Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 01, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2022 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 333-31929 | |
Entity Registrant Name | DISH DBS Corporation | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 84-1328967 | |
Entity Address, Address Line One | 9601 South Meridian Boulevard | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 303 | |
Local Phone Number | 723-1000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,015 | |
Entity Central Index Key | 0001042642 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 495,539 | $ 1,373,591 |
Marketable investment securities | 59,960 | 1,670,739 |
Trade accounts receivable, net of allowance for credit losses of $30,890 and $32,861, respectively | 621,350 | 601,553 |
Inventory | 305,173 | 292,099 |
Other current assets | 167,257 | 270,417 |
Total current assets | 1,649,279 | 4,208,399 |
Noncurrent Assets: | ||
Restricted cash, cash equivalents and marketable investment securities | 53,142 | 55,027 |
Property and equipment, net | 1,041,140 | 1,233,180 |
FCC authorizations | 611,794 | 611,794 |
Other investment securities | 91,438 | 99,606 |
Operating lease assets | 166,059 | 220,089 |
Note receivable - DISH Network (Note 13) | 6,945,299 | 5,250,000 |
Interest receivable - DISH Network (Note 13) | 143,212 | 31,840 |
Other noncurrent assets, net | 124,946 | 152,747 |
Total noncurrent assets | 9,177,030 | 7,654,283 |
Total assets | 10,826,309 | 11,862,682 |
Current Liabilities: | ||
Trade accounts payable | 421,808 | 522,523 |
Deferred revenue and other | 534,892 | 602,521 |
Accrued programming | 1,296,468 | 1,376,770 |
Accrued interest | 227,106 | 239,571 |
Other accrued expenses | 567,068 | 588,201 |
Current portion of long-term debt and finance lease obligations (Note 8) | 1,539,858 | 2,042,641 |
Total current liabilities | 4,587,200 | 5,372,227 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and finance lease obligations, net of current portion (Note 8) | 11,772,237 | 13,294,988 |
Deferred tax liabilities | 380,159 | 469,418 |
Operating lease liabilities | 82,298 | 83,725 |
Long-term deferred revenue and other long-term liabilities | 191,465 | 197,147 |
Total long-term obligations, net of current portion | 12,426,159 | 14,045,278 |
Total liabilities | 17,013,359 | 19,417,505 |
Commitments and Contingencies (Note 9) | ||
Stockholder's Equity (Deficit): | ||
Common stock, $.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding | ||
Additional paid-in capital | 1,525,108 | 1,492,174 |
Accumulated other comprehensive income (loss) | (2,351) | (1,262) |
Accumulated earnings (deficit) | (7,709,807) | (9,045,735) |
Total stockholder's equity (deficit) | (6,187,050) | (7,554,823) |
Total liabilities and stockholder's equity (deficit) | $ 10,826,309 | $ 11,862,682 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Allowance for credit losses | $ 30,890 | $ 32,861 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 1,015 | 1,015 |
Common stock, shares outstanding | 1,015 | 1,015 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 3,048,315 | $ 3,176,289 | $ 9,302,740 | $ 9,550,696 |
Costs and Expenses (exclusive of depreciation): | ||||
Cost of services | 1,896,104 | 1,984,349 | 5,674,014 | 5,892,809 |
Cost of sales - equipment and other | 22,018 | 23,982 | 64,812 | 65,159 |
Selling, general and administrative expenses | 420,100 | 392,605 | 1,185,998 | 1,057,739 |
Depreciation and amortization | 87,312 | 109,919 | 272,646 | 336,552 |
Total costs and expenses | 2,425,534 | 2,510,855 | 7,197,470 | 7,352,259 |
Operating income (loss) | 622,781 | 665,434 | 2,105,270 | 2,198,437 |
Other Income (Expense): | ||||
Interest income | 112,919 | 943 | 323,320 | 2,751 |
Interest expense, net of amounts capitalized | (205,633) | (159,783) | (668,212) | (495,971) |
Other, net | 493 | 331 | 1,738 | (1,464) |
Total other income (expense) | (92,221) | (158,509) | (343,154) | (494,684) |
Income (loss) before income taxes | 530,560 | 506,925 | 1,762,116 | 1,703,753 |
Income tax (provision) benefit, net | (122,223) | (120,296) | (426,188) | (415,854) |
Net income (loss) | 408,337 | 386,629 | 1,335,928 | 1,287,899 |
Comprehensive Income (Loss): | ||||
Net income (loss) | 408,337 | 386,629 | 1,335,928 | 1,287,899 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (412) | (24) | (1,106) | (363) |
Unrealized holding gains (losses) on available-for-sale debt securities | 86 | (42) | 16 | (50) |
Deferred income tax (expense) benefit, net | (13) | 1 | ||
Total other comprehensive income (loss), net of tax | (339) | (66) | (1,089) | (413) |
Comprehensive income (loss) | 407,998 | 386,563 | 1,334,839 | 1,287,486 |
Service revenue | ||||
Revenue: | ||||
Total revenue | 3,018,484 | 3,151,144 | 9,220,562 | 9,465,241 |
Equipment sales and other revenue | ||||
Revenue: | ||||
Total revenue | $ 29,831 | $ 25,145 | $ 82,178 | $ 85,455 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) - USD ($) $ in Thousands | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Deficit) | Total |
Balance at Dec. 31, 2020 | $ 1,463,407 | $ (805) | $ (10,782,607) | $ (9,320,005) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 7,676 | 7,676 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | (2) | (2) | ||
Foreign currency translation | (195) | (195) | ||
Net income (loss) | 424,527 | 424,527 | ||
Balance at Mar. 31, 2021 | 1,471,083 | (1,002) | (10,358,080) | (8,887,999) |
Balance at Dec. 31, 2020 | 1,463,407 | (805) | (10,782,607) | (9,320,005) |
Increase (Decrease) in Stockholder's Equity | ||||
Net income (loss) | 1,287,899 | |||
Balance at Sep. 30, 2021 | 1,469,482 | (1,218) | (9,494,708) | (8,026,444) |
Balance at Mar. 31, 2021 | 1,471,083 | (1,002) | (10,358,080) | (8,887,999) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | (8,344) | (8,344) | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | (6) | (6) | ||
Foreign currency translation | (144) | (144) | ||
Net income (loss) | 476,743 | 476,743 | ||
Balance at Jun. 30, 2021 | 1,462,739 | (1,152) | (9,881,337) | (8,419,750) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 6,743 | 6,743 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | (42) | (42) | ||
Foreign currency translation | (24) | (24) | ||
Net income (loss) | 386,629 | 386,629 | ||
Balance at Sep. 30, 2021 | 1,469,482 | (1,218) | (9,494,708) | (8,026,444) |
Balance at Dec. 31, 2021 | 1,492,174 | (1,262) | (9,045,735) | (7,554,823) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 8,383 | 8,383 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | (76) | (76) | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | 21 | 21 | ||
Foreign currency translation | (187) | (187) | ||
Net income (loss) | 444,411 | 444,411 | ||
Other | 13 | 13 | ||
Balance at Mar. 31, 2022 | 1,500,570 | (1,504) | (8,601,324) | (7,102,258) |
Balance at Dec. 31, 2021 | 1,492,174 | (1,262) | (9,045,735) | (7,554,823) |
Increase (Decrease) in Stockholder's Equity | ||||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | 1 | |||
Net income (loss) | 1,335,928 | |||
Balance at Sep. 30, 2022 | 1,525,108 | (2,351) | (7,709,807) | (6,187,050) |
Balance at Mar. 31, 2022 | 1,500,570 | (1,504) | (8,601,324) | (7,102,258) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 7,888 | 7,888 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | 6 | 6 | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (7) | (7) | ||
Foreign currency translation | (507) | (507) | ||
Net income (loss) | 483,180 | 483,180 | ||
Other | (13) | (13) | ||
Balance at Jun. 30, 2022 | 1,508,445 | (2,012) | (8,118,144) | (6,611,711) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 16,663 | 16,663 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | 86 | 86 | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (13) | (13) | ||
Foreign currency translation | (412) | (412) | ||
Net income (loss) | 408,337 | 408,337 | ||
Balance at Sep. 30, 2022 | $ 1,525,108 | $ (2,351) | $ (7,709,807) | $ (6,187,050) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 1,335,928 | $ 1,287,899 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 272,646 | 336,552 |
Realized and unrealized losses (gains) on investments and other | 1,149 | 3,587 |
Non-cash, stock-based compensation expense (benefit) | 32,934 | 6,075 |
Deferred tax expense (benefit) | (89,258) | (18,664) |
Changes in allowance for credit losses | (1,971) | (7,233) |
Non-cash interest income - DISH Network | (306,671) | |
Other, net | 36,492 | 25,657 |
Changes in current assets and current liabilities, net | (156,593) | 96,750 |
Net cash flows from operating activities | 1,124,656 | 1,730,623 |
Cash Flows From Investing Activities: | ||
(Purchases) Sales and maturities of marketable investment securities, net | 1,610,795 | (1,243,527) |
Purchases of property and equipment | (87,045) | (119,435) |
Notes receivable - DISH Network | (1,500,000) | |
Other, net | 3,817 | 11,079 |
Net cash flows from investing activities | 27,567 | (1,351,883) |
Cash Flows From Financing Activities: | ||
Repayment of long-term debt and finance lease obligations | (31,022) | (38,188) |
Redemption and repurchases of senior notes | (2,000,000) | (2,000,000) |
Proceeds from issuance of senior notes | 1,500,000 | |
Early debt extinguishment costs | (1,138) | (3,368) |
Debt issuance costs | (9,819) | |
Net cash flows from financing activities | (2,032,160) | (551,375) |
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | (879,937) | (172,635) |
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period (Note 4) | 1,428,618 | 1,296,732 |
Cash, cash equivalents, restricted cash and cash equivalents, end of period (Note 4) | $ 548,681 | $ 1,124,097 |
Organization and Business Activ
Organization and Business Activities | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Business Activities | |
Organization and Business Activities | 1. Organization and Business Activities Principal Business DISH DBS Corporation (which together with its subsidiaries is referred to as “DISH DBS,” the “Company,” “we,” “us” and/or “our,” unless otherwise required by the context) is a holding company and an indirect, wholly-owned subsidiary of DISH Network Corporation (“DISH Network”). DISH DBS was formed under Colorado law in January 1996 and its common stock is held by DISH Orbital Corporation (“DOC”), a direct subsidiary of DISH Network. Our subsidiaries operate one business segment, Pay-TV. Pay-TV We offer pay-TV services under the DISH ® ® brand (collectively “Pay-TV” services). The DISH branded pay-TV service consists of, among other things, Federal Communications Commission (“FCC”) licenses authorizing us to use direct broadcast satellite (“DBS”) and Fixed Satellite Service (“FSS”) spectrum, our owned and leased satellites, receiver systems, broadcast operations, a leased fiber optic network, in-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. The SLING branded pay-TV services consist of, among other things, multichannel, live-linear and on-demand streaming over-the-top (“OTT”) Internet-based domestic, international and Latino video programming services (“SLING TV”). As of September 30, 2022, we had |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021. 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. 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. 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 credit losses, 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 DISH Network’s stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, relative standalone selling prices of performance obligations, finance leases, asset impairments, estimates of future cash flows used to evaluate and recognize impairments, useful lives of property, equipment and intangible assets, incremental borrowing rate (“IBR”) on lease right of use assets, nonrefundable upfront fees, 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. 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; and quoted prices for identical or similar instruments in markets that are not active; 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 September 30, 2022 and December 31, 2021, the carrying amount for cash and cash equivalents, trade accounts receivable (net of allowance for credit losses) 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 4 for the fair value of our marketable investment securities. Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are based on, among other things, available trade information, and/or an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 8 for the fair value of our long-term debt. 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 exceeding one year . During the three months ended September 30, 2022 and 2021, we capitalized $24 million and $32 million, respectively, under these programs. The amortization expense related to these programs was $37 million and $41 million for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, we capitalized $68 million and $93 million, respectively, under these programs. The amortization expense related to these programs was $118 million and $116 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, we had a total of $248 million and $298 million, respectively, capitalized, net of amortization, 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 “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Advertising Costs We recognize advertising expense when incurred as a component of “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Advertising expenses totaled million for the three months ended September 30, 2022 and 2021, respectively. Advertising expenses totaled Research and Development Research and development costs are expensed as incurred and are included as a component of “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Research and development costs totaled million for the three months ended September 30, 2022 and 2021, respectively. Research and development costs totaled New Accounting Pronouncements We do not expect that any recently issued accounting pronouncements will have a material effect on our condensed consolidated financial statements. |
Supplemental Data - Statements
Supplemental Data - Statements of Cash Flows | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Data - Statements of Cash Flows | |
