment. Our leases have remaining lease terms from one to 12 years, some of which include renewal options, and some of which include options to terminate the leases within one year. We determine if an arrangement is a lease and classify that lease as either an operating or finance lease at inception. Operating leases are included in “Operating lease assets,” “Other accrued expenses” and “Operating lease liabilities” on our Condensed Consolidated Balance Sheets. Finance leases are included in “Property and equipment, net,” “Current portion of long-term debt and finance lease obligations” and “Long-term debt and finance lease obligations, net of current portion” on our Condensed Consolidated Balance Sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the lease term on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 8 for further information on our lease expenses. Right of use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent the present value of our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes the impact of prepaid or deferred lease payments. The length of our lease term may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We lease certain assets from EchoStar, including, among other things, satellites, office space and data centers. See Note 13 for further information on our Related Party Transactions with EchoStar. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Our variable lease payments are immaterial and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. For equipment leased to new and existing DISH TV subscribers we made an accounting policy election to combine the equipment with our programming services as a single performance obligation in accordance with the revenue recognition guidance as the programming services are the predominant component. Impact of Adoption of ASU 2016-02 In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 Leases (“ASU 2016-02”) and has modified the standard thereafter. We adopted ASU 2016-02, as modified, on January 1, 2019 using the modified retrospective method. Under the modified retrospective method, we applied the new guidance to all leases that commenced before and were existing as of January 1, 2019. The adoption of ASU 2016-02 had no impact on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and cash flows from operating, investing and financing activities on our Condensed Consolidated Statements of Cash Flows. The adoption of ASU 2016-02 impacted our March 31, 2019 Condensed Consolidated Balance Sheet, including the reclassification of our deferred rent liabilities to an operating lease asset, as follows: Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2016-02 DISH Network (as currently reported) (In thousands) As of March 31, 2019 Operating lease assets $ — $ 725,605 $ 725,605 Total assets $ 30,960,772 $ 725,605 $ 31,686,377 Other accrued expenses $ 802,323 $ 237,533 $ 1,039,856 Operating lease liabilities $ — $ 491,842 $ 491,842 Long-term deferred revenue and other long-term liabilities $ 456,107 $ (3,770) $ 452,337 Total liabilities $ 21,528,113 $ 725,605 $ 22,253,718 Total stockholders' equity (deficit) $ 8,951,217 $ — $ 8,951,217 Total liabilities and stockholders' equity (deficit) $ 30,960,772 $ 725,605 $ 31,686,377 |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development costs totaled $5 million and $6 million for the three months ended March 31, 2019 and 2018, respectively. |
New Accounting Pronouncements | New Accounting Pronouncements 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. Fair Value Measurement. On August 28, 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements by adding, modifying or removing certain disclosures. This standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. We are evaluating the impact the adoption of ASU 2018-13 will have on our Condensed Consolidated Financial Statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Redeemable Noncontrolling Interest | |
Summary of adoption of ASU 2016-02 impacted our condensed consolidated balance sheets | Condensed Consolidated Balance Sheets DISH Network (as would have been reported under previous standards) Impact of adopting ASU 2016-02 DISH Network (as currently reported) (In thousands) As of March 31, 2019 Operating lease assets $ — $ 725,605 $ 725,605 Total assets $ 30,960,772 $ 725,605 $ 31,686,377 Other accrued expenses $ 802,323 $ 237,533 $ 1,039,856 Operating lease liabilities $ — $ 491,842 $ 491,842 Long-term deferred revenue and other long-term liabilities $ 456,107 $ (3,770) $ 452,337 Total liabilities $ 21,528,113 $ 725,605 $ 22,253,718 Total stockholders' equity (deficit) $ 8,951,217 $ — $ 8,951,217 Total liabilities and stockholders' equity (deficit) $ 30,960,772 $ 725,605 $ 31,686,377 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 2018 (In thousands, except per share amounts) Net income (loss) $ 361,299 $ 385,321 Less: Net income (loss) attributable to noncontrolling interests, net of tax 21,538 17,761 Net income (loss) attributable to DISH Network - Basic 339,761 367,560 Interest on dilutive Convertible Notes, net of tax (1) — — Net income (loss) attributable to DISH Network - Diluted $ 339,761 $ 367,560 Weighted-average common shares outstanding - Class A and B common stock: Basic 467,953 466,642 Dilutive impact of Convertible Notes 58,192 58,192 Dilutive impact of stock awards outstanding 74 475 Diluted 526,219 525,309 Earnings per share - Class A and B common stock: Basic net income (loss) per share attributable to DISH Network $ 0.73 $ 0.79 Diluted net income (loss) per share attributable to DISH Network $ 0.65 $ 0.70 (1) For both the three months ended March 31, 2019 and 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, 2019 2018 (In thousands) Anti-dilutive stock awards 4,495 3,572 Performance based options (1) 8,936 4,804 Restricted Performance Units/Awards 1,651 2,061 Common stock warrants 46,029 46,029 Total 61,111 56,466 (1) The increase in performance based options as of March 31, 2019 primarily resulted from the issuance of stock option awards as of October 1, 2018 under a long-term, performance-based stock incentive plan adopted on August 17, 2018 (the “2019 LTIP”). |
Supplemental Data - Statement_2
Supplemental Data - Statements of Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Data - Statements of Cash Flows | |
Schedule of supplemental cash flow and other non-cash data | For the Three Months Ended March 31, 2019 2018 (In thousands) Cash paid for interest (including capitalized interest) $ 289,497 $ 294,122 Cash received for interest 8,109 2,878 Cash paid for income taxes 701 1,758 Capitalized interest (1) 250,202 261,680 Reclassification of a receivable from noncurrent to current 140,810 — (1) See Note 2 for further information. |
