Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-33807 | |
Entity Registrant Name | EchoStar Corporation | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 26-1232727 | |
Entity Address, Address Line One | 100 Inverness Terrace East, | |
Entity Address, City or Town | Englewood, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112-5308 | |
City Area Code | (303) | |
Local Phone Number | 706-4000 | |
Title of 12(b) Security | Class A common stock $0.001 par value | |
Security Exchange Name | NASDAQ | |
Trading Symbol | SATS | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001415404 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 36,219,803 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 47,687,039 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,094,531 | $ 704,541 |
Marketable investment securities | 894,744 | 973,915 |
Trade accounts receivable and contract assets, net | 235,421 | 236,479 |
Other current assets, net | 248,241 | 210,446 |
Total current assets | 2,472,937 | 2,125,381 |
Non-current assets: | ||
Property and equipment, net | 2,144,707 | 2,237,617 |
Operating lease right-of-use assets | 143,726 | 151,518 |
Goodwill | 532,710 | 532,491 |
Regulatory authorizations, net | 459,463 | 462,531 |
Other intangible assets, net | 13,975 | 15,698 |
Other investments, net | 136,455 | 356,705 |
Other non-current assets, net | 326,485 | 317,062 |
Total non-current assets | 3,757,521 | 4,073,622 |
Total assets | 6,230,458 | 6,199,003 |
Current liabilities: | ||
Trade accounts payable | 82,291 | 101,239 |
Contract liabilities | 122,288 | 121,739 |
Accrued expenses and other current liabilities | 192,100 | 199,853 |
Total current liabilities | 396,679 | 422,831 |
Non-current liabilities: | ||
Long-term debt, net | 1,497,396 | 1,496,777 |
Deferred tax liabilities, net | 433,370 | 424,621 |
Operating lease liabilities | 127,829 | 135,932 |
Other non-current liabilities | 109,396 | 119,787 |
Total non-current liabilities | 2,167,991 | 2,177,117 |
Total liabilities | 2,564,670 | 2,599,948 |
Commitments and Contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both September 30, 2023 and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 3,383,671 | 3,367,058 |
Accumulated other comprehensive income (loss) | (161,515) | (172,239) |
Accumulated earnings (losses) | 876,959 | 833,517 |
Treasury shares, at cost, 23,313,311 shares at both September 30, 2023 and December 31, 2022 | (525,824) | (525,824) |
Total EchoStar Corporation stockholders' equity | 3,573,398 | 3,502,619 |
Non-controlling interests | 92,390 | 96,436 |
Total stockholders' equity | 3,665,788 | 3,599,055 |
Total liabilities and stockholders' equity | 6,230,458 | 6,199,003 |
Class A common stock | ||
Stockholders' equity: | ||
Common stock | 59 | 59 |
Class B common stock | ||
Stockholders' equity: | ||
Common stock | 48 | 48 |
Class C common stock | ||
Stockholders' equity: | ||
Common stock | 0 | 0 |
Class D common stock | ||
Stockholders' equity: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
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 |
Treasury stock (in shares) | 23,313,311 | 23,313,311 |
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 |
Class A 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) | 59,532,668 | 58,604,927 |
Common stock, shares outstanding (in shares) | 36,219,357 | 35,291,616 |
Class B 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, 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, 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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Total revenue | $ 413,074 | $ 497,387 | $ 1,305,780 | $ 1,498,237 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 104,988 | 111,421 | 322,469 | 342,682 |
Research and development expenses | 6,463 | 9,181 | 21,560 | 25,562 |
Depreciation and amortization | 103,028 | 110,233 | 311,474 | 347,224 |
Impairment of long-lived assets | 0 | 0 | 3,142 | 711 |
Total costs and expenses | 390,994 | 450,353 | 1,211,080 | 1,360,229 |
Operating income (loss) | 22,080 | 47,034 | 94,700 | 138,008 |
Other income (expense): | ||||
Interest income, net | 26,209 | 14,183 | 78,331 | 29,677 |
Interest expense, net of amounts capitalized | (12,650) | (13,845) | (39,176) | (43,125) |
Gains (losses) on investments, net | (10,743) | (10,077) | (23,337) | 48,071 |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,978) | (1,426) | (3,075) | (4,441) |
Other-than-temporary impairment losses on equity method investments | 0 | 0 | (33,400) | 0 |
Foreign currency transaction gains (losses), net | (2,089) | (2,805) | 4,482 | (53) |
Other, net | (11,750) | (319) | (2,308) | 2,198 |
Total other income (expense), net | (13,001) | (14,289) | (18,483) | 32,327 |
Income (loss) before income taxes | 9,079 | 32,745 | 76,217 | 170,335 |
Income tax benefit (provision), net | (8,547) | (13,195) | (38,780) | (51,367) |
Net income (loss) | 532 | 19,550 | 37,437 | 118,968 |
Less: Net loss (income) attributable to non-controlling interests | 2,712 | 2,853 | 6,005 | 8,736 |
Net income (loss) attributable to EchoStar Corporation common stock | $ 3,244 | $ 22,403 | $ 43,442 | $ 127,704 |
Earnings (losses) per share - Class A and B common stock: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.27 | $ 0.52 | $ 1.51 |
Diluted (in dollars per share) | $ 0.04 | $ 0.27 | $ 0.52 | $ 1.51 |
Services and other revenue | ||||
Total revenue | $ 359,349 | $ 401,382 | $ 1,108,386 | $ 1,234,890 |
Costs and expenses: | ||||
Cost of sales | 133,335 | 145,189 | 401,431 | 430,553 |
Equipment revenue | ||||
Total revenue | 53,725 | 96,005 | 197,394 | 263,347 |
Costs and expenses: | ||||
Cost of sales | $ 43,180 | $ 74,329 | $ 151,004 | $ 213,497 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 532 | $ 19,550 | $ 37,437 | $ 118,968 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (9,020) | 18,853 | 11,292 | 29,684 |
Unrealized gains (losses) on available-for-sale securities | (547) | 358 | 1,141 | (275) |
Other | 0 | 2,660 | 0 | 2,660 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 23 | 0 | 250 | 3 |
Total other comprehensive income (loss), net of tax | (9,544) | 21,871 | 12,683 | 32,072 |
Comprehensive income (loss) | (9,012) | 41,421 | 50,120 | 151,040 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 4,615 | 5,108 | 4,046 | 8,427 |
Comprehensive income (loss) attributable to EchoStar Corporation | $ (4,397) | $ 46,529 | $ 54,166 | $ 159,467 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Losses) | Treasury Shares, at cost | Non-controlling Interests |
Beginning balance at Dec. 31, 2021 | $ 3,414,080 | $ 106 | $ 3,345,878 | $ (212,102) | $ 656,466 | $ (436,521) | $ 60,253 |
Issuance of Class A common stock: | |||||||
Employee benefits | 7,042 | 1 | 7,041 | ||||
Employee Stock Purchase Plan | 7,173 | 7,173 | |||||
Stock-based compensation | 8,401 | 8,401 | |||||
Issuance of equity and contribution of assets pursuant to the India JV formation | 30,303 | (14,090) | 44,393 | ||||
Other comprehensive income (loss) | 32,072 | 31,763 | 309 | ||||
Net income (loss) | 118,968 | 127,704 | (8,736) | ||||
Treasury share repurchase | (89,303) | (89,303) | |||||
Consideration received from DISH Network for R&D tax credits utilized | 6,316 | 6,316 | |||||
Other | 500 | 500 | |||||
Ending balance at Sep. 30, 2022 | 3,535,552 | 107 | 3,361,219 | (180,339) | 784,170 | (525,824) | 96,219 |
Beginning balance at Jun. 30, 2022 | 3,499,556 | 107 | 3,355,238 | (204,465) | 761,767 | (514,418) | 101,327 |
Issuance of Class A common stock: | |||||||
Employee Stock Purchase Plan | 2,126 | 2,126 | |||||
Stock-based compensation | 3,355 | 3,355 | |||||
Other comprehensive income (loss) | 21,871 | 24,126 | (2,255) | ||||
Net income (loss) | 19,550 | 22,403 | (2,853) | ||||
Treasury share repurchase | (11,406) | (11,406) | |||||
Other | 500 | 500 | |||||
Ending balance at Sep. 30, 2022 | 3,535,552 | 107 | 3,361,219 | (180,339) | 784,170 | (525,824) | 96,219 |
Beginning balance at Dec. 31, 2022 | 3,599,055 | 107 | 3,367,058 | (172,239) | 833,517 | (525,824) | 96,436 |
Issuance of Class A common stock: | |||||||
Employee benefits | 5,421 | 5,421 | |||||
Employee Stock Purchase Plan | 2,953 | 2,953 | |||||
Stock-based compensation | 8,239 | 8,239 | |||||
Other comprehensive income (loss) | 12,683 | 10,724 | 1,959 | ||||
Net income (loss) | 37,437 | 43,442 | (6,005) | ||||
Ending balance at Sep. 30, 2023 | 3,665,788 | 107 | 3,383,671 | (161,515) | 876,959 | (525,824) | 92,390 |
Beginning balance at Jun. 30, 2023 | 3,671,126 | 107 | 3,379,997 | (153,874) | 873,715 | (525,824) | 97,005 |
Issuance of Class A common stock: | |||||||
Employee Stock Purchase Plan | 810 | 810 | |||||
Stock-based compensation | 2,864 | 2,864 | |||||
Other comprehensive income (loss) | (9,544) | (7,641) | (1,903) | ||||
Net income (loss) | 532 | 3,244 | (2,712) | ||||
Ending balance at Sep. 30, 2023 | $ 3,665,788 | $ 107 | $ 3,383,671 | $ (161,515) | $ 876,959 | $ (525,824) | $ 92,390 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 37,437 | $ 118,968 |
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities: | ||
Depreciation and amortization | 311,474 | 347,224 |
Impairment of long-lived assets | 3,142 | 711 |
Losses (gains) on investments, net | 23,337 | (48,071) |
Equity in losses of unconsolidated affiliates, net | 3,075 | 4,441 |
Foreign currency transaction losses (gains), net | (4,482) | 53 |
Deferred tax provision, net | 8,088 | 28,901 |
Stock-based compensation | 8,239 | 8,401 |
Amortization of debt issuance costs | 619 | 583 |
Gain on repayment of other debt securities | (7,605) | 0 |
Other-than-temporary impairment losses on equity method investments | 33,400 | 0 |
(Accretion of discounts) and amortization of premiums on debt investments | (21,340) | 159 |
Other, net | (6,634) | 35,450 |
Changes in assets and liabilities, net: | ||
Trade accounts receivable and contract assets, net | 2,940 | (63,563) |
Other current assets, net | (46,216) | (26,402) |
Trade accounts payable | (22,817) | 657 |
Contract liabilities | 549 | (13,759) |
Accrued expenses and other current liabilities | (489) | (27,004) |
Non-current assets and non-current liabilities, net | (21,694) | (23,432) |
Net cash provided by (used for) operating activities | 301,023 | 343,317 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (1,015,650) | (540,447) |
Sales and maturities of marketable investment securities | 1,150,683 | 917,077 |
Expenditures for property and equipment | (206,862) | (249,374) |
Refunds and other receipts related to capital expenditures | 34,611 | 0 |
Expenditures for externally marketed software | (22,373) | (16,926) |
Proceeds from repayment of other debt investment | 148,448 | 0 |
India JV formation | 0 | (7,892) |
Dividend received from unconsolidated affiliate | 0 | 2,000 |
Sale of unconsolidated affiliate | 0 | 7,500 |
Sales of other investments | 0 | 3,070 |
Net cash provided by (used for) investing activities | 88,857 | 115,008 |
Cash flows from financing activities: | ||
Payment of finance lease obligations | 0 | (114) |
Payment of in-orbit incentive obligations | (3,144) | (2,422) |
Proceeds from Class A common stock issued under the Employee Stock Purchase Plan | 2,953 | 7,173 |
Payment of equity registration fees | (1,327) | 0 |
Treasury share repurchase | 0 | (89,303) |
Net cash provided by (used for) financing activities | (1,518) | (84,666) |
Effect of exchange rates on cash and cash equivalents | 1,622 | (3,123) |
Net increase (decrease) in cash and cash equivalents | 389,984 | 370,536 |
Cash and cash equivalents, including restricted amounts, beginning of period | 705,882 | 536,874 |
Cash and cash equivalents, including restricted amounts, end of period | $ 1,095,866 | $ 907,410 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITIES | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITIES | ORGANIZATION AND BUSINESS ACTIVITIES Principal Business EchoStar Corporation (which, together with its subsidiaries, is referred to as “EchoStar,” the “Company,” “we,” “us” and “our”) is a holding company that was organized in October 2007 as a corporation under the laws of the State of Nevada. Our Class A common stock is publicly traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “SATS.” We are an industry leader in both networking technologies and services, innovating to deliver the global solutions that power a connected future for people, enterprises and things everywhere. We provide internet services to consumer customers, which include home and small to medium-sized businesses, and satellite and multi-transport technologies and managed network services to enterprise customers, telecommunications providers, aeronautical service providers and government entities, including the U.S. Department of Defense. We operate in the following two business segments: • Hughes segment — which provides broadband satellite technologies and broadband internet products and services to consumer customers. We provide broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. We also design, provide and install gateway and terminal equipment to customers for other satellite systems. In addition, we design, develop, construct and provide telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers. • EchoStar Satellite Services segment (“ESS segment”) — which provides satellite services on a full-time and/or occasional-use basis to U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. We operate our ESS business using primarily the EchoStar IX satellite and the EchoStar 105/SES-11 satellite and related infrastructure. Revenue in our ESS segment depends largely on our ability to make continuous use of our available satellite capacity on behalf of existing customers and our ability to enter into commercial relationships with new customers. During the first quarter of 2023, we transitioned the EchoStar IX satellite into inclined operations to extend its usable life for our customers. With this inclined mode of operation, we are expecting to extend the life of the spacecraft into 2024 without diminishing its capacity. Our operations include various corporate functions (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities. Operating expenses include costs incurred in certain satellite development programs and other business development activities, and other income or expenses includes gains or losses from certain of our investments, that have not been assigned to our business segments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other. We also divide our operations by primary geographic market as follows: (i) North America (the U.S. and its territories, Mexico, and Canada); (ii) South and Central America and (iii) Other (Asia, Africa, Australia, Europe, India, and the Middle East). Refer to Note 14. Segment Reporting for further details. On August 8, 2023, the Company entered into an Agreement and Plan of Merger (“the Original Merger Agreement”) with DISH Network Corporation, a Nevada corporation (“DISH”), and Eagle Sub Corp (“Eagle Sub”), a Nevada corporation and a wholly owned subsidiary of DISH. The Original Merger Agreement provided, among other things, that subject to the satisfaction or waiver of the conditions set forth in the agreement, Eagle Sub would merge with and into EchoStar, with EchoStar surviving as a wholly owned subsidiary of DISH. On October 2, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Amended Merger Agreement”) with DISH and EAV Corp., a Nevada corporation and a wholly owned subsidiary of EchoStar (“Merger Sub”). The Amended Merger Agreement revises the structure of the merger of DISH and EchoStar contemplated by the Original Merger Agreement. The Amended Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth in the Amended Merger Agreement, Merger Sub will merge with and into DISH (the “Merger”), with DISH surviving the Merger as a wholly owned subsidiary of EchoStar. The expected proportional ownership of existing EchoStar stockholders and DISH stockholders in the combined company upon the consummation of the Merger remains the same as the expected proportional ownership contemplated by the Original Merger Agreement. Pursuant to the Amended Merger Agreement, at the effective time of the Merger, (the “Effective Time”), each share of DISH Class A Common Stock, par value $0.01 per share (“DISH Class A Common Stock”) and DISH Class C Common Stock, par value $0.01 per share (“DISH Class C Common Stock”), outstanding immediately prior to the Effective Time, will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of EchoStar Class A Common Stock, par value $0.001 per share (“EchoStar Class A Common Stock”), equal to 0.350877 (the “Exchange Ratio”). On the terms and subject to the conditions set forth in the Amended Merger Agreement, at the Effective Time, each share of DISH Class B Common Stock, par value $0.01 per share (“DISH Class B Common Stock”), outstanding immediately prior to the Effective Time will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of EchoStar Class B Common Stock, par value $0.001 per share (the “EchoStar Class B Common Stock” and, together with the EchoStar Class A Common Stock, the “EchoStar Common Stock”), equal to the Exchange Ratio. Any shares of DISH Class A Common Stock, DISH Class B Common Stock and DISH Class C Common Stock (collectively, “DISH Common Stock”) that are held in DISH’s treasury or held directly by EchoStar or Merger Sub immediately prior to the Effective Time will be cancelled and cease to exist and no consideration shall be paid or payable in respect thereof. Refer to Note 16. Subsequent Event s for further details. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These unaudited Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. Refer to Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below. Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs and relative standalone selling prices of performance obligations; (ii) allowances for doubtful accounts, and estimated credit losses on investments; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) estimates of future cash flows used to evaluate and recognize impairments. 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 financial statements. Additionally, changing 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 thereto are reflected in the period they occur or prospectively if the revised estimate affects future periods. Principles of Consolidation We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within stockholders’ equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. Recently Adopted Accounting Pronouncements Business Combinations On January 1, 2023, we adopted Accounting Standards Update (“ASU”) No. 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is applied to business combinations occurring on or after the adoption date. Government Assistance On January 1, 2022, we adopted ASU No. 2021-10 - Government Assistance (Topic 832) : Disclosures by Business Entities about Government Assistance, which requires business entities (except for not-for-profit entities and employee benefit plans) to disclose information about certain government assistance they receive. The Company is currently participa ting in three government programs: New York-Connect America Fund, New York Broadband, and Affordable Connectivity Plan. The purpose of these programs is to provide internet and connectivity services to qualifying households in the United States. The Company is entitled to reimbursement from the government for services provided. We record gross monies received from government entities in Services and other revenue, and associated expenses such as salaries and supplies are recorded in Cost of sales - services and other, Research and development or Selling, general and administrative expenses, depending on the nature of e xpenditure. We accrue for reimbursement requests submitted to government entities in Trade accounts receivable and contract assets, net. During the three and nine months ended September 30, 2023, the Company recognized $4.6 million and $12.7 million in Services and other revenue, respectively. As of September 30, 2023, we have trade accounts receivable of $2.8 million rel ated to our government programs. Recently Issued Accounting Pronouncements Not Yet Adopted Business Combinations - Joint Venture Formations In August 2023, the FASB issued ASU No. 2023-05 - Business Combinations—Joint Venture Formations to reduce diversity in practice and provide decision-useful information to a joint venture’s investors. The ASU requires that a joint venture apply a new basis of accounting upon formation. Specifically, the newly formed joint venture will be required to recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in this ASU do not amend the definition of a joint venture, the accounting by an equity method investor for its investment in a joint venture, or the accounting by a joint venture for contributions received after its formation. The guidance in this ASU is effective prospectively for all joint ventures with a formation date on or after January 1, 2025. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. This ASU is applied prospectively to all newly formed joint ventures on or after the adoption date. Leases - Common Control Arrangements In March 2023, the FASB issued ASU No. 2023-01 - Leases (Topic 842): Common Control Arrangements . Among other things, this ASU requires all lessees to amortize leasehold improvements associated with common control leases over their useful life to the common control group and account for them as a transfer of assets between entities under common control at the end of the lease. Additional disclosures are required when the useful life of leasehold improvements to the common control group exceeds the related lease term. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. We plan to adopt this new guidance prospectively to all new leasehold improvements recognized on or after the adoption date and we do not expect it to have a material impact on our Consolidated Financial Statements. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848) , and all subsequent amendments to the initial guidance, codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2024. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the new guidance and we are in the process of implementing this ASU, and all subsequent amendments, and do not expect them to have a material impact on our Consolidated Financial Statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Contract Balances The following table presents the components of our contract balances: As of September 30, 2023 December 31, 2022 Trade accounts receivable and contract assets, net: Sales and services $ 165,456 $ 170,466 Leasing and other 9,856 7,936 Total trade accounts receivable 175,312 178,402 Contract assets 76,831 73,435 Allowance for doubtful accounts (16,722) (15,358) Total trade accounts receivable and contract assets, net $ 235,421 $ 236,479 Contract liabilities: Current $ 122,288 $ 121,739 Non-current 6,999 8,326 Total contract liabilities $ 129,287 $ 130,065 The following table presents the revenue recognized in the Consolidated Statements of Operations that was previously included within contract liabilities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Revenue $ 7,608 $ 6,175 $ 80,157 $ 115,974 Contract Acquisition Costs The following table presents the activity in our contract acquisition costs, net: For the nine months ended September 30, 2023 2022 Balance at beginning of period $ 64,447 $ 82,986 Additions 34,708 45,172 Amortization expense (46,722) (57,822) Foreign currency translation 681 156 Balance at end of period $ 53,114 $ 70,492 We recognized amortization expenses related to contract acquisition costs of $14.6 million and $18.2 million for the three months ended September 30, 2023 and 2022, respectively. Performance Obligations As of September 30, 2023, the remaining performance obligations for our customer contracts was approximately $1.2 billion. Performance obligations expected to be satisfied within one year and greater than one year are 29% and 71%, respectively. This amount and percentages exclude agreements with consumer customers in our Hughes segment, our leasing arrangements and agreements with certain customers under which collectability of all amounts due through the term of contracts is uncertain. Disaggregation of Revenue Geographic Information Revenue is attributed to geographic markets based upon the billing location of the customer. The following tables present our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 North America $ 324,722 $ 6,446 $ 2,401 $ 333,569 South and Central America 39,843 — — 39,843 Other 39,644 — 18 39,662 Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 For the three months ended September 30, 2022 North America $ 389,181 $ 4,981 $ 2,841 $ 397,003 South and Central America 40,290 — — 40,290 Other 60,094 — — 60,094 Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 For the nine months ended September 30, 2023 North America $ 1,038,234 $ 18,563 $ 7,460 $ 1,064,257 South and Central America 119,528 — — 119,528 Other 121,977 — 18 121,995 Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 For the nine months ended September 30, 2022 North America $ 1,187,301 $ 14,305 $ 8,413 $ 1,210,019 South and Central America 125,256 — — 125,256 Other 162,955 — 7 162,962 Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 Nature of Products and Services The following tables present our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 Services and other revenue: Services $ 341,575 $ 4,308 $ 1,344 $ 347,227 Lease revenue 8,925 2,138 1,059 12,122 Total services and other revenue 350,500 6,446 2,403 359,349 Equipment revenue: Equipment 24,701 — 16 24,717 Design, development and construction services 26,235 — — 26,235 Lease revenue 2,773 — — 2,773 Total equipment revenue 53,709 — 16 53,725 Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 For the three months ended September 30, 2022 Services and other revenue: Services $ 383,739 $ 3,247 $ 1,606 $ 388,592 Lease revenue 9,822 1,734 1,234 12,790 Total services and other revenue 393,561 4,981 2,840 401,382 Equipment revenue: Equipment 33,585 — 1 33,586 Design, development and construction services 60,605 — — 60,605 Lease revenue 1,814 — — 1,814 Total equipment revenue 96,004 — 1 96,005 Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 Hughes ESS Corporate and Other Consolidated For the nine months ended September 30, 2023 Services and other revenue: Services $ 1,054,348 $ 12,205 $ 4,196 $ 1,070,749 Lease revenue 28,013 6,358 3,266 37,637 Total services and other revenue 1,082,361 18,563 7,462 1,108,386 Equipment revenue: Equipment 72,348 — 16 72,364 Design, development and construction services 114,615 — — 114,615 Lease revenue 10,415 — — 10,415 Total equipment revenue 197,378 — 16 197,394 Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 For the nine months ended September 30, 2022 Services and other revenue: Services $ 1,181,461 $ 9,343 $ 4,474 $ 1,195,278 Lease revenue 30,711 4,962 3,939 39,612 Total services and other revenue 1,212,172 14,305 8,413 1,234,890 Equipment revenue: Equipment 86,878 — 7 86,885 Design, development and construction services 172,821 — — 172,821 Lease revenue 3,641 — — 3,641 Total equipment revenue 263,340 — 7 263,347 Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 Lease Revenue The following table presents our lease revenue by type of lease: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Sales-type lease revenue: Revenue at lease commencement $ 2,272 $ 1,514 $ 8,913 $ 2,735 Interest income 501 300 1,502 906 Total sales-type lease revenue 2,773 1,814 10,415 3,641 Operating lease revenue 12,122 12,790 37,637 39,612 Total lease revenue $ 14,895 $ 14,604 $ 48,052 $ 43,253 |
MARKETABLE INVESTMENT SECURITIE
MARKETABLE INVESTMENT SECURITIES | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE INVESTMENT SECURITIES | MARKETABLE INVESTMENT SECURITIES The following table presents our Marketable investment securities : As of September 30, 2023 December 31, 2022 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 175,444 $ 160,559 Commercial paper 518,641 687,927 Other debt securities 66,072 17,695 Total available-for-sale debt securities 760,157 866,181 Equity securities 142,590 118,790 Total marketable investment securities, including restricted amounts 902,747 984,971 Less: Restricted marketable investment securities (8,003) (11,056) Total marketable investment securities $ 894,744 $ 973,915 Debt Securities Available-for-Sale The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of September 30, 2023 Corporate bonds $ 173,714 $ 1,830 $ (100) $ 175,444 Commercial paper 518,641 — — 518,641 Other debt securities 66,083 — (11) 66,072 Total available-for-sale debt securities $ 758,438 $ 1,830 $ (111) $ 760,157 As of December 31, 2022 Corporate bonds $ 160,494 $ 125 $ (60) $ 160,559 Commercial paper 687,956 — (29) 687,927 Other debt securities 17,785 — (90) 17,695 Total available-for-sale debt securities $ 866,235 $ 125 $ (179) $ 866,181 The following table presents the activity on our available-for-sale debt securities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 71,586 $ — $ 209,063 $ 37,904 As of September 30, 2023, we have $752.4 million of available-for-sale debt securities with contractual maturities of one year or less and $7.8 million with contractual maturities greater than one year. Equity Securities The following table presents the activity of our equity securities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 1,430 $ 34,121 $ 3,457 $ 34,374 Gains (losses) on investments, net $ 13,637 $ 18,273 $ 816 $ 26,536 Fair Value Measurements The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: Level 1 Level 2 Total As of September 30, 2023 Cash equivalents (including restricted) $ 536 $ 984,843 $ 985,379 Available-for-sale debt securities: Corporate bonds $ — $ 175,444 $ 175,444 Commercial paper — 518,641 518,641 Other debt securities 61,212 4,860 66,072 Total available-for-sale debt securities 61,212 698,945 760,157 Equity securities 133,968 8,622 142,590 Total marketable investment securities, including restricted amounts 195,180 707,567 902,747 Less: Restricted marketable investment securities (8,003) — (8,003) Total marketable investment securities $ 187,177 $ 707,567 $ 894,744 As of December 31, 2022 Cash equivalents (including restricted) $ 657 $ 595,814 $ 596,471 Available-for-sale debt securities: Corporate bonds $ — $ 160,559 $ 160,559 Commercial paper — 687,927 687,927 Other debt securities 15,968 1,727 17,695 Total available-for-sale debt securities 15,968 850,213 866,181 Equity securities 109,002 9,788 118,790 Total marketable investment securities, including restricted amounts 124,970 860,001 984,971 Less: Restricted marketable investment securities (11,056) — (11,056) Total marketable investment securities $ 113,914 $ 860,001 $ 973,915 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table presents the components of Property and equipment, net : As of September 30, 2023 December 31, 2022 Property and equipment, net: Satellites, net $ 1,506,838 $ 1,563,033 Other property and equipment, net 637,869 674,584 Total property and equipment, net $ 2,144,707 $ 2,237,617 Satellites As of September 30, 2023, our satellite fleet consisted of ten satellites, seven of which are owned and three of which are leased. They are all in geosynchronous (“GEO”) orbit, approximately 22,300 miles above the equator. The following table presents our GEO satellite fleet in service as of September 30, 2023: GEO Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (“AY3”) (2) Hughes January 2018 20 W 5 EchoStar IX (3) (4) ESS August 2003 121 W 12 EUTELSAT 10A (“W2A”) (5) Corporate and Other April 2009 10 E - EchoStar XXI Corporate and Other June 2017 10.25 E 15 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries in 2011 (the “Hughes Acquisition”). The satellite is expected to de-orbit in the fourth quarter of 2023. (2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite with a remaining useful life of 7 years as of that time. In the second quarter of 2023 we reduced the estimated useful life of the satellite as a result of certain technical anomalies. In order to safeguard the future operability of the satellite, the Company has, in conjunction with recommendations from the satellite manufacturer, implemented immediate and long-term remedial actions. A revised estimate of the satellite’s remaining lifetime has been calculated using operational data of the first two quarters. The Company has updated the remaining useful life of AY3 and related ground assets prospectively from April 1, 2023, to reflect the change in estimate. This has increased the depreciation expense for the current nine-month period by $7.4 million. The increase is expected to be $11.1 million for the full year 2023 and $12.8 million for the year 2024, respectively. Although the anomalies are expected to shorten the remaining useful life of the satellite, they have not affected its current operation. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) The Company placed the satellite in an inclined-orbit in the first quarter of 2023. Inclined-orbit will extend its life to enable further revenue generating opportunities. (5) We acquired the S-band payload on this satellite in December 2013. Prior to acquisition, the S-band payload experienced an anomaly at the time of launch and, as a result, was not fully operational. The satellite was de-orbited in the fourth quarter of 2023. The following table presents the components of our satellites, net: Depreciable Life (In Years) As of September 30, 2023 December 31, 2022 Satellites, net: Satellites - owned 5 to 15 $ 1,805,408 $ 1,808,924 Satellites - acquired under finance leases 15 364,820 360,642 Construction in progress — 646,284 608,773 Total satellites 2,816,512 2,778,339 Accumulated depreciation: Satellites - owned (1,167,853) (1,093,412) Satellites - acquired under finance leases (141,821) (121,894) Total accumulated depreciation (1,309,674) (1,215,306) Total satellites, net $ 1,506,838 $ 1,563,033 The following table presents the depreciation expense associated with our satellites, net: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Depreciation expense: Satellites - owned $ 25,853 $ 24,176 $ 75,764 $ 72,654 Satellites - acquired under finance leases 6,126 6,003 18,245 18,127 Total depreciation expense $ 31,979 $ 30,179 $ 94,009 $ 90,781 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Capitalized interest $ 12,150 $ 11,130 $ 35,524 $ 32,395 Construction in Progress In August 2017, we entered into a contract for the design and construction of the EchoStar XXIV satellite, a next-generation, high throughput geostationary satellite. Once in service, the satellite is expected to bring further consumer broadband capacity across North and South America and generate additional sales in other markets, including in-flight Wi-Fi, enterprise networking and cellular backhaul for mobile network operators across the two continents. Capital expenditures associated with the construction and launch of the EchoStar XXIV satellite are included in Corporate and Other. The satellite was launched in July 2023 and reached its orbital position at 95.2W in September 2023. The satellite is currently under testing and is expected to begin service in December 2023. Satellite-Related Commitments As of September 30, 2023 and December 31, 2022, our satellite-related commitments were $144.2 million and $169.3 million, respectively. These include payments pursuant to regulatory authorizations, non-lease costs associated with our finance lease satellites, in-orbit incentives relating to certain satellites, and commitments for satellite service arrangements. In certain circumstances, the dates on which we are obligated to pay our contractual obligations could change. Satellite Anomalies and Impairments During the first quarter of 2023, we lost contact with our third nano-satellite (“EG-3”), which was launched in the second quarter of 2021 and brought into use our Sirion-1 ITU filing in the third quarter of 2021. As of the end of the first quarter of 2023, we have discontinued attempts to reestablish contact with EG-3, and have notified the ITU to suspend the filing. Consequently, we canceled our contract with the vendor who manufactured and operated our nano-satellites and recorded an impairment charge of $3.1 million related to EG-3 and other related assets in the first quarter of 2023 in Corporate and Other. In the second quarter of 2023, we reduced the estimated useful life of the Al Yah 3 satellite, which serves our Brazilian customers, as a result of certain technical anomalies. In order to safeguard the future operability of the satellite, the Company has, in accordance with recommendations from the satellite manufacturer, implemented immediate and long-term remedial actions. A revised estimate of the satellite’s remaining lifetime has been calculated using operational data of two previous quarters. Although the anomalies are expected to shorten the remaining useful life of the satellite, they have not affected its current operation. Except as described above, we are not aware of any anomalies with respect to our owned or leased satellites or payloads that have had any significant adverse effect on their remaining useful lives, the commercial operation of the satellites or payloads or our operating results or financial position as of and for the three months ended September 30, 2023. Satellite Insurance We generally do not carry in-orbit insurance on our satellites or payloads because we have assessed that the cost of insurance is not economical relative to the risk of failures. Therefore, we generally bear the risk of any in-orbit failures. Pursuant to the terms of our joint venture agreement with Yahsat, we are required to maintain insurance for the Al Yah 3 Brazilian payload during the commercial in-orbit service of such payload, subject to certain limitations on coverage. The insurance policies were procured by Yahsat, under which the Company and Yahsat are the beneficiaries of any claims in proportion to their shareholdings. An insurance claim was submitted in the second quarter of 2023 for compensation with respect to the reduction in estimated useful life of the Al Yah 3 satellite. We also have obtained certain insurance for our EchoStar XXIV satellite covering launch plus the first year of operations. We will continue to assess circumstances going forward and make insurance-related decisions on a case-by-case basis. Fair Value of In-Orbit Incentives As of September 30, 2023 and December 31, 2022, the fair values of our in-orbit incentive obligations approximated their carrying amounts of $47.1 million and $50.2 million, respectively. |
REGULATORY AUTHORIZATIONS
REGULATORY AUTHORIZATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
REGULATORY AUTHORIZATIONS | REGULATORY AUTHORIZATIONS The following table presents our Regulatory authorizations, net: Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2021 $ 57,137 $ (29,088) $ 28,049 $ 441,717 $ 469,766 Amortization expense — (3,129) (3,129) — (3,129) Currency translation adjustments (5,582) 3,636 (1,946) (4,607) (6,553) Balance, September 30, 2022 $ 51,555 $ (28,581) $ 22,974 $ 437,110 $ 460,084 Balance, December 31, 2022 $ 55,316 $ (31,946) $ 23,370 $ 439,161 $ 462,531 Amortization expense — (3,856) (3,856) — (3,856) Currency translation adjustments 598 136 734 54 788 Balance, September 30, 2023 $ 55,914 $ (35,666) $ 20,248 $ 439,215 $ 459,463 Weighted-average useful life (in years) 13 |
OTHER INVESTMENTS
OTHER INVESTMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
