Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Hughes Satellite Systems Corp | |
Entity Central Index Key | 0001533758 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
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 | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,138,711 | $ 847,823 |
Marketable investment securities, at fair value | 1,382,029 | 1,609,196 |
Trade accounts receivable and contract assets, net (Note 3) | 216,557 | 201,096 |
Trade accounts receivable - DISH Network | 18,598 | 13,550 |
Inventory | 76,114 | 75,379 |
Prepaids and deposits | 55,221 | 48,681 |
Advances to affiliates, net | 80,911 | 103,550 |
Other current assets | 19,051 | 18,539 |
Total current assets | 2,987,192 | 2,917,814 |
Noncurrent assets: | ||
Property and equipment, net | 2,516,137 | 2,582,181 |
Operating lease right-of-use assets | 112,974 | |
Regulatory authorizations | 465,658 | 465,658 |
Goodwill | 504,173 | 504,173 |
Other intangible assets, net | 40,294 | 43,952 |
Investments in unconsolidated entities | 125,384 | 126,369 |
Advances to affiliates | 19,957 | 0 |
Other noncurrent assets, net | 247,967 | 253,025 |
Total noncurrent assets | 4,032,544 | 3,975,358 |
Total assets | 7,019,736 | 6,893,172 |
Current liabilities: | ||
Trade accounts payable | 112,820 | 104,751 |
Trade accounts payable - DISH Network | 1,698 | 752 |
Current portion of long-term debt and finance lease obligations | 953,636 | 959,577 |
Advances from affiliates, net | 782 | 868 |
Contract liabilities | 90,180 | 72,249 |
Accrued interest | 54,664 | 46,703 |
Accrued compensation | 26,114 | 42,796 |
Accrued taxes | 8,228 | 7,609 |
Accrued expenses and other | 68,933 | 68,854 |
Total current liabilities | 1,317,055 | 1,304,159 |
Noncurrent liabilities: | ||
Long-term debt and finance lease obligations, net | 2,563,429 | 2,573,204 |
Deferred tax liabilities, net | 501,539 | 488,736 |
Operating lease liabilities | 95,073 | |
Advances from affiliates, net | 33,283 | 33,438 |
Other noncurrent liabilities | 98,870 | 101,140 |
Total noncurrent liabilities | 3,292,194 | 3,196,518 |
Total liabilities | 4,609,249 | 4,500,677 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding at each of March 31, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.01 par value; 1,000,000 shares authorized, 1,078 shares issued and outstanding at each of March 31, 2019 and December 31, 2018 | 0 | 0 |
Additional paid-in capital | 1,765,481 | 1,767,037 |
Accumulated other comprehensive loss | (82,611) | (83,774) |
Accumulated earnings | 716,183 | 693,957 |
Total HSS shareholders’ equity | 2,399,053 | 2,377,220 |
Noncontrolling interests | 11,434 | 15,275 |
Total shareholders’ equity | 2,410,487 | 2,392,495 |
Total liabilities and shareholders’ equity | $ 7,019,736 | $ 6,893,172 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
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 | 1,078 |
Common stock, shares outstanding (in shares) | 1,078 | 1,078 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Revenue | $ 532,425 | $ 502,895 |
Costs and expenses: | ||
Selling, general and administrative expenses | 102,358 | 94,650 |
Research and development expenses | 6,888 | 7,137 |
Depreciation and amortization | 143,530 | 133,718 |
Total costs and expenses | 450,086 | 422,231 |
Operating income | 82,339 | 80,664 |
Other income (expense): | ||
Interest income | 17,997 | 11,379 |
Interest expense, net of amounts capitalized | (64,413) | (64,413) |
Gains (losses) on investments, net | (346) | (392) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,072) | 1,492 |
Other, net | 45 | (613) |
Total other expense, net | (47,789) | (52,547) |
Income before income taxes | 34,550 | 28,117 |
Income tax provision | (11,518) | (7,736) |
Net income | 23,032 | 20,381 |
Less: Net income attributable to noncontrolling interests | 806 | 380 |
Net income attributable to HSS | 22,226 | 20,001 |
Comprehensive income: | ||
Net income | 23,032 | 20,381 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | (838) | 1,900 |
Unrealized gains (losses) on available-for-sale securities and other | 2,386 | (411) |
Realized gains on available-for-sale securities | (385) | 0 |
Other comprehensive income (loss) | 1,163 | 1,489 |
Comprehensive income | 24,195 | 21,870 |
Less: Comprehensive income attributable to noncontrolling interests | 806 | 166 |
Comprehensive income attributable to HSS | 23,389 | 21,704 |
Services | ||
Revenue: | ||
Revenue | 384,845 | 321,739 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 147,655 | |
Services and other revenue | ||
Revenue: | ||
Revenue | 398,340 | 359,334 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 152,303 | 147,655 |
Equipment | ||
Revenue: | ||
Revenue | 51,714 | 42,947 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 45,007 | 39,071 |
DISH Network | Services | ||
Revenue: | ||
Revenue | $ 82,371 | $ 100,614 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHARESHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Earnings | Noncontrolling Interests |
Beginning balance at Dec. 31, 2017 | $ 2,299,244 | $ 1,754,561 | $ (52,822) | $ 582,683 | $ 14,822 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,299 | 1,299 | |||
Capital contributions from EchoStar Corporation | 7,125 | 7,125 | |||
Other comprehensive income (loss) | 1,589 | 1,803 | (214) | ||
Net income | 20,381 | 20,001 | 380 | ||
Other | (158) | (58) | (100) | ||
Ending balance at Mar. 31, 2018 | 2,347,688 | 1,762,927 | (50,686) | 620,459 | 14,988 |
Beginning balance at Dec. 31, 2018 | 2,392,495 | 1,767,037 | (83,774) | 693,957 | 15,275 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,433 | 1,433 | |||
Other comprehensive income (loss) | 1,163 | 1,163 | |||
Noncontrolling interest repurchase | (7,313) | (2,666) | (4,647) | ||
Net income | 23,032 | 22,226 | 806 | ||
Other | (323) | (323) | |||
Ending balance at Mar. 31, 2019 | $ 2,410,487 | $ 1,765,481 | $ (82,611) | $ 716,183 | $ 11,434 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 23,032 | $ 20,381 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 143,530 | 133,718 |
Equity in (earnings) losses of unconsolidated affiliates, net | 1,072 | (1,492) |
Amortization of debt issuance costs | 2,010 | 1,936 |
(Gains) losses on investments, net | 346 | 395 |
Stock-based compensation | 1,433 | 1,299 |
Deferred tax provision | 9,936 | 6,813 |
Changes in current assets and current liabilities, net: | ||
Trade accounts receivable, net | (19,228) | 23,148 |
Advances to and from affiliates, net | 1,811 | 4,921 |
Trade accounts receivable - DISH Network | (5,048) | (14,957) |
Inventory | (1,036) | (2,297) |
Other current assets | (6,825) | (11,063) |
Trade accounts payable | 8,122 | (1,460) |
Trade accounts payable - DISH Network | 946 | (943) |
Accrued expenses and other | 3,535 | (7,600) |
Changes in noncurrent assets and noncurrent liabilities, net | 6,170 | (13,348) |
Other, net | 1,159 | 2,952 |
Net cash flows from operating activities | 170,965 | 142,403 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (240,188) | (358,543) |
Sales and maturities of marketable investment securities | 468,745 | 197,686 |
Expenditures for property and equipment | (73,929) | (87,777) |
Refunds and other receipts related to property and equipment | 0 | 77,524 |
Expenditures for externally marketed software | (7,600) | (7,148) |
Payment for satellite launch services | 0 | (7,125) |
Net cash flows from investing activities | 147,028 | (185,383) |
Cash flows from financing activities: | ||
Repurchase of debt | (8,046) | 0 |
Repayment of debt and finance lease obligations | (9,882) | (9,368) |
Noncontrolling interest purchase | (7,312) | 0 |
Capital contribution from EchoStar Corporation | 0 | 7,125 |
Repayment of in-orbit incentive obligations | (1,573) | (1,265) |
Net cash flows from financing activities | (26,813) | (3,508) |
Effect of exchange rates on cash and cash equivalents | (117) | (249) |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | 291,063 | (46,737) |
Cash and cash equivalents, including restricted amounts, beginning of period | 848,619 | 1,823,354 |
Cash and cash equivalents, including restricted amounts, end of period | 1,139,682 | 1,776,617 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 54,277 | 52,623 |
Cash paid for income taxes | $ 652 | $ 839 |
Leases - Lease Income Maturity
Leases - Lease Income Maturity $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 (remainder) | $ 232,901 |
2020 | 255,622 |
2021 | 227,246 |
2022 | 145,552 |
2023 | 35,506 |
After 2023 | 150,525 |
Total lease payments | $ 1,047,352 |
Organization and Business Activ
Organization and Business Activities | 3 Months Ended |
Mar. 31, 2019 | |
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 broadband satellite technologies, broadband internet services for home and small office customers, satellite operations and satellite services. We also deliver innovative network technologies, managed services and various communications solutions for aeronautical, enterprise and government customers. We primarily operate in the following two business segments: • Hughes — which provides broadband satellite technologies and broadband internet services to domestic and international home and small office customers and broadband network technologies, managed services, equipment, hardware, satellite services and communication solutions to domestic and international consumers and aeronautical, enterprise and government customers. The Hughes segment also designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, our Hughes segment designs, develops, constructs and provides telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and our enterprise customers. • EchoStar Satellite Services (“ESS”) — which uses certain of our owned and leased in-orbit satellites and related licenses to provide satellite operations and satellite services on a full-time and/or 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 EchoStar entered into in 2008 (“Dish Mexico”), United States (“U.S.”) government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, Real Estate, Accounting and Legal) and other activities that have not been assigned to our operating segments such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other in our segment reporting. During 2017, EchoStar and certain of its and our subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH Network Corporation (“DISH”) and certain of its subsidiaries. EchoStar, and certain of its and our subsidiaries, received all of the shares of the Hughes Retail Preferred Tracking Stock previously issued by EchoStar and us (together, the “Tracking Stock”) in exchange for 100% |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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. (“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 U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2018 . 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% 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. Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. Recently Adopted Accounting Pronouncements Leases We adopted ASU No. 2016-02- Leases (Topic 842) , as amended, or ASC 842, as of January 1, 2019. The primary impact of ASC 842 on our consolidated financial statements is the recognition of right-of-use assets and related liabilities on our consolidated balance sheet for operating leases where we are the lessee. We have elected to initially apply the requirements of the new standard on January 1, 2019 and we have not restated our consolidated financial statements for prior periods. Consequently, certain amounts reported in our Condensed Consolidated Balance Sheet as of March 31, 2019 are not comparable to those reported as of December 31, 2018 or earlier dates. Our adoption of ASC 842 did not have a material impact on the results of our operations or on our cash flows for the three months ended March 31, 2019. Under ASC 842, leases are classified either as operating leases or finance leases. The lease classification affects the recognition of lease expense by lessees in the statement of operations. Consistent with prior accounting standards, operating lease expense is included in operating expenses, while finance lease expense is split between depreciation expense and interest expense. ASC 842 does not fundamentally change the lessor accounting model, which requires leases to be classified as operating leases or sales-type leases. Operating lease revenue generally is recognized over the lease term, while sales-type lease revenue is recognized primarily upon lease commencement, except for amounts representing interest on related accounts receivable. Except for the new requirement to recognize assets and liabilities on the balance sheet for operating leases where we are the lessee, under our ASC 842 transition method we continue to apply prior accounting standards to leases that commenced prior to 2019. We fully apply ASC 842 requirements only to leases that commenced or were modified on or after January 1, 2019. We elected certain practical expedients under our transition method, including elections to not reassess (i) whether a contract is or contains a lease and (ii) the classification of existing leases. We also elected not to apply hindsight in determining whether optional renewal periods should be included in the lease term, which in some instances may impact the initial measurement of the lease liability and the calculation of straight-line expense over the lease term for operating leases. As a result of our transition elections, there was no change in our recognition of revenue and expense for leases that commenced prior to 2019. In addition, the application of ASC 842 requirements to new and modified leases did not materially affect our recognition of revenue or expenses for the three months ended March 31, 2019. Our adoption of ASC 842 resulted in the following adjustments to our Condensed Consolidated Balance Sheet as of December 31, 2018. As Reported December 31,2018 Adoption of ASC 842 Increase (Decrease) Balance January 1, 2019 (in thousands) Prepaids and deposits $ 48,681 $ (28 ) $ 48,653 Operating lease right-of-use assets $ — $ 117,006 $ 117,006 Other noncurrent assets, net $ 253,025 $ (7,272 ) $ 245,753 Total assets $ 6,893,172 $ 109,706 $ 7,002,878 Accrued expenses and other $ 68,854 $ 14,444 $ 83,298 Operating lease liabilities — $ 99,133 $ 99,133 Other noncurrent liabilities $ 101,140 $ (3,871 ) $ 97,269 Total liabilities $ 4,500,677 $ 109,706 $ 4,610,383 Total liabilities and shareholders’ equity $ 6,893,172 $ 109,706 $ 7,002,878 Our accounting policies under ASC 842 are summarized below. Additional disclosures required by the new standard are included in Note 4. Lessee Accounting We lease real estate, satellite capacity and equipment in the conduct of our business operations. For contracts entered into on or after January 1, 2019, we assess at contract inception whether the contract is, or contains a lease. Generally, we determine that a lease exists when (i) the contract involves the use of a distinct identified asset, (ii) we obtain the right to substantially all economic benefits from use of the asset and (iii) we have the right to direct the use of the asset. A lease is classified as a finance lease when one or more of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (v) the asset is of a specialized nature and there is not expected to an alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. At the lease commencement date, we recognize a right-of-use asset and a lease liability for all leases, except short-term leases with an original term of 12 months or less. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any prepayments to the lessor and initial direct costs such as brokerage commissions, less any lease incentives received. All right-of-use assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The lease liability is initially measured at the present value of the lease payments, discounted using an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The incremental borrowing rates used for the initial measurement of lease liabilities as of January 1, 2019 were based on the original lease terms . Lease payments included in the measurement of lease liabilities consist of (i) fixed lease payments for the noncancelable lease term, (ii) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (iii) variable lease payments that depend on an underlying index or rate, based on the index or rate in effect at lease commencement. Certain of our real estate lease agreements require payments for non-lease costs such as utilities and common area maintenance. We have elected an accounting policy, as permitted by ASC 842, not to account for such payments separately from the related lease payments. Our policy election results in a higher initial measurement of lease liabilities when such non-lease payments are fixed amounts. Certain of our real estate lease agreements require variable lease payments that do not depend on an underlying index or rate, such as sales and value-added taxes and our proportionate share of actual property taxes, insurance and utilities. Such payments and changes in payments based on a rate or index are recognized in operating expenses when incurred. Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense on the lease liability based on the discount rate at lease commencement. For both operating and finance leases, lease payments are allocated between a reduction of the lease liability and interest expense. Amortization of the right-of-use asset for operating leases reflects amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments. Lessor Accounting We lease satellite capacity, communications equipment and real estate to certain of our customers, including DISH Network. We identify and determine the classification of such leases as operating leases or sales-type leases based on the criteria discussed above for lessees. A lease is classified as a sales-type lease if it meets the above criteria for a finance lease; otherwise it is classified as an operating lease. Some of our leases are embedded in contracts with customers that include non-lease performance obligations. For such contracts, except where we have elected otherwise as discussed below, we allocate consideration in the contract between lease and non-lease components based on their relative standalone selling prices. We have elected an accounting policy, as permitted by ASC 842, to not separate the lease of equipment from related services in our HughesNet broadband internet service contracts with consumers. We account for all revenue from such contracts as non-lease service revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Our accounting for revenue from operating leases and sales-type leases was not substantially changed by our adoption of ASC 842. However, we anticipate that certain leases that would have been classified as operating leases under prior accounting standards may be classified as sales-type leases under ASC 842. Operating lease revenue generally is recognized on a straight-line basis over the lease term. Sales-type lease revenue and a corresponding receivable generally are recognized at lease commencement based on the present value of the future lease payments and related interest income on the receivable is recognized over the lease term. Payments under sales-type leases generally are discounted at the interest rate implicit in the lease. Recently Issued Accounting Pronouncements Not Yet Adopted Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments , which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses instead of incurred losses. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the impact of adopting this new accounting standard on our Consolidated Financial Statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Information About Contract Balances The following table provides information about our contract balances with customers, including amounts for certain embedded leases. As of March 31, 2019 December 31, 2018 (In thousands) Trade accounts receivable: Sales and services $ 164,310 $ 154,415 Leasing 7,775 7,990 Total 172,085 162,405 Contract assets 58,500 55,295 Allowance for doubtful accounts (14,028 ) (16,604 ) Total trade accounts receivable and contract assets, net $ 216,557 $ 201,096 Trade accounts receivable - DISH Network: Sales and services $ 17,252 $ 12,274 Leasing 1,346 1,276 Total trade accounts receivable - DISH Network, net $ 18,598 $ 13,550 Contract liabilities: Current $ 90,180 $ 72,249 Noncurrent 10,778 10,133 Total contract liabilities $ 100,958 $ 82,382 For the three months ended March 31, 2019 , we recognized revenue of $39 million that was previously included in the contract liability balance at December 31, 2018 . Our bad debt expense was $4 million and $5 million for the three months ended March 31, 2019 and 2018 , respectively. Transaction Price Allocated to Remaining Performance Obligations As of March 31, 2019 , the remaining performance obligations for our customer contracts with original expected durations of more than one year was $1.1 billion . We expect to recognize approximately 36% of our remaining performance obligations of these contracts as revenue in the next twelve months. This amount excludes agreements with consumer customers in our Hughes segment and our leasing arrangements. Disaggregation of Revenue In the following tables, revenue is disaggregated by segment, primary geographic market, nature of the products and services and transactions with major customers. See Note 4 for additional information about revenue associated with leases. Geographic Information The following table disaggregates revenue from customer contracts attributed to our North America (the U.S and its territories, Mexico and Canada), South and Central America and other foreign locations as well as by segment, based on the location where the goods or services are provided. All other revenue includes transactions with customers in Asia, Africa, Australia, Europe, and the Middle East. Hughes ESS Corporate and Other Consolidated Total (In thousands) For the three months ended March 31, 2019 North America $ 367,829 $ 81,084 $ 1,005 $ 449,918 South and Central America 26,863 — — 26,863 All other 50,645 175 4,824 55,644 Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 For the three months ended March 31, 2018 North America $ 336,020 $ 96,578 $ 1,206 $ 433,804 South and Central America 24,488 — — 24,488 All other 40,310 175 4,118 44,603 Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 Nature of Products and Services The following table disaggregates revenue based on the nature of products and services and by segment. Hughes ESS Corporate and Other Consolidated (In thousands) For the three months ended March 31, 2019 Equipment $ 25,960 $ — $ — $ 25,960 Services 380,783 3,740 322 384,845 Design, development and construction services 25,066 — — 25,066 Revenue from sales and services 431,809 3,740 322 435,871 Lease revenue 13,528 77,519 5,507 96,554 Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 For the three months ended March 31, 2018 Equipment $ 26,771 $ — $ — $ 26,771 Services 313,961 7,403 375 321,739 Design, development and construction services 16,176 — — 16,176 Revenue from sales and services 356,908 7,403 375 364,686 Lease revenue 43,910 89,350 4,949 138,209 Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Lessee Disclosures Our operating leases consist primarily of leases for office space, data centers and satellite ground facilities. We recognized right-of-use assets and lease liabilities for such leases in connection with our adoption of ASC 842 as of January 1, 2019 (see Note 2). We report operating lease right-of-use assets in Operating lease right-of-use assets and we report the current and noncurrent portions of our operating lease liabilities in Accrued expenses and other and Operating lease liabilities , respectively. Our finance leases consist primarily of leases of satellite capacity. We report finance lease right-of-use assets in Property and equipment, net and we report the current and noncurrent portions of our finance lease liabilities in Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations , respectively. Our consolidated balance sheet includes the following amounts for right-of-use assets and lease liabilities as of March 31, 2019 (in thousands): Right-of-use assets Operating $ 112,974 Finance 563,350 Total right-of-use assets $ 676,324 Lease liabilities Current Operating $ 14,444 Finance 41,651 Noncurrent Operating 95,073 Finance 177,294 Total lease liabilities $ 328,462 Finance lease assets are reported net of accumulated amortization of $490 million as of March 31, 2019. The following table details components of lease cost, weighted average lease terms and discount rates, and cash flows for operating leases and finance leases: For the three months ended March 31, 2019 (In thousands) Lease cost Operating lease cost $ 5,123 Finance lease cost Amortization of right-of-use assets 20,666 Interest on lease liabilities 6,018 Short-term lease cost 120 Variable lease cost 1,918 Total lease cost $ 33,845 As of March 31, 2019 (In thousands) Lease term and discount rate Weighted average remaining lease term (in years): Finance leases 4.82 Operating leases 10.54 Weighted average discount rate: Finance leases 10.75 % Operating leases 6.19 % For the three months ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,516 Operating cash flows from finance leases $ 6,018 Financing cash flows from finance leases $ 9,758 We obtained right-of-use assets in exchange for lease liabilities of $1 million upon commencement of operating leases for the three months ended March 31, 2019. The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows Year ending December 31, (In thousands) 2019 $ 17,587 2020 16,957 2021 13,400 2022 9,730 2023 8,427 Thereafter 21,886 Total $ 87,987 Lessor Disclosures We report revenue from sales-type leases at the commencement date in Equipment revenue and we report periodic interest income on sales-type lease receivables in Services and other revenue. We report operating lease revenue in Services and other revenue . The following table details our lease revenue for the three months ended March 31, 2019 (in thousands): Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $3 million as of March 31, 2019. The following table presents maturities of our operating lease payments as of March 31, 2019: Operating leases Year ending December 31, (In thousands) 2019 (remainder) $ 232,901 2020 255,622 2021 227,246 2022 145,552 2023 35,506 After 2023 150,525 Total lease payments $ 1,047,352 Property and equipment, net as of March 31, 2019 and Depreciation and amortization for the three months then ended included the following amounts for assets subject to operating leases: Accumulated Depreciation Cost depreciation expense (in thousands) Customer premises equipment $ 1,291,237 $ 925,721 $ 49,712 Satellites 1,552,245 847,160 32,601 Real estate 31,477 6,460 217 Total $ 2,874,959 $ 1,779,341 $ 82,530 |
