Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2023 | |
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 | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 402,796 | $ 621,975 |
Marketable investment securities | 84,721 | 282,733 |
Trade accounts receivable, net of allowance for credit losses of $45,046 and $40,642, respectively | 542,934 | 660,808 |
Inventory | 283,701 | 307,411 |
Interest receivable - DISH Network (Note 13) | $ 69,960 | |
Interest Receivable Current, Related Party, Name [Extensible Enumeration] | Dish Network | |
Interest Receivable Current, Related Party, Type [Extensible Enumeration] | Related Party [Member] | |
Other current assets | $ 160,509 | 176,935 |
Total current assets | 1,544,621 | 2,049,862 |
Noncurrent Assets: | ||
Restricted cash, cash equivalents and marketable investment securities | 54,271 | 53,525 |
Property and equipment, net | 849,786 | 990,886 |
FCC authorizations | 611,794 | 611,794 |
Other investment securities | 92,222 | 93,806 |
Operating lease assets | 93,294 | 130,454 |
Note receivable - DISH Network (Note 13) | $ 7,381,589 | $ 7,160,116 |
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] |
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Name [Extensible Enumeration] | Dish Network | Dish Network |
Interest receivable - DISH Network (Note 13) | $ 76,111 | $ 36,912 |
Interest Receivable Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] |
Interest Receivable Noncurrent, Related Party, Name [Extensible Enumeration] | Dish Network | Dish Network |
Other noncurrent assets, net | $ 122,855 | $ 116,026 |
Total noncurrent assets | 9,281,922 | 9,193,519 |
Total assets | 10,826,543 | 11,243,381 |
Current Liabilities: | ||
Trade accounts payable | 276,332 | 385,899 |
Deferred revenue and other | 468,355 | 555,151 |
Accrued programming | 1,353,379 | 1,298,777 |
Accrued interest | 222,749 | 180,823 |
Other accrued expenses | 559,380 | 644,574 |
Current portion of long-term debt and finance lease obligations (Note 8) | 50,877 | 1,484,101 |
Total current liabilities | 2,931,072 | 4,549,325 |
Long-Term Obligations, Net of Current Portion: | ||
Long-term debt and finance lease obligations, net of current portion (Note 8) | 11,742,949 | 11,761,407 |
Deferred tax liabilities | 286,632 | 352,748 |
Operating lease liabilities | 59,372 | 75,142 |
Long-term deferred revenue and other long-term liabilities | 218,695 | 209,288 |
Total long-term obligations, net of current portion | 12,307,648 | 12,398,585 |
Total liabilities | 15,238,720 | 16,947,910 |
Commitments and Contingencies (Note 9) | ||
Stockholder's Equity (Deficit): | ||
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,015 shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 1,545,606 | 1,532,906 |
Accumulated other comprehensive income (loss) | (2,468) | (2,445) |
Accumulated earnings (deficit) | (5,955,315) | (7,234,990) |
Total stockholder's equity (deficit) | (4,412,177) | (5,704,529) |
Total liabilities and stockholder's equity (deficit) | $ 10,826,543 | $ 11,243,381 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Allowance for credit losses | $ 45,046 | $ 40,642 |
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 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 2,783,387 | $ 3,048,315 | $ 8,680,957 | $ 9,302,740 |
Costs and Expenses (exclusive of depreciation): | ||||
Cost of services | 1,749,627 | 1,896,104 | 5,388,456 | 5,674,014 |
Cost of sales - equipment and other | 24,881 | 22,018 | 64,619 | 64,812 |
Selling, general and administrative expenses | 356,125 | 420,100 | 1,072,027 | 1,185,998 |
Depreciation and amortization | 70,474 | 87,312 | 236,206 | 272,646 |
Total costs and expenses | 2,201,107 | 2,425,534 | 6,761,308 | 7,197,470 |
Operating income (loss) | 582,280 | 622,781 | 1,919,649 | 2,105,270 |
Other Income (Expense): | ||||
Interest income | 112,715 | 112,919 | 344,505 | 323,320 |
Interest expense, net of amounts capitalized | (184,407) | (205,633) | (567,718) | (668,212) |
Other, net | 65 | 493 | (609) | 1,738 |
Total other income (expense) | (71,627) | (92,221) | (223,822) | (343,154) |
Income (loss) before income taxes | 510,653 | 530,560 | 1,695,827 | 1,762,116 |
Income tax (provision) benefit, net | (121,899) | (122,223) | (416,152) | (426,188) |
Net income (loss) | 388,754 | 408,337 | 1,279,675 | 1,335,928 |
Comprehensive Income (Loss): | ||||
Net income (loss) | 388,754 | 408,337 | 1,279,675 | 1,335,928 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (200) | (412) | (11) | (1,106) |
Unrealized holding gains (losses) on available-for-sale debt securities | (1) | 86 | 12 | 16 |
Deferred income tax (expense) benefit, net | (4) | (13) | (24) | 1 |
Total other comprehensive income (loss), net of tax | (205) | (339) | (23) | (1,089) |
Comprehensive income (loss) | 388,549 | 407,998 | 1,279,652 | 1,334,839 |
Service revenue | ||||
Revenue: | ||||
Total revenue | 2,759,948 | 3,018,484 | 8,536,453 | 9,220,562 |
Equipment sales and other revenue | ||||
Revenue: | ||||
Total revenue | $ 23,439 | $ 29,831 | $ 144,504 | $ 82,178 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED 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, 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) |
Balance at Dec. 31, 2022 | 1,532,906 | (2,445) | (7,234,990) | (5,704,529) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 6,131 | 6,131 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | 12 | 12 | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (13) | (13) | ||
Foreign currency translation | 136 | 136 | ||
Net income (loss) | 433,283 | 433,283 | ||
Balance at Mar. 31, 2023 | 1,539,037 | (2,310) | (6,801,707) | (5,264,980) |
Balance at Dec. 31, 2022 | 1,532,906 | (2,445) | (7,234,990) | (5,704,529) |
Increase (Decrease) in Stockholder's Equity | ||||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (24) | |||
Net income (loss) | 1,279,675 | |||
Balance at Sep. 30, 2023 | 1,545,606 | (2,468) | (5,955,315) | (4,412,177) |
Balance at Mar. 31, 2023 | 1,539,037 | (2,310) | (6,801,707) | (5,264,980) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 4,273 | 4,273 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | 1 | 1 | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (7) | (7) | ||
Foreign currency translation | 53 | 53 | ||
Net income (loss) | 457,638 | 457,638 | ||
Balance at Jun. 30, 2023 | 1,543,310 | (2,263) | (6,344,069) | (4,803,022) |
Increase (Decrease) in Stockholder's Equity | ||||
Non-cash, stock-based compensation | 2,296 | 2,296 | ||
Change in unrealized holding gains (losses) on available-for-sale debt securities, net | (1) | (1) | ||
Deferred income tax (expense) benefit attributable to other comprehensive income (loss) | (4) | (4) | ||
Foreign currency translation | (200) | (200) | ||
Net income (loss) | 388,754 | 388,754 | ||
Balance at Sep. 30, 2023 | $ 1,545,606 | $ (2,468) | $ (5,955,315) | $ (4,412,177) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 1,279,675 | $ 1,335,928 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||
Depreciation and amortization | 236,206 | 272,646 |
Realized and unrealized losses (gains) on investments and other | (804) | 1,149 |
Non-cash, stock-based compensation | 12,700 | 32,934 |
Deferred tax expense (benefit) | (66,140) | (89,258) |
Changes in allowance for credit losses | 4,404 | (1,971) |
Other, net | 32,376 | 36,492 |
Non-cash interest income - DISH Network | (260,671) | (306,671) |
Changes in current assets and current liabilities, net | (68,964) | (156,593) |
Net cash flows from operating activities | 1,168,782 | 1,124,656 |
Cash Flows From Investing Activities: | ||
(Purchases) Sales and maturities of marketable investment securities, net | 198,024 | 1,610,795 |
Purchases of property and equipment | (98,728) | (87,045) |
Notes receivable - DISH Network | (1,500,000) | |
Other, net | 3,914 | 3,817 |
Net cash flows from investing activities | 103,210 | 27,567 |
Cash Flows From Financing Activities: | ||
Repayment of long-term debt and finance lease obligations | (39,987) | (31,022) |
Redemption and repurchases of senior notes | (1,451,250) | (2,000,000) |
Other, net | 812 | (1,138) |
Net cash flows from financing activities | (1,490,425) | (2,032,160) |
Net increase (decrease) in cash, cash equivalents, restricted cash and cash equivalents | (218,433) | (879,937) |
Cash, cash equivalents, restricted cash and cash equivalents, beginning of period (Note 4) | 675,500 | 1,428,618 |
Cash, cash equivalents, restricted cash and cash equivalents, end of period (Note 4) | $ 457,067 | $ 548,681 |
Organization and Business Activ
Organization and Business Activities | 9 Months Ended |
Sep. 30, 2023 | |