OTHER INVESTMENTS | OTHER INVESTMENTS The following table presents our Other investments, net : As of September 30, 2023 December 31, 2022 Other investments, net: Equity method investments $ 45,048 $ 83,523 Other equity investments 91,407 141,307 Other debt investments, net — 131,875 Total other investments, net $ 136,455 $ 356,705 Deluxe/EchoStar LLC We own 50% of Deluxe/EchoStar LLC (“Deluxe”), a joint venture that we entered into in 2010 to build an advanced digital cinema satellite distribution network targeting delivery to digitally equipped theaters in the U.S. and Canada. Broadband Connectivity Solutions (Restricted) Limited We own 20% of Broadband Connectivity Solutions (Restricted) Limited (together with its subsidiaries, “BCS”), a joint venture that we entered into in 2018 to provide commercial Ka-band satellite broadband services across Africa, the Middle East and southwest Asia operating over Yahsat's Al Yah 2 and Al Yah 3 Ka-band satellites. During the nine months ended September 30, 2023, we recorded an impairment charge of $33.4 million related to our investment as a result of increased competition and the economic environment for this business. We estimated the fair value of our investment by using the combination of the discounted cash flow model and market value approach. The following table presents revenue recognized by the Company from our equity method investments: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Deluxe $ 1,445 $ 1,243 $ 4,233 $ 3,901 BCS $ 924 $ 2,600 $ 2,573 $ 6,321 The following table presents trade accounts receivable from our equity method investments: As of September 30, 2023 December 31, 2022 Deluxe $ 833 $ 3,026 BCS $ 4,061 $ 5,062 Other Equity Investments We hold investments without readily determinable fair values in a number of equity securities that are accounted for as cost method investments, which are recorded at cost, less impairment, and adjusted for observable price changes for identical or similar investments of the same issuer. In the third quarter of 2023, we recorded a loss of $24.4 million related to a decline in value of an investment previously held on a cost-basis method, due to fair value becoming determinable as a result of a merger between that entity and a publicly traded entity. Starting September 30, 2023, and for all subsequent periods, the investment is classified as marketable investment securities. The following table presents the activity on our investments: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Gain (loss) on investments, net $ (24,403) $ — $ (24,403) $ 49,888 Other Debt Investments, Net In April, 2023, we received full repayment with proceeds of $148.4 million related to our Other debt investments, net. As such, we recorded a gain of $ 7.6 million in Other, net for the nine months ended September 30, 202 3. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table presents the carrying amount and fair values of our Long-term debt, net: Effective Interest Rate As of September 30, 2023 December 31, 2022 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 677,970 $ 750,000 $ 727,763 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 642,195 750,000 707,490 Less: Unamortized debt issuance costs (2,604) — (3,223) — Total long-term debt, net $ 1,497,396 $ 1,320,165 $ 1,496,777 $ 1,435,253 The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market value for the debt. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, 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 interim income tax provision and our interim estimate of our annual effective tax rate are influenced by several factors, including foreign losses and capital gains and losses for which related deferred tax assets are partially offset by a valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be affected by the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower. Our income tax provision was $8.5 million for the three months ended September 30, 2023 compared to our income tax provision of $13.2 million for the three months ended September 30, 2022. Our effective income tax rate was 94.1% and 40.3% for the three months ended September 30, 2023 and 2022, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the for the three months ended September 30, 2023 were primarily due to excluded investment impairment losses and the impact of research and development credits. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended September 30, 2022 were primarily due to excluded foreign losses where the Company carries a full valuation allowance and the impact of state and local taxes. Our income tax provision was $38.8 million for the nine months ended September 30, 2023 compared to our income tax provision of $51.4 million for the nine months ended September 30, 2022. Our effective income tax rate was 50.9% and 30.2% for the nine months ended September 30, 2023 and 2022, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the nine months ended September 30, 2023 were primarily due to excluded investment impairment losses and excluded foreign losses where the Company carries a full valuation allowance. The variations in our current year effective tax rate from the U.S. federal statutory rate for the nine months ended September 30, 2022, were primarily due to excluded foreign losses where the Company carries a full valuation allowance and the impact of state and local taxes. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents the calculation of basic and diluted EPS for our Class A and B common stock: For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Net income (loss) attributable to EchoStar Corporation common stock $ 3,244 $ 22,403 $ 43,442 $ 127,704 Weighted-average common shares outstanding: Basic 83,850 83,140 83,653 84,424 Dilutive impact of stock awards outstanding — — 27 25 Diluted 83,850 83,140 83,680 84,449 Earnings (losses) per share: Basic $ 0.04 $ 0.27 $ 0.52 $ 1.51 Diluted $ 0.04 $ 0.27 $ 0.52 $ 1.51 Diluted earnings per share excludes the following weighted average potential Class A common shares, as the effect would be antidilutive, as computed under the treasury stock method: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2023 2022 2023 2022 Weighted-average stock options 5,595 6,443 5,650 6,418 Weighted-average restricted stock units 200 — 173 — |
RELATED PARTY TRANSACTIONS - DI
RELATED PARTY TRANSACTIONS - DISH NETWORK | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - DISH NETWORK | RELATED PARTY TRANSACTIONS - DISH NETWORK Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. See Note 1 - Organization and Business Activities and Note 16 - Subsequent Events for further details on the proposed merger with DIS H. In January 2017, we and certain of our subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017. In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“DISH Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH Network and our former joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) DISH Merger Sub merged with and into BSS Corp. (the “BSS Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.235 shares of DISH Class A common stock, par value $0.001 per share ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, we and DISH Network 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 indemnify each other against certain liabilities arising from our respective businesses. Generally, the amounts we or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We may also enter into additional agreements with DISH Network in the future. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Services and other revenue - DISH Network $ 5,991 $ 7,491 $ 18,703 $ 22,940 The following table presents the related trade accounts receivable: As of September 30, 2023 December 31, 2022 Trade accounts receivable - DISH Network $ 7,730 $ 3,492 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. We terminated the provision of this satellite capacity in December 2022. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. Real Estate Leases to DISH Network. 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 leases or subsequent amendments. Additionally, DISH Network compensates us for its portion of the taxes, insurance, utilities and/or maintenance of the premises. The terms of each of the leases are set forth below: • 100 Inverness Occupancy License Agreement — In March 2017, we and DISH Network entered into a license agreement for DISH Network to use certain of our space at 100 Inverness Terrace East, Englewood, Colorado for an initial period ending in December 2020. We and DISH Network have amended this lease over time to, among other things, extend the term through December 2023. This agreement may be terminated by either party upon 180 days’ prior notice. In connection with the BSS Transaction, we transferred to DISH Network the Englewood Satellite Operations Center located at 100 Inverness Terrace East, including any and all equipment, hardware licenses, software, processes, software licenses, furniture and technical documentation associated with the satellites transferred in the BSS Transaction. • Meridian Lease Agreement — The lease for all of 9601 S. Meridian Blvd., Englewood, Colorado was originally for a period ending in December 2016. We and DISH Network have amended this lease over time to, among other things, extend the term through December 2023. TerreStar Agreement. In March 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 we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network. In May 2022, we and DISH Network amended the agreement for the provision of hosting services to extend the term until May 2027. The price for warranty and operations and maintenance services is only valid until December 31, 2023. As such, if those services are to continue beyond December 31, 2023, DISH Network and HNS must agree on the price for these services as of January 1, 2024. Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet 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. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of 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 various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. The price for warranty and operations and maintenance services is only valid until December 31, 2023. As such, if those services are to continue beyond December 31, 2023, DBSD North America and HNS must agree on the price for these services as of January 1, 2024. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Operating expenses - DISH Network $ 1,910 $ 1,401 $ 4,717 $ 4,070 The following table presents the related trade accounts payable: As of September 30, 2023 December 31, 2022 Trade accounts payable - DISH Network $ 1,465 $ 669 Real Estate Leases from DISH Network. Effective March 2017, we entered into a lease with DISH Network for certain space at 530 EchoStar Drive in Cheyenne, Wyoming for an initial period ending in February 2019. In August 2018, we exercised our option to renew this lease for a one-year period ending in February 2020. In connection with the BSS Transaction, we transferred the Cheyenne Satellite Operations Center, including any equipment, software licenses, and furniture located within, to DISH Network and amended this lease to reduce the space provided to us for the Cheyenne Satellite Access Center for a period ending in September 2021. In March 2021, we exercised our option to renew this lease for a one-year period ending September 2022 and amended the lease to provide us the option to renew this lease for up to three Collocation and Antenna Space Agreements . We and DISH Network entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in July 2015, and provided us with renewal options for four consecutive three-year terms. We exercised our first renewal option for a period commencing in August 2015 and ending in July 2018, in April 2018 we exercised our second renewal option for a period ending in July 2021, and in May 2021 we exercised our third renewal option for a period ending in July 2024. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement effective May 2020. In November 2020, we provided a termination notice for one of our Englewood, Colorado agreements effective May 2021. In November 2021, we exercised our right to renew the collocation agreements at Gilbert, Arizona, Cheyenne, Wyoming, Spokane, Washington, Englewood, Colorado and Monee, Illinois for a period ending in February 2025. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. In May 2022, we exercised our right to renew such other agreements at Monee, Illinois and Spokane, Washington through August 2025. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 60 days’ prior written notice and certain other of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location. Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming, and the right to use an antenna and certain space in Gilbert, Arizona. Both agreements are for a period of five years with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The current term of the Hughes Broadband MSA is through March 2024 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $0.5 million and $1.8 million for the three months ended September 30, 2023 and 2022, respectively, and $1.4 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provides TT&C services to us for a period ending in September 2021, with the option for us to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 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. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice. We have exercised our option to renew the 2019 TT&C Agreement on several occasions, and its current term expires in September 2024. Referral Marketing Agreement . In June 2021, we and DISH Network entered into an agreement pursuant to which we will pre-qualify prospects contacting Hughes call centers and transfer those prospects to DISH Network for introduction to DISH Network’s video services, for prospects that convert Hughes will receive a commission. This agreement has an indefinite term and may be terminated by either party upon 90 days’ prior written notice. Whidbey Island 5G Network Test Bed Subcontract . In June 2022, we and DISH Wireless entered into a subcontract (“DISH Subcontract”) pursuant to which DISH provides access and use of a DISH lab, technical support and integration and testing support for the 5G network test bed to be delivered by Hughes to its customer. DISH Wireless additionally has agreed to lease certain licensed wireless spectrum to Hughes in connection with the project. Between June 2022 and October 2023, the scope of the DISH Subcontract has expanded to include additional spectrum leases and construction and related services work at Whidbey Island and the Lualualei Annex. Launch Credit. EchoStar Global Australia Pty Ltd (“EchoStar Australia”) previously entered into four launch services agreements pursuant to which EchoStar Australia held credits that may be applied to a future launch for EchoStar Australia or an affiliate. To ensure the use of this credit prior to its expiration, EchoStar Australia and DISH Orbital II L.L.C. (“DISH Orbital II”) agreed that EchoStar Australia would transfer the launch credit to DISH Orbital II for application against costs of a launch for DISH Orbital II. DISH Orbital II agreed to make a cash payment to EchoStar Australia. Other Receivables - DISH Network The following table presents our other receivables owed from DISH Network: As of September 30, 2023 December 31, 2022 Other receivables - DISH Network, noncurrent $ 77,751 $ 74,923 Tax Sharing Agreement. Effective December 2007, we and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs our and DISH Network’s respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies us for such taxes. However, DISH Network is not liable for and does not indemnify us for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of our stock, stock options or assets; (ii) any action that we take or fail to take or (iii) any action that we take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, we will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, we and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of our consolidated tax returns. Prior to the agreement with DISH Network in 2013, the federal tax benefits were reflected as a deferred tax asset for depreciation and amortization, which was netted in our non-current deferred tax liabilities. Under the agreement with DISH Network from 2013, DISH Network is paying us the federal tax benefit it receives at such time as we would have otherwise been able to realize such tax benefit. We recorded a current receivable from DISH Network in Other receivables - DISH Network , current and a non-current receivable from DISH Network in Other receivables - DISH Network , noncurrent and a corresponding increase in our Deferred tax liabilities, net to reflect the effects of this agreement. In addition, in September 2013, we and DISH Network agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and DISH Network for such combined returns, through the taxable period ending on December 31, 2017 (the “State Tax Arrangement”). In August 2018, we and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, to the extent permitted by applicable tax law, DISH Network is entitled to apply the benefit of our 2009 net operating losses (the “SATS 2009 NOLs”) to DISH Network’s federal tax return for the year ended December 31, 2008, in exchange for DISH Network paying us over time the value of the net annual federal income taxes paid by us that would have been otherwise offset by the SATS 2009 NOLs. The Tax Sharing Amendment also requires us and DISH Network to pay the other for the benefits of certain past and future federal research and development tax credits that we or DISH Network receive or received as a result of being part of a controlled group under the Code, and requires DISH Network to compensate us for certain past tax losses utilized by DISH Network and for certain past and future excess California research and development tax credits generated by us and used by DISH Network. In addition, the Tax Sharing Amendment extends the term of the State Tax Arrangement to the earlier of termination of the Tax Sharing Agreement, a change in control of either us or DISH Network or, for any particular state, if we and DISH Network no longer file a combined tax return for such state. We and DISH Network filed combined income tax returns in certain states from 2008 through 2019. We have earned and recognized tax benefits for certain state income tax credits that we would be unable to fully utilize currently if we had filed separately from DISH Network. We have charged Additional paid-in capital in prior periods when DISH Network has utilized such tax benefits. We expect to increase Additional paid-in capital upon receipt of any consideration that DISH Network pays to us in exchange for these tax credits. Master Transaction Agreement. In May 2019, we and BSS Corp. entered into the Master Transaction Agreement with DISH and DISH Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) we transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.235 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by us and DISH Network, including our representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. We and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we granted to DISH Network a license to our intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period. EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, among other things, for the continued use of all intellectual property and technology that is used in our retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, we and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that we are responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction. Share Exchange Agreement . In February 2017 we consummated the Share Exchange, following which we no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, we transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by us related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. We and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by us or DISH causes the transaction to be taxable to the other party after closing. Share Exchange Employee Matters Agreement . Effective March 2017, in connection with the Share Exchange, we and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the transferred businesses. DISH Network assumed employee-related liabilities relating to the transferred businesses as part of the Share Exchange, except that we are responsible for certain pre-Share Exchange employee related litigation, and compensation and benefits for employees who transferred to DISH Network in connection with the Share Exchange. |
RELATED PARTY TRANSACTIONS - OT
RELATED PARTY TRANSACTIONS - OTHER | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - OTHER | RELATED PARTY TRANSACTIONS - DISH NETWORK Overview EchoStar and DISH have operated as separate publicly-traded companies since 2008 (the “Spin-off”). A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. See Note 1 - Organization and Business Activities and Note 16 - Subsequent Events for further details on the proposed merger with DIS H. In January 2017, we and certain of our subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries pursuant to which, in February 2017, we received all of the shares of preferred tracking stock previously issued by us and one of our subsidiaries (the “Tracking Stock”), representing an 80% economic interest in the residential retail satellite broadband business of our Hughes segment, in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of our EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). The Tracking Stock was retired in March 2017. In September 2019, pursuant to a master transaction agreement (the “Master Transaction Agreement”) with DISH and a wholly-owned subsidiary of DISH (“DISH Merger Sub”), (i) we transferred certain real property and the various businesses, products, licenses, technology, revenues, billings, operating activities, assets and liabilities primarily related to the former portion of our ESS segment that managed, marketed and provided (1) broadcast satellite services primarily to DISH Network and our former joint venture Dish Mexico, and (2) telemetry, tracking and control (“TT&C”) services for satellites owned by DISH Network and a portion of our other businesses (collectively, the “BSS Business”) to one of our former subsidiaries, EchoStar BSS Corporation (“BSS Corp.”), (ii) we distributed to each holder of shares of our Class A or Class B common stock entitled to receive consideration in the transaction an amount of shares of common stock of BSS Corp., par value $0.001 per share (“BSS Common Stock”), equal to one share of BSS Common Stock for each share of our Class A or Class B common stock owned by such stockholder (the “Distribution”); and (iii) immediately after the Distribution, (1) DISH Merger Sub merged with and into BSS Corp. (the “BSS Merger”), such that BSS Corp. became a wholly-owned subsidiary of DISH and with DISH then owning and operating the BSS Business, and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.235 shares of DISH Class A common stock, par value $0.001 per share ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, we and DISH Network 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 indemnify each other against certain liabilities arising from our respective businesses. Generally, the amounts we or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. We may also enter into additional agreements with DISH Network in the future. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Services and other revenue - DISH Network $ 5,991 $ 7,491 $ 18,703 $ 22,940 The following table presents the related trade accounts receivable: As of September 30, 2023 December 31, 2022 Trade accounts receivable - DISH Network $ 7,730 $ 3,492 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. We terminated the provision of this satellite capacity in December 2022. Telesat Obligation Agreement. In September 2009, we entered into an agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we entered into an agreement with DISH Network, pursuant to which DISH Network leased satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network made certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service. We transferred the Telesat Transponder Agreement to DISH Network in September 2019 as part of the BSS Transaction; however, we retained certain obligations related to DISH Network’s performance under that agreement and we entered into an agreement with DISH Network whereby DISH Network compensates us for retaining such obligations. Real Estate Leases to DISH Network. 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 leases or subsequent amendments. Additionally, DISH Network compensates us for its portion of the taxes, insurance, utilities and/or maintenance of the premises. The terms of each of the leases are set forth below: • 100 Inverness Occupancy License Agreement — In March 2017, we and DISH Network entered into a license agreement for DISH Network to use certain of our space at 100 Inverness Terrace East, Englewood, Colorado for an initial period ending in December 2020. We and DISH Network have amended this lease over time to, among other things, extend the term through December 2023. This agreement may be terminated by either party upon 180 days’ prior notice. In connection with the BSS Transaction, we transferred to DISH Network the Englewood Satellite Operations Center located at 100 Inverness Terrace East, including any and all equipment, hardware licenses, software, processes, software licenses, furniture and technical documentation associated with the satellites transferred in the BSS Transaction. • Meridian Lease Agreement — The lease for all of 9601 S. Meridian Blvd., Englewood, Colorado was originally for a period ending in December 2016. We and DISH Network have amended this lease over time to, among other things, extend the term through December 2023. TerreStar Agreement. In March 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 we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment (the “TerreStar Agreements”). In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless these services are terminated by DISH Network upon at least 90 days’ written notice to us. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. In March 2020, we entered into an agreement with DISH Network pursuant to which we perform certain work and provide certain credits to amounts owed to us under the TerreStar Agreements in exchange for DISH Network’s granting us rights to use certain satellite capacity under the Amended and Restated Professional Services Agreement (as defined below). As a result, we and DISH Network amended the TerreStar Agreements to suspend our provision of warranty services to DISH Network from April 2020 through December 2020. Following the expiration of this suspension, we have recommenced providing warranty services to DISH Network. In May 2022, we and DISH Network amended the agreement for the provision of hosting services to extend the term until May 2027. The price for warranty and operations and maintenance services is only valid until December 31, 2023. As such, if those services are to continue beyond December 31, 2023, DISH Network and HNS must agree on the price for these services as of January 1, 2024. Hughes Broadband Distribution Agreement. Effective October 2012, we and DISH Network entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our Gen 4 HughesNet service. DISH Network pays us a monthly per subscriber wholesale service fee for our Gen 4 HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Gen 4 HughesNet 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. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our Gen 4 HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement. In March 2012, DISH Network completed its acquisition of all of the equity of 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 various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 2027 unless terminated by DBSD North America upon at least 180 days’ written notice to us. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. The price for warranty and operations and maintenance services is only valid until December 31, 2023. As such, if those services are to continue beyond December 31, 2023, DBSD North America and HNS must agree on the price for these services as of January 1, 2024. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Operating expenses - DISH Network $ 1,910 $ 1,401 $ 4,717 $ 4,070 The following table presents the related trade accounts payable: As of September 30, 2023 December 31, 2022 Trade accounts payable - DISH Network $ 1,465 $ 669 Real Estate Leases from DISH Network. Effective March 2017, we entered into a lease with DISH Network for certain space at 530 EchoStar Drive in Cheyenne, Wyoming for an initial period ending in February 2019. In August 2018, we exercised our option to renew this lease for a one-year period ending in February 2020. In connection with the BSS Transaction, we transferred the Cheyenne Satellite Operations Center, including any equipment, software licenses, and furniture located within, to DISH Network and amended this lease to reduce the space provided to us for the Cheyenne Satellite Access Center for a period ending in September 2021. In March 2021, we exercised our option to renew this lease for a one-year period ending September 2022 and amended the lease to provide us the option to renew this lease for up to three Collocation and Antenna Space Agreements . We and DISH Network entered into an agreement pursuant to which DISH Network provided us with collocation space in El Paso, Texas. This agreement was for an initial period ending in July 2015, and provided us with renewal options for four consecutive three-year terms. We exercised our first renewal option for a period commencing in August 2015 and ending in July 2018, in April 2018 we exercised our second renewal option for a period ending in July 2021, and in May 2021 we exercised our third renewal option for a period ending in July 2024. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In October 2019, we provided a termination notice for our New Braunfels, Texas agreement effective May 2020. In November 2020, we provided a termination notice for one of our Englewood, Colorado agreements effective May 2021. In November 2021, we exercised our right to renew the collocation agreements at Gilbert, Arizona, Cheyenne, Wyoming, Spokane, Washington, Englewood, Colorado and Monee, Illinois for a period ending in February 2025. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to us in Monee, Illinois and Spokane, Washington through August 2022. In May 2022, we exercised our right to renew such other agreements at Monee, Illinois and Spokane, Washington through August 2025. Generally, we may renew our collocation and antenna space agreements for three-year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 60 days’ prior written notice and certain other of these agreements with 180 days’ prior written notice. In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provided us with certain additional collocation space in Cheyenne, Wyoming for a period that ended in September 2020. The fees for the services provided under these agreements depend on the number of racks located at the location. Also in connection with the BSS Transaction, in September 2019, we entered into an agreement pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming for a period of five years commencing in August 2020, with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. In March 2021, we entered into additional agreements pursuant to which DISH Network provides us with antenna space and power in Cheyenne, Wyoming, and the right to use an antenna and certain space in Gilbert, Arizona. Both agreements are for a period of five years with four three-year renewal terms, with prior written notice of renewal required no more than 120 days but no less than 90 days prior to the end of the then-current term. Hughes Broadband Master Services Agreement . In conjunction with the launch of our EchoStar XIX satellite, in March 2017, we and DISH Network entered into a master service agreement (the “Hughes Broadband MSA”) pursuant to which DISH Network, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders and upgrades for our Gen 5 HughesNet service and related equipment and other telecommunication services and (ii) installs Gen 5 HughesNet service equipment with respect to activations generated by DISH Network. Under the Hughes Broadband MSA, we and DISH Network make certain payments to each other relating to sales, upgrades, purchases and installation services. The current term of the Hughes Broadband MSA is through March 2024 with automatic renewal for successive one-year terms. Either party has the ability to terminate the Hughes Broadband MSA, in whole or in part, for any reason upon at least 90 days’ notice to the other party. Upon expiration or termination of the Hughes Broadband MSA, we will continue to provide our Gen 5 HughesNet service to subscribers and make certain payments to DISH Network pursuant to the terms and conditions of the Hughes Broadband MSA. We incurred sales incentives and other costs under the Hughes Broadband MSA totaling $0.5 million and $1.8 million for the three months ended September 30, 2023 and 2022, respectively, and $1.4 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we entered into an agreement pursuant to which DISH Network provides TT&C services to us for a period ending in September 2021, with the option for us to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). The fees for services provided under the 2019 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. Any party is able to terminate the 2019 TT&C Agreement for any reason upon 12 months’ notice. We have exercised our option to renew the 2019 TT&C Agreement on several occasions, and its current term expires in September 2024. Referral Marketing Agreement . In June 2021, we and DISH Network entered into an agreement pursuant to which we will pre-qualify prospects contacting Hughes call centers and transfer those prospects to DISH Network for introduction to DISH Network’s video services, for prospects that convert Hughes will receive a commission. This agreement has an indefinite term and may be terminated by either party upon 90 days’ prior written notice. Whidbey Island 5G Network Test Bed Subcontract . In June 2022, we and DISH Wireless entered into a subcontract (“DISH Subcontract”) pursuant to which DISH provides access and use of a DISH lab, technical support and integration and testing support for the 5G network test bed to be delivered by Hughes to its customer. DISH Wireless additionally has agreed to lease certain licensed wireless spectrum to Hughes in connection with the project. Between June 2022 and October 2023, the scope of the DISH Subcontract has expanded to include additional spectrum leases and construction and related services work at Whidbey Island and the Lualualei Annex. Launch Credit. EchoStar Global Australia Pty Ltd (“EchoStar Australia”) previously entered into four launch services agreements pursuant to which EchoStar Australia held credits that may be applied to a future launch for EchoStar Australia or an affiliate. To ensure the use of this credit prior to its expiration, EchoStar Australia and DISH Orbital II L.L.C. (“DISH Orbital II”) agreed that EchoStar Australia would transfer the launch credit to DISH Orbital II for application against costs of a launch for DISH Orbital II. DISH Orbital II agreed to make a cash payment to EchoStar Australia. Other Receivables - DISH Network The following table presents our other receivables owed from DISH Network: As of September 30, 2023 December 31, 2022 Other receivables - DISH Network, noncurrent $ 77,751 $ 74,923 Tax Sharing Agreement. Effective December 2007, we and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs our and DISH Network’s respective rights, responsibilities and obligations after the Spin-off with respect to taxes for the periods ending on or before the Spin-off. Generally, all pre-Spin-off taxes, including any taxes that are incurred as a result of restructuring activities undertaken to implement the Spin-off, are borne by DISH Network and DISH Network indemnifies us for such taxes. However, DISH Network is not liable for and does not indemnify us for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of our stock, stock options or assets; (ii) any action that we take or fail to take or (iii) any action that we take that is inconsistent with the information and representations furnished to the IRS in connection with the request for the private letter ruling, or to counsel in connection with any opinion being delivered by counsel with respect to the Spin-off or certain related transactions. In such case, we will be solely liable for, and will indemnify DISH Network for any resulting taxes, as well as any losses, claims and expenses. The Tax Sharing Agreement will terminate after the later of the full period of all applicable statutes of limitations, including extensions, or once all rights and obligations are fully effectuated or performed. In light of the Tax Sharing Agreement, among other things, and in connection with our consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, we and DISH Network agreed upon a supplemental allocation of the tax benefits arising from certain tax items resolved in the course of the IRS’s examination of our consolidated tax returns. Prior to the agreement with DISH Network in 2013, the federal tax benefits were reflected as a deferred tax asset for depreciation and amortization, which was netted in our non-current deferred tax liabilities. Under the agreement with DISH Network from 2013, DISH Network is paying us the federal tax benefit it receives at such time as we would have otherwise been able to realize such tax benefit. We recorded a current receivable from DISH Network in Other receivables - DISH Network , current and a non-current receivable from DISH Network in Other receivables - DISH Network , noncurrent and a corresponding increase in our Deferred tax liabilities, net to reflect the effects of this agreement. In addition, in September 2013, we and DISH Network agreed upon a tax sharing arrangement for filing certain combined state income tax returns and a method of allocating the respective tax liabilities between us and DISH Network for such combined returns, through the taxable period ending on December 31, 2017 (the “State Tax Arrangement”). In August 2018, we and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, to the extent permitted by applicable tax law, DISH Network is entitled to apply the benefit of our 2009 net operating losses (the “SATS 2009 NOLs”) to DISH Network’s federal tax return for the year ended December 31, 2008, in exchange for DISH Network paying us over time the value of the net annual federal income taxes paid by us that would have been otherwise offset by the SATS 2009 NOLs. The Tax Sharing Amendment also requires us and DISH Network to pay the other for the benefits of certain past and future federal research and development tax credits that we or DISH Network receive or received as a result of being part of a controlled group under the Code, and requires DISH Network to compensate us for certain past tax losses utilized by DISH Network and for certain past and future excess California research and development tax credits generated by us and used by DISH Network. In addition, the Tax Sharing Amendment extends the term of the State Tax Arrangement to the earlier of termination of the Tax Sharing Agreement, a change in control of either us or DISH Network or, for any particular state, if we and DISH Network no longer file a combined tax return for such state. We and DISH Network filed combined income tax returns in certain states from 2008 through 2019. We have earned and recognized tax benefits for certain state income tax credits that we would be unable to fully utilize currently if we had filed separately from DISH Network. We have charged Additional paid-in capital in prior periods when DISH Network has utilized such tax benefits. We expect to increase Additional paid-in capital upon receipt of any consideration that DISH Network pays to us in exchange for these tax credits. Master Transaction Agreement. In May 2019, we and BSS Corp. entered into the Master Transaction Agreement with DISH and DISH Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) we transferred the BSS Business to BSS Corp.; (ii) we completed the Distribution; and (iii) immediately after the Distribution, (1) BSS Corp. became a wholly-owned subsidiary of DISH such that DISH owns and operates the BSS Business and (2) each issued and outstanding share of BSS Common Stock owned by EchoStar stockholders was converted into the right to receive 0.235 shares of DISH Common Stock. Following the consummation of the BSS Transaction, we no longer operate the BSS Business, which was a substantial portion of our ESS segment. The Master Transaction Agreement contained customary representations and warranties by us and DISH Network, including our representations relating to the assets, liabilities and financial condition of the BSS Business, and representations by DISH Network relating to its financial condition and liabilities. We and DISH Network have agreed to indemnify each other against certain losses with respect to breaches of certain representations and covenants and certain retained and assumed liabilities, respectively. BSS Transaction Intellectual Property and Technology License Agreement. Effective September 2019, in connection with the BSS Transaction, we and DISH Network entered into an intellectual property and technology license agreement (the “BSS IPTLA”) pursuant to which we and DISH Network license to each other certain intellectual property and technology. The BSS IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the BSS IPTLA, we granted to DISH Network a license to our intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the BSS Business acquired pursuant to the BSS Transaction, including a limited license to use the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks during a transition period. EchoStar retains full ownership of the “ESS” and “ECHOSTAR SATELLITE SERVICES” trademarks. In addition, DISH Network granted a license back to us, among other things, for the continued use of all intellectual property and technology that is used in our retained businesses but the ownership of which was transferred to DISH Network pursuant to the BSS Transaction. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, we and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the BSS Business. DISH Network assumed employee-related liabilities relating to the BSS Business as part of the BSS Transaction, except that we are responsible for certain pre-BSS Transaction compensation and benefits for employees who transferred to DISH Network in connection with the BSS Transaction. Share Exchange Agreement . In February 2017 we consummated the Share Exchange, following which we no longer operate the transferred EchoStar Technologies businesses and the Tracking Stock was retired and is no longer outstanding and all agreements, arrangements and policy statements with respect to such Tracking Stock terminated and are of no further effect. Pursuant to the Share Exchange Agreement, we transferred certain assets, investments in joint ventures, spectrum licenses and real estate properties and DISH Network assumed certain liabilities relating to the transferred assets and businesses. The Share Exchange Agreement contained customary representations and warranties by the parties, including representations by us related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. We and DISH Network also agreed to customary indemnification provisions whereby each party indemnifies the other against certain losses with respect to breaches of representations, warranties or covenants and certain liabilities and if certain actions undertaken by us or DISH causes the transaction to be taxable to the other party after closing. Share Exchange Employee Matters Agreement . Effective March 2017, in connection with the Share Exchange, we and DISH Network entered into an employee matters agreement that addressed the transfer of employees from us to DISH Network, including certain benefit and compensation matters and the allocation of responsibility for employee related liabilities relating to current and past employees of the transferred businesses. DISH Network assumed employee-related liabilities relating to the transferred businesses as part of the Share Exchange, except that we are responsible for certain pre-Share Exchange employee related litigation, and compensation and benefits for employees who transferred to DISH Network in connection with the Share Exchange. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Patents and Intellectual Property Many entities, including some of our competitors, have, or may have in the future, patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be tripled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to our products and services. We cannot be certain that these parties do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these parties on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement. Certain Arrangements with DISH Network In connection with our spin-off from DISH in 2008, 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 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 we will generally 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. In connection with the Share Exchange and BSS Transaction, we entered into the Share Exchange Agreement and the Master Transaction Agreement, respectively, and other agreements which provide, among other things, for the division of certain liabilities, including liabilities relating to taxes, intellectual property and employees and liabilities resulting from litigation and the assumption of certain liabilities that relate to the transferred businesses and assets. These agreements also contain additional indemnification provisions between us and DISH Network for, in the case of the Share Exchange, certain pre-existing liabilities and legal proceedings and, in the case of the BSS Transaction, certain losses with respect to breaches of certain representations and covenants and certain liabilities. Litigation We are involved in a number of legal proceedings concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or 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 and to determine if accruals are appropriate. 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. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending legal proceedings are charged to selling, general and administrative expense as incurred. For certain proceedings, management is unable to predict with any degree of certainty the outcome or 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 or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals, motions or other proceedings; (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). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. We intend to vigorously defend the proceedings against us. In the event that a court, tribunal, other body or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. License Fee Dispute with Government of India, Department of Telecommunications In 1994, the Government of India promulgated a “National Telecommunications Policy” under which the government liberalized the telecommunications sector and required telecommunications service providers to pay fixed license fees. Pursuant to this policy, our subsidiary Hughes Communications India Private Limited (“HCIPL”), formerly known as Hughes Escorts Communications Limited, obtained a license to operate a data network over satellite using VSAT systems. In 2002, HCIPL’s license was amended pursuant to a new government policy that was first established in 1999. The new policy eliminated the fixed license fees and instead required each telecommunications service provider to pay license fees based on its adjusted gross revenue (“AGR”). In March 2005, the Indian Department of Telecommunications (“DOT”) notified HCIPL that, based on its review of HCIPL’s audited accounts and AGR statements, HCIPL must pay additional license fees and penalties and interest on such fees and penalties. HCIPL responded that the DOT had improperly calculated its AGR by including revenue from licensed and unlicensed activities. The DOT rejected this explanation and in 2006, HCIPL filed a petition with an administrative tribunal (the “Tribunal”), challenging the DOT’s calculation of its AGR. The DOT also issued license fee assessments to other telecommunications service providers and a number of similar petitions were filed by several other such providers with the Tribunal. These petitions were amended, consolidated, remanded and re-appealed several times. On April 23, 2015, the Tribunal issued a judgment affirming the DOT’s calculation of AGR for the telecommunications service providers but reversing the DOT’s imposition of interest, penalties and interest on such penalties as excessive. Over subsequent years, the DOT and HCIPL and other telecommunications service providers, respectively, filed several appeals of the Tribunal’s ruling. On October 24, 2019, the Supreme Court of India (“Supreme Court”) issued an order (the “October 2019 Order”) affirming the license fee assessments imposed by the DOT, including its imposition of interest, penalties and interest on the penalties, but without indicating the amount HCIPL is required to pay the DOT, and ordering payment by January 23, 2020. On November 23, 2019, HCIPL and other telecommunication service providers filed a petition asking the Supreme Court to reconsider the October 2019 Order. The petition was denied on January 20, 2020. On January 22, 2020, HCIPL and other telecommunication service providers filed an application requesting that the Supreme Court modify the October 2019 Order to permit the DOT to calculate the final amount due and extend HCIPL’s and the other telecommunication service providers’ payment deadline. On February 14, 2020, the Supreme Court directed HCIPL and the other telecommunication service providers to explain why the Supreme Court should not initiate contempt proceedings for failure to pay the amounts due. During a hearing on March 18, 2020, the Supreme Court ordered that all amounts that were due before the October 2019 Order must be paid, including interest, penalties and interest on the penalties. The Supreme Court also ordered that the parties appear for a further hearing addressing, potentially among other things, a proposal by the DOT to allow for extended or deferred payments of amounts due. On June 11, 2020, the Supreme Court ordered HCIPL and the other telecommunication service providers to submit affidavits addressing the proposal made by the DOT to extend the time frame for payment of the amounts owed and for HCIPL and the other telecommunication providers to provide security for such payments. On September 1, 2020, the Supreme Court issued a judgment permitting a 10-year payment schedule. Under this payment schedule, HCIPL is required to make an annual payment every March 31, through 2031. Following the Supreme Court of India’s October 2019 judgment, HCIPL made payments during the first quarter of 2020, and additional payments on each March 31 thereafter. Pursuant to the Contribution and Membership Interest Purchase Agreement (the “Purchase Agreement”) dated December 3, 2004 between The DirecTV Group, Inc. ("DirecTV") and certain other entities relating to the spinoff by DirecTV of certain of its subsidiaries, including HCIPL, DirecTV undertook indemnification obligations to HCIPL, and HCIPL has pursued indemnification claims against DirecTV under the Purchase Agreement in connection with the license fees assessed in this proceeding. On June 22, 2023, the United States Court of Appeals for the Second Circuit ruled that, under the Purchase Agreement, HCIPL, is entitled to indemnification from DirecTV, with the amount of indemnification to be determined in further proceedings before the district court in New York. The following table presents the components of the accrual: As of September 30, 2023 December 31, 2022 Additional license fees $ 3,411 $ 3,425 Penalties 3,501 3,516 Interest and interest on penalties 81,592 78,327 Less: Payments (27,855) (17,785) Total accrual 60,649 67,483 Less: Current portion 10,147 10,191 Total long-term accrual $ 50,502 $ 57,292 Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accrual and such differences could be significant. Other In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations. In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Business segments are components of an enterprise for which separate financial information is available and regularly evaluated by our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We operate in two business segments: Hughes segment and ESS segment. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, and net income (loss) attributable to non-controlling interests (“EBITDA”). Total assets by segment have not been reported herein because the information is not provided to our CODM on a regular basis. The following table presents total revenue, capital expenditures and EBITDA for each of our business segments: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 External revenue $ 404,209 $ 5,873 $ 2,992 $ 413,074 Intersegment revenue — 573 (573) — Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 Capital expenditures $ 51,214 $ 130 $ 27,820 $ 79,164 EBITDA $ 142,204 $ 4,868 $ (45,812) $ 101,260 For the three months ended September 30, 2022 External revenue $ 489,565 $ 4,588 $ 3,234 $ 497,387 Intersegment revenue — 393 (393) — Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 Capital expenditures $ 50,783 $ — $ 10,674 $ 61,457 EBITDA $ 175,010 $ 3,446 $ (32,963) $ 145,493 For the nine months ended September 30, 2023 External revenue $ 1,279,739 $ 16,940 $ 9,101 $ 1,305,780 Intersegment revenue — 1,623 (1,623) — Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 Capital expenditures $ 142,189 $ 130 $ 29,932 $ 172,251 EBITDA $ 440,435 $ 14,085 $ (99,979) $ 354,541 For the nine months ended September 30, 2022 External revenue $ 1,475,512 $ 13,366 $ 9,359 $ 1,498,237 Intersegment revenue — 939 (939) — Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 Capital expenditures $ 176,665 $ — $ 72,709 $ 249,374 EBITDA $ 546,108 $ 9,658 $ (16,023) $ 539,743 The following table reconciles Income (loss) before income taxes in the Consolidated Statements of Operations to EBITDA: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Income (loss) before income taxes $ 9,079 $ 32,745 $ 76,217 $ 170,335 Interest income, net (26,209) (14,183) (78,331) (29,677) Interest expense, net of amounts capitalized 12,650 13,845 39,176 43,125 Depreciation and amortization 103,028 110,233 311,474 347,224 Net loss (income) attributable to non-controlling interests 2,712 2,853 6,005 8,736 EBITDA $ 101,260 $ 145,493 $ 354,541 $ 539,743 |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Other Current Assets, Net and Other Non-current Assets, Net The following table presents the components of Other current assets, net and Other non-current assets, net : As of September 30, 2023 December 31, 2022 Other current assets, net: Inventory $ 167,511 $ 123,606 Prepaids and deposits 58,865 61,877 Trade accounts receivable - DISH Network 7,730 3,492 Other, net 14,135 21,471 Total other current assets $ 248,241 $ 210,446 Other non-current assets, net: Capitalized software, net $ 117,473 $ 116,841 Contract acquisition costs, net 53,114 64,447 Other receivables - DISH Network 77,751 74,923 Other receivables, net 33,340 15,072 Restricted marketable investment securities 8,003 11,056 Deferred tax assets, net 8,955 8,011 Restricted cash 1,335 1,342 Contract fulfillment costs, net 1,780 1,931 Other, net 24,734 23,439 Total other non-current assets, net $ 326,485 $ 317,062 Inventory The following table presents the components of inventory: As of September 30, 2023 December 31, 2022 Raw materials $ 40,227 $ 32,920 Work-in-process 24,964 16,408 Finished goods 102,320 74,278 Total inventory $ 167,511 $ 123,606 Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities: As of September 30, 2023 December 31, 2022 Accrued expenses and other current liabilities: Accrued compensation $ 56,310 $ 56,337 Accrued expenses 52,044 39,875 Operating lease obligation 17,855 17,854 Accrued interest 16,417 39,245 Accrued taxes 14,197 12,603 Accrual for license fee dispute 10,147 10,191 In-orbit incentive obligations 4,737 5,369 Trade accounts payable - DISH Network 1,465 669 Other 18,928 17,710 Total accrued expenses and other current liabilities $ 192,100 $ 199,853 Other non-current liabilities: Accrual for license fee dispute $ 50,502 $ 57,292 In-orbit incentive obligations 42,324 44,836 Contract liabilities 6,999 8,326 Other 9,571 9,333 Total other non-current liabilities $ 109,396 $ 119,787 Supplemental and Non-cash Investing and Financing Activities The following table presents the year-to-date supplemental and non-cash investing and financing activities: For the nine months ended September 30, 2023 2022 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 64,928 $ 66,943 Cash paid for income taxes, net of refunds $ 19,976 $ 32,577 Non-cash investing and financing activities: Employee benefits paid in Class A common stock $ 5,421 $ 7,042 Increase (decrease) in capital expenditures included in accounts payable, net $ (3,453) $ (22,146) Non-cash net assets received as part of the India JV formation $ — $ 36,701 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 2, 2023, the Company entered into an Amended and Restated Agreement and Plan of Merger with DISH and EAV Corp., a Nevada corporation and a wholly owned subsidiary of EchoStar. The Amended Merger Agreement revises the structure of the merger of DISH and EchoStar contemplated by the Original Merger Agreement. The Amended Merger Agreement provides, among other things, that subject to the satisfaction or waiver of the conditions set forth in the Amended Merger Agreement, Merger Sub will merge with and into DISH, with DISH surviving the Merger as a wholly owned subsidiary of EchoStar. The expected proportional ownership of existing EchoStar stockholders and DISH stockholders in the combined company upon the consummation of the Merger remains the same as the expected proportional ownership contemplated by the Original Merger Agreement. Pursuant to the Amended Merger Agreement, at the effective time of the Merger, each share of DISH Class A Common Stock, par value $0.01 per share, and DISH Class C Common Stock, par value $0.01 per share, outstanding immediately prior to the Effective Time, will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of EchoStar Class A Common Stock, par value $0.001 per share, equal to 0.350877. On the terms and subject to the conditions set forth in the Amended Merger Agreement, at the Effective Time, each share of DISH Class B Common Stock, par value $0.01 per share, outstanding immediately prior to the Effective Time will be converted into the right to receive a number of validly issued, fully paid and non-assessable shares of EchoStar Class B Common Stock, par value $0.001 per share, equal to the Exchange Ratio. Any shares of DISH Class A Common Stock, DISH Class B Common Stock and DISH Class C Common Stock that are held in DISH’s treasury or held directly by EchoStar or Merger Sub immediately prior to the Effective Time will be cancelled and cease to exist and no consideration shall be paid or payable in respect thereof. Concurrently with the entry into the Amended Merger Agreement, Charles W. Ergen and Ergen family stockholders entered into an amended support agreement with the Company and DISH, pursuant to which the Ergen stockholders agreed to not vote, or cause or direct to be voted, the shares of EchoStar Class A Common Stock owned by them, other than with respect of any matter presented to the holders of EchoStar Class A Common Stock on which holders of EchoStar Class B Common Stock are not entitled to vote, for three years following the closing of the Merger. The parties have agreed to enter into a registration rights agreement reasonably acceptable to the parties providing for the registration of the Ergen stockholders’ shares of EchoStar Class A Common Stock or EchoStar Class B Common Stock received as part of the Merger consideration and/or EchoStar Class B Common Stock held by such stockholders immediately prior to the closing of the Merger, at EchoStar’s sole cost and expense. The board of directors of the Company (the “Board”), acting upon the unanimous recommendation of a special transaction committee of independent directors of the Board, has unanimously approved, adopted and declared advisable the Amended Merger Agreement and the transactions contemplated by the Amended Merger Agreement. The closing of the Merger is expected to occur in the fourth calendar quarter of 2023, subject to the satisfaction of certain regulatory approvals and other customary closing conditions. The Amended Merger Agreement provides certain termination rights for each of the Company and DISH including, among others, if the consummation of the Merger does not occur on or before April 2, 2024. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited Consolidated Financial Statements and the accompanying notes (collectively, the “Consolidated Financial Statements”) are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required for complete financial statements prepared in conformity with GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. All amounts presented in these Consolidated Financial Statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted. Refer to Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements in our Form 10-K for a summary and discussion of our significant accounting policies, except as updated below. |
Use of Estimates | Use of Estimates We are required to make certain estimates and assumptions that affect the amounts reported in these Consolidated Financial Statements. The most significant estimates and assumptions are used in determining: (i) inputs used to recognize revenue over time, including amortization periods for deferred contract acquisition costs and relative standalone selling prices of performance obligations; (ii) allowances for doubtful accounts, and estimated credit losses on investments; (iii) deferred taxes and related valuation allowances, including uncertain tax positions; (iv) loss contingencies; (v) fair value of financial instruments; (vi) fair value of assets and liabilities acquired in business combinations; and (vii) estimates of future cash flows used to evaluate and recognize impairments. |
Principles of Consolidation | Principles of Consolidation We consolidate all entities in which we have a controlling financial interest. We are deemed to have a controlling financial interest in variable interest entities in which we are the primary beneficiary and in other entities in which we own more than 50% of the outstanding voting shares and other shareholders do not have substantive rights to participate in management. For entities we control but do not wholly own, we record a non-controlling interest within stockholders’ equity for the portion of the entity’s equity attributed to the non-controlling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Business Combinations On January 1, 2023, we adopted Accounting Standards Update (“ASU”) No. 2021-08 - Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which provides an exception to fair value measurement for contract assets and contract liabilities related to revenue contracts acquired in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU is applied to business combinations occurring on or after the adoption date. Government Assistance On January 1, 2022, we adopted ASU No. 2021-10 - Government Assistance (Topic 832) : Disclosures by Business Entities about Government Assistance, which requires business entities (except for not-for-profit entities and employee benefit plans) to disclose information about certain government assistance they receive. The Company is currently participa ting in three government programs: New York-Connect America Fund, New York Broadband, and Affordable Connectivity Plan. The purpose of these programs is to provide internet and connectivity services to qualifying households in the United States. The Company is entitled to reimbursement from the government for services provided. We record gross monies received from government entities in Services and other revenue, and associated expenses such as salaries and supplies are recorded in Cost of sales - services and other, Research and development or Selling, general and administrative expenses, depending on the nature of e xpenditure. We accrue for reimbursement requests submitted to government entities in Trade accounts receivable and contract assets, net. During the three and nine months ended September 30, 2023, the Company recognized $4.6 million and $12.7 million in Services and other revenue, respectively. As of September 30, 2023, we have trade accounts receivable of $2.8 million rel ated to our government programs. Recently Issued Accounting Pronouncements Not Yet Adopted Business Combinations - Joint Venture Formations In August 2023, the FASB issued ASU No. 2023-05 - Business Combinations—Joint Venture Formations to reduce diversity in practice and provide decision-useful information to a joint venture’s investors. The ASU requires that a joint venture apply a new basis of accounting upon formation. Specifically, the newly formed joint venture will be required to recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in this ASU do not amend the definition of a joint venture, the accounting by an equity method investor for its investment in a joint venture, or the accounting by a joint venture for contributions received after its formation. The guidance in this ASU is effective prospectively for all joint ventures with a formation date on or after January 1, 2025. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. This ASU is applied prospectively to all newly formed joint ventures on or after the adoption date. Leases - Common Control Arrangements In March 2023, the FASB issued ASU No. 2023-01 - Leases (Topic 842): Common Control Arrangements . Among other things, this ASU requires all lessees to amortize leasehold improvements associated with common control leases over their useful life to the common control group and account for them as a transfer of assets between entities under common control at the end of the lease. Additional disclosures are required when the useful life of leasehold improvements to the common control group exceeds the related lease term. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. We plan to adopt this new guidance prospectively to all new leasehold improvements recognized on or after the adoption date and we do not expect it to have a material impact on our Consolidated Financial Statements. Reference Rate Reform In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848) , and all subsequent amendments to the initial guidance, codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2024. We expect to utilize the optional expedients provided by the guidance for contracts amended solely to use an alternative reference rate. We have evaluated the new guidance and we are in the process of implementing this ASU, and all subsequent amendments, and do not expect them to have a material impact on our Consolidated Financial Statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract with Customer, Asset and Liability | The following table presents the components of our contract balances: As of September 30, 2023 December 31, 2022 Trade accounts receivable and contract assets, net: Sales and services $ 165,456 $ 170,466 Leasing and other 9,856 7,936 Total trade accounts receivable 175,312 178,402 Contract assets 76,831 73,435 Allowance for doubtful accounts (16,722) (15,358) Total trade accounts receivable and contract assets, net $ 235,421 $ 236,479 Contract liabilities: Current $ 122,288 $ 121,739 Non-current 6,999 8,326 Total contract liabilities $ 129,287 $ 130,065 The following table presents the revenue recognized in the Consolidated Statements of Operations that was previously included within contract liabilities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Revenue $ 7,608 $ 6,175 $ 80,157 $ 115,974 |