LEASES | LEASES Lessee Disclosures Our operating leases consist primarily of leases for office space, data centers and satellite ground facilities. We recognized right-of-use assets and lease liabilities for such leases in connection with our adoption of ASC 842 as of January 1, 2019 (see Note 2). We report operating lease right-of-use assets in Operating lease right-of-use assets and we report the current and noncurrent portions of our operating lease liabilities in Accrued expenses and other and Operating lease liabilities , respectively. Our finance leases consist primarily of leases of satellite capacity. We report finance lease right-of-use assets in Property and equipment, net and we report the current and noncurrent portions of our finance lease liabilities in Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations , respectively. Our consolidated balance sheet includes the following amounts for right-of-use assets and lease liabilities as of March 31, 2019 (in thousands): Right-of-use assets Operating $ 112,974 Finance 563,350 Total right-of-use assets $ 676,324 Lease liabilities Current Operating $ 14,444 Finance 41,651 Noncurrent Operating 95,073 Finance 177,294 Total lease liabilities $ 328,462 Finance lease assets are reported net of accumulated amortization of $490 million as of March 31, 2019. The following table details components of lease cost, weighted average lease terms and discount rates, and cash flows for operating leases and finance leases: For the three months ended March 31, 2019 (In thousands) Lease cost Operating lease cost $ 5,123 Finance lease cost Amortization of right-of-use assets 20,666 Interest on lease liabilities 6,018 Short-term lease cost 120 Variable lease cost 1,918 Total lease cost $ 33,845 As of March 31, 2019 (In thousands) Lease term and discount rate Weighted average remaining lease term (in years): Finance leases 4.82 Operating leases 10.54 Weighted average discount rate: Finance leases 10.75 % Operating leases 6.19 % For the three months ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,516 Operating cash flows from finance leases $ 6,018 Financing cash flows from finance leases $ 9,758 We obtained right-of-use assets in exchange for lease liabilities of $1 million upon commencement of operating leases for the three months ended March 31, 2019. The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows Year ending December 31, (In thousands) 2019 $ 17,587 2020 16,957 2021 13,400 2022 9,730 2023 8,427 Thereafter 21,886 Total $ 87,987 Lessor Disclosures We report revenue from sales-type leases at the commencement date in Equipment revenue and we report periodic interest income on sales-type lease receivables in Services and other revenue. We report operating lease revenue in Services and other revenue . The following table details our lease revenue for the three months ended March 31, 2019 (in thousands): Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $3 million as of March 31, 2019. The following table presents maturities of our operating lease payments as of March 31, 2019: Operating leases Year ending December 31, (In thousands) 2019 (remainder) $ 232,901 2020 255,622 2021 227,246 2022 145,552 2023 35,506 After 2023 150,525 Total lease payments $ 1,047,352 Property and equipment, net as of March 31, 2019 and Depreciation and amortization for the three months then ended included the following amounts for assets subject to operating leases: Accumulated Depreciation Cost depreciation expense (in thousands) Customer premises equipment $ 1,291,237 $ 925,721 $ 49,712 Satellites 1,552,245 847,160 32,601 Real estate 31,477 6,460 217 Total $ 2,874,959 $ 1,779,341 $ 82,530 |
LEASES | LEASES Lessee Disclosures Our operating leases consist primarily of leases for office space, data centers and satellite ground facilities. We recognized right-of-use assets and lease liabilities for such leases in connection with our adoption of ASC 842 as of January 1, 2019 (see Note 2). We report operating lease right-of-use assets in Operating lease right-of-use assets and we report the current and noncurrent portions of our operating lease liabilities in Accrued expenses and other and Operating lease liabilities , respectively. Our finance leases consist primarily of leases of satellite capacity. We report finance lease right-of-use assets in Property and equipment, net and we report the current and noncurrent portions of our finance lease liabilities in Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations , respectively. Our consolidated balance sheet includes the following amounts for right-of-use assets and lease liabilities as of March 31, 2019 (in thousands): Right-of-use assets Operating $ 112,974 Finance 563,350 Total right-of-use assets $ 676,324 Lease liabilities Current Operating $ 14,444 Finance 41,651 Noncurrent Operating 95,073 Finance 177,294 Total lease liabilities $ 328,462 Finance lease assets are reported net of accumulated amortization of $490 million as of March 31, 2019. The following table details components of lease cost, weighted average lease terms and discount rates, and cash flows for operating leases and finance leases: For the three months ended March 31, 2019 (In thousands) Lease cost Operating lease cost $ 5,123 Finance lease cost Amortization of right-of-use assets 20,666 Interest on lease liabilities 6,018 Short-term lease cost 120 Variable lease cost 1,918 Total lease cost $ 33,845 As of March 31, 2019 (In thousands) Lease term and discount rate Weighted average remaining lease term (in years): Finance leases 4.82 Operating leases 10.54 Weighted average discount rate: Finance leases 10.75 % Operating leases 6.19 % For the three months ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,516 Operating cash flows from finance leases $ 6,018 Financing cash flows from finance leases $ 9,758 We obtained right-of-use assets in exchange for lease liabilities of $1 million upon commencement of operating leases for the three months ended March 31, 2019. The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows Year ending December 31, (In thousands) 2019 $ 17,587 2020 16,957 2021 13,400 2022 9,730 2023 8,427 Thereafter 21,886 Total $ 87,987 Lessor Disclosures We report revenue from sales-type leases at the commencement date in Equipment revenue and we report periodic interest income on sales-type lease receivables in Services and other revenue. We report operating lease revenue in Services and other revenue . The following table details our lease revenue for the three months ended March 31, 2019 (in thousands): Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $3 million as of March 31, 2019. The following table presents maturities of our operating lease payments as of March 31, 2019: Operating leases Year ending December 31, (In thousands) 2019 (remainder) $ 232,901 2020 255,622 2021 227,246 2022 145,552 2023 35,506 After 2023 150,525 Total lease payments $ 1,047,352 Property and equipment, net as of March 31, 2019 and Depreciation and amortization for the three months then ended included the following amounts for assets subject to operating leases: Accumulated Depreciation Cost depreciation expense (in thousands) Customer premises equipment $ 1,291,237 $ 925,721 $ 49,712 Satellites 1,552,245 847,160 32,601 Real estate 31,477 6,460 217 Total $ 2,874,959 $ 1,779,341 $ 82,530 |
LEASES | LEASES Lessee Disclosures Our operating leases consist primarily of leases for office space, data centers and satellite ground facilities. We recognized right-of-use assets and lease liabilities for such leases in connection with our adoption of ASC 842 as of January 1, 2019 (see Note 2). We report operating lease right-of-use assets in Operating lease right-of-use assets and we report the current and noncurrent portions of our operating lease liabilities in Accrued expenses and other and Operating lease liabilities , respectively. Our finance leases consist primarily of leases of satellite capacity. We report finance lease right-of-use assets in Property and equipment, net and we report the current and noncurrent portions of our finance lease liabilities in Current portion of long-term debt and finance lease obligations and Long-term debt and finance lease obligations , respectively. Our consolidated balance sheet includes the following amounts for right-of-use assets and lease liabilities as of March 31, 2019 (in thousands): Right-of-use assets Operating $ 112,974 Finance 563,350 Total right-of-use assets $ 676,324 Lease liabilities Current Operating $ 14,444 Finance 41,651 Noncurrent Operating 95,073 Finance 177,294 Total lease liabilities $ 328,462 Finance lease assets are reported net of accumulated amortization of $490 million as of March 31, 2019. The following table details components of lease cost, weighted average lease terms and discount rates, and cash flows for operating leases and finance leases: For the three months ended March 31, 2019 (In thousands) Lease cost Operating lease cost $ 5,123 Finance lease cost Amortization of right-of-use assets 20,666 Interest on lease liabilities 6,018 Short-term lease cost 120 Variable lease cost 1,918 Total lease cost $ 33,845 As of March 31, 2019 (In thousands) Lease term and discount rate Weighted average remaining lease term (in years): Finance leases 4.82 Operating leases 10.54 Weighted average discount rate: Finance leases 10.75 % Operating leases 6.19 % For the three months ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,516 Operating cash flows from finance leases $ 6,018 Financing cash flows from finance leases $ 9,758 We obtained right-of-use assets in exchange for lease liabilities of $1 million upon commencement of operating leases for the three months ended March 31, 2019. The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows Year ending December 31, (In thousands) 2019 $ 17,587 2020 16,957 2021 13,400 2022 9,730 2023 8,427 Thereafter 21,886 Total $ 87,987 Lessor Disclosures We report revenue from sales-type leases at the commencement date in Equipment revenue and we report periodic interest income on sales-type lease receivables in Services and other revenue. We report operating lease revenue in Services and other revenue . The following table details our lease revenue for the three months ended March 31, 2019 (in thousands): Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 Substantially all of our net investment in sales-type leases consisted of lease receivables totaling $3 million as of March 31, 2019. The following table presents maturities of our operating lease payments as of March 31, 2019: Operating leases Year ending December 31, (In thousands) 2019 (remainder) $ 232,901 2020 255,622 2021 227,246 2022 145,552 2023 35,506 After 2023 150,525 Total lease payments $ 1,047,352 Property and equipment, net as of March 31, 2019 and Depreciation and amortization for the three months then ended included the following amounts for assets subject to operating leases: Accumulated Depreciation Cost depreciation expense (in thousands) Customer premises equipment $ 1,291,237 $ 925,721 $ 49,712 Satellites 1,552,245 847,160 32,601 Real estate 31,477 6,460 217 Total $ 2,874,959 $ 1,779,341 $ 82,530 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) and Related Tax Effects | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
OTHER COMPREHENSIVE INCOME (LOSS) AND RELATED TAX EFFECTS | OTHER COMPREHENSIVE INCOME (LOSS) AND RELATED TAX EFFECTS The changes in the balances of Accumulated other comprehensive loss by component were as follows: Cumulative Foreign Currency Translation Losses Unrealized Gain (Loss) On Available-For-Sale Securities Other Accumulated Other Comprehensive Loss (In thousands) Balance, December 31, 2017 $ (52,251 ) $ (648 ) $ 77 $ (52,822 ) Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 — 433 — 433 Balance, January 1, 2018 (52,251 ) (215 ) 77 (52,389 ) Other comprehensive income (loss) before reclassifications 2,114 (311 ) (100 ) 1,703 Other comprehensive income (loss) 2,114 (311 ) (100 ) 1,703 Balance, March 31, 2018 $ (50,137 ) $ (526 ) $ (23 ) $ (50,686 ) Balance, December 31, 2018 $ (82,800 ) $ (1,092 ) $ 118 $ (83,774 ) Other comprehensive income (loss) before reclassifications (838 ) 2,353 33 1,548 Amounts reclassified to net income — (385 ) — (385 ) Other comprehensive income (loss) (838 ) 1,968 33 1,163 Balance, March 31, 2019 $ (83,638 ) $ 876 $ 151 $ (82,611 ) The amounts reclassified to net income related to unrealized gain (loss) on available-for-sale securities in the table above are included in Gains (losses) on investments, net in our Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss). |
Marketable Investment Securitie
Marketable Investment Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE INVESTMENT SECURITIES | MARKETABLE INVESTMENT SECURITIES Overview Our marketable investment securities portfolio consists of various debt and equity instruments as follows: As of March 31, 2019 December 31, 2018 (In thousands) Marketable investment securities: Debt securities: Corporate bonds $ 1,047,428 $ 1,234,017 Other debt securities 334,259 374,106 Total debt securities 1,381,687 1,608,123 Equity securities 342 1,073 Total marketable investment securities $ 1,382,029 $ 1,609,196 Debt Securities Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Our other debt securities portfolio includes investments in various debt instruments, including U.S. government bonds and commercial paper. A summary of our available-for-sale debt securities is presented in the table below. Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of March 31, 2019 Corporate bonds $ 1,046,539 $ 966 $ (77 ) $ 1,047,428 Other debt securities 334,272 2 (15 ) 334,259 Total available-for-sale debt securities $ 1,380,811 $ 968 $ (92 ) $ 1,381,687 As of December 31, 2018 Corporate bonds $ 1,235,110 $ 230 $ (1,323 ) $ 1,234,017 Other debt securities 374,106 — — 374,106 Total available-for-sale debt securities $ 1,609,216 $ 230 $ (1,323 ) $ 1,608,123 As of March 31, 2019 , we have $1.2 billion of available-for-sale debt securities with contractual maturities of one year or less and $144 million with contractual maturities greater than one year. Equity Securities Our marketable equity securities consist primarily of shares of common stock of public companies. For the three months ended March 31, 2019 and 2018, Gains (losses) on investments, net included net loss of $0.7 million and $0.4 million , respectively, related to equity securities that we held during each period. Sales of Available-for-Sale Securities Proceeds from sales of our available-for-sale securities totaled $312 million for the three months ended March 31, 2019. We recognized $0.4 million gains from the sales of our available-for-sale portfolio for the three months ended March 31, 2019 . Proceeds from sales of our available-for-sale securities was zero for the three months ended March 31, 2018 . We recognized zero gains and losses from the sales of our available-for-sale securities for the three months ended March 31, 2018 . Fair Value Measurements Our marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of March 31, 2019 and December 31, 2018 , we did not have investments that were categorized within Level 3 of the fair value hierarchy. As of March 31, 2019 December 31, 2018 Level 1 Level 2 Total Level 1 Level 2 Total (In thousands) Debt securities: Corporate bonds $ — $ 1,047,428 $ 1,047,428 $ — $ 1,234,017 $ 1,234,017 Other — 334,259 334,259 — 374,106 374,106 Total debt securities — 1,381,687 1,381,687 — 1,608,123 1,608,123 Equity securities 342 — 342 1,073 — 1,073 Total marketable investment securities $ 342 $ 1,381,687 $ 1,382,029 $ 1,073 $ 1,608,123 $ 1,609,196 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2019 | |
Inventory, Net [Abstract] | |
INVENTORY | INVENTORY Our inventory consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Raw materials $ 6,473 $ 4,856 Work-in-process 12,093 13,901 Finished goods 57,548 56,622 Total inventory $ 76,114 $ 75,379 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 December 31, 2018 (In thousands) Land — $ 13,375 $ 13,401 Buildings and improvements 1 to 40 117,270 117,564 Furniture, fixtures, equipment and other 1 to 12 754,902 741,429 Customer premises equipment 2 to 4 1,210,850 1,159,977 Satellites - owned 2 to 15 2,268,862 2,268,862 Satellites - acquired under finance leases 10 to 15 1,050,360 1,051,110 Construction in progress — 30,013 28,087 Total property and equipment 5,445,632 5,380,430 Accumulated depreciation (2,929,495 ) (2,798,249 ) Property and equipment, net $ 2,516,137 $ 2,582,181 Construction in progress consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Progress amounts for satellite construction $ 393 $ 246 Satellite related equipment 15,639 13,001 Other 13,981 14,840 Construction in progress $ 30,013 $ 28,087 We recorded capitalized interest related to our satellites, satellite payloads and related ground facilities under construction of $0.1 million and $2 million for the three months March 31, 2019 and 2018, respectively. Depreciation expense associated with our property and equipment consisted of the following: For the three months 2019 2018 (In thousands) Buildings and improvements $ 3,110 $ 1,298 Furniture, fixtures, equipment and other 20,354 20,774 Customer premises equipment 46,192 43,448 Satellites 64,362 59,033 Total depreciation expense $ 134,018 $ 124,553 Satellites depreciation expense includes amortization of satellites under finance lease agreements of $21 million and $18 million for the three months ended March 31, 2019 and 2018, respectively. Satellites As of March 31, 2019 , our satellite fleet consisted of 15 satellites, 10 of which are owned and five of which are leased. They are all 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. We depreciate our leased satellites on a straight-line basis over their respective lease terms. Satellite Anomalies and Impairments Our satellites may experience anomalies from time to time, some of which may have a significant adverse effect on their remaining useful lives, the commercial operation of the satellites or our operating results or financial position. We are not aware of any anomalies with respect to our owned or leased satellites that have had any such significant adverse effect during the three months ended March 31, 2019 . There can be no assurance, however, that anomalies will not have any such adverse effects 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 satellites were to fail. We historically have not carried in-orbit insurance on our satellites because we have assessed that the cost of insurance is not economical relative to the risk of failures. Therefore, we generally bear the risk of any in-orbit failures. Pursuant to the terms of the agreements governing certain portions of our indebtedness, we are required, subject to certain limitations on coverage, to maintain in-orbit insurance for our SPACEWAY 3, EchoStar XVI and EchoStar XVII satellites. Our other satellites, either in orbit or under construction, are not covered by launch or in-orbit insurance. We will continue to assess circumstances going forward and make insurance decisions on a case-by-case basis. We evaluate our satellites for impairment and test for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Certain of the anomalies previously disclosed may be considered to represent a significant adverse change in the physical condition of a particular satellite. However, based on the redundancy designed within each satellite, certain of these anomalies are not necessarily considered to be significant events that would require a test of recoverability. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 and December 31, 2018 , all of our goodwill was assigned to reporting units of our Hughes segment. We test this goodwill for impairment annually in the second quarter. Based on our impairment testing in the second quarter of 2018, our goodwill is considered to be not impaired. Other Intangible Assets As of March 31, 2019 and December 31, 2018 , accumulated amortization for our other intangible assets was $311 million and $307 million |
Investment in Unconsolidated En
Investment in Unconsolidated Entities | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED ENTITIES | INVESTMENTS IN UNCONSOLIDATED ENTITIES We have strategic investments in certain non-publicly traded equity securities that do not have a readily determinable fair value. We measure our equity securities without a readily determinable fair value, other than those accounted for using the equity method, at cost adjusted for changes resulting from impairments, if any, and observable price changes in orderly transactions for the identical or similar securities of the same issuer. For the three months ended March 31, 2019 and 2018, we did not identify any observable price changes requiring an adjustment to our investments. Our investments in unconsolidated entities consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Investments in unconsolidated entities: Equity method $ 109,946 $ 110,931 Other equity investments without a readily determinable fair value 15,438 15,438 Total investments in unconsolidated entities $ 125,384 $ 126,369 |
Long-Term Debt and Finance Leas
Long-Term Debt and Finance Lease Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Debt and Capital Lease Obligations [Abstract] | |