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, Latino and Freestream video programming services (“SLING TV”). As of September 30, 2023, we had Recent Developments As previously disclosed, on August 8, 2023, our parent, DISH Network, entered into an Agreement and Plan of Merger (the “Original Merger Agreement”) with EchoStar and Eagle Sub Corp, a Nevada corporation and a wholly owned subsidiary of DISH Network (“Eagle Sub”), providing for the merger of Eagle Sub with and into EchoStar, with EchoStar surviving the merger as a wholly owned subsidiary of DISH Network. On October 2, 2023, DISH Network entered into an Amended and Restated Agreement and Plan of Merger (the “Amended Merger Agreement”) with EchoStar and EAV Corp., a Nevada corporation and a wholly owned subsidiary of EchoStar (“Merger Sub”), which revises the structure of the merger of DISH Network and EchoStar. The Amended Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into DISH Network (the “Merger”), with DISH Network surviving the Merger as a wholly owned subsidiary of EchoStar. DISH Network’s Board of Directors, acting upon the unanimous recommendation of a special transaction committee of independent directors of its Board of Directors (the “DISH Network Special Committee”), unanimously approved, adopted and declared advisable the Amended Merger Agreement and the transactions contemplated by the Amended Merger Agreement. For more information and a copy of the Amended Merger Agreement see the Form 8-K of DISH Network Corporation filed on October 3, 2023. Other Developments Cyber-Security Incident On February 23, 2023, our parent, DISH Network, announced on its quarterly earnings call that we had experienced a network outage that affected internal servers and IT telephony. We immediately activated our incident response and business continuity plans designed to contain, assess and remediate the situation. We engaged the services of cyber-security experts and outside advisors to assist in the evaluation of the situation, and once we determined that the outage was due to a cyber-security incident, we promptly notified appropriate law enforcement authorities. On February 28, 2023, we further disclosed that certain data had been extracted from our IT systems as part of this incident. Our investigation into the extent of the incident is now completed. We have determined that our customer databases were not accessed in this incident. However, we have confirmed that certain employee-related records as well as a limited number of other records containing personal information were among the data extracted. We have taken steps to protect the affected records and personal information, and we received confirmation that the extracted data has been deleted. While we have no evidence that this data has been misused, we have notified individuals whose data was extracted. Our DISH TV and SLING TV services remained operational at all times during the incident. As of March 31, 2023, all significant systems had been restored. During the first quarter of 2023, we and our parent, DISH Network, incurred substantially all of our cyber-security-related expenses for this matter, including, but not limited to, costs to remediate the incident and provide additional customer support. During the second and third quarters of 2023, we and our parent, DISH Network, did not incur additional material expenses resulting from the cyber-security incident and do not expect to incur material expenses in future periods. During the nine months ended September 30, 2023, we and our parent, DISH Network, incurred approximately million in cyber-security-related expenses, which are recorded in “Cost of services” on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. 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 (“VIEs”) 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 based on historical experience and other reasonable assumptions 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, 2023 and December 31, 2022, 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, 2023 and 2022, we capitalized million for the three months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2023 and 2022, we capitalized million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023 and December 31, 2022, we had a total of 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, 2023 and 2022, 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, 2023 and 2022, 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, 2023 | |
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, 2023 2022 (In thousands) Cash paid for interest $ 506,172 $ 657,039 Cash received for interest 10,706 13,456 Cash paid for income taxes 11,978 27,395 Cash paid for income taxes to DISH Network 568,689 489,819 Vendor financing 26,751 — 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, 2023 | |
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, 2023 2022 (In thousands) Marketable investment securities: Current marketable investment securities $ 84,721 $ 282,733 Restricted cash and cash equivalents (1) 54,271 53,525 Other investment securities: Other investment securities 92,222 93,806 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 231,214 $ 430,064 (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 “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, 2023 and December 31, 2022, 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 are recorded at fair value 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, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 440,968 $ 54,577 $ 386,391 $ — $ 650,523 $ 99,437 $ 551,086 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ — $ — $ — $ — $ 7,727 $ 7,727 $ — $ — Commercial paper 77,767 — 77,767 — 227,787 — 227,787 — Corporate securities 5,670 — 5,670 — 46,764 — 46,764 — Other 1,284 — 1,284 — 455 — 455 — Total $ 84,721 $ — $ 84,721 $ — $ 282,733 $ 7,727 $ 275,006 $ — As of September 30, 2023, restricted and non-restricted marketable investment securities included debt securities of $85 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: 2023 2022 2023 2022 (In thousands) Gains (losses) related to early redemption of debt $ 755 $ — $ 804 $ (1,149) Equity in earnings (losses) of affiliates (891) (143) (1,656) 1,818 Other 201 636 243 1,069 Total $ 65 $ 493 $ (609) $ 1,738 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Inventory | 5. Inventory Inventory consisted of the following: As of September 30, December 31, 2023 2022 (In thousands) Finished goods $ 229,182 $ 252,939 Work-in-process and service repairs 34,053 19,351 Raw materials 20,466 35,121 Total inventory $ 283,701 $ 307,411 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment consisted of the following: Depreciable As of Life September 30, December 31, (In Years) 2023 2022 (In thousands) Equipment leased to customers 2 - 5 $ 1,223,198 $ 1,309,737 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 Satellites acquired under finance lease agreements 15 174,685 174,685 Furniture, fixtures, equipment and other 2 - 20 1,058,612 1,054,619 Software 3 - 5 881,334 859,911 Buildings and improvements 5 - 40 294,883 295,375 Land - 12,505 12,505 Construction in progress - 43,702 35,326 Total property and equipment 4,377,832 4,431,071 Accumulated depreciation (3,528,046) (3,440,185) Property and equipment, net $ 849,786 $ 990,886 Depreciation and amortization expense consisted of the following: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Equipment leased to customers $ 34,469 $ 47,737 $ 126,034 $ 148,750 Satellites 20,073 20,073 60,219 63,942 Buildings, furniture, fixtures, equipment and other 15,932 19,502 49,953 59,954 Total depreciation and amortization $ 70,474 $ 87,312 $ 236,206 $ 272,646 Cost of sales and operating expense categories included in our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) do not include depreciation and amortization expense related to satellites, equipment leased to customers or software. Satellites Pay-TV Satellites. We currently utilize of which we own and depreciate over their estimated useful life. We currently utilize certain capacity on satellites that we lease from DISH Network, 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 satellite from a third-party: Anik F3, which is accounted for as an operating lease. As of July 2023, we no longer lease the Ciel II satellite. As of September 30, 2023, 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 Under Construction: EchoStar XXV (1) 2026 110 N/A Leased from DISH Network (2): EchoStar X February 2006 110 February 2024 EchoStar XI July 2008 110 February 2024 EchoStar XIV March 2010 119 February 2024 EchoStar XVI November 2012 61.5 January 2024 EchoStar XXIII March 2017 110 Month to month Nimiq 5 September 2009 72.7 September 2024 Leased from Other Third-Party: Anik F3 April 2007 118.7 April 2025 (1) On March 20, 2023, DISH Network entered into a contract with Maxar Space LLC for the construction of EchoStar XXV, a DBS satellite that is capable of providing service to the continental United States (“CONUS”) and is intended to be used at the 110 degree orbital location. Subsequent to September 30, 2023, DISH Network entered into an agreement with Space Exploration Technologies Corp (“SpaceX”) for launch services for this satellite, which is expected to be launched during 2026. (2) See Note 13 for further information on our Related Party Transactions with DISH Network . |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 7. Leases We enter into non-cancelable 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 nine years , some of which include renewal options , and some of which include options to terminate the leases within one year . For certain arrangements, the lease term includes the non-cancelable period plus the renewal period that we are reasonably certain to exercise. 