Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Hughes Satellite Systems Corp | |
Entity Central Index Key | 1,533,758 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,078 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 2,161,126 | $ 2,070,964 |
Marketable investment securities, at fair value | 98,266 | 187,923 |
Trade accounts receivable, net of allowance for doubtful accounts of $11,371 and $12,752, respectively | 167,860 | 182,512 |
Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero | 47,717 | 19,323 |
Inventory | 79,422 | 62,638 |
Prepaids and deposits | 37,755 | 34,505 |
Advances to affiliates, net | 123,875 | 110,452 |
Other current assets | 11,728 | 11,809 |
Total current assets | 2,727,749 | 2,680,126 |
Noncurrent Assets: | ||
Restricted cash and cash equivalents | 7,552 | 11,820 |
Property and equipment, net of accumulated depreciation of $2,618,013 and $2,503,187, respectively | 2,858,757 | 2,294,726 |
Regulatory authorizations, net | 471,658 | 471,658 |
Goodwill | 504,173 | 504,173 |
Other intangible assets, net | 72,564 | 80,734 |
Investments in unconsolidated entities | 36,771 | 42,560 |
Other noncurrent assets, net | 252,790 | 295,737 |
Total noncurrent assets | 4,204,265 | 3,701,408 |
Total assets | 6,932,014 | 6,381,534 |
Current Liabilities: | ||
Trade accounts payable | 114,243 | 106,416 |
Current portion of long-term debt and capital lease obligations | 37,270 | 32,984 |
Advances from affiliates, net | 87 | 598 |
Deferred revenue and prepayments | 54,596 | 59,989 |
Accrued interest | 57,012 | 46,255 |
Accrued compensation | 22,466 | 33,457 |
Accrued expenses and other | 85,448 | 80,612 |
Total current liabilities | 371,122 | 360,311 |
Noncurrent Liabilities: | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 3,620,044 | 3,622,463 |
Deferred tax liabilities, net | 680,449 | 528,462 |
Advances from affiliates | 31,708 | 31,968 |
Other noncurrent liabilities | 112,172 | 83,307 |
Total noncurrent liabilities | 4,444,373 | 4,266,200 |
Total liabilities | 4,815,495 | 4,626,511 |
Commitments and Contingencies | ||
Shareholders’ Equity: | ||
Common stock, $0.01 par value; 1,000,000 shares authorized, 1,078 shares issued and outstanding at March 31, 2017 and 1,000 shares issued and outstanding December 31, 2016 | 0 | 0 |
Additional paid-in capital | 1,854,349 | 1,516,199 |
Accumulated other comprehensive loss | (46,800) | (60,719) |
Accumulated earnings | 295,848 | 286,713 |
Total HSS shareholders’ equity | 2,103,397 | 1,742,193 |
Noncontrolling interests | 13,122 | 12,830 |
Total shareholders’ equity | 2,116,519 | 1,755,023 |
Total liabilities and shareholders’ equity | 6,932,014 | 6,381,534 |
Hughes Retail Preferred Tracking Stock | ||
Shareholders’ Equity: | ||
Hughes Retail Preferred Tracking Stock, $.001 par value, zero authorized, issued and outstanding at March 31, 2017 and 300 shares authorized, 81.128 issued and outstanding at December 31, 2016 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Allowance for doubtful accounts on trade accounts receivable (in dollars) | $ 11,371,000 | $ 12,752,000 |
Allowance for doubtful accounts on trade accounts receivable - DISH Network (in dollars) | 0 | 0 |
Property and equipment, accumulated depreciation (in dollars) | $ 2,618,013,000 | $ 2,503,187,000 |
Common Stock | ||
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 | 1,000 |
Common stock, shares outstanding (in shares) | 1,078 | 1,000 |
Preferred Stock | ||
Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Hughes Retail Preferred Tracking Stock | ||
Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 0 | 300 |
Preferred Stock, shares issued (in shares) | 0 | 81.128 |
Preferred Stock, shares outstanding (in shares) | 0 | 81.128 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Services and other revenue - DISH Network | $ 111,490 | $ 113,075 |
Services and other revenue - other | 270,223 | 270,423 |
Equipment revenue - DISH Network | 31 | 2,769 |
Equipment revenue - other | 48,374 | 42,859 |
Total revenue | 430,118 | 429,126 |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 130,899 | 124,577 |
Cost of sales - equipment (exclusive of depreciation and amortization) | 44,226 | 43,108 |
Selling, general and administrative expenses | 74,378 | 70,915 |
Research and development expenses | 7,705 | 6,932 |
Depreciation and amortization | 112,220 | 102,369 |
Total costs and expenses | 369,428 | 347,901 |
Operating income | 60,690 | 81,225 |
Other Income (Expense): | ||
Interest income | 5,841 | 1,914 |
Interest expense, net of amounts capitalized | (59,837) | (38,031) |
Gains on marketable investment securities, net | 91 | 215 |
Other-than-temporary impairment loss on available-for-sale securities | (3,298) | 0 |
Equity in earnings of unconsolidated affiliate | 1,711 | 1,859 |
Other, net | 647 | 6,889 |
Total other expense, net | (54,845) | (27,154) |
Income before income taxes | 5,845 | 54,071 |
Income tax benefit (provision) | 3,582 | (20,041) |
Net income | 9,427 | 34,030 |
Less: Net income attributable to noncontrolling interests | 292 | 111 |
Net income attributable to HSS | 9,135 | 33,919 |
Comprehensive Income: | ||
Net income | 9,427 | 34,030 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 12,121 | 7,709 |
Unrealized losses on available-for-sale securities and other | (1,500) | (374) |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 3,298 | 0 |
Total other comprehensive income, net of tax | 13,919 | 7,335 |
Comprehensive income | 23,346 | 41,365 |
Less: Comprehensive income attributable to noncontrolling interests | 292 | 111 |
Comprehensive income attributable to HSS | $ 23,054 | $ 41,254 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholder's Equity Statement - USD ($) $ in Thousands | Total | Additional paid-in-capital | Accumulated Other Comprehensive Loss | Accumulated Earnings | Noncontrolling Interests |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,541,640 | $ 1,417,748 | $ (54,116) | $ 166,698 | $ 11,310 |
Stock-based compensation | 1,208 | 1,208 | 0 | 0 | 0 |
Transfer of EchoStar XXIII launch service contract from EchoStar | 70,300 | 70,300 | 0 | 0 | 0 |
Contribution to fund launch service contract payment | 11,875 | 11,875 | 0 | 0 | 0 |
Other | (179) | (179) | 0 | 0 | 0 |
Net income | 34,030 | 0 | 0 | 33,919 | 111 |
Foreign currency translation adjustments | 7,709 | 0 | 7,709 | 0 | 0 |
Unrealized gains and other-than-temporary impairment loss on marketable investment securities, net and other | (374) | 0 | (374) | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,666,209 | 1,500,952 | (46,781) | 200,617 | 11,421 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,755,023 | 1,516,199 | (60,719) | 286,713 | 12,830 |
Stock-based compensation | 1,221 | 1,221 | 0 | 0 | 0 |
Transfer of EchoStar XXIII launch service contract from EchoStar | (61,842) | (61,842) | 0 | 0 | 0 |
Contribution Of Satellite, Net of Deferred Taxes | 369,263 | 369,263 | 0 | 0 | 0 |
Contribution of net assets pursuant to Share Exchange | 219,662 | 219,662 | 0 | 0 | 0 |
Exchange of uplinking business | (190,221) | (190,221) | 0 | 0 | 0 |
Other | 67 | 67 | 0 | 0 | 0 |
Net income | 9,427 | 0 | 0 | 9,135 | 292 |
Foreign currency translation adjustments | 12,121 | 0 | 12,121 | 0 | 0 |
Unrealized gains and other-than-temporary impairment loss on marketable investment securities, net and other | 1,798 | 0 | 1,798 | 0 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 2,116,519 | $ 1,854,349 | $ (46,800) | $ 295,848 | $ 13,122 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 9,427,000 | $ 34,030,000 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 112,220,000 | 102,369,000 |
Equity in earnings of unconsolidated affiliate | (1,711,000) | (1,859,000) |
Amortization of debt issuance costs | 1,790,000 | 1,538,000 |
Losses (gains) and impairment on marketable investment securities, net | 3,207,000 | (215,000) |
Stock-based compensation | 1,221,000 | 1,208,000 |
Deferred tax provision | (4,409,000) | 19,231,000 |
Dividends received from unconsolidated entity | 7,500,000 | 0 |
Changes in current assets and current liabilities, net | (32,955,000) | 6,956,000 |
Changes in noncurrent assets and noncurrent liabilities, net | (4,081,000) | 4,078,000 |
Other, net | (132,000) | (608,000) |
Net cash flows from operating activities | 92,077,000 | 166,728,000 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | 0 | (134,572,000) |
Sales and maturities of marketable investment securities | 87,435,000 | 146,814,000 |
Expenditures for property and equipment | (74,175,000) | (128,957,000) |
Expenditures for externally marketed software | (10,832,000) | (5,959,000) |
Changes in restricted cash and cash equivalents | 4,268,000 | (662,000) |
Payment for EchoStar XXI launch services | 0 | (11,875,000) |
Net cash flows from investing activities | 6,696,000 | (135,211,000) |
Cash Flows from Financing Activities: | ||
Repayment of debt and capital lease obligations | (8,129,000) | (8,214,000) |
Advances from affiliates | 0 | 2,504,000 |
Capital contribution from EchoStar | 0 | 11,875,000 |
Other, net | (1,171,000) | 213,000 |
Net cash flows from financing activities | (9,300,000) | 6,378,000 |
Effect of exchange rates on cash and cash equivalents | 689,000 | 43,000 |
Net increase in cash and cash equivalents | 90,162,000 | 37,938,000 |
Cash and cash equivalents, beginning of period | 2,070,964,000 | 382,990,000 |
Cash and cash equivalents, end of period | 2,161,126,000 | 420,928,000 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest (including capitalized interest) | 54,021,000 | 10,182,000 |
Capitalized interest | 7,325,000 | 7,033,000 |
Cash paid for income taxes | 1,012,000 | 1,561,000 |
Property and equipment financed under capital lease obligations | 7,485,000 | 77,000 |
Increase (decrease) in capital expenditures included in accounts payable, net | (6,531,000) | (874,000) |
Transfer of launch service contracts from (to) EchoStar | (61,842,000) | 70,300,000 |
Contribution of net assets pursuant to Share Exchange Agreement | 219,662,000 | 0 |
Exchange of uplinking business net assets for HSS Tracking Stock | (190,221,000) | 0 |
Capitalized in-orbit incentive obligations | 31,000,000 | 0 |
EchoStar XIX [Member] | ||
Supplemental Disclosure of Cash Flow Information: | ||
Contribution of net assets pursuant to Share Exchange Agreement | $ 514,448,000 | $ 0 |
Organization and Business Activ
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2017 | |
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 “HSS,” the “Company,” “we,” “us” and/or “our”) is a holding company and a subsidiary of EchoStar Corporation (“EchoStar”). We are a global provider of satellite service operations, video delivery solutions, broadband satellite technologies and broadband services for home and small office customers. We deliver innovative network technologies, managed services, and various communications solutions for enterprise and government customers. In February 2014, HSS and EchoStar entered into agreements with certain subsidiaries of DISH Network Corporation (“DISH”) pursuant to which, effective March 1, 2014, (i) EchoStar issued Tracking Stock (as defined below) and HSS issued Tracking Stock (as defined below) to subsidiaries of DISH in exchange for five satellites (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI, and EchoStar XIV), including the assumption of related in-orbit incentive obligations, and $11.4 million in cash and (ii) DISH and certain of its subsidiaries began receiving certain satellite services on these five satellites from us (the “Satellite and Tracking Stock Transaction”). The Tracking Stock tracked the economic performance of the residential retail satellite broadband business of our Hughes segment, including certain operations, assets and liabilities attributed to such business (collectively, the “Hughes Retail Group” or “HRG”), and represented an aggregate 80.0% economic interest in HRG (the shares issued as HSS Tracking Stock represented a 28.11% economic interest in the HRG and the shares issued as EchoStar Tracking Stock represented a 51.89% economic interest in the HRG). In addition to the remaining 20.0% economic interest in the HRG, HSS retained all economic interest in the wholesale satellite broadband business and other businesses of HSS. On January 31, 2017, EchoStar and certain of its and our subsidiaries, entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries. Pursuant to the Share Exchange Agreement, on February 28, 2017, among other things, EchoStar and certain of its and our subsidiaries received all of the shares of the Hughes Retail Preferred Tracking Stock issued by EchoStar Corporation (the “EchoStar Tracking Stock”) and the Hughes Retail Preferred Tracking Stock issued by us (the “HSS Tracking Stock”, together with the EchoStar Tracking Stock, the “Tracking Stock”) in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of EchoStar’s EchoStar Technologies businesses and certain other assets (collectively, the “Share Exchange”). Following consummation of the Share Exchange, EchoStar no longer operates the EchoStar Technologies business segment and the EchoStar Tracking Stock and HSS Tracking Stock were retired and are no longer outstanding and all agreements, arrangements and policy statements with respect to such tracking stock terminated and are of no further effect. We currently operate in the following two business segments: • Hughes — which provides broadband satellite technologies and broadband services to home and small office customers and network technologies, managed services and communication solutions to domestic and international consumers and enterprise and government customers. The Hughes segment also provides managed services, hardware, and satellite services to large enterprises and government customers, and designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment provides satellite ground segment systems and terminals to mobile system operators. • EchoStar Satellite Services (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite service operations and video delivery solutions on a full-time and occasional-use basis primarily to DISH Network Corporation and its subsidiaries (“DISH Network”), Dish Mexico, S. de R.L. de C.V., a joint venture that EchoStar entered into in 2008 (“Dish Mexico”), United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, programmers, and private enterprise customers. We also manage satellite operations for certain satellites owned by DISH Network. Our operations also include various corporate departments (primarily Executive, Strategic Development, Human Resources, IT, Finance, Real Estate and Legal) as well as other activities that have not been assigned to our operating segments, including costs incurred in certain satellite development programs and other business development activities, our centralized treasury operations, and gains (losses) from certain of our investments. These activities, costs and income are accounted for in “Corporate and Other.” We were formed as a Colorado corporation in March 2011 to facilitate the acquisition (the “Hughes Acquisition”) of Hughes Communications, Inc. and its subsidiaries (“Hughes Communications”) and related financing transactions. In connection with our formation, EchoStar contributed the assets and liabilities of its satellite services business, including the principal operating subsidiary of its satellite services business, EchoStar Satellite Services L.L.C., to us. A substantial majority of the voting power of the shares of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in conformity with GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2016 . 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 where we are the primary beneficiary. We are deemed to have a controlling financial interest in other entities when we own more than 50 percent 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 noncontrolling interest within shareholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements . Estimates are used in accounting for, among other things, amortization periods for deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of EchoStar’s stock-based compensation awards, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairment testing, useful lives and methods for depreciation and amortization of long-lived assets, and certain royalty obligations. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements . 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 are reflected in the period they occur or prospectively if the revised estimate affects future periods. Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We utilize the highest level of inputs available according to the following hierarchy in determining fair value: • Level 1, defined as observable inputs being quoted prices in active markets for identical assets; • Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels for each of the three months ended March 31, 2017 or 2016 . As of March 31, 2017 and December 31, 2016 , the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values of our marketable investment securities are based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements, as the markets for such debt securities are less active. Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value. Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities. Fair values for our 6 1/2% Senior Secured Notes due 2019 (the “2019 Senior Secured Notes”), 7 5/8% Senior Unsecured Notes due 2021 (the “2021 Senior Unsecured Notes”), 5.250% Senior Secured Notes due August 1, 2026 (the “2026 Senior Secured Notes”) and 6.625% Senior Unsecured Notes due August 1, 2026 (the “2026 Senior Unsecured Notes” and together with the 2026 Senior Secured Notes, the “2026 Notes”) (see Note 9 ) are based on quoted market prices in less active markets and are categorized as Level 2 measurements. The fair values of our other debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates. As of March 31, 2017 and December 31, 2016 , the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $103.6 million and $74.1 million , respectively. We use fair value measurements from time to time in connection with asset impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. Research and Development Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales. Cost of sales includes research and development costs incurred in connection with customers’ orders of approximately $6.9 million and $2.8 million for the three months ended March 31, 2017 and 2016 , respectively. In addition, we incurred other research and development expenses of approximately $7.7 million and $6.9 million for the three months ended March 31, 2017 and 2016 , respectively. Capitalized Software Costs Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years . Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets. Externally marketed software generally is installed in the equipment we sell to customers. We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed. As of March 31, 2017 and December 31, 2016 , the net carrying amount of externally marketed software was $83.8 million and $76.3 million , respectively, of which $13.5 million and $50.1 million , respectively, is under development and not yet placed in service. We capitalized costs related to the development of externally marketed software of $10.8 million and $5.9 million for the three months ended March 31, 2017 and 2016 , respectively. We recorded amortization expense relating to the development of externally marketed software of $3.4 million and $2.3 million for the three months ended March 31, 2017 and 2016 , respectively. The weighted average useful life of our externally marketed software was approximately four years as of March 31, 2017 . New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). It outlines a single comprehensive model, codified in Topic 606 of the FASB Accounting Standards Codification, for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In August 2015, the FASB issued ASU No. 2015-14, which deferred the mandatory effective date of ASU 2014-09 by one year. As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods. The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted, but not before annual periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends guidance on identifying performance obligations and accounting for licenses of intellectual property. In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients, which addresses collectibility, noncash consideration, completed contracts at transition, a practical expedient for contract modifications at transition, and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. In January 2017, the FASB issued ASU No. 2016-20, Technical Corrections to Topic 606, which clarifies, but does not fundamentally change, certain aspects of the new revenue standard. We plan to adopt the new revenue standard as of January 1, 2018, but have not selected the transition method that we will apply upon adoption. We continue to evaluate the impact of the new standard and available adoption methods on our consolidated financial statements. We are in the process of evaluating arrangements with customers and identifying differences in accounting between new and existing standards. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This update substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments to be measured at fair value with changes in the fair value recognized through net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted for certain requirements. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard requires lessees to recognize assets and liabilities for all leases with lease terms more than 12 months, including leases classified as operating leases. The standard also modifies the definition of a lease and the criteria for classifying leases as operating leases or financing leases. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments rather than incurred losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. ASU 2016-16 is effective for annual periods beginning after December 15, 2017 and interim periods within those periods. We early adopted ASU 2016-16 as of January 1, 2017. Our adoption of this update did not have a material impact on our financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This standard requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 and interim periods within those periods. Early adoption is permitted, which must apply the guidance retrospectively to all periods presented. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). This standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying amount, including goodwill, exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and is to be applied on a prospective basis. We early adopted ASU 2017-04 as of January 1, 2017. Our adoption of this update did not have any impact on our condensed consolidated financial statements, but it may impact the recognition and measurement of a goodwill impairment loss in future periods if we determine that the carrying amount of any reporting units including goodwill exceeds fair value of the reporting unit. In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”). This update shortens the amortization period of premiums on certain purchased callable debt securities to the earliest call date, effectively reducing interest income on such securities prior to the earliest call date. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) and Related Tax Effects | 3 Months Ended |