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS | LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS The following table summarizes the carrying amounts and fair values of our long-term debt and finance lease obligations. Effective Interest Rate As of March 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) Senior Secured Notes: 6 1/2% Senior Secured Notes due 2019 6.959% $ 912,857 $ 919,119 $ 920,836 $ 932,696 5 1/4% Senior Secured Notes due 2026 5.320% 750,000 749,903 750,000 695,865 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 969,417 900,000 934,902 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 741,368 750,000 696,353 Less: Unamortized debt issuance costs (14,737 ) — (16,757 ) — Subtotal 3,298,120 $ 3,379,807 3,304,079 $ 3,259,816 Finance lease obligations 218,945 228,702 Total debt and finance lease obligations 3,517,065 3,532,781 Less: Current portion (953,636 ) (959,577 ) Long-term debt and finance lease obligations, net $ 2,563,429 $ 2,573,204 During the three months ended March 31, 2019, we repurchased $8 million |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Provision For Income Taxes Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, 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 interim income tax provision and our interim estimate of our annual effective tax rate are influenced by several factors, including foreign losses and capital gains and losses for which related deferred tax assets are offset by a valuation allowance, changes in tax laws and relative changes in unrecognized tax benefits. Additionally, our effective tax rate can be affected by the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income or loss is lower. Our income tax provision was $12 million for the three months ended March 31, 2019 compared to an income tax provision of $8 million for the three months ended March 31, 2018 . Our estimated effective income tax rate was 33.3% and 27.5% for the three months ended March 31, 2019 and 2018, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2019 were primarily due to various permanent tax differences, the impact of state and local taxes, and increase in our valuation allowance associated with certain foreign losses. For the three months ended March 31, 2018, the variations in our effective tax rate from the U.S. federal statutory rate were primarily due to various permanent tax differences, the impact of state and local taxes, and the increase in our valuation allowance associated with certain foreign losses |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments As of March 31, 2019 and December 31, 2018 , our satellite-related obligations were $472 million and $482 million, respectively. Our satellite-related obligations primarily include payments pursuant to regulatory authorizations; non-lease costs associated with our finance lease satellites and in-orbit incentives relating to certain satellites; as well as commitments for satellite service arrangements. Contingencies Patents and Intellectual Property Many entities, including some of our competitors, have or may have in the future patents and other intellectual property rights that cover or affect products or services directly or indirectly related to those that we offer. We may not be aware of all patents and other intellectual property rights that our products and services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain circumstances can be tripled. Further, we cannot estimate the extent to which we may be required in the future to obtain licenses with respect to intellectual property rights held by others and the availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights with respect to our products and services. We cannot be certain that these parties do not own the rights they claim, that these rights are not valid or that our products and services do not infringe on these rights. Further, we cannot be certain that we would be able to obtain licenses from these parties on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign our products and services to avoid infringement. Separation Agreement and Share Exchange In connection with EchoStar’s spin-off from DISH in 2008 (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 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 concerning matters arising in connection with the conduct of our business activities. Many of these proceedings are at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable and to determine if accruals are appropriate. We record an accrual for litigation and other loss contingencies when we determine that a loss is probable and the amount of the loss can be reasonably estimated. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. There can be no assurance that legal proceedings against us will be resolved in amounts that will not differ from the amounts of our recorded accruals. Legal fees and other costs of defending litigation are charged to expense as incurred. For certain cases, management is unable to predict with any degree of certainty the outcome or provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii) damages have not been sought or specified; (iii) damages are unsupported, indeterminate and/or exaggerated in management’s opinion; (iv) there is uncertainty as to the outcome of pending trials, appeals 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). Except as described below, however, management does not believe, based on currently available information, that the outcomes of these proceedings will have a material effect on our financial condition, operating results or cash flows, though there is no assurance that the resolution and outcomes of these proceedings, individually or in the aggregate, will not be material to our financial condition, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. We intend to vigorously defend the proceedings against us. In the event that a court or jury ultimately rules against us, we may be subject to adverse consequences, including, without limitation, substantial damages, which may include treble damages, fines, penalties, compensatory damages and/or other equitable or injunctive relief that could require us to materially modify our business operations or certain products or services that we offer to our consumers. 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 U.S. District Court for the Eastern District of Texas, alleging infringement of U.S. 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 (“USPTO”) challenging the validity of the patents in suit, which the USPTO subsequently declined to institute. On April 13, 2016, the defendants answered Elbit’s complaint. At Elbit’s request, on June 26, 2017, the court dismissed Elbit’s claims of infringement against all parties other than HNS. Trial commenced on July 31, 2017. On August 7, 2017, the jury returned a verdict that the 073 patent was valid and infringed, and awarded Elbit $21 million. The jury also found that such infringement of the 073 patent was not willful and that the 874 patent was not infringed. On March 30, 2018, the court ruled on post-trial motions, upholding the jury’s findings and awarding Elbit attorneys’ fees in an amount that has not yet been specified. As a result of pre-judgment interest, costs and unit sales through the 073 patent’s expiration in November 2017, the jury verdict would result in a payment of $29 million plus post-judgment interest if not overturned or modified on appeal. Elbit has requested an award of $14 million of attorneys’ fees. HNS is contesting Elbit’s claims as inappropriate and unreasonable in light of the court’s decision and prevailing law. On April 27, 2018, HNS filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. The parties have briefed the appeal and oral arguments will be held on May 8, 2019. We cannot predict with certainty the outcome of the appeal. As of each of March 31, 2019 and December 31, 2018, we have recorded an accrual of $3 million with respect to this liability. Any eventual payments made with respect to the ultimate outcome of this matter may be different from our accruals and such differences could be significant. Realtime Data LLC On May 8, 2015, Realtime Data LLC (“Realtime”) filed suit against EchoStar Corporation and our subsidiary HNS in the U.S. District Court for the Eastern District of Texas alleging infringement of U.S. Patent Nos. 7,378,992 (the “992 patent”), entitled “Content Independent Data Compression Method and System;” 7,415,530 (the “530 patent”), entitled “System and Methods for Accelerated Data Storage and Retrieval,” and 8,643,513 (the “513 patent”), entitled “Data Compression System and Methods.” On September 14, 2015, Realtime amended its complaint, additionally alleging infringement of U.S. Patent No. 9,116,908 (the “908 patent”), entitled “System and Methods for Accelerated Data Storage and Retrieval.” 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 U.S. Patents, Nos. 7,358,867 (the “867 patent”), entitled “Content Independent Data Compression Method and System;” 8,502,707 (the “707 patent”), entitled “Data Compression Systems and Methods;” 8,717,204 (the “204 patent”), entitled “Methods for Encoding and Decoding Data;” and 9,054,728 (the “728 patent”), entitled “Data Compression System and Methods.” On February 13, 2018, we filed petitions before the USPTO challenging the validity of all claims asserted against us from the 707 patent, as well as one of the asserted claims of the 728 patent. On September 5, 2018, the USPTO declined to institute proceedings for the petition that we had filed against the 728 patent. On September 12, 2018, the USPTO instituted proceedings to review the validity of the asserted claims of the 707 patent. In a stipulation filed on October 24, 2018, Realtime voluntarily elected not to pursue any previously asserted claims from the 992, 530, 513, 908, 867 and 204 patents. Realtime is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. In February 2019, we entered into a settlement agreement with Realtime and the case was dismissed with prejudice. Other In addition to the above actions, we are subject to various other legal proceedings and claims, which arise in the ordinary course of business. As part of our ongoing operations, we are subject to various inspections, audits, inquiries, investigations and similar actions by third parties, as well as by governmental/regulatory authorities responsible for enforcing the laws and regulations to which we may be subject. Further, under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the federal government. Some states have adopted similar state whistleblower and false claims provisions. In addition, we from time to time receive inquiries from federal, state and foreign agencies regarding compliance with various laws and regulations. In our opinion, the amount of ultimate liability with respect to any of these other actions is unlikely to materially affect our financial position, results of operations or cash flows, though the resolutions and outcomes, individually or in the aggregate, could be material to our financial position, operating results or cash flows for any particular period, depending, in part, upon the operating results for such period. We also indemnify our directors, officers and employees for certain liabilities that might arise from the performance of their responsibilities for us. Additionally, in the normal course of its business, we enter into contracts pursuant to which we may make a variety of representations and warranties and indemnify the counterparty for certain losses. Our 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 us or our 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, 2019 | |
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 our chief operating decision maker (“CODM”), who is our Chief Executive Officer. We primarily operate in two business segments, Hughes and ESS, as described in Note 1. The primary measure of segment profitability that is reported regularly to our CODM is earnings before interest, taxes, depreciation and amortization, or EBITDA. Our operations also include various corporate departments (primarily Executive, Treasury, Strategic Development, Human Resources, IT, Finance, Real Estate, Accounting and Legal) and other activities that have not been assigned to our operating segments such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of our investments. These activities, costs and income, as well as eliminations of intersegment transactions, are accounted for in Corporate and Other in the tables below or in the reconciliation of EBITDA below. 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 ESS Corporate and Other Consolidated Total (In thousands) For the three months ended March 31, 2019 External revenue $ 445,337 $ 80,553 $ 6,535 $ 532,425 Intersegment revenue — 706 (706 ) — Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 EBITDA $ 161,132 $ 68,717 $ (6,159 ) $ 223,690 Capital expenditures $ 73,821 $ 108 $ — $ 73,929 For the three months ended March 31, 2018 External revenue $ 400,459 $ 96,223 $ 6,213 $ 502,895 Intersegment revenue 359 530 (889 ) — Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 EBITDA $ 136,713 $ 84,150 $ (6,374 ) $ 214,489 Capital expenditures $ 87,291 $ (77,038 ) $ — $ 10,253 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, 2019 2018 (In thousands) EBITDA $ 223,690 $ 214,489 Interest income and expense, net (46,416 ) (53,034 ) Depreciation and amortization (143,530 ) (133,718 ) Net income attributable to noncontrolling interests 806 380 Income before income taxes $ 34,550 $ 28,117 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS EchoStar We and EchoStar, including EchoStar’s other subsidiaries, have agreed that we shall each have the right, but not the obligation, to receive from the other certain shared corporate services, including among other things: treasury, tax, accounting and reporting, risk management, cybersecurity, legal, internal audit, human resources, and information technology. These shared corporate services are generally provided at cost. Effective March 2017, and as a result of the Share Exchange, we implemented a new methodology for determining the cost of these shared corporate services. We and EchoStar, including EchoStar’s other subsidiaries, may each terminate a particular shared corporate service for any reason upon at least 30 days ’ notice. We recorded net expenses for shared corporate services received from EchoStar and its other subsidiaries of $3 million and $4 million for the three months ended March 31, 2019 and 2018 , respectively. We also reimburse EchoStar and its other subsidiaries from time to time for amounts paid by EchoStar and its other subsidiaries for costs and expenses attributable to us, and EchoStar and its other subsidiaries similarly reimburse us from time to time for amounts paid by us for costs and expenses attributable to EchoStar and its other subsidiaries. We report net payments under these arrangements in Advances to affiliates, net within current assets and we report net receipts under these arrangements in Advances from affiliates, net within current liabilities in our Condensed Consolidated Balance Sheets. No repayment schedule for these net advances has been determined. In addition, we occupy certain office space in buildings owned or leased by EchoStar and its other subsidiaries and pay a portion of the taxes, insurance, utilities and maintenance of the premises in accordance with the percentage of the space we occupy. EchoStar and certain of its other subsidiaries have also provided cash advances to certain of our foreign subsidiaries to fund certain expenditures pursuant to loan agreements that mature in 2021 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, net 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 $349 million increase in Additional paid-in capital , reflecting EchoStar’s $514 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 $165 million . EchoStar XXI and EchoStar XXIII Launch Facilitation and Operational Control Agreements. As part of applying for launch licenses for the EchoStar XXI and XXIII satellites through the UK Space Agency, we and a subsidiary of EchoStar, EchoStar Operating L.L.C. (“EOC”), entered into agreements in June 2015 and March 2016 to transfer to us EOC’s launch service contracts for the EchoStar XXI and EchoStar XXIII satellites, respectively, and to grant us certain rights to control the in-orbit operations of these satellites. EOC retained ownership of the satellites and agreed to make additional payments to us for amounts that we are required to pay under both launch service contracts. In 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 EOC’s funding of additional cash payments to the launch service provider. The EchoStar XXIII and the EchoStar XXI satellites were successfully launched in March 2017 and June 2017, respectively. We recorded decreases in Other noncurrent assets, net and Additional paid-in capital of $62 million and $83 million , respectively, representing the carrying amounts of the launch service contracts at the time of launch to reflect the consumption of the contracts’ economic benefits by EOC, the owner of the satellites. 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 DISH and certain of its subsidiaries. As part of these steps, subsidiaries of EchoStar that, prior to the consummation of the Share Exchange, owned EchoStar’s business of providing online video delivery and satellite video delivery for broadcasters and pay-TV operators, including satellite uplinking/downlinking, transmission services, signal processing, conditional access management and other services 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 us and are pledged as collateral to support our obligations under the indentures relating to our 6 1/2% Senior Secured Notes due 2019 and 5 1/4% Senior Secured Notes due August 1, 2026 (the “Secured Notes”). EchoStar Mobile Limited Service Agreements. We provide services and lease equipment to support the business of EchoStar Mobile Limited, a subsidiary of EchoStar that is licensed by the European Union and its member states (“EU”) to provide mobile satellite services and complementary ground component services covering the entire EU using S-band spectrum. Generally, the amounts EchoStar’s subsidiaries pay for these services are based on cost plus a fixed margin. We have converted the receivables for certain of these services into loans, bearing an annual interest rate of 5% , that mature in 2023. We recorded revenue in Services and other revenue - other of $5 million and $4 million for the three months ended March 31, 2019 and 2018 , respectively, related to these services. DBS Transponder Lease . EchoStar leases satellite capacity from us on eight DBS transponders on the QuetzSat-1 satellite through November 2021, after which EchoStar has certain options to renew the agreement on a year-to year basis through the end of life of the QuetzSat-1 satellite. We recorded revenue in connection with this agreement of approximately $6 million for each of the three months ended March 31, 2019 and 2018 . As of each of March 31, 2019 and December 31, 2018 , we had related trade accounts receivable of approximately $6 million . Construction Management Services for EchoStar XXIV satellite . In August 2017, a subsidiary of EchoStar entered into a contract with Space Systems Loral, LLC for the design and construction of the EchoStar XXIV satellite, a new, next-generation, high throughput geostationary satellite, with a planned 2021 launch. We provide construction management services to EchoStar’s subsidiary for the construction of the EchoStar XXIV satellite. We charged EchoStar and reduced our operating expenses by the costs of such services of $0.4 million and $0.3 million for the three months ended March 31, 2019 and 2018 , respectively. DISH Network Following the Spin-off, EchoStar and DISH have operated as separate publicly-traded companies. In addition, prior to the consummation of the Share Exchange in February 2017, DISH Network owned the Tracking Stock, which represented 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. A substantial majority of the voting power of the shares of each of EchoStar and DISH is owned beneficially by Charles W. Ergen, our Chairman, and by certain entities established by Mr. Ergen for the benefit of his family. In connection with and following both the Spin-off and the Share Exchange, EchoStar, we and certain other of EchoStar’s subsidiaries and DISH and certain of its subsidiaries entered into certain agreements pursuant to which we and EchoStar and its other subsidiaries obtain certain products, services and rights from DISH Network; DISH Network obtains certain products, services and rights from us and EchoStar and its other subsidiaries; and such entities indemnify each other against certain liabilities arising from the respective businesses. We and/or EchoStar also may enter into additional agreements with DISH Network in the future. Generally, the amounts we and/or EchoStar or DISH Network pay for products and services provided under the agreements are based on cost plus a fixed margin (unless noted differently below), which varies depending on the nature of the products and services provided. 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 Capacity Leased to DISH Network. We have entered into certain agreements to lease satellite capacity pursuant to which we provide satellite services to DISH Network on certain satellites owned or leased by us. The fees for the services provided under these 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 . In March 2014, we began leasing certain satellite capacity to DISH Network on the EchoStar VII, EchoStar X, EchoStar XI and EchoStar XIV satellites. These agreements to lease satellite capacity generally terminate 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 agreement to lease satellite capacity 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. The agreement to lease satellite capacity on the EchoStar VII satellite expired at the end of June 2018. EchoStar IX . Effective January 2008, DISH Network began leasing satellite capacity from us on the EchoStar IX satellite. Subject to availability, DISH Network generally has the right to continue leasing satellite capacity from us on the EchoStar IX satellite on a month-to-month basis. EchoStar XII . DISH Network leased satellite capacity from us on the EchoStar XII satellite. The agreement to lease satellite capacity expired at the end of September 2017. EchoStar XVI. In December 2009, we entered into an initial ten -year agreement to lease satellite capacity to DISH Network, pursuant to which DISH Network has leased satellite capacity from us on the EchoStar XVI satellite since January 2013. Effective December 2012, we and DISH Network amended the 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 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 . In May 2017, DISH Network renewed the agreement through January 2023. DISH Network has the option to renew for an additional five -year period prior to expiration of the current term. There can be no assurance that such option to renew this agreement will be exercised. In the event that DISH Network does not exercise its 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. We and DISH Network have amended the agreement to allow DISH Network to place and use certain satellites at the 61.5 degree west longitude orbital location. Nimiq 5 Agreement. In September 2009, we entered into a fifteen -year agreement with Telesat Canada to lease satellite capacity from Telesat Canada on all 32 direct broadcast satellite (“DBS”) transponders on the Nimiq 5 satellite at the 72.7 degree west longitude orbital location (the “Telesat Transponder Agreement”). In September 2009, we also entered into an agreement with DISH Network, pursuant to which DISH Network leases satellite capacity from us on all 32 of the DBS transponders covered by the Telesat Transponder Agreement (the “DISH Nimiq 5 Agreement”). Under the terms of the DISH Nimiq 5 Agreement, DISH Network 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 lease satellite capacity 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 lease satellite capacity on a replacement satellite. QuetzSat-1 Agreement. In November 2008, we entered into a ten -year agreement to lease satellite capacity from SES Latin America, which provides, among other things, for the provision by SES Latin America to us of leased satellite capacity on 32 DBS transponders on the QuetzSat-1 satellite. Concurrently, in 2008, we entered into an agreement pursuant to which DISH Network leases from us satellite capacity 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 January 2013, the QuetzSat-1 satellite was moved to the 77 degree west longitude orbital location. In February 2013, EchoStar and DISH Network entered into an agreement pursuant to which EchoStar leases back from DISH Network certain satellite capacity on five DBS transponders on the QuetzSat-1 satellite through November 2021, unless extended or earlier terminated under the terms and conditions of our agreement. Under the terms of our contractual arrangements with DISH Network, we began leasing satellite capacity to DISH Network on the QuetzSat-1 satellite in February 2013 and will continue leasing such capacity through November 2021, unless extended or earlier terminated under the terms and conditions of our agreement with DISH Network for the QuetzSat-1 satellite. 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 lease satellite capacity 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 lease satellite capacity 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. Effective in March 2018, DISH Network exercised its right to terminate the DISH 103 Spectrum Development Agreement and we exercised our right to terminate the 103 Spectrum Development Agreement. In connection with the 103 Spectrum Development Agreement, in May 2012, we also entered into a ten - year agreement with Ciel pursuant to which we leased certain satellite capacity from Ciel on the SES-3 satellite at the 103 degree west longitude orbital location (the “Ciel 103 Agreement”). In June 2013, we and DISH Network entered into an agreement pursuant to which DISH Network leased certain satellite capacity from us on the SES-3 satellite (the “DISH 103 Agreement”). Under the terms of the DISH 103 Agreement, DISH Network made certain monthly payments to us through the service term. Effective in March 2018, DISH Network exercised its right to terminate the DISH 103 Agreement and we exercised our right to terminate the Ciel 103 Agreement. TT&C Agreement. Effective January 2012, we entered into a TT&C agreement pursuant to which we provided TT&C services to DISH Network for a period ending in December 2016 (the “TT&C Agreement”). We and DISH Network have amended the TT&C Agreement over time to, among other things, extend the term through February 2023. The fees for services provided under the 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 TT&C Agreement for any reason upon 12 months ’ notice . 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. 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. After December 2031, this agreement may be converted by mutual consent to a month-to-month lease agreement with either party having the right to terminate upon 30 days ’ notice. 