Marketable Investment Securit_2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | |
Schedule of marketable investment securities, restricted cash and cash equivalents, and other investment securities | As of March 31, December 31, 2019 2018 (In thousands) Marketable investment securities: Current marketable investment securities: Strategic - available-for-sale $ 185 $ 193 Strategic - trading/equity (Note 2) 2,894 2,370 Other 813,296 1,178,908 Total current marketable investment securities 816,375 1,181,471 Restricted marketable investment securities (1) 59,397 67,019 Total marketable investment securities 875,772 1,248,490 Restricted cash and cash equivalents (1) 8,666 578 Other investment securities: Other investment securities 161,653 118,992 Total other investment securities 161,653 118,992 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 1,046,091 $ 1,368,060 (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, 2019 As of December 31, 2018 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 $ 59,155 $ 71 $ (4) $ 67 $ 66,823 $ 40 $ (19) $ 21 Commercial paper 383,420 — (21) (21) 367,488 — — — Corporate securities 424,221 188 (9) 179 805,259 91 (899) (808) Other 6,082 56 (8) 48 6,550 56 (2) 54 Total $ 872,878 $ 315 $ (42) $ 273 $ 1,246,120 $ 187 $ (920) $ (733) |
Schedule of fair value measurements | As of March 31, 2019 December 31, 2018 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 1,540,361 $ 261,843 $ 1,278,518 $ — $ 859,220 $ 30,858 $ 828,362 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ 59,155 $ 59,155 $ — $ — $ 66,823 $ 66,823 $ — $ — Commercial paper 383,420 — 383,420 — 367,488 — 367,488 — Corporate securities 424,221 — 424,221 — 805,259 — 805,259 — Other 6,082 — 5,897 185 6,550 — 6,357 193 Equity securities 2,894 2,894 — — 2,370 2,370 — — Total $ 875,772 $ 62,049 $ 813,538 $ 185 $ 1,248,490 $ 69,193 $ 1,179,104 $ 193 |
Schedule of gains and losses on sales and changes in carrying amounts of investments | For the Three Months Ended March 31, Other, net: 2019 2018 (In thousands) Marketable investment securities - realized and unrealized gains (losses) (1) $ 3,056 $ (36,543) Costs related to early redemption of debt (439) (179) Equity in earnings of affiliates (1,065) 1,446 Other 7,536 468 Total $ 9,088 $ (34,808) (1) During the three months ended March 31, 2019, we recorded unrealized gains of $2 million related to equity securities held as of March 31, 2019. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory | |
Schedule of inventory | As of March 31, December 31, 2019 2018 (In thousands) Finished goods $ 242,363 $ 215,186 Work-in-process and service repairs 49,939 56,871 Raw materials 16,949 18,676 Total inventory $ 309,251 $ 290,733 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment. | |
Schedule of property and equipment | Depreciable As of Life March 31, December 31, (In Years) 2019 2018 (In thousands) Equipment leased to customers 2 - 5 $ 1,940,528 $ 2,016,965 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 D1 N/A 55,000 55,000 T1 (1) 14 66,071 100,000 Satellites acquired under finance lease agreements (2) 10 - 15 223,423 499,819 Furniture, fixtures, equipment and other 2 - 10 1,910,150 1,923,585 Buildings and improvements 4 - 40 285,321 290,650 Land — 13,186 13,186 Construction in progress — 126,186 100,560 Total property and equipment 5,308,778 5,688,678 Accumulated depreciation (3,445,611) (3,760,498) Property and equipment, net $ 1,863,167 $ 1,928,180 (1) See Note 5 for further information on the transaction with TSI. (2) The Ciel II satellite was previously classified as a finance lease, however, as a result of an amendment, which was effective during the first quarter 2019, Ciel II is now accounted for as an operating lease. |
Schedule of depreciation and amortization expense | For the Three Months Ended March 31, 2019 2018 (In thousands) Equipment leased to customers $ 109,154 $ 110,521 Satellites 20,479 25,086 Buildings, furniture, fixtures, equipment and other 23,506 57,365 Total depreciation and amortization $ 153,139 $ 192,972 |
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 IX August 2003 121 Month to month EchoStar X (2) February 2006 110 February 2021 EchoStar XI (2) July 2008 110 September 2021 EchoStar XIV (2) March 2010 119 February 2023 EchoStar XVI (3) 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 (4) December 2008 129 January 2020 (1) See Note 13 for further information on our Related Party Transactions with EchoStar. (2) 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. (3) We have the option to renew this lease for an additional five-year period. (4) During the fourth quarter 2018, we amended this lease. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | For the Three Months Ended March 31, 2019 (In thousands) Operating lease cost $ 81,070 Short-term lease cost (1) 2,484 Finance lease cost: Amortization of right-of-use assets 6,108 Interest on lease liabilities 1,181 Total finance lease cost 7,289 Total lease costs $ 90,843 (1) Leases that have terms of 12 month or less. |
Summary of Supplemental cash flow information related to leases | For the Three Months Ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 81,346 Operating cash flows from finance leases $ 1,195 Financing cash flows from finance leases $ 6,055 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 62,150 Finance leases $ — Right-of-use assets and liabilities recognized at January 1, 2019 upon adoption of ASC 842 $ 733,584 |
Summary of supplemental balance sheet information related to leases | As of March 31, 2019 (In thousands) Operating Leases: Operating lease right-of-use assets $ 725,605 Other current liabilities $ 237,533 Operating lease liabilities 491,842 Total operating lease liabilities $ 729,375 Finance Leases: Property and equipment, gross $ 224,454 Accumulated depreciation (178,848) Property and equipment, net $ 45,606 Other current liabilities $ 18,349 Other long-term liabilities 42,403 Total finance lease liabilities $ 60,752 Weighted Average Remaining Lease Term: Operating leases 3.7 years Finance leases 3.1 years Weighted Average Discount Rate: Operating leases Finance leases |
Summary of maturities of operating lease liabilities | Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2019 (remaining nine months) $ 227,988 $ 16,740 $ 244,728 2020 236,511 22,024 258,535 2021 195,840 22,026 217,866 2022 126,628 7,364 133,992 2023 24,628 — 24,628 Thereafter 51,556 — 51,556 Total lease payments 863,151 68,154 931,305 Less: Imputed interest (133,776) (7,402) (141,178) Total 729,375 60,752 790,127 Less: Current portion (237,533) (18,349) (255,882) Long-term portion of lease obligations $ 491,842 $ 42,403 $ 534,245 |