Mar. 31, 2017 | |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent, Parenthetical Disclosures [Abstract] | |
Other Comprehensive Income (Loss) and Related Tax Effects | Other Comprehensive Income (Loss) and Related Tax Effects Except in unusual circumstances, we do not recognize tax effects on foreign currency translation adjustments because they are not expected to result in future taxable income or deductions. We have not recognized any tax effects on unrealized gains or losses on available-for-sale securities because such gains or losses would affect the amount of existing capital loss carryforwards for which the related deferred tax asset has been fully offset by a valuation allowance. Accumulated other comprehensive loss includes net cumulative foreign currency translation losses of $46.9 million and $59.0 million as of March 31, 2017 and December 31, 2016 , respectively. Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Accumulated Other Comprehensive Loss Components Affected Line Item in our Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2017 2016 (In thousands) Recognition of other-than-temporary impairment loss on available-for-sale securities in net income (1) Other-than-temporary impairment loss on available-for-sale securities $ 3,298 $ — Total reclassifications, net of tax and noncontrolling interests $ 3,298 $ — (1) |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investment Securities | Investment Securities Our marketable investment securities consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Marketable investment securities—current, at fair value: Corporate bonds $ 88,950 $ 164,619 Strategic equity securities 8,825 10,309 Other 491 12,995 Total marketable investment securities—current $ 98,266 $ 187,923 Marketable Investment Securities Our marketable investment securities portfolio consists of various debt and equity instruments, which generally are classified as available-for-sale or trading securities depending on our investment strategy for those securities. The value of our investment portfolio depends on the value of such securities and other instruments comprising the portfolio. Corporate Bonds Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Strategic Equity Securities Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. We did not receive any dividend income for the three months ended March 31, 2017 or 2016 . We recognized a $3.3 million other-than-temporary impairment for the three months ended March 31, 2017 on one of our investments. This investment had been in a continuous loss position for more than 12 months and experienced a decline in market value as a result of adverse developments during the three months ended March 31, 2017. For the three months ended March 31, 2017 and 2016 , “ Gains on marketable investment securities, net ” included gains of $0.1 million and $0.2 million , respectively, related to trading securities that we held as of March 31, 2017 and 2016, respectively. The fair values of our trading securities were $7.3 million and $7.2 million as of March 31, 2017 and December 31, 2016, respectively. Other Our other current marketable investment securities portfolio includes investments in various debt instruments, including U.S. government bonds and commercial paper. Unrealized Gains (Losses) on Available-for-Sale Securities The components of our available-for-sale securities are summarized in the table below. Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of March 31, 2017 Debt securities: Corporate bonds $ 88,919 $ 45 $ (14 ) $ 88,950 Other 491 — — 491 Equity securities - strategic 1,536 — — 1,536 Total available-for-sale securities $ 90,946 $ 45 $ (14 ) $ 90,977 As of December 31, 2016 Debt securities: Corporate bonds $ 164,563 $ 94 $ (38 ) $ 164,619 Other 12,994 1 — 12,995 Equity securities - strategic 4,834 — (1,724 ) 3,110 Total available-for-sale securities $ 182,391 $ 95 $ (1,762 ) $ 180,724 As of March 31, 2017 , restricted and non-restricted available-for-sale securities included debt securities of $89.4 million with contractual maturities of one year or less and zero with contractual maturities greater than one year. We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity. Available-for-Sale Securities in a Loss Position The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position. We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature. We believe that changes in the estimated fair values of these securities are primarily related to temporary market conditions . As of March 31, 2017 December 31, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Less than 12 months $ 25,198 $ (14 ) $ 62,473 $ (1,760 ) 12 months or more — — 1,571 (2 ) Total $ 25,198 $ (14 ) $ 64,044 $ (1,762 ) Sales of Available-for-Sale Securities We recognized de minimis gains and losses from the sales of our available-for-sale securit i es for each of t he three months ended March 31, 2017 and 2016 . Proceeds from sales of our available-for-sale securities totaled zero and $2.3 million for the three months ended March 31, 2017 and 2016 , respectively. Fair Value Measurements Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of March 31, 2017 and December 31, 2016 , we did not have investments that were categorized within Level 3 of the fair value hierarchy. As of March 31, 2017 December 31, 2016 Total Level 1 Level 2 Total Level 1 Level 2 (In thousands) Cash equivalents $ 2,080,794 $ 16,304 $ 2,064,490 $ 1,991,949 $ 14,011 $ 1,977,938 Debt securities: Corporate bonds $ 88,950 $ — $ 88,950 $ 164,619 $ — $ 164,619 Other 491 — 491 12,995 — 12,995 Equity securities - strategic 8,825 8,825 — 10,309 10,309 — Total marketable investment securities $ 98,266 $ 8,825 $ 89,441 $ 187,923 $ 10,309 $ 177,614 Investments in Unconsolidated Entities — Noncurrent We have strategic investments in certain non-publicly traded equity securities that are accounted for using either the equity or the cost method of accounting. Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies’ businesses and their ability to obtain sufficient capital to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them. Our investments in unconsolidated entities consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Investments in unconsolidated entities—noncurrent: Cost method $ 15,438 $ 15,438 Equity method 21,333 27,122 Total investments in unconsolidated entities—noncurrent $ 36,771 $ 42,560 We recorded cash distribution from one of these investments accounted for using the equity method of $7.5 million and zero |
Trade Accounts Receivable
Trade Accounts Receivable | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Trade Accounts Receivable | Trade Accounts Receivable Our trade accounts receivable consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Trade accounts receivable $ 151,536 $ 159,094 Contracts in process, net 27,695 36,170 Total trade accounts receivable 179,231 195,264 Allowance for doubtful accounts (11,371 ) (12,752 ) Trade accounts receivable - DISH Network 47,717 19,323 Total trade accounts receivable, net $ 215,577 $ 201,835 As of March 31, 2017 and December 31, 2016 , progress billings offset against contracts in process amounted to $10.4 million and $14.6 million |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2017 | |
Inventory, Net [Abstract] | |
Inventory | Inventory Our inventory consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Finished goods $ 64,762 $ 49,773 Raw materials 7,936 6,678 Work-in-process 6,724 6,187 Total inventory $ 79,422 $ 62,638 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: Depreciable Life (In Years) As of March 31, 2017 December 31, 2016 (In thousands) Land — $ 13,321 $ 13,273 Buildings and improvements 1 - 30 125,906 79,765 Furniture, fixtures, equipment and other 1 - 12 538,367 430,078 Customer rental equipment 2 - 4 722,549 689,579 Satellites - owned 2 - 15 2,926,569 2,381,120 Satellites acquired under capital leases 10 - 15 796,245 781,761 Construction in progress — 353,813 422,337 Total property and equipment 5,476,770 4,797,913 Accumulated depreciation (2,618,013 ) (2,503,187 ) Property and equipment, net $ 2,858,757 $ 2,294,726 Construction in progress consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Progress amounts for satellite construction, including prepayments under capital leases and launch services costs $ 260,868 $ 244,234 Satellite related equipment 81,278 152,683 Other 11,667 25,420 Construction in progress $ 353,813 $ 422,337 Construction in progress included the following owned and leased satellites under construction or undergoing in-orbit testing as of March 31, 2017 . Satellites Segment Expected Launch Date EchoStar 105/SES-11 ESS Third or fourth quarter of 2017 Telesat T19V (“63 West”) (1) Hughes Second quarter of 2018 (1) We entered into a satellite services agreement for certain capacity on this satellite once launched, but are not party to the construction contract. Depreciation expense associated with our property and equipment consisted of the following: For the Three Months Ended March 31, 2017 2016 (In thousands) Satellites $ 52,143 $ 46,965 Furniture, fixtures, equipment and other 16,682 14,042 Customer rental equipment 30,596 29,137 Buildings and improvements 1,257 1,061 Total depreciation expense $ 100,678 $ 91,205 Satellites As of March 31, 2017 , our satellite fleet consisted of 18 of our owned and leased satellites in geosynchronous orbit, approximately 22,300 miles above the equator. We depreciate our owned satellites on a straight-line basis over the estimated useful life of each satellite. Three of our satellites are accounted for as capital leases and are depreciated on a straight-line basis over their respective lease terms. We utilized one satellite that is accounted for as an operating lease and not included in property and equipment as of March 31, 2017 . Recent Developments EchoStar VIII. During the second quarter of 2017, EchoStar VIII was removed from its orbital location and retired from commercial service. This retirement is not expected to have a material impact on our results of operations or financial position. EchoStar XIX . The EchoStar XIX satellite was launched in December 2016 and was placed into service in March 2017. The EchoStar XIX satellite provides additional capacity for the Hughes broadband services to our customers in North America and added capacity in Mexico and certain Latin American countries and is expected to add capability for aeronautical, enterprise and international broadband services. EchoStar contributed the EchoStar XIX satellite to us in February 2017. EchoStar 105/SES-11. Due to anomalies experienced by our launch provider, the expected launch date of our EchoStar 105/SES-11 satellite has been delayed until the third or fourth quarter of 2017. Our Ku-band payload on the EchoStar 105/SES-11 satellite will replace our current capacity on the AMC-15 satellite. Satellite Anomalies Our satellites may experience anomalies from time to time, some of which may have a significant adverse impact on their remaining useful lives, the commercial operation of the satellites or our operating results. We are not aware of any anomalies with respect to our owned or leased satellites that have had any such material adverse effect during the three months ended March 31, 2017 . There can be no assurance, however, that anomalies will not have any such adverse impacts in the future. In addition, there can be no assurance that we can recover critical transmission capacity in the event one or more of our in-orbit satellites were to fail. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The excess of the cost of an acquired business over the fair values of net tangible and identifiable intangible assets at the time of the acquisition is recorded as goodwill. Goodwill is assigned to the reporting units within our operating segments and is subject to impairment testing annually, or more frequently when events or changes in circumstances indicate the fair value of a reporting unit is more likely than not less than its carrying amount. As of March 31, 2017 and December 31, 2016 , all of our goodwill was assigned to reporting units of our Hughes segment. We test this goodwill for impairment annually in the second quarter. Other Intangible Assets Our other intangible assets, which are subject to amortization, consisted of the following: Weighted Average Useful Life (in Years) As of March 31, 2017 December 31, 2016 Cost Accumulated Amortization Carrying Amount Cost Accumulated Amortization Carrying Amount (In thousands) Customer relationships 8 $ 270,300 $ (220,201 ) $ 50,099 $ 270,300 $ (214,544 ) $ 55,756 Technology-based 6 51,417 (49,989 ) 1,428 51,417 (47,848 ) 3,569 Trademark portfolio 20 29,700 (8,663 ) 21,037 29,700 (8,291 ) 21,409 Total other intangible assets $ 351,417 $ (278,853 ) $ 72,564 $ 351,417 $ (270,683 ) $ 80,734 Customer relationships are amortized predominantly in relation to the expected contribution of cash flow to the business over the life of the intangible asset. Other intangible assets are amortized on a straight-line basis over the periods the assets are expected to contribute to our cash flows. Intangible asset amortization expense, including amortization of externally marketed capitalized software, was $11.5 million and $11.2 million for the three months ended March 31, 2017 and 2016 |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Debt and Capital Lease Obligations [Abstract] | |
Debt and Capital Lease Obligations | Debt and Capital Lease Obligations The following table summarizes the carrying amounts and fair values of our debt: Effective Interest Rate As of March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) Senior Secured Notes: 6 1/2% Senior Secured Notes due 2019 6.959% $ 990,000 $ 1,074,051 $ 990,000 $ 1,084,050 5 1/4% Senior Secured Notes due 2026 5.316% 750,000 750,000 750,000 739,688 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 997,200 900,000 990,189 6 5/8% Senior Unsecured Notes due 2026 6.685% 750,000 767,498 750,000 760,245 Other 609 609 — — Less: Unamortized debt issuance costs (30,030 ) — (31,821 ) — Subtotal 3,360,579 $ 3,589,358 3,358,179 $ 3,574,172 Capital lease obligations 296,735 297,268 Total debt and capital lease obligations 3,657,314 3,655,447 Less: Current portion (37,270 ) (32,984 ) Long-term debt and capital lease obligations, net of unamortized debt issuance costs $ 3,620,044 $ 3,622,463 The fair values of our debt are estimates categorized within Level 2 of the fair value hierarchy. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant volatility due to several factors, including income and losses from investments for which we have a full valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. Income tax benefit was approximately $3.6 million for the three months ended March 31, 2017 compared to an income tax expense of approximately $20.0 million for the three months ended March 31, 2016 . Our estimated effective income tax rate was (61.3)% and 37.1% for the three months ended March 31, 2017 and 2016 , respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2017 were primarily due to the recognition of a one-time tax benefit for the revaluation of our deferred tax assets and liabilities due to a change in our state effective tax rate as a result of the Share Exchange Agreement . For the three months ended March 31, 2016 , the variation in our effective tax rate from the U.S. federal statutory rate was primarily due to the impact of state and local taxes |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of March 31, 2017 , our satellite-related obligations were approximately $657.6 million . Our satellite-related obligations primarily include payments pursuant to agreements for the construction of satellites; payments pursuant to launch services contracts and regulatory authorizations; executory costs for our capital lease satellites; costs under satellite service agreements; and in-orbit incentives relating to certain satellites; as well as commitments for long-term satellite operating leases and satellite service arrangements. Contingencies Patents and Intellectual Property Many entities, including some of our competitors, have or may in the future obtain 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 trebled. 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 components within our direct broadcast satellite (“DBS”) products and services. We cannot be certain that these persons 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 persons 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. Separation Agreement; Share Exchange In 2008, DISH Network Corporation contributed its digital set-top box business and certain infrastructure and other assets, including certain of its satellites, uplink and satellite transmission assets, real estate, and other assets and related liabilities to EchoStar (the “Spin-off”). In connection with the Spin-off, EchoStar entered into a separation agreement with DISH Network that provides, among other things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the separation agreement, EchoStar has assumed certain liabilities that relate to its and our business, including certain designated liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the Spin-off and DISH Network will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to the period prior to the Spin-off, as well as DISH Network’s acts or omissions following the Spin-off. Additionally, in connection with the Share Exchange, EchoStar entered into the Share Exchange Agreement and other agreements which provide, among other things, for the division of certain liabilities, including liabilities relating to taxes, intellectual property and employees and liabilities resulting from litigation and the assumption of certain liabilities that relate to the transferred businesses and assets. These agreements also contain additional indemnification provisions between EchoStar and us and DISH Network for certain pre-existing liabilities and legal proceedings. Litigation We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/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 or there is a reasonable possibility that a loss or an additional loss may have been incurred 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 litigation are charged to expense as incurred. For certain cases described below, 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 appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties are involved (as with many patent-related cases). For these cases, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material adverse effect on our financial condition, 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 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. Elbit On January 23, 2015, Elbit Systems Land and C4I LTD and Elbit Systems of America Ltd. (together referred to as “Elbit”) filed a complaint against our subsidiary Hughes Network Systems, L.L.C. (“HNS”), as well as against Black Elk Energy Offshore Operations, LLC, Bluetide Communications, Inc. and Helm Hotels Group, in the United States District Court for the Eastern District of Texas, alleging infringement of United States Patent Nos. 6,240,073 (the “073 patent”) and 7,245,874 (“874 patent”). The 073 patent is entitled “Reverse Link for a Satellite Communication Network” and the 874 patent is entitled “Infrastructure for Telephony Network.” Elbit alleges that the 073 patent is infringed by broadband satellite systems that practice the Internet Protocol Over Satellite standard. Elbit alleges that the 874 patent is infringed by the manufacture and sale of broadband satellite systems that provide cellular backhaul service via connections to E1 or T1 interfaces at cellular backhaul base stations. On April 2, 2015, Elbit filed an amended complaint removing Helm Hotels Group as a defendant, but making similar allegations against a new defendant, Country Home Investments, Inc. On November 3 and 4, 2015, and January 22, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the patents in suit, which the Patent and Trademark Office subsequently declined to institute. On April 13, 2016, the defendants answered Elbit’s complaint. Trial is scheduled to commence on July 31, 2017. Realtime Data LLC On May 8, 2015, Realtime Data LLC (“Realtime”) filed suit against EchoStar Corporation and our subsidiary HNS in the United States District Court for the Eastern District of Texas alleging infringement of United States Patent Nos. 7,378,992, entitled “Content Independent Data Compression Method and System”; 7,415,530, entitled “System and Methods for Accelerated Data Storage and Retrieval”; and 8,643,513, entitled “Data Compression System and Methods.” On September 14, 2015, Realtime amended its complaint, additionally alleging infringement of United States Patent No. 9,116,908, entitled “System and Methods for Accelerated Data Storage and Retrieval.” Realtime generally alleges that the asserted patents are infringed by certain HNS data compression products and services. Over April 29, 2016 and May 5, 2016, the defendants filed petitions before the United States Patent and Trademark Office challenging the validity of the asserted patents. The United States Patent and Trademark Office has instituted proceedings on each of those petitions, but the litigation has not been stayed. On February 14, 2017, Realtime filed a second suit against EchoStar Corporation and our subsidiary HNS in the same District Court, alleging infringement of four additional United States Patents, Nos. 7,358,867, entitled “Content Independent Data Compression Method and System;” 8,502,707, entitled “Data Compression Systems and Methods;” 8,717,204, entitled “Methods for Encoding and Decoding Data;” and 9,054,728, entitled “Data Compression System and Methods.” The cases have been consolidated and no trial date has been set. Realtime is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. Other In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of our business. As part of our ongoing operations, the Company is 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 the Company 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, the Company from time to time receives 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 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. The Company indemnifies its directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for the Company. Additionally, in the normal course of its business, the Company enters into contracts pursuant to which the Company may make a variety of representations and warranties and indemnify the counterparty for certain losses. The Company’s possible exposure under these arrangements cannot be reasonably estimated as this involves the resolution of claims made, or future claims that may be made, against the Company or its officers, directors or employees, the outcomes of which are unknown and not currently predictable or estimable. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Operating segments are business components of an enterprise for which separate financial information is available and regularly evaluated by the chief operating decision maker (“CODM”), who for HSS, is the Company’s Chief Executive Officer. We operate in two primary business segments, Hughes and ESS as described in Note 1 of these condensed consolidated financial statements. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA. Effective in March 2017, we changed our overhead allocation methodology to reflect how the CODM evaluates our segments. Historically, the costs of all corporate functions were included on an allocated basis in each of the business segments’ EBITDA. Under the revised allocation methodology, these costs are now reported and analyzed as part of “Corporate and Other” (previously “All Other and Eliminations”). Our prior period segment EBITDA disclosures have been restated to reflect this change. Our operations also include various corporate departments (primarily Executive, Strategic Development, Human Resources, IT, Finance, Real Estate and Legal) as well as other activities that have not been assigned to our operating segments, including costs incurred in certain satellite development programs and other business development activities, our centralized treasury operations, and gains (losses) from certain of our investments. Costs and income associated with these departments and activities are accounted for in the “ Corporate and Other ” column in the table below or in the reconciliation of EBITDA below. Transactions between segments were not significant for the three months ended March 31, 2017 or 2016 . 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 revenue, EBITDA, and capital expenditures for each of our operating segments. Hughes EchoStar Satellite Services Corporate and Other Consolidated Total (In thousands) For the Three Months Ended March 31, 2017 External revenue $ 328,610 $ 100,151 $ 1,357 $ 430,118 Intersegment revenue $ 710 $ 175 $ (885 ) $ — Total revenue $ 329,320 $ 100,326 $ 472 $ 430,118 EBITDA $ 100,852 $ 83,063 $ (12,146 ) $ 171,769 Capital expenditures $ 65,667 $ 8,508 $ — $ 74,175 For the Three Months Ended March 31, 2016 External revenue $ 325,539 $ 102,815 $ 772 $ 429,126 Intersegment revenue $ 699 $ 174 $ (873 ) $ — Total revenue $ 326,238 $ 102,989 $ (101 ) $ 429,126 EBITDA $ 110,356 $ 88,640 $ (6,550 ) $ 192,446 Capital expenditures $ 104,237 $ 24,720 $ — $ 128,957 The following table reconciles total consolidated EBITDA to reported “ Income before income taxes ” in our condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended March 31, 2017 2016 (In thousands) EBITDA $ 171,769 $ 192,446 Interest income and expense, net (53,996 ) (36,117 ) Depreciation and amortization (112,220 ) (102,369 ) Net income attributable to noncontrolling interests 292 111 Income before income taxes $ 5,845 $ 54,071 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions EchoStar We and EchoStar have agreed that we shall have the right, but not the obligation, to receive from EchoStar certain corporate services, including among other things: treasury, tax, accounting and reporting, risk management, legal, internal audit, human resources, and information technology. These services are intended to be provided at cost. Effective March 2017, and as a result of the Share Exchange Agreement, we have implemented a new methodology for determining the cost of these services. We may terminate a particular service we receive from EchoStar for any reason upon at least 30 days ’ notice. We recorded expenses for services received from EchoStar of $5.0 million and $2.5 million for the three months ended March 31, 2017 and 2016 , respectively. In addition, we occupy certain office space in buildings owned or leased by EchoStar and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. We participate in certain of EchoStar’s shared services arrangements for its subsidiaries in the ordinary course of business, including arrangements for payroll, accounts payable and cash management. From time to time in connection with the processing of transactions under these arrangements, we may pay or receive amounts attributable to other domestic subsidiaries of EchoStar. We report net payments on behalf of other subsidiaries in “Advances to affiliates, net” within current assets and we report net receipts on behalf of other subsidiaries in “Advances from affiliates, net” within current liabilities in our condensed consolidated balance sheets. No repayment schedule for these net advances has been determined. EchoStar and certain of its subsidiaries have provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2018 and 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 in “Advances from affiliates” within noncurrent liabilities in our condensed consolidated balance sheets. Contribution of EchoStar XIX Satellite. On February 1, 2017, EchoStar contributed the EchoStar XIX satellite and assigned the related construction contract with the satellite manufacturer to us. We recorded a $369.3 million increase in “Additional paid-in capital,” reflecting EchoStar’s $514.4 million carrying amount of the satellite, including capitalized interest that was previously charged to expense in our consolidated financial statements, less related deferred taxes of $145.1 million . See Note 7 for additional information about the EchoStar XIX satellite. EchoStar XXI and EchoStar XXIII Launch Facilitation and Operational Control Agreements. As part of applying for our launch licenses for EchoStar XXI and XXIII through the UK Space Agency, our subsidiary, Hughes Network Systems, Ltd. (“HNS Ltd.”) and a subsidiary of EchoStar, EchoStar Operating L.L.C. (“EOC”), entered into agreements in June 2015 and March 2016 to transfer to HNS Ltd., EOC’s launch service contracts for the EchoStar XXI and EchoStar XXIII satellites, respectively, and to grant HNS Ltd. certain rights to control the in-orbit operations of these satellites. EOC retained ownership of the satellites and agreed to make additional payments to HNS Ltd. for amounts that HNS Ltd. is required to pay under both launch service contracts. In 2015 and 2016, we recorded additions to “Other noncurrent assets, net” and corresponding increases in “Additional paid-in capital” in our condensed consolidated balance sheet to reflect EOC’s cumulative payments under the launch service contracts prior to the transfer dates and to reflect additional cash payments to the launch service provider funded by EOC. The EchoStar XXIII satellite was successfully launched in March 2017. At that time, we recorded decreases in “Other noncurrent assets, net” and “Additional paid-in capital” for the $61.8 million carrying amount of the EchoStar XXIII launch service contract to reflect the consumption of the contract’s economic benefits by EOC, the owner of the satellite. HNS Ltd.’s future payment obligations under the launch service contracts are included in our disclosure of satellite-related obligations in Note 11 . Share Exchange Agreement. Prior to consummation of the Share Exchange, EchoStar was required to complete steps necessary for the transferring of certain assets and liabilities to the DISH Parties. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned the Uplinking Businesses and related assets and liabilities were contributed to one of our subsidiaries in consideration for additional shares of HSS’ common stock that were then issued to a subsidiary of EchoStar. Certain data center assets that were included in the contribution of certain assets and liabilities to one of our subsidiaries were not included in the Share Exchange and continue to be owned by one of our subsidiaries and have been pledged as collateral to support our obligations under the indentures relating to the 2019 Senior Secured Notes and the 2026 Senior Secured Notes. DISH Network Following the Spin-off, EchoStar and DISH have operated as separate publicly-traded companies. However, prior to the consummation of the Share Exchange on February 28, 2017, DISH Network owned the Tracking Stock representing an aggregate 80.0% economic interest in the residential retail satellite broadband business of our Hughes segment. Following the consummation of the Share Exchange, the Tracking Stock was retired. In addition, a substantial majority of the voting power of the shares of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain trusts established by Mr. Ergen for the benefit of his family. In connection with and following both the Spin-off and the Share Exchange, EchoStar and certain of its subsidiaries and DISH and certain of its subsidiaries have entered into certain agreements pursuant to which we and EchoStar obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and rights from us and EchoStar; and we and DISH Network have indemnified each other against certain liabilities arising from our respective businesses. We and/or EchoStar also may enter into additional agreements with DISH Network in the future. Generally, the amounts we and DISH Network pay for products and services provided under the agreements are based on our cost plus a fixed margin (unless noted differently below or in our most recent Annual Report on Form 10-K), which varies depending on the nature of the products and services provided. The following is a summary of the terms of our principal agreements with DISH Network that may have an impact on our financial condition and results of operations. “Services and other revenue — DISH Network” Satellite Services Provided to DISH Network . Since the Spin-off, we have entered into certain satellite service agreements pursuant to which DISH Network receives satellite services on certain satellites owned or leased by us. The fees for the services provided under these satellite service agreements depend, among other things, upon the orbital location of the applicable satellite, the number of transponders that are providing services on the applicable satellite, and the length of the service arrangements. The terms of each service arrangement is set forth below: EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV. As part of the Satellite and Tracking Stock Transaction, described below, in March 2014, we began providing certain satellite services to DISH Network on the EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. The term of each satellite services agreement generally terminates upon the earlier of: (i) the end of life of the satellite; (ii) the date the satellite fails; or (iii) a certain date, which depends upon, among other things, the estimated useful life of the satellite. DISH Network generally has the option to renew each satellite service agreement on a year-to-year basis through the end of the respective satellite’s life. There can be no assurance that any options to renew such agreements will be exercised. In December 2016, DISH Network renewed the satellite services agreement relative to the EchoStar VII satellite for one year to June 2018. EchoStar IX . Effective January 2008, DISH Network began receiving satellite services from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue to receive satellite services from us on the EchoStar IX satellite on a month-to-month basis. EchoStar XII . DISH Network receives satellite services from us on the EchoStar XII satellite. The term of the satellite services agreement terminates September 2017. EchoStar XVI. In December 2009, we entered into an initial ten -year transponder service agreement with DISH Network, pursuant to which DISH Network has received satellite services from us on the EchoStar XVI satellite since January 2013. Effective December 2012, we and DISH Network amended the transponder service agreement to, among other things, change the initial term to generally expire upon the earlier of: (i) the end-of-life or replacement of the satellite; (ii) the date the satellite fails; (iii) the date the transponder(s) on which service is being provided under the agreement fails; or (iv) four years following the actual service commencement date. In July 2016, we and DISH Network further amended the transponder service agreement to, among other things, extend the initial term by one additional year through January 2018 and to reduce the term of the first renewal option by one year . Prior to expiration of the initial term, we, upon certain conditions, and DISH Network have the option to renew for an additional five -year period. If either we or DISH Network exercise our respective five -year renewal options, DISH Network has the option to renew for an additional five -year period prior to expiration of the then-current term. There can be no assurance that any option to renew this agreement will be exercised. In the event that we or DISH Network does not exercise the first five - year renewal option or DISH Network does not exercise the second five -year renewal option, DISH Network has the option to purchase the EchoStar XVI satellite for a certain price. If DISH Network does not elect to purchase the EchoStar XVI satellite at that time, we may sell the EchoStar XVI satellite to a third party and DISH Network is required to pay us a certain amount in the event we are not able to sell the EchoStar XVI satellite for more than a certain amount. Nimiq 5 Agreement . In September 2009, we entered into a fifteen -year satellite service agreement with Telesat Canada (“Telesat”) to receive service on all 32 DBS transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we also entered into a satellite service agreement (the “DISH Nimiq 5 Agreement”) with DISH Network, pursuant to which DISH Network receives satellite services from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement. Under the terms of the DISH Nimiq 5 Agreement, DISH Network makes certain monthly payments to us that commenced in September 2009, when the Nimiq 5 satellite was placed into service, and continue through the service term. Unless earlier terminated under the terms and conditions of the DISH Nimiq 5 Agreement, the service term will expire in October 2019. Upon expiration of the initial term, DISH Network has the option to renew the DISH Nimiq 5 Agreement on a year-to-year basis through the end of life of the Nimiq 5 satellite. Upon in-orbit failure or end of life of the Nimiq 5 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that any options to renew the DISH Nimiq 5 Agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite. QuetzSat-1 Agreement. In November 2008, we entered into a ten -year satellite service agreement with SES Latin America, which provides, among other things, for the provision by SES Latin America to us of service on 32 DBS transponders on the QuetzSat-1 satellite. Concurrently, in 2008, we entered into a transponder service agreement with DISH Network, pursuant to which DISH Network receives satellite services on 24 of the DBS transponders on the QuetzSat-1 satellite. The QuetzSat-1 satellite was launched in September 2011 and was placed into service in November 2011 at the 67.1 degree west longitude orbital location. In February 2013, we and DISH Network entered into an agreement pursuant to which we receive certain satellite services from DISH Network on five DBS transponders on the QuetzSat-1 satellite. In January 2013, the QuetzSat-1 satellite was moved to the 77 degree west longitude orbital location and DISH Network commenced commercial operations at such location in February 2013. Under the terms of our contractual arrangements with DISH Network, we began to provide service to DISH Network on the QuetzSat-1 satellite in February 2013 and will continue to provide service through the remainder of the service term. Unless extended or earlier terminated under the terms and conditions of our agreement with DISH Network for the QuetzSat-1 satellite, the initial service term will expire in November 2021. Upon expiration of the initial service term, DISH Network has the option to renew the agreement for the QuetzSat-1 satellite on a year-to-year basis through the end of life of the QuetzSat-1 satellite. Upon an in-orbit failure or end of life of the QuetzSat-1 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that any options to renew this agreement will be exercised or that DISH Network will exercise its option to receive service on a replacement satellite. 