Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 28, 2015 | |
Entity Registrant Name | EchoStar CORP | |
Entity Central Index Key | 1,415,404 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 44,906,535 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 47,687,039 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 779,105 | $ 549,053 |
Marketable investment securities, at fair value | 807,662 | 1,139,103 |
Trade accounts receivable, net of allowance for doubtful accounts of $13,543 and $14,188, respectively | 177,553 | 163,232 |
Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero | 247,453 | 251,669 |
Inventory | 73,956 | 62,963 |
Prepaid expenses | 63,776 | 67,164 |
Deferred tax assets | 95,525 | 87,208 |
Other current assets | 12,623 | 7,699 |
Total current assets | 2,257,653 | 2,328,091 |
Noncurrent Assets: | ||
Restricted cash and marketable investment securities | 19,258 | 18,945 |
Property and equipment, net of accumulated depreciation of $2,910,823 and $2,899,353, respectively | 3,320,222 | 3,194,793 |
Regulatory authorizations, net | 544,343 | 568,378 |
Goodwill | 510,630 | 510,630 |
Other intangible assets, net | 147,535 | 195,662 |
Investments in unconsolidated entities | 214,431 | 159,962 |
Other receivable - DISH Network | 90,793 | 90,241 |
Other noncurrent assets, net | 184,278 | 187,296 |
Total noncurrent assets | 5,031,490 | 4,925,907 |
Total assets | 7,289,143 | 7,253,998 |
Current Liabilities: | ||
Trade accounts payable | 211,905 | 188,282 |
Trade accounts payable - DISH Network | 23,247 | 32,474 |
Current portion of long-term debt and capital lease obligations | 32,228 | 41,912 |
Deferred revenue and prepayments | 69,239 | 71,708 |
Accrued compensation | 31,658 | 32,117 |
Accrued royalties | 22,306 | 27,590 |
Accrued interest | 41,790 | 8,905 |
Accrued expenses and other | 110,492 | 114,745 |
Total current liabilities | 542,865 | 517,733 |
Noncurrent Liabilities: | ||
Long-term debt and capital lease obligations, net of current portion | 2,195,985 | 2,325,775 |
Deferred tax liabilities | 745,959 | 679,524 |
Other noncurrent liabilities | 100,767 | 107,328 |
Total noncurrent liabilities | 3,042,711 | 3,112,627 |
Total liabilities | $ 3,585,576 | $ 3,630,360 |
Commitments and Contingencies (Note 14) | ||
Stockholders' Equity: | ||
Additional paid-in capital | $ 3,755,547 | $ 3,706,122 |
Accumulated other comprehensive loss | (112,001) | (55,856) |
Accumulated earnings (deficit) | 70,943 | (19,040) |
Treasury stock, at cost | (98,162) | (98,162) |
Total EchoStar stockholders' equity | 3,616,431 | 3,533,168 |
Noncontrolling interest in HSS Tracking Stock | 76,437 | 80,457 |
Other noncontrolling interests | 10,699 | 10,013 |
Total stockholders' equity | 3,703,567 | 3,623,638 |
Total liabilities and stockholders' equity | 7,289,143 | 7,253,998 |
Class A common stock | ||
Stockholders' Equity: | ||
Common stock | 50 | 50 |
Class B common stock | ||
Stockholders' Equity: | ||
Common stock | $ 48 | $ 48 |
Class C common stock | ||
Stockholders' Equity: | ||
Common stock | ||
Class D common stock | ||
Stockholders' Equity: | ||
Common stock | ||
Preferred Stock | ||
Stockholders' Equity: | ||
Preferred Stock | ||
Hughes Retail Preferred Tracking Stock | ||
Stockholders' Equity: | ||
Preferred Stock | $ 6 | $ 6 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Allowance for doubtful accounts on trade accounts receivable (in dollars) | $ 13,543 | $ 14,188 |
Allowance for doubtful accounts on trade accounts receivable - DISH Network (in dollars) | 0 | 0 |
Property and equipment, accumulated depreciation (in dollars) | $ 2,910,823 | $ 2,899,353 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 4,000,000,000 | 4,000,000,000 |
Class A common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued (in shares) | 50,432,666 | 49,576,247 |
Common stock, shares outstanding (in shares) | 44,900,348 | 44,043,929 |
Class B common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 47,687,039 | 47,687,039 |
Common stock, shares outstanding (in shares) | 47,687,039 | 47,687,039 |
Class C common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Class D common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Preferred Stock | ||
Preferred Stock: | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Hughes Retail Preferred Tracking Stock | ||
Preferred Stock: | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 13,000,000 | 13,000,000 |
Preferred stock, shares issued (in shares) | 6,290,499 | 6,290,499 |
Preferred stock, shares outstanding (in shares) | 6,290,499 | 6,290,499 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue: | ||||
Equipment revenue - DISH Network | $ 157,184 | $ 299,050 | $ 577,277 | $ 907,466 |
Equipment revenue - other | 89,454 | 101,927 | 256,362 | 265,890 |
Services and other revenue - DISH Network | 236,601 | 215,935 | 695,358 | 609,552 |
Services and other revenue - other | 277,640 | 278,928 | 824,130 | 818,783 |
Total revenue | 760,879 | 895,840 | 2,353,127 | 2,601,691 |
Costs and Expenses: | ||||
Cost of sales - equipment (exclusive of depreciation and amortization) | 207,989 | 340,159 | 706,835 | 998,205 |
Cost of sales - services and other (exclusive of depreciation and amortization) | 219,686 | 212,298 | 645,691 | 626,660 |
Selling, general and administrative expenses | 91,830 | 93,127 | 280,462 | 271,251 |
Research and development expenses | 19,875 | 15,685 | 57,432 | 44,841 |
Depreciation and amortization | 132,892 | 142,294 | 398,547 | 416,167 |
Total costs and expenses | 672,272 | 803,563 | 2,088,967 | 2,357,124 |
Operating income | 88,607 | 92,277 | 264,160 | 244,567 |
Other Income (Expense): | ||||
Interest income | 2,562 | 2,270 | 7,896 | 7,015 |
Interest expense, net of amounts capitalized | (28,870) | (41,688) | (96,136) | (132,419) |
Loss from partial redemption of debt | (5,044) | |||
Gains (losses) on marketable investment securities, net | (3,912) | (27) | (5,516) | 7 |
Other-than-temporary impairment loss on available-for-sale securities | (1,243) | (5,892) | ||
Equity in earnings (losses) of unconsolidated affiliates, net | (2,324) | 13,198 | (2,580) | 10,137 |
Other, net | 2,115 | (1,485) | (4,078) | (1,050) |
Total other expense, net | (31,672) | (27,732) | (111,350) | (116,310) |
Income before income taxes | 56,935 | 64,545 | 152,810 | 128,257 |
Income tax provision, net | (28,577) | (6,108) | (65,841) | (28,176) |
Net Income | 28,358 | 58,437 | 86,969 | 100,081 |
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock | (686) | (2,106) | (4,020) | (4,049) |
Less: Net income attributable to other noncontrolling interests | 209 | 375 | 1,006 | 1,103 |
Net income attributable to EchoStar | 28,835 | 60,168 | 89,983 | 103,027 |
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 2) | (1,267) | (3,887) | (7,421) | (7,474) |
Net income attributable to EchoStar common stock | $ 30,102 | $ 64,055 | $ 97,404 | $ 110,501 |
Weighted-average common shares outstanding - Class A and B common stock: | ||||
Basic (in shares) | 92,500 | 91,358 | 92,253 | 91,050 |
Diluted (in shares) | 93,493 | 92,971 | 93,480 | 92,723 |
Earnings per share - Class A and B common stock: | ||||
Basic (in dollars per share) | $ 0.33 | $ 0.70 | $ 1.06 | $ 1.21 |
Diluted (in dollars per share) | $ 0.32 | $ 0.69 | $ 1.04 | $ 1.19 |
Comprehensive Income (Loss) | ||||
Net income | $ 28,358 | $ 58,437 | $ 86,969 | $ 100,081 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (32,603) | (18,783) | (56,009) | (11,068) |
Recognition of foreign currency translation loss in net income | 1,889 | |||
Unrealized losses on available-for-sale securities and other | (7,373) | (6,981) | (8,208) | (9,484) |
Recognition of other-than-temporary loss on available-for-sale securities in net income | 1,243 | 5,892 | ||
Recognition of realized (gains) losses on available-for-sale securities in net income | (9) | 27 | (29) | (7) |
Total other comprehensive loss, net of tax | (38,742) | (25,737) | (56,465) | (20,559) |
Comprehensive income (loss) | (10,384) | 32,700 | 30,504 | 79,522 |
Less: Comprehensive loss attributable to noncontrolling interest in HSS Tracking Stock | (686) | (2,106) | (4,020) | (4,049) |
Less: Comprehensive income (loss) attributable to other noncontrolling interests | (111) | 171 | 686 | 1,147 |
Comprehensive income (loss) attributable to EchoStar | $ (9,587) | $ 34,635 | $ 33,838 | $ 82,424 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash Flows from Operating Activities: | ||
Net income | $ 86,969 | $ 100,081 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 398,547 | 416,167 |
Equity in losses (earnings) of unconsolidated affiliates, net | 2,580 | (10,137) |
Loss from partial redemption of debt | 5,044 | |
Losses (gains) and other-than-temporary impairment on marketable investment securities, net | 11,408 | (7) |
Stock-based compensation | 16,204 | 10,648 |
Deferred tax provision | 63,421 | 18,773 |
Changes in current assets and current liabilities, net | (274) | 110,671 |
Changes in noncurrent assets and noncurrent liabilities, net | 3,457 | (10,170) |
Other, net | 20,567 | 26,408 |
Net cash flows from operating activities | 607,923 | 662,434 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | (345,391) | (920,672) |
Sales and maturities of marketable investment securities | 669,393 | 891,917 |
Purchases of property and equipment | (585,902) | (434,428) |
Refunds and other receipts related to capital expenditures | 105,750 | |
Changes in restricted cash and marketable investment securities | (313) | (2,958) |
Investment in unconsolidated entities | (64,655) | |
Acquisition of regulatory authorizations | (3,428) | |
Capital contribution to Sling TV Holding | (18,569) | |
Expenditures for externally marketed software | (16,905) | (17,401) |
Other, net | (50) | 1,981 |
Net cash flows from investing activities | (241,501) | (500,130) |
Cash Flows from Financing Activities: | ||
Repayment of 6 1/2% Senior Notes Due 2019 and related premium | (113,300) | |
Repayment of other long-term debt and capital lease obligations | (35,303) | (52,763) |
Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan | 19,893 | 20,678 |
Net proceeds from issuance of Tracking Stock (Note 2) | 7,526 | |
Other, net | 1,525 | (9,752) |
Net cash flows from financing activities | (127,185) | (34,311) |
Effect of exchange rates on cash and cash equivalents | (9,185) | (1,721) |
Net increase (decrease) in cash and cash equivalents | 230,052 | 126,272 |
Cash and cash equivalents, beginning of period | 549,053 | 634,119 |
Cash and cash equivalents, end of period | 779,105 | 760,391 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest (including capitalized interest) | 102,335 | 106,268 |
Capitalized interest | 44,335 | 14,670 |
Cash paid for income taxes | 5,185 | 11,610 |
Employee benefits paid in Class A common stock | 10,711 | 10,310 |
Satellites and other assets financed under capital lease obligations | 5,551 | 2,947 |
Increase in capital expenditures included in accounts payable, net | 10,297 | 3,805 |
Net noncash assets transferred from DISH Network in exchange for Tracking Stock (Note 2) | 398,095 | |
Assets received from Sling TV Holding (Note 6) | $ 34,075 | |
Reduction of capital lease obligation for AMC-15 and AMC-16 satellites | $ 4,500 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Sep. 30, 2015 |
Senior Secured Notes | |
Interest rate (as a percent) | 6.50% |
Organization and Business Activ
Organization and Business Activities | 9 Months Ended |
Sep. 30, 2015 | |
Organization and Business Activities | |
Organization and Business Activities | Note 1. Organization and Business Activities Principal Business EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” and/or “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada. We are a global provider of satellite operations, video delivery solutions, digital set-top boxes, and broadband satellite technologies and services for home and office, delivering innovative network technologies, managed services, and solutions for enterprises and governments. Our Class A common stock is publicly traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SATS.” We currently operate in the following three business segments: EchoStar Technologies (“ETC”) — which designs, develops and distributes digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies. Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services, primarily to DISH Network. In addition, we provide our TVEverywhere technology through Slingboxes directly to consumers via retail outlets and online, as well as to the pay-TV operator market. Beginning in 2015, this segment also includes Move Network, our live linear over-the-top platform business, which includes assets acquired from Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C.), and primarily provides support services to DISH Network’s Sling TV operations. Hughes — which provides satellite broadband internet access to North American consumers and broadband network services and equipment to domestic and international enterprise markets. The Hughes segment also provides managed services to large enterprises and solutions to customers for mobile satellite systems. EchoStar Satellite Services (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, S. de R.L. de C.V. (“Dish Mexico”), a joint venture we entered into in 2008, United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. Our operations also include real estate and other activities that have not been assigned to our operating segments, including, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, including, income from our investment portfolio and interest expense on our debt. These activities are accounted for in the “All Other and Eliminations” column in Note 15. In 2008, DISH Network completed its distribution to us of its digital set-top box business, certain infrastructure, and other assets and related liabilities, including certain of its satellites, uplink and satellite transmission assets, and real estate (the “Spin-off”). Since the Spin-off, EchoStar and DISH Network have operated as separate publicly-traded companies. However, as a result of the Satellite and Tracking Stock Transaction described in Note 2 below, DISH Network owns shares of our and our subsidiary’s preferred tracking stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment. In addition, a substantial majority of the voting power of the shares of DISH Network and EchoStar is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. |
Hughes Retail Preferred Trackin
Hughes Retail Preferred Tracking Stock | 9 Months Ended |
Sep. 30, 2015 | |
Hughes Retail Preferred Tracking Stock | |
Hughes Retail Preferred Tracking Stock | Note 2. Hughes Retail Preferred Tracking Stock Satellite and Tracking Stock Transaction On February 20, 2014, EchoStar entered into agreements with certain subsidiaries of DISH Network pursuant to which, effective March 1, 2014, (i) EchoStar issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “EchoStar Tracking Stock”) and Hughes Satellite Systems Corporation (“HSS”), a subsidiary of EchoStar, also issued shares of its newly authorized Hughes Retail Preferred Tracking Stock (the “HSS Tracking Stock” and together with the EchoStar Tracking Stock, the “Tracking Stock”) to DISH Network in exchange for five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI, and EchoStar XIV), including the assumption of related in-orbit incentive obligations, and $11.4 million in cash and (ii) DISH Network began receiving certain satellite services on these five satellites from us (the “Satellite and Tracking Stock Transaction”). The Tracking Stock tracks the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group” or “HRG”). The Satellite and Tracking Stock Transaction is consistent with the long-term strategy of the Company to increase the scale of its satellite services business, which provides high-margin revenues, while continuing to benefit from the growth of the satellite broadband business. As a result of the additional satellites received in the Satellite and Tracking Stock Transaction, EchoStar has been able to increase short-term cash flow that it believes will better position it to achieve its strategic objectives. EchoStar and HSS have adopted policy statements (the “Policy Statements”) setting forth management and allocation policies for purposes of attributing all of the business and operations of EchoStar to either the Hughes Retail Group or the “EchoStar Group,” which is defined as all other operations of EchoStar, including all existing and future businesses, other than the Hughes Retail Group. Among other things, the Policy Statements govern how assets, liabilities, revenue and expenses are attributed or allocated between HRG and the EchoStar Group. Such attributions and allocations generally do not affect the amounts reported in our consolidated financial statements, except for the attribution of stockholders’ equity and net income or loss between the holders of Tracking Stock and common stock. The Policy Statements also do not significantly affect the way that management assesses operating performance and allocates resources within our Hughes segment. We provide unaudited attributed financial information for HRG and the EchoStar Group in an exhibit to our periodic reports on Form 10-Q and Form 10-K. Set forth below is information about certain terms of the Tracking Stock and the initial recording of the Satellite and Tracking Stock Transaction in our consolidated financial statements. Description of the Tracking Stock Tracking stock is a type of capital stock that the issuing company intends to reflect or “track” the economic performance of a particular business component within the company, rather than reflect the economic performance of the company as a whole. The Tracking Stock is intended to track the economic performance of the Hughes Retail Group. The shares of the Tracking Stock issued to DISH Network represent an aggregate 80.0% economic interest in the Hughes Retail Group (the shares issued as EchoStar Tracking Stock represent a 51.89% economic interest in the Hughes Retail Group and the shares issued as HSS Tracking Stock represent a 28.11% economic interest in the Hughes Retail Group). In addition to the remaining 20.0% economic interest in the Hughes Retail Group, EchoStar retains all economic interest in the wholesale satellite broadband business and other businesses of EchoStar. The 80.0% economic interest was determined at the time of issuance based on the estimated fair value of the consideration received from DISH Network in exchange for the Tracking Stock, consisting of the five satellites and $11.4 million in cash, relative to the estimated fair value of the Hughes Retail Group. The allocation of economic interest represented by the Tracking Stock of 51.89% issued as EchoStar Tracking Stock and 28.11% issued as HSS Tracking Stock reflected the relative assignment to HSS Tracking Stock and EchoStar Tracking Stock of the aggregate increase in equity resulting from DISH Network’s contribution of the satellites and cash. The tracking stock structure and the allocation of the tracking stock economic interest between EchoStar and HSS was advantageous to EchoStar from an economic and tax perspective by allowing the Company to increase cash flow by using the value of the Hughes Retail Group to purchase the satellites from DISH Network. While DISH Network, as the holder of the Tracking Stock, holds an aggregate 80.0% economic interest in the Hughes Retail Group, the Hughes Retail Group is not a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of the Tracking Stock have no direct claim to the assets of the Hughes Retail Group; rather, holders of the Tracking Stock are stockholders of its respective issuer (EchoStar or HSS) and are subject to all risks and liabilities of the issuer. The EchoStar Tracking Stock is a series of preferred stock consisting of 13,000,000 authorized shares with a par value of $0.001 per share, of which 6,290,499 shares were issued to DISH Network on March 1, 2014. The HSS Tracking Stock is a series of HSS preferred stock consisting of 300 authorized shares with a par value of $0.001 per share, of which 81.128 shares were issued to DISH Network on March 1, 2014. Following the issuance of the shares of the EchoStar Tracking Stock and the HSS Tracking Stock, DISH Network held 6.5% and 7.5% of the aggregate number of outstanding shares of EchoStar and HSS capital stock, respectively. Holders of shares of the Tracking Stock vote with holders of the outstanding shares of common stock of its respective issuer, as a single class, with respect to any and all matters presented to stockholders for their action or consideration. Each share of the Tracking Stock is entitled to one-tenth (1/10th) of one vote, which resulted in a relative loss of voting power for our Class A and Class B common stockholders. In the event of a liquidation of EchoStar, holders of shares of EchoStar Class A common stock, EchoStar Class B common stock and the EchoStar Tracking Stock are entitled to receive their respective proportionate interests in the net assets of EchoStar, if any, remaining for distribution upon liquidation, pro rata based upon the aggregate market value of outstanding shares of the EchoStar Tracking Stock (determined by an independent appraisal to the extent such shares are not then listed or quoted on any U.S. national or regional securities exchange or quotation system) as compared to the aggregate market value of outstanding shares of EchoStar Class A common stock and EchoStar Class B common stock. Similarly, in the event of a liquidation of HSS, holders of shares of HSS common stock and HSS Tracking Stock are entitled to receive their respective proportionate interests in the net assets of HSS, if any, remaining for distribution upon liquidation, pro rata based upon the aggregate market value of outstanding shares of HSS Tracking Stock as compared to the aggregate market value of outstanding shares of HSS common stock. Market values of HSS Tracking Stock and HSS common stock are to be determined by an independent appraisal to the extent such shares are not then listed or quoted on any U.S. national or regional securities exchange or quotation system. Should our board of directors, or the board of directors of HSS, make a future determination to pay a dividend on any shares of capital stock, the respective board of directors may, in its sole discretion, declare dividends only on shares of common stock, only on shares of the Tracking Stock or on shares of both the common stock and the Tracking Stock of the respective company. No dividend or other distribution may be paid on any shares of EchoStar Tracking Stock unless a dividend or distribution in an equivalent amount is paid on shares of HSS Tracking Stock and no dividend or other distribution may be paid on any shares of HSS Tracking Stock unless a dividend or distribution in an equivalent amount is paid on shares of EchoStar Tracking Stock. EchoStar and HSS may each, at its option, redeem all of the outstanding shares of its Tracking Stock in exchange for shares of common stock in an HRG Holding Company (as defined below), which EchoStar is required to establish pursuant to the Investor Rights Agreement discussed below. Investor Rights Agreement In connection with the Satellite and Tracking Stock Transaction, EchoStar, HSS and DISH Network entered into an agreement (the “Investor Rights Agreement”) setting forth certain rights and obligations of the parties with respect to the Tracking Stock. Among other provisions, the Investor Rights Agreement provides: (i) certain information and consultation rights for DISH Network; (ii) certain transfer restrictions on the Tracking Stock and certain rights and obligations to offer and sell under certain circumstances (including a prohibition on transfer of the Tracking Stock until March 1, 2015), with continuing transfer restrictions (including a right of first offer in favor of EchoStar) thereafter, an obligation to sell the Tracking Stock to us in connection with a change of control of DISH Network and a right to require us to repurchase the Tracking Stock in connection with a change of control of EchoStar, in each case subject to certain terms and conditions; (iii) certain protective covenants afforded to holders of the Tracking Stock; and (iv) a requirement for EchoStar to establish a holding company subsidiary (an “HRG Holding Company”) that is directly or indirectly wholly-owned by EchoStar and that will hold the Hughes Retail Group. In addition, the Investor Rights Agreement provides that DISH Network may, on or after September 1, 2016, require EchoStar to use its commercially reasonable efforts to register some or all of the outstanding shares of the Tracking Stock under the Securities Act of 1933, as amended, subject to certain terms and conditions (including our right, upon the receipt of a demand for registration, to offer to repurchase all of the Tracking Stock). In connection with any demand for registration, DISH Network may require any outstanding shares of the HSS Tracking Stock to be exchanged for shares of the EchoStar Tracking Stock with an equivalent economic interest in the Hughes Retail Group. In the event that a registration of shares of Tracking Stock is effected, EchoStar is required to use its reasonable best efforts to amend the terms of the Tracking Stock so that the Tracking Stock will be convertible or exchangeable for shares of EchoStar Class A common stock with equivalent market value. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3. 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 U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in accordance with 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 Form 10-K for the year ended December 31, 2014. Principles of Consolidation We consolidate all majority owned subsidiaries, investments in entities in which we have controlling interest and variable interest entities where we are the primary beneficiary. For entities we control but do not wholly own, we record a noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests. For the noncontrolling interest in the HSS Tracking Stock (see Note 2), we attribute a portion of HSS net income or loss to the noncontrolling interest in HSS Tracking Stock with such portion equal to 28.11% (the HSS portion of the 80.0% economic interest) of the Hughes Retail Group attributed net income or loss represented by the HSS Tracking Stock, as determined in accordance with the Policy Statements and other documents governing the Tracking Stock. We use the equity method to account for investments in entities that we do not control but have the ability to significantly influence the operating decisions of the investee. We use the cost method when we do not have the ability to significantly influence the operating decisions of the investee. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements. Estimates are used in accounting for, among other things, amortization periods for deferred revenue and deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of awards granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairments, useful lives and methods for depreciation and amortization of long-lived assets, goodwill impairment testing, royalty obligations, and allocations that affect the net income or loss attributable to the Tracking Stock. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. Weakened economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions are reflected in the period they occur or prospectively if the revised estimate affects future periods. 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 utilize the highest level of inputs available according to the following hierarchy in determining fair value: · Level 1, defined as observable inputs being quoted prices in active markets for identical assets; · Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and · Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels for each of the nine months ended September 30, 2015 or 2014. As of September 30, 2015 and December 31, 2014, the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values of our current marketable investment securities are based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements, as the markets for such debt securities are less active. Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value. Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities. Fair values for our publicly traded long-term debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements. The fair values of our privately held debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates. As of September 30, 2015 and December 31, 2014, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $80.3 million and $85.8 million, respectively. We use fair value measurements from time-to-time in connection with impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. Research and Development In addition to research and development expenses reported in our condensed consolidated statements of operations and comprehensive income (loss), our cost of sales includes research and development costs funded by customers of approximately $15.2 million and $18.0 million for the three months ended September 30, 2015 and 2014, respectively, and $45.7 million and $52.4 million for the nine months ended September 30, 2015 and 2014, respectively. Capitalized Software Costs Development costs related to software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years. Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets. Externally marketed software is generally installed in the equipment we sell to customers. We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed. As of September 30, 2015 and December 31, 2014, the net carrying amount of externally marketed software was $59.7 million and $48.9 million, respectively. We capitalized costs of $5.3 million and $5.1 million for the three months ended September 30, 2015 and 2014, respectively, and costs of $17.0 million and $17.6 million for the nine months ended September 30, 2015 and 2014, respectively, related to the development of externally marketed software. We recorded amortization expense relating to the development of externally marketed software of $2.2 million and $1.9 million for the three months ended September 30, 2015 and 2014, respectively, and $6.1 million and $3.6 million for the nine months ended September 30, 2015 and 2014, respectively. The weighted average useful life of our externally marketed software was approximately four years as of September 30, 2015. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In August 2015, the FASB issued Accounting Standards Update No. 2015-14, which deferred by one year the mandatory effective date of ASU 2014-09. As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods. The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted, but not before annual periods beginning after December 15, 2016. We have not determined when we will adopt the new revenue standard or selected the transition method that we will apply upon adoption. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). This standard amends the consolidation guidance for variable interest entities (“VIEs”) and general partners’ investments in limited partnerships and similar entities. ASU 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires either a retrospective or a modified retrospective approach as of the beginning of the fiscal year of adoption. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements or related disclosures. We do not expect to adopt this standard prior to the effective date. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, (“ASU 2015-03”). This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires a retrospective approach to adoption. Early adoption is permitted. Based on our preliminary assessment, upon adoption of this standard, we expect to present unamortized deferred costs in other noncurrent assets with a carrying amount of $32.8 million and $39.1 million as of September 30, 2015 and December 31, 2014, respectively, as a reduction of our long-term debt balances. We do not expect to adopt this standard prior to the effective date. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Earnings per Share | Note 4. Earnings per Share We present basic earnings per share (“EPS”) and diluted EPS for our Class A and Class B common stock. The EchoStar Tracking Stock is a participating security that shares in our consolidated earnings and therefore, effective March 1, 2014, the issuance date of the EchoStar Tracking Stock, we apply the two-class method to calculate EPS. Under the two-class method, we allocate net income or loss attributable to EchoStar between common stock and the EchoStar Tracking Stock considering both dividends declared on each class of stock and the participation rights of each class of stock in undistributed earnings. Based on the 51.89% economic interest in the Hughes Retail Group outstanding as the EchoStar Tracking Stock, we allocate undistributed earnings to the EchoStar Tracking Stock based on 51.89% of the attributed net income or loss of the Hughes Retail Group. We allocated a net loss of $1.3 million and $3.9 million for the three months ended September 30, 2015 and 2014, respectively, and a net loss of $7.4 million and $7.5 million for the nine months ended September 30, 2015 and 2014, respectively, to the EchoStar Tracking Stock reflecting DISH Network’s 51.89% economic interest (represented by the EchoStar Tracking Stock) in the net loss of the Hughes Retail Group. Moreover, because the reported amount of “Net income attributable to EchoStar” in our condensed consolidated statements of operations and comprehensive income (loss) excludes DISH Network’s 28.11% economic interest (represented by the HSS Tracking Stock) in the net loss of the Hughes Retail Group (reported as a noncontrolling interest), the amount of consolidated net income or loss allocated to holders of Class A and Class B common stock effectively excludes an aggregate 80.0% of the attributed net loss of the Hughes Retail Group. Basic EPS for our Class A and Class B common stock excludes potential dilution and is computed by dividing “Net income attributable to EchoStar common stock” by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if our common stock awards were exercised. The potential dilution from common stock awards was computed using the treasury stock method based on the average market value of our Class A common stock during the period. The calculation of our diluted weighted-average common shares outstanding excluded options to purchase shares of our Class A common stock, whose effect would be anti-dilutive, of 3.1 million shares and 2.0 million shares for the three and nine months ended September 30, 2015, respectively, and 0.8 million shares for each of the three and nine months ended September 30, 2014, respectively. For the three and nine months ended September 30, 2014, the calculation also excluded 0.7 million shares of our Class A common stock that were issuable pursuant to our performance based stock incentive plan contingent upon meeting a company-specific performance measure by March 31, 2015, that was not achieved and which resulted in the expiration of such shares as of March 31, 2015. The following table presents basic and diluted EPS amounts for all periods and the corresponding weighted-average shares outstanding used in the calculations. For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands, except per share amounts) Net income attributable to EchoStar $ $ $ $ Less: Net loss attributable to EchoStar Tracking Stock ) ) ) ) Net income attributable to EchoStar common stock $ $ $ $ Weighted-average common shares outstanding : Class A and B common stock: Basic Dilutive impact of stock awards outstanding Diluted Earnings per share: Class A and B common stock: Basic $ $ $ $ Diluted $ $ $ $ |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) and Related Tax Effects | 9 Months Ended |
Sep. 30, 2015 | |
Other Comprehensive Income (Loss) and Related Tax Effects | |
Other Comprehensive Income (Loss) and Related Tax Effects | Note 5. Other Comprehensive Income (Loss) and Related Tax Effects We have not recognized any tax effects on foreign currency translation adjustments because they are not expected to result in future taxable income or deductions. We have not recognized any tax effects on unrealized gains or losses on available-for-sale securities because such gains or losses would affect the amount of existing capital loss carryforwards for which the related deferred tax asset has been fully offset by a valuation allowance. Accumulated other comprehensive loss includes cumulative foreign currency translation losses of $117.6 million and $63.8 million as of September 30, 2015 and December 31, 2014, respectively. Reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2015 and 2014 were as follows: Affected Line Item in our For the Three Months For the Nine Months Condensed Consolidated Ended September 30, Ended September 30, Accumulated Other Comprehensive Loss Components Statement of Operations 2015 2014 2015 2014 (In thousands) Recognition of realized (gains) losses on available-for-sale securities in net income (1) Gains (losses) on marketable investment securities, net $ ) $ $ ) $ ) Recognition of other-than-temporary impairment loss on available-for-sale securities in net income (2) Other-than-temporary impairment loss on available-for sale securities — — Recognition of foreign currency translation losses in net income (3) Other, net — — — Total reclassifications, net of tax and noncontrolling interests $ $ $ $ ) (1) When available-for-sale securities are sold, the related unrealized gains and losses that were previously recognized in other comprehensive income (loss) are reclassified and recognized as realized gains (losses) on available-for-sale securities on the condensed consolidated statement of operations and comprehensive income (loss). (2) In June 2015 and September 2015, we recorded other-than-temporary impairment losses on shares of certain common stock included in our strategic equity securities. See Note 6 for further discussion. (3) As a result of the deconsolidation of several of our European subsidiaries in connection with our investment in SmarDTV SA in May 2015, the related cumulative translation adjustments that were previously recognized in other comprehensive income (loss) were reclassified and recognized as a loss within “Other income (expense)” in our condensed consolidated statement of operations and comprehensive income (loss). See Note 6 for further discussion. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Investment Securities | Note 6. Investment Securities Our marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities consisted of the following: As of September 30, December 31, 2015 2014 (In thousands) Marketable investment securities—current: Corporate bonds $ $ Strategic equity securities Other Total marketable investment securities—current Restricted marketable investment securities (1) Total Restricted cash and cash equivalents (1) Investments in unconsolidated entities—noncurrent: Cost method Equity method Total investments in unconsolidated entities—noncurrent Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities $ $ (1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” in our condensed consolidated balance sheets. Marketable Investment Securities Our marketable investment securities portfolio consists of various debt and equity instruments, which generally are classified as available-for-sale. As of September 30, 2015, certain of our equity securities were classified as trading securities in order to reflect our investment strategy for those securities. The value of our investment portfolio depends on the value of such securities and other instruments comprising the portfolio. Corporate Bonds Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Strategic Equity Securities Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. As of September 30, 2015 and December 31, 2014, our strategic equity securities included shares of common stock of one of our customers that we received in satisfaction of certain milestone payments that were required to be paid to us under an existing long-term contract. For the three and nine months ended September 30, 2015, “Other-than-temporary impairment loss on available-for-sale securities” included a $1.2 million and $5.9 million other-than-temporary impairment of such common stock in our available-for-sale portfolio, respectively. For the three and nine months ended September 30, 2015, “Gains (losses) on marketable investment securities, net” includes $3.9 million and $5.5 million in losses on such common stock in our trading securities portfolio, respectively, which had a fair value of $11.3 million as of September 30, 2015. Other Our other current marketable investment securities portfolio includes investments in various debt instruments, including U.S. government bonds and variable rate demand notes. Restricted Cash and Marketable Investment Securities As of September 30, 2015 and December 31, 2014, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds. Investments in unconsolidated entities - Noncurrent We have several strategic investments in certain non-publicly traded equity securities that are accounted for using either the equity or the cost method of accounting. Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies’ businesses and their ability to obtain sufficient capital 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. In June 2015, we purchased a noncontrolling equity investment in WorldVu Satellites Limited (“WorldVu”), a low-earth orbit satellite company. WorldVu plans to develop and operate a global network of low-earth orbit Ku-band satellites to provide internet access to fixed and mobile terminals. We do not exercise significant influence over the management of WorldVu; accordingly, we account for the investment using the cost method. Our Hughes segment entered into an agreement to sell certain equipment and services to WorldVu for the ground systems for WorldVu’s low-earth orbit satellites in connection with our investment based on then existing market terms. In May 2015, we acquired a 22.5% interest in the equity and subordinated debt of SmarDTV SA (“SmarDTV”), a Swiss subsidiary of Kudelski SA that offers set-top boxes and conditional access modules, in exchange for cash of $13.9 million and the contribution of several of our European subsidiaries to SmarDTV. We recorded our initial investment in SmarDTV at $20.0 million, representing our estimate of the investment’s fair value using discounted cash flow techniques. Our estimate included significant unobservable inputs related to SmarDTV’s future operations and is categorized within Level 3 of the fair value hierarchy. As of the acquisition date, we deconsolidated the contributed entities and recognized a $2.6 million loss within “Other income (expense)” in our condensed consolidated statement of operations and comprehensive income (loss), consisting of: (i) a $0.7 million loss resulting from our initial investment (at fair value) being less than our $13.9 million cash payment and the carrying amount of the net assets of the deconsolidated entities and (ii) the reclassification from accumulated other comprehensive loss of $1.9 million in foreign currency translation adjustments related to the deconsolidated entities. The net assets of the deconsolidated entities included net property and equipment of $6.7 million and cash of $0.8 million. We have the ability to exercise significant influence over SmarDTV and therefore account for our investment using the equity method. We and SmarDTV also entered into a services agreement pursuant to which our EchoStar Technologies segment purchases certain engineering services from SmarDTV. See Note 16 for information about our related party transactions with SmarDTV subsequent to the date of our initial investment. On August 8, 2014, an option providing for an unrelated party to acquire a 51.0% equity interest in Dish Mexico was terminated. Although we have owned 49.0% of the equity of Dish Mexico since its inception in 2008, we accounted for our investment as a 24.0% equity interest using the equity method based on assumed dilution that would occur upon the exercise of the option. Upon termination of the option, we recorded a $10.3 million adjustment to increase “Equity in earnings (losses) of unconsolidated affiliates” to reflect an increase from 24.0% to 49.0% in our interest in Dish Mexico’s inception-to-date net income. For periods subsequent to the date of the termination of the option, we account for our investment in Dish Mexico as a 49.0% equity interest using the equity method. Effective August 1, 2014, we and DISH Digital Holding, L.L.C. (now known as Sling TV Holding L.L.C., “Sling TV Holding”) entered into an exchange agreement (the “Exchange Agreement”) pursuant to which we exchanged our one-third voting interest in Sling TV Holding, which we accounted for using the equity method, for a 10.0% non-voting interest in Sling TV Holding, which we account for using the cost method. As part of this transaction, we received a distribution of certain noncurrent assets associated with an internet protocol television technology business, including property and equipment, technology-related intangible assets and goodwill. Because we and Sling TV Holding are entities under common control, we recorded the distributed assets at their carrying amounts in Sling TV Holding’s accounts, which totaled $34.1 million at the date of distribution, and we recorded our non-voting interest at $1.1 million, which represents 10.0% of the carrying amount of the remaining equity in Sling TV Holding. These amounts exceeded the carrying amount of our existing equity method investment by $8.8 million, which was credited to additional paid-in capital because gain recognition generally is precluded by GAAP in exchanges between entities under common control. In connection with our obligations associated with our interest prior to the Exchange Agreement, we contributed $18.6 million in cash to Sling TV Holding during the third quarter of 2014. We have no obligation to contribute additional capital to Sling TV Holding. See Note 16 for more information regarding the Exchange Agreement with Sling TV Holding. Unrealized Gains (Losses) on Marketable Investment Securities The components of our available-for-sale investments are summarized in the table below. Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of September 30, 2015 Debt securities: Corporate bonds $ $ $ ) $ Other (including restricted) ) Equity securities - strategic ) Total marketable investment securities $ $ $ ) $ As of December 31, 2014 Debt securities: Corporate bonds $ $ $ ) $ Other (including restricted) ) Equity securities - strategic ) Total marketable investment securities $ $ $ ) $ As of September 30, 2015, restricted and non-restricted marketable investment securities included debt securities of $754.2 million with contractual maturities of one year or less and $21.8 million with contractual maturities greater than one year. We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity. Marketable Investment Securities in a Loss Position The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position. We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature. We believe that changes in the estimated fair values of these securities are primarily related to temporary market conditions as of September 30, 2015. As of September 30, 2015 December 31, 2014 Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Less than 12 months $ $ ) $ $ ) 12 months or more ) — — Total $ $ ) $ $ ) Sales of Marketable Investment Securities We recognized minimal gains and losses from the sales of our available-for-sale marketable investment securities for each of the three and nine months ended September 30, 2015 and 2014. Proceeds from sales of our available-for-sale marketable investment securities totaled $4.0 million and $36.9 million for the three months ended September 30, 2015 and 2014, respectively, and $94.2 million and $42.3 million for the nine months ended September 30, 2015 and 2014, respectively. Fair Value Measurements Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of September 30, 2015 and December 31, 2014, we did not have investments that were categorized within Level 3 of the fair value hierarchy. As of September 30, 2015 December 31, 2014 Total Level 1 Level 2 Total Level 1 Level 2 (In thousands) Cash equivalents (including restricted) $ $ $ $ $ $ Debt securities: Corporate bonds $ $ — $ $ $ — $ Other (including restricted) Equity securities - strategic — — Total marketable investment securities $ $ $ $ $ $ |