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. The components of lease expense were as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Operating lease cost (1) $ 14,109 $ 42,585 $ 57,116 $ 124,187 Short-term lease cost (1)(2) 46,080 16,143 123,379 58,132 Finance lease cost: Amortization of right-of-use assets 8,591 8,619 25,815 29,703 Interest on lease liabilities 1,096 2,009 3,992 6,777 Total finance lease cost 9,687 10,628 29,807 36,480 Total lease costs $ 69,876 $ 69,356 $ 210,302 $ 218,799 (1) The decrease in “Operating lease cost” is primarily related to our intercompany satellite leases with DISH Network, which were reclassified to “Short-term lease costs” during 2022 and the first quarter of 2023. All of our satellite operating leases with DISH Network are now short-term leases. (2) Leases that have terms of 12 months or less. Supplemental cash flow information related to leases was as follows: For the Nine Months Ended September 30, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 82,919 $ 122,987 Operating cash flows from finance leases $ 5,780 $ 6,735 Financing cash flows from finance leases $ 37,167 $ 31,022 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 20,030 $ 70,115 Finance leases $ — $ — Supplemental balance sheet information related to leases was as follows: As of September 30, December 31, 2023 2022 (In thousands) Operating Leases: Operating lease assets $ 93,294 $ 130,454 Other current liabilities $ 39,119 $ 60,203 Operating lease liabilities 59,372 75,142 Total operating lease liabilities $ 98,491 $ 135,345 Finance Leases: Property and equipment, gross $ 175,704 $ 175,704 Accumulated depreciation (141,305) (115,469) Property and equipment, net $ 34,399 $ 60,235 Other current liabilities $ 40,967 $ 38,102 Other long-term liabilities — 31,104 Total finance lease liabilities $ 40,967 $ 69,206 Weighted Average Remaining Lease Term: Operating leases 4.0 years 3.7 years Finance leases 1.0 years 1.8 years Weighted Average Discount Rate: Operating leases 7.5% 7.2% Finance leases 10.0% 10.0% Maturities of lease liabilities as of September 30, 2023 were as follows: Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2023 (remaining three months) $ 13,354 $ 10,716 $ 24,070 2024 39,125 32,147 71,272 2025 22,789 — 22,789 2026 12,540 — 12,540 2027 6,787 — 6,787 Thereafter 23,470 — 23,470 Total lease payments 118,065 42,863 160,928 Less: Imputed interest (19,574) (1,896) (21,470) Total 98,491 40,967 139,458 Less: Current portion (39,119) (40,967) (80,086) Long-term portion of lease obligations $ 59,372 $ — $ 59,372 |
Long-Term Debt and Finance Leas
Long-Term Debt and Finance Lease Obligations | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022: As of September 30, 2023 December 31, 2022 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) 5% Senior Notes due 2023 (1) $ — $ — $ 1,443,179 $ 1,441,635 5 7/8 % Senior Notes due 2024 (2) 1,989,139 1,855,529 2,000,000 1,870,940 7 3/4 % Senior Notes due 2026 2,000,000 1,504,760 2,000,000 1,620,280 5 1/4 % Senior Secured Notes due 2026 2,750,000 2,338,683 2,750,000 2,336,813 7 3/8 % Senior Notes due 2028 1,000,000 634,930 1,000,000 708,320 5 3/4 % Senior Secured Notes due 2028 2,500,000 1,928,025 2,500,000 2,013,675 5 1/8 % Senior Notes due 2029 1,500,000 841,710 1,500,000 976,755 Other notes payable 42,260 42,260 18,329 18,329 Subtotal 11,781,399 $ 9,145,897 13,211,508 $ 10,986,747 Unamortized deferred financing costs and debt discounts, net (28,540) (35,206) Finance lease obligations (3) 40,967 69,206 Total long-term debt and finance lease obligations (including current portion) $ 11,793,826 $ 13,245,508 (1) We had repurchased or redeemed the principal balance of our 5% Senior Notes due 2023 as of March 15, 2023, the instrument’s maturity date. (2) During both the three and nine months ended September 30, 2023, we repurchased approximately $11 million of our 5 7/8% Senior Notes due 2024 in open market trades. The remaining balance of approximately $1.989 billion matures on November 15, 2024. (3) Disclosure regarding fair value of finance leases is not required. We estimated the fair value of our publicly traded long-term debt using market prices in less active markets (Level 2). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 have not changed materially, other than those disclosed below. “Other long-term obligations” totaled $3.705 billion as of September 30, 2023 and $5.146 billion as of December 31, 2022. As of September 30, 2023, our future “Other long-term obligations” were as follows: For the Years Ending December 31, Other Long-Term Obligations (1) (In thousands) 2023 (remaining three months) $ 963,970 2024 1,351,825 2025 739,613 2026 524,473 2027 125,084 Thereafter — Total $ 3,704,965 (1) Represents obligations associated with DISH Network’s Wireless segment 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. On March 20, 2023, DISH Network entered into a contract with Maxar Space LLC and is intended to be used at the 110 degree orbital location. This satellite is expected to be launched during 2026. Subsequent to September 30, 2023, DISH Network entered into an agreement with SpaceX for launch services for this satellite, which is expected to be launched during 2026. The satellite construction costs for EchoStar XXV and any future lease obligations are not included in “Other long-term obligations” above. DISH Network’s Spectrum and 5G Network Deployment DISH Network has invested a total of over $30 billion in wireless spectrum licenses, which includes over $10 billion in noncontrolling investments in certain entities. 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”). , billion, including amounts incurred in 2021, 2022 and in the first nine months of 2023. DISH Network may need to make significant additional investments or partner with others to, among other things, continue 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 continues its 5G Network Deployment, DISH Network has and may continue to incur significant additional expenses related to, among other things, research and development, wireless testing and ongoing upgrades to the wireless network infrastructure, software and third-party integration. DISH Network may also determine that additional wireless spectrum licenses may be required for its 5G Network Deployment and to compete effectively 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, including, among other things, any potential Northstar re-auction payment. There can be no assurance that DISH Network will realize a return on these wireless spectrum licenses or that DISH Network will be able to profitably deploy 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, among other things, a spectrum purchase agreement for the option to purchase all of Sprint’s 800 MHz spectrum licenses for approximately billion (“License Purchase Agreement”). included in “Other long-term obligations” above. million per the License Purchase Agreement, under certain circumstances. In conjunction with an amendment that modifies the License Purchase Agreement, the million related to an extension of the deadline to April 1, 2024. DISH Network paid the million on October 25, 2023. This amount from T-Mobile. DISH Network Noncontrolling 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 noncontrolling 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. Subsequent to September 30, 2023, 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 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 and 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 – DISH Network Noncontrolling 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 SNR Entities related to DISH Network’s noncontrolling investments in this entity. There can be no assurance that DISH Network will be able to obtain a profitable return on its noncontrolling investments in the SNR Entities. We may need to raise 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 – 5G Network Deployment” 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. 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, and in May 2017, ClearPlay agreed to dismiss us and EchoStar as defendants, leaving DISH Network L.L.C. and DISH Technologies L.L.C. as the sole defendants. 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 January 19, 2023, an examiner of the United States Patent and Trademark Office affirmed the challenged claims of the 970 patent. In an order dated January 31, 2023, the Court granted in part and denied in part DISH Network L.L.C.’s and DISH Technologies L.L.C.’s motion for summary judgment. Thereafter, ClearPlay narrowed its case to three asserted claims: one under the 799 patent and two under the 970 patent. Following a two-week trial, on March 10, 2023, the jury returned a verdict that DISH Network L.L.C. and DISH Technologies L.L.C. infringed each of the asserted patent claims (though not willfully), and awarded damages of million. That verdict became moot on March 21, 2023, when the trial court indicated that it would grant DISH Network L.L.C.’s and DISH Technologies L.L.C.’s motion for judgment as a matter of law, thus effectively vacating the jury award. On June 2, 2023, the Court entered its formal order granting judgment as a matter of law. 