103 Degree Orbital Location/SES-3. In May 2012, we entered into a spectrum development agreement (the “103 Spectrum Development Agreement”) with Ciel Satellite Holdings Inc. (“Ciel”) to develop certain spectrum rights at the 103 degree west longitude orbital location (the “103 Spectrum Rights”). In June 2013, we and DISH Network entered into a spectrum development agreement (the “DISH 103 Spectrum Development Agreement”) pursuant to which DISH Network may use and develop the 103 Spectrum Rights. Unless earlier terminated under the terms and conditions of the DISH 103 Spectrum Development Agreement, the term generally will continue for the duration of the 103 Spectrum Rights. In connection with the 103 Spectrum Development Agreement, in May 2012, we also entered into a ten - year service agreement with Ciel pursuant to which we receive certain satellite services from Ciel on the SES-3 satellite at the 103 degree orbital location. In June 2013, we and DISH Network entered into an agreement pursuant to which DISH Network receives certain satellite services from us on the SES-3 satellite (the “DISH 103 Service Agreement”). Under the terms of the DISH 103 Service Agreement, DISH Network makes certain monthly payments to us through the service term. Unless earlier terminated under the terms and conditions of the DISH 103 Service Agreement, the initial service term will expire on the earlier of: (i) the date the SES-3 satellite fails; (ii) the date the transponder(s) on which service was being provided under the agreement fails; or (iii) June 2023. Upon in-orbit failure or end of life of the SES-3 satellite, and in certain other circumstances, DISH Network has certain rights to receive service from us on a replacement satellite. There can be no assurance that DISH Network will exercise its option to receive service on a replacement satellite. Satellite and Tracking Stock Transaction . In February 2014, we and EchoStar entered into agreements with DISH Network to implement a transaction pursuant to which, among other things: (i) in March 2014, EchoStar and HSS issued shares of the Tracking Stock to DISH Network in exchange for five satellites owned by DISH Network (EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV) (including assumption of related in-orbit incentive obligations) and approximately $11.4 million in cash; and (ii) in March 2014, DISH Network began receiving certain satellite services on these five satellites from us (collectively, the “Satellite and Tracking Stock Transaction.”) The Tracking Stock was retired in March 2017 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. See Note 3 for further information. TT&C Agreement . Effective January 2012, we entered into a telemetry, tracking and control (“TT&C”) agreement pursuant to which we provide TT&C services to DISH Network for a period ending in December 2016 (the “2012 TT&C Agreement”). In November 2016, we and DISH Network amended the 2012 TT&C Agreement to extend the term for one year through December 2017. The 2012 TT&C Agreement replaced the TT&C agreement we entered into with DISH Network in connection with the Spin-off. The fees for services provided under the 2012 TT&C Agreement are calculated at either: (i) a fixed fee or (ii) cost plus a fixed margin, which will vary depending on the nature of the services provided. DISH Network is able to terminate the 2012 TT&C Agreement for any reason upon 60 days ’ notice . In connection with the Satellite and Tracking Stock Transaction, in February 2014, we amended the TT&C Agreement to cease the provision of TT&C services to DISH Network for the EchoStar I, EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. Effective March 2014, we provide TT&C services for the D-1 and EchoStar XV satellites; however, for the period that we received satellite services on the EchoStar XV satellite from DISH Network, we waived the fees for the TT&C services on the EchoStar XV satellite. Effective August 2016, we provide TT&C services to DISH Network for the EchoStar XVIII satellite. TerreStar Agreement . In March 2012, DISH Network completed its acquisition of substantially all the assets of TerreStar Networks Inc. (“TerreStar”). Prior to DISH Network’s acquisition of substantially all the assets of TerreStar and our completion of the Hughes Acquisition, TerreStar and HNS entered into various agreements pursuant to which our Hughes segment provides, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment. TerreStar generally has the right to continue to receive warranty services from us for one of our products on a month-to-month basis. The provision of warranty services for our other product will continue until March 2018 and will automatically renew in March 2018 for an additional one - year period, unless terminated by TerreStar upon at least 60 days ’ written notice to us prior to the end of the term. The provision of operations and maintenance services will continue until April 2018 and will automatically renew in April 2018 for an additional one -year period, unless terminated by TerreStar or us upon at least 90 days ’ written notice prior to the end of the term. The provision of hosting services will continue until May 2022 and will not renew beyond May 2022 unless the parties enter into a new agreement or amend the existing agreement. In addition, TerreStar generally may terminate such services for convenience subject to providing us with prior notice and/or payment of termination charges. Hughes Broadband Distribution Agreement . Effective October 2012, HNS and dishNET Satellite Broadband L.L.C. (“dishNET”), a wholly-owned subsidiary of DISH, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which dishNET has the right, but not the obligation, to market, sell and distribute the Hughes satellite internet service (the “Hughes service”). dishNET pays HNS a monthly per subscriber wholesale service fee for the Hughes service based upon a subscriber’s service level, and based upon certain volume subscription thresholds. The Distribution Agreement also provides that dishNET has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the Hughes service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one year terms unless terminated by either party with a written notice at least 180 days before the expiration of the then-current term. In February 2014, HNS and dishNET entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, the parties will continue to provide the Hughes service to the then-current dishNET subscribers pursuant to the terms and conditions of the Distribution Agreement. Hughes Broadband Master Services Agreement . In March 2017, HNS and DISH Network L.L.C. (“DNLLC”), a wholly-owned subsidiary of DISH, entered into a master service agreement (the “MSA”) pursuant to which DNLLC, among other things: (i) has the right, but not the obligation, to market, promote and solicit orders for the Hughes service and related equipment and (ii) will install Hughes service equipment with respect to activations generated by DNLLC. Under the MSA, HNS and DNLLC will make certain payments to each other relating to sales, purchases and installation services. The MSA has an initial term of five years with automatic renewal for successive one year terms. After the first anniversary, either party has the ability to terminate the 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 MSA, HNS will continue to provide the Hughes service to subscribers and make certain payments to DNLLC pursuant to the terms and conditions of the MSA. DBSD North America Agreement . In March 2012, DISH Network completed its acquisition of 100% of the equity of reorganized DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which our Hughes segment provides, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. DBSD North America generally has the right to continue to receive warranty services from us on a month-to-month basis until February 2019. The provision of operations and maintenance services will continue until April 2018 and will automatically renew in April 2018 for an additional one -year period, unless terminated by DBSD North America upon at least 120 days ’ written notice to us prior to the end of the term. The provision of hosting services will continue until February 2022 and will automatically renew for an additional five -year period until February 2027 unless terminated by DBSD North America upon at least 180 days ’ written notice to us prior to the end of the term. In addition, DBSD North America generally may terminate such services for convenience, subject to providing us with prior notice and/or payment of termination charges. RUS Implementation Agreement . In September 2010, DISH Broadband L.L.C. (“DISH Broadband”), DISH’s indirect, wholly-owned subsidiary, was selected by the Rural Utilities Service (“RUS”) of the United States Department of Agriculture to receive up to approximately $14.1 million in broadband stimulus grant funds (the “Grant Funds”). Effective November 2011, HNS and DISH Broadband entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which HNS provided certain portions of the equipment and broadband service used to implement DISH Broadband’s RUS program. While the RUS Agreement expired in June 2013 when the Grant Funds were exhausted, HNS is required to continue providing services to DISH Broadband’s customers activated prior to the expiration of the RUS Agreement in accordance with the terms and conditions of the RUS Agreement. General and administrative expenses — DISH Network Amended and Restated Professional Services Agreement. In connection with the Spin-off, EchoStar entered into various agreements with DISH including the Transition Services Agreement, Satellite Procurement Agreement and Services Agreement, which all expired in January 2010 and were replaced by a Professional Services Agreement. In January 2010, EchoStar and DISH 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 the 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 agreed that DISH Network would continue to have the right, but not the obligation, to engage us to manage the process of procuring new satellite capacity for DISH Network (previously provided under the Satellite Procurement Agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under the Services Agreement) and other support services. A portion of these costs and expenses have been allocated to us in the manner described above under the caption “EchoStar.” 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. The term of the Amended and Restated Professional Services Agreement is through January 2018 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 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. Real Estate Lease . Prior to the Share Exchange, EchoStar leased to DISH Network certain space at 530 EchoStar Drive, Cheyenne, Wyoming. In connection with the Share Exchange, EchoStar transferred ownership of a portion of this property to DISH Network and contributed a portion to us and we amended the agreement to (i) terminate the lease for the transferred space and (ii) provide for a continued lease to DISH Network of the portion of the property contributed to us for a period ending in December 2031. The rent on a per square foot basis for the lease is comparable to per square foot rental rates of similar commercial property in the same geographic area at the time of the lease, and DISH Network is responsible for its portion of the taxes, insurance, utilities and maintenance of the premises. This agreement may be extended by mutual consent, in which case this agreement will be converted to a month-to-month lease agreement. Upon extension, either party has the right to terminate this agreement upon 30 days ’ notice. Collocation and Antenna Space Agreements . In connection with the Share Exchange, effective March 2017, we entered into certain agreements pursuant to which DISH Network will provide collocation and antenna space to EchoStar through March 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; and Englewood, Colorado. We may terminate any of these agreements with 180 days ’ prior written notice. The fees for the services provided under these agreements depend on the number of racks leased at the location. Other agreements — DISH Network Share Exchange Agreement . On January 31, 2017, EchoStar and certain of its subsidiaries entered into the Share Exchange Agreement with DISH and certain of its subsidiaries, pursuant to which on February 28, 2017, EchoStar and its subsidiaries received all of the shares of the Tracking Stock in exchange for 100% of the equity interests of certain EchoStar subsidiaries that held substantially all of EchoStar Corporation’s EchoStar Technologies businesses and certain other assets. Following consummation of the Share Exchange on February 28, 2017, EchoStar no longer operates 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 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 contains 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 have 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 it causes the transaction to be taxable to the other party after closing. Intellectual Property and Technology License Agreement . Effective March 2017 in connection with the Share Exchange, EchoStar and DISH Network entered into an Intellectual Property and Technology License Agreement (“IPTLA”) pursuant to which EchoStar and DISH and their respective subsidiaries license to each other certain intellectual property and technology. The IPTLA will continue in perpetuity, unless mutually terminated by the parties. Pursuant to the IPTLA, EchoStar granted to DISH Network a license to EchoStar and its subsidiaries’ intellectual property and technology for use by DISH Network, among other things, in connection with its continued operation of the businesses acquired pursuant to the Share Exchange, including a limited license to use the “ECHOSTAR” trademark during a transition period. EchoStar retains full ownership of the “ECHOSTAR” trademark. In addition, DISH Network granted a license back to EchoStar and its subsidiaries, among other things, for the continued use of all intellectual property and technology that is used in EchoStar and its subsidiaries’ retained businesses but the ownership of which was transferred to DISH Network pursuant to the Share Exchange. Tax Matters Agreement . Effective March 2017, in connection with the Share Exchange, EchoStar and DISH entered into a tax matters agreement. This agreement governs certain rights, responsibilities and obligations of EchoStar and DISH and their respective subsidiaries with respect to taxes of the transferred businesses pursuant to the Share Exchange. Generally, EchoStar is responsible for all tax returns and tax liabilities for the transferred businesses and assets for periods prior to the Share Exchange and DISH Network is responsible for all tax returns and tax liabilities for the transferred businesses and assets from and after the Share Exchange. Both EchoStar and DISH Network have made certain tax-related representations and are subject to various tax-related covenants after the consummation of the Share Exchange. Both EchoStar and DISH Network have agreed to indemnify each other if there is a breach of any such tax representation or violation of any such tax covenant and that breach or violation results in the Share Exchange not qualifying for tax free treatment for the other party. In addition, DISH Network has agreed to indemnify EchoStar if the transferred businesses are acquired, either d |
Supplemental Guarantor and Non-
Supplemental Guarantor and Non-Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2017 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
Supplemental Guarantor an 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 2019 Senior Secured Notes and 2021 Senior Unsecured Notes, which were issued on June 1, 2011, and our 2026 Notes, which were issued on July 27, 2016. See Note 9 for further information on the 2019 Senior Secured Notes, the 2021 Senior Unsecured Notes and the 2026 Notes. In lieu of separate financial statements of the Guarantor Subsidiaries, condensed consolidating financial information prepared in accordance with Rule 3-10(f) of Regulation S-X is presented below, including the condensed balance sheet information, the condensed statement of operations and comprehensive income (loss) information and the condensed statement of cash flows information of HSS, the Guarantor Subsidiaries on a combined basis and the non-guarantor subsidiaries of HSS on a combined basis and the eliminations necessary to arrive at the corresponding information of HSS on a consolidated basis. The indentures governing the 2019 Senior Secured Notes, the 2021 Senior Unsecured Notes and the 2026 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. March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 2,080,794 $ 46,049 $ 34,283 $ — $ 2,161,126 Marketable investment securities, at fair value 89,441 8,825 — — 98,266 Trade accounts receivable, net — 123,552 44,308 — 167,860 Trade accounts receivable - DISH Network, net — 47,717 — — 47,717 Inventory — 61,543 17,879 — 79,422 Advances to affiliates, net 129,030 26,383 3,718 (35,256 ) 123,875 Other current assets 18 20,807 28,688 (30 ) 49,483 Total current assets 2,299,283 334,876 128,876 (35,286 ) 2,727,749 Restricted cash and cash equivalents 6,785 — 767 — 7,552 Property and equipment, net — 2,596,651 262,106 — 2,858,757 Regulatory authorizations, net — 471,658 — — 471,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 72,564 — — 72,564 Investments in unconsolidated entities — 36,771 — — 36,771 Investment in subsidiaries 3,100,630 286,291 — (3,386,921 ) — Advances to affiliates 700 60,761 — (61,461 ) — Other noncurrent assets, net 111,812 151,200 101,590 (111,812 ) 252,790 Total assets $ 5,519,210 $ 4,514,945 $ 493,339 $ (3,595,480 ) $ 6,932,014 Liabilities and Shareholders’ Equity (Deficit) Trade accounts payable $ — $ 101,254 $ 12,989 $ — $ 114,243 Current portion of long-term debt and capital lease obligations — 33,068 4,202 — 37,270 Advances from affiliates, net — 3,576 31,767 (35,256 ) 87 Accrued expenses and other 55,843 121,217 42,492 (30 ) 219,522 Total current liabilities 55,843 259,115 91,450 (35,286 ) 371,122 Long-term debt and capital lease obligations, net of unamortized debt issuance costs 3,359,970 254,273 5,801 — 3,620,044 Deferred tax liabilities, net — 792,120 141 (111,812 ) 680,449 Advances from affiliates — — 93,169 (61,461 ) 31,708 Other non-current liabilities — 109,730 2,442 — 112,172 Total HSS shareholders’ equity (deficit) 2,103,397 3,099,707 287,214 (3,386,921 ) 2,103,397 Noncontrolling interests — — 13,122 — 13,122 Total liabilities and shareholders’ equity (deficit) $ 5,519,210 $ 4,514,945 $ 493,339 $ (3,595,480 ) $ 6,932,014 December 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 1,991,949 $ 53,905 $ 25,110 $ — $ 2,070,964 Marketable investment securities, at fair value 177,614 10,309 — — 187,923 Trade accounts receivable, net — 138,861 43,651 — 182,512 Trade accounts receivable - DISH Network, net — 19,323 — — 19,323 Advances to affiliates, net 10 999,340 4,968 (893,866 ) 110,452 Inventory — 45,623 17,015 — 62,638 Other current assets 48 19,183 27,083 — 46,314 Total current assets 2,169,621 1,286,544 117,827 (893,866 ) 2,680,126 Restricted cash and cash equivalents 11,097 — 723 — 11,820 Property and equipment, net — 2,061,831 232,895 — 2,294,726 Regulatory authorizations, net — 471,658 — — 471,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 80,734 — — 80,734 Investments in unconsolidated entities — 42,560 — — 42,560 Investment in subsidiaries 3,721,688 314,643 — (4,036,331 ) — Advances to affiliates 700 60,761 — (61,461 ) — Other noncurrent assets, net 92,727 142,091 153,646 (92,727 ) 295,737 Total assets $ 5,995,833 $ 4,964,995 $ 505,091 $ (5,084,385 ) $ 6,381,534 Liabilities and Shareholders’ Equity (Deficit) Trade accounts payable $ — $ 94,095 $ 12,321 $ — $ 106,416 Current portion of long-term debt and capital lease obligations — 32,177 807 — 32,984 Advances from affiliates, net 850,807 12,228 31,429 (893,866 ) 598 Accrued expenses and other 44,654 136,921 38,738 — 220,313 Total current liabilities 895,461 275,421 83,295 (893,866 ) 360,311 Long-term debt and capital lease obligations, net of unamortized debt issuance costs 3,358,179 262,883 1,401 — 3,622,463 Deferred tax liabilities, net — 621,061 128 (92,727 ) 528,462 Advances from affiliates — — 93,429 (61,461 ) 31,968 Other non-current liabilities — 80,532 2,775 — 83,307 Total HSS shareholders’ equity (deficit) 1,742,193 3,725,098 311,233 (4,036,331 ) 1,742,193 Noncontrolling interests — — 12,830 — 12,830 Total liabilities and shareholders’ equity (deficit) $ 5,995,833 $ 4,964,995 $ 505,091 $ (5,084,385 ) $ 6,381,534 For the Three Months Ended March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 111,304 $ 186 $ — $ 111,490 Services and other revenue - other — 241,372 34,363 (5,512 ) 270,223 Equipment revenue - DISH Network — 31 — — 31 Equipment revenue - other — 51,204 4,677 (7,507 ) 48,374 Total revenue — 403,911 39,226 (13,019 ) 430,118 Costs and Expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 106,544 29,710 (5,355 ) 130,899 Cost of sales - equipment (exclusive of depreciation and amortization) — 47,812 3,274 (6,860 ) 44,226 Selling, general and administrative expenses — 65,685 9,497 (804 ) 74,378 Research and development expenses — 7,705 — — 7,705 Depreciation and amortization — 105,447 6,773 — 112,220 Total costs and expenses — 333,193 49,254 (13,019 ) 369,428 Operating income — 70,718 (10,028 ) — 60,690 Other Income (Expense): Interest income 5,490 202 348 (199 ) 5,841 Interest expense, net of amounts capitalized (57,299 ) (3,222 ) 485 199 (59,837 ) Gains on marketable investment securities, net — 91 — — 91 Other-than-temporary impairment loss on available-for-sale securities (3,298 ) (3,298 ) Equity in earnings of unconsolidated affiliate — 1,711 — — 1,711 Equity in earnings (losses) of subsidiaries, net 41,859 (6,201 ) — (35,658 ) — Other, net — (138 ) 785 — 647 Total other income (expense), net (9,950 ) (10,855 ) 1,618 (35,658 ) (54,845 ) Income (loss) before income taxes (9,950 ) 59,863 (8,410 ) (35,658 ) 5,845 Income tax benefit (provision) 19,085 (17,856 ) 2,353 — 3,582 Net income (loss) 9,135 42,007 (6,057 ) (35,658 ) 9,427 Less: Net income attributable to noncontrolling interests — — 292 — 292 Net income (loss) attributable to HSS $ 9,135 $ 42,007 $ (6,349 ) $ (35,658 ) $ 9,135 Comprehensive Income (Loss): Net income (loss) $ 9,135 $ 42,007 $ (6,057 ) $ (35,658 ) $ 9,427 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 12,121 — 12,121 Unrealized gains (losses) on available-for-sale securities and other (27 ) (1,574 ) 101 — (1,500 ) Recognition of other-than-temporary loss on available-for-sale securities in net income (loss) — 3,298 — — 3,298 Equity in other comprehensive income (loss) of subsidiaries, net 13,946 12,222 — (26,168 ) — Total other comprehensive income (loss), net of tax 13,919 13,946 12,222 (26,168 ) 13,919 Comprehensive income (loss) 23,054 55,953 6,165 (61,826 ) 23,346 Less: Comprehensive income attributable to noncontrolling interests — — 292 — 292 Comprehensive income (loss) attributable to HSS $ 23,054 $ 55,953 $ 5,873 $ (61,826 ) $ 23,054 For the Three Months Ended March 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 113,075 $ — $ — $ 113,075 Services and other revenue - other — 246,078 29,778 (5,433 ) 270,423 Equipment revenue - DISH Network — 2,769 — — 2,769 Equipment revenue - other — 43,897 2,937 (3,975 ) 42,859 Total revenue — 405,819 32,715 (9,408 ) 429,126 Costs and Expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 108,448 21,274 (5,145 ) 124,577 Cost of sales - equipment (exclusive of depreciation and amortization) — 44,013 2,607 (3,512 ) 43,108 Selling, general and administrative expenses — 62,339 9,327 (751 ) 70,915 Research and development expenses — 6,932 — — 6,932 Depreciation and amortization — 100,842 1,527 — 102,369 Total costs and expenses — 322,574 34,735 (9,408 ) 347,901 Operating income — 83,245 (2,020 ) — 81,225 Other Income (Expense): Interest income 1,229 45 649 (9 ) 1,914 Interest expense, net of amounts capitalized (34,781 ) (4,469 ) 1,210 9 (38,031 ) Gains on marketable investment securities, net — 215 — — 215 Equity in earnings of unconsolidated affiliate — 1,859 — — 1,859 Equity