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 EchoStar’s completion of the acquisition of Hughes Communications, Inc. and its subsidiaries (the ”Hughes Acquisition”), TerreStar and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services for TerreStar’s ground-based communications equipment. In December 2017, we and DISH Network amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DISH Network generally has the right to continue to receive warranty services from us for our products on a month-to-month basis unless terminated by DISH Network upon at least 21 days ’ written notice to us. DISH Network generally has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis unless operations and maintenance services are terminated by DISH Network upon at least 90 days ’ written notice to us. The provision of hosting services will continue until May 2022. In addition, DISH Network generally may terminate any and all services for convenience subject to providing us with prior notice and/or payment of termination charges. Hughes Broadband Distribution Agreement . Effective October 2012, we and DISH Network, entered into a distribution agreement (the “Distribution Agreement”) pursuant to which DISH Network has the right, but not the obligation, to market, sell and distribute our HughesNet satellite internet service (the “HughesNet service”). DISH Network pays us a monthly per subscriber wholesale service fee for the HughesNet service based upon a subscriber’s service level and based upon certain volume subscription thresholds. The Distribution Agreement also provides that DISH Network has the right, but not the obligation, to purchase certain broadband equipment from us to support the sale of the HughesNet service. The Distribution Agreement had an initial term of five years with automatic renewal for successive one year terms unless terminated by either party with a written notice at least 180 days before the expiration of the then-current term. In February 2014, we and DISH Network entered into an amendment to the Distribution Agreement which, among other things, extended the initial term of the Distribution Agreement until March 2024. Upon expiration or termination of the Distribution Agreement, we and DISH Network will continue to provide our HughesNet service to the then-current DISH Network subscribers pursuant to the terms and conditions of the Distribution Agreement. DBSD North America Agreement . In March 2012, DISH Network completed its acquisition of 100% of the equity of reorganized DBSD North America, Inc. (“DBSD North America”). Prior to DISH Network’s acquisition of DBSD North America and EchoStar’s completion of the Hughes Acquisition, DBSD North America and HNS entered into various agreements pursuant to which we provide, among other things, warranty, operations and maintenance and hosting services of DBSD North America’s gateway and ground-based communications equipment. In December 2017, we and DBSD North America amended these agreements, effective as of January 1, 2018, to reduce certain pricing terms through December 31, 2023 and to modify certain termination provisions. DBSD North America has the right to continue to receive operations and maintenance services from us on a quarter-to-quarter basis, unless terminated by DBSD North America upon at least 120 days ’ written notice to us. In February 2019, we further amended these agreements to provide DBSD North America with the right to continue to receive warranty services from us on a month-to-month basis until December 2023, unless terminated by DBSD North America upon at least 21 days’ written notice to us. The provision of hosting services will continue until February 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. In addition, DBSD North America generally may terminate any and all such services for convenience, subject to providing us with prior notice and/or payment of termination charges. RUS Implementation Agreement . In September 2010, DISH Network was selected by the Rural Utilities Service (“RUS”) of the U.S. Department of Agriculture to receive up to $14 million in broadband stimulus grant funds. Effective November 2011, we and DISH Network entered into a RUS Implementation Agreement (the “RUS Agreement”) pursuant to which we provided certain portions of the equipment and broadband service used to implement DISH Network’s RUS program. While the RUS Agreement expired in June 2013 when the broadband stimulus grant funds were exhausted, we are required to continue providing services to DISH Network’s customers activated prior to the expiration of the RUS Agreement in accordance with the terms and conditions of the RUS Agreement. Hughes Equipment and Services Agreement. In February 2019, we and DISH Network entered into an agreement pursuant to which we will sell to DISH Network our HughesNet Service and HughesNet equipment that has been modified to meet DISH Network’s internet-of-things specifications for the transfer of data to DISH Network’s network operations centers. This agreement has an initial term of five years expiring February 2024 with automatic renewal for successive one-year terms unless terminated by DISH Network with at least 180 days’ written notice to us or by us with at least 365 days’ written notice to DISH Network. 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 Network including a transition services agreement, satellite procurement agreement and services agreement, which all expired in January 2010 and were replaced by a professional services agreement (the “Professional Services Agreement”). In January 2010, EchoStar and DISH Network agreed that EchoStar and its subsidiaries shall continue to have the right, but not the obligation, to receive the following services from DISH Network, among others, certain of which were previously provided under a transition services agreement: information technology, travel and event coordination, internal audit, legal, accounting and tax, benefits administration, program acquisition services and other support services. Additionally, EchoStar and DISH Network agreed that DISH Network would continue to have the right, but not the obligation, to engage EchoStar and its subsidiaries to manage the process of procuring new satellite capacity for DISH Network (previously provided under a satellite procurement agreement), receive logistics, procurement and quality assurance services from EchoStar and its subsidiaries (previously provided under a services agreement) and provide other support services. In connection with the consummation of the Share Exchange, EchoStar and DISH amended and restated the Professional Services Agreement (the “Amended and Restated Professional Services Agreement”) to provide that EchoStar and its subsidiaries and DISH Network shall have the right to receive additional services that either EchoStar and its subsidiaries or DISH Network may require as a result of the Share Exchange, including access to antennas owned by DISH Network for our use in performing TT&C services and maintenance and support services for our antennas. A portion of these costs and expenses have been allocated to us in the manner described above under the caption “EchoStar.” The term of the Amended and Restated Professional Services Agreement is through January 2020 and renews automatically for successive one -year periods thereafter, unless the agreement is terminated earlier by either party upon at least 60 days ’ notice. However, either party may generally terminate the Amended and Restated Professional Services Agreement in part with respect to any particular service it receives for any reason upon at least 30 days ’ notice, unless the statement of work for particular services states otherwise. Certain services being provided for under the Amended and Restated Professional Services Agreement may survive the termination of the agreement. Real Estate Lease from DISH Network. Effective March 2017, we sublease from DISH Network certain space at 796 East Utah Valley Drive in American Fork, Utah for a period ending in August 2017. We exercised our option to renew this sublease for a five -year period ending in August 2022. 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 we are responsible for our portion of the taxes, insurance, utilities and maintenance of the premises. Collocation and Antenna Space Agreements . We and DISH Network have entered into an agreement pursuant to which DISH Network provides us with collocation space in El Paso, Texas. This agreement was for an initial period ending in August 2015, and provides us with renewal options for four consecutive years. Effective August 2015, we exercised our first renewal option for a period ending in August 2018 and in April 2018 we exercised our second renewal option for a period ending in August 2021. In connection with the Share Exchange, effective March 2017, we also entered into certain agreements pursuant to which DISH Network provides collocation and antenna space to EchoStar through February 2022 at the following locations: Cheyenne, Wyoming; Gilbert, Arizona; New Braunfels, Texas; Monee, Illinois; Spokane, Washington; and Englewood, Colorado. In August 2017, we and DISH Network also entered into certain other agreements pursuant to which DISH Network provides additional collocation and antenna space to EchoStar in Monee, Illinois and Spokane, Washington through August 2022. We generally may renew our collocation and antenna space agreements for three -year periods by providing DISH Network with prior written notice no more than 120 days but no less than 90 days prior to the end of the then-current term. We may terminate certain of these agreements with 180 days ’ prior written notice. The fees for the services provided under these agreements depend on the number of racks leased at the location. Other Agreements — DISH Network 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 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 $11 million in cash; and (ii) in March 2014, DISH Network began receiving certain satellite services from us as discussed above on these five satellites (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. Share Exchange Agreement. On January 31, 2017, EchoStar and certain of its subsidiaries entered into a share exchange agreement (the “Share Exchange Agreement”) with DISH and certain of its subsidiaries, pursuant to which, 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’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 contained customary representations and warranties by the parties, including representations by EchoStar related to the transferred assets, assumed liabilities and the financial condition of the transferred businesses. Echo |
Supplemental Guarantor and Non-
Supplemental Guarantor and Non-Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION | SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION Certain of our wholly-owned subsidiaries (together, the “Guarantor Subsidiaries”) have fully and unconditionally guaranteed, on a joint and several basis, the obligations of our Secured Notes, 7 5/8% Senior Unsecured Notes due 2021 and 6 5/8% Senior Unsecured Notes due August 1, 2026 (the “Notes”). In lieu of separate financial statements of the Guarantor Subsidiaries, accompanying condensed consolidating financial information prepared in accordance with Rule 3-10(f) of Regulation S-X is presented below, including the accompanying condensed balance sheet information, the accompanying condensed statement of operations and comprehensive income (loss) information and the accompanying 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 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, 2019 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 1,069,699 $ 44,728 $ 24,284 $ — $ 1,138,711 Marketable investment securities, at fair value 1,381,688 341 — — 1,382,029 Trade accounts receivable and contract assets — 139,445 77,112 — 216,557 Trade accounts receivable - DISH Network, net — 18,085 513 — 18,598 Inventory — 56,205 19,909 — 76,114 Advances to affiliates, net 109,433 652,379 10,318 (691,219 ) 80,911 Other current assets 42 28,048 46,182 — 74,272 Total current assets 2,560,862 939,231 178,318 (691,219 ) 2,987,192 Property and equipment, net — 2,214,920 301,217 — 2,516,137 Regulatory authorizations — 465,658 — — 465,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 40,294 — — 40,294 Investments in unconsolidated entities — 125,384 — — 125,384 Investment in subsidiaries 3,420,127 212,662 — (3,632,789 ) — Advances to affiliates 700 76,923 19,221 (76,887 ) 19,957 Operating lease assets — 89,628 23,346 — 112,974 Deferred tax asset 62,671 — 7,274 (62,671 ) 7,274 Other noncurrent assets, net — 227,944 12,749 — 240,693 Total assets $ 6,044,360 $ 4,896,817 $ 542,125 $ (4,463,566 ) $ 7,019,736 Liabilities and Shareholders’ Equity Trade accounts payable $ — $ 94,036 $ 18,784 $ — $ 112,820 Trade accounts payable - DISH Network — 1,698 — — 1,698 Current portion of long-term debt and capital lease obligations 911,985 41,090 561 — 953,636 Advances from affiliates, net 293,657 279,732 118,612 (691,219 ) 782 Accrued expenses and other 53,529 147,106 47,484 — 248,119 Total current liabilities 1,259,171 563,662 185,441 (691,219 ) 1,317,055 Long-term debt and capital lease obligations, net 2,386,136 176,309 984 — 2,563,429 Deferred tax liabilities, net — 564,100 110 (62,671 ) 501,539 Operating lease liability — 76,682 18,391 — 95,073 Advances from affiliates — 1,862 108,308 (76,887 ) 33,283 Other noncurrent liabilities — 95,232 3,638 — 98,870 Total HSS shareholders’ equity 2,399,053 3,418,970 213,819 (3,632,789 ) 2,399,053 Noncontrolling interests — — 11,434 — 11,434 Total liabilities and shareholders’ equity $ 6,044,360 $ 4,896,817 $ 542,125 $ (4,463,566 ) $ 7,019,736 December 31, 2018 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 771,718 $ 46,353 $ 29,752 $ — $ 847,823 Marketable investment securities, at fair value 1,608,123 1,073 — — 1,609,196 Trade accounts receivable and contract assets, net — 128,831 72,265 — 201,096 Trade accounts receivable - DISH Network — 13,240 310 — 13,550 Inventory — 58,607 16,772 — 75,379 Advances to affiliates, net 109,433 536,600 27,174 (569,657 ) 103,550 Other current assets 72 26,331 41,378 (561 ) 67,220 Total current assets 2,489,346 811,035 187,651 (570,218 ) 2,917,814 Property and equipment, net — 2,280,804 301,377 — 2,582,181 Regulatory authorizations — 465,658 — — 465,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 43,952 — — 43,952 Investments in unconsolidated entities — 126,369 — — 126,369 Investment in subsidiaries 3,362,589 192,370 — (3,554,959 ) — Advances to affiliates 700 86,280 — (86,980 ) — Deferred tax asset 54,001 — 3,581 (54,001 ) 3,581 Other noncurrent assets, net — 236,675 12,769 — 249,444 Total assets $ 5,906,636 $ 4,747,316 $ 505,378 $ (4,266,158 ) $ 6,893,172 Liabilities and Shareholders’ Equity Trade accounts payable $ — $ 88,342 $ 16,409 $ — $ 104,751 Trade accounts payable - DISH Network — 752 — — 752 Current portion of long-term debt and capital lease obligations 918,916 39,995 666 — 959,577 Advances from affiliates, net 181,926 282,268 106,331 (569,657 ) 868 Accrued expenses and other 43,410 147,055 48,307 (561 ) 238,211 Total current liabilities 1,144,252 558,412 171,713 (570,218 ) 1,304,159 Long-term debt and capital lease obligations, net 2,385,164 187,002 1,038 — 2,573,204 Deferred tax liabilities, net — 541,903 834 (54,001 ) 488,736 Advances from affiliates — — 120,418 (86,980 ) 33,438 Other noncurrent liabilities — 98,661 2,479 — 101,140 Total HSS shareholders’ equity 2,377,220 3,361,338 193,621 (3,554,959 ) 2,377,220 Noncontrolling interests — — 15,275 — 15,275 Total liabilities and shareholders’ equity $ 5,906,636 $ 4,747,316 $ 505,378 $ (4,266,158 ) $ 6,893,172 For the Three Months Ended March 31, 2019 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 81,858 $ 513 $ — $ 82,371 Services and other revenue - other — 347,959 59,183 (8,802 ) 398,340 Equipment revenue — 52,649 9,415 (10,350 ) 51,714 Total revenue — 482,466 69,111 (19,152 ) 532,425 Costs and expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 121,079 39,333 (8,109 ) 152,303 Cost of sales - equipment (exclusive of depreciation and amortization) — 48,499 6,858 (10,350 ) 45,007 Selling, general and administrative expenses — 86,486 16,565 (693 ) 102,358 Research and development expenses — 6,743 145 — 6,888 Depreciation and amortization — 127,823 15,707 — 143,530 Total costs and expenses — 390,630 78,608 (19,152 ) 450,086 Operating income — 91,836 (9,497 ) — 82,339 Other income (expense): Interest income 17,409 926 559 (897 ) 17,997 Interest expense, net of amounts capitalized (56,361 ) (7,632 ) (1,317 ) 897 (64,413 ) Gains (losses) on investments, net — (346 ) — — (346 ) Equity in earnings (losses) of unconsolidated affiliates, net — (1,072 ) — — (1,072 ) Equity in earnings (losses) of subsidiaries, net 52,199 (8,788 ) — (43,411 ) — Other, net 309 (418 ) 154 — 45 Total other income (expense), net 13,556 (17,330 ) (604 ) (43,411 ) (47,789 ) Income (loss) before income taxes 13,556 74,506 (10,101 ) (43,411 ) 34,550 Income tax benefit (provision) 8,670 (22,214 ) 2,026 — (11,518 ) Net income (loss) 22,226 52,292 (8,075 ) (43,411 ) 23,032 Less: Net income attributable to noncontrolling interests — — 806 — 806 Net income (loss) attributable to HSS $ 22,226 $ 52,292 $ (8,881 ) $ (43,411 ) $ 22,226 Comprehensive income (loss): Net income (loss) $ 22,226 $ 52,292 $ (8,075 ) $ (43,411 ) $ 23,032 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (838 ) — (838 ) Unrealized gains (losses) on available-for-sale securities and other 2,354 — 32 — 2,386 Recognition of realized gains on available-for-sale securities in net income (385 ) — — — (385 ) Equity in other comprehensive income (loss) of subsidiaries, net (806 ) (806 ) — 1,612 — Total other comprehensive income (loss), net of tax 1,163 (806 ) (806 ) 1,612 1,163 Comprehensive income (loss) 23,389 51,486 (8,881 ) (41,799 ) 24,195 Less: Comprehensive income attributable to noncontrolling interests — — 806 — 806 Comprehensive income (loss) attributable to HSS $ 23,389 $ 51,486 $ (9,687 ) $ (41,799 ) $ 23,389 For the Three Months Ended March 31, 2018 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 100,087 $ 527 $ — $ 100,614 Services and other revenue - other — 312,108 57,076 (9,850 ) 359,334 Equipment revenue — 46,409 4,607 (8,069 ) 42,947 Total revenue — 458,604 62,210 (17,919 ) 502,895 Costs and expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 119,326 37,726 (9,397 ) 147,655 Cost of sales - equipment (exclusive of depreciation and amortization) — 43,643 3,465 (8,037 ) 39,071 Selling, general and administrative expenses — 83,392 11,743 (485 ) 94,650 Research and development expenses — 7,137 — — 7,137 Depreciation and amortization — 121,339 12,379 — 133,718 Total costs and expenses — 374,837 65,313 (17,919 ) 422,231 Operating income — 83,767 (3,103 ) — 80,664 Other income (expense): Interest income 10,761 316 501 (199 ) 11,379 Interest expense, net of amounts capitalized (57,445 ) (6,956 ) (211 ) 199 (64,413 ) Gains (losses) on investments, net — (392 ) — — (392 ) Equity in earnings of unconsolidated affiliate — 1,492 — — 1,492 Equity in earnings (losses) of subsidiaries, net 56,259 (3,697 ) — (52,562 ) — Other, net 3 (97 ) (519 ) — (613 ) Total other income (expense), net 9,578 (9,334 ) (229 ) (52,562 ) (52,547 ) Income (loss) before income taxes 9,578 74,433 (3,332 ) (52,562 ) 28,117 Income tax benefit (provision) 10,423 (18,084 ) (75 ) — (7,736 ) Net income (loss) 20,001 56,349 (3,407 ) (52,562 ) 20,381 Less: Net income attributable to noncontrolling interests — — 380 — 380 Net income (loss) attributable to HSS $ 20,001 $ 56,349 $ (3,787 ) $ (52,562 ) $ 20,001 Comprehensive income (loss): Net income (loss) $ 20,001 $ 56,349 $ (3,407 ) $ (52,562 ) $ 20,381 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 1,900 — 1,900 Unrealized losses on available-for-sale securities and other (311 ) — (100 ) — (411 ) Equity in other comprehensive income (loss) of subsidiaries, net 2,014 2,014 — (4,028 ) — Total other comprehensive income (loss), net of tax 1,703 2,014 1,800 (4,028 ) 1,489 Comprehensive income (loss) 21,704 58,363 (1,607 ) (56,590 ) 21,870 Less: Comprehensive income attributable to noncontrolling interests — — 166 — 166 Comprehensive income (loss) attributable to HSS $ 21,704 $ 58,363 $ (1,773 ) $ (56,590 ) $ 21,704 For the Three Months Ended March 31, 2019 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 22,226 $ 52,292 $ (8,075 ) $ (43,411 ) $ 23,032 Adjustments to reconcile net income (loss) to net cash flows from operating activities (48,467 ) 163,032 (10,043 ) 43,411 147,933 Net cash flows from operating activities (26,241 ) 215,324 (18,118 ) — 170,965 Cash flows from investing activities: Purchases of marketable investment securities (240,188 ) — — — (240,188 ) Sales and maturities of marketable investment securities 468,748 (3 ) — — 468,745 Expenditures for property and equipment — (54,207 ) (19,722 ) — (73,929 ) Expenditures for externally marketed software — (7,600 ) — — (7,600 ) Distributions (contributions) and advances from (to) subsidiaries, net 111,020 (32,949 ) — (78,071 ) — Net cash flows from investing activities 339,580 (94,759 ) (19,722 ) (78,071 ) 147,028 Cash flows from financing activities: Contributions (distributions) and advances (to) from parent, net — (111,020 ) 32,949 78,071 — Repayment of debt and finance lease obligations — (9,597 ) (285 ) — (9,882 ) Noncontrolling interest purchase (7,312 ) — — — (7,312 ) Repurchase of the 2019 Senior Secured Notes (8,046 ) — — — (8,046 ) Repayment of in-orbit incentive obligations — (1,573 ) — — (1,573 ) Net cash flows from financing activities (15,358 ) (122,190 ) 32,664 78,071 (26,813 ) Effect of exchange rates on cash and cash equivalents — — (117 ) — (117 ) Net increase (decrease) in cash and cash equivalents, including restricted amounts 297,981 (1,625 ) (5,293 ) — 291,063 Cash and cash equivalents, including restricted amounts, beginning of period 771,718 46,353 30,548 — 848,619 Cash and cash equivalents, including restricted amounts, end of period $ 1,069,699 $ 44,728 $ 25,255 $ — $ 1,139,682 For the Three Months Ended March 31, 2018 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 20,001 $ 56,349 $ (3,407 ) $ (52,562 ) $ 20,381 Adjustments to reconcile net income (loss) to net cash flows from operating activities (57,327 ) 127,889 (1,102 ) 52,562 122,022 Net cash flows from operating activities (37,326 ) 184,238 (4,509 ) — 142,403 Cash flows from investing activities: Purchases of marketable investment securities (358,543 ) — — — (358,543 ) Sales and maturities of marketable investment securities 197,686 — — — 197,686 Expenditures for property and equipment — (76,974 ) (10,803 ) — (87,777 ) Refunds and other receipts related to capital expenditures — 77,524 — — 77,524 Expenditures for externally marketed software — (7,148 ) — — (7,148 ) Payment for satellite launch services — — (7,125 ) — (7,125 ) Distributions (contributions) and advances from (to) subsidiaries, net 144,984 (18,425 ) — (126,559 ) — Net cash flows from investing activities (15,873 ) (25,023 ) (17,928 ) (126,559 ) (185,383 ) Cash flows from financing activities: Contributions (distributions) and advances (to) from parent, net — (144,984 ) 18,425 126,559 — Repayment of debt and capital lease obligations — (8,608 ) (760 ) — (9,368 ) Capital contribution from EchoStar 7,125 — — — 7,125 Payment of in-orbit incentive obligations — (1,265 ) — — (1,265 ) Net cash flows from financing activities 7,125 (154,857 ) 17,665 126,559 (3,508 ) Effect of exchange rates on cash and cash equivalents — — (249 ) — (249 ) Net increase (decrease) in cash and cash equivalents, including restricted amounts (46,074 ) 4,358 (5,021 ) — (46,737 ) Cash and cash equivalents, including restricted amounts, beginning of period 1,746,878 42,373 34,103 — 1,823,354 Cash and cash equivalents, including restricted amounts, end of period $ 1,700,804 $ 46,731 $ 29,082 $ — $ 1,776,617 |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Noncash Investing and Financing Activities For the three months ended March 31, 2019 2018 (In thousands) Increase (decrease) in capital expenditures included in accounts payable, net $ (2,163 ) $ 7,883 Restricted Cash and Cash Equivalents The beginning and ending balances of cash and cash equivalents presented in our Condensed Consolidated Statements of Cash Flows included restricted cash and cash equivalents of $1 million for each of the three months ended March 31, 2019 and 2018. These amounts are included in Other noncurrent assets, net in our Condensed Consolidated Balance Sheets. Fair Value of In-Orbit Incentives As of March 31, 2019 and December 31, 2018 , 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 $93 million and $95 million , respectively. Contract Acquisition and Fulfillment Costs Unamortized contract acquisition costs totaled $102 million and $104 million as of March 31, 2019 and December 31, 2018 , respectively, and related amortization expense totaled $21 million and $20 million for the three months ended March 31, 2019 and 2018 , respectively. Unamortized contract fulfillment costs totaled $3 million as of March 31, 2019 and December 31, 2018 and related amortization expense was de minimis for the three months ended March 31, 2019 and 2018 , respectively. Research and Development The table below summarizes the research and development costs incurred in connection with customers’ orders included in cost of sales and other expenses we incurred for research and development. For the three months 2019 2018 (In thousands) Cost of sales $ 5,395 $ 6,598 Research and development $ 6,888 $ 7,137 Capitalized Software Costs As of March 31, 2019 and December 31, 2018 , the net carrying amount of externally marketed software was $99 million and $97 million , respectively, of which $34 million and $29 million , respectively, is under development and not yet placed in service. We capitalized costs related to the development of externally marketed software of $8 million and $7 million for the three months ended March 31, 2019 and 2018 , respectively. We recorded amortization expense relating to the development of externally marketed software of $6 million for each of the three months ended March 31, 2019 and 2018 . The weighted average useful life of our externally marketed software was three years as of March 31, 2019 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In May 2019, we entered into an agreement with Yahsat pursuant to which Yahsat will contribute its current satellite communications services business in Brazil to us in exchange for a 20% ownership interest in our existing Brazilian subsidiary that conducts our current satellite communications services business in Brazil. The combined business will provide broadband internet services and enterprise solutions in Brazil using the Telesat T19V and Eutelsat 65W satellites and Yahsat’s Al Yah 3 satellite. Under the terms of the agreement, Yahsat may also acquire, for further cash investments, additional minority ownership interests in the business in the future provided certain conditions are met. The completion of the transaction is subject to customary regulatory approvals and closing conditions. No assurance can be given that the transaction will be consummated on the terms agreed to or at all. In May 2019, we entered into an agreement with Bharti Airtel Limited (“BAL”) and its subsidiary, Bharti Airtel Services Limited (together with BAL, “Bharti”), pursuant to which Bharti will contribute its very small aperture terminal (“VSAT”) telecommunications services and hardware business in India to our two existing Indian subsidiaries that conduct our VSAT services and hardware business. The combined entities will provide broadband satellite and hybrid solutions for enterprise and government networks. Upon consummation of the transaction, Bharti will have a 33% ownership interest in the combined business. The completion of the transaction is subject to customary regulatory approvals and closing conditions. No assurance can be given that the transaction will be consummated on the terms agreed to or at all. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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. (“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 U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2018 |