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. Data Breach Class Actions On May 9, 2023, Susan Owen-Brooks, an alleged customer, filed a putative class action complaint against DISH Network in the United States District Court for the District of Colorado. She purports to represent a nationwide class of all individuals in the United States who allegedly had private information stolen as a result of the February 23, 2023 Cyber-security Incident (and a North Carolina statewide subclass of the same individuals). On behalf of the nationwide class, she alleges claims for contractual breaches, negligence and unjust enrichment (and, on behalf of the North Carolina subclass only, violation of the North Carolina Deceptive Trade Practices Act), and seeks monetary damages, injunctive relief and a declaratory judgment. Since that filing, additional putative class action complaints have been filed in the United States District Court for the District of Colorado, purporting to represent the same nationwide class of people, and Owen-Brooks has filed an amended complaint. On August 2, 2023, the Court issued an order consolidating the first ten cases (the eleventh was dismissed). 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. 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. On June 21, 2023, the Court granted the motion of DISH Network L.L.C. and DISH Technologies L.L.C. to have the case transferred to the United States District Court for the District of Colorado. In May 2023, DISH Network L.L.C. and DISH Technologies L.L.C. 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 (first action) 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. In January and February of 2023, DISH Network L.L.C. and Dish Network Service L.L.C. filed petitions with the United States Patent and Trademark Office challenging the validity of all claims of the 715 patent, all claims of the 008 patent, and 25 claims of the 576 patent, which includes all of its asserted claims. In August and September 2023, the Patent Office denied institution on the petitions challenging the 715 patent and the 576 patent. In September 2023, at the parties’ joint request, the Patent Office dismissed the petition challenging the 008 patent, as Entropic agreed to drop its claims against DISH Network on that patent. 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 (second action) On February 10, 2023, Entropic filed a second lawsuit against DISH Network DISH Network L.L.C., Dish Network Service L.L.C. and Dish Network California Service Corporation in the United States District Court for the Central District of California. The complaint alleges infringement of U.S. Patent No. 7,295,518 (the “518 patent”), entitled “Broadband network for coaxial cable using multi-carrier modulation”; U.S. Patent No. 7,594,249 (the “249 patent”), entitled “Network interface device and broadband local area network using coaxial cable”; U.S. Patent Nos. 7,889,759 (the “759 patent”), entitled “Broadband cable network utilizing common bit-loading”; U.S. Patent No. 8,085,802 (the “802 Patent”), entitled “Multimedia over coaxial cable access protocol”; U.S. Patent No. 9,838,213 (the “213 patent”), entitled “Parameterized quality of service architecture in a network”; U.S. Patent No. 10,432,422 (the “422 patent”), entitled “Parameterized quality of service architecture in a network”; U.S. Patent No. 8,631,450 (the “450 patent”), entitled “Broadband local area network”; U.S. Patent No. 8,621,539 (the “539 patent”), entitled “Physical layer transmitter for use in a broadband local area network”; U.S. Patent No. 8,320,566 (the “0,566 patent”), entitled “Method and apparatus for performing constellation scrambling in a multimedia home network”; U.S. Patent No. 10,257,566 (the “7,566 patent”), entitled “Broadband local area network”; U.S. Patent No. 8,228,910 (the “910 Patent”), entitled “Aggregating network packets for transmission to a destination mode”; and U.S. Patent No. 8,363,681 (the “681 patent”), entitled “Method and apparatus for using ranging measurements in a multimedia home network.” Generally, the patents relate to Multimedia over Coax Alliance standards and the manner in which we provide a whole-home DVR network over an on-premises coaxial cable network. Entropic has asserted the same patents in the same court against Comcast, Cox and . On September 7, 2023, the Court granted the motion of DISH Network L.L.C., Dish Network Service L.L.C. and Dish Network California Service Corporation to dismiss the claims arising from the 7,566 patent and the 910 patent on the grounds that they claimed in eligible subject matter. 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. Freedom Patents On April 7, 2023, Freedom Patents LLC 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. 8,284,686 (the “686 Patent”), entitled “Antenna/Beam Selection Training in MIMO Wireless LANS with Different Sounding Frames”; U.S. Patent No. 8,374,096 (the “096 Patent”), entitled “Method for Selecting Antennas and Beams in MIMO Wireless LANs”; and U.S. Patent No. 8,514,815 (the “815 Patent”), entitled “Training Signals for Selecting Antennas and Beams in MIMO Wireless LANs.” Similar complaints were also filed against Acer, Altice, Charter, Comcast and Verizon. In general, the asserted patents relate to the 802.11 wireless standard, and the products accused of infringement are the Wireless Joey, its access point, and certain Ring, Nest and Linksys products that we sell. 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. Jaramillo (Securities Class Action) On March 23, 2023, a securities fraud class action complaint was filed against DISH Network and Messrs. Ergen, Carlson and Orban in the United States District Court for the District of Colorado. The complaint is brought on behalf of a putative class of purchasers of DISH Network’s securities during the February 22, 2021 to February 27, 2023 class period. In general, the complaint alleges that DISH Network’s public statements during that period were false and misleading and contained material omissions, because they did not disclose that we allegedly maintained a deficient cyber-security and information technology infrastructure, were unable to properly secure customer data and our operations were susceptible to widespread service outages. In August 2023, the Court appointed a new lead plaintiff and lead plaintiff’s counsel, and on October 20, 2023, they filed an amended complaint that abandoned the original allegations. In their amended complaint, plaintiffs allege that, during the class period, the defendants concealed problems concerning the 5G network buildout that prevented scaling and commercializing the network to obtain enterprise customers. The amended complaint adds as individual defendants James S. Allen, our Senior Vice President and Chief Accounting Officer; John Swieringa, our President, Technology and Chief Operating Officer; Dave Mayo, our former Executive Vice President of Network Development; Marc Rouanne, our Executive Vice President and Chief Network Officer; and Stephen Bye, our former Executive Vice President and Chief Commercial Officer. 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. 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. On February 1, 2023, a Magistrate Judge issued a recommendation that the defendants’ motion to dismiss the complaint be granted, and on March 27, 2023, the district court judge granted the motion. As permitted by the Court’s order, the plaintiffs filed an amended complaint on April 10, 2023, which is limited to allegations regarding the alleged underperformance of the Fidelity Freedom Funds. On November 7, 2023, a Magistrate Judge issued a recommendation that the defendants’ motion to dismiss the amended complaint be denied as to the duty to prudently monitor fund performance, but be granted as to the duty of loyalty. 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.’s 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 infringes 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 |
Financial Information for Subsi
Financial Information for Subsidiary Guarantors | 9 Months Ended |
Sep. 30, 2023 | |
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 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, 2023 | |
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: 2023 2022 2023 2022 (In thousands) United States $ 2,773,411 $ 3,035,327 $ 8,650,080 $ 9,270,255 Canada and Mexico 9,976 12,988 30,877 32,485 Total revenue $ 2,783,387 $ 3,048,315 $ 8,680,957 $ 9,302,740 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: 2023 2022 2023 2022 (In thousands) Pay-TV subscriber and related revenue $ 2,759,948 $ 3,018,484 $ 8,536,453 $ 9,220,562 Equipment sales and other revenue 23,439 29,831 144,504 82,178 Total $ 2,783,387 $ 3,048,315 $ 8,680,957 $ 9,302,740 |
