Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 333-179121 | |
Entity Registrant Name | Hughes Satellite Systems Corporation | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 45-0897865 | |
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 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,078 | |
Entity Central Index Key | 0001533758 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 924,912 | $ 429,168 |
Marketable investment securities | 360,648 | 854,502 |
Trade accounts receivable and contract assets, net | 224,015 | 182,063 |
Other current assets, net | 272,684 | 276,844 |
Total current assets | 1,782,259 | 1,742,577 |
Non-current assets: | ||
Property and equipment, net | 1,452,462 | 1,523,447 |
Operating lease right-of-use assets | 151,036 | 148,221 |
Goodwill | 533,505 | 511,086 |
Regulatory authorizations, net | 408,824 | 408,959 |
Other intangible assets, net | 17,018 | 13,984 |
Other investments, net | 86,210 | 91,226 |
Other non-current assets, net | 289,147 | 302,840 |
Total non-current assets | 2,938,202 | 2,999,763 |
Total assets | 4,720,461 | 4,742,340 |
Current liabilities: | ||
Trade accounts payable | 101,128 | 105,477 |
Contract liabilities | 134,856 | 141,343 |
Accrued expenses and other current liabilities | 299,302 | 308,879 |
Total current liabilities | 535,286 | 555,699 |
Non-current liabilities: | ||
Long-term debt, net | 1,496,379 | 1,495,994 |
Deferred tax liabilities, net | 349,762 | 334,406 |
Operating lease liabilities | 136,592 | 134,001 |
Other non-current liabilities | 138,289 | 153,251 |
Total non-current liabilities | 2,121,022 | 2,117,652 |
Total liabilities | 2,656,308 | 2,673,351 |
Commitments and contingencies | ||
Shareholder's equity: | ||
Preferred stock, $0.001 par value,1,000,000 shares authorized, none issued and outstanding at both June 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.01 par value, 1,000,000 shares authorized, 1,078 shares issued and outstanding at both June 30, 2022 and December 31, 2021 | 0 | 0 |
Additional paid-in capital | 1,477,604 | 1,489,776 |
Accumulated other comprehensive income (loss) | (168,914) | (173,381) |
Accumulated earnings (losses) | 654,136 | 692,341 |
Total Hughes Satellite Systems Corporation shareholder's equity | 1,962,826 | 2,008,736 |
Non-controlling interests | 101,327 | 60,253 |
Total shareholder's equity | 2,064,153 | 2,068,989 |
Total liabilities and shareholder's equity | $ 4,720,461 | $ 4,742,340 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Shareholder's equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 1,078 | 1,078 |
Common stock, shares outstanding (in shares) | 1,078 | 1,078 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 501,083 | $ 501,873 | $ 1,004,741 | $ 987,103 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 106,825 | 104,016 | 218,443 | 208,386 |
Research and development expenses | 8,765 | 7,441 | 16,381 | 14,986 |
Depreciation and amortization | 109,864 | 112,303 | 223,542 | 234,967 |
Impairment of long-lived assets | 0 | 0 | 0 | 210 |
Total costs and expenses | 438,118 | 415,812 | 879,489 | 827,153 |
Operating income (loss) | 62,965 | 86,061 | 125,252 | 159,950 |
Other income (expense): | ||||
Interest income, net | 4,279 | 1,682 | 6,559 | 4,076 |
Interest expense, net of amounts capitalized | (23,096) | (37,083) | (46,474) | (79,005) |
Gains (losses) on investments, net | 214 | 2,094 | 214 | 2,094 |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,301) | (1,269) | (3,015) | (3,030) |
Foreign currency transaction gains (losses), net | (2,878) | 535 | 3,777 | (2,825) |
Other, net | (239) | 1,989 | (428) | 1,016 |
Total other income (expense), net | (23,021) | (32,052) | (39,367) | (77,674) |
Income (loss) before income taxes | 39,944 | 54,009 | 85,885 | 82,276 |
Income tax benefit (provision), net | (14,844) | (18,349) | (29,972) | (28,986) |
Net income (loss) | 25,100 | 35,660 | 55,913 | 53,290 |
Less: Net loss (income) attributable to non-controlling interests | 3,394 | 2,280 | 5,882 | 3,227 |
Net income (loss) attributable to HSSC | 28,494 | 37,940 | 61,795 | 56,517 |
Services and other revenue | ||||
Revenue: | ||||
Total revenue | 416,463 | 433,317 | 837,404 | 866,308 |
Costs and expenses: | ||||
Cost of sales | 142,616 | 137,550 | 281,970 | 268,962 |
Equipment revenue | ||||
Revenue: | ||||
Total revenue | 84,620 | 68,556 | 167,337 | 120,795 |
Costs and expenses: | ||||
Cost of sales | $ 70,048 | $ 54,502 | $ 139,153 | $ 99,642 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 25,100 | $ 35,660 | $ 55,913 | $ 53,290 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (39,143) | 42,060 | 7,543 | 8,318 |
Unrealized gains (losses) on available-for-sale securities | (46) | 118 | (516) | 30 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 3 | 0 | 3 | 0 |
Total other comprehensive income (loss), net of tax | (39,186) | 42,178 | 7,030 | 8,348 |
Comprehensive income (loss) | (14,086) | 77,838 | 62,943 | 61,638 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 10,387 | (6,060) | 3,319 | 497 |
Comprehensive income (loss) attributable to HSSC | $ (3,699) | $ 71,778 | $ 66,262 | $ 62,135 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Earnings (Losses) | Non-controlling Interests |
Beginning balance at Dec. 31, 2020 | $ 2,076,376 | $ 1,486,730 | $ (146,840) | $ 671,570 | $ 64,916 |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 1,584 | 1,584 | |||
Contribution by non-controlling interest holder | 9,880 | 9,880 | |||
Other comprehensive income (loss) | 8,348 | 5,618 | 2,730 | ||
Net income (loss) | 53,290 | 56,517 | (3,227) | ||
Ending balance at Jun. 30, 2021 | 2,149,478 | 1,488,314 | (141,222) | 728,087 | 74,299 |
Beginning balance at Mar. 31, 2021 | 2,066,436 | 1,487,590 | (175,060) | 690,147 | 63,759 |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 724 | 724 | |||
Contribution by non-controlling interest holder | 4,480 | 4,480 | |||
Other comprehensive income (loss) | 42,178 | 33,838 | 8,340 | ||
Net income (loss) | 35,660 | 37,940 | (2,280) | ||
Ending balance at Jun. 30, 2021 | 2,149,478 | 1,488,314 | (141,222) | 728,087 | 74,299 |
Beginning balance at Dec. 31, 2021 | 2,068,989 | 1,489,776 | (173,381) | 692,341 | 60,253 |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 1,918 | 1,918 | |||
Issuance of equity and contribution of assets pursuant to the India JV formation | 30,303 | (14,090) | 44,393 | ||
Dividend paid to EchoStar | (100,000) | (100,000) | |||
Other comprehensive income (loss) | 7,030 | 4,467 | 2,563 | ||
Net income (loss) | 55,913 | 61,795 | (5,882) | ||
Ending balance at Jun. 30, 2022 | 2,064,153 | 1,477,604 | (168,914) | 654,136 | 101,327 |
Beginning balance at Mar. 31, 2022 | 2,077,100 | 1,476,465 | (136,721) | 625,642 | 111,714 |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 1,139 | 1,139 | |||
Other comprehensive income (loss) | (39,186) | (32,193) | (6,993) | ||
Net income (loss) | 25,100 | 28,494 | (3,394) | ||
Ending balance at Jun. 30, 2022 | $ 2,064,153 | $ 1,477,604 | $ (168,914) | $ 654,136 | $ 101,327 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 55,913 | $ 53,290 |
Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities: | ||
Depreciation and amortization | 223,542 | 234,967 |
Impairment of long-lived assets | 0 | 210 |
Losses (gains) on investments, net | (214) | (2,094) |
Equity in losses (earnings) of unconsolidated affiliates, net | 3,015 | 3,030 |
Foreign currency transaction losses (gains), net | (3,777) | 2,825 |
Deferred tax provision (benefit), net | 14,214 | 20,229 |
Stock-based compensation | 1,918 | 1,584 |
Amortization of debt issuance costs | 385 | 2,008 |
Other, net | 20,172 | 8,528 |
Changes in assets and liabilities, net: | ||
Trade accounts receivable and contract assets, net | (39,178) | (3,360) |
Other current assets, net | 7,858 | 6,379 |
Trade accounts payable | 4,146 | (8,406) |
Contract liabilities | (6,487) | 23,251 |
Accrued expenses and other current liabilities | (12,752) | (19,808) |
Non-current assets and non-current liabilities, net | (16,845) | (3,248) |
Net cash provided by (used for) operating activities | 251,910 | 319,385 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (171,005) | (816,386) |
Sales and maturities of marketable investment securities | 662,347 | 1,409,820 |
Expenditures for property and equipment | (125,882) | (154,382) |
Expenditures for externally marketed software | (11,967) | (16,835) |
Sales of other investments | 0 | 9,016 |
India JV formation | (7,892) | 0 |
Dividend received from unconsolidated affiliate | 2,000 | 0 |
Net cash provided by (used for) investing activities | 347,601 | 431,233 |
Cash flows from financing activities: | ||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | (901,818) |
Payment of finance lease obligations | (114) | (476) |
Payment of in-orbit incentive obligations | (1,908) | (1,431) |
Contribution by non-controlling interest holder | 0 | 9,880 |
Dividend paid to EchoStar | (100,000) | 0 |
Other, net | 0 | (966) |
Net cash provided by (used for) financing activities | (102,022) | (894,811) |
Effect of exchange rates on cash and cash equivalents | (672) | (348) |
Net increase (decrease) in cash and cash equivalents | 496,817 | (144,541) |
Cash and cash equivalents, including restricted amounts, beginning of period | 430,148 | 741,297 |
Cash and cash equivalents, including restricted amounts, end of period | $ 926,965 | $ 596,756 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITIES | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITIES | ORGANIZATION AND BUSINESS ACTIVITIES Principal Business Hughes Satellite Systems Corporation (which, together with its subsidiaries, is referred to as “HSSC,” the “Company,” “we,” “us” and “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar” and “parent”). 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 broadband satellite technologies, broadband internet services for consumer customers, which include home and small to medium-sized businesses, and satellite services. We also deliver innovative network technologies, managed services and communications solutions for enterprise customers, which include aeronautical and government enterprises. We operate in the following two business segments: • Hughes segment — which provides broadband satellite technologies and broadband internet services to domestic and international consumer customers and broadband network technologies, managed services, equipment, hardware, satellite services and communication solutions to service providers and enterprise customers. The Hughes segment also designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment designs, develops, constructs and provides telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers. • Echostar Satellite Services segment (“ESS segment”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide 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. Our operations also include various corporate functions (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and 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 segment in our segment reporting. 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 15. Segment Reporting for further detail . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
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 (“U.S. 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 U.S. 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; (ii) allowances for doubtful accounts; (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) asset impairment testing. 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 shareholder’s 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 On January 1, 2021, we adopted Accounting Standard Update (“ASU”) No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. In November 2021, the FASB issued ASU 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 Topic 832 disclosure requirements include: (i) the nature of the transactions and the related accounting policy used; (ii) the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), 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, 2022. 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 impact of adopting this new guidance and do not expect it to have a material impact on our Consolidated Financial Statements. In October 2021, the FASB issued ASU 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 effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022. Early adoption is permitted. The ASU is applied to business combinations occurring on or after the effective date. In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this new guidance and we do not expect it to have a material impact on our Consolidated Financial Statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Contract Balances The following table presents the components of our contract balances: As of June 30, 2022 December 31, 2021 Trade accounts receivable and contract assets, net: Sales and services $ 178,114 $ 154,676 Leasing 5,592 5,668 Total trade accounts receivable 183,706 160,344 Contract assets 57,413 36,307 Allowance for doubtful accounts (17,104) (14,588) Total trade accounts receivable and contract assets, net $ 224,015 $ 182,063 Contract liabilities: Current $ 134,856 $ 141,343 Non-current 9,922 10,669 Total contract liabilities $ 144,778 $ 152,012 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 June 30, For the six months ended June 30, 2022 2021 2022 2021 Revenue $ 20,852 $ 1,941 $ 109,799 $ 65,022 Contract Acquisition Costs The following table presents the activity in our contract acquisition costs, net: For the six months ended June 30, 2022 2021 Balance at beginning of period $ 82,986 $ 99,837 Additions 30,645 37,408 Amortization expense (39,653) (45,200) Foreign currency translation 724 678 Balance at end of period $ 74,702 $ 92,723 We recognized amortization expenses related to contract acquisition costs of $19.5 million and $22.4 million for the three months ended June 30, 2022 and 2021, respectively. Performance Obligations As of June 30, 2022, the remaining performance obligations for our customer contracts with original expected durations of more than one year was $1.1 billion. Performance obligations expected to be satisfied within one year and greater than one year are 40.0% and 60.0%, 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 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 June 30, 2022 North America $ 398,698 $ 4,850 $ (348) $ 403,200 South and Central America 42,094 — — 42,094 Other 51,049 — 4,740 55,789 Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 For the three months ended June 30, 2021 North America $ 405,101 $ 4,283 $ (88) $ 409,296 South and Central America 46,996 — — 46,996 Other 40,179 — 5,402 45,581 Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 For the six months ended June 30, 2022 North America $ 798,120 $ 9,324 $ (546) $ 806,898 South and Central America 84,966 — — 84,966 Other 102,861 — 10,016 112,877 Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 For the six months ended June 30, 2021 North America $ 803,860 $ 8,372 $ (176) $ 812,056 South and Central America 90,026 — — 90,026 Other 74,250 — 10,771 85,021 Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 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 June 30, 2022 Services and other revenue: Services $ 397,320 $ 3,161 $ — $ 400,481 Lease revenue 9,902 1,689 4,391 15,982 Total services and other revenue 407,222 4,850 4,391 416,463 Equipment revenue: Equipment 27,408 — 1 27,409 Design, development and construction services 56,311 — — 56,311 Lease revenue 900 — — 900 Total equipment revenue 84,619 — 1 84,620 Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 For the three months ended June 30, 2021 Services and other revenue: Services $ 413,925 $ 2,884 $ — $ 416,809 Lease revenue 9,796 1,399 5,313 16,508 Total services and other revenue 423,721 4,283 5,313 433,317 Equipment revenue: Equipment 31,101 — 1 31,102 Design, development and construction services 35,057 — — 35,057 Lease revenue 2,397 — — 2,397 Total equipment revenue 68,555 — 1 68,556 Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 Hughes ESS Corporate and Other Consolidated For the six months ended June 30, 2022 Services and other revenue: Services $ 797,722 $ 6,096 $ — $ 803,818 Lease revenue 20,889 3,228 9,469 33,586 Total services and other revenue 818,611 9,324 9,469 837,404 Equipment revenue: Equipment 53,293 — 1 53,294 Design, development and construction services 112,216 — — 112,216 Lease revenue 1,827 — — 1,827 Total equipment revenue 167,336 — 1 167,337 Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 For the six months ended June 30, 2021 Services and other revenue: Services $ 827,517 $ 5,574 $ — $ 833,091 Lease revenue 19,824 2,798 10,595 33,217 Total services and other revenue 847,341 8,372 10,595 866,308 Equipment revenue: Equipment 59,550 — — 59,550 Design, development and construction services 56,693 — — 56,693 Lease revenue 4,552 — — 4,552 Total equipment revenue 120,795 — — 120,795 Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 Lease Revenue The following table presents our lease revenue by type of lease: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Sales-type lease revenue: Revenue at lease commencement $ 583 $ 2,295 $ 1,221 $ 4,377 Interest income 317 102 606 175 Total sales-type lease revenue 900 2,397 1,827 4,552 Operating lease revenue 15,982 16,508 33,586 33,217 Total lease revenue $ 16,882 $ 18,905 $ 35,413 $ 37,769 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS In May 2019, we entered into an agreement with Bharti Airtel Limited (“BAL”) and its subsidiary, Bharti Airtel Services Limited (together with BAL, “Bharti”), pursuant to which Bharti agreed to contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to Hughes Communications India Private Limited (“HCIPL”) and its subsidiaries, our less than wholly owned Indian subsidiaries, that conduct our VSAT services and hardware business in India. On January 4, 2022, this joint venture was formed (the “India JV”) and subsequent to the formation of the India JV, we hold a 67% ownership interest and Bharti holds a 33% ownership interest in HCIPL. The India JV combines the VSAT businesses of both companies to offer flexible and scalable enterprise networking solutions using satellite connectivity for primary transport, back-up and hybrid implementation in India. The results of operations related to the India JV have been included in these Consolidated Financial Statements from the date of formation. The costs associated with the closing of the India JV were not material and were expensed as incurred. The fair value of the consideration transferred was $38.2 million. Net cash paid was $7.9 million, inclusive of amounts paid for the acquisition of, or of HCIPL shares from, entities that were shareholders of HCIPL prior to closing the India JV. All assets and liabilities acquired in the India JV formation have been recorded at fair value. The following table presents our preliminary allocation of the purchase price: Amounts Assets: Trade accounts receivable and contract assets, net $ 6,160 Other current assets 2,085 Property and equipment 4,669 Goodwill 23,086 Other intangible assets 4,428 Total assets $ 40,428 Liabilities: Trade accounts payable $ 133 Accrued expenses and other current liabilities 986 Deferred tax liabilities 1,114 Total liabilities $ 2,233 Total purchase price $ 38,195 The preliminary valuation of assets acquired and liabilities assumed in the India JV were derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in a customer relationship intangible of $4.4 million with an estimated life of 5 years and is reported in Other intangible assets, net. Goodwill associated with the India JV is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce. Goodwill has been allocated entirely to our Hughes segment. |
MARKETABLE INVESTMENT SECURITIE