Summary of maturities of finance lease liabilities | Maturities of lease liabilities as of March 31, 2019 were as follows: Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2019 (remaining nine months) $ 227,988 $ 16,740 $ 244,728 2020 236,511 22,024 258,535 2021 195,840 22,026 217,866 2022 126,628 7,364 133,992 2023 24,628 — 24,628 Thereafter 51,556 — 51,556 Total lease payments 863,151 68,154 931,305 Less: Imputed interest (133,776) (7,402) (141,178) Total 729,375 60,752 790,127 Less: Current portion (237,533) (18,349) (255,882) Long-term portion of lease obligations $ 491,842 $ 42,403 $ 534,245 |
Long-Term Debt and Capital Le_2
Long-Term Debt and Capital Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Long-Term Debt and Capital Lease Obligations | |
Schedule of carrying and fair values of the entity's debt facilities | As of March 31, 2019 December 31, 2018 Carrying Fair Value Carrying Fair Value (In thousands) 7 7/8% Senior Notes due 2019 (1) $ 1,295,007 $ 1,317,501 $ 1,317,372 $ 1,343,298 5 1/8% Senior Notes due 2020 1,100,000 1,110,670 1,100,000 1,089,957 6 3/4% Senior Notes due 2021 2,000,000 2,064,620 2,000,000 1,974,940 5 7/8% Senior Notes due 2022 2,000,000 1,941,280 2,000,000 1,833,140 5% Senior Notes due 2023 1,500,000 1,359,270 1,500,000 1,247,445 5 7/8% Senior Notes due 2024 2,000,000 1,693,000 2,000,000 1,611,960 2 3/8% Convertible Notes due 2024 1,000,000 822,950 1,000,000 801,200 7 3/4% Senior Notes due 2026 2,000,000 1,748,960 2,000,000 1,653,720 3 3/8% Convertible Notes due 2026 3,000,000 2,544,060 3,000,000 2,436,690 Other notes payable 31,232 31,232 39,715 39,715 Subtotal 15,926,239 $ 14,633,543 15,957,087 $ 14,032,065 Unamortized debt discount on the Convertible Notes (810,023) (833,906) Unamortized deferred financing costs and other debt discounts, net (35,136) (37,388) Finance lease obligations (2) 60,752 66,984 Total long-term debt and finance lease obligations (including current portion) $ 15,141,832 $ 15,152,777 (1) During the year ended December 31, 2018 and the three months ended March 31, 2019, we repurchased $83 million and $22 million, respectively, of our 7 7/8% Senior Notes due 2019 in open market trades. The remaining balance of $1.295 billion matures on September 1, 2019. (2) Disclosure regarding fair value of finance leases is not required. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Schedule of assets, revenue, and operating income by segment | As of March 31, December 31, 2019 2018 (In thousands) Total assets: Pay-TV $ 30,002,686 $ 28,981,608 Wireless 24,737,581 24,433,458 Eliminations (23,053,890) (22,828,054) Total assets $ 31,686,377 $ 30,587,012 For the Three Months Ended March 31, 2019 2018 (In thousands) Revenue: Pay-TV $ 3,188,169 $ 3,458,487 Wireless 3 — Eliminations (1,028) — Total revenue $ 3,187,144 $ 3,458,487 Operating income (loss): Pay-TV $ 457,369 $ 539,302 Wireless (1,069) (9,796) Eliminations — — Total operating income (loss) $ 456,300 $ 529,506 |
Schedule of revenue by geographical region | For the Three Months Ended March 31, Revenue: 2019 2018 (In thousands) United States $ 3,176,253 $ 3,449,016 Canada and Mexico 10,891 9,471 Total revenue $ 3,187,144 $ 3,458,487 |
Revenue from external customers disaggregated by major revenue source | For the Three Months Ended March 31, Category: 2019 2018 (In thousands) Pay-TV video and related revenue $ 3,097,936 $ 3,347,597 Broadband revenue 49,834 75,107 Equipment sales and other revenue 39,374 35,783 Total $ 3,187,144 $ 3,458,487 |
Contract Balances (Tables)
Contract Balances (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Contract Balances | |
Summary of activity in the allowance for doubtful accounts | Allowance for doubtful accounts Balance at Charged to Deductions Balance at (In thousands) For the three months ended March 31, 2019 $ 16,966 $ 18,496 $ (16,495) $ 18,967 |
Schedule of changes in deferred revenue related to contracts with subscribers | Contract Liabilities (In thousands) Balance as of December 31, 2018 $ 635,018 Recognition of unearned revenue (1,597,470) Deferral of revenue 1,589,358 Balance as of March 31, 2019 $ 626,906 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
NagraStar | |
Schedule of transactions with related party | For the Three Months Ended March 31, 2019 2018 (In thousands) Purchases (including fees): Purchases from NagraStar $ 14,359 $ 16,843 As of March 31, December 31, 2019 2018 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 15,149 $ 9,871 Commitments to NagraStar $ 3,110 $ 3,888 |
Dish Mexico | |
Schedule of transactions with related party | For the Three Months Ended March 31, 2019 2018 (In thousands) Sales: Digital receivers and related components $ — $ 280 Uplink services $ 1,404 $ 1,034 As of March 31, December 31, 2019 2018 (In thousands) Amounts Receivable: Amounts receivable from Dish Mexico $ 1,053 $ 1,370 |
Organization and Business Act_2
Organization and Business Activities (Details) item in Thousands, $ in Millions | 3 Months Ended | 84 Months Ended | 135 Months Ended | |
Mar. 31, 2019USD ($)segmentitem | Dec. 31, 2014USD ($) | Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Spectrum Investments | ||||
Number of primary operating business units | segment | 2 | |||
Number of Pay-TV subscribers | item | 12,063 | 12,063 | ||
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 | 2,424 | 2,424 | ||
Dish TV | ||||
Spectrum Investments | ||||
Number of Pay-TV subscribers | item | 9,639 | 9,639 | ||
Wireless | ||||
Spectrum Investments | ||||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | |||
Northstar Spectrum And SNR Holdco | ||||
Spectrum Investments | ||||
Total debt and equity investments in subsidiaries | $ 10 | $ 10 | $ 10,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accounting policy disclosures | |||
Capitalized Contract Cost | $ 37,000 | $ 41,000 | |
Amortization expense related to the programs | 14,000 | 3,000 | |
Total costs capitalized | 192,000 | $ 169,000 | |
Deferred taxes | $ 2,529,065 | $ 2,474,907 | |
Revenue, Practical Expedient, Financing Component [true false] | true | ||
Research and Development | |||
Research and development cost | $ 5,000 | $ 6,000 | |
Northstar Manager LLC | Minimum | |||
Variable Interest Entity | |||
Number of years after wireless spectrum license is granted until put right vests | 5 years | ||
Northstar Manager LLC | Maximum | |||
Variable Interest Entity | |||
Number of years after wireless spectrum license is granted until put right vests | 6 years | ||
SNR Wireless Management LLC | Minimum | |||
Variable Interest Entity | |||
Number of years after wireless spectrum license is granted until put right vests | 5 years | ||
SNR Wireless Management LLC | Maximum | |||
Variable Interest Entity | |||
Number of years after wireless spectrum license is granted until put right vests | 6 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Impact of Adoption of ASU2016-02 (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 725,605 | |||