Contract Balances
Contract Balances | 9 Months Ended |
Sep. 30, 2023 | |
Contract Balances | |
Contract Balances | 12. Contract Balances Our valuation and qualifying accounts as of September 30, 2023 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, 2023 $ 40,642 $ 52,577 $ (48,173) $ 45,046 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, 2023 2022 (In thousands) Contract liabilities $ 462,070 $ 506,815 Our beginning of period contract liability recorded as customer contract revenue during 2023 was $501 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, 2023 | |
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, 2023 and December 31, 2022 and during the three and nine months ended September 30, 2023 and 2022, none of these agreements with EchoStar had a material impact on our financial condition or our results of operations. 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 accrues and is payable semiannually, and interest payments with respect to the Intercompany Loan are, at DISH Network’s option, payable in kind for the first two years . In the third year, beginning November 2023, a minimum of 50% of each interest payment due with respect to each tranche of the Intercompany Loan must be paid in cash. Thereafter, beginning in November 2024, interest payments must be paid in cash. Interest accrues: (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 is 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 months ended September 30, 2023 and 2022, we recorded $110 million and $108 million of “Interest income,” respectively, on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the nine months ended September 30, 2023 and 2022, we recorded $331 million and $307 million of “Interest income,” respectively, on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As of September 30, 2023 and December 31, 2022, “ Notes receivable – DISH Network” on our Condensed Consolidated Balance Sheets was $7.382 billion and $7.160 billion, respectively, including interest paid in kind. In addition, as of September 30, 2023 and December 31, 2022, “ Interest receivable – DISH Network” on our Condensed Consolidated Balance Sheets was $146 million ( $70 million which must be paid in cash and $76 million which may be paid in kind ), and $37 million (which was paid in kind), respectively. “Accrued Taxes - DISH Network” As of September 30, 2023, we accrued “Cost of services” During the three months ended September 30, 2023 and 2022, we incurred expenses of $52 million and $48 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, 2023 and 2022, 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 have renewed and have the option to renew this agreement on a year-to-year basis through the end of the satellite’s life. 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. EchoStar XXIII. On March 1, 2023, we began leasing certain capacity on the EchoStar XXIII satellite from DISH Network on a month to month basis. 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 2024. As discussed in Note 6, “Property and Equipment,” 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, 2023 and 2022, we recorded $9 million of “Depreciation and amortization” expense and $1 million and $2 million of “Interest expense, net of amounts capitalized,” respectively, related to Nimiq 5. During each of the nine months ended September 30, 2023 and 2022, we recorded $26 million of “Depreciation and amortization” expense and $4 million and $7 million of “Interest expense, net of amounts capitalized,” respectively, related to Nimiq 5. TT&C Agreement. Effective January 1, 2012, we entered into a TT&C agreement pursuant to which we received 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 were 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 were 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 each of the three months ended September 30, 2023 and 2022, we incurred $3 million for selling, general and administrative expenses for services provided to us by DISH Network. During the nine months ended September 30, 2023 and 2022, 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 the remaining lease is set forth below: ● 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, 2023 and 2022, the costs associated with these services were During the nine months ended September 30, 2023 and 2022, 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, 2023 2022 2023 2022 (In thousands) Purchases (including fees): Purchases from NagraStar $ 8,972 $ 10,285 $ 28,012 $ 32,713 As of September 30, December 31, 2023 2022 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 7,235 $ 7,422 Commitments to NagraStar $ 2,504 $ 3,272 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. 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 (“VIEs”) 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 based on historical experience and other reasonable assumptions 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, 2023 and December 31, 2022, 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, 2023 and 2022, we capitalized million for the three months ended September 30, 2023 and 2022, respectively. During the nine months ended September 30, 2023 and 2022, we capitalized million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023 and December 31, 2022, we had a total of 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, 2023 and 2022, 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, 2023 and 2022, 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, 2023 | |
Supplemental Data - Statements of Cash Flows | |
Schedule of supplemental cash flow and other non-cash data | For the Nine Months Ended September 30, 2023 2022 (In thousands) Cash paid for interest $ 506,172 $ 657,039 Cash received for interest 10,706 13,456 Cash paid for income taxes 11,978 27,395 Cash paid for income taxes to DISH Network 568,689 489,819 Vendor financing 26,751 — |
Marketable Investment Securit_2
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 2022 (In thousands) Marketable investment securities: Current marketable investment securities $ 84,721 $ 282,733 Restricted cash and cash equivalents (1) 54,271 53,525 Other investment securities: Other investment securities 92,222 93,806 Total marketable investment securities, restricted cash and cash equivalents, and other investment securities $ 231,214 $ 430,064 (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, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents (including restricted) $ 440,968 $ 54,577 $ 386,391 $ — $ 650,523 $ 99,437 $ 551,086 $ — Debt securities (including restricted): U.S. Treasury and agency securities $ — $ — $ — $ — $ 7,727 $ 7,727 $ — $ — Commercial paper 77,767 — 77,767 — 227,787 — 227,787 — Corporate securities 5,670 — 5,670 — 46,764 — 46,764 — Other 1,284 — 1,284 — 455 — 455 — Total $ 84,721 $ — $ 84,721 $ — $ 282,733 $ 7,727 $ 275,006 $ — |
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: 2023 2022 2023 2022 (In thousands) Gains (losses) related to early redemption of debt $ 755 $ — $ 804 $ (1,149) Equity in earnings (losses) of affiliates (891) (143) (1,656) 1,818 Other 201 636 243 1,069 Total $ 65 $ 493 $ (609) $ 1,738 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Schedule of inventory | As of September 30, December 31, 2023 2022 (In thousands) Finished goods $ 229,182 $ 252,939 Work-in-process and service repairs 34,053 19,351 Raw materials 20,466 35,121 Total inventory $ 283,701 $ 307,411 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Schedule of property and equipment | Depreciable As of Life September 30, December 31, (In Years) 2023 2022 (In thousands) Equipment leased to customers 2 - 5 $ 1,223,198 $ 1,309,737 EchoStar XV 15 277,658 277,658 EchoStar XVIII 15 411,255 411,255 Satellites acquired under finance lease agreements 15 174,685 174,685 Furniture, fixtures, equipment and other 2 - 20 1,058,612 1,054,619 Software 3 - 5 881,334 859,911 Buildings and improvements 5 - 40 294,883 295,375 Land - 12,505 12,505 Construction in progress - 43,702 35,326 Total property and equipment 4,377,832 4,431,071 Accumulated depreciation (3,528,046) (3,440,185) Property and equipment, net $ 849,786 $ 990,886 |
Schedule of depreciation and amortization expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Equipment leased to customers $ 34,469 $ 47,737 $ 126,034 $ 148,750 Satellites 20,073 20,073 60,219 63,942 Buildings, furniture, fixtures, equipment and other 15,932 19,502 49,953 59,954 Total depreciation and amortization $ 70,474 $ 87,312 $ 236,206 $ 272,646 |