MARKETABLE INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE INVESTMENT SECURITIES | MARKETABLE INVESTMENT SECURITIES The following table presents our Marketable investment securities : As of June 30, 2022 December 31, 2021 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 162,923 $ 284,787 Commercial paper 153,023 491,360 Other debt securities 44,702 78,355 Total available-for-sale debt securities 360,648 854,502 Equity securities — — Total marketable investment securities $ 360,648 $ 854,502 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 June 30, 2022 Corporate bonds $ 163,830 $ 2 $ (909) $ 162,923 Commercial paper 153,023 — — 153,023 Other debt securities 44,730 — (28) 44,702 Total available-for-sale debt securities $ 361,583 $ 2 $ (937) $ 360,648 As of December 31, 2021 Corporate bonds $ 285,169 $ — $ (382) $ 284,787 Commercial paper 491,360 — — 491,360 Other debt securities 78,395 — (40) 78,355 Total available-for-sale debt securities $ 854,924 $ — $ (422) $ 854,502 The following table presents the activity on our available-for-sale debt securities: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Proceeds from sales $ 8,886 $ 55,500 $ 37,904 $ 151,265 As of June 30, 2022, we have $360.6 million of available-for-sale debt securities with contractual maturities of one year or less and zero with contractual maturities greater than one year. 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 June 30, 2022 Cash equivalents (including restricted) $ 198 $ 838,668 $ 838,866 Available-for-sale debt securities: Corporate bonds $ — $ 162,923 $ 162,923 Commercial paper — 153,023 153,023 Other debt securities — 44,702 44,702 Total available-for-sale debt securities — 360,648 360,648 Equity securities — — — Total marketable investment securities $ — $ 360,648 $ 360,648 As of December 31, 2021 Cash equivalents (including restricted) $ 4,032 $ 320,732 $ 324,764 Available-for-sale debt securities: Corporate bonds $ — $ 284,787 $ 284,787 Commercial paper — 491,360 491,360 Other debt securities — 78,355 78,355 Total available-for-sale debt securities — 854,502 854,502 Equity securities — — — Total marketable investment securities $ — $ 854,502 $ 854,502 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table presents the components of Property and equipment, net : As of June 30, 2022 December 31, 2021 Property and equipment, net: Satellites, net $ 803,535 $ 847,613 Other property and equipment, net 648,927 675,834 Total property and equipment, net $ 1,452,462 $ 1,523,447 Satellites As of June 30, 2022, our satellite fleet consisted of eight geosynchronous (“GEO”) satellites, five of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator. The following table presents our GEO satellite fleet as of June 30, 2022: 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 (2) Hughes January 2018 20 W 7 EchoStar IX (3) (4) ESS August 2003 121 W 12 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 (the “Hughes Acquisition”). (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. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) EchoStar IX is approaching its end of station-kept life. The Company expects to place the satellite in an inclined-orbit in the fourth quarter of 2022 or first quarter of 2023, but this ability is dependent upon events beyond our control and may not occur on schedule if at all. Inclined-orbit will extend its life but impact revenue generating capabilities. The following table presents the components of our satellites, net: Depreciable Life (In Years) As of June 30, 2022 December 31, 2021 Satellites, net: Satellites - owned 7 to 15 $ 1,503,279 $ 1,500,836 Satellites - acquired under finance leases 15 360,257 354,170 Total satellites 1,863,536 1,855,006 Accumulated depreciation: Satellites - owned (950,273) (911,722) Satellites - acquired under finance leases (109,728) (95,671) Total accumulated depreciation (1,060,001) (1,007,393) Total satellites, net $ 803,535 $ 847,613 The following table presents the depreciation expense associated with our satellites, net: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Depreciation expense: Satellites - owned $ 19,005 $ 17,490 $ 37,920 $ 44,558 Satellites - acquired under finance leases 6,137 7,396 12,124 14,597 Total depreciation expense $ 25,142 $ 24,886 $ 50,044 $ 59,155 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Capitalized interest $ 2,095 $ 1,467 $ 4,058 $ 2,713 Satellite-Related Commitments As of June 30, 2022 and December 31, 2021 our satellite-related commitments were $160.2 million and $179.7 million, respectively. These primarily 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 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 and six months ended June 30, 2022. |
REGULATORY AUTHORIZATIONS
REGULATORY AUTHORIZATIONS | 6 Months Ended |
Jun. 30, 2022 | |
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, 2020 11,505 (1,054) 10,451 400,000 410,451 Amortization expense — (405) (405) — (405) Currency translation adjustments (157) (6) (163) — (163) Balance, June 30, 2021 11,348 (1,465) 9,883 400,000 409,883 Balance, December 31, 2021 10,733 (1,774) 8,959 400,000 408,959 Amortization expense — (413) (413) — (413) Currency translation adjustments 335 (57) 278 — 278 Balance, June 30, 2022 $ 11,068 $ (2,244) $ 8,824 $ 400,000 $ 408,824 Weighted-average useful life (in years) 14 |
OTHER INVESTMENTS
OTHER INVESTMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
OTHER INVESTMENTS | OTHER INVESTMENTS The following table presents our Other investments, net : As of June 30, 2022 December 31, 2021 Other investments, net: Equity method investments $ 86,210 $ 91,226 Total other investments, net $ 86,210 $ 91,226 Equity Method Investments 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. Financial Information for Our Equity Method Investments The following table presents revenue recognized: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Deluxe $ 1,335 $ 1,229 $ 2,658 $ 2,860 BCS $ 1,950 $ 2,766 $ 3,721 $ 4,114 The following table presents trade accounts receivable: As of June 30, 2022 December 31, 2021 Deluxe $ 1,769 $ 934 BCS $ 7,507 $ 5,544 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 700,170 $ 750,000 $ 825,555 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 673,238 750,000 838,740 Less: Unamortized debt issuance costs (3,621) — (4,006) — Total long-term debt, net $ 1,496,379 $ 1,373,408 $ 1,495,994 $ 1,664,295 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
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. |
RELATED PARTY TRANSACTIONS - EC
RELATED PARTY TRANSACTIONS - ECHOSTAR | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - ECHOSTAR | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $1.9 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $4.5 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - EchoStar $ 4,739 $ 5,401 $ 10,016 $ 10,772 The following table presents the corresponding related party receivables: As of June 30, 2022 December 31, 2021 Related party receivables - EchoStar - current $ 120,258 $ 122,619 Related party receivables - EchoStar - non-current 52,118 56,055 Total related party receivables - EchoStar $ 172,376 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - EchoStar $ 17,829 $ 15,798 $ 35,359 $ 31,185 The following table presents the corresponding related party payables: As of June 30, 2022 December 31, 2021 Related party payables - EchoStar - current $ 124,382 $ 124,578 Related party payables - EchoStar - non-current 23,154 24,118 Total related party payables - EchoStar $ 147,536 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $4.7 million and $5.4 million for the three months ended June 30, 2022 and 2021, respectively, and $10.0 million and $10.8 million for the six months ended June 30, 2022 and 2021, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the first half of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.4 million and $0.5 million for the three months ended June 30, 2022 and 2021, respectively, and $0.7 million and $0.9 million for the six months ended June 30, 2022 and 2021, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar Corporation 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 Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its 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 (“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 joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“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) Merger Sub merged with and into BSS Corp. (the “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 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries 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 and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - DISH Network $ 4,519 $ 5,667 $ 9,331 $ 11,394 The following table presents the related trade accounts receivable: As of June 30, 2022 December 31, 2021 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. 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. 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 EchoStar’s 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - DISH Network $ 1,110 $ 1,467 $ 2,204 $ 2,566 The following table presents the related trade accounts payable: As of June 30, 2022 December 31, 2021 Trade accounts payable - DISH Network $ 570 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 11. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. 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 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 satellite internet service (the “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 2023 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 $1.9 million and $1.9 million for the three months ended June 30, 2022 and 2021, respectively, and $3.6 million and $3.8 million for the six months ended June 30, 2022 and 2021, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. 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. 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 will provide 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. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ 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 EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries 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, EchoStar and its subsidiaries 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 EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar 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 EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar 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 0.23523769 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 the parties, including EchoStar’s 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. EchoStar 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 Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar 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 EchoStar is 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 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries 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, EchoStar and certain of its and our subsidiaries 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 EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar 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 EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes C |
RELATED PARTY TRANSACTIONS - DI
RELATED PARTY TRANSACTIONS - DISH NETWORK | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - DISH NETWORK | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $1.9 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $4.5 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - EchoStar $ 4,739 $ 5,401 $ 10,016 $ 10,772 The following table presents the corresponding related party receivables: As of June 30, 2022 December 31, 2021 Related party receivables - EchoStar - current $ 120,258 $ 122,619 Related party receivables - EchoStar - non-current 52,118 56,055 Total related party receivables - EchoStar $ 172,376 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - EchoStar $ 17,829 $ 15,798 $ 35,359 $ 31,185 The following table presents the corresponding related party payables: As of June 30, 2022 December 31, 2021 Related party payables - EchoStar - current $ 124,382 $ 124,578 Related party payables - EchoStar - non-current 23,154 24,118 Total related party payables - EchoStar $ 147,536 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $4.7 million and $5.4 million for the three months ended June 30, 2022 and 2021, respectively, and $10.0 million and $10.8 million for the six months ended June 30, 2022 and 2021, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the first half of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.4 million and $0.5 million for the three months ended June 30, 2022 and 2021, respectively, and $0.7 million and $0.9 million for the six months ended June 30, 2022 and 2021, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar Corporation 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 Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its 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 (“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 joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“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) Merger Sub merged with and into BSS Corp. (the “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 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries 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 and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - DISH Network $ 4,519 $ 5,667 $ 9,331 $ 11,394 The following table presents the related trade accounts receivable: As of June 30, 2022 December 31, 2021 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. 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. 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 EchoStar’s 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - DISH Network $ 1,110 $ 1,467 $ 2,204 $ 2,566 The following table presents the related trade accounts payable: As of June 30, 2022 December 31, 2021 Trade accounts payable - DISH Network $ 570 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 11. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. 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 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 satellite internet service (the “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 2023 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 $1.9 million and $1.9 million for the three months ended June 30, 2022 and 2021, respectively, and $3.6 million and $3.8 million for the six months ended June 30, 2022 and 2021, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. 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. 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 will provide 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. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ 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 EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries 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, EchoStar and its subsidiaries 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 EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar 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 EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar 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 0.23523769 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 the parties, including EchoStar’s 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. EchoStar 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 Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar 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 EchoStar is 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 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries 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, EchoStar and certain of its and our subsidiaries 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 EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar 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 EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes C |
RELATED PARTY TRANSACTIONS - OT
RELATED PARTY TRANSACTIONS - OTHER | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS - OTHER | RELATED PARTY TRANSACTIONS - ECHOSTARThe following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Shared Corporate Services. We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange (as defined below), we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days’ notice. We recorded these expenses within Operating expenses - EchoStar for shared corporate services received from EchoStar and its other subsidiaries of $1.9 million and $0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $4.5 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively. Services and Other Revenue — EchoStar The following table presents our Services and other revenue from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - EchoStar $ 4,739 $ 5,401 $ 10,016 $ 10,772 The following table presents the corresponding related party receivables: As of June 30, 2022 December 31, 2021 Related party receivables - EchoStar - current $ 120,258 $ 122,619 Related party receivables - EchoStar - non-current 52,118 56,055 Total related party receivables - EchoStar $ 172,376 $ 178,674 Receivables. EchoStar and its other subsidiaries reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report receivables under these arrangements within Related party receivables - EchoStar - current. No repayment schedule for these receivables has been determined. Operating Expenses — EchoStar The following table presents our operating expenses from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - EchoStar $ 17,829 $ 15,798 $ 35,359 $ 31,185 The following table presents the corresponding related party payables: As of June 30, 2022 December 31, 2021 Related party payables - EchoStar - current $ 124,382 $ 124,578 Related party payables - EchoStar - non-current 23,154 24,118 Total related party payables - EchoStar $ 147,536 $ 148,696 Payables. We reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us. We report payables under these arrangements within Related party payables - EchoStar - current. No repayment schedule for these payables has been determined. Real Estate. We occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. Cash Advances. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2022. Advances under these agreements bear interest at annual rates ranging from one to three percent, subject to periodic adjustment based on the one-year U.S. LIBOR rate. We report amounts payable under these agreements within Related party payables - EchoStar - non-current. BSS Transaction . Pursuant to the pre-closing restructuring contemplated by the Master Transaction Agreement (as defined below), and as part of the BSS Transaction (as defined below), we and our subsidiaries transferred certain of the BSS Business (as defined below) to BSS Corp. (as defined below), and we distributed all of the shares of BSS Corp. to EchoStar as a dividend. EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the EU to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s other subsidiaries pay for these services are based on cost plus a fixed margin. We recorded revenue in Services and other revenue of $4.7 million and $5.4 million for the three months ended June 30, 2022 and 2021, respectively, and $10.0 million and $10.8 million for the six months ended June 30, 2022 and 2021, respectively, related to these services. Additionally, we have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5%, that mature in 2023. We report these loans within Related party receivables - EchoStar - non-current. Construction Management Services for EchoStar XXIV satellite. In August 2017, a subsidiary of EchoStar entered into a contract with Maxar Space, LLC (formerly Space Systems/Loral, LLC), for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with an expected launch in the first half of 2023. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar’s subsidiary and reduced our operating expenses by the costs of such services of $0.4 million and $0.5 million for the three months ended June 30, 2022 and 2021, respectively, and $0.7 million and $0.9 million for the six months ended June 30, 2022 and 2021, respectively. Dividends. On March 17, 2022, our Board of Directors declared and approved payment of a cash dividend on our outstanding common stock to our shareholder and parent, EchoStar, in the amount of $100.0 million. Payment of this dividend was made in the first quarter of 2022. Overview EchoStar Corporation 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 Corporation and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established for the benefit of his family. In January 2017, EchoStar and certain of its 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 (“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 joint venture Dish Mexico, S. de R.L. de C.V. and its subsidiaries (“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) Merger Sub merged with and into BSS Corp. (the “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 0.23523769 shares of DISH Class A common stock, par value $0.001 per share (“DISH Common Stock”) ((i) - (iii) collectively, the “BSS Transaction”). In connection with and following the Spin-off, the Share Exchange and the BSS Transaction, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH Network entered into certain agreements pursuant to which we, EchoStar and certain of its other subsidiaries, on the one hand, obtain certain products, services and rights from DISH Network, on the other hand; DISH Network, on the one hand, obtains certain products, services and rights from us, EchoStar and certain of its other subsidiaries, on the other hand; and such entities indemnify each other against certain liabilities arising from their respective businesses. Generally, the amounts we and/or EchoStar and its other subsidiaries 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 and/or EchoStar and its other subsidiaries may also enter into additional agreements with DISH Network in the future. The following is a summary of the transactions and the terms of the underlying principal agreements that have had or may have an impact on our consolidated financial condition and results of operations. Services and Other Revenue — DISH Network The following table presents our Services and other revenue - DISH Network : For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - DISH Network $ 4,519 $ 5,667 $ 9,331 $ 11,394 The following table presents the related trade accounts receivable: As of June 30, 2022 December 31, 2021 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 Satellite Capacity Leased to DISH Network. Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. 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. 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 EchoStar’s 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. Hughes Equipment and Services Agreement . In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. Operating Expenses — DISH Network The following table presents our operating expenses related to DISH Network: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - DISH Network $ 1,110 $ 1,467 $ 2,204 $ 2,566 The following table presents the related trade accounts payable: As of June 30, 2022 December 31, 2021 Trade accounts payable - DISH Network $ 570 $ 587 Amended and Restated Professional Services Agreement . In connection with the Spin-off, EchoStar entered into various agreements with DISH Network including a transition services agreement, satellite procurement agreement and services agreement, all of which expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas (collectively, the “TT&C Antennas”). In September 2019, in connection with the BSS Transaction, EchoStar and DISH further amended the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the BSS Transaction and to remove our access to and the maintenance and support services for the TT&C Antennas. A portion of these costs and expenses have been allocated to us in the manner described in Note 11. Related Party Transactions - EchoStar. The term of the Amended and Restated Professional Services Agreement is through January 1, 2023 and renews automatically for successive one-year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days’ notice. However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days’ notice, unless the statement of work for particular services states otherwise. Certain services provided under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. 