Supplemental Data - Statements of Cash Flows | 3. Supplemental Data - Statements of Cash Flows The following table presents certain supplemental cash flow and other non-cash data. See Note 7 for supplemental cash flow and non-cash data related to leases. For the Nine Months Ended September 30, 2022 2021 (In thousands) Cash paid for interest $ 657,039 $ 538,050 Cash received for interest 13,456 2,751 Cash paid for income taxes 27,395 33,287 Cash paid for income taxes to DISH Network 489,819 409,364 Our parent, DISH Network, provides a centralized system for the management of our cash and marketable investment securities as it does for all of its subsidiaries to, among other reasons, maximize yield of the portfolio. As a result, the cash and marketable investment securities included on our Condensed Consolidated Balance Sheets are a component or portion of the overall cash and marketable investment securities portfolio included on DISH Network’s Condensed Consolidated Balance Sheets and are managed by DISH Network. We are reflecting the purchases and sales of marketable investment securities on a net basis for each period presented on our Condensed Consolidated Statements of Cash Flows as we believe the net presentation is more meaningful to our cash flows from investing activities. |
Marketable Investment Securitie
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | 4. 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 September 30, December 31, 2022 2021 (In thousands) Marketable investment securities: Current marketable investment securities $ 59,960 $ 1,670,739 Restricted cash and cash equivalents (1) 53,142 55,027 Other investment securities: Other investment securities 91,438 99,606 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 204,540 $ 1,825,372 (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 may consist of debt and equity instruments. 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 and are recorded at fair value. We report the temporary unrealized gains and losses related to changes in market conditions of marketable debt securities as a separate component of “Accumulated other comprehensive income (loss)” within “Total stockholder’s equity (deficit),” net of related deferred income tax on our Condensed Consolidated Balance Sheets. The corresponding changes in the fair value of marketable debt securities, which are determined to be company specific credit losses are recorded in “Other, net” within “Other Income (Expense)” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Current Marketable Investment Securities Our current marketable investment securities portfolio can include 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 September 30, 2022 and December 31, 2021, our restricted marketable investment securities, together with our restricted cash and cash equivalents, included amounts required as collateral for our letters of credit and trusts. 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. We own a 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, 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. Our ability to realize value from our strategic investments in securities that are not publicly traded depends on, among other things, 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. Fair Value Measurements Our investments measured at fair value on a recurring basis were as follows: As of September 30, 2022 December 31, 2021 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 518,286 $ 88,670 $ 429,616 $ — $ 1,404,505 $ 60,085 $ 1,344,420 $ — Debt securities (including restricted): Commercial paper $ 20,236 $ — $ 20,236 $ — $ 1,413,134 $ — $ 1,413,134 $ — Corporate securities 39,425 — 39,425 — 254,631 — 254,631 — Other 299 — 299 — 2,974 — 2,974 — Total $ 59,960 $ — $ 59,960 $ — $ 1,670,739 $ — $ 1,670,739 $ — As of September 30, 2022, restricted and non-restricted marketable investment securities included debt securities of $60 million with contractual maturities within one year. Actual maturities may differ from contractual maturities as a result of our ability to sell these securities prior to maturity. Gains and Losses on Sales and Changes in Carrying Amounts of Investments and Other “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 For the Nine Months Ended September 30, September 30, Other, net: 2022 2021 2022 2021 (In thousands) Costs related to early redemption of debt $ — $ — $ (1,149) $ (3,587) Equity in earnings (losses) of affiliates (143) 368 1,818 1,931 Other 636 (37) 1,069 192 Total $ 493 $ 331 $ 1,738 $ (1,464) |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory | |
Inventory | 5. Inventory Inventory consisted of the following: As of September 30, December 31, 2022 2021 (In thousands) Finished goods $ 255,088 $ 246,723 Work-in-process and service repairs 15,790 19,074 Raw materials 34,295 26,302 Total inventory $ 305,173 $ 292,099 |
Property and Equipment and Inta
Property and Equipment and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment and Intangible Assets | |
Property and Equipment | 6. Property and Equipment Property and equipment consisted of the following: Depreciable As of Life September 30, December 31, (In Years) 2022 2021 (In thousands) Equipment leased to customers 2 - 5 $ 1,356,774 $ 1,518,880 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 Satellites acquired under finance lease agreements 15 174,685 398,107 Furniture, fixtures, equipment and other 2 - 10 1,903,408 1,882,610 Buildings and improvements 5 - 40 294,885 292,840 Land - 12,505 12,505 Construction in progress - 32,818 37,339 Total property and equipment 4,463,988 4,831,194 Accumulated depreciation (3,422,848) (3,598,014) Property and equipment, net $ 1,041,140 $ 1,233,180 Depreciation and amortization expense consisted of the following: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Equipment leased to customers $ 47,737 $ 60,616 $ 148,750 $ 188,405 Satellites 20,073 23,797 63,942 71,390 Buildings, furniture, fixtures, equipment and other 19,502 25,506 59,954 76,757 Total depreciation and amortization $ 87,312 $ 109,919 $ 272,646 $ 336,552 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. Satellites Pay-TV Satellites. We currently utilize of which we own and depreciate over their estimated useful life. We currently utilize certain capacity on satellite that we lease from EchoStar, which are accounted for as operating leases, except for Nimiq 5 which is accounted for as a finance lease and is depreciated over its economic life. We also lease satellites from third parties: Ciel II, which is accounted for as an operating lease and the Anik F3 satellite, which was accounted for as a finance lease until April 2022 and was fully depreciated. During April 2022, we extended the Anik F3 lease and as a result it is currently accounted for as an operating lease. As of September 30, 2022, our Pay-TV satellite fleet consisted of the following: Degree Launch Orbital Lease Satellites Date Location Termination Date Owned: EchoStar XV July 2010 61.5 N/A EchoStar XVIII June 2016 61.5 N/A Leased from EchoStar: EchoStar IX August 2003 121 Month to month Leased from DISH Network (1): EchoStar X February 2006 110 February 2023 EchoStar XI July 2008 110 September 2023 EchoStar XIV March 2010 119 February 2023 EchoStar XVI November 2012 61.5 January 2023 Nimiq 5 September 2009 72.7 September 2023 Leased from Other Third Party: Anik F3 (2) April 2007 118.7 April 2025 Ciel II December 2008 129 July 2023 (1) See Note 13 for further information on our Related Party Transactions with DISH Network. (2) During April 2022, we extended the Anik F3 satellite lease for an additional two years with an option to renew for one additional year to April 2025. In addition, EchoStar XXIII, which is owned by DISH Network, is anticipated to be ready for commercial operation at the 110 degree orbital location as early as the fourth quarter of 2022. We expect this satellite will be leased from DISH Network to replace EchoStar XI, which will become an in-orbit spare at that time. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 7. Leases We enter into operating and finance leases for, among other things, satellites, office space, warehouses and distribution centers, vehicles, and other equipment. Our leases have remaining lease terms from one to ten years , some of which include renewal options , and some of which include options to terminate the leases within one year . During the fourth quarter of 2021, our QuetzSat 1 operating lease expired. Through the first quarter of 2022, our Anik F3 and Nimiq 5 satellites were accounted for as finance leases. However, d Substantially all 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 For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Operating lease cost (1) $ 42,585 $ 57,282 $ 124,187 $ 174,987 Short-term lease cost (1)(2) 16,143 6,609 58,132 17,445 Finance lease cost: Amortization of right-of-use assets (3) 8,619 12,374 29,703 37,122 Interest on lease liabilities (3) 2,009 3,138 6,777 10,282 Total finance lease cost (3) 10,628 15,512 36,480 47,404 Total lease costs $ 69,356 $ 79,403 $ 218,799 $ 239,836 (1) The decrease in operating lease cost primarily related to the QuetzSat-1 lease, which expired in November 2021. In addition, our EchoStar XI and EchoStar X satellites were reclassified to “Short-term lease costs.” (2) Leases that have terms of 12 months or less. (3) The decrease in finance lease cost is primarily related to the Anik F3 finance lease which was extended in April 2022 and as a result is currently accounted for as an operating lease. Supplemental cash flow information related to leases was as follows: For the Nine Months Ended September 30, 2022 2021 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 122,987 $ 171,678 Operating cash flows from finance leases $ 6,735 $ 10,035 Financing cash flows from finance leases $ 31,022 $ 38,188 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 70,115 $ 19,377 Finance leases $ — $ — Supplemental balance sheet information related to leases was as follows: As of September 30, December 31, 2022 2021 (In thousands) Operating Leases: Operating lease assets $ 166,059 $ 220,089 Other current liabilities $ 88,088 $ 139,492 Operating lease liabilities 82,298 83,725 Total operating lease liabilities $ 170,386 $ 223,217 Finance Leases: Property and equipment, gross $ 175,704 $ 399,126 Accumulated depreciation (106,850) (300,569) Property and equipment, net $ 68,854 $ 98,557 Other current liabilities $ 37,175 $ 39,957 Other long-term liabilities 40,967 69,207 Total finance lease liabilities $ 78,142 $ 109,164 Weighted Average Remaining Lease Term: Operating leases 3.3 years 3.0 years Finance leases 2.0 years 2.6 years Weighted Average Discount Rate: Operating leases 7.4% 8.2% Finance leases 10.0% 9.9% Maturities of lease liabilities as of September 30, 2022 were as follows: Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2022 (remaining three months) $ 41,576 $ 10,723 $ 52,299 2023 65,189 42,950 108,139 2024 31,578 32,147 63,725 2025 17,168 — 17,168 2026 10,711 — 10,711 Thereafter 30,036 — 30,036 Total lease payments 196,258 85,820 282,078 Less: Imputed interest (25,872) (7,678) (33,550) Total 170,386 78,142 248,528 Less: Current portion (88,088) (37,175) (125,263) Long-term portion of lease obligations $ 82,298 $ 40,967 $ 123,265 |
Long-Term Debt and Finance Leas
Long-Term Debt and Finance Lease Obligations | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt and Finance Lease Obligations | |
Long-Term Debt and Finance Lease Obligations | 8. 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 September 30, 2022 and December 31, 2021: As of September 30, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) 5 7/8% Senior Notes due 2022 (1) $ — $ — $ 2,000,000 $ 2,039,700 5% Senior Notes due 2023 (2) 1,500,000 1,474,080 1,500,000 1,541,670 5 7/8% Senior Notes due 2024 2,000,000 1,789,840 2,000,000 2,060,180 7 3/4% Senior Notes due 2026 2,000,000 1,538,100 2,000,000 2,122,700 5 1/4% Senior Secured Notes due 2026 (3) 2,750,000 2,279,503 2,750,000 2,792,900 7 3/8% Senior Notes due 2028 1,000,000 677,730 1,000,000 1,017,060 5 3/4% Senior Secured Notes due 2028 (3) 2,500,000 1,906,050 2,500,000 2,520,650 5 1/8% Senior Notes due 2029 1,500,000 891,195 1,500,000 1,365,645 Other notes payable 21,012 21,012 21,012 21,012 Subtotal 13,271,012 $ 10,577,510 15,271,012 $ 15,481,517 Unamortized deferred financing costs and debt discounts, net (37,059) (42,547) Finance lease obligations (4) 78,142 109,164 Total long-term debt and finance lease obligations (including current portion) $ 13,312,095 $ 15,337,629 (1) As of July 15, 2022, we had repurchased or redeemed the principal balance of our 5 7/8% Senior Notes due 2022. (2) Our 5% Senior Notes due 2023 mature on March 15, 2023 and have been reclassified to “Current portion of long-term debt and finance lease obligations” on our Condensed Consolidated Balance Sheets as of September 30, 2022. (3) The net proceeds from the offering of our Senior Secured Notes (defined herein) were used to make an intercompany loan to DISH Network pursuant to a Loan and Security Agreement dated November 26, 2021 (together with potential future advances to DISH Network, the “Intercompany Loan”) between us and DISH Network in order to finance the purchase of wireless spectrum licenses and for general corporate purposes, including the buildout of wireless infrastructure. See Note 13 Related Party Transactions for further information. (4) 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). Future Liquidity We have made cash distributions and the Intercompany Loan to partially finance the development of DISH Network’s 5G Network Deployment, including, but not limited to, the purchase of wireless spectrum licenses and the retail wireless business to date, and we may make additional funds available to DISH Network in the form of cash distributions or loans to finance, in whole or in part, DISH Network’s future efforts. These factors, including, but not limited to, debt maturities, continuing investment in our business, financing acquisitions and other strategic transactions, require us to raise additional capital in the future which may not be available on acceptable terms, or at all. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Commitments Future maturities of our long-term debt, finance lease and contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 have not changed materially, other than those disclosed below. “Other long-term obligations” totaled $5.816 billion as of September 30, 2022 and $2.520 billion as of December 31, 2021, an increase of $3.296 billion as of September 30, 2022. contractual commitments, including, but not limited to, certain minimum commitments resulting from the amendment to the MNSA with T-Mobile and a long-term agreement with Samsung. These totals could increase as DISH Network continues its 5G Network Deployment. For the Years Ending December 31, Other Long-Term Obligations (1) (In thousands) 2022 (remaining three months) $ 1,091,839 2023 1,999,047 2024 1,228,884 2025 713,719 2026 657,673 Thereafter 125,084 Total $ 5,816,246 (1) Represents minimum contractual commitments related to certain 5G Network Deployment commitments, obligations under the MNSA with T-Mobile, radios, software and integration services and satellite related and other obligations. In certain circumstances the dates on which we are obligated to make these payments could be delayed. Our commitments include certain obligations incurred by us on behalf of DISH Network’s Wireless segment. These obligations will be either paid directly by DISH Network or settled monthly as part of our centralized cash management system with our parent, DISH Network. See Note 3 for further information. DISH Network’s 5G Network Deployment DISH Network has invested a total of over $30 billion in wireless spectrum licenses, which includes over $10 billion in non-controlling investments in certain entities. DISH Network Spectrum DISH Network has invested a total of over $30 billion to acquire certain wireless spectrum licenses. DISH Network’s wireless spectrum licenses are subject to certain interim and final build-out requirements, as well as certain renewal requirements. DISH Network plans to commercialize its wireless spectrum licenses through the completion of the nation’s first cloud-native, Open Radio Access Network (“O-RAN”) based 5G network (the “5G Network Deployment”). , . DISH Network will need to make significant additional investments or partner with others to, among other things, complete its 5G Network Deployment and further commercialize, build-out and integrate these licenses and related assets and any additional acquired licenses and related assets, as well as to comply with regulations applicable to such licenses. Depending on the nature and scope of such activities, any such investments or partnerships could vary significantly. In addition, as DISH Network completes its 5G Network Deployment, DISH Network has and will continue to incur significant additional expenses related to, among other things, research and development, wireless testing and ongoing upgrades to the wireless network infrastructure, and third party integration. DISH Network may also determine that additional wireless spectrum licenses may be required to complete its 5G Network Deployment and to compete with other wireless service providers. In connection with the development of DISH Network’s wireless business, including, without limitation, the efforts described above, we have made cash distributions and the Intercompany Loan to partially finance these efforts to date and may make additional cash distributions or loans to finance, in whole or in part, DISH Network’s future efforts. There can be no assurance that DISH Network will be able to develop and implement a business model that will realize a return on these wireless spectrum licenses or that DISH Network will be able to profitably deploy the assets represented by these wireless spectrum licenses. Agreements in Connection with the Asset Purchase Agreement On July 1, 2020, DISH Network completed the Boost Mobile Acquisition. In connection with the closing of the Boost Mobile Acquisition, DISH Network and T-Mobile entered into the TSA, the MNSA, the Option Agreement, and the Spectrum Purchase Agreement for approximately billion (as detailed in DISH Network’s Annual Report on Form 10-K for the year ended December 31, 2021). million per the Spectrum Purchase Agreement under certain circumstances. The included in “Other long-term obligations” above. DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3 Wireless Spectrum Licenses During 2015, through its wholly-owned subsidiaries American AWS-3 Wireless II L.L.C. (“American II”) and American AWS-3 Wireless III L.L.C. (“American III”), DISH Network initially made over $10 billion in certain non-controlling investments in Northstar Spectrum, LLC (“Northstar Spectrum”), the parent company of Northstar Wireless, LLC (“Northstar Wireless,” and collectively with Northstar Spectrum, the “Northstar Entities”), and in SNR Wireless HoldCo, LLC (“SNR HoldCo”), the parent company of SNR Wireless LicenseCo, LLC (“SNR Wireless,” and collectively with SNR HoldCo, the “SNR Entities”), respectively. On October 27, 2015, the FCC granted certain AWS-3 wireless spectrum licenses (the “AWS-3 Licenses”) to Northstar Wireless (the “Northstar Licenses”) and to SNR Wireless (the “SNR Licenses”), respectively. 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 DISH Network, so that the Northstar Entities and the SNR Entities may commercialize, build-out and integrate these AWS-3 Licenses, comply with regulations applicable to such AWS-3 Licenses, and make any potential payments related to the re-auction of AWS-3 licenses retained by the FCC. Depending upon the nature and scope of such commercialization, build-out, integration efforts, regulatory compliance, and potential re-auction payments, any such loans, equity contributions or partnerships could vary significantly. For further information regarding the potential re-auction of AWS-3 licenses retained by the FCC, see Note 10 “ Commitments and Contingencies – Commitments – DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3 Wireless Spectrum Licenses” We have made and may make additional cash distributions and loans to DISH Network so that DISH Network may fund the Northstar Entities and the SNR Entities related to DISH Network’s non-controlling investments in these entities. There can be no assurance that DISH Network will be able to obtain a profitable return on its non-controlling investments in the Northstar Entities and the SNR Entities. We may need to raise significant additional capital in the future, which may not be available on favorable terms, to among other things, continue investing in our business and to pursue acquisitions and other strategic transactions. See Note 10 “Commitments and Contingencies – Wireless” Contingencies Separation Agreement On January 1, 2008, DISH Network completed the distribution of its technology and set-top box business and certain infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar. In connection with the Spin-off, DISH Network entered into a separation agreement with EchoStar that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar has assumed certain liabilities that relate to its business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the Spin-off and DISH Network will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off, as well as DISH Network’s acts or omissions following the Spin-off. On February 28, 2017, DISH Network and EchoStar and certain of their respective subsidiaries completed the transactions contemplated by the Share Exchange Agreement (the “Share Exchange Agreement”) that was previously entered into on January 31, 2017 (the “Share Exchange”), pursuant to which certain assets that were transferred to EchoStar in the Spin-off were transferred back to DISH Network. On September 10, 2019, DISH Network and EchoStar and certain of their respective subsidiaries completed the transactions contemplated by the Master Transaction Agreement (the “Master Transaction Agreement”) that was previously entered into on May 19, 2019, pursuant to which certain assets that were transferred to EchoStar in the Spin-off were transferred back to DISH Network. The Share Exchange Agreement and the Master Transaction Agreement contain additional indemnification provisions between DISH Network and EchoStar for certain liabilities and legal proceedings. Litigation We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages, and many of these proceedings seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made. For certain cases described on the following pages, management is unable to provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons: (i) the proceedings are in various stages; (ii) damages have not been sought; (iii) damages are unsupported and/or exaggerated; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties. For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period. BE Labs, Inc. On May 5, 2022, BE Labs, Inc. (“BE Labs”) filed a complaint against our wholly-owned subsidiary, DISH Network L.L.C., in the United States District Court for the Western District of Texas. The complaint alleges infringement of United States Patent Nos. 7,827,581 (the “581 patent”) and 9,344,183 (the “183 patent”), each entitled “Wireless multimedia system.” BE Labs alleges that the Alcatel Linkzone 2 mobile hotspot, sold by Boost Mobile, infringes the asserted patents. On June 28, 2022, BE Labs voluntarily dismissed its complaint. This matter is now concluded. ClearPlay, Inc. On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against DISH Network, our wholly-owned subsidiary DISH Network L.L.C., EchoStar, and its then wholly-owned subsidiary EchoStar Technologies L.L.C., in the United States District Court for the District of Utah. The complaint alleges willful infringement of United States Patent Nos. 6,898,799 (the “799 patent”), entitled “Multimedia Content Navigation and Playback”; 7,526,784 (the “784 patent”), entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,543,318 (the “318 patent”), entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,577,970 (the “970 patent”), entitled “Multimedia Content Navigation and Playback”; and 8,117,282 (the “282 patent”), entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums.” ClearPlay alleges that the AutoHop ™ feature of our Hopper® set-top box infringes the asserted patents. On February 11, 2015, the case was stayed pending various third-party challenges before the United States Patent and Trademark Office regarding the validity of certain of the patents asserted in the action. In those third-party challenges, the United States Patent and Trademark Office found that all claims of the 282 patent are unpatentable, and that certain claims of the 784 patent and 318 patent are unpatentable. ClearPlay appealed as to the 784 patent and the 318 patent, and on August 23, 2016, the United States Court of Appeals for the Federal Circuit affirmed the findings of the United States Patent and Trademark Office. On October 31, 2016, the stay was lifted. On October 16, October 21, November 2, 2020 and November 9, 2020, DISH Network L.L.C. filed petitions with the United States Patent and Trademark Office requesting ex parte reexamination of the validity of the asserted claims of, respectively, the 784 patent, the 799 patent, the 318 patent and the 970 patent; and on November 2, November 20, December 14 and December 15, 2020, the United States Patent and Trademark Office granted each request for reexamination. In October and November 2021, DISH Network L.L.C. filed petitions with the United States Patent and Trademark Office requesting ex parte reexamination of the validity of certain asserted claims of the 784 patent, the 799 patent and the 970 patent. In November and December, 2021, the United States Patent and Trademark Office granted review of the challenged claims of the 799 patent and the 970 patent, but denied review of the challenged claims of the 784 patent. In December 2021, DISH Network L.L.C. petitioned for review of the denial as to the 784 patent. On January 24, 2022, an examiner of the United States Patent and Trademark Office affirmed the challenged claims of the 799 patent, and on September 2, 2022, an examiner of the United States Patent and Trademark Office preliminarily rejected the claims of the 970 patent. Trial has been scheduled for February 27, 2023. In an updated report, ClearPlay’s damages expert now contends that ClearPlay is entitled to We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Contemporary Display LLC On June 4, 2018, Contemporary Display LLC (“Contemporary”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C. in the United States District Court for the Western District of Texas. The complaint alleges infringement of 6,028,643 (the “643 patent”), entitled “Multiple-Screen Video Adapter with Television Tuner”; United States Patent No. 6,429,903 (the “903 patent”), entitled “Video Adapter for Supporting at Least One Television Monitor”; United States Patent No. 6,492,997 (the “997 patent”), entitled “Method and System for Providing Selectable Programming in a Multi-Screen Mode”; United States Patent No. 7,500,202 (the “202 patent”), entitled “Remote Control for Navigating Through Content in an Organized and Categorized Fashion”; and United States Patent No. 7,809,842 (the “842 patent”), entitled “Transferring Sessions Between Devices.” The 643 patent and the 903 patent are directed to video adapters for use with multiple displays. The 997 patent is directed to a system for presenting multiple video programs on a display device simultaneously. The 202 patent is directed to a remote control for interacting with a set-top box having programmable features and “operational controls” on at least three sides of the remote control. The 842 patent is directed to a system for managing online communication sessions between multiple devices. Contemporary is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. In a First Amended Complaint filed on August 6, 2018, Contemporary added our wholly-owned subsidiary DISH Network L.L.C. as a defendant. In a Second Amended Complaint filed on October 9, 2018, Contemporary named only our wholly-owned subsidiary DISH Network L.L.C. as a defendant and dropped certain indirect infringement allegations. On June 10, 2019, DISH Network L.L.C. filed petitions with the United States Patent and Trademark Office challenging the validity of the asserted claims of the 842 patent, the 903 patent, the 643 patent and the 997 patent. On December 13, 2019 and January 7, 2020, the United States Patent and Trademark Office agreed to institute proceedings on each of our petitions. Following Contemporary’s decision not to file Patent Owner Responses to DISH Network L.L.C.’s petitions on the 842 patent and the 903 patent, on April 24, 2020, the United States Patent and Trademark Office entered judgments granting those petitions and canceling the challenged claims of those patents. On November 25, 2020 and December 18, 2020, respectively, the United States Patent and Trademark Office issued final written decisions invalidating all challenged claims of, respectively, the 643 patent and the 997 patent. On February 12, 2021, Contemporary Display noticed an appeal to the United States Court of Appeals for the Federal Circuit challenging the final written decision as to the 997 patent, and the Court of Appeals heard oral argument on April 7, 2022 and summarily affirmed our victory on April 11, 2022. On April 21, 2022, Contemporary Display stipulated to the dismissal with prejudice of its case. This matter is now concluded. Customedia Technologies, L.L.C. On February 10, 2016, Customedia Technologies, L.L.C. (“Customedia”) filed a complaint against DISH Network and our wholly-owned subsidiary DISH Network L.L.C. in the United States District Court for the Eastern District of Texas. The complaint alleges