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 Under Construction: EchoStar XXV (1) 2026 110 N/A Leased from DISH Network (2): EchoStar X February 2006 110 February 2024 EchoStar XI July 2008 110 February 2024 EchoStar XIV March 2010 119 February 2024 EchoStar XVI November 2012 61.5 January 2024 EchoStar XXIII March 2017 110 Month to month Nimiq 5 September 2009 72.7 September 2024 Leased from Other Third-Party: Anik F3 April 2007 118.7 April 2025 (1) On March 20, 2023, DISH Network entered into a contract with Maxar Space LLC for the construction of EchoStar XXV, a DBS satellite that is capable of providing service to the continental United States (“CONUS”) and is intended to be used at the 110 degree orbital location. Subsequent to September 30, 2023, DISH Network entered into an agreement with Space Exploration Technologies Corp (“SpaceX”) for launch services for this satellite, which is expected to be launched during 2026. (2) See Note 13 for further information on our Related Party Transactions with DISH Network . |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Summary of the components of lease expense | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Operating lease cost (1) $ 14,109 $ 42,585 $ 57,116 $ 124,187 Short-term lease cost (1)(2) 46,080 16,143 123,379 58,132 Finance lease cost: Amortization of right-of-use assets 8,591 8,619 25,815 29,703 Interest on lease liabilities 1,096 2,009 3,992 6,777 Total finance lease cost 9,687 10,628 29,807 36,480 Total lease costs $ 69,876 $ 69,356 $ 210,302 $ 218,799 (1) The decrease in “Operating lease cost” is primarily related to our intercompany satellite leases with DISH Network, which were reclassified to “Short-term lease costs” during 2022 and the first quarter of 2023. All of our satellite operating leases with DISH Network are now short-term leases. (2) Leases that have terms of 12 months or less. |
Summary of Supplemental cash flow information related to leases | For the Nine Months Ended September 30, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 82,919 $ 122,987 Operating cash flows from finance leases $ 5,780 $ 6,735 Financing cash flows from finance leases $ 37,167 $ 31,022 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 20,030 $ 70,115 Finance leases $ — $ — |
Summary of supplemental balance sheet information related to leases | As of September 30, December 31, 2023 2022 (In thousands) Operating Leases: Operating lease assets $ 93,294 $ 130,454 Other current liabilities $ 39,119 $ 60,203 Operating lease liabilities 59,372 75,142 Total operating lease liabilities $ 98,491 $ 135,345 Finance Leases: Property and equipment, gross $ 175,704 $ 175,704 Accumulated depreciation (141,305) (115,469) Property and equipment, net $ 34,399 $ 60,235 Other current liabilities $ 40,967 $ 38,102 Other long-term liabilities — 31,104 Total finance lease liabilities $ 40,967 $ 69,206 Weighted Average Remaining Lease Term: Operating leases 4.0 years 3.7 years Finance leases 1.0 years 1.8 years Weighted Average Discount Rate: Operating leases 7.5% 7.2% Finance leases 10.0% 10.0% |
Summary of maturities of operating lease liabilities | Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2023 (remaining three months) $ 13,354 $ 10,716 $ 24,070 2024 39,125 32,147 71,272 2025 22,789 — 22,789 2026 12,540 — 12,540 2027 6,787 — 6,787 Thereafter 23,470 — 23,470 Total lease payments 118,065 42,863 160,928 Less: Imputed interest (19,574) (1,896) (21,470) Total 98,491 40,967 139,458 Less: Current portion (39,119) (40,967) (80,086) Long-term portion of lease obligations $ 59,372 $ — $ 59,372 |
Summary of maturities of finance lease liabilities | Maturities of Lease Liabilities Operating Finance For the Years Ending December 31, Leases Leases Total (In thousands) 2023 (remaining three months) $ 13,354 $ 10,716 $ 24,070 2024 39,125 32,147 71,272 2025 22,789 — 22,789 2026 12,540 — 12,540 2027 6,787 — 6,787 Thereafter 23,470 — 23,470 Total lease payments 118,065 42,863 160,928 Less: Imputed interest (19,574) (1,896) (21,470) Total 98,491 40,967 139,458 Less: Current portion (39,119) (40,967) (80,086) Long-term portion of lease obligations $ 59,372 $ — $ 59,372 |
Long-Term Debt and Finance Le_2
Long-Term Debt and Finance Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Long-Term Debt and Finance Lease Obligations | |
Schedule of carrying and fair values of the entity's debt facilities | As of September 30, 2023 December 31, 2022 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) 5% Senior Notes due 2023 (1) $ — $ — $ 1,443,179 $ 1,441,635 5 7/8 % Senior Notes due 2024 (2) 1,989,139 1,855,529 2,000,000 1,870,940 7 3/4 % Senior Notes due 2026 2,000,000 1,504,760 2,000,000 1,620,280 5 1/4 % Senior Secured Notes due 2026 2,750,000 2,338,683 2,750,000 2,336,813 7 3/8 % Senior Notes due 2028 1,000,000 634,930 1,000,000 708,320 5 3/4 % Senior Secured Notes due 2028 2,500,000 1,928,025 2,500,000 2,013,675 5 1/8 % Senior Notes due 2029 1,500,000 841,710 1,500,000 976,755 Other notes payable 42,260 42,260 18,329 18,329 Subtotal 11,781,399 $ 9,145,897 13,211,508 $ 10,986,747 Unamortized deferred financing costs and debt discounts, net (28,540) (35,206) Finance lease obligations (3) 40,967 69,206 Total long-term debt and finance lease obligations (including current portion) $ 11,793,826 $ 13,245,508 (1) We had repurchased or redeemed the principal balance of our 5% Senior Notes due 2023 as of March 15, 2023, the instrument’s maturity date. (2) During both the three and nine months ended September 30, 2023, we repurchased approximately $11 million of our 5 7/8% Senior Notes due 2024 in open market trades. The remaining balance of approximately $1.989 billion matures on November 15, 2024. (3) Disclosure regarding fair value of finance leases is not required. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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) 2023 (remaining three months) $ 963,970 2024 1,351,825 2025 739,613 2026 524,473 2027 125,084 Thereafter — Total $ 3,704,965 (1) Represents obligations associated with DISH Network’s Wireless segment and satellite related and other obligations. |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Disaggregation of Revenue | |
Revenue by geographic region | For the Three Months Ended For the Nine Months Ended September 30, September 30, Revenue: 2023 2022 2023 2022 (In thousands) United States $ 2,773,411 $ 3,035,327 $ 8,650,080 $ 9,270,255 Canada and Mexico 9,976 12,988 30,877 32,485 Total revenue $ 2,783,387 $ 3,048,315 $ 8,680,957 $ 9,302,740 |
Schedule of disaggregation of revenue | For the Three Months Ended For the Nine Months Ended September 30, September 30, Category: 2023 2022 2023 2022 (In thousands) Pay-TV subscriber and related revenue $ 2,759,948 $ 3,018,484 $ 8,536,453 $ 9,220,562 Equipment sales and other revenue 23,439 29,831 144,504 82,178 Total $ 2,783,387 $ 3,048,315 $ 8,680,957 $ 9,302,740 |
Contract Balances (Tables)
Contract Balances (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 $ 40,642 $ 52,577 $ (48,173) $ 45,046 |
Schedule of Contract balances | As of September 30, December 31, 2023 2022 (In thousands) Contract liabilities $ 462,070 $ 506,815 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Schedule of related party transaction | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Purchases (including fees): Purchases from NagraStar $ 8,972 $ 10,285 $ 28,012 $ 32,713 As of September 30, December 31, 2023 2022 (In thousands) Amounts Payable and Commitments: Amounts payable to NagraStar $ 7,235 $ 7,422 Commitments to NagraStar $ 2,504 $ 3,272 |
Organization and Business Act_2
Organization and Business Activities (Details) customer in Thousands, $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) customer | |
Pay TV Subscribers | |
Organization and Business Activities | |
Number of subscribers | 8,840 |
DISH TV subscribers | |
Organization and Business Activities | |
Number of subscribers | 6,720 |
Sling TV subscribers | |
Organization and Business Activities | |
Number of subscribers | 2,120 |
Cyber Security | |
Organization and Business Activities | |
Cyber-Security-related expenses | $ | $ 30 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |||||
Contract cost capitalized during the period | $ 21 | $ 24 | $ 57 | $ 68 | |
Amortization expense related to the programs | 30 | $ 37 | 98 | $ 118 | |
Total costs capitalized | $ 189 | $ 189 | $ 230 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Principles of Consolidation and Research and Development (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Advertising Costs | ||||
Advertising expenses | $ 95 | $ 137 | $ 293 | $ 355 |
Research and Development | ||||
Research and development costs | $ 11 | $ 12 | $ 33 | $ 34 |
Supplemental Data - Statement_3
Supplemental Data - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental Data - Statements of Cash Flows | ||
Cash paid for interest | $ 506,172 | $ 657,039 |
Cash received for interest | 10,706 | 13,456 |
Cash paid for income taxes | 11,978 | 27,395 |
Cash paid for income taxes to DISH Network | 568,689 | $ 489,819 |
Vendor financing | $ 26,751 |
Marketable Investment Securit_3
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Feb. 28, 2017 |
Marketable Investment Securities, Restricted Cash and Cash Equivalents and Other Investment Securities: | |||
Current marketable investment securities | $ 84,721 | $ 282,733 | |
Restricted cash and cash equivalents | 54,271 | 53,525 | |
Other investment securities | 92,222 | 93,806 | |