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 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 satellite internet service (the “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 2023 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 $1.9 million and $1.9 million for the three months ended June 30, 2022 and 2021, respectively, and $3.6 million and $3.8 million for the six months ended June 30, 2022 and 2021, respectively. 2019 TT&C Agreement . In September 2019, in connection with the BSS Transaction, we and a subsidiary of EchoStar entered into an agreement pursuant to which DISH Network provides TT&C services to us and EchoStar and its other subsidiaries for a period ending in September 2021, with the option for a subsidiary of EchoStar to renew for a one-year period upon written notice at least 90 days prior to the initial expiration (the “2019 TT&C Agreement”). In June 2021, we amended the 2019 TT&C Agreement to extend the term until September 2022 and added the option for us to renew the 2019 TT&C Agreement up to an additional three years. 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. 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 will provide 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. Other Receivables - DISH Network Tax Sharing Agreement. Effective December 2007, EchoStar and DISH Network entered into a tax sharing agreement (the “Tax Sharing Agreement”) in connection with the Spin-off. This agreement governs EchoStar and DISH and their respective subsidiaries’ 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 EchoStar and its subsidiaries for such taxes. However, DISH Network is not liable for and does not indemnify EchoStar or its subsidiaries for any taxes that are incurred as a result of the Spin-off or certain related transactions failing to qualify as tax-free distributions pursuant to any provision of Section 355 or Section 361 of the Internal Revenue Code of 1986, as amended (the “Code”), because of: (i) a direct or indirect acquisition of any of EchoStar’s stock, stock options or assets; (ii) any action that EchoStar or its subsidiaries take or fail to take or (iii) any action that EchoStar or its subsidiaries 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, EchoStar and its subsidiaries 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 EchoStar’s consolidated federal income tax returns for certain tax years prior to and for the year of the Spin-off, in September 2013, EchoStar 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 EchoStar’s consolidated tax returns. As a result, DISH Network agreed to pay EchoStar an amount that includes the federal tax benefit DISH received as a result of our operations. In August 2018, EchoStar and DISH Network amended the Tax Sharing Agreement and the 2013 agreements (the “Tax Sharing Amendment”). Under the Tax Sharing Amendment, DISH Network is required to compensate EchoStar for certain past and future excess California research and development tax credits generated by EchoStar and its subsidiaries and used by DISH Network. Master Transaction Agreement. In May 2019, EchoStar and BSS Corp. entered into the Master Transaction Agreement with DISH and Merger Sub with respect to the BSS Transaction. Pursuant to the terms of the Master Transaction Agreement, on September 10, 2019: (i) EchoStar and its subsidiaries and we and our subsidiaries transferred the BSS Business to BSS Corp.; (ii) EchoStar 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 0.23523769 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 the parties, including EchoStar’s 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. EchoStar 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 Tax Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar, BSS Corp. and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and its subsidiaries’ with respect to taxes of the BSS Business transferred pursuant to the BSS Transaction. Generally, EchoStar is responsible for all tax returns and tax liabilities for the BSS Business for periods prior to the BSS Transaction and DISH is responsible for all tax returns and tax liabilities for the BSS Business from and after the BSS Transaction. Both EchoStar and DISH made certain tax-related representations and are subject to various tax-related covenants after the consummation of the BSS Transaction. Both EchoStar and DISH Network have agreed to indemnify each other for certain losses if there is a breach of any the tax representations or violation of any of the tax covenants in the tax matters agreement and that breach or violation results in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar or its stockholders for U.S. federal income tax purposes. In addition, DISH Network has agreed to indemnify EchoStar if the BSS Business is acquired, either directly or indirectly (e.g., via an acquisition of DISH Network), by one or more persons, where either it took an action, or knowingly facilitated, consented to or assisted with an action by its stockholders, that resulted in the failure of the BSS Transaction being treated as a transaction that is tax-free for EchoStar and its stockholders for U.S. federal income tax purposes. This tax matters agreement supplements the Tax Sharing Agreement outlined above and the Share Exchange Tax Matters Agreement outlined below, both of which continue in full force and effect. BSS Transaction Employee Matters Agreement. Effective September 2019, in connection with the BSS Transaction, EchoStar 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 EchoStar is 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 EchoStar consummated the Share Exchange, following which EchoStar and certain of its and our subsidiaries 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, EchoStar and certain of its and our subsidiaries 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 EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. EchoStar 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 EchoStar or DISH causes the transaction to be taxable to the other party after closing. Hughes Systique Corporation We contract with Hughes Systique Corporation (“Hughes Systique”) for software development services. In addition to our approximately 42% ownership in Hughes Systique, Mr. Pradman Kaul, the President of our subsidiary Hughes C |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
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. 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 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. Shareholder Litigation On July 2, 2019, the City of Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, purporting to sue on behalf of a class of EchoStar Corporation’s stockholders, filed a complaint in the District Court of Clark County, Nevada against EchoStar’s directors, Charles W. Ergen, R. Stanton Dodge, Anthony M. Federico, Pradman P. Kaul, C. Michael Schroeder, Jeffrey R. Tarr, William D. Wade, and Michael T. Dugan; our chief financial officer, David J. Rayner; EchoStar; HSSC; our former subsidiary BSS Corp.; and DISH and its subsidiary Merger Sub. On September 5, 2019, the defendants filed motions to dismiss. On October 11, 2019, the plaintiffs filed an amended complaint removing Messrs. Dodge, Federico, Kaul, Schroeder, Tarr and Wade as defendants. The amended complaint alleges that Mr. Ergen, as our controlling stockholder, breached fiduciary duties to EchoStar’s minority stockholders by structuring the BSS Transaction with inadequate consideration and improperly influencing our and EchoStar’s boards of directors to approve the BSS Transaction. The amended complaint also alleges that the other defendants aided and abetted such alleged breaches. The plaintiffs seek equitable and monetary relief, including the issuance of additional DISH Common Stock, and other costs and disbursements, including attorneys’ fees on behalf of the purported class. On November 11, 2019, we and the other defendants filed separate motions to dismiss plaintiff’s amended complaint and during a hearing on January 13, 2020 the court denied these motions. On February 10, 2020, we and the other defendants filed answers to the amended complaint. The Court certified plaintiff’s class on January 11, 2021. On June 18, 2021, the parties executed a settlement agreement to resolve all claims in this case. On the same day, the parties filed a joint motion for preliminary approval of the settlement agreement. The motion was granted by an order dated July 30, 2021. On December 9, 2021, the Court held a final settlement hearing. On December 10, 2021, the Court issued an Order granting final approval of the settlement agreement. The case is expected to be dismissed once the Court approves a class distribution order. 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 March 31, 2021 and March 31, 2022. The following table presents the components of the accrual: As of June 30, 2022 December 31, 2021 Additional license fees $ 3,596 $ 3,812 Penalties 3,691 3,912 Interest and interest on penalties 79,555 81,389 Less: Payments (18,671) (8,451) Total accrual $ 68,171 $ 80,662 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 | 6 Months Ended |
Jun. 30, 2022 | |
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 Consolidated For the three months ended June 30, 2022 External revenue $ 491,841 $ 4,502 $ 4,740 $ 501,083 Intersegment revenue — 348 (348) — Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 Capital expenditures $ 64,861 $ — $ — $ 64,861 EBITDA $ 179,928 $ 3,521 $ (11,430) $ 172,019 For the three months ended June 30, 2021 External revenue $ 492,276 $ 4,195 $ 5,402 $ 501,873 Intersegment revenue — 88 (88) — Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 Capital expenditures $ 72,187 $ — $ — $ 72,187 EBITDA $ 210,194 $ 2,243 $ (8,444) $ 203,993 Hughes ESS Corporate Consolidated For the six months ended June 30, 2022 External revenue $ 985,947 $ 8,778 $ 10,016 $ 1,004,741 Intersegment revenue — 546 (546) — Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 Capital expenditures $ 125,882 $ — $ — $ 125,882 EBITDA $ 371,098 $ 6,212 $ (22,086) $ 355,224 For the six months ended June 30, 2021 External revenue $ 968,136 $ 8,196 $ 10,771 $ 987,103 Intersegment revenue — 176 (176) — Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 Capital expenditures $ 154,382 $ — $ — $ 154,382 EBITDA $ 408,772 $ 4,162 $ (17,535) $ 395,399 The following table reconciles Income (loss) before income taxes in the Consolidated Statements of Operations to EBITDA: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Income (loss) before income taxes $ 39,944 $ 54,009 $ 85,885 $ 82,276 Interest income, net (4,279) (1,682) (6,559) (4,076) Interest expense, net of amounts capitalized 23,096 37,083 46,474 79,005 Depreciation and amortization 109,864 112,303 223,542 234,967 Net loss (income) attributable to non-controlling interests 3,394 2,280 5,882 3,227 EBITDA $ 172,019 $ 203,993 $ 355,224 $ 395,399 |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 December 31, 2021 Other current assets, net: Related party receivables - EchoStar 120,258 122,619 Inventory 110,399 102,907 Prepaids and deposits 21,637 27,737 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 Other, net 16,318 20,124 Total other current assets $ 272,684 $ 276,844 Other non-current assets, net: Capitalized software, net $ 120,421 $ 124,701 Contract acquisition costs, net 74,702 82,986 Related party receivables - EchoStar 52,118 56,055 Deferred tax assets, net 5,302 5,411 Restricted cash 2,053 980 Contract fulfillment costs, net 1,589 1,721 Other, net 32,962 30,986 Total other non-current assets, net $ 289,147 $ 302,840 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 June 30, 2022 December 31, 2021 Accrued expenses and other current liabilities: Related party payables - EchoStar $ 124,382 $ 124,578 Accrued compensation 38,336 45,630 Operating lease obligation 17,236 16,697 Accrued interest 38,334 39,289 Accrued taxes 10,959 9,790 Accrual for license fee dispute 10,699 11,178 Trade accounts payable - DISH Network 570 587 Other 58,786 61,130 Total accrued expenses and other current liabilities $ 299,302 $ 308,879 Other non-current liabilities: Accrual for license fee dispute 57,472 69,484 Related party payables - EchoStar $ 23,154 $ 24,118 Contract liabilities 9,922 10,669 Other 47,741 48,980 Total other non-current liabilities $ 138,289 $ 153,251 Inventory The following table presents the components of inventory: As of June 30, 2022 December 31, 2021 Raw materials $ 21,495 $ 13,778 Work-in-process 15,078 11,705 Finished goods 73,826 77,424 Total inventory $ 110,399 $ 102,907 Supplemental and Non-cash Investing and Financing Activities The following table presents the supplemental and non-cash investing and financing activities: For the six months ended June 30, 2022 2021 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 49,845 $ 75,947 Cash paid for income taxes $ 6,173 $ 3,741 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ (8,563) $ 8,333 Non-cash net assets received as part of the India JV formation $ 36,701 $ — |
SUPPLEMENTAL GUARANTOR AND NON-
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION Certain of our wholly-owned subsidiaries (together, the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the obligations of our 5 1/4% Senior Secured Notes due August 1, 2026 and 6 5/8% Senior Unsecured Notes due August 1, 2026 (collectively, the “Notes”). The indentures governing the Notes contain restrictive covenants that, among other things, impose limitations on our ability and the ability of certain of our subsidiaries to pay dividends or make distributions, incur additional debt, make certain investments, create liens or enter into sale and leaseback transactions, merge or consolidate with another company, transfer and sell assets, enter into transactions with affiliates or allow to exist certain restrictions on the ability of certain of our subsidiaries to pay dividends, make distributions, make other payments, or transfer assets to us. In lieu of separate financial statements of the Guarantor Subsidiaries, we have prepared the accompanying consolidating financial information in accordance with Rule 3-10(f) of Regulation S-X. This includes: • the accompanying balance sheet; • the accompanying statement of operations and comprehensive income (loss); and • the accompanying statement of cash flows. This also includes consolidating financial information as follows: • the Guarantor Subsidiaries on a combined basis; • the non-guarantor subsidiaries of HSSC on a combined basis; and • the eliminations necessary to arrive at the corresponding information of HSSC on a consolidated basis. This accompanying consolidating financial information should be read in conjunction with these Consolidated Financial Statements. Consolidating Balance Sheet as of June 30, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 837,441 $ 19,791 $ 67,680 $ — $ 924,912 Marketable investment securities 354,184 — 6,464 — 360,648 Trade accounts receivable and contract assets, net — 158,861 65,154 — 224,015 Other current assets, net 65,548 1,204,000 217,557 (1,214,421) 272,684 Total current assets 1,257,173 1,382,652 356,855 (1,214,421) 1,782,259 Non-current assets: Property and equipment, net — 1,164,939 287,523 — 1,452,462 Operating lease right-of-use assets — 122,655 28,381 — 151,036 Goodwill — 504,173 29,332 — 533,505 Regulatory authorizations, net — 400,000 8,824 — 408,824 Other intangible assets, net — 13,241 3,777 — 17,018 Other investments, net — 8,039 78,171 — 86,210 Investment in subsidiaries 3,212,854 336,417 — (3,549,271) — Other non-current assets, net 1,180 285,181 158,565 (155,779) 289,147 Total non-current assets 3,214,034 2,834,645 594,573 (3,705,050) 2,938,202 Total assets $ 4,471,207 $ 4,217,297 $ 951,428 $ (4,919,471) $ 4,720,461 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 89,909 $ 11,219 $ — $ 101,128 Contract liabilities — 130,241 4,615 — 134,856 Accrued expenses and other current liabilities 1,012,002 216,435 285,286 (1,214,421) 299,302 Total current liabilities 1,012,002 436,585 301,120 (1,214,421) 535,286 Non-current liabilities: Long-term debt, net 1,496,379 — — 1,496,379 Deferred tax liabilities, net — 337,589 12,822 (649) 349,762 Operating lease liabilities — 112,850 23,742 — 136,592 Other non-current liabilities — 117,980 175,439 (155,130) 138,289 Total non-current liabilities 1,496,379 568,419 212,003 (155,779) 2,121,022 Total liabilities 2,508,381 1,005,004 513,123 (1,370,200) 2,656,308 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 1,962,826 3,212,293 336,978 (3,549,271) 1,962,826 Non-controlling interests — — 101,327 — 101,327 Total shareholder's equity 1,962,826 3,212,293 438,305 (3,549,271) 2,064,153 Total liabilities and shareholder's equity $ 4,471,207 $ 4,217,297 $ 951,428 $ (4,919,471) $ 4,720,461 Consolidating Balance Sheet as of December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 324,764 $ 42,550 $ 61,854 $ — $ 429,168 Marketable investment securities 854,502 — — — 854,502 Trade accounts receivable and contract assets, net — 127,350 54,713 — 182,063 Other current assets, net 170,283 1,056,871 94,185 (1,044,495) 276,844 Total current assets 1,349,549 1,226,771 210,752 (1,044,495) 1,742,577 Non-current assets: Property and equipment, net — 1,209,859 313,588 — 1,523,447 Operating lease right-of-use assets — 117,912 30,309 — 148,221 Goodwill — 504,173 6,913 — 511,086 Regulatory authorizations, net — 400,000 8,959 — 408,959 Other intangible assets, net — 13,984 — — 13,984 Other investments, net — 9,600 81,626 — 91,226 Investment in subsidiaries 3,126,926 292,211 — (3,419,137) — Other non-current assets, net 1,191 299,149 97,305 (94,805) 302,840 Total non-current assets 3,128,117 2,846,888 538,700 (3,513,942) 2,999,763 Total assets $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 92,156 $ 13,321 $ — $ 105,477 Contract liabilities — 134,474 6,869 — 141,343 Accrued expenses and other current liabilities 972,936 218,463 161,975 (1,044,495) 308,879 Total current liabilities 972,936 445,093 182,165 (1,044,495) 555,699 Non-current liabilities: Long-term debt, net 1,495,994 — — — 1,495,994 Deferred tax liabilities, net — 334,148 258 — 334,406 Operating lease liabilities — 108,431 25,570 — 134,001 Other non-current liabilities — 59,623 188,432 (94,804) 153,251 Total non-current liabilities 1,495,994 502,202 214,260 (94,804) 2,117,652 Total liabilities 2,468,930 947,295 396,425 (1,139,299) 2,673,351 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,008,736 3,126,364 292,774 (3,419,138) 2,008,736 Non-controlling interests — — 60,253 — 60,253 Total shareholder's equity 2,008,736 3,126,364 353,027 (3,419,138) 2,068,989 Total liabilities and shareholder's equity $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 340,844 $ 81,718 $ (6,099) $ 416,463 Equipment revenue — 83,557 5,247 (4,184) 84,620 Total revenue — 424,401 86,965 (10,283) 501,083 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 106,689 42,687 (6,760) 142,616 Cost of sales - equipment (exclusive of depreciation and amortization) — 69,716 3,408 (3,076) 70,048 Selling, general and administrative expenses — 84,969 22,303 (447) 106,825 Research and development expenses — 8,680 85 — 8,765 Depreciation and amortization — 72,661 37,203 — 109,864 Total costs and expenses — 342,715 105,686 (10,283) 438,118 Operating income (loss) — 81,686 (18,721) — 62,965 Other income (expense): Interest income, net 3,185 1,357 1,014 (1,277) 4,279 Interest expense, net of amounts capitalized (22,460) 955 (2,868) 1,277 (23,096) Gains (losses) on investments, net (3) 217 — — 214 Equity in earnings (losses) of unconsolidated affiliates, net — 338 (1,639) — (1,301) Equity in earnings (losses) of subsidiaries, net 43,364 (25,206) — (18,158) — Foreign currency transaction gains (losses), net — 2,910 (5,788) — (2,878) Other, net — (216) (23) — (239) Total other income (expense), net 24,086 (19,645) (9,304) (18,158) (23,021) Income (loss) before income taxes 24,086 62,041 (28,025) (18,158) 39,944 Income tax benefit (provision), net 4,408 (18,677) (575) — (14,844) Net income (loss) 28,494 43,364 (28,600) (18,158) 25,100 Less: Net loss (income) attributable to non-controlling interests — — 3,394 — 3,394 Net income (loss) attributable to HSSC $ 28,494 $ 43,364 $ (25,206) $ (18,158) $ 28,494 Comprehensive income (loss): Net income (loss) from continuing operations $ 28,494 $ 43,364 $ (28,600) $ (18,158) $ 25,100 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (39,143) — (39,143) Unrealized gains (losses) on available-for-sale securities (46) — — — (46) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale securities 3 — — — 3 Equity in other comprehensive income (loss) of subsidiaries, net (32,150) (32,150) — 64,300 — Total other comprehensive income (loss), net of tax (32,193) (32,150) (39,143) 64,300 (39,186) Comprehensive income (loss) (3,699) 11,214 (67,743) 46,142 (14,086) Less: Comprehensive loss (income) attributable to non-controlling interests — — 10,387 — 10,387 Comprehensive income (loss) attributable to HSSC $ (3,699) $ 11,214 $ (57,356) $ 46,142 $ (3,699) Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 361,700 $ 79,919 $ (8,302) $ 433,317 Equipment revenue — 78,619 6,148 (16,211) 68,556 Total revenue — 440,319 86,067 (24,513) 501,873 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 105,836 41,278 (9,564) 137,550 Cost of sales - equipment (exclusive of depreciation and amortization) — 64,342 4,694 (14,534) 54,502 Selling, general and administrative expenses — 81,512 22,919 (415) 104,016 Research and development expenses — 7,276 165 — 7,441 Depreciation and amortization — 82,443 29,860 — 112,303 Total costs and expenses — 341,409 98,916 (24,513) 415,812 Operating income (loss) — 98,910 (12,849) — 86,061 Other income (expense): Interest income, net 876 1,306 729 (1,229) 1,682 Interest expense, net of