Total assets | 31,686,377 | $ 30,587,012 | ||
Other accrued expenses | 1,039,856 | 802,388 | ||
Operating lease liabilities | 491,842 | |||
Long-term deferred revenue and other long-term liabilities | 452,337 | 470,932 | ||
Total liabilities | 22,253,718 | 21,532,755 | ||
Total stockholders' equity (deficit) | 8,951,217 | 8,594,189 | $ 7,325,263 | $ 6,937,906 |
Total liabilities and stockholders' equity (deficit) | 31,686,377 | $ 30,587,012 | ||
Accounting Standards Update 2016-02 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | 725,605 | |||
Total assets | 31,686,377 | |||
Other accrued expenses | 1,039,856 | |||
Operating lease liabilities | 491,842 | |||
Long-term deferred revenue and other long-term liabilities | 452,337 | |||
Total liabilities | 22,253,718 | |||
Total stockholders' equity (deficit) | 8,951,217 | |||
Total liabilities and stockholders' equity (deficit) | 31,686,377 | |||
Accounting Standards Update 2016-02 [Member] | As would have been reported under previous standards | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Total assets | 30,960,772 | |||
Other accrued expenses | 802,323 | |||
Long-term deferred revenue and other long-term liabilities | 456,107 | |||
Total liabilities | 21,528,113 | |||
Total stockholders' equity (deficit) | 8,951,217 | |||
Total liabilities and stockholders' equity (deficit) | 30,960,772 | |||
Accounting Standards Update 2016-02 [Member] | Impact of adopting ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | 725,605 | |||
Total assets | 725,605 | |||
Other accrued expenses | 237,533 | |||
Operating lease liabilities | 491,842 | |||
Long-term deferred revenue and other long-term liabilities | (3,770) | |||
Total liabilities | 725,605 | |||
Total liabilities and stockholders' equity (deficit) | $ 725,605 |
Basic and Diluted Net Income _3
Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic and Diluted Net Income (Loss) Per Share | ||
Net income (loss) | $ 361,299 | $ 385,321 |
Less: Net income (loss) attributable to noncontrolling interests, net of tax | 21,538 | 17,761 |
Net income (loss) attributable to DISH Network | 339,761 | 367,560 |
Net income (loss) attributable to DISH Network - Diluted | $ 339,761 | $ 367,560 |
Weighted-average common shares outstanding - Class A and B common stock: | ||
Basic (in shares) | 467,953 | 466,642 |
Dilutive impact of Convertible Notes (in shares) | 58,192 | 58,192 |
Dilutive impact of stock awards outstanding (in shares) | 74 | 475 |
Diluted (in shares) | 526,219 | 525,309 |
Earnings per share - Class A and B common stock: | ||
Basic net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.73 | $ 0.79 |
Diluted net income (loss) per share attributable to DISH Network (in dollars per share) | $ 0.65 | $ 0.70 |
Basic and Diluted Net Income _4
Basic and Diluted Net Income (Loss) Per Share - Performance based stock (Details) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive securities excluded from computation of earnings per share | ||
Anti-dilutive securities excluded from computation of earnings per share | 61,111 | 56,466 |
Strike price of the warrants | $ 86.08 | |
Anti-dilutive stock awards | ||
Antidilutive securities excluded from computation of earnings per share | ||
Anti-dilutive securities excluded from computation of earnings per share | 4,495 | 3,572 |
Performance based options | ||
Antidilutive securities excluded from computation of earnings per share | ||
Anti-dilutive securities excluded from computation of earnings per share | 8,936 | 4,804 |
Restricted Performance Units/Awards | ||
Antidilutive securities excluded from computation of earnings per share | ||
Anti-dilutive securities excluded from computation of earnings per share | 1,651 | 2,061 |
Common stock warrants | ||
Antidilutive securities excluded from computation of earnings per share | ||
Anti-dilutive securities excluded from computation of earnings per share | 46,029 | 46,029 |
Supplemental Data - Statement_3
Supplemental Data - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Supplemental Data - Statements of Cash Flows | |||
Cash paid for interest (including capitalized interest) | $ 289,497 | $ 294,122 | |
Cash received for interest | 8,109 | 2,878 | |
Cash paid for income taxes | 701 | 1,758 | |
Capitalized interest | [1] | 250,202 | $ 261,680 |
Reclassification of a receivable from noncurrent to current | $ 140,810 | ||
[1] | See Note 2 for further information. |
Marketable Investment Securit_3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Marketable investment securities, restricted cash and other investment securities | ||
Strategic - available-for-sale | $ 185 | $ 193 |
Strategic - trading/equity (Note 2) | 2,894 | 2,370 |
Marketable investment securities | 816,375 | 1,181,471 |
Total marketable investment securities | 875,772 | 1,248,490 |
Restricted cash and cash equivalents | 8,666 | 578 |
Total other investment securities | 161,653 | 118,992 |
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | 1,046,091 | 1,368,060 |
Other investment securities | ||
Marketable investment securities, restricted cash and other investment securities | ||
Marketable investment securities | 813,296 | 1,178,908 |
Other investment securities - equity method | 161,653 | 118,992 |
Restricted Marketable Investment Securities [Member] | ||
Marketable investment securities, restricted cash and other investment securities | ||
Total marketable investment securities | $ 59,397 | $ 67,019 |
Marketable Investment Securit_4
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2019 | 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 Securit_5
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, 2019 | Dec. 31, 2018 |
Components of our available-for-sale investments | ||
Debt securities | $ 872,878 | $ 1,246,120 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 315 | 187 |
Unrealized Losses | (42) | (920) |
Unrealized Gains Losses, Net | 273 | (733) |
Accumulated net unrealized 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 | 868,000 | |
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 | 59,155 | 66,823 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 71 | 40 |
Unrealized Losses | (4) | (19) |
Unrealized Gains Losses, Net | 67 | 21 |
Commercial paper | ||
Components of our available-for-sale investments | ||
Debt securities | 383,420 | 367,488 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Losses | (21) | |
Unrealized Gains Losses, Net | (21) | |
Corporate securities | ||
Components of our available-for-sale investments | ||
Debt securities | 424,221 | 805,259 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 188 | 91 |
Unrealized Losses | (9) | (899) |
Unrealized Gains Losses, Net | 179 | (808) |
Other | ||
Components of our available-for-sale investments | ||