Trade Accounts Receivable
Trade Accounts Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Trade Accounts Receivable | |
Trade Accounts Receivable | Note 7. Trade Accounts Receivable Our trade accounts receivable consisted of the following: As of September 30, December 31, 2015 2014 (In thousands) Trade accounts receivable $ $ Contracts in process, net Total trade accounts receivable Allowance for doubtful accounts ) ) Trade accounts receivable - DISH Network Total trade accounts receivable, net $ $ As of September 30, 2015 and December 31, 2014, progress billings offset against contracts in process amounted to $0.8 million and $2.5 million, respectively. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2015 | |
Inventory | |
Inventory | Note 8. Inventory Our inventory consisted of the following: As of September 30, December 31, 2015 2014 (In thousands) Finished goods $ $ Raw materials Work-in-process Total inventory $ $ |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment | |
Property and Equipment | Note 9. Property and Equipment Property and equipment consisted of the following: Depreciable As of Life September 30, December 31, (In Years) 2015 2014 (In thousands) Land - $ $ Buildings and improvements 1-40 Furniture, fixtures, equipment and other 1-12 Customer rental equipment 2-4 Satellites - owned 2-15 Satellites acquired under capital leases 10-15 Construction in progress - Total property and equipment Accumulated depreciation ) ) Property and equipment, net $ $ Construction in progress consisted of the following: As of September 30, December 31, 2015 2014 (In thousands) Progress amounts for satellite construction, including prepayments under capital leases and launch services costs $ $ Uplinking equipment Other Construction in progress $ $ Depreciation expense associated with our property and equipment consisted of the following: For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) Satellites $ $ $ $ Furniture, fixtures, equipment and other Customer rental equipment Buildings and improvements Total depreciation expense $ $ $ $ Satellites As of September 30, 2015, we utilized 19 of our owned and leased satellites in geosynchronous orbit, approximately 22,300 miles above the equator. We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite. Two of our satellites are accounted for as capital leases and are depreciated on a straight-line basis over the terms of the satellite service agreements. Three of our satellites are accounted for as operating leases and are not included in property and equipment. Recent Developments Satellite Construction-Launch Services Costs. In the third quarter of 2015, we mutually agreed with a vendor to cancel an existing launch services agreement. Pursuant to the cancellation, we received a refund of prior payments related to the launch services, and credited the refund amount to construction in progress in the third quarter of 2015. Also in the third quarter of 2015, we entered into an agreement with a different vendor to provide for the launch services of the satellite, which is expected to be launched in the fourth quarter of 2016. AMC-15 and AMC-16. In August 2014, in connection with the execution of agreements related to the EchoStar 105/SES-11 satellite, we entered into amendments that extend the terms of our existing agreements with SES Americom Colorado, Inc. for satellite services on the AMC-15 and AMC-16 satellites. As amended, the term of our agreement for satellite services on certain transponders on the AMC-15 satellite was extended from December 2014 through the in-service date of the EchoStar 105/SES-11 satellite. The amended agreement for the AMC-16 satellite services extends the term for the satellite’s entire communications capacity, subject to available power, for one year following expiration of the initial term in February 2015. The extended terms of these agreements are being accounted for as operating leases. Satellite Anomalies Certain of our satellites have experienced anomalies, some of which have had a significant adverse impact on their remaining useful lives and/or the commercial operation of the satellites. There can be no assurance that existing and future anomalies will not further impact the remaining useful life and/or the commercial operation of any of the satellites in our fleet. In addition, there can be no assurance that we can recover critical transmission capacity in the event one or more of our in-orbit satellites were to fail. We generally do not carry in-orbit insurance on our satellites; therefore, we generally bear the risk of any uninsured in-orbit failures. Pursuant to the terms of the agreements governing certain portions of our indebtedness, we are required, subject to certain limitations on coverage, to maintain launch and in-orbit insurance for our SPACEWAY 3, EchoStar XVI, and EchoStar XVII satellites. In addition, although we are not required to maintain in-orbit insurance pursuant to our service agreement with DISH Network for the EchoStar XV satellite, we are liable for any damage caused by our use of the satellite and therefore we carry third-party insurance on the EchoStar XV satellite. We have previously disclosed in our financial statements as of and for the year ended December 31, 2014 anomalies in prior years that affect our in-service owned and leased satellites, including the EchoStar III, EchoStar VI, EchoStar VIII, EchoStar XII, and AMC-16 satellites. In August 2015, SPACEWAY 3 experienced an anomaly causing one of the two on-board computers used to control the satellite payload to temporarily go offline, causing an interruption of service. The issue has since been resolved and the satellite is functioning normally. This anomaly did not affect the long-term commercial operations of the satellite or its estimated useful life. We are not aware of any additional anomalies that have occurred with respect to any of our owned or leased satellites in 2015 as of the date of this report that have materially affected the commercial operation of these satellites or their useful life. The EchoStar III and EchoStar VI satellites are fully depreciated and the EchoStar III satellite is being used as an in-orbit spare; accordingly, the prior anomalies affecting these satellites have not had a significant effect on our operating results and cash flows. The EchoStar XII satellite, as previously disclosed in our Form 10-K, has experienced several anomalies, which have resulted in a loss of electrical power. Those anomalies have not had a significant adverse impact on service under the related satellite services agreement with DISH Network for the EchoStar XII satellite; however, the anomalies have increased the risk of future transponder failures that could result in reductions in our revenue. Satellite Impairments We evaluate our satellites for impairment and test for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Certain of the anomalies previously disclosed, may be considered to represent a significant adverse change in the physical condition of a particular satellite. However, based on the redundancy designed within each satellite, certain of these anomalies are not necessarily considered to be significant events that would require a test of recoverability. |
Goodwill, Regulatory Authorizat
Goodwill, Regulatory Authorizations and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill, Regulatory Authorizations and Other Intangible Assets | |
Goodwill, Regulatory Authorizations and Other Intangible Assets | Note 10. Goodwill, Regulatory Authorizations and Other Intangible Assets Goodwill The excess of the cost of an acquired business over the fair values of net tangible and identifiable intangible assets at the time of the acquisition is recorded as goodwill. Goodwill is assigned to our reporting units of our operating segments and is subject to impairment testing annually, or more frequently when events or changes in circumstances indicate the fair value of a reporting unit is more likely than not less than its carrying amount. As of September 30, 2015 and December 31, 2014, approximately $504.2 million of our goodwill was assigned to reporting units of our Hughes segment. We test this goodwill for impairment annually in the second quarter. Based on our qualitative assessment of impairment of such goodwill in the second quarter of 2015, we determined that it was not more likely than not that the fair values of the Hughes segment reporting units were less than the corresponding carrying amounts. In August 2014, we and Sling TV Holding entered into the Exchange Agreement pursuant to which, among other things, Sling TV Holding distributed certain assets to us at their carrying amounts, including our Move Network business with associated goodwill of $6.5 million. See Note 16 for a description of the Exchange Agreement. Regulatory Authorizations Regulatory authorizations included amounts with finite and indefinite useful lives, as follows: As of Currency As of December 31, Translation September 30, 2014 Additions Adjustment 2015 (In thousands) Finite useful lives: Cost $ $ — $ ) $ Accumulated amortization ) ) ) Net ) ) Indefinite lives — — Total regulatory authorizations, net $ $ ) $ ) $ Other Intangible Assets Our other intangible assets, which are subject to amortization, consisted of the following: Weighted As of Average September 30, 2015 December 31, 2014 Useful life Accumulated Carrying Accumulated Carrying (in Years) Cost Amortization Amount Cost Amortization Amount (In thousands) Customer relationships 8 $ $ ) $ $ $ ) $ Contract-based 10 ) ) Technology-based 7 ) ) Trademark portfolio 20 ) ) Favorable leases 4 ) — ) Total other intangible assets $ $ ) $ $ $ ) $ Customer relationships are amortized predominantly in relation to the expected contribution of cash flow to the business over the life of the intangible asset. Other intangible assets are amortized on a straight-line basis over the periods the assets are expected to contribute to our cash flows. Amortization expense, including amortization of regulatory authorizations with finite lives and externally marketed capitalized software, was $18.2 million and $22.8 million for the three months ended September 30, 2015 and 2014, respectively, and $57.6 million and $70.6 million for the nine months ended September 30, 2015 and 2014, respectively. |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2015 | |
Debt and Capital Lease Obligations | |
Debt and Capital Lease Obligations | Note 11. Debt and Capital Lease Obligations The following table summarizes the carrying amounts and fair values of our debt: As of September 30, 2015 December 31, 2014 Carrying Fair Carrying Fair Amount Value Amount Value (In thousands) 6 1/2% Senior Secured Notes due 2019 $ $ $ $ 7 5/8% Senior Notes due 2021 Other Subtotal $ $ Capital lease obligations Total debt and capital lease obligations Less: Current portion ) ) Long-term portion of debt and capital lease obligations $ $ On June 12, 2015, we redeemed $110.0 million of HSS’ 6 1/2% Senior Secured Notes due 2019 (the “Senior Secured Notes”) at a redemption price equal to 103.0% of the principal amount plus related accrued interest. As a result, we recorded a $5.0 million loss consisting of the $3.3 million redemption premium and $1.7 million representing the write-off of related deferred financing costs. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | Note 12. Income Taxes Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant volatility due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, income and losses from investments, changes in tax laws and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. Income tax expense was approximately $65.8 million and $28.2 million for the nine months ended September 30, 2015 and 2014, respectively. Our effective income tax rate was 43.1% and 22.0% for the nine months ended September 30, 2015 and 2014, respectively. The variation in our current year effective tax rate from the U.S. federal statutory rate for the nine months ended September 30, 2015 was primarily due to the increase in our valuation allowance associated with certain foreign losses as well as realized and unrealized losses that are capital in nature for tax purposes, partially offset by research and experimentation tax credits. For the nine months ended September 30, 2014, the variation in our effective tax rate from the U.S. federal statutory rate was primarily due to research and experimentation tax credits and a lower state effective tax rate, partially offset by the increase in our valuation allowance associated with realized and unrealized losses that are capital in nature for tax purposes. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 13. Stock-Based Compensation We maintain stock incentive plans to attract and retain officers, directors and key employees. Stock awards under these plans include both performance based and non-performance based stock incentives. We granted stock options to our employees and nonemployee directors to acquire 27,000 and 909,000 shares of our Class A common stock for the three and nine months ended September 30, 2015, respectively. We granted stock options to our employees and nonemployee directors to acquire 100,000 and 315,000 shares of our Class A common stock for the three and nine months ended September 30, 2014, respectively. We granted zero and 100,000 restricted stock units (“RSU”) for the three and nine months ended September 30, 2015, respectively. The RSUs vest based on the attainment of certain quarterly company performance criteria for the second, third and fourth quarters of 2015 and will expire on March 31, 2016. During the three and nine months ended September 30, 2015, 33,333 of the RSUs vested. Our stock-based compensation expense was recorded in our condensed consolidated statements of operations and comprehensive income (loss) as follows: For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) Research and development expenses $ $ $ $ Selling, general and administrative expenses Total stock-based compensation $ $ $ $ As of September 30, 2015, total unrecognized stock-based compensation cost, net of estimated forfeitures, related to our unvested stock awards was $38.4 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Commitments As of September 30, 2015, our satellite-related obligations were approximately $1.27 billion. Our satellite-related obligations primarily include payments pursuant to agreements for the construction of the EchoStar XIX, EchoStar XXI, EchoStar XXIII, and EchoStar 105/SES-11 satellites, payments pursuant to launch services contracts and regulatory authorizations, executory costs for our capital lease satellites, costs under satellite service agreements and in-orbit incentives relating to certain satellites, as well as commitments for long-term satellite operating leases and satellite service arrangements. Contingencies Separation Agreement In connection with the Spin-off, we entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, we have assumed certain liabilities that relate to our 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, we will only be liable for our acts or omissions following the Spin-off and DISH Network will indemnify us 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. 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. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable and the amount of the loss can be reasonably estimated. Legal fees and other costs of defending litigation are charged to expense as incurred. For certain cases described below, 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 in management’s opinion; (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 are involved (as with many patent-related cases). 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. California Institute of Technology On October 1, 2013, the California Institute of Technology (“Caltech”) filed suit against two of our subsidiaries, Hughes Communications, Inc. and Hughes Network Systems, LLC (“HNS”), as well as against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C., in the United States District Court for the Central District of California alleging infringement of United States Patent Nos. 7,116,710; 7,421,032; 7,916,781; and 8,284,833, each of which is entitled “Serial Concatenation of Interleaved Convolutional Codes forming Turbo-Like Codes.” Caltech asserted that encoding data as specified by the DVB-S2 standard infringes each of the asserted patents. In the operative Amended Complaint, served on March 6, 2014, Caltech claims that the Hopper TM set-top box that we design and sell to DISH Network, as well as certain of our Hughes segment’s satellite broadband products and services, infringe the asserted patents by implementing the DVB-S2 standard. On September 26, 2014, Caltech requested leave to amend its Amended Complaint to add EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C. as defendants, as well as to allege that a number of additional set-top boxes infringe the asserted patents. On November 7, 2014, the Court rejected that request. Additionally, on November 4, 2014, the Court ruled that the patent claims at issue in the suit are directed to patentable subject matter. On February 17, 2015, Caltech filed a second complaint in the same district against the same defendants alleging that HNS’ Gen4 HT1000 and HT1100 products infringe the same patents asserted in the first case. We answered that second complaint on March 24, 2015. The trial for the first case which was scheduled to commence on April 20, 2015, was vacated by the Court on March 16, 2015 and a new trial date has yet to be set. On May 5, 2015, the Court granted summary judgment for us on a number of issues, finding that Caltech’s damages theory improperly apportioned alleged damages, that allegations of infringement against DISH Network, DISH Network L.L.C., and dishNET Satellite Broadband L.L.C. should be dismissed from the case, and affirming that Caltech could not assert infringement under the doctrine of equivalents. The Court also granted motions by Caltech seeking findings that certain of its patents were not indefinite or subject to equitable estoppel. The Court otherwise denied motions for summary judgment, including a motion by Caltech seeking summary judgment of infringement. On May 14, 2015, the judge assigned to the case passed away. A new judge has not yet been formally assigned. The parties are discussing resolving these cases without further litigation. There can be no assurance that a settlement agreement will be reached. If a settlement agreement is not reached, we cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages and we intend to vigorously defend these cases. 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 our consumers. ClearPlay, Inc. On March 13, 2014, ClearPlay, Inc. (“ClearPlay”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network and DISH Network L.L.C. in the United States District Court for the District of Utah. The complaint alleges infringement of United States Patent Nos. 6,898,799, entitled “Multimedia Content Navigation and Playback”; 7,526,784, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,543,318, entitled “Delivery of Navigation Data for Playback of Audio and Video Content”; 7,577,970, entitled “Multimedia Content Navigation and Playback”; and 8,117,282, entitled “Media Player Configured to Receive Playback Filters From Alternative Storage Mediums.” ClearPlay alleges that the AutoHop™ feature of the Hopper TM set-top box infringes the asserted patents. On February 11, 2015, the Court stayed the case pending various third-party challenges before the United States Patent and Trademark Office regarding the validity of certain of the patents ClearPlay asserted in the case. 