amounts capitalized (35,484) 261 (3,089) 1,229 (37,083) Gains (losses) on investments, net (6) 2,100 — — 2,094 Equity in earnings (losses) of unconsolidated affiliates, net — 406 (1,675) — (1,269) Equity in earnings (losses) of subsidiaries, net 65,004 (14,747) — (50,257) — Foreign currency transaction gains (losses), net — (16) 551 — 535 Other, net (357) 2,410 (64) — 1,989 Total other income (expense), net 30,033 (8,280) (3,548) (50,257) (32,052) Income (loss) before income taxes 30,033 90,630 (16,397) (50,257) 54,009 Income tax benefit (provision), net 7,907 (25,626) (630) — (18,349) Net income (loss) 37,940 65,004 (17,027) (50,257) 35,660 Less: Net loss (income) attributable to non-controlling interests — — 2,280 — 2,280 Net income (loss) attributable to HSSC $ 37,940 $ 65,004 $ (14,747) $ (50,257) $ 37,940 Comprehensive income (loss): Net income (loss) from continuing operations $ 37,940 $ 65,004 $ (17,027) $ (50,257) $ 35,660 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 42,060 — 42,060 Unrealized gains (losses) on available-for-sale securities 118 — — — 118 Equity in other comprehensive income (loss) of subsidiaries, net 33,720 33,720 — (67,440) — Total other comprehensive income (loss), net of tax 33,838 33,720 42,060 (67,440) 42,178 Comprehensive income (loss) 71,778 98,724 25,033 (117,697) 77,838 Less: Comprehensive loss (income) attributable to non-controlling interests — — (6,060) — (6,060) Comprehensive income (loss) attributable to HSSC $ 71,778 $ 98,724 $ 18,973 $ (117,697) $ 71,778 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Six Months Ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 685,122 $ 164,401 $ (12,119) $ 837,404 Equipment revenue — 166,542 11,280 (10,485) 167,337 Total revenue — 851,664 175,681 (22,604) 1,004,741 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 212,310 84,544 (14,884) 281,970 Cost of sales - equipment (exclusive of depreciation and amortization) — 139,134 6,841 (6,822) 139,153 Selling, general and administrative expenses — 175,603 43,738 (898) 218,443 Research and development expenses — 16,216 165 — 16,381 Depreciation and amortization — 150,967 72,575 — 223,542 Total costs and expenses — 694,230 207,863 (22,604) 879,489 Operating income (loss) — 157,434 (32,182) — 125,252 Other income (expense): Interest income 4,311 2,702 2,087 (2,541) 6,559 Interest expense, net of amounts capitalized (44,917) 1,779 (5,877) 2,541 (46,474) Gains (losses) on investments, net (3) 217 — — 214 Equity in earnings (losses) of unconsolidated affiliates, net — 440 (3,455) — (3,015) Equity in earnings (losses) of subsidiaries, net 93,120 (35,048) — (58,072) — Foreign currency transaction gains (losses), net — 3,807 (30) — 3,777 Other, net — (271) (157) — (428) Total other income (expense), net 52,511 (26,374) (7,432) (58,072) (39,367) Income (loss) before income taxes 52,511 131,060 (39,614) (58,072) 85,885 Income tax benefit (provision), net 9,284 (37,940) (1,316) — (29,972) Net income (loss) 61,795 93,120 (40,930) (58,072) 55,913 Less: Net loss (income) attributable to non-controlling interests — — 5,882 — 5,882 Net income (loss) attributable to HSSC $ 61,795 $ 93,120 $ (35,048) $ (58,072) $ 61,795 Comprehensive income (loss): Net income (loss) $ 61,795 $ 93,120 $ (40,930) $ (58,072) $ 55,913 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 7,543 — 7,543 Unrealized gains (losses) on available-for-sale securities (516) — — — (516) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities 3 — — — 3 Equity in other comprehensive income (loss) of subsidiaries, net 4,980 4,980 — (9,960) — Total other comprehensive income (loss), net of tax 4,467 4,980 7,543 (9,960) 7,030 Comprehensive income (loss) 66,262 98,100 (33,387) (68,032) 62,943 Less: Comprehensive loss (income) attributable to non-controlling interests — — 3,319 — 3,319 Comprehensive income (loss) attributable to HSSC $ 66,262 $ 98,100 $ (30,068) $ (68,032) $ 66,262 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Six Months Ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 725,397 $ 157,622 $ (16,711) $ 866,308 Equipment revenue — 139,656 14,194 (33,055) 120,795 Total revenue — 865,053 171,816 (49,766) 987,103 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 209,043 77,507 (17,588) 268,962 Cost of sales - equipment (exclusive of depreciation and amortization) — 120,772 10,063 (31,193) 99,642 Selling, general and administrative expenses — 165,055 44,316 (985) 208,386 Research and development expenses — 14,634 352 — 14,986 Depreciation and amortization — 176,695 58,272 — 234,967 Impairment of long-lived assets — 210 — — 210 Total costs and expenses — 686,409 190,510 (49,766) 827,153 Operating income (loss) — 178,644 (18,694) — 159,950 Other income (expense): Interest income, net 1,912 2,593 2,010 (2,439) 4,076 Interest expense, net of amounts capitalized (75,728) 306 (6,022) 2,439 (79,005) Gains (losses) on investments, net (6) 2,100 — — 2,094 Equity in earnings (losses) of unconsolidated affiliates, net — 625 (3,655) — (3,030) Equity in earnings (losses) of subsidiaries, net 115,147 (27,364) — (87,783) — Foreign currency transaction gains (losses), net — (19) (2,806) — (2,825) Other, net (1,939) 3,154 (199) — 1,016 Total other income (expense), net 39,386 (18,605) (10,672) (87,783) (77,674) Income (loss) before income taxes 39,386 160,039 (29,366) (87,783) 82,276 Income tax benefit (provision), net 17,131 (44,892) (1,225) — (28,986) Net income (loss) 56,517 115,147 (30,591) (87,783) 53,290 Less: Net loss (income) attributable to non-controlling interests — — 3,227 — 3,227 Net income (loss) attributable to HSSC $ 56,517 $ 115,147 $ (27,364) $ (87,783) $ 56,517 Comprehensive income (loss): Net income (loss) $ 56,517 $ 115,147 $ (30,591) $ (87,783) $ 53,290 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 8,318 — 8,318 Unrealized gains (losses) on available-for-sale securities 30 — — — 30 Amounts reclassified to net income (loss): Equity in other comprehensive income (loss) of subsidiaries, net 5,588 5,588 — (11,176) — Total other comprehensive income (loss), net of tax 5,618 5,588 8,318 (11,176) 8,348 Comprehensive income (loss) 62,135 120,735 (22,273) (98,959) 61,638 Less: Comprehensive loss (income) attributable to non-controlling interests — — 497 — 497 Comprehensive income (loss) attributable to HSSC $ 62,135 $ 120,735 $ (21,776) $ (98,959) $ 62,135 Consolidating Statement of Cash Flows For the Six months ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ 61,795 $ 93,120 $ (40,930) $ (58,072) $ 55,913 Adjustments to reconcile net income (loss) to net cash flows from operating activities (90,384) 142,006 86,303 58,072 195,997 Net cash provided by (used for) operating activities (28,589) 235,126 45,373 — 251,910 Cash flows from investing activities: Purchases of marketable investment securities (164,541) — (6,464) — (171,005) Sales and maturities of marketable investment securities 662,347 — — — 662,347 Expenditures for property and equipment — (94,658) (31,224) — (125,882) Expenditures for externally marketed software — (11,967) — — (11,967) Distributions (contributions) and advances from (to) subsidiaries, net 143,460 — — (143,460) — India JV formation — (7,892) — — (7,892) Dividend received from unconsolidated affiliate — 2,000 — — 2,000 Net cash provided by (used for) investing activities 641,266 (112,517) (37,688) (143,460) 347,601 Cash flows from financing activities: Payment of finance lease obligations — — (114) — (114) Payment of in-orbit incentive obligations — (1,908) — — (1,908) Dividend paid to EchoStar (100,000) — — — (100,000) Contribution (distributions) and advances (to) from parent, net — (143,460) — 143,460 — Net cash provided by (used for) financing activities (100,000) (145,368) (114) 143,460 (102,022) Effect of exchange rates on cash and cash equivalents — — (672) — (672) Net increase (decrease) in cash and cash equivalents 512,677 (22,759) 6,899 — 496,817 Cash and cash equivalents, including restricted amounts, beginning of period 324,764 42,550 62,834 — 430,148 Cash and cash equivalents, including restricted amounts, end of period $ 837,441 $ 19,791 $ 69,733 $ — $ 926,965 Consolidating Statement of Cash Flows For the Six months ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 56,517 $ 115,147 $ (30,591) $ (87,783) $ 53,290 Adjustments to reconcile net income (loss) to net cash flows from operating activities (129,770) 244,556 63,527 87,782 266,095 Net cash provided by (used for) operating activities (73,253) 359,703 32,936 (1) 319,385 Cash flows from investing activities: Purchases of marketable investment securities (816,386) — — — (816,386) Sales and maturities of marketable investment securities 1,409,820 — — — 1,409,820 Expenditures for property and equipment — (91,630) (62,752) — (154,382) Expenditures for externally marketed software — (16,835) — — (16,835) Distributions (contributions) and advances from (to) subsidiaries, net 189,828 (43,591) — (146,237) — Sales of other investments — 9,016 — — 9,016 Net cash provided by (used for) investing activities 783,262 (143,040) (62,752) (146,237) 431,233 Cash flows from financing activities: Repurchase and maturity of the 2021 Senior Unsecured Notes (901,818) — — — (901,818) Payment of finance lease obligations — — (476) — (476) Payment of in-orbit incentive obligations — (1,431) — — (1,431) Contribution by non-controlling interest holder — — 9,880 — 9,880 Other, net — — (966) — (966) Contribution (distributions) and advances (to) from parent, net — (189,828) 43,591 146,237 — Net cash provided by (used for) financing activities (901,818) (191,259) 52,029 146,237 (894,811) Effect of exchange rates on cash and cash equivalents — — (348) — (348) Net increase (decrease) in cash and cash equivalents (191,809) 25,404 21,865 (1) (144,541) Cash and cash equivalents, including restricted amounts, beginning of period 649,851 46,055 45,391 — 741,297 Cash and cash equivalents, including restricted amounts, end of period $ 458,042 $ 71,459 $ 67,256 $ (1) $ 596,756 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
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 (“U.S. 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 U.S. 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. |
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; (ii) allowances for doubtful accounts; (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) asset impairment testing. |
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 shareholder’s 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 On January 1, 2021, we adopted Accounting Standard Update (“ASU”) No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the Financial Accounting Standards Board (“FASB”) overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. In November 2021, the FASB issued ASU 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 Topic 832 disclosure requirements include: (i) the nature of the transactions and the related accounting policy used; (ii) the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions. Our adoption of this ASU did not have a material impact on our Consolidated Financial Statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), 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, 2022. 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 impact of adopting this new guidance and do not expect it to have a material impact on our Consolidated Financial Statements. In October 2021, the FASB issued ASU 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 effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022. Early adoption is permitted. The ASU is applied to business combinations occurring on or after the effective date. In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of adopting this new guidance and we do not expect it to have a material impact on our Consolidated Financial Statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Components of Contract Balances | The following table presents the components of our contract balances: As of June 30, 2022 December 31, 2021 Trade accounts receivable and contract assets, net: Sales and services $ 178,114 $ 154,676 Leasing 5,592 5,668 Total trade accounts receivable 183,706 160,344 Contract assets 57,413 36,307 Allowance for doubtful accounts (17,104) (14,588) Total trade accounts receivable and contract assets, net $ 224,015 $ 182,063 Contract liabilities: Current $ 134,856 $ 141,343 Non-current 9,922 10,669 Total contract liabilities $ 144,778 $ 152,012 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 June 30, For the six months ended June 30, 2022 2021 2022 2021 Revenue $ 20,852 $ 1,941 $ 109,799 $ 65,022 |
Schedule of Activity in Contract Acquisition Costs | The following table presents the activity in our contract acquisition costs, net: For the six months ended June 30, 2022 2021 Balance at beginning of period $ 82,986 $ 99,837 Additions 30,645 37,408 Amortization expense (39,653) (45,200) Foreign currency translation 724 678 Balance at end of period $ 74,702 $ 92,723 We recognized amortization expenses related to contract acquisition costs of $19.5 million and $22.4 million for the three months ended June 30, 2022 and 2021, respectively. |
Schedule of Disaggregation of Revenue | 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 June 30, 2022 North America $ 398,698 $ 4,850 $ (348) $ 403,200 South and Central America 42,094 — — 42,094 Other 51,049 — 4,740 55,789 Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 For the three months ended June 30, 2021 North America $ 405,101 $ 4,283 $ (88) $ 409,296 South and Central America 46,996 — — 46,996 Other 40,179 — 5,402 45,581 Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 For the six months ended June 30, 2022 North America $ 798,120 $ 9,324 $ (546) $ 806,898 South and Central America 84,966 — — 84,966 Other 102,861 — 10,016 112,877 Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 For the six months ended June 30, 2021 North America $ 803,860 $ 8,372 $ (176) $ 812,056 South and Central America 90,026 — — 90,026 Other 74,250 — 10,771 85,021 Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 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 June 30, 2022 Services and other revenue: Services $ 397,320 $ 3,161 $ — $ 400,481 Lease revenue 9,902 1,689 4,391 15,982 Total services and other revenue 407,222 4,850 4,391 416,463 Equipment revenue: Equipment 27,408 — 1 27,409 Design, development and construction services 56,311 — — 56,311 Lease revenue 900 — — 900 Total equipment revenue 84,619 — 1 84,620 Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 For the three months ended June 30, 2021 Services and other revenue: Services $ 413,925 $ 2,884 $ — $ 416,809 Lease revenue 9,796 1,399 5,313 16,508 Total services and other revenue 423,721 4,283 5,313 433,317 Equipment revenue: Equipment 31,101 — 1 31,102 Design, development and construction services 35,057 — — 35,057 Lease revenue 2,397 — — 2,397 Total equipment revenue 68,555 — 1 68,556 Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 Hughes ESS Corporate and Other Consolidated For the six months ended June 30, 2022 Services and other revenue: Services $ 797,722 $ 6,096 $ — $ 803,818 Lease revenue 20,889 3,228 9,469 33,586 Total services and other revenue 818,611 9,324 9,469 837,404 Equipment revenue: Equipment 53,293 — 1 53,294 Design, development and construction services 112,216 — — 112,216 Lease revenue 1,827 — — 1,827 Total equipment revenue 167,336 — 1 167,337 Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 For the six months ended June 30, 2021 Services and other revenue: Services $ 827,517 $ 5,574 $ — $ 833,091 Lease revenue 19,824 2,798 10,595 33,217 Total services and other revenue 847,341 8,372 10,595 866,308 Equipment revenue: Equipment 59,550 — — 59,550 Design, development and construction services 56,693 — — 56,693 Lease revenue 4,552 — — 4,552 Total equipment revenue 120,795 — — 120,795 Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 |
Schedule of Sales-type Lease Revenue | The following table presents our lease revenue by type of lease: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Sales-type lease revenue: Revenue at lease commencement $ 583 $ 2,295 $ 1,221 $ 4,377 Interest income 317 102 606 175 Total sales-type lease revenue 900 2,397 1,827 4,552 Operating lease revenue 15,982 16,508 33,586 33,217 Total lease revenue $ 16,882 $ 18,905 $ 35,413 $ 37,769 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents our preliminary allocation of the purchase price: Amounts Assets: Trade accounts receivable and contract assets, net $ 6,160 Other current assets 2,085 Property and equipment 4,669 Goodwill 23,086 Other intangible assets 4,428 Total assets $ 40,428 Liabilities: Trade accounts payable $ 133 Accrued expenses and other current liabilities 986 Deferred tax liabilities 1,114 Total liabilities $ 2,233 Total purchase price $ 38,195 |
MARKETABLE INVESTMENT SECURIT_2
MARKETABLE INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Investment Securities | The following table presents our Marketable investment securities : As of June 30, 2022 December 31, 2021 Marketable investment securities: Available-for-sale debt securities: Corporate bonds $ 162,923 $ 284,787 Commercial paper 153,023 491,360 Other debt securities 44,702 78,355 Total available-for-sale debt securities 360,648 854,502 Equity securities — — Total marketable investment securities $ 360,648 $ 854,502 |
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 June 30, 2022 Corporate bonds $ 163,830 $ 2 $ (909) $ 162,923 Commercial paper 153,023 — — 153,023 Other debt securities 44,730 — (28) 44,702 Total available-for-sale debt securities $ 361,583 $ 2 $ (937) $ 360,648 As of December 31, 2021 Corporate bonds $ 285,169 $ — $ (382) $ 284,787 Commercial paper 491,360 — — 491,360 Other debt securities 78,395 — (40) 78,355 Total available-for-sale debt securities $ 854,924 $ — $ (422) $ 854,502 |
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 June 30, For the six months ended June 30, 2022 2021 2022 2021 Proceeds from sales $ 8,886 $ 55,500 $ 37,904 $ 151,265 |
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 June 30, 2022 Cash equivalents (including restricted) $ 198 $ 838,668 $ 838,866 Available-for-sale debt securities: Corporate bonds $ — $ 162,923 $ 162,923 Commercial paper — 153,023 153,023 Other debt securities — 44,702 44,702 Total available-for-sale debt securities — 360,648 360,648 Equity securities — — — Total marketable investment securities $ — $ 360,648 $ 360,648 As of December 31, 2021 Cash equivalents (including restricted) $ 4,032 $ 320,732 $ 324,764 Available-for-sale debt securities: Corporate bonds $ — $ 284,787 $ 284,787 Commercial paper — 491,360 491,360 Other debt securities — 78,355 78,355 Total available-for-sale debt securities — 854,502 854,502 Equity securities — — — Total marketable investment securities $ — $ 854,502 $ 854,502 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The following table presents the components of Property and equipment, net : As of June 30, 2022 December 31, 2021 Property and equipment, net: Satellites, net $ 803,535 $ 847,613 Other property and equipment, net 648,927 675,834 Total property and equipment, net $ 1,452,462 $ 1,523,447 The following table presents the components of our satellites, net: Depreciable Life (In Years) As of June 30, 2022 December 31, 2021 Satellites, net: Satellites - owned 7 to 15 $ 1,503,279 $ 1,500,836 Satellites - acquired under finance leases 15 360,257 354,170 Total satellites 1,863,536 1,855,006 Accumulated depreciation: Satellites - owned (950,273) (911,722) Satellites - acquired under finance leases (109,728) (95,671) Total accumulated depreciation (1,060,001) (1,007,393) Total satellites, net $ 803,535 $ 847,613 The following table presents the depreciation expense associated with our satellites, net: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Depreciation expense: Satellites - owned $ 19,005 $ 17,490 $ 37,920 $ 44,558 Satellites - acquired under finance leases 6,137 7,396 12,124 14,597 Total depreciation expense $ 25,142 $ 24,886 $ 50,044 $ 59,155 The following table presents capitalized interest associated with our satellites and satellite-related ground infrastructure: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Capitalized interest $ 2,095 $ 1,467 $ 4,058 $ 2,713 |
Schedule of Satellites | The following table presents our GEO satellite fleet as of June 30, 2022: 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 (2) Hughes January 2018 20 W 7 EchoStar IX (3) (4) ESS August 2003 121 W 12 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 (the “Hughes Acquisition”). (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. Depreciable life represents the remaining useful life as of November 2019. (3) We own the Ka-band and Ku-band payloads on this satellite. (4) EchoStar IX is approaching its end of station-kept life. The Company expects to place the satellite in an inclined-orbit in the fourth quarter of 2022 or first quarter of 2023, but this ability is dependent upon events beyond our control and may not occur on schedule if at all. Inclined-orbit will extend its life but impact revenue generating capabilities. |
REGULATORY AUTHORIZATIONS (Tabl
REGULATORY AUTHORIZATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Regulatory Authorizations | The following table presents our Regulatory authorizations, net : Finite lived Cost Accumulated Amortization Total Indefinite lived Total Balance, December 31, 2020 11,505 (1,054) 10,451 400,000 410,451 Amortization expense — (405) (405) — (405) Currency translation adjustments (157) (6) (163) — (163) Balance, June 30, 2021 11,348 (1,465) 9,883 400,000 409,883 Balance, December 31, 2021 10,733 (1,774) 8,959 400,000 408,959 Amortization expense — (413) (413) — (413) Currency translation adjustments 335 (57) 278 — 278 Balance, June 30, 2022 $ 11,068 $ (2,244) $ 8,824 $ 400,000 $ 408,824 Weighted-average useful life (in years) 14 |
OTHER INVESTMENTS (Tables)