Schedule of Activity in Contract Acquisition Costs | The following table presents the activity in our contract acquisition costs, net: For the nine months ended September 30, 2023 2022 Balance at beginning of period $ 64,447 $ 82,986 Additions 34,708 45,172 Amortization expense (46,722) (57,822) Foreign currency translation 681 156 Balance at end of period $ 53,114 $ 70,492 We recognized amortization expenses related to contract acquisition costs of $14.6 million and $18.2 million for the three months ended September 30, 2023 and 2022, respectively. |
Schedule of Disaggregation of Revenue | Revenue is attributed to geographic markets based upon the billing location of the customer. The following tables present our revenue from customer contracts disaggregated by primary geographic market and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 North America $ 324,722 $ 6,446 $ 2,401 $ 333,569 South and Central America 39,843 — — 39,843 Other 39,644 — 18 39,662 Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 For the three months ended September 30, 2022 North America $ 389,181 $ 4,981 $ 2,841 $ 397,003 South and Central America 40,290 — — 40,290 Other 60,094 — — 60,094 Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 For the nine months ended September 30, 2023 North America $ 1,038,234 $ 18,563 $ 7,460 $ 1,064,257 South and Central America 119,528 — — 119,528 Other 121,977 — 18 121,995 Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 For the nine months ended September 30, 2022 North America $ 1,187,301 $ 14,305 $ 8,413 $ 1,210,019 South and Central America 125,256 — — 125,256 Other 162,955 — 7 162,962 Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 The following tables present our revenue disaggregated by the nature of products and services and by segment: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 Services and other revenue: Services $ 341,575 $ 4,308 $ 1,344 $ 347,227 Lease revenue 8,925 2,138 1,059 12,122 Total services and other revenue 350,500 6,446 2,403 359,349 Equipment revenue: Equipment 24,701 — 16 24,717 Design, development and construction services 26,235 — — 26,235 Lease revenue 2,773 — — 2,773 Total equipment revenue 53,709 — 16 53,725 Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 For the three months ended September 30, 2022 Services and other revenue: Services $ 383,739 $ 3,247 $ 1,606 $ 388,592 Lease revenue 9,822 1,734 1,234 12,790 Total services and other revenue 393,561 4,981 2,840 401,382 Equipment revenue: Equipment 33,585 — 1 33,586 Design, development and construction services 60,605 — — 60,605 Lease revenue 1,814 — — 1,814 Total equipment revenue 96,004 — 1 96,005 Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 Hughes ESS Corporate and Other Consolidated For the nine months ended September 30, 2023 Services and other revenue: Services $ 1,054,348 $ 12,205 $ 4,196 $ 1,070,749 Lease revenue 28,013 6,358 3,266 37,637 Total services and other revenue 1,082,361 18,563 7,462 1,108,386 Equipment revenue: Equipment 72,348 — 16 72,364 Design, development and construction services 114,615 — — 114,615 Lease revenue 10,415 — — 10,415 Total equipment revenue 197,378 — 16 197,394 Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 For the nine months ended September 30, 2022 Services and other revenue: Services $ 1,181,461 $ 9,343 $ 4,474 $ 1,195,278 Lease revenue 30,711 4,962 3,939 39,612 Total services and other revenue 1,212,172 14,305 8,413 1,234,890 Equipment revenue: Equipment 86,878 — 7 86,885 Design, development and construction services 172,821 — — 172,821 Lease revenue 3,641 — — 3,641 Total equipment revenue 263,340 — 7 263,347 Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 |
Schedule of Operating Lease Revenue | The following table presents our lease revenue by type of lease: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Sales-type lease revenue: Revenue at lease commencement $ 2,272 $ 1,514 $ 8,913 $ 2,735 Interest income 501 300 1,502 906 Total sales-type lease revenue 2,773 1,814 10,415 3,641 Operating lease revenue 12,122 12,790 37,637 39,612 Total lease revenue $ 14,895 $ 14,604 $ 48,052 $ 43,253 |
Schedule of Sales-type Lease Revenue | The following table presents our lease revenue by type of lease: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Sales-type lease revenue: Revenue at lease commencement $ 2,272 $ 1,514 $ 8,913 $ 2,735 Interest income 501 300 1,502 906 Total sales-type lease revenue 2,773 1,814 10,415 3,641 Operating lease revenue 12,122 12,790 37,637 39,612 Total lease revenue $ 14,895 $ 14,604 $ 48,052 $ 43,253 |
MARKETABLE INVESTMENT SECURIT_2
MARKETABLE INVESTMENT SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Investment Securities | The following table presents our Marketable investment securities : As of September 30, 2023 December 31, 2022 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 175,444 $ 160,559 Commercial paper 518,641 687,927 Other debt securities 66,072 17,695 Total available-for-sale debt securities 760,157 866,181 Equity securities 142,590 118,790 Total marketable investment securities, including restricted amounts 902,747 984,971 Less: Restricted marketable investment securities (8,003) (11,056) Total marketable investment securities $ 894,744 $ 973,915 |
Schedule of Available-for-sale Securities Reconciliation | The following table presents the components of our available-for-sale debt securities: Amortized Unrealized Estimated Cost Gains Losses Fair Value As of September 30, 2023 Corporate bonds $ 173,714 $ 1,830 $ (100) $ 175,444 Commercial paper 518,641 — — 518,641 Other debt securities 66,083 — (11) 66,072 Total available-for-sale debt securities $ 758,438 $ 1,830 $ (111) $ 760,157 As of December 31, 2022 Corporate bonds $ 160,494 $ 125 $ (60) $ 160,559 Commercial paper 687,956 — (29) 687,927 Other debt securities 17,785 — (90) 17,695 Total available-for-sale debt securities $ 866,235 $ 125 $ (179) $ 866,181 |
Schedule of Activity on Available-for-sale Debt Securities | The following table presents the activity on our available-for-sale debt securities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 71,586 $ — $ 209,063 $ 37,904 |
Schedule of Activity of Equity Securities | The following table presents the activity of our equity securities: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Proceeds from sales $ 1,430 $ 34,121 $ 3,457 $ 34,374 Gains (losses) on investments, net $ 13,637 $ 18,273 $ 816 $ 26,536 |
Schedule of Fair Value Measurements | The following table presents our marketable investment securities categorized by the fair value hierarchy, certain of which have historically experienced volatility: Level 1 Level 2 Total As of September 30, 2023 Cash equivalents (including restricted) $ 536 $ 984,843 $ 985,379 Available-for-sale debt securities: Corporate bonds $ — $ 175,444 $ 175,444 Commercial paper — 518,641 518,641 Other debt securities 61,212 4,860 66,072 Total available-for-sale debt securities 61,212 698,945 760,157 Equity securities 133,968 8,622 142,590 Total marketable investment securities, including restricted amounts 195,180 707,567 902,747 Less: Restricted marketable investment securities (8,003) — (8,003) Total marketable investment securities $ 187,177 $ 707,567 $ 894,744 As of December 31, 2022 Cash equivalents (including restricted) $ 657 $ 595,814 $ 596,471 Available-for-sale debt securities: Corporate bonds $ — $ 160,559 $ 160,559 Commercial paper — 687,927 687,927 Other debt securities 15,968 1,727 17,695 Total available-for-sale debt securities 15,968 850,213 866,181 Equity securities 109,002 9,788 118,790 Total marketable investment securities, including restricted amounts 124,970 860,001 984,971 Less: Restricted marketable investment securities (11,056) — (11,056) Total marketable investment securities $ 113,914 $ 860,001 $ 973,915 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The following table presents the components of Property and equipment, net : As of September 30, 2023 December 31, 2022 Property and equipment, net: Satellites, net $ 1,506,838 $ 1,563,033 Other property and equipment, net 637,869 674,584 Total property and equipment, net $ 2,144,707 $ 2,237,617 The following table presents the components of our satellites, net: Depreciable Life (In Years) As of September 30, 2023 December 31, 2022 Satellites, net: Satellites - owned 5 to 15 $ 1,805,408 $ 1,808,924 Satellites - acquired under finance leases 15 364,820 360,642 Construction in progress — 646,284 608,773 Total satellites 2,816,512 2,778,339 Accumulated depreciation: Satellites - owned (1,167,853) (1,093,412) Satellites - acquired under finance leases (141,821) (121,894) Total accumulated depreciation (1,309,674) (1,215,306) Total satellites, net $ 1,506,838 $ 1,563,033 The following table presents the depreciation expense associated with our satellites, net: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Depreciation expense: Satellites - owned $ 25,853 $ 24,176 $ 75,764 $ 72,654 Satellites - acquired under finance leases 6,126 6,003 18,245 18,127 Total depreciation expense $ 31,979 $ 30,179 $ 94,009 $ 90,781 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Capitalized interest $ 12,150 $ 11,130 $ 35,524 $ 32,395 |
Schedule of Satellites | The following table presents our GEO satellite fleet in service as of September 30, 2023: GEO Satellite Segment Launch Date Nominal Degree Orbital Location (Longitude) Depreciable Life (In Years) Owned: SPACEWAY 3 (1) Hughes August 2007 95 W 10 EchoStar XVII Hughes July 2012 107 W 15 EchoStar XIX Hughes December 2016 97.1 W 15 Al Yah 3 (“AY3”) (2) Hughes January 2018 20 W 5 EchoStar IX (3) (4) ESS August 2003 121 W 12 EUTELSAT 10A (“W2A”) (5) Corporate and Other April 2009 10 E - EchoStar XXI Corporate and Other June 2017 10.25 E 15 Finance leases: Eutelsat 65 West A Hughes March 2016 65 W 15 Telesat T19V Hughes July 2018 63 W 15 EchoStar 105/SES-11 ESS October 2017 105 W 15 (1) Depreciable life represents the remaining useful life as of June 8, 2011, the date EchoStar completed the acquisition of Hughes Communications, Inc. (“Hughes Communications”) and its subsidiaries in 2011 (the “Hughes Acquisition”). The satellite is expected to de-orbit in the fourth quarter of 2023. (2) Upon consummation of our joint venture with Al Yah Satellite Communications Company PrJSC (“Yahsat”) in Brazil in November 2019, we acquired the Brazilian Ka-band payload on this satellite with a remaining useful life of 7 years as of that time. In the second quarter of 2023 we reduced the estimated useful life of the satellite as a result of certain technical anomalies. In order to safeguard the future operability of the satellite, the Company has, in conjunction with recommendations from the satellite manufacturer, implemented immediate and long-term remedial actions. A revised estimate of the satellite’s remaining lifetime has been calculated using operational data of the first two quarters. The Company has updated the remaining useful life of AY3 and related ground assets prospectively from April 1, 2023, to reflect the change in estimate. This has increased the depreciation expense for the current nine-month period by $7.4 million. The increase is expected to be $11.1 million for the full year 2023 and $12.8 million for the year 2024, respectively. Although the anomalies are expected to shorten the remaining useful life of the satellite, they have not affected its current operation. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) The Company placed the satellite in an inclined-orbit in the first quarter of 2023. Inclined-orbit will extend its life to enable further revenue generating opportunities. |
REGULATORY AUTHORIZATIONS (Tabl
REGULATORY AUTHORIZATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Regulatory Authorizations With Finite and Indefinite Useful Lives | The following table presents our Regulatory authorizations, net: Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2021 $ 57,137 $ (29,088) $ 28,049 $ 441,717 $ 469,766 Amortization expense — (3,129) (3,129) — (3,129) Currency translation adjustments (5,582) 3,636 (1,946) (4,607) (6,553) Balance, September 30, 2022 $ 51,555 $ (28,581) $ 22,974 $ 437,110 $ 460,084 Balance, December 31, 2022 $ 55,316 $ (31,946) $ 23,370 $ 439,161 $ 462,531 Amortization expense — (3,856) (3,856) — (3,856) Currency translation adjustments 598 136 734 54 788 Balance, September 30, 2023 $ 55,914 $ (35,666) $ 20,248 $ 439,215 $ 459,463 Weighted-average useful life (in years) 13 |
OTHER INVESTMENTS (Tables)
OTHER INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Other Investments and Equity Method Investments | The following table presents our Other investments, net : As of September 30, 2023 December 31, 2022 Other investments, net: Equity method investments $ 45,048 $ 83,523 Other equity investments 91,407 141,307 Other debt investments, net — 131,875 Total other investments, net $ 136,455 $ 356,705 The following table presents revenue recognized by the Company from our equity method investments: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Deluxe $ 1,445 $ 1,243 $ 4,233 $ 3,901 BCS $ 924 $ 2,600 $ 2,573 $ 6,321 The following table presents trade accounts receivable from our equity method investments: As of September 30, 2023 December 31, 2022 Deluxe $ 833 $ 3,026 BCS $ 4,061 $ 5,062 The following table presents the activity on our investments: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Gain (loss) on investments, net $ (24,403) $ — $ (24,403) $ 49,888 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Amount and Fair Values of Long-term Debt | The following table presents the carrying amount and fair values of our Long-term debt, net: Effective Interest Rate As of September 30, 2023 December 31, 2022 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 677,970 $ 750,000 $ 727,763 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 642,195 750,000 707,490 Less: Unamortized debt issuance costs (2,604) — (3,223) — Total long-term debt, net $ 1,497,396 $ 1,320,165 $ 1,496,777 $ 1,435,253 The estimated fair value of our publicly traded debt was primarily based on Level 1 inputs that use quoted market value for the debt. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table presents the calculation of basic and diluted EPS for our Class A and B common stock: For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Net income (loss) attributable to EchoStar Corporation common stock $ 3,244 $ 22,403 $ 43,442 $ 127,704 Weighted-average common shares outstanding: Basic 83,850 83,140 83,653 84,424 Dilutive impact of stock awards outstanding — — 27 25 Diluted 83,850 83,140 83,680 84,449 Earnings (losses) per share: Basic $ 0.04 $ 0.27 $ 0.52 $ 1.51 Diluted $ 0.04 $ 0.27 $ 0.52 $ 1.51 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Diluted earnings per share excludes the following weighted average potential Class A common shares, as the effect would be antidilutive, as computed under the treasury stock method: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2023 2022 2023 2022 Weighted-average stock options 5,595 6,443 5,650 6,418 Weighted-average restricted stock units 200 — 173 — |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - DISH NETWORK (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents our Services and other revenue - DISH Network : For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Services and other revenue - DISH Network $ 5,991 $ 7,491 $ 18,703 $ 22,940 The following table presents the related trade accounts receivable: As of September 30, 2023 December 31, 2022 Trade accounts receivable - DISH Network $ 7,730 $ 3,492 The following table presents our operating expenses related to DISH Network: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Operating expenses - DISH Network $ 1,910 $ 1,401 $ 4,717 $ 4,070 The following table presents the related trade accounts payable: As of September 30, 2023 December 31, 2022 Trade accounts payable - DISH Network $ 1,465 $ 669 The following table presents our other receivables owed from DISH Network: As of September 30, 2023 December 31, 2022 Other receivables - DISH Network, noncurrent $ 77,751 $ 74,923 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Accrual For License Fee Dispute | The following table presents the components of the accrual: As of September 30, 2023 December 31, 2022 Additional license fees $ 3,411 $ 3,425 Penalties 3,501 3,516 Interest and interest on penalties 81,592 78,327 Less: Payments (27,855) (17,785) Total accrual 60,649 67,483 Less: Current portion 10,147 10,191 Total long-term accrual $ 50,502 $ 57,292 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue, EBITDA, and Capital Expenditures by Operating Segments | The following table presents total revenue, capital expenditures and EBITDA for each of our business segments: Hughes ESS Corporate and Other Consolidated For the three months ended September 30, 2023 External revenue $ 404,209 $ 5,873 $ 2,992 $ 413,074 Intersegment revenue — 573 (573) — Total revenue $ 404,209 $ 6,446 $ 2,419 $ 413,074 Capital expenditures $ 51,214 $ 130 $ 27,820 $ 79,164 EBITDA $ 142,204 $ 4,868 $ (45,812) $ 101,260 For the three months ended September 30, 2022 External revenue $ 489,565 $ 4,588 $ 3,234 $ 497,387 Intersegment revenue — 393 (393) — Total revenue $ 489,565 $ 4,981 $ 2,841 $ 497,387 Capital expenditures $ 50,783 $ — $ 10,674 $ 61,457 EBITDA $ 175,010 $ 3,446 $ (32,963) $ 145,493 For the nine months ended September 30, 2023 External revenue $ 1,279,739 $ 16,940 $ 9,101 $ 1,305,780 Intersegment revenue — 1,623 (1,623) — Total revenue $ 1,279,739 $ 18,563 $ 7,478 $ 1,305,780 Capital expenditures $ 142,189 $ 130 $ 29,932 $ 172,251 EBITDA $ 440,435 $ 14,085 $ (99,979) $ 354,541 For the nine months ended September 30, 2022 External revenue $ 1,475,512 $ 13,366 $ 9,359 $ 1,498,237 Intersegment revenue — 939 (939) — Total revenue $ 1,475,512 $ 14,305 $ 8,420 $ 1,498,237 Capital expenditures $ 176,665 $ — $ 72,709 $ 249,374 EBITDA $ 546,108 $ 9,658 $ (16,023) $ 539,743 |