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% 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. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform with the current period presentation. |
Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases We adopted ASU No. 2016-02- Leases (Topic 842) , as amended, or ASC 842, as of January 1, 2019. The primary impact of ASC 842 on our consolidated financial statements is the recognition of right-of-use assets and related liabilities on our consolidated balance sheet for operating leases where we are the lessee. We have elected to initially apply the requirements of the new standard on January 1, 2019 and we have not restated our consolidated financial statements for prior periods. Consequently, certain amounts reported in our Condensed Consolidated Balance Sheet as of March 31, 2019 are not comparable to those reported as of December 31, 2018 or earlier dates. Our adoption of ASC 842 did not have a material impact on the results of our operations or on our cash flows for the three months ended March 31, 2019. Under ASC 842, leases are classified either as operating leases or finance leases. The lease classification affects the recognition of lease expense by lessees in the statement of operations. Consistent with prior accounting standards, operating lease expense is included in operating expenses, while finance lease expense is split between depreciation expense and interest expense. ASC 842 does not fundamentally change the lessor accounting model, which requires leases to be classified as operating leases or sales-type leases. Operating lease revenue generally is recognized over the lease term, while sales-type lease revenue is recognized primarily upon lease commencement, except for amounts representing interest on related accounts receivable. Except for the new requirement to recognize assets and liabilities on the balance sheet for operating leases where we are the lessee, under our ASC 842 transition method we continue to apply prior accounting standards to leases that commenced prior to 2019. We fully apply ASC 842 requirements only to leases that commenced or were modified on or after January 1, 2019. We elected certain practical expedients under our transition method, including elections to not reassess (i) whether a contract is or contains a lease and (ii) the classification of existing leases. We also elected not to apply hindsight in determining whether optional renewal periods should be included in the lease term, which in some instances may impact the initial measurement of the lease liability and the calculation of straight-line expense over the lease term for operating leases. As a result of our transition elections, there was no change in our recognition of revenue and expense for leases that commenced prior to 2019. In addition, the application of ASC 842 requirements to new and modified leases did not materially affect our recognition of revenue or expenses for the three months ended March 31, 2019. Our adoption of ASC 842 resulted in the following adjustments to our Condensed Consolidated Balance Sheet as of December 31, 2018. As Reported December 31,2018 Adoption of ASC 842 Increase (Decrease) Balance January 1, 2019 (in thousands) Prepaids and deposits $ 48,681 $ (28 ) $ 48,653 Operating lease right-of-use assets $ — $ 117,006 $ 117,006 Other noncurrent assets, net $ 253,025 $ (7,272 ) $ 245,753 Total assets $ 6,893,172 $ 109,706 $ 7,002,878 Accrued expenses and other $ 68,854 $ 14,444 $ 83,298 Operating lease liabilities — $ 99,133 $ 99,133 Other noncurrent liabilities $ 101,140 $ (3,871 ) $ 97,269 Total liabilities $ 4,500,677 $ 109,706 $ 4,610,383 Total liabilities and shareholders’ equity $ 6,893,172 $ 109,706 $ 7,002,878 Our accounting policies under ASC 842 are summarized below. Additional disclosures required by the new standard are included in Note 4. Lessee Accounting We lease real estate, satellite capacity and equipment in the conduct of our business operations. For contracts entered into on or after January 1, 2019, we assess at contract inception whether the contract is, or contains a lease. Generally, we determine that a lease exists when (i) the contract involves the use of a distinct identified asset, (ii) we obtain the right to substantially all economic benefits from use of the asset and (iii) we have the right to direct the use of the asset. A lease is classified as a finance lease when one or more of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (v) the asset is of a specialized nature and there is not expected to an alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. At the lease commencement date, we recognize a right-of-use asset and a lease liability for all leases, except short-term leases with an original term of 12 months or less. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any prepayments to the lessor and initial direct costs such as brokerage commissions, less any lease incentives received. All right-of-use assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The lease liability is initially measured at the present value of the lease payments, discounted using an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying lease. The incremental borrowing rates used for the initial measurement of lease liabilities as of January 1, 2019 were based on the original lease terms . Lease payments included in the measurement of lease liabilities consist of (i) fixed lease payments for the noncancelable lease term, (ii) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (iii) variable lease payments that depend on an underlying index or rate, based on the index or rate in effect at lease commencement. Certain of our real estate lease agreements require payments for non-lease costs such as utilities and common area maintenance. We have elected an accounting policy, as permitted by ASC 842, not to account for such payments separately from the related lease payments. Our policy election results in a higher initial measurement of lease liabilities when such non-lease payments are fixed amounts. Certain of our real estate lease agreements require variable lease payments that do not depend on an underlying index or rate, such as sales and value-added taxes and our proportionate share of actual property taxes, insurance and utilities. Such payments and changes in payments based on a rate or index are recognized in operating expenses when incurred. Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Lease expense for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense on the lease liability based on the discount rate at lease commencement. For both operating and finance leases, lease payments are allocated between a reduction of the lease liability and interest expense. Amortization of the right-of-use asset for operating leases reflects amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments. Lessor Accounting We lease satellite capacity, communications equipment and real estate to certain of our customers, including DISH Network. We identify and determine the classification of such leases as operating leases or sales-type leases based on the criteria discussed above for lessees. A lease is classified as a sales-type lease if it meets the above criteria for a finance lease; otherwise it is classified as an operating lease. Some of our leases are embedded in contracts with customers that include non-lease performance obligations. For such contracts, except where we have elected otherwise as discussed below, we allocate consideration in the contract between lease and non-lease components based on their relative standalone selling prices. We have elected an accounting policy, as permitted by ASC 842, to not separate the lease of equipment from related services in our HughesNet broadband internet service contracts with consumers. We account for all revenue from such contracts as non-lease service revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Our accounting for revenue from operating leases and sales-type leases was not substantially changed by our adoption of ASC 842. However, we anticipate that certain leases that would have been classified as operating leases under prior accounting standards may be classified as sales-type leases under ASC 842. Operating lease revenue generally is recognized on a straight-line basis over the lease term. Sales-type lease revenue and a corresponding receivable generally are recognized at lease commencement based on the present value of the future lease payments and related interest income on the receivable is recognized over the lease term. Payments under sales-type leases generally are discounted at the interest rate implicit in the lease. Recently Issued Accounting Pronouncements Not Yet Adopted Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments , which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses instead of incurred losses. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. We are currently assessing the impact of adopting this new accounting standard on our Consolidated Financial Statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of new accounting pronouncements and changes in accounting principles | Our adoption of ASC 842 resulted in the following adjustments to our Condensed Consolidated Balance Sheet as of December 31, 2018. As Reported December 31,2018 Adoption of ASC 842 Increase (Decrease) Balance January 1, 2019 (in thousands) Prepaids and deposits $ 48,681 $ (28 ) $ 48,653 Operating lease right-of-use assets $ — $ 117,006 $ 117,006 Other noncurrent assets, net $ 253,025 $ (7,272 ) $ 245,753 Total assets $ 6,893,172 $ 109,706 $ 7,002,878 Accrued expenses and other $ 68,854 $ 14,444 $ 83,298 Operating lease liabilities — $ 99,133 $ 99,133 Other noncurrent liabilities $ 101,140 $ (3,871 ) $ 97,269 Total liabilities $ 4,500,677 $ 109,706 $ 4,610,383 Total liabilities and shareholders’ equity $ 6,893,172 $ 109,706 $ 7,002,878 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract asset and liabilities | The following table provides information about our contract balances with customers, including amounts for certain embedded leases. As of March 31, 2019 December 31, 2018 (In thousands) Trade accounts receivable: Sales and services $ 164,310 $ 154,415 Leasing 7,775 7,990 Total 172,085 162,405 Contract assets 58,500 55,295 Allowance for doubtful accounts (14,028 ) (16,604 ) Total trade accounts receivable and contract assets, net $ 216,557 $ 201,096 Trade accounts receivable - DISH Network: Sales and services $ 17,252 $ 12,274 Leasing 1,346 1,276 Total trade accounts receivable - DISH Network, net $ 18,598 $ 13,550 Contract liabilities: Current $ 90,180 $ 72,249 Noncurrent 10,778 10,133 Total contract liabilities $ 100,958 $ 82,382 |
Disaggregation of revenue | The following table disaggregates revenue from customer contracts attributed to our North America (the U.S and its territories, Mexico and Canada), South and Central America and other foreign locations as well as by segment, based on the location where the goods or services are provided. All other revenue includes transactions with customers in Asia, Africa, Australia, Europe, and the Middle East. Hughes ESS Corporate and Other Consolidated Total (In thousands) For the three months ended March 31, 2019 North America $ 367,829 $ 81,084 $ 1,005 $ 449,918 South and Central America 26,863 — — 26,863 All other 50,645 175 4,824 55,644 Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 For the three months ended March 31, 2018 North America $ 336,020 $ 96,578 $ 1,206 $ 433,804 South and Central America 24,488 — — 24,488 All other 40,310 175 4,118 44,603 Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 Nature of Products and Services The following table disaggregates revenue based on the nature of products and services and by segment. Hughes ESS Corporate and Other Consolidated (In thousands) For the three months ended March 31, 2019 Equipment $ 25,960 $ — $ — $ 25,960 Services 380,783 3,740 322 384,845 Design, development and construction services 25,066 — — 25,066 Revenue from sales and services 431,809 3,740 322 435,871 Lease revenue 13,528 77,519 5,507 96,554 Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 For the three months ended March 31, 2018 Equipment $ 26,771 $ — $ — $ 26,771 Services 313,961 7,403 375 321,739 Design, development and construction services 16,176 — — 16,176 Revenue from sales and services 356,908 7,403 375 364,686 Lease revenue 43,910 89,350 4,949 138,209 Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease assets and liabilities | Right-of-use assets Operating $ 112,974 Finance 563,350 Total right-of-use assets $ 676,324 Lease liabilities Current Operating $ 14,444 Finance 41,651 Noncurrent Operating 95,073 Finance 177,294 Total lease liabilities $ 328,462 |
Lease cost, weighted average term, discount rates and cash flows | The following table details components of lease cost, weighted average lease terms and discount rates, and cash flows for operating leases and finance leases: For the three months ended March 31, 2019 (In thousands) Lease cost Operating lease cost $ 5,123 Finance lease cost Amortization of right-of-use assets 20,666 Interest on lease liabilities 6,018 Short-term lease cost 120 Variable lease cost 1,918 Total lease cost $ 33,845 As of March 31, 2019 (In thousands) Lease term and discount rate Weighted average remaining lease term (in years): Finance leases 4.82 Operating leases 10.54 Weighted average discount rate: Finance leases 10.75 % Operating leases 6.19 % For the three months ended March 31, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,516 Operating cash flows from finance leases $ 6,018 Financing cash flows from finance leases $ 9,758 |
Lease liability maturity | The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 |
Lease liability maturity | The following table presents maturities of our lease liabilities as of March 31, 2019: Maturity of lease liabilities Operating leases Finance leases Total (In thousands) Year ending December 31, 2019 (remainder) $ 14,757 $ 47,400 $ 62,157 2020 18,339 63,266 81,605 2021 15,781 59,692 75,473 2022 13,918 41,040 54,958 2023 13,337 40,942 54,279 After 2023 75,274 30,707 105,981 Total lease payments 151,406 283,047 434,453 Less interest (41,889 ) (64,102 ) (105,991 ) Present value of lease liabilities $ 109,517 $ 218,945 $ 328,462 |
Minimum future rental payments | As of December 31, 2018, our future minimum rental payments under noncancelable operating leases were as follows Year ending December 31, (In thousands) 2019 $ 17,587 2020 16,957 2021 13,400 2022 9,730 2023 8,427 Thereafter 21,886 Total $ 87,987 |
Lease revenue by type | Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 |
Lease revenue by type | The following table details our lease revenue for the three months ended March 31, 2019 (in thousands): Sales-type lease revenue: Revenue at lease commencement $ 688 Interest income 252 Operating lease revenue 95,614 Lease revenue $ 96,554 |
Present maturities of operating lease maturities | The following table presents maturities of our operating lease payments as of March 31, 2019: Operating leases Year ending December 31, (In thousands) 2019 (remainder) $ 232,901 2020 255,622 2021 227,246 2022 145,552 2023 35,506 After 2023 150,525 Total lease payments $ 1,047,352 |
Property plant and equipment subject to operating leases | Property and equipment, net as of March 31, 2019 and Depreciation and amortization for the three months then ended included the following amounts for assets subject to operating leases: Accumulated Depreciation Cost depreciation expense (in thousands) Customer premises equipment $ 1,291,237 $ 925,721 $ 49,712 Satellites 1,552,245 847,160 32,601 Real estate 31,477 6,460 217 Total $ 2,874,959 $ 1,779,341 $ 82,530 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) and Related Tax Effects (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The changes in the balances of Accumulated other comprehensive loss by component were as follows: Cumulative Foreign Currency Translation Losses Unrealized Gain (Loss) On Available-For-Sale Securities Other Accumulated Other Comprehensive Loss (In thousands) Balance, December 31, 2017 $ (52,251 ) $ (648 ) $ 77 $ (52,822 ) Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 — 433 — 433 Balance, January 1, 2018 (52,251 ) (215 ) 77 (52,389 ) Other comprehensive income (loss) before reclassifications 2,114 (311 ) (100 ) 1,703 Other comprehensive income (loss) 2,114 (311 ) (100 ) 1,703 Balance, March 31, 2018 $ (50,137 ) $ (526 ) $ (23 ) $ (50,686 ) Balance, December 31, 2018 $ (82,800 ) $ (1,092 ) $ 118 $ (83,774 ) Other comprehensive income (loss) before reclassifications (838 ) 2,353 33 1,548 Amounts reclassified to net income — (385 ) — (385 ) Other comprehensive income (loss) (838 ) 1,968 33 1,163 Balance, March 31, 2019 $ (83,638 ) $ 876 $ 151 $ (82,611 ) |
Marketable Investment Securit_2
Marketable Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable investment securities | Our marketable investment securities portfolio consists of various debt and equity instruments as follows: As of March 31, 2019 December 31, 2018 (In thousands) Marketable investment securities: Debt securities: Corporate bonds $ 1,047,428 $ 1,234,017 Other debt securities 334,259 374,106 Total debt securities 1,381,687 1,608,123 Equity securities 342 1,073 Total marketable investment securities $ 1,382,029 $ 1,609,196 |
Schedule of unrealized gains (losses) on marketable investment securities | A summary of our available-for-sale debt securities is presented in the table below. Amortized Unrealized Estimated Cost Gains Losses Fair Value (In thousands) As of March 31, 2019 Corporate bonds $ 1,046,539 $ 966 $ (77 ) $ 1,047,428 Other debt securities 334,272 2 (15 ) 334,259 Total available-for-sale debt securities $ 1,380,811 $ 968 $ (92 ) $ 1,381,687 As of December 31, 2018 Corporate bonds $ 1,235,110 $ 230 $ (1,323 ) $ 1,234,017 Other debt securities 374,106 — — 374,106 Total available-for-sale debt securities $ 1,609,216 $ 230 $ (1,323 ) $ 1,608,123 |
Schedule of fair value measurements | Our marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of March 31, 2019 and December 31, 2018 , we did not have investments that were categorized within Level 3 of the fair value hierarchy. As of March 31, 2019 December 31, 2018 Level 1 Level 2 Total Level 1 Level 2 Total (In thousands) Debt securities: Corporate bonds $ — $ 1,047,428 $ 1,047,428 $ — $ 1,234,017 $ 1,234,017 Other — 334,259 334,259 — 374,106 374,106 Total debt securities — 1,381,687 1,381,687 — 1,608,123 1,608,123 Equity securities 342 — 342 1,073 — 1,073 Total marketable investment securities $ 342 $ 1,381,687 $ 1,382,029 $ 1,073 $ 1,608,123 $ 1,609,196 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory, Net [Abstract] | |
Schedule of inventory | Our inventory consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Raw materials $ 6,473 $ 4,856 Work-in-process 12,093 13,901 Finished goods 57,548 56,622 Total inventory $ 76,114 $ 75,379 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: Depreciable Life In Years As of March 31, 2019 December 31, 2018 (In thousands) Land — $ 13,375 $ 13,401 Buildings and improvements 1 to 40 117,270 117,564 Furniture, fixtures, equipment and other 1 to 12 754,902 741,429 Customer premises equipment 2 to 4 1,210,850 1,159,977 Satellites - owned 2 to 15 2,268,862 2,268,862 Satellites - acquired under finance leases 10 to 15 1,050,360 1,051,110 Construction in progress — 30,013 28,087 Total property and equipment 5,445,632 5,380,430 Accumulated depreciation (2,929,495 ) (2,798,249 ) Property and equipment, net $ 2,516,137 $ 2,582,181 Depreciation expense associated with our property and equipment consisted of the following: For the three months 2019 2018 (In thousands) Buildings and improvements $ 3,110 $ 1,298 Furniture, fixtures, equipment and other 20,354 20,774 Customer premises equipment 46,192 43,448 Satellites 64,362 59,033 Total depreciation expense $ 134,018 $ 124,553 |
Schedule of construction in progress | Construction in progress consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Progress amounts for satellite construction $ 393 $ 246 Satellite related equipment 15,639 13,001 Other 13,981 14,840 Construction in progress $ 30,013 $ 28,087 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investment in unconsolidated Entities | Our investments in unconsolidated entities consisted of the following: As of March 31, 2019 December 31, 2018 (In thousands) Investments in unconsolidated entities: Equity method $ 109,946 $ 110,931 Other equity investments without a readily determinable fair value 15,438 15,438 Total investments in unconsolidated entities $ 125,384 $ 126,369 |
Long-Term Debt and Finance Le_2
Long-Term Debt and Finance Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt and Capital Lease Obligations [Abstract] | |
Schedule of carrying amounts and fair values of the entity's debt | The following table summarizes the carrying amounts and fair values of our long-term debt and finance lease obligations. Effective Interest Rate As of March 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value (In thousands) Senior Secured Notes: 6 1/2% Senior Secured Notes due 2019 6.959% $ 912,857 $ 919,119 $ 920,836 $ 932,696 5 1/4% Senior Secured Notes due 2026 5.320% 750,000 749,903 750,000 695,865 Senior Unsecured Notes: 7 5/8% Senior Unsecured Notes due 2021 8.062% 900,000 969,417 900,000 934,902 6 5/8% Senior Unsecured Notes due 2026 6.688% 750,000 741,368 750,000 696,353 Less: Unamortized debt issuance costs (14,737 ) — (16,757 ) — Subtotal 3,298,120 $ 3,379,807 3,304,079 $ 3,259,816 Finance lease obligations 218,945 228,702 Total debt and finance lease obligations 3,517,065 3,532,781 Less: Current portion (953,636 ) (959,577 ) Long-term debt and finance lease obligations, net $ 2,563,429 $ 2,573,204 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 ESS Corporate and Other Consolidated Total (In thousands) For the three months ended March 31, 2019 External revenue $ 445,337 $ 80,553 $ 6,535 $ 532,425 Intersegment revenue — 706 (706 ) — Total revenue $ 445,337 $ 81,259 $ 5,829 $ 532,425 EBITDA $ 161,132 $ 68,717 $ (6,159 ) $ 223,690 Capital expenditures $ 73,821 $ 108 $ — $ 73,929 For the three months ended March 31, 2018 External revenue $ 400,459 $ 96,223 $ 6,213 $ 502,895 Intersegment revenue 359 530 (889 ) — Total revenue $ 400,818 $ 96,753 $ 5,324 $ 502,895 EBITDA $ 136,713 $ 84,150 $ (6,374 ) $ 214,489 Capital expenditures $ 87,291 $ (77,038 ) $ — $ 10,253 |