in earnings (losses) of subsidiaries, net 51,079 (446 ) — (50,633 ) — Other, net 6,750 (207 ) 346 — 6,889 Total other income (expense), net 24,277 (3,003 ) 2,205 (50,633 ) (27,154 ) Income (loss) before income taxes 24,277 80,242 185 (50,633 ) 54,071 Income tax benefit (provision) 9,642 (29,074 ) (609 ) — (20,041 ) Net income (loss) 33,919 51,168 (424 ) (50,633 ) 34,030 Less: Net income attributable to noncontrolling interests — — 111 — 111 Net income (loss) attributable to HSS $ 33,919 $ 51,168 $ (535 ) $ (50,633 ) $ 33,919 Comprehensive Income (Loss): Net income (loss) $ 33,919 $ 51,168 $ (424 ) $ (50,633 ) $ 34,030 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 7,709 — 7,709 Unrealized losses on available-for-sale securities and other 244 (650 ) 32 — (374 ) Equity in other comprehensive income (loss) of subsidiaries, net 7,091 7,741 — (14,832 ) — Total other comprehensive income (loss), net of tax 7,335 7,091 7,741 (14,832 ) 7,335 Comprehensive income (loss) 41,254 58,259 7,317 (65,465 ) 41,365 Less: Comprehensive income attributable to noncontrolling interests — — 111 — 111 Comprehensive income (loss) attributable to HSS $ 41,254 $ 58,259 $ 7,206 $ (65,465 ) $ 41,254 For the Three Months Ended March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities: Net income (loss) $ 9,135 $ 42,007 $ (6,057 ) $ (35,658 ) $ 9,427 Adjustments to reconcile net income (loss) to net cash flows from operating activities 11,863 27,173 7,956 35,658 82,650 Net cash flows from operating activities 20,998 69,180 1,899 — 92,077 Cash Flows from Investing Activities: Sales and maturities of marketable investment securities 87,435 — — — 87,435 Expenditures for property and equipment — (53,634 ) (20,541 ) — (74,175 ) Changes in restricted cash and cash equivalents 4,312 — (44 ) — 4,268 Investment in subsidiary (24,500 ) (27,500 ) — 52,000 — Expenditures for externally marketed software — (10,832 ) — — (10,832 ) Net cash flows from investing activities 67,247 (91,966 ) (20,585 ) 52,000 6,696 Cash Flows from Financing Activities: Proceeds from capital contribution from parent — 24,500 27,500 (52,000 ) — Repayment of debt and capital lease obligations — (7,717 ) (412 ) — (8,129 ) Other, net 600 (1,853 ) 82 — (1,171 ) Net cash flows from financing activities 600 14,930 27,170 (52,000 ) (9,300 ) Effect of exchange rates on cash and cash equivalents — — 689 — 689 Net increase (decrease) in cash and cash equivalents 88,845 (7,856 ) 9,173 — 90,162 Cash and cash equivalents, at beginning of period 1,991,949 53,905 25,110 — 2,070,964 Cash and cash equivalents, at end of period $ 2,080,794 $ 46,049 $ 34,283 $ — $ 2,161,126 For the Three Months Ended March 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities: Net income (loss) $ 33,919 $ 51,168 $ (424 ) $ (50,633 ) $ 34,030 Adjustments to reconcile net income (loss) to net cash flows from operating activities 24,712 46,000 11,353 50,633 132,698 Net cash flows from operating activities 58,631 97,168 10,929 — 166,728 Cash Flows from Investing Activities: Purchases of marketable investment securities (134,572 ) — — — (134,572 ) Sales and maturities of marketable investment securities 146,814 — — — 146,814 Expenditures for property and equipment — (88,958 ) (39,999 ) — (128,957 ) Expenditures for externally marketed software — (5,959 ) — — (5,959 ) Changes in restricted cash and cash equivalents (618 ) — (44 ) — (662 ) Investment in subsidiary (28,199 ) (28,199 ) — 56,398 — Payment for EchoStar XXI launch services — — (11,875 ) — (11,875 ) Other, net — 340 — (340 ) — Net cash flows from investing activities (16,575 ) (122,776 ) (51,918 ) 56,058 (135,211 ) Cash Flows from Financing Activities: Proceeds from capital contributions from parent — 28,199 28,199 (56,398 ) — Capital contribution from EchoStar 11,875 — — — 11,875 Repayment of long-term debt and capital lease obligations — (6,912 ) (1,302 ) — (8,214 ) Advances from affiliates — — 2,504 — 2,504 Other, net — (869 ) 742 340 213 Net cash flows from financing activities 11,875 20,418 30,143 (56,058 ) 6,378 Effect of exchange rates on cash and cash equivalents — — 43 — 43 Net increase (decrease) in cash and cash equivalents 53,931 (5,190 ) (10,803 ) — 37,938 Cash and cash equivalents, at beginning of period 300,634 55,767 26,589 — 382,990 Cash and cash equivalents, at end of period $ 354,565 $ 50,577 $ 15,786 $ — $ 420,928 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in conformity with GAAP. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2016 |
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 where we are the primary beneficiary. We are deemed to have a controlling financial interest in other entities when we own more than 50 percent 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 noncontrolling interest within shareholders’ equity for the portion of the entity’s equity attributed to the noncontrolling ownership interests. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheets, the reported amounts of revenue and expense for each reporting period, and certain information disclosed in the notes to our condensed consolidated financial statements . Estimates are used in accounting for, among other things, amortization periods for deferred subscriber acquisition costs, revenue recognition using the percentage-of-completion method, allowances for doubtful accounts, allowances for sales returns and rebates, warranty obligations, self-insurance obligations, deferred taxes and related valuation allowances, uncertain tax positions, loss contingencies, fair value of financial instruments, fair value of EchoStar’s stock-based compensation awards, fair value of assets and liabilities acquired in business combinations, lease classifications, asset impairment testing, useful lives and methods for depreciation and amortization of long-lived assets, and certain royalty obligations. We base our estimates and assumptions on historical experience, observable market inputs and on various other factors that we believe to be relevant under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements . 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 are reflected in the period they occur or prospectively if the revised estimate affects future periods. |
Fair Value Measurements | Fair Value Measurements We determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. We utilize the highest level of inputs available according to the following hierarchy in determining fair value: • Level 1, defined as observable inputs being quoted prices in active markets for identical assets; • Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3, defined as unobservable inputs for which little or no market data exists, consistent with characteristics of the asset or liability that would be considered by market participants in a transaction to purchase or sell the asset or liability. Transfers between levels in the fair value hierarchy are considered to occur at the beginning of the quarterly accounting period. There were no transfers between levels for each of the three months ended March 31, 2017 or 2016 . As of March 31, 2017 and December 31, 2016 , the carrying amounts of our cash and cash equivalents, trade accounts receivable, net of allowance for doubtful accounts, accounts payable and accrued liabilities were equal to or approximated fair value due to their short-term nature or proximity to current market rates. Fair values of our marketable investment securities are based on a variety of observable market inputs. For our investments in publicly traded equity securities and U.S. government securities, fair value ordinarily is determined based on a Level 1 measurement that reflects quoted prices for identical securities in active markets. Fair values of our investments in other marketable debt securities generally are based on Level 2 measurements, as the markets for such debt securities are less active. Trades of identical debt securities on or near the measurement date are considered a strong indication of fair value. Matrix pricing techniques that consider par value, coupon rate, credit quality, maturity and other relevant features also may be used to determine fair value of our investments in marketable debt securities. Fair values for our 6 1/2% Senior Secured Notes due 2019 (the “2019 Senior Secured Notes”), 7 5/8% Senior Unsecured Notes due 2021 (the “2021 Senior Unsecured Notes”), 5.250% Senior Secured Notes due August 1, 2026 (the “2026 Senior Secured Notes”) and 6.625% Senior Unsecured Notes due August 1, 2026 (the “2026 Senior Unsecured Notes” and together with the 2026 Senior Secured Notes, the “2026 Notes”) (see Note 9 ) are based on quoted market prices in less active markets and are categorized as Level 2 measurements. The fair values of our other debt are Level 2 measurements and are estimated to approximate their carrying amounts based on the proximity of their interest rates to current market rates. As of March 31, 2017 and December 31, 2016 , the fair values of our in-orbit incentive obligations, based on measurements categorized within Level 2 of the fair value hierarchy, approximated their carrying amounts of $103.6 million and $74.1 million , respectively. We use fair value measurements from time to time in connection with asset impairment testing and the assignment of purchase consideration to assets and liabilities of acquired companies. Those fair value measurements typically include significant unobservable inputs and are categorized within Level 3 of the fair value hierarchy. |
Research and Development | Research and Development Costs incurred in research and development activities generally are expensed as incurred. A significant portion of our research and development costs are incurred in connection with the specific requirements of a customer’s order. In such instances, the amounts for these customer funded development efforts are included in cost of sales. |
Capitalized Software Costs | Capitalized Software Costs Costs related to the procurement and development of software for internal-use and externally marketed software are capitalized and amortized using the straight-line method over the estimated useful life of the software, not in excess of five years . Capitalized costs of internal-use software are included in “Property and equipment, net” and capitalized costs of externally marketed software are included in “Other noncurrent assets, net” in our condensed consolidated balance sheets. Externally marketed software generally is installed in the equipment we sell to customers. We conduct software program reviews for externally marketed capitalized software costs at least annually, or as events and circumstances warrant such a review, to determine if capitalized software development costs are recoverable and to ensure that costs associated with programs that are no longer generating revenue are expensed. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). It outlines a single comprehensive model, codified in Topic 606 of the FASB Accounting Standards Codification, for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In August 2015, the FASB issued ASU No. 2015-14, which deferred the mandatory effective date of ASU 2014-09 by one year. As a result, public entities are required to adopt the new revenue standard in annual periods beginning after December 15, 2017 and in interim periods within those annual periods. The standard may be applied either retrospectively to prior periods or as a cumulative-effect adjustment as of the date of adoption. Early adoption is permitted, but not before annual periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends guidance on identifying performance obligations and accounting for licenses of intellectual property. In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients, which addresses collectibility, noncash consideration, completed contracts at transition, a practical expedient for contract modifications at transition, and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. In January 2017, the FASB issued ASU No. 2016-20, Technical Corrections to Topic 606, which clarifies, but does not fundamentally change, certain aspects of the new revenue standard. We plan to adopt the new revenue standard as of January 1, 2018, but have not selected the transition method that we will apply upon adoption. We continue to evaluate the impact of the new standard and available adoption methods on our consolidated financial statements. We are in the process of evaluating arrangements with customers and identifying differences in accounting between new and existing standards. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This update substantially revises standards for the recognition, measurement and presentation of financial instruments, including requiring all equity investments to be measured at fair value with changes in the fair value recognized through net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted for certain requirements. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). This standard requires lessees to recognize assets and liabilities for all leases with lease terms more than 12 months, including leases classified as operating leases. The standard also modifies the definition of a lease and the criteria for classifying leases as operating leases or financing leases. ASU 2016-02 is effective for annual periods beginning after December 15, 2018 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments rather than incurred losses. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those periods. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. ASU 2016-16 is effective for annual periods beginning after December 15, 2017 and interim periods within those periods. We early adopted ASU 2016-16 as of January 1, 2017. Our adoption of this update did not have a material impact on our financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This standard requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 and interim periods within those periods. Early adoption is permitted, which must apply the guidance retrospectively to all periods presented. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). This standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying amount, including goodwill, exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and is to be applied on a prospective basis. We early adopted ASU 2017-04 as of January 1, 2017. Our adoption of this update did not have any impact on our condensed consolidated financial statements, but it may impact the recognition and measurement of a goodwill impairment loss in future periods if we determine that the carrying amount of any reporting units including goodwill exceeds fair value of the reporting unit. In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”). This update shortens the amortization period of premiums on certain purchased callable debt securities to the earliest call date, effectively reducing interest income on such securities prior to the earliest call date. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are assessing the impact of adopting this new accounting standard on our consolidated financial statements and related disclosures. |
Other Comprehensive Income (L22
Other Comprehensive Income (Loss) and Related Tax Effects Other Comprehensive Income (Loss) and Related Tax Effects (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent, Parenthetical Disclosures [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows: Accumulated Other Comprehensive Loss Components Affected Line Item in our Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2017 2016 (In thousands) Recognition of other-than-temporary impairment loss on available-for-sale securities in net income (1) Other-than-temporary impairment loss on available-for-sale securities $ 3,298 $ — Total reclassifications, net of tax and noncontrolling interests $ 3,298 $ — (1) We recorded an other-than-temporary impairment loss on shares of certain common stock included in our strategic equity securities. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Schedule of marketable investment securities and investments in unconsolidated entities | Our marketable investment securities consisted of the following: As of March 31, 2017 December 31, 2016 (In thousands) Marketable investment securities—current, at fair value: Corporate bonds $ 88,950 $ 164,619 Strategic equity securities 8,825 10,309 Other 491 12,995 Total marketable investment securities—current $ 98,266 $ 187,923 |
Schedule of unrealized gains (losses) on marketable investment securities | Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of March 31, 2017 Debt securities: Corporate bonds $ 88,919 $ 45 $ (14 ) $ 88,950 Other 491 — — 491 Equity securities - strategic 1,536 — — 1,536 Total available-for-sale securities $ 90,946 $ 45 $ (14 ) $ 90,977 As of December 31, 2016 Debt securities: Corporate bonds $ 164,563 $ 94 $ (38 ) $ 164,619 Other 12,994 1 — 12,995 Equity securities - strategic 4,834 — (1,724 ) 3,110 Total available-for-sale securities $ 182,391 $ 95 $ (1,762 ) $ 180,724 |
Schedule of available-for-sale securities in continuous unrealized loss position by length of time and their fair value | . As of March 31, 2017 December 31, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) Less than 12 months $ 25,198 $ (14 ) $ 62,473 $ (1,760 ) 12 months or more — — 1,571 (2 ) Total $ 25,198 $ (14 ) $ 64,044 $ (1,762 ) |
Schedule of fair value measurements | As of March 31, 2017 and December 31, 2016 , we did not have investments that were categorized within Level 3 of the fair value hierarchy. As of March 31, 2017 December 31, 2016 Total Level 1 Level 2 Total Level 1 Level 2 (In thousands) Cash equivalents $ 2,080,794 $ 16,304 $ 2,064,490 $ 1,991,949 $ 14,011 $ 1,977,938 Debt securities: Corporate bonds $ 88,950 $ — $ 88,950 $ 164,619 $ — $ 164,619 Other 491 — 491 12,995 — 12,995 Equity securities - strategic 8,825 8,825 — 10,309 10,309 — Total marketable investment securities $ 98,266 $ 8,825 $ 89,441 $ 187,923 $ 10,309 $ 177,614 |
Trade Accounts Receivable (Tabl
Trade Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of trade accounts receivable | As of March 31, 2017 December 31, 2016 (In thousands) Trade accounts receivable $ 151,536 $ 159,094 Contracts in process, net 27,695 36,170 Total trade accounts receivable 179,231 195,264 Allowance for doubtful accounts (11,371 ) (12,752 ) Trade accounts receivable - DISH Network 47,717 19,323 Total trade accounts receivable, net $ 215,577 $ 201,835 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory, Net [Abstract] | |
Schedule of inventory | As of March 31, 2017 December 31, 2016 (In thousands) Finished goods $ 64,762 $ 49,773 Raw materials 7,936 6,678 Work-in-process 6,724 6,187 Total inventory $ 79,422 $ 62,638 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | For the Three Months Ended March 31, 2017 2016 (In thousands) Satellites $ 52,143 $ 46,965 Furniture, fixtures, equipment and other 16,682 14,042 Customer rental equipment 30,596 29,137 Buildings and improvements 1,257 1,061 Total depreciation expense $ 100,678 $ 91,205 Depreciable Life (In Years) As of March 31, 2017 December 31, 2016 (In thousands) Land — $ 13,321 $ 13,273 Buildings and improvements 1 - 30 125,906 79,765 Furniture, fixtures, equipment and other 1 - 12 538,367 430,078 Customer rental equipment 2 - 4 722,549 689,579 Satellites - owned 2 - 15 2,926,569 2,381,120 Satellites acquired under capital leases 10 - 15 796,245 781,761 Construction in progress — 353,813 422,337 Total property and equipment 5,476,770 4,797,913 Accumulated depreciation (2,618,013 ) (2,503,187 ) Property and equipment, net $ 2,858,757 $ 2,294,726 |
Schedule of construction in progress | As of March 31, 2017 December 31, 2016 (In thousands) Progress amounts for satellite construction, including prepayments under capital leases and launch services costs $ 260,868 $ 244,234 Satellite related equipment 81,278 152,683 Other 11,667 25,420 Construction in progress $ 353,813 $ 422,337 Construction in progress included the following owned and leased satellites under construction or undergoing in-orbit testing as of March 31, 2017 . Satellites Segment Expected Launch Date EchoStar 105/SES-11 ESS Third or fourth quarter of 2017 Telesat T19V (“63 West”) (1) Hughes Second quarter of 2018 (1) We entered into a satellite services agreement for certain capacity on this satellite once launched, but are not party to the construction contract. |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of other intangible assets subject to amortization | Weighted Average Useful Life (in Years) As of March 31, 2017 December 31, 2016 Cost Accumulated Amortization Carrying Amount Cost Accumulated Amortization Carrying Amount (In thousands) Customer relationships 8 $ 270,300 $ (220,201 ) $ 50,099 $ 270,300 $ (214,544 ) $ 55,756 Technology-based 6 51,417 (49,989 ) 1,428 51,417 (47,848 ) 3,569 Trademark portfolio 20 29,700 (8,663 ) 21,037 29,700 (8,291 ) 21,409 Total other intangible assets $ 351,417 $ (278,853 ) $ 72,564 $ 351,417 $ (270,683 ) $ 80,734 |
Debt and Capital Lease Obliga28
Debt and Capital Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt and Capital Lease Obligations [Abstract] | |