OTHER INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 December 31, 2021 Other investments, net: Equity method investments $ 86,210 $ 91,226 Total other investments, net $ 86,210 $ 91,226 The following table presents revenue recognized: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Deluxe $ 1,335 $ 1,229 $ 2,658 $ 2,860 BCS $ 1,950 $ 2,766 $ 3,721 $ 4,114 The following table presents trade accounts receivable: As of June 30, 2022 December 31, 2021 Deluxe $ 1,769 $ 934 BCS $ 7,507 $ 5,544 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 December 31, 2021 Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes: 5 1/4% Senior Secured Notes due 2026 5.320% $ 750,000 $ 700,170 $ 750,000 $ 825,555 Senior Unsecured Notes: 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 673,238 750,000 838,740 Less: Unamortized debt issuance costs (3,621) — (4,006) — Total long-term debt, net $ 1,496,379 $ 1,373,408 $ 1,495,994 $ 1,664,295 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - ECHOSTAR (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents our Services and other revenue from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - EchoStar $ 4,739 $ 5,401 $ 10,016 $ 10,772 The following table presents the corresponding related party receivables: As of June 30, 2022 December 31, 2021 Related party receivables - EchoStar - current $ 120,258 $ 122,619 Related party receivables - EchoStar - non-current 52,118 56,055 Total related party receivables - EchoStar $ 172,376 $ 178,674 The following table presents our operating expenses from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - EchoStar $ 17,829 $ 15,798 $ 35,359 $ 31,185 The following table presents the corresponding related party payables: As of June 30, 2022 December 31, 2021 Related party payables - EchoStar - current $ 124,382 $ 124,578 Related party payables - EchoStar - non-current 23,154 24,118 Total related party payables - EchoStar $ 147,536 $ 148,696 The following table presents our Services and other revenue - DISH Network : For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - DISH Network $ 4,519 $ 5,667 $ 9,331 $ 11,394 The following table presents the related trade accounts receivable: As of June 30, 2022 December 31, 2021 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 The following table presents our operating expenses related to DISH Network: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - DISH Network $ 1,110 $ 1,467 $ 2,204 $ 2,566 The following table presents the related trade accounts payable: As of June 30, 2022 December 31, 2021 Trade accounts payable - DISH Network $ 570 $ 587 |
RELATED PARTY TRANSACTIONS - _3
RELATED PARTY TRANSACTIONS - DISH NETWORK (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents our Services and other revenue from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - EchoStar $ 4,739 $ 5,401 $ 10,016 $ 10,772 The following table presents the corresponding related party receivables: As of June 30, 2022 December 31, 2021 Related party receivables - EchoStar - current $ 120,258 $ 122,619 Related party receivables - EchoStar - non-current 52,118 56,055 Total related party receivables - EchoStar $ 172,376 $ 178,674 The following table presents our operating expenses from EchoStar: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - EchoStar $ 17,829 $ 15,798 $ 35,359 $ 31,185 The following table presents the corresponding related party payables: As of June 30, 2022 December 31, 2021 Related party payables - EchoStar - current $ 124,382 $ 124,578 Related party payables - EchoStar - non-current 23,154 24,118 Total related party payables - EchoStar $ 147,536 $ 148,696 The following table presents our Services and other revenue - DISH Network : For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Services and other revenue - DISH Network $ 4,519 $ 5,667 $ 9,331 $ 11,394 The following table presents the related trade accounts receivable: As of June 30, 2022 December 31, 2021 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 The following table presents our operating expenses related to DISH Network: For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Operating expenses - DISH Network $ 1,110 $ 1,467 $ 2,204 $ 2,566 The following table presents the related trade accounts payable: As of June 30, 2022 December 31, 2021 Trade accounts payable - DISH Network $ 570 $ 587 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Accrual For License Fee Dispute | The following table presents the components of the accrual: As of June 30, 2022 December 31, 2021 Additional license fees $ 3,596 $ 3,812 Penalties 3,691 3,912 Interest and interest on penalties 79,555 81,389 Less: Payments (18,671) (8,451) Total accrual $ 68,171 $ 80,662 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 Consolidated For the three months ended June 30, 2022 External revenue $ 491,841 $ 4,502 $ 4,740 $ 501,083 Intersegment revenue — 348 (348) — Total revenue $ 491,841 $ 4,850 $ 4,392 $ 501,083 Capital expenditures $ 64,861 $ — $ — $ 64,861 EBITDA $ 179,928 $ 3,521 $ (11,430) $ 172,019 For the three months ended June 30, 2021 External revenue $ 492,276 $ 4,195 $ 5,402 $ 501,873 Intersegment revenue — 88 (88) — Total revenue $ 492,276 $ 4,283 $ 5,314 $ 501,873 Capital expenditures $ 72,187 $ — $ — $ 72,187 EBITDA $ 210,194 $ 2,243 $ (8,444) $ 203,993 Hughes ESS Corporate Consolidated For the six months ended June 30, 2022 External revenue $ 985,947 $ 8,778 $ 10,016 $ 1,004,741 Intersegment revenue — 546 (546) — Total revenue $ 985,947 $ 9,324 $ 9,470 $ 1,004,741 Capital expenditures $ 125,882 $ — $ — $ 125,882 EBITDA $ 371,098 $ 6,212 $ (22,086) $ 355,224 For the six months ended June 30, 2021 External revenue $ 968,136 $ 8,196 $ 10,771 $ 987,103 Intersegment revenue — 176 (176) — Total revenue $ 968,136 $ 8,372 $ 10,595 $ 987,103 Capital expenditures $ 154,382 $ — $ — $ 154,382 EBITDA $ 408,772 $ 4,162 $ (17,535) $ 395,399 |
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 June 30, For the six months ended June 30, 2022 2021 2022 2021 Income (loss) before income taxes $ 39,944 $ 54,009 $ 85,885 $ 82,276 Interest income, net (4,279) (1,682) (6,559) (4,076) Interest expense, net of amounts capitalized 23,096 37,083 46,474 79,005 Depreciation and amortization 109,864 112,303 223,542 234,967 Net loss (income) attributable to non-controlling interests 3,394 2,280 5,882 3,227 EBITDA $ 172,019 $ 203,993 $ 355,224 $ 395,399 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 December 31, 2021 Other current assets, net: Related party receivables - EchoStar 120,258 122,619 Inventory 110,399 102,907 Prepaids and deposits 21,637 27,737 Trade accounts receivable - DISH Network $ 4,072 $ 3,457 Other, net 16,318 20,124 Total other current assets $ 272,684 $ 276,844 Other non-current assets, net: Capitalized software, net $ 120,421 $ 124,701 Contract acquisition costs, net 74,702 82,986 Related party receivables - EchoStar 52,118 56,055 Deferred tax assets, net 5,302 5,411 Restricted cash 2,053 980 Contract fulfillment costs, net 1,589 1,721 Other, net 32,962 30,986 Total other non-current assets, net $ 289,147 $ 302,840 The following table presents the components of Accrued expenses and other current liabilities and Other non-current liabilities : As of June 30, 2022 December 31, 2021 Accrued expenses and other current liabilities: Related party payables - EchoStar $ 124,382 $ 124,578 Accrued compensation 38,336 45,630 Operating lease obligation 17,236 16,697 Accrued interest 38,334 39,289 Accrued taxes 10,959 9,790 Accrual for license fee dispute 10,699 11,178 Trade accounts payable - DISH Network 570 587 Other 58,786 61,130 Total accrued expenses and other current liabilities $ 299,302 $ 308,879 Other non-current liabilities: Accrual for license fee dispute 57,472 69,484 Related party payables - EchoStar $ 23,154 $ 24,118 Contract liabilities 9,922 10,669 Other 47,741 48,980 Total other non-current liabilities $ 138,289 $ 153,251 |
Schedule of Inventory | The following table presents the components of inventory: As of June 30, 2022 December 31, 2021 Raw materials $ 21,495 $ 13,778 Work-in-process 15,078 11,705 Finished goods 73,826 77,424 Total inventory $ 110,399 $ 102,907 |
Schedule of Noncash Investing and Financing Activities | The following table presents the supplemental and non-cash investing and financing activities: For the six months ended June 30, 2022 2021 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 49,845 $ 75,947 Cash paid for income taxes $ 6,173 $ 3,741 Non-cash investing and financing activities: Increase (decrease) in capital expenditures included in accounts payable, net $ (8,563) $ 8,333 Non-cash net assets received as part of the India JV formation $ 36,701 $ — |
SUPPLEMENTAL GUARANTOR AND NO_2
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
Schedule of Consolidating Balance Sheet | Consolidating Balance Sheet as of June 30, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 837,441 $ 19,791 $ 67,680 $ — $ 924,912 Marketable investment securities 354,184 — 6,464 — 360,648 Trade accounts receivable and contract assets, net — 158,861 65,154 — 224,015 Other current assets, net 65,548 1,204,000 217,557 (1,214,421) 272,684 Total current assets 1,257,173 1,382,652 356,855 (1,214,421) 1,782,259 Non-current assets: Property and equipment, net — 1,164,939 287,523 — 1,452,462 Operating lease right-of-use assets — 122,655 28,381 — 151,036 Goodwill — 504,173 29,332 — 533,505 Regulatory authorizations, net — 400,000 8,824 — 408,824 Other intangible assets, net — 13,241 3,777 — 17,018 Other investments, net — 8,039 78,171 — 86,210 Investment in subsidiaries 3,212,854 336,417 — (3,549,271) — Other non-current assets, net 1,180 285,181 158,565 (155,779) 289,147 Total non-current assets 3,214,034 2,834,645 594,573 (3,705,050) 2,938,202 Total assets $ 4,471,207 $ 4,217,297 $ 951,428 $ (4,919,471) $ 4,720,461 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 89,909 $ 11,219 $ — $ 101,128 Contract liabilities — 130,241 4,615 — 134,856 Accrued expenses and other current liabilities 1,012,002 216,435 285,286 (1,214,421) 299,302 Total current liabilities 1,012,002 436,585 301,120 (1,214,421) 535,286 Non-current liabilities: Long-term debt, net 1,496,379 — — 1,496,379 Deferred tax liabilities, net — 337,589 12,822 (649) 349,762 Operating lease liabilities — 112,850 23,742 — 136,592 Other non-current liabilities — 117,980 175,439 (155,130) 138,289 Total non-current liabilities 1,496,379 568,419 212,003 (155,779) 2,121,022 Total liabilities 2,508,381 1,005,004 513,123 (1,370,200) 2,656,308 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 1,962,826 3,212,293 336,978 (3,549,271) 1,962,826 Non-controlling interests — — 101,327 — 101,327 Total shareholder's equity 1,962,826 3,212,293 438,305 (3,549,271) 2,064,153 Total liabilities and shareholder's equity $ 4,471,207 $ 4,217,297 $ 951,428 $ (4,919,471) $ 4,720,461 Consolidating Balance Sheet as of December 31, 2021 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Assets Current assets: Cash and cash equivalents $ 324,764 $ 42,550 $ 61,854 $ — $ 429,168 Marketable investment securities 854,502 — — — 854,502 Trade accounts receivable and contract assets, net — 127,350 54,713 — 182,063 Other current assets, net 170,283 1,056,871 94,185 (1,044,495) 276,844 Total current assets 1,349,549 1,226,771 210,752 (1,044,495) 1,742,577 Non-current assets: Property and equipment, net — 1,209,859 313,588 — 1,523,447 Operating lease right-of-use assets — 117,912 30,309 — 148,221 Goodwill — 504,173 6,913 — 511,086 Regulatory authorizations, net — 400,000 8,959 — 408,959 Other intangible assets, net — 13,984 — — 13,984 Other investments, net — 9,600 81,626 — 91,226 Investment in subsidiaries 3,126,926 292,211 — (3,419,137) — Other non-current assets, net 1,191 299,149 97,305 (94,805) 302,840 Total non-current assets 3,128,117 2,846,888 538,700 (3,513,942) 2,999,763 Total assets $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 Liabilities and Shareholder's Equity Current liabilities: Trade accounts payable $ — $ 92,156 $ 13,321 $ — $ 105,477 Contract liabilities — 134,474 6,869 — 141,343 Accrued expenses and other current liabilities 972,936 218,463 161,975 (1,044,495) 308,879 Total current liabilities 972,936 445,093 182,165 (1,044,495) 555,699 Non-current liabilities: Long-term debt, net 1,495,994 — — — 1,495,994 Deferred tax liabilities, net — 334,148 258 — 334,406 Operating lease liabilities — 108,431 25,570 — 134,001 Other non-current liabilities — 59,623 188,432 (94,804) 153,251 Total non-current liabilities 1,495,994 502,202 214,260 (94,804) 2,117,652 Total liabilities 2,468,930 947,295 396,425 (1,139,299) 2,673,351 Shareholder's equity: Total Hughes Satellite Systems Corporation shareholder's equity 2,008,736 3,126,364 292,774 (3,419,138) 2,008,736 Non-controlling interests — — 60,253 — 60,253 Total shareholder's equity 2,008,736 3,126,364 353,027 (3,419,138) 2,068,989 Total liabilities and shareholder's equity $ 4,477,666 $ 4,073,659 $ 749,452 $ (4,558,437) $ 4,742,340 |
Schedule of Consolidating Statement of Operations and Comprehensive Income (Loss) | Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 340,844 $ 81,718 $ (6,099) $ 416,463 Equipment revenue — 83,557 5,247 (4,184) 84,620 Total revenue — 424,401 86,965 (10,283) 501,083 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 106,689 42,687 (6,760) 142,616 Cost of sales - equipment (exclusive of depreciation and amortization) — 69,716 3,408 (3,076) 70,048 Selling, general and administrative expenses — 84,969 22,303 (447) 106,825 Research and development expenses — 8,680 85 — 8,765 Depreciation and amortization — 72,661 37,203 — 109,864 Total costs and expenses — 342,715 105,686 (10,283) 438,118 Operating income (loss) — 81,686 (18,721) — 62,965 Other income (expense): Interest income, net 3,185 1,357 1,014 (1,277) 4,279 Interest expense, net of amounts capitalized (22,460) 955 (2,868) 1,277 (23,096) Gains (losses) on investments, net (3) 217 — — 214 Equity in earnings (losses) of unconsolidated affiliates, net — 338 (1,639) — (1,301) Equity in earnings (losses) of subsidiaries, net 43,364 (25,206) — (18,158) — Foreign currency transaction gains (losses), net — 2,910 (5,788) — (2,878) Other, net — (216) (23) — (239) Total other income (expense), net 24,086 (19,645) (9,304) (18,158) (23,021) Income (loss) before income taxes 24,086 62,041 (28,025) (18,158) 39,944 Income tax benefit (provision), net 4,408 (18,677) (575) — (14,844) Net income (loss) 28,494 43,364 (28,600) (18,158) 25,100 Less: Net loss (income) attributable to non-controlling interests — — 3,394 — 3,394 Net income (loss) attributable to HSSC $ 28,494 $ 43,364 $ (25,206) $ (18,158) $ 28,494 Comprehensive income (loss): Net income (loss) from continuing operations $ 28,494 $ 43,364 $ (28,600) $ (18,158) $ 25,100 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (39,143) — (39,143) Unrealized gains (losses) on available-for-sale securities (46) — — — (46) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale securities 3 — — — 3 Equity in other comprehensive income (loss) of subsidiaries, net (32,150) (32,150) — 64,300 — Total other comprehensive income (loss), net of tax (32,193) (32,150) (39,143) 64,300 (39,186) Comprehensive income (loss) (3,699) 11,214 (67,743) 46,142 (14,086) Less: Comprehensive loss (income) attributable to non-controlling interests — — 10,387 — 10,387 Comprehensive income (loss) attributable to HSSC $ (3,699) $ 11,214 $ (57,356) $ 46,142 $ (3,699) Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 361,700 $ 79,919 $ (8,302) $ 433,317 Equipment revenue — 78,619 6,148 (16,211) 68,556 Total revenue — 440,319 86,067 (24,513) 501,873 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 105,836 41,278 (9,564) 137,550 Cost of sales - equipment (exclusive of depreciation and amortization) — 64,342 4,694 (14,534) 54,502 Selling, general and administrative expenses — 81,512 22,919 (415) 104,016 Research and development expenses — 7,276 165 — 7,441 Depreciation and amortization — 82,443 29,860 — 112,303 Total costs and expenses — 341,409 98,916 (24,513) 415,812 Operating income (loss) — 98,910 (12,849) — 86,061 Other income (expense): Interest income, net 876 1,306 729 (1,229) 1,682 Interest expense, net of amounts capitalized (35,484) 261 (3,089) 1,229 (37,083) Gains (losses) on investments, net (6) 2,100 — — 2,094 Equity in earnings (losses) of unconsolidated affiliates, net — 406 (1,675) — (1,269) Equity in earnings (losses) of subsidiaries, net 65,004 (14,747) — (50,257) — Foreign currency transaction gains (losses), net — (16) 551 — 535 Other, net (357) 2,410 (64) — 1,989 Total other income (expense), net 30,033 (8,280) (3,548) (50,257) (32,052) Income (loss) before income taxes 30,033 90,630 (16,397) (50,257) 54,009 Income tax benefit (provision), net 7,907 (25,626) (630) — (18,349) Net income (loss) 37,940 65,004 (17,027) (50,257) 35,660 Less: Net loss (income) attributable to non-controlling interests — — 2,280 — 2,280 Net income (loss) attributable to HSSC $ 37,940 $ 65,004 $ (14,747) $ (50,257) $ 37,940 Comprehensive income (loss): Net income (loss) from continuing operations $ 37,940 $ 65,004 $ (17,027) $ (50,257) $ 35,660 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 42,060 — 42,060 Unrealized gains (losses) on available-for-sale securities 118 — — — 118 Equity in other comprehensive income (loss) of subsidiaries, net 33,720 33,720 — (67,440) — Total other comprehensive income (loss), net of tax 33,838 33,720 42,060 (67,440) 42,178 Comprehensive income (loss) 71,778 98,724 25,033 (117,697) 77,838 Less: Comprehensive loss (income) attributable to non-controlling interests — — (6,060) — (6,060) Comprehensive income (loss) attributable to HSSC $ 71,778 $ 98,724 $ 18,973 $ (117,697) $ 71,778 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Six Months Ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 685,122 $ 164,401 $ (12,119) $ 837,404 Equipment revenue — 166,542 11,280 (10,485) 167,337 Total revenue — 851,664 175,681 (22,604) 1,004,741 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 212,310 84,544 (14,884) 281,970 Cost of sales - equipment (exclusive of depreciation and amortization) — 139,134 6,841 (6,822) 139,153 Selling, general and administrative expenses — 175,603 43,738 (898) 218,443 Research and development expenses — 16,216 165 — 16,381 Depreciation and amortization — 150,967 72,575 — 223,542 Total costs and expenses — 694,230 207,863 (22,604) 879,489 Operating income (loss) — 157,434 (32,182) — 125,252 Other income (expense): Interest income 4,311 2,702 2,087 (2,541) 6,559 Interest expense, net of amounts capitalized (44,917) 1,779 (5,877) 2,541 (46,474) Gains (losses) on investments, net (3) 217 — — 214 Equity in earnings (losses) of unconsolidated affiliates, net — 440 (3,455) — (3,015) Equity in earnings (losses) of subsidiaries, net 93,120 (35,048) — (58,072) — Foreign currency transaction gains (losses), net — 3,807 (30) — 3,777 Other, net — (271) (157) — (428) Total other income (expense), net 52,511 (26,374) (7,432) (58,072) (39,367) Income (loss) before income taxes 52,511 131,060 (39,614) (58,072) 85,885 Income tax benefit (provision), net 9,284 (37,940) (1,316) — (29,972) Net income (loss) 61,795 93,120 (40,930) (58,072) 55,913 Less: Net loss (income) attributable to non-controlling interests — — 5,882 — 5,882 Net income (loss) attributable to HSSC $ 61,795 $ 93,120 $ (35,048) $ (58,072) $ 61,795 Comprehensive income (loss): Net income (loss) $ 61,795 $ 93,120 $ (40,930) $ (58,072) $ 55,913 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 7,543 — 7,543 Unrealized gains (losses) on available-for-sale securities (516) — — — (516) Amounts reclassified to net income (loss): Realized losses (gains) on available-for-sale debt securities 3 — — — 3 Equity in other comprehensive income (loss) of subsidiaries, net 4,980 4,980 — (9,960) — Total other comprehensive income (loss), net of tax 4,467 4,980 7,543 (9,960) 7,030 Comprehensive income (loss) 66,262 98,100 (33,387) (68,032) 62,943 Less: Comprehensive loss (income) attributable to non-controlling interests — — 3,319 — 3,319 Comprehensive income (loss) attributable to HSSC $ 66,262 $ 98,100 $ (30,068) $ (68,032) $ 66,262 Consolidating Statement of Operations and Comprehensive Income (Loss) For the Six Months Ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue $ — $ 725,397 $ 157,622 $ (16,711) $ 866,308 Equipment revenue — 139,656 14,194 (33,055) 120,795 Total revenue — 865,053 171,816 (49,766) 987,103 Costs and expenses: Cost of sales - services and other (exclusive of depreciation and amortization) — 209,043 77,507 (17,588) 268,962 Cost of sales - equipment (exclusive of depreciation and amortization) — 120,772 10,063 (31,193) 99,642 Selling, general and administrative expenses — 165,055 44,316 (985) 208,386 Research and development expenses — 14,634 352 — 14,986 Depreciation and amortization — 176,695 58,272 — 234,967 Impairment of long-lived assets — 210 — — 210 Total costs and expenses — 686,409 190,510 (49,766) 827,153 Operating income (loss) — 178,644 (18,694) — 159,950 Other income (expense): Interest income, net 1,912 2,593 2,010 (2,439) 4,076 Interest expense, net of amounts capitalized (75,728) 306 (6,022) 2,439 (79,005) Gains (losses) on investments, net (6) 2,100 — — 2,094 Equity in earnings (losses) of unconsolidated affiliates, net — 625 (3,655) — (3,030) Equity in earnings (losses) of subsidiaries, net 115,147 (27,364) — (87,783) — Foreign currency transaction gains (losses), net — (19) (2,806) — (2,825) Other, net (1,939) 3,154 (199) — 1,016 Total other income (expense), net 39,386 (18,605) (10,672) (87,783) (77,674) Income (loss) before income taxes 39,386 160,039 (29,366) (87,783) 82,276 Income tax benefit (provision), net 17,131 (44,892) (1,225) — (28,986) Net income (loss) 56,517 115,147 (30,591) (87,783) 53,290 Less: Net loss (income) attributable to non-controlling interests — — 3,227 — 3,227 Net income (loss) attributable to HSSC $ 56,517 $ 115,147 $ (27,364) $ (87,783) $ 56,517 Comprehensive income (loss): Net income (loss) $ 56,517 $ 115,147 $ (30,591) $ (87,783) $ 53,290 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 8,318 — 8,318 Unrealized gains (losses) on available-for-sale securities 30 — — — 30 Amounts reclassified to net income (loss): Equity in other comprehensive income (loss) of subsidiaries, net 5,588 5,588 — (11,176) — Total other comprehensive income (loss), net of tax 5,618 5,588 8,318 (11,176) 8,348 Comprehensive income (loss) 62,135 120,735 (22,273) (98,959) 61,638 Less: Comprehensive loss (income) attributable to non-controlling interests — — 497 — 497 Comprehensive income (loss) attributable to HSSC $ 62,135 $ 120,735 $ (21,776) $ (98,959) $ 62,135 |