Schedule of Reconciliation of EBITDA to Reported Income (Loss) Before Income Taxes | The following table reconciles Income (loss) before income taxes in the Consolidated Statements of Operations to EBITDA: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 Income (loss) before income taxes $ 9,079 $ 32,745 $ 76,217 $ 170,335 Interest income, net (26,209) (14,183) (78,331) (29,677) Interest expense, net of amounts capitalized 12,650 13,845 39,176 43,125 Depreciation and amortization 103,028 110,233 311,474 347,224 Net loss (income) attributable to non-controlling interests 2,712 2,853 6,005 8,736 EBITDA $ 101,260 $ 145,493 $ 354,541 $ 539,743 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Assets and Other Liabilities | The following table presents the components of Other current assets, net and Other non-current assets, net : As of September 30, 2023 December 31, 2022 Other current assets, net: Inventory $ 167,511 $ 123,606 Prepaids and deposits 58,865 61,877 Trade accounts receivable - DISH Network 7,730 3,492 Other, net 14,135 21,471 Total other current assets $ 248,241 $ 210,446 Other non-current assets, net: Capitalized software, net $ 117,473 $ 116,841 Contract acquisition costs, net 53,114 64,447 Other receivables - DISH Network 77,751 74,923 Other receivables, net 33,340 15,072 Restricted marketable investment securities 8,003 11,056 Deferred tax assets, net 8,955 8,011 Restricted cash 1,335 1,342 Contract fulfillment costs, net 1,780 1,931 Other, net 24,734 23,439 Total other non-current assets, net $ 326,485 $ 317,062 The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities: As of September 30, 2023 December 31, 2022 Accrued expenses and other current liabilities: Accrued compensation $ 56,310 $ 56,337 Accrued expenses 52,044 39,875 Operating lease obligation 17,855 17,854 Accrued interest 16,417 39,245 Accrued taxes 14,197 12,603 Accrual for license fee dispute 10,147 10,191 In-orbit incentive obligations 4,737 5,369 Trade accounts payable - DISH Network 1,465 669 Other 18,928 17,710 Total accrued expenses and other current liabilities $ 192,100 $ 199,853 Other non-current liabilities: Accrual for license fee dispute $ 50,502 $ 57,292 In-orbit incentive obligations 42,324 44,836 Contract liabilities 6,999 8,326 Other 9,571 9,333 Total other non-current liabilities $ 109,396 $ 119,787 |
Schedule of Inventory | The following table presents the components of inventory: As of September 30, 2023 December 31, 2022 Raw materials $ 40,227 $ 32,920 Work-in-process 24,964 16,408 Finished goods 102,320 74,278 Total inventory $ 167,511 $ 123,606 |
Schedule of Noncash Investing and Financing Activities | The following table presents the year-to-date supplemental and non-cash investing and financing activities: For the nine months ended September 30, 2023 2022 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 64,928 $ 66,943 Cash paid for income taxes, net of refunds $ 19,976 $ 32,577 Non-cash investing and financing activities: Employee benefits paid in Class A common stock $ 5,421 $ 7,042 Increase (decrease) in capital expenditures included in accounts payable, net $ (3,453) $ (22,146) Non-cash net assets received as part of the India JV formation $ — $ 36,701 |
ORGANIZATION AND BUSINESS ACT_2
ORGANIZATION AND BUSINESS ACTIVITIES (Details) | 9 Months Ended | ||
Oct. 02, 2023 $ / shares | Sep. 30, 2023 segment $ / shares | Dec. 31, 2022 $ / shares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of business segments | segment | 2 | ||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Class A common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | 0.001 | 0.001 | |
Class C common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | 0.001 | 0.001 | |
Class B common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Subsequent Event | DISH Network Corporation | Class A common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Subsequent Event | DISH Network Corporation | Class C common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | 0.01 | ||
Subsequent Event | DISH Network Corporation | Class B common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | 0.01 | ||
Subsequent Event | EchoStar | Class A common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | $ 0.001 | ||
Exchange ratio | 0.350877 | ||
Subsequent Event | EchoStar | Class B common stock | |||
Stockholders Equity (Deficit) | |||
Common stock, par value (in dollars per share) | $ 0.001 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) program | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) program | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Accounting Policies [Line Items] | |||||
Number of government programs | program | 3 | 3 | |||
Total revenue | $ 413,074 | $ 497,387 | $ 1,305,780 | $ 1,498,237 | |
Trade accounts receivable - DISH Network | 235,421 | 235,421 | $ 236,479 | ||
New York-Connect America Fund, New York Broadband, and Affordable Connectivity Plan | |||||
Accounting Policies [Line Items] | |||||
Trade accounts receivable - DISH Network | 2,800 | 2,800 | |||
Services and other revenue | |||||
Accounting Policies [Line Items] | |||||
Total revenue | 359,349 | $ 401,382 | 1,108,386 | $ 1,234,890 | |
Services and other revenue | New York-Connect America Fund, New York Broadband, and Affordable Connectivity Plan | |||||
Accounting Policies [Line Items] | |||||
Total revenue | $ 4,600 | $ 12,700 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Components of Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Trade accounts receivable and contract assets, net: | |||||
Total trade accounts receivable | $ 175,312 | $ 175,312 | $ 178,402 | ||
Contract assets | 76,831 | 76,831 | 73,435 | ||
Allowance for doubtful accounts | (16,722) | (16,722) | (15,358) | ||
Total trade accounts receivable and contract assets, net | 235,421 | 235,421 | 236,479 | ||
Contract liabilities: | |||||
Current | 122,288 | 122,288 | 121,739 | ||
Non-current | 6,999 | 6,999 | 8,326 | ||
Total contract liabilities | 129,287 | 129,287 | 130,065 | ||
Revenue recognized | 7,608 | $ 6,175 | 80,157 | $ 115,974 | |
Sales and services | |||||
Trade accounts receivable and contract assets, net: | |||||
Total trade accounts receivable | 165,456 | 165,456 | 170,466 | ||
Leasing and other | |||||
Trade accounts receivable and contract assets, net: | |||||
Total trade accounts receivable | $ 9,856 | $ 9,856 | $ 7,936 |
REVENUE RECOGNITION - Activity
REVENUE RECOGNITION - Activity in Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Increase (Decrease) In Capitalized Contract Cost [Roll Forward] | ||||
Balance at beginning of period | $ 64,447 | $ 82,986 | ||
Additions | 34,708 | 45,172 | ||
Amortization expense | $ (14,600) | $ (18,200) | (46,722) | (57,822) |
Foreign currency translation | 681 | 156 | ||
Balance at end of period | $ 53,114 | $ 70,492 | $ 53,114 | $ 70,492 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Amortization expense | $ 14,600 | $ 18,200 | $ 46,722 | $ 57,822 |
Remaining performance obligation | $ 1,200,000 | $ 1,200,000 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Remaining performance obligation period | 1 year | 1 year | ||
Remaining performance obligation, percentage | 29% | 29% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Remaining performance obligation period | ||||
Remaining performance obligation, percentage | 71% | 71% |
REVENUE RECOGNITION - Schedul_2
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 413,074 | $ 497,387 | $ 1,305,780 | $ 1,498,237 |
Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 359,349 | 401,382 | 1,108,386 | 1,234,890 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 347,227 | 388,592 | 1,070,749 | 1,195,278 |
Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 12,122 | 12,790 | 37,637 | 39,612 |
Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 53,725 | 96,005 | 197,394 | 263,347 |
Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 24,717 | 33,586 | 72,364 | 86,885 |
Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 26,235 | 60,605 | 114,615 | 172,821 |
Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,773 | 1,814 | 10,415 | 3,641 |
Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,419 | 2,841 | 7,478 | 8,420 |
Corporate and Other | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,403 | 2,840 | 7,462 | 8,413 |
Corporate and Other | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,344 | 1,606 | 4,196 | 4,474 |
Corporate and Other | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,059 | 1,234 | 3,266 | 3,939 |
Corporate and Other | Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 16 | 1 | 16 | 7 |
Corporate and Other | Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 16 | 1 | 16 | 7 |
Corporate and Other | Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Corporate and Other | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Hughes | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 404,209 | 489,565 | 1,279,739 | 1,475,512 |
Hughes | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 404,209 | 489,565 | 1,279,739 | 1,475,512 |
Hughes | Operating segments | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 350,500 | 393,561 | 1,082,361 | 1,212,172 |
Hughes | Operating segments | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 341,575 | 383,739 | 1,054,348 | 1,181,461 |
Hughes | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,925 | 9,822 | 28,013 | 30,711 |
Hughes | Operating segments | Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 53,709 | 96,004 | 197,378 | 263,340 |
Hughes | Operating segments | Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 24,701 | 33,585 | 72,348 | 86,878 |
Hughes | Operating segments | Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 26,235 | 60,605 | 114,615 | 172,821 |
Hughes | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,773 | 1,814 | 10,415 | 3,641 |
ESS | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,873 | 4,588 | 16,940 | 13,366 |
ESS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,446 | 4,981 | 18,563 | 14,305 |
ESS | Operating segments | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,446 | 4,981 | 18,563 | 14,305 |
ESS | Operating segments | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,308 | 3,247 | 12,205 | 9,343 |
ESS | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,138 | 1,734 | 6,358 | 4,962 |
ESS | Operating segments | Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
ESS | Operating segments | Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
ESS | Operating segments | Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
ESS | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 333,569 | 397,003 | 1,064,257 | 1,210,019 |
North America | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,401 | 2,841 | 7,460 | 8,413 |
North America | Hughes | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 324,722 | 389,181 | 1,038,234 | 1,187,301 |
North America | ESS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,446 | 4,981 | 18,563 | 14,305 |
South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 39,843 | 40,290 | 119,528 | 125,256 |
South and Central America | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
South and Central America | Hughes | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 39,843 | 40,290 | 119,528 | 125,256 |
South and Central America | ESS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 39,662 | 60,094 | 121,995 | 162,962 |
Other | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 18 | 0 | 18 | 7 |
Other | Hughes | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 39,644 | 60,094 | 121,977 | 162,955 |
Other | ESS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE RECOGNITION - Lease Inc
REVENUE RECOGNITION - Lease Income By Lease Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Sales-type lease revenue: | ||||
Revenue at lease commencement | $ 2,272 | $ 1,514 | $ 8,913 | $ 2,735 |
Interest income | 501 | 300 | 1,502 | 906 |
Total sales-type lease revenue | 2,773 | 1,814 | 10,415 | 3,641 |
Operating lease revenue | 12,122 | 12,790 | 37,637 | 39,612 |
Total lease revenue | $ 14,895 | $ 14,604 | $ 48,052 | $ 43,253 |
Sales-Type Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total revenue | Total revenue | Total revenue | Total revenue |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total revenue | Total revenue | Total revenue | Total revenue |
MARKETABLE INVESTMENT SECURIT_3
MARKETABLE INVESTMENT SECURITIES - Schedule of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 760,157 | $ 866,181 |
Equity securities | 142,590 | 118,790 |
Total marketable investment securities, including restricted amounts | 902,747 | 984,971 |
Less: Restricted marketable investment securities | (8,003) | (11,056) |
Marketable investment securities | 894,744 | 973,915 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 175,444 | 160,559 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 518,641 | 687,927 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 66,072 | $ 17,695 |
MARKETABLE INVESTMENT SECURIT_4
MARKETABLE INVESTMENT SECURITIES - Schedule of Unrealized Gains (Losses) on Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized cost | $ 758,438 | $ 866,235 |
Unrealized gains | 1,830 | 125 |
Unrealized losses | (111) | (179) |
Estimated fair value | 760,157 | 866,181 |
Corporate bonds | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized cost | 173,714 | 160,494 |
Unrealized gains | 1,830 | 125 |
Unrealized losses | (100) | (60) |
Estimated fair value | 175,444 | 160,559 |
Commercial paper | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized cost | 518,641 | 687,956 |
Unrealized gains | 0 | 0 |
Unrealized losses | 0 | (29) |
Estimated fair value | 518,641 | 687,927 |
Other debt securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized cost | 66,083 | 17,785 |
Unrealized gains | 0 | 0 |
Unrealized losses | (11) | (90) |
Estimated fair value | $ 66,072 | $ 17,695 |
MARKETABLE INVESTMENT SECURIT_5
MARKETABLE INVESTMENT SECURITIES - Activity on Available for Sale Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 71,586 | $ 0 | $ 209,063 | $ 37,904 |
MARKETABLE INVESTMENT SECURIT_6
MARKETABLE INVESTMENT SECURITIES - Narrative (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities with contractual maturities of one year or less | $ 752,400,000 | |
Debt securities with contractual maturities exceeding one year | 7,800,000 | |
Fair value of marketable securities | ||
Marketable investment securities | 894,744,000 | $ 973,915,000 |
Fair Value, Inputs, Level 3 | ||
Fair value of marketable securities | ||
Marketable investment securities | $ 0 | $ 0 |
MARKETABLE INVESTMENT SECURIT_7
MARKETABLE INVESTMENT SECURITIES - Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 1,430 | $ 34,121 | $ 3,457 | $ 34,374 |
Gains (losses) on investments, net | $ 13,637 | $ 18,273 | $ 816 | $ 26,536 |
MARKETABLE INVESTMENT SECURIT_8
MARKETABLE INVESTMENT SECURITIES - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair value of marketable securities | ||
Cash equivalents (including restricted) | $ 985,379 | $ 596,471 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 760,157 | 866,181 |
Equity securities | 142,590 | 118,790 |
Total marketable investment securities, including restricted amounts | 902,747 | 984,971 |
Less: Restricted marketable investment securities | (8,003) | (11,056) |
Marketable investment securities | 894,744 | 973,915 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 175,444 | 160,559 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 518,641 | 687,927 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 66,072 | 17,695 |
Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 536 | 657 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 61,212 | 15,968 |
Equity securities | 133,968 | 109,002 |
Total marketable investment securities, including restricted amounts | 195,180 | 124,970 |
Less: Restricted marketable investment securities | (8,003) | (11,056) |
Marketable investment securities | 187,177 | 113,914 |
Level 1 | Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Level 1 | Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Level 1 | Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 61,212 | 15,968 |
Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 984,843 | 595,814 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 698,945 | 850,213 |
Equity securities | 8,622 | 9,788 |
Total marketable investment securities, including restricted amounts | 707,567 | 860,001 |
Less: Restricted marketable investment securities | 0 | 0 |
Marketable investment securities | 707,567 | 860,001 |
Level 2 | Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 175,444 | 160,559 |
Level 2 | Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 518,641 | 687,927 |
Level 2 | Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 4,860 | $ 1,727 |
PROPERTY AND EQUIPMENT- Major A
PROPERTY AND EQUIPMENT- Major Asset Class (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property and equipment, net: | ||
Property and equipment, net | $ 2,144,707 | $ 2,237,617 |
Satellites, net | ||
Property and equipment, net: | ||
Property and equipment, net | 1,506,838 | 1,563,033 |
Other property and equipment, net | ||
Property and equipment, net: | ||
Property and equipment, net | $ 637,869 | $ 674,584 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) satellite | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) satellite mi | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 10 | |||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 3,142 | $ 711 | ||
Level 2 | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Fair values of in-orbit incentive obligations | 47,100 | 47,100 | $ 50,200 | |||
Satellite-related obligations | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Satellite-related obligations | $ 144,200 | $ 144,200 | $ 169,300 | |||
Satellites, net | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Length of satellites utilized in geosynchronous orbit above the equator (in miles) | mi | 22,300 | |||||
Impairment of long-lived assets | $ 3,100 | |||||
Satellites - owned | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 7 | |||||
Satellites, Leased | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of satellites utilized under finance lease | satellite | 3 | 3 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Satellites (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Nov. 30, 2019 | |
SPACEWAY 3 | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 10 years | |
EchoStar XVII | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
EchoStar XIX | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Al Yah 3 | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 5 years | |
EchoStar IX | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 12 years | |
EchoStar XXI | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Eutelsat 65 West A | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Telesat T19V | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
EchoStar 105/SES-11 | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Yahsat Brazil | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 7 years | |
Depreciation expense increase | $ 7.4 | |
Expected amortization for remainder of fiscal year | 11.1 | |
Expected amortization for 2024 | $ 12.8 |
PROPERTY AND EQUIPMENT - Sche_2
PROPERTY AND EQUIPMENT - Schedule of Property Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accumulated depreciation: | ||
Total satellites, net | $ 2,144,707 | $ 2,237,617 |
Total Satellites | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Total satellites | 2,816,512 | 2,778,339 |
Accumulated depreciation: | ||
Accumulated depreciation | (1,309,674) | (1,215,306) |
Total satellites, net | 1,506,838 | 1,563,033 |
Satellites - owned | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Total satellites | 1,805,408 | 1,808,924 |
Accumulated depreciation: | ||
Accumulated depreciation | $ (1,167,853) | (1,093,412) |
Satellites - owned | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 5 years | |
Satellites - owned | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Satellites - acquired under finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Satellites - acquired under finance leases | $ 364,820 | 360,642 |
Accumulated depreciation: | ||
Accumulated depreciation | (141,821) | (121,894) |
Construction in progress | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Total satellites | $ 646,284 | $ 608,773 |
PROPERTY AND EQUIPMENT - Sche_3
PROPERTY AND EQUIPMENT - Schedule of Depreciation and Capitalized Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Depreciation expense: | ||||
Total depreciation expense | $ 103,028 | $ 110,233 | $ 311,474 | $ 347,224 |
Capitalized interest | 12,150 | 11,130 | 35,524 | 32,395 |
Total Satellites | ||||
Depreciation expense: | ||||
Total depreciation expense | 31,979 | 30,179 | 94,009 | 90,781 |
Satellites - owned | ||||
Depreciation expense: | ||||
Depreciation | 25,853 | 24,176 | 75,764 | 72,654 |
Satellites - acquired under finance leases | ||||
Depreciation expense: | ||||
Amortization of right-of-use assets | $ 6,126 | $ 6,003 | $ 18,245 | $ 18,127 |
REGULATORY AUTHORIZATIONS - Sch
REGULATORY AUTHORIZATIONS - Schedule of Regulatory Authorizations (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets Accumulated Amortization [RollForward] | ||
Amortization expense | $ (3,856) | $ (3,129) |
Indefinite-Lived Intangible Assets [Line Items] | ||
Balance at the beginning of the period | 439,161 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Balance at the beginning of the period | 462,531 | 469,766 |
Currency translation adjustment | 788 | (6,553) |
Balance at the end of the period | 459,463 | 460,084 |
Regulatory authorization | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Balance at the beginning of the period | 441,717 | |
Currency translation adjustment | 54 | (4,607) |
Balance at the end of the period | 439,215 | 437,110 |
Regulatory authorization | ||
Finite-Lived Intangible Assets Gross [RollForward] | ||
Balance at the beginning of the period | 55,316 | 57,137 |
Currency translation adjustments | 598 | (5,582) |
Balance at the end of the period | 55,914 | 51,555 |
Finite-Lived Intangible Assets Accumulated Amortization [RollForward] | ||
Balance at the beginning of the period | (31,946) | (29,088) |
Amortization expense | (3,856) | (3,129) |