Schedule of carrying amounts and fair values of the entity's debt | Effective Interest Rate As of March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) Senior Secured Notes: 6 1/2% Senior Secured Notes due 2019 6.959% $ 990,000 $ 1,074,051 $ 990,000 $ 1,084,050 5 1/4% Senior Secured Notes due 2026 5.316% 750,000 750,000 750,000 739,688 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 997,200 900,000 990,189 6 5/8% Senior Unsecured Notes due 2026 6.685% 750,000 767,498 750,000 760,245 Other 609 609 — — Less: Unamortized debt issuance costs (30,030 ) — (31,821 ) — Subtotal 3,360,579 $ 3,589,358 3,358,179 $ 3,574,172 Capital lease obligations 296,735 297,268 Total debt and capital lease obligations 3,657,314 3,655,447 Less: Current portion (37,270 ) (32,984 ) Long-term debt and capital lease obligations, net of unamortized debt issuance costs $ 3,620,044 $ 3,622,463 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of revenue, EBITDA, and capital expenditures by operating segments | The following table presents revenue, EBITDA, and capital expenditures for each of our operating segments. Hughes EchoStar Satellite Services Corporate and Other Consolidated Total (In thousands) For the Three Months Ended March 31, 2017 External revenue $ 328,610 $ 100,151 $ 1,357 $ 430,118 Intersegment revenue $ 710 $ 175 $ (885 ) $ — Total revenue $ 329,320 $ 100,326 $ 472 $ 430,118 EBITDA $ 100,852 $ 83,063 $ (12,146 ) $ 171,769 Capital expenditures $ 65,667 $ 8,508 $ — $ 74,175 For the Three Months Ended March 31, 2016 External revenue $ 325,539 $ 102,815 $ 772 $ 429,126 Intersegment revenue $ 699 $ 174 $ (873 ) $ — Total revenue $ 326,238 $ 102,989 $ (101 ) $ 429,126 EBITDA $ 110,356 $ 88,640 $ (6,550 ) $ 192,446 Capital expenditures $ 104,237 $ 24,720 $ — $ 128,957 |
Schedule of reconciliation of EBITDA to reported income before income taxes | The following table reconciles total consolidated EBITDA to reported “ Income before income taxes ” in our condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended March 31, 2017 2016 (In thousands) EBITDA $ 171,769 $ 192,446 Interest income and expense, net (53,996 ) (36,117 ) Depreciation and amortization (112,220 ) (102,369 ) Net income attributable to noncontrolling interests 292 111 Income before income taxes $ 5,845 $ 54,071 |
Supplemental Guarantor and No30
Supplemental Guarantor and Non-Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
Schedule of consolidating balance sheet | Condensed Consolidating Balance Sheet as of March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 2,080,794 $ 46,049 $ 34,283 $ — $ 2,161,126 Marketable investment securities, at fair value 89,441 8,825 — — 98,266 Trade accounts receivable, net — 123,552 44,308 — 167,860 Trade accounts receivable - DISH Network, net — 47,717 — — 47,717 Inventory — 61,543 17,879 — 79,422 Advances to affiliates, net 129,030 26,383 3,718 (35,256 ) 123,875 Other current assets 18 20,807 28,688 (30 ) 49,483 Total current assets 2,299,283 334,876 128,876 (35,286 ) 2,727,749 Restricted cash and cash equivalents 6,785 — 767 — 7,552 Property and equipment, net — 2,596,651 262,106 — 2,858,757 Regulatory authorizations, net — 471,658 — — 471,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 72,564 — — 72,564 Investments in unconsolidated entities — 36,771 — — 36,771 Investment in subsidiaries 3,100,630 286,291 — (3,386,921 ) — Advances to affiliates 700 60,761 — (61,461 ) — Other noncurrent assets, net 111,812 151,200 101,590 (111,812 ) 252,790 Total assets $ 5,519,210 $ 4,514,945 $ 493,339 $ (3,595,480 ) $ 6,932,014 Liabilities and Shareholders’ Equity (Deficit) Trade accounts payable $ — $ 101,254 $ 12,989 $ — $ 114,243 Current portion of long-term debt and capital lease obligations — 33,068 4,202 — 37,270 Advances from affiliates, net — 3,576 31,767 (35,256 ) 87 Accrued expenses and other 55,843 121,217 42,492 (30 ) 219,522 Total current liabilities 55,843 259,115 91,450 (35,286 ) 371,122 Long-term debt and capital lease obligations, net of unamortized debt issuance costs 3,359,970 254,273 5,801 — 3,620,044 Deferred tax liabilities, net — 792,120 141 (111,812 ) 680,449 Advances from affiliates — — 93,169 (61,461 ) 31,708 Other non-current liabilities — 109,730 2,442 — 112,172 Total HSS shareholders’ equity (deficit) 2,103,397 3,099,707 287,214 (3,386,921 ) 2,103,397 Noncontrolling interests — — 13,122 — 13,122 Total liabilities and shareholders’ equity (deficit) $ 5,519,210 $ 4,514,945 $ 493,339 $ (3,595,480 ) $ 6,932,014 December 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 1,991,949 $ 53,905 $ 25,110 $ — $ 2,070,964 Marketable investment securities, at fair value 177,614 10,309 — — 187,923 Trade accounts receivable, net — 138,861 43,651 — 182,512 Trade accounts receivable - DISH Network, net — 19,323 — — 19,323 Advances to affiliates, net 10 999,340 4,968 (893,866 ) 110,452 Inventory — 45,623 17,015 — 62,638 Other current assets 48 19,183 27,083 — 46,314 Total current assets 2,169,621 1,286,544 117,827 (893,866 ) 2,680,126 Restricted cash and cash equivalents 11,097 — 723 — 11,820 Property and equipment, net — 2,061,831 232,895 — 2,294,726 Regulatory authorizations, net — 471,658 — — 471,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 80,734 — — 80,734 Investments in unconsolidated entities — 42,560 — — 42,560 Investment in subsidiaries 3,721,688 314,643 — (4,036,331 ) — Advances to affiliates 700 60,761 — (61,461 ) — Other noncurrent assets, net 92,727 142,091 153,646 (92,727 ) 295,737 Total assets $ 5,995,833 $ 4,964,995 $ 505,091 $ (5,084,385 ) $ 6,381,534 Liabilities and Shareholders’ Equity (Deficit) Trade accounts payable $ — $ 94,095 $ 12,321 $ — $ 106,416 Current portion of long-term debt and capital lease obligations — 32,177 807 — 32,984 Advances from affiliates, net 850,807 12,228 31,429 (893,866 ) 598 Accrued expenses and other 44,654 136,921 38,738 — 220,313 Total current liabilities 895,461 275,421 83,295 (893,866 ) 360,311 Long-term debt and capital lease obligations, net of unamortized debt issuance costs 3,358,179 262,883 1,401 — 3,622,463 Deferred tax liabilities, net — 621,061 128 (92,727 ) 528,462 Advances from affiliates — — 93,429 (61,461 ) 31,968 Other non-current liabilities — 80,532 2,775 — 83,307 Total HSS shareholders’ equity (deficit) 1,742,193 3,725,098 311,233 (4,036,331 ) 1,742,193 Noncontrolling interests — — 12,830 — 12,830 Total liabilities and shareholders’ equity (deficit) $ 5,995,833 $ 4,964,995 $ 505,091 $ (5,084,385 ) $ 6,381,534 |
Schedule of consolidating statement of operations and comprehensive income (loss) | Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) For the Three Months Ended March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 111,304 $ 186 $ — $ 111,490 Services and other revenue - other — 241,372 34,363 (5,512 ) 270,223 Equipment revenue - DISH Network — 31 — — 31 Equipment revenue - other — 51,204 4,677 (7,507 ) 48,374 Total revenue — 403,911 39,226 (13,019 ) 430,118 Costs and Expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 106,544 29,710 (5,355 ) 130,899 Cost of sales - equipment (exclusive of depreciation and amortization) — 47,812 3,274 (6,860 ) 44,226 Selling, general and administrative expenses — 65,685 9,497 (804 ) 74,378 Research and development expenses — 7,705 — — 7,705 Depreciation and amortization — 105,447 6,773 — 112,220 Total costs and expenses — 333,193 49,254 (13,019 ) 369,428 Operating income — 70,718 (10,028 ) — 60,690 Other Income (Expense): Interest income 5,490 202 348 (199 ) 5,841 Interest expense, net of amounts capitalized (57,299 ) (3,222 ) 485 199 (59,837 ) Gains on marketable investment securities, net — 91 — — 91 Other-than-temporary impairment loss on available-for-sale securities (3,298 ) (3,298 ) Equity in earnings of unconsolidated affiliate — 1,711 — — 1,711 Equity in earnings (losses) of subsidiaries, net 41,859 (6,201 ) — (35,658 ) — Other, net — (138 ) 785 — 647 Total other income (expense), net (9,950 ) (10,855 ) 1,618 (35,658 ) (54,845 ) Income (loss) before income taxes (9,950 ) 59,863 (8,410 ) (35,658 ) 5,845 Income tax benefit (provision) 19,085 (17,856 ) 2,353 — 3,582 Net income (loss) 9,135 42,007 (6,057 ) (35,658 ) 9,427 Less: Net income attributable to noncontrolling interests — — 292 — 292 Net income (loss) attributable to HSS $ 9,135 $ 42,007 $ (6,349 ) $ (35,658 ) $ 9,135 Comprehensive Income (Loss): Net income (loss) $ 9,135 $ 42,007 $ (6,057 ) $ (35,658 ) $ 9,427 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 12,121 — 12,121 Unrealized gains (losses) on available-for-sale securities and other (27 ) (1,574 ) 101 — (1,500 ) Recognition of other-than-temporary loss on available-for-sale securities in net income (loss) — 3,298 — — 3,298 Equity in other comprehensive income (loss) of subsidiaries, net 13,946 12,222 — (26,168 ) — Total other comprehensive income (loss), net of tax 13,919 13,946 12,222 (26,168 ) 13,919 Comprehensive income (loss) 23,054 55,953 6,165 (61,826 ) 23,346 Less: Comprehensive income attributable to noncontrolling interests — — 292 — 292 Comprehensive income (loss) attributable to HSS $ 23,054 $ 55,953 $ 5,873 $ (61,826 ) $ 23,054 For the Three Months Ended March 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 113,075 $ — $ — $ 113,075 Services and other revenue - other — 246,078 29,778 (5,433 ) 270,423 Equipment revenue - DISH Network — 2,769 — — 2,769 Equipment revenue - other — 43,897 2,937 (3,975 ) 42,859 Total revenue — 405,819 32,715 (9,408 ) 429,126 Costs and Expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 108,448 21,274 (5,145 ) 124,577 Cost of sales - equipment (exclusive of depreciation and amortization) — 44,013 2,607 (3,512 ) 43,108 Selling, general and administrative expenses — 62,339 9,327 (751 ) 70,915 Research and development expenses — 6,932 — — 6,932 Depreciation and amortization — 100,842 1,527 — 102,369 Total costs and expenses — 322,574 34,735 (9,408 ) 347,901 Operating income — 83,245 (2,020 ) — 81,225 Other Income (Expense): Interest income 1,229 45 649 (9 ) 1,914 Interest expense, net of amounts capitalized (34,781 ) (4,469 ) 1,210 9 (38,031 ) Gains on marketable investment securities, net — 215 — — 215 Equity in earnings of unconsolidated affiliate — 1,859 — — 1,859 Equity in earnings (losses) of subsidiaries, net 51,079 (446 ) — (50,633 ) — Other, net 6,750 (207 ) 346 — 6,889 Total other income (expense), net 24,277 (3,003 ) 2,205 (50,633 ) (27,154 ) Income (loss) before income taxes 24,277 80,242 185 (50,633 ) 54,071 Income tax benefit (provision) 9,642 (29,074 ) (609 ) — (20,041 ) Net income (loss) 33,919 51,168 (424 ) (50,633 ) 34,030 Less: Net income attributable to noncontrolling interests — — 111 — 111 Net income (loss) attributable to HSS $ 33,919 $ 51,168 $ (535 ) $ (50,633 ) $ 33,919 Comprehensive Income (Loss): Net income (loss) $ 33,919 $ 51,168 $ (424 ) $ (50,633 ) $ 34,030 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 7,709 — 7,709 Unrealized losses on available-for-sale securities and other 244 (650 ) 32 — (374 ) Equity in other comprehensive income (loss) of subsidiaries, net 7,091 7,741 — (14,832 ) — Total other comprehensive income (loss), net of tax 7,335 7,091 7,741 (14,832 ) 7,335 Comprehensive income (loss) 41,254 58,259 7,317 (65,465 ) 41,365 Less: Comprehensive income attributable to noncontrolling interests — — 111 — 111 Comprehensive income (loss) attributable to HSS $ 41,254 $ 58,259 $ 7,206 $ (65,465 ) $ 41,254 |
Schedule of consolidating statement of cash flows | Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2017 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities: Net income (loss) $ 9,135 $ 42,007 $ (6,057 ) $ (35,658 ) $ 9,427 Adjustments to reconcile net income (loss) to net cash flows from operating activities 11,863 27,173 7,956 35,658 82,650 Net cash flows from operating activities 20,998 69,180 1,899 — 92,077 Cash Flows from Investing Activities: Sales and maturities of marketable investment securities 87,435 — — — 87,435 Expenditures for property and equipment — (53,634 ) (20,541 ) — (74,175 ) Changes in restricted cash and cash equivalents 4,312 — (44 ) — 4,268 Investment in subsidiary (24,500 ) (27,500 ) — 52,000 — Expenditures for externally marketed software — (10,832 ) — — (10,832 ) Net cash flows from investing activities 67,247 (91,966 ) (20,585 ) 52,000 6,696 Cash Flows from Financing Activities: Proceeds from capital contribution from parent — 24,500 27,500 (52,000 ) — Repayment of debt and capital lease obligations — (7,717 ) (412 ) — (8,129 ) Other, net 600 (1,853 ) 82 — (1,171 ) Net cash flows from financing activities 600 14,930 27,170 (52,000 ) (9,300 ) Effect of exchange rates on cash and cash equivalents — — 689 — 689 Net increase (decrease) in cash and cash equivalents 88,845 (7,856 ) 9,173 — 90,162 Cash and cash equivalents, at beginning of period 1,991,949 53,905 25,110 — 2,070,964 Cash and cash equivalents, at end of period $ 2,080,794 $ 46,049 $ 34,283 $ — $ 2,161,126 For the Three Months Ended March 31, 2016 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities: Net income (loss) $ 33,919 $ 51,168 $ (424 ) $ (50,633 ) $ 34,030 Adjustments to reconcile net income (loss) to net cash flows from operating activities 24,712 46,000 11,353 50,633 132,698 Net cash flows from operating activities 58,631 97,168 10,929 — 166,728 Cash Flows from Investing Activities: Purchases of marketable investment securities (134,572 ) — — — (134,572 ) Sales and maturities of marketable investment securities 146,814 — — — 146,814 Expenditures for property and equipment — (88,958 ) (39,999 ) — (128,957 ) Expenditures for externally marketed software — (5,959 ) — — (5,959 ) Changes in restricted cash and cash equivalents (618 ) — (44 ) — (662 ) Investment in subsidiary (28,199 ) (28,199 ) — 56,398 — Payment for EchoStar XXI launch services — — (11,875 ) — (11,875 ) Other, net — 340 — (340 ) — Net cash flows from investing activities (16,575 ) (122,776 ) (51,918 ) 56,058 (135,211 ) Cash Flows from Financing Activities: Proceeds from capital contributions from parent — 28,199 28,199 (56,398 ) — Capital contribution from EchoStar 11,875 — — — 11,875 Repayment of long-term debt and capital lease obligations — (6,912 ) (1,302 ) — (8,214 ) Advances from affiliates — — 2,504 — 2,504 Other, net — (869 ) 742 340 213 Net cash flows from financing activities 11,875 20,418 30,143 (56,058 ) 6,378 Effect of exchange rates on cash and cash equivalents — — 43 — 43 Net increase (decrease) in cash and cash equivalents 53,931 (5,190 ) (10,803 ) — 37,938 Cash and cash equivalents, at beginning of period 300,634 55,767 26,589 — 382,990 Cash and cash equivalents, at end of period $ 354,565 $ 50,577 $ 15,786 $ — $ 420,928 |
Organization and Business Act31
Organization and Business Activities (Details) $ in Millions | Mar. 02, 2014USD ($)satellite | Mar. 31, 2014satellite | Mar. 31, 2017segment | Jan. 31, 2017 |
Targeted or Tracking Stock, Stock [Line Items] | ||||
Number of business segments | segment | 2 | |||
EchoStar and HSSC | Satellite And Tracking Stock Transaction [Member] | DISH Network | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Number of owned satellites transferred | satellite | 5 | 5 | ||
Proceeds from issuance of Tracking Stock | $ | $ 11.4 | |||
HSS | Satellite And Tracking Stock Transaction [Member] | Hughes Retail Group [Member] | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Percentage of economic interest in the Hughes Retail Group | 20.00% | |||
HSS | Satellite And Tracking Stock Transaction [Member] | DISH Network | Hughes Retail Group [Member] | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Percentage of economic interest in the Hughes Retail Group | 28.11% | |||
Echo Star Corporation [Member] | Satellite And Tracking Stock Transaction [Member] | DISH Network | Hughes Retail Group [Member] | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Percentage of economic interest in the Hughes Retail Group | 51.89% | |||
Hughes Retail Preferred Tracking Stock | Satellite And Tracking Stock Transaction [Member] | DISH Network | Hughes Retail Group [Member] | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | |||
EchoStar Technologies Business [Member] | Share Exchange Agreement [Member] | DISH Network | ||||
Targeted or Tracking Stock, Stock [Line Items] | ||||
Ownership interest acquired by related party | 100.00% |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value Measurements | |||
Amount of transfers between levels within the fair value hierarchy | $ 0 | $ 0 | |
Research and Development | |||
Research and development expenses | 7,705,000 | 6,932,000 | |
Capitalized Software Costs | |||
Expenditures for externally marketed software | (10,832,000) | (5,959,000) | |
Other noncurrent assets, net | |||
Capitalized Software Costs | |||
Net carrying amount of externally marketed software | 83,800,000 | $ 76,300,000 | |
Externally marketed software under development and not yet placed in service | 13,500,000 | 50,100,000 | |
Expenditures for externally marketed software | (10,800,000) | (5,900,000) | |
Amortization expense relating the externally marketed software | $ 3,400,000 | 2,300,000 | |
Maximum | |||
Capitalized Software Costs | |||
Software useful life | 5 years | ||
Weighted Average | |||
Capitalized Software Costs | |||
Software useful life | 4 years | ||
Cost of Sales | |||
Research and Development | |||
Research and development expenses | $ 6,900,000 | 2,800,000 | |
Research and Development Expense | |||
Research and Development | |||
Research and development expenses | 7,700,000 | $ 6,900,000 | |
Level 2 | |||
Fair Value Measurements | |||
Orbital incentive obligations | $ 103,600,000 | $ 74,100,000 | |
6 1/2% Senior Secured Notes due 2019 | |||
Fair Value Measurements | |||
Interest rate | 6.50% | 6.50% | |
7 5/8% Senior Unsecured Notes due 2021 | |||
Fair Value Measurements | |||
Interest rate | 7.625% | 7.625% | |
5 1/4% Senior Secured Notes due 2026 | |||
Fair Value Measurements | |||
Interest rate | 5.25% | 5.25% | |
6 5/8% Senior Unsecured Notes due 2026 | |||
Fair Value Measurements | |||
Interest rate | 6.625% | 6.625% |
Other Comprehensive Income (L33
Other Comprehensive Income (Loss) and Related Tax Effects (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Tax effects on foreign currency translation adjustments | $ 0 | $ 0 | |
Tax effects on unrealized gains or losses on available-for-sale securities | 0 | 0 | |
Cumulative foreign currency translation losses | 46,900,000 | $ 59,000,000 | |
Reclassification out of accumulated other comprehensive loss | |||
Other-than-temporary impairment loss on available-for-sale securities | 3,298,000 | 0 | |
Total reclassifications, net of tax and noncontrolling interests | 3,298,000 | 0 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | |||
Reclassification out of accumulated other comprehensive loss | |||
Other-than-temporary impairment loss on available-for-sale securities | $ 3,298,000 | $ 0 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Marketable investment securities - current, at fair value: | |||
Total marketable investment securities—current | $ 98,266,000 | $ 187,923,000 | |
Other-than-temporary impairment loss on available-for-sale securities | (3,298,000) | $ 0 | |
Investments in unconsolidated entities - noncurrent: | |||
Cost Method Investments | 15,438,000 | 15,438,000 | |
Equity Method Investments | 21,333,000 | 27,122,000 | |
Total investments in unconsolidated entities - noncurrent | 36,771,000 | 42,560,000 | |
Dividends received from unconsolidated entity | 7,500,000 | 0 | |
Corporate bonds | |||
Marketable investment securities - current, at fair value: | |||
Marketable investment securities, at fair value | 88,950,000 | 164,619,000 | |
Strategic equity securities | |||
Marketable investment securities - current, at fair value: | |||
Marketable investment securities, at fair value | 8,825,000 | 10,309,000 | |
Dividend income from strategic equity securities | 0 | 0 | |
Other-than-temporary impairment loss on available-for-sale securities | (3,300,000) | ||
Fair values of trading securities | 7,300,000 | 7,200,000 | |
Strategic equity securities | Gains on marketable investment securities, net | |||
Marketable investment securities - current, at fair value: | |||
Gains related to trading securities | 100,000 | $ 200,000 | |
Other | |||
Marketable investment securities - current, at fair value: | |||
Marketable investment securities, at fair value | $ 491,000 | $ 12,995,000 |
Investment Securities (Details
Investment Securities (Details 2) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | $ 90,946 | $ 182,391 |
Unrealized Gains | 45 | 95 |
Unrealized Losses | (14) | (1,762) |
Estimated Fair Value | 90,977 | 180,724 |
Corporate bonds | ||
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | 88,919 | 164,563 |
Unrealized Gains | 45 | 94 |
Unrealized Losses | (14) | (38) |
Estimated Fair Value | 88,950 | 164,619 |
Other | ||
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | 491 | 12,994 |
Unrealized Gains | 0 | 1 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 491 | 12,995 |
Strategic equity securities | ||
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | 1,536 | 4,834 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (1,724) |
Estimated Fair Value | $ 1,536 | $ 3,110 |
Investment Securities (Detail36
Investment Securities (Details 3) $ in Millions | Mar. 31, 2017USD ($) |
Contractual maturities of debt securities | |
Debt securities with contractual maturities of one year or less | $ 89.4 |
Debt securities with contractual maturities exceeding one year | $ 0 |
Investment Securities (Detail37
Investment Securities (Details 4) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value | |||
Less than 12 months | $ 25,198 | $ 62,473 | |
12 months or more | 0 | 1,571 | |
Total | 25,198 | 64,044 | |
Unrealized Losses | |||
Less than 12 months | (14) | (1,760) | |
12 months or more | 0 | (2) | |
Total | (14) | $ (1,762) | |
Sales of Available-For-Sale Securities | |||
Proceeds from sales of available-for-sale securities | $ 0 | $ 2,300 |
Investment Securities (Detail38
Investment Securities (Details 5) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Corporate bonds | ||
Fair value of marketable securities | ||
Debt securities | $ 88,950,000 | $ 164,619,000 |
Other | ||
Fair value of marketable securities | ||
Debt securities | 491,000 | 12,995,000 |
Strategic equity securities | ||
Fair value of marketable securities | ||