infringement of four patents: United States Patent No. 8,719,090 (the “090 patent”); United States Patent No. 9,053,494 (the “494 patent”); United States Patent No. 7,840,437 (the “437 patent”); and United States Patent No. 8,955,029 (the “029 patent”). Each patent is entitled “System for Data Management And On-Demand Rental And Purchase Of Digital Data Products.” Customedia alleges infringement in connection with our addressable advertising services, our DISH Anywhere feature, and our Pay-Per-View and video-on-demand offerings. Customedia is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein. In December 2016 and January 2017, DISH Network L.L.C. filed petitions with the United States Patent and Trademark Office challenging the validity of the asserted claims of each of the asserted patents. On June 12, 2017, the United States Patent and Trademark Office agreed to institute proceedings on our petitions challenging the 090 patent and the 437 patent; on July 18, 2017, it agreed to institute proceedings on our petitions challenging the 029 patent; and on July 28, 2017, it agreed to institute proceedings on our petitions challenging the 494 patent. These instituted proceedings cover all asserted claims of each of the asserted patents. Pursuant to an agreement between the parties, on December 20, 2017, DISH Network L.L.C. dismissed its petitions challenging the 029 patent in the United States Patent and Trademark Office, and on January 9, 2018, the parties dismissed their claims, counterclaims and defenses as to that patent in the litigation. On March 5, 2018, the United States Patent and Trademark Office conducted a trial on the remaining petitions. On June 11, 2018, the United States Patent and Trademark Office issued final written decisions on DISH Network L.L.C.’s petitions challenging the 090 patent and it invalidated all of the asserted claims. On July 25, 2018, the United States Patent and Trademark Office issued final written decisions on DISH Network L.L.C.’s petitions challenging the 437 patent and the 494 patent and it invalidated all of the asserted claims. Customedia appealed its losses. The Court of Appeals for the Federal Circuit heard oral argument on November 6, 2019 on the appeal involving the 437 patent, and summarily affirmed the patent’s invalidity on November 8, 2019. On January 7, 2020, Customedia petitioned the Court of Appeals for rehearing or rehearing en banc, raising issues about the constitutionality of the appointment of the administrative patent judges that heard the petition before the United States Patent and Trademark Office, but the Court of Appeals denied rehearing on March 5, 2020. On July 31, 2020, Customedia filed a petition with the United States Supreme Court asking it to hear a further appeal, but its petition was denied on October 13, 2020. The Court of Appeals heard oral argument on the appeal involving the 090 patent and the 494 patent on December 3, 2019, and affirmed those patents’ invalidity on March 6, 2020. On May 5, 2020, Customedia filed petitions in the Federal Circuit for rehearing and rehearing en banc, but those petitions were denied on June 9, 2020. On November 6, 2020, Customedia served a petition to the United States Supreme Court asking it to hear a further appeal. On June 16, 2021, the United States Patent and Trademark Office issued a certificate cancelling the challenged claims of the 437 patent and, on July 9, 2021, it issued certificates cancelling the challenged claims of the 090 and 494 patents. Customedia thereafter petitioned the United States Patent and Trademark Office to withdraw its cancellation certificates. On November 22, 2021, the United States Patent and Trademark Office denied Customedia’s petition as to the 437 patent, and on June 14, 2022, it denied Customedia’s petitions as to the 090 patent and the 494 patent. Accordingly, on August 10, 2022, the District Court granted DISH Network L.L.C.’s Motion to Dismiss with prejudice, and entered final judgment in its favor. DISH Network L.L.C. has moved to have the case declared “exceptional” and to recover a portion of its attorneys’ fees, but the risk of liability from this matter is now concluded. Digital Broadcasting Solutions, LLC On August 29, 2022, Digital Broadcasting Solutions, LLC filed a complaint against our wholly-owned subsidiaries DISH Network L.L.C. and DISH Technologies L.L.C. in the United States District Court for the Eastern District of Texas. The complaint alleges infringement of U.S. Patent No. 8,929,710 (the “710 patent”) and U.S. Patent No. 9,538,122 (the “122 patent”), each entitled “System and method for time shifting at least a portion of a video program.” Generally, the plaintiff contends that the AutoHop feature of our Hopper set-top boxes infringes the asserted patents. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Entropic Communications LLC On March 9, 2022, Entropic Communications, LLC (“Entropic”) filed a complaint against DISH Network and our wholly-owned subsidiaries DISH Network L.L.C. and Dish Network Service L.L.C. in the United States District Court for the Eastern District of Texas. The complaint alleges infringement of U.S. Patent No. 7,130,576 (the “576 patent”), entitled “Signal Selector and Combiner for Broadband Content Distribution”; U.S. Patent No. 7,542,715 (the “715 Patent”), entitled “Signal Selector and Combiner for Broadband Content Distribution”; and U.S. Patent No. 8,792,008 (the “008 Patent”), entitled “Method and Apparatus for Spectrum Monitoring.” On March 30, 2022, Entropic filed an amended complaint alleging infringement of the same patents. Generally, the plaintiff accuses satellite antennas, low-noise block converters, signal selector and combiners, and set-top boxes and the manner in which they process signals for satellite television customers of infringing the asserted patents. On October 24, 2022, this case was ordered to be transferred to the United States District Court for the Central District of California. A companion case against DirecTV was also ordered transferred to the United States District Court for the Central District of California. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patents, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could require us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Jones 401(k) Litigation On December 20, 2021, four former employees filed a class action complaint in the United States District Court for the District of Colorado against DISH Network, DISH Network’s Board of Directors, and DISH Network’s Retirement Plan Committee alleging fiduciary breaches arising from the management of our 401(k) Plan. The putative class, comprised of all participants in the Plan on or after January 20, 2016, alleges that the Plan had excessive recordkeeping and administrative expenses and that it maintained underperforming funds. DISH Network intends to vigorously defend this case. DISH Network cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. Realtime Data LLC and Realtime Adaptive Streaming LLC On June 6, 2017, Realtime Data LLC d/b/a IXO (“Realtime”) filed an amended complaint in the United States District Court for the Eastern District of Texas (the “Original Texas Action”) against DISH Network; our wholly-owned subsidiaries DISH Network L.L.C., DISH Technologies L.L.C. (then known as EchoStar Technologies L.L.C.), Sling TV L.L.C. and Sling Media L.L.C.; EchoStar, and EchoStar’s wholly-owned subsidiary Hughes Network Systems, L.L.C. (“HNS”); and Arris Group, Inc. Realtime’s initial complaint in the Original Texas Action, filed on February 14, 2017, had named only EchoStar and HNS as defendants. The amended complaint in the Original Texas Action alleges infringement of United States Patent No. 8,717,204 (the “204 patent”), entitled “Methods for encoding and decoding data”; United States Patent No. 9,054,728 (the “728 patent”), entitled “Data compression systems and methods”; United States Patent No. 7,358,867 (the “867 patent”), entitled “Content independent data compression method and system”; United States Patent No. 8,502,707 (the “707 patent”), entitled “Data compression systems and methods”; United States Patent No. 8,275,897 (the “897 patent”), entitled “System and methods for accelerated data storage and retrieval”; United States Patent No. 8,867,610 (the “610 patent”), entitled “System and methods for video and audio data distribution”; United States Patent No. 8,934,535 (the “535 patent”), entitled “Systems and methods for video and audio data storage and distribution”; and United States Patent No. 8,553,759 (the “759 patent”), entitled “Bandwidth sensitive data compression and decompression.” Realtime alleges that DISH Network, Sling TV L.L.C., Sling Media L.L.C. and Arris Group, Inc. streaming video products and services compliant with various versions of the H.264 video compression standard infringe the 897 patent, the 610 patent and the 535 patent, and that the data compression system in Hughes’ products and services infringe the 204 patent, the 728 patent, the 867 patent, the 707 patent and the 759 patent. On July 19, 2017, the Court severed Realtime’s claims against DISH Network, DISH Network L.L.C., Sling TV L.L.C., Sling Media L.L.C. and Arris Group, Inc. (alleging infringement of the 897 patent, the 610 patent and the 535 patent) from the Original Texas Action into a separate action in the United States District Court for the Eastern District of Texas (the “Second Texas Action”). On August 31, 2017, Realtime dismissed the claims against DISH Network, Sling TV L.L.C., Sling Media Inc., and Sling Media L.L.C. from the Second Texas Action and refiled these claims (alleging infringement of the 897 patent, the 610 patent and the 535 patent) against Sling TV L.L.C., Sling Media Inc., and Sling Media L.L.C. in a new action in the United States District Court for the District of Colorado (the “Colorado Action”). Also on August 31, 2017, Realtime dismissed DISH Technologies L.L.C. from the Original Texas Action, and on September 12, 2017, added it as a defendant in an amended complaint in the Second Texas Action. On November 6, 2017, Realtime filed a joint motion to dismiss the Second Texas Action without prejudice, which the Court entered on November 8, 2017. On October 10, 2017, Realtime Adaptive Streaming LLC (“Realtime Adaptive Streaming”) filed suit against our wholly-owned subsidiaries DISH Network L.L.C. and DISH Technologies L.L.C., as well as Arris Group, Inc., in a new action in the United States District Court for the Eastern District of Texas (the “Third Texas Action”), alleging infringement of the 610 patent and the 535 patent. Also on October 10, 2017, an amended complaint was filed in the Colorado Action, substituting Realtime Adaptive Streaming as the plaintiff instead of Realtime, and alleging infringement of only the 610 patent and the 535 patent, but not the 897 patent. On November 6, 2017, Realtime Adaptive Streaming filed a joint motion to dismiss the Third Texas Action without prejudice, which the court entered on November 8, 2017. Also on November 6, 2017, Realtime Adaptive Streaming filed a second amended complaint in the Colorado Action, adding our wholly-owned subsidiaries DISH Network L.L.C. and DISH Technologies L.L.C., as well as Arris Group, Inc., as defendants. As a result, neither DISH Network nor any of its subsidiaries is a defendant in the Original Texas Action; the Court has dismissed without prejudice the Second Texas Action and the Third Texas Action; and our wholly-owned subsidiaries DISH Network L.L.C., DISH Technologies L.L.C., Sling TV L.L.C. and Sling Media L.L.C. as well as Arris Group, Inc., are defendants in the Colorado Action, which now has Realtime Adaptive Streaming as the named plaintiff. Following a settlement with the plaintiff, Arris Group, Inc. was dismissed from the action on March 10, 2021. On July 3, 2018, Sling TV L.L.C., Sling Media L.L.C., DISH Network L.L.C., and DISH Technologies L.L.C. filed petitions with the United States Patent and Trademark Office challenging the validity of each of the asserted patents. On January 31, 2019, the United States Patent and Trademark Office agreed to institute proceedings on our petitions , and it held trial on the petitions on December 5, 2019. On January 17, 2020, the United States Patent and Trademark Office terminated the petitions as time-barred, but issued a final written decision invalidating the 535 patent to third parties that had timely joined in our petition (and, on January 10, 2020, issued a final written decision invalidating the 535 patent in connection with a third party’s independent petition). On March 16, 2020, Sling TV L.L.C., Sling Media L.L.C., DISH Network L.L.C., and DISH Technologies L.L.C. filed a notice of appeal from the terminated petitions to the United States Court of Appeals for the Federal Circuit. On June 29, 2020, the United States Patent and Trademark Office filed a notice of intervention in the appeal. On March 16, 2021, the Court of Appeals dismissed the appeal for lack of jurisdiction. On January 12, 2021, Realtime Adaptive Streaming filed a notice of dismissal of its claims on the 535 patent. On July 30, 2021, the District Court granted summary judgment in favor of DISH Network L.L.C., DISH Technologies L.L.C., Sling TV L.L.C. and Sling Media L.L.C., holding that the remai |
Financial Information for Subsi
Financial Information for Subsidiary Guarantors | 9 Months Ended |
Sep. 30, 2022 | |
Financial Information for Subsidiary Guarantors | |