Schedule of Consolidating Statement of Cash Flows | Consolidating Statement of Cash Flows For the Six months ended June 30, 2022 Hughes Satellite Systems Corporation Guarantor Non-Guarantor Eliminations Total Cash flows from operating activities: Net income (loss) $ 61,795 $ 93,120 $ (40,930) $ (58,072) $ 55,913 Adjustments to reconcile net income (loss) to net cash flows from operating activities (90,384) 142,006 86,303 58,072 195,997 Net cash provided by (used for) operating activities (28,589) 235,126 45,373 — 251,910 Cash flows from investing activities: Purchases of marketable investment securities (164,541) — (6,464) — (171,005) Sales and maturities of marketable investment securities 662,347 — — — 662,347 Expenditures for property and equipment — (94,658) (31,224) — (125,882) Expenditures for externally marketed software — (11,967) — — (11,967) Distributions (contributions) and advances from (to) subsidiaries, net 143,460 — — (143,460) — India JV formation — (7,892) — — (7,892) Dividend received from unconsolidated affiliate — 2,000 — — 2,000 Net cash provided by (used for) investing activities 641,266 (112,517) (37,688) (143,460) 347,601 Cash flows from financing activities: Payment of finance lease obligations — — (114) — (114) Payment of in-orbit incentive obligations — (1,908) — — (1,908) Dividend paid to EchoStar (100,000) — — — (100,000) Contribution (distributions) and advances (to) from parent, net — (143,460) — 143,460 — Net cash provided by (used for) financing activities (100,000) (145,368) (114) 143,460 (102,022) Effect of exchange rates on cash and cash equivalents — — (672) — (672) Net increase (decrease) in cash and cash equivalents 512,677 (22,759) 6,899 — 496,817 Cash and cash equivalents, including restricted amounts, beginning of period 324,764 42,550 62,834 — 430,148 Cash and cash equivalents, including restricted amounts, end of period $ 837,441 $ 19,791 $ 69,733 $ — $ 926,965 Consolidating Statement of Cash Flows For the Six months ended June 30, 2021 Hughes Satellite Systems Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 56,517 $ 115,147 $ (30,591) $ (87,783) $ 53,290 Adjustments to reconcile net income (loss) to net cash flows from operating activities (129,770) 244,556 63,527 87,782 266,095 Net cash provided by (used for) operating activities (73,253) 359,703 32,936 (1) 319,385 Cash flows from investing activities: Purchases of marketable investment securities (816,386) — — — (816,386) Sales and maturities of marketable investment securities 1,409,820 — — — 1,409,820 Expenditures for property and equipment — (91,630) (62,752) — (154,382) Expenditures for externally marketed software — (16,835) — — (16,835) Distributions (contributions) and advances from (to) subsidiaries, net 189,828 (43,591) — (146,237) — Sales of other investments — 9,016 — — 9,016 Net cash provided by (used for) investing activities 783,262 (143,040) (62,752) (146,237) 431,233 Cash flows from financing activities: Repurchase and maturity of the 2021 Senior Unsecured Notes (901,818) — — — (901,818) Payment of finance lease obligations — — (476) — (476) Payment of in-orbit incentive obligations — (1,431) — — (1,431) Contribution by non-controlling interest holder — — 9,880 — 9,880 Other, net — — (966) — (966) Contribution (distributions) and advances (to) from parent, net — (189,828) 43,591 146,237 — Net cash provided by (used for) financing activities (901,818) (191,259) 52,029 146,237 (894,811) Effect of exchange rates on cash and cash equivalents — — (348) — (348) Net increase (decrease) in cash and cash equivalents (191,809) 25,404 21,865 (1) (144,541) Cash and cash equivalents, including restricted amounts, beginning of period 649,851 46,055 45,391 — 741,297 Cash and cash equivalents, including restricted amounts, end of period $ 458,042 $ 71,459 $ 67,256 $ (1) $ 596,756 |
ORGANIZATION AND BUSINESS ACT_2
ORGANIZATION AND BUSINESS ACTIVITIES (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Components of Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Trade accounts receivable and contract assets, net: | |||||
Trade accounts receivable | $ 183,706 | $ 183,706 | $ 160,344 | ||
Contract assets | 57,413 | 57,413 | 36,307 | ||
Allowance for doubtful accounts | (17,104) | (17,104) | (14,588) | ||
Trade accounts receivable and contract assets, net | 224,015 | 224,015 | 182,063 | ||
Contract liabilities: | |||||
Current | 134,856 | 134,856 | 141,343 | ||
Non-current | 9,922 | 9,922 | 10,669 | ||
Total contract liabilities | 144,778 | 144,778 | 152,012 | ||
Revenue recognized | 20,852 | $ 1,941 | 109,799 | $ 65,022 | |
Sales and services | |||||
Trade accounts receivable and contract assets, net: | |||||
Trade accounts receivable | 178,114 | 178,114 | 154,676 | ||
Leasing | |||||
Trade accounts receivable and contract assets, net: | |||||
Trade accounts receivable | $ 5,592 | $ 5,592 | $ 5,668 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Increase (Decrease) In Capitalized Contract Cost [Roll Forward] | ||||
Balance at beginning of period | $ 82,986 | $ 99,837 | ||
Additions | 30,645 | 37,408 | ||
Amortization expense | $ (19,500) | $ (22,400) | (39,653) | (45,200) |
Foreign currency translation | 724 | 678 | ||
Balance at end of period | $ 74,702 | $ 92,723 | $ 74,702 | $ 92,723 |
REVENUE RECOGNITION - Contrac_2
REVENUE RECOGNITION - Contract Acquisition Costs Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Capitalized contract cost amortization | $ 19,500 | $ 22,400 | $ 39,653 | $ 45,200 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) $ in Billions | Jun. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 1 year |
Remaining performance obligation, percentage | 40% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | |
Remaining performance obligation, percentage | 60% |
REVENUE RECOGNITION - Schedul_2
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 501,083 | $ 501,873 | $ 1,004,741 | $ 987,103 |
Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 416,463 | 433,317 | 837,404 | 866,308 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 400,481 | 416,809 | 803,818 | 833,091 |
Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 15,982 | 16,508 | 33,586 | 33,217 |
Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 84,620 | 68,556 | 167,337 | 120,795 |
Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 27,409 | 31,102 | 53,294 | 59,550 |
Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 56,311 | 35,057 | 112,216 | 56,693 |
Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 900 | 2,397 | 1,827 | 4,552 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 403,200 | 409,296 | 806,898 | 812,056 |
South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 42,094 | 46,996 | 84,966 | 90,026 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 55,789 | 45,581 | 112,877 | 85,021 |
Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,392 | 5,314 | 9,470 | 10,595 |
Corporate and Other | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,391 | 5,313 | 9,469 | 10,595 |
Corporate and Other | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Corporate and Other | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,391 | 5,313 | 9,469 | 10,595 |
Corporate and Other | Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1 | 1 | 1 | 0 |
Corporate and Other | Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1 | 1 | 1 | 0 |
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 |
Corporate and Other | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | (348) | (88) | (546) | (176) |
Corporate and Other | South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Corporate and Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,740 | 5,402 | 10,016 | 10,771 |
Hughes | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 491,841 | 492,276 | 985,947 | 968,136 |
Hughes | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 491,841 | 492,276 | 985,947 | 968,136 |
Hughes | Operating segments | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 407,222 | 423,721 | 818,611 | 847,341 |
Hughes | Operating segments | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 397,320 | 413,925 | 797,722 | 827,517 |
Hughes | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,902 | 9,796 | 20,889 | 19,824 |
Hughes | Operating segments | Total equipment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 84,619 | 68,555 | 167,336 | 120,795 |
Hughes | Operating segments | Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 27,408 | 31,101 | 53,293 | 59,550 |
Hughes | Operating segments | Design, development and construction services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 56,311 | 35,057 | 112,216 | 56,693 |
Hughes | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 900 | 2,397 | 1,827 | 4,552 |
Hughes | Operating segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 398,698 | 405,101 | 798,120 | 803,860 |
Hughes | Operating segments | South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 42,094 | 46,996 | 84,966 | 90,026 |
Hughes | Operating segments | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 51,049 | 40,179 | 102,861 | 74,250 |
ESS | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,502 | 4,195 | 8,778 | 8,196 |
ESS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,850 | 4,283 | 9,324 | 8,372 |
ESS | Operating segments | Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,850 | 4,283 | 9,324 | 8,372 |
ESS | Operating segments | Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,161 | 2,884 | 6,096 | 5,574 |
ESS | Operating segments | Lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,689 | 1,399 | 3,228 | 2,798 |
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 |
ESS | Operating segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,850 | 4,283 | 9,324 | 8,372 |
ESS | Operating segments | South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
ESS | Operating segments | Other | ||||
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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Sales-type lease revenue: | ||||
Revenue at lease commencement | $ 583 | $ 2,295 | $ 1,221 | $ 4,377 |
Interest income | 317 | 102 | 606 | 175 |
Total sales-type lease revenue | 900 | 2,397 | 1,827 | 4,552 |
Operating lease revenue | 15,982 | 16,508 | 33,586 | 33,217 |
Total lease revenue | $ 16,882 | $ 18,905 | $ 35,413 | $ 37,769 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 04, 2022 | Jun. 30, 2022 | |
India JV | India JV | ||
Business Acquisition [Line Items] | ||
Equity interest, percentage in joint venture | 67% | |
India JV | Bharti | ||
Business Acquisition [Line Items] | ||
Ownership interest | 33% | |
India Joint Venture | ||
Business Acquisition [Line Items] | ||
Total purchase price | $ 38,195 | |
Payments to acquire business, net | 7,900 | |
Other intangible assets | $ 4,428 | |
India Joint Venture | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Other intangible assets | $ 4,400 | |
Amortization period | 5 years |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Recognized Identified Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jan. 04, 2022 | Dec. 31, 2021 |
Assets: | |||
Goodwill | $ 533,505 | $ 511,086 | |
India Joint Venture | |||
Assets: | |||
Trade accounts receivable and contract assets, net | $ 6,160 | ||
Other current assets | 2,085 | ||
Property and equipment | 4,669 | ||
Goodwill | 23,086 | ||
Other intangible assets | 4,428 | ||
Total assets | 40,428 | ||
Liabilities: | |||
Trade accounts payable | 133 | ||
Accrued expenses and other current liabilities | 986 | ||
Deferred tax liabilities | 1,114 | ||
Total liabilities | 2,233 | ||
Total purchase price | $ 38,195 |
MARKETABLE INVESTMENT SECURIT_3
MARKETABLE INVESTMENT SECURITIES - Schedule of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 360,648 | $ 854,502 |
Equity securities | 0 | 0 |
Marketable investment securities | 360,648 | 854,502 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 162,923 | 284,787 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 153,023 | 491,360 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | $ 44,702 | $ 78,355 |
MARKETABLE INVESTMENT SECURIT_4
MARKETABLE INVESTMENT SECURITIES - Unrealized Gains (Losses) on Available-for-Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 361,583 | $ 854,924 |
Unrealized Gains | 2 | 0 |
Unrealized Losses | (937) | (422) |
Estimated Fair Value | 360,648 | 854,502 |
Corporate bonds | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 163,830 | 285,169 |
Unrealized Gains | 2 | 0 |
Unrealized Losses | (909) | (382) |
Estimated Fair Value | 162,923 | 284,787 |
Commercial paper | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 153,023 | 491,360 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 153,023 | 491,360 |
Other debt securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 44,730 | 78,395 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (28) | (40) |
Estimated Fair Value | $ 44,702 | $ 78,355 |
MARKETABLE INVESTMENT SECURIT_5
MARKETABLE INVESTMENT SECURITIES - Activity on Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sales | $ 8,886 | $ 55,500 | $ 37,904 | $ 151,265 |
MARKETABLE INVESTMENT SECURIT_6
MARKETABLE INVESTMENT SECURITIES - Narrative (Details) | Jun. 30, 2022 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Debt securities with contractual maturities of one year or less | $ 360,600,000 |
Debt securities with contractual maturities exceeding one year | $ 0 |
MARKETABLE INVESTMENT SECURIT_7
MARKETABLE INVESTMENT SECURITIES - Schedule of Fair Value Measurements (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Fair value of marketable securities | ||
Cash equivalents (including restricted) | $ 838,866,000 | $ 324,764,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 360,648,000 | 854,502,000 |
Equity securities | 0 | 0 |
Total marketable investment securities | 360,648,000 | 854,502,000 |
Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 162,923,000 | 284,787,000 |
Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 153,023,000 | 491,360,000 |
Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 44,702,000 | 78,355,000 |
Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 198,000 | 4,032,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 0 | 0 |
Equity securities | 0 | 0 |
Total marketable investment securities | 0 | 0 |
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 | 0 | 0 |
Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents (including restricted) | 838,668,000 | 320,732,000 |
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 360,648,000 | 854,502,000 |
Equity securities | 0 | 0 |
Total marketable investment securities | 360,648,000 | 854,502,000 |
Level 2 | Corporate bonds | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 162,923,000 | 284,787,000 |
Level 2 | Commercial paper | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 153,023,000 | 491,360,000 |
Level 2 | Other debt securities | ||
Available-for-sale debt securities: | ||
Total available-for-sale debt securities | 44,702,000 | 78,355,000 |
Level 3 | ||
Available-for-sale debt securities: | ||
Total marketable investment securities | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Major Asset Class (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property and equipment, net: | ||
Property and equipment, net | $ 1,452,462 | $ 1,523,447 |
Satellites, net | ||
Property and equipment, net: | ||
Property and equipment, net | 803,535 | 847,613 |
Other property and equipment, net | ||
Property and equipment, net: | ||
Property and equipment, net | $ 648,927 | $ 675,834 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 USD ($) satellite mi | Dec. 31, 2021 USD ($) | |
Satellite-related obligations | ||
Property, Plant and Equipment [Line Items] | ||
Satellite-related obligations | $ | $ 160.2 | $ 179.7 |
Satellites | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 8 | |
Satellites in geosynchronous orbit length above equator | mi | 22,300 | |
Satellites - owned | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 5 | |
Satellites - acquired under finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Number of satellites utilized under capital lease | 3 | |
Level 2 | ||
Property, Plant and Equipment [Line Items] | ||
Obligations, fair value disclosure | $ | $ 51.3 | $ 53.2 |
PROPERTY AND EQUIPMENT - Sche_2
PROPERTY AND EQUIPMENT - Schedule of Satellite Fleet (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 15 years |
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) | 7 years |
EchoStar IX | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (In Years) | 12 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 |
PROPERTY AND EQUIPMENT- Schedul
PROPERTY AND EQUIPMENT- Schedule of Satellite Breakdown (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years | |
Accumulated depreciation: | ||
Total satellites, net | $ 1,452,462 | $ 1,523,447 |
Satellites | ||
Satellites, net: | ||
Total satellites | 1,863,536 | 1,855,006 |
Accumulated depreciation: | ||
Accumulated depreciation | (1,060,001) | (1,007,393) |
Total satellites, net | 803,535 | 847,613 |
Satellites - owned | ||
Satellites, net: | ||
Satellites - owned | 1,503,279 | 1,500,836 |
Accumulated depreciation: | ||
Accumulated depreciation | (950,273) | (911,722) |
Satellites - acquired under finance leases | ||
Satellites, net: | ||
Satellites - acquired under finance leases | 360,257 | 354,170 |
Accumulated depreciation: | ||
Accumulated depreciation | $ (109,728) | $ (95,671) |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 7 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable Life (In Years) | 15 years |
PROPERTY AND EQUIPMENT - Sche_3
PROPERTY AND EQUIPMENT - Schedule of Depreciation Expense and Capitalized Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Depreciation expense: | ||||
Total depreciation expense | $ 109,864 | $ 112,303 | $ 223,542 | $ 234,967 |
Capitalized interest | 2,095 | 1,467 | 4,058 | 2,713 |
Satellites | ||||
Depreciation expense: | ||||
Total depreciation expense | 25,142 | 24,886 | 50,044 | 59,155 |
Satellites - owned | ||||
Depreciation expense: | ||||
Satellites - owned | 19,005 | 17,490 | 37,920 | 44,558 |
Satellites - acquired under finance leases | ||||
Depreciation expense: | ||||
Satellites - acquired under finance leases | $ 6,137 | $ 7,396 | $ 12,124 | $ 14,597 |
REGULATORY AUTHORIZATIONS - Sch
REGULATORY AUTHORIZATIONS - Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Amortization | ||
Amortization expense | $ (413) | $ (405) |
Indefinite lived | ||
Balance at the beginning of the period | 400,000 | 400,000 |
Currency translation adjustments | 0 | 0 |
Balance at the end of the period | 400,000 | 400,000 |
Total | ||
Balance at beginning of period | 408,959 | 410,451 |
Currency translation adjustments | 278 | (163) |
Balance at the end of the period | $ 408,824 | 409,883 |
Weighted-average useful life (in years) | 14 years | |
Regulatory authorization | ||
Cost | ||
Balance at the beginning of the period | $ 10,733 | 11,505 |
Currency translation adjustments | 335 | (157) |
Balance at the end of the period | 11,068 | 11,348 |
Accumulated Amortization | ||
Balance at beginning of period | (1,774) | (1,054) |
Amortization expense | (413) | (405) |
Currency translation adjustments | (57) | (6) |
Balance at end of the period | (2,244) | (1,465) |
Total | ||
Beginning balance | 8,959 | 10,451 |
Currency translation adjustments | 278 | (163) |
Balance at the end of the period | $ 8,824 | $ 9,883 |
OTHER INVESTMENTS - Schedule of
OTHER INVESTMENTS - Schedule of Other Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Other investments, net: | ||
Equity method investments | $ 86,210 | $ 91,226 |
Total other investments, net | $ 86,210 | $ 91,226 |
OTHER INVESTMENTS - Narrative (
OTHER INVESTMENTS - Narrative (Details) | Jun. 30, 2022 | Dec. 31, 2018 |
Deluxe | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest, percentage in joint venture | 50% | |
BCS | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest, percentage in joint venture | 20% |
OTHER INVESTMENTS - Schedule _2
OTHER INVESTMENTS - Schedule of Revenue Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Deluxe | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from related parties | $ 1,335 | $ 1,229 | $ 2,658 | $ 2,860 |
BCS | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue from related parties | $ 1,950 | $ 2,766 | $ 3,721 | $ 4,114 |
OTHER INVESTMENTS - Schedule _3
OTHER INVESTMENTS - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Deluxe | ||
Schedule of Equity Method Investments [Line Items] | ||
Related party receivables | $ 1,769 | $ 934 |
BCS | ||
Schedule of Equity Method Investments [Line Items] | ||
Related party receivables | $ 7,507 | $ 5,544 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt | ||
Less: Unamortized debt issuance costs | $ (3,621) | $ (4,006) |
Carrying amount, total long-term debt, net | 1,496,379 | 1,495,994 |
Fair value, total long-term debt, net | $ 1,373,408 | 1,664,295 |
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | ||
Debt | ||
Effective Interest Rate | 5.32% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt, net | $ 700,170 | 825,555 |
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | ||
Debt | ||
Effective Interest Rate | 6.688% | |
Carrying amount, gross | $ 750,000 | 750,000 |
Fair value, total long-term debt, net | $ 673,238 | $ 838,740 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Jun. 30, 2022 |
Senior Unsecured Notes | 6 5/8% Senior Unsecured Notes due 2026 | |
Debt | |
Interest rate | 6.625% |
Senior Secured Notes | 5 1/4% Senior Secured Notes due 2026 | |
Debt | |
Interest rate | 5.25% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 14,844 | $ 18,349 | $ 29,972 | $ 28,986 |
Effective income tax rate | 37.20% | 34% | 34.90% | 35.20% |
RELATED PARTY TRANSACTIONS - _4
RELATED PARTY TRANSACTIONS - ECHOSTAR - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 17, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Related party transactions | |||||