Equity securities | 8,825,000 | 10,309,000 |
Level 3 | ||
Fair value of marketable securities | ||
Fair value of investments | 0 | 0 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Cash equivalents | 2,080,794,000 | 1,991,949,000 |
Total marketable investment securities | 98,266,000 | 187,923,000 |
Fair value measurements on recurring basis | Corporate bonds | ||
Fair value of marketable securities | ||
Debt securities | 88,950,000 | 164,619,000 |
Fair value measurements on recurring basis | Other | ||
Fair value of marketable securities | ||
Debt securities | 491,000 | 12,995,000 |
Fair value measurements on recurring basis | Strategic equity securities | ||
Fair value of marketable securities | ||
Equity securities | 8,825,000 | 10,309,000 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Cash equivalents | 16,304,000 | 14,011,000 |
Total marketable investment securities | 8,825,000 | 10,309,000 |
Fair value measurements on recurring basis | Level 1 | Corporate bonds | ||
Fair value of marketable securities | ||
Debt securities | 0 | 0 |
Fair value measurements on recurring basis | Level 1 | Other | ||
Fair value of marketable securities | ||
Debt securities | 0 | 0 |
Fair value measurements on recurring basis | Level 1 | Strategic equity securities | ||
Fair value of marketable securities | ||
Equity securities | 8,825,000 | 10,309,000 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Cash equivalents | 2,064,490,000 | 1,977,938,000 |
Total marketable investment securities | 89,441,000 | 177,614,000 |
Fair value measurements on recurring basis | Level 2 | Corporate bonds | ||
Fair value of marketable securities | ||
Debt securities | 88,950,000 | 164,619,000 |
Fair value measurements on recurring basis | Level 2 | Other | ||
Fair value of marketable securities | ||
Debt securities | 491,000 | 12,995,000 |
Fair value measurements on recurring basis | Level 2 | Strategic equity securities | ||
Fair value of marketable securities | ||
Equity securities | $ 0 | $ 0 |
Trade Accounts Receivable (Deta
Trade Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Trade accounts receivable | ||
Total trade accounts receivable | $ 179,231 | $ 195,264 |
Allowance for doubtful accounts | (11,371) | (12,752) |
Trade accounts receivable - DISH Network | 47,717 | 19,323 |
Total trade accounts receivable, net | 215,577 | 201,835 |
Progress billings offset against contracts in process | 10,400 | 14,600 |
Trade accounts receivable | ||
Trade accounts receivable | ||
Total trade accounts receivable | 151,536 | 159,094 |
Contracts in process, net | ||
Trade accounts receivable | ||
Total trade accounts receivable | $ 27,695 | $ 36,170 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory, Net [Abstract] | ||
Finished goods | $ 64,762 | $ 49,773 |
Raw materials | 7,936 | 6,678 |
Work-in-process | 6,724 | 6,187 |
Total inventory | $ 79,422 | $ 62,638 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Property and equipment | ||
Total property and equipment | $ 5,476,770 | $ 4,797,913 |
Accumulated depreciation | (2,618,013) | (2,503,187) |
Property and equipment, net | 2,858,757 | 2,294,726 |
Land | ||
Property and equipment | ||
Total property and equipment | 13,321 | 13,273 |
Buildings and improvements | ||
Property and equipment | ||
Total property and equipment | $ 125,906 | 79,765 |
Buildings and improvements | Minimum | ||
Property and equipment | ||
Depreciable Life | 1 year | |
Buildings and improvements | Maximum | ||
Property and equipment | ||
Depreciable Life | 30 years | |
Furniture, fixtures, equipment and other | ||
Property and equipment | ||
Total property and equipment | $ 538,367 | 430,078 |
Furniture, fixtures, equipment and other | Minimum | ||
Property and equipment | ||
Depreciable Life | 1 year | |
Furniture, fixtures, equipment and other | Maximum | ||
Property and equipment | ||
Depreciable Life | 12 years | |
Customer rental equipment | ||
Property and equipment | ||
Total property and equipment | $ 722,549 | 689,579 |
Customer rental equipment | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Customer rental equipment | Maximum | ||
Property and equipment | ||
Depreciable Life | 4 years | |
Satellites - owned | ||
Property and equipment | ||
Total property and equipment | $ 2,926,569 | 2,381,120 |
Satellites - owned | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Satellites - owned | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Satellites acquired under capital leases | ||
Property and equipment | ||
Total property and equipment | $ 796,245 | 781,761 |
Satellites acquired under capital leases | Minimum | ||
Property and equipment | ||
Depreciable Life | 10 years | |
Satellites acquired under capital leases | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Construction in progress | ||
Property and equipment | ||
Total property and equipment | $ 353,813 | $ 422,337 |
Property and Equipment (Detai42
Property and Equipment (Details 2) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Construction in progress | $ 353,813 | $ 422,337 |
Progress amounts for satellite construction, including prepayments under capital leases and launch services costs | ||
Property and equipment | ||
Construction in progress | 260,868 | 244,234 |
Satellite related equipment | ||
Property and equipment | ||
Construction in progress | 81,278 | 152,683 |
Other | ||
Property and equipment | ||
Construction in progress | $ 11,667 | $ 25,420 |
Property and Equipment (Detai43
Property and Equipment (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Depreciation expense | ||
Total depreciation expense | $ 100,678 | $ 91,205 |
Satellites | ||
Depreciation expense | ||
Total depreciation expense | 52,143 | 46,965 |
Furniture, fixtures, equipment and other | ||
Depreciation expense | ||
Total depreciation expense | 16,682 | 14,042 |
Customer rental equipment | ||
Depreciation expense | ||
Total depreciation expense | 30,596 | 29,137 |
Buildings and improvements | ||
Depreciation expense | ||
Total depreciation expense | $ 1,257 | $ 1,061 |
Property and Equipment (Detai44
Property and Equipment (Details 4) - Satellites | 3 Months Ended |
Mar. 31, 2017satellite | |
Property and equipment | |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | 18 |
Number of satellites utilized under capital lease | 3 |
Number of satellites utilized under operating lease | 1 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Goodwill and Other Intangible Assets | |||
Cost | $ 351,417 | $ 351,417 | |
Accumulated Amortization | (278,853) | (270,683) | |
Carrying Amount | 72,564 | 80,734 | |
Amortization expense | 11,500 | $ 11,200 | |
Customer relationships | |||
Goodwill and Other Intangible Assets | |||
Cost | 270,300 | 270,300 | |
Accumulated Amortization | (220,201) | (214,544) | |
Carrying Amount | $ 50,099 | 55,756 | |
Customer relationships | Weighted Average | |||
Goodwill and Other Intangible Assets | |||
Weighted Average Useful Life | 8 years | ||
Technology-based | |||
Goodwill and Other Intangible Assets | |||
Cost | $ 51,417 | 51,417 | |
Accumulated Amortization | (49,989) | (47,848) | |
Carrying Amount | $ 1,428 | 3,569 | |
Technology-based | Weighted Average | |||
Goodwill and Other Intangible Assets | |||
Weighted Average Useful Life | 6 years | ||
Trademark portfolio | |||
Goodwill and Other Intangible Assets | |||
Cost | $ 29,700 | 29,700 | |
Accumulated Amortization | (8,663) | (8,291) | |
Carrying Amount | $ 21,037 | $ 21,409 | |
Trademark portfolio | Weighted Average | |||
Goodwill and Other Intangible Assets | |||
Weighted Average Useful Life | 20 years |
Debt and Capital Lease Obliga46
Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt and Capital Lease Obligations | ||
Fair Value | $ 3,589,358 | $ 3,574,172 |
Carrying amount | 3,360,579 | 3,358,179 |
Capital lease obligations | 296,735 | 297,268 |
Total debt and capital lease obligations | 3,657,314 | 3,655,447 |
Less: Current portion | (37,270) | (32,984) |
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | $ 3,620,044 | $ 3,622,463 |
6 1/2% Senior Secured Notes due 2019 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 6.50% | 6.50% |
Effective Interest Rate | 6.959% | |
Carrying Amount | $ 990,000 | $ 990,000 |
Fair Value | $ 1,074,051 | $ 1,084,050 |
5 1/4% Senior Secured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 5.25% | 5.25% |
Effective Interest Rate | 5.316% | |
Carrying Amount | $ 750,000 | $ 750,000 |
Fair Value | $ 750,000 | $ 739,688 |
7 5/8% Senior Unsecured Notes due 2021 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 7.625% | 7.625% |
Effective Interest Rate | 8.062% | |
Carrying Amount | $ 900,000 | $ 900,000 |
Fair Value | $ 997,200 | $ 990,189 |
6 5/8% Senior Unsecured Notes due 2026 | ||
Debt and Capital Lease Obligations | ||
Interest rate | 6.625% | 6.625% |
Effective Interest Rate | 6.685% | |
Carrying Amount | $ 750,000 | $ 750,000 |
Fair Value | 767,498 | 760,245 |
Other | ||
Debt and Capital Lease Obligations | ||
Carrying Amount | 609 | 0 |
Fair Value | 609 | 0 |
Unamortized debt issuance costs | ||
Debt and Capital Lease Obligations | ||
Less: Unamortized debt issuance costs | $ (30,030) | $ (31,821) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit (provision) | $ 3,582 | $ (20,041) |
Effective income tax rate | (61.30%) | 37.10% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2017USD ($) |
Satellite-related obligations | |
Other Commitments [Line Items] | |
Satellite-related obligations | $ 657.6 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | |
Segment Reporting [Abstract] | ||
Number of business segments | segment | 2 | |
Segment Reporting | ||
Total revenue | $ 430,118 | $ 429,126 |
EBITDA | 171,769 | 192,446 |
Capital expenditures | 74,175 | 128,957 |
Interest income and expense, net | (53,996) | (36,117) |
Depreciation and amortization | (112,220) | (102,369) |
Net income attributable to noncontrolling interests | 292 | 111 |
Income before income taxes | 5,845 | 54,071 |
Hughes Business | ||
Segment Reporting | ||
Total revenue | 328,610 | 325,539 |
Hughes Business | Intersegment | ||
Segment Reporting | ||
Total revenue | 710 | 699 |
Hughes Business | Operating segments | ||
Segment Reporting | ||
Total revenue | 329,320 | 326,238 |
EBITDA | 100,852 | 110,356 |
Capital expenditures | 65,667 | 104,237 |
EchoStar Satellite Services Business | ||
Segment Reporting | ||
Total revenue | 100,151 | 102,815 |
EchoStar Satellite Services Business | Intersegment | ||
Segment Reporting | ||
Total revenue | 175 | 174 |
EchoStar Satellite Services Business | Operating segments | ||
Segment Reporting | ||
Total revenue | 100,326 | 102,989 |
EBITDA | 83,063 | 88,640 |
Capital expenditures | 8,508 | 24,720 |
Corporate and Other | ||
Segment Reporting | ||
Total revenue | 1,357 | 772 |
Corporate and Other | Intersegment | ||
Segment Reporting | ||
Total revenue | (885) | (873) |
Corporate and Other | Corporate and Other | ||
Segment Reporting | ||
Total revenue | 472 | (101) |
EBITDA | (12,146) | (6,550) |
Capital expenditures | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Mar. 02, 2014USD ($)satellite | Feb. 28, 2022 | Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017USD ($) | Nov. 30, 2016 | Jul. 31, 2016 | Mar. 31, 2014satellite | Dec. 31, 2012 | Oct. 31, 2012 | May 31, 2012 | Sep. 30, 2009transponder | Nov. 30, 2008transponder | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016 | Dec. 31, 2009 | Jan. 31, 2017 | Feb. 28, 2013transponder | Mar. 31, 2012 | Sep. 30, 2010USD ($) |
Related party transactions | |||||||||||||||||||||
Contribution of EchoStar XIX satellite | $ 369,263 | ||||||||||||||||||||
Contribution of Property | 219,662 | $ 0 | |||||||||||||||||||
Transfer of launch service contracts to EchoStar | 61,842 | (70,300) | |||||||||||||||||||
Capital contribution from EchoStar | 0 | 11,875 | |||||||||||||||||||
Transfer of EchoStar XXIII launch service contract from EchoStar | $ (61,842) | 70,300 | |||||||||||||||||||
Hughes Broadband Distribution Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||
Required minimum notice for termination of agreement | 180 days | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Hughes Broadband Master Services Agreement [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Hughes Broadband Master Services Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice for termination of agreement | 90 days | ||||||||||||||||||||
Additional paid-in-capital | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Contribution of EchoStar XIX satellite | $ 369,263 | ||||||||||||||||||||
Transfer of EchoStar XXIII launch service contract from EchoStar | $ (61,842) | 70,300 | |||||||||||||||||||
One-year LIBOR | Related-Party Advances | Minimum | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Variable interest rates | 1.00% | ||||||||||||||||||||
One-year LIBOR | Related-Party Advances | Maximum | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Variable interest rates | 3.00% | ||||||||||||||||||||
EchoStar | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 30 days | ||||||||||||||||||||
Expense recorded for services provided | $ 5,000 | 2,500 | |||||||||||||||||||
EchoStar Operating | Additional paid-in-capital | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Transfer of EchoStar XXIII launch service contract from EchoStar | 61,800 | ||||||||||||||||||||
EchoStar Operating | Other noncurrent assets, net | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Transfer of launch service contracts to EchoStar | $ (61,800) | ||||||||||||||||||||
DISH Network | Satellite And Tracking Stock Transaction [Member] | Hughes Retail Preferred Tracking Stock | Hughes Retail Group [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | ||||||||||||||||||||
DISH Network | Echo Star V I I | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | ||||||||||||||||||||
DISH Network | EchoStar XVI | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | 10 years | |||||||||||||||||||
Agreement term from commencement of service date | 4 years | ||||||||||||||||||||
Renewal option reduction in years | 1 year | ||||||||||||||||||||
Term of renewal option | 5 years | ||||||||||||||||||||
Additional term of renewal option | 5 years | ||||||||||||||||||||
DISH Network | DISH Nimiq 5 Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Number of DBS transponders available | transponder | 32 | ||||||||||||||||||||
DISH Network | QuetzSat-1 Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Number of DBS transponders currently receiving services | transponder | 24 | ||||||||||||||||||||
Number of DBS transponders currently receiving services subleased back from related party | transponder | 5 | ||||||||||||||||||||
DISH Network | TT&C Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | ||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
DISH Network | TerreStar Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 1 year | 1 year | |||||||||||||||||||
Required minimum notice for termination of agreement | 90 days | ||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 60 days | ||||||||||||||||||||
DISH Network | DBSD North America Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Ownership interest acquired by related party | 100.00% | ||||||||||||||||||||
DISH Network | DBSD North America Agreement | Subsequent Event [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 5 years | 1 year | |||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 180 days | 120 days | |||||||||||||||||||
DISH Network | RUS Implementation Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Grants receivable by related party | $ 14,100 | ||||||||||||||||||||
DISH Network | EchoStar Amended and Restated Professional Services Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice for termination of agreement | 60 days | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Required minimum notice for termination of individual service | 30 days | ||||||||||||||||||||
DISH Network | Cheyenne Lease Agreement [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required Minimum Notice Period for Termination of Agreement After Lease Extension | 30 days | ||||||||||||||||||||
DISH Network | Collocation and Antenna Space Agreements [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 180 days | ||||||||||||||||||||
DISH Network | Ciel | DISH 103 Service Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
DISH Network | EchoStar and HSSC | Satellite And Tracking Stock Transaction [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Number of owned satellites transferred | satellite | 5 | 5 | |||||||||||||||||||
Proceeds from issuance of Tracking Stock | $ 11,400 | ||||||||||||||||||||
Telesat | TeleSat Transponder Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term from commencement of service date | 15 years | ||||||||||||||||||||
Number of DBS transponders available | transponder | 32 | ||||||||||||||||||||
SES Latin America | QuetzSat-1 Agreement | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||||
Number of DBS transponders available | transponder | 32 | ||||||||||||||||||||
EchoStar XIX [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Contribution of Property | $ 514,448 | $ 0 | |||||||||||||||||||
EchoStar XIX [Member] | EchoStar | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Contribution of Property | 514,400 | ||||||||||||||||||||
Deferred Tax Liabilities, Deferred Expense | $ 145,100 | 145,100 | |||||||||||||||||||
EchoStar XIX [Member] | EchoStar | Additional paid-in-capital | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Contribution of EchoStar XIX satellite | $ 369,300 | ||||||||||||||||||||
EchoStar Technologies Business [Member] | DISH Network | Share Exchange Agreement [Member] | |||||||||||||||||||||
Related party transactions | |||||||||||||||||||||
Ownership interest acquired by related party | 100.00% |
Related Party Transactions (D51
Related Party Transactions (Details 2) $ in Thousands | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 01, 2013subsidiary | Sep. 30, 2013USD ($) |
Related party transactions | ||||
Net amount of the allocated tax attributes receivable | $ 0 | $ 0 | ||
California Institute Of Technology [Member] | ||||
Related party transactions | ||||
Number of Subsidiaries Against which Lawsuit Filed | subsidiary | 2 | |||
Tax Sharing Agreement [Member] | DISH Network | ||||
Related party transactions | ||||
Net amount of the allocated tax attributes receivable | $ 93,100 |
Related Party Transactions (D52
Related Party Transactions (Details 3) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | May 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2008 | |
Hughes Systique | |||||||
Related party transactions | |||||||
Loan repayment | $ 600 | $ 1,500 | |||||
Remaining balance of loan | $ 0 | $ 0 | |||||
Ownership interest in related party | 43.80% | ||||||
Ownership interest percentage by related party | 25.70% | ||||||
Hughes Systique | HCI | |||||||
Related party transactions | |||||||
Amount agreed to be funded under term loan facility | $ 1,500 | ||||||
Interest rate | 8.00% | 6.00% | |||||
Dish Mexico | |||||||
Related party transactions | |||||||
Equity interest in joint ventures | 49.00% | 49.00% | |||||
Revenue from related parties | $ 3,900 | $ 5,800 | |||||
Receivables from related parties | $ 10,700 | $ 10,700 | 10,700 | ||||
Deluxe/EchoStar LLC | |||||||
Related party transactions | |||||||
Equity interest in joint ventures | 50.00% | 50.00% | |||||
Revenue from related parties | $ 1,200 | 700 | |||||
Receivables from related parties | $ 700 | 700 | $ 700 | ||||
AsiaSat [Member] | |||||||
Related party transactions | |||||||
Expenses from transactions with related party | $ 0 | $ 0 | $ 400 | ||||
Hughes Broadband Master Services Agreement [Member] | |||||||
Related party transactions | |||||||
Agreement term | 5 years |
Supplemental Guarantor and No53
Supplemental Guarantor and Non-Guarantor Financial Information (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Cash and cash equivalents | $ 2,161,126 | $ 2,070,964 | $ 420,928 | $ 382,990 |
Marketable investment securities, at fair value | 98,266 | 187,923 | ||
Trade accounts receivable, net | 167,860 | 182,512 | ||
Trade accounts receivable - DISH Network | 47,717 | 19,323 | ||
Inventory | 79,422 | 62,638 | ||
Advances to affiliates, net | 123,875 | 110,452 | ||
Other current assets | 49,483 | 46,314 | ||
Total current assets | 2,727,749 | 2,680,126 | ||
Restricted cash and cash equivalents | 7,552 | 11,820 | ||
Property and equipment, net | 2,858,757 | 2,294,726 | ||
Regulatory authorizations, net | 471,658 | 471,658 | ||
Goodwill | 504,173 | 504,173 | ||
Other intangible assets, net | 72,564 | 80,734 | ||
Investments in unconsolidated entities | 36,771 | 42,560 | ||
Investment in subsidiaries | 0 | 0 | ||
Advances to affiliates | 0 | 0 | ||
Other noncurrent assets, net | 252,790 | 295,737 | ||
Total assets | 6,932,014 | 6,381,534 | ||
Liabilities and Shareholders’ Equity (Deficit) | ||||
Trade accounts payable | 114,243 | 106,416 | ||
Current portion of long-term debt and capital lease obligations | 37,270 | 32,984 | ||
Advances from affiliates, net | 87 | 598 | ||
Accrued expenses and other | 219,522 | 220,313 | ||
Total current liabilities | 371,122 | 360,311 | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 3,620,044 | 3,622,463 | ||
Deferred tax liabilities, net | 680,449 | 528,462 | ||
Advances from affiliates | 31,708 | 31,968 | ||
Other non-current liabilities | 112,172 | 83,307 | ||
Total HSS shareholders’ equity (deficit) | 2,103,397 | 1,742,193 | ||
Noncontrolling interests | 13,122 | 12,830 | ||
Total liabilities and shareholders’ equity | 6,932,014 | 6,381,534 | ||
Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Marketable investment securities, at fair value | 0 | 0 | ||
Trade accounts receivable, net | 0 | 0 | ||
Trade accounts receivable - DISH Network | 0 | 0 | ||