Financial Information for Subsidiary Guarantors | 10. Financial Information for Subsidiary Guarantors Our registered senior notes are fully and unconditionally guaranteed, jointly and severally on a senior unsecured basis by certain of our wholly-owned subsidiaries (the “Guarantors”). Our 7 3/8% Senior Notes due 2028 and 5 1/8% Senior Notes due 2029 are guaranteed by our current principal operating subsidiaries. Our 5% Senior Notes due 2023, 5 7/8% Senior Notes due 2024 and 7 3/4% Senior Notes due 2026 are guaranteed by our current principal operating subsidiaries other than Sling TV Holding L.L.C. (“Sling TV Holding”). However, Sling TV Holding, including all of its assets and operations, is a wholly-owned subsidiary of DISH Network L.L.C., which is a Guarantor on all of our outstanding registered senior notes. Certain of our wholly-owned subsidiaries are designated as “Unrestricted Subsidiaries” and do not guarantee any of our registered senior notes. These Unrestricted Subsidiaries are non-operating entities that hold minimal or no assets. We and our subsidiaries participate with our parent company, DISH Network, in a centralized system for the management of our cash and marketable investment securities. Please see Note 3 for further information. The assets, liabilities and results of operations of the combined issuer and Guarantors (excluding Unrestricted Subsidiaries) of the guaranteed securities are not materially different than corresponding amounts presented in the condensed consolidated financial statements of the parent company issuer. Therefore, summarized financial information of the issuer and the Guarantors are not required. The below descriptions apply to all of our existing registered senior notes. There are no material differences between our registered senior notes guaranteed by all of our current principal operating subsidiaries and our registered senior notes guaranteed by our current principal operating subsidiaries other than Sling TV Holding, a wholly-owned subsidiary of DISH Network L.L.C., which is a Guarantor on all of our outstanding registered senior notes. The guarantee of a Guarantor will be deemed automatically discharged and released in accordance with the terms of the applicable indenture: (i) in connection with any direct or indirect sale, conveyance or other disposition of all of the capital stock or all or substantially all of the assets of that Guarantor (including by way of merger or consolidation), if such sale or disposition is made in compliance with the applicable provisions of the indenture; (ii) if such Guarantor is dissolved or liquidated in accordance with the provisions of the indenture; (iii) if we designate any such Guarantor as an “Unrestricted Subsidiary” in compliance with the terms of the indenture; or (iv) with respect to a Guarantor which constitutes a Non-Core Asset (as such term is defined in the applicable indenture), upon the sale or other disposition of certain equity interests of such Guarantor, if such sale or disposition is made in compliance with the applicable provisions of the indenture. There are no restrictions on our ability to obtain cash dividends or other distributions of funds from the Guarantors, except those imposed by applicable law. The rights of holders of the registered senior notes against the Guarantors may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. Under certain circumstances (including a finding that a Guarantor was insolvent at the time its guarantee of the registered senior notes was issued), a court could hold that the obligations of a Guarantor under a guarantee may be voided or are subordinate to other obligations of the Guarantor. Each guarantee contains a provision intended to limit the Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or transfer under U.S. federal or state law. |
Disaggregation of Revenue
Disaggregation of Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Disaggregation of Revenue | |
Disaggregation of Revenue | 11. Disaggregation of Revenue Geographic Information. Revenue is attributed to geographic regions based upon the location where the goods and services are provided. All service 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 For the Nine Months Ended September 30, September 30, Revenue: 2022 2021 2022 2021 (In thousands) United States $ 3,035,327 $ 3,166,822 $ 9,270,255 $ 9,525,620 Canada and Mexico 12,988 9,467 32,485 25,076 Total revenue $ 3,048,315 $ 3,176,289 $ 9,302,740 $ 9,550,696 The revenue from external customers disaggregated by major revenue source was as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, Category: 2022 2021 2022 2021 (In thousands) Pay-TV subscriber and related revenue $ 3,018,484 $ 3,151,144 $ 9,220,562 $ 9,465,241 Equipment sales and other revenue 29,831 25,145 82,178 85,455 Total $ 3,048,315 $ 3,176,289 $ 9,302,740 $ 9,550,696 |
Contract Balances
Contract Balances | 9 Months Ended |
Sep. 30, 2022 | |
Contract Balances | |
Contract Balances | 12. Contract Balances Our valuation and qualifying accounts as of September 30, 2022 were as follows: Allowance for credit losses Balance at Beginning of Period Current Period Provision for Expected Credit Losses Write-offs Charged Against Allowance Balance at End of Period (In thousands) For the nine months ended September 30, 2022 $ 32,861 $ 48,817 $ (50,788) $ 30,890 Contract liabilities arise when we bill our customers and receive consideration in advance of providing the service. Contract liabilities are recognized as revenue when the service has been provided to the customer. Contract liabilities are recorded in “Deferred revenue and other” and “Long-term deferred revenue and other long-term liabilities” on our Condensed Consolidated Balance Sheets. As of September 30, December 31, 2022 2021 (In thousands) Contract liabilities $ 498,527 $ 558,700 Our beginning of period contract liability recorded as customer contract revenue during 2022 was $547 million. 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 | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | 13. Related Party Transactions Related Party Transactions with EchoStar Following the Spin-off, DISH Network 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. As of September 30, 2022 and December 31, 2021 and during the three and nine months ended September Related Party Transactions with DISH Network “Notes Receivable - DISH Network” Concurrently with the issuance of the 5 1/4% Senior Secured Notes due 2026 and the 5 3/4% Senior Secured Notes due 2028 (our “Senior Secured Notes”) and using the proceeds thereof, we made the Intercompany Loan to DISH Network to be used by DISH Network to finance the purchase of certain wireless spectrum licenses and for general corporate purposes, including the buildout of wireless infrastructure. The Intercompany Loan is secured by: (i) the cash proceeds of the loan; and (ii) an interest in the wireless spectrum licenses acquired using such proceeds. Such collateral may be replaced by other then-existing wireless spectrum licenses held directly or indirectly by DISH Network of equivalent value (based upon a third-party valuation). The Intercompany Loan will mature in two tranches, with the first tranche maturing on December 1, 2026 (the “2026 Tranche”) and the second tranche maturing on December 1, 20 28 (the “2028 Tranche”). The aggregate principal amount of the Intercompany Loan was initially $5.250 billion, and on February 11, 2022, we advanced an additional $1.5 billion to DISH Network under the 2026 Tranche. Interest will accrue and be payable semiannually, and interest payments with respect to the Intercompany Loan will, at DISH Network’s option, be payable in kind for the first two years . In the third year, a minimum of 50% of each interest payment due with respect to each tranche of the Intercompany Loan must be paid in cash. Thereafter, interest payments must be paid in cash. Interest will accrue: (a) when paid in cash, at a fixed rate of 0.25% per annum in excess of the interest rate applicable to, in the case of the 2026 Tranche, the 5 1/4% Senior Secured Notes due 2026, and in the case of the 2028 Tranche, the 5 3/4% Senior Secured Notes due 2028 (each, the “Cash Accrual Rate” with respect to the applicable tranche); and (b) when paid in kind, at a rate of 0.75% per annum in excess of the Cash Accrual Rate for the applicable tranche. The Intercompany Loan will be repayable by DISH Network in whole or in part, at any time or from time to time, at a price equal to 100% of the principal amount thereof, plus accrued but unpaid interest thereon. We may use the proceeds of any such pre-payment for general corporate purposes, including refinancing of indebtedness, but may not use any such prepaid amounts to make a cash dividend or distribution to DISH Network prior to the repayment in full of the Intercompany Loan . The 5 1/4% Senior Secured Notes due 2026 and the 5 3/4% Senior Secured Notes due 2028 are subordinated to our existing and certain future unsecured notes with respect to certain realizations under the Intercompany Loan and any collateral pledged as security therefor. Any material amendments or modifications to the terms of the Intercompany Loan will require the written consent of the holders of a majority of the then-outstanding 5 1/4% Senior Secured Notes due 2026 and the 5 3/4% Senior Secured Notes due 2028. During the three and nine months ended September 30, 2022, we recorded $108 million and $307 million of “Interest income” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As of September 30, 2022 and December 31, 2021, “Notes receivable – DISH Network” was $6.945 billion including interest paid in kind and $5.250 billion, respectively, “Interest receivable – DISH Network” was $143 million and $32 million, respectively, on our Condensed Consolidated Balance Sheets. “Cost of services” During the three months ended September 30, 2022 and 2021, we incurred expenses of $48 million and $56 million, respectively, for satellite capacity leased from DISH Network and telemetry, tracking and control (“TT&C”) and other professional services provided to us by DISH Network. During the nine months ended September 30, 2022 and 2021, we incurred expenses of million, respectively, for satellite capacity leased from DISH Network and TT&C and other professional services provided to us by DISH Network. As a result of the Master Transaction Agreement, DISH Network is now a supplier of the vast majority of our transponder capacity. These amounts are recorded in “Cost of services” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The agreements pertaining to these expenses are discussed below. Satellite Capacity Leased from DISH Network . On September 10, 2019, in connection with the Master Transaction Agreement, DISH Network entered into with EchoStar on May 19, 2019, we began leasing satellite capacity on satellites owned or leased by DISH Network from a wholly-owned subsidiary of DISH Network. See “Pay-TV Satellites” in Note 6 for further information. The term of each lease is set forth below: ● EchoStar X, XI and XIV. On March 1, 2014, we began leasing all available capacity from EchoStar on the EchoStar 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. Pursuant to the Master Transaction Agreement, on September 10, 2019, the satellite capacity agreement we previously had with EchoStar for EchoStar X, XI and XIV was transferred to DISH Network and we began leasing satellite capacity on these satellites from a wholly-owned subsidiary of DISH Network as of the same date. ● 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. 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. Pursuant to the Master Transaction Agreement, on September 10, 2019, the transponder service agreement we previously had with EchoStar for EchoStar XVI was transferred to DISH Network and we began receiving transponder services from a wholly-owned subsidiary of DISH Network as of the same date. Nimiq 5 Agreement . During 2009, EchoStar entered into a 15-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 received service from EchoStar on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. Under the terms of the DISH Nimiq 5 Agreement, we made certain monthly payments to EchoStar that commenced in 2009 when the Nimiq 5 satellite was placed into service and continued through the service term, which expired ten years following the date the Nimiq 5 satellite was placed into service. Upon expiration of the initial term, we had the option to renew on a year-to-year basis through the end-of-life of the Nimiq 5 satellite. Pursuant to the Master Transaction Agreement, on September 10, 2019, the Telesat Transponder Agreement was transferred to DISH Network and we began receiving transponder services on the Nimiq 5 satellite from a wholly-owned subsidiary of DISH Network as of the same date. We have exercised our option to renew for a one-year period through September 2023. As discussed in Note 6, “Property and Equipment and Intangible Assets,” the Nimiq 5 satellite lease has been accounted for as a finance lease since September 2019. Expenses related to this lease are recorded in “Depreciation and amortization” and “Interest expense, net of amounts capitalized” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During each of the three months ended September 30, 2022 and 2021, we recorded $9 million of “Depreciation and amortization expense” and $2 million and $3 million of “Interest expense, net of amounts capitalized,” respectively, related to Nimiq 5. During each of the nine months ended September 30, 2022 and 2021, we recorded $26 million of “Depreciation and amortization expense” and $7 million and $9 million of “Interest expense, net of amounts capitalized,” respectively, related to Nimiq 5. QuetzSat-1 Lease Agreement. During 2008, EchoStar entered into a ten-year satellite service agreement with SES Latin America S.A. (“SES”), which provided, among other things, for the provision by SES to EchoStar of service on 32 DBS transponders on the QuetzSat-1 satellite (“SES Transponder Agreement”) . During 2008, EchoStar also entered into a transponder service agreement (“QuetzSat-1 Transponder Agreement”) with us pursuant to which we received service from EchoStar on 24 DBS transponders. QuetzSat-1 was launched on September 29, 2011 and was placed into service during the fourth quarter of 2011 at the 67.1 degree orbital location. In January 2013, QuetzSat-1 was moved to the 77 degree orbital location and we commenced commercial operations at that location in February 2013. Our lease arrangement with DISH Network expired in November 2021. TT&C Agreement. Effective January 1, 2012, we entered into a 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. On May 19, 2019, DISH Network entered into a Master Transaction Agreement pursuant to which, on September 10, 2019, the assets and employees that provide these services were transferred to DISH Network. We began receiving TT&C services from a wholly-owned subsidiary of DISH Network as of the same date. “Selling, general and administrative expenses” During the three months ended September 30, 2022 and 2021, we incurred $3 million and $2 million, respectively, for selling, general and administrative expenses for services provided to us by DISH Network. During the nine months ended September 30, 2022 and 2021, we incurred for services provided to us by DISH Network. These amounts are recorded in “Selling, 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. On September 10, 2019, in connection with the Master Transaction Agreement, we began leasing office space owned or leased by DISH Network from a wholly-owned subsidiary of DISH Network. The term of each lease is set forth below: ● Santa Fe Lease Agreement. The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado originally from EchoStar to us 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. Pursuant to the Master Transaction Agreement, on September 10, 2019, this lease was transferred to DISH Network and we began leasing all of 5701 S. Santa Fe Dr. in