Dividend paid to EchoStar | $ 100,000 | $ 100,000 | |||
Minimum | Related-party advances | One-year LIBOR | |||||
Related party transactions | |||||
Annual rates | 1% | ||||
Maximum | Related-party advances | One-year LIBOR | |||||
Related party transactions | |||||
Annual rates | 3% | ||||
EchoStar | |||||
Related party transactions | |||||
Related party transaction, amounts of transaction | $ 1,900 | $ 600 | $ 4,500 | $ 200 | |
Revenue from related parties | 4,739 | 5,401 | 10,016 | 10,772 | |
EchoStar Mobile Limited | |||||
Related party transactions | |||||
Revenue from related parties | 4,700 | 5,400 | $ 10,000 | 10,800 | |
Interest rate on converted receivables loan | 5% | ||||
EOC | Construction Management Services | |||||
Related party transactions | |||||
Related party costs | $ 400 | $ 500 | $ 700 | $ 900 |
RELATED PARTY TRANSACTIONS - _5
RELATED PARTY TRANSACTIONS - ECHOSTAR - Services and Other Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related party transactions | |||||
Related party receivables - EchoStar - non-current | $ 52,118 | $ 52,118 | $ 56,055 | ||
EchoStar | |||||
Related party transactions | |||||
Services and other revenue - EchoStar | 4,739 | $ 5,401 | 10,016 | $ 10,772 | |
Related party receivables - EchoStar - current | 120,258 | 120,258 | 122,619 | ||
Related party receivables - EchoStar - non-current | 52,118 | 52,118 | 56,055 | ||
Total related party receivables - EchoStar | $ 172,376 | $ 172,376 | $ 178,674 |
RELATED PARTY TRANSACTIONS - _6
RELATED PARTY TRANSACTIONS - ECHOSTAR - Echostar - Operating Expenses (Details) - EchoStar - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related party transactions | |||||
Operating expenses - EchoStar | $ 17,829 | $ 15,798 | $ 35,359 | $ 31,185 | |
Related party payables - EchoStar - current | 124,382 | 124,382 | $ 124,578 | ||
Related party payables - EchoStar - non-current | 23,154 | 23,154 | 24,118 | ||
Total related party payables - EchoStar | $ 147,536 | $ 147,536 | $ 148,696 |
RELATED PARTY TRANSACTIONS - _7
RELATED PARTY TRANSACTIONS - DISH NETWORK - Overview (Details) - $ / shares | 1 Months Ended | ||||
Sep. 30, 2019 | May 31, 2019 | Feb. 28, 2017 | Jun. 30, 2022 | Dec. 31, 2021 | |
Related party transactions | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common Stock | BSS Corp. | |||||
Related party transactions | |||||
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) | 1 | ||||
Common Stock | DISH Network | |||||
Related party transactions | |||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Class A common stock | DISH Network | |||||
Related party transactions | |||||
Entity shares issued per acquiree share (in shares) | 0.23523769 | 0.23523769 | |||
DISH Network | Share Exchange Agreement | EchoStar Technologies segment | |||||
Related party transactions | |||||
Ownership interest acquired by related party (as a percent) | 100% | ||||
DISH Network | Hughes Retail Preferred Tracking Stock | Hughes Retail Group | Satellite and Tracking Stock Transaction | |||||
Related party transactions | |||||
Percentage of economic interest held | 80% |
RELATED PARTY TRANSACTIONS - _8
RELATED PARTY TRANSACTIONS - DISH NETWORK - Services and Other Revenue - DISH Network (Details) - DISH Network - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related party transactions | |||||
Services and other revenue - DISH Network | $ 4,519 | $ 5,667 | $ 9,331 | $ 11,394 | |
Trade accounts receivable - DISH Network | $ 4,072 | $ 4,072 | $ 3,457 |
RELATED PARTY TRANSACTIONS - _9
RELATED PARTY TRANSACTIONS - DISH NETWORK - Telesat Obligation Agreement (Details) | 1 Months Ended |
Sep. 30, 2009 transponder | |
TeleSat Transponder Agreement | Telesat Canada | |
Related party transactions | |
Number of transponders | 32 |
DISH Nimiq 5 Agreement | DISH Network | |
Related party transactions | |
Number of transponders | 32 |
RELATED PARTY TRANSACTIONS -_10
RELATED PARTY TRANSACTIONS - DISH NETWORK - TerreStar Agreement (Details) - DISH Network - TerreStar Agreement | 1 Months Ended |
Dec. 31, 2017 | |
Related party transactions | |
Minimum termination notice period (days) | 21 days |
Required minimum notice for termination of agreement (days) | 90 days |
RELATED PARTY TRANSACTIONS -_11
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband Distribution Agreement (Details) - Hughes Broadband Distribution Agreement | 1 Months Ended |
Oct. 31, 2012 | |
Related party transactions | |
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 -_12
RELATED PARTY TRANSACTIONS - DISH NETWORK - DBSD North America Agreement (Details) - DISH Network - DBSD North America Agreement | 1 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2017 | |
Related party transactions | ||
Minimum termination notice period (days) | 180 days | |
Quarter to Quarter | ||
Related party transactions | ||
Required minimum notice for termination of agreement (days) | 120 days | |
Month to Month Basis | ||
Related party transactions | ||
Minimum termination notice period (days) | 21 days |
RELATED PARTY TRANSACTIONS -_13
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Equipment and Services Agreement (Details) - DISH Network - Hughes Equipment And Service Agreement | 1 Months Ended |
Feb. 28, 2019 | |
Related party transactions | |
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 -_14
RELATED PARTY TRANSACTIONS - DISH NETWORK - Operating Expenses - DISH Network (Details) - DISH Network - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related party transactions | |||||
Operating expenses - DISH Network | $ 1,110 | $ 1,467 | $ 2,204 | $ 2,566 | |
Trade accounts payable - DISH Network | $ 570 | $ 570 | $ 587 |
RELATED PARTY TRANSACTIONS -_15
RELATED PARTY TRANSACTIONS - DISH NETWORK - Amended and Restated Professional Services Agreement (Details) - DISH Network | 1 Months Ended |
Jan. 31, 2010 | |
Amended and Restated Professional Services Agreement | |
Related party transactions | |
Automatic renewal period (in years) | 1 year |
EchoStar Amended and Restated Professional Services Agreement | |
Related party transactions | |
Required minimum notice for termination of agreement (days) | 60 days |
Required minimum notice for termination of individual service (days) | 30 days |
RELATED PARTY TRANSACTIONS -_16
RELATED PARTY TRANSACTIONS - DISH NETWORK - Collocation and Antenna Space Agreement (Details) - DISH Network - Collocation and Antenna Space Agreements - renewal | 1 Months Ended | |||
Nov. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2019 | Jul. 31, 2015 | |
Related party transactions | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | 3 years | ||
Termination notice required (months) | 180 days | |||
Cheyenne, Wyoming | ||||
Related party transactions | ||||
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 transactions | ||||
Number of renewal terms | 4 | |||
Term of renewal option (in years) | 3 years | |||
Agreement term (in years) | 5 years | |||
Minimum | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Minimum | Cheyenne, Wyoming | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Minimum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related party transactions | ||||
Required renewal notice (days) | 90 days | |||
Maximum | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days | |||
Maximum | Cheyenne, Wyoming | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days | |||
Maximum | Cheyenne, Wyoming And Gilbert, Arizona | ||||
Related party transactions | ||||
Required renewal notice (days) | 120 days |
RELATED PARTY TRANSACTIONS -_17
RELATED PARTY TRANSACTIONS - DISH NETWORK - Hughes Broadband and Master Services Agreement (Details) - DISH Network - Hughes Broadband Master Services Agreement - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Related party transactions | |||||
Automatic renewal period (in years) | 1 year | ||||
Required minimum notice for termination of agreement (days) | 90 days | ||||
Cost of sales | $ 1.9 | $ 1.9 | $ 3.6 | $ 3.8 |
RELATED PARTY TRANSACTIONS -_18
RELATED PARTY TRANSACTIONS - DISH NETWORK - 2019 TT&C Agreement (Details) - DISH Network - TT&C Agreement | 1 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2019 | |
Related party transactions | ||
Term of renewal option (in years) | 3 years | 1 year |
Required renewal notice (days) | 90 days | |
Termination notice required (months) | 12 months |
RELATED PARTY TRANSACTIONS -_19
RELATED PARTY TRANSACTIONS - DISH NETWORK - Referral Marketing Agreement (Details) | 1 Months Ended |
Jun. 30, 2021 | |
DISH Network | Referral Marketing Agreement | |
Related party transactions | |
Termination notice | 90 days |
RELATED PARTY TRANSACTIONS -_20
RELATED PARTY TRANSACTIONS - DISH NETWORK - Other Agreements (Details) - shares | 1 Months Ended | |
Sep. 30, 2019 | May 31, 2019 | |
Class A common stock | DISH Network | ||
Related party transactions | ||
Entity shares issued per acquiree share (in shares) | 0.23523769 | 0.23523769 |
RELATED PARTY TRANSACTIONS -_21
RELATED PARTY TRANSACTIONS - OTHER (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Hughes Systique | ||||
Related party transactions | ||||
Ownership interest in related party (as a percent) | 42% | |||
Ownership interest percentage by related party | 25% | |||
TerreStar Solutions, Inc. | ||||
Related party transactions | ||||
Investment nonvoting interest ownership percentage(at least) | 15% | 15% | ||
Services and other revenue - DISH Network | $ 500,000 | $ 500,000 | $ 1,000,000 | $ 900,000 |
Trade accounts receivable - DISH Network | $ 500,000 | $ 500,000 |
CONTINGENCIES - Narrative (Deta
CONTINGENCIES - Narrative (Details) | Sep. 01, 2020 |
License Fee Dispute | |
Loss Contingencies [Line Items] | |
Payment schedule term | 10 years |
CONTINGENCIES - Accrual For Lic
CONTINGENCIES - Accrual For License Fees (Details) - License Fee Dispute - Hughes Network Systems - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||
Total accrual | $ 68,171 | $ 80,662 | |
Less: Payments | (18,671) | $ (8,451) | |
Additional license fees | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,596 | 3,812 | |
Penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | 3,691 | 3,912 | |
Interest and interest on penalties | |||
Loss Contingencies [Line Items] | |||
Total accrual | $ 79,555 | $ 81,389 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of business segments | 2 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Revenue, EBITDA, and Capital Expenditures by Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting | ||||
Total revenue | $ 501,083 | $ 501,873 | $ 1,004,741 | $ 987,103 |
Capital expenditures | 64,861 | 72,187 | 125,882 | 154,382 |
EBITDA | 172,019 | 203,993 | 355,224 | 395,399 |
Hughes | ||||
Segment Reporting | ||||
Total revenue | 491,841 | 492,276 | 985,947 | 968,136 |
ESS | ||||
Segment Reporting | ||||
Total revenue | 4,502 | 4,195 | 8,778 | 8,196 |
All Other Segments and Eliminations | ||||
Segment Reporting | ||||
Total revenue | 4,740 | 5,402 | 10,016 | 10,771 |
Intersegment revenue | ||||
Segment Reporting | ||||
Total revenue | (348) | (88) | (546) | (176) |
Intersegment revenue | Hughes | ||||
Segment Reporting | ||||
Total revenue | 0 | 0 | 0 | 0 |
Intersegment revenue | ESS | ||||
Segment Reporting | ||||
Total revenue | 348 | 88 | 546 | 176 |
Operating segments | Hughes | ||||
Segment Reporting | ||||
Total revenue | 491,841 | 492,276 | 985,947 | 968,136 |
Capital expenditures | 64,861 | 72,187 | 125,882 | 154,382 |
EBITDA | 179,928 | 210,194 | 371,098 | 408,772 |
Operating segments | ESS | ||||
Segment Reporting | ||||
Total revenue | 4,850 | 4,283 | 9,324 | 8,372 |
Capital expenditures | 0 | 0 | 0 | 0 |
EBITDA | 3,521 | 2,243 | 6,212 | 4,162 |
Corporate, Non-Segment | ||||
Segment Reporting | ||||
Total revenue | 4,392 | 5,314 | 9,470 | 10,595 |
Capital expenditures | 0 | 0 | 0 | 0 |
EBITDA | $ (11,430) | $ (8,444) | $ (22,086) | $ (17,535) |
SEGMENT REPORTING- Schedule of
SEGMENT REPORTING- Schedule of Reconciliation of EBITDA to Reported Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Income (loss) before income taxes | $ 39,944 | $ 54,009 | $ 85,885 | $ 82,276 |
Interest income, net | (4,279) | (1,682) | (6,559) | (4,076) |
Interest expense, net of amounts capitalized | 23,096 | 37,083 | 46,474 | 79,005 |
Depreciation and amortization | 109,864 | 112,303 | 223,542 | 234,967 |
Net loss (income) attributable to non-controlling interests | 3,394 | 2,280 | 5,882 | 3,227 |
EBITDA | $ 172,019 | $ 203,993 | $ 355,224 | $ 395,399 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Other Current Assets and Other Non-Current Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Other current assets, net: | ||||
Inventory | $ 110,399 | $ 102,907 | ||
Prepaids and deposits | 21,637 | 27,737 | ||
Other, net | 16,318 | 20,124 | ||
Total other current assets | 272,684 | 276,844 | ||
Other non-current assets, net: | ||||
Capitalized software, net | 120,421 | 124,701 | ||
Contract acquisition costs, net | 74,702 | 82,986 | $ 92,723 | $ 99,837 |
Related party receivables - EchoStar | 52,118 | 56,055 | ||
Deferred tax assets, net | 5,302 | 5,411 | ||
Restricted cash | 2,053 | 980 | ||
Contract fulfillment costs, net | 1,589 | 1,721 | ||
Other, net | 32,962 | 30,986 | ||
Total other non-current assets, net | 289,147 | 302,840 | ||
EchoStar | ||||
Other current assets, net: | ||||
Related party receivables | 120,258 | 122,619 | ||
DISH Network | ||||
Other current assets, net: | ||||
Related party receivables | $ 4,072 | $ 3,457 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Accrued Expenses and Other Current Liabilities and Other Non-current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accrued expenses and other current liabilities: | ||
Accrued compensation | $ 38,336 | $ 45,630 |
Operating lease obligation | 17,236 | 16,697 |
Accrued interest | 38,334 | 39,289 |
Accrued taxes | 10,959 | 9,790 |
Accrual for license fee dispute | 10,699 | 11,178 |
Other | 58,786 | 61,130 |
Accrued expenses and other current liabilities | 299,302 | 308,879 |
Other non-current liabilities: | ||
Accrual for license fee dispute | 57,472 | 69,484 |
Contract liabilities | 9,922 | 10,669 |
Other | 47,741 | 48,980 |
Total other non-current liabilities | $ 138,289 | $ 153,251 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
EchoStar | ||
Accrued expenses and other current liabilities: | ||
Trade accounts payable - DISH Network | $ 124,382 | $ 124,578 |
Other non-current liabilities: | ||
Related party payables - EchoStar | 23,154 | 24,118 |
Contract liabilities | 9,922 | 10,669 |
DISH Network | ||
Accrued expenses and other current liabilities: | ||
Trade accounts payable - DISH Network | $ 570 | $ 587 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 21,495 | $ 13,778 |
Work-in-process | 15,078 | 11,705 |
Finished goods | 73,826 | 77,424 |
Total inventory | $ 110,399 | $ 102,907 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION - Schedule of Noncash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | $ 49,845 | $ 75,947 |
Cash paid for income taxes | 6,173 | 3,741 |
Non-cash investing and financing activities: | ||
Increase (decrease) in capital expenditures included in accounts payable, net | (8,563) | 8,333 |
Non-cash net assets received as part of the India JV formation | $ 36,701 | $ 0 |
SUPPLEMENTAL GUARANTOR AND NO_3
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Narrative (Details) | Jun. 30, 2022 |
5 1/4% Senior Secured Notes due 2026 | Senior Secured Notes | |
Condensed Financial Statements, Captions [Line Items] | |
Interest rate | 5.25% |
6 5/8% Senior Unsecured Notes due 2026 | Senior Unsecured Notes | |
Condensed Financial Statements, Captions [Line Items] | |
Interest rate | 6.625% |
SUPPLEMENTAL GUARANTOR AND NO_4
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||||||
Cash and cash equivalents | $ 924,912 | $ 429,168 | ||||
Marketable investment securities | 360,648 | 854,502 | ||||
Trade accounts receivable and contract assets, net | 224,015 | 182,063 | ||||
Other current assets, net | 272,684 | 276,844 | ||||
Total current assets | 1,782,259 | 1,742,577 | ||||
Non-current assets: | ||||||
Property and equipment, net | 1,452,462 | 1,523,447 | ||||
Operating lease right-of-use assets | 151,036 | 148,221 | ||||
Goodwill | 533,505 | 511,086 | ||||
Regulatory authorizations, net | 408,824 | 408,959 | $ 409,883 | $ 410,451 | ||
Other intangible assets, net | 17,018 | 13,984 | ||||
Other investments, net | 86,210 | 91,226 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Other non-current assets, net | 289,147 | 302,840 | ||||
Total non-current assets | 2,938,202 | 2,999,763 | ||||
Total assets | 4,720,461 | 4,742,340 | ||||
Current liabilities: | ||||||
Trade accounts payable | 101,128 | 105,477 | ||||
Contract liabilities | 134,856 | 141,343 | ||||
Accrued expenses and other current liabilities | 299,302 | 308,879 | ||||
Total current liabilities | 535,286 | 555,699 | ||||
Non-current liabilities: | ||||||
Long-term debt, net | 1,496,379 | 1,495,994 | ||||
Deferred tax liabilities, net | 349,762 | 334,406 | ||||
Operating lease liabilities | 136,592 | 134,001 | ||||
Other non-current liabilities | 138,289 | 153,251 | ||||
Total non-current liabilities | 2,121,022 | 2,117,652 | ||||
Total liabilities | 2,656,308 | 2,673,351 | ||||
Shareholder's equity: | ||||||
Total Hughes Satellite Systems Corporation shareholder's equity | 1,962,826 | 2,008,736 | ||||
Non-controlling interests | 101,327 | 60,253 | ||||
Total shareholder's equity | 2,064,153 | $ 2,077,100 | 2,068,989 | $ 2,149,478 | $ 2,066,436 | $ 2,076,376 |
Total liabilities and shareholder's equity | 4,720,461 | 4,742,340 | ||||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Marketable investment securities | 0 | 0 | ||||
Trade accounts receivable and contract assets, net | 0 | 0 | ||||
Other current assets, net | (1,214,421) | (1,044,495) | ||||
Total current assets | (1,214,421) | (1,044,495) | ||||
Non-current assets: | ||||||
Property and equipment, net | 0 | 0 | ||||
Operating lease right-of-use assets | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Regulatory authorizations, net | 0 | 0 | ||||
Other intangible assets, net | 0 | 0 | ||||
Other investments, net | 0 | 0 | ||||
Investment in subsidiaries | (3,549,271) | (3,419,137) | ||||
Other non-current assets, net | (155,779) | (94,805) | ||||
Total non-current assets | (3,705,050) | (3,513,942) | ||||
Total assets | (4,919,471) | (4,558,437) | ||||
Current liabilities: | ||||||
Trade accounts payable | 0 | 0 | ||||
Contract liabilities | 0 | 0 | ||||
Accrued expenses and other current liabilities | (1,214,421) | (1,044,495) | ||||
Total current liabilities | (1,214,421) | (1,044,495) | ||||
Non-current liabilities: | ||||||
Long-term debt, net | 0 | 0 | ||||
Deferred tax liabilities, net | (649) | 0 | ||||
Operating lease liabilities | 0 | 0 | ||||
Other non-current liabilities | (155,130) | (94,804) | ||||
Total non-current liabilities | (155,779) | (94,804) | ||||
Total liabilities | (1,370,200) | (1,139,299) | ||||
Shareholder's equity: | ||||||
Total Hughes Satellite Systems Corporation shareholder's equity | (3,549,271) | (3,419,138) | ||||
Non-controlling interests | 0 | 0 | ||||
Total shareholder's equity | (3,549,271) | (3,419,138) | ||||
Total liabilities and shareholder's equity | (4,919,471) | (4,558,437) | ||||
Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 837,441 | 324,764 | ||||
Marketable investment securities | 354,184 | 854,502 | ||||
Trade accounts receivable and contract assets, net | 0 | 0 | ||||
Other current assets, net | 65,548 | 170,283 | ||||
Total current assets | 1,257,173 | 1,349,549 | ||||
Non-current assets: | ||||||
Property and equipment, net | 0 | 0 | ||||
Operating lease right-of-use assets | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Regulatory authorizations, net | 0 | 0 | ||||
Other intangible assets, net | 0 | 0 | ||||
Other investments, net | 0 | 0 | ||||
Investment in subsidiaries | 3,212,854 | 3,126,926 | ||||
Other non-current assets, net | 1,180 | 1,191 | ||||
Total non-current assets | 3,214,034 | 3,128,117 | ||||
Total assets | 4,471,207 | 4,477,666 | ||||
Current liabilities: | ||||||
Trade accounts payable | 0 | 0 | ||||
Contract liabilities | 0 | 0 | ||||
Accrued expenses and other current liabilities | 1,012,002 | 972,936 | ||||
Total current liabilities | 1,012,002 | 972,936 | ||||
Non-current liabilities: | ||||||
Long-term debt, net | 1,496,379 | 1,495,994 | ||||
Deferred tax liabilities, net | 0 | 0 | ||||
Operating lease liabilities | 0 | 0 | ||||
Other non-current liabilities | 0 | 0 | ||||
Total non-current liabilities | 1,496,379 | 1,495,994 | ||||
Total liabilities | 2,508,381 | 2,468,930 | ||||
Shareholder's equity: | ||||||
Total Hughes Satellite Systems Corporation shareholder's equity | 1,962,826 | 2,008,736 | ||||
Non-controlling interests | 0 | 0 | ||||
Total shareholder's equity | 1,962,826 | 2,008,736 | ||||
Total liabilities and shareholder's equity | 4,471,207 | 4,477,666 | ||||
Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 19,791 | 42,550 | ||||
Marketable investment securities | 0 | 0 | ||||
Trade accounts receivable and contract assets, net | 158,861 | 127,350 | ||||
Other current assets, net | 1,204,000 | 1,056,871 | ||||
Total current assets | 1,382,652 | 1,226,771 | ||||
Non-current assets: | ||||||
Property and equipment, net | 1,164,939 | 1,209,859 | ||||
Operating lease right-of-use assets | 122,655 | 117,912 | ||||
Goodwill | 504,173 | 504,173 | ||||
Regulatory authorizations, net | 400,000 | 400,000 | ||||
Other intangible assets, net | 13,241 | 13,984 | ||||
Other investments, net | 8,039 | 9,600 | ||||
Investment in subsidiaries | 336,417 | 292,211 | ||||
Other non-current assets, net | 285,181 | 299,149 | ||||
Total non-current assets | 2,834,645 | 2,846,888 | ||||
Total assets | 4,217,297 | 4,073,659 | ||||
Current liabilities: | ||||||
Trade accounts payable | 89,909 | 92,156 | ||||
Contract liabilities | 130,241 | 134,474 | ||||
Accrued expenses and other current liabilities | 216,435 | 218,463 | ||||
Total current liabilities | 436,585 | 445,093 | ||||
Non-current liabilities: | ||||||
Long-term debt, net | 0 | 0 | ||||