Inventory | 0 | 0 | ||
Advances to affiliates, net | (35,256) | (893,866) | ||
Other current assets | (30) | 0 | ||
Total current assets | (35,286) | (893,866) | ||
Restricted cash and cash equivalents | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Investments in unconsolidated entities | 0 | 0 | ||
Investment in subsidiaries | (3,386,921) | (4,036,331) | ||
Advances to affiliates | (61,461) | (61,461) | ||
Other noncurrent assets, net | (111,812) | (92,727) | ||
Total assets | (3,595,480) | (5,084,385) | ||
Liabilities and Shareholders’ Equity (Deficit) | ||||
Trade accounts payable | 0 | 0 | ||
Current portion of long-term debt and capital lease obligations | 0 | 0 | ||
Advances from affiliates, net | (35,256) | (893,866) | ||
Accrued expenses and other | (30) | 0 | ||
Total current liabilities | (35,286) | (893,866) | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 0 | 0 | ||
Deferred tax liabilities, net | (111,812) | (92,727) | ||
Advances from affiliates | (61,461) | (61,461) | ||
Other non-current liabilities | 0 | 0 | ||
Total HSS shareholders’ equity (deficit) | (3,386,921) | (4,036,331) | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | (3,595,480) | (5,084,385) | ||
HSS | ||||
Assets | ||||
Cash and cash equivalents | 2,080,794 | 1,991,949 | 354,565 | 300,634 |
Marketable investment securities, at fair value | 89,441 | 177,614 | ||
Trade accounts receivable, net | 0 | 0 | ||
Trade accounts receivable - DISH Network | 0 | 0 | ||
Inventory | 0 | 0 | ||
Advances to affiliates, net | 129,030 | 10 | ||
Other current assets | 18 | 48 | ||
Total current assets | 2,299,283 | 2,169,621 | ||
Restricted cash and cash equivalents | 6,785 | 11,097 | ||
Property and equipment, net | 0 | 0 | ||
Regulatory authorizations, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Investments in unconsolidated entities | 0 | 0 | ||
Investment in subsidiaries | 3,100,630 | 3,721,688 | ||
Advances to affiliates | 700 | 700 | ||
Other noncurrent assets, net | 111,812 | 92,727 | ||
Total assets | 5,519,210 | 5,995,833 | ||
Liabilities and Shareholders’ Equity (Deficit) | ||||
Trade accounts payable | 0 | 0 | ||
Current portion of long-term debt and capital lease obligations | 0 | 0 | ||
Advances from affiliates, net | 0 | 850,807 | ||
Accrued expenses and other | 55,843 | 44,654 | ||
Total current liabilities | 55,843 | 895,461 | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 3,359,970 | 3,358,179 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Advances from affiliates | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Total HSS shareholders’ equity (deficit) | 2,103,397 | 1,742,193 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | 5,519,210 | 5,995,833 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 46,049 | 53,905 | 50,577 | 55,767 |
Marketable investment securities, at fair value | 8,825 | 10,309 | ||
Trade accounts receivable, net | 123,552 | 138,861 | ||
Trade accounts receivable - DISH Network | 47,717 | 19,323 | ||
Inventory | 61,543 | 45,623 | ||
Advances to affiliates, net | 26,383 | 999,340 | ||
Other current assets | 20,807 | 19,183 | ||
Total current assets | 334,876 | 1,286,544 | ||
Restricted cash and cash equivalents | 0 | 0 | ||
Property and equipment, net | 2,596,651 | 2,061,831 | ||
Regulatory authorizations, net | 471,658 | 471,658 | ||
Goodwill | 504,173 | 504,173 | ||
Other intangible assets, net | 72,564 | 80,734 | ||
Investments in unconsolidated entities | 36,771 | 42,560 | ||
Investment in subsidiaries | 286,291 | 314,643 | ||
Advances to affiliates | 60,761 | 60,761 | ||
Other noncurrent assets, net | 151,200 | 142,091 | ||
Total assets | 4,514,945 | 4,964,995 | ||
Liabilities and Shareholders’ Equity (Deficit) | ||||
Trade accounts payable | 101,254 | 94,095 | ||
Current portion of long-term debt and capital lease obligations | 33,068 | 32,177 | ||
Advances from affiliates, net | 3,576 | 12,228 | ||
Accrued expenses and other | 121,217 | 136,921 | ||
Total current liabilities | 259,115 | 275,421 | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 254,273 | 262,883 | ||
Deferred tax liabilities, net | 792,120 | 621,061 | ||
Advances from affiliates | 0 | 0 | ||
Other non-current liabilities | 109,730 | 80,532 | ||
Total HSS shareholders’ equity (deficit) | 3,099,707 | 3,725,098 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | 4,514,945 | 4,964,995 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 34,283 | 25,110 | $ 15,786 | $ 26,589 |
Marketable investment securities, at fair value | 0 | 0 | ||
Trade accounts receivable, net | 44,308 | 43,651 | ||
Trade accounts receivable - DISH Network | 0 | 0 | ||
Inventory | 17,879 | 17,015 | ||
Advances to affiliates, net | 3,718 | 4,968 | ||
Other current assets | 28,688 | 27,083 | ||
Total current assets | 128,876 | 117,827 | ||
Restricted cash and cash equivalents | 767 | 723 | ||
Property and equipment, net | 262,106 | 232,895 | ||
Regulatory authorizations, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Investments in unconsolidated entities | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Advances to affiliates | 0 | 0 | ||
Other noncurrent assets, net | 101,590 | 153,646 | ||
Total assets | 493,339 | 505,091 | ||
Liabilities and Shareholders’ Equity (Deficit) | ||||
Trade accounts payable | 12,989 | 12,321 | ||
Current portion of long-term debt and capital lease obligations | 4,202 | 807 | ||
Advances from affiliates, net | 31,767 | 31,429 | ||
Accrued expenses and other | 42,492 | 38,738 | ||
Total current liabilities | 91,450 | 83,295 | ||
Long-term debt and capital lease obligations, net of unamortized debt issuance costs | 5,801 | 1,401 | ||
Deferred tax liabilities, net | 141 | 128 | ||
Advances from affiliates | 93,169 | 93,429 | ||
Other non-current liabilities | 2,442 | 2,775 | ||
Total HSS shareholders’ equity (deficit) | 287,214 | 311,233 | ||
Noncontrolling interests | 13,122 | 12,830 | ||
Total liabilities and shareholders’ equity | $ 493,339 | $ 505,091 |
Supplemental Guarantor and No54
Supplemental Guarantor and Non-Guarantor Financial Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Services and other revenue - DISH Network | $ 111,490 | $ 113,075 |
Services and other revenue - other | 270,223 | 270,423 |
Equipment revenue - DISH Network | 31 | 2,769 |
Equipment revenue - other | 48,374 | 42,859 |
Total revenue | 430,118 | 429,126 |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 130,899 | 124,577 |
Cost of sales - equipment (exclusive of depreciation and amortization) | 44,226 | 43,108 |
Selling, general and administrative expenses | 74,378 | 70,915 |
Research and development expenses | 7,705 | 6,932 |
Depreciation and amortization | 112,220 | 102,369 |
Total costs and expenses | 369,428 | 347,901 |
Operating income | 60,690 | 81,225 |
Other Income (Expense): | ||
Interest income | 5,841 | 1,914 |
Interest expense, net of amounts capitalized | (59,837) | (38,031) |
Gains (losses) on marketable investment securities, net | 91 | 215 |
Other-than-temporary impairment loss on available-for-sale securities | (3,298) | 0 |
Equity in earnings of unconsolidated affiliate | 1,711 | 1,859 |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 |
Other, net | 647 | 6,889 |
Total other expense, net | (54,845) | (27,154) |
Income before income taxes | 5,845 | 54,071 |
Income tax benefit (provision) | 3,582 | (20,041) |
Net income (loss) | 9,427 | 34,030 |
Less: Net income attributable to noncontrolling interests | 292 | 111 |
Net income attributable to HSS | 9,135 | 33,919 |
Comprehensive Income (Loss): | ||
Net income (loss) | 9,427 | 34,030 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 12,121 | 7,709 |
Unrealized losses on available-for-sale securities and other | (1,500) | (374) |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 3,298 | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Total other comprehensive income, net of tax | 13,919 | 7,335 |
Comprehensive income | 23,346 | 41,365 |
Less: Comprehensive income attributable to noncontrolling interests | 292 | 111 |
Comprehensive income attributable to HSS | 23,054 | 41,254 |
Eliminations | ||
Revenue: | ||
Services and other revenue - DISH Network | 0 | 0 |
Services and other revenue - other | (5,512) | (5,433) |
Equipment revenue - DISH Network | 0 | 0 |
Equipment revenue - other | (7,507) | (3,975) |
Total revenue | (13,019) | (9,408) |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | (5,355) | (5,145) |
Cost of sales - equipment (exclusive of depreciation and amortization) | (6,860) | (3,512) |
Selling, general and administrative expenses | (804) | (751) |
Research and development expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total costs and expenses | (13,019) | (9,408) |
Operating income | 0 | 0 |
Other Income (Expense): | ||
Interest income | (199) | (9) |
Interest expense, net of amounts capitalized | 199 | 9 |
Gains (losses) on marketable investment securities, net | 0 | 0 |
Other-than-temporary impairment loss on available-for-sale securities | ||
Equity in earnings of unconsolidated affiliate | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | (35,658) | (50,633) |
Other, net | 0 | 0 |
Total other expense, net | (35,658) | (50,633) |
Income before income taxes | (35,658) | (50,633) |
Income tax benefit (provision) | 0 | 0 |
Net income (loss) | (35,658) | (50,633) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | (35,658) | (50,633) |
Comprehensive Income (Loss): | ||
Net income (loss) | (35,658) | (50,633) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized losses on available-for-sale securities and other | 0 | 0 |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | (26,168) | (14,832) |
Total other comprehensive income, net of tax | (26,168) | (14,832) |
Comprehensive income | (61,826) | (65,465) |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | (61,826) | (65,465) |
HSS | ||
Revenue: | ||
Services and other revenue - DISH Network | 0 | 0 |
Services and other revenue - other | 0 | 0 |
Equipment revenue - DISH Network | 0 | 0 |
Equipment revenue - other | 0 | 0 |
Total revenue | 0 | 0 |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 0 | 0 |
Cost of sales - equipment (exclusive of depreciation and amortization) | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
Research and development expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total costs and expenses | 0 | 0 |
Operating income | 0 | 0 |
Other Income (Expense): | ||
Interest income | 5,490 | 1,229 |
Interest expense, net of amounts capitalized | (57,299) | (34,781) |
Gains (losses) on marketable investment securities, net | 0 | 0 |
Other-than-temporary impairment loss on available-for-sale securities | ||
Equity in earnings of unconsolidated affiliate | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 41,859 | 51,079 |
Other, net | 0 | 6,750 |
Total other expense, net | (9,950) | 24,277 |
Income before income taxes | (9,950) | 24,277 |
Income tax benefit (provision) | 19,085 | 9,642 |
Net income (loss) | 9,135 | 33,919 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | 9,135 | 33,919 |
Comprehensive Income (Loss): | ||
Net income (loss) | 9,135 | 33,919 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized losses on available-for-sale securities and other | (27) | 244 |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | 13,946 | 7,091 |
Total other comprehensive income, net of tax | 13,919 | 7,335 |
Comprehensive income | 23,054 | 41,254 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | 23,054 | 41,254 |
Guarantor Subsidiaries | ||
Revenue: | ||
Services and other revenue - DISH Network | 111,304 | 113,075 |
Services and other revenue - other | 241,372 | 246,078 |
Equipment revenue - DISH Network | 31 | 2,769 |
Equipment revenue - other | 51,204 | 43,897 |
Total revenue | 403,911 | 405,819 |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 106,544 | 108,448 |
Cost of sales - equipment (exclusive of depreciation and amortization) | 47,812 | 44,013 |
Selling, general and administrative expenses | 65,685 | 62,339 |
Research and development expenses | 7,705 | 6,932 |
Depreciation and amortization | 105,447 | 100,842 |
Total costs and expenses | 333,193 | 322,574 |
Operating income | 70,718 | 83,245 |
Other Income (Expense): | ||
Interest income | 202 | 45 |
Interest expense, net of amounts capitalized | (3,222) | (4,469) |
Gains (losses) on marketable investment securities, net | 91 | 215 |
Other-than-temporary impairment loss on available-for-sale securities | (3,298) | |
Equity in earnings of unconsolidated affiliate | 1,711 | 1,859 |
Equity in earnings (losses) of subsidiaries, net | (6,201) | (446) |
Other, net | (138) | (207) |
Total other expense, net | (10,855) | (3,003) |
Income before income taxes | 59,863 | 80,242 |
Income tax benefit (provision) | (17,856) | (29,074) |
Net income (loss) | 42,007 | 51,168 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | 42,007 | 51,168 |
Comprehensive Income (Loss): | ||
Net income (loss) | 42,007 | 51,168 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized losses on available-for-sale securities and other | (1,574) | (650) |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 3,298 | |
Equity in other comprehensive income (loss) of subsidiaries, net | 12,222 | 7,741 |
Total other comprehensive income, net of tax | 13,946 | 7,091 |
Comprehensive income | 55,953 | 58,259 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | 55,953 | 58,259 |
Non-Guarantor Subsidiaries | ||
Revenue: | ||
Services and other revenue - DISH Network | 186 | 0 |
Services and other revenue - other | 34,363 | 29,778 |
Equipment revenue - DISH Network | 0 | 0 |
Equipment revenue - other | 4,677 | 2,937 |
Total revenue | 39,226 | 32,715 |
Costs and Expenses: | ||
Cost of sales - services and other (exclusive of depreciation and amortization) | 29,710 | 21,274 |
Cost of sales - equipment (exclusive of depreciation and amortization) | 3,274 | 2,607 |
Selling, general and administrative expenses | 9,497 | 9,327 |
Research and development expenses | 0 | 0 |
Depreciation and amortization | 6,773 | 1,527 |
Total costs and expenses | 49,254 | 34,735 |
Operating income | (10,028) | (2,020) |
Other Income (Expense): | ||
Interest income | 348 | 649 |
Interest expense, net of amounts capitalized | 485 | 1,210 |
Gains (losses) on marketable investment securities, net | 0 | 0 |
Other-than-temporary impairment loss on available-for-sale securities | ||
Equity in earnings of unconsolidated affiliate | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 |
Other, net | 785 | 346 |
Total other expense, net | 1,618 | 2,205 |
Income before income taxes | (8,410) | 185 |
Income tax benefit (provision) | 2,353 | (609) |
Net income (loss) | (6,057) | (424) |
Less: Net income attributable to noncontrolling interests | 292 | 111 |
Net income attributable to HSS | (6,349) | (535) |
Comprehensive Income (Loss): | ||
Net income (loss) | (6,057) | (424) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 12,121 | 7,709 |
Unrealized losses on available-for-sale securities and other | 101 | 32 |
Recognition of other-than-temporary impairment loss on available-for-sale securities in net income | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Total other comprehensive income, net of tax | 12,222 | 7,741 |
Comprehensive income | 6,165 | 7,317 |
Less: Comprehensive income attributable to noncontrolling interests | 292 | 111 |
Comprehensive income attributable to HSS | $ 5,873 | $ 7,206 |
Supplemental Guarantor and No55
Supplemental Guarantor and Non-Guarantor Financial Information (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 9,427 | $ 34,030 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 82,650 | 132,698 |
Net cash flows from operating activities | 92,077 | 166,728 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | 0 | (134,572) |
Sales and maturities of marketable investment securities | 87,435 | 146,814 |
Expenditures for property and equipment | (74,175) | (128,957) |
Changes in restricted cash and cash equivalents | 4,268 | (662) |
Investment in subsidiary | 0 | 0 |
Payment for EchoStar XXI launch services | 0 | (11,875) |
Expenditures for externally marketed software | (10,832) | (5,959) |
Other, net | 0 | |
Net cash flows from investing activities | 6,696 | (135,211) |
Cash Flows from Financing Activities: | ||
Proceeds from capital contribution from parent | 0 | 0 |
Capital contribution from EchoStar | 0 | 11,875 |
Repayment of debt and capital lease obligations | (8,129) | (8,214) |
Advances from affiliates | 0 | 2,504 |
Other, net | (1,171) | 213 |
Net cash flows from financing activities | (9,300) | 6,378 |
Effect of exchange rates on cash and cash equivalents | 689 | 43 |
Net increase in cash and cash equivalents | 90,162 | 37,938 |
Cash and cash equivalents, beginning of period | 2,070,964 | 382,990 |
Cash and cash equivalents, end of period | 2,161,126 | 420,928 |
Eliminations | ||
Cash Flows from Operating Activities: | ||
Net income (loss) | (35,658) | (50,633) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 35,658 | 50,633 |
Net cash flows from operating activities | 0 | 0 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | 0 | |
Sales and maturities of marketable investment securities | 0 | 0 |
Expenditures for property and equipment | 0 | 0 |
Changes in restricted cash and cash equivalents | 0 | 0 |
Investment in subsidiary | 52,000 | 56,398 |
Payment for EchoStar XXI launch services | 0 | |
Expenditures for externally marketed software | 0 | 0 |
Other, net | (340) | |
Net cash flows from investing activities | 52,000 | 56,058 |
Cash Flows from Financing Activities: | ||
Proceeds from capital contribution from parent | (52,000) | (56,398) |
Capital contribution from EchoStar | 0 | |
Repayment of debt and capital lease obligations | 0 | 0 |
Advances from affiliates | 0 | |
Other, net | 0 | 340 |
Net cash flows from financing activities | (52,000) | (56,058) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 0 | 0 |
HSS | ||
Cash Flows from Operating Activities: | ||
Net income (loss) | 9,135 | 33,919 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 11,863 | 24,712 |
Net cash flows from operating activities | 20,998 | 58,631 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | (134,572) | |
Sales and maturities of marketable investment securities | 87,435 | 146,814 |
Expenditures for property and equipment | 0 | 0 |
Changes in restricted cash and cash equivalents | 4,312 | (618) |
Investment in subsidiary | (24,500) | (28,199) |
Payment for EchoStar XXI launch services | 0 | |
Expenditures for externally marketed software | 0 | 0 |
Other, net | 0 | |
Net cash flows from investing activities | 67,247 | (16,575) |
Cash Flows from Financing Activities: | ||
Proceeds from capital contribution from parent | 0 | 0 |
Capital contribution from EchoStar | 11,875 | |
Repayment of debt and capital lease obligations | 0 | 0 |
Advances from affiliates | 0 | |
Other, net | 600 | 0 |
Net cash flows from financing activities | 600 | 11,875 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | 88,845 | 53,931 |
Cash and cash equivalents, beginning of period | 1,991,949 | 300,634 |
Cash and cash equivalents, end of period | 2,080,794 | 354,565 |
Guarantor Subsidiaries | ||
Cash Flows from Operating Activities: | ||
Net income (loss) | 42,007 | 51,168 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 27,173 | 46,000 |
Net cash flows from operating activities | 69,180 | 97,168 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | 0 | |
Sales and maturities of marketable investment securities | 0 | 0 |
Expenditures for property and equipment | (53,634) | (88,958) |
Changes in restricted cash and cash equivalents | 0 | 0 |
Investment in subsidiary | (27,500) | (28,199) |
Payment for EchoStar XXI launch services | 0 | |
Expenditures for externally marketed software | (10,832) | (5,959) |
Other, net | 340 | |
Net cash flows from investing activities | (91,966) | (122,776) |
Cash Flows from Financing Activities: | ||
Proceeds from capital contribution from parent | 24,500 | 28,199 |
Capital contribution from EchoStar | 0 | |
Repayment of debt and capital lease obligations | (7,717) | (6,912) |
Advances from affiliates | 0 | |
Other, net | (1,853) | (869) |
Net cash flows from financing activities | 14,930 | 20,418 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | (7,856) | (5,190) |
Cash and cash equivalents, beginning of period | 53,905 | 55,767 |
Cash and cash equivalents, end of period | 46,049 | 50,577 |
Non-Guarantor Subsidiaries | ||
Cash Flows from Operating Activities: | ||
Net income (loss) | (6,057) | (424) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 7,956 | 11,353 |
Net cash flows from operating activities | 1,899 | 10,929 |
Cash Flows from Investing Activities: | ||
Purchases of marketable investment securities | 0 | |
Sales and maturities of marketable investment securities | 0 | 0 |
Expenditures for property and equipment | (20,541) | (39,999) |
Changes in restricted cash and cash equivalents | (44) | (44) |
Investment in subsidiary | 0 | 0 |
Payment for EchoStar XXI launch services | (11,875) | |
Expenditures for externally marketed software | 0 | 0 |
Other, net | 0 | |
Net cash flows from investing activities | (20,585) | (51,918) |
Cash Flows from Financing Activities: | ||
Proceeds from capital contribution from parent | 27,500 | 28,199 |
Capital contribution from EchoStar | 0 | |
Repayment of debt and capital lease obligations | (412) | (1,302) |
Advances from affiliates | 2,504 | |
Other, net | 82 | 742 |
Net cash flows from financing activities | 27,170 | 30,143 |
Effect of exchange rates on cash and cash equivalents | 689 | 43 |
Net increase in cash and cash equivalents | 9,173 | (10,803) |
Cash and cash equivalents, beginning of period | 25,110 | 26,589 |
Cash and cash equivalents, end of period | $ 34,283 | $ 15,786 |