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, 2019 2018 (In thousands) EBITDA $ 223,690 $ 214,489 Interest income and expense, net (46,416 ) (53,034 ) Depreciation and amortization (143,530 ) (133,718 ) Net income attributable to noncontrolling interests 806 380 Income before income taxes $ 34,550 $ 28,117 |
Supplemental Guarantor and No_2
Supplemental Guarantor and Non-Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Guarantor and Non-Guarantor Financial Information | |
Schedule of consolidating balance sheet | HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 1,069,699 $ 44,728 $ 24,284 $ — $ 1,138,711 Marketable investment securities, at fair value 1,381,688 341 — — 1,382,029 Trade accounts receivable and contract assets — 139,445 77,112 — 216,557 Trade accounts receivable - DISH Network, net — 18,085 513 — 18,598 Inventory — 56,205 19,909 — 76,114 Advances to affiliates, net 109,433 652,379 10,318 (691,219 ) 80,911 Other current assets 42 28,048 46,182 — 74,272 Total current assets 2,560,862 939,231 178,318 (691,219 ) 2,987,192 Property and equipment, net — 2,214,920 301,217 — 2,516,137 Regulatory authorizations — 465,658 — — 465,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 40,294 — — 40,294 Investments in unconsolidated entities — 125,384 — — 125,384 Investment in subsidiaries 3,420,127 212,662 — (3,632,789 ) — Advances to affiliates 700 76,923 19,221 (76,887 ) 19,957 Operating lease assets — 89,628 23,346 — 112,974 Deferred tax asset 62,671 — 7,274 (62,671 ) 7,274 Other noncurrent assets, net — 227,944 12,749 — 240,693 Total assets $ 6,044,360 $ 4,896,817 $ 542,125 $ (4,463,566 ) $ 7,019,736 Liabilities and Shareholders’ Equity Trade accounts payable $ — $ 94,036 $ 18,784 $ — $ 112,820 Trade accounts payable - DISH Network — 1,698 — — 1,698 Current portion of long-term debt and capital lease obligations 911,985 41,090 561 — 953,636 Advances from affiliates, net 293,657 279,732 118,612 (691,219 ) 782 Accrued expenses and other 53,529 147,106 47,484 — 248,119 Total current liabilities 1,259,171 563,662 185,441 (691,219 ) 1,317,055 Long-term debt and capital lease obligations, net 2,386,136 176,309 984 — 2,563,429 Deferred tax liabilities, net — 564,100 110 (62,671 ) 501,539 Operating lease liability — 76,682 18,391 — 95,073 Advances from affiliates — 1,862 108,308 (76,887 ) 33,283 Other noncurrent liabilities — 95,232 3,638 — 98,870 Total HSS shareholders’ equity 2,399,053 3,418,970 213,819 (3,632,789 ) 2,399,053 Noncontrolling interests — — 11,434 — 11,434 Total liabilities and shareholders’ equity $ 6,044,360 $ 4,896,817 $ 542,125 $ (4,463,566 ) $ 7,019,736 HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Cash and cash equivalents $ 771,718 $ 46,353 $ 29,752 $ — $ 847,823 Marketable investment securities, at fair value 1,608,123 1,073 — — 1,609,196 Trade accounts receivable and contract assets, net — 128,831 72,265 — 201,096 Trade accounts receivable - DISH Network — 13,240 310 — 13,550 Inventory — 58,607 16,772 — 75,379 Advances to affiliates, net 109,433 536,600 27,174 (569,657 ) 103,550 Other current assets 72 26,331 41,378 (561 ) 67,220 Total current assets 2,489,346 811,035 187,651 (570,218 ) 2,917,814 Property and equipment, net — 2,280,804 301,377 — 2,582,181 Regulatory authorizations — 465,658 — — 465,658 Goodwill — 504,173 — — 504,173 Other intangible assets, net — 43,952 — — 43,952 Investments in unconsolidated entities — 126,369 — — 126,369 Investment in subsidiaries 3,362,589 192,370 — (3,554,959 ) — Advances to affiliates 700 86,280 — (86,980 ) — Deferred tax asset 54,001 — 3,581 (54,001 ) 3,581 Other noncurrent assets, net — 236,675 12,769 — 249,444 Total assets $ 5,906,636 $ 4,747,316 $ 505,378 $ (4,266,158 ) $ 6,893,172 Liabilities and Shareholders’ Equity Trade accounts payable $ — $ 88,342 $ 16,409 $ — $ 104,751 Trade accounts payable - DISH Network — 752 — — 752 Current portion of long-term debt and capital lease obligations 918,916 39,995 666 — 959,577 Advances from affiliates, net 181,926 282,268 106,331 (569,657 ) 868 Accrued expenses and other 43,410 147,055 48,307 (561 ) 238,211 Total current liabilities 1,144,252 558,412 171,713 (570,218 ) 1,304,159 Long-term debt and capital lease obligations, net 2,385,164 187,002 1,038 — 2,573,204 Deferred tax liabilities, net — 541,903 834 (54,001 ) 488,736 Advances from affiliates — — 120,418 (86,980 ) 33,438 Other noncurrent liabilities — 98,661 2,479 — 101,140 Total HSS shareholders’ equity 2,377,220 3,361,338 193,621 (3,554,959 ) 2,377,220 Noncontrolling interests — — 15,275 — 15,275 Total liabilities and shareholders’ equity $ 5,906,636 $ 4,747,316 $ 505,378 $ (4,266,158 ) $ 6,893,172 |
Schedule of consolidating statement of operations and comprehensive income (loss) | HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 81,858 $ 513 $ — $ 82,371 Services and other revenue - other — 347,959 59,183 (8,802 ) 398,340 Equipment revenue — 52,649 9,415 (10,350 ) 51,714 Total revenue — 482,466 69,111 (19,152 ) 532,425 Costs and expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 121,079 39,333 (8,109 ) 152,303 Cost of sales - equipment (exclusive of depreciation and amortization) — 48,499 6,858 (10,350 ) 45,007 Selling, general and administrative expenses — 86,486 16,565 (693 ) 102,358 Research and development expenses — 6,743 145 — 6,888 Depreciation and amortization — 127,823 15,707 — 143,530 Total costs and expenses — 390,630 78,608 (19,152 ) 450,086 Operating income — 91,836 (9,497 ) — 82,339 Other income (expense): Interest income 17,409 926 559 (897 ) 17,997 Interest expense, net of amounts capitalized (56,361 ) (7,632 ) (1,317 ) 897 (64,413 ) Gains (losses) on investments, net — (346 ) — — (346 ) Equity in earnings (losses) of unconsolidated affiliates, net — (1,072 ) — — (1,072 ) Equity in earnings (losses) of subsidiaries, net 52,199 (8,788 ) — (43,411 ) — Other, net 309 (418 ) 154 — 45 Total other income (expense), net 13,556 (17,330 ) (604 ) (43,411 ) (47,789 ) Income (loss) before income taxes 13,556 74,506 (10,101 ) (43,411 ) 34,550 Income tax benefit (provision) 8,670 (22,214 ) 2,026 — (11,518 ) Net income (loss) 22,226 52,292 (8,075 ) (43,411 ) 23,032 Less: Net income attributable to noncontrolling interests — — 806 — 806 Net income (loss) attributable to HSS $ 22,226 $ 52,292 $ (8,881 ) $ (43,411 ) $ 22,226 Comprehensive income (loss): Net income (loss) $ 22,226 $ 52,292 $ (8,075 ) $ (43,411 ) $ 23,032 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — (838 ) — (838 ) Unrealized gains (losses) on available-for-sale securities and other 2,354 — 32 — 2,386 Recognition of realized gains on available-for-sale securities in net income (385 ) — — — (385 ) Equity in other comprehensive income (loss) of subsidiaries, net (806 ) (806 ) — 1,612 — Total other comprehensive income (loss), net of tax 1,163 (806 ) (806 ) 1,612 1,163 Comprehensive income (loss) 23,389 51,486 (8,881 ) (41,799 ) 24,195 Less: Comprehensive income attributable to noncontrolling interests — — 806 — 806 Comprehensive income (loss) attributable to HSS $ 23,389 $ 51,486 $ (9,687 ) $ (41,799 ) $ 23,389 HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Revenue: Services and other revenue - DISH Network $ — $ 100,087 $ 527 $ — $ 100,614 Services and other revenue - other — 312,108 57,076 (9,850 ) 359,334 Equipment revenue — 46,409 4,607 (8,069 ) 42,947 Total revenue — 458,604 62,210 (17,919 ) 502,895 Costs and expenses: Costs of sales - services and other (exclusive of depreciation and amortization) — 119,326 37,726 (9,397 ) 147,655 Cost of sales - equipment (exclusive of depreciation and amortization) — 43,643 3,465 (8,037 ) 39,071 Selling, general and administrative expenses — 83,392 11,743 (485 ) 94,650 Research and development expenses — 7,137 — — 7,137 Depreciation and amortization — 121,339 12,379 — 133,718 Total costs and expenses — 374,837 65,313 (17,919 ) 422,231 Operating income — 83,767 (3,103 ) — 80,664 Other income (expense): Interest income 10,761 316 501 (199 ) 11,379 Interest expense, net of amounts capitalized (57,445 ) (6,956 ) (211 ) 199 (64,413 ) Gains (losses) on investments, net — (392 ) — — (392 ) Equity in earnings of unconsolidated affiliate — 1,492 — — 1,492 Equity in earnings (losses) of subsidiaries, net 56,259 (3,697 ) — (52,562 ) — Other, net 3 (97 ) (519 ) — (613 ) Total other income (expense), net 9,578 (9,334 ) (229 ) (52,562 ) (52,547 ) Income (loss) before income taxes 9,578 74,433 (3,332 ) (52,562 ) 28,117 Income tax benefit (provision) 10,423 (18,084 ) (75 ) — (7,736 ) Net income (loss) 20,001 56,349 (3,407 ) (52,562 ) 20,381 Less: Net income attributable to noncontrolling interests — — 380 — 380 Net income (loss) attributable to HSS $ 20,001 $ 56,349 $ (3,787 ) $ (52,562 ) $ 20,001 Comprehensive income (loss): Net income (loss) $ 20,001 $ 56,349 $ (3,407 ) $ (52,562 ) $ 20,381 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments — — 1,900 — 1,900 Unrealized losses on available-for-sale securities and other (311 ) — (100 ) — (411 ) Equity in other comprehensive income (loss) of subsidiaries, net 2,014 2,014 — (4,028 ) — Total other comprehensive income (loss), net of tax 1,703 2,014 1,800 (4,028 ) 1,489 Comprehensive income (loss) 21,704 58,363 (1,607 ) (56,590 ) 21,870 Less: Comprehensive income attributable to noncontrolling interests — — 166 — 166 Comprehensive income (loss) attributable to HSS $ 21,704 $ 58,363 $ (1,773 ) $ (56,590 ) $ 21,704 |
Schedule of consolidating statement of cash flows | Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2019 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 22,226 $ 52,292 $ (8,075 ) $ (43,411 ) $ 23,032 Adjustments to reconcile net income (loss) to net cash flows from operating activities (48,467 ) 163,032 (10,043 ) 43,411 147,933 Net cash flows from operating activities (26,241 ) 215,324 (18,118 ) — 170,965 Cash flows from investing activities: Purchases of marketable investment securities (240,188 ) — — — (240,188 ) Sales and maturities of marketable investment securities 468,748 (3 ) — — 468,745 Expenditures for property and equipment — (54,207 ) (19,722 ) — (73,929 ) Expenditures for externally marketed software — (7,600 ) — — (7,600 ) Distributions (contributions) and advances from (to) subsidiaries, net 111,020 (32,949 ) — (78,071 ) — Net cash flows from investing activities 339,580 (94,759 ) (19,722 ) (78,071 ) 147,028 Cash flows from financing activities: Contributions (distributions) and advances (to) from parent, net — (111,020 ) 32,949 78,071 — Repayment of debt and finance lease obligations — (9,597 ) (285 ) — (9,882 ) Noncontrolling interest purchase (7,312 ) — — — (7,312 ) Repurchase of the 2019 Senior Secured Notes (8,046 ) — — — (8,046 ) Repayment of in-orbit incentive obligations — (1,573 ) — — (1,573 ) Net cash flows from financing activities (15,358 ) (122,190 ) 32,664 78,071 (26,813 ) Effect of exchange rates on cash and cash equivalents — — (117 ) — (117 ) Net increase (decrease) in cash and cash equivalents, including restricted amounts 297,981 (1,625 ) (5,293 ) — 291,063 Cash and cash equivalents, including restricted amounts, beginning of period 771,718 46,353 30,548 — 848,619 Cash and cash equivalents, including restricted amounts, end of period $ 1,069,699 $ 44,728 $ 25,255 $ — $ 1,139,682 For the Three Months Ended March 31, 2018 (In thousands) HSS Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash flows from operating activities: Net income (loss) $ 20,001 $ 56,349 $ (3,407 ) $ (52,562 ) $ 20,381 Adjustments to reconcile net income (loss) to net cash flows from operating activities (57,327 ) 127,889 (1,102 ) 52,562 122,022 Net cash flows from operating activities (37,326 ) 184,238 (4,509 ) — 142,403 Cash flows from investing activities: Purchases of marketable investment securities (358,543 ) — — — (358,543 ) Sales and maturities of marketable investment securities 197,686 — — — 197,686 Expenditures for property and equipment — (76,974 ) (10,803 ) — (87,777 ) Refunds and other receipts related to capital expenditures — 77,524 — — 77,524 Expenditures for externally marketed software — (7,148 ) — — (7,148 ) Payment for satellite launch services — — (7,125 ) — (7,125 ) Distributions (contributions) and advances from (to) subsidiaries, net 144,984 (18,425 ) — (126,559 ) — Net cash flows from investing activities (15,873 ) (25,023 ) (17,928 ) (126,559 ) (185,383 ) Cash flows from financing activities: Contributions (distributions) and advances (to) from parent, net — (144,984 ) 18,425 126,559 — Repayment of debt and capital lease obligations — (8,608 ) (760 ) — (9,368 ) Capital contribution from EchoStar 7,125 — — — 7,125 Payment of in-orbit incentive obligations — (1,265 ) — — (1,265 ) Net cash flows from financing activities 7,125 (154,857 ) 17,665 126,559 (3,508 ) Effect of exchange rates on cash and cash equivalents — — (249 ) — (249 ) Net increase (decrease) in cash and cash equivalents, including restricted amounts (46,074 ) 4,358 (5,021 ) — (46,737 ) Cash and cash equivalents, including restricted amounts, beginning of period 1,746,878 42,373 34,103 — 1,823,354 Cash and cash equivalents, including restricted amounts, end of period $ 1,700,804 $ 46,731 $ 29,082 $ — $ 1,776,617 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of other significant noncash transactions | For the three months ended March 31, 2019 2018 (In thousands) Increase (decrease) in capital expenditures included in accounts payable, net $ (2,163 ) $ 7,883 |
Schedule of cost of sales and research and development costs | The table below summarizes the research and development costs incurred in connection with customers’ orders included in cost of sales and other expenses we incurred for research and development. For the three months 2019 2018 (In thousands) Cost of sales $ 5,395 $ 6,598 Research and development $ 6,888 $ 7,137 |
Organization and Business Act_2
Organization and Business Activities (Details) - segment | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2017 | Jan. 31, 2017 | |
Related party transactions | |||
Number of business segments | 2 | ||
EchoStar Technologies Business | DISH Network | Share Exchange Agreement | |||
Related party transactions | |||
Ownership interest acquired by related party | 100.00% | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule Of Cumulative Effects Change (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaids and deposits | $ 55,221 | $ 48,653 | $ 48,681 |
Operating lease right-of-use assets | 112,974 | 117,006 | |
Other noncurrent assets, net | 247,967 | 245,753 | 253,025 |
Total assets | 7,019,736 | 7,002,878 | 6,893,172 |
Accrued expenses and other | 68,933 | 83,298 | 68,854 |
Operating lease liabilities | 95,073 | 99,133 | |
Other noncurrent liabilities | 98,870 | 97,269 | 101,140 |
Total liabilities | 4,609,249 | 4,610,383 | 4,500,677 |
Total liabilities and shareholders’ equity | $ 7,019,736 | 7,002,878 | $ 6,893,172 |
Adoption of ASC 842 Increase (Decrease) | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaids and deposits | (28) | ||
Operating lease right-of-use assets | 117,006 | ||
Other noncurrent assets, net | (7,272) | ||
Total assets | 109,706 | ||
Accrued expenses and other | 14,444 | ||
Operating lease liabilities | 99,133 | ||
Other noncurrent liabilities | (3,871) | ||
Total liabilities | 109,706 | ||
Total liabilities and shareholders’ equity | $ 109,706 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 01, 2018 | |
Trade accounts receivable: | ||||
Total trade accounts receivable | $ 172,085 | $ 162,405 | ||
Contract assets | 58,500 | 55,295 | ||
Allowance for doubtful accounts | (14,028) | (16,604) | ||
Total trade accounts receivable and contract assets, net | 216,557 | $ 201,096 | 201,096 | |
Trade accounts receivable - DISH Network | 18,598 | 13,550 | 13,550 | |
Contract liabilities: | ||||
Current | 90,180 | $ 72,249 | 72,249 | |
Noncurrent | 10,778 | 10,133 | ||
Total contract liabilities | 100,958 | 82,382 | ||
Change in Contract with Customer, Asset and Liability [Abstract] | ||||
Revenue recognized | 39,000 | |||
Bad debt expense | 4,000 | $ 5,000 | ||
Revenue, Performance Obligation [Abstract] | ||||
Remaining performance obligation | $ 1,100,000 | |||
Remaining performance obligation percent recognition in next twelve months | 36.00% | |||
Trade accounts receivable | ||||
Trade accounts receivable: | ||||
Total trade accounts receivable | $ 164,310 | 154,415 | ||
Trade accounts receivable - DISH Network | 17,252 | 12,274 | ||
Leasing | ||||
Trade accounts receivable: | ||||
Total trade accounts receivable | 7,775 | 7,990 | ||
Trade accounts receivable - DISH Network | $ 1,346 | $ 1,276 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 532,425 | $ 502,895 |
Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,960 | 26,771 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 384,845 | 321,739 |
Design, development and construction services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,066 | 16,176 |
Revenue from sales and services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 435,871 | 364,686 |
Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 96,554 | 138,209 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 449,918 | 433,804 |
South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 26,863 | 24,488 |
All other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 55,644 | 44,603 |
Corporate and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,829 | 5,324 |
Corporate and Other | Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corporate and Other | Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 322 | 375 |
Corporate and Other | Design, development and construction services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corporate and Other | Revenue from sales and services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 322 | 375 |
Corporate and Other | Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,507 | 4,949 |
Corporate and Other | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,005 | 1,206 |
Corporate and Other | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corporate and Other | All other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,824 | 4,118 |
Hughes | Operating segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 445,337 | 400,818 |
Hughes | Operating segments | Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,960 | 26,771 |
Hughes | Operating segments | Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 380,783 | 313,961 |
Hughes | Operating segments | Design, development and construction services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,066 | 16,176 |
Hughes | Operating segments | Revenue from sales and services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 431,809 | 356,908 |
Hughes | Operating segments | Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 13,528 | 43,910 |
Hughes | Operating segments | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 367,829 | 336,020 |
Hughes | Operating segments | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 26,863 | 24,488 |
Hughes | Operating segments | All other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 50,645 | 40,310 |
ESS | Operating segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 81,259 | 96,753 |
ESS | Operating segments | Equipment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
ESS | Operating segments | Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,740 | 7,403 |
ESS | Operating segments | Design, development and construction services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
ESS | Operating segments | Revenue from sales and services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,740 | 7,403 |
ESS | Operating segments | Lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 77,519 | 89,350 |
ESS | Operating segments | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 81,084 | 96,578 |
ESS | Operating segments | South and Central America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
ESS | Operating segments | All other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 175 | $ 175 |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Right-of-use assets | ||
Operating | $ 112,974 | $ 117,006 |
Finance | 563,350 | |
Total right-of-use assets | 676,324 | |
Current | ||
Operating | 14,444 | |
Finance | 41,651 | |
Noncurrent | ||
Operating | 95,073 | $ 99,133 |
Finance | 177,294 | |
Total lease liabilities | 328,462 | |
Finance lease assets accumulated amortization | $ 490,000 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) and Related Tax Effects (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 2,392,495 | $ 2,299,244 | |
Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 | $ 18,208 | ||
Balance January 1, 2018 | 2,317,452 | ||
Other comprehensive income (loss) before reclassifications | 1,548 | 1,703 | |
Amounts reclassified to net income | (385) | ||
Other comprehensive income (loss) | 1,163 | 1,489 | |
Ending balance | 2,410,487 | 2,347,688 | |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (83,774) | (52,822) | |
Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 | 433 | ||
Balance January 1, 2018 | (52,389) | ||
Other comprehensive income (loss) | 1,163 | 1,703 | |
Ending balance | (82,611) | (50,686) | |
Cumulative Foreign Currency Translation Losses | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (82,800) | (52,251) | |
Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 | 0 | ||
Balance January 1, 2018 | (52,251) | ||
Other comprehensive income (loss) before reclassifications | (838) | 2,114 | |
Amounts reclassified to net income | 0 | ||
Other comprehensive income (loss) | (838) | 2,114 | |
Ending balance | (83,638) | (50,137) | |
Unrealized Gain (Loss) On Available-For-Sale Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (1,092) | (648) | |
Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 | 433 | ||
Balance January 1, 2018 | (215) | ||
Other comprehensive income (loss) before reclassifications | 2,353 | (311) | |
Amounts reclassified to net income | (385) | ||
Other comprehensive income (loss) | 1,968 | (311) | |
Ending balance | 876 | (526) | |
Other | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 118 | 77 | |
Cumulative effect of adoption of the Accounting Standards Update No. 2016-01 | 0 | ||
Balance January 1, 2018 | $ 77 | ||
Other comprehensive income (loss) before reclassifications | 33 | (100) | |
Amounts reclassified to net income | 0 | ||
Other comprehensive income (loss) | 33 | (100) | |
Ending balance | $ 151 | $ (23) |
Leases - Lease Cost, Weighted A
Leases - Lease Cost, Weighted Average Term, Discount Rates and Cash Flows (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease cost | |
Operating lease cost | $ 5,123 |
Finance lease cost | |
Amortization of right-of-use assets | 20,666 |
Interest on lease liabilities | 6,018 |
Short-term lease cost | 120 |
Variable lease cost | 1,918 |
Total lease cost | $ 33,845 |
Weighted average remaining lease term | |
Finance leases | 4 years 9 months 25 days |
Operating leases | 10 years 6 months 14 days |
Weighted average discount rate | |
Finance leases | 10.75% |
Operating leases | 6.19% |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | $ 4,516 |
Operating cash flows from financing leases | 6,018 |
Financing cash flows from finance leases | 9,758 |
Right-of-use asset obtained in exchange for lease labilities | $ 1,000 |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating leases | ||
2019 | $ 14,757 | |
2020 | 18,339 | |
2021 | 15,781 | |
2022 | 13,918 | |
2023 | 13,337 | |
After 2023 | 75,274 | |
Total lease payments | 151,406 | |
Less interest | (41,889) | |
Present value of lease liabilities | 109,517 | |
Finance leases | ||
2019 | 47,400 | |
2020 | 63,266 | |
2021 | 59,692 | |
2022 | 41,040 | |
2023 | 40,942 | |
After 2023 | 30,707 | |
Total lease payments | 283,047 | |
Less interest | (64,102) | |
Present value of lease liabilities | 218,945 | |
Total | ||
2019 | 62,157 | |
2020 | 81,605 | |
2021 | 75,473 | |
2022 | 54,958 | |
2023 | 54,279 | |
After 2023 | 105,981 | |
Total lease payments | 434,453 | |
Less interest | (105,991) | |
Total lease liabilities | $ 328,462 | |
Future Minimum Rental Payments Under Non-Cancelable Operating Leases | ||
2019 | $ 17,587 | |
2020 | 16,957 | |
2021 | 13,400 | |
2022 | 9,730 | |
2023 | 8,427 | |
Thereafter | 21,886 | |
Total | $ 87,987 |
Leases - Lease Income By Lease
Leases - Lease Income By Lease Type (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Sales-type lease revenue: | |
Revenue at lease commencement | $ 688 |
Interest income | 252 |
Operating lease revenue | 95,614 |
Lease revenue | 96,554 |
Sales-type leases receivable | $ 3,000 |
Leases - Property Plant and Equ
Leases - Property Plant and Equipment Subject to Operating Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property and equipment | |||
Cost | $ 5,445,632 | $ 5,380,430 | |
Accumulated depreciation | 2,929,495 | 2,798,249 | |
Depreciation expense | 134,018 | $ 124,553 | |
Property Subject To Operating Lease | |||
Property and equipment | |||
Cost | 2,874,959 | ||
Accumulated depreciation | 1,779,341 | ||
Depreciation expense | 82,530 | ||
Customer premises equipment | Property Subject To Operating Lease | |||
Property and equipment | |||
Cost | 1,291,237 | ||
Accumulated depreciation | 925,721 | ||
Depreciation expense | 49,712 | ||
Satellites | |||
Property and equipment | |||
Cost | 2,268,862 | $ 2,268,862 | |
Depreciation expense | 64,362 | $ 59,033 | |
Satellites | Property Subject To Operating Lease | |||
Property and equipment | |||