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. CRFD Research, Inc. (a subsidiary of Marathon Patent Group, Inc.) On January 17, 2014, CRFD Research, Inc. (“CRFD”) filed a complaint against EchoStar Corporation and our subsidiary, EchoStar Technologies L.L.C., as well as against DISH Network, DISH DBS Corporation and DISH Network L.L.C., in United States District Court for the District of Delaware, alleging infringement of United States Patent No. 7,191,233 (the “233 patent”). The 233 patent is entitled “System for Automated, Mid-Session, User-Directed, Device-to-Device Session Transfer System,” and relates to transferring an ongoing software session from one device to another. CRFD alleges that certain of our set-top boxes infringe the 233 patent. On the same day, CRFD filed patent infringement complaints against AT&T Inc.; Comcast Corp.; DirecTV; Time Warner Cable Inc.; Cox Communications, Inc.; Level 3 Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc. On January 26, 2015, we and DISH Network filed a petition before the United States Patent and Trademark Office challenging the validity of the 233 patent. The United States Patent and Trademark Office has agreed to institute a proceeding on our petition, as well as on two third-party petitions challenging the validity of the 233 patent. On June 4, 2015, the litigation in the District Court was ordered stayed pending resolution of the proceeding before the United States Patent and Trademark Office. CRFD is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, 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. Elbit On January 23, 2015, Elbit Systems Land and C4I LTD and Elbit Systems of America Ltd. (together referred to as “Elbit”) filed a complaint against our subsidiary HNS, as well as against Black Elk Energy Offshore Operations, LLC, Bluetide Communications, Inc. and Helm Hotels Group, in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 6,240,073 (the “073 patent”) and 7,245,874 (“874 patent”). The 073 patent is entitled “Reverse Link for a Satellite Communication Network” and the 874 patent is entitled “Infrastructure for Telephony Network.” Elbit alleges that the 073 patent is infringed by broadband satellite systems that practice the Internet Protocol Over Satellite standard. Elbit alleges that the 874 patent is infringed by the manufacture and sale of broadband satellite systems that provide cellular backhaul service via connections to E1 or T1 interfaces at cellular backhaul base stations. On March 16, 2015, the defendants filed motions to dismiss portions of Elbit’s complaint. On April 2, 2015, Elbit responded to those motions to dismiss and further filed an amended complaint removing Helm Hotels Group as a defendant, but making similar allegations against a new defendant, Country Home Investments, Inc. On April 20, 2015, the defendants filed motions to dismiss portions of Elbit’s amended complaint. 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. The Hopper Litigation On May 24, 2012, DISH Network L.L.C., filed suit in the United States District Court for the Southern District of New York against American Broadcasting Companies, Inc. (“ABC”), CBS Corporation (“CBS”), Fox Entertainment Group, Inc., Fox Television Holdings, Inc., Fox Cable Network Services, L.L.C. (collectively, “Fox”) and NBCUniversal Media, LLC (“NBC”). The lawsuit seeks a declaratory judgment that DISH Network L.L.C is not infringing any defendant’s copyright, or breaching any defendant’s retransmission consent agreement, by virtue of the PrimeTime Anytime™ and AutoHop features of the Hopper™ set-top boxes we design and sell to DISH Network. A consumer can use the PrimeTime Anytime feature at his or her option, to record certain primetime programs airing on ABC, CBS, Fox, and/or NBC up to every night, and to store those recordings for up to eight days. A consumer can use the AutoHop feature at his or her option, to watch certain recordings the subscriber made with our PrimeTime Anytime feature, commercial-free, if played back at a certain point after the show’s original airing. Later on May 24, 2012, (i) Fox Broadcasting Company, Twentieth Century Fox Film Corp. and Fox Television Holdings, Inc. filed a lawsuit against DISH Network and DISH Network L.L.C. (collectively, “DISH”) in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature, the AutoHop feature, as well as DISH’s use of Slingbox placeshifting functionality infringe their copyrights and breach their retransmission consent agreements, (ii) NBC Studios LLC, Universal Network Television, LLC, Open 4 Business Productions LLC and NBCUniversal Media, LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights, and (iii) CBS Broadcasting Inc., CBS Studios Inc. and Survivor Productions LLC filed a lawsuit against DISH in the United States District Court for the Central District of California, alleging that the PrimeTime Anytime feature and the AutoHop feature infringe their copyrights. As a result of certain parties’ competing counterclaims and venue-related motions brought in both the New York and California actions, as described below, and certain networks filing various amended complaints, the claims have proceeded in the following venues: (1) the copyright and contract claims regarding the ABC and CBS parties in New York; and (2) the copyright and contract claims regarding the Fox and NBC parties in California. California Actions . On August 17, 2012, the NBC plaintiffs filed a first amended complaint in their California action adding EchoStar Corporation and our subsidiary EchoStar Technologies L.L.C. to the NBC litigation, alleging various claims of copyright infringement. We and our subsidiary answered on September 18, 2012. On November 7, 2012, the California court denied the Fox plaintiffs’ motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features, and the Fox plaintiffs appealed. On March 27, 2013, at the request of the parties, the Central District of California granted a stay of all proceedings in the action brought by the NBC plaintiffs, pending resolution of the appeal by the Fox plaintiffs. On July 24, 2013, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion for a preliminary injunction as to the PrimeTime Anytime and AutoHop features. On August 7, 2013, the Fox plaintiffs filed a petition for rehearing and rehearing en banc, which was denied on January 24, 2014. The United States Supreme Court granted the Fox plaintiffs an extension until May 23, 2014 to file a petition for writ of certiorari, but they did not file. As a result, the stay of the NBC plaintiffs’ action expired. On August 6, 2014, at the request of the parties, the Central District of California granted a further stay of all proceedings in the action brought by the NBC plaintiffs, pending a final judgment on all claims in the Fox plaintiffs’ action. No trial date is currently set on the NBC claims. In addition, on February 21, 2013, the Fox plaintiffs filed a second motion for preliminary injunction against: (i) DISH Network, seeking to enjoin the Hopper Transfers™ feature in the second-generation Hopper set-top box, alleging breach of a retransmission consent agreement; and (ii) EchoStar Technologies L.L.C. and DISH Network, seeking to enjoin the Slingbox placeshifting functionality in the second-generation Hopper set-top box, alleging copyright infringement by both defendants, and breach of the earlier-mentioned retransmission consent agreement by DISH Network. The Fox plaintiffs’ motion was denied on September 23, 2013. The Fox plaintiffs appealed, and on July 14, 2014, the United States Court of Appeals for the Ninth Circuit affirmed the denial of the Fox plaintiffs’ motion. On October 17, 2014, the California court heard oral argument on the Fox plaintiffs’ and our respective motions for summary judgment. On January 12, 2015, the Court entered an order ruling on the parties’ respective summary judgment motions, holding that: (a) the Slingbox placeshifting functionality and the PrimeTime Anytime, AutoHop and Hopper Transfers features do not violate copyright law; (b) certain quality assurance copies (which were discontinued in November 2012) did violate copyright law; and (c) the Slingbox placeshifting functionality, the Hopper Transfers feature and certain quality assurance copies breach DISH’s retransmission consent agreement with Fox. The only issue remaining for trial is to the amount of damages, if any, on the claims upon which the Fox plaintiffs prevailed on summary judgement, but the Court ruled that the Fox plaintiffs could not pursue disgorgement as a remedy. At the parties’ joint request, the Court has stayed the case until January 15, 2016 and no trial date has been set. New York Actions . On October 9, 2012, the ABC plaintiffs filed copyright counterclaims in the New York action against EchoStar Technologies, L.L.C., with the CBS plaintiffs filing similar copyright counterclaims in the New York action against EchoStar Technologies L.L.C. on October 12, 2012. Additionally, the CBS plaintiffs filed a counterclaim alleging that DISH Network fraudulently concealed the AutoHop feature when negotiating the renewal of its CBS retransmission consent agreement. On November 23, 2012, the ABC plaintiffs filed a motion for a preliminary injunction to enjoin the Hopper set-top box’s PrimeTime Anytime and AutoHop features. On September 18, 2013, the New York court denied that motion. The ABC plaintiffs appealed, and oral argument on the appeal was heard on February 20, 2014 before the United States Court of Appeals for the Second Circuit. Pursuant to a settlement between us and the ABC parties, on March 4, 2014, the ABC parties withdrew their appeal to the United States Court of Appeals for the Second Circuit, and, on March 6, 2014, we and the ABC parties dismissed without prejudice all of our respective claims pending in the United States District Court for the Southern District of New York. The CBS claims in the New York action were scheduled for trial on May 29, 2015. However, on December 6, 2014 the parties to the CBS case reached a settlement agreement and all claims pending in New York Court were dismissed with prejudice on December 10, 2014. We intend to vigorously prosecute and defend our position in these cases. In the event that a court ultimately determines that we infringe the asserted copyrights, we may be subject to substantial damages, and/or an injunction that could require us to materially modify certain features that we currently offer to DISH Network. An adverse decision against DISH Network could decrease the number of Sling enabled set-top boxes we sell to DISH Network, which could have an adverse impact on the business operations of our EchoStar Technologies segment. In addition, to the extent that DISH Network experiences fewer gross new subscriber additions, sales of our digital set-top boxes and related components to DISH Network may further decline, which in turn could have a material adverse effect on our financial position and results of operations. We cannot predict with any degree of certainty the outcome of these suits or determine the extent of any potential liability or damages. Kappa Digital, LLC On June 1, 2015, Kappa Digital LLC (“Kappa”) filed suit against our subsidiary HNS in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent No. 6,349,135, entitled “Method and System for a Wireless Digital Message Service.” Kappa generally alleges that HNS’ “HughesNet Gen 4 residential internet service/systems” and “HughesNet Business Broadband service/systems” infringe its asserted patent. Kappa is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the asserted patent, we may be subject to substantial damages, which may include treble damages, and/or an injunction that could cause us to materially modify certain features that we currently offer to consumers. We cannot predict with any degree of certainty the outcome of this suit or determine the extent of any potential liability or damages. LightSquared/Harbinger Capital Partners LLC (LightSquared Bankruptcy) On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), a shareholder of LightSquared Inc. (“LightSquared”), filed an adversary proceeding against EchoStar Corporation, DISH Network, L-Band Acquisition, LLC (“LBAC”), Charles W. Ergen (our Chairman), SP Special Opportunities, LLC (“SPSO”) (an entity controlled by Mr. Ergen), and certain other parties, in the LightSquared bankruptcy cases pending in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re LightSquared Inc., et. al., Case No. 12 12080 (SCC). Harbinger alleged, among other things, claims based on fraud, unfair competition, civil conspiracy and tortious interference with prospective economic advantage related to certain purchases of LightSquared secured debt by SPSO. Subsequently, LightSquared intervened to join in certain claims alleged against certain defendants other than us, DISH Network and LBAC. On October 29, 2013, the Bankruptcy Court dismissed all of the claims against us in Harbinger’s complaint in their entirety, but granted leave for LightSquared to file its own complaint in intervention. On November 15, 2013, LightSquared filed its complaint, which included various claims against us, DISH Network, Mr. Ergen and SPSO. On December 2, 2013, Harbinger filed an amended complaint, asserting various claims against SPSO. On December 12, 2013, the Bankruptcy Court dismissed several of the claims asserted by LightSquared and Harbinger. The surviving claims included, among others, LightSquared’s claims against SPSO for declaratory relief, breach of contract and statutory disallowance; LightSquared’s tortious interference claim against us, DISH Network and Mr. Ergen; and Harbinger’s claim against SPSO for statutory disallowance. These claims proceeded to a non-jury trial on January 9, 2014, which concluded on January 17, 2014. The parties submitted post-trial briefs and a hearing for closing arguments occurred on March 17, 2014. In its Post-Trial Findings of Fact and Conclusions of Law entered on June 10, 2014, the Bankruptcy Court rejected all claims against us and DISH Network, and it rejected some but not all claims against the other defendants. On July 7, 2015, the United States District Court for the Southern District of New York denied Harbinger’s motion for an appeal of certain Bankruptcy Court orders in the adversary proceeding. We intend to vigorously defend any claims against us in this proceeding and cannot predict with any degree of certainty the outcome of this proceeding or determine the extent of any potential liability or damages. Michael Heskiaoff, Marc Langenohl, and Rafael Mann On July 10, 2015, Messrs. Michael Heskiaoff and Marc Langenohl, purportedly on behalf of themselves and all others similarly situated, filed suit against our subsidiary Sling Media, Inc. in the United Stated District Court for the Southern District of New York. The complaint alleges that Sling Media Inc.’s display of advertising to its customers violates a number of state statutes dealing with consumer deception. On September 25, 2015, the plaintiffs filed an amended complaint, and Mr. Rafael Mann, purportedly on behalf of himself and all others similarly situated, filed an additional complaint alleging similar causes of action. We intend to vigorously defend this case. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability. Personalized Media Communications, Inc. During 2008, Personalized Media Communications, Inc. (“PMC”) filed suit against EchoStar Corporation, DISH Network and Motorola Inc. in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 5,109,414; 4,965,825; 5,233,654; 5,335,277; and 5,887,243, which relate to satellite signal processing. PMC is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Subsequently, Motorola Inc. settled with PMC, leaving DISH Network and us as defendants. On July 18, 2012, pursuant to a Court order, PMC filed a Second Amended Complaint that added Rovi Guides, Inc. (f/k/a/ Gemstar-TV Guide International, Inc.) and TVG-PMC, Inc. (collectively, “Gemstar”) as a party, and added a new claim against all defendants seeking a declaratory judgment as to the scope of Gemstar’s license to the patents in suit, under which DISH Network and we are sublicensees. On August 12, 2014, in response to the parties’ respective summary judgment motions related to the Gemstar license issues, the Court ruled in favor of PMC and dismissed all claims by or against Gemstar and entered partial final judgment in PMC’s favor as to those claims. On September 16, 2014, we and DISH Network filed a notice of appeal of that partial final judgment, which is pending. On November 5, 2014, PMC supplemented its expert report on damages, dropping a higher value damages theory and disclosing that it seeks damages ranging from $167 million to $447 million as of September 30, 2014, excluding pre-judgment interest and possible treble damages under Federal law. On May 7, 2015, we, DISH Network and PMC entered into a settlement and release agreement that provided, among other things, for a license by PMC to us and DISH Network for certain patents and patent applications and the dismissal of all of PMC’s claims in the action against us and DISH Network with prejudice. In June 2015, we and DISH Network agreed that we would contribute a one-time payment of $5.0 million towards the settlement under the agreements entered into in connection with the Spin-off and the 2012 Receiver Agreement. On June 4, 2015, the Court dismissed all of PMC’s claims in the action against us and DISH Network with prejudice. We have recorded a loss related to the settlement within “Selling, general and administrative expenses” in our condensed consolidated statement of operations and comprehensive income (loss) of zero and $5.0 million for the three and nine months ended September 30, 2015, respectively. Phoenix Licensing, L.L.C./LPL Licensing, L.L.C. On July 30, 2015, Phoenix Licensing, L.L.C. and LPL Licensing, L.L.C. (together referred to as “Phoenix”) filed a complaint against our subsidiary HNS in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 5,987,434, entitled “Apparatus and Method for Transacting Marketing and Sales of Financial Products”; 7,890,366, entitled “Personalized Communication Documents, System and Method for Preparing Same”; 8,352,317, entitled “System for Facilitating Production of Variable Offer Communications”; 8,234,184, entitled “Automated Reply Generation Direct Marketing System”; 6,999,938, entitled “Automated Reply Generation Direct Marketing System”; 8,738,435, entitled “Method and Apparatus for Presenting Personalized Content Relating to Offered Products and Services”; and 7,860,744, entitled “System and Method for Automatically Providing Personalized Notices Concerning Financial Products and/or Services.” Phoenix alleged that HNS infringes the asserted patents by making and using products and services that generate customized marketing materials. Phoenix is an entity that seeks to license a patent portfolio without itself practicing any of the claims recited therein against us. On October 16, 2015, Phoenix moved to dismiss the litigation against us without prejudice pursuant to a settlement agreement, and on November 3, 2015, the action was dismissed accordingly. Realtime Data LLC On May 8, 2015, Realtime Data LLC (“Realtime”) filed suit against EchoStar Corporation and our subsidiary HNS in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 7,378,992, entitled “Content Independent Data Compression Method and System”; 7,415,530, entitled “System and Methods for Accelerated Data Storage and Retrieval”; and 8,643,513, entitled “Data Compression System and Methods.” Realtime generally alleges that the asserted patents are infringed by certain HNS data compression products and services. Realtime is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the asserted patents, we may be subject to substantial damages, which may include supplemental damages, and/or an injunction that could cause 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. Shareholder Derivative Litigation On December 5, 2012, Greg Jacobi, purporting to sue derivatively on behalf of EchoStar Corporation, filed suit (the “Jacobi Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Joseph P. Clayton, David K. Moskowitz, and EchoStar Corporation in the United States District Court for the District of Nevada. The complaint alleges that a March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets. On December 18, 2012, Chester County Employees’ Retirement Fund, derivatively on behalf of EchoStar Corporation, filed a suit (the “Chester County Litigation”) against Charles W. Ergen, Michael T. Dugan, R. Stanton Dodge, Tom A. Ortolf, C. Michael Schroeder, Anthony M. Federico, Pradman P. Kaul, Joseph P. Clayton, and EchoStar Corporation in the United States District Court for the District of Colorado. The complaint similarly alleges that the March 2011 attempted grant of 1.5 million stock options to Charles Ergen breached defendants’ fiduciary duties, resulted in unjust enrichment, and constituted a waste of corporate assets. On February 22, 2013, the Chester County Litigation was transferred to the District of Nevada, and on April 3, 2013, the Chester County Litigation was consolidated into the Jacobi Litigation. Oral argument on a motion to dismiss the Jacobi Litigation was held February 21, 2014. On April 11, 2014, the Chester County litigation was stayed pending resolution of the motion to dismiss. On March 30, 2015, the Court dismissed the Jacobi litigation, with leave for Jacobi to amend his complaint by April 20, 2015. On April 20, 2015, Jacobi filed an amended complaint, which on June 12, 2015, we moved to dismiss. Of the attempted grant of 1.5 million options to Mr. Ergen in 2011, only 800,000 were v |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting | |
Segment Reporting | Note 15. Segment Reporting Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for EchoStar is the Company’s Chief Executive Officer. Under this definition, we operate the following three primary business segments: · EchoStar Technologies — which designs, develops and distributes digital set-top boxes and related products and technology, primarily for satellite TV service providers and telecommunication companies. Our EchoStar Technologies segment also provides digital broadcast operations, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services primarily to DISH Network. In addition, we provide our TVEverywhere technology through Slingboxes directly to consumers via retail outlets and online, as well as to the pay-TV operator market. Beginning in 2015, this segment also includes our Move Network business, which primarily provides support services to DISH Network’s Sling TV operations. · Hughes — which provides satellite broadband internet access to North American consumers and broadband network services and equipment to domestic and international enterprise markets. The Hughes segment also provides managed services to large enterprises and solutions to customers for mobile satellite systems. · EchoStar Satellite Services — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite services on a full-time and occasional-use basis primarily to DISH Network, Dish Mexico, U.S. government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA. Our segment operating results do not include real estate and other activities, costs incurred in certain satellite development programs and other business development activities, expenses of various corporate departments, and our centralized treasury operations, including income from our investment portfolio and interest expense on our debt. These activities are accounted for in the “All Other and Eliminations” column in the table below. Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. The Hughes Retail Group is included in our Hughes segment and our CODM reviews separate HRG financial information only to the extent such information is included in our periodic filings with the SEC. Therefore, we do not consider HRG to be a separate operating segment. Prior to 2015, our Move Network business, including certain assets distributed to us in August 2014 in connection with the Exchange Agreement with Sling TV Holding (see Notes 6, 10 and 16), was managed separately from our existing operating segments and was reported within “All Other and Eliminations.” In the first quarter of 2015, we assigned management responsibility for our Move Network business to our EchoStar Technologies segment, where it continues to be managed and reported as a separate reporting unit. All prior period amounts have been retrospectively adjusted to present operations of our Move Network business in our EchoStar Technologies segment. Transactions between segments were not significant for the three and nine months ended September 30, 2015 and 2014. The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments. EchoStar All EchoStar Satellite Other and Consolidated Technologies Hughes Services Eliminations Total (In thousands) For the Three Months Ended September 30, 2015 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ For the Three Months Ended September 30, 2014 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ $ Capital expenditures $ $ $ $ $ For the Nine Months Ended September 30, 2015 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ For the Nine Months Ended September 30, 2014 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ The following table reconciles total consolidated EBITDA to reported “Income before income taxes” in our condensed consolidated statements of operations and comprehensive income (loss): For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) EBITDA $ $ $ $ Interest income and expense, net ) ) ) ) Depreciation and amortization ) ) ) ) Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests ) ) ) ) Income before income taxes $ $ $ $ |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions | |
Related Party Transactions | Note 16. Related Party Transactions DISH Network Following the Spin-off, we and DISH Network have operated as separate publicly-traded companies. However, pursuant to the Satellite and Tracking Stock Transaction, described in Note 2 and below, DISH Network owns Hughes Retail Preferred Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business. In addition, a substantial majority of the voting power of the shares of both companies is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. In connection with and following the Spin-off, we and DISH Network have entered into certain agreements pursuant to which we obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and rights from us; and we and DISH Network have indemnified each other against certain liabilities arising from our respective businesses. We also may enter into additional agreements with DISH Network in the future. Generally, the amounts DISH Network pays for products and services provided under the agreements are based on our cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. The following is a summary of the terms of our principal agreements with DISH Network that may have an impact on our financial condition and results of operations. “Equipment revenue — DISH Network” Receiver Agreement . Effective January 1, 2012, we and DISH Network entered into a receiver agreement (the “2012 Receiver Agreement”), pursuant to which DISH Network has the right, but not the obligation, to purchase digital set-top boxes, related accessories, and other equipment from us for the period from January 1, 2012 to December 31, 2014. The 2012 Receiver Agreement replaced the receiver agreement we entered into with DISH Network in connection with the Spin-off. The 2012 Receiver Agreement allows DISH Network to purchase digital set-top boxes, related accessories, and other equipment from us either: (i) at cost (decreasing as we reduce costs and increasing as costs increase) plus a dollar mark-up which will depend upon the cost of the product subject to a collar on our mark-up; or (ii) at cost plus a fixed margin, which will depend on the nature of the equipment purchased. Under the 2012 Receiver Agreement, our margins will be increased if we are able to reduce the costs of our digital set-top boxes and our margins will be reduced if these costs increase. We provide DISH Network with standard manufacturer warranties for the goods sold under the 2012 Receiver Agreement. Additionally, the 2012 Receiver Agreement includes an indemnification provision, whereby the parties indemnify each other for certain intellectual property matters. DISH Network is able to terminate the 2012 Receiver Agreement for any reason upon at least 60 days’ notice to us. We are able to terminate the 2012 Receiver Agreement if certain entities acquire DISH Network. DISH Network has an option, but not the obligation, to extend the 2012 Receiver Agreement for one additional year upon 180 days’ notice prior to the end of the term. On May 5, 2014, we received DISH Network’s notice to extend the 2012 Receiver Agreement for one year to December 31, 2015, and on November 4, 2015, we amended the 2012 Receiver Agreement with DISH Network to extend the term of the 2012 Receiver Agreement for one year to December 31, 2016. “Services and other revenue — DISH Network” Broadcast Agreement . Effective January 1, 2012, we and DISH Network entered into a new broadcast agreement (the “2012 Broadcast Agreement”) pursuant to which we provide certain broadcast services to DISH Network, including teleport services such as transmission and downlinking, channel origination services, and channel management services, for the period from January 1, 2012 to December 31, 2016. The 2012 Broadcast Agreement replaced the broadcast agreement that we entered into with DISH Network in connection with the Spin-off. The fees for the services provided under the 2012 Broadcast Agreement are calculated at either: (a) our cost of providing the relevant service plus a fixed dollar fee, which is subject to certain adjustments; or (b) our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided. DISH Network has the ability to terminate channel origination services and channel management services for any reason and without any liability upon at least 60 days’ notice to us. If DISH Network terminates the teleport services provided under the 2012 Broadcast Agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate. Broadcast Agreement for Certain Sports Related Programming . During May 2010, we and DISH Network entered into a broadcast agreement pursuant to which we provide certain broadcast services to DISH Network in connection with its carriage of certain sports related programming. The term of this agreement is ten years. If DISH Network terminates this agreement for a reason other than our breach, DISH Network generally is obligated to reimburse us for any direct costs we incur related to any such termination that we cannot reasonably mitigate. The fees for the broadcast services provided under this agreement depend, among other things, upon the cost to develop and provide such services. Satellite Services Provided to DISH Network . Since the Spin-off, we have entered into certain satellite service agreements pursuant to which DISH Network receives satellite services on certain satellites owned or leased by us. The fees for the services provided under these satellite service agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are providing services on the applicable satellite, and the length of the service arrangements. The terms of each service arrangement is set forth below: EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV. As part of the Satellite and Tracking Stock Transaction discussed in Note 2, on March 1, 2014, we began providing certain satellite services to DISH Network on the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. The term of each satellite services 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. DISH Network generally has the option to renew each satellite service 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. DISH Network has elected not to renew the satellite services agreement relative to the EchoStar I satellite. The agreement for the EchoStar I satellite will expire pursuant to its terms effective November 30, 2015. EchoStar VIII. In May 2013, DISH Network began receiving satellite services from us on the EchoStar VIII satellite as an in-orbit spare. Effective March 1, 2014, this satellite services arrangement converted to a month-to-month service agreement. Both parties have the right to terminate this agreement upon 30 days’ notice. The agreement will terminate in accordance with its terms effective in November 2015. EchoStar IX . Effective January 2008, DISH Network began receiving satellite services from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue to receive satellite services from us on the EchoStar IX satellite on a month-to-month basis. EchoStar XII . DISH Network receives satellite services from us on the EchoStar XII satellite. The term of the satellite services agreement terminates upon the earlier of: (i) the end of life of the satellite; (ii) the date the satellite fails or the date the transponder(s) on which the service was being provided under the agreement fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite. DISH Network generally has the option to renew the agreement on a year-to-year basis through the end of the satellite’s life. There can be no assurance that any options to renew this agreement will be exercised. EchoStar XVI . During December 2009, we entered into an initial ten-year transponder service agreement with DISH Network, pursuant to which DISH Network has received satellite services from us on the EchoStar XVI satellite since January 2013. Effective December 21, 2012, we and DISH Network 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. Prior to expiration of the initial term, we, upon certain conditions, and DISH Network have the option to renew for an additional six-year period. If either we or DISH Network exercise our respective six-year renewal options, DISH Network has the option to renew for an additional five-year period prior to expiration of the then-current term. There can be no assurance that any option to renew this agreement will be exercised. Nimiq 5 Agreement . During 2009, we entered into a fifteen-year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). During 2009, we also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with DISH Network, pursuant to which DISH Network receives satellite services from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. Under the terms of the DISH Nimiq 5 Agreement, DISH Network makes certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service, and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire ten years following the date the Nimiq 5 satellite was placed into service. Upon expiration of the initial term, DISH Network has the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end of life of the Nimiq 5 satellite. Upon in-orbit failure or end of life of the Nimiq 5 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite. QuetzSat-1 Agreement . During 2008, we entered into a ten-year satellite service agreement with SES Latin America, which provides, among other things, for the provision by SES Latin America to us of service on 32 DBS transponders on the QuetzSat-1 satellite. Concurrently, in 2008, we entered into a transponder service agreement with DISH Network, pursuant to which DISH Network receives satellite services on 24 of the DBS transponders on the QuetzSat-1 satellite. The QuetzSat-1 satellite was launched on September 29, 2011 and was placed into service during the fourth quarter of 2011 at the 67.1 degree west longitude orbital location. In the interim, we provided DISH Network with alternate capacity at the 77 degree west longitude orbital location. During the third quarter of 2012, we and DISH Network entered into an agreement pursuant to which we receive certain satellite services from DISH Network on five DBS transponders on the QuetzSat-1 satellite. In January 2013, the QuetzSat-1 satellite was moved to the 77 degree west longitude orbital location and DISH Network commenced commercial operations at such location in February 2013. Under the terms of our contractual arrangements with DISH Network, we began to provide service to DISH Network on the QuetzSat-1 satellite in February 2013 and will continue to provide service through the remainder of the service term. Unless extended or earlier terminated under the terms and conditions of our agreement with DISH Network for the QuetzSat-1 satellite, the initial service term will expire in November 2021. Upon expiration of the initial service term, DISH Network has the option to renew the agreement for the QuetzSat-1 satellite on a year-to-year basis through the end of life of the QuetzSat-1 satellite. Upon an in-orbit failure or end of life of the QuetzSat-1 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that any options to renew this agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite. 103 Degree Orbital Location/SES-3. During May 2012, we entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree west longitude orbital location (the “103 Spectrum Rights”). During June 2013, we and DISH Network entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which DISH Network may use and develop the 103 Spectrum Rights. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. In connection with the 103 Spectrum Development Agreement, during May 2012, we also entered into a ten-year service agreement with Ciel pursuant to which we receive certain satellite services from Ciel on the SES-3 satellite at the 103 degree orbital location. During June 2013, we and DISH Network entered into an agreement pursuant to which DISH Network receives certain satellite services from us on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, DISH Network makes certain monthly payments to us through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) ten years following the actual service commencement date. Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that DISH Network will exercise its option to receive service on a replacement satellite. Satellite and Tracking Stock Transaction . On February 20, 2014, we entered into agreements with DISH Network to implement a transaction pursuant to which, among other things: (i) on March 1, 2014, EchoStar and HSS issued shares of the Tracking Stock to DISH Network in exchange for five satellites owned by DISH Network (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV) (including related in-orbit incentive obligations and interest payments of approximately $58.9 million) and approximately $11.4 million in cash; and (ii) on March 1, 2014, DISH Network began receiving certain satellite services on these five satellites from us. See Note 2 for further information. TT&C Agreement . Effective January 1, 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we provide TT&C services to DISH Network and its subsidiaries for a period ending on December 31, 2016 (the “2012 TT&C Agreement”). The 2012 TT&C Agreement replaced the TT&C agreement we entered into with DISH Network in connection with the Spin-off. The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. DISH Network is able to terminate the 2012 TT&C Agreement for any reason upon 60 days’ notice. In connection with the Satellite and Tracking Stock Transaction, on February 20, 2014, we amended the TT&C Agreement to cease the provision of TT&C services to DISH Network for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. Effective March 1, 2014, we provide TT&C services for the D-1 and EchoStar XV satellites; however, for the period that we receive satellite services on the EchoStar XV satellite from DISH Network, we have waived the fees for the TT&C services on the EchoStar XV satellite. Real Estate Lease Agreements . We have entered into lease agreements pursuant to which DISH Network leases certain real estate from us. The rent on a per square foot basis for each of the leases is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and DISH Network is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. The term of each of the leases is set forth below: Inverness Lease Agreement . The lease for certain space at 90 Inverness Circle East in Englewood, Colorado is for a period ending on December 31, 2016. This agreement can be terminated by either party upon six months’ prior notice. Meridian Lease Agreement . The lease for all of 9601 S. Meridian Blvd. in Englewood, Colorado is for a period ending on December 31, 2016. Santa Fe Lease Agreement . The lease for all of 5701 S. Santa Fe Dr. in Littleton, Colorado is for a period ending on December 31, 2016 with a renewal option for one additional year. EchoStar Data Networks Sublease Agreement . The sublease for certain space at 211 Perimeter Center in Atlanta, Georgia is for a period ending on October 31, 2016. Gilbert Lease Agreement . The original lease for certain space at 801 N. DISH Dr. in Gilbert, Arizona was a month to month lease and could be terminated by either party upon 30 days’ prior notice. The original lease was terminated in May 2014. Effective August 1, 2014, we began leasing this space to DISH Network under a new lease for a period ending July 31, 2016. DISH Network has renewal options for three additional one year terms. Cheyenne Lease Agreement . The lease for certain space at 530 EchoStar Drive in Cheyenne, Wyoming is for a period ending on December 31, 2031. Product Support Agreement . In connection with the Spin-off, we entered into a product support agreement pursuant to which DISH Network has the right, but not the obligation, to receive product support from us (including certain engineering and technical support services) for all set-top boxes and related accessories that we have previously sold and in the future may sell to DISH Network. The fees for the services provided under the product support agreement are calculated at cost plus a fixed margin, which varies depending on the nature of the services provided. The term of the product support agreement is the economic life of such set-top boxes and related accessories, unless terminated earlier. DISH Network may terminate the product support agreement for any reason upon at least 60 days’ notice. In the event of an early termination of this agreement, DISH Network is entitled to a refund of any unearned fees paid to us for the services. DISHOnline.com Services Agreement . Effective January 1, 2010, DISH Network entered into a two-year agreement with us pursuant to which DISH Network receives certain services associated with an online video portal. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. DISH Network has the option to renew this agreement for successive one year terms and the agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us. In October 2014, DISH Network exercised its right to renew this agreement for a one-year period ending on December 31, 2015, and in November 2015, DISH Network exercised its right to renew this agreement for a one-year period ending on December 31, 2016. DISH Remote Access Services Agreement . Effective February 23, 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives, among other things, certain remote digital video recorder (“DVR”) management services. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement had an initial term of five years with automatic renewal for successive one year terms. This agreement will automatically renew on February 23, 2016 for an additional one-year period until February 23, 2017. The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us. SlingService Services Agreement . Effective February 23, 2010, we entered into an agreement with DISH Network pursuant to which DISH Network receives certain services related to placeshifting. The fees for the services provided under this services agreement depend, among other things, upon the cost to develop and operate such services. This agreement had an initial term of five years with automatic renewal for successive one year terms. This agreement will automatically renew on February 23, 2016 for an additional one-year period until February 23, 2017. The agreement may be terminated by DISH Network for any reason upon at least 120 days’ notice to us. Blockbuster Agreements . On April 26, 2011, DISH Network acquired substantially all of the assets of Blockbuster, Inc. (the “Blockbuster Acquisition”). On June 8, 2011, we completed the acquisition of Hughes Communications, Inc. and its subsidiaries (the “Hughes Acquisition”). HNS, a wholly-owned subsidiary of Hughes Communications, Inc., provided certain broadband products and services to Blockbuster, Inc. (with its subsidiaries, “Blockbuster”) pursuant to an agreement that was entered into prior to the Blockbuster Acquisition and the Hughes Acquisition. Subsequent to both the Blockbuster Acquisition and the Hughes Acquisition, Blockbuster entered into a new agreement with HNS pursuant to which Blockbuster could continue to purchase broadband products and services from our Hughes segment. Effective February 1, 2014, all services to all Blockbuster locations, including Blockbuster franchisee locations, terminated in connection with the closing of all of the Blockbuster retail locations. Radio Access Network Agreement . On November 29, 2012, HNS entered into an agreement with DISH Network L.L.C. pursuant to which HNS constructed for DISH Network a ground-based satellite radio access network for a fixed fee. The parties mutually agreed to terminate this agreement in the fourth quarter of 2014. TerreStar Agreement . On March 9, 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and our completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services for TerreStar’s satellite gateway and associated ground infrastructure. These agreements generally may be terminated by DISH Network at any time for convenience. Hughes Broadband Distribution Agreement . Effective October 1, 2012, HNS and dishNET Satellite Broadband L.L.C. (“dishNET”), a wholly-owned subsidiary of DISH Network, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which dishNET has the right, but not the obligation, to market, sell and distribute the Hughes satellite internet service (the “Hughes service”). dishNET pays HNS a monthly per subscriber wholesale service fee for the Hughes service based upon a subscriber’s service level, and, beginning January 1, 2014, based upon certain volume subscription thresholds. The Distribution Agreement also provides that dishNET has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Hughes service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one year terms unless terminated by either party with a written notice at least 180 days before the expiration of the then-current term. On February 20, 2014, HNS and dishNET entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement through March 1, 2024. Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Hughes service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement. Set-Top Box Application Development Agreement. During the fourth quarter of 2012, we and DISH Network entered into a set-top box application development agreement (the “Application Development Agreement”) pursuant to which we provide DISH Network with certain services relating to the development of web-based applications for set-top boxes for the period ending February 1, 2016. The Application Development Agreement renews automatically for successive one-year periods thereafter, unless terminated earlier by us or DISH Network at any time upon at least 90 days’ notice. The fees for services provided under the Application Development Agreement are calculated at our cost of providing the relevant service plus a fixed margin, which will depend on the nature of the services provided. XiP Encryption Agreement . During the third quarter of 2012, we entered into an encryption agreement with DISH Network for our whole-home HD DVR line of set-top boxes (the “XiP Encryption Agreement”) pursuant to which we provide certain security measures on our whole-home HD DVR line of set-top boxes to encrypt the content delivered to the set-top box via a smart card and secure the content between set-top boxes. The XiP Encryption Agreement’s term ends on the same day as the 2012 Receiver Agreement and therefore was automatically extended until December 31, 2016 when we and DISH Network extended the 2012 Receiver Agreement on November 4, 2015. We and DISH Network each have the right to terminate the XiP Encryption Agreement for any reason upon at least 180 days’ notice and 30 days’ notice, respectively. The fees for the services provided under the XiP Encryption Agreement are calculated on a monthly basis based on the number of receivers utilizing such security measures each month. DBSD North America Agreement . On March 9, 2012, DISH Network completed its acquisition of 100% of the equity of reorganized DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and our completion of the Hughes Acquisition, DBSD North America and HNS entered into an agreement pursuant to which our Hughes segment provides, among other things, hosting, operations and maintenance services of DBSD North America’s satellite gateway and associated ground infrastructure. This agreement automatically renewed for a one-year period ending on February 15, 2016, and will renew for one additional one-year period unless terminated by DBSD North America upon at least 30 days’ notice prior to the expiration of any renewal term. Sling TV Holding L.L.C. (formerly DISH Digital Holding L.L.C. (“Sling TV Holding”)). Effective July 1, 2012, we and DISH Network formed Sling TV Holding, which was owned two-thirds by DISH Network and one-third by us. Sling TV Holding was formed to develop and commercialize certain advanced technologies. At that time, we, DISH Network and Sling TV Holding entered into the following agreements with respect to Sling TV Holding: (i) a contribution agreement pursuant to which we and DISH Network contributed certain assets in exchange for our respective ownership interests in Sling TV Holding; (ii) a limited liability company operating agreement (“ Operating Agreement ”), which provides for the governance of Sling TV Holding; and (iii) a commercial agreement (“ Commercial Agreement ”) pursuant to which, among other things, Sling TV Holding had: (a) certain rights and corresponding obligations with respect to its business; and (b) the right, but not the obligation, to receive certain services from us and DISH Network, respectively. Effective August 1, 2014, we and DISH Digital entered into the Exchange Agreement pursuant to which, among other things, DISH Digital distributed certain assets to us and we reduced our interest in DISH Digital to a 10.0% non-voting interest. As a result, DISH Network has a 90.0% equity interest and a 100% voting interest in DISH Digital. In addition, we, DISH Network and DISH Digital amended and restated the Operating Agreement, primarily to reflect the changes implemented by the Exchange Agreement. Finally, we, DISH Network and DISH Digital amended and restated the Commercial Agreement, pursuant to which, among other things, DISH Digital: (1) continues to have certain rights and corresponding obligations with respect to its business; (2) continues to have the right, but not the obligation, to receive certain services from us and DISH Network; and (3) has a license from us to use certain of the assets distributed to us as part of the Exchange Agreement. DISH Digital changed its name to Sling TV Holding L.L.C. “Cost of sales — equipment — DISH Network” Remanufactured Receiver Agreement . In connection with the Spin-off, we entered into a remanufactured receiver agreement with DISH Network pursuant to which we have the right, but not the obligation, to purchase remanufactured receivers and related components from DISH Network at cost plus a fixed margin, which varies depending on the nature of the equipment purchased. In November 2014, we and DISH Network extended this agreement for a one-year period ending on December 31, 2015, and in November 2015, we and DISH Network extended this agreement for a one-year period ending on December 31, 2016. We may terminate the remanufactured receiver agreement for any reason upon at least 60 days’ notice to DISH Network. DISH Network may also terminate this agreement if certain entities acquire DISH Network. “Cost of sales — services and other — DISH Network” Satellite Services Received from DISH Network . Since the Spin-off, we entered into certain satellite services agreements pursuant to which we receive satellite services from DISH Network on certain satellites owned by DISH Network. The fees for the services provided under these satellite services agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are providing services on the applicable satellite and the length of the service term. The term of each satellite service agreement is set forth below: D-1 . In November 2012, HNS entered into a satellite service agreement pursuant to which HNS received satellite services from DISH Network on the D-1 satellite for research and development. This agreement terminated on June 30, 2014. EchoStar XV. In May 2013, we began receiving satellite services from DISH Network on the EchoStar XV satellite and relocated the satellite to the 45 degree west longitude orbital location for testing pursuant to our Brazilian authorization. Effective March 1, 2014, this satellite services agreement converted to a month-to-month service agreement. Both parties have the right to terminate this agreement upon 30 days’ notice. On October 19, 2015, we provided DISH Network a notice to terminate this agreement effective in November 2015, and we are in the process of relocating the satellite during the fourth quarter of 2015 to a new orbital location pursuant to the terms of the agreement. “General and administrative expenses — DISH Network” Professional Services Agreement . In connection with the Spin-off, we entered into vario |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
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 U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in accordance with 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 Form 10-K for the year ended December 31, 2014. |
Principles of Consolidation | Principles of Consolidation We consolidate all majority owned subsidiaries, investments in entities in which we have controlling interest and variable interest entities where we are the primary beneficiary. For entities we control but do not wholly own, we record a noncontrolling interest within stockholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests. For the noncontrolling interest in the HSS Tracking Stock (see Note 2), we attribute a portion of HSS net income or loss to the noncontrolling interest in HSS Tracking Stock with such portion equal to 28.11% (the HSS portion of the 80.0% economic interest) of the Hughes Retail Group attributed net income or loss represented by the HSS Tracking Stock, as determined in accordance with the Policy Statements and other documents governing the Tracking Stock. We use the equity method to account for investments in entities that we do not control but have the ability to significantly influence the operating decisions of the investee. We use the cost method when we do not have the ability to significantly influence the operating decisions of the investee. All significant intercompany balances 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 certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements. Estimates are used in accounting for, among other things, amortization periods for deferred revenue and deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of awards granted under our stock-based compensation plans, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairments, useful lives and methods for depreciation and amortization of long-lived assets, goodwill impairment testing, royalty obligations, and allocations that affect the net income or loss attributable to the Tracking Stock. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. Weakened economic conditions may increase the inherent uncertainty in the estimates and assumptions indicated above. We review our estimates and assumptions periodically and the effects of revisions are reflected in the period they occur or prospectively if the revised estimate affects future periods. |
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 utilize the highest level of inputs available according to the following hierarchy in determining fair value: · Level 1, defined as observable inputs being quoted prices in active markets for identical assets; · Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and · Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels for each of the nine months ended September 30, 2015 or 2014. As of September 30, 2015 and December 31, 2014, the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values of our current marketable investment securities are based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements, as the markets for such debt securities are less active. Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value. Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities. Fair values for our publicly traded long-term debt are based on quoted market prices in less active markets and are categorized as Level 2 measurements. The fair values of our privately held debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates. As of September 30, 2015 and December 31, 2014, the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $80.3 million and $85.8 million, respectively. We use fair value measurements from time-to-time in connection with impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. |
Research and Development | Research and Development In addition to research and development expenses reported in our condensed consolidated statements of operations and comprehensive income (loss), our cost of sales includes research and development costs funded by customers of approximately $15.2 million and $18.0 million for the three months ended September 30, 2015 and 2014, respectively, and $45.7 million and $52.4 million for the nine months ended September 30, 2015 and 2014, respectively. |
Capitalized Software Costs | Capitalized Software Costs Development costs related to software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years. Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets. Externally marketed software is generally installed in the equipment we sell to customers. We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed. As of September 30, 2015 and December 31, 2014, the net carrying amount of externally marketed software was $59.7 million and $48.9 million, respectively. We capitalized costs of $5.3 million and $5.1 million for the three months ended September 30, 2015 and 2014, respectively, and costs of $17.0 million and $17.6 million for the nine months ended September 30, 2015 and 2014, respectively, related to the development of externally marketed software. We recorded amortization expense relating to the development of externally marketed software of $2.2 million and $1.9 million for the three months ended September 30, 2015 and 2014, respectively, and $6.1 million and $3.6 million for the nine months ended September 30, 2015 and 2014, respectively. The weighted average useful life of our externally marketed software was approximately four years as of September 30, 2015. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). It outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In August 2015, the FASB issued Accounting Standards Update No. 2015-14, which deferred by one year the mandatory effective date of ASU 2014-09. As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods. The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted, but not before annual periods beginning after December 15, 2016. We have not determined when we will adopt the new revenue standard or selected the transition method that we will apply upon adoption. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In February 2015, the FASB issued Accounting Standards Update No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). This standard amends the consolidation guidance for variable interest entities (“VIEs”) and general partners’ investments in limited partnerships and similar entities. ASU 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires either a retrospective or a modified retrospective approach as of the beginning of the fiscal year of adoption. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements or related disclosures. We do not expect to adopt this standard prior to the effective date. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, (“ASU 2015-03”). This standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and requires a retrospective approach to adoption. Early adoption is permitted. Based on our preliminary assessment, upon adoption of this standard, we expect to present unamortized deferred costs in other noncurrent assets with a carrying amount of $32.8 million and $39.1 million as of September 30, 2015 and December 31, 2014, respectively, as a reduction of our long-term debt balances. We do not expect to adopt this standard prior to the effective date. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings per Share | |
Tabular disclosure of the effect of income (loss) on the entity's basic and diluted earnings per share | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands, except per share amounts) Net income attributable to EchoStar $ $ $ $ Less: Net loss attributable to EchoStar Tracking Stock ) ) ) ) Net income attributable to EchoStar common stock $ $ $ $ Weighted-average common shares outstanding : Class A and B common stock: Basic Dilutive impact of stock awards outstanding Diluted Earnings per share: Class A and B common stock: Basic $ $ $ $ Diluted $ $ $ $ |
Other Comprehensive Income (L25
Other Comprehensive Income (Loss) and Related Tax Effects (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Comprehensive Income (Loss) and Related Tax Effects | |
Schedule of reclassifications out of accumulated other comprehensive loss | Affected Line Item in our For the Three Months For the Nine Months Condensed Consolidated Ended September 30, Ended September 30, Accumulated Other Comprehensive Loss Components Statement of Operations 2015 2014 2015 2014 (In thousands) Recognition of realized (gains) losses on available-for-sale securities in net income (1) Gains (losses) on marketable investment securities, net $ ) $ $ ) $ ) Recognition of other-than-temporary impairment loss on available-for-sale securities in net income (2) Other-than-temporary impairment loss on available-for sale securities — — Recognition of foreign currency translation losses in net income (3) Other, net — — — Total reclassifications, net of tax and noncontrolling interests $ $ $ $ ) (1) When available-for-sale securities are sold, the related unrealized gains and losses that were previously recognized in other comprehensive income (loss) are reclassified and recognized as realized gains (losses) on available-for-sale securities on the condensed consolidated statement of operations and comprehensive income (loss). (2) In June 2015 and September 2015, we recorded other-than-temporary impairment losses on shares of certain common stock included in our strategic equity securities. See Note 6 for further discussion. (3) As a result of the deconsolidation of several of our European subsidiaries in connection with our investment in SmarDTV SA in May 2015, the related cumulative translation adjustments that were previously recognized in other comprehensive income (loss) were reclassified and recognized as a loss within “Other income (expense)” in our condensed consolidated statement of operations and comprehensive income (loss). See Note 6 for further discussion. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investment Securities | |
Schedule of marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | As of September 30, December 31, 2015 2014 (In thousands) Marketable investment securities—current: Corporate bonds $ $ Strategic equity securities Other Total marketable investment securities—current Restricted marketable investment securities (1) Total Restricted cash and cash equivalents (1) Investments in unconsolidated entities—noncurrent: Cost method Equity method Total investments in unconsolidated entities—noncurrent Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities $ $ (1) Restricted marketable investment securities and restricted cash and cash equivalents are included in “Restricted cash and marketable investment securities” in our condensed consolidated balance sheets. |
Schedule of unrealized gains (losses) on marketable investment securities | Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of September 30, 2015 Debt securities: Corporate bonds $ $ $ ) $ Other (including restricted) ) Equity securities - strategic ) Total marketable investment securities $ $ $ ) $ As of December 31, 2014 Debt securities: Corporate bonds $ $ $ ) $ Other (including restricted) ) Equity securities - strategic ) Total marketable investment securities $ $ $ ) $ |
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | As of September 30, 2015 December 31, 2014 Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Less than 12 months $ $ ) $ $ ) 12 months or more ) — — Total $ $ ) $ $ ) |
Schedule of fair value measurements | As of September 30, 2015 December 31, 2014 Total Level 1 Level 2 Total Level 1 Level 2 (In thousands) Cash equivalents (including restricted) $ $ $ $ $ $ Debt securities: Corporate bonds $ $ — $ $ $ — $ Other (including restricted) Equity securities - strategic — — Total marketable investment securities $ $ $ $ $ $ |
Trade Accounts Receivable (Tabl
Trade Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Trade Accounts Receivable | |
Schedule of trade accounts receivable | As of September 30, December 31, 2015 2014 (In thousands) Trade accounts receivable $ $ Contracts in process, net Total trade accounts receivable Allowance for doubtful accounts ) ) Trade accounts receivable - DISH Network Total trade accounts receivable, net $ $ |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory | |
Schedule of inventory | As of September 30, December 31, 2015 2014 (In thousands) Finished goods $ $ Raw materials Work-in-process Total inventory $ $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment | |
Schedule of property and equipment | Depreciable As of Life September 30, December 31, (In Years) 2015 2014 (In thousands) Land - $ $ Buildings and improvements 1-40 Furniture, fixtures, equipment and other 1-12 Customer rental equipment 2-4 Satellites - owned 2-15 Satellites acquired under capital leases 10-15 Construction in progress - Total property and equipment Accumulated depreciation ) ) Property and equipment, net $ $ |
Schedule of construction in progress | As of September 30, December 31, 2015 2014 (In thousands) Progress amounts for satellite construction, including prepayments under capital leases and launch services costs $ $ Uplinking equipment Other Construction in progress $ $ |
Schedule of depreciation expense | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) Satellites $ $ $ $ Furniture, fixtures, equipment and other Customer rental equipment Buildings and improvements Total depreciation expense $ $ $ $ |
Goodwill, Regulatory Authoriz30
Goodwill, Regulatory Authorizations and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill, Regulatory Authorizations and Other Intangible Assets | |
Schedule of regulatory authorizations with finite and indefinite useful lives | As of Currency As of December 31, Translation September 30, 2014 Additions Adjustment 2015 (In thousands) Finite useful lives: Cost $ $ — $ ) $ Accumulated amortization ) ) ) Net ) ) Indefinite lives — — Total regulatory authorizations, net $ $ ) $ ) $ |
Schedule of other intangible assets subject to amortization | Weighted As of Average September 30, 2015 December 31, 2014 Useful life Accumulated Carrying Accumulated Carrying (in Years) Cost Amortization Amount Cost Amortization Amount (In thousands) Customer relationships 8 $ $ ) $ $ $ ) $ Contract-based 10 ) ) Technology-based 7 ) ) Trademark portfolio 20 ) ) Favorable leases 4 ) — ) Total other intangible assets $ $ ) $ $ $ ) $ |
Debt and Capital Lease Obliga31
Debt and Capital Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt and Capital Lease Obligations | |
Schedule of carrying amounts and fair values of the entity's debt | As of September 30, 2015 December 31, 2014 Carrying Fair Carrying Fair Amount Value Amount Value (In thousands) 6 1/2% Senior Secured Notes due 2019 $ $ $ $ 7 5/8% Senior Notes due 2021 Other Subtotal $ $ Capital lease obligations Total debt and capital lease obligations Less: Current portion ) ) Long-term portion of debt and capital lease obligations $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation | |
Schedule of allocated non-cash, stock-based compensation expense for all employees | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) Research and development expenses $ $ $ $ Selling, general and administrative expenses Total stock-based compensation $ $ $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting | |
Schedule of revenue, EBITDA, and capital expenditures by operating segments | EchoStar All EchoStar Satellite Other and Consolidated Technologies Hughes Services Eliminations Total (In thousands) For the Three Months Ended September 30, 2015 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ For the Three Months Ended September 30, 2014 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ $ Capital expenditures $ $ $ $ $ For the Nine Months Ended September 30, 2015 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ For the Nine Months Ended September 30, 2014 External revenue $ $ $ $ $ Intersegment revenue $ $ $ $ ) $ — Total revenue $ $ $ $ $ EBITDA $ $ $ $ ) $ Capital expenditures $ $ $ $ $ |
Schedule of reconciliation of EBITDA to reported income before income taxes | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) EBITDA $ $ $ $ Interest income and expense, net ) ) ) ) Depreciation and amortization ) ) ) ) Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests ) ) ) ) Income before income taxes $ $ $ $ |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Dish Mexico | |
Related party transactions | |
Schedule of related party transactions | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2015 2014 2015 2014 (In thousands) Digital set-top boxes and related accessories $ $ $ $ Satellite services $ $ $ $ Uplink services $ $ $ $ As of September 30, December 31, 2015 2014 (In thousands) Due from Dish Mexico $ $ |
Organization and Business Act35
Organization and Business Activities (Details) - item | Mar. 02, 2014 | Sep. 30, 2015 |
Organization and Business Activities | ||
Number of business segments | 3 | |
DISH Network | Hughes Retail Preferred Tracking Stock | ||
Principal Business | ||
Percentage of economic interest held | 80.00% | 80.00% |
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock | ||
Principal Business | ||
Percentage of economic interest held | 80.00% | 80.00% |
Hughes Retail Preferred Track36
Hughes Retail Preferred Tracking Stock (Details) $ / shares in Units, $ in Thousands | Mar. 02, 2014USD ($)item$ / sharesshares | Mar. 02, 2014item$ / sharesshares | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) |
Hughes Retail Group Tracking Stock | ||||
Cash received | $ 7,526 | |||
Hughes Retail Preferred Tracking Stock | ||||
Hughes Retail Group Tracking Stock | ||||
Portion of one vote entitled to each share | item | 0.10 | |||
Preferred stock, shares authorized (in shares) | shares | 13,000,000 | 13,000,000 | ||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Dividend or other distributions paid on preferred stock | $ 0 | |||
Hughes Retail Preferred Tracking Stock | Hughes Satellite Systems Corporation ("HSSC") | ||||
Hughes Retail Group Tracking Stock | ||||
Portion of one vote entitled to each share | item | 0.10 | |||
Preferred stock, shares authorized (in shares) | shares | 300 | 300 | ||
Preferred Stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Dividend or other distributions paid on preferred stock | $ 0 | |||
DISH Network | Echostar Corporation | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of capital stock held | 6.50% | |||
DISH Network | Hughes Satellite Systems Corporation ("HSSC") | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of capital stock held | 7.50% | |||
DISH Network | Hughes Retail Preferred Tracking Stock | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 80.00% | 80.00% | ||
DISH Network | Satellite and Tracking Stock Transaction | ||||
Hughes Retail Group Tracking Stock | ||||
Cash received | $ 11,400 | |||
DISH Network | Satellite and Tracking Stock Transaction | EchoStar and HSSC | ||||
Hughes Retail Group Tracking Stock | ||||
Number of owned satellites transferred | item | 5 | 5 | ||
Cash received | $ 11,400 | |||
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock | Echostar Corporation | ||||
Hughes Retail Group Tracking Stock | ||||
Number of shares issued during the period | shares | 6,290,499 | |||
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock | Hughes Satellite Systems Corporation ("HSSC") | ||||
Hughes Retail Group Tracking Stock | ||||
Number of shares issued during the period | shares | 81.128 | |||
Hughes Retail Group | Satellite and Tracking Stock Transaction | Echostar Corporation | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 20.00% | 20.00% | ||
Hughes Retail Group | DISH Network | Echostar Corporation | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 51.89% | |||
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Echostar Corporation | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 51.89% | 51.89% | ||
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Hughes Satellite Systems Corporation ("HSSC") | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 28.11% | 28.11% | ||
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock | ||||
Hughes Retail Group Tracking Stock | ||||
Percentage of economic interest held | 80.00% | 80.00% |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 02, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Principles of Consolidation | ||||||
Amount of transfers between levels within the fair value hierarchy | $ 0 | $ 0 | ||||
Research and Development | ||||||
Cost of sales - services and other | $ 219,686 | $ 212,298 | 645,691 | 626,660 | ||
Capitalized Software Costs | ||||||
Net carrying amount of externally marketed software | 59,700 | 59,700 | $ 48,900 | |||
Capitalized costs related to development of externally marketed software | 5,300 | 5,100 | 17,000 | 17,600 | ||
Amortization expense relating to externally marketed software | 2,200 | 1,900 | 6,100 | 3,600 | ||
New Accounting Pronouncements | ||||||
Unamortized deferred cost | 32,800 | 32,800 | 39,100 | |||
Research and development expense funded by customers | ||||||
Research and Development | ||||||
Cost of sales - services and other | 15,200 | $ 18,000 | $ 45,700 | $ 52,400 | ||
DISH Network | Hughes Retail Preferred Tracking Stock | ||||||
Principles of Consolidation | ||||||
Percentage of economic interest held | 80.00% | 80.00% | ||||
Hughes Retail Group | DISH Network | Satellite and Tracking Stock Transaction | Hughes Satellite Systems Corporation ("HSSC") | ||||||
Principles of Consolidation | ||||||
Percentage of economic interest held | 28.11% | 28.11% | ||||
Hughes Retail Group | DISH Network | Hughes Retail Preferred Tracking Stock | Satellite and Tracking Stock Transaction | ||||||
Principles of Consolidation | ||||||
Percentage of economic interest held | 80.00% | 80.00% | ||||
Maximum | ||||||
Capitalized Software Costs | ||||||
Software useful life | 5 years | |||||
Weighted Average | ||||||
Capitalized Software Costs | ||||||
Useful life | 4 years | |||||
Level 2 | ||||||
Fair value measurements | ||||||
Orbital incentive obligations | $ 80,300 | $ 80,300 | $ 85,800 |
Earnings per Share (Details)
Earnings per Share (Details) | Mar. 02, 2014 | Sep. 30, 2015 |
Satellite and Tracking Stock Transaction | Echostar Corporation | Hughes Retail Group | ||
Earnings per Share | ||
Percentage of economic interest held | 20.00% | 20.00% |
DISH Network | Hughes Retail Preferred Tracking Stock | ||
Earnings per Share | ||
Percentage of economic interest held | 80.00% | 80.00% |
DISH Network | Echostar Corporation | Hughes Retail Group | ||
Earnings per Share | ||
Percentage of economic interest held | 51.89% | |
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Group | Hughes Retail Preferred Tracking Stock | ||
Earnings per Share | ||
Percentage of economic interest held | 80.00% | 80.00% |
DISH Network | Satellite and Tracking Stock Transaction | Echostar Corporation | Hughes Retail Group | ||
Earnings per Share | ||
Percentage of economic interest held | 51.89% | 51.89% |
DISH Network | Satellite and Tracking Stock Transaction | Hughes Satellite Systems Corporation ("HSSC") | Hughes Retail Group | ||
Earnings per Share | ||
Percentage of economic interest held | 28.11% | 28.11% |
Earnings per Share (Details 2)
Earnings per Share (Details 2) - Class A common stock - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Long-term performance based plans | ||||
Dilutive securities excluded from computation of earnings per share | ||||
Dilutive securities excluded from computation of earnings per share (in shares) | 0.7 | 0.7 | ||
Stock awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 3.1 | 0.8 | 2 | 0.8 |
Earnings per Share (Details 3)
Earnings per Share (Details 3) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income attributable to EchoStar | ||||
Net income attributable to EchoStar | $ 28,835 | $ 60,168 | $ 89,983 | $ 103,027 |
Less: Net loss attributable to EchoStar Tracking Stock | (1,267) | (3,887) | (7,421) | (7,474) |
Net income attributable to EchoStar common Stock | $ 30,102 | $ 64,055 | $ 97,404 | $ 110,501 |
Weighted-average common shares outstanding - Class A and B common stock: | ||||
Basic (in shares) | 92,500 | 91,358 | 92,253 | 91,050 |
Dilutive impact of stock awards outstanding (in shares) | 993 | 1,613 | 1,227 | 1,673 |
Diluted (in shares) | 93,493 | 92,971 | 93,480 | 92,723 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.33 | $ 0.70 | $ 1.06 | $ 1.21 |
Diluted (in dollars per share) | $ 0.32 | $ 0.69 | $ 1.04 | $ 1.19 |
Other Comprehensive Income (L41
Other Comprehensive Income (Loss) and Related Tax Effects (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Other comprehensive income, tax (expense) benefit | |||||
Tax effects on foreign currency translation adjustments | $ 0 | ||||
Tax effects on unrealized gains or losses on available-for-sale securities | 0 | ||||
Cumulative foreign currency translation losses | $ 117,600 | 117,600 | $ 63,800 | ||
Reclassifications out of accumulated other comprehensive loss | |||||
Recognition of realized (gains) losses on available-for-sale securities in net income | (9) | $ 27 | (29) | $ (7) | |
Recognition of other-than-temporary loss on available-for-sale securities in net income | 1,243 | 5,892 | |||
Recognition of foreign currency translation losses in net income | 1,889 | ||||
Total reclassifications, net of tax and noncontrolling interests | 1,234 | 27 | 7,752 | (7) | |
Gains (losses) on marketable investment securities, net | |||||
Reclassifications out of accumulated other comprehensive loss | |||||
Recognition of realized (gains) losses on available-for-sale securities in net income | (9) | $ 27 | (29) | $ (7) | |
Other-than-temporary impairment on available-for-sale securities | |||||
Reclassifications out of accumulated other comprehensive loss | |||||
Recognition of other-than-temporary loss on available-for-sale securities in net income | $ 1,243 | 5,892 | |||
Other, net | |||||
Reclassifications out of accumulated other comprehensive loss | |||||
Recognition of foreign currency translation losses in net income | $ 1,889 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
May. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Total marketable investment securities - current | $ 807,662 | $ 807,662 | $ 1,139,103 | |
Restricted marketable investment securities | 11,806 | 11,806 | 11,712 | |
Total | 819,468 | 819,468 | 1,150,815 | |
Investments in unconsolidated entities-noncurrent: | ||||
Cost method | 81,174 | 81,174 | 31,174 | |
Equity method | 133,257 | 133,257 | 128,788 | |
Total investments in unconsolidated entities-noncurrent | 214,431 | 214,431 | 159,962 | |
Total marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | 1,041,351 | 1,041,351 | 1,318,010 | |
Reclassification from accumulated other comprehensive loss for foreign currency translation adjustments | (1,889) | |||
SmarDTV SA | ||||
Investments in unconsolidated entities-noncurrent: | ||||
Ownership interest percentage (as a percent) | 22.50% | |||
Payments to acquire investments | $ 13,900 | |||
Loss resulting from changes in fair value | 700 | |||
Reclassification from accumulated other comprehensive loss for foreign currency translation adjustments | 1,900 | |||
Net assets of deconsolidated entities included net property and equipment | 6,700 | |||
Net assets of deconsolidated entities included cash | 800 | |||
SmarDTV SA | Level 3 | ||||
Investments in unconsolidated entities-noncurrent: | ||||
Fair value of investments | 20,000 | |||
Restricted cash and marketable investment securities | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Restricted cash and cash equivalents | 7,452 | 7,452 | 7,233 | |
Other, net | SmarDTV SA | ||||
Investments in unconsolidated entities-noncurrent: | ||||
Loss recognized from the deconsolidation of contributed entities | $ 2,600 | |||
Corporate Bonds | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Marketable investment securities, at fair value | 731,893 | 731,893 | 1,049,139 | |
Strategic equity securities | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Marketable investment securities, at fair value | 43,501 | 43,501 | 41,705 | |
Fair value of trading securities | 11,300 | 11,300 | ||
Strategic equity securities | Other-than-temporary impairment on available-for-sale securities | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Other-than-temporary impairment of common stock in available-for-sale portfolio | 1,200 | 5,900 | ||
Strategic equity securities | Gains (losses) on marketable investment securities, net | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Unrealized holding loss on common stock in trading securities portfolio | 3,900 | 5,500 | ||
Other | ||||
Marketable investment securities, restricted cash and cash equivalents, and investments in unconsolidated entities | ||||
Marketable investment securities, at fair value | $ 32,268 | $ 32,268 | $ 48,259 |
Investment Securities (Details
Investment Securities (Details 2) - USD ($) $ in Thousands | Aug. 08, 2014 | Aug. 01, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2008 | Dec. 31, 2014 | Jul. 01, 2012 |
Other Investments - Noncurrent | |||||||||
Equity in losses of unconsolidated affiliates, net | $ (2,324) | $ 13,198 | $ (2,580) | $ 10,137 | |||||
Carrying amount of distributed assets | 34,075 | ||||||||
Cash contribution | $ 18,569 | ||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | |||||||||
Amortized cost | 802,611 | 802,611 | $ 1,142,861 | ||||||
Unrealized Gains | 9,417 | 9,417 | 12,883 | ||||||
Unrealized Losses | (3,836) | (3,836) | (4,929) | ||||||
Total | 808,192 | 808,192 | 1,150,815 | ||||||
Sling TV Holding | |||||||||
Other Investments - Noncurrent | |||||||||
Equity interest in joint venture (as a percentage) | 33.00% | ||||||||
Non-voting interest in joint venture (as a percentage) | 10.00% | ||||||||
Carrying amount of distributed assets | $ 34,100 | ||||||||
Fair value of non-voting interest | 1,100 | ||||||||
Amount in excess of carrying amount of existing equity method investment | $ 8,800 | ||||||||
Cash contribution | $ 18,600 | ||||||||
Dish Mexico | |||||||||
Other Investments - Noncurrent | |||||||||
Equity interest in joint venture (as a percentage) | 49.00% | 49.00% | |||||||
Equity interest for which an option to acquire was provided for an unrelated party (as a percentage) | 51.00% | ||||||||
Equity interest accounted based on assumed dilution (as a percentage) | 24.00% | ||||||||
Equity in losses of unconsolidated affiliates, net | $ 10,300 | ||||||||
Corporate Bonds | |||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | |||||||||
Amortized cost | 732,354 | 732,354 | 1,050,803 | ||||||
Unrealized Gains | 36 | 36 | 33 | ||||||
Unrealized Losses | (497) | (497) | (1,697) | ||||||
Estimated Fair Value | 731,893 | 731,893 | 1,049,139 | ||||||
Other | |||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | |||||||||
Amortized cost | 44,069 | 44,069 | 59,977 | ||||||
Unrealized Gains | 8 | 8 | 1 | ||||||
Unrealized Losses | (3) | (3) | (7) | ||||||
Estimated Fair Value | 44,074 | 44,074 | 59,971 | ||||||
Strategic equity securities | |||||||||
Unrealized Gains (Losses) on Marketable Investment Securities | |||||||||
Amortized cost | 26,188 | 26,188 | 32,081 | ||||||
Unrealized Gains | 9,373 | 9,373 | 12,849 | ||||||
Unrealized Losses | (3,336) | (3,336) | (3,225) | ||||||
Estimated Fair Value | $ 32,225 | $ 32,225 | $ 41,705 |
Investment Securities (Detail44
Investment Securities (Details 3) $ in Millions | Sep. 30, 2015USD ($) |
Investment Securities | |
Debt securities with contractual maturities of one year or less | $ 754.2 |
Debt securities with contractual maturities exceeding one year | $ 21.8 |
Investment Securities (Detail45
Investment Securities (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Realized gains (losses) on marketable investment securities | |||||
Proceeds from sales of available-for-sale marketable investment securities | $ 4,000 | $ 36,900 | $ 94,200 | $ 42,300 | |
Fair value of marketable investment securities in a loss position | |||||
Less than 12 months | 485,186 | 485,186 | $ 968,941 | ||
12 months or more | 135,389 | 135,389 | |||
Total | 620,575 | 620,575 | 968,941 | ||
Unrealized losses on marketable investment securities in a loss position | |||||
Less than 12 months | (3,751) | (3,751) | (4,929) | ||
12 months or more | (85) | (85) | |||
Total | $ (3,836) | $ (3,836) | $ (4,929) |
Investment Securities (Detail46
Investment Securities (Details 5) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair value of marketable securities | ||
Total | $ 819,468 | $ 1,150,815 |
Corporate Bonds | ||
Fair value of marketable securities | ||
Debt security | 731,893 | 1,049,139 |
Other | ||
Fair value of marketable securities | ||
Debt security | 44,074 | 59,971 |
Strategic equity securities | ||
Fair value of marketable securities | ||
Equity security | 43,501 | 41,705 |
Level 3 | ||
Fair value of marketable securities | ||
Fair value of investments | 0 | 0 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 701,706 | 437,886 |
Total | 819,468 | 1,150,815 |
Fair value measurements on recurring basis | Corporate Bonds | ||
Fair value of marketable securities | ||
Debt security | 731,893 | 1,049,139 |
Fair value measurements on recurring basis | Other | ||
Fair value of marketable securities | ||
Debt security | 44,074 | 59,971 |
Fair value measurements on recurring basis | Strategic equity securities | ||
Fair value of marketable securities | ||
Equity security | 43,501 | 41,705 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 10,540 | 58,108 |
Total | 48,024 | 47,335 |
Fair value measurements on recurring basis | Level 1 | Other | ||
Fair value of marketable securities | ||
Debt security | 4,523 | 5,630 |
Fair value measurements on recurring basis | Level 1 | Strategic equity securities | ||
Fair value of marketable securities | ||
Equity security | 43,501 | 41,705 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 691,166 | 379,778 |
Total | 771,444 | 1,103,480 |
Fair value measurements on recurring basis | Level 2 | Corporate Bonds | ||
Fair value of marketable securities | ||
Debt security | 731,893 | 1,049,139 |
Fair value measurements on recurring basis | Level 2 | Other | ||
Fair value of marketable securities | ||
Debt security | $ 39,551 | $ 54,341 |
Trade Accounts Receivable (Deta
Trade Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Trade Accounts Receivable | ||
Total trade accounts receivable | $ 191,096 | $ 177,420 |
Allowance for doubtful accounts | (13,543) | (14,188) |
Trade accounts receivable - DISH Network | 247,453 | 251,669 |
Total trade accounts receivable, net | 425,006 | 414,901 |
Progress billings offset against contracts in process | 800 | 2,500 |
Trade accounts receivables | ||
Trade Accounts Receivable | ||
Total trade accounts receivable | 156,645 | 160,886 |
Contracts in process, net | ||
Trade Accounts Receivable | ||
Total trade accounts receivable | $ 34,451 | $ 16,534 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory | ||
Finished goods | $ 56,641 | $ 49,038 |
Raw materials | 7,852 | 6,192 |
Work-in-process | 9,463 | 7,733 |
Total inventory | $ 73,956 | $ 62,963 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Property and equipment | ||
Total property and equipment | $ 6,231,045 | $ 6,094,146 |
Accumulated depreciation | (2,910,823) | (2,899,353) |
Property and equipment, net | 3,320,222 | 3,194,793 |
Land | ||
Property and equipment | ||
Total property and equipment | 41,458 | 42,826 |
Buildings and improvements | ||
Property and equipment | ||
Total property and equipment | $ 369,940 | 375,920 |
Buildings and improvements | Minimum | ||
Property and equipment | ||
Depreciable Life | 1 year | |
Buildings and improvements | Maximum | ||
Property and equipment | ||
Depreciable Life | 40 years | |
Furniture, fixtures, equipment and other | ||
Property and equipment | ||
Total property and equipment | $ 1,231,416 | 1,223,807 |
Furniture, fixtures, equipment and other | Minimum | ||
Property and equipment | ||
Depreciable Life | 1 year | |
Furniture, fixtures, equipment and other | Maximum | ||
Property and equipment | ||
Depreciable Life | 12 years | |
Customer rental equipment | ||
Property and equipment | ||
Total property and equipment | $ 581,394 | 498,180 |
Customer rental equipment | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Customer rental equipment | Maximum | ||
Property and equipment | ||
Depreciable Life | 4 years | |
Satellites | ||
Property and equipment | ||
Total property and equipment | $ 2,381,120 | 2,381,120 |
Satellites | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Satellites | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Satellites acquired under capital leases | ||
Property and equipment | ||
Total property and equipment | $ 665,518 | 935,104 |
Satellites acquired under capital leases | Minimum | ||
Property and equipment | ||
Depreciable Life | 10 years | |
Satellites acquired under capital leases | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Construction in progress | ||
Property and equipment | ||
Total property and equipment | $ 960,199 | $ 637,189 |
Property and Equipment (Detai50
Property and Equipment (Details 2) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property and equipment | ||
Construction in progress | $ 960,199 | $ 637,189 |
Progress amounts for satellite construction including prepayments under capital leases and launch services costs | ||
Property and equipment | ||
Construction in progress | 836,827 | 583,877 |
Uplinking equipment | ||
Property and equipment | ||
Construction in progress | 97,852 | 34,270 |
Construction in progress: Other | ||
Property and equipment | ||
Construction in progress | $ 25,520 | $ 19,042 |
Property and Equipment (Detai51