Littleton, Colorado from a wholly-owned subsidiary of DISH Network as of the same date. In December 2020, we and DISH Network amended this lease to, among other things, extend the term thereof for one additional year until December 31, 2021. This lease expired on December 31, 2021. ● 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 DISH Network, and, effective March 1, 2017, DISH Network and EchoStar amended this lease agreement to: (i) terminate the lease of certain space at the portion of the property that was transferred to DISH Network; and (ii) provide for the continued lease to us of certain space at the portion of the property that EchoStar retained. Pursuant to the Master Transaction Agreement, the portion of the property EchoStar retained was transferred to DISH Network, and on September 10, 2019, this lease was transferred to DISH Network and we began leasing certain space from a wholly-owned subsidiary of DISH Network as of the same date. Other Agreements – DISH Network Broadband, Wireless and Other Operations. We provide certain administrative, call center, installation, marketing and other services to DISH Network’s broadband, wireless and other operations. During the three months ended September 30, 2022 and 2021, the costs associated with these services were During the nine months ended September 30, 2022 and 2021, the costs associated with these services were Related Party Transactions with NagraStar L.L.C. We own a 50% interest in 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. Certain payments related to NagraStar are recorded in “Cost of services” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). In addition, certain other payments are initially included in “Inventory” and are subsequently capitalized as “Property and equipment, net” on our Condensed Consolidated Balance Sheets or expensed as “Selling, general and administrative expenses” or “Cost of services” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) when the equipment is deployed. We record all payables in “Trade accounts payable” or “Other accrued expenses” on our Condensed Consolidated Balance Sheets. Our investment in NagraStar is accounted for using the equity method. The table below summarizes our transactions with NagraStar: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Purchases (including fees): Purchases from NagraStar $ 10,285 $ 11,451 $ 32,713 $ 35,124 As of September 30, December 31, 2022 2021 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 11,434 $ 11,988 Commitments to NagraStar $ 3,241 $ 5,630 Related Party Transactions with Dish Mexico Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”) is an entity that provides direct-to-home satellite services in Mexico, which is owned 49% by EchoStar. We provide certain broadcast services and certain satellite services to Dish Mexico, which are recorded in “Equipment sales and other revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The table below summarizes our transactions with Dish Mexico: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Sales: Uplink services $ 709 $ 1,255 $ 2,000 $ 3,700 As of September 30, December 31, 2022 2021 (In thousands) Amounts Receivable: Amounts receivable from Dish Mexico $ 685 $ 941 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021. 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. 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. |
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 credit losses, 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 DISH Network’s stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, relative standalone selling prices of performance obligations, finance leases, asset impairments, estimates of future cash flows used to evaluate and recognize impairments, useful lives of property, equipment and intangible assets, incremental borrowing rate (“IBR”) on lease right of use assets, nonrefundable upfront fees, 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. |
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; and quoted prices for identical or similar instruments in markets that are not active; 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 September 30, 2022 and December 31, 2021, the carrying amount for cash and cash equivalents, trade accounts receivable (net of allowance for credit losses) 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 4 for the fair value of our marketable investment securities. Fair values for our publicly traded debt securities are based on quoted market prices, when available. The fair values of private debt are based on, among other things, available trade information, and/or an analysis in which we evaluate market conditions, related securities, various public and private offerings, and other publicly available information. In performing this analysis, we make various assumptions regarding, among other things, credit spreads, and the impact of these factors on the value of the debt securities. See Note 8 for the fair value of our long-term debt. |
Assets Recognized Related to the Costs to Obtain a Contract with a Subscriber | 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 exceeding one year . During the three months ended September 30, 2022 and 2021, we capitalized $24 million and $32 million, respectively, under these programs. The amortization expense related to these programs was $37 million and $41 million for the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, we capitalized $68 million and $93 million, respectively, under these programs. The amortization expense related to these programs was $118 million and $116 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, we had a total of $248 million and $298 million, respectively, capitalized, net of amortization, 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 “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). |
Advertising Costs | Advertising Costs We recognize advertising expense when incurred as a component of “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Advertising expenses totaled million for the three months ended September 30, 2022 and 2021, respectively. Advertising expenses totaled |
Research and Development | Research and Development Research and development costs are expensed as incurred and are included as a component of “Selling, general and administrative expenses” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Research and development costs totaled million for the three months ended September 30, 2022 and 2021, respectively. Research and development costs totaled |
New Accounting Pronouncements | New Accounting Pronouncements We do not expect that any recently issued accounting pronouncements will have a material effect on our condensed consolidated financial statements. |
Supplemental Data - Statement_2
Supplemental Data - Statements of Cash Flows (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Data - Statements of Cash Flows | |
Schedule of supplemental cash flow and other non-cash data | For the Nine Months Ended September 30, 2022 2021 (In thousands) Cash paid for interest $ 657,039 $ 538,050 Cash received for interest 13,456 2,751 Cash paid for income taxes 27,395 33,287 Cash paid for income taxes to DISH Network 489,819 409,364 |
Marketable Investment Securit_2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, December 31, 2022 2021 (In thousands) Marketable investment securities: Current marketable investment securities $ 59,960 $ 1,670,739 Restricted cash and cash equivalents (1) 53,142 55,027 Other investment securities: Other investment securities 91,438 99,606 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 204,540 $ 1,825,372 (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 investments measured at fair value on a recurring basis | As of September 30, 2022 December 31, 2021 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 518,286 $ 88,670 $ 429,616 $ — $ 1,404,505 $ 60,085 $ 1,344,420 $ — Debt securities (including restricted): Commercial paper $ 20,236 $ — $ 20,236 $ — $ 1,413,134 $ — $ 1,413,134 $ — Corporate securities 39,425 — 39,425 — 254,631 — 254,631 — Other 299 — 299 — 2,974 — 2,974 — Total $ 59,960 $ — $ 59,960 $ — $ 1,670,739 $ — $ 1,670,739 $ — |
Gains and Losses on Sales and Changes in Carrying Amounts of Investments | For the Three Months Ended For the Nine Months Ended September 30, September 30, Other, net: 2022 2021 2022 2021 (In thousands) Costs related to early redemption of debt $ — $ — $ (1,149) $ (3,587) Equity in earnings (losses) of affiliates (143) 368 1,818 1,931 Other 636 (37) 1,069 192 Total $ 493 $ 331 $ 1,738 $ (1,464) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory | |
Schedule of inventory | As of September 30, December 31, 2022 2021 (In thousands) Finished goods $ 255,088 $ 246,723 Work-in-process and service repairs 15,790 19,074 Raw materials 34,295 26,302 Total inventory $ 305,173 $ 292,099 |
Property and Equipment and In_2
Property and Equipment and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property and Equipment and Intangible Assets | |
Schedule of property and equipment | Depreciable As of Life September 30, December 31, (In Years) 2022 2021 (In thousands) Equipment leased to customers 2 - 5 $ 1,356,774 $ 1,518,880 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 Satellites acquired under finance lease agreements 15 174,685 398,107 Furniture, fixtures, equipment and other 2 - 10 1,903,408 1,882,610 Buildings and improvements 5 - 40 294,885 292,840 Land - 12,505 12,505 Construction in progress - 32,818 37,339 Total property and equipment 4,463,988 4,831,194 Accumulated depreciation (3,422,848) (3,598,014) Property and equipment, net $ 1,041,140 $ 1,233,180 |
Schedule of depreciation and amortization expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Equipment leased to customers $ 47,737 $ 60,616 $ 148,750 $ 188,405 Satellites 20,073 23,797 63,942 71,390 Buildings, furniture, fixtures, equipment and other 19,502 25,506 59,954 76,757 Total depreciation and amortization $ 87,312 $ 109,919 $ 272,646 $ 336,552 |
Schedule of pay-TV satellite fleet | Degree Launch Orbital Lease Satellites Date Location Termination Date Owned: EchoStar XV July 2010 61.5 N/A EchoStar XVIII June 2016 61.5 N/A Leased from EchoStar: EchoStar IX August 2003 121 Month to month Leased from DISH Network (1): EchoStar X February 2006 110 February 2023 EchoStar XI July 2008 110 September 2023 EchoStar XIV March 2010 119 February 2023 EchoStar XVI November 2012 61.5 January 2023 Nimiq 5 September 2009 72.7 September 2023 Leased from Other Third Party: Anik F3 (2) April 2007 118.7 April 2025 Ciel II December 2008 129 July 2023 (1) See Note 13 for further information on our Related Party Transactions with DISH Network. (2) During April 2022, we extended the Anik F3 satellite lease for an additional two years with an option to renew for one additional year to April 2025. In addition, EchoStar XXIII, which is owned by DISH Network, is anticipated to be ready for commercial operation at the 110 degree orbital location as early as the fourth quarter of 2022. We expect this satellite will be leased from DISH Network to replace EchoStar XI, which will become an in-orbit spare at that time. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Summary of the components of lease expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Operating lease cost (1) $ 42,585 $ 57,282 $ 124,187 $ 174,987 Short-term lease cost (1)(2) 16,143 6,609 58,132 17,445 Finance lease cost: Amortization of right-of-use assets (3) 8,619 12,374 29,703 37,122 Interest on lease liabilities (3) 2,009 3,138 6,777 10,282 Total finance lease cost (3) 10,628 15,512 36,480 47,404 Total lease costs $ 69,356 $ 79,403 $ 218,799 $ 239,836 (1) The decrease in operating lease cost primarily related to the QuetzSat-1 lease, which expired in November 2021. In addition, our EchoStar XI and EchoStar X satellites were reclassified to “Short-term lease costs.” (2) Leases that have terms of 12 months or less. (3) The decrease in finance lease cost is primarily related to the Anik F3 finance lease which was extended in April 2022 and as a result is currently accounted for as an operating lease. |
Summary of Supplemental cash flow information related to leases | For the Nine Months Ended September 30, 2022 2021 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 122,987 $ 171,678 Operating cash flows from finance leases $ 6,735 $ 10,035 Financing cash flows from finance leases $ 31,022 $ 38,188 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 70,115 $ 19,377 Finance leases $ — $ — |
Summary of supplemental balance sheet information related to leases | As of September 30, December 31, 2022 2021 (In thousands) Operating Leases: Operating lease assets $ 166,059 $ 220,089 Other current liabilities $ 88,088 $ 139,492 Operating lease liabilities 82,298 83,725 Total operating lease liabilities $ 170,386 $ 223,217 Finance Leases: Property and equipment, gross $ 175,704 $ 399,126 Accumulated depreciation (106,850) (300,569) Property and equipment, net $ 68,854 $ 98,557 Other current liabilities $ 37,175 $ 39,957 Other long-term liabilities 40,967 69,207 Total finance lease liabilities $ 78,142 $ 109,164 Weighted Average Remaining Lease Term: Operating leases 3.3 years 3.0 years Finance leases 2.0 years 2.6 years Weighted Average Discount Rate: Operating leases 7.4% 8.2% Finance leases 10.0% 9.9% |
Summary of maturities of operating lease liabilities | Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2022 (remaining three months) $ 41,576 $ 10,723 $ 52,299 2023 65,189 42,950 108,139 2024 31,578 32,147 63,725 2025 17,168 — 17,168 2026 10,711 — 10,711 Thereafter 30,036 — 30,036 Total lease payments 196,258 85,820 282,078 Less: Imputed interest (25,872) (7,678) (33,550) Total 170,386 78,142 248,528 Less: Current portion (88,088) (37,175) (125,263) Long-term portion of lease obligations $ 82,298 $ 40,967 $ 123,265 |
Summary of maturities of finance lease liabilities | Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2022 (remaining three months) $ 41,576 $ 10,723 $ 52,299 2023 65,189 42,950 108,139 2024 31,578 32,147 63,725 2025 17,168 — 17,168 2026 10,711 — 10,711 Thereafter 30,036 — 30,036 Total lease payments 196,258 85,820 282,078 Less: Imputed interest (25,872) (7,678) (33,550) Total 170,386 78,142 248,528 Less: Current portion (88,088) (37,175) (125,263) Long-term portion of lease obligations $ 82,298 $ 40,967 $ 123,265 |
Long-Term Debt and Finance Le_2
Long-Term Debt and Finance Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt and Finance Lease Obligations | |