Total marketable investment securities, restricted cash and cash equivalents, and other investment securities | $ 231,214 | $ 430,064 | |
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, 2023 | |
Commercial Paper | |
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 Millions | Sep. 30, 2023 USD ($) |
Contractual maturities of restricted and non-restricted marketable investment securities | |
Debt securities with contractual maturities within one year | $ 85 |
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, 2023 | Dec. 31, 2022 |
Fair value of marketable securities | ||
Cash equivalents (including restricted) | $ 440,968 | $ 650,523 |
Total | 84,721 | 282,733 |
U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 7,727 | |
Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 77,767 | 227,787 |
Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 5,670 | 46,764 |
Other (including restricted) | ||
Fair value of marketable securities | ||
Debt securities | 1,284 | 455 |
Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 54,577 | 99,437 |
Total | 7,727 | |
Level 1 | U.S. Treasury and agency securities | ||
Fair value of marketable securities | ||
Debt securities | 7,727 | |
Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 386,391 | 551,086 |
Total | 84,721 | 275,006 |
Level 2 | Commercial paper | ||
Fair value of marketable securities | ||
Debt securities | 77,767 | 227,787 |
Level 2 | Corporate securities | ||
Fair value of marketable securities | ||
Debt securities | 5,670 | 46,764 |
Level 2 | Other (including restricted) | ||
Fair value of marketable securities | ||
Debt securities | $ 1,284 | $ 455 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Marketable Investment Securities, Restricted Cash and Cash Equivalents, and Other Investment Securities | ||||
Gains (losses) related to early redemption of debt | $ 755 | $ 804 | $ (1,149) | |
Equity in earnings (losses) of affiliates | (891) | $ (143) | (1,656) | 1,818 |
Other | 201 | 636 | 243 | 1,069 |
Total | $ 65 | $ 493 | $ (609) | $ 1,738 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory | ||
Finished goods | $ 229,182 | $ 252,939 |
Work-in-process and service repairs | 34,053 | 19,351 |
Raw materials | 20,466 | 35,121 |
Total inventory | $ 283,701 | $ 307,411 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property and Equipment | ||
Total property and equipment | $ 4,377,832 | $ 4,431,071 |
Accumulated depreciation | (3,528,046) | (3,440,185) |
Property and equipment, net | 849,786 | 990,886 |
Equipment leased to customers | ||
Property and Equipment | ||
Total property and equipment | $ 1,223,198 | 1,309,737 |
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 | 174,685 |
Depreciable life of assets | 15 years | |
Furniture, fixtures, equipment and other | ||
Property and Equipment | ||
Total property and equipment | $ 1,058,612 | 1,054,619 |
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 | 20 years | |
Software projects | ||
Property and Equipment | ||
Total property and equipment | $ 881,334 | 859,911 |
Software projects | Minimum | ||
Property and Equipment | ||
Depreciable life of assets | 3 years | |
Software projects | Maximum | ||
Property and Equipment | ||
Depreciable life of assets | 5 years | |
Buildings and improvements | ||
Property and Equipment | ||
Total property and equipment | $ 294,883 | 295,375 |
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 | $ 43,702 | $ 35,326 |
Property and Equipment - Deprec
Property and Equipment - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Depreciation and amortization expense | ||||
Depreciation and amortization expense | $ 70,474 | $ 87,312 | $ 236,206 | $ 272,646 |
Equipment leased to customers | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | 34,469 | 47,737 | 126,034 | 148,750 |
Satellites | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | 20,073 | 20,073 | 60,219 | 63,942 |
Buildings, furniture, fixtures, equipment and other | ||||
Depreciation and amortization expense | ||||
Depreciation and amortization expense | $ 15,932 | $ 19,502 | $ 49,953 | $ 59,954 |
Property and Equipment - Pay TV
Property and Equipment - Pay TV Satellites (Details) - Pay-TV Satellites | 9 Months Ended |
Sep. 30, 2023 item | |
Property, Plant and Equipment [Line Items] | |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 9 |
Owned Satellites | 2 |
Number of satellites leased from third parties | 1 |
Related Party | Dish Network | |
Property, Plant and Equipment [Line Items] | |
Number of satellites utilized under operating lease | 6 |
Leases (Details)
Leases (Details) | 9 Months Ended |
Sep. 30, 2023 | |
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 | 9 years |
Remaining lease terms, finance lease | 9 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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||||
Operating lease cost | $ 14,109 | $ 42,585 | $ 57,116 | $ 124,187 |
Short-term lease cost | 46,080 | 16,143 | 123,379 | 58,132 |
Amortization of right-of-use assets | 8,591 | 8,619 | 25,815 | 29,703 |
Interest on lease liabilities | 1,096 | 2,009 | 3,992 | 6,777 |
Total finance lease cost | 9,687 | 10,628 | 29,807 | 36,480 |
Total lease costs | $ 69,876 | $ 69,356 | $ 210,302 | $ 218,799 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||
Operating cash flows from operating leases | $ 82,919 | $ 122,987 |
Operating cash flows from finance leases | 5,780 | 6,735 |
Financing cash flows from finance leases | 37,167 | 31,022 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 20,030 | $ 70,115 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Operating lease assets | $ 93,294 | $ 130,454 |
Other current liabilities | $ 39,119 | $ 60,203 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Accrued Liabilities, Current | Other Accrued Liabilities, Current |
Operating lease liabilities | $ 59,372 | $ 75,142 |
Total operating lease liabilities | $ 98,491 | $ 135,345 |
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 | $ 4,377,832 | $ 4,431,071 |
Accumulated depreciation | (3,528,046) | (3,440,185) |
Property and equipment, net | 849,786 | 990,886 |
Other current liabilities | $ 40,967 | $ 38,102 |
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 | $ 31,104 | |
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 | $ 40,967 | $ 69,206 |
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 | 4 years | 3 years 8 months 12 days |
Weighted Average Remaining Lease Term: Finance leases | 1 year | 1 year 9 months 18 days |
Weighted Average Discount Rate: Operating leases | 7.50% | 7.20% |
Weighted Average Discount Rate: Finance leases | 10% | 10% |
Property and equipment | ||
Leases | ||
Property and equipment, gross | $ 175,704 | $ 175,704 |
Accumulated depreciation | (141,305) | (115,469) |
Property and equipment, net | $ 34,399 | $ 60,235 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Maturities of lease liabilities: Operating leases | ||
2023 (remaining three months) | $ 13,354 | |
2024 | 39,125 | |
2025 | 22,789 | |
2026 | 12,540 | |
2027 | 6,787 | |
Thereafter | 23,470 | |
Total lease payments | 118,065 | |
Less: Imputed interest | (19,574) | |
Total operating lease liabilities | 98,491 | $ 135,345 |
Less: Current portion | (39,119) | (60,203) |
Long-term portion of lease obligations | 59,372 | 75,142 |
Maturities of lease liabilities: Finance leases | ||
2023 (remaining three months) | 10,716 | |
2024 | 32,147 | |
Total lease payments | 42,863 | |
Less: Imputed interest | (1,896) | |
Total finance lease liabilities | 40,967 | 69,206 |
Less: Current portion | (40,967) | (38,102) |
Long-term portion of lease obligations | $ 31,104 | |
Future minimum payments for total lease liabilities | ||
2023 (remaining three months) | 24,070 | |
2024 | 71,272 | |
2025 | 22,789 | |
2026 | 12,540 | |
2027 | 6,787 | |
Thereafter | 23,470 | |
Total lease payments | 160,928 | |
Less: Imputed interest | (21,470) | |
Total | 139,458 | |
Less: Current portion | (80,086) | |
Long-term portion of lease obligations | $ 59,372 |
Long-Term Debt and Finance Le_3
Long-Term Debt and Finance Lease Obligations - Long term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Long-term debt | ||
Finance lease obligations | $ 40,967 | $ 69,206 |
5 7/8% Senior Notes due 2024 | ||
Long-term debt | ||
Interest rate (as a percent) | 5.875% | |
Debt repurchased | $ 11,000 | |
Outstanding debt | $ 1,989,000 | |
7 3/4% Senior Notes due 2026 | ||
Long-term debt | ||
Interest rate (as a percent) | 7.75% | |
7 3/8% Senior Notes due 2028 | ||
Long-term debt | ||
Interest rate (as a percent) | 7.375% | |
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 | $ 11,781,399 | 13,211,508 |
Fair Value | 9,145,897 | 10,986,747 |
Unamortized deferred financing costs and debt discounts, net | (28,540) | (35,206) |
Finance lease obligations | 40,967 | 69,206 |
Total long-term debt and finance lease obligations (including current portion) | $ 11,793,826 | 13,245,508 |
D I S H D B S Corporation | 5% Senior Notes due 2023 | ||
Long-term debt | ||
Carrying Amount | 1,443,179 | |
Fair Value | 1,441,635 | |
Interest rate (as a percent) | 5% | |