Deferred tax liabilities, net | 337,589 | 334,148 | ||||
Operating lease liabilities | 112,850 | 108,431 | ||||
Other non-current liabilities | 117,980 | 59,623 | ||||
Total non-current liabilities | 568,419 | 502,202 | ||||
Total liabilities | 1,005,004 | 947,295 | ||||
Shareholder's equity: | ||||||
Total Hughes Satellite Systems Corporation shareholder's equity | 3,212,293 | 3,126,364 | ||||
Non-controlling interests | 0 | 0 | ||||
Total shareholder's equity | 3,212,293 | 3,126,364 | ||||
Total liabilities and shareholder's equity | 4,217,297 | 4,073,659 | ||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 67,680 | 61,854 | ||||
Marketable investment securities | 6,464 | 0 | ||||
Trade accounts receivable and contract assets, net | 65,154 | 54,713 | ||||
Other current assets, net | 217,557 | 94,185 | ||||
Total current assets | 356,855 | 210,752 | ||||
Non-current assets: | ||||||
Property and equipment, net | 287,523 | 313,588 | ||||
Operating lease right-of-use assets | 28,381 | 30,309 | ||||
Goodwill | 29,332 | 6,913 | ||||
Regulatory authorizations, net | 8,824 | 8,959 | ||||
Other intangible assets, net | 3,777 | 0 | ||||
Other investments, net | 78,171 | 81,626 | ||||
Investment in subsidiaries | 0 | 0 | ||||
Other non-current assets, net | 158,565 | 97,305 | ||||
Total non-current assets | 594,573 | 538,700 | ||||
Total assets | 951,428 | 749,452 | ||||
Current liabilities: | ||||||
Trade accounts payable | 11,219 | 13,321 | ||||
Contract liabilities | 4,615 | 6,869 | ||||
Accrued expenses and other current liabilities | 285,286 | 161,975 | ||||
Total current liabilities | 301,120 | 182,165 | ||||
Non-current liabilities: | ||||||
Long-term debt, net | 0 | |||||
Deferred tax liabilities, net | 12,822 | 258 | ||||
Operating lease liabilities | 23,742 | 25,570 | ||||
Other non-current liabilities | 175,439 | 188,432 | ||||
Total non-current liabilities | 212,003 | 214,260 | ||||
Total liabilities | 513,123 | 396,425 | ||||
Shareholder's equity: | ||||||
Total Hughes Satellite Systems Corporation shareholder's equity | 336,978 | 292,774 | ||||
Non-controlling interests | 101,327 | 60,253 | ||||
Total shareholder's equity | 438,305 | 353,027 | ||||
Total liabilities and shareholder's equity | $ 951,428 | $ 749,452 |
SUPPLEMENTAL GUARANTOR AND NO_5
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 501,083 | $ 501,873 | $ 1,004,741 | $ 987,103 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 106,825 | 104,016 | 218,443 | 208,386 |
Research and development expenses | 8,765 | 7,441 | 16,381 | 14,986 |
Depreciation and amortization | 109,864 | 112,303 | 223,542 | 234,967 |
Impairment of long-lived assets | 0 | 0 | 0 | 210 |
Total costs and expenses | 438,118 | 415,812 | 879,489 | 827,153 |
Operating income (loss) | 62,965 | 86,061 | 125,252 | 159,950 |
Other income (expense): | ||||
Interest income, net | 4,279 | 1,682 | 6,559 | 4,076 |
Interest expense, net of amounts capitalized | (23,096) | (37,083) | (46,474) | (79,005) |
Gains (losses) on investments, net | 214 | 2,094 | 214 | 2,094 |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,301) | (1,269) | (3,015) | (3,030) |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 | 0 | 0 |
Foreign currency transaction gains (losses), net | (2,878) | 535 | 3,777 | (2,825) |
Other, net | (239) | 1,989 | (428) | 1,016 |
Total other income (expense), net | (23,021) | (32,052) | (39,367) | (77,674) |
Income (loss) before income taxes | 39,944 | 54,009 | 85,885 | 82,276 |
Income tax benefit (provision), net | (14,844) | (18,349) | (29,972) | (28,986) |
Net income (loss) | 25,100 | 35,660 | 55,913 | 53,290 |
Less: Net loss (income) attributable to non-controlling interests | 3,394 | 2,280 | 5,882 | 3,227 |
Net income (loss) attributable to HSSC | 28,494 | 37,940 | 61,795 | 56,517 |
Comprehensive income (loss): | ||||
Net income (loss) | 25,100 | 35,660 | 55,913 | 53,290 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (39,143) | 42,060 | 7,543 | 8,318 |
Unrealized gains (losses) on available-for-sale securities | (46) | 118 | (516) | 30 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 3 | 0 | 3 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | (39,186) | 42,178 | 7,030 | 8,348 |
Comprehensive income (loss) | (14,086) | 77,838 | 62,943 | 61,638 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 10,387 | (6,060) | 3,319 | 497 |
Comprehensive income (loss) attributable to HSSC | (3,699) | 71,778 | 66,262 | 62,135 |
Eliminations | ||||
Revenue: | ||||
Total revenue | (10,283) | (24,513) | (22,604) | (49,766) |
Costs and expenses: | ||||
Selling, general and administrative expenses | (447) | (415) | (898) | (985) |
Research and development expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | |||
Total costs and expenses | (10,283) | (24,513) | (22,604) | (49,766) |
Operating income (loss) | 0 | 0 | 0 | 0 |
Other income (expense): | ||||
Interest income, net | (1,277) | (1,229) | (2,541) | (2,439) |
Interest expense, net of amounts capitalized | 1,277 | 1,229 | 2,541 | 2,439 |
Gains (losses) on investments, net | 0 | 0 | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | (18,158) | (50,257) | (58,072) | (87,783) |
Foreign currency transaction gains (losses), net | 0 | 0 | 0 | 0 |
Other, net | 0 | 0 | 0 | 0 |
Total other income (expense), net | (18,158) | (50,257) | (58,072) | (87,783) |
Income (loss) before income taxes | (18,158) | (50,257) | (58,072) | (87,783) |
Income tax benefit (provision), net | 0 | 0 | 0 | 0 |
Net income (loss) | (18,158) | (50,257) | (58,072) | (87,783) |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | (18,158) | (50,257) | (58,072) | (87,783) |
Comprehensive income (loss): | ||||
Net income (loss) | (18,158) | (50,257) | (58,072) | (87,783) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 | 0 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | ||
Equity in other comprehensive income (loss) of subsidiaries, net | 64,300 | (67,440) | (9,960) | (11,176) |
Total other comprehensive income (loss), net of tax | 64,300 | (67,440) | (9,960) | (11,176) |
Comprehensive income (loss) | 46,142 | (117,697) | (68,032) | (98,959) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | 46,142 | (117,697) | (68,032) | (98,959) |
Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 0 | 0 | 0 | 0 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Impairment of long-lived assets | 0 | |||
Total costs and expenses | 0 | 0 | 0 | 0 |
Operating income (loss) | 0 | 0 | 0 | 0 |
Other income (expense): | ||||
Interest income, net | 3,185 | 876 | 4,311 | 1,912 |
Interest expense, net of amounts capitalized | (22,460) | (35,484) | (44,917) | (75,728) |
Gains (losses) on investments, net | (3) | (6) | (3) | (6) |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 43,364 | 65,004 | 93,120 | 115,147 |
Foreign currency transaction gains (losses), net | 0 | 0 | 0 | 0 |
Other, net | 0 | (357) | 0 | (1,939) |
Total other income (expense), net | 24,086 | 30,033 | 52,511 | 39,386 |
Income (loss) before income taxes | 24,086 | 30,033 | 52,511 | 39,386 |
Income tax benefit (provision), net | 4,408 | 7,907 | 9,284 | 17,131 |
Net income (loss) | 28,494 | 37,940 | 61,795 | 56,517 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | 28,494 | 37,940 | 61,795 | 56,517 |
Comprehensive income (loss): | ||||
Net income (loss) | 28,494 | 37,940 | 61,795 | 56,517 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | (46) | 118 | (516) | 30 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 3 | 3 | ||
Equity in other comprehensive income (loss) of subsidiaries, net | (32,150) | 33,720 | 4,980 | 5,588 |
Total other comprehensive income (loss), net of tax | (32,193) | 33,838 | 4,467 | 5,618 |
Comprehensive income (loss) | (3,699) | 71,778 | 66,262 | 62,135 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | (3,699) | 71,778 | 66,262 | 62,135 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 424,401 | 440,319 | 851,664 | 865,053 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 84,969 | 81,512 | 175,603 | 165,055 |
Research and development expenses | 8,680 | 7,276 | 16,216 | 14,634 |
Depreciation and amortization | 72,661 | 82,443 | 150,967 | 176,695 |
Impairment of long-lived assets | 210 | |||
Total costs and expenses | 342,715 | 341,409 | 694,230 | 686,409 |
Operating income (loss) | 81,686 | 98,910 | 157,434 | 178,644 |
Other income (expense): | ||||
Interest income, net | 1,357 | 1,306 | 2,702 | 2,593 |
Interest expense, net of amounts capitalized | 955 | 261 | 1,779 | 306 |
Gains (losses) on investments, net | 217 | 2,100 | 217 | 2,100 |
Equity in earnings (losses) of unconsolidated affiliates, net | 338 | 406 | 440 | 625 |
Equity in earnings (losses) of subsidiaries, net | (25,206) | (14,747) | (35,048) | (27,364) |
Foreign currency transaction gains (losses), net | 2,910 | (16) | 3,807 | (19) |
Other, net | (216) | 2,410 | (271) | 3,154 |
Total other income (expense), net | (19,645) | (8,280) | (26,374) | (18,605) |
Income (loss) before income taxes | 62,041 | 90,630 | 131,060 | 160,039 |
Income tax benefit (provision), net | (18,677) | (25,626) | (37,940) | (44,892) |
Net income (loss) | 43,364 | 65,004 | 93,120 | 115,147 |
Less: Net loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to HSSC | 43,364 | 65,004 | 93,120 | 115,147 |
Comprehensive income (loss): | ||||
Net income (loss) | 43,364 | 65,004 | 93,120 | 115,147 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 | 0 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | ||
Equity in other comprehensive income (loss) of subsidiaries, net | (32,150) | 33,720 | 4,980 | 5,588 |
Total other comprehensive income (loss), net of tax | (32,150) | 33,720 | 4,980 | 5,588 |
Comprehensive income (loss) | 11,214 | 98,724 | 98,100 | 120,735 |
Less: Comprehensive loss (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Comprehensive income (loss) attributable to HSSC | 11,214 | 98,724 | 98,100 | 120,735 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 86,965 | 86,067 | 175,681 | 171,816 |
Costs and expenses: | ||||
Selling, general and administrative expenses | 22,303 | 22,919 | 43,738 | 44,316 |
Research and development expenses | 85 | 165 | 165 | 352 |
Depreciation and amortization | 37,203 | 29,860 | 72,575 | 58,272 |
Impairment of long-lived assets | 0 | |||
Total costs and expenses | 105,686 | 98,916 | 207,863 | 190,510 |
Operating income (loss) | (18,721) | (12,849) | (32,182) | (18,694) |
Other income (expense): | ||||
Interest income, net | 1,014 | 729 | 2,087 | 2,010 |
Interest expense, net of amounts capitalized | (2,868) | (3,089) | (5,877) | (6,022) |
Gains (losses) on investments, net | 0 | 0 | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,639) | (1,675) | (3,455) | (3,655) |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 | 0 | 0 |
Foreign currency transaction gains (losses), net | (5,788) | 551 | (30) | (2,806) |
Other, net | (23) | (64) | (157) | (199) |
Total other income (expense), net | (9,304) | (3,548) | (7,432) | (10,672) |
Income (loss) before income taxes | (28,025) | (16,397) | (39,614) | (29,366) |
Income tax benefit (provision), net | (575) | (630) | (1,316) | (1,225) |
Net income (loss) | (28,600) | (17,027) | (40,930) | (30,591) |
Less: Net loss (income) attributable to non-controlling interests | 3,394 | 2,280 | 5,882 | 3,227 |
Net income (loss) attributable to HSSC | (25,206) | (14,747) | (35,048) | (27,364) |
Comprehensive income (loss): | ||||
Net income (loss) | (28,600) | (17,027) | (40,930) | (30,591) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (39,143) | 42,060 | 7,543 | 8,318 |
Unrealized gains (losses) on available-for-sale securities | 0 | 0 | 0 | 0 |
Amounts reclassified to net income (loss): | ||||
Realized losses (gains) on available-for-sale debt securities | 0 | 0 | ||
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | (39,143) | 42,060 | 7,543 | 8,318 |
Comprehensive income (loss) | (67,743) | 25,033 | (33,387) | (22,273) |
Less: Comprehensive loss (income) attributable to non-controlling interests | 10,387 | (6,060) | 3,319 | 497 |
Comprehensive income (loss) attributable to HSSC | (57,356) | 18,973 | (30,068) | (21,776) |
Services and other revenue | ||||
Revenue: | ||||
Total revenue | 416,463 | 433,317 | 837,404 | 866,308 |
Costs and expenses: | ||||
Cost of sales | 142,616 | 137,550 | 281,970 | 268,962 |
Services and other revenue | Eliminations | ||||
Revenue: | ||||
Total revenue | (6,099) | (8,302) | (12,119) | (16,711) |
Costs and expenses: | ||||
Cost of sales | (6,760) | (9,564) | (14,884) | (17,588) |
Services and other revenue | Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 0 | 0 | 0 | 0 |
Costs and expenses: | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Services and other revenue | Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 340,844 | 361,700 | 685,122 | 725,397 |
Costs and expenses: | ||||
Cost of sales | 106,689 | 105,836 | 212,310 | 209,043 |
Services and other revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 81,718 | 79,919 | 164,401 | 157,622 |
Costs and expenses: | ||||
Cost of sales | 42,687 | 41,278 | 84,544 | 77,507 |
Equipment revenue | ||||
Revenue: | ||||
Total revenue | 84,620 | 68,556 | 167,337 | 120,795 |
Costs and expenses: | ||||
Cost of sales | 70,048 | 54,502 | 139,153 | 99,642 |
Equipment revenue | Eliminations | ||||
Revenue: | ||||
Total revenue | (4,184) | (16,211) | (10,485) | (33,055) |
Costs and expenses: | ||||
Cost of sales | (3,076) | (14,534) | (6,822) | (31,193) |
Equipment revenue | Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 0 | 0 | 0 | 0 |
Costs and expenses: | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Equipment revenue | Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 83,557 | 78,619 | 166,542 | 139,656 |
Costs and expenses: | ||||
Cost of sales | 69,716 | 64,342 | 139,134 | 120,772 |
Equipment revenue | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Revenue: | ||||
Total revenue | 5,247 | 6,148 | 11,280 | 14,194 |
Costs and expenses: | ||||
Cost of sales | $ 3,408 | $ 4,694 | $ 6,841 | $ 10,063 |
SUPPLEMENTAL GUARANTOR AND NO_6
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION - Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ 25,100 | $ 35,660 | $ 55,913 | $ 53,290 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 195,997 | 266,095 | ||
Net cash provided by (used for) operating activities | 251,910 | 319,385 | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | (171,005) | (816,386) | ||
Sales and maturities of marketable investment securities | 662,347 | 1,409,820 | ||
Expenditures for property and equipment | (125,882) | (154,382) | ||
Expenditures for externally marketed software | (11,967) | (16,835) | ||
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 | ||
Sales of other investments | 0 | 9,016 | ||
India JV formation | 7,892 | 0 | ||
Dividend received from unconsolidated affiliate | 2,000 | 0 | ||
Net cash provided by (used for) investing activities | 347,601 | 431,233 | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | (901,818) | ||
Payment of finance lease obligations | (114) | (476) | ||
Payment of in-orbit incentive obligations | (1,908) | (1,431) | ||
Contribution by non-controlling interest holder | 0 | 9,880 | ||
Dividend paid to EchoStar | (100,000) | 0 | ||
Other, net | 0 | (966) | ||
Contribution (distributions) and advances (to) from parent, net | 0 | 0 | ||
Net cash provided by (used for) financing activities | (102,022) | (894,811) | ||
Effect of exchange rates on cash and cash equivalents | (672) | (348) | ||
Net increase (decrease) in cash and cash equivalents | 496,817 | (144,541) | ||
Cash and cash equivalents, including restricted amounts, beginning of period | 430,148 | 741,297 | ||
Cash and cash equivalents, including restricted amounts, end of period | 926,965 | 596,756 | 926,965 | 596,756 |
Eliminations | ||||
Cash flows from operating activities: | ||||
Net income (loss) | (18,158) | (50,257) | (58,072) | (87,783) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 58,072 | 87,782 | ||
Net cash provided by (used for) operating activities | 0 | (1) | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | 0 | 0 | ||
Sales and maturities of marketable investment securities | 0 | 0 | ||
Expenditures for property and equipment | 0 | 0 | ||
Expenditures for externally marketed software | 0 | 0 | ||
Distributions (contributions) and advances from (to) subsidiaries, net | (143,460) | (146,237) | ||
Sales of other investments | 0 | |||
India JV formation | 0 | |||
Dividend received from unconsolidated affiliate | 0 | |||
Net cash provided by (used for) investing activities | (143,460) | (146,237) | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | |||
Payment of finance lease obligations | 0 | 0 | ||
Payment of in-orbit incentive obligations | 0 | 0 | ||
Contribution by non-controlling interest holder | 0 | |||
Dividend paid to EchoStar | 0 | |||
Other, net | 0 | |||
Contribution (distributions) and advances (to) from parent, net | 143,460 | 146,237 | ||
Net cash provided by (used for) financing activities | 143,460 | 146,237 | ||
Effect of exchange rates on cash and cash equivalents | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | 0 | (1) | ||
Cash and cash equivalents, including restricted amounts, beginning of period | 0 | 0 | ||
Cash and cash equivalents, including restricted amounts, end of period | 0 | (1) | 0 | (1) |
Hughes Satellite Systems Corporation | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 28,494 | 37,940 | 61,795 | 56,517 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (90,384) | (129,770) | ||
Net cash provided by (used for) operating activities | (28,589) | (73,253) | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | (164,541) | (816,386) | ||
Sales and maturities of marketable investment securities | 662,347 | 1,409,820 | ||
Expenditures for property and equipment | 0 | 0 | ||
Expenditures for externally marketed software | 0 | 0 | ||
Distributions (contributions) and advances from (to) subsidiaries, net | 143,460 | 189,828 | ||
Sales of other investments | 0 | |||
India JV formation | 0 | |||
Dividend received from unconsolidated affiliate | 0 | |||
Net cash provided by (used for) investing activities | 641,266 | 783,262 | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | (901,818) | |||
Payment of finance lease obligations | 0 | 0 | ||
Payment of in-orbit incentive obligations | 0 | 0 | ||
Contribution by non-controlling interest holder | 0 | |||
Dividend paid to EchoStar | (100,000) | |||
Other, net | 0 | |||
Contribution (distributions) and advances (to) from parent, net | 0 | 0 | ||
Net cash provided by (used for) financing activities | (100,000) | (901,818) | ||
Effect of exchange rates on cash and cash equivalents | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | 512,677 | (191,809) | ||
Cash and cash equivalents, including restricted amounts, beginning of period | 324,764 | 649,851 | ||
Cash and cash equivalents, including restricted amounts, end of period | 837,441 | 458,042 | 837,441 | 458,042 |
Guarantor Subsidiaries | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income (loss) | 43,364 | 65,004 | 93,120 | 115,147 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 142,006 | 244,556 | ||
Net cash provided by (used for) operating activities | 235,126 | 359,703 | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | 0 | 0 | ||
Sales and maturities of marketable investment securities | 0 | 0 | ||
Expenditures for property and equipment | (94,658) | (91,630) | ||
Expenditures for externally marketed software | (11,967) | (16,835) | ||
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | (43,591) | ||
Sales of other investments | 9,016 | |||
India JV formation | 7,892 | |||
Dividend received from unconsolidated affiliate | 2,000 | |||
Net cash provided by (used for) investing activities | (112,517) | (143,040) | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | |||
Payment of finance lease obligations | 0 | 0 | ||
Payment of in-orbit incentive obligations | (1,908) | (1,431) | ||
Contribution by non-controlling interest holder | 0 | |||
Dividend paid to EchoStar | 0 | |||
Other, net | 0 | |||
Contribution (distributions) and advances (to) from parent, net | (143,460) | (189,828) | ||
Net cash provided by (used for) financing activities | (145,368) | (191,259) | ||
Effect of exchange rates on cash and cash equivalents | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | (22,759) | 25,404 | ||
Cash and cash equivalents, including restricted amounts, beginning of period | 42,550 | 46,055 | ||
Cash and cash equivalents, including restricted amounts, end of period | 19,791 | 71,459 | 19,791 | 71,459 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income (loss) | (28,600) | (17,027) | (40,930) | (30,591) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 86,303 | 63,527 | ||
Net cash provided by (used for) operating activities | 45,373 | 32,936 | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | (6,464) | 0 | ||
Sales and maturities of marketable investment securities | 0 | 0 | ||
Expenditures for property and equipment | (31,224) | (62,752) | ||
Expenditures for externally marketed software | 0 | 0 | ||
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 | ||
Sales of other investments | 0 | |||
India JV formation | 0 | |||
Dividend received from unconsolidated affiliate | 0 | |||
Net cash provided by (used for) investing activities | (37,688) | (62,752) | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | 0 | |||
Payment of finance lease obligations | (114) | (476) | ||
Payment of in-orbit incentive obligations | 0 | 0 | ||
Contribution by non-controlling interest holder | 9,880 | |||
Dividend paid to EchoStar | 0 | |||
Other, net | (966) | |||
Contribution (distributions) and advances (to) from parent, net | 0 | 43,591 | ||
Net cash provided by (used for) financing activities | (114) | 52,029 | ||
Effect of exchange rates on cash and cash equivalents | (672) | (348) | ||
Net increase (decrease) in cash and cash equivalents | 6,899 | 21,865 | ||
Cash and cash equivalents, including restricted amounts, beginning of period | 62,834 | 45,391 | ||
Cash and cash equivalents, including restricted amounts, end of period | $ 69,733 | $ 67,256 | $ 69,733 | $ 67,256 |