Schedule of carrying and fair values of the entity's debt facilities | As of September 30, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) 5 7/8% Senior Notes due 2022 (1) $ — $ — $ 2,000,000 $ 2,039,700 5% Senior Notes due 2023 (2) 1,500,000 1,474,080 1,500,000 1,541,670 5 7/8% Senior Notes due 2024 2,000,000 1,789,840 2,000,000 2,060,180 7 3/4% Senior Notes due 2026 2,000,000 1,538,100 2,000,000 2,122,700 5 1/4% Senior Secured Notes due 2026 (3) 2,750,000 2,279,503 2,750,000 2,792,900 7 3/8% Senior Notes due 2028 1,000,000 677,730 1,000,000 1,017,060 5 3/4% Senior Secured Notes due 2028 (3) 2,500,000 1,906,050 2,500,000 2,520,650 5 1/8% Senior Notes due 2029 1,500,000 891,195 1,500,000 1,365,645 Other notes payable 21,012 21,012 21,012 21,012 Subtotal 13,271,012 $ 10,577,510 15,271,012 $ 15,481,517 Unamortized deferred financing costs and debt discounts, net (37,059) (42,547) Finance lease obligations (4) 78,142 109,164 Total long-term debt and finance lease obligations (including current portion) $ 13,312,095 $ 15,337,629 (1) As of July 15, 2022, we had repurchased or redeemed the principal balance of our 5 7/8% Senior Notes due 2022. (2) Our 5% Senior Notes due 2023 mature on March 15, 2023 and have been reclassified to “Current portion of long-term debt and finance lease obligations” on our Condensed Consolidated Balance Sheets as of September 30, 2022. (3) The net proceeds from the offering of our Senior Secured Notes (defined herein) were used to make an intercompany loan to DISH Network pursuant to a Loan and Security Agreement dated November 26, 2021 (together with potential future advances to DISH Network, the “Intercompany Loan”) between us and DISH Network in order to finance the purchase of wireless spectrum licenses and for general corporate purposes, including the buildout of wireless infrastructure. See Note 13 Related Party Transactions for further information. (4) Disclosure regarding fair value of finance leases is not required. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Schedule of future maturities of long-term debt, finance lease and contractual obligations | For the Years Ending December 31, Other Long-Term Obligations (1) (In thousands) 2022 (remaining three months) $ 1,091,839 2023 1,999,047 2024 1,228,884 2025 713,719 2026 657,673 Thereafter 125,084 Total $ 5,816,246 (1) Represents minimum contractual commitments related to certain 5G Network Deployment commitments, obligations under the MNSA with T-Mobile, radios, software and integration services and satellite related and other obligations. |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Disaggregation of Revenue | |
Revenue by geographic region | For the Three Months Ended For the Nine Months Ended September 30, September 30, Revenue: 2022 2021 2022 2021 (In thousands) United States $ 3,035,327 $ 3,166,822 $ 9,270,255 $ 9,525,620 Canada and Mexico 12,988 9,467 32,485 25,076 Total revenue $ 3,048,315 $ 3,176,289 $ 9,302,740 $ 9,550,696 |
Schedule of disaggregation of revenue | For the Three Months Ended For the Nine Months Ended September 30, September 30, Category: 2022 2021 2022 2021 (In thousands) Pay-TV subscriber and related revenue $ 3,018,484 $ 3,151,144 $ 9,220,562 $ 9,465,241 Equipment sales and other revenue 29,831 25,145 82,178 85,455 Total $ 3,048,315 $ 3,176,289 $ 9,302,740 $ 9,550,696 |
Contract Balances (Tables)
Contract Balances (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Contract Balances | |
Valuation and Qualifying Accounts | Allowance for credit losses Balance at Beginning of Period Current Period Provision for Expected Credit Losses Write-offs Charged Against Allowance Balance at End of Period (In thousands) For the nine months ended September 30, 2022 $ 32,861 $ 48,817 $ (50,788) $ 30,890 |
Schedule of Contract balances | As of September 30, December 31, 2022 2021 (In thousands) Contract liabilities $ 498,527 $ 558,700 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of related party transaction | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Purchases (including fees): Purchases from NagraStar $ 10,285 $ 11,451 $ 32,713 $ 35,124 As of September 30, December 31, 2022 2021 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 11,434 $ 11,988 Commitments to NagraStar $ 3,241 $ 5,630 |
Dish Mexico | |
Schedule of related party transaction | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (In thousands) Sales: Uplink services $ 709 $ 1,255 $ 2,000 $ 3,700 As of September 30, December 31, 2022 2021 (In thousands) Amounts Receivable: Amounts receivable from Dish Mexico $ 685 $ 941 |
Organization and Business Act_2
Organization and Business Activities (Details) customer in Thousands | Sep. 30, 2022 customer |
Pay TV Subscribers | |
Organization and Business Activities | |
Number of subscribers | 10,018 |
DISH TV subscribers | |
Organization and Business Activities | |
Number of subscribers | 7,607 |
Sling TV subscribers | |
Organization and Business Activities | |
Number of subscribers | 2,411 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Principles of Consolidation and Research and Development (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Advertising Costs | ||||
Advertising expenses | $ 137 | $ 129 | $ 355 | $ 308 |
Research and Development | ||||
Research and development costs | $ 12 | $ 7 | $ 34 | $ 21 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||||
Period to amortize assets recognized related to costs to obtain subscriber contract | 1 year | ||||
Contract cost capitalized during the period | $ 24 | $ 32 | $ 68 | $ 93 | |
Amortization expense related to the programs | 37 | $ 41 | 118 | $ 116 | |
Total costs capitalized | $ 248 | $ 248 | $ 298 |
Supplemental Data - Statement_3
Supplemental Data - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental Data - Statements of Cash Flows | ||
Cash paid for interest | $ 657,039 | $ 538,050 |
Cash received for interest | 13,456 | 2,751 |
Cash paid for income taxes | 27,395 | 33,287 |
Cash paid for income taxes to DISH Network | $ 489,819 | $ 409,364 |
Marketable Investment Securit_3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 28, 2017 |
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | |||
Current marketable investment securities | $ 59,960 | $ 1,670,739 | |
Restricted cash and cash equivalents | 53,142 | 55,027 | |
Other investment securities | 91,438 | 99,606 | |
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ 204,540 | $ 1,825,372 | |
NagraStar | |||
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | |||
Ownership interest in equity method investment | 50% |
Marketable Investment Securit_4
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Narrative (Details) - Maximum | 9 Months Ended |
Sep. 30, 2022 | |
Commercial Paper [Member] | |
Other investment securities: | |
Debt term of Maturity | 365 days |
Corporate securities | |
Other investment securities: | |
Debt term of Maturity | 18 months |
Marketable Investment Securit_5
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Unrealized Gains (Losses) On Marketable Investment Securities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Contractual maturities of restricted and non-restricted marketable investment securities | |
Debt securities with contractual maturities within one year | $ 60,000,000 |
Marketable Investment Securit_6
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Fair Value Measurements (Details) - Fair value measurements on recurring basis - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair value of marketable securities | ||
Cash equivalents (including restricted) | $ 518,286 | $ 1,404,505 |
Total | 59,960 | 1,670,739 |
Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 20,236 | 1,413,134 |
Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 39,425 | 254,631 |
Other (including restricted) | ||
Fair value of marketable securities | ||
Debt securities | 299 | 2,974 |
Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 88,670 | 60,085 |
Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 429,616 | 1,344,420 |
Total | 59,960 | 1,670,739 |
Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 20,236 | 1,413,134 |
Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 39,425 | 254,631 |
Level 2 | Other (including restricted) | ||
Fair value of marketable securities | ||
Debt securities | $ 299 | $ 2,974 |
Marketable Investment Securit_7
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities - Gains And Losses On Sales And Changes In Carrying Amounts Of Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ||||
Costs related to early redemption of debt | $ (1,149) | $ (3,587) | ||
Equity in earnings (losses) of affiliates | $ (143) | $ 368 | 1,818 | 1,931 |
Other | 636 | (37) | 1,069 | 192 |
Total | $ 493 | $ 331 | $ 1,738 | $ (1,464) |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory | ||
Finished goods | $ 255,088 | $ 246,723 |
Work-in-process and service repairs | 15,790 | 19,074 |
Raw materials | 34,295 | 26,302 |
Total inventory | $ 305,173 | $ 292,099 |
Property and Equipment and In_3
Property and Equipment and Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property and Equipment | ||
Total property and equipment | $ 4,463,988 | $ 4,831,194 |
Accumulated depreciation | (3,422,848) | (3,598,014) |
Property and equipment, net | 1,041,140 | 1,233,180 |
Equipment leased to customers | ||
Property and Equipment | ||
Total property and equipment | $ 1,356,774 | 1,518,880 |
Equipment leased to customers | Minimum | ||
Property and Equipment | ||
Depreciable life of assets | 2 years | |
Equipment leased to customers | Maximum | ||
Property and Equipment | ||
Depreciable life of assets | 5 years | |
EchoStar XV | ||
Property and Equipment | ||
Total property and equipment | $ 277,658 | 277,658 |
Depreciable life of assets | 15 years | |
EchoStar XVIII | ||
Property and Equipment | ||
Total property and equipment | $ 411,255 | 411,255 |
Depreciable life of assets | 15 years | |
Satellites acquired under finance lease agreements | ||
Property and Equipment | ||
Total property and equipment | $ 174,685 | 398,107 |
Depreciable life of assets | 15 years | |
Furniture, fixtures, equipment and other | ||
Property and Equipment | ||
Total property and equipment | $ 1,903,408 | 1,882,610 |
Furniture, fixtures, equipment and other | Minimum | ||
Property and Equipment | ||
Depreciable life of assets | 2 years | |
Furniture, fixtures, equipment and other | Maximum | ||
Property and Equipment | ||
Depreciable life of assets | 10 years | |
Buildings and improvements | ||
Property and Equipment | ||
Total property and equipment | $ 294,885 | 292,840 |
Buildings and improvements | Minimum | ||
Property and Equipment | ||
Depreciable life of assets | 5 years | |
Buildings and improvements | Maximum | ||
Property and Equipment | ||
Depreciable life of assets | 40 years | |
Land | ||
Property and Equipment | ||
Total property and equipment | $ 12,505 | 12,505 |
Construction in progress | ||
Property and Equipment | ||
Total property and equipment | $ 32,818 | $ 37,339 |
Property and Equipment and In_4
Property and Equipment and Intangible Assets - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Depreciation and amortization expense | ||||
Depreciation and amortization expense | $ 87,312 | $ 109,919 | $ 272,646 | $ 336,552 |
Equipment leased to customers | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | 47,737 | 60,616 | 148,750 | 188,405 |
Satellites | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | 20,073 | 23,797 | 63,942 | 71,390 |
Buildings, furniture, fixtures, equipment and other | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | $ 19,502 | $ 25,506 | $ 59,954 | $ 76,757 |
Property and Equipment and In_5
Property and Equipment and Intangible Assets - Pay TV Satellites (Details) | 9 Months Ended |
Sep. 30, 2022 item | |
Pay-TV Satellites | |
Property, Plant and Equipment [Line Items] | |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 10 |
Owned Satellites | 2 |
Number of satellites leased from third parties | 2 |
FSS Satellite Anik F3 | |
Property, Plant and Equipment [Line Items] | |
Leased term | 2 years |
Leased extension term | 1 year |
EchoStar | Pay-TV Satellites | |
Property, Plant and Equipment [Line Items] | |
Number of satellites utilized under operating lease | 1 |
Dish Network | Pay-TV Satellites | |
Property, Plant and Equipment [Line Items] | |
Number of satellites utilized under operating lease | 5 |
Leases (Details)
Leases (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Renewal options, operating lease | true |
Renewal options, finance lease | true |
Options to terminate, operating lease | true |
Options to terminate, finance lease | true |
Minimum | |
Leases | |
Remaining lease terms, operating lease | 1 year |
Remaining lease terms, finance lease | 1 year |
Maximum | |
Leases | |
Remaining lease terms, operating lease | 10 years |
Remaining lease terms, finance lease | 10 years |
Termination period, operating lease | 1 year |
Termination period, finance lease | 1 year |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||||
Operating lease cost | $ 42,585 | $ 57,282 | $ 124,187 | $ 174,987 |
Short-term lease cost | 16,143 | 6,609 | 58,132 | 17,445 |
Amortization of right-of-use assets | 8,619 | 12,374 | 29,703 | 37,122 |
Interest on lease liabilities | 2,009 | 3,138 | 6,777 | 10,282 |
Total finance lease cost | 10,628 | 15,512 | 36,480 | 47,404 |
Total lease costs | $ 69,356 | $ 79,403 | $ 218,799 | $ 239,836 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Operating cash flows from operating leases | $ 122,987 | $ 171,678 |
Operating cash flows from finance leases | 6,735 | 10,035 |
Financing cash flows from finance leases | 31,022 | 38,188 |
Operating leases | $ 70,115 | $ 19,377 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Operating lease assets | $ 166,059 | $ 220,089 |
Other current liabilities | $ 88,088 | $ 139,492 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Accrued Liabilities, Current | Other Accrued Liabilities, Current |
Operating lease liabilities | $ 82,298 | $ 83,725 |
Total operating lease liabilities | $ 170,386 | $ 223,217 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating lease liabilities, Other Accrued Liabilities, Current | Operating lease liabilities, Other Accrued Liabilities, Current |
Property and equipment, gross | $ 4,463,988 | $ 4,831,194 |
Accumulated depreciation | (3,422,848) | (3,598,014) |
Property and equipment, net | 1,041,140 | 1,233,180 |
Other current liabilities | $ 37,175 | $ 39,957 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Other long-term liabilities | $ 40,967 | $ 69,207 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term Debt, Excluding Current Maturities | Long-term Debt, Excluding Current Maturities |
Total finance lease liabilities | $ 78,142 | $ 109,164 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Contract with Customer, Liability, Noncurrent and Other Long Term Liabilities | Contract with Customer, Liability, Noncurrent and Other Long Term Liabilities |