Cost | 1,552,245 | ||
Accumulated depreciation | 847,160 | ||
Depreciation expense | 32,601 | ||
Real estate | Property Subject To Operating Lease | |||
Property and equipment | |||
Cost | 31,477 | ||
Accumulated depreciation | 6,460 | ||
Depreciation expense | $ 217 |
Marketable Investment Securit_3
Marketable Investment Securities - Schedule of Marketable Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Marketable investment securities and other investments | ||
Total debt securities | $ 1,381,687 | $ 1,608,123 |
Equity securities | 342 | 1,073 |
Total marketable investment securities | 1,382,029 | 1,609,196 |
Corporate bonds | ||
Marketable investment securities and other investments | ||
Total debt securities | 1,047,428 | 1,234,017 |
Other debt securities | ||
Marketable investment securities and other investments | ||
Total debt securities | $ 334,259 | $ 374,106 |
Marketable Investment Securit_4
Marketable Investment Securities - Schedule of Unrealized Gains (Losses) on Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | $ 1,380,811 | $ 1,609,216 |
Unrealized Gains | 968 | 230 |
Unrealized Losses | (92) | (1,323) |
Total debt securities | 1,381,687 | 1,608,123 |
Corporate bonds | ||
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | 1,046,539 | 1,235,110 |
Unrealized Gains | 966 | 230 |
Unrealized Losses | (77) | (1,323) |
Total debt securities | 1,047,428 | 1,234,017 |
Other debt securities | ||
Unrealized Gains (Losses) on Available-For-Sale Securities | ||
Amortized Cost | 334,272 | 374,106 |
Unrealized Gains | 2 | 0 |
Unrealized Losses | (15) | 0 |
Total debt securities | $ 334,259 | $ 374,106 |
Marketable Investment Securit_5
Marketable Investment Securities - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Gain (Loss) on Securities [Line Items] | ||
Available-for-sale securities with contractual maturities of one year of less | $ 1,200,000,000 | |
Available-for-sale securities with contractual maturity of greater than one year | 144,000,000 | |
Proceeds from sale of available-for-sale securities | 312,000,000 | $ 0 |
Realized gain on available-for-sale security | 400,000 | 0 |
Gain (Loss) on Investments | Equity securities | ||
Gain (Loss) on Securities [Line Items] | ||
Loss on equity securities | $ 700,000 | $ 400,000 |
Marketable Investment Securit_6
Marketable Investment Securities - Fair Value of Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair value of marketable securities | ||
Total debt securities | $ 1,381,687 | $ 1,608,123 |
Equity securities | 342 | 1,073 |
Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 1,047,428 | 1,234,017 |
Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | 334,259 | 374,106 |
Fair value measurements on recurring basis | ||
Fair value of marketable securities | ||
Total debt securities | 1,381,687 | 1,608,123 |
Equity securities | 342 | 1,073 |
Total marketable investment securities | 1,382,029 | 1,609,196 |
Fair value measurements on recurring basis | Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 1,047,428 | 1,234,017 |
Fair value measurements on recurring basis | Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | 334,259 | 374,106 |
Fair value measurements on recurring basis | Level 1 | ||
Fair value of marketable securities | ||
Total debt securities | 0 | 0 |
Equity securities | 342 | 1,073 |
Total marketable investment securities | 342 | 1,073 |
Fair value measurements on recurring basis | Level 1 | Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 0 | 0 |
Fair value measurements on recurring basis | Level 1 | Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | 0 | 0 |
Fair value measurements on recurring basis | Level 2 | ||
Fair value of marketable securities | ||
Total debt securities | 1,381,687 | 1,608,123 |
Equity securities | 0 | 0 |
Total marketable investment securities | 1,381,687 | 1,608,123 |
Fair value measurements on recurring basis | Level 2 | Corporate bonds | ||
Fair value of marketable securities | ||
Total debt securities | 1,047,428 | 1,234,017 |
Fair value measurements on recurring basis | Level 2 | Other debt securities | ||
Fair value of marketable securities | ||
Total debt securities | $ 334,259 | $ 374,106 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory, Net [Abstract] | ||
Raw materials | $ 6,473 | $ 4,856 |
Work-in-process | 12,093 | 13,901 |
Finished goods | 57,548 | 56,622 |
Total inventory | $ 76,114 | $ 75,379 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | ||
Total property and equipment | $ 5,445,632 | $ 5,380,430 |
Accumulated depreciation | (2,929,495) | (2,798,249) |
Property and equipment, net | 2,516,137 | 2,582,181 |
Land | ||
Property and equipment | ||
Total property and equipment | 13,375 | 13,401 |
Buildings and improvements | ||
Property and equipment | ||
Total property and equipment | $ 117,270 | 117,564 |
Buildings and improvements | Minimum | ||
Property and equipment | ||
Depreciable Life | 1 year | |
Buildings and improvements | Maximum | ||
Property and equipment | ||
Depreciable Life | 40 years | |
Furniture, fixtures, equipment and other | ||
Property and equipment | ||
Total property and equipment | $ 754,902 | 741,429 |
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 premises equipment | ||
Property and equipment | ||
Total property and equipment | $ 1,210,850 | 1,159,977 |
Customer premises equipment | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Customer premises equipment | Maximum | ||
Property and equipment | ||
Depreciable Life | 4 years | |
Satellites - owned | ||
Property and equipment | ||
Total property and equipment | $ 2,268,862 | 2,268,862 |
Satellites - owned | Minimum | ||
Property and equipment | ||
Depreciable Life | 2 years | |
Satellites - owned | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Satellites - acquired under finance leases | ||
Property and equipment | ||
Total property and equipment | $ 1,050,360 | |
Satellites - acquired under finance leases | ||
Property and equipment | ||
Total property and equipment | 1,051,110 | |
Satellites - acquired under finance leases | Minimum | ||
Property and equipment | ||
Depreciable Life | 10 years | |
Satellites - acquired under finance leases | Maximum | ||
Property and equipment | ||
Depreciable Life | 15 years | |
Construction in progress | ||
Property and equipment | ||
Total property and equipment | $ 30,013 | $ 28,087 |
Property and Equipment - Constr
Property and Equipment - Construction in Progress (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property and equipment | ||
Construction in progress | $ 30,013 | $ 28,087 |
Progress amounts for satellite construction | ||
Property and equipment | ||
Construction in progress | 393 | 246 |
Satellite related equipment | ||
Property and equipment | ||
Construction in progress | 15,639 | 13,001 |
Other | ||
Property and equipment | ||
Construction in progress | $ 13,981 | $ 14,840 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)satellitemi | Mar. 31, 2018USD ($) | |
Property and equipment | ||
Interest costs capitalized | $ 100 | $ 2,000 |
Finance lease amortization expense | 20,666 | |
Satellites | ||
Property and equipment | ||
Finance lease amortization expense | $ 21,000 | |
Capital leases amortization expense | $ 18,000 | |
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 15 | |
Miles above the equator | mi | 22,300 | |
Satellites, Owned | ||
Property and equipment | ||
Number of satellites utilized in geostationary orbit approximately 22,300 miles above the equator | satellite | 10 | |
Satellites, Leased | ||
Property and equipment | ||
Number of satellites utilized under capital lease | satellite | 5 |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Depreciation expense | ||
Total depreciation expense | $ 134,018 | $ 124,553 |
Buildings and improvements | ||
Depreciation expense | ||
Total depreciation expense | 3,110 | 1,298 |
Furniture, fixtures, equipment and other | ||
Depreciation expense | ||
Total depreciation expense | 20,354 | 20,774 |
Customer premises equipment | ||
Depreciation expense | ||
Total depreciation expense | 46,192 | 43,448 |
Satellites | ||
Depreciation expense | ||
Total depreciation expense | $ 64,362 | $ 59,033 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset accumulated amortization | $ 311 | $ 307 |
Investment in Unconsolidated _3
Investment in Unconsolidated Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Equity method | $ 109,946 | $ 110,931 |
Other equity investments without a readily determinable fair value | 15,438 | 15,438 |
Total investments in unconsolidated entities | $ 125,384 | $ 126,369 |
Long-Term Debt and Finance Le_3
Long-Term Debt and Finance Lease Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Debt and Capital Lease Obligations | |||
Carrying amount | $ 3,298,120 | $ 3,304,079 | |
Finance lease obligations | 218,945 | ||
Finance lease obligations | 228,702 | ||
Total debt and finance lease obligations | 3,517,065 | ||
Total debt and finance lease obligations | 3,532,781 | ||
Less: Current portion | (953,636) | (959,577) | |
Long-term debt and finance lease obligations, net | 2,563,429 | 2,573,204 | |
Fair Value | $ 3,379,807 | $ 3,259,816 | |
6 1/2% Senior Secured Notes due 2019 | |||
Debt and Capital Lease Obligations | |||
Interest rate | 6.50% | 6.50% | 6.50% |
Effective Interest Rate | 6.959% | ||
Carrying Amount | $ 912,857 | $ 920,836 | |
Debt repurchased | 8,000 | ||
Fair Value | $ 919,119 | $ 932,696 | |
5 1/4% Senior Secured Notes due 2026 | |||
Debt and Capital Lease Obligations | |||
Interest rate | 5.25% | 5.25% | |
Effective Interest Rate | 5.32% | ||
Carrying Amount | $ 750,000 | $ 750,000 | |
Fair Value | $ 749,903 | $ 695,865 | |
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 | $ 969,417 | $ 934,902 | |
6 5/8% Senior Unsecured Notes due 2026 | |||
Debt and Capital Lease Obligations | |||
Interest rate | 6.625% | 6.625% | |
Effective Interest Rate | 6.688% | ||
Carrying Amount | $ 750,000 | $ 750,000 | |
Fair Value | 741,368 | 696,353 | |
Unamortized debt issuance costs | |||
Debt and Capital Lease Obligations | |||
Less: Unamortized debt issuance costs | $ (14,737) | $ (16,757) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 11,518 | $ 7,736 |
Effective income tax rate | 33.30% | 27.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Feb. 13, 2018claim | Aug. 07, 2017USD ($) | Feb. 14, 2017patent | Nov. 30, 2017USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Realtime Data LLC | ||||||
Loss Contingency [Abstract] | ||||||
Patents allegedly infringed | patent | 4 | |||||
Subsidiaries | Hughes Network Systems | Elbit | ||||||
Loss Contingency [Abstract] | ||||||
Damages awarded | $ 21 | $ 29 | ||||
Attorney's fees sought | $ 14 | |||||
Loss Contingency Accrual | $ 3 | $ 3 | ||||
Patent 728 | Realtime Data LLC | ||||||
Loss Contingency [Abstract] | ||||||
Pending claims, validity challenged | claim | 1 | |||||
Satellite Related Obligation | ||||||
Other Commitments [Line Items] | ||||||
Satellite-related obligations | $ 472 | $ 482 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of business segments | segment | 2 | |
Segment Reporting | ||
Revenues | $ 532,425 | $ 502,895 |
EBITDA | 223,690 | 214,489 |
Capital expenditures | 73,929 | 10,253 |
Interest income and expense, net | (46,416) | (53,034) |
Depreciation and amortization | (143,530) | (133,718) |
Net income attributable to noncontrolling interests | 806 | 380 |
Income before income taxes | 34,550 | 28,117 |
Hughes | ||
Segment Reporting | ||
Revenues | 445,337 | 400,459 |
Hughes | Intersegment Elimination | ||
Segment Reporting | ||
Revenues | 0 | 359 |
Hughes | Operating segments | ||
Segment Reporting | ||
Revenues | 445,337 | 400,818 |
EBITDA | 161,132 | 136,713 |
Capital expenditures | 73,821 | 87,291 |
ESS | ||
Segment Reporting | ||
Revenues | 80,553 | 96,223 |
ESS | Intersegment Elimination | ||
Segment Reporting | ||
Revenues | 706 | 530 |
ESS | Operating segments | ||
Segment Reporting | ||
Revenues | 81,259 | 96,753 |
EBITDA | 68,717 | 84,150 |
Capital expenditures | 108 | (77,038) |
Corporate and Other | ||
Segment Reporting | ||
Revenues | 6,535 | (889) |
Corporate and Other | Intersegment Elimination | ||
Segment Reporting | ||
Revenues | (706) | 5,324 |
Corporate and Other | Corporate and Other | ||
Segment Reporting | ||
Revenues | 5,829 | 6,213 |
EBITDA | (6,159) | (6,374) |
Capital expenditures | $ 0 | $ 0 |
Related Party Transactions - Ag
Related Party Transactions - Agreements (Details) $ in Millions | Feb. 01, 2017USD ($) | Mar. 02, 2014USD ($)satellite | Feb. 28, 2022 | Feb. 28, 2019 | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Feb. 28, 2017 | Jul. 31, 2016 | Aug. 31, 2015 | Dec. 31, 2012 | Oct. 31, 2012 | Mar. 31, 2019USD ($)transponder | Mar. 31, 2018USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2017 | May 31, 2017 | Jan. 31, 2017 | Feb. 28, 2013transponder | May 31, 2012 | Mar. 31, 2012 | Sep. 30, 2010USD ($) | Dec. 31, 2009 | Sep. 30, 2009transponder | Nov. 30, 2008transponder |
Hughes Equipment And Service Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 365 days | ||||||||||||||||||||||||
Ciel | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Lessee, Operating Lease, Term of Contract | 10 years | ||||||||||||||||||||||||
EchoStar | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Required minimum notice for termination of individual service | 30 days | ||||||||||||||||||||||||
Expense recorded for services provided | $ 3 | $ 4 | |||||||||||||||||||||||
EchoStar | DBS Transponder Lease | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Revenue from related parties | 6 | 6 | |||||||||||||||||||||||
Receivables from related parties | 6 | ||||||||||||||||||||||||
EchoStar | Construction Management Services | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Expense recorded for services provided | 0.4 | $ 0.3 | |||||||||||||||||||||||
EchoStar Mobile Limited | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Interest rate on converted receivables loan | 5.00% | ||||||||||||||||||||||||
Revenue from related parties | $ 5 | $ 4 | |||||||||||||||||||||||
DISH Network | Satellite and Tracking Stock Transaction | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Proceeds from issuance of Hughes Retail Preferred Tracking Stock | $ 11 | ||||||||||||||||||||||||
DISH Network | Satellite and Tracking Stock Transaction | Hughes Retail Preferred Tracking Stock | Hughes Retail Group | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Percentage of economic interest in the Hughes Retail Group | 80.00% | ||||||||||||||||||||||||
DISH Network | TT&C Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 12 months | ||||||||||||||||||||||||
DISH Network | TerreStar Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 21 days | ||||||||||||||||||||||||
Related Party Transactions, Required Minimum Notice Period for Termination of Agreement | 90 days | ||||||||||||||||||||||||
DISH Network | Hughes Broadband Distribution Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||||||
Related Party Transactions, Required Minimum Notice Period for Termination of Agreement | 180 days | ||||||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||||||
DISH Network | DBSD North America Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 21 days | 120 days | |||||||||||||||||||||||
Ownership interest acquired by related party | 100.00% | ||||||||||||||||||||||||
DISH Network | Hughes Equipment And Service Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 180 days | ||||||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||||||
DISH Network | RUS Implementation Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Grants receivable | $ 14 | ||||||||||||||||||||||||
DISH Network | Amended and Restated Professional Services Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Required minimum notice for termination of individual service | 30 days | ||||||||||||||||||||||||
Related Party Transactions, Required Minimum Notice Period for Termination of Agreement | 60 days | ||||||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||||||
DISH Network | Collocation and Antenna Space Agreements | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Term of renewal option | 4 years | 3 years | |||||||||||||||||||||||
Required minimum notice period for termination of agreement by the reporting entity | 180 days | ||||||||||||||||||||||||
DISH Network | Collocation and Antenna Space Agreements | Minimum | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Renewal notice required by reporting entity | 90 days | ||||||||||||||||||||||||
DISH Network | Collocation and Antenna Space Agreements | Maximum | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Renewal notice required by reporting entity | 120 days | ||||||||||||||||||||||||
DISH Network | Hughes Broadband Master Services Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Agreement term | 5 years | ||||||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||||||
Sales Commissions and Fees | $ 5 | $ 9 | |||||||||||||||||||||||
DISH Network | EchoStar And Hughes Satellite Systems Corporation | Satellite and Tracking Stock Transaction | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Number of satellites transferred | satellite | 5 | ||||||||||||||||||||||||
DISH Network | Subsequent Event | DBSD North America Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Minimum required notice period for termination of agreement by related party | 180 days | ||||||||||||||||||||||||
Related-party advances | Minimum | One-year LIBOR | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Annual rates | 1.00% | ||||||||||||||||||||||||
Related-party advances | Maximum | One-year LIBOR | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Annual rates | 3.00% | ||||||||||||||||||||||||
Related Party Transactions, Lessee, Operating Lease, Real Estate | DISH Network | American Fork Occupancy License Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Lessee, Operating Lease, Term of Contract | 5 years | ||||||||||||||||||||||||
Related Party Transactions, Lessor, Operating Lease, Real Estate | DISH Network | Cheyenne Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Required minimum notice period for termination of agreement after lease extension | 30 days | ||||||||||||||||||||||||
EchoStar XIX | EchoStar | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Contribution of noncash net assets pursuant to Share Exchange Agreement | $ 514 | ||||||||||||||||||||||||
Deferred tax liabilities, deferred expense | 165 | ||||||||||||||||||||||||
EchoStar XXIII | Other noncurrent assets | EOC | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Transfer of launch contracts from (to) EchoStar | $ (62) | ||||||||||||||||||||||||
EchoStar XXI | Other noncurrent assets | EOC | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Transfer of launch contracts from (to) EchoStar | $ (83) | ||||||||||||||||||||||||
EchoStar XVI | DISH Network | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Term of contract | 10 years | ||||||||||||||||||||||||
Renewal term | 1 year | 5 years | |||||||||||||||||||||||
Agreement term from commencement of service date | 4 years | ||||||||||||||||||||||||
Renewal option, reduction | 1 year | ||||||||||||||||||||||||
Additional term of renewal option | 5 years | ||||||||||||||||||||||||
Nimiq5 | Telesat | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Lessee, Operating Lease, Term of Contract | 15 years | ||||||||||||||||||||||||
Number of DBS transponders available to receive services | transponder | 32 | ||||||||||||||||||||||||
Nimiq5 | DISH Network | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Number of DBS transponders available to receive services | transponder | 32 | ||||||||||||||||||||||||
QuetzSat-1 | SES Latin America | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Lessee, Operating Lease, Term of Contract | 10 years | ||||||||||||||||||||||||
Related Party Transactions Number of DBS Transponders Expected to Receive Services Per Agreement | transponder | 32 | ||||||||||||||||||||||||
QuetzSat-1 | EchoStar | DBS Transponder Lease | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Number of DBS transponders currently receiving services | transponder | 8 | ||||||||||||||||||||||||
QuetzSat-1 | DISH Network | Satellite Capacity Lease Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Number of DBS transponders currently receiving services | transponder | 24 | ||||||||||||||||||||||||
Number of DBS transponders receiving services from related party | transponder | 5 | ||||||||||||||||||||||||
Additional Paid-In Capital | EchoStar XIX | EchoStar | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Stock-based compensation | $ 349 | ||||||||||||||||||||||||
EchoStar Technologies Business | DISH Network | Share Exchange Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Ownership interest acquired by related party | 100.00% | 100.00% | |||||||||||||||||||||||
Scenario, Forecast | DISH Network | DBSD North America Agreement | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Automatic renewal period | 5 years | ||||||||||||||||||||||||
6 1/2% Senior Secured Notes due 2019 | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Interest rate | 6.50% | 6.50% | 6.50% | ||||||||||||||||||||||
5 1/4% Senior Secured Notes due 2026 | |||||||||||||||||||||||||
Related party transactions | |||||||||||||||||||||||||
Interest rate | 5.25% | 5.25% |
Related Party Transactions - Ot
Related Party Transactions - Other Agreements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Maxar Technologies Inc. [Member] | |||
Related party transactions | |||
Payable to related party | $ 36,000,000 | ||
Hughes Systique | |||
Related party transactions | |||
Ownership interest in related party (as a percent) | 43.00% | ||
Ownership interest percentage by related party | 25.00% | ||
Deluxe | |||
Related party transactions | |||
Ownership percentage | 50.00% | ||
Revenue from related parties | $ 1,000,000 | $ 1,000,000 | |
Receivables from related parties | $ 1,000,000 | 1,000,000 | |
AsiaSat | |||
Related party transactions | |||
Expense recorded for services provided | 0 | ||
Global IP Revenue | |||
Related party transactions | |||
Revenue from related parties | 0 | $ 400,000 | |
Receivables from related parties | 7,500,000 | 7,500,000 | |
TerreStar Solutions, Inc. | |||
Related party transactions | |||
Revenue from related parties | 5,000,000 | ||
Receivables from related parties | 2,000,000 | $ 2,000,000 | |
Investment nonvoting interest ownership percentage(at least) | 15.00% | ||
Broadband Connectivity Solutions | |||
Related party transactions | |||
Revenue from related parties | $ 2,000,000 | ||
Receivables from related parties | $ 3,000,000 | $ 3,000,000 | |
Broadband Connectivity Solutions | |||
Related party transactions | |||
Ownership percentage | 20.00% | ||
Payments to acquire equity method investments | $ 100,000,000 |
Supplemental Guarantor and No_3
Supplemental Guarantor and Non-Guarantor Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Assets | ||||
Cash and cash equivalents | $ 1,138,711 | $ 847,823 | ||
Marketable investment securities, at fair value | 1,382,029 | 1,609,196 | ||
Trade accounts receivable and contract assets | 216,557 | 201,096 | $ 201,096 | |
Trade accounts receivable - DISH Network | 18,598 | 13,550 | $ 13,550 | |
Inventory | 76,114 | 75,379 | ||
Advances to affiliates, net | 80,911 | 103,550 | ||
Other current assets | 74,272 | 67,220 | ||
Total current assets | 2,987,192 | 2,917,814 | ||
Property and equipment, net | 2,516,137 | 2,582,181 | ||
Regulatory authorizations | 465,658 | 465,658 | ||
Goodwill | 504,173 | 504,173 | ||
Other intangible assets, net | 40,294 | 43,952 | ||
Investments in unconsolidated entities | 125,384 | 126,369 | ||
Investment in subsidiaries | 0 | 0 | ||
Advances to affiliates | 19,957 | 0 | ||
Operating lease right-of-use assets | 112,974 | $ 117,006 | ||
Deferred tax asset | 7,274 | 3,581 | ||
Other noncurrent assets, net | 240,693 | 249,444 | ||
Total assets | 7,019,736 | 7,002,878 | 6,893,172 | |
Liabilities and Shareholders’ Equity | ||||
Trade accounts payable | 112,820 | 104,751 | ||
Trade accounts payable - DISH Network | 1,698 | 752 | ||
Current portion of long-term debt and finance lease obligations | 953,636 | 959,577 | ||
Advances from affiliates, net | 782 | 868 | ||
Accrued expenses and other | 248,119 | 238,211 | ||
Total current liabilities | 1,317,055 | 1,304,159 | ||
Long-term debt and finance lease obligations, net | 2,563,429 | 2,573,204 | ||
Deferred tax liabilities, net | 501,539 | 488,736 | ||
Operating lease liabilities | 95,073 | 99,133 | ||
Advances from affiliates, net | 33,283 | 33,438 | ||
Other noncurrent liabilities | 98,870 | 101,140 | ||
Total HSS shareholders’ equity | 2,399,053 | 2,377,220 | ||
Noncontrolling interests | 11,434 | 15,275 | ||
Total liabilities and shareholders’ equity | 7,019,736 | $ 7,002,878 | 6,893,172 | |
Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Marketable investment securities, at fair value | 0 | 0 | ||
Trade accounts receivable and contract assets | 0 | 0 | ||
Trade accounts receivable - DISH Network | 0 | 0 | ||
Inventory | 0 | 0 | ||
Advances to affiliates, net | (691,219) | (569,657) | ||
Other current assets | 0 | (561) | ||
Total current assets | (691,219) | (570,218) | ||
Property and equipment, net | 0 | 0 | ||