Property and Equipment (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Depreciation expense | ||||
Total depreciation expense | $ 114,704 | $ 119,531 | $ 340,914 | $ 345,573 |
Satellites | ||||
Depreciation expense | ||||
Total depreciation expense | 51,436 | 55,643 | 149,677 | 158,782 |
Furniture, fixtures, equipment and other | ||||
Depreciation expense | ||||
Total depreciation expense | 29,104 | 30,595 | 89,504 | 89,647 |
Customer rental equipment | ||||
Depreciation expense | ||||
Total depreciation expense | 30,839 | 29,892 | 91,550 | 86,800 |
Buildings and improvements | ||||
Depreciation expense | ||||
Total depreciation expense | $ 3,325 | $ 3,401 | $ 10,183 | $ 10,344 |
Property and Equipment (Detai52
Property and Equipment (Details 4) - item | Mar. 01, 2015 | Sep. 30, 2015 |
Satellites | ||
Property and equipment | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 19 | |
Length of satellites utilized in geosynchronous orbit above the equator (in miles) | 22,300 | |
Number of satellites utilized under capital lease | 2 | |
Number of satellites utilized under operating lease | 3 | |
AMC16 | ||
Property and equipment | ||
Extended term of agreement | 1 year |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Aug. 31, 2014 | |
Goodwill | |||
Goodwill | $ 510,630 | $ 510,630 | |
Cost | |||
Balance at the beginning of the period | 724,542 | ||
Balance at the end of the period | 721,042 | ||
Accumulated amortization | |||
Balance at the beginning of the period | (528,880) | ||
Balance at the end of the period | (573,507) | ||
Net | |||
Balance at the beginning of the period | 195,662 | ||
Balance at the end of the period | 147,535 | ||
Total regulatory authorizations, net | |||
Balance at the beginning of the period | 568,378 | ||
Additions | (3,612) | ||
Currency Translation Adjustment | (20,423) | ||
Balance at the end of the period | 544,343 | ||
Hughes Business | |||
Goodwill | |||
Goodwill | 504,200 | $ 504,200 | |
Sling TV Holding | |||
Goodwill | |||
Goodwill | $ 6,500 | ||
Finite lives | |||
Cost | |||
Balance at the beginning of the period | 103,499 | ||
Currency Translation Adjustment | (22,078) | ||
Balance at the end of the period | 81,421 | ||
Accumulated amortization | |||
Balance at the beginning of the period | (6,778) | ||
Additions | (3,612) | ||
Currency Translation Adjustment | 1,655 | ||
Balance at the end of the period | (8,735) | ||
Net | |||
Balance at the beginning of the period | 96,721 | ||
Additions | (3,612) | ||
Currency Translation Adjustment | (20,423) | ||
Balance at the end of the period | 72,686 | ||
Indefinite Lives | |||
Indefinite lives | |||
Balance at the beginning of the period | 471,657 | ||
Balance at the end of the period | $ 471,657 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Other intangible assets | |||||
Cost | $ 721,042 | $ 721,042 | $ 724,542 | ||
Accumulated amortization | (573,507) | (573,507) | (528,880) | ||
Carrying amount | 147,535 | 147,535 | 195,662 | ||
Amortization expense | 18,200 | $ 22,800 | 57,600 | $ 70,600 | |
Customer relationships | |||||
Other intangible assets | |||||
Cost | 293,932 | 293,932 | 293,932 | ||
Accumulated amortization | (206,506) | (206,506) | (185,393) | ||
Carrying amount | 87,426 | $ 87,426 | 108,539 | ||
Weighted Average Useful life (in years) | 8 years | ||||
Contract-based | |||||
Other intangible assets | |||||
Cost | 255,366 | $ 255,366 | 255,366 | ||
Accumulated amortization | (247,619) | (247,619) | (233,009) | ||
Carrying amount | 7,747 | $ 7,747 | 22,357 | ||
Weighted Average Useful life (in years) | 10 years | ||||
Technology-based | |||||
Other intangible assets | |||||
Cost | 137,337 | $ 137,337 | 140,837 | ||
Accumulated amortization | (108,240) | (108,240) | (100,940) | ||
Carrying amount | 29,097 | $ 29,097 | 39,897 | ||
Weighted Average Useful life (in years) | 7 years | ||||
Trademark portfolio | |||||
Other intangible assets | |||||
Cost | 29,700 | $ 29,700 | 29,700 | ||
Accumulated amortization | (6,435) | (6,435) | (5,321) | ||
Carrying amount | 23,265 | $ 23,265 | 24,379 | ||
Weighted Average Useful life (in years) | 20 years | ||||
Favorable leases | |||||
Other intangible assets | |||||
Cost | 4,707 | $ 4,707 | 4,707 | ||
Accumulated amortization | $ (4,707) | $ (4,707) | (4,217) | ||
Carrying amount | $ 490 | ||||
Weighted Average Useful life (in years) | 4 years |
Debt and Capital Lease Obliga55
Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jun. 12, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt and Capital Lease Obligations | |||
Carrying Amount | $ 1,890,885 | $ 2,001,240 | |
Fair Value | 2,039,277 | 2,172,740 | |
Capital lease obligations | 337,328 | 366,447 | |
Total debt and capital lease obligations | 2,228,213 | 2,367,687 | |
Less: Current portion | (32,228) | (41,912) | |
Long-term portion of debt and capital lease obligations | 2,195,985 | 2,325,775 | |
Loss from partial redemption of debt | (5,044) | ||
Senior Secured Notes | |||
Debt and Capital Lease Obligations | |||
Carrying Amount | 990,000 | 1,100,000 | |
Fair Value | $ 1,069,200 | 1,177,000 | |
Interest rate (as a percent) | 6.50% | ||
Debt redeemed | $ 110,000 | ||
Redemption price (as a percent) | 103.00% | ||
Loss from partial redemption of debt | $ 5,000 | ||
Redemption premium | 3,300 | ||
Write off of deferred financing fees | $ 1,700 | ||
Senior Secured Notes | Hughes Satellite Systems Corporation ("HSSC") | |||
Debt and Capital Lease Obligations | |||
Interest rate (as a percent) | 6.50% | ||
7 5/8% Senior Notes due 2021 | |||
Debt and Capital Lease Obligations | |||
Carrying Amount | $ 900,000 | 900,000 | |
Fair Value | $ 969,192 | 994,500 | |
7 5/8% Senior Notes due 2021 | Hughes Satellite Systems Corporation ("HSSC") | |||
Debt and Capital Lease Obligations | |||
Interest rate (as a percent) | 7.625% | ||
Other | |||
Debt and Capital Lease Obligations | |||
Carrying Amount | $ 885 | 1,240 | |
Fair Value | $ 885 | $ 1,240 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | ||||
Income tax benefit (expense) | $ (28,577) | $ (6,108) | $ (65,841) | $ (28,176) |
Effective income tax rate (as a percent) | 43.10% | 22.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-Based Compensation | ||||
Allocated share-based compensation expense | $ 5,916 | $ 3,470 | $ 16,204 | $ 10,648 |
Research and development expenses | ||||
Stock-Based Compensation | ||||
Allocated share-based compensation expense | 1,270 | 585 | 3,318 | 1,760 |
Selling, general and administrative expenses | ||||
Stock-Based Compensation | ||||
Allocated share-based compensation expense | $ 4,646 | $ 2,885 | $ 12,886 | $ 8,888 |
Stock Options | ||||
Stock option activity | ||||
Stock options granted (in shares) | 27,000 | 100,000 | 909,000 | 315,000 |
Non-Performance Based Stock Awards | ||||
Stock-Based Compensation | ||||
Unrecognized stock-based compensation cost, net of estimated forfeiture | $ 38,400 | $ 38,400 | ||
Restricted stock units | Vesting Based On Performance Measurements | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 0 | 100,000 | ||
Vested (in shares) | 33,333 | 33,333 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2015USD ($) |
Satellite-related obligations | |
Commitments and Contingencies | |
Satellite-related obligations | $ 1,270 |
Commitments and Contingencies59
Commitments and Contingencies (Details 2) $ in Millions | Jan. 26, 2015item | Sep. 30, 2014USD ($) | Aug. 31, 2015claim | Jun. 30, 2015USD ($) | Mar. 31, 2011shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2015USD ($)shares | Dec. 31, 2011shares | Oct. 02, 2013item | Jul. 31, 2009item |
Caltech | ||||||||||
Commitment and Contingencies | ||||||||||
Number of indirect wholly-owned subsidiaries against which lawsuit was filed | item | 2 | |||||||||
CRFD | ||||||||||
Commitment and Contingencies | ||||||||||
Number of third-party petitions challenging the validity | item | 2 | |||||||||
Technology Development and Licensing, LLC | ||||||||||
Commitment and Contingencies | ||||||||||
Number of reexamination petitions pending before the United States Patents and Trademark Office | item | 2 | |||||||||
Number of claims cancelled | claim | 42 | |||||||||
Total number of claims | claim | 53 | |||||||||
Breach of fiduciary duties | ||||||||||
Commitment and Contingencies | ||||||||||
Stock option grants attempted (in shares) | shares | 1,500,000 | |||||||||
Stock option grants (in shares) | shares | 800,000 | |||||||||
Stock options outstanding (in shares) | shares | 800,000 | 800,000 | ||||||||
Personalized Media Communications, Inc. | ||||||||||
Commitment and Contingencies | ||||||||||
One-time payment towards settlement under the agreements | $ 5 | |||||||||
Personalized Media Communications, Inc. | Maximum | ||||||||||
Commitment and Contingencies | ||||||||||
Alleged damages | $ 447 | |||||||||
Personalized Media Communications, Inc. | Minimum | ||||||||||
Commitment and Contingencies | ||||||||||
Alleged damages | $ 167 | |||||||||
Personalized Media Communications, Inc. | Selling, general and administrative expenses | ||||||||||
Commitment and Contingencies | ||||||||||
Loss on litigation settlement | $ 0 | $ 5 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | |
Segment Reporting | ||||
Number of business segments | item | 3 | |||
Segment Reporting | ||||
Total revenue | $ 760,879 | $ 895,840 | $ 2,353,127 | $ 2,601,691 |
EBITDA | 216,612 | 247,988 | 642,611 | 672,774 |
Capital expenditures | 123,242 | 164,711 | 480,152 | 434,428 |
Interest income and expense, net | (26,308) | (39,418) | (88,240) | (125,404) |
Depreciation and amortization | (132,892) | (142,294) | (398,547) | (416,167) |
Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests | (477) | (1,731) | (3,014) | (2,946) |
Income before income taxes | 56,935 | 64,545 | 152,810 | 128,257 |
EchoStar Technologies Business | ||||
Segment Reporting | ||||
Total revenue | 294,792 | 427,076 | 972,591 | 1,255,597 |
Hughes Business | ||||
Segment Reporting | ||||
Total revenue | 339,060 | 338,617 | 998,564 | 982,783 |
EchoStar Satellite Services Business | ||||
Segment Reporting | ||||
Total revenue | 124,126 | 126,944 | 373,726 | 354,558 |
All Other and Eliminations | ||||
Segment Reporting | ||||
Total revenue | 2,901 | 3,203 | 8,246 | 8,753 |
Operating segments | EchoStar Technologies Business | ||||
Segment Reporting | ||||
Total revenue | 294,925 | 427,218 | 973,097 | 1,255,977 |
EBITDA | 25,946 | 38,193 | 80,764 | 119,733 |
Capital expenditures | 8,528 | 10,485 | 32,783 | 37,923 |
Operating segments | Hughes Business | ||||
Segment Reporting | ||||
Total revenue | 339,729 | 339,068 | 1,000,194 | 984,097 |
EBITDA | 101,582 | 94,955 | 296,269 | 267,210 |
Capital expenditures | 72,626 | 56,724 | 207,680 | 154,201 |
Operating segments | EchoStar Satellite Services Business | ||||
Segment Reporting | ||||
Total revenue | 124,300 | 127,604 | 374,287 | 356,964 |
EBITDA | 104,200 | 111,563 | 314,177 | 308,573 |
Capital expenditures | 32,416 | 11,772 | 84,667 | 11,801 |
Intersegment Elimination | EchoStar Technologies Business | ||||
Segment Reporting | ||||
Total revenue | 133 | 142 | 506 | 380 |
Intersegment Elimination | Hughes Business | ||||
Segment Reporting | ||||
Total revenue | 669 | 451 | 1,630 | 1,314 |
Intersegment Elimination | EchoStar Satellite Services Business | ||||
Segment Reporting | ||||
Total revenue | 174 | 660 | 561 | 2,406 |
Intersegment Elimination | All Other and Eliminations | ||||
Segment Reporting | ||||
Total revenue | (976) | (1,253) | (2,697) | (4,100) |
All Other and Eliminations | All Other and Eliminations | ||||
Segment Reporting | ||||
Total revenue | 1,925 | 1,950 | 5,549 | 4,653 |
EBITDA | (15,116) | 3,277 | (48,599) | (22,742) |
Capital expenditures | $ 9,672 | $ 85,730 | $ 155,022 | $ 230,503 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Nov. 04, 2015 | May. 05, 2014 | Mar. 02, 2014item | Mar. 02, 2014USD ($)item | Oct. 01, 2012 | Nov. 30, 2015 | Nov. 30, 2014 | Oct. 31, 2014 | Dec. 31, 2012 | May. 31, 2012 | May. 31, 2010 | Feb. 28, 2010 | Jan. 31, 2010 | Sep. 30, 2015item | Sep. 30, 2014USD ($) | Dec. 31, 2009item | Dec. 31, 2008item | Aug. 01, 2014 | Sep. 30, 2012item | Jul. 01, 2012 | Mar. 09, 2012 |
Related party transactions | |||||||||||||||||||||
Net proceeds from issuance of Tracking Stock (Note 2) | $ | $ 7,526 | ||||||||||||||||||||
Sling TV Holding | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Non-voting interest in joint venture (as a percentage) | 10.00% | ||||||||||||||||||||
Equity interest in joint venture (as a percentage) | 33.00% | ||||||||||||||||||||
EchoStar XVI | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Term of renewal option | 6 years | ||||||||||||||||||||
Hughes Broadband Distribution Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Required minimum notice for termination of agreement | 180 days | ||||||||||||||||||||
DBSD North America Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 30 days | ||||||||||||||||||||
Agreement term | 1 year | ||||||||||||||||||||
Term of renewal option | 1 year | ||||||||||||||||||||
Number of successive one year renewal options | 1 | ||||||||||||||||||||
DISH Network | Hughes Retail Preferred Tracking Stock | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Percentage of economic interest held | 80.00% | 80.00% | |||||||||||||||||||
DISH Network | Sling TV Holding | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Voting interests acquired by related party (as a percent) | 100.00% | ||||||||||||||||||||
Ownership interest acquired by related party (as a percent) | 90.00% | 67.00% | |||||||||||||||||||
DISH Network | 2012 Receiver Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
Agreement term | 1 year | 1 year | |||||||||||||||||||
Additional term of renewal option | 1 year | ||||||||||||||||||||
Minimum notice period required to extend the agreement term | 180 days | ||||||||||||||||||||
DISH Network | Broadcast Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
DISH Network | Broadcast Agreement for Certain Sports Related Programming | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
DISH Network | EchoStar VIII capacity leased to Dish Network | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 30 days | ||||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 30 days | ||||||||||||||||||||
DISH Network | EchoStar XVI | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
Agreement term from commencement of service date | 4 years | ||||||||||||||||||||
Additional term of renewal option | 5 years | ||||||||||||||||||||
Term of renewal option | 6 years | ||||||||||||||||||||
DISH Network | Service agreement to lease certain satellite capacity | Ciel | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
DISH Network | Satellite and Tracking Stock Transaction | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Liabilities Assumed | $ | $ 58,900 | ||||||||||||||||||||
Net proceeds from issuance of Tracking Stock (Note 2) | $ | 11,400 | ||||||||||||||||||||
DISH Network | Satellite and Tracking Stock Transaction | EchoStar and HSSC | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Net proceeds from issuance of Tracking Stock (Note 2) | $ | $ 11,400 | ||||||||||||||||||||
Number of owned satellites transferred | 5 | 5 | |||||||||||||||||||
DISH Network | TT&C Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
DISH Network | Inverness Lease Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice for termination of agreement | 6 months | ||||||||||||||||||||
DISH Network | Santa Fe Lease Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Term of renewal option | 1 year | ||||||||||||||||||||
DISH Network | Gilbert Lease Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Term of renewal option | 1 year | ||||||||||||||||||||
Number of successive one year renewal options | 3 | ||||||||||||||||||||
Required minimum notice for termination of agreement | 30 days | ||||||||||||||||||||
DISH Network | Product Support Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
DISH Network | DISH Online.com Services Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 120 days | ||||||||||||||||||||
Agreement term | 1 year | 1 year | 2 years | ||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
DISH Network | DISH Remote Access Services Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 120 days | ||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||
Additional term of renewal option | 1 year | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
DISH Network | SlingService Services Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 120 days | ||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||
Additional term of renewal option | 1 year | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
DISH Network | Set-Top Box Application Development Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Required minimum notice for termination of agreement | 90 days | ||||||||||||||||||||
DISH Network | XiP Encryption Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 30 days | ||||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 180 days | ||||||||||||||||||||
DISH Network | DBSD North America Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Ownership interest acquired by related party (as a percent) | 100.00% | ||||||||||||||||||||
DISH Network | Remanufactured Receiver Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | 1 year | |||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 60 days | ||||||||||||||||||||
DISH Network | EchoStar XV capacity leased from Dish Network | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice for termination of agreement | 30 days | ||||||||||||||||||||
DISH Network | Professional Services Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Required minimum notice for termination of agreement | 60 days | ||||||||||||||||||||
Required minimum notice for termination of individual service | 30 days | ||||||||||||||||||||
DISH Network | El Paso Lease Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Term of renewal option | 3 years | ||||||||||||||||||||
Number of successive three year renewal options | 4 | ||||||||||||||||||||
DISH Network | DISH Telesat Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term from commencement of service date | 10 years | ||||||||||||||||||||
Number of DBS transponders available to receive services | 32 | ||||||||||||||||||||
DISH Network | QuetzSat-1 Transponder | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Number of DBS transponders currently receiving services | 24 | ||||||||||||||||||||
Number of DBS transponders currently receiving services subleased back from related party | 5 | ||||||||||||||||||||
Telesat Canada | Nimiq 5 Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 15 years | ||||||||||||||||||||
Number of DBS transponders available to receive services | 32 | ||||||||||||||||||||
SES Latin America | QuetzSat-1 Lease Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
Number of DBS transponders expected to receive services | 32 |
Related Party Transactions (D62
Related Party Transactions (Details 2) $ in Thousands | Apr. 29, 2011USD ($)item | Jun. 30, 2015USD ($) | Dec. 31, 2011USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2013USD ($) |
Related party transactions | ||||||
Net amount of the allocated tax attributes receivable | $ 90,793 | $ 90,241 | ||||
Patent Cross-License Agreements | ||||||
Related party transactions | ||||||
Maximum aggregate payments required under cross license agreements | $ 10,000 | |||||
Maximum additional aggregate payments required under cross license agreements if options are exercised | $ 3,000 | |||||
Personalized Media Communications, Inc. | ||||||
Related party transactions | ||||||
One-time payment towards settlement under the agreements | $ 5,000 | |||||
DISH Network | TiVo vs. Dish Network and Echostar Corporation | ||||||
Related party transactions | ||||||
Settlement amount | $ 500,000 | |||||
Initial settlement amount paid | 300,000 | |||||
Aggregate of six annual installment amounts between 2012 and 2017 | $ 200,000 | |||||
Litigation settlement, number of annual installments | item | 6 | |||||
Portion of the $300 million initial settlement agreement payment paid by EchoStar | $ 10,000 | |||||
Estimated percentage of annual future payments payable by EchoStar | 5.00% | |||||
DISH Network | Tax Sharing Agreement | Other noncurrent assets | ||||||
Related party transactions | ||||||
Net amount of the allocated tax attributes receivable | $ 83,200 | |||||
DISH Network | Tax Sharing Agreement | Noncurrent deferred tax liabilities | ||||||
Related party transactions | ||||||
Federal tax benefits reflected as a deferred tax asset for depreciation and amortization | $ 83,200 |
Related Party Transactions (D63
Related Party Transactions (Details 3) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2015 | May. 31, 2014 | Feb. 29, 2008 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2009 | May. 31, 2015 | Dec. 31, 2014 | |
Related party transactions | ||||||||||
Amount payable to related party | $ 23,247 | $ 23,247 | $ 32,474 | |||||||
Amount receivable from related party | 247,453 | 247,453 | 251,669 | |||||||
Hughes Systique Corporation | ||||||||||
Related party transactions | ||||||||||
Repayment of loan | $ 700 | 600 | ||||||||
Remaining balance of loan | 900 | $ 900 | ||||||||
Ownership interest in related party (as a percent) | 44.00% | |||||||||
Ownership percentage by related party | 25.80% | |||||||||
Hughes Systique Corporation | HNS | ||||||||||
Related party transactions | ||||||||||
Amount agreed to be funded under term loan facility | $ 1,500 | |||||||||
Amount funded | $ 500 | $ 1,000 | ||||||||
Interest rate (as a percent) | 8.00% | 6.00% | ||||||||
NagraStar | ||||||||||
Related party transactions | ||||||||||
Ownership interest in related party (as a percent) | 50.00% | |||||||||
Purchases from related party | 4,400 | $ 5,900 | $ 13,000 | $ 15,500 | ||||||
Amount payable to related party | 1,100 | $ 1,100 | 3,200 | |||||||
Dish Mexico | ||||||||||
Related party transactions | ||||||||||
Ownership interest in related party (as a percent) | 49.00% | |||||||||
Digital set-top boxes and related accessories | 19,887 | 14,741 | $ 45,432 | 40,146 | ||||||
Sales of satellite services | 5,837 | 5,837 | 17,510 | 17,510 | ||||||
Uplink services | 1,030 | 1,530 | 3,981 | 4,745 | ||||||
Amount receivable from related party | 28,786 | $ 28,786 | 11,012 | |||||||
Deluxe | ||||||||||
Related party transactions | ||||||||||
Ownership interest in related party (as a percent) | 50.00% | |||||||||
Revenue recognized from equipment and services provided to related party | 700 | $ 800 | $ 2,100 | $ 2,500 | ||||||
Receivables from related party | 100 | 100 | $ 200 | |||||||
SmarDTV SA | ||||||||||
Related party transactions | ||||||||||
Equity interest in joint venture (as a percentage) | 22.50% | |||||||||
Purchases from related party | 1,700 | 2,600 | ||||||||
Amount payable to related party | 2,300 | 2,300 | ||||||||
Note receivable from related party | $ 600 | $ 600 |