Debt securities | 6,082 | 6,550 |
Unrealized Gains (Losses) on Marketable Investment Securities | ||
Unrealized Gains | 56 | 56 |
Unrealized Losses | (8) | (2) |
Unrealized Gains Losses, Net | $ 48 | $ 54 |
Marketable Investment Securit_6
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, 2019 | Dec. 31, 2018 |
Fair value of marketable securities | ||
Debt securities | $ 872,878 | $ 1,246,120 |
Equity security | 2,894 | 2,370 |
US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 59,155 | 66,823 |
Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 383,420 | 367,488 |
Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 424,221 | 805,259 |
Other | ||
Fair value of marketable securities | ||
Debt securities | 6,082 | 6,550 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 1,540,361 | 859,220 |
Equity security | 2,894 | 2,370 |
Total | 875,772 | 1,248,490 |
Fair value measurements on recurring basis | US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 59,155 | 66,823 |
Fair value measurements on recurring basis | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 383,420 | 367,488 |
Fair value measurements on recurring basis | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 424,221 | 805,259 |
Fair value measurements on recurring basis | Other | ||
Fair value of marketable securities | ||
Debt securities | 6,082 | 6,550 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 261,843 | 30,858 |
Equity security | 2,894 | 2,370 |
Total | 62,049 | 69,193 |
Fair value measurements on recurring basis | Level 1 | US Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 59,155 | 66,823 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash Equivalents (including restricted) | 1,278,518 | 828,362 |
Total | 813,538 | 1,179,104 |
Fair value measurements on recurring basis | Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 383,420 | 367,488 |
Fair value measurements on recurring basis | Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 424,221 | 805,259 |
Fair value measurements on recurring basis | Level 2 | Other | ||
Fair value of marketable securities | ||
Debt securities | 5,897 | 6,357 |
Fair value measurements on recurring basis | Level 3 | ||
Fair value of marketable securities | ||
Total | 185 | 193 |
Fair value measurements on recurring basis | Level 3 | Other | ||
Fair value of marketable securities | ||
Debt securities | $ 185 | $ 193 |
Marketable Investment Securit_7
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Changes in Level 3 Instruments (Details) | Mar. 31, 2019USD ($) |
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 Securit_8
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Other Income Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other Income (Expense) | ||
Marketable investment securities - realized and unrealized gains (losses) on equity securities | $ 3,056 | $ (36,543) |
Costs related to early redemption of debt | (439) | (179) |
Equity in earnings of affiliates | (1,065) | 1,446 |
Other | 7,536 | 468 |
Total | 9,088 | $ (34,808) |
Unrealized losses on equity securities | $ 2,000 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory | ||
Finished goods | $ 242,363 | $ 215,186 |
Work-in-process and service repairs | 49,939 | 56,871 |
Raw materials | 16,949 | 18,676 |
Total inventory | $ 309,251 | $ 290,733 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | ||
Property and equipment | |||
Total property and equipment | $ 5,308,778 | $ 5,688,678 | |
Accumulated depreciation | (3,445,611) | (3,760,498) | |
Property and equipment, net | 1,863,167 | 1,928,180 | |
Equipment leased to customers | |||
Property and equipment | |||
Total property and equipment | $ 1,940,528 | 2,016,965 | |
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 | [1] | $ 66,071 | 100,000 |
Depreciable Life | [1] | 14 years 3 months | |
Satellites acquired under finance lease agreements | |||
Property and equipment | |||
Total property and equipment | [2] | $ 223,423 | 499,819 |
Satellites acquired under finance lease agreements | Minimum | |||
Property and equipment | |||
Depreciable Life | [2] | 10 years | |
Satellites acquired under finance lease agreements | Maximum | |||
Property and equipment | |||
Depreciable Life | [2] | 15 years | |
Furniture, fixtures, equipment and other | |||
Property and equipment | |||
Total property and equipment | $ 1,910,150 | 1,923,585 | |
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 | $ 285,321 | 290,650 | |
Buildings and improvements | Minimum | |||
Property and equipment | |||
Depreciable Life | 4 years | ||
Buildings and improvements | Maximum | |||
Property and equipment | |||
Depreciable Life | 40 years | ||
Land | |||
Property and equipment | |||
Total property and equipment | $ 13,186 | 13,186 | |
Construction in progress | |||
Property and equipment | |||
Total property and equipment | $ 126,186 | $ 100,560 | |
[1] | DepreciableAs ofLifeMarch 31, December 31, (In Years) 2019 2018(In thousands)Equipment leased to customers 2-5$ 1,940,528$ 2,016,965EchoStar XV15 277,658 277,658EchoStar XVIII15 411,255 411,255D1N/A 55,000 55,000T1 (1)14 66,071 100,000Satellites acquired under finance lease agreements (2) 10-15 223,423 499,819Furniture, fixtures, equipment and other 2-10 1,910,150 1,923,585Buildings and improvements 4-40 285,321 290,650Land — 13,186 13,186Construction in progress — 126,186 100,560Total property and equipment 5,308,778 5,688,678Accumulated depreciation (3,445,611) (3,760,498)Property and equipment, net$ 1,863,167$ 1,928,180See Note 5 for further information on the transaction with TSI. | ||
[2] | The Ciel II satellite was previously classified as a finance lease, however, as a result of an amendment, which was effective during the first quarter 2019, Ciel II is now accounted for as an operating lease. |
Property and Equipment - Deprec
Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation and amortization expense | ||
Depreciation and amortization expense | $ 153,139 | $ 192,972 |
Equipment leased to customers | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 109,154 | 110,521 |
Satellites | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | 20,479 | 25,086 |
Buildings, furniture, fixtures, equipment and other | ||
Depreciation and amortization expense | ||
Depreciation and amortization expense | $ 23,506 | $ 57,365 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019item | |
EchoStar XV | |
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 | 11 |
Owned Satellites | 2 |
Number of satellites utilized under operating lease | 7 |
Number of satellites utilized under capital lease | 2 |
EchoStar XVI | |
Property and equipment | |
Term of renewal option | 5 years |
EchoStar XVIII | |
Property and equipment | |
Estimated Useful Life | 15 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 81,070 |