Regulatory authorizations | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Investments in unconsolidated entities | 0 | 0 | ||
Investment in subsidiaries | (3,632,789) | (3,554,959) | ||
Advances to affiliates | (76,887) | (86,980) | ||
Operating lease right-of-use assets | 0 | |||
Deferred tax asset | (62,671) | (54,001) | ||
Other noncurrent assets, net | 0 | 0 | ||
Total assets | (4,463,566) | (4,266,158) | ||
Liabilities and Shareholders’ Equity | ||||
Trade accounts payable | 0 | 0 | ||
Trade accounts payable - DISH Network | 0 | 0 | ||
Current portion of long-term debt and finance lease obligations | 0 | 0 | ||
Advances from affiliates, net | (691,219) | (569,657) | ||
Accrued expenses and other | 0 | (561) | ||
Total current liabilities | (691,219) | (570,218) | ||
Long-term debt and finance lease obligations, net | 0 | 0 | ||
Deferred tax liabilities, net | (62,671) | (54,001) | ||
Operating lease liabilities | 0 | |||
Advances from affiliates, net | (76,887) | (86,980) | ||
Other noncurrent liabilities | 0 | 0 | ||
Total HSS shareholders’ equity | (3,632,789) | (3,554,959) | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | (4,463,566) | (4,266,158) | ||
HSS | ||||
Assets | ||||
Cash and cash equivalents | 1,069,699 | 771,718 | ||
Marketable investment securities, at fair value | 1,381,688 | 1,608,123 | ||
Trade accounts receivable and contract assets | 0 | 0 | ||
Trade accounts receivable - DISH Network | 0 | 0 | ||
Inventory | 0 | 0 | ||
Advances to affiliates, net | 109,433 | 109,433 | ||
Other current assets | 42 | 72 | ||
Total current assets | 2,560,862 | 2,489,346 | ||
Property and equipment, net | 0 | 0 | ||
Regulatory authorizations | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Investments in unconsolidated entities | 0 | 0 | ||
Investment in subsidiaries | 3,420,127 | 3,362,589 | ||
Advances to affiliates | 700 | 700 | ||
Operating lease right-of-use assets | 0 | |||
Deferred tax asset | 62,671 | 54,001 | ||
Other noncurrent assets, net | 0 | 0 | ||
Total assets | 6,044,360 | 5,906,636 | ||
Liabilities and Shareholders’ Equity | ||||
Trade accounts payable | 0 | 0 | ||
Trade accounts payable - DISH Network | 0 | 0 | ||
Current portion of long-term debt and finance lease obligations | 911,985 | 918,916 | ||
Advances from affiliates, net | 293,657 | 181,926 | ||
Accrued expenses and other | 53,529 | 43,410 | ||
Total current liabilities | 1,259,171 | 1,144,252 | ||
Long-term debt and finance lease obligations, net | 2,386,136 | 2,385,164 | ||
Deferred tax liabilities, net | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Advances from affiliates, net | 0 | 0 | ||
Other noncurrent liabilities | 0 | 0 | ||
Total HSS shareholders’ equity | 2,399,053 | 2,377,220 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | 6,044,360 | 5,906,636 | ||
Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 44,728 | 46,353 | ||
Marketable investment securities, at fair value | 341 | 1,073 | ||
Trade accounts receivable and contract assets | 139,445 | 128,831 | ||
Trade accounts receivable - DISH Network | 18,085 | 13,240 | ||
Inventory | 56,205 | 58,607 | ||
Advances to affiliates, net | 652,379 | 536,600 | ||
Other current assets | 28,048 | 26,331 | ||
Total current assets | 939,231 | 811,035 | ||
Property and equipment, net | 2,214,920 | 2,280,804 | ||
Regulatory authorizations | 465,658 | 465,658 | ||
Goodwill | 504,173 | 504,173 | ||
Other intangible assets, net | 40,294 | 43,952 | ||
Investments in unconsolidated entities | 125,384 | 126,369 | ||
Investment in subsidiaries | 212,662 | 192,370 | ||
Advances to affiliates | 76,923 | 86,280 | ||
Operating lease right-of-use assets | 89,628 | |||
Deferred tax asset | 0 | 0 | ||
Other noncurrent assets, net | 227,944 | 236,675 | ||
Total assets | 4,896,817 | 4,747,316 | ||
Liabilities and Shareholders’ Equity | ||||
Trade accounts payable | 94,036 | 88,342 | ||
Trade accounts payable - DISH Network | 1,698 | 752 | ||
Current portion of long-term debt and finance lease obligations | 41,090 | 39,995 | ||
Advances from affiliates, net | 279,732 | 282,268 | ||
Accrued expenses and other | 147,106 | 147,055 | ||
Total current liabilities | 563,662 | 558,412 | ||
Long-term debt and finance lease obligations, net | 176,309 | 187,002 | ||
Deferred tax liabilities, net | 564,100 | 541,903 | ||
Operating lease liabilities | 76,682 | |||
Advances from affiliates, net | 1,862 | 0 | ||
Other noncurrent liabilities | 95,232 | 98,661 | ||
Total HSS shareholders’ equity | 3,418,970 | 3,361,338 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and shareholders’ equity | 4,896,817 | 4,747,316 | ||
Non-Guarantor Subsidiaries | ||||
Assets | ||||
Cash and cash equivalents | 24,284 | 29,752 | ||
Marketable investment securities, at fair value | 0 | 0 | ||
Trade accounts receivable and contract assets | 77,112 | 72,265 | ||
Trade accounts receivable - DISH Network | 513 | 310 | ||
Inventory | 19,909 | 16,772 | ||
Advances to affiliates, net | 10,318 | 27,174 | ||
Other current assets | 46,182 | 41,378 | ||
Total current assets | 178,318 | 187,651 | ||
Property and equipment, net | 301,217 | 301,377 | ||
Regulatory authorizations | 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 | 19,221 | 0 | ||
Operating lease right-of-use assets | 23,346 | |||
Deferred tax asset | 7,274 | 3,581 | ||
Other noncurrent assets, net | 12,749 | 12,769 | ||
Total assets | 542,125 | 505,378 | ||
Liabilities and Shareholders’ Equity | ||||
Trade accounts payable | 18,784 | 16,409 | ||
Trade accounts payable - DISH Network | 0 | 0 | ||
Current portion of long-term debt and finance lease obligations | 561 | 666 | ||
Advances from affiliates, net | 118,612 | 106,331 | ||
Accrued expenses and other | 47,484 | 48,307 | ||
Total current liabilities | 185,441 | 171,713 | ||
Long-term debt and finance lease obligations, net | 984 | 1,038 | ||
Deferred tax liabilities, net | 110 | 834 | ||
Operating lease liabilities | 18,391 | |||
Advances from affiliates, net | 108,308 | 120,418 | ||
Other noncurrent liabilities | 3,638 | 2,479 | ||
Total HSS shareholders’ equity | 213,819 | 193,621 | ||
Noncontrolling interests | 11,434 | 15,275 | ||
Total liabilities and shareholders’ equity | $ 542,125 | $ 505,378 |
Supplemental Guarantor and No_4
Supplemental Guarantor and Non-Guarantor Financial Information - Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Revenue | $ 532,425 | $ 502,895 |
Costs and expenses: | ||
Selling, general and administrative expenses | 102,358 | 94,650 |
Research and development expenses | 6,888 | 7,137 |
Depreciation and amortization | 143,530 | 133,718 |
Total costs and expenses | 450,086 | 422,231 |
Operating income | 82,339 | 80,664 |
Other income (expense): | ||
Interest income | 17,997 | 11,379 |
Interest expense, net of amounts capitalized | (64,413) | (64,413) |
Gains (losses) on investments, net | (346) | (392) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,072) | 1,492 |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 |
Other, net | 45 | (613) |
Total other expense, net | (47,789) | (52,547) |
Income before income taxes | 34,550 | 28,117 |
Income tax benefit (provision) | (11,518) | (7,736) |
Net income (loss) | 23,032 | 20,381 |
Less: Net income attributable to noncontrolling interests | 806 | 380 |
Net income attributable to HSS | 22,226 | 20,001 |
Comprehensive Income (Loss): | ||
Net income (loss) | 23,032 | 20,381 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | (838) | 1,900 |
Unrealized gains (losses) on available-for-sale securities and other | 2,386 | (411) |
Realized gains on available-for-sale securities | (385) | 0 |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Other comprehensive income (loss) | 1,163 | 1,489 |
Comprehensive income | 24,195 | 21,870 |
Less: Comprehensive income attributable to noncontrolling interests | 806 | 166 |
Comprehensive income attributable to HSS | 23,389 | 21,704 |
Eliminations | ||
Revenue: | ||
Revenue | (19,152) | (17,919) |
Costs and expenses: | ||
Selling, general and administrative expenses | (693) | (485) |
Research and development expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total costs and expenses | (19,152) | (17,919) |
Operating income | 0 | 0 |
Other income (expense): | ||
Interest income | (897) | (199) |
Interest expense, net of amounts capitalized | 897 | 199 |
Gains (losses) on investments, net | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | (43,411) | (52,562) |
Other, net | 0 | 0 |
Total other expense, net | (43,411) | (52,562) |
Income before income taxes | (43,411) | (52,562) |
Income tax benefit (provision) | 0 | 0 |
Net income (loss) | (43,411) | (52,562) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | (43,411) | (52,562) |
Comprehensive Income (Loss): | ||
Net income (loss) | (43,411) | (52,562) |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities and other | 0 | 0 |
Realized gains on available-for-sale securities | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | 1,612 | (4,028) |
Other comprehensive income (loss) | 1,612 | (4,028) |
Comprehensive income | (41,799) | (56,590) |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | (41,799) | (56,590) |
HSS | ||
Revenue: | ||
Revenue | 0 | 0 |
Costs and expenses: | ||
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 | 17,409 | 10,761 |
Interest expense, net of amounts capitalized | (56,361) | (57,445) |
Gains (losses) on investments, net | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 52,199 | 56,259 |
Other, net | 309 | 3 |
Total other expense, net | 13,556 | 9,578 |
Income before income taxes | 13,556 | 9,578 |
Income tax benefit (provision) | 8,670 | 10,423 |
Net income (loss) | 22,226 | 20,001 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | 22,226 | 20,001 |
Comprehensive Income (Loss): | ||
Net income (loss) | 22,226 | 20,001 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities and other | 2,354 | (311) |
Realized gains on available-for-sale securities | (385) | |
Equity in other comprehensive income (loss) of subsidiaries, net | (806) | 2,014 |
Other comprehensive income (loss) | 1,163 | 1,703 |
Comprehensive income | 23,389 | 21,704 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | 23,389 | 21,704 |
Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 482,466 | 458,604 |
Costs and expenses: | ||
Selling, general and administrative expenses | 86,486 | 83,392 |
Research and development expenses | 6,743 | 7,137 |
Depreciation and amortization | 127,823 | 121,339 |
Total costs and expenses | 390,630 | 374,837 |
Operating income | 91,836 | 83,767 |
Other income (expense): | ||
Interest income | 926 | 316 |
Interest expense, net of amounts capitalized | (7,632) | (6,956) |
Gains (losses) on investments, net | (346) | (392) |
Equity in earnings (losses) of unconsolidated affiliates, net | (1,072) | 1,492 |
Equity in earnings (losses) of subsidiaries, net | (8,788) | (3,697) |
Other, net | (418) | (97) |
Total other expense, net | (17,330) | (9,334) |
Income before income taxes | 74,506 | 74,433 |
Income tax benefit (provision) | (22,214) | (18,084) |
Net income (loss) | 52,292 | 56,349 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to HSS | 52,292 | 56,349 |
Comprehensive Income (Loss): | ||
Net income (loss) | 52,292 | 56,349 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Unrealized gains (losses) on available-for-sale securities and other | 0 | 0 |
Realized gains on available-for-sale securities | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | (806) | 2,014 |
Other comprehensive income (loss) | (806) | 2,014 |
Comprehensive income | 51,486 | 58,363 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Comprehensive income attributable to HSS | 51,486 | 58,363 |
Non-Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 69,111 | 62,210 |
Costs and expenses: | ||
Selling, general and administrative expenses | 16,565 | 11,743 |
Research and development expenses | 145 | 0 |
Depreciation and amortization | 15,707 | 12,379 |
Total costs and expenses | 78,608 | 65,313 |
Operating income | (9,497) | (3,103) |
Other income (expense): | ||
Interest income | 559 | 501 |
Interest expense, net of amounts capitalized | (1,317) | (211) |
Gains (losses) on investments, net | 0 | 0 |
Equity in earnings (losses) of unconsolidated affiliates, net | 0 | 0 |
Equity in earnings (losses) of subsidiaries, net | 0 | 0 |
Other, net | 154 | (519) |
Total other expense, net | (604) | (229) |
Income before income taxes | (10,101) | (3,332) |
Income tax benefit (provision) | 2,026 | (75) |
Net income (loss) | (8,075) | (3,407) |
Less: Net income attributable to noncontrolling interests | 806 | 380 |
Net income attributable to HSS | (8,881) | (3,787) |
Comprehensive Income (Loss): | ||
Net income (loss) | (8,075) | (3,407) |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | (838) | 1,900 |
Unrealized gains (losses) on available-for-sale securities and other | 32 | (100) |
Realized gains on available-for-sale securities | 0 | |
Equity in other comprehensive income (loss) of subsidiaries, net | 0 | 0 |
Other comprehensive income (loss) | (806) | 1,800 |
Comprehensive income | (8,881) | (1,607) |
Less: Comprehensive income attributable to noncontrolling interests | 806 | 166 |
Comprehensive income attributable to HSS | (9,687) | (1,773) |
Services | ||
Revenue: | ||
Revenue | 384,845 | 321,739 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 147,655 | |
Services | Eliminations | ||
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | (9,397) | |
Services | HSS | ||
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 0 | |
Services | Guarantor Subsidiaries | ||
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 119,326 | |
Services | Non-Guarantor Subsidiaries | ||
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 37,726 | |
Services and other revenue | ||
Revenue: | ||
Revenue | 398,340 | 359,334 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 152,303 | 147,655 |
Services and other revenue | Eliminations | ||
Revenue: | ||
Revenue | (8,802) | (9,850) |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | (8,109) | |
Services and other revenue | HSS | ||
Revenue: | ||
Revenue | 0 | 0 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 0 | |
Services and other revenue | Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 347,959 | 312,108 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 121,079 | |
Services and other revenue | Non-Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 59,183 | 57,076 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 39,333 | |
Equipment | ||
Revenue: | ||
Revenue | 51,714 | 42,947 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 45,007 | 39,071 |
Equipment | Eliminations | ||
Revenue: | ||
Revenue | (10,350) | (8,069) |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | (10,350) | (8,037) |
Equipment | HSS | ||
Revenue: | ||
Revenue | 0 | 0 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 0 | 0 |
Equipment | Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 52,649 | 46,409 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 48,499 | 43,643 |
Equipment | Non-Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 9,415 | 4,607 |
Costs and expenses: | ||
Cost of sales - (exclusive of depreciation and amortization) | 6,858 | 3,465 |
DISH Network | Services | ||
Revenue: | ||
Revenue | 82,371 | 100,614 |
DISH Network | Services | Eliminations | ||
Revenue: | ||
Revenue | 0 | 0 |
DISH Network | Services | HSS | ||
Revenue: | ||
Revenue | 0 | 0 |
DISH Network | Services | Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | 81,858 | 100,087 |
DISH Network | Services | Non-Guarantor Subsidiaries | ||
Revenue: | ||
Revenue | $ 513 | $ 527 |
Supplemental Guarantor and No_5
Supplemental Guarantor and Non-Guarantor Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 23,032 | $ 20,381 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 147,933 | 122,022 |
Net cash flows from operating activities | 170,965 | 142,403 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (240,188) | (358,543) |
Sales and maturities of marketable investment securities | 468,745 | 197,686 |
Expenditures for property and equipment | (73,929) | (87,777) |
Refunds and other receipts related to property and equipment | 0 | 77,524 |
Expenditures for externally marketed software | (7,600) | (7,148) |
Payment for satellite launch services | 0 | (7,125) |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 |
Net cash flows from investing activities | 147,028 | (185,383) |
Cash flows from financing activities: | ||
Contributions (distributions) and advances (to) from parent, net | 0 | 0 |
Repayment of debt and finance lease obligations | (9,882) | (9,368) |
Noncontrolling interest purchase | (7,312) | 0 |
Repurchase of the 2019 Senior Secured Notes | (8,046) | |
Capital contribution from EchoStar Corporation | 0 | 7,125 |
Repayment of in-orbit incentive obligations | (1,573) | (1,265) |
Net cash flows from financing activities | (26,813) | (3,508) |
Effect of exchange rates on cash and cash equivalents | (117) | (249) |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | 291,063 | (46,737) |
Cash and cash equivalents, including restricted amounts, beginning of period | 848,619 | 1,823,354 |
Cash and cash equivalents, including restricted amounts, end of period | 1,139,682 | 1,776,617 |
Eliminations | ||
Cash flows from operating activities: | ||
Net income (loss) | (43,411) | (52,562) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 43,411 | 52,562 |
Net cash flows from operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | 0 |
Expenditures for property and equipment | 0 | 0 |
Refunds and other receipts related to property and equipment | 0 | |
Expenditures for externally marketed software | 0 | 0 |
Payment for satellite launch services | 0 | |
Distributions (contributions) and advances from (to) subsidiaries, net | (78,071) | (126,559) |
Net cash flows from investing activities | (78,071) | (126,559) |
Cash flows from financing activities: | ||
Contributions (distributions) and advances (to) from parent, net | 78,071 | 126,559 |
Repayment of debt and finance lease obligations | 0 | 0 |
Noncontrolling interest purchase | 0 | |
Repurchase of the 2019 Senior Secured Notes | 0 | |
Capital contribution from EchoStar Corporation | 0 | |
Repayment of in-orbit incentive obligations | 0 | 0 |
Net cash flows from financing activities | 78,071 | 126,559 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | 0 | 0 |
Cash and cash equivalents, including restricted amounts, beginning of period | 0 | 0 |
Cash and cash equivalents, including restricted amounts, end of period | 0 | 0 |
HSS | ||
Cash flows from operating activities: | ||
Net income (loss) | 22,226 | 20,001 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (48,467) | (57,327) |
Net cash flows from operating activities | (26,241) | (37,326) |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | (240,188) | (358,543) |
Sales and maturities of marketable investment securities | 468,748 | 197,686 |
Expenditures for property and equipment | 0 | 0 |
Refunds and other receipts related to property and equipment | 0 | |
Expenditures for externally marketed software | 0 | 0 |
Payment for satellite launch services | 0 | |
Distributions (contributions) and advances from (to) subsidiaries, net | 111,020 | 144,984 |
Net cash flows from investing activities | 339,580 | (15,873) |
Cash flows from financing activities: | ||
Contributions (distributions) and advances (to) from parent, net | 0 | 0 |
Repayment of debt and finance lease obligations | 0 | 0 |
Noncontrolling interest purchase | (7,312) | |
Repurchase of the 2019 Senior Secured Notes | (8,046) | |
Capital contribution from EchoStar Corporation | 7,125 | |
Repayment of in-orbit incentive obligations | 0 | 0 |
Net cash flows from financing activities | (15,358) | 7,125 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | 297,981 | (46,074) |
Cash and cash equivalents, including restricted amounts, beginning of period | 771,718 | 1,746,878 |
Cash and cash equivalents, including restricted amounts, end of period | 1,069,699 | 1,700,804 |
Guarantor Subsidiaries | ||
Cash flows from operating activities: | ||
Net income (loss) | 52,292 | 56,349 |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | 163,032 | 127,889 |
Net cash flows from operating activities | 215,324 | 184,238 |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | 0 | 0 |
Sales and maturities of marketable investment securities | (3) | 0 |
Expenditures for property and equipment | (54,207) | (76,974) |
Refunds and other receipts related to property and equipment | 77,524 | |
Expenditures for externally marketed software | (7,600) | (7,148) |
Payment for satellite launch services | 0 | |
Distributions (contributions) and advances from (to) subsidiaries, net | (32,949) | (18,425) |
Net cash flows from investing activities | (94,759) | (25,023) |
Cash flows from financing activities: | ||
Contributions (distributions) and advances (to) from parent, net | (111,020) | (144,984) |
Repayment of debt and finance lease obligations | (9,597) | (8,608) |
Noncontrolling interest purchase | 0 | |
Repurchase of the 2019 Senior Secured Notes | 0 | |
Capital contribution from EchoStar Corporation | 0 | |
Repayment of in-orbit incentive obligations | (1,573) | (1,265) |
Net cash flows from financing activities | (122,190) | (154,857) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | (1,625) | 4,358 |
Cash and cash equivalents, including restricted amounts, beginning of period | 46,353 | 42,373 |
Cash and cash equivalents, including restricted amounts, end of period | 44,728 | 46,731 |
Non-Guarantor Subsidiaries | ||
Cash flows from operating activities: | ||
Net income (loss) | (8,075) | (3,407) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities | (10,043) | (1,102) |
Net cash flows from operating activities | (18,118) | (4,509) |
Cash flows from investing activities: | ||
Purchases of marketable investment securities | 0 | 0 |
Sales and maturities of marketable investment securities | 0 | 0 |
Expenditures for property and equipment | (19,722) | (10,803) |
Refunds and other receipts related to property and equipment | 0 | |
Expenditures for externally marketed software | 0 | 0 |
Payment for satellite launch services | (7,125) | |
Distributions (contributions) and advances from (to) subsidiaries, net | 0 | 0 |
Net cash flows from investing activities | (19,722) | (17,928) |
Cash flows from financing activities: | ||
Contributions (distributions) and advances (to) from parent, net | 32,949 | 18,425 |
Repayment of debt and finance lease obligations | (285) | (760) |
Noncontrolling interest purchase | 0 | |
Repurchase of the 2019 Senior Secured Notes | 0 | |
Capital contribution from EchoStar Corporation | 0 | |
Repayment of in-orbit incentive obligations | 0 | 0 |
Net cash flows from financing activities | 32,664 | 17,665 |
Effect of exchange rates on cash and cash equivalents | (117) | (249) |
Net increase (decrease) in cash and cash equivalents, including restricted amounts | (5,293) | (5,021) |
Cash and cash equivalents, including restricted amounts, beginning of period | 30,548 | 34,103 |
Cash and cash equivalents, including restricted amounts, end of period | $ 25,255 | $ 29,082 |
Supplemental Financial Inform_3
Supplemental Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |||
Increase (decrease) in capital expenditures included in accounts payable, net | $ (2,163) | $ 7,883 | |
Restricted Cash and Cash Equivalents [Abstract] | |||
Restricted cash | 1,000 | 1,000 | |
Research and Development Expense [Abstract] | |||
Research and development expenses | 6,888 | 7,137 | |
Capitalized Software Costs | |||
Payments to develop software | 7,600 | 7,148 | |
Other noncurrent assets | |||
Capitalized Software Costs | |||
Capitalized computer software | 99,000 | $ 97,000 | |
Capitalized software development costs for software sold to customers | 34,000 | 29,000 | |
Payments to develop software | 8,000 | 7,000 | |
Capitalized computer software, amortization | $ 6,000 | 6,000 | |
Weighted Average | |||
Capitalized Software Costs | |||
Software useful life | 3 years | ||
Contract Acquisition Costs | |||
Capitalized Contract Cost [Abstract] | |||
Unamortized contract acquisition costs | $ 102,000 | 104,000 | |
Amortization of contract acquisition costs | 21,000 | 20,000 | |
Contract Fulfillment Costs | |||
Capitalized Contract Cost [Abstract] | |||
Unamortized contract acquisition costs | 3,000 | 3,000 | |
Level 2 | |||
Fair Value Measurements | |||
Fair value of in-orbit incentive obligations | 93,000 | $ 95,000 | |
Cost of Sales | |||
Research and Development Expense [Abstract] | |||
Research and development expenses | $ 5,395 | $ 6,598 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsidiaries - Subsequent Event | May 31, 2019 |
Contribution of Satellite Communication Services | Yahsat | |
Subsequent Event [Line Items] | |
Ownership interest in subsidiary | 20.00% |
Contribution of Very Small Aperture Terminal Telecommunications Services and Hardware | Scenario, Forecast | Bharti | |
Subsequent Event [Line Items] | |
Ownership interest in subsidiary | 33.00% |
Uncategorized Items - hssc03311
Label | Element | Value |
Noncontrolling Interest [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 14,822,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 600,458,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 17,775,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 1,754,561,000 |