Currency translation adjustment | 136 | 3,636 |
Balance at the end of the period | (35,666) | (28,581) |
Finite-Lived Intangible Assets [Roll Forward] | ||
Balance at the beginning of the period | 23,370 | 28,049 |
Currency translation adjustment | 734 | (1,946) |
Balance at the end of the period | $ 20,248 | $ 22,974 |
Weighted-average useful life (in years) | 13 years |
OTHER INVESTMENTS - Schedule of
OTHER INVESTMENTS - Schedule of Other Investments, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other investments, net: | ||
Equity method investments | $ 45,048 | $ 83,523 |
Other equity investments | 91,407 | 141,307 |
Other debt investments, net | 0 | 131,875 |
Total other investments, net | $ 136,455 | $ 356,705 |
OTHER INVESTMENTS - Narrative (
OTHER INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Other-than-temporary impairment losses on equity method investments | $ 0 | $ 0 | $ 33,400 | $ 0 | |
Loss on investment | $ 24,403 | $ 0 | 24,403 | (49,888) | |
Proceeds from repayment of other debt investment | $ 148,400 | 148,448 | $ 0 | ||
Gain on other debt investments | $ 7,600 | ||||
Deluxe | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity interest, percentage in joint venture | 50% | 50% | |||
BCS | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity interest, percentage in joint venture | 20% | 20% | |||
Other-than-temporary impairment losses on equity method investments | $ 33,400 |
OTHER INVESTMENTS - Schedule _2
OTHER INVESTMENTS - Schedule of Revenue Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Deluxe | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 1,445 | $ 1,243 | $ 4,233 | $ 3,901 |
BCS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 924 | $ 2,600 | $ 2,573 | $ 6,321 |
OTHER INVESTMENTS - Schedule _3
OTHER INVESTMENTS - Schedule of Trade Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Equity Method Investments [Line Items] | ||
Trade accounts receivable and contract assets, net | $ 235,421 | $ 236,479 |
Deluxe | ||
Schedule of Equity Method Investments [Line Items] | ||
Trade accounts receivable and contract assets, net | 833 | 3,026 |
BCS | ||
Schedule of Equity Method Investments [Line Items] | ||
Trade accounts receivable and contract assets, net | $ 4,061 | $ 5,062 |
OTHER INVESTMENTS - Other Equit
OTHER INVESTMENTS - Other Equity Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | ||||
Gain (loss) on investments, net | $ (24,403) | $ 0 | $ (24,403) | $ 49,888 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt and Capital Lease Obligations | ||
Less: Unamortized debt issuance costs | $ (2,604) | $ (3,223) |
Carrying amount, total long-term debt | 1,497,396 | 1,496,777 |
Fair value, total long-term debt | $ 1,320,165 | 1,435,253 |
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 5.25% | |
Effective Interest Rate | 5.32% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt | $ 677,970 | 727,763 |
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 6.625% | |
Effective Interest Rate | 6.688% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt | $ 642,195 | $ 707,490 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 8,547 | $ 13,195 | $ 38,780 | $ 51,367 |
Effective income tax rate | 94.10% | 40.30% | 50.90% | 30.20% |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to EchoStar Corporation common stock | $ 3,244 | $ 22,403 | $ 43,442 | $ 127,704 |
Weighted-average common shares outstanding: | ||||
Basic | 83,850 | 83,140 | 83,653 | 84,424 |
Dilutive impact of stock awards outstanding | 0 | 0 | 27 | 25 |
Diluted | 83,850 | 83,140 | 83,680 | 84,449 |
Earnings (losses) per share: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.27 | $ 0.52 | $ 1.51 |
Diluted (in dollars per share) | $ 0.04 | $ 0.27 | $ 0.52 | $ 1.51 |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation (in shares) | 5,595 | 6,443 | 5,650 | 6,418 |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||||
Anti-dilutive securities excluded from computation (in shares) | 200 | 0 | 173 | 0 |
RELATED PARTY TRANSACTIONS - _3
RELATED PARTY TRANSACTIONS - DISH NETWORK - Overview (Details) | 1 Months Ended | |||||
Sep. 30, 2019 $ / shares shares | May 31, 2019 shares | Feb. 28, 2017 | Sep. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares | Sep. 30, 2009 transponder | |
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
TeleSat Transponder Agreement | Telesat Canada | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Number of DBS transponders available to receive services | transponder | 32 | |||||
Common Stock | DISH Network | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||
Common Stock | BSS Corp. | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||
Share of BSS common stock issued for each share of Echostar Class A or Class B common stock (in shares) | shares | 1 | |||||
Class A common stock | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
Class A common stock | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Entity shares issued per acquiree share (in shares) | shares | 0.235 | |||||
Class A common stock | DISH Network | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Entity shares issued per acquiree share (in shares) | shares | 0.235 | |||||
Related Party | Share Exchange Agreement | EchoStar Technologies segment | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest acquired by related party (as a percent) | 100% | |||||
Related Party | DISH Nimiq 5 Agreement | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Number of DBS transponders available to receive services | transponder | 32 | |||||
Related Party | Preferred Tracking Stock | Hughes Retail Group | Satellite and Tracking Stock Transaction | DISH Network | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of economic interest held | 80% |
RELATED PARTY TRANSACTIONS - _4
RELATED PARTY TRANSACTIONS - DISH NETWORK - Services and Other Revenue - DISH Network (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Services and other revenue - DISH Network | $ 413,074 | $ 497,387 | $ 1,305,780 | $ 1,498,237 | |
Trade accounts receivable - DISH Network | 235,421 | 235,421 | $ 236,479 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Trade accounts receivable - DISH Network | 7,730 | 7,730 | 3,492 | ||
Related Party | DISH Network | |||||
Related Party Transaction [Line Items] | |||||
Services and other revenue - DISH Network | 5,991 | $ 7,491 | 18,703 | $ 22,940 | |
Trade accounts receivable - DISH Network | $ 7,730 | $ 7,730 | $ 3,492 |
RELATED PARTY TRANSACTIONS - _5
RELATED PARTY TRANSACTIONS - DISH NETWORK - Real Estate Leases to DISH Network (Details) | 1 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions, Lessor, Operating Lease, Real Estate | Related Party | 100 Inverness Lease Agreement | DISH Network | |
Related Party Transaction [Line Items] | |
Required minimum notice for termination of agreement (days) | 180 days |
RELATED PARTY TRANSACTIONS - _6
RELATED PARTY TRANSACTIONS - DISH NETWORK - TerreStar Agreement (Details) - Related Party - TerreStar Agreement | 1 Months Ended |
Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |
Minimum termination notice period (days) | 21 days |
Required minimum notice for termination of agreement (days) | 90 days |
RELATED PARTY TRANSACTIONS - _7
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband Distribution Agreement (Details) - Hughes Broadband Distribution Agreement | 1 Months Ended |
Oct. 31, 2012 | |
Related Party Transaction [Line Items] | |
Agreement term (in years) | 5 years |
Automatic renewal period (in years) | 1 year |
Required minimum notice for termination of agreement (days) | 180 days |
RELATED PARTY TRANSACTIONS - _8
RELATED PARTY TRANSACTIONS - DISH NETWORK - DBSD North America Agreement (Details) - Related Party - DBSD North America Agreement | 1 Months Ended | ||
Feb. 28, 2027 | Feb. 28, 2019 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Required minimum notice for termination of agreement (days) | 120 days | ||
Minimum termination notice period (days) | 21 days | ||
Forecast | |||
Related Party Transaction [Line Items] | |||
Minimum termination notice period (days) | 180 days |
RELATED PARTY TRANSACTIONS - _9
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Equipment and Services Agreement (Details) - Related Party - Hughes Equipment And Service Agreement | 1 Months Ended |
Feb. 28, 2019 | |
Related Party Transaction [Line Items] | |
Agreement term (in years) | 5 years |
Automatic renewal period (in years) | 1 year |
Required minimum notice for termination of agreement (days) | 180 days |
Minimum termination notice period (days) | 365 days |
RELATED PARTY TRANSACTIONS -_10
RELATED PARTY TRANSACTIONS - DISH NETWORK - Operating Expenses - DISH Network (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Operating expenses - DISH Network | $ 104,988 | $ 111,421 | $ 322,469 | $ 342,682 | |
Trade accounts payable - DISH Network | 82,291 | 82,291 | $ 101,239 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Trade accounts payable - DISH Network | 1,465 | 1,465 | 669 | ||
Related Party | DISH Network | |||||
Related Party Transaction [Line Items] | |||||
Operating expenses - DISH Network | 1,910 | $ 1,401 | 4,717 | $ 4,070 | |
Trade accounts payable - DISH Network | $ 1,465 | $ 1,465 | $ 669 |
RELATED PARTY TRANSACTIONS -_11
RELATED PARTY TRANSACTIONS - DISH NETWORK - Amended and Restated Professional Services Agreement (Details) - Related Party - Amended and Restated Professional Services Agreement | 1 Months Ended |
Jan. 31, 2010 | |
Related Party Transaction [Line Items] | |
Automatic renewal period (in years) | 1 year |
Required minimum notice for termination of agreement (days) | 60 days |
Required minimum notice for termination of individual service (days) | 30 days |
RELATED PARTY TRANSACTIONS -_12
RELATED PARTY TRANSACTIONS - DISH NETWORK - Real Estate Leases From DISH Network (Details) - Related Party Transactions, Lessee, Operating Lease, Real Estate - Related Party - Cheyenne Lease Agreement | 1 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2022 | Nov. 30, 2021 | Aug. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Term of contract (in years) | 1 year | |||
Renewal term | 1 year | 1 year | ||
Renewal term, additional years | 3 years |
RELATED PARTY TRANSACTIONS -_13
RELATED PARTY TRANSACTIONS - DISH NETWORK - Collocation and Antenna Space Agreements (Details) - Related Party - Collocation and Antenna Space Agreements - renewal | 1 Months Ended | |||
Mar. 31, 2021 | Sep. 30, 2019 | Aug. 31, 2017 | Aug. 31, 2015 | |
Related Party Transaction [Line Items] | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | 3 years | ||
Cheyenne, Wyoming | ||||
Related Party Transaction [Line Items] | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | |||
Agreement term (in years) | 5 years | |||
Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related Party Transaction [Line Items] | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | |||
Agreement term (in years) | 5 years | |||
Maximum | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 120 days | |||
Termination notice required (days) | 180 days | |||
Maximum | Cheyenne, Wyoming | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 120 days | |||
Maximum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 120 days | |||
Minimum | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 90 days | |||
Termination notice required (days) | 60 days | |||
Minimum | Cheyenne, Wyoming | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 90 days | |||
Minimum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related Party Transaction [Line Items] | ||||
Required renewal notice (days) | 90 days |
RELATED PARTY TRANSACTIONS -_14
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband Master Services Agreement (Details) - Related Party - Hughes Broadband Master Services Agreement - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | |||||
Automatic renewal period (in years) | 1 year | ||||
Required minimum notice for termination of agreement (days) | 90 days | ||||
Sales commissions and fees | $ 0.5 | $ 1.8 | $ 1.4 | $ 5.4 |
RELATED PARTY TRANSACTIONS -_15
RELATED PARTY TRANSACTIONS - DISH NETWORK - 2019 TT&C Agreement (Details) - Related Party - TT&C Agreement | 1 Months Ended |
Sep. 30, 2019 | |
Related Party Transaction [Line Items] | |
Term of renewal option (in years) | 1 year |
Required renewal notice (days) | 90 days |
Termination notice required (months) | 12 months |
RELATED PARTY TRANSACTIONS -_16
RELATED PARTY TRANSACTIONS - DISH NETWORK - Referral Marketing Agreement (Details) | 1 Months Ended |
Jun. 30, 2021 | |
Related Party | Referral Marketing Agreement | |
Related Party Transaction [Line Items] | |
Termination notice | 90 days |
RELATED PARTY TRANSACTIONS -_17
RELATED PARTY TRANSACTIONS - DISH NETWORK - Other Receivables - DISH Network (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Other receivables - DISH Network, noncurrent | $ 77,751 | $ 74,923 |
Related Party | DISH Network | ||
Related Party Transaction [Line Items] | ||
Other receivables - DISH Network, noncurrent | $ 77,751 | $ 74,923 |
RELATED PARTY TRANSACTIONS -_18
RELATED PARTY TRANSACTIONS - DISH NETWORK - Other Agreements (Details) | 1 Months Ended |
May 31, 2019 shares | |
Class A common stock | DISH Network | |
Related Party Transaction [Line Items] | |
Entity shares issued per acquiree share (in shares) | 0.235 |
RELATED PARTY TRANSACTIONS -_19
RELATED PARTY TRANSACTIONS - OTHER (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Total revenue | $ 413,074,000 | $ 497,387,000 | $ 1,305,780,000 | $ 1,498,237,000 | |
Trade accounts receivable and contract assets, net | 235,421,000 | 235,421,000 | $ 236,479,000 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Trade accounts receivable and contract assets, net | $ 7,730,000 | $ 7,730,000 | $ 3,492,000 | ||
Related Party | Hughes Systique | |||||
Related Party Transaction [Line Items] | |||||
Ownership interest in related party (as a percent) | 42% | ||||
Ownership interest percentage by related party | 25% | ||||
Related Party | TerreStar Solutions, Inc. | |||||
Related Party Transaction [Line Items] | |||||
Investment nonvoting interest ownership percentage (at least) | 15% | 15% | |||
Total revenue | $ 500,000 | $ 500,000 | $ 1,400,000 | $ 1,500,000 | |
Trade accounts receivable and contract assets, net | $ 0 | $ 0 |
CONTINGENCIES - Narrative (Deta
CONTINGENCIES - Narrative (Details) | Sep. 01, 2020 |
License Fee Dispute | |
Loss Contingencies [Line Items] | |
Payment schedule term (in years) | 10 years |
CONTINGENCIES - Accrual For Lic
CONTINGENCIES - Accrual For License Fee Dispute (Details) - License Fee Dispute - Hughes Network Systems - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | |||
Total accrual | $ 60,649 | $ 67,483 | |
Less: Payments | $ (17,785) | (27,855) | |
Less: Current portion | 10,147 | 10,191 | |
Total long-term accrual | 50,502 | 57,292 | |
Additional license fees | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,411 | 3,425 | |
Penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,501 | 3,516 | |
Interest and interest on penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | $ 81,592 | $ 78,327 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
SEGMENT REPORTING - Revenue, Ca
SEGMENT REPORTING - Revenue, Capital Expenditures, and EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 413,074 | $ 497,387 | $ 1,305,780 | $ 1,498,237 |
Capital expenditures | 79,164 | 61,457 | 172,251 | 249,374 |
EBITDA | 101,260 | 145,493 | 354,541 | 539,743 |
Income (loss) before income taxes | 9,079 | 32,745 | 76,217 | 170,335 |
Interest income, net | (26,209) | (14,183) | (78,331) | (29,677) |
Interest expense, net of amounts capitalized | 12,650 | 13,845 | 39,176 | 43,125 |
Depreciation and amortization | 103,028 | 110,233 | 311,474 | 347,224 |
Net loss (income) attributable to non-controlling interests | 2,712 | 2,853 | 6,005 | 8,736 |
All Other Segments and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,992 | 3,234 | 9,101 | 9,359 |
Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (573) | (393) | (1,623) | (939) |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 2,419 | 2,841 | 7,478 | 8,420 |
Capital expenditures | 27,820 | 10,674 | 29,932 | 72,709 |
EBITDA | (45,812) | (32,963) | (99,979) | (16,023) |
Hughes segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 404,209 | 489,565 | 1,279,739 | 1,475,512 |
Hughes segment | Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Hughes segment | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 404,209 | 489,565 | 1,279,739 | 1,475,512 |
Capital expenditures | 51,214 | 50,783 | 142,189 | 176,665 |
EBITDA | 142,204 | 175,010 | 440,435 | 546,108 |
EchoStar Satellite Services segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 5,873 | 4,588 | 16,940 | 13,366 |
EchoStar Satellite Services segment | Intersegment Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 573 | 393 | 1,623 | 939 |
EchoStar Satellite Services segment | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 6,446 | 4,981 | 18,563 | 14,305 |
Capital expenditures | 130 | 0 | 130 | 0 |
EBITDA | $ 4,868 | $ 3,446 | $ 14,085 | $ 9,658 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Other Current Assets, Net and Other Non-current Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Other current assets, net: | ||||
Inventory | $ 167,511 | $ 123,606 | ||
Prepaids and deposits | 58,865 | 61,877 | ||
Trade accounts receivable - DISH Network | 235,421 | 236,479 | ||
Other, net | 14,135 | 21,471 | ||
Total other current assets | 248,241 | 210,446 | ||
Other non-current assets, net: | ||||
Capitalized software, net | 117,473 | 116,841 | ||
Contract acquisition costs, net | 53,114 | 64,447 | $ 70,492 | $ 82,986 |
Other receivables - DISH Network, noncurrent | 77,751 | 74,923 | ||
Other receivables, net | 33,340 | 15,072 | ||
Restricted marketable investment securities | 8,003 | 11,056 | ||
Deferred tax assets, net | 8,955 | 8,011 | ||
Restricted cash | 1,335 | 1,342 | ||
Contract fulfillment costs, net | 1,780 | 1,931 | ||
Other, net | 24,734 | 23,439 | ||
Total other non-current assets, net | 326,485 | 317,062 | ||
Related Party | ||||
Other current assets, net: | ||||
Trade accounts receivable - DISH Network | $ 7,730 | $ 3,492 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Accrued Expenses and Other Current Liabilities and Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued expenses and other current liabilities: | ||
Accrued compensation | $ 56,310 | $ 56,337 |
Accrued expenses | 52,044 | 39,875 |
Operating lease obligation | 17,855 | 17,854 |
Accrued interest | 16,417 | 39,245 |
Accrued taxes | 14,197 | 12,603 |
Accrual for license fee dispute | 10,147 | 10,191 |
In-orbit incentive obligations | 4,737 | 5,369 |
Trade accounts payable | 82,291 | 101,239 |
Other | 18,928 | 17,710 |
Total accrued expenses and other current liabilities | 192,100 | 199,853 |
Other non-current liabilities: | ||
Accrual for license fee dispute | 50,502 | 57,292 |
In-orbit incentive obligations | 42,324 | 44,836 |
Contract liabilities | 6,999 | 8,326 |
Other | 9,571 | 9,333 |
Total other non-current liabilities | $ 109,396 | $ 119,787 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total accrued expenses and other current liabilities | Total accrued expenses and other current liabilities |
Related Party | ||
Accrued expenses and other current liabilities: | ||
Trade accounts payable | $ 1,465 | $ 669 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 40,227 | $ 32,920 |
Work-in-process | 24,964 | 16,408 |
Finished goods | 102,320 | 74,278 |
Total inventory | $ 167,511 | $ 123,606 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | $ 64,928 | $ 66,943 |
Cash paid for income taxes, net of refunds | 19,976 | 32,577 |
Non-cash investing and financing activities: | ||
Employee benefits paid in Class A common stock | 5,421 | 7,042 |
Increase (decrease) in capital expenditures included in accounts payable, net | (3,453) | (22,146) |
Non-cash net assets received as part of the India JV formation | 0 | 36,701 |
Class A common stock | ||
Non-cash investing and financing activities: | ||
Employee benefits paid in Class A common stock | $ 5,421 | $ 7,042 |
Subsequent Event (Details)
Subsequent Event (Details) | Oct. 02, 2023 $ / shares | Sep. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares |
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Class A common stock | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | 0.001 | 0.001 | |
Class A common stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Non-voting restricted term | 3 years | ||
Class A common stock | DISH Network Corporation | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Class A common stock | EchoStar | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 | ||
Exchange ratio | 0.350877 | ||
Class C common stock | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | 0.001 | 0.001 | |
Class C common stock | DISH Network Corporation | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Class B common stock | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Class B common stock | DISH Network Corporation | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | 0.01 | ||
Class B common stock | EchoStar | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 |