D I S H D B S Corporation | 5 7/8% Senior Notes due 2024 | ||
Long-term debt | ||
Carrying Amount | $ 1,989,139 | 2,000,000 |
Fair Value | $ 1,855,529 | 1,870,940 |
Interest rate (as a percent) | 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 | $ 1,504,760 | 1,620,280 |
Interest rate (as a percent) | 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 | $ 2,338,683 | 2,336,813 |
Interest rate (as a percent) | 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 | $ 634,930 | 708,320 |
Interest rate (as a percent) | 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 | $ 1,928,025 | 2,013,675 |
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 | $ 841,710 | 976,755 |
Interest rate (as a percent) | 5.125% | |
D I S H D B S Corporation | Other notes payable | ||
Long-term debt | ||
Carrying Amount | $ 42,260 | 18,329 |
Fair Value | $ 42,260 | $ 18,329 |
Commitments and Contingencies -
Commitments and Contingencies - Future maturities of other long term obligations (Details) - Other long-term obligations - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitment and Contingencies | ||
2023 (remaining three months) | $ 963,970 | |
2024 | 1,351,825 | |
2025 | 739,613 | |
2026 | 524,473 | |
2027 | 125,084 | |
Total | $ 3,704,965 | $ 5,146,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 20, 2022 USD ($) | Jul. 01, 2020 USD ($) | Sep. 23, 2016 USD ($) | Sep. 30, 2023 USD ($) claim | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 25, 2023 USD ($) | Dec. 31, 2015 USD ($) | |
Commitments and Contingencies | |||||||||
Number of new claims filed | claim | 10 | ||||||||
Related Party | Dish Network | |||||||||
Commitments and Contingencies | |||||||||
Total investment | $ 30,000,000,000 | ||||||||
Related Party | Spectrum Investments | Dish Network | |||||||||
Commitments and Contingencies | |||||||||
5G Network deployment | 10,000,000,000 | $ 10,000,000,000 | $ 10,000,000,000 | ||||||
Northstar Spectrum And SNR Holdco | Related Party | 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 | 469,000,000 | 469,000,000 | |||||||
TQ Delta LLC | |||||||||
Commitments and Contingencies | |||||||||
Loss contingency | $ 251,000,000 | $ 251,000,000 | |||||||
Realtime Adaptive Streaming Litigation | |||||||||
Commitments and Contingencies | |||||||||
Attorney fees awarded | $ 3,900,000 | ||||||||
Amendment To License Purchase Agreement | |||||||||
Commitments and Contingencies | |||||||||
Upfront payment | $ 100,000,000 | $ 100,000,000 |
Financial Information for Sub_2
Financial Information for Subsidiary Guarantors (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | $ 10,826,543 | $ 11,243,381 |
Unrestricted Subsidiaries | ||
Assets | $ 0 | |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue | ||||
Revenue | $ 2,783,387 | $ 3,048,315 | $ 8,680,957 | $ 9,302,740 |
United States | ||||
Disaggregation of Revenue | ||||
Revenue | 2,773,411 | 3,035,327 | 8,650,080 | 9,270,255 |
Canada and Mexico | ||||
Disaggregation of Revenue | ||||
Revenue | $ 9,976 | $ 12,988 | $ 30,877 | $ 32,485 |
Disaggregation of Revenue - R_2
Disaggregation of Revenue - Revenue from external customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue | ||||
Revenue | $ 2,783,387 | $ 3,048,315 | $ 8,680,957 | $ 9,302,740 |
Pay-TV subscriber and related revenue | ||||
Disaggregation of Revenue | ||||
Revenue | 2,759,948 | 3,018,484 | 8,536,453 | 9,220,562 |
Equipment sales and other revenue | ||||
Disaggregation of Revenue | ||||
Revenue | $ 23,439 | $ 29,831 | $ 144,504 | $ 82,178 |
Contract Balances (Details)
Contract Balances (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at Beginning of Period | $ 40,642 |
Current Period Provision For Expected Credit Losses | 52,577 |
Write-offs Charged Against Allowance | (48,173) |
Balance at End of Period | $ 45,046 |
Remaining performance obligations | true |
Contract Balances - Schedule of
Contract Balances - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Contract Balances | ||
Contract liabilities | $ 462,070 | $ 506,815 |
Contract liability recorded as customer contract revenue | $ 501,000 |
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 ($) | Dec. 21, 2012 | Feb. 28, 2018 item | May 31, 2017 | Jul. 31, 2016 | Sep. 30, 2023 USD ($) tranche | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) tranche | Sep. 30, 2022 USD ($) | Dec. 31, 2009 item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||
Selling, General and Administrative Expense | $ 356,125 | $ 420,100 | $ 1,072,027 | $ 1,185,998 | ||||||||
Depreciation and amortization | 70,474 | 87,312 | 236,206 | 272,646 | ||||||||
Interest expense, net of amounts capitalized | 184,407 | 205,633 | 567,718 | 668,212 | ||||||||
Interest income | 260,671 | 306,671 | ||||||||||
Aggregate principal amount | $ 7,381,589 | $ 7,381,589 | $ 7,160,116 | |||||||||
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party | Related Party | Related Party | |||||||||
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Name [Extensible Enumeration] | Dish Network | Dish Network | Dish Network | |||||||||
Interest Receivable | $ 146,000 | $ 146,000 | ||||||||||
Interest receivable - DISH Network | $ 69,960 | $ 69,960 | ||||||||||
Interest Receivable Current, Related Party, Name [Extensible Enumeration] | Dish Network | Dish Network | ||||||||||
Interest Receivable Current, Related Party, Type [Extensible Enumeration] | Related Party | Related Party | ||||||||||
Interest receivable - DISH Network - Paid in kind | $ 76,111 | $ 76,111 | $ 36,912 | |||||||||
Interest Receivable Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party | Related Party | Related Party | |||||||||
Interest Receivable Noncurrent, Related Party, Name [Extensible Enumeration] | Dish Network | Dish Network | Dish Network | |||||||||
Nimiq 5 Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Agreement Renewal Option Term | 1 year | |||||||||||
Depreciation and amortization | $ 9,000 | 9,000 | $ 26,000 | 26,000 | ||||||||
Interest expense, net of amounts capitalized | 1,000 | 2,000 | 4,000 | 7,000 | ||||||||
TT&C Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Purchase of renewal of agreement | 1 year | |||||||||||
EchoStar | EchoStar XVI | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Agreement term from commencement of service date | 4 years | |||||||||||
Agreement Renewal Option Term | 5 years | 1 year | ||||||||||
Additional term of renewal option | 5 years | |||||||||||
EchoStar | Telesat Transponder Agreement | Related Party | ||||||||||||
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 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of DBS transponders currently used | item | 32 | |||||||||||
Agreement term | 10 years | |||||||||||
EchoStar | TT&C Agreement | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notice period for termination of agreement | 12 months | |||||||||||
Dish Network | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Satellite and transmission expenses | $ 52,000 | 48,000 | 154,000 | 145,000 | ||||||||
Related party taxes payable | $ 56,000 | |||||||||||
Term of debt instrument | 2 years | |||||||||||
Paid in kind Interest rate | 0.75% | 0.75% | ||||||||||
Number of tranches | tranche | 2 | 2 | ||||||||||
Interest income | $ 110,000 | 108,000 | $ 331,000 | 307,000 | ||||||||
Aggregate principal amount | $ 5,250,000 | |||||||||||
Advanced an additional amount | $ 1,500,000 | |||||||||||
Percent of loan repayable | 100% | |||||||||||
Fixed rate | 0.25% | 0.25% | ||||||||||
Dish Network | Related Party | 5 1/4% Senior Secured Notes due 2026 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate (as a percent) | 5.25% | 5.25% | ||||||||||
Dish Network | Related Party | 5 3/4% Senior Secured Notes due 2028 | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate (as a percent) | 5.75% | 5.75% | ||||||||||
Dish Network | Related Party | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest payment due | 50% | |||||||||||
Dish Network | TT&C Agreement | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of automatic renewal period | item | 4 | |||||||||||
Dish Network | Office Space from DISH Network | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Selling, General and Administrative Expense | $ 3,000 | 3,000 | $ 7,000 | 8,000 | ||||||||
Dish Network | Broadband, Wireless and Other Segments | Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Expenses associated with services | $ 31,000 | $ 33,000 | $ 97,000 | $ 89,000 |
Related Party Transactions - Na
Related Party Transactions - NagraStar and Dish Mexico (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Feb. 28, 2017 | |
Related Party Transaction [Line Items] | ||||||
Amounts payable to NagraStar | $ 276,332 | $ 276,332 | $ 385,899 | |||
NagraStar | ||||||
Related Party Transaction [Line Items] | ||||||
Interest on equity method investment | 50% | |||||
NagraStar | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from NagraStar | 8,972 | $ 10,285 | 28,012 | $ 32,713 | ||
Amounts payable to NagraStar | 7,235 | 7,235 | 7,422 | |||
Commitments to NagraStar | $ 2,504 | $ 2,504 | $ 3,272 |