Weighted Average Remaining Lease Term: Operating leases | 3 years 3 months 18 days | 3 years |
Weighted Average Remaining Lease Term: Finance leases | 2 years | 2 years 7 months 6 days |
Weighted Average Discount Rate: Operating leases | 7.40% | 8.20% |
Weighted Average Discount Rate: Finance leases | 10% | 9.90% |
Property and equipment [Member] | ||
Leases | ||
Property and equipment, gross | $ 175,704 | $ 399,126 |
Accumulated depreciation | (106,850) | (300,569) |
Property and equipment, net | $ 68,854 | $ 98,557 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Maturities of lease liabilities: Operating lease | ||
2022 (remaining six months) | $ 41,576 | |
2023 | 65,189 | |
2024 | 31,578 | |
2025 | 17,168 | |
2026 | 10,711 | |
Thereafter | 30,036 | |
Total lease payments | 196,258 | |
Less: Imputed interest | (25,872) | |
Total operating lease liabilities | 170,386 | $ 223,217 |
Less: Current portion | (88,088) | (139,492) |
Long-term portion of lease obligations | 82,298 | 83,725 |
Maturities of lease liabilities: Finance lease | ||
2022 (remaining six months) | 10,723 | |
2023 | 42,950 | |
2024 | 32,147 | |
Total lease payments | 85,820 | |
Less: Imputed interest | (7,678) | |
Total finance lease liabilities | 78,142 | 109,164 |
Less: Current portion | (37,175) | (39,957) |
Long-term portion of lease obligations | 40,967 | $ 69,207 |
Future minimum payments for total lease liabilities | ||
2022 (remaining six months) | 52,299 | |
2023 | 108,139 | |
2024 | 63,725 | |
2025 | 17,168 | |
2026 | 10,711 | |
Thereafter | 30,036 | |
Total lease payments | 282,078 | |
Less: Imputed interest | (33,550) | |
Total | 248,528 | |
Less: Current portion | (125,263) | |
Long-term portion of lease obligations | $ 123,265 |
Long-Term Debt and Finance Le_3
Long-Term Debt and Finance Lease Obligations - Long term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-term debt | ||
Finance lease obligations | $ 78,142 | $ 109,164 |
5% Senior Notes due 2023 | ||
Long-term debt | ||
Interest rate (as a percent) | 5% | |
5 7/8% Senior Notes due 2024 | ||
Long-term debt | ||
Interest rate (as a percent) | 5.875% | |
7 3/4% Senior Notes due 2026 | ||
Long-term debt | ||
Interest rate (as a percent) | 7.75% | |
5 1/4% Senior Secured Notes due 2026 | ||
Long-term debt | ||
Interest rate (as a percent) | 5.25% | |
7 3/8% Senior Notes due 2028 | ||
Long-term debt | ||
Interest rate (as a percent) | 7.375% | |
5 3/4% Senior Secured Notes due 2028 | ||
Long-term debt | ||
Interest rate (as a percent) | 5.75% | |
5 1/8% Senior Notes due 2029 | ||
Long-term debt | ||
Interest rate (as a percent) | 5.125% | |
D I S H D B S Corporation | ||
Long-term debt | ||
Carrying Amount | $ 13,271,012 | 15,271,012 |
Fair Value | 10,577,510 | 15,481,517 |
Unamortized deferred financing costs and debt discounts, net | (37,059) | (42,547) |
Finance lease obligations | 78,142 | 109,164 |
Total long-term debt and finance lease obligations (including current portion) | $ 13,312,095 | 15,337,629 |
D I S H D B S Corporation | 5 7/8% Senior Notes due 2022 | ||
Long-term debt | ||
Carrying Amount | 2,000,000 | |
Fair Value | $ 2,039,700 | |
Interest rate (as a percent) | 5.875% | 5.875% |
D I S H D B S Corporation | 5% Senior Notes due 2023 | ||
Long-term debt | ||
Carrying Amount | $ 1,500,000 | $ 1,500,000 |
Fair Value | $ 1,474,080 | $ 1,541,670 |
Interest rate (as a percent) | 5% | 5% |
D I S H D B S Corporation | 5 7/8% Senior Notes due 2024 | ||
Long-term debt | ||
Carrying Amount | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 1,789,840 | $ 2,060,180 |
Interest rate (as a percent) | 5.875% | 5.875% |
D I S H D B S Corporation | 7 3/4% Senior Notes due 2026 | ||
Long-term debt | ||
Carrying Amount | $ 2,000,000 | $ 2,000,000 |
Fair Value | $ 1,538,100 | $ 2,122,700 |
Interest rate (as a percent) | 7.75% | 7.75% |
D I S H D B S Corporation | 5 1/4% Senior Secured Notes due 2026 | ||
Long-term debt | ||
Carrying Amount | $ 2,750,000 | $ 2,750,000 |
Fair Value | $ 2,279,503 | $ 2,792,900 |
Interest rate (as a percent) | 5.25% | 5.25% |
D I S H D B S Corporation | 7 3/8% Senior Notes due 2028 | ||
Long-term debt | ||
Carrying Amount | $ 1,000,000 | $ 1,000,000 |
Fair Value | $ 677,730 | $ 1,017,060 |
Interest rate (as a percent) | 7.375% | 7.375% |
D I S H D B S Corporation | 5 3/4% Senior Secured Notes due 2028 | ||
Long-term debt | ||
Carrying Amount | $ 2,500,000 | $ 2,500,000 |
Fair Value | $ 1,906,050 | 2,520,650 |
Interest rate (as a percent) | 5.75% | |
D I S H D B S Corporation | 5 1/8% Senior Notes due 2029 | ||
Long-term debt | ||
Carrying Amount | $ 1,500,000 | 1,500,000 |
Fair Value | $ 891,195 | $ 1,365,645 |
Interest rate (as a percent) | 5.125% | 5.125% |
D I S H D B S Corporation | Other notes payable | ||
Long-term debt | ||
Carrying Amount | $ 21,012 | $ 21,012 |
Fair Value | $ 21,012 | $ 21,012 |
Commitments and Contingencies -
Commitments and Contingencies - Future maturities of other long term obligations (Details) - Other long-term obligations - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitment and Contingencies | ||
2022 (remaining three months) | $ 1,091,839 | |
2023 | 1,999,047 | |
2024 | 1,228,884 | |
2025 | 713,719 | |
2026 | 657,673 | |
Thereafter | 125,084 | |
Total | 5,816,246 | $ 2,520,000 |
Increase to contractual obligation | $ 3,296,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended | 174 Months Ended | 177 Months Ended | ||||
Sep. 20, 2022 | Jul. 01, 2020 | Sep. 23, 2016 | Sep. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2015 | |
Dish Network | ||||||||
Commitments and Contingencies | ||||||||
Payment to acquire certain wireless licenses and related assets | $ 30,000,000,000 | |||||||
Total investment | $ 30,000,000,000 | |||||||
Dish Network | Spectrum Investments | ||||||||
Commitments and Contingencies | ||||||||
5G Network deployment | $ 10,000,000,000 | $ 10,000,000,000 | ||||||
Northstar Spectrum And SNR Holdco | Dish Network | ||||||||
Commitments and Contingencies | ||||||||
Non-controlling investments | 10,000,000,000 | 10,000,000,000 | $ 10,000,000,000 | |||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | Vermont National Telephone Company | ||||||||
Commitments and Contingencies | ||||||||
Bidding credit credits | 25% | |||||||
Bidding Credit | $ 3,300,000,000 | |||||||
Loss Contingency Recovery Amount | 10,000,000,000 | |||||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | Vermont National Telephone Company | Maximum | ||||||||
Commitments and Contingencies | ||||||||
Claim amount | 11,000 | |||||||
Northstar Wireless or Northstar Spectrum | AWS 3 Auction | Vermont National Telephone Company | Minimum | ||||||||
Commitments and Contingencies | ||||||||
Claim amount | $ 5,500 | |||||||
Spectrum purchase agreement | ||||||||
Commitments and Contingencies | ||||||||
Purchase price | $ 3,590,000,000 | |||||||
Termination fee | $ 72,000,000 | |||||||
ClearPlay, Inc. | ||||||||
Commitments and Contingencies | ||||||||
Loss contingency | 885,000,000 | 885,000,000 | ||||||
TQ Delta LLC [Member] | ||||||||
Commitments and Contingencies | ||||||||
Loss contingency | $ 189,000,000 | $ 189,000,000 | ||||||
Realtime Adaptive Streaming Litigation [Member] | ||||||||
Commitments and Contingencies | ||||||||
Attorney fees awarded | $ 3,900,000 |
Financial Information for Sub_2
Financial Information for Subsidiary Guarantors (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | $ 10,826,309 | $ 11,862,682 |
Unrestricted Subsidiaries | ||
Assets | $ 0 | |
5% Senior Notes due 2023 | ||
Interest rate (as a percent) | 5% | |
5 7/8% Senior Notes due 2024 | ||
Interest rate (as a percent) | 5.875% | |
7 3/4% Senior Notes due 2026 | ||
Interest rate (as a percent) | 7.75% | |
7 3/8% Senior Notes due 2028 | ||
Interest rate (as a percent) | 7.375% | |
5 1/8% Senior Notes due 2029 | ||
Interest rate (as a percent) | 5.125% |
Disaggregation of Revenue - Rev
Disaggregation of Revenue - Revenue by geographic location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue | ||||
Revenue | $ 3,048,315 | $ 3,176,289 | $ 9,302,740 | $ 9,550,696 |
United States | ||||
Disaggregation of Revenue | ||||
Revenue | 3,035,327 | 3,166,822 | 9,270,255 | 9,525,620 |
Canada and Mexico | ||||
Disaggregation of Revenue | ||||
Revenue | $ 12,988 | $ 9,467 | $ 32,485 | $ 25,076 |
Disaggregation of Revenue - R_2
Disaggregation of Revenue - Revenue from external customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue | ||||
Revenue | $ 3,048,315 | $ 3,176,289 | $ 9,302,740 | $ 9,550,696 |
Pay-TV video and related revenue | ||||
Disaggregation of Revenue | ||||
Revenue | 3,018,484 | 3,151,144 | 9,220,562 | 9,465,241 |
Equipment sales and other revenue | ||||
Disaggregation of Revenue | ||||
Revenue | $ 29,831 | $ 25,145 | $ 82,178 | $ 85,455 |
Contract Balances (Details)
Contract Balances (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at Beginning of Period | $ 32,861 |
Current Period Provision For Expected Credit Losses | 48,817 |
Write-offs Charged Against Allowance | (50,788) |
Balance at End of Period | $ 30,890 |
Remaining performance obligations | true |
Contract Balances - Schedule of
Contract Balances - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Contract Balances | ||
Contract liabilities | $ 498,527 | $ 558,700 |
Contract liability recorded as customer contract revenue | $ 547,000 |
Related Party Transactions - DI
Related Party Transactions - DISH Network (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Feb. 11, 2022 USD ($) | Dec. 21, 2012 | Dec. 21, 2012 | Jan. 02, 2012 item | May 31, 2017 | Jul. 31, 2016 | Sep. 30, 2022 USD ($) tranche | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) tranche | Sep. 30, 2021 USD ($) | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2009 item | Dec. 31, 2008 item | Dec. 31, 2021 USD ($) | |
Related Party Transaction [Line Items] | |||||||||||||||
Depreciation and amortization | $ 87,312 | $ 109,919 | $ 272,646 | $ 336,552 | |||||||||||
Interest expense, net of amounts capitalized | 205,633 | 159,783 | 668,212 | 495,971 | |||||||||||
Aggregate principal amount | 6,945,299 | 6,945,299 | $ 5,250,000 | ||||||||||||
Interest income | 306,671 | ||||||||||||||
Interest receivable - DISH Network (Note 13) | $ 143,212 | $ 143,212 | 31,840 | ||||||||||||
5 1/4% Senior Secured Notes due 2026 | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest rate (as a percent) | 5.25% | 5.25% | |||||||||||||
5 3/4% Senior Secured Notes due 2028 | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest rate (as a percent) | 5.75% | 5.75% | |||||||||||||
EchoStar XVI | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Agreement Renewal Option Term | 5 years | ||||||||||||||
Nimiq 5 Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Agreement Renewal Option Term | 1 year | ||||||||||||||
Depreciation and amortization | $ 9,000 | $ 26,000 | 26,000 | ||||||||||||
Interest expense, net of amounts capitalized | 2,000 | 3,000 | 7,000 | 9,000 | |||||||||||
TT&C Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Purchase of renewal of agreement | 1 year | ||||||||||||||
Number of automatic renewal period | item | 4 | ||||||||||||||
Notice period for termination of agreement | 12 months | ||||||||||||||
Office Space from DISH Network | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Expenses associated with services | 3,000 | 2,000 | 8,000 | 5,000 | |||||||||||
Santa Fe Lease Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Additional term of renewal option | 1 year | 1 year | |||||||||||||
Broadband, Wireless and Other Segments | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Expenses associated with services | 33,000 | 26,000 | 89,000 | 66,000 | |||||||||||
EchoStar | EchoStar XVI | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Agreement term from commencement of service date | 4 years | ||||||||||||||
Agreement Renewal Option Term | 1 year | ||||||||||||||
Additional term of renewal option | 5 years | 5 years | |||||||||||||
EchoStar | Telesat Transponder Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Agreement term with third party | 15 years | ||||||||||||||
Number of DBS transponders available to receive services | item | 32 | ||||||||||||||
EchoStar | DISH Nimiq 5 Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Number of DBS transponders currently used | item | 32 | ||||||||||||||
Agreement term | 10 years | ||||||||||||||
EchoStar | QuetzSat-1 Lease Agreement | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Agreement term with third party | 10 years | ||||||||||||||
Number of DBS transponders available to receive services | item | 32 | ||||||||||||||
Number of DBS transponders currently used | item | 24 | ||||||||||||||
Dish Network | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Satellite and transmission expenses | $ 48,000 | $ 56,000 | $ 145,000 | $ 168,000 | |||||||||||
Percent of loan repayable | 100% | ||||||||||||||
Dish Network | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Term of debt instrument | 2 years | ||||||||||||||
Paid in kind Interest rate | 0.75% | 0.75% | |||||||||||||
Number of tranches | tranche | 2 | 2 | |||||||||||||
Aggregate principal amount | $ 6,945,000 | $ 6,945,000 | 5,250,000 | ||||||||||||
Advanced an additional amount | $ 1,500,000 | ||||||||||||||
Fixed rate | 0.25% | 0.25% | |||||||||||||
Interest income | $ 108,000 | $ 307,000 | |||||||||||||
Interest receivable - DISH Network (Note 13) | $ 143,000 | $ 143,000 | $ 32,000 | ||||||||||||
Dish Network | 5 1/4% Senior Secured Notes due 2026 | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest rate (as a percent) | 5.25% | 5.25% | |||||||||||||
Dish Network | 5 3/4% Senior Secured Notes due 2028 | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest rate (as a percent) | 5.75% | 5.75% | |||||||||||||
Dish Network | Minimum | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest payment due | 50% |
Related Party Transactions - Na
Related Party Transactions - NagraStar and Dish Mexico (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Feb. 28, 2017 | |
NagraStar | ||||||
Related Party Transaction [Line Items] | ||||||
Interest on equity method investment | 50% | |||||
Dish Mexico | ||||||
Related Party Transaction [Line Items] | ||||||
Interest on equity method investment | 49% | 49% | ||||
NagraStar | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from NagraStar | $ 10,285 | $ 11,451 | $ 32,713 | $ 35,124 | ||
Amounts payable to NagraStar | 11,434 | 11,434 | $ 11,988 | |||
Commitments to NagraStar | 3,241 | 3,241 | 5,630 | |||
Dish Mexico | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts receivable | 685 | 685 | $ 941 | |||
Dish Mexico | Uplink services | ||||||
Related Party Transaction [Line Items] | ||||||
Sales | $ 709 | $ 1,255 | $ 2,000 | $ 3,700 |