Short-term lease cost | 2,484 |
Amortization of right-of-use assets | 6,108 |
Interest on lease liabilities | 1,181 |
Total finance lease cost | 7,289 |
Total lease costs | $ 90,843 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 81,346 |
Operating cash flows from finance leases | 1,195 |
Financing cash flows from finance leases | 6,055 |
Operating leases | 62,150 |
Right-of-use assets and liabilities recognized upon adoption of ASC 842 | $ 733,584 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 725,605 | |
Other current liabilities | 237,533 | |
Operating lease liabilities | 491,842 | |
Total | 729,375 | |
Property and equipment, gross | 5,308,778 | $ 5,688,678 |
Accumulated depreciation | (3,445,611) | (3,760,498) |
Property and equipment, net | 1,863,167 | 1,928,180 |
Other current liabilities | 18,349 | |
Other long-term liabilities | 42,403 | |
Total | $ 60,752 | $ 66,984 |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 8 months 12 days | |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 1 month 6 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 9.30% | |
Finance Lease, Weighted Average Discount Rate, Percent | 7.50% | |
Property and equipment | ||
Lessee, Lease, Description [Line Items] | ||
Property and equipment, gross | $ 224,454 | |
Accumulated depreciation | (178,848) | |
Property and equipment, net | $ 45,606 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Maturities of lease liabilities: Operating lease | ||
2019 (remaining nine months) | $ 227,988 | |
2020 | 236,511 | |
2021 | 195,840 | |
2022 | 126,628 | |
2023 | 24,628 | |
Thereafter | 51,556 | |
Total lease payments | 863,151 | |
Less: Imputed interest | (133,776) | |
Total | 729,375 | |
Less: Current portion | (237,533) | |
Long-term portion of lease obligations | 491,842 | |
Maturities of lease liabilities: Finance lease | ||
2019 (remaining nine months) | 16,740 | |
2020 | 22,024 | |
2021 | 22,026 | |
2022 | 7,364 | |
Total lease payments | 68,154 | |
Less: Imputed interest | (7,402) | |
Total | 60,752 | $ 66,984 |
Less: Current portion | (18,349) | |
Long-term portion of lease obligations | 42,403 | |
Future minimum payments for total lease liabilities | ||
2019 (remaining nine months) | 244,728 | |
2020 | 258,535 | |
2021 | 217,866 | |
2022 | 133,992 | |
2023 | 24,628 | |
Thereafter | 51,556 | |
Total lease payments | 931,305 | |
Less: Imputed interest | (141,178) | |
Total | 790,127 | |
Less: Current portion | (255,882) | |
Long-term portion of lease obligations | $ 534,245 |
Long-Term Debt and Capital Le_3
Long-Term Debt and Capital Lease Obligations - Fair Value of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument | ||
Carrying Value | $ 15,926,239 | $ 15,957,087 |
Fair Value | 14,633,543 | 14,032,065 |
Unamortized debt discount on the Convertible Notes | (810,023) | (833,906) |
Unamortized deferred financing costs and other debt discounts, net | (35,136) | (37,388) |
Finance lease obligations | 60,752 | 66,984 |
Total long-term debt and capital lease obligations (including current portion) | 15,141,832 | 15,152,777 |
7 7/8% Senior Notes due 2019 | ||
Debt Instrument | ||
Carrying Value | 1,295,007 | 1,317,372 |
Fair Value | $ 1,317,501 | 1,343,298 |
Interest rate (as a percent) | 7.875% | |
Debt repurchased | $ 22,000 | 83,000 |
Outstanding debt | 1,295,000 | |
5 1/8% Senior Notes due 2020 | ||
Debt Instrument | ||
Carrying Value | 1,100,000 | 1,100,000 |
Fair Value | $ 1,110,670 | $ 1,089,957 |
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 | $ 2,064,620 | $ 1,974,940 |
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 | $ 1,941,280 | $ 1,833,140 |
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 | $ 1,359,270 | $ 1,247,445 |
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 | $ 1,693,000 | $ 1,611,960 |
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 | $ 822,950 | $ 801,200 |
Interest rate (as a percent) | 2.375% | 2.375% |
7 3/4% Senior Notes due 2026 | ||
Debt Instrument | ||
Carrying Value | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 1,748,960 | $ 1,653,720 |
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 | $ 2,544,060 | 2,436,690 |
Interest rate (as a percent) | 3.375% | |
Other notes payable | ||
Debt Instrument | ||
Carrying Value | $ 31,232 | 39,715 |
Fair Value | $ 31,232 | $ 39,715 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 07, 2018USD ($) | Jun. 06, 2018 | May 11, 2017USD ($) | Jul. 01, 2016USD ($) | Aug. 18, 2015USD ($) | Apr. 29, 2014USD ($)segment | Oct. 29, 2013 | Mar. 09, 2012USD ($) | Mar. 09, 2012 | Jan. 31, 2017 | Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($)item | Dec. 31, 2008USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Apr. 13, 2017USD ($)item |
Spectrum Investments | |||||||||||||||||
Expected expenditures for second phase of network deployment | $ 10,000 | $ 10,000 | |||||||||||||||
Payment to acquire certain wireless licenses and related assets | $ 11,000 | 21,000 | |||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Noncontrolling Interest in Variable Interest Entity | 10,000 | 10,000 | |||||||||||||||
Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Expected expenditures for wireless projects | 1,000 | 1,000 | |||||||||||||||
Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Expected expenditures for wireless projects | $ 500 | 500 | |||||||||||||||
MVDDS Licenses | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Number of geographical license areas | item | 82 | ||||||||||||||||
MVDDS Licenses | Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Number of geographical license areas | item | 214 | ||||||||||||||||
LMDS Licenses | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Number Of Markets | item | 4 | ||||||||||||||||
Wireless | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Payment to acquire certain wireless licenses and related assets | 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 | ||||||||||||||||
H Block Licenses | Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
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% | ||||||||||||||||
Prior Arrangement | Northstar Licenses | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Non-payment gross winning bids | $ 2,226 | 2,226 | |||||||||||||||
Northstar Spectrum And SNR Holdco | |||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Noncontrolling Interest in Variable Interest Entity | $ 10 | $ 10 | $ 10,000 | ||||||||||||||
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 | SNR Licenses | |||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Percentage of bidding credit | 25.00% | ||||||||||||||||
Northstar Spectrum And SNR Holdco | Prior Arrangement | SNR Licenses | |||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Number of licenses returned | item | 113 | ||||||||||||||||
Northstar Spectrum And SNR Holdco | Northstar Operative Agreement | American II | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Debt outstanding amount | $ 6,870 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interim payment percentage | 15.00% | ||||||||||||||||
Re-Auction payment | $ 1,892 | ||||||||||||||||
Overpayment Of Interim Payment | $ 334 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Preferred Class A | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Ownership percentage | 100.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Class B common stock | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Ownership percentage | 85.00% | ||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Manager LLC | |||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Equity contribution | 133 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | American II | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Loan made | $ 69 | ||||||||||||||||
Window of days for management to put its interest | 90 days | 30 days | |||||||||||||||
Additional days allowed for management to put its interest | 90 days | ||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Equity contribution | 7,621 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | American II | Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 12.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | American II | Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 8.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interim Payment | $ 334 | ||||||||||||||||
Interim payment percentage | 15.00% | ||||||||||||||||
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 | ||||||||||||||||
Bidding credit value | $ 1,961 | ||||||||||||||||
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% | ||||||||||||||||
Net winning bid | $ 5,884 | ||||||||||||||||
Number of licenses returned | item | 84 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement | American II | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Principal amount of debt | $ 500 | ||||||||||||||||
Loan balance maturity period | 10 years | 7 years | |||||||||||||||
Removal of consent for unsecured financing and equipment financing | $ 25 | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement | American II | Preferred Class A | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Number shares issued in conversion | 6,870,493 | ||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 12.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement | American II | Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Operative Agreement | American II | Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Re-Auction payment | $ 1,029 | ||||||||||||||||
Overpayment Of Interim Payment | $ 182 | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | Preferred Class A | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Ownership percentage | 100.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | Class B common stock | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Ownership percentage | 85.00% | ||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Controlling interest owned by other companies | 15.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 12.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Preferred stock quarterly distribution (as a percent) | 8.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Wireless Management LLC | |||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Equity contribution | $ 93 | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | American III | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Loan made | $ 344 | ||||||||||||||||
Debt outstanding amount | 5,065 | ||||||||||||||||
Principal amount of debt | 500 | ||||||||||||||||
Window of days for management to put its interest | 90 days | 30 days | |||||||||||||||
Additional days allowed for management to put its interest | 90 days | ||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Equity contribution | $ 5,590 | ||||||||||||||||
Gross winning bids | $ 4,271 | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | American III | Preferred Class A | |||||||||||||||||
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 | American III | Maximum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | American III | Minimum | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interest rate (as a percent) | 6.00% | 6.00% | |||||||||||||||
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 | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Non-payment gross winning bids | $ 1,211 | $ 1,211 | |||||||||||||||
SNR Wireless or SNR Wireless Holdco | AWS-3 Licenses | SNR Wireless Management LLC | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interim payment percentage | 15.00% | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Licenses | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Interim Payment | $ 182 | ||||||||||||||||
Non-payment gross winning bids | 1,211 | $ 1,211 | |||||||||||||||
Additional Bid Withdrawal Payment | $ 3 | ||||||||||||||||
Commitments relating to AWS-3 Auction | |||||||||||||||||
Bidding credit value | $ 1,370 | ||||||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Operative Agreement | American III | |||||||||||||||||
Spectrum Investments | |||||||||||||||||
Loan balance maturity period | 10 years | 7 years | |||||||||||||||
Removal of consent for unsecured financing and equipment financing | $ 25 | ||||||||||||||||
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 | 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 ($) | Oct. 06, 2017USD ($) | May 22, 2017$ / item | Sep. 23, 2016USD ($) | Sep. 22, 2016USD ($) | Aug. 18, 2015USD ($) | Dec. 23, 2013USD ($) | Dec. 31, 2016USD ($)item | Mar. 31, 2019USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Jun. 05, 2017USD ($) |
Turner Network Sales, Inc. | |||||||||||||
Loss contingency terms | |||||||||||||
Claim amount | $ 183,000,000 | ||||||||||||
Satellite transponder guarantees | |||||||||||||
Loss contingencies | |||||||||||||
Guarantees for payments | $ 37,000,000 | ||||||||||||
Litigation accrual | $ 0 | ||||||||||||
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 Spectrum And SNR Holdco | SNR Licenses | |||||||||||||
Loss contingency terms | |||||||||||||
Percentage Of Bidding Credit | 25.00% | ||||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | |||||||||||||
Loss contingency terms | |||||||||||||
Percentage Of Bidding Credit | 25.00% | ||||||||||||
Northstar Wireless or Northstar Spectrum | AWS-3 Licenses | Vermont National Telephone Company [Member] | |||||||||||||
Loss contingency terms | |||||||||||||
Percentage Of Bidding Credit | 25.00% | ||||||||||||
Recovery amount | $ 10,000,000,000 | ||||||||||||
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 | ||||||||||||
Northstar Wireless or Northstar Spectrum | Northstar Licenses | |||||||||||||
Loss contingency terms | |||||||||||||
Bidding Credit | $ 1,961,000,000 | ||||||||||||
SNR Wireless or SNR Wireless Holdco | SNR Licenses | |||||||||||||
Loss contingency terms | |||||||||||||
Bidding Credit | $ 1,370,000,000 | ||||||||||||
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 | ||||||||||||
Period barred from making outbound telemarketing calls | 2 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 | ||||||||||||
DISH Network L.L.C. | Telemarketing Litigation | |||||||||||||
Loss contingencies | |||||||||||||
Damages awarded to state and federal plaintiff | $ 280,000,000 | ||||||||||||
Litigation Expense | $ 255,000,000 | $ 25,000,000 | |||||||||||
DISH Network L.L.C. | Telemarketing Litigation | Other Accrued Expense | |||||||||||||
Loss contingencies | |||||||||||||
Litigation accrual | 280,000,000 | ||||||||||||
DISH Network L.L.C. | Do Not Call Litigation | |||||||||||||
Loss contingencies | |||||||||||||
Claim amount from state plaintiff | 23,500,000,000 | ||||||||||||
Loss contingency terms | |||||||||||||
Claim amount | $ 270,000,000 | ||||||||||||
DISH Network L.L.C. | Do Not Call 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, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment information | |||
Number of primary operating business units | segment | 2 | ||
Total assets | $ 31,686,377 | $ 30,587,012 | |
Revenues | 3,187,144 | $ 3,458,487 | |
Operating income (loss) | 456,300 | 529,506 | |
Pay-TV video and related revenue | |||
Segment information | |||
Revenues | 3,097,936 | 3,347,597 | |
Broadband revenue | |||
Segment information | |||
Revenues | 49,834 | 75,107 | |
Equipment sales and other revenue | |||
Segment information | |||
Revenues | 39,374 | 35,783 | |
United States | |||
Segment information | |||
Revenues | 3,176,253 | 3,449,016 | |
Canada And Mexico | |||
Segment information | |||
Revenues | 10,891 | 9,471 | |
Pay-TV | Operating segment | |||
Segment information | |||
Total assets | 30,002,686 | 28,981,608 | |
Revenues | 3,188,169 | 3,458,487 | |
Operating income (loss) | 457,369 | 539,302 | |
Wireless | Operating segment | |||
Segment information | |||
Total assets | 24,737,581 | 24,433,458 | |
Revenues | 3 | ||
Operating income (loss) | (1,069) | $ (9,796) | |
All Other and Eliminations | Other and Eliminations | |||
Segment information | |||
Total assets | (23,053,890) | $ (22,828,054) | |
Revenues | $ (1,028) |
Contract Balances - Valuation A
Contract Balances - Valuation And Qualifying Accounts Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Balances | |
Allowance for Doubtful Accounts Receivable, Beginning Balance | $ 16,966 |
Charged to Costs and Expenses | 18,496 |
Deductions | (16,495) |
Allowance for Doubtful Accounts Receivable, Ending Balance | $ 18,967 |
Contract Balances - Deferred Re
Contract Balances - Deferred Revenues (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Balances | |
Balance at Beginning of Period | $ 635,018 |
Recognition of unearned revenue | (1,597,470) |
Deferral of revenue | 1,589,358 |
Balance at End of Period | $ 626,906 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Aug. 19, 2016 | Oct. 02, 2012 | Mar. 31, 2017 | Jul. 31, 2016 | Dec. 21, 2012 | May 31, 2012 | Jan. 31, 2012item | Dec. 31, 2011USD ($) | Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Mar. 31, 2013item | Dec. 31, 2018USD ($) | Dec. 31, 2009item | Dec. 31, 2008item |
Related Party Transactions | ||||||||||||||
Trade accounts receivable | $ 581,685 | $ 639,855 | ||||||||||||
Trade accounts payable | 277,367 | 233,753 | ||||||||||||
Subscriber-related expenses | 193,899 | $ 196,011 | ||||||||||||
Satellite and transmission expenses | 139,501 | 153,644 | ||||||||||||
General and Administrative Expense | 198,914 | 169,777 | ||||||||||||
Noncontrolling interests | $ (1,335) | (1,499) | ||||||||||||
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 | ||||||||||||||
Term of renewal option | 1 year | |||||||||||||
Hughes Broadband Distribution Agreement | Minimum | ||||||||||||||
Related Party Transactions | ||||||||||||||
Term of renewal option | 180 days | |||||||||||||
EchoStar | ||||||||||||||
Related Party Transactions | ||||||||||||||
Trade accounts receivable | $ 3,000 | 4,000 | ||||||||||||
Trade accounts payable | 22,000 | $ 14,000 | ||||||||||||
Equipment sales and other revenue | 2,000 | 4,000 | ||||||||||||
Subscriber-related expenses | 7,000 | 13,000 | ||||||||||||
Satellite and transmission expenses | 73,000 | 85,000 | ||||||||||||
General and Administrative Expense | $ 5,000 | 5,000 | ||||||||||||
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 | 12 | |||||||||||||
Term of renewal option | 1 year | |||||||||||||
EchoStar | Gilbert Lease Agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Number of one year renewal options | item | 12 | |||||||||||||
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 | ||||||||||||||
Number of renewal options | item | 4 | |||||||||||||
Term of renewal option | 3 years | |||||||||||||
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 | |||||||||||||
EchoStar | 2012 TT&C Agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Number of one year renewal options | item | 4 | |||||||||||||
Extension of initial term | 1 year | |||||||||||||
Minimum required notice period for termination by the reporting entity | 12 months | |||||||||||||
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 | |||||||||||||
EchoStar | Tax Sharing Agreement | ||||||||||||||
Related Party Transactions | ||||||||||||||
Net amount of the allocated tax attributes payable | $ 84,000 | |||||||||||||
HNS | ||||||||||||||
Related Party Transactions | ||||||||||||||
Broadband equipment purchased from related parties | $ 5,000 | $ 10,000 | ||||||||||||
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 |
Related Party Transactions - Pa
Related Party Transactions - Part 2 (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Feb. 28, 2017 | |
NagraStar | ||||
Related Party Transactions | ||||
Ownership interest (as a percent) | 50.00% | |||
Purchases from related party | $ 14,359 | $ 16,843 | ||
Amounts payable to related party | 15,149 | $ 9,871 | ||
Commitments to related party | $ 3,110 | 3,888 | ||
Dish Mexico | ||||
Related Party Transactions | ||||
Ownership interest (as a percent) | 49.00% | |||
Amounts receivable from related party | $ 1,053 | $ 1,370 | ||
Dish Mexico | Digital Set-top Boxes And Related Accessories | ||||
Related Party Transactions | ||||
Revenue from related party | 280 | |||
Dish Mexico | Uplink Services | ||||
Related Party Transactions | ||||
Revenue from related party | $